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JUDY WOODRUFF'S INSIDE POLITICS

Clark Announces Tax Reform Plan; Kerry Expects to Place Third in Iowa; Dean Attacks Kerry in Direct Mail Piece

Aired January 5, 2004 - 15:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JUDY WOODRUFF, CNN ANCHOR: I am Judy Woodruff. And even though we are coming to you today from Los Angeles, like many fans of presidential politics, our hearts are in Iowa. Exactly two weeks before the first big contest of this election year, most of the '04 Democrats are stumping in Iowa, including front-runner Howard Dean, who is preparing to pick up another big name endorsement.
Let's check in now with our senior political correspondent Candy Crowley. She's reporting for us today from Des Moines -- Candy.

CANDY CROWLEY, CNN CORRESPONDENT: Good afternoon, Judy. I know it's still good morning for you there in California. I just wanted to assure you, you could probably see over my right-hand shoulder John Kerry who, of course, you're going to interview a little later on. We've been covering a speech he just gave about special interests versus the interests of the middle class.

It will probably not come as a shock to him, but certainly was a disappointment to learn that a former colleague, Senator Bill Bradley of New Jersey, will tomorrow endorse Howard Dean, obviously, John Kerry's chief rival.

Bradley decided to endorse Dean, and we are told that tomorrow morning in Manchester they will make the official announcement, and then on here to Des Moines, where they will make it again, much as they did with Al Gore.

And that really is the point here. Maybe when you look at the former senator from New Jersey Bill Bradley, and said, "Well, he's going to endorse Howard Dean," it might not have that big of a pow.

But when you put that together with the fact that former vice president Al Gore has endorsed Howard Dean it's kind of a daily double. Here are the two main players in 2000 for the Democrats, now saying that they will support Howard Dean, that they endorse Howard Dean.

This is another boost for him, and another disappointment no doubt from his colleagues, including John Kerry.

WOODRUFF: Well, Candy, we are today exactly two weeks from the Iowa caucuses. You've obviously been following the candidates, talking to people on the ground there. What are you hearing? What's the state of this race right now? CROWLEY: Well, the state of the race is that obviously in Iowa, what all of them would like to do, is slow down Howard Dean's momentum.

The caucuses, as you know, Judy, are very hard to predict what's going to happen. So what everyone is doing now is reaching out for those undecided voters saying, look, you know, here's your choice.

John Kerry obviously is here selling both his experience, as well as what he calls his passion for middle-class values, and for those things, those forgotten middle-class Americans. So he is here, I'm told, to give a very passionate speech.

Prior to this one, here again it was about corporate interests and accusing the Bush White House of allowing special interests to take over legislative writing.

We have others who are out in the field. Congressman Gephardt, with the most to lose here in Iowa, campaigning very hard on his credentials, saying this is no time for on-the-job training.

The others, John Edwards giving a speech tomorrow, talking about No Child Left Behind.

All of them meeting with caucus goers, people they expect to show up on what may be a snowy 19th of January here in Iowa, trying to reach out to those undecided and move them over into their -- into their side.

What I'm told here by some experts that I talked to this morning is that they believe Howard Dean had again, the most visible, that probably the undecideds may break to the others. The problem, as you know, there are eight others, and you divide up that vote amongst the undecided, it gets pretty diffused.

So Howard Dean still the man of the moment, still the guy to beat -- Judy.

WOODRUFF: All right. It's -- No matter what the weather is, and we're reading there's a big snowstorm there, this is clearly crunch time. Those candidates have to get out. They have to meet the voters. It's down to the wire in Iowa.

Candy, thank you very much. We're going to be talking to you every day this week. Thanks very much.

Well, now we head back east to New Hampshire where Wesley Clark is trying to position himself as an antidote to Howard Dean. Today, Clark proposed what he calls the most sweeping tax reform plan in years.

CNN's Dan Lothian reports from Nashua.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN CORRESPONDENT: Wesley Clark, who has ruled out settling for the job of vice president, today was making his case for the top job.

Speaking at a presidential forum in Nashua, New Hampshire, Clark unveiled a sweeping tax reform plan which he says will benefit working families.

GEN. WESLEY CLARK (D), PRESIDENTIAL CANDIDATE: Families of four, making under $50,000 a year, will not pay a single penny in federal income tax. All tax paying families with children that make under $100,000 a year will get a tax cut.

I'll close the corporate loopholes that give companies tax breaks for moving their headquarters and revenue overseas.

Now the second thing we're going to do under my tax reform plan is go to those families with incomes greater than $1 million a year and ask that they pay a five percentage point higher tax rate.

LOTHIAN: Clark introduced a New Hampshire couple with a combined income of a little more than $45,000 a year to highlight his case of relief for American families.

The retired general trails the front-runner, Howard Dean, by a wide margin here in New Hampshire. He's hoping to make up some ground with just weeks to go before the first contests in Iowa and New Hampshire.

Dan Lothian, CNN, Raymond, New Hampshire.

(END VIDEOTAPE)

WOODRUFF: Senator Joe Lieberman is also in the Granite State. He leads the headlines in our "Campaign News Daily."

Senator Lieberman told a group of workers this morning that there is too much partisanship in Washington. Lieberman said his 30-year record in Congress proved that he can work across party lines. He also said that he would appoint Republicans and independents to posts inside his administration.

Back in Iowa, John Edwards has a full day of meetings planned with the party faithful, beginning this morning in Des Moines. Edwards planned five separate meetings today with Democratic Party activists in five different Iowa cities.

Also in Iowa today, John Kerry proposed an economic package that includes billions of dollars to help states with budget problems. Kerry also proposed an increase in the minimum wage, and he pledged to keep U.S. jobs from moving overseas.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I will scour that tax code, and when I'm president, we will not leave one reward or one incentive for one Benedict Arnold company or CEO that want to abandon the interests of America, take their money and jobs overseas. We're not going to help them to do that. (END VIDEO CLIP)

WOODRUFF: Senator Kerry joins us now from Des Moines, Iowa.

Senator, thank you very much for talking with me. We appreciate it.

KERRY: I'm glad to be with you. Thank you.

WOODRUFF: Senator, first about last night's debate. You and several of your fellow Democrats went after Howard Dean. You differed with him on taxes. You said he doesn't have the ability to stand up to President Bush.

But the consensus after the debate is that these attacks, and previous attacks, are not hurting Howard Dean. Are you confident that this is the way for you to win the nomination, to go after him?

KERRY: Well, when you say the consensus, you're talking about, you know, sort of the pundit world. Voters are listening. Voters want to know if you're going to raise their taxes or not raise their taxes.

Howard Dean is going to raise taxes on middle class Americans. If you have two kids, you're going to pay an extra $2,500, $3,000.

Now look, these are real differences. This isn't going after somebody. This is pointing out a difference in an approach to a policy choice that has an impact on people's lives.

I don't want to raise taxes on the middle class. I'm going to balance the budget, and I'm going to cut the deficit in half in four years. But I don't want to punish the middle class for George Bush's mistakes.

WOODRUFF: But aren't you put then, Senator, in a position of defending the president's tax cut plan?

KERRY: No, I'm not.

WOODRUFF: Defending the president?

KERRY: I'm not. No, I'm not, because the president -- I voted against the president's tax cuts.

Because the president's tax cut includes an enormous tax cut for the wealthiest Americans that we can't afford. I'm going to roll that back. I'm going to roll back the tax cut for the wealthy so we have the money. For people earning more than $200,000 a year, they're not going to get the tax cut.

We're going to invest in health care for Americans. And we're going to invest in education, and other things. And we're going to shut down the loopholes that let companies go to Bermuda, and use tax advantages to dump the Bill on the rest of America. I think that's wrong. WOODRUFF: Senator, what about Wesley Clark's plan that he outlined today to eliminate taxes for all families earning $50,000 and under, and to cut taxes for all families with children under $100,000? What about that proposal?

KERRY: I haven't seen the proposal. Everybody's going to have their own proposal.

What I know is we need to be able to invest in education. We need to be able to invest in health care for America.

I have a health care plan that will lower the cost of health care for all those people who work today who get their health care at the place they work. Because employers and employees alike are going crazy with the increased premiums, increased deductibles, increased copays, and they can't afford it anymore.

We've got to get control of health care costs. And I give people an enormous tax cut by actually reducing the burden of their health care.

WOODRUFF: Senator, you're out there talking about the economy and about taxes at a time when the economy seems to be roaring back. We've got record low interest rates. You've got productivity is up. The economy's growing. Even unemployment is dropping.

Are you sure that this isn't an issue that the Democrats really can't win on up against the president?

KERRY: No. Because corporations have had a 46 percent increase in their profits, but the workers of America, people who earn their wages, have had only a three cent increase. And that is literally the lowest amount in 40 years.

It's also a jobless recovery. I mean, George Bush's recovery works for the company but it doesn't work for the people in America who are looking for work. And he has the worst job creation record since Herbert Hoover was president.

I hope we have a great economy next year. The economy is not the only issue.

We need health care for Americans. We need to protect the environment. We need to be fixing our schools. And changing No Child Left Behind, because the president is leaving millions of children behind.

There is an extraordinary agenda, and I intend to lead and address that agenda.

WOODRUFF: Senator, quickly, a question about politics in Iowa. Don't you need to come in at least second in Iowa in order to preserve your candidacy in New Hampshire, the next contest?

KERRY: I don't believe -- look, David Yepson (ph), who is the expert on Iowa, says there are three tickets out of Iowa. And I've always campaigned with the notion that I wanted one of those tickets. But most people have suggested that I'm, you know, going to be in third place.

I think we're moving out here. I feel a lot of energy. I feel terrific about my campaign. People are listening. We're working hard. And it's the voters out here who are going to decide. And I respect that. I think other people should, too.

WOODRUFF: So you're saying you can come in third in Iowa and still be in a strong position in New Hampshire?

KERRY: I'm not talking about places, positions. I'm talking about what matters to the people of Iowa. I'm going to work for every vote that I can work for. I'm going to do the best I can. And the voters will decide where we come in. So we don't need to pre-decide it today.

What I'm going to do is take my message about fairness, about making the economy work for Americans, about having a president who's willing to fight...

WOODRUFF: All right.

KERRY: ... for working people in America who are having a harder and harder time making ends meet.

WOODRUFF: You are right, Senator. It's the voters who are going to speak. And we thank you very much for talking with us today. We'll see you on the campaign trail.

KERRY: Nice to be with you.

WOODRUFF: Thank you.

KERRY: Indeed. Thank you.

WOODRUFF: Well, even as all the rivals of Howard Dean try to take him down, the spotlight on him keeps getting bigger.

Up next, Dean as a cover story. We're going to get a behind the scenes take on the candidate, and whether all the publicity he's getting is a mixed blessing.

Plus, a new twist on gun politics, with help from a major retailer.

And later, President Bush revisits a centerpiece of his domestic agenda. Will education reform help or hurt him on election day?

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. BILL RICHARDSON (D), NEW MEXICO: I made a promise to the people in New Mexico I would stay as governor. I love this job.

You know, I'd love being up there with you all the time, but being in New Mexico full time, governor, is being a great job. We made a difference. We've cut taxes. We've improved education, improved our schools.

I'm happy where I am. So I'm not -- I'm going to be like General Clark and issue a statement that I'm staying where I am.

(END VIDEO CLIP)

WOODRUFF: One day after Wesley Clark seemed to flatly rule out a run for vice president this year, New Mexico Governor Bill Richardson told me colleague Wolf Blitzer that he also would reject any offer to be the number two Democrat on the ticket.

You can see Governor Richardson's full interview later today on "WOLF BLITZER REPORTS."

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: Democrat Howard Dean scored a media coup this week. Dean's rise from the back of the pack to party front-runner is the cover story for both "TIME" and "Newsweek."

The "TIME" article was written by Karen Tumulty. It focuses on the Howard Dean that the public may not know. Karen Tumulty is with me now from Washington.

All right, Karen, you got to spend, what, two hours with him...

KAREN TUMULTY, "TIME" MAGAZINE: That's right.

WOODRUFF: ... flying back to Vermont just before new year's? What were you trying to learn, to glean from him when you were with him?

TUMULTY: Well, you know, Judy, Howard Dean has had a bumpy few weeks here. I mean, he's said so many things that have sparked controversy, that have, you know, seemed to contradict his own record, that have had people asking, you know, what was he thinking?

So we decided that we ought to ask him what he was thinking. And it turned out to be a pretty revealing interview.

When I asked him how he thinks, how he makes decisions, he said, you know, "You ought to look back at the way I used to practice medicine with my wife in Vermont." He said, "To reach a diagnosis she would always, you know, go through all the possibilities and eliminate them and finally come to her conclusion."

He said, "I'm a real instinctual thinker. I'm somebody who leaps a few steps ahead. Sometimes I know what I'm going to do even before I know why I'm going to do it." Which is particularly interesting because the one person that you can think of who is, also prides himself on his gut, has little patience for process and likes to get right to the solutions is George W. Bush.

WOODRUFF: Well, it's often said that President Bush doesn't necessarily like to be reflective, if you will, about himself and his inner thoughts.

What did you find in that regard about Governor Dean? Does he like to reflect at length about his thought processes and so forth?

TUMULTY: Oh, he actually does, indeed. And he talks a lot about, for instance the fact that, you know, for a doctor he does seem to lack a little bedside manner on the campaign trail.

He said that, you know, while President Bush and Bill Clinton are politicians who are known for their ability to express great empathy with voters from the get-go at a campaign appearance.

But he as a doctor had always learned to keep a certain detachment, because he says once you get sucked into people's problems you find yourself in a position where it's harder to fix them.

WOODRUFF: That's interesting, especially in contrast to former President Clinton.

Karen, clearly it's not only Republicans who are out there saying that Howard Dean can't beat George W. Bush. There are some Democrats who are worried about that. What does he say about all the worries, the skepticism out there on the part of his own party?

TUMULTY: Well, he says that the very things that people are criticizing him for, and in particular this tendency to just say what he thinks, that those are the things that people like about him. And he does not -- he does not seem willing or even for that matter, able to stop doing it.

And in fact, in our "TIME"/CNN poll it suggested there's some evidence in there that he's right, that while his critics are calling him impulsive and too quick to anger, we looked at voters. And while a lot of voters still don't have a lot of information about Howard Dean, they said they do generally regard him as a patriotic, likable person.

And he also, interestingly enough, is gaining ground against President Bush in a one-on-one match up, despite the fact that President Bush has a pretty good month, between catching Saddam and seeing the economy coming back.

WOODRUFF: He surely has.

Karen, you covered so many public figures, political candidates. How do you think Howard Dean is going to wear with the public as they get to know him better? TUMULTY: Well, you know, a lot of us were predicting his demise a year ago. And I think that it's gotten to the point where we should just stop predicting and see what happens. Because, in fact, the voters will start speaking two weeks from today.

But, you know, as he campaigns, the crowds have gotten bigger, they've gotten more enthusiastic. It may be that there's a limit to his appeal, but so far he does not seem to have come anywhere close to that limit.

WOODRUFF: All right. Karen Tumulty. She got to spend an unusually long period of time with Governor Dean on the way back to Vermont just before New Year's Day.

Karen, thanks a lot.

TUMULTY: Thank you, Judy.

WOODRUFF: We appreciate it.

Still ahead, the new year has now arrived, but the old attacks continue. Just how negative is the campaign for president getting? The "National Journal's" Chuck Todd joins me when we return.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: It's time for our weekly Monday feature on INSIDE POLITICS. Chuck Todd is in Washington with today's "Hotline Tip sheet." Chuck is the editor in chief of the "Hotline," an insider's political briefing produced daily by the "National Journal."

Hello Chuck. First of all, let's talk about negative campaigning. We all know that Howard Dean has been urging his colleagues not to criticize each other. But you've come across an interesting piece of direct mail.

CHUCK TODD, HOTLINE EDITOR IN CHIEF: Well, you know, that's why we love to monitor direct mail so closely, because this stuff usually flies under the radar.

But in the same week last week, Judy, where Howard Dean was asking Terry McAuliffe of the DNS to step in and try to get the other Democrats to stop attacking him so hard, he dropped this direct mail piece, an individual hit, you know, an attack piece, direct mail piece, on John Kerry to Iowa Democratic caucus goers, trumpeting the fact that people in Massachusetts, in a poll, were picking Dean over Kerry.

In fact, as you'll see on screen there, it says, "Democrats who know John Kerry best have made their decision: They're supporting Howard Dean." And then the kicker is, "If Kerry can't win his own home state, he'll never beat Bush across America."

I really rough piece. It's the first direct mail piece we've come across that Dean has individually gone after just one candidate.

What's interesting is that in an interview, you know, he did all these newsmagazine covers, as you noted before. He did an interview in "Newsweek" where he was asked about some of the more negative direct mail pieces, not this one specifically, but another one.

But here is his response. He goes, "Oh, I don't see the mailings. I'm talking about being on the stump. God knows what's going on in the mailings."

Well, God only knows, and luckily, so do some of our little folks out there in Iowa who share their direct mail stuff with us.

WOODRUFF: It will be interesting to see what the Dean campaign has to say about this one. And we'll try to find out.

All right, Chuck, what about the race for second place in the Iowa caucus? As you saw some of the back play, if you will, going on at the debate last night. What about that?

TODD: Well, it's actually 2000 races for second place. And it's really this second choice campaigning that's going on.

You saw -- the best example of it at yesterday's debate was when Howard Dean almost fell over himself to be nice to John Edwards again. Why? Well, because this whole threshold rule with 15 percent at a precinct caucus in order to qualify to be a delegate comes into play.

Anyway, if you don't get your 15 percent then these caucus goers get to re-caucus and get to re-support somebody, and they pick their second choice.

Well, right now the hottest, the candidate that Dean and Gephardt and Kerry, they're all clamoring to be buddying up with Edwards, but if you notice Gephardt and Edwards were nice with each other. All of a sudden, they're playing nice because they're hoping the Iowa supporters notice that they care and they want to be second choice.

And there's a lot more going on at that debate, I think, than people picked up at first. But almost re-watching the debate, re- reading it, that may have been the strategy for a lot of these campaigns, was this whole idea of becoming the second choice.

WOODRUFF: All right. And very quickly, Chuck, off the campaign trail, what are you picking up about gun control?

TODD: Well, what's interesting, is that Americans for Gun Safety, which they don't like to use the words gun control, they believe they're for gun safety. It's more of a Democratic leading gun group, they would say centrist leaning.

Well, they just struck a deal with Sports Authority, which is the third largest retailer of guns. Every fifth (ph) of every gun sold is going to get these flyers in there about gun safety and it's from Americans for Gun Safety, not surprisingly from the NRA. It's sort of using a trick the NRA's been doing for years to build up support for their membership, which was doing gun safety lessons and youth gun groups and stuff, it's sort of getting people -- this is a first attempt from this Americans for Gun Safety group to try to get in on the grassroots level and try to fight on the NRA's turf a little bit.

We're going to be keeping track to see if it has anything.

WOODRUFF: So you're watching much more than just the caucuses and the primaries?

TODD: Always.

WOODRUFF: OK, Chuck. Chuck Todd, thanks very much.

And let you know that the "Hotline," an insider's political briefing, is produced daily by the "National Journal." You can go online to NationalJournal.com for subscription information about the "Hotline."

Don't call it campaigning, but President Bush is on the trail today, touting his education reforms and raising money. But are the president's plans working? Coming up, Republican National Chairman Ed Gillespie is our guest.

Plus, targeting Howard Dean. What can his rivals do to bring down the Democratic front-runner? We'll get the tape from Iowa.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: It's been two years since President Bush signed sweeping education reform. But is his law making the grade?

REP. RICHARD GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: And there's only one way to fix the No Child left Behind Act, and that's to leave George Bush behind.

ANNOUNCER: The candidates and your taxes.

CLARK: My tax reform plan is going to give a tax cut to all taxpaying families with children making under $100,000.

KERRY: I'll roll back the tax cut for the wealthy Americans, not the one to the middle class Americans.

SEN. JOE LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: I'm the only candidate up here who goes beyond the existing tax cuts.

ANNOUNCER: We'll break down the plans and what they mean to your pocketbook. Now live from Los Angeles, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE) WOODRUFF: Welcome back. President Bush is in Missouri this hour. His first political swing of this election year. He's there to raise campaign money, an expected $2.7 million. And to defend his No Child Left Behind education reform initiative. Democrats are charging that the president has not made good on his promises, two years after signing the measure into law. CNN's Kathleen Koch is with Mr. Bush in St. Louis. Hi, Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Hi, Judy. Education is a very important domestic issue for Americans according to recent CNN poll. Second only behind fighting terrorism. So it's no surprise that as this election year kicks off that President Bush would be going around the country, here, obviously in Missouri today touting his performance on that.

And he does say that the No Child Left Behind act signed two years ago and passed with very strong bipartisan support in Congress, he says it is a success. He came here to this school called the Laclede Elementary School, what President Bush considers a blue ribbon elementary school, meaning that it is performing well above and beyond the average in the top ten most improved schools in the state.

He met with some fourth graders before he went in to begin a program, talking with parents, talking with teachers about this act. And basically what the act does is it tries to raise improvement in schools nationwide by penalizing those schools that do not make the grade, that don't reach targets that they are supposed to reach. President Bush says here this school is an example of how the act is working. And making sure that federal education dollars are well spent.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We've increased budgets. The Title I money is up by 43 percent since 2001. 41 percent the teacher training money is up. The reading program money is up by four times. But finally the federal government has said why don't you show us whether or not that money is being well spent. Show us whether or not you believe every child can learn. Show us whether or not objectives are being met.

(END VIDEO CLIP)

KOCH: Judy, as you pointed out, Democratic politicians like Senator Ted Kennedy, presidential candidate Howard Dean, are saying that the president is not making good on his commitment with no child left behind if the administration is not fully funding the act.

Many states are starting to opt out of the money that the federal government is offering saying it's just not enough to meet the rigorous requirements. That they would rather go it alone. But in a lot of poor cities, a lot of areas where they really don't have a lot of choice they say that this is going to, in essence put a very large tax on the cities.

They're going to have to raise property taxes, cut in other areas in order to meet these mandates and keep their schools funded -- Judy.

WOODRUFF: Kathleen, that's right. We're hearing noise from school districts all over the country and from some states saying that they are wanting to opt out of that. Kathleen Koch traveling today with President Bush to St. Louis. Thanks, Kathleen.

As Kathleen just said Howard Dean has been critical of the president's education plan. He put out a statement today on it. He is using the No Child Left Behind, Howard Dean is, not only as a weapon against Mr. Bush, but also against his fellow Democrats. Senior political analyst Bill Schneider looks at the evolution of this issue.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Two years ago, 95 percent of Democrats in Congress voted for President Bush's education reform bill. Senator Kennedy's blessing was crucial.

SEN. EDWARDS KENNEDY (D-MASS): I was proud to stand with President Bush as he signed that reform into law.

SCHNEIDER: A year later, Senator Kennedy withdrew his blessing.

KENNEDY: The money isn't there. Needed resources for education are denied.

SCHNEIDER: Now schools around the country are facing penalties for failing to make adequate yearly progress in student achievement. Their complaint -- the No Child Left Behind bill provides money to test children, but not enough to teach them. Democrats running for president are accusing President Bush of not putting his money where his mouth is.

LIEBERMAN: We passed something called the No Child Left Behind act then George W. Bush left behind $6 billion that we promised in the ads.

SCHNEIDER: President Bush claimed in his radio address Saturday to have increased federal funding for elementary and high school education to the highest level ever. Democrats counter he has not spent as much money as the bill called for. We were duped, say Democrats.

SEN. JOHN KERRY (D-MASS), PRESIDENTIAL CANDIDATE: But there's nothing in the No Child Left Behind act that requires it to be implemented the way this administration is doing it.

SCHNEIDER: Then why did they vote for it?

REP. RICHARD GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: I voted for the bill because I thought it was the only way to get money into public education under a Bush presidency.

SEN. JOHN EDWARDS (D-NC): I voted for No Child Left Behind because I believe in accountability. I believe in standards. SCHNEIDER: Now Howard Dean has seized the issue to open a second front, not just against President Bush, but against the other Democrats.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I have two big policy differences with almost everybody up here. I opposed the Iraq war, with the exception of Dennis and Carol, everybody else supported it. I opposed No Child Left Behind. I don't know how Carol would have voted. But everybody else supported it.

SCHNEIDER: In other words, fools, dupes, they let President Bush suck them in.

DEAN: What has happened to so many Democrats in Congress is they've been co-opted by the agenda of George bush.

(END VIDEOTAPE)

SCHNEIDER: Many Democrats say they now see a hidden agenda in No Child Left Behind. If most public schools are declared failing, which some experts say could happen, then the bill may destroy public education. Dean's message: Fools! Dupes! Why did you trust this guy? Judy?

WOODRUFF: That's right. We heard him go after his fellow Democrats last night. All right, Bill. Thank you very much.

A new front. In New Hampshire, meantime, Wesley Clark says you don't need to read his lips to understand his tax reform plan. How do his rivals' tax proposals compare?

Also ahead, the Bush advantage. We'll look at his easygoing primary season. And talk about the challenges ahead with RNC Chairman Ed Gillespie.

And speaking of challenges we'll have the latest from South Dakota on a competitor for Tom Daschle's senate seat.

(COMMERCIAL BREAK)

WOODRUFF: In Bill Schneider's report a moment ago, we saw snippets of the '04 Democrats debating in Iowa yesterday. The forum highlighted the lines of attack that Dean's rivals plan to use against him in the coming days.

Ron Brownstein of the "Los Angeles Times" is in Iowa. He was also there yesterday, two weeks today before the lead-off caucuses. Ron, you were there for the debate. Was Dean hurt by any of these lines of attack that the others used?

RON BROWNSTEIN, "LOS ANGELES TIMES": I think we're going to have to wait and see on that Judy. First of all, it's just nice to be inside after yesterday. I think, you know, John Edwards is out giving a speech the last few days that he calls his closing argument.

In fact, what we saw at that debate and what we're seeing on the stump today in Iowa is all of the Democrats chasing Dean trying to lay out their closing arguments. Some of the things we heard yesterday. Dick Gephardt went after Dean on his sort of lunch bucket economic agenda, trade, Medicare, Social Security, arguing that he would not stand up to core Democratic values on those issues.

John Kerry, yesterday, argued that Dean was unsteady, changing his positions on foreign policy. And today on your show really signaled what the second front is going to be, arguing that he would raise taxes on the middle class.

John Edwards tried to separate himself from Dean and the rest of the field by arguing that anger isn't enough to win the election. We need more specifics as Democrats. And also making the case that -- trying to turn around his biggest weakness into a strength by saying that he is -- the lack of experience really gives him a better chance of changing Washington.

Interestingly, Joe Lieberman, I think, was the one who makes a head-on ideological argument, as you watch that debate yesterday he argued that Dean was wrong in opposing the war, he was wrong in opposing No Child Left Behind, he's wrong in backing away from support for free trade and he's wrong on taxes.

So the most frontal head-on ideological argument. All different but all trying to find a line of attack, as you say, that works.

WOODRUFF: And yet, Ron, Lieberman pretty much is ceding Iowa to the other candidates. So what's that all about.

BROWSTEIN: I think Joe Lieberman was smart enough to realize that the Iowa debate was a national forum. And probably Wes Clark, who we didn't mention, could have been here, as well. You know, Clark is beginning to lay out, I think, what his line of argument will be if he is the candidate against Dean today.

We've seen him in the past, like John Kerry, argue that he's unsteady on foreign policy. Judy, intriguingly today the tax reform policy that Clark put out would eliminate taxes on families earning -- federal income taxes -- on families earning $50,000 a year or less. That probably not a coincidence when the Democrats are prepared to argue that Howard Dean would raise taxes on those same families.

So I think even in the case of Wesley Clark who isn't here, you're getting a pretty good sense in the last 24 hours how he will run against Howard Dean if he can get it to a one-on-one race after February 3.

WOODRUFF: And I understand that Dean has said that he will put out his own tax plan for the middle class, but he has yet to do so.

BROWSTEIN: Yes, he has said that's going to come somewhere down the road. The position he's in right now, of course, is that Dean and Gephardt are the two candidates arguing for repealing all of the Bush tax cut, not just the provisions affecting the most affluent families. And what you've got is Edwards, Kerry, Lieberman and Clark all arguing that would penalize the middle class. And again, Clark today gave himself a new argument. He's not only saying that Dean would raise taxes on the middle class, he's saying he will cut taxes on the middle class. So again sharpening the contrast that will be available to him if he can get the race down to the two of them.

WOODRUFF: And, very quickly, Ron, on the point Dean made yesterday on No Child Left Behind on education, pointing out his disagreement with most of the other Democrats, is that something that is likely to help him in Iowa or New Hampshire (UNINTELLIGIBLE)?

BROWSTEIN: Yes. You can tell that it's helping him by the fact that except for Lieberman the other Democrats are moving in his direction. Kerry, Edwards, Gephardt who voted for the bill, are much more critical of it. Moving away from the accountability provisions it imposed toward the position teachers unions which are critical of it.

WOODRUFF: OK, Ron Brownstein in a much warmer place than he was yesterday talking to us outside in the snow and wind on the streets of Des Moines. Ron, thanks very much. We'll be talking to you a lot in the week and days and day to come.

BROWSTEIN: Thank you, Judy.

WOODRUFF: While Ron was talking about education he was talking about taxes as well. Taxes, we know, already one of the top issues of the '04 campaign.

On the stump, President Bush jokes that his Democratic opponents think that, quote, "any time is a good time to raise taxes." Bruce Morton takes a closer look at exactly what the Democrats are proposing.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): (AUDIO GAP) tax reform plan in a New Hampshire, families of four or more making under $50,000 would pay no federal income tax. And...

CLARK: Secondly, my tax reform plan's going to give a tax cut to all tax-paying families with children making under $100,000, because all working families are being squeezed by George W. Bush's economy.

MORTON: To pay for it Clark says he'd eliminate tax breaks for companies that move their headquarters abroad and families making over $1 million would pay a 5 percentage point higher rate of whatever they earned over that million dollar mark.

Where do the other stand? John Kerry would roll back President Bush's tax cuts for the wealthy only.

KERRY: I roll back the tax cut for the wealthy Americans, not the one for the middle-class Americans.

MORTON: Joe Lieberman, like Kerry, would keep tax cuts for the middle class and adds this.

LIEBERMAN: I'm the only candidate who goes beyond the existing tax cuts and would give 98 percent of taxpayers a new income tax cut.

MORTON: Howard Dean would repeal all of Bush's cuts and spend the money on health care.

GEPHARDT: I agree with Howard on this. I think we've got to offer a real choice if we're going to beat George Bush. I'm ready to say to the people of the country, if you like the Bush tax cuts, vote for Bush. But if you want health care that can never be taken away from you, vote for me.

MORTON: John Edwards is for tax cuts for the middle class. Al Sharpton would repeal the Bush tax cuts and use the money to reduce the deficit. Carol Moseley Braun would repeal most of Bush's cuts and support a balanced-budget amendment to the Constitution, which used to be a Republican idea. Dennis Kucinich would repeal the Bush tax cuts and increase taxes on corporation.

All of them want to help the middle class. Some stress tax cuts, some stress health care.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: And we have a quiz for you on all of that tomorrow.

Meantime checking the second edition of our "Campaign News Daily" on Monday, a new study finds that professors really do love Howard Dean, but they also like President Bush.

According to the center for Responsive Politics, Howard Dean received more than $700,000 from university employees in the first three quarters of 2003. California and Harvard instructors were the top givers to Dean. President Bush, though, received more than $680,000 lead by donors at the Universities of Texas and Cincinnati.

GOP sources tell CNN that former South Dakota Congressman John Thune will challenge Senate Majority Leader Tom Daschle this November. Thune is expected to make his plans official later tonight. He narrowly lost a challenge to South Dakota's other senator, Democrat Tim Johnson, in 2002.

The NRA has compiled a wide-ranging list of people and groups that it considers to be opposed to the rights of gun owners. The list singles out supporters of the Brady Gun Control Law, and includes Singer Britney Spears, the NFL's St. Louis Rams football team, Hallmark cards, and the United Methodist Church. All enemies of the NRA, presumably.

For George W. Bush, the presidential primary season is a lot different from four years ago. Coming up, a look back on what was for a short while, at least, a bitter, hectic race.

(COMMERCIAL BREAK)

WOODRUFF: This year so far all the sound and fury in the presidential primaries comes from the Democratic side. President Bush is unopposed. That's a luxury his father didn't enjoy during the 1992 campaign. And a big change from what George W. Bush faced four years ago.

Our senior White House correspondent John King looks back.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Just two weeks now to the Iowa caucuses. And for this candidate not a worry in the world.

KEN DUBERSTEIN, FORMER REAGAN CHIEF OF STAFF: He can focus on the main prize which is winning the presidency, not simply the nomination.

KING: Mr. Bush, of course, remembers a tough primary battle with Senator John McCain four years ago. And this from 1992, when Pat Buchanan challenged his father.

DAN BARTLETT, WHITE HOUSE COMM. DIR.: He's been through primaries before. They're difficult. They're testing. So he's fortunate and feels good about the fact that the party's united behind his agenda.

KING: Mr. Bush is on track to raise more than $170 million for the primary season. But with no opposition, he can focus his travel on general election targets. In 2003, for example, Mr. Bush made five visits each to Florida, Michigan, Missouri and Ohio, and six trips to Pennsylvania, spent his primary campaign funds on general election priorities like building voter lists and preparing ads to rebut Democratic campaign attacks.

DUBERSTEIN: It is not going to be a blowout. It is not going to be Mondale '84 or McGovern. But again, I'd rather be with George W. Bush.

KING: Top aides insist Mr. Bush is paying little attention to the Democrats.

BARTLETT: He has people who do that for him. And we're innocent bystander at this point.

KING: Other Republicans think the sometimes bitter Democratic contest benefits Mr. Bush.

BILL MCINTURFF, REPUBLICAN POLLSTER: I think the rhetoric is way too hot and I think they're going to have enormous trouble kind of coming out of their primary and appealing to those swing voters with the language they've been using to capture the nomination.

KING: But Democrats hope a tough primary campaign yields a tested candidate. JOHN PODESTA, FRM. CLINTON CHIEF OF STAFF: Because they went through that task and because they went through that pressure of having to deal with the other candidates. And I think that that will give them some armor in going into a fight against a very tough incumbent president.

KING (on camera): Four years ago then-Governor Bush said he did benefit and learn from the McCain challenge. But this time around President Bush tells aides he's gratified to have no worries in the primary season.

John King, CNN, the White House.

(END VIDEOTAPE)

WOODRUFF: Meantime, a proposed television ad critical of President Bush and featuring imagery of Adolf Hitler has sparked a political backlash. The ad was entered in a contest hosted by the liberal interest group MoveOn.org. The ad was not sponsored by the group but it was one of many that could be viewed for two weeks on its Web site.

Well, the head of the Anti-Defamation League today called the video, quote, "vile and outrageous." The co-creator of the contest says Republicans are misrepresenting the ad. He tells CNN, quote, "It is flat-out wrong to say that it is a MoveOn.org ad or that we endorsed it."

With me to talk more about this and other issues is Ed Gillespie, chairman of the Republican National Committee. Ed Gillespie, good to see you again.

ED GILLESPIE, RNC CHAIRMAN: Judy, good to see you, too. Thank you.

WOODRUFF: I want to ask you about this ad. You've been out talking about it. But, in fact, MoveOn.org says it was only on the Web site for two weeks. It was one of 1500 proposed ads. Maybe at most a few hundred people saw it. What's the big deal?

GILLESPIE: Well the big deal is what they said when they started this contest was that they would not post anything on their Web site that they didn't consider to be appropriate for television. They posted the ad you referenced there and a second ad that directly compared President Bush to Adolf Hitler, both of them being deemed apparently by MoveOn.org to be appropriate for television.

And it's not appropriate for television. It's not appropriate political discourse. Every one of the Democratic candidates running for president today should repudiate this. They should join the Simon Wiesenthal Center in urging MoveOn.org to apologize for posting this ad on its Web site, on its official Web site. And they should (UNINTELLIGIBLE) that because they are the ones who benefit from MoveOn.org's efforts to defeat the president in this election year.

WOODRUFF: But MoveOn.org took the ad, the proposed ad, off of its Web site more than a week ago...

(CROSSTALK)

WOODRUFF: It is now running on the Republican National Committee Web site. And I guess my question is are you not prolonging it by leaving it on your Web site?

GILLESPIE: Look, Judy, I've mentioned for awhile now that on the left, and part of the Democratic political attacks have gone beyond what has been ordinary political discourse and amounts to political hate speech.

This is a furtherance of that political hate speech and I think it is worth highlighting. This is the kind of attack -- these are the kind of tactics that they are willing to stoop to.

MoveOn.org has said they will spend $7 million to air a commercial. I don't think they should air this commercial. But I want the American people to know that these are the kinds of things that they consider to be appropriate for airing on television. That's what they said would be the criteria for posting these submissions on their Web site, not one but two ads in this regard.

WOODRUFF: Ed Gillespie, I want to turn you to something else. And that is the Democrats debate in Iowa yesterday.

Howard Dean among other things said he disagrees with the president's No Child Left Behind initiative. He disagrees with other Democrats who voted with the president to enact it. He calls it an unbelievable intrusive mandate. He talked about an experienced, qualified teacher who had been declared unqualified by the federal government.

My question is, is this, No Child Left Behind, going to end up being a minus for President Bush or a plus?

GILLESPIE: Oh, absolutely not. The No Child Left Behind Act is a major asset and people appreciate having accountability. I have three children, I want to have accountability for how they're educated. Everyone who has children in schools want their children to have -- want to have some accountability and to have some influence.

And make sure that the teachers are teaching, that our children are getting the best education possible, and that there are standards by which we can measure that.

There are a lot of people in an entrenched educational establishment who are opposed to that and Howard Dean is reaching out to those, trying to court them as part of his effort to win the Democratic Party primary nomination. It's understandable.

But when it comes to making sure that our schools are accountable, that we're improving our public education system in this country, the president has a great bill here to talk about.

WOODRUFF: Howard Dean was also critical of the president's tax cut. In particular, he said 60 percent of Americans only got about a -- $300 back from the federal government. And he said when you figure in higher property taxes, higher college tuition, higher health care premiums and so on, he said most middle-class people are worse off under this president.

GILLESPIE: You know, Howard Dean -- none of the candidates that we heard from last night have any plans to help to bring down the cost of college education, to bring down the cost of health care the way President Bush is doing in passing an affordable prescription drug benefit and trying to root out all these frivolous lawsuits and costs of liability in the medical system today.

The fact is, the president's tax relief provided to a family of four with an income of $40,000, over $160 a month in higher take-home pay that Howard Dean and other Democrats running for president would take away from them.

That's wrong. That's a mistake. The fact is that we are seeing a rebound in our economy right now, we're seeing momentum added to the recovery. We saw the highest jump in manufacturing employment we've seen in 20 years. We've seen the highest growth in GDP that we've seen in 20 years. And to impose taxes on the economy right now would be an absolute wrong policy.

WOODRUFF: We're going to have to leave it there. Ed Gillespie, the chairman of the Republican National Committee. Two very different views of the middle class and how they've been affected. We know this debate's going to continue. Ed, thanks very much. Good to see you.

GILLESPIE: You bet. Thank you.

WOODRUFF: Back in 1972, George McGovern's campaign slogan was "Come Home, America." Now, a famous folk singer has written a song for John Kerry that goes, "America, come home." Peter, no Paul, and Kerry, when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

WOODRUFF: Willie Nelson may be singing the praises of presidential candidate Dennis Kucinich, but Senator John Kerry has a celebrity singer on his side, too. Peter Yarrow of Peter, Paul and Mary fame sang a new song at a Kerry even in Iowa over the weekend. The chorus is "America, Come Home."

Answering questions, Yarrow said he absolutely disagreed with Kerry's vote in favor of the war in Iraq. But that didn't bother Kerry, though, apparently, who said, "He understands my point of view and I understand his."

That's it for INSIDE POLITICS this Monday. I'm Judy Woodruff. "CROSSFIRE" starts right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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