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PAULA ZAHN NOW

Interview With Joe Lieberman; Interview With Wife of John Edwards

Aired January 26, 2004 - 20:00   ET

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

PAULA ZAHN, CNN ANCHOR: Good evening. Welcome. Thanks for joining us on . I'm Paula Zahn.
The world, the news, the names, the faces, and where we go from here on this Monday, January 26, 2004.

(BEGIN VIDEOTAPE)

ZAHN (voice-over): The homestretch in New Hampshire, less than 24 hours left. Is there a clear front-runner in the nation's first primary? And which Democrats won't survive? We're behind the scene at crunch time.

A chief weapons inspector's bombshell and his doubts that WMDs existed in Iraq before the war. Who's to blame for the faulty intelligence?

The awards season is in full swing. One day before the Academy Award nominations, a man who has seen it all tells us what to expect from this year's Oscars.

(END VIDEOTAPE)

ZAHN: Well, we've got a full plate of politics for you, with just four hours to go until the first ballots are cast in the Granite State.

I'll be talking with Joe Lieberman, hoping to finish in the top four. I'll also be chatting with Elizabeth Edwards, the outspoken wife of the presidential candidate John Edwards. And we'll even tell you what former New York Mayor Rudy Giuliani, a Republican, is doing up there.

But first, here are some of the headlines you need to know right now.

It's downright nasty out there. Dangerous winter weather is hitting the Eastern United States. The storm is being blamed for five traffic deaths is North Carolina, which is now under a state of emergency. Heavy snow is expected all along the Eastern Seaboard.

The jury in the Martha Stewart trial was seated today. The panel of eight women and four men includes a minister, a computer technician, and a pharmacist. Opening statements begin tomorrow.

The newest rover to land on Mars continues to send back amazing pictures today on its third day. Opportunity beamed back 180-degree color panorama, showing the small impact crater in which it landed. Small grains of dust are visible when controllers zoom in on those photos.

We begin in New Hampshire tonight. With less than four hours to go before the primary, the candidates are spending every last second campaigning in a final push to win. The latest CNN/"USA Today"/Gallup poll shows John Kerry in the lead with 36 percent. Howard Dean is in second place with 25 percent. Wesley Clark is in third with 13 percent.

Kerry is trying to pull away from the competition, but he is also fending off some sharp new attacks by Dean. The Vermont governor is blasting Kerry's decision to support to war in Iraq, but voting against the Gulf War in 1991.

So, who will New Hampshire voters choose tomorrow? For some predictions, we turn now to a pair of Democratic experts. Joining me now from Manchester, Paul Begala and James Carville of CNN's "CROSSFIRE." They're in the war room. Paul and James made that concept famous in the 1992 Clinton presidential campaign. And I might say, having spent in the war room time with you back then, you're considerably more relaxed at this election time.

Welcome, gentlemen.

PAUL BEGALA, CO-HOST, "CROSSFIRE": Thanks, Paula.

JAMES CARVILLE, CO-HOST, "CROSSFIRE": Thank you. Thank you.

(LAUGHTER)

ZAHN: So, Paul, what is the feeling up there? What is the expectation?

BEGALA: Well, if you talk to the handlers -- and James and I have been doing that all day today -- they're nervous. They're about as nervous as a hooker in church. This is where it comes down to.

The polls are notoriously unreliable. They all show Kerry in the lead. So the expectation is that Kerry wins and he wins pretty big. But, you know, Howard Dean, I think, most people believe, has bottomed out. Can he climb back up. In a state where he was once ahead by 32 points, now he'll be happy to just get a strong second.

ZAHN: So, James, when you're in the war room, do you get a sense that the candidates believe these polls, or they really do understand how unpredictable independent voters are in New Hampshire?

CARVILLE: Yes.

I think they're -- I think everybody is scared. I think the candidates are scared. I think the staff is scared. I think the consultants are scared. I think everybody knows that oft-repeated thing, this is -- quote -- "quirky state" -- unquote. And it has that reputation, because it deserves it. And my sense is, is, we're going to be delivered a big surprise tomorrow night. I suspect that Kerry will win the state, but underneath that, some interesting things are going to happen. And Paul's right. The question is, does Dr. Dean have, you know -- stop the slide? Does he have any momentum? There's a sense out there that maybe John Edwards could pull another surprise. So we've got an interesting day coming up.

The most exciting thing in this democracy is a contested New Hampshire primary. We've got one here. It is really a lot of fun. This is as much fun as politics can get.

ZAHN: Oh, I know. I share your view of that.

Let's come back, Paul, to something that your colleague just said, talking about the big surprise, perhaps watching what John Edwards might do here. What do you think the voters are in store for?

BEGALA: Well, like, if you look at Edwards, I'm always impressed by a candidate who can win outside of his home region. John Kerry did that. He won in Iowa. But John Edwards from the South ran a very strong second there.

If he can come on here, if he can beat Wes Clark, who spent more time and money here than he has, if he can even beat Joe Lieberman, who was, of course, my party's nominee for vice president last time, that becomes an enormous story. So the battle for third among Edwards and Clark and Lieberman becomes not quite as important as the first- and second-place finish between the two New Englanders, but pretty darn important.

ZAHN: But, James, we have to remember, in '92, it was Clinton who began his resurgence after coming in second in New Hampshire. If Dean were to play the comeback kid, how close behind Kerry would he need to be?

CARVILLE: Well, that's what we call the over/under in the business. And Paul and I were just speculating on that. I hear numbers bandied around. I hear 5, 7, 9. Who knows? Whatever the number is, for sure that Dean will say he's the comeback kid and he'll claim it as a big surprise, and maybe it will be.

You don't know until election night. A lot of it, as Paul Begala, give him all the credit in the world, had the comeback kid thing and had all the idea to come out early and do it in '92, which had a big impact, I think, on that. Now, you're going to see people coming out and claiming victory tomorrow at about 8:30 in the morning, I suspect.

(LAUGHTER)

CARVILLE: They'll be claiming something at breakfast time.

But I think a lot of what we need to do tomorrow night is really try to put a lot of this in perspective. And, look, if Kerry wins this, the truth of the matter is, at some point, somebody else has got to start winning primaries.

ZAHN: Well, let's talk about what happens in the following week, Paul. The money chases the guy that wins New Hampshire, doesn't it?

BEGALA: Well, it does.

But Dean has always been able to raise money. Even when he lost in Iowa, he still raised almost I think three-quarters of a million dollars in the week after that. So I think they disperse. Paula, we get seven states after this. It was nice and tidy in Iowa, a nice clean fight here in New Hampshire. But then we disperse around to seven states.

And I've talked to the strategists for these campaigns. And I'm not sure any of them is going to play in all of them. So you may have John Edwards and Wes Clark, who have a claim to Southern heritage, running in South Carolina. You could have John Kerry, who has been courting the Gephardt vote, going into Missouri. You could have Howard Dean, who speaks Spanish, only contesting, say, Arizona and New Mexico. So these guys could be all over the map after this primary.

CARVILLE: The only thing I doubt is, if somebody comes out of here with a good head of steam, if you make one visit or to New Mexico or you make none, I don't think it is going to make a whole hell of a lot of difference, because I think these people are all watching what's going on nationally, all paying attention to what's going on, on CNN, reading the paper, watching television, etcetera, etcetera.

You're right. Nobody in seven days can really mount a big campaign in all seven states, but that's why the enormous advantage goes to the winner, because he doesn't have to. He's getting press coverage automatically. So if you make one trip to Missouri or you make none, I don't know how big of a factor that is.

And I suspect, if Dick Gephardt were to decide to endorse, it would -- although endorsements have not had a -- they've had almost a negative impact now -- I think that is the one endorsement that they would like. I think it's important who wins here tomorrow night. And I think we need to keep focus on that. It's interesting who comes in second. It's interesting who comes in third.

But, in the end, it's important who wins this doggone thing.

ZAHN: That may be true, Paul, but the big question Wednesday morning is, who is left standing? At what point do you predict we'll see some of the folks drop out of the pack?

BEGALA: When they run out of money.

It is very rare, Paula, that anybody gets out of a campaign when they still have money in the bank. Now, Dick Gephardt just did. He had $6 million left and he dropped out. But he knew that it was over, and he didn't want to put his supporters through, I think, a protracted and ultimately doomed campaign. Whoever places certainly fifth here, there will be enormous pressure on whether it's Lieberman or Clark to get out of the race, fairly or not. There will be a lot of pressure to pull out.

(CROSSTALK)

ZAHN: James, one real quick answer to this. Any weird rituals you're going to perform tomorrow night in the war room when you're hanging around? We know how superstitious you are.

(LAUGHTER)

(CROSSTALK)

CARVILLE: Sometimes, I don't change underwear. Sometimes, I don't change gloves, anything like that. But Begala told me I had to change underwear today.

(LAUGHTER)

CARVILLE: So I don't know. I'll think of something. But you know what? This doggone thing is so much fun, I'm going to be so excited tomorrow night. I'm so pumped. I feel so nervous for all my friends in all of these different campaigns.

And it's turned out to be an interesting campaign. And the surprising and gratifying thing is, the Democrats, this turned out to be a pretty doggone good field we got out there. These are some pretty good horses we got on the track right now. So we'll see what happens.

(CROSSTALK)

ZAHN: We thank you for sharing that very personal information for you. I won't follow up with any questions about briefs vs. boxers.

(LAUGHTER)

ZAHN: Really, we have to move on. James Carville, Paul Begala, thank you.

CARVILLE: All right, there we go. Thank you.

BEGALA: Thank you, Paula.

ZAHN: With New Hampshire, each candidate relies on a small army of volunteers and staffers. Whether it's working the phones, going door to door, screaming at the top of their lungs, these men and women travel far and wide to get their candidates' messages heard. It's a side of the campaign trail you don't normally get to see, a side that may make the difference between going to the White House or going home.

(BEGIN VIDEOTAPE)

CROWD: I don't know, but have you heard?

UNIDENTIFIED MALE: Clark is going to win, so spread the word. UNIDENTIFIED MALE: V-O-T-E, Edwards is the one for me.

UNIDENTIFIED FEMALE: I don't think so.

CROWD: We love Joe, yes, we do. We love Joe. How about you?

CROWD: Kerry! Kerry! Kerry!

CROWD: D-E-A-N, I want my country back again. D-E-A-N, I want my country back again.

UNIDENTIFIED FEMALE: Well, my name is Audrey Camanetz (ph).

Basically, we're here on Elm Street in Manchester, New Hampshire, and people are driving down the street. And we're waving signs and screaming and yelling and making chants.

UNIDENTIFIED FEMALE: When I say doctor, you say Dean.

Doctor.

CROWD: Dean.

UNIDENTIFIED FEMALE: Doctor.

CROWD: Dean.

UNIDENTIFIED FEMALE: I'm cold on the outside, but I'm warm on the inside.

UNIDENTIFIED MALE: Thank you for being the face of the John Edwards campaign all across Manchester.

(CHEERING AND APPLAUSE)

UNIDENTIFIED MALE: I'm Peter Hatch (ph). My role this week and through the election is to coordinate all of the volunteers who are coming in to help us and to help direct the field operations here.

UNIDENTIFIED MALE: My name is John Collins (ph).

UNIDENTIFIED FEMALE: (INAUDIBLE) Rabkin (ph). I'm a student volunteer.

UNIDENTIFIED MALE: My name is James Smith (ph) and I'm currently volunteering with Veterans For Wes Clark For President. The difficult part at this point is, there's so many calls we have to make. A lot of us have broken out our cell phones, using those unlimited minutes.

OK, well, have a great evening. And hopefully, when you go to vote on Tuesday, you'll vote for John Clark.

UNIDENTIFIED FEMALE: I'm Sally Kelly (ph). And I'm a John Kerry volunteer. And today, I'm out here in the very cold weather canvassing.

Canvassing is where we go door to door. We go to undecided voters or voters that are leaning towards Kerry and we talk to them.

Have you decided which way you're going yet?

UNIDENTIFIED MALE: Hold on a second.

UNIDENTIFIED FEMALE: OK.

UNIDENTIFIED FEMALE: Did you know we were coming?

UNIDENTIFIED MALE: No.

UNIDENTIFIED FEMALE: Weather in the past month has been atrocious. It has been bitter, bitter cold. Today, I think it's only five below zero. Who figured? This is New Hampshire. I love it.

(END VIDEOTAPE)

ZAHN: Still ahead, it may be do-or-die time for Senator Joe Lieberman. Up next, I'll be talking with the presidential hopeful about his chances tomorrow.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: I'm in this race because I believe that I can do a better job than George W. Bush.

(END VIDEO CLIP)

ZAHN: Also, Elizabeth Edwards, the outspoken wife of an upstart candidate, join me in a very candid conversation with her.

And has President Bush abandoned his conservative base? I'll be taking up that debate with the Reverend Jerry Falwell.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

LIEBERMAN: You know, in this room, I'm feeling what I've been feeling all around New Hampshire today, a statewide outbreak of Joe- mentum!

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

ZAHN: Well, Democrats rallied around Senator Joe Lieberman as Al Gore's running mate in the 2000 election. Now, though, four years later, Lieberman is back in the race trying to convince voters he should lead the country.

But his campaign has struggled, and he needs a strong showing in tomorrow's New Hampshire primary to keep his White House hopes alive.

Senator Lieberman joins us now from Manchester. Good to see you, sir. Welcome.

LIEBERMAN: You too, Paula. Thank you.

ZAHN: Well, Senator, you said you have to do better than expected. What does that mean? How do you have to do?

LIEBERMAN: Well, of course, about a week ago, everybody thought I was out of the race. We're in the thick of it now. I know I'm going to do better than expected. We'll know it when we see it.

I think important thing to say is that, all around -- I love that Joe-mentum. All around New Hampshire, people are coming up and saying, we were thinking about this. We weren't sure. We saw you in the debate. We know that you're the kind of guy who we can trust to level with us, not pander to us. You have got good ideas about middle-class tax cuts, how to help us deal with our health insurance costs. We're for you.

And today, we announced 1,000 independents, including a lot of people who supported John McCain last time, who are going to support me this time, four newspaper endorsements. Things are going exactly where I'd like them to go right now.

ZAHN: All right, you say you'll know it or we'll know it when you see it. Would you be satisfied with a fourth-place finish in New Hampshire?

LIEBERMAN: Yes, I mean -- look, I think, last week, most people were saying I was fifth and falling.

You know, we're going to show some really good support, some broad-base support around the state. And I got a plane that's already chartered that's going to be waiting at Manchester Airport here in New Hampshire tomorrow night to take me to Delaware and Oklahoma the next day, South Carolina Thursday, and on to Arizona, all February 3 primaries.

So I'm confident that we're going to do exactly what I said we would do. And it's all based on being the one candidate who says to every voter here one thing about all issues. And I don't waver. I don't waffle. And I think that's what they want. They want independence.

ZAHN: But, Senator, if you don't do, in your own words, better than expected, at what point do you decide to pull out of the race?

LIEBERMAN: I'm just not thinking that way. And I know those are the kinds of questions that people in the media have to ask on the eve of the primary.

Those aren't the questions the voters here in New Hampshire are asking. They're asking, which of these seven men who are running for president can I trust with the future of my children and the future of my country? And more and more, I find people saying to me, you've had 30 years of experience. You're reliable. You're straightforward. We know what kind of president you'll be. And we know you're ready to stand up to the special interests and even your own party if you think it's wrong.

We also know you're going to protect our safety, because you're tough on defense. And that makes me unique among the Democratic candidates this year. So that's what gives me confidence.

ZAHN: If you don't win the nomination, are you enthusiastic about supporting any of the other candidates?

LIEBERMAN: Well, look, I'm in this race because I believe that I can do a better job than George W. Bush. And I've laid out that case. I can take him on, on security and values, uniquely among Democrats, where he's supposed to be strong, and then beat him on his failed economic policies and his right-wing social policies.

But, you know, I've said, as all the other candidates have, I intend to be nominated, but, if, for some reason I'm not, I will support the Democratic nominee.

ZAHN: Do you think Al Gore regrets his endorsement of Howard Dean?

LIEBERMAN: Oh, I don't know.

You know, I'm looking forward -- I'll tell you one thing that seems to have been clear so far in this election. Endorsements don't mean much. Pundits' opinions, with all respect, don't mean much. The polls don't mean much. We've seen that in Iowa, and I think we're going to see it here tomorrow. The people, thank God, pick our presidents. And I put my confidence in each and every voter here in New Hampshire.

Independents are going to play a big role tomorrow. I'm getting very good support from independents, including a lot of independents who supported John McCain last time here and helped him surprise George Bush on primary day. He was tied or a little behind, I think, on the eve of the election, and he won by something like 20 votes.

ZAHN: Senator Lieberman, we got to leave it there tonight. Thanks so much for joining us.

And the man who ran the hunt for Saddam's illegal weapons stash says the CIA got it all wrong. Coming up next, we're going to hear what two experts think about David Kay's big bombshell.

Last-minute handshakes and hustling for votes in New Hampshire. The candidates brace themselves for the state that likes to pull primary surprises.

That's right ahead.

(COMMERCIAL BREAK)

ZAHN: It has been said before, but, when David Kay said it, it carried a special impact. The former chief U.N. weapons inspector thinks there have not been banned weapons in Iraq for years. And Kay says it was mostly the Central Intelligence Agency that got it all wrong and needs to be overhauled.

Let's get the opinion of two people with extensive experience on the issue of weapons and intelligence. Stansfield Turner is a former CIA director. Terence Taylor is with the Institute for Strategic Studies and is a former weapons inspector himself.

Welcome, gentlemen.

(CROSSTALK)

ZAHN: First of all, Terence, do you believe Mr. Kay's findings that the Iraqi program was in such a state of disrepair from inspection and corruption, that the scientists were actually presenting fake weapons programs to Saddam Hussein, and the CIA should have known that?

TERENCE TAYLOR, INSTITUTE FOR STRATEGIC STUDIES: Well, certainly, that's the area which David Kay brought some new insight which we on the outside didn't know about before.

And maybe that's something that the intelligence assessments got wrong, because I think -- it wasn't just the CIA, by the way, but other intelligence agencies in Europe, or in France, or in Germany, or in the United Kingdom -- by the way, if you sat those people in the same room, they'd probably come up with similar conclusions. But I think there was a judgment there was a highly organized internal arrangement for the control of these programs. It seems that this was not the case.

ZAHN: Mr. Turner, what do you make of this? Is it the CIA that is to blame?

STANSFIELD TURNER, FORMER CIA DIRECTOR: Well, there clearly was an intelligence failure here. If David Kay is correct -- and we have no reason to think he is not -- the CIA, the intelligence community of the United States, did not have a handle on the weapons of mass destruction programs in Iraq.

ZAHN: The question is, why not?

TURNER: David Kay says it's because we didn't have enough spies on the ground. That's the usual way of trying to explain an intelligence failure.

You have to recognize that, with a country like Iraq, it's a very tough proposition to get spies on the ground. We don't have much U.S. presence in Iraq, where American CIA agents can operate and pretend they're doing something other than spying. And it's very difficult to recruit Iraqis to do the spying for us in a country that had such a Draconian leader, who would cut off their heads at the slightest indication of treason. ZAHN: And what about the inspectors, Terence? I know you have long argued they didn't even have the resources they needed to get the job done.

TAYLOR: Well, certainly, I, as an inspector, had a number of years of experience in Iraq. And my judgment was, there were programs, weapons of mass destruction programs still existing, before we went to war. That was my judgment, looking at all the information one could see. I wasn't privy to the really inside intelligence.

But I think it was, from what we knew, the only sensible conclusion we could come to, was that there were existing programs. The size and extent of them, we didn't know. You have to remember, the U.N. Security Council all agreed that was the case, that Iraq was not in compliance with the U.N. Security Council resolutions. It wasn't just the United States and just the U.K. What the argument was about is what risk these Iraqi programs posed. That was the center of disagreement.

ZAHN: And, Mr. Turner, if it turns out that people widely buy into David Kay's conclusions, what does that mean for the CIA?

TURNER: It means that we've really got to get to the bottom of what went wrong here. For instance, before October of 2002, which was just before the president went to the Congress and asked for authorization to invade Iraq, if he felt it was necessary, the intelligence people said, there probably were no nuclear programs running in Iraq.

In October of 2002, they said, yes, there probably was such a program, but it wouldn't produce a nuclear weapon until some time this decade. Then the administration spokesman came along and said, yes, there certainly is a program and it's going to produce a nuclear weapon very soon. In short, we kept moving up from probably no to, well, it's almost absolutely certain, partly because the intelligence people, it appears, let themselves get pressured in October of 2002 and partly because the administration spokesman exaggerated and left the caveats that the intelligence people put in their estimates out.

ZAHN: Finally tonight, Terence, Secretary of State Colin Powell says that these words from David Kay actually do not undercut the administration's rationale for going to war. What do you think?

TAYLOR: Well, I think what Colin Powell is really saying is that Iraq was clearly in breach of the final U.N. Security Council resolution -- that's 1441 -- and didn't reveal all about their weapons of mass destruction programs. If you look into David Kay's remarks, he said there was a continuing biological weapons program, just as one example, that was still going on, maybe not in ammunitions ready to use immediately.

But Iraq was clearly in breach, and they hadn't come forward and delivered what they should have done. The Iraqis were, in fact, behaving as if they did have these programs. So, I think it was a tough call for policy-makers. But I agree with Admiral Turner. It's the connection between the intelligence information coming forward and the policy-makers who have to act on it.

I think this is where things, if anything went wrong, it was at that juncture that things needed to be brought together properly.

ZAHN: Mr. Turner, final word on that tonight.

TURNER: Well, I think the important thing here is that we've got to get to the bottom of this for the good of the country. The congress has created a commission to do that, under former New Jersey Governor Thomas Kean.

But Congress, however, has put a deadline of May for the Kean commission to make its report. Particularly with this new data from David Kay, I think that commission deserves to have as much time as it needs. We have got into the political season here, of course. And maybe we ought to have that commission not report out until after the election, but we ought to have that commission be as thorough as possible for the good of the country over the long run.

If there were real intelligence failures here, if there was real slanting of intelligence on pressure from the administration, if there was unnecessary hyping of the intelligence by the administration, we've got to understand that as citizens.

ZAHN: Thank you for both of your perspectives this evening, Stansfield Turner, Terence Taylor.

TAYLOR: Thank you very much.

ZAHN: President under fire. We're going to debate why conservative groups say he is not doing enough for them and the country.

Meanwhile, in New Hampshire:

(BEGIN VIDEO CLIP)

RUDOLPH GIULIANI (R), FORMER MAYOR OF NEW YORK: The effort is really to give some perspective to the voters of New Hampshire about the president.

It's going to be a tough election. So we're going to have to fight for every state. And that's one of the reasons we're here in New Hampshire.

(END VIDEO CLIP)

ZAHN: Former New York Mayor Rudy Giuliani and others stumping for the president. Not much competition for the Republicans. Why are they there?

And John Edwards is hoping to build on his Iowa bounce tomorrow. We'll hear from the woman who plays an enthusiastic role in his campaign a little bit later on.

(COMMERCIAL BREAK) ZAHN: Welcome back.

Here are some of the headlines you need to know right now at the bottom of the hour.

South Carolina police are looking for a man they want to question about a motel fire that killed six people in Greenville. They won't say why they want to talk with him, nor have they said whether the fire was set intentionally. Many who survived slid down knotted bed sheets and jumped out windows to escape.

Lionel Tate, the Florida teenager who killed a 6-year-old playmate, was freed today by the same judge that sentenced him to life in prison three years ago. Tate was 12 at the time. And his case raised questions about the sentences given to minors who kill.

And the U.S. chief justice says there is no good reason for fellow Justice Antonin Scalia to recuse himself from the case involving Vice President Cheney. Cheney and Scalia dined together and recently went on a hunting trip. Democrats say Scalia shouldn't decide whether Cheney has to release information about meeting with lobbyists.

Well, the GOP is not just taking note of the New Hampshire primary. Many of the party's biggest names are actually making their way to the state trying to get the Republican message out. They hope to convince voters that, no matter who wins tomorrow, George W. Bush is still the best man for the job.

(BEGIN VIDEOTAPE)

ZAHN (voice-over): In the bitter cold of New Hampshire this week, it's hard to escape the grip of politicians seeking the presidency in 2004, especially in the confines of a diner. There's Joe and John and John and Howard and Wesley. And Rudy?

GIULIANI: The best place to eat in New York City is a firehouse.

UNIDENTIFIED MALE: One more?

(LAUGHTER)

ZAHN: But, of course, former New York Mayor Giuliani is not a Democrat, nor is he running for president.

Just what is he doing here, in this land where it's awfully hard to miss all the buses painted with candidates' names, riding around in this Bush bus?

CROWD: Bush! Bush! Bush! Bush!

GIULIANI: The effort is really to give some perspective to the voters of New Hampshire about the president.

It's going to be a tough election. So we're going to have to fight for every state. And that's one of the reasons we're here in New Hampshire today.

ZAHN: With the election 10 months off, though, why now, right before the Democratic primary? Another visiting New Yorker, Governor George Pataki.

GOV. GEORGE PATAKI (R), NEW YORK: There's a Republican primary, too. Now, I'm pretty optimistic about what the outcome is going to be, but I think it is important, in all seriousness, that both sides of the equation are heard, that not just the negativism and the attacks that are coming from virtually every one of the Democratic candidates every day, but also the story of this president, the leadership he's provided, the vision he has for the future of our country.

ZAHN: So they've come here to New Hampshire to make speeches, to shake hands, to get their messages out. Even a presidential sibling has been trotted in this effort to get the White House some good P.R.

DORO BUSH KOCH, SISTER OF PRESIDENT BUSH: I'm the sister of the president. And I know the president better than a lot of people do. And I'm here to tell them what a wonderful, compassionate, caring, excellent leader he's been and the kind of person he is.

ZAHN: In the 2000 general election, George Bush won the Granite State by just 1 percent. So the independents here are a big target for these Republicans. They've got a long road ahead of them and 10 months to drive it.

(END VIDEOTAPE)

ZAHN: So, while there are clearly many supporters of the president, all Republicans, including some conservative groups, are not pleased with his record in office. They point to the ever- increasing red ink in the federal budget.

Is the president in danger of losing his most loyal base? Let's see what two conservatives think about that. Reverend Jerry Falwell is chancellor of Liberty University in Lynchburg, Virginia; and, in Washington tonight, Stephen Moore of the conservative Political Action Conference.

Welcome, gentlemen.

STEPHEN MOORE, PRESIDENT, CLUB FOR GROWTH: Hi.

ZAHN: So let me ask you this, Stephen. Is George W. Bush promoting so many programs that he's in jeopardy of losing his conservative base?

MOORE: Well, for some conservatives, Paula, this is the winter of our discontent, in terms of all of the big government spending that's been going on for the last three years.

The budget's grown about three times faster under George W. Bush than it has under President Clinton. And we've seen the biggest education bill, the biggest farm bill, the biggest foreign aid bill. Now President Bush wants to spend billions on sending a man to Mars. It's just more and more spending and a lot of -- especially the more libertarian of the Republican Party is saying, wait a minute. We wanted to get rid of the Democrats because they were spending too much money. Now Republicans are spending more than ever before.

ZAHN: What about that, Reverend Falwell? Is that something you think is a good idea on the president's part?

JERRY FALWELL, CHANCELLOR, LIBERTY UNIVERSITY: Well, you know, Paula, conservatives are divided three ways.

There are the fiscal conservatives. There are the political conservatives, and, of course, the social conservatives. I happen to be all three. And I think George Bush is the personification of the ideal conservative. I cannot imagine a living American who better personifies what I believe in.

And I've already told everybody in Washington, if I can help him by condemning him, let me know. If I can help him by blessing him, let me know. I'm devoted to him. I don't think that he's perfect, by any means. But since...

ZAHN: But let me ask you this. Fiscally, do you support the idea of having a $500 billion budget deficit, Reverend?

FALWELL: Well, Paula, since September 11, 2001, we've been at war, a huge war, and probably the most precarious one this nation has known, because difficult to identify the location, the geography, and the appearance of the enemy.

This president has waged what has been thus far a most successful war against worldwide terrorism. The Taliban are gone. Afghanistan is defeated. Iraq and now Libya is on its knees. And Gadhafi's gotten religion, Iran, Syria. I think it's a long battle ahead. It's costing billions of dollars. And 513 Americans have died. But I shudder to think where we'd be today if Al Gore had been elected three years ago.

ZAHN: All right, let's give Stephen a chance to weigh in now.

The reverend basically saying this ballooning deficit has more to do with security here in the United States than just about anything else. You don't buy that, do you? You think there is a lot of other discretionary spending going on.

MOORE: Well, first of all, the reverend is quite right that, among social conservatives, there is very strong support for President Bush and also for President Bush's waging of the war on terrorism, which has been fantastic and quite successful.

The problem has been that it's not just -- the spending isn't just going up with respect to the national defense and homeland security. Paula, the budget is going up in every single agency. And, you know, the problem is, when Republicans took over Congress in 1994 and then when President Bush became president in 2000, the whole message was, we're going to fight a war against big government and big government is simply out of control.

Now, I think the tax cut that President Bush passed is something that our members are very supportive of. And so he's got half the equation right. But the problem is, we've replaced tax-and-spend Democrats with borrow-and-spend Republicans.

ZAHN: Jerry Falwell, a final thought on the split between fiscal, perhaps, and social conservatives and whether you see them sitting this one out, if they strongly believe that allowing this deficit to continue to balloon is a very bad thing for the health of the economy.

FALWELL: You know, Paula, I suppose I have the largest mailing list of conservatives in America. I have 10 million families who have been a part of our Liberty University and the Jerry Falwell Ministries for many, many years, and, way back, Moral Majority.

I speak weekly, sometimes a dozen times a week, to large groups in the thousands. No man has excited the religious and social conservatives of America since Ronald Reagan like George W. Bush. And I predict, come November, he will have the most excited, turned-on constituency. And I predict that Stephen Moore will be voting just like I do on that day.

(CROSSTALK)

ZAHN: Will you be, Stephen? And I can only give you a short period of time to answer that. We've got to go to commercial break.

MOORE: He certainly benefits from his political enemies, because I think, when Republicans see either it's Kerry or Dean or one of those folks, they're not going to turn out for one of those liberal Democrats.

ZAHN: Point well taken.

Stephen Moore, Reverend Jerry Falwell, thank you.

MOORE: Thank you.

FALWELL: Thank you.

ZAHN: Coming up, my interview with Elizabeth Edwards. The wife of the presidential candidate has much to say.

(BEGIN VIDEO CLIP)

ELIZABETH EDWARDS, WIFE OF SENATOR JOHN EDWARDS: If someone wants someone who's been in politics for decades, they've got lots of choices in this race. John's just not one of them. He has real life experience, in addition to political experience. And I think it serves him very well.

(END VIDEO CLIP)

ZAHN: The Oscar nominees are about to be unveiled. We're going to find out how yesterday's Golden Globes may impact tomorrow's announcements.

(COMMERCIAL BREAK)

ZAHN: Among the candidates' wives, none have seemed as active and enthusiastic about hitting the campaign trail as Elizabeth Edwards. She has helped her husband shape his campaign themes. And she's always ready to tell anyone who asks where her husband stands on specific issues.

Elizabeth Edwards joins us now from Manchester, New Hampshire.

Good to see you again. Welcome.

EDWARDS: Thanks, Paula. Glad to be here.

ZAHN: How important is New Hampshire to your husband's campaign?

EDWARDS: It's important. I mean, he's had over 100 town halls in New Hampshire. He's been visiting here for a long time, given out over 50,000 copies of his "Real Solutions" plan.

So it's important to him. He wants to make certain that he competes, actually, nationally, in every place where there's a race, that competes and communicates with the voters.

ZAHN: So how do you view New Hampshire within the arc of what he faces next, as he heads South? Is it as important as what happens in the South? And what does he really got to do Tuesday night?

EDWARDS: I just think John has to make a reasonable showing here to show that he has, in fact, communicated and communicated well with New Hampshire voters.

I don't think there's a particular bar for him, except to make that showing and then to keep the momentum going that he has from his terrific showing in Iowa. We expect to take that momentum South and West, as we move to the February 3 primaries.

ZAHN: I'm just curious about the management of candidates' wives. Has anybody in your husband's campaign ever come to you and counseled you on what to say, what not to say, or how to say it?

EDWARDS: No.

It might be that somebody might suggest that there's a clearer way to say something, if I've bumbled around trying to get to a point, just like someone might say, you know, your hair might look better parted on the other side or something. They're just giving you suggestions, people trying to be helpful.

Sometimes, in the campaign, sometimes supporters -- and I listen to everybody. Nobody's perfect. I'm happy to listen to anyone's advice. I've not done this before.

ZAHN: John Kerry has made an issue of your husband's age, your husband, of course, being 50, saying that he has no international experience, no military experience, and very little experience in political life, except for the four years he served in the Senate. Why is age not a handicap in your husband's case?

EDWARDS: John is -- you know, he is 50 years old. And I often will say to a group that I'm talking to, now, you know -- everyone remembers that John Kennedy was 43 and that Bill Clinton was 46. Well, how old was Franklin Roosevelt when he was president? And it's 51.

The truth is, John brings with him a wealth of experience, both in private life and in public life. And he has spent his life fighting for people. It's really been the story of his entire adult life. And he doesn't shy away from it at all. If someone wants someone who's been in politics for decades, they've got lots of choices in this race. John's just not one of them. He has real-life experience, in addition to political experience. And I think it serves him very well.

ZAHN: Well, we appreciate your spending some time with us. I know you have got a lot of people pulling at you and just a precious few hours counting down on the clock in New Hampshire.

Again, thanks for being with us.

EDWARDS: Well, it's always great to be with you, Paula.

ZAHN: Appreciate it, Elizabeth. Good luck to you all.

(CROSSTALK)

EDWARDS: Thanks.

ZAHN: A golden night for Hollywood as the Golden Globes were handed out. Along with the glitz and glamour, we'll take a look at what it means for the Oscars.

And the latest from New Hampshire, as John Kerry tries to hold off Howard Dean in the nation's first primary.

(COMMERCIAL BREAK)

ZAHN: Forget New Hampshire tonight. It's going to be a sleepless night for a lot of folks in Hollywood.

Tomorrow morning, the Academy Award nominations will be announced. And if last night's Golden Globes are any indication, expect plenty of surprises from Tinseltown.

Joining us now is "Hollywood Reporter" columnist Robert Osborne, author of "75 Years of the Oscar: The Official History of the Academy Awards." I held that book. It's about 5 inches thick, a lot of history there.

Welcome. Thanks for joining us tonight.

ROBERT OSBORNE, "HOLLYWOOD REPORTER": Thank you. Thanks. It's nice to be here.

ZAHN: Will we see any surprises tomorrow?

OSBORNE: Well, I think there will be surprises. There always are at Academy Award nominations.

I think that one of the things that will be tough for the Academy this year is, I think a lot of people being nominated will be names that the general public doesn't really know very well. And it's very hard to get enthusiasm for an Academy Award process where the names are not familiar to us, that you're really in there fighting for your favorites to win.

ZAHN: So what's different also this year is that these nominations were actually in, in advance of the Golden Globe awards.

OSBORNE: Yes.

ZAHN: Because, usually, you get that transferred buzz from the Golden Globes to the Oscars. Now it doesn't make any difference.

(CROSSTALK)

OSBORNE: One of the things that made the Golden Globes very important was the fact that, when they were being given out is right when all those same people in that same room were marking their ballots for the Academy Award nominations.

Well, that had to be in January 17. So that was a done deal already. So whatever won last night will not be have particularly any impact on the Academy Award nominations tomorrow morning.

ZAHN: All right, but there's no doubt in your mind that Charlize Theron is in for an Oscar?

OSBORNE: I think she'll not only certainly be nominated, but she'll win the Academy Award. I think Sean Penn will win the Academy Award. I think Tim Robbins will win the best supporting actor Academy Award, and Renee Zellweger, and "Lord of the Rings." I think it's kind of a slam dunk, although there are a lot of films -- I think the thing that surprises me the most this year is that so many of the films that were out there and that will be up for the running are really heavy, kind of depressing, downbeat films, like "Mystic River," "21 Grams," "House of Sand and Fog," "Cold Mountain."

ZAHN: Films that make you think.

OSBORNE: Yes. But I also think that that's why some of the ones that will sneak in will be things like "Something's Got to Give" and "Lost in Translation" and "In America," that have a more upbeat feeling to them and a little more entertaining for people to go to.

ZAHN: You haven't talked Diane Keaton yet tonight, who made a lot of fun of her age.

OSBORNE: Oh, she'll be up for a nomination. ZAHN: You think she'll be up for a nomination?

OSBORNE: Absolutely.

And I hope that, if she wins the Academy Award, she will, with her stage training and everything, be able to say thank you without having to read it off a slip of paper.

ZAHN: Yes, you were disappointed by that last night. She was nervous.

(CROSSTALK)

OSBORNE: She's a stage actress.

ZAHN: Well, she talked a lot about basically being so delighted that an older woman was given the chance to have a great role in Hollywood.

OSBORNE: Well, I thought what she had to say was wonderful. But she's great on her feet. She's a great talker, usually, when she gets up and does things. And I was just disappointed. It didn't mean as much to me, that she had to read every word.

ZAHN: Just a final thought, on once these nominations come in and then once the big gold statuettes are handed, what that ultimately means for the success of the films these actors were a part off. It's huge, huge money.

(CROSSTALK)

OSBORNE: It's huge, because it means bookings around the world. It means theaters that would not book "In America" or perhaps "Lost in Translation" or something in small, obscure little towns will book it now.

It will also help the release and the sale on DVDs and everything. More people will see it in China, in Korea, everywhere, if it has an Academy Award endorsement.

ZAHN: Well, I'll tell you one guy I'm not going to play trivial pursuit with on the entertainment side is you.

OSBORNE: Oh, come on.

(CROSSTALK)

ZAHN: He knows everything, Richard Osborne.

OSBORNE: We'd have a good time.

ZAHN: Thank you for joining us tonight.

OSBORNE: Thank you. My pleasure.

ZAHN: Congratulations on your book. The New Hampshire primary is in the homestretch, with candidates using the few remaining hours to get their message across. A live report from the campaign trail coming right up.

(COMMERCIAL BREAK)

ZAHN: Midnight in Dixville Notch, New Hampshire. Be there. That's when the first votes will be cast in just about three hours.

Some final thoughts from Jeff Greenfield and Joe Klein when we return.

Hello, gentlemen. How you doing tonight?

JOE KLEIN, CNN CONTRIBUTOR: Hi.

JEFF GREENFIELD, CNN SR. ANALYST: Very excited about the Golden Globes.

ZAHN: Oh, I can tell. I'm sure you watched that from beginning to end, just like I did. I caught a quarter of it.

Jeff, what are you going to be watching for tomorrow night?

GREENFIELD: First, I'll be watching for the knuckleheaded journalists who will overreact to the New Hampshire primary, especially if Kerry wins, and declare it over.

More seriously, I want to hear what the candidates say when they go out that night. Obviously, we're all going to be watching Howard Dean with some care. What are their messages going to be coming out of New Hampshire? Who's going to be trying to sharpen differences? Is John Edwards going to say something about John Kerry's positions, that he can't win in the South? Is Howard Dean, is Wesley Clark, are either of those guys going to begin to sharpen divisions as they get to February 3? That's what I'll be looking for.

ZAHN: Will those divisions be any clearer tomorrow night, Joe Klein?

KLEIN: Well, I don't know whether the divisions will be any clearer tomorrow night.

I'm kind of disappointed by this week. It's usually my favorite week in politics. But everybody has been so nice, ever since Iowa. They haven't made the distinctions among themselves. And I think that now is the time. Over the next couple of three weeks, we're going to see whether or not anybody is going to make a case against John Kerry, who seems to be ahead here.

ZAHN: Well, certainly, Howard Dean tried to make a case against him today, Jeff Greenfield. Let's talk about strategies for these candidates moving forward, Howard Dean attacking John Kerry today, basically for flip-flopping on the war, opposing the Gulf War and then voting for this latest war in Iraq.

What will be Howard Dean's strategy carrying forward? And then we'll hit each candidate here.

(CROSSTALK)

GREENFIELD: Part of the problem is, he's got to figure out where he's going to contest. There are seven states next week. We've had Iowa for a year and New Hampshire. Now you've got states literally from one end of the country to another, very different kinds of states.

So, you know, we have to figure out where Howard Dean is going. Is he going to Missouri, a classic swing state? And is an anti-war message going to take there? One of the things is that Iowa and New Hampshire Democrats are more, I would say, liberal than the Democrats in the states we're going to.

So, maybe an all-out anti-war message, if that's what Howard Dean's going to do, is not going to work. It's what makes next week so tricky.

ZAHN: And what kind of strategy do you think we'll see emerge, Joe, in the Kerry camp?

KLEIN: Well, I think that they're going to bank on momentum. If they win this thing, they're going to -- we've seen polls, semi- meaningless, that have Kerry zooming in states that he hasn't had an ad or a personal appearance in, like Michigan today. There was a poll -- I don't know how good it is -- that had him at 37 and Howard Dean and John Edwards at 14.

So, a lot of this -- this is the last good time in the campaign. After this, human beings are kind of eliminated from the process. It's all candidates going from airport to airport and putting ads on TV. And, for me, the fun part is over tomorrow night.

(LAUGHTER)

ZAHN: Oh, I'm so sorry to hear that, Joe.

KLEIN: It's so disappointing.

ZAHN: Jeff, a final thought for us as we go off the air here about what the likelihood is of all these candidates moving on beyond Wednesday.

GREENFIELD: Well, not being a bus dispatcher, I can never talk about how many tickets there are out of New Hampshire. A guy could finish fourth like Wes Clark, and he has a lot of money for next week.

The question about the finances of a Howard Dean are trickier. I think a bunch of these guys, somewhere between three and four candidates will be working very hard through February 3. And, after that, unlike Joe, I like primaries where there are different kinds of people and a lot of people to vote. So I'm going to stick around. I guess Joe is going back to cover the Oscars.

(LAUGHTER) (CROSSTALK)

KLEIN: I think Sean Penn has a good shot for the...

ZAHN: Gentlemen, we've got to move on. Joe Klein, Jeff Greenfield, thanks so much. Enjoy tomorrow.

Thank you for all for being with us tonight. We hope you'll stay with CNN for complete coverage of the New Hampshire primary.

Appreciate you joining us tonight. Have a good night.

"LARRY KING LIVE" is next.

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