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JUDY WOODRUFF'S INSIDE POLITICS

Presidential Polls; Interview With Senator John Edwards

Aired February 2, 2004 - 15:30   ET

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

(BEGIN VIDEOTAPE)
ANNOUNCER: The '04 Democrats gear up for tomorrow's seven-state Super Bowl.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: How about those New England Patriots, ladies and gentlemen? It's great to see New Englanders go to Texas and win.

ANNOUNCER: John Edward works to come out on top in South Carolina, and he shares his thoughts with Judy about the bottom of the Democratic ticket.

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANIDIDATE: You should ask Senator Kerry whether he wants to be my running mate.

ANNOUNCER: Crunching the president's numbers. Our new poll may give the Bush camp pause amid flaps over the budget and WMD.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: So I'm putting together a independent bipartisan commission to analyze where we stand.

ANNOUNCER: Now, live from Charleston, South Carolina, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us here in South Carolina. You know it is the gateway to the South in this presidential primary season.

We are at the College of Charleston, a backdrop that reflects the rich history of this beautiful city. South Carolina and the six other states that hold contests tomorrow could go a long way toward deciding the outcome of the Democratic race. At the very least, we expect to get an even clearer picture of whose days on the trail are numbered and who is the most likely to find himself facing off against President Bush.

This hour, we have a striking new snapshot, though, of the president's political standing and how he might fare against his would-be Democratic rivals.

Here's our senior political analyst, Bill Schneider.

(BEGIN VIDEOTAPE) WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): When a president's job rating dips below 50 percent, it's a sign of trouble. President Bush's job approval has taken a tumble over the past month, from 60 percent in early January, to 49 percent now. The first time his rating has ever dipped below 50 percent. In other words, trouble.

The president's biggest problem? Iraq. The public's approval of the way President Bush is handling Iraq has dropped from 61 percent a month ago to 46 percent now. The continuing loss of American lives, now more than 500, has taken a toll on the president. So has this revelation.

DAVID KAY, FMR. CHIEF WEAPONS INSPECTOR: The intelligence service believed that there were WMD. It turns out we were all wrong.

SCHNEIDER: The percentage of Americans who believe it was worth going to war in Iraq has fallen off sharply since the capture of Saddam Hussein in December. In the euphoria of that moment, nearly two-thirds said the war was worthwhile. Now, for the first time, fewer than half feel that way. Which may be why the president felt compelled to make this concession.

BUSH: I'm putting together an independent bipartisan commission to analyze where we stand, what we can do better as we fight this war against terror.

SCHNEIDER: President Bush's problems are bigger than Iraq, however. His rating on the economy has dropped eleven points. That's the toll of the Democratic primary campaign.

KERRY: I'm running for president to create jobs in America, and keep jobs in America.

SCHNEIDER: The poll shows John Kerry enjoys his biggest advantage over President Bush on jobs. Democrats are rallying to Kerry. And so is the country. Kerry leads President Bush by seven points right now.

Dean claims he's more electable than Kerry. He's wrong. He runs seven points behind President Bush.

Republicans hope to expose Kerry as a Massachusetts liberal, whose values are outside the mainstream. Right now, the voters don't see him that way. By 50 to 41 percent, they say Kerry, not Bush, is the candidate who shares their values.

(END VIDEOTAPE)

The Democratic rally isn't limited to John Kerry. Favorable opinion of the Democratic Party has surged over the last month to 59 percent. Favorable opinion of the GOP has sagged to 48 percent.

This spirited primary contest certainly hasn't hurt the Democrats one bit -- Judy.

WOODRUFF: Evidently not, Bill. Clear there's a lot of volatility out there. Bill Schneider, thanks a lot.

Well, John Kerry is targeting President Bush's record again today as he campaigns in two western states that hold contests tomorrow.

CNN's Kelly Wallace is following the Democratic front-runner.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: This is stop number six in John Kerry's seven-state tour before Tuesday's contest. He came here to the Land of Enchantment right after watching his beloved New England Patriots sail to victory in last night's Super Bowl.

According to recent polls, Kerry now enjoys a wide lead here in New Mexico, as well as four other February 3 states. He is competitive in Oklahoma and slightly trailing in South Carolina, according to recent polls. The senator could not seem to get those Patriots off his mind, as he spoke to a small crowd here at the University of New Mexico, urging New Mexicans to go out and caucus for him tomorrow.

KERRY: How about those New England Patriots, ladies and gentlemen? It's great to see New Englanders go to Texas and win. It sets a great precedent, and as the members of the Press Corps know, I predicted (UNINTELLIGIBLE) would clear it in the end. That he was going to win, with a kick. And I predict today that, like father like son, one term only, Bush is going to be gone.

WALLACE: Eliot Spitzer, New York's attorney general, and a man who will likely run for governor of New York, flew her to New Mexico to publicly endorse the Massachusetts senator. Kerry also winning the backing from two additional unions, one representing Treasury employees, the other representing retail and department store workers.

From here, Kerry flew off to Arizona, one of the states with the largest number of delegates at stake in tomorrow's contest. On Tuesday, he flies to Washington State to watch the election return. He told a conference call of supporters last night that if he has a great Tuesday, he will be able to make things happen in the next few days.

Kelly Wallace, CNN, reporting from Albuquerque, New Mexico.

(END VIDEOTAPE)

WOODRUFF: Howard Dean also is stumping in New Mexico and Arizona today, even though he and his lagging campaign team are looking beyond tomorrow's contest.

Our senior political correspondent, Candy Crowley, joins us on the telephone now from Santa Fe.

Candy, some pretty tough words today from Howard Dean about John Kerry. Hi. Let's try Candy again. Candy, are you there?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Yes, Judy, I can hear you.

WOODRUFF: OK. Candy, it's our impression that Howard Dean is bringing up John Kerry's name more today than we've heard.

CROWLEY: Quite a bit. I mean, it's been ratcheting up ever since stories about John Edwards and his contributions from special interests came up late last week. So what we've had is sort of a series of salvos sent Kerry's way. Dean saying, you know, he took my message and then turns out he's -- you know, had more special interest contributions than any other senator in the last 15 years.

Today, before a crowd in Santa Fe, where we still are, Dean said, you know, we need to get the special interests out of Washington. Then he added, "John, don't let the door hit you on the way out," which, of course, is one of John Kerry's soft campaign lines that Dean's throwing back at him.

So they're very hard on this. And I think what's striking here is that, at this point, when you listen to the intro speeches to the candidates, we hear a lot of things like, you know, we've already won because now the other candidates are talking about what we were talking about. This isn't coming from Dean, but it's coming from the people who introduce him. So there are some people in some times in public when you begin to see the waning expectations -- Judy.

WOODRUFF: Candy, what's this we hear about Dean's political director taking a leave of some sort? And also the departure, perhaps, of some of his other mid or lower level people? What's that about?

CROWLEY: Well, the Dean campaign has said for some time that they were looking at any and everywhere to see where they can save money. Now, they have yet to make those cuts as far as we can see. In some ways this has been a very heavy campaign. They had 400 paid workers. There has not been any kind of wholesale layoff.

Now, we did know -- we're told that some of these staffers we're hearing about are either burnt out or have some personal things going on. This has been a two-year stretch, and a rather emotional last couple of weeks. So as far as we can tell, neither one of the people you mentioned are gone yet. They're future sort of TBA while they work out some other things.

WOODRUFF: All right. Candy Crowley, following the Howard Dean campaign. She is on the ground with him in Santa Fe, New Mexico.

Candy, thanks very much. And I know we'll be checking with you a lot over the next day and going forward.

Well, John Edwards is keeping his feet firmly planted right here in South Carolina on this final day before the first in the South primary. He again criticized John Kerry for accepting contributions from lobbyists, and supporting trade pacts that he contends have cost American jobs.

Al Sharpton also here in South Carolina launching a primary-eve bus tour. He told reporters he hopes to win the nomination, but at the least he says he expects to have enough delegates to influence the party's platform.

Wesley Clark is campaigning out West, where his prospects tomorrow appear to be the brightest. His national campaign chairman says he expects Clark to do well in New Mexico because of that state's Hispanic and military communities.

Joe Lieberman and Dennis Kucinich both in Arizona today to join Clark, Dean and Kerry at a Latino forum in Phoenix.

Well, I caught up with John Edwards today right here in Charleston. Up next, my interview with the senator and South Carolina native. Is he willing to concede anything to John Kerry?

Also ahead, I'll talk to a South Carolinian who knows the political turf here as well as anyone. Does he have any predictions about tomorrow?

And later, blame it on the pizza. How food on the go can cut into your campaign finances.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Senator John Edwards is banking on a first place finish here in South Carolina to invigorate his campaign. In a new insider advantage poll, Edwards leads John Kerry by four points. I spoke with Senator Edwards a short time ago after a rally right here at the College of Charleston.

(BEGIN VIDEOTAPE)

WOODRUFF: Senator Edwards, thank you for talking with us here in your birth state of South Carolina. Senator, I know you're working hard in South Carolina, but it looks like the other candidates are not competing as hard as we thought they were going to be. If you win this state, is it that great a victory?

EDWARDS: Oh, if we win it's a huge victory. John Kerry is spending a huge amount of money here. He announced his campaign here. He's got the support of the most prominent statewide politicians. This is a clear head-to-head between Senator Kerry and myself in South Carolina.

WOODRUFF: Assuming you win South Carolina, where do you go from here? Senator Kerry's out there racking up delegates in these other states. He's got what some people call the big momentum. How do you get to a point where you are literally challenging him in the delegate totals?

EDWARDS: Well, I think we'll win delegates in every state tomorrow. We've got great operations in Oklahoma, in Missouri, in New Mexico. In all these states we're competing, and we will win delegates in every one of these states. And then we go to Michigan, Tennessee, Virginia, all places where we expect to do well.

WOODRUFF: Senator, you have done very well so far with a positive message. You've gotten a lot of credit for that. But at some point don't you have to begin to draw distinctions between yourself and your main opponent, whether it's Senator Kerry or someone else?

EDWARDS: Yes. There are distinctions between Senator Kerry and myself. For example, here in South Carolina the issue of trade. Senator Kerry and I have very different positions on the issue of trade. And our records clearly demonstrate that.

And not only that, it's not an academic issue for me. I've lived with it. I have seen up close what impact it has on people's lives when factories close, when plants close, and what it does to communities and families. And I think there are clear differences.

In addition to that, I think we want real change in Washington. We need somebody who wasn't been there for 15 or 20 years to bring about that change.

WOODRUFF: What about all the stories that have come out in the last few days about his lobbyist contributions? Is that something that you're going to begin to talk about at some point?

EDWARDS: I have always talked about the influence of lobbyists in Washington. And I think we need to cut off that influence. I think it's important -- and it is a distinction between Senator Kerry and me, you're right about that, because I don't take contributions from lobbyists and he obviously has.

WOODRUFF: Senator, there was a story in "The New York Times" over the weekend about your career as a trial attorney. And while it gives you great credit, and you talk about this on the campaign trail, being a man of the people and representing small, ordinary Americans, it also makes the point that you were selective in the families you chose in terms of contingency fees. And it talked about there were many people who you could have represented. You chose certain ones.

Could that ultimately be a vulnerability for you?

EDWARDS: No. I think what it shows and demonstrates is that I was very serious about being certain that the cases I took on were cases which were clearly meritorious. Cases where I could really help the families who were involved. I took these cases very personally, Judy. And they had to be cases that I was personally invested in. and that's the reason I did the cases I did.

WOODRUFF: Quick question about the Bush administration, today saying that they are going to go forward with recommending an independent investigation into what happened about weapons of mass destruction intelligence in Iraq. Does this basically get the administration off the hook on that issue?

EDWARDS: No, it doesn't get them off the hook. It means we're going to find out the facts. I mean, the whole purpose of the independent commission is to find out why this discrepancy exists and whether somebody misrepresented or exaggerated the facts. And so they can be held accountable, and to prevent this from happening again. Now we're going to find out why.

WOODRUFF: Last question, Senator. You're often asked about whether you're willing to be John Kerry's vice presidential running mate. What about John Edwards' running mate? Have you given it any thought?

EDWARDS: I've given it a lot of thought. You should ask Senator Kerry whether he wants to be my running mate.

WOODRUFF: Is he the only one you're interested in?

EDWARDS: No, there are others. There are other good people out there, and I'm thinking about a lot of them, actually.

WOODRUFF: You want to name any of them?

EDWARDS: Not right now.

WOODRUFF: All right. Senator Edwards, thank you very much for making time.

EDWARDS: Thanks, Judy. Thanks for having me.

WOODRUFF: We appreciate it. Thank you.

(END VIDEOTAPE)

WOODRUFF: Senator John Edwards. I talked to him a few hours ago. You could tell he was losing his voice but holding onto it.

Well, tomorrow, South Carolina Democrats do hold their first presidential primary since 1992. This afternoon, the state party removed a controversial requirement that critics say could have held down participation. More on that when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

WOODRUFF: When it comes to first-in-the-South presidential primaries, South Carolina Republicans have been the ones in the spotlight lately. But tomorrow South Carolinas' Democrats get their turn. And it isn't without a little controversy. This afternoon, the state party announced that it is withdrawing a so-called loyalty oath that all voters were going to be asked to sign.

With me now is College of Charleston professor of humanities, Jack Bass.

Jack Bass, good to see you. Thanks very much for talking with me.

JACK BASS, COLLEGE OF CHARLESTON: Good seeing you, Judy.

WOODRUFF: What about this loyalty oath? The Democrats were going to ask people to sign it. Now they've decided to pull it. What's going on?

BASS: Well, I think the public awareness was only developed in the last week. And really in a heavy sense the last few days. And I think there was a lot of adverse reaction to it.

And I think Joe Erwin, the state Democratic chairman, this was not his doings, as we say down here. And he didn't originate it. And he came to grips with it and said it was really a mistake and took charge and consulted with everyone, and then had a press conference this afternoon saying we're going to abandon it.

And what it did, there was a provision in it that said each voter must say, "I am a Democrat." And they were saying, well, you had to be a Democrat for a day.

WOODRUFF: The concern was that it would turn off Independents and Republicans who might want to vote.

BASS: Right. It would turn off Independents and Republicans. And a lot of Democrats were unhappy about it when they heard about it. They didn't think it was very smart, because in this state there is no registration by party. And traditionally, anyone can vote in any primary, but they can't vote in the other party's primary at the same time.

WOODRUFF: So Professor Bass, removing this loyalty oath, taking it away, does that help one of these candidates or another?

BASS: I think it helps John Edwards. Because John Edwards -- the polls, at least, have indicated that he's had more strength among Independent voters and among Republican voters. And part of that had to do with he's a hometown boy.

He was born in South Carolina. He's made much of that in his advertising. He only lived here for a year, but then he moved to North Carolina. His parents were textile mill workers, blue-collar workers. And he is very, you know, proud of that background, and that he comes out of that and feels he identifies with working class people.

WOODRUFF: You know a lot about South Carolina politics. You've been talking to people. I know, because you and I spoke earlier today. You've been talking to people continuously. What are you hearing about what is shaping up here in South Carolina?

BASS: What is shaping up tomorrow seems to be essentially a two- man race between John Edwards and John Kerry. But Kerry, this opening up the primary will also help Wesley Clark. So there's a potential race for second place.

WOODRUFF: And are there parts of the state or certain segments of the electorate that are looking better for Edwards or better for Kerry?

BASS: Edwards seems to be particularly strong among voters over 55. But he seems to have strength in all groups and all regions. But his greatest strength appears to be older voters and Independent voters.

WOODRUFF: And what about John Kerry?

BASS: John Kerry is strongest among people who identify themselves as Democrats.

WOODRUFF: And what about among the African-American community? We are led to believe there's going to be a large turnout among African Americans. They'll make up a sizable proportion of those who turn out for this primary. What are you learning about that?

BASS: My impression based on what I've seen and data I've seen is that -- and just talking around to people, there's really almost like a four-way split among African American voters. At least as of the weekend, it was for Edwards, Kerry, Al Sharpton, and General Clark.

WOODRUFF: So hard to predict at this point?

BASS: It's hard to predict. And my hunch is it will vary from community to community. Black politics in this state tend to be very local.

WOODRUFF: All right. So no big predictions. Are you making a prediction?

BASS: Well, if I had to make a prediction on who's going to win, yeah, if I were -- I'm not predicting. But if I were predicting, I would have to predict John Edwards.

WOODRUFF: All right. We are going to remember that, Professor Jack Bass. It's great to see you.

BASS: Good to see you.

WOODRUFF: Thank you very much for joining us.

Well, speaking of John Edwards, he says South Carolina is a must- win state for himself. Coming up, I'll ask Senator Edwards about the alternatives. Would he consider the number two spot if John Kerry wins the nomination?

Actually, we've already heard that. But maybe we'll hear it again.

Also ahead, a first for the '04 primary cycle. Large numbers of African-Americans will have a say tomorrow, but what will they say?

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Groundhog Day. Will the '04 Democrats get a sense of deja vous when votes are tallied tomorrow? We'll check the final polls in the February 3 primary and caucus states.

The South Carolina test. Which Democrat will fare best with African-American voters? We'll get the lay of the land.

Political checkup for the president. In this Heart Awareness Month, is there reason for blood pressures to be rising at the White House?

BUSH: I asked the vice president what he was up to.

LAURA BUSH, FIRST LADY: What did he say?

BUSH: He said he was heading to the treadmill.

ANNOUNCER: Now, live from Charleston, South Carolina, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back to Charleston on the eve of a pivotal round of Democratic primaries and caucuses. While the contest in South Carolina and six other states could cement John Kerry's status as the front runner, the senator also is enjoying a surge in our national poll.

The CNN/"USA Today"/Gallup survey of registered Democrats around the country shows Kerry way ahead of his rivals with 49 percent. Howard Dean is a distant second with 14 percent, followed by John Edwards, closely by John Edwards with 1 percent.

Among likely general election voters, Kerry now is seven points ahead of President Bush in a head-to-head match up as Mr. Bush's approval rating has fallen. John Edwards is the only other Democrat who comes out ahead of the president, but in his case by just one point.

Edwards today is here in South Carolina, staking his campaign's future on the state where he was born. And CNN's Frank Buckley is covering it.

(BEGIN VIDEOTAPE)

REV. DARRELL JACKSON, BIBLEWAY CHURCH: So join me and go to the polls and vote Tuesday.

WOODRUFF (voice-over): It's Sunday, and in South Carolina a familiar call sounds from the pulpit.

JACKSON: Will we vote?

WOODRUFF: In black churches, politics and religion fuse. But in the Palmetto State, African-Americans who make up half of Tuesday's primary vote, seem torn.

UNIDENTIFIED FEMALE: Dean, Edwards, himself and maybe Kerry.

UNIDENTIFIED MALE: To be honest I'm really undecided at this time. WOODRUFF: When we first visited the Bibleway Church Back in December, Pastor Darrell Jackson was torn, too. After initially signing up for John Edwards, the pastor was having second thoughts.

JACKSON: A lot of us are concerned with finding a candidate that we think could represent all of the people who can do well in the general election. And I'm not sure if Edwards is that candidate or not.

WOODRUFF: But Iowa breathed new life into the senator's campaign. And this Sunday...

JACKSON: Senator John Edwards from North Carolina, born in South Carolina. Stand for me, John.

WOODRUFF: ... there he was in the pews waving to the congregation, clapping to the music, endorsed by the pastor, embraced as a native son.

JACKSON: If he grew up in North Carolina, then you know what segregation was all about. You know what it means when someone says Jim Crow. You don't have to study it at Harvard or Yale, but you've lived it every day of your life.

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: And we have work to do, don't we brothers and sisters? We have such work to do.

WOODRUFF: After services, Edwards makes his pitch and wins a convert.

UNIDENTIFIED FEMALE: I was really leaning towards Clark. But listening to Senator Edwards and his issues and his views about the poverty and the children, I think he has my vote.

WOODRUFF: The senator's humble roots resonate here where black voters say he knows where they're coming from. But he's not the only one.

Reverend Al Sharpton, the only African-American candidate still in the race, moved his campaign down to South Carolina last month.

UNIDENTIFIED MALE: He's been preaching at churches. He is resonating. He's connecting with people where they are. He sort of represents the struggle, the civil rights movement that still is continuing.

WOODRUFF: Indeed, at Bibleway the reverend is a strong contender for votes.

UNIDENTIFIED FEMALE: He's doing a good job getting other candidates to kind of step up, what they're doing as it relates to taking care of minorities, being inclusive.

WOODRUFF: Not leaving much of an impression at Bibleway, the yankee front runner, John Kerry.

UNIDENTIFIED MALE: Carolina is somewhat more diverse than what the state of Massachusetts is.

Still, Kerry's running strong in the state, buoyed by the endorsement of South Carolina's most powerful black official, Congressman Jim Clyburn.

Howard Dean, however, is having a little more trouble.

UNIDENTIFIED MALE: I don't think he understands the issues that are important to me, or my situation being African-American.

WOODRUFF: Still looking for answers, and praying for guidance, with the election just hours away.

(END VIDEOTAPE)

WOODRUFF: Well our apologies. Obviously that was a look at how African-American voters are thinking in the state of South Carolina right now. We revisited one of the churches that we were here to visit just last month.

As I told you a minute ago, some of the gremlins are out there, we're trying to get them straightened out. Our Frank Buckley has been traveling on the trail today with senator John Edwards. Here is a look at Senator Edwards' day.

(BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: John Edwards is barnstorming across South Carolina today, going from one end of the state to the other. He's fighting a case of bronchitis with a dose of antibiotics. He's ahead in the polls here. Now his campaign doing its best to make sure that his supporters come out on primary day.

He began the day in Charleston, at the College of Charleston, one of three college stops today. Among the issues he's driving hard in the last full day of campaigning here, jobs, in a state that leads the nation in per capita loss and manufacturing jobs. Fifty-eight jobs lost here since 2001.

EDWARDS: A job is about more than a paycheck. It's about dignity. It's about self-respect. It's about men and women who have spent their lives taking care of their families and want to do it again. As your president we will bring jobs to South Carolina.

BUCKLEY: A senior campaign official says the strategy right now is to make sure that John Edwards appears in every media market in South Carolina today. He's also doing satellite television interviews in three other states, Oklahoma, Missouri and New Mexico.

Surrogates are doing radio interviews on black radio stations. Up to half of the voters on primary day here will be African-American. Civil rights and race, major issues that the senator frequently mentions in his stump speech.

EDWARDS: I believe we, those of us in the South, have an enormous responsibility when it comes to issues of civil rights and equality. And that responsibility is to lead, not follow, when it comes to civil rights and responsibility.

BUCKLEY: And this evening the senator returns to Seneca, South Carolina, the place in which he was born, where he'll ask the voters of South Carolina to send the son of a mill worker to the White House.

Frank Buckley, CNN, Columbia, South Carolina.

(END VIDEOTAPE)

WOODRUFF: And that was Frank Buckley's report.

Well while John Edwards and Al Sharpton stay in South Carolina, the five other Democratic contenders will make appeals to Latino voters at a forum this evening in Arizona, which also holds its primary tomorrow. A new Arizona poll shows John Kerry 13 points ahead of second place Wesley Clark. Howard Dean is in third place.

Earlier today, Kerry made a final push to sway undecided voters in New Mexico before tomorrow's caucuses there, saying President Bush doesn't understand the struggles facing the nation.

Meanwhile in Oklahoma, Wesley Clark is giving Kerry a run for his money. They are neck and neck in a new Oklahoma poll with 23 percent each. John Edwards coming in third with 14 percent.

Clark stumped today in Oklahoma, as well as in New Mexico and Arizona. He received endorsements this weekend from newspapers and Oklahoma's third and fourth largest cities.

Howard Dean is also campaigning out West with lowered expectations for his performance tomorrow. He'll spend tonight in Washington state where he says he hopes to get some traction in the next round of caucuses on Saturday.

While the Democrats choose a nominee to take on President Bush, public opinion of Mr. Bush has taken a tumble. Our new poll shows Mr. Bush's approval rating is at 49 percent, below 50 percent for the first time in his presidency. This comes at a critical time for Mr. Bush as he sends his new budget to Congress, and prepares to appoint a commission to review intelligence on Iraq's weapons of mass destruction.

Let's bring in our White House correspondent Dana Bash. Dana, a lot of them, a lot for those at the White House to be digesting today.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: (AUDIO GAP) certainly a surprise to many here at the White House that he didn't think any weapons of mass destruction would be found.

Since then there's been mounting pressure from both Democrats and Republicans to appoint some kind of a commission beyond what's already being done in Congress and elsewhere to look into just now this happened. What the intelligence really did show, and why, perhaps, it was wrong.

And now the White House -- although the spokesman was pressed many times on that issue, he was very careful not to say that the prewar intelligence was wrong. But the president is bowing, many say to political pressure and is going to appoint a commission.

(BEGIN VIDEO CLIP)

BUSH: What we don't know yet is what we thought, and what the Iraqi Survey Group has found. And we want to look at that.

But we also want to look at our war against proliferation and weapons of mass destruction in a broader context. And so I'm putting together a independent bipartisan commission to -- to analyze where we stand, what we can do better as we fight this -- fight this war against terror.

(END VIDEO CLIP)

BASH: Now you heard the president say this is going to be an independent commission. But many on Capitol Hill, many Democrats, including the Senate minority leader question just how independent it will be because it is going to be a nine-person commission appointed by President Bush. There you see David Kay leaving the White House today, Mr. Bush went over some of the prewar intelligence, some of what David Kay knew in a private lunch here at the White House, and Judy, this all comes, as you mentioned our new poll, it shows some interesting numbers.

And that is that support for the overall war, whether or not it was worth it, has gone down over the past three weeks by ten points. And also an interesting poll number to look at. Let's take a look at whether or not people think it was justified to go to war even if weapons of mass destruction have not been found. Just about half of Americans you see there, 48 percent say it would still be justified.

So what you see the president doing, and the White House is making clear that it simply wasn't necessarily their decision, it wasn't necessarily their erroneous information that led to this -- to going to war and to making the claims. But instead they are saying that they want to look into this and take a broad look. And not just Iraq prewar intelligence. But at any intelligence about North Korea and Iran and the like -- Judy.

WOODRUFF: Dana, in the middle of all this, the president also had to deal today with sending his budget proposal over to the Congress, some conservatives already jumping on it for the size of the deficit. What is the White House saying about that?

BASH: Well, the line from the White House is, as it has been, that that deficit will be cut in half in the next five years. The OMB director Josh Bolton came out today with some charts to show just exactly how they will do that. That is, of course, in large part to quell some of that conservative criticism that we're hearing from Capitol Hill and elsewhere.

But, you know, in any year the president's budget is very much a political document, in an election year even more so. You see from looking at what his priorities are in terms of spending, what his major election year themes might be. That is, of course, defense, the war on terrorism, homeland security. Those are the major boosts in spending, if you will. But the White House is saying that they are intending to hold the line on some other domestic priorities. Even making the point, perhaps trying to send the message to some of the conservatives that they are going to cut 65 programs that they say aren't necessary -- Judy.

WOODRUFF: All right, Dana, thank you very much.

As you can tell from Dana's report the White House is trying to accentuate the positive. Today's news could have a definite downside. Coming up, the politics of budget deficits.

Coming up, the politics of budget deficits. I'll also get an overview of the Democratic presidential race from Paul Begala, one of the hosts of CNN's "Crossfire." Plus, political prognostications, pigskin style.

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BUSH: At the same time we're calling upon Congress to be wise with the taxpayers' money, we look forward to working with them to bring fiscal discipline to -- to the appropriations process so we can cut the deficit in half over a five-year period of time.

(END VIDEO CLIP)

WOODRUFF: President Bush sent his new budget up to Capitol Hill today. He's asking Congress to approve $2.4 trillion worth of spending. Joining me from Washington is Greg Mankiw, he is chairman of the White House Council of Economic Advisers. Thank you for joining me, Dr. Mankiw.

First of all, what do you say to those conservatives out there who are looking at this budget and saying if anything, we expected the president to be working on getting the deficit down, rather than seeing it at this level?

GREG MANKIW, CHAIRMAN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: Well, the president is working on getting the deficit down. He's said many times that he wants to reduce the deficit in half over the next five years and he's presented a budget today that does exactly that. The deficit is unwelcome. It's undesirable. But it's also understandable. The president inherited a recession. He had to deal with the war on terrorism. And those events resulted in a deficit. But that deficit will shrink over time. The president has shown today how he's going to do that.

WOODRUFF: I want to quote something that majority leader Dick Armey said in a report in the "Wall Street Journal" late last week, and it was, he said, "I can't really blame the Democrats anymore for the deficit, because it's the Republicans, my own party, that's been in power for the last three years." What do you say to people like Dick Armey and other Republicans who support this president? MANKIW: Republicans have long been the party of fiscal conservatives. This president is a fiscal conservative. If you look at the details of this budget, you see a substantial amount of spending restraint. The president's job is to set priorities and he has said that defending the homeland, protecting our shores against foreign and terrorist threats, is his first priority. You see substantial increases in homeland security and national defense.

But if you look at nondefense, nonhomeland security spending, you see that that is rising at a very slow rate. Indeed, for this budget that we just presented today it's rising at a less than 1 percent rate. That's below the rate of inflation. That's a spending cut. That's substantial spending restraint. Now we're going to work with Congress to get that budget passed in order to get that deficit down.

WOODRUFF: If that's the case, Gregory Mankiw, then how do you explain comments from -- there's an economist at the Heritage Foundation who's quoted today as saying the president with this budget is not focused on his conservative base, he is positioning himself between conservatives in Congress and the Democratic party. He says this may be good politics but it's bad policy. It's a lost opportunity to get overrun government spending under control.

MANKIW: No, the president's balancing various priorities. He wants to get the economy going and wants to do that by making the tax cuts permanent. He wants to defend the homeland. He's going to do that by increasing homeland security spending and increasing defense spending. But if you look at the rest of the budget there's a lot of spending restraint. The goal is to get government down, to get the budget deficit down, and the president has shown a path to do that.

WOODRUFF: And Dr. Mankiw, you are one who as an academic for a number of years wrote about the dangers behind large deficits, and questioned the wisdom of increasing or continued tax cuts. Has your philosophy changed in terms of budgets and tax cuts?

MANKIW: No, I've long believed that large, persistent deficits are not desirable. The president believes they are not desirable. But there's also a time to run budget deficits. Recession and wars are two classic textbook examples of when a government should prudently run a budget deficit. As the economy recovers and defense spending levels off we'll see the deficits come down.

The president has definitely focused on getting the budget deficit down. You see nondefense, nonhomeland security spending coming down in real terms in this budget. That's a very important priority getting the budget deficit down. I have not changed my views. My views are very consistent with the president's.

WOODRUFF: All right. We're going to leave it there. Dr. Gregory Mankiw who is chairman of President Bush's Council of Economic Advisers. Thank you for joining us. Good to see you again.

MANKIW: Thank you.

WOODRUFF: We appreciate it. We sort through the candidates, the polls, and the expectations game straight ahead. A preview of tomorrow's primaries and caucuses next when "Crossfire's" Paul Begala joins me here at the College of Charleston.

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WOODRUFF: With me now on a windy January -- February afternoon, sorry. How fast this calendar moves on the College of Charleston campus is Paul Begala of CNN's "Crossfire." Paul, I want to pull you in as somebody who has strategized and planned campaigns before from the inside. What's going on inside these campaigns right now? Today, if you're John Kerry, what do you really want to have happen? Obviously, you'd like to win everywhere but what do they need tomorrow?

PAUL BEGALA, CO-HOST, "CROSSFIRE": Well, they're trying to run seven different campaigns in seven different states. This is what the Pentagon calls asymmetrical warfare. There's one dominant power and everybody else is trying to pick him off. General Wesley Clark in Oklahoma thinks he can knock him off there. John Edwards here in South Carolina thinks he can knock Kerry off here. And so he's trying to hold off both of them, even while Howard Dean, pretending not to run in these seven states, is savaging him. So he's really got a three-front war going on in seven states at the same time. It's very exciting. It's very difficult.

WOODRUFF: That's a tough transition coming off of focusing just on Iowa, just on New Hampshire and suddenly you've got the seven.

BEGALA: Absolutely. He's got a lot of momentum, which is great. But I suspect his campaign is still psychologically not made the turn, not even just toward being the front-runner, which is always dangerous, but toward running against somebody other than Howard Dean. They have tooled their whole campaign toward Howard Dean for months. Now that governor Dean has fallen down quite a bit and doesn't seem to be seriously contesting these states I'm not sure the Kerry campaign knows quite what to make of John Edwards and Wes Clark who appeal as more moderate candidates and also run on the electability issue the same way John Kerry does.

WOODRUFF: Very quickly. On Edwards and Clark, if you're John Edwards, clearly, you've said you've got to win South Carolina. What else quickly do you need to do going forward?

BEGALA: Well, it's really, for them, it's day-to-day. This is sort of a hail Mary pass. They have to win here. But then if they do, they can get John Kerry alone one on one. If I'm Edwards I'm not only wanting to win here. I am praying that Kerry wins in Oklahoma so it's just Edwards against Kerry for the rest of the campaign without Wes Clark or Howard Dean messing it up.

WOODRUFF: And the same thing with Wes Clark. If you're Wes Clark you don't want John Edwards to win in South Carolina.

BEGALA: Right. It's a little more complicated. Like in football I always root for the Texas Longhorns and whoever is playing against the Texas Aggies. These guys not only want to win, but they want their rival, John Kerry, to win in the state that they're not running in. So Kerry has to win everywhere. But Wes Clark only has to win in Oklahoma and hope that John Kerry wins here. It's like a three-tiered shot.

WOODRUFF: The sooner it's a two-man race the better it is for them.

BEGALA: And the more perilous it is, I think, for John Kerry. Because, again, he was targeting Howard Dean. If he gets Clark or Edwards, he's got to retool.

WOODRUFF: All right. We're glad you're here to help us retool. Paul Begala is going to be on "Crossfire" in just a few minutes at the bottom of the hour.

The Patriots came up big talking about football in the Super Bowl. Is there a lesson to be learned in the race for the White House? John Kerry plays up his ties to New England and finds inspiration in his favorite team (UNINTELLIGIBLE).

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RHONDA SCHAFFLER, CNN CORRESPONDENT: I'm Rhonda Schaffler at the New York Stock Exchange. Stocks were down, stocks were up. In the end little changed. The Dow Industrials closing with a gain of eleven points. Nasdaq fell three. There was some upbeat economic news today. An index in manufacturing activity hit a 20-year high in January. That's the latest from Wall Street. JUDY WOODRUFF'S INSIDE POLITICS continues in 90 seconds.

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WOODRUFF: Checking the headlines in our campaign news daily. One of the presidential hopefuls is drawing inspiration from the Super Bowl. John Kerry's favorite team, the New England Patriots, as we all know, pulled off a last-second victory in last night's game. Senator Kerry watched the Super Bowl at a Fargo, North Dakota sports bar. Making reference to the site of the game and the home state of President Bush, Kerry said this morning the Patriots victory proves that a New Englander can win in Texas.

Howard Dean's fund-raising prowess has gotten a lot of publicity. But he's also shown a talent for spending money at a rapid pace. Dean's raised about $41 million total. But he's now believed to have about only $2 million or $3 million on hand. How did he spend it all? In the last quarter, apart from the usual expenses for ads and mailings, the campaign spent almost $15,000 just on parking. They also spent $4,700 on pizza. And they paid $4,300 to singer Carly Simon. Ah, priorities.

That's it for INSIDE POLITICS. I'm Judy Woodruff from Charleston. Join me again tomorrow for a special expanded edition of INSIDE POLITICS on the day of the seven-day showdown. Tomorrow, 3:00 Eastern. "Crossfire" and my friends Begala and Novak start 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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