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JUDY WOODRUFF'S INSIDE POLITICS

Bush v. Kerry: New ad Attack; Interview With Ken Mehlman; Interview With Jeanne Shaheen

Aired March 16, 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: An early Veterans Day in the presidential race. While John Kerry plays up his military credentials, New Bush ads try to shoot him down.

UNIDENTIFIED FEMALE: Though John Kerry voted in October 2002 for military action in Iraq, he later voted against funding our soldiers.

UNIDENTIFIED MALE: Mr. Kerry...

UNIDENTIFIED FEMALE: No.

ANNOUNCER: The Bush reelection bid by the numbers. Do the latest polls add up to trouble? We'll ask a top campaign official.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: It is really wonderful to be here in West Virginia.

ANNOUNCER: A small state gets mountains of attention. Why all the fuss about West Virginia?

(END VIDEOTAPE)

ANNOUNCER: Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

CANDY CROWLEY, HOST: Thanks for joining us. Judy is off today. I'm Candy Crowley.

More evidence that the Bush campaign isn't pulling any punches in its ad attacks on John Kerry. Even before the Democrat White House hopeful set foot in West Virginia today, the president's team was previewing New spots to air in that battleground state.

Let's begin with our White House correspondent, Dana Bash.

Dana, I am assuming that this is the start of a full-fledged ad campaign on the part of the Bush-Cheney team.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, that's right, Candy. At least at the beginning it's a pinprick air strike of sorts, if you will.

Now, Senator Kerry, of course, has a Veterans Day event in West Virginia today. So the Bush campaign decided to get some -- some of their message out while Senator Kerry is getting some of his free media there.

The president, of course, is -- has been attacking Senator Kerry on the issue of credibility. And this ad goes at Senator Kerry while he's talking to veterans and about veterans on voting for the war in Iraq but voting against an $87 billion funding bill to support it.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES (voice-over): I'm George W. Bush and I approved this message.

UNIDENTIFIED FEMALE: Few votes in Congress are as important as funding our troops at war. Though John Kerry voted in October 2002 for military action in Iraq, he later voted against funding our soldiers.

UNIDENTIFIED MALE: Mr. Kerry...

UNIDENTIFIED FEMALE: No body armor for troops in Kerry.

UNIDENTIFIED MALE: Mr. Kerry...

UNIDENTIFIED FEMALE: No higher combat pay.

UNIDENTIFIED MALE: Mr. Kerry...

UNIDENTIFIED FEMALE: No. And better healthcare for reservists and their families?

UNIDENTIFIED MALE: Mr. Kerry...

UNIDENTIFIED FEMALE: No. Wrong on defense.

(END VIDEO CLIP)

BASH: Now, Bush campaign aides say this is part of what they're calling a more aggressive strategy to highlight what they've dubbed John Kerry's parallel universe. Here they say he plays up his connections to veterans and military but voted against a bill to support troops.

And this, Candy, is the latest installment from team Bush, trying to attack Senator Kerry's credibility, trying to define him before he can define himself before the voters. And the president's campaign aides say that they feel that the strategy has been working, pointing to recent polls, including today's in The New York Times that shows that a majority of those responding say that John Kerry, they believe, says what he thinks people want to hear -- Candy.

CROWLEY: Dana, that's a pretty tough ad. And it seems to me they're beginning to crank it up on the ground as well. I want to return you to the famous Kerry remark on leaders who are telling him that they really want George Bush out.

There's been a change in the verbatim of that taken by a reporter, to take out the word "foreign leaders." But the context of the statement clearly shows Kerry was talking at foreign leaders, saying that there were a lot of them who privately tell him they want George Bush out. And the White House has picked up on that. Yes?

BASH: Not only picked up on it, but, Candy, they are really stirring the pot on this one. These are comments that Senator Kerry made more than a week ago. And we heard this week from the White House podium, from the campaign. And today, we heard from the president himself from the Oval Office.

(BEGIN VIDEO CLIP)

BUSH: I think it's -- look, if you're going to make an accusation in the course of a presidential campaign, you ought to back it up with facts.

(END VIDEO CLIP)

BASH: Now, it wasn't only the president, it was also the vice president today speaking in Colorado. He said essentially that if Senator Kerry is saying that foreign leaders have an opinion on the American electorate, on the campaign and how it's going, he needs to say exactly what they're saying and how they're saying it. Vice President Cheney said that it's the Americans that need to determine the outcome of the election, not foreign leaders.

Now, Candy, this is something that the Bush campaign is calling evidence of John Kerry's crazy talk. Again, part of the credibility wars, trying to paint him as somebody almost like Howard Dean, and perhaps even Wesley Clark during the Democratic primaries, who is willing to say anything and not back it up -- Candy.

CROWLEY: Dana Bash, we're going to have an awfully long eight months at the White House.

BASH: We are.

CROWLEY: Thanks very much.

John Kerry quickly responded today to the latest offensive by what he calls the Republican attack machine, which is why we brought our own personal attack machine here, Bob Franken, to talk about what Kerry did today in West Virginia. And why West Virginia?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, in response to the Bush ad, Kerry told a veterans' group in West Virginia that it was the president who send underprepared troops into the war with inadequate equipment.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): He offered this explanation for his vote against the $87 billion: he said it came after Republicans refused his amendment to pay the bill by reducing a tax cut for the wealthy.

KERRY: You know what? The president said no, the Republicans voted no, the Democrats voted yes. We didn't get to pay for this and not add it to the deficit. We could have paid for that entire $87 billion, and that would have been shared sacrifice in the United States of America.

FRANKEN: George Bush won West Virginia and its five electoral votes the last time around. But now Kerry forces want to exploit Bush flip-flops in steel tariffs, and policies they say have harmed the all-important coal industry.

KERRY: There are all kinds of promises broken. They're just laying in tatters.

FRANKEN: Forget the credibility question, said Kerry, raised by the Republicans about his claim that overseas he was the preferred candidate. Focus instead on the president's record on healthcare, the economy, the Iraq war.

KERRY: And on each and every one of them, this administration has yet to level with the American people.

FRANKEN: John Kerry's visit to the state focuses on a small prize with huge symbolic value.

(END VIDEOTAPE)

FRANKEN: West Virginia had been almost heaven for Democrats, but the last time around it was almost Hades. And Kerry says he wants to return it to the promised land, Candy, from the land of broken promises.

CROWLEY: Before you break into song, thanks very much, Bob.

A national poll published today shows that Kerry is losing some ground against President Bush. The president leads Kerry 46 percent to 43 percent in The New York Times-CBS News survey of registered voters nationwide. In late February, the same poll showed Kerry a point ahead of Bush. When Independent candidate Ralph Nader is factored in, the president's support holds steady at 46 percent, but John Kerry falls to 38 percent, losing support to Nader, who gets 7 percent.

Our "Campaign News Daily" begins with a team of big-name Democrats raiding big cash for John Kerry. Bill Clinton is the headliner among a group asking the party faithful for money.

In addition to Clinton, the 10-day campaign for $10 million features Tom Daschle, Nancy Pelosi, Hillary Clinton, and John Lewis, among others. In an e-mail appeal sent earlier today, the former president writes: "Let's make today the day the entire Democratic Party spoke with one voice. Send a donation right now to help me launch a $10 million in 10 days fund raising drive for John Kerry's campaign."

President Bush has scheduled his first official campaign rally of 2004 in -- go ahead, guess -- the state of Florida. Republicans say they expect up to 12,000 people to attend Saturday's rally in Orlando's Orange County Convention Center. Swing voters in central Florida and Orange County are expected to play a key role in deciding Florida's 27 electoral votes.

Is the Bush camp feeling jittery about Florida and other battleground states? Up next, Bush campaign manager Ken Mehlman weighs in on the state of race and the stumbles along the way.

And later, Kerry campaign chairwoman Jeanne Shaken. Why do most Americans think her candidate is telling them what they want to hear?

Plus, how does an out of this world pin-up girl figure into today's Illinois primary? Find out on INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

CROWLEY: A short time ago, I talked with Bush-Cheney 2004 campaign manager, Ken Mehlman. We began by talking about the campaign's New ad aimed at veterans. It's the earliest we know of that any president used opponent's names in ads. I asked Mehlman why the campaign feels it's necessary.

(BEGIN VIDEOTAPE)

KEN MEHLMAN, BUSH CAMPAIGN MANAGER: We think this ad is important to correct the record. If you consider the Kerry campaign for the past week, what you've had is, you've had a parallel universe from reality.

Reality is that Senator Kerry voted against benefit for our troops who were in combat, voted against providing them with the body armor they needed, voted against providing armor for the Humvees. And now he's in West Virginia saying that he's for those things and the president is the one that's against them.

And so what you have is someone who has a reality that he wants to hide from. And so the campaign has created this parallel universe where he attacks on the very things that he's vulnerable on. This ad makes this point.

CROWLEY: The body armor issue, was that specifically in that supplemental bill?

MEHLMAN: It was.

CROWLEY: It was specifically listed?

MEHLMAN: It was listed.

CROWLEY: Now, his argument has been, as I'm sure you know, look, I was for supporting the troops, I was for rolling back the tax cuts for the wealthiest of Americans to pay for it. That is a legitimate argument to say, I was for that, but I think here's how we need to pay for it?

MEHLMAN: Well, I'd have two responses. First of all, when our troops are in combat, most of the Senate, with the exception of 12 senators, 88 senators were for them, period. They needed that help. It was important for the protection of those troops. And that's how most people thought about this.

But secondly , we strongly believe that you should always support the troops when they're in harm's way. And if Senator Kerry says I will only support troops if you also raise taxes on their families, I don't thinks that the right approach.

CROWLEY: Let me move you on to just the general thrust of the Bush-Cheney campaign so far. I want to first play you something that Senator Chuck Hagel, Republican from Nebraska, told us yesterday.

(BEGIN VIDEO CLIP)

SEN. CHUCK HAGEL (R), NEBRASKA: The White House was inept, incompetent. I was stunned by what happened. Not one Republican senator knew about this.

I'm the senior Republican of Nebraska, co-chairman of the president's campaign. I didn't know about it until I saw the AP story that John Kerry had just put out defining Tony Raimando. This was gross incompetence on the White House part.

(END VIDEO CLIP)

CROWLEY: OK. Now, he was talking about the manufacturing czar appointment that never got announced. And the Kerry campaign hit it before it happened.

And this is a senator from Nebraska, was a Nebraska businessman. Add to that, we had -- spent a couple of days on the 9/11 Commission, and whether it was going to be an hour, whether it was going to do other things. We had the controversy over the ads, using 9/11 images. We had one of the people from the economic advisory board talking about, well, that outsourcing isn't such a bad thing.

It doesn't seem like, from the outside, that this is a gang that has shot straight for a long time. That is usually a pretty good political team that has really been off for the past couple of months. Do you disagree with that?

MEHLMAN: I think that ultimately the day-to-day politics is less important than the choice the American people have. The American people are going to have an important choice on November 2nd. And it's a choice between a president who believes we need to go forward with strength and resolve to take on the terrorists, versus a United States senator that, as we pointed out today, voted against supporting our troops while they were in combat, voted to cut intelligence, voted against key defense programs.

It's a choice on the economy. You mentioned the manufacturing issue. We believe we have a 6-point plan to create more manufacturing jobs.

John Kerry will raise taxes in the first 100 days by $900 billion. That is going to do nothing but destroy manufacturing jobs.

CROWLEY: Since we don't have John Kerry here, I'll tell you that he says, I'm not raising taxes. I'm going to roll back taxes for the upper income. I know you all define it differently. I just thought I'd throw that in.

MEHLMAN: Well, I would just say that, in fact, if you look at the numbers, his numbers do not add up. This is a senator who has voted 350 times to raise taxes during the course of his career. And when Washington politicians say they're going to soak the rich, the middle class better grab their umbrellas because there's going to be a tax increase if he's elected president.

CROWLEY: Would you agree with the premise that the Bush-Cheney campaign has had a rough couple of months?

MEHLMAN: I think that the campaign has been focused on registering voters, focused on raising and saving resources, and focused on sharing a message. And I think we feel good about where we are.

There's a new New York Times poll out today showing that the president's support is increasing. I think the more that the American people focus on this choice, with the differences being so clear, I think we're in a good position. But we've always said this will be a marathon, and we're prepared for a tough battle.

CROWLEY: So let me ask you, because we also had a poll, and The New York Times had you up, and it was different from their previous poll that had Kerry up. So that's movement in the right direction for you all.

MEHLMAN: Right.

CROWLEY: Inside a poll that we had earlier, we saw that when you asked the right-track, wrong-track question, where the satisfaction level has dropped the most tends to be in the Midwest among Independents, which seems to me to be very bad news for this campaign that needs to court the Midwest because that's where the battle will be won, and Independents. What's wrong there?

MEHLMAN: Well, I'm not certain. I didn't see the specific poll. But I'll tell you this, I think when Independents in the Midwest and all over the country look at the clear choice they have, between the president's strong and steady leadership and between Senator John Kerry, who will raise taxes $900 billion in his first 100 days, who voted against supporting our troops when they were in combat, who has consistently voted to cut defense and intelligence programs, I think there's a clear choice. And I'm confident what the outcome will be when people are focused on that choice.

(END VIDEOTAPE)

CROWLEY: Straight ahead, sex, drugs and messy divorce cases. It's not a soap opera; it's the Illinois Senate primaries. Our Bill Schneider has the dirty details.

Also, Howard Dean puts his Internet address book to work for an early supporter of his presidential bid. (COMMERCIAL BREAK)

CROWLEY: Today's Illinois Senate primaries will bring an end to one of the most chaotic campaign seasons that state has seen in years. Our Bill Schneider has more on how the two-party races turned down and dirty and stayed there.

(BEGIN VIDEOTAPE)

PAUL GREEN, ROOSEVELT UNIVERSITY: Well, put it like this: Jerry Springer could be very much at home covering this election because it's turned into a reality TV show.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Seven Democrats and eight Republicans are running to succeed retiring Illinois Republican Senator Peter Fitzgerald. Democrat Blair Hull spent more than $25 million of his own money and became the early front-runner. Then the messy details about his 1998 divorce came out, allegations from his ex-wife of spousal abuse. Plus, Hull acknowledged having used marijuana and cocaine in the 1980s.

BLAIR HULL (R), ILLINOIS SENATE CANDIDATE: I believe that the voters of Illinois will see through this.

SCHNEIDER: Apparently not. Hull has dropped like a stone in the polls. The new Democratic front-runner is a candidate with an exotic name.

BARACK OBAMA (D), ILLINOIS SENATE CANDIDATE: When your name is Barack Obama, you don't get any free votes.

SCHNEIDER: Obama? Could be Irish. But, oops, Obama, too, has acknowledged using marijuana and cocaine as a teenager.

OBAMA: I don't think any of us would suggest that somebody 25 years later is the same person they were when they were 16. I'll leave it at that.

SCHNEIDER: But will Illinois voters?

UNIDENTIFIED FEMALE: We're getting hundreds of phone calls to our office saying, "We're voting to you because you're the only one not using drugs."

SCHNEIDER: Meanwhile, over on the Republican side, front-runner Jack Ryan is the target of nasty insinuations. Seems he, too, was divorced in 1989 from TV actress Jerry Ryan of "Star Trek." But those divorce records are sealed. Ryan's opponents are warning that the divorce could become an issue in the general election.

JACK RYAN (R), ILLINOIS SENATE CANDIDATE: I'm not going to respond to random accusations like that.

SCHNEIDER: Ryan actually has an interesting story.

UNIDENTIFIED MALE: Spent 15 successful years in investment banking, and then Jack Ryan quit to go back to high school and teach in Chicago's inner city.

SCHNEIDER: So does Obama.

OBAMA: They said an African-American had never led the "Harvard Law Review," until I changed that.

SCHNEIDER: But you would never know their interesting stories from the campaign.

UNIDENTIFIED MALE: We have spent a year and a half talking about substantive issues. And it was only at the point where the voters were actually paying attention that we ended up talking about divorces and drugs.

SCHNEIDER: Has this campaign hit rock bottom?

GREEN: In Illinois, if this was a boxing match, we would have our trunks around our ankles. There are no low blows.

(END VIDEOTAPE)

SCHNEIDER: The Illinois race is a high-stakes contest for an open Senate seat. But remember, Illinois has never had a lot of interest in who goes to Washington. The late Mayor Richard J. Daley once said, "We send people to the Senate either for training or for punishment."

CROWLEY: All that fun in Illinois and we were on the presidential campaign trail. Who knew.

SCHNEIDER: I know. Who knew, right.

CROWLEY: Illinois Congressman Jesse Jackson Jr. endorsed Howard Dean for president back in December. Now Howard Dean is returning the favor.

Dean has written an e-mail to his vast network of online subscribers asking them to contribute to Congressman Jackson's reelection campaign. In Dean's words, "When we were up and when we were down, he stood with us and worked hard every step of the way."

We heard from the Bush-Cheney team earlier. Coming up, I'll talk with John Kerry's chairwoman, Jeanne Shaheen.

We'll also take you to Capitol Hill, where the higher than expected price of Medicare reform has some conservatives suffering from sticker shock.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Defining John Kerry. How does his campaign meet the challenge and beat the Bush camp to the punch? We'll ask a top player in the Kerry camp.

Give me a break. What do vacation spots say about presidents and the candidates who want their job?

A big chill in the Big Apple. Does it extend from the mayor's office all of the way to the White House?

(END VIDEOTAPE)

ANNOUNCER: Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

CROWLEY: Welcome back. I'm Candy Crowley sitting in for Judy today.

After nearly two decades in the United States Senate, John Kerry is hardly a blank canvas. But polls suggest many Americans do not have a clear picture of the Democratic presidential contender. The Bush camp is scrambling to fill the void before Kerry can.

The latest example, the new Bush ad airing in West Virginia, blasting Kerry for voting against $87 billion in funding for U.S. troop in Iraq and Afghanistan.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Body armor for troops in combat...

UNIDENTIFIED MALE: Mr. Kerry...

UNIDENTIFIED FEMALE: No. Higher combat pay...

UNIDENTIFIED MALE: Mr. Kerry...

UNIDENTIFIED FEMALE: No. And better healthcare for reservists and their families?

UNIDENTIFIED MALE: Mr. Kerry...

UNIDENTIFIED FEMALE: No. Wrong on defense.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

KERRY: I understand that the Republican attack machine has welcomed me to West Virginia today with another distortion and misleading statement.

(END VIDEO CLIP)

CROWLEY: Kerry told veteran in West Virginia today that he voted against the $87 billion because Republicans refused to pay for it by reducing tax cuts for wealthier Americans.

Even with the Kerry camp's quick response team working overtime, will the Bush campaign's portrayal of the senator stick? We want to talk more about Kerry versus Bush with Kerry campaign chairwoman and former New Hampshire governor, Jeanne Shaheen. Governor, thank you so much for being here.

JEANNENE SHAHEEN, KERRY CAMPAIGN CHAIRWOMAN: It's great to be with you.

CROWLEY: I wanted to first talk to you about a couple figures that came out today in the New York Times poll, where 57 percent of those polled said they believe that John Kerry says what he believes they want him to say. That he is, in other words, a political opportunist. Only 33 percent disagree with that.

How do you fire back?

SHAHEEN: Well, it's a long time from now until November. And unfortunately, the approach that this administration has taken is that if they throw enough mud at John Kerry, that some of it's going to stick.

The fact is, their ads are inaccurate. The facts are just wrong. And it's particularly ironic that this ad talks about money for body armor when right now we are seeing military families whose have to buy body armor online because it's not being provided by this administration for those who are in Iraq. And that's just wrong.

CROWLEY: But, Governor, if I could, the Bush team argument is, look, he voted against this $87 billion which had money in there specifically for body armor. And now he's complaining that they don't have any body armor.

(CROSSTALK)

SHAHEEN: But they got their $87 billion. What John Kerry wanted was to make sure that the administration was honest about where the money was going to come from.

And in fact, they're still not being honest about that. They put a budget forward that did not include the cost of fighting the war in Iraq. John Kerry thinks the American people ought to be told what we're getting into, and we're seeing, again, that this administration is misleading the American people.

CROWLEY: Governor, let me turn you just to a slightly different subject. I know that in New Hampshire you talk about oncoming snowstorms, but in Washington we talk about the veep-stakes and who's up and who's in and who's out.

I have to tell you that I'm struck when I listen to the Washington rumor mill. You hear Edwards, Graham, Nelson. And I don't hear female names, I don't hear much from minority names. Throw me out a couple of female names, minorities that John Kerry should be considering for a vice president.

SHAHEEN: You know, I think there are a lot of people on that list. And the fact is, the rumor mill is exactly that, it's a rumor mill. This process has been turned over to Jim Johnson, to some people who he's going to bring into that process. And it's going to be taken out of the political campaign context. And a very careful and thorough bedding is going to take place.

And that's the way it should be. And I know that women and minority names will be considered in the process, just like everybody else.

CROWLEY: Well, taking aside who they're considering or what names they have, what are the Democratic female names or minority names out there that could step into the presidential position, which is what John Kerry says is his primary criteria?

SHAHEEN: Well, again, I'm not going to speculate on any names. There are a number of very distinguished women senators. We have more women governors today than we ever have in our history. There are a number of minority -- potential minority candidates, past secretaries in the Clinton administration.

So, you know, I think, again, there is a process in place to deal with the vice presidential selection. That needs to go forward.

And we're trying to focus at the campaign on what is a concern to the American people on how we get this economy going again, how we provide health care for people. What we do to reduce the deficit and to restore America's place in the international community. That's what we need leadership on.

CROWLEY: Governor, as you know we can't help ourselves, so I want to throw a name out there for you. But first say that you have been the only female governor in New Hampshire, you're one of only three Democratic governors who even won office in New Hampshire since the turn of the last century. You were instrumental in the Carter primary, you were instrumental in the Hart primary and we all know that you're very instrumental in the Kerry campaign.

Where does that put you? Would you accept a nod towards the vice presidential position?

SHAHEEN: Well I appreciate all that speculation. That's great. But the fact is I don't think having two people from the Northeast on the ticket is something that I would advocate.

(CROSSTALK)

SHAHEEN: ... in doing everything I can to help John Kerry in every way I can.

CROWLEY: But not no, right?

SHAHEEN: Oh, you know, again, I'm not going to speculate. I think we've got a process in place to deal with this. And that's what I'm interested in letting follow through.

CROWLEY: Jeanne Shaheen with the Kerry campaign, chairwoman. We appreciate it very much. Come back and give us some names next times.

SHAHEEN: Not a chance!

CROWLEY: I figured.

Some political observers are note that John Kerry has been conspicuously quiet about the recent terror attack in Spain and the vote to oust the government there. Many Democrats reportedly agree that the situation in Spain is so uncertain that politicizing it could backfire.

Meantime, President Bush was asked today if he thinks terrorists have reason to believe they can influence elections and policy given what happened in Spain.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Terrorists will kill innocent life in order to try to get the world to cower. I think -- these are cold blooded killers. They are kill innocent people to try to shake our will. That's what they want to do. And they'll never shake the will of the United States. We understand the stakes. And we will work with our friends to bring justice to the terrorists.

(END VIDEO CLIP)

CROWLEY: The president spoke to reporters during a White House meeting with the prime minister of the Netherlands.

On the domestic front, President Bush is getting flack today from conservative Republicans as well as Democrats. At issue, the price tag of the new Medicare law and whether the Bush administration mislead Congress about the true cost. We want to check in with congressional correspondent Joe Johns.

So did the administration mislead Congress about how much this is going to cost?

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Candy, as you know, the allegation the administration withheld cost estimates from the Congress on the prescription drug plan has really been around a long time, even before the president signed the bill into law late last year.

But now a Medicare Act actuary has come forth indicating that he was essentially threatened with firing if he disclosed estimates that were vastly higher than those put out by the Congressional Budget Office.

What is also different today, it's just not Democrats complaining about this anymore, Congressman Jack Kingston, a conservative Republican in the leadership, is also speaking out.

(BEGIN VIDEO CLIP)

REP. JACK KINGSTON (R), GEORGIA: I think there is an annoyance factor here, that, doggone it if there was a difference in numbers and we knew about it up front, we should have had the opportunity to explore what that difference was.

(END VIDEO CLIP)

JOHNS: In the middle of all of this, Tom Scully who was the former head of the Centers for Medicare and Medicaid Services. He has been accused essentially of threatening to fire that actuary. His name is Rick Foster who still, in fact, working at CMS. Of course, Tom Scully talked to CNN and he denies threatening to fire anyone.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Rick was never told by anybody don't (UNINTELLIGIBLE), period. I never once had that conversation, I never once threatened to fire him, I never once had the conversation with him that said don't release the overall score of the bill because it didn't exist. CBO was doing the scoring.

(END VIDEO CLIP)

JOHNS: So Congressional Democrats say they are considering inserting language into some upcoming bills to try to rectify this problem. But as you can expect, Candy, this is likely to go on through the election year.

CROWLEY: As things have a way of doing. Thanks so much, Joe Johns on Capitol Hill.

More intraparty squabbles ahead on INSIDE POLITICS. Up next, the congressman running to unseat fellow Pennsylvania Republican Senator Arlen Spector. What's driving his campaign?

Plus, is New York's mayor willing to stick his neck out for President Bush? Find out.

And President Bush has his Texas ranch, but where does John Kerry plan to spend some eagerly awaited time off?

(COMMERCIAL BREAK)

CROWLEY: Pennsylvania Congressman Pat Toomey is hoping to win a U.S. Senate seat by breaking the 11th commandment, that's the one that says though shall not speak ill of a fellow Republican. Not only is Toomey criticizing Republican Senator Arlen Specter as being too liberal, Toomey is challenging him in the upcoming primary. The congressman joins us from Philadelphia.

Let me see if I can get this into a broader picture for our listeners, Congressman, and ask you, is there a split in the Republican party between conservatives and the more moderate and liberal Republicans?

REP. PAT TOOMEY (R-PA), SENATE CANDIDATE: Well, I'm not sure there's so much as a split, Candy. But in this case what we've got is myself, I'm a mainstream Republican. As I say, I represent the Republican wing of the Republican party. Arlen Specter is way outside of that mainstream. It's not just one or two issues but really across the board. Arlen Specter is a liberal whether we're talking about economic, business, social, cultural, legal issues. Across the board he comes down on the side with the Democrats and the left part of the American political spectrum and that doesn't make him a bad person but it does make him out of step with the vast majority of Republicans in Pennsylvania.

CROWLEY: Well, with Republicans, and you're right, but Pennsylvania is a state that last time went for George Bush -- sorry, went for Al Gore.

TOOMEY: Right.

CROWLEY: And I'm wondering why you think a congressman more to the right of center in the Republican party would be better suited and more voted for in a more liberal state than Arlen Specter.

TOOMEY: Al Gore carried my congressional district as well, so did Bill Clinton, twice, and yet I was elected three times and by a pretty sizable margin, especially in the last race. Senator Rick Santorun (ph) is another mainstream Republican who has been elected statewide in Pennsylvania. I think the common sense conservative values of limited government and less spending and lower taxes and traditional values and legal reforms, these ideas have a lot of appeal across party lines. And that's why I think someone like Rick Santorun (ph) can get elected to the Senate from Pennsylvania and that's why I think Pat Toomey is going to get elected.

CROWLEY: Thank you very bringing up Rick Santorun because he's endorsed Arlen Specter even though he's known as a very conservative Republican senator so why is that?

TOOMEY: Rick Santorun is the elected chairman of the Republican Caucus of the United States Senate. As a chairman of the Caucus he has an obligation to support every one of his constituent senators and he does. I understand that. That's standard operating procedure from someone who's in the elected leadership of the caucus. But the Pennsylvania Republican primary voters don't have any such obligation. They're going to make up their own mind and I think they're recognize that I represent the ideas and principles at the heart of the Republican party much much better than Arlen Specter does.

CROWLEY: Give me a couple of issues where you think a Senator Pat Toomey would differ from a Senator Arlen Specter.

TOOMEY: Well, there are many. For instance, Senator Specter has frequently voted for major tax increases and frequently voted against cutting taxes, including voting with the Democrats repeatedly to shrink the size of the Bush tax cuts. Meanwhile, I still believe we're overtaxed. I think the problem with our deficits is that we spend too much. Not that we're undertaxed. I want to get wasteful spending under control. Arlen Specter is a big advocate for increased spending.

And then I want to go on with further tax relief, make the Bush tax cuts permanent and go on with further tax relief. We have a very fundamentally different view there. On legal reform, Senator Specter has always been very closely allied with the trial lawyers and opposed tort reform. Pennsylvania desperately needs medical practice reform in particular. And I'm a big advocate of that reform. Senator Specter is an opponent of that. Those are just two examples. There are many others. We really are different.

CROWLEY: Let me ask you, because we don't have a lot of time left. When you decided and when you were thinking about should I run for this against a fellow Republican, did you think here's a guy that's been elected and re-elected several times, I may be giving this seat over to the Democrats?

TOOMEY: I really think I'm a stronger general election candidate than Senator Specter and the reason I say that is, if you look back to 1992 the last time he faced a credible Democrat opponent, he was held to 49 percent of the vote and that's because Senator Specter so alienates so many Republicans that he relies on Democrats in a coalition that can fall apart if there's a strong Democrat in the race. I approach this as a principle conservative appealing to virtually all Republicans and many common sense conservative Democrats and dependents. I'm convinced I'm going to win in the fall as well.

CROWLEY: Congressman Pat Toomey, speaking to us from Philadelphia. Thank you very much.

TOOMEY: Thanks for having me, candy.

CROWLEY: At least one female U.S. senator with roots in Arkansas may be on John Kerry's short list for vice president. No, she isn't one you're probably thinking of. Coming up, prospects for a Kerry- Lincoln ticket.

(COMMERCIAL BREAK)

CROWLEY: The Republicans intend to be in harmony when they gather in New York City this summer, but Chuck Todd is hearing at least the potential for some sour notes. He's the editor-in-chief of "The Hotline" an insider's political briefing produced daily by the "National Journal." I can't imagine, Republicans in New York and sour notes?

CHUCK TODD, EDITOR-IN-CHIEF-, "THE HOTLINE": It all happened during the whole controversy that erupted for President Bush's first ads, with the 9/11 footage. One of the little trump cards that the Bush campaign was hoping to play was to see if they could get Mayor Bloomberg of New York to get the New York City local firefighter union to come out and support Bush. The whole thing never happened.

It appears to be as much about Bloomberg not wanting to put himself on the political line. His ratings are not doing very well there. But it didn't happen. It was a nice little thing. The Firefighters International Unit is a huge Kerry supporter. It would have been a nice little shot that the Bush campaign would have taken. But it makes you wonder if this is going to be the start of what could be the start of an unharmonious time when the Republicans come to New York for the convention, which a lot, I'm hearing a lot of Republicans having second thoughts about that.

CROWLEY: New York City is hardly the place you think that the Republican...

TODD: A vast unit of the Republican party.

CROWLEY: You understand why they did it but nonetheless, yes.

TODD: I think they're nervous about that.

CROWLEY: It's not their political zone.

TODD: That's for sure.

CROWLEY: Let's talk about the beef steaks, since I couldn't get anything out of Jeanne Shaheen, what can I get out of you?

TODD: What's interesting is what you brought up with Governor Shaheen is the lack of women on the short list. Here we are, we're coming up on the 20th anniversary of the Geraldine Ferrarro (ph) pick and yet it isn't on the top five list, any woman. That said, when you hear about all these Democratic women in the Senate. The dark horse name I'm hearing is Blanch Lincoln (ph), the senior senator from Arkansas. Arkansas is a swing state.

But what I'm hearing about her is not just because she's from a swing state. Mary Lander (ph) is from a swing state. But it's her political instincts. It's her sort of grasp of things that if you took -- in fact if you took a survey of the Senate caucus and said what woman is most likely to be president or vice president some day and do it well, more people might pick Lincoln over that other woman who used to reside in Arkansas, Hillary Clinton. So she's somebody Democrats have a lot of respect for and could get higher up play on this list.

CROWLEY: So the only thing that we've heard from John Kerry about what he wants really is that I want someone that can step in and be president should they have to. Does she fit that bill, do you think?

TODD: You know, a lot of people would wonder if she doesn't, if she does, because, you know, she was a congressional staffer, then a member of Congress and immediately a U.S. senator. Who knows. But it certainly as good of credentials as John Edwards. She's been in office a lot longer than John Edwards.

CROWLEY: All right so her name out there is a good thing, you think.

TODD: Absolutely.

CROWLEY: So Lindsey Graham doesn't run for office for a while but I know you had some...

TODD: It's interesting. He's not up for 2008 yet. South Carolina Republican donors are getting fund raising letters this month from him asking for money for 2008 campaign meanwhile there's a whole bunch of Republicans in South Carolina running for a Senate seat that's up in 2004. This is the Fritz Hollings open seat. A lot of Republican grumbling about this, why is Lindsey Graham sort of taking money away from what could be money that belongs with Republicans running in 2004. We'll see. You know, Republicans don't beat up their own the way, for instance, Democrats were beating Chuck Schumer for doing the same thing in New York.

CROWLEY: Except for in Pennsylvania.

TODD: That's true.

CROWLEY: Chuck Todd, editor-in-chief of the "Hotline." We read it every day.

TODD: Great. Thanks.

The "Hotline" is an insider's political briefing produced daily by the National Journal." Go online to Nationaljournal.com for subscription information.

John Kerry has a nomination sewn up. Now he plans to take time off. Up next, presidential vacations. We'll tell you where Kerry is headed and take a look at how American presidents have spent their time off.

(COMMERCIAL BREAK)

CROWLEY: With his party's nomination wrapped up, John Kerry plans to take a vacation later this week. After several days of deliberation, he and Teresa Kerry decided on a week in Kechemme (ph), Idaho where they own a home. It was a bigger decision than you might think, after all, if Kerry makes it to the White House, even his vacation spots will be analyzed for larger meaning. Here's CNN's Bruce Morton.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT: George W. Bush goes home to his ranch. "It gives me a lot of balance," he told the Associated Press during his first year of president, "it does help give you perspective." Most of them go somewhere. Theodore Roosevelt vacationed in Yellowstone once announcing that he wanted to be alone. A reporter followed on horseback with his dog. The reporter arrested, horse confiscated, dog shot.

Franklin Roosevelt, who had polio, loved swimming at Warren Springs (ph), Georgia. That is where he died. Harry Truman liked the submarine base at Key West, Florida. He would hang out with friends, play cards, tell stories. Dwight Eisenhower was a serious golfer. 222 days in Augusta where they played the Masters during his eight years in office.

John Kennedy mostly went to the family compounds, Cape Cod or Palm Beach and sailed or threw footballs or played with his kids.

LBJ went to the LBJ ranch, where else? Richard Nixon wasn't good at vacations. He went to his San Clementi (ph) or his friend Vivi Ribosa (ph) house in Key Viscane (ph), Florida but somehow he always looked as if he were thinking about Laos or (UNINTELLIGIBLE) or something.

Gerald Ford, a gifted athlete, loved skiing so much he bought a home in Veil (ph), Colorado. Jimmy Carter liked being alone in Georgia. Ronald Reagan went always to his ranch. Spent almost a year there during his eight years as president.

The first President Bush went to the family's place and as he put it, recreated. Speed golf, time in a cigarette (ph) boat. Bill and Hillary Clinton went often to Martha's Vineyard. He golfed, too. When she was thinking of running from the Senate, they also spent some time at Finger Lakes, New York.

You may want to avoid the black hills of South Dakota. Calvin Coolidge had a public fight with his wife there and George McGovern (ph), the Democratic nominee in 1972 learned there that his running mate had undergone electric shock therapy. McGovern replaced him ending any faint hope he might have had of beating Richard Nixon that year.

But Idaho is candidate friendly as far as we know. Enjoy, Senator. Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

CROWLEY: That's it for INSIDE POLITICS though we hope you will join us tomorrow. Same time, same place. I'm Candy Crowley. "CROSSFIRE" starts right now.

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



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