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JUDY WOODRUFF'S INSIDE POLITICS

Kerry Defining his Economic Agenda; The Ad Wars: Who's Spending What?

Aired March 26, 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: A new lesson in Kerry-nomics. The Democrat outlines a job creation plan and blasts Bush in the process.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: This president doesn't have a record to run on but a record to run from. And that's what he's doing.

ANNOUNCER: There's no place like home.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: People understand what it means to say, "This is my House."

ANNOUNCER: The president touts the housing market and courts Latino voters in the process.

The body language of unity: we'll read between the lines and the photo-ops of the Democrats' big get-together.

(END VIDEOTAPE)

ANNOUNCER: Live from the Washington, JUDY WOODRUFF'S INSIDE POLITICS.

JUDY WOODRUFF, HOST: Thank you for joining us.

After weeks of hearing Republicans portray him as a taxer and spender, John Kerry is trying today to define himself as a jobs maker. The Democratic presidential nominee-in-waiting outlined his economic agenda today in Michigan.

CNN's Kelly Wallace joins me now here in Washington with more on Kerry's speech and his strategy -- Kelly.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Well, Judy, a big part of the strategy, you've seen some of the polls showing a majority of voters saying they still don't really know much about John Kerry. So he's trying to portray himself as a moderate, pro-business Democrat, taking steps on an issue that's getting a lot of attention right now: the outsourcing of jobs overseas.

And also part of that strategy is taking that message to battleground states like today in Michigan, a state that has been hit hard by job losses with about a 6.6 percent unemployment rate. Part or the crux, really, of Kerry's plan is removing incentives that would encourage American companies to send jobs overseas. And one way he does that, proposing something supported by Republicans: cutting corporate taxes.

(BEGIN VIDEO CLIP)

KERRY: Some may be surprised to hear a Democrat calling for lower corporate tax rates. The fact is, I don't care about the old debates. I care about getting the job done and creating jobs here in the United States of America.

(END VIDEO CLIP)

WALLACE: And Senator Kerry is setting an ambitious goal: 10 million jobs in four years, closing the outsourcing loopholes. Mainly eliminating the tax break that companies face if they defer tax -- defer income earned overseas before bringing it back to the United States. He's going to cut the corporate tax rate by 5 percent, and then give tax breaks to companies that hire no workers.

Well, the Bush-Cheney team is commenting, saying this is a "political gimmick," and that nobody should mistake it for a real economic policy. Also, Judy, Bush-Cheney aides said this would do nothing really to prevent the outsourcing of jobs overseas.

WOODRUFF: All right, Kelly. And now I want to ask you about something completely different. And that is, today, the Senate majority leader, Bill First raising questions about whether Richard Clarke, who's been in the news all this week, the former Bush administration counterterrorism adviser, whether he lied to the Congress. First is essentially saying that the intelligence committee wants to declassify testimony from Clarke that he made back in 2002 in which they say Clarke made essentially good comments about the Bush administration's terrorism policy, and they want to compare that to what Clarke said before the 9/11 Commission this week.

So my question to you is, now I understand John Kerry has had a comment about all this. What's he saying?

WALLACE: He has. And he has been remarkably silent about this whole thing. But in an interview that he did in Detroit today, he talked about it. He said Clarke's testimony raises serious questions. He still wants to look at the testimony, read it, read the book.

But here's what he said regarding Senator Frist. He said, "My challenge to the Bush administration would be, if he's not believable and they have reason to show it, then prosecute him for perjury, because he is under oath. They have a perfect right to do that."

But at the same time, Judy, he is saying that he believes Clarke's testimony raises serious questions. One reason we were asking aides why the senator hadn't really said much about this up until now, they say he was on vacation. But they also believe that the White House is in a tough situation, and they can leave it to the White House to handle that.

WOODRUFF: And I guess we'll have to watch the Senate or the Congress now to see whether they are going to declassify this former -- this testimony that Clarke made back in 2002. I guess the White House will have something to say about that as well.

WALLACE: I'm sure.

WOODRUFF: OK. Kelly, thank you very much.

WALLACE: Sure.

WOODRUFF: Well, now we turn to President Bush's economic message of the day, and what he hopes apparently to get out of it. Our White House correspondent Dana Bash traveling with the president in the Southwest.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Bush aides are fond of saying most Americans get their information from local news coverage. So today's two stops, first here in New Mexico, later in Arizona, are a chance for President Bush to escape the controversy that his former aide stirred up back in Washington, come to two very important states this election year in the hopes of getting some good, local news coverage.

Now, Democrats are making job loss on the president's watch a top issue this election year. But here in New Mexico and in Arizona, job loss has not been as devastating, as in most states. So the president is going to say what he says many times as he travels the country, that the economy is doing much better than people realize, and he will give an example in both of these stops by talking about the rise in homeownership.

BUSH: The home sales were the highest ever recently. That's exciting news for the country when you think about it. It's good for the builders. But more importantly, it's good for the owners.

We want people owning something in America. That's what we want. The great dream about America is "I can own my own home," people say.

BASH: Few states are likely to see a tighter contest on November 2nd than here in New Mexico. It was the closest vote in 2000, even closer than in Florida. Al Gore won by just 366 votes. And polls today show Senator Kerry and President Bush in a virtual dead heat.

That is why President Bush is here for the seventh time since he's been in office, and it's also why his campaign is spending some resources here in TV ads both in English and in Spanish. Forty percent of New Mexico's voters are Hispanic, and it's a constituency that President Bush has been openly courting. But political observers here say a key challenge for the president is, when he reaches out to Hispanics, is the fact that this state has a very popular Democratic governor who is Hispanic, and his name, of course, is Bill Richardson.

Now, these two Southwest stops in state-of-play states are not billed as campaign appearances, but rather as official White House events. So they will be paid for by the taxpayers. Dana Bash, CNN, Albuquerque, New Mexico.

(END VIDEOTAPE)

WOODRUFF: Quickly now to some breaking news coming to us from Raleigh-Durham Airport in North Carolina, the triangle area. These are live pictures coming in of a military fighter jet that has crashed there in the vicinity of the Raleigh-Durham Airport.

We are told, CNN has learned it crashed while taking off from Raleigh-Durham International this afternoon. The airport spokeswoman said one person, the pilot, was on board. And it is not immediately clear, it's not known, whether the pilot was able to eject successfully.

You can see the flames still coming out of that F-18 fighter jet. Again, crashing just a short time ago as it attempted to take off from Raleigh-Durham International Airport in North Carolina. We'll get more information to you just as soon as we have it.

Turning back now to President Bush and the developments in the campaign, the president's ears may have been burning last night as Democrats took part in their unity dinner here in Washington. The big name show of support for John Kerry pulled in a record $11 million. But for political people watchers, the evening was priceless.

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): The party out of power closes ranks with a common goal and a shared pledge.

JAMES CARTER, FMR. PRESIDENT OF THE UNITED STATES: The most remarkable unity...

AL GORE, FMR. PRESIDENT OF THE UNITED STATES: We all are unified.

UNIDENTIFIED MALE: The Democratic Party is united...

WOODRUFF: A galaxy of Democratic stars lit up Washington last night, with two ex-presidents shining brightest of all. Jimmy Carter, in a rare political turn, urged Ralph Nader to abandon his White House campaign.

CARTER: Go back to umpiring softball games or examining the rear end of automobiles, and don't risk costing the Democrats the White House this year, as you did four years ago.

WOODRUFF: Bill Clinton rallied the crowd...

WILLIAM JEFFERSON CLINTON, FMR. PRESIDENT OF THE UNITED STATES: We already see what they do. They've got to turn John Kerry from a three-dimensional human being into a two-dimensional cartoon.

WOODRUFF: ... readying the room for the man of the hour. KERRY: We are going to fight back, and we are going to win in the right way that lifts our country up, instead of driving our politics down.

WOODRUFF: But being Democrats, the night wasn't without drama,, as men with long and occasionally rocky history shared a stage. Take the bring-down-the-House photo-op. Who's the man in the middle? Not the nominee, but his old rival, John Edwards, who may still be auditioning for a spot on this year's ticket.

(END VIDEOTAPE)

WOODRUFF: Last night's Democratic Party unity dinner, they called it, here in Washington.

Well, checking our Friday "Campaign News Daily," newly-released polls suggest the presidential race is indeed a squeaker in two battleground states. The survey of likely Wisconsin voters shows John Kerry leading George Bush 46 percent to 43 percent. Independent Ralph Nader gets 4 percent. Without Nader, Kerry's lead is just a point wider.

In Ohio, a poll of registered voters shows Kerry with 46 percent to 44 percent for Bush. Nader gets 5 percent. And note this survey was taken over a 12-day period ending on Monday, before big campaign ad buys in Ohio that could influence the race.

Speaking of Ohio, Vice President Cheney is there today, mixing official business and fund-raising. In Dayton, Cheney thanked workers at Wright-Patterson Air Force Base for playing a key role in the war on terror. Then he headed to a $1,000-a-plate luncheon for the Bush campaign.

Ralph Nader is kicking off a weekend of campaigning in the South. The independent candidate holds rallies at universities in North and South Carolina today, and in Georgia on Saturday and Sunday. Meantime, a new Annenberg Election Survey shows Americans have unfavorable views of Ralph Nader. And those have shot up 13 points since he ran for president in the year 2000.

Well, John Kerry has a secret weapon in the presidential ad war. Up next, new spending tallies and how Kerry has managed to beef up his bottom line.

Plus, Bob Novak goes all over the electoral map to give us his latest snapshot of the race for the White House.

And later, March madness. Not the basketball variety, but the kind of hoopla that leads to the "Political Play of the Week."

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Two difficult stories to report. One from Iraq. A U.S. Marine is now confirmed dead in fighting near the town of Fallujah. It's about 50 miles west of Baghdad, part of that treacherous area known as the Sunni Triangle.

This is, again, one Marine reported killed. Several wounded in fighting ongoing for several hours in this town. We're also told at least six civilians were killed in the fighting.

Separately, back here in the United States just a short time ago, a military fighter jet, an F-18, crashed on takeoff from Raleigh- Durham International Airport in North Carolina. A spokeswoman for the airport telling CNN there was one person on board, the pilot, and at this moment it is still not known whether the pilot was able to eject successfully. Again, these are live pictures coming in from the Raleigh-Durham International Airport.

We'll be right back.

(COMMERCIAL BREAK)

WOODRUFF: The Bush reelection campaign is funding a steady barrage of advertising in battleground states. John Kerry and the Democrats are fighting back with some help from their friends, you might say.

Evan Tracey keeps track of all the ad spending. He's a familiar face here on INSIDE POLITICS. He's the chief operating officer for TNSMI Campaign Media Analysis Group.

Evan, all right, let's talk, first of all, big picture. The Bush campaign, the Kerry campaign, what do you see in terms of ad spending?

EVAN TRACEY, TNSMI CAMPAIGN MEDIA ANALYSIS GROUP: Well, if you stack the Bush campaign next to the Kerry campaign, there's almost no comparison. Bush has spent about $15 million so far. His daily spending is getting close to $1 million a day. He's got lots of different ad messages out there.

Kerry, by contrast, has only spent a couple of million dollars. His daily spending is about $350,000 right now. And he's only got a couple of spots out there really. And you stack them next to each other, there's just no comparison.

WOODRUFF: But when you -- as you and I were just discussing, when you add in the expenditures by these so-called 527s, these independent groups that are out there not coordinating with the Kerry campaign but still anti-Bush, what do you find?

TRACEY: Right. When you roll out the 527 spending with groups like The Media Fund, MoveOn, New Democratic Network -- and there's a host of others -- that spending equals about $10 million in this same time period, really since the beginning of March. So it's kind of the great equalizer right now. They're able to take this spending, use the messages in the key 18 states that everybody's focusing on, and really get Kerry close to parity in a lot of these key markets.

WOODRUFF: Talk about some of the specific markets. You were just talking about Phoenix and Tampa, for example. What are you seeing in some of these specific important states? TRACEY: Right. We took a look at Phoenix and Tampa because they're very -- they're indicative of other markets around the state like this.

If you look at the Bush-Kerry spending side by side, again, it's no contest. Bush has about a three to one advantage in spots and dollars. But when you roll out these 527s, the Bush advantage actually turns into a bit of a disadvantage.

In the case of Phoenix, it's about -- you know, that Kerry goes from being about 300 spots behind to being about 100 spots ahead. In Tampa, it's the same thing, where Bush has about a four to one advantage there. But when you roll in these 527 groups, Bush is actually spending less and having less airings.

WOODRUFF: Evan, do you have a sense of whether this is just going to continue on through the season? Are all these interests continuing to raise money? Are we going to continue to see this?

TRACEY: Well, we've had about $30 million spent really since the beginning of March. It's a lot to expect that spending level is going to keep up month to month to month. But there's no reason to believe that it won't.

This seems to be the new world order under McCain--Feingold. You know, take the old play book and throw it out, because this election is going to be all about, you know, exploring new ways to be effective using things that aren't political parties and soft money dollars.

WOODRUFF: We're going to be writing a new play book on this one.

EVANS: There will be a new play book after this one, no doubt about it.

WOODRUFF: All right. Evan Tracey, keeping track of those ads. Thank you very much.

TRACEY: Thanks, Judy.

WOODRUFF: Good to see you. Thanks for dropping by.

TRACEY: Good to be here.

WOODRUFF: Well, still more than seven months to go in the race to the White House. We're counting. For one of the candidates, it's a good thing this isn't November. Our Robert Novak tells us which one when we come back.

(COMMERCIAL BREAK)

WOODRUFF: That breaking story we told you about just a moment ago, an F-18 fighter jet, military fighter jet crashing as it tried to take off from Raleigh-Durham International Airport in North Carolina. These are live pictures coming in right now from the Raleigh-Durham Airport. Airport personnel talking to reporters, and let's hear just quickly what they're saying. UNIDENTIFIED FEMALE: The pilot, we do know, ejected, but we do not have his or her condition at this time. The fire was contained, or has been contained. And that is all the information we have.

The air space for a very temporary amount of time was closed. However, the FAA is allowing and handling some aircraft departures and arrivals on a very limited basis. We do urge the public, if there is any reason to come out to the airport for -- to note that there is traffic that's being rerouted. If there is no reason that you need to come to the airport, please do not do so.

QUESTION: You don't know what caused the crash?

UNIDENTIFIED FEMALE: No, we do not have any information on cause.

QUESTION: What was the F-18 team doing here?

UNIDENTIFIED FEMALE: I do not know at this time.

QUESTION: Where were they going to?

UNIDENTIFIED FEMALE: I don't have any information on his departure.

QUESTION: It was departing, right?

UNIDENTIFIED FEMALE: It was departing.

QUESTION: Ma'am, the people in Terminal A, what are they having to do right now?

UNIDENTIFIED FEMALE: It's not affecting the inside terminal operations.

QUESTION: But all flights are canceled, correct?

(CROSSTALK)

QUESTION: What will they see and what will they be told to do?

UNIDENTIFIED FEMALE: They're being rerouted. You can expect delays.

WOODRUFF: We're hearing from airport spokeswoman Theresa Damiano (ph) about the crash of an F-18 military fighter jet, crashing just apparently within the hour as it was attempting to take off from Raleigh-Durham International Airport. You did hear her say the pilot ejected. But at this point, they do not know the pilot's condition. We'll be following that story and bring you more as soon as we get it.

Back to INSIDE POLITICS now, where a couple of key states appear to be tipping the scales at this point in the 2004 presidential race. Joining me now, "CROSSFIRE" co-host Robert Novak, who has been crunching the numbers.

Let's talk to you about that and more. What are you finding right now?

ROBERT NOVAK, CNN "CROSSFIRE": Our running poll in the Evans- Novak political report now shows that if the election were held today, Kerry would win big over Bush, 306 electoral votes to 232. And that's because since the last time we looked at it, we see two states that, if the election were held today, Florida and Ohio would go to Kerry, that we previously had for Bush.

Now, remember, this is a snapshot, not a prediction. And it's very close in Ohio. But it's also true, Judy, that if President Bush does not win both those states, Florida and Ohio, it's hard to see how he can be reelected.

WOODRUFF: Given all the other states staying as is?

NOVAK: Yes.

WOODRUFF: All right. Richard Clarke, the former anti-terrorism adviser who testified this week, what are you hearing?

NOVAK: He said he was a registered Republican. And so I was curious to find out how good a Republican he was. There's only two people he's made contributions to in the last two election cycles, they're both Democrats. Running for Congress, one in the last election in Minnesota, and one in this election in Missouri. They're both former colleagues from the Clinton National Security Council staff.

WOODRUFF: So former co-workers of his?

NOVAK: Yes.

WOODRUFF: All right. The politics of the gas pump, the rising price of gas, what are you hearing?

NOVAK: It's a sleeper issue. Republicans are really worried about it because it's something people really look at every day. And when you have the average price of regular unleaded going up to $1.74, moving toward the higher grades that $2 level, they have to worry about it.

So as a counterattack, the Republicans are saying hey, John Kerry voted time and time again. And this is the truth, he can't deny it. For higher gas tax, against reducing gas tax. But the politics of the gas tax is going to -- of the gas price is going to be important.

WOODRUFF: Last but not least, fund-raising. Now, you know about yet another fund-raiser. And this one's going on this weekend, next week?

NOVAK: April 1st and 2nd. And this is for people who have already raised money. This is rewards.

Rangers for the Bush-Cheney campaign, they have raised at least $200,000. And for pioneers who have raised at least $100,000, and for mavericks who raised at least $50,000. But they have to be under 40 years of age. A big outing at the Ritz-Carlton Lodge Reynolds Plantation that's about a half-hour driver's from the Atlanta Airport.

And, Judy, that is one of the ritziest places in America. And the deal is, you go to the Reynolds Plantation, which is co-owned by Mercer Reynolds, who was the head of the Bush finance campaign, and you go there and you play golf all day on April 1st. Then you have a dinner with Dick Cheney that night. Then you play golf all day on April 2nd, have a dinner with George W. Bush that night.

If you've raised all that money, this is your reward. And one of the fanciest places in America.

WOODRUFF: So if you raise that much money, you can have dinner with the vice president one night and dinner with the president the next?

NOVAK: And play golf all day at a great golf course. Isn't it nice to be rich and Republican?

WOODRUFF: Somebody yells "four." All right. OK.

Bob Novak with his -- you always give us the very latest. Bob Novak, thanks very much. And we'll be watching "CROSSFIRE." Thanks very much.

NOVAK: Thank you.

WOODRUFF: All right. Congress and the Supreme Court are in session. Both George Bush and John Kerry are on the campaign trail. But none of them gets Bill Schneider's "Political Play of the Week." Stay with us and find who does.

We'll also compare and contrast the Bush and Kerry economic plans.

(COMMERCIAL BREAK)

WOODRUFF: Another breaking story. This just in to CNN. A train has derailed in Hall County, Georgia. These pictures have come in to us just a few moments ago.

We have no information yet about injuries, casualties of any sort. But we are working the story, and we'll bring that to you as soon as we can. Affiliate WGCL bringing these pictures to us.

And now to the other story we're following, Raleigh-Durham Airport in North Carolina. These are live pictures courtesy of WRAL. A military fighter jet, an F-18 crashed on takeoff a short time ago. One person on board, the pilot, ejected. We do not know yet the condition of the pilot.

Again we're working that story. We'll bring you more as soon as we know. INSIDE POLITICS resumes right now.

(BEGIN VIDEOTAPE)

ADAM SEGAL, JOHNS HOPKINS UNIV. HISPANIC VOTER PROJECT: Eight, twelve, even twenty years ago, political strategists wondered whether it was of value to use a few thousand dollars to create some Spanish language ads.

ANNOUNCER: Those days are long began. But this election year who's making the stronger pitch for Latino voters?

The Democratic Convention is only four months away. But is Boston ready? We're hearing a mixed message from Beantown.

DON KING, BOXING PROMOTER: Ladies and gentlemen, welcome to Kerry versus Kerry, the battle for the Democratic Party.

ANNOUNCER: Why is Don King stepping into the campaign ring?

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

(END VIDEOTAPE)

WOODRUFF: Welcome back.

Well, if you're ever in doubt as to where the presidential race is the closest, simply follow the candidates. President Bush landed in Arizona a short while ago. His second stop of the day in a Southwestern battleground state. He's making the same pitch there as he did in New Mexico earlier today, that home ownership is up, and his administration's policies are helping the economy.

(BEGIN VIDEO CLIP)

BUSH: We want people owning something in America. That's what we want. The great dream about America is I can own my own home, people say. Or I can own my own business like many back here today. Or I can own and manage my own health care account or my own retirement account.

See, we want more people owning something, because when somebody owns something they have a vital stake in the future of the country.

(END VIDEO CLIP)

WOODRUFF: For John Kerry today the showdown state of choice was Michigan. That's where he outlined his economic agenda, including a plan to create 10 million jobs in four years. Kerry tells CNN's Lou Dobbs he'd reform the tax system to make outsourcing of jobs overseas less attractive.

(BEGIN VIDEO CLIP)

KERRY: I'm all for these companies competing and I want America to be strong in the world. But I'll tell you what I want first, I want those jobs here at home. I want to create a competitive advantage here.

(END VIDEO CLIP)

WOODRUFF: You can see all of John Kerry's interview on "LOU DOBBS TONIGHT" at 6:00 p.m. Eastern.

The president's Southwestern swing today drives home the importance that his campaign is placing on winning over Latino voters. So do the Republicans' political ads as CNN's Maria Hinojosa reports.

(BEGIN VIDEOTAPE)

MARIA HINOJOSA, CNN CORRESPONDENT (voice-over): It was one of the first big Republican ads of the election season. And it's already been followed by another, glossy, dramatic and on the attack.

But the message was in Spanish. Making it clear that Republicans want Latino votes like never before.

MATTHEW DOWD, CHIEF STRATEGIST, BUSH/CHENEY 2004: We had to improve among the Latino population because of how fast-growing it is in part of the electorate and how important it is. And so a day doesn't go by when we don't talk about that as an important constituency.

HINOJOSA: So important that Republicans bragged they'll break spending records on Spanish language advertising.

SEGAL: Eight, twelve, even twenty years ago, political strategists wondered whether it was of value to use a few thousand dollars to create some Spanish language ads. And now, there are high- level debates about how many millions of dollars can we bring together.

HINOJOSA: The Democrats broke money records with their own Spanish language primary ads. But the Kerry campaign says it still has no chief Latino strategist on staff even though Democrats usually capture most of the Latino vote.

HENRY CISNEROS, KERRY CAMPAIGN ADVISER: The pieces are falling in place and I think we're going to be very competitive. And in fact, we will have the superior message and the superior content and the superior candidate for Latinos. The watch word is not "relax." It is, this is a marathon. Pace yourself, and you don't panic.

HINOJOSA: The Bush/Cheney campaign is far from relaxing.

DOWD: This is going to be a fight. And I think they recognize that they are losing a constituency that they had thought sort of was in lock-step with their party.

HINOJOSA: Bush/Cheney 2004 is working hard on image. In January they spent $11,000 on a print add in "Vista" magazine with a circulation of a million.

DOWD: The picture of the president of the United States riding in a pickup truck with a cowboy hat. I think that that image can draw in some Latino voters.

HINOJOSA: The Democrats are doing their own image making. But just in case, MoveOn.org, the New Democratic Network and People for the American Way have hit the airwaves for Democrats, also in Spanish. An unprecedented move by independent groups targeting Latino voters who both parties hope could hand them a victory.

Maria Hinojosa, CNN, New York.

(END VIDEOTAPE)

WOODRUFF: Another story we're going to watch throughout this year.

For much of the week, the 9/11 attacks and the terror threat weighed heavily on the presidential campaign. Here now our senior political analyst Bill Schneider -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: You know, President Bush's credibility came under assault this week from someone who's not supposed to be a political player. Well, that's what made it "The Political Play of the Week."

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): President Bush claims the war on terrorism as his issue. This week his former counterterrorism chief Richard Clarke blew a hole in that claim.

RICHARD CLARKE, FRM. COUNTERTERRORISM ADVISER: I believe the Bush administration in the first eight months considered terrorism an important issue, but not an urgent issue.

SCHNEIDER: Democrats on the committee tried to build up Clarke's credibility.

TIMOTHY ROEMER, 9/11 COMMISSION MEMBER: You urge policymakers to imagine a day after hundreds of Americans lay dead at home and abroad after a terrorist attack and ask themselves what else they could have done. You write this on September the 4th, seven days before September 11?

CLARKE: That's right.

SCHNEIDER: An assault on the president's main reelection issue is serious. The White House moved into high gear, pointing out that Clarke is on record praising President Bush's commitment to the war on terrorism.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: You cannot square Dick Clarke's new assertions with his past words.

SCHNEIDER: Clarke's defense? Those past words were spin. Everybody in Washington does it.

CLARKE: When you're on the staff of the president of the United States, you try to make his policies look as good as possible.

SCHNEIDER: In fact, the White House is doing it now.

CLARKE: I knew before I wrote this book that the White House would let loose the dogs to attack me. And that's what they're doing.

SCHNEIDER: John Kerry wisely kept his distance from Clarke.

KERRY: I was just reading it all the way driving down here.

QUESTION: You have an opinion on it?

KERRY: I've got to finish it. I want to finish it. It's very interesting.

SCHNEIDER: And Clarke wisely kept his distance from Kerry.

CLARKE: I will not accept any position in the Kerry administration should there be one. On the record, under oath.

SCHNEIDER: Under questioning, Clarke revealed his true motive: Iraq.

CLARKE: By invading Iraq, the president of the United States has greatly undermined the war on terrorism.

SCHNEIDER: President Bush has been trying to depict the war in Iraq as secondary to the war on terrorism. Clarke argues the war on terrorism was secondary to Iraq. And therefore compromised by politics.

CLARKE: I think it's a question of politics.

SCHNEIDER: We think it was "The Political Play of the Week."

(END VIDEOTAPE)

SCHNEIDER: The idea behind the commission was to remove 9/11 from partisan politics. But exactly the opposite has happened. Mostly as a result of Clarke's book and his.

WOODRUFF: And there's still reverberations. The White House now saying they want Condoleezza Rice to go back before this competition commission albeit in private session.

SCHNEIDER: That's right. It got very personal.

WOODRUFF: All right, Bill Schneider, thank you.

Both John Kerry and George Bush are talking dollars today. Coming up, we'll ask a couple of money men if either of those economic plans makes sense.

Then we'll head up to Boston. The Democrats are coming. But will the city be ready for this summer's convention?

Later, a sports world heavyweight gets into the political ring.

(COMMERCIAL BREAK)

WOODRUFF: Senator John Kerry unveiled part of his economic strategy today, a plan to reform corporate taxes in a way that would encourage job creation here in the United States even as President Bush continues making the case for his economic plan.

Earlier I talked money, taxes, and jobs with Kerry economic adviser Gene Sperling, and former GOP presidential candidate Steve Forbes.

(BEGIN VIDEOTAPE)

WOODRUFF: Gene Sperling to you first, there's already the Bush campaign out commenting on Senator Kerry's plan, one Bush campaign official saying this is just gimmicks. Another one saying it's tinkering with the tax code. Is that what it is?

GENE SPERLING, KERRY ECONOMIC ADVISER: Judy, it's hard for me to understand what somebody would oppose about this.

Here's what this plan does. It takes away an affirmative U.S. tax incentive to move jobs overseas, and then keep the profits there permanently. It creates more incentives here to create jobs. It cuts the corporate rate by 5 percent to around 33 percent. And it is deficit neutral.

This is a win-win. It's very hard for me to see how a plan designed to take away incentives to move jobs overseas, create jobs here and lower the corporate tax rate, that's lowering the corporate tax rate for 9 percent of corporations, is anything but a serious pro- job and pro-growth plan.

WOODRUFF: Steve Forbes, corporate tax cut. That's something that Republicans like, isn't it?

STEVE FORBES, FRM. PRESIDENTIAL CANDIDATE: That's about the only good part of the plan, that small 5 percent cut. But this is only going to be a job bonanza for tax lawyers and tax accountants and tax lobbyists.

It simply will complicate the code, trying to define whether a facility overseas qualifies for exemption or not. They've a provision in there for helping companies that may be hit by outsourcing. That's a huge loophole for the lobbyists on K Street in Washington, D.C.

And in terms of creating jobs it will actually end up destroying jobs because it's going to increase the corporate tax rate by putting on even more double taxation. America today has the second highest corporate tax regime on businesses in the world and this is going to end up making it worse.

WOODRUFF: Gene Sperling?

SPERLING: Well, Steve, actually incorrect there. There's nothing here that would allow double taxation. What this is simply about is that, Judy, right now our tax code says that if you move jobs overseas you can defer paying U.S. taxes, and you can do so permanently. Now I just have to ask a very simple question: if you have two companies in the United States of America, both creating jobs, if one decides to move jobs overseas, should the American taxpayer provide an affirmative incentive, tax incentive to the country that moves jobs overseas and puts the company that deeps job in the United States at a competitive disadvantage with that rival?

That just doesn't make common sense. This is tax reform. It takes that money and lowers the corporate rate from 99 percent of small businesses.

WOODRUFF: Steve Forbes, if that's what it is, Steve Forbes, why isn't this something that you and other Republicans could embrace?

FORBES: Because it's not what Gene portrays it as. It is a form of double taxation. No other country in the world taxes corporate profits twice. If you have a facility, American facility overseas you pay taxes to that government. And when you bring the money home you have a huge tax burden here. No other country does that. So that's going to hurt.

And then they have -- you're allowed to have a facility overseas if you supposedly export and that's going to get into problems defining what the content of the export is. It's a bonanza for lawyers.

If they really want to help manufacturing just have a big reduction in the corporate tax rate and stop the double taxation which no other country does.

WOODRUFF: So, Steve Forbes, are you saying that this is the wrong method, wrong remedy, or that nothing should be done with the outflow of jobs outside the United States?

FORBES: Well, if you want to help manufacturing, this isn't the way to do it. The way you help manufacturing is with tort reform, which is crushing businesses, especially small manufacturers. Slash the corporate tax rate. Our corporate tax rates are higher than even Germany and France and Old Europe. And other reforms to make us more competitive.

This is simply a bonanza for tax layers, very complicated, will do very little to help anyone but K Street lobbyists.

WOODRUFF: Gene Sperling, what about the point, an economist at Standards and Poor saying right now workers in the U.S. earn an average of $28 an hour plus benefits. Workers in China and India $2 an hour. There's not much changing the tax rates can do to change that.

SPERLING: A couple points, Judy. First of all there is no double taxation. It does not change anything that allows that.

(CROSSTALK)

SPERLING: This is tax reform and simplification. And third, Judy, Senator Kerry realizes that this is a free global market, jobs will move overseas. There's no question about that. The question is, should the U.S. taxpayer have an affirmative tax incentive to move jobs overseas?

And neither Steve Forbes or anybody from the Bush campaign is ever going to be able to tell an American company, the 99 percent of American companies that will get their taxes cut by this proposal that if they're creating jobs here they should be put at a competitive disadvantage with a rival who moves jobs overseas.

(CROSSTALK) .

WOODRUFF: Quick last word, Steve Forbes, very quick.

FORBES: If we want to help manufacturers reduce the tax burden here, reduce the trial costs here, reduce health costs here and then we'll be competitive, enriching tax lawyers is not the way to do it. This is a complicated proposal.

(CROSSTALK)

SPERLING: We agree on lowering health care costs. You should take a good look at Senator Kerry's plan.

(END VIDEOTAPE)

WOODRUFF: A lively discussion, Gene Sperling, Steve Forbes. Gentlemen, we thank them both.

The convention countdown is on. Will Boston be ready for the Democratic invasion? Coming up the preparations, the politics, and the problems.

(COMMERCIAL BREAK)

WOODRUFF: We have an update for you in that crash of a Navy F-18 fighter jet that crashed and burned on the runway at the Raleigh- Durham International Airport just a short time ago.

These are pictures that came in to CNN from our affiliate WRAL. Pictures of the plane still in flames. They used that white foam to put out the fire. It is now out.

There is an airport spokeswoman who told reporters that the condition of the pilot is not known. He was known to have ejected but it is not known yet what his or her condition is. We'll bring that information to you as soon as we get it. Again, this is a scene at Raleigh-Durham International Airport in North Carolina.

John Kerry has yet to share who he might choose as a vice presidential running mate. It's still early. In a poll by "The National Journal," 50 Democratic insiders tapped North Carolina Senator John Edwards as the best bet for the No. 2 spot.

Rounding out the top five, Representative Dick Gephardt, New Mexico Governor Bill Richardson, Iowa Governor Tom Vilsack and Senator Bob Graham of Florida.

Whoever Kerry selects will stand with him at the Democratic National Convention in Boston in late July. Preparations in Beantown are coming along, but not without controversy. Here's CNN's Dan Lothian.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF (voice-over): Boston's moment in the Democratic National Convention spotlight is only four months away. And Mayor Tom Menino says the city is ready to shine.

MAYOR TOM MENINO, BOSTON: Financial piece's coming together real well and I think first the hotel accommodation has been given so early, delegation (UNINTELLIGIBLE) been set. So I think we're in great shape.

LOTHIAN: But there's unrest among nearly 30 unions here working without contracts for almost two years, including 94 percent of the city's 17,000 employees.

UNIDENTIFIED FEMALE: We got the DNC coming. We're expected to do so much work and yet still we have no contract. Fair is fair.

LOTHIAN: The powerful Boston Police Patrolman's Association is now using the convention to put pressure on the city, and the Democratic Party. Leadership isn't focusing on endorsing Senator John Kerry until a contract is signed, and is threatening to cause disruptions by picketing during the four-day event in July.

THOMAS NEE, PRES., BOSTON POLICE PATROLMEN'S ASSN.: We applied for a permit to have a rally with national speakers on City Hall Plaza on the first day of the convention. And we will get our message out. And we will articulate the shortcomings and the shortfalls in the city of Boston.

MENINO: We just can't spend money we don't have. And that's a fact of life. I can't send the city into bankruptcy and I will not send it.

LOTHIAN: The estimated $64 million convention of which the federal government is picking up $25 million for added security, will be held at the Fleet Center. And there's controversy in that, too.

Recently Governor Mitt Romney made headlines suggesting the event be moved to the city's new convention center. Better for security and traffic, he said. Critics accused the governor of playing politics.

Dodging distractions, Karen Grant with the host committee, Boston 2004, is focusing on pulling off a clean convention.

KAREN GRANT, BOSTON 2004: Trying to figure out traffic flows and what the traffic impacts will be.

LOTHIAN: Putting together the pieces of a complex puzzle that meets the needs of some 35,000 delegates, politicians and members of the media. More than 8,000 volunteers have been recruited to help.

GRANT: They're going to be the core back bone.

LOTHIAN (on camera): With a bulging budget, organizers are now trying to make up a $7 million fund-raising shortfall, something they insist will have over the next four months.

Dan Lothian, CNN, Boston.

(END VIDEOTAPE)

WOODRUFF: You never know who might show up in a political year. When we come back, prize fighting is his game, so what does the king of the ring have to do with the presidential race?

(COMMERCIAL BREAK)

WOODRUFF: I'll be filling in for Wolf Blitzer on "LATE EDITION" talking to Richard Clarke this Sunday. Well, the Republican National Committee has recruited boxing promoter Don King for a tongue in cheek jab at Democratic presidential contender John Kerry. King's voice can now be heard narrating the RNC's Web game Kerry versus Kerry.

(BEGIN VIDEO CLIP)

KING: Ladies and gentlemen, welcome to Kerry versus Kerry, the battle for...

(END VIDEO CLIP)

WOODRUFF: The game pits two images of Kerry against each other in a boxing ring. After each round, players hear King's commentary on Kerry's technique. You can find it at GOP.com. And we are waiting to get the Democratic response to all this.

That's it for INSIDE POLITICS. Have a good weekend. I'm Judy Woodruff. "CROSSFIRE" starts right now.

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


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