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JUDY WOODRUFF'S INSIDE POLITICS

Intelligence Reforms; Fighting Terrorism; Kerry's Iraq Plan; Lack Of Bounce For Kerry; Bush Takes Two 9/11 Commission Recommendations; Howard Dean Says Terror Warnings Politically Motivated

Aired August 2, 2004 - 15:58   ET

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


KYRA PHILLIPS, CNN ANCHOR: I'm Kyra Phillips. Here's a look at stories "Now in the News."
Hoping to thwart another terrorist attack, President Bush throws his support behind the creation of a national intelligence director and national counterterrorism center. Senator Kerry applauded Bush for his endorsement but criticized the president for not moving fast enough. Much more ahead on INSIDE POLITICS.

An arrest today in the case of a missing Utah woman. Mark Hacking, the husband of Lori Hacking, has been taken into police custody on suspicion of murder. A live report from Utah just ahead at 5:00 Eastern on "WOLF BLITZER REPORTS."

An injury forces early retirement for racing phenomenon Smarty Jones. The Kentucky Derby and Preakness champ is suffering from bruising common in racing horses that would have put him out for the rest of the season.

Keeping you informed, CNN, the most trusted name in news.

Now JUDY WOODRUFF'S INSIDE POLITICS.

(BEGIN VIDEOTAPE)

MAYOR MICHAEL BLOOMBERG (R), NEW YORK CITY: New York City is not going to be cowed by the terrorists.

ANNOUNCER: The threat level's raised in parts of New York, New Jersey and Washington, D.C. How will the new warnings affect the race for the White House?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today I'm asking Congress to create the position of a national intelligence director.

ANNOUNCER: President Bush embraces some of the 9/11 Commission's recommendations. Is this an about-face by the president?

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I believe this administration and its policies is actually encouraging the recruitment of terrorists.

ANNOUNCER: John Kerry says he can do better. What's his plan for fighting terrorism? (END VIDEOTAPE)

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

JUDY WOODRUFF, HOST: Thank you for joining us.

President Bush today announced his support for two major changes in how the nation gathers and analyzes intelligence. He said he supports the naming of a national intelligence director and the creation of a counterintelligence center to coordinate both foreign and domestic intelligence activities.

The president's decision represents a qualified acceptance of key proposals in the recent 9/11 Commission Report. At a news -- at a Rose Garden news conference, the president said the new intelligence director should be appointed by the president, but he said be independent of the White House staff.

(BEGIN VIDEO CLIP)

BUSH: Well, I don't think a person ought to be a member of my cabinet. I will hire the person. And I can fire the person, which is -- any president would like. That's how you -- that's how you have accountability in government.

I don't think that the office ought to be in the White House, however. I think it ought to be a stand-alone group to better coordinate, particularly between foreign intelligence and domestic intelligence matters.

(END VIDEO CLIP)

WOODRUFF: On the campaign trail in Michigan, Senator John Kerry today responded to the president's announcement and repeated his criticisms that the Bush administration is not moving quickly enough to secure the nation against future attacks. Our Dana Bash is traveling with the Kerry campaign.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Senator Kerry is making his way through Michigan now at a rally in Grand Rapids. And he talked about the news of the day, which, of course, is the president's ideas for reforming the intelligence agencies.

He called these -- those ideas "too little, too late," and he pointed to the new terror alert which both he and his running mate have been briefed on as the latest example of how urgent the need for reform is. And the senator, whose own absence in the Senate both in votes and debated have been noted this year, said it's the president's job to call Congress back from the summer recess for a special session to get this done now.

KERRY: And if we're at war, and it's so urgent, we shouldn't be waiting. We ought to get Congress back and get the job done right now, and make America safer.

BASH: Kerry said he would be there if needed for the important debates and votes if this happens. Now, the Kerry campaign says they understand that even their internal polling shows that he's down about 10 points against the president in stewardship against terrorism. However they say they are determined not to cede the national security issue to Mr. Bush.

And the senator kept up, even stepped up his aggressive rhetoric against the president on terrorism. He talked about missteps by the president in the war on terrorism over the last three-and-a-half years, saying the White House policies are encouraging terrorism.

KERRY: I believe that I can fight a more effective war on terror than George Bush is. I know I can fight a more effective war. Lee Hamilton, the co-chairman of the 9/11 Commission, has said this administration is not moving with the urgency necessary to respond to our needs. I believe this administration and its policies is actually encouraging the recruitment of terrorists.

BASH: The Kerry line, which he's pushing not just here at this rally, but earlier today with firefighters, is that America is safer, but not safe enough, and that he is the guy, not the president, to do the job to make America safer. The Bush campaign points out that many of the policies the senator is pushing have already been enacted.

Privately, Kerry campaign aides acknowledge the fact that, despite his tough rhetoric, they have to be careful with the politics of terrorism. That's why you saw the senator step away from any comment by Governor Howard Dean, for example, that this terror alert was politically motivated.

Dana Bash, CNN, Grand Rapids, Michigan.

(END VIDEOTAPE)

WOODRUFF: Sorry about some difficulty hearing Dana. Obviously she was talking with the crowd behind her.

Well, with me now to talk more about intelligence reform, as well as the critical remarks by Senator Kerry, is the White House communications director, Dan Bartlett.

Dan Bartlett, thank you for talking to me. What about Senator Kerry citing Lee Hamilton as saying the administration is not moving with the urgency that's needed here?

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, I think selective quotations from the vice chairman is a little misleading. What you find what President Bush has done is he takes -- he's already acted on many of the recommendations that the 9/11 Commission has put forward to the American people.

This is an administration who acted boldly after 9/11. We're going on the offense in the war on terror. We created the Department of Homeland Security. We've broken down the wall between law enforcement and the intelligence community so they can help understand the threats that our country faces, and I think we've seen that unfortunately very vividly in the last 24 hours.

And I think it's the ultimate irony that Senator Kerry is coming forward with some sense of urgency, when here's a guy who served on the Intelligence Committee, yet didn't show up for his public hearings 38 out of 49 times. So I think it's a little bit ironic that he would be calling into question the urgency of this administration when Senator Kerry himself has a paltry record of attendance there before the Senate Intelligence Committee.

WOODRUFF: Well, but he's saying the president should -- that this matter is so urgent, the president should call Congress back into session in August and not wait until September.

BARTLETT: Well, Judy, as you know, just as the American people have seen, that the committees before Congress are already starting their hearing process. Last Friday they had a hearing with the joint chairman testifying before them. There's hearings all this week as well.

The Congress is moving. President Bush has put forward a plan that he thinks will protect our country. It implements the 9/11 recommendations, and it goes further.

So he can quibble with the process. President Bush is focused on results. And you're seeing in the last three-and-a-half years that President Bush has yielded results in the war on terror, because he knows if we fight this war on offense, we'll win. If we fight it on defense, or continue to have this fundamental misunderstanding about the war we face, like Senator Kerry suggests with his comments, then we're not going to win.

So President Bush is going to stay on offense. We're going to implement these reforms that build on the reforms we've already enacted. And the American people will be safer for it.

WOODRUFF: Let me also cite something that Lee Hamilton said. And he was quoted today in the newspaper in "USA Today," as saying, "It's inconceivable to me that a president of the United States would want his highest national security priority handled somewhere else in the government not under his direct control."

BARTLETT: Well, in fact, as President Bush said today, he will hire the person, and he will fire the person if necessary. That is under his direct control. That's how the executive branch works.

And President Bush wants one person who has all the information, all the intelligence information, both foreign and domestic, coming together in one place and providing the best intelligence product possible for the president of the United States. And that's what he's going to get.

There will be accountability. There will also be accountability before the United States Congress. This person will be confirmed by the United States Senate. So this answers the 9/11 recommendations call. It goes beyond that with other steps that this administration has taken. And it's going to be better for the country.

WOODRUFF: What about the overall criticism from Senator Kerry that the administration has taken almost three years to take seriously some of the changes that need to be -- that need to be implemented to address terrorism?

BARTLETT: Well, I think Senator Kerry has amnesia if he's not seeing the type of bold action that this administration has taken. You take the fact that we're fighting this war on offense. You take the fact that President Bush called for the biggest reorganization of government in over 40 years with the Department of Homeland Security.

President Bush has pulled down the wall between law enforcement and foreign intelligence community, which we're seeing in the last 24 hours. By staying on offense, we're getting the type of information we need to give to law enforcement officials on the ground in New York, New Jersey and Washington to better implement and make sure we're doing everything we can to protect the public.

So I think Senator Kerry is trying to selectively look in the past for his own political purposes. But a true look at the record shows that President Bush made this an urgent priority, because he is the one who wakes up every morning as commander-in-chief and understands it's his responsible to protect this country. And he takes that very seriously.

WOODRUFF: Dan Bartlett, one other thing. The president in his news conference today in the Rose Garden referred to his opponents who, in his words, seem to think that terrorists can be negotiated with or talked sense into. I asked Jamie Rubin, who is advising the president about that, and he said -- he said Senator Kerry things no such thing, and he said it's misleading for the president to suggest otherwise.

BARTLETT: Well, Senator Kerry's the one who has a problem with his credibility on this issue. If you take the issue for Iraq, for example, we still don't know where Senator Kerry stands on the issue.

He can't explain his position before the war. He can't explain his position today. He can't explain why he didn't vote for $87 billion worth of funding for our troops when he said it would be irresponsible for doing so.

So Senator Kerry is the one who has some very difficult explanations to give to the American people. And on this particular issue about intelligence, he suggested today that our actions are causing more terrorists to -- to attack us. Well, that's a fundamental misunderstanding of how the war on terror is being prosecuted.

These people were planning and plotting for years before President Bush even took office. And the only way you can fight them is fight them in offense. And if he's suggesting otherwise, that is a fundamental misunderstanding. So it's a clear chance in this campaign and one we'll continue to talk about. WOODRUFF: All right. Dan Bartlett, we're going to have to leave it there. And, in fact, I did ask Jamie Rubin about that last point you made, and we'll hear his comments later on in the program.

BARTLETT: Great.

WOODRUFF: Dan Bartlett, thanks again.

And turning now to the headlines in our "Campaign News Daily," Vice President Dick Cheney and Senator John Edwards are on the campaign trail this Monday. Cheney spoke at a Colorado rally this afternoon in a hangar at Peterson Air Force Base near Colorado Springs. Today marks the start of a three-day six-day campaign swing for the vice president.

John Edwards is making several stops around Florida today, including Miami and Orlando. Tonight, Edwards speaks to the Southern Christian Leadership Conference in Jacksonville.

A new poll in New Jersey finds John Kerry appears to have regained the edge over President Bush in the Garden State. The Research 2000 survey taken before Kerry's convention speech gives Kerry a 10-point lead over Bush. Other recent polls have shown the race to be much closer. It surprised many since Bush lost New Jersey four years ago by 16 percentage points.

Ralph Nader continues his uphill climb to get on the ballot. Today, he's got a toe-hold in two new states. We'll tell you which ones when we come back.

Heightened terror warnings, but who's the man with the plan? We've heard from the White House. Coming up, former Assistant Secretary of State Jamie Rubin makes the case for John Kerry.

And the nominee lays out his prescription for Iraq. But are there gaps in the Kerry vision?

With 92 days until the election, you're watching INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: President Bush said today that he will do everything in his power to defeat terrorists and protect the American people. Earlier, I spoke with Jamie Rubin, who was an assistant secretary of state during the Clinton administration and is now a foreign policy advisor to John Kerry. With the Kerry rally taking place in the background, I asked whether the senator disputes the president's statement.

(BEGIN VIDEOTAPE)

JAMIE RUBIN, KERRY FOREIGN POLICY ADVISER: Well, I think it's not so much President Bush's intent. It's President Bush's policies.

For the last three years, we clearly haven't done everything we can to make America safe. That's why the 9/11 Commission made so many recommendations for action that could have been done quite some time ago, whether it's the national intelligence director finishing the job in Afghanistan, preventing weapons of mass destruction from falling into terrorist hands.

They said that we could have done more. And the chairman of the 9/11 Commission and the vice chairman have said the administration and the government is not acting with a sense of urgency. It's not so much the president's intent. It's that he's not doing it the right way.

WOODRUFF: Well, President Bush answered that question today. He said he has done a great deal. He said the FBI has been reformed. He said the FBI and the CIA are communicating better. He talked about the Department of Homeland Security and more.

And beyond that, he said to Senator Kerry's criticism that his policies are responsible for encouraging the recruitment of terrorists. He said that is a ridiculous idea.

RUBIN: Well, let me address both points. If Bush -- President Bush really thought he was doing everything that he could, why did he flip-flop and suddenly support the national intelligence director? If this is a new idea, which we believe it is, that could help ensure that we have the best possible intelligence to keep us safe, why has he been against it for so long?

John Kerry proposed this a year ago, late last winter. And now suddenly the president of the United States is for it. Why hasn't he had this sense of urgency?

When it comes to the recruitment of terrorism, all Senator Kerry was pointing out is what the secretary of defense, Donald Rumsfeld, has been expressing concern about. When he asked the question in his memo, are we creating more terrorists than we're defeating, the CIA official known as "Anonymous" specifically said that our policies are fueling recruitment for the extremist organizations.

So it's not so much that the president has the wrong intent. He has the wrong policies. We should be finishing the job in Afghanistan so we can get al Qaeda and bin Laden before they get us. We should have reformed intelligence long ago.

Senator Kerry is pleased that finally, at long last, President Bush is taking some steps. But without a sense of urgency, we're not going to be doing everything we can to make America safe. And that's why he's called on Congress to come back and finish this work.

WOODRUFF: Jamie, the president also said today -- and he said, "My opponents have a fundamental misunderstanding of the war on terror." He said, "We know that terrorists are cold-blooded killers." He said, "Others think they can be negotiated with or talked sense into."

RUBIN: Well, it's really a shame in American politics that George Bush would be misleading the American people and inventing and fabricating an argument that doesn't exist. John Kerry isn't saying we should negotiate with terrorists. That's complete and utter nonsense.

What he is saying is that in order to defeat terrorism, we need to have the maximum cooperation of the international community. We need to have all of the countries and friends and major powers around the world doing everything they possibly can to help us, because we can't win the war on terrorism alone.

You know, this information, according to the newspapers, has come out of cooperation with Pakistan, where you've got to get the Pakistani government, the moderate Islamic government to do all they can to help us so that we can win the war on terrorism. And I don't think anybody can dispute that George Bush's policies have made America not respected, not supported, have made America's administration and our country unfortunately and tragically resented around the world.

WOODRUFF: Why won't Senator Kerry say specifically how he would bring the troops home within four years, rather than just saying he has a plan but he won't share it?

RUBIN: Well, he's got to -- as president -- and I certainly hope that happens -- you've got to sit down with leaders of foreign countries and talk business with them and convince them and persuade them that they have just as much of an interest. You don't do that in public. But with a fresh start under John Kerry, we're going to be able to get help, help that George Bush just can't get.

(END VIDEOTAPE)

WOODRUFF: Jamie Rubin, who is advising Senator John Kerry.

Well, the situation in Iraq is a major issue, we know, in the race for the White House. You just heard us talking about it. When we come back, Bruce Morton fills us in on Senator Kerry's plan for stabilizing Iraq and, again, just what we were talking about, getting American troops back home.

(COMMERCIAL BREAK)

WOODRUFF: In his bid to unseat President Bush, Senator John Kerry is aiming a lot of his criticism at Bush's handling of the situation in Iraq. But what could Kerry do differently? CNN's Bruce Morton takes a closer look at the Democratic nominee's plan for Iraq.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): Yes, John Kerry has a plan to get U.S. troops out of Iraq.

KERRY: Well, I do have an exit strategy. And my strategy is to get our troops home as fast as possible. But to do it in a way that provides for a stable Iraq, that is not a failed state, that's moved towards democracy and capable of moving there.

MORTON: He even has a timetable, something experts have warned candidates against in past campaigns.

KERRY: I would consider it unsuccessful policy if I hadn't brought significant numbers of troops back within the first term. And I will do that -- I'm not going to lay out my whole plan here. I need to be able to negotiate as a president.

MORTON: Well, that reminded some of Richard Nixon's so-called secret plan to end the war in Vietnam. But Nixon never used the phrase "secret plan." A reporter simply misheard him.

Nixon did have a plan, though, (INAUDIBLE). He outlined it in the 1969 speech. "The primary mission of our troops is to enable the South Vietnamese forces to assume full responsibility for the security of South Vietnam."

It was a plan, but it didn't work. The U.S. and North Vietnam agreed on a settlement. U.S. troops withdrew; U.S. prisoners of war came home in the spring of 1973. But the South Vietnamese couldn't defend themselves.

Fighting flared up two years later, and Saigon failed in 1975. Helicopters evacuating Americans from the embassy roof. Pictures of a lost war.

It didn't happen on Nixon's shift. He resigned over Watergate. Gerald Ford was president as the long war finally ended. This time, John Kerry has a plan, expand the coalition.

KERRY: With a new president who understands all the needs of the Middle East, all the needs of North Korea, Russia, and other things, I will bring countries back to the table.

MORTON: Maybe. But it's hard to find people in such former allies as France or Germany who think that will happen. It was Dwight Eisenhower who once said, "Plans are fun until the fighting starts."

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: At the White House, and on the campaign trail, the fight against terrorism has everyone's attention. Coming up, the political fallout from the latest threats against Washington, New Jersey and New York City. I'll talk live with New York's governor, George Pataki.

Also, the Bush administration's moves to implement the recommendations from the 9/11 Commission and its response to the Kerry campaign criticisms that the president isn't moving quickly enough.

(COMMERCIAL BREAK)

ANNOUNCER: Where's the bounce?

KERRY: I don't pay attention to polls.

ANNOUNCER: Well, we do. And we've got new numbers out this hour.

The Republican National Convention opens in New York four weeks from today. Will the new terror threat affect the Republicans' big party.

GOV. GEORGE PATAKI (R), NEW YORK: People should know there is no place that is better prepared or taking tougher steps to protect the people than we are here in New York.

ANNOUNCER: The Empire State's governor is our guest.

Howard Dean does it again.

DR. HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: I am concerned that every time something happens that's not good for President Bush, he plays this trump card, which is terrorism.

ANNOUNCER: The former presidential hopeful creates another controversy.

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

WOODRUFF: Welcome back. John Kerry and John Edwards are continuing their campaign sprints around the country this Monday, hoping to capitalize on the positive vibes generated by last week's party gathering in Boston. But the latest CNN/"USA TODAY"/Gallup poll finds there's one element missing from their post-convention travels: the traditional bounce in public opinion polls.

So, why did the bounce fall flat? Our Bill Schneider takes a look.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN CORRESPONDENT (voice-over): What happened to the convention bounce? Before the convention, John Kerry had a four- point lead over President Bush among registered voters. Now, the race is tied: Kerry down one point; Bush, up three.

This is the first Democratic convention since 1972 that did not give the nominee any boost in the polls. That was the year when everything went wrong for George Mcgovern. Democrats say they're not surprised.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: Everybody knew that going into the convention that because the electorate is so polarized, because there's only about 6% or so that are undecided, that there would not be a significant bounce after this convention.

SCHNEIDER: She has a point. This year, Democratic primary voters shut down the nominating process earlier than ever and rallied behind Kerry. They gave him record amounts of money. The challenger was already running neck and neck with the incumbent president.

Interest in the election is extraordinarily high, and the number of undecided voters is unusually small. People were certainly watching.

Four years ago 55% of voters said they watched some or all of the convention that nominated Al Gore. This year, more than 60% said they watched the convention. The effect was to rally partisans on both sides.

The number of Democrats who said they were more enthusiastic than usual about voting this year jumped six points, from 70% before the convention to 76% afterwards. But Republicans were even more energized by what they saw in Boston -- 11 points up.

Favorable opinions of Kerry went up slightly, but so did favorable opinions of Bush. That could be the price Democrats paid for their decision to tone down the personal attacks on Bush at the convention. The president suffered no political damage.

Despite their low expectations, Democrats have to be frustrated.

KERRY: All of these polls, I think, are so wacky, because, frankly, they don't know what the political dynamic is this year.

SCHNEIDER: All those speeches, all the hoopla, all those balloons. And what happened? According to the poll, not much.

(END VIDEOTAPE)

(on camera): Among voters we interviewed on Friday, the day after Kerry's acceptance speech, the polls showed Kerry did have a five-point lead. But it disappeared on Saturday and Sunday. The shortest convention bounce on record. More like a convention twitch.

WOODRUFF: OK. We've coined a new phrase.

SCHNEIDER: Right.

WOODRUFF: Bill Schneider, thanks very much.

Well, several other poll notes to report to you. A CBS News survey also finds little evidence of a bounce for the Kerry/Edwards ticket. Kerry leads Bush by six points in the poll, just one point more than a survey taken two weeks before the convention.

In our own poll, there is evidence that the Democrats' convention did help the image of the party overall. Democrats now enjoy a 55% approval rating, up from 48% last month. Views of the Republican party dropped slightly after the Democratic gathering: 47% now view the GOP favorably. That's down from a 50% rating recorded in July.

Well, returning now to the politics of national security. President Bush today gave qualified backing to two major recommendations of the 9/11 Terror Commission.

CNN White House correspondent Suzanne Malveaux is with me now for more on the president's announcement -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Judy, earlier today, the president was in the Rose Garden when he struck a defiant tone saying that, knowing what I know today, we would still have gone into Iraq. The president aggressively making the case that the administration did everything it could prior to September 11th, after September 11th to protect the American people.

The president also saying that he was signing off on most of those 9/11 Commission recommendations, including the central ones. That is the creation of a new National Counterterrorism Center, one that would integrate intelligence -- foreign and domestic intelligence -- as well as analysis and a creation of a National Director of Intelligence.

I'm not hearing Bush. I'm not hearing him. Thank you.

(BEGIN VIDEO CLIP)

BUSH: ... create the position of a National Intelligence Director. A person in that office will be appointed by the president, with the advice and consent of the Senate, and will serve at the pleasure of the president.

The National Intelligence Director will serve as the president's principal intelligence advisor and will oversee and coordinate the foreign and domestic activities of the intelligence community.

(END VIDEO CLIP)

MALVEAUX: Now, one caveat here, Judy, is the fact that unlike what the 9/11 Commission wanted to have that position within the executive office, the president saying this is not going to be a position that is in the White House. They believe it should have more autonomy, more independence.

And of course, Judy -- of course, the White House also hitting back very hard against criticism from Senator John Kerry, saying that they had done very little in the three-and-a-half years of his administration to counterterrorism.

The Chief of Staff Andy Card saying that many of these recommendations have really already -- they're being enhanced now -- had already been initiated years ago, and that this is not about the elections.

(BEGIN VIDEO CLIP)

ANDREW CARD, W.H. CHIEF OF STAFF: This has nothing to do with politics. This has to do with better protecting the homeland and making sure that the resources of our intelligence community are well coordinated, so that the president can have the best information available to defeat terrorism.

(END VIDEO CLIP)

MALVEAUX: As you know, Judy, of course, political pressure on both sides -- on the Bush administration and Senator Kerry -- to prove that they are the strong one when it comes to national security, as well as intelligence reform.

It is also up to Congress, however, as well to determine what kind of budget authority that new position would have with the National Director of Intelligence.

A lot of questions unanswered. A lot of things still to be determined in the months to come -- Judy?

WOODRUFF: OK. Suzanne, thank you very much. And we'll let you get out of that rain. We appreciate it.

Well, Senator John Kerry says he takes the reported new terror threats seriously. But he says President Bush's failed leadership is encouraging the recruitment of terrorists. Kerry's comments came during a campaign stop today in Grand Rapids, Michigan -- part of his two-week bus tour across America.

The Democratic presidential nominee says the Bush administration has not moved rapidly enough to make the country safe.

(BEGIN VIDEO CLIP)

KERRY: The question is: Are we as safe as we ought to be, given the options that were available to us? And the answer is, no. And we should be, and I will make us as safe as we ought to be.

(END VIDEO CLIP)

WOODRUFF: Kerry and his running mate, Senator John Edwards, have each received a classified briefing on those reported terror threats.

New York's Governor George Pataki says no place is better prepared or taking tougher steps to protect its people from terrorism than New York City. The governor was on Wall Street this morning to help ring the opening bell as a show of confidence.

He's with us now from New York. Governor Pataki, thank you very much for joining us.

PATAKI: Thank you, Judy. Nice being with you.

WOODRUFF: Is this the most specific information on a possible terror threat, would you say, since 9/11?

PATAKI: Unquestionably. Now we have not just regions, but we have specific buildings and industries that clearly have been under surveillance and have been targeted. But as I said, as you quoted me earlier, this city is prepared. The mayor and his team have done an outstanding job. The president has provided all the support and information that they can.

And while no one can say there will not be an attack, we can say that everything that can be done to be prepared and try to prevent that is being done right now.

WOODRUFF: What are the terrorism experts tell you? I mean, among other things, you must ask them, given all the publicity, how do you know that the potential terrorists aren't going to switch targets?

PATAKI: Well, you can't assume that they're not. And that's why you have to have a higher level of security -- not just at these specific targets, but across the city at many different places. And as you know, New York City has been at Level Orange since September 11th. We haven't come down since September 11th.

And now, we're just taking additional measures, because of the intelligence, because of the information and the help that the federal government has been providing. But you can't just target -- or you can't just look to protect a particular building or handful of buildings. You have to do it generically for the entire city and region. And that's what we're looking to achieve.

WOODRUFF: Governor, the mayor of New York City, Michael Bloomberg, said in late June -- he said -- I'm going to quote this, he said that, "New York City is not getting its fair share of Homeland Security funding." He went on to say -- I'm just going to quote this -- he said, "The fact of the matter is, when you catch a terrorist with a map in their pocket, the map is New York City. It's not a map of the corn fields of the Midwest or upstate New York."

PATAKI: Well, the mayor and I have agreed on this, and so has President Bush, that what we need is more ability to allocate federal anti-terrorism funds on the basis of a threat analysis.

Right now, Congress has insisted that the first 30% of anti- terrorism funds be allocated among the states pursuant to a generic formula. We want to see more of those funds targeted by Secretary Ridge and others based on an analysis of where the threats truly are.

And we'll continue pushing, and I'm sure the White House and Secretary Ridge will continue supporting our efforts to achieve that.

WOODRUFF: Governor, what about the comments we've heard in the last two days from Howard Dean, the former governor of Vermont. I mean, he is suggesting that there's some politics in here.

And just a quick quote from him. He says, "I am concerned every time something happens that's not good for President Bush, he plays this trump card, which is terrorism." He said, "His whole campaign is based on the notion," quote, "'I can keep you safe, therefore at times in difficulty for America, stick with me' and then out comes Tom Ridge.

PATAKI: Judy, I think Howard Dean is an embarrassment. I mean, he almost makes Michael Moore look objective in how he analyzes these situations. And the American people got to know him during the campaign and rejected him.

The sad part is that his policies and his warped beliefs are having a significant impact on Senator Kerry's policies. Senator Kerry talked about being tough in the war on terror, but he essentially adopted the Dean line when he had to do it to get through at the Democratic primaries. And this president understands the real threat that America faces. He is providing extraordinary leadership. And I'm just proud to stand with him and stand with the people of New York, because we understand that these threats aren't political; they are real.

And I'll tell you, Judy, I've seen the courage of New Yorkers, in the face, not just of threats, but of the attacks of September 11th. And right now, New Yorkers are showing that same courage in the face of these threats.

But this president is providing the leadership, and I have no doubt -- and one of the reasons I think Senator Kerry didn't get the bounce, as you were just talking about, from the Democratic convention: He didn't reassure the American people on terror, that he understands the war.

I mean, he talks about, as I just saw the clip, protecting the American people. But time and again, he's voted to cut intelligence funding, voted to cut our military. We need a president who understands we're in a war. And it's a war that we have to win. And President Bush understands that.

WOODRUFF: But I'll make the same point to you that I did to Dan Bartlett when I talked to him earlier this hour, the communications director at the White House. Senator Kerry is saying President Bush didn't move quickly enough. He didn't move with enough urgency. That it's been almost three years, and now he's finally taking some of these steps.

He's even urging that the president call Congress back in special session.

PATAKI: Well, I think the senator's comments are ridiculous. This president has provided extraordinary leadership, before and since September 11th. We didn't have an Office of Homeland Security. We didn't have these hundreds of millions of dollars in federal anti- terrorism money. Now, we're saying we would like more, but at least we have it.

We didn't have the intelligence sharing from Secretary Ridge and the administration that we do now. All levels of the federal government working together. And this president understands that you don't just pat yourself on the back and declare a victory. You look to see how you can continue to move forward. And that's what this president is doing.

And I just think -- I honestly hope and believe that when the American people understand that we are in a war, a war we have to win, and you have a president who's provided strong, determined leadership, and you have a candidate who has voted consistently against intelligence operations, against military support, help for our troops, that we need a president who understands this. And that's President Bush.

WOODRUFF: All right. New York Governor George Pataki. Thank you very much. PATAKI: Thank you, Judy.

WOODRUFF: See you soon. And we'll be in New York City in just a matter of days from now. Thanks very much.

PATAKI: Thank you.

WOODRUFF: Well, Congress -- we were just discussing Congress -- it would have to approve many of the changes recommended by the 9/11 Commission. Of course, right now, we're in the August recess. But coming up, a look at what, if any, work is being done on Capitol Hill.

Plus, we've been hearing about this. Howard Dean goes on the attack. But is he damaging the Republicans or his own party's credibility?

Later, we follow the bouncing story of the news media's fixation with John Kerry's poll numbers.

(COMMERCIAL BREAK)

WOODRUFF: As we've been reporting, President Bush today came out in favor of two of the 9/11 Commission's top recommendations: the creation of a National Intelligence Director, and a Counterterrorism Center. But do commission members feel the president and the Congress should be doing more?

Here now, CNN Congressional correspondent Ed Henry.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): 9/11 Commissioners believe President Bush took a strong first step, but they urged Congress to act quickly, especially in the wake of the latest warnings of terrorist attacks.

TIMOTHY ROEMER, 9/11 COMMISSION MEMBER: I can't think of a higher priority than implementing some of these reforms quickly and smartly and efficiently. Al Qaeda is not on a vacation schedule.

HENRY: Even before the threat level was raised, 9/11 Commission Chairman Thomas Kean spoke of the imminent danger. He testified Friday at the first of a slew of rare summer hearings on Capitol Hill.

THOMAS KEAN, 9/11 COMMISSION CHAIRMAN: It is an emergency. There's an enemy out there who is planning, as we meet here, to attack us.

HENRY: Commissioners will start hitting the road nationwide Tuesday to whip up support for their proposals. Since it's an election year, they want to keep the heat on lawmakers.

ROEMER: Well, I would strongly encourage the Congress to work in a bipartisan way to get a number of these recommendations, many of which are not new, implemented and protect this country so that they -- when they run for reelection in November, they can run with a good conscience, fulfilling their job description and job responsibilities to defend and protect this great country.

HENRY: Democratic nominee John Kerry wants Congress called back for a special session to follow up hearings with legislative action this month. The president disagrees.

BUSH: Congress has been thinking about some of these ideas. They can think about them over August and come back and act on them in September.

HENRY: The president prodded Congress to improve its own handling of intelligence rather than simply shaking up the executive branch.

BUSH: There are too many committees with overlapping jurisdiction which waste time and makes it difficult for meaningful oversight and reform.

(END VIDEOTAPE)

HENRY (on camera): House Democratic Leader Nancy Pelosi slammed the president, saying it shouldn't have taken him three years to create the National Director of Intelligence. And she once again called on Congress to get back into session.

But Republican leaders much prefer to just have hearings for now. In fact, the last time a special session was called was in 1994, that summer, to deal with the Clinton healthcare reform. 9/11 Commissioners say they obviously hope the reform effort is much more successful on this matter. As you remember, the healthcare bill crashed and burned.

WOODRUFF: Not a great contrast.

HENRY: Exactly.

WOODRUFF: Ed Henry, thanks very much.

HENRY: Thank you.

WOODRUFF: We appreciate it.

Well, Vice presidential nominees traditionally are the presidential campaign's attack dogs. But for the Democrats these days, the loudest attacks are coming from someone who isn't even on the ticket. Coming up: Howard Dean gets rough again.

ANNOUNCER: The stories CNN is following tonight.

More hearings on the 9/11 Report. At 6:00, Senator Joe Lieberman tells why.

Anatomy of terror: At 7:00, Anderson looks at the latest terror threats and the strategy behind them.

And at 9:00...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: ... have arrested Mark Hacking for the murder...

(END VIDEO CLIP)

ANNOUNCER: ... dramatic developments in the Lori Hacking case.

Stay with CNN, the most trusted name in news.

(COMMERCIAL BREAK)

WOODRUFF: Early in the Democratic presidential campaign, Howard Dean emerged as a front-runner, partly because of his willingness to attack the Bush administration and directly criticize the president. Well, he may not have won the nomination, but Howard Dean still is on the attack.

(BEGIN VIDEOTAPE)

BUSH: The elevation of the threat level in New York and New Jersey and Washington, D.C. is a serious reminder, a solemn reminder of the threat we continue to face.

WOODRUFF (voice-over): Not everyone sees it entirely that way.

DEAN: It's just impossible to know how much of this is real and how much of this is politics. And I suspect there's some of both in it.

WOODRUFF: Howard Dean threw down the gauntlet yesterday, questioning whether the Bush administration gemmed (ph) up the terror warning to blunt positive media coverage of the Democratic convention.

DEAN: Every time something happens that's not good for President Bush, he plays his trump card, which is terrorism.

WOODRUFF: Republicans took umbrage, and so did some Democrats.

SEN. JOE LIEBERMAN (D), CONNECTICUT: I don't think anybody who has any fairness or is in their right mind would think that the president or the secretary of Homeland Security would raise an alert level and scare people for political reasons.

WOODRUFF: It's not the first time the former Vermont governor's words have made waves. Remember what he said after U.S. forces in Iraq bagged the ace in the deck?

DEAN: We're not safer today than we were before Saddam Hussein left.

WOODRUFF: That comment really only affected Dean, who was a candidate at the time. But yesterday, he was acting as a surrogate for John Kerry. And today, the nominee distanced himself from his former rival. KERRY: I disagree with his comment yesterday. It's very simple. I believe you take these threats seriously. I take them seriously. I think people of good conscience are working on these issues.

WOODRUFF: Still, Dean may have done Kerry a favor, perhaps articulating what others think, but are unwilling to say. Today, Kerry says he's keeping the doctor on his team.

KERRY: Absolutely. He's done a very, very good job. He has his opinions. I respect those opinions.

WOODRUFF: And finally, a meeting of the minds. Today's line out of Camp Dean, quote, "Senator Kerry is entitled to his opinion, and Governor Dean respects that" -- end quote.

(END VIDEOTAPE)

(on camera): So, bounce, it's a word you may have come to despise by now. Still to come, Howard Kurtz will take a closer look at why political pundits seem to be so fixated on that word.

(COMMERCIAL BREAK)

DARBY MULLANY, CNN FINANCIAL CORRESPONDENT: I'm Darby Mullany at the New York Stock Exchange.

Stocks closed modestly higher as investors shook off terrorism concerns following the latest threat against financial institutions.

The Dow Industrials rose 39 points, and the Nasdaq Composite added a quarter of 1%. Hoping to boost the market, strong earnings from Dow component Proctor & Gamble, and an upbeat reading on the manufacturing sector.

The terror alert also had little impact on oil prices: Crude oil edged to another new high, climbing two cents a barrel.

That is the latest news from Wall Street. JUDY WOODRUFF'S INSIDE POLITICS continues in a moment.

(COMMERCIAL BREAK)

WOODRUFF: Around this time, every presidential election year, political pundits love to throw around the word bounce. Did John Kerry get a bounce from the Democratic convention? Will President Bush get a bounce from his party's convention?

Howard Kurtz of CNN's "RELIABLE SOURCES" weighs in now on this bounce fixation.

(BEGIN VIDEOTAPE)

HOWARD KURTZ, HOST, CNN'S "RELIABLE SOURCES" (voice-over): It's the most overused word in political reporting these days -- seemingly more suited to baseball at Fenway than a Democratic convention in Boston. All the pundits want to know: Did John Kerry get a bounce?

UNIDENTIFIED FEMALE: Very quickly, how big a bump do you think that the Kerry/Edwards ticket will get?

SCHNEIDER: What's the bounce? What's the bounce?

CHRIS MATTHEWS, HOST "HARDBALL": Five points is my marker. Will it go up five?

ANDREA MITCHELL, NBC CORRESPONDENT: Minimum five. I would say five to seven or eight.

UNIDENTIFIED MALE: I agree with Andrea.

MATTHEWS: Five to plus.

UNIDENTIFIED MALE: Five plus.

MATTHEWS: Your guess here?

UNIDENTIFIED MALE: About five.

KURTZ: And when a "Newsweek" poll showed Kerry with a seven- point lead over President Bush, the Sunday talk shows pounced.

TIM RUSSERT, HOST, "MEET THE PRESS": John Harwood, not a huge bounce. It's being called a baby bounce.

KURTZ: So, what's with the bounce obsession? The "Los Angeles Times" says, "A good convention gives its candidates a measurable bounce in public opinion. A bad convention ends with no bounce at all."

Now, a CNN/"USA TODAY"/Gallup poll shows Bush/Cheney leading Kerry/Edwards by four points. So, was Boston a bad convention?

The problem with these snap judgments is that there are so few undecided voters in this polarized election year that Kerry didn't have much room to bounce. Fewer people watch conventions now than in decades past because ABC, CBS, and NBC have all but bailed out. And it can take time for impressions to harden after a convention, as voters watch the soundbytes being replayed, read the news stories in the columns, and check out the Kerry television ad based on his acceptance speech.

(on camera): The media's fixation with polls can lead to embarrassment. Remember when surveys showed Howard Dean as the certain Democratic nominee? It's also possible Kerry won't get a boost from Boston, and Bush won't get a bump from New York.

No bounce? The absence of bounce? That could leave us in the press feeling rather deflated. Howard Kurtz, CNN's "RELIABLE SOURCES."

(END VIDEOTAPE) WOODRUFF: And we will bounce right out of here. That's INSIDE POLITICS for this Monday. I'm Judy Woodruff. "CROSSFIRE" starts right now.

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


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