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Inside Politics

Questions About Bush's Military Service; A Look at Senate Horse Races; Congress 12 Years After 'Year of the Woman'

Aired September 09, 2004 - 15:30   ET

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


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


(BEGIN VIDEOTAPE)
ANNOUNCER: President Bush on guard, as more people come forward to question his military service three decades ago.

UNIDENTIFIED MALE: I feel that it's my duty to stand up and tell my story for the American people to make a decision.

UNIDENTIFIED MALE: Their strategy is now that President Bush is ahead in the polls and we're going to try to bring him down.

ANNOUNCER: A tale of two economies.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: George W. Bush chose a great big tax cut for the people -- literally, I mean, 30 percent of this thing went to people earning more than a million bucks.

GEORGE W. BUSH (R), PRESIDENT OF THE UNITED STATES: Because of the tax relief, the middle class is paying less in federal taxes.

Top Bush and Kerry economic advisers will join us to explore the bottom line.

Uphill battles. We'll find out who's gaining or losing momentum in the fight for the Senate.

(END VIDEOTAPE)

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

JUDY WOODRUFF, HOST: Thank you for joining us.

Like the Swift Boat controversy that dogged John Kerry, the flap over President Bush's military service seems to have taken on a life of its own. And just as the Kerry camp pointed a finger on that at the president, White House spokesman Scott McClellan today accused Kerry and his surrogates of coordinating attacks on Bush's record in the National Guard.

The Kerry camp denies that. The fire is being fueled by new on- the-record statements, as well as newly released documents.

(BEGIN VIDEOTAPE) WOODRUFF (voice-over): Two questions endure about George W. Bush's service in the Air National Guard. The first is, how did he get in? A Texas politician is talking publicly for the first time about how he pulled strings for Bush.

BEN BARNES, FMR. TEXAS LIEUTENANT GOVERNOR: I was readily willing to call and get those young men into the National Guard that were friends of mine and supporters of mine, and I did it.

WOODRUFF: Former Texas House speaker and lieutenant governor, Ben Barnes, a Democrat supporting John Kerry, told CBS' "60 Minutes" he called ahead in 1968 at the request of a Bush family friend. Bush's father represented then Houston in Congress.

BARNES: I would describe it as preferential treatment. There were hundreds of names on the list of people wanting to get in the Air National Guard or the Army National Guard. I think that would have been a preference to anybody that didn't want to go to Vietnam, that didn't want to leave.

WOODRUFF: It's the same story Barnes told in a closed-door deposition five years ago. Then Governor Bush said he was unaware of any help.

BUSH: I don't know if Ben Barnes did or not. But he was not asked by me or my dad. I could just tell you that, from my perspective, I never asked for, and I don't believe I received any special treatment.

WOODRUFF: The Bush campaign has stuck to that line ever since. But a professor who taught Bush at Harvard Business School in the early '70s has written a letter to his local newspaper saying Bush "admitted to me that to avoid a Vietnam draft, he had his father's friends skip him through the long waiting list of the Texas National Guard."

Which leads to the second lingering question: How did Bush perform in the Guard? Records first obtained by The Associated Press, which sued the Pentagon to get them, showed that Bush ranked in the middle of his flight training class in 1969. But Bush was eventually suspended from flying the F-102 in August 1972.

Newly unearthed documents from the personnel file of a commanding officer reveal Bush not only missed a required physical exam but he made no attempt to meet his training certification. The accusation that he was a no-show for duty has applied mainly to Bush's 1972 transfer to a Guard unit in Alabama, where he worked on the U.S. Senate campaign of a family friend. It is revived in a TV ad to run in several battleground states.

ROBERT MINTZ, NATIONAL GUARD VETERAN: We had a relatively small unit, maybe 20 to 30 pilots there. And -- which I attended the unit drills multiple days per months for a great number of years, including the year 1972. And I never had the privilege of meeting Lieutenant Bush.

WOODRUFF: Official records show a five-month gap in his pay for drills. Democrats are pressing the attack.

SEN. TOM HARKIN (D), IOWA: Americans deserve to know the truth. And we won't know the whole truth until the president himself meets these facts head-on.

WOODRUFF: The White House says, if the president broke the rules, he wouldn't have receive and honorable discharge in 1973.

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: People who are calling themselves experts, who actually have partisan differences, who are supporting President Bush's opponent, who are throwing these allegations, the fact of the matter is President Bush met his obligations.

(END VIDEOTAPE)

WOODRUFF: And a final note. When Bush was discharged to go to Harvard Business School, he was obligated to serve another year in the Air Force Reserves. But there is no record he sign up with a selective reserve unit in Boston. Instead, the White House says Bush registered as an inactive reserve in the Air Force in Denver.

Both George W. Bush and John Kerry are trying to stay out of this fray over the president's National Guard service, letting their allies do the talking for them. In Pennsylvania today, Bush told voters his economic plans will expand opportunities for small businesses and regular people, while Kerry's proposals will only expand government.

In another showdown state, Iowa, Kerry accused Bush of being out of touch with working families. And he talked up his plan to lower healthcare costs, charging the president has ignored the problem. We'll have full reports on both candidates ahead.

Well, let's talk about the issue that most voters say matters the most to them, the economy, with a member of the Bush cabinet, Treasury Secretary John Snow.

Secretary Snow, it's good to see you. Thank you very much for joining me. Can you hear me? Secretary Snow, are you there?

JOHN SNOW, TREASURY SECRETARY: I hear you.

WOODRUFF: OK. You're there. I just wanted to be sure. Thank you.

First off, Federal Reserve Board chairman Alan...

SNOW: I don't hear your show, though.

WOODRUFF: All right. My apologies. We're going to try to get the sound, the audio fixed with Secretary Snow and get right back to him as soon as we can.

SNOW: Well, meantime, John Kerry today responded to Dick Cheney's recent comments that America could "get hit again by terrorists" if voters make what Cheney called the wrong choice on Election Day. Kerry told The Associated Press, "George Bush and Dick Cheney are engaging in shameful and irresponsible and outrageous behavior in trying to play the politics of fear and exploit the war on terror."

We'll have more reaction to Cheney's remarks and some other tough talk ahead in the headlines in our "Campaign News Daily."

Former Vice President Al Gore weighed in on Cheney's comments. And John Kerry's wife, Teresa Heinz Kerry, addressed a separate issue with a blunt remark of her own. Gore this morning described Cheney's comments as "a sleazy and despicable effort to blackmail voters with fear."

Mrs. Kerry, meanwhile, defended her husband's healthcare plans yesterday to Pennsylvania's "Lancaster Journal." She told the reporter, "Only an idiot wouldn't like this."

The Kerry campaign and the Democratic Party appear to be scaling back their TV add buys in certain states, at least for now. The DNC today started running this ad in 14 of the so-called battleground states. The Associated Press notes, however, that the Kerry campaign and the DNC have stopped airing commercials, at least temporarily, in several other battle grounds, including Missouri and Arizona.

Two familiar faces are taking new jobs as advisers to RNC chairman Ed Gillespie. Bush campaign spokesman, Terry Holt, a frequent guest on this program, and other CNN programs, moving over to the RNC to become a senior adviser to Gillespie.

Author and former White House speechwriter Peggy Noonan is joining the RNC, too. She'll be also be a senior adviser to the chairman.

Well, once again, let's try to get that interview under way with Treasury Secretary John snow.

Can you hear me now?

SNOW: I hear you.

WOODRUFF: All right. Our apologies for the sound problem just a few seconds ago. We thank you for your patience.

Federal Reserve Board chairman Alan Greenspan was before the Congress yesterday. He said, with oil prices coming down for the time being, he said the economy has regained some traction. But this comment on his part has now enforced the view that the Fed is very likely to raise interest rates when it meets 12 days from now. Higher interest rates, is that comfortable -- something your administration is comfortable with, Secretary Snow?

SNOW: Well, Judy, I don't comment on the Fed's interest rate policies. We respect the independence of the Fed. But I would observe that rising interest rates are consistent with an economy that's recovering and getting stronger.

WOODRUFF: So, you're comfortable? I mean, in other words, you're comfortable with them?

SNOW: Well, every recovery that we've observed experiences some rise in interest rates. And as the economy's gotten stronger over the last year, we've seen that interest rates have -- tended up some. And that validates the fact that a recovery is going on.

WOODRUFF: All right. Let's talk about the jobs picture.

We know the latest tally shows it's just a little under a million jobs lost since George W. Bush took office. And recently, we're told an average of a little more than 100,000 jobs have been created per month over the last three months.

It's an improvement, but you and I both know that's, what, about half of what the president's Council of Economic Advisers was predicting at the first of this year. So, what do you say to people who are looking for work when you see the number isn't what you were expecting?

SNOW: Well, we've had 12 straight months now of job creation, and a 1.7 million jobs created over that period, with the unemployment rate coming down pretty -- pretty smartly, marching down from 6.3 to 5.4. And now, in, oh, 49 of the 50 states, the unemployment rate is lower today than it was a year ago. But that's not good enough. We acknowledge that we're not going to be satisfied until everybody who's looking for a job gets a job.

Judy, there was a pause back in May and June that slowed the strong growth we saw in the first quarter, and the preceding three quarters. Now I think we're back on track. I think we'll see third quarter growth much stronger, and I think that will lead to even stronger job growth.

WOODRUFF: Different question. President Bush and others in the administration often criticized John Kerry for being a big spender. But the president in his acceptance speech at the convention listed something like 15 different programs that he promised to either create or expand if he's elected to a second term, things like a tax credit for small businesses that set up health savings accounts, more funding for community college, tax relief for businesses that go into poor communities, and so on and so on -- social Security private accounts.

Where this is money going to pay for this going to come from, Secretary Snow, when there's already over a deficit of $420 billion?

SNOW: Well, Judy, the -- the -- all those initiatives are going to be done within the larger commitment of the president to cut the deficit in half over the course of the next five years. We acknowledge that the current deficit's too large, it's unwelcome.

It's understandable, in light all the economy's been through, the recession and 9/11, and so on. But we're not happy with it. Deficits matter. And the president's committed to cutting this deficit in half, bringing it to a level in five years that will be low by historical standards.

WOODRUFF: But these programs are going to cost in the hundreds of billions, some would say trillions in the years to come.

SNOW: Well, all of those programs will be accommodated within that larger commitment to cut the deficit in half. And there are only two ways to deal with the deficit.

One, is a growing, expanding economy that's creating jobs, and therefore creating more government receipts. We see that happening already. The government receipts are on a good path, a much stronger path now that the economy is growing.

But that's not enough. You also have to watch spending.

WOODRUFF: We're going to...

SNOW: And the president's budget that was sent up to the Congress this year is one of the tightest budgets in years in terms of constraining discretionary spending.

WOODRUFF: We're going to have to leave it there. I hate to interrupt, but I hope we can talk to you again before this campaign is done. Treasury Secretary John Snow, good to see you.

SNOW: Hey, thank you. Good being back with you.

WOODRUFF: Thank you.

I think few people would dispute that President Bush and Senator John Kerry offer very different economic visions. Up next, the Kerry camp's take from former Deputy Treasury Secretary Roger Altman.

Also ahead, we're going to put all the latest polls together to get a big picture of the presidential race.

Plus, more on George W. Bush's record in the Air National Guard. Donna Brazile and Bay Buchanan will have at it.

With 54 days until the election, this is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: We just heard from the current Treasury secretary. Now, for a Democrat's perspective on the nation's economy, I'm joined from New York by Roger Altman. He is an adviser to John Kerry and he was deputy Treasury secretary in the Clinton administration.

And he's working on his ear piece. And once he gets it all set, we're going to talk to him.

Roger Altman, are you able to hear me now? Roger Altman, are you there? Roger Altman, do you have it?

Can you hear? Is that ear piece working?

We've got a gremlin in the -- in the audio system today. Roger Altman, you there? OK. We've got to -- we're going to fix this one, we promise. We'll be right back.

(COMMERCIAL BREAK)

WOODRUFF: We're going to get to Roger Altman, adviser to the Kerry campaign, in just a moment. Working on getting that audio fixed.

But right now, we want to turn to something different. The presidential race isn't the only close contest of the '04 election season. Several Senate races are coming down to the wire with a balance of power and that body at stake.

Stu Rothenberg, of the Rothenberg Political Report joins us now, a good friend of this program.

Stu, first of all, how is the presidential race right now affecting some of these tight Senate races?

STU ROTHENBERG, ROTHENBERG POLITICAL REPORT: First, I have to tell you, you're coming across loud and clear to me, Judy.

WOODRUFF: I'm grateful for that.

ROTHENBERG: I think the presidential race can have an impact largely because these Senate contests are in very Republican and conservative states. So, to the extent that the president builds up some momentum, or the presidential contest infects downed (ph) ballot races in very partisan terms in state after state, state races -- federal races in states are seen in Republican or Democratic terms -- that's a problem for the Democrats.

Look, Democrats can run -- can run ahead of John Kerry. Tom Daschle is going to run ahead of John Kerry in South Dakota. The question is, how far does he have to run? The same thing goes in South Carolina and Oklahoma and Colorado.

WOODRUFF: You're saying it just makes their job harder.

ROTHENBERG: Just harder, yes.

WOODRUFF: All right. President Bush was in Florida yesterday. We know that he and John Kerry are spending a lot of effort in that state. But what about the Senate race in Florida?

ROTHENBERG: Well, there is a Senate race going on. But how do you run? How do you run if the state is having hurricane watch after hurricane watch? In fact, neither Mel Martinez nor Betty Castor, the Republican or Democratic Senate candidates, are on the air now. There was a recent Democratic poll, (INAUDIBLE), for the Democrats having Castor up by four points, with 48-44.

But the race is basically in suspension until the candidates can start to articulate themes. They're not going to do that while people are worried about their homes and their life. These politicians are not going to act like politicians.

WOODRUFF: And there may be another hurricane coming. So...

ROTHENBERG: That's right. So, it really delays the race, it shortness the race.

WOODRUFF: All right. Some of the other races that we should be watching, Stu?

ROTHENBERG: Well, certainly Oklahoma. There's a new Democratic poll, West Hill Partners, a Democratic firm that chose Brad Carson ahead with two points over former Congressman Tom Coburn. This is a very tough race. Two really strong candidates.

The Democrat, Carson, comes from the eastern part of the state, but he's trying to make a play for normally Republican voters in the western half of the state. I think Coburn is very well positioned. But two very good candidates -- it's going to be close.

And the other race I wanted to mention was Alaska, where there's a new poll, Ivan Moore, a media poll, but he's really a Democratic pollster. The Democrats sent out a press release saying Tony Knowles continues to lead. He's got an advantage in the most recent poll, up by I think nine-tenths of one percent.

Talk about splitting hairs. It's about a one percentage point lead.

This race has been tight for months. I expect it to continue to be tight. Murkowski has a new radio attack ad on, attacking Knowles on fisheries and his position that she says will hurt fisheries.

I think this race is going to go down to the wire. Voters really haven't decided on -- at least on Murkowski yet because of her father.

WOODRUFF: Our family spent our vacation in August in Alaska, and there's a lot of interest up there. We saw -- we saw yard signs for Murkowski and Knowles everywhere we looked.

ROTHENBERG: They don't often have races up there. So, this is a big one.

WOODRUFF: This is a big one.

ROTHENBERG: Yes.

WOODRUFF: Stu Rothenberg, thank you very much.

ROTHENBERG: Sure.

WOODRUFF: Well, as we promised, we're going to hear the Democratic side of that economic debate now with Roger Altman. He is a former deputy Treasury secretary now advising the John Kerry campaign.

First of all, Roger Altman, on that point that I raised with Secretary Snow about Alan Greenspan's comments that the economy does seem to be picking up some traction, there are jobs being created. Doesn't this make it even harder for John Kerry to make economy an issue?

ROGER ALTMAN, FMR. DEPUTY TREASURY SECRETARY: I don't think so, Judy, because the acid test of any record, economic record, is jobs on the one hand and family incomes the other. And since Mr. Bush took office, jobs are down, not up. And even more importantly, family incomes are down, not up.

Now, they like to say -- and Secretary Snow did -- that they took a lot of hits, the bursting of the tech bubble, the corporate scandals, the mysteriously described Clinton recession. So, the answer to that is to look at how they've done since the recovery started.

And the National Bureau of Research says it started in November of '02. Since it started, slowest growth rate in a recovery in 70 years, worst job creation rate or job destruction rate in 70 years, family incomes down, not up.

Then they like to say, as President Bush did a few weeks ago, and Don Evans is doing, Bush says we've turned the corner. And Evans says, best economy of my lifetime. Well, let's take the last three months then.

In the last three months, they haven't created jobs sufficiently to keep up with even the population growth rate. So, the percentage of Americans working even in the last three months is down and not up.

Let's look at incomes in the last three months. Well, they're down and not up.

So, whether you measure their record over the four years, since the recovery started, the last three months, jobs are down, incomes are down. Those are the acid tests. They're trying 5,000 ways to get around that, to avoid talking about it. You didn't hear a word about it at Republican convention, but that's the bottom line.

WOODRUFF: OK. I may be throwing you a curve here, but I want to ask you about something that John Kerry said this last few days.

He talks about linking the cost of the war in Iraq with the need to spend more money on domestic priorities, like healthcare and education and so forth. He's going after the Bush administration for spending so much money in Iraq.

But it was just a little over a year ago that Kerry said in an interview on "Meet the Press" -- he was asked about whether spending for Iraq should be increased. And he said, yes "by whatever number of billions of dollars it takes to win." Isn't he contradicting himself now?

ALTMAN: I don't think so, Judy. The point on Iraq -- and it's a not my area, actually. But the point on Iraq is competence or incompetence. You know, Senator Kerry voted to authorize the war an Iraq, and said again recently he would do it again knowing what he knows now. But he didn't vote for incompetence, and that's what we've received.

And the $200 billion that has been spent so far has been spent poorly. We know the conditions on the ground now in Iraq. We just all read the news. We know that the death and wounded rates on American soldiers have been going up and not down.

This is many months after Mr. Bush landed on the aircraft carrier with that flight suit and said, "Mission accomplished." Authorizing the use of force was right. Voting for incompetence is not what Senator Kerry did, but that's what we got.

Now, the point really here is they've made the wrong choices. If you measure what we spent in Iraq compared to what we could have done, President Bush has allowed healthcare costs to rise 56 percent since he took office, tuition costs have risen 35 percent since he took office. Energy costs are up over $1,000 a family since he took office.

That's why it's harder for the average American family to make ends meet since he took office. And the two overarching duties of a president are to protect the country and to pursue policies which will allow standards of living to rise.

The generational promise of this country is to leave the next generation in better shape than the current one founded. And that's not what's happening under President Bush -- on President Bush's watch because he made the wrong choices.

WOODRUFF: We're going to have to leave it there. Roger Altman is an adviser to the John Kerry campaign, formerly deputy secretary of the Treasury.

Thanks very much. And again our apologies for the audio problems we were having.

ALTMAN: Thank you, Judy.

WOODRUFF: We appreciate it.

Just ahead, we're going to take to you the nation's battlegrounds for updates on candidates Bush and Kerry.

Also, who has the momentum in this race for the White House? Our Bill Schneider takes a poll of polls.

And we'll find out how Americans view the potential for new acts of terrorism as we approach the anniversary of the 9/11 attacks.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: It's the story we're talking about but they're not. So, what are George Bush and John Kerry talking about today?

Do we finally have a front-runner in the race for the White House? Our Bill Schneider sifts through the latest polls.

The women of Capitol Hill. Which female lawmakers are rising stars and which are fighting for their political lives.

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

(END VIDEOTAPE)

WOODRUFF: Welcome back. George W. Bush and John Kerry have at least this much in common, both of them today trying to steer clear of the campaign controversy of the day, preferring to talk about issues they believe voters care about. But it is difficult for either side to completely ignore renewed questions about the president's military service in the 1970s. Our White House correspondent Dana Bash is with Bush in Pennsylvania.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: This is the president's 36th trip to the state of Pennsylvania, a state he lost last time and wants to win so badly it's his third visit already just this month.

The president barely started his speech in suburban Philadelphia when he was interrupted not once but twice by protesters. They were escorted and one was even, we're told, a Bush volunteer at a meeting with Bush volunteers the night before.

Now, this is something that has happened to John Kerry but rarely happens to President Bush because the people who come to his campaign events are very tightly screened. Once he did get started the president focused on economic and pocketbook issues more than he usually does.

Mr. Bush talked about some of the domestic proposals that he first proposed at his convention like healthcare, savings accounts, job training, and tax cuts.

And Mr. Bush tried to some of the moderate Republicans who live here in these Philadelphia suburbs, those who voted last time for Al Gore and the way he tried to appeal to them by framing the debate this way that he is somebody who is going to keep government regulation down and tax cuts down while John Kerry is somebody he says who wants to raise government regulation and also raise their taxes.

BUSH: If you drive a car, Senator Kerry's voted for higher taxes on you. You have a job, he's voted for higher taxes on you. If you're married or have children, he voted for higher taxes on you. The good news, on the second of November you have a chance to vote.

BASH: If you look at the latest CNN poll on how the president is faring in Pennsylvania, you know why he's talking about economic issues here. When it comes to terrorism, the president has a huge lead among Pennsylvania voters. He's winning 60-33 percent against John Kerry but he trails on the economy. He gets only 43 percent to Senator Kerry's 51 percent.

That's why the Bush campaign is pushing domestic issues also to appeal to some of the middle-class voters that Senator Kerry thinks he has an in with, particularly on issues like healthcare.

The Bush campaign is trying not to get knocked off their message by new questions and new allegations that the president did not fulfill his duty in the National Guard 30 years ago and also questions of whether or not he actually did get preferential treatment because of his famous last name even though he has repeatedly said that he has not.

Now Democrats are not letting up on this. They say this is simply an issue of credibility. But the Bush strategy is to answer these questions as soon as possible when documents become available through the media, to release also to the White House and give interviews to answer questions as quickly as possible to try to put a rest to them.

Also, the Bush campaign says, important for them to point out that they think that this is all politically motivated, recycled charges because the Democrats think that the president is doing better, they need to try to knock him down a bit and the White House spokesman Scott McClellan even put the blame for all this squarely on John Kerry, saying that it is John Kerry and his surrogates who are coordinating these new attacks on the president.

Dana Bash, CNN, Colmar, Pennsylvania.

(END VIDEOTAPE)

WOODRUFF: Now, let's look at the Kerry campaign and CNN's Ed Henry. He's with the senator in Iowa.

(BEGIN VIDEOTAPE)

KERRY: This is my second home.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): John Kerry returned to Iowa, where he started his astonishing comeback in the primaries. He returned now to kickstart his struggling general election campaign.

KERRY: George W. Bush chose a great big tax cut for the people literally. About 30 percent of this thing went to people earning more than a million bucks. And we're telling kids and families we're cutting your after-school program. That's W. Wrong choice, wrong direction, wrong leadership for this country. And that's what we're going to change.

HENRY: While Kerry's allies ramp up their attacks on President Bush's service in the National Guard, the candidate is dodging questions about the controversy.

UNIDENTIFIED FEMALE: Did President Bush fulfill his National Guard obligations?

HENRY: But Kerry could not stop talking about his healthcare plan in Des Moines.

KERRY: If you make me president of the United States, on day one, within whatever number of hours I'm allowed to do it, I am sending a bill to Congress to provide affordable accessible healthcare to all Americans. Number one priority.

HENRY: After the Swift Boat controversy and Kerry dropped in the polls, Democrats like Bill Clinton wanted the senator to focus less on Vietnam and more on domestic issues like two new ads unveiled by Kerry in Pennsylvania while the president campaigned in that battleground state.

AD ANNOUNCER: John Kerry, a real plan to strengthen Medicare and lower healthcare costs.

HENRY: While Kerry tries to stay positive, other Democrats are slinging mud.

HARKIN: This is about George Bush not doing his duty in the National Guard and then lying to the American people about it.

HENRY: Vietnam came up briefly in Kerry's town hall meeting and it turned into a light moment. A woman praised the candidate for saving people in war and rescuing a hamster in the Kerry home which was recounted at the Democratic convention.

UNIDENTIFIED FEMALE: It's a stark contrast because if you watched it, you know from the Bush twins, that the Bush hamster did not make it.

KERRY: Is that a metaphor or a prophesy?

HENRY: The Kerry camp says it has nothing to do with the Texans For Truth ads which accuse the president of being AWOL. But Bush advisers charge that this attack has been coordinated with Kerry. Republicans note that the senator spent days denouncing the Swift Boat ads but thus far silent about the anti-Bush ones. Ed Henry, CNN, Des Moines, Iowa.

(END VIDEOTAPE)

WOODRUFF: The group calling itself Swift Boat Veterans For Truth is pressing on with it's ad campaign. It says it will spend $680,000 for a week-run long on national cable TV beginning tomorrow. The ad buy features a previously released spot attacking Kerry for renouncing his Vietnam War medals.

As we reported, the Bush camp says the new dust up over the president's record in the military is a response to his rise in the polls. We now have a clearer picture of the lift Bush got from his convention thanks to several new surveys. Our senior political analyst Bill Schneider has been crunching the numbers.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Where does the presidential race stand? For that we do a poll of polls. Two national polls interviewed registered voters after the Republican convention ended. The CNN/"USA Today"/Gallup poll shows a near tie.

The CBS News poll shows Bush with an eight-point lead. "TIME" and "Newsweek" polled at least some voters during the convention. "TIME" has Bush ahead by eight. "Newsweek" has Bush leading by 11.

Very different leads for Bush. But in three of the four poll President Bush's support is right around 50. Every poll shows President Bush gaining support since July or August.

Some polls screened for likely voters. In the CNN/"USA Today/Gallup poll, Bush's lead among likely voters grows to seven points and from eight to ten points in the "TIME" poll. Only the Fox News poll shows a close race among likely voters but that poll, too, shows a gain for Bush since the convention.

Bottom line? Every national poll shows Bush gaining and every national poll shows Bush now ahead, though sometimes by a narrow margin. There have been polls in eight states either during or since the Republican convention. Let's look at three battleground states Bush carried in 2000.

Missouri went for Bush by three points in 2000. A post- convention poll shows Bush leading by 14. Last time, Bush won Ohio by four. He's now ahead by eight. Arizona gave Bush a five-point lead in 2000. He's now ahead by 16. Three red states getting redder.

Now, let's look at some states that voted for Al Gore in 2000. Pennsylvania gave Gore a 4-point victory. The latest Pennsylvania poll has Bush ahead by 1.

New Jersey gave Gore a whopping 16-point victory over Bush. A new poll shows Kerry's lead shrinking to just 2.

Oregon was a squeaker last time, Gore by a half a percent. It's still a squeaker, Bush up by 1.

New Mexico was also a squeaker in 2000. Gore won by less than a tenth have of a percent. Now Bush leads by 3.

Four blue states now in doubt. But Democrats are holding on pretty well in Washington State. Al Gore won Washington by 6 points. Kerry is now 8 points up.

(END VIDEOTAPE)

SCHNEIDER: Bush clearly has momentum coming out of his party's convention. And for the first time all year, it's fair to say this campaign has a front-runner -- Judy.

WOODRUFF: OK. Thank you, Bill Schneider. We appreciate it. We can put a label on it. John Kerry is accusing Vice President Cheney of playing the politics of fear. Up next, finds out what Bay Buchanan and Donna Brazile have to say about Cheney's controversial remarks about Kerry and the war on terror.

Also ahead, female candidates in 2004, have they made much progress since the famous "Year of the Woman" over a decade ago?

(COMMERCIAL BREAK)

WOODRUFF: Turning to Afghanistan and the al Qaeda network, a new videotape has surfaced today, including comments by -- allegedly by a top lieutenant to Osama bin Laden, Ayman al-Zawahiri. For the very latest on what's in this tape and what it may mean, let's turn to our own Nic Robertson who, of course, reported for CNN in Iraq and in Afghanistan.

Nic, what do we know about this tape, is it something that's credible and if it is, what does it suggest?

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: It does appear to be credible, Judy, because it shows Ayman al-Zawahiri. This is the first time in 2 1/2 years that we have seen a videotaped statement by one of the al Qaeda leaders.

So it does appear to be Ayman al-Zawahiri. We haven't heard it enough yet to know exactly when it was recorded. It refers to Iraq and Afghanistan specifically, specifically addressing issues relating to U.S. forces, U.S. policy. They're saying that in Iraq, that the mujahedeen, the holy warriors have turned the U.S. policy in Iraq upside down. Saying that in Afghanistan, in the south and east of Afghanistan, the mujahedeen, the holy warriors have U.S. troops hiding in their trenches, that the mujahedeen are able to move at will in Afghanistan.

He goes on to say that now the United States is caught between two countries, caught between two fires, he says. That this means that now they're going to bleed to death. That's one way they can lose, and if they pull out again, he says, they lose everything.

Perhaps the significance of this message is that al Qaeda has managed to release a videotape showing one of its leaders speaking right around the anniversary of September 11th . They like to do this every year, make special releases on the anniversary of September 11th . They appear to have done it this year, perhaps going a little bit further than in the last two years -- Judy.

WOODRUFF: And very quickly, Nic, there are 18,000 American troops in Afghanistan. So people are going to be looking to these comments to see how they square with what's going on on the ground.

ROBERTSON: Well, having been there relatively recently, it doesn't square with what's happening on the ground. The troops are in south and eastern Afghanistan. It is the most dangerous portion of Afghanistan for U.S. troops at this time. But the U.S. troops go out, that we saw, on daily patrols. They go into remote villages. They knock on doors to find out if they can get information on the whereabouts of Osama bin Laden and al Qaeda leaders.

The picture that this statement tries to portray is that the United States is on back foot in Afghanistan. That's not what we saw. But certainly, this is a very dangerous area.

Senior security officials say that the Taliban are able to move in very significant numbers, several hundreds at a time are able to move at will through that region -- Judy.

WOODRUFF: All right. We're going to leave it there for now. Nic Robertson, thank you very much. But there will be more on this story coming up at 5:00 Eastern on "WOLF BLITZER REPORTS." Thanks very much.

And as we get closer to the three-year anniversary of the 9/11 attacks, the latest CNN/"USA Today"/Gallup poll gauges how Americans view the terror threat today: 43 percent of those polled say they are worried that they or someone in their family will become the victim of terrorism; 57 percent say they are not worried. When asked if Americans have permanently changed the way they live since the attacks: 52 percent said yes, 46 percent said no.

And as for Osama bin Laden, 66 percent said they believe it's likely that the U.S. will capture or kill the al Qaeda leader, 31 percent said it is not likely.

Well, with us now, former Gore campaign manager Donna Brazile and Bay Buchanan, president of American Cause.

Bay, let me turn to you first on what the vice president said a couple of days ago about in essence saying that if you vote the wrong way, in his mind, if you vote for John Kerry and John Edwards, the likelihood of a terror attack is greater.

BAY BUCHANAN, PRES., AMERICAN CAUSE: There's no question in my mind, and I think also in the vice president's mind considering what his spokesperson said, that it was a poor choice of words. In this heated rhetoric of political general election, he really did misspeak. And I think what he was trying to say, basically, is if John Kerry had his ways in the 20 years of the Senate, when he opposed all of those military systems, that today we would not be as strong as we are against terrorism. And so I think that the point is there, a good one but he misspoke.

DONNA BRAZILE, CNN CONTRIBUTOR: Well, he went over the line. And I'm glad Bay acknowledged that. Look, the truth is, Judy, if we lose our resolve to find and capture Osama bin Laden then we will be hit again. If we lose our resolve to fund homeland security, we will be hit again. If we lose our resolve to complete what we're doing in the war on terror, we will be hit again. To cast aspersions on John Kerry was wrong, it was over the line and I'm glad Bay and other Republicans -- and the president should distance himself as well. WOODRUFF: Let's talk about the polls. We just had a poll of polls, Bill Schneider analyzing what's going on. He pronounced George Bush the front-runner. Is that how you see it?

BUCHANAN: That's very, very clear. You know, it's -- one thing that is very tough in an election is when your opponent, in this case, if you're looking at George Bush, the momentum he has is very steady, it's not (UNINTELLIGIBLE) it's up and down, up and down now. It's very one-step-at-a-time, it's very focused. He has got a very aggressive, positive campaign. And I believe it's going to be hard to turn around. Kerry on the other hand is flat. He has been flat for five or six weeks now. He has an unfocused, undisciplined and angry campaign over there. And they are going to have a difficult time. I believe it's unraveling before our very eyes.

BRAZILE: Judy, there's no question President Bush had a little bounce coming out of the convention, you see that in the polls. But this election is not over. John Kerry still has an opportunity to get in there, to fight back, regain the momentum. And if the Republicans would like to gloat and call this race over with, then let that happen. But I think the Democrats know that they have to fight harder and make them win this election.

WOODRUFF: Very quickly, the new information surfacing, some of it new about President Bush's service in the National Guard, is this going to hurt him, Bay?

BUCHANAN: Not at least. And in fact, I'd be delighted to see the Democrats want to talk about this maybe for a couple of more weeks. This is foolhardy. They need to get focused. The people in this country have already decided that George Bush is a far stronger commander in chief than they believe John Kerry will be. And if they don't think John Kerry can handle the two issues of terrorism in Iraq, they will not vote for him. And so they can go and talk about something that happened 20-30 years ago all they want.

BRAZILE: Well, I'm not flaming this issue at all, but I do believe that the president has to answer some of the questions that are being raised as a result of this new information that is being released from the Pentagon.

Look, he said he fulfilled his service, all these papers and other allegations saying he did not. He needs to answer it, put it behind him and let's talk about the last 30 months of George Bush. That's when the fight really begins.

BUCHANAN: There's not much new here, there's not much new here in what's coming out. That's nonsense, Donna, and you shouldn't even suggest it is. It's old, it's boring. And we all know exactly what happened

BRAZILE: I don't know, Bay. We should see the news, we should see what it is and then he should respond. That's it.

WOODRUFF: We're going to leave it here. Donna Brazile, Bay Buchanan every Thursday and more often, when we can get you, on INSIDE POLITICS.

Thank you, both.

There is a slowly growing power group here in Washington. Coming up, Amy Walter of the "Cook Political Report" grows us -- joins us with a look at the make up of Congress, more than a decade after the "Year of the Woman."

(COMMERCIAL BREAK)

WOODRUFF: Ever so slowly, but it's happening, women are occupying more seats in Congress. Amy Walter of the "Cook Political Report" joins me now to talk about women in the U.S. House and some big races this year involving women candidates.

All right, Amy, it's been about a dozen years since what we called the "Year of the Woman." How much progress has there been?

AMY WALTER, "COOK POLITICAL REPORT": Well, it has been a very slow grind. You know, there was a big bump -- or a so-called big bump in the "Year of the Woman." Went from six percent of the Congress made up with women in 1991 up to 10 percent since that time -- since 1993. It's now 14 percent. So, it hasn't been all that impressive.

But I think the big reason is that there just are so few opportunities, and I think goes for any group trying to make gains in Congress. Whether it's minorities or women, people haven't been there consistently.

There are very few Congressional races that are open or in competitive seats. Usually a redistricting year, that's why the "Year of the Woman" was, not surprisingly, in 1992, a redistricting year. Those provide so many opportunities, open seats, people retiring are at -- record number retirements then.

Just didn't happen in 2002, so I think we're still going to see the sort of slow grind up until, you know, the next, at least, 10 years.

WOODRUFF: Who are some of the women who are serving in Congress, incumbents who are facing some tough challenges this year?

WALTER: Well, the good news for women in Congress is that, since there aren't as many of them, there aren't as many targets. But -- and they also seem to be holding on quite well, too, especially in the Senate. And in the House, they've been holding their own.

Two Republicans who are always in tough fights -- Heather Wilson down in New Mexico, in Albuquerque. It's a very much of a swing district. Obviously going to be targeted in this presidential race, battleground. Gore barely won this district by one percent in 2000.

She's held on here since '98, but she has a very well financed opponent this time. He ran against her in 2002. There are a lot of interesting parts about New Mexico voting, actually, which is that early voting's very prevalent. I think you're going to see a lot of that vote come in early, and that's going to be a big -- a big part of that. So, she has a tough race.

Anne Northup in Kentucky, Louisville area, always a tough race for her, because she sits in a Democratic district. She's fought back challenge after challenge. The question is: Has all the collective weight of those challenges weighed her down?

WOODRUFF: We're mainly talking about House...

WALTER: We're talking about House.

WOODRUFF: ... members here. There are a couple of women in the Senate facing...

WALTER: There are. I mean, they're not as -- not as as close as some other incumbents -- Patty Murray is in a competitive race with George Nethercutt...

WOODRUFF: Barbara Boxer.

WALTER: ... Barbara Boxer. But both of them are favored right now.

WOODRUFF: Finally, rising stars...

WALTER: Yes.

WOODRUFF: ... among the crop of candidates?

WALTER: Well, there are -- we're still watching them come, but one woman who I think is really going to make her mark in Congress is a woman named Debbie Wasserman Schultz. She's down in Broward County, Florida.

What's amazing is this was an open seat. Peter Deutsch just ran for the Senate, gave up this district, heavily Democratic. No one challenged her in a primary, in an open seat in a Democratic district, which says a lot about her. She's very well respected. A great -- she was in the legislature, state Senator. She has a great experience in terms of running a good, solid campaign, being a very smart, ambitious person.

I would not be surprised to see her tapped by the leadership, both as a fundraiser and a spokesperson for the party. She can do both very easily from her base in Florida.

WOODRUFF: Well, I'm sure like every other politician in Florida right now, she's focused on that hurricane.

WALTER: Right. Probably.

WOODRUFF: Let's hope they get through all that safely...

WALTER: Right.

WOODRUFF: ... as soon as possible.

Amy Walter, "Cook Political Report," we always like having you here.

WALTER: Thanks, Judy. Appreciate it.

WOODRUFF: We appreciate it.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

(STOCK MARKET UPDATE)

(COMMERCIAL BREAK)

WOODRUFF: That's it for this edition of INSIDE POLITICS on Thursday. 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


Aired September 9, 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: President Bush on guard, as more people come forward to question his military service three decades ago.

UNIDENTIFIED MALE: I feel that it's my duty to stand up and tell my story for the American people to make a decision.

UNIDENTIFIED MALE: Their strategy is now that President Bush is ahead in the polls and we're going to try to bring him down.

ANNOUNCER: A tale of two economies.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: George W. Bush chose a great big tax cut for the people -- literally, I mean, 30 percent of this thing went to people earning more than a million bucks.

GEORGE W. BUSH (R), PRESIDENT OF THE UNITED STATES: Because of the tax relief, the middle class is paying less in federal taxes.

Top Bush and Kerry economic advisers will join us to explore the bottom line.

Uphill battles. We'll find out who's gaining or losing momentum in the fight for the Senate.

(END VIDEOTAPE)

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

JUDY WOODRUFF, HOST: Thank you for joining us.

Like the Swift Boat controversy that dogged John Kerry, the flap over President Bush's military service seems to have taken on a life of its own. And just as the Kerry camp pointed a finger on that at the president, White House spokesman Scott McClellan today accused Kerry and his surrogates of coordinating attacks on Bush's record in the National Guard.

The Kerry camp denies that. The fire is being fueled by new on- the-record statements, as well as newly released documents.

(BEGIN VIDEOTAPE) WOODRUFF (voice-over): Two questions endure about George W. Bush's service in the Air National Guard. The first is, how did he get in? A Texas politician is talking publicly for the first time about how he pulled strings for Bush.

BEN BARNES, FMR. TEXAS LIEUTENANT GOVERNOR: I was readily willing to call and get those young men into the National Guard that were friends of mine and supporters of mine, and I did it.

WOODRUFF: Former Texas House speaker and lieutenant governor, Ben Barnes, a Democrat supporting John Kerry, told CBS' "60 Minutes" he called ahead in 1968 at the request of a Bush family friend. Bush's father represented then Houston in Congress.

BARNES: I would describe it as preferential treatment. There were hundreds of names on the list of people wanting to get in the Air National Guard or the Army National Guard. I think that would have been a preference to anybody that didn't want to go to Vietnam, that didn't want to leave.

WOODRUFF: It's the same story Barnes told in a closed-door deposition five years ago. Then Governor Bush said he was unaware of any help.

BUSH: I don't know if Ben Barnes did or not. But he was not asked by me or my dad. I could just tell you that, from my perspective, I never asked for, and I don't believe I received any special treatment.

WOODRUFF: The Bush campaign has stuck to that line ever since. But a professor who taught Bush at Harvard Business School in the early '70s has written a letter to his local newspaper saying Bush "admitted to me that to avoid a Vietnam draft, he had his father's friends skip him through the long waiting list of the Texas National Guard."

Which leads to the second lingering question: How did Bush perform in the Guard? Records first obtained by The Associated Press, which sued the Pentagon to get them, showed that Bush ranked in the middle of his flight training class in 1969. But Bush was eventually suspended from flying the F-102 in August 1972.

Newly unearthed documents from the personnel file of a commanding officer reveal Bush not only missed a required physical exam but he made no attempt to meet his training certification. The accusation that he was a no-show for duty has applied mainly to Bush's 1972 transfer to a Guard unit in Alabama, where he worked on the U.S. Senate campaign of a family friend. It is revived in a TV ad to run in several battleground states.

ROBERT MINTZ, NATIONAL GUARD VETERAN: We had a relatively small unit, maybe 20 to 30 pilots there. And -- which I attended the unit drills multiple days per months for a great number of years, including the year 1972. And I never had the privilege of meeting Lieutenant Bush.

WOODRUFF: Official records show a five-month gap in his pay for drills. Democrats are pressing the attack.

SEN. TOM HARKIN (D), IOWA: Americans deserve to know the truth. And we won't know the whole truth until the president himself meets these facts head-on.

WOODRUFF: The White House says, if the president broke the rules, he wouldn't have receive and honorable discharge in 1973.

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: People who are calling themselves experts, who actually have partisan differences, who are supporting President Bush's opponent, who are throwing these allegations, the fact of the matter is President Bush met his obligations.

(END VIDEOTAPE)

WOODRUFF: And a final note. When Bush was discharged to go to Harvard Business School, he was obligated to serve another year in the Air Force Reserves. But there is no record he sign up with a selective reserve unit in Boston. Instead, the White House says Bush registered as an inactive reserve in the Air Force in Denver.

Both George W. Bush and John Kerry are trying to stay out of this fray over the president's National Guard service, letting their allies do the talking for them. In Pennsylvania today, Bush told voters his economic plans will expand opportunities for small businesses and regular people, while Kerry's proposals will only expand government.

In another showdown state, Iowa, Kerry accused Bush of being out of touch with working families. And he talked up his plan to lower healthcare costs, charging the president has ignored the problem. We'll have full reports on both candidates ahead.

Well, let's talk about the issue that most voters say matters the most to them, the economy, with a member of the Bush cabinet, Treasury Secretary John Snow.

Secretary Snow, it's good to see you. Thank you very much for joining me. Can you hear me? Secretary Snow, are you there?

JOHN SNOW, TREASURY SECRETARY: I hear you.

WOODRUFF: OK. You're there. I just wanted to be sure. Thank you.

First off, Federal Reserve Board chairman Alan...

SNOW: I don't hear your show, though.

WOODRUFF: All right. My apologies. We're going to try to get the sound, the audio fixed with Secretary Snow and get right back to him as soon as we can.

SNOW: Well, meantime, John Kerry today responded to Dick Cheney's recent comments that America could "get hit again by terrorists" if voters make what Cheney called the wrong choice on Election Day. Kerry told The Associated Press, "George Bush and Dick Cheney are engaging in shameful and irresponsible and outrageous behavior in trying to play the politics of fear and exploit the war on terror."

We'll have more reaction to Cheney's remarks and some other tough talk ahead in the headlines in our "Campaign News Daily."

Former Vice President Al Gore weighed in on Cheney's comments. And John Kerry's wife, Teresa Heinz Kerry, addressed a separate issue with a blunt remark of her own. Gore this morning described Cheney's comments as "a sleazy and despicable effort to blackmail voters with fear."

Mrs. Kerry, meanwhile, defended her husband's healthcare plans yesterday to Pennsylvania's "Lancaster Journal." She told the reporter, "Only an idiot wouldn't like this."

The Kerry campaign and the Democratic Party appear to be scaling back their TV add buys in certain states, at least for now. The DNC today started running this ad in 14 of the so-called battleground states. The Associated Press notes, however, that the Kerry campaign and the DNC have stopped airing commercials, at least temporarily, in several other battle grounds, including Missouri and Arizona.

Two familiar faces are taking new jobs as advisers to RNC chairman Ed Gillespie. Bush campaign spokesman, Terry Holt, a frequent guest on this program, and other CNN programs, moving over to the RNC to become a senior adviser to Gillespie.

Author and former White House speechwriter Peggy Noonan is joining the RNC, too. She'll be also be a senior adviser to the chairman.

Well, once again, let's try to get that interview under way with Treasury Secretary John snow.

Can you hear me now?

SNOW: I hear you.

WOODRUFF: All right. Our apologies for the sound problem just a few seconds ago. We thank you for your patience.

Federal Reserve Board chairman Alan Greenspan was before the Congress yesterday. He said, with oil prices coming down for the time being, he said the economy has regained some traction. But this comment on his part has now enforced the view that the Fed is very likely to raise interest rates when it meets 12 days from now. Higher interest rates, is that comfortable -- something your administration is comfortable with, Secretary Snow?

SNOW: Well, Judy, I don't comment on the Fed's interest rate policies. We respect the independence of the Fed. But I would observe that rising interest rates are consistent with an economy that's recovering and getting stronger.

WOODRUFF: So, you're comfortable? I mean, in other words, you're comfortable with them?

SNOW: Well, every recovery that we've observed experiences some rise in interest rates. And as the economy's gotten stronger over the last year, we've seen that interest rates have -- tended up some. And that validates the fact that a recovery is going on.

WOODRUFF: All right. Let's talk about the jobs picture.

We know the latest tally shows it's just a little under a million jobs lost since George W. Bush took office. And recently, we're told an average of a little more than 100,000 jobs have been created per month over the last three months.

It's an improvement, but you and I both know that's, what, about half of what the president's Council of Economic Advisers was predicting at the first of this year. So, what do you say to people who are looking for work when you see the number isn't what you were expecting?

SNOW: Well, we've had 12 straight months now of job creation, and a 1.7 million jobs created over that period, with the unemployment rate coming down pretty -- pretty smartly, marching down from 6.3 to 5.4. And now, in, oh, 49 of the 50 states, the unemployment rate is lower today than it was a year ago. But that's not good enough. We acknowledge that we're not going to be satisfied until everybody who's looking for a job gets a job.

Judy, there was a pause back in May and June that slowed the strong growth we saw in the first quarter, and the preceding three quarters. Now I think we're back on track. I think we'll see third quarter growth much stronger, and I think that will lead to even stronger job growth.

WOODRUFF: Different question. President Bush and others in the administration often criticized John Kerry for being a big spender. But the president in his acceptance speech at the convention listed something like 15 different programs that he promised to either create or expand if he's elected to a second term, things like a tax credit for small businesses that set up health savings accounts, more funding for community college, tax relief for businesses that go into poor communities, and so on and so on -- social Security private accounts.

Where this is money going to pay for this going to come from, Secretary Snow, when there's already over a deficit of $420 billion?

SNOW: Well, Judy, the -- the -- all those initiatives are going to be done within the larger commitment of the president to cut the deficit in half over the course of the next five years. We acknowledge that the current deficit's too large, it's unwelcome.

It's understandable, in light all the economy's been through, the recession and 9/11, and so on. But we're not happy with it. Deficits matter. And the president's committed to cutting this deficit in half, bringing it to a level in five years that will be low by historical standards.

WOODRUFF: But these programs are going to cost in the hundreds of billions, some would say trillions in the years to come.

SNOW: Well, all of those programs will be accommodated within that larger commitment to cut the deficit in half. And there are only two ways to deal with the deficit.

One, is a growing, expanding economy that's creating jobs, and therefore creating more government receipts. We see that happening already. The government receipts are on a good path, a much stronger path now that the economy is growing.

But that's not enough. You also have to watch spending.

WOODRUFF: We're going to...

SNOW: And the president's budget that was sent up to the Congress this year is one of the tightest budgets in years in terms of constraining discretionary spending.

WOODRUFF: We're going to have to leave it there. I hate to interrupt, but I hope we can talk to you again before this campaign is done. Treasury Secretary John Snow, good to see you.

SNOW: Hey, thank you. Good being back with you.

WOODRUFF: Thank you.

I think few people would dispute that President Bush and Senator John Kerry offer very different economic visions. Up next, the Kerry camp's take from former Deputy Treasury Secretary Roger Altman.

Also ahead, we're going to put all the latest polls together to get a big picture of the presidential race.

Plus, more on George W. Bush's record in the Air National Guard. Donna Brazile and Bay Buchanan will have at it.

With 54 days until the election, this is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: We just heard from the current Treasury secretary. Now, for a Democrat's perspective on the nation's economy, I'm joined from New York by Roger Altman. He is an adviser to John Kerry and he was deputy Treasury secretary in the Clinton administration.

And he's working on his ear piece. And once he gets it all set, we're going to talk to him.

Roger Altman, are you able to hear me now? Roger Altman, are you there? Roger Altman, do you have it?

Can you hear? Is that ear piece working?

We've got a gremlin in the -- in the audio system today. Roger Altman, you there? OK. We've got to -- we're going to fix this one, we promise. We'll be right back.

(COMMERCIAL BREAK)

WOODRUFF: We're going to get to Roger Altman, adviser to the Kerry campaign, in just a moment. Working on getting that audio fixed.

But right now, we want to turn to something different. The presidential race isn't the only close contest of the '04 election season. Several Senate races are coming down to the wire with a balance of power and that body at stake.

Stu Rothenberg, of the Rothenberg Political Report joins us now, a good friend of this program.

Stu, first of all, how is the presidential race right now affecting some of these tight Senate races?

STU ROTHENBERG, ROTHENBERG POLITICAL REPORT: First, I have to tell you, you're coming across loud and clear to me, Judy.

WOODRUFF: I'm grateful for that.

ROTHENBERG: I think the presidential race can have an impact largely because these Senate contests are in very Republican and conservative states. So, to the extent that the president builds up some momentum, or the presidential contest infects downed (ph) ballot races in very partisan terms in state after state, state races -- federal races in states are seen in Republican or Democratic terms -- that's a problem for the Democrats.

Look, Democrats can run -- can run ahead of John Kerry. Tom Daschle is going to run ahead of John Kerry in South Dakota. The question is, how far does he have to run? The same thing goes in South Carolina and Oklahoma and Colorado.

WOODRUFF: You're saying it just makes their job harder.

ROTHENBERG: Just harder, yes.

WOODRUFF: All right. President Bush was in Florida yesterday. We know that he and John Kerry are spending a lot of effort in that state. But what about the Senate race in Florida?

ROTHENBERG: Well, there is a Senate race going on. But how do you run? How do you run if the state is having hurricane watch after hurricane watch? In fact, neither Mel Martinez nor Betty Castor, the Republican or Democratic Senate candidates, are on the air now. There was a recent Democratic poll, (INAUDIBLE), for the Democrats having Castor up by four points, with 48-44.

But the race is basically in suspension until the candidates can start to articulate themes. They're not going to do that while people are worried about their homes and their life. These politicians are not going to act like politicians.

WOODRUFF: And there may be another hurricane coming. So...

ROTHENBERG: That's right. So, it really delays the race, it shortness the race.

WOODRUFF: All right. Some of the other races that we should be watching, Stu?

ROTHENBERG: Well, certainly Oklahoma. There's a new Democratic poll, West Hill Partners, a Democratic firm that chose Brad Carson ahead with two points over former Congressman Tom Coburn. This is a very tough race. Two really strong candidates.

The Democrat, Carson, comes from the eastern part of the state, but he's trying to make a play for normally Republican voters in the western half of the state. I think Coburn is very well positioned. But two very good candidates -- it's going to be close.

And the other race I wanted to mention was Alaska, where there's a new poll, Ivan Moore, a media poll, but he's really a Democratic pollster. The Democrats sent out a press release saying Tony Knowles continues to lead. He's got an advantage in the most recent poll, up by I think nine-tenths of one percent.

Talk about splitting hairs. It's about a one percentage point lead.

This race has been tight for months. I expect it to continue to be tight. Murkowski has a new radio attack ad on, attacking Knowles on fisheries and his position that she says will hurt fisheries.

I think this race is going to go down to the wire. Voters really haven't decided on -- at least on Murkowski yet because of her father.

WOODRUFF: Our family spent our vacation in August in Alaska, and there's a lot of interest up there. We saw -- we saw yard signs for Murkowski and Knowles everywhere we looked.

ROTHENBERG: They don't often have races up there. So, this is a big one.

WOODRUFF: This is a big one.

ROTHENBERG: Yes.

WOODRUFF: Stu Rothenberg, thank you very much.

ROTHENBERG: Sure.

WOODRUFF: Well, as we promised, we're going to hear the Democratic side of that economic debate now with Roger Altman. He is a former deputy Treasury secretary now advising the John Kerry campaign.

First of all, Roger Altman, on that point that I raised with Secretary Snow about Alan Greenspan's comments that the economy does seem to be picking up some traction, there are jobs being created. Doesn't this make it even harder for John Kerry to make economy an issue?

ROGER ALTMAN, FMR. DEPUTY TREASURY SECRETARY: I don't think so, Judy, because the acid test of any record, economic record, is jobs on the one hand and family incomes the other. And since Mr. Bush took office, jobs are down, not up. And even more importantly, family incomes are down, not up.

Now, they like to say -- and Secretary Snow did -- that they took a lot of hits, the bursting of the tech bubble, the corporate scandals, the mysteriously described Clinton recession. So, the answer to that is to look at how they've done since the recovery started.

And the National Bureau of Research says it started in November of '02. Since it started, slowest growth rate in a recovery in 70 years, worst job creation rate or job destruction rate in 70 years, family incomes down, not up.

Then they like to say, as President Bush did a few weeks ago, and Don Evans is doing, Bush says we've turned the corner. And Evans says, best economy of my lifetime. Well, let's take the last three months then.

In the last three months, they haven't created jobs sufficiently to keep up with even the population growth rate. So, the percentage of Americans working even in the last three months is down and not up.

Let's look at incomes in the last three months. Well, they're down and not up.

So, whether you measure their record over the four years, since the recovery started, the last three months, jobs are down, incomes are down. Those are the acid tests. They're trying 5,000 ways to get around that, to avoid talking about it. You didn't hear a word about it at Republican convention, but that's the bottom line.

WOODRUFF: OK. I may be throwing you a curve here, but I want to ask you about something that John Kerry said this last few days.

He talks about linking the cost of the war in Iraq with the need to spend more money on domestic priorities, like healthcare and education and so forth. He's going after the Bush administration for spending so much money in Iraq.

But it was just a little over a year ago that Kerry said in an interview on "Meet the Press" -- he was asked about whether spending for Iraq should be increased. And he said, yes "by whatever number of billions of dollars it takes to win." Isn't he contradicting himself now?

ALTMAN: I don't think so, Judy. The point on Iraq -- and it's a not my area, actually. But the point on Iraq is competence or incompetence. You know, Senator Kerry voted to authorize the war an Iraq, and said again recently he would do it again knowing what he knows now. But he didn't vote for incompetence, and that's what we've received.

And the $200 billion that has been spent so far has been spent poorly. We know the conditions on the ground now in Iraq. We just all read the news. We know that the death and wounded rates on American soldiers have been going up and not down.

This is many months after Mr. Bush landed on the aircraft carrier with that flight suit and said, "Mission accomplished." Authorizing the use of force was right. Voting for incompetence is not what Senator Kerry did, but that's what we got.

Now, the point really here is they've made the wrong choices. If you measure what we spent in Iraq compared to what we could have done, President Bush has allowed healthcare costs to rise 56 percent since he took office, tuition costs have risen 35 percent since he took office. Energy costs are up over $1,000 a family since he took office.

That's why it's harder for the average American family to make ends meet since he took office. And the two overarching duties of a president are to protect the country and to pursue policies which will allow standards of living to rise.

The generational promise of this country is to leave the next generation in better shape than the current one founded. And that's not what's happening under President Bush -- on President Bush's watch because he made the wrong choices.

WOODRUFF: We're going to have to leave it there. Roger Altman is an adviser to the John Kerry campaign, formerly deputy secretary of the Treasury.

Thanks very much. And again our apologies for the audio problems we were having.

ALTMAN: Thank you, Judy.

WOODRUFF: We appreciate it.

Just ahead, we're going to take to you the nation's battlegrounds for updates on candidates Bush and Kerry.

Also, who has the momentum in this race for the White House? Our Bill Schneider takes a poll of polls.

And we'll find out how Americans view the potential for new acts of terrorism as we approach the anniversary of the 9/11 attacks.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: It's the story we're talking about but they're not. So, what are George Bush and John Kerry talking about today?

Do we finally have a front-runner in the race for the White House? Our Bill Schneider sifts through the latest polls.

The women of Capitol Hill. Which female lawmakers are rising stars and which are fighting for their political lives.

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

(END VIDEOTAPE)

WOODRUFF: Welcome back. George W. Bush and John Kerry have at least this much in common, both of them today trying to steer clear of the campaign controversy of the day, preferring to talk about issues they believe voters care about. But it is difficult for either side to completely ignore renewed questions about the president's military service in the 1970s. Our White House correspondent Dana Bash is with Bush in Pennsylvania.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: This is the president's 36th trip to the state of Pennsylvania, a state he lost last time and wants to win so badly it's his third visit already just this month.

The president barely started his speech in suburban Philadelphia when he was interrupted not once but twice by protesters. They were escorted and one was even, we're told, a Bush volunteer at a meeting with Bush volunteers the night before.

Now, this is something that has happened to John Kerry but rarely happens to President Bush because the people who come to his campaign events are very tightly screened. Once he did get started the president focused on economic and pocketbook issues more than he usually does.

Mr. Bush talked about some of the domestic proposals that he first proposed at his convention like healthcare, savings accounts, job training, and tax cuts.

And Mr. Bush tried to some of the moderate Republicans who live here in these Philadelphia suburbs, those who voted last time for Al Gore and the way he tried to appeal to them by framing the debate this way that he is somebody who is going to keep government regulation down and tax cuts down while John Kerry is somebody he says who wants to raise government regulation and also raise their taxes.

BUSH: If you drive a car, Senator Kerry's voted for higher taxes on you. You have a job, he's voted for higher taxes on you. If you're married or have children, he voted for higher taxes on you. The good news, on the second of November you have a chance to vote.

BASH: If you look at the latest CNN poll on how the president is faring in Pennsylvania, you know why he's talking about economic issues here. When it comes to terrorism, the president has a huge lead among Pennsylvania voters. He's winning 60-33 percent against John Kerry but he trails on the economy. He gets only 43 percent to Senator Kerry's 51 percent.

That's why the Bush campaign is pushing domestic issues also to appeal to some of the middle-class voters that Senator Kerry thinks he has an in with, particularly on issues like healthcare.

The Bush campaign is trying not to get knocked off their message by new questions and new allegations that the president did not fulfill his duty in the National Guard 30 years ago and also questions of whether or not he actually did get preferential treatment because of his famous last name even though he has repeatedly said that he has not.

Now Democrats are not letting up on this. They say this is simply an issue of credibility. But the Bush strategy is to answer these questions as soon as possible when documents become available through the media, to release also to the White House and give interviews to answer questions as quickly as possible to try to put a rest to them.

Also, the Bush campaign says, important for them to point out that they think that this is all politically motivated, recycled charges because the Democrats think that the president is doing better, they need to try to knock him down a bit and the White House spokesman Scott McClellan even put the blame for all this squarely on John Kerry, saying that it is John Kerry and his surrogates who are coordinating these new attacks on the president.

Dana Bash, CNN, Colmar, Pennsylvania.

(END VIDEOTAPE)

WOODRUFF: Now, let's look at the Kerry campaign and CNN's Ed Henry. He's with the senator in Iowa.

(BEGIN VIDEOTAPE)

KERRY: This is my second home.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): John Kerry returned to Iowa, where he started his astonishing comeback in the primaries. He returned now to kickstart his struggling general election campaign.

KERRY: George W. Bush chose a great big tax cut for the people literally. About 30 percent of this thing went to people earning more than a million bucks. And we're telling kids and families we're cutting your after-school program. That's W. Wrong choice, wrong direction, wrong leadership for this country. And that's what we're going to change.

HENRY: While Kerry's allies ramp up their attacks on President Bush's service in the National Guard, the candidate is dodging questions about the controversy.

UNIDENTIFIED FEMALE: Did President Bush fulfill his National Guard obligations?

HENRY: But Kerry could not stop talking about his healthcare plan in Des Moines.

KERRY: If you make me president of the United States, on day one, within whatever number of hours I'm allowed to do it, I am sending a bill to Congress to provide affordable accessible healthcare to all Americans. Number one priority.

HENRY: After the Swift Boat controversy and Kerry dropped in the polls, Democrats like Bill Clinton wanted the senator to focus less on Vietnam and more on domestic issues like two new ads unveiled by Kerry in Pennsylvania while the president campaigned in that battleground state.

AD ANNOUNCER: John Kerry, a real plan to strengthen Medicare and lower healthcare costs.

HENRY: While Kerry tries to stay positive, other Democrats are slinging mud.

HARKIN: This is about George Bush not doing his duty in the National Guard and then lying to the American people about it.

HENRY: Vietnam came up briefly in Kerry's town hall meeting and it turned into a light moment. A woman praised the candidate for saving people in war and rescuing a hamster in the Kerry home which was recounted at the Democratic convention.

UNIDENTIFIED FEMALE: It's a stark contrast because if you watched it, you know from the Bush twins, that the Bush hamster did not make it.

KERRY: Is that a metaphor or a prophesy?

HENRY: The Kerry camp says it has nothing to do with the Texans For Truth ads which accuse the president of being AWOL. But Bush advisers charge that this attack has been coordinated with Kerry. Republicans note that the senator spent days denouncing the Swift Boat ads but thus far silent about the anti-Bush ones. Ed Henry, CNN, Des Moines, Iowa.

(END VIDEOTAPE)

WOODRUFF: The group calling itself Swift Boat Veterans For Truth is pressing on with it's ad campaign. It says it will spend $680,000 for a week-run long on national cable TV beginning tomorrow. The ad buy features a previously released spot attacking Kerry for renouncing his Vietnam War medals.

As we reported, the Bush camp says the new dust up over the president's record in the military is a response to his rise in the polls. We now have a clearer picture of the lift Bush got from his convention thanks to several new surveys. Our senior political analyst Bill Schneider has been crunching the numbers.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Where does the presidential race stand? For that we do a poll of polls. Two national polls interviewed registered voters after the Republican convention ended. The CNN/"USA Today"/Gallup poll shows a near tie.

The CBS News poll shows Bush with an eight-point lead. "TIME" and "Newsweek" polled at least some voters during the convention. "TIME" has Bush ahead by eight. "Newsweek" has Bush leading by 11.

Very different leads for Bush. But in three of the four poll President Bush's support is right around 50. Every poll shows President Bush gaining support since July or August.

Some polls screened for likely voters. In the CNN/"USA Today/Gallup poll, Bush's lead among likely voters grows to seven points and from eight to ten points in the "TIME" poll. Only the Fox News poll shows a close race among likely voters but that poll, too, shows a gain for Bush since the convention.

Bottom line? Every national poll shows Bush gaining and every national poll shows Bush now ahead, though sometimes by a narrow margin. There have been polls in eight states either during or since the Republican convention. Let's look at three battleground states Bush carried in 2000.

Missouri went for Bush by three points in 2000. A post- convention poll shows Bush leading by 14. Last time, Bush won Ohio by four. He's now ahead by eight. Arizona gave Bush a five-point lead in 2000. He's now ahead by 16. Three red states getting redder.

Now, let's look at some states that voted for Al Gore in 2000. Pennsylvania gave Gore a 4-point victory. The latest Pennsylvania poll has Bush ahead by 1.

New Jersey gave Gore a whopping 16-point victory over Bush. A new poll shows Kerry's lead shrinking to just 2.

Oregon was a squeaker last time, Gore by a half a percent. It's still a squeaker, Bush up by 1.

New Mexico was also a squeaker in 2000. Gore won by less than a tenth have of a percent. Now Bush leads by 3.

Four blue states now in doubt. But Democrats are holding on pretty well in Washington State. Al Gore won Washington by 6 points. Kerry is now 8 points up.

(END VIDEOTAPE)

SCHNEIDER: Bush clearly has momentum coming out of his party's convention. And for the first time all year, it's fair to say this campaign has a front-runner -- Judy.

WOODRUFF: OK. Thank you, Bill Schneider. We appreciate it. We can put a label on it. John Kerry is accusing Vice President Cheney of playing the politics of fear. Up next, finds out what Bay Buchanan and Donna Brazile have to say about Cheney's controversial remarks about Kerry and the war on terror.

Also ahead, female candidates in 2004, have they made much progress since the famous "Year of the Woman" over a decade ago?

(COMMERCIAL BREAK)

WOODRUFF: Turning to Afghanistan and the al Qaeda network, a new videotape has surfaced today, including comments by -- allegedly by a top lieutenant to Osama bin Laden, Ayman al-Zawahiri. For the very latest on what's in this tape and what it may mean, let's turn to our own Nic Robertson who, of course, reported for CNN in Iraq and in Afghanistan.

Nic, what do we know about this tape, is it something that's credible and if it is, what does it suggest?

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: It does appear to be credible, Judy, because it shows Ayman al-Zawahiri. This is the first time in 2 1/2 years that we have seen a videotaped statement by one of the al Qaeda leaders.

So it does appear to be Ayman al-Zawahiri. We haven't heard it enough yet to know exactly when it was recorded. It refers to Iraq and Afghanistan specifically, specifically addressing issues relating to U.S. forces, U.S. policy. They're saying that in Iraq, that the mujahedeen, the holy warriors have turned the U.S. policy in Iraq upside down. Saying that in Afghanistan, in the south and east of Afghanistan, the mujahedeen, the holy warriors have U.S. troops hiding in their trenches, that the mujahedeen are able to move at will in Afghanistan.

He goes on to say that now the United States is caught between two countries, caught between two fires, he says. That this means that now they're going to bleed to death. That's one way they can lose, and if they pull out again, he says, they lose everything.

Perhaps the significance of this message is that al Qaeda has managed to release a videotape showing one of its leaders speaking right around the anniversary of September 11th . They like to do this every year, make special releases on the anniversary of September 11th . They appear to have done it this year, perhaps going a little bit further than in the last two years -- Judy.

WOODRUFF: And very quickly, Nic, there are 18,000 American troops in Afghanistan. So people are going to be looking to these comments to see how they square with what's going on on the ground.

ROBERTSON: Well, having been there relatively recently, it doesn't square with what's happening on the ground. The troops are in south and eastern Afghanistan. It is the most dangerous portion of Afghanistan for U.S. troops at this time. But the U.S. troops go out, that we saw, on daily patrols. They go into remote villages. They knock on doors to find out if they can get information on the whereabouts of Osama bin Laden and al Qaeda leaders.

The picture that this statement tries to portray is that the United States is on back foot in Afghanistan. That's not what we saw. But certainly, this is a very dangerous area.

Senior security officials say that the Taliban are able to move in very significant numbers, several hundreds at a time are able to move at will through that region -- Judy.

WOODRUFF: All right. We're going to leave it there for now. Nic Robertson, thank you very much. But there will be more on this story coming up at 5:00 Eastern on "WOLF BLITZER REPORTS." Thanks very much.

And as we get closer to the three-year anniversary of the 9/11 attacks, the latest CNN/"USA Today"/Gallup poll gauges how Americans view the terror threat today: 43 percent of those polled say they are worried that they or someone in their family will become the victim of terrorism; 57 percent say they are not worried. When asked if Americans have permanently changed the way they live since the attacks: 52 percent said yes, 46 percent said no.

And as for Osama bin Laden, 66 percent said they believe it's likely that the U.S. will capture or kill the al Qaeda leader, 31 percent said it is not likely.

Well, with us now, former Gore campaign manager Donna Brazile and Bay Buchanan, president of American Cause.

Bay, let me turn to you first on what the vice president said a couple of days ago about in essence saying that if you vote the wrong way, in his mind, if you vote for John Kerry and John Edwards, the likelihood of a terror attack is greater.

BAY BUCHANAN, PRES., AMERICAN CAUSE: There's no question in my mind, and I think also in the vice president's mind considering what his spokesperson said, that it was a poor choice of words. In this heated rhetoric of political general election, he really did misspeak. And I think what he was trying to say, basically, is if John Kerry had his ways in the 20 years of the Senate, when he opposed all of those military systems, that today we would not be as strong as we are against terrorism. And so I think that the point is there, a good one but he misspoke.

DONNA BRAZILE, CNN CONTRIBUTOR: Well, he went over the line. And I'm glad Bay acknowledged that. Look, the truth is, Judy, if we lose our resolve to find and capture Osama bin Laden then we will be hit again. If we lose our resolve to fund homeland security, we will be hit again. If we lose our resolve to complete what we're doing in the war on terror, we will be hit again. To cast aspersions on John Kerry was wrong, it was over the line and I'm glad Bay and other Republicans -- and the president should distance himself as well. WOODRUFF: Let's talk about the polls. We just had a poll of polls, Bill Schneider analyzing what's going on. He pronounced George Bush the front-runner. Is that how you see it?

BUCHANAN: That's very, very clear. You know, it's -- one thing that is very tough in an election is when your opponent, in this case, if you're looking at George Bush, the momentum he has is very steady, it's not (UNINTELLIGIBLE) it's up and down, up and down now. It's very one-step-at-a-time, it's very focused. He has got a very aggressive, positive campaign. And I believe it's going to be hard to turn around. Kerry on the other hand is flat. He has been flat for five or six weeks now. He has an unfocused, undisciplined and angry campaign over there. And they are going to have a difficult time. I believe it's unraveling before our very eyes.

BRAZILE: Judy, there's no question President Bush had a little bounce coming out of the convention, you see that in the polls. But this election is not over. John Kerry still has an opportunity to get in there, to fight back, regain the momentum. And if the Republicans would like to gloat and call this race over with, then let that happen. But I think the Democrats know that they have to fight harder and make them win this election.

WOODRUFF: Very quickly, the new information surfacing, some of it new about President Bush's service in the National Guard, is this going to hurt him, Bay?

BUCHANAN: Not at least. And in fact, I'd be delighted to see the Democrats want to talk about this maybe for a couple of more weeks. This is foolhardy. They need to get focused. The people in this country have already decided that George Bush is a far stronger commander in chief than they believe John Kerry will be. And if they don't think John Kerry can handle the two issues of terrorism in Iraq, they will not vote for him. And so they can go and talk about something that happened 20-30 years ago all they want.

BRAZILE: Well, I'm not flaming this issue at all, but I do believe that the president has to answer some of the questions that are being raised as a result of this new information that is being released from the Pentagon.

Look, he said he fulfilled his service, all these papers and other allegations saying he did not. He needs to answer it, put it behind him and let's talk about the last 30 months of George Bush. That's when the fight really begins.

BUCHANAN: There's not much new here, there's not much new here in what's coming out. That's nonsense, Donna, and you shouldn't even suggest it is. It's old, it's boring. And we all know exactly what happened

BRAZILE: I don't know, Bay. We should see the news, we should see what it is and then he should respond. That's it.

WOODRUFF: We're going to leave it here. Donna Brazile, Bay Buchanan every Thursday and more often, when we can get you, on INSIDE POLITICS.

Thank you, both.

There is a slowly growing power group here in Washington. Coming up, Amy Walter of the "Cook Political Report" grows us -- joins us with a look at the make up of Congress, more than a decade after the "Year of the Woman."

(COMMERCIAL BREAK)

WOODRUFF: Ever so slowly, but it's happening, women are occupying more seats in Congress. Amy Walter of the "Cook Political Report" joins me now to talk about women in the U.S. House and some big races this year involving women candidates.

All right, Amy, it's been about a dozen years since what we called the "Year of the Woman." How much progress has there been?

AMY WALTER, "COOK POLITICAL REPORT": Well, it has been a very slow grind. You know, there was a big bump -- or a so-called big bump in the "Year of the Woman." Went from six percent of the Congress made up with women in 1991 up to 10 percent since that time -- since 1993. It's now 14 percent. So, it hasn't been all that impressive.

But I think the big reason is that there just are so few opportunities, and I think goes for any group trying to make gains in Congress. Whether it's minorities or women, people haven't been there consistently.

There are very few Congressional races that are open or in competitive seats. Usually a redistricting year, that's why the "Year of the Woman" was, not surprisingly, in 1992, a redistricting year. Those provide so many opportunities, open seats, people retiring are at -- record number retirements then.

Just didn't happen in 2002, so I think we're still going to see the sort of slow grind up until, you know, the next, at least, 10 years.

WOODRUFF: Who are some of the women who are serving in Congress, incumbents who are facing some tough challenges this year?

WALTER: Well, the good news for women in Congress is that, since there aren't as many of them, there aren't as many targets. But -- and they also seem to be holding on quite well, too, especially in the Senate. And in the House, they've been holding their own.

Two Republicans who are always in tough fights -- Heather Wilson down in New Mexico, in Albuquerque. It's a very much of a swing district. Obviously going to be targeted in this presidential race, battleground. Gore barely won this district by one percent in 2000.

She's held on here since '98, but she has a very well financed opponent this time. He ran against her in 2002. There are a lot of interesting parts about New Mexico voting, actually, which is that early voting's very prevalent. I think you're going to see a lot of that vote come in early, and that's going to be a big -- a big part of that. So, she has a tough race.

Anne Northup in Kentucky, Louisville area, always a tough race for her, because she sits in a Democratic district. She's fought back challenge after challenge. The question is: Has all the collective weight of those challenges weighed her down?

WOODRUFF: We're mainly talking about House...

WALTER: We're talking about House.

WOODRUFF: ... members here. There are a couple of women in the Senate facing...

WALTER: There are. I mean, they're not as -- not as as close as some other incumbents -- Patty Murray is in a competitive race with George Nethercutt...

WOODRUFF: Barbara Boxer.

WALTER: ... Barbara Boxer. But both of them are favored right now.

WOODRUFF: Finally, rising stars...

WALTER: Yes.

WOODRUFF: ... among the crop of candidates?

WALTER: Well, there are -- we're still watching them come, but one woman who I think is really going to make her mark in Congress is a woman named Debbie Wasserman Schultz. She's down in Broward County, Florida.

What's amazing is this was an open seat. Peter Deutsch just ran for the Senate, gave up this district, heavily Democratic. No one challenged her in a primary, in an open seat in a Democratic district, which says a lot about her. She's very well respected. A great -- she was in the legislature, state Senator. She has a great experience in terms of running a good, solid campaign, being a very smart, ambitious person.

I would not be surprised to see her tapped by the leadership, both as a fundraiser and a spokesperson for the party. She can do both very easily from her base in Florida.

WOODRUFF: Well, I'm sure like every other politician in Florida right now, she's focused on that hurricane.

WALTER: Right. Probably.

WOODRUFF: Let's hope they get through all that safely...

WALTER: Right.

WOODRUFF: ... as soon as possible.

Amy Walter, "Cook Political Report," we always like having you here.

WALTER: Thanks, Judy. Appreciate it.

WOODRUFF: We appreciate it.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

(STOCK MARKET UPDATE)

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WOODRUFF: That's it for this edition of INSIDE POLITICS on Thursday. I'm Judy Woodruff.

"CROSSFIRE" starts right now.

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