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JUDY WOODRUFF'S INSIDE POLITICS

Bush to Address Tough Issues at APEC Summit; Congress Battles Over Appropriations Bill, Tom DeLay Fights Back at Accuser; Clinton Lashes Out at Media

Aired November 19, 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 flies off to Chile to meet with world leaders for the first time since his reelection. From Iraq to Iran, to North Korea and the economy, he'll face some tough questions.

WENDY SHERMAN, FORMER STATE DEPARTMENT COUNSELOR: We're going to see leaders turn to the American president and say, "What about your budget deficit? What about the weak dollar? What about rising oil prices in the world?"

ANNOUNCER: The House Republican leader under fire speaks out about an accuser.

REP. TOM DELAY (R-TX), MAJORITY LEADER: Mr. Bell has been exposed for the partisan stalker that he is.

ANNOUNCER: A proud day for Bill Clinton. But the former president gets hot under the collar when questioned about his past. We'll tell you what was said and why.

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

(END VIDEOTAPE)

JUDY WOODRUFF, HOST: Thank you for joining us.

President Bush is headed to South America at this hour to attend the annual summit of Asian and Pacific Rim leaders.

Mr. Bush left Waco, Texas, earlier today after spending the night at the ranch in Crawford. He's scheduled to arrive in Chile in about three hours.

Protests against globalization and U.S. foreign policies already have taken place on the streets of Santiago, the host city. And big challenges lie ahead for Mr. Bush in his private meetings with other world leaders.

CNN senior White House correspondent John King has the story.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): The president's first post-election international trip comes as the White House talks of staying the course, but even some allies say with the new term should also come a new approach.

The top White House goal at the annual Asian Pacific summit in Chile this year, a unified front in the nuclear showdown with North Korea. But Mr. Bush's partners in the so-called six-party talks -- China, Japan, South Korea and Russia -- all to varying degrees suggest North Korea isn't the only obstacle to progress and that Mr. Bush could offer security and other incentives.

LEE HAMILTON, WOODROW WILSON CENTER: All of them are urging the United States to get off the dime here and move forward on negotiations.

KING: APEC is an economic club by name, known for its colorful class photos. Security has dominated the agenda in recent years, especially after the 9/11 attacks.

But some leaders want to refocus on pocketbook issues and put their stamp on Mr. Bush's second term agenda.

SHERMAN: We're going to see leaders turn to the American president and say, "What about your budget deficit? What about the weak dollar? What about rising oil prices in the world?"

KING: The summits are largely scripted but will give Mr. Bush his first opportunity since winning re-election to meet face to face with many of his peers, including a few favorite.

Japan's Koizumi, for example, was a staple of the Bush campaign speech.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I didn't tell him I was going to tell you that Elvis is his favorite singer.

SHERMAN: Russia' Putin publicly endorsed the second Bush term, and Mr. Bush prefers to call the Russian leader Vladimir.

But Moscow's announcement of a new nuclear weapon has some thinking it is past time for Mr. Bush to turn tougher with a leader critics say has turned too autocratic.

SHERMAN: The Bush administration is going to have to take the gloves off a little bit and be a little bit more head-on about where President Putin is leading his country.

KING: Mr. Bush is the focal point of summit protests, anger over the Iraq war adding to the more familiar APEC demonstrations complaining global trade exploits the poor and the environment.

(END VIDEOTAPE)

KING: China's economic and political transition, trade and immigration debates on this side of the Pacific also tough challenges ahead for the president at this summit.

And Judy, the meeting here in Santiago may just be a warm-up for a tougher diplomatic challenge ahead. Just after his inauguration in January for a second term, President Bush plans to head to Europe for a little fence mending -- Judy.

WOODRUFF: John, we've -- we know that Colin Powell, secretary of state, has announced that he's leaving the administration. But he does still manage to be in the news. Bring us up-to-date.

KING: He does. And he is here in Santiago ahead of the president, foreign ministers meeting from the APEC countries.

And Secretary Powell making the case and making the case for the administration that it still does not believe the international community is taking a tough enough line when it comes to Iran's nuclear program.

The International Atomic Energy Agency has said that it does not think Iran is moving toward a nuclear weapon right now. The administration says its intelligence is at odds with that.

Great Britain, Germany and -- recently negotiated an agreement with Iran, but it's clear that the United States is worried that it will not be enforced tough enough.

So Secretary Powell is saying that there is intelligence suggesting not only that Iran wants to build a weapon but that it is advancing its missile technology so that it could fit a warhead on a missile and deliver a nuclear weapon.

The clear line from Secretary Powell in his closing days is that the deal that the Europeans have cut with Iran is good so far, but not enough, not tough enough. The United States pushing for more scrutiny and more pressure on Iran.

But of course, one of the answers back, Judy, as the administration makes this case is, "We're not sure we trust your intelligence." A bit of a hangover from the Iraq debate -- Judy.

WOODRUFF: Yes, it certainly is. All right, John King, reporting for us live from Santiago. John, thank you very much.

Back here in Washington, members of Congress continue their efforts to push a final spending bill through the lingering lame duck session.

CNN's congressional correspondent Joe Johns is with me now from Capitol Hill.

Joe, is it just my imagination, or do we end up with this story line from the Congress at the end of every year?

JOE JOHNS, CNN CORRESPONDENT: Or so it seems, Judy.

This is a huge bill they're working out, almost as usual, $388 billion in discretionary spending. We're told it's still on track. The House members have every opportunity and believe they will be able to get it to the floor of the House of Representatives late tonight or sometime early, early Saturday morning. Meanwhile, to Tom DeLay, the majority leader, of course. For the second day this week, he and his colleagues came out swinging on a particular issue.

This one, of course, had to do with a letter, a letter that was sent to Congressman Chris Bell, who filed an ethics complaint earlier this year against Tom DeLay.

The letter that was sent to Bell indicated that, in the view of the ethics committee, his complaint contained innuendoes, speculation assertions and conclusory statements and accused of him doing it to try to attract publicity.

DeLay and colleagues seized on that today and came out blasting Bell.

(BEGIN VIDEO CLIP)

DELAY: I understand the Democrat Party's adjustment to their national minority status is frustrating. But their crushing defeat in the elections earlier this month after two more years of Democrat obstruction and vicious personal attacks should show them that the American people are tired of a politics of personal destruction.

It is a shame that Democrat anger at the loss of power has manifested itself in contemptible behavior like Mr. Bell's.

(END VIDEO CLIP)

JOHNS: Now, the problem for DeLay is that he has recently gotten two letters of admonishment from the ethics committee, one for an appearance of a conflict of interest, another for essentially throwing the weight around.

His Republican colleagues are also concerned that he could still be indicted in a grand jury investigation into state campaign financing in Texas.

Democrats privately are saying these two news conferences these week -- this week are simply trying to lay the groundwork for DeLay's defense in the event he is indicted.

Publicly, however, Democrats are sticking to the facts. Nancy Pelosi today, hitting DeLay on the issue of the ethics reprimands.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: The reason that Mr. DeLay was rebuked on a number of occasions by the ethics committee is because of his own behavior.

(END VIDEO CLIP)

JOHNS: Now, of course, we're getting a push back from DeLay's office. He said today that he hasn't had nearly as many press conferences on this topic as Nancy Pelosi has and accuses her of trying to lay a groundwork of her own on the defense on some of the complaints that have been filed against her before the FEC.

Back to you.

WOODRUFF: Joe, sounds like the spirit of bipartisanship is alive and well.

JOHNS: That's for sure.

WOODRUFF: Not. Not. On Capitol Hill. All right, Joe, thank you very much.

Checking the Friday headlines in our "Campaign News Daily."

Top advisers to John Kerry say it is likely that the senator will donate much of the money left over in his campaign accounts to Democratic committees and candidates in 2005 and 2006.

Many Democrats were surprised to learn this week that Kerry had about $15 million left over from the campaign. Some party members have criticized the leftover cash. They say that all available money should have been spent in such a close race.

A new poll of registered voters finds that Republicans have narrowed the gap with Democrats when it comes to party affiliation.

The national Annenberg election survey found that more than 34 percent of voters call themselves Democrats, while nearly 32 percent call themselves Republicans. That marks a slight improvement for the GOP from four years ago.

Voter exit polls, we should add, found an even closer party divide this month. Thirty-seven percent identified themselves as Democrats; 37 percent said they were Republicans; and 26 percent called themselves independents. Again, those numbers from the exit polls.

Well, campaign manager Ken Mehlman says the Bush campaign used a variety of nontraditional ways to reach potential voters. In a speech to Republican governors yesterday, Mehlman outlined some of the Bush team's winning strategies.

As quoted in the "Washington Post, "Mehlman cited a creative but rather unscientific rule. He said, quote, "If you drive a Volvo and do yoga, you're pretty much a Democrat." But, quote, "if you drive a Lincoln or a BMW and you own a gun, you're voting for George W. Bush." End of quote.

Well, it was a day to celebrate Bill Clinton, but did talk about his investigation during his administration take away the former president's good news? We'll tell you what was said when we come back.

The 2004 election in just two and a half weeks old and some votes are being still counted. But there's already plenty of talk about the next race for the White House. Coming up, we've already got our eyes on New Hampshire. (COMMERCIAL BREAK)

WOODRUFF: Former President Bill Clinton has never minced words in expressing anger over investigations into alleged wrongdoing by him and members of his administration.

His sharpest criticisms at Kenneth Starr, the former independent council in the Whitewater investigations. In interview that aired last night just hours after the opening of the Clinton Presidential Library, the former president lashed out at another target, the news media, in an interview with ABC's Peter Jennings.

At one point, Clinton admits that his affair with Monica Lewinsky was, in his words, "a terrible, public, personal mistake," and then he adds that he never lied to the American people about his job as president or let the American people down.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: And I will go to my grave being at peace about it. And I don't really care about they think.

PETER JENNINGS, ABC NEWS ANCHOR: Well, yes you do.

CLINTON: They have no idea.

JENNINGS: You care. I can feel it across the room.

CLINTON: No, I care.

JENNINGS: you care very deeply.

CLINTON: I care. You don't want to go here, Peter. You don't want to go here. Not after what you people did. And the way you, your network, what you did with Kenneth Starr. The way your people repeated every little sleazy thing he leaked.

No one has any idea what that's like. That's where I failed. You want to know where I failed? I really love it. It hurt me.

(END VIDEO CLIP)

WOODRUFF: Joining me now with their take on this and more, Stephen Hays of "The Weekly Standard"; Ann Kornblut of the "Boston Globe"; and Michelle Cottle of "The New Republic."

Stephen Hays, is Bill Clinton right? Did the news media give him and those $100 million worth of investigations a free ride?

STEPHEN HAYS, "THE WEEKLY STANDARD": I would say this is a new interpretation on the vast right-wing conspiracy theory that Hillary Clinton put out there, now including the media, ABC News.

I frankly don't remember ABC News just simply re-peddling Ken Starr leaks. I think they were reporting it pretty hard. WOODRUFF: Michelle Cottle, is he right?

MICHELLE COTTLE, "THE NEW REPUBLIC": Well, the media absolutely doggedly pursued every little piece? Sure, I remember reporters hanging out in parking garages, tracking Ken Starr's people for hopes that they would leak them something.

But, you know, that said, that's not where he failed. Failing to keep the pants zipped is where Bill Clinton failed and that was his basic problem. And then lying about it.

WOODRUFF: Ann Kornblut, what do you make of this?

ANN KORNBLUT, "THE BOSTON GLOBE": Well, I have to -- I have to wonder if I'm the only one who thought this was a bipartisan bid for -- I mean, Clinton spent yesterday trying to reach out to George W. Bush. I think in pursuing the media, he also was making a point that Bush would agree with.

At the end of the day, I sort of -- I wondered if I was the only one who couldn't believe we were still talking about this, all these many years later. Bush not only got elected on restoring honor and dignity to the Oval Office four years ago, he got reelected. And that was a few weeks ago.

So if anything, I wondered why the interview didn't move on from this somewhat.

WOODRUFF: He was -- And we should be clear that President Clinton talking about all the news media and not just ABC here.

You know, he did talk, Stephen, about, you know, in his remarks yesterday at the library dedication about how he's a little bit red and he's a little bit blue and he wishes the country weren't so divided. I mean, is this something that's going to take hold, do you think?

HAYS: I don't think so. But it's sort of classic Bill Clinton. He has a little bit of both sides, and he sold that very well. And I think that was one of the reasons that he had a -- that he was popular, if not successful, throughout his two terms in office, was that he did things that would appeal to the blue and he did things that would appeal to the red.

He was just like what he said when he talked about the impeachment problem as a public personal problem. Sort of had it both ways and I think did so quite effectively.

WOODRUFF: What did you think of his remarks yesterday, Michelle?

COTTLE: I think that he, in a way that the Democrats are having a hard time finding someone else being able to do was he represented the culture, the kind of way to talk to red states.

I mean, he understood religion. He understood kind of family values and that sort of thing. But he was very successful, also, in kind of innovations with policy and helping the Democrats move away from their traditional stereotypical paleo-liberal (ph) image.

But, of course, then personal problems tripped him up. So...

WOODRUFF: We've talked a lot in the last 48 hours, Ann, about the Clinton legacy. I mean, is there something immediate that he leaves, that he gives, or is he still so active and in the middle of it because he's clearly involved in the decisions about the next DNC chair will be that -- I mean, what -- what -- how -- what is his role right now?

KORNBLUT: I think we'll see. I mean, there's a lot of debate about it, which -- which direction the DNC will go in. We do know Terry McAuliffe, who was his legacy four years ago, will be on the way out.

So I think, if anything, it could be -- there's a potential for it to not be about Bill as much as it could be about Hillary. I noticed in that same ABC interview, he -- he kind of deferred on some of the questions about whether Hillary would run. He said he didn't know whether she would run for office, as implausible as that may seem.

So I think, if anything, his immediate legacy or his immediate role may be trying to, you know, shift the -- shift the spotlight away from himself.

WOODRUFF: Let's -- little bit of time left. Let's quickly talk about what Arlen Specter did this week.

Stephen, he clearly was in some hot water but now has persuaded the -- his own colleagues to let him go ahead and have the chairmanship of the judiciary committee. But has he done it in a way so that, you know, the president is going to get pretty much a blank check and be able to nominate anybody he wants to the Supreme Court?

HAYS: Yes. I think that's right. I mean, I think what the statement that Arlen Specter had to give as sort of a compromise statement in order to get the position really helps the White House in shifting -- in moving through its nominees one after another after another.

And I think, frankly, he needed to do that after what many on the right took as a betrayal of White House support for his tough primary and then his election.

WOODRUFF: Clear victory for Christian conservatives?

COTTLE: Absolutely not. They didn't want him there. I mean, if they had their way, Arlen Specter would not be in this position. And I'm sorry but in the Senate, he's going to do what he wants and he's not going to say, stand up and go, "This is a litmus test."

WOODRUFF: Quickly. KORNBLUT: I would have to agree with Michelle. I think if they didn't want him re-elected, let alone chairman of the judiciary committee. So the fact that he's there, I think, is a sign of his own strength.

WOODRUFF: We're going to have to leave it there. Hope to see you all next week, Stephen Hays, Ann Kornblut, Michelle Cottle. Thank you very much. We appreciate it. Have a great weekend.

It is the reshuffle game at the White House. Up next, who's the man -- will the man who heads the Treasury Department be the next to depart President Bush's cabinet? Our Bob Novak joins me with his take on that and some other items in his "Reporter's Notebook."

(COMMERCIAL BREAK)

WOODRUFF: ... inside buzz. OK, Bob. With all these recent cabinet resignations, you've been hearing talk about the treasury secretary, John Snow.

ROBERT NOVAK, CO-HOST, "CROSSFIRE": Yes, it's not sure that he's going to stay. And I have from a very good source that the president is looking at former senator, Phil Graham, a fellow Texan. He's now an investment banker.

And two years ago, they -- they didn't want Graham. They didn't think he'd be -- they thought he would be disruptive. But I think they're looking at him seriously. He's a very strong man at treasury.

WOODRUFF: We know he's an Aggie from Texas, for sure.

All right. Possible changes at Fannie Mae, the federal national mortgage association.

NOVAK: Investors, the whole Wall Street, is not happy with the accounting problems at Fannie Mae. Like to see Franklin Raines -- remember former OMB director under Clinton -- they'd like to see him go.

And there's a talk that Bob Zoellick, the U.S. trade representative, could be his replacement. Now, the new U.S. trade representative, there's talk about Bob Kimmitt with -- former ambassador to Germany, but I think that there's a lot of insiders who'd like to see Kimmitt as deputy secretary of state, a very strong figure under Condi Rice at State Department.

WOODRUFF: A lot of thinking going on right now about all this. The DNC needing a new chair, what are you hearing?

NOVAK: Senator Kerry, the presidential nominee, I am told, urged for -- urged Iowa Governor Tom Vilsack to run.

Now, Vilsack has also been almost endorsed by Harry Reid, the Senate Democratic leader, and I'm told that the House leader, Nancy Pelosi, likes Vilsack, too. He is the establishment choice against Howard Dean. And, it will be very interesting if Kerry gets -- beats Dean twice, for president and then for national chairman.

WOODRUFF: So did I understand you to say Bill Clinton weighing in on Tom Vilsack?

NOVAK: No.

WOODRUFF: Not yet. OK. I don't want to -- make sure I didn't...

NOVAK: No, no.

WOODRUFF: But John Kerry?

NOVAK: Yes.

WOODRUFF: OK. Harry Reid, freezing appointments confirmation.

NOVAK: Harry Reid is a master parliamentarian and in this lame- duck session, he has tied up all the appointments, because he wants his aid, Gregory Driscoll (ph), named to the Nuclear Regulatory Commission.

And there's a lot of opposition to Driscoll (ph), because he is anti-Yucca Mountain depository. So the nuclear industry has been fighting him. A lot of the Republican senators have put a hold on him.

And Senator Reid has said, "Hey, if you're going to block my man Driscoll (ph), I'm going to block all these other appointments." So they are in a gridlock up there right now. So, gee, it isn't as conciliatory as we thought it was going to be, is it?

WOODRUFF: Not sounding like that.

NOVAK: Not the same.

WOODRUFF: It sure isn't. So is that something that gets resolved before the lame-secession ends?

NOVAK: It's up in the air. It not only -- if they give in to Harry Reid and confront his man Driscoll (ph), all the others will go through. So it's a kind of a test of strength of -- of the new Democratic leader, too.

WOODRUFF: Bo, Novak, with his inside buzz, thank you very much.

And you can catch Bob this weekend as hits up Ben Stein for tips on retirement. It's all in the "NOVAK ZONE" tomorrow morning at 9:30 a.m. Eastern.

And no worries. Bob Novak is not retiring. In fact, we're going to see you tomorrow night on "CAPITAL GANG" at 7 p.m. Eastern.

NOVAK: Thank you, Judy.

WOODRUFF: Well, it's never too early for New Hampshire, John McCain put his straight talk to the Granite State yesterday. What did he say about 2008? Up next, we'll check in with our Ed Henry.

Plus, heavy hands on the Jill as Republicans in Congress consolidate power. We're in back in a minute.

(COMMERCIAL BREAK)

WOODRUFF: It's just about 4 p.m. on the East Coast. And as the market gets set to close on Wall Street, I'm joined by Lou Dobbs in New York for "The Dobbs Report."

Hello there, Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Hi, Judy. Thank you.

Stocks selling off as the dollar declines and oil prices soaring once again. It is a triple digit decline for the Dow Jones Industrials today. The final trades are now being counted, and the Dow has lost just about 113 points, perhaps 114 before it's over. The NASDAQ falling 32 points, losing 1.5 percent on the day.

The major stock indexes all ending lower for the week after three weeks of very strong gains.

The dollar continues to lose value against the other major currencies, declining to a four-and-a-half year low today against the Japanese yen. The decline comes on comments from Federal Reserve Chairman Alan Greenspan today. Greenspan warned that Washington must act soon to reduce the huge trade and budget deficits in order to prevent long-term economic damage. The Fed chairman said those huge deficits are making the already weak dollar even less attractive to investors overseas, and it will further weaken. As the dollar today declines, gold prices surged to the highest level in more than 16 years. Oil prices surging more than $2 a barrel today. That on renewed concerns about tight heating oil supplies this winter, and amid new problems in both Iraq and Russia.

American Airlines is slashing fares to and from Florida. That's a move that could ignite a full-blown fare war. Flights from airports to several cities will be cut by as much as 85 percent. American is trying to win back travelers from budget airlines.

Upcoming college graduates will find the most inviting job market in four years. Entry level hiring is expected to jump 20 percent, that according to a survey by Michigan State University. Industries offering the best and most jobs to new college graduates are transportation, retail, engineering, health care and hospitality.

Taking a look at what's coming up at 6:00 p.m. Eastern here on CNN on "LOU DOBBS TONIGHT" Republicans looking to repeal a food labeling law that is intended to inform consumers about the origins of the food they eat. They claim it's too expensive but Democrats say canceling the labels that lay out the country of origin will hurt American farmers and ranchers and deny consumers the right to buy American.

(BEGIN VIDEO CLIP) SEN. TIM JOHNSON (D), SOUTH DAKOTA: American consumers deserve to know the right of the origins of the food they feed their families. They know the origins of auto parts and T-shirts but for some reason the United States almost standing alone among the industrialized nations of the world, does not allow our consumers to know origins of meat or other food products.

(END VIDEO CLIP)

DOBBS: We'll have a full report tonight on what Congress is trying to do. Also tonight, Kofi Annan, the secretary general of the United Nations is facing a no confidence vote, the first in the organization's history. We'll have a special report on the scandals that have clouded Kofi Annan's term.

Also, intelligence reform legislation in jeopardy. I'll be talking about the down to the wire negotiations with Senate intelligence committee chairman Senator Pat Roberts and Senator Jay Rockefeller, the vice chairman of the Senate select committee on intelligence.

And then freedom of press under attack. A fundamental right in journalism is being able to protect confidential sources. My guest tonight is Senator Christopher Dodd, who is proposing a federal shield law that would help reporters protect their confidential sources. This comes after a Rhode Island reporter was found guilty of criminal contempt for refusing to reveal a source in his story. Back to Judy Woodruff.

WOODRUFF: Lou, the market reacting strongly to Alan Greenspan's warning. Is this something that people should be worried about?

DOBBS: Judy, I think it is something that everyone should be certainly concerned about. As we've been reporting here for the past year, this trade deficit is just unsustainable. It will reach $600 billion or thereabouts this year. That's creating just far too great a foreign debt. It is something that's going to be with us for some time, but there have to be policy initiatives taken and at this point, it is something for all of us to be concerned about.

WOODRUFF: All right, Lou Dobbs, and we'll see you at 6:00.

Thank you, Judy.

WOODRUFF: Thanks, very much.

INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: John McCain pays a visit to New Hampshire.

SEN. JOHN MCCAIN (R), ARIZONA: I can't tell you how happy I am to be back.

ANNOUNCER: The 2004 election is just two weeks old but some people already are talking about 2008.

UNIDENTIFIED MALE: People love politics in New Hampshire. We like to take at least three or four days after an election to relax and not think about politics.

ANNOUNCER: A new Congress is coming. Will the same old politics keep it deadlocked?

UNIDENTIFIED MALE: In too many ways it's become dysfunctional.

ANNOUNCER: We'll look at a new way to break the deadlock. Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. In the world of politics, it's never too early to start looking ahead to the next election. Don't turn the volume down. When a once and possible future presidential candidate like Senator John McCain decides to deliver a speech in New Hampshire, political watchers take notice. CNN's Ed Henry traveled to the Granite State for McCain's remarks and he joins me now with more. So Ed?

ED HENRY, CNN CORRESPONDENT: Everyone's tired of the last campaign. It is starting all over again.

WOODRUFF: Well, as we heard the senator say, just three or four days. That's all you need.

HENRY: The bottom line is Senator McCain told me that he agreed to give this speech several months ago. So this should not be read as a signal either way, that he's running or not running but that did not stop this morning's "Manchester Union Leader" from splashing this big headline, "McCain Leaves Door Open." They quoted the senator saying he's not ruling it out but he's not ruling it in either. There were about 400 people at this speech held at this same hotel where John McCain based his 2000 campaign. McCain grew wistful when I spoke to him about being back in the Granite State. So I asked him if this means maybe he's going to run again?

(BEGIN VIDEO CLIP)

MCCAIN: I can't tell you how happy I am to be back.

HENRY: So the door's open?

MCCAIN: No. There will be plenty of time. Thanks.

(END VIDEO CLIP)

HENRY: As you can see, Senator McCain was good humored about the speculation. Some people may think it's strange to discuss a race that's four years away, but Senator John Sununu the New Hampshire Republican told me it's never too early for his state to get ready.

(BEGIN VIDEO CLIP) SEN. JOHN SUNUNU (R), NEW HAMPSHIRE: People love politics in New Hampshire. We like to take at least three or four days after the election to relax and not think about politics but it only stands to reason that once things get going, people are going to want to visit New Hampshire, test the waters.

(END VIDEO CLIP)

HENRY: And his speech Senator McCain also tested his message perhaps as well. He talked a lot about a centrist vision, saying the country is much less polarized than a lot of people think and that the two parties can find common ground on major issues. McCain even had kind words for John Kerry, the man he rebuffed in the last election.

(BEGIN VIDEO CLIP)

MCCAIN: To those who thought it funny or wise to question John Kerry's courage or patriotism, I suggest they volunteer for military service and finish a tour in Iraq and then make a judgment about another man's -- and then make a judgment about another man's bravery or love of country.

(END VIDEO CLIP)

HENRY: There had been a report that John McCain tried to call John Kerry after the election and did not get a call back. McCain tried last night to downplay any talk of friction, saying the two men finally did make contact this week, they've spoken several times this week. McCain said their friendship is alive and well and he offered John Kerry some advice on how to pick himself up after losing a presidential run. Judy, now the question is whether or not John Kerry and John McCain will both be running against each other and testing that friendship in 2008.

WOODRUFF: We have a little time to figure it out. What's the view, Ed, your sense? Of course you cover the Hill. What's the view of the rest of the Republican party, the Republicans in the Senate of John McCain?

HENRY: They still view him as a maverick and the centrist vision he was trying to lay out last night that plays well in a state like New Hampshire. He won the primary in 2000, of course. In the other primaries across the country in some of the red states, that is not perhaps going to play quite as well. There are a lot of people up in the Senate Republican conference who think some more conservative senators like a Bill Owens in Colorado may play better in Republican primaries than John McCain would. That this vision he wants to lay out would play better in a general election than in a GOP primary.

WOODRUFF: Ed Henry, thanks very much. Fresh back from New Hampshire.

HENRY: Thanks and happy birthday.

WOODRUFF: Thank you very much. I appreciate that. It's not just Republicans who are thinking about this election. Democrats are, too. Since election day, Democrats have been scratching their collective heads for answers to the losses suffered by John Kerry and others. Of course, not all Democrats lost. Senator Evan Bayh was reelected to a second term by a margin that was a little better than President Bush's in his home state of Indiana. A little earlier I talked to the senator and asked him what he did that Kerry and other Democrats were not able to do.

(BEGIN VIDEOTAPE)

SEN. EVAN BAYH (D), INDIANA: Well, Judy, first, I have a lot of wonderful friends and supporter and they deserve the lion's share of the credit. On top of that, I've stood for some things that people in Indiana, including Republicans and some conservatives can support, things like economic growth, strong national security, making government responsible for its spending and producing results. Those kind of things, in addition to trying to embrace some enduring values like strengthening families that have always characterized middle America and I think after two terms as governor, now the Senate the people of Indiana know me well enough to know that I stand for those things and were willing to split their tickets.

WOODRUFF: Wasn't John Kerry embracing the same thing?

BAYH: Well, he was, Judy, but there was really effectively no presidential campaign in Indiana. Both sides wrote it off from the beginning. So there were some aspects of Senator Kerry's record, for example, welfare reform, balancing budgets, some of those things that would have played well in our state but the voters never had a chance to hear it. So it became a race between a conservative and a liberal and in our state, without more details, that's not a prescription for success.

WOODRUFF: What needs to happen for the Democrats to have a prayer of taking back the White House in four years?

BAYH: Well, I think we need to stand for some of the things I just mentioned, being the party of economic growth, not just economic redistribution. In a post 9/11 world, Judy, I don't think the American people will trust a political party with leadership, if we are not viewed as being adequately strong on national security. We have to do more than just mouth the words. People have to know that we truly get it and the changes that have taken place, making government accountable, making sure the American people know that the government works for them, not the other way around, and finally, some of those enduring values, things like patriotism, love of family, faith in God, that are cherished out in the heartland. I think we need to show that we embrace those, and are not in some ways culturally elitists.

WOODRUFF: How do you that without sounding like a Republican?

BAYH: We have principles we need to stand for, economic opportunity for those who weren't born to it. That means education, making college more affordable, providing health care opportunities for small businesses and others who are looking for them. So look, there are things that will differentiate us from the Republicans. Too often right now we have been differentiated from the values and the aspirations of too many of the American people. That's what we need to correct. I don't think we need to change our bedrock principles.

WOODRUFF: "The Hotline's" Chuck Todd has described you as the leading new candidate for president in '08. What do you say?

BAYH: There goes Chuck's credibility. Well, I'm flattered but I got to be honest with both you and Chuck. I think many Americans are probably envying the British system right now, where their elections only last 90 days. What we need now, Judy, is a season of progress, where we try and work together to reconcile our differences rather than to accentuate them and address the challenges that face the country. If we do that, I think the politics will take care of itself.

WOODRUFF: I hear you, but the fact is, if one is serious about contemplating a run for the presidency, isn't that something you have to make a decision about pretty soon?

BAYH: That would be conventional wisdom but I'm not sure that's right. Again, I think what people want are results and all the logistics and those kind of things you can wait a while on that. I think people are looking for something other than politics as usual and it would be refreshing if we actually had Democrats, Republicans, conservativists (ph) and liberals trying to reconcile their differences to move the country forward, rather than just engaging in endless politics, as interesting as that might be.

WOODRUFF: Very quickly, Senator, you're involved in creating this new group, Third Way. How is it different from the other centrist Democratic groups out there?

BAYH: Third Way Group will be focused specifically on the Senate and it's going to be focused on what I was just mentioning, results, to break through the partisanship and the sterile ideology and instead to say what can we do to forge a consensus about economic growth, getting the finances of the country under control, perhaps entitlement reform, health care, some of the basic issues and making the Congress work again, because in too many ways it's become dysfunctional.

(END VIDEOTAPE)

WOODRUFF: Newly reelected Democratic Senator Evan Bayh of Indiana.

A growing crisis affecting those least equipped to defend themselves. I'll talk with Senator Larry Craig next about the thousands of abused children waiting for adoptive parents.

Also ahead -- power plays on Capitol Hill are nothing new, but the latest could be award winners. Bill Schneider joins me later to explain.

(COMMERCIAL BREAK) WOODRUFF: It is a staggering statistic. According to a new report, more than 100,000 children who have been abused or neglected by their biological parents are languishing in foster care. All of them waiting to be adopted. The report by the Urban Institute was commissioned by a coalition of groups and companies that support National Adoption Day, which is tomorrow. Joining me now, Republican Senator Larry Craig of Idaho, the chairman of the Congressional Coalition on Adoption. Senator Craig, how could this be? Over 100,000 children.

SEN. LARRY CRAIG (R), IDAHO: Well, actually, that number is down a little bit, Mary, excuse me, Judy, but still, it's over 100,000. 129,000 that are now eligible for adoption. We've tried in our reform of foster care over the years to create the incentives at the state level to make those children eligible, and to raise the level of awareness so that families and individuals can adopt them.

WOODRUFF: Is the problem -- what is the problem? Is it there aren't enough willing families who want to take these children?

CRAIG: I think it's a combination of several things. We've incentivized the states to get these children eligible and we've moved the numbers up some in the last few years, but I think it is a matter of knowledge and understanding. It is a matter of economics. Some state laws are more prohibitive. It's a combination of things, but having said that, last year, this country adopted 120,000 children, that's the highest level ever. We've moved those numbers up substantially. The tragedy is there's so much more to do and so many children out there wanting and still needing a loving caring environment.

WOODRUFF: Senator, I was reading in connection with this that all 50 states had failed to pass the new federal review process. Is there something wrong in each one of these states or are these standards too high?

CRAIG: I'm not quite sure yet. We're disappointed by the numbers. Mary and I and the committee of interest will take...

WOODRUFF: You're referring to Senator Mary Landrieu, who is cochair with you.

CRAIG: Thank you. I am. That's right. Mary Landrieu and I have been partners in this process for a good number of years. We're asking the committee of jurisdiction to take a close look next year and get aggressive in this again as we move to reauthorize the foster care laws in this country, because these children deserve that loving nurturing environment. They shouldn't be languishing in foster care, even though many foster care parents are excellent caregivers. The love simply isn't a permanent love.

WOODRUFF: Senator, what do you think needs to happen? You've studied this issue, this situation for a long time.

CRAIG: Well, first of all, I would love to see a uniformity of laws across our country. All states have different laws, some states continue to err on the side of the natural birth parent, even though that parent may be terribly dysfunctional and never capable of taking on that child's responsibility again, but there's still that effort to try to connect and therefore, the child languishes in foster care. We need to continue to err on the side of the child. We changed that paradigm some years ago and created the federal law to be, if you will, pro-child instead of pro-birth parent and now we need to accelerate these children to get them into an adoptive environment.

WOODRUFF: Is there something standing in the way of that happening?

CRAIG: Not necessarily. We'll still have the conflicts of state law, and remember, these children are still wards of the state and state law has primacy in this area because when you deny a birth parent the right to the child or you sever that relationship, that is a legal action. Yes, we need to be cautious about it, Judy, but at the same time, the figure of 129,000 or 120-plus thousand is simply unacceptable with 500,000 in foster care, this is an issue that is of national importance, has to be dealt with.

WOODRUFF: It's certainly something that caught our eye as we approach Thanksgiving and the holiday season. Senator Larry Craig, we thank you very much. He is chairman of the Congressional Caucus on Adoption. We appreciate it.

CRAIGMAN: Thank you, Judy.

WOODRUFF: Thank you. The Congressional Coalition on Adoption, my apology, thank you.

Oh, the games they play. Coming up, just what the games are and who is playing. All part of Bill Schneider's political play of the week.

(COMMERCIAL BREAK)

WOODRUFF: Here in Washington this week we've more kicking of heels by the Republicans. Along with it, some flexing of political muscle. Joining us in Los Angeles with his take on all this our senior political analyst Bill Schneider -- Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Judy, you know, this White House doesn't fool around. And now, the strengthened Republican majority in Congress is saying neither do we. The political play of the week, if the rules get in the way, rewrite them.

(BEGIN VIDEOTAPE)

(voice-over): First there was this irritating little problem of a House Republican rule requiring any leader indicted for a crime to step down. With majority leader Tom DeLay facing possible indictment in Texas for campaign finance violations, House Republicans found a solution. Change the rule. Shield their leader from, in their view...

REP. HENRY BONILLA (R), TEXAS: Any partisan crackpot district attorney who might want to indict a member of our leadership.

SCHNEIDER: On the Senate side newly reelected Senator Arlen Specter alarmed conservatives the day after election by saying...

SEN. ARLEN SPECTER (R), PENNSYLVANIA: When you talk about judges who would change the right of a woman to choose, overturn Roe versus Wade, I think that is unlikely.

SCHNEIDER: The party immediately demanded that the Pennsylvania senator do penance if he wanted to become chairman of the judiciary committee so Specter went through all of the stations of the cross.

UNIDENTIFIED MALE: He presented his views to the leadership. He went before the judiciary committee. He answered every question to the satisfaction of each of the members.

SCHNEIDER: The party welcomed the errant sinner back to the podium.

SEN. ORRIN HATCH (R), JUDICIARY CHAIRMAN: He will be the chairman of the Senate judiciary committee.

SCHNEIDER: Specter immediately endorsed the controversial rules change that would stop Democrats from filibustering President Bush's judicial nominations.

SPECTER: If a rule change is necessary to avoid filibusters, there are relevant recent precedence to secure rule changes with 51 votes.

SCHNEIDER: In yet another rules change, Senate Republicans voted narrowly to give majority leader Bill Frist broad, new power to hand out powerful committee assignments without regard to seniority, power he can use to discipline moderates and keep conservatives in control.

UNIDENTIFIED MALE: I hope you'll see huge changes in how the United States Senate is run.

SCHNEIDER: We probably will, what with new rules, a tighter ship and the political play of the week.

(END VIDEOTAPE)

SCHNEIDER: The idea is to run the Senate more like the House, where the majority rules and the minority is ruthlessly suppressed. That doesn't sit too well with minority Democrats or with the minority of moderate Republicans -- Judy.

WOODRUFF: But, Bill, it may be the tightest ship we've seen in a while?

SCHNEIDER: We'll see if it stays afloat.

WOODRUFF: OK. Bill Schneider in Los Angeles. Thanks very much.

INSIDE POLITICS will be right back. (COMMERCIAL BREAK)

WOODRUFF: That's it for INSIDE POLITICS. Thank you for joining us. Have a good weekend. "CROSSFIRE" starts now.

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