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JUDY WOODRUFF'S INSIDE POLITICS

Ins and Outs at White House; House Whip: Intelligence Reform Could Still Pass

Aired December 3, 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: The revolving door at the Bush cabinet keeps swinging. He's out.

TOMMY THOMPSON, HHS SECRETARY: It's time for me and my family to move on to the next chapter in our life.

ANNOUNCER: And he's in.

BERNARD KERIK, HOMELAND SECURITY SECRETARY NOMINEE: I'm deeply honored and humbled by the opportunity to serve you and this great country.

ANNOUNCER: We'll look at all the changes at the White House.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I call on team owners, union representatives, coaches and players to take the lead, to send the right signal, to get tough and to get rid of steroids now.

ANNOUNCER: A call months ago for baseball to clean up its act. With this week's scandal, will Washington now get involved?

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

(END VIDEOTAPE)

JUDY WOODRUFF, HOST: Thank you for joining us. We begin with a second term exodus from the Bush administration. More than half of the president's cabinet is on the way out.

Now the health and human services secretary, Tommy Thompson, has handed in his resignation, and U.N. Ambassador John Danforth has done the same. The Thompson announcement came just hours after Mr. Bush appeared with his choice for homeland security secretary, former New York City police commissioner Bernard Kerik.

CNN's Suzanne Malveaux is covering the ins and outs at the White House.

Suzanne, literally ins and outs.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Judy, we've seen a lot of traffic today coming in and out of the White House. Those people, of course, are new to the administration and those who are leaving. Today, President Bush making his announcement, his replacement for Homeland Security Secretary Tom Ridge, that being Bernie Kerik. Now Kerik, of course, served as an enlisted military police officer in Korea, a jail warden in New Jersey, a beat cop in New York City and then former New York City police commissioner, but most notably he is known for the man who really got New York City back on its feet immediately following the September 11 attacks.

(BEGIN VIDEO CLIP)

BUSH: As police commissioner on September 11, 2001, Bernie Kerik arrived at the World Trade Center minutes after the first plane hit. He was there when the Twin Towers collapsed. He knew the faces of the rescuers who rushed toward danger. He attended the funeral of the officers who didn't come back. Bernie Kerik understands the duties that came to America on September the 11th.

KERIK: Mr. President, I understand, as you do, the tremendous challenge that faces America in securing our nation and its citizens from the threat of terrorism, and I know what is at stake.

(END VIDEO CLIP)

MALVEAUX: Now, also Kerik, as well, served in helping the transition and training Iraqi police force. He got mixed reviews for that. He also was by President Bush's side on the campaign trail, very much a loyal supporter of the president early on.

And we got another announcement later in the day after that. It was Secretary of Health and Human Services Tommy Thompson who made his announcement that he plans to resign. This was not a surprise.

However he is most notably known as the one who's responsible for that controversial landmark legislation providing prescription drugs to Medicare. Also, of course, he -- this makes him the eighth cabinet member to step down.

(BEGIN VIDEO CLIP)

THOMPSON: We touched the third rail of politics and delivered on our promise to modernize Medicare with prescription drug coverage, the most historic improvement to Medicare since it was created back in 1965.

(END VIDEO CLIP)

MALVEAUX: Now, even before he made that announcement, officials were actually talking about his substitute, his possible replacement being Mark McClellan. He is administrator for the Centers for Medicare and Medicaid services. He is also the former commissioner of the FDA. He's also the brother, it happens to be, of White House press secretary Mark -- Scott McClellan.

Now of course, Judy, you may be wondering whether or not any other announcements are expected. We are certainly keeping our eyes on those numbers. We look at eight of the 15 cabinet members so far who have resigned. It's not necessarily usual. We saw under Clinton and Reagan they had seven turnovers apiece. There have been some presidents who have had less.

But we expect, perhaps, more announcements in the days to come -- Judy.

WOODRUFF: And I think it's a fact that they're all coming so close together, and there was the additional surprise announcement of John Danforth leaving at the U.N.

But Suzanne, I want to ask you about there's been additional reporting that the White House planning to replace John Snow, at treasury. He had some comments about his future today.

MALVEAUX: Well, his comments were actually that he wasn't going to make any comments just quite yet. Of course, he says that he's not going to make anything public until he speaks with the president about his future.

We put in a couple calls into his office. Weeks ago, we were turned away from that, saying that that was not a possibility, that he was going to stay on. Now we are hearing that perhaps things have changed. We're just going to have to wait and see on that one.

WOODRUFF: Well, you can't take your eyes off that place right now.

MALVEAUX: Absolutely not.

WOODRUFF: Not that you ever do anyway. Suzanne Malveaux, thank you very much.

Let's talk a little more about the overhaul of the Bush cabinet with Mike Allen of the "Washington Post."

Mike, thank you very much for joining us.

MIKE ALLEN, "WASHINGTON POST": Good afternoon, Judy.

WOODRUFF: Let's talk about Bernard Kerik first. What credentials does he bring to run the Department of Homeland Security?

ALLEN: Well, Republicans say that one of the biggest advantages he will have is that he's an articulate, trustworthy, experienced person to talk to cameras in case there is a terrorist event. And it was a reminder of how much that's in the back of the mind of people who are running this government.

As you remember during the campaign, the vice president and others said an attack was almost certain. So this is something they're always thinking about.

And ironically, it's one of the things that was pointed out to us as a reason that the chief of staff, Andrew Card, wanted continuity in the staff and cabinet going into the new term, so they'd be prepared to deal with something big and unexpected. Now, Suzanne is pointing out, more than half of the departments getting new heads. You're not getting much continuity there. So some of these, I think are happening faster than they had expected or planed.

WOODRUFF: Well, it's one thing to have a good spokesman at the head of homeland security; what about his experience in terms of running this big, big department?

ALLEN: Yes, everyone I talked to in the administration cannot underscore the size of the challenge there. People, you know, very rarely do Republicans talk about anything in this government being a mess, but they certainly use that word with homeland security.

You know, brought together 22 agencies. Everybody always knew that it would be hard, but as one person put it to me with understatement, it has not exceeded expectations.

Now I talked to Mayor Rudy Giuliani today, who was -- recommended Mr. Kerik to the president, and he said people know he's a tough guy. People are going to be surprised at his management ability. And that certainly is a place that he has a chance to show it.

People say that they need to establish more clear lines of authority there, establish accountability there.

His detractors, Mr. Kerik's detractors, will say, well, he was Rudy Giuliani's bodyguard, and that's why he has this job. He went on to run corrections for him, went on to run the NYPD, which I didn't realize this, the mayor pointed out to me, that that's the largest law enforcement in the country, bigger than the FBI.

WOODRUFF: He really was Rudy Giuliani's bodyguard. Was Giuliani asked first to take this job?

ALLEN: I don't know the answer to that.

WOODRUFF: There was some reporting to that effect.

ALLEN: Yes.

WOODRUFF: I guess we may not know. That's one of those things it's hard to pin people down.

Mike, one other thing. Tommy Thompson stepping down. Speculation, we heard Suzanne talking about Mark McClellan, who runs the Medicare agency or that -- that sort of box of duties at health and human services. What are you hearing about that?

ALLEN: Well, Suzanne is right, as she always is. That is signed, sealed and delivered. We talk about the Bush administration keeping things in the family. This is a time it's a little more literal than usual.

But Mark McClellan has done a series of jobs for the president. Suzanne mentioned some of them. Also, he was on the Council of Economic Advisors. He has a lot of degrees. In addition to being an M.D., he has a Ph.D. in economics.

And, so, they're just finishing some paperwork, some vetting. We can expect that to be announced soon. Secretary Thompson, I believe, is going to stay in town, do something in the private sector. And he's been one -- he's had a ready to go sign out for quite a few -- quite awhile.

And we're starting to think that the veterans affair secretary, Anthony Principi, may be the last man standing.

WOODRUFF: Oh, my goodness. Well, maybe the McClellans are taking over the government. We'll find out. OK. His brother, of course, is the White House spokesman.

Mike Allen at the "Washington Post," we appreciate it.

ALLEN: Happy weekend, Judy.

WOODRUFF: Thank you. And you, too.

ALLEN: Thanks.

WOODRUFF: Well, Bernard Kerik would bring an impressive law enforcement resume to the job of homeland security secretary, but he is hardly a stranger to politics.

Among other things, Kerik was a featured speaker at the Republican convention in New York, invoking memories of the president's response to the 9/11 attacks. Kerik performed the same service when he appeared with the president on the campaign trail, just weeks before the November election.

Someone who knows Kerik well, former New York Mayor Rudy Giuliani -- we've just heard about him from Mike Allen -- is expected to talk today about the former police commissioner's nomination. We're planning live coverage of former Mayor Rudy Giuliani's remarks. That will come at 4:30 p.m. Eastern.

President Bush is said to be preparing a letter to Congress, a final appeal for the passage of intelligence reform this year. The letter, when it comes, would add to the pressure on House Speaker Dennis Hastert to hold a showdown vote next week, despite opposition from some Republicans.

Just a short while ago I spoke with House Majority Whip Roy Blunt. I started by asking him if Mr. Bush had called him to lobby for the bill.

(BEGIN VIDEO CLIP)

REP. ROY BLUNT (R-MO), HOUSE MAJORITY WHIP: No, I haven't gotten a call from the president, but I was with House leaders and Senate leaders for two or three days earlier this week.

We clearly spent some time talking about this, talking about the importance of some better understanding on the two issues that House members and, as it turns out, a number of Senate members still feel are outstanding issues that need to be dealt with, particularly the chain of command issue. And I think a lot may have happened on that in the last few days, Judy.

WOODRUFF: Well, we understand the president is sending a letter over to the Hill today. Do you know if that letter has arrived?

BLUNT: If it has, I -- I haven't seen it.

WOODRUFF: And we're also told that the president is asking the Congress to call this up for a vote on Monday. Do you know if that's the plan?

BLUNT: Well, we intend to be here and be voting on Monday and there's no reason we couldn't vote on this Monday if we have some understandings that our chairmen feel better about.

I think both the Chairman Sensenbrenner and Chairman Hunter have -- have had legitimate questions about how this bill was developing. We never had a signed conference report.

And we could do this on Monday, but it's going to take some willingness on both sides to discuss these issues, both of which are really critical to how this bill moves towards the future, something we're not likely to do again for another 25 years or so. We better get it right then time when we do it.

WOODRUFF: Well, it sounds like there's still some resistance to what the president is asking Congress to do.

BLUNT: Well, I think that could be right, and one of the reasons there might still be some resistance is that nobody has seen that letter yet. Nobody has seen the -- at least I haven't seen it. I don't think it's public yet.

So that the members who are at home, hearing from their constituents about this wouldn't see it.

But the very fact that we do see some movement there, I know there's been lots of discussion with Chairman Hunter and others about what we needed to do to ensure that the fighter on the ground has access to all of the information and intelligence they need at the time they need it, without it having to go through some third party source to decide if it's OK to let the war fighter know this is going on or not.

WOODRUFF: Well, we know the chairman of the joint chiefs, General Myers has now -- has signed on. What does it say...

BLUNT: You know, I don't know -- I don't know they signed on, Judy. I read that -- I read all I've seen about that in print, was that he showed some level of satisfaction, but mostly he's done what military guys appropriately should do, which is step back and say, "I'm happy now with whatever the administration and the legislature decide to do on this," which is exactly where the military should be. WOODRUFF: But what does it say about the president's clout if he is behind this, and he says he's behind it. The White House says he's behind it, but he's not able to get it out of a Republican majority Congress?

BLUNT: Well, I think it's important that the president address the issues. I think he's working hard to do it. My view is that we'll either get this done or we'll move forward with a commitment to have an even better bill next year.

I think there's a good opportunity now to get this done next week. And I think the fact that we didn't rush to do it before Thanksgiving has added some significant understandings to what we're doing when we rewrite intelligence reform for the first time since the years right after World War II, 50 years ago.

WOODRUFF: Did -- did the White House underestimate the degree of strong feelings about this legislation in the -- in the Congress?

BLUNT: I think it's possible that -- nobody realized going forward with this legislation after the election how many members expected that if this didn't happen by election day, it wouldn't happen until the next Congress.

There is a clear understanding that we don't do this -- we've only done this one other time. We've only really designed an intelligence network one other time, officially by law. That was in the 1940s. Here we are in 2004, the first time looking at it again, and the members want to be sure we get that right.

(END VIDEOTAPE)

WOODRUFF: I asked Congressman Blunt -- Roy Blunt if he would bet that the intelligence legislation reform would pass next week. He said he'd bet a little money, but not a lot.

Well, as the Democrats try to rebound from their election losses, would a friend of Bill make things better at the DNC? I'll talk with Harold Ickes about his political prospects.

With steroid use being targeted in the sports world, might Congress get involved in the controversy?

And, later, a man and a message, in the "Political Play of the Week."

(COMMERCIAL BREAK)

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

The Democrats may have lost the White House on election day, but they found success in the battle for campaign cash. In each election, since the Federal Election Commission began tracking political fundraising almost 30 years ago, there GOP has outraised the Democrats. But not this year. Between January 2003 and late November of this year, the Democratic National Committee raised about $390 million, while the RNC raised about $385 million. It was close.

The "Washington Post" reports total spending on the 2004 presidential campaign by all sources trying to influence the outcome is estimated at more than $1.7 billion. A lot of money.

Among the many Democrats assessing the 2004 campaign and where the party goes from here is Harold Ickes. He served as deputy chief of staff to President Clinton and most recently led the Media Fund, a 527 group that supported John Kerry for president. Harold Ickes joins me here in Washington.

It's good to see you.

HAROLD ICKES, FORMER DEPUTY CHIEF OF STAFF: Nice to be here, Judy.

WOODRUFF: Let's get right to the point. Are you running for chairman of the Democratic National Committee?

ICKES: I'm leaning very much towards it, have not made a final decision yet. And am still assessing, testing the waters, as it were.

WOODRUFF: Why would you want that job?

ICKES: Well, that's a good job -- good question. Some people have analogized it for being the deputy to the assistant sanitation commissioner of New York City. It is a brutal job. Anything that goes right, somebody else takes credit for; anything that goes wrong you get dumped on.

It is an important job, however, especially when the party, when we don't have the White House.

And I think Terry McAuliffe will go down as a really extraordinary chairman. The party is out of debt; we have a new building. He has acquired a huge database that puts the party on solid footing for the 21st Century.

As you just announced, he -- we for the first time in my memory, which goes back to 1968, the Democratic National Committee has outraised the Republican committee on money, and much of that is small dollar fund-raising, which is a testament to -- to Terry.

So, I think there is the basis now for the next chairman to really focus on state parties, helping them get back on their feet technically, financially and also focusing very much on communications.

WOODRUFF: There's a lot of desire to do that, but Harold Ickes, you are what they call a blue state Democrat. You live in Washington, D.C. You were raised in New York.

And I want to quote what Judith Hope, who is your friend, I assume, on the Democratic National Committee, said. She's a former New York state Democratic chairmen. She said, "Democrats need to reconnect with voters in the heartland of America, and I don't think an upper West Side reformed Democrat can really fill that bill."

ICKES: Well, I don't think it is where you're from, Judy. I think it matters what you talk about and what you say.

And the party has a real function in terms of getting state parties back in the business of grassroots activity. And I think that Terry has laid the basis for that. That's one of the challenges of the next chairman, and I think that Terry has laid the basis for that. That's one of the challenges of the next chairman. And I don't think it matters where you come from in order to do a good job at that. I have a lot of experience in the party. I was with the Media Fund, as you've talked. I was -- helped raise money for ACT, America Coming Together, which was the largest grassroots effort ever in the history of the party and it was very successful one.

WOODRUFF: Why did John Kerry lose this election or conversely why did George Bush win instead of John Kerry?

ICKES: I think Senator Kerry lost because he was not able to persuade enough Americans that he should have his hands on the tiller in times of national peril. The Bush campaign prosecuted one argument against Kerry and one argument only, it was about character. He was a flip-flopper and weak kneed, Northeastern Democratic liberal who couldn't -- wouldn't make the tough decisions in times of national peril. They put $175 million in media after that. They were wrong on the issue, but Kerry was not able to peacocking enough Democrats, who were interested in leaving Bush, he just couldn't make the sale. This was an election that was carried out against a war-time sitting president. It's a huge burden to take -- take on a job like that.

WOODRUFF: Does that suggest that John Kerry shouldn't think about running again in '08?

ICKES: No, I think that that will be up to the party and up to the primaries. I have no idea what his intentions are.

WOODRUFF: Peter Beinart, writes in the "New Republic" this month. He talks about how -- and I'm using his words, post-September 11th liberalism has produced leaders and institutions like moveon.org that focus on negatives. They're against the war in Iraq. They're against restricting civil liberties. They don't put to totalitarism, in his words and this gets to what you were saying to a degree, at the center of what this country should be focused on.

Is that a good analysis?

ICKES: I disagree with him. The Democrats need to focus on terror and international terrorism. It is a big issue. And 9/11 was the background against which this campaign was run and it overshadowed everything else, in my view. We need to focus on it. I think Senator Kerry did a good job. He just couldn't convince enough people that his hands should be on the tiller. But there are other issues that people are very concerned about, Judy. A good job, health care, education, those are traditional issues. I think we Democrats need to learn to talk about those issues more in terms of the values that underline them. There are real values underlying the fact that a person should have a minimum wage, shouldn't have to work two jobs and ought to be able to go home to his or her family.

WOODRUFF: Herald Ickes looking at being a candidate for Democratic Party chair. We'll look for a decision...

ICKES: Soon.

WOODRUFF: ... soon. All right. Good to see you. Thanks very much. We appreciate it.

ICKES: Thank you, Judy. Thanks a lot.

WOODRUFF: Some explosive reports about some of baseball's biggest stars. Up next, will leaders here in Washington make good on their tough talk about steroids in sports?

(COMMERCIAL BREAK)

WOODRUFF: New reports about steroid use by baseball sluggers Barry Bonds and Jason Giambi have renewed debate over Washington's role, if any, in stopping use of the performance enhancing drugs. The "San Francisco Chronicle" obtained transcripts of grand jury testimony by Bonds and Giambi. Last spring Senator John McCain warned the leader of baseball's players union "Your failure to commit to addressing this issue straight on and immediately will motivate this committee to search for legislative remedies."

The president, himself a former baseball team owner, called for a crackdown back in his January 2004 State of the Union Address.

(BEGIN VIDEO CLIP)

BUSH: The use of performance enhancing drugs like steroids in baseball, football and other sports, is dangerous and it sends the wrong message. That there are shortcuts to accomplishment and that performance is more important than character. So, tonight, I call on team owners, union representatives, coaches and players to take the lead. To send the right signal and to get tough and to get rid of steroids now.

(END VIDEO CLIP)

WOODRUFF: While Congress does not have the legal authority to force baseball to take action against steroids, it can threaten to strip baseball's long-standing legal exemption from the nation's anti- trust laws.

One of the biggest names that comes up in this steroids probe is Barry Bonds. We expect a statement from the San Francisco slugger's lawyer in just a few minutes. And when that happens, we'll have live coverage.

And later, they have counted the votes and they have counted them again in Washington State, but will they count them a third time in the deadlock governor's contest?

(COMMERCIAL BREAK)

WOODRUFF: It's just after 4:00 in the East. And as the markets get set to close on Wall Street, I'm joined by Lou Dobbs in New York with "The Dobbs Report." Hello, Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Thank you, Judy, hello. Job growth falling in November as employers scale back their hiring. The economy created just 120,000 new jobs in November. That's the weakest gain in five months, about half of what most economists had been expecting. The unemployment rate, nonetheless, did decline slightly. But the retailing and manufacturing sectors both lost jobs. Pay roll totals for September and October were also revised lower. About 8 million Americans remain unemployed.

Stocks on Wall Street today slightly higher, but the disappointing jobs report pressured the market. As the final trades are now being counted, the Dow Jones industrials are up about seven points. The Nasdaq up about three points. Upbeat news from Intel, helping lift technology stocks today, the chip giant dramatically raising its fourth quarter revenue targets, its shares gaining five percent on the day.

Consumers getting another break as oil prices continue to slide. Oil is down another 71 cents today, trading below $43 a barrel. The price of crude has fallen 14 percent this week on a strong supply outlook. A senior OPEC official says the group could decide to cut production when it meets next week if prices continue to fall. The dollar, meanwhile, continues to fall. It had been creeping up from all-time lows against the euro, but today falling back as new employment data raised concerns about the pace of the economic recovery.

Coming up on CNN at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," we'll be telling you about a major defeat and setback for American farmers. This week, the Department of Agriculture agreed to allow to allow more Mexican avocados imports into the country, that agreement a blow to U.S. avocado farmers. Mexico allows very few American avocados to be shipped to them.

Also tonight, overmedicated nation. Millions of Americans relying on Canada for cheaper prescription drugs. But now Canada wants to put an end to it. We'll have that report.

And Senator Charles Grassley wants to reform the FDA, which he says works too closely with pharmaceutical companies. He's also the man defending FDA whistle-blower David Graham, who first revealed the dangers of Vioxx. Senator Grassley is our guest tonight.

Also joining me, Senator Minority Leader -- Senator Harry Reid. Senator Reid will be here to discuss the Bush agenda, as well as his fight to form a message for the Democratic party and to strengthen his party's leadership. That's it from New York. Now back to Judy Woodruff in Washington -- Judy. .

WOODRUFF: Lou, thanks very much. And we will see you at 6:00 p.m. Eastern.

Right now we want to take you to Oakland, California, for more on the story of alleged steroid use in professional baseball. This is Mike Rains, he is the lawyer for the San Francisco Giants' Barry Bonds. Let's listen in.

MIKE RAINS, BARRY BONDS' LAWYER: The only person that the government lied to here was Barry Bonds, and the only person who didn't get to see documents before he took the stand -- or she and look at them and have some understanding or appreciation of what they were was my client.

Some of you may have seen after this case got going, the article in the "Playboy" magazine called "Gunning for the Big Guy" and some you may have thought, well, that sounds odd. It certainly did sound odd, but you know what? Given the experiences we've had -- Barry and I have had with the government here, we don't think it's odd at all. We think this has always been case of the Barry Bonds show. It hasn't been U.S. versus Contee (ph), U.S. versus Valenti (ph), U.S. versus Anderson, U.S. versus Corchimney (ph). It's been U.S. versus Bonds.

But of course, their attempts to wring out an indictment didn't occur. Barry testified truthfully to the grand jury. He was hit with documents he'd never seen before, documents he no idea who the authors were, of their origin or anything of the kind and we've never seen them to date. So I'm not in a great position to respond to what those documents purportedly are or what they say. They may be wholly fictitious. They may be creations by the government itself. We simply don't know.

But when he did take the stand, he testified truthfully. And he testified that his best friend, probably his best friend in the world, Greg Anderson, gave him shortly after the death of his father, two substances. Something he called lotion. Barry called it lotion. Or that's what he told me. And he gave him something else called flaxseed oil because Barry said he was fatigued, he was tired, he needed something to make him feel better.

Now, Barry and Greg had been working together training for about four years. And Greg knew what Barry's demands were. Nothing illegal. I won't do anything illegal. This is Barry's best friend in the world. Barry trusted him, he trusts him today. He trusts that he never got anything illegal from Greg Anderson, and his testimony would be -- his statement would be to you, if he were standing here, he did not take anything illegal. His best friend in the world did not give him anything illegal.

Now, Barry's concerns were not raised up when he was being given flaxseed oil by his best friend. Barry's concerns were not raised up when he was being given lotion by his best friend for a couple of different reasons. One, Barry Bonds gets approached probably 15 times a week by trainers, by vitamin companies, by others saying that they have the answer to everybody's health problems. They want him to take lotion, they want him to take cream, they want him to take pills. He gets this every day of the week. This is nothing new to Barry Bonds. And so he was not raised up with the notion that his trainer and his friend was offering him this.

Now, what "The Chronicle" apparently, or sort of, reported -- but I don't know if truthfully did -- is that Barry, at least, what he's told me -- and let me have it clear, I don't have his testimony. I don't have my own client's testimony, so I'm responding to what "The Chronicle" apparently says his testimony is.

WOODRUFF: We're listening to Mike Rains, the attorney for Barry Bonds of the San Francisco Giants. This -- these allegations about steroid use stem from a story in "The San Francisco Chronicle" on which, among other thing, Bonds is reported to have told a grand jury that he used substances provided by the trainer. You just heard his attorney Mike Rains saying this. The trainer -- and this trainer has been indicted in a steroid distribution ring. Bonds denied knowing that the substances were steroids.

So this is a story that has pretty much exploded in the news yesterday and today. This is Barry Bonds' attorney's response.

Back to INSIDE POLITICS now, and the way things are going with the George Bush cabinet, the administration may be able to get a good discount from a moving company. HHS, or Health and Human Secretary Tommy Thompson today joined the ranks of cabinet secretary existing in the president's second term, in fact, in the first month after the election.

Officials say he is likely to be replaced by Medicare chief Mark Mcclellan. In announcing his resignation, Thompson shared his concerns about the spread of the flu worldwide at a time when vaccines are in short supply.

(BEGIN VIDEO CLIP)

TOMMY THOMPSON, HHS SECRETARY: I'm putting it in the budget this year for $125 million for more work on pandemic flu. I really consider -- this is a really huge bomb out there that could adversely impact on the healthcare of the world.

(END VIDEO CLIP)

WOODRUFF: That's a pretty grim warning. Also today, the president formally announced his choice to replace Tom Ridge as the secretary of homeland security. Mr. Bush called former New York City Bernard Kerik "superbly qualified for the job."

With all the comings and goings at the White House, does any single change in the Bush cabinet stand out? Here now, our senior political analyst Bill Schneider.

BILL SCHNEIDER, SENIOR POLITICAL ANALYST: Well, you know, if President Bush is looking for a figure who embodies his message, he couldn't do any better than he did this week with the political "Play of the Week."

(BEGIN VIDEOTAPE) SCHNEIDER (voice-over): The bush message? In a word -- security. So he picked a security man for the nation's top security post.

BUSH: He knows something about security. He's lived security all his life.

SCHNEIDER: Bernard Kerik's been a private security guard in Saudi Arabia, a jail warden, a body guard, a narcotics detective and New York City's top cop.

BERNARD KERIK, FORMER NYC POLICE COMMISSIONER: In 1986 I stood in this very arena. I raised my right hand, and was sworn in as a New York City police officer. 14 years later -- 14 years later, Mayor Giuliani appointed me as the police commissioner of this great city.

SCHNEIDER: Kerik was there, right there, on 9/11.

KERIK: We do know there are people in the building that are alive.

SCHNEIDER: With his patron.

RUDY GIULIANI, FMR. NEW YORK MAYOR: I grabbed the arm of then police commissioner Bernard Kerik, and I said to him, Bernie, thank God George Bush is our president.

SCHNEIDER: 9/11 was the defining moment of the Bush presidency, and of Kerik's career.

KERIK: And I know what is at stake. On September 11, 2001, I witnessed firsthand the very worst of humanity and its very best.

SCHNEIDER: Another issue has come to define President Bush. Iraq. Guess who Bush sent to Baghdad to organize Iraq's new police force, and to make the case that Iraq and 9/11 are linked.

KERIK: I understand probably more than anyone what a threat Iraq was, and the people that threatened Iraq was. I was beneath the towers on September 11 when they fell.

SCHNEIDER: Kerik was Giuliani's man.

KERIK: My friend and mentor, Mayor Rudolph W. Giuliani.

SCHNEIDER: Now he's Bush's man.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Bernie Kerik understands the duties that came to America on September 11.

SCHNEIDER: Quite a career move and the political play of the week.

(END VIDEOTAPE)

(on camera): New Yorkers are very happy with the choice of Kerik, even the Democrats. Why? Money. Senator Chuck Schumer said, quote, "I am confident that Bernie Kerik will treat New York a whole lot better than homeland security has treated us in the past. Money.

WOODRUFF: Very interesting. Bill Schneider, play of the week. we appreciate it.

And another reminder that former New York City mayor Rudolph Giuliani is expected to talk today about Kerik's nomination. That's supposed to happen later this hour. We plan live coverage at around 4:30 p.m. Eastern.

We don't want insights to get lost in the Bush cabinet shuffle. Up next, our panel calls the changes at the top as they see them.

Also ahead, will there be another recount in Washington state? We'll have the latest as the close as they come governor's race.

Plus, snapshots from Louisiana on other votes still up in the air.

(COMMERCIAL BREAK)

WOODRUFF: We bring now to talk about some of the week's top stories. Three of favorite contributors Liz Marlantes of the "Christian Science Monitor," Jonah Goldberg of "National Review Online" and Peter Beinart of the "New Republic."

Let's talk first about all of these defections from the Bush cabinet. People leaving, coming. At this count eight and we're told there may be even be more out of 15 people in the cabinet plus John Danforth at the U.N. Peter, what does this say about the president's second term?

PETER BEINART, "NEW REPUBLIC": I think it says that being a cabinet minister, as cabinet secretary is not that great a job in the Bush administration, because decisions are made in a tight-knit group in the White House. Your job is to sell the policies that has already been made. That's not that exciting if you're someone like Tommy Thompson at health and human services who thought he was kind of a big deal when it came to social policy. This is a new group of people who understand or will soon understand that their job is to take the policies that are already made at the White House and go out and be a good salesman.

WOODRUFF: Is that what it's all about, Liz?

LIZ MARLANTES, "CHRISTIAN SCIENCE MONITOR": Yes, I agree with that to some extent. That was interesting that Tommy Thompson said at his press conference today that he might run for office in the future, seeking a slightly more glamorous role perhaps, but I do think we should point out that this isn't unusual, a lot of second terms you see a cabinet exodus like this. It's getting played as an exodus. I noticed today that the A.P. has an item on who is left in the Bush cabinet which is already (UNINTELLIGIBLE) because they had Thompson on the list, but Clinton, I think ten of his cabinet secretaries turned over at the start of the second term. This isn't really all that unusual. In a way what's unusual is that so many of them lasted as long as they did.

WOODRUFF: So does it say anything about Bush?

JONAH GOLDBERG, "NATIONAL REVIEW ONLINE": I think does. I think what is unusual is not so much the people leaving but the people they're being replaced with. Karl Rove and George Bush have spent a lot of time thinking about why second terms go bad. One of the main reasons is because you get a lot of cabinet secretaries who start developing their own political agendas, they start leaking to the press for their own purposes. Like Tommy Thompson, they want to run for office. The best way to compete with that is twofold. One is have a big ambitious agenda that soaks up the energies of the administration, and secondly, put loyalists in those positions, not politicians. Guys committed to your agenda rather than their own. And whether it's good or bad for the country, all those sorts of things aside, I think it's been very shrewd tactics so far that they are succeeding as much as they have.

WOODRUFF: So this could end up being a net-plus for the president? Too early to say?

BEINART: No, I think it could. Look, Carlos Gutierrez (ph) is going to be a very impressive figure to have out there in a long-term effort for this president and this party, which is to get more of the Hispanic vote. It was a very shrewd political decision. Bernie Kerik at homeland security is also very shrewd. A personal reminder. One of the people said in the press, a symbol of 9/11, to have there in the cabinet. Politically, these are smart decisions.

MARLANTES: I agree. I think those are symbolic decisions. I mean the department of homeland security has had a big image problem throughout. Now they've got a guy who looks like Kojak in there, who is going to come in, hopefully make people feel more secure.

WOODRUFF: Peter, I want to come back to you. You did write a piece. In fact, I asked (UNINTELLIGIBLE) about a little bit earlier in this week's edition of the "New Republic" pretty much going after the Democrats saying there's too much sort of anti-this and anti-that, but there's not enough what are you for and there's not a corps of the party that really stands for fighting terrorism. Am I describing your point?

BEINART: Yes, that's right. My argument is that Democrats have to convince the country that they have passion about winning the war on terrorism. They can have criticisms of the Bush administration's policies but they have to be passionate about winning this war. And the party at the grassroots right now I don't think doesn't has that passion. It used to. It did at the beginning of the Cold War, in the fight against communism. But it doesn't today. And unless it recaptures that it won't be able to convince the country it can be trusted in the era when national security is most important.

WOODRUFF: Jonah, from your perspective is that what ails the Democrats?

GOLDBERG: I think so. This is a very old story that, Peter, is sort of coming in late in the movie. Ben Watenberg (ph), the DLC, were trying to move the party to fight the McGovernite tendencies that were coming in the 1970s. Jean Kirkpatrick, Richard Pearl, a lot of those guys who wanted to be hard on communism found it was impossible to fix the base of their own party so they became Republicans. I think Peter's piece is great and I salute it, but I think the problem is what he wants to do is he wants to replace the base of the Democratic party, and there's no other base available to do that.

WOODRUFF: Liz, what's your take?

MARLANTES: I do think that based on my experiences reporting out on the campaign trail, you'd go out and talk to Democratic activists. Yes, terrorism was not usually the top issue that they cited in terms of what they were concerned about, but I don't think they wouldn't have been willing to nominate a hawkish candidate. I don't necessarily think that the candidates who were more hawkish lost because of that reason. Mostly what was striking about Democratic activists during the campaign, was how hungry they were to win and I think they very pragmatic in some ways about that and probably would be still going forward, if the party can come up with the right candidate.

WOODRUFF: You're saying the party has become too pacifist?

BEINART: I think that's right. I wouldn't quite use the word pacifist, but I do think that the war on terrorism has been defined for many Democrats through the Bush policies that they really don't like. And they have confused their opposition to those policies. Understandable in some measure, with the larger project of defeating al Qaeda, which has to be a liberal project, has to be passionately felt by liberals.

WOODRUFF: Jonah, quick last word.

GOLDBERG: I'm not somewhat sure it was the Democratic opposition to the policies as it was to the person. I think if Bill Clinton had been in office and put through all these policies, you'd have seen the Democratic party marching in lockstep with a lot of these policies and a lot of these policies really weren't that bad.

WOODRUFF: This is a subject that certainly could bear much more discussion than we're giving it today, I hope we can come back to it again. Peter, thank you very for putting it on the table for us. Liz, Jonah, thank you all three. Have a good weekend.

The Republican won the machinery count, but is the race really over? Up next, new developments within the last hour in the overtime race for governor of Washington state.

(COMMERCIAL BREAK)

WOODRUFF: Listen to this. It turns out President Bush's Ohio victory was a little tighter than first thought. After yesterday's deadline for Ohio counties to certify their final vote totals, including provisional ballots, the Associated Press reports that Bush defeated Kerry in Ohio by about 119,000 votes. That is less than the unofficial 136,000 vote margin reported on election night. Provisional votes making the difference.

Right now we want to take to you a news conference, former New York City mayor Rudy Giuliani commenting on his former patron Bernard Kerik being chosen to run the department of homeland security.

(BEGIN LIVE EVENT)

GIULIANI: Many of the commissioners and police chiefs around the country come from the New York City Police Department. You can go to Florida. You can go to California. You can go to Indianapolis. You can go to Indiana. You'll find people from the New York Police Department. So this is a great thing for the country and a great thing for New York.

QUESTION: (OFF MIKE) New York and the federal government, what can Kerik do to (OFF MIKE).

GIULIANI: Well, Bernie will understand immediately, in a way that few others can, what it means to be a first responder, because he was one, both as a police officer and as a police commissioner.

Bernie is one of the few people that's lived through a terrorist attack and had to deal with it from a command level. So he'll understand what's necessary for that.

And he also understands the position New York is in as one of the primary targets, as well as a number of other places.

So I think Bernie will balance that against the needs of the rest of the country, and I'm sure that New York will come out in a good position, a fair one.

QUESTION: Mr. Mayor, any truth to rumors that you were selected for the job first and turned it down?

GIULIANI: No. I have never been selected for the job.

I made it clear that I'm not able right now to leave and go into government. So I didn't ask to be considered for and I wasn't considered for any job in the administration, not that I don't have tremendous respect for the president. I'd do anything I can to help him be successful.

But given my responsibilities in my business right now, I really couldn't -- I couldn't do it. It would not be possible for me to do it.

So I'm very happy that someone that I know as well as Bernie and have so much confidence in is in this position. It's great for the country.

QUESTION: Mr. Mayor, some members of the New York congressional delegation say they hope that Bernie, when he gets to Washington, will be more bipartisan because during the campaign, necessarily, he was very partisan in favor of George Bush, saying that if Democrats got elected there would be more terrorist attacks. They're hoping he'll be more bipartisan.

GIULIANI: Well, that's what happens after an election. I ran for office three times, got elected twice, and I was pretty partisan when I ran, but the day I got elected I realized I had to serve all the people, Republicans, Democrats, independents. Bernie understands that.

During the heat of a campaign you say a lot of things, probably make the strongest case for your candidate. That's what Bernie was doing. That's what I was doing.

But Bernie understands that he has to work with Republicans, Democrats, liberals, conservatives. And I think it says a lot for Bernie that both Senator Clinton and Senator Schumer immediately made very, very strong statements in support for him, because I think they remember that as the police commissioner, he was somebody you could always work with.

(END LIVE EVENT)

WOODRUFF: Former New York City mayor Rudy Giuliani, having some nice words about Bernard Kerik, chosen by President Bush today to be his nominee to head up the department of homeland security. Bernard Kerik, former New York City police commissioner.

In Washington state, the Democratic party has called a news conference next hour, and party officials are expected to announce whether they will call for a hand recount in that state's razor thin race for governor. Katherine Barrett has more from Seattle.

(BEGIN VIDEOTAPE)

KATHERINE BARRETT, CNN CORRESPONDENT (voice-over): They are still sparring. A month after election day, contenders for the top job in Washington state are suiting up for a likely round three.

UNIDENTIFIED MALE: What a great day.

BARRETT: After two vote tallies, Republican Dino Rossi was declared governor-elect on Tuesday, but his win was so thin just 42 votes that opponent, Christine Gregoire refuses to concede.

UNIDENTIFIED FEMALE: My friends it is a tied race.

BARRETT: Later today Washington's Democratic party is expected to request a third ballot recount. This time by hand.

PAUL BERENOT, WASHINGTON DEMOCRATIC CHAIRMAN: We have believed from the beginning that she won this election. The first two counts were very close. And the only way that you can really get down to the bottom of who won this election is through a manual recount. People don't trust these machines. The machines don't pick up every vote.

BARRETT: Both candidates and Washington's current governor, Democrat Gary Locke have said they favor recounting all ballots, statewide, rather than just select precincts. But how many votes will be counted hangs on how much the party can raise to pay the 25 cents per vote cost. John Kerry's campaign sent a quarter million dollars. Howard Dean's group, Democracy for America, also is asking its members to help. Still, some say a hand recount may not be the fix. And could actually be less accurate than the last one.

PROF. DAVID OLSON, UNIVERSITY OF WASHINGTON: Most political scientists agree that the hand recount is not going to be as reliable as is an electronic machine count. Most political scientists could also agree that the principled thing to do is to make every vote count and to take it through to its end. So we're left with this dilemma.

(END VIDEOTAPE)

WOODRUFF: That report, from CNN's Katherine Barrett in Seattle. Again, Washington state Democrats are expected to announce their decision about a possible hand recount in just about one hour from now.

The '04 election also may seem never ending to some Louisiana voters. The last two undecided U.S. House races will be decided there tomorrow. CNN's Jennifer Mikell reports on the runoffs in campaigns that have been getting uglier since November 2.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I haven't had this much fun since we beat John Kerry.

JENNIFER MIKELL, CNN CORRESPONDENT (voice-over): Now Vice President Cheney hopes Republicans will get one last laugh in Louisiana. He's there this week stumping for GOP candidates in the two congressional districts still up in the air.

BILLY TAUZIN III (R), LOUISIANA CONG. CANDIDATE: Today is what this campaign is about. Energy and enthusiasm.

UNIDENTIFIED MALE: Stop by, vote on Saturday.

MIKELL: Lobbyist Billy Tauzin III is hoping to keep Louisiana's third district in the family. His influential father is retiring after more than 20 years in the House. Republicans boast the younger Tauzin is politically connected.

AD ANNOUNCER: Who's phone call is President Bush going to return?

MIKELL: But Democrats portray the 31-year-old Tauzin as too young and inexperienced in mocking attack ads.

AD ANNOUNCER: They know little Billy Tauzin III. He is just not ready for Congress.

MIKELL: Tauzin's Democratic opponent, former state representative Charlie Melancon has a heftier resume, all the more fodder for Republican attacks.

AD ANNOUNCER: Liberal Charlie Melancon worked hard to elect John Kerry.

MIKELL: The national parties are helping to stir the pot in Louisiana, spending upwards of $5 million in the third district alone.

UNIDENTIFIED MALE: They're fighting over this little postal parishes in Louisiana as if the White House were at stake.

MIKELL: In Louisiana's seventh district, Republican Charles Boustany, a retired heart surgeon faces Democrat and former Lake Charles mayor Willie Mount.

Democrat Chris John gave up the seat to run unsuccessfully for the Senate. In this runoff, the Republican also would like to ride President Bush's coattails, just weeks after he won 57 percent of the vote in Louisiana.

AMY WALTER, "COOK POLITICAL REPORT": The fact that they are trying to show to voters their conservative credentials, one way to do that is it say, I'm close to the president.

MIKELL: Runoffs are standard fare in Louisiana's unique open primary season. If no candidate gets more than 50 percent in the November vote, it's on to a runoff in December. This winter Democrats are hoping to ease their fall election blues by winning at least one of the Congressional runoffs.

WALTER: Even if they were able to hold on to one of these seats to be able to say despite all the conventional wisdom out there Democrats do and can win in red states.

MIKELL: Beyond bragging rights the Louisiana runoff won't change the bigger political picture, the Republicans will control the House no matter how Saturday's vote turns out. Jennifer Mikell, CNN.

(END VIDEOTAPE)

WOODRUFF: And we'll report on those Louisiana results on Monday's INSIDE POLITICS. That's it for this Friday edition of INSIDE POLITICS. I'm Judy Woodruff. Have a good weekend. "CROSSFIRE" starts right now.

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