Return to Transcripts main page

INSIDE POLITICS SUNDAY

President Urges Congress to Pass Intelligence Reform Bill; Restocking the Cabinet

Aired December 5, 2004 - 10:00   ET

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

KELLY WALLACE, HOST: INSIDE POLITICS today, unfinished business on Capitol Hill. The president urges Congress to take action now on intelligence reform. What's the hold up? We'll debate with Congressman Charlie Rangel and Congressman Mike Pence.
Restocking the cabinets, from homeland security to health and human services we have the latest on the president's team for his second term.

And how politically incorrect are you? The PC police are clamming down on words and phrases you may use every day. That's all straight ahead.

ANNOUNCER: Live from Washington. This is INSIDE POLITICS SUNDAY.

WALLACE: We will cast an eye across the political landscape with just 46 days left until the presidential inauguration. Happy Sunday to you. Thanks so much for joining us. I'm Kelly Wallace in Washington. As you know by now, politics doesn't take weekends off and neither do we. Another jam packed hour ahead. So, let's get right to it.

We begin with the last minute push for a bill that would dramatically overhaul the nation's intelligence agencies. Just moments from now top members of Congress go head to head here on the crucial issue, as Congress comes back this week for what is likely to be a final lame duck session.

The question is, will the bill be voted on or will it die in this Congress? That was a big focus on the Sunday morning talk shows. The Senate's incoming Minority Leader Democrat Harry Reid of Nevada spoke out on NBC's "Meet the Press."

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MINORITY LEADER: This is a hold up. These are people who are -- who have committees, Sensenbrenner and Hunter and they want to maintain power, power. This is not about power. It's about keeping the American people safe. And the president, I repeat, should intercede anyway that he can.

(END VIDEO CLIP)

WALLACE: Another issue getting plenty of attention on the Sunday shows, the use of steroids in baseball after this week's revelations about baseball greats Jason Giambi and Barry Bonds.

On "Fox News Sunday," Republican Senator John McCain said Congress might take action against major league baseball and help guide high school athletes away from steroids.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) ARIZONA: The important aspect of this issue is that high school kids all over America believe that this is the only way they can make it. Ask any high school coach. This is the tragedy of steroids. And we all know that it will destroy a young persons body and that's why we've got to bring this to a halt.

(END VIDEO CLIP)

WALLACE: And a quick look at other political headlines this Sunday morning. Pakistan's president speaking about the hunt for Osama bin Laden, telling CNN that he does not know where the mastermind of the September 11th attacks might be.

Pervez Musharraf also says his troops are hunting all terrorists, not just Osama bin Laden. His country recently cut back the bin Laden search along part of the Afghan border. On Iraq the Pakistani president told CNN's Wolf Blitzer the January elections must be successful.

(BEGIN VIDEO CLIP)

PRESIDENT PERVEZ MUSHARRAF, PAKISTAN: My view is the direct action in Iraq to make sure that we stabilize and we have the elections after stabilizing and make sure that the elections are successful. And then only should we have an exit strategy.

(END VIDEO CLIP)

WALLACE: And you can see CNN's full interview with the Pakistani president on "LATE EDITION" with Wolf Blitzer at noon eastern.

During that meeting with Musharraf, President Bush was asked about outgoing Health and Human Services Secretary Tommy Thompson's candid comments about food safety. Those comments made front page news, fears that terrorists could tamper with the nation's food supply.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT, UNITED STATES: Tommy was commenting on the fact that we're a large company -- country with all kinds of avenues where somebody could inflict harm and we're doing everything we can to protect the American people.

(END VIDEO CLIP)

WALLACE: And Secretary Thompson said in his speech Friday that he worries quote, "Every single night about a possible terror attack on the food supply." And now a look at the weekend's news magazines before they get to your mailbox.

"Inside U.S. News and World Report" with JFK and a young Caroline on the cover. Check out the "Washington Whispers" column for the buzz on political books.

Senator John Kerry's daughter, Alexandra, reportedly tells volume sin a book that she is pitching that could complement the movie she is making about her dad's presidential campaign .

Also sharing their back lot stories, departing GOP Chairman Ed Gillespie and Democratic strategist James Carville. Senator Barbara Boxer is taking the fiction route with the political romance thriller.

And in a "Newsweek" poll released this morning Americans are split on whether they are satisfied with the way things are going in the United States. Forty six percent say they are satisfied. The same number say they are dissatisfied. Though that's a drop of 10 points from October it is the first poll taken since President Bush was re-elected to a second term. The first poll we believe in "Newsweek" magazine after the president's re-election.

Now back to our top story. Congress taking up the intelligence reform bill when it returns for a short session this week. Portions of it still face stern opposition from House Armed Services Committee Chairman Duncan Hunter and other conservatives.

Here to discuss that bill, U.S. troop levels in Iraq and much more our New York Democratic Congressman Charles Rangel, the ranking member of the House Ways and Means Committee joining us from New York City.

And here in Washington Republican Mike Pence of Indiana, member of the International Relations Committee.

Gentlemen thanks to you both for joining us today. We appreciate it.

REP. MIKE PENCE, (R) INDIANA: (UNINTELLIGIBLE).

REP. CHARLES RANGEL, (D-NY) WAYS AND MEANS COMMITTEE: Thank you, Kelly.

WALLACE: Congressman Pence, let me begin with you. You heard President Bush in his radio address yesterday. He said, "I urge members of Congress to act next week so I can sign these needed reforms into law." The question is, will House Speaker Dennis Hastert bring this bill to the floor for a vote?

PENCE: Well, we hope so. But Kelly I think I and many house conservatives are very anxious to see us bring a bill tot he floor that at its very essence does no harm to the interest of the war fighters in the war on terror. And when we have the chairman of the Housed Armed Services Committee and now, as CNN broke yesterday, the chairman of the Senate Armed Services Committee... WALLACE: John Warner...

PENCE: ...saying that if we make -- if we pass this legislation without clarifying the chain of command, without making sure the Pentagon has control over those surveillance satellites to provide that real time intelligence to the guys on the ground we're going to do some harm and the House conservatives aren't going to go...

WALLACE: Your own president, your own president is saying he wants it. The White House we know is working on a letter to send to House and Senate leaders. Are you planning to kind of turn your back on the president and not vote for this legislation if it's not changed?

PENCE: Well let me say I don't -- a lot of the media are saying this is a bit of a feud between House conservatives and the president. I think it's a bit of an argument between frankly the House and the Senate, which is very healthy.

Under the Constitution of the United States, Kelly, while the Pentagon has to fall in when the president gives an order the Congress does not have an obligation to fall in when the commander and chief gives an order. It's our job to deliberate, to create a product that will see to the best interest of our armed services and the protection of our citizens.

WALLACE: Let me bring Congressman Charles Rangel in here. Congressman do you believe President Bush ultimately wants this bill passed?

RANGEL: That's hard to say since the Joint Chief of Staff and Pentagon officials have not really given the bill the type of support that the president indicates that he wants. But let me make it clear, this is not a battle between the House and the Senate.

The Senate passed this bill 98 to 2. No one challenges the fact that the Speaker has the votes in the House of Representatives to overwhelmingly pass this bill. The fight is between Republicans in the House. And so they've decided instead of just beating up on us they've got to beat up on the president. But they don't want Democrats to pass this bill with Republican support. So...

WALLACE: Congressman Pence let me bring...

RANGEL: ...that's the problem.

WALLACE: ...you in there. Because if this bill came to the floor, as Congressman Rangel says it would pass. More Democrats though would support it than Republicans so it would pass with those Democratic votes.

Isn't this something that just makes people kind of sick about Washington. That there is a measure that has enough support in both houses of Congress to pass but it is not coming to the floor because House Republicans don't necessarily want it to come to the floor if a Majority of Republicans don't support it? PENCE: I actually think, Kelly, that it has got to be very encouraging to millions of Americans who see that despite the overwhelming popularity of passing some kind of a 9/11 bill Congress, at least in the House and with the chairman of the Senate Armed Services Committee's help is doing its job deliberating thoughtfully.

Look, when you have the chairman of the House Armed Services Committee stand up in front of our caucus and say if we pass this bill without specific language that insures that our military has control over the satellite technology that gathers real time intelligence for the war fighters on the field, that we will put those war fighters in greater jeopardy.

I think the American people want Congress to be careful as we advance the national interest.

WALLACE: Let me bring Congressman Rangel in here. Because congressman, as you know, this is also raising some concerns from former CIA directors including George Tenet who expressed some concern about this director of all the national intelligence agencies, the proposal, who would oversee the CIA director. He has some concerns about that.

This is what he said speaking to an e-gov institute conference according to government computer news as reported in "The Washington Post" on Thursday. He said quote, "I don't think you should separate the leader of this country's intelligence from a line agency. This person has to be leading the men and women every day and taking risks."

What do you say to George Tenet's criticism here, congressman?

RANGEL: I think George Tenet ought to just get out of town. It was his advice tot he president that invading this country was a slam dunk and got us involved in walking into the jaws of hell for a war that we can't win. If there's one guy that we don't want to hear from it's Tenet.

The truth of the matter is that we don't have a -- any security here. The people elected the president of the United States because he gave some sense that he could get us out of this war to have us to feel more secure.

Now he, the commander in chief, are asking the majority Republicans to give him some help with a bill. Now the question is whether or not the military would have access to the intelligence or whether or not we're not just going to have a bill for two months until we get back. That is a frightening thought.

WALLACE: Congressman Rangel do you make something of the fact that Defense Secretary Donald Rumsfeld -- we now know that President Bush has asked him to stay within his administration for a second term. Secretary Rumsfeld has not been overly enthusiastic about this measure. Do you believe that the secretary's influence is something that is being taken into account here about the White House's actions on this measure? RANGEL: I have no way of knowing, but I wish Rumsfeld would speak out publicly so that it would clear the air as to whether or not the Pentagon and the Defense Department and the CIA are supporting the president of the United States.

Remember it was Rumsfeld who said that he didn't know whether we were winning or losing the war. He did not know whether we were creating more terrorists than we were killing. He called the whole thing a sloth (ph) so that it's very fuzzy as to where the Republicans are on that. But it would seem to me, after the people have spoken and the president was reelected, the least they could do is give him an intelligence bill even if it will be a bi-partisan effort.

WALLACE: Congressman are you optimistic? Will there be he changes you and other conservatives want and that this measure will come to the floor for a vote?

PENCE: I actually am very optimistic. You know, there were immigrations reforms in this bill that we fought to include, national drivers license standards that frankly ought to be in this bill or we ought to get right at it after the first of the year.

But I really believe with the strong leadership of the president of the United States and now with the chairman of the Senate Armed Services Committee joining the chairman of the House Armed Services Committee we're going to bring the folks together. We're going to figure out the language that make sure that our war fighters on the ground get the real time intelligence that they need when they need it. And that's really what this is all about.

WALLACE: OK. Let's switch gears to the situation in Iraq. As you both know, the Pentagon announcing an increase in the troop levels inside the country to about 150,000 troops, about 10,000 troops having their tours extended. Some 1,000 or 1,500 troops going overseas.

Congressman Pence let me ask you. Senator Joe Biden, a top Rep -- Democratic senator you know in the Senate said that there is basically not enough candidates coming from this administration. He says that any possibility of America not having significant troop levels here for three, five, seven years is out of the question. That that's going to be the case, but that the U.S. the president, the military are not being candid. What do you say to that?

PENCE: Well I -- Senator Biden must be hearing different things than I'm hearing. I -- it's always been my sense having been to -- over to Operation Iraqi Freedom on several occasions that this president has been very candid about our long term commitment to see Iraq through to stability and democracy.

WALLACE: Could we see 150,000 or more U.S. troops in Iraq for three, five, seven years from here on out?

PENCE: Well, I think what the president eluded to and by extending some stays they are now taking our troop level up I think by 12,000, Kelly. It's all about making sure that we have the troop compliment on the ground to ensure the successful election of an Iraqi civilian government at the end of January.

And then once that's in place the hope is we'll begin to move toward the ability to draw down American forces while the Iraqi military and security forces take over their own challenges.

WALLACE: Last word from you Congressman Rangel. What do you think this president should be doing or do you think he is doing in terms of U.S. troop levels inside Iraq?

RANGEL: I think that this thing goes far beyond Iraq. The president made one big mistake in getting there. They're paying up to $30,000 for high school graduates coming from areas of high unemployment, $60,000 to get enlisted men to re-enlist. They're missing their mark. They'd better start thinking about the draft so we can get out of the war.

We've got to deal with the issues with Palestine and Israel and we've got to bring in the so-called Arab friends that we have in order to negotiate some kind of a peace. We're killing people. We have no clue as to whether we're wining or losing and I don't see how we can possible have elections there with all of the casualties and murders that are taking place.

WALLACE: All right. We're going to have to leave it there. Congressman talking about the elections slated for January 30th inside Iraq, Democratic Congressman Charles Rangel joining us from New York and Republican Congressman Mike Pence here in Washington, D.C.

Thanks to you both for being here on INSIDE POLITICS SUNDAY.

PENCE: Thank you, Kelly.

WALLACE: We look forward to having you back.

PENCE: Thank you.

RANGEL: OK, Kelly.

WALLACE: And coming back here it is back to the polls. Celebrations in the Ukraine as the supreme court declares last month's presidential election fraudulent and clears the way for a run off of the major candidates. Our Bill Snyder has the story behind the story. Plus politics on the Bayou. Voters cast their ballots in a run off election for two House seats in Louisiana. We'll reveal the winners this hour.

And later, don't miss your political picks. Our best jokes of the week on late night laughs. Here's a preview.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: By the way, here's a late breaking bulletin. the Bush -- from the Bush White House. The White House Christmas tree has submitted its resignation.

(END VIDEO CLIP) (COMMERCIAL BREAK)

WALLACE: And welcome back. This week thousands took to the streets of the Ukraine to protest election results the country's supreme court has now declared fraudulent. As Ukraine prepares for a revote involving the major candidates, our Bill Schneider looks at how a nation is fighting to decide its own future.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN CORRESPONDENT (voice-over): Forget recounts. How about repeating the whole election. That's what Ukraine's supreme court has ordered after it ruled that the country's November 21st run off for president was fraudulent and invalid.

Opposition candidate Victor Yushchenko reacted triumphantly.

What the world is seeing in the streets of Kiev is an Orange revolution, an outpouring of popular sentiment for democracy masked under the orange banners of the Yushchenko campaign. It's a media savvy revolution, almost like a democracy festival aimed at winning the sympathy of Europeans and Americans.

The crowds are intensely nationalistic. They defiantly sing Ukraine's national anthem. Who are they defying? In Ukraine nationalism means resentment of Russia. Russian President Putin contemptuously dismissed the protesters demand for a repeat of the election.

PRESIDENT VLADIMIR PUTIN, RUSSIA (through translator): Repeat of the second round may yield nothing and then, are you going to have to conduct it three, four, 25 times?

SCHNEIDER: Within hours the Supreme Court issued its order, a humiliating put down for the fallen super power. Many Russians and pro Russian Ukrainians believe the protests in Kiev were orchestrated by the west and financed by American money.

President Bush is eager to preserve a good relationship with Putin, a key ally in the war on terror.

BUSH: We will continue to monitor and be involved in a process that encourages there to be a peaceful resolution of this issue.

SCHNEIDER: With the supreme court's decision the outcome seems inevitable.

UNIDENTIFIED MALE: Yushchenko is going to be the president of the Ukraine. One way or another it's going to happen.

SCHNEIDER: Which brings an ominous warning from Ukraine's current pro Russian president.

LEONID KUCHMA, UKRAINIAN PRESIDENT (through translator) Without Russia's efforts to settle the political crisis, Ukraine would fail to overcome it without losing face. SCHNEIDER: This election represents a big leap for Ukrainians. After 350 years of Russian domination, they are deciding on whether their nation's future lies east or west.

(END VIDEOTAPE)

SCHNEIDER: A victory for Yushchenko would confirm the West's increasing influence in the Ukraine at the expense of the Russians. Something Western leaders may not want to celebrate for fear of reviving Cold War tensions, Kelly.

WALLACE: Interesting side story here, Bill, the Bush administration's reaction to development in Ukraine. How has the president and his top advisers how have they been reacting?

SCHNEIDER: Well there has been a bit of a split. Colin Powell was harshly critical warning of consequences if the fraud in the run off election was not thoroughly investigate. President Bush, as we heard, was fairly cautious in his criticism.

There are people urging President Bush to put on an orange tie to show that he supports the democracy movement in Ukraine. But he's being very cautious because he doesn't want to anger or antagonize President Putin, a key ally in the war on terror. He doesn't want to start a new cold war.

WALLACE: So very much a delicate balancing act for this White House?

SCHNEIDER: Very delicate for the United States, exactly.

WALLACE: Bill Schneider, great to see you . As always, thanks so much for the story behind the story. We'll see you again next week.

Coming up next, this weekend bringing another grim milestone for U.S. troops in Iraq. Details on that and other top stores just ahead.

And later, the new year will bring new faces from Capitol Hill to the president's Cabinet. How will they effect Mr. Bush's second term plans. Our reporter panel has some answers. And how PC, that is politically correct are you? . We'll reveal a list of the most taboo words and phrases and some acceptable substitutions that is.

This is INSIDE POLITICS SUNDAY. Don't go away.

(COMMERCIAL BREAK)

BETTY NGUYEN, CNN ANCHOR: Well, good morning. I'm Betty Nguyen at the CNN Center. Here's what's happening now in the news.

In Iraq the death toll for American troops has reached a milestone. One thousand have now been killed in hostile action since the war began. This after two Task Force Olympia soldiers were killed in an attack yesterday in Mosul. Four were wounded. In other news. A former commander of U.S. prisons in Iraq will have to testify in the detainee abuse case. A military judge has order Brigadier General Janice Karpinski to take the stand. She'll testify in a trial of a soldier who says his superiors condoned the abuse of prisoners at Abu Ghraib. Karpinski is the highest level official yet ordered to testify in the scandal.

Steroids will most likely be a topic of discussion for the baseball players union. The group begins its annual executive board meeting tomorrow. There has been a call for harsher penalties for drug use amid recent reports of player steroid abuse.

Keeping you informed, CNN the most trusted name in news. Now it's back to Kelly Wallace in Washington with more INSIDE POLITICS SUNDAY.

WALLACE: Thanks so much, Betty. From new faces on the Hill to major changes in the cabinet and unfinished business in Congress there is plenty to talk about. And we have three of the best reporters to take us through a very busy week in Washington and give us a heads up about what's going to make news in the week ahead.

Jeff Zeleny is here with "The Chicago Tribune," Susan Milligan with "The Boston Globe," and Mile Allen with "The Washington Post." Thank you so much for being here today. We appreciate it,

MIKE ALLEN, "THE WASHINGTON POST:": Good morning, Kelly.

WALLACE: Lots to cover and so let's get right to it. Mike, let's begin with the September 11th intelligence reform bill. President Bush expected to send a letter up to House and Senate leaders. We though it would come yesterday, thought it would come today. What's the latest?

ALLEN: Well, it's not going to come today either. Congress comes back Monday. The White House says oh, it's good news that we don't have the letter yet. It means that we're still talking, that people still care about the fine print.

But I was just listening to Congressman Pence on your air and I don't see any indication that the objections on the House side have been savvyed. And over the weekend we saw new signs that it's in trouble in the Senate. So it would be quite a surprise if things work out this week.

WALLACE: Susan, you're covering the Hill of course. Is this a power struggle really going on...

SUSAN: Yes.

WALLACE: ...between Republicans, the Congress and the administration?

SUSAN MILLIGAN, "BOSTON GLOBE": Well, what has been interesting about this administration is they have been stunningly effective at getting their agenda through Congress and the Republicans in Congress have been amazingly effective at keeping their caucuses pretty well disciplined.

So this is an interesting kind of fisher here. You have, first of all, Republican leaders in the House who are balking at this bill, going against their own leadership. And now you have the legislative branch at odds with the executive branch, and it's kind of a interesting dynamic, especially now with the president not running for reelection. Some people on the Hill looking at their own presidential aspirations and I think they're not going to be quite as acquiescent as they used to be.

But, if they fail to get this, this will be the first time really, except for the energy bill, which was -- which had opposition from both Democrats and Republicans but this will be the first time that they fail to pass a major policy initiative because of Republican lack of support.

WALLACE: And, Jeff, I know you've been talking to sources inside House Speaker's Dennis Hastert's office. Are they expressing some concern about this whole issue?

JEFF ZELENY, CHICAGO TRIBUNE: Actually they are because, I mean after the very successful Republican election, you know, just a month ago it sort of seemed as though on the surface there would be smooth sailing for them but this is one indication that's probably not true and they're hoping that this is not a bellwether or sign of things to come of how difficult it will be to hold this together.

But, I mean, Speaker Hastert, this is his first sort of a challenge in this new term as well, so they are concerned that he's not been able to hold them together. But I agree with Mike. I think this week is probably not an easy bet.

WALLACE: The big question is, Mike, does the president of the United States truly want this bill? Of course, we sit here and think if he really wants it, why doesn't he call up all the members, bring them to the White House and say, "I want this bill. Make it happen."

ALLEN: That's exactly right. There have been nothing but mixed signals from the White House on this. In Canada, on your air, I saw the president saying "I can't make it any more plain. I want this bill."

Now we all know when this president wants something there's no any question about it and what Republicans say is it's just not credible to suggest that he's already lost control of the Republicans and if he wanted to, as you say, call them in, do something publicly, talk about it publicly, all kinds of tools and this White House has never been afraid to use them.

WALLACE: Susan, is anything here the power of the Pentagon? We know Defense Secretary Donald Rumsfeld is staying. We know that there are ties between members of Congress and the Pentagon, Chairman of the House Armed Services Committee Duncan Hunter, who we should point out here his son is fighting in Iraq and he even told his father, he said "Stay firm on the intel thing," so this is a matter that means a lot to him personally, but is that an issue there, the Pentagon, the power of the Pentagon on Capitol Hill?

MILLIGAN: Well, yes. The Pentagon does have a great deal of sway on Capitol Hill but then so does the White House. The thing is this end of Pennsylvania Avenue really doesn't like the other end of Pennsylvania Avenue telling it what to do and they were able to do that for the first four years and they still have tremendous power over the Congress. But this is a very important personal issue for some of the leaders and I don't -- I don't know whether they're going to give in on it.

WALLACE: Let's go to Topic No. 2, some new faces in the Congress. And I know, Jeff, you spent a lot of time with Senator- elect Barack Obama of Illinois. You were with him in New York City. I know you were with him last night. How is he being treated? And what is he doing to prepare for his new job?

ZELENY: Well, he is still a state Senator from Illinois, so he points out from every place he goes but he did not look like that last week in New York.

WALLACE: All the crowds are coming out because he's a state Senator from Illinois, right?

ZELENY: Right. I was at a book signing last week in Midtown Manhattan, 1,200 people arrived at this book signing. They waited in line for a couple hours to see him and hear from him. And what they see in him is hope and promise for the future.

I mean the party is certainly bruised and weakened and they see, you know, him as a bridge but all these expectations, I mean it will be interesting to see how he handles it.

WALLACE: I love from your reporting though, he is still working the phones though. I understand he was on the phone with incoming Senate Democratic Leader Harry Reid saying, hey, I want some good committee assignments, didn't he?

ZELENY: He's constantly, I mean with the publicity that's coming he's also working behind the scenes to make sure he gets good committee assignments and to make sure that he's an effective Senator because as he says, you know, his first good job, I mean he has to do a good job for the people of Illinois, so he's sort of walking both lines.

But last night he was the invited guest at the winter dinner of the Gridiron Club here in Washington, which is a storied group and it's pretty amazing that a state Senator from Illinois would get that invitation and he accepted, so he's certainly the toast of the town.

WALLACE: Because of that.

Susan, of course there are new faces coming to the Congress, new members who have never worked in the U.S. Congress before. I know you spoke before a group of them up at a conference in Harvard, so what was your advice to them and what was the sense of... MILLIGAN: They were, I mean it was so nice to see them because they are so earnest and they're so sincere and they're talking about working with the other side of the aisle.

And I said, I just, I almost don't want to tell you this is singularly the most poisonous environment I've seen on the Hill in 20 years on and off covering Washington but it is.

And I told them, you know, but you don't have to -- you probably can't change that as freshmen but you don't have to join it and you don't have to participate in it and you can work with, you know, the friends that you've made, you know, here at this conference and people in the other party. But, yes, they really do, they're so sincere. It's really encouraging to see.

WALLACE: You say, oh I don't know if that's going to last.

MILLIGAN: I know.

WALLACE: Mike, what about the relationship though between the White House, as we've been talking between the White House, the president, and this new Congress that's coming in? What are you picking up from your sources at the White House?

ALLEN: Well, Kelly, the first step to recovery is admitting you have a problem. The White House acknowledges that it needs to make some changes in its congressional relations.

Now there's quite a lot of skepticism at your end of Pennsylvania Avenue exactly what they are going to do about this but one thing that they're doing is these changes in the cabinet.

The Congress was telling -- congressional officials were telling us they want to get through these big bills. We need new economic faces. They're going to do that.

WALLACE: Let's talk about that. Eight, I believe, out of the 15 cabinet posts, eight leaving.

ALLEN: Right.

WALLACE: New faces coming in. I believe it's been reported sort of the biggest changeover in about 100 years.

ALLEN: Right.

WALLACE: What is going on, Mike? Is this sort of a fresh start for Bush 2?

ALLEN: Yes, Kelly, it looks like that's what they intend and they're also going to do transportation (UNINTELLIGIBLE) before they're done, so that's two-thirds of the cabinet.

It was news when on Friday a senior administration official called me and other reporters to say that Don Rumsfeld was staying. You know, now when somebody stays in this cabinet... WALLACE: That made news.

ALLEN: But (UNINTELLIGIBLE) gave me an interesting theory, which I put in the paper, which was that the president wants the optics of a first term. A first term president has more power, more options.

WALLACE: What, Susan, what's your sense of the new cabinet? Are we bringing in new policymakers, new visionaries? What are your sources on the Hill kind of saying about the president's choices so far for his new cabinet?

MILLIGAN: Well, what they're saying is that the president has put his closest friends and loyalists into these cabinet positions and they don't see -- they don't see a change in what happened in the first administration where the policy pretty much came from the White House was executed by the agencies but that the ideas didn't really come from the agencies themselves.

WALLACE: What are people making about Defense Secretary Donald Rumsfeld staying? I mean was there any surprise to that?

ZELENY: I don't think there was a lot of surprise. He wanted to stay. I think one thing that's different about him than some of the other cabinet secretaries he's at the end of his career. He's 72 years old, I believe, and he's already had a successful career in the private sector.

A lot of these other cabinet secretaries have been in politics all their life. You know, Tommy Thompson, for example, a Wisconsin politician. And, quite frankly, some of these people simply want to make money and they need to make money. As Tom Ridge said he wants to put his daughter through school.

So, I think that Don Rumsfeld is different from that because he's already done that and he's on the end of his career. But I think, as Mike reported, had the defense secretary not stayed I think it might have sent the wrong message about the war and the direction of the war, so they're happy obviously and they definitely wanted to get the word out that he was staying.

WALLACE: Yes, OK. Last minute, I'm going to go to each of you very quickly. A headline this week, what's going to be making news in the week ahead right on the spot, Susan Milligan you first.

MILLIGAN: Well, I think what will happen with this intel bill and what it means for the relationship between Capitol Hill and the White House and what it means for the discipline within the Republican Party.

Up until now the Republican leaders have not been working with Democrats the past legislation. I mean they want to get it passed through their own caucus and, if they can't do it this time, then that will -- I think that will set the tone for the rest of the session.

WALLACE: Mike Allen be a headline writer for "The Washington Post." What's the headline we're going to see? ALLEN: There will be at least one coming or going in the cabinet. I think that that's going to give us pretty well a final picture and I think people are really going to assess what does the president intend? How is he going to use this cabinet? And I think that that's a lot of what you'll see from our building this week.

WALLACE: And, Jeff Zeleny of the "Chicago Tribune," what's going to be a headline there?

ZELENY: Well, the Democratic Party, bruised and weakened from the last election, is going to begin deciding who their new leader is going to be. And, in Florida this coming week and over the weekend, the state chairs from around America are going to have their first conversation about who should lead the party forward, so we'll get some sign of perhaps who is going to be the new Democratic National Committee chairman, which will, you know, set things in motion for 2008 perhaps.

WALLACE: Four more years, exactly.

ZELENY: Yes.

WALLACE: You heard it here first. Jeff Zeleny of the "Chicago Tribune;" Susan Milligan of "The Boston Globe;" Mike Allen of "The Washington Post," thanks so much for being here.

ZELENY: Have a great week.

WALLACE: Look forward to having you back on another INSIDE POLITICS SUNDAY.

ZELENY: Thanks, Kelly.

MILLIGAN: Thanks, Kelly.

WALLACE: All right. Coming up next here on INSIDE POLITICS SUNDAY, what's wrong with the words "marriage," "waiter," and "freshman"? Some people think they're politically incorrect, that's right, and we will give you their suggested PC phrases.

And all eyes are still on the race for the Democratic National Committee chairman, as Jeff was just telling us. Who's out and who's still in and why is this getting so much attention? We'll have the inside scoop in our "Morning Grind."

Stay with us. We are back right after this short break.

(COMMERCIAL BREAK)

WALLACE: Time now to check the headlines in this Sunday edition of our "Campaign News Daily."

It has been over a month since voters went to the polls but Washington is gearing up for a third, yes a third recount in the state's governor's race. The first count found Republican Dino Rossi leading Democratic candidate Christine Gregoire by 261 votes. A second required recount narrowed Rossi's lead to only 42 votes. Democrats have now raised enough money for a third recount. Rossi's campaign has said that it will explore options in the courts if it loses.

News now about former House Minority Leader Richard Gephardt, he sat down for an interview tithe the "New York Times" magazine. What did they talk about? Well his musical interests of course. The congressman has an eclectic mix on his iPod ranging from Tony Bennett to Nelly and, yes, Eminem.

And finally how politically correct are you? The Global Language Monitor has published a list of the top ten politically incorrect phrases and suggested corrections for 2004 or 2005.

Topping the list are the computer terms, I'm sorry I've never heard these, master and slave. Instead you should say device and captured device. Instead of marriage it is non-same sex marriage. It's not longer correct to say waiter. Instead you should say waitron. And instead of calling them freshmen you should call them first year students.

Well, tough act to follow here but no better than our Sunday cup of "The Morning Grind," joining us for that CNN Political Editor John Mercurio, hi John.

JOHN MERCURIO, CNN POLITICAL EDITOR: Hi. I'm still trying to envision Dick Gephardt listening to Eminem.

WALLACE: I know, I know, I know. That does stay with you doesn't it, exactly. Well, we did have an election in Louisiana yesterday.

MERCURIO: Yes, we did.

WALLACE: Two House races runoffs and obviously this will influence the breakdown of Republicans and Democrats in the 109th Congress. What happened?

MERCURIO: Right. Well, it looks like basically the parties switched seats down in Louisiana yesterday.

WALLACE: Right, a Democratic seat was up and a Republican seat was up.

MERCURIO: Exactly. In one district you had a Republican Charles Boustany. It looks like he comfortably beat the Democrat Willie Mount. He's going to be taking over a Democratic seat. That's a Republican pick up. Chris John, the Congressman, gave up the seat in order to run for Senate unsuccessfully.

In the other race, much, much closer, Billy Tauzin, the Republican, the son of Billy Tauzin III, the namesake son of the retiring Congressman Billy Tauzin lost by about 500 votes, just a little over 500 votes. It looks like he's not -- he said he -- well, first of all, he hasn't conceded the race yet but there's no automatic recount provision in Louisiana state law and he said he's not going to challenge the result.

So, it looks like if the results hold, Republicans go into the 109th Congress, as you just said, with a 15 seat margin in the House. It's the largest margin they've had since 1994.

WALLACE: So, Republicans smiling but a little bit for Democrats to smile about.

MERCURIO: It could have been worse for Democrats. It could have been better for Republicans.

WALLACE: OK. Looking ahead to the Democrats, of course, lots of talk about who will lead the Democratic National Committee.

MERCURIO: Yes.

WALLACE: OK. Who's out and who's in right now?

MERCURIO: Yes. We lost a lot of candidates last week but there's still a pretty large field. The candidates we lost very interestingly all three prominent women who were considering races, which almost guarantees, I think, that we're going to have a man as the next DNC chair.

Donna Brazile, the former Gore campaign manager and the beloved CNN contributor, got out of the race. So, did Jeanne Shaheen, the former New Hampshire governor who was a big name in the Kerry campaign. Alexis Herman, also a big name in the Kerry campaign, former labor secretary under Bill Clinton, all of them out of the race, as well as Tom Vilsack, the Iowa -- the governor of Iowa.

Now, the field is still relatively large. You've got the presumptive frontrunner Howard Dean. I mean I think he has to remain the frontrunner, if only because he's got universal name recognition among Democratic activists but some other interesting candidates.

Harold Ickes, a former Clinton campaign -- a former Clinton aide, political aide; Donny Fowler, Jr., the son of a former DNC chairman, one key appeal to him is that he's from South Carolina. I think obviously Democrats trying to reach into the south, and Wellington Webb, the former Denver mayor, the only African American remaining in the race.

Now all -- at least three of them I know are going to be at this meeting that Jeff Zeleny was just referring to in Orlando where the state Democratic Party chair and the DNC are going to be talking I think much a lot about their next term.

WALLACE: So, they're going to talk obviously about the next leader for the Democratic Party.

MERCURIO: Exactly. WALLACE: And how important that is. What else are you hearing that they're going to be talking about when they have the big powwow of Democratic minds in Florida?

MERCURIO: DNC aides that I've talked to said that Terry McAuliffe, the outgoing chairman, obviously is going to appoint a commission to look at the 2008 Democratic primary calendar system. This is sort of a big deal in the sense that it could challenge the much coveted status of New Hampshire and Iowa as the early vote states.

I mean, you know, for a long time Terry McAuliffe was the person who led the fight earlier or last year for the front-loaded primary system that helped John Kerry lock up the nomination so early. Now he's saying, and I think a lot of people are saying that maybe it's time to look at the status that these two states hold in the process.

WALLACE: Why because of the impact they have in terms of quickly narrowing the field, to make it more competitive, what's the thinking behind that?

MERCURIO: I think the thinking is that New Hampshire and Iowa don't necessarily represent the demographics of the entire country much less the Democratic Party and you want to sort of -- if you want to expand the party and if you want to make sure that you have a numb knee that reflects the country, you have to choose the one that sort of is chosen by the electorate that's most diverse in most (UNINTELLIGIBLE).

WALLACE: Is there any grumbling coming from Democrats that the outgoing chair of the Democratic National Committee shouldn't necessarily be kind of putting forward or trying to put forward such dramatic changes that can influence Democrats in '04?

MERCURIO: Right.

WALLACE: Or '08.

MERCURIO: A little bit of grumbling but he does have two months left in his term. I think he wants to sort of make them active, productive months. You know he wants this to be his legacy.

He's already helped return the committee to financial solvency. We saw that earlier this month or we saw that last months in the reports of the financial disclosure. Now he wants to say, look, I want to set the party up for 2008 for a more active and involved process.

WALLACE: Finally, how much angst is there within the Democratic Party because every week we're talking about different names, who's in, who's out? It does seem like there's a lot of anxiety on the part of Democrats about exactly who should become the head of the Democratic National Committee.

MERCURIO: Oh, absolutely. I mean I think, you know, it's sort of an -- there's sort of an obvious reason for that. I think, look, there's a lot at stake for the Democratic Party. They're at a crossroads.

I mean I think if you talk to Democrats most of the people, most of the Democrats that I've talked to for the most part they're happy with their ideals. They're comfortable with the issues, the positions that people have taken on the issues.

They're not happy, they're looking for leaders. They're looking for people who can make the arguments and who can connect with voters. I mean one Democrat I talked to yesterday who worked on the Kerry campaign said, look, our next party chairman is either going to lead us out of the wilderness or over a cliff. I hope we choose wisely.

WALLACE: All right, John Mercurio, we have to leave it there, CNN's Political Editor, great to see you.

MERCURIO: Good to see you too.

WALLACE: And we'll see you again on INSIDE POLITICS SUNDAY.

Well, what do Jon Stewart, Jay Leno and David Letterman all have in common? They're all part of our "Late Night Laughs" and that's coming up next right here on INSIDE POLITICS SUNDAY.

(BEGIN VIDEO CLIP)

JAY LENO: Well, since he took office in 2001 this is his first official visit to Canada. The president apologized for taking so long but he said this will complete his goal of visiting all 50 states.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WALLACE: After work in Washington some play in Philadelphia for the president. Mr. Bush traveled to the Army/Navy football game and there Mr. Bush made the traditional coin toss following a very dramatic arrival flying over the field in Air Force One.

He traveled with Senator John McCain and outgoing Senator Zell Miller to greet members of Army and Navy football teams. When asked who might win, President Bush said the United States of America, very diplomatic.

When it was over Navy won the game 42-13 and throughout the game, of course lots of attention to the men and women of the military fighting overseas in Iraq.

Coming up next on a much lighter note, as you know, we stay up late so you don't have to, the best political punch lines when INSIDE POLITICS SUNDAY returns. Don't touch that dial.

(COMMERCIAL BREAK)

WALLACE: The Bush cabinet reshuffle is giving the late night comics lots to talk about and it is giving their audiences plenty of late night laughs. (BEGIN VIDEO CLIP)

LENO: And President Bush has nominated Bernard Kerik to be the next secretary of homeland security. Kerik is a former prison warden, do you know that, a former prison warden? See Bush wanted him around to make sure nobody else in the cabinet tries to escape basically.

"THE DAILY SHOW" COMEDY CENTRAL: One day on the "NBC Nightly News" you're going to lose it and say what you really think and it's going to be the greatest day of my life.

UNIDENTIFIED MALE: Well, I think it's a thrill only Tucker Carlson knows where you're concerned.

LENO: So, what happened? What do you think happened? What do you think?

UNIDENTIFIED MALE: I think Bush got more votes.

LENO: Yes.

CONAN O'BRIEN: This year the White House Christmas decorations include a gingerbread replica of the White House that's authentic down to the smallest detail. That's a true story. Yes, the White House replica is so authentic that today eight of the gingerbread men resigned.

LENO: Let me ask you a little something about Christmas, enough with politics.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Yes.

LENO: When did your daughters learn there was no Santa Clause?

BUSH: What?

(END VIDEO CLIP)

WALLACE: They keep us laughing. That is all the time we have today.

Coming up in 30 minutes "RELIABLE SOURCES" taking a look at Canada, a critical look at how U.S. journalists cover our neighbors to the north.

For now for all of us at INSIDE POLITICS SUNDAY thanks for watching. I'm Kelly Wallace in Washington. We'll see you again next week. Until then, have a terrific Sunday.

The news continues with "CNN LIVE SUNDAY" right after this short break.

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