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President Bush Vows to Catch bin Laden. Will Frist Delay Social Security Reform?

Aired March 3, 2005 - 16:00   ET


ANNOUNCER: The president rallies his troops in the war on terror with his new Homeland Security chief on the job and America's most wanted still at large.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're on a constant hunt for bin Laden.

ANNOUNCER: The era of big government, is it over or still alive and well?

UNIDENTIFIED MALE: It takes day-to-day sort of trench warfare to keep government from spiraling out of control.

ANNOUNCER: Democrats wear their feelings about the Bush Social Security plan on their sleeves.

SEN. HARRY REID (D-NV), MINORITY LEADER: The president has never seen a crisis he hasn't created.

ANNOUNCER: Senate Minority Leader Harry Reid talks with Judy about Social Security and more. And we'll get the Republican response from Senator John Sununu.



JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us.

Well, while President Bush's approval rating hovers just above 50 percent in our most recent poll, Americans still give him a higher grade, 60 percent, for his handling of the war on terror. Today Mr. Bush today tried to show anew, that he remains engaged in homeland security and the hunt for Osama bin Laden.

We begin with our White House correspondent, Dana Bash.

Hello, Dana.


And the president made his remarks about the war on terrorism at the swearing-in ceremony for his new Homeland Security secretary, Michael Chertoff. And during those remarks we heard a surprise, a rare utterance unprompted about his old nemesis.


BUSH: We're on a constant hunt for bin Laden. We're keeping the pressure on him. Keeping him in hiding. And today, Zarqawi understands that coalition and Iraqi troops are on a constant hunt for him as well.

Coalition and Iraqi forces have caught and killed several of his key lieutenants. We're working every day and night to dismantle his network and to bring him to justice.


BASH: White House officials say the reason the president talked about bin Laden today was because recently he has gotten intelligence about an intercept from bin Laden to Abu Musab al-Zarqawi, vowing to strike the U.S. again. However, what was striking about the president's comments was that he evoked the three-and-a-half-year unsuccessful hunt for Osama bin Laden. And, of course, you remember after 9/11, the president vowed to get him dead or alive, but after that proved to be a promise hard to keep.

The president began to talk about the fact that the fight against terrorism is bigger than one person, and that perhaps bin Laden isn't the only issue. It's about the broader hunt for al Qaeda.

Now, more recently when the president has talked about bin Laden, it has not been about finding him. It has been more generally, for example, about blaming him for stoking the insurgency in Iraq and, of course, during the campaign, defending against criticism from John Kerry that perhaps he bungled a chance to get Osama bin Laden at the fight at Tora Bora in Afghanistan.

But White House officials, Judy, do insist that we shouldn't read too much into what we saw today of the president, and that this was simply a chance for him to renew his priorities, a chance to do so when he was swearing in his new Homeland Security secretary. And that if there are questions about whether or not we are, in fact, close to getting Osama bin Laden, again, they say don't read too much into that -- Judy.

WOODRUFF: OK. Dana Bash at the White House.

And the president also just in the last few minutes has paid a visit to the CIA. We're going to bring you his comments over there just as soon as we get them in the house.

And, as always, stay tuned to CNN day and night for the most reliable news about your security.

And now to the Social Security debate and an apparent change of heart by the Senate majority leader. Here now our congressional correspondent Ed Henry.

What's going on? ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Judy. Two days ago, Senator Frist left the door open to delaying Social Security reform until 2006. That was seen as a major blow to the president because that is an election year, obviously and it's very difficult to get such a monumental issue done in an election year. Today, Senator Frist took to the Senate floor and walked those comments back just a bit.


SEN. BILL FRIST (R-TN), MAJORITY LEADER: This president, this Congress, the 109th Congress, is facing this challenge. And the challenge is to fix Social Security for seniors and for near retirees and for that next generation. And we need to do it and we will do it this year, this year, and not next year.


HENRY: Now, Senator Frist's office tells me that he is -- he is not walking back at all, that, in fact, the other day his comments were misinterpreted. But Democrats immediately pounced.

They charge that the White House put heavy pressure on Senator Frist to backpedal in order to breathe new life into the president's plan. And Democrats are also jumping all over comments by the powerful Republican chairman of the Senate Finance Committee, Chuck Grassley, who said this week the president may only have two or three weeks to convince the public on this issue, so the DNC, the Democratic National Committee, has now put up a little web meter counting down to March 15.

And in what could be another ominous sign for the president's plan, Grassley today said Congress should focus on the solvency of Social Security rather than private accounts. Now, like Senator Frist, Senator Grassley has now clarified a bit, putting out a statement today saying he supports personal accounts, and he also lashed out at Democrats for, "spending all their time tearing down personal accounts rather than taking responsibility for the future of Social Security."

So obviously a lot of tense times right now on the Hill. Republicans trying to get on the same page on Social Security -- Judy.

WOODRUFF: A little bit of clarifying going on.

HENRY: Absolutely.

WOODRUFF: Ed, separately, you've got another influential Republican, Senator Chuck Hagel of Nebraska. He's unveiling his own Social Security proposal on Monday. Now, you've been able to already get hold of some of it. Is this going to help or hurt the president?

HENRY: I think one part of Senator Hagel's plan could actually hurt the president. It could be a problem, because the president has promised to cut benefits for anyone -- to make sure -- he has said he will not cut benefits for anyone 55 and over. Hagel's plan would change the cutoff age to 45. Nobody 45 or over would have to use a private account or face benefit cuts. So that could be politically popular, and may show up the president a bit, who has a different idea.

But then on the other side, Senator Hagel has a politically unpopular provision in this plan. He wants to raise the retirement age from 67 to 68 for some workers. That could be a non-starter. And this is rally probably the opening shot of Senator Hagel's presidential campaign in 2008.

He wants to run as a maverick candidate who's going to put up some of the tough medicine and tell people he wants to make tough choices as a president. And raising the retirement age is not something that's politically popular. But perhaps he could show that he wants to make some tough choices.

WOODRUFF: It will be really interesting to see what the reaction is when all of that comes out on Monday.

HENRY: That's right.

WOODRUFF: OK. Ed, thank you very much. We appreciate it.

Well, one day after Federal Reserve chairman Alan Greenspan prodded Congress to reduce the cost of retirement benefits sooner rather than later, he put up a good word for another Bush priority: overhauling the tax code. Speaking to a presidential panel on tax reform, Greenspan urged moving away from the current income tax system by combining it with a consumption tax, such as a national sales tax.


ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: Many economists believe that a consumption tax would be best from the perspective of promoting economic growth, particularly if one were designing a tax system from scratch. Because a consumption tax is likely to encourage saving and capital formation. However, getting from the current tax system to a consumption tax raises a challenging set of transition issues.


WOODRUFF: The White House says it appreciates Greenspan's comments. But wait until you hear what Senate Minority Leader Harry Reid says about the Fed chairman. My interview with Senator Reid is still ahead.

This week, Greenspan also worried out loud about the swelling federal budget deficit, something the Bush administration has played down. As our Bruce Morton reports, a "less is more" approach to government was once the gospel of conservative Republicans, even if they didn't always practice what they preached.


BUSH: And the calling of our...

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): He is a president who sets enormous goals.

BUSH: It is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.

MORTON: Big ambitions at home, too.

BUSH: Fixing Social Security permanently will require an open, candid review of the options.

MORTON: Big goals for a big government with big deficits. Wars are expensive, especially when accompanied by big tax cuts. Ronald Reagan used to say government wasn't the solution, it was the problem. But is George Bush a big government conservative?

THOMAS MANN, BROOKINGS INSTITUTION: I think it's fair to say that both Ronald Reagan and George W. Bush are big government conservatives. They believe, first and foremost, in cutting taxes. They place relatively little priority on deficits. They believe government has very important things to do, especially in the national security arena.

MORTON: Bush has asked Congress to cut discretionary programs, ones that aren't entitlements like Social Security and Medicare, but...

DAVID KEENE, AMERICAN CONSERVATIVE UNION: Everyone agrees generically that government is too big, does too much, intrudes too much in their lives. And those very same people say, you know, but there is this one program here that I really like, and I think we ought to spend money on that. Now, in Congress, you've got 435 of those people saying the same thing about different programs.

MORTON: And one other thing. A government that's divided may cut spending just because you can't agree on much. But this is a Republican government, House, Senate, president.

KEENE: If you've got a Congress and a White House that are in the same party, whether it's Republican or Democratic, you tend to get government growth. And I've said the addiction to pork is not a partisan illness. It's an illness that extends to anybody that's in elected office.

MORTON: So a big conservative government. History may judge this conservative president less by the size of the shop he runs and by how he does on those big goals of his, reshaping entitlement programs, ending tyranny, all that.

Bruce Morton, CNN, Washington.


WOODRUFF: Thank you, Bruce. Well, Senate Minority Leader Harry Reid has some choice words about the president's spending habits and his plans for overhauling Social Security. Up next, my one-on-one interview with the Senate's top Democrat.

Plus, Senator John Sununu will be here to fire back on behalf of Republicans.

And later, how does the idea of tying Social Security benefits to income appeal to women in very different financial situations?


WOODRUFF: We're waiting right now to hear what President Bush had to say on his visit to the CIA today. And as soon as we have those comments, we'll bring them to you. We'll be right back after this.



BUSH: ... through the good graces of Ambassador Negroponte, of confirmed by the Senate, will actually help the CIA do their job better. And we got a great reception.

I want to thank you again, Director, for your hospitality.

We're making progress in the war on terror. The world is changing. And this country of ours will continue to do our duty, which is to find terrorists and bring them to justice through good intelligence and hard work of some brave souls. And at the same time, work to spread freedom and liberty around the world.

I'll answer a couple of questions -- Tom.

QUESTION: Mr. President, the CIA director, Mr. Goss, said yesterday that he has to wear five hats now. And there was concern there was some ambiguities in the new arrangement of that new relationship with Mr. Negroponte and Secretary Rumsfeld.

Do you feel there are such ambiguities? And will you move to clear them up? And will this present a problem to the fall of intelligence in this time when -- this transition period?

BUSH: Yes -- that is an excellent question. And Porter and I have discussed this, of course, because I don't want there to be any interruption of intelligence coming to the White House. And there won't be.

As a matter of fact, Porter Goss comes every morning with a CIA briefer to deliver the briefing. And that, of course, will go on.

And it's -- secondly, we don't even have Ambassador Negroponte confirmed yet. In other words, it's hard to implement reforms without somebody to be the informer. And so the process is ongoing. Obviously when his name gets up to the Senate, we hope there is a speedy confirmation.

But one of the purposes of the whole process, Tom, is to make sure that information flows are smooth and that efforts are coordinated. The CIA is the Central Intelligence Agency. It's the center of the intelligence community, but there's a lot of other intelligence-gathering operations around government. And the job of Ambassador Negroponte is to take the information and make sure it is coordinated in its distribution to not only the White House, but to key players in my administration.

And so I'm confident that the process will work. Obviously, one of the -- one of the reasons I came here is because I know there is some uncertainty about what this reform means to the people of the CIA. And I wanted to assure them that the reforms will strengthen their efforts and make it easier for them to do their job, not harder. And I'm glad I came out.


QUESTION: Mr. President, on Social Security reform, what is your judgment about where this process stands right now with the polls showing the public skeptical, some Republicans, like Senator Grassley, assuming to back away from your proposal, and Democrats wanting to declare it dead?

BUSH: You know, I would say this, I am nowhere at the early stages of the process. And I've only had nine trips around the country so far -- or nine states in my trips. I've got a lot more work to do.

Now, I do believe we're making progress on the -- on the first stage of getting anything complicated and difficult done in Washington. And that is to explain the problem.

And the surveys I have seen, at least, say that the American people understand we have a problem. And I'm going to continue going out to explain that to people, the nature of the problem. And the problem is in 2018 the system starts losing money, and 2027 it's $200 billion in the hole, and it gets bigger every year thereafter.

In other words, we can't pay for the promises we made. That's the problem.

And my second phase of this explanation to the American people is to say to seniors who have retired or people near retirement, you don't have anything to worry about. You're going to get your check.

And I've got a lot of work to do on that. And I understand that. But we're making progress.

People are beginning to say we have a problem. The next phase when people say have a problem is going to be, what are you going to do about it? And I'm willing to put out some ideas about what to do about it. And in my judgment, ultimately, I think politicians need to be worried about not being a part of the solution. And so I'm looking forward to continue to make the case.

As you know, Terry, you have followed me a lot. I like to get out amongst the people. I get energized.

I get energized by being with people, and I get energized when I think about taking on big problems. Because that's why we -- that's why we got elected.

The American people expect people to come together to solve problems. And I'm -- I'm looking forward to listen to the Republicans and Democrats.

I said, "Put your ideas out there." There will be no political third rail when it comes to Social Security. Now is the time for good people and good will to come together and get the problem fixed.

QUESTION: Fed chairman Alan Greenspan said today that a consumption tax, maybe even a national sales tax might spur greater economic growth. What do you think about that?

BUSH: I think that I'm going to wait until the tax commission I put together, the reform commission headed by former Senator John Breaux, Democrat of Louisiana, former Senator Connie Mack, Republican of Florida, comes forward with some ideas. I told the American people I want to work to simplify the tax code to make it easier to understand so that people spending less time filing paper.

And I believe a simplified tax code will spur entrepreneurial activity. And so I'm looking forward to what the commission has to say.

QUESTION: You mentioned Osama bin Laden earlier this morning. And you said several times that there is progress being made on the war on terrorism. But three -- more than three years after September 11, you still don't know where he is.

How would you assess the adequacy of the intelligence you're getting on bin Laden? And do you expect that he's going to be found anytime soon, even within your second term?

BUSH: If al Qaeda was, of course, structured like corporate America, you'd have a chairman of the board still in office, but many of the key operators would no longer be around. In other words, the executive vice president, the operating officers, the people responsible for certain aspects of the organization have been brought to justice, a lot of them have been.

And we are -- spend every day gathering information to locate Osama bin Laden and Zawahiri. Obviously people like Zarqawi.

We're not resting on our laurels. We've had great successes, and -- but that doesn't mean that we shouldn't stop. And one of the reasons I came out here was to remind people that we've had great successes. I appreciate their successes.

Khalid Sheikh Mohammed, Ramzi bin al-Shib, I mean I can go down the list. But there is more work to be done. And it's a matter of time.

As far as I'm concerned, and as far as the CIA is concerned, it's a matter of time before we bring these people to justice. And I can't thank the intelligence gatherers, the analysts and the operators, I can't thank them enough for the sacrifices they're making.

Last question.

QUESTION: Mr. President, on Iran, you spoke to Condoleezza Rice yesterday we were told. What can you tell you us about the pros and cons that you're weighing now as you reach a decision on going forward with (UNINTELLIGIBLE)?

BUSH: Let me just tell you how I see the state of action here. First, I'm most appreciative that our friends in Europe agree with the United States that Iran should not have a nuclear weapon. Period. No ands, ifs or buts. And I thought that was a very important statement from the leaders I met with.

And by the way, Mr. Putin feels the same way. And, to me, that is a very positive start for achieving our common objective.

First you've got to agree to the goal. And the goal is no weapon.

Secondly, I have told our European friends who are handling the negotiations on behalf of the rest of the world that we want to help make sure the process goes forward. And we're looking at ways to help move the process forward.

The guilty party is Iran. They're the ones who are not living up to the international accords. They're the people that the whole world is saying don't develop a weapon.

And so we're working with our friends to make sure not only the world hears that, but that the negotiating strategy achieves the objective of pointing out where guilt needs to be, as well as achieving the objective of no nuclear weapon. And I felt good about our visits.

I did visit with Condi yesterday, and I'm about to visit with her again in the Oval Office to discuss not only this issue, but other key issues, including Lebanon, where the message is loud and clear from the United States and France and many other nations that Syria must withdraw not only her troops, but her secret service forces out of Lebanon now.

And I look forward to talking to Condi about getting an amplification on her visit with -- with our allies overseas. I look forward to not only hear their words, I want to hear about their body language. I want to hear about, you know, their enthusiasm for the project. I think I'm going to find it was quite high, because the people now understand that you believe in democracy, why not let the democracy in Lebanon flourish and grow? And the United States of America strongly supports democracy all around the world, including Lebanon. And it cannot flourish so long as Syrian troops are there. It's time for Syria to get out.

Listen, thank you all. I appreciate seeing you.


WOODRUFF: That is a replay of President Bush's remarks just a short time ago at the CIA. He went over there today, among other things, to reassure CIA employees that their role is still essential in the gathering of intelligence here in the United States. You also heard him answer questions about Iran, Osama bin Laden and even Social Security.

Speaking of Social Security, Republican Senator John Sununu of New Hampshire is a leading supporter of the president's plan to overhaul Social Security, including the creation of those private accounts, especially for younger workers.

Senator Sununu joins me now from Capitol Hill.

Senator, you have said that by the beginning of June -- that's, what, three months from now -- you think there's going to be a pretty clear picture of whether this reform is going to be done this year or not. Do you think that's a deadline that the president can meet?

SEN. JOHN SUNUNU (R), NEW HAMPSHIRE: It's not a deadline. It just reflects the inevitable process of working legislation through the House or through the Senate.

I think we'd like to see a bill marked up, moving through the Finance Committee, where it has to start, by the early summer. Probably by about the 4th of July recess. That will give us a chance to handle the bill on the floor of the Senate and try to complete work by the end of the year.

No, it's not a deadline. But it just reflects the kind of pace that we need to keep up if we hope to get something done in 2005.

WOODRUFF: Well, the president said that we're still in the early stages of this, of selling it to the public. Right now, the public opinion polls show reaction is mixed to those personal accounts. What are you hearing from your constituents?

SUNUNU: Oh, I think "mixed" is a fair word. About 40 to 45 percent of people in the country think it's a good idea to allow workers to set aside a portion of their Social Security taxes in a personal account.

It's significantly higher if you talk to the workers that would actually be affected, those in the 20 to 40-year old range. They understand that it makes a better system. They have that money there for them when they retire, it earns a higher rate of return.

If they put it in a personal account, the federal government can't spend it. And for younger -- rather for middle income workers and lower income workers that haven't had an IRA or 401(k), haven't had access to those things, it gives them opportunity that didn't exist before. It's a better system. And I think the president recognized he needs to continue to work, travel around the country, and to continue to explain why this is a better system and why it will help create a much more solvent and fiscally-balanced approach.

WOODRUFF: Senator, unfortunately we're up against the clock here. But let me quickly ask you, the Democrats sending a letter to the president today, urging him to take a look at just moving away from this whole privatization, personal accounts idea. They're saying it's not going to fly. Should the president be more flexible and be willing to consider the so-called add-on approach, where people could put money in outside the Social Security payroll tax?

SUNUNU: There are two approaches to an add-on account that I can think of. One is where it's not mandatory. And we have that today. It's an IRA or a 401(k). And only in Washington do politicians take credit for giving the public something that they already have.

The other way to approach it is to make it a mandatory account, to force workers to set aside money into an account. That's no different than a tax increase. And we have increased payroll taxes 20 times in the last 70 years. It has never solved the problem.

The reason personal accounts need to be part of a core modernization is because they create a system that's permanently solvent. By setting aside $2,000 a year -- and for a worker earning $30,000, they're paying $3,500 a year in taxes. Just $2,000 a year through your working life will give you enough for a benefit that is higher than today's Social Security benefits.

So if you want permanent solvency, personal accounts need to be part of the solution.

WOODRUFF: Senator John Sununu, very clear on where you stand.

SUNUNU: Thank you very much.

WOODRUFF: And Senator, we appreciate you being with us today. Thanks very much.

Well, it is just about 4:00. That's the time every day when the markets close on Wall Street. And for the very latest, let's get a look at the "DOBBS REPORT." Kitty Pilgrim joins us from New York. Hi, Kitty.


Stocks on Wall Street are mixed. As the final trades are being counted, we have the Dow Jones industrial averages adding about 19 points. Nasdaq, however, is slightly lower. Wal-Mart and other retail stocks, they made nice gains and sales were better than expected last month there. Now the big dynamic is oil. Oil prices neared an all-time high of more than $55 a barrel. That fell off a bit, though, by the close. $53.57 a barrel.

An investment firm, Bain Capital, reportedly in talks to buy the entire National Hockey League. The offering price is reported to be up $3 billion. That's for all 30 teams. This is a pretty tricky play. All of the team owners would have to agree and each franchise would have to be valued separately. The league had to cancel its season two weeks ago because a labor dispute with the players.

Coming up on CNN, 6:00 Eastern on "LOU DOBBS TONIGHT," a special report on broken borders. Are terrorists sneaking through the country's borders? The father of a 9/11 victim pleads for more resources to secure the country's borders.


PETER GADIEL, 9/11 FAMILIES FOR A SECURE AMERICA: To those who oppose the increases, we who lost loved on 9/11 ask this: if not now, when? If not this, what? And if not here on our borders, where? How much more conclusive proof will it take?


PILGRIM: Also tonight, the Puerto Rican Legal Defense and Education Fund is suing New York over its crackdown on driver's licenses. The organization's president joins Lou to explain why.

And then the number of the troops killed in Iraq has now topped 1,500. We'll take a look at the tactics used on the front line and whether the defense needs the troops -- the defense's needs of the troops are being assessed.

Also, the authors of "The Case for the Draft," it's published in "Washington Monthly," they join us to discuss why they believe America cannot remain the world superpower with an all-volunteer military.

That and more tonight, 6:00 Eastern. But for now back to Judy Woodruff.

WOODRUFF: Kitty, thanks very much and we'll be watching at 6:00.

Well, we just heard from President Bush. We also heard from Republican Senator John Sununu. In a moment, we'll get the other side. We'll talk to the Senate Minority Leader, Harry Reid. We'll be right back.


WOODRUFF: Welcome back. The White House said today that President Bush is making important progress in his campaign to sell Congress and the public on his Social Security plan. But new polls out today suggest otherwise. A "New York Times" survey shows that 63 percent of Americans say they are uneasy about the president's ability to make the right decisions about Social Security. And a Westhill Hotline poll shows 42 percent of Americans say they trust Democrats more to protect Social Security. 18 percent say they trust Republicans more. 16 percent put more trust in the president.

The Democrats are trying to cast further doubt on the president's plan. The DNC is going up with 60-second radio ads on Social Security, tomorrow in New Jersey and Indiana to coincide with the president's swing through those states.

Senate Minority Leader Harry Reid not only disagrees with the White House plan to overhaul Social Security, he also disputes the idea that the program faces a funding crisis anytime soon. I spoke to Senator Reid just a short while ago and I started by asking him if he thinks the just-announced 60 day P.R. blitz, designed to build support for the president's proposal, is a waste of time.


SEN. HARRY REID, SENATE MINORITY LEADER: Well, that's up to the president. We know that as Democrats, we're united. We do not support his privatization plan, his cutting of benefits and running up this deficit so much that we simply have said you got to do it the right way. And that's why, Judy, we're going to send a letter to the president today. And that letter will say if you take privatization off the table, we'll be -- we'll have to sit down and talk to you about the problem with Social Security, now ears.

WOODRUFF: Why are you doing this right now?

REID: Well, because, first of all, Social Security is not in crisis. It's a crisis the president's created, period. If people -- if we did nothing, people would draw 100 percent of benefits for the next 50 years. If we still did nothing, it would draw 75, 80 percent of the benefits. We can work on the problems 50 years from now, and we'll be willing to do that right now. But we ought to get privatization off the table, because it is a touch word for destroying Social Security and the American people have come to understand that.

WOODRUFF: Well, let me quote to you what one of your colleagues in the Senate, Senator Chuck Grassley -- he said, "This controversy has really given the Democrats," he said, "an opportunity to focus on the personal accounts and avoid," what he says is the "responsibility that we all have about the solvency of it." Is he right about that?

REID: Well, he's exaggerating the solvency. I've indicated that the Social Security program is strong, it's viable, it pays 100 percent of benefits for the next 50 years. We want to do something so it's a strong, sound program after 50 years. And that's why we're willing to sit down and talk to the president about it, as long as he takes privatization off the table.

WOODRUFF: But even Federal Reserve Board Chairman Alan Greenspan, in testimony yesterday, and again this morning, is talking about how Social Security does have long-term fiscal -- or rather fiscal issues that he says need to be addressed urgently.

REID: Judy, you understand, I hope, that I'm not a big Greenspan fan -- Alan Greenspan fan. I voted against him the last two times. I think he's one of the biggest political hacks we have in Washington. The fact of the matter is, he told us when we were in power and Clinton was president the biggest problem facing the American people was the deficit. And we did something about it. We, during the Clinton years, paid down the debt by about a half a trillion dollars.

Why doesn't he respond to the Republicans and tell them the big problem here is the debt that this administration is created? We had a $7 trillion surplus when Bush took office, now we have a $3 or $4 trillion deficit. That's, in fact, what Greenspan should be telling people.

WOODRUFF: Well, he has mentioned the deficit, I know, but I guess the question is, is it responsible? Is it responsible for Democrats to say we're not going to deal with this long-term solvency question?

REID: Democrats are saying as long as privatization is on the table, which is a word for destroying Social Security, we are not going to take the bait that the president has shown to us. The president wants to run up the debt, he's already acknowledged that privatization will not help the stability of Social Security. He's indicated he's willing to make benefit cuts, he's willing to run up the debt. We're not willing to do that.

WOODRUFF; So, when House Speaker Dennis Hastert says -- he looks at what the Democrats are doing right now and he says the Democrats have become the party of no. Just, you know, obstructionists.

REID: This is interesting. The president has never seen a crisis he hasn't created. Social Security, judges. So the next thing I assume I'll be hearing from Republicans, they want to change rules some way, as they do on the House when you get a problem with ethics, they just change the rules. That's what they're threatening to do here on judges, maybe that's what they should try to do on Social Security. Change the rules.

That's what they seem to be wanting to do, rather than face the situation we have before us. The situation is Social Security is not in crisis. Social Security is not in crisis. The president understands that and that's why he wants to privatize it, to destroy it.


WOODRUFF: The views of Senate Minority Leader Harry Reid.

In the Social Security debate, not all Republicans have embraced the Bush plan. I'll get Senator John McCain's take ahead.

Plus, John Kerry lends Hillary Clinton a hand. Are there any 2008 implications there?

Plus, we go inside the blogs. Find out who's cracking down and whose mind is on a bottle of gin.

(COMMERCIAL BREAK) WOODRUFF: Federal Reserve Board Chairman Alan Greenspan has urged a go slow approach on personal retirement accounts and more than a few Republicans are second guessing the centerpiece of the president's Social Security plan.

I sat down with Senator John McCain yesterday and got his take. I asked him if Mr. Bush should focus more on keeping Social Security solvent rather than on personal accounts.


SEN. JOHN MCCAIN (R), ARIZONA: Well, I think the president wants to take a comprehensive approach to start with, but, second of all, these personal savings accounts are workable and have worked in other countries. They could pay a much greater return than the present 1.8 to 2 percent. We members of Congress and federal employees can invest our money into these five different -- and we're doing fine, between seven and nine percent return. The president is willing to look at a comprehensive fix.

Let me tell you what we really need to do, Judy. Republicans and Democrats need to sit down together and work this out. The system is going to go broke. Alan Greenspan says that. And so I remember one of my earliest memories in politics here in Washington was 1983 Tip O'Neill, Ronald Reagan, liberal Democrat, conservative Republican, sat down and they saved Social Security for a number of years.

WOODRUFF: Well, Mr. Greenspan also said today that these kind of -- addressing these financial problems may well require benefit cuts. Are you and other members of Congress going to be willing to support that?

MCCAIN: I am willing to sit down with Democrats in a comprehensive package. In 1983, we did cut benefits, we raised the retirement age, we raised taxes. We had to do it on the promise to the American people that the system would not collapse. If the American people are faced with two stark choices, collapse or make some changes, they will do that. But I'd also point out that the president said anyone 55 and older, they're not going not see any change in their benefits. That's important.

WOODRUFF: But shouldn't -- I guess my question is, shouldn't the president be leading the way and talking more openly, more candidly, about what's at stake here and what needs to be done?

MCCAIN: I think he is. He's saying that it's going to go broke. The Democrats are saying they don't have anything to worry about. How can you say that? When we all know that at some point, more is going out than coming in, and another point, the system is going to collapse. The president is painting a picture that this system needs to be repaired and is he open to all ideas and proposals? Yes. I'm proud of Senator Lindsey Graham. He's taking some very courageous leadership on this issue. We need to have more senators like him.

WOODRUFF: All right, I understand what you're saying, but to some of us, it sounds the president's focusing more on the private investment accounts and we hear others saying, hey is the real problem is in making some tough, tough decisions about either benefit cuts or possibly tax increases here.

MCCAIN: Well, the realities of politics is, the president says, by the way, American people, we're going to cut your benefits. That doesn't work. But what does work if we sit down together and work it out to the satisfaction of the American people. Do not underestimate the intelligence of the American people. They know the system is in trouble. And if we're going to protect seniors today, then we've got to make sure that workers today understand what's at stake. And I think he's doing that.

Again, in all due respect to my Democrat friends, I am not known as a particularly partisan person, but fine, Democrat friends, what's your proposal? Do you believe that the system can go on ad infinitum under the present system? Alan Greenspan doesn't. No expert that I know does. Let's sit down together.

WOODRUFF: Finally, senator, question about -- little question about politics. As you think about '08, whether to run for president again, you've got some conservative voices out there. There's a group called Americans for Limited Government.

There's a senior fellow there who's quoted in "The Washington Times" this week as saying, quote, "Under the circumstances, the pro- life movement would never, absolutely never, support Rice, Giuliani, McCain or anybody like them." The same article quoted a pro-life -- someone with the pro-life group saying he thinks you would give them a little more than lip service. What do you -- I mean, what's your thinking at this point about these kind of...

MCCAIN: I don't pay -- first of all, I don't pay any attention to it. Second of all, I have a clear 22-year record of pro-life votes and I never deviated from it at all. But they're entitled to their opinions and their views and I hope they can get over campaign finance reform some day.


WOODRUFF: Senator John McCain, saying what's on his mind.

Well, we know they're making an impact, but just how many people read the blogs? Our new numbers may surprise you.

Plus, what is buzzing in the blogs today? Find out when we come back.


WOODRUFF: There is no question that Weblogs have grown an influence in American politics, from the ouster of Trent Lott as Senate majority leader a few years ago, to the recent scandal over President Bush's national guard record. The blogs are having an impact. But just how many people know what they're all about? Well, it turned out only 7 percent of those questioned in a new CNN/"USA Today"/Gallup poll said they were familiar with blogs. And only 19 percent said they were somewhat familiar. Just 3 percent of those polled said they read the blogs daily. And 4 percent say they look at them a few times a week.

Well, let's get a little reaction to all that and find out what's going on with the blogs today. Let's talk to our blog reporter Jacki Schechner and, once again, CNN Political Producer Abbi Tatton.

Jacki, what do you think?


Well, we're hoping that segments like this will get more interested and intrigued in what the blogs are talking about and go online and take a look at them. Now, there is nothing that gets the blog-o-sphere more abuzz, then the thought of possible Internet regulation. And that is what they are talking about today. It's an article on It's and an interview with Bradley Smith, he's a Federal Election Commissioner.

The title is the coming crackdown on blogging. And it talks about the fact that a judge overturned a 2002 ruling on Internet exemption that could leave blogs now vulnerable to FEC scrutiny. Casey blog sums it up very nice nicely, says what could this mean? It could means forwarding a campaign e-mail to your personal e-mail list, speaking positively about a campaign in your blog or linking your Web site to a campaign Web site could be considered campaign contributions.

ABBI TATTON, CNN PRODUCER: Now, not all blogs are political or partisan, but those that are would be heavily effected by such developments. Over to DailyKos here. DailyKos is a liberal, highly traffic site, raised money for liberal candidates in last year's elections, visited a lot by liberals, and they're outraged about this. This is very much a threat to what we think we're doing here at DailyKos, and what others both on the left and right are doing.

And that's the point here, it's people across the board. Bloggers across the board outraged by this. Hensey's (ph) View, hardcore conservative commentary, but agreeing with the folks at Kos. It's time to grab our pitch forks peasant. I, for one, will fight to the death. And Hensey here linking to, Joe Gandelman, a moderate there, a moderate voice, saying the same kind of thing.

SCHECHNER: Also, we have the idea of the press exemption that now applies to broadcast stations, newspapers, magazines, and periodicals who have this exemption, and they can sort of talk about the campaigns without any sort of regulation, and do bloggers fit into that? And that's the big question that we've been talking about since the very beginning. Are bloggers journalist and what are they lowed to be exempt from or included in?

TATTON: And on that topic, who is a journalist. That one story we've been covering a lot on the blog-o-sphere is the story of Jeff Gannon. Gannon, you will remember, is the reporter with dubious credentials and using a fake name who managed to got a press pass at the White House for two years. The folks here at Fish Bowl D.C., this is a blog site, a gossip site that covers D.C. media. They thought that they wanted to get in on this action, also get a press box.

Now, they've been trying all week. Here you see, day one, rejected. And really frustrated at this point. Day four, it's not going very well for them. And they're saying that's been updated -- mid day update, they're so frustrated that they said that no one is even answering their calls at this point. So, we're going to keep following that, we'll bring you any developments.

SCHECHNER: It looks like they now have a open letter to the White House Media Affairs Office. That was the office that you were saying they weren't answering the phone.

Really quickly, this is my favorite blog name of the day, The Creeping Meatball. They have a link to two articles that are circulating around the blog. The first the Peggy Noonan article at, about how to improve network news. Another one is Frank Rich over at "New York Times" talking about how to put the news back in news.

TATTON: Another story that we really like today, just quickly, this is on Talk Left, this is about Mayor Oscar Goodman. This is linked all over the place. Now, Goodman was talking to a group of fourth graders at a school earlier this week, and was asked the question, "Mayor, if you marooned on a desert island, what would you like to have with?" He answered a bottle of gin. So, here, at Talk Left, we're with Oscar on this one -- Judy.

WOODRUFF: Well, between meatballs and gin, we can't decide which one we like better. All right, Abbi, Jacki, thank you, both. We'll see you both tomorrow.

Just ahead, two Democratic parties stalwarts, and some say potential rivals. Senator John Kerry encourages Democrats with deep pockets to help out a colleague facing re-election. That story next, in our "Political Byte."


WOODRUFF: Checking the "Political Bytes" on this Thursday. Senator John Kerry took time out last night to help a fellow Democrat who might one day become a potential presidential rival. Kerry was the special guest and keynote speaker at a fund raiser for Senator Hillary Rodham Clinton's re-election campaign. The event was held at a private home in Georgetown. A source tells CNN, that Kerry will host a Boston fund-raiser for Clinton in early May.

John Kerry's former running mate John Edwards has accepted another post on campus. He's agreed to serve as a visiting fellow this spring at Harvard's Institute of Politics. As we reported already, Edwards recently agreed to launch a center on poverty, work and opportunity at the University of North Carolina in Chapel Hill.

In Las Vegas, union leaders have been debating the future course of organized labor this week. The AFL-CIO Executive Committee voted down a proposal backed by Teamster's leader, James Hoffa, and several other unions. It would have put more union money into recruiting new members. Instead, the committee approved a plan supported by AFL-CIO President John Sweeney. It would emphasize spending on political and legislative efforts.

With that, that's it for today's INSIDE POLITICS. I'm Judy Woodruff, thanks for joining us and have a good evening. CROSSFIRE starts right now.



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