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JUDY WOODRUFF'S INSIDE POLITICS

Dan Rather Stepping Aside; The Lobbying War; L.A. Mayor Squeaks into Runoff in Reelection Bid

Aired March 9, 2005 - 15:29   ET

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


(BEGIN VIDEOTAPE)
DAN RATHER, CBS ANCHOR: Dan Rather, reporting for the "CBS Evening News." Goodnight.

ANNOUNCER: After 24 years behind the anchor desk, Dan Rather signs off for the last time tonight. We'll look back at his career and the controversy surrounding it.

The fierce fight over Social Security. We'll go behind the scenes and into the war room of a group that backs the president's plan.

UNIDENTIFIED MALE: What we will try to do is educate people about it and then personalize it as to how the message effects them.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I think it's very wise for the free world to be concerned about Iranian weapons.

ANNOUNCER: From Iran to North Korea to Russia, is Washington doing enough to prevent a nuclear attack?

(END VIDEOTAPE)

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

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

Well, for more than two decades, Dan Rather has been a mainstay of television journalism in this country. But in just a few hours his tenure as anchor of the "CBS Evening News" comes to an end. Along the way, rather earned a reputation as a relentless reporter, and he picked up his share of critics, especially among those in the political right.

Most recently, those critics were enraged by Rather's role in a now discredited CBS broadcast which raised questions about George W. Bush's service in the Air National Guard. According to a CNN-"USA Today"-Gallup poll, 35 percent of those polled think his news broadcasts are too liberal, while 13 percent call them too conservative. Thirty-seven percent label his work about right.

CNN's Bruce Morton, a long-time Rather colleague at CBS News, has more on this remarkable career.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This is the "CBS Evening News" with Dan Rather.

RATHER: Good evening.

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): That was the first one 24 years ago. But we knew him before that. Made his mark at CBS covering a hurricane, lots of them over the years...

RATHER: Remember that hurricanes turn in a counterclockwise direction, and we're on the upside of the hurricane.

It's hard to articulate it, but there is a sense when you're in a hurricane, at least my own sense, is it's about as close to god as you're going to get on this Earth.

MORTON: ... reported the deaths of a president.

UNIDENTIFIED MALE: We just have a report from our correspondent Dan Rather in Dallas that he has confirmed that President Kennedy is dead.

MORTON: He covered the Nixon White House, including one exchange during a presidential trip to Texas when the crowd applauded Rather.

RICHARD M. NIXON, FMR. PRESIDENT OF THE UNITED STATES: Are you running for something?

(APPLAUSE)

RATHER: No, sir, Mr. President. Are you?

MORTON: And he covered Nixon's resignation over the Watergate burglary. As an anchor, he stayed a reporter, always wanted to get away from the desk and go cover the story.

RATHER: Dan Rather reporting live from Tiananmen Square in Beijing, China.

Good evening from the Middle East.

MORTON: Sometimes the story was in the studio, as in this clash with presidential candidate George Herbert Walker Bush in the 1988 campaign.

RATHER: Mr. Vice President...

GEORGE H.W. BUSH, FMR. PRESIDENT OF THE UNITED STATES: I have respect for you, but I don't have respect for what you're doing here tonight.

MORTON: Rather was grilling Bush about Iran-Contra. Switchboards lit up, calls split bout 50-50. He was being a report again.

"Lightning in a bottle" one CBS News president called him. You never knew what might happen next. Used the word "courage" as a signoff at one point until the producer talked him out of it.

WALTER CRONKITE, FRM. CBS ANCHOR: Good evening from our CBS newsroom in New York.

MORTON: Walter Cronkite, who preceded Dan in the anchor chair, was a kind of national trust figure. That changed during Dan's time in the chair. So many channels, so many anchors, so many blogs.

And the news business changed. Less foreign coverage, fewer bureaus, less emphasis on expensive investigative projects, more on dollars and cents, return per share.

Bob Schieffer, who will temporarily take over the chair, told the "New Yorker," "When I came to work at CBS, CBS News was not a profit center. Now it is."

Dan Rather has seen the news business change in major ways in 24 years. He has one more signoff left.

RATHER: Dan Rather, reporting for the "CBS Evening News." Goodnight.

(END VIDEOTAPE)

WOODRUFF: Bruce Morton, the rap on Dan Rather is that he's biased. What do you think? You worked with the man for many years.

MORTON: I think what Dan always wanted most was a good story. You know, I don't know what his innermost political thoughts are. But most of us have opinions one way or another, but when we're writing, when we're talking, when we're on the air, we try to go down the middle.

I knew Brit Hume, now of FOX, when he was at ABC. I knew he was a conservative because we played tennis together. But watching him on the air, boy, I never -- I never could have told. And I think most of us want to get it right.

WOODRUFF: Bruce Morton, somebody who worked with Dan Rather for many years at CBS. Bruce, thank you very much.

Well, we're going to have more on Dan Rather's career later in this program. Jack Valenti and Ed Rolands will join me in a few minutes to talk about that long career. And Rather's exit is also making waves in the blogosphere. We'll check in with our blog reporters.

On Capitol Hill today, the head of the nonpartisan Office of Controller General rejected the idea that Social Security faces an immediate crisis. But he also urged Congress to act now to shore up the program's long-term finances. David Walker made his comments at a congressional hearing where the president's plans for private savings accounts continued to highlight the partisan divide over Social Security.

(BEGIN VIDEO CLIP) REP. CHARLES RANGEL (D-NY), WAYS AND MEANS COMMITTEE: Why is privatization and the private accounts placed on the table if, in fact, it has little or no relationship to do with the real problem that we face, and that is solvency?

REP. Jim MCCRERY (R-LA), WAYS AND MEANS COMMITTEE: The American people, you're right, ought to know what facts are. And the facts are that if you do it correctly, if you do it properly, if you structure it right, the personal accounts, funded through a carve-out, can, in fact, solve the problem of Social Security.

(END VIDEO CLIP)

WOODRUFF: The controller general acknowledged that he "would have done it differently" when asked about President Bush's reform plans and the White House lobbying effort for private accounts. CNN's Ed Henry recently got an inside look at the huge P.R. machine working to enact the Bush proposals.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): In tiny Canterbury, New Hampshire, Broan McCabe is a 37-year-old father playing with his 5-year-old twins. But he worries that Social Security will go broke long before his kids retire.

BRIAN MCCABE, PROGRESS FOR AMERICA: When you present the facts that how things have changed since 1950, when 16 workers supported each retiree, today it's three to one. And when today's younger workers retire it's two to one. I mean, the trend line is unbelievable.

HENRY: McCabe thinks it's time for his generation to step up. And so every few days he says good-bye to Colin (ph), Claire (ph) and his wife Lauren (ph) and heads to Washington. Here, Brian McCabe, unassuming dad, turns into a hard-ball political operative, vowing to spend $20 million to pass President Bush's Social Security plan.

MCCABE: It's more a crisis now. You know what I mean?

HENRY: In the basement of a D.C. television studio, McCabe runs this makeshift war room for Progress for America. It's a conservative group that's already run two ads supporting the president's call for private accounts.

UNIDENTIFIED MALE: This Social Security measure...

UNIDENTIFIED MALE: It will take courage and leadership to protect it.

HENRY: This week, McCabe released a third ad with a sharper edge.

UNIDENTIFIED MALE: Soon Social Security will be in the red, spending more than it takes in. If nothing is done, it will go bankrupt. HENRY: Money is power, and McCabe has access to big money. During last year's presidential campaign, conservatives like Alex Spanos, owner of the San Diego Chargers, and Don Arnold, co-chair of mortgage giant Ameriquest, gave $5 million. McCabe's group spent about $50 million to defeat John Kerry with some memorable ads.

Their biggest impact came with Ashley's story, about an Ohio girl who lost her mother on 9/11. At a public event, Ashley met the president and he gave her a hug. McCabe used that emotional moment for a campaign ad.

UNIDENTIFIED FEMALE: He's the most powerful man in the world and all he wants to do is make sure I'm save, that I'm OK.

HENRY: McCabe admits it's tough striking an emotional accord with a dry subject like Social Security. He said that's the challenge.

MCCABE: What we will try to do is educate people about it and then personalize it as to how the message effects them. Of course the other option is, you know, for Ashley to become an expert on Social Security. And we've not ruled that out yet either.

UNIDENTIFIED FEMALE: Which isn't far off, right.

HENRY: When McCabe let CNN in for a preview of his third ad, he was planning to keep it positive.

UNIDENTIFIED MALE: Let in a bipartisan way it hang for a second.

MCCABE: I think it's important to keep it, even if it is short.

HENRY: But now that the president's prospects are sinking a bit, McCabe changed course and went negative in the new ad.

UNIDENTIFIED MALE: Some people say Social Security is not in trouble. Just like some thought the Titanic was unsinkable. We don't have to hit the iceberg. Urge Congress to help President Bush save Social Security now.

(on camera): Brian McCabe's love of the political game was first sparked growing up right here in New Hampshire, which becomes a center of the political universe once every four years.

(voice-over): McCabe ran Bob Dole's '96 campaign in the Granite State and says he's still driven by the clash of ideas. And he will go to great lengths to make sure his ideas prevail. Consider his kids, Colin (ph) and Claire (ph). McCabe doesn't think he'll use them in an ad, but then laughs and says, "Well, maybe."

Ed Henry, CNN, Canterbury, New Hampshire.

(END VIDEOTAPE)

WOODRUFF: It's a rare inside look at that operation. Ed, thank you very much. Well, he is a veteran of Washington battles over politics and policy, now focused on securing the world's nuclear arsenals. Up next, I'll talk with former Senator Sam Nunn about the nuclear threat initiative and get his thoughts on some of the political debates here in Washington.

Also...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's a problem that needs to be solved, and it's prudent to solve it sooner rather than later.

(END VIDEO CLIP)

WOODRUFF: ... advice for Congress on Social Security. But is either party listening to the other side? Party veterans Jack Valenti and Ed Rollins weigh in on the back and forth over retirement reform.

(COMMERCIAL BREAK)

WOODRUFF: Iran's nuclear ambitions, a nuclear program in North Korea, and possible nuclear weapons in the hands of terrorists, those are all major concerns for the United States. Former U.S. Senator Sam Nunn joins me now. He's the co-chairman and CEO of the Nuclear Threat Initiative.

Senator, good to see you again.

SAM NUNN, NUCLEAR THREAT INITIATIVE: Good to be with you, Judy.

WOODRUFF: You gave a speech here in Washington today in which you asked are we doing all we can to prevent a nuclear attack, and you said no. What is not being done, who isn't doing it?

NUNN: We've got a long way to go in securing nuclear materials. And that is the number one priority, because without nuclear materials, a terrorist group cannot make a nuclear weapon. And those nuclear materials are finite.

It's a huge job, but the former Soviet Union has a great job of those materials. And there are research reactors all over the globe. So we've got to have a global partnership really active in securing these nuclear materials wherever they are at the source.

WOODRUFF: Is the Bush administration listening to this message?

NUNN: The president and President Putin the other day came up with a list of initiatives they themselves made priorities, and this was one of them. And this was the first time in my view that two presidents have really taken personal responsibility for this enormously important agenda. So I was encouraged by that.

WOODRUFF: But you're still worried?

NUNN: Oh, we have a long way to go. The global clean-out of research reactors where we have highly-enriched uranium, the overall securing -- accelerating and securing of the materials in the former Soviet Union, we don't even have tactical nuclear weapons on the agenda.

These are small battlefield weapons that could be carried by a couple of people, sometimes even one. They're mobile and they could easily be stolen.

We don't know how many the Russians have. We don't know where they are. We hope they know, because the inventory of these tactical nuclear weapons is enormously important. So that's completely missing from the agenda and needs to be addressed.

And the other thing that's really missing from the agenda is the huge number of weapons we and the Russians have on what I call hair- trigger alert. And that makes any kind of false warning much more dangerous. So even though we are working together now, there's still more of a danger of an accident, miscalculation, misjudgment than there was during the Cold War because the Russian warning systems have deteriorated so much.

WOODRUFF: It's an enormous problem. I want to also ask you a few other things.

The Middle East, the president has said the elections in Iraq were a catalyst for democracy in the Middle East. Should he get some of the credit for what's going on in the Middle East, do you think?

NUNN: Oh, I think the Bush administration and their actions in Iraq and their talking about democracy, I think they've changed the status quo. There's no question in my mind about that. And the Palestinian elections, the death of Arafat played a big role in the enabling that kind of thing to happen.

The question is what's going to come out of all this, because as encouraging as elections are in Iraq and the Palestinian Authority, an election is one part of the democracy. There are many other parts, including securing minority rights and including making sure a majority doesn't trample on minority, including institutions that protect property.

There are just a whole agenda of things that have to happen. And what we don't want to happen is theocracies to come out of this -- this quest for democracy. You can't end up with a theocracy either in Iraq or in other places. And that's not on our agenda, and certainly we have to do what we can to steer it in a different direction.

WOODRUFF: Two quick domestic questions. Are your fellow Democrats right to say there is no crisis in Social Security?

NUNN: I think that's wrong. I think the Bush proposal is wrong.

It doesn't even tell us how we're going to get Social Security under control. But to say there's no problem in Social Security, I think that's wrong. Whether you want to call it a crisis depends on how you define it. You can say we have enough Social Security funds to take us for another 30 years, but it doesn't say what we have to do to the general fund, raise taxes or cut enormous amount of expenditures to repay the Social Security fund what is owed it from the treasury bills that have gone in it. So there's a real problem here.

I would have to add that the Medicaid and Medicare problem are much more serious problems. So I'm -- I'm for President Bush joining this issue. I wish he'd take Medicaid and Medicare also, but I don't think his solution as anything like the -- either the cuts or the increased revenues that are going to be essential to deal with this overall problem.

And I think the Democratic Party can only point out the flaws in the president's program for a while. After that, they're going to have to come up with their own approach to this, because there is a problem in the long run.

WOODRUFF: Some lessons from former Senator Sam Nunn. Thank you very much.

NUNN: Thanks, Judy.

WOODRUFF: We appreciate your stopping by.

NUNN: Thanks.

WOODRUFF: Thank you.

NUNN: Good to be with you.

WOODRUFF: Well, with all the fuss over the president's plans to overhaul Social Security, a Republican senator says it's time to compromise on one of the plan's most contentious issues. Two political veterans weigh in when we return.

(COMMERCIAL BREAK)

WOODRUFF: There's been a new development in Congress's investigation into the use of steroids in professional baseball. Ed Henry is back with us with the latest on this -- Ed.

HENRY: Judy, that's right. CNN has learned that a slew of congressional subpoenas are going to be going out later today to various -- some of baseball's biggest stars, current and retired players, as well as various officials, to try to get to the bottom of how many players have been using steroids.

CNN has confirmed through sources close to the investigation and also the chairman of the House Government Reform Committee in Congress, Tom Davis of Virginia, has told CNN producer Ted Barrett (ph) that those subpoenas will be going out later today. They're going to be going -- they will be split up into friendly and unfriendly subpoenas, we're being told.

"Friendly subpoenas" will be going to people like Jose Canseco, who has written a high-profile book about this and has already agreed to testify next Thursday before this House committee. But then "unfriendly subpoenas" are going to be going out to former stars like Mark McGwire, also to Sammy Sosa and Jason Giambi, among the current players, Raphael Palmiero as well, getting unfriendly subpoenas because they have thus far refused to testify.

We understand these subpoenas are going out in the next hour or so. We're also being told that friendly subpoenas are going to Major League Baseball officials and labor officials within Major League Baseball who have agreed to testify.

Bottom line here, Judy, is that this is going to raise the stakes for people like Mark McGwire, who have refused to testify. If they now refuse to answer in and address these subpoenas, they could, obviously, face contempt of Congress charges. If they do answer the subpoenas and come to testify, they will be under oath.

If they do not tell the truth, they could obviously face criminal charges for not telling the truth. So this really raises the stakes in this congressional investigation. But the bottom line, as Congressman Davis told CNN, this is not a "got you" investigation. He's just trying to get to the bottom of exactly who has been using steroids and who hasn't.

WOODRUFF: Very big story. Ed Henry, thank you very much. Telling us for the first time on INSIDE POLITICS. Thank you, Ed.

Well, another Republican senator says the fight over private accounts and Social Security are getting too much attention as Congress struggles over the reform of the system. With me to talk more about this divisive issue and other topics, in Los Angeles, Jack Valenti, a former aide to President Lyndon Johnson. And in New York, Republican strategist Ed Rollins.

Ed Rollins, let me quote for you first Lindsey Graham's comment. Basically, he is saying that Republicans have made a strategic mistake by focusing on these private accounts, so-called private accounts. And Senator Grassley, frankly, made similar comments last week.

What do you think?

ED ROLLINS, GOP STRATEGIST: Well, trying to sell only the private accounts has been -- has probably turned out to be a mistake. I think the bottom line is the president raised a very significant problem facing the country, and somehow he has to get bipartisan solutions here. And the only probable solutions long term are either raising taxes, raising revenue, or cutting benefits, neither of which are very acceptable.

So basically throwing out the private accounts I think gave Democrats an issue they could sort of bat around since you've got to borrow trillions of dollars in order to make them initially work without solving the end problem.

WOODRUFF: Jack Valenti, do you think the Democrats would have been more willing to compromise if private accounts were not -- were taken off the table?

JACK VALENTI, FMR. AIDE TO PRESIDENT JOHNSON: Probably, but I do solute Senator Lindsey Graham, the senior senator from South Carolina. Because what he's trying to do is compromise, and compromise is not a ignoble word. This is what makes a free democratic society work.

So I'm saying to -- Senator Graham is saying that there is a problem. In 13 years the Social Security system will be taking in less revenues than it's paying out. And a man 30 years old today when he's 67 and wants to draw his benefits, will find the system fairly well broke and the system -- the benefits will be much less.

So Senator Graham is putting forward some ideas which obviously are subject to change. But he's saying to the president and he's saying to the Democrats, we've got to find some way to find middle ground here if we're going to deal with this problem where the fiscal arithmetic is stark and clear. And I think he's doing a great job in trying to do that.

WOODRUFF: I'm going to turn you both to a very, very different subject, and that is Dan Rather stepping down today as a 25-year anchor of the "CBS Evening News."

Ed Rollins, what does the story of Dan Rather and his departure say about political journalism right now?

ROLLINS: Well, political journalism, like anything else, when you become the focus of attention, whether you're a politician or you're a journalist, the end results may not be all that you want. I think Dan has had a very distinguished, long career. I think he's been a great reporter. I think he's broken some great stories over the past of his career.

Has he gotten mired in some controversy? Yes, he has. Has he made some mistakes along the line? Any of us have made mistakes in a 25- year career. I think he's to be commended, though, for overall a very fine career.

WOODRUFF: Jack Valenti?

VALENTI: Well, in the interest of a full disclosure, I've known Dan Rather since he was a radio reporter in Houston, Texas, and then later worked for a Houston television station. I think he's a real giant.

He's a reporter, not just an anchor. He's not a news reader. And that's why he's gotten himself into some controversy because he's not afraid to try to break a story or to try to explain a story.

This latest thing with the president's service in the military was just one of the big blunders. But that shouldn't stain a man's 24- year career as an anchor and almost 40-year career as a television reporter. I think he's one of the giants of this industry, and he deserves applauding of every one of us.

WOODRUFF: Clearly one of the giants of the industry. We're going to leave it there. Jack Valenti, Ed Rollins, great to see you both. We'll see you next week.

ROLLINS: Thank you. Take care.

WOODRUFF: A question. Will rising gas prices help pump up support for the president's energy plan? The story when we return.

Plus, John Kerry's on a mission, but will Congress pass his plan to provide health care for every child in the country?

(COMMERCIAL BREAK)

WOODRUFF: As the markets get set to close on Wall Street just before 4:00 in the East, I'm joined by Christine Romans in New York with "The Dobbs Report."

Hello, Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Hi there, Judy.

Well, stocks on Wall Street broadly lower. A spike in bond yields earlier today pushing the major stock averages lower. And as the final trades are being counted, the Dow Jones industrial average down 105 points. The Nasdaq is 0.5 percent lower.

Oil came within 2 cents of its all-time high of $55.67 a barrel. That's despite news that U.S. crude stockpiles are at their highest level since July. At the close, though, oil settled up, just slightly, near $55 a barrel.

Two companies are warning customers they may become victims of identity theft. Lexus-Nexis says 32,000 customers' accounts were hacked into, and DSW Shoe Warehouse says credit card information from customers --more than a hundred stores -- was stolen over the last three months. The FTC says there were more than 600,000 victims of identity theft last year, costing consumers more than half a billion dollars. The cost of businesses was in the tens of billions.

The IBM-Lenovo deal has been cleared by a national security oversight board. Lenovo agreed to buy IBM for $1.25 billion back in December. Then U.S. lawmakers launched an investigation into whether that deal threatened national security by giving important technology and information to the Chinese government. But the committee reviewing that deal unanimously agreed it would not pose a national security threat. We'll have more on this story tonight at 6:00 p.m. Eastern.

Also on "LOU DOBBS TONIGHT," the run-up in oil prices means consumers are paying more for gasoline while their paychecks stay the same. We'll take a look at the effects of soaring commodity prices in tonight's "Assault on the Middle Class."

(BEGIN VIDEO CLIP)

PETER MORICI, UNIV. OF MARYLAND: The average Joe that commutes a lot. The guy who drives 15, 20,000 miles a year, has a larger vehicle rather than a smaller vehicle, lives in the suburbs or the exurbs, has a long commute. He doesn't have any choices. He's got to keep on driving the car that he's got. And he's going to have to pay for the gas.

(END VIDEO CLIP)

ROMANS: Also tonight, we talk with Congressman Joe Barton, chairman of the House Energy and Commerce Committee about why he thinks energy reform is the only way to combat soaring oil prices.

Then, former Secretary of State Henry Kissinger joins us. We'll discuss China's growing economic and military threat.

And Representatives Zoe Lofgren and Virgil Goode face off on the dream act: a bill designed to give illegal aliens the opportunity to attend American universities, often for less than many American students pay. All that and more tonight at 6:00 p.m.

Now, back to Judy Woodruff.

WOODRUFF: Thanks, Christine. We'll be watching at 6:00.

INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: With prices at the pump skyrocketing, the president urges Congress to pass his energy plan.

BUSH: We have had four years of debate about a national energy bill. Now's the time to get the job done.

ANNOUNCER: But will his proposal bring back cheaper gas?

He hasn't said if he's going to run for reelection as California governor, but it looks like Arnold Schwarzenegger already has an opponent.

There's no denying it: Blogs are a growing influence on politics. But should they be regulated by Washington? We'll look at both sides of the argument.

Now live from Washington, Judy Woodruff's INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back.

There are few things that capture the attention of the American public faster than rising gasoline prices. New government projections point to record highs by the spring. And right on cue, the president and congressional Democrats are trading claims over how best to respond.

Our Bill Schneider is in Los Angeles, one of the areas with the highest gasoline prices.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: For drivers, a new gas price crisis. For politicians, a new opportunity. Gas prices are projected to hit a new high soon.

BRAD PROCTOR, CEO, GASPRICEWATCH.COM: We'll see that probably Memorial Day weekend. The national average will be $2.25, which will be 20 cents over what it was last year.

SCHNEIDER: Prices are already higher in some parts of Los Angeles.

UNIDENTIFIED MALE: Right now it's taking like about $40 when it used to take like $20.

SCHNEIDER: What can politicians do? President Bush wants to open up a section of the Arctic National Wildlife Refuge, often called ANWR, for oil drilling.

BUSH: Congress needs to look at the science, and look at the facts and send me a bill that includes exploration in ANWR for the sake of our country.

SCHNEIDER: Drilling supporters in Congress are trying to get the measure included in the Senate budget resolution. That way it could pass with a simple majority, 51 votes instead of the 60 needed to shut off debates.

This Sierra Club ad being run in a Baton Rouge newspaper urges Louisiana Senator Mary Landrieu to demand that the debate over arctic drilling happen in public and is not settled in back rooms or buried deep in the federal budget. Environmental groups have been running ads downplaying the value of oil from the arctic refuge.

UNIDENTIFIED MALE: There's just a few months of oil in the refuge that even the oil industry admits wouldn't be available for ten years.

SCHNEIDER: But the issue is getting hot.

SEN. BARBARA BOXER (D), CALIFORNIA: In California, March Madness is, what's happening to gas prices?

SCHNEIDER: Drilling opponents are under pressure to come up with their own response. Here's one.

SEN. CHARLES SCHUMER (D), NEW YORK: But if you ask most Americans, what do they want? They want someone to do something about the price coming down now. The president, instead of going out to Ohio and making a political speech, should turn the spigot, open the SPR and bring prices down.

(END VIDEOTAPE)

SCHNEIDER: "The president has no plans to tap the Strategic Petroleum Reserve. We do not believe it should be used to manipulate prices or for political purposes," the White House press secretary Scott McClellan told reporters today aboard Air Force One. So, in Washington, a standoff, while here in Los Angeles, prices keep climbing -- Judy.

WOODRUFF: So, Bill, what happens if nothing happens? If nothing happens in Washington, what's going to happen to prices?

SCHNEIDER: Prices will go up. Drivers will get angry, and they may very well may take out their wrath on politicians of both parties next year at the midterm election if they don't come down by then.

WOODRUFF: So you are saying neither party is necessarily safe here.

SCHNEIDER: All politicians say -- all voters say to politicians is, do something, and the evidence is prices coming down. That's what voters want to see.

WOODRUFF: OK. Bill Schneider in Los Angeles today. Thank you.

Well, we keep our focus on California in today's "Political Bytes" segment. Incumbent Los Angeles Mayor James Hahn made it in a reelection runoff, but just barely, with city councilman Antonio Villaraigosa. The two will square off on May 17 in a rematch of their runoff four years ago.

With 99 percent of precincts reporting, Villaraigosa has 33 percent while Hahn has almost 24 percent. Attorney Bob Hertzberg almost knocked Hahn out of the runoff, but this morning he called Hahn and dropped out.

In another California race, Democrat Doris Matsui won almost 72 percent of the vote yesterday to succeed her late husband in Congress. She is expected to be sworn in later this week. Bob Matsui had represented the district near Sacramento for 26 years when he died of a rare bone marrow disease on January 1.

And looking ahead to next year, staff members confirm that California State Treasurer Phil Angelides, a Democrat, will soon announce plans to run for governor in 2006. Angelides has been an outspoken critic of Republican Governor Arnold Schwarzenegger.

So, should the blogs be regulated? Some here in Washington say yes. The story when we come back.

And later, two former presidents tee off for a good cause. But is this any way to spend your time on the day before you undergo surgery?

(COMMERCIAL BREAK)

WOODRUFF: Senator John Kerry is pressing ahead with his effort to force Congress to act on his so-called Kids First plan. The legislation will provide health insurance for every American child. And today the former Democratic presidential nominee unveiled the initial results of his grassroots effort. He says more than half a million people have signed a petition supporting Kids First. And he says it is time now for Congress to act.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D), MASSACHUSETTS: It is unacceptable for the richest country on the face of this planet not to have health insurance for its own children, let alone for some 30-plus million other Americans who fail to have health insurance at all. Unacceptable.

(END VIDEO CLIP)

WOODRUFF: Senator Kerry says so far more than half a dozen of his fellow senators have thrown their support to his Kids First plan.

WOODRUFF: Blogs, we've noticed, are playing a growing role in American politics. Now the Federal Election Commission is going to take a look at how campaign finance laws apply to political activity on the Internet. Howard Kurtz of CNN's "RELIABLE SOURCES" looks at how all this could affect blogging.

(BEGIN VIDEOTAPE)

HOWARD KURTZ, HOST, "RELIABLE SOURCES" (voice-over): Anyone who's missed the impact of blogs on the political establishment must have been living without electricity the last couple of years. Some of these individual web logs were more outraged than the mainstream media at Trent Lott's campaign for Strom Thurmond's segregationist campaign for president, starting a wave that swept Lott out of the Senate majority leader's office.

Bloggers helped Howard Dean raise record-shattering amounts of online cash, led by such liberals such as Daily Kos, who disclosed that he was a consultant to the Dean campaign. But when John Thune ousted Senate Minority Leader Tom Daschle in South Dakota, two bloggers who were savaging Daschle didn't disclose that they were being paid by the Thune campaign. didn't close they were being paid by the Thune campaign. Blogs became such a badge of hipness that the Bush and Kerry campaigns both had one.

Could bloggers' growing influence soon be blunted by the heavy hand of federal regulation? Bradley Smith (ph) thinks so. He's one of six members of the Federal Election Commission and he says a recent federal judge's ruling will force the agency to crack down on political bloggers. If a Web blog carries a positive article about a candidate, is that unpaid advertising? If a blogger includes a link to a politician, meaning that one click of a mouse takes you to the candidate's Web site, that, says Smith, could be deemed a political contribution. But he also told C-Net (r)MDNM¯News that the commission might grant a press exemption to some sites like Slate and Salon, but where the line will be drawn, he admits, is difficult to say.

Other FEC commissioners say they're not convinced any action is needed. And John McCain and Russ Feingold, the senators who wrote the campaign finance measure that started this legal ball rolling, say the idea that it requires more Internet regulation is just quote, "misinformation" from the anti-reform crowd. Bloggers, as you might imagine, aren't happy about the prospect of government restrictions.

Ed Morrissey of Captain's Quarters says: "People who want to sabotage a particular blogger only need to organize a swarm of FEC complaints about the blog. Enough complaints and the FEC will eventually make its way to investigating the blogger." Another blogger, LeShawn Barber, says: "The one thing uniting liberal and conservative bloggers is a threat to our first amendment rights."

(on camera): Part of the appeal of bloggers, as well as the chief pitfall, is that anyone can say anything with no editing and no lawyers. It's hard to imagine that federal regulators will be able to rein in this Wild West of unfettered commentary. Then again, who would have thought a few years ago that single person with a motive for a megaphone could have an impact on American politics?

Howard Kurtz, CNN's "RELIABLE SOURCES."

(END VIDEOTAPE)

WOODRUFF: It was also the bloggers who played a large role in discrediting a CBS report that has left a cloud over Dan Rather's final days as anchor. So what are they saying now that he's leaving his post? We'll go inside the blogs when we return.

(COMMERCIAL BREAK)

WOODRUFF: Dan Rather's farewell from the anchor desk is attracting a lot of attention from bloggers today. For a look at some of the biggest topics online, let's check in with Jacki Schechner. She's our blog reporter. And CNN political producer Abbi Tatton. Hi, Jacqui.

JACKI SCHECHNER, CNN BLOG REPORTER: Hi, Judy, yes, Dan Rather stepping down after 24 years in the anchor chair at CBS Evening News and the conservative blogs have a running commentary on Dan's last day. You may remember, too, it was the conservative blogs who played a huge role in looking into and questioning the documents behind what's now been called Memogate.

We go over to ratherbiased.com, and they've had a running commentary all day long, including a link to a Chicago Tribune commentary that was written calling the retrospective that's planned to air tonight on CBS, "an intensely emotional apologia disguised as a career retrospective."

They also go down to say, and I thought this was really interesting because I hadn't heard this before: "It's sad it has come to this for Dan," they say. And they say: "In fact, we offered to shut down ratherbiased.com entirely if Dan would agree to just one on the record interview about things. He never accepted our offer and then a year later Memogate happened."

TATTON: Now over to Powerline blog. It would be hard to mention the Dan Rather story without Powerline. It's one of the big conservative blogs out there who together with its readers really hammered CBS and Dan Rather on this. And it's their top post right now. "The Washington Post's Tom Shales," they say, "thinks that Dan Rather is leaving by the high road. In our joy that he is leaving, we won't quibble." We should also mention that Powerline blog just last night won an award, this is from the Week magazine who looked at a whole range of blogs, left, right and center, and gave Powerline "blogger of the year" award.

SCHECHNER: Now not a lot of comment on the left about Dan Rather's departure. But we did find one interesting post, and it's our blog name of the day, it's called Now Cough (ph). And it's a guy named John Barth (ph), "a blue state guy in a red state world," is what he calls himself. He tells the story of me and Dan. He was hosting an AOL chat a few years back, during the Clinton impeachment hearings. And he said that Dan Rather had had a particularly long day and in spite of that he was still fair and balanced and gracious and had thanked him for the participation.

He goes down to the bottom and says: "Dan is an original, a character and a bit whacko, but he's an old school news guy. He and his a producer screwed up big. Class act that he is, you don't hear him whining or blaming others." So just another viewpoint on Dan Rather's departure.

TATTON: Onto another story, the liberal bloggers are looking at the bankruptcy bill that's in the Senate this week. The liberal bloggers making it clear they are really not happy with this bill. They think that it benefits the credit card companies at the expense of the little guy. And what they are focusing on is 13 Democratic senators who yesterday voted with Republicans to allow for final passage of this bill.

They are now publicly shaming these senators here. At MaxSpeak: "Democratic senators who will never be president." They are saying that this vote is going to be remembered. They list them here. And you can see the comments resolving "never to forget this betrayal of the common man."

Over to Vegacura right here, suggesting here that some of these Democratic senators are a little bit too cozy with the credit card industry. Comment here: "I realize Joe Biden's middle name is Visa but I'm surprised that he has given up on winning the Democratic presidential primary in '08 so early."

SCHECHNER: The vote actually has not reached final passage yet. But what they did yesterday is vote...

TATTON: They cleared the way.

SCHECHNER: Exactly. Exactly. "Bankruptcy fallout" is the headline over at politology.us (ph) on their blog section. And what they talk about is that the blogs did work on getting the word out on this issue. It just wasn't enough yet. And they talk about how powerful the blogs could be at some point. They say "we are the future fundraisers, technology leaders and PR folks of future campaigns; at the same time that we're forced to accept the lack of power we have now, one gets the sense that the community has recommitted to taking more power in the future." TATTON: Now, an update on an ad that's been in the blogs in the last couple of weeks that we have talked about. This is an ad by the conservative lobbying group USA Next against the AARP that feature a photo right here. You can see the ad that originally ran on the American Spectator site. The photo of a gay couple kissing. Now USA Next originally said that they had bought this photo fair and square from The Portland Tribune. They later backtracked and said, actually, no, they hadn't. Now the couple in question is suing for $25 million, suing USA Next.

SCHECHNER: Now they had said originally they were going to take legal action. Now it's a $25 million lawsuit against USA Next and Mark Montini International, the political consulting firm that made the ad for USA Next. We should mention this broke on americablog.com because John Aravosis, who does that blog, is actually acting as a spokesperson for this couple. The quote from one half of that couple: "The lawsuit is intended to make USA Next and Mark Montini pay for the harm they have caused and to send a message." So Judy, back to you.

WOODRUFF: OK. Jacki, now I keep meaning to ask you how the two of you pick the blog sites you choose to look at, so we're going to get to that in the next couple of days.

SCHECHNER: We will definitely prepare that for you.

WOODRUFF: We keep talking about that.

SCHECHNER: Absolutely.

WOODRUFF: OK. Jacqui and Abbi, thank you both.

Well, before he heads into surgery, Bill Clinton headed for the links. Up next, former Presidents Bush and Clinton headline a charity golf tournament for tsunami victims.

(COMMERCIAL BREAK)

WOODRUFF: Former Presidents Bill Clinton and George H.W. Bush put their golf games to work today in Florida, raising money for tsunami victims. The event was organized by professional golfer Greg Normal. It was expected to raise about $2 million. As we reported, Mr. Clinton is scheduled to have a surgical procedure tomorrow to have fluid and scar tissue removed that have built up since his September heart surgery. Yesterday, he called the procedure, quote, "no big deal." It looks like he's playing right on through.

That's it for INSIDE POLITICS this wednesday. I'm Judy Woodruff. Thanks for joining us. "CROSSFIRE" starts right now.

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