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JUDY WOODRUFF'S INSIDE POLITICS

Senate Troubles Continue; Bolton Nomination Still in Question

Aired April 25, 2005 - 15:30   ET

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


(BEGIN VIDEOTAPE)
ANNOUNCER: Duck and cover. What will happen if the war over judicial nominees goes nuclear? We'll take a look at the private talks and the public pronouncements.

SENATE MAJORITY LEADER BILL FRIST (R) TENNESSEE: Don't leave our courts hanging. Don't leave our country hanging.

ANNOUNCER: Will it be yea or nay on John Bolton?

SENATOR ARLEN SPECTER (R) PENNSYLVANIA: I think it's too close to call.

ANNOUNCER: With some Republicans sounding less than confident, will the president's nominee for ambassador to the U.N. throw in the towel?

Move over Limbaugh and Hannity. Have liberals found their voice?

UNIDENTIFIED MALE: The vast left-wing conspiracy has become kind of a short-hand, even on the left, for this whole new set of new institutions.

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

(END VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. Some top Senate Republicans and Democrats insist they are trying to prevent the fight over the president's judicial nominees from blowing up in their faces, but you might think they have an unusual way of showing it. Leaders on both sides continue to rail at one another publicly, including the Senate's number one Republican, who preached to the choir on Sunday.

(BEGIN VIDEOTAPE)

FRIST: Emotions are running high on both sides.

WOODRUFF (voice-over): They certainly are, and Senate Majority Leader Bill Frist fanned the flames this weekend, taking part in a conservative Christian telecast called "Justice Sunday." The rally, held at a Kentucky megachurch, attacked Democrats for blocking the president's judicial nominees, with speakers casting the minority party as against people of faith. Frist, for his part, never invoked religion in his brief address.

FRIST: Either confirm the nominees or reject them, but don't leave them hanging. Don't leave our courts hanging. Don't leave our country hanging.

WOODRUFF: Meanwhile in Washington, lawmakers say they are hoping to avoid a showdown over the so-called nuclear option, which would effectively take away Democrats' ability to filibuster judicial nominations by staging endless debates.

SEN. DICK DURBIN (D), MINORITY WHIP: We want to avoid this constitutional confrontation. I really think it's going to do great damage to the Senate as an institution if the nuclear option is used.

WOODRUFF: Republicans say there's a simple solution: just give the president's picks an up-or-down vote.

SEN. MITCH MCCONNELL (R), MAJORITY: I'm hoping that we'll be able to diffuse this controversy by getting back to the way we all comfortably operated until the last Congress.

WOODRUFF: But for now, stalemate, with Republicans insisting they have the votes to go nuclear, and Democrats threatening to shut down government if that happens.

(END VIDEOTAPE)

WOODRUFF: We'll get an insider update on the battle over judges and filibusters shortly, when I talk to two prominent senators, Minority Leader Harry Reid and Republican Elizabeth Dole.

Meanwhile, embattled House Majority Leader Tom DeLay will get a lift tomorrow, when he flies with President Bush aboard Air Force One. They will travel to Washington from Galveston, Texas, where the president will hold a town meeting on Social Security that DeLay will attend along with other Republican lawmakers. DeLay's spokesman declined to comment on the political significance of the invitation to fly on the president's plane at a time when DeLay's ethics are under scrutiny.

Now, we turn to the John Bolton controversy and his chances of being confirmed as U.S. ambassador to the United Nations. To hear one Republican tell it, Bolton's odds aren't all that good, and with a committee vote on hold for another two and a half weeks, who knows what might happen?

Here now, our national correspondent Bruce Morton.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): Did he really chase a woman down a Moscow hotel corridor yelling after they had had argument? She admits to being a Democrat. Does he bully subordinates? And the key question, can he be confirmed?

SPECTER: I think it's too close to call. I think the best policy is to have his nomination come to the full Senate, not decided by a committee.

MORTON: New troubles for Bolton. This week's "Newsweek" reports that British foreign secretary Jack Straw complained to then secretary of state Colin Powell about Bolton's hard line on Iran's nuclear program that Powell asked an aide to get a different view and finally used softer language. And British officials pressed the U.S. to keep Bolton off the team, which negotiated a nuclear disarmament agreement with Libya's Moammar Gadhafi, although the magazine also quotes one Bush aide as denying these reports.

One Democrat thinks Bolton should withdraw.

SENATOR CHRIS DODD (D) CONNECTICUT: He would do himself and the country a favor by withdrawing.

MORTON: But that's unlikely. Can he be confirmed? President Bush's first attorney general, John Ashcroft, was controversial and got confirmed, but not this controversial. Supreme Court Justice Clarence Thomas was this at least this controversial and he got confirmed back in 1991, but...

STUART ROTHENBERG, CNN POLITICAL ANALYST: It is unusual. For every John Ashcroft who had trouble and Clarence Thomas who almost didn't make it, there are five times, maybe ten times, as many who get in trouble who are -- whose nomination are pulled, who just never make it.

MORTON: Like John Tower, a former senator who the first President Bush named defense secretary in 1989 -- allegations of alcohol abuse in classified FBI files only senators could read did him in. Still, there is one way Bolton may make it.

ROTHENBERG: George W. Bush, I think, has to go to Republican senators and say this isn't about John Bolton, this is about me, this about my administration, this is about my foreign policy. You've got to do this for me. If it's about Bolton, Bolton probably goes down.

MORTON: Stay tuned. It's a long way from over yet.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Well, on John Bolton and turning back to the battle over judicial nominees, joining me from Capitol Hill is the Senate Minority Leader Harry Reid of Nevada. Senator, thank you for being with me.

SEN. HARRY REID (D), NEVADA: My pleasure, Judy.

WOODRUFF: First on all, on John Bolton, the White House is saying that the Democrats are trumping up charges and allegation against him. Are they right?

REID: Well, I don't think any of the charges to this point have been trumped up. As a result of the hearing being postponed, there have been a number of complaints have come in, and that's what the committee process is about. People will look at those, weigh those and Senator Biden and Lugar can find out if they're substantial. If they are, they will have some evidence presented.

But I just think it's something that we need to do. That's what the committee process is all about. I don't know whether Bolton's going to make it or not. But people shouldn't be up in arms now. This is a process that we need have. This person needs to be vetted -- that is, let's find out if he's qualified both from a perspective of his experience, which appears to be the case, but don't know about his temperament.

WOODRUFF: Senator, let me turn you now to the dispute between the Democrats and the Republicans in the Senate over judicial appointments. The Republicans say they have the votes to pass the so- called "nuclear option," which would prohibit the filibuster on these nominees. Are they right?

REID: Well, first of all, Judy. I heard you, and I hear people say all the time, there's not anyone that's ever been filibustered as a result of a judicial nomination. Simply not true. Senator Frist voted to stop the invocation of cloture on at least two separate occasion. He must have thought it was okay then. That was Berzon and Paez. We know that Justice Fordyce (ph) was filibustered, and he withdrew.

So filibusters have gone on for a long time, since the beginning of this country. And I think that -- I can't justify what the Republicans did to Clinton's nominees. Sixty-nine of them never even had a hearing. And I'm not here to talk about what went on during Bush's first tour of duty, first four years. But I'm the leader now, and I can talk about what's going to go on in the future. And I think that they're overreacting.

WOODRUFF: Well, do you think they have the votes -- the Republicans?

REID: Well, I can only count Democratic votes. I can't count Republican votes. I'm surprised though, if they have the votes, why they haven't moved forward at this point.

WOODRUFF: Well, let me ask you about what we saw in the "Washington Post" yesterday. Longtime political reporter/columnist David Broder saying there's needs to be a compromise. He says the Democrats should make the first move, that the Democrats should step back on this, both for principle reasons and for reasons of politics.

REID: My first 10 minutes of being the leader, I told all the press there assembled that I would rather dance than fight. I still believe that. I want to do everything I can to avoid this. I have talked to Senator Frist on a number of occasions about what I think would resolve this. Those are private negotiations, but I think that we need to move forward and get away from all the harangue. I think this situation, where they say that we're filibustering against people of faith -- the Constitution prevents us from making someone's religion as a prerequisite to their taking any office. This is just all something to do with nothing.

WOODRUFF: So, are you saying you as the leader of the Democrats in the Senate are not prepared to back down?

REID: Well, as I've said before, I'd rather dance than fight, and I'm willing to see if we can resolve this in some way. And the answer is yes, I'm trying to work to do this.

WOODRUFF: Well, your colleague, Senator Joe Biden, is saying, for example, that the Democrats ought to let five of the seven judicial nominees of the president's go through, and just deny two of them.

REID: Well, yeah, Senator Biden -- I've talked to him at some length yesterday -- his numbers are a little not quite right. But I'm happy to look at some of these numbers. We're doing that. We're looking at a number of different things that can be done to change the procedures. But this is a negotiation I'm going to do privately, not publicly. I've talked to Senator Biden, by the way, at great length, and he's totally in support of what I'm trying to do.

WOODRUFF: You said on Friday, after Vice President Cheney weighed in and said he's going to get involved, that the president, you said, was not being honest when he told you he would stay out of this judicial nominee fight. Are you saying the president lied?

REID: Well, what I'm saying is the president -- I asked him -- I said I think you should inject yourself into this problem we're having here in the Senate where a lot of important legislation we need to take care of this year, if this happens, it's going to make things much more difficult to do. And he said -- and there was only five or six of us in the room -- he said, this is a Senate issue. It's nothing that the White House is going to get involved in.

Well, Vice President Cheney was right there seated next to me. He could hear the conversation. It was very open and public. We were asking questions of the president. And a few days later, we have this onslaught from the Vice President's Office. The president wasn't leveling with me, unless he changed his mind. And I think, had he changed his mind, it would have been -- the polite thing to do is call me and tell me, you know what I told you in the White House was simply wrong. I've changed my mind. That didn't happen. I heard about Cheney in the newspaper.

WOODRUFF: So you're saying --.

REID: You draw your own conclusion. He told me one thing in the White House, and something else ensued later.

WOODRUFF: All right, we have to leave it there. Senator Harry Reid. Thank you very much, Senator. We appreciate it.

REID: You bet, Judy.

WOODRUFF: Well, a Republican rebuttal is just ahead: I'll be talking with Senator Elizabeth Dole. Does she see room for compromise in judicial nominees?

Also ahead, a potential challenge and a definitive endorsement when Hillary and Bill Clinton appear in today's "Political Bytes."

And later, President Bush wants Saudi Arabia to help put a cap on soaring gas prices. We'll have a live report on the president's appeal, and we'll gauge the fallout from high energy costs.

(COMMERCIAL BREAK)

WOODRUFF: With me now to talk about the Senate debate over judicial filibusters, as well as other issues, is Republican Senator Elizabeth Dole of North Carolina. Good to see.

SEN. ELIZABETH DOLE (R), NORTH CAROLINA: Happy to be with you today. Thank you.

WOODRUFF: Appreciate it. Now, Senator, where does this argument over judicial nominees stand right now?

DOLE: Well, first of all, let me say that the Democrats started this for 214 years, if, when a nominee arrives on the Senate floor, it's been an up-or-down vote, if they have a clear majority of Senators in favor of that nominee. And, of course, the last two years, the last session of Congress, rather, it has been a majority. Not the majority vote, but 60 votes for ten of the president's nominees for courts of appeals positions. This just has to be changed. We've got to go back to what was happening for 214 years, and also, to give the Senate a chance to express its advice and consent, which we're not able to do now.

WOODRUFF: You're not afraid that if this comes to a vote and if the nuc -- if the so-called nuclear option -- prohibiting the filibuster is imposed, that you're going to have gridlock in the Senate on both sides?

DOLE: Well, you know, the Democrats are the ones who are saying if you go to your Constitutional right, which is to establish the procedural rules of the Senate -- that's article I, section V -- if, indeed, you were to enact that, which Senator Byrd did four times during his time as majority leader, four times he utilized that particular procedure. And they're saying, if were to do that, then we're going to shut down the Senate.

Well, I think that would be a huge mistake, but that's what the Democrats are saying they will do. So, the easiest way is to go back to what we've done for 214 years, since the birth of this nation, really. Every president, Democrat and Republican, sent a nominee, federal bench to the Senate of the United States, at the point that it was reported out, voted out by the judiciary committee, would be an up-or-down vote, not a filibuster, an up-or-down vote, if that person clearly had a majority of the Senators in favor.

WOODRUFF: I just spoke with the Senate Democratic Leader, Minority Leader Harry Reid, a few minutes ago, and he said he is willing to compromise. I asked him about a proposal in the "Washington Post" by columnist David Broder yesterday, who said the Democrats need to step back first, but clearly there would need to be compromise on both sides. Do you think something would work that would involve both sides pulling back?

DOLE: You know, I think that, clearly, our Majority Leader Bill Frist has been reaching out to Senator Reid for many, many months. This has been going on for a long time, that Bill Frist has been trying to get a compromise, to sit down and talk about this, and indeed, you know -- when you look back -- I just brought a few quotes here as to what some of the Democrats have said in the past. Here's Patrick Leahy, June 18th, 1998 Congressional record: "If we don't like somebody the president nominates, vote him or her down, but don't hold them this anonymous, unconscionable limbo."

You know, you can go through -- Ted Kennedy, many others -- they were -- they're -- opposing what they were for. So, let's just see. This is a matter of the two leaders sitting down and talking. I have no idea if Senator Reid suddenly has had a change of heart here, that he's willing to compromise some way, but that certainly has not been the case, Judy, for many, many months.

WOODRUFF: Do you think Senator Frist made a mistake by speaking before a religious conference about this?

DOLE: No, I don't. In fact, constantly, meetings are occurring, and this was -- he was not talking about faith, he was talking about fairness. He was talking about the fact that, as I've mentioned, for 214 years, the Senate has given an up-or-down vote. He was talking about the fact that we need to give our advice and consent, which we're prohibited from doing right now. And that was a straightforward message.

Indeed, you know, if you want to talk about going into religious meetings, think about John Kerry in the pulpit with his anti-Bush rhetoric. Think about all the meetings the Democrats have had in churches through the years, Jesse Jackson. So, if anything, I would say the tagline on the title of that meeting, perhaps, was not the best, but certainly, Bill Frist carried a straightforward message, and there was nothing wrong with the video being presented.

WOODRUFF: Let me get one question in on Social Security. You've been steadfast in your support of the president's plan, or proposal, to have private accounts, private investment accounts. But, your Republican colleague Chuck Grassley is saying, he's open to putting them aside, looking for other formulas. Other Republicans have said this. Stephen Moore of the Free Enterprise Fund says, "for those who thought the political stars were finely aligned to get something done, it's proving to be a fallacy." Is Social Security reform slipping away from the president do you think?

DOLE: I think that there's still plenty of time to see this work out. The president is completing his 60-day initiative. He feels fervently about this. I admire him for taking on a tough issue, and frankly, I wish the other side would come up with some ideas. It seems that, you know, it's just a matter of criticizing the president, or criticizing what we're trying to do. But, you know, in my campaign for the Senate, I talked a lot about the personal savings account, and what it does is enable a young person -- well, first of all, let's say a senior citizen who's collecting Social Security or a person near retirement, it doesn't take one penny away from them. But if they have a grandson or granddaughter who wants to voluntarily put a portion of that payroll tax into a diversified account, very conservative accounts, it will grow far more over the lifetime, the work lifetime, of that young person than what that same amount would provide in Social Security. And they own it.

WOODRUFF: We hear you. Senator Dole, making the case for private accounts and also for Senator Bill Frist's argument on the nuclear option. Thank you very much, Senator, it's very good to see you.

DOLE: Yes, indeed, my pleasure to be with you.

WOODRUFF: We appreciate it.

Now, I'm told that we have live pictures coming into us from Crawford, Texas, right now. The president's -- or rather secretary of state Condoleezza Rice will be talking to reporters about President Bush's meeting just moments ago, earlier today, with Crown Prince Abdullah of Saudi Arabia. Let's listen in. This is Steven Hadley, who's the president's national security adviser.

(PRESS CONFERENCE)

STEPHEN HADLEY, NATIONAL SECURITY ADVISER: ...two days between representatives of the United States and representatives of the kingdom of Saudi Arabia.

It began yesterday with the vice president having lunch and then meetings with the crown prince and his delegation.

This morning, Dr. Rice had an opportunity to come in from the airport to the ranch with the crown prince and his delegation. That was also an opportunity for some consultations.

And then of course the president met the crown prince delegation, a meeting -- an opportunity -- for the crown prince and the president to, just with a translator present, go around the property on the ranch and then a rather extensive lunch, which permitted some good, candid and informal conversation.

So it was really a series of meetings and very intensive and extensive consultations between the two sides.

The atmosphere was very positive. The range of issues covered was fairly extensive. For example, they talked about Iraq, they talked about the Middle East and the opportunity for moving towards a two-state solution to the Middle East.

There was discussion about other issues of importance for the region, developments in the region, developments within Saudi Arabia. There was also discussion about the oil situation. And the Saudi side outlined plans that they have developed to increase their investment so as to expand capacity to produce oil.

They're talking about a plan that would allow them to go to about 12.5 million barrels a day by the end of the decade, and plans in the next decade to increase that over time to about 15 million barrels a day, in order to help stabilize the market and ensure an adequate supply at a reasonable price.

We also had an opportunity to talk about the war on terror. This is an area where the United States and Saudi Arabia have worked very closely together and where the two leaders share a common strategy of dealing with extremism that obviously involves fighting the terrorists in the near term, and the Saudis have made some real good progress in that respect, and also advancing the cause of reform over the longer term.

It was a very good set of consultations, a very good spirit in the room. The relationship between the two men is very positive, very strong personal relationship which they were able to reaffirm. And also I think the consultations between the two delegations strengthened the relations between the two government down the line.

And in order to further that process, the two leaders agreed that a joint committee would be established, to be chaired by the secretary of state and the Saudi foreign minister, to deal with a range of strategic issues that are of vital importance to the two sides. So we will have a framework for some ongoing consultations in addition to the normal diplomacy.

So a very good, very productive visit. We feel very good about it. There's a joint statement which was released that you can all take a look at. And the secretary of state and I would be pleased to answer any questions you have.

QUESTION: (INAUDIBLE)

HADLEY: Well, two things. One, the Saudis really came with a plan, which was briefed in some detail to the vice president yesterday. So they came with a plan of what they intended to do. Went through it in some detail. Their oil minister was here.

And it, again, seemed a very good plan, because it addresses the underlying issue you have when you talk about price, which is an issue of availability of oil and availability of capacity. And the importance, of course, expanding the capacity and the production capacity is that it makes the oil available and stabilize the market at a price level which both the United States and Saudi Arabia agree needs to be one that provides adequate for investment but is also something which isn't so high that it damages markets and damage the world economy.

So I think there is a framework in place by which the two countries are trying to deal with the issue of a price stability.

QUESTION: Do you believe that the prime will lower oil prices anytime in the near term?

HADLEY: It's hard to say. Obviously though, you know, when you increase the capacity of a significant amount, which they are talking about, that can't help but have a positive downward effect on prices and deal with some of the volatility in the market by assuring people that supply will be available as the economies grow.

QUESTION: One of the points that the Saudis gave an hour or so ago was that even though they could increase production somewhat now, that the infrastructure for shipping, particularly refineries, is at capacity. That's another problem. And Adel Jubeir said specifically, it doesn't matter if we send another 1 million or 2 million barrels a day, if over here you can't refine it. How do you address that?

HADLEY: They did talk about refinery capacity. And there was a preliminary discussion about that. And a good exchange of views on it. The Saudis have some questions about refinery capability on our side and what they can do on their side with respect to refinery capacity. I think there's more discussion that needs to be done on that issue. But it was addressed. More attention needs to be paid to it.

What really came was a plan for increasing production through substantial investment, to the tune of about $50 billion over time. So it's a major initiative that they've undertaken.

QUESTION: Do you think Saudis have discussed the possibility of their investing in refining capacity in the United States or around the United States? That seems to have slipped as a priority for them? Did they indicate that that was going to be reactivated as a priority for them?

HADLEY: In the discussions I was in, that specific issue did not come up. There were additional conversations, of course, yesterday, in which the oil minister participated.

I think this is one of a range of issues that we'll have an opportunity to follow up on with the Saudi side, now that they've begun to pull together the kind of plan that they talked about.

QUESTION: (INAUDIBLE)

HADLEY: I would say the outlook for the two countries having a common approach to dealing with the problem of assuring adequate capacity and stability to the market certainly has been advanced by the Saudi coming forward with a very ambitious plan for investment and expanding capacity. That's a good thing, and I think speaks to some of the concerns that we've had on the U.S. side.

QUESTION: Secretary Rice, of course, you recall five years ago when the president was running first for office. He talked a lot about jawboning OPEC members to lower the prices. Why didn't the president do that here today? And what do you say, then, to Americans who say, "I'm paying too much at the pump and the president's not doing enough?" CONDOLEEZZA RICE, SECRETARY OF STATE: I think the president has recognized in a series of steps he's taken over the last few years that we have not a short-term problem, but a long-term problem that needs to be addressed.

That's why the president has a comprehensive energy bill that has been in the Congress to look at alternative fuel sources, to look at technology, to look at what we can do about development and production here in the United States. It's why he wanted to have a discussion with the Saudis that would have a sustainable, long-term plan for dealing with what is clearly an increasing demand for oil in a world economy that is growing.

Obviously, with the states like China, India and others coming on line, there is a concern about demand and supply. And those issues have to be addressed, not by jawboning, but by having a strategic plan for dealing with the problem. That's why the president has an energy plan in the United States. That's why there was so much weight put on having a common strategic framework with the Saudis about how to increase capacity over the long run, not just in the short run.

QUESTION: Mr. Al-Jubeir outside told us that Saudi Arabia has a current spare production capacity of between 1.3 million and 1.4 million barrels per day that they could quickly bring on line. Did the president ask them specifically to tap into any of that production capacity and boost output?

HADLEY: I don't know what specifically Adel al-Jubeir was talking about. And the discussions with the president, as I say, focused on the long-term plans that the Saudis have.

Obviously, if they have that kind of capacity, they can bring it on to the market. The issue is, of course, the issue of price and whether they are willing to sell it at the price that the market is willing to pay.

But obviously it is useful. The problem in the oil market now is a perception that there is inadequate capacity. And that's the point: The more we can increase the capacity in the short run, in the longer term, the more reassurance you can give to the market that there will be available supply. And that'll have a downward pressure on the price.

QUESTION: Did the president say he would like the Saudis to increase their production above levels where they're currently at this year?

HADLEY: He's talked about that. If you looked at his public comments last week, he said exactly something very much like that. And what he got from the Saudis was a response. And it was the response I described.

QUESTION: Can you talk about where the Saudi (INAUDIBLE) Middle East fits in with the president's vision -- if it fits the president's vision?

And also, did the president raise the issue of three Saudi (OFF- MIKE) more than a year now (INAUDIBLE)?

HADLEY: On the Middle East, they talked about the opportunity that is presented by the steps that Abu Mazen is taking in terms of to reform the security. The focus that all of us now are trying to bring to the disengagement from Gaza and the settlements in the northern West Bank and the opportunity that presents to move the process forward, that's really the focus.

The crown prince's plan, which was adopted of course by the Arab League, is a broader framework for dealing over time with an opportunity to get peace between Israelis and Palestinians and Israelis between Arabs.

One of the things they focused on was the ability of a successful disengagement to hasten the day when we can proceed to those broader issues.

So the focus has been very much what we can all do -- the United States, the Saudis and others -- to assist the Palestinians to be able to develop the institutions of a democratic state that is prepared to take responsibility for the territory that they are going to have an ability to take control of when the Israelis move out.

On the other question, there was a general discussion about the issue of reform in these various conversations over the last two days. I'm not going to get into the specifics of it. But a range of issues were raised, and the framework for some of these particular cases was discussed.

QUESTION: I'm wondering, in the short or near term, when can the public expect to see something tangible as a result of the meeting today?

HADLEY: Something tangible? In terms of -- well, you know, we'll see.

As you know, the markets are a complicated business. But clearly, the news that came out of the meeting today ought to be good news for the markets. And we would hope that and other factors would result in some positive news in terms of the price fronts.

But, as you know, these markets are complicated business.

QUESTION: We heard that the secretary left a meeting to call Massoud Barzani in Iraq. We need to know if that's true. And what did you agree regarding Iraq?

RICE: No, I did not leave the meeting to make a phone call.

WOODRUFF: We're interrupting this news conference from Texas to take you to Warrenton, Georgia, where the Associated Press reporting two toddlers who were missing have been found dead.

JOHN BANKHEAD, GBI SPOKESMAN: ...yards from the house, to the left, in that direction. The bodies were positively I.D.'d by the father using a photograph. They have taken to the Augusta GDI crime lab, where an autopsy will be performed in the morning. Right now, it's turned into a death investigation. It's changed from a missing person's case to a death investigation. We're continuing to assist the Warrenton Police Department, the Warren County Sheriff's Office in that effort. They have a number of agents assigned to the case. They will continue to conduct the interviews to see where this may lead us.

Right now there's not much more I can say to that. I'll try to answer a few questions, but right now the time is limited. The chief is available, as well.

QUESTION: Does this appear to be a situation where they wandered off or is there a third-party, foul-play, involved?

BANKHEAD: We're looking at all of that. We have surveyed the entire area to see if there might be any evidence to indicate that there -- they maybe slipped in or accidentally fallen in. All that is part of what we're going to look at.

QUESTION: Any outward sign of trauma or anything to indicate foul play?

BANKHEAD: Not at this point, no, but there will be a thorough examination tomorrow by the GBI medical examiner in Augusta.

QUESTION: John, is there any evidence of sexual predators in the neighborhood on the database?

BANKHEAD: The only one that's close by is -- they already checked him out, and he's on I.V.s., and there are, I think, 13 in the county. That's one of the first things they checked, and they ruled that out very quickly.

QUESTION: John, can you describe the area where they found (INAUDIBLE).

BANKHEAD: It's about an acre and a half sanitation pond where sewage is pumped from the city into it. There's a green algae, a bacteria, that covers the pond on purpose (ph), and apparently, when they first went by there, Saturday or Sunday, it was very difficult for them to see it. It might have been down below that. And, when they went by again, the second time today, a law enforcement did see kind after bump in that algae and took a closer look and saw that it was the body of the -- I believe it was the young girl. Then a further examination, a few feet from that, they discovered the body of the boy.

QUESTION: Were there any tracks or anything like that...

BANKHEAD: They were looking at all that, and they continue to look -- they're there now. They've got divers on the scene trying to see if they might be -- recover something that might be useful in the investigation.

QUESTION: Has anyone been charged?

BANKHEAD: No, no.

QUESTION: Is there a clear pass from this area over to the pond?

BANKHEAD: There's a road that goes back behind the house. You continue on this road, circles around and goes back down and winds up right at that pond.

QUESTION: Is there a fence or any kind of protective situation around the pond?

BANKHEAD: Yes, there is.

QUESTION: John, to what extent is your agency investigating how long the children were missing compared to what the mother's story is?

BANKHEAD: Well, all that's going to be taken into consideration once the medical examiner makes a determination, if he can make a determination on that.

QUESTION: Have you got any initial findings in that regard?

BANKHEAD: Not in that regard. It's very early for that type of information -- for us to have information from the medical examiner.

QUESTION: John, why do you think it take so long (INAUDIBLE)?

BANKHEAD: As I explained earlier, because of that green covering, the bacteria or algae that covers that type of pond, it was very difficult to see these kids. As a matter of fact, when they first looked at it, they didn't know they were bodies. Understand these kids are two and three years old. The second time -- the first time they missed them completely, and I can understand why, and -- because it was just kind of a bump in that green bacteria or algae on the surface of that sanitation pond.

QUESTION: Any preliminary indication how long they had been dead at the time they were found?

BANKHEAD: No, no, that's way too early. The medical examiner will look at that, but I don't know if that can even be determined.

QUESTION: They put cameras down in four or five ponds in the area. Was that one of the ponds they put cameras down in?

BANKHEAD: No.

QUESTION: Why didn't they?

BANKHEAD: No. Law enforcement had -- I'm not aware of it. Were they using the cameras early?

UNIDENTIFIED MALE: Yes, they used the cameras (INAUDIBLE).

BANKHEAD: I'm not aware of that.

QUESTION: So, when was the first initial search of this pond that they -- when they did not find the bodies?

BANKHEAD: Saturday.

UNIDENTIFIED MALE: Saturday.

QUESTION: Saturday was the (INAUDIBLE). Then today was the second?

(CROSSTALK)

BANKHEAD: The agents have already looked at that area, and there are certain spots where kids could get under or through. But they are looking at that again to see if there might be some evidence there that might be helpful.

QUESTION: Have the kids ever wandered off before?

BANKHEAD: That I'd have to defer to the chief.

UNIDENTIFIED MALE: Yes, the kids had wandered off before. But, before they got too far from the house they were recovered.

QUESTION: When did that happen?

UNIDENTIFIED MALE: It happened Saturday, believe it or not, at 4:00, but they were recovered before they left again.

QUESTION: Were police called?

QUESTION: Is there any reason that the mom didn't lock the door after the first time that they wandered off?

UNIDENTIFIED MALE: As I understand it, the door was locked in the beginning because that was her habit to do that. However, the little girl was smart enough to open the door, to unlock it, when no one was around. What was your question?

QUESTION: On Saturday, were they recovered by your department, or just...

UNIDENTIFIED MALE: No, a neighbor. A neighbor saw them outside and let her know.

QUESTION: We heard a report the grandparents actually had the children and they got taken away and given to the grandparents (INAUDIBLE)?

SHERIFF: I have no knowledge of that.

BANKHEAD: One more question? OK. Thank you very much, appreciate it.

QUESTION: How are the parents holding up? The mom and dad, obviously, after hearing this hearing this terrible news?

UNIDENTIFIED MALE: They are broken up. QUESTION: Are we going to hear from Jay Jones (ph), the family spokesperson?

BANKHEAD: (INAUDIBLE)

QUESTION: So possibly?

BANKHEAD: Possibly.

QUESTION: Thank you, John.

WOODRUFF: A really tragic story from East Georgia. Warrenton, Georgia, between Atlanta and Augusta, this is a small town where two toddlers disappeared from their home on Saturday. 2-year-old Nicole Payne, 3-year-old Jonah Payne, apparently left their home, at least this is what the mother said. She couldn't find them. A search had been underway since Saturday and just now authorities reporting that the bodies were found at a sanitation pond, what the Georgia Bureau of Investigation officials seem to describe as a sanitation pond, not too far from the home.

CNN's Tony Harris is with us on the telephone. Tony, how much do we know about exactly what happened?

TONY HARRIS, CNN CORRESPONDENT: Well, Judy, I can tell you that the signs have been growing increasingly ominous throughout the afternoon. If you could just look into the faces of the police officers who briefed us this morning, gave us an update on the investigation, you could tell by just their expression and their tone and affect that this was not going well for them.

As you mentioned, this is a search that began shortly after 6:15, 6:20 in the evening on Saturday for these kids. And the mom, Lottie Kain, told police to tell them that her children were gone, they had disappeared. The story she tells police -- I'll just add a little bit more to what have you been telling folks -- is that Lottie tells police that she went to the bathroom and was in the bathroom for about two to three minutes, actually three to five minutes. When she came out of the bathroom, she noticed that the front door was open and that the kids were gone. She went out into the front yard and she noticed that the gate were open and that the kids had disappeared.

There was a pretty extensive search after she called police. They were able to throw a helicopter up into the air with infrared capabilities. And they organized a search with law enforcement and volunteers from the community and they came up with nothing. The search was called off at some point yesterday because it was going nowhere, and then this morning, the search began anew.

About 12:15, as you mentioned, police discovered the young girl's body. Her name is Nicole and they found her body in what's described as a sanitation pond a short distance, not -- a very short distance from the home itself. There was actually a road that leads to the pond and there's fencing around that sanitation pond. It's described as being covered with all kinds of algae. It pumps sanitation from the city of Warrenton, and that's where the bodies were found. They found young Nicole, 2-year-old Nicole, first and then a further search of the pond and they discovered Jonah. They also investigated a number of sex offenders in the area. There are 13 known sex offenders in Warren County. They checked them out and there was nothing to go on. That did not further the investigation. It has moved on now from obviously a rescue/recovery effort now to a death investigation. And that's where we are right now -- Judy.

WOODRUFF: Tony Harris, joining us by telephone. Such a terrible story. Looking at the pictures of those two children, 2-year-old Nicole and 3-year-old Jonah Payne. Authorities now confirming that their bodies were found very close to the home they disappeared from over the weekend. We're going to take a break. We'll be right back.

(COMMERCIAL BREAK)

WOODRUFF: A few minutes ago we were listening to the president's national security adviser and the secretary of state discuss President Bush's meeting today with Saudi Arabia Crown Prince Abdullah. Among other things, they were discussing the high price of oil. Well, meantime there is new evidence that high gasoline prices are helping to dampen American's economic optimism, in addition to taking a toll on their pocketbooks and on the president's poll numbers.

Here now our senior political analyst Bill Schneider.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The hottest stories in Washington? Tom DeLay, John Bolton, Bill Frist, filibusters. But out there in America, something else is going on. At the beginning of the year, 42 percent of Americans said economic conditions in the country were getting worse. Now 61 percent feel that way.

What's driving it? Two things. One is the stock market, down. As of the close of business Friday, the Dow Jones Industrial index was down more than 500 points since the beginning of the year. The other is gasoline prices, up nearly 50 cents a gallon since January.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I wish I could simply wave a magic wand and lower gas prices tomorrow. I'd do that.

SCHNEIDER: Somebody had better do something, because there are signs that people are feeling a bad economy, not just observing it. The American Research Group asks Americans to assess their own household's financial situation. In January, 27 percent of Americans said their household's financial situation was getting worse. The number of pessimistic Americans has nearly doubled. This month, half of Americans say their household's financial situation is deteriorating.

It's not my fault, President Bush argues.

BUSH: We've had a recession, we've had corporate scandals, we had a terrorist attack on September the 11th, 2001, we've had the demands of war and all these have tested our nation's economy.

SCHNEIDER: There's evidence it's beginning to take a toll on the president's job ratings. Let's see where other presidents have been three months into their second terms in the Gallup poll. Eisenhower and LBJ were getting 64 percent job approval ratings. Reagan and Clinton, in the low 50s. Truman and Nixon were below 50. In Nixon's case, the Watergate break -in had just become a scandal.

President Bush's current job approval rating in the Gallup? 48 percent. Not a good sign, which may be why House Democratic leader Nancy Pelosi answered a question about the House Ethics process this way.

REP. NANCY PELOSI (D), MINORITY LEADER: ... a gallon of gas at the pump, a terrible move in terms of housing starts and here we are taking up our time in this meeting on this.

SCHNEIDER: Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Our apologies for bumping around a little bit with the stories we're covering this afternoon. We have had some breaking news, among other things. We were tuning a few minutes ago to that news conference in Crawford, Texas. The president's national security adviser, Stephen Hadley; the Secretary of State, Condoleezza Rice. They were talking about the president's meeting with Saudi officials, but among other things, Secretary of State Rice was asked about the situation that John Bolton, who the president has nominated to be the U.S. ambassador to the United Nations, finds himself in.

Here's what Secretary Rice had to say just minutes ago.

(BEGIN VIDEO CLIP)

RICE: But I would really hope now that people will move forward on John Bolton's nomination. He is someone who has served with distinction over almost two decades as a public servant. He is someone in whom I have confidence, in whom the president has confidence, and we really do need to get this done so that can get about the really important work of being a part of what is a very important chapter being written in the United Nations' history.

WOODRUFF: Secretary of State Condoleezza Rice speaking up for John Bolton, his nomination. The vote was put on hold late last week for three weeks. We're going to take a break. More "INSIDE POLITICS" after this.

(COMMERCIAL BREAK)

WOODRUFF: The debate over judicial filibusters and other stories continue to attract attention in the blogosphere. We check in now with CNN Political Producer Abbi Tatton and Jackie Schechner. She's our blog reporter. Hi, Jackie.

JACKIE SCHECHNER, CNN BLOG REPORTER: Hi, Judy. Yesterday was justice Sunday, and Senate Majority Leader Bill Frist made a taped appearance in a telecast that the Family Research Council said reached 61 million households. But not everybody watched at home. And Sean, at theliquidlist.com, one who watched at church under the heading Politics, Justice Sunday -- Beware people who take notes.

Sean said he went to a fundamentalist Christian church in upstate New York. And what he found most striking about his experience was "the attentiveness, no, the enrapturedness" of the audience members who filled the chairs around him, going on to say that the Democrats are "definitely not as organized as the Christian right. This is a tsunami," he says. "And most of us are sitting on the beach sipping our Coronas."

Now, most of the blogs this morning are coming down against this Justice Sunday and Senator Frist, but we did find one at least that was in favor of Frist at conservativeposts.us. A pastor over there. It's going to take a minute to bring it up, but I want to read this to you. His name is J. Grant Swank (ph), and he says, "Frist had the perfect right to do exactly what he did. In fact, it's the moral thing to do. It's putting Christian ethics to the test. Why, it's just plain gospel good."

ABBI TATTON, CNN POLITICAL PRODUCER: Now, this debate on judicial nominations brings us to the topic of the nuclear option. Or is it the constitutional option? Well, it seems it depends on who you listen to and when. Yesterday, Senator Frist said that it was his opponents using this term nuclear option. Not so, say the liberal bloggers. Over at Escaton (ph), this is a powerhouse liberal blog, atrios.blogspot.com, find a couple of instances of the senator himself using this term nuclear option. So why the change?

Over at Talking Points Memo, this is Joshua Micah Marshall (ph), another liberal blob. What he says on this term, nuclear option, "I seem to remember Republicans and Democrats using this phrase all the time. Needless to say, what's happened now is that the Republicans are getting bad results in the polls, so they've come up with a new smiley face vocabulary." Josh Marshall (ph) saying that he doesn't care what the Republicans call this. "If they want to call it a judicial act of love, they can do that. But one side in a debate shouldn't be about to order the refs in the game to rewrite the lexicon just because people don't like what's happening." So that's what the liberal blog is saying on that change of vocabulary there.

SCHECHNER: Somebody else taking a hit once again today is Representative Tom DeLay. No surprise that the blogs are checking in on what he's up to. A "Washington Post" article that came out yesterday once again linking Rep. Tom DeLay to Washington lobbyist Jack Abramoff. The joke making the rounds on the blog -- on lots of them, but for this big one here, we go to that'sanotherfinemess.com. "Round trip air fare to London and Scotland for Tom DeLay, a few thousand dollars. Finding out that the airfare was charged to Jack Abramoff's credit card, priceless."

We wanted to show you also that -- you've seen this before. We've shown you dropthehammer.org from Think Progress, and it's a chart showing you Tom DeLay's alleged ethic violations. GOP Bloggers is fighting back. It's gopbloggers.org. A chart of their own called The Web of Hypocrisy. They say it's just a small snapshot of the Democrats' hypocrisy, and it's got a very similar chart, this one with the trip-takers, the PAC money-accepters and the family-hirers on the Democrat side.

TATTON: There's another story out there today. One name that crops up frequently in the blogs is Jeff Gannon. James Guckert, his other name, now a discredited White House reporter. Some new information coming out today -- Secret Service releasing logs on his access to the White House. Lots of liberal bloggers picking up on that one. You can go to AmericaBlog. John Aravosis (ph) in Washington, who's reported a lot on this story, delving deeper, saying that "him going there 200 times sounds as fishy as hell on a day pass. If that isn't regular access, what is?" Not letting that story die, Judy.

WOODRUFF: All right, so it's all over the map today. Okay, Abbi, Jackie, thank you both. And we'll see you tomorrow.

As we reported earlier, President Bush talking today to Crown Prince Abdullah of Saudi Arabia urging the Saudis to cut down oil prices. Let's find if that and other developments had any effect on the market. We'll have that when we come back.

(COMMERCIAL BREAK.)

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: I'm Christine Romans in New York, and this is "The Dobbs Report." Stocks closed broadly higher on Wall Street. The Dow Industrials gained 84 points, and the Nasdaq is 1 percent higher at the close.

Oil prices fell 82 cents, dropping back below $55 a barrel.

Investors in Adelphia Communications lost billions of dollars due to fraud. But now a settlement between the government, the company's founder John Rigas, and his family will provide those investors with some restitution.

(BEGIN AUDIO CLIP)

ATTORNEY GENERAL ALBERTO GONZALES: Today, the Justice Department has taken additional action, working with its other departments and agencies in the federal government, to ensure that the defendants are forced to help compensate the victims for their loss.

First, the Justice Department has reached an agreement with John Rigas that obligates all members of the Rigas family to forfeit to the United States in excess of 95 percent of all the family's asset.

(END AUDIO CLIP)

ROMANS: That 95 percent is worth nearly $715 billion. Adelphia, the nation's fifth largest cable company, has been operating in bankruptcy for nearly three years.

Another major deal in the oil industry, the second in two weeks. Valero Energy has agreed to buy Primcorp in a deal worth nearly $9 billion. The new company would be the largest oil refinery in North America, bigger than ExxonMobil.

General Motors has been struggling with huge losses, weak sales, and now, a major recall. GM today announced six separate recalls for more than 2 million vehicles. The biggest of them involves 1 1/2 million SUVs because of seatbelt defects. The recall affects Chevy Suburbans and Silverados as well as GMC Yukons and Hummer H2s from model years 2003 to 2005. Another recall addresses SUVs with possible fuel pump overheating problems.

END

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