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JUDY WOODRUFF'S INSIDE POLITICS

Bush's Twin Headaches; San Diego Mayoral Race Begins

Aired April 26, 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: Together in Texas. Did President Bush show support for Tom DeLay or keep his distance from a fellow Republican under fire?

The Social Security challenge.

SEN. CHARLES GRASSLEY (R), FINANCE CHAIRMAN: If there is going to be a bipartisan consensus for reform, the process has to be done in this committee.

ANNOUNCER: But with senators split and public support slipping, does the president's plan look even iffier?

A surfer girl turned politician catches a second wave in San Diego, after the mayor she came close to defeating calls it quits.

Bill Clinton goes into campaign mode. Not for her, but for him.

BILL CLINTON, FMR. PRESIDENT OF THE UNITED STATES: I am very proud that my friends Tony Blair and Gordon Brown are leading the way.

ANNOUNCER: Why is America's 42nd president moonlighting in British politics?

Now, live from the CNN Center in Atlanta, Judy Woodruff's INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Thank you for joining us out of Atlanta today. We begin with President Bush dealing with two political headaches at once: his uphill fight to overhaul Social Security and the fact the House majority leader is in hot water.

Mr. Bush is giving Tom DeLay a lift back to Washington aboard Air Force One after they both attended a Social Security event in Galveston, Texas. That arrangement has prompted a lot of reading between the lines and reading of body language.

Our White House correspondent Suzanne Malveaux joins us live from Galveston. Hi, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hello, Judy.

Of course, it really was the moment and even picture, perhaps, that House Majority leader Tom DeLay was looking for. Just moments ago, President Bush and Tom DeLay -- no, they weren't holding hands, but they were walking side by side. They got off Marine One together and they boarded Air Force One together, of course, to have some conversations.

This trip obviously in hopes of boosting Tom DeLay's image, as well as his credibility. It was earlier today he was invited to a Social Security reform event. He represents the district that neighbors Galveston, Texas. Even before the event began, he was sitting about five rows back from the podium. A woman in the back shouted, "We love you, Tom!" and then applause erupted. He stood up to acknowledge their support.

The White House says that despite all this support that they did not specifically invite him to try to resuscitate his image or standing. They say it's typical, of course, as it is to invite members of Congress to events when the president travels, but it is also very clear for us that they got the desired result from this trip.

President Bush, in his opening remarks, acknowledged DeLay's role as a critical member, of course, of the Republican party, one who is nicknamed the Hammer, one they are counting on to push forward his domestic agenda.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I appreciate the leadership of Congressman Tom DeLay in working on important issues that matter to the country.

(END VIDEO CLIP)

MALVEAUX: And Judy, of course, one of those critical issues for the president, reforming Social Security, not good news for him. However, it has been a very tough sell for him. The latest ABC Washington poll showing today that on Bush's private accounts, establishing those private accounts for Social Security, 45 percent support him, 51 percent oppose them. And then when it comes to the overall job that the president is doing regarding Social Security, 31 percent say they approve the job he is doing and 64 percent say they disapprove.

Now, Judy, as you know, of course, they started off saying 60 days, 60 stops. We're going to do this campaign-style effort to get the message out. Well, the deadline's right around the corner. It is this Sunday. White House officials say, however, he is not going to stop traveling across the country to states, to counties, to push forward his program. They say phase one, of course, to talk about problems; phase two, to talk about the solutions. But Judy, there are a lot of critics, of course, who say the reason he is moving forward is because, despite the sales pitch, there are many Americans who have just not bought this plan -- Judy.

WOODRUFF: It is certainly sounding like it's been a tough sell, because we know the president has been out there on the road it seems like every other day. All right, Suzanne, thank you very much.

Well, we're going to have more on Tom DeLay's political troubles, the fall-out on the Hill and how he got where he is a today, ahead on INSIDE POLITICS.

While the president was on the road, senators began facing the nitty-gritty of Social Security reform. It was clear to them and everyone else just how difficult it will be to bridge their differences over the Bush plan.

(BEGIN VIDEOTAPE)

SEN. DICK DURBIN (D), ILLINOIS: Do you want to turn your retirement security over to Wall Street?

CROWD: No!

WOODRUFF (voice-over): Outside, dissent dominated, but inside, decorum prevailed.

GRASSLEY: If there is going to be a bipartisan consensus for reform, the process has to begin in this committee.

WOODRUFF: As the Senate Finance Committee, guided by the steady hand of Iowa senator Chuck Grassley, began to tackle an overhaul of Social Security, the tone was collegial.

UNIDENTIFIED MALE: The cooperation is so great it's turned into personal friendship.

WOODRUFF: The matter pressing.

GRASSLEY: The longer Social Security's future -- that future remains in doubt, the more people will worry about their own future prospects.

WOODRUFF: Senators agree on the problem. Eventually, Social Security won't be able to maintain solvency. In other words, the amount of money coming into the system won't be enough to pay out benefits that have been promised.

UNIDENTIFIED MALE: My grandchildren are going to be stuck with the bill. They either going to have their benefits cut or they're going to pay a whole lot more. Now, that is wrong.

WOODRUFF: Consensus on a solution, however, is a long way off. Members of Congress are sharply divided over President Bush's proposal for individual retirement accounts, allowing workers to invest some of their Social Security taxes in stocks and bonds. Democrats say they would just dig the hole deeper.

UNIDENTIFIED MALE: Where does the money come from to put into these private accounts? Where does that money come from? Well, the federal government would have to borrow it.

WOODRUFF: Senate Republicans, meanwhile, divided themselves, are handling the accounts like a hot potato. Polls showed the president's plan not a big hit and GOP senators, including Chairman Grassley, have indicated it is not a top priority.

(END VIDEOTAPE)

WOODRUFF: In just a moment, I'll talk with Senate Finance Committee Chairman Charles Grassley. But first, we are joined by the committee's ranking Democrat, Senator Max Baucus of Montana. We just heard you in that report. Thank you for being with us.

Senator, you know, we've heard from Chairman Grassley today, saying all you Democrats and others who are out there bad-mouthing the president's proposal, why not come up with your own plan? Why haven't you come up with your own plan?

SEN. MAX BAUCUS (D), MONTANA: Well, we all know that Social Security faces long-term financial problems. That's clear. Nobody disagrees with that. But I also think it makes sense to first do no harm. That is, we're attempting to solve the long-term challenges of Social Security, and they are long-term.

The Congressional Budget Office, an agency whose numbers we must, by law in the Congress, go by, say that the trust fund will remain solvent at least through 2052. But we should not make the problem worse by adopting something called privatization or private accounts, which the president himself admits does not address the long-term challenges facing Social Security.

WOODRUFF: But Senator, if it's not private accounts, then what is the right way to go?

BAUCUS: The right way is to take the private accounts off the negotiations table. Private accounts is a car bell. It takes money away from Social Security. Our goal is to enhance the retirement income of seniors, and that means strengthen Social Security, address the long-term financial problems and also, I think, additional add-ons or additional personal savings programs that enhance retirement income. That's what we should be doing.

WOODRUFF: Do Democrats bear some of the responsibility here, though, Senator? Because it is the case that Democrats are doing a lot of complaining, but they haven't put forward one plan that they can agree on.

BAUCUS: Well, the fact is, I think it would be irresponsible to start to negotiate on something which is such a bad idea, that is, the private accounts which comes out of Social Security. That plan is based not on economics. It's based on ideology. It's based on ideology that is, frankly, some right-wing think tanks have been proposing for 20 years. That's what that's based on. And I do not -- I think we, as members of the Senate, would be doing the country a disservice by even talking about that because it undermines Social Security. That's not what we should be doing.

WOODRUFF: Well, I'm asking you about an alternative. And there is one alternative that's put out there by Peter Orzack (ph). He's with the Brookings Institution, a think tank in Washington. He's suggesting reforming the estate tax, he says, in a way that would dedicate some of that revenue to Social Security. Does that make sense?

BAUCUS: Right. Well, he did mention that at the hearing today, but I think that just underscores that there are a lot of different ways to deal with the long-term financial problems facing Social Security. I have got a lot of ideas that have not been discussed. I'm sure every Senator does. There are a lot of different ways to do this. However, it has to be done in the context of good faith, working together, nonpartisanship effort. That will only happen, frankly, when the president takes this privatization problem away.

Now, don't forgot, the president -- I must be honest about this. His good faith is a little bit suspect, because if he really wanted to solve Social Security, he would have come to members of Congress privately and said, we've got a problem. Let's see if we can work this out. No, he just went public with his plan first right, off the top. And second, his plan includes this privatization, which almost all reasonable -- bill that wrote (ph) -- the economists understand does not solve the problem, makes it worse. So, that makes things suspect. We have to work together.

WOODRUFF: Senator -- 15 seconds -- are you hearing any movement in the dispute over the president's judicial nominees?

BAUCUS: I am, and I hope we can reach a resolution.

WOODRUFF: Can you share any quick detail?

BAUCUS: Not at this point, not at this moment, but I'm quite hopeful we'll get a resolution. I think Senator Reid's going to announce a proposal later today.

WOODRUFF: OK, well we will certainly want to follow that. That's a story, of course, we've been keeping an eye and an ear on.

I'm told right now, Senator Harry Reid whose the Democratic leader, the minority leader, is on the Senate floor, speaking. Perhaps we'll be able to listen in and report to our audience.

But, for right now, Senator Baucus, thank you very much.

BAUCUS: You're very welcome. Thank you.

WOODRUFF: We appreciate it.

This is Senator Reid on the floor of the Senate. As we've heard, even the Republican chairman of the Senate Finance Committee is suggesting personal retirement accounts are not a top priority. Up next, I'll ask Senator Charles Grassley if he can reach a consensus on how to keep Social Security solvent.

Also ahead, a colorful candidate in San Diego, who's getting a second shot at running the city, now that her former opponent appears to be washed up. And later, how the heat on Tom DeLay is reflecting on other members of the House.

(COMMERCIAL BREAK)

WOODRUFF: While we're waiting to talk to Senator Chuck Grassley, chairman of the Senate Finance Committee, we want to quickly take you to Phoenix, Arizona, where a surrogate mother has given birth to quintuplets, all of the babies born today, all of them healthy. Let's listen in.

(SINGING): Happy birthday to you. Happy birthday to you. Happy birthday all five, happy birthday to you

QUESTION: So, how did I got in there, in the room?

DR. JOHN ELLIOTT, ANDERSON'S OBSTETRICIAN: From the surgical standpoint, it was -- we couldn't have done it any better. We couldn't have asked for a better procedure. Everything went well with the delivery. The initial resuscitation, I'll let Dr. Bez speak to, but from the C-section standpoint, we were worried about the uterus contracting with the five babies in there -- it stretched quite a bit. So, our worry, was it going to contract down, and it just came down exactly the way we wanted it. We didn't lose any more blood than a regular C-section, so everything went perfectly.

QUESTION: Doctor, would you answer the question that (INAUDIBLE).

ELLIOTT: I'm going to let Dr. Bez take that question; she's the neonatologist.

DR. MICHELLE BEZ, GOOD SAMARITAN HOSPITAL: We're pleased with how Javiar (ph) is doing. He's doing quite well.

QUESTION: Can you tell us anything that's happening with him?

BEZ: We're pleased with the progress he's made. He was very vigorous in the delivery room, and he's on room-air, and he's having an ecocardiogram (ph) -- as results come in, we'll update you.

QUESTION: Was there supposed to be some type of surgery?

BEZ: It was not needed.

QUESTION: It was not needed.

BEZ: It was not needed.

WOODRUFF: Some happy doctors and some happy parents, the parents of five babies, who were born today to a surrogate mother -- all the babies are healthy range inning weight from three pounds seven ounces to three pounds 15 ounces. It looks like mother, both mothers, and babies are doing very well. So, that's very good news.

Well, we're back now on INSIDE POLITICS and we're continuing our discussion of proposed changes to Social Security, what takes care of all of us at the other end of life.

I'm joined from Capitol Hill by Republican Senator Charles Grassley. He's the chairman of the Senate Finance Committee, which is where any changes to Social Security are going to originate. Senator Grassley, the president's proposal on private accounts, are those going to be part of the legislation coming out of your committee or not?

GRASSLEY: Well, I hope they will be and it's my intention that they will be, but obviously, if I don't have 11 votes for them, they won't be. But, let me assure you, whether they're in the bill that I bring out of committee or not, they're going to be in the bill that I present to the committee because I believe in personal accounts. I think they're very good things.

I also would say that that's only part of the package. The other part of the package is solvency, and dealing with the long-term needs of Social Security. But also, remember, that, even if a bill comes out of my committee without them, under the rules of the Senate, we're bound to deal with this issue on the Senate. So, there's no way personal accounts are not going to have a big discussion sometime this summer.

WOODRUFF: Senator, isn't the question of solvency a larger problem than this dispute over private accounts?

GRASSLEY: Well, for sure, it's easier to explain, and it's easier to understand. The people do understand that, and that's why they expect us to act on it. Personal accounts and how they work are much more difficult, plus the fact that there's just some reluctance to have any departure from the 70-year-old program, even though it has shortcomings.

WOODRUFF: You're going to have a much greater chance of reaching consensus, aren't you, Senator, if you don't have private accounts in there?

GRASSLEY: I believe so, yes, but I think I still have a responsibility to young people who do not feel ownership in Social Security, and that ownership is very, very important because there's a lot of generational resentment by young people now to overcome that, and personal accounts is one way to overcome that, by giving them ownership, and inheritability of it.

WOODRUFF: Are you surprised at this new poll out today in the "Washington Post" and -- by them and ABC News, indicating that the support for private accounts has dropped, pretty significantly, 10 or 11 points, since the middle of March. You now have opposition, 51 percent, to support, 45 percent.

GRASSLEY: Yes. Well, you've been covering Congress for a long time, Judy, and you know how demagogic some issues can be made, and this has been demagogued to death, and a lot of irrational and even intellectually dishonest things said about it. That could happen. Now, that doesn't discourage me because I intend to keep the public education aspect of it alive, as the president's trying to do and hopefully we can turn things around. Now, if we can't turn things around, then we can still do something with the solvency of Social Security. I think we've still done a great deal of good.

WOODRUFF: Very quick last question, Senator, on a different subject. Judicial nominations. We're of hearing some movement on the part of Democrats to achieve a compromise on that. Do you think your party should compromise on the question of these judicial nominations?

GRASSLEY: Well, if we can compromise without basic principle being violated, I think we should compromise. But basic principle is this to me, Judy, and that is that, remember that not a single judge, a circuit judge, had ever been killed on a filibuster in the first 214 years. And we have ten judges who were filibustered to death, that had enough votes to become judges. And the unfairness of the filibuster that hadn't been used for 214 years ought to be preserved, it seems. That's the principle of the Senate, to not filibuster judges to death.

WOODRUFF: All right. We hear you and we wanted you to get your two cents worth in. Senator Charles Grassley on that and on Social Security. We appreciate it.

GRASSLEY: Thank you.

WOODRUFF: It's always good to see you.

GRASSLEY: Good to see you, Judy.

WOODRUFF: And ahead here, he almost lost to write-in candidate and now he's quitting. Our Bruce Morton reports on why San Diego's mayor has resigned and the colorful candidate who once again wants to replace him.

(COMMERCIAL BREAK)

WOODRUFF: In California, one politician's downfall is another's second chance. Now that San Diego's mayor Dick Murphy has resigned amid controversy, his former opponent Donna Frye says she will run for the job she came close to winning.

Our national correspondent Bruce Morton has more on the turning tide in San Diego politics.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): San Diego is one of the prettiest cities in America. It may have the best climate in America. But, boy, has it got problems.

MAYOR DICK MURPHY (R), SAN DIEGO, CALIFORNIA: I am today announcing that I will step down as mayor of the City of San Diego.

MORTON: That's Mayor Dick Murphy, resigning as mayor less than five months into his second term. Well, why not? The city's public employee pension funds are a billion or so dollars in the red. Citizens were organizing a recall petition. It hasn't been much fun. MURPHY: I had hoped my second term would be as productive as the first term, but now that seems unlikely.

MORTON: Well, yes, but the interim mayor will be a city councilman who's under federal indictment, charged with taking money from strip club owners in exchange for voting to relax the no touching law in those clubs. Then there's the surfer chick.

DONNA FRYE, FMR. SAN DIEGO MAYORAL CAN.: It's like a big old wave, you know? It just sort of -- just goes right over your head and all of a sudden, you realize you're right in the middle of it and need to act.

MORTON: That's surf shop owner Donna Frye. She ran against Murphy last fall as a write-in and actually got more votes than he did, but he won because several thousand of her ballots were improperly filled out. She'll run again if there's an election. The retiring mayor wants one, but the city council could just name someone to serve out his term. It's a very pretty city, full of problems. Nickname? Enron-By-The-Sea.

FRYE: It's your government. It means it's your city. All you have to do is take it back.

MORTON: Yes, the voters may agree. But how?

Bruce Morton, CNN, reporting.

(END VIDEOTAPE)

WOODRUFF: Meantime, on edge, on Capitol Hill.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think in a political sense, absolutely, everyone is concerned that this thing is ratcheting up a partisanship in Washington.

(END VIDEO CLIP)

WOODRUFF: It's not just Tom DeLay who's feeling the heat. Coming up, both Republicans and Democrats in Congress rush to get their travel records in order.

Plus, the making of "The Hammer." We'll take a closer look at Tom DeLay's rise to become one of the most powerful players on Capitol Hill.

(COMMERCIAL BREAK)

CHRISTINE ROMANS: Consumer confidence fell during April for a third month in a row, weighing on investors today. The final trades still being counted, but the Dow Jones Industrial average down 90 points right now, 10,152. The NASDAQ is one percent lower.

Oil prices closed slightly lower on the day, settling just above $54 a barrel.

Well, consumers have taken the hit from soaring energy prices. British Petroleum is profiting in a big way. BP owns Amoco and BP stations, and it reported first-quarter earnings that jumped more than 30 percent from a year ago. This oil company earned $5.5 billion in just three months. Analysts expect the other oil giants to also report big profits.

Boeing has made huge strides in its battle against European rival Airbus in the past couple of days. The company won contracts to build as many as 130 long-range aircraft for two non-U.S. airlines. Air India and Air Canada each gave Boeing $6 billion worth of firm orders, including, for the new 787 long-range streamliner. Now, those planes won't arrive in time for airlines to meet soaring air travel demand. The FAA expects air travel to return this year to pre-2001 levels. A record 718 million flyers taking to the skies, but with post 9/11 security, the FAA is warning travelers, expect longer lines at the airport, crowded airplanes and more delays.

One of the largest securities fraud law suits in history comes to a close with a win for former Worldcom investors. Accounting firm Arthur Anderson has agreed to pay $65 million to settle a class action lawsuit alleging it failed to protect Worldcom investors. Several Worldcom directors and banks had already settled, and investors stand to recover more than $6 billion.

Coming up on CNN at 6:00 p.m. eastern, "LOU DOBBS TONIGHT," exporting America: fewer venture capital firms will consider funding a startup unless it includes outsourcing in its business model.

(BEGIN VIDEO CLIP)

MARK HEESEN, VENTURE CAPITALIST: You cannot put your head in the sand and assume this is, today, a U.S.-only economy. It is a global, international economy, and if you don't, as a businessman, understand that from a venture capitalist perspective, you are simply not going to get funded because you could be killed off by competition from the international -- on the international scene.

(END VIDEO CLIP)

ROMANS: Also tonight, while corporate chiefs are jumping on the outsourcing, investors are turning their backs. We'll have a special report.

And, broken borders: her father smuggles illegal aliens across the border but she wants to fight for tighter border control. Lupe Moreno (ph), a Latino-American for immigration reform will join us tonight.

Plus Senator Chuck Grassley and Max Baucus are on the opposite sides of the Social Security reform debate. They join us tonight on that issue.

That, and more, 6:00 eastern on "LOU DOBBS TONIGHT." Now, back to Judy Woodruff. WOODRUFF: Thanks, Christine -- like that green jacket.

ROMANS: You too! Ha, ha.

WOODRUFF: Oh, ha, ha. All right. Now, right back to INSIDE POLITICS.

President Bush says he appreciates Tom DeLay's leadership in the House, and he showed it today by noting DeLay's presence at an event in their mutual home state of Texas, and by inviting the majority leader to fly back to Washington onboard Air Force One. But the public appears less supportive: a new "Washington Post"/ABC News poll shows 41 percent of Americans say they think DeLay should step down from his leadership post amid growing questions about possible ethical violations.

The DeLay controversy is leaving an impression on Capitol Hill and in more ways than one. Let's go to our congressional correspondent, Ed Henry.

Hi, Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Judy, that's right. Fear and loathing on Capitol Hill here because lawmakers in both parties are scurrying around trying to correct travel records, worried that the Tom DeLay controversy is going to blow up in their faces, in part because of a new report out today by the nonpartisan Political Money Line, saying that, since 2000, lawmakers in both parties have taken over 5,000 trips funded by private organizations. While that's permissible, the problem is that the funding is very murky, and it's unclear whether or not lobbyists have actually been the private source of that money in some of those cases.

In fact, there is so much concern that the House Ethics Committee, today, held a closed-door briefing for staffers, trying to refresh all of their memories about all the rules and regulations, what they need to follow. I can tell you I was in the hallway and there was a virtual stampede of staffers showing up, trying to make sure that they keep their bosses in the clear. Some members are telling us that they are now canceling trips. They are trying to make sure that they stay out of the headlines. Other lawmakers, like Tom Feeney, a Republican of Florida, is now changing forms. He says that he mistakenly, in 2003, listed a trip to Florida as being paid for by a lobbying organization. His chief of staff today went to that House Ethics Committee meeting and told me that this is now become a full feeding frenzy.

(BEGIN VIDEO CLIP)

JASON ROE, REP. FEENEY'S CHIEF OF STAFF: I think in a political sense, absolutely, everyone is concerned that this thing is ratcheting up partisanship in Washington. You know, fortunately, we continue to be able to get some things done in spite of how nasty the environment has become. But I think everyone is a little on edge about what we're going through right now. (END VIDEO CLIP)

HENRY: To give you an idea of how serious it is getting, CNN has learned that House Democratic Leader Nancy Pelosi's office has been very quietly conducting a thorough internal review of all the Democratic leader's travel and her staff travel. Now, her office maintains the leader's travel has been on the up-and-up. It was all funded by private sources. They have canceled checks showing that lobbyists did not pay for it.

But, they have found problem with many of the trips conducted by Leader Pelosi's staffers. In fact, CNN has gotten an exclusive copy of this internal review. It shows that in the last several years, in fact, there were 42 trips by Pelosi staffers. They've found problems with 12 of them, where they were not reported promptly, and one of those trips, in fact, was to the tune of $9,000 from a Pelosi staffer who went to South Korea. Now, beyond the fact that it was not reported in a timely fashion, the significance is that it was funded by the very same nonprofit group that funded a controversial trip for Tom DeLay.

So, the bottom line is, this is beginning fodder for Republicans already who are saying Democrats have been very critical of some of Tom DeLays trips, but the more people start digging, it looks like Democrats may have some problems, too.

Also, I want to note, though, that CNN has learned that Tom DeLay's office has been conducting a very thorough internal review of all of Tom DeLay's staff trips. They have not completed that review. We do not have the results yet, but clearly both sides digging in deep. They know this firestorm is not over -- Judy.

WOODRUFF: Yes, it sounds like this is far from the end of this one. OK, Ed, we appreciate it. Thank you.

Meantime, Texas Democrats are closely watching the DeLay controversy unfold, eyeing his seat in Congress and getting their hopes up. Former Congressman Nick Lampson has announced that he will run in the Democratic primary, in hopes of challenging DeLay. But another Democrat, Richard Morrison, has decided not to take a second shot at unseating the incumbent. As our senior political correspondent Candy Crowley reports, DeLay's opponents, past and present, are well aware that the man nicknamed "The Hammer" knows how to fight hard, especially when the going gets tough.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR POLITICAL CORRESPONDENT: Two things are true when you become late night fodder: you have arrived and you are in trouble.

DAVID LETTERMAN, HOST, "LATE NIGHT WITH DAVID LETTERMAN": It was so nice down in Washington to see that Tom DeLay was accepting cash in the park.

CROWLEY: A bug exterminator driven to politics by his fury over environmental regulations, Tom DeLay won a seat in the Texas state legislature. It was 1978.

TOM UHR, FMR. TEXAS STATE LEGISLATOR: Typical freshman member. You knew who he was. You knew that he was a member. Didn't make any great waves one way or the other.

CROWLEY: He was elected to Washington in 1985, a conservative, a true believer in fewer regulations, lower taxes, freer trade, smaller government. He began to build a base. He began to collect chips.

BILL PAXON (R), FMR. NEW YORK CONGRESSMAN: He was -- you know, the kind of person who would always reach out to help -- help with your political needs, your congressional needs, your personal needs.

CROWLEY: His rise to headliner status began a decade after his arrival in D.C. DeLay spotted a chance at a leadership position and made his move. It began with care packages.

REP. DAVID DRIER (R), CALIFORNIA: Big boxes. In it, it had pencils and papers, and home-baked cookies. So, a candidate for Congress who would be out knocking on doors, meeting with supporters, talking about issues, debating his or her opponent, would come back to the headquarters and they would say, this guy Tom DeLay just sent home-baked cookies from Texas. It was impossible to compete against that.

CROWLEY: He fortified cookies with cash, using his political funds to support new Republican hopefuls. When the House opened for business in 1995, Republicans were in charge for the first time in four decades. Many of them owed Tom DeLay. Grateful party freshman helped elect him as the whip, the personal responsible for rounding up votes. He was very good at it.

BOB BARR (R), FMR. GEORGIA CONGRESSMAN: He's worked for each member to get elected and to be re-elected. That is something that members don't forget, or forget at their own peril.

CROWLEY: They call him "The Hammer."

DRIER: Tom DeLay is a no-nonsense, hardball, you know, rough- and-tumble Texas politician.

CROWLEY: "The Hammer" can pound money out of donors.

UNIDENTIFIED MALE: Gentleman from Texas.

SEN. TOM DELAY (R), TEXAS: Mr. Speaker, I send to the desk...

CROWLEY: He can pound votes out of colleagues and, of course, "The Hammer" pounds Democrats.

ERIK SMITH, FMR. DEM. CONGRESSIONAL AIDE: There were countless times on the House floor when Democrats would feel like we finally pulled one off, and we were finally going to win, and the clock on the vote would stop, and Tom DeLay would appear on the floor, and Republican members would start walking to the House to change their votes. CROWLEY: Eight years as whip, three, now, as majority leader, he is a brass-knuckles conservative in relentless pursuit of his agenda.

STUART ROY, FORMER DELAY AIDE: Every morning when he wakes up, he's trying to figure out a way that the conservatives can win and that the Democrats lose.

CROWLEY: After helping dozens of state candidates run for office in Texas, it was DeLay who pushed the Republican-controlled legislature in Austin and the Republican governor to redraw districts to favor the election of Republicans.

When Texas Democrats fled the state to prevent a vote, DeLay called the FAA to find out where they were. It was a jaw-dropping, brash plan from beginning to end. It worked. In the next election, DeLay got six additional Republican allies in Washington. Charlie Stenholm, drawn into a Republican district he couldn't win, was one of the Democrats sent home to Texas.

CHARLIE STENHOLM (D), FMR. TEXAS CONGRESSMAN: He was a bulldog and he wasn't going to take no for an answer. And some of his tactics are being reviewed by the proper legal authorities, and I'll leave to them whether anything was illegal or not.

CROWLEY: Never found to have violated any laws or rules, DeLay has skirted the edge, warned by the House Ethics Committee on four separate occasions, including the FAA incident. DeLay's reach goes well beyond the legislative branch. Bloomberg News reports 11 former DeLay aides, now working as lobbyists, brought in $45 million in business over the past two years. Dubbed DeLay Inc., this is an unofficial network of like-minded friends, allies, donors and former staffers along K Street, Washington speak for lobbyists and trade assocations.

DeLay went so far as to warn pro-business lobbies to stop giving money to Democratic candidates. He pushed K Street to hire Republicans in key positions. Punish your enemies, he said later, reward your friends.

ROY: The point -- the whole point of the so-called K Street Project was, shouldn't you actually have a Republican to side with a Republican majority if you are pro-business. It's pretty straightforward politics.

CROWLEY: His friends are loyal, his critics intense. All agree on this: Tom DeLay wields great power with no apologies, few boundaries and great success.

ROY: You know, it was probably -- the relationship was most notable that we always lost. You know, that's the thing about DeLay is, he always wins.

CROWLEY: Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Thank you, Candy. Who would have thought members of Congress could be bought with cookies? Now we know.

Well, political friendships can be fleeting, but not always. Up next, Bill Clinton lends a campaign hand to a good pal from his days as president. Will it help?

Plus, he was governor of Massachusetts. Now wait until hear what William Weld may do for an encore.

And later, when we go "Inside the Blogs," find out who is going online to keep their protests alive.

(COMMERCIAL BREAK)

WOODRUFF: Former president Bill Clinton was often seen as a divisive figure in American politics, but he always managed to united the party faithful. British prime minister Tony Blair faces a national election just days from now, and he called on the former American president to inspire his own rank and file.

Our Bill Schneider has the story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: It brings me great pleasure to introduce the 42nd president of the United States. It's Bill Clinton!

(APPLAUSE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): No, this is not a Democratic Party rally. It's a Labor Party rally in London, ten days before British voters go to the polls.

CLINTON: I was honored to be asked to be a part of this.

SCHNEIDER: Clinton made a virtual appearance by satellite on Sunday to endorse a candidate in another country's election. In this case, British prime minister Tony Blair and his likely successor, Gordon Brown.

CLINTON: I'm delighted to be a part of this event to support Tony and Gordon and the whole Labor team.

SCHNEIDER: Bill Clinton isn't Blair's only prominent American fan.

BUSH: Prime Minister Blair is a visionary leader. I've come to know him as a man of unshakable convictions.

SCHNEIDER: Therein lies Blair's problem. A recent poll asked British voters if Tony Blair is re-elected, should he be more distant from President Bush? Yes, say the British, emphatically. Blair has come under heavy criticism because many Britons feel he misled the country about the threat posed by Saddam Hussein in 2003.

TONY BLAIR, BRITISH PRIME MINISTER: ... that he has existing and active military plans for the use of chemical and biological weapons, which could be activated within 45 minutes.

SCHNEIDER: A majority of Britons do not believe Blair is trustworthy. He's been forced to confront the trust issue in the campaign.

BLAIR: I think I did the right thing. I understand why some people think I didn't. But for goodness sake, let us stop having this argument about whether it's my character or my integrity that's at issue here.

SCHNEIDER: Distrust breeds apathy, as suggested by this headline in a London newspaper Tuesday. Blair's Labor Party is worried that disillusioned Labor supporters may stay home.

Enter Bill Clinton.

CLINTON: Usually when you get a progressive government in power, our people get a little easily disillusioned and they don't like this policy or that policy and they sometimes fall into the trap of thinking it doesn't matter, there are no consequences. Well, if you believe that, you ought to look at the difference in the United States between now and four years ago to see the difference in the consequences.

(END VIDEOTAPE)

SCHNEIDER: Clinton is warning the left in Britain: because of disillusionment with me, America got George W. Bush. Do you want to make the same mistake, he's asking the British? Judy.

WOODRUFF: So, Bill, did they pipe in a message from President Bush?

SCHNEIDER: Not that we know of. In fact, I'm pretty sure they did not. Bush is deeply unpopular in Great Britain. Clinton is very popular there.

WOODRUFF: OK. Bill Schneider in the Washington set, where we usually are. Thank you, Bill.

Well, he has been a governor before. Now he says he may want to try it again in a different state. Up next, the latest on former Massachusetts governor William Weld. Is he ready to leave the empire state?

(COMMERCIAL BREAK)

WOODRUFF: In the ongoing saga in the United States Senate, the dispute over judicial nominees. The Republican leader of the Senate, Bill Frist, is now saying within the hour, no dice. He wants nothing of a compromise that has apparently been put forward by Senator Harry Reid, who is the Democratic leader of the Senate. Reid has had conversations with Frist apparently suggesting that there be a way of getting some of the president's nominees to the judicial -- federal judiciary through and others not. Frist is saying, no, we will not accept any deal that keeps the Republican majority, in his words, from confirming judicial nominees that have been approved by the Judiciary Committee. So that means the two leaders in the Senate remain at loggerheads on the question of these nominees.

To another item: a former governor who may try again in a different state. Published reports quote former Massachusetts Republican Governor William Weld, who says he is seriously considering a run for New York governor. Weld says he won't run, however if incumbent George Pataki or former New York City Mayor Rudy Giuliani enter the race. Weld, who grew up in New York, also says he thinks he could defeat the likely Democratic candidate, State Attorney General Eliot Spitzer.

Moving on, bloggers join the back and forth over John Bolton. Up next, we're going to check in with our blog reporters to find out how one player in the Bolton debate is going on line to tell her side of the story.

(COMMERCIAL BREAK)

WOODRUFF: The battle over the president's nominee to be U.S. ambassador to the United Nations has landed in the blogosphere. For more, we turn to CNN Political Produer Abbi Tatton and Jacki Schechner. She's our blog reporter. Hi, Jackie.

JACKIE SCHECHNER, CNN BLOG REPORTER: Hi, Judy. You know when you're dead on with your blog choices when you go to pull up the page, and it's loading very slowly because there's too much traffic. But we start today -- there we go; now it popped up -- we start today at Daily Kos.com. The reason why, we've got about two weeks now before John Bolton's confirmation hearings resume, and it's giving people on both the left and right plenty of time to dig up information.

The right didn't have to work that hard today though, because Melody Townsel, the woman who accused John Bolton of chasing her down a Moscow hotel hallway, among other things, wrote a letter, and it was posted by Amy in Dallas over at Daily Kos. The letter said that she plagiarized in college 22 years ago. It says she plagiarized some columns while working for her college newspaper. And towards the bottom of the letter, she says, "I know they'll tell you that my pending statement to the Senate cannot be trusted because I did some stupid things as a 20-year-old kid two decades ago. They'll try to make my actions of two decades ago the story."

ABBI TATTON, CNN POLITICAL PRODUCER: And if it's slow to pull up that site there on Daily Kos, you can go to any one of a number of conservative bloggers today who are linking to that power. Power Pundit is one. This is a conservative blogger. Rick Edwards in Seattle, Washington, he posts the entire letter there. And as it seems that Melody is predicting, this is the comment along here. "That's pretty much blows her credibility out of the water." That's what the conservatives are saying. "The left will dig up anyone these days to smear a Bush nominee, won't they." We've seen more and more people linking to this letter on the right as the day has gone on.

Little Green Footballs is another one, here linking to the letter just below. That's just been updated on (INAUDIBLE). "She's whining about this to the people who understand her best: the lunatics at Daily Kos." Not much love lost there between the two of them.

SCHECHNER: Another story making the blogs today is that President Bush's Social Security tour, that 60-day event on privatization, is going to continue beyond the 60 days. That's the latest news. Over at voxfx.blogspot.com (ph), "More Money Wasted," is the title. President Bush's strategy for wrapping up the tour, he says, "Ignore the calendar and keep on stumping."

Wandering over at blondesense.blogspot.com -- Pissed Off Patricia is the poster's name, and she says, "As Reverend George Bush has traveled around the country spending God only knows how much of our money, he's preached to many choirs. Perhaps he should have spent more time preaching to the congregation," noting that his poll approval ratings in regard to Social Security have been dropping.

TATTON : At one of President Bush's Social Security events last month in Denver, three Democrats were refused entry for displaying an anti-Bush sticker on their car -- the "Denver Three," as they're known. We've mentioned them here before. Even though this happened last month, March 21st, it's still out there on the blogs. One of the reasons is, the Denver Three put together their own little PR machine trying to get it out there online. TheDenverthree.org. You can go over to Colorado Luiz (ph) as well. He's writing about this extesively, lots of Colorado bloggers and other bloggers too talking about it, talking this PR machine, and saying, maybe this is bad for the White House. "What would cause greater damage to the Bush administration and its privatization plan? Someone standing up to yell like a nut at a town meeting, or a ton of negative publicity that goes on for weeks about the anti-democratic strong-arm tactics of the as-yet undetermined organizers of the event." So, we'll be monitoring that one. Seeing if they are keeping the story out there. Judy?

WOODRUFF: OK. You mean, you don't have to live in Washington to have a political opinion? OK.

SCHECHNER: Absolutely not.

WOODRUFF: We get it. OK. Jacki, Abbi, thank you very much. We'll see you tomorrow.

That's it for INSIDE POLITICS this Tuesday. I'm Judy Woodruff in Atlanta. "CROSSFIRE" starts right now.

END

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