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JUDY WOODRUFF'S INSIDE POLITICS

President Bush Gives Speech on Energy; Tom DeLay's Problems Continue; Senators Discuss Senate Troubles

Aired April 27, 2005 - 15:30   ET

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


ANNOUNCER: Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.
JUDY WOODRUFF, HOST, "INSIDE POLITICS": Thank you for joining us. We begin with House Speaker Dennis Hastert's tactical retreat. When he announced today he's willing to scrap new ethics rules opposed by Democrats, he never mentioned Majority Leader Tom DeLay by name, but he left little doubt that Republicans want to put the flap over those rules, and over DeLay's ethics, behind them. Let's get more, now, on the move and the motive and reaction from our congressional correspondent Ed Henry.

Hi, Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Judy.

That's right, a vote late -- expected later today on the House floor to change the ethics rules back, a major retreat from the House speaker, as you mention, and the motive here, clearly, try to get this behind the Republican party -- and the major news is, that this will open the door to an investigation of Tom DeLay.

Under the old rules, if allegations came up against a member of Congress and the House Ethics Committee deadlocked, they would err on the side of caution and actually open an investigation. In January, when the rules were changed, if there was a partisan deadlock, they would not have an investigation. Democrats have spent the last four months yelling that this is an attempt to shield Tom DeLay from another investigation. Republicans have mostly held firm with DeLay; Speaker Hastert has been insisting that he would not back down. That's why it was such a dramatic development, when the speaker came to the cameras today, to say that he had changed his mind.

(BEGIN VIDEO CLIP)

REP. DENNIS HASTERT (R), HOUSE SPEAKER: I think we need to move forward in the ethics process. I think that there are issues out there that need to be discussed. I think that there's a member, especially on our side, that needs to have the process move forward so he can clear his name. Right now we can't clear his name. The media wants to talk about ethics and, as long as we're at a stalemate -- that's all that is in the press today is the ethics stalemate. We need to move forward. We need to get this behind us.

(END VIDEO CLIP) HENRY: So, why did the speaker change course you? You heard it right there: this is becoming a distraction to the Republican party. He wants to try to get it behind them, and, in fact, House Democratic Leader Nancy Pelosi is insisting the speaker also felt a lot of political heat. There are editorials popping up across the country denouncing Tom DeLay, saying the speaker of the House had to make sure there would be an investigation. And, I've talked to Republican lawmakers privately, who say those editorials are having an effect. When they go home and talk to their constituents, and they talk about Social Security, they're actually starting to get questions, instead, about Tom DeLay.

And, it's clear, also, that the political heat on Mr. DeLay himself. We saw the pictures yesterday in Texas, the president of the United States and Mr. DeLay walking together, looking very happy. Mr. DeLay all smiles as he got a boost, a little bit support, in Texas. But he had a much different tact today when I and other reporters were trying to ask Mr. DeLay questions about the rules changes.

(BEGIN VIDEO CLIP)

SEN. TOM DELAY (R), MAJORITY LEADER: Been great.

QUESTION: How was that conference?

QUESTION: Will this open the door to a lot of Democratic investigations?

DELAY: You guys better get out of my way. Where is our security?

(END VIDEO CLIP)

HENRY: So, can you see, right there, that this is getting to Mr. DeLay a little bit. He's obviously a little bit angry about all of the media coverage, and Democrats feel they've gotten a short-term victory here. In addition to getting to Mr. DeLay, they've gotten the speaker of the House to retreat. They also feel now, there will be an investigation of Tom DeLay. But, what you're hearing from Republicans is that Democrats should be careful what they wish for, because, while it might be a short-term victory, Republicans are insisting privately that they are going to win this ethics war, in part because they think they're right on the issue in the long-term. They think Tom DeLay's name is now going to be cleared with an investigation, and they also point out that, now, this will open the door to all kinds of Democrats facing investigations as well.

You heard it reported on CNN first yesterday, that an internal review by Nancy Pelosi has found problems with about 12 trips that her staffers took. Republicans are combing through all kinds of travel records, just like the Democrats are for the Republicans's travel records, and Republicans are saying there's going to be a lot of Democratic investigations as well. A game of tit and -- tit for tat, that's going get ugly real fast, Judy.

WOODRUFF: So, Ed, where does this go from here? The investigation, that's all behind closed doors?

HENRY: That's right. There will basically, eventually, once the ethics committee starts rolling again, there will be an investigative subcommittee, very likely appointing a smaller group of members, that will take a close look at Tom DeLay. But, again, you can count on the fact that there will be other investigations as well.

WOODRUFF: All right. Ed Henry at the Capitol. Thank you, Ed.

The Senate Foreign Relation Committee reportedly is preparing new questions and setting up new interviews to gather information about John Bolton. The president's choice for U.S. ambassador to the United Nations was back on Capitol Hill yesterday, trying to shore up support for his nomination, stalled by allegations that he abused power and mistreated workers. Aides say that Bolton is not considering withdrawing and that the chances remain 50/50 he will be confirmed. The White House stressed the president's support for Bolton again today.

And, we're told that Vice President Cheney took the opportunity to promote Bolton's nomination during a Senate policy lunch on the Hill yesterday. An administration official says that Cheney also phoned senators to put in a good word for Bolton. No word on which senators, Cheney or Bolton, were lobbying.

Senate Democrats got an assist today in the fight over filibusters. Al Gore headlined a moveon.org rally here in Washington, protesting the GOP threat to deny Democrats of their power to block judicial nominees. The Democrats's 2000 presidential nominee accused Republicans and the religious right of trampling on the constitution.

(BEGIN VIDEO CLIP)

AL GORE, FMR PRESIDENTIAL CANDIDATE: It is no accident that this assault on the integrity of our constitutional design has been fueled by a small group claiming special knowledge of God's will in American politics. They even claimed that those of us who disagree with their point of view are waging war against people of faith. How dare they. How dare they.

(END VIDEO CLIP)

WOODRUFF: Moveon.org also plans similar rallies across the country today in conjunction with a new ad campaign portraying Republicans as out of control.

President Bush laid out new initiatives to help America meet its energy needs, mindful of growing public concern about rising gas prices. The president proposed building new oil refineries on closed military sites, speeding construction of new nuclear power plants, and expanding tax credits for owners of hybrid and fuel cell cars. For details on all the proposals and the politics, let's bring in CNN's Elaine Quijano. She's at the White House.

Hi, Elaine.

ELAINE QUIJANO, CNN CORRESPONDENT: Hello to you, Judy.

This is the second time in just about a week that President Bush has delivered a speech on energy. This is all happening, of course, against the backdrop of high gas prices and, also, the summer driving season fast approaching.

Now, the president, as you mentioned, unveiled a number of proposals, including a plan that caught some at the Pentagon offguard, that plan having to do with oil refineries. Now, President Bush says he believed that federal agencies should work closely with local communities to try and explore ways to expand America's oil refining capacity, and today he suggested encouraging the building of oil refineries on closed military bases. Now, interesting to note that this comes a couple of weeks before the Pentagon is set to announce a list of proposed base closures, and that, of course, is always a highly politically charged decision. But, this proposal is also being sold by the White House as a way to keep jobs on bases that might be closed.

Now, senior administration officials in the past have acknowledge that the issue of high gas prices may be a problem politically for the president, that they certainly see this in the headlines. Americans have expressed this as a concern, and even before President Bush announced his proposals today, Senate Democrats -- Democratic Leader Harry Reid -- released a statement calling the initiatives, "half- hearted measures," and he said the president can and should do more to provide immediate price relief. The White House, though, taking a long view on this, saying these problems have been in the making for years and that they will take some time to address. But, the president said today, he believes that the solution should focus on making America more energy independent.

(END VIDEO CLIP)

GEORGE W. BUSH, UNITED STATES PRESIDENT: Our dependence on foreign energy is like a foreign tax on the American people. It's a tax our citizens pay every day, in higher gasoline prices and higher costs to heat and cool their homes. It's a tax on jobs, and it is a tax that is increasing every year.

(END VIDEO CLIP)

QUIJANO: So, the president, there, saying that he believes that part of the solution really needs to focus on keeping America energy- independent. The president, also, today, once again calling on Congress to pass the long-stalled energy bill, but President Bush already running into opposition. Those high gas prices continue to dominate the headlines. Democrats saying that he should do more to try and address the problem to give Americans some relief -- Judy.

WOODRUFF: All right, Elaine Quijano, thank you very much.

First lady Laura Bush had a little fun at her husband's expense last night when she visited "The Tonight Show with Jay Leno." In addition to discussing her recent trip to Afghanistan, and her efforts to help U.S. students improve their reading skills, Mrs. Bush talked about what it's like to have better poll numbers than the president.

(BEGIN VIDEO CLIP)

JAY LENO, HOST, "TONIGHT SHOW WITH JAY LENO": I was just checking something. You have an 85 percent approval rating, which is higher than, I think, any politician has ever had. Did you watch the polls? Do you look at them?

LAURA BUSH, FIRST LADY: No, I don't really. I mean, of course, look at my husband's polls.

LENO: Yeah, yeah, yeah.

BUSH: Not really.

LENO: Do you ever go, nyah, nyah, my polls are higher than your polls?

BUSH: No, but I might do that.

(END VIDEO CLIP)

WOODRUFF: Leno asked also the first lady if she ever got angry at comedians who poke fun at her husband. She said no, but she also told Leno, he, quote, better look out for Barbara Bush, the president's mother.

Back on Capitol Hill, there is a long and rich tradition of ethics controversies that date back before Tom DeLay. Can you name two House speakers who paid a big price? The answer ahead.

Plus, has a vast left-wing conspiracy formed to take on the one that allegedly exists on the right? We'll hear from a man who wrote a book on that subject.

And late night laughs in the daytime featuring First Lady Laura Bush.

(COMMERCIAL BREAK)

WOODRUFF: The political skirmish over Congressman Tom DeLay is a big story here in Washington, but he is hardly the first congressional leader to find himself engulfed in a partisan storm over ethics.

CNN's Bruce Morton looks back at two of the most memorable from the recent past.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Ethically troubled congressional leaders? It goes way back. Take Democratic House Speaker Jim Wright. Republican Newt Gingrich complained to the House Ethics Committee, which eventually charged Wright with 69 ethics violations, including getting 50 percent royalties he got on a book he sold to lobbyists in bulk. Wright didn't like it. REP. JIM WRIGHT (D) HOUSE SPEAKER: All of us in both political parties must resolve to bring this period of mindless cannibalism to an end. They've done enough of it!

MORTON: But he knew what he had to do.

WRIGHT: I will resign as speaker of the house.

MORTON: But then Gingrich, whose proposed Contract with America helped Republicans take control of the House after 40 years in the minority, became speaker himself and ran into his own ethical troubles: a book deal and controversy over how a course he taught was financed. He accepted a reprimand, paid a $300,000 fine, but then Bill Clinton outmaneuvered him. The country blamed Congress, not the president, for shutting down the government and the Republicans lost five seats in the 1998 elections. Colleagues blamed Gingrich, and he resigned.

Bob Livingston (ph), who was to succeed him, acknowledged he'd been unfaithful to his wife and declined the speakership. Enter Dennis Hastert. There's a pattern: ethics charges, not always proven, that somehow snowball. A parallel for Tom DeLay?

STUART ROTHENBERG, ROTHENBERG POLITICAL REPORT: I think DeLay's problems are like previous problems, whether it's Jim Wright or Newt Gingrich, in that they are -- there's some news out there, but there's a sense that there -- that the controversy is building, and that support is weakening, and that ultimately this, his party rallying behind him, will give way pretty quickly.

MORTON: It's early yet. DeLay isn't as well known as Wright or Gingrich, but...

ROTHENBERG: I don't think it's a matter of if Congressman DeLay is going to be leaving the House, I think it's a matter of when. Now it may not be in a matter of days, it may take a couple weeks or a few months. But I think the road is pretty clear.

MORTON: Maybe. These things are tricky sometimes. We'll give Jim Wright the last word.

WRIGHT: I'm convinced that I'm right. Maybe I'm wrong.

MORTON: See?

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Thank you, Bruce.

Well, around here, we've all heard about the so-called right-wing conspiracy, but what about a left-wing conspiracy? I'll talk with a writer next who says the left put together its own organized effort to defeat George W. Bush in 2004.

(COMMERCIAL BREAK)

WOODRUFF: One political writer says the unprecedented effort by the left to defeat President Bush will only get stronger. In his new book, "National Review" writer Byron York calls that effort "The Vast Left Wing Conspiracy." I spoke to York about his working on the book just as Democrats were licking their wounds last November.

(BEGIN VIDEOTAPE)

BYRON YORK, AUTHOR, "VAST LEFT WING CONSPIRACY": The book is about how groups and people like moveon.org, the Democratic 527s, George Soros, Michael Moore, Al Franken and Air America, how they actually created a very large, well-funded and coordinated movement. They were really working together, a lot of them, and essentially created kind of a Democratic Party outside the Democratic Party to try to defeat George Bush. Obviously, they failed in that. I think John Kerry had a lot to do with that. And now they're moving on to other things, including '06 and '08.

WOODRUFF: You call it a conspiracy. Is it really a conspiracy? I mean, what so in secret about...

YORK: No, it's not in a conspiracy in the criminal sense, just as I think Mrs. Clinton was referring basically to a right-wing message machine and a right-wing attack machine that was not a criminal conspiracy. It's a -- the vast left wing conspiracy has become kind a shorthand, even on the left, for this whole new set of new institutions.

When last month, Al Franken of Air America said of his radio program, we're just trying to be part of the vast left wing conspiracy. And a very influential blogger on the left, Daily Coast, when the book came out said, we are building a vast left wing conspiracy. It's very early and we're trying to counter what's on the right. But it is become kind of a shorthand for the movement.

WOODRUFF: Why isn't it just, Byron York, why it isn't just a mirror image of what we've seen on the right?

YORK: Well, they -- first of all, they told me that they were actually trying to imitate a lot of what they saw on the right. But what happened on the right took -- grew up over 40 years, after the defeat of Barry Goldwater in 1964. So you have things like think tanks like the Heritage Foundation, talk radio has grown to its strength over a couple of decades now.

The thing that really distinguished this group, this vast left wing conspiracy, is the fact that they're trying to build it all instantly, just pouring huge amounts of money into it, trying to build it now.

WOODRUFF: If they are so smart, at least some of them are so smart, why did they lose in 2004?

YORK: Well, as I said, John Kerry had a lot to do with it. And, you know, after the election, Michael Moore said, you know, if it hadn't been for us, it would have been a landslide. In other words, it would have been worse. You know, I think they lost for a couple of reasons: because of Kerry, because of the fact that they were new and they're still growing and the fact that political conditions were terrible for them in the sense that -- I believe there was a war on terror and I think the American public, as a whole, did not really want a change in leadership in the middle of the war on terror.

WOODRUFF: You also say that the -- what you call the vast left wing conspiracy ensured that future campaigns will not look like those in the past.

YORK: Well...

WOODRUFF: Are you saying that this has changed politics forever?

YORK: Oh, I think so. I think -- first of all, just look at the amounts of money that groups like moveon.org raised. And look at the 527 groups, like -- I have a chapter America Coming Together, which was the biggest of those 527 groups. They're outside the party. They're not as accountable to anybody in the party.

They have extraordinary power now. They use new methods like the Internet and movies to raise political issue. And you know, after the election, Eli Pariser, who is the head of political part of Move On, said about the Democratic party, we bought it. We own it. We're taking it back. It's our party now. So this is a very, very important development.

(END VIDEOTAPE)

WOODRUFF: Author Byron York. He wrote "The Vast Left Wing Conspiracy." It is just out.

Well, as we promised a few minuets, we've got a little more of Laura Bush with Jay Leno last night. We're all watching.

(BEGIN VIDEO CLIP)

LENO: Are you the jealous type?

L. BUSH: Well, yes, sometimes.

RENO: Really? Because I saw something that -- now, while you're here, this is something that happened in Crawford. Can we show that footage?

L. BUSH: And I was out of town.

(FOOTAGE OF GEORGE BUSH WITH CROWN PRINCE ABDULLAH WHILE MUSIC PLAYS)

LENO: I just wondered if you'd seen that.

L. BUSH: I saw it on the front page of the newspaper today.

LENO: So you weren't shocked by that? L. BUSH: No. It was actually very sweet.

LENO: No, I know. I'm just checking.

(END VIDEO CLIP)

WOODRUFF: You have to be able to answer all those questions when you're first lady.

So why did Dennis Hastert retreat in the fight over ethics? Coming up, we'll look at the politics and the polls behind the House Speaker's move.

Plus I'll talk to two rising stars in the Senate about the fight over filibusters and the future of Social Security reform. Senators Barack Obama and John Thune are my guests.

(COMMERCIAL BREAK)

WOODRUFF: It's just before 4:00 on the East Coast, and as the markets get set to close on Wall Street, I'm joined by Kitty Pilgrim. She's in New York with "The Dobbs Report." Hi, Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Hi, Judy, thanks.

Well, stocks are holding onto fairly modest gains We have the Dow Industrials adding about, let's look, 44 points right now. Nasdaq slightly higher. One reason that stocks are doing well is oil prices fell $2.50. That put it below $52 a barrel. A surprise jump in U.S. inventories, to their highest level in nearly three years, helped. Also President Bush proposed a new energy plan, including a proposal to build refineries on former military bases. That factored into the markets.

And in economic news, orders for durable goods dropped nearly three percent. That indicated a slowdown in manufacturing. Now orders have dropped for three straight months. That's the first time that's happened since the recession of 2001.

The Supreme Court today heard an appeal from Arthur Anderson on the Enron case. Anderson was found guilty in 2002 of destroying Enron documents needed for a federal investigation. The firm crumbled shortly after that conviction and tens of thousands of employees lost their jobs. But the company continues its legal fight, insisting it never received a fair trial.

Also in court today, former Tyco chief Dennis Kozlowski defended himself against larceny charges. Kozlowksi and former CFO Mark Schwartz are accused of looting the company of $600 million to fund their lavish lifestyles. Today, Kozlowski testified on his behalf. He did not take the stand in the first trial.

Coming up, CNN 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," "Broken Borders." Several states are now allowing illegal aliens to pay in- state tuition rates at community colleges, even though when they graduate, they can't legally get jobs. (BEGIN VIDEO CLIP)

JOSH BERNSTEIN, NATL. IMMIGRATION LAW CENTER: But if they do succeed, if they do manage to be able to scrape together the money from friends and family or their church group or whatever, it's really in our interest to have them get an education.

(END VIDEO CLIP)

PILGRIM: Also tonight, one columnist says securing the U.S. borders isn't the answer to our immigration problem as long as American employers continue to hire illegal aliens. He explains that tonight.

Plus "Exporting America" improvements in technology are making it easier to outsource one of America's most prized creative industries: architecture. We'll explain.

And we'll tackle the filibuster debate with Democratic Senator Richard Durbin.

That and more, 6:00 Eastern, LOU DOBBS TONIGHT. But for now, back to Judy Woodruff -- Judy.

WOODRUFF: Thank you, Kitty. And you know we'll be watching.

Now, back to INSIDE POLITICS.

House Republican leaders have issued talking points to their members portraying their retreat on ethics rules as taking the high road. Speaker Dennis Hastert announced his willingness today to scrap those new rules. And the House is expected to vote on that later today.

An aide to Minority Leader Nancy Pelosi says the move will be backed by Democrats who accused Republicans to change the rules back in January to protect Majority Leader Tom DeLay.

DeLay refused to answer questions about the turn of events on the Hill when CNN tried to catch up with him earlier today. A return to the old ethics rule will likely open the door for an investigation of DeLay's conduct including overseas travel. But it could also lead to probes of some Democrats.

Well, let's talk more now about DeLay's trouble with our senior political analyst Bill Schneider. So Bill, first of all, what are you finding is the public view of Tom DeLay?

BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, you know, Tom DeLay is still not a very well known figure, say compared to Newt Gingrich after Gingrich became Speaker of the House in 1990s. DeLay has chosen to operate more behind the scenes than Gingrich did.

Well, this week's Washington Post/ABC News poll shows a plurality of Americans, 41 percent, of the opinion that DeLay should step down as House Majority Leader, 32 percent think he should remain in his job and 28 percent have no opinion about DeLay.

A little over a third of Americans say they have been following the DeLay controversy either somewhat or very closely. Opinion in that group is more negative, 63 percent of people following the issue think DeLay should step down. But most Americans aren't paying too much attention at this point.

WOODRUFF: Bill, is this spilling over? Is this controversy over DeLay hurting Republicans more broadly?

SCHNEIDER: Indirectly, is the way I would put it. The DeLay controversy is diverting attention from issues Americans are really concerned about. And so is the controversy over John Bolton and the filibuster and even Social Security for that matter.

Earlier this month the Gallup Poll asked Americans what they felt was the most important problem facing the country, economic problems including jobs the deficit and gas prices over shadowed everything else. Iraq was the only other issue in double digits. Just 8 percent mentioned Social Security. And the same number said terrorism. Then came healthcare then moral decline, then education, then corruption and ethics in government at 5 percent.

Now that was three weeks ago. But all the polling this month suggests that concern about the economy and gasoline prices has intensified. The polling also shows declining job rates of President Bush and for Congress. And in the Harris Poll this month the public gave both congressional Republicans and Democrats over 60 percent negative ratings.

So once again, Washington looks out of touch. And why does that threaten Republicans? Because Washington is now a GOP city. Republicans are in power. A revolt against Washington for failing to pay attention to the right priorities would be a revolt against them.

You know it has happened before to Democrats.

WOODRUFF: It has. But the sense is -- you are saying among many Americans is that Congress, that Washington is not pay attention to the issues people think they should be paying attention to?

SCHNEIDER: Exactly. And that's overall the economy.

WOODRUFF: Bill Schneider, thank you very much.

Well when it comes to partisan squabbling, which Bill was just referring to, the Senate has its own issue. Up next, two high profile freshmen -- Democrat Barack Obama and John Thune face off on Social Security reform, on judges and more.

Also ahead, what has Michael Bloomberg done? We'll tell you why the New York mayor's poll numbers raise that question.

And later, inside the blogs, find out what could make bloggers on the right and left see eye to eye.

(COMMERCIAL BREAK)

WOODRUFF: Some late breaking developments out of the Pentagon. Let's bring in our Pentagon correspondent Jamie McIntyre. Jamie, I understand the secretary of Defense had a stern warning for the Congress.

JAMIE MCINTYRE, CNN PENTAGON CORRESPONDENT: Well, following his appearance this morning before the Senate Armed Services Committee, Defense Secretary Rumsfeld has sent a series of letters warning lawmakers that unless they pass the supplemental budget this week before the scheduled recess that the Army may in fact run out of money.

He sent letters up to the both the speaker of the House, the Senate majority leader, and on the bottom he scrawled in his own handwriting, our folks need this money, these funds, thanks, Don. An unusual personal touch as he's trying to light a fire under lawmakers.

The point here is that he says the Army is already having to slow down spending and that they will have to shift money from other accounts to continue operations unless the $81 billion supplemental budget is finalized this month. So he's trying to light a fire under them.

He also says they have to invoke the Feed and Forage Act in order to keep deployed troops properly equipped. I think we're all familiar with the feed and forage act.

In any event, it's sort of a standard political ploy. The Pentagon in trying to emphasize the importance of having that budget authority, that supplemental request. Of course, if it doesn't pass, they do have ways to compensate for that. But as the secretary points out, it disrupts other operations.

So, Rumsfeld again on the heels of his testimony this morning before the Appropriations Committee urging the Congress to take that final action on the supplemental -- Judy.

WOODRUFF: All right. So, now we're going to have to find out what the congressional reaction to this is. What they are going to say about it and do about it. Jamie, thank you very much.

We'll be right back. That interview with Senator's Barack Obama, John Thune right after the break.

(COMMERCIAL BREAK)

WOODRUFF: With me now to talk about a range of topics making headlines here in the nation's Capitol, two senators just begins their first terms in the upper chamber, Republican John Thune, he's from South Dakota, Democrat Barack Obama is from Illinois. Gentlemen, good to have you with us. We appreciate it.

SEN. BARACK OBAMA, (D) ILLINOIS: Thank you.

SEN. JOHN THUNE (R) SOUTH DAKOTA: Good to be with you, Judy. WOODRUFF: Senator Obama, to you first, on this dispute over the president's judicial nominees. Yesterday, Harry Reid, the Democratic leader indicated he's willing to compromise, but the Republican leader, Senator Frist made it very clear that he wants an up or down vote on every single one of these. Have the Democrats waited too long to show a willingness to compromise here?

OBAMA: No, I don't think the Democrats have waited too long. We've been willing to compromise all along. Look, you've got a situation here where the president has gotten 90 to 95 percent of his appointees, and he basically wants 100 percent. We understand that he wants 100 percent, but when you look at the judges that he is seeking to reappoint, they aren't the kinds of judges that are well in the mainstream of American legal thinking. And so We've said that we're willing to give on a couple of these judges, but it doesn't make sense for us to simply give away our prerogatives to advise and consent. That's the job of the Senate. It always has been.

WOODRUFF: Senator Thune, if the Democrats are prepared to compromise, why shouldn't your party?

THUNE: Well, it's probably -- wouldn't come as any surprise to you, Judy, that Barack and I disagree issue. But, when it comes to appellate court nominees, this president has the worst confirmation rate of any president in recent history, and, in fact, the 10 that he submitted in the last Congress, he's resubmitted seven of those names. These are people who are extremely well-qualified for the bench. They're people who have gotten wide support from their states. Priscilla Owen (ph) got an 84 percent rating in Texas. Janice Rogers- Brown (ph), 76 percent vote in California. These are people who deserve an up and down vote in the United States Senate.

I think people across the country see this as an issue of fairness. These people put their good name forward for public service. They deserve to be voted on, and they're being held up in the Senate. We think that's wrong.

WOODRUFF: If it's that clear, Senator Obama, what -- why can't this get straightened out?

OBAMA: You know, I think this actually can get straightened out, if there's a little give on the other side. Look, the -- everybody thinks that we should have a judicial confirmation process that is more civil than the one that exists right now. I mean, keep in mind, President Clinton had 60 of his judges bottled up under some of the same leadership that is now complaining about fairness in up and down votes.

Historically, there has been an effort on the part of the president to come to the Senate, of both -- and come to the senators from both parties, and say, let's put together a list of people who, admittedly, are going to be conservative because we have a conservative president, but who also fit within the mainstream of judicial thinking. And that, I think, is the kind of approach we should take this time out. If we do, I think that we can put some of these bitter judicial nomination issues aside and get to the business of healthcare and education and some of the things that both John's constituents and my constituents sent us here to work on.

WOODRUFF: All right.

Senator Thune, I want to turn you both to the subject of Social Security. President Bush has been talking about private accounts, personal accounts, for many days now, many weeks, and, apparently, right now there's not even agreement among your own party, among Republicans. What does this mean for the president's initiative, for his proposal for reform?

THUNE: Well, first of all, right now they are holding hearings up here in the Senate Finance Committee. Senator Grassley has convened hearings on the subject. Frankly, I think what he's saying is the correct approach, and that is that everything ought to be on the table. The president has come forward with some concepts, some proposals that he's put forward, and right now, what we're waiting for, is for the Democrats to come up with some alternatives.

I think it's fair to say that we have a problem. Everybody acknowledges that. The question is, how are we -- what are we going to do to solve it? And, as of right now, the only people who are leading with any solutions or any suggestions about how to address the long-term solvency of Social Security, are folks on our side. And I think, frankly, that if we're going to have a spirited debate on this issue, and I think we should, it has to be a two-way debate. And, just suggesting not-doing-anything is not a solution. It's a choice, but it's a bad choice.

This is a problem that needs to be addressed. If we don't address it now, we pile mountains and mountains and mountains and trillions of dollars of debt on future generations, on our children and grandchildren. That's why I think people in this country expect the Congress to lead on that. It is going to require some bipartisan cooperation if we're going to get this done.

WOODRUFF: Well, Senator Obama, is that -- is Senator Thune right, that Democrats are just saying no and not bearing their own responsibility in all this?

OBAMA: You know, actually, it's not the Democrats who are saying no, it's the American people who are saying no. I mean, the president's been trying to sell this thing for 60 days now, and the support for it gets worse and worse. The reason is that the American people understand Social Security is that bedrock social insurance that makes sure we don't have seniors in poverty, that people in disabilities are not going to be impoverished, that people who survive the loss of a spouse are not going to be impoverished.

And, by the Republicans own admission, the president's plan doesn't solve the problem -- the solvency problem. The president's own officials have stated that privatization doesn't shore up the system. It, in fact, adds an extra $2 to $5 trillion worth of debt. John and I are both concerned about debt. I'm assuming John doesn't want to compound that debt with a privatization plan as has been put forward. So, what we've said is very clear, Judy. What we've said is, let's take privatization, which is not going to solve solvency, off the table, then let's come together in the spirit of bipartisanship, the same way that Tip O'Neill and Ronald Reagan came together in 1983 and solved the problem.

WOODRUFF: Let me ask you both about something my colleague Bill Schneider just raised, and that is, the American people right now are looking at issue after issue in Washington, from the judges to Social Security to John Bolton, you name it, and they're seeing disagreement. They're seeing gridlock. They're not seeing a lot of work getting done.

Senator Thune, are you worried that both parties, and I mean, including the leadership Republican party, are going to be hurt by this lack of progress in Washington?

THUNE: I think that what we're doing -- and I think the American people realize this, whether or not they agree with the direction -- is that we are providing leadership. We're providing solutions. And as Barak mentioned, we're both very interested in moving an agenda that includes a highway bill, a energy bill, solutions to Social Security, but right now, inasmuch as the Democrats are not in favor of what we put forward, they're not offering alternatives. I think the American people want to see us work constructively in a bipartisan way to solve the issue.

But I will say this, Judy: I do think this issue on judges is important. If we do away with 214 years of precedent in American history, and now say that we are going to require a 60-vote majority to approve any Supreme Court or any appellate court nominee, that will be breaking with 214 years of precedent. That's wrong.

OBAMA: Judy, I don't want to squabble on this, but I just want to make sure we get the history right on this. Every president has not had up or down votes on judges; that's the 200 years of history that we're talking about. And, the Republicans are essentially saying they are going to change the rules midstream in a way that is unprecedented. Even the advocates of the so-called nuclear option has said, this will be an unprecedented step where we're going to change the rules in midstream. But going back to your earlier point -- which I think is right -- let me give you an example of something that we're not talking about.

WOODRUFF: Very quickly.

OBAMA: Healthcare is an issue that, every town hall meeting in South Dakota or Illinois, people are talking about. We don't have a proposal on the table for that right now. I'd love to work with John Thune on that, but we're going to need leadership on both sides that actually will work on it.

THUNE: (INAUDIBLE)...health plan.

WOODRUFF: Well...

THUNE: We put a proposal out there. We're waiting for the Democrats to come out with something. We've got solutions out there.

WOODRUFF: I would love to ask you both if this is what you came to Washington to do, to fight with the other guys, but we're going to have to...

OBAMA: John and I...

THUNE: We came here to debate.

OBAMA: We're going to pass some bills together, no doubt about it.

THUNE: Absolutely.

WOODRUFF: All right. We hear you. Senator Thune, Senator Obama, very good to see both of you. We appreciate it.

THUNE: Thanks, Judy.

OBAMA: Thank you.

WOODRUFF: Thank you.

So, two top Republicans, meantime, and talk of 2008, up next. "Political Bytes" concerning the future plans of New York Governor George Pataki and Pennsylvania Senator Rick Santorum.

(COMMERCIAL BREAK)

WOODRUFF: A Senate Republican locks up Internet real estate in today's political bytes. A media firm, linked the Republican Rick Santorum of Pennsylvania, has purchased several Internet domain names including ricksantorum2008.com. According to "The Hill" newspaper, New Media Communications purchased the domain names. The same firm already runs the Web site for the Santorum's 2006 Senate campaign.

New York governor George Pataki is also mentioned as a potential presidential candidate. And he's doing little to quell the speculation. In today's "New York Times" Pataki is quoted as saying he wants to be part of the quote "policy debate" in 2008. When asked if he's thinking about shaping the debate as a candidate he said, quote, "I'm not thinking along those lines at this point." Moments later he noted, quote, "I'm not ruling it out."

In the New York City mayor's race, incumbent Republican Michael Bloomberg has staged a come back of sorts in the latest poll. A Marist College survey shows that Bloomberg now leads Democrat Fernando Ferrer by 13 points in a hypothetical match-up.

Just last month he trailed Ferrer by seven points. Bloomberg also leads three other potential Democratic hopefuls in the same Marist poll.

So who is winning the back and forth over judicial filibusters? Our blog reporters are standing by with a look at how people online view the political standoff. (COMMERCIAL BREAK)

WOODRUFF: Judicial filibusters of all things are on the minds apparently of a lot of bloggers these days. Let's check in now with CNN political producer Abbi Tatton and Jacki Schechner, our blog reporter. Jackie, I guess they don't have anything better to talk about.

JACKI SCHECHNER, CNN BLOG CORRESPONDENT: Oh, this is a good one, Judy, don't say that.

WOODRUFF: I'm teasing. I'm teasing. I'm teasing.

SCHECHNER: The fight for and against the filibuster continues in the Senate as Minority Leader Harry Reid offers up a compromise and Majority Leader Bill Frist says no thank you.

It's good or bad depending on who you read in the blogs. We start over at Dark Parlor at blog.darkparlor.com. Reid turns filibuster issue around on GOP saying that Harry Reid just punked Bill Frist by getting him to appear stubborn and uncompromising. And that's exactly how the media is posing the headline.

Then over at another pejmanesque.com, it is Pejman Yousefzadeh in he is a libertarian conservative. And he wrote an open letter to Majority Leader Bill Frist just yesterday saying two judges ain't enough to get you to back down. You can do a whole heck of a lot better. So, today he's wondering if Frist actually reads his blog. Saying not likely, but he says that he has no doubt that eventually some kind of deal will be made and he says that any deal that occurs will be on Republican terms. So optimistic over there.

ABBI TATTON, CNN POLITICAL PRODUCER: Conservative at redstate.org are debating whether this failed compromise, what it means politically for Republicans and for Democrats alike. Redstate.org is a community web log. Anyone can go along there and post. They have terms there. You can't post if you have an anti- American agenda. You can read all about it. No Nazis or communists aloud to post here. But really anyone can go along there and put their point of view.

Lots of conservative views. And a debate going on about these filibusters. What does this mean, the failed compromise? Dems wobbly on judicial filibuster, that's the view of one. Not so fast, say others.

This one here is from econradical posting there. Let me be the first to call for Frist to resign, saying this in fact was a very shrewd political move by Senator Reid.

The Democrats proffered compromise is just the latest nail in Dr. Frist's coffin. Reid and the Democrats have shrewdly established the terms of this fight and Frist has stumbled into every one of their traps.

SCHECHNER: Now over on the House side, the Republicans do seem to be budging just a little bit. They've offered to rescind at least one rule change that came up in January that's been stalling the Ethics Committee. Now with that they might be able to put the Ethics Committee back into action and look into Tom DeLay's ethical violation -- or the accusations of ethical violations.

So over at glitnir.blogspot.com -- or GLitnir, it's tough to tell without an about section -- they have a wonderful analogy about a kid getting his hand caught in the cookie jar and pulling out three cookies and then giving one back. And at the bottom of the post they say the Republicans still have two cookies in their pocket. And until they relinquish those, they are going to stay in time out.

So, an analogy that will resonate with anyone who has kids or has ever babysat kids.

TATTON: The blogosphere is a place for discussions. It's a place for conversation. It's not just where people post, but it's really where they engage in debate usually amongst bloggers themselves, but today a Senator seen gauging in the debate over at Daily Kos.

This is Senator Russ Feingold. This is also being talked about at OneStopViewShop.blogspot.com. You can see the senator there.

Daily Kos asked the senator to co-sponsor a piece of legislation designed to protect bloggers and the Internet from regulation and campaign finance laws. And Feingold went on the site and started discussing this.

Now I wanted to show you what exactly he's been saying, but routine maintenance prevents me from doing so right now. So, I'll show you another picture of the senator.

But this is very popular with the bloggers. They like the fact that a lawmaker is coming on and engaging and debating. And they are even questioning is this one of the first times.

SCHECHNER: Yeah. Getting kudos from NJforFeingold.org. As far as I know, this is unheard of. A current member of the United States Senate, not their staff, engaging in an active blog discussion. Feingold has blogged before but to actually be involved in the back and forth in the living and breathing blogosphere they think, a first.

TATTON: Kos sums up very nicely, Feingold didn't come here to give a speech, shake some hands, soak in the applause and leave, he legitimately engaged. We'll see if more lawmakers do this, Judy.

WOODRUFF: That's right. Because we assume they are busy all day long. And it takes time to sit down at your laptop and start pounding out those notes.

All right, Abbi, Jacki, thank you both. We'll see you tomorrow.

That's it for INSIDE POLITICS this Wednesday. I'm Judy Woodruff. "CROSSFIRE" is next.

END

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