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JUDY WOODRUFF'S INSIDE POLITICS

Phase II of Bush's Social Security Roadshow

Aired May 3, 2005 - 16:00   ET

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


(BEGIN VIDEOTAPE)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And that's exactly why I'm sitting here today in Canton, Mississippi: because I see a problem in Social Security.

ANNOUNCER: Phase II of the president's Social Security roadshow. Will he have more success selling reform this time around?

Iraq gets a new government, but that doesn't seem to be helping George Bush or Tony Blair. We'll have the latest on Iraq politics in the U.S. and in Britain.

Preaching success.

JOEL OSTEEN, LAKEWOOD MINISTRIES: This year will be a year of your unprecedented favor. That we will see promotions, bonuses.

ANNOUNCER: We'll meet a minister with a message that's made him and others rich.

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

(END VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. A quick search of the Internet shows you can do a lot of things in 60 days. You can clean up your credit, sell your home, or return merchandise, hassle-free. But as President Bush has learned, a two-month timeframe apparently is not enough to sell Americans on a major overhaul of Social Security. That's why Mr. Bush is back on the road today, promoting a slightly more detailed version of his reform plan.

CNN's Andrea Koppel traveled with the president to Canton, Mississippi. Hi, Andrea.

ANDREA KOPPEL, CNN CORRESPONDENT: Hi, Judy. You know, directors in Hollywood do this all the time. They don't like a take and they yell cut, and then that guy comes out and claps the board and they start all over again. Well, that's kind of what President Bush is doing here.

His first part, you could say, the first act was the 60-day, 60- stop tour of the U.S., his barnstorming to try to sell not just the idea that you need to reform Social Security, but how to reform that. That didn't go over so well. The American people didn't seem to latch onto some of the president's ideas. That is why the president came to Canton, Mississippi, today, to this Nissan manufacturing plant, where they build all kinds of cars and trucks and what not. And that's why he spoke to the audience that he did today, hundreds of Nissan workers and others here in Mississippi. A lot of these folks are going to be affected in a big way if Social Security isn't there for them, as the president claims it won't be for after 2041.

And the president laid out again some of his ideas, really saying that under his plan, younger workers would get an opportunity to take a portion of the money that would have gone from their Social Security taxes, their payroll taxes, and they get to invest that into stocks and bonds.

(BEGIN VIDEO CLIP)

BUSH: I've got another idea that I want Congress to consider. And that is being able it take some of your own money, your pay roll tax that you pay in the system, and the government allow you to set up a personal savings account. First of all, it's your money that you send into Washington. It's not Washington's money.

(END VIDEO CLIP)

KOPPEL: But back in Washington, Democrats fired back, saying that under the president's plan, that is a far cry from actually saving Social Security.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), MINORITY LEADER: Many of us view this assault on Social Security as a way to destroy it. This is a -- privatization is a nail in the coffin of Social Security. Make no mistake about that.

(END VIDEO CLIP)

KOPPEL: But according to the latest "USA Today"/CNN poll, many Americans are not convinced by what the president has to say. And actually what the Democrats are saying seems to be resonating. The latest numbers show that only 35 percent approve of the way the president is handling Social Security reform, 58 percent disapprove.

Now under what president is saying he'd like to do, Judy -- he wants to get something before Congress, a piece of legislation, sometime before the year wraps up. And what is unspoken here is the fact the president recognizes that a year from now, you're going to have a lot of folks who are out on the campaign trail with mid-term elections there. And the president recognizes that he has a very narrow window to try to push this centerpiece, really, of his second term through -- Judy.

WOODRUFF: And we know he's trying to shake things up here in Washington by making these trips around the country. All right. Andrea Koppel. She's in Mississippi today. Thanks very much. Well, House Ways and Means Committee Chairman Bill Thomas is working to hammer out details of the Social Security bill by June. I'll talk to Thomas in a few minutes about that challenge. And we'll get an opposing view from the panel's ranking Democrat, Charlie Rangel.

Now we turn to the situation in Iraq and the political consequences in this country. Most of the Iraqi politicians named to head ministries in the transitional government were sworn in today. But the latest steps toward democracy were clouded by insurgent attacks, which have increased since the new government was announced last Thursday.

The violence and uncertainty for U.S. forces appear to be taking their toll on public opinion in this country, as our national correspondent Bruce Morton reports.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): American support for the war in Iraq has slumped. Asked "Do you think it was worth going to war in Iraq or not?" 57 percent in our latest CNN/"USA Today"/Gallup poll said no, 41 percent yes. Back in February, only 50 percent said no. Asked "How would you say things are going in Iraq?" only 42 percent said well, a 10-point drop from March. 56 percent said it's going badly, against just 45 percent in March.

The reasons seem clear. The January elections were a big success, violence declined, maybe democracy would break out. But the weeks after that were less cheerful. Forming a government were tough. The one sworn in today has major ministries still vacant, no agreement on which faction should get which job. And violence is back up. One recent four-day period saw 116 deaths, including 11 U.S. soldiers. Violence is back to pre-election levels.

And a senior military officer tells CNN General Richard Myers, the chairman of the Joint Chiefs of Staff, has told Congress in a classified report that the concentration of U.S. troops and weapons in Iraq limits the Pentagon's ability to deal with any new conflicts somewhere else. "Intervention in some new fight," the military official quotes the report as saying, "might take longer and produce more American and civilian casualties because of resources needed for Iraq and Afghanistan."

General Myers is quoted saying the U.S. would win any major fight, but it's a more qualified answer than the one President Bush told his news conference last week he gets from the general.

BUSH: Do you feel that we've limited our capacity to deal with other problems because of our troop levels in Iraq? And the answer is, no. He doesn't feel we're limited. He feels like we got plenty of capacity.

MORTON: The country is divided. Almost half, 49 percent, think it was a mistake to send troops to Iraq. Almost half, 48 percent, don't. But we've been even more divided in the past. Back in 1973, 63 percent of Americans thought it was a mistake to send troops to Vietnam and that's one reason the government finally brought them home.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Iraq is also a political thorn in Tony Blair's side. As the British prime minister campaigns for re-election, our Bill Schneider will have a report from London, ahead.

While we're on the subject of Iraq, journalists who were killed around the world last year were honored today at a ceremony inside Washington at the Freedom Forum. It was in Iraq where a third of the journalists who were killed in the line of duty died last year. There were 25 of them. The total number of journalists killed around the globe: 78 last year, one of the largest numbers since records were kept.

I was honored to speak at today's ceremony. It was a rededication of the Journalists Memorial on this World Press Freedom Day. We noted that so many more journalists now are being targeted, and the people targeting them, the killers, are getting away with impunity.

We focus now on the race to '08 and some potential White House hopefuls. In today's "Political Bytes," Virginia Republican Senator George Allen is in New Hampshire today. Officially, he is raising money for his Senate re-election campaign. Allen's manager -- campaign manager, tells "The Richmond Times-Dispatch," that Allen has held fundraisers in eight states outside of Virginia so far this year.

Republican governor Haley Barbour was on hand today when President Bush traveled to Mississippi. A nice photo op for a governor increasingly mentioned as a possible White House candidate.

Also worth noting, a former business and lobbying partner of Barbour recently registered the Web address hayleyforpresident.com and hayley2008.com.

And in New York today, another dark horse GOP presidential hopeful was in the public eye. Arkansas governor Mike Huckabee, who recently lost more than 100 pounds, helped former President Bill Clinton kick off a ten-year initiative to fight childhood obesity.

Well, if you think politics and religion should not mix, then you may embrace the gospel being preached by Joel Osteen. Up next, we will profile this mega-church minister for his pray for success sermons.

Also ahead, the drive on Capitol Hill that would make it tougher for many people to get driver's licenses.

And later, a made-for-TV moment with Arnold Schwarzenneger.

(COMMERCIAL BREAK) WOODRUFF: There's been a lot of talk lately about religion and politics here in Washington, and whether the two are more intertwined than ever. Our latest poll shows 43 percent of Americans think their religious right has too much influence over Republicans in Congress. Most of the rest think that influence is either too little or about right.

In Texas, a popular minister makes a point of leaving politics out of his sermons. Instead, he is preaching and practicing a unique brand of can-do capitalism.

(BEGIN VIDEOTAPE)

OSTEEN: ...says I am. I have what it says I have. I can do what it says I can do.

WOODRUFF (voice-over): He's the new-age preacher who brandishes his Bible as the ultimate self-help book, with God as every man's personal financial adviser.

OSTEEN: We just thank you that this year will be a year of your unprecedented favor, that we will see promotions, bonuses, that you will open up doors that no man can shut.

WOODRUFF: A simple, straightforward message that has turned this unassuming Texas pastor into America's number one-rated televangelist, with millions of fans world wide.

CHOIR (SINGING): Gotta open up your heart and give him praise...

WOODRUFF: From the pulpit of Houston's nondenominational Lakewood Church, before the largest and one of the most racially diverse congregations in the country, Joel Osteen's preaches a user- friendly gospel of prosperity and optimism.

OSTEEN: And, if you believe it, shout amen. Amen? Amen.

WOODRUFF: Lakewood Ministries is a family business. There is Joel's mother, Dodi (ph).

UNIDENTIFIED FEMALE: Did you know people will deceive you? They will fail you, but Jesus never will.

WOODRUFF: His brother, Paul.

WOODRUFF: His glamorous wife, Victoria, who's become nearly as big a celebrity as her husband.

UNIDENTIFIED FEMALE: So, if you need a little boost in the area of joy today, open your heart.

WOODRUFF: Looming large over the sanctuary, the shadow of the late televangelist, John Osteen...

JOHN OSTEEN, LATE FOUNDER, LAKEWOOD MINISTRIES: Ha, ha, devil! WOODRUFF: ...who, in 1959, founded Lakewood in an old abandoned feed store. Forty years later, when he was too sick to preach himself, John Osteen asked his son to take over, but Joel, a shy college drop-out hesitated. More comfortable behind the camera than in front of it, he wasn't sure his place was at the pulpit. But ultimately, he answered the call. This was the first sermon he ever preached.

OSTEEN: If I'm really bad and you don't enjoy it, when you walk out of here, you can say, you know, that boy has nowhere to go but up.

WOODRUFF: He was so nervous, he wore his father's shoes.

OSTEEN: I did. I wore it for the first year that I spoke, that whole year of 1999, and I don't really know why I did it. I just did it and it just felt right.

WOODRUFF: In that first year, he says, Lakewood's membership exploded, booming from 6,000 to 20,000. Today, it hovers around 30,000.

UNIDENTIFIED FEMALE: Hello, how are you doing?

UNIDENTIFIED FEMALE: How are you.

UNIDENTIFIED FEMALE: Enjoy! Thank you.

WOODRUFF: Friday night in Sunrise, Florida.

Deep inside a cavernous arena, Joel Osteen plans to prepares to morph into a spiritual rock star. He spends a little quiet time alone, prayer time with the family.

UNIDENTIFIED MALE: Father, I pray a special anointing on Joel. I pray, father, that it would be easy for him to minister.

WOODRUFF: Then it's time to face another sellout crowd.

Damio and Marie Claveria (ph) and their friends Don and Joanne Jones (ph) drove three hours see Osteen. That afternoon, they are among the more than 600 fans lining up to get him to sign his best- selling book, "Your Best Life, Now."

UNIDENTIFIED MALE: His messages are down to earth. Instead of being Biblical or scriptural, they are more of a daily activities that you do.

UNIDENTIFIED FEMALE: How are you?

UNIDENTIFIED FEMALE: Good, and you?

UNIDENTIFIED FEMALE: Good.

WOODRUFF: Heady day for Joanne Jones: meeting the Osteens, worshiping among the thousands, emotions spilling out. UNIDENTIFIED FEMALE: Very blessed. Very blessed that God allows me to be part of him. Just very touched tonight. He's human, and he's just so blessed and inspired by the Lord.

WOODRUFF: And there's a practical side to the Osteen family message -- Joel's sister Lisa spread that word in Florida.

UNIDENTIFIED FEMALE: Just pray that you would open up the doors for them to have well-paying jobs with full benefits, father, in the name of Jesus.

WOODRUFF: Osteen says the lord speaks to anyone who is willing to listen.

OSTEEN: We don't have to make hearing from God and staying in his will some super-spiritual or even some difficult thing. We've just got to learn to follow our heart.

WOODRUFF: But critics says it's all just cotton-candy Christianity: tasty, but little substance. There is no fire and brimstone at Lakewood, no talk of sinners or Satan. No talk of politics, abortion, gay marriage.

OSTEEN: I don't know if I want to go there, you know? I just, you know, I'm for the -- I don't even know where to go. I haven't really addressed it much.

WOODRUFF: Nothing at Lakewood that's not upbeat and that's just how Joel Osteen likes it.

OSTEEN: So many negative things pulling us down and, you know, there's so many reasons to get discouraged and just to get caught in the routine in life. You have to realize that, you know what, there are good things in store. God has got a great plan for each one of us.

WOODRUFF: Joel Osteen is a rich man. With his book selling so well, the church says he's foregoing his $174,000 salary. In all, Lakewood reports bringing in $48 million last year, and Osteen's using that money to make the biggest church in the land even bigger.

OSTEEN: Well, this is going to be the 16,000 seats.

WOODRUFF: The church is moving into Houston's Compaq Center. The Houston Rockets played here, the Rolling Stones, too. And before long, Joel Osteen expects to fill all 16,000 seats, four times a week.

OSTEEN: I'd think that one day that we could have a congregation at our new facility of 100,000 people.

We're on the winning side, like we're singing about!

WOODRUFF: Big dreams for the smiling preacher who's optimism knows no bounds.

OSTEEN: Thank you for coming out. (END VIDEOTAPE)

WOODRUFF: His is quite a story.

Using driver's licenses to fight terrorism. Up next, a new measure moving through Congress would require proof of citizenship and place other new restrictions all on drivers in all 50 states.

(COMMERCIAL BREAK)

WOODRUFF: On the CNN Security Watch, members of Congress could reach an agreement as soon as today on legislation which places nationwide restrictions on people applying for driver's licenses. The House is expected to vote later this week on a bill that would require residents in every state to provide proof of citizenship and proof of a Social Security number in order to obtain a driver's license. The Senate could vote on the measure as soon as next week.

Stay with CNN day and night for the most reliable news about your security.

It has been a very bloody week in Iraq. We have seen how the increased violence over there is affecting public opinion about the war back here. But what about in Great Britain? Will Iraq be the issue that could prevent Tony Blair from winning a third term as prime minister? We'll go live to London to find out.

Plus --

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The system didn't provide enough for her to retire on.

UNIDENTIFIED FEMALE: Just another desperate housewife. (Laughter.)

(END VIDEO CLIP)

WOODRUFF: A lighter moment over Social Security today. But the fight over the president's overhaul plan is no laughing matter. I'll talk with the top House Republican and the top Democrat on the Ways and Means Committee about the chances for a bill this year.

(COMMERCIAL BREAK)

WOODRUFF: It's a couple of minutes before 4:00 in the afternoon. 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." Hello, Kitty.

KITTY PILGRIM, CNN ANCHOR: Hi, Judy. Thanks. We had a pretty volatile day on Wall Street. Stocks ending mostly lower. Let's take a look. Down Industrial right now, well, down about 14 points. It came back a bit just at the end. Nasdaq flat. Oil prices today below $50 a barrel, $49.50. Not much below. Let's talk about the Fed. The Fed said it would move interest rates up a quarter point to 3 percent. That's the highest level for the Fed Funds Rate since just after the September 11th terrorist attacks. Today's decision was expected. But it also tells us that the Fed is concerned about inflation.

And here's an immediate problem that's real. More than a million GM trucks and SUVs may be out on the road with bad brakes. Transportation officials are investigating certain GM vehicles in states that salt their roads during the winter, and the concern is that salt corrodes the vehicles' anti-lock brakes. It makes it harder to stop.

Here are some of the vehicles involved in the investigation: the Chevrolet Suburban, GMC Sierra, the Cadillac Escalade. And GM has not yet announced an official recall.

Boeing and Lockheed Martin have agreed to a joint venture to build and launch rockets for the Pentagon. Together, the companies will send military and spy satellites into space. Now the Pentagon has long hoped for this partnership, but the two firms have been in a legal brawl. That was after Boeing was caught stealing Lockheed documents.

Coming up on CNN, 6:00 p.m. Eastern on "LOU DOBBS TONIGHT", Exporting America. Many companies say they're struggling to find good employees.

(BEGIN VIDEO CLIP)

GREG CHAMBERS, OBERG INDUSTRIES: We're a high-provision industry. That's our niche market. So it's not just enough to have a person be able to run a machine. They have to run a machine at a certain speed. And we hold tolerances down to millionths of an inch. So you can't teach that overnight.

(END VIDEO CLIP)

PILGRIM: Also tonight, "Broken Borders." Construction is one of the industries that relies heavily on an illegal alien workforce. We have a special report on that.

And then Senator Carl Levin joins us to discuss North Korea's growing nuclear threat.

Plus, Senator Norm Coleman will join us to talk about his investigation into the oil-for-food scandal at the United Nations. That and more, 6:00 Eastern on "LOU DOBBS TONIGHT."

But for now, back to Judy Woodruff -- Judy.

WOODRUFF: Thank you, Kitty. We will be watching. Now it's back to INSIDE POLITICS.

So who needs to wait until 2008 or even 2006? This is prime campaigning season in Great Britain. Tony Blair's Labor Party is favored to win Thursday's vote, but after two terms, Blair's future as prime minister is in doubt anyway. That is due in large part to the anger within his party over his Iraq War policy.

As our senior political analyst Bill Schneider reports from London, Iraq is back on the front burner in Britain.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Shame on you! Hypocrites!

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Suddenly in the last few days of Britain's political campaign, the Iraq War issue has erupted.

UNIDENTIFIED FEMALE: You better not the shake the hands of a killer.

SCHNEIDER: A leaked report revealed that Britain's attorney general had expressed serious doubts about the war's legality. This week, another British soldier was killed in Iraq, the 87th. His widow went on TV.

UNIDENTIFIED FEMALE: If it wasn't for you, today my children would still have their father today. And I really do blame him for that.

SCHNEIDER: Public criticism of the war has been mounting. A majority of the British now feel the war was wrong. Blair's conservative opponents, who supported the war, are attacking Blair for the way he did it. If he's prepared to lie to take us to war, they say, he's prepared to lie to win an election. Some war critics have left Blair's Labor Party.

BRIAN SEDGEMORE, DEFECTED FROM LABOR PARTY: I only did it after waking up night after night saying, why am I staying in a political party when I no longer go along with their fundamental beliefs?

SCHNEIDER: Blair is the target of Internet mockery.

INTERNET CARTOON VERSION OF TONY BLAIR (singing): I was told there were weapons hidden underneath the sand.

SCHNEIDER: The Iraq issue in Britain has become a debate over Tony Blair's character.

PETER KELLNER, BRITISH POLLSTER: The biggest thing is not so much whether it is right or wrong, but the way it is now widely felt that Tony Blair did not tell the truth.

SCHNEIDER: The prime minister is treating the issue like a marital disagreement. We've had a spat over Iraq.

TONY BLAIR, PRIME MINISTER OF GREAT BRITAIN: And then, all of a sudden, there you are, the British people, thinking, you're not listening. And I think you're not hearing me. And before you know it, you raise your voice, I raise mine. Some of you throw a bit of crockery.

SCHNEIDER: Blair is asking the British people to take him back.

BLAIR: And now, you, the British people, have to sit down and decide whether you want this relationship to continue.

(END VIDEOTAPE)

SCHNEIDER: A political leader strays and is seen as lying about it. Voters think he's doing his job and so they take him back. Americans are familiar with that scenario, but there's a difference. In Bill Clinton's case, it was about a private affair. In Tony Blair's case, it's about a war -- Judy.

WOODRUFF: Bill, why is Prime Minister Blair being -- having a harder time over Iraq than President Bush has had?

SCHNEIDER: Well, it's interesting, because his principle opponents, the conservatives, supported him on the war. I think it is precisely the fact of the revelations that he misrepresented the evidence, the weapons of mass destruction were not there.

What's interesting is, in Tony Blair's case, his argument for war was based squarely on the existence of the weapons of mass destruction. The failure to find those weapons has been politically devastating to him. In Bush's case, while the weapons of mass destruction were important to his argument, most Americans thought there was another justification and that, they believed, was 9/11.

WOODRUFF: Now, Bill, we know that Tony Blair is running almost side-by-side with the chancellor of the exchequer, a man named Gordon Brown. That's the top -- it's sort of the equivalent to the treasury secretary here in the United States. Financial or economic adviser to the prime minister. Gordon Brown, how is he factoring into this election?

SCHNEIDER: He's running with Blair as a team for good reason. Because Blair has pledged this will be his last election. If he -- if the Labor Party wins, Blair is widely expected to turn over power to Gordon Brown, the chancellor of the exchequer. Brown is the most popular figure in British politics. Blair is one of the less popular, one of the least popular, figures. So a lot of people think if they vote for Blair, they'll get Brown.

Interestingly, when Brown was asked if he would have done anything about the Iraq War different, he said, no, he would not have. Nevertheless, in Blair's case, Iraq is the issue that hangs around his neck. In Gordon Brown's case, his issue is the economy, which is booming here in Britain.

WOODRUFF: All right. Bill Schneider. We're going to give you plenty of time to talk about this election over the next few days. Thanks very much. Bill Schneider joining us from London.

Well, back here in Washington, House Republicans are preparing to turn President Bush's Social Security overhaul plan into actual legislation. I'll talk to Ways and Means Committee chairman Bill Thomas in a moment.

But first, we are joined by the panel's ranking Democrat. He is Congressman Charlie Rangel of New York. Congressman, good to see you again.

REP. CHARLES RANGEL (D), WAYS & MEANS CMTE: Good to be back.

WOODRUFF: Congressman, Bill Thomas, who's the chairman of your committee, says -- it doesn't matter what they put out, because Democrats, including you, are 100 percent opposed to any changes in Social Security. Is he right?

RANGEL: I'm glad that Mr. Thomas is talking to somebody, because he certainly hasn't talked to me about Social Security. The only way we got to resolve this problem, and a problem it is and not a crisis, is by having a bipartisan conversation, some discussions on this. The president has gone around the country beating up on us. Now Thomas disagrees with the president. He has a plan, but he's not sharing it with us. And so I wish that we do more talking and less screaming at each other.

WOODRUFF: Well, Congressman, now that we're hearing more details from the president, isn't it time now for the Democrats to come out and say this is what we want? Why are the Democrats so reluctant to say?

RANGEL: Well, we don't want to go in with certain things that are going to be on the board. That's going to dismantle Social Security. The first thing that we want to do is to make certain that when we go into a room, we all are saying we want to save Social Security. The president is saying that he wants to welfare it. That if you make over $20,000, you got to take a Social Security benefit cut. And if you are poor, then you'll get something. That's changes the whole concept. It's no sense going in that way.

He also wants to put on private accounts. And private accounts has nothing to do with saving Social Security, but has everything to do with dismantling it. So if all of these things are going to be on the table, we want to say this. Show the things that are necessary to make it solvent. Even though there's going to be political pain, we Democrats want to meet with Republicans. But no House Republicans are discussing this with Democrats on the committee. And the president has not presented us with a bill, but a lot of ideas.

WOODRUFF: Congressman, let me show you some poll results that we've done here. "USA Today"/CNN/Gallup poll. We know that Americans are worried that Republicans may go too far in reforming Social Security, but look at this. 61 percent say they are also worried that Democrats won't go far enough.

RANGEL: Well, let me say this. It's the Medicare program and the war that is the crisis that we have on our hands. Any -- and everyone is telling you if we did nothing, the program would be able to pay out everything until 2052. That's the congressional budget office. Whether we've done a poor job in educating our constituents -- I don't think we have -- but if that's what the polling says, we got to do more work.

The only time that we have a problem to solve is when the people come together. The president of the United States should give us more leadership than just saying there's a problem. We know there's a problem, but he hasn't given us a package or bill to work with.

WOODRUFF: Well, he has...

RANGEL: I'm sorry.

WOODRUFF: I just to want to say, he has outlined, in the news conference, the speech he gave last week, this new idea. In fact, it's an idea that came from a Democrat, an economist, Mr. Posen. You know that under the president's proposal, benefit payments for low wage workers would stay linked to wage growth. Benefits for higher workers would be linked to lower wages. But my question is, this is a plan that would protect low-income Americans. Why isn't this something Democrats can embrace?

RANGEL: Because first of all, if he's a decent economist, he should not be known to be a Democrat or Republican. An economist is supposed to be able to give the facts as to what is good in presenting their case. Second, if you're going to separate people over $20,000 and people who earn less than $20,000, that is a lousy plan. You are -- they call it means testing, but what you're doing, you're making this a welfare plan. And Americans...

WOODRUFF: But...

RANGEL: ... are sophisticated enough to know that if you separate them from the wealthy, that this plan doesn't stand a ghost of a chance in being supported by a Congress.

WOODRUFF: Yes or no, can the president get something out of the Congress this summer?

RANGEL: I don't know what Mr. Thomas is up to. He's the chairman of my committee. I don't know what Senator Grassley's up to, but we're anxious to work with them.

WOODRUFF: All right. Well, we'll have a chance to ask Mr. Thomas in just a minute. But right now, we are so glad to talk with you. Congressman Charlie Rangel of New York. Thanks very much.

So can the House produce a Social Security bill sooner rather than later? Up next, I will ask Ways and Means Committee chairman Bill Thomas about his timetable and the Democrats' complaints -- you just heard some of them -- about the president's plan.

Also ahead -- when the going gets tough, Governor Schwarzenegger turns to TV.

And later, a bit of Britain, and a finger found, when our reporters take us inside the blogs.

(COMMERCIAL BREAK) WOODRUFF: We just heard from Democratic House Member Charlie Rangel on the issue of Social Security. With me now to offer a Republican view is Representative Bill Thomas of California. He's the chairman of the influential House Ways and Means Committee.

Mr. Thomas, good to see you again.

REP. BILL THOMAS (R), CHMN. WAYS AND MEANS CMTE: Nice to see you, Judy.

WOODRUFF: We just heard Congressman Rangel say Democrats are not required to come forward with their own plan. He said, we want the Republicans to work with us, and they're not willing to do that.

THOMAS: Well, not only do they say they are not required to come forth with their own plan, but they're telling us what we have to leave at the door and we can't bring to the table to discuss. So, I think it's just the same-old, same-old. Their position, really, is the same one they've always had, and that is, they secretly -- they've learned not to talk about it -- is to raise the payroll tax. That's where they were in 1983 and that's where they are today.

WOODRUFF: Let me ask you about what Republican Senator Trent Lott said today. He was in Mississippi where the president traveled today to talk about Social Security. He was asked about the president's new formula of changing the indexing of Social Security so that the benefits would slide for those in the middle and upper income levels. He said, "I'm not overjoyed because it does begin to move in the direction of a welfare plan." Do you agree with him?

THOMAS: Well, it depends on how you structure it. Although the president mentioned Mr. Posen (ph) and the idea of a progressive payout in terms of benefits, there are a lot of other adjustments that, frankly, need to be made to Social Security. And, when you take it as a package, the percentage that you rely on to solve the solvency problem is not nearly as great as Mr. Posen proposes in his particular plan. But, it's an idea that certainly ought to be looked at.

WOODRUFF: So, you're with holding judgment on the president's proposal?

THOMAS: No, I think the president, both in his personal accounts and in some kind of an adjustment on the benefit structure for those most in need, who have to rely solely on Social Security, to make sure that they get as high a payout as possible. But, for those that don't rely solely on Social Security, we might be ale to save some dollars and help solvency. I think that's a good idea.

WOODRUFF: So, you think that can be done? And you think it can be done quickly? Because, you've said you would like to get it done this -- in the next month or two. Can that be done?

THOMAS: Well, I think we need to do it quickly. To let this drag out is to continue the hear the arguments that you heard, for example, for Mr. Rangel. The argument -- in fact, Chuck Schumer on your program, just a few days ago, said we ought to get Democrats and Republicans together, create dials, turn the dials. That's what happened in 1983 with the Social Security Commission. They came up with the idea of extending the retirement age. Both Mr. Rangel and Mr. Schumer voted against that idea and voted in favor of raising payroll taxes. That's where they always were. They're against adjusting Social Security to make sure it reflects the changing population. President has offered a couple of ideas. Presidents aren't suppose to offer bills. They are supposed to show leadership and offer ideas. It's up to Congress to write the legislation and I'm ready to start.

WOODRUFF: Very quickly -- in our latest poll, and I know you love polls, Mr. Thomas -- we have -- people were asked -- curbing Social Security benefits for middle and income -- and upper income workers, they were asked do they favor or oppose. Thirty-eight percent favored; 54 percent oppose. That's a problem, isn't it?

THOMAS: Well, it's a problem depending on how you define middle- class. What the Democrats have done is misrepresented what we're going to do so people who -- everyone defines themselves as middle class -- feel threatened and they really shouldn't, based upon the way we're going to put the package together. I thought the poll you showed Charlie Rangel was probably far more worthwhile looking at, and that is, 61 percent of the people believe the Democrats won't go far enough to fix the problem. They never did when they were in the majority, and we're going to try to fix it for all time. It's going to require a number of adjustments, but fairness reflecting changes in the population are long overdue, and we're going to bring those ideas to the table. I hope the Democrats bring a permission slip from Nancy Pelosi to participate.

WOODRUFF: Very, very quickly, another question in our poll -- is it best for Social Security if, in the next year, Congress passes no plan? Most people, almost half, said, best, no plan. And, in fact, House Speaker Dennis Hastert, your good friend, says he wants to the Senate to go first.

THOMAS: Well, and -- all of us would love to see the Senate go first, but you can only wait so long. Rarely do you have an opportunity, Judy, with the president out front creating an umbrella for creative ideas for people to sit down and solve a problem. It is a problem. It will become a crisis as it did in 1983. When we were facing cutting off Social Security checks, Charlie Rangel voted to increase the payroll taxes and voted against increasing the retirement age. We're going to bring a lot of ideas to reflect changing Social Security to meet the new population changes in this society, and I'm quite sure he's going to have a hard time voting for realistic plan. All he wants to do is raise payroll taxes. That's why Americans are worried about how far the Democrats would go.

WOODRUFF: All right. We're going to leave it there.

THOMAS: Not far enough.

WOODRUFF: We're going to leave it there. House and means -- House and Ways Committee Chairman, Bill Thomas.

Congressman, good to see you. Thank you very much.

THOMAS: Thank you.

WOODRUFF: California's governor hits the air waves. Up next, Arnold Schwarzenegger stars in a new TV ad designed to invigorate his reform agenda.

(COMMERCIAL BREAK)

WOODRUFF: Some news here in Washington. Former Treasury official Bob Kimmitt is expected to be nominated today to be deputy secretary of the Treasury. Kimmitt is currently an executive vice president of Time Warner, CNN's parent company.

We focus on California in today's second edition of Political Bytes. Golden State Governor Arnold Schwarzenegger appears in a new TV ad paid for by supporters of what he likes to call his reform agenda. In the spot, which begins airing today in the state's major media markets, Schwarzenegger asks the public to support his calls to control state spending and tax hikes.

And in San Diego, the city council has set July 26 as the date for a special election for a new mayor. As we have reported, Mayor Dick Murphy resigned last weeks just five months into a new term amid a federal investigation of the city's pension fund.

The bloggers weigh in on a high-profile Washington lobbyist. Up next, we find out what the bloggers are saying about reports that Jack Abramoff was paying bills for lawmakers on both sides of the aisle.

(COMMERCIAL BREAK)

WOODRUFF: Residents of the blogosphere have picked up on a developing story here in Washington which involve as lobbyist named Jack Abramoff. We check in now with CNN Political Producer Abbi Tatton and Jackie Schechner, our blog reports.

So, Jacki?

JACKI SCHECHNER, CNN BLOG REPORTER: Hi, Judy. If you've been following the blog segment or the news for that matter lately, you have heard Jack Abramoff's name -- the Washington lobbyist. There has been some question lately as to his connection with House Majority Leader Tom DeLay. An Associated Press article out now being linked on a lot of the right-wing blogs, saying that Abramoff also has connection to a couple of Democratic congressman -- specifically to their travel expenses. Also two DeLay aides, I should add, in the article. The Dems in question: Representative James Clyburn of South Carolina and Representative Benny Thompson of Mississippi.

This from MichelleMalkin.com, under the title, "Who's trippin'?" And her comment, "Those backfire flames are hot," referring to the Democrats now being called into question.

Over at vista.powerblogs.com -- it's Vista on Current Events, another right-leaning blog. They say, "Dems Join DeLay on the Ethics Hot Seat," saying that, "Talk about the pot calling the kettle black." Sandy over there mentioning, "It's not a shock that politicians on both sides of the aisle have always been known to abuse expenses and travel privileges. But what is ironic is that the Democrats would try to smear DeLay knowing that most of them have similar skeletons in their closets."

ABBI TATTON, CNN POLITICAL PRODUCER: Now the two lawmakers in question have stated on disclosure forms that the 1997 trip was paid for by a non-profit group. Now this isn't enough for some of the liberal bloggers. Skippy the Bush Kangaroo, this is xnerg.blogspot.com, they have a post here: "What part of illegal don't you understand, Tom." But they want the Democrats, everyone to rise to the same standard so they can keep on attacking Tom DeLay.

"What were you thinking?" they say. "Time for you to go." Sorry, in reference to the two congressmen. "We can't point fingers at "The Bugman" when you're caught with your ethical pants down around your ankles in the same hotel."

SCHECHNER: Now, on a different note, a congratulation today to boing-boing.net. This was the top blog, according to the 200 -- 200? -- 2005 Webby Awards. They call themselves the Oscars of the Internet. Boing-boing.net the top blog.

We mentioned earlier that there was going to be a ceremony in June a few weeks ago. And at that ceremony, the Webby Awards are going to honor former Vice President Al Gore for his contribution to the development of the Internet. The quote from their press release was, "Setting the record straight one of recent history's most persistent political myths." We had a little trouble pulling up the site, but they do have their own website, the webbyawards.com

TATTON: Now, we know how big blogging was in the election last year, in the 2004 election. Well, how big is it getting in Britain? Well, it's certainly increasing, certainly in the run-up to Thursday's general election. Some of the members of parliament over there running for their seats have their own campaign blogs. The conservative challenge of Michael Howard, who's going for the prime minister's seat, his wife has been blogging from the campaign trail. Here, she's talking about "a jolly photo-op in Cheadle." Very cheery. But then she goes on, of course, to attack some of the Labor MPs. Glenda Jackson, from Sandra Howard's Campaign Diary, being attacked there yesterday.

SCHECHNER: A lot of commentary on the left and the right, U.K.- style. If you're interested in learning more about this through the blogs, you can start here at general election05.com/blog. It's a group blog. And they've got a round-up. It looks like they're posting daily at this point, their massive round-up of what is going on in the general election from both sides. You can link to sites here, ones such as thelasttoryinScotland.blogspot.com, or one of our favorites, you've heard us mention it before, chickenyoghur@chickyog.blogspot.com.

Judy, we know you liked that name originally too.

WOODRUFF: I already love that name, yes, I do.

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

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

END

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