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JUDY WOODRUFF'S INSIDE POLITICS

Senate Standoff Reaching Climax; Oil-for-Food Investigation Continues; L.A. Mayoral Election Held; Accused Cuban Terrorist Seeks Asylum; Senate Passes Highway Bill

Aired May 17, 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: The U.S. Senate on the brink. Will there be a deal for judicial nominees or a meltdown? A handful of members may have the answer.

SEN. JOHN MCCAIN, (R) ARIZONA: It's very tough, and there's enormous pressures being applied to all members.

ANNOUNCER: A highway to hog heaven.

DAVID BOAZ, CATO INSTITUTE: It is a very porky bill.

ANNOUNCER: How far did lawmakers go to pack the transportation bill with goodies for the folks back home?

Election day in L.A. Are voters in the process of giving their mayor the boot? And how many care one way or another.

JAY LENO, "TONIGHT SHOW" HOST: I believe who cares is running against so what.

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

(END VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. The United States Senate has just passed a controversial highway spending bill, despite of veto threat from President Bush. We're going to have much more on that in just a moment.

Meanwhile, you could say on Capitol Hill this hour the unofficial motto could be "Assume crash positions." Senate leaders seem ready to set the wheels in motion for a potentially dangerous test to filibuster rules, judicial nominees and both sides' political clout. That is unless a few of their members can find a way out.

Let's begin with our congressional correspondent Joe Johns. Hi, Joe.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Judy, a public relation's push right now here at the United States Capitol, with both sides claiming they are open to some type of a negotiated solution, but at the same time openly gearing up for a fight. The two judges at the center of the fight, Priscilla Owen and Janice Rogers Brown, meeting today with Majority Leader Frist.

Frist trying it promote the notion himself that he still wants to talk it through. He's expected to meet later today with Republican centrists. This is a regularly-scheduled meeting where we do hear judges will be discussed. At the same time, Frist indicating he's ready for a fight on the floor.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST, (R) MAJORITY LEADER: Are they really out of the mainstream or this really just politics? The best way to decide is take it to the floor of the United States Senate and let 100 United States senators decide.

(END VIDEO CLIP)

JOHNS: Senate Democratic leader Harry Reid also has his press operation pushing -- Senate Democratic Leader Harry Reid also has his press operation pushing the idea that he, too, wants a compromise. Also sounds very much like he is spoiling for a showdown. As we have reported of course, the deal Democrats have been pushing would allow some judges to get through, a number of others would be blocked. It's just not clear at this stage as to where that possible compromise is headed.

As you know, Senator John McCain of Arizona has been pushing some ideas that he thinks could lead to a compromise. Today, he told us he does not want to say how many Republicans may have signed on, how many Republicans might sign on. He also has made quite clear he's not putting a timeline on any of his negotiations in trying to keep it close to the best, because he thinks this is a very sensitive time.

Speaking of timing, of course, all indications are, especially according to a document that we received here at CNN just a little while ago, that Republicans are looking toward next Tuesday and Wednesday for the showdown vote on the Senate floor. We do expect discussion of judges to begin as early as tomorrow, but no votes -- Judy.

WOODRUFF: So, Joe, earlier, it had looked like the showdown could come today, but that's now been pushed back?

JOHNS: I'm sorry, I have to tell you, I can't hear you very well. I think your question was whether it's been pushed back. Yesterday, we were given indications that it would hit the Senate floor as early as Wednesday. There has been a question as to when the first showdown vote would occur, when a test vote would occur. What we're told now, today, is that it will not probably happen until Tuesday or Wednesday of next week. And I always have to be very careful about being too certain about what's going to go on the Senate floor. As you know, things change mighty fast -- Judy.

WOODRUFF: Well, we've noticed that. We've sure noticed that. OK. Joe Johns, thank you very much.

So now let's turn to the White House, where the same judges you saw meeting with Senator Frist, Judges Owen and Brown, paid a visit there today, and where President Bush has a good deal riding on the filibuster fights. CNN's Ed Henry is there. Hi, Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Judy. In fact, the White House is still walking a very fine line on this nuclear option. On the one hand, officials reiterating today that President Bush does not want to get into the specifics, meddling on the specifics of Senate rules. That's something for lawmakers to work out. And yet, guess who came to the White House for lunch today? As you mentioned, Janice Rogers Brown and Priscilla Owen, two of the president's judicial nominees who are at the center of this Senate stalemate.

Officials here tell us that they had lunch with White House counsel Harriet Miers, then dropped by the Oval Office for a brief meeting with president himself. All of this a not-so-subtle reminder that while the White House claims it wants to stay out of it, on the other hand, the president very much wants to put pressure on Democrats to stop filibustering his judicial nominees, a point hammered home by White House press secretary Scott McClellan.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The role of the Senate is to provide their advice and consent. It's not to provide, advise and block. And what we have seen is that Senate Democrats are taking this to an unprecedented level, something we have not seen in those 214 years that you reference. And so we would hope that they would move forward on giving all these nominees an up or down vote, because all of them are well-qualified and would do an outstanding job.

(END VIDEO CLIP)

HENRY: The White House is walking that fine line, of course, because while these judicial nominees are key to the president's political base, a key part as well of his agenda, there's great concern here about what a so-called nuclear war would do. Would that blow up the Senate in terms of blocking the rest of the president's agenda? Social Security, the energy bill, also tax reform.

Also what would it do to the rest of the president's nominees if, in fact, the Senate comes to a screeching halt? Of course, for example, they're looking at John Bolton, the nominee to be U.S. ambassador to the United Nations. His nomination already in trouble. If the Senate blows up, it's very likely it will be completely stalled -- Judy.

WOODRUFF: All right, Ed, let me turn you now to another story we are watching and that is over the last few days, the report by "Newsweek" magazine that U.S. officials at Guantanamo Bay desecrated the Koran. Yesterday "Newsweek" retracted the story. What are they saying today the White House?

HENRY: Even more pressure from the White House today. You'll remember yesterday Scott McClellan and other officials pressuring "Newsweek" to issue a full retraction. That came and yet the White House is now saying that's only a good first step. Scott McClellan says they need to do at least two other things. "Newsweek" needs to have a full public accounting of what went wrong journalistically, but also, he wants to see the magazine reach out to the Muslim world and point out that the U.S. military, in the words of McClellan, in fact, respects the Koran and does not desecrate it.

Now, that led to some very tough questioning from the White House Press Corps here at McClellan's daily briefing. One reporter asked incredulously, have you become -- appointed yourself the editor of "Newsweek." What business does the White House have in telling "Newsweek" in telling "Newsweek" to do. McClellan insists he's not ordering them to do anything. He just is encouraging the magazine to try the repair some of this damage -- Judy.

WOODRUFF: OK, Ed Henry, watching it all at the White House. Ed, thank you very much.

Well, back our other story. The latest in perhaps the last attempt to prevent the Senate from going nuclear was crafted by a bipartisan group of senators, including Democrat Mark Pryor of Arkansas. He joins us from Capitol Hill. Senator, thank you very much for joining us.

SEN. MARK PRYOR (D), ARKANSAS: Thank you for having us, Judy.

WOODRUFF: Senator, your leader Harry Reid says that all the efforts of compromise have failed. Is he wrong about that?

PRYOR: Well, I know that Senator Reid has met numerous times with Senator Frist to try to resolve this at the leadership level. And if you ask any senator, that's what they would love to see. That's the best case scenario, is this gets resolved at the leadership level. Looks like that's now at an impasse. So we're on Plan B at that this point.

WOODRUFF: Which is what? What are you trying to do?

PRYOR: Well, for several weeks, there's been a number of senators who've been working behind the scenes to try to come to some sort of resolution on how to take the nuclear option off the table. That -- those negotiations are at a very delicate stage right now. There is no deal, there is no agreement at this point. But there's a lot of discussion going on right now, either on the Senate floor, out in the hallways, in people's offices and I'm just privileged to be part of that.

WOODRUFF: Well, you say - you're talking about how it take the nuclear option off of the table. But Senator Bill Frist, a Republican leader, says one way or another, the president's nominees need to get to the floor. You can't do that when there's a filibuster right, can you?

PRYOR: Well, sure you can. There's a lot of different ways we can do it and I don't want to relive all the past history, but there are over 60 of President Clinton's judges that never got an up or down vote. You know, we don't need to get into all of that right now. What we need to try to do is move forward, have senators that want to see the Senate operate the way it should, try to come up with some sort of agreement and try to move this forward.

WOODRUFF: Senator, what do you think is the core here for Democrats? The bottom line, what do Democrats -- what they must have out of this agreement to feel their principles are being respected?

PRYOR: Well, I think one thing the Democrats would like to see -- and I think, actually, if you talk to Republicans, as well, they'd like it see this, that the -- each senator's right to filibuster is preserved. This has been something that goes back to the beginning of our republic. It's something that makes the Senate unique, not just in American history and government, but also, really, around the world. And so I think one of the things the Democrats are fighting for is to make sure that our right to filibuster is observed.

WOODRUFF: Well, is there a way to abbreviate or trim that right so that the Republicans get what they want out of this?

PRYOR: I don't think anybody wants to do that by rule. And when I say anybody, I'm sure there some people on the other side who want to do that. But most people in the middle, most people that love the Senate as an institution, don't want to do that by rule, but maybe by agreement, maybe we talk to each other, we come up with some sort of criteria that we use, as we go through the rest of this Congress to, you know, to make sure that if the filibuster is used, it's used cautiously, that we take our right of advice and consent that's in the constitution -- we take that seriously, and we're very careful as we execute that right.

WOODRUFF: In other words, it sounds like you're describing a temporary situation that might only be in effect in this Congress. Senator, what is it that Democrats are worried about here? What is it about these nominees that worries you and your colleagues?

PRYOR: Well, gosh, there's a long list of things that worry a number of my colleagues about these nominations. We could go through each one specifically. But one concern I have with many of them is that they'll be activist judges, and you know, I just have real concern about that, whether its conservative activist or a liberal activist judge. I just have a lot of concern about that. I think Congress needs to be the one making the law and the judiciary should be interpreting the law, but it should be consistent with the spirit of what the law is.

WOODRUFF: And you're not worried, Senator, the Democrats come out of this looking like obstructionists?

PRYOR: I don't think so. You know, who knows how this will work out in the end. Certainly, I hope that we get a good result. I think we owe it to the American people. I think that one thing we need to show, not just as Democrats but as senators, we need to show that we can work together, and that we can put our partisan differences aside and work together for what's good for this country. We have a lot of legislation pending in the U.S. Senate, not just the appropriation bills but a lot of things like, we're trying to pass the highway bill today. In fact, we just voted on it in the Senate -- energy bill, long list of things that I'd like to see get passed in this Congress. And I'm afraid if the nuclear option trigger is pulled, you're not going to see a very productive 109th Congress.

WOODRUFF: I don't know if you're a betting man, Senator, but what would you say right now are the odds that this is going to be worked out?

PRYOR: Well, it's a little bit fluid right now, and I can't give you any odds on that. But I'd say that reasonable minds can look at this and come together and hopefully come up with the reasonable solution. Certainly, I think there's room here for a reasonable solution, in something that's a win/win, bear in mind, the extreme left, the extreme right, they're not going to be happy with this. But is something I think most Americans would be happy with, if we're able to get it resolved.

WOODRUFF: Senator Mark Pryor, a voice in the middle. Senator, thank you very much.

PRYOR: Thank you.

WOODRUFF: We appreciate it.

Well, here in Washington, a lot of people still are asking questions about Tom DeLay's ethics. But have the House majority leader's troubles made an impression on Americans outside the beltway? The answer ahead.

Plus, Pennsylvania and other key stones in the next battle for control of the Senate. We're following the state of play.

And later...

(BEGIN VIDEO CLIP)

GEORGE GALLOWAY, MEMBER, BRITISH PARLIAMENT: Senator, in everything I said about Iraq, I turned out to be right and you turned out to be wrong, and 100,000 people have paid with their lives.

(END VIDEO CLIP)

WOODRUFF: A striking and often scathing defense, as the Senate investigates abuses of the Oil-for-Food program in Iraq.

(COMMERCIAL BREAK)

WOODRUFF: The public's perception of House Majority Leader Tom DeLay leads off our "Political Bytes" on this Tuesday.

A Pew research poll finds that fewer than one in three Americans say they are closely following the ethics controversy involving Congressman DeLay; 42 percent say they've not been following the story at all.

In Illinois, Governor Rod Blagojevich is refusing to say if he or any of his aides have been subpoenaed in connection with a grand jury investigation. The probe involves claims of jobs traded for campaign contributions. The investigation was launched based on claims by the governor's estranged father-in-law, a Chicago alderman who has since retracted his accusations.

This evening, President Bush will headline a Republican National Committee fund-raiser here in Washington -- about 1,500 people expected to attend. The party says it expects to bring in about $15 million.

We look ahead to the big Senate races of 2006. Next, I'll talk with political analyst Stu Rothenberg about the close contest shaping up in the next election cycle.

(COMMERCIAL BREAK)

WOODRUFF: Political strategists in both parties are already planning ahead for 2006. And there are several tight Senate races taking shape.

Not long a go I discussed some of these races with political analyst Stu Rothenberg. We started with the match-up in Pennsylvania between incumbent Republican Rick Santorum and Democrat Bob Casey Jr.

(BEGIN VIDEOTAPE)

STUART ROTHENBERG, ROTHENBERG POLITICAL REPORT: Democrats are attacking Santorum on health care on Social Security; too extreme, too conservative on social issues.

For the Republicans, Santorum's allies are attacking Casey for, sort of, "Where's the beef?" that he's not talking about issues. Why isn't he talking about issues. They want to engage on specifics. This will be a well-funded race with national attention. I think it's a wonderful contest.

WOODRUFF: And right now, Casey's already doing well on the polls.

ROTHENBERG: That's right. There have been early polls showing Casey ahead by a point or two or even by significant margins. And I think the Republicans and Senator Santorum are aware that this is no better than a toss-up for a sitting Republican senator in the leadership. It is a very difficult contest for the Republicans.

WOODRUFF: All right. Let's move down south to Florida. The incumbent Democrat, Bill Nelson: Is he vulnerable?

ROTHENBERG: I think he is, but there's a big "if": if the Republicans can get candidate top-tier candidate.

Right now the Republican recruiting seems to be frozen, waiting for Congresswoman Katherine Harris to decide whether or not she is going to run. Other Republicans would certainly look at the race.

Nelson, it's not as though Nelson has made these huge mistakes. It's that Florida is growing. He's not the best-known senator in the country. Republicans have done well in recent races, elections in Florida.

So if they could get a candidate -- Katherine Harris is kind of freezing the field. And there's a lot of Republicans that think she could walk away with any nomination and wouldn't want to take her on but think maybe she's not the best candidate in the general elections. So they will really look at Republican recruiting here, in particular what the congresswoman does.

WOODRUFF: So far she is hesitating?

ROTHENBERG: She has not made an announcement. She has been flirting with and flirting with it long enough and with enough sincerity to keep everybody else on the sideline.

WOODRUFF: All right. Let's turn to Minnesota. People say it's barely a Blue State. But you've got a Republican looking at this race.

ROTHENBERG: Yes. Well, there are a number of candidates. You have one Republican. This is the Dayton retirement open seat. On the Republican side it's Congressman Mark Kennedy. He's in the race. He's basically cleared the field. Former Senator Rod Grams said he was going to run and then wisely pulled out. Everyone else is out really. Kennedy is where the Republicans are putting their cash.

On the Democratic side, there's a number of candidates. A lot of very good early reviews for Amy Klobuchar, Hennepin County attorney; I have not met her but heard good things. But she might not have the race to herself.

Patty Wetterling, who ran for Congress last time and lost against Kennedy, is considering a race. There's an attorney who is look. And now a new name has surfaced, a businessman who's looking at race.

So this is going to be another top-tier contest.

WOODRUFF: No Humphreys or Mondales?

ROTHENBERG: None of those names. Of course there is a Kennedy, but it's the wrong party.

WOODRUFF: It's the other party. OK. Last: the state of West Virginia. Robert Byrd is -- what -- 87 years old? Is he running again? And what are his chances?

ROTHENBERG: Oh, he's very much running again. His chances are good, but with an asterisk. The Republicans are waiting on Congresswoman Shelley Moore Capito. She represents a third of the state. Moore is the daughter of former Governor Arch Moor, well-known figure in the state. She's proven to be a terrific politician. The contrast in age and style, Republicans think, give this an opportunity for one of those upsets, almost like what Democrats achieved but didn't with they took on Jim Bunning, if you remember, last year.

The argument is Capito, even if she comes close to knocking off Senator Byrd but doesn't, that only adds to her credentials and portfolio for the future. And indeed, the contrast of today versus yesterday, the younger woman versus the older man, West Virginia may be changing, seems to be changing and Republicans would argue that Robert Byrd has changed on cultural issues. He used to be a cultural conservative; now he is no longer.

This is another recruiting issue. If the Republicans get Shelley Moore Capito, watch out.

WOODRUFF: Stu Rothenberg, our analyst, thank you very much, Stu. And our apologizes for the audio problems at top.

(END VIDEOTAPE)

WOODRUFF: A clash today on Capitol Hill, but not between Democrats and Republicans.

(BEGIN VIDEO CLIP)

GALLOWAY: Senator, this is the mother of all smokescreens.

(END VIDEO CLIP)

WOODRUFF: A feisty member of the British Parliament accused of dirty dealings with Saddam Hussein takes the hot seat here in Congress. And he gives as much as he gets. All the fireworks when we come back.

Plus, will voters in the City of Angels make history today? We'll go live to Los Angeles for a close look at this year's first major election. (COMMERCIAL BREAK)

WOODRUFF: It's a little bit before 4 o'clock on the East Coast, and as the market get set to close on Wall Street, I am joined by Kitty Pilgrim in New York with the "DOBBS REPORT."

Hi, Kitty.

KITTY PILGRIM, CNN: Hi, Judy. Thanks.

Well, we have stocks turning higher in the last hour. Right now DOW's up 75 points. NASDAQ, half of 1 percent higher.

Now, the gains came as the Bush administration turned up the heat on China to allow its currency to rise against the dollar.

Well, are you going on vacation? We're already seeing higher prices, hate to tell you. Accounting firm PriceWaterhouseCoopers says this may be the most expensive summer since 2000. Hotel rooms are rates are expected to jump 8 percent this year, and high-end hotels by a lot more than that.

Rental car prices also on the rise. Expedia says average daily rates are up 12 percent from a year ago.

Airfare's higher too. During the past week, most of the major airlines have announced $10 to $20 price hikes. And even the discount carriers have boosted their fares.

Collins & Aikman, one of the largest auto-part suppliers, has filed for bankruptcy protection. This is linked to the problems at General Motors and Ford. A number of auto suppliers have reported the same thing.

And BP says mistakes made by its own staff led to the deadly blast at a Texas refinery in March. This was a big accident. The explosion and fire killed 15 workers, injured more than 170 others.

Coming up on CNN 6:00 p.m. Eastern, on "LOU DOBBS TONIGHT," China's power play: the Bush administration wants China to help with North Korea, but some say China is more of an obstacle than an ally in the situation.

(BEGIN VIDEO CLIP)

GORDON CHANG, AUTHOR "NUCLEAR SHOWDOWN": Well, there's a lot that we have that the Chinese need, and what we really need to do is tell the Chinese, look, you know, if you want this free ride on trade to continue, because they are getting a free ride, then, you're going to have to step up to the plate.

(END VIDEO CLIP)

Also tonight, the Reverend Al Sharpton joins us with his take on Mexican president Vicente Fox's comments about black Americans, plus, a looming crisis -- the United States has been paying for is record trade deficit by borrowing abroad. But there are signs that foreign investors are cutting back, and there's now concern that could mean interest rates will spike and the housing market may crash.

Plus, Congressman Silvestre Reyes joins us to discuss his new legislation to establish standards for counterfeit-proof Social Security cards. We'll have all that and more, 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," but, for now, back to Judy Woodruff. Judy?

WOODRUFF: Kitty, thanks very much, and we'll be watching.

Now, back to INSIDE POLITICS. An investigation of alleged abuses in the Oil-for-Food program in Iraq led to an angry scene in a Senate hearing room today. Maverick British lawmaker George Galloway lambasted a Senate panel for accusing him of trading oil with Iraq before Saddam Hussein's ouster, in violation of U.N. sanction. In denying the allegations, Galloway also railed against the U.S. invasion of Iraq, and against Defense Secretary Donald Rumsfeld.

(BEGIN VIDEO CLIP)

GALLOWAY: Senator, in everything I said about Iraq, I turned out to be right and you turned out to be wrong, and 100,000 people have paid with their lives, 1600 of them American soldiers sent to their deaths on a pack of lies.

I have had two meetings with Saddam Hussein, once in 1994 and once in August of 2002. By no stretch of the English language can that be described as many meetings with Saddam Hussein. As a matter of fact, I've met Saddam Hussein exactly the same number of times as Donald Rumsfeld met him. The difference is, Donald Rumsfeld met him to sell him guns and to give him maps, the better to target those guns. I met him to try and bring about an end to sanctions, suffering and war.

(END VIDEO CLIP)

WOODRUFF: After Mr. Galloway's testimony, the panel's chairman, Republican Senator Norm Coleman, suggested he was skeptical.

(BEGIN VIDEO CLIP)

SEN. NORM COLEMAN (R), MINNESOTA: Mr. Galloway's credibility is certainly very, very suspect and if, in fact, he lied to this committee, then there'll have to be consequences to that. I don't know. We'll have to go (INAUDIBLE) -- I just don't think he was a credible witness.

(END VIDEO CLIP)

WOODRUFF: Our senior United Nations correspondent Richard Roth covered that explosive Senate hearing today, and he interviewed George Galloway one-on-one afterward. Richard, what is your take on all of this?

RICHARD ROTH, CNN SR UNITED NATIONS CORRESPONDENT: Well I'm used to diplomatic niceties at the United Nations, and certainly, from what I've seen in the U.S. Congress, you don't see these types of fireworks that often. I talked about that with Mr. Galloway, noting that this was a bit of a different atmosphere.

(BEGIN VIDEO CLIP)

GALLOWAY: This was a clash of the British parliamentary tradition with the rather more sedate, senatorial one, and it is up to you who won. Most of the traffic I'm getting in my ear is that the British parliamentary tradition won.

(END VIDEO CLIP)

ROTH: I mean, Coleman said it was not a wrestling match, and it really -- there was a few sparring moments. It could have been even much better theater. In the way, it was almost a replay of the debate over the Gulf War. That's the way Galloway wanted to play it. Senator Coleman wanted to play it about Saddam and European businessman, and others on the committee wanted to, perhaps, say it U.S. oil companies that really knew about -- and sort of the government -- about oil smuggling and corruption.

WOODRUFF: Well, Senator Coleman and others are making very serious allegations about Mr. Galloway. Who is right here?

ROTH: So far, we don't know. Senator Coleman is saying that, based on interviews with Iraqi officials -- Tariq Aziz's and the former Iraqi vice president, and documents from Iraq -- that Galloway's name is there and that as ear -- even in yesterday someone said, yes, Galloway was in effect on the take. He strongly denies this, as we heard in the committee. I never took a drop of oil. I never did anything. However, there is the United-Nations authorized investigation that is looking at the very same thing and Galloway seems to like the U.N. a lot. He praised Kofi Annan. It will be interesting to see if they conclude the same thing, what Galloway has to say about the U.N. authorized program.

WOODRUFF: Does Galloway have any evidence to substantiate -- to back up this claim that he didn't do what they're saying he's done?

ROTH: From what I heard, he's just saying you don't have the evidence. He's not trying to prove the negative. He's saying, I don't see the people who you are using to accuse me. They're not here. I don't see the documents. The committee itself was never able to say in their report how much he took. They are saying it is not a court of law, but we know this, based upon people we are assuming telling us the truth.

But I guess in U.S. courts people would say, are you going to entrust informers, people in jail in -- under U.S. custody in Baghdad? How do we know they're telling the truth right now? And the same goes for Charles Pasqua, the former French Interior Minister. He was named by this committee last week. We don't know yet, was Galloway on the take? He says he doesn't even know the people that the committee says took his steerage of these oil -- lucrative oil contracts.

WOODRUFF: Meanwhile, Senate hearings and we'll see where it goes from here. OK. Richard Roth, good to have you in Washington for a change.

ROTH: Oh, it's good to see you.

WOODRUFF: Thank you.

Meantime, on the West Coast, is Los Angeles a happening place? Yes and no, according to our Bill Schneider who's covering today's mayoral election. He'll explain, ahead.

Plus, America's highways, littered with pork. Some say some of the fine print in the transportation bill may surprise you.

And, are bloggers feeling forgiving toward Newsweek magazine? The retraction reaction, when we go inside the blogs.

(COMMERCIAL BREAK)

WOODRUFF: A developing story we are watching today out of Miami -- U.S. immigration authorities have detained a 77-year-old Cuban active militant in connection with a 30-year-old bombing on an airliner. Let's go quickly to our Susan Candiotti for the very latest. Hi, Susan.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hi, Judy.

It's about 15 minutes after Luis Posada Carriles has wrapped up a news conference in Miami to explain his current position about wanting to apply for political asylum in the United States, yet saying he wasn't sure whether he would withdraw that application and possibly leave the United States. Not long after that, he was picked up by U.S. immigration authorities and customs enforcement ICE officials, the Department of Homeland Security. They took him into custody and officials now tell us that they will hold him for 48 hours while they review his immigration status here in the United States.

Now, apparently, Posada does have the option of withdrawing his political asylum application and deciding to leave to another country on his own, but the United States would have to approve that wherever he might -- wherever else he might want to go. Now, earlier today, he denied again, as he has many times in the past, of having any role in the downing by explosion of a Cuban airliner back in 1976 that killed 73 people. He would not talk about bombings that he is allegedly tied to in Havana, at various tourist hotels back in 1997. He was convicted in 2000 of an attempted assassination, a plot, in Panama, but was later pardoned by the president of that country before she left office.

But only today in Havana, there were day-long demonstrations organized by Cuba's president Fidel Castro, protesting the fact that Posada Carilles was in the United States, yet U.S. authorities had not picked him up, at least on the suspicion of his involvement in these various terrorist attacks.

Posada has consistently, again, denied any involvement, but the United States was coming under considerable criticism by Fidel Castro, by the -- by other governments, suggesting that how could this administration give safe harbor to a suspected terrorist when they criticize others for doing the same thing? So we'll have to wait and see now, Judy, as to what's going to happen with Mr. Posada.

WOODRUFF: All right. Susan Candiotti with the very latest on Luis Posada, who was detained today by U.S. immigration authorities in connection with that bombing back in 1976. Susan, thank you very much.

In Los Angeles now, voters deciding today where to give a second term to mayor James Hahn. He is in a rematch with his opponent four years ago, fellow Democrat Antonio Villaraigosa. But this time, Hahn may come out on the losing end of the face off. Our senior political analyst Bill Schneider is in L.A. Hello, Bill.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Sometimes, what's important in politics is what's not happening. Take today's mayoral election in Los Angeles. Antonio Villaraigosa is making a strong bid to become the city's first Latino mayor in modern times. Yet there's not a lot of ethnic tension in this campaign, unlike four years ago when the same two candidates faced each other.

HARRY PACHON, TOMAS RIVERA POLICY INSTITUTE: The ethnic card was definitely played in 2001, and it hasn't been played in 2005.

SCHNEIDER: Last time, there was no incumbent. This time, the race is focused on Mayor James Hahn, who's committed a cardinal sin in California's media politics: he's boring.

JOEL KOTKIN, URBAN AFFAIRS EXPERT: Jim Hahn is a politician who does best in the quiet, in the shadows, in the dark. He doesn't do well in the light.

SCHNEIDER: Here's Hahn on Sunday, campaigning in an African- American church.

MAYOR JAMES HAHN, (D) LOS ANGELES: Someone once said, you know, a saved city is going to be a safe city.

SCHNEIDER: Here's Villaraigosa.

ANTONIO VILLARAIGOSA, (D) L.A. MAYORAL CANDIDATE: And some people would say I came in through the back door. But one thing's for sure, I came out the front door.

SCHNEIDER: L.A. is not a very political city. This author calls L.A. a backyard society, where people are committed to a lifestyle.

KOTKIN: Our pride is really in our life and how we live it. It's not in our political culture or our leadership.

SCHNEIDER: It's very much a live and let live culture.

KOTKIN: Basically, if you're a bigot, this is a really stupid place to live.

SCHNEIDER: Sure, the campaign has gotten very personal and very negative.

UNIDENTIFIED MALE: Now the DA's opened an investigation of Villaraigosa fundraising. Los Angeles just can't trust Antonio Villaraigosa.

SCHNEIDER: But any ethnic and racial tensions are kept below the surface. Nobody wants to push any hot buttons, including Latinos, who remember what happened four years ago.

PACHON: Latinos are almost like the Irish, you know. They didn't get mad, they got...

UNIDENTIFIED MALE: I want to talk to you about -- well, what is a Latino?

(END VIDEOTAPE) SCHNEIDER: What Mr. Pachon was saying is they didn't get mad, they're getting even. Well, is there any ethnic or racial tension hidden beneath the surface in this campaign? I noticed that in a recent "Los Angeles Times" poll, most white voters and black voters disapproved of the way Mayor Hahn is handling his job, but most were not ready to vote for his Latino opponent, at least at the time that poll was taken about a week ago -- Judy.

WOODRUFF: So, Bill, what does that say if Mr. Hahn is not considered the most exciting figure leading the city and Mr. Villaraigosa is not able to take advantage of that, what does that say?

SCHNEIDER: That says this race could end up a lot closer than the polls have been predicting so far, which showed Villaraigosa strongly in the lead. That's everyone's watching for. You know, the poll by the "L.A. Times" showed the incumbent mayor with a 38 percent job approval rating. That means he probably should not get elected under normal circumstances. The question is, the city prepared to elect a Latino opponent? That's what we'll find out tonight.

WOODRUFF: If they didn't, why wouldn't they be?

SCHNEIDER: Well, there would be two arguments. One is clearly racism, that a Latino opponent still is not acceptable to a lot of white and African-American voters in this city. But there's another explanation, which is that Villaraigosa is very liberal. He is seen as more liberal than Mayor Hahn, although they both could be called liberals by any standard. But he was the president of the American Civil Liberties Union, he is a strong ally of organized labor.

I noticed in that same poll that 57 percent of Republican voters in Los Angeles -- there are some, about 20 percent of the voters -- 57 percent say they disapprove of Hahn, but only 37 percent are voting for Villaraigosa. That could be because he's seen as a very liberal candidate.

WOODRUFF: Well, you'll have a chance to look at the real numbers, I guess, when this is all over.

SCHNEIDER: Yes.

WOODRUFF: OK, Bill, thank you very much.

SCHNEIDER: Sure.

WOODRUFF: Members of Congress call them important projects, but critics prefer the term pork. Up next, our Bruce Morton digs into the highway bill and follows the trail of billions of dollars in government spending.

(COMMERCIAL BREAK)

WOODRUFF: Last hour, the Senate approved its version of the massive six-year transportation bill at an estimated cost of almost $300 billion. Meanwhile, a White House spokesman said again today that the bill risks a presidential veto if it ends up costing more than 284 billion. As our Bruce Morton reports, spending money on projects back home is one way to ensure bipartisan agreement on Capitol Hill.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT: You may think Washington obsessed last week over a small white airplane, but the Senate was doing the people's business, too, clearing the way for the highway vote to pass and thereby spending billions of dollars of your money. This isn't a picture of the bill, but it is a picture of what is bill is full of -- pork.

BOAZ: It is a very porky bill. It's got something like 4,000 earmarks that members of Congress have put into it. I mean -- but, you start with just the number. The president agreed to a $256 billion highway bill, and then he said, well, okay, $284 billion, and now the Senate has just added another $11 billion to that.

MORTON: Four thousand ear marks? Those are the little pet projects individual senators tack on the bill.

BOAZ: There are a lot of favorites. There's $2 million for a garage for a religious university in Nashville. There's $850,000 for bike and trolley paths in Hattiesburg, Mississippi. There's $1.5 million for the Henry Ford Museum in Dearborn, Michigan. And you'll notice that one of the things these projects have in common is, they're not highways.

Reporter: The highway bill has political affects, too -- build more roads and people move further out of the city. Build new developments, exurbs of what used to be farmland or woods.

THOMAS MANN, BROOKINGS INSTITUTION: No question but that the expansion of the highway system has opened up the "exurbs" to development and that has now become a basis of political strength for the Republican party. So, for a variety of other reasons as well, it helps us understand why there is such broad base support among Republicans on Capitol Hill for higher spending levels for the highway bill than the president wants.

MORTON: The House, in March, went along with the White House and passed a $284 billion bill. The measure will now go to a conference committee. The president could veto a larger bill but Karl Rove will be reminding him that those new exurbs were a source of GOP strength in the last election.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Thank you, Bruce.

So, "Newsweek" retracts its story but the White House says the magazine should do more. We'll find out what people are saying about the story online we go next, "Inside the Blogs." (COMMERCIAL BREAK)

WOODRUFF: The decision by "Newsweek" magazine to retract a controversial article is one of the main topics on the blogs today. For more, let's join CNN political producer Abbi Tatton and Jacki Schechner, our blog reporter. Hi, Jacki.

JACKI SCHECHNER, CNN BLOG REPORTER: Hi, Judy.

Yes, the "Newsweek" story is not going away any time soon. Even Garrett Graff at FishbowlDC is jumping on it. He usually runs a gossip media blog based on DC events but he has posted this under the little tag, "Sort of Serious Stuff" is what he says. "The second-day story on the `Newsweek' flap is breaking down into two angles -- one, how `Newsweek' responded as a P.R. matter vs. CBS's response to the National Guard memos." The second being the use of "anonymous sourcing in news reporting out of Washington." Garrett also pointing out, it's interesting the flap has distracted from the larger allegations involved the story. Garrett, by the way, you might remember, was the first blogger to be credentialed for the White House briefing room.

ABBI TATTON, CNN POLITICAL PRODUCER: Now, the must-read post on this today seems to be Jay Rosen who's a professor of journalism at New York University. He runs the popular blog PressThink.org. He breaks down what went wrong today. His post is called "Newsweek's `take our word for it' World." "It was next to impossible for us to judge the Periscope item for ourselves; there was almost nothing in it our trust could latch on to except `Newsweek's' royal stamp and Michael Isikoff's magic name." He goes on to say that journalism is under scrutiny like never before, and, as a consequence, it is imperative that journalism -- journalists -- in the United States raise their standards because the consequences are so much graver.

SCHECHNER: It is too soon to tell what sort of impact the story is going to have on readership or loss of it for "Newsweek," but somebody who hasn't been reading "Newsweek" for about two years now is Matt over at BlackFive.net. He's a mil-blogger, or military blogger, used to be in the Army and posts mostly about military issues. He has a link saying he hasn't read "Newsweek" since May 26 of 2003.

If you click on the link, it's a story about a friend of his. Major Matthew Schram (ph), who was killed in an ambush in Iraq, and Matt from BlackFive says that there was a "Newsweek" reporter on the scene at the time who left and never reported the story, so Matt of BlackFive started his blog. He felt like there were a lot of stories that were not being reported out of Iraq and he felt like this blog was a good way to pay tribute to his friend and also to bring those stories to the public.

TATTON: On to another story -- soon after British M.P. George Galloway took the floor of a Senate panel to deny profiting from the U.N. Oil-for-Food program, the blogosphere started lighting up. Bloggers on the left and the right started commenting on the Galloway fireworks. Now, if the intensity of the Galloway's attack today took some by surprise here, that wasn't the case with bloggers in London. They were rubbing their hands in anticipation at Galloway's appearance. "Get a ringside seat." This is the Londonist.com. "We've been looking forward to it. In the left corner, weighing in with a face full of cigar and several wins already under his belt, is `Gorgeous' George Galloway." They go on the predict a Galloway win -- "we're expecting George to be picking bits of `Norm' meat from his teeth for days to come," referencing Senator Norm Coleman there.

SCHECHNER: Somebody in the U.S. following this is Willisms.com. It's Will Franklin. He's a 24-year-old graduate student in Houston. He used to write for the school paper, decided he liked blogging better because he had more freedom when he did so. He says, "Galloway's primary purpose was showing off for his far left-wing constituents back home," clearly wanting "people to view this as a neoconservative witch hunt," saying, "it did not come off that way at all."

TATTON: Now, "The New York Times" announced yesterday that, come September, they would start charging for certain articles online, opinion articles on line. Bloggers, not happy about this. Bloggers, one of their big pasttimes is linking to articles and if they are going to have to start paying, this is not going to be very popular. Andrew Sullivan, AndrewSullivan.com sums it up nicely: "`The New York Times' withdraws from the blogosphere."

SCHECHNER: And, over at Matthew Yglesias' blog, a writer for "The American Prospect," Yglesias.typepad.com -- he says that "nobody's going to pay hard-earned money to read op-ed columns in an era when there's way more political commentary, free, available every day than anybody could possibly read." Judy, we know, we try to read it all. It is impossible.

WOODRUFF: Well -- and all that raises interesting questions about, who does pay for this? And what do people get paid for their work? All right, Abbi, Jacki, thank you both. We'll see you tomorrow.

That's it for INSIDE POLITICS.

END

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