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Inside Politics Sunday

Palestinian Elections; Tsunami Politics

Aired January 09, 2005 - 10:00   ET

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


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


KELLY WALLACE, HOST: INSIDE POLITICS today, the Palestinian election takes center stage this Sunday and the outcome could help define President Bush's legacy.
Tsunami politics, as U.S. lawmakers tour the devastated region we'll get a first person account of the destruction and the hope for the future.

And is he irreplaceable? Who can succeed Terry McAuliffe as the head of the Democratic National Committee? Another candidate just announced his intentions. We'll tell you who that is. That's all straight ahead.

ANNOUNCER: Life from Washington, this is INSIDE POLITICS SUNDAY.

WALLACE: It is 11 days until the presidential inauguration and three weeks until scheduled elections in Iraq. But today, it is election day in the Middle East. Good Sunday morning to you. I am Kelly Wallace in Washington. Thanks so much for joining us.

As you know by now, politics doesn't take weekends off and neither do we. Another jam packed hour ahead. Moments from now we will take you to Gaza. As Palestinians head to the polls, an election hat could signal new momentum for the Middle East peace process.

Also, the latest on the tsunami disaster, as Secretary of State Colin Powell gets ready to brief the president on what he has seen and on what more the U.S. can do. And our reporter roundtable on the news of the past week and what is likely to make political news in the week ahead.

But first to the Palestinian election where the outcome is foreseeable, but what comes after that is almost completely unknown.

We get the latest now from CNN's Ben Wedeman in Gaza. And Ben with just about two hours until the polls close what has turn out been like so far?

BEN WEDEMAN, CNN CORRESPONDENT: Actually Kelly we've just heard that they've extended voting for another two hours. So that means there are two hours left to voting here. And what we've seen so far is the turn out has been moderate. Not quite as high as some might have expected.

We've been at this polling station in the Jablia (ph) refugee camp all day long and we've seen people in sort of dribs and drabs coming throughout the day. Most of the people I've spoken to said they would be voting for Mahmoud Abbas, who is expected to win in these elections.

And what is important, especially for U.S. policy in the Middle East, is that one of the top points in his program is the end of what he calls the militarization of the intifada or the Palestinian uprising. He wants to see an end to armed activities, the armed struggle essentially against Israel, which is a very important point when trying to resume negotiations with Israel, with Israeli Prime Minister Ariel Sharon.

The Israelis for their part have said that the first test for any new leader of the Palestinian authority who will be filling the shoes of the deceased Palestinian leader Yasser Arafat will be to put an end to the rocket attacks that have been occurring with fair frequency from Gaza into Israeli towns adjacent to the Gaza Strip and onto Jewish settlements.

Sot hat's really going to be one of the things to watch in the coming weeks as whoever wins these elections and of course it'' widely expected that Mahmoud Abbas will win the elections, whether he can make good on his promise to Palestinians and his promise in effect to the Israelis to end the violence and to move forward in the peace process.

Kelly.

WALLACE: Ben of course as you're talking about all of this and you're talking to members of the group Hamas as well what's the sense really in Gaza of support for Hamas now and how will that sort of play into Mahmoud Abbas' chances again if he is elected today in terms of success as the Palestinian leader?

WEDEMAN: Well, Kelly, Hamas is very strong here in Gaza, quite stronger than anywhere else in the Palestinian territories. Now they've been rather coy about their position in these elections. They did not put forth a candidate because they don't recognize the Palestinian authority. But at the same time they are in a dialogue, a constant dialogue with the Palestinian Authority.

There have been some tensions in recent weeks because Hamas insists on the continuation of the arms struggle, which puts them in something of a opposed position to Mahmoud Abbas and so, they're going to have to work out some sort of agreement otherwise there could be some sort of confrontation between the two.

We do know that Hamas even though it didn't participate in these elections it will be participating in the July legislative election. So they are jockeying for power. The question is do they want to confront whoever becomes the leader of the Palestinian Authority.

Kelly.

WALLACE: OK, Ben. We'll have to leave it there. We'll be watching your reports throughout the day on CNN and CNN international. Ben Wedeman reporting from Gaza. Observing today's Palestinian election is a man we haven't' seen for quite a while. Former Democratic presidential candidate John Kerry, who is in the middle of a two week visit to the region. He is one of dozens of international observers of the election process. And one of those observers, U.S. Congressman Adam Smith is our guest a bit later in this program.

One of the main topics on the Sunday news programs this day, the countdown to election day in another part of the world in Iraq. Voters will head to the polls three weeks from today. Senate Majority Leader Bill Frist says the elections are a key milestone for the people of Iraq.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST, (R-TN) MAJORITY LEADER: Those elections clearly are not going to be perfect elections. And in many peoples eyes people would say, you know, those are not fair elections. What they will accomplish is by international standards credible elections that are independent. That the majority of the people in Iraq, regardless of ethnic group or religion, will participate in.

(END VIDEO CLIP)

WALLACE: And the Tennessee Republican made his comments while on a visit to Kuwait.

Now to the southern Asia disaster zone. We have new pictures of the tsunami slamming ashore the day after Christmas in Indonesia's Aceh province. You see these pictures now. This is some of the most dramatic video of the event itself as the wall of water swept away almost everything in its path.

The video was apparently taken by a local photographer who normally videotapes weddings.

As the relief work continues gunfire is reported on Indonesia's Sumatra Island. Relief workers are being warned about possible attacks by rebel forces.

Meantime, United Nations Secretary General Kofi Annan has arrived in Maldives after wrapping up a two day visit to Sri Lanka.

Well U.S. Secretary of State Colin Powell will brief President Bush, we believe, tomorrow on his results of his mission to the tsunami disaster zone last week. CNN's Suzanne Malveaux is on the north lawn of the White House.

And Suzanne, do we get any sense listening to the Secretary of State in interviews of what message he'll be giving to President Bush?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well Kelly as you know of course initially the White House was criticized for what many saw as a slow response, a relatively small contribution.

But the administration believes that with this robust military humanitarian effort in the region as well as his high profile visit from Secretary Powell that largely that perception has been diminished.

Now what the secretary said this morning to our own Wolf Blitzer he says that he will tell the president of course that this is a long term mission. That this is important the United States stay engaged and that they may never know the full accounting for those who are lost.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: We will be making an assessment over time to see what is needed and if $350 million isn't enough I'm sure the president will try to get more into the account.

(END VIDEO CLIP)

MALVEAUX: Secretary Powell also talked about the importance of the mission there. He is in Nairobi, Kenya. That is where of course he is anticipating watching the signing of a very important historic peace accord for Sudan. That is southern Sudan ending a civil war that has been going on for more than two decades.

But the secretary also saying that the jury is still out when it comes to western Sudan or the Darfur area. That is where genocide has occurred and it is still unclear whether or not that is still being carried out today.

Kelly.

WALLACE: And Suzanne listening to Secretary of State Powell in that with Wolf Blitzer as well, what is he saying about concerns again about security and participation by the Sunnis in the Iraqi election scheduled three weeks from today?

MALVEAUX: Well you know what's really interesting Kelly is that the secretary acknowledges that there are concerns about that. First of all whether or not the Sunnis will participate and secondly, whether or not security is really going to disrupt those elections, whether or not the Iraqis will consider it legitimate.

But he does make the point that having taken into account all of those concerns, those dangers he still believes that it's important to have those elections on January 30th. That if you undermine that deadline, you undermine that date then ultimately you undermine the legitimacy of the elections.

That that has to take place at some point. January 30th is as good as any, but they know they're going to have some difficulties.

WALLACE: OK. Suzanne Malveaux reporting from the White House. We appreciate it very much. Thanks again.

And you can see the complete interview with Secretary of State Colin Powell on "LATE EDITION WITH WOLF BLITZER.". That's today at noon eastern, 9 a.m. Pacific. Turning our attention again to the tsunami disaster. Congressman Jim Leach spent the week getting a firsthand look at the devastation. The Republican from Iowa is a member of the House International Relations Committee and also the chairman of the Asia Pacific Subcommittee and he joins us now from Bangkok, Thailand. Congressman Leach thanks so much for being with us.

REP. JAMES LEACH (R) IOWA: Good to be with you, Kelly.

WALLACE: We have a slight delay which we will get through here. Congressman first give us your reaction to what you have been seeing over the past several days.

LEACH: Well there are two truly unprecedented circumstances. One is the tsunami itself, which in world history has seldom been replicated, a disaster of this nature. Secondly is the extraordinary response of the international community.

People of the world who appear to me to be crying out for a sense of idealism have really responded with unprecedented compassion. We have the United States. We have the Nordic countries, Germany, Japan, China, Australia, Singapore really pouring relief efforts into this region.

It is really a heart moving trauma and also a heart moving response where people, some in uniform, some out of uniform are truly soldiers for peace.

WALLACE: Congressman are we seeing any chaos following all of this compassion? What we mean are reports that some relief groups are overwhelmed by all the aid they're receiving and having difficulties getting that much needed aid to the people who need it most?

LEACH: Well everybody is so committed to giving support that a great deal of aid is arriving. There are some transportation bottlenecks, but it's extraordinary how they're being dealt with. People on a very ad hoc basis. There weren't' great contingency plans anywhere in the world for this sort of thing.

But committed people of common sense and compassion are really working hard. Now I'm confidant if disease can be avoided there will probably be too much in terms of medical supplies. But it's better to be prepared than otherwise.

Now in Indonesia there's still enormous problems with lack of access to many areas by road. The helicopters have proven to be enormously important and quite effective in their deliverance.

WALLACE: Now Secretary of State Colin Powell will be briefing President Bush about what he has seen. As you know, the U.S. initially pledged $350 million. That is a little bit less than some other countries, Australia $764 million, Germany $664 million. The president saying again this is the initial response.

After what you have seen congressman do you think more money from the United States government is needed now? LEACH: Well I think at every point the United States has understated what it is prepared to do. And we're prepared to do, I believe, everything that's necessary to get this problem righted. I am very confidant that when the final additions are done, if you include private and public aid together, we're going to massively exceed whatever figures the government is committed to.

WALLACE: Congressman we just have a tiny bit of time left. Do you believe that the U.S. response is sort of changing some hearts and minds in this region, winning over some of the president's critics by the American response?

LEACH: All I can tell you is I am extraordinarily proud of what I've seen of the men and women in uniform. When we visited the Aircraft Carrier Abraham Lincoln the pride of those men and what they are doing is just enormous.

I'm also extraordinarily proud of the professional United States foreign service, the United States Agency for International Development and the incredible panoply of nonprofit organizations, many of them faith based.

WALLACE: All right. Congressman Jim Leach, we have to leave it there, a member of the House International Relations Committee, leading a congressional delegation to the region. We thank you for your thoughts on this Sunday very much.

Turning now to the search by Democrats for a new party chairman. Democrats admit changes have to be made if the party ever wants to win the White House. Contenders for the party chairmanship say it was a mistake to ignore southern states in presidential elections.

The Democratic National Committee's southern caucus met in Atlanta Saturday. The first of four regional events aimed at selecting a new chairman.

Former Indiana congressman and member of the 9/11 Commission, Tim Roemer formally announced his candidacy this morning on a Sunday interview program. Yesterday he recommended that the party be more inclusive.

(BEGIN VIDEO CLIP)

TIM ROEMER, FMR. INDIANA CONGRESSMAN: I will not veer this party to the right nor should we steer it to the left. We need a bigger bus to bring in more voter sin this great party.

(END VIDEO CLIP)

WALLACE: And there are a handful of other candidates for Democratic Party chairman. And then there is former presidential candidate Howard Dean, who is expected to announce he is running this week. Dean says he would not use the DNC chairmanship as a stepping stone for another presidential run.

(BEGIN VIDEO CLIP) HOWARD DEAN, FMR. PRESIDENTIAL CANDIDATE: People have asked me how come you don't run for president again in 2008. The answer is I don't think anybody -- Democrats are going to win for the president in 2008 unless we make the changes that need to be made in the DNC.

(END VIDEO CLIP)

WALLACE: And the Democrats will pick their new chairman on February 12th.

And there is a new development to tell you about this morning concerning the leadership of the Democratic Party on Capitol Hill. House Minority Leader Nancy Pelosi has named Congressman Rahm Emanuel of Illinois to lead the Democratic Congressional Campaign Committee.

Pelosi says House Democrats are focused and determined to win a majority in the House in next year's elections and she says Emanuel will be an outstanding leader in that effort.

In the 1980s he held senior staff positions at the Democratic Congressional Campaign Committee. He later served as a top White House adviser to Former President Bill Clinton. He has also been a guest here on INSIDE POLITICS SUNDAY and we look forward to having him back here sometime soon.

Well coming up next here the American take on the Palestinian election. We'll speak with two congressman. One is observing the voting first hand. Will the results lead to peace in the Middle East?

Plus the Gonzales grilling. We'll get analysis on the attorney general nominee's Senate hearing this week.

And guess who's considering a run for the White House in 2008? A former House speaker is keeping the option open.

That's all straight ahead. Don't go away.

(COMMERCIAL BREAK)

WALLACE: And welcome back. Let's return to the Palestinian elections. Voting hours have been extended. Voters should go to the polls and voting should wrap up we understand just about four hours from now.

Joining us two members of the House International Relations Commission. In Jerusalem Washington's Democratic Congressman Adam Smith. He is observing the Palestinian elections today. And joining us here in Washington, Indiana Republican Congressman Mike Pence.

Gentleman thanks for being here with us.

Congressman Smith let me begin with you. You are observing today. What have you been seeing so far when it comes to turnout?

REP. ADAM SMITH (D) WASHINGTON : Well the turnout when we went to a couple of polling stations earlier today, at those stations was relatively low. We were there 1:30, 2:30. It's hard to tell because most Palestinians will be getting off work at around five and the anticipation was that the bulk of the voting would take place between five.

And at the time they had said seven, but as you just mentioned they've extended those house. But it was very well organized. There was a lot of people at the polls there to help the people to showed up and there certainly seemed to be a considerable amount of enthusiasm for the process, which I think is very good news for the middle east.

WALLACE: Congressman Pence also bring this back to the United States. What does this all mean, what's happening there, for the United States? There are some cynics who've watched the Mid East peace process time and time again and say any positive development is only matched with more negativity. That they don't believe ultimately anything will change. What do you say to those critics?

REP. MIKE PENCE, (R) INDIANA: Kelly, I think that this is the beginning of an era of opportunity. That the very likely election as president of Mahmoud Abbas creates an opportunity for the Palestinian leadership to put its own house in order, to begin to uproot the terrorist element within their midst and to introduce a new era where perhaps even a Palestinian state can be created.

WALLACE: Congressman Smith I know right before coming to our interview here you met with Israeli Prime Minister Ariel Sharon. What message are you taking from the Israeli leader? Because there's also a lot of attention on what actions the Israelis are willing to take to allow Palestinian prime minister, if he becomes elected today, Mahmoud Abbas to have success in that post.

SMITH: Prime Mister Sharon made it clear that his number one priority is the security of the Israeli people and he will not compromise on that. He will do what is necessary to make sure that they are secure.

But at the same time he sees an opportunity with a new leader, an opportunity to actually work with the Palestinian people. And I think what he and many observers are hoping for, and certainly they are skeptical for the reasons that you mentioned, but they're hoping that this is an opportunity.

Because in addition to all of the other issues surrounding the conflict one of the biggest ones is the Palestinian people have not had true leadership. They've had a corrupt an ineffective government that they had no faith in. Therefore, you could more easily turn to issues of controversy between them and the Israelis.

With a legitimate government where the people of Palestine have a chance to have a voice to have a say to have some control of their destiny that just opens up a wide range of options. So I think the prime minister is cautious about it. Certainly he knows the history you describe better than any of us.

But there's a chance, there's an opportunity and he is going to seize upon that and try to open up better relations with the Palestinians now that Yasser Arafat is gone.

WALLACE: And Congressman Pence you of course heard President Bush not too long ago say he's willing to spend the capital needed to try and bring about a Palestinian state alongside a secure Israel. What do you think this presidents needs to do and how quickly does he need to do it?

PENCE: Well clearly when President George W. Bush puts his mind to something things happen. And he has really thrown his cap over the wall for the Middle East peace process.

WALLACE: You know, some of his critics will say he didn't do much or didn't do enough in the past four years during his first term.

PENCE: Well that's right. But to Adam's point, the past leadership the late Yasser Arafat and the government over which he presided was the wrong leadership for the Palestinian people. This president was right not to meet with Yasser Arafat.

But now as soon as the polls close, as soon as Mahmoud Abbas becomes President Abbas I think you're going to see this president step forward, bring together international support. There's been talk of increasing international support for the Palestinian authority, and U.S. support that many of us in Congress believe must be tied to fundamental reforms and a fundamental attack of the terrorist element within the Palestinian Authority will be key.

WALLACE: Congressman Smith are you satisfied with what the U.S. government has been doing mainly President Bush so far when it comes to the Middle East peace process?

SMITH: I certainly think there have been -- I agree with Congressman Pence on some decisions that were made. I think the bigger issue is sort of what the administration does in the broader Muslin community throughout the world.

We need to enhance our credibility in the Arab world and other Muslim communities as well so that we can get some credibility back to be an effective partner here in the Middle East.

So I think what's going on in the Middle East I certainly agree that the approach to Arafat was correct. Now we have an opportunity. I just hope the president seizes it.

WALLACE: And let's turn both of your attention to the Iraqi elections scheduled to take place three weeks from today. Congressman Pence you know Brent Scowcroft, the former National Security adviser to Former President Bush, wrote a piece or talked a bit this week saying that he thinks this election if the Sunnis don't take part in a great number that this election could ultimately lead to civil war inside Iraq.

He expresses a great deal of concern. What do you say to that?

PENCE: Well what I say is I believe that President Bush is precisely right to keep his eye fixed on the prize, to continue engagement on the ground with the Sunnis leadership and population to encourage them to be a part of this process.

But saying tot he world community, as Adam just said, a message that we send to the world community in Iraq is that we are committed to democracy, we are committed to an Iraqi government led by and elected by the Iraqi people. And that means sticking with the date for the election.

WALLACE: Congressman Smith do you agree sticking with the date? Is there concern though that again if a large portion of the population does not participate that these elections will be viewed as illegitimate?

SMITH: There are enormous problems in Iraq. I mean I think certainly spreading democracy and greater freedom in the Middle East is a huge part of improving relations with the Arab world. Ironically we're in a greater position to do that with the Palestinians I think than the Iraqis because the security situation in Iraq is so out of control as is the building of the infrastructure.

And it's sort of a catch-22. Until you can get the security under control you can't build an electricity grid. You can't build security systems. You can't get the unemployment rate below 50 percent. But you can't do that because the security situation is out of control and that's part of what's driving people to join the opposition, to join the terrorists in Iraq.

So, the elections at this point have to happen on January 30th just because it would be, I think, a really bad sign if they didn't. But just having those elections on January 30th I think we've got a long, long way to go in Iraq and it's all about getting the security situation under control, which right now it is not in too much of the country.

WALLACE: All right. Gentlemen we have to leave it there. Congressman Adam Smith we know you have to observe a little bit more of the Palestinian election process. And Congressman Mike Pence we know you have to hurry to Indiana. Your state dealing with a lot of weather woes. So...

PENCE: A lot of difficulty Kelly. Thanks.

WALLACE: ...we'll be watching. Thanks again to both of you for being here with us.

And for more on the Palestinian elections be sure to stay tuned to CNN's late edition. Wolf Blitzer speaks with Palestinian Cabinet Minister Nabil Sha'ath and Israel's Vice Prime Minister Ehud Olmert. That's at noon eastern, 9 a.m. Pacific.

Up next grim news about a U.S. submarine accident in the Pacific. That story plus a look at the rest of the day's headlines after the break.

And as Palestinians go to the polls today Bill Schneider looks ahead at the elections we've been talking about scheduled for the end of this month. His Story Behind the Story is straight ahead. We'll be right back.

(COMMERCIAL BREAK)

(NEWSBREAK)

WALLACE: Thanks, Betty.

In just three weeks, Iraqis go to the polls in that country's first free public elections. CNN's Senior Political Analyst Bill Schneider looks behind the story as he uncovers some unique parallels with the recent U.S. presidential ballot.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: No doubt about it there are people trying to kill people who want to vote and they make it clear. "If you vote, we'll kill you."

BILL SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): That's not Ohio the president is talking about, it's Iraq. The U.S. military commander says many areas of Iraq are not secure enough to hold an election this month.

LT. GEN. THOMAS METZ, MULTINATIONAL CORPS-IRAQ: I can't guarantee that every person in Iraq that wants to vote goes to a polling booth and can do that safely.

SCHNEIDER: Iraq's interim president has raised the possibility of postponing the election and says the United Nations...

GHAZI AL-YAWER, IRAQI INTERIM PRESIDENT: Should really stand up for their responsibilities and obligations by saying whether that's possible or not.

SCHNEIDER: President Bush spoke to President Yawer about the election and it sounds like they were talking about, well, Ohio.

BUSH: I said, "How is your campaign going?" He said, "It's going fine." He's out there trying to convince people to vote for him.

SCHNEIDER: But Iraq's former foreign minister wrote last week, "Nothing remotely like electioneering takes place in Iraq. For candidates to announce mass rallies would be to issue an open invitation for terrorists to attack." Nevertheless, the White House insists that the election will take place as scheduled.

BUSH: We're having elections on January the 30th. It's going to be an historic moment.

SCHNEIDER: The idea is that after the election the insurgency will no longer be a war against the foreign occupation. It will be a war against Iraq's own government but that government has to be accepted by the Iraqi people as legitimate. Will it? ZBIGNIEW BRZEZINSKI, FMR. NATL. SECURITY ADVISER: I think we have to accept the reality, probably the reality of a Shiite theocratic government which is not going to be a general democracy.

SCHNEIDER: That could happen if large numbers of Sunni voters, the minority that used to rule Iraq, do not participate either because of intimidation or a boycott. That has President Bush worried as he once was about Ohio.

BUSH: Now we're beginning to worry about the size of the turnout, something I was worried about right here two months ago.

(END VIDEOTAPE)

SCHNEIDER: Why should the administration expect Iraqi voters to turn out in large numbers? Well, same reason as in Ohio, to make a statement in defiance of their opponents, in this case insurgents who are trying to kill democracy.

WALLACE: Bill, so interesting listening to the president's words and, again, your comparison Ohio to Iraq.

But let's turn out attention to the Palestinian elections, which we were talking about in the last segment. How much or what kind of mandate does Mahmoud Abbas need in terms of these elections to have success as a leader?

SCHNEIDER: It's pretty clear he's going to win a solid vote because none of his opponents really have credibility. The question is turnout. Will there be a large enough turnout to create the sense that he has a real mandate to go ahead with his program which seems to endorse a reviving of the peace process in the Middle East.

He has been critical of the militants and of the intifada and says Palestinians have to really try another option, which is the peace process. The question is not only what percentage of the vote he gets but how large a number of Palestinians turn out.

It's really Abbas versus Hamas, the militant organization. They're not participating in the election and a lot of their supporters may try to make a statement simply by not voting.

WALLACE: And the question will be does he have the political capital to lead and to bring about change?

SCHNEIDER: And that will depend on turnout.

WALLACE: Absolutely. Bill Schneider with the story behind the story, great, thanks for coming in, of course. Great to see you.

Coming up next here on INSIDE POLITICS SUNDAY, why did the U.S. government pay a conservative commentator to promote its initiatives on his television show? We'll ask three political journalists in our reporter roundtable. That's up next.

And later, a look back at the week's extraordinary recovery efforts from the tsunami disaster.

That's all ahead. Stay with us.

(BEGIN VIDEO CLIP)

ANNOUNCER: Checking our political history book, January 8, 1964, President Lyndon Johnson used his State of the Union Address to declare a war on poverty in America. President Johnson's crusade put government to work improving the lives of 35 million Americans living in poverty. Congress went on to establish programs, including Head Start, Medicare and Medicaid.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WALLACE: And welcome back.

With Congress back in session this has been a busy week in Washington. Among the hot topics, the grilling of Attorney General Nominee Alberto Gonzales, Social Security reform and the leadership of the Democratic Party.

Here with our political report, CNN Political Editor John Mercurio, Ron Brownstein with "The Los Angeles Times," and Susan Milligan with "The Boston Globe." Thanks for being here, good to see you.

RON BROWNSTEIN, "L.A. TIMES": Thank you, Kelly.

JOHN MERCURIO, CNN POLITICAL EDITOR: Thank you.

SUSAN MILLIGAN, "BOSTON GLOBE": Thank you.

WALLACE: Let's start with Alberto Gonzales, the grilling of the attorney general nominee, a lot of questions about the White House policy when it comes to the prison abuse scandal at Abu Ghraib, also the White House position when it comes to torture. Let's first listen to a comment from Alberto Gonzales.

(BEGIN VIDEO CLIP)

ALBERTO GONZALES, ATTORNEY GENERAL NOMINEE: And the president has made clear that he condemns his conduct and that these activities are inconsistent with his policies. He has also made clear that America stands against and will not tolerate torture under any circumstances.

(END VIDEO CLIP)

WALLACE: Let's begin with you. Rule number one at these confirmation hearings do no damage. Did Gonzales do any damage to himself?

BROWNSTEIN: Yes, I think he did actually. I mean I think Democrats going in had made the decision that they were not going to go to the mattresses on this nomination. They were not going to go all out to stop it.

They were going to try to husband their fire for judicial nominations. I think that's the basic calculation they've made, fight the judicial nominations harder than the executive branch nominations.

But there was a lot of frustration expressed at this hearing, a lot of sense that he was not being either fully candid, a lot of things he said he couldn't remember. They felt that some of the answers were vague and evasive.

Senators said that during the hearing itself, which is a little unusual, so after it I think there's probably a little more resistance to him in the Democratic Party than there was to begin with but still probably not enough to make it a full scale fight.

WALLACE: Anything to put his confirmation in jeopardy though, Susan?

MILLIGAN: No, and it was never in jeopardy. These hearings are one of the rare opportunities Democrats have to sort of say their peace and make their criticisms of the Bush administration as a whole and they certainly took that opportunity in these hearings. But, no, there's -- as Ron said, they're going to save their big fight for the judicial nominations.

MERCURIO: I talked to one committee aid on Friday afternoon actually and she said that she was upset with his performance, with his testimony and he was probably going to win with 90, at least 90 votes and that was a Democratic (UNINTELLIGIBLE).

WALLACE: Any concern at the White House, Ron, about his performance and does it impact him when he becomes leader of the Justice Department?

BROWNSTEIN: Well, that's interesting. I don't think there's a sense of concern about the nomination itself, as Susan said, but I do think that this is -- there aren't that many opportunities for Democrats to raise these questions and I do think that the performance on this one -- the first time out of the box was not that strong by Gonzales and he probably will have to do better in the future in sort of explaining what his role was and what the administration view is.

WALLACE: Topic number two, we seem to talk about it every week, who is going to lead, John, the Democratic National Committee? What is going on because I heard one quote saying that there is so much disarray it looks like the Democratic Party continues to be in a "state of confusion?"

MERCURIO: That's exactly what I think. I mean, look, you're going to see probably two more people. We saw Tim Roemer, the former Congressman, the 9/11 Commission chairman or commissioner get into the race today, Howard Dean expected after comments that he made yesterday in the Southern Caucus meeting expected to get in, in the next couple of days.

I think you're probably going to see the race sort of coalesce around those two, Martin Frost also sort of a strong candidate. But I think you're right. The larger problem is that there is this free for all in the first place.

I mean we're two months out from a pretty devastating defeat for the Democratic Party. There's no consensus on who the leader should be. There's no unity among the rank and file members and there's no sense of what the party needs to do to get beyond this defeat.

WALLACE: And, Susan, I know you've been doing a bit of reporting on this also, a lot of concern also about not writing off the south, not writing off the west, appealing to Hispanics. What are you picking up from your sources?

MILLIGAN: Well, there is some talking going on in the Democratic Party about whether the party needs to soften its rhetoric on abortion and the Republicans, you know, seem to be very good at having the pro- choice Republicans in the party without actually changing their position against abortion.

So, there's some talk among Democrats that they need to not alienate cultural conservatives, particularly in the south with this abortion issue. So, they wouldn't change their position exactly but they would just change the way they approach it.

WALLACE: Right.

BROWNSTEIN: In the long run, the DNC chairman is not going to define the party. It will be defined by the congressional leadership and ultimately the presidential candidates.

But it is the first decision Democrats are making after this very disappointing election for them and so it requires kind of an outside symbolic implication. Do you pick someone from a red state or do you pick someone like Dean who mostly appeals to the base?

WALLACE: And I want to pick up on something else, Social Security reform, which you've been writing a lot about. There seems to be a lot of concern, particularly in Republican circles, comments from Republicans talking to the White House saying this White House needs to get bipartisan support in order to get anything passed. What are you picking up, Ron?

BROWNSTEIN: It is a very difficult challenge here, Kelly, because on the one hand what you might have to do to get bipartisan support may drive away some of the conservatives. The basic question, there are two basic questions on Social Security.

First, the president is trying -- excuse me. The president is trying to do two things here not one. We focus primarily on creating individual accounts. People can invest in the stock market. He also, the White House, wants to change the long term benefit structure to reduce the gap in Social Security's finances.

A lot of conservatives are leery about doing that, cutting benefits or at least cutting the growth of future benefits without Democratic support. The problem is Democrats may not come along unless you raise taxes to help pay for the individual accounts as Lindsey Graham is proposing in the Senate. A lot of conservatives have heartburn over that. So, putting together the physics of this is very complicated.

WALLACE: And also, Susan, it seems the Democratic strategy, we heard Democratic Congressman Charlie Rangel in the radio address yesterday saying there is no crisis here. So, the Democratic strategy is what?

MILLIGAN: Well, is to basically portray the social -- take apart the Social Security plan in the same way that the Republicans took apart the Clinton health care plan in the 1990s and destroy it that way.

Social Security is -- if health care is a hot button issue, Social Security is even more so, particularly since the prescription drug bill is really going to kick in next year and I think that there are some members who are very leery about taking on the AARP.

WALLACE: And, John, you know there is probably as war room already in the works at the White House for the president to sell this, to try to make the case first picking up on the Democratic argument that there is no crisis. What are you picking up from White House sources on that?

MERCURIO: That it's primarily going to be a State of the Union Address issue that he's going to take it not just, not on the issue, not on the policy specifics but on sort of the personal stories, the need for, you know, Americans to invest in their future, to invest in their retirement and I think you're going to see him come out aggressively after the State of the Union on that.

BROWNSTEIN: Look, I mean it's not a crisis but there is a real problem. There is a long term financing gap between the amount of revenue that Social Security is slated to bring in and the benefits that have been promised over the next (UNINTELLIGIBLE).

There's a broader question, Kelly, which is the increasing domination of the budget by programs for the elderly, Medicare, Medicaid, Social Security. There is an argument to be made among two Democrats that if you don't control the issue you'll have no money to spend on anything else. But by arguing that it's a crisis, he allows them to push back and so, no, it isn't and that's a very different form of argument that he's (UNINTELLIGIBLE).

WALLACE: Final topic and, John, why don't you weigh in first. I know you were reporting Armstrong Williams paid $240,000 by the Education Department to tout the No Child Left Behind Act. I guess the question is what is the White House saying about this?

MERCURIO: Well, what the White House is saying about it, I think, is that they're sort of shrugging their shoulders. They're admitting that they probably, you know, mis-stepped but I think the biggest question we have here is, is Armstrong Williams the only person who has been paid or approached even by the administration? Look, I think the Education Department came out and said that he was the only person that they approached. The investigation that's probably going to proceed at this point needs to focus on who else, other departments, other agencies that approach other journalists about what is a pretty egregious error on their part.

WALLACE: Final word, Susan, because Congress is already getting into the act. We had Democratic Congressman George Miller saying he's up in arms. What are you picking up from people on the Hill?

MILLIGAN: Well, yes, I think there is going to be a look. I don't know if there will be a formal investigation but a look into whether the White House has done this on other occasions. I mean it certainly raises some pretty serious questions about the role of an independent media in a democracy.

WALLACE: Absolutely. Susan Milligan of "The Boston Globe," Ron Brownstein "Los Angeles Times," John Mercurio CNN's own Political Editor, great seeing you all. Thanks again for being here. We appreciate it.

MERCURIO: Thanks Kelly.

WALLACE: Coming up next here on INSIDE POLITICS SUNDAY, find out what former Speaker of the House Newt Gingrich has to say about a possible presidential bid in 2008. That's right. That's all straight ahead here on INSIDE POLITICS SUNDAY.

(COMMERCIAL BREAK)

WALLACE: Time to check the latest news in our "Political Bytes."

Former Speaker of the House Newt Gingrich is making the headlines this Sunday with a new book called "Winning the Future," a 21st Century contract with America.

In the book he criticizes the Bush administration's policies on Iraq and says the U.S. lacked a strategy to deal with insurgents. Gingrich's upcoming book tour includes the early campaign states of New Hampshire and Iowa and he says he has not ruled out a possible presidential bid in 2008.

Another former member of Congress was remembered yesterday. Memorial services were held for Shirley Chisholm, the first black woman elected to Congress. The Democratic legislator represented her Brooklyn, New York district for 14 years ad also ran for president in 1972. She died last weekend at the age of 86.

And Rosemary Kennedy, sister of President John F. Kennedy, also passed away this week. According to a statement issued by the family, Senator Edward Kennedy and her sisters were by her side at a Wisconsin hospital.

The eldest Kennedy sister, Rosemary, was born mentally retarded and underwent a lobotomy at the age of 23. She served as an inspiration to her sister, Eunice Kennedy Shriver, who founded the Special Olympics for mentally disabled athletes. Kennedy was 86 years old.

Well, coming up next here on INSIDE POLITICS SUNDAY, we will take a look back at the sights and sounds of the tsunami relief efforts and a bit of hope for the future. That's all straight ahead.

(COMMERCIAL BREAK)

WALLACE: It was two weeks ago when we first heard about the massive tsunamis tearing throughout Southeast Asia. Since then we have all learned more and more each day about the devastation, the lives lost and the lives that will never be the same.

And what we have also learned from the people who are getting a firsthand look is that this is a disaster and a global response unlike anything this generation has ever seen.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: No briefing book, no television picture really can convey what really happened here to drive through the town, to see all these fishing boats that have been tossed up on the shore. I've been in war and I've been through a number of hurricanes, tornadoes and other relief operations but I have never seen anything like this.

KOFI ANNAN, U.N. SECRETARY-GENERAL: Today, we've had the chance to visit some of the areas that have been destroyed by the tsunami. I must admit I have never seen such utter destruction mile after mile and you wonder where are the people? What happened to them?

JAN EGELAND, U.N. UNDERSECRETARY-GENERAL: Big progress is being made by the day. We are reaching many more people today than we did yesterday. I do not think we are even close to having any figures of how many people died, how many people are missing, how many people are severely affected.

BUSH: Our military is doing heroic work in helping to save life. They're flying rescue missions 24 hours a day.

SGT. CLAUDE ILE, U.S. MARINE CORPS: What do they want to be doing right now? More. More.

(END VIDEO CLIP)

WALLACE: Men and women of the American military happy to help.

INSIDE POLITICS SUNDAY continues in just a moment.

(COMMERCIAL BREAK)

WALLACE: That's all the time we have. For everyone at INSIDE POLITICS SUNDAY, thanks so much for joining us.

Coming up in 30 minutes a live "RELIABLE SOURCES," covering the tsunami, how journalists cope while covering such a large scale disaster. And don't miss "LATE EDITION." Wolf Blitzer speaks with Secretary of State Colin Powell about the tsunami relief efforts, the Palestinian elections and much more.

For now, thanks again for watching. I'm Kelly Wallace in Washington. Have a terrific Sunday. We'll see you again right here next week.

The news continues now with "CNN LIVE SUNDAY."

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired January 9, 2005 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KELLY WALLACE, HOST: INSIDE POLITICS today, the Palestinian election takes center stage this Sunday and the outcome could help define President Bush's legacy.
Tsunami politics, as U.S. lawmakers tour the devastated region we'll get a first person account of the destruction and the hope for the future.

And is he irreplaceable? Who can succeed Terry McAuliffe as the head of the Democratic National Committee? Another candidate just announced his intentions. We'll tell you who that is. That's all straight ahead.

ANNOUNCER: Life from Washington, this is INSIDE POLITICS SUNDAY.

WALLACE: It is 11 days until the presidential inauguration and three weeks until scheduled elections in Iraq. But today, it is election day in the Middle East. Good Sunday morning to you. I am Kelly Wallace in Washington. Thanks so much for joining us.

As you know by now, politics doesn't take weekends off and neither do we. Another jam packed hour ahead. Moments from now we will take you to Gaza. As Palestinians head to the polls, an election hat could signal new momentum for the Middle East peace process.

Also, the latest on the tsunami disaster, as Secretary of State Colin Powell gets ready to brief the president on what he has seen and on what more the U.S. can do. And our reporter roundtable on the news of the past week and what is likely to make political news in the week ahead.

But first to the Palestinian election where the outcome is foreseeable, but what comes after that is almost completely unknown.

We get the latest now from CNN's Ben Wedeman in Gaza. And Ben with just about two hours until the polls close what has turn out been like so far?

BEN WEDEMAN, CNN CORRESPONDENT: Actually Kelly we've just heard that they've extended voting for another two hours. So that means there are two hours left to voting here. And what we've seen so far is the turn out has been moderate. Not quite as high as some might have expected.

We've been at this polling station in the Jablia (ph) refugee camp all day long and we've seen people in sort of dribs and drabs coming throughout the day. Most of the people I've spoken to said they would be voting for Mahmoud Abbas, who is expected to win in these elections.

And what is important, especially for U.S. policy in the Middle East, is that one of the top points in his program is the end of what he calls the militarization of the intifada or the Palestinian uprising. He wants to see an end to armed activities, the armed struggle essentially against Israel, which is a very important point when trying to resume negotiations with Israel, with Israeli Prime Minister Ariel Sharon.

The Israelis for their part have said that the first test for any new leader of the Palestinian authority who will be filling the shoes of the deceased Palestinian leader Yasser Arafat will be to put an end to the rocket attacks that have been occurring with fair frequency from Gaza into Israeli towns adjacent to the Gaza Strip and onto Jewish settlements.

Sot hat's really going to be one of the things to watch in the coming weeks as whoever wins these elections and of course it'' widely expected that Mahmoud Abbas will win the elections, whether he can make good on his promise to Palestinians and his promise in effect to the Israelis to end the violence and to move forward in the peace process.

Kelly.

WALLACE: Ben of course as you're talking about all of this and you're talking to members of the group Hamas as well what's the sense really in Gaza of support for Hamas now and how will that sort of play into Mahmoud Abbas' chances again if he is elected today in terms of success as the Palestinian leader?

WEDEMAN: Well, Kelly, Hamas is very strong here in Gaza, quite stronger than anywhere else in the Palestinian territories. Now they've been rather coy about their position in these elections. They did not put forth a candidate because they don't recognize the Palestinian authority. But at the same time they are in a dialogue, a constant dialogue with the Palestinian Authority.

There have been some tensions in recent weeks because Hamas insists on the continuation of the arms struggle, which puts them in something of a opposed position to Mahmoud Abbas and so, they're going to have to work out some sort of agreement otherwise there could be some sort of confrontation between the two.

We do know that Hamas even though it didn't participate in these elections it will be participating in the July legislative election. So they are jockeying for power. The question is do they want to confront whoever becomes the leader of the Palestinian Authority.

Kelly.

WALLACE: OK, Ben. We'll have to leave it there. We'll be watching your reports throughout the day on CNN and CNN international. Ben Wedeman reporting from Gaza. Observing today's Palestinian election is a man we haven't' seen for quite a while. Former Democratic presidential candidate John Kerry, who is in the middle of a two week visit to the region. He is one of dozens of international observers of the election process. And one of those observers, U.S. Congressman Adam Smith is our guest a bit later in this program.

One of the main topics on the Sunday news programs this day, the countdown to election day in another part of the world in Iraq. Voters will head to the polls three weeks from today. Senate Majority Leader Bill Frist says the elections are a key milestone for the people of Iraq.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST, (R-TN) MAJORITY LEADER: Those elections clearly are not going to be perfect elections. And in many peoples eyes people would say, you know, those are not fair elections. What they will accomplish is by international standards credible elections that are independent. That the majority of the people in Iraq, regardless of ethnic group or religion, will participate in.

(END VIDEO CLIP)

WALLACE: And the Tennessee Republican made his comments while on a visit to Kuwait.

Now to the southern Asia disaster zone. We have new pictures of the tsunami slamming ashore the day after Christmas in Indonesia's Aceh province. You see these pictures now. This is some of the most dramatic video of the event itself as the wall of water swept away almost everything in its path.

The video was apparently taken by a local photographer who normally videotapes weddings.

As the relief work continues gunfire is reported on Indonesia's Sumatra Island. Relief workers are being warned about possible attacks by rebel forces.

Meantime, United Nations Secretary General Kofi Annan has arrived in Maldives after wrapping up a two day visit to Sri Lanka.

Well U.S. Secretary of State Colin Powell will brief President Bush, we believe, tomorrow on his results of his mission to the tsunami disaster zone last week. CNN's Suzanne Malveaux is on the north lawn of the White House.

And Suzanne, do we get any sense listening to the Secretary of State in interviews of what message he'll be giving to President Bush?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well Kelly as you know of course initially the White House was criticized for what many saw as a slow response, a relatively small contribution.

But the administration believes that with this robust military humanitarian effort in the region as well as his high profile visit from Secretary Powell that largely that perception has been diminished.

Now what the secretary said this morning to our own Wolf Blitzer he says that he will tell the president of course that this is a long term mission. That this is important the United States stay engaged and that they may never know the full accounting for those who are lost.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: We will be making an assessment over time to see what is needed and if $350 million isn't enough I'm sure the president will try to get more into the account.

(END VIDEO CLIP)

MALVEAUX: Secretary Powell also talked about the importance of the mission there. He is in Nairobi, Kenya. That is where of course he is anticipating watching the signing of a very important historic peace accord for Sudan. That is southern Sudan ending a civil war that has been going on for more than two decades.

But the secretary also saying that the jury is still out when it comes to western Sudan or the Darfur area. That is where genocide has occurred and it is still unclear whether or not that is still being carried out today.

Kelly.

WALLACE: And Suzanne listening to Secretary of State Powell in that with Wolf Blitzer as well, what is he saying about concerns again about security and participation by the Sunnis in the Iraqi election scheduled three weeks from today?

MALVEAUX: Well you know what's really interesting Kelly is that the secretary acknowledges that there are concerns about that. First of all whether or not the Sunnis will participate and secondly, whether or not security is really going to disrupt those elections, whether or not the Iraqis will consider it legitimate.

But he does make the point that having taken into account all of those concerns, those dangers he still believes that it's important to have those elections on January 30th. That if you undermine that deadline, you undermine that date then ultimately you undermine the legitimacy of the elections.

That that has to take place at some point. January 30th is as good as any, but they know they're going to have some difficulties.

WALLACE: OK. Suzanne Malveaux reporting from the White House. We appreciate it very much. Thanks again.

And you can see the complete interview with Secretary of State Colin Powell on "LATE EDITION WITH WOLF BLITZER.". That's today at noon eastern, 9 a.m. Pacific. Turning our attention again to the tsunami disaster. Congressman Jim Leach spent the week getting a firsthand look at the devastation. The Republican from Iowa is a member of the House International Relations Committee and also the chairman of the Asia Pacific Subcommittee and he joins us now from Bangkok, Thailand. Congressman Leach thanks so much for being with us.

REP. JAMES LEACH (R) IOWA: Good to be with you, Kelly.

WALLACE: We have a slight delay which we will get through here. Congressman first give us your reaction to what you have been seeing over the past several days.

LEACH: Well there are two truly unprecedented circumstances. One is the tsunami itself, which in world history has seldom been replicated, a disaster of this nature. Secondly is the extraordinary response of the international community.

People of the world who appear to me to be crying out for a sense of idealism have really responded with unprecedented compassion. We have the United States. We have the Nordic countries, Germany, Japan, China, Australia, Singapore really pouring relief efforts into this region.

It is really a heart moving trauma and also a heart moving response where people, some in uniform, some out of uniform are truly soldiers for peace.

WALLACE: Congressman are we seeing any chaos following all of this compassion? What we mean are reports that some relief groups are overwhelmed by all the aid they're receiving and having difficulties getting that much needed aid to the people who need it most?

LEACH: Well everybody is so committed to giving support that a great deal of aid is arriving. There are some transportation bottlenecks, but it's extraordinary how they're being dealt with. People on a very ad hoc basis. There weren't' great contingency plans anywhere in the world for this sort of thing.

But committed people of common sense and compassion are really working hard. Now I'm confidant if disease can be avoided there will probably be too much in terms of medical supplies. But it's better to be prepared than otherwise.

Now in Indonesia there's still enormous problems with lack of access to many areas by road. The helicopters have proven to be enormously important and quite effective in their deliverance.

WALLACE: Now Secretary of State Colin Powell will be briefing President Bush about what he has seen. As you know, the U.S. initially pledged $350 million. That is a little bit less than some other countries, Australia $764 million, Germany $664 million. The president saying again this is the initial response.

After what you have seen congressman do you think more money from the United States government is needed now? LEACH: Well I think at every point the United States has understated what it is prepared to do. And we're prepared to do, I believe, everything that's necessary to get this problem righted. I am very confidant that when the final additions are done, if you include private and public aid together, we're going to massively exceed whatever figures the government is committed to.

WALLACE: Congressman we just have a tiny bit of time left. Do you believe that the U.S. response is sort of changing some hearts and minds in this region, winning over some of the president's critics by the American response?

LEACH: All I can tell you is I am extraordinarily proud of what I've seen of the men and women in uniform. When we visited the Aircraft Carrier Abraham Lincoln the pride of those men and what they are doing is just enormous.

I'm also extraordinarily proud of the professional United States foreign service, the United States Agency for International Development and the incredible panoply of nonprofit organizations, many of them faith based.

WALLACE: All right. Congressman Jim Leach, we have to leave it there, a member of the House International Relations Committee, leading a congressional delegation to the region. We thank you for your thoughts on this Sunday very much.

Turning now to the search by Democrats for a new party chairman. Democrats admit changes have to be made if the party ever wants to win the White House. Contenders for the party chairmanship say it was a mistake to ignore southern states in presidential elections.

The Democratic National Committee's southern caucus met in Atlanta Saturday. The first of four regional events aimed at selecting a new chairman.

Former Indiana congressman and member of the 9/11 Commission, Tim Roemer formally announced his candidacy this morning on a Sunday interview program. Yesterday he recommended that the party be more inclusive.

(BEGIN VIDEO CLIP)

TIM ROEMER, FMR. INDIANA CONGRESSMAN: I will not veer this party to the right nor should we steer it to the left. We need a bigger bus to bring in more voter sin this great party.

(END VIDEO CLIP)

WALLACE: And there are a handful of other candidates for Democratic Party chairman. And then there is former presidential candidate Howard Dean, who is expected to announce he is running this week. Dean says he would not use the DNC chairmanship as a stepping stone for another presidential run.

(BEGIN VIDEO CLIP) HOWARD DEAN, FMR. PRESIDENTIAL CANDIDATE: People have asked me how come you don't run for president again in 2008. The answer is I don't think anybody -- Democrats are going to win for the president in 2008 unless we make the changes that need to be made in the DNC.

(END VIDEO CLIP)

WALLACE: And the Democrats will pick their new chairman on February 12th.

And there is a new development to tell you about this morning concerning the leadership of the Democratic Party on Capitol Hill. House Minority Leader Nancy Pelosi has named Congressman Rahm Emanuel of Illinois to lead the Democratic Congressional Campaign Committee.

Pelosi says House Democrats are focused and determined to win a majority in the House in next year's elections and she says Emanuel will be an outstanding leader in that effort.

In the 1980s he held senior staff positions at the Democratic Congressional Campaign Committee. He later served as a top White House adviser to Former President Bill Clinton. He has also been a guest here on INSIDE POLITICS SUNDAY and we look forward to having him back here sometime soon.

Well coming up next here the American take on the Palestinian election. We'll speak with two congressman. One is observing the voting first hand. Will the results lead to peace in the Middle East?

Plus the Gonzales grilling. We'll get analysis on the attorney general nominee's Senate hearing this week.

And guess who's considering a run for the White House in 2008? A former House speaker is keeping the option open.

That's all straight ahead. Don't go away.

(COMMERCIAL BREAK)

WALLACE: And welcome back. Let's return to the Palestinian elections. Voting hours have been extended. Voters should go to the polls and voting should wrap up we understand just about four hours from now.

Joining us two members of the House International Relations Commission. In Jerusalem Washington's Democratic Congressman Adam Smith. He is observing the Palestinian elections today. And joining us here in Washington, Indiana Republican Congressman Mike Pence.

Gentleman thanks for being here with us.

Congressman Smith let me begin with you. You are observing today. What have you been seeing so far when it comes to turnout?

REP. ADAM SMITH (D) WASHINGTON : Well the turnout when we went to a couple of polling stations earlier today, at those stations was relatively low. We were there 1:30, 2:30. It's hard to tell because most Palestinians will be getting off work at around five and the anticipation was that the bulk of the voting would take place between five.

And at the time they had said seven, but as you just mentioned they've extended those house. But it was very well organized. There was a lot of people at the polls there to help the people to showed up and there certainly seemed to be a considerable amount of enthusiasm for the process, which I think is very good news for the middle east.

WALLACE: Congressman Pence also bring this back to the United States. What does this all mean, what's happening there, for the United States? There are some cynics who've watched the Mid East peace process time and time again and say any positive development is only matched with more negativity. That they don't believe ultimately anything will change. What do you say to those critics?

REP. MIKE PENCE, (R) INDIANA: Kelly, I think that this is the beginning of an era of opportunity. That the very likely election as president of Mahmoud Abbas creates an opportunity for the Palestinian leadership to put its own house in order, to begin to uproot the terrorist element within their midst and to introduce a new era where perhaps even a Palestinian state can be created.

WALLACE: Congressman Smith I know right before coming to our interview here you met with Israeli Prime Minister Ariel Sharon. What message are you taking from the Israeli leader? Because there's also a lot of attention on what actions the Israelis are willing to take to allow Palestinian prime minister, if he becomes elected today, Mahmoud Abbas to have success in that post.

SMITH: Prime Mister Sharon made it clear that his number one priority is the security of the Israeli people and he will not compromise on that. He will do what is necessary to make sure that they are secure.

But at the same time he sees an opportunity with a new leader, an opportunity to actually work with the Palestinian people. And I think what he and many observers are hoping for, and certainly they are skeptical for the reasons that you mentioned, but they're hoping that this is an opportunity.

Because in addition to all of the other issues surrounding the conflict one of the biggest ones is the Palestinian people have not had true leadership. They've had a corrupt an ineffective government that they had no faith in. Therefore, you could more easily turn to issues of controversy between them and the Israelis.

With a legitimate government where the people of Palestine have a chance to have a voice to have a say to have some control of their destiny that just opens up a wide range of options. So I think the prime minister is cautious about it. Certainly he knows the history you describe better than any of us.

But there's a chance, there's an opportunity and he is going to seize upon that and try to open up better relations with the Palestinians now that Yasser Arafat is gone.

WALLACE: And Congressman Pence you of course heard President Bush not too long ago say he's willing to spend the capital needed to try and bring about a Palestinian state alongside a secure Israel. What do you think this presidents needs to do and how quickly does he need to do it?

PENCE: Well clearly when President George W. Bush puts his mind to something things happen. And he has really thrown his cap over the wall for the Middle East peace process.

WALLACE: You know, some of his critics will say he didn't do much or didn't do enough in the past four years during his first term.

PENCE: Well that's right. But to Adam's point, the past leadership the late Yasser Arafat and the government over which he presided was the wrong leadership for the Palestinian people. This president was right not to meet with Yasser Arafat.

But now as soon as the polls close, as soon as Mahmoud Abbas becomes President Abbas I think you're going to see this president step forward, bring together international support. There's been talk of increasing international support for the Palestinian authority, and U.S. support that many of us in Congress believe must be tied to fundamental reforms and a fundamental attack of the terrorist element within the Palestinian Authority will be key.

WALLACE: Congressman Smith are you satisfied with what the U.S. government has been doing mainly President Bush so far when it comes to the Middle East peace process?

SMITH: I certainly think there have been -- I agree with Congressman Pence on some decisions that were made. I think the bigger issue is sort of what the administration does in the broader Muslin community throughout the world.

We need to enhance our credibility in the Arab world and other Muslim communities as well so that we can get some credibility back to be an effective partner here in the Middle East.

So I think what's going on in the Middle East I certainly agree that the approach to Arafat was correct. Now we have an opportunity. I just hope the president seizes it.

WALLACE: And let's turn both of your attention to the Iraqi elections scheduled to take place three weeks from today. Congressman Pence you know Brent Scowcroft, the former National Security adviser to Former President Bush, wrote a piece or talked a bit this week saying that he thinks this election if the Sunnis don't take part in a great number that this election could ultimately lead to civil war inside Iraq.

He expresses a great deal of concern. What do you say to that?

PENCE: Well what I say is I believe that President Bush is precisely right to keep his eye fixed on the prize, to continue engagement on the ground with the Sunnis leadership and population to encourage them to be a part of this process.

But saying tot he world community, as Adam just said, a message that we send to the world community in Iraq is that we are committed to democracy, we are committed to an Iraqi government led by and elected by the Iraqi people. And that means sticking with the date for the election.

WALLACE: Congressman Smith do you agree sticking with the date? Is there concern though that again if a large portion of the population does not participate that these elections will be viewed as illegitimate?

SMITH: There are enormous problems in Iraq. I mean I think certainly spreading democracy and greater freedom in the Middle East is a huge part of improving relations with the Arab world. Ironically we're in a greater position to do that with the Palestinians I think than the Iraqis because the security situation in Iraq is so out of control as is the building of the infrastructure.

And it's sort of a catch-22. Until you can get the security under control you can't build an electricity grid. You can't build security systems. You can't get the unemployment rate below 50 percent. But you can't do that because the security situation is out of control and that's part of what's driving people to join the opposition, to join the terrorists in Iraq.

So, the elections at this point have to happen on January 30th just because it would be, I think, a really bad sign if they didn't. But just having those elections on January 30th I think we've got a long, long way to go in Iraq and it's all about getting the security situation under control, which right now it is not in too much of the country.

WALLACE: All right. Gentlemen we have to leave it there. Congressman Adam Smith we know you have to observe a little bit more of the Palestinian election process. And Congressman Mike Pence we know you have to hurry to Indiana. Your state dealing with a lot of weather woes. So...

PENCE: A lot of difficulty Kelly. Thanks.

WALLACE: ...we'll be watching. Thanks again to both of you for being here with us.

And for more on the Palestinian elections be sure to stay tuned to CNN's late edition. Wolf Blitzer speaks with Palestinian Cabinet Minister Nabil Sha'ath and Israel's Vice Prime Minister Ehud Olmert. That's at noon eastern, 9 a.m. Pacific.

Up next grim news about a U.S. submarine accident in the Pacific. That story plus a look at the rest of the day's headlines after the break.

And as Palestinians go to the polls today Bill Schneider looks ahead at the elections we've been talking about scheduled for the end of this month. His Story Behind the Story is straight ahead. We'll be right back.

(COMMERCIAL BREAK)

(NEWSBREAK)

WALLACE: Thanks, Betty.

In just three weeks, Iraqis go to the polls in that country's first free public elections. CNN's Senior Political Analyst Bill Schneider looks behind the story as he uncovers some unique parallels with the recent U.S. presidential ballot.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: No doubt about it there are people trying to kill people who want to vote and they make it clear. "If you vote, we'll kill you."

BILL SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): That's not Ohio the president is talking about, it's Iraq. The U.S. military commander says many areas of Iraq are not secure enough to hold an election this month.

LT. GEN. THOMAS METZ, MULTINATIONAL CORPS-IRAQ: I can't guarantee that every person in Iraq that wants to vote goes to a polling booth and can do that safely.

SCHNEIDER: Iraq's interim president has raised the possibility of postponing the election and says the United Nations...

GHAZI AL-YAWER, IRAQI INTERIM PRESIDENT: Should really stand up for their responsibilities and obligations by saying whether that's possible or not.

SCHNEIDER: President Bush spoke to President Yawer about the election and it sounds like they were talking about, well, Ohio.

BUSH: I said, "How is your campaign going?" He said, "It's going fine." He's out there trying to convince people to vote for him.

SCHNEIDER: But Iraq's former foreign minister wrote last week, "Nothing remotely like electioneering takes place in Iraq. For candidates to announce mass rallies would be to issue an open invitation for terrorists to attack." Nevertheless, the White House insists that the election will take place as scheduled.

BUSH: We're having elections on January the 30th. It's going to be an historic moment.

SCHNEIDER: The idea is that after the election the insurgency will no longer be a war against the foreign occupation. It will be a war against Iraq's own government but that government has to be accepted by the Iraqi people as legitimate. Will it? ZBIGNIEW BRZEZINSKI, FMR. NATL. SECURITY ADVISER: I think we have to accept the reality, probably the reality of a Shiite theocratic government which is not going to be a general democracy.

SCHNEIDER: That could happen if large numbers of Sunni voters, the minority that used to rule Iraq, do not participate either because of intimidation or a boycott. That has President Bush worried as he once was about Ohio.

BUSH: Now we're beginning to worry about the size of the turnout, something I was worried about right here two months ago.

(END VIDEOTAPE)

SCHNEIDER: Why should the administration expect Iraqi voters to turn out in large numbers? Well, same reason as in Ohio, to make a statement in defiance of their opponents, in this case insurgents who are trying to kill democracy.

WALLACE: Bill, so interesting listening to the president's words and, again, your comparison Ohio to Iraq.

But let's turn out attention to the Palestinian elections, which we were talking about in the last segment. How much or what kind of mandate does Mahmoud Abbas need in terms of these elections to have success as a leader?

SCHNEIDER: It's pretty clear he's going to win a solid vote because none of his opponents really have credibility. The question is turnout. Will there be a large enough turnout to create the sense that he has a real mandate to go ahead with his program which seems to endorse a reviving of the peace process in the Middle East.

He has been critical of the militants and of the intifada and says Palestinians have to really try another option, which is the peace process. The question is not only what percentage of the vote he gets but how large a number of Palestinians turn out.

It's really Abbas versus Hamas, the militant organization. They're not participating in the election and a lot of their supporters may try to make a statement simply by not voting.

WALLACE: And the question will be does he have the political capital to lead and to bring about change?

SCHNEIDER: And that will depend on turnout.

WALLACE: Absolutely. Bill Schneider with the story behind the story, great, thanks for coming in, of course. Great to see you.

Coming up next here on INSIDE POLITICS SUNDAY, why did the U.S. government pay a conservative commentator to promote its initiatives on his television show? We'll ask three political journalists in our reporter roundtable. That's up next.

And later, a look back at the week's extraordinary recovery efforts from the tsunami disaster.

That's all ahead. Stay with us.

(BEGIN VIDEO CLIP)

ANNOUNCER: Checking our political history book, January 8, 1964, President Lyndon Johnson used his State of the Union Address to declare a war on poverty in America. President Johnson's crusade put government to work improving the lives of 35 million Americans living in poverty. Congress went on to establish programs, including Head Start, Medicare and Medicaid.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WALLACE: And welcome back.

With Congress back in session this has been a busy week in Washington. Among the hot topics, the grilling of Attorney General Nominee Alberto Gonzales, Social Security reform and the leadership of the Democratic Party.

Here with our political report, CNN Political Editor John Mercurio, Ron Brownstein with "The Los Angeles Times," and Susan Milligan with "The Boston Globe." Thanks for being here, good to see you.

RON BROWNSTEIN, "L.A. TIMES": Thank you, Kelly.

JOHN MERCURIO, CNN POLITICAL EDITOR: Thank you.

SUSAN MILLIGAN, "BOSTON GLOBE": Thank you.

WALLACE: Let's start with Alberto Gonzales, the grilling of the attorney general nominee, a lot of questions about the White House policy when it comes to the prison abuse scandal at Abu Ghraib, also the White House position when it comes to torture. Let's first listen to a comment from Alberto Gonzales.

(BEGIN VIDEO CLIP)

ALBERTO GONZALES, ATTORNEY GENERAL NOMINEE: And the president has made clear that he condemns his conduct and that these activities are inconsistent with his policies. He has also made clear that America stands against and will not tolerate torture under any circumstances.

(END VIDEO CLIP)

WALLACE: Let's begin with you. Rule number one at these confirmation hearings do no damage. Did Gonzales do any damage to himself?

BROWNSTEIN: Yes, I think he did actually. I mean I think Democrats going in had made the decision that they were not going to go to the mattresses on this nomination. They were not going to go all out to stop it.

They were going to try to husband their fire for judicial nominations. I think that's the basic calculation they've made, fight the judicial nominations harder than the executive branch nominations.

But there was a lot of frustration expressed at this hearing, a lot of sense that he was not being either fully candid, a lot of things he said he couldn't remember. They felt that some of the answers were vague and evasive.

Senators said that during the hearing itself, which is a little unusual, so after it I think there's probably a little more resistance to him in the Democratic Party than there was to begin with but still probably not enough to make it a full scale fight.

WALLACE: Anything to put his confirmation in jeopardy though, Susan?

MILLIGAN: No, and it was never in jeopardy. These hearings are one of the rare opportunities Democrats have to sort of say their peace and make their criticisms of the Bush administration as a whole and they certainly took that opportunity in these hearings. But, no, there's -- as Ron said, they're going to save their big fight for the judicial nominations.

MERCURIO: I talked to one committee aid on Friday afternoon actually and she said that she was upset with his performance, with his testimony and he was probably going to win with 90, at least 90 votes and that was a Democratic (UNINTELLIGIBLE).

WALLACE: Any concern at the White House, Ron, about his performance and does it impact him when he becomes leader of the Justice Department?

BROWNSTEIN: Well, that's interesting. I don't think there's a sense of concern about the nomination itself, as Susan said, but I do think that this is -- there aren't that many opportunities for Democrats to raise these questions and I do think that the performance on this one -- the first time out of the box was not that strong by Gonzales and he probably will have to do better in the future in sort of explaining what his role was and what the administration view is.

WALLACE: Topic number two, we seem to talk about it every week, who is going to lead, John, the Democratic National Committee? What is going on because I heard one quote saying that there is so much disarray it looks like the Democratic Party continues to be in a "state of confusion?"

MERCURIO: That's exactly what I think. I mean, look, you're going to see probably two more people. We saw Tim Roemer, the former Congressman, the 9/11 Commission chairman or commissioner get into the race today, Howard Dean expected after comments that he made yesterday in the Southern Caucus meeting expected to get in, in the next couple of days.

I think you're probably going to see the race sort of coalesce around those two, Martin Frost also sort of a strong candidate. But I think you're right. The larger problem is that there is this free for all in the first place.

I mean we're two months out from a pretty devastating defeat for the Democratic Party. There's no consensus on who the leader should be. There's no unity among the rank and file members and there's no sense of what the party needs to do to get beyond this defeat.

WALLACE: And, Susan, I know you've been doing a bit of reporting on this also, a lot of concern also about not writing off the south, not writing off the west, appealing to Hispanics. What are you picking up from your sources?

MILLIGAN: Well, there is some talking going on in the Democratic Party about whether the party needs to soften its rhetoric on abortion and the Republicans, you know, seem to be very good at having the pro- choice Republicans in the party without actually changing their position against abortion.

So, there's some talk among Democrats that they need to not alienate cultural conservatives, particularly in the south with this abortion issue. So, they wouldn't change their position exactly but they would just change the way they approach it.

WALLACE: Right.

BROWNSTEIN: In the long run, the DNC chairman is not going to define the party. It will be defined by the congressional leadership and ultimately the presidential candidates.

But it is the first decision Democrats are making after this very disappointing election for them and so it requires kind of an outside symbolic implication. Do you pick someone from a red state or do you pick someone like Dean who mostly appeals to the base?

WALLACE: And I want to pick up on something else, Social Security reform, which you've been writing a lot about. There seems to be a lot of concern, particularly in Republican circles, comments from Republicans talking to the White House saying this White House needs to get bipartisan support in order to get anything passed. What are you picking up, Ron?

BROWNSTEIN: It is a very difficult challenge here, Kelly, because on the one hand what you might have to do to get bipartisan support may drive away some of the conservatives. The basic question, there are two basic questions on Social Security.

First, the president is trying -- excuse me. The president is trying to do two things here not one. We focus primarily on creating individual accounts. People can invest in the stock market. He also, the White House, wants to change the long term benefit structure to reduce the gap in Social Security's finances.

A lot of conservatives are leery about doing that, cutting benefits or at least cutting the growth of future benefits without Democratic support. The problem is Democrats may not come along unless you raise taxes to help pay for the individual accounts as Lindsey Graham is proposing in the Senate. A lot of conservatives have heartburn over that. So, putting together the physics of this is very complicated.

WALLACE: And also, Susan, it seems the Democratic strategy, we heard Democratic Congressman Charlie Rangel in the radio address yesterday saying there is no crisis here. So, the Democratic strategy is what?

MILLIGAN: Well, is to basically portray the social -- take apart the Social Security plan in the same way that the Republicans took apart the Clinton health care plan in the 1990s and destroy it that way.

Social Security is -- if health care is a hot button issue, Social Security is even more so, particularly since the prescription drug bill is really going to kick in next year and I think that there are some members who are very leery about taking on the AARP.

WALLACE: And, John, you know there is probably as war room already in the works at the White House for the president to sell this, to try to make the case first picking up on the Democratic argument that there is no crisis. What are you picking up from White House sources on that?

MERCURIO: That it's primarily going to be a State of the Union Address issue that he's going to take it not just, not on the issue, not on the policy specifics but on sort of the personal stories, the need for, you know, Americans to invest in their future, to invest in their retirement and I think you're going to see him come out aggressively after the State of the Union on that.

BROWNSTEIN: Look, I mean it's not a crisis but there is a real problem. There is a long term financing gap between the amount of revenue that Social Security is slated to bring in and the benefits that have been promised over the next (UNINTELLIGIBLE).

There's a broader question, Kelly, which is the increasing domination of the budget by programs for the elderly, Medicare, Medicaid, Social Security. There is an argument to be made among two Democrats that if you don't control the issue you'll have no money to spend on anything else. But by arguing that it's a crisis, he allows them to push back and so, no, it isn't and that's a very different form of argument that he's (UNINTELLIGIBLE).

WALLACE: Final topic and, John, why don't you weigh in first. I know you were reporting Armstrong Williams paid $240,000 by the Education Department to tout the No Child Left Behind Act. I guess the question is what is the White House saying about this?

MERCURIO: Well, what the White House is saying about it, I think, is that they're sort of shrugging their shoulders. They're admitting that they probably, you know, mis-stepped but I think the biggest question we have here is, is Armstrong Williams the only person who has been paid or approached even by the administration? Look, I think the Education Department came out and said that he was the only person that they approached. The investigation that's probably going to proceed at this point needs to focus on who else, other departments, other agencies that approach other journalists about what is a pretty egregious error on their part.

WALLACE: Final word, Susan, because Congress is already getting into the act. We had Democratic Congressman George Miller saying he's up in arms. What are you picking up from people on the Hill?

MILLIGAN: Well, yes, I think there is going to be a look. I don't know if there will be a formal investigation but a look into whether the White House has done this on other occasions. I mean it certainly raises some pretty serious questions about the role of an independent media in a democracy.

WALLACE: Absolutely. Susan Milligan of "The Boston Globe," Ron Brownstein "Los Angeles Times," John Mercurio CNN's own Political Editor, great seeing you all. Thanks again for being here. We appreciate it.

MERCURIO: Thanks Kelly.

WALLACE: Coming up next here on INSIDE POLITICS SUNDAY, find out what former Speaker of the House Newt Gingrich has to say about a possible presidential bid in 2008. That's right. That's all straight ahead here on INSIDE POLITICS SUNDAY.

(COMMERCIAL BREAK)

WALLACE: Time to check the latest news in our "Political Bytes."

Former Speaker of the House Newt Gingrich is making the headlines this Sunday with a new book called "Winning the Future," a 21st Century contract with America.

In the book he criticizes the Bush administration's policies on Iraq and says the U.S. lacked a strategy to deal with insurgents. Gingrich's upcoming book tour includes the early campaign states of New Hampshire and Iowa and he says he has not ruled out a possible presidential bid in 2008.

Another former member of Congress was remembered yesterday. Memorial services were held for Shirley Chisholm, the first black woman elected to Congress. The Democratic legislator represented her Brooklyn, New York district for 14 years ad also ran for president in 1972. She died last weekend at the age of 86.

And Rosemary Kennedy, sister of President John F. Kennedy, also passed away this week. According to a statement issued by the family, Senator Edward Kennedy and her sisters were by her side at a Wisconsin hospital.

The eldest Kennedy sister, Rosemary, was born mentally retarded and underwent a lobotomy at the age of 23. She served as an inspiration to her sister, Eunice Kennedy Shriver, who founded the Special Olympics for mentally disabled athletes. Kennedy was 86 years old.

Well, coming up next here on INSIDE POLITICS SUNDAY, we will take a look back at the sights and sounds of the tsunami relief efforts and a bit of hope for the future. That's all straight ahead.

(COMMERCIAL BREAK)

WALLACE: It was two weeks ago when we first heard about the massive tsunamis tearing throughout Southeast Asia. Since then we have all learned more and more each day about the devastation, the lives lost and the lives that will never be the same.

And what we have also learned from the people who are getting a firsthand look is that this is a disaster and a global response unlike anything this generation has ever seen.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: No briefing book, no television picture really can convey what really happened here to drive through the town, to see all these fishing boats that have been tossed up on the shore. I've been in war and I've been through a number of hurricanes, tornadoes and other relief operations but I have never seen anything like this.

KOFI ANNAN, U.N. SECRETARY-GENERAL: Today, we've had the chance to visit some of the areas that have been destroyed by the tsunami. I must admit I have never seen such utter destruction mile after mile and you wonder where are the people? What happened to them?

JAN EGELAND, U.N. UNDERSECRETARY-GENERAL: Big progress is being made by the day. We are reaching many more people today than we did yesterday. I do not think we are even close to having any figures of how many people died, how many people are missing, how many people are severely affected.

BUSH: Our military is doing heroic work in helping to save life. They're flying rescue missions 24 hours a day.

SGT. CLAUDE ILE, U.S. MARINE CORPS: What do they want to be doing right now? More. More.

(END VIDEO CLIP)

WALLACE: Men and women of the American military happy to help.

INSIDE POLITICS SUNDAY continues in just a moment.

(COMMERCIAL BREAK)

WALLACE: That's all the time we have. For everyone at INSIDE POLITICS SUNDAY, thanks so much for joining us.

Coming up in 30 minutes a live "RELIABLE SOURCES," covering the tsunami, how journalists cope while covering such a large scale disaster. And don't miss "LATE EDITION." Wolf Blitzer speaks with Secretary of State Colin Powell about the tsunami relief efforts, the Palestinian elections and much more.

For now, thanks again for watching. I'm Kelly Wallace in Washington. Have a terrific Sunday. We'll see you again right here next week.

The news continues now with "CNN LIVE SUNDAY."

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