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Inside Politics

Violent Protests Mar G8 Summit; Republicans Trumpet Release of Tax Rebate Checks

Aired July 20, 2001 - 17:00   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.
JUDY WOODRUFF, CNN ANCHOR: This is INSIDE POLITICS. I'm Judy Woodruff in Washington.

As President Bush takes part in the G8 Summit kickoff, protests in Italy turn violent, and in one case deadly.

ALESSIO VINCI, CNN CORRESPONDENT: I'm -- I am Alessio Vinci in Genoa. I'll give you the latest on those clashes in Genoa and the scene in the streets of Genoa right now.

JONATHAN KARL, CNN CORRESPONDENT: I'm congressional correspondent Jonathan Karl. There is plenty of political calculating under way now that tax rebate checks are in the mail.

BOB FRANKEN, CNN CORRESPONDENT: Within the hour, Washington, D.C. police are going to release new details about the last computer surf by Chandra Levy.

ANNOUNCER: Now Judy Woodruff takes you INSIDE POLITICS.

WOODRUFF: Thank you for joining us.

It has become a familiar scene, a gathering of world leaders overshadowed by throngs of protesters fighting globalization and police. But a death during today's clashes in Italy ratcheted up the tension outside the Group of Eight Summit and perhaps inside as well.

CNN's Alessio Vinci and John King are both in Genoa, where it is just after 11:00 p.m.

Alessio, first to you, tell us what's happening in the streets.

VINCI: Well, Judy, right now there is an eerie calm in the streets of Genoa, certainly a big contrast compared to what happened here throughout this day, including the area here where our position is set up. We have -- no longer hear the helicopters hovering over us, the sirens of the ambulances and the police wagons.

Some of the police that were here behind us have moved away. So there is certainly an eerie calm. We understand those violent demonstrations that have taken place all day have died down, at least for now -- Judy.

WOODRUFF: Alessio, how prepared were they for what happened?

VINCI: Well, I think the police was (sic) ready for violent clashes. They were pretty much preparing for this kind of confrontation. I think what many people here were taken by surprise was the sheer violence of those anarchists, those extreme groups who came here, apparently prepared for confrontation with the police.

They were well-prepared, they had Molotov cocktails, they had sticks, they had stones. They started throwing everything they could find and could get theirs hands on, on those police who first tried to contain them by using water cannons and tear gas, but then had to charge them. And at some point, those demonstrations turned extremely violent with demonstrators and police (UNINTELLIGIBLE) in hand-to-hand fight.

At one point, we saw today a group of demonstrators surrounding a police van and trying to destroy it completely. We went there. A few moments later, this police van was burning: They had set it alight.

So certainly there was a lot of really very violent confrontation.

One more thing, Judy: I wanted to give you the latest that we received from the Italian interior Minister, who is confirming at this time that a young demonstrator that was killed earlier today was killed by a gunshot.

There were earlier reports that were not confirmed whether this was indeed true. So the Italian Interior Ministry is confirming that this young demonstrator in his mid-20s was killed by a gunshot. What they're not saying, however, is whether this gunshot came from one of the policemen who was in a car, apparently that was surrounded by those demonstrators --- Judy?

WOODRUFF: Well, Alessio, is anyone saying then that the police are using more force than they should be under the circumstances?

VINCI: No, nobody is saying that the police is using more force than they should under the circumstances. As I said, those clashes have been extremely violent and this group of anarchists have come here well-prepared. And certainly, they are prepared for a very tough battle. And we've seen some of the policemen using the tear gas: Instead of throwing them toward the air, really pointing them toward the demonstrators. And I was asking if this was indeed the normal practice, and one of the policemen told me: Well, listen, if they charge us so hard, what can we do? We have to defend ourselves as well -- Judy.

WOODRUFF: All right. CNN's Alessio Vinci on the streets of Genoa.

And now to our senior White House correspondent, John King, who's been covering President Bush and other world leaders inside the G8 Summit.

John, any reaction from them to this violence? JOHN KING, CNN CORRESPONDENT: Indeed, Judy, quite a varied reaction. President Bush tonight, White House officials speaking on behalf of him, saying the president views the violence as regrettable, the death of that protester Alessio just mentioned as tragic, and that the injuries, more than 100 injuries to demonstrators and police the president says highly regrettable.

The French president, though, Jacques Chirac, says this is proof again that the leaders perhaps should do a better job listening to the message of the demonstrators. The Italian prime minister, though, Mr. Berlusconi, the host here, saying he hopes this is not distorted. He called this an isolated incident. But certainly, in their official gathering, the leaders were not responding at all to the message of the protesters.

In a communique drafted today, the leaders called for more global grade: Another round of trade liberalization talks beginning this November, and the president himself has been quite blunt saying in recent days, including again today that he simply thinks the protesters' message that more world trade will exploit the poor, Mr. Bush says he thinks they're just flat-out wrong -- Judy.

WOODRUFF: John, we know this is the president's first summit. There has been a lot of discussion about the disagreement over the policies that he brings with them to Europe for this meeting. How did today go?

KING: Well, Mr. Bush thinks it went quite well. But we have spoken in recent days about disagreements and skepticism from the European allies about missile defense and global warming. Today, Mr. Bush faced some criticism, some skepticism anyway, that the economic slowdown in Europe is at least partly responsible -- partly happening because of the economic slowdown in the United States, though Mr. Bush, we're told, quite aggressively making the case that he is doing his part to give the economy a jolt by cutting taxes in the United States. He mentioned Federal Reserve Chairman Alan Greenspan recent testimony saying he's ready if necessary to cut interest rates again.

So Mr. Bush coming in here, making the case that he is doing his part to get the global economy going, and saying other leaders need to do more. And again, in a direct, defiant message to those protesters out on the streets, Mr. Bush saying one way to do that is more global trade.

Now, as the weekend continues, he will sit down with the Russian president, the leaders of France and Germany, all of them skeptical about missile defense. The leaders of France and Germany skeptical about global warming as well.

So some tough discussions still ahead for Mr. Bush at his first G8 summit -- Judy.

WOODRUFF: All right, John King, covering the Group of 8 Summit there in Genoa. To you and to CNN's Alessio Vinci, thanks.

Back here in the United States, the Bush administration tried today to make the most of a photo and political opportunity. Our Jonathan Karl is here. He's been following, I guess you'd call it, Jonathan, the partisan maneuvering over those tax rebate check. What's going on?

KARL: Well, certainly what you see today is Republicans, both at the White House and on Capitol Hill, doing everything they can to maximize the political benefit of the first installment of those rebate checks, which goes out today: 8 million checks getting written today out to taxpayers.

(BEGIN VIDEOTAPE)

KARL: A politician's dream: The chance to put money right in the hands of voters. Relishing the moment, Vice President Cheney dropped by a check-printing facility in Kansas City and the president took a break from the G8 summit in Italy to join in the festivities via satellite.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You know, this really isn't a gift from the government. This is a refund of your own money, money you've earned and money you will now be able to spend.

KARL: With 8 million of an expected 92 million checks going out Friday, Republicans are hoping for a political boost as much as an economic boost.

Democrats had supported a rebate, but had a different idea of how it should work.

SEN. THOMAS DASCHLE (D-SD), MAJORITY LEADER: I don't like this particular rebate, because 20 percent of my South Dakotans are not going to get a check. Taxpaying South Dakotans will not get a check.

KARL: That's because the rebate only goes to those who pay federal income taxes. To highlight those left behind, Democrats are distributing the IRS letter sent to the 32 million people who will get no rebate at all.

"You either did not pay any federal income taxes in 2000," the letter explains, "did not have taxable income, or were claimed as a dependent on someone else's return." Therefore, you will not be receiving a check at this time."

(END VIDEOTAPE)

KARL: Democratic strategists are anticipating, or at least hoping, that the benefit from this rebate check, the political benefit for the Republicans will be temporary: For one reason, Judy, they are saying there are going to be glitches all over the place, just horror stories about people who didn't get their rebate checks as the IRS tries to get rebate checks to those who may have moved, tries to deal with the fact that some taxpayers may have died.

Now, as far as the Treasury Department goes, they're saying that they have anticipated those problems and they have them under control you. WOODRUFF: Well, you say the Democrats are hoping for minimal political benefit for the president. Is the administration able to point to any -- any benefit from this politically for them at this point?

KARL: Well, there seems to be at least somewhat of a boost for the president's political standing on the question of taxes in anticipation of these checks going out. Our latest poll out today has this question -- I believe we have a graphic here for it -- the question is, "Is Bush doing a good job handling taxes?" -- 59 percent today saying yes. Previously, back in May, the number was only 49 percent.

So it looks like at least in the preview there's a little bit of a boost for the president.

WOODRUFF: Now, a totally different subject, the president got a little bit of good news out of the Senate today. Tell us about that.

KARL: Yes, there were three judicial nominations approved by the Senate overwhelmingly. The most interesting there, of course, the nomination of Roger Gregory, the African-American judge to the Fourth Circuit. He had been appointed as a recess appointed by President Clinton. He won 93-1.

But Judy, one very interesting footnote to that, the one senator who voted against him was Trent Lott. Now, this was interesting because to kind of needle Lott after that vote, Tom Daschle came out and said that vote the seminal moment of the day, a historic moment, a Great day for the United States Senate. Lott the only one to vote against it, he said based on kind of procedural grounds. Doesn't like the idea of recess appointments. Gregory was initially a recess appointment by President Clinton without congressional approval.

We asked Lott's spokesperson what does the senator think about Gregory as a judge? And he said he simply doesn't know.

WOODRUFF: All right, Jon Karl, thank you very much.

Stay with us. This is INSIDE POLITICS. Much more coming up.

(COMMERCIAL BREAK)

WOODRUFF: As you heard a few moments ago, those first tax rebate checks are now in the mail. When asked how they will spend the money, 47 percent of those polled say they will pay bills. Thirty-two percent say they plan to save it, 17 percent say they'll put the money back into the economy by spending it, and just 2 percent say they plan to donate the money to charity.

A little earlier today, I spoke with Treasury Secretary Paul O'Neill about those rebates and other matters economic matters. I began by asking the secretary how many checks the treasury would be sending out, and what the average amount would be.

(BEGIN VIDEOTAPE) PAUL O'NEILL, TREASURY SECRETARY: Today there are eight million going out. On the average, there's going to be someplace around $500. Three hundred for singles and as much as $600 for couples at the top end. But averaging out around 500, and today's a great day. It's the beginning of getting $38 billion back to the taxpayers at a time that's really good for the taxpayers and for the economy.

WOODRUFF: Now, you sent out what, about 100 million letters telling people about these tax rebates. About a half a million people, though, are not going to get what they said they were going to get. What happened there?

O'NEILL: Well, half of 1 percent had some kind of a computer problem, and there have been new letters sent out to correct those half of 1 percent. It's an aggravation. and you know, I think, make the point, we need to raise our game. We should do everything at 100 percent.

WOODRUFF: Do you think it was a good idea to spend that $34 million to send those letters out?

O'NEILL: Well, I do. You know, it's something that came from conversation back and forth between the IRS and Congress, with a concern that if we begin sending out checks and people heard from their neighbors, "I got my check," and they didn't get theirs, we'd have 90 million phone calls and wouldn't be able to get anything done at all. So I think conceptually it was not a bad idea.

But I tell you the truth, I think for future ones there's is a way that we can use new computer technology and we can do this all in one shot, and we should be able to do it in a week instead of in 10 weeks. And we will get there. We will get there.

WOODRUFF: Your good friend, Federal Reserve Chairman Alan Greenspan, testified this week, that even after the six rate cuts they've pulled off this year and even with this $38 billion rebate going out, he still has, he said there are uncertainties surrounding the current economic situation that he said are considerable. Do you agree with him?

O'NEILL: Oh, I think -- we agree about just about everything, and I certainly wouldn't dispute his characterization. I think he went on to say that he's looking for an improvement at the end of this year. And, you know, neither one of us like forecasting much, but I think we both think that next year we should see something in the order of a 3 percent real economic growth rate in the U.S. economy. And so we're coming back. What day we're going to come back I think nobody knows for sure, and we shouldn't over promise or overestimate. But we're coming back.

WOODRUFF: Mr. Secretary, are you disappointed that they're now projecting a surplus for the coming fiscal year that will be something like $75 billion less than this year's surplus?

O'NEILL: Well, you know, Judy, you've got the part of the cup that's empty. I've got the part of the cup that's full. My cup has got $160 billion at least in it as a surplus. And in a time of very slow economic growth, it's a fantastic situation. We've never really had such a situation before, where we're running $160+ billion surplus with real growth rates close to zero. So I think we're pretty good.

WOODRUFF: You know how reporters are. We have to focus on the negative. One last question, Mr. Secretary. You said during your confirmation hearings that you did not believe that tax cuts would have that much of a salutary effect on the economy. Do you still feel that way?

O'NEILL: You know, at the time I said it, what was on the table would have put $5 billion back the economy this year. And I really didn't think 5 billion in a $10 trillion economy would make very much difference.

As a concentrated $38 billion package going out in three months, I think this is a real pop at a great time. It's hard to imagine that we've done such a great thing with fiscal policy, never done in my lifetime. We've got fiscal policy straight in line with what the cyclical economy need, so I'm really pleased about where we are, and, yes, I think this will make a material difference.

WOODRUFF: All right, we'll hang on to those confirmation transcripts. We'll keep asking you about them. Treasury Secretary Paul O'Neill, thank you very much. We appreciate your joining us.

O'NEILL: Thank you, Judy. Nice to be with you.

(END VIDEOTAPE)

WOODRUFF: And joining us now, Democratic Senator Kent Conrad. He is chairman of the Senate budget committee.

Senator, do you agree with the treasury secretary, that these tax rebate checks going out now, $38 billion worth, will make a material difference in the economy?

SEN. KENT CONRAD (D), NORTH DAKOTA: I think it will make some difference, Judy. I don't think we should overstate it. The economists say it will make maybe a half of 1 percent difference in the gross domestic product. But, you know, when the economy is growing at maybe less than 1 percent, that's -- that's a help. That's worth doing, and many of us insisted that we have this kind of economic stimulus this year. The administration and their tax cut plan had virtually no fiscal stimulus this year. In fact, it was less than $5 billion.

And many of us, me included, said we ought to have at least $60 billion of tax cut this year to help lift the economy. So I'm pleased this is happening. I wish we were also sending checks to those who pay only payroll taxes, because I think they deserve some relief as well.

WOODRUFF: Well, you mentioned 60 billion. This is 38 billion. Is this enough, do you think, to begin to reverse what many fear is a real downturn in the economy? CONRAD: You know, I don't think anybody should overstate it. It will help but it's not overly significant in a $10 trillion economy.

WOODRUFF: Well, if not this, Senator, then what is needed, do you think?

CONRAD: Well, my own belief is that we should have had a bigger fiscal stimulus this year. I proposed to my colleagues $60 billion this year. I actually voted for $80 billion this year, because as we looked at it, we saw that what the administration was proposing, which was only $5 billion, really was not going to be meaningful at all.

And the economists told us, you need it in the range of 60 to 80 billion to really give some meaningful boost to this economy. So this is welcome, this is going to help, but I think we could have done better and I wish we had. And I wish we'd have also helped those who pay only payroll taxes, because most Americans, the vast majority, pay more in payroll taxes than they do in income taxes.

WOODRUFF: Senator, you heard, perhaps, I asked the treasury secretary about those $34 million worth of letters sent out to over 100 million Americans. Was that money well spent?

CONRAD: No, clearly not. That was largely a political exercise. I used to be the tax commissioner of my state, and when we'd do these things, you'd put the notification in with the check. This was $30 million that was really wasted.

WOODRUFF: Senator, you also -- I also asked the treasury secretary about the surplus in the coming fiscal year, down 75 billion from what it is this year to 160 billion. I think you heard him say, in his view, given the state of the economy, this is -- I think he used the words "a fantastic situation," do you share his assessment of that?

CONRAD: Well, actually the surplus is down even more dramatically than you described. We've gone from an earlier estimate by the administration of $275 billion this year down to 160. So, that is $115 billion slide. I don't think anybody can describe that as fantastic.

Looking ahead, we see that the administration next year will be using all of the Medicare trust fund surplus, and even possibly some of the Social Security trust fund surplus to pay for other government programs. I'm afraid they've got a budget and a tax plan that simply did not add up. And that's got real implications, negative implications for the future.

WOODRUFF: Well, senator, you've made that point before about the Medicare, Social Security trust fund money being jeopardized, but the budget director for the administration, Mitch Daniels said, and I'm quoting hi: "It would be a bookkeeping gimmick to suggest that Medicare is in any jeopardy at all."

CONRAD: Well, the director is just factually incorrect. They are using this year Medicare trust fund dollars to fund other programs. That is inappropriate.

Next year, it is even more serious, and that is before the president's request for a substantial increase in defense spending. That will make the raid on trust fund moneys even more severe next year.

This is not an accounting matter. This is a position taken not only by myself, but the Republican speaker of the House, the Republican majority leader in the House and the Republican budget director in the House.

WOODRUFF: Senator, just quickly, what are you saying here? I mean, if it's not bookkeeping, how serious an issue is this?

CONRAD: Well, I believe it is a serious issue when one takes trust fund moneys of Social Security and Medicare and uses that to pay for other programs, especially when we know that in the next decade the baby boomers start to retire. In effect, we're digging the hole deeper before we start filling it in. So, I think that's a mistake.

WOODRUFF: All right, Senator Kent Conrad, who is chairman of the Senate Budget Committee. We thank you very much for joining us. Good to see you, senator.

CONRAD: You bet.

Now, onto the search for leads and the discovery of a mislead in the Chandra Levy case. That story is coming up next on INSIDE POLITICS. And we'll tell you how the spotlight on Congressman Gary Condit, brought about a tip about trash.

(COMMERCIAL BREAK)

WOODRUFF: Here in Washington, police searching for missing intern Chandra Levy searched Washington parks for a fifth straight day, apparently turned nothing up. But there are some new developments today, and for those, let's go to CNN's Bob Franken who has been on this story -- Bob.

FRANKEN: Well, Judy, for the last couple of days, we've been told that the police will be releasing a much larger list of the Web sites that had been surfed by Chandra Levy on first -- or last, rather, visit to her computer May 1 in her apartment. And we've gotten that list. Police have said that it will be used to help people jog their memories in case some of the Web sites are places that Chandra Levy subsequently visited, and that people might have spotted her.

However, we have a list that even the police say is not only partial, but probably is not going to help very much. It is very, very generic. As a matter of fact, the police say that they're not releasing a lot of the important material, because it is, quote, "evidentiary."

And this list includes a variety of search engines: Altavista, that type of thing, Lycos, it also lists Southwest Airlines -- we had already known that that was going to be released. There is the Thomas.com Web site, that is the one about Congress. We know that Chandra Levy was looking up congressional committees whose members included Congressman Gary Condit.

There is one where she might have visited -- at least the police think she might have -- and it is Baskin-Robbins.com. Now, there is a Baskin-Robbins ice cream store near Chandra Levy's apartment. So, if anybody at the Baskin-Robbins happened to see Chandra Levy on May 1, of course they are asked to call police.

So, this is a list that is not probably going to advance the investigation very much, but there have been a variety of other facets to the story today. One of them occurred on July 10. Actually, four hours before Congressman Condit's apartment was going to be searched by police at his invitation, the congressman was spotted in Alexandria, Virginia, dropping something into a garbage can. He has left his apartment and gone to Alexandria. Somebody recognized him from all his television coverage and called police.

Police came and fished out of the garbage can a watch case. They were able to trace it back to where it had been purchased, they traced that back to a woman friend who had given the watch to Congressman Condit. Police emphasized that, as a matter of fact, they do not believe it had anything to do with the disappearance of Chandra Levy. They continued to emphasize that he is not a suspect.

One other matter, local law enforcement officials tell CNN that the gentlemen in California who is Reverend Otis Thomas, a Pentecostal minister, who had told them that Congressman Condit had had a romantic relationship with his daughter seven years ago when she was 18, officials now say they have evidence that he was lying. Thomas was also a gardener for the family, Judy, of Chandra Levy.

WOODRUFF: Bob, we also know there was a statement from the Levy family today?

FRANKEN: Again, they came out. They're going away for the weekend, but before they left, they had an appeal.

(BEGIN VIDEO CLIP)

SUSAN LEVY, CHANDRA LEVY'S MOTHER: This destructively been very hard on all of us and this family.

ROBERT LEVY, CHANDRA LEVY'S FATHER: We miss our daughter.

S. LEVY: We miss our daughter terribly. Want her back home alive. We appreciate all the help we can get, including from Mr. Congressman, who said to me that he would help me, he would do anything to help me at the Jefferson Hotel, and that's all I can say.

(END VIDEO CLIP)

FRANKEN: Of course, they're talking about a meeting that the Levys had the last time when they were in Washington at the Jefferson Hotel with Congressman Condit -- Judy. WOODRUFF: All right, Bob Franken, on this case.

Stay with us tonight for an extended coverage of the Levy case. CNN's "LARRY KING LIVE" focuses on Chandra Levy and the Condit question at 9:00 p.m. Eastern. And immediately after LARRY KING, CNN TONIGHT will devote its entire half-hour to the case, and that's at 10:00 p.m. Eastern.

A little earlier, I sat down with Stu Rothenberg of "The Rothenberg Political Report" and Charlie Cook of "The National Journal" to ask about Congressman Condit's future and other political matters, and we started with the speculation about whether Condit will seek re-election and what might happen in his congressional district.

(BEGIN VIDEOTAPE)

STUART ROTHENBERG, "ROTHENBERG POLITICAL REPORT": His career is over as an elected official. I mean, I think he is severely damaged with the voters back home. I think the press won't trust him. I mean, this is a guy who self-destructed. He really did this to himself.

WOODRUFF: And assuming he doesn't run, Charlie, what happens in that district?

CHARLES COOK, "NATIONAL JOURNAL": This is a tough district. It's a swing district for Democrats, and it's kind of interesting that Tony Coelho had it back in 1982 and they offered to make it more democratic for him, and he said no, that's OK, it's fine, and then in 1992, Gary Condit said, no, it's fine, you don't need to make it anymore Democratic. And now, the California legislature, the Democrat legislature is going to have to cut this district up to make it a lot more liberal, a lot more Democrat so that another Democrat other than Gary Condit can win it.

WOODRUFF: All right, quickly: the Senate race. The Senate -- from the state of Virginia, Claudia Kennedy, who is the highest- ranking woman ever to serve in the U.S. Army, retired lieutenant general, thinking about running against John Warner?

ROTHENBERG: Well, I think it's a long shot. I think if the staircase is 100 stairs, she is on step three or four in being able to beat John Warner. But look, she has an interesting story to tell. Democrats tell me that Warner's support -- yes, it's very wide, but it's not particularly deep, and remember, he actually had quite a tough race five years ago against Mark Warner.

This is a clear long shot for the Democrats. An interesting woman, we don't know what she's going to be like as a candidate, we don't know if she can raise money, but at least to have something to go forth.

COOK: It's a fairly conservative, fairly Republican leaning state but the question is to what extent would being a retired Army general inoculate you from being a national liberal Democrat, and that's really the question here. So I think we have a fascinating race. I agree with Stu, it's going to be a long shot, though.

WOODRUFF: All right, the senate or rather governorship in the state of Florida, former Congressman Pete Peterson just stepped down as U.S. ambassador to Vietnam. What are his chances running against Jeb Bush?

ROTHENBERG: Well, I think he'd have an interesting, he's an interesting candidate against Jeb Bush. I think the problem is whether he can get to Jeb Bush. Remember, there may be a competitive primary there. Most of the Democratic votes in Florida are from the southeastern part of the state, Dade, Broward Counties. There are a number of Democrats from that part of the state looking at the race so it's possible that the Miami Democrats could divide the vote in that.

COOK: Yes.

WOODRUFF: Janet Reno among them.

ROTHENBERG: Janet Reno one of them. Lois Frankel, state legislator. Another state legislator is looking. So I think Peterson has an interesting profile. He's a north Florida Democrat, congressman, former congressman, ambassador, an interesting figure but we have to see whether he can win the nomination.

COOK: I think Peterson as the profile would be the perfect Democratic opponent for Jeb Bush. I think he'd have the best chance of winning. I agree with Stu, the question is can he win the nomination. But the thing is I think Janet Reno is too controversial. I think Lois Frankel would not be able to draw much beyond south Florida. Pete Peterson is the guy. The question is can he get the nomination? But there is no runoff this time so Stu's right, they may split the south Florida vote and he may be able to get the nomination.

WOODRUFF: Former Clinton White House adviser Rahm Emanuel considering running for a Congressional seat from Illinois, Stu?

ROTHENBERG: Right. This is, at least the district so far has been a north Chicago district, currently represented by Congressman Rod Blagojevich. The district is a combination of north shore liberal and ethnic working class Democratic areas. I'm not sure what the new lines are going to be like. But look, Rahm Emanuel has a number of things going for him if he wants to run. He has national Democratic contacts, presumably could raise money nationally, could bring in people into the district for his race. He's articulate. He's appeared on TV.

But is he too much of a Washington figure and who else is going to run? There is a former Democratic legislator who's interested.

COOK: I don't know how interested he's going to be, but the thing is he's from, he's out of the Chicago machine, out of the operation. I mean this is not like parachuting into the district.

WOODRUFF: Stu Rothenberg, Charlie Cook, good to see you both.

COOK: Thanks. ROTHENBERG: Thanks.

WOODRUFF: A long awaited arrival, fugitive Ira Einhorn returns to U.S. custody. What is next in this 24 year legal saga? That story and some of the day's other top stories just ahead.

(COMMERCIAL BREAK)

ANNOUNCER: More INSIDE POLITICS with Judy Woodruff coming up. But first, we go to Bill Hemmer at CNN Center in Atlanta for a look at some of the day's other top stories.

BILL HEMMER, CNN ANCHOR: And good afternoon.

Convicted murderer Ira Einhorn back in a U.S. prison after 20 years on the run. Einhorn was returned from France today. He's now in a maximum security state prison near his hometown of Philadelphia. As part of the extradition deal, Einhorn will be tried again, but he will not face the death penalty.

Back in 1993, Einhorn was convicted in absentia of murdering Holly Maddux. Officials are not sure when that new trial, though, will start.

(BEGIN VIDEO CLIP)

LYNNE ABRAHAM, PHILADELPHIA DISTRICT ATTORNEY: We're waiting to see who his lawyers are, what they're going to say, what they're going to do and when they're going to do it. As of this moment, Ira Einhorn, having been convicted and not having asked for a new trial as of yet, is housed in a state correctional institution at Graterford and that's where he will remain pending the remainder of our legal issues that will have to be addressed in the future.

(END VIDEO CLIP)

HEMMER: Einhorn continues to deny killing Maddux. He says he was framed by the CIA. From overseas, Israel today is denying it caused an explosion that killed a member of Yasser Arafat's political party. That explosion rocked a West Bank office of the Fatah Party. A scheduled meeting at the office was earlier canceled.

Dead in that blast, a 37-year-old man who lived next door to the building. At least two others were wounded. Officials say the building was the target of Israeli missiles, but Israeli Army officials say Israel had nothing to do with that blast.

Firefighters still battling a blaze that has been burning in a tunnel in the city of Baltimore since Wednesday. Today, two firefighters were overcome by the extreme heat of that fire. That blaze broke out after a freight train derailed and authorities are pumping hydrochloric acid from a leaking tank car in downtown Baltimore.

A spokesman for Johns Hopkins says the medical research center hopes to eliminate problems that triggered a federal government penalty. The dean and CEO of Johns Hopkins says he hopes to resolve the issue in three or four more working days. Yesterday, the government suspended 2,000 trials involving humans after the death of a healthy subject who was undergoing a test for asthma.

The waters off a popular California beach bright red now. It is not due to some biblical plague, though. Huntington Beach south of L.A. has a long running pollution problem and to find out why, scientists have injured a fluorescent dye in the water. They hope to determine why the beach continues to be plagued with bacteria.

Rough seas above the sunken Russian submarine Kursk have forced a delay now in a rather complex salvage operation. The first stage of the operation, supposed to start today, but weather prevented scuba divers from entering the water. The effort to raise the Kursk expected to take several months time. In all, that sub weighs 18,000 tons.

A lot more coming up at the top of the hour. Twenty-two minutes away from the FIRST EVENING NEWS. We will be back then. But for now, more with Judy in Washington. Have a great weekend, OK, Judy?

WOODRUFF: You, too, Bill. Thanks.

It has been a turbulent day in Genoa. Ahead, Condoleezza Rice talks about the disconnect that she sees between protesters and the Group of 8 leaders. Also, was today a step toward a political return by the former vice president? Observations on Al Gore from our weekly roundtable guests. This is INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: National security adviser Condoleezza Rice traveled with President Bush to the Group of 8 summit. Today, she sat down with our John King to discuss a number of issues at home and abroad. John started by asking Rice about the protests and whether there's a disconnect between the leaders inside who support expanded global trade and the protesters outside angered by the widening gap between the rich and the poor.

(BEGIN VIDEOTAPE)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: The disconnect is not between the people in the streets and these leaders. I think that the people in the streets need to recognize that these are elected leaders who understand what's needed for their populations' well being.

KING: We're weeks, if not months, away from more specific answers on missile defense, weeks, if not months, away from an administration alternative to Kyoto on global warming. Do you worry that there's a growing sense among key allies of the United States now that this administration is at the six month mark that we need answers?

RICE: I really do think that the leaders have been impressed by the fact that President Bush has been willing to state our case, willing to say what he believes is in America's interests, but also willing to listen. On missile defense, we've been in consultations now for the better part of three months. This is not standing still on the issues of missile defense. Indeed, we've had talks on Kyoto with the Japanese. The president has been discussing this. We have people at Bonn now in these discussions.

And so it's not as if we are standing still. We're listening. We're talking to people. We're putting out ideas. But it is only six months and these are complicated and complex issues and they will take some time.

KING: The Senate major leader quoted as saying he believed the president's views on missile defense and on global warming were isolating the United States and perhaps undermining U.S. leadership in the world. The administration's response was quite angry.

RICE: Let me just say that I think it was extremely unfortunate and it is not the great tradition of bipartisanship in the United States to which we've all become accustomed. The fact of the matter is that when the president of the United States is abroad, he is the president of both Democrats and Republicans and I think that everybody understands that. Now, when he is home, he's also everyone's president, but we have a system in which criticism of policies takes place. There's nothing wrong with criticism of policies.

You don't question the president's leadership as he's leaving, as Air Force One is taking off. It's really, frankly, appalling. And I do think that the American people want to see a united government going forward. This is a person, George W. Bush, when he was running for office, who went out of his way to keep partisanship out of foreign policy, supporting President Clinton in the Middle East, supporting President Clinton on Kosovo, refusing to criticize the president for the difficulties that he was having in any number of important fora.

That's the spirit that the American people are looking for and Senator Daschle is the majority leader. He's not just some other Democrat. And so I'm quite certain that as he becomes more and more accustomed to that role that he, too, will want to put forward a more bipartisan face for American foreign policy, particularly when the president is abroad.

KING: Do you think it undermined him at all? This is not an easy trip. I know you say this meeting here is not dedicated to the issues of missile defense and global warming, but they are certainly the leading issues in the relationship between the United States and Europe right now and the president has a tough sell. The European Union leaders unanimous, I think, in their criticism of him on Kyoto, skepticism from the Germans, the French, the Russians, on missile defense. So as the president is trying to make this tough sell, do comments like that undermine him in the sense that why should the German leader move the president's way if he doesn't think the president can sell his own programs back home?

RICE: I can assure you that the leaders here are quite certain who's president of the United States and they want and are seeking good relations with the president. I think that they have found him to be a good interlocutor. They've found him to be someone who's well prepared, who knows where he stands and who's courteous and listens to them, as well.

So I don't think there's any confusion here about what the president is here to accomplish nor is there any confusion about the fact that he is the president of the United States and that a good relationship with him is important.

KING: Let me ask you, lastly, this is the president's first time around, if you will, for these style of meetings where he's often without aides, in the room with the other major leaders. Any observations he has made coming out of these meetings to you about the tone, the tenor, the style any one or two of the leaders he's met over the past six months or over the past six hours here in Genoa?

RICE: I think that he's finding it really quite stimulating because it's true that they do sit there without aides. I think that's a good thing. The president said that the meetings were lively. He said that, he said at one point I was wondering if I was talking too much and I think that, in fact, everybody wants to hear from him. But he is somebody who has very easy interchange and he's met all of these leaders now before. Several of them he's spent several hours with, Prime Minister Blair, Prime Minister Koizumi, also with Chancellor Schroeder. So I think that he feels very much at home here and I think he's enjoying it.

KING: Thank you.

RICE: Thank you.

(END VIDEOTAPE)

WOODRUFF: Well, now with a look ahead at what's coming up later on MONEYLINE, here's Lou Dobbs -- Lou.

LOU DOBBS, CNN ANCHOR: Judy, thanks. We'll be obviously reporting on those violent protests in the streets of Genoa at the meeting of the G8. We'll have the latest for you from the G8 summit, as well. And of course it was a down day on Wall Street, capping off what was a volatile week. We'll be bringing you up to date on that and what you can expect. My guest tonight, Elizabeth MacKay, the chief investment strategist, and Daniel Yergin, the world's foremost expert on oil. And we'll be joined tonight by Hernando De Soto, Peruvian economist and author of "The Mystery of Capital." He has a plan and a practical plan, a workable plan, on how to eradicate poverty.

All of that and more coming up on MONEYLINE at 6:30 Eastern right here on CNN -- Judy.

WOODRUFF: All right, Lou, and we'll be watching.

And coming up next on INSIDE POLITICS, we'll talk to our weekly political roundtable about a new poll and how President Bush is doing. We'll be right back. (COMMERCIAL BREAK)

WOODRUFF: Now, here's what our sources are saying about a potential Democratic presidential contender in 2004, Senator John Kerry of Massachusetts. Our Jonathan Karl has learned that Kerry plans to visit New Hampshire on August 5 to campaign for local politicians and to headline a fund-raiser for Manchester Mayor Bob Baines. Now, this will be Kerry's first visit to the lead off presidential primary state since the last election. And John Kerry plans to go back there in October to speak to the New Hampshire AFL- CIO convention.

This news as House Democratic leader Dick Gephardt goes to the key caucus state of Iowa tonight to attend a fund-raiser for Congressman Leonard Boswell.

And now a postscript of sorts to the 2000 presidential contest in our Friday roundtable. Terrance Samuel of "U.S. News & World Report" is with me here in Washington, CNN's senior analyst Jeff Greenfield is in New York, as is Tamala Edwards of "Time" magazine.

Terrance, I'm going to begin with you, with a new CNN/"Time" poll showing people were asked how much of what the president is doing is of his own initiative, how much is he reacting to events. Fifty-four percent said they think the president's reacting. Are people getting the accurate perception here?

TERRANCE SAMUEL, "U.S. NEWS & WORLD REPORT": I think the president has this problem, if you want to cast it as such, where he has made it a point of not being as prominent, not being on television as much and as a result, people have this sense that he is much more laid back, particularly compared to President Clinton. He's also delegated quite a bit with Vice President Cheney and he's also said he wanted to do less. And as a result I think they have the sense that this guy is just less kinetic and less energetic than the former president. He may be suffering just by comparison.

WOODRUFF: Tamala, where do you come down?

TAMALA EDWARDS, CNN'S "TAKE 5": I have to agree with that. I think people are seeing him as far more reactive. They hear a lot more about what he's against. He doesn't want to be part of Kyoto. He's defending his stance on the anti-ballistic missile treaty. But what they don't see is him being very active. They don't see him the way Clinton was in Northern Ireland or in the Middle East.

In fact, I think when they see something like Colin Powell go to Africa in a very proactive way, that's associated a lot more with Powell than it is with Bush.

WOODRUFF: Well, in connection with that, Jeff, we have the Democratic leader in the Senate, the new leader, Tom Daschle, yesterday coming out with criticism of the president as he's heading overseas. Should we be shocked at this?

JEFF GREENFIELD, CNN SENIOR ANALYST: No, and I think it, what you heard from Ms. Rice tells you that the White House sees this as a political blunder on the part of Daschle and they are making the most of it. I do think the notion that politics stops at the water's edge is one of those myths that is mostly mythological. The party in power will always like to accuse the party out of power, particularly its Congressional wing, of mucking up the waters. You remember when Clinton attacked the Sudan and Afghanistan and then during impeachment Iraq and the GOP congressmen, people in Congress raised questions and there was a shock on the part of the Democrats, how dare they say this when our troops are at risk?

This is part of an old and familiar dance and I think that while Daschle may have made a political blunder, the reality of it is this happens all the time.

WOODRUFF: Terrance Samuels, should Senator Daschle have kept quiet right now?

SAMUEL: I think Senator Daschle had no intention of keeping quiet. I think he may have regretted that that happened when it did. But I think what we have here is an overly, an old story that all politics is local, all politics is domestic. The White House has been frustrated with Senator Daschle. He's made almost no mistakes along the way and this was the first one and they jumped all over it. And he got beat up.

WOODRUFF: Let me switch over to Al Gore, of course, the former Democratic nominee for president. Tamala, we have a new poll. Part of this new "TIME"/CNN poll shows that Gore's favorability ratings have slipped. Since November they've gone down steadily from 57 percent, he's now at 46 percent.

EDWARDS: Right.

WOODRUFF: Should Al Gore be worried?

EDWARDS: Actually, Judy, I'm a bit surprised those numbers aren't lower. I think it says that he's doing better than expected, that nobody's really seen or heard from Al Gore in the last six months and yet his numbers are still in the 40s and there's been a lot of talk about the fact that he hasn't been reaching out to old campaign workers, securing top fund-raisers, doing the things like John Kerry has already started to do.

WOODRUFF: Jeff Greenfield, should Al Gore be sweating it?

GREENFIELD: Well, you know where I come out on this stuff, Judy. That, you know, I would like to see the first amendment changed so...

WOODRUFF: That there aren't enough polls, right.

GREENFIELD: So, no, so we could actually not only ban the publication of any one of these polls until at least a year before the election, I would forbid any politician from traveling to the states of Iowa or New Hampshire unless they live there on pain of imprisonment and/or stripping of their citizenship. I guess, you know, my only justification of this is that I don't know what people who talk about this would be doing. If not for these polls, perhaps they'd be committing crimes, littering. But I find it ludicrous. I mean I have to be honest with you, and we've had this conversation publicly and privately. Who in god's name is thinking about the 2004 presidential election except people who can earn a living from it?

WOODRUFF: Well, some of us here at INSIDE POLITICS. And we should point out, I should have said this at the outset, one of the reasons we're looking at this is today Al Gore opened his political headquarters in the state of Tennessee. Terrance, does that make it any more relevant what we're talking about here?

SAMUEL: I think the answer to Jeff's question is that at least Al Gore is thinking about it. He's done what he's supposed to do. It's almost very, it's scripted. For one thing, he said he was going to go back to Tennessee and rebuild some fences. He's done that by opening this office. But he's also, you would note, teaching in both New York and California, where it's pretty easy and pretty necessary to raise money if you're thinking about running for president in 2004.

WOODRUFF: Tamala Edwards, the question finally about women. The Republican Party now publicly making a new effort to pull women into the party. They're looking at November numbers where we know that Al Gore had 54 percent of the women's vote, George Bush 43 percent. Are the Republicans smart to be focusing on gender here?

EDWARDS: Very much so. I think absolutely, and what's really interesting in those numbers is if you break them apart and it shows them doing very well with stay at home moms, not so well with working women. And I suspect that those are the women that they will go out after. And interestingly enough, the Democrats this week also suggested that they may have some problems with women, noting that it's the stay at home mom, it's the woman who goes to church, maybe is in the military, maybe owns a gun, that they're going to have a problem with.

WOODRUFF: And what are the issues that, some people, Jeff, may automatically assume it's abortion, but what are the issues when you look at women?

GREENFIELD: Yes, I think Tamala hit on it and those numbers did, too. I think the women's vote is far more connected to economics than it is to what we officially call "women's issues." It is, I think, because particularly among working women they see government more as a help than a hindrance, that drives them more to the Democratic Party. The other thing I'd put on the table is I'm wondering when the Democrats are going to start looking at what is it with them and men, because yes, Gore won the women's vote by 11 points. Bush won the men's vote by 11 points and the big difference between Clinton and Gore politically was that Clinton was able to hold men even and Gore lost them big. That's another gender gap question we often don't discuss.

WOODRUFF: And we need to do that. All right, Jeff Greenfield, Tamala Edwards, Terrance Samuels, all of you, thanks very much. Great to see you and have a great weekend.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: Well, maybe not fishing, but our Bill Schneider is in Japan on what he says is a working vacation. We can't wait to find out what that's all about. His political play of the week will resume in two weeks. We all miss you, Bill.

That's it for this edition of INSIDE POLITICS. I'm Judy Woodruff.

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