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Inside Politics

Blix Says Iraq Not in Compliance With Disarmament; State of the Union Address Will Touch on War, Economy

Aired January 27, 2003 - 16:00   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.


(BEGIN VIDEO CLIP)
HANS BLIX, U.N. CHIEF WEAPONS INSPECTOR: Iraq appears not to have come to a genuine acceptance, not even today, of the disarmament which was demanded of it.

(END VIDEO CLIP)

ANNOUNCER: Words that could lead to war. How is President Bush responding to the U.N. weapons report?

(BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The inspectors are doing their best job. But the more time they get, the more they're getting the runaround from Saddam Hussein.

(END VIDEO CLIP)

ANNOUNCER: Protests and politics. Are Americans growing wearier of attacking Iraq? We'll pore over new polls.

The State of the Union. On the eve of the president's big speech, Democrats fire warning shots.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: What we're getting from the White House are confused signals instead of clear direction. Slogans instead of solutions. Posturing instead of progress.

(END VIDEO CLIP)

ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff.

JUDY WOODRUFF, HOST: Thank you for joining us. At this hour, Wall Street is showing its anxiety about today's report on Iraqi weapons and the prospects of war. Moments ago, the Dow closed down more than 100 points. Earlier, it fell below the 8,000 level for the first time in three months. We'll have a live report ahead.

That report by U.N. weapons inspectors is dominating this news cycle. Chief inspector Hans Blix says Iraqi officials have failed to fully account for chemical and biological weapons. And, he said, they have not genuinely accepted the demands to disarm. He says there was no new material in Iraq's arms declaration and no private interviews with Iraqi scientists. But inspectors add, no evidence has been found that Baghdad has restarted its nuclear weapons program. They say that more time is needed for inspections.

(BEGIN VIDEO CLIP)

BLIX: It is not enough to open doors. Inspection is not a game of catch us catch can, rather, as I noted, it is a process of (UNINTELLIGIBLE) for the purpose of creating confidence.

MOHAMMED ALDOURI, IRAQI AMBASSADOR TO U.N.: We think that there is no more need for inspections or inspectors, but if they consider that there's any, we are willing to cooperate with them for the future.

(END VIDEO CLIP)

WOODRUFF: Iraq insisting that no country in the world has disarmed as it did in the past decade. But the United States says that it hasn't heard any evidence that Iraq will fully disarm. Dana Bash is at the White House for us, Richard Roth is at the U.N. Dana, to you first. What is the Bush administration saying about this report?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, the administration has set the bar pretty high in terms of what this report should have done. The administration said earlier that they had expected, they hoped that the report would show that Iraq is in full compliance, and if they failed to be in full compliance, then that would be -- if it was even partial, then that would be proof that Saddam Hussein is not complying, is not -- is defying the will of the world community.

And officials from here at the White House to the State Department, including Secretary of State Colin Powell, made clear that the kinds of weapons that Hans Blix and Mohamed ElBaradei talked about, VX gas and anthrax, and other chemical and biological weapons were very dangerous and it was proof that because Saddam Hussein is not showing the U.N. that he actually has those weapons or at least proof that he has gotten rid of those weapons, that that is proof that he is really defying the will.

He also, in terms of the call for more time from those diplomats at the U.N. Called for even a couple of months, Secretary of State Colin Powell did not seem moved.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: Even at this late date, the United States hopes for a peaceful solution. But a peaceful solution is possible only if Iraq disarms itself with the help of the inspectors. The issue is not how much more time the inspectors need to search in the dark. It is how much more time Iraq should be given to turn on the lights and to come clean. And the answer is -- not much more time. Iraq's time for choosing peaceful disarmament is fast coming to an end.

(END VIDEO CLIP)

BASH: Judy, Powell spoke in quite defiant terms, saying that when the nations that signed up for, that voted for U.N. Resolution 1441 voted for it, it was unanimous vote, 15 nations voted for it, they knew that there was language in there saying that if Iraq didn't comply, they would -- that Saddam Hussein would suffer serious consequences, and that now they've got to realize that that is something that they have to live up to, and he also said that this is a real challenge for the U.N. and the future of that body -- Judy.

WOODRUFF: All right, Dana. We're going to ask you to stand by and we're going to go now quickly to Richard Roth at the U.N. Richard, how are the other members of the U.N. Security Council taking all this, and what's next at the U.N.?

RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Well, your show is called INSIDE POLITICS. Let me tell you, a lot of inside politics going on right now inside the United Nations Security Council. U.S. ambassador, John Negroponte, laying out what Dana reported and based upon what Secretary Powell's views are, that time is running out, that this report by Hans Blix showed that Iraq was not cooperating.

Inside the council, though, differences emerging and outside with the press. Russia, China, Germany, France indicating while they want Iraq to cooperate with the inspectors, they're willing to give Hans Blix and Mohamed ElBaradei, the nuclear arms chief, more time to continue their work. The process has begun, it's moving forward, said several ambassadors. Germany noted that the tools of the inspectors have been sharpened to an unprecedented point. Let them just do their job.

Mohamed Elbaradei asked the council for more months to clear up the nuclear file. He said it's a good investment for peace.

These disagreements will be heard in the next days and weeks at the Security Council. Right now, Hans Blix is back in front of the Security Council behind closed doors answering some questions, and Wednesday will be the first full day, Judy, when the council members, with and without Blix at times, will be discussing their differences -- Judy.

WOODRUFF: All right. Richard Roth, thanks.

And now, Dana, I want to come back to you. We know that tomorrow is the State of the Union address. How much of that address is going to be on Iraq, and are we going to hear anything new?

BASH: Well, White House aides are saying it's probably going to be about half on the domestic agenda, what the White House calls the president's compassionate agenda; the other half will be on international policy, including Iraq.

Now, what the White House is saying on Iraq is that he will certainly not declare war, but the president will talk about the fact that this is a nation poised for war and that the threat of war is very real. The president did practice the State of the Union all weekend, at least for a long time yesterday. He is doing so again today. Meeting with aides, practicing on the TelePrompTer. He will talk about Iraq in kind of grand terms and talk about the threat that Saddam Hussein poses, but aides are saying that we shouldn't look for a lot of specific new evidence. That there will be time for that in the days to come.

You heard Secretary of State Colin Powell earlier today alluding to the fact that they might give some new evidence later this week about a potential link between Iraq and al Qaeda, but the president, in addition to talking about Iraq, will also talk about some other countries in what he labeled last year "the axis of evil." Those are North Korea and Iran. Unclear, probably unlikely, he will use that term "axis of evil."

But on the domestic side, he'll talk about his economic plan, that $674 billion plan he says will jump-start the economy. He will also talk about health care, and something that the White House plans to unveil later this week, Medicare reform. He will talk about the fact that he hopes to get prescription drugs, prescription drug plan for seniors. That of course, Judy, an incredibly important issue in the next election -- Judy.

WOODRUFF: Indeed it is. All right, Dana. Thanks very much. Thanks to you and to Richard.

Well, White House press secretary Ari Fleischer says the president's decision on whether to go to war will not be influenced by polls, but public opinion on Iraq appears to be shifting. Our Bill Schneider is over in Israel, but he's still keeping tabs on the poll numbers here at home. And Bill, first of all, how important to American voters is this U.N. inspectors' report that we heard today?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Very. We asked Americans, who do you trust more to make the right decisions regarding Iraq? The Bush administration or the United Nations? No contest. Right? Well, think again. It's a tie. As many people say they trust the U.N. as the Bush administration. Most Americans say, give the U.N. inspectors more time. Don't invade Iraq without a new U.N. vote. Don't invade without the support of our European allies, including France and Germany. There's no indication here, Judy, that Americans want to rush to war.

WOODRUFF: What about the president's Iraq policy, Bill? Is he gaining or losing support for that?

SCHNEIDER: Losing. Look at the president's ratings on handling world affairs. Down 10 points since the beginning of January. Now, do Americans still support the idea of sending U.S. ground troops to remove Saddam Hussein from power? Well, as a matter of fact, they do, 52 percent, but that number has been falling. At 43 percent opposed, opposition to a war in Iraq is at the highest level since 9/11.

You know, the president has a chance to turn that trend around with his speech tomorrow night. But he's facing a problem, and here it is -- most Americans say the economy, not Iraq, is the more important issue facing the country. The economy is what most Americans really want the president to talk about tomorrow night -- Judy.

WOODRUFF: And no doubt that has to do with why the White House is now saying at least half the speech tomorrow night is going to be about domestic issues.

All right. Bill, thanks very much. And we'll be talking to you later about what's going on in Israel.

Well today's "Campaign News Daily" focuses on Iraq and the 2004 Democratic hopefuls. Potential supporters are pressing the candidates and the candidates are pressing each other about U.S. policy and a potential war.

Former Vermont Governor Howard Dean and Congressman Dick Gephardt make back-to-back appearances this weekend in New Hampshire. Dean once again hammered the other candidates, including Gephardt, who voted last fall to give the president authority to wage war. Gephardt defended his vote by saying he was responsible for language in the bill calling on the U.S. to work with the United Nations.

In addition to Gephardt, Senators John Kerry, John Edwards and Joe Lieberman also voted for the Iraq resolution. And all of them been forced by anti-war party activists to defend their votes. Howard Dean made opposition to current U.S. policy part of his standard stump speech. And Al Sharpton is also on the record opposing the use of force. Dean and Sharpton, of course, are not members of Congress and, therefore, did not have to vote on the Iraq resolution.

Well, there's much more ahead on INSIDE POLITICS.

(BEGIN VIDEO CLIP)

DASCHLE: A triple threat of war, terrorism and recession are combining to make Americans unsure about their future. And unclear about the course our nation is taking.

(END VIDEO CLIP)

WOODRUFF: A prebuttal to the president's speech by top Democrats on Capital Hill. How tough are their warnings about war?

First responders on the line. Is the government giving them enough money to keep the homeland secure?

(BEGIN VIDEO CLIP)

SCHNEIDER: In Tel Aviv, at the Israeli Labor Party's message center. We'll pick up the buzz in the final hours of Israel's election campaign.

(END VIDEO CLIP)

(COMMERCIAL BREAK) WOODRUFF: War jitters on Wall Street. The showdown with Iraq take as bite out of the markets and your pocketbook. Coming up, we'll go live to the New York Stock Exchange for a look at your money.

(BEGIN VIDEO CLIP)

WOODRUFF (voice-over): It's time again to check your "I.P. I.Q." President Bush gives his State of the Union Address tomorrow night. Not counting tomorrow night, how many times has Mr. Bush addressed Congress? Is it, A -- two, B -- three or C -- four? We'll tell you the answer later on INSIDE POLITICS.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WOODRUFF: A new definition there.

Well, Democratic Party leaders tried today again to describe how they see the state of the union before the president delivers his speech tomorrow to a prime-time, worldwide audience. Our Congressional Correspondent Jonathan Karl has more on what some are calling the Democratic prebuttal.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): From the Democratic point of view, the state of the union isn't so good.

DASCHLE: The state of our union today is anxious. A triple threat of war, terrorism and recession are combining to make Americans unsure about their future. And unclear about the course our nation is taking.

KARL: In a one-two punch billed as a prebuttal to the State of the Union Address, Congress' two top Democrats said the problem is President Bush faces a credibility gap. Some of their toughest criticisms were on the handling of Iraq.

DASCHLE: If we have proof of nuclear and biological Wednesday, why don't we show that proof to the world?

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Does an invasion of Iraq and opening that Pandora's box in that region make us safer?

DASCHLE: How are our efforts to deal with threat helped by short circuiting an inspections process that we demanded in the first place?

KARL: On the question of war, the two Democratic leaders have been split. Last fall Daschle voted yes on giving President Bush the authority to wage war against Iraq. Pelosi voted no. The resolution passed overwhelmingly.

Democrats have also been divided on the economy. Pelosi and Daschle have presented separate plans to boost the economy. All told, they're about a dozen different Democratic plans, but they do agree on one thing: the president's approach is not working.

PELOSI: Last year President Bush told the nation in his State of the Union Address that his economic plan could be summarized in a single word: jobs. Unfortunately, his record could be summed up in one phrase: loss of jobs.

KARL: And the president's attempt to sell his $674 billion economic stimulus plan will fall on deaf Democratic ears. Daschle declared the centerpiece of the plan, dead on arrival.

(END VIDEOTAPE)

KARL: On Iraq, Democratic president's hopeful Joe Lieberman offered a much different assessment in the Democratic leaders. Lieberman reacted to today's weapons inspection report much the way the White House did and said this about President Bush, quote, "The president has all the authority required to hold Saddam accountable and eliminate the threat he poses, and I stand ready to support him, should he conclude it is necessary to use that authority to protect our security."

Lieberman did go on to say he thinks the president needs to do a better job of making the case for action in Iraq to the American people. But as you can see, Judy, very strong support from a very prominent Democrat for the president's policy on Iraq.

WOODRUFF: Now, Jon, you've also been talking to some Republicans up there on the Hill. What are they saying the president needs to do tomorrow night?

KARL: Well it's interesting. Almost to a person key Republicans up here on Capitol Hill are saying that the president needs to come in to the State of the Union Address making a very clear and very strong case for action in Iraq. Acknowledging he has not done enough to convince the American people and our allies.

As a matter of fact, I have a statement that was put out by Kay Bailey Hutchison, a very strong ally to the president from Texas, Republican leadership here in the Senate, who said the Bush administration should increase its efforts to make the case against Saddam clear to the American people and to the world.

And she goes on to say that she believes the State of the Union Address is just the opportunity to do that. That's a position shared by most Republicans. They're looking for a very strong case from the president.

WOODRUFF: All right, Jon. Thanks very much.

And CNN's special coverage of the State of the Union starts tomorrow right here on INSIDE POLITICS. I will be live from Capitol Hill and among my guests, House Speaker Dennis Hastert and House Minority Whip Steny Hoyer.

And stay with us for our live coverage of the State of the Union Address. My colleagues and I will be here starting at 8:45 p.m. Eastern.

Next, the Israeli tanks seal off Gaza and the West Bank as Israelis get ready to cast ballots. A crucial election and what the outcome means to the Mideast peace process, when we come back.

Plus, shipping out. Destination, the Persian Gulf. But is the Pentagon fall being hind its own deployment schedule? We'll go live to the Pentagon for the latest.

But first, the showdown with Iraq and your money. Rhonda Schaffler joins us live from Wall Street with some negative numbers, and Rhonda, the markets were reacting today. Weren't they?

RHONDA SCHAFFLER, CNNfn CORRESPONDENT: They were most certainly, Judy. We'll get to that in a moment.

First, we want to let you know that Wall Street now has taken its seventh beating in eight sessions. The Dow also fell below the 8,000 mark for the first time in three months.

Here's why -- investors began dumping shares as U.N. weapons inspectors said Iraq has not fully accounted for banned weapons. It was at that point we saw the market trade at its first session low. Investors also dumping stocks ahead of the president's State of the Union Address tomorrow night. Analysts saying the global unease creates just too much uncertainty for investors to tolerate.

(BEGIN VIDEO CLIP)

LARRY WACHTEL, PRUDENTIAL FINANCIAL: Once the bombs begin to fall, as it was in 1991, I think the market will respond favorably to that. They'll probably get their arms around the situation. But right now, we're in this twilight zone when no one makes a decision either on the corporate level or on the investment level, and we just drift along.

(END VIDEO CLIP)

SCHAFFLER: Or perhaps sink is the more appropriate word today. Here's the closing numbers: Dow off 141 points at 7,989. It has now tumbled more than 800 points in less than two weeks. Nasdaq down 1 percent. That's the very latest from Wall Street.

Just ahead, Judy interviews the Israeli ambassador to the U.S., and an update on the political battle over spending on homeland security.

(COMMERCIAL BREAK)

WOODRUFF: It's time again to check your "I.P." IQ. President Bush gives his State of the Union address tomorrow night. Earlier, we asked, not counting tomorrow night, how many times has Mr. Bush addressed Congress? Is it, A, two, B, three or C, four? The correct answer is B, three times. The first was his economic message in February of 2001. The second was his September 20 address following the terrorist attacks on the U.S. The third was his State of the Union in January of 2002.

(COMMERCIAL BREAK)

WOODRUFF: Security is even tighter than usual in Israel today, just hours before a crucial election. Palestinians in the West Bank and Gaza are barred from crossing into Israel until Wednesday, after the elections are over. The latest polls project that Prime Minister Ariel Sharon's Likud Party will win the most seats in the new parliament. But Likud is expected to win only about 30 to 35 seats, far short of the majority in the 120-seat parliament. That will force Sharon to once again put together a coalition to govern.

In Israel, voters cast ballots for political parties, not for candidates. So what's on the mind of Israeli voters? Once again, here's our political analyst, Bill Schneider, in Tel Aviv.

(BEGIN VIDEOTAPE)

SCHNEIDER (on camera): Tuesday is election day in Israel. And what are people arguing about? War, peace, religion, marijuana. You name it.

(voice-over): Talk to people on the streets and in the cafes, and what you hear is frustration.

ARI SHAVIT, "HAARETZ": People don't believe in any of the leaders. Both major ideologies have collapsed.

SCHNEIDER: In the view of columnist Ari Shavit, Israeli voters are not getting the choice they want.

SHAVIT: Seventy percent of Israelis have a rather sensible, moderate approach to the conflict. They understand Israel must end occupation, they understand that ending occupation might not end the conflict, and, therefore, they want to end occupation in a cautious way.

SCHNEIDER: But neither the current prime minister, Ariel Sharon, nor his leading opponent, Labor Party leader Amram Mitzna offers that option. Sharon stands for occupation. Mitzna stands for concession. Mitzna's party is selling optimism.

BENNY COHEN, LABOR PARTY CAMPAIGN MANAGER: I believe this is the optimist against the pessimist. We are the optimists.

SCHNEIDER: But the voters are not very optimistic. They can't afford to be, yet.

SHAVIT: Israelis want Mitzna's option of ending of occupation; they want Sharon to beat Arafat first.

SCHNEIDER: For the Labor Party, it's a case of bad timing.

SHAVIT: Choosing Mitzna was, as I said, it was like choosing George McGovern in the middle of a war.

SCHNEIDER: Labor tried to deal with the problem by running an ad touting Mitzna's military record.

COHEN: (UNINTELLIGIBLE) the army Yitzhak Rabin in a ceremony passed the torch and (UNINTELLIGIBLE) Mitzna, thank you for what you are and what you do.

SCHNEIDER: Sharon's Likud Party used the image of a fireside chat with the prime minister to capture the voters' mood of sober realism, even though there aren't many firesides in Israel.

EYAI ARAD, LIKUD POLITICAL CONSULTANT: (UNINTELLIGIBLE) and said we have known difficult times, we'll still have difficult times ahead, but we have first signs of hope, cracks, he called them, and I'm not going to allow Israel to miss that opportunity for peace.

SCHNEIDER: Labor has already more or less conceded defeat, this time. Mitzna says he's confident of victory sometime in the future. The only question in this election is whether Sharon will get a big mandate or a narrow, grudging victory. That could happen if a lot of frustrated voters end up voting for small parties. After all, there are 28 parties on the ballot.

Bill Schneider, CNN, Tel Aviv.

(END VIDEOTAPE)

WOODRUFF: And with me now to talk more about tomorrow's elections and other issues facing Israel is Daniel Ayalon. He is the Israeli ambassador to the United States. Mr. Ambassador, if you landed on this planet from Mars and you saw, well, there is this country that has 28 political parties, this is their third election for a prime minister in four years, this observant might ask, is this country ungovernable?

DANIEL AYALON, ISRAELI AMBASSADOR TO U.S.: I would say this is, I see it as a celebration of democracy. You know, Israel is a small country, the size of New Jersey, but it's a great democracy. More democracy, in a democracy, we have choice. And as you rightly mentioned, 28 parties are running. Only a few will get in. You know, the elections are equitable. The whole country is just one district. There are about 8,000 ballots throughout the country. Secret, one vote for one person, and tomorrow we'll know exactly who will go in and also the proportions of each party in the Knesset.

WOODRUFF: Do you agree with the columnist that Bill Schneider interviewed, Ari Shavit, that the Israeli voters are not getting the choices that they want this time? They are being asked to choose between two things that neither one of which they want. One meaning end the occupation more quickly than they're willing to, and the other, don't negotiate at all?

AYALON: No, I don't agree. I think the Israelis have a clear choice. I think that they have leaders in whom they can trust, and I think the polls already indicate what is there they want. This is a very true reflection of what the Israeli public wants.

WOODRUFF: There are, what, 120 seats in the Knesset. The predictions are that Mr. Sharon will get 30, maybe 35 seats. If that's the case, he's going to start out having to deal, wheel and deal. Isn't he going to start out, necessarily, in a weakened position because of this?

AYALON: Well, Judy, I would say, historically, from the very early dates of the states, there was not ever one party which had majority, meaning more than 60 votes of the Knesset out of 120. So, always, they had to seek out for a coalition. In a way, this is a part of our checks and balance, where you have power-sharing.

WOODRUFF: But this is one-fourth.

AYALON: This is true.

And we have had this experience before. I would say, for Prime Minister Sharon, he would try to have a broad-based government as he can and he will reach out to Labor and many other parties to join in. The more join in, the better, because of the crisis we are in, the terror, Iraq looming ahead, economics. So, certainly, he will try to reach out and have as many parties join in.

WOODRUFF: But don't you believe that, by necessity, to get the seat that he's going to need to make decisions, isn't he going to have to move even farther to the right, reach out to the religious parties, among others?

AYALON: No, I'm not sure. We have a platform. Just remember that we had a national unity government. So, already, there was a platform which was mutual for both Likud and Labor. So, there is a good basis for continuation.

(CROSSTALK)

WOODRUFF: But Labor is saying they don't want to be part of a coalition.

AYALON: Well, I would like to -- I wouldn't want to preempt anything. And we will see after the elections. I think it is important to see, after the results are in, what each party says. But, definitely, there is a growing realization and there is a need; 75 percent of all Israelis would like to see a national unity government. So, hopefully, this will be the case.

WOODRUFF: Let me quickly, finally, ask you about the U.N. weapons inspectors' reports today, saying, in essence, they need more time, that the cooperation -- they've had some cooperation, but not enough on the substance. Should these inspectors be given more time? And, if so, how much more?

AYALON: We, I think we have to look at the pattern of the last 12 years of deceit and, really, of armament.

And the problem is the threat. We have here a regime in Baghdad which is relentlessly pursuing weapons of mass destructions. They have tons of it, which they have to prove where they are. They are not accountable for. We also know that they had a relentless effort to acquire nuclear, which is very, very alarming. So, I think the fastest this regime is being disarmed is the better. Of course, we would like to see it in a peaceful way. But this is up to Saddam, not up to us.

WOODRUFF: So more time, but not all the time in the world; is that what you're saying?

AYALON: Correctly.

WOODRUFF: All right, Ambassador Daniel Ayalon, we thank you very much. We appreciate you coming by. It's good to see you.

AYALON: Thank you. Thanks.

WOODRUFF: We'll be watching the vote tomorrow.

AYALON: Pleasure.

WOODRUFF: All right.

And after two months of renewed inspections in Iraq, as we just discussed, up next, CNN Nic Robertson looks back at the open doors and the obstacles that the U.N. teams have faced.

(COMMERCIAL BREAK)

WOODRUFF: The state of homeland security: Are our nation's cities and states getting shortchanged? -- the story coming up.

(NEWS BREAK)

WOODRUFF: On the ground in Iraq, CNN senior international correspondent Nic Robertson has been following the inspection process over the past two months.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Good morning. Are you coming with us today?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: Excellent.

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT (voice-over): After almost 60 days of U.N. inspections, cooperation from Iraqi officials still has much of the appearance of being good. It's the way it's been now for over 400 site visits.

Help in finding the way when lost. Doors opened, mostly without delay. But just opening doors and showing the way has not been the proactive cooperation the U.N. wants.

HANS BLIX, U.N. CHIEF WEAPONS INSPECTOR: It requires comprehensive inspection. And it requires very active Iraqi cooperation. ROBERTSON: Despite the high speed car chases, and inspectors efforts to hide where they're going, most agree no smoking gun has been found thus far. Iraqis have a simple explanation. They have no weapons of mass destruction.

GEN. AMER AL-SAADI, HUSSEIN SCIENTIFIC ADVISER: Will you accept my story unless you have evidence to the contrary. And you don't have evidence to the contrary. If they had, they would come up with it right away.

ROBERTSON (on camera): And that's the issue that dogs everything the inspectors do here. Their mission has been set up to succeed only if Iraq actively helps the inspectors by providing the evidence that proves their weapons of mass destruction programs are dead, and that no more development is going on.

(voice-over): It was the inspectors visit to a sensitive presidential palace early December that gave the first hint to U.N. experts, difficulties lay ahead.

AL-SAADI: We consider the entry of the presidential sites as unjustified.

ROBERTSON: Iraq's 12,000 page weapons declaration soon after began deepening those earlier concerns.

BLIX: On the substantive issues, relating to anthrax or V.X., number of Scud missiles, we have not discussed that here.

ROBERTSON: The discovery of a dozen chemical warheads and documents at a scientist's house just days before U.N. weapons chief Hans Blix's visit a week ago hinted the U.N. was making progress.

BLIX: And we have agreed on a number of points.

ROBERTSON: Announcements of improved cooperation bode well. But barely was Blix back in New York when the U.N. came under renewed verbal attack in Baghdad: first, a farm manager suing for damage to property; then a religious leader claiming inspectors violated his mosque, all at a time when the U.N. was looking for confidence- building gestures.

And of all the U.N. demands, the key one for many inspectors, to hold private interviews with Iraqi scientists, has still not been met.

AL-SAADI: As we promised that we shall encourage the scientists to make an interview, we did our best.

ROBERTSON (on camera): And that's where it stands now. Iraq's scientists, many international experts believe, are the only people who can fully reveal Iraq's true weapons of mass destruction capability. The question remains for many U.N. inspectors: Just how much cooperation are the Iraqis giving them?

Nic Robertson, CNN, Baghdad.

(END VIDEOTAPE)

WOODRUFF: Well, even as the Bush administration warns Iraq that time is running out, the U.S. troop deployment in the Persian Gulf region is running somewhat behind schedule.

Let's bring in our Pentagon correspondent, Barbara Starr.

Barbara, just how behind schedule are they?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, at the moment, Judy, just a little bit. And there are plans to make it up. They think they will be on schedule.

Indeed, Pentagon officials tell CNN that their plan is still to have enough troops and forces in place by mid-to-late February to be able to offer the president the option of going to war, if he makes that political decision, and that they will be able to move very quickly after he makes that decision.

Where they're behind is here. There are now about 80,000 U.S. troops in the region. They'd hoped to have 100,000 troops in the region by this time. But there's a lot of firepower on the way and things should begin to sort out in the next several days.

Just a couple of examples: There are nearly 20 ships and submarines in the region capable of firing those Tomahawk cruise missiles, very precise weapons that are expected, of course, to be used in the opening hours ever any conflict to go against bunkers, other highly fortified targets in and around central Baghdad. Some of those tomahawks on submarines, very stealthy, they are going to move, perhaps, against the most critical targets.

There are also four aircraft carriers that will be in place by that timeframe, possibly a fifth. Each of those has about 70 aircraft on deck. Navy sources say they could make plans to send two additional aircraft carriers if they had to.

Now, in terms of the air armada, there are about 400 warplanes, Air Force and Navy, in the region now, about another 100 airplanes, possibly, on the way in the next several weeks. That will also beef up the combat firepower. So, they're playing a delicate timing dance here, just enough, just in time. They want to have plenty of firepower in the region, but they want to have it timed to when they believe the president may make a decision. They don't want everybody sitting around in the Persian Gulf in the desert for weeks. They want to be ready to go when he makes that decision -- Judy.

WOODRUFF: Well, Barbara, we're now hearing talk that maybe the administration is going to be willing to give the U.N. weapons inspectors the additional time that they're asking for. If they do, what does that mean for the Pentagon?

STARR: Well, I don't think the military would reject that idea too much in terms of that will give them more time to assemble the large number of ground forces and equipment they want. It will give those forces, those troops, time to get acclimated to the region, time to train up, prepare a little bit more and be ready to go. But what they don't want to do is have those forces then sitting around in the Persian Gulf for weeks on end. They don't want it to drag out too long. It's sort of like that just-in-time delivery that you hear about in the express mail commercials.

WOODRUFF: OK, all right, thanks for helping us understand what it's all about. Barbara, thanks very much.

A new anti-war TV ad begins airing in Washington and New York tomorrow in the lead-up to President Bush's State of the Union address. The spot features a former Reagan administration terrorism expert and actress Susan Sarandon.

(BEGIN VIDEO CLIP, AD)

SUSAN SARANDON, ACTRESS: Before our kids start coming home from Iraq in body bags, women and children start dying in Baghdad, I need to know, what did Iraq do to us?

EDWARD PECK, FORMER U.S. AMBASSADOR: The answer is nothing. Iraq had nothing to do with 9/11, nothing to do with al Qaeda. Its neighbors don't think it's a threat. Invading Iraq will increase terrorism, not reduce it.

(END VIDEO CLIP)

WOODRUFF: The $200,000 ad buy is funded by True Majority. That's a public advocacy group heading by Ben & Jerry's co- founder Ben Cohen.

We update U.S. efforts to secure the homeland straight ahead. The new secretary is in place. The new office is up and running. but is the nation falling short in preparing first-responders? We follow the money -- next on INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: In addition to the economy and Iraq, homeland security is expected to be among the major themes in tomorrow's State of the Union address.

Our Jeanne Meserve joins me now with an update on government efforts to train and outfit America's first-responders -- hi, Jeanne.

JEANNE MESERVE, CNN CORRESPONDENT: Hi, Judy.

In the realm of homeland security, there is one unanimous opinion: Terrorists will hit again. And when they do, it is local firemen, policemen and EMTs who will respond first. Are they ready? And are their cities doing all they can to prevent a terrorist attack?

Almost any local official will tell you no. And the reason is money. According to the National League of Cities, cities and towns have spent approximately $3 billion on homeland security since 9/11. And yet none, outside of Washington, D.C. and New York City, have gotten any significant federal assistance. Governors and county executives have the same complaints and say, in these tough budgetary times, they're being faced with the choice of reducing their homeland security efforts or cutting other programs.

Democrats in Congress say the administration is to blame. They point to President Bush's veto of $150 million in first-responder grants in August and the Justice Department's decision to suspend awarding grants to first-responders. The administration counters, that money will flow to the states and localities if Congress will just hurry up and pass the long-stalled 2003 budget.

In that budget, the administration did request $3.5 billion for first-responders. But the Senate reduced that amount to slightly less than $2 billion. And the final number is still unknown. And we don't know what the president will propose for fiscal 2004, though Secretary Ridge of the new Department of Homeland Security said on Friday that mayors will be -- quote -- "pretty pleased" with the dollar amount.

But many experts outside of government say the overall investment in homeland security is still billions of dollars short of where it should be, and asks, is this any way to fight a war on terror and win it? -- Judy.

WOODRUFF: I think we can count on the fact we have not heard the end of this debate.

MESERVE: You bet.

WOODRUFF: All right, Jeanne, thanks very much.

Well, Bob Novak will give us the "Inside Buzz." When we return, find out which member of Congress may be chanting hooray for Hollywood, that is, if rumors don't get in his way.

(COMMERCIAL BREAK)

WOODRUFF: Bob Novak here now with some "Inside Buzz."

All right, what's this about a member of Congress up for a very cushy Hollywood-related job?

ROBERT NOVAK, CNN POLITICAL ANALYST: The talk of the town in the lobbyist community is a report that Congressman Billy Tauzin of Louisiana, Republican, may be the successor to Jack Valenti as the motion picture industry's chief lobbyist in Washington.

This is a creme de la creme of all lobbyist jobs in Washington, one of the best jobs in Washington, not only the multimillion dollar salary, but there's no heavy lifting. You rub elbows with the Hollywood people. Now, Tauzin and the Motion Picture Association deny it. Valenti's only 81 years old. He's been in the job 37 years. But there is a serious problem that Tauzin heads the Telecommunications Subcommittee.

And if he's going to stay on this committee the next several months, he's got to say he's not going to take this job or they'll wonder which master he's serving.

WOODRUFF: All right, a very different story: A prominent Hispanic judge may be on the fast track for a promotion?

NOVAK: Miguel Estrada. He's not a judge yet. He's a young brilliant, very conservative Latino lawyer in Washington, D.C. And the conservatives have wanted to get him confirmed. He's been appointed to the U.S. Court of Appeals for the District of Columbia. They wanted to get him confirmed starting last year, so they can get him ready for the Supreme Court as the first Latino justice on the Supreme Court.

He's on the fast track now. I think he's going to be confirmed for the Court of Appeals within a very short time. And then he may be on the way to a seat on the Supreme Court. He's only in his 40s.

WOODRUFF: Haley Barbour thinking about running for governor of Mississippi, not wasting any time raising money.

NOVAK: He has put out a letter to his fellow lobbyists asking them if they would join him in raising money and he has set a meeting for this week. Guess where the meeting is going to be? In his lobbyist office in Washington, the Barbour, Rogers & Griffin offices.

Now, Haley is running for governor, but he is not resigning yet as a lobbyist. And I just love that, raising money for your governor's campaign in your own lobbyist office. He's running against an incumbent Democratic governor, Ronnie Musgrove. And it's going to be the premiere political race, I think, of the off-year elections.

WOODRUFF: Very quickly, a woman we had on the program Friday cooking Maryland crab cakes, Democratic Senator Barbara Mikulski of Maryland, may have some opposition?

NOVAK: She is supposed to be a cinch to be elected to a fourth term in '04. But there's a possibility that a man named Wayne Curry -- he was the Prince George's County Democratic chairman. He's an African-American. He may switch to the Republican Party. I shouldn't say Democratic chairman. He was the county executive. He's a Democrat.

He may switch to the Republican Party, very close to Governor Ehrlich. He would give her a tough struggle, be a very prime race, if he switches Republican. And that's the rumor.

WOODRUFF: Well, if there's anybody who knows what's going on, it's Bob Novak.

Thank you. And we'll see you very soon.

On this crucial day and crucial week for the Bush White House, up next, we will consider the political landscape in Januarys past, present and future.

(COMMERCIAL BREAK)

WOODRUFF: This day may be remembered as a turning point toward a second U.S. war against Iraq.

But January 27 already is historic in the annals of war and peace. On this day 30 years ago, the Vietnam peace accords were signed in Paris. And looking ahead to 2004, January 27 is expected to be a big political day. The New Hampshire primary is tentatively scheduled exactly one year from today. We can't wait.

That's it for INSIDE POLITICS. I'm Judy Woodruff. Thanks for joining us.

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





of the Union Address Will Touch on War, Economy>


Aired January 27, 2003 - 16:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
HANS BLIX, U.N. CHIEF WEAPONS INSPECTOR: Iraq appears not to have come to a genuine acceptance, not even today, of the disarmament which was demanded of it.

(END VIDEO CLIP)

ANNOUNCER: Words that could lead to war. How is President Bush responding to the U.N. weapons report?

(BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The inspectors are doing their best job. But the more time they get, the more they're getting the runaround from Saddam Hussein.

(END VIDEO CLIP)

ANNOUNCER: Protests and politics. Are Americans growing wearier of attacking Iraq? We'll pore over new polls.

The State of the Union. On the eve of the president's big speech, Democrats fire warning shots.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: What we're getting from the White House are confused signals instead of clear direction. Slogans instead of solutions. Posturing instead of progress.

(END VIDEO CLIP)

ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff.

JUDY WOODRUFF, HOST: Thank you for joining us. At this hour, Wall Street is showing its anxiety about today's report on Iraqi weapons and the prospects of war. Moments ago, the Dow closed down more than 100 points. Earlier, it fell below the 8,000 level for the first time in three months. We'll have a live report ahead.

That report by U.N. weapons inspectors is dominating this news cycle. Chief inspector Hans Blix says Iraqi officials have failed to fully account for chemical and biological weapons. And, he said, they have not genuinely accepted the demands to disarm. He says there was no new material in Iraq's arms declaration and no private interviews with Iraqi scientists. But inspectors add, no evidence has been found that Baghdad has restarted its nuclear weapons program. They say that more time is needed for inspections.

(BEGIN VIDEO CLIP)

BLIX: It is not enough to open doors. Inspection is not a game of catch us catch can, rather, as I noted, it is a process of (UNINTELLIGIBLE) for the purpose of creating confidence.

MOHAMMED ALDOURI, IRAQI AMBASSADOR TO U.N.: We think that there is no more need for inspections or inspectors, but if they consider that there's any, we are willing to cooperate with them for the future.

(END VIDEO CLIP)

WOODRUFF: Iraq insisting that no country in the world has disarmed as it did in the past decade. But the United States says that it hasn't heard any evidence that Iraq will fully disarm. Dana Bash is at the White House for us, Richard Roth is at the U.N. Dana, to you first. What is the Bush administration saying about this report?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, the administration has set the bar pretty high in terms of what this report should have done. The administration said earlier that they had expected, they hoped that the report would show that Iraq is in full compliance, and if they failed to be in full compliance, then that would be -- if it was even partial, then that would be proof that Saddam Hussein is not complying, is not -- is defying the will of the world community.

And officials from here at the White House to the State Department, including Secretary of State Colin Powell, made clear that the kinds of weapons that Hans Blix and Mohamed ElBaradei talked about, VX gas and anthrax, and other chemical and biological weapons were very dangerous and it was proof that because Saddam Hussein is not showing the U.N. that he actually has those weapons or at least proof that he has gotten rid of those weapons, that that is proof that he is really defying the will.

He also, in terms of the call for more time from those diplomats at the U.N. Called for even a couple of months, Secretary of State Colin Powell did not seem moved.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: Even at this late date, the United States hopes for a peaceful solution. But a peaceful solution is possible only if Iraq disarms itself with the help of the inspectors. The issue is not how much more time the inspectors need to search in the dark. It is how much more time Iraq should be given to turn on the lights and to come clean. And the answer is -- not much more time. Iraq's time for choosing peaceful disarmament is fast coming to an end.

(END VIDEO CLIP)

BASH: Judy, Powell spoke in quite defiant terms, saying that when the nations that signed up for, that voted for U.N. Resolution 1441 voted for it, it was unanimous vote, 15 nations voted for it, they knew that there was language in there saying that if Iraq didn't comply, they would -- that Saddam Hussein would suffer serious consequences, and that now they've got to realize that that is something that they have to live up to, and he also said that this is a real challenge for the U.N. and the future of that body -- Judy.

WOODRUFF: All right, Dana. We're going to ask you to stand by and we're going to go now quickly to Richard Roth at the U.N. Richard, how are the other members of the U.N. Security Council taking all this, and what's next at the U.N.?

RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Well, your show is called INSIDE POLITICS. Let me tell you, a lot of inside politics going on right now inside the United Nations Security Council. U.S. ambassador, John Negroponte, laying out what Dana reported and based upon what Secretary Powell's views are, that time is running out, that this report by Hans Blix showed that Iraq was not cooperating.

Inside the council, though, differences emerging and outside with the press. Russia, China, Germany, France indicating while they want Iraq to cooperate with the inspectors, they're willing to give Hans Blix and Mohamed ElBaradei, the nuclear arms chief, more time to continue their work. The process has begun, it's moving forward, said several ambassadors. Germany noted that the tools of the inspectors have been sharpened to an unprecedented point. Let them just do their job.

Mohamed Elbaradei asked the council for more months to clear up the nuclear file. He said it's a good investment for peace.

These disagreements will be heard in the next days and weeks at the Security Council. Right now, Hans Blix is back in front of the Security Council behind closed doors answering some questions, and Wednesday will be the first full day, Judy, when the council members, with and without Blix at times, will be discussing their differences -- Judy.

WOODRUFF: All right. Richard Roth, thanks.

And now, Dana, I want to come back to you. We know that tomorrow is the State of the Union address. How much of that address is going to be on Iraq, and are we going to hear anything new?

BASH: Well, White House aides are saying it's probably going to be about half on the domestic agenda, what the White House calls the president's compassionate agenda; the other half will be on international policy, including Iraq.

Now, what the White House is saying on Iraq is that he will certainly not declare war, but the president will talk about the fact that this is a nation poised for war and that the threat of war is very real. The president did practice the State of the Union all weekend, at least for a long time yesterday. He is doing so again today. Meeting with aides, practicing on the TelePrompTer. He will talk about Iraq in kind of grand terms and talk about the threat that Saddam Hussein poses, but aides are saying that we shouldn't look for a lot of specific new evidence. That there will be time for that in the days to come.

You heard Secretary of State Colin Powell earlier today alluding to the fact that they might give some new evidence later this week about a potential link between Iraq and al Qaeda, but the president, in addition to talking about Iraq, will also talk about some other countries in what he labeled last year "the axis of evil." Those are North Korea and Iran. Unclear, probably unlikely, he will use that term "axis of evil."

But on the domestic side, he'll talk about his economic plan, that $674 billion plan he says will jump-start the economy. He will also talk about health care, and something that the White House plans to unveil later this week, Medicare reform. He will talk about the fact that he hopes to get prescription drugs, prescription drug plan for seniors. That of course, Judy, an incredibly important issue in the next election -- Judy.

WOODRUFF: Indeed it is. All right, Dana. Thanks very much. Thanks to you and to Richard.

Well, White House press secretary Ari Fleischer says the president's decision on whether to go to war will not be influenced by polls, but public opinion on Iraq appears to be shifting. Our Bill Schneider is over in Israel, but he's still keeping tabs on the poll numbers here at home. And Bill, first of all, how important to American voters is this U.N. inspectors' report that we heard today?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Very. We asked Americans, who do you trust more to make the right decisions regarding Iraq? The Bush administration or the United Nations? No contest. Right? Well, think again. It's a tie. As many people say they trust the U.N. as the Bush administration. Most Americans say, give the U.N. inspectors more time. Don't invade Iraq without a new U.N. vote. Don't invade without the support of our European allies, including France and Germany. There's no indication here, Judy, that Americans want to rush to war.

WOODRUFF: What about the president's Iraq policy, Bill? Is he gaining or losing support for that?

SCHNEIDER: Losing. Look at the president's ratings on handling world affairs. Down 10 points since the beginning of January. Now, do Americans still support the idea of sending U.S. ground troops to remove Saddam Hussein from power? Well, as a matter of fact, they do, 52 percent, but that number has been falling. At 43 percent opposed, opposition to a war in Iraq is at the highest level since 9/11.

You know, the president has a chance to turn that trend around with his speech tomorrow night. But he's facing a problem, and here it is -- most Americans say the economy, not Iraq, is the more important issue facing the country. The economy is what most Americans really want the president to talk about tomorrow night -- Judy.

WOODRUFF: And no doubt that has to do with why the White House is now saying at least half the speech tomorrow night is going to be about domestic issues.

All right. Bill, thanks very much. And we'll be talking to you later about what's going on in Israel.

Well today's "Campaign News Daily" focuses on Iraq and the 2004 Democratic hopefuls. Potential supporters are pressing the candidates and the candidates are pressing each other about U.S. policy and a potential war.

Former Vermont Governor Howard Dean and Congressman Dick Gephardt make back-to-back appearances this weekend in New Hampshire. Dean once again hammered the other candidates, including Gephardt, who voted last fall to give the president authority to wage war. Gephardt defended his vote by saying he was responsible for language in the bill calling on the U.S. to work with the United Nations.

In addition to Gephardt, Senators John Kerry, John Edwards and Joe Lieberman also voted for the Iraq resolution. And all of them been forced by anti-war party activists to defend their votes. Howard Dean made opposition to current U.S. policy part of his standard stump speech. And Al Sharpton is also on the record opposing the use of force. Dean and Sharpton, of course, are not members of Congress and, therefore, did not have to vote on the Iraq resolution.

Well, there's much more ahead on INSIDE POLITICS.

(BEGIN VIDEO CLIP)

DASCHLE: A triple threat of war, terrorism and recession are combining to make Americans unsure about their future. And unclear about the course our nation is taking.

(END VIDEO CLIP)

WOODRUFF: A prebuttal to the president's speech by top Democrats on Capital Hill. How tough are their warnings about war?

First responders on the line. Is the government giving them enough money to keep the homeland secure?

(BEGIN VIDEO CLIP)

SCHNEIDER: In Tel Aviv, at the Israeli Labor Party's message center. We'll pick up the buzz in the final hours of Israel's election campaign.

(END VIDEO CLIP)

(COMMERCIAL BREAK) WOODRUFF: War jitters on Wall Street. The showdown with Iraq take as bite out of the markets and your pocketbook. Coming up, we'll go live to the New York Stock Exchange for a look at your money.

(BEGIN VIDEO CLIP)

WOODRUFF (voice-over): It's time again to check your "I.P. I.Q." President Bush gives his State of the Union Address tomorrow night. Not counting tomorrow night, how many times has Mr. Bush addressed Congress? Is it, A -- two, B -- three or C -- four? We'll tell you the answer later on INSIDE POLITICS.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

WOODRUFF: A new definition there.

Well, Democratic Party leaders tried today again to describe how they see the state of the union before the president delivers his speech tomorrow to a prime-time, worldwide audience. Our Congressional Correspondent Jonathan Karl has more on what some are calling the Democratic prebuttal.

(BEGIN VIDEOTAPE)

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): From the Democratic point of view, the state of the union isn't so good.

DASCHLE: The state of our union today is anxious. A triple threat of war, terrorism and recession are combining to make Americans unsure about their future. And unclear about the course our nation is taking.

KARL: In a one-two punch billed as a prebuttal to the State of the Union Address, Congress' two top Democrats said the problem is President Bush faces a credibility gap. Some of their toughest criticisms were on the handling of Iraq.

DASCHLE: If we have proof of nuclear and biological Wednesday, why don't we show that proof to the world?

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Does an invasion of Iraq and opening that Pandora's box in that region make us safer?

DASCHLE: How are our efforts to deal with threat helped by short circuiting an inspections process that we demanded in the first place?

KARL: On the question of war, the two Democratic leaders have been split. Last fall Daschle voted yes on giving President Bush the authority to wage war against Iraq. Pelosi voted no. The resolution passed overwhelmingly.

Democrats have also been divided on the economy. Pelosi and Daschle have presented separate plans to boost the economy. All told, they're about a dozen different Democratic plans, but they do agree on one thing: the president's approach is not working.

PELOSI: Last year President Bush told the nation in his State of the Union Address that his economic plan could be summarized in a single word: jobs. Unfortunately, his record could be summed up in one phrase: loss of jobs.

KARL: And the president's attempt to sell his $674 billion economic stimulus plan will fall on deaf Democratic ears. Daschle declared the centerpiece of the plan, dead on arrival.

(END VIDEOTAPE)

KARL: On Iraq, Democratic president's hopeful Joe Lieberman offered a much different assessment in the Democratic leaders. Lieberman reacted to today's weapons inspection report much the way the White House did and said this about President Bush, quote, "The president has all the authority required to hold Saddam accountable and eliminate the threat he poses, and I stand ready to support him, should he conclude it is necessary to use that authority to protect our security."

Lieberman did go on to say he thinks the president needs to do a better job of making the case for action in Iraq to the American people. But as you can see, Judy, very strong support from a very prominent Democrat for the president's policy on Iraq.

WOODRUFF: Now, Jon, you've also been talking to some Republicans up there on the Hill. What are they saying the president needs to do tomorrow night?

KARL: Well it's interesting. Almost to a person key Republicans up here on Capitol Hill are saying that the president needs to come in to the State of the Union Address making a very clear and very strong case for action in Iraq. Acknowledging he has not done enough to convince the American people and our allies.

As a matter of fact, I have a statement that was put out by Kay Bailey Hutchison, a very strong ally to the president from Texas, Republican leadership here in the Senate, who said the Bush administration should increase its efforts to make the case against Saddam clear to the American people and to the world.

And she goes on to say that she believes the State of the Union Address is just the opportunity to do that. That's a position shared by most Republicans. They're looking for a very strong case from the president.

WOODRUFF: All right, Jon. Thanks very much.

And CNN's special coverage of the State of the Union starts tomorrow right here on INSIDE POLITICS. I will be live from Capitol Hill and among my guests, House Speaker Dennis Hastert and House Minority Whip Steny Hoyer.

And stay with us for our live coverage of the State of the Union Address. My colleagues and I will be here starting at 8:45 p.m. Eastern.

Next, the Israeli tanks seal off Gaza and the West Bank as Israelis get ready to cast ballots. A crucial election and what the outcome means to the Mideast peace process, when we come back.

Plus, shipping out. Destination, the Persian Gulf. But is the Pentagon fall being hind its own deployment schedule? We'll go live to the Pentagon for the latest.

But first, the showdown with Iraq and your money. Rhonda Schaffler joins us live from Wall Street with some negative numbers, and Rhonda, the markets were reacting today. Weren't they?

RHONDA SCHAFFLER, CNNfn CORRESPONDENT: They were most certainly, Judy. We'll get to that in a moment.

First, we want to let you know that Wall Street now has taken its seventh beating in eight sessions. The Dow also fell below the 8,000 mark for the first time in three months.

Here's why -- investors began dumping shares as U.N. weapons inspectors said Iraq has not fully accounted for banned weapons. It was at that point we saw the market trade at its first session low. Investors also dumping stocks ahead of the president's State of the Union Address tomorrow night. Analysts saying the global unease creates just too much uncertainty for investors to tolerate.

(BEGIN VIDEO CLIP)

LARRY WACHTEL, PRUDENTIAL FINANCIAL: Once the bombs begin to fall, as it was in 1991, I think the market will respond favorably to that. They'll probably get their arms around the situation. But right now, we're in this twilight zone when no one makes a decision either on the corporate level or on the investment level, and we just drift along.

(END VIDEO CLIP)

SCHAFFLER: Or perhaps sink is the more appropriate word today. Here's the closing numbers: Dow off 141 points at 7,989. It has now tumbled more than 800 points in less than two weeks. Nasdaq down 1 percent. That's the very latest from Wall Street.

Just ahead, Judy interviews the Israeli ambassador to the U.S., and an update on the political battle over spending on homeland security.

(COMMERCIAL BREAK)

WOODRUFF: It's time again to check your "I.P." IQ. President Bush gives his State of the Union address tomorrow night. Earlier, we asked, not counting tomorrow night, how many times has Mr. Bush addressed Congress? Is it, A, two, B, three or C, four? The correct answer is B, three times. The first was his economic message in February of 2001. The second was his September 20 address following the terrorist attacks on the U.S. The third was his State of the Union in January of 2002.

(COMMERCIAL BREAK)

WOODRUFF: Security is even tighter than usual in Israel today, just hours before a crucial election. Palestinians in the West Bank and Gaza are barred from crossing into Israel until Wednesday, after the elections are over. The latest polls project that Prime Minister Ariel Sharon's Likud Party will win the most seats in the new parliament. But Likud is expected to win only about 30 to 35 seats, far short of the majority in the 120-seat parliament. That will force Sharon to once again put together a coalition to govern.

In Israel, voters cast ballots for political parties, not for candidates. So what's on the mind of Israeli voters? Once again, here's our political analyst, Bill Schneider, in Tel Aviv.

(BEGIN VIDEOTAPE)

SCHNEIDER (on camera): Tuesday is election day in Israel. And what are people arguing about? War, peace, religion, marijuana. You name it.

(voice-over): Talk to people on the streets and in the cafes, and what you hear is frustration.

ARI SHAVIT, "HAARETZ": People don't believe in any of the leaders. Both major ideologies have collapsed.

SCHNEIDER: In the view of columnist Ari Shavit, Israeli voters are not getting the choice they want.

SHAVIT: Seventy percent of Israelis have a rather sensible, moderate approach to the conflict. They understand Israel must end occupation, they understand that ending occupation might not end the conflict, and, therefore, they want to end occupation in a cautious way.

SCHNEIDER: But neither the current prime minister, Ariel Sharon, nor his leading opponent, Labor Party leader Amram Mitzna offers that option. Sharon stands for occupation. Mitzna stands for concession. Mitzna's party is selling optimism.

BENNY COHEN, LABOR PARTY CAMPAIGN MANAGER: I believe this is the optimist against the pessimist. We are the optimists.

SCHNEIDER: But the voters are not very optimistic. They can't afford to be, yet.

SHAVIT: Israelis want Mitzna's option of ending of occupation; they want Sharon to beat Arafat first.

SCHNEIDER: For the Labor Party, it's a case of bad timing.

SHAVIT: Choosing Mitzna was, as I said, it was like choosing George McGovern in the middle of a war.

SCHNEIDER: Labor tried to deal with the problem by running an ad touting Mitzna's military record.

COHEN: (UNINTELLIGIBLE) the army Yitzhak Rabin in a ceremony passed the torch and (UNINTELLIGIBLE) Mitzna, thank you for what you are and what you do.

SCHNEIDER: Sharon's Likud Party used the image of a fireside chat with the prime minister to capture the voters' mood of sober realism, even though there aren't many firesides in Israel.

EYAI ARAD, LIKUD POLITICAL CONSULTANT: (UNINTELLIGIBLE) and said we have known difficult times, we'll still have difficult times ahead, but we have first signs of hope, cracks, he called them, and I'm not going to allow Israel to miss that opportunity for peace.

SCHNEIDER: Labor has already more or less conceded defeat, this time. Mitzna says he's confident of victory sometime in the future. The only question in this election is whether Sharon will get a big mandate or a narrow, grudging victory. That could happen if a lot of frustrated voters end up voting for small parties. After all, there are 28 parties on the ballot.

Bill Schneider, CNN, Tel Aviv.

(END VIDEOTAPE)

WOODRUFF: And with me now to talk more about tomorrow's elections and other issues facing Israel is Daniel Ayalon. He is the Israeli ambassador to the United States. Mr. Ambassador, if you landed on this planet from Mars and you saw, well, there is this country that has 28 political parties, this is their third election for a prime minister in four years, this observant might ask, is this country ungovernable?

DANIEL AYALON, ISRAELI AMBASSADOR TO U.S.: I would say this is, I see it as a celebration of democracy. You know, Israel is a small country, the size of New Jersey, but it's a great democracy. More democracy, in a democracy, we have choice. And as you rightly mentioned, 28 parties are running. Only a few will get in. You know, the elections are equitable. The whole country is just one district. There are about 8,000 ballots throughout the country. Secret, one vote for one person, and tomorrow we'll know exactly who will go in and also the proportions of each party in the Knesset.

WOODRUFF: Do you agree with the columnist that Bill Schneider interviewed, Ari Shavit, that the Israeli voters are not getting the choices that they want this time? They are being asked to choose between two things that neither one of which they want. One meaning end the occupation more quickly than they're willing to, and the other, don't negotiate at all?

AYALON: No, I don't agree. I think the Israelis have a clear choice. I think that they have leaders in whom they can trust, and I think the polls already indicate what is there they want. This is a very true reflection of what the Israeli public wants.

WOODRUFF: There are, what, 120 seats in the Knesset. The predictions are that Mr. Sharon will get 30, maybe 35 seats. If that's the case, he's going to start out having to deal, wheel and deal. Isn't he going to start out, necessarily, in a weakened position because of this?

AYALON: Well, Judy, I would say, historically, from the very early dates of the states, there was not ever one party which had majority, meaning more than 60 votes of the Knesset out of 120. So, always, they had to seek out for a coalition. In a way, this is a part of our checks and balance, where you have power-sharing.

WOODRUFF: But this is one-fourth.

AYALON: This is true.

And we have had this experience before. I would say, for Prime Minister Sharon, he would try to have a broad-based government as he can and he will reach out to Labor and many other parties to join in. The more join in, the better, because of the crisis we are in, the terror, Iraq looming ahead, economics. So, certainly, he will try to reach out and have as many parties join in.

WOODRUFF: But don't you believe that, by necessity, to get the seat that he's going to need to make decisions, isn't he going to have to move even farther to the right, reach out to the religious parties, among others?

AYALON: No, I'm not sure. We have a platform. Just remember that we had a national unity government. So, already, there was a platform which was mutual for both Likud and Labor. So, there is a good basis for continuation.

(CROSSTALK)

WOODRUFF: But Labor is saying they don't want to be part of a coalition.

AYALON: Well, I would like to -- I wouldn't want to preempt anything. And we will see after the elections. I think it is important to see, after the results are in, what each party says. But, definitely, there is a growing realization and there is a need; 75 percent of all Israelis would like to see a national unity government. So, hopefully, this will be the case.

WOODRUFF: Let me quickly, finally, ask you about the U.N. weapons inspectors' reports today, saying, in essence, they need more time, that the cooperation -- they've had some cooperation, but not enough on the substance. Should these inspectors be given more time? And, if so, how much more?

AYALON: We, I think we have to look at the pattern of the last 12 years of deceit and, really, of armament.

And the problem is the threat. We have here a regime in Baghdad which is relentlessly pursuing weapons of mass destructions. They have tons of it, which they have to prove where they are. They are not accountable for. We also know that they had a relentless effort to acquire nuclear, which is very, very alarming. So, I think the fastest this regime is being disarmed is the better. Of course, we would like to see it in a peaceful way. But this is up to Saddam, not up to us.

WOODRUFF: So more time, but not all the time in the world; is that what you're saying?

AYALON: Correctly.

WOODRUFF: All right, Ambassador Daniel Ayalon, we thank you very much. We appreciate you coming by. It's good to see you.

AYALON: Thank you. Thanks.

WOODRUFF: We'll be watching the vote tomorrow.

AYALON: Pleasure.

WOODRUFF: All right.

And after two months of renewed inspections in Iraq, as we just discussed, up next, CNN Nic Robertson looks back at the open doors and the obstacles that the U.N. teams have faced.

(COMMERCIAL BREAK)

WOODRUFF: The state of homeland security: Are our nation's cities and states getting shortchanged? -- the story coming up.

(NEWS BREAK)

WOODRUFF: On the ground in Iraq, CNN senior international correspondent Nic Robertson has been following the inspection process over the past two months.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Good morning. Are you coming with us today?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: Excellent.

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT (voice-over): After almost 60 days of U.N. inspections, cooperation from Iraqi officials still has much of the appearance of being good. It's the way it's been now for over 400 site visits.

Help in finding the way when lost. Doors opened, mostly without delay. But just opening doors and showing the way has not been the proactive cooperation the U.N. wants.

HANS BLIX, U.N. CHIEF WEAPONS INSPECTOR: It requires comprehensive inspection. And it requires very active Iraqi cooperation. ROBERTSON: Despite the high speed car chases, and inspectors efforts to hide where they're going, most agree no smoking gun has been found thus far. Iraqis have a simple explanation. They have no weapons of mass destruction.

GEN. AMER AL-SAADI, HUSSEIN SCIENTIFIC ADVISER: Will you accept my story unless you have evidence to the contrary. And you don't have evidence to the contrary. If they had, they would come up with it right away.

ROBERTSON (on camera): And that's the issue that dogs everything the inspectors do here. Their mission has been set up to succeed only if Iraq actively helps the inspectors by providing the evidence that proves their weapons of mass destruction programs are dead, and that no more development is going on.

(voice-over): It was the inspectors visit to a sensitive presidential palace early December that gave the first hint to U.N. experts, difficulties lay ahead.

AL-SAADI: We consider the entry of the presidential sites as unjustified.

ROBERTSON: Iraq's 12,000 page weapons declaration soon after began deepening those earlier concerns.

BLIX: On the substantive issues, relating to anthrax or V.X., number of Scud missiles, we have not discussed that here.

ROBERTSON: The discovery of a dozen chemical warheads and documents at a scientist's house just days before U.N. weapons chief Hans Blix's visit a week ago hinted the U.N. was making progress.

BLIX: And we have agreed on a number of points.

ROBERTSON: Announcements of improved cooperation bode well. But barely was Blix back in New York when the U.N. came under renewed verbal attack in Baghdad: first, a farm manager suing for damage to property; then a religious leader claiming inspectors violated his mosque, all at a time when the U.N. was looking for confidence- building gestures.

And of all the U.N. demands, the key one for many inspectors, to hold private interviews with Iraqi scientists, has still not been met.

AL-SAADI: As we promised that we shall encourage the scientists to make an interview, we did our best.

ROBERTSON (on camera): And that's where it stands now. Iraq's scientists, many international experts believe, are the only people who can fully reveal Iraq's true weapons of mass destruction capability. The question remains for many U.N. inspectors: Just how much cooperation are the Iraqis giving them?

Nic Robertson, CNN, Baghdad.

(END VIDEOTAPE)

WOODRUFF: Well, even as the Bush administration warns Iraq that time is running out, the U.S. troop deployment in the Persian Gulf region is running somewhat behind schedule.

Let's bring in our Pentagon correspondent, Barbara Starr.

Barbara, just how behind schedule are they?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, at the moment, Judy, just a little bit. And there are plans to make it up. They think they will be on schedule.

Indeed, Pentagon officials tell CNN that their plan is still to have enough troops and forces in place by mid-to-late February to be able to offer the president the option of going to war, if he makes that political decision, and that they will be able to move very quickly after he makes that decision.

Where they're behind is here. There are now about 80,000 U.S. troops in the region. They'd hoped to have 100,000 troops in the region by this time. But there's a lot of firepower on the way and things should begin to sort out in the next several days.

Just a couple of examples: There are nearly 20 ships and submarines in the region capable of firing those Tomahawk cruise missiles, very precise weapons that are expected, of course, to be used in the opening hours ever any conflict to go against bunkers, other highly fortified targets in and around central Baghdad. Some of those tomahawks on submarines, very stealthy, they are going to move, perhaps, against the most critical targets.

There are also four aircraft carriers that will be in place by that timeframe, possibly a fifth. Each of those has about 70 aircraft on deck. Navy sources say they could make plans to send two additional aircraft carriers if they had to.

Now, in terms of the air armada, there are about 400 warplanes, Air Force and Navy, in the region now, about another 100 airplanes, possibly, on the way in the next several weeks. That will also beef up the combat firepower. So, they're playing a delicate timing dance here, just enough, just in time. They want to have plenty of firepower in the region, but they want to have it timed to when they believe the president may make a decision. They don't want everybody sitting around in the Persian Gulf in the desert for weeks. They want to be ready to go when he makes that decision -- Judy.

WOODRUFF: Well, Barbara, we're now hearing talk that maybe the administration is going to be willing to give the U.N. weapons inspectors the additional time that they're asking for. If they do, what does that mean for the Pentagon?

STARR: Well, I don't think the military would reject that idea too much in terms of that will give them more time to assemble the large number of ground forces and equipment they want. It will give those forces, those troops, time to get acclimated to the region, time to train up, prepare a little bit more and be ready to go. But what they don't want to do is have those forces then sitting around in the Persian Gulf for weeks on end. They don't want it to drag out too long. It's sort of like that just-in-time delivery that you hear about in the express mail commercials.

WOODRUFF: OK, all right, thanks for helping us understand what it's all about. Barbara, thanks very much.

A new anti-war TV ad begins airing in Washington and New York tomorrow in the lead-up to President Bush's State of the Union address. The spot features a former Reagan administration terrorism expert and actress Susan Sarandon.

(BEGIN VIDEO CLIP, AD)

SUSAN SARANDON, ACTRESS: Before our kids start coming home from Iraq in body bags, women and children start dying in Baghdad, I need to know, what did Iraq do to us?

EDWARD PECK, FORMER U.S. AMBASSADOR: The answer is nothing. Iraq had nothing to do with 9/11, nothing to do with al Qaeda. Its neighbors don't think it's a threat. Invading Iraq will increase terrorism, not reduce it.

(END VIDEO CLIP)

WOODRUFF: The $200,000 ad buy is funded by True Majority. That's a public advocacy group heading by Ben & Jerry's co- founder Ben Cohen.

We update U.S. efforts to secure the homeland straight ahead. The new secretary is in place. The new office is up and running. but is the nation falling short in preparing first-responders? We follow the money -- next on INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: In addition to the economy and Iraq, homeland security is expected to be among the major themes in tomorrow's State of the Union address.

Our Jeanne Meserve joins me now with an update on government efforts to train and outfit America's first-responders -- hi, Jeanne.

JEANNE MESERVE, CNN CORRESPONDENT: Hi, Judy.

In the realm of homeland security, there is one unanimous opinion: Terrorists will hit again. And when they do, it is local firemen, policemen and EMTs who will respond first. Are they ready? And are their cities doing all they can to prevent a terrorist attack?

Almost any local official will tell you no. And the reason is money. According to the National League of Cities, cities and towns have spent approximately $3 billion on homeland security since 9/11. And yet none, outside of Washington, D.C. and New York City, have gotten any significant federal assistance. Governors and county executives have the same complaints and say, in these tough budgetary times, they're being faced with the choice of reducing their homeland security efforts or cutting other programs.

Democrats in Congress say the administration is to blame. They point to President Bush's veto of $150 million in first-responder grants in August and the Justice Department's decision to suspend awarding grants to first-responders. The administration counters, that money will flow to the states and localities if Congress will just hurry up and pass the long-stalled 2003 budget.

In that budget, the administration did request $3.5 billion for first-responders. But the Senate reduced that amount to slightly less than $2 billion. And the final number is still unknown. And we don't know what the president will propose for fiscal 2004, though Secretary Ridge of the new Department of Homeland Security said on Friday that mayors will be -- quote -- "pretty pleased" with the dollar amount.

But many experts outside of government say the overall investment in homeland security is still billions of dollars short of where it should be, and asks, is this any way to fight a war on terror and win it? -- Judy.

WOODRUFF: I think we can count on the fact we have not heard the end of this debate.

MESERVE: You bet.

WOODRUFF: All right, Jeanne, thanks very much.

Well, Bob Novak will give us the "Inside Buzz." When we return, find out which member of Congress may be chanting hooray for Hollywood, that is, if rumors don't get in his way.

(COMMERCIAL BREAK)

WOODRUFF: Bob Novak here now with some "Inside Buzz."

All right, what's this about a member of Congress up for a very cushy Hollywood-related job?

ROBERT NOVAK, CNN POLITICAL ANALYST: The talk of the town in the lobbyist community is a report that Congressman Billy Tauzin of Louisiana, Republican, may be the successor to Jack Valenti as the motion picture industry's chief lobbyist in Washington.

This is a creme de la creme of all lobbyist jobs in Washington, one of the best jobs in Washington, not only the multimillion dollar salary, but there's no heavy lifting. You rub elbows with the Hollywood people. Now, Tauzin and the Motion Picture Association deny it. Valenti's only 81 years old. He's been in the job 37 years. But there is a serious problem that Tauzin heads the Telecommunications Subcommittee.

And if he's going to stay on this committee the next several months, he's got to say he's not going to take this job or they'll wonder which master he's serving.

WOODRUFF: All right, a very different story: A prominent Hispanic judge may be on the fast track for a promotion?

NOVAK: Miguel Estrada. He's not a judge yet. He's a young brilliant, very conservative Latino lawyer in Washington, D.C. And the conservatives have wanted to get him confirmed. He's been appointed to the U.S. Court of Appeals for the District of Columbia. They wanted to get him confirmed starting last year, so they can get him ready for the Supreme Court as the first Latino justice on the Supreme Court.

He's on the fast track now. I think he's going to be confirmed for the Court of Appeals within a very short time. And then he may be on the way to a seat on the Supreme Court. He's only in his 40s.

WOODRUFF: Haley Barbour thinking about running for governor of Mississippi, not wasting any time raising money.

NOVAK: He has put out a letter to his fellow lobbyists asking them if they would join him in raising money and he has set a meeting for this week. Guess where the meeting is going to be? In his lobbyist office in Washington, the Barbour, Rogers & Griffin offices.

Now, Haley is running for governor, but he is not resigning yet as a lobbyist. And I just love that, raising money for your governor's campaign in your own lobbyist office. He's running against an incumbent Democratic governor, Ronnie Musgrove. And it's going to be the premiere political race, I think, of the off-year elections.

WOODRUFF: Very quickly, a woman we had on the program Friday cooking Maryland crab cakes, Democratic Senator Barbara Mikulski of Maryland, may have some opposition?

NOVAK: She is supposed to be a cinch to be elected to a fourth term in '04. But there's a possibility that a man named Wayne Curry -- he was the Prince George's County Democratic chairman. He's an African-American. He may switch to the Republican Party. I shouldn't say Democratic chairman. He was the county executive. He's a Democrat.

He may switch to the Republican Party, very close to Governor Ehrlich. He would give her a tough struggle, be a very prime race, if he switches Republican. And that's the rumor.

WOODRUFF: Well, if there's anybody who knows what's going on, it's Bob Novak.

Thank you. And we'll see you very soon.

On this crucial day and crucial week for the Bush White House, up next, we will consider the political landscape in Januarys past, present and future.

(COMMERCIAL BREAK)

WOODRUFF: This day may be remembered as a turning point toward a second U.S. war against Iraq.

But January 27 already is historic in the annals of war and peace. On this day 30 years ago, the Vietnam peace accords were signed in Paris. And looking ahead to 2004, January 27 is expected to be a big political day. The New Hampshire primary is tentatively scheduled exactly one year from today. We can't wait.

That's it for INSIDE POLITICS. I'm Judy Woodruff. Thanks for joining us.

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of the Union Address Will Touch on War, Economy>