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Inside Politics

Nation Prepares for State of the Union Speech

Aired January 28, 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 VIDEOTAPE)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I will rally the American people to some great causes, and remind them that we'll accomplish those causes together.

ANNOUNCER: The set-up for the big speech. We'll have late breaking details on what the president will say tonight.

The state of the states: who would do more to improve their financial problems Republicans or Democrats?

From ground zero to Capitol Hill. We'll talk to a firefighter trying to send the president a message by attending his speech.

Like father like son? The prospect of another war with Iraq prompts comparisons and a confession.

GEORGE H. W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: I must confess that the voices of outrage that say this president wants war really get to me. No president wants war.

(END VIDEOTAPE)

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

JUDY WOODRUFF, HOST: Thank you for joining us.

I am on Capitol Hill where President Bush speaks to lawmakers an the nation five hours from now. In this "Newscycle," the usual anticipation and speculation about Mr. Bush's speech are heightened this year by the threat of war with Iraq and the sputtering economy. In a meeting with his cabinet, the president said he'd talk tonight about America's challenges and its deep desire for peace.

Our senior White House correspondent John King has more on the State of the Union Address an the politics behind it.

John, I was at the White House today and they seem to believe they have a pretty clear-cut case, a compelling case when it comes to both domestic and international issues, don't they?

JOHN KING, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, the president certainly is comfortable with the speech he'll deliver on Capitol Hill tonight. So comfortable, he's spending the afternoon not preparing, there was a run-through this morning, but spending some relaxation time with the first lady in the White House residence. The speech runs 42 minutes, that is without applause. You can look for the president to be speaking for about an hour tonight on Capitol Hill.

The first half of the speech is dedicated to the top domestic priorities. Chief among them, his prescription to give the economy a boost. The president will make the case that the economy is doing much better, but he also will say his ten-year, $670 billion tax cut is necessary to give it more of a boost.

Also emphasis on health care reform, specifically, Medicare. The president will try to reach across the aisle, urge Democrats to work with him on finally passing a prescription drug benefit for the elderly. Mr. Bush also will tell Congress it must reenact the 1996, reauthorize the 1996 welfare reforms, that in a portion of the speech dedicated to the compassionate agenda. Also in that part, we are told, new initiatives to help drug addicts and children.

Much more focus on the immediate priorities of building the case and support among the American people for the possibility of war with Iraq within weeks. In the speech tonight, Mr. Bush will tell the American people there is fresh evidence of Iraqi ties to al Qaeda. Also fresh evidence of Iraq working to conspire to hide things from the United Nations weapons inspectors. Mr. Bush will tell the American people in the words of his top adviser, Karen Hughes that if you think the inspections are working, you are wrong.

(BEGIN VIDEO CLIP)

KAREN HUGHES, SR. BUSH ADVISER: He'll talk about that, and talk about that in the aftermath of September 11. Given Saddam's history, given the type of dictator we know that he is, given his aggressions in the past, and given the fact he's got ongoing links with al Qaeda that the president does not feel it's in the security interest of the United States to allow Saddam to continue to defy the world and continue to have those dangerous weapons.

(END VIDEO CLIP)

KING: Mr. Bush's goal not declare war. Aides say but to certainly build support among the American people and prepare them for the possibility of war within several weeks from now.

At the same time, as the president addresses urgent overseas challenges, he has to remember, of course, his biggest domestic political challenge here at home. Aides frustrated with the focus in the media on Iraq, because they know when the president runs for reelection two years for now, he's much more likely to be judged by the voters on the performance of the economy -- Judy.

WOODRUFF: Well, John, they may be frustrated by the focus, but it's out there with every expectation of military action. The White House is saying this is not the war speech, but they know a lot of commentators and others are going to be listening tonight to hear what they say must be a strong case on Iraq. KING: Not the war speech in the sense of a declaration of war, but the president is well aware of the rising skepticism in the polls here in the United States. The skepticism that the American people are not certain about his war policy.

Karen Hughes told me earlier today it's been a long time since the president has laid out his rationale in detail to the American people. He'll do that tonight. It's the beginning of the process, look for over the next few weeks, the president will touch on what he says is the new evidence against Saddam Hussein. Tonight, more details of that evidence to be mate public in the days and weeks ahead. The target is the American people tonight. The president will be pressuring allies in the days ahead. All again to prepare people. He'll say no final decision on war yet, but he'll say the country needs to get ready.

WOODRUFF: All right, John King, thanks.

Well, in addition to the president's words tonight, the White House hopes to make a statement in another way. As in years past, a number of special guests will join the first lady in the audience. They range from an Air Force reservist, who served in Afghanistan, to people who would benefit from the president's tax cut plan. One seat will be left empty to symbolize Americans killed in the September 11 attacks. The White House still has not named the so-called mystery guest who will be seated next to Mrs. Bush.

If anyone understands what President Bush is going through as he prepares for his big speech and for a possible war with Iraq, it would be his father.

(BEGIN VIDEO CLIP)

G. H. W. BUSH: I must confess that the voices of outrage that say this president wants war really get to me. No president wants war. I can tell you this. That if Saddam Hussein leaves the president no choice but to decide for force, it will not be a decision that this president will make lightly.

(END VIDEO CLIP)

WOODRUFF: Former President Bush also defended his decision not to remove Saddam Hussein from power 12 years ago. He spoke in Connecticut last night, while accepting an award for his contributions to world affairs.

Our Candy Crowley has more on the father, the son, and the presidential parallels.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN CORRESPONDENT (voice-over): This is an important political speech. President Bush, in his first term, facing reelection in just 21 months. His poll numbers are strong, his chances look good. But twin dangers, career changing issues are playing out. Thousands of U.S. troops have been sent overseas to stare down or show down Saddam Hussein. And at home, unemployment is up and Americans are worried about the economy. It is 1991.

G. H. W. BUSH: We are resolute and resourceful. If we can selfishly confront the evil for the sake of good in a land so far away, then surely, we can make this land all that it should be.

CROWLEY: The echo across 12 years is clear. Two first-term presidents who share a name and a blood line. Both made popular by war. Undercut by the economy. Both facing reelection and the same Iraqi dictator. But these are two different men in a different time and place.

G. H. W. BUSH: The world has said this aggression would not stand, and it will not stand.

CROWLEY: Twelve years ago, Iraq had invaded Kuwait. The U.N. had passed multiple resolutions. The U.S. was leading a multinational force. Now, as Bush 43 prepares his State of the Union Address, a majority of Americans support war against Iraq, though opposition has grown in number and volume. Saddam Hussein has not crossed any borders, and the world is overwhelmingly skeptical of a war against him. Where the father could show up to take applause for the war, the son must show up and make his case.

G. W. BUSH: It's an important for the American citizens and the citizens around the world to understand that Saddam Hussein possesses some of the world's deadliest weapons. He poses a serious threat to America and our friends and allies.

CROWLEY: Both Bush's, in their parallel times, enjoy strong popularity ratings, the father for his mastery of the Gulf War, the son for his handling of 9/11. But in 1992, president George Bush lost his Gulf War glow, and the presidency to an Arkansas governor who tapped into the country's economic fears. The parallel lesson is this. A war, even when won, is not a ticket back to the Oval Office.

(END VIDEOTAPE)

CROWLEY: People who have worked for both presidents Bush say not only has the son Bush learned the lessons of his father, but there is another significant difference. Said one aide who had work for both of them, George Bush the son when it comes to politics, can push back a lot harder -- Judy.

WOODRUFF: And we are learning that. Candy, thanks very much.

WOODRUFF: "On the Record" now, House Speaker Dennis Hastert. I interviewed him at one of his offices here on Capitol Hill, and first I asked him what he believes the president needs to accomplish tonight, given growing public concern about the war and the economy.

(BEGIN VIDEOTAPE)

REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: First of all, I think he needs to make a strong statement and case on Iraq. And we know that Saddam Hussein's been a bad actor. We have evidence, even as late as yesterday, that they're not coming forward with their weapons of mass destruction.

And, in my view -- I've been to the World Trade towers after it happened. I've been to the Pentagon the day after it happened. I talked to the families of the United flight that went down in Pennsylvania, and we can't let that happen in this country again. And as we speak, we know that there is al Qaeda, it's been reported in the press, in Iraq. They're taking instruction on weapons, chemical weapons and biological weapons.

Where do people think they're going to use them? They're not going to use them in Yemen, or they are going to use them in Afghanistan. They'll probably use them here, and I think the next attack, if it ever happens in this country, isn't going to be a plane full of people. It's not going to be a rocket coming across the ocean. It's going to be, figuratively speaking, a little house on the outside of Lincoln, Nebraska, where there's a cell of people with weapons of mass destruction, and -- simple as an aerosol can and a model airplane, you can cause a lot of destruction.

WOODRUFF: Well, the president has already made one speech on the economy, and now you have not just Democrats, but Republicans, members of your own party, saying they're concerned that the president's tax cut plan may not be the right formula. You've got the chairman of the House Ways and Means Committee raising questions about the tax cut.

HASTERT: There's a lot of economists. We have got 435 economists. I taught high school economics for 16 years, so I kind of stay on the sophomore level. But, you know, there's a lot of ways to get things done. What we want is to get the economy going. I've talked to the president's economists before he put this plan forward, and I said, Whatever you do, whatever this action is, let's make sure that the reaction does what we want it to do, and that's to grow the economy and get the markets going again and create jobs.

WOODRUFF: And are you convinced that this plan will do that as is, right now?

HASTERT: I think that job -- I think that plan can do that. I think there might be half a dozen other things that may be able to do that. And what we need to find is what we can pass, what we can get through the Senate, and what the president can sign that will get this economy going again. And I think the president has laid out a good plan. But is it exclusive that we absolutely have to do that? We may change it some.

WOODRUFF: How worried are you about the deficit? We are now -- CBO is going to say -- Congressional Budget Office -- it's between $165, $175 billion.

HASTERT: As I said, I taught economics for a long time, and talked about guns and butter. And in a time of our national security interests, and especially since 9/11, and doing the homeland security and spending well -- almost $100 billion in that issue, and a natural cyclical downturn of the economy, when we have lost almost $250 billion in capital gains revenues, there's a downturn. And what we have to do is not worry and cry and scream about the deficit. If we get the economy going again, the deficit will take care of itself.

WOODRUFF: Finally, the Democrats are saying that the Congress and the president need to give the money that is due the first responders, the firefighters, and others around the country who are going to be called on and who have been called on when there could be a terrorist incident.

HASTERT: Well, when we get...

WOODRUFF: And they tried today to get the funding for that. You and others supported putting that off for now. How do you explain that?

HASTERT: Well, here is what -- we have to get the budget. We never got a budget out of the Senate under Democrat control. We're still waiting for that appropriation bill to get done in the Senate. And when it does, that money will flow. But let's get the work done out of the Senate, and we'll finish it in the House, and we will get it to the people that need it, not just piecemeal. Let's get it in a total way.

(END VIDEOTAPE)

WOODRUFF: We'll talk to one of those first responders a little later.

Stay with CNN tonight for complete coverage of the president's State of the Union Address. Beginning at "CROSSFIRE," 7:00 P.M. Eastern. Then at 8, a special edition of "CONNIE CHUNG TONIGHT," live right here in Washington. And I'll be back at 8:45, along with the rest of the CNN team for our live coverage of the president's speech.

Still ahead, we'll get a Democratic take on the State of the Union from House Minority Whip Steny Hoyer.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: I'm Jonathan Karl on Capitol Hill. Facing a sea of red ink, state officials are asking the president for something he doesn't want to give them a federal bail-out.

WOODRUFF: Also ahead, one good turn deserves another. Find out which politician will have a featured role in the next Ground Hog Day.

(COMMERCIAL BREAK)

WOODRUFF: It's time to check your "I.P. I.Q." President Harry Truman gave the longest State of the Union Address in history on January 22 1946. It was more than 25,000 words.

Who gave the shortest address? Was it a, George Washington, b, Abraham Lincoln or c, George W. Bush?

We'll tell you the answer later on INSIDE POLITICS.

(COMMERCIAL BREAK) WOODRUFF: After the president finishes his address tonight, Gary Locke will give the Democratic response. Well, if you're not from the Northwest, you may ask who is Gary Locke. He's the first Chinese- American governor ever in the United States. Locke was elected Washington state's governor in 1996, and he was reelected by a wide margin in 2000. But his state, like many across the country, has hit some hard times. It faces a $2.4 billion budget deficit.

Locke has pledged not to raise taxes and has proposed controversial budget cuts instead. And the governor has seen his approval rating slip to 30 percent. Locke was on Capitol Hill earlier today going over his speech with Tom Daschle and Nancy Pelosi. Congressional leaders usually give the opposition response, but Democrats picked up three governorships last November. One of their few bright spots in the election. And Locke, now chairman of the Democratic Governor's Association, got the nod. He's expecting to stress that the Bush economic plan has failed, and that the president's tax cuts have put most states in a bind.

For more on the economic pressures facing the states and how leaders here in Washington are responding, let's turn to our Congressional correspondent, Jonathan Karl on the other side of Capitol Hill.

Hi, John.

KARL: Hey, Judy.

Well, states are facing the fiscal perfect storm here. They have declining tax revenues escalating costs, especially in the area of health care, and, of course, they want money from Washington. They want a federal handout. In the meantime, what they're doing is resorting to interesting budget gimmicks or methods to get by budget problems. In California, the agency that runs the Golden Gate bridge has actually considered asking pedestrians that cross the bridge to give a voluntary fee, a voluntary donation to the agency as a way of crossing the bridge. This is kind of holding out a tin cup for the state to get by.

In other states see gambling as the answer, getting into the booking business.

Maryland is one of several states that is considering adding state-run slot machines as a way to get an infusion of supposedly easy money.

And in Oklahoma, a much different approach. Oklahoma is one of five states recently to consider getting -- letting prisoners out of jail early as a way to cut down on the cost of running their prison system.

Now, many governors, including many Republicans, Judy, say the president's stimulus plan or any stimulus plan to pass the Congress must include direct aid to the states to deal with these budget problems. And on this question, there is a vast difference between the various plans proposed up here on Capitol Hill. First, the president's plan actually includes absolutely no direct money to the states. Representative Pelosi has a plan for the House Democrats. She includes $31 billion in direct aid. Senator Daschle, a little bit more, $40 billion in direct aid.

But Republicans up here on the hill, by and large, are saying that they do not believe it's up to the federal government to bail out the states. As a matter of fact, just a little while ago, Rick Santorum, Republican of Pennsylvania, said regarding this whole question -- quote -- "So the first time they run to us for help. Nope. Nobody's home." Nobody's home when the states come running to the Republicans here in the Senate Republican leadership when it comes to this question of a bailout, Judy.

WOODRUFF: Yes, I know some of the governors feel that way.

Jon, separately, I gather you ran into the sergeant-at-arms for the House of Representatives today. What were you talking to him about?

KARL: Well, he's the guy, Bill Livingood, he's the guy that every body -- the whole world will see today, tonight when the president comes out. He announces the president's presence on the floor of the House of Representatives.

And he is an incredibly press shy guy. Although he is -- right there you see him in front of the world, making that very famous eight-word announcement. He's never done a television interview until today. We talked to him about that moment and what it's like a little while ago.

(BEGIN VIDEO CLIP)

BILL LIVINGOOD, HOUSE SERGEANT AT ARMS: I come from the U.S. Secret Service, where you're always behind the scenes, never out in front of everybody. So you're used to being behind and away from everything and this is the antithesis because here standing in front of X number of million people making the announcement. And I'm always worried, Am I going to make a mistake or say the wrong thing?

I remember the first time I went in there, one of my coworkers is standing at the door, and he said to me, and it's the words, Mr. Speaker, the president of the United States. As I walk in, he said, Bill, remember, it's Mr. President, the Speaker of the United States. And I went Oh, my God and I said Oh, no.

(END VIDEO CLIP)

KARL: Well Judy, he's never messed those eight words up before and we don't expect him to mess them up tonight. Back to you.

WOODRUFF: He doesn't look so shy.

All right. Jon, we're glad you caught up with Bill Livingood and we will see him tonight. Thanks.

KARL: All right.

WOODRUFF: Well what is the State of the Union? We heard from the House speaker a few minutes ago. Next, I'll talk live with a top Democrat in Congress.

And later, her sister was killed in the so-called crime of the century. Now, nearly a decade later, will Denise Brown toss her hat in the political ring?

(MARKET UPDATE)

(COMMERCIAL BREAK)

WOODRUFF: With me now is Steny Hoyer, Congressman from Maryland, the second-ranking Democrat in the House of Representatives.

What is the State of the Union?

REP. STENY HOYER (D), MARYLAND: Well, the State of the Union, of course, is the leader of the free world, the leader of our nation coming before us and telling us what he thinks, maybe in the future what she thinks, is the State of the Union, the shape our country is in.

Clearly, every president tries to put the best spin on it possible. This president, I think, is going to be no different. He's going to try to put the best spin on a situation that is not so great.

WOODRUFF: The White House is saying this is not the war speech, that they don't feel that this is the time or the need right now to make the case to go to war. Obviously, the president's going to discuss Iraq.

Is that a mistake?

HOYER: Well, I don't think it's a mistake, depending upon what they're going to do. I think clearly what they know is that Americans are very, very anxious about the state of the economy. They're very anxious about this president's economic program, which he said a year ago was going to lead to lowering deficits, increasing jobs and growing the economy.

In fact, the economy has gone exactly the other way. Deficits have exploded. We had more unemployed in two years than any president in recent history. And Americans are very anxious.

I think he doesn't want to repeat the problems that his father had in ignoring a situation that is of great concern to the American public.

WOODRUFF: Well, the White House is saying, the president himself is saying, if there are problems with the economy, they're because of the recession that he inherited. They're because of the war on terror. And besides, he has a tax cut plan that's going to help people at all income levels. And he's got -- and he's got a compassionate conservative agenda for America. HOYER: Well, it's compassionate rhetorically. It is not necessarily compassionate in terms of the investments he's making, for instance in leave nor child behind, he rhetorically said we're leave no child behind. His education budget last year cut education on a net basis and he hasn't done much this coming year. He's done something in Title 1, but not with respect to all children, leaving them behind in many instances.

I think the fact is that he's coming and saying we need more tax cuts, but last year, in 2001, he told us if we cut taxes, this is going to spur the economy; this is going to do the job and it's going to bring down deficits and we're going to have balanced budgets and surpluses.

As a matter of fact, he said we're going to have $5.6 trillion in surpluses. They have totally disappeared under his economic program.

WOODRUFF: No matter what you and other Democrats say, though, aren't you at an enormous disadvantage, because the Republicans have the White House, the Senate, and the House, majorities in all places? They have the ability to set the agenda.

HOYER: Absolutely.

Don't we wish we had that? And they have the presidency. And the presidency, of course, is the bully pulpit. It is where you get to address the American public every day, every hour that you choose. But the facts are, I think, pretty clearly on the side of those of us who have criticized this president's policies, whether domestically or internationally.

And I think those facts are going -- we're going to repeat them. And the president's going to have great trouble tonight or on other nights ignoring those facts or denying those facts. The economy is in bad shape. The economy's in bad shape after a program that he proposed that was passed, signed by the president, which has not done anything to help the economy.

WOODRUFF: Representative Steny Hoyer, who is the minority whip in the House of Representatives, thanks very much.

HOYER: Thank you, Judy.

WOODRUFF: We'll be looking for you in that crowd tonight.

HOYER: Judy, before I end, I had a great comment that one of my staff made about the president's economic policy, in referring to George Bush the 1st. He said, this is deja voodoo economics all over again. I think the president is going to speak about that tonight.

WOODRUFF: He may not use those terms.

HOYER: Probably not.

(LAUGHTER)

WOODRUFF: All right, thank you very much, Representative Hoyer.

HOYER: Thanks.

WOODRUFF: It's good to see you. We appreciate it.

And now checking the headlines in our "Campaign News Daily": South Carolina Governor Mark Sanford says that he may drop out of the Air Force Reserve just a year after he joined. Sanford says he cannot deploy if his squadron is called to active duty because of his responsibilities as governor. Critics accuse Sanford of becoming a reservist for political reasons. He says he had no plans to run for office when he decided to join the reserves.

A sister of the late Nicole Brown Simpson says that she may run for the U.S. Senate the next time a seat opens in California. Denise Brown has never held public office, but she says she has developed an interest in politics from her work in Washington as a lobbyist for victim rights.

In Pennsylvania, Phil came to visit Ed. Now Ed plans to visit Phil. World famous groundhog Punxsutawney Phil joined the inaugural parade for new Governor Ed Rendell last week. Now the governor plans to return the favor by attending the Groundhog Day festivities this weekend to learn firsthand if Phil sees his shadow and if spring will come early. And you can bet we'll report on it Monday.

A check of the CNN "News Alert," plus an update on the Israeli elections straight ahead. Prime Minister Sharon was the heavy favorite. Our Bill Schneider joins me from Tel Aviv with a live update on the early returns.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): It's time again to check your "I.P. I.Q."

President Harry Truman gave the longest State of the Union address in history on January 22, 1946. It was more than 25,000 words. Earlier, we asked: Who gave the shortest address? Was it, A, George Washington, B, Abraham Lincoln, or, C, George W. Bush? The correct answer is A. President George Washington's address in 1790 was only 833 words and is believed to have lasted less than 10 minutes.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WOODRUFF: A victory at the polls, but will Ariel Sharon be able to put together a coalition to govern Israel? We'll go live to Tel Aviv in a moment.

(NEWS BREAK)

WOODRUFF: The polls closed in Israel just about 90 minutes ago, where voters were expecting to hand a big victory to the Likud Party of Prime Minister Ariel Sharon. But exit polls broadcast by Israeli television Channel One project that Likud will pick up just 36 seats in the 120-member Knesset. Israel's Channel 2 projects a 32-seat Likud victory in parliament.

Our Bill Schneider is following the Israeli elections. He joins me now from Tel Aviv.

Bill, what does it mean? If Likud has only a fourth of the seats in the Knesset, can Ariel Sharon govern?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: He's going to have a too build a coalition. And to build a coalition, he can go in two directions.

He can build a coalition based on right-wing parties, which is going to make it very difficult for him to negotiate any kind of peace deal, such as the deal that President Bush supports. Or he can do what he said he wants to do, build a government of national unity. The problem is finding a partner. The Labor Party has suffered a historic defeat and they've resisted going into any new government of national unity.

He's going to have to use a lot of political skill to bring Labor into his government. But, clearly, that's what the public wants. They want a new government. In a time of national threat with an impending war, they want a government of national unity.

WOODRUFF: All right, Bill Schneider, thanks very much. And I know we'll be continuing to get reports from you through the night. We'll see you at the State of the Union.

And we'll get back to our countdown to the State of the Union address when we return. Mr. Bush plans to talk dollars and cents, but how much of his economic stimulus plan will Congress buy? We'll hear from the president's former point man on Capitol Hill.

(COMMERCIAL BREAK)

WOODRUFF: When I was at the White House earlier today, I learned that the president's State of the Union address was finished, buttoned up, edited, no more changes. Well, now, just a little more than four hours before the president's speech, the White House has decided to issue, make public some excerpts of what the president will have to say.

For more on that, let's go to our senior White House correspondent, John King, again -- hi, John.

KING: Hello to you, Judy.

A few highlights from the speech tonight: first, an excerpt released by the White House in which the president broadly discusses his goals in his speech tonight. The president will say in that speech -- quote -- "This country has many challenges. We will not deny, we will not ignore, we will not pass along our problems to other congresses, other presidents in other generations. We'll confront them with focus and clarity and courage."

On the domestic issues, Mr. Bush talks about health care and the economy in these excerpts released. Let me touch on one on the economy in which the president promotes his tax cut plan. The president will say -- quote -- "Jobs are created when the economy grows. The economy grows when Americans have more money to spend and invest. And the best, fairest way to make sure Americans have the money is to not tax it away in the first place."

Many are looking, of course, for what the president will say about Iraq tonight in his speech. According to these excerpts, the president, among other things, will say this: "Almost three months ago, the United Nations Security Council gave Saddam Hussein his final chance to disarm. He has shown instead his utter contempt for the United Nations and for the opinion of the world. The dictator of Iraq is not disarming. To the contrary, he is deceiving."

I want to spring into the discussion now Nick Calio, who, until just two weeks ago, was the president's top liaison on Capitol Hill, left recently for the private sector, but still in close touch with the White House.

Let's start on Iraq. The president has quite a challenge tonight, convincing the American people that he's right and that perhaps this country will be at war in a matter of weeks. What is your sense, from talking to your former colleagues, about how specific the president will be in talking about what we're told is new intelligence showing links to al Qaeda and efforts, active efforts, right now to conspire to block the U.N. weapons inspectors?

NICK CALIO, FORMER WHITE HOUSE CONGRESSIONAL LIAISON: Well, John, I think, quite clearly, the president will not declare war on Iraq tonight.

I think he will try to remake the case to the American people. I would make the case that the president has already made that case once. He made it at the United Nations. He made it in the U.S. Congress. Congress last fall authorized the use of force. As you'll recall, the White House undertook, the administration undertook a massive set of classified briefings for members of Congress, after which they voted overwhelmingly, on a bipartisan basis, to authorize the use of force.

I think that most of the American people would hope that the United States Congress is not going to start acting like the United Nations General Assembly has for the last 12 years, where they say, yes, we're going to use force. They authorize it and then they back off.

So, it's a matter of remaking the case. I guess people have short memories. I think the evidence is there. I think, basically, if you look at it, just on what we know was there when we left in 1991 and what's not accounted for now, as the president of the United States, he's got to make the case about why we need to go in.

KING: Help me understand. We're now told that they will declassify some of this intelligence.

Back when you got the resolution through the Congress, you debated this internally and decided not to release it. There were too many concerns that it would compromise intelligence gathering. Why has the administration then decided now it has to put some of this public? Is it a sign that you're losing the argument?

CALIO: Well, first of all, I haven't been part of these internal discussions, so I can't say. I can't speak for my former colleagues.

I would say this, though. There's always a constant debate between the intelligence community and others inside an administration about what you declassify and what you do not. It was an ongoing debate. I assume the debate has progressed. Back in the fall, we did declassify some materials. Others were just presented to members of Congress in those classified briefings.

And the president -- what we made the case last fall to members of Congress was, based on what you know from these classified briefings, if the president sat on his hands and did nothing, would you accuse him of failing to connect the dots if something happened?

KING: I want to quickly bring you back to domestic issues. The Democrats yesterday accusing this president of a -- quote -- "credibility gap," saying he deliberately says one thing and then does another. Is this the most openly partisan moment of the Bush presidency as he prepares to give this speech tonight?

CALIO: I don't know if it's the most openly partisan moment we've had.

Clearly, the Democrats have taken off. And I think they have made a number of personal attacks. They're back to resorting to class warfare and the personal attacks. The American voters have never bought that. I think what the American voters and the American public have shown repeatedly is, they don't buy those arguments. The credibility gap that's claimed gets reversed and put on the person saying that the president has a credibility gap.

And I think what they're looking for is resolve, a willingness to take on big issues. And I think the American public will see that from this president once again. He often says, in discussions with staff: Look, we're only here for a short time. And if doing right means we're here for a shorter time, so be it.

I think you're going to find the president willing to take on modernizing Medicare, making good on the promise to provide prescription drugs to seniors, rather than just debating it ad nauseam in the Congress, reducing. I think you'll see him continue to push for economic growth. I think you'll see him try to limit the insanity of the assembly-line lawsuits that are killing the medical profession, so that people can't get medical care.

And I think you'll once again see him ask the American people to reach out to each other. He thinks that the greatest resource that we have is the American people, with their resolve, in trying to get things done. And I think they will see it in him. It's reflected in them. And we'll move forward from here.

KING: All right, we need to stop there, due to time constraints. Nick Calio, thanks for joining us -- and back now to Judy on the Hill.

WOODRUFF: Thanks, John, and Nick Calio, still very plugged in.

Coming up: the lingering health problems for rescue workers at ground zero. I'll talk with one of the firefighters who was there and who will be there tonight for the State of the Union speech.

(COMMERCIAL BREAK)

WOODRUFF: At least eight New York City rescue workers will be in the gallery for tonight's State of the Union speech. They are here because Congress and the president have failed to reach an agreement to fully fund a health care study for workers at ground zero.

One firefighter who will not be here is Bob Beckwith, who stood at President Bush's side just days after the September 11 attacks. Beckwith said he changed his mind because he's a Republican and he said he does not want to embarrass President Bush.

New York firefighter Phil McArdle will be in the gallery. He's the health and safety officer for the Uniformed Firefighters Association.

Mr. McArdle, you're not worrying about embarrassing the president?

PHIL MCARDLE, UNIFORMED FIREFIGHTERS ASSOCIATION: No, absolutely not.

As a matter of fact, we had a meeting at the White House today and we spoke to the White House staff. And they were absolutely pleased that we were going to the State of the Union and they were pleased that we were wearing our uniform.

WOODRUFF: What do you want to accomplish by being there tonight in the gallery?

MCARDLE: Tonight, being in the gallery for us, it's just -- it's like being at the Super Bowl. It's our opportunity to sit there and basically listen to the president and support the president. It's an opportunity for us to actually see it firsthand, how it happens.

WOODRUFF: And how important is this health study that you want funded that has not been funded yet?

MCARDLE: It's incredibly important.

And the reason that we have to do this is, we have to look at this not as a New York problem, not as a Democratic problem or a Republican problem. This is an American problem. And when I say it's an American problem is, if this were to occur in any other city in the United States, we would still have to take care of health care workers. It's not about firefighters. It's about all emergency response workers who are going to respond to these types of events.

WOODRUFF: And, just quickly, when the president and Republicans argue that the money -- that there wasn't the money to take care of it this year, you're going to have to wait until next year, what's your response?

MCARDLE: I think that we have to put partisanship aside. And I think that we can't work as Democrats or Republicans here. We have to work as Americans and we have to take care of Americans. And that's the message that we're trying to send.

WOODRUFF: Phil McArdle, with the Uniformed Firefighters Association, who will be in the gallery tonight for the State of the Union, thanks very much for talking with us.

MCARDLE: Thank you for asking us here.

WOODRUFF: INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: The State of the Union may not rank up there with the Super Bowl in the ratings, but it has become something of a television event, with coverage on numerous networks and the flood of punditry before and after. It was different once upon a time.

Here's our national correspondent Bruce Morton.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: My lord and members of the House of Commons.

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): It comes from the speech of the British monarch makes to parliament every year, though today's constitutional queen just reads what the prime minister's party has written for her.

Presidents say what they want to say. George Washington delivered the first one in New York, then the Capitol, in 1790. Thomas Jefferson stopped delivering them in person, too royal, he thought, and sent a written message to Congress. Presidents followed that precedent for more than a century. James Monroe, in a message, laid out the Monroe Doctrine: Europe, stay out of this hemisphere. Lincoln, in a message, freed the slaves: "In giving freedom to the slaves, we assure freedom to the free."

Nobody delivered a speech in person again until Woodrow Wilson in 1913. Calvin Coolidge delivered the first one on radio in 1923; Harry Truman the first televised one in 1947.

(BEGIN VIDEO CLIP, 1943)

HARRY TRUMAN, PRESIDENT OF THE UNITED STATES: Most of the countries of the world have joined together in the United Nations in an attempt to build world order based on law and not on force. (END VIDEO CLIP)

MORTON: Inaugural addresses have produced more famous phrases: Franklin's Roosevelt's "The only thing we have to fear is fear itself," though he did set forth his four freedoms, of speech, of worship, from want, from fear, in a World War II State of the Union. John Kennedy's "Ask not what your country can do for you" was in his inaugural.

State of the Union speeches are often about legislation the president want: Lyndon Johnson and the Voting Rights Act in 1965.

(BEGIN VIDEO CLIP, 1965)

LYNDON JOHNSON, PRESIDENT OF THE UNITED STATES: I propose that we eliminate every remaining obstacle to the right and the opportunity to vote.

(APPLAUSE)

(END VIDEO CLIP)

MORTON: And this president had a memorable phrase in last year's speech.

G.W. BUSH: States like these and their terrorist allies constitute an axis of evil, arming to threaten the peace of the world.

MORTON: Bill Clinton probably had the oddest one. In 1997, the verdict in O.J. Simpson's civil trial came the night of the speech. Most networks stayed with the speech. Some split their screens. In 1998, Clinton's speech came just after we all learned who Monica Lewinsky was. And, in 1999, oddest of the all, spoke to a House which had impeached him and a Senate which had just begun his trial.

Mr. Bush won't have to cope with anything that odd. But with a looming war, a soggy economy, and a controversial tax proposal, he'll have lots to talk about.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: And a good source tells us the president won't use the term axis of evil again this year.

That's it for INSIDE POLITICS. I'm Judy Woodruff. Thanks for joining us. We'll see you later.

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







Aired January 28, 2003 - 16:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I will rally the American people to some great causes, and remind them that we'll accomplish those causes together.

ANNOUNCER: The set-up for the big speech. We'll have late breaking details on what the president will say tonight.

The state of the states: who would do more to improve their financial problems Republicans or Democrats?

From ground zero to Capitol Hill. We'll talk to a firefighter trying to send the president a message by attending his speech.

Like father like son? The prospect of another war with Iraq prompts comparisons and a confession.

GEORGE H. W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: I must confess that the voices of outrage that say this president wants war really get to me. No president wants war.

(END VIDEOTAPE)

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

JUDY WOODRUFF, HOST: Thank you for joining us.

I am on Capitol Hill where President Bush speaks to lawmakers an the nation five hours from now. In this "Newscycle," the usual anticipation and speculation about Mr. Bush's speech are heightened this year by the threat of war with Iraq and the sputtering economy. In a meeting with his cabinet, the president said he'd talk tonight about America's challenges and its deep desire for peace.

Our senior White House correspondent John King has more on the State of the Union Address an the politics behind it.

John, I was at the White House today and they seem to believe they have a pretty clear-cut case, a compelling case when it comes to both domestic and international issues, don't they?

JOHN KING, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, the president certainly is comfortable with the speech he'll deliver on Capitol Hill tonight. So comfortable, he's spending the afternoon not preparing, there was a run-through this morning, but spending some relaxation time with the first lady in the White House residence. The speech runs 42 minutes, that is without applause. You can look for the president to be speaking for about an hour tonight on Capitol Hill.

The first half of the speech is dedicated to the top domestic priorities. Chief among them, his prescription to give the economy a boost. The president will make the case that the economy is doing much better, but he also will say his ten-year, $670 billion tax cut is necessary to give it more of a boost.

Also emphasis on health care reform, specifically, Medicare. The president will try to reach across the aisle, urge Democrats to work with him on finally passing a prescription drug benefit for the elderly. Mr. Bush also will tell Congress it must reenact the 1996, reauthorize the 1996 welfare reforms, that in a portion of the speech dedicated to the compassionate agenda. Also in that part, we are told, new initiatives to help drug addicts and children.

Much more focus on the immediate priorities of building the case and support among the American people for the possibility of war with Iraq within weeks. In the speech tonight, Mr. Bush will tell the American people there is fresh evidence of Iraqi ties to al Qaeda. Also fresh evidence of Iraq working to conspire to hide things from the United Nations weapons inspectors. Mr. Bush will tell the American people in the words of his top adviser, Karen Hughes that if you think the inspections are working, you are wrong.

(BEGIN VIDEO CLIP)

KAREN HUGHES, SR. BUSH ADVISER: He'll talk about that, and talk about that in the aftermath of September 11. Given Saddam's history, given the type of dictator we know that he is, given his aggressions in the past, and given the fact he's got ongoing links with al Qaeda that the president does not feel it's in the security interest of the United States to allow Saddam to continue to defy the world and continue to have those dangerous weapons.

(END VIDEO CLIP)

KING: Mr. Bush's goal not declare war. Aides say but to certainly build support among the American people and prepare them for the possibility of war within several weeks from now.

At the same time, as the president addresses urgent overseas challenges, he has to remember, of course, his biggest domestic political challenge here at home. Aides frustrated with the focus in the media on Iraq, because they know when the president runs for reelection two years for now, he's much more likely to be judged by the voters on the performance of the economy -- Judy.

WOODRUFF: Well, John, they may be frustrated by the focus, but it's out there with every expectation of military action. The White House is saying this is not the war speech, but they know a lot of commentators and others are going to be listening tonight to hear what they say must be a strong case on Iraq. KING: Not the war speech in the sense of a declaration of war, but the president is well aware of the rising skepticism in the polls here in the United States. The skepticism that the American people are not certain about his war policy.

Karen Hughes told me earlier today it's been a long time since the president has laid out his rationale in detail to the American people. He'll do that tonight. It's the beginning of the process, look for over the next few weeks, the president will touch on what he says is the new evidence against Saddam Hussein. Tonight, more details of that evidence to be mate public in the days and weeks ahead. The target is the American people tonight. The president will be pressuring allies in the days ahead. All again to prepare people. He'll say no final decision on war yet, but he'll say the country needs to get ready.

WOODRUFF: All right, John King, thanks.

Well, in addition to the president's words tonight, the White House hopes to make a statement in another way. As in years past, a number of special guests will join the first lady in the audience. They range from an Air Force reservist, who served in Afghanistan, to people who would benefit from the president's tax cut plan. One seat will be left empty to symbolize Americans killed in the September 11 attacks. The White House still has not named the so-called mystery guest who will be seated next to Mrs. Bush.

If anyone understands what President Bush is going through as he prepares for his big speech and for a possible war with Iraq, it would be his father.

(BEGIN VIDEO CLIP)

G. H. W. BUSH: I must confess that the voices of outrage that say this president wants war really get to me. No president wants war. I can tell you this. That if Saddam Hussein leaves the president no choice but to decide for force, it will not be a decision that this president will make lightly.

(END VIDEO CLIP)

WOODRUFF: Former President Bush also defended his decision not to remove Saddam Hussein from power 12 years ago. He spoke in Connecticut last night, while accepting an award for his contributions to world affairs.

Our Candy Crowley has more on the father, the son, and the presidential parallels.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN CORRESPONDENT (voice-over): This is an important political speech. President Bush, in his first term, facing reelection in just 21 months. His poll numbers are strong, his chances look good. But twin dangers, career changing issues are playing out. Thousands of U.S. troops have been sent overseas to stare down or show down Saddam Hussein. And at home, unemployment is up and Americans are worried about the economy. It is 1991.

G. H. W. BUSH: We are resolute and resourceful. If we can selfishly confront the evil for the sake of good in a land so far away, then surely, we can make this land all that it should be.

CROWLEY: The echo across 12 years is clear. Two first-term presidents who share a name and a blood line. Both made popular by war. Undercut by the economy. Both facing reelection and the same Iraqi dictator. But these are two different men in a different time and place.

G. H. W. BUSH: The world has said this aggression would not stand, and it will not stand.

CROWLEY: Twelve years ago, Iraq had invaded Kuwait. The U.N. had passed multiple resolutions. The U.S. was leading a multinational force. Now, as Bush 43 prepares his State of the Union Address, a majority of Americans support war against Iraq, though opposition has grown in number and volume. Saddam Hussein has not crossed any borders, and the world is overwhelmingly skeptical of a war against him. Where the father could show up to take applause for the war, the son must show up and make his case.

G. W. BUSH: It's an important for the American citizens and the citizens around the world to understand that Saddam Hussein possesses some of the world's deadliest weapons. He poses a serious threat to America and our friends and allies.

CROWLEY: Both Bush's, in their parallel times, enjoy strong popularity ratings, the father for his mastery of the Gulf War, the son for his handling of 9/11. But in 1992, president George Bush lost his Gulf War glow, and the presidency to an Arkansas governor who tapped into the country's economic fears. The parallel lesson is this. A war, even when won, is not a ticket back to the Oval Office.

(END VIDEOTAPE)

CROWLEY: People who have worked for both presidents Bush say not only has the son Bush learned the lessons of his father, but there is another significant difference. Said one aide who had work for both of them, George Bush the son when it comes to politics, can push back a lot harder -- Judy.

WOODRUFF: And we are learning that. Candy, thanks very much.

WOODRUFF: "On the Record" now, House Speaker Dennis Hastert. I interviewed him at one of his offices here on Capitol Hill, and first I asked him what he believes the president needs to accomplish tonight, given growing public concern about the war and the economy.

(BEGIN VIDEOTAPE)

REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: First of all, I think he needs to make a strong statement and case on Iraq. And we know that Saddam Hussein's been a bad actor. We have evidence, even as late as yesterday, that they're not coming forward with their weapons of mass destruction.

And, in my view -- I've been to the World Trade towers after it happened. I've been to the Pentagon the day after it happened. I talked to the families of the United flight that went down in Pennsylvania, and we can't let that happen in this country again. And as we speak, we know that there is al Qaeda, it's been reported in the press, in Iraq. They're taking instruction on weapons, chemical weapons and biological weapons.

Where do people think they're going to use them? They're not going to use them in Yemen, or they are going to use them in Afghanistan. They'll probably use them here, and I think the next attack, if it ever happens in this country, isn't going to be a plane full of people. It's not going to be a rocket coming across the ocean. It's going to be, figuratively speaking, a little house on the outside of Lincoln, Nebraska, where there's a cell of people with weapons of mass destruction, and -- simple as an aerosol can and a model airplane, you can cause a lot of destruction.

WOODRUFF: Well, the president has already made one speech on the economy, and now you have not just Democrats, but Republicans, members of your own party, saying they're concerned that the president's tax cut plan may not be the right formula. You've got the chairman of the House Ways and Means Committee raising questions about the tax cut.

HASTERT: There's a lot of economists. We have got 435 economists. I taught high school economics for 16 years, so I kind of stay on the sophomore level. But, you know, there's a lot of ways to get things done. What we want is to get the economy going. I've talked to the president's economists before he put this plan forward, and I said, Whatever you do, whatever this action is, let's make sure that the reaction does what we want it to do, and that's to grow the economy and get the markets going again and create jobs.

WOODRUFF: And are you convinced that this plan will do that as is, right now?

HASTERT: I think that job -- I think that plan can do that. I think there might be half a dozen other things that may be able to do that. And what we need to find is what we can pass, what we can get through the Senate, and what the president can sign that will get this economy going again. And I think the president has laid out a good plan. But is it exclusive that we absolutely have to do that? We may change it some.

WOODRUFF: How worried are you about the deficit? We are now -- CBO is going to say -- Congressional Budget Office -- it's between $165, $175 billion.

HASTERT: As I said, I taught economics for a long time, and talked about guns and butter. And in a time of our national security interests, and especially since 9/11, and doing the homeland security and spending well -- almost $100 billion in that issue, and a natural cyclical downturn of the economy, when we have lost almost $250 billion in capital gains revenues, there's a downturn. And what we have to do is not worry and cry and scream about the deficit. If we get the economy going again, the deficit will take care of itself.

WOODRUFF: Finally, the Democrats are saying that the Congress and the president need to give the money that is due the first responders, the firefighters, and others around the country who are going to be called on and who have been called on when there could be a terrorist incident.

HASTERT: Well, when we get...

WOODRUFF: And they tried today to get the funding for that. You and others supported putting that off for now. How do you explain that?

HASTERT: Well, here is what -- we have to get the budget. We never got a budget out of the Senate under Democrat control. We're still waiting for that appropriation bill to get done in the Senate. And when it does, that money will flow. But let's get the work done out of the Senate, and we'll finish it in the House, and we will get it to the people that need it, not just piecemeal. Let's get it in a total way.

(END VIDEOTAPE)

WOODRUFF: We'll talk to one of those first responders a little later.

Stay with CNN tonight for complete coverage of the president's State of the Union Address. Beginning at "CROSSFIRE," 7:00 P.M. Eastern. Then at 8, a special edition of "CONNIE CHUNG TONIGHT," live right here in Washington. And I'll be back at 8:45, along with the rest of the CNN team for our live coverage of the president's speech.

Still ahead, we'll get a Democratic take on the State of the Union from House Minority Whip Steny Hoyer.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: I'm Jonathan Karl on Capitol Hill. Facing a sea of red ink, state officials are asking the president for something he doesn't want to give them a federal bail-out.

WOODRUFF: Also ahead, one good turn deserves another. Find out which politician will have a featured role in the next Ground Hog Day.

(COMMERCIAL BREAK)

WOODRUFF: It's time to check your "I.P. I.Q." President Harry Truman gave the longest State of the Union Address in history on January 22 1946. It was more than 25,000 words.

Who gave the shortest address? Was it a, George Washington, b, Abraham Lincoln or c, George W. Bush?

We'll tell you the answer later on INSIDE POLITICS.

(COMMERCIAL BREAK) WOODRUFF: After the president finishes his address tonight, Gary Locke will give the Democratic response. Well, if you're not from the Northwest, you may ask who is Gary Locke. He's the first Chinese- American governor ever in the United States. Locke was elected Washington state's governor in 1996, and he was reelected by a wide margin in 2000. But his state, like many across the country, has hit some hard times. It faces a $2.4 billion budget deficit.

Locke has pledged not to raise taxes and has proposed controversial budget cuts instead. And the governor has seen his approval rating slip to 30 percent. Locke was on Capitol Hill earlier today going over his speech with Tom Daschle and Nancy Pelosi. Congressional leaders usually give the opposition response, but Democrats picked up three governorships last November. One of their few bright spots in the election. And Locke, now chairman of the Democratic Governor's Association, got the nod. He's expecting to stress that the Bush economic plan has failed, and that the president's tax cuts have put most states in a bind.

For more on the economic pressures facing the states and how leaders here in Washington are responding, let's turn to our Congressional correspondent, Jonathan Karl on the other side of Capitol Hill.

Hi, John.

KARL: Hey, Judy.

Well, states are facing the fiscal perfect storm here. They have declining tax revenues escalating costs, especially in the area of health care, and, of course, they want money from Washington. They want a federal handout. In the meantime, what they're doing is resorting to interesting budget gimmicks or methods to get by budget problems. In California, the agency that runs the Golden Gate bridge has actually considered asking pedestrians that cross the bridge to give a voluntary fee, a voluntary donation to the agency as a way of crossing the bridge. This is kind of holding out a tin cup for the state to get by.

In other states see gambling as the answer, getting into the booking business.

Maryland is one of several states that is considering adding state-run slot machines as a way to get an infusion of supposedly easy money.

And in Oklahoma, a much different approach. Oklahoma is one of five states recently to consider getting -- letting prisoners out of jail early as a way to cut down on the cost of running their prison system.

Now, many governors, including many Republicans, Judy, say the president's stimulus plan or any stimulus plan to pass the Congress must include direct aid to the states to deal with these budget problems. And on this question, there is a vast difference between the various plans proposed up here on Capitol Hill. First, the president's plan actually includes absolutely no direct money to the states. Representative Pelosi has a plan for the House Democrats. She includes $31 billion in direct aid. Senator Daschle, a little bit more, $40 billion in direct aid.

But Republicans up here on the hill, by and large, are saying that they do not believe it's up to the federal government to bail out the states. As a matter of fact, just a little while ago, Rick Santorum, Republican of Pennsylvania, said regarding this whole question -- quote -- "So the first time they run to us for help. Nope. Nobody's home." Nobody's home when the states come running to the Republicans here in the Senate Republican leadership when it comes to this question of a bailout, Judy.

WOODRUFF: Yes, I know some of the governors feel that way.

Jon, separately, I gather you ran into the sergeant-at-arms for the House of Representatives today. What were you talking to him about?

KARL: Well, he's the guy, Bill Livingood, he's the guy that every body -- the whole world will see today, tonight when the president comes out. He announces the president's presence on the floor of the House of Representatives.

And he is an incredibly press shy guy. Although he is -- right there you see him in front of the world, making that very famous eight-word announcement. He's never done a television interview until today. We talked to him about that moment and what it's like a little while ago.

(BEGIN VIDEO CLIP)

BILL LIVINGOOD, HOUSE SERGEANT AT ARMS: I come from the U.S. Secret Service, where you're always behind the scenes, never out in front of everybody. So you're used to being behind and away from everything and this is the antithesis because here standing in front of X number of million people making the announcement. And I'm always worried, Am I going to make a mistake or say the wrong thing?

I remember the first time I went in there, one of my coworkers is standing at the door, and he said to me, and it's the words, Mr. Speaker, the president of the United States. As I walk in, he said, Bill, remember, it's Mr. President, the Speaker of the United States. And I went Oh, my God and I said Oh, no.

(END VIDEO CLIP)

KARL: Well Judy, he's never messed those eight words up before and we don't expect him to mess them up tonight. Back to you.

WOODRUFF: He doesn't look so shy.

All right. Jon, we're glad you caught up with Bill Livingood and we will see him tonight. Thanks.

KARL: All right.

WOODRUFF: Well what is the State of the Union? We heard from the House speaker a few minutes ago. Next, I'll talk live with a top Democrat in Congress.

And later, her sister was killed in the so-called crime of the century. Now, nearly a decade later, will Denise Brown toss her hat in the political ring?

(MARKET UPDATE)

(COMMERCIAL BREAK)

WOODRUFF: With me now is Steny Hoyer, Congressman from Maryland, the second-ranking Democrat in the House of Representatives.

What is the State of the Union?

REP. STENY HOYER (D), MARYLAND: Well, the State of the Union, of course, is the leader of the free world, the leader of our nation coming before us and telling us what he thinks, maybe in the future what she thinks, is the State of the Union, the shape our country is in.

Clearly, every president tries to put the best spin on it possible. This president, I think, is going to be no different. He's going to try to put the best spin on a situation that is not so great.

WOODRUFF: The White House is saying this is not the war speech, that they don't feel that this is the time or the need right now to make the case to go to war. Obviously, the president's going to discuss Iraq.

Is that a mistake?

HOYER: Well, I don't think it's a mistake, depending upon what they're going to do. I think clearly what they know is that Americans are very, very anxious about the state of the economy. They're very anxious about this president's economic program, which he said a year ago was going to lead to lowering deficits, increasing jobs and growing the economy.

In fact, the economy has gone exactly the other way. Deficits have exploded. We had more unemployed in two years than any president in recent history. And Americans are very anxious.

I think he doesn't want to repeat the problems that his father had in ignoring a situation that is of great concern to the American public.

WOODRUFF: Well, the White House is saying, the president himself is saying, if there are problems with the economy, they're because of the recession that he inherited. They're because of the war on terror. And besides, he has a tax cut plan that's going to help people at all income levels. And he's got -- and he's got a compassionate conservative agenda for America. HOYER: Well, it's compassionate rhetorically. It is not necessarily compassionate in terms of the investments he's making, for instance in leave nor child behind, he rhetorically said we're leave no child behind. His education budget last year cut education on a net basis and he hasn't done much this coming year. He's done something in Title 1, but not with respect to all children, leaving them behind in many instances.

I think the fact is that he's coming and saying we need more tax cuts, but last year, in 2001, he told us if we cut taxes, this is going to spur the economy; this is going to do the job and it's going to bring down deficits and we're going to have balanced budgets and surpluses.

As a matter of fact, he said we're going to have $5.6 trillion in surpluses. They have totally disappeared under his economic program.

WOODRUFF: No matter what you and other Democrats say, though, aren't you at an enormous disadvantage, because the Republicans have the White House, the Senate, and the House, majorities in all places? They have the ability to set the agenda.

HOYER: Absolutely.

Don't we wish we had that? And they have the presidency. And the presidency, of course, is the bully pulpit. It is where you get to address the American public every day, every hour that you choose. But the facts are, I think, pretty clearly on the side of those of us who have criticized this president's policies, whether domestically or internationally.

And I think those facts are going -- we're going to repeat them. And the president's going to have great trouble tonight or on other nights ignoring those facts or denying those facts. The economy is in bad shape. The economy's in bad shape after a program that he proposed that was passed, signed by the president, which has not done anything to help the economy.

WOODRUFF: Representative Steny Hoyer, who is the minority whip in the House of Representatives, thanks very much.

HOYER: Thank you, Judy.

WOODRUFF: We'll be looking for you in that crowd tonight.

HOYER: Judy, before I end, I had a great comment that one of my staff made about the president's economic policy, in referring to George Bush the 1st. He said, this is deja voodoo economics all over again. I think the president is going to speak about that tonight.

WOODRUFF: He may not use those terms.

HOYER: Probably not.

(LAUGHTER)

WOODRUFF: All right, thank you very much, Representative Hoyer.

HOYER: Thanks.

WOODRUFF: It's good to see you. We appreciate it.

And now checking the headlines in our "Campaign News Daily": South Carolina Governor Mark Sanford says that he may drop out of the Air Force Reserve just a year after he joined. Sanford says he cannot deploy if his squadron is called to active duty because of his responsibilities as governor. Critics accuse Sanford of becoming a reservist for political reasons. He says he had no plans to run for office when he decided to join the reserves.

A sister of the late Nicole Brown Simpson says that she may run for the U.S. Senate the next time a seat opens in California. Denise Brown has never held public office, but she says she has developed an interest in politics from her work in Washington as a lobbyist for victim rights.

In Pennsylvania, Phil came to visit Ed. Now Ed plans to visit Phil. World famous groundhog Punxsutawney Phil joined the inaugural parade for new Governor Ed Rendell last week. Now the governor plans to return the favor by attending the Groundhog Day festivities this weekend to learn firsthand if Phil sees his shadow and if spring will come early. And you can bet we'll report on it Monday.

A check of the CNN "News Alert," plus an update on the Israeli elections straight ahead. Prime Minister Sharon was the heavy favorite. Our Bill Schneider joins me from Tel Aviv with a live update on the early returns.

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WOODRUFF (voice-over): It's time again to check your "I.P. I.Q."

President Harry Truman gave the longest State of the Union address in history on January 22, 1946. It was more than 25,000 words. Earlier, we asked: Who gave the shortest address? Was it, A, George Washington, B, Abraham Lincoln, or, C, George W. Bush? The correct answer is A. President George Washington's address in 1790 was only 833 words and is believed to have lasted less than 10 minutes.

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WOODRUFF: A victory at the polls, but will Ariel Sharon be able to put together a coalition to govern Israel? We'll go live to Tel Aviv in a moment.

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WOODRUFF: The polls closed in Israel just about 90 minutes ago, where voters were expecting to hand a big victory to the Likud Party of Prime Minister Ariel Sharon. But exit polls broadcast by Israeli television Channel One project that Likud will pick up just 36 seats in the 120-member Knesset. Israel's Channel 2 projects a 32-seat Likud victory in parliament.

Our Bill Schneider is following the Israeli elections. He joins me now from Tel Aviv.

Bill, what does it mean? If Likud has only a fourth of the seats in the Knesset, can Ariel Sharon govern?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: He's going to have a too build a coalition. And to build a coalition, he can go in two directions.

He can build a coalition based on right-wing parties, which is going to make it very difficult for him to negotiate any kind of peace deal, such as the deal that President Bush supports. Or he can do what he said he wants to do, build a government of national unity. The problem is finding a partner. The Labor Party has suffered a historic defeat and they've resisted going into any new government of national unity.

He's going to have to use a lot of political skill to bring Labor into his government. But, clearly, that's what the public wants. They want a new government. In a time of national threat with an impending war, they want a government of national unity.

WOODRUFF: All right, Bill Schneider, thanks very much. And I know we'll be continuing to get reports from you through the night. We'll see you at the State of the Union.

And we'll get back to our countdown to the State of the Union address when we return. Mr. Bush plans to talk dollars and cents, but how much of his economic stimulus plan will Congress buy? We'll hear from the president's former point man on Capitol Hill.

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WOODRUFF: When I was at the White House earlier today, I learned that the president's State of the Union address was finished, buttoned up, edited, no more changes. Well, now, just a little more than four hours before the president's speech, the White House has decided to issue, make public some excerpts of what the president will have to say.

For more on that, let's go to our senior White House correspondent, John King, again -- hi, John.

KING: Hello to you, Judy.

A few highlights from the speech tonight: first, an excerpt released by the White House in which the president broadly discusses his goals in his speech tonight. The president will say in that speech -- quote -- "This country has many challenges. We will not deny, we will not ignore, we will not pass along our problems to other congresses, other presidents in other generations. We'll confront them with focus and clarity and courage."

On the domestic issues, Mr. Bush talks about health care and the economy in these excerpts released. Let me touch on one on the economy in which the president promotes his tax cut plan. The president will say -- quote -- "Jobs are created when the economy grows. The economy grows when Americans have more money to spend and invest. And the best, fairest way to make sure Americans have the money is to not tax it away in the first place."

Many are looking, of course, for what the president will say about Iraq tonight in his speech. According to these excerpts, the president, among other things, will say this: "Almost three months ago, the United Nations Security Council gave Saddam Hussein his final chance to disarm. He has shown instead his utter contempt for the United Nations and for the opinion of the world. The dictator of Iraq is not disarming. To the contrary, he is deceiving."

I want to spring into the discussion now Nick Calio, who, until just two weeks ago, was the president's top liaison on Capitol Hill, left recently for the private sector, but still in close touch with the White House.

Let's start on Iraq. The president has quite a challenge tonight, convincing the American people that he's right and that perhaps this country will be at war in a matter of weeks. What is your sense, from talking to your former colleagues, about how specific the president will be in talking about what we're told is new intelligence showing links to al Qaeda and efforts, active efforts, right now to conspire to block the U.N. weapons inspectors?

NICK CALIO, FORMER WHITE HOUSE CONGRESSIONAL LIAISON: Well, John, I think, quite clearly, the president will not declare war on Iraq tonight.

I think he will try to remake the case to the American people. I would make the case that the president has already made that case once. He made it at the United Nations. He made it in the U.S. Congress. Congress last fall authorized the use of force. As you'll recall, the White House undertook, the administration undertook a massive set of classified briefings for members of Congress, after which they voted overwhelmingly, on a bipartisan basis, to authorize the use of force.

I think that most of the American people would hope that the United States Congress is not going to start acting like the United Nations General Assembly has for the last 12 years, where they say, yes, we're going to use force. They authorize it and then they back off.

So, it's a matter of remaking the case. I guess people have short memories. I think the evidence is there. I think, basically, if you look at it, just on what we know was there when we left in 1991 and what's not accounted for now, as the president of the United States, he's got to make the case about why we need to go in.

KING: Help me understand. We're now told that they will declassify some of this intelligence.

Back when you got the resolution through the Congress, you debated this internally and decided not to release it. There were too many concerns that it would compromise intelligence gathering. Why has the administration then decided now it has to put some of this public? Is it a sign that you're losing the argument?

CALIO: Well, first of all, I haven't been part of these internal discussions, so I can't say. I can't speak for my former colleagues.

I would say this, though. There's always a constant debate between the intelligence community and others inside an administration about what you declassify and what you do not. It was an ongoing debate. I assume the debate has progressed. Back in the fall, we did declassify some materials. Others were just presented to members of Congress in those classified briefings.

And the president -- what we made the case last fall to members of Congress was, based on what you know from these classified briefings, if the president sat on his hands and did nothing, would you accuse him of failing to connect the dots if something happened?

KING: I want to quickly bring you back to domestic issues. The Democrats yesterday accusing this president of a -- quote -- "credibility gap," saying he deliberately says one thing and then does another. Is this the most openly partisan moment of the Bush presidency as he prepares to give this speech tonight?

CALIO: I don't know if it's the most openly partisan moment we've had.

Clearly, the Democrats have taken off. And I think they have made a number of personal attacks. They're back to resorting to class warfare and the personal attacks. The American voters have never bought that. I think what the American voters and the American public have shown repeatedly is, they don't buy those arguments. The credibility gap that's claimed gets reversed and put on the person saying that the president has a credibility gap.

And I think what they're looking for is resolve, a willingness to take on big issues. And I think the American public will see that from this president once again. He often says, in discussions with staff: Look, we're only here for a short time. And if doing right means we're here for a shorter time, so be it.

I think you're going to find the president willing to take on modernizing Medicare, making good on the promise to provide prescription drugs to seniors, rather than just debating it ad nauseam in the Congress, reducing. I think you'll see him continue to push for economic growth. I think you'll see him try to limit the insanity of the assembly-line lawsuits that are killing the medical profession, so that people can't get medical care.

And I think you'll once again see him ask the American people to reach out to each other. He thinks that the greatest resource that we have is the American people, with their resolve, in trying to get things done. And I think they will see it in him. It's reflected in them. And we'll move forward from here.

KING: All right, we need to stop there, due to time constraints. Nick Calio, thanks for joining us -- and back now to Judy on the Hill.

WOODRUFF: Thanks, John, and Nick Calio, still very plugged in.

Coming up: the lingering health problems for rescue workers at ground zero. I'll talk with one of the firefighters who was there and who will be there tonight for the State of the Union speech.

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WOODRUFF: At least eight New York City rescue workers will be in the gallery for tonight's State of the Union speech. They are here because Congress and the president have failed to reach an agreement to fully fund a health care study for workers at ground zero.

One firefighter who will not be here is Bob Beckwith, who stood at President Bush's side just days after the September 11 attacks. Beckwith said he changed his mind because he's a Republican and he said he does not want to embarrass President Bush.

New York firefighter Phil McArdle will be in the gallery. He's the health and safety officer for the Uniformed Firefighters Association.

Mr. McArdle, you're not worrying about embarrassing the president?

PHIL MCARDLE, UNIFORMED FIREFIGHTERS ASSOCIATION: No, absolutely not.

As a matter of fact, we had a meeting at the White House today and we spoke to the White House staff. And they were absolutely pleased that we were going to the State of the Union and they were pleased that we were wearing our uniform.

WOODRUFF: What do you want to accomplish by being there tonight in the gallery?

MCARDLE: Tonight, being in the gallery for us, it's just -- it's like being at the Super Bowl. It's our opportunity to sit there and basically listen to the president and support the president. It's an opportunity for us to actually see it firsthand, how it happens.

WOODRUFF: And how important is this health study that you want funded that has not been funded yet?

MCARDLE: It's incredibly important.

And the reason that we have to do this is, we have to look at this not as a New York problem, not as a Democratic problem or a Republican problem. This is an American problem. And when I say it's an American problem is, if this were to occur in any other city in the United States, we would still have to take care of health care workers. It's not about firefighters. It's about all emergency response workers who are going to respond to these types of events.

WOODRUFF: And, just quickly, when the president and Republicans argue that the money -- that there wasn't the money to take care of it this year, you're going to have to wait until next year, what's your response?

MCARDLE: I think that we have to put partisanship aside. And I think that we can't work as Democrats or Republicans here. We have to work as Americans and we have to take care of Americans. And that's the message that we're trying to send.

WOODRUFF: Phil McArdle, with the Uniformed Firefighters Association, who will be in the gallery tonight for the State of the Union, thanks very much for talking with us.

MCARDLE: Thank you for asking us here.

WOODRUFF: INSIDE POLITICS will be right back.

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WOODRUFF: The State of the Union may not rank up there with the Super Bowl in the ratings, but it has become something of a television event, with coverage on numerous networks and the flood of punditry before and after. It was different once upon a time.

Here's our national correspondent Bruce Morton.

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UNIDENTIFIED FEMALE: My lord and members of the House of Commons.

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): It comes from the speech of the British monarch makes to parliament every year, though today's constitutional queen just reads what the prime minister's party has written for her.

Presidents say what they want to say. George Washington delivered the first one in New York, then the Capitol, in 1790. Thomas Jefferson stopped delivering them in person, too royal, he thought, and sent a written message to Congress. Presidents followed that precedent for more than a century. James Monroe, in a message, laid out the Monroe Doctrine: Europe, stay out of this hemisphere. Lincoln, in a message, freed the slaves: "In giving freedom to the slaves, we assure freedom to the free."

Nobody delivered a speech in person again until Woodrow Wilson in 1913. Calvin Coolidge delivered the first one on radio in 1923; Harry Truman the first televised one in 1947.

(BEGIN VIDEO CLIP, 1943)

HARRY TRUMAN, PRESIDENT OF THE UNITED STATES: Most of the countries of the world have joined together in the United Nations in an attempt to build world order based on law and not on force. (END VIDEO CLIP)

MORTON: Inaugural addresses have produced more famous phrases: Franklin's Roosevelt's "The only thing we have to fear is fear itself," though he did set forth his four freedoms, of speech, of worship, from want, from fear, in a World War II State of the Union. John Kennedy's "Ask not what your country can do for you" was in his inaugural.

State of the Union speeches are often about legislation the president want: Lyndon Johnson and the Voting Rights Act in 1965.

(BEGIN VIDEO CLIP, 1965)

LYNDON JOHNSON, PRESIDENT OF THE UNITED STATES: I propose that we eliminate every remaining obstacle to the right and the opportunity to vote.

(APPLAUSE)

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MORTON: And this president had a memorable phrase in last year's speech.

G.W. BUSH: States like these and their terrorist allies constitute an axis of evil, arming to threaten the peace of the world.

MORTON: Bill Clinton probably had the oddest one. In 1997, the verdict in O.J. Simpson's civil trial came the night of the speech. Most networks stayed with the speech. Some split their screens. In 1998, Clinton's speech came just after we all learned who Monica Lewinsky was. And, in 1999, oddest of the all, spoke to a House which had impeached him and a Senate which had just begun his trial.

Mr. Bush won't have to cope with anything that odd. But with a looming war, a soggy economy, and a controversial tax proposal, he'll have lots to talk about.

Bruce Morton, CNN, Washington.

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WOODRUFF: And a good source tells us the president won't use the term axis of evil again this year.

That's it for INSIDE POLITICS. I'm Judy Woodruff. Thanks for joining us. We'll see you later.

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