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Inside Politics

Will President Get Key U.N. Votes By Next Week?

Aired March 04, 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)
ANNOUNCER: A global gamble with the showdown with Iraq. Will the president get nine key U.N. votes by next week?

KOFI ANNAN, SECRETARY-GENERAL, UNITED NATIONS: Pressure. I'm not under pressure. (UNINTELLIGIBLE)

ANNOUNCER: Dueling prescriptions for healthcare reform, while Republicans and Democrats trade shots a spinal chord patient cries out.

UNIDENTIFIED FEMALE: No amount of compensation is going to pay me back for what I've lost. I would like to ask any of you who would turn over a limb, or a lung or a life for a lottery ticket?

ANNOUNCER: Mark your calendars again and again. Who's trying to change the presidential primaries schedule now, and what will they get out of it?

Let the good times roll. It's Mardi Gras time. And even some politicians are on parade.

(END VIDEOTAPE)

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

JUDY WOODRUFF, HOST: Thank you for joining us.

The Bush White House is mapping out its end game before a likely war with Iraq. In this "NewsCycle," Pentagon officials say the administration is considering whether to issue an 11th hour ultimatum to Saddam Hussein. They would not discuss exactly what the ultimatum would demand.

The White House still plans to seek a vote next week on a new U.N. Security Council resolution on Iraq. But it has not ruled out withdrawing the resolution, if it's clear that it would be defeated. President Bush made it plain again today that he is prepared to attack no matter what happens at the U.N.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It is his choice to decide whether to listen to the demands of the free world. But no matter what his choice may be, for the sake of peace, for the sake of freedom, for the sake of security of our people, Saddam Hussein will be disarmed.

(END VIDEO CLIP)

WOODRUFF: United Nations Secretary-General Kofi Annan says the Security Council's decision on Iraq will rest on Friday's report by top weapons inspectors. It will also rest on the Bush administration's powers of persuasion.

Here's our senior political analyst Bill Schneider.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Judy, the crucial vote is coming. The White House is lobbying undecided members furiously.

But this is not a big Congressional vote. This is the upcoming vote in the United Nations Security Council on the war resolution. Different arena, same game. Nose counting and horse-trading.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): The United Nations Security Council has 15 members. The White House needs nine votes to pass a resolution authorizing war with Iraq. Four votes are a sure thing: the United States, Britain, Spain and Bulgaria.

Five countries will not support the resolution: France, Russia, China, Germany and Syria. That leaves six undecided members. The U- 6, as they're called. To get to nine, the U.S. needs at least five votes from the U-6.

One of the U-6 is Pakistan, America's new best friend in the war on terrorism. The Pakistani government faces vehement anti-war protests, but it's afraid of an economic backlash if there is a war and its oil supply is cut off.

Two Latin American countries are in the U-6, Mexico and Chile. Washington believes they have linked arms and may vote together. But how?

UNIDENTIFIED MALE: We have never indicated to any side that we support them.

SCHNEIDER: Both democracies face strong public opposition to war. But both economies are linked to the U.S. What does Mexico want? The same thing it wanted when president Vicente Fox visited Washington just before September 11th: an immigration deal that would give legal status to 3.5 million Mexicans working in the U.S.

What does Chile want? A free trade deal with the U.S. Three U-6 countries are African. Angola sells oil to the U.S., and it desperately needs U.S. aid. Ever hear of Guinea or Cameroon? There they are, on the west coast of Africa. Both former French colonies have strong ties to Paris. Uh-oh. But, wait. Washington gives more aid to Guinea than France does. And Britain just upped the ante by $6.2 million. Which way are they going?

MARTIN BELINGA EBOUTOU, CAMEROONIAN AMB. TO U.N.: At this time, we have one only objective -- obtain the disarmament of Iraq.

SCHNEIDER: Even if the U.S. gets nine votes, there's one more hurdle. A veto by France, Russia or China could kill the resolution.

(END VIDEOTAPE)

SCHNEIDER: Well, we have to say that Cameroon and Angola were wrongly labeled on that map, but the U.S. appears to be close to getting those nine votes, and that would be a moral victory.

Then if France does veto alone, the White House has reserved the right to say, so what? But, you know, one official has warned in a wonderfully mixed metaphor that the U.S. -- quote -- "doesn't want to count its chickens before the fat lady sings" -- Judy.

WOODRUFF: That is a mixed metaphor. Bill, thanks very much. And our apologies to Cameroon and Angola. We will get it right the next time.

Saddam Hussein today marked the Islamic New Year by issuing a message that Iraq will be victorious against an aggression. Despite the defiant talk, Iraq continued to scrap its Al-Samoud 2 missiles, as demanded by the U.N. Ninetten of 100 missiles have now been destroyed since Saturday.

Meantime, in Israel, Patriot anti-missile batteries are being deployed to help protect cities from any Iraqi missile attacks during a U.S.-led war.

One of the Senate's strongest opponents of war with Iraq today urged the president to propose plans to invade. Democrat Edward Kennedy says the U.S. should give peace a chance, even if it means keeping U.S. troops in the region for a while.

(BEGIN VIDEO CLIP)

EDWARD KENNEDY (D), MASSACHUSETTS: No one. No one said it would be easy. But as long as inspectors are on the ground and making progress, we must give peace a chance, So that war with Iraq does not distract us from dealing as effectively as possible with the obvious and ongoing threats of terrorism by al Qaeda and the crisis over North Korea's nuclear weapons.

(END VIDEO CLIP)

WOODRUFF: Senator Kennedy spoke to a conference of the United Methodist church.

In California today, almost half of the 120 members of the state legislature announced their opposition to war with Iraq. The 52 Democrats wrote a letter to President Bush urging another Security Council vote, and a declaration of war by the Congress before attacking Iraq.

Well, the Bush administration continues to tout the recent capture of a recent al Qaeda lieutenant as evidence that the U.S. would be able to fight a war with Iraq and the war on terror.

For the first time, the three top officials in charge of homeland security testified side by side before the Congress. They called the arrest of Khalid Shaikh Mohammed a significant blow to al Qaeda.

Let's get more now from our national security correspondent, David Ensor. David, first of all, do officials say whether Mr. Mohammed is talking? And, if he is, what do they say they're getting from him?

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, he's in his fourth day of intensive interrogations, Judy. He's in the hands of the CIA in an undisclosed location overseas. He was captured with a laptop computer, cell phones and note notebooks, what one official called a treasure trove.

Intelligence officials are not commenting, but other government officials are saying that included in those materials are literally hundreds of names. And counter-terrorism officials are working now to try to figure out how many of the names may be actual al Qaeda operatives. They suspect some of those names may be in U.S. cities, including possibly this one.

Sources are also saying that information in the laptops suggests possible terror plots. But officials say it is general in nature. They haven't found any blueprints for attacks. Now, these sources are saying that Khalid Shaikh Mohammed is talking, but he is not providing, to this point at least, any useful information. Sources say after being taken from Pakistan, Mohammed was transferred to a U.S. base in Afghanistan, before being taken to his current secret location.

Now, at the hearing you mentioned a moment ago, the attorney general talked about the urgency with which the government is pursuing the leads that it is getting from that Rawalpindi raid.

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, ATTORNEY GENERAL: I know my phone was ringing at 1:30 in the morning Sunday morning with a request for consultation in regard to our exploitation of this opportunity. Under our new standard of FBI/CIA cooperation and coordination, Khalid Shaikh Mohammed's capture means the FBI can better prevent terrorism and save American lives.

(END VIDEO CLIP)

ENSOR: Attorney General Ashcroft, Judy.

WOODRUFF: David, and what can you tell us about any other al Qaeda prisoners out there?

ENSOR: Well, there's one, one of the other two men seized with Mohammed. He's been identified now by name. And it's a name we already knew, Mustafa Ahmed al-Hawsawi. He's a Saudi citizen.

U.S. officials say he transferred thousands of dollars to Mohammed Atta and the 9/11 hijackers in the U.S. from the United Emirates in Dubai. He also had the power of attorney for one of the hijackers, Fayez Ahmed. And the hijacker sent him back the remaining money just before September 11, on which day, officials say they believe he fled from the UAE to Pakistan.

We also learned today that the son of a blind cleric, you'll remember Sheikh Omar Abdel Rahman, who is in a U.S. prison for conspiring to blow up landmarks, and who was suspected of involvement also in the first World Trade Center bombing, while his son, Mohammed, was seized in a raid in Quetta, Pakistan on February 13th, officials are saying. And he is now also in U.S. hands. Officials are saying, though, that it was not information from him that led them to Khalid Shaikh Mohammed's hideout in Rawalpindi. And they won't say what led them to that operations chief, Judy.

WOODRUFF: All right. A lot of information that seems to be coming to the fore. David, thank you very much.

And one other note in the war against terror: the Justice Department says two Yemeni citizens have been charged with conspiring to provide material support to the al Qaeda and Hamas terrorist groups. The suspects, allegedly, have direct ties to Osaka bin Laden. The U.S. wants them to be extradited from Germany where they were arrested in January.

Now to Capitol Hill here in Washington and a breaking story involving the daughter of Chief Justice William Rehnquist. Our congressional correspondent Jonathan Karl has an exclusive report -- Jon.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Judy, what we know from several sources, both here on Capitol Hill and within the administration, is that Janet Rehnquist will resign this week, possibly as soon as today, as the inspector general for the Department of Health and Human Services.

Rehnquist, as you mentioned, is the daughter of the Chief Justice, and as the IG for this Department of Health and Human Services, a position that she was appointed to back in June of 2001 by President Bush, she oversees a staff of 1,500 people and a budget of $163 million. It is the largest IG office in the federal government. She resigns after facing intense pressure coming from several investigations, including a Congressional investigation into professional allegations of professional misconduct.

Now some of the things she was accused of by Congressional investigators and also facing an investigation from the Government Accounting Office, include that she improperly delayed an audit of the state of Florida's pension system for two-and-a-half months. The reason why this is significant is the allegation is that she delayed this so it would come out after the 2002 election. In other words, after Governor Jeb Bush were to be re-elected.

In fact, the audit was delayed. Now, Rehnquist said in her defense that her decision was based strictly on the merits, that it had nothing to do with politics. And, in fact, the audit probably would not have been done before the election anyway. But what's significant, Judy, is that she delayed that after receiving a call requesting the delay from the chief of staff of Governor Jeb Bush.

Another allegation that she faced was that she forced out, several, more than a dozen, in fact, senior career members of the IG's office, including several deputy inspector generals. She said in her defense that she felt she needed to make some changes as she came in with a new administration. She also faced an allegation that she improperly brought a gun to the office, that she had no such permit to carry a gun to her office but that she did so.

Now, in her defense coming forward already, even though this has not officially been announced, her move to resign, is Tom Scully, who is the administrator for the Medicare program and the Medicaid program. And he tells us, we have a graphic of his quote -- quote -- "Her biggest problem is that her name is Rehnquist. She was an easy target. She had a lot of people in her own agency taking shots at her." That's from Tom Scully, the administrator for Medicaid and Medicare, and also a long-time friend of Janet Rehnquist.

We do hear that she has decided to step down. And I should also mention, Judy, this comes after the Chairman of the Finance Committee, Chuck Grassley, had informed the White House this week that he was about to come out with Max Baucus, the ranking Democrat on that committee, and call for her resignation in light of these allegations and these investigations. And it looks like they no longer need to call for her resignation because she'll be doing it on her own -- Judy.

WOODRUFF: So, John, that was a question I was going to ask you, is what about the reaction there on the Hill. And is there division among Democrats and Republicans over whether she should have stepped down?

KARL: This was very much bipartisan concern on this. Chuck Grassley and his staff very much were leading the way on this, along with Max Baucus and the Democratic side.

WOODRUFF: OK. Jon Karl, very good reporting. Thank you very much.

Well, there's much more ahead on INSIDE POLITICS. The president prescribes his plan to overhaul Medicare and help seniors pay for pills. But Democrats aren't buying it.

Also ahead, where is the president coming from? We'll discuss the political roots of his strategy on Iraq.

And later, get out your magnifying glasses. We will head to the campaign trail to investigate the case of the missing hyphen.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Coming up, the arguments over medical malpractice. Should there be a limit on doctors' liability.

Plus, Mother Nature puts U.S. Airways in a bind. Will the air carrier live up to the deal it made with its passengers?

(COMMERCIAL BREAK)

WOODRUFF: Despite the standoff with Iraq and other international pressures, President Bush today tackled a major item on his agenda here at home: Medicare reform. We get the latest on his plans from CNN White House correspondent Suzanne Malveaux.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): President Bush is taking on one of the most controversial domestic endeavors, overhauling the country's healthcare system for the elderly. Before the American Medical Association, he proposed a plan to reform Medicare by offering seniors the option to enroll in private and managed care programs, believing it can better contain the cost of Medicare.

BUSH: Our vision, our goal is a system in which all Americans have got a good insurance policy, in which all Americans can choose their own doctor, in which seniors and low-income citizens receive the help they need.

MALVEAUX: But critics, mainly Democrats, say it unfairly pushes seniors into managed care programs, which may provide inferior coverage. Last year after Congress failed to pass Medicare reform, including a prescription drug benefit, Mr. Bush vowed to make it the centerpiece of his domestic agenda.

But Republican lawmakers complained that a detailed White House proposal would be rejected by Democrats and doomed for failure, damaging the Republicans in the end. So, in a major concession to the GOP, Mr. Bush did not propose a specific White House bill, instead, leaving the details to the members of Congress.

SUSAN MOLINARI, REPUBLICAN STRATEGIST: The president has challenged Congress to meet him halfway in providing one of the most pressing solutions to senior citizens. And every senator and member of the House of Representatives that is concerned about their re- election will, in fact, do that.

(END VIDEOTAPE)

MALVEAUX: There are 40 million enrolled in Medicare. That number is expected to double in the next 20 years. The big question, who is going to pay for all of this? Well, the White House is suggesting there will be serious compromises, negotiations needed between Democratic and Republican lawmakers.

According to one senior administration official, who put it this way, they just need to hold hands and jump off the cliff together -- Judy.

WOODRUFF: Hmm. That's an interesting analogy. All right, Suzanne. Thanks very much.

MALVEAUX: Sure.

WOODRUFF: Well, members of Congress had a wide range of responses to the president's Medicare proposals. Democratic Senate leader Tom Daschle was unimpressed. A little while ago he said any that Medicare reform must be comprehensive. And he said the president's plan falls short.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD) MINORITY LEADER: Listening to the president talk about Medicare, I'm reminded of that old song, "Is That All There Is?" Bcause if that's all there is, I'm disappointed.

I am concerned that, once again, the president will coerce seniors out of Medicare and into HMOs. They are going to force seniors to give up the doctor they choose for the drugs they need. That is a false choice. That is wrong, and that ought not be the direction we take prescription drug benefits in this country today.

(END VIDEO CLIP)

WOODRUFF: Republicans are also far from unanimous in their support for all aspects of the White House plan. Republican Senator Charles Grassley said today, -- quote -- "The way I see it, we need a universal drug benefit so that seniors who want to stay in traditional Medicare get a prescription drug plan that's just as good as those who chose a new option."

Well, adding to the debate over how best to reform the system, there are three different plans on the table for debate. The president's plan, which comes with a $400-billion price tag. The plan backed by Senator Daschle and his Democratic colleagues, which costs an estimated $600 billion. Plus, a second Democratic plan, this one in the House, which costs $900 billion.

Mr. Bush also took time today to repeat his call for medical malpractice reform. Legislation backed by the president that would limit jury awards is now making its way through Congress this week. Among the highlights, a $250,000 cap on damages for pain and suffering in malpractice lawsuits. Limits would also be placed on punitive damages designed to punish doctors for serious mistakes. So-called economic damages would not be capped. Those are damages that cover out-of-pocket costs such as lost wages and medical expenses.

Well, about the same time the president made his case before the AMA, Congress was holding hearings on the issue. A woman who was injured during a visit to her doctor's office argued against the proposed limits on jury awards.

The House of Representatives, we should say, is expected to begin debating medical malpractice reform starting next week.

So those are the arguments over medical malpractice.

Coming up, Bob Novak and Paul Begala take issue in our "CROSSFIRE."

Plus, the battle over the calendar. We'll take a look at the fight between some states over when they hold their primaries.

(MARKET UPDATE)

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): It's time to check your "IP IQ." Earlier today, President Bush addressed the American Medical Association and outlined his ideas for Medicare reform. When did Congress first pass the Medicare legislation providing health care for the elderly? Was it A: 1963, B: 1965 or C: 1969?

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

(COMMERCIAL BREAK)

WOODRUFF: Questions over President Bush's leadership style. Is his style more of a uniter or a divider? Take a look coming up.

(NEWS UPDATE)

WOODRUFF: Well, joining us now for their take on the Bush administration's medical malpractice and Medicare proposals, Paul Begala and Bob Novak from CNN's "CROSSFIRE."

Hello, gentlemen.

BOB NOVAK, CO-HOST, "CROSSFIRE: Hi, Judy.

PAUL BEGALA, CO-HOST, "CROSSFIRE: Hi, Judy.

WOODRUFF: President Bush is pushing for a $250,000 cap on so- called pain and suffering damages in medical malpractice cases. Paul, is this the right way to go here?

BEGALA: Well, no. It's fitting that at least the president gave the speech to a Washington special interest group, because it's designed for special interests. The notion, first off, that a man who became president because he filed a lawsuit, wants to limit any consumer's right to file a lawsuit is preposterous.

But who is he to say that somebody's pain and suffering is only worth $250,000? He also wants to cap punitive damages, that is the punishment that we can give to $250,000. I just think it's bad policy. But I, also, frankly, think it's bad politics because it makes it look like he is sucking up to a special interest group. WOODRUFF: Bob?

NOVAK: Well, just at the risk of being accurate, the $250,000, of course, is over and above what they pay for the medical expenses. How much is pain and suffering worth to anybody?

But that isn't what this is about. This is about the trial lawyers who are the biggest cash cow for the Democratic Party. And anything the trial lawyers want, they give so much money to all the Democrats. They say, yes sir. What's wonderful is they are even trying to get one of their own, John Edwards of North Carolina, to be elected president of the United States.

WOODRUFF: So, is it only about the trial lawyers Paul?

BEGALA: Well, no, of course, it's not.

I mean, Democrats are supported by trial lawyers. But why not just trust people? This is a president who ran -- he actually didn't get as many votes as his opponent. But he ran around saying, I trust people. And he doesn't trust people. What he does is he wants to impose his own will on every jury in this country, and to try say that, you know, $250,000 is a whole lot of money. But not for the kind of pain and suffering that we have seen families go through in famous cases like this poor, Jesica Santillan who died recently.

And, by the way, $250,000 is what we pay President Bush for just eight months work. So who is he to say that somebody's suffering is only worth eight months of his pay?

WOODRUFF: Bob?

NOVAK: Judy, what this is doing, these juries are just driving the doctors out of the medical business. I think doctors are more important than lawyers anyway.

I was the foreman of a jury in a medical malpractice case. And I killed the case. I filibustered the whole jury. It started out with the vote 9-3 against me. But most juries don't have public spirited foremen like me. If they did, we'd be OK with our ceiling.

WOODRUFF: You mean, they let you on a jury? No, I'm just...

(LAUGHTER)

NOVAK: The judge was a member of the Maryland Terrapin Club. And he left me on.

WOODRUFF: All right, to another serious subject, and that is Medicare. The president is proposing to do something like putting millions of dollars in Medicare to get people to move to managed care plans, to get the elderly to move to managed care in order to get their prescription drug prices covered.

Let me just quickly quote to you what the influential House Republican, Billy Tauzin, had to say. He said: "You couldn't move my own mother out of Medicare with a bulldozer. She trusts it, believes in it. It's served her well."

Is the president doing the right thing here, Paul?

BEGALA: No. Again, politically, it's dead on arrival. I saw your report earlier that Senator Grassley, the Republican chairman of the Senate Finance Committee, doesn't like this either.

If the president wants to force seniors out of Medicare and into corporate HMOs, he's got a good plan, because that's what he wants to do. The problem is, seniors don't want it. The American people don't want it. This would end Medicare as we know it and force seniors into corporate-run HMOs. Or, get this, he gives them a prescription drug benefit -- if you want regular Medicare, you get a benefit with a $4,000 deductible. That's not a choice.

WOODRUFF: Bob, quickly.

NOVAK: Judy, with all due respect, it isn't just the HMOs or nothing. There are options.

The Medicare program, the patron saint of the Medicare program is Joseph Stalin, because he ruled that you had to have a set price. We have the market system in this country and that's where we ought to go.

WOODRUFF: You are on a roll today, Bob Novak. That's all I can say.

(LAUGHTER)

WOODRUFF: Bob Novak, Paul Begala, thank you both. We'll see you on "CROSSFIRE" tonight at 7:00.

BEGALA: Thanks, Judy.

WOODRUFF: Well, in the crowded Democratic presidential race, a scorecard would be nice, but a calendar is essential. Up next, we'll discuss why Michigan Democrats are trying to change their caucus date and, in turn, the campaign landscape.

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): Time again to check your "I.P. I.Q.": Earlier today, President Bush addressed the American Medical Association and outlined his ideas for Medicare reform. When did Congress pass the Medicare legislation providing health care for the elderly? Was it, A, 1963, B, 1965, or C, 1969?

The correct answer is B. Medicare was passed into law on July 30, 1965. At the bill-signing ceremony, President Lyndon Johnson enrolled former president Harry Truman as the first Medicare beneficiary and presented him with the first Medicare card.

(END VIDEOTAPE)

(COMMERCIAL BREAK) WOODRUFF: Washington, D.C.'s City Council today approved, by voice vote, to move up the city's presidential primary to January 13, before the traditional kickoff contest in Iowa and New Hampshire. Mayor Anthony Williams says he will sign the measure. The Democratic National Committee is expected to penalize the district, because the move violates the DNC's rules. But the nation's capital isn't the only place trying to get a jump on the primary season.

(BEGIN VIDEOTAPE)

SEN. JOSEPH LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: Thank you very much for that warm New Hampshire welcome.

WOODRUFF (voice-over): In primary politics, size matters a lot less than where you fall on the calendar, which is why relatively insignificant states such as Iowa and New Hampshire are the center of the political universe, while California, with its late primary, has largely been ignored. But now some big states are threatening to muscle in on the early action.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: I think it's not a bad idea to not have it always be the same two states that have a lock on the early, because it gives a disproportionate emphasis on those two states.

WOODRUFF: Michigan's Democratic Party wants to hold its contest on the same day as New Hampshire, even if it gets docked some delegates under national party rules designed to protect the existing calendar. The top presidential candidates say they support New Hampshire's first-in-the-nation status, but have not ruled out campaigning in Michigan -- at stake, clout and money.

Being first means that your state gets a huge amount of attention, from politicians, who treat these early states like second homes, and the hundreds of reporters who follow them around. And it is a major economic windfall, bringing in tens of millions of dollars in hotel bookings, restaurant bills and political ad buys.

(END VIDEOTAPE)

WOODRUFF: And with us now: Debbie Dingell of Michigan, a member of the Democratic National Committee -- she also happens to be the wife of Congressman John Dingell -- and Tom Rath of New Hampshire, a GOP strategist and a member of the Republican National Committee.

Debbie Dingell, to you first. The DNC rules are pretty clear. Everybody on the committee voted last year. The vote was Iowa, New Hampshire go first. You're a member of the DNC. This is the way it's been. Why challenge it?

DEBBIE DINGELL, MICHIGAN DNC MEMBER: Well, we are challenging it because many people may not know this, but, actually, it was Dingell vs. Levin for 12 years.

And last time, Michigan very strongly tried to get the rules changed. I argued, we shouldn't change the rules in the middle of a cycle. We did vote unanimously in Michigan a year ago to try to change the rules and weren't able to even get a hearing. Now we are saying -- and let me make it clear, we still have to file our official plan to move the date.

But New Hampshire and Iowa have too disproportionate an impact on the process. We need to have a process that's more reflective of Democrats in this country. And it takes a state that's willing to stand up and say, you got to change the process. You got to have something that's going to look at how the process can be more reflective.

Tom Rath, what about this argument that New Hampshire, where you live -- and you're a Republican, obviously -- but her point is, it's not representative. And, after all, New Hampshire only sends Republicans to Congress. You got a Republican governor. You voted Republican in 2000. Why shouldn't the Democrats do this?

TOM RATH, NEW HAMPSHIRE RNC MEMBER: Now, Judy, are you asking me to defend the New Hampshire Democrats? I'll be glad to.

(LAUGHTER)

RATH: Because people with such Democratic backgrounds as John F. Kennedy, Lyndon Johnson, Mike Dukakis, right through Bill Clinton have won this primary and they've done just fine as Democratic standard- bearers. In fact, it's hard to find a person who has been elected president the United States as a Democrat who hasn't done well in New Hampshire.

So, I don't think that there's much political history to support that claim. And what New Hampshire really does is, it thins the field and lets other states then decide it. But what New Hampshire does and what is really unique about it is, it forces the person who would be president to campaign not just through the television sets, not just through slick advertising, but sit in people's homes and deal one on one with candidates.

And they are already doing that. And that's why we have 75 percent to 78 percent of all eligible voters in New Hampshire vote in this plebiscite every four years. No other state in the country can match that. And a caucus doesn't replace that kind of widespread involvement in the process.

WOODRUFF: All right, Debbie Dingell, what about that, that it's one on one?

DINGELL: Well, if you have a process that allows that one on one, you need to go to a regional process. I'm saying you need to take a look at the process.

You can tell me that New Hampshire did this, but the fact of the matter is that 25 percent out of the last eight elections, New Hampshire hasn't voted Democratic. And, by the way, I hear that Republicans have already stated they are not going to let New Hampshire and Iowa dominate this process this time. And the fact of the matter is, is that Democrats are not the party of privilege and the party of privilege isn't letting them. So...

WOODRUFF: Tom Rath?

RATH: Well, I don't know what Debbie's heard, but our national chairman, Marc Racicot, was here on Thursday and said that New Hampshire will always have its traditional role. He was strongly supportive of it. This White House has been very strongly supportive of New Hampshire. Republicans aren't going to change and Republicans supported it the last time.

I think what's really important is not which state goes first, but whether the process that is employed gets a better president. And a president who has been one on one, with real-live people and forced to defend themselves and understand that the decisions they make affect real-live people really is the right way to go. And New Hampshire gives you that. And it would be a shame to lose it.

(CROSSTALK)

WOODRUFF: Debbie Dingell -- I have to -- I'm sorry. I have to ask you, because we're running out of time, what about the fact that the Democratic Party chair, Terry McAuliffe, has said Michigan is going to lose delegates being seated at the national convention if it tries to move up?

DINGELL: Well, we're going to take it all the way to the floor of the convention and say to people, don't seat us. Michigan is an important state in this process. And the leadership, Senator Carl Levin, the new governor our state, Jennifer Granholm, the dean of the House of Representatives, John Dingell, are all prepared to take to the floor and say, are you not going to seat?

And, by the way, Michigan is very reflective of -- Iowa is a great state. New Hampshire is a great state. But they don't have urban areas, doesn't have strong labor presence -- well, Iowa has strong labor presence. New Hampshire doesn't. Let's get a primary response that's more reflective of the country and let everybody hear it.

WOODRUFF: We're going to have to leave it there. I have a feeling we have not heard the end of this one.

Tom Rath, Debbie Dingell, good to see you both. Thank you very much.

Coming up next: presidential leadership in style and substance, the president's role as uniter and divider and how his strategy has changed since his time as Texas governor.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: War is my last choice. But the risk of doing nothing is even a worse option, as far as I'm concerned. I owe it to the American people to secure this country. I will do so. (END VIDEO CLIP)

WOODRUFF: President Bush's determination to disarm Saddam Hussein, even without U.N. backing, has led some to argue the president's style of leadership has changed since he first arrived in Washington.

With me now to talk a little more about this are Ron Brownstein of "The Los Angeles Times" and Mike Allen of "The Washington Post."

Ron Brownstein, to you first.

You've been talking to a number of people in Texas who either worked with George W. Bush or observed him very closely. What are they saying about how his style is any different?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, I think they see a continuity in the way that President Bush is approaching both Congress and the world and, in both cases, a departure from the way he operated in Texas.

In shorthand, in Texas, he was a deal-maker. In Washington, he's much more of a backbreaker. His style as governor was much more to function as a mediator, to try to bring the parties together. He didn't really have a very ideological agenda. And he worked very closely with Democrats in the state legislature, particularly the lieutenant governor, Bob Bullock.

Here in Washington, from the outset, with a couple of exceptions, like the education bill, he's had a more partisan approach. He has had a somewhat more ideological agenda. And he's viewed the point of leverage of president as being not so much as a mediator as someone who stakes out a bold position, draws a bright line, and tries to pull the entire debate in his direction, both domestically and abroad.

WOODRUFF: Mike Allen, do you see him as the backbreaker that Ron describes? And if so, why the change from Texas?

MIKE ALLEN, "THE WASHINGTON POST": Well, Judy, what you've seen with the president is using the war, the advantage that it's given him, as leverage with Congress and the people.

When he came into office, certainly, a lot of Americans had questions about whether he was up to the job, whether he was prepared. President Bush's staff feels like he's answered those with his handling of the war on terrorism so far. Now, certainly, a risk for them would be, international diplomacy doesn't seem to be going so great right now. If that doesn't unfold too well over the next weeks and months, that would call that into question.

He's also using the leverage he has as -- success so far in the war on terrorism -- with Congress. And that's where you see the backbreaking.

WOODRUFF: Ron, how risky a strategy is this for the president?

BROWNSTEIN: I think it's a very risky strategy, both at home and abroad.

It has obvious merit. He has obvious successes from this approach: his tax cut in 2001, which he pushed through largely on a party-line vote originally, was much larger than anybody thought he could get. And he has pushed the U.N. much further than perhaps many expected in terms of reopening, resuming inspections inside Iraq.

The risk, Judy, is that you overreach and that you overly polarize the situation both at home and abroad. We see an enormous gap in public opinion here in assessment of his presidency between Democrats and Republicans, and, for that matter, between moderate and conservative independents. And you see the parallel abroad, where you have this intense resistance in many quarters of public opinion in Europe and elsewhere to what he is doing.

So, the danger is polarization. And is the cost, the price, of the success too great?

WOODRUFF: Mike, you obviously are talking to people at the White House all the time. Do they agree it's risky? And, if so, are they prepared to deal with that?

ALLEN: Well, what they see is that success in the coming war, the likely war in Iraq, is going to make a lot more things possible.

Right now, nobody, almost nobody, Republican or Democrat, likes the tax cut the president has proposed. All we're hearing today is, at best, skeptical and even some criticism from Republicans of his Medicare proposal. But the White House mantra right now is, just wait. They know that there's not a lot of attention on these issues right now. They know that people are focused on other issues.

What they say is, there is life after war. People in the White House are very optimistic that, if there is a war in Iraq, that it will be brief. And the president has put a lot of balls in play as far as a domestic agenda. And they feel like they're going to be able to capitalize on that, if things go well.

WOODRUFF: OK, we're going to have to leave it there.

Mike Allen with "The Washington Post," Ron Brownstein with "The Los Angeles Times," gentlemen, good to see you both.

ALLEN: Thanks, Judy. Thank you

WOODRUFF: We appreciate it.

Some Democrats still have not forgiven Ralph Nader. Is he ready for another White House run? Up next: details on the Draft Nader effort to get the Green Party's nominee back on the campaign trail.

(COMMERCIAL BREAK)

WOODRUFF: Checking the headlines in our "Campaign News Daily": Supporters of 2000 Green Party presidential candidate Ralph Nader say they hope to persuade the consumer advocate to make another White House run. Nader backers have formed a political action committee to support their cause. The draft committee has also opened offices in New York and San Francisco, with plans to set up shop in Washington, New Hampshire and Iowa. But Nader is quoted as saying he knows nothing about the draft effort.

State Democratic officials in Florida are considering a straw poll for presidential candidates late this year. But the timing of the vote could distract the candidates from the early caucuses and primaries in 2004 and would also give an early boost to potential favored-son candidate Bob Graham.

Democrat Carol Moseley Braun has decided to end the confusion about her name. Her conclusion: The hyphen has to go. Moseley Braun started hyphenating her name about 15 years ago. But a spokesman says she's now dropping the hyphen in part to make life easier for headline writers. On second reference, she prefers Ms. Braun instead of Ms. Moseley Braun. As you can see, her campaign Web site is hyphen-free, as are her press releases and her campaign documents. Here's a look at them.

Coming up: the big day in the Big Easy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Happy Mardi Gras!

(END VIDEO CLIP)

WOODRUFF: We'll get some Mardi Gras flavor and, of course, make a political connection to the party.

(COMMERCIAL BREAK)

WOODRUFF: America may be on the brink of war and stuck with a sluggish economy, but that didn't deter thousands of Mardi Gras revelers from hitting the streets of New Orleans today. If you look closely at the Zulu Parade, you might have spotted a familiar face.

Louisiana Senator Mary Landrieu took part in the parade in costume and on horseback. Her decision to join the oldest all-black Mardi Gras crew may be a way of saying thank you, since the African- American vote was so crucial to her reelection.

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

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 March 4, 2003 - 16:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: A global gamble with the showdown with Iraq. Will the president get nine key U.N. votes by next week?

KOFI ANNAN, SECRETARY-GENERAL, UNITED NATIONS: Pressure. I'm not under pressure. (UNINTELLIGIBLE)

ANNOUNCER: Dueling prescriptions for healthcare reform, while Republicans and Democrats trade shots a spinal chord patient cries out.

UNIDENTIFIED FEMALE: No amount of compensation is going to pay me back for what I've lost. I would like to ask any of you who would turn over a limb, or a lung or a life for a lottery ticket?

ANNOUNCER: Mark your calendars again and again. Who's trying to change the presidential primaries schedule now, and what will they get out of it?

Let the good times roll. It's Mardi Gras time. And even some politicians are on parade.

(END VIDEOTAPE)

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

JUDY WOODRUFF, HOST: Thank you for joining us.

The Bush White House is mapping out its end game before a likely war with Iraq. In this "NewsCycle," Pentagon officials say the administration is considering whether to issue an 11th hour ultimatum to Saddam Hussein. They would not discuss exactly what the ultimatum would demand.

The White House still plans to seek a vote next week on a new U.N. Security Council resolution on Iraq. But it has not ruled out withdrawing the resolution, if it's clear that it would be defeated. President Bush made it plain again today that he is prepared to attack no matter what happens at the U.N.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It is his choice to decide whether to listen to the demands of the free world. But no matter what his choice may be, for the sake of peace, for the sake of freedom, for the sake of security of our people, Saddam Hussein will be disarmed.

(END VIDEO CLIP)

WOODRUFF: United Nations Secretary-General Kofi Annan says the Security Council's decision on Iraq will rest on Friday's report by top weapons inspectors. It will also rest on the Bush administration's powers of persuasion.

Here's our senior political analyst Bill Schneider.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Judy, the crucial vote is coming. The White House is lobbying undecided members furiously.

But this is not a big Congressional vote. This is the upcoming vote in the United Nations Security Council on the war resolution. Different arena, same game. Nose counting and horse-trading.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): The United Nations Security Council has 15 members. The White House needs nine votes to pass a resolution authorizing war with Iraq. Four votes are a sure thing: the United States, Britain, Spain and Bulgaria.

Five countries will not support the resolution: France, Russia, China, Germany and Syria. That leaves six undecided members. The U- 6, as they're called. To get to nine, the U.S. needs at least five votes from the U-6.

One of the U-6 is Pakistan, America's new best friend in the war on terrorism. The Pakistani government faces vehement anti-war protests, but it's afraid of an economic backlash if there is a war and its oil supply is cut off.

Two Latin American countries are in the U-6, Mexico and Chile. Washington believes they have linked arms and may vote together. But how?

UNIDENTIFIED MALE: We have never indicated to any side that we support them.

SCHNEIDER: Both democracies face strong public opposition to war. But both economies are linked to the U.S. What does Mexico want? The same thing it wanted when president Vicente Fox visited Washington just before September 11th: an immigration deal that would give legal status to 3.5 million Mexicans working in the U.S.

What does Chile want? A free trade deal with the U.S. Three U-6 countries are African. Angola sells oil to the U.S., and it desperately needs U.S. aid. Ever hear of Guinea or Cameroon? There they are, on the west coast of Africa. Both former French colonies have strong ties to Paris. Uh-oh. But, wait. Washington gives more aid to Guinea than France does. And Britain just upped the ante by $6.2 million. Which way are they going?

MARTIN BELINGA EBOUTOU, CAMEROONIAN AMB. TO U.N.: At this time, we have one only objective -- obtain the disarmament of Iraq.

SCHNEIDER: Even if the U.S. gets nine votes, there's one more hurdle. A veto by France, Russia or China could kill the resolution.

(END VIDEOTAPE)

SCHNEIDER: Well, we have to say that Cameroon and Angola were wrongly labeled on that map, but the U.S. appears to be close to getting those nine votes, and that would be a moral victory.

Then if France does veto alone, the White House has reserved the right to say, so what? But, you know, one official has warned in a wonderfully mixed metaphor that the U.S. -- quote -- "doesn't want to count its chickens before the fat lady sings" -- Judy.

WOODRUFF: That is a mixed metaphor. Bill, thanks very much. And our apologies to Cameroon and Angola. We will get it right the next time.

Saddam Hussein today marked the Islamic New Year by issuing a message that Iraq will be victorious against an aggression. Despite the defiant talk, Iraq continued to scrap its Al-Samoud 2 missiles, as demanded by the U.N. Ninetten of 100 missiles have now been destroyed since Saturday.

Meantime, in Israel, Patriot anti-missile batteries are being deployed to help protect cities from any Iraqi missile attacks during a U.S.-led war.

One of the Senate's strongest opponents of war with Iraq today urged the president to propose plans to invade. Democrat Edward Kennedy says the U.S. should give peace a chance, even if it means keeping U.S. troops in the region for a while.

(BEGIN VIDEO CLIP)

EDWARD KENNEDY (D), MASSACHUSETTS: No one. No one said it would be easy. But as long as inspectors are on the ground and making progress, we must give peace a chance, So that war with Iraq does not distract us from dealing as effectively as possible with the obvious and ongoing threats of terrorism by al Qaeda and the crisis over North Korea's nuclear weapons.

(END VIDEO CLIP)

WOODRUFF: Senator Kennedy spoke to a conference of the United Methodist church.

In California today, almost half of the 120 members of the state legislature announced their opposition to war with Iraq. The 52 Democrats wrote a letter to President Bush urging another Security Council vote, and a declaration of war by the Congress before attacking Iraq.

Well, the Bush administration continues to tout the recent capture of a recent al Qaeda lieutenant as evidence that the U.S. would be able to fight a war with Iraq and the war on terror.

For the first time, the three top officials in charge of homeland security testified side by side before the Congress. They called the arrest of Khalid Shaikh Mohammed a significant blow to al Qaeda.

Let's get more now from our national security correspondent, David Ensor. David, first of all, do officials say whether Mr. Mohammed is talking? And, if he is, what do they say they're getting from him?

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, he's in his fourth day of intensive interrogations, Judy. He's in the hands of the CIA in an undisclosed location overseas. He was captured with a laptop computer, cell phones and note notebooks, what one official called a treasure trove.

Intelligence officials are not commenting, but other government officials are saying that included in those materials are literally hundreds of names. And counter-terrorism officials are working now to try to figure out how many of the names may be actual al Qaeda operatives. They suspect some of those names may be in U.S. cities, including possibly this one.

Sources are also saying that information in the laptops suggests possible terror plots. But officials say it is general in nature. They haven't found any blueprints for attacks. Now, these sources are saying that Khalid Shaikh Mohammed is talking, but he is not providing, to this point at least, any useful information. Sources say after being taken from Pakistan, Mohammed was transferred to a U.S. base in Afghanistan, before being taken to his current secret location.

Now, at the hearing you mentioned a moment ago, the attorney general talked about the urgency with which the government is pursuing the leads that it is getting from that Rawalpindi raid.

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, ATTORNEY GENERAL: I know my phone was ringing at 1:30 in the morning Sunday morning with a request for consultation in regard to our exploitation of this opportunity. Under our new standard of FBI/CIA cooperation and coordination, Khalid Shaikh Mohammed's capture means the FBI can better prevent terrorism and save American lives.

(END VIDEO CLIP)

ENSOR: Attorney General Ashcroft, Judy.

WOODRUFF: David, and what can you tell us about any other al Qaeda prisoners out there?

ENSOR: Well, there's one, one of the other two men seized with Mohammed. He's been identified now by name. And it's a name we already knew, Mustafa Ahmed al-Hawsawi. He's a Saudi citizen.

U.S. officials say he transferred thousands of dollars to Mohammed Atta and the 9/11 hijackers in the U.S. from the United Emirates in Dubai. He also had the power of attorney for one of the hijackers, Fayez Ahmed. And the hijacker sent him back the remaining money just before September 11, on which day, officials say they believe he fled from the UAE to Pakistan.

We also learned today that the son of a blind cleric, you'll remember Sheikh Omar Abdel Rahman, who is in a U.S. prison for conspiring to blow up landmarks, and who was suspected of involvement also in the first World Trade Center bombing, while his son, Mohammed, was seized in a raid in Quetta, Pakistan on February 13th, officials are saying. And he is now also in U.S. hands. Officials are saying, though, that it was not information from him that led them to Khalid Shaikh Mohammed's hideout in Rawalpindi. And they won't say what led them to that operations chief, Judy.

WOODRUFF: All right. A lot of information that seems to be coming to the fore. David, thank you very much.

And one other note in the war against terror: the Justice Department says two Yemeni citizens have been charged with conspiring to provide material support to the al Qaeda and Hamas terrorist groups. The suspects, allegedly, have direct ties to Osaka bin Laden. The U.S. wants them to be extradited from Germany where they were arrested in January.

Now to Capitol Hill here in Washington and a breaking story involving the daughter of Chief Justice William Rehnquist. Our congressional correspondent Jonathan Karl has an exclusive report -- Jon.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Judy, what we know from several sources, both here on Capitol Hill and within the administration, is that Janet Rehnquist will resign this week, possibly as soon as today, as the inspector general for the Department of Health and Human Services.

Rehnquist, as you mentioned, is the daughter of the Chief Justice, and as the IG for this Department of Health and Human Services, a position that she was appointed to back in June of 2001 by President Bush, she oversees a staff of 1,500 people and a budget of $163 million. It is the largest IG office in the federal government. She resigns after facing intense pressure coming from several investigations, including a Congressional investigation into professional allegations of professional misconduct.

Now some of the things she was accused of by Congressional investigators and also facing an investigation from the Government Accounting Office, include that she improperly delayed an audit of the state of Florida's pension system for two-and-a-half months. The reason why this is significant is the allegation is that she delayed this so it would come out after the 2002 election. In other words, after Governor Jeb Bush were to be re-elected.

In fact, the audit was delayed. Now, Rehnquist said in her defense that her decision was based strictly on the merits, that it had nothing to do with politics. And, in fact, the audit probably would not have been done before the election anyway. But what's significant, Judy, is that she delayed that after receiving a call requesting the delay from the chief of staff of Governor Jeb Bush.

Another allegation that she faced was that she forced out, several, more than a dozen, in fact, senior career members of the IG's office, including several deputy inspector generals. She said in her defense that she felt she needed to make some changes as she came in with a new administration. She also faced an allegation that she improperly brought a gun to the office, that she had no such permit to carry a gun to her office but that she did so.

Now, in her defense coming forward already, even though this has not officially been announced, her move to resign, is Tom Scully, who is the administrator for the Medicare program and the Medicaid program. And he tells us, we have a graphic of his quote -- quote -- "Her biggest problem is that her name is Rehnquist. She was an easy target. She had a lot of people in her own agency taking shots at her." That's from Tom Scully, the administrator for Medicaid and Medicare, and also a long-time friend of Janet Rehnquist.

We do hear that she has decided to step down. And I should also mention, Judy, this comes after the Chairman of the Finance Committee, Chuck Grassley, had informed the White House this week that he was about to come out with Max Baucus, the ranking Democrat on that committee, and call for her resignation in light of these allegations and these investigations. And it looks like they no longer need to call for her resignation because she'll be doing it on her own -- Judy.

WOODRUFF: So, John, that was a question I was going to ask you, is what about the reaction there on the Hill. And is there division among Democrats and Republicans over whether she should have stepped down?

KARL: This was very much bipartisan concern on this. Chuck Grassley and his staff very much were leading the way on this, along with Max Baucus and the Democratic side.

WOODRUFF: OK. Jon Karl, very good reporting. Thank you very much.

Well, there's much more ahead on INSIDE POLITICS. The president prescribes his plan to overhaul Medicare and help seniors pay for pills. But Democrats aren't buying it.

Also ahead, where is the president coming from? We'll discuss the political roots of his strategy on Iraq.

And later, get out your magnifying glasses. We will head to the campaign trail to investigate the case of the missing hyphen.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Coming up, the arguments over medical malpractice. Should there be a limit on doctors' liability.

Plus, Mother Nature puts U.S. Airways in a bind. Will the air carrier live up to the deal it made with its passengers?

(COMMERCIAL BREAK)

WOODRUFF: Despite the standoff with Iraq and other international pressures, President Bush today tackled a major item on his agenda here at home: Medicare reform. We get the latest on his plans from CNN White House correspondent Suzanne Malveaux.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): President Bush is taking on one of the most controversial domestic endeavors, overhauling the country's healthcare system for the elderly. Before the American Medical Association, he proposed a plan to reform Medicare by offering seniors the option to enroll in private and managed care programs, believing it can better contain the cost of Medicare.

BUSH: Our vision, our goal is a system in which all Americans have got a good insurance policy, in which all Americans can choose their own doctor, in which seniors and low-income citizens receive the help they need.

MALVEAUX: But critics, mainly Democrats, say it unfairly pushes seniors into managed care programs, which may provide inferior coverage. Last year after Congress failed to pass Medicare reform, including a prescription drug benefit, Mr. Bush vowed to make it the centerpiece of his domestic agenda.

But Republican lawmakers complained that a detailed White House proposal would be rejected by Democrats and doomed for failure, damaging the Republicans in the end. So, in a major concession to the GOP, Mr. Bush did not propose a specific White House bill, instead, leaving the details to the members of Congress.

SUSAN MOLINARI, REPUBLICAN STRATEGIST: The president has challenged Congress to meet him halfway in providing one of the most pressing solutions to senior citizens. And every senator and member of the House of Representatives that is concerned about their re- election will, in fact, do that.

(END VIDEOTAPE)

MALVEAUX: There are 40 million enrolled in Medicare. That number is expected to double in the next 20 years. The big question, who is going to pay for all of this? Well, the White House is suggesting there will be serious compromises, negotiations needed between Democratic and Republican lawmakers.

According to one senior administration official, who put it this way, they just need to hold hands and jump off the cliff together -- Judy.

WOODRUFF: Hmm. That's an interesting analogy. All right, Suzanne. Thanks very much.

MALVEAUX: Sure.

WOODRUFF: Well, members of Congress had a wide range of responses to the president's Medicare proposals. Democratic Senate leader Tom Daschle was unimpressed. A little while ago he said any that Medicare reform must be comprehensive. And he said the president's plan falls short.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD) MINORITY LEADER: Listening to the president talk about Medicare, I'm reminded of that old song, "Is That All There Is?" Bcause if that's all there is, I'm disappointed.

I am concerned that, once again, the president will coerce seniors out of Medicare and into HMOs. They are going to force seniors to give up the doctor they choose for the drugs they need. That is a false choice. That is wrong, and that ought not be the direction we take prescription drug benefits in this country today.

(END VIDEO CLIP)

WOODRUFF: Republicans are also far from unanimous in their support for all aspects of the White House plan. Republican Senator Charles Grassley said today, -- quote -- "The way I see it, we need a universal drug benefit so that seniors who want to stay in traditional Medicare get a prescription drug plan that's just as good as those who chose a new option."

Well, adding to the debate over how best to reform the system, there are three different plans on the table for debate. The president's plan, which comes with a $400-billion price tag. The plan backed by Senator Daschle and his Democratic colleagues, which costs an estimated $600 billion. Plus, a second Democratic plan, this one in the House, which costs $900 billion.

Mr. Bush also took time today to repeat his call for medical malpractice reform. Legislation backed by the president that would limit jury awards is now making its way through Congress this week. Among the highlights, a $250,000 cap on damages for pain and suffering in malpractice lawsuits. Limits would also be placed on punitive damages designed to punish doctors for serious mistakes. So-called economic damages would not be capped. Those are damages that cover out-of-pocket costs such as lost wages and medical expenses.

Well, about the same time the president made his case before the AMA, Congress was holding hearings on the issue. A woman who was injured during a visit to her doctor's office argued against the proposed limits on jury awards.

The House of Representatives, we should say, is expected to begin debating medical malpractice reform starting next week.

So those are the arguments over medical malpractice.

Coming up, Bob Novak and Paul Begala take issue in our "CROSSFIRE."

Plus, the battle over the calendar. We'll take a look at the fight between some states over when they hold their primaries.

(MARKET UPDATE)

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): It's time to check your "IP IQ." Earlier today, President Bush addressed the American Medical Association and outlined his ideas for Medicare reform. When did Congress first pass the Medicare legislation providing health care for the elderly? Was it A: 1963, B: 1965 or C: 1969?

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

(COMMERCIAL BREAK)

WOODRUFF: Questions over President Bush's leadership style. Is his style more of a uniter or a divider? Take a look coming up.

(NEWS UPDATE)

WOODRUFF: Well, joining us now for their take on the Bush administration's medical malpractice and Medicare proposals, Paul Begala and Bob Novak from CNN's "CROSSFIRE."

Hello, gentlemen.

BOB NOVAK, CO-HOST, "CROSSFIRE: Hi, Judy.

PAUL BEGALA, CO-HOST, "CROSSFIRE: Hi, Judy.

WOODRUFF: President Bush is pushing for a $250,000 cap on so- called pain and suffering damages in medical malpractice cases. Paul, is this the right way to go here?

BEGALA: Well, no. It's fitting that at least the president gave the speech to a Washington special interest group, because it's designed for special interests. The notion, first off, that a man who became president because he filed a lawsuit, wants to limit any consumer's right to file a lawsuit is preposterous.

But who is he to say that somebody's pain and suffering is only worth $250,000? He also wants to cap punitive damages, that is the punishment that we can give to $250,000. I just think it's bad policy. But I, also, frankly, think it's bad politics because it makes it look like he is sucking up to a special interest group. WOODRUFF: Bob?

NOVAK: Well, just at the risk of being accurate, the $250,000, of course, is over and above what they pay for the medical expenses. How much is pain and suffering worth to anybody?

But that isn't what this is about. This is about the trial lawyers who are the biggest cash cow for the Democratic Party. And anything the trial lawyers want, they give so much money to all the Democrats. They say, yes sir. What's wonderful is they are even trying to get one of their own, John Edwards of North Carolina, to be elected president of the United States.

WOODRUFF: So, is it only about the trial lawyers Paul?

BEGALA: Well, no, of course, it's not.

I mean, Democrats are supported by trial lawyers. But why not just trust people? This is a president who ran -- he actually didn't get as many votes as his opponent. But he ran around saying, I trust people. And he doesn't trust people. What he does is he wants to impose his own will on every jury in this country, and to try say that, you know, $250,000 is a whole lot of money. But not for the kind of pain and suffering that we have seen families go through in famous cases like this poor, Jesica Santillan who died recently.

And, by the way, $250,000 is what we pay President Bush for just eight months work. So who is he to say that somebody's suffering is only worth eight months of his pay?

WOODRUFF: Bob?

NOVAK: Judy, what this is doing, these juries are just driving the doctors out of the medical business. I think doctors are more important than lawyers anyway.

I was the foreman of a jury in a medical malpractice case. And I killed the case. I filibustered the whole jury. It started out with the vote 9-3 against me. But most juries don't have public spirited foremen like me. If they did, we'd be OK with our ceiling.

WOODRUFF: You mean, they let you on a jury? No, I'm just...

(LAUGHTER)

NOVAK: The judge was a member of the Maryland Terrapin Club. And he left me on.

WOODRUFF: All right, to another serious subject, and that is Medicare. The president is proposing to do something like putting millions of dollars in Medicare to get people to move to managed care plans, to get the elderly to move to managed care in order to get their prescription drug prices covered.

Let me just quickly quote to you what the influential House Republican, Billy Tauzin, had to say. He said: "You couldn't move my own mother out of Medicare with a bulldozer. She trusts it, believes in it. It's served her well."

Is the president doing the right thing here, Paul?

BEGALA: No. Again, politically, it's dead on arrival. I saw your report earlier that Senator Grassley, the Republican chairman of the Senate Finance Committee, doesn't like this either.

If the president wants to force seniors out of Medicare and into corporate HMOs, he's got a good plan, because that's what he wants to do. The problem is, seniors don't want it. The American people don't want it. This would end Medicare as we know it and force seniors into corporate-run HMOs. Or, get this, he gives them a prescription drug benefit -- if you want regular Medicare, you get a benefit with a $4,000 deductible. That's not a choice.

WOODRUFF: Bob, quickly.

NOVAK: Judy, with all due respect, it isn't just the HMOs or nothing. There are options.

The Medicare program, the patron saint of the Medicare program is Joseph Stalin, because he ruled that you had to have a set price. We have the market system in this country and that's where we ought to go.

WOODRUFF: You are on a roll today, Bob Novak. That's all I can say.

(LAUGHTER)

WOODRUFF: Bob Novak, Paul Begala, thank you both. We'll see you on "CROSSFIRE" tonight at 7:00.

BEGALA: Thanks, Judy.

WOODRUFF: Well, in the crowded Democratic presidential race, a scorecard would be nice, but a calendar is essential. Up next, we'll discuss why Michigan Democrats are trying to change their caucus date and, in turn, the campaign landscape.

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): Time again to check your "I.P. I.Q.": Earlier today, President Bush addressed the American Medical Association and outlined his ideas for Medicare reform. When did Congress pass the Medicare legislation providing health care for the elderly? Was it, A, 1963, B, 1965, or C, 1969?

The correct answer is B. Medicare was passed into law on July 30, 1965. At the bill-signing ceremony, President Lyndon Johnson enrolled former president Harry Truman as the first Medicare beneficiary and presented him with the first Medicare card.

(END VIDEOTAPE)

(COMMERCIAL BREAK) WOODRUFF: Washington, D.C.'s City Council today approved, by voice vote, to move up the city's presidential primary to January 13, before the traditional kickoff contest in Iowa and New Hampshire. Mayor Anthony Williams says he will sign the measure. The Democratic National Committee is expected to penalize the district, because the move violates the DNC's rules. But the nation's capital isn't the only place trying to get a jump on the primary season.

(BEGIN VIDEOTAPE)

SEN. JOSEPH LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: Thank you very much for that warm New Hampshire welcome.

WOODRUFF (voice-over): In primary politics, size matters a lot less than where you fall on the calendar, which is why relatively insignificant states such as Iowa and New Hampshire are the center of the political universe, while California, with its late primary, has largely been ignored. But now some big states are threatening to muscle in on the early action.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: I think it's not a bad idea to not have it always be the same two states that have a lock on the early, because it gives a disproportionate emphasis on those two states.

WOODRUFF: Michigan's Democratic Party wants to hold its contest on the same day as New Hampshire, even if it gets docked some delegates under national party rules designed to protect the existing calendar. The top presidential candidates say they support New Hampshire's first-in-the-nation status, but have not ruled out campaigning in Michigan -- at stake, clout and money.

Being first means that your state gets a huge amount of attention, from politicians, who treat these early states like second homes, and the hundreds of reporters who follow them around. And it is a major economic windfall, bringing in tens of millions of dollars in hotel bookings, restaurant bills and political ad buys.

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WOODRUFF: And with us now: Debbie Dingell of Michigan, a member of the Democratic National Committee -- she also happens to be the wife of Congressman John Dingell -- and Tom Rath of New Hampshire, a GOP strategist and a member of the Republican National Committee.

Debbie Dingell, to you first. The DNC rules are pretty clear. Everybody on the committee voted last year. The vote was Iowa, New Hampshire go first. You're a member of the DNC. This is the way it's been. Why challenge it?

DEBBIE DINGELL, MICHIGAN DNC MEMBER: Well, we are challenging it because many people may not know this, but, actually, it was Dingell vs. Levin for 12 years.

And last time, Michigan very strongly tried to get the rules changed. I argued, we shouldn't change the rules in the middle of a cycle. We did vote unanimously in Michigan a year ago to try to change the rules and weren't able to even get a hearing. Now we are saying -- and let me make it clear, we still have to file our official plan to move the date.

But New Hampshire and Iowa have too disproportionate an impact on the process. We need to have a process that's more reflective of Democrats in this country. And it takes a state that's willing to stand up and say, you got to change the process. You got to have something that's going to look at how the process can be more reflective.

Tom Rath, what about this argument that New Hampshire, where you live -- and you're a Republican, obviously -- but her point is, it's not representative. And, after all, New Hampshire only sends Republicans to Congress. You got a Republican governor. You voted Republican in 2000. Why shouldn't the Democrats do this?

TOM RATH, NEW HAMPSHIRE RNC MEMBER: Now, Judy, are you asking me to defend the New Hampshire Democrats? I'll be glad to.

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RATH: Because people with such Democratic backgrounds as John F. Kennedy, Lyndon Johnson, Mike Dukakis, right through Bill Clinton have won this primary and they've done just fine as Democratic standard- bearers. In fact, it's hard to find a person who has been elected president the United States as a Democrat who hasn't done well in New Hampshire.

So, I don't think that there's much political history to support that claim. And what New Hampshire really does is, it thins the field and lets other states then decide it. But what New Hampshire does and what is really unique about it is, it forces the person who would be president to campaign not just through the television sets, not just through slick advertising, but sit in people's homes and deal one on one with candidates.

And they are already doing that. And that's why we have 75 percent to 78 percent of all eligible voters in New Hampshire vote in this plebiscite every four years. No other state in the country can match that. And a caucus doesn't replace that kind of widespread involvement in the process.

WOODRUFF: All right, Debbie Dingell, what about that, that it's one on one?

DINGELL: Well, if you have a process that allows that one on one, you need to go to a regional process. I'm saying you need to take a look at the process.

You can tell me that New Hampshire did this, but the fact of the matter is that 25 percent out of the last eight elections, New Hampshire hasn't voted Democratic. And, by the way, I hear that Republicans have already stated they are not going to let New Hampshire and Iowa dominate this process this time. And the fact of the matter is, is that Democrats are not the party of privilege and the party of privilege isn't letting them. So...

WOODRUFF: Tom Rath?

RATH: Well, I don't know what Debbie's heard, but our national chairman, Marc Racicot, was here on Thursday and said that New Hampshire will always have its traditional role. He was strongly supportive of it. This White House has been very strongly supportive of New Hampshire. Republicans aren't going to change and Republicans supported it the last time.

I think what's really important is not which state goes first, but whether the process that is employed gets a better president. And a president who has been one on one, with real-live people and forced to defend themselves and understand that the decisions they make affect real-live people really is the right way to go. And New Hampshire gives you that. And it would be a shame to lose it.

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WOODRUFF: Debbie Dingell -- I have to -- I'm sorry. I have to ask you, because we're running out of time, what about the fact that the Democratic Party chair, Terry McAuliffe, has said Michigan is going to lose delegates being seated at the national convention if it tries to move up?

DINGELL: Well, we're going to take it all the way to the floor of the convention and say to people, don't seat us. Michigan is an important state in this process. And the leadership, Senator Carl Levin, the new governor our state, Jennifer Granholm, the dean of the House of Representatives, John Dingell, are all prepared to take to the floor and say, are you not going to seat?

And, by the way, Michigan is very reflective of -- Iowa is a great state. New Hampshire is a great state. But they don't have urban areas, doesn't have strong labor presence -- well, Iowa has strong labor presence. New Hampshire doesn't. Let's get a primary response that's more reflective of the country and let everybody hear it.

WOODRUFF: We're going to have to leave it there. I have a feeling we have not heard the end of this one.

Tom Rath, Debbie Dingell, good to see you both. Thank you very much.

Coming up next: presidential leadership in style and substance, the president's role as uniter and divider and how his strategy has changed since his time as Texas governor.

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BUSH: War is my last choice. But the risk of doing nothing is even a worse option, as far as I'm concerned. I owe it to the American people to secure this country. I will do so. (END VIDEO CLIP)

WOODRUFF: President Bush's determination to disarm Saddam Hussein, even without U.N. backing, has led some to argue the president's style of leadership has changed since he first arrived in Washington.

With me now to talk a little more about this are Ron Brownstein of "The Los Angeles Times" and Mike Allen of "The Washington Post."

Ron Brownstein, to you first.

You've been talking to a number of people in Texas who either worked with George W. Bush or observed him very closely. What are they saying about how his style is any different?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, I think they see a continuity in the way that President Bush is approaching both Congress and the world and, in both cases, a departure from the way he operated in Texas.

In shorthand, in Texas, he was a deal-maker. In Washington, he's much more of a backbreaker. His style as governor was much more to function as a mediator, to try to bring the parties together. He didn't really have a very ideological agenda. And he worked very closely with Democrats in the state legislature, particularly the lieutenant governor, Bob Bullock.

Here in Washington, from the outset, with a couple of exceptions, like the education bill, he's had a more partisan approach. He has had a somewhat more ideological agenda. And he's viewed the point of leverage of president as being not so much as a mediator as someone who stakes out a bold position, draws a bright line, and tries to pull the entire debate in his direction, both domestically and abroad.

WOODRUFF: Mike Allen, do you see him as the backbreaker that Ron describes? And if so, why the change from Texas?

MIKE ALLEN, "THE WASHINGTON POST": Well, Judy, what you've seen with the president is using the war, the advantage that it's given him, as leverage with Congress and the people.

When he came into office, certainly, a lot of Americans had questions about whether he was up to the job, whether he was prepared. President Bush's staff feels like he's answered those with his handling of the war on terrorism so far. Now, certainly, a risk for them would be, international diplomacy doesn't seem to be going so great right now. If that doesn't unfold too well over the next weeks and months, that would call that into question.

He's also using the leverage he has as -- success so far in the war on terrorism -- with Congress. And that's where you see the backbreaking.

WOODRUFF: Ron, how risky a strategy is this for the president?

BROWNSTEIN: I think it's a very risky strategy, both at home and abroad.

It has obvious merit. He has obvious successes from this approach: his tax cut in 2001, which he pushed through largely on a party-line vote originally, was much larger than anybody thought he could get. And he has pushed the U.N. much further than perhaps many expected in terms of reopening, resuming inspections inside Iraq.

The risk, Judy, is that you overreach and that you overly polarize the situation both at home and abroad. We see an enormous gap in public opinion here in assessment of his presidency between Democrats and Republicans, and, for that matter, between moderate and conservative independents. And you see the parallel abroad, where you have this intense resistance in many quarters of public opinion in Europe and elsewhere to what he is doing.

So, the danger is polarization. And is the cost, the price, of the success too great?

WOODRUFF: Mike, you obviously are talking to people at the White House all the time. Do they agree it's risky? And, if so, are they prepared to deal with that?

ALLEN: Well, what they see is that success in the coming war, the likely war in Iraq, is going to make a lot more things possible.

Right now, nobody, almost nobody, Republican or Democrat, likes the tax cut the president has proposed. All we're hearing today is, at best, skeptical and even some criticism from Republicans of his Medicare proposal. But the White House mantra right now is, just wait. They know that there's not a lot of attention on these issues right now. They know that people are focused on other issues.

What they say is, there is life after war. People in the White House are very optimistic that, if there is a war in Iraq, that it will be brief. And the president has put a lot of balls in play as far as a domestic agenda. And they feel like they're going to be able to capitalize on that, if things go well.

WOODRUFF: OK, we're going to have to leave it there.

Mike Allen with "The Washington Post," Ron Brownstein with "The Los Angeles Times," gentlemen, good to see you both.

ALLEN: Thanks, Judy. Thank you

WOODRUFF: We appreciate it.

Some Democrats still have not forgiven Ralph Nader. Is he ready for another White House run? Up next: details on the Draft Nader effort to get the Green Party's nominee back on the campaign trail.

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WOODRUFF: Checking the headlines in our "Campaign News Daily": Supporters of 2000 Green Party presidential candidate Ralph Nader say they hope to persuade the consumer advocate to make another White House run. Nader backers have formed a political action committee to support their cause. The draft committee has also opened offices in New York and San Francisco, with plans to set up shop in Washington, New Hampshire and Iowa. But Nader is quoted as saying he knows nothing about the draft effort.

State Democratic officials in Florida are considering a straw poll for presidential candidates late this year. But the timing of the vote could distract the candidates from the early caucuses and primaries in 2004 and would also give an early boost to potential favored-son candidate Bob Graham.

Democrat Carol Moseley Braun has decided to end the confusion about her name. Her conclusion: The hyphen has to go. Moseley Braun started hyphenating her name about 15 years ago. But a spokesman says she's now dropping the hyphen in part to make life easier for headline writers. On second reference, she prefers Ms. Braun instead of Ms. Moseley Braun. As you can see, her campaign Web site is hyphen-free, as are her press releases and her campaign documents. Here's a look at them.

Coming up: the big day in the Big Easy.

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UNIDENTIFIED MALE: Happy Mardi Gras!

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WOODRUFF: We'll get some Mardi Gras flavor and, of course, make a political connection to the party.

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WOODRUFF: America may be on the brink of war and stuck with a sluggish economy, but that didn't deter thousands of Mardi Gras revelers from hitting the streets of New Orleans today. If you look closely at the Zulu Parade, you might have spotted a familiar face.

Louisiana Senator Mary Landrieu took part in the parade in costume and on horseback. Her decision to join the oldest all-black Mardi Gras crew may be a way of saying thank you, since the African- American vote was so crucial to her reelection.

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

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