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Inside Politics

Bush Travels to Asia; Senate Republicans Break Ranks on Loans to Iraq

Aired October 17, 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: He's reaching out to Japan, but the president also has some repair work to do back in Washington after Senate Republicans broke ranks on loans to Iraq.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: It's very hard for me to go home and explain how you have to give $20 billion to a country that's sitting on $1 trillion worth of oil.

ANNOUNCER: Laughing all the way to the bank. Money matters a lot in the "Political Play of the Week."

BEN AFFLECK, ACTOR: Does this seem like the decline of the Roman Empire?

ANNOUNCER: No, he's not talking about his up and down relationship with J. Lo. We'll check in on Hollywood hunks getting political.

Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. Well President Bush is another step closer today to getting the $87 billion that he wants for the missions in Iraq and Afghanistan. The House approved the spending measure just about an hour ago and the Senate is expected to follow suit soon. But its version of the bill is giving the White House headaches.

Let's check in with our Congressional correspondent Jonathan Karl. It's been both good news and bad news for the president today.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: That's right, Judy. The good news in the House, that vote was overwhelming. It was 303 in favor, only 125 against the president's request for Iraq and Afghanistan. Although there were the majority of Democrats over very interestingly voted against it. A rather overwhelming majority of Democrats voted against the bill.

A tough vote when you consider this is not only about rebuilding Iraq, $67 billion was for the safety and protection and maintenance of the troops on the ground in Afghanistan and in the most importantly in Iraq. So they voted against that, a tough vote for Democrats. The bad news came in the Senate late last night. They included the loan provision making $10 billion of this a loan to Iraq that would have to be repaid. The president tried mightily to defeat that. We've been reporting on that all week, sending the vice president up here, sending the secretary of state up here, personally lobbying Republicans this would hurt his efforts in Afghanistan and Iraq.

Despite that, eight Republicans crossed lines and voted against the president, defy the president on this. That clearly bad news for the White House.

No there was one other important thing to point out on the Senate bill. They'll finally pass that shortly. They did trim $1.855 billion from the bill. Some of those controversial provisions, like the money to rebuild the Iraqi ZIP codes and various construction projects that some called frivolous. That has been trimmed out on a voice vote. That means if you're keeping score at home, Judy, it's a $85.1 billion bill now. Not $87 billion. Still quite a bit of money, though.

WOODRUFF: Sure is. Jon, you've got two different bills, presumably what's coming out of the Senate, going to be voted on shortly. Something different from what's coming out of the House. What's going to come out of conference committee?

KARL: The White House is confident they'll be able to get rid of the loan provision in conference. The House defeated it. The Senate passed it. They'll need to work out the differences. This is going to be an all-Republican conference to negotiate those differences. The White House will be a major player. They're going to put a full- court press in there to get rid of the entirely. If not, you may see some kind of compromise. But right now, the White House would like to see this completely taken out.

WOODRUFF: Jon Karl, thanks very much.

A number of Senate Republicans face difficult choices when they voted on the Iraq loan amendment last night. I spoke a while ago with two of them. Lindsay Graham of South Carolina who voted for the loan measure. Kay Bailey Hutchison of Texas voted against. I asked her why, after actively supporting the loan idea, she ended up voting no on it?

(BEGIN VIDEOTAPE)

SEN. KAY BAILEY HUTCHISON (R), TEXAS: I do think that loans were the right answer, but when I talked to the president and he talked about what he was trying to do with the other countries, I just felt that I couldn't put myself above him when he was having to deal with the issues with the other countries. Even though I do think that the loan component is the right way to go and I'm hoping that in the future, that will be a part of any kind of package.

WOODRUFF: What issue with other countries are you referring to?

HUTCHISON: Getting other countries to come in and help the United States defray some of the cost of this operation.

WOODRUFF: How do you get around that argument, Senator Graham?

GRAHAM: Well, very easily. We're putting $10 billion on the table in the form of grants. Other countries have about $135 billion worth of debt owed to -- Saddam Hussein was lent money, about $135 billion.

I think the waiver provision in the bill, that we'd waiver $10 million in loans if other countries would help, would be incentive to get other countries to help.

I had a domestic outlook on it a little bit more than Kay. This has been more expensive than we thought. Its cost more lives than we hoped it would cost. The dying is not over. The money is not yet all spent. If the president asked me tomorrow to spend more money in Iraq, I would. If anybody said we should get out tomorrow, I'd say no, that would be a disaster.

But I think it's unfair to ask the American people to do everything without some help from the Iraqi people themselves. They're sitting on a sea of oil.

WOODRUFF: Senator Hutchison, what do you say to that?

HUTCHISON: Well, first of all, I do think other countries need to step up to the plate and help America. We are doing this whole fight in the war on terrorism for them, and only Great Britain has really come to our side and done their fair share. I don't think that's right. So Lindsay's right on that point.

I do think that the president is the one negotiating with the other countries. I have to say that he probably knows better than I do how he can get other countries to step up to the plate and I just felt that I defer to his judgment when he was the one sitting at the table. I think the point is the right one.

WOODRUFF: Senator Graham, you wouldn't acknowledge that, that the president knows better what these other countries need to hear?

GRAHAM: I have a tremendous respect for the president. Kay is right in that regard.

I've come to the conclusion that we've got a domestic problem in Iraq that is going to overwhelm any international problem. The only way we'll ever lose this war, if the American people turn on is. And I think it would be very sad and ironic if $20 billion is given to the Iraqi people to build up infrastructure that generates revenue and that revenue is used to pay off France, Germany, Russia, Saudi Arabia for debts accumulated during Saddam Hussein.

In other words, the people who kept Saddam Hussein in power get paid and the people that liberated the country, fought and died, don't get paid. I don't think the American people would like that very much.

WOODRUFF: Why doesn't that bother you, Senator Hutchison?

HUTCHISON: It does. I don't consider the debt to Saddam Hussein to be valid debt at all. That's one of the reasons it's so expensive is because those countries gave money to Saddam Hussein so they could build up their defense capabilities.

Saddam Hussein didn't spend that money on his people. He didn't give the medicine he got for oil revenue to his people. He let them starve. And so I don't consider that valid debt and I think we should make a first priority that that debt be for given.

GRAHAM: And if it is under the bill, we'll waive our loan.

HUTCHISON: But you can't say for sure that that will happen. And they, you know, the question of a loan versus a grant comes to the front.

GRAHAM: Right.

WOODRUFF: Go ahead, Senator Graham.

GRAHAM: I understand very much what Kay is saying. And I'm very respectful of the president's position and admire him and have supported him.

But one thing that was said that I do disagree with. If we make part of it a loan, that would legitimize the argument we went to Iraq to take their oil. I reject that. We did not go to Iraq to take anybody's oil. We've lost almost 350 troops. We've spent $70 billion. We sacrificed greatly.

Nobody in their right mind with a do that to make a $10 billion loan. The people saying that are fanatics and hate us. I don't want to make policy based on what a bunch of crazy people say.

(END VIDEOTAPE)

WOODRUFF: Senator Lindsay Graham and Senator Kay Bailey Hutchison. I talked to them a short time ago.

We're rolling in cash questions on INSIDE POLITICS. Next, more on the politics of $87 billion package for Iraq. Bay Buchanan and Donna Brazile offer their two cents.

Later...

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: I'm Bill Schneider. Money can't buy happiness, but it sure can buy the "Political Play of the Week."

(COMMERCIAL BREAK)

WOODRUFF: Still ahead, two more Hollywood celebrities weigh in on the race for the White House and the California recall. Who are they? We'll tell you when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

WOODRUFF: With us now, former Gore campaign manager Donna Brazile and Bay Buchanan, president of American Cause.

Bay, I'm going to start with you. The president lost in the Senate last night -- this vote on whether it was going to be a loan entirely -- or a grant entirely or some of it be a loan.

How big a deal is this?

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: You know, Judy, this issue -- first of all, of course, he got his $87 million from both House and Senate. Looks like that's going to go through. But this $10 million being a part of a loan -- it is an issue. I believe that the American people are concerned. I think this $87 billion actually has hit a chord with the American people, where they're -- they see their jobs having gone overseas, now they're seeing their money going overseas. They're somewhat concerned.

If the president can turn the Iraqi policy around where he shows success in the next six or eight months, I think it's not an issue in this election. But if there's troubles out there and the job situation is still as poor as it is right now, I think the president should recognize there's a real discontent in this country that he's going to have to address.

DONNA BRAZILE, FMR. GORE CAMPAIGN MANAGER: I agree with Bay. I think this is a major issue. This woke the American people up, once again, about the deficit and all the things we're having to put aside in terms of fixing our schools, you know, giving seniors a prescription drug benefit because we don't have the money. And yet, we have money to help the Iraqis with their hospitalization costs and their schools.

So at some point, you know, someone should share with the American people the actual cost, the real plan. Perhaps more than supporting our troops, we'll have a plan in place to bring our troops home.

BUCHANAN: I think that there's no question the American people support the president on Iraq and do believe that we have an obligation to help that country get on its feet. But I think the -- and as generous a people as we are, we also expect that the president, the administration takes care of people here in this country. And I think that's where the disconnect is coming. They see a lot of attention and concern for Iraq. They're supportive of that.

But then they're saying, Listen, our jobs are going overseas. We're losing more and more of them, and the president doesn't seem to be addressing that in a way that he is being successful, at least.

BRAZILE: I support the loan. I just hope we don't give a coupon book to anyone.

BUCHANAN: I support the loan, and so do conservatives. But of course, they were called upon by the president to walk away from that. And I don't think the loan, plus or minus is going to make the big difference. I think the big difference, clearly, is where the economy is in six or seven months.

You know, there's a revolt...

(CROSSTALK)

BUCHANAN: Absolutely. And there was a revolt out there in California. And I don't know that the White House realizes it's an anti-incumbent, you know, revolt and they could pay the price if they don't address these issue.

WOODRUFF: You just changed the subject for me. I do want to ask you about Arnold Schwarzenegger.

He had said just a few days ago he was going to go to the president and ask for a lot, expected a lot of help from Washington. Donna, what happened? They met and Mr. Schwarzenegger said, Well, we didn't talk about it.

BRAZILE: Well, the Terminator met the Eraser and I'm sure what happened was the president said, Look, I'm sorry, but I don't have the funds. If he bails out California, what about the other 49 states and the District of Columbia that's seeking federal help and federal assistance and the mayors and everyone else? So I think he's right to tell Arnold, Look, you ran as someone who can terminate the deficit, you can bring back jobs, so you have to work your little magic right now.

BUCHANAN: You know, Arnold is interesting. He, I think, has also misread what happened out there. I think he thinks the people voted for Arnold Schwarzenegger. They voted to get rid of the Democratic policies. They -- this administration, Davis and his whole group, get the heck out of there. We want somebody new that can give us -- turn things around. And he's -- he's acting now as if he's going to govern like a Democrat. And if he does that, he also will be out of there and he will not be able to help the president, a she should be able to, 12 months from now.

WOODRUFF: Why do you say that? You say he's acting like he's going to govern like a Democrat.

(CROSSTALK)

BUCHANAN: Well, he's out on there on issue -- first of all, the first thing he says, I'm going to get the federal government to bail us out. I mean, a devout (ph) conservative says, Let's look at cut here and bringing in more income. Cutting taxes -- and that's where he's talking about -- that's good. But he's got to slice that doggone budget out there and he's got to slice regulation. He's got a problem with immigration. Instead of continuing to cater to illegals, he's got to stop the social services going to them. And he's looking like he wants to...

BRAZILE: You know what?

BUCHANAN: ...help the illegals and add to education and get the federal government to bail us out.

(CROSSTALK)

BRAZILE: Arnold is going to be calling Gray Davis every night and saying, Why did you let me take this job from you? I don't know what I'm doing. Because it's tough to balance a budget. It's tough to erase a deficit and at the same time promise to keep the schools going and....

BUCHANAN: Absolutely.

WOODRUFF: But they say they're going to go through it. They've got a woman out there now who was in Florida. She's going through the state spending line by line. They're going to come up with four, five, six billion dollars worth of waste...

(CROSSTALK)

BUCHANAN: Only about another 32 to go, I think.

BRAZILE: And then he wants to cut the car tax and that's going to add another four or five billion dollars back.

BUCHANAN: He'll be successful if, when he gets the information from that lady and says, Fine, I know there's going to be a lot of unhappy people, but we're cutting. And by the way, there's some other places we're going to have to cut. And I'm sorry, it's painful.

But he looks to me like the kind of guy that likes to be liked. And if you want to be liked and then go to someone else to bail us out, he's to make tough decisions, which is going to cause a lot of people on his little advisory team to start criticizing him. And he's going to have to accept that.

BRAZILE: Well, he can always go back and do "Kindergarten Cop," the sequel.

WOODRUFF: You got the last word.

BRAZILE: All right. Thank you.

WOODRUFF: Donna Brazile, Bay, great to see you both this Friday.

BUCHANAN: Good to be with you.

WOODRUFF: Thanks very much.

And now, we want to check the headlines in our "Campaign News Daily."

Unions supporting Democratic presidential hopeful Dick Gephardt are joining forces. About 20 labor groups are creating the Alliance for Economic Justice to pool their resources in support of Gephardt. The groups decided to get together after the AFL decided to hold off on endorsing a specific candidate. Meanwhile, Congressman Gephardt has launched a new TV ad in Iowa, vowing to protect American workers. (BEGIN VIDEO CLIP, AD)

UNIDENTIFIED MALE: After NAFTA, I lost two good jobs. They closed the plants and the jobs went to Mexico.

UNIDENTIFIED FEMALE: We've had to move three times, uproot our family, and now we're worried we'll have to do it again.

NARRATOR: Democratic leader Dick Gephardt led the fight against NAFTA. As president, Dick Gephardt will fight for American jobs. He knows...

(END VIDEO CLIP)

WOODRUFF: And there's a new rule in campaign fund-raising, thanks to Democratic hopeful Howard Dean. Some might say it's not how much cash he raised, but how you raise your cash.

Bill Schneider joins me next to explain.

(COMMERCIAL BREAK)

WOODRUFF: In presidential politics, money talks. This week, our senior political analyst, Bill Schneider, has been listening closely -- Bill.

SCHNEIDER: Judy, now that the third quarter campaign fund- raising results are in, the "Political Play of the Week" does not go to the candidate who raised the most money, that would be George W. Bush. It goes to the individual doing the most to change the system.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Who's winning the money chase? Third quarter fund-raising totals came in this week and the top Democrat is -- the envelope please -- Howard Dean, with nearly $15 million. That's close to half of the $34 million raised by all nine Democrats together. What's interesting is how Dean raised his money.

About 169,000 people gave to Dean. Their average contribution was about $74.

JOE TRIPPI, DEAN CAMPAIGN MANAGER: We have so many supporters across the country that are giving small amounts. And most of them have the ability to give to us again or to find friends or co-workers or family to give to us in the future.

SCHNEIDER: Joe Trippi, Dean's campaign manager is proud of the fact that each quarter this year the average size of Dean's campaign contributions has been getting smaller, while the total has been going up. It adds up to more money than any Democrat has ever raised in a single quarter, even President Clinton in 1996.

How do they do it? The Internet. Dean raised $7.4 million on the Internet this quarter, about half his total. LARRY NOBEL, CENTER FOR RESPONSIVE POLITICS: It's apparently bringing in people who haven't before contributed and haven't before been connected with campaigns. And so in a sense, it's aimed perfectly at a new generation of potential voters and a new generation of contributors.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: This campaign's about empowering people.

SCHNEIDER: Through the Internet.

TRIPPI: There's only one medium in the world that allows two million Americans to contribute $100 in one day if they decide to do it. That's the Internet.

SCHNEIDER: Al Gore may have invented the Internet, but Joe Trippi figured out how to make it pay off politically. For that he gets the "Political Play of the Week."

(END VIDEOTAPE)

SCHNEIDER: Dean could become the first Democrat to opt out of the public funding system for the primaries. And that would enable him to spend competitively with President Bush, who has already indicated that he' would opt out of public funding. Judy, this is the law of unintended consequences at work. The Internet could kill off public funding.

WOODRUFF: Boy, would that be not what the folks who thought it all up expected. OK.

SCHNEIDER: Exactly right.

WOODRUFF: Bill Schneider, thank you very much, in Virginia Beach today.

Ben Affleck has been on virtually every magazine and news program around. Next, he weighs in on politics and shares his thoughts on the next governor of California.

(COMMERCIAL BREAK)

WOODRUFF: You might think being a hot young actor with a famously beautiful girlfriend might be enough. But a couple of Hollywood heartthrobs can't seem to resist the allure of politics. When he's not busy dating Demi Moore or appearing in films like "Dude, where's my car?", Ashton Kutcher apparently has been sizing up the candidates. He decided to endorse Democrat John Edwards and will attend an Edwards fund raiser later this month.

Meantime, J. Lo's on-again, off-again guy, Ben Affleck, has had a few not so nice things to say about the California governor-elect.

(BEGIN VIDEO CLIP)

AFFLECK: Here we are now at the dawn of Schwarzenegger era in American politics. Does this seem like the decline of the Roman Empire? Like and then a beast with eyes of fire will rise from the sea and the Schwarzenegger will govern!

(LAUGHTER)

AFFLECK: What's next? I hope I don't get a speeding ticket in California now. And I may need a pardon one day.

(END VIDEO CLIP)

WOODRUFF: Ben Affleck.

That's it for INSIDE POLITICS. Have a great weekend. I'm Judy Woodruff. "CROSSFIRE" starts right now.

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





Loans to Iraq>


Aired October 17, 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: He's reaching out to Japan, but the president also has some repair work to do back in Washington after Senate Republicans broke ranks on loans to Iraq.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: It's very hard for me to go home and explain how you have to give $20 billion to a country that's sitting on $1 trillion worth of oil.

ANNOUNCER: Laughing all the way to the bank. Money matters a lot in the "Political Play of the Week."

BEN AFFLECK, ACTOR: Does this seem like the decline of the Roman Empire?

ANNOUNCER: No, he's not talking about his up and down relationship with J. Lo. We'll check in on Hollywood hunks getting political.

Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. Well President Bush is another step closer today to getting the $87 billion that he wants for the missions in Iraq and Afghanistan. The House approved the spending measure just about an hour ago and the Senate is expected to follow suit soon. But its version of the bill is giving the White House headaches.

Let's check in with our Congressional correspondent Jonathan Karl. It's been both good news and bad news for the president today.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: That's right, Judy. The good news in the House, that vote was overwhelming. It was 303 in favor, only 125 against the president's request for Iraq and Afghanistan. Although there were the majority of Democrats over very interestingly voted against it. A rather overwhelming majority of Democrats voted against the bill.

A tough vote when you consider this is not only about rebuilding Iraq, $67 billion was for the safety and protection and maintenance of the troops on the ground in Afghanistan and in the most importantly in Iraq. So they voted against that, a tough vote for Democrats. The bad news came in the Senate late last night. They included the loan provision making $10 billion of this a loan to Iraq that would have to be repaid. The president tried mightily to defeat that. We've been reporting on that all week, sending the vice president up here, sending the secretary of state up here, personally lobbying Republicans this would hurt his efforts in Afghanistan and Iraq.

Despite that, eight Republicans crossed lines and voted against the president, defy the president on this. That clearly bad news for the White House.

No there was one other important thing to point out on the Senate bill. They'll finally pass that shortly. They did trim $1.855 billion from the bill. Some of those controversial provisions, like the money to rebuild the Iraqi ZIP codes and various construction projects that some called frivolous. That has been trimmed out on a voice vote. That means if you're keeping score at home, Judy, it's a $85.1 billion bill now. Not $87 billion. Still quite a bit of money, though.

WOODRUFF: Sure is. Jon, you've got two different bills, presumably what's coming out of the Senate, going to be voted on shortly. Something different from what's coming out of the House. What's going to come out of conference committee?

KARL: The White House is confident they'll be able to get rid of the loan provision in conference. The House defeated it. The Senate passed it. They'll need to work out the differences. This is going to be an all-Republican conference to negotiate those differences. The White House will be a major player. They're going to put a full- court press in there to get rid of the entirely. If not, you may see some kind of compromise. But right now, the White House would like to see this completely taken out.

WOODRUFF: Jon Karl, thanks very much.

A number of Senate Republicans face difficult choices when they voted on the Iraq loan amendment last night. I spoke a while ago with two of them. Lindsay Graham of South Carolina who voted for the loan measure. Kay Bailey Hutchison of Texas voted against. I asked her why, after actively supporting the loan idea, she ended up voting no on it?

(BEGIN VIDEOTAPE)

SEN. KAY BAILEY HUTCHISON (R), TEXAS: I do think that loans were the right answer, but when I talked to the president and he talked about what he was trying to do with the other countries, I just felt that I couldn't put myself above him when he was having to deal with the issues with the other countries. Even though I do think that the loan component is the right way to go and I'm hoping that in the future, that will be a part of any kind of package.

WOODRUFF: What issue with other countries are you referring to?

HUTCHISON: Getting other countries to come in and help the United States defray some of the cost of this operation.

WOODRUFF: How do you get around that argument, Senator Graham?

GRAHAM: Well, very easily. We're putting $10 billion on the table in the form of grants. Other countries have about $135 billion worth of debt owed to -- Saddam Hussein was lent money, about $135 billion.

I think the waiver provision in the bill, that we'd waiver $10 million in loans if other countries would help, would be incentive to get other countries to help.

I had a domestic outlook on it a little bit more than Kay. This has been more expensive than we thought. Its cost more lives than we hoped it would cost. The dying is not over. The money is not yet all spent. If the president asked me tomorrow to spend more money in Iraq, I would. If anybody said we should get out tomorrow, I'd say no, that would be a disaster.

But I think it's unfair to ask the American people to do everything without some help from the Iraqi people themselves. They're sitting on a sea of oil.

WOODRUFF: Senator Hutchison, what do you say to that?

HUTCHISON: Well, first of all, I do think other countries need to step up to the plate and help America. We are doing this whole fight in the war on terrorism for them, and only Great Britain has really come to our side and done their fair share. I don't think that's right. So Lindsay's right on that point.

I do think that the president is the one negotiating with the other countries. I have to say that he probably knows better than I do how he can get other countries to step up to the plate and I just felt that I defer to his judgment when he was the one sitting at the table. I think the point is the right one.

WOODRUFF: Senator Graham, you wouldn't acknowledge that, that the president knows better what these other countries need to hear?

GRAHAM: I have a tremendous respect for the president. Kay is right in that regard.

I've come to the conclusion that we've got a domestic problem in Iraq that is going to overwhelm any international problem. The only way we'll ever lose this war, if the American people turn on is. And I think it would be very sad and ironic if $20 billion is given to the Iraqi people to build up infrastructure that generates revenue and that revenue is used to pay off France, Germany, Russia, Saudi Arabia for debts accumulated during Saddam Hussein.

In other words, the people who kept Saddam Hussein in power get paid and the people that liberated the country, fought and died, don't get paid. I don't think the American people would like that very much.

WOODRUFF: Why doesn't that bother you, Senator Hutchison?

HUTCHISON: It does. I don't consider the debt to Saddam Hussein to be valid debt at all. That's one of the reasons it's so expensive is because those countries gave money to Saddam Hussein so they could build up their defense capabilities.

Saddam Hussein didn't spend that money on his people. He didn't give the medicine he got for oil revenue to his people. He let them starve. And so I don't consider that valid debt and I think we should make a first priority that that debt be for given.

GRAHAM: And if it is under the bill, we'll waive our loan.

HUTCHISON: But you can't say for sure that that will happen. And they, you know, the question of a loan versus a grant comes to the front.

GRAHAM: Right.

WOODRUFF: Go ahead, Senator Graham.

GRAHAM: I understand very much what Kay is saying. And I'm very respectful of the president's position and admire him and have supported him.

But one thing that was said that I do disagree with. If we make part of it a loan, that would legitimize the argument we went to Iraq to take their oil. I reject that. We did not go to Iraq to take anybody's oil. We've lost almost 350 troops. We've spent $70 billion. We sacrificed greatly.

Nobody in their right mind with a do that to make a $10 billion loan. The people saying that are fanatics and hate us. I don't want to make policy based on what a bunch of crazy people say.

(END VIDEOTAPE)

WOODRUFF: Senator Lindsay Graham and Senator Kay Bailey Hutchison. I talked to them a short time ago.

We're rolling in cash questions on INSIDE POLITICS. Next, more on the politics of $87 billion package for Iraq. Bay Buchanan and Donna Brazile offer their two cents.

Later...

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: I'm Bill Schneider. Money can't buy happiness, but it sure can buy the "Political Play of the Week."

(COMMERCIAL BREAK)

WOODRUFF: Still ahead, two more Hollywood celebrities weigh in on the race for the White House and the California recall. Who are they? We'll tell you when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

WOODRUFF: With us now, former Gore campaign manager Donna Brazile and Bay Buchanan, president of American Cause.

Bay, I'm going to start with you. The president lost in the Senate last night -- this vote on whether it was going to be a loan entirely -- or a grant entirely or some of it be a loan.

How big a deal is this?

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: You know, Judy, this issue -- first of all, of course, he got his $87 million from both House and Senate. Looks like that's going to go through. But this $10 million being a part of a loan -- it is an issue. I believe that the American people are concerned. I think this $87 billion actually has hit a chord with the American people, where they're -- they see their jobs having gone overseas, now they're seeing their money going overseas. They're somewhat concerned.

If the president can turn the Iraqi policy around where he shows success in the next six or eight months, I think it's not an issue in this election. But if there's troubles out there and the job situation is still as poor as it is right now, I think the president should recognize there's a real discontent in this country that he's going to have to address.

DONNA BRAZILE, FMR. GORE CAMPAIGN MANAGER: I agree with Bay. I think this is a major issue. This woke the American people up, once again, about the deficit and all the things we're having to put aside in terms of fixing our schools, you know, giving seniors a prescription drug benefit because we don't have the money. And yet, we have money to help the Iraqis with their hospitalization costs and their schools.

So at some point, you know, someone should share with the American people the actual cost, the real plan. Perhaps more than supporting our troops, we'll have a plan in place to bring our troops home.

BUCHANAN: I think that there's no question the American people support the president on Iraq and do believe that we have an obligation to help that country get on its feet. But I think the -- and as generous a people as we are, we also expect that the president, the administration takes care of people here in this country. And I think that's where the disconnect is coming. They see a lot of attention and concern for Iraq. They're supportive of that.

But then they're saying, Listen, our jobs are going overseas. We're losing more and more of them, and the president doesn't seem to be addressing that in a way that he is being successful, at least.

BRAZILE: I support the loan. I just hope we don't give a coupon book to anyone.

BUCHANAN: I support the loan, and so do conservatives. But of course, they were called upon by the president to walk away from that. And I don't think the loan, plus or minus is going to make the big difference. I think the big difference, clearly, is where the economy is in six or seven months.

You know, there's a revolt...

(CROSSTALK)

BUCHANAN: Absolutely. And there was a revolt out there in California. And I don't know that the White House realizes it's an anti-incumbent, you know, revolt and they could pay the price if they don't address these issue.

WOODRUFF: You just changed the subject for me. I do want to ask you about Arnold Schwarzenegger.

He had said just a few days ago he was going to go to the president and ask for a lot, expected a lot of help from Washington. Donna, what happened? They met and Mr. Schwarzenegger said, Well, we didn't talk about it.

BRAZILE: Well, the Terminator met the Eraser and I'm sure what happened was the president said, Look, I'm sorry, but I don't have the funds. If he bails out California, what about the other 49 states and the District of Columbia that's seeking federal help and federal assistance and the mayors and everyone else? So I think he's right to tell Arnold, Look, you ran as someone who can terminate the deficit, you can bring back jobs, so you have to work your little magic right now.

BUCHANAN: You know, Arnold is interesting. He, I think, has also misread what happened out there. I think he thinks the people voted for Arnold Schwarzenegger. They voted to get rid of the Democratic policies. They -- this administration, Davis and his whole group, get the heck out of there. We want somebody new that can give us -- turn things around. And he's -- he's acting now as if he's going to govern like a Democrat. And if he does that, he also will be out of there and he will not be able to help the president, a she should be able to, 12 months from now.

WOODRUFF: Why do you say that? You say he's acting like he's going to govern like a Democrat.

(CROSSTALK)

BUCHANAN: Well, he's out on there on issue -- first of all, the first thing he says, I'm going to get the federal government to bail us out. I mean, a devout (ph) conservative says, Let's look at cut here and bringing in more income. Cutting taxes -- and that's where he's talking about -- that's good. But he's got to slice that doggone budget out there and he's got to slice regulation. He's got a problem with immigration. Instead of continuing to cater to illegals, he's got to stop the social services going to them. And he's looking like he wants to...

BRAZILE: You know what?

BUCHANAN: ...help the illegals and add to education and get the federal government to bail us out.

(CROSSTALK)

BRAZILE: Arnold is going to be calling Gray Davis every night and saying, Why did you let me take this job from you? I don't know what I'm doing. Because it's tough to balance a budget. It's tough to erase a deficit and at the same time promise to keep the schools going and....

BUCHANAN: Absolutely.

WOODRUFF: But they say they're going to go through it. They've got a woman out there now who was in Florida. She's going through the state spending line by line. They're going to come up with four, five, six billion dollars worth of waste...

(CROSSTALK)

BUCHANAN: Only about another 32 to go, I think.

BRAZILE: And then he wants to cut the car tax and that's going to add another four or five billion dollars back.

BUCHANAN: He'll be successful if, when he gets the information from that lady and says, Fine, I know there's going to be a lot of unhappy people, but we're cutting. And by the way, there's some other places we're going to have to cut. And I'm sorry, it's painful.

But he looks to me like the kind of guy that likes to be liked. And if you want to be liked and then go to someone else to bail us out, he's to make tough decisions, which is going to cause a lot of people on his little advisory team to start criticizing him. And he's going to have to accept that.

BRAZILE: Well, he can always go back and do "Kindergarten Cop," the sequel.

WOODRUFF: You got the last word.

BRAZILE: All right. Thank you.

WOODRUFF: Donna Brazile, Bay, great to see you both this Friday.

BUCHANAN: Good to be with you.

WOODRUFF: Thanks very much.

And now, we want to check the headlines in our "Campaign News Daily."

Unions supporting Democratic presidential hopeful Dick Gephardt are joining forces. About 20 labor groups are creating the Alliance for Economic Justice to pool their resources in support of Gephardt. The groups decided to get together after the AFL decided to hold off on endorsing a specific candidate. Meanwhile, Congressman Gephardt has launched a new TV ad in Iowa, vowing to protect American workers. (BEGIN VIDEO CLIP, AD)

UNIDENTIFIED MALE: After NAFTA, I lost two good jobs. They closed the plants and the jobs went to Mexico.

UNIDENTIFIED FEMALE: We've had to move three times, uproot our family, and now we're worried we'll have to do it again.

NARRATOR: Democratic leader Dick Gephardt led the fight against NAFTA. As president, Dick Gephardt will fight for American jobs. He knows...

(END VIDEO CLIP)

WOODRUFF: And there's a new rule in campaign fund-raising, thanks to Democratic hopeful Howard Dean. Some might say it's not how much cash he raised, but how you raise your cash.

Bill Schneider joins me next to explain.

(COMMERCIAL BREAK)

WOODRUFF: In presidential politics, money talks. This week, our senior political analyst, Bill Schneider, has been listening closely -- Bill.

SCHNEIDER: Judy, now that the third quarter campaign fund- raising results are in, the "Political Play of the Week" does not go to the candidate who raised the most money, that would be George W. Bush. It goes to the individual doing the most to change the system.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Who's winning the money chase? Third quarter fund-raising totals came in this week and the top Democrat is -- the envelope please -- Howard Dean, with nearly $15 million. That's close to half of the $34 million raised by all nine Democrats together. What's interesting is how Dean raised his money.

About 169,000 people gave to Dean. Their average contribution was about $74.

JOE TRIPPI, DEAN CAMPAIGN MANAGER: We have so many supporters across the country that are giving small amounts. And most of them have the ability to give to us again or to find friends or co-workers or family to give to us in the future.

SCHNEIDER: Joe Trippi, Dean's campaign manager is proud of the fact that each quarter this year the average size of Dean's campaign contributions has been getting smaller, while the total has been going up. It adds up to more money than any Democrat has ever raised in a single quarter, even President Clinton in 1996.

How do they do it? The Internet. Dean raised $7.4 million on the Internet this quarter, about half his total. LARRY NOBEL, CENTER FOR RESPONSIVE POLITICS: It's apparently bringing in people who haven't before contributed and haven't before been connected with campaigns. And so in a sense, it's aimed perfectly at a new generation of potential voters and a new generation of contributors.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: This campaign's about empowering people.

SCHNEIDER: Through the Internet.

TRIPPI: There's only one medium in the world that allows two million Americans to contribute $100 in one day if they decide to do it. That's the Internet.

SCHNEIDER: Al Gore may have invented the Internet, but Joe Trippi figured out how to make it pay off politically. For that he gets the "Political Play of the Week."

(END VIDEOTAPE)

SCHNEIDER: Dean could become the first Democrat to opt out of the public funding system for the primaries. And that would enable him to spend competitively with President Bush, who has already indicated that he' would opt out of public funding. Judy, this is the law of unintended consequences at work. The Internet could kill off public funding.

WOODRUFF: Boy, would that be not what the folks who thought it all up expected. OK.

SCHNEIDER: Exactly right.

WOODRUFF: Bill Schneider, thank you very much, in Virginia Beach today.

Ben Affleck has been on virtually every magazine and news program around. Next, he weighs in on politics and shares his thoughts on the next governor of California.

(COMMERCIAL BREAK)

WOODRUFF: You might think being a hot young actor with a famously beautiful girlfriend might be enough. But a couple of Hollywood heartthrobs can't seem to resist the allure of politics. When he's not busy dating Demi Moore or appearing in films like "Dude, where's my car?", Ashton Kutcher apparently has been sizing up the candidates. He decided to endorse Democrat John Edwards and will attend an Edwards fund raiser later this month.

Meantime, J. Lo's on-again, off-again guy, Ben Affleck, has had a few not so nice things to say about the California governor-elect.

(BEGIN VIDEO CLIP)

AFFLECK: Here we are now at the dawn of Schwarzenegger era in American politics. Does this seem like the decline of the Roman Empire? Like and then a beast with eyes of fire will rise from the sea and the Schwarzenegger will govern!

(LAUGHTER)

AFFLECK: What's next? I hope I don't get a speeding ticket in California now. And I may need a pardon one day.

(END VIDEO CLIP)

WOODRUFF: Ben Affleck.

That's it for INSIDE POLITICS. Have a great weekend. I'm Judy Woodruff. "CROSSFIRE" starts right now.

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