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Inside Politics

Congressman Questions Times Square Safety; Interview With Tom DeLay

Aired December 31, 2003 - 15:30   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: Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

CANDY CROWLEY, CNN GUEST HOST: Thank you for joining us. Judy is off this week. I'm Candy Crowley.

As the crowds start to gather for tonight's big bash in New York City's Times Square, a dissenting voice has emerged from the chorus of public officials who have advised Americans to live their lives normally, despite the orange terror threat level.

Even with massive security preparations in New York and nationwide, Connecticut Congressman Christopher Shays says he would not go to Times Square-quote -- "for anything." In Shays' words, "I wouldn't go into places where you're packed and where, if there was panic, a lot of injuries would take place."

The congressman used more ominous language in an interview with a Connecticut TV station.

(BEGIN VIDEO CLIP)

REP. CHRISTOPHER SHAYS (R), CONNECTICUT: You've got to be a fool, frankly, to go on New Year's night to Times Square. I mean, I can't understand why people would do that. Just one hand grenade thrown in the air and people panicking. It's just too tempting a target. And maybe you want to say, We're going to survive, and nobody's going to -- but why put yourself in that position? You know, could a plane be blown out of the sky? I have to tell you, honestly, it could be.

(END VIDEO CLIP)

CROWLEY: New York Mayor Michael Bloomberg plans to be in Times Square tonight, joined by former Iraq POW Shoshana Johnson. Johnson was captured and wounded in Iraq, and Bloomberg says make Congressman Shays -- quote -- "should call her and learn a little about courage."

The political back-and-forth aside, Times Square will be cleared of traffic soon and the New Year's partiers will begin to enter the area. CNN's Maria Hinojosa joins me from Times Square with the latest.

Maria, are you seeing signs of skittishness on those gathering around?

MARIA HINOJOSA, CNN URBAN AFFAIRS CORRESPONDENT: Skittishness only because they want the party to begin, Candy.

This -- I know, at this point, the manhole covers have been welded shut. The garbage, trash cans have been taken away. The mailboxes have been closed down.

But you know what? Right now, here, you do have a little bit of movement in terms of what's happening right now with the police because in half an hour, what's going to happen is that all of these areas -- I think you can see these pens -- will begin to be filled up by the revelers. Once they get into the spots here on 43rd Street and beyond, they will not be able to move until after midnight. They have just cleared out this entire area. And what's going to happen now is many of these people coming in here will have to go through metal detectors, 240 of them, just about more than half the ones that were here last year, all borrowed from the New York public schools.

So you don't have a sense of skittishness on the part of the people here. Many of the people I spoke to said they think that this is probably one of the safest areas for New Yorkers and tourists to be. So there's a real sense of partying.

But there is some concern among New Yorkers and others about these comments from Christopher Shays.

And one of the people who's concerned about that is Jeffrey Strauss. You are the co-executive producer of the event tonight. You heard these comments that Congressman Shays made.

Your immediate reaction is what?

JEFF STRAUSS, EXEC. PROD., TIME SQUARE NEW YEAR'S EVE: Then obviously he's never been here in Times Square on New Year's Eve, because the NYPD does a terrific job every year on making this celebration safe, secure and friendly for everyone.

HINOJOSA: What do you think could motivate someone to say that, when you know the mayor here is saying, It's safe. We've got so many police and officers that you can't see.

STRAUSS: I don't know. Maybe there's no one at his party in Connecticut. I don't know.

HINOJOSA: Now, do you think that this will have some kind of an impact in terms of people saying, Gee, maybe I'm not going to drive in from Connecticut?

STRAUSS: It would be a shame. I mean, this -- tonight we're honoring Shoshana Johnson, our armed forces. At 6:02 p.m. we're going to have (UNINTELLIGIBLE) lighting the ball with five representatives from each of the armed forces -- Army, Navy, Air Force, Marines, Coast Guard. We're honoring them because they make it possible that we can have these celebrations.

And it's just a -- we're going to have 700,000 people celebrating here in Times Square tonight.

HINOJOSA: And how secure do you feel? I mean, I know that you're the executive producer. But what makes you feel so secure about being here?

STRAUSS: Well, I've doing this for nine years. And I've seen what the NYPD does every year. I mean, we've been under orange alert here in New York since September 11. And every year they do a terrific job. There's -- you know (UNINTELLIGIBLE) -- you know, they're doing more than they usually do this year. But that makes them feel even better.

I'm here with my wife. We're going to be right there with Mayor Bloomberg and Shoshana Johnson, right in the heart of Times Square. And we're going to be hooting and hollering along with 500,000 or more other revelers.

HINOJOSA: All right. Well, break a leg on the production tonight. Good luck with that, Jeffrey.

STRAUSS: Thank you very much. Have a happy new year.

HINOJOSA: Thank you.

So, Candy, to give you a sense of that, certainly there are people who are talking about security issues. There are people who are talking about these political concerns. But walking up and down these streets here on Broadway, all I can tell you is that I've been looking at people who are so happy to be here. They're so happy, they've already got their blankets out. They've already got their spots there. Some of them have already got their mink coats on just wait for tonight -- Candy.

CROWLEY: Maria, let me ask you, just because I'm a little confused. Does everyone who comes into Times Square get magged (ph), or is it just a close -- a specified area of Times Square?

HINOJOSA: No, no, no, no. Everyone who comes into the celebration will get magged. And everyone who comes in will also have their bags checked. In fact, one of the things the mayor said is, leave your bags at home, because they will be going through your backpacks.

So everyone here -- it really is a secure area. They set around a perimeter. And once this area is closed off and you're inside, you can't get out. So it's a very, very high secure area. It's just hard to believe that you could do in a space like Times Square. But as Jeffrey just said, this is what they do. And they've been doing it for so long, they know how to do it.

CROWLEY: Maria Hinojosa, having a party with the rest of them. Thanks so much, Maria. See you later.

HINOJOSA: See you later.

CROWLEY: Checking the headlines in "Campaign News Daily," Democratic hopeful Wesley Clark kicked off the last day of 2003 in South Carolina. He began his day in Somerville with one of his "Conversations With Clark" events for military veterans. His campaign has also released a new TV ad featuring a former army officer who praises Clark's military leadership.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Even though he was the commanding general, you were never left to feel less than, regardless of your rank, your gender or your race. General Clark was very supportive of women.

(END VIDEO CLIP)

CROWLEY: The ad starts airing Monday in New Hampshire, and later it hits the airwaves in Arizona and South Carolina.

Howard Dean's house party last night appear to have given a sizable boost to his campaign's bottom line. The Dean campaign reports there were more than 1,400 parties nationwide, and they brought in more than half a million dollars. They also estimate 22,000 people attended the gatherings.

President Bush has signed his name to a campaign e-mail to his supporters. In the letter, Mr. Bush asked for a campaign contribution, and referring to the Democratic field, he says, "Whoever wins the nomination will have done so by energizing their party's left wing with angry attacks."

The Federal Election Commission has certified more than $15 million in matching funds for the six presidential candidates who qualify. Wesley Clark gets the most, $3.7 million. Joe Lieberman, John Edwards and Richard Gephardt all get more than $3 million. 81-year-old Lyndon Larouche, who's run for president every four years since 1976, gets nearly $839,000, $100,000 more than Dennis Kucinich. President Bush, Howard Dean and John Kerry all decided to forgo the federal money and the spending limits that go with it.

News today about applications for a different kind of government benefit is sure to get attention at the White House. The Labor Department reports 339,000 people filed for unemployment benefits last week. That is the lowest number of first-time claims since president Bush take office. Analysts say it's just another sign the labor market is strengthening after trailing in the economic recovery.

The president spent much of 2003 saying that time had not come yet for him to focus on politician and his re-election bid.

Of course, those who don't have the advantage of the Oval Office are his Democratic opponents.

Bruce Morton looks back at the year of politics, both on and off the presidential campaign trail.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): The year in politics? Well, John Edwards announced he was for an exploratory committee January 2, the same day a Richard Gephardt aide accidentally faxed out invitations to an exploratory committee fund-raiser. So we knew Gephardt was running, too.

Some of them, of course, had started even earlier, in 2002.

February 7, Florida Senator Bob Graham filed papers.

March 19, the U.S.-led coalition invaded Iraq.

May 1, President Bush, in a flight suit, landed on the carrier Abraham Lincoln and announced the end of major combat in Iraq.

We knew we'd see that in commercials, and we did.

First, in one John Kerry ran in November.

(BEGIN VIDEO CLIP)

NARRATOR: A leader on national security.

(END VIDEO CLIP_

MORTON: June 17, Howard Dean airs the election cycle's first TV ad, in Iowa.

September 17, retired General Wesley Clark announces he's running.

October 6, Florida's Graham becomes the first dropout. And the field is back to nine.

October 7, California voters recall Gray Davis -- 56 percent supported recall -- and elect Republican Arnold Schwarzenegger to replace him with 49 percent of the vote. A republican, but with a Kennedy mother-in-law. Is he a trend?

November 1, the Des Moines Register quotes Dean, by now the frontrunner, "I still want to be the candidate for the guys with Confederate flags on their trucks." The rest of the field jumps all over him for this.

November 4, Republicans Ernie Fletcher in Kentucky and Haley Barbour in Mississippi win two governorships that had been held by Democrats. Is this a trend?

November 5, president bush signs a bill banning an abortion technique call partial birth abortion.

November 8, Dean announces he'll be the first Democrat not to accept federal matching funds for his campaign, which means he won't have to accept federal spending limits either.

November 10, Kerry fires his campaign manager. Other staff departures follow.

November 12, two big unions, the Service Employees, and the State, County and Municipal Employees, endorse Dean.

November 14, Kerry says he'll follow Dean and reject federal matching funds.

November 15, Louisiana elects Kathleen Blanco to be the first woman governor ever. She's a Democrat replacing a Republican. Is she a trend?

Same day, Senator Hillary Clinton gets a rock star reception at a dinner in Iowa. Let's say she's not running. This year anyway.

December 9, former Vice President Al Gore endorses Dean without telling his 2000 running mate, Joe Lieberman, first. Other candidates dump on Gore or Dean or both.

December 10, the Supreme Court upholds last year's campaign finance law banning soft money and regulating the financing of third- party ads.

December 11, the Dow Jones Industrial Average closes above 10,000 for the first time in 19 months. Is this a trend?

December 13, deposed Iraqi leader Saddam Hussein is captured. Guerrilla war continues. Is this a trend?

For the presidential hopefuls, a year of speculation, punditry, alarms, excursions, blue smoke and mirrors, predictions, all that. Next month, they start counting real votes.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

CROWLEY: President Bush spent much of 2003 focused on Iraq. Coming up, one of the great fears before the war has turned into a nagging, unresolved question.

Also ahead, a force any occupant of the White House has to respect. House Majority Leader Tom DeLay talks to Judy Woodruff.

And who can be a political junkie without collecting lots of campaign junk? OK, we'll call it memorabilia, and we'll show you a collection that's worth saving.

(COMMERCIAL BREAK)

CROWLEY: Can't get enough of INSIDE POLITICS? Well, I'm happy to announce a new edition of your favorite program. INSIDE POLITICS SUNDAY premiers this weekend. Please join Judy Woodruff this Sunday at 10 a.m. Eastern for the latest news and talk from the campaign trail.

Today's edition of INSIDE POLITICS returns in 30 seconds.

(COMMERCIAL BREAK)

CROWLEY: 2003 began with the Bush administration worrying about what Saddam Hussein was hiding. Did Iraq have weapons of mass destruction, and if so, where were they?

As John King reports, the year ends with those questions unresolved.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): The State of the Union a year ago, before the war. The president unequivocal on the issue of Saddam Hussein and weapons of mass destruction.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He pursued chemical, biological and nuclear weapons even while inspectors were in his country. Nothing to date has restrained him from his pursuit of these weapons.

KING: But as 2003 comes to a close, months of searching, yet no major weapons discovered, and an evolution in how the administration deals with the weapons debate.

It began with Vice President Cheney, in a key speech back in July, saying that even if no weapons are found, the decision to go to war was based on the best judgment of the CIA.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Quote -- "We judge that Iraq has continued its weapons of mass destruction program in defiance of the U.N. resolutions and restrictions."

KING: At this year-end news conference, Mr. Bush cited fresh proof of Iraq's ability to make chemical and biological weapons.

BUSH: He had weapons programs that would have put him in material breach.

KING: But gone was any claim that Iraq had stockpiles of such weapons at the ready.

Critics see a president who deliberately exaggerated the intelligence.

(BEGIN VIDEO CLIP, AD)

NARRATOR: So we went to war. Now there's evidence we were misled, and almost every day Americans are dying in Iraq. We need the truth, not a cover-up.

(END VIDEO CLIP)

KING: The Bush team scoffs at the "misleader" label.

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, I think it's a very small outliers out there who never supported the war in the first place, don't support some of the needed steps we've taken to try to protect America. And they are a small voice out there.

KING: Some Democrats suggest that over time, a failure to find weapons of mass destruction will erode the president's credibility.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: They told us they knew where the weapons of mass destruction were. There was no evidence for that.

KING: In entering the election year, finding those weapons does not appear to be a political must. In a year-end CNN poll, 61 percent of Americans said they approve of the decision to go to war.

The White House believes that most voters will accept the argument that in a post-9/11 world, just the possibility Saddam Hussein had weapons of mass destruction, justified knocking him from power.

John King, CNN, the White House.

(END VIDEOTAPE)

CROWLEY, CNN ANCHOR: One of President Bush's prominent supporters, House Majority Leader, Tom DeLay, sat down recently with Judy Woodruff to talk about some key political issues, both this year and in the year ahead.

Among the issues discussed was the president's re-election bid. And, of course, Judy's first question: Is Mr. Bush beatable?

(BEGIN VIDEOTAPE)

TOM DELAY (R-TX), HOUSE MAJORITY LEADER: I think the president is right. In a democracy, anybody's beatable. You have to work hard; you have to do a good job. And if you do a good job and show leadership, you'll get re-elected. I think that's what's going to happen in the next election.

The second part of this too is I -- I don't see anybody that deserves national leadership coming from the Democrat nine, as you call them. They -- they are so weak -- they're weak in leadership, they're weak in presentation. Just recently, they're all running around with conspiracy theories. It's like Dean flew over the cuckoo's nest. It's -- there's no one that shows the kind of moral leadership that George Bush has been able to show over the last three years and going on four years.

JUDY WOODRUFF, CNN ANCHOR: Spoken like a loyal Republican.

Mr. DeLay, I want to ask you about this last congressional sessions just ended. Your counterpart, your Democratic counterpart, Congresswoman Nancy Pelosi, who's the minority leader in the House, called it a congress of the special interests rather than a congress of the public interests.

What do you say to that?

DELAY: Well, I think it's -- it was a congress for the American people.

We passed tax relief that allowed people to keep more of their money, and it shows that they are investing and saving it and, in some cases, spending it, which is helping to drive this economy. We did other pro-growth issues, like the energy bill that stuck in the Senate; the House was able to pass it. Tort reform to stop frivolous lawsuits. We were able to bring a strong health care system for seniors. And I -- all of this -- in all of this, fight a war on terror and show physical restraint. Discretionary spending was held to a 3 percent increase.

So all of this benefits the American people, benefits the economy and brings more security to the United States. I think that's a pretty good session.

WOODRUFF: I want to ask you about a couple of those points.

You mentioned Medicare reform, the prescription drug legislation. Congresswoman Pelosi said this is going end up being a losing issues for Republicans once seniors find out what exactly is in there.

My question to you is, Are you concerned that because many of the benefits don't kick in until after 2004, that it could be a vulnerable issue for your party?

DELAY: Well, first, Judy, 2004 is next year. And, in a couple of weeks, 2004 starts. And....

WOODRUFF: I mean until after 2004.

DELAY: Well, but -- but, in a couple of months, you're going to have a discount card for prescription drugs. And -- and -- so that the Medicare program that we just passed is going to kick in next year. The -- the private plans will kick in in a year after that.

And -- and -- so, what we're going to be seeing is more choices for senior citizens. You're going to see a health care system that is modernized now. Seniors are going to be able to -- to get a complete physical exam, participate in disease management prevention programs, use prescription drugs to keep them from having strokes, heart attacks, or off dialysis machines. They're going to be in modern medicine. And I think when seniors see what kind of improved health care and the quality of health care they're going to receive in very short order, they're going to be very happy with us, particularly in comparison to what the Democrats wanted. They wanted to bankrupt the country, raise taxes and expand a government-run program that's already proven to be disastrous for its seniors.

I think they're going to be very happy with us as we go forward and they see the kind of health care they're getting. WOODRUFF: SO these early polls that show a number of seniors confused to some degree about whether this is a good thing or not -- you think that's going to get cleared up?

DELAY: Oh, definitely. We're going to spend a whole year showing it what -- what is available for them. I mean, most Americans today don't know that we created a health savings account that allows them tax-free to put money in their own account, build up as tax free. And when they pay for their health care it's tax free. That's a he, huge benefit for all Americans, but particularly seniors.

WOODRUFF: You mentioned spending a couple of times. The last thing the House did was approve a $328-some-odd billion spending bill for fiscal '04. Now this still has to go to the Senate. But, as you know, a number of your Republican colleagues in the House wrote a letter to Speaker Dennis Hastert and said-and I'm quoting them -- "The enthusiasm, determination and political pressure to increase the size of government, and Congress must at some point be marshal (ph) to reduce -- reduce the size of government."

You know, my question to you is, given the price tag of Medicare, given the budget deficit, how worried are you, Tom DeLay, about fiscal restraint and this kind of concern on the part of your colleagues?

DELAY: First of all, Judy, 14 members out of 229 Republicans in the House wrote that letter.

Secondly, they do have a point, in that we need to show fiscal responsibility to the American people, and we've been able to do that. Holding spending to -- overall spending to less than 4 percent growth is huge. And that' s what we were able to do next year and will improve -- last year, and will improve upon it next year.

The money for the Medicare bill is totally within the budge that we passed within that 4 percent growth. So we're passing budgets and we're holding to those budgets. And we do need to look at government and we do need to eliminate those programs that don't work anymore, downsize those and reform others. And -- and we've been doing that for the last nine years and we need to do more of it.

(END VIDEOTAPE)

CROWLEY: We will hear from Tom DeLay's Democratic counterpart, Minority Leader Nancy Pelosi, later in our show.

And when we return, she's a political packrat. We'll meet an Iowa woman whose collecting habit goes back for decades.

(COMMERCIAL BREAK)

CROWLEY: With Iowa's prominent status in our political system, presidential candidates spend so much time in the state that some voters get to know them personally.

One of them, an ardent Democrat, is known as "Packrat Pat."

CNN's Yun-gi Denise (ph) shows us why.

(BEGIN VIDEOTAPE)

PAT MARSHALL, IOWA DEMOCRAT: My name is Pat Marshall. I am going to be 73 in another week, and I live in Cedar Rapids, Iowa.

Politics is just part of my everyday living.

This is where I have a lot of my buttons that I have collected over the years, and the banners and the hats.

UNIDENTIFIED FEMALE: Wow, you have a McGovern one there too.

MARSHALL: Well, he was running for president at one time.

So to pull down, kick, push. That was the first President Bush.

To think that we're out here in the middle of the Midwest and you're meeting somebody that's going to sit in the White House and make decisions -- it's awesome.

Barbie made it to the convention.

Of course I had to come home with one. Just like I had to come home with Tipper rocks.

For me, it would be difficult to live in a state where you don't have caucuses because most of the information you get from candidates is going to be off the media, and you don't get the real flavor of the person that way. You get to know them as real people.

I am supporting Dean now, but Gephardt or Edwards or Kerry -- I would consider them all friends.

UNIDENTIFIED FEMALE: You even have Lady Liberty in the shower.

MARSHALL: Why not?

UNIDENTIFIED FEMALE: Now we're in the kitchen. It's everywhere.

MARSHALL: Everywhere. I even have a little donkey spinning on my windowsill. Did you see that? I'll bet you missed that one, didn't you?

Yan-gi Denise (ph), CNN, Cedar Rapids, Iowa

(END VIDEOTAPE)

CROWLEY: We heard from Tom DeLay moments ago. Still ahead, the Democratic perspective as House Minority Leader Nancy Pelosi looks back on 2003.

And we'll go to Crawford, Texas, where President Bush is quietly kicking off his re-election year.

(COMMERCIAL BREAK) CROWLEY: Welcome back to INSIDE POLITICS, where it is nearing 4:00 on the East Coast and it is also nearing the end of the trading day on Wall Street in New York. You see that on the right-hand side of your screen.

On the left-hand, you are seeing Moscow, which is ringing in the New Year right now. Of course, several time zones in Russia itself. But in Moscow, it is now New Year's Eve. Vladimir Putin, the president, gave an address earlier today in which he said that he thought an uptick in births in Russia shows that his people are optimistic about the future. For the past decade, there has been a significant decline in population.

Again, on your right screen, what you are seeing is Wall Street ringing out the old year, and a pretty good one it has been. Stocks are on track for a fairly hefty gains in 2003. There is the bell, as you see. They were up, we are told, 16 points up today. This is the first up year for Wall Street after a punishing three-year bear market. For the year, the Dow is up 25 percent. The S&P, Standards and Poor's 500, has gained 26 percent. The tech-laden Nasdaq has climbed almost 50 percent. So a welcome relief for Wall Street and all involved in it. And those, of course, invested in it, as the stock market closes an up year for the first time in three years.

You're now also watching on the left-hand side of your screen, fireworks in Moscow, again, beginning to ring in the New Year, around the world. That was a beautiful shot. You see the fireworks over on the right. Once again, New Year's in Moscow. And the end of the year for Wall Street.

INSIDE POLITICS begins right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: Far from Times Square, the Democrats who would be president usher in 2004.

WESLEY CLARK (D), PRESIDENTIAL CANDIDATE: This leadership that doesn't look just at the next election, but what's good for America in the long term.

ANNOUNCER: Several will celebrate the dawn of their big year in Iowa and New Hampshire. Most polls put Al Sharpton in "Nowheresville." But the reverend could pack a punch in the first Southern primary. We'll talk to him today about his Carolina dreaming.

And before we ring out the old...

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: The envelope, please.

ANNOUNCER: Bill Schneider counts down his favorite coups of the past 12 months.

Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS. (END VIDEOTAPE)

CROWLEY: I'm Candy Crowley sitting in for Judy Woodruff. As the nation prepares to celebrate the arrival of 2004 under an orange, or high terror threat alert, security precautions are near unprecedented levels.

New York's Times Square is, as usual, the center of New Year's Eve revelry, and the focal point of massive security efforts. Sealed manholes, magnetometers, rooftop cameras and sharp shooters are just the beginning.

With me to talk more about the nation's response to the terror threat, the race for the White House and the year ahead, Democratic presidential hopeful, The Reverend Al Sharpton. Reverend, thank you so much for joining us on New Year's Eve no less. We appreciate it.

AL SHARPTON (D), PRESIDENTIAL CANDIDATE: Thank you. Thank you, Candy.

CROWLEY: I want to talk about your home turf first off. I don't know if you know, but Congressman Christopher Shays, a Republican from Connecticut, has said he wouldn't go to Times Square on New Year's Eve. He thinks it's a crazy idea, you'd have to be a fool to do it.

Are you going to be in Times Square on New Year's Eve?

SHARPTON: Well, I'll be around town. We're doing petitioning and churches and things. But I would not tell people not to go to Times Square.

I think people ought to be cautious. But I think that people ought to try and operate in a normal way. In fact, my family and I just drove through Times Square coming to the studios here in midtown, and there are people already gathered there.

And I think that government has a responsibility to secure people and warn people. But at the same time, I don't think we ought to try to scare people because then the terrorists really succeed when we have people in a constant state of panic.

CROWLEY: Reverend, it's a fine line here, particularly for you Democrats, although, as we mentioned, Christopher Shays is a Republican. But one of the things that so many of you have criticized the president for is, in fact, that you feel that the homeland is no more secure than it used to be, and yet you don't want to scare people.

So do you feel that tonight that New York City is as safe as it's ever been or safer? And the country, at large, do you feel that way?

SHARPTON: I think that there are many things that could be done, both with our foreign policy, both with our intelligence gathering, as well as other measures that could better secure the country. But I do not think a responsible thing to do is to tell people to just sit inside and hide. I was in New York September 11 when the attack happened, so I'm not speaking as one that has not lived under the threat of what happened, the memory of what happened. And many of us still suffer some of the trauma.

But at the same time, I think we must move to a point where we let the world know we are determined to conduct our lives in a normal fashion, but by being more cautious and more prudent. And I think the president has not shown the prudence that any one of us would show. But I do not think the responsible to do, as this congressman is doing, is to try and put out a mass panic.

CROWLEY: Reverend, I want to show our viewers a recent poll out of South Carolina, because it does show you, in fact, in second place, along with Wesley Clark, with Dean just about 4 points -- which I believe is within the margin of error of that poll.

What's going on in South Carolina? What do they know about you down there that is not reflected in the polls in some other states?

SHARPTON: I used to live in South Carolina. I've worked diligently there; I've worked diligently around many parts of the country.

I think part of the difference in South Carolina, it's a much more diverse population. I think that they are aware of my leadership and my working with their leaders and their communities, white and black, for many years.

And I think, unlike many other states, they're not impressed with the insiders or with people with money. They listen to message.

So I'm, within the margin of error, tied for first, not only, literally, tied for second.

I might add, though, in the national polls I'm ahead of Edwards, ahead in some polls of Kerry or tied with Kerry.

So when you look at the millions that have been raised compared to the fact that we have not raised the millions but that we are beating many of them both national and clearly in South Carolina, I think message still has a lot more importance than money.

And I might add -- and I'm saying this the first time -- we're filing today. We have now been able to reach matching funds. I will be qualified for matching funds where we are getting money. And I hope people go to our new Web site, www.sharpton2004.org, and continue to send money, because we are showing from these polls, in the South and elsewhere, that we're going to really pursue this nomination and surprise a lot of people.

CROWLEY: Let me put this to you bluntly, Reverend Sharpton. Iowa is mostly white. New Hampshire also largely white. In South Carolina, we expect that 50 percent of those who vote in the primaries will, in fact, be African-American. What does that say about your appeal among whites? Or what does it say about an African-American's chances of winning an election any time soon?

SHARPTON: Well, I think, first of all, we don't know what support we'll get in Iowa or New Hampshire. When I ran in New York, a third of the people that voted for me were white. There are many whites in South Carolina that will vote.

I think on the flip side, if you look at today's New York Times, they said Dr. Dean went to South Carolina and drew almost no blacks there yesterday. So what does that say about candidates that are not black?

I think that both of our challenges are to cross the racial divide, but people tend to support those that they're more familiar with. I think that's natural. But I don't think that it's any more of a challenge to me than it is to candidates in this race that have only been able to show support when it's been a one-dominating kind of state in terms of race.

The other thing I think that is important about that is that if this party's going to win they're going to have to galvanize all communities. And I think that's why it's good that there is a diversity in the field so we can energize and wake up the people early.

CROWLEY: Reverend Al Sharpton, we thank you for joining us. We wish you a happy New Year and good times on the trail. We'll see you later.

SHARPTON: Happy new year -- sharpton.2004.org.

CROWLEY: Thank you.

A reminder: You can see Al Sharpton, along with other Democrats competing in the Iowa caucuses, on CNN this coming Sunday afternoon. We plan live coverage of a debate sponsored by the Des Moines Register beginning at 3:00 Eastern time.

Our second edition of "Campaign News Daily" centers on the holiday plans of the Democratic hopefuls. Dennis Kucinich began his New Year's Eve here in Washington. This morning, he met with members of the African-American media, and held a forum at a senior center. He heads back to Ohio tonight for a New Year's Eve party in Cleveland.

Joe Lieberman begins 2004 in, where else, New Hampshire. Along with wife Hadassah, Lieberman plans to visit several restaurants and sports bars tomorrow in Manchester to campaign with people gathered to watch the college bowl games.

Down in South Carolina, several hopefuls are attending the annual renaissance weekend made famous by Bill and Hillary Clinton. Our sources tell us that Howard Dean, Wesley Clark and Carol Moseley Braun are among those attending this year's event which ends on New Year's Day.

President Bush will usher in the new year far from the bright lights of New York, or even Washington. He's spending time at his ranch in Crawford, Texas, before hitting the campaign trail. With us now from Crawford, CNN White House correspondent Suzanne Malveaux. Susan, what is the president doing tonight? Not much to do in Crawford, or where he is, a little outside of Crawford.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Oh, there are a few things to do in Crawford, Texas. President Bush is going to be spending a quiet holiday with his family and friends at the Texas ranch where we are told earlier today that the president did make a phone call to Italy's Prime Minister Berlusconi to thank him for his support in the war on terror.

He also received his daily intelligence and security briefings, specifically focusing on the situation with homeland security and the orange, the high threat level.

We are told the president is not going to stay up until midnight. He's going to get to bed as he normally does. But he has an early day tomorrow. He's going to be traveling to Falfurrias, Texas. We're told that's in Brooks county.

That's where he's going to be joined with his father, family and friends, as well as special envoy James Baker who just returned from Asia. He's going to be having lunch with that group. He's also going to go on a quail hunt, we're told, a day trip with that group.

So he's going to be having a good time, taking a little bit of a break from all this. But of course, you know, a lot on his plate. He's also been working on the state of the union address to be delivered in January -- Candy.

CROWLEY: I'm sure, Suzanne, none of you who are covering him aren't the least bit surprised that he's not going to stay up until midnight.

Let me push you into the new year and ask you about the president's upcoming fund raising plans. I mean it's time to really push the pedal to the metal.

MALVEAUX: Well absolutely. And it really is in high gear. The president likes to say this campaigning will come in its own due time, politics in it's own due time.

But if you take a look at the machine that is working behind the president, he has headlined nearly 50 fund-raisers this past year. He's raised more than $120 million. They are really going to be heating up, all of this turning all of this up.

And there are three things behind the Republican strategy here. First and foremost, the president does not respond to the criticism of the Democratic presidential hopefuls. Secondly, that they are trying to raise as much money as possible to flood the TV ads, so they can really shape the debate when it comes to next year.

And of course, also, he's going to be working earnestly on getting -- traveling around the country, using the bully pulpit of the presidency to take his message directly to the people. Candy, what is his message going to be? Essentially he's going to say Americans are safer than they were two years ago, and that the economy is on the upswing -- Candy.

CROWLEY: Thanks. CNN's Suzanne Malveaux in Crawford, nearby where the president is. Happy New Year, Suzanne, and to everyone in beautiful downtown Crawford. Appreciate it.

Coming up, the loyal opposition with an emphasis on opposition. House Minority Leader Nancy Pelosi looks back on her first year's frustrations and ahead to what she would like to accomplish.

The new year brings a host of new laws. Fasten your seat belts and open your eyes. We'll look at what some states will be requiring as INSIDE POLITICS continues.

(COMMERCIAL BREAK)

CROWLEY: For the past year, California Congresswoman Nancy Pelosi's had the job of leading House Democrats. It's not an easy task in the best of times, and these surely are not the best of times for her party. But this minority leader is not giving up, not even close.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): From a purely legislative standpoint, the House Democratic leader happily rings out the old year.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: This was a Congress of special interest, rather than the public interest. And it was distinguished -- if that's the word -- by being the Congress of the few, by the few, for the few.

CROWLEY: It was the Congress of the Republican Senate, the Republican House and the Republican White House which makes being Democratic leader less than satisfying, a job where you watch Republicans pass Medicare reform right under your nose, usurping an issue you thought was yours.

Being minority leader means you can't call the shots, you can only fire them.

PELOSI: I believe that we have to use some jiu jitsu on them. What they think is their strength will be their weakness. We'll use their strength against them. The Republican Medicare bill is not a step forward for seniors.

CROWLEY: The beauty of the new year is that a Republican majority Senate, House and a Republican president are a target rich (UNINTELLIGIBLE) for the minority.

PELOSI: And we will be, of course, using it against them in the elections as well.

CROWLEY: A new year, the second session of the 108th Congress and an election. The possibilities are endless as both sides mingle the political agenda and the legislative agenda until you can't tell one from the other.

PELOSI: It's about jobs, it's about education, about protecting the environment, about a sane energy policy, about expanding access to health care. There's a tremendous amount of unfinished business that this Congress has a responsibility to the public to take up.

CROWLEY: Nancy Pelosi is more than happy to be ringing in a new year with all its possibilities. Though a Gephardt supporter, she doesn't seem fazed by the prospect of victory for the man who once likened members of Congress to cockroaches.

PELOSI: Everybody talks about all these Democrats are concerned about Howard Dean. None of my colleagues nor none of any of our challengers have raised that concern with me.

CROWLEY: For House Minority Leader Nancy Pelosi, it is out with the old and in with the new whatever and whoever that is.

(END VIDEOTAPE)

CROWLEY: The end of '03, of course, a time to celebrate the possibilities of '04. After all, maybe this time next year Pelosi could be preparing for '05 as majority leader when she could call the shots.

During a campaign stop this week in Wisconsin, Democratic presidential candidate Howard Dean touted his ties to rural America, claiming he's the only candidate from a farm state. And now, the sparks are flying.

Congressman Dick Gephardt of Missouri calls Dean's claims absurd. the Missouri candidate says no other candidate in the race can hold a candle to his record on agricultural issues. Gephardt says Missouri has 110,000 farms compared to fewer than 7,000 in Vermont, Dean's home state. And five other Democratic candidates are also from states with more farms than Vermont.

There is much more to come from INSIDE POLITICS. When we return, we'll tell you about new state laws affecting school children and soft drinks, and what some older drivers will have to do to get their licenses renewed. Stay with us.

(COMMERCIAL BREAK)

CROWLEY: As 2003 draws to a close, we're looking back on the highlights on the years in politics. Our senior political analyst Bill Schneider checks in with his "Political Plays of the Year."

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: It's New Year's. And what would New Year's be without a few party favors? Before all acquaintances forgot, let's recall the top political plays of 2003. The first five today. (voice-over): The envelope, please. Play No. 10, Louisiana does it again. Remember back in 2002 how Republicans swept the mid-term elections? One state withstood the GOP tide. The Louisiana Senate race went to a December runoff. Despite the best efforts of the Bush White House, Louisiana reelected Democrat Mary Landrieu.

This year, Republicans picked up governorships in Kentucky and Mississippi. Once again, the Louisiana race went to a runoff. And once again, Louisiana resisted the GOP tide, and broke down a barrier.

SEN. MARY LANDRIEU (D), LOUISIANA: Kathleen Blanco was the most experienced, and the most qualified. The first woman governor to represent our state.

SCHNEIDER: Play No. 9, Judge Roy Moore of Alabama takes a stand for the Ten Commandments, at least for a granite monument of the Ten Commandants. And he pays a price for refusing to obey a federal court order to remove it.

WILLIAM THOMPSON, ALABAMA SUPREME COURT: This court hereby orders that Roy S. Moore be removed from his position of chief justice of the supreme court of Alabama.

SCHNEIDER: Moore instantly becomes a hero to the Religious Right, and a man with a political future.

JUSTICE TERRY BUTTS, MOORE'S ATTORNEY: He'll be back. He'll be back as a United States' senator or he'll be back as chief justice so he can run again.

SCHNEIDER: Play No.8, gay marriage gets on the political agenda. In June, the U.S. Supreme Court struck down a Texas law that criminalized homosexual activity. In his dissenting opinion, Justice Antonin Scalia notes, "This reasoning leaves on pretty shaky grounds state laws limiting marriage to opposite-sex couples."

He was right. Four months later, the Massachusetts supreme court ruled that the state could not deny the benefits of marriage to same- sex couples.

MARY BONAUTO, PLAINTIFF'S ATTORNEY: Gay people should have the right to enter into legal governmental marriage on exactly the same terms that everyone else can.

SCHNEIDER: Gay marriage is now the biggest social issue for 2004.

Play No. 7, Justice Sandra Day O'Connor becomes the critical swing vote on the U.S. Supreme Court. O'Connor wrote the decision allowing affirmative action in university admissions. O'Connor cast the decisive vote upholding campaign finance reform. O'Connor was the only justice who voted with the majority on every major Supreme Court decision during the past term.

How politically sensitive is she? She writes in her latest book, "Rare indeed is the legal victory that is not a careful byproduct of an emerging social consensus."

Play No. 6, the business cycle delivers for President Bush. Where are the jobs?, critics asked. Usually the jobs don't start coming back until two years after a recession ends. The recession ended for Bush's father in March 1991. Sure enough, the jobs started coming back in January 1993. Too late to save the first President Bush's job.

The son may be luckier. His recession ended in November 2001. The jobs started coming back in the fall of 2003, just in time for next year's election.

President Bush credits his tax cuts.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Not only the tax relief helped hard-working Americans with their pressures on their families and education needs, but it also helped the economy.

SCHNEIDER: And look at the stock market this year. There's enough good news about the economy that maybe, just maybe, voters won't notice that bush will very likely be the first president since Herbert Hoover to see a net loss of jobs over a four-year term.

(on camera): Tomorrow the countdown continues. Five, four, three, two, one! Happy election year!

Bill Schneider, CNN, Los Angeles.

(END VIDEOTAPE)

CROWLEY: Definitely always a hard act to follow. That is it for INSIDE POLITICS. I'm Candy Crowley. We all want you to have a safe New Year's Eve. "CROSSFIRE" is next.

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Aired December 31, 2003 - 15:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

CANDY CROWLEY, CNN GUEST HOST: Thank you for joining us. Judy is off this week. I'm Candy Crowley.

As the crowds start to gather for tonight's big bash in New York City's Times Square, a dissenting voice has emerged from the chorus of public officials who have advised Americans to live their lives normally, despite the orange terror threat level.

Even with massive security preparations in New York and nationwide, Connecticut Congressman Christopher Shays says he would not go to Times Square-quote -- "for anything." In Shays' words, "I wouldn't go into places where you're packed and where, if there was panic, a lot of injuries would take place."

The congressman used more ominous language in an interview with a Connecticut TV station.

(BEGIN VIDEO CLIP)

REP. CHRISTOPHER SHAYS (R), CONNECTICUT: You've got to be a fool, frankly, to go on New Year's night to Times Square. I mean, I can't understand why people would do that. Just one hand grenade thrown in the air and people panicking. It's just too tempting a target. And maybe you want to say, We're going to survive, and nobody's going to -- but why put yourself in that position? You know, could a plane be blown out of the sky? I have to tell you, honestly, it could be.

(END VIDEO CLIP)

CROWLEY: New York Mayor Michael Bloomberg plans to be in Times Square tonight, joined by former Iraq POW Shoshana Johnson. Johnson was captured and wounded in Iraq, and Bloomberg says make Congressman Shays -- quote -- "should call her and learn a little about courage."

The political back-and-forth aside, Times Square will be cleared of traffic soon and the New Year's partiers will begin to enter the area. CNN's Maria Hinojosa joins me from Times Square with the latest.

Maria, are you seeing signs of skittishness on those gathering around?

MARIA HINOJOSA, CNN URBAN AFFAIRS CORRESPONDENT: Skittishness only because they want the party to begin, Candy.

This -- I know, at this point, the manhole covers have been welded shut. The garbage, trash cans have been taken away. The mailboxes have been closed down.

But you know what? Right now, here, you do have a little bit of movement in terms of what's happening right now with the police because in half an hour, what's going to happen is that all of these areas -- I think you can see these pens -- will begin to be filled up by the revelers. Once they get into the spots here on 43rd Street and beyond, they will not be able to move until after midnight. They have just cleared out this entire area. And what's going to happen now is many of these people coming in here will have to go through metal detectors, 240 of them, just about more than half the ones that were here last year, all borrowed from the New York public schools.

So you don't have a sense of skittishness on the part of the people here. Many of the people I spoke to said they think that this is probably one of the safest areas for New Yorkers and tourists to be. So there's a real sense of partying.

But there is some concern among New Yorkers and others about these comments from Christopher Shays.

And one of the people who's concerned about that is Jeffrey Strauss. You are the co-executive producer of the event tonight. You heard these comments that Congressman Shays made.

Your immediate reaction is what?

JEFF STRAUSS, EXEC. PROD., TIME SQUARE NEW YEAR'S EVE: Then obviously he's never been here in Times Square on New Year's Eve, because the NYPD does a terrific job every year on making this celebration safe, secure and friendly for everyone.

HINOJOSA: What do you think could motivate someone to say that, when you know the mayor here is saying, It's safe. We've got so many police and officers that you can't see.

STRAUSS: I don't know. Maybe there's no one at his party in Connecticut. I don't know.

HINOJOSA: Now, do you think that this will have some kind of an impact in terms of people saying, Gee, maybe I'm not going to drive in from Connecticut?

STRAUSS: It would be a shame. I mean, this -- tonight we're honoring Shoshana Johnson, our armed forces. At 6:02 p.m. we're going to have (UNINTELLIGIBLE) lighting the ball with five representatives from each of the armed forces -- Army, Navy, Air Force, Marines, Coast Guard. We're honoring them because they make it possible that we can have these celebrations.

And it's just a -- we're going to have 700,000 people celebrating here in Times Square tonight.

HINOJOSA: And how secure do you feel? I mean, I know that you're the executive producer. But what makes you feel so secure about being here?

STRAUSS: Well, I've doing this for nine years. And I've seen what the NYPD does every year. I mean, we've been under orange alert here in New York since September 11. And every year they do a terrific job. There's -- you know (UNINTELLIGIBLE) -- you know, they're doing more than they usually do this year. But that makes them feel even better.

I'm here with my wife. We're going to be right there with Mayor Bloomberg and Shoshana Johnson, right in the heart of Times Square. And we're going to be hooting and hollering along with 500,000 or more other revelers.

HINOJOSA: All right. Well, break a leg on the production tonight. Good luck with that, Jeffrey.

STRAUSS: Thank you very much. Have a happy new year.

HINOJOSA: Thank you.

So, Candy, to give you a sense of that, certainly there are people who are talking about security issues. There are people who are talking about these political concerns. But walking up and down these streets here on Broadway, all I can tell you is that I've been looking at people who are so happy to be here. They're so happy, they've already got their blankets out. They've already got their spots there. Some of them have already got their mink coats on just wait for tonight -- Candy.

CROWLEY: Maria, let me ask you, just because I'm a little confused. Does everyone who comes into Times Square get magged (ph), or is it just a close -- a specified area of Times Square?

HINOJOSA: No, no, no, no. Everyone who comes into the celebration will get magged. And everyone who comes in will also have their bags checked. In fact, one of the things the mayor said is, leave your bags at home, because they will be going through your backpacks.

So everyone here -- it really is a secure area. They set around a perimeter. And once this area is closed off and you're inside, you can't get out. So it's a very, very high secure area. It's just hard to believe that you could do in a space like Times Square. But as Jeffrey just said, this is what they do. And they've been doing it for so long, they know how to do it.

CROWLEY: Maria Hinojosa, having a party with the rest of them. Thanks so much, Maria. See you later.

HINOJOSA: See you later.

CROWLEY: Checking the headlines in "Campaign News Daily," Democratic hopeful Wesley Clark kicked off the last day of 2003 in South Carolina. He began his day in Somerville with one of his "Conversations With Clark" events for military veterans. His campaign has also released a new TV ad featuring a former army officer who praises Clark's military leadership.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Even though he was the commanding general, you were never left to feel less than, regardless of your rank, your gender or your race. General Clark was very supportive of women.

(END VIDEO CLIP)

CROWLEY: The ad starts airing Monday in New Hampshire, and later it hits the airwaves in Arizona and South Carolina.

Howard Dean's house party last night appear to have given a sizable boost to his campaign's bottom line. The Dean campaign reports there were more than 1,400 parties nationwide, and they brought in more than half a million dollars. They also estimate 22,000 people attended the gatherings.

President Bush has signed his name to a campaign e-mail to his supporters. In the letter, Mr. Bush asked for a campaign contribution, and referring to the Democratic field, he says, "Whoever wins the nomination will have done so by energizing their party's left wing with angry attacks."

The Federal Election Commission has certified more than $15 million in matching funds for the six presidential candidates who qualify. Wesley Clark gets the most, $3.7 million. Joe Lieberman, John Edwards and Richard Gephardt all get more than $3 million. 81-year-old Lyndon Larouche, who's run for president every four years since 1976, gets nearly $839,000, $100,000 more than Dennis Kucinich. President Bush, Howard Dean and John Kerry all decided to forgo the federal money and the spending limits that go with it.

News today about applications for a different kind of government benefit is sure to get attention at the White House. The Labor Department reports 339,000 people filed for unemployment benefits last week. That is the lowest number of first-time claims since president Bush take office. Analysts say it's just another sign the labor market is strengthening after trailing in the economic recovery.

The president spent much of 2003 saying that time had not come yet for him to focus on politician and his re-election bid.

Of course, those who don't have the advantage of the Oval Office are his Democratic opponents.

Bruce Morton looks back at the year of politics, both on and off the presidential campaign trail.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): The year in politics? Well, John Edwards announced he was for an exploratory committee January 2, the same day a Richard Gephardt aide accidentally faxed out invitations to an exploratory committee fund-raiser. So we knew Gephardt was running, too.

Some of them, of course, had started even earlier, in 2002.

February 7, Florida Senator Bob Graham filed papers.

March 19, the U.S.-led coalition invaded Iraq.

May 1, President Bush, in a flight suit, landed on the carrier Abraham Lincoln and announced the end of major combat in Iraq.

We knew we'd see that in commercials, and we did.

First, in one John Kerry ran in November.

(BEGIN VIDEO CLIP)

NARRATOR: A leader on national security.

(END VIDEO CLIP_

MORTON: June 17, Howard Dean airs the election cycle's first TV ad, in Iowa.

September 17, retired General Wesley Clark announces he's running.

October 6, Florida's Graham becomes the first dropout. And the field is back to nine.

October 7, California voters recall Gray Davis -- 56 percent supported recall -- and elect Republican Arnold Schwarzenegger to replace him with 49 percent of the vote. A republican, but with a Kennedy mother-in-law. Is he a trend?

November 1, the Des Moines Register quotes Dean, by now the frontrunner, "I still want to be the candidate for the guys with Confederate flags on their trucks." The rest of the field jumps all over him for this.

November 4, Republicans Ernie Fletcher in Kentucky and Haley Barbour in Mississippi win two governorships that had been held by Democrats. Is this a trend?

November 5, president bush signs a bill banning an abortion technique call partial birth abortion.

November 8, Dean announces he'll be the first Democrat not to accept federal matching funds for his campaign, which means he won't have to accept federal spending limits either.

November 10, Kerry fires his campaign manager. Other staff departures follow.

November 12, two big unions, the Service Employees, and the State, County and Municipal Employees, endorse Dean.

November 14, Kerry says he'll follow Dean and reject federal matching funds.

November 15, Louisiana elects Kathleen Blanco to be the first woman governor ever. She's a Democrat replacing a Republican. Is she a trend?

Same day, Senator Hillary Clinton gets a rock star reception at a dinner in Iowa. Let's say she's not running. This year anyway.

December 9, former Vice President Al Gore endorses Dean without telling his 2000 running mate, Joe Lieberman, first. Other candidates dump on Gore or Dean or both.

December 10, the Supreme Court upholds last year's campaign finance law banning soft money and regulating the financing of third- party ads.

December 11, the Dow Jones Industrial Average closes above 10,000 for the first time in 19 months. Is this a trend?

December 13, deposed Iraqi leader Saddam Hussein is captured. Guerrilla war continues. Is this a trend?

For the presidential hopefuls, a year of speculation, punditry, alarms, excursions, blue smoke and mirrors, predictions, all that. Next month, they start counting real votes.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

CROWLEY: President Bush spent much of 2003 focused on Iraq. Coming up, one of the great fears before the war has turned into a nagging, unresolved question.

Also ahead, a force any occupant of the White House has to respect. House Majority Leader Tom DeLay talks to Judy Woodruff.

And who can be a political junkie without collecting lots of campaign junk? OK, we'll call it memorabilia, and we'll show you a collection that's worth saving.

(COMMERCIAL BREAK)

CROWLEY: Can't get enough of INSIDE POLITICS? Well, I'm happy to announce a new edition of your favorite program. INSIDE POLITICS SUNDAY premiers this weekend. Please join Judy Woodruff this Sunday at 10 a.m. Eastern for the latest news and talk from the campaign trail.

Today's edition of INSIDE POLITICS returns in 30 seconds.

(COMMERCIAL BREAK)

CROWLEY: 2003 began with the Bush administration worrying about what Saddam Hussein was hiding. Did Iraq have weapons of mass destruction, and if so, where were they?

As John King reports, the year ends with those questions unresolved.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): The State of the Union a year ago, before the war. The president unequivocal on the issue of Saddam Hussein and weapons of mass destruction.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He pursued chemical, biological and nuclear weapons even while inspectors were in his country. Nothing to date has restrained him from his pursuit of these weapons.

KING: But as 2003 comes to a close, months of searching, yet no major weapons discovered, and an evolution in how the administration deals with the weapons debate.

It began with Vice President Cheney, in a key speech back in July, saying that even if no weapons are found, the decision to go to war was based on the best judgment of the CIA.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Quote -- "We judge that Iraq has continued its weapons of mass destruction program in defiance of the U.N. resolutions and restrictions."

KING: At this year-end news conference, Mr. Bush cited fresh proof of Iraq's ability to make chemical and biological weapons.

BUSH: He had weapons programs that would have put him in material breach.

KING: But gone was any claim that Iraq had stockpiles of such weapons at the ready.

Critics see a president who deliberately exaggerated the intelligence.

(BEGIN VIDEO CLIP, AD)

NARRATOR: So we went to war. Now there's evidence we were misled, and almost every day Americans are dying in Iraq. We need the truth, not a cover-up.

(END VIDEO CLIP)

KING: The Bush team scoffs at the "misleader" label.

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, I think it's a very small outliers out there who never supported the war in the first place, don't support some of the needed steps we've taken to try to protect America. And they are a small voice out there.

KING: Some Democrats suggest that over time, a failure to find weapons of mass destruction will erode the president's credibility.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: They told us they knew where the weapons of mass destruction were. There was no evidence for that.

KING: In entering the election year, finding those weapons does not appear to be a political must. In a year-end CNN poll, 61 percent of Americans said they approve of the decision to go to war.

The White House believes that most voters will accept the argument that in a post-9/11 world, just the possibility Saddam Hussein had weapons of mass destruction, justified knocking him from power.

John King, CNN, the White House.

(END VIDEOTAPE)

CROWLEY, CNN ANCHOR: One of President Bush's prominent supporters, House Majority Leader, Tom DeLay, sat down recently with Judy Woodruff to talk about some key political issues, both this year and in the year ahead.

Among the issues discussed was the president's re-election bid. And, of course, Judy's first question: Is Mr. Bush beatable?

(BEGIN VIDEOTAPE)

TOM DELAY (R-TX), HOUSE MAJORITY LEADER: I think the president is right. In a democracy, anybody's beatable. You have to work hard; you have to do a good job. And if you do a good job and show leadership, you'll get re-elected. I think that's what's going to happen in the next election.

The second part of this too is I -- I don't see anybody that deserves national leadership coming from the Democrat nine, as you call them. They -- they are so weak -- they're weak in leadership, they're weak in presentation. Just recently, they're all running around with conspiracy theories. It's like Dean flew over the cuckoo's nest. It's -- there's no one that shows the kind of moral leadership that George Bush has been able to show over the last three years and going on four years.

JUDY WOODRUFF, CNN ANCHOR: Spoken like a loyal Republican.

Mr. DeLay, I want to ask you about this last congressional sessions just ended. Your counterpart, your Democratic counterpart, Congresswoman Nancy Pelosi, who's the minority leader in the House, called it a congress of the special interests rather than a congress of the public interests.

What do you say to that?

DELAY: Well, I think it's -- it was a congress for the American people.

We passed tax relief that allowed people to keep more of their money, and it shows that they are investing and saving it and, in some cases, spending it, which is helping to drive this economy. We did other pro-growth issues, like the energy bill that stuck in the Senate; the House was able to pass it. Tort reform to stop frivolous lawsuits. We were able to bring a strong health care system for seniors. And I -- all of this -- in all of this, fight a war on terror and show physical restraint. Discretionary spending was held to a 3 percent increase.

So all of this benefits the American people, benefits the economy and brings more security to the United States. I think that's a pretty good session.

WOODRUFF: I want to ask you about a couple of those points.

You mentioned Medicare reform, the prescription drug legislation. Congresswoman Pelosi said this is going end up being a losing issues for Republicans once seniors find out what exactly is in there.

My question to you is, Are you concerned that because many of the benefits don't kick in until after 2004, that it could be a vulnerable issue for your party?

DELAY: Well, first, Judy, 2004 is next year. And, in a couple of weeks, 2004 starts. And....

WOODRUFF: I mean until after 2004.

DELAY: Well, but -- but, in a couple of months, you're going to have a discount card for prescription drugs. And -- and -- so that the Medicare program that we just passed is going to kick in next year. The -- the private plans will kick in in a year after that.

And -- and -- so, what we're going to be seeing is more choices for senior citizens. You're going to see a health care system that is modernized now. Seniors are going to be able to -- to get a complete physical exam, participate in disease management prevention programs, use prescription drugs to keep them from having strokes, heart attacks, or off dialysis machines. They're going to be in modern medicine. And I think when seniors see what kind of improved health care and the quality of health care they're going to receive in very short order, they're going to be very happy with us, particularly in comparison to what the Democrats wanted. They wanted to bankrupt the country, raise taxes and expand a government-run program that's already proven to be disastrous for its seniors.

I think they're going to be very happy with us as we go forward and they see the kind of health care they're getting. WOODRUFF: SO these early polls that show a number of seniors confused to some degree about whether this is a good thing or not -- you think that's going to get cleared up?

DELAY: Oh, definitely. We're going to spend a whole year showing it what -- what is available for them. I mean, most Americans today don't know that we created a health savings account that allows them tax-free to put money in their own account, build up as tax free. And when they pay for their health care it's tax free. That's a he, huge benefit for all Americans, but particularly seniors.

WOODRUFF: You mentioned spending a couple of times. The last thing the House did was approve a $328-some-odd billion spending bill for fiscal '04. Now this still has to go to the Senate. But, as you know, a number of your Republican colleagues in the House wrote a letter to Speaker Dennis Hastert and said-and I'm quoting them -- "The enthusiasm, determination and political pressure to increase the size of government, and Congress must at some point be marshal (ph) to reduce -- reduce the size of government."

You know, my question to you is, given the price tag of Medicare, given the budget deficit, how worried are you, Tom DeLay, about fiscal restraint and this kind of concern on the part of your colleagues?

DELAY: First of all, Judy, 14 members out of 229 Republicans in the House wrote that letter.

Secondly, they do have a point, in that we need to show fiscal responsibility to the American people, and we've been able to do that. Holding spending to -- overall spending to less than 4 percent growth is huge. And that' s what we were able to do next year and will improve -- last year, and will improve upon it next year.

The money for the Medicare bill is totally within the budge that we passed within that 4 percent growth. So we're passing budgets and we're holding to those budgets. And we do need to look at government and we do need to eliminate those programs that don't work anymore, downsize those and reform others. And -- and we've been doing that for the last nine years and we need to do more of it.

(END VIDEOTAPE)

CROWLEY: We will hear from Tom DeLay's Democratic counterpart, Minority Leader Nancy Pelosi, later in our show.

And when we return, she's a political packrat. We'll meet an Iowa woman whose collecting habit goes back for decades.

(COMMERCIAL BREAK)

CROWLEY: With Iowa's prominent status in our political system, presidential candidates spend so much time in the state that some voters get to know them personally.

One of them, an ardent Democrat, is known as "Packrat Pat."

CNN's Yun-gi Denise (ph) shows us why.

(BEGIN VIDEOTAPE)

PAT MARSHALL, IOWA DEMOCRAT: My name is Pat Marshall. I am going to be 73 in another week, and I live in Cedar Rapids, Iowa.

Politics is just part of my everyday living.

This is where I have a lot of my buttons that I have collected over the years, and the banners and the hats.

UNIDENTIFIED FEMALE: Wow, you have a McGovern one there too.

MARSHALL: Well, he was running for president at one time.

So to pull down, kick, push. That was the first President Bush.

To think that we're out here in the middle of the Midwest and you're meeting somebody that's going to sit in the White House and make decisions -- it's awesome.

Barbie made it to the convention.

Of course I had to come home with one. Just like I had to come home with Tipper rocks.

For me, it would be difficult to live in a state where you don't have caucuses because most of the information you get from candidates is going to be off the media, and you don't get the real flavor of the person that way. You get to know them as real people.

I am supporting Dean now, but Gephardt or Edwards or Kerry -- I would consider them all friends.

UNIDENTIFIED FEMALE: You even have Lady Liberty in the shower.

MARSHALL: Why not?

UNIDENTIFIED FEMALE: Now we're in the kitchen. It's everywhere.

MARSHALL: Everywhere. I even have a little donkey spinning on my windowsill. Did you see that? I'll bet you missed that one, didn't you?

Yan-gi Denise (ph), CNN, Cedar Rapids, Iowa

(END VIDEOTAPE)

CROWLEY: We heard from Tom DeLay moments ago. Still ahead, the Democratic perspective as House Minority Leader Nancy Pelosi looks back on 2003.

And we'll go to Crawford, Texas, where President Bush is quietly kicking off his re-election year.

(COMMERCIAL BREAK) CROWLEY: Welcome back to INSIDE POLITICS, where it is nearing 4:00 on the East Coast and it is also nearing the end of the trading day on Wall Street in New York. You see that on the right-hand side of your screen.

On the left-hand, you are seeing Moscow, which is ringing in the New Year right now. Of course, several time zones in Russia itself. But in Moscow, it is now New Year's Eve. Vladimir Putin, the president, gave an address earlier today in which he said that he thought an uptick in births in Russia shows that his people are optimistic about the future. For the past decade, there has been a significant decline in population.

Again, on your right screen, what you are seeing is Wall Street ringing out the old year, and a pretty good one it has been. Stocks are on track for a fairly hefty gains in 2003. There is the bell, as you see. They were up, we are told, 16 points up today. This is the first up year for Wall Street after a punishing three-year bear market. For the year, the Dow is up 25 percent. The S&P, Standards and Poor's 500, has gained 26 percent. The tech-laden Nasdaq has climbed almost 50 percent. So a welcome relief for Wall Street and all involved in it. And those, of course, invested in it, as the stock market closes an up year for the first time in three years.

You're now also watching on the left-hand side of your screen, fireworks in Moscow, again, beginning to ring in the New Year, around the world. That was a beautiful shot. You see the fireworks over on the right. Once again, New Year's in Moscow. And the end of the year for Wall Street.

INSIDE POLITICS begins right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: Far from Times Square, the Democrats who would be president usher in 2004.

WESLEY CLARK (D), PRESIDENTIAL CANDIDATE: This leadership that doesn't look just at the next election, but what's good for America in the long term.

ANNOUNCER: Several will celebrate the dawn of their big year in Iowa and New Hampshire. Most polls put Al Sharpton in "Nowheresville." But the reverend could pack a punch in the first Southern primary. We'll talk to him today about his Carolina dreaming.

And before we ring out the old...

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: The envelope, please.

ANNOUNCER: Bill Schneider counts down his favorite coups of the past 12 months.

Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS. (END VIDEOTAPE)

CROWLEY: I'm Candy Crowley sitting in for Judy Woodruff. As the nation prepares to celebrate the arrival of 2004 under an orange, or high terror threat alert, security precautions are near unprecedented levels.

New York's Times Square is, as usual, the center of New Year's Eve revelry, and the focal point of massive security efforts. Sealed manholes, magnetometers, rooftop cameras and sharp shooters are just the beginning.

With me to talk more about the nation's response to the terror threat, the race for the White House and the year ahead, Democratic presidential hopeful, The Reverend Al Sharpton. Reverend, thank you so much for joining us on New Year's Eve no less. We appreciate it.

AL SHARPTON (D), PRESIDENTIAL CANDIDATE: Thank you. Thank you, Candy.

CROWLEY: I want to talk about your home turf first off. I don't know if you know, but Congressman Christopher Shays, a Republican from Connecticut, has said he wouldn't go to Times Square on New Year's Eve. He thinks it's a crazy idea, you'd have to be a fool to do it.

Are you going to be in Times Square on New Year's Eve?

SHARPTON: Well, I'll be around town. We're doing petitioning and churches and things. But I would not tell people not to go to Times Square.

I think people ought to be cautious. But I think that people ought to try and operate in a normal way. In fact, my family and I just drove through Times Square coming to the studios here in midtown, and there are people already gathered there.

And I think that government has a responsibility to secure people and warn people. But at the same time, I don't think we ought to try to scare people because then the terrorists really succeed when we have people in a constant state of panic.

CROWLEY: Reverend, it's a fine line here, particularly for you Democrats, although, as we mentioned, Christopher Shays is a Republican. But one of the things that so many of you have criticized the president for is, in fact, that you feel that the homeland is no more secure than it used to be, and yet you don't want to scare people.

So do you feel that tonight that New York City is as safe as it's ever been or safer? And the country, at large, do you feel that way?

SHARPTON: I think that there are many things that could be done, both with our foreign policy, both with our intelligence gathering, as well as other measures that could better secure the country. But I do not think a responsible thing to do is to tell people to just sit inside and hide. I was in New York September 11 when the attack happened, so I'm not speaking as one that has not lived under the threat of what happened, the memory of what happened. And many of us still suffer some of the trauma.

But at the same time, I think we must move to a point where we let the world know we are determined to conduct our lives in a normal fashion, but by being more cautious and more prudent. And I think the president has not shown the prudence that any one of us would show. But I do not think the responsible to do, as this congressman is doing, is to try and put out a mass panic.

CROWLEY: Reverend, I want to show our viewers a recent poll out of South Carolina, because it does show you, in fact, in second place, along with Wesley Clark, with Dean just about 4 points -- which I believe is within the margin of error of that poll.

What's going on in South Carolina? What do they know about you down there that is not reflected in the polls in some other states?

SHARPTON: I used to live in South Carolina. I've worked diligently there; I've worked diligently around many parts of the country.

I think part of the difference in South Carolina, it's a much more diverse population. I think that they are aware of my leadership and my working with their leaders and their communities, white and black, for many years.

And I think, unlike many other states, they're not impressed with the insiders or with people with money. They listen to message.

So I'm, within the margin of error, tied for first, not only, literally, tied for second.

I might add, though, in the national polls I'm ahead of Edwards, ahead in some polls of Kerry or tied with Kerry.

So when you look at the millions that have been raised compared to the fact that we have not raised the millions but that we are beating many of them both national and clearly in South Carolina, I think message still has a lot more importance than money.

And I might add -- and I'm saying this the first time -- we're filing today. We have now been able to reach matching funds. I will be qualified for matching funds where we are getting money. And I hope people go to our new Web site, www.sharpton2004.org, and continue to send money, because we are showing from these polls, in the South and elsewhere, that we're going to really pursue this nomination and surprise a lot of people.

CROWLEY: Let me put this to you bluntly, Reverend Sharpton. Iowa is mostly white. New Hampshire also largely white. In South Carolina, we expect that 50 percent of those who vote in the primaries will, in fact, be African-American. What does that say about your appeal among whites? Or what does it say about an African-American's chances of winning an election any time soon?

SHARPTON: Well, I think, first of all, we don't know what support we'll get in Iowa or New Hampshire. When I ran in New York, a third of the people that voted for me were white. There are many whites in South Carolina that will vote.

I think on the flip side, if you look at today's New York Times, they said Dr. Dean went to South Carolina and drew almost no blacks there yesterday. So what does that say about candidates that are not black?

I think that both of our challenges are to cross the racial divide, but people tend to support those that they're more familiar with. I think that's natural. But I don't think that it's any more of a challenge to me than it is to candidates in this race that have only been able to show support when it's been a one-dominating kind of state in terms of race.

The other thing I think that is important about that is that if this party's going to win they're going to have to galvanize all communities. And I think that's why it's good that there is a diversity in the field so we can energize and wake up the people early.

CROWLEY: Reverend Al Sharpton, we thank you for joining us. We wish you a happy New Year and good times on the trail. We'll see you later.

SHARPTON: Happy new year -- sharpton.2004.org.

CROWLEY: Thank you.

A reminder: You can see Al Sharpton, along with other Democrats competing in the Iowa caucuses, on CNN this coming Sunday afternoon. We plan live coverage of a debate sponsored by the Des Moines Register beginning at 3:00 Eastern time.

Our second edition of "Campaign News Daily" centers on the holiday plans of the Democratic hopefuls. Dennis Kucinich began his New Year's Eve here in Washington. This morning, he met with members of the African-American media, and held a forum at a senior center. He heads back to Ohio tonight for a New Year's Eve party in Cleveland.

Joe Lieberman begins 2004 in, where else, New Hampshire. Along with wife Hadassah, Lieberman plans to visit several restaurants and sports bars tomorrow in Manchester to campaign with people gathered to watch the college bowl games.

Down in South Carolina, several hopefuls are attending the annual renaissance weekend made famous by Bill and Hillary Clinton. Our sources tell us that Howard Dean, Wesley Clark and Carol Moseley Braun are among those attending this year's event which ends on New Year's Day.

President Bush will usher in the new year far from the bright lights of New York, or even Washington. He's spending time at his ranch in Crawford, Texas, before hitting the campaign trail. With us now from Crawford, CNN White House correspondent Suzanne Malveaux. Susan, what is the president doing tonight? Not much to do in Crawford, or where he is, a little outside of Crawford.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Oh, there are a few things to do in Crawford, Texas. President Bush is going to be spending a quiet holiday with his family and friends at the Texas ranch where we are told earlier today that the president did make a phone call to Italy's Prime Minister Berlusconi to thank him for his support in the war on terror.

He also received his daily intelligence and security briefings, specifically focusing on the situation with homeland security and the orange, the high threat level.

We are told the president is not going to stay up until midnight. He's going to get to bed as he normally does. But he has an early day tomorrow. He's going to be traveling to Falfurrias, Texas. We're told that's in Brooks county.

That's where he's going to be joined with his father, family and friends, as well as special envoy James Baker who just returned from Asia. He's going to be having lunch with that group. He's also going to go on a quail hunt, we're told, a day trip with that group.

So he's going to be having a good time, taking a little bit of a break from all this. But of course, you know, a lot on his plate. He's also been working on the state of the union address to be delivered in January -- Candy.

CROWLEY: I'm sure, Suzanne, none of you who are covering him aren't the least bit surprised that he's not going to stay up until midnight.

Let me push you into the new year and ask you about the president's upcoming fund raising plans. I mean it's time to really push the pedal to the metal.

MALVEAUX: Well absolutely. And it really is in high gear. The president likes to say this campaigning will come in its own due time, politics in it's own due time.

But if you take a look at the machine that is working behind the president, he has headlined nearly 50 fund-raisers this past year. He's raised more than $120 million. They are really going to be heating up, all of this turning all of this up.

And there are three things behind the Republican strategy here. First and foremost, the president does not respond to the criticism of the Democratic presidential hopefuls. Secondly, that they are trying to raise as much money as possible to flood the TV ads, so they can really shape the debate when it comes to next year.

And of course, also, he's going to be working earnestly on getting -- traveling around the country, using the bully pulpit of the presidency to take his message directly to the people. Candy, what is his message going to be? Essentially he's going to say Americans are safer than they were two years ago, and that the economy is on the upswing -- Candy.

CROWLEY: Thanks. CNN's Suzanne Malveaux in Crawford, nearby where the president is. Happy New Year, Suzanne, and to everyone in beautiful downtown Crawford. Appreciate it.

Coming up, the loyal opposition with an emphasis on opposition. House Minority Leader Nancy Pelosi looks back on her first year's frustrations and ahead to what she would like to accomplish.

The new year brings a host of new laws. Fasten your seat belts and open your eyes. We'll look at what some states will be requiring as INSIDE POLITICS continues.

(COMMERCIAL BREAK)

CROWLEY: For the past year, California Congresswoman Nancy Pelosi's had the job of leading House Democrats. It's not an easy task in the best of times, and these surely are not the best of times for her party. But this minority leader is not giving up, not even close.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): From a purely legislative standpoint, the House Democratic leader happily rings out the old year.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: This was a Congress of special interest, rather than the public interest. And it was distinguished -- if that's the word -- by being the Congress of the few, by the few, for the few.

CROWLEY: It was the Congress of the Republican Senate, the Republican House and the Republican White House which makes being Democratic leader less than satisfying, a job where you watch Republicans pass Medicare reform right under your nose, usurping an issue you thought was yours.

Being minority leader means you can't call the shots, you can only fire them.

PELOSI: I believe that we have to use some jiu jitsu on them. What they think is their strength will be their weakness. We'll use their strength against them. The Republican Medicare bill is not a step forward for seniors.

CROWLEY: The beauty of the new year is that a Republican majority Senate, House and a Republican president are a target rich (UNINTELLIGIBLE) for the minority.

PELOSI: And we will be, of course, using it against them in the elections as well.

CROWLEY: A new year, the second session of the 108th Congress and an election. The possibilities are endless as both sides mingle the political agenda and the legislative agenda until you can't tell one from the other.

PELOSI: It's about jobs, it's about education, about protecting the environment, about a sane energy policy, about expanding access to health care. There's a tremendous amount of unfinished business that this Congress has a responsibility to the public to take up.

CROWLEY: Nancy Pelosi is more than happy to be ringing in a new year with all its possibilities. Though a Gephardt supporter, she doesn't seem fazed by the prospect of victory for the man who once likened members of Congress to cockroaches.

PELOSI: Everybody talks about all these Democrats are concerned about Howard Dean. None of my colleagues nor none of any of our challengers have raised that concern with me.

CROWLEY: For House Minority Leader Nancy Pelosi, it is out with the old and in with the new whatever and whoever that is.

(END VIDEOTAPE)

CROWLEY: The end of '03, of course, a time to celebrate the possibilities of '04. After all, maybe this time next year Pelosi could be preparing for '05 as majority leader when she could call the shots.

During a campaign stop this week in Wisconsin, Democratic presidential candidate Howard Dean touted his ties to rural America, claiming he's the only candidate from a farm state. And now, the sparks are flying.

Congressman Dick Gephardt of Missouri calls Dean's claims absurd. the Missouri candidate says no other candidate in the race can hold a candle to his record on agricultural issues. Gephardt says Missouri has 110,000 farms compared to fewer than 7,000 in Vermont, Dean's home state. And five other Democratic candidates are also from states with more farms than Vermont.

There is much more to come from INSIDE POLITICS. When we return, we'll tell you about new state laws affecting school children and soft drinks, and what some older drivers will have to do to get their licenses renewed. Stay with us.

(COMMERCIAL BREAK)

CROWLEY: As 2003 draws to a close, we're looking back on the highlights on the years in politics. Our senior political analyst Bill Schneider checks in with his "Political Plays of the Year."

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: It's New Year's. And what would New Year's be without a few party favors? Before all acquaintances forgot, let's recall the top political plays of 2003. The first five today. (voice-over): The envelope, please. Play No. 10, Louisiana does it again. Remember back in 2002 how Republicans swept the mid-term elections? One state withstood the GOP tide. The Louisiana Senate race went to a December runoff. Despite the best efforts of the Bush White House, Louisiana reelected Democrat Mary Landrieu.

This year, Republicans picked up governorships in Kentucky and Mississippi. Once again, the Louisiana race went to a runoff. And once again, Louisiana resisted the GOP tide, and broke down a barrier.

SEN. MARY LANDRIEU (D), LOUISIANA: Kathleen Blanco was the most experienced, and the most qualified. The first woman governor to represent our state.

SCHNEIDER: Play No. 9, Judge Roy Moore of Alabama takes a stand for the Ten Commandments, at least for a granite monument of the Ten Commandants. And he pays a price for refusing to obey a federal court order to remove it.

WILLIAM THOMPSON, ALABAMA SUPREME COURT: This court hereby orders that Roy S. Moore be removed from his position of chief justice of the supreme court of Alabama.

SCHNEIDER: Moore instantly becomes a hero to the Religious Right, and a man with a political future.

JUSTICE TERRY BUTTS, MOORE'S ATTORNEY: He'll be back. He'll be back as a United States' senator or he'll be back as chief justice so he can run again.

SCHNEIDER: Play No.8, gay marriage gets on the political agenda. In June, the U.S. Supreme Court struck down a Texas law that criminalized homosexual activity. In his dissenting opinion, Justice Antonin Scalia notes, "This reasoning leaves on pretty shaky grounds state laws limiting marriage to opposite-sex couples."

He was right. Four months later, the Massachusetts supreme court ruled that the state could not deny the benefits of marriage to same- sex couples.

MARY BONAUTO, PLAINTIFF'S ATTORNEY: Gay people should have the right to enter into legal governmental marriage on exactly the same terms that everyone else can.

SCHNEIDER: Gay marriage is now the biggest social issue for 2004.

Play No. 7, Justice Sandra Day O'Connor becomes the critical swing vote on the U.S. Supreme Court. O'Connor wrote the decision allowing affirmative action in university admissions. O'Connor cast the decisive vote upholding campaign finance reform. O'Connor was the only justice who voted with the majority on every major Supreme Court decision during the past term.

How politically sensitive is she? She writes in her latest book, "Rare indeed is the legal victory that is not a careful byproduct of an emerging social consensus."

Play No. 6, the business cycle delivers for President Bush. Where are the jobs?, critics asked. Usually the jobs don't start coming back until two years after a recession ends. The recession ended for Bush's father in March 1991. Sure enough, the jobs started coming back in January 1993. Too late to save the first President Bush's job.

The son may be luckier. His recession ended in November 2001. The jobs started coming back in the fall of 2003, just in time for next year's election.

President Bush credits his tax cuts.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Not only the tax relief helped hard-working Americans with their pressures on their families and education needs, but it also helped the economy.

SCHNEIDER: And look at the stock market this year. There's enough good news about the economy that maybe, just maybe, voters won't notice that bush will very likely be the first president since Herbert Hoover to see a net loss of jobs over a four-year term.

(on camera): Tomorrow the countdown continues. Five, four, three, two, one! Happy election year!

Bill Schneider, CNN, Los Angeles.

(END VIDEOTAPE)

CROWLEY: Definitely always a hard act to follow. That is it for INSIDE POLITICS. I'm Candy Crowley. We all want you to have a safe New Year's Eve. "CROSSFIRE" is next.

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Tom DeLay>