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Inside Politics

All About Electability; Interview With Marc Racicot

Aired February 18, 2004 - 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)
HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I am no longer actively pursuing the presidency.

ANNOUNCER: One of the wildest rides in presidential campaign history comes to an end. What's next for Howard Dean?

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANIDIDATE: It appears we're in a two-man race.

ANNOUNCER: The Democratic contest after Wisconsin. How would John Kerry or John Edwards do against President Bush? We have new poll numbers that may surprise you.

The Bush camp carries on.

MARC RACICOT, BUSH CAMPAIGN CHAIRMAN: John Kerry's policies are precisely the wrong remedy for an economy that is now recovering.

ANNOUNCER: Is the president's team fixated on the Democratic front-runner? Mark Racicot gives Judy his first interview as Bush campaign chairman.

(END VIDEOTAPE)

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

JUDY WOODRUFF, HOST: Thank you for joining us for another "let's get our bearings now" Wednesday in the presidential race. There are plenty of developments to shake Democrat's equilibrium after yesterday's Wisconsin primary.

Howard Dean today pulled the plug on his campaign, leaving John Kerry and John Edwards to duke it out on Super Tuesday. Look for that one-on-one match-up to be even more interesting after Edwards' surprisingly close second-place finish in Wisconsin.

But wait, there is more. We have some striking new polls number that get to the heart of the matter for Democrats this primary season, electability. And as we always do with polls, let's bring in our senior political analyst, Bill Schneider, to explain it all.

First of all, Bill, what does this poll tell us about the electability of these two Democrats? WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, they are striking results, as you said. John Kerry is running on electability. He now leads President Bush by 12 points, 55 to 43 percent. John Edwards claims he's more electable than Kerry because he has more appeal to Independents and Republicans.

Well, is he? Edwards leads Bush by 10, virtually the same result. Edwards and Kerry are equally electable. Remember, this election will be a referendum on President Bush. It doesn't seem to make much difference which candidate the Democrats put up.

WOODRUFF: So Bill, why is the president so apparently so weak right now?

SCHNEIDER: Well, his credibility is under challenge on Iraq, on the budget, and on his record of military service. Right now, 55 percent of Americans say President Bush is honest and trustworthy. That represents a big drop in his credibility; the lowest it's ever been.

Slightly more than 61 percent believe John Kerry is honest and trustworthy. More people also say they agree with Kerry on the issues. Now, Kerry is a Massachusetts liberal and is supposed to be vulnerable on values. But the public doesn't see much difference between Bush and Kerry in terms of who shares your values. A small majority say they both do.

The very first attack ad the Republicans have run against Kerry accused him of being too close to special interests. Once again, the public doesn't see much difference between Bush and Kerry. Most Americans don't think either of them stands up to special interest groups.

WOODRUFF: Hmm. Well one thing we're going to be asking is, how much do February poll numbers apply to what happens in November? We can talk about that as the days go by.

SCHNEIDER: Yes, we will.

WOODRUFF: Bill, thank you.

Well, the chairman of the Bush-Cheney re-election campaign is downplaying our new poll numbers, saying that the president and his team have known all along that the fall campaign would be close.

(BEGIN VIDEO CLIP)

RACICOT: There's been a huge focus on the Democratic primary, and a lot of media coverage of those events. A lot of huge amounts of money spent attacking the president.

We predicted that we were probably going to be in a position where we would be trailing for a period of time. So I think that we've known all along that this is going to be a tough race, that there would be some period of time we'd be behind. And then as the race sharpened and the nominee was selected from the other side, that we would move into an ability to be able to contrast positions with candidates from the other side.

(END VIDEO CLIP)

WOODRUFF: Well, we'll have much more from Marc Racicot in his first television interview since taking the helm of the Bush-Cheney campaign.

And now to Howard Dean's swan song. The former Vermont governor says that his presidential bid may be over, but he is hoping the political movement he launched will live on.

Our senior political correspondent, Candy Crowley, was at Dean's speech today in Burlington, Vermont.

Hi, Candy.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Hi, Judy.

Interesting to sit here watching him talk, thinking that about two years ago this Summer, Howard Dean, a name nobody knew, began to campaign in New Hampshire and even in Iowa. He built it up to front- runner status, and just six weeks ago was leading in polls in most states. And then, of course, came today, when he had to pull out, having lost 17 contests in about a month.

Now, when Dean came to the podium, he didn't tell them anything he didn't know. But he seemed to begin to take a stab at the legacy thing.

(BEGIN VIDEO CLIP)

DEAN: We have demonstrated to other Democrats that it is a far better strategy to stand up against the right wing agenda of George W. Bush than it is to cooperate with it.

(END VIDEO CLIP)

CROWLEY: Indeed, a lot of Democrats will tell you at this point that Dean both dominated and defined the Democratic race for 2004 and wrote an awful lot of the dialogue. In his remarks, Judy, Dean talked about the fact that his name will still be on the ballot. He urged his supporters to continue to vote for progressive delegates to come to the convention so that they can continue to reshape the Democratic Party. And part of what he said sounded both promising, and then a little bit like a warning.

(BEGIN VIDEO CLIP)

DEAN: I will support the nominee of our party. I will do everything I can to beat George W. Bush. I urge you to do the same. But we will not be above in this organization of letting our nominee know that we expect them to adhere to the standards that this organization has set for decency, honesty, integrity and standing up for ordinary American working people.

(APPLAUSE) (END VIDEO CLIP)

CROWLEY: About that organization, Judy, not yet sure what form it will take. Clearly, what Howard Dean wants that the Democratic would like to tap into is that list of small donors previously unknown that contributed to the Dean campaign and kept it fueled for more than two years -- Judy.

WOODRUFF: All right. Candy, we're all going to be frying to figure out what he meant when he said "the fight will continue." We shall see.

Candy, thank you very much.

Well, with Dean out, John Edwards has what he wanted, a direct showdown with John Kerry for the Democratic nomination. As both candidates head into the big Super Tuesday battlegrounds, Edwards is feeling the Wisconsin wind at his back.

CNN's Dan Lothian has more from New York, where Edwards has private meetings today.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): On the road to the Democratic presidential nomination, Senator John Edwards is hoping momentum from his strong second-place showing in Wisconsin will help him move up the fast lane.

EDWARDS: The voters of Wisconsin sent a clear message. The message was this: objects in your mirror may be closer than they appear.

LOTHIAN: That rear view mirror illusion was shattered, says his campaign, by a key newspaper endorsement, an aggressive advertising campaign, support from Independents and some Republicans, and a focused message on jobs and trade. On CNN's "AMERICAN MORNING," Senator Edwards said his message will only sharpen in what has essentially become a two-person race with Senator John Kerry.

EDWARDS: I think voters need to see the difference in our views on what needs to be done about trade and how trade can work for America and American workers.

LOTHIAN: The Edwards campaign is also banking on important local endorsements, like the one he picked up Wednesday in Manhattan.

BILL DEBLASIO, CO-CHAIRMAN, EDWARDS NEW YORK CAMPAIGN: His message on the economy is going to resonate in upstate New York very, very powerfully. It's clear that upstate New York voters are looking for someone who will change our approach to jobs.

(END VIDEOTAPE)

LOTHIAN: Senator Edwards will be in New York later tonight for a fund-raiser. His campaign saying that their financial situation is in, "fine shape" through Super Tuesday. As for Howard Dean, Senator Edwards said that he has been a powerful voice for change, and earlier on today he said he would love to have his support -- Judy.

WOODRUFF: I'm sure he'd love to have the support of some of Dean's people, as well. All right. Dan, thank you very much.

Well, now we get to the front-runner, John Kerry. His campaign rolled into Ohio today, still echoing it's "a win is a win" in Wisconsin motto. But as CNN's Kelly Wallace reports, Kerry is watching his back, and John Edwards.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN NATIONAL CORRESPONDENT (voice-over): A seemingly relaxed John Kerry arrived in Dayton, Ohio, telling reporters he never expected to win overwhelmingly in Wisconsin. That he always thought it would be a tight race.

But he and his campaign were clearly hoping for a finish that might have forced not only Howard Dean, but also John Edwards out of the race. And now it appears the Kerry team, in a way to counter Edwards' late surge in Wisconsin, is raising questions about the senator's vocal opposition to the North American Free Trade Agreement, a trade deal Kerry supported.

KERRY: We have the same policy on trade. Exactly the same policy. He voted for the China trade agreement; so did I. And we -- both of us want to have labor agreements and environment agreements as part of a trade agreement.

WALLACE: The candidate then seemed to raise questions about where and when Edwards signaled his opposition to the trade deal before the current campaign.

KERRY: He wasn't in the Senate back then. I don't know where he registered his vote. But it wasn't in the Senate.

WALLACE: Kerry spoke to reporters before Howard Dean's announcement. He said that he and Dean talked last night, and he expressed great admiration for the former Vermont governor's campaign.

KERRY: He has done an extraordinary job of invigorating a whole group of people who were divorced from the political process and bringing them in, and being innovative and creative in the way in which he's done it. And I have great respect for that.

WALLACE (on camera): This campaign is now hoping that Howard Dean and his supporters get behind the Kerry candidacy. A senior Kerry adviser says that in past contests a large number of Dean's supporters cited John Kerry as their number two choice.

Kelly Wallace, CNN, Dayton, Ohio.

(END VIDEOTAPE)

WOODRUFF: After Kelly filed that report, she called in to tell us that the Kerry campaign says the senator did talk to Howard Dean this morning. Kerry congratulated Dean, saying that he should be proud of bringing so many people into the election process.

Well, Bush campaign honchos make no bones about it. They already have their sites on John Kerry, as we saw in their recent Web video.

(BEGIN VIDEO CLIP)

RACICOT: Well, John Kerry runs from his record, and that's what that particular ad was about. It was about the waffling, conflicting positions.

(END VIDEO CLIP)

WOODRUFF: Bush campaign chairman Marc Racicot talks about Kerry, the Democrats, and the Republican strategy next.

Also ahead, is timing everything? We'll look at the post-primary speeches and whether some upstaging was in the works.

And later, what did Wisconsin voters tell us about the Super Tuesday showdown ahead?

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: President Bush's campaign handlers say they know the race against the Democratic nominee will be a rough one. And they say they are prepared for that.

Earlier today, in his first interview in this job, the chairman of the campaign, Mark Racicot, spoke with me about the upcoming battle. First I asked him about the new poll numbers that show both John Kerry and John Edwards beating Mr. Bush in a head-to-head race.

(BEGIN VIDEOTAPE)

MARC RACICOT, BUSH-CHENEY CAMPAIGN CHAIRMAN: Well, I think it reaffirms our initial impression that this is going to be a very close race. We believed that from the beginning, the president has, and has certainly instructed all of us to that effect. We're going to have to work very, very hard.

The second thing I think it says is that it's in keeping with historical precedent. The fact of the matter is that if you search history, you'll find the same sort of dynamic. Clinton was behind Dole at a point in time in the process, and of course Reagan was behind Mondale.

WOODRUFF: And some of these previous polls you mentioned, those were sort of momentary periods where the incumbent was behind. In this instance, we've seen several polls over the last few weeks that have shown the president running behind John Kerry. This just happens to be the largest margin. Isn't this of greater concern to you given that? RACICOT: Well, to be very honest with you, we've been focused upon this being a very competitive race from the very beginning. We've never believed anything to the contrary. And it is not a surprise to us that we find ourselves in a position where there's a difference with the president not leading.

We've known we were going to have to work hard from the very beginning. But our steadfast belief is that, when the steady leadership of the president is characterized, and also defined, that there will be a clear choice for Americans to make.

WOODRUFF: Let's talk about what happened yesterday, last night in Wisconsin. Some would say this is kind of the worst scenario for you, for the Republicans, for the Bush-Cheney campaign, because instead of having a clear target to focus on, you now have a live contest still going on, on the part of the Democrats. Wouldn't it have been better for you to have this resolved sooner on their part?

RACICOT: Well, you know, we haven't gotten involved in a lot of speculation about which candidate may come through the primary process. We have focused pursuant to the president's direction upon his positive agenda and upon making sure we're well organized and prepared for the campaign, regardless who the nominee is. It still appears to me that the presumptive nominee is probably John Kerry. I mean, he has won virtually all -- and he won last night -- all of the primaries, but for South Carolina.

So the fact of the matter is, it appears that there's a -- even though a mathematical possibility of the contrary, that he's headed in that direction. But that aside, regardless of who the candidate is, we're going to be running about what the president is for, not necessarily against one individual candidate.

WOODRUFF: One of the reasons, in fact maybe the principal reason that John Edwards did so well in Wisconsin is this is a state that's been hit very hard by a loss of jobs, particularly jobs in the manufacturing sector. Time and again, voters were saying in the exit polls that this is something that mattered a lot to them.

Is that a danger sign for the Bush-Cheney campaign going into the general election, that you've got states like Wisconsin, which President Bush just lost by less than, what, 6,000 votes in the last election, where you've got a serious economic program facing so many voters?

RACICOT: Well, the president, as you know, has been focused upon two main issues that have confronted the American people. One is national security; the other one is the economy. Thank god he moved forward as quickly as he did to address the recession that he inherited. And we have seen the result of his policies, the steady leadership that he's provided there with the economic recovery that we've been experiencing.

So jobs is a very serious issue. But we have seen over the course of the last five months the largest increase in the number of jobs that we've had in a very long period of time. We've seen the economy be the strongest in the last half of last year than has been in 20 years. We've seen the unemployment rate to the lowest over the last several months than it's been in a decade. So the president's policies and steady leadership with the economy are, in fact, addressing this issue of jobs and job diminution that he inherited from a prior time.

Well, right now, I mean, even today you've got John Kerry going into the state of Ohio, another state important to the Republicans, been hit by big job losses. Kerry going after the president's economic record, talking about the president's tax cuts for people earning over $200,000 a year, saying those should be rolled back. Again, isn't -- is this a sign that Ohio, which has been reliably Republican in the past, is one more state that you all are really going to have to fight for this year?

RACICOT: Well, we'll have to work very hard in Ohio. But John Kerry's policies are precisely the wrong remedy for an economy that is now recovering. I mean he's in essence said, I'm going to raise taxes in the first 100 days of an administration that I preside over.

He's historically been against middle class tax reform. He's been against child tax credits. He's even imposed an increase in the gas tax as high as 50 cents in the past. So the steady leadership of the president, I think, we can contrast obviously against the kinds of things that John Kerry's thinking about that would move the economy backwards and further cripple the effort to move forward.

WOODRUFF: Well, he says he is talking about -- is looking very seriously at middle class tax cuts.

RACICOT: Well, in the past he has had a very strong record in opposition. In fact, he voted against the president's initiative to provide middle class tax cuts.

That's the thing about this president. He has always focused not only on principle but on people. So these tax cuts are focused upon middle class families and upon small businesses. And those are very, very important to the people of Ohio.

(END VIDEOTAPE)

WOODRUFF: Marc Racicot. He is the chairman of the Bush-Cheney campaign.

Well, win or lose, it is an election night tradition for candidates to address their followers. But we noticed an interesting trend last night in Wisconsin. Coming up, was the timing just coincidence?

(COMMERCIAL BREAK)

WOODRUFF: Last night's rush of events in Wisconsin had us reacting first and checking our clocks later for a special timeline edition of the "Campaign News Daily."

Our first stop, a few seconds short of 9:07 p.m. Central Time in Madison, Wisconsin. Howard Dean says his first "thank you" and begins speaking to supporters. Cable TV viewers are watching live.

Nine and a half minutes later, before Dean is finished, live coverage switches to Milwaukee, and we watch Senator John Edwards launch into his primary night speech. But just two minutes and 14 seconds later in Middletown, Wisconsin, who should start speaking but Senator John Kerry.

Live television coverage switches again, focusing on Senator Kerry, not on his rivals. Proving that in politics, whether it's coincidental or not timing is vital. Some say timing is everything.

Well, right now, it's time for us to take a break. Coming up, Bill Schneider looks at Wisconsin and finds some clues about what may happen in other states on Super Tuesday.

And later, why a special election in Kentucky is getting the attention of Democrats nationwide.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: The end of the ride?

DEAN: There are a lot of ways to make change. We are leaving one track but we are going on another track.

ANNOUNCER: We'll look back at the highs and lows from Howard Dean's run for the White House.

KERRY: I've always said these races are close. They're going to be contested.

ANNOUNCER: Why the close finish in Wisconsin? And what do last night's results tell us about what we can expect some Super Tuesday?

They agree on a lot. But not on everything.

EDWARDS: We have legitimate differences about issues like jobs and trade.

ANNOUNCER: We'll take a look at where senators Kerry and Edwards agree not to agree.

UNIDENTIFIED MALE: And I can tell you, I am deeply humbled to stand before you as the next congressman from central Kentucky.

ANNOUNCER: A rare win in the South for the Democrats. Is this a sign of things to come?

(END VIDEOTAPE)

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

WOODRUFF: Welcome back. For Howard Dean, the handwriting had been on the wall for some time. But that doesn't make his political journey any less amazing. Now that Dean has exited the Democratic race for the White House, it is worthwhile to consider how high he once soared and how far he fell.

Here now, our national correspondent, Bruce Morton.

(BEGIN VIDEOTAPE)

DEAN: I am no longer actively pursuing the presidency. We will, however, continue to build a new organization using our enormous grassroots network to continue the effort to transform the Democratic Party and to change our country.

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): And so it ended. Hard to remember how full of hope it was when it began.

DEAN: And today we stand in common purpose to take our country back.

MORTON: Like John McCain four years ago, he summoned young people to a cause bigger than themselves.

DEAN: This is a campaign to unite and empower people.

MORTON: Many responded.

UNIDENTIFIED MALE: His campaign to me inspires hope. And I think I'm tired of the Bush policies, which are based on fear.

MORTON: And his aggressive use of the Internet is something future campaigns will note and copy. His campaign says that through the end of 2003, more than 285,000 contributors raised between $18 million and $20 million on the net.

What went wrong? Voters in Iowa and later wanted someone who could beat George Bush. Dean wasn't that man for them.

THOMAS MANN, BROOKINGS INSTITUTION: Howard Dean moved too quickly from insurgent outsider to front runner to inevitable nominee. And he simply wasn't ready for the scrutiny, the attacks, the expectations of what a potential president should look and sound like.

UNIDENTIFIED MALE: In 2003 Democratic voters were looking for a vehicle to express their anger and frustration. In 2004 they were looking for a presidential nominee, somebody who could be commander in chief. And they felt that Howard Dean didn't fit that second bill.

MORTON: He stopped campaigning, but he and the young people he energized changed the tone of this campaign. They may want to remember what Edward Kennedy said at the end of his unsuccessful challenge to President Jimmy Carter in 1980, "The work goes on, the cause endures, the hope still lives, and the dream shall never die."

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Howard Dean promises to support the eventual Democratic nominee. But he did not endorse anyone today. He is urging supporters to stay active in the primary and to send delegates to the Democratic convention to keep energizing the party.

Dean leads the race No. 2, by the way, in the contest for delegates. After the Wisconsin primary John Kerry has 608. Dean 201, pretty far back. And John Edwards 190. Al Sharpton and Dennis Kucinich are way behind.

Both Kerry and Edwards are pressing full steam ahead into the delegate-rich Super Tuesday battle grounds. Edwards has private meetings today here in Washington and in New York, the second biggest prize coming up on March 2. Edwards is calling his unexpectedly close second place showing in yesterday's Wisconsin primary, quote, "An extraordinary victory."

The man who actually won in Wisconsin, John Kerry, is trying to get a jump-start on the Super Tuesday showdown by campaigning in Ohio. Ohio also is considered a crucial state in the general election. George W. Bush beat Al Gore there by just four percentage points.

And a new poll out in Ohio today shows the president's approval rating in the state has sunk to a new low of 49 percent.

Well, moving forward after Wisconsin, it pays to look in that rearview mirror that John Edwards so cleverly alluded to last night, to consider if any lessons were learned. Here's one again is our senior political analyst Bill Schneider.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Super Tuesday, Edwards versus Kerry. Are there any clues from Wisconsin about what to expect on March 2? Wisconsin was an open primary. Independents could vote. Their votes made Edwards competitive, and gave him his new message.

EDWARDS: The fact that independents are flocking to me, and supporting me in these primaries is powerful evidence that I would be the strongest candidate against George Bush.

SCHNEIDER: Here's good news for Edwards. Seven of the ten states that vote on Super Tuesday allow independents to participate. Those states in yellow on the map have 797 delegates. The three states in blue with 354 delegates allow only registered Democrats to vote.

Edwards is running as an economic populist.

EDWARDS: There are really two different Americas, one for families who get whatever they want whenever they need it, and then one for everybody else.

SCHNEIDER: Wisconsin has suffered severe job losses. The number of unemployed has gone up 56 percent since 2000. Wisconsin primary voters concerned about jobs went for Edwards. Six Super Tuesday states have seen jobless numbers rise by 50 percent or more since 2000.

Good news for Edwards? Well, four of those states are in Kerry's own New England. But Ohio and Minnesota may be open to Edwards' populist message -- unless Kerry manages to steal it from him.

KERRY: And we will create 500,000 new jobs by moving towards energy independence.

SCHNEIDER: White voters in Wisconsin were split between Edwards and Kerry. Wisconsin has only a small number of African-American voters but they came out strongly for Kerry and delivered Wisconsin for him. Late deciders in Wisconsin also broke strongly for Edwards.

EDWARDS: I think if the primary had taken place two or three days later I would have won.

SCHNEIDER: Super Tuesday is two weeks later. If Democrats are experiencing buyers remorse over Kerry, Edwards' momentum could build.

(END VIDEOTAPE)

SCHNEIDER: Where will the Dean vote go? According to our Wisconsin exit poll, Dean lost the majority of his former supporters by primary day. And where did they go? Well Kerry over Edwards by a very narrow margin -- Judy.

WOODRUFF: But very narrow.

SCHNEIDER: Narrow. Closely split. In fact it was 47 Kerry, 41 Edwards.

WOODRUFF: All right. Bill Schneider. A lot to pore over with those exit poll numbers. We're still looking at them.

Well the Wisconsin primary also helped to drive home differences between Kerry and Dean (sic) on a handful of issues. Those differences are rather nuanced on gay marriage.

Edwards says that same-sex marriages should be a matter for states to decide, but he supports partnership benefits. Kerry also supports those benefits, while opposing gay marriage.

It is more clear-cut on the death penalty. Edwards is on record as supporting it, Kerry is against it.

On trade, there is some controversy. Edwards says he opposed the North American Free Trade Agreement, although he was not in the Senate when it was voted on. Kerry voted for it and he is beginning to question Edwards' stand.

(BEGIN VIDEO CLIP)

EDWARDS: We have legitimate differences about issues like jobs and trade. Senator Kerry supported NAFTA and other trade agreements. I was against NAFTA, and some of the trade agreements that he was for.

KERRY: Well he wasn't in the Senate back then. I don't know where he registered his vote. But it wasn't in the Senate.

(END VIDEO CLIP)

WOODRUFF: Well, while Edwards and Kerry go after each other, our new poll shows that both Democrats are beating President Bush in head- to-head match-ups. As we reported a little earlier the CNN/"USA Today"/Gallup survey taken Monday and Tuesday shows Kerry 12 points ahead of Mr. Bush, and Edwards 10 points ahead of the president.

And then today the '04 Democrats appear to have some new ammunition against the president on the jobs front. Let's bring in our White House correspondent Dana Bash on that -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Judy. and the issue here today at the White House is a figure in this report put out a couple of weeks ago by the president's Council of Economic Advisers, and it bears the president's signature.

It says that 2.6 million jobs will be created in the year 2004 alone. Now as you well know, Judy, in politics high expectations, particularly if they are not met creates, instant ammo for your political opponents, particularly on the jobs issue which Democrats do see as the president's top vulnerability on the domestic front in this election year.

Yesterday the president's treasury and commerce secretaries while traveling the Pacific Northwest came out and essentially distanced themselves from this figure, from the optimistic forecast. Today, Mr. Bush himself also stopped short of repeating the prediction when asked, saying simply that the economy is getting better, that jobs have been gained in recent months.

The White House spokesman said that the 2.6 million new jobs forecast is the work of the numbers crunchers at the White House. And the president is not a statistician.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: You know, I think that people can debate the numbers all they want. The president is focused on acting on policies to create as robust an environment for job creation as possible so that we can help those who are hurting because they were looking for work and cannot find a job.

(END VIDEO CLIP)

BASH: Now Democrats from Capitol Hill to the campaign trail immediately jumped on this issue. Senators like Ted Kennedy, Hillary Clinton and others wrote the president today saying that they want the president to send up a new jobs forecast. In a not so subtle dig, asking him to send one up that his own cabinet would endorse.

On the campaign trail Democratic front runner John Kerry suggested that there have been other predictions that the president said would come true based on his tax cuts that haven't exactly come out to bear. He also suggested that this has become a credibility issue.

(BEGIN VIDEO CLIP)

KERRY: I immediately said that those predictions would fall short based on the promises they made with respect to the tax cut, which was supposed to give a million jobs. It didn't, it lost a million. The next tax cut was supposed to produce a million jobs. Lost a million. And now they're already walking backwards in their own predictions.

(END VIDEO CLIP)

BASH: Now when asked today if it was, perhaps, a mistake to make a rosy prediction on such a political hot potato like jobs when that is such a big issue on the campaign trail the White House spokesman Scott McClellan simply called that question a trap. Back to you, Judy.

WOODRUFF: All right. So, Dana, I guess they're still on the record with an official projection of 2.6 million jobs.

BASH: That's right.

WOODRUFF: OK. Dana, thank you.

Well we all know that there can be second acts in politics. The latest proof is in Kentucky. Coming up, a candidate who came up short last November who now has reason to celebrate.

Also, we look ahead to the biggest prize on Super Tuesday. How will California test the Democratic candidates?

And Michael Deaver talks about the subject of his new book, former first lady Nancy Reagan.

(COMMERCIAL BREAK)

WOODRUFF: Wisconsin wasn't the only place where voters went to the polls yesterday. There was a special election in Kentucky for a seat in Congress. Both national political parties were watching this race, trying to see if it would be a sign of things to come this fall.

(BEGIN VIDEOTAPE)

BEN CHANDLER (D), KENTUCKY CONG-ELECT: I am deeply humbled to stand before you as the next Congressman from central Kentucky.

WOODRUFF (voice-over): Democrat Ben Chandler's easy win represented a political rebound for him and for his party. Just three months ago, Chandler lost the governor's race to Republican representative Ernie Fletcher. Only to turn around and win the congressional seat Fletcher left behind. Chandler is the first Democrat since 1991 to win a Republican-held seat in a special election.

REP. ALICE FORGY KERR (R), KENTUCKY: We were hoping for a different outcome.

WOODRUFF: Chandler's Republican opponent, Alice Forgy Kerr, based her campaign in large part on her support of President Bush. She even appeared with Bush in a campaign ad. Democrats are eager to see the Kentucky vote as a referendum on the president as they battle to regain control of the House, and the White House. But Republicans say Chandler simply ran a better race, and had better name recognition. As a former state attorney general, and member of a famous Kentucky political family.

STUART ROTHENBERG, "ROTHENBERG POLITICAL REPORT": First and foremost I think it was about the candidates, but I think it is fair for Democrats to say that George W. Bush did not carry the Republican across the finish line.

WOODRUFF: National leaders of both parties put a lot of money and effort into the race, knowing it might be seen as a bellwether.

ROTHENBERG: I don't think the special election results really have much predictive value. I suspect that the fight for the House will be limited to a couple dozen seats.

(END VIDEOTAPE)

WOODRUFF: One of our favorites there, Stu Rothenberg.

Well, it's a hot button political issue in California. Just ahead, the gay marriage license controversy in San Francisco is just one of the issues we'll talk about with "Hotline" editor Chuck Todd.

(COMMERCIAL BREAK)

WOODRUFF: Howard Dean's campaign debt, and some issues in California. Joining us now to talk about all this, Chuck Todd, editor-in-chief of "The Hotline," the insider's political briefing produced every day by the "National Journal." Chuck, let's talk about how much money Howard Dean raised and how much he owes.

CHUCK TODD, "THE HOTLINE": We have some final numbers that we were able to get our hands on. The final fund-raising number is incredibly astonishing. They crossed the $50 million mark this past weekend.

WOODRUFF: Astonishing.

TODD: I did the numbers and you guys have 201 delegates that Dean received. I did it via 200. A little easier on the math. It's $250,000 a delegate. Which is still a bargain, though compared to John Connally (ph) back in 1980.

WOODRUFF: I was going to say John Connally kind of broke the record. TODD: Absolutely. But he's got a campaign debt, believe it or not, of about half a million dollars. And they're sending out a fund- raising letter in the next couple of days to try to raise money to finish off that debt.

WOODRUFF: Will we ever know what the $50 million went for?

TODD: It's going to be one of the longest FEC (ph) reports. We're all going to want to be going through on April 15 by the time they do it. It's going to be an interesting thing for about five reporters.

WOODRUFF: All right, Super Tuesday, the big enchilada, if you will, is California. You're looking at a couple of things out there.

TODD: Well, it's interesting. First of all, both Kerry and Edwards, when they go out there, they're not alone on the campaign trail as they have been everywhere else they've been. There's a bond initiative. Never mind the hot political issue in San Francisco right now is gay marriage and the whole court battle about whether the city can be granting marriage licenses. So there's so many hot button issues one wonders, will they -- how much time will they really want to spend in California because what they say on that one issue could turn into a press day that disrupts their other campaigning. So it wouldn't be surprising to only see those guys out there for the big CNN debate. Beyond that there's too many potential pitfalls for them to get into trouble with with other issues that they're trying to do.

WOODRUFF: The other thing you're looking at is what Arnold Schwarzenegger the governor has on the line.

TODD: Well, he's got -- that's the other thing. He's this dominant political force right now in the state. Republicans are relying on him heavily. Bill Jones is a Republican candidate for U.S. Senate and a very tough primary that no one knows about. The only money Bill Jones has spent is on a direct mail piece that features Arnold Schwarzenegger. Schwarzenegger endorsed him. So we're going to find out what kind of political muscle -- we know what kind of real muscle Schwarzenegger has, but we've got to see if he's got political muscle.

If he can win Bill Jones, he's endorsing candidates that are running against people that don't favor his bond initiative. He's trying to get his bond initiative passed. If he can make all this happen, don't think that the people over at 1600 Pennsylvania Avenue won't take notice and decide maybe Arnold Schwarzenegger is a helpful person to get Republicans elected, including maybe even George Bush. But, Arnold's got a lot to prove on March 2. Almost more so than the presidential race.

WOODRUFF: We know one thing Schwarzenegger -- the governor gave Bill Jones and that's his press list because I get all the Jones e- mails. I was on the governor's e-mail list, still am. And now I'm happy to be on Mr. Jones' e-mail list.

TODD: That's certainly a way to keep up with it. WOODRUFF: All right thank you, Chuck Todd. "The Hotline," an insider's political briefing produced every day, as we said, by "The National Journal." You can go online to NationalJournal.com for prescription information.

Just ahead on INSIDE POLITICS, some new insights on Nancy Reagan. A close friend of the former first lady, Michael Deaver, is out with a new book. He joins us to talk about his personal and professional relationship with Nancy Reagan when we return.

(COMMERCIAL BREAK)

WOODRUFF: Michael Deaver's relationship with Nancy Reagan goes back decades. Now the former White House aide to President Reagan has written a new book, "Nancy: A Portrait of My Years With Nancy Reagan."

Michael Deaver is with me now to talk more about the book and his friendship with Mrs. Reagan. Good to see you. Thank you for coming by.

MICHAEL DEAVER, AUTHOR: Thank you.

WOODRUFF: So much has been written about Nancy Reagan. We feel like we know so much about this woman. What was missing out there that you wanted to fill in?

DEAVER: Well, I think that there was real flesh and blood. That there was something -- Nancy was sort of a paper cutout for people, and they never could sort of reach and touch inside of her.

That's what I've tried to show in this book. That she is a real person. That she had feelings. That she was not a particularly political animal. She didn't drive her husband. She was not a puppeteer who made it all work. She was just somebody who adored Ronald Reagan.

WOODRUFF: Not a political animal. But you do say, Michael Deaver, she was the strategist of the first couple.

Now I think some people would be surprised to hear that as complicated and demanding as the presidency is that the president is not someone who does strategic thinking. What did you mean by that?

DEAVER: Well, I didn't mean that. I meant that Nancy was the one who asked the tough questions. Ronald Reagan had the vision. Ronald Reagan knew exactly what it was he wanted to do.

Nancy was the one that would say but, Ronnie, you know, how is this going to work? Do you know who the staff are going to be? How much is this going to cost? What happens if we lose?

All of those tough questions that the candidate who gets sort of carried away with all of the excitement, and dreams of what he wants to do.

WOODRUFF: You said at one point she was the one who couldn't sit back and just let fate happen the way her husband could.

DEAVER: Her husband believed in destiny. But Nancy said destiny may need a little help.

WOODRUFF: You've got so much in here about the worthwhile things that she did and things that are really admirable about her. But of course I want to ask you about a couple of the controversial things.

You do write about the astrologer that she turned to after John Hinkley made the attempt on her husband's life. You write that she actually ran the president's schedule by this astrologer and that you sometimes changed the president's schedule. Did you...

DEAVER: Well, what I wrote was that she, after the assassination which was -- assassination attempt, which was her worst nightmare, I mean it was something she always feared would happen. When it happened she reached out because she heard that this woman had predicted it would happen.

I saw no harm in saying to her, Give me those dates in the future that you may see, and I'll plug them into the schedule. Nothing was ever changed.

But there were days that, frankly, I kept him in the White House. There was nothing wrong with that.

WOODRUFF: You said at one point perhaps I should have tried harder to veto the whole business.

DEAVER: Well, and looking at hindsight about every interview for eons always brings up the astrology. I don't hear too many people asking Hillary about her channeling with Eleanor Roosevelt in the Lincoln Room. But anyway.

WOODRUFF: Well, speaking of the Clintons, you do mention them on a couple of occasions. You write about the occasion in 1998 when President Clinton was there to dedicate one of the Ronald Reagan buildings here in Washington.

And you write about how he embraced Mrs. Reagan, and you said, the look on her face, you said she looked like a mugger had embraced her. What was that all about?

DEAVER: Well, we were in a room and all of a sudden it was like he appeared. I didn't even hear the doors open and suddenly she was in the arms of Bill Clinton. And yes, she was totally shocked and surprised.

WOODRUFF: Not a lot of affection there, it sounds like.

Michael Deaver, dear friend of Nancy Reagan and Ronald Reagan and longtime aide to Ronald Reagan. Great of you to come by. The book is "Nancy: A Portrait of My Years With Nancy Reagan." Thank you very much.

DEAVER: Thank you. WOODRUFF: We appreciate it.

And that's it for this day's INSIDE POLITICS. I'm Judy Woodruff. "CROSSFIRE" starts right now.

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







Aired February 18, 2004 - 15:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I am no longer actively pursuing the presidency.

ANNOUNCER: One of the wildest rides in presidential campaign history comes to an end. What's next for Howard Dean?

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANIDIDATE: It appears we're in a two-man race.

ANNOUNCER: The Democratic contest after Wisconsin. How would John Kerry or John Edwards do against President Bush? We have new poll numbers that may surprise you.

The Bush camp carries on.

MARC RACICOT, BUSH CAMPAIGN CHAIRMAN: John Kerry's policies are precisely the wrong remedy for an economy that is now recovering.

ANNOUNCER: Is the president's team fixated on the Democratic front-runner? Mark Racicot gives Judy his first interview as Bush campaign chairman.

(END VIDEOTAPE)

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

JUDY WOODRUFF, HOST: Thank you for joining us for another "let's get our bearings now" Wednesday in the presidential race. There are plenty of developments to shake Democrat's equilibrium after yesterday's Wisconsin primary.

Howard Dean today pulled the plug on his campaign, leaving John Kerry and John Edwards to duke it out on Super Tuesday. Look for that one-on-one match-up to be even more interesting after Edwards' surprisingly close second-place finish in Wisconsin.

But wait, there is more. We have some striking new polls number that get to the heart of the matter for Democrats this primary season, electability. And as we always do with polls, let's bring in our senior political analyst, Bill Schneider, to explain it all.

First of all, Bill, what does this poll tell us about the electability of these two Democrats? WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, they are striking results, as you said. John Kerry is running on electability. He now leads President Bush by 12 points, 55 to 43 percent. John Edwards claims he's more electable than Kerry because he has more appeal to Independents and Republicans.

Well, is he? Edwards leads Bush by 10, virtually the same result. Edwards and Kerry are equally electable. Remember, this election will be a referendum on President Bush. It doesn't seem to make much difference which candidate the Democrats put up.

WOODRUFF: So Bill, why is the president so apparently so weak right now?

SCHNEIDER: Well, his credibility is under challenge on Iraq, on the budget, and on his record of military service. Right now, 55 percent of Americans say President Bush is honest and trustworthy. That represents a big drop in his credibility; the lowest it's ever been.

Slightly more than 61 percent believe John Kerry is honest and trustworthy. More people also say they agree with Kerry on the issues. Now, Kerry is a Massachusetts liberal and is supposed to be vulnerable on values. But the public doesn't see much difference between Bush and Kerry in terms of who shares your values. A small majority say they both do.

The very first attack ad the Republicans have run against Kerry accused him of being too close to special interests. Once again, the public doesn't see much difference between Bush and Kerry. Most Americans don't think either of them stands up to special interest groups.

WOODRUFF: Hmm. Well one thing we're going to be asking is, how much do February poll numbers apply to what happens in November? We can talk about that as the days go by.

SCHNEIDER: Yes, we will.

WOODRUFF: Bill, thank you.

Well, the chairman of the Bush-Cheney re-election campaign is downplaying our new poll numbers, saying that the president and his team have known all along that the fall campaign would be close.

(BEGIN VIDEO CLIP)

RACICOT: There's been a huge focus on the Democratic primary, and a lot of media coverage of those events. A lot of huge amounts of money spent attacking the president.

We predicted that we were probably going to be in a position where we would be trailing for a period of time. So I think that we've known all along that this is going to be a tough race, that there would be some period of time we'd be behind. And then as the race sharpened and the nominee was selected from the other side, that we would move into an ability to be able to contrast positions with candidates from the other side.

(END VIDEO CLIP)

WOODRUFF: Well, we'll have much more from Marc Racicot in his first television interview since taking the helm of the Bush-Cheney campaign.

And now to Howard Dean's swan song. The former Vermont governor says that his presidential bid may be over, but he is hoping the political movement he launched will live on.

Our senior political correspondent, Candy Crowley, was at Dean's speech today in Burlington, Vermont.

Hi, Candy.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Hi, Judy.

Interesting to sit here watching him talk, thinking that about two years ago this Summer, Howard Dean, a name nobody knew, began to campaign in New Hampshire and even in Iowa. He built it up to front- runner status, and just six weeks ago was leading in polls in most states. And then, of course, came today, when he had to pull out, having lost 17 contests in about a month.

Now, when Dean came to the podium, he didn't tell them anything he didn't know. But he seemed to begin to take a stab at the legacy thing.

(BEGIN VIDEO CLIP)

DEAN: We have demonstrated to other Democrats that it is a far better strategy to stand up against the right wing agenda of George W. Bush than it is to cooperate with it.

(END VIDEO CLIP)

CROWLEY: Indeed, a lot of Democrats will tell you at this point that Dean both dominated and defined the Democratic race for 2004 and wrote an awful lot of the dialogue. In his remarks, Judy, Dean talked about the fact that his name will still be on the ballot. He urged his supporters to continue to vote for progressive delegates to come to the convention so that they can continue to reshape the Democratic Party. And part of what he said sounded both promising, and then a little bit like a warning.

(BEGIN VIDEO CLIP)

DEAN: I will support the nominee of our party. I will do everything I can to beat George W. Bush. I urge you to do the same. But we will not be above in this organization of letting our nominee know that we expect them to adhere to the standards that this organization has set for decency, honesty, integrity and standing up for ordinary American working people.

(APPLAUSE) (END VIDEO CLIP)

CROWLEY: About that organization, Judy, not yet sure what form it will take. Clearly, what Howard Dean wants that the Democratic would like to tap into is that list of small donors previously unknown that contributed to the Dean campaign and kept it fueled for more than two years -- Judy.

WOODRUFF: All right. Candy, we're all going to be frying to figure out what he meant when he said "the fight will continue." We shall see.

Candy, thank you very much.

Well, with Dean out, John Edwards has what he wanted, a direct showdown with John Kerry for the Democratic nomination. As both candidates head into the big Super Tuesday battlegrounds, Edwards is feeling the Wisconsin wind at his back.

CNN's Dan Lothian has more from New York, where Edwards has private meetings today.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): On the road to the Democratic presidential nomination, Senator John Edwards is hoping momentum from his strong second-place showing in Wisconsin will help him move up the fast lane.

EDWARDS: The voters of Wisconsin sent a clear message. The message was this: objects in your mirror may be closer than they appear.

LOTHIAN: That rear view mirror illusion was shattered, says his campaign, by a key newspaper endorsement, an aggressive advertising campaign, support from Independents and some Republicans, and a focused message on jobs and trade. On CNN's "AMERICAN MORNING," Senator Edwards said his message will only sharpen in what has essentially become a two-person race with Senator John Kerry.

EDWARDS: I think voters need to see the difference in our views on what needs to be done about trade and how trade can work for America and American workers.

LOTHIAN: The Edwards campaign is also banking on important local endorsements, like the one he picked up Wednesday in Manhattan.

BILL DEBLASIO, CO-CHAIRMAN, EDWARDS NEW YORK CAMPAIGN: His message on the economy is going to resonate in upstate New York very, very powerfully. It's clear that upstate New York voters are looking for someone who will change our approach to jobs.

(END VIDEOTAPE)

LOTHIAN: Senator Edwards will be in New York later tonight for a fund-raiser. His campaign saying that their financial situation is in, "fine shape" through Super Tuesday. As for Howard Dean, Senator Edwards said that he has been a powerful voice for change, and earlier on today he said he would love to have his support -- Judy.

WOODRUFF: I'm sure he'd love to have the support of some of Dean's people, as well. All right. Dan, thank you very much.

Well, now we get to the front-runner, John Kerry. His campaign rolled into Ohio today, still echoing it's "a win is a win" in Wisconsin motto. But as CNN's Kelly Wallace reports, Kerry is watching his back, and John Edwards.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN NATIONAL CORRESPONDENT (voice-over): A seemingly relaxed John Kerry arrived in Dayton, Ohio, telling reporters he never expected to win overwhelmingly in Wisconsin. That he always thought it would be a tight race.

But he and his campaign were clearly hoping for a finish that might have forced not only Howard Dean, but also John Edwards out of the race. And now it appears the Kerry team, in a way to counter Edwards' late surge in Wisconsin, is raising questions about the senator's vocal opposition to the North American Free Trade Agreement, a trade deal Kerry supported.

KERRY: We have the same policy on trade. Exactly the same policy. He voted for the China trade agreement; so did I. And we -- both of us want to have labor agreements and environment agreements as part of a trade agreement.

WALLACE: The candidate then seemed to raise questions about where and when Edwards signaled his opposition to the trade deal before the current campaign.

KERRY: He wasn't in the Senate back then. I don't know where he registered his vote. But it wasn't in the Senate.

WALLACE: Kerry spoke to reporters before Howard Dean's announcement. He said that he and Dean talked last night, and he expressed great admiration for the former Vermont governor's campaign.

KERRY: He has done an extraordinary job of invigorating a whole group of people who were divorced from the political process and bringing them in, and being innovative and creative in the way in which he's done it. And I have great respect for that.

WALLACE (on camera): This campaign is now hoping that Howard Dean and his supporters get behind the Kerry candidacy. A senior Kerry adviser says that in past contests a large number of Dean's supporters cited John Kerry as their number two choice.

Kelly Wallace, CNN, Dayton, Ohio.

(END VIDEOTAPE)

WOODRUFF: After Kelly filed that report, she called in to tell us that the Kerry campaign says the senator did talk to Howard Dean this morning. Kerry congratulated Dean, saying that he should be proud of bringing so many people into the election process.

Well, Bush campaign honchos make no bones about it. They already have their sites on John Kerry, as we saw in their recent Web video.

(BEGIN VIDEO CLIP)

RACICOT: Well, John Kerry runs from his record, and that's what that particular ad was about. It was about the waffling, conflicting positions.

(END VIDEO CLIP)

WOODRUFF: Bush campaign chairman Marc Racicot talks about Kerry, the Democrats, and the Republican strategy next.

Also ahead, is timing everything? We'll look at the post-primary speeches and whether some upstaging was in the works.

And later, what did Wisconsin voters tell us about the Super Tuesday showdown ahead?

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: President Bush's campaign handlers say they know the race against the Democratic nominee will be a rough one. And they say they are prepared for that.

Earlier today, in his first interview in this job, the chairman of the campaign, Mark Racicot, spoke with me about the upcoming battle. First I asked him about the new poll numbers that show both John Kerry and John Edwards beating Mr. Bush in a head-to-head race.

(BEGIN VIDEOTAPE)

MARC RACICOT, BUSH-CHENEY CAMPAIGN CHAIRMAN: Well, I think it reaffirms our initial impression that this is going to be a very close race. We believed that from the beginning, the president has, and has certainly instructed all of us to that effect. We're going to have to work very, very hard.

The second thing I think it says is that it's in keeping with historical precedent. The fact of the matter is that if you search history, you'll find the same sort of dynamic. Clinton was behind Dole at a point in time in the process, and of course Reagan was behind Mondale.

WOODRUFF: And some of these previous polls you mentioned, those were sort of momentary periods where the incumbent was behind. In this instance, we've seen several polls over the last few weeks that have shown the president running behind John Kerry. This just happens to be the largest margin. Isn't this of greater concern to you given that? RACICOT: Well, to be very honest with you, we've been focused upon this being a very competitive race from the very beginning. We've never believed anything to the contrary. And it is not a surprise to us that we find ourselves in a position where there's a difference with the president not leading.

We've known we were going to have to work hard from the very beginning. But our steadfast belief is that, when the steady leadership of the president is characterized, and also defined, that there will be a clear choice for Americans to make.

WOODRUFF: Let's talk about what happened yesterday, last night in Wisconsin. Some would say this is kind of the worst scenario for you, for the Republicans, for the Bush-Cheney campaign, because instead of having a clear target to focus on, you now have a live contest still going on, on the part of the Democrats. Wouldn't it have been better for you to have this resolved sooner on their part?

RACICOT: Well, you know, we haven't gotten involved in a lot of speculation about which candidate may come through the primary process. We have focused pursuant to the president's direction upon his positive agenda and upon making sure we're well organized and prepared for the campaign, regardless who the nominee is. It still appears to me that the presumptive nominee is probably John Kerry. I mean, he has won virtually all -- and he won last night -- all of the primaries, but for South Carolina.

So the fact of the matter is, it appears that there's a -- even though a mathematical possibility of the contrary, that he's headed in that direction. But that aside, regardless of who the candidate is, we're going to be running about what the president is for, not necessarily against one individual candidate.

WOODRUFF: One of the reasons, in fact maybe the principal reason that John Edwards did so well in Wisconsin is this is a state that's been hit very hard by a loss of jobs, particularly jobs in the manufacturing sector. Time and again, voters were saying in the exit polls that this is something that mattered a lot to them.

Is that a danger sign for the Bush-Cheney campaign going into the general election, that you've got states like Wisconsin, which President Bush just lost by less than, what, 6,000 votes in the last election, where you've got a serious economic program facing so many voters?

RACICOT: Well, the president, as you know, has been focused upon two main issues that have confronted the American people. One is national security; the other one is the economy. Thank god he moved forward as quickly as he did to address the recession that he inherited. And we have seen the result of his policies, the steady leadership that he's provided there with the economic recovery that we've been experiencing.

So jobs is a very serious issue. But we have seen over the course of the last five months the largest increase in the number of jobs that we've had in a very long period of time. We've seen the economy be the strongest in the last half of last year than has been in 20 years. We've seen the unemployment rate to the lowest over the last several months than it's been in a decade. So the president's policies and steady leadership with the economy are, in fact, addressing this issue of jobs and job diminution that he inherited from a prior time.

Well, right now, I mean, even today you've got John Kerry going into the state of Ohio, another state important to the Republicans, been hit by big job losses. Kerry going after the president's economic record, talking about the president's tax cuts for people earning over $200,000 a year, saying those should be rolled back. Again, isn't -- is this a sign that Ohio, which has been reliably Republican in the past, is one more state that you all are really going to have to fight for this year?

RACICOT: Well, we'll have to work very hard in Ohio. But John Kerry's policies are precisely the wrong remedy for an economy that is now recovering. I mean he's in essence said, I'm going to raise taxes in the first 100 days of an administration that I preside over.

He's historically been against middle class tax reform. He's been against child tax credits. He's even imposed an increase in the gas tax as high as 50 cents in the past. So the steady leadership of the president, I think, we can contrast obviously against the kinds of things that John Kerry's thinking about that would move the economy backwards and further cripple the effort to move forward.

WOODRUFF: Well, he says he is talking about -- is looking very seriously at middle class tax cuts.

RACICOT: Well, in the past he has had a very strong record in opposition. In fact, he voted against the president's initiative to provide middle class tax cuts.

That's the thing about this president. He has always focused not only on principle but on people. So these tax cuts are focused upon middle class families and upon small businesses. And those are very, very important to the people of Ohio.

(END VIDEOTAPE)

WOODRUFF: Marc Racicot. He is the chairman of the Bush-Cheney campaign.

Well, win or lose, it is an election night tradition for candidates to address their followers. But we noticed an interesting trend last night in Wisconsin. Coming up, was the timing just coincidence?

(COMMERCIAL BREAK)

WOODRUFF: Last night's rush of events in Wisconsin had us reacting first and checking our clocks later for a special timeline edition of the "Campaign News Daily."

Our first stop, a few seconds short of 9:07 p.m. Central Time in Madison, Wisconsin. Howard Dean says his first "thank you" and begins speaking to supporters. Cable TV viewers are watching live.

Nine and a half minutes later, before Dean is finished, live coverage switches to Milwaukee, and we watch Senator John Edwards launch into his primary night speech. But just two minutes and 14 seconds later in Middletown, Wisconsin, who should start speaking but Senator John Kerry.

Live television coverage switches again, focusing on Senator Kerry, not on his rivals. Proving that in politics, whether it's coincidental or not timing is vital. Some say timing is everything.

Well, right now, it's time for us to take a break. Coming up, Bill Schneider looks at Wisconsin and finds some clues about what may happen in other states on Super Tuesday.

And later, why a special election in Kentucky is getting the attention of Democrats nationwide.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: The end of the ride?

DEAN: There are a lot of ways to make change. We are leaving one track but we are going on another track.

ANNOUNCER: We'll look back at the highs and lows from Howard Dean's run for the White House.

KERRY: I've always said these races are close. They're going to be contested.

ANNOUNCER: Why the close finish in Wisconsin? And what do last night's results tell us about what we can expect some Super Tuesday?

They agree on a lot. But not on everything.

EDWARDS: We have legitimate differences about issues like jobs and trade.

ANNOUNCER: We'll take a look at where senators Kerry and Edwards agree not to agree.

UNIDENTIFIED MALE: And I can tell you, I am deeply humbled to stand before you as the next congressman from central Kentucky.

ANNOUNCER: A rare win in the South for the Democrats. Is this a sign of things to come?

(END VIDEOTAPE)

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

WOODRUFF: Welcome back. For Howard Dean, the handwriting had been on the wall for some time. But that doesn't make his political journey any less amazing. Now that Dean has exited the Democratic race for the White House, it is worthwhile to consider how high he once soared and how far he fell.

Here now, our national correspondent, Bruce Morton.

(BEGIN VIDEOTAPE)

DEAN: I am no longer actively pursuing the presidency. We will, however, continue to build a new organization using our enormous grassroots network to continue the effort to transform the Democratic Party and to change our country.

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): And so it ended. Hard to remember how full of hope it was when it began.

DEAN: And today we stand in common purpose to take our country back.

MORTON: Like John McCain four years ago, he summoned young people to a cause bigger than themselves.

DEAN: This is a campaign to unite and empower people.

MORTON: Many responded.

UNIDENTIFIED MALE: His campaign to me inspires hope. And I think I'm tired of the Bush policies, which are based on fear.

MORTON: And his aggressive use of the Internet is something future campaigns will note and copy. His campaign says that through the end of 2003, more than 285,000 contributors raised between $18 million and $20 million on the net.

What went wrong? Voters in Iowa and later wanted someone who could beat George Bush. Dean wasn't that man for them.

THOMAS MANN, BROOKINGS INSTITUTION: Howard Dean moved too quickly from insurgent outsider to front runner to inevitable nominee. And he simply wasn't ready for the scrutiny, the attacks, the expectations of what a potential president should look and sound like.

UNIDENTIFIED MALE: In 2003 Democratic voters were looking for a vehicle to express their anger and frustration. In 2004 they were looking for a presidential nominee, somebody who could be commander in chief. And they felt that Howard Dean didn't fit that second bill.

MORTON: He stopped campaigning, but he and the young people he energized changed the tone of this campaign. They may want to remember what Edward Kennedy said at the end of his unsuccessful challenge to President Jimmy Carter in 1980, "The work goes on, the cause endures, the hope still lives, and the dream shall never die."

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Howard Dean promises to support the eventual Democratic nominee. But he did not endorse anyone today. He is urging supporters to stay active in the primary and to send delegates to the Democratic convention to keep energizing the party.

Dean leads the race No. 2, by the way, in the contest for delegates. After the Wisconsin primary John Kerry has 608. Dean 201, pretty far back. And John Edwards 190. Al Sharpton and Dennis Kucinich are way behind.

Both Kerry and Edwards are pressing full steam ahead into the delegate-rich Super Tuesday battle grounds. Edwards has private meetings today here in Washington and in New York, the second biggest prize coming up on March 2. Edwards is calling his unexpectedly close second place showing in yesterday's Wisconsin primary, quote, "An extraordinary victory."

The man who actually won in Wisconsin, John Kerry, is trying to get a jump-start on the Super Tuesday showdown by campaigning in Ohio. Ohio also is considered a crucial state in the general election. George W. Bush beat Al Gore there by just four percentage points.

And a new poll out in Ohio today shows the president's approval rating in the state has sunk to a new low of 49 percent.

Well, moving forward after Wisconsin, it pays to look in that rearview mirror that John Edwards so cleverly alluded to last night, to consider if any lessons were learned. Here's one again is our senior political analyst Bill Schneider.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Super Tuesday, Edwards versus Kerry. Are there any clues from Wisconsin about what to expect on March 2? Wisconsin was an open primary. Independents could vote. Their votes made Edwards competitive, and gave him his new message.

EDWARDS: The fact that independents are flocking to me, and supporting me in these primaries is powerful evidence that I would be the strongest candidate against George Bush.

SCHNEIDER: Here's good news for Edwards. Seven of the ten states that vote on Super Tuesday allow independents to participate. Those states in yellow on the map have 797 delegates. The three states in blue with 354 delegates allow only registered Democrats to vote.

Edwards is running as an economic populist.

EDWARDS: There are really two different Americas, one for families who get whatever they want whenever they need it, and then one for everybody else.

SCHNEIDER: Wisconsin has suffered severe job losses. The number of unemployed has gone up 56 percent since 2000. Wisconsin primary voters concerned about jobs went for Edwards. Six Super Tuesday states have seen jobless numbers rise by 50 percent or more since 2000.

Good news for Edwards? Well, four of those states are in Kerry's own New England. But Ohio and Minnesota may be open to Edwards' populist message -- unless Kerry manages to steal it from him.

KERRY: And we will create 500,000 new jobs by moving towards energy independence.

SCHNEIDER: White voters in Wisconsin were split between Edwards and Kerry. Wisconsin has only a small number of African-American voters but they came out strongly for Kerry and delivered Wisconsin for him. Late deciders in Wisconsin also broke strongly for Edwards.

EDWARDS: I think if the primary had taken place two or three days later I would have won.

SCHNEIDER: Super Tuesday is two weeks later. If Democrats are experiencing buyers remorse over Kerry, Edwards' momentum could build.

(END VIDEOTAPE)

SCHNEIDER: Where will the Dean vote go? According to our Wisconsin exit poll, Dean lost the majority of his former supporters by primary day. And where did they go? Well Kerry over Edwards by a very narrow margin -- Judy.

WOODRUFF: But very narrow.

SCHNEIDER: Narrow. Closely split. In fact it was 47 Kerry, 41 Edwards.

WOODRUFF: All right. Bill Schneider. A lot to pore over with those exit poll numbers. We're still looking at them.

Well the Wisconsin primary also helped to drive home differences between Kerry and Dean (sic) on a handful of issues. Those differences are rather nuanced on gay marriage.

Edwards says that same-sex marriages should be a matter for states to decide, but he supports partnership benefits. Kerry also supports those benefits, while opposing gay marriage.

It is more clear-cut on the death penalty. Edwards is on record as supporting it, Kerry is against it.

On trade, there is some controversy. Edwards says he opposed the North American Free Trade Agreement, although he was not in the Senate when it was voted on. Kerry voted for it and he is beginning to question Edwards' stand.

(BEGIN VIDEO CLIP)

EDWARDS: We have legitimate differences about issues like jobs and trade. Senator Kerry supported NAFTA and other trade agreements. I was against NAFTA, and some of the trade agreements that he was for.

KERRY: Well he wasn't in the Senate back then. I don't know where he registered his vote. But it wasn't in the Senate.

(END VIDEO CLIP)

WOODRUFF: Well, while Edwards and Kerry go after each other, our new poll shows that both Democrats are beating President Bush in head- to-head match-ups. As we reported a little earlier the CNN/"USA Today"/Gallup survey taken Monday and Tuesday shows Kerry 12 points ahead of Mr. Bush, and Edwards 10 points ahead of the president.

And then today the '04 Democrats appear to have some new ammunition against the president on the jobs front. Let's bring in our White House correspondent Dana Bash on that -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Judy. and the issue here today at the White House is a figure in this report put out a couple of weeks ago by the president's Council of Economic Advisers, and it bears the president's signature.

It says that 2.6 million jobs will be created in the year 2004 alone. Now as you well know, Judy, in politics high expectations, particularly if they are not met creates, instant ammo for your political opponents, particularly on the jobs issue which Democrats do see as the president's top vulnerability on the domestic front in this election year.

Yesterday the president's treasury and commerce secretaries while traveling the Pacific Northwest came out and essentially distanced themselves from this figure, from the optimistic forecast. Today, Mr. Bush himself also stopped short of repeating the prediction when asked, saying simply that the economy is getting better, that jobs have been gained in recent months.

The White House spokesman said that the 2.6 million new jobs forecast is the work of the numbers crunchers at the White House. And the president is not a statistician.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: You know, I think that people can debate the numbers all they want. The president is focused on acting on policies to create as robust an environment for job creation as possible so that we can help those who are hurting because they were looking for work and cannot find a job.

(END VIDEO CLIP)

BASH: Now Democrats from Capitol Hill to the campaign trail immediately jumped on this issue. Senators like Ted Kennedy, Hillary Clinton and others wrote the president today saying that they want the president to send up a new jobs forecast. In a not so subtle dig, asking him to send one up that his own cabinet would endorse.

On the campaign trail Democratic front runner John Kerry suggested that there have been other predictions that the president said would come true based on his tax cuts that haven't exactly come out to bear. He also suggested that this has become a credibility issue.

(BEGIN VIDEO CLIP)

KERRY: I immediately said that those predictions would fall short based on the promises they made with respect to the tax cut, which was supposed to give a million jobs. It didn't, it lost a million. The next tax cut was supposed to produce a million jobs. Lost a million. And now they're already walking backwards in their own predictions.

(END VIDEO CLIP)

BASH: Now when asked today if it was, perhaps, a mistake to make a rosy prediction on such a political hot potato like jobs when that is such a big issue on the campaign trail the White House spokesman Scott McClellan simply called that question a trap. Back to you, Judy.

WOODRUFF: All right. So, Dana, I guess they're still on the record with an official projection of 2.6 million jobs.

BASH: That's right.

WOODRUFF: OK. Dana, thank you.

Well we all know that there can be second acts in politics. The latest proof is in Kentucky. Coming up, a candidate who came up short last November who now has reason to celebrate.

Also, we look ahead to the biggest prize on Super Tuesday. How will California test the Democratic candidates?

And Michael Deaver talks about the subject of his new book, former first lady Nancy Reagan.

(COMMERCIAL BREAK)

WOODRUFF: Wisconsin wasn't the only place where voters went to the polls yesterday. There was a special election in Kentucky for a seat in Congress. Both national political parties were watching this race, trying to see if it would be a sign of things to come this fall.

(BEGIN VIDEOTAPE)

BEN CHANDLER (D), KENTUCKY CONG-ELECT: I am deeply humbled to stand before you as the next Congressman from central Kentucky.

WOODRUFF (voice-over): Democrat Ben Chandler's easy win represented a political rebound for him and for his party. Just three months ago, Chandler lost the governor's race to Republican representative Ernie Fletcher. Only to turn around and win the congressional seat Fletcher left behind. Chandler is the first Democrat since 1991 to win a Republican-held seat in a special election.

REP. ALICE FORGY KERR (R), KENTUCKY: We were hoping for a different outcome.

WOODRUFF: Chandler's Republican opponent, Alice Forgy Kerr, based her campaign in large part on her support of President Bush. She even appeared with Bush in a campaign ad. Democrats are eager to see the Kentucky vote as a referendum on the president as they battle to regain control of the House, and the White House. But Republicans say Chandler simply ran a better race, and had better name recognition. As a former state attorney general, and member of a famous Kentucky political family.

STUART ROTHENBERG, "ROTHENBERG POLITICAL REPORT": First and foremost I think it was about the candidates, but I think it is fair for Democrats to say that George W. Bush did not carry the Republican across the finish line.

WOODRUFF: National leaders of both parties put a lot of money and effort into the race, knowing it might be seen as a bellwether.

ROTHENBERG: I don't think the special election results really have much predictive value. I suspect that the fight for the House will be limited to a couple dozen seats.

(END VIDEOTAPE)

WOODRUFF: One of our favorites there, Stu Rothenberg.

Well, it's a hot button political issue in California. Just ahead, the gay marriage license controversy in San Francisco is just one of the issues we'll talk about with "Hotline" editor Chuck Todd.

(COMMERCIAL BREAK)

WOODRUFF: Howard Dean's campaign debt, and some issues in California. Joining us now to talk about all this, Chuck Todd, editor-in-chief of "The Hotline," the insider's political briefing produced every day by the "National Journal." Chuck, let's talk about how much money Howard Dean raised and how much he owes.

CHUCK TODD, "THE HOTLINE": We have some final numbers that we were able to get our hands on. The final fund-raising number is incredibly astonishing. They crossed the $50 million mark this past weekend.

WOODRUFF: Astonishing.

TODD: I did the numbers and you guys have 201 delegates that Dean received. I did it via 200. A little easier on the math. It's $250,000 a delegate. Which is still a bargain, though compared to John Connally (ph) back in 1980.

WOODRUFF: I was going to say John Connally kind of broke the record. TODD: Absolutely. But he's got a campaign debt, believe it or not, of about half a million dollars. And they're sending out a fund- raising letter in the next couple of days to try to raise money to finish off that debt.

WOODRUFF: Will we ever know what the $50 million went for?

TODD: It's going to be one of the longest FEC (ph) reports. We're all going to want to be going through on April 15 by the time they do it. It's going to be an interesting thing for about five reporters.

WOODRUFF: All right, Super Tuesday, the big enchilada, if you will, is California. You're looking at a couple of things out there.

TODD: Well, it's interesting. First of all, both Kerry and Edwards, when they go out there, they're not alone on the campaign trail as they have been everywhere else they've been. There's a bond initiative. Never mind the hot political issue in San Francisco right now is gay marriage and the whole court battle about whether the city can be granting marriage licenses. So there's so many hot button issues one wonders, will they -- how much time will they really want to spend in California because what they say on that one issue could turn into a press day that disrupts their other campaigning. So it wouldn't be surprising to only see those guys out there for the big CNN debate. Beyond that there's too many potential pitfalls for them to get into trouble with with other issues that they're trying to do.

WOODRUFF: The other thing you're looking at is what Arnold Schwarzenegger the governor has on the line.

TODD: Well, he's got -- that's the other thing. He's this dominant political force right now in the state. Republicans are relying on him heavily. Bill Jones is a Republican candidate for U.S. Senate and a very tough primary that no one knows about. The only money Bill Jones has spent is on a direct mail piece that features Arnold Schwarzenegger. Schwarzenegger endorsed him. So we're going to find out what kind of political muscle -- we know what kind of real muscle Schwarzenegger has, but we've got to see if he's got political muscle.

If he can win Bill Jones, he's endorsing candidates that are running against people that don't favor his bond initiative. He's trying to get his bond initiative passed. If he can make all this happen, don't think that the people over at 1600 Pennsylvania Avenue won't take notice and decide maybe Arnold Schwarzenegger is a helpful person to get Republicans elected, including maybe even George Bush. But, Arnold's got a lot to prove on March 2. Almost more so than the presidential race.

WOODRUFF: We know one thing Schwarzenegger -- the governor gave Bill Jones and that's his press list because I get all the Jones e- mails. I was on the governor's e-mail list, still am. And now I'm happy to be on Mr. Jones' e-mail list.

TODD: That's certainly a way to keep up with it. WOODRUFF: All right thank you, Chuck Todd. "The Hotline," an insider's political briefing produced every day, as we said, by "The National Journal." You can go online to NationalJournal.com for prescription information.

Just ahead on INSIDE POLITICS, some new insights on Nancy Reagan. A close friend of the former first lady, Michael Deaver, is out with a new book. He joins us to talk about his personal and professional relationship with Nancy Reagan when we return.

(COMMERCIAL BREAK)

WOODRUFF: Michael Deaver's relationship with Nancy Reagan goes back decades. Now the former White House aide to President Reagan has written a new book, "Nancy: A Portrait of My Years With Nancy Reagan."

Michael Deaver is with me now to talk more about the book and his friendship with Mrs. Reagan. Good to see you. Thank you for coming by.

MICHAEL DEAVER, AUTHOR: Thank you.

WOODRUFF: So much has been written about Nancy Reagan. We feel like we know so much about this woman. What was missing out there that you wanted to fill in?

DEAVER: Well, I think that there was real flesh and blood. That there was something -- Nancy was sort of a paper cutout for people, and they never could sort of reach and touch inside of her.

That's what I've tried to show in this book. That she is a real person. That she had feelings. That she was not a particularly political animal. She didn't drive her husband. She was not a puppeteer who made it all work. She was just somebody who adored Ronald Reagan.

WOODRUFF: Not a political animal. But you do say, Michael Deaver, she was the strategist of the first couple.

Now I think some people would be surprised to hear that as complicated and demanding as the presidency is that the president is not someone who does strategic thinking. What did you mean by that?

DEAVER: Well, I didn't mean that. I meant that Nancy was the one who asked the tough questions. Ronald Reagan had the vision. Ronald Reagan knew exactly what it was he wanted to do.

Nancy was the one that would say but, Ronnie, you know, how is this going to work? Do you know who the staff are going to be? How much is this going to cost? What happens if we lose?

All of those tough questions that the candidate who gets sort of carried away with all of the excitement, and dreams of what he wants to do.

WOODRUFF: You said at one point she was the one who couldn't sit back and just let fate happen the way her husband could.

DEAVER: Her husband believed in destiny. But Nancy said destiny may need a little help.

WOODRUFF: You've got so much in here about the worthwhile things that she did and things that are really admirable about her. But of course I want to ask you about a couple of the controversial things.

You do write about the astrologer that she turned to after John Hinkley made the attempt on her husband's life. You write that she actually ran the president's schedule by this astrologer and that you sometimes changed the president's schedule. Did you...

DEAVER: Well, what I wrote was that she, after the assassination which was -- assassination attempt, which was her worst nightmare, I mean it was something she always feared would happen. When it happened she reached out because she heard that this woman had predicted it would happen.

I saw no harm in saying to her, Give me those dates in the future that you may see, and I'll plug them into the schedule. Nothing was ever changed.

But there were days that, frankly, I kept him in the White House. There was nothing wrong with that.

WOODRUFF: You said at one point perhaps I should have tried harder to veto the whole business.

DEAVER: Well, and looking at hindsight about every interview for eons always brings up the astrology. I don't hear too many people asking Hillary about her channeling with Eleanor Roosevelt in the Lincoln Room. But anyway.

WOODRUFF: Well, speaking of the Clintons, you do mention them on a couple of occasions. You write about the occasion in 1998 when President Clinton was there to dedicate one of the Ronald Reagan buildings here in Washington.

And you write about how he embraced Mrs. Reagan, and you said, the look on her face, you said she looked like a mugger had embraced her. What was that all about?

DEAVER: Well, we were in a room and all of a sudden it was like he appeared. I didn't even hear the doors open and suddenly she was in the arms of Bill Clinton. And yes, she was totally shocked and surprised.

WOODRUFF: Not a lot of affection there, it sounds like.

Michael Deaver, dear friend of Nancy Reagan and Ronald Reagan and longtime aide to Ronald Reagan. Great of you to come by. The book is "Nancy: A Portrait of My Years With Nancy Reagan." Thank you very much.

DEAVER: Thank you. WOODRUFF: We appreciate it.

And that's it for this day's INSIDE POLITICS. I'm Judy Woodruff. "CROSSFIRE" starts right now.

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