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Inside Politics

Three Presidential Debates; Discussion over the CBS News/Bush Guard Record Flap; American Hostage Beheaded in Iraq

Aired September 20, 2004 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)
ANNOUNCER: New fire on Iraq.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: From the beginning on Iraq, at every fork in the road, he has taken the wrong turn, and he has led us in the wrong direction.

ANNOUNCER: Is that John Kerry's ticket to a turnaround, or does he risk bolstering George Bush?

GEORGE W. BUSH (R), PRESIDENT OF THE UNITED STATES: I looked at the world and saw a threat in Saddam Hussein.

ANNOUNCER: Up for debates? Have the Bush and Kerry camps agreed that three times is the charm?

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: Objects in your mirror may be closer than they appear.

ANNOUNCER: John Edwards' primary season punch line now applies to the presidential polls.

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

(END VIDEOTAPE)

JUDY WOODRUFF, HOST: Thank you for joining us.

You've just been hearing from White House spokesman Scott McClellan, saying that the White House is pleased to know that CBS has come forward and expressed its regret, its apology for going forward with the story about documents that CBS now says it questions the authenticity of, documents that purported to show that President George W. Bush, when he served in the Texas Air National Guard, received favorable treatment.

We heard Scott McClellan say the White House, though, looking for more investigation on the part of CBS and other news organizations.

We're going to get -- have much more on that story in just a moment, but right now we want to turn to Senator John Kerry and his new get tough on Iraq strategy against President Bush.

Kerry delivered a major speech on that subject in New York today, after weeks of having allies urge him to be more aggressive and on the day before Bush addresses the United Nations.

Our senior political correspondent, Candy Crowley, is in New York.

Hello, Candy.

CANDY CROWLEY, CNN CORRESPONDENT: Hi, Judy.

If his critics wanted him to be more aggressive, that is certainly what they got today.

Senator Kerry at NYU giving almost an hour speech, a sustained critique of the president's policy in Iraq, not just the decision to go to war but how he conducted the war, how he has conducted the reconstruction afterwards, and how he has dealt with the peace.

From the beginning to the end, Kerry says this has gun a colossal failure of judgment.

(BEGIN VIDEO CLIP)

KERRY: In Iraq, this administration has consistently over promised and underperformed. This policy has been plagued by a lack of planning, by an absence of candor, arrogance, and outright incompetence.

And the president has held no one accountable, including himself.

(END VIDEO CLIP)

CROWLEY: Now, Kerry's critique today, as you mentioned, Judy, does come as the president gets ready to make a major foreign policy speech of his own as the U.N. opens here.

And it also follows a weekend of criticism from Republicans. Kerry mentioned not the "Q" word, as they say, quagmire, in his speech today but he did say unless there is a change of course then there is the prospect of a war with no end in sight.

And you may recall, Judy, that sometime during the primary Howard Dean said that the capture of Saddam Hussein had made the U.S. no safer. Here's what John Kerry had to say today.

(BEGIN VIDEO CLIP)

KERRY: We have traded a dictator for a chaos that has left America less secure.

(END VIDEO CLIP)

CROWLEY: Now, as you might imagine, the Republicans have jumped all over that, noting that when Howard Dean said that the U.S. was no safer John Kerry disputed that and said it was indeed. So, the back and forth starting even before the speech was over -- Judy.

WOODRUFF: All right. Candy Crowley, following John Kerry today at his speech in New York and beyond. Candy, thank you very much.

The Bush campaign accuses Kerry of sending a message of defeat and retreat on Iraq. As for the president, he's been stumping in the showdown state of New Hampshire today. A short while ago he again defended his decision to invade Iraq and overthrow Saddam Hussein, and he took aim at Senator Kerry's latest critique on the war.

(BEGIN VIDEO CLIP)

BUSH: Today my opponent continued his pattern of twisting in the wind, with new contradictions of his old positions on Iraq. He apparently woke up this morning and has now decided, no, we should not have invaded Iraq, after just last month saying he still would have voted for force even knowing everything we know today.

Incredibly, he now believes our national security would be stronger with Saddam Hussein in power, not in prison.

(END VIDEO CLIP)

WOODRUFF: President Bush speaking just a very short time ago in New Hampshire.

All right. Now we turn to another story of great interest to the Bush campaign.

CBS News said today that it cannot prove the authenticity of documents casting doubt on the president's National Guard service. The network says that retired National Guard Lieutenant Colonel Bill Burkett now has admitted deliberately misleading a CBS News producer about the origins of the documents.

CBS News anchor Dan Rather issued a statement saying, quote, "If I knew then what I know now, I would not have gone ahead with the story as it was aired, and I certainly would not have used the documents in question."

CNN's Suzanne Malveaux, our White House correspondent, traveling with the president, has more on all this -- Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Judy, I just spoke with White House Press Secretary Scott McClellan about those documents. The president's response, he was told about this aboard Air Force One, about the CBS statement, and McClellan essentially saying that this simply proves that the president all along has served honorably.

He says that there's still a lot of questions that remain regarding those documents. He still suggests in some way that the Kerry campaign, certainly the Democratic National Committee had something to do in orchestrating the timing of the releasing of those documents to affect the elections.

And also the White House saying, of course, that they want to get to the bottom of this. They do not understand why it was that CBS News would use what they are calling a discredited source to move forward on this story -- Judy.

WOODRUFF: Thanks very much. I know we're going to be following this, and we're going to be hearing in a little while from Dan Bartlett on the White House about this as well. Suzanne, thank you very much.

Well, amid all the latest political fireworks, the Bush and Kerry camps may have agreed on something of a presidential debate schedule. Our political editor, John Mercurio, has been digging for all the details on this.

John, what have you turned up? Where do things stand?

JOHN MERCURIO, CNN POLITICAL EDITOR: Well, there are several signs today, at least from Democrats, that there is a deal and that the first presidential debate between President Bush and John Kerry will take place ten days from now in Miami.

There's two -- we have two Democratic sources confirming for CNN as recently as an hour ago that the Bush and the Kerry campaigns have agreed to the presidential debate commission's call for three debates.

This would be a small victory for John Kerry, who had sought to have as many debates with President Bush as possible. President Bush, of course, strongly preferring to hold only two.

Now, the Bush campaign this afternoon still denying that a tentative agreement has been reached, calling his reports premature and in some cases inaccurate.

But Scott McClellan, the White House press secretary, opened the door a little bit, a couple hours ago, saying, quote, "There could be more on that later today." So, we'll be watching.

Now, given all of that, the debate schedule that we have that the commission and John Kerry have endorsed would call for the first debate to be September 30 in Miami. This debate would focus on foreign policy.

Now, a presidential debate commission spokesman I talked to today said they've already started to move people and resources down to Miami for that debate.

The second one would take place October 8 in St. Louis and would feature undecided voters at a town hall setting. This is the debate that the president was sort of leery of participating in.

The third debate would be October 13, Tempe, Arizona. It would focus on domestic issues. And of course the vice president, and of course, the vice president and John Edwards would debate October 5 in Ohio.

WOODRUFF: So, John, why is it that, do you think the Democrats were a little quicker to put the word out that this may have been worked out than the White House? MERCURIO: Well, Republicans say it goes back to sort of the main sticking point for this whole negotiation, which was whether or not they should hold three or two debates. They say that the Democrats were trying to sort of force their hand by leaking the -- leaking the terms of the so-called deal in order to put public pressure on President Bush to accept those terms.

Now, Democrats say that -- Democrats say doesn't make any sense, especially if they ultimately decided to go with the three debates President Bush would come out looking like he had sort of lost that battle.

But Judy, the answer, the true answer, I guess, is that I don't know. I mean, sources in both campaigns say that the terms of these negotiations -- the terms of these debates were negotiated by two people, not an entire team. It was Vernon Jordan for Kerry and James Baker for George Bush. And so, any explanation for the rationale would really have to come from one of those two people.

WOODRUFF: So, John, if this is true, though, and it is going to happen, why did the Bush team ultimately agree to three rather than the two they were putting out the word that they wanted?

MERCURIO: Well, again, James Baker is not returning my phone calls, but I think it really comes down to three things.

I think first of all the president realized there was a political risk in ducking the debates. Incumbents have done this in the past and they've survived, but President Bush is in a slightly unique position. He's not viewed as being a real debate master. He really didn't need to duck this.

Missouri is a very important state in this race. He really didn't want to seem as though he was alienating voters.

And third, I think that the Bush campaign is feeling pretty confident right now. The poll numbers are looking really good. And I think the confidence sort of allows him to do bolder things, and I think that's what they're trying to do.

WOODRUFF: OK. John Mercurio, our political editor, thanks very much. And of course, we'll be looking for confirmation of all this, hopefully within a very short time.

MERCURIO: Exactly.

WOODRUFF: Well, you can look for Iraq to be a continued source of campaign debate right through election day. Up next, we're going to talk about the violence over there and the political fighting at home with President Bush -- with prominent, I should say, Bush and Kerry allies, including former Secretary of State Madeleine Albright.

Also ahead, the Bush-Kerry horse race. Our Bill Schneider will read between the lines of the latest flurry of polls.

Plus, more on the CBS News mea culpa in connection with the Bush National Guard controversy.

With 43 days until the election, this is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: More now on the Bush-Kerry dispute over the war in Iraq.

As we mentioned earlier, Kerry was on the attack again today, charging that mistakes by Bush in invading Iraq could lead to an unending war. Kerry's speech comes one day before Bush's scheduled address to the U.N. General assembly in New York.

In just a moment we'll hear from White House communications director Dan Bartlett on the Iraq situation and those CBS documents, but a short while ago I talked about the issue with former Secretary of State Madeleine Albright.

I started by asking her if Kerry is saying something different now about his position on Iraq than what we've heard before.

(BEGIN VIDEOTAPE)

MADELEINE ALBRIGHT, FMR. SECRETARY OF STATE: No, he's not. What he is saying is that he believes that the president has made some major miscalculations on Iraq, that he has been saying that for some time and that he is not leveling with the American people.

That the situation is chaotic, that the president has not really paid attention even to the National Intelligence Estimate that he got in June or July, in which it was described that the situation is chaotic and Senator Kerry has been saying for some time that this is an unacceptable situation.

WOODRUFF: Well, today John Kerry said, among other things, he said, "I -- my answer is no" to the question whether he would do again what he did before, authorize that the U.S. should have invaded Iraq, given -- knowing now what the circumstances were then, whereas one month ago John Kerry said he would have voted for the authority to go to war in Iraq.

This doesn't seem to be consistent.

ALBRIGHT: Judy, what he's saying is that he voted as a senator to give authority to a commander in chief to use the vote to get diplomatic action and authority.

What he is saying in his speech today is if he were president, the commander in chief, knowing what he knows now, he would not be -- have given it this -- he would not have carried it out the way President Bush did.

But I think it's very important for people to understand, he voted as a senator who was being asked by the executive branch to give authority to the president and to give some strength to the president's voice when he went to the United Nations to ask for the inspectors.

And there's quite a difference in the way that you act when you are a senator being asked for authority. And the question is, as he has stated in his speech, if he were commander in chief he would not be -- have taken the same action knowing what he knows today.

WOODRUFF: In the poll that came out over the weekend, "The New York Times"/CBS poll, among other things respondents were asked whether they thought John Kerry had spent more time attacking George W. Bush than explaining what he would do as president.

Does he run a risk by this speech today, which is more criticism of Bush than it is an explanation of his own policies, of just furthering that impression?

ALBRIGHT: Well, in the speech he also provides a four-point plan for what he would do in Iraq, which includes internationalizing it and really working much harder to get international support. And he suggests that the president when he's at the United Nations convene a group and really do a lot of diplomatic work on it. He also explains the importance of training the Iraqis through NATO.

But Judy, I think with the administration constantly trying to really misinterpret or just say the wrong things about Senator Kerry's position, he has to defend himself on that and make very clear why he thinks and where President Bush went wrong.

The American people need to know that the president has misled them on every part of the Iraqi policy, and President -- and Senator Kerry has to point that out.

WOODRUFF: But this war's been underway for 18 months. The election is only six weeks away. Isn't it late in the game for Senator Kerry to still be explaining what he would do differently?

ALBRIGHT: I think that Senator Kerry has been working on explaining that. It hasn't come through. He is making that message very loud and clear.

And six weeks is actually, as you know, a long time in elections. And I think this is the time that the people have really started to tune in.

Plus, I have to tell you that the misjudgments and miscalculations of President Bush are becoming clearer and clearer every day.

So, the combination of Senator Kerry making very clear his position yet again and making also very clear where President Bush has misled our country, I think is a very appropriate time to do this.

(END VIDEOTAPE)

WOODRUFF: Former Secretary of State Madeleine Albright.

Up next, the other side of the argument. I'll speak with Dan Bartlett, the White House communications director. I'll also ask him about the CBS News story, the network saying it's sorry. We're going to have more on this CBS apology over using questionable documents in a story on the president's National Guard service.

(COMMERCIAL BREAK)

WOODRUFF: Some breaking news coming into CNN from Springfield, Illinois, the state capitol in Springfield. Word coming down that at least one person has been shot. The building -- the capitol building has been locked down. Employees ordered to stay in their offices.

It is not immediately clear, we are told, if the shooter is still in the building. It's also not clear if more than one individual has been shot.

CNN working on this story right now. And we will bring you any more information as we get it. Again, a shooting at the state capitol in Springfield, Illinois.

We're returning now to our discussion on Iraq. A moment ago we heard from former Secretary of State Madeleine Albright.

Joining us now, White House Communications Director Dan Bartlett.

And Dan Bartlett, before I turn to what Madeleine Albright said and the CBS documents, which I do want to ask you about, the Associated Press is reporting that there is an Islamic web site reporting that an American hostage in Iraq has been killed. And now Al-Jazeera is reporting that an al-Zarqawi group is posting a video on the Internet.

Do you have any information about the fate of those American hostages?

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: No. Unfortunately, I don't, Judy.

This is a very difficult period for many people serving in Iraq. It's very difficult for the Iraqi people. The terrorists are determined to try to stop the progress in Iraq.

Al-Zarqawi, who is a part of the al Qaeda network, an affiliate with al Qaeda, is trying desperately to deter the progress going on in Iraq. They're trying to use to shake the will of the world, of the free world. And the fact that the free world is coming together in New York this week is an opportunity for us to talk about the progress being made and the path going forward.

But these specific incidents I don't have the latest information on.

WOODRUFF: And again, I want to stress CNN has not been able to independently confirm this. I'm reporting what we're hearing from the Associated Press and from Al-Jazeera.

But Dan Bartlett, let me -- let me turn to John Kerry's remarks today. In a way this report out of Iraq is emblematic of this.

He says, among other things, the president is not leveling with the American people about the realities on the ground. He said the situation is far worse than what George Bush has acknowledged, and he says the American people deserve the truth.

BARTLETT: I think the senator's taken probably a dozen positions on this very critical issue. I think it would be a little surprising for him to be lecturing the president on not leveling with the American people.

I think Madeleine Albright said it best when saying there's a difference between being a senator and being a commander in chief. And as a senator it obviously doesn't matter what you say or what you do or the votes that you cast.

Every time we have seen Senator Kerry come out and speak on this issue he's changed his position. And today we're hearing the mother of all flip-flops.

Now he is suggesting, what he is saying explicitly, is that we would be better off with the security of a dictator than the hope and security of a free Iraq.

I mean, think about what Senator Kerry has done today. On the very week when the new Iraqi Prime Minister Allawi is coming to our country to talk about the very progress we're making, he is disparaging that progress, looking at always at the dark clouds, not the silver lining, not looking at the fact of how far this country has come in such a short period of time.

The president has been very straight with the American people. This has been difficult work, and the sacrifices have been very necessary.

WOODRUFF: But Dan Bartlett, it's not just John Kerry. It's Republicans. Over the weekend, Chuck Hagel, Senator Hagel of Nebraska was on the weekend shows, and he said doesn't think the U.S. is winning in Iraq. He says we're in trouble, we're in deep trouble. He goes on to give details.

We heard John McCain saying again, not enough troops were sent over there. This is not just John Kerry who's -- who's making these observations.

BARTLETT: Well, I think what President Bush is doing and what the commanders on the ground are doing is telling us the ground truth of what's going on in that country.

President Bush listens to his commanders when it comes to troops levels. President Bush is listening to Prime Minister Allawi and the new government when they talk about the way to handle some of the political issues that are taking place as well as the security issues.

This is a sovereign government now. And this sovereign government has only been in place for about three months. And it's going to be difficult work as we go forward. And there's always going to be opportunities for second-guessing like Senator Kerry is doing.

But the bottom line is that this country is on a path to democracy and they're doing far better with Allawi and his government in power and not Saddam Hussein.

And it's breathtaking to see that Senator Kerry now has come full circle and is now saying that we would be better off now with Saddam Hussein in power. That is an incomprehensible statement, especially if you look back at what he has said in the previous 17 months.

WOODRUFF: Well, I don't know if that's exactly what he said. But I do want to move on very quickly to the CBS apology today, Dan Bartlett. They say now it was a mistake on their part, a mistake in judgment to rely on documents that cannot now be proven to be authentic.

Are you satisfied? Are you -- is the president satisfied that CBS has come clean on all this about in terms of what it knows about what happened?

BARTLETT: Well, Judy, we do appreciate that they regret going with a story that's now been proven to be based on fake documents.

There are still more questions being raised as opposed to answers, and it's important that we get to the bottom of this. We need to know where the documents came from, who produced them, who was behind these attacks.

We all know the political nature of this. We're at 55 days before an election, and these documents are put forward to the American people that turn out to be fake.

Who were -- who was behind these documents? Who was behind organizing this story? Those are the critical questions that the American people deserve answers to.

It's a good first step to have them obviously come forward and regret using them in the first place, but good journalism will show if we can get to the bottom of some of these critical questions.

WOODRUFF: Well, I know there is going to be ongoing journalism looking into all this. Dan Bartlett, thank you very much.

BARTLETT: Thank you.

WOODRUFF: We appreciate you making time to talk to us. We appreciate it.

BARTLETT: You're welcome.

WOODRUFF: Well, George Bush is ahead in most of the major polls, but all is not lost with the Democrats, according to our Bill Schneider when we come back.

Plus, we will talk with both presidential campaigns about these new numbers. And later, how will the CBS apology over those allegedly forged National Guard documents affect the race for the White House.

But first, live to Wall Street and our Rhonda Schaffler.

Hi, Rhonda.

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

WOODRUFF: Welcome back to INSIDE POLITICS. I'm Judy Woodruff.

Shots from both sides today over the war in Iraq. John Kerry says mistakes by President Bush in invading Iraq could lead to unending war there. Kerry made his comments during a speech at New York University.

The president, at a campaign event in New Hampshire, is urging voters to stick with him on the war. He says the middle of a war is no time to change leadership.

Since the end of the Republican convention, George W. Bush has climbed ahead of John Kerry in most opinion polls. Our senior political analyst, Bill Schneider, reports, however, that Bush's lead falls just short of a critical benchmark, and the numbers reveal what could be overlooked support for Kerry.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The latest national polls of likely voters show varying results, from a neck-and-neck race to a 13-point Bush lead. Average them, and you get Bush at 50 percent and Kerry at 44. But objects in these polls may be closer than they appear.

Republicans are wary of overconfidence.

MARC RACICOT, BUSH CAMPAIGN CHAIRMAN: But we would still at the end of the day make note of the fact that this is going to be a very, very close contest.

SCHNEIDER: For an incumbent running for reelection, 50 percent is not a safe figure. This weekend, public polls were released in six states that voted for Bush in 2000 and are now highly competitive. All show Bush leading Kerry. But look closely at the numbers.

In Arizona, Bush has a double-digit lead over Kerry. The president's support? Fifty percent.

In Missouri, two polls show Bush ahead by seven points. He's at 48 in one poll and at 49 in the other.

A Nevada poll shows Bush up by five, with 50 percent. New Hampshire, Bush leading by nine, with 49 percent of the vote. Ohio, which some call the new Florida, doesn't look too close. Bush leading by seven among likely voters in one poll, by eight among registered voters in another. Bush's support? Forty-nine and 50 percent.

West Virginia, very close. Bush 45, Kerry 44.

Bush is running ahead in these competitive states he carried last time, but never with more than 50 percent of the vote. These polls are not entirely bad news for Democrats.

TAD DEVINE, SR. STRATEGIST, KERRY CAMPAIGN: More people don't want to reelect the president than want to reelect him.

SCHNEIDER: Or at least voters are split.

(END VIDEOTAPE)

SCHNEIDER: When an incumbent's support is 50 percent or less, it means that at least half the voters are not prepared to reelect him, even if they're not all ready to support the challenger. Now, typically, most undecided voters end up with the challenger. At least that's what polling experts say -- Judy.

WOODRUFF: All right. Bill Schneider, thank you very much.

And before I move on, I want to let our audience know that CNN is now reporting that an Islamic Web site -- an Islamist Web site is showing video of an American beheaded, executed by a group supposedly connected with Mr. al-Zarqawi, who is a close -- Abu Musab al-Zarqawi, a terror suspect connected to Osama bin Laden.

There's a video that has been showing just in the last few minutes, nine minutes long. It has not been verified. We are told by The Associated Press it shows a man sobbing blindfolded, wearing an orange jumpsuit. And we are told that the man is identified as Eugene Armstrong, an American who was working in Iraq, a civilian. And this is a picture that was shown earlier of Eugene Armstrong.

Again, CNN trying to get more information. But this is what is being reported right now on an Islamic Web site, and we are working to get more background, more information on the story. More tragic news out of Iraq.

Well, in just a moment, I'll discuss the latest polls that we were hearing about with Bill Schneider and other issues with Bush campaign adviser Tucker Eskew.

First, I'm joined here in Washington by John Kerry's senior campaign strategist, Tad Devine.

Tad Devine, before we get to the polls, what about President Bush's comment today, though, that given the crisis the United States is in, in Iraq, this is no time to change leadership?

DEVINE: Judy, the president's mistaken. The president's decisions in Iraq have been catastrophic for this country. We need to go in a new direction.

Unfortunately, every step of the way leading up to war and thereafter the president has misled this country. And the result of the president's choices are catastrophic. So, unfortunately, until the president can begin to recognize the reality of the disastrous situation in Iraq, he cannot begin to correct it.

WOODRUFF: Let's talk about the polls, the battleground state polls. In particular, not good news for John Kerry.

State after state, Ohio, New Hampshire, Iowa, Wisconsin, even Pennsylvania shows movement for the president. How do you and your campaign take any heart from this?

DEVINE: Well, Judy, I think those polls are about as accurate as the CBS documents, to tell you the truth. I mean, I just see a completely different race shaping up.

I mean, we've seen two national polls, for example, over the weekend. The Zogby Poll has the race at three points. The president's reelect is 47 in that poll. Fifty percent of the respondents say he does not deserve reelection.

The "Christian Science Monitor" poll out today, the same story, a three-point race with likely voters. A one-point advantage for the president with registered voters.

I think we've got some very good races shaping up. We feel very confident about Ohio, Florida, Pennsylvania, those mega-state battlegrounds.

I know in New Hampshire, for example, where those polls said John Kerry was behind, that's just simply not the case. It's not the case in Oregon, either.

We're actually in stronger shape today with the Democratic nominee, much stronger shape, than we were four years ago battleground by battleground. So, I disagree with that assessment, I look forward to the days ahead. I think we're going into the debates in very strong shape.

WOODRUFF: Well, you say this, Tad Devine, but in the "Boston Globe" today a senior adviser to John Kerry, not named, says, yes, last week was stronger than the week before, this week stronger than -- it will be even better, but this is not where we hoped to be.

DEVINE: Well, listen, I guess that's why I talk on the record all the time, so you can see what I'm saying. I mean, listen, Judy, I think it's understandable, the incumbent president has an advantage. But the incumbent president's high watermark by every historic measure is the days after his convention. And what we've seen out of this president is a persistent fall from that high watermark.

I think the president is in trouble. I think Bill Schneider's piece accurately pointed it out right beforehand, that when the president can't get up in the 50s in horse race, when the internals, the right track number, the wrong track number so high for him, the right track number so low, his reelect so low, this president is in deep trouble today. And I think there's a reason he's in trouble. His policies in for Iraq and for the country have been nothing short of a disaster.

WOODRUFF: Well, there's another way to look at the polls. When people were asked -- and the latest CBS/"New York Times" poll came out on Saturday. People were asked, "How do you feel about John Kerry's ability to deal with an international crisis?" Sixty percent said they're uneasy. That they don't have confidence in his ability to handle.

DEVINE: Well, sure. And Judy, I don't it's surprising that the incumbent president would enjoy some advantage in terms of some of these internal dimensions.

The problem with the president is he does not enjoy the confidence of the country. And that's why we're looking forward to debates.

We'll have a chance for the American people to see both of our candidates on stage, to size them up. I think as people see John Kerry's plan to move this country ahead here at home, to strengthen our economy, to expand access to health care, to cut the costs of health care, to deal with real issues that people want debated, they're going to understand that the choice for John Kerry is a choice to move the country in a new direction and to move our nation ahead. And I think it's going to be an easy choice in the end for the American people.

WOODRUFF: How do you get your message across, though, whether it's on Iraq or anything else, especially when you have the Bush campaign and the White House responding? As just heard Dan Bartlett say, this is John Kerry's 12th position, he said, on Iraq.

DEVINE: Well, I think the American people are seeing how ridiculous and silly the complaints are by the president. Listen, the American people want a president who will deal with the real issues that they confront every day, and they also want a president who will tell them the truth.

And that's the problem with George Bush. He's living in, as John Kerry said, in a fantasy world of spin when it comes to Iraq. He refuses to recognize how difficult the situation is.

We found out last week that by his own national intelligence estimate the situation in Iraq was deteriorating. The president refuses to recognize the reality. And until he recognizes the reality of Iraq, a reality which today is causing America to spend $200 billion there, as we are unable to deal with the problems here at home, he won't be able to make progress. And that's what people want.

They want progress in their lives. They want a president who stands on their side and not on the side of the powerful and privileged, where this president and this vice president have stood since day one of his presidency. WOODRUFF: A vigorous defense of John Kerry by Tad Devine.

It's always good to see you.

DEVINE: Good to see you.

WOODRUFF: Thanks for making time. We appreciate it.

Well, that is the view from the Kerry campaign. Up next, a Republican response. Bush campaign adviser Tucker Eskew joins me to talk about the campaign and John Kerry's critical comments about Iraq.

CBS backtracks on the Bush National Guard documents. Jeff Greenfield assesses the potential effect on the White House race.

And later, Ralph Nader keeps adding to his list of ballot victories. We'll update Nader's status around the country, including the showdown states where he could have the most effect.

(COMMERCIAL BREAK)

WOODRUFF: This breaking news. An Islamic Web site, as we've been telling you, is now posting video of the beheading of an American hostage.

We have more now from CNN'S Walter Rodgers. He joins us from Baghdad live, where it is just before midnight -- Walter.

WALTER RODGERS, CNN SR. INTERNATIONAL CORRESPONDENT: Judy, that video shows the painful and brutal beheading of Eugene Armstrong, one of the three westerners who were kidnapped by Abu Musab al-Zarqawi's group, Unification and Jihad, last Thursday. It is an extraordinarily brutal execution.

You can see five men standing in black behind the one man who is about to be executed. They're all wearing hoods, of course. And the man about to be executed, Eugene Armstrong, is wearing an orange jumpsuit.

The actual execution we will not show you, but it is essentially a man with a knife. The man identified as Abu Musab al-Zarqawi, the most wanted man in Iraq. There's a $25 million price tag on his head.

He brutally saws off Eugene Armstrong's head. And you can hear the man screaming as he is dying there. And then, gleefully and triumphantly, the Musab al-Zarqawi people hold up Armstrong's head for the camera and place it back on the corpse.

Obviously, this is more than we can show you on television. It is what happened here in Iraq.

Beheading is not an infrequent occurrence. In fact, three Kurdish militiamen were also found beheaded up by Mosul.

But again, this time the actual crime appears to have been committed by Abu Musab al-Zarqawi, as I say, the most wanted man in Iraq. He is a Jordanian. He is the one the Americans believe is most responsible for many of these heinous crimes which we see and hear about almost every day here -- Judy.

WOODRUFF: And Walter, very quickly, there are two other western hostages, an American and a Canadian, we believe, being held by the same group. And I gather a deadline still out there with regard to them?

RODGERS: Yes, Judy. Zarqawi's group is saying that they will be executed next.

The other American is Jack Hensley. He was working with Armstrong. And the other individual is actually not a Canadian, but a British subject. His name is Kenneth Bigley.

All three -- one has already been executed this evening, according to the video on the Web site, and there appears to be no doubt that it was Eugene Armstrong who was killed by Abu Musab al- Zarqawi. Again, beheaded. A knife literally saws off his head as he's screaming. And then the other two are slated to be executed at the whim and will of the Zarqawi fighters -- Judy.

WOODRUFF: Very, very grim news indeed out of Iraq. Walter Rodgers, thank you very much for bringing us what are gruesome but important details that we need to share with you.

And I'm just being told, as I was listening to Walter, that U.S. officials are confirming that the body has been located. And CNN, of course, is working the story. And we'll get you more information just as soon as we have it.

Well, we just heard before this from John Kerry's senior strategist, Tad Devine. With me now from Bush-Cheney campaign headquarters in Arlington, Virginia, Bush campaign adviser, Tucker Eskew.

Tucker Eskew, I will turn in a moment to what John Kerry said today. But first of all, your reaction to the news of this beheading of an American in Iraq and, frankly, to the larger picture of tragedy that it paints in terms of what's going on in that country.

TUCKER ESKEW, BUSH CAMPAIGN ADVISER: These are murderers. They're the worst form of scum. We have to fight them with everything we've got.

If this, now apparently proven true, latest incident of the kind of evil to which these people have stooped to is proven true, it's just more evidence of why we have to be on offense, why we have to be resolved, why we have to be consistent, why we have to use the might of our military, our coalition and all the force we have. Does anyone doubt for a minute that these people don't want to kill innocent people?

They want to do it on our shores. They want to do it overseas. They will do it anywhere they can by any means they can, and we have to fight them. WOODRUFF: But it is, Tucker Eskew, these beheadings and the ongoing violence, American soldiers dying, Iraqis dying, that has led not only John Kerry but even Republicans to argue that the war is not going well, that mistakes have been made. The latest CBS News and "New York Times" poll showing almost half the respondents don't approve of the president's handling of Iraq.

ESKEW: Similar polls, Judy, show majorities believing it was the right thing to do to remove Saddam Hussein from power. So, I think there are polls in any given week.

The news, there's been some bad news. The news ahead this week, we'll see the prime minister of a sovereign government from Iraq, Mr. Allawi, come to the United States and tell us himself in his own words, his own voice, what's happening in his country, just as President Bush has acknowledged these hard times and the difficulties ahead, particularly as we get closer to elections.

Secretary of State Powell wrote last week in "USA Today" about the strides being made toward the president's five-point plan, a plan, by the way, which our opponent in this presidential election has tried to rip off and make his own, with four of his points mirroring those of President Bush's plan over the last year. I think Senator Kerry demonstrated today in we cannot turn to not inconsistent, flip- flopping voice in these times of change and turmoil and terror.

By one account here at the campaign, 14 separate flip-flops in that speech alone. You know, there's an old saying where I come from about a clock being right twice a day if it's stopped. Well, John Kerry's taken every position on Iraq, every single position.

So, he can now choose one based on how that day's headlines are going and claim that's his position. That's not the kind of leadership the country's looking for.

WOODRUFF: Well, I will say I feel a little crass asking you about polls at a time when we are talking about the beheading of an American hostage in Iraq, but we do want to ask you because we talked to -- to -- to Tad Devine a moment ago about these polls, and we heard analysis from our own Bill Schneider. These battleground state polls, Tucker Eskew, do show the president ahead, but he seems to be at 50 percent and lower.

As Bill Schneider pointed out, is this not worrying to you, to the campaign, in that an incumbent, if he's not at 50 percent now, we know that these undecided voters tend to go with the challenger?

ESKEW: Well, we know we'd rather be five, three, eight, nine, varying from state to state, points ahead than behind in arguing the position that 50 percent isn't enough than where the Kerry campaign is. We believe that the race is close nationally. We believe it's close in the battleground states.

We have the momentum on our side. I think that's what's important. Americans are starting to hone in on the very high-stakes choice they have to make in November. And that's why we believe we've seen these numbers moving in our direction.

You know, when you talk about polls, Judy, that gauge the horse race, but we could also talk about what those questions really ask about the people who are offering themselves for the presidency. And President Bush, by a 70 percent to 23 percent margin over his opponent, John Kerry, is seen as someone willing to take a stand even if it's politically unpopular.

John Kerry blows with the wind. President Bush, even when you disagree with him, you know where he's coming from.

WOODRUFF: All right. A vigorous advocate for President Bush. Tucker Eskew, thank you very much.

ESKEW: Thanks, Judy.

WOODRUFF: We appreciate it.

A stunning reversal by CBS News. Coming up, our Jeff Greenfield on the network's concession that it cannot vouch for those memos questioning Bush's National Guard service.

We'll be right back.

(COMMERCIAL BREAK)

WOODRUFF: As we told you earlier, CBS News and anchor Dan Rather now says that they cannot vouch for the documents the network used in a story questioning George W. Bush's Air National Guard service during the Vietnam War.

Joining us now in New York with his take on the controversy, our senior analyst, Jeff Greenfield.

Jeff, how could this have happened? How could a network with CBS's reputation, at least what it says is its reputation, and I think what many people would agree, reputation for credible reporting and, you know, painstaking research, how could this happen?

JEFF GREENFIELD, CNN SR. ANALYST: Well, how could CNN have put on the Tailwind story in 1998? How could "The New York Times," arguably the most prestigious paper in the world, have run stories by a reporter who made it up? How could "The Washington Post" have won a Pulitzer Prize 20 years ago for a story about a non-existent eight- year-old heroin addict?

I mean, the first explanation, which is the explanation for most everything in this world, is human error. I think in this case you add to that the fact that the -- that the provenance of the documents, that is, where did they come from, CBS now says that they were misled by their source, Bill Burkett, this retired National Guard lieutenant, who has long had very critical things to say about the treatment that George W. Bush got in the National Guard, even accused officials of sanitizing the record, they acknowledge that he misled them about where the documents came from.

They had document experts who looked at these things and said, you know, we've got some problems with these, and they chose to go ahead. So, the answer, I think, to your question is because this happens all too often, even to prestigious news organizations.

WOODRUFF: Jeff, some people are already asking, was this an honest mistake or was there some political agenda here? You know, clearly, there was an agenda on the part of whoever provided the documents, but what about on the part of CBS?

GREENFIELD: Sure. Well, you raise an interesting point.

In all the talk that goes back more than 30 years about liberal media bias, exhibit A for the people who charge liberal media bias is and has been Dan Rather. This goes back to the famous press conference where he -- Richard Nixon asked him, "Are you running for something?" And he said, "No, are you," to a 1988 confrontation with then Vice President George Herbert Walker Bush, where it got very testy, and the vice president challenged Dan Rather on his bona fides.

So, I certainly think among those people there's no doubt what the motive was. I also think it's important to note that Dan Rather was very forceful, up until today, in his defense of these documents.

But my feeling is that, you know, when you make -- when people make these allegations from the left or the right, you should never underestimate the power of human beings to screw something up. Because if CBS wanted to hurt George Bush, relying on documents that they then had to repudiate is not exactly the way to go about it.

In fact, even though many other news organizations, not using these documents, have raised very tough questions about how Bush got into the National Guard and what did he do when he was there, I think from now on the impact of those allegations is going to be substantially undercut by these documents, which I think you should call the 13th stroke of the clock, that cast doubt not only on itself but all that's gone before. I think people will be -- will be much less prone to believe those stories because of this.

WOODRUFF: So, you're saying, if anything, George Bush has been helped by all of this?

GREENFIELD: Well, he's certainly -- yes. Look, if -- I'm not equating this with any kind of wrongdoing, but if you're -- if somebody's on trial and the defense attorney can show that the prosecutor introduced phony documents, then it doesn't matter what other evidence there is. A jury is likely to disregard the whole case.

And in this case, when people hear was Bush treated by the National Guard more favorably because his dad was an important figure, the fact that CBS's documents now can't be supported I think undercuts the broader argument. That, by the way, puts aside the question of whether this kind of 35-year-old or 30-year-old controversy should matter in this campaign anyway. But yes, I think the Bush campaign probably is absolutely delighted, as are all the people who regard mainstream media as essentially unreliable. This is a great triumph for the blogosphere, for what one former CBS News executive called guys sitting in their pajamas in front of a computer who manage to -- to be apparently more accurate about the -- the reliability of these documents than one of the world's most powerful news organizations.

WOODRUFF: Well, it's certainly going to be one of the highlights of -- or lowlights, as the case may be, as we all look back on this campaign years from now. Jeff Greenfield, our senior analyst, thanks very much. We appreciate it.

With six weeks and counting until voters decide, we'll get another take on John Kerry's new Iraq-centric approach.

Plus, is the president prepared to debate three times or not? We'll have a report from the White House when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Iraq and the presidential vote. Will it be the issue that tips the race one way or another?

A truce in the conflict over debates? It's enough to give political observers flashbacks.

RONALD REAGAN, FMR. PRESIDENT OF THE UNITED STATES: Are you better off than you were four years ago?

ANNOUNCER: Israel as an election year battleground. How's the Bush-Kerry contest playing with Americans living in the Jewish state?

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

(END VIDEOTAPE)

WOODRUFF: Welcome back. As John Kerry ratchets up his rhetoric about the president's decision to go to war in Iraq, the Bush camp is responding with a familiar campaign refrain -- bring it on. More on the Republican reaction in a moment. First, Senator Kerry's critique. CNN's Bob Franken reports from New York.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN CORRESPONDENT (voice-over): The Kerry campaign called this an important speech on Iraq, that importance certainly magnified by the timing, right before President Bush comes to this city for an address to the United Nations.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The president should convene a summit meeting of the world's major powers and of Iraqi's neighbors this week in New York, where many leaders will attend the U.N. General Assembly.

FRANKEN: An effort, said Kerry, to regain international cooperation. It was part of a four-point plan the campaign presented as newly significant. The other parts, urgently expand the Iraqi security forces training program, a reconstruction program, steps to guarantee the promised elections can be held next year.

KERRY: George Bush has no strategy for Iraq. I do. And I have all along.

FRANKEN: A Bush campaign spokesman responded by saying that Kerry's strategy would make the world a far more dangerous place. But Kerry says the point is the president misled and misleads the American people about what the Democrat calls catastrophic miscalculations.

KERRY: His miscalculations were not the equivalent of accounting errors. They were colossal failures of judgment, and judgment is what we look for in a president.

FRANKEN: The judgment that Kerry is trying to influence with his tougher tone is the one that the voters will make in just six weeks. Bob Franken, CNN, New York.

(END VIDEOTAPE)

WOODRUFF: The Bush camp tried to use Kerry's speech to underscore its broader charge that the senator is a flip-flopper. Let's go to our White House correspondent, Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, Bush aides say, sure, Senator Kerry's speech today was perhaps more pointed, more cogent than any other he's given in the past on the president's Iraq policy and strategy. However, tactically, Bush aides hope at least that it's too late for Senator Kerry, that they have spent months painting him, they think successfully, as someone who flip-flops, as you said, somebody who's indecisive, particularly on the war in Iraq.

So it's no surprise that that was the formula they went to today to respond to Senator Kerry. President Bush zeroed in on his opponent's argument that America is less secure than it -- since Iraq than it was before, read a quote from 1993 when Senator Kerry said those who believe we are not safer with his capture don't have the judgment to be president or the credibility to be elected president.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today he said, and I quote, "we have traded a dictator for a chaos that has left America less secure." He's saying he prefers the stability of a dictatorship to the hope and security of democracy. I couldn't disagree more. And not so long ago so did my opponent.

(END VIDEO CLIP)

BASH: Now, Bush aides were prepared for this kind of criticism today and in the days ahead from Senator Kerry, but they did get some criticism from within their own ranks. Over the weekend some senior Republican senators really went after the president. One, like Senator Lugar, the chairman of the foreign relations committee, said that the president's policy is incompetent, or at least part of it. Senator John McCain, who's been campaigning with the president, suggested that perhaps he needs to do more to level with the American people about what's going on on the ground.

Now, Bush officials say that they hope to answer all of this in part with the president's speech tomorrow at the U.N. General Assembly. They're also hoping that they will have a potent symbol in the interim Iraqi prime minister, who will be with the president in New York, here in Washington. They hope that at least Americans will see him and see a symbol of democracy.

And lastly, Judy, they are certainly hoping that strategically talking about Iraq from Senator Kerry's point of view is an asset for the president because that means he's not talking about things like health care and the economy where Senator Kerry, they know, does have an advantage -- Judy.

WOODRUFF: All right, Dana. One other thing we're watching is the debate over the debates. There is word today that there's been agreement between the two camps on three debates. What are you hearing?

BASH: They're very, very close. Sources I've talked to on both sides who are involved in the negotiations say that they really are -- just have to sort of finalize this. And as you mentioned, it is tentatively three debates as proposed by the bipartisan commission, between President Bush and Senator Kerry. Now, they are down to such nitty-gritty, I can tell you, Judy, that one senior Kerry adviser said that they are now talking about what the light will look like and how it will work that will tell the candidates their time is up. That's how specific they are right now.

But one thing I've learned in reporting this is that tentative is not a word in legalese and you have two very prominent lawyers leading the charge on the negotiations. You have James Baker on the Republican side, Vernon Jordan on the Democratic side. And all sides say nothing is a done deal until they actually sign the agreement. But they are pointing to perhaps the first debate of three debates next week -- Judy.

WOODRUFF: Lawyers and not to mention very experienced political hands.

BASH: That's true.

WOODRUFF: Dana, thank you very much.

Well, now let's talk more about Iraq politics and the presidential election. I'm joined by CNN political analyst Ron Brownstein of the "Los Angeles Times." Ron, you have the beheading today of another American hostage, two more -- another American, a British waiting for perhaps the same fate. The situation over there only seems to get worse. And yet support for the president holding up. How do you explain it?

RON BROWNSTEIN, "LOS ANGELES TIMES": Not only holding up but has grown. I think the key -- there have been two key factors in the improvement the president has seen in the polls over the last few months on Iraq. One is that since the handover of power in June to the interim Iraqi government the U.S. media has paid somewhat less attention until recently to the violence there. But just as importantly, the president has had success in making the argument, especially at his convention in New York, that the war in Iraq is the first step toward the long-run solution to the threat of terror. He has argued that the key to reducing the threat of terror is to spread democracy through the Middle East. This is the beachhead toward doing that. What happened today, I think, Judy, that's important is that John Kerry more directly than he has before frontally challenged that argument.

WOODRUFF: And what's so different about that? I mean, and frankly, the Bush camp keeps coming back and saying, well, it's John Kerry's 10th or 12th different position on Iraq.

BROWNSTEIN: John Kerry has certainly moved rhetorically and emphasized -- and raised and lowered the volume on different portions of his argument. But what he did today in his speech was different than what he has done earlier. What we heard from John Kerry last week was sort of an amplifying of the argument that the president's course is not working in Iraq. Today he more fundamentally challenged the course itself. He echoed arguments from people like Wesley Clark, Richard Clarke, Bob Graham, that goes directly at the heart of the president's argument.

Senator Kerry today argued that the war in Iraq, far from advancing our interests in the war on terror, has diverted our attention from the real sources of terror and may have in fact set back the cause of reducing Islamic extremism. That is -- the degree to which he explicitly embraced that argument today I think is new and does put him much more on a collision course with the justification that the president has laid out. You know, shifting his own argument over time from weapons of mass destruction toward democracy.

WOODRUFF: But given the fact that the conventions are behind us, clearly we have the debates to come, one of those debates is going to be devoted primarily if not exclusively to international foreign policy. Can John Kerry cut through, can he get through to the public's consciousness on all this?

BROWNSTEIN: I guess we'll know in November. Clearly, President Bush has taken the upper hand in this race. And I think it is largely because of the shift in opinion on Iraq as much as anything else. It's sort of the tipping point on how people feel about him. His ratings on terrorism are rock solid. As Dana mentioned, on health care and the economy, probably in the end John Kerry has an advantage. But how goes Iraq, to some extent that is how goes -- how goes President Bush. When people are feeling better about Iraq, as they have been in the last few weeks, he is stronger. The question really out there for him is can that improvement sustain the bad news on the ground and now the sharper critique from Senator Kerry? WOODRUFF: If this is such a smart argument for him to make, why didn't he do it before now?

BROWNSTEIN: Excellent question. You know, to some extent during the Democratic primaries, he was positioned somewhat on the more hawkish side of the argument. I think that what the Kerry campaign recognizes is that if people believe that President Bush's strategy in the war on terror overall is making us safer, it is going to be very hard to beat him. And as long as they view Iraq as contributing to that long-term security of the U.S., it becomes a positive for the president.

In the end, I think they have finally come to recognize that they have to challenge that directly and convince the American public that this is not taking us in the wrong direction on the issue that probably matters to people more than any other single one in this election: security and the war on terror. But it's a late start, and there's a lot of water under the bridge that complicates it for him.

WOODRUFF: It is puzzling to some as to why they didn't do it sooner. Ron Brownstein, always good to have you.

BROWNSTEIN: Thank you.

WOODRUFF: We thank you. Appreciate it.

A federal judge has struck down more than a dozen current rules on political fundraising. The ruling publicized today concludes that the Federal Election Commission improperly weakened campaign finance reform laws, marking a victory for lawmakers who sponsored the legislation. The law's main provisions banning most large donations remain intact.

But the FEC was ordered to write new rules on when candidates and outside parties may coordinate activities and how far the law goes in banning corporate or union so-called soft money donations. So-called 527 groups that have sponsored much of the negative advertising in this year's presidential race are not directly affected. And campaign finance experts say they doubt that this ruling will have a practical effect this year. The FEC, we are told, is expected to appeal.

Well, now checking the Monday headlines in our "Campaign News Daily" -- the two presidential running mates held dueling town halls today on the campaign trail. Dick Cheney began his day with a town hall in Cornwall, Pennsylvania. From there, he's headed to Grove City, Ohio, for a campaign rally later tonight.

Democrat John Edwards held a town hall meeting in his home state of North Carolina. From there, he also headed to Ohio, where he is scheduled to hold an event next hour in Cincinnati.

Checking in on the ballot access battle being waged by independent candidate Ralph Nader, Nader is now on the ballot in 30 states plus the District of Columbia. His spot on New Mexico's ballot is in question, however, and a legal hearing is scheduled for this afternoon. Counting New Mexico, Nader is on the ballot in a dozen battleground states, including Florida, Ohio, and Maine.

Louisiana voters have approved a Constitutional amendment that would ban same-sex marriages, and similar votes lie ahead in several showdown states and possibly Ohio. The Louisiana amendment passed easily Saturday with about 78 percent of the vote. Gay marriage bans are on the ballot in 10 other states this fall, including Michigan. Petitions are still being verified for a similar ballot measure in Ohio.

Well, with both the Bush and Kerry camps planning ahead for the debates, we're going to look back at some memorable face-offs between men who would have been president.

Also ahead, a unique constituency: Americans living in Israel. What are they thinking as Election Day in the U.S. nears?

And later, how far would an also-ran go to pay down his campaign debt?

(COMMERCIAL BREAK)

WOODRUFF: CNN White House correspondent Dana Bash telling us that a senior Bush campaign official is telling her that there is now a signed agreement between the Bush and Kerry campaigns for three debates. We're waiting to get the details. We are told they're going to be available around 6:00 p.m. on this Monday.

Again, our Dana Bash reporting that a Bush campaign official telling her that there is now -- there is now a signed agreement on the dotted line for three debates. And we, of course, were interested to know about all the details.

Well, if past debates are any guide, you can expect the unexpected. Our national correspondent Bruce Morton looks back at some of the more memorable verbal slugfests.

(BEGIN VIDEOTAPE)

HOWARD K. SMITH: ... by the two major candidates for the presidency.

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): Televised presidential debates, they started in 1960. Vice President Richard Nixon versus Senator John Kennedy. TV was black and white then. The viewers thought Kennedy won, but it was mostly style. Nixon looked tired, his makeup wasn't good, things like that. The much smaller number who listened on the radio thought it was a draw.

Anyway, that was it for a while. Kennedy might have debated in 1964, but he was murdered. Barry Goldwater challenged Lyndon Johnson to debate, but LBJ wouldn't. Nixon avoided debates in 1968, citing George Wallace's third-party candidacy and in 1972. But by 1976, Congress had changed the law to make carrying debates easier, and challenger Jimmy Carter debated President Gerald Ford, who seemed not to know that the Soviet Union had troops in its satellite countries in eastern Europe. GERALD FORD (R), FMR. PRESIDENT OF THE UNITED STATES: There is no Soviet domination of Eastern Europe, and there never will be under a Ford administration.

MORTON: But there was, of course. Viewers knew it and saw a president who seemed out of touch.

In 1980, Carter debated Ronald Reagan and probably wished he hadn't.

RONALD REAGAN (R), FMR. PRESIDENT OF THE UNITED STATES: Are you better off than you were four years ago?

MORTON: The debate wasn't decisive, but the economy really was bad, and Reagan's question reminded many that their answer to that question would be no. Four years later, Reagan seemed old and out of touch in his first debate with Walter Mondale. He fixed that in the rematch.

REAGAN: I will not make age an issue of this campaign. I am not going to exploit, for political purposes, my opponent's youth and inexperience.

MORTON: Sometimes it's little things. George Bush the First got criticized for looking at his watch during a town meeting format debate in 1992. Was he bored with the voters? Bill Clinton wasn't.

Four years ago, expectations for George W. Bush were low, and he exceeded them. Al Gore puzzled many by sighing while Bush spoke. No one knows what the 2004 debates will be like, but debates can be decisive and, unlike political conventions where you know the script, exciting.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Well, meantime, another development: A Senate Republican known for his moderate views says that he may not vote for President Bush in November. Rhode Island's Lincoln Chafee, who has opposed Bush on many issues, said today that he may write in a candidate instead of voting for his party's nominee. Chafee said that since John Kerry is widely believed to have a huge lead in Rhode Island, his vote won't make a big difference.

Americans abroad in the U.S. election. Coming up, thousands of American voters in Israel and their potential effect on the Bush-Kerry race for the White House.

(COMMERCIAL BREAK)

WOODRUFF: It may come as a surprise, but the Bush and Kerry campaigns aren't just fighting for votes in the United States, they're also aggressively going after Americans living abroad. CNN's John Vause has been talking to some of those voters living in the Middle East. (BEGIN VIDEOTAPE)

DAVID ABRAMS, ISRAELI-AMERICAN: I made a mistake. And I'm with Bush now all the way.

JOHN VAUSE, CNN CORRESPONDENT (voice-over): David Abrams says his mistake was voting Democrat in the last presidential election. Like many Israeli-Americans, back then he worried that George W. Bush would be like his father, considered by many in this country as pro- Arab.

NADIM KHOURY, PALESTINIAN-AMERICAN: Well, I voted last election for George Bush.

VAUSE: Nadim Khoury is a Palestinian-American. Like many Palestinians he voted for George W. Bush because he too thought the son would be like the father.

KHOURY: We thought that the son will help take some advice from his father, but it didn't work that way, unfortunately.

VAUSE: Nadim Khoury and brother David moved to the West Bank 10 years ago from Boston. With their life savings they started a brewery. The last four years have been bad for business. Road closures, curfews, and checkpoints have left them struggling to survive. And through it all they believe the U.S. has blindly supported Israel. And come November both say they probably won't vote.

DAVID KHOURY, PALESTINIAN-AMERICAN: With John Kerry ideology, what I hear, what I read in the newspapers, I think he will be biased towards the Israelis.

VAUSE: The Abrams family moved from New York. They also live in the West Bank, in a Jewish settlement called Efrat (ph), and like the Khoury family, maintain their U.S. citizenship. They say there's no difference between 9/11 and attacks on Israelis by Palestinian militants. And they see George W. Bush as a strong, decisive leader.

ARLENE ABRAMS, ISRAELI-AMERICAN: He's the only one that actually stood up there and said, either you're with us or you're against us. And he means that. He didn't do the flip-flop. He says what it is.

UNIDENTIFIED MALE: Those of you who want to hear about John Kerry...

VAUSE: In recent weeks both parties have been campaigning here.

KORY BARDASH, REPUBLICANS ABROAD: We've particularly targeted Americans from important swing states of Florida, Pennsylvania, Ohio, Michigan.

VAUSE: Last election Israeli-Americans overwhelmingly went Democrat. But the Republicans are expecting a much better result this time, the reward for what many here consider the most pro-Israeli White House in a generation. (on camera): Last election 14,000 Americans here cast an absentee ballot. Turnout this time is expected to be much higher. And consider this: according to Republicans Abroad, 6,000 former Floridians here are eligible to vote, a state which George W. Bush carried by just 537 votes.

John Vause, CNN, Jerusalem.

(END VIDEOTAPE)

WOODRUFF: It will be interesting to hear what's going on in other countries where Americans live. INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

WOODRUFF: That's it for INSIDE POLITICS this Monday. Thank you for joining us. 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 September 20, 2004 - 15:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: New fire on Iraq.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: From the beginning on Iraq, at every fork in the road, he has taken the wrong turn, and he has led us in the wrong direction.

ANNOUNCER: Is that John Kerry's ticket to a turnaround, or does he risk bolstering George Bush?

GEORGE W. BUSH (R), PRESIDENT OF THE UNITED STATES: I looked at the world and saw a threat in Saddam Hussein.

ANNOUNCER: Up for debates? Have the Bush and Kerry camps agreed that three times is the charm?

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: Objects in your mirror may be closer than they appear.

ANNOUNCER: John Edwards' primary season punch line now applies to the presidential polls.

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

(END VIDEOTAPE)

JUDY WOODRUFF, HOST: Thank you for joining us.

You've just been hearing from White House spokesman Scott McClellan, saying that the White House is pleased to know that CBS has come forward and expressed its regret, its apology for going forward with the story about documents that CBS now says it questions the authenticity of, documents that purported to show that President George W. Bush, when he served in the Texas Air National Guard, received favorable treatment.

We heard Scott McClellan say the White House, though, looking for more investigation on the part of CBS and other news organizations.

We're going to get -- have much more on that story in just a moment, but right now we want to turn to Senator John Kerry and his new get tough on Iraq strategy against President Bush.

Kerry delivered a major speech on that subject in New York today, after weeks of having allies urge him to be more aggressive and on the day before Bush addresses the United Nations.

Our senior political correspondent, Candy Crowley, is in New York.

Hello, Candy.

CANDY CROWLEY, CNN CORRESPONDENT: Hi, Judy.

If his critics wanted him to be more aggressive, that is certainly what they got today.

Senator Kerry at NYU giving almost an hour speech, a sustained critique of the president's policy in Iraq, not just the decision to go to war but how he conducted the war, how he has conducted the reconstruction afterwards, and how he has dealt with the peace.

From the beginning to the end, Kerry says this has gun a colossal failure of judgment.

(BEGIN VIDEO CLIP)

KERRY: In Iraq, this administration has consistently over promised and underperformed. This policy has been plagued by a lack of planning, by an absence of candor, arrogance, and outright incompetence.

And the president has held no one accountable, including himself.

(END VIDEO CLIP)

CROWLEY: Now, Kerry's critique today, as you mentioned, Judy, does come as the president gets ready to make a major foreign policy speech of his own as the U.N. opens here.

And it also follows a weekend of criticism from Republicans. Kerry mentioned not the "Q" word, as they say, quagmire, in his speech today but he did say unless there is a change of course then there is the prospect of a war with no end in sight.

And you may recall, Judy, that sometime during the primary Howard Dean said that the capture of Saddam Hussein had made the U.S. no safer. Here's what John Kerry had to say today.

(BEGIN VIDEO CLIP)

KERRY: We have traded a dictator for a chaos that has left America less secure.

(END VIDEO CLIP)

CROWLEY: Now, as you might imagine, the Republicans have jumped all over that, noting that when Howard Dean said that the U.S. was no safer John Kerry disputed that and said it was indeed. So, the back and forth starting even before the speech was over -- Judy.

WOODRUFF: All right. Candy Crowley, following John Kerry today at his speech in New York and beyond. Candy, thank you very much.

The Bush campaign accuses Kerry of sending a message of defeat and retreat on Iraq. As for the president, he's been stumping in the showdown state of New Hampshire today. A short while ago he again defended his decision to invade Iraq and overthrow Saddam Hussein, and he took aim at Senator Kerry's latest critique on the war.

(BEGIN VIDEO CLIP)

BUSH: Today my opponent continued his pattern of twisting in the wind, with new contradictions of his old positions on Iraq. He apparently woke up this morning and has now decided, no, we should not have invaded Iraq, after just last month saying he still would have voted for force even knowing everything we know today.

Incredibly, he now believes our national security would be stronger with Saddam Hussein in power, not in prison.

(END VIDEO CLIP)

WOODRUFF: President Bush speaking just a very short time ago in New Hampshire.

All right. Now we turn to another story of great interest to the Bush campaign.

CBS News said today that it cannot prove the authenticity of documents casting doubt on the president's National Guard service. The network says that retired National Guard Lieutenant Colonel Bill Burkett now has admitted deliberately misleading a CBS News producer about the origins of the documents.

CBS News anchor Dan Rather issued a statement saying, quote, "If I knew then what I know now, I would not have gone ahead with the story as it was aired, and I certainly would not have used the documents in question."

CNN's Suzanne Malveaux, our White House correspondent, traveling with the president, has more on all this -- Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Judy, I just spoke with White House Press Secretary Scott McClellan about those documents. The president's response, he was told about this aboard Air Force One, about the CBS statement, and McClellan essentially saying that this simply proves that the president all along has served honorably.

He says that there's still a lot of questions that remain regarding those documents. He still suggests in some way that the Kerry campaign, certainly the Democratic National Committee had something to do in orchestrating the timing of the releasing of those documents to affect the elections.

And also the White House saying, of course, that they want to get to the bottom of this. They do not understand why it was that CBS News would use what they are calling a discredited source to move forward on this story -- Judy.

WOODRUFF: Thanks very much. I know we're going to be following this, and we're going to be hearing in a little while from Dan Bartlett on the White House about this as well. Suzanne, thank you very much.

Well, amid all the latest political fireworks, the Bush and Kerry camps may have agreed on something of a presidential debate schedule. Our political editor, John Mercurio, has been digging for all the details on this.

John, what have you turned up? Where do things stand?

JOHN MERCURIO, CNN POLITICAL EDITOR: Well, there are several signs today, at least from Democrats, that there is a deal and that the first presidential debate between President Bush and John Kerry will take place ten days from now in Miami.

There's two -- we have two Democratic sources confirming for CNN as recently as an hour ago that the Bush and the Kerry campaigns have agreed to the presidential debate commission's call for three debates.

This would be a small victory for John Kerry, who had sought to have as many debates with President Bush as possible. President Bush, of course, strongly preferring to hold only two.

Now, the Bush campaign this afternoon still denying that a tentative agreement has been reached, calling his reports premature and in some cases inaccurate.

But Scott McClellan, the White House press secretary, opened the door a little bit, a couple hours ago, saying, quote, "There could be more on that later today." So, we'll be watching.

Now, given all of that, the debate schedule that we have that the commission and John Kerry have endorsed would call for the first debate to be September 30 in Miami. This debate would focus on foreign policy.

Now, a presidential debate commission spokesman I talked to today said they've already started to move people and resources down to Miami for that debate.

The second one would take place October 8 in St. Louis and would feature undecided voters at a town hall setting. This is the debate that the president was sort of leery of participating in.

The third debate would be October 13, Tempe, Arizona. It would focus on domestic issues. And of course the vice president, and of course, the vice president and John Edwards would debate October 5 in Ohio.

WOODRUFF: So, John, why is it that, do you think the Democrats were a little quicker to put the word out that this may have been worked out than the White House? MERCURIO: Well, Republicans say it goes back to sort of the main sticking point for this whole negotiation, which was whether or not they should hold three or two debates. They say that the Democrats were trying to sort of force their hand by leaking the -- leaking the terms of the so-called deal in order to put public pressure on President Bush to accept those terms.

Now, Democrats say that -- Democrats say doesn't make any sense, especially if they ultimately decided to go with the three debates President Bush would come out looking like he had sort of lost that battle.

But Judy, the answer, the true answer, I guess, is that I don't know. I mean, sources in both campaigns say that the terms of these negotiations -- the terms of these debates were negotiated by two people, not an entire team. It was Vernon Jordan for Kerry and James Baker for George Bush. And so, any explanation for the rationale would really have to come from one of those two people.

WOODRUFF: So, John, if this is true, though, and it is going to happen, why did the Bush team ultimately agree to three rather than the two they were putting out the word that they wanted?

MERCURIO: Well, again, James Baker is not returning my phone calls, but I think it really comes down to three things.

I think first of all the president realized there was a political risk in ducking the debates. Incumbents have done this in the past and they've survived, but President Bush is in a slightly unique position. He's not viewed as being a real debate master. He really didn't need to duck this.

Missouri is a very important state in this race. He really didn't want to seem as though he was alienating voters.

And third, I think that the Bush campaign is feeling pretty confident right now. The poll numbers are looking really good. And I think the confidence sort of allows him to do bolder things, and I think that's what they're trying to do.

WOODRUFF: OK. John Mercurio, our political editor, thanks very much. And of course, we'll be looking for confirmation of all this, hopefully within a very short time.

MERCURIO: Exactly.

WOODRUFF: Well, you can look for Iraq to be a continued source of campaign debate right through election day. Up next, we're going to talk about the violence over there and the political fighting at home with President Bush -- with prominent, I should say, Bush and Kerry allies, including former Secretary of State Madeleine Albright.

Also ahead, the Bush-Kerry horse race. Our Bill Schneider will read between the lines of the latest flurry of polls.

Plus, more on the CBS News mea culpa in connection with the Bush National Guard controversy.

With 43 days until the election, this is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: More now on the Bush-Kerry dispute over the war in Iraq.

As we mentioned earlier, Kerry was on the attack again today, charging that mistakes by Bush in invading Iraq could lead to an unending war. Kerry's speech comes one day before Bush's scheduled address to the U.N. General assembly in New York.

In just a moment we'll hear from White House communications director Dan Bartlett on the Iraq situation and those CBS documents, but a short while ago I talked about the issue with former Secretary of State Madeleine Albright.

I started by asking her if Kerry is saying something different now about his position on Iraq than what we've heard before.

(BEGIN VIDEOTAPE)

MADELEINE ALBRIGHT, FMR. SECRETARY OF STATE: No, he's not. What he is saying is that he believes that the president has made some major miscalculations on Iraq, that he has been saying that for some time and that he is not leveling with the American people.

That the situation is chaotic, that the president has not really paid attention even to the National Intelligence Estimate that he got in June or July, in which it was described that the situation is chaotic and Senator Kerry has been saying for some time that this is an unacceptable situation.

WOODRUFF: Well, today John Kerry said, among other things, he said, "I -- my answer is no" to the question whether he would do again what he did before, authorize that the U.S. should have invaded Iraq, given -- knowing now what the circumstances were then, whereas one month ago John Kerry said he would have voted for the authority to go to war in Iraq.

This doesn't seem to be consistent.

ALBRIGHT: Judy, what he's saying is that he voted as a senator to give authority to a commander in chief to use the vote to get diplomatic action and authority.

What he is saying in his speech today is if he were president, the commander in chief, knowing what he knows now, he would not be -- have given it this -- he would not have carried it out the way President Bush did.

But I think it's very important for people to understand, he voted as a senator who was being asked by the executive branch to give authority to the president and to give some strength to the president's voice when he went to the United Nations to ask for the inspectors.

And there's quite a difference in the way that you act when you are a senator being asked for authority. And the question is, as he has stated in his speech, if he were commander in chief he would not be -- have taken the same action knowing what he knows today.

WOODRUFF: In the poll that came out over the weekend, "The New York Times"/CBS poll, among other things respondents were asked whether they thought John Kerry had spent more time attacking George W. Bush than explaining what he would do as president.

Does he run a risk by this speech today, which is more criticism of Bush than it is an explanation of his own policies, of just furthering that impression?

ALBRIGHT: Well, in the speech he also provides a four-point plan for what he would do in Iraq, which includes internationalizing it and really working much harder to get international support. And he suggests that the president when he's at the United Nations convene a group and really do a lot of diplomatic work on it. He also explains the importance of training the Iraqis through NATO.

But Judy, I think with the administration constantly trying to really misinterpret or just say the wrong things about Senator Kerry's position, he has to defend himself on that and make very clear why he thinks and where President Bush went wrong.

The American people need to know that the president has misled them on every part of the Iraqi policy, and President -- and Senator Kerry has to point that out.

WOODRUFF: But this war's been underway for 18 months. The election is only six weeks away. Isn't it late in the game for Senator Kerry to still be explaining what he would do differently?

ALBRIGHT: I think that Senator Kerry has been working on explaining that. It hasn't come through. He is making that message very loud and clear.

And six weeks is actually, as you know, a long time in elections. And I think this is the time that the people have really started to tune in.

Plus, I have to tell you that the misjudgments and miscalculations of President Bush are becoming clearer and clearer every day.

So, the combination of Senator Kerry making very clear his position yet again and making also very clear where President Bush has misled our country, I think is a very appropriate time to do this.

(END VIDEOTAPE)

WOODRUFF: Former Secretary of State Madeleine Albright.

Up next, the other side of the argument. I'll speak with Dan Bartlett, the White House communications director. I'll also ask him about the CBS News story, the network saying it's sorry. We're going to have more on this CBS apology over using questionable documents in a story on the president's National Guard service.

(COMMERCIAL BREAK)

WOODRUFF: Some breaking news coming into CNN from Springfield, Illinois, the state capitol in Springfield. Word coming down that at least one person has been shot. The building -- the capitol building has been locked down. Employees ordered to stay in their offices.

It is not immediately clear, we are told, if the shooter is still in the building. It's also not clear if more than one individual has been shot.

CNN working on this story right now. And we will bring you any more information as we get it. Again, a shooting at the state capitol in Springfield, Illinois.

We're returning now to our discussion on Iraq. A moment ago we heard from former Secretary of State Madeleine Albright.

Joining us now, White House Communications Director Dan Bartlett.

And Dan Bartlett, before I turn to what Madeleine Albright said and the CBS documents, which I do want to ask you about, the Associated Press is reporting that there is an Islamic web site reporting that an American hostage in Iraq has been killed. And now Al-Jazeera is reporting that an al-Zarqawi group is posting a video on the Internet.

Do you have any information about the fate of those American hostages?

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: No. Unfortunately, I don't, Judy.

This is a very difficult period for many people serving in Iraq. It's very difficult for the Iraqi people. The terrorists are determined to try to stop the progress in Iraq.

Al-Zarqawi, who is a part of the al Qaeda network, an affiliate with al Qaeda, is trying desperately to deter the progress going on in Iraq. They're trying to use to shake the will of the world, of the free world. And the fact that the free world is coming together in New York this week is an opportunity for us to talk about the progress being made and the path going forward.

But these specific incidents I don't have the latest information on.

WOODRUFF: And again, I want to stress CNN has not been able to independently confirm this. I'm reporting what we're hearing from the Associated Press and from Al-Jazeera.

But Dan Bartlett, let me -- let me turn to John Kerry's remarks today. In a way this report out of Iraq is emblematic of this.

He says, among other things, the president is not leveling with the American people about the realities on the ground. He said the situation is far worse than what George Bush has acknowledged, and he says the American people deserve the truth.

BARTLETT: I think the senator's taken probably a dozen positions on this very critical issue. I think it would be a little surprising for him to be lecturing the president on not leveling with the American people.

I think Madeleine Albright said it best when saying there's a difference between being a senator and being a commander in chief. And as a senator it obviously doesn't matter what you say or what you do or the votes that you cast.

Every time we have seen Senator Kerry come out and speak on this issue he's changed his position. And today we're hearing the mother of all flip-flops.

Now he is suggesting, what he is saying explicitly, is that we would be better off with the security of a dictator than the hope and security of a free Iraq.

I mean, think about what Senator Kerry has done today. On the very week when the new Iraqi Prime Minister Allawi is coming to our country to talk about the very progress we're making, he is disparaging that progress, looking at always at the dark clouds, not the silver lining, not looking at the fact of how far this country has come in such a short period of time.

The president has been very straight with the American people. This has been difficult work, and the sacrifices have been very necessary.

WOODRUFF: But Dan Bartlett, it's not just John Kerry. It's Republicans. Over the weekend, Chuck Hagel, Senator Hagel of Nebraska was on the weekend shows, and he said doesn't think the U.S. is winning in Iraq. He says we're in trouble, we're in deep trouble. He goes on to give details.

We heard John McCain saying again, not enough troops were sent over there. This is not just John Kerry who's -- who's making these observations.

BARTLETT: Well, I think what President Bush is doing and what the commanders on the ground are doing is telling us the ground truth of what's going on in that country.

President Bush listens to his commanders when it comes to troops levels. President Bush is listening to Prime Minister Allawi and the new government when they talk about the way to handle some of the political issues that are taking place as well as the security issues.

This is a sovereign government now. And this sovereign government has only been in place for about three months. And it's going to be difficult work as we go forward. And there's always going to be opportunities for second-guessing like Senator Kerry is doing.

But the bottom line is that this country is on a path to democracy and they're doing far better with Allawi and his government in power and not Saddam Hussein.

And it's breathtaking to see that Senator Kerry now has come full circle and is now saying that we would be better off now with Saddam Hussein in power. That is an incomprehensible statement, especially if you look back at what he has said in the previous 17 months.

WOODRUFF: Well, I don't know if that's exactly what he said. But I do want to move on very quickly to the CBS apology today, Dan Bartlett. They say now it was a mistake on their part, a mistake in judgment to rely on documents that cannot now be proven to be authentic.

Are you satisfied? Are you -- is the president satisfied that CBS has come clean on all this about in terms of what it knows about what happened?

BARTLETT: Well, Judy, we do appreciate that they regret going with a story that's now been proven to be based on fake documents.

There are still more questions being raised as opposed to answers, and it's important that we get to the bottom of this. We need to know where the documents came from, who produced them, who was behind these attacks.

We all know the political nature of this. We're at 55 days before an election, and these documents are put forward to the American people that turn out to be fake.

Who were -- who was behind these documents? Who was behind organizing this story? Those are the critical questions that the American people deserve answers to.

It's a good first step to have them obviously come forward and regret using them in the first place, but good journalism will show if we can get to the bottom of some of these critical questions.

WOODRUFF: Well, I know there is going to be ongoing journalism looking into all this. Dan Bartlett, thank you very much.

BARTLETT: Thank you.

WOODRUFF: We appreciate you making time to talk to us. We appreciate it.

BARTLETT: You're welcome.

WOODRUFF: Well, George Bush is ahead in most of the major polls, but all is not lost with the Democrats, according to our Bill Schneider when we come back.

Plus, we will talk with both presidential campaigns about these new numbers. And later, how will the CBS apology over those allegedly forged National Guard documents affect the race for the White House.

But first, live to Wall Street and our Rhonda Schaffler.

Hi, Rhonda.

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

WOODRUFF: Welcome back to INSIDE POLITICS. I'm Judy Woodruff.

Shots from both sides today over the war in Iraq. John Kerry says mistakes by President Bush in invading Iraq could lead to unending war there. Kerry made his comments during a speech at New York University.

The president, at a campaign event in New Hampshire, is urging voters to stick with him on the war. He says the middle of a war is no time to change leadership.

Since the end of the Republican convention, George W. Bush has climbed ahead of John Kerry in most opinion polls. Our senior political analyst, Bill Schneider, reports, however, that Bush's lead falls just short of a critical benchmark, and the numbers reveal what could be overlooked support for Kerry.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The latest national polls of likely voters show varying results, from a neck-and-neck race to a 13-point Bush lead. Average them, and you get Bush at 50 percent and Kerry at 44. But objects in these polls may be closer than they appear.

Republicans are wary of overconfidence.

MARC RACICOT, BUSH CAMPAIGN CHAIRMAN: But we would still at the end of the day make note of the fact that this is going to be a very, very close contest.

SCHNEIDER: For an incumbent running for reelection, 50 percent is not a safe figure. This weekend, public polls were released in six states that voted for Bush in 2000 and are now highly competitive. All show Bush leading Kerry. But look closely at the numbers.

In Arizona, Bush has a double-digit lead over Kerry. The president's support? Fifty percent.

In Missouri, two polls show Bush ahead by seven points. He's at 48 in one poll and at 49 in the other.

A Nevada poll shows Bush up by five, with 50 percent. New Hampshire, Bush leading by nine, with 49 percent of the vote. Ohio, which some call the new Florida, doesn't look too close. Bush leading by seven among likely voters in one poll, by eight among registered voters in another. Bush's support? Forty-nine and 50 percent.

West Virginia, very close. Bush 45, Kerry 44.

Bush is running ahead in these competitive states he carried last time, but never with more than 50 percent of the vote. These polls are not entirely bad news for Democrats.

TAD DEVINE, SR. STRATEGIST, KERRY CAMPAIGN: More people don't want to reelect the president than want to reelect him.

SCHNEIDER: Or at least voters are split.

(END VIDEOTAPE)

SCHNEIDER: When an incumbent's support is 50 percent or less, it means that at least half the voters are not prepared to reelect him, even if they're not all ready to support the challenger. Now, typically, most undecided voters end up with the challenger. At least that's what polling experts say -- Judy.

WOODRUFF: All right. Bill Schneider, thank you very much.

And before I move on, I want to let our audience know that CNN is now reporting that an Islamic Web site -- an Islamist Web site is showing video of an American beheaded, executed by a group supposedly connected with Mr. al-Zarqawi, who is a close -- Abu Musab al-Zarqawi, a terror suspect connected to Osama bin Laden.

There's a video that has been showing just in the last few minutes, nine minutes long. It has not been verified. We are told by The Associated Press it shows a man sobbing blindfolded, wearing an orange jumpsuit. And we are told that the man is identified as Eugene Armstrong, an American who was working in Iraq, a civilian. And this is a picture that was shown earlier of Eugene Armstrong.

Again, CNN trying to get more information. But this is what is being reported right now on an Islamic Web site, and we are working to get more background, more information on the story. More tragic news out of Iraq.

Well, in just a moment, I'll discuss the latest polls that we were hearing about with Bill Schneider and other issues with Bush campaign adviser Tucker Eskew.

First, I'm joined here in Washington by John Kerry's senior campaign strategist, Tad Devine.

Tad Devine, before we get to the polls, what about President Bush's comment today, though, that given the crisis the United States is in, in Iraq, this is no time to change leadership?

DEVINE: Judy, the president's mistaken. The president's decisions in Iraq have been catastrophic for this country. We need to go in a new direction.

Unfortunately, every step of the way leading up to war and thereafter the president has misled this country. And the result of the president's choices are catastrophic. So, unfortunately, until the president can begin to recognize the reality of the disastrous situation in Iraq, he cannot begin to correct it.

WOODRUFF: Let's talk about the polls, the battleground state polls. In particular, not good news for John Kerry.

State after state, Ohio, New Hampshire, Iowa, Wisconsin, even Pennsylvania shows movement for the president. How do you and your campaign take any heart from this?

DEVINE: Well, Judy, I think those polls are about as accurate as the CBS documents, to tell you the truth. I mean, I just see a completely different race shaping up.

I mean, we've seen two national polls, for example, over the weekend. The Zogby Poll has the race at three points. The president's reelect is 47 in that poll. Fifty percent of the respondents say he does not deserve reelection.

The "Christian Science Monitor" poll out today, the same story, a three-point race with likely voters. A one-point advantage for the president with registered voters.

I think we've got some very good races shaping up. We feel very confident about Ohio, Florida, Pennsylvania, those mega-state battlegrounds.

I know in New Hampshire, for example, where those polls said John Kerry was behind, that's just simply not the case. It's not the case in Oregon, either.

We're actually in stronger shape today with the Democratic nominee, much stronger shape, than we were four years ago battleground by battleground. So, I disagree with that assessment, I look forward to the days ahead. I think we're going into the debates in very strong shape.

WOODRUFF: Well, you say this, Tad Devine, but in the "Boston Globe" today a senior adviser to John Kerry, not named, says, yes, last week was stronger than the week before, this week stronger than -- it will be even better, but this is not where we hoped to be.

DEVINE: Well, listen, I guess that's why I talk on the record all the time, so you can see what I'm saying. I mean, listen, Judy, I think it's understandable, the incumbent president has an advantage. But the incumbent president's high watermark by every historic measure is the days after his convention. And what we've seen out of this president is a persistent fall from that high watermark.

I think the president is in trouble. I think Bill Schneider's piece accurately pointed it out right beforehand, that when the president can't get up in the 50s in horse race, when the internals, the right track number, the wrong track number so high for him, the right track number so low, his reelect so low, this president is in deep trouble today. And I think there's a reason he's in trouble. His policies in for Iraq and for the country have been nothing short of a disaster.

WOODRUFF: Well, there's another way to look at the polls. When people were asked -- and the latest CBS/"New York Times" poll came out on Saturday. People were asked, "How do you feel about John Kerry's ability to deal with an international crisis?" Sixty percent said they're uneasy. That they don't have confidence in his ability to handle.

DEVINE: Well, sure. And Judy, I don't it's surprising that the incumbent president would enjoy some advantage in terms of some of these internal dimensions.

The problem with the president is he does not enjoy the confidence of the country. And that's why we're looking forward to debates.

We'll have a chance for the American people to see both of our candidates on stage, to size them up. I think as people see John Kerry's plan to move this country ahead here at home, to strengthen our economy, to expand access to health care, to cut the costs of health care, to deal with real issues that people want debated, they're going to understand that the choice for John Kerry is a choice to move the country in a new direction and to move our nation ahead. And I think it's going to be an easy choice in the end for the American people.

WOODRUFF: How do you get your message across, though, whether it's on Iraq or anything else, especially when you have the Bush campaign and the White House responding? As just heard Dan Bartlett say, this is John Kerry's 12th position, he said, on Iraq.

DEVINE: Well, I think the American people are seeing how ridiculous and silly the complaints are by the president. Listen, the American people want a president who will deal with the real issues that they confront every day, and they also want a president who will tell them the truth.

And that's the problem with George Bush. He's living in, as John Kerry said, in a fantasy world of spin when it comes to Iraq. He refuses to recognize how difficult the situation is.

We found out last week that by his own national intelligence estimate the situation in Iraq was deteriorating. The president refuses to recognize the reality. And until he recognizes the reality of Iraq, a reality which today is causing America to spend $200 billion there, as we are unable to deal with the problems here at home, he won't be able to make progress. And that's what people want.

They want progress in their lives. They want a president who stands on their side and not on the side of the powerful and privileged, where this president and this vice president have stood since day one of his presidency. WOODRUFF: A vigorous defense of John Kerry by Tad Devine.

It's always good to see you.

DEVINE: Good to see you.

WOODRUFF: Thanks for making time. We appreciate it.

Well, that is the view from the Kerry campaign. Up next, a Republican response. Bush campaign adviser Tucker Eskew joins me to talk about the campaign and John Kerry's critical comments about Iraq.

CBS backtracks on the Bush National Guard documents. Jeff Greenfield assesses the potential effect on the White House race.

And later, Ralph Nader keeps adding to his list of ballot victories. We'll update Nader's status around the country, including the showdown states where he could have the most effect.

(COMMERCIAL BREAK)

WOODRUFF: This breaking news. An Islamic Web site, as we've been telling you, is now posting video of the beheading of an American hostage.

We have more now from CNN'S Walter Rodgers. He joins us from Baghdad live, where it is just before midnight -- Walter.

WALTER RODGERS, CNN SR. INTERNATIONAL CORRESPONDENT: Judy, that video shows the painful and brutal beheading of Eugene Armstrong, one of the three westerners who were kidnapped by Abu Musab al-Zarqawi's group, Unification and Jihad, last Thursday. It is an extraordinarily brutal execution.

You can see five men standing in black behind the one man who is about to be executed. They're all wearing hoods, of course. And the man about to be executed, Eugene Armstrong, is wearing an orange jumpsuit.

The actual execution we will not show you, but it is essentially a man with a knife. The man identified as Abu Musab al-Zarqawi, the most wanted man in Iraq. There's a $25 million price tag on his head.

He brutally saws off Eugene Armstrong's head. And you can hear the man screaming as he is dying there. And then, gleefully and triumphantly, the Musab al-Zarqawi people hold up Armstrong's head for the camera and place it back on the corpse.

Obviously, this is more than we can show you on television. It is what happened here in Iraq.

Beheading is not an infrequent occurrence. In fact, three Kurdish militiamen were also found beheaded up by Mosul.

But again, this time the actual crime appears to have been committed by Abu Musab al-Zarqawi, as I say, the most wanted man in Iraq. He is a Jordanian. He is the one the Americans believe is most responsible for many of these heinous crimes which we see and hear about almost every day here -- Judy.

WOODRUFF: And Walter, very quickly, there are two other western hostages, an American and a Canadian, we believe, being held by the same group. And I gather a deadline still out there with regard to them?

RODGERS: Yes, Judy. Zarqawi's group is saying that they will be executed next.

The other American is Jack Hensley. He was working with Armstrong. And the other individual is actually not a Canadian, but a British subject. His name is Kenneth Bigley.

All three -- one has already been executed this evening, according to the video on the Web site, and there appears to be no doubt that it was Eugene Armstrong who was killed by Abu Musab al- Zarqawi. Again, beheaded. A knife literally saws off his head as he's screaming. And then the other two are slated to be executed at the whim and will of the Zarqawi fighters -- Judy.

WOODRUFF: Very, very grim news indeed out of Iraq. Walter Rodgers, thank you very much for bringing us what are gruesome but important details that we need to share with you.

And I'm just being told, as I was listening to Walter, that U.S. officials are confirming that the body has been located. And CNN, of course, is working the story. And we'll get you more information just as soon as we have it.

Well, we just heard before this from John Kerry's senior strategist, Tad Devine. With me now from Bush-Cheney campaign headquarters in Arlington, Virginia, Bush campaign adviser, Tucker Eskew.

Tucker Eskew, I will turn in a moment to what John Kerry said today. But first of all, your reaction to the news of this beheading of an American in Iraq and, frankly, to the larger picture of tragedy that it paints in terms of what's going on in that country.

TUCKER ESKEW, BUSH CAMPAIGN ADVISER: These are murderers. They're the worst form of scum. We have to fight them with everything we've got.

If this, now apparently proven true, latest incident of the kind of evil to which these people have stooped to is proven true, it's just more evidence of why we have to be on offense, why we have to be resolved, why we have to be consistent, why we have to use the might of our military, our coalition and all the force we have. Does anyone doubt for a minute that these people don't want to kill innocent people?

They want to do it on our shores. They want to do it overseas. They will do it anywhere they can by any means they can, and we have to fight them. WOODRUFF: But it is, Tucker Eskew, these beheadings and the ongoing violence, American soldiers dying, Iraqis dying, that has led not only John Kerry but even Republicans to argue that the war is not going well, that mistakes have been made. The latest CBS News and "New York Times" poll showing almost half the respondents don't approve of the president's handling of Iraq.

ESKEW: Similar polls, Judy, show majorities believing it was the right thing to do to remove Saddam Hussein from power. So, I think there are polls in any given week.

The news, there's been some bad news. The news ahead this week, we'll see the prime minister of a sovereign government from Iraq, Mr. Allawi, come to the United States and tell us himself in his own words, his own voice, what's happening in his country, just as President Bush has acknowledged these hard times and the difficulties ahead, particularly as we get closer to elections.

Secretary of State Powell wrote last week in "USA Today" about the strides being made toward the president's five-point plan, a plan, by the way, which our opponent in this presidential election has tried to rip off and make his own, with four of his points mirroring those of President Bush's plan over the last year. I think Senator Kerry demonstrated today in we cannot turn to not inconsistent, flip- flopping voice in these times of change and turmoil and terror.

By one account here at the campaign, 14 separate flip-flops in that speech alone. You know, there's an old saying where I come from about a clock being right twice a day if it's stopped. Well, John Kerry's taken every position on Iraq, every single position.

So, he can now choose one based on how that day's headlines are going and claim that's his position. That's not the kind of leadership the country's looking for.

WOODRUFF: Well, I will say I feel a little crass asking you about polls at a time when we are talking about the beheading of an American hostage in Iraq, but we do want to ask you because we talked to -- to -- to Tad Devine a moment ago about these polls, and we heard analysis from our own Bill Schneider. These battleground state polls, Tucker Eskew, do show the president ahead, but he seems to be at 50 percent and lower.

As Bill Schneider pointed out, is this not worrying to you, to the campaign, in that an incumbent, if he's not at 50 percent now, we know that these undecided voters tend to go with the challenger?

ESKEW: Well, we know we'd rather be five, three, eight, nine, varying from state to state, points ahead than behind in arguing the position that 50 percent isn't enough than where the Kerry campaign is. We believe that the race is close nationally. We believe it's close in the battleground states.

We have the momentum on our side. I think that's what's important. Americans are starting to hone in on the very high-stakes choice they have to make in November. And that's why we believe we've seen these numbers moving in our direction.

You know, when you talk about polls, Judy, that gauge the horse race, but we could also talk about what those questions really ask about the people who are offering themselves for the presidency. And President Bush, by a 70 percent to 23 percent margin over his opponent, John Kerry, is seen as someone willing to take a stand even if it's politically unpopular.

John Kerry blows with the wind. President Bush, even when you disagree with him, you know where he's coming from.

WOODRUFF: All right. A vigorous advocate for President Bush. Tucker Eskew, thank you very much.

ESKEW: Thanks, Judy.

WOODRUFF: We appreciate it.

A stunning reversal by CBS News. Coming up, our Jeff Greenfield on the network's concession that it cannot vouch for those memos questioning Bush's National Guard service.

We'll be right back.

(COMMERCIAL BREAK)

WOODRUFF: As we told you earlier, CBS News and anchor Dan Rather now says that they cannot vouch for the documents the network used in a story questioning George W. Bush's Air National Guard service during the Vietnam War.

Joining us now in New York with his take on the controversy, our senior analyst, Jeff Greenfield.

Jeff, how could this have happened? How could a network with CBS's reputation, at least what it says is its reputation, and I think what many people would agree, reputation for credible reporting and, you know, painstaking research, how could this happen?

JEFF GREENFIELD, CNN SR. ANALYST: Well, how could CNN have put on the Tailwind story in 1998? How could "The New York Times," arguably the most prestigious paper in the world, have run stories by a reporter who made it up? How could "The Washington Post" have won a Pulitzer Prize 20 years ago for a story about a non-existent eight- year-old heroin addict?

I mean, the first explanation, which is the explanation for most everything in this world, is human error. I think in this case you add to that the fact that the -- that the provenance of the documents, that is, where did they come from, CBS now says that they were misled by their source, Bill Burkett, this retired National Guard lieutenant, who has long had very critical things to say about the treatment that George W. Bush got in the National Guard, even accused officials of sanitizing the record, they acknowledge that he misled them about where the documents came from.

They had document experts who looked at these things and said, you know, we've got some problems with these, and they chose to go ahead. So, the answer, I think, to your question is because this happens all too often, even to prestigious news organizations.

WOODRUFF: Jeff, some people are already asking, was this an honest mistake or was there some political agenda here? You know, clearly, there was an agenda on the part of whoever provided the documents, but what about on the part of CBS?

GREENFIELD: Sure. Well, you raise an interesting point.

In all the talk that goes back more than 30 years about liberal media bias, exhibit A for the people who charge liberal media bias is and has been Dan Rather. This goes back to the famous press conference where he -- Richard Nixon asked him, "Are you running for something?" And he said, "No, are you," to a 1988 confrontation with then Vice President George Herbert Walker Bush, where it got very testy, and the vice president challenged Dan Rather on his bona fides.

So, I certainly think among those people there's no doubt what the motive was. I also think it's important to note that Dan Rather was very forceful, up until today, in his defense of these documents.

But my feeling is that, you know, when you make -- when people make these allegations from the left or the right, you should never underestimate the power of human beings to screw something up. Because if CBS wanted to hurt George Bush, relying on documents that they then had to repudiate is not exactly the way to go about it.

In fact, even though many other news organizations, not using these documents, have raised very tough questions about how Bush got into the National Guard and what did he do when he was there, I think from now on the impact of those allegations is going to be substantially undercut by these documents, which I think you should call the 13th stroke of the clock, that cast doubt not only on itself but all that's gone before. I think people will be -- will be much less prone to believe those stories because of this.

WOODRUFF: So, you're saying, if anything, George Bush has been helped by all of this?

GREENFIELD: Well, he's certainly -- yes. Look, if -- I'm not equating this with any kind of wrongdoing, but if you're -- if somebody's on trial and the defense attorney can show that the prosecutor introduced phony documents, then it doesn't matter what other evidence there is. A jury is likely to disregard the whole case.

And in this case, when people hear was Bush treated by the National Guard more favorably because his dad was an important figure, the fact that CBS's documents now can't be supported I think undercuts the broader argument. That, by the way, puts aside the question of whether this kind of 35-year-old or 30-year-old controversy should matter in this campaign anyway. But yes, I think the Bush campaign probably is absolutely delighted, as are all the people who regard mainstream media as essentially unreliable. This is a great triumph for the blogosphere, for what one former CBS News executive called guys sitting in their pajamas in front of a computer who manage to -- to be apparently more accurate about the -- the reliability of these documents than one of the world's most powerful news organizations.

WOODRUFF: Well, it's certainly going to be one of the highlights of -- or lowlights, as the case may be, as we all look back on this campaign years from now. Jeff Greenfield, our senior analyst, thanks very much. We appreciate it.

With six weeks and counting until voters decide, we'll get another take on John Kerry's new Iraq-centric approach.

Plus, is the president prepared to debate three times or not? We'll have a report from the White House when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Iraq and the presidential vote. Will it be the issue that tips the race one way or another?

A truce in the conflict over debates? It's enough to give political observers flashbacks.

RONALD REAGAN, FMR. PRESIDENT OF THE UNITED STATES: Are you better off than you were four years ago?

ANNOUNCER: Israel as an election year battleground. How's the Bush-Kerry contest playing with Americans living in the Jewish state?

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

(END VIDEOTAPE)

WOODRUFF: Welcome back. As John Kerry ratchets up his rhetoric about the president's decision to go to war in Iraq, the Bush camp is responding with a familiar campaign refrain -- bring it on. More on the Republican reaction in a moment. First, Senator Kerry's critique. CNN's Bob Franken reports from New York.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN CORRESPONDENT (voice-over): The Kerry campaign called this an important speech on Iraq, that importance certainly magnified by the timing, right before President Bush comes to this city for an address to the United Nations.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The president should convene a summit meeting of the world's major powers and of Iraqi's neighbors this week in New York, where many leaders will attend the U.N. General Assembly.

FRANKEN: An effort, said Kerry, to regain international cooperation. It was part of a four-point plan the campaign presented as newly significant. The other parts, urgently expand the Iraqi security forces training program, a reconstruction program, steps to guarantee the promised elections can be held next year.

KERRY: George Bush has no strategy for Iraq. I do. And I have all along.

FRANKEN: A Bush campaign spokesman responded by saying that Kerry's strategy would make the world a far more dangerous place. But Kerry says the point is the president misled and misleads the American people about what the Democrat calls catastrophic miscalculations.

KERRY: His miscalculations were not the equivalent of accounting errors. They were colossal failures of judgment, and judgment is what we look for in a president.

FRANKEN: The judgment that Kerry is trying to influence with his tougher tone is the one that the voters will make in just six weeks. Bob Franken, CNN, New York.

(END VIDEOTAPE)

WOODRUFF: The Bush camp tried to use Kerry's speech to underscore its broader charge that the senator is a flip-flopper. Let's go to our White House correspondent, Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, Bush aides say, sure, Senator Kerry's speech today was perhaps more pointed, more cogent than any other he's given in the past on the president's Iraq policy and strategy. However, tactically, Bush aides hope at least that it's too late for Senator Kerry, that they have spent months painting him, they think successfully, as someone who flip-flops, as you said, somebody who's indecisive, particularly on the war in Iraq.

So it's no surprise that that was the formula they went to today to respond to Senator Kerry. President Bush zeroed in on his opponent's argument that America is less secure than it -- since Iraq than it was before, read a quote from 1993 when Senator Kerry said those who believe we are not safer with his capture don't have the judgment to be president or the credibility to be elected president.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today he said, and I quote, "we have traded a dictator for a chaos that has left America less secure." He's saying he prefers the stability of a dictatorship to the hope and security of democracy. I couldn't disagree more. And not so long ago so did my opponent.

(END VIDEO CLIP)

BASH: Now, Bush aides were prepared for this kind of criticism today and in the days ahead from Senator Kerry, but they did get some criticism from within their own ranks. Over the weekend some senior Republican senators really went after the president. One, like Senator Lugar, the chairman of the foreign relations committee, said that the president's policy is incompetent, or at least part of it. Senator John McCain, who's been campaigning with the president, suggested that perhaps he needs to do more to level with the American people about what's going on on the ground.

Now, Bush officials say that they hope to answer all of this in part with the president's speech tomorrow at the U.N. General Assembly. They're also hoping that they will have a potent symbol in the interim Iraqi prime minister, who will be with the president in New York, here in Washington. They hope that at least Americans will see him and see a symbol of democracy.

And lastly, Judy, they are certainly hoping that strategically talking about Iraq from Senator Kerry's point of view is an asset for the president because that means he's not talking about things like health care and the economy where Senator Kerry, they know, does have an advantage -- Judy.

WOODRUFF: All right, Dana. One other thing we're watching is the debate over the debates. There is word today that there's been agreement between the two camps on three debates. What are you hearing?

BASH: They're very, very close. Sources I've talked to on both sides who are involved in the negotiations say that they really are -- just have to sort of finalize this. And as you mentioned, it is tentatively three debates as proposed by the bipartisan commission, between President Bush and Senator Kerry. Now, they are down to such nitty-gritty, I can tell you, Judy, that one senior Kerry adviser said that they are now talking about what the light will look like and how it will work that will tell the candidates their time is up. That's how specific they are right now.

But one thing I've learned in reporting this is that tentative is not a word in legalese and you have two very prominent lawyers leading the charge on the negotiations. You have James Baker on the Republican side, Vernon Jordan on the Democratic side. And all sides say nothing is a done deal until they actually sign the agreement. But they are pointing to perhaps the first debate of three debates next week -- Judy.

WOODRUFF: Lawyers and not to mention very experienced political hands.

BASH: That's true.

WOODRUFF: Dana, thank you very much.

Well, now let's talk more about Iraq politics and the presidential election. I'm joined by CNN political analyst Ron Brownstein of the "Los Angeles Times." Ron, you have the beheading today of another American hostage, two more -- another American, a British waiting for perhaps the same fate. The situation over there only seems to get worse. And yet support for the president holding up. How do you explain it?

RON BROWNSTEIN, "LOS ANGELES TIMES": Not only holding up but has grown. I think the key -- there have been two key factors in the improvement the president has seen in the polls over the last few months on Iraq. One is that since the handover of power in June to the interim Iraqi government the U.S. media has paid somewhat less attention until recently to the violence there. But just as importantly, the president has had success in making the argument, especially at his convention in New York, that the war in Iraq is the first step toward the long-run solution to the threat of terror. He has argued that the key to reducing the threat of terror is to spread democracy through the Middle East. This is the beachhead toward doing that. What happened today, I think, Judy, that's important is that John Kerry more directly than he has before frontally challenged that argument.

WOODRUFF: And what's so different about that? I mean, and frankly, the Bush camp keeps coming back and saying, well, it's John Kerry's 10th or 12th different position on Iraq.

BROWNSTEIN: John Kerry has certainly moved rhetorically and emphasized -- and raised and lowered the volume on different portions of his argument. But what he did today in his speech was different than what he has done earlier. What we heard from John Kerry last week was sort of an amplifying of the argument that the president's course is not working in Iraq. Today he more fundamentally challenged the course itself. He echoed arguments from people like Wesley Clark, Richard Clarke, Bob Graham, that goes directly at the heart of the president's argument.

Senator Kerry today argued that the war in Iraq, far from advancing our interests in the war on terror, has diverted our attention from the real sources of terror and may have in fact set back the cause of reducing Islamic extremism. That is -- the degree to which he explicitly embraced that argument today I think is new and does put him much more on a collision course with the justification that the president has laid out. You know, shifting his own argument over time from weapons of mass destruction toward democracy.

WOODRUFF: But given the fact that the conventions are behind us, clearly we have the debates to come, one of those debates is going to be devoted primarily if not exclusively to international foreign policy. Can John Kerry cut through, can he get through to the public's consciousness on all this?

BROWNSTEIN: I guess we'll know in November. Clearly, President Bush has taken the upper hand in this race. And I think it is largely because of the shift in opinion on Iraq as much as anything else. It's sort of the tipping point on how people feel about him. His ratings on terrorism are rock solid. As Dana mentioned, on health care and the economy, probably in the end John Kerry has an advantage. But how goes Iraq, to some extent that is how goes -- how goes President Bush. When people are feeling better about Iraq, as they have been in the last few weeks, he is stronger. The question really out there for him is can that improvement sustain the bad news on the ground and now the sharper critique from Senator Kerry? WOODRUFF: If this is such a smart argument for him to make, why didn't he do it before now?

BROWNSTEIN: Excellent question. You know, to some extent during the Democratic primaries, he was positioned somewhat on the more hawkish side of the argument. I think that what the Kerry campaign recognizes is that if people believe that President Bush's strategy in the war on terror overall is making us safer, it is going to be very hard to beat him. And as long as they view Iraq as contributing to that long-term security of the U.S., it becomes a positive for the president.

In the end, I think they have finally come to recognize that they have to challenge that directly and convince the American public that this is not taking us in the wrong direction on the issue that probably matters to people more than any other single one in this election: security and the war on terror. But it's a late start, and there's a lot of water under the bridge that complicates it for him.

WOODRUFF: It is puzzling to some as to why they didn't do it sooner. Ron Brownstein, always good to have you.

BROWNSTEIN: Thank you.

WOODRUFF: We thank you. Appreciate it.

A federal judge has struck down more than a dozen current rules on political fundraising. The ruling publicized today concludes that the Federal Election Commission improperly weakened campaign finance reform laws, marking a victory for lawmakers who sponsored the legislation. The law's main provisions banning most large donations remain intact.

But the FEC was ordered to write new rules on when candidates and outside parties may coordinate activities and how far the law goes in banning corporate or union so-called soft money donations. So-called 527 groups that have sponsored much of the negative advertising in this year's presidential race are not directly affected. And campaign finance experts say they doubt that this ruling will have a practical effect this year. The FEC, we are told, is expected to appeal.

Well, now checking the Monday headlines in our "Campaign News Daily" -- the two presidential running mates held dueling town halls today on the campaign trail. Dick Cheney began his day with a town hall in Cornwall, Pennsylvania. From there, he's headed to Grove City, Ohio, for a campaign rally later tonight.

Democrat John Edwards held a town hall meeting in his home state of North Carolina. From there, he also headed to Ohio, where he is scheduled to hold an event next hour in Cincinnati.

Checking in on the ballot access battle being waged by independent candidate Ralph Nader, Nader is now on the ballot in 30 states plus the District of Columbia. His spot on New Mexico's ballot is in question, however, and a legal hearing is scheduled for this afternoon. Counting New Mexico, Nader is on the ballot in a dozen battleground states, including Florida, Ohio, and Maine.

Louisiana voters have approved a Constitutional amendment that would ban same-sex marriages, and similar votes lie ahead in several showdown states and possibly Ohio. The Louisiana amendment passed easily Saturday with about 78 percent of the vote. Gay marriage bans are on the ballot in 10 other states this fall, including Michigan. Petitions are still being verified for a similar ballot measure in Ohio.

Well, with both the Bush and Kerry camps planning ahead for the debates, we're going to look back at some memorable face-offs between men who would have been president.

Also ahead, a unique constituency: Americans living in Israel. What are they thinking as Election Day in the U.S. nears?

And later, how far would an also-ran go to pay down his campaign debt?

(COMMERCIAL BREAK)

WOODRUFF: CNN White House correspondent Dana Bash telling us that a senior Bush campaign official is telling her that there is now a signed agreement between the Bush and Kerry campaigns for three debates. We're waiting to get the details. We are told they're going to be available around 6:00 p.m. on this Monday.

Again, our Dana Bash reporting that a Bush campaign official telling her that there is now -- there is now a signed agreement on the dotted line for three debates. And we, of course, were interested to know about all the details.

Well, if past debates are any guide, you can expect the unexpected. Our national correspondent Bruce Morton looks back at some of the more memorable verbal slugfests.

(BEGIN VIDEOTAPE)

HOWARD K. SMITH: ... by the two major candidates for the presidency.

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): Televised presidential debates, they started in 1960. Vice President Richard Nixon versus Senator John Kennedy. TV was black and white then. The viewers thought Kennedy won, but it was mostly style. Nixon looked tired, his makeup wasn't good, things like that. The much smaller number who listened on the radio thought it was a draw.

Anyway, that was it for a while. Kennedy might have debated in 1964, but he was murdered. Barry Goldwater challenged Lyndon Johnson to debate, but LBJ wouldn't. Nixon avoided debates in 1968, citing George Wallace's third-party candidacy and in 1972. But by 1976, Congress had changed the law to make carrying debates easier, and challenger Jimmy Carter debated President Gerald Ford, who seemed not to know that the Soviet Union had troops in its satellite countries in eastern Europe. GERALD FORD (R), FMR. PRESIDENT OF THE UNITED STATES: There is no Soviet domination of Eastern Europe, and there never will be under a Ford administration.

MORTON: But there was, of course. Viewers knew it and saw a president who seemed out of touch.

In 1980, Carter debated Ronald Reagan and probably wished he hadn't.

RONALD REAGAN (R), FMR. PRESIDENT OF THE UNITED STATES: Are you better off than you were four years ago?

MORTON: The debate wasn't decisive, but the economy really was bad, and Reagan's question reminded many that their answer to that question would be no. Four years later, Reagan seemed old and out of touch in his first debate with Walter Mondale. He fixed that in the rematch.

REAGAN: I will not make age an issue of this campaign. I am not going to exploit, for political purposes, my opponent's youth and inexperience.

MORTON: Sometimes it's little things. George Bush the First got criticized for looking at his watch during a town meeting format debate in 1992. Was he bored with the voters? Bill Clinton wasn't.

Four years ago, expectations for George W. Bush were low, and he exceeded them. Al Gore puzzled many by sighing while Bush spoke. No one knows what the 2004 debates will be like, but debates can be decisive and, unlike political conventions where you know the script, exciting.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Well, meantime, another development: A Senate Republican known for his moderate views says that he may not vote for President Bush in November. Rhode Island's Lincoln Chafee, who has opposed Bush on many issues, said today that he may write in a candidate instead of voting for his party's nominee. Chafee said that since John Kerry is widely believed to have a huge lead in Rhode Island, his vote won't make a big difference.

Americans abroad in the U.S. election. Coming up, thousands of American voters in Israel and their potential effect on the Bush-Kerry race for the White House.

(COMMERCIAL BREAK)

WOODRUFF: It may come as a surprise, but the Bush and Kerry campaigns aren't just fighting for votes in the United States, they're also aggressively going after Americans living abroad. CNN's John Vause has been talking to some of those voters living in the Middle East. (BEGIN VIDEOTAPE)

DAVID ABRAMS, ISRAELI-AMERICAN: I made a mistake. And I'm with Bush now all the way.

JOHN VAUSE, CNN CORRESPONDENT (voice-over): David Abrams says his mistake was voting Democrat in the last presidential election. Like many Israeli-Americans, back then he worried that George W. Bush would be like his father, considered by many in this country as pro- Arab.

NADIM KHOURY, PALESTINIAN-AMERICAN: Well, I voted last election for George Bush.

VAUSE: Nadim Khoury is a Palestinian-American. Like many Palestinians he voted for George W. Bush because he too thought the son would be like the father.

KHOURY: We thought that the son will help take some advice from his father, but it didn't work that way, unfortunately.

VAUSE: Nadim Khoury and brother David moved to the West Bank 10 years ago from Boston. With their life savings they started a brewery. The last four years have been bad for business. Road closures, curfews, and checkpoints have left them struggling to survive. And through it all they believe the U.S. has blindly supported Israel. And come November both say they probably won't vote.

DAVID KHOURY, PALESTINIAN-AMERICAN: With John Kerry ideology, what I hear, what I read in the newspapers, I think he will be biased towards the Israelis.

VAUSE: The Abrams family moved from New York. They also live in the West Bank, in a Jewish settlement called Efrat (ph), and like the Khoury family, maintain their U.S. citizenship. They say there's no difference between 9/11 and attacks on Israelis by Palestinian militants. And they see George W. Bush as a strong, decisive leader.

ARLENE ABRAMS, ISRAELI-AMERICAN: He's the only one that actually stood up there and said, either you're with us or you're against us. And he means that. He didn't do the flip-flop. He says what it is.

UNIDENTIFIED MALE: Those of you who want to hear about John Kerry...

VAUSE: In recent weeks both parties have been campaigning here.

KORY BARDASH, REPUBLICANS ABROAD: We've particularly targeted Americans from important swing states of Florida, Pennsylvania, Ohio, Michigan.

VAUSE: Last election Israeli-Americans overwhelmingly went Democrat. But the Republicans are expecting a much better result this time, the reward for what many here consider the most pro-Israeli White House in a generation. (on camera): Last election 14,000 Americans here cast an absentee ballot. Turnout this time is expected to be much higher. And consider this: according to Republicans Abroad, 6,000 former Floridians here are eligible to vote, a state which George W. Bush carried by just 537 votes.

John Vause, CNN, Jerusalem.

(END VIDEOTAPE)

WOODRUFF: It will be interesting to hear what's going on in other countries where Americans live. INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

WOODRUFF: That's it for INSIDE POLITICS this Monday. Thank you for joining us. I'm Judy Woodruff, "CROSSFIRE" starts right now.

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