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Inside Politics

Homeland Security Front and Center on Capitol Hill; Second-Term Signals

Aired December 07, 2004 - 15:30   ET

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

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


(BEGIN VIDEOTAPE)
SEN. SUSAN COLLINS (R), MAINE: Now we are on the brink of enacting the most significant reforms of our intelligence community in more than 50 years.

ANNOUNCER: The stalemate broken. Congress moves forward on intelligence reform. But some still seem bitter.

REP. JAMES SENSENBRENNER (R), WISCONSIN: I think the compromise is incomplete.

ANNOUNCER: The second time around. Is the Bush White House getting a fresh start or suffering from lame duck syndrome?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want you to know one of America's greatest blessings is the men and women who wear our nation's uniform.

ANNOUNCER: The commander in chief thanks the troops admit warnings the situation in Iraq is getting bleaker by the day.

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

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us.

At this hour, homeland security is front and center on Capitol Hill. The House is moving toward a vote on a compromised intelligence reform bill with the blessing of some is pivotal Republicans who had been holding out on the legislation and some pushing by the president.

Let's check in now with our congressional correspondent, Ed Henry.

Hi, Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon Judy.

In fact, over the last hour, speculation has been flying around the Capitol that maybe this historic deal had hit some sort of a snag, that maybe some senior lawmakers, senior Republicans were blocking the actual conference report from reaching the House floor this afternoon out of a protest for the fact that Congressman James Sensenbrenner's immigration provisions had been taken out of this bill, kept out of this historic deal. But we're being told now that they have been working this out, they're just trying to get the final kinks. They're still expecting a vote tonight. Instead of it being this afternoon, we're now expecting debates somewhere around 6:00 p.m. Eastern Standard Time, and then a vote sometime after 7:00 p.m. But again, that's been fluid throughout the day.

And we are also talking to Senate negotiators who are insisting that this is signed and sealed, the conference report, that is. They're just waiting for it literally to be delivered.

So it's been a flurry of activity once again today on a truly monumental day on the Hill. Lawmakers like Senator Bob Graham have been pointing out that this, of course, is December 7, the anniversary of Pearl Harbor. And they are saying this is a very historic moment.

And right now, they are basically saying that creating a director of national intelligence was a critical function, something that the 9/11 Commission recommended back in July with their bipartisan report. And that adding a quarterback, if you will, to oversee the 15 spy agencies is something that has long been needed within the government.

What Senator Bob Graham was saying was that he believes that on the anniversary of Pearl Harbor, now by creating this director of national intelligence, the government may now have that quarterback to prevent another terror attack, keep the American people safe, and prevent a Pearl Harbor or another 9/11. But there is a lot of anger, despite the fact that there is some celebration. And people within the Republican Party saying maybe in is a big political victory for President Bush.

There are others within the Republican conference, specifically in the House, who are very concerned about Sensenbrenner's immigration provisions being kept out. In fact, there was a House Republican conference meeting early this morning. It lasted for a couple of hours. We're told that when Mr. Sensenbrenner got up to speak on behalf of his immigration provisions, there was sustained applause from very angry conservatives who are upset that Mr. Sensenbrenner was pushed aside.

Now, Mr. Sensenbrenner has said today, though, that while he believes this is incomplete reform, he does think that it's going to move forward. He thinks it's going to reach the House floor tonight, and he thinks it will actually pass.

And what Mr. Sensenbrenner got in return from the president and from Republican leaders up here is a commitment that early next year they will deal with some of these immigration reform measures. And, in fact, House intelligence chairman Peter Hoekstra is saying that, while this deal may not be perfect, it's the best that they can get right now.

(BEGIN VIDEO CLIP)

REP. PETER HOEKSTRA (R), INTELLIGENCE COMMITTEE: If we waited in every -- on every bill in Washington to have the complete package done, we would never get anything done. This is -- this is a good, solid step in the right direction, addressing many of the issues that will make America safer. But I -- you know, I think we're all agreed, it is not the complete and total package.

(END VIDEO CLIP)

HENRY: So, again, the leadership insisting they will come back and try and complete that job early next year. House vote expected tonight, Senate vote as early as tomorrow -- Judy.

WOODRUFF: So Ed, Sensenbrenner and others didn't get all the language they wanted in there to tighten up immigration. But what are the immigration provisions in the bill?

HENRY: Well, there actually is a lot. And there are supporters of this legislation, of this conference report, that say that while Mr. Sensenbrenner did not get all that he wanted -- for example, there is a provision that will increase the number of border patrol agents by 2,000 a year over the next five years. Also, increasing immigration enforcement agents by 800 a year over the next five years, and also increasing by 8,000 a year the number of detention beds across the country with people coming through borders that need to be detained.

So what supporters of the legislation are saying is it's not perfect. But they have included immigration reform to a degree. And that they also feel that creating a director of national intelligence and some of the other measures are critically important -- Judy.

WOODRUFF: OK. Ed Henry watching that vote coming up in a few hours on the Hill. Ed, thank you very much.

Well, in saying he wanted to launch his second term with intelligence reform enacted into law, President Bush was evidently trying to send a message to Congress and to the American people that he is focused on accomplishing something. But our senior political analyst, Bill Schneider, wonders if the administration, now in the midst of an overhaul, is sending mixed signals.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Heads are spinning in Washington. That's because of the transition from first-term Bush to second-term Bush is creating two radically different impressions.

First, the cabinet changes. More than half the first term cabinet replaced.

BUSH: I am proud to announce my nomination of Carlo Gutierrez.

Mike Johanns.

Bernard Kerik.

SCHNEIDER: What's unusual is not the number of changes. Richard Nixon and Bill Clinton had a lot of cabinet turn overwhen they got reelected. But it's happening so quickly with Bush, and in such sharp contrast with Bush's first term.

KATHRYN DUNN TEMPAS, BROOKINGS INSTITUTION: We have a study going on at Brookings where we look at the stability within the White House A team, the most senior level of advisers, and he ranks highest in terms of White House stability and cabinet stability.

SCHNEIDER: The White House wants to create the impression of a fresh start, like a business executive shaking up the management team.

BUSH: We're a large company -- country.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: It's also good to have some fresh new faces in place from time to time.

SCHNEIDER: The battle over intelligence reform created a different impression.

VIC FAZIO (D), FMR. U.S. REPRESENTATIVE: He's beginning to look like in his second term that he's already a lame duck.

SCHNEIDER: Members of his own party were defying the president with impunity, Democrats pointed out.

UNIDENTIFIED FEMALE: We will see this week who is running the country, the powerful chairman or the president of the United States.

SCHNEIDER: They were quick to speculate about what this could mean for the future.

REP. JANE HARMAN (D), INTELLIGENCE COMMITTEE: That if he gets rolled here on this bill, imagine what it will be like when he tries to come forward with other controversial proposals.

SCHNEIDER: What do Republicans think?

SEN. PAT ROBERTS (R), INTELLIGENCE COMMITTEE CHAIRMAN: I think other agendas that the president has in regards to Social -- to strengthening and preserving our Social Security or tax reform or anything else, I think they'll be considered on their -- on their individual merit.

SCHNEIDER: Sounds like a pretty guarded endorsement.

(on camera): Fresh start or lame duck? Two competing impressions, and the race between them looks too close to call.

Bill Schneider, CNN Washington.

(END VIDEOTAPE)

WOODRUFF: Now we turn to security in Iraq. President Bush today visited Camp Pendelton, California, home base to Marines who have been in the thick of the fighting in Iraq. Mr. Bush thanked them for their service and their sacrifice while emphasizing the importance of pushing ahead with January 30 elections in Iraq.

(BEGIN VIDEO CLIP)

BUSH: The success of democracy in Iraq will also inspire others across the Middle East to defend their own freedom and to expose the teroristists for what they are, violent extremists on the fringe of society with no agenda for the future, except tyranny and death. So the terrorists will do all they can to delay and disrupt free elections in Iraq. And they will fail.

(END VIDEO CLIP)

WOODRUFF: However, a CIA station chief in Baghdad is painting a bleaker picture. In a classified memo disclosed today, the official warns the situation in Iraq is deteriorating and likely will continue to do so for sometime.

Let's talk more about the situation in Iraq with Senate Foreign Relations Committee chairman, Richard Lugar.

Chairman Lugar, good to see you. Thank you very much for being with us.

SEN. RICHARD LUGAR (R-IN), FOREIGN RELATIONS CHAIRMAN: Thank you, Judy.

WOODRUFF: You know, the American people are getting in a way two different pictures of what's going on in Iraq. The president painting an optimistic picture, saying there is progress being made, the elections are going to lessen the violence.

On the other hand, you have the CIA report disclosed today. You have others who have come out of Iraq saying the situation is deteriorating and not looking good. Which is the correct picture?

LUGAR: Well, certainly there is difference of opinion. Ambassador Negroponte, as you may recall, filed a dissenting report to the CIA chief's ideas, indicating that there are portions of Iraq in which the security situation is improving.

I saw President al-Yawar of Iraq during his visit of yesterday. His general impression is that security is improving. And we've talked about the election as a certainty on January the 30th.

The president, Mr. al-Yawar, himself, and his wife will be candidates. And they see the necessity of having legitimacy of votes behind them. And I think we're going to see an election. But, as earlier, Prime Allawi pointed out when he visited the United States, there could be strife and battles even on election day. That is the situation in Iraq.

WOODRUFF: Well, in other words, it's both? Is that what you're saying?

LUGAR: Yes.

WOODRUFF: Because the CIA memo which I know you are aware of talks about more violence coming up, more sectarian fighting, that despite everything the United States has done, and others, that the -- that the insurgents remain strong.

LUGAR: Well, President al-Yawar of Iraq stated it well. He said there are people in Iraq who are not prepared to contest power by elections.

They are from the Saddam era. They are prepared to continue to fight, to try to disrupt, to kill Iraqi authorities, whether they are civil or military, to try to kill our soldiers and our allies, to try to get us to leave. And at that point, they take over again.

This is a power situation. And it is grim. But on the other hand, the general summation, I believe, on the part of the American military, as well as the Iraqis, is that we are winning. That, in fact, the opposition is being ground down, but not without casualties and turmoil.

WOODRUFF: And the elections, you believe, are going to turn that around?

LUGAR: The elections will turn it around because they will indicate that there are going to be Iraqis elected who have authority that comes from the people. And the people will like that idea, and they will like the idea of a constitution which, at least enshrines their benefits and their rights, and provides the pathway for another election of officers guaranteed by that constitution. And Prime Minister Allawi says by that time he predicts 200,000 Iraqis will have had substantial training, will have substantial arms, will be able to patrol their cities and their country, and be prepared to negotiate with us for our departure.

WOODRUFF: And so when we read in the newspaper, as we did this morning, that American generals are saying their next goal is to -- is really to train Iraqis, I mean, the signal coming out is that the United States is looking already to pulling out of Iraq?

LUGAR: Well, clearly, we do not intend to be there forever. And specifically, the thing which you have talked about is consistent with the necessity of having 200,000 Iraqis. Until that number are available and are well-trained and well-disposed, many people are going to be at risk. Fewer as time goes on, but still many.

WOODRUFF: One last question about Ukraine. You were there for the elections in November.

LUGAR: Yes. WOODRUFF: They are about to have another round of elections in late December. How confident are you that this round is going to be fair and free?

LUGAR: Well, I'm not overconfident yet. And, in fact, the agreement was not finalized yet.

That is, the Rada legislative group has not signaled their final election rules, nor precisely the powers of the president, nor has President Kuchma signed either of those two documents. So until that happens, probably an election on the 26th of December, but not really clear whether the rule of the game will have changed. WOODRUFF: So you're -- you're not optimistic, yet?

LUGAR: I have to be optimistic because of the bravery and the courage of Ukrainians who, even as we speak, have been out there in the cold. And they have restored the power of the middle class, they've restored freedom of the press.

The television stations are covering both sides now and all sides. And that was not the case before I got there.

And I would just say, finally, that there is a worldwide interest in this, and properly so, with the Europeans and the United States working together. And this will help the security of Europe. Likewise, incidentally, of Russia, as well as the United States, to have a free and fair honest Ukraine.

WOODRUFF: Senator Richard Lugar, chairman of the Senate Foreign Relations Committee. Thanks very much.

LUGAR: Thank you, Judy.

WOODRUFF: Good to see you.

DNC officials are getting ready to powwow. Coming up, will they renew their commitment to the Iowa first primary season calendar?

Plus, the latest on the race for party chairman.

Also ahead, an update on the Ohio vote one month later, and the quest for a recount.

And later, she may be political royalty in New York, but what do Floridians think of Hillary as a would-be presidential candidate?

(COMMERCIAL BREAK)

WOODRUFF: Occasionally in public, but largely behind the scenes, the race continues for chairman of the Democratic National Committee. With me now to talk about the DNC race and the politics going on inside the party is Chuck Todd. He's the editor in chief of "The Hotline," an insider's political briefing produced daily by "The National Journal."

All right, Chuck. What is the latest in the race for DNC chair?

CHUCK TODD, EDITOR-IN-CHIEF, "THE HOTLINE": Well, it's a big week in this campaign, and it will be the first time many of the candidates are going to be getting together later this week at the state Democratic chair meeting that's going on in Orlando. But before that, we're going to get a hint at sort of what kind of campaign this could be and how public it is, because Howard Dean tomorrow is going to be giving sort of a state of the party speech that at least he's billing it.

He's been sending out e-mails to supporters. They are going to Web cast it. And so the reception that that speech gets I think is going to have some sort of trickle-down effect at what kind of reception these other candidates get down in Orlando.

And then, of course, we are also waiting on Harold Ickes, who said on your show last week he came closer than he ever had before, saying he was going to get in the race, whether he's going to be a candidate. And it's not clear if he's going to go down to Orlando, even, but he can still be a candidate.

So things are still murky. Jim Blanchard, the former governor of Michigan, is now telling people he's in the race, he is going to Orlando. So we keep getting more people in this race, and it becomes less...

WOODRUFF: But it hasn't really narrowed down in a sense.

TODD: It hasn't narrowed. But at the same time, you talk to anybody and they say, well, there's Howard Dean, and there's Harold Ickes, and then there's everybody else. And I think until we get more settlement exactly of what Dean and Ickes are going to do, then we will have a better idea of how everybody else plays, whether it's Martin Frost or Jim Blanchard.

WOODRUFF: All right. This -- this meeting in Orlando on Friday, they are announcing a new commission. What is that all about?

TODD: Well, what this is, the DNC, to placate Michigan, the state of Michigan, and Debbie Dingell and Senator Carl Levin, back four years ago, when they declared that Iowa and New Hampshire were still going to get the first in the nation status, they promised that after this election cycle they would appoint a commission to study the primary calendar for the 2008 season.

Well, this commission is going to be announced later this week in Orlando. Carl Levin is already one of the members that's going to be on this commission. It's about a 40-member commission.

Terry McAuliffe, the outgoing chairman of the party, is going to appoint all the members. Iowa and New Hampshire will all have says in this. But it's going to be a fairly diverse commission. Governors are going to be on it, I'm told, senators. Just nobody that is running for president in 2008.

WOODRUFF: What about Iowa and New Hampshire? Where does all -- where do they stand? I mean, how strong a shape are they in?

TODD: Well, they have -- they're going to have four seats on this commission, which means they'll have at least four supporters for keeping Iowa and New Hampshire first. From what I understand, I've talked to people that are going to be kind of involved in the "save Iowa-New Hampshire program."

And they are going to -- try to protect Iowa and New Hampshire, they're going to call for a plan of some sort that isolates -- that lengthens the calendar, that allows maybe a third -- maybe there's a third in the nation day, a fourth in the nation day, where you don't have five states on one day, but you have one state following each week so that maybe there are other -- three or four other states that get their own moment in the sun, rather than clumping up like we saw, if you recall, on February 3, where eight states went on one day and all of a sudden the nomination was over.

WOODRUFF: But does that make Michigan happy?

TODD: We'll see. Maybe if Michigan's the third in the nation.

WOODRUFF: Or the other states that are raising questions.

TODD: It's going to be difficult. But one thing Iowa and New Hampshire have going for them, the Republican calendar is already set. And people like you and I don't want to have to travel to multiple states. It would be kind of convenient if we could have Iowa for both the Republicans and Democrats, New Hampshire for both the Republicans and Democrats.

WOODRUFF: But we do like to travel. We do like to see the country.

TODD: Hawaii and Puerto Rico. That's what I'd like to see. That should be the first in the nation.

WOODRUFF: I even like North Dakota. You know, New Mexico, Montana, Louisiana. They're all good.

TODD: More red state America.

WOODRUFF: OK. Thank you, Chuck Todd. We appreciate it.

TODD: You bet.

WOODRUFF: "The Hotline," an insider's political briefing, is produced every day by "The National Journal." And you can go online to NationalJournal.com for subscription information.

The presidential campaign ended more than a month ago, but some say not every vote has been counted. Up next, George W. Bush was just certified the winner in Ohio, but a statewide recount is about to get under way.

(COMMERCIAL BREAK)

WOODRUFF: The Libertarian and Green Party presidential candidates today began the process of requesting a county-by-county election recount in Ohio. The recount is expected to begin just days after Secretary of State Ken Blackwell certified President Bush as the winner of Ohio's 20 electoral votes. The Kerry campaign has said it supports the recount, although the Kerry team said it does not expect the recount to overturn the Bush victory.

It took a lot of lobbying, but the president finally got his way on the intelligence reform bill. But will Mr. Bush face even tougher fights ahead as he pushes his domestic agenda?

Plus is a new honor in store for Bill Clinton? We'll tell you what the former president is nominated for when we return. (COMMERCIAL BREAK)

WOODRUFF: It's just before 4:00 p.m. in the East. And as the markets get set to close on Wall Street, I'm joined by Lou Dobbs in New York with "The Dobbs Report."

Hello, Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Good afternoon, Judy.

The price of crude oil today down another $1.50, dropping back below $42 a barrel. Prices have fallen 17 percent over the past week. But that didn't do enough to help the market today.

The market broadly lowered. While the final trades are now being counted, the Dow Jones industrials down more than 100 points, down just about 104 points. The Nasdaq is down one and a third percent.

Signs of trouble in the consumer product sector today. Colgate- Palmolive announcing it will lay off 12 percent of its workforce, 4,400 people will lose their jobs. Colgate will also close a third of its factories over the next four years as it struggles to compete.

Finally, disturbing new questions about the nation's ability to prepare our youth for real world competition which is only intensifying. A major international study finds the math skills of our 15-year-olds are near the bottom of all industrialized nations. Compared to their counterparts in Europe and Asia, our ninth and tenth grade students ranked 24th out of 29 countries. The study warns that poor mathematic skills could lead to weaker economic growth in this country and a loss of dominance in technology.

Coming up on CNN tonight at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT" our special report, "Culture in Decline." Tonight we take a look at the unsportsman-like conduct in sports demonstrated by far too many professional athletes. It's a visible example of our culture in decline and setting a bad example for our children.

(BEGIN VIDEO CLIP)

T.J. SIMERS, "L.A. SPORTS" COLUMNIST: Today's athlete is Superman, he's invisible. He has so much money coming his way, endorsements and everything else and so many second chances that they can hang in there and basically say or do anything and feel like there's never going to be a repercussion.

(END VIDEO CLIP)

DOBBS: And speaking of repercussions tonight, Major League Baseball working to create tougher restrictions on steroid use. Pulitzer Prize winner and "New York Times" sports columnist Dave Anderson will be my guest this evening.

Also the House of Representatives expected to pass the intelligence reform legislation today. That bill does not prevent illegal aliens from obtaining driver's licenses or improve security at the borders and ports. Congressman James Sensenbrenner says he's not satisfied and he's our guest as well tonight.

New support for the import of medical drugs into this country. The American Medical Association today voted in favor of it. We'll take a look at what that will mean for drug companies and for consumers. Now back to Judy Woodruff in Washington -- Judy.

WOODRUFF: Lou, you mentioned sports. This whole controversy about the use of steroids, do you think it's something that's taking hold with the American people, with sports fans? Do you think this is an issue people are going to continue to be interested in in.

DOBBS: I think they're going to be forced to do so because whether sports fans are forgiving of the use of illegal drugs and steroids among them, is really not the point. The point is that our institutions, our government institutions, our laws have to be enforced and it's time to break what has been an altogether too sympathetic relationship among big media, big professional sports, and corporate America. And that's at the heart of what is going on here. It's part of what we'll be getting to at 6:00 tonight here on CNN.

WOODRUFF: All right. We'll look forward to that. Thank you, Lou.

DOBBS: Thanks, Judy.

WOODRUFF: INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I call upon the Congress to pass the intelligence bill. It is a good piece of legislation. It is a necessary piece of legislation.

ANNOUNCER: It appears the president won this battle. Will he face tougher fights on Capitol Hill ahead?

The presidential election was just five weeks ago, but who do voters in a crucial state like in the next race for the White House? We'll take a look at an early poll. Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. The intelligence reform bill stalled just before Thanksgiving but now it appears to be on track to become law before Christmas. The House is moving toward a vote on a compromise bill. As our White House correspondent Dana Bash reports, President Bush is looking forward to an important if not so easily won victory.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): An emotional President Bush at Camp Pendleton to thank marines hard hit by the Iraq war. No mention of it here, but this is also a commander in chief upbeat at word he avoided a political embarrassment back in Washington. Intelligence agency reforms he backed are finally on the way to his desk.

SEN. SUSAN COLLINS (R), ARMED SERVICES CMTE.: The president's personal involvement clearly makes a difference. In this case, it determined the fate of this very important legislation.

BASH: Privately, many involved in the intelligence debate complained the president engaged too late. It's a problematic first- term pattern say some who hope he learned a lesson for tougher challenges awaiting him.

TIMOTHY ROEMER, 9/11 COMMISSION MEMBER: The president said in the days after the election that he was willing to use political capital on Social Security reform and tax reform. If he would have lost this, however, it really would erode some of that capital.

BASH: White House sources concede this early legislative victory was crucial for a president trying to use the post-election period to build support to help push his ambitious second term agenda in a divided America.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: I think this does help set the stage for the second term because it shows what we can get done when we work together in a bipartisan way.

BASH: But the president's fight with fellow Republicans, not Democrats, on intelligence reform exposes a harsh reality, a bigger GOP Congress does not mean a rubber-stamp.

REP. MIKE PENCE (R), INDIANA: This Congress, which saw its majority grow, received a mandate from the American people for fiscal discipline, limited government and traditional moral values. We will work toward that vision with the president, occasionally disagree with the president on how that vision is worked out.

(END VIDEOTAPE)

BASH: The intelligence bill, of course, has near unanimous support among Democrats. That's a luxury the president is not going to have with some of the top and ambitious things he's going to push in his second term. Things like reforming the tax code and Social Security. Those are area where Republicans are very divided when it comes to specifics.

WOODRUFF: So are those areas that we can expect to see some of the similar -- some similar scenarios play out as the second term gets under way?

BASH: I talked to a couple Republicans on Capitol Hill, and sort around Washington today who were looking at this and saying you ain't seen nothing yet. When it comes to things like the tax code there are very different views on how to do that reform, some want a flat tax, sales tax. They are going to be looking around Washington to the White House to the president to get specific perhaps in a way that he didn't when it came to legislation in the first term. At that time he really was focused on putting out principles and not specifics. A lot of people are looking at the president saying they're going to need specifics because there are big differences in how to do things he wants to do. The White House understands that. They say just wait until the State of the Union.

WOODRUFF: Dana Bash, at the White House.

With the expected passage of intelligence reform, America's intelligence community facing a whole new world. But have we seen this kind of political maneuvering before?

Also ahead, with so many members of Congress safe in their seats, is anyone feeling sorry?

(COMMERCIAL BREAK)

WOODRUFF: With me now to talk about the political battle over intelligence reform and other important matters, are two Washington political veterans. Jack Valenti, he is in Los Angeles today. He was an adviser to President Lyndon Johnson. Ed Rollins is in New York, he is a long time political strategist, former adviser to President Ronald Reagan.

Gentlemen, good to see both of you. Jack Valenti, let me start with you. For President Bush to get intelligence reforms, is this a victory for him or is it an embarrassment because it took him so long?

JACK VALENTI, FMR. AIDE TO PRES. JOHNSON: Well, it was a must- victory. He had to have this. And I think it is a foregone conclusion that once the president moved in and put his chips on the table, or as LBJ would say, shoved in his stack, he would get the bill.

Now the big thing is make it work. That's going to be the hard part because when you get about 12 or 16 disparate agencies coming together, all of whom protect their turf and with a vision of homeland security trying to get 26 agencies together and didn't do that good a job of it, it's not going to be an easy task ahead.

WOODRUFF: Ed Rollins, should it have taken so long and should it have been so hard to get this done?

ED ROLLINS, GOP STRATEGIST: Well, it's a complicated issue in the sense that it came -- the recommendations came from an commission as opposed to directly from the White House or directly from the Congress. I think Duncan Hunter, the House chairman, and John Warner, the Senate chairman of the Armed Services were looking out for their parochial interests, and I don't mean that in a derogatory way. The military is very important to us, particularly in a time of war. And I think they had to feel very confident that the direct line from the president to the secretary of defense and on to the troops was not hindered or not complicated by the language in this bill.

WOODRUFF: Jack Valenti, we know that the votes were there in the first place back around Thanksgiving to get this passed but the speaker, Dennis Hastert didn't want to get this done without a majority of the Republican majority. Is that a smart strategy for him going forward? VALENTI: In my own judgment -- I have great respect for the speaker, but I don't think that was because if this bill hadn't passed and you come into January or February or March and you have some kind of an attack, who are they going to blame rightly or wrongly? I think this was not a very good move. But the point is now that I think the speaker and the president have talked, without question. And this bill is going forward.

This bill, I think, is enthusiastically received by the majority of the American people, whether it came from a commission or whatever. Although Ed is right about that. But I think that this was a must for the president. He moved quickly when had had to, got the letter out to the congressional leaders I think yesterday. And that let them know that he carried and he wanted it and the discipline was intact.

WOODRUFF: Ed, Ed, what do you think? Is it a smart thing for the speaker to say going forward, we don't want major legislation to go through here unless we can get a majority of the Republicans?

ROLLINS: Well, I think Denny Hastert is a very unique guy and he brought these House Republicans back together after Newt Gingrich sort of was a more divisive figure. And I think the bottom line is it's very tough legislation ahead and he has got to make sure that his chairman and that his members basically carry the president's agenda forward. I think what we have all learned from this drill here is that this has to be a consensus. People have to sit down with the Republican leadership and the Democrats on obvious measures and move together collectively, not independently. But the president obviously, as Jack said, he had to show his muscle on this one and he did an effective job.

WOODRUFF: Ed Rollins, let me quickly ask you about something a former Republican Congressman said about one issue that is coming up, Social Security reform. He said -- Robert Walker said, quote: "Many Republicans know the party lacks credibility on the Social Security issue. For us to wade out there and take that on makes the party politically vulnerable." Do you agree?

ROLLINS: It has always been a vulnerability for us. And I think at the end of the way we've got to have something that's much better than what they have today. It has been 20 years since we've had a commission. We don't run out of funds until 2052 by the projections. But I think to change the formulas and to change the way it's done is going to be a complicated issue and we need to do it very carefully.

WOODRUFF: What's your perspective on that, Jack Valenti?

VALENTI: I think that Social Security is -- as has been said many times, is the third rail of politics. I think you have to move very, very quietly and very circumspectly here. This is a huge thing. There are millions and millions of people who rely on it and millions and millions of people who are going to rely on it. So I think this is one of the most sensitive issues you're going to take you up, although the one after this, tax policy, may be almost as equal. But it's a very tough issue. And I think that everybody has to go quietly. Very quietly and very sensitively here. ROLLINS: And equally as important, you need a bipartisan support. This just can't be a Republican-alone initiative, even though they have the votes. It has to be the Republicans and Democrats who basically buy into these pieces of legislation and move it forward collectively.

VALENTI: And this is the kind of thing, Judy, that on 30-second commercials in the next election can really cut you down.

WOODRUFF: Jack Valenti, I want to pick up on your Hollywood experience, former head of the Motion Picture Association and ask you about an item that came across our desk today. And that is a Christian organization, we are told, is urging people to write to actor Tom Hanks, urging him not to star in the movie version of "The Da Vinci Code," a very, we know, best-selling book, because they argue it defames Christianity. Is this taking more -- is this a correct use of the whole question, the issue of moral values, Jack?

VALENTI: Well, I can tell you this. Every producer in Hollywood hopes that somebody will want to ban his movie. It gets him all kind of publicity. It's thing that you love to have. So whenever you have somebody enraged about a certain movie, the producers and the people in that movie are absolutely delighted. I don't think this is going to go anywhere. It's old hat. This has happened time and time again. And in the end, it's the movie that benefits.

WOODRUFF: Ed?

ROLLINS: Well, I think there was a lot of controversy over "The Passion" and it was obviously the biggest blockbuster of the year. So I agree with Jack. I think it has to be done tastefully because obviously you don't want to offend Christianity and you don't want to offend Catholics. But at the same time, it's a great story. I'm a Catholic, I read the book. I enjoyed it. And I'm sure if they make a great movie out of it, I'll enjoy it also.

WOODRUFF: So Tom Hanks shouldn't have any pause if he gets a lot of letters?

VALENTI: Well, Tom Hanks is one of the most respected figures not only in Hollywood but in the country. And I think that will be a big plus to this movie. But when you have that many millions and millions of people reading Dan Brown's book, that tells you something, too.

WOODRUFF: Well, speaking of stars, something happened with you, Jack Valenti, yesterday in Hollywood. We understand you already had your star in the sidewalk up there, but now you've got your handprints. Tell us about that. We've got a little picture to show the audience.

VALENTI: Well, I must say it was about as great an honor as you can have when you imprison your hands and your feet and sign your name in that concrete and then it's there for generations of Americans yet unborn, as I want to say. And only about 220 people have had that before. So I was gloriously and delightfully honored last night. It was quite an affair. I was quite pleased with it.

ROLLINS: Judy, we Republicans have been trying to get his fingerprints on things for years and years and never been very effective at it. So I'm pleased that they're in cement.

(LAUGHTER)

ROLLINS: He's the master.

VALENTI: Ed Rollins is an old friend of many, many years.

ROLLINS: Absolutely.

WOODRUFF: I was going ask him what his secret is because nobody's asked me and, Ed, I don't guess they've asked you to put our handprints.

ROLLINS: Absolutely. Well, he has had a great record, he worked for a great man but he's had his own greatness. And obviously anybody that survives his own as long as he has and been as effective as he has...

WOODRUFF: For sure.

VALENTI: Thank you very much, Ed, thank you, Judy, for that.

WOODRUFF: We all join you in congratulations. Thank you, to both of you. It's great to see you both. Ed Valenti -- Ed Rollins and Jack Valenti.

VALENTI: Ed Valenti!

(LAUGHTER)

ROLLINS: That's a combination, Valenti and Rollins, what a firm.

WOODRUFF: What a combination, Jack Valenti and Ed Rollins. Gentlemen, thank you both. It's very good to see you. We appreciate it.

VALENTI: Thank you.

ROLLINS: Thank you.

WOODRUFF: Thank you.

New York's attorney general announces his future political plans and he already has a fund raiser scheduled.

Plus, Floridians have 2008 on their minds. We'll find out whom they think should make a run for the White House.

(COMMERCIAL BREAK)

WOODRUFF: Checking the Tuesday headlines in our campaign news daily. President Bush hasn't started his second term, but a new poll has already gauged Florida voter preferences about the 2008 White House race. When given several choices and asked whom they would like to see run for president, 48 percent of Florida voters said Rudy Giuliani should run while 45 percent said Hillary Clinton. 44 percent agreed John McCain should run again while 35 percent said they would like to see John Kerry give it another try.

Florida Governor Jeb Bush says that he won't run but 31 percent say he should. And 20 percent said they'd like to see Arnold Schwarzenegger run if he were eligible.

New York state Attorney General Eliot Spitzer has made it official. He is running for governor in 2006. Spitzer has made headlines with high profile investigations of wrongdoing on Wall Street. He has a $1,000-a- person fundraiser luncheon scheduled for later this week.

Out west, Washington state election officials are getting ready to begin the hand recount in that state's governor's race. The count begins tomorrow and is expected to be completed December 23. Workers in 39 counties have to count more than 2.8 million ballots. A machine recount found that Republican Dino Rossi defeated Democrat Christine Gregoire by just 42 votes.

Recent history has shown it's become more and more difficult for a challenger to unseat an incumbent in the House of Representatives but could that be about to change? Our Bruce Morton takes a look.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): House Republican for ten years, now Democratic for 40 before that, incumbents are so safe they can practically will their seats to their kids. Is this likely to change?

STUART ROTHENBERG, ROTHENBERG POLITICAL REPORT: Almost impossible. We have two or three incumbents being defeated every year. That's about it.

MORTON: Yes, but 2006 may be different. The president will be a lame duck and the issues may have changed to domestic things like Social Security or tax reform.

AMY WALTER, COOK POLITICAL REPORT: 2002, 2004, those were elections about President Bush. They were about security. It was about the war in Iraq, terrorism, not specific congressional legislative issues.

MORTON: Republican moderates like Chris Shays of Connecticut, a small group, may face tough choices. His district is changing.

WALTER: He has to decide in this next election how much he moves against the Republican leadership to protect his own district. And we'll see how many others like him there are who know that boy, to win here I've got to prove that I'm an independent. I can't just be a Republican vote.

MORTON: And some Republicans haven't faced a serious challenge in years. Still, challenges are expensive.

ROTHENBERG: I think the only way things will change is if we have a fundamental restructuring of congressional districts, if districts are drawn for compactness, for competitiveness. Given the current system, I think it's very unlikely we're going to have competitive House elections for a long time.

MORTON: Fundamental reform is unlikely. A handful of states, Iowa for one, do require district lines to be drawn on a nonpartisan basis but it doesn't seem to be a trend that's catching on. So what's a poor Democrat to do?

WALTERS: All they can hope for is that Republicans do end up pushing the envelope too far, whether it's legislatively or on some of these other ethics issues and give Democrats some of that opening.

ROTHENBERG: It's just going to be hard to defeat individual members on individual issues. It's going to take really a sea change nationally to change the House.

MORTON: The Democrats held it for 40 years. Now the Republicans have held it for 10. It doesn't change parties easily. Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: It sure doesn't.

Fresh from the opening of his presidential library, what does Bill Clinton do for an encore? We'll tell you about the honor that may lie ahead when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

WOODRUFF: Being leader of the free world surely has its rewards, but now Bill Clinton is up for an honor more in tune with his saxophone-playing Elvis-loving side, you could say. The former president has been nominated for a Grammy award for his recorded reading of his memoir, "My Life." Clinton won a Grammy last year for his speaking role on a children's album. And Hillary Clinton won a Grammy in 1997 for narrating her book, "It Takes A Village." At least one accomplishment she achieved first. There you go. That's it for INSIDE POLITICS this Tuesday. I'm Judy Woodruff. Thanks for joining us. "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 December 7, 2004 - 15:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
SEN. SUSAN COLLINS (R), MAINE: Now we are on the brink of enacting the most significant reforms of our intelligence community in more than 50 years.

ANNOUNCER: The stalemate broken. Congress moves forward on intelligence reform. But some still seem bitter.

REP. JAMES SENSENBRENNER (R), WISCONSIN: I think the compromise is incomplete.

ANNOUNCER: The second time around. Is the Bush White House getting a fresh start or suffering from lame duck syndrome?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want you to know one of America's greatest blessings is the men and women who wear our nation's uniform.

ANNOUNCER: The commander in chief thanks the troops admit warnings the situation in Iraq is getting bleaker by the day.

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

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us.

At this hour, homeland security is front and center on Capitol Hill. The House is moving toward a vote on a compromised intelligence reform bill with the blessing of some is pivotal Republicans who had been holding out on the legislation and some pushing by the president.

Let's check in now with our congressional correspondent, Ed Henry.

Hi, Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon Judy.

In fact, over the last hour, speculation has been flying around the Capitol that maybe this historic deal had hit some sort of a snag, that maybe some senior lawmakers, senior Republicans were blocking the actual conference report from reaching the House floor this afternoon out of a protest for the fact that Congressman James Sensenbrenner's immigration provisions had been taken out of this bill, kept out of this historic deal. But we're being told now that they have been working this out, they're just trying to get the final kinks. They're still expecting a vote tonight. Instead of it being this afternoon, we're now expecting debates somewhere around 6:00 p.m. Eastern Standard Time, and then a vote sometime after 7:00 p.m. But again, that's been fluid throughout the day.

And we are also talking to Senate negotiators who are insisting that this is signed and sealed, the conference report, that is. They're just waiting for it literally to be delivered.

So it's been a flurry of activity once again today on a truly monumental day on the Hill. Lawmakers like Senator Bob Graham have been pointing out that this, of course, is December 7, the anniversary of Pearl Harbor. And they are saying this is a very historic moment.

And right now, they are basically saying that creating a director of national intelligence was a critical function, something that the 9/11 Commission recommended back in July with their bipartisan report. And that adding a quarterback, if you will, to oversee the 15 spy agencies is something that has long been needed within the government.

What Senator Bob Graham was saying was that he believes that on the anniversary of Pearl Harbor, now by creating this director of national intelligence, the government may now have that quarterback to prevent another terror attack, keep the American people safe, and prevent a Pearl Harbor or another 9/11. But there is a lot of anger, despite the fact that there is some celebration. And people within the Republican Party saying maybe in is a big political victory for President Bush.

There are others within the Republican conference, specifically in the House, who are very concerned about Sensenbrenner's immigration provisions being kept out. In fact, there was a House Republican conference meeting early this morning. It lasted for a couple of hours. We're told that when Mr. Sensenbrenner got up to speak on behalf of his immigration provisions, there was sustained applause from very angry conservatives who are upset that Mr. Sensenbrenner was pushed aside.

Now, Mr. Sensenbrenner has said today, though, that while he believes this is incomplete reform, he does think that it's going to move forward. He thinks it's going to reach the House floor tonight, and he thinks it will actually pass.

And what Mr. Sensenbrenner got in return from the president and from Republican leaders up here is a commitment that early next year they will deal with some of these immigration reform measures. And, in fact, House intelligence chairman Peter Hoekstra is saying that, while this deal may not be perfect, it's the best that they can get right now.

(BEGIN VIDEO CLIP)

REP. PETER HOEKSTRA (R), INTELLIGENCE COMMITTEE: If we waited in every -- on every bill in Washington to have the complete package done, we would never get anything done. This is -- this is a good, solid step in the right direction, addressing many of the issues that will make America safer. But I -- you know, I think we're all agreed, it is not the complete and total package.

(END VIDEO CLIP)

HENRY: So, again, the leadership insisting they will come back and try and complete that job early next year. House vote expected tonight, Senate vote as early as tomorrow -- Judy.

WOODRUFF: So Ed, Sensenbrenner and others didn't get all the language they wanted in there to tighten up immigration. But what are the immigration provisions in the bill?

HENRY: Well, there actually is a lot. And there are supporters of this legislation, of this conference report, that say that while Mr. Sensenbrenner did not get all that he wanted -- for example, there is a provision that will increase the number of border patrol agents by 2,000 a year over the next five years. Also, increasing immigration enforcement agents by 800 a year over the next five years, and also increasing by 8,000 a year the number of detention beds across the country with people coming through borders that need to be detained.

So what supporters of the legislation are saying is it's not perfect. But they have included immigration reform to a degree. And that they also feel that creating a director of national intelligence and some of the other measures are critically important -- Judy.

WOODRUFF: OK. Ed Henry watching that vote coming up in a few hours on the Hill. Ed, thank you very much.

Well, in saying he wanted to launch his second term with intelligence reform enacted into law, President Bush was evidently trying to send a message to Congress and to the American people that he is focused on accomplishing something. But our senior political analyst, Bill Schneider, wonders if the administration, now in the midst of an overhaul, is sending mixed signals.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Heads are spinning in Washington. That's because of the transition from first-term Bush to second-term Bush is creating two radically different impressions.

First, the cabinet changes. More than half the first term cabinet replaced.

BUSH: I am proud to announce my nomination of Carlo Gutierrez.

Mike Johanns.

Bernard Kerik.

SCHNEIDER: What's unusual is not the number of changes. Richard Nixon and Bill Clinton had a lot of cabinet turn overwhen they got reelected. But it's happening so quickly with Bush, and in such sharp contrast with Bush's first term.

KATHRYN DUNN TEMPAS, BROOKINGS INSTITUTION: We have a study going on at Brookings where we look at the stability within the White House A team, the most senior level of advisers, and he ranks highest in terms of White House stability and cabinet stability.

SCHNEIDER: The White House wants to create the impression of a fresh start, like a business executive shaking up the management team.

BUSH: We're a large company -- country.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: It's also good to have some fresh new faces in place from time to time.

SCHNEIDER: The battle over intelligence reform created a different impression.

VIC FAZIO (D), FMR. U.S. REPRESENTATIVE: He's beginning to look like in his second term that he's already a lame duck.

SCHNEIDER: Members of his own party were defying the president with impunity, Democrats pointed out.

UNIDENTIFIED FEMALE: We will see this week who is running the country, the powerful chairman or the president of the United States.

SCHNEIDER: They were quick to speculate about what this could mean for the future.

REP. JANE HARMAN (D), INTELLIGENCE COMMITTEE: That if he gets rolled here on this bill, imagine what it will be like when he tries to come forward with other controversial proposals.

SCHNEIDER: What do Republicans think?

SEN. PAT ROBERTS (R), INTELLIGENCE COMMITTEE CHAIRMAN: I think other agendas that the president has in regards to Social -- to strengthening and preserving our Social Security or tax reform or anything else, I think they'll be considered on their -- on their individual merit.

SCHNEIDER: Sounds like a pretty guarded endorsement.

(on camera): Fresh start or lame duck? Two competing impressions, and the race between them looks too close to call.

Bill Schneider, CNN Washington.

(END VIDEOTAPE)

WOODRUFF: Now we turn to security in Iraq. President Bush today visited Camp Pendelton, California, home base to Marines who have been in the thick of the fighting in Iraq. Mr. Bush thanked them for their service and their sacrifice while emphasizing the importance of pushing ahead with January 30 elections in Iraq.

(BEGIN VIDEO CLIP)

BUSH: The success of democracy in Iraq will also inspire others across the Middle East to defend their own freedom and to expose the teroristists for what they are, violent extremists on the fringe of society with no agenda for the future, except tyranny and death. So the terrorists will do all they can to delay and disrupt free elections in Iraq. And they will fail.

(END VIDEO CLIP)

WOODRUFF: However, a CIA station chief in Baghdad is painting a bleaker picture. In a classified memo disclosed today, the official warns the situation in Iraq is deteriorating and likely will continue to do so for sometime.

Let's talk more about the situation in Iraq with Senate Foreign Relations Committee chairman, Richard Lugar.

Chairman Lugar, good to see you. Thank you very much for being with us.

SEN. RICHARD LUGAR (R-IN), FOREIGN RELATIONS CHAIRMAN: Thank you, Judy.

WOODRUFF: You know, the American people are getting in a way two different pictures of what's going on in Iraq. The president painting an optimistic picture, saying there is progress being made, the elections are going to lessen the violence.

On the other hand, you have the CIA report disclosed today. You have others who have come out of Iraq saying the situation is deteriorating and not looking good. Which is the correct picture?

LUGAR: Well, certainly there is difference of opinion. Ambassador Negroponte, as you may recall, filed a dissenting report to the CIA chief's ideas, indicating that there are portions of Iraq in which the security situation is improving.

I saw President al-Yawar of Iraq during his visit of yesterday. His general impression is that security is improving. And we've talked about the election as a certainty on January the 30th.

The president, Mr. al-Yawar, himself, and his wife will be candidates. And they see the necessity of having legitimacy of votes behind them. And I think we're going to see an election. But, as earlier, Prime Allawi pointed out when he visited the United States, there could be strife and battles even on election day. That is the situation in Iraq.

WOODRUFF: Well, in other words, it's both? Is that what you're saying?

LUGAR: Yes.

WOODRUFF: Because the CIA memo which I know you are aware of talks about more violence coming up, more sectarian fighting, that despite everything the United States has done, and others, that the -- that the insurgents remain strong.

LUGAR: Well, President al-Yawar of Iraq stated it well. He said there are people in Iraq who are not prepared to contest power by elections.

They are from the Saddam era. They are prepared to continue to fight, to try to disrupt, to kill Iraqi authorities, whether they are civil or military, to try to kill our soldiers and our allies, to try to get us to leave. And at that point, they take over again.

This is a power situation. And it is grim. But on the other hand, the general summation, I believe, on the part of the American military, as well as the Iraqis, is that we are winning. That, in fact, the opposition is being ground down, but not without casualties and turmoil.

WOODRUFF: And the elections, you believe, are going to turn that around?

LUGAR: The elections will turn it around because they will indicate that there are going to be Iraqis elected who have authority that comes from the people. And the people will like that idea, and they will like the idea of a constitution which, at least enshrines their benefits and their rights, and provides the pathway for another election of officers guaranteed by that constitution. And Prime Minister Allawi says by that time he predicts 200,000 Iraqis will have had substantial training, will have substantial arms, will be able to patrol their cities and their country, and be prepared to negotiate with us for our departure.

WOODRUFF: And so when we read in the newspaper, as we did this morning, that American generals are saying their next goal is to -- is really to train Iraqis, I mean, the signal coming out is that the United States is looking already to pulling out of Iraq?

LUGAR: Well, clearly, we do not intend to be there forever. And specifically, the thing which you have talked about is consistent with the necessity of having 200,000 Iraqis. Until that number are available and are well-trained and well-disposed, many people are going to be at risk. Fewer as time goes on, but still many.

WOODRUFF: One last question about Ukraine. You were there for the elections in November.

LUGAR: Yes. WOODRUFF: They are about to have another round of elections in late December. How confident are you that this round is going to be fair and free?

LUGAR: Well, I'm not overconfident yet. And, in fact, the agreement was not finalized yet.

That is, the Rada legislative group has not signaled their final election rules, nor precisely the powers of the president, nor has President Kuchma signed either of those two documents. So until that happens, probably an election on the 26th of December, but not really clear whether the rule of the game will have changed. WOODRUFF: So you're -- you're not optimistic, yet?

LUGAR: I have to be optimistic because of the bravery and the courage of Ukrainians who, even as we speak, have been out there in the cold. And they have restored the power of the middle class, they've restored freedom of the press.

The television stations are covering both sides now and all sides. And that was not the case before I got there.

And I would just say, finally, that there is a worldwide interest in this, and properly so, with the Europeans and the United States working together. And this will help the security of Europe. Likewise, incidentally, of Russia, as well as the United States, to have a free and fair honest Ukraine.

WOODRUFF: Senator Richard Lugar, chairman of the Senate Foreign Relations Committee. Thanks very much.

LUGAR: Thank you, Judy.

WOODRUFF: Good to see you.

DNC officials are getting ready to powwow. Coming up, will they renew their commitment to the Iowa first primary season calendar?

Plus, the latest on the race for party chairman.

Also ahead, an update on the Ohio vote one month later, and the quest for a recount.

And later, she may be political royalty in New York, but what do Floridians think of Hillary as a would-be presidential candidate?

(COMMERCIAL BREAK)

WOODRUFF: Occasionally in public, but largely behind the scenes, the race continues for chairman of the Democratic National Committee. With me now to talk about the DNC race and the politics going on inside the party is Chuck Todd. He's the editor in chief of "The Hotline," an insider's political briefing produced daily by "The National Journal."

All right, Chuck. What is the latest in the race for DNC chair?

CHUCK TODD, EDITOR-IN-CHIEF, "THE HOTLINE": Well, it's a big week in this campaign, and it will be the first time many of the candidates are going to be getting together later this week at the state Democratic chair meeting that's going on in Orlando. But before that, we're going to get a hint at sort of what kind of campaign this could be and how public it is, because Howard Dean tomorrow is going to be giving sort of a state of the party speech that at least he's billing it.

He's been sending out e-mails to supporters. They are going to Web cast it. And so the reception that that speech gets I think is going to have some sort of trickle-down effect at what kind of reception these other candidates get down in Orlando.

And then, of course, we are also waiting on Harold Ickes, who said on your show last week he came closer than he ever had before, saying he was going to get in the race, whether he's going to be a candidate. And it's not clear if he's going to go down to Orlando, even, but he can still be a candidate.

So things are still murky. Jim Blanchard, the former governor of Michigan, is now telling people he's in the race, he is going to Orlando. So we keep getting more people in this race, and it becomes less...

WOODRUFF: But it hasn't really narrowed down in a sense.

TODD: It hasn't narrowed. But at the same time, you talk to anybody and they say, well, there's Howard Dean, and there's Harold Ickes, and then there's everybody else. And I think until we get more settlement exactly of what Dean and Ickes are going to do, then we will have a better idea of how everybody else plays, whether it's Martin Frost or Jim Blanchard.

WOODRUFF: All right. This -- this meeting in Orlando on Friday, they are announcing a new commission. What is that all about?

TODD: Well, what this is, the DNC, to placate Michigan, the state of Michigan, and Debbie Dingell and Senator Carl Levin, back four years ago, when they declared that Iowa and New Hampshire were still going to get the first in the nation status, they promised that after this election cycle they would appoint a commission to study the primary calendar for the 2008 season.

Well, this commission is going to be announced later this week in Orlando. Carl Levin is already one of the members that's going to be on this commission. It's about a 40-member commission.

Terry McAuliffe, the outgoing chairman of the party, is going to appoint all the members. Iowa and New Hampshire will all have says in this. But it's going to be a fairly diverse commission. Governors are going to be on it, I'm told, senators. Just nobody that is running for president in 2008.

WOODRUFF: What about Iowa and New Hampshire? Where does all -- where do they stand? I mean, how strong a shape are they in?

TODD: Well, they have -- they're going to have four seats on this commission, which means they'll have at least four supporters for keeping Iowa and New Hampshire first. From what I understand, I've talked to people that are going to be kind of involved in the "save Iowa-New Hampshire program."

And they are going to -- try to protect Iowa and New Hampshire, they're going to call for a plan of some sort that isolates -- that lengthens the calendar, that allows maybe a third -- maybe there's a third in the nation day, a fourth in the nation day, where you don't have five states on one day, but you have one state following each week so that maybe there are other -- three or four other states that get their own moment in the sun, rather than clumping up like we saw, if you recall, on February 3, where eight states went on one day and all of a sudden the nomination was over.

WOODRUFF: But does that make Michigan happy?

TODD: We'll see. Maybe if Michigan's the third in the nation.

WOODRUFF: Or the other states that are raising questions.

TODD: It's going to be difficult. But one thing Iowa and New Hampshire have going for them, the Republican calendar is already set. And people like you and I don't want to have to travel to multiple states. It would be kind of convenient if we could have Iowa for both the Republicans and Democrats, New Hampshire for both the Republicans and Democrats.

WOODRUFF: But we do like to travel. We do like to see the country.

TODD: Hawaii and Puerto Rico. That's what I'd like to see. That should be the first in the nation.

WOODRUFF: I even like North Dakota. You know, New Mexico, Montana, Louisiana. They're all good.

TODD: More red state America.

WOODRUFF: OK. Thank you, Chuck Todd. We appreciate it.

TODD: You bet.

WOODRUFF: "The Hotline," an insider's political briefing, is produced every day by "The National Journal." And you can go online to NationalJournal.com for subscription information.

The presidential campaign ended more than a month ago, but some say not every vote has been counted. Up next, George W. Bush was just certified the winner in Ohio, but a statewide recount is about to get under way.

(COMMERCIAL BREAK)

WOODRUFF: The Libertarian and Green Party presidential candidates today began the process of requesting a county-by-county election recount in Ohio. The recount is expected to begin just days after Secretary of State Ken Blackwell certified President Bush as the winner of Ohio's 20 electoral votes. The Kerry campaign has said it supports the recount, although the Kerry team said it does not expect the recount to overturn the Bush victory.

It took a lot of lobbying, but the president finally got his way on the intelligence reform bill. But will Mr. Bush face even tougher fights ahead as he pushes his domestic agenda?

Plus is a new honor in store for Bill Clinton? We'll tell you what the former president is nominated for when we return. (COMMERCIAL BREAK)

WOODRUFF: It's just before 4:00 p.m. in the East. And as the markets get set to close on Wall Street, I'm joined by Lou Dobbs in New York with "The Dobbs Report."

Hello, Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Good afternoon, Judy.

The price of crude oil today down another $1.50, dropping back below $42 a barrel. Prices have fallen 17 percent over the past week. But that didn't do enough to help the market today.

The market broadly lowered. While the final trades are now being counted, the Dow Jones industrials down more than 100 points, down just about 104 points. The Nasdaq is down one and a third percent.

Signs of trouble in the consumer product sector today. Colgate- Palmolive announcing it will lay off 12 percent of its workforce, 4,400 people will lose their jobs. Colgate will also close a third of its factories over the next four years as it struggles to compete.

Finally, disturbing new questions about the nation's ability to prepare our youth for real world competition which is only intensifying. A major international study finds the math skills of our 15-year-olds are near the bottom of all industrialized nations. Compared to their counterparts in Europe and Asia, our ninth and tenth grade students ranked 24th out of 29 countries. The study warns that poor mathematic skills could lead to weaker economic growth in this country and a loss of dominance in technology.

Coming up on CNN tonight at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT" our special report, "Culture in Decline." Tonight we take a look at the unsportsman-like conduct in sports demonstrated by far too many professional athletes. It's a visible example of our culture in decline and setting a bad example for our children.

(BEGIN VIDEO CLIP)

T.J. SIMERS, "L.A. SPORTS" COLUMNIST: Today's athlete is Superman, he's invisible. He has so much money coming his way, endorsements and everything else and so many second chances that they can hang in there and basically say or do anything and feel like there's never going to be a repercussion.

(END VIDEO CLIP)

DOBBS: And speaking of repercussions tonight, Major League Baseball working to create tougher restrictions on steroid use. Pulitzer Prize winner and "New York Times" sports columnist Dave Anderson will be my guest this evening.

Also the House of Representatives expected to pass the intelligence reform legislation today. That bill does not prevent illegal aliens from obtaining driver's licenses or improve security at the borders and ports. Congressman James Sensenbrenner says he's not satisfied and he's our guest as well tonight.

New support for the import of medical drugs into this country. The American Medical Association today voted in favor of it. We'll take a look at what that will mean for drug companies and for consumers. Now back to Judy Woodruff in Washington -- Judy.

WOODRUFF: Lou, you mentioned sports. This whole controversy about the use of steroids, do you think it's something that's taking hold with the American people, with sports fans? Do you think this is an issue people are going to continue to be interested in in.

DOBBS: I think they're going to be forced to do so because whether sports fans are forgiving of the use of illegal drugs and steroids among them, is really not the point. The point is that our institutions, our government institutions, our laws have to be enforced and it's time to break what has been an altogether too sympathetic relationship among big media, big professional sports, and corporate America. And that's at the heart of what is going on here. It's part of what we'll be getting to at 6:00 tonight here on CNN.

WOODRUFF: All right. We'll look forward to that. Thank you, Lou.

DOBBS: Thanks, Judy.

WOODRUFF: INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I call upon the Congress to pass the intelligence bill. It is a good piece of legislation. It is a necessary piece of legislation.

ANNOUNCER: It appears the president won this battle. Will he face tougher fights on Capitol Hill ahead?

The presidential election was just five weeks ago, but who do voters in a crucial state like in the next race for the White House? We'll take a look at an early poll. Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. The intelligence reform bill stalled just before Thanksgiving but now it appears to be on track to become law before Christmas. The House is moving toward a vote on a compromise bill. As our White House correspondent Dana Bash reports, President Bush is looking forward to an important if not so easily won victory.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): An emotional President Bush at Camp Pendleton to thank marines hard hit by the Iraq war. No mention of it here, but this is also a commander in chief upbeat at word he avoided a political embarrassment back in Washington. Intelligence agency reforms he backed are finally on the way to his desk.

SEN. SUSAN COLLINS (R), ARMED SERVICES CMTE.: The president's personal involvement clearly makes a difference. In this case, it determined the fate of this very important legislation.

BASH: Privately, many involved in the intelligence debate complained the president engaged too late. It's a problematic first- term pattern say some who hope he learned a lesson for tougher challenges awaiting him.

TIMOTHY ROEMER, 9/11 COMMISSION MEMBER: The president said in the days after the election that he was willing to use political capital on Social Security reform and tax reform. If he would have lost this, however, it really would erode some of that capital.

BASH: White House sources concede this early legislative victory was crucial for a president trying to use the post-election period to build support to help push his ambitious second term agenda in a divided America.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: I think this does help set the stage for the second term because it shows what we can get done when we work together in a bipartisan way.

BASH: But the president's fight with fellow Republicans, not Democrats, on intelligence reform exposes a harsh reality, a bigger GOP Congress does not mean a rubber-stamp.

REP. MIKE PENCE (R), INDIANA: This Congress, which saw its majority grow, received a mandate from the American people for fiscal discipline, limited government and traditional moral values. We will work toward that vision with the president, occasionally disagree with the president on how that vision is worked out.

(END VIDEOTAPE)

BASH: The intelligence bill, of course, has near unanimous support among Democrats. That's a luxury the president is not going to have with some of the top and ambitious things he's going to push in his second term. Things like reforming the tax code and Social Security. Those are area where Republicans are very divided when it comes to specifics.

WOODRUFF: So are those areas that we can expect to see some of the similar -- some similar scenarios play out as the second term gets under way?

BASH: I talked to a couple Republicans on Capitol Hill, and sort around Washington today who were looking at this and saying you ain't seen nothing yet. When it comes to things like the tax code there are very different views on how to do that reform, some want a flat tax, sales tax. They are going to be looking around Washington to the White House to the president to get specific perhaps in a way that he didn't when it came to legislation in the first term. At that time he really was focused on putting out principles and not specifics. A lot of people are looking at the president saying they're going to need specifics because there are big differences in how to do things he wants to do. The White House understands that. They say just wait until the State of the Union.

WOODRUFF: Dana Bash, at the White House.

With the expected passage of intelligence reform, America's intelligence community facing a whole new world. But have we seen this kind of political maneuvering before?

Also ahead, with so many members of Congress safe in their seats, is anyone feeling sorry?

(COMMERCIAL BREAK)

WOODRUFF: With me now to talk about the political battle over intelligence reform and other important matters, are two Washington political veterans. Jack Valenti, he is in Los Angeles today. He was an adviser to President Lyndon Johnson. Ed Rollins is in New York, he is a long time political strategist, former adviser to President Ronald Reagan.

Gentlemen, good to see both of you. Jack Valenti, let me start with you. For President Bush to get intelligence reforms, is this a victory for him or is it an embarrassment because it took him so long?

JACK VALENTI, FMR. AIDE TO PRES. JOHNSON: Well, it was a must- victory. He had to have this. And I think it is a foregone conclusion that once the president moved in and put his chips on the table, or as LBJ would say, shoved in his stack, he would get the bill.

Now the big thing is make it work. That's going to be the hard part because when you get about 12 or 16 disparate agencies coming together, all of whom protect their turf and with a vision of homeland security trying to get 26 agencies together and didn't do that good a job of it, it's not going to be an easy task ahead.

WOODRUFF: Ed Rollins, should it have taken so long and should it have been so hard to get this done?

ED ROLLINS, GOP STRATEGIST: Well, it's a complicated issue in the sense that it came -- the recommendations came from an commission as opposed to directly from the White House or directly from the Congress. I think Duncan Hunter, the House chairman, and John Warner, the Senate chairman of the Armed Services were looking out for their parochial interests, and I don't mean that in a derogatory way. The military is very important to us, particularly in a time of war. And I think they had to feel very confident that the direct line from the president to the secretary of defense and on to the troops was not hindered or not complicated by the language in this bill.

WOODRUFF: Jack Valenti, we know that the votes were there in the first place back around Thanksgiving to get this passed but the speaker, Dennis Hastert didn't want to get this done without a majority of the Republican majority. Is that a smart strategy for him going forward? VALENTI: In my own judgment -- I have great respect for the speaker, but I don't think that was because if this bill hadn't passed and you come into January or February or March and you have some kind of an attack, who are they going to blame rightly or wrongly? I think this was not a very good move. But the point is now that I think the speaker and the president have talked, without question. And this bill is going forward.

This bill, I think, is enthusiastically received by the majority of the American people, whether it came from a commission or whatever. Although Ed is right about that. But I think that this was a must for the president. He moved quickly when had had to, got the letter out to the congressional leaders I think yesterday. And that let them know that he carried and he wanted it and the discipline was intact.

WOODRUFF: Ed, Ed, what do you think? Is it a smart thing for the speaker to say going forward, we don't want major legislation to go through here unless we can get a majority of the Republicans?

ROLLINS: Well, I think Denny Hastert is a very unique guy and he brought these House Republicans back together after Newt Gingrich sort of was a more divisive figure. And I think the bottom line is it's very tough legislation ahead and he has got to make sure that his chairman and that his members basically carry the president's agenda forward. I think what we have all learned from this drill here is that this has to be a consensus. People have to sit down with the Republican leadership and the Democrats on obvious measures and move together collectively, not independently. But the president obviously, as Jack said, he had to show his muscle on this one and he did an effective job.

WOODRUFF: Ed Rollins, let me quickly ask you about something a former Republican Congressman said about one issue that is coming up, Social Security reform. He said -- Robert Walker said, quote: "Many Republicans know the party lacks credibility on the Social Security issue. For us to wade out there and take that on makes the party politically vulnerable." Do you agree?

ROLLINS: It has always been a vulnerability for us. And I think at the end of the way we've got to have something that's much better than what they have today. It has been 20 years since we've had a commission. We don't run out of funds until 2052 by the projections. But I think to change the formulas and to change the way it's done is going to be a complicated issue and we need to do it very carefully.

WOODRUFF: What's your perspective on that, Jack Valenti?

VALENTI: I think that Social Security is -- as has been said many times, is the third rail of politics. I think you have to move very, very quietly and very circumspectly here. This is a huge thing. There are millions and millions of people who rely on it and millions and millions of people who are going to rely on it. So I think this is one of the most sensitive issues you're going to take you up, although the one after this, tax policy, may be almost as equal. But it's a very tough issue. And I think that everybody has to go quietly. Very quietly and very sensitively here. ROLLINS: And equally as important, you need a bipartisan support. This just can't be a Republican-alone initiative, even though they have the votes. It has to be the Republicans and Democrats who basically buy into these pieces of legislation and move it forward collectively.

VALENTI: And this is the kind of thing, Judy, that on 30-second commercials in the next election can really cut you down.

WOODRUFF: Jack Valenti, I want to pick up on your Hollywood experience, former head of the Motion Picture Association and ask you about an item that came across our desk today. And that is a Christian organization, we are told, is urging people to write to actor Tom Hanks, urging him not to star in the movie version of "The Da Vinci Code," a very, we know, best-selling book, because they argue it defames Christianity. Is this taking more -- is this a correct use of the whole question, the issue of moral values, Jack?

VALENTI: Well, I can tell you this. Every producer in Hollywood hopes that somebody will want to ban his movie. It gets him all kind of publicity. It's thing that you love to have. So whenever you have somebody enraged about a certain movie, the producers and the people in that movie are absolutely delighted. I don't think this is going to go anywhere. It's old hat. This has happened time and time again. And in the end, it's the movie that benefits.

WOODRUFF: Ed?

ROLLINS: Well, I think there was a lot of controversy over "The Passion" and it was obviously the biggest blockbuster of the year. So I agree with Jack. I think it has to be done tastefully because obviously you don't want to offend Christianity and you don't want to offend Catholics. But at the same time, it's a great story. I'm a Catholic, I read the book. I enjoyed it. And I'm sure if they make a great movie out of it, I'll enjoy it also.

WOODRUFF: So Tom Hanks shouldn't have any pause if he gets a lot of letters?

VALENTI: Well, Tom Hanks is one of the most respected figures not only in Hollywood but in the country. And I think that will be a big plus to this movie. But when you have that many millions and millions of people reading Dan Brown's book, that tells you something, too.

WOODRUFF: Well, speaking of stars, something happened with you, Jack Valenti, yesterday in Hollywood. We understand you already had your star in the sidewalk up there, but now you've got your handprints. Tell us about that. We've got a little picture to show the audience.

VALENTI: Well, I must say it was about as great an honor as you can have when you imprison your hands and your feet and sign your name in that concrete and then it's there for generations of Americans yet unborn, as I want to say. And only about 220 people have had that before. So I was gloriously and delightfully honored last night. It was quite an affair. I was quite pleased with it.

ROLLINS: Judy, we Republicans have been trying to get his fingerprints on things for years and years and never been very effective at it. So I'm pleased that they're in cement.

(LAUGHTER)

ROLLINS: He's the master.

VALENTI: Ed Rollins is an old friend of many, many years.

ROLLINS: Absolutely.

WOODRUFF: I was going ask him what his secret is because nobody's asked me and, Ed, I don't guess they've asked you to put our handprints.

ROLLINS: Absolutely. Well, he has had a great record, he worked for a great man but he's had his own greatness. And obviously anybody that survives his own as long as he has and been as effective as he has...

WOODRUFF: For sure.

VALENTI: Thank you very much, Ed, thank you, Judy, for that.

WOODRUFF: We all join you in congratulations. Thank you, to both of you. It's great to see you both. Ed Valenti -- Ed Rollins and Jack Valenti.

VALENTI: Ed Valenti!

(LAUGHTER)

ROLLINS: That's a combination, Valenti and Rollins, what a firm.

WOODRUFF: What a combination, Jack Valenti and Ed Rollins. Gentlemen, thank you both. It's very good to see you. We appreciate it.

VALENTI: Thank you.

ROLLINS: Thank you.

WOODRUFF: Thank you.

New York's attorney general announces his future political plans and he already has a fund raiser scheduled.

Plus, Floridians have 2008 on their minds. We'll find out whom they think should make a run for the White House.

(COMMERCIAL BREAK)

WOODRUFF: Checking the Tuesday headlines in our campaign news daily. President Bush hasn't started his second term, but a new poll has already gauged Florida voter preferences about the 2008 White House race. When given several choices and asked whom they would like to see run for president, 48 percent of Florida voters said Rudy Giuliani should run while 45 percent said Hillary Clinton. 44 percent agreed John McCain should run again while 35 percent said they would like to see John Kerry give it another try.

Florida Governor Jeb Bush says that he won't run but 31 percent say he should. And 20 percent said they'd like to see Arnold Schwarzenegger run if he were eligible.

New York state Attorney General Eliot Spitzer has made it official. He is running for governor in 2006. Spitzer has made headlines with high profile investigations of wrongdoing on Wall Street. He has a $1,000-a- person fundraiser luncheon scheduled for later this week.

Out west, Washington state election officials are getting ready to begin the hand recount in that state's governor's race. The count begins tomorrow and is expected to be completed December 23. Workers in 39 counties have to count more than 2.8 million ballots. A machine recount found that Republican Dino Rossi defeated Democrat Christine Gregoire by just 42 votes.

Recent history has shown it's become more and more difficult for a challenger to unseat an incumbent in the House of Representatives but could that be about to change? Our Bruce Morton takes a look.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): House Republican for ten years, now Democratic for 40 before that, incumbents are so safe they can practically will their seats to their kids. Is this likely to change?

STUART ROTHENBERG, ROTHENBERG POLITICAL REPORT: Almost impossible. We have two or three incumbents being defeated every year. That's about it.

MORTON: Yes, but 2006 may be different. The president will be a lame duck and the issues may have changed to domestic things like Social Security or tax reform.

AMY WALTER, COOK POLITICAL REPORT: 2002, 2004, those were elections about President Bush. They were about security. It was about the war in Iraq, terrorism, not specific congressional legislative issues.

MORTON: Republican moderates like Chris Shays of Connecticut, a small group, may face tough choices. His district is changing.

WALTER: He has to decide in this next election how much he moves against the Republican leadership to protect his own district. And we'll see how many others like him there are who know that boy, to win here I've got to prove that I'm an independent. I can't just be a Republican vote.

MORTON: And some Republicans haven't faced a serious challenge in years. Still, challenges are expensive.

ROTHENBERG: I think the only way things will change is if we have a fundamental restructuring of congressional districts, if districts are drawn for compactness, for competitiveness. Given the current system, I think it's very unlikely we're going to have competitive House elections for a long time.

MORTON: Fundamental reform is unlikely. A handful of states, Iowa for one, do require district lines to be drawn on a nonpartisan basis but it doesn't seem to be a trend that's catching on. So what's a poor Democrat to do?

WALTERS: All they can hope for is that Republicans do end up pushing the envelope too far, whether it's legislatively or on some of these other ethics issues and give Democrats some of that opening.

ROTHENBERG: It's just going to be hard to defeat individual members on individual issues. It's going to take really a sea change nationally to change the House.

MORTON: The Democrats held it for 40 years. Now the Republicans have held it for 10. It doesn't change parties easily. Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: It sure doesn't.

Fresh from the opening of his presidential library, what does Bill Clinton do for an encore? We'll tell you about the honor that may lie ahead when INSIDE POLITICS returns.

(COMMERCIAL BREAK)

WOODRUFF: Being leader of the free world surely has its rewards, but now Bill Clinton is up for an honor more in tune with his saxophone-playing Elvis-loving side, you could say. The former president has been nominated for a Grammy award for his recorded reading of his memoir, "My Life." Clinton won a Grammy last year for his speaking role on a children's album. And Hillary Clinton won a Grammy in 1997 for narrating her book, "It Takes A Village." At least one accomplishment she achieved first. There you go. That's it for INSIDE POLITICS this Tuesday. I'm Judy Woodruff. Thanks for joining us. "CROSSFIRE" starts right now.

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