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Inside Politics

Outpouring of Aid for Tsunami Victims; Powell, Jeb Bush Visit Southeast Asia; U.S. Marines Land in Sri Lanka; 109th Congress in Session; Bitter House Battles Over Ethics

Aired January 04, 2005 - 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 VIDEO CLIP)
ANNOUNCER (voice-over): An outpouring of aid for tsunami victims. Will American relief efforts win hearts and minds?

COLIN POWELL, U.S. SECRETARY OF STATE: But I think it does give the Muslim world and the rest of the world an opportunity to see American generosity, American values in action.

ANNOUNCER: The tsunami disaster hits home.

J. ADAM ERELI, STATE DEPARTMENT SPOKESMAN: There a large number of Americans that are unaccounted for and that we're trying to track down.

ANNOUNCER: What's Washington doing to help find those still missing?

A bitter House battle over ethics.

UNIDENTIFIED MALE, U.S. REPRESENTATIVE (PH): The Democrats have decided that they're going to use politics of personal destruction to gain power. And what we are doing are protecting ourselves from those assaults.

UNIDENTIFIED MALE, U.S. REPRESENTATIVE (PH): The changes being proposed by House Republican leaders would constitute the biggest backtracking we have ever seen on ethic standards in the House.

(END VIDEO CLIP)

ANNOUNCER: Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

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

U.S. Marines have landed in Sri Lanka to assist with relief and recovery efforts from the tsunami disaster. And right here in Washington, the crisis overseas was among the first orders of business for the new session of Congress.

Among the new developments in the disaster zone, the Marines are bringing bulldozers, generators, food and medical supplies with them to the region. Up to 1,200 Marines are expected in the area by tomorrow. Secretary of state, Colin Powell, and Florida governor, Jeb Bush, arrived in Indonesia today after touring damaged areas in Thailand on Monday. Governor Bush said the most pressing need in Thailand is simply help in identifying the dead.

The number of people killed in the disaster has climbed to more than 155,000. That number is expected to continue rising.

Indonesia's death toll stands at 94,000, and thousands more still are missing.

CNN has correspondents and crews stationed throughout the region. Fourteen of our reporters and anchors are on duty in four countries.

Here in the nation's capital, the members of the 109th Congress took up the issue of tsunami aid just moments after they took office. Vice President Dick Cheney was on hand to swear in the 34 who were elected in November.

Majority Leader Bill Frist, who is heading to the disaster region later today, said that the U.S. effort to help those in need is just getting started.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R), TENNESSEE, MAJORITY LEADER: By their own initiative, private individuals and charities, nongovernment organizations and businesses have raised millions of dollars to aid the tsunami victims.

I am filled with admiration for the compassion demonstrated by our fellow citizens.

(END VIDEO CLIP)

WOODRUFF: We'll have much more on the first day of the new Congress a little later in the program.

Overseas, Secretary of State Powell and Florida Governor Jeb Bush have arrived in Indonesia after an earlier stop in Thailand.

CNN's John King is traveling with them as they survey the tsunami damage.

(BEGIN VIDEOTAPE)

JOHN KING, CNN WHITE HOUSE CORRESPONDENT (voice-over): At Phuket, a first-hand update on the tsunami relief effort and an acknowledgement the challenge in Thailand is far different than in poorer and more remote areas harder hit.

POWELL: I will go back and see if there is not more we can do, has to do with identification of remains, forensic activity, forensic pathology.

KING: Secretary Powell and Florida Governor Jeb Bush were briefed on efforts to track down reports of Americans still unaccounted for. And the president's brother visited the makeshift wall where family members of the many more missing Europeans and Asians appealed for help.

GOV. JEB BUSH (R), FLORIDA: This breaks my heart that we talk about how in Thailand the number -- the damage -- was less than Indonesia. But put into perspective, thousands of people lost their lives here from all over the world -- half of them from Thailand, half of them from the rest of the world.

And it was more than the number of people that were killed on September 11.

KING: Flying into Phuket it was clear the damage here is significant but in isolated pockets. Some 4,000 people are still listed as missing.

And Thailand's foreign minister said additional search planes and forensics teams are critical to the now fading hopes of getting a reliable count of the victims and their nationalities.

SURAKIART SATHIRATHAI, THAI FOREIGN MINISTER: We have to wait for the final data analysis and comparison to be able to know exactly who are the Thais, who are foreigners.

KING: Looking past the immediate relief effort, Thailand's prime minister pledged $20 million to develop a tsunami early warning system for his country.

Secretary Powell said talks Thursday in Jakarta and later this month in Japan will aim for a broader system covering the Indian Ocean and the South China Sea.

From Thailand, it was on to Indonesia where the destruction is worse and where Secretary Powell sees the relief effort as a possible antidote to deep anti-American sentiment.

POWELL: But I think it does give the Muslim world and the rest of the world an opportunity to see American generosity, American values in action.

KING (on camera): First in Thailand and then here in Indonesia, officials thanked the United States for what they called prompt and generous aid, statements Secretary Powell says prove wrong those who rushed to criticize the Bush White House within hours and days after the tsunami.

John King, CNN, Jakarta.

(END VIDEOTAPE)

WOODRUFF: Among the members of Congress heading to the disaster region is Representative Chris Smith of New Jersey. Congressman Smith joins me now from Capitol Hill.

Congressman, as I understand it, your going to be arriving this weekend. It will be at that point, almost two weeks since the disaster. At that point, what are you going to be looking for?

REP. CHRIS SMITH (R), NEW JERSEY: Well, we're going to be looking at the assess -- we're going to be doing an assessment of the immediate and the immediate needs that are needed by the people.

You know, we know that there is a very serious crisis with water and waterborne diseases, diarrheal diseases -- on any given day, the leading killer of children around the world when you have a situation where the water has been -- become -- so contaminated.

We want to make sure that clean drinking water and whatever immunizations are necessary and medicines to mitigate disease in that area so there is no big break out of various diseases.

And I think the most vulnerable populations, women and children, will be part of our assessment. It's a bipartisan effort that's being made. Of course, the executive branch is doing their assessment, and we're all working as a team to make sure that the suffering can be lessened.

WOODRUFF: Do you assume, congressman, that the amount of U.S. aid is going to increase?

SMITH: I think you can take that to the bank. Not only U.S. foreign aid but I think global foreign aid from the European Union, from Japan and from other interested countries will have to ratchet up significantly.

And I think the American people have demonstrated through their private, voluntary giving to groups like Catholic charities, Catholic relief organizations and the like are showing that they're willing to step up to the plate.

And I think other citizens around the world need to be contributing to their NGOs as well because that will only augment the ability of those nongovernmental organizations working with governments, again, to pick out needs and remedy those needs because they're overwhelming at this point.

But the intermediate and the longer-term needs, we're in this for the long haul. And I'm very proud of the job that President Bush and Colin Powell have done with regards to the response.

Our military and our USAID people are working in a splendid fashion.

Judy, I was there when "Operation Provide Comfort" was initiated, and our military literally save thousands of lives by being first on the spot when the Kurds were making their way to the Turkish border.

In like manner, the military is performing with great distinction. And the baton increasingly will be passed off to the nongovernmental organizations for a sustained and sustainable effort to mitigate the suffering.

WOODRUFF: But again, with the rising cost of the war in Iraq, you know, another hundred billion we're hearing the administration is going to ask for this year. You've got domestic priorities.

Any doubt in your mind the U.S. can afford this?

SMITH: We have to afford it. There are so many lives at risk, so many lives that have been lost, maybe upwards of 4,000 or more missing Americans, who were there when the tsunami hit.

We should leave no stone unturned in tangible deeds to, again, to help people and to show our compassion in a tangible way.

WOODRUFF: Very quickly, congressman, it has been suggested by a couple of senators, Democrat, Max Baucus, Republican, Chuck Grassley that the private contributions Americans are making be deductible on their 2004 tax returns, allowed up until January 31.

Is that a good idea?

SMITH: I think it's a great idea. I think that will invite even additional contributions. And again, those who have already made such generous donations to this relief effort ought to be rewarded. They ought to be told that you did the right thing.

They know it in their hearts. But the government needs to give them a pat on the back and say, well done, and we're all in this together.

And I do think the world is seeing America at its best, as well. And we are working with the other countries of the world, again, to alleviate unbelievable suffering and, again, I think we're making a Herculean effort.

So I'm very proud of the job that we're doing. And again, this is another opportunity for bipartisanship, to put away those partisan labels and say, let's roll up our sleeves and work on this together for these people.

WOODRUFF: Congressman Chris Smith of New Jersey, heading to the region this weekend.

Congressman, thank you again very much.

SMITH: Thank you, Judy.

WOODRUFF: We appreciate it.

Well, many Americans are still missing or unaccounted for in the tsunami disaster. The state department says about 4,000 reports of missing Americans remain for more than 20,000 calls that came into hot lines and U.S. embassies right after the disaster.

(BEGIN VIDEO CLIP)

ERELI: We're working systematically with immigration authorities, with local relief officials, with airlines to try to get as much clarity and definition on the whereabouts of the very large number of Americans who were reported in the region affected so that we can determine exactly where they are and what their status is.

(END VIDEO CLIP)

WOODRUFF: We at CNN would like to find out about your efforts to locate missing friends or relatives who were in the tsunami-stricken region. Please call CNN at 404-878-1500.

Our phone line is going to be open from 8:00 a.m. to 5:00 p.m. Eastern. At other times, the phone line will connect you to voice mail.

CNN has dispatched, by the way, many of our most seasoned journalists to the front lines of this still developing story. Their reports will be featured every night this week in CNN's live, primetime special report, "Turning the Tide."

That is every night this week beginning at 7:00 Eastern.

And we'll have much more on the tsunami tragedy later on INSIDE POLITICS.

Coming up, one day after they volunteered, two former presidents are already scoring big when it comes to raising disaster relief funds.

But next, Congress gets back to work -- and in the House, a clash over ethics. Why did Republican leaders back down over watering down the way they police themselves?

Plus, another violent day in Iraq -- do these daily attacks threaten to postpone national elections planned for later this month?

(COMMERCIAL BREAK)

WOODRUFF: After a holiday break, members of the U.S. House and Senate are back here in Washington. The 109th session of Congress convened today with 41 new members, and Republicans have a bigger say in the decision making.

The Senate now has 55 Republicans. That's an increase of four seats.

In the House, the GOP now has 232 seats. For them, that's an increase of three.

On this first day of the new session, ethics reform was one of the major topics in the House.

Here now, CNN congressional correspondent, Joe Johns.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Faced with a growing backlash over ethics, House Republicans retreated from attempts to change the way they police themselves, starting with a rule they have already adopted allowing their leaders to keep their positions even if under indictment.

House majority leader, Tom DeLay, whose political activities are under investigation in Texas, personally proposed reversing that rule to the relief of some of his colleagues.

REP. ZACH WAMP (R), TENNESSEE: It was a dumb, political thing to do, and now they've retreated from it, which I think is a bold move showing that they're a leadership team that is not arrogant, or obstinate or pigheaded.

JOHNS: DeLay has not been indicted and denies wrongdoing.

Some House Republicans said they got an earful from constituents who said Congress was watering down ethics rules.

Republicans also abandoned two separate and controversial changes to ethics rules, which critics charge would have gutted House standards by limiting enforcement of the congressional code of conduct.

The Republican chairman of the ethics committee in the last Congress also weighed in, issuing a statement saying, "Ethics reform must be bipartisan, and this package is not bipartisan."

Still, House Republicans opted to accept one rule allowing complaints against members to die after 45 days unless at least one Republican on the committee agrees that it merits investigation.

REP. DAVID DRIER (R), RULES COMMITTEE CHAIRMAN: We want to make sure that there is a presumption of innocence. We want to make sure that members have due process, that in no way, GB (ph), undermines the opportunity for the ethics committee to do its work.

JOHNS: But Democrats in watchdog groups say the new rule would allow dismissal of legitimate complaints. The committee is composed of 10 members from each party, equally divided, which numerically is already a recipe for deadlock.

MELANIE SLOAN, ETHICS ACTIVIST: In the partisan atmosphere that infects the House, it is going to be nearly impossible for the ethics committee to vote to investigate any particular member.

(END VIDEOTAPE)

JOHNS: Republicans at first argued the current rules benefit political aggressors who file politically motivated charges. On the other hand, at the end of the day, they apparently concluded that some of the changes were not worth the political price -- Judy?

WOODRUFF: Evidently that's what happened. OK. Thank you, Joe.

Well, with less than a month to go until election day in Iraq, violence there remains a serious problem. Today, insurgents killed the governor of Baghdad Province and one of his bodyguards in a road ambush in the Iraqi capital.

The governor had survived a previous assassination attempt just four months ago.

Four U.S. soldiers and one Marine were also killed today in three separate attacks. There is also word of a grim milestone for U.S. troops. The Pentagon says the number wounded since the start of the war now has topped 10,000.

CNN's Dana Bash is with us from the White House with reaction to these latest developments in Iraq.

Hi, Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Judy.

Well, the White House is condemning the assassination of Baghdad provincial governor in the strongest of terms, but they are continuing to say here that they do not think that nor the other violence in Iraq should delay the elections set for just 26 days from now.

Now, Iraq's interim prime minister, Ayad Allawi, called President Bush yesterday to discuss, according to the White House, the security situation and Iraqi elections.

That call raised some eyebrows because the White House didn't tell reporters about it until after it was in a published report. Bush officials, though, insist that it was not a call of alarm, that there was no discussion, according to the White House, about delaying the elections.

And as one official familiar with the conversation said to CNN, Allawi was, "not going wobbly" when it comes to the elections. And they are, of course, saying that they understand that this is going to be a defining moment in the Bush foreign policy legacy, if you will -- these elections. And they want to make sure that it goes well.

Having said that, they understand that there are some Iraqi officials who do think and are saying publicly that the elections should be delayed because of concerns of security, because of concerns about Sunni participation.

They're really trying to walk a fine line here, Judy, between saying that they don't want these elections delayed but also again and again trying to make it clear that it's not the American process that matters, it's the Iraqi process.

So, it's a very fine line that they are continuing to walk, and perhaps could get even harder as we get closer to the elections.

WOODRUFF: No doubt it will. I know that some Republicans we're talking to who have just been in the region having serious questions about whether those elections can take place.

Dana, I want to ask you about the news yesterday out of the White House, the president naming his father, former President George H.W. Bush and former president, Bill Clinton, to head up an effort to raise private money for tsunami relief.

How is that effort going?

BASH: Well, Judy, that was, obviously, an effort by the White House to raise the president's profile, to show that he is very concerned. The White House, Judy, is doing that again today.

They announced that Mr. Bush got a phone call from the secretary of state and his brother, Florida's governor, who, of course, are traveling in the region to give him an update on what they're learning there, even releasing a photo, that you see there.

And on -- in terms of the effort by the two former presidents, they announced here at the White House that the Web site that the two presidents have been talking about on television, the USA Freedom Corp Web site has gotten more than 100,000 hits since the two presidents signed on.

That compares with an average of about a little more than 5,000 per day in the last year. So the White House is certainly saying that they have raised awareness.

But they do admit, Judy, this particular effort is going to be nearly impossible to track in terms of its success because they are simply telling Americans to go to private organizations to give, and that is very hard to keep track of.

We did hear from President Clinton, that he was talking with former President Bush about the fact that he carries a BlackBerry and that he immediately got a pledge of a $1 million.

President Clinton said that he saw the same kind of response to him, personally.

As far as President Bush goes, I can tell you, Judy, that he personally has not given yet. The White House says he's looking into what organizations to give to. And they have promised he will give a significant amount -- Judy?

WOODRUFF: Well, I know you'll be reporting on that when you find out. We also know, Dana, those private organizations are raising in the millions. We've been seeing some early numbers from them.

Dana, thank you very much.

Christmas greetings for Democrats from a potential, presidential hopeful. Up next, John Edwards expanded his greeting card list. Details on his bulk mailings to New Hampshire in our "Political Byte."

(COMMERCIAL BREAK)

WOODRUFF: Today's "Political Bytes" remind us that it's never too early to cultivate support in New Hampshire. Granite state sources are telling CNN "Morning Grind" that former democratic, presidential running mate, John Edwards, has been making calls to state party leaders.

Edwards also sent Christmas cards to state party activists. And as we have reported, he has agreed to speak in Manchester early next month.

In Florida, election officials say almost two-thirds of the provisional ballots cast on election day were not counted, mostly because the voters were not registered. "Tallahassee Democrat" reports about 7 percent of the ballots were tossed because voters had been purged from the rolls for not voting in recent years or for being ex-felons.

Republicans in Washington state appear be gathering evidence for a possible challenge to that state governor's election. Party officials point to records that show 8,500 more ballots than voters who were listed in five counties.

After two recounts, Democrat, Christine Gregoire, was certified as the winner over Republican, Dino Rossi, by just 129 votes.

And we have another update on the race for Democratic Party chairman. Long time party activist, Harold Ickes has decided not to run for the post. Yesterday it was reported that centrist party activist, Simon Rosenberg, will enter the DNC race.

It could be the biggest political battle this new year. Next up, the first shots are fired in the fight over reforming social security. Will your benefits be cut if these changes are passed?

Plus, much more on the tsunami disaster. I'll speak with a senior, Senate Democrat about U.S. relief efforts.

(COMMERCIAL BREAK)

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

Hi, Lou.

LOU DOBBS, CNN HOST: Judy, how are you doing?

Thank you. Another broad sell-off today on Wall Street. The pace of selling picking up after the federal reserve raised some inflation concerns. As the final trades are now being counted, the Dow Jones industrials down almost 100 points, off right now 97.24. These trades being consolidated in the final minutes. The Nasdaq is two percent lower on the day. Oil prices up nearly two dollars a barrel, that after Saudi Arabia confirmed it will cuts its production as promised.

And the Fed today said inflation is becoming a larger concern for the economy. The Fed had downplayed rising prices after its policy meeting last night. But the Fed's minutes released today on that meeting show policy-makers were, indeed, more concerned than they let on publicly. Fed members concerned the dollar's depreciation against other currencies and soaring energy costs will push prices higher. Now, economists widely expecting another quarter percent increase in the Fed's interest rates when it meets again in early February. And while the tsunami caused a dramatic loss of life, the economic impact is considered by many experts to be surprisingly small. Most major ports and manufacturing zones in the region not damaged by the tsunami, despite the devastating broad scale of loss of life. An economist saying that disaster is expected to cut only a few tenths of a percentage point off the economic growth of the region.

Coming up tonight here on CNN, 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," we'll have the latest on relief efforts to help those who survived the tsunami disaster, including a look at what's being done to locate the thousands of Americans who are still unaccounted for in the region.

Also, special interest groups spending a record $2 billion last year - $2 billion in Washington, lobbying, trying to influence policy on everything from Social Security to drugs and taxes. We'll have a special report for you on the best government money can buy.

And today marks the one-year anniversary that the Rover Spirit touched down on the planet Mars. We'll take a look at the amazing success of the project. I'll be talking with the principal investigator for the mission, Steve Swyers (ph). All of that and a great deal more tonight at 6:00 p.m. Eastern here on CNN. Please join us.

Now back to Judy Woodruff -- Judy.

WOODRUFF: Lou, a question about stories surfacing here today and that is the Bush administration looking at cutting Social Security benefits possibly down the road. In your mind, Lou, is Congress going to be able to pass anything that cuts retirement benefits at any point?

DOBBS: Well, I don't want to equivocate here, Judy. The answer in my opinion is absolutely not. Anyone, Republican or Democrat, who thinks that they are going to have the political capital to cut Social Security benefits is just utterly mistaken. First, there is no crisis in Social Security. The system will be solvent through 2042 at least. This is not an imminent issue and nothing short of a crisis, a fiscal crisis, could build a political tolerance for a cut in benefits. So my judgment is, absolutely not.

WOODRUFF: Sounds like we've got a big battle coming in this city. All right, Lou...

DOBBS: Absolutely, Judy.

WOODRUFF: We'll be hearing about it in the days and weeks to come. Lou, thanks very much.

DOBBS: Thank you.

WOODRUFF: INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE) ANNOUNCER: On Capitol Hill today, a call to order tempered with sadness.

UNIDENTIFIED MALE: The Senate will observe a moment of silence.

ANNOUNCER: With an eye overseas, Congress remembers the victims of December's deadly waves.

And on the stricken shores of Asia, a Bush brother steps into the international spotlight.

GOV. JEB BUSH (R), FLORIDA: I think there's always good when we show our heart as a country.

ANNOUNCER: Jeb Bush in the role of America's goodwill ambassador.

Senators get ready to grill the president's cabinet picks. Attorney General nominee Alberto Gonzales takes the hot seat Thursday and already the knives are out.

UNIDENTIFIED MALE: He has had such an appalling departure from good judgment.

ANNOUNCER: We'll look ahead to the hearings with the judiciary committee's ranking Democrat, Senator Pat Leahy.

Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. Despite logistical hurdles, U.S. aid and supplies are making their way to tsunami victims across South Asia. Early today a cargo plane collided with a water buffalo in the hard-hit area of Banda Aceh, Indonesia. The airport was forced to close for several hours.

The disaster death toll has risen now to more than 155,000. It is still climbing. A meeting of donor nations is scheduled for Thursday in Indonesia to coordinate relief efforts. CNN has correspondents and crews stationed throughout the region. 14 of our reporters and anchors are on duty in four countries.

Here in Washington, the 109th session of Congress convened today with the issue of tsunami relief now among the top priorities for lawmakers.

CNN congressional correspondent Ed Henry is with me now with more -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Judy. With expanded majorities in the House and Senate, Republicans have high hopes of passing President Bush's second term agenda on everything from Social Security reform to an overhaul of the federal tax code. But all of that will have to wait until after the inauguration because for now what is vaulted to the top of the agenda is tsunami relief. After a bit of housekeeping today, of course.

In the Senate, Vice President Cheney was there in order to swear in freshmen and newly-elected senators. A kind of light moment came up when Democratic Senator Patrick Leahy was sworn in for another term. Of course, you will remember that last year, the vice president directed a four-letter word at Senator Leahy. I ran into Vice President Cheney in the hallway a couple hours ago and asked him what happened this time and he said with a smile that they only exchanged pleasantries.

So, obviously everything getting off to a somewhat happy start, but of course it's tempered with the sadness over the tsunami disaster and in fact, over in the House, after being sworn in for another term as speaker of the house, Dennis Hastert gave a speech in which he said that the Congress will rally behind all of the tsunami victims.

(BEGIN VIDEO CLIP)

REP. DENNIS HASTERT (R), HOUSE SPEAKER: Our deepest condolences go to all those who lost loved ones in this terrible event. And just as former presidents Clinton and Bush will join together to coordinate private relief efforts here in the United States, we in the Congress will work together on a bipartisan basis to get the necessary relief to those in need.

(END VIDEO CLIP)

HENRY: And the House and Senate also passing resolutions today expressing their support for President Bush's pledge of a $350 million aid package to the tsunami victims. But those resolutions also leave the door open to Congress expanding the relief package later this month if, in fact, lawmakers make an assessment that they believe it needs to be expanded, that assessment will come after various senators and House members go to the region to actually get a firsthand look. One of those lawmakers is leaving tonight, in fact. It's Senate Majority Leader Bill Frist.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST, (R) MAJORITY LEADER: Medicine, tents, water, bladders, food, all being delivered through the compassion of the international community. We have more than 20 patrol and cargo aircraft that have been made available to assess the disaster and deliver relief supplies. 12,000 of our men and women in uniform are working around the clock right now to reach survivors in remote corners of the region and to participate in the delivery of that relief.

(END VIDEO CLIP)

HENRY: Senators Max Baucus and Chuck Grassley announced today that they will introduce legislation allowing U.S. taxpayers to claim a tax deduction in the year 2004 for any donations they make for tsunami relief through January 31st of 2005, since the disaster happened so late in the last tax year. Even amid all of that bipartisanship, though, today, the new Senate Democratic Leader Harry Reid put out a statement blasting the president's plan for possibly cutting Social Security benefits. Judy, it's a sign that even amid some of this bipartisanship over tsunami relief, there are some major political battles ahead -- Judy.

WOODRUFF: No doubt. All right. Thank you very much. We appreciate it.

Well, Secretary of State Colin Powell and Florida Governor Jeb Bush are now in Indonesia. The two men arrived in the region yesterday, where they got a firsthand look at some of the damage in Thailand.

CNN's John King is traveling with Powell and Bush. He spoke with the Florida governor about U.S. relief efforts and the massive scale of the tsunami disaster.

(BEGIN VIDEO CLIP)

BUSH: There are literally hundreds of organizations that provide international relief. And they need the help of Americans that want to act on their heart to help people in this part of the world. And so I thought it was appropriate for the president to launch that initiative, as well as the government-to-government help.

JOHN KING, CNN CORRESPONDENT (on camera): Have you ever seen anything like this?

BUSH: Never. Never have. And this doesn't represent all of the people that are missing. It's pretty amazing.

(END VIDEO CLIP)

WOODRUFF: Still breaks your heart. You can stay with CNN for up-to-the-minute updates on the tsunami disaster. Some of our networks' top journalists are in the region to cover the still developing story. Their reports will be featured every night this week in CNN's live primetime special report, "Turning the Tide." That is every night this week beginning at 7:00 Eastern.

As we've heard, getting aid to tsunami victims is a major priority for the new Congress. When we return, Senator Patrick Leahy will be with us from Capitol Hill to talk more about what the U.S. government is doing to help the disaster victims.

Plus, some strong opposition to President Bush's Social Security reform plan has already surfaced. We'll get details from our Bill Schneider.

(COMMERCIAL BREAK)

WOODRUFF: Congress and President Bush have joined hands to offer help to the tsunami devastated region of south Asia. But is the United States doing enough? Senator Patrick Leahy is with me now from Capitol Hill to talk about the American aid effort and he'll weigh in on another important issue in the president's second term, judicial nominations. Senator Leahy, first of all you were one of those initially criticizing the Bush administration for not moving fast enough. Is the administration doing enough now?

SEN. PATRICK LEAHY (D), VERMONT: The administration is doing the right things now. I had been concerned earlier when they offered $15 million. I thought in this part of the world, the disaster, the nature of it, it just really made no sense at all and we have a chance to show the goodwill, the generosity of the American people, which is enormous, to the Muslim world, to others in there, that the president is taking the right steps now. I was very pleased when he asked his father, former president Bush and former president Clinton to join together.

I think that demonstrates to the rest of the world, this is not a political or partisan thing, that America is really united. And I go to my own church, I hear people talking about the money they're raising for this. You hear it on the streets. You hear it everywhere else. The American public want to help. They will help. America has the ability to bring the help if we -- if we tap into what our real resources are.

WOODRUFF: Senator, what about where the government money is coming from? Are you worried that other international aid programs may suffer as a result of this?

LEAHY: It seems almost like arcane bookkeeping. What they're taking the money from right now is other disaster money. I think that's a mistake because disasters happen all the time and the United States should be able prepared to respond quickly. We're blessed with the greatest material wealth of any the nation in history. Part of those blessings are that we should show responsibility for those in need. I would hate to see money taken from aid, drought aid or famine aid in Africa to be used here. We have plenty of money. We set aside nearly $18 billion in Iraq for reconstruction that, at best, won't be spent for years. We could use some of that now and then go back and replenish that if we want to later on. But I would hate to see us rob Peter to pay Paul. We should be prepared to help out where disasters occur, whether it's famine in Africa, tsunamis in the Indian Ocean. I think we can do it. We definitely have the resources to do it. I want to make sure that we're prepared to do it.

WOODRUFF: Do you think these U.S. efforts are going to help the image of the United States in the world?

LEAHY: I think we're repairing our -- the initial mistakes when we didn't move quickly. Now they see us coming in. I think the more we're prepared to be there, to do the basic needs today, getting water, getting medical care, getting shelter to the people but then to stay afterward and help rebuild areas that have been terribly devastated. This is where the goodness of America comes. This is where all of our private organizations come. That, I think, can help with the image of America. I also think sending former president Bush and president Clinton both of them are respected abroad. That helps. WOODRUFF: Senator, another subject you're involved in this week is the ranking Democrat on the Senate judiciary committee. There are confirmation hearings coming up for Alberto Gonzales to be the next attorney general. A dozen high-ranking military officials have signed a letter expressing deep concern over his nomination. Is that going to have an effect on the committee?

LEAHY: I think it will have an effect because we have asked and have been asking for nearly a year now, his involvement in memos or his acquiescence in memos on the question of torture and all. I assume he abhors torture like everybody else but we're going to ask was his involvement in these memos something that allowed this torture to go forward. If it was, then it was a disastrous mistake.

WOODRUFF: And Senator, the fact that the Justice Department has revised the definition of torture, does that take some of the heat off on this issue?

LEAHY: You know, I'd love to applaud them for changing the definition of torture. The fact that they do it on a holiday weekend just before the Gonzales hearing, it makes you wonder was this political or do they mean it? I mean, the Bush administration could have revised this definition of torture a long, long time ago and should have.

WOODRUFF: Senator, one last quick question. You were sworn in today for another term by the vice president of the United States, Dick Cheney. We know the two of you exchanged a rather heated, I guess, heated exchange a few months ago. There was profanity, I guess, used in that exchange.

LEAHY: Not by me.

WOODRUFF: No, we know that. How did it go today between you and the vice president?

LEAHY: Well, of course, cordial. But I've always felt it's better to be sworn in than to be sworn at.

WOODRUFF: All right. That's a line we're going to remember. Senator Patrick Leahy of Vermont, thank you very much. We appreciate it.

We'll get the vice president's comment on that first chance we get.

Millions of Americans do get a Social Security check every month. Now in the new year, a battle brewing over President Bush's plan to overhaul the system. Details straight ahead.

(COMMERCIAL BREAK)

WOODRUFF: Reforming Social Security is a large part of President Bush's second term agenda. On this first day of the new Congress, some critics of the president's plans are already on the attack. Now CNN's senior political analyst, Bill Schneider. (BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Today the first shot was fired in what is shaping up as this year's big political battle, Social Security. The shot came from the AARP, which started a $5 million ad campaign opposing President Bush's idea to give retirees the option of private Social Security accounts. The ad talks about risk and social insecurity.

DAVID CERTNER, AARP DIR. OF FEDERAL AFFAIRS: We want to send a clear and unmistakable message about what is potentially out there to harm Social Security and where AARP stands on it.

SCHNEIDER: Their opponents charge...

ELIZABETH VARLEY, SECURITIES INDUSTRY ASSN. It looks like they're trying to scare people.

SCHNEIDER: But supporters of private accounts say scary things, too.

VARLEY: If we don't take steps now to try and reform this program, doing nothing is going to be even more costly.

SCHNEIDER: What fuels the reform movement is the view that Social Security is headed for trouble.

SEN. JOE LIEBERMAN (D), CONNECTICUT: In the long run, Social Security is not sustainable. There's not enough money going in to pay the benefits that people deserve.

SCHNEIDER: But money invested in private accounts will not be available to pay current benefits.

CERTNER: The idea of turning Social Security into private accounts or privatizing the system has nothing to do with addressing the issue of solvency.

SCHNEIDER: What does the playing field look like? In a word, flat. The public is split right down the middle. Americans under 50 like the idea of private Social Security accounts. Those over 50, don't. They feel more dependent on Social Security and don't want to take money out of the system. Their fears are being heightened by the news that the government is considering changing the formula to reduce benefit levels for future retirees to which supporters of private accounts say...

SEN. BILL FRIST (R), MAJORITY LEADER: We need to remember that you can have access to these personal accounts which will grow much faster than either prices or wages.

SCHNEIDER: It's a battle of fears. On the one hand, fears about the security of the system. On the other hand, fears about benefit cuts.

(END VIDEOTAPE) (on camera): And, a third fear, the economy. One side warns that not fixing the program now will create huge budget obligations to retirees and that will endanger economy. The other side warns that diverting Social Security accounts into private accounts will increase the deficit and that will endanger the economy -- Judy.

WOODRUFF: You're placing bets on either side at this point, Bill?

SCHNEIDER: I think it will be a tough battle but I'm not willing to bet right yet.

WOODRUFF: We'll keep checking back with you. Bill Schneider, thanks very much.

The Social Security battle is certain to be an intense one. CNN political analyst Ron Brownstein of the "Los Angeles Times" is with me now to talk a little more about president's reform plan. First of all, Ron, how much is at stake for the president here?

RON BROWNSTEIN, "LOS ANGELES TIMES": I think he has made clear, this is going to be his top domestic priority of the second term. I've talked to people who have spoken with him and says that he expresses a passion on this matched only by his desire to bring democracy to the Mideast. And so I think this is something they are truly going to finally, after many years of talking about it, fight out and see if they can build a support for major restructuring.

WOODRUFF: Well, the thing that was floated today, you're very aware of it is that they're now thinking and seriously about basing future benefits on the rate of inflation rather than on an individual's wages because this would save the government a lot of money. Is this something that can fly?

BROWNSTEIN: Well, that is a very good question. It's not totally surprising to hear the White House talking about this because it was essential element of the principle plan put forward by the commission that he endorsed and I think a lot of people have assumed for a while this would be part of the White House plan. Basically, the issue here is what -- to what extent will Social Security replace the wages of workers when they retire. What the administration and supporters of this idea argue is that it will not mean a cut in benefits from today because benefits would still rise from where they are today but they wouldn't rise nearly as much as they would under current law and they wouldn't replace nearly as much of a worker's wages as they do now. And as a result, what the administration says, of course, is well, they will have the potentially individual account that can make up some of the difference and most Democrats are probably going to argue is that this is a cut too big, it's not needed to bring the system into stability.

WOODRUFF: Earlier talking to Lou Dobbs about this, he said he thinks it could be very tough for the administration to get anything through Congress that cuts future benefits no matter how far down the line. But we know the administration is going to be pushing a big PR plan to sell this, what are their chances of success? BROWNSTEIN: I would say a couple of things. I agree with Bill. It's hard to say for sure right now. Tough, yes. Impossible, no. There are a lot of Democrats who feel that the party simply cannot be in a position of saying no to any changes on Social Security. And if you do nothing, Judy, in addition to the question of the financing gap between the payroll tax revenue and the promised benefits there's the issue of how much of the federal budget goes to the elderly over time. Social Security, Medicare and Medicaid as the baby boom retires and medical costs increase, could increasingly squeeze out programs that Democrats care about as well for children and families and so forth.

So there may be some Democrats as well looking for ways to constrain the long-term growth of all of these programs and that provides a basis for discussion.

WOODRUFF: AARP, the Association of Retired Persons, was with the administration last year on Medicare tax -- on Medicare prescription drugs. They are now against the administration on a big chunk of this. How much is that going to play into it?

BROWNSTEIN: That's a big problem. And not surprisingly. They're an interest group that wanted more benefits from Medicare. They're resistant to changing Social Security. There are two separate issues here that people have to keep in mind as we move forward. One is how do we close the long-term financing gap in Social Security and that's where you get into this benefit cut issue. The other is do we want to set up individual investment accounts as part of the system and how would we fund that if we did. These two things are going to converge a lot in the public debate and can inflate in the public mind but they're separate issues and they're both having to solve both at once makes this more complicated for the president.

WOODRUFF: And then you have the whole debate over how much is the whole thing in crisis or not and we can talk about that...

BROWNSTEIN: Another time.

WOODRUFF: All right. Ron Brownstein, thank you very much.

It happened before, it is bound to happen again. Coming up next, a look at how Capitol Hill lawmakers react when colleagues step over the line separating right from wrong.

(COMMERCIAL BREAK)

WOODRUFF: As we mentioned the Republican dominated 109th session of Congress convened for the first time today. One of the big issues in the House is an attempt by Republicans to change ethics rules prompted by an investigation of Majority Leader Tom DeLay. Our Bruce Morton looks back at other ethics battles.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Congressional ethics is, well, cyclical. Back in 1989 the Democrats were the majority party and their speaker Jim Wright was charged with 69 rules violations including getting around outside income limits with a book deal.

REP. JIM WRIGHT (D), HOUSE SPEAKER: Both political parties must resolve to bring this period of mindless cannibalism to an end. We've done enough of it.

MORTON: Wright resigns. Newt Gingrich who brought the charges against Wright led the Republicans to victory in 1994 campaigning on the contract with America which promised to restore accountability to Congress and end its cycle of scandal and disgrace. But Gingrich drew a House reprimand, paid a fine and finally resigned.

This year's controversy has centered around the Republican Majority Leader Tom DeLay.

REP. TOM DELAY (R), MAJORITY LEADER: I understand the Democrat party's adjustment to their national minority status is frustrating. But their crushing defeat in the elections earlier this month after two more years of Democrat obstruction and vicious personal attacks should show them that the American people are tired of the politics of personal destruction.

MORTON: That's what Bill Clinton used to say when he was being impeached. In the House, though, the majority party usually wants its way, whatever the rules say. Bob Michel long-time Republican minority leader remembers.

BOB MICHEL (R), FMR. HOUSE MINORITY LEADER: Well, that's true. And I have some reservations about an unbridled majority that runs rough shot off over the minority. Let's face it, my 38 years in the House was all in the minority so I know how distasteful it is to be there.

THOMAS MANN, BROOKINGS INSTITUTION: It's amazing how moving from minority to majority status alters the outlook of a political party. Much of what the Republicans said they wanted to do to clean up the House of Representatives has disappeared from their agenda.

MORTON: Maybe some rules left others unchanged. But, hey, it's a complicated process.

WRIGHT: I'm convinced that I'm right. Maybe I'm wrong.

MORTON: Got it? Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: We remember those days. That's it for INSIDE POLITICS. Thank you, Bruce. I'm Judy Woodruff. We thank you 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 January 4, 2005 - 15:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
ANNOUNCER (voice-over): An outpouring of aid for tsunami victims. Will American relief efforts win hearts and minds?

COLIN POWELL, U.S. SECRETARY OF STATE: But I think it does give the Muslim world and the rest of the world an opportunity to see American generosity, American values in action.

ANNOUNCER: The tsunami disaster hits home.

J. ADAM ERELI, STATE DEPARTMENT SPOKESMAN: There a large number of Americans that are unaccounted for and that we're trying to track down.

ANNOUNCER: What's Washington doing to help find those still missing?

A bitter House battle over ethics.

UNIDENTIFIED MALE, U.S. REPRESENTATIVE (PH): The Democrats have decided that they're going to use politics of personal destruction to gain power. And what we are doing are protecting ourselves from those assaults.

UNIDENTIFIED MALE, U.S. REPRESENTATIVE (PH): The changes being proposed by House Republican leaders would constitute the biggest backtracking we have ever seen on ethic standards in the House.

(END VIDEO CLIP)

ANNOUNCER: Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

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

U.S. Marines have landed in Sri Lanka to assist with relief and recovery efforts from the tsunami disaster. And right here in Washington, the crisis overseas was among the first orders of business for the new session of Congress.

Among the new developments in the disaster zone, the Marines are bringing bulldozers, generators, food and medical supplies with them to the region. Up to 1,200 Marines are expected in the area by tomorrow. Secretary of state, Colin Powell, and Florida governor, Jeb Bush, arrived in Indonesia today after touring damaged areas in Thailand on Monday. Governor Bush said the most pressing need in Thailand is simply help in identifying the dead.

The number of people killed in the disaster has climbed to more than 155,000. That number is expected to continue rising.

Indonesia's death toll stands at 94,000, and thousands more still are missing.

CNN has correspondents and crews stationed throughout the region. Fourteen of our reporters and anchors are on duty in four countries.

Here in the nation's capital, the members of the 109th Congress took up the issue of tsunami aid just moments after they took office. Vice President Dick Cheney was on hand to swear in the 34 who were elected in November.

Majority Leader Bill Frist, who is heading to the disaster region later today, said that the U.S. effort to help those in need is just getting started.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R), TENNESSEE, MAJORITY LEADER: By their own initiative, private individuals and charities, nongovernment organizations and businesses have raised millions of dollars to aid the tsunami victims.

I am filled with admiration for the compassion demonstrated by our fellow citizens.

(END VIDEO CLIP)

WOODRUFF: We'll have much more on the first day of the new Congress a little later in the program.

Overseas, Secretary of State Powell and Florida Governor Jeb Bush have arrived in Indonesia after an earlier stop in Thailand.

CNN's John King is traveling with them as they survey the tsunami damage.

(BEGIN VIDEOTAPE)

JOHN KING, CNN WHITE HOUSE CORRESPONDENT (voice-over): At Phuket, a first-hand update on the tsunami relief effort and an acknowledgement the challenge in Thailand is far different than in poorer and more remote areas harder hit.

POWELL: I will go back and see if there is not more we can do, has to do with identification of remains, forensic activity, forensic pathology.

KING: Secretary Powell and Florida Governor Jeb Bush were briefed on efforts to track down reports of Americans still unaccounted for. And the president's brother visited the makeshift wall where family members of the many more missing Europeans and Asians appealed for help.

GOV. JEB BUSH (R), FLORIDA: This breaks my heart that we talk about how in Thailand the number -- the damage -- was less than Indonesia. But put into perspective, thousands of people lost their lives here from all over the world -- half of them from Thailand, half of them from the rest of the world.

And it was more than the number of people that were killed on September 11.

KING: Flying into Phuket it was clear the damage here is significant but in isolated pockets. Some 4,000 people are still listed as missing.

And Thailand's foreign minister said additional search planes and forensics teams are critical to the now fading hopes of getting a reliable count of the victims and their nationalities.

SURAKIART SATHIRATHAI, THAI FOREIGN MINISTER: We have to wait for the final data analysis and comparison to be able to know exactly who are the Thais, who are foreigners.

KING: Looking past the immediate relief effort, Thailand's prime minister pledged $20 million to develop a tsunami early warning system for his country.

Secretary Powell said talks Thursday in Jakarta and later this month in Japan will aim for a broader system covering the Indian Ocean and the South China Sea.

From Thailand, it was on to Indonesia where the destruction is worse and where Secretary Powell sees the relief effort as a possible antidote to deep anti-American sentiment.

POWELL: But I think it does give the Muslim world and the rest of the world an opportunity to see American generosity, American values in action.

KING (on camera): First in Thailand and then here in Indonesia, officials thanked the United States for what they called prompt and generous aid, statements Secretary Powell says prove wrong those who rushed to criticize the Bush White House within hours and days after the tsunami.

John King, CNN, Jakarta.

(END VIDEOTAPE)

WOODRUFF: Among the members of Congress heading to the disaster region is Representative Chris Smith of New Jersey. Congressman Smith joins me now from Capitol Hill.

Congressman, as I understand it, your going to be arriving this weekend. It will be at that point, almost two weeks since the disaster. At that point, what are you going to be looking for?

REP. CHRIS SMITH (R), NEW JERSEY: Well, we're going to be looking at the assess -- we're going to be doing an assessment of the immediate and the immediate needs that are needed by the people.

You know, we know that there is a very serious crisis with water and waterborne diseases, diarrheal diseases -- on any given day, the leading killer of children around the world when you have a situation where the water has been -- become -- so contaminated.

We want to make sure that clean drinking water and whatever immunizations are necessary and medicines to mitigate disease in that area so there is no big break out of various diseases.

And I think the most vulnerable populations, women and children, will be part of our assessment. It's a bipartisan effort that's being made. Of course, the executive branch is doing their assessment, and we're all working as a team to make sure that the suffering can be lessened.

WOODRUFF: Do you assume, congressman, that the amount of U.S. aid is going to increase?

SMITH: I think you can take that to the bank. Not only U.S. foreign aid but I think global foreign aid from the European Union, from Japan and from other interested countries will have to ratchet up significantly.

And I think the American people have demonstrated through their private, voluntary giving to groups like Catholic charities, Catholic relief organizations and the like are showing that they're willing to step up to the plate.

And I think other citizens around the world need to be contributing to their NGOs as well because that will only augment the ability of those nongovernmental organizations working with governments, again, to pick out needs and remedy those needs because they're overwhelming at this point.

But the intermediate and the longer-term needs, we're in this for the long haul. And I'm very proud of the job that President Bush and Colin Powell have done with regards to the response.

Our military and our USAID people are working in a splendid fashion.

Judy, I was there when "Operation Provide Comfort" was initiated, and our military literally save thousands of lives by being first on the spot when the Kurds were making their way to the Turkish border.

In like manner, the military is performing with great distinction. And the baton increasingly will be passed off to the nongovernmental organizations for a sustained and sustainable effort to mitigate the suffering.

WOODRUFF: But again, with the rising cost of the war in Iraq, you know, another hundred billion we're hearing the administration is going to ask for this year. You've got domestic priorities.

Any doubt in your mind the U.S. can afford this?

SMITH: We have to afford it. There are so many lives at risk, so many lives that have been lost, maybe upwards of 4,000 or more missing Americans, who were there when the tsunami hit.

We should leave no stone unturned in tangible deeds to, again, to help people and to show our compassion in a tangible way.

WOODRUFF: Very quickly, congressman, it has been suggested by a couple of senators, Democrat, Max Baucus, Republican, Chuck Grassley that the private contributions Americans are making be deductible on their 2004 tax returns, allowed up until January 31.

Is that a good idea?

SMITH: I think it's a great idea. I think that will invite even additional contributions. And again, those who have already made such generous donations to this relief effort ought to be rewarded. They ought to be told that you did the right thing.

They know it in their hearts. But the government needs to give them a pat on the back and say, well done, and we're all in this together.

And I do think the world is seeing America at its best, as well. And we are working with the other countries of the world, again, to alleviate unbelievable suffering and, again, I think we're making a Herculean effort.

So I'm very proud of the job that we're doing. And again, this is another opportunity for bipartisanship, to put away those partisan labels and say, let's roll up our sleeves and work on this together for these people.

WOODRUFF: Congressman Chris Smith of New Jersey, heading to the region this weekend.

Congressman, thank you again very much.

SMITH: Thank you, Judy.

WOODRUFF: We appreciate it.

Well, many Americans are still missing or unaccounted for in the tsunami disaster. The state department says about 4,000 reports of missing Americans remain for more than 20,000 calls that came into hot lines and U.S. embassies right after the disaster.

(BEGIN VIDEO CLIP)

ERELI: We're working systematically with immigration authorities, with local relief officials, with airlines to try to get as much clarity and definition on the whereabouts of the very large number of Americans who were reported in the region affected so that we can determine exactly where they are and what their status is.

(END VIDEO CLIP)

WOODRUFF: We at CNN would like to find out about your efforts to locate missing friends or relatives who were in the tsunami-stricken region. Please call CNN at 404-878-1500.

Our phone line is going to be open from 8:00 a.m. to 5:00 p.m. Eastern. At other times, the phone line will connect you to voice mail.

CNN has dispatched, by the way, many of our most seasoned journalists to the front lines of this still developing story. Their reports will be featured every night this week in CNN's live, primetime special report, "Turning the Tide."

That is every night this week beginning at 7:00 Eastern.

And we'll have much more on the tsunami tragedy later on INSIDE POLITICS.

Coming up, one day after they volunteered, two former presidents are already scoring big when it comes to raising disaster relief funds.

But next, Congress gets back to work -- and in the House, a clash over ethics. Why did Republican leaders back down over watering down the way they police themselves?

Plus, another violent day in Iraq -- do these daily attacks threaten to postpone national elections planned for later this month?

(COMMERCIAL BREAK)

WOODRUFF: After a holiday break, members of the U.S. House and Senate are back here in Washington. The 109th session of Congress convened today with 41 new members, and Republicans have a bigger say in the decision making.

The Senate now has 55 Republicans. That's an increase of four seats.

In the House, the GOP now has 232 seats. For them, that's an increase of three.

On this first day of the new session, ethics reform was one of the major topics in the House.

Here now, CNN congressional correspondent, Joe Johns.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Faced with a growing backlash over ethics, House Republicans retreated from attempts to change the way they police themselves, starting with a rule they have already adopted allowing their leaders to keep their positions even if under indictment.

House majority leader, Tom DeLay, whose political activities are under investigation in Texas, personally proposed reversing that rule to the relief of some of his colleagues.

REP. ZACH WAMP (R), TENNESSEE: It was a dumb, political thing to do, and now they've retreated from it, which I think is a bold move showing that they're a leadership team that is not arrogant, or obstinate or pigheaded.

JOHNS: DeLay has not been indicted and denies wrongdoing.

Some House Republicans said they got an earful from constituents who said Congress was watering down ethics rules.

Republicans also abandoned two separate and controversial changes to ethics rules, which critics charge would have gutted House standards by limiting enforcement of the congressional code of conduct.

The Republican chairman of the ethics committee in the last Congress also weighed in, issuing a statement saying, "Ethics reform must be bipartisan, and this package is not bipartisan."

Still, House Republicans opted to accept one rule allowing complaints against members to die after 45 days unless at least one Republican on the committee agrees that it merits investigation.

REP. DAVID DRIER (R), RULES COMMITTEE CHAIRMAN: We want to make sure that there is a presumption of innocence. We want to make sure that members have due process, that in no way, GB (ph), undermines the opportunity for the ethics committee to do its work.

JOHNS: But Democrats in watchdog groups say the new rule would allow dismissal of legitimate complaints. The committee is composed of 10 members from each party, equally divided, which numerically is already a recipe for deadlock.

MELANIE SLOAN, ETHICS ACTIVIST: In the partisan atmosphere that infects the House, it is going to be nearly impossible for the ethics committee to vote to investigate any particular member.

(END VIDEOTAPE)

JOHNS: Republicans at first argued the current rules benefit political aggressors who file politically motivated charges. On the other hand, at the end of the day, they apparently concluded that some of the changes were not worth the political price -- Judy?

WOODRUFF: Evidently that's what happened. OK. Thank you, Joe.

Well, with less than a month to go until election day in Iraq, violence there remains a serious problem. Today, insurgents killed the governor of Baghdad Province and one of his bodyguards in a road ambush in the Iraqi capital.

The governor had survived a previous assassination attempt just four months ago.

Four U.S. soldiers and one Marine were also killed today in three separate attacks. There is also word of a grim milestone for U.S. troops. The Pentagon says the number wounded since the start of the war now has topped 10,000.

CNN's Dana Bash is with us from the White House with reaction to these latest developments in Iraq.

Hi, Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Judy.

Well, the White House is condemning the assassination of Baghdad provincial governor in the strongest of terms, but they are continuing to say here that they do not think that nor the other violence in Iraq should delay the elections set for just 26 days from now.

Now, Iraq's interim prime minister, Ayad Allawi, called President Bush yesterday to discuss, according to the White House, the security situation and Iraqi elections.

That call raised some eyebrows because the White House didn't tell reporters about it until after it was in a published report. Bush officials, though, insist that it was not a call of alarm, that there was no discussion, according to the White House, about delaying the elections.

And as one official familiar with the conversation said to CNN, Allawi was, "not going wobbly" when it comes to the elections. And they are, of course, saying that they understand that this is going to be a defining moment in the Bush foreign policy legacy, if you will -- these elections. And they want to make sure that it goes well.

Having said that, they understand that there are some Iraqi officials who do think and are saying publicly that the elections should be delayed because of concerns of security, because of concerns about Sunni participation.

They're really trying to walk a fine line here, Judy, between saying that they don't want these elections delayed but also again and again trying to make it clear that it's not the American process that matters, it's the Iraqi process.

So, it's a very fine line that they are continuing to walk, and perhaps could get even harder as we get closer to the elections.

WOODRUFF: No doubt it will. I know that some Republicans we're talking to who have just been in the region having serious questions about whether those elections can take place.

Dana, I want to ask you about the news yesterday out of the White House, the president naming his father, former President George H.W. Bush and former president, Bill Clinton, to head up an effort to raise private money for tsunami relief.

How is that effort going?

BASH: Well, Judy, that was, obviously, an effort by the White House to raise the president's profile, to show that he is very concerned. The White House, Judy, is doing that again today.

They announced that Mr. Bush got a phone call from the secretary of state and his brother, Florida's governor, who, of course, are traveling in the region to give him an update on what they're learning there, even releasing a photo, that you see there.

And on -- in terms of the effort by the two former presidents, they announced here at the White House that the Web site that the two presidents have been talking about on television, the USA Freedom Corp Web site has gotten more than 100,000 hits since the two presidents signed on.

That compares with an average of about a little more than 5,000 per day in the last year. So the White House is certainly saying that they have raised awareness.

But they do admit, Judy, this particular effort is going to be nearly impossible to track in terms of its success because they are simply telling Americans to go to private organizations to give, and that is very hard to keep track of.

We did hear from President Clinton, that he was talking with former President Bush about the fact that he carries a BlackBerry and that he immediately got a pledge of a $1 million.

President Clinton said that he saw the same kind of response to him, personally.

As far as President Bush goes, I can tell you, Judy, that he personally has not given yet. The White House says he's looking into what organizations to give to. And they have promised he will give a significant amount -- Judy?

WOODRUFF: Well, I know you'll be reporting on that when you find out. We also know, Dana, those private organizations are raising in the millions. We've been seeing some early numbers from them.

Dana, thank you very much.

Christmas greetings for Democrats from a potential, presidential hopeful. Up next, John Edwards expanded his greeting card list. Details on his bulk mailings to New Hampshire in our "Political Byte."

(COMMERCIAL BREAK)

WOODRUFF: Today's "Political Bytes" remind us that it's never too early to cultivate support in New Hampshire. Granite state sources are telling CNN "Morning Grind" that former democratic, presidential running mate, John Edwards, has been making calls to state party leaders.

Edwards also sent Christmas cards to state party activists. And as we have reported, he has agreed to speak in Manchester early next month.

In Florida, election officials say almost two-thirds of the provisional ballots cast on election day were not counted, mostly because the voters were not registered. "Tallahassee Democrat" reports about 7 percent of the ballots were tossed because voters had been purged from the rolls for not voting in recent years or for being ex-felons.

Republicans in Washington state appear be gathering evidence for a possible challenge to that state governor's election. Party officials point to records that show 8,500 more ballots than voters who were listed in five counties.

After two recounts, Democrat, Christine Gregoire, was certified as the winner over Republican, Dino Rossi, by just 129 votes.

And we have another update on the race for Democratic Party chairman. Long time party activist, Harold Ickes has decided not to run for the post. Yesterday it was reported that centrist party activist, Simon Rosenberg, will enter the DNC race.

It could be the biggest political battle this new year. Next up, the first shots are fired in the fight over reforming social security. Will your benefits be cut if these changes are passed?

Plus, much more on the tsunami disaster. I'll speak with a senior, Senate Democrat about U.S. relief efforts.

(COMMERCIAL BREAK)

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

Hi, Lou.

LOU DOBBS, CNN HOST: Judy, how are you doing?

Thank you. Another broad sell-off today on Wall Street. The pace of selling picking up after the federal reserve raised some inflation concerns. As the final trades are now being counted, the Dow Jones industrials down almost 100 points, off right now 97.24. These trades being consolidated in the final minutes. The Nasdaq is two percent lower on the day. Oil prices up nearly two dollars a barrel, that after Saudi Arabia confirmed it will cuts its production as promised.

And the Fed today said inflation is becoming a larger concern for the economy. The Fed had downplayed rising prices after its policy meeting last night. But the Fed's minutes released today on that meeting show policy-makers were, indeed, more concerned than they let on publicly. Fed members concerned the dollar's depreciation against other currencies and soaring energy costs will push prices higher. Now, economists widely expecting another quarter percent increase in the Fed's interest rates when it meets again in early February. And while the tsunami caused a dramatic loss of life, the economic impact is considered by many experts to be surprisingly small. Most major ports and manufacturing zones in the region not damaged by the tsunami, despite the devastating broad scale of loss of life. An economist saying that disaster is expected to cut only a few tenths of a percentage point off the economic growth of the region.

Coming up tonight here on CNN, 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," we'll have the latest on relief efforts to help those who survived the tsunami disaster, including a look at what's being done to locate the thousands of Americans who are still unaccounted for in the region.

Also, special interest groups spending a record $2 billion last year - $2 billion in Washington, lobbying, trying to influence policy on everything from Social Security to drugs and taxes. We'll have a special report for you on the best government money can buy.

And today marks the one-year anniversary that the Rover Spirit touched down on the planet Mars. We'll take a look at the amazing success of the project. I'll be talking with the principal investigator for the mission, Steve Swyers (ph). All of that and a great deal more tonight at 6:00 p.m. Eastern here on CNN. Please join us.

Now back to Judy Woodruff -- Judy.

WOODRUFF: Lou, a question about stories surfacing here today and that is the Bush administration looking at cutting Social Security benefits possibly down the road. In your mind, Lou, is Congress going to be able to pass anything that cuts retirement benefits at any point?

DOBBS: Well, I don't want to equivocate here, Judy. The answer in my opinion is absolutely not. Anyone, Republican or Democrat, who thinks that they are going to have the political capital to cut Social Security benefits is just utterly mistaken. First, there is no crisis in Social Security. The system will be solvent through 2042 at least. This is not an imminent issue and nothing short of a crisis, a fiscal crisis, could build a political tolerance for a cut in benefits. So my judgment is, absolutely not.

WOODRUFF: Sounds like we've got a big battle coming in this city. All right, Lou...

DOBBS: Absolutely, Judy.

WOODRUFF: We'll be hearing about it in the days and weeks to come. Lou, thanks very much.

DOBBS: Thank you.

WOODRUFF: INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE) ANNOUNCER: On Capitol Hill today, a call to order tempered with sadness.

UNIDENTIFIED MALE: The Senate will observe a moment of silence.

ANNOUNCER: With an eye overseas, Congress remembers the victims of December's deadly waves.

And on the stricken shores of Asia, a Bush brother steps into the international spotlight.

GOV. JEB BUSH (R), FLORIDA: I think there's always good when we show our heart as a country.

ANNOUNCER: Jeb Bush in the role of America's goodwill ambassador.

Senators get ready to grill the president's cabinet picks. Attorney General nominee Alberto Gonzales takes the hot seat Thursday and already the knives are out.

UNIDENTIFIED MALE: He has had such an appalling departure from good judgment.

ANNOUNCER: We'll look ahead to the hearings with the judiciary committee's ranking Democrat, Senator Pat Leahy.

Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. Despite logistical hurdles, U.S. aid and supplies are making their way to tsunami victims across South Asia. Early today a cargo plane collided with a water buffalo in the hard-hit area of Banda Aceh, Indonesia. The airport was forced to close for several hours.

The disaster death toll has risen now to more than 155,000. It is still climbing. A meeting of donor nations is scheduled for Thursday in Indonesia to coordinate relief efforts. CNN has correspondents and crews stationed throughout the region. 14 of our reporters and anchors are on duty in four countries.

Here in Washington, the 109th session of Congress convened today with the issue of tsunami relief now among the top priorities for lawmakers.

CNN congressional correspondent Ed Henry is with me now with more -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Judy. With expanded majorities in the House and Senate, Republicans have high hopes of passing President Bush's second term agenda on everything from Social Security reform to an overhaul of the federal tax code. But all of that will have to wait until after the inauguration because for now what is vaulted to the top of the agenda is tsunami relief. After a bit of housekeeping today, of course.

In the Senate, Vice President Cheney was there in order to swear in freshmen and newly-elected senators. A kind of light moment came up when Democratic Senator Patrick Leahy was sworn in for another term. Of course, you will remember that last year, the vice president directed a four-letter word at Senator Leahy. I ran into Vice President Cheney in the hallway a couple hours ago and asked him what happened this time and he said with a smile that they only exchanged pleasantries.

So, obviously everything getting off to a somewhat happy start, but of course it's tempered with the sadness over the tsunami disaster and in fact, over in the House, after being sworn in for another term as speaker of the house, Dennis Hastert gave a speech in which he said that the Congress will rally behind all of the tsunami victims.

(BEGIN VIDEO CLIP)

REP. DENNIS HASTERT (R), HOUSE SPEAKER: Our deepest condolences go to all those who lost loved ones in this terrible event. And just as former presidents Clinton and Bush will join together to coordinate private relief efforts here in the United States, we in the Congress will work together on a bipartisan basis to get the necessary relief to those in need.

(END VIDEO CLIP)

HENRY: And the House and Senate also passing resolutions today expressing their support for President Bush's pledge of a $350 million aid package to the tsunami victims. But those resolutions also leave the door open to Congress expanding the relief package later this month if, in fact, lawmakers make an assessment that they believe it needs to be expanded, that assessment will come after various senators and House members go to the region to actually get a firsthand look. One of those lawmakers is leaving tonight, in fact. It's Senate Majority Leader Bill Frist.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST, (R) MAJORITY LEADER: Medicine, tents, water, bladders, food, all being delivered through the compassion of the international community. We have more than 20 patrol and cargo aircraft that have been made available to assess the disaster and deliver relief supplies. 12,000 of our men and women in uniform are working around the clock right now to reach survivors in remote corners of the region and to participate in the delivery of that relief.

(END VIDEO CLIP)

HENRY: Senators Max Baucus and Chuck Grassley announced today that they will introduce legislation allowing U.S. taxpayers to claim a tax deduction in the year 2004 for any donations they make for tsunami relief through January 31st of 2005, since the disaster happened so late in the last tax year. Even amid all of that bipartisanship, though, today, the new Senate Democratic Leader Harry Reid put out a statement blasting the president's plan for possibly cutting Social Security benefits. Judy, it's a sign that even amid some of this bipartisanship over tsunami relief, there are some major political battles ahead -- Judy.

WOODRUFF: No doubt. All right. Thank you very much. We appreciate it.

Well, Secretary of State Colin Powell and Florida Governor Jeb Bush are now in Indonesia. The two men arrived in the region yesterday, where they got a firsthand look at some of the damage in Thailand.

CNN's John King is traveling with Powell and Bush. He spoke with the Florida governor about U.S. relief efforts and the massive scale of the tsunami disaster.

(BEGIN VIDEO CLIP)

BUSH: There are literally hundreds of organizations that provide international relief. And they need the help of Americans that want to act on their heart to help people in this part of the world. And so I thought it was appropriate for the president to launch that initiative, as well as the government-to-government help.

JOHN KING, CNN CORRESPONDENT (on camera): Have you ever seen anything like this?

BUSH: Never. Never have. And this doesn't represent all of the people that are missing. It's pretty amazing.

(END VIDEO CLIP)

WOODRUFF: Still breaks your heart. You can stay with CNN for up-to-the-minute updates on the tsunami disaster. Some of our networks' top journalists are in the region to cover the still developing story. Their reports will be featured every night this week in CNN's live primetime special report, "Turning the Tide." That is every night this week beginning at 7:00 Eastern.

As we've heard, getting aid to tsunami victims is a major priority for the new Congress. When we return, Senator Patrick Leahy will be with us from Capitol Hill to talk more about what the U.S. government is doing to help the disaster victims.

Plus, some strong opposition to President Bush's Social Security reform plan has already surfaced. We'll get details from our Bill Schneider.

(COMMERCIAL BREAK)

WOODRUFF: Congress and President Bush have joined hands to offer help to the tsunami devastated region of south Asia. But is the United States doing enough? Senator Patrick Leahy is with me now from Capitol Hill to talk about the American aid effort and he'll weigh in on another important issue in the president's second term, judicial nominations. Senator Leahy, first of all you were one of those initially criticizing the Bush administration for not moving fast enough. Is the administration doing enough now?

SEN. PATRICK LEAHY (D), VERMONT: The administration is doing the right things now. I had been concerned earlier when they offered $15 million. I thought in this part of the world, the disaster, the nature of it, it just really made no sense at all and we have a chance to show the goodwill, the generosity of the American people, which is enormous, to the Muslim world, to others in there, that the president is taking the right steps now. I was very pleased when he asked his father, former president Bush and former president Clinton to join together.

I think that demonstrates to the rest of the world, this is not a political or partisan thing, that America is really united. And I go to my own church, I hear people talking about the money they're raising for this. You hear it on the streets. You hear it everywhere else. The American public want to help. They will help. America has the ability to bring the help if we -- if we tap into what our real resources are.

WOODRUFF: Senator, what about where the government money is coming from? Are you worried that other international aid programs may suffer as a result of this?

LEAHY: It seems almost like arcane bookkeeping. What they're taking the money from right now is other disaster money. I think that's a mistake because disasters happen all the time and the United States should be able prepared to respond quickly. We're blessed with the greatest material wealth of any the nation in history. Part of those blessings are that we should show responsibility for those in need. I would hate to see money taken from aid, drought aid or famine aid in Africa to be used here. We have plenty of money. We set aside nearly $18 billion in Iraq for reconstruction that, at best, won't be spent for years. We could use some of that now and then go back and replenish that if we want to later on. But I would hate to see us rob Peter to pay Paul. We should be prepared to help out where disasters occur, whether it's famine in Africa, tsunamis in the Indian Ocean. I think we can do it. We definitely have the resources to do it. I want to make sure that we're prepared to do it.

WOODRUFF: Do you think these U.S. efforts are going to help the image of the United States in the world?

LEAHY: I think we're repairing our -- the initial mistakes when we didn't move quickly. Now they see us coming in. I think the more we're prepared to be there, to do the basic needs today, getting water, getting medical care, getting shelter to the people but then to stay afterward and help rebuild areas that have been terribly devastated. This is where the goodness of America comes. This is where all of our private organizations come. That, I think, can help with the image of America. I also think sending former president Bush and president Clinton both of them are respected abroad. That helps. WOODRUFF: Senator, another subject you're involved in this week is the ranking Democrat on the Senate judiciary committee. There are confirmation hearings coming up for Alberto Gonzales to be the next attorney general. A dozen high-ranking military officials have signed a letter expressing deep concern over his nomination. Is that going to have an effect on the committee?

LEAHY: I think it will have an effect because we have asked and have been asking for nearly a year now, his involvement in memos or his acquiescence in memos on the question of torture and all. I assume he abhors torture like everybody else but we're going to ask was his involvement in these memos something that allowed this torture to go forward. If it was, then it was a disastrous mistake.

WOODRUFF: And Senator, the fact that the Justice Department has revised the definition of torture, does that take some of the heat off on this issue?

LEAHY: You know, I'd love to applaud them for changing the definition of torture. The fact that they do it on a holiday weekend just before the Gonzales hearing, it makes you wonder was this political or do they mean it? I mean, the Bush administration could have revised this definition of torture a long, long time ago and should have.

WOODRUFF: Senator, one last quick question. You were sworn in today for another term by the vice president of the United States, Dick Cheney. We know the two of you exchanged a rather heated, I guess, heated exchange a few months ago. There was profanity, I guess, used in that exchange.

LEAHY: Not by me.

WOODRUFF: No, we know that. How did it go today between you and the vice president?

LEAHY: Well, of course, cordial. But I've always felt it's better to be sworn in than to be sworn at.

WOODRUFF: All right. That's a line we're going to remember. Senator Patrick Leahy of Vermont, thank you very much. We appreciate it.

We'll get the vice president's comment on that first chance we get.

Millions of Americans do get a Social Security check every month. Now in the new year, a battle brewing over President Bush's plan to overhaul the system. Details straight ahead.

(COMMERCIAL BREAK)

WOODRUFF: Reforming Social Security is a large part of President Bush's second term agenda. On this first day of the new Congress, some critics of the president's plans are already on the attack. Now CNN's senior political analyst, Bill Schneider. (BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Today the first shot was fired in what is shaping up as this year's big political battle, Social Security. The shot came from the AARP, which started a $5 million ad campaign opposing President Bush's idea to give retirees the option of private Social Security accounts. The ad talks about risk and social insecurity.

DAVID CERTNER, AARP DIR. OF FEDERAL AFFAIRS: We want to send a clear and unmistakable message about what is potentially out there to harm Social Security and where AARP stands on it.

SCHNEIDER: Their opponents charge...

ELIZABETH VARLEY, SECURITIES INDUSTRY ASSN. It looks like they're trying to scare people.

SCHNEIDER: But supporters of private accounts say scary things, too.

VARLEY: If we don't take steps now to try and reform this program, doing nothing is going to be even more costly.

SCHNEIDER: What fuels the reform movement is the view that Social Security is headed for trouble.

SEN. JOE LIEBERMAN (D), CONNECTICUT: In the long run, Social Security is not sustainable. There's not enough money going in to pay the benefits that people deserve.

SCHNEIDER: But money invested in private accounts will not be available to pay current benefits.

CERTNER: The idea of turning Social Security into private accounts or privatizing the system has nothing to do with addressing the issue of solvency.

SCHNEIDER: What does the playing field look like? In a word, flat. The public is split right down the middle. Americans under 50 like the idea of private Social Security accounts. Those over 50, don't. They feel more dependent on Social Security and don't want to take money out of the system. Their fears are being heightened by the news that the government is considering changing the formula to reduce benefit levels for future retirees to which supporters of private accounts say...

SEN. BILL FRIST (R), MAJORITY LEADER: We need to remember that you can have access to these personal accounts which will grow much faster than either prices or wages.

SCHNEIDER: It's a battle of fears. On the one hand, fears about the security of the system. On the other hand, fears about benefit cuts.

(END VIDEOTAPE) (on camera): And, a third fear, the economy. One side warns that not fixing the program now will create huge budget obligations to retirees and that will endanger economy. The other side warns that diverting Social Security accounts into private accounts will increase the deficit and that will endanger the economy -- Judy.

WOODRUFF: You're placing bets on either side at this point, Bill?

SCHNEIDER: I think it will be a tough battle but I'm not willing to bet right yet.

WOODRUFF: We'll keep checking back with you. Bill Schneider, thanks very much.

The Social Security battle is certain to be an intense one. CNN political analyst Ron Brownstein of the "Los Angeles Times" is with me now to talk a little more about president's reform plan. First of all, Ron, how much is at stake for the president here?

RON BROWNSTEIN, "LOS ANGELES TIMES": I think he has made clear, this is going to be his top domestic priority of the second term. I've talked to people who have spoken with him and says that he expresses a passion on this matched only by his desire to bring democracy to the Mideast. And so I think this is something they are truly going to finally, after many years of talking about it, fight out and see if they can build a support for major restructuring.

WOODRUFF: Well, the thing that was floated today, you're very aware of it is that they're now thinking and seriously about basing future benefits on the rate of inflation rather than on an individual's wages because this would save the government a lot of money. Is this something that can fly?

BROWNSTEIN: Well, that is a very good question. It's not totally surprising to hear the White House talking about this because it was essential element of the principle plan put forward by the commission that he endorsed and I think a lot of people have assumed for a while this would be part of the White House plan. Basically, the issue here is what -- to what extent will Social Security replace the wages of workers when they retire. What the administration and supporters of this idea argue is that it will not mean a cut in benefits from today because benefits would still rise from where they are today but they wouldn't rise nearly as much as they would under current law and they wouldn't replace nearly as much of a worker's wages as they do now. And as a result, what the administration says, of course, is well, they will have the potentially individual account that can make up some of the difference and most Democrats are probably going to argue is that this is a cut too big, it's not needed to bring the system into stability.

WOODRUFF: Earlier talking to Lou Dobbs about this, he said he thinks it could be very tough for the administration to get anything through Congress that cuts future benefits no matter how far down the line. But we know the administration is going to be pushing a big PR plan to sell this, what are their chances of success? BROWNSTEIN: I would say a couple of things. I agree with Bill. It's hard to say for sure right now. Tough, yes. Impossible, no. There are a lot of Democrats who feel that the party simply cannot be in a position of saying no to any changes on Social Security. And if you do nothing, Judy, in addition to the question of the financing gap between the payroll tax revenue and the promised benefits there's the issue of how much of the federal budget goes to the elderly over time. Social Security, Medicare and Medicaid as the baby boom retires and medical costs increase, could increasingly squeeze out programs that Democrats care about as well for children and families and so forth.

So there may be some Democrats as well looking for ways to constrain the long-term growth of all of these programs and that provides a basis for discussion.

WOODRUFF: AARP, the Association of Retired Persons, was with the administration last year on Medicare tax -- on Medicare prescription drugs. They are now against the administration on a big chunk of this. How much is that going to play into it?

BROWNSTEIN: That's a big problem. And not surprisingly. They're an interest group that wanted more benefits from Medicare. They're resistant to changing Social Security. There are two separate issues here that people have to keep in mind as we move forward. One is how do we close the long-term financing gap in Social Security and that's where you get into this benefit cut issue. The other is do we want to set up individual investment accounts as part of the system and how would we fund that if we did. These two things are going to converge a lot in the public debate and can inflate in the public mind but they're separate issues and they're both having to solve both at once makes this more complicated for the president.

WOODRUFF: And then you have the whole debate over how much is the whole thing in crisis or not and we can talk about that...

BROWNSTEIN: Another time.

WOODRUFF: All right. Ron Brownstein, thank you very much.

It happened before, it is bound to happen again. Coming up next, a look at how Capitol Hill lawmakers react when colleagues step over the line separating right from wrong.

(COMMERCIAL BREAK)

WOODRUFF: As we mentioned the Republican dominated 109th session of Congress convened for the first time today. One of the big issues in the House is an attempt by Republicans to change ethics rules prompted by an investigation of Majority Leader Tom DeLay. Our Bruce Morton looks back at other ethics battles.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Congressional ethics is, well, cyclical. Back in 1989 the Democrats were the majority party and their speaker Jim Wright was charged with 69 rules violations including getting around outside income limits with a book deal.

REP. JIM WRIGHT (D), HOUSE SPEAKER: Both political parties must resolve to bring this period of mindless cannibalism to an end. We've done enough of it.

MORTON: Wright resigns. Newt Gingrich who brought the charges against Wright led the Republicans to victory in 1994 campaigning on the contract with America which promised to restore accountability to Congress and end its cycle of scandal and disgrace. But Gingrich drew a House reprimand, paid a fine and finally resigned.

This year's controversy has centered around the Republican Majority Leader Tom DeLay.

REP. TOM DELAY (R), MAJORITY LEADER: I understand the Democrat party's adjustment to their national minority status is frustrating. But their crushing defeat in the elections earlier this month after two more years of Democrat obstruction and vicious personal attacks should show them that the American people are tired of the politics of personal destruction.

MORTON: That's what Bill Clinton used to say when he was being impeached. In the House, though, the majority party usually wants its way, whatever the rules say. Bob Michel long-time Republican minority leader remembers.

BOB MICHEL (R), FMR. HOUSE MINORITY LEADER: Well, that's true. And I have some reservations about an unbridled majority that runs rough shot off over the minority. Let's face it, my 38 years in the House was all in the minority so I know how distasteful it is to be there.

THOMAS MANN, BROOKINGS INSTITUTION: It's amazing how moving from minority to majority status alters the outlook of a political party. Much of what the Republicans said they wanted to do to clean up the House of Representatives has disappeared from their agenda.

MORTON: Maybe some rules left others unchanged. But, hey, it's a complicated process.

WRIGHT: I'm convinced that I'm right. Maybe I'm wrong.

MORTON: Got it? Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: We remember those days. That's it for INSIDE POLITICS. Thank you, Bruce. I'm Judy Woodruff. We thank you for joining us. "CROSSFIRE" starts right now.

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