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Inside Politics

Republicans Accuse Democrats of Religious Bigotry in Judicial Standoff; Social Security Issue Gets Another Push

Aired April 15, 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 VIDEOTAPE)
ANNOUNCER: The Senate majority leader is set to bring religion into the fight over judicial nominees. Will a televised attack on Democrats help his cause or backfire?

Critics of Tom DeLay's ethics get an assist from Uncle Sam. The House majority leader is facing even more finger-pointing and second- guessing by Democrats and Republicans.

A question of compromise on Social Security reform. Is the president willing to give any new ground on private retirement accounts?

GEORGE W. BUSH, PRESIDENT OF UNITED STATES: If setting aside money in a personal saving account is good enough for a member of the United States Congress, it's good enough for workers all across America.

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

(END VIDEOTAPE)

CANDY CROWLEY, CNN ANCHOR: Thank you for joining us. I'm Candy Crowley sitting in for Judy.

Move over Tom DeLay, Senate majority leader Bill Frist has the Republican under fire spotlight today. The reason, Frist's planned role in a made-for-TV religious event designed to blast Democrats for blocking the president's judicial nominees.

Here is our congressional correspondent Ed Henry.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Candy, Senator Frist is edging closer to using the so-called nuclear option, a change in Senate rules that would ban the use of filibusters to block judicial nominations. This is a major cause for the religious right, which believes Democrats have been abusing the filibuster to block President Bush from putting conservatives on the federal bench.

Senate Democrats charge this a naked power grab and today, they blasted Senator Frist for agreeing to participate in a religious broadcast that will claim Democrats are using the filibuster as a weapon against people of faith. Next weekend's event is being organized by the Family Research Council and will originate in a megachurch in Kentucky.

A flyer for this broadcast shows a person holding a bible in one hand, a judicial gavel in the other. Liberal activist Ralph Neiss (ph) calls this religious McCarthyism and Senate Democratic whip Dick Durbin charged today that Senator Frist is improperly injecting religion into politics, and Durbin said that this nuclear option is unnecessary, given the fact that 205 out of 215 of the president's nominees have been approved.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), MINORITY WHIP: This White House and the majority party in the Senate has decided that 95 percent is not enough. They want it all. They want every nominee, and sadly, they're about to assault this constitution and the rules of the Senate to try to achieve that goal.

(END VIDEO CLIP)

HENRY: Now, Senator Frist's spokesman Bob Stephenson (ph) told me that if Senator Durbin is so concerned about mixing religion and politics, he probably should have spoken out against Senator John Kerry, delivering so many speeches in African-American churches during the last presidential campaign. Stephenson added that Senator Frist is actually trying to protect the constitution by defending the right of judicial nominees to get a straight up-or-down vote, rather than having to cross the 60 vote threshold.

Senate Democrats counter that Frist is really motivated by the desire to win conservative support in advance of a presidential run. And in fact, some Republican activists do acknowledge that Frist's political future is riding on whether or not he can deliver on this battle over the nuclear option.

(BEGIN VIDEO CLIP)

RICHARD LESSNER, AMERICAN CONSERVATIVE UNION: We've incorporated and end-of-session legislation to make those recommendations a reality. One of the difficulties of working on an issue like this for 25 years, as I have now, is the prospect of having to be so hardly vindicated over and over again by making warnings about existing loopholes, only to see them exploited routinely and sometimes with tragic and, indeed, catastrophic consequences. We're also going to talk today a little bit about some other issues associated with the politics of the issue, and I am honored today to be joined by two of the finest Americans I know, as well as distinguished members of Congress. Congressman Tom...

(END VIDEO CLIP)

HENRY: OK, that was supposed to be sound from Richard Lessner at the American Conservative Union, and he was basically saying that he believes Senator Frist has a lot riding on this battle, but Frist spokesman Bob Stephenson (ph) told me the leader is not motivated by a White House run at all. He just wants to protect the constitution. The bottom line here, Candy, is we're headed for a major battle, probably before the Memorial Day recess. And both sides are admitting they have no idea whether or not the Republicans have the 51 votes they need to overturn the rules.

CROWLEY: So, let me ask you about the judges, because, in fact, Republicans tell a different story on how many judges have been blocked. So, what is the real problem? I can't imagine -- are the Republicans arguing over the other five percent, or is there a real backup?

HENRY: They are. They're arguing over that five percent. The Republicans feel that's is unprecedented to use a filibuster on the Senate floor to block judicial nominees. The Democrats counter that, in fact, Bill Clinton had dozens more nominees blocked, not through a filibuster, but anonymous holes, which, as you know, is essentially a filibuster, where senators can block nominees from even coming to the floor at all. The bottom line is that both sides have been guilty of blocking judicial nominees. It's just now reached a boiling point.

CROWLEY: Amazing how everything can get really logged up with a process. Thanks so much, Ed Henry, I appreciate it.

HENRY: Criticism of House Majority Leader Tom DeLay keeps on coming today from the usual suspects, and from some less likely ones. On Capitol Hill, the liberal group truemajority.org displayed a 12 foot statue of Uncle Sam scolding DeLay for alleged ethical transgression. And the Democratic Congressional Campaign Committee unveiled a Web site that claims to lay out the case against DeLay. Republicans call it a publicity stunt and accuse Democrats of sinking to a new low.

CROWLEY: Four members of DeLay's own party are questioning his conduct. The "New York Times" reports ten former Republicans members of Congress are urging House leaders to reverse changes made in House ethics rules, complaining those changes were an obvious effort to protect DeLay. Another Republican, Congressman Tom Tancredo of Colorado is quoted today as saying DeLay has handled ethics issues, quote, "stupidly," and goes onto say, "it is probably not the worst idea for DeLay to step down."

And the conservative-leaning publication "The Economist" is editorializing that it's time for DeLay to go, saying the majority leader has become, quote, "a liability to the Republican party."

President Bush has his traveling salesman hat on today. He went to Ohio to promote Social Security reform amid new questions about whether he's ready to compromise on the centerpiece of his plan, private retirement accounts.

We want to check in with our White House correspondent Dana Bash. Any movement, Dana?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, yes and no, Candy. That clears it right up, right? Essentially, what the issue today is is a headline in "USA Today," saying that the president's adviser suggests he could compromise on accounts and the story quotes Allan Hubbard (ph), he's the president's national economic -- the head of the president's national economic council, suggesting that the administration may be willing to compromise on its centerpiece, as you mentioned. Frankly, the only thing we know about the Bush tax plan, really -- Social Security plan, that is to create private accounts within the system.

Now, several administration officials here say that they fully understand that in their uphill battle for reform, private accounts are obviously the steepest, and that is because it is really a non- starter among Senate Democrats. So Senate Democrats, they really need to get anything done on Capitol Hill. However, what they are saying is that this is not a new signal. They remind us that John Snow, the treasury secretary, has said in the past that he also says that perhaps anything is on the table including, perhaps, private accounts.

But what they're also saying is that this is a strategy, a tactical strategy to make it look like the White House is open to any and all ideas, is flexible to anything. And that is what the president was trying to signal when he was traveling in Ohio, talking about Social Security today.

(BEGIN VIDEO CLIP)

BUSH: And I'm looking forward to discussing any good idea with a Democrat or Republican. I imagine there's some people fearful in Washington, D.C. about maybe laying out an interesting idea and that one of the political parties will get all over them for laying it out. If I have anything to do with it, there would be political amnesty for people bringing good ideas forward.

(END VIDEO CLIP)

BASH: So on private accounts, Candy, what White House officials are saying is that the president will definitely push as hard as he possibly can to get these into any final negotiations, if and when they start. But the question now is, when will the discussions start? What they say they understand here is that what we're seeing is non- change in the storyline. For months and months, the president, as you just saw, out there, essentially saying the same thing over and over, that there's a problem with Social Security, that it needs to be reformed, talking about ideas vaguely, but nothing much has moved forward and that what people are looking for, reporters interest groups, everyone, is some kind of movement, some kind of signal, trial balloon, if you will, from an administration official.

That's what some perhaps thought happened today, but they say not yet, that there might be a change very shortly. One senior official said they are talking about moving the situation forward, talking about potential solutions in a more definite, specific way, but perhaps that won't happen at least for another month -- Candy.

CROWLEY: I don't know, that political amnesty idea may work in moving things forward. Let me ask you, it's -- what seems to me that has been holding this up is that neither side is willing to put anything out there, to have it beaten up in the media. So are you saying that you sense that maybe they will have something that they're going to put out there other than the private accounts? BASH: Well, the private accounts, of course, is what the president has been pushing as a way he thinks that will ultimately help the Social Security reform process. What they're still negotiating and talking about and somewhat floating are some ideas for solvency. And that is really what they say they are going need to talk about in terms of nitty-gritty with Capitol Hill.

But like they've said all along they're going to take the lead from Capitol Hill, but then you hear from Capitol Hill, they want more leadership from the president. We'll see if the twins shall meet very shortly.

CROWLEY: Still a stand off. Thank so much. White House Correspondent Dana Bash.

Another take on Social Security reform and room for compromise. Ahead, when I talk with commerce secretary Carlos Gutierrez.

Up next, Bill Frist and Tom DeLay both feeling the heat. We'll get dueling takes on their troubles from Donna Brazile and Bay Buchanan.

Plus, some provocative comments by actress Jane Fonda about the Bush administration and the war in Iraq.

(COMMERCIAL BREAK)

CROWLEY: Guess who's here? Former Gore campaign manager Donna Brazile and Bay Buchanan, president of American Cause. This is always fun for me.

I feel like I should just do free association. Bill Frist.

What do you make of the to do, I'm assuming you think it is a to do over Bill Frist and this affiliation over the judges?

BAY BUCHANAN, REPUBLICAN STRATEGIST: If you're asking me about whether he should move ahead in an attempt to change the rules in the Senate so that there would be no filibusters for judges, I'm in total agreement. If that is the question, I think he absolutely should do it.

CROWLEY: The question, and I think Donna will bring it up, he has decided to join hands and at least do a taped -- I'm told it will be a taped appearance -- with religious conservatives in fighting for the judges, making it -- they've put out what some believe was an inflammatory brochure suggesting that the Democrats are after people of faith and won't approve judges of faith.

BUCHANAN: Well, it's very clear.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: It's highly inappropriate for Senator Frist to participate in this just to further his own political career. We all know he wants to run for president in 2008. But to throw more passionate partisan flames on this, you know, brewing fire is a mistake. I mean, he's a majority leader of the United States Senate, it's time to cool down the rhetoric to work with Democrats to try to find a solution so that he doesn't have to push the nuclear option button. But I think it is a mistake for him to participate in this conference next Sunday.

BUCHANAN: There is no compromise, because for years now they've been trying to explain to Democrats the president has a right to have his judges voted on up or down. Democrats would vote for these guys. And, in fact, there is without question the reason that these judges who are being chosen to be facing filibuster is their religious beliefs.

BRAZILE: That's not true.

BUCHANAN: Chuck Schumer.

BRAZILE: It's their extreme views on a range of issues including...

BUCHANAN: Chuck Schumer point blank said about Leon Holmes, the reason he is not available to be a federal judge, he's not acceptable is because of his conservative religious views. He's a Catholic.

BRAZILE: We're not attacking their religious views or their background. We're attacking their record, we're attacking their judicial temperament. Democrats have approved all but ten of George Bush's judges. This president has appointed and gotten through more judges than the last three presidents combined.

BUCHANAN: Let me ask you, what is the temperament of the supreme court -- the California Supreme Court justice out there, black lady, terrifically qualified. Why isn't she been approved? Because she might be pro-life. That's the only thing.

BRAZILE: Because of their extreme views many, including issues that are currently the law of the land. And that's why Democrats oppose justice Brown.

BUCHANAN: What you're saying is if they're pro-life, that's against the law of the land, therefore, they can not be a judge.

BRAZILE: This is not a religious battle. I think that's what the far right wanted it to be, about someone's personal religious views as opposed to their public record, their public statement and their public temperament.

BUCHANAN: This is their constitutional duty.

CROWLEY: I want to get you to the next ones. That's why I love it, because I can just sit here and interrupt every once in a while.

There was an article out saying that House campaign funds over the last two election years have paid more than $3 million to lawmakers' families. So what did Tom DeLay do that was so wrong?

BRAZILE: Well, first of all, Mr. DeLay needs to step down as majority leader, clean the air -- clear the air... BUCHANAN: What did he do wrong?

BRAZILE: Look, that's one of many. I mean, pick a fight. I mean, Tom DeLay has pick so many fights inside Washington D.C.

BUCHANAN: Are Democrats willing to pick that fight? Since, you know and I know there are always fights in there.

I'm one of those people...

UNIDENTIFIED FEMALE: Oh, my gosh.

BUCHANAN: Sister of a candidate that was paid.

BRAZILE: I'm not one of those, but as a former congressional staffer, I clearly took trips that were paid by some organizations. But I'm sure I didn't break the law. Tom DeLay needs to explain why what he did, how he did it and who paid for it. And if he broke the law should be held accountable to it.

BUCHANAN: He's much willing to do that. And the key here is -- and I know people who would like to see DeLay go who have read long articles in the New York Times, Washington Post looking for...

(CROSSTALK)

BRAZILE: And the Wall Street Journal.

BUCHANAN: Everyone concludes there is nothing illegal. Even Shays who called for him to step down says I cannot see anything he's done that is illegal.

BRAZILE: Mr. Tancredo, Republicans.

CROWLEY: Is it about, at this point -- there is a Kabuki Dance that goes in in Washington -- is this about what Tom DeLay did that was illegal, or is this about perception which in Washington can be just as powerful as the illegalities.

BUCHANAN: In politics, perception is reality. You cannot change that.

BRAZILE: He's been admonished four times before the House Ethics Committee. That's a warning. So, this is the second most powerful leader in our country, who should explain his actions and come clean. That's all he has to do.

BUCHANAN: His problem is he has used that hammer on too many Republicans as well as Democrats.

CROWLEY: Exactly. You have to be careful who you're mean to.

(CROSSTALK)

BRAZILE: He's brow beating the whole country.

CROWLEY: Hey Donna, thank you so much. that was fun.

Republican plans to invoke the so-called nuclear option could give new meaning to the term political fallout.

Up next, does Bill Frist has the vote to end judicial filibusters? Bob Novak joins me with the inside scoop.

(COMMERCIAL BREAK)

CROWLEY: Pretty much like Grand Central here. Bob Novak has now dropped by to join us with some "Inside Buzz." The nuclear option, cutting off the filibusters. Is it going to pass?

BOB NOVAK, CNN CONTRIBUTOR: They think so. The head count shows right now, only two Republicans, Chafee of Rhode Island and Snow of Maine, are definitely against. A third, McCain, is probably against it. If they only lose three, they can lose two more and still get it through. They only need 50 votes. I think it's going to come up in a couple of weeks and it's going be one of the really exciting Senate votes of a long time.

CROWLEY: It will be fun to watch, for those of us that like to watch that sort of thing. Speaking of Lincoln Chafee, I'm really interested that, in fact, they may not want another Republican to run against him.

NOVAK: The establishment -- the Republican establishment, that means the administration, has been pressuring the mayor of Cranston, Rhode Island, Stephen Laffey, who is somewhere to the right of Chafee, not to run against him. They say that Chafee has a better chance to win in the fall in Democratic Rhode Island, and they say they get his votes sometimes, as on the John Bolton nomination, which he says he's going to vote for.

CROWLEY: My home state, Maryland, we've got an open Senate sea there, what looks like it might be pretty fun.

NOVAK: Lieutenant governor Michael Steele, who's an African- American, he looked very good at the convention in New York, they have just about talked to him into running for the Senate. He wanted to run for reelection for lieutenant governor, for an open seat, and that he would be the first Republican elected since 1980 to the Senate from Maryland. Could be two African-Americans, if former Congressman Kweisi Mfume wins the Democratic nomination.

CROWLEY: And I know we can't possibly look in your notebook and not have an item about Tom DeLay.

NOVAK: No. Circle your calendar, Candy, for May 12th. For only $200, can you go to a -- at the Capitol Hilton, a Tom DeLay Appreciation Night put on by conservative groups. And attendance will be taken. They will find out who is on board for Tom DeLay on May 12th and who isn't, so be careful.

CROWLEY: Interesting. We'll see -- and much may change between now and then about the guest list. NOVAK: Who knows?

CROWLEY: All right. Thanks, Bob Novak, appreciate it.

NOVAK: My pleasure.

CROWLEY: And remember to tune in tomorrow at 2:30 p.m. Eastern, when Bob will have South Dakota freshman Senator John Thune as his guest on "THE NOVAK ZONE."

Turning to our Friday "Political Bytes." The president's nominees to head two federal agencies are on hold. The Senate Health Committee has delayed a vote on Lester Crawford, seen here on the left, to lead the Food and Drug Administration. According to a spokesman, the committee chairman has requested an investigation into anonymous allegations about Crawford by an FDA employee.

Meantime, the nomination of Stephen Johnson to lead the Environmental Protection Agency is also in a holding pattern. Senate Democratic -- senator Tom Carper placed the hold on Johnson. Carper accuses the White House and the EPA of stonewalling his request for pollution research.

The actress and activist Jane Fonda is well known for speaking her mind, and last night here in Washington, she took aim at the U.S. decision to go war in Iraq. In remarks quoted by the "Atlanta Journal-Constitution," Fonda suggested the Bush administration went to war to avoid appearing, quote, "unmanly." Fonda went on to say that American presidents continue to wage wars because they fear being "blamed for premature evacuation." And that is also a quote.

On this April 15th, have you put your tax forms in the mail? President Bush apparently has, it and we have details on his financial filing. Plus, a Bush cabinet member shares his inside take on the fight over Social Security reform and whether the president is willing to give ground. More INSIDE POLITICS ahead.

(COMMERCIAL BREAK)

CROWLEY: The markets are closing on Wall Street, which means I am joined by Kitty Pilgrim in New York with "The Dobbs Report."

KITTY PILGRIM, CNN ANCHOR: Thanks, Candy. Well, stocks are steeply lower. The Dow Industrials are logging their third straight triple-digit loss. All the major averages are at their lowest levels of the year. Let's take a look. Now, the final trades are still being counted, but we have the Dow down a 198 points. The Nasdaq two percent lower. It's now down nearly 11 percent this year.

And the main reason for selling: several companies have posted weak corporate profits in recent days. IBM is the biggest name and today IBM shares tumbled $6.50. That led technology stocks lower across the board. And those results are raising new concerns about another round of tech-sector weakness.

Let's move on to some economic figures. Manufacturing also facing a slow-down. A measure of factory output in March dropped for the first time in six months. That's partly due to a drop in production of cars and trucks.

And another jump in import prices is raising concerns about the stability of the economy. Surging oil prices factored into a nearly 2 percent jump in import prices.

Well, it's pretty clear, today is the tax deadline day. And if you've waited until the last minute, you are not alone. 10 percent of taxpayers have actually put their's off until today.

Now in all, Americans spend an estimated 6.6 billion hours preparing their taxes.

Coming up on CNN, 6:00 p.m. Eastern on LOU DOBBS TONIGHT sending the kids to college is part of the American dream, and now a Florida lawmaker wants to allow children of illegal aliens to have access to in-state tuition benefits.

(BEGIN VIDEO CLIP)

JOYCE TARNOW, FLORIDIANS FOR SUSTAINABLE POP: For every illegal immigrant child that gets admission under a tax subsidized tuition plan, there's another American-born student who does not have access to that place at that public university.

(END VIDEO CLIP)

PILGRIM: Also tonight, in "Broken Borders," a crackdown at a military contracting company uncovers 86 illegal workers, some may have had access to U.S. Navy Ships.

And we look at what the Department of Homeland Security is doing to keep illegal aliens from working in highly-sensitive areas.

And then, the breakdown of the Department of Homeland Security budget. Lou, we'll talk with Congressman Christopher Cox, who says the giant agency is not spending its money wisely.

And a bill has been proposed that could grant a million illegal aliens amnesty to work on farms on the U.S. Tom Bias from the National Farmers Union will join us to tell us why this is a grave mistake. All of that and more tonight at 6:00. But for now, Candy, back to you.

CROWLEY: Thanks, Kitty.

INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: Bill Frist sets the blogosphere on fire over plans to portray the blocking of judicial nominees as a matter of faith.

On this IRS deadline day, are you feeling taxed to the max? We'll talk tax reform and more with America's new commerce secretary. A bridge to the future? We'll take a drive to Brooklyn in search of the political play of the week.

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

(END VIDEOTAPE)

CROWLEY: Welcome back. I'm Candy Crowley, filling in for Judy this Friday.

In the coming hours, accountants, tax attorneys and procrastinators across America can finally breathe a sigh of relief. The annual race to beat the IRS filing deadline will be over along with the numbers crunching hand-wringing and stomach churning. Let's face it, calculating what you owe Uncle Sam is not getting any easier. But at least some people can laugh about it, like the suits featured in David Letterman's top signs, your accountant doesn't care anymore.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, LATE NIGHT WITH DAVID LETTERMAN: No. 2.

UNIDENTIFIED MALE: Instead of working on your taxes, he's reading lame jokes on Letterman.

LETTERMAN: That's right. That's a bad sign right there. Just doesn't care.

(END VIDEO CLIP)

CROWLEY: If wading through tax forms and tax law has not left you amused, we understand. But simplifying the tax code isn't so simple. Our White House correspondent Suzanne Malveaux reports on the push for and hurdles too reform.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That's why we need simplification. And that's why we have got to make sure everyone pays their fair share.

SUZANNE MALVEAUX, CNN CORRESPONDENT (voice-over): President Bush is pledging to simplify the country's massive tax code. But this year, taxpayers filing the returns could be just as confused as ever.

UNIDENTIFIED MALE: It is seven times longer than the Bible. I mean, that's a lot of stuff. And there's just page after page not only of the law itself, but also the regulations that go with it. And it's written in ways that frankly I can't understand.

MALVEAUX: This from the man appointed by President Bush, who's in charge of recommending how to fix the broken tax code system. Former senator Connie Mack heads the president's bipartisan advisory panel which has until summer's end to submit its recommendations.

UNIDENTIFIED MALE: We're going it look at the value added tax, we're going to look at the national sales tax, we're going to look at the flat tax.

MALVEAUX: It's the alternative minimum tax or A.M.T. that Max says will most dramatically affect taxpayers in the coming years forcing them to pay more.

UNIDENTIFIED MALE: This is a stealth tax code. Most people don't understand or don't know that we really have two separate tax codes for individuals in this country.

MALVEAUX: One tax code offers tax breaks, deductions, and accounts for inflation in determining how much someone owes the government. The other, the alternative minimum tax does not. Under its formula, taxpayers generally owe more.

Now only the wealthiest Americans are subjected to the higher tax system, most of those making between $200,000 and $500,000 a year. But tax analysts say because of the way the A.M.T. is set up, it will soon begin to hit many in the middle class.

Within 10 years, more than 75 percent of taxpayers with an income of $50,000 and up could be subjected to this higher tax calculation.

Getting rid of the A.M.T. would take an act of Congress. And while tax experts agree the overall tax code needs fixing, they differ on how to do it.

MAX SAWICKY, TAX ANALYST: We should tax all income the same. We should tax whether it's capital gains, dividend, interest or wages, they should all be taxed under the same tax rates.

MALVEAUX (on camera): The president's panel must submit recommendations by the end of July. But the question remains whether or not it will get much of a hearing. The president has already staked out reforming Social Security as the centerpiece of his domestic agenda. And so far Congress has had little appetite to take that on.

Suzanne Malveaux, CNN, the White House.

(END VIDEOTAPE)

CROWLEY: On this April 15, and I'm sorry to keep reminding you of the date, I did talk about tax reform and more with Commerce Secretary Carlos Gutierrez. I asked him what could constitute quote, "incredibly radical solutions," which by some accounts the tax overhaul panel is expected to propose?

(BEGIN VIDEOTAPE)

CARLOS GUTIERREZ, COMMERCE SECRETARY: Well, the president's been very clear on his expectations of the panel's recommendations. He wants the panel to come back with ideas to make the tax code simpler.

As you know, we have a very, very complicated tax code. The president wants to make the tax code fairer. And the president wants a tax code to promote growth, to be pro-growth. He's also mentioned that he would like the tax code to reflect basic values of our country. He wants a tax code to promote ownership. And he also wants a tax code to promote charitable giving. All other suggestions he wants to see what panel's going to come up with.

CROWLEY: You know, you'll forgive me, but I have covered politics for an awfully long time and I don't think I ever knew a president who didn't say he wanted to simplify the tax code and make it fairer. Do you get any sense that there is any momentum behind anything that might make a major change in the tax code?

GUTIERREZ: Well, I believe there is plenty of momentum behind the current tax code. As we know, the tax code was -- the tax reductions were put in place in 2001, 2003. Those tax cuts have spurred growth. We have a very strong economy today.

The other thing I would say, Candy, is that our president has proven that he's been able to do things that perhaps in the past we have just talked about, but haven't been able to do. I have a great deal of faith that this president will be able to do for the American people what they want, which is a simpler tax code, a tax code that is fair and a tax code that promotes growth.

CROWLEY: Well, you get me right into my next question, which is actually about Social Security. I know you've been out promoting the president's plan.

Mr. Hubbard also said that the president might be willing to talk about add-on private accounts, that is, nothing that takes money out of Social Security, but a private account that allows people to invest in the market. Is that on the table? Is it something the president supports?

GUTIERREZ: Well, Candy, the president has been very clear in what he would like to see. And the ideas that he would like to receive on a national level. He wants a dialogue, he wants a debate, he wants full participation because this is an important national problem.

The president's stated that he does not want to make changes for people who are 55 or older. He does not want to solve the problem simply by raising pay roll taxes. That would be a band-aid solution. That's too easy to do. We deserve better, we deserve a fundamental fix to the system.

And the third thing, the president said, is he wants to give the option, the voluntary opportunity for citizens to create their personal accounts. Everything else he would like to hear ideas.

CROWLEY: Mr. Secretary, you've been a very successful private businessman. I wanted to ask you just a quick question, we don't have that much time. What's wrong with the job market? It has sort of almost consistently underperformed in adding new jobs. Why has it been so sluggish?

GUTIERREZ: Candy, our economy is very strong. Our economy grew last year at 4.4 percent.

CROWLEY: But specifically on the jobs.

GUTIERREZ: Well, our unemployment rate is down to 5.2 percent. That doesn't mean we're satisfied with that. The president said we will not stop until every American who wants to work is working. This economy has created over 3 million jobs since August of 2003. We are growing. We are creating jobs. Average household income in up 10 percent since the president took office.

So the economy is strong, we're working to make it stronger. And the president's policies are clearly behind the strength in our economy.

(END VIDEOTAPE)

CROWLEY: We are not quite done with the tax thing.

A tax report today from the White House. President and Mrs. Bush reported taxable income of more than $672,000 for 2004. They paid more than $200,000 in taxes. They donated more than $77,000 to churches and charitable organizations.

Vice president and Mrs. Cheney reported the taxable income of more than $1.3 million. They paid more than $393,000 in federal taxes on that. And they contributed more than $303,000 to charity.

Baseball fans still thrilled about the Washington Nationals' game last night May think the play of the week is a done deal, but Bill Schneider has other ideas. Stay tuned to find out who he thinks scored.

Up next, you knew it had to happen, bloggers are having a field day with reports of Bill Frist, Christian conservatives and the fight over judicial nominees.

(COMMERCIAL BREAK)

CROWLEY: Senator Bill Frist is all the rage online today, and I suspect we mean that literally. We check in now with our blog reporters Cal Chamberlain and Jackie Schechner. Jackie.

JACKIE SCHECHNER, CNN BLOG CORRESPONDENT: Hi, Candy. I like that one.

We're calling it Bill Frist Friday on the blogs today. Not to be outdone by House Majority Leader Tom DeLay, who has been the center of the attention most of this past week, today it is Senate Majority Leader Bill Frist who's got himself a two-fer.

First, it's the Washington Post article that's been spinning around talking about how Frist is ready to move forward on the nuclear option -- that would be on the filibuster. You'd think that the right side of the blogs would be really happy about this article. Not so. Captain Ed over at Captainsquartersblog.com leading the charge, saying, "Not one dime." He's not going to give any more money to the Republicans until they stop dragging their heels and actually do something. He's says it's just all taking so long.

Aaron over at Blue State Conservatives agrees. That is radiobs.net/thebluestateconservatives. And he says, "End obstructionism or no more money." And he says, "Until the GOP leadership in the Senate grows a spine and takes on the Democrats on judicial nominees, they will not see one dime of my money."

CAL CHAMBERLAIN, CNN BLOG CORRESPONDENT: And then over on the left, we have Barbara O'Brien at the Maha Blog at mahablog.com, who has a post about the importance of keeping the filibuster. And she evokes good old Jimmy Stewart.

She says, "I keep thinking that if the Democrats really did have some pull in the entertainment industry, they would see to it that the old film classic 'Mr. Smith Goes To Washington' would be on television, broadcast and cable 24/7." That's kind of funny.

And another blogger that's concerned with keeping the filibuster intact and wants to highlight groups that quickly and quietly make sure those checks and balances remain in place is Moxie Grrrl. And that can be found at Moxiegrrrl.com. And that's G-R-R-R-L -- for the transcribers -- com. And she says, "One such effort came from the Alliance for Justice, who created a simple animation designed to teach the public about what's happening without resorting to impassioned heart-string tugging. And it's reminiscent of School House Rock's 'I'm Just a Bill' but without the catchy tune."

And the animation she's talking about is Save Phil, and it's Phil A. Buster. And you can go to savephil.com and watch the animation with his little pals, Checks and Balance. It's kind of funny.

SCHECHNER: Over at No More Mr. Nice (sic) blog -- that is Steve M. over there; it's nomoremr.blogspot.com (sic)-- he has an idea for moving forward. He says he "admires the Democrats' success in blocking the worst of Bush's judicial nominees and supports the fight to save the filibuster." He says, "But at a certain point, shouldn't the Democrats go public with the actual case against these nominees?"

He's got two examples he's talking about here. One is Justice Pryor and his defense of handcuffing prisoners to hitching posts. The other is Justice Brown's defense of racial slurs in the workplace as protected under free speech.

There is more details. That's a short summary. But go take a look at that one.

CHAMBERLAIN: And then yesterday, the New York Times was reporting that Frist is engaging in a telecast with religious leaders aimed towards demonizing those who oppose the removal of the filibuster as being against people of faith, and he had this to say. He says, "Frist has every right as a citizen to participate in a religious setting, but it's disturbing to see him advocate parliamentary procedure change with constitutional checks and balance impact from an openly sectarian religious framework."

SCHECHNER: So over at the liquidlist.com, it is Shawn over there. He says, "Beware. Beware the new machine. When policy is announced at a Kentucky megachurch, you know things are getting just a little out of hand." He says that Majority Leader Frist would make these announcements in such a venue "illustrates a hard and ugly truth that the religious right is today's most powerful and well organized political machine."

Then he goes on to say, referencing back the era of Boss Tweed, "Unlike Boss Tweed and his sort, James Bobson and Chuck Coleson are not out to help improve the lives of working men and women. No, their way leads to a very scary place. The time is here for regular Americans to take note of these developments and fight back hard."

So a lot of stuff that they're talking about.

Real quickly, we also want to add to you, Americablog.org has, "Republicans to Step up Attack Over Judges Even More." Joe in D.C. over there pointing to an Associated Press article saying that in response to some of the liberal ads that are coming out now that Republicans are seeing, that they want to put some muscle behind their pitch. And they wonder over there at America Blog, "In the current climate, what do aggressive and muscle actually mean to the G.O.P.?"

So, I'm sure that Tom DeLay is very happy that it's not him in the blogs today, and it's switched over now to Bill Frist. But this is what they are talking about on this Friday.

Candy.

CROWLEY: Well, as always in politics, what goes around comes I am sure. Next Monday someone else will be in the spotlight. Thank you all very much.

The passage of time leads to a change of heart for a New York lawmaker. Up next, how one committee vote captured the political play of the week.

(COMMERCIAL BREAK)

CROWLEY: Most people have strong opinions about the death penalty, but opinions can change over time even on issues of life and death. Our Bill Schneider found a change of heart big enough to bring home the political play of the week.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): A committee vote in the New York State Assembly this week.

JOSEPH LENTOL, (D) NEW YORK ASSEMBLY: The bill is not reported until the bill is dead.

SCHNEIDER: And the impact.

UNIDENTIFIED MALE: History was made in New York yesterday.

SCHNEIDER: The committee voted not to reinstate the death penalty in New York, at least for the foreseeable future. Brooklyn assemblyman Joe Lentol led the effort, which was a surprise because Lentol had voted to restore New York's death penalty ten years ago, even though has father, Assemblyman Edward Lentol, had sponsored the bill that first abolished New York's death penalty back in 1965.

LENTOL: He and I always had heated discussions on the death penalty. I was always for it and he was against it.

SCHNEIDER: What changed? Violent crime rates have gone down sharply since 1994 all over the country.

JOE BRUNE, (R) N.Y. SENATE MAJORITY LEADER: We think that's because we've had a death penalty.

SCHNEIDER: But not one person has been executed in New York since 1995. In fact, U.S. public support for the death penalty has gone down with the crime rate since 1994. Lentol's committee held public hearings all over New York state.

LENTOL: My mind hadn't completely changed until -- it probably did change during the course of the hearings, hearing arguments that I've heard all my life from my dad being reinforced by a considerable number of people who were law professors, police officers, ordinary citizens, doctors, people who express their views on the death penalty.

SCHNEIDER: Lentol was also influenced by another figure he once met who changed his mind about capital punishment.

LENTOL: John Paul II said, no, that's not good enough. All instances capital punishment is not OK. And that -- he changed his mind. So I changed mine.

SCHNEIDER: Assemblyman Lentol closed the circle this week with a historic vote switch.

LENTOL: Maybe my father got it right, you know? Sometimes you grow up, you don't know that -- you think you're the smart one. And you realize that your parents ain't so dumb after all. And maybe they taught us something we ought to have learn learned early why on.

SCHNEIDER: Like the political play of the week.

(on camera): How can a politician switch positions? Well, times change, realities change, but the values of faith and family endure. And they mean something especially here in Brooklyn.

Bill Schneider, CNN, Brooklyn, New York.

(END VIDEOTAPE)

CROWLEY: After three decades, the wait is finally over. Up next, the president helps usher in a new era of baseball here in the nation's capital.

(COMMERCIAL BREAK) CROWLEY: We have some breaking news we want to tell you about. A CNN has confirmed that Mark Hacking in Salt Lake City, Utah, has pleaded guilty this afternoon to the murder of his wife Lori.

This was a case that dominated Salt Lake City media all of last summer. The plea of guilty means that hacking will not receive the death penalty. He will be eligible for sentencing of up to six years to life.

Lori Hacking's decomposed remains were found in a land fill in October. Prosecutors were unable to determine if she was five weeks' pregnant as she had told her friend.

Authorities have long believed that Lori Hacking was killed after she confronted her husband over deceptions about his education and plans to become a doctor. You will recall the couple was packing for a move it a North Carolina Medical School where it turned out Mark Hacking was not enrolled and had never applied. Lori's disappearance came shortly after she discovered that.

Once again, Lori Hacking, the murdered wife of Mark Hacking -- Mark Hacking has pleaded guilty to that murder. This means he will not get the death penalty. We expect sentencing in a couple of months. He could get anything from 6 years to life.

And that is it for INSIDE POLITICS. I'm Candy Crowley. "CROSSFIRE" starts right now.

END

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Aired April 15, 2005 - 15:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: The Senate majority leader is set to bring religion into the fight over judicial nominees. Will a televised attack on Democrats help his cause or backfire?

Critics of Tom DeLay's ethics get an assist from Uncle Sam. The House majority leader is facing even more finger-pointing and second- guessing by Democrats and Republicans.

A question of compromise on Social Security reform. Is the president willing to give any new ground on private retirement accounts?

GEORGE W. BUSH, PRESIDENT OF UNITED STATES: If setting aside money in a personal saving account is good enough for a member of the United States Congress, it's good enough for workers all across America.

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

(END VIDEOTAPE)

CANDY CROWLEY, CNN ANCHOR: Thank you for joining us. I'm Candy Crowley sitting in for Judy.

Move over Tom DeLay, Senate majority leader Bill Frist has the Republican under fire spotlight today. The reason, Frist's planned role in a made-for-TV religious event designed to blast Democrats for blocking the president's judicial nominees.

Here is our congressional correspondent Ed Henry.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Candy, Senator Frist is edging closer to using the so-called nuclear option, a change in Senate rules that would ban the use of filibusters to block judicial nominations. This is a major cause for the religious right, which believes Democrats have been abusing the filibuster to block President Bush from putting conservatives on the federal bench.

Senate Democrats charge this a naked power grab and today, they blasted Senator Frist for agreeing to participate in a religious broadcast that will claim Democrats are using the filibuster as a weapon against people of faith. Next weekend's event is being organized by the Family Research Council and will originate in a megachurch in Kentucky.

A flyer for this broadcast shows a person holding a bible in one hand, a judicial gavel in the other. Liberal activist Ralph Neiss (ph) calls this religious McCarthyism and Senate Democratic whip Dick Durbin charged today that Senator Frist is improperly injecting religion into politics, and Durbin said that this nuclear option is unnecessary, given the fact that 205 out of 215 of the president's nominees have been approved.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), MINORITY WHIP: This White House and the majority party in the Senate has decided that 95 percent is not enough. They want it all. They want every nominee, and sadly, they're about to assault this constitution and the rules of the Senate to try to achieve that goal.

(END VIDEO CLIP)

HENRY: Now, Senator Frist's spokesman Bob Stephenson (ph) told me that if Senator Durbin is so concerned about mixing religion and politics, he probably should have spoken out against Senator John Kerry, delivering so many speeches in African-American churches during the last presidential campaign. Stephenson added that Senator Frist is actually trying to protect the constitution by defending the right of judicial nominees to get a straight up-or-down vote, rather than having to cross the 60 vote threshold.

Senate Democrats counter that Frist is really motivated by the desire to win conservative support in advance of a presidential run. And in fact, some Republican activists do acknowledge that Frist's political future is riding on whether or not he can deliver on this battle over the nuclear option.

(BEGIN VIDEO CLIP)

RICHARD LESSNER, AMERICAN CONSERVATIVE UNION: We've incorporated and end-of-session legislation to make those recommendations a reality. One of the difficulties of working on an issue like this for 25 years, as I have now, is the prospect of having to be so hardly vindicated over and over again by making warnings about existing loopholes, only to see them exploited routinely and sometimes with tragic and, indeed, catastrophic consequences. We're also going to talk today a little bit about some other issues associated with the politics of the issue, and I am honored today to be joined by two of the finest Americans I know, as well as distinguished members of Congress. Congressman Tom...

(END VIDEO CLIP)

HENRY: OK, that was supposed to be sound from Richard Lessner at the American Conservative Union, and he was basically saying that he believes Senator Frist has a lot riding on this battle, but Frist spokesman Bob Stephenson (ph) told me the leader is not motivated by a White House run at all. He just wants to protect the constitution. The bottom line here, Candy, is we're headed for a major battle, probably before the Memorial Day recess. And both sides are admitting they have no idea whether or not the Republicans have the 51 votes they need to overturn the rules.

CROWLEY: So, let me ask you about the judges, because, in fact, Republicans tell a different story on how many judges have been blocked. So, what is the real problem? I can't imagine -- are the Republicans arguing over the other five percent, or is there a real backup?

HENRY: They are. They're arguing over that five percent. The Republicans feel that's is unprecedented to use a filibuster on the Senate floor to block judicial nominees. The Democrats counter that, in fact, Bill Clinton had dozens more nominees blocked, not through a filibuster, but anonymous holes, which, as you know, is essentially a filibuster, where senators can block nominees from even coming to the floor at all. The bottom line is that both sides have been guilty of blocking judicial nominees. It's just now reached a boiling point.

CROWLEY: Amazing how everything can get really logged up with a process. Thanks so much, Ed Henry, I appreciate it.

HENRY: Criticism of House Majority Leader Tom DeLay keeps on coming today from the usual suspects, and from some less likely ones. On Capitol Hill, the liberal group truemajority.org displayed a 12 foot statue of Uncle Sam scolding DeLay for alleged ethical transgression. And the Democratic Congressional Campaign Committee unveiled a Web site that claims to lay out the case against DeLay. Republicans call it a publicity stunt and accuse Democrats of sinking to a new low.

CROWLEY: Four members of DeLay's own party are questioning his conduct. The "New York Times" reports ten former Republicans members of Congress are urging House leaders to reverse changes made in House ethics rules, complaining those changes were an obvious effort to protect DeLay. Another Republican, Congressman Tom Tancredo of Colorado is quoted today as saying DeLay has handled ethics issues, quote, "stupidly," and goes onto say, "it is probably not the worst idea for DeLay to step down."

And the conservative-leaning publication "The Economist" is editorializing that it's time for DeLay to go, saying the majority leader has become, quote, "a liability to the Republican party."

President Bush has his traveling salesman hat on today. He went to Ohio to promote Social Security reform amid new questions about whether he's ready to compromise on the centerpiece of his plan, private retirement accounts.

We want to check in with our White House correspondent Dana Bash. Any movement, Dana?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, yes and no, Candy. That clears it right up, right? Essentially, what the issue today is is a headline in "USA Today," saying that the president's adviser suggests he could compromise on accounts and the story quotes Allan Hubbard (ph), he's the president's national economic -- the head of the president's national economic council, suggesting that the administration may be willing to compromise on its centerpiece, as you mentioned. Frankly, the only thing we know about the Bush tax plan, really -- Social Security plan, that is to create private accounts within the system.

Now, several administration officials here say that they fully understand that in their uphill battle for reform, private accounts are obviously the steepest, and that is because it is really a non- starter among Senate Democrats. So Senate Democrats, they really need to get anything done on Capitol Hill. However, what they are saying is that this is not a new signal. They remind us that John Snow, the treasury secretary, has said in the past that he also says that perhaps anything is on the table including, perhaps, private accounts.

But what they're also saying is that this is a strategy, a tactical strategy to make it look like the White House is open to any and all ideas, is flexible to anything. And that is what the president was trying to signal when he was traveling in Ohio, talking about Social Security today.

(BEGIN VIDEO CLIP)

BUSH: And I'm looking forward to discussing any good idea with a Democrat or Republican. I imagine there's some people fearful in Washington, D.C. about maybe laying out an interesting idea and that one of the political parties will get all over them for laying it out. If I have anything to do with it, there would be political amnesty for people bringing good ideas forward.

(END VIDEO CLIP)

BASH: So on private accounts, Candy, what White House officials are saying is that the president will definitely push as hard as he possibly can to get these into any final negotiations, if and when they start. But the question now is, when will the discussions start? What they say they understand here is that what we're seeing is non- change in the storyline. For months and months, the president, as you just saw, out there, essentially saying the same thing over and over, that there's a problem with Social Security, that it needs to be reformed, talking about ideas vaguely, but nothing much has moved forward and that what people are looking for, reporters interest groups, everyone, is some kind of movement, some kind of signal, trial balloon, if you will, from an administration official.

That's what some perhaps thought happened today, but they say not yet, that there might be a change very shortly. One senior official said they are talking about moving the situation forward, talking about potential solutions in a more definite, specific way, but perhaps that won't happen at least for another month -- Candy.

CROWLEY: I don't know, that political amnesty idea may work in moving things forward. Let me ask you, it's -- what seems to me that has been holding this up is that neither side is willing to put anything out there, to have it beaten up in the media. So are you saying that you sense that maybe they will have something that they're going to put out there other than the private accounts? BASH: Well, the private accounts, of course, is what the president has been pushing as a way he thinks that will ultimately help the Social Security reform process. What they're still negotiating and talking about and somewhat floating are some ideas for solvency. And that is really what they say they are going need to talk about in terms of nitty-gritty with Capitol Hill.

But like they've said all along they're going to take the lead from Capitol Hill, but then you hear from Capitol Hill, they want more leadership from the president. We'll see if the twins shall meet very shortly.

CROWLEY: Still a stand off. Thank so much. White House Correspondent Dana Bash.

Another take on Social Security reform and room for compromise. Ahead, when I talk with commerce secretary Carlos Gutierrez.

Up next, Bill Frist and Tom DeLay both feeling the heat. We'll get dueling takes on their troubles from Donna Brazile and Bay Buchanan.

Plus, some provocative comments by actress Jane Fonda about the Bush administration and the war in Iraq.

(COMMERCIAL BREAK)

CROWLEY: Guess who's here? Former Gore campaign manager Donna Brazile and Bay Buchanan, president of American Cause. This is always fun for me.

I feel like I should just do free association. Bill Frist.

What do you make of the to do, I'm assuming you think it is a to do over Bill Frist and this affiliation over the judges?

BAY BUCHANAN, REPUBLICAN STRATEGIST: If you're asking me about whether he should move ahead in an attempt to change the rules in the Senate so that there would be no filibusters for judges, I'm in total agreement. If that is the question, I think he absolutely should do it.

CROWLEY: The question, and I think Donna will bring it up, he has decided to join hands and at least do a taped -- I'm told it will be a taped appearance -- with religious conservatives in fighting for the judges, making it -- they've put out what some believe was an inflammatory brochure suggesting that the Democrats are after people of faith and won't approve judges of faith.

BUCHANAN: Well, it's very clear.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: It's highly inappropriate for Senator Frist to participate in this just to further his own political career. We all know he wants to run for president in 2008. But to throw more passionate partisan flames on this, you know, brewing fire is a mistake. I mean, he's a majority leader of the United States Senate, it's time to cool down the rhetoric to work with Democrats to try to find a solution so that he doesn't have to push the nuclear option button. But I think it is a mistake for him to participate in this conference next Sunday.

BUCHANAN: There is no compromise, because for years now they've been trying to explain to Democrats the president has a right to have his judges voted on up or down. Democrats would vote for these guys. And, in fact, there is without question the reason that these judges who are being chosen to be facing filibuster is their religious beliefs.

BRAZILE: That's not true.

BUCHANAN: Chuck Schumer.

BRAZILE: It's their extreme views on a range of issues including...

BUCHANAN: Chuck Schumer point blank said about Leon Holmes, the reason he is not available to be a federal judge, he's not acceptable is because of his conservative religious views. He's a Catholic.

BRAZILE: We're not attacking their religious views or their background. We're attacking their record, we're attacking their judicial temperament. Democrats have approved all but ten of George Bush's judges. This president has appointed and gotten through more judges than the last three presidents combined.

BUCHANAN: Let me ask you, what is the temperament of the supreme court -- the California Supreme Court justice out there, black lady, terrifically qualified. Why isn't she been approved? Because she might be pro-life. That's the only thing.

BRAZILE: Because of their extreme views many, including issues that are currently the law of the land. And that's why Democrats oppose justice Brown.

BUCHANAN: What you're saying is if they're pro-life, that's against the law of the land, therefore, they can not be a judge.

BRAZILE: This is not a religious battle. I think that's what the far right wanted it to be, about someone's personal religious views as opposed to their public record, their public statement and their public temperament.

BUCHANAN: This is their constitutional duty.

CROWLEY: I want to get you to the next ones. That's why I love it, because I can just sit here and interrupt every once in a while.

There was an article out saying that House campaign funds over the last two election years have paid more than $3 million to lawmakers' families. So what did Tom DeLay do that was so wrong?

BRAZILE: Well, first of all, Mr. DeLay needs to step down as majority leader, clean the air -- clear the air... BUCHANAN: What did he do wrong?

BRAZILE: Look, that's one of many. I mean, pick a fight. I mean, Tom DeLay has pick so many fights inside Washington D.C.

BUCHANAN: Are Democrats willing to pick that fight? Since, you know and I know there are always fights in there.

I'm one of those people...

UNIDENTIFIED FEMALE: Oh, my gosh.

BUCHANAN: Sister of a candidate that was paid.

BRAZILE: I'm not one of those, but as a former congressional staffer, I clearly took trips that were paid by some organizations. But I'm sure I didn't break the law. Tom DeLay needs to explain why what he did, how he did it and who paid for it. And if he broke the law should be held accountable to it.

BUCHANAN: He's much willing to do that. And the key here is -- and I know people who would like to see DeLay go who have read long articles in the New York Times, Washington Post looking for...

(CROSSTALK)

BRAZILE: And the Wall Street Journal.

BUCHANAN: Everyone concludes there is nothing illegal. Even Shays who called for him to step down says I cannot see anything he's done that is illegal.

BRAZILE: Mr. Tancredo, Republicans.

CROWLEY: Is it about, at this point -- there is a Kabuki Dance that goes in in Washington -- is this about what Tom DeLay did that was illegal, or is this about perception which in Washington can be just as powerful as the illegalities.

BUCHANAN: In politics, perception is reality. You cannot change that.

BRAZILE: He's been admonished four times before the House Ethics Committee. That's a warning. So, this is the second most powerful leader in our country, who should explain his actions and come clean. That's all he has to do.

BUCHANAN: His problem is he has used that hammer on too many Republicans as well as Democrats.

CROWLEY: Exactly. You have to be careful who you're mean to.

(CROSSTALK)

BRAZILE: He's brow beating the whole country.

CROWLEY: Hey Donna, thank you so much. that was fun.

Republican plans to invoke the so-called nuclear option could give new meaning to the term political fallout.

Up next, does Bill Frist has the vote to end judicial filibusters? Bob Novak joins me with the inside scoop.

(COMMERCIAL BREAK)

CROWLEY: Pretty much like Grand Central here. Bob Novak has now dropped by to join us with some "Inside Buzz." The nuclear option, cutting off the filibusters. Is it going to pass?

BOB NOVAK, CNN CONTRIBUTOR: They think so. The head count shows right now, only two Republicans, Chafee of Rhode Island and Snow of Maine, are definitely against. A third, McCain, is probably against it. If they only lose three, they can lose two more and still get it through. They only need 50 votes. I think it's going to come up in a couple of weeks and it's going be one of the really exciting Senate votes of a long time.

CROWLEY: It will be fun to watch, for those of us that like to watch that sort of thing. Speaking of Lincoln Chafee, I'm really interested that, in fact, they may not want another Republican to run against him.

NOVAK: The establishment -- the Republican establishment, that means the administration, has been pressuring the mayor of Cranston, Rhode Island, Stephen Laffey, who is somewhere to the right of Chafee, not to run against him. They say that Chafee has a better chance to win in the fall in Democratic Rhode Island, and they say they get his votes sometimes, as on the John Bolton nomination, which he says he's going to vote for.

CROWLEY: My home state, Maryland, we've got an open Senate sea there, what looks like it might be pretty fun.

NOVAK: Lieutenant governor Michael Steele, who's an African- American, he looked very good at the convention in New York, they have just about talked to him into running for the Senate. He wanted to run for reelection for lieutenant governor, for an open seat, and that he would be the first Republican elected since 1980 to the Senate from Maryland. Could be two African-Americans, if former Congressman Kweisi Mfume wins the Democratic nomination.

CROWLEY: And I know we can't possibly look in your notebook and not have an item about Tom DeLay.

NOVAK: No. Circle your calendar, Candy, for May 12th. For only $200, can you go to a -- at the Capitol Hilton, a Tom DeLay Appreciation Night put on by conservative groups. And attendance will be taken. They will find out who is on board for Tom DeLay on May 12th and who isn't, so be careful.

CROWLEY: Interesting. We'll see -- and much may change between now and then about the guest list. NOVAK: Who knows?

CROWLEY: All right. Thanks, Bob Novak, appreciate it.

NOVAK: My pleasure.

CROWLEY: And remember to tune in tomorrow at 2:30 p.m. Eastern, when Bob will have South Dakota freshman Senator John Thune as his guest on "THE NOVAK ZONE."

Turning to our Friday "Political Bytes." The president's nominees to head two federal agencies are on hold. The Senate Health Committee has delayed a vote on Lester Crawford, seen here on the left, to lead the Food and Drug Administration. According to a spokesman, the committee chairman has requested an investigation into anonymous allegations about Crawford by an FDA employee.

Meantime, the nomination of Stephen Johnson to lead the Environmental Protection Agency is also in a holding pattern. Senate Democratic -- senator Tom Carper placed the hold on Johnson. Carper accuses the White House and the EPA of stonewalling his request for pollution research.

The actress and activist Jane Fonda is well known for speaking her mind, and last night here in Washington, she took aim at the U.S. decision to go war in Iraq. In remarks quoted by the "Atlanta Journal-Constitution," Fonda suggested the Bush administration went to war to avoid appearing, quote, "unmanly." Fonda went on to say that American presidents continue to wage wars because they fear being "blamed for premature evacuation." And that is also a quote.

On this April 15th, have you put your tax forms in the mail? President Bush apparently has, it and we have details on his financial filing. Plus, a Bush cabinet member shares his inside take on the fight over Social Security reform and whether the president is willing to give ground. More INSIDE POLITICS ahead.

(COMMERCIAL BREAK)

CROWLEY: The markets are closing on Wall Street, which means I am joined by Kitty Pilgrim in New York with "The Dobbs Report."

KITTY PILGRIM, CNN ANCHOR: Thanks, Candy. Well, stocks are steeply lower. The Dow Industrials are logging their third straight triple-digit loss. All the major averages are at their lowest levels of the year. Let's take a look. Now, the final trades are still being counted, but we have the Dow down a 198 points. The Nasdaq two percent lower. It's now down nearly 11 percent this year.

And the main reason for selling: several companies have posted weak corporate profits in recent days. IBM is the biggest name and today IBM shares tumbled $6.50. That led technology stocks lower across the board. And those results are raising new concerns about another round of tech-sector weakness.

Let's move on to some economic figures. Manufacturing also facing a slow-down. A measure of factory output in March dropped for the first time in six months. That's partly due to a drop in production of cars and trucks.

And another jump in import prices is raising concerns about the stability of the economy. Surging oil prices factored into a nearly 2 percent jump in import prices.

Well, it's pretty clear, today is the tax deadline day. And if you've waited until the last minute, you are not alone. 10 percent of taxpayers have actually put their's off until today.

Now in all, Americans spend an estimated 6.6 billion hours preparing their taxes.

Coming up on CNN, 6:00 p.m. Eastern on LOU DOBBS TONIGHT sending the kids to college is part of the American dream, and now a Florida lawmaker wants to allow children of illegal aliens to have access to in-state tuition benefits.

(BEGIN VIDEO CLIP)

JOYCE TARNOW, FLORIDIANS FOR SUSTAINABLE POP: For every illegal immigrant child that gets admission under a tax subsidized tuition plan, there's another American-born student who does not have access to that place at that public university.

(END VIDEO CLIP)

PILGRIM: Also tonight, in "Broken Borders," a crackdown at a military contracting company uncovers 86 illegal workers, some may have had access to U.S. Navy Ships.

And we look at what the Department of Homeland Security is doing to keep illegal aliens from working in highly-sensitive areas.

And then, the breakdown of the Department of Homeland Security budget. Lou, we'll talk with Congressman Christopher Cox, who says the giant agency is not spending its money wisely.

And a bill has been proposed that could grant a million illegal aliens amnesty to work on farms on the U.S. Tom Bias from the National Farmers Union will join us to tell us why this is a grave mistake. All of that and more tonight at 6:00. But for now, Candy, back to you.

CROWLEY: Thanks, Kitty.

INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: Bill Frist sets the blogosphere on fire over plans to portray the blocking of judicial nominees as a matter of faith.

On this IRS deadline day, are you feeling taxed to the max? We'll talk tax reform and more with America's new commerce secretary. A bridge to the future? We'll take a drive to Brooklyn in search of the political play of the week.

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

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CROWLEY: Welcome back. I'm Candy Crowley, filling in for Judy this Friday.

In the coming hours, accountants, tax attorneys and procrastinators across America can finally breathe a sigh of relief. The annual race to beat the IRS filing deadline will be over along with the numbers crunching hand-wringing and stomach churning. Let's face it, calculating what you owe Uncle Sam is not getting any easier. But at least some people can laugh about it, like the suits featured in David Letterman's top signs, your accountant doesn't care anymore.

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DAVID LETTERMAN, LATE NIGHT WITH DAVID LETTERMAN: No. 2.

UNIDENTIFIED MALE: Instead of working on your taxes, he's reading lame jokes on Letterman.

LETTERMAN: That's right. That's a bad sign right there. Just doesn't care.

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CROWLEY: If wading through tax forms and tax law has not left you amused, we understand. But simplifying the tax code isn't so simple. Our White House correspondent Suzanne Malveaux reports on the push for and hurdles too reform.

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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That's why we need simplification. And that's why we have got to make sure everyone pays their fair share.

SUZANNE MALVEAUX, CNN CORRESPONDENT (voice-over): President Bush is pledging to simplify the country's massive tax code. But this year, taxpayers filing the returns could be just as confused as ever.

UNIDENTIFIED MALE: It is seven times longer than the Bible. I mean, that's a lot of stuff. And there's just page after page not only of the law itself, but also the regulations that go with it. And it's written in ways that frankly I can't understand.

MALVEAUX: This from the man appointed by President Bush, who's in charge of recommending how to fix the broken tax code system. Former senator Connie Mack heads the president's bipartisan advisory panel which has until summer's end to submit its recommendations.

UNIDENTIFIED MALE: We're going it look at the value added tax, we're going to look at the national sales tax, we're going to look at the flat tax.

MALVEAUX: It's the alternative minimum tax or A.M.T. that Max says will most dramatically affect taxpayers in the coming years forcing them to pay more.

UNIDENTIFIED MALE: This is a stealth tax code. Most people don't understand or don't know that we really have two separate tax codes for individuals in this country.

MALVEAUX: One tax code offers tax breaks, deductions, and accounts for inflation in determining how much someone owes the government. The other, the alternative minimum tax does not. Under its formula, taxpayers generally owe more.

Now only the wealthiest Americans are subjected to the higher tax system, most of those making between $200,000 and $500,000 a year. But tax analysts say because of the way the A.M.T. is set up, it will soon begin to hit many in the middle class.

Within 10 years, more than 75 percent of taxpayers with an income of $50,000 and up could be subjected to this higher tax calculation.

Getting rid of the A.M.T. would take an act of Congress. And while tax experts agree the overall tax code needs fixing, they differ on how to do it.

MAX SAWICKY, TAX ANALYST: We should tax all income the same. We should tax whether it's capital gains, dividend, interest or wages, they should all be taxed under the same tax rates.

MALVEAUX (on camera): The president's panel must submit recommendations by the end of July. But the question remains whether or not it will get much of a hearing. The president has already staked out reforming Social Security as the centerpiece of his domestic agenda. And so far Congress has had little appetite to take that on.

Suzanne Malveaux, CNN, the White House.

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CROWLEY: On this April 15, and I'm sorry to keep reminding you of the date, I did talk about tax reform and more with Commerce Secretary Carlos Gutierrez. I asked him what could constitute quote, "incredibly radical solutions," which by some accounts the tax overhaul panel is expected to propose?

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CARLOS GUTIERREZ, COMMERCE SECRETARY: Well, the president's been very clear on his expectations of the panel's recommendations. He wants the panel to come back with ideas to make the tax code simpler.

As you know, we have a very, very complicated tax code. The president wants to make the tax code fairer. And the president wants a tax code to promote growth, to be pro-growth. He's also mentioned that he would like the tax code to reflect basic values of our country. He wants a tax code to promote ownership. And he also wants a tax code to promote charitable giving. All other suggestions he wants to see what panel's going to come up with.

CROWLEY: You know, you'll forgive me, but I have covered politics for an awfully long time and I don't think I ever knew a president who didn't say he wanted to simplify the tax code and make it fairer. Do you get any sense that there is any momentum behind anything that might make a major change in the tax code?

GUTIERREZ: Well, I believe there is plenty of momentum behind the current tax code. As we know, the tax code was -- the tax reductions were put in place in 2001, 2003. Those tax cuts have spurred growth. We have a very strong economy today.

The other thing I would say, Candy, is that our president has proven that he's been able to do things that perhaps in the past we have just talked about, but haven't been able to do. I have a great deal of faith that this president will be able to do for the American people what they want, which is a simpler tax code, a tax code that is fair and a tax code that promotes growth.

CROWLEY: Well, you get me right into my next question, which is actually about Social Security. I know you've been out promoting the president's plan.

Mr. Hubbard also said that the president might be willing to talk about add-on private accounts, that is, nothing that takes money out of Social Security, but a private account that allows people to invest in the market. Is that on the table? Is it something the president supports?

GUTIERREZ: Well, Candy, the president has been very clear in what he would like to see. And the ideas that he would like to receive on a national level. He wants a dialogue, he wants a debate, he wants full participation because this is an important national problem.

The president's stated that he does not want to make changes for people who are 55 or older. He does not want to solve the problem simply by raising pay roll taxes. That would be a band-aid solution. That's too easy to do. We deserve better, we deserve a fundamental fix to the system.

And the third thing, the president said, is he wants to give the option, the voluntary opportunity for citizens to create their personal accounts. Everything else he would like to hear ideas.

CROWLEY: Mr. Secretary, you've been a very successful private businessman. I wanted to ask you just a quick question, we don't have that much time. What's wrong with the job market? It has sort of almost consistently underperformed in adding new jobs. Why has it been so sluggish?

GUTIERREZ: Candy, our economy is very strong. Our economy grew last year at 4.4 percent.

CROWLEY: But specifically on the jobs.

GUTIERREZ: Well, our unemployment rate is down to 5.2 percent. That doesn't mean we're satisfied with that. The president said we will not stop until every American who wants to work is working. This economy has created over 3 million jobs since August of 2003. We are growing. We are creating jobs. Average household income in up 10 percent since the president took office.

So the economy is strong, we're working to make it stronger. And the president's policies are clearly behind the strength in our economy.

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CROWLEY: We are not quite done with the tax thing.

A tax report today from the White House. President and Mrs. Bush reported taxable income of more than $672,000 for 2004. They paid more than $200,000 in taxes. They donated more than $77,000 to churches and charitable organizations.

Vice president and Mrs. Cheney reported the taxable income of more than $1.3 million. They paid more than $393,000 in federal taxes on that. And they contributed more than $303,000 to charity.

Baseball fans still thrilled about the Washington Nationals' game last night May think the play of the week is a done deal, but Bill Schneider has other ideas. Stay tuned to find out who he thinks scored.

Up next, you knew it had to happen, bloggers are having a field day with reports of Bill Frist, Christian conservatives and the fight over judicial nominees.

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CROWLEY: Senator Bill Frist is all the rage online today, and I suspect we mean that literally. We check in now with our blog reporters Cal Chamberlain and Jackie Schechner. Jackie.

JACKIE SCHECHNER, CNN BLOG CORRESPONDENT: Hi, Candy. I like that one.

We're calling it Bill Frist Friday on the blogs today. Not to be outdone by House Majority Leader Tom DeLay, who has been the center of the attention most of this past week, today it is Senate Majority Leader Bill Frist who's got himself a two-fer.

First, it's the Washington Post article that's been spinning around talking about how Frist is ready to move forward on the nuclear option -- that would be on the filibuster. You'd think that the right side of the blogs would be really happy about this article. Not so. Captain Ed over at Captainsquartersblog.com leading the charge, saying, "Not one dime." He's not going to give any more money to the Republicans until they stop dragging their heels and actually do something. He's says it's just all taking so long.

Aaron over at Blue State Conservatives agrees. That is radiobs.net/thebluestateconservatives. And he says, "End obstructionism or no more money." And he says, "Until the GOP leadership in the Senate grows a spine and takes on the Democrats on judicial nominees, they will not see one dime of my money."

CAL CHAMBERLAIN, CNN BLOG CORRESPONDENT: And then over on the left, we have Barbara O'Brien at the Maha Blog at mahablog.com, who has a post about the importance of keeping the filibuster. And she evokes good old Jimmy Stewart.

She says, "I keep thinking that if the Democrats really did have some pull in the entertainment industry, they would see to it that the old film classic 'Mr. Smith Goes To Washington' would be on television, broadcast and cable 24/7." That's kind of funny.

And another blogger that's concerned with keeping the filibuster intact and wants to highlight groups that quickly and quietly make sure those checks and balances remain in place is Moxie Grrrl. And that can be found at Moxiegrrrl.com. And that's G-R-R-R-L -- for the transcribers -- com. And she says, "One such effort came from the Alliance for Justice, who created a simple animation designed to teach the public about what's happening without resorting to impassioned heart-string tugging. And it's reminiscent of School House Rock's 'I'm Just a Bill' but without the catchy tune."

And the animation she's talking about is Save Phil, and it's Phil A. Buster. And you can go to savephil.com and watch the animation with his little pals, Checks and Balance. It's kind of funny.

SCHECHNER: Over at No More Mr. Nice (sic) blog -- that is Steve M. over there; it's nomoremr.blogspot.com (sic)-- he has an idea for moving forward. He says he "admires the Democrats' success in blocking the worst of Bush's judicial nominees and supports the fight to save the filibuster." He says, "But at a certain point, shouldn't the Democrats go public with the actual case against these nominees?"

He's got two examples he's talking about here. One is Justice Pryor and his defense of handcuffing prisoners to hitching posts. The other is Justice Brown's defense of racial slurs in the workplace as protected under free speech.

There is more details. That's a short summary. But go take a look at that one.

CHAMBERLAIN: And then yesterday, the New York Times was reporting that Frist is engaging in a telecast with religious leaders aimed towards demonizing those who oppose the removal of the filibuster as being against people of faith, and he had this to say. He says, "Frist has every right as a citizen to participate in a religious setting, but it's disturbing to see him advocate parliamentary procedure change with constitutional checks and balance impact from an openly sectarian religious framework."

SCHECHNER: So over at the liquidlist.com, it is Shawn over there. He says, "Beware. Beware the new machine. When policy is announced at a Kentucky megachurch, you know things are getting just a little out of hand." He says that Majority Leader Frist would make these announcements in such a venue "illustrates a hard and ugly truth that the religious right is today's most powerful and well organized political machine."

Then he goes on to say, referencing back the era of Boss Tweed, "Unlike Boss Tweed and his sort, James Bobson and Chuck Coleson are not out to help improve the lives of working men and women. No, their way leads to a very scary place. The time is here for regular Americans to take note of these developments and fight back hard."

So a lot of stuff that they're talking about.

Real quickly, we also want to add to you, Americablog.org has, "Republicans to Step up Attack Over Judges Even More." Joe in D.C. over there pointing to an Associated Press article saying that in response to some of the liberal ads that are coming out now that Republicans are seeing, that they want to put some muscle behind their pitch. And they wonder over there at America Blog, "In the current climate, what do aggressive and muscle actually mean to the G.O.P.?"

So, I'm sure that Tom DeLay is very happy that it's not him in the blogs today, and it's switched over now to Bill Frist. But this is what they are talking about on this Friday.

Candy.

CROWLEY: Well, as always in politics, what goes around comes I am sure. Next Monday someone else will be in the spotlight. Thank you all very much.

The passage of time leads to a change of heart for a New York lawmaker. Up next, how one committee vote captured the political play of the week.

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CROWLEY: Most people have strong opinions about the death penalty, but opinions can change over time even on issues of life and death. Our Bill Schneider found a change of heart big enough to bring home the political play of the week.

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BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): A committee vote in the New York State Assembly this week.

JOSEPH LENTOL, (D) NEW YORK ASSEMBLY: The bill is not reported until the bill is dead.

SCHNEIDER: And the impact.

UNIDENTIFIED MALE: History was made in New York yesterday.

SCHNEIDER: The committee voted not to reinstate the death penalty in New York, at least for the foreseeable future. Brooklyn assemblyman Joe Lentol led the effort, which was a surprise because Lentol had voted to restore New York's death penalty ten years ago, even though has father, Assemblyman Edward Lentol, had sponsored the bill that first abolished New York's death penalty back in 1965.

LENTOL: He and I always had heated discussions on the death penalty. I was always for it and he was against it.

SCHNEIDER: What changed? Violent crime rates have gone down sharply since 1994 all over the country.

JOE BRUNE, (R) N.Y. SENATE MAJORITY LEADER: We think that's because we've had a death penalty.

SCHNEIDER: But not one person has been executed in New York since 1995. In fact, U.S. public support for the death penalty has gone down with the crime rate since 1994. Lentol's committee held public hearings all over New York state.

LENTOL: My mind hadn't completely changed until -- it probably did change during the course of the hearings, hearing arguments that I've heard all my life from my dad being reinforced by a considerable number of people who were law professors, police officers, ordinary citizens, doctors, people who express their views on the death penalty.

SCHNEIDER: Lentol was also influenced by another figure he once met who changed his mind about capital punishment.

LENTOL: John Paul II said, no, that's not good enough. All instances capital punishment is not OK. And that -- he changed his mind. So I changed mine.

SCHNEIDER: Assemblyman Lentol closed the circle this week with a historic vote switch.

LENTOL: Maybe my father got it right, you know? Sometimes you grow up, you don't know that -- you think you're the smart one. And you realize that your parents ain't so dumb after all. And maybe they taught us something we ought to have learn learned early why on.

SCHNEIDER: Like the political play of the week.

(on camera): How can a politician switch positions? Well, times change, realities change, but the values of faith and family endure. And they mean something especially here in Brooklyn.

Bill Schneider, CNN, Brooklyn, New York.

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CROWLEY: After three decades, the wait is finally over. Up next, the president helps usher in a new era of baseball here in the nation's capital.

(COMMERCIAL BREAK) CROWLEY: We have some breaking news we want to tell you about. A CNN has confirmed that Mark Hacking in Salt Lake City, Utah, has pleaded guilty this afternoon to the murder of his wife Lori.

This was a case that dominated Salt Lake City media all of last summer. The plea of guilty means that hacking will not receive the death penalty. He will be eligible for sentencing of up to six years to life.

Lori Hacking's decomposed remains were found in a land fill in October. Prosecutors were unable to determine if she was five weeks' pregnant as she had told her friend.

Authorities have long believed that Lori Hacking was killed after she confronted her husband over deceptions about his education and plans to become a doctor. You will recall the couple was packing for a move it a North Carolina Medical School where it turned out Mark Hacking was not enrolled and had never applied. Lori's disappearance came shortly after she discovered that.

Once again, Lori Hacking, the murdered wife of Mark Hacking -- Mark Hacking has pleaded guilty to that murder. This means he will not get the death penalty. We expect sentencing in a couple of months. He could get anything from 6 years to life.

And that is it for INSIDE POLITICS. I'm Candy Crowley. "CROSSFIRE" starts right now.

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