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CNN Live At Daybreak

State of the Union Major Challenge for Bush

Aired January 29, 2002 - 06:01   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.
CAROL COSTELLO, CNN ANCHOR: President Bush and congressional Democrats may be on the same page when it comes to the war, but on domestic issues, they're reading from different books.

As CNN Senior White House correspondent John King reports, one of those issues plays a leading role in the State of the Union.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: He is on the one hand the wartime commander in chief riding high in the polls, but at an uncertain time in the mission. On the other hand, the president of a country in recession suddenly again running deficits.

STEPHEN HESS, BROOKINGS INSTITUTION: A really skillful president is a two-ball juggler. He's got to keep both those balls in the air at the same time and be able to catch them.

KING: So the State of the Union address is both a major moment and a major challenge.

SEN. CHUCK HAGEL (R), NEBRASKA: I don't recall a time or have read of a time, certainly in modern political history, when a president will deal with as much or has dealt with as much as what the president and the Congress will deal with this year.

KING: Wartime Washington is a city of shifting allegiances, remarkable bipartisanship when it comes to the war on terrorism overseas, but a widening political divide if the issue is fighting unemployment here at home.

REP. NANCY PELOSI (D), MINORITY WHIP: It's clear to me that the economic policies of the Bush administration have not gotten the economy going. We need to hear something different from the president on Tuesday night.

KING: It is a congressional election year, and the economy and the return of deficit spendings will dominate the domestic policy debate.

HAGEL: Democrats, it seems to me, have to be careful not to overreach, not to be too partisan, not to push too far or blame Bush or the Republicans for every ill that we have to deal with in this country. PETER HART, DEMOCRATIC POLLSTER: If you think that we will arrive at the end of 2002 and see a whole bunch of commercials about war and what went on there, I don't think so. It'll be right back to the domestic issue. That's what's going to count.

KING: Democrats think they have the upper hand on the domestic front. Challenge for the president is proving his popularity isn't limited to the war overseas.

KEN DUBERSTEIN, FMR. REAGAN CHIEF OF STAFF: That's the right thing to do, because if you hoard your chips, they waste away. So I think you're going to see him spend them wisely for his priorities, especially straightening out the economy.

KING: Enron is a wild card, a blossoming business scandal that some believe could prove a political headache for the Bush White House.

HESS: While it hasn't come into the White House as such, there are an awful of the president's friends that are involved, and you should -- can be sure that sort of a subliminal theme of the Democrats will be how to use the Enron crisis to remind Americans that those fellows are George W. Bush's friends.

KING: The stage for the speech is a Capitol under heavy guard. A few miles away, another reminder of the day that primes any discussion of the State of the Union.

John King, CNN, the White House.

(END VIDEOTAPE)

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