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On the Story

Story of What Caused the Raised Terrorism Alert; Story of Political Reputation Howard Dean Has in Vermont

Aired January 10, 2004 - 10:00   ET

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

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


KELLI ARENA, CNN JUSTICE DEPARTMENT CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on what we covered this week. I'm Kelli Arena, on the story of the terrorism threat, what happened and why some areas and sectors are still on high alert.
CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: I'm Candy Crowley, in Des Moines, on the story of nine days and counting to what they call in these parts the first real contest of the presidential race and whether Howard Dean can be stopped.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace, in New York, on the story of the political reputation Howard Dean has in Vermont, the state he led for 11 years.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: I'm Dana Bash in Crawford, Texas, on the story of a presidential proposal to give illegal immigrants temporary legal status if they have a job.

KATHLEEN HAYS, CNNFN ECONOMICS CORRESPONDENT: And I'm Kathleen Hays, on the story of how a strengthening economy still doesn't pump up the job market.

We'll talk about the Martha Stewart trial and how jurors have to tell what the domestic diva has done for them.

We'll talk to CNN sports correspondent Jose Burke about whether Pete Rose hit a home run this week, whether it will carry him into the hall of fame.

And we'll listen to the president's weekly radio address at the end of the hour.

E-mail us at onthestory@cnn.com.

Now straight ahead to Candy in Iowa and the not-Deans.

(BEGIN VIDEO CLIP)

REP. RICHARD GEPHARDT (D-MO), DEMOCRATIC PRESIDENTIAL CANDIDATE: These folks here are very independent and they make their own judgment.

SEN. JOHN KERRY (D-MA), DEMOCRATIC PRESIDENTIAL CANDIDATE: Get out of the cold!

SEN. JOHN EDWARDS (D-NC), DEMOCRATIC PRESIDENTIAL CANDIDATE: You have got to give me a shot at George W. Bush. I say to the people of Iowa...

(END VIDEO CLIP)

CROWLEY: Gephardt, Kerry, and Edwards, three of the not-Deans trying to push back on the frontrunner and build up their own chances here in Iowa. The caucuses just nine days away. What we are finding here is that the excitement builds because no one really knows what's going on. Very hard to have any of the polls with any reliability, because no one really knows who is going to turn out to these caucuses.

Howard Dean, of course, and those who he's attracted, newcomers, many of them, to this kind of contest. So not sure how many of them will turn out.

Obviously, the big news yesterday was a sort of a 50-50 day for Howard Dean, who wasn't in Iowa, but some of his four-year-old words came back to haunt him, sort of dissing the Iowa caucuses. At the end of the day, we saw Senator Tom Harkin, the very big political name for Democrats here in the state, come out and endorse Dean. Maybe not saving the caucuses, but certainly saving the day.

HAYS: Candy, tell us, how predictable are the folks in Iowa? How much are we going to say, well, Dean's ahead in the polls, he's probably going to win? What can we expect?

CROWLEY: Well, there's some of that. And we don't -- I'm not really sure -- look, if I had to bet, I suppose I would bet on Dean. But here's the problem with Iowa. It's not like you go in, you check off a name and you leave.

You go to your school room, you go to your church, you go to your community meeting hall, and you and your neighbors sit around and talk politics for two to three hours. And then you stand up and go to whatever corner you want to be in, the Dean corner over here and the Kerry corner over here, et cetera, and a lot of people can change their minds going into these caucuses, thinking, well, I'm going to vote for Kerry. And then maybe changing their mind to Gephardt and that kind of thing.

Plus, it's awfully hard. It is Iowa, it is January, it is really cold. The sort of weather predicting here has to do with if it's really, really cold, who's voters stay home and whose still go to the caucuses? So it's very hard to predict.

WALLACE: Candy, take us behind the scenes. I know you were reporting that some of the other campaigns that did not get the endorsement from Senator Harkin, are saying, look, this is coming so late, it's not going to make that big of a difference. But privately, how concerned are they that having Harkin coming out for Dean can really give Dean even more momentum going into the caucuses? CROWLEY: Well, you know, it's interesting, because if you are undecided -- and here's a man that is very well known statewide and very well liked among Democrats -- it's got to be a plus for Howard Dean. On the other hand, they have been -- there's sort of this union split here between the unions, largely the industrial sort of older unions behind Gephardt, and then the kind of higher taxed more service-oriented unions for Dean.

So you had this constant sort of pounding on Tom Harkin for weeks, who everyone pretty much thought would endorse Dean. Then there was a time they thought he would hold back. It's got to hurt not to have Harkin's endorsement. On the other hand, maybe it is a little too late. But let me tell you something, these people would have lot rather had Tom Harkin's endorsement than be sitting around saying, oh, well, it's too late.

BASH: Candy, there have been reports this week, kind of anecdotal reporting, that there is some second guessing of Dean. People who said that they were gung-ho for Dean now are having some second thoughts. As you talk to people in and around Iowa, are you picking that up at all?

CROWLEY: You do pick it up. Look, the people that are firmly, you know, heart and soul committed to Howard Dean, are not swayed by anything they see on the news or in the ads or anything else. Some of these are, as I said, newcomers to the race.

This is their guy. He's what brought them in. But there's this -- about a quarter of Iowa voters we think are undecided, and the rest of them can be sort of very soft in who they currently support.

So, you know, what you hear on the streets, and when we talk to people, they say, well, you know, I sort of liked Howard Dean, but he keeps -- he seem to have foot in mouth disease. All of these things that we heard, he said this, he said that, he doesn't think -- he's sort of questioning whether Osama bin Laden is guilty. We aren't any safer with Saddam.

His timing of some of these remarks, his dissing of Iowa that was said four years ago but comes out now. So people are beginning to think two things. First of all, is he ready for prime time? And, second of all, the really big thing is, can he beat George Bush?

I mean, I think if there's one thing you hear here is, I want the guy -- these nine guys are fine. We know them all, but I want the one that can beat George Bush. And some of these missteps that come up pause a lot of people to think, OK, is this the guy? So I think that's where it's coming from, and we do hear it on the streets.

ARENA: Candy, what about Wesley Clark? I mean, there seemed to be some suggestion that he was narrowing the gap in the polls. I mean, is he really gaining traction? And could he be the guy?

CROWLEY: Well, you know, in Iowa, he's not even contesting here. So he's been in New Hampshire. And certainly, what we've seen in our polling is this: that when support falls away from Howard Dean, it tends to go to Wesley Clark.

Why? Democrats think to go up against George Bush. They need someone who is very strong on defense, and Wesley Clark has that key title, "general," in fronts of him.

He's a novice politician. He hasn't gotten as much scrutiny as Howard Dean, or even any of the others have, because he was the latest coming into the race. So he is sort of the natural fallback position for some of these people who are beginning to have second thoughts about Dean. How sustainable that is, when that spotlight goes on Wesley Clark, we'll have to see when we get to New Hampshire.

HAYS: So Candy, you've been following these campaigns for so long. How important is Iowa? And not just for the frontrunner, because we know there can only be one person who comes in number one. But how important then is it to be number two and number three in order to keep momentum, maybe even build some, remain a viable candidate? I'm thinking about Kerry, I'm thinking about Gephardt.

CROWLEY: Yes. If they have a theme song for this, for all the others, it would be "Stayin' Alive." I mean, that is the whole point here is that you just want to stay alive to get to the South.

Here's the theory, that if you can stay in there and you can do better than people thought you were going to do, if you can come in a strong third or even a surprising second or anything like that, that keeps you in the buzz. It will get you through New Hampshire, where everyone assumes Howard Dean will win, and it takes you into the next phase, which is sort of a multi-state primary, where you're going into the South.

You're going into South Carolina, New Mexico, Arizona, places where a lot of these people think are not Dean's natural constituencies. Now, the problem with that, of course, is if Dean has the momentum, a lot of people fall in line, thinking, OK, this is the guy. But staying alive is the key thing for the seconds and the thirds so that they can get into some -- what they believe will be friendlier territory in the South.

ARENA: Well, Candy, thank you. I think we're done, right?

Of course, a big question mark over campaign 2004 is the risk of terrorism. And coming up, we're book bach on the story of how and why the government lowered the threat level yesterday.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY SECRETARY: Although we've returned to yellow, we have not let our guard down. Yellow still means that we are in elevated risk of attack and we will maintain particular vigilance around some critical resources and locales.

(END VIDEO CLIP) ARENA: Homeland Security Secretary Tom Ridge yesterday lowering the terrorism threat level, but making clear dangers remain. Welcome back. We're ON THE STORY.

Well, we heard it straight from him, we're at yellow, folks. But it is a mottled yellow, because there are certain areas within cities, including New York City, the financial district, Las Vegas, around the strip, Washington, D.C., some government buildings that will remain on a higher level of alert.

Now, they're not saying that this is orange, but what they're saying is it's sort of a yellow-plus. Chemical plants, nuclear facilities and so on. So it's a very different approach than we've seen in the past, but something that homeland has said all along was the ultimate goal, to be able to refine the system to react specifically to the intelligence.

BASH: Kelli, what are your sources telling you about whether or not there actually was a terrorist plot that was stopped over the past few weeks during the holiday period when the alert level was so high?

ARENA: What they're saying at this point, Dana, is they don't know. What they do have is information from detainees that have been captured that said, hey, when security is increased, when you change your strategy, that does interrupt terrorist plans. There was some information that Secretary Ridge spoke about in Istanbul, saying, gee, we attacked the British, you know, consulate embassy, not the American embassy, because there was a change -- because the security was just too tight.

So they do know that it does make a difference. But whether or not this actually thwarted a plan or merely postponed a plan, or if they even had the correct intelligence in the first place, is all still very much a work in progress. And until they actually get somebody who can say, oh, yes, we had this plan in progress (AUDIO GAP).

CROWLEY: Kelli, one of the things I was watching from out here, there were a couple of days of, well, we're going to move back down to yellow. And I kept thinking, well, if they know they're going to do it, why don't they go ahead and do it? I mean, are they waiting for some deadline to pass? What happened in those two days?

ARENA: Well, there was a lot of discussion, Candy, and here's why. The original intelligence that came in gave us a window of November to early February. I've heard February 5, 6. This sort of fluctuates. But that was the window of opportunity, of vulnerability that so many intelligence officials pointed to.

So there was a great deal of debate. The volume of threat information hasn't really declined all that much. It's still very high. It's very general in nature.

Before, it was a little more specific. They were getting heavy- duty information on the aviation front, as we saw certain flights canceled and delayed and so on. Heavy-duty information about possibility vulnerabilities out of flights from Mexico, France, the U.K.

Right now, it's just general. It's, yes, we want to attack. Al Qaeda wants to attack. They want to do something, "spectacular."

So there was a lot of debate back and forth as to whether or not you needed to wait until that February window was sealed or whether you went down now and did this sort of two-pronged approach. And everyone was comfortable as long as certain sectors and areas remained on a higher level.

WALLACE: Kelli, picking on what you said a little bit earlier, questions even about the intelligence, are any of your sources expressing any concern that al Qaeda could be putting out sort of a misinformation campaign, trying to get the administration to be scuttling around and that there's no real "there" there?

ARENA: There's always that concern, Kelly. And here's what one person said to me. A very high ranking law enforcement official said, there's always the chance that there was this concerted campaign to sort of test the waters, see what the response would be. What security precautions would be put into place to find out where the vulnerabilities were that they could exploit later on.

So this could have been a test run. We know that al Qaeda did test runs on those airlines. They took flights back and forth before they actually attacked on September 11. So this, too, could have been a test run.

The thing that took this to a different level right before the holidays, was that there was so much information and much of it was corroborating other information that had come in. And there were some reliable human sources of intelligence that were also involved in that mix, which just gives it a little more credibility and validity. And, really, as we saw, really triggered some very serious action on the part of this administration.

But the point you raise, though, is something that is always at the back of these guys' minds, are we being played? And it's always a possibility.

HAYS: Well, the government taking more steps on another front. This new U.S. visit program I think is so fascinating. You're going to find a way to surveil people electronically as they come in from foreign countries.

I've talked to people who said they think it's potentially an infringement, big brother, big sister. On the other hand, they say, hey, if it will stop terrorism, go ahead, fingerprint, I don't care.

ARENA: Well, you know, that's really split right down the middle on this issue. And there are those who say, look, whatever we can do let's do. OK?

We need to be able to find people when we need to find them if we get intelligence. We may not have intelligence when they come into the country, but we may get it subsequently, and so we need to be able to track them down and track them down quickly.

There's the other part of the coin, and some officials say, well, you know what? Terrorists, or those who are sent in for suicide missions, usually it's very typical that their very first crime is blowing themselves up and whoever else they can take with them. So they said with somebody starting with a clean slate, that's not going to help stop them, you know?

You can fingerprint them, you can photograph them, you can put a chip in their head. It doesn't matter. You won't be able to stop them if you have not picked up the intelligence about a plan and attach that specific individual to that plan.

So if al Qaeda and related groups continue to try to recruit people with no track record, with -- that are not known to the intelligence community -- and there are a lot of young men who fit that description and who have a desire to fight for the cause -- they say even that won't help.

HAYS: Some people say at least people couldn't use the same visa, start keeping people in and out of the country, which we've heard stories about that in New York over and over.

Well, like the terror alert, the stock market was up and then down in recent days. I'm back on the story of the economy and the markets after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN SNOW, TREASURY SECRETARY: We're not out of the woods yet. We all know that. But we clearly have a much stronger and healthier economy today, and the prospects for one going forward than was the case a year ago.

(END VIDEO CLIP)

HAYS: But he does admit we're not out of the woods yet. Treasury Secretary John Snow this week. And, of course, not many new jobs in the woods. That's the problem.

Welcome back. We're ON THE STORY.

The December employment report, one of the most closely watched reports on Wall Street. People were expecting a gain of 130,000 to 150,000 jobs, the fifth month in a row of improvement. We've seen other signs of improvement.

The holiday shopping season was pretty good. Third quarter GDP, the economy's growth rate, was good. Instead, the economy only created 1,000 jobs over the past five months, less than 300,000 jobs. In a good month, in a more booming economy, it would be -- it wouldn't be that big of a deal to create 300,000 jobs in one month.

ARENA: That's astounding. CROWLEY: Kathleen, you know, how can you go from 250,000 jobs expected to 1,000? Something clearly is wrong here. Is there any theory on why the economy is not creating jobs? I mean, I think I saw a report that manufacturing was up. What's going on?

HAYS: Actually, manufacturing, there was a big survey, Candy, about a week ago of manufacturing that was so strong. And it's a closely watched survey.

People said one more reason they were more optimistic is thinking manufacturing jobs would finally increase. Instead, they fell for the 41st month in a row. Now, some people are saying, you know, it could be that partly because when the economy turns, one of the last things that turns is jobs. And businesses are still reluctant to hire.

They say maybe we'll see some other (ph) provisions in the report. The problem is, there were other signs of weakness as well. There are more people than ever working part-time because they can't get full-time work.

The number of hours worked in the economy, the average work week actually declined a bit, too. If demand is picking up, you know, even if you're not going to hire a worker, you work people longer hours.

And then another thing that happened, you know the unemployment rate came down. One of the big reasons was because people left the labor force. It seems like people, some of them, are discouraged. They don't see a job out there so they stop looking.

If you stop looking for work, you're not counted as unemployed. That's the wrong way for the unemployment rate to come down.

WALLACE: Kathleen, also, are you seeing increases in productivity, other cost-cutting measures that you could see sort of this economic growth but these moves by these companies to have higher productivity, cutting costs, and that means not increasing more jobs?

HAYS: Absolutely. And, of course, that's been good for corporate profits. And that's one reason why we've been having this great stock market rally.

Dow Jones Industrials, up 25 percent last year. The Nasdaq up 45 percent last year. It's wonderful to have productivity, it's wonderful to have profits.

You know, we've talked about a jobless recovery. I wonder, can we have a jobless bull market in stocks? I think the problem with that is ultimately, companies need to have more demand for their products. And to have more demand for their products, they need to have more people working. That's one thing.

The other thing is, and another reason why Wall Street, why the stock market pulled back on this report, is because people feel, many people on Wall Street, that President Bush's policies have been good for the economy. Certainly, the dividend tax cuts, the tax cuts overall good for the economy and good for the markets. And they're worried that if the jobs don't pick up, that weakens Bush, and that could ultimately weaken what they feel is a strong plank for this stock market rally.

ARENA: I'm going to switch gears here. The Fastows this week, Enron, I had so many people just expressing shock that there would be any plea deal offered at all from his wife. You know, the judge dismissed that one. But what is the thinking here in terms of -- is it just to try to really get their hands on the bigger guys? Do they really believe that that will happen?

HAYS: Well, it has to be. And, of course, Kelli, this Enron he is really the poster child company of corporate scandal, of corporate excess. Andy Fastow, the former chief financial officer, who was the mastermind of all these off balance sheet, highly structured deals that enriched him, enriched his friends, but ultimately helped bring down the company.

And, of course, the higher officers above him, the bigger fish a lot of people want to see gotten are Ken Lay, who was the CEO, Jeff Skilling, who was the President. And the question about them is, did they know more about Fastow's deals than they let on when they were selling their stock in Enron and employees could not sell the stock, and still being very optimistic about the company.

That's the kind of thing presumably that prosecutors think Andy Fastow might be able to give up. But he's saying, I'll take 10 years in prison if you give my wife, Lea, just five months. I'll also give back $20 million. But the negotiations ongoing over the weekend. We'll see what the judge says on Monday and what the Fastows say as well.

BASH: Kathleen, another person who has unwittingly become one of the poster people for the corporate scandals officer the last couple years is, of course, Martha Stewart. Tell us what went on this week with her trial coming up.

HAYS: Well, they started jury selection. And, of course, selecting a jury for someone like Martha Stewart is not like selecting a jury if it was just you or more me, Dana. They have to fill out a special questionnaire, because people really want to -- and, you know, Martha Stewart is one of those people who inspires great love, great hate.

You know, how do they also feel about wealthy CEOs. Bottom line, there are two weeks to go over these questionnaires. On January 20, the judge will start questioning jurors, he'll start assembling the trial.

We spoke to a former SEC prosecutor on the flip side this week who said that the case against Martha could be stronger than people think. He said, you know, depending on how things go, Martha Stewart could maybe even see some jail time when all is said and done.

ARENA: Can you imagine that?

HAYS: I know. WALLACE: You know, Kathleen, people will be watching that one closely.

Well, moving from the ups and downs in Martha Stewart's life to this question: what can we learn about Howard Dean from his time in Vermont? I'm on the story on that subject right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), DEMOCRATIC PRESIDENTIAL CANDIDATE: You can't beat George Bush by being Bush-lite. The way to beat George Bush is to stand up for what you believe.

(END VIDEO CLIP)

WALLACE: And that is Howard Dean on the stump. One of his biggest messages, criticizing what he calls the Washington Democrats, saying they are too closely aligned with the policies of President Bush.

Welcome back to ON THE STORY.

I found something interesting. We spent few days this week in Vermont, where Howard Dean was governor for about 11 and a half years. And nationally, he is being portrayed by some, especially his critics, as some left-wing liberal from Vermont.

But what is so interesting, when we talk to people in Vermont, they say this guy is no left wing liberal. In fact, they say part of his administration, he was known as leading the Republican wing of the Democratic Party. That some of his biggest critics during hig tenure weren't Republicans, but Democrats, those who felt that Howard Dean was simply too conservative.

ARENA: Well, of course, you're in Vermont, Kelly. But here's my question. The spotlight has been on Dean for months now. And they really haven't been able to -- I mean, they've said kooky things, but they haven't really been able to come up with any real horrid skeleton in the closet. I mean, one has to assume there isn't one.

WALLACE: Well, part of it, let's pick up on your first comment. We're talking about Vermont.

This is a very small state. I think population, 600,000 people. It's almost the size of a city on the national scale, really.

So people say everyone in Vermont knows each other. Lawmakers, they all know one another. Their records are out there. So you really can't get away with anything corrupt.

What Howard Dean did do, and other Vermont governors have done as well, is he has sealed his records. Records from his tenure as governor for 10 years. And he's facing a lot of criticism from his Democratic rivals who say, you should be open, transparent, release those records.

But even his critics say they don't really think there's anything damaging in the closet. Maybe embarrassing correspondence, Howard Dean trying to encourage businesses to come to the state. But they don't think there's any real "there" there. But he's getting criticism for not opening those records to the public.

BASH: Kelly, I'm sitting here thinking back four years to another governor that was then Governor Bush, and I remember the stories, kind of similar stories of how he worked very closely with Democrats when he was here in Texas and that he was somebody who could get along across apart lines. But things definitely change once you get to the national stage.

Are you getting the sense, from talking to people in Vermont, that they understand that and that they see that perhaps what we're seeing is a different Howard Dean and it might stay that way, actually?

WALLACE: Well, they definitely see that, Dana. And they say that they see what Howard Dean is doing, that they believe he is doing something in a very calculated way. That he's appeal to get left wing of the Democratic Party, part of his message against the war, appealing to liberals on the left.

But that ultimately, he is going to have to come back to the center if he becomes the Democratic nominee. And what people said to me in Vermont this week, they say people laugh and say Howard Dean, could he be a centrist? Well, they say he was a centrist entirely so during his time in Vermont. But that eventually, he'll have to come back to the center on the national scale. The question is, if he's being perceived as something else, and if he face a very divided Democratic Party, how successful will he be then?

CROWLEY: Kelly, you know, is part of the problem that in these records, the 40 percent of Howard Dean's records that the other Democrats keep saying, hey, put this out there, is not the fear that there's some horrible little scandal there, but the fear that, in fact, there is something about, say, he was the first governor to sign a gay unions bill, that he was, say, against that? Because much of the support that Dean has is definitely the left of the party, and so is the sense that the fear is that some of this moderation, as they call it in Vermont, might turn off what really is the core of Dean voters?

WALLACE: You raise such a good point, Candy, because I was talking to pretty much one of the only Dean critics I could find. You get a sense that the hometown crowd is trying to protect Howard Dean. But he did say that he thinks possibly in these documents you could have something where Howard Dean expresses some of his concerns, some of his reluctance for this legislation.

And you know it was December, 1999, the Vermont Supreme Court coming out, leaving Vermont, really, with two options: either legalizing marriage between homosexuals or giving benefits to homosexuals. They came up with a civil unions legislation legalizing, for the first time in the country, civil unions.

But one -- some believe that there could be something in there, correspondence, some reluctance on the part of Howard Dean about this. And again, Howard Dean, who has been very much kind of a message of, you know, anti-corporate corruption and corporate welfare and criticizing President Bush for being too cozy with corporate America. Another thing that could be of concern, some believe, correspondence where he's encouraging businesses to come to the state of Vermont, and that that could turn off some of the left wing of the party and hurt him on the national stage.

HAYS: It must have turned off Madonna, since she gave her endorsement to Wesley Clark. Obviously, she's not in Mr. Dean's camp. What about the celebrity endorsement race?

WALLACE: Absolutely. I guess he need to do a better job to get the material girl's support. Well, it is so interesting, Madonna, all our viewers paying attention here, she is, get this, endorsing retired General Wesley Clark. She's even put up a letter on her Web site encouraging her fans to support Wesley Clark.

And endorsements, we see them all the time, but there have been a few whacky ones, you can say. You have Peter, from Peter, Paul and Mary endorsing John Kerry. But what I like so much -- and this shows you democracy at work -- Crosby, Stills and Nash. I believe -- I hope I get this right.

I think Stills is for John Kerry and Crosby and Nash say, no, Howard Dean is their guy. So even the band not quite seeing eye to eye on this one.

BASH: Well, Kelly, we're going to go next from all those presidential wannabes and those endorsements to the guy that they're all hoping to get the chance to beat. We'll talk about the president's new immigration proposal and the possible political pain or gain from that. And, also, a new space initiative that he will launch next week.

All that is back ON THE STORY right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As a nation that values immigration and depends on immigration, we should have immigration laws that work and make us proud. Yet today, we do not.

(END VIDEO CLIP)

BASH: That's President Bush on Wednesday, spelling out sweeping new changes in immigration laws that he wants to get enacted. And welcome back. We're ON THE STORY on that issue.

This was the first major policy initiative from the White House of the election year. They're billing it as an economic proposal because they say this will help fill jobs that Americans simply don't want. They're billing it as a humane proposal because, as the White House put it, this will bring out of the shadows some 10 million immigrants who are here in the country illegally, and many of them, most of them are already working.

But as you can imagine, his opponents, political opponents, are billing this as a political proposal, because they say this is just an attempt to woo Hispanic voters, which are going to be absolutely key in this next election year.

WALLACE: Dana, it's so funny. So the people you talk to, they're saying at the White House, probably, no politics involved here. But what are your sources telling you about how important politically this is for the president, especially when it comes to Hispanics? How important they'll be for his possible reelection?

BASH: Well, it's no secret that reaching, that expanding the base is the way the president's political advisors like to describe it. It's absolutely essential for him and for the Republican Party going forward, but particularly for the Hispanic vote.

This is something that they really want to keep grabbing on to. In 2000, the president did get about 35 percent of the Hispanic vote. It doesn't sound like a lot, but it's certainly more than the Republicans have in the past. But there is some question about whether or not this could backfire.

You've sort of seen a split in the reaction to this proposal. Some Hispanic groups are saying that there they're worried that this could be just a trap, if you will, because under the proposal that the president put forward, basically, these people would have six years to work temporarily legally and then would have to apply for a green card, just like everybody else. There's concern that maybe they'd be kicked out of the country eventually and not be able to get back in.

CROWLEY: Dana, I want to go -- like sort of move from south of the border to Mars. Here's what struck me about the "let's go back to the moon and let's go to mars." Sitting out here in Iowa, where we're talking about what Howard Dean said four years ago about Iowa and special interests or, you know, who is -- what state senators endorse what. And all of a sudden, here comes the president with this huge, sort of presidential vision. You know, let's go to Mars. Just wondering about the politics of that particular story.

BASH: It's nice to be the incumbent, Candy, that's for sure. And certainly, this is something that, you know, the White House is saying, oh, don't look at this as the JFK moment. Don't look at this as something that's more than it actually is.

But there's no question that the president is going to try to come out and explain that -- in a really sort of optimistic terms and tones that Americans need to know that this is an important priority for the United States. And basically, he's going to talk about something very long term, getting to the moon eventually. We're talking decades. Having a permanent presence there in order to eventually send a manned mission to Mars. You know, you've seen people sort of glued to the television sets over the past couple of weeks looking at what's going on with an unmanned mission to Mars. You can imagine what would happen if there were actually people up there. But the White House is not gone going to probably have a lot of details on this, particularly on the cost, because that is definitely going to be one of the major criticisms of this, is how are you going to pay for something like this when we have a $500 billion deficit? We're already hearing that from Democrats.

HAYS: You know, Dana, I'm wondering, switching gears again slightly, if the White House would maybe like to put former treasury Secretary Paul O'Neill on a launch into deep space.

BASH: I think they thought they did that already, Kathleen.

HAYS: Well, you know what I'm talking about. The interview's going to be on this weekend. He's obviously still smarting about the fact that he was summarily dismissed by George Bush a couple of years ago.

But referring to the president as a blind man in the room of deaf people at cabinet meetings, no interchange of ideas, what are you hearing behind the scenes? Do people care? Are they angry about this? What kind of reaction from the White House on the quiet?

BASH: Well, you know, the public reaction is that they don't do book reviews. But certainly, privately, this is not something that this White House is used to, frankly. The president surrounds himself with people who are very loyal to him, people -- most people he's known for a very long time.

Paul O'Neill was never, you know, sort of behind the scenes, was somebody who rubbed a lot with some of the president's other advisers on sort of personality and on policy issues. So it might not be that big of a surprise. But certainly, it is not something that this White House is used to at all.

ARENA: I want to pick up on just the whole thing and talking about Bush as candidate, Dana. Any concern that this economic picture will really play a larger role as we get closer to November? Or are they just thinking that it's a no-show right now?

BASH: Well, certainly, the economy, you know, the president's advisers will tell you time and time again, particularly when you're asking about, well, what about Iraq and other issues, that they still believe that this is the issue that people vote on and that presidents have won second terms or lost second terms because of. But you have seen our poll numbers recently, and others, showing that people are more confident in the way the president is handling the economy, and the president's advisers are certainly very happy about that.

But they were really, really hoping and looking forward to and really thought that there was going to be great job numbers report on Friday, as Kathleen was just talking about. They were preparing for it. The president was positioned for it. He was at the Commerce Department ready to talk about the economy. And it's unlikely he would have been there to do that if they knew that the jobs numbers wouldn't be good.

This is going to be a big, big issue, and the president is already framing his economic proposals as, make those tax cuts permanent. Democrats, obviously, we know, are saying the opposite, roll them back. That's going to be a major campaign theme, the economy, jobs, and tax cuts.

ARENA: All right. Well, hang with us, Dana.

I also would like to say thank you to Candy in Iowa. We'll be watching you ON THE STORY in coming days, Candy.

And from national politicking to baseball politics, and whether bad boy Pete Rose came clean enough to win his dream, we'll wake up our sister, Josie Burke, in Colorado, right after this.

(COMMERCIAL BREAK)

HAYS: We're back ON THE STORY, and we're back on a regular feature, sports stars in trouble. And our sports correspondent, Josie Burke, is on the phone from Colorado.

So Josie, we were just sitting here talking about Pete Rose, OK, I gambled. But you know, he hasn't said he's sorry yet. And I think a lot of people are really not moved by his latest admission.

JOSIE BURKE, CNN SPORTS CORRESPONDENT: It's really hard to imagine his concession coming off any worse than it did. And the three things that really seemed to irk his critics most -- and that group of critics is growing larger and larger by the day -- are that, number one, he's making money off of lying. He made the confession in a book.

Number two, the timing of the book. It came out the week the hall of fame announced their latest two latest inductees. And then the third thing is, not everyone is convinced that he's telling all of the truth.

WALLACE: So Josie, give us a sense of what people are saying about whether or not he could be sort of reinstated into the hall of fame or get a better standing after coming forward with what he's saying.

BURKE: Well, people are really split. There's not a single consensus, where any group of people have come out and said that he'll definitely get in, get reinstated because of the confession that he just made.

I think a lot of people thought that any kind of confession would help Pete Rose's case. But because of the different ways that there seems to be a backlash now, I think there are a lot of people who think that this kind of confession -- and it was hard to imagine there would be one -- probably hurt him.

ARENA: Well, here's what I'm puzzled by. I mean, he's been lying for all these years to everybody, the fans, his teammates, you know, officials in baseball. But not only did he come out and say, OK, yeah, I did it, but he said he's still gambling.

BURKE: This is something that's hard to believe too. But the difference that he's making is that he's gambling legally. He says the only thing that he really does is go to the track on occasion. This is something, the horse track, he grew up with his dad. So this is what he still does.

He says when he goes to casinos -- and he has been ben sighted in casinos -- he's not gambling. He doesn't have a line of credit at any casino. He's just there because somebody is paying him to sit in a chair and sign autographs for hours.

BASH: Josie, tell us exactly how it would work to get Pete Rose into the hall of fame. I mean, now that he's admitted it, what would be the process to reinstate him?

BURKE: Well, there is one judge and one jury, and it's the same person. It's Bud Selig, the commissioner of baseball. He has to decide whether to remove Pete Rose's name from the permanently ineligible list. That's step number one.

Once somebody is no longer on that list -- and nobody's ever been taken off of it -- only then could the hall of fame put him back on the ballot and let the writers vote on whether he should be inducted. But the question is, how far would reinstatement go? Would Bud Selig decide that he could come back with absolutely no restrictions?

Pete Rose says he wants to manage again. But that idea is abhorrent to a lot of people, and it seems very farfetched that Bud Selig would just open the door, throw away the key and say "welcome back."

HAYS: Kobe Bryant this week. L.A. Lakers against the Nuggets in Denver, gets booed by the fans. What's that about?

BURKE: It was really relentless. He's booed on the road wherever he goes, but this was a little different than any of the other road stops.

He was in Minnesota the night before, the game before, they'd booed him. There were a lot of signs. The booing didn't stop. It started in the pre-game introductions and it really went throughout the game whenever he touched the ball.

Bryant was asked about it before the game, after the game. He says his attitude is he goes in expecting the worst, so nothing surprises him. But a lot of observers were a little bit surprised at the tenacity and the way the crowd really stuck with it.

ARENA: Josie, how does he play? I mean, it's got to be really difficult to sort of keep your focus while everybody is screaming at you.

BURKE: He certainly had experience with it this season as a professional athlete. You're in hostile environments for whatever reason half of the time. But it looked like in this game, if you looked at his stats, even though he was the game's leading scorer with 27 points, he had an inordinate number of turnovers. And most observers say that he did look a little rattled.

The Lakers as a team aren't playing well. They just last night snapped a four-game losing streak. So it looked like in that one game in particular, that it might have affected him. And it was one interesting thing. The coach of the Lakers, Phil Jackson...

ARENA: I'm sorry. We're out of time. We're out of time. I'm going to thank you. And when you're back -- when are you back ON THE STORY on camera?

BURKE: Well, we're going up for the NFL Playoffs next weekend, the championship games, trying to see who will go to the Super Bowl. And that's my next assignment.

ARENA: All right. Hang in there.

President Bush gets the last word when we come back ON THE STORY.

(COMMERCIAL BREAK)

HAYS: Thanks to my colleagues, and thank you for watching ON THE STORY. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS," focusing this week on Martha Stewart and Phil Specter. At 12:00 noon Eastern, 9:00 Pacific, "CNN LIVE SATURDAY." And at 1:00 p.m. Eastern, 10:00 a.m. Pacific, CNN's "IN THE MONEY."

Coming up at the top of the hour a check of the top stories. But first, the president's weekly radio address.

(BEGIN AUDIOTAPE)

BUSH: Good morning.

As the year 2004 begins, America's economy is strong and getting stronger. More Americans than ever own their own homes. More businesses are investing. More manufacturers are seeing increased activity than at any time in the last 20 years.

Stock market wealth has increased by more than $3 trillion over the past year. And over the past five months, more than a quarter million Americans started work at new jobs.

In December, the unemployment rate fell to 5.7 percent from a high of 6.3 percent last June. This latest report underscore a choice about the future of our economy and the future of those who are looking for work. We can continue on the path to prosperity and new jobs, a path marked by a pro-growth agenda that has cut taxes on paychecks for 109 million American taxpayers, or we can reverse the course by raising taxes on hard working Americans. The choice is clear. Tax relief has got this economy going again and tax relief will keep it moving forward.

In my budget for the upcoming fiscal year, I will call on Congress to make permanent all of the tax relief we have delivered to the American people and our nation's small businesses. If Congress fails to act, this tax relief will disappear and millions of American families and small businesses would see tax hikes starting in 2005.

For the sake of our economic expansion and for the sake of millions of Americans who depend on small businesses for their jobs, we need Congress to act and to make tax relief permanent. Every American who pays income taxes got a tax cut. They should keep that tax cut in the future.

American families saw the child credit doubled to $1,000 per child. And they should keep that higher credit. American investors, including millions of seniors, saw taxes fall on dividend income and investment gains. They should keep that tax relief.

American small businesses received new tax incentives to invest in equipment and software. They should keep those incentive incentives.

Every American family, including every farmer, rancher and small business owner, will see the death tax disappear in 2010. Then reappear in 2011. But the death tax should stay buried.

Now is not the time to turn our backs on America's families and workers and entrepreneurs by letting much needed tax relief expire. Making tax relief permanent is a simple step that would keep our economy growing so that every American who wants to work can find a job. We must continue to take other steps to promote growth in job creation throughout our economy. We must promote free and fair trade, reform our class action system, and help businesses and their employees address the problem of rising healthcare costs.

To serve the economic needs of our country, we must also reform our immigration laws. Reform must begin by confronting a basic fact of life in economics. Some of the jobs being generated in America's growing economy are jobs American citizens are not filling.

This past week, I proposed a new temporary worker program that would match willing foreign workers with willing American employers when no Americans can be found to fill the jobs. If an American employer is offering a job that American citizens are not willing to take, we ought to welcome into our country a person who will fill that job.

The program I've outlined is not an amnesty program, an automatic path to citizenship. It is a program that recognizes the contributions that many undocumented workers are now making to our economy. This temporary worker program represents the best tradition of our society. It will help strengthen our economy, return order to our immigration system, and secure our homeland.

Thank you for listening.

(END AUDIOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com




Political Reputation Howard Dean Has in Vermont>


Aired January 10, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KELLI ARENA, CNN JUSTICE DEPARTMENT CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on what we covered this week. I'm Kelli Arena, on the story of the terrorism threat, what happened and why some areas and sectors are still on high alert.
CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: I'm Candy Crowley, in Des Moines, on the story of nine days and counting to what they call in these parts the first real contest of the presidential race and whether Howard Dean can be stopped.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace, in New York, on the story of the political reputation Howard Dean has in Vermont, the state he led for 11 years.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: I'm Dana Bash in Crawford, Texas, on the story of a presidential proposal to give illegal immigrants temporary legal status if they have a job.

KATHLEEN HAYS, CNNFN ECONOMICS CORRESPONDENT: And I'm Kathleen Hays, on the story of how a strengthening economy still doesn't pump up the job market.

We'll talk about the Martha Stewart trial and how jurors have to tell what the domestic diva has done for them.

We'll talk to CNN sports correspondent Jose Burke about whether Pete Rose hit a home run this week, whether it will carry him into the hall of fame.

And we'll listen to the president's weekly radio address at the end of the hour.

E-mail us at onthestory@cnn.com.

Now straight ahead to Candy in Iowa and the not-Deans.

(BEGIN VIDEO CLIP)

REP. RICHARD GEPHARDT (D-MO), DEMOCRATIC PRESIDENTIAL CANDIDATE: These folks here are very independent and they make their own judgment.

SEN. JOHN KERRY (D-MA), DEMOCRATIC PRESIDENTIAL CANDIDATE: Get out of the cold!

SEN. JOHN EDWARDS (D-NC), DEMOCRATIC PRESIDENTIAL CANDIDATE: You have got to give me a shot at George W. Bush. I say to the people of Iowa...

(END VIDEO CLIP)

CROWLEY: Gephardt, Kerry, and Edwards, three of the not-Deans trying to push back on the frontrunner and build up their own chances here in Iowa. The caucuses just nine days away. What we are finding here is that the excitement builds because no one really knows what's going on. Very hard to have any of the polls with any reliability, because no one really knows who is going to turn out to these caucuses.

Howard Dean, of course, and those who he's attracted, newcomers, many of them, to this kind of contest. So not sure how many of them will turn out.

Obviously, the big news yesterday was a sort of a 50-50 day for Howard Dean, who wasn't in Iowa, but some of his four-year-old words came back to haunt him, sort of dissing the Iowa caucuses. At the end of the day, we saw Senator Tom Harkin, the very big political name for Democrats here in the state, come out and endorse Dean. Maybe not saving the caucuses, but certainly saving the day.

HAYS: Candy, tell us, how predictable are the folks in Iowa? How much are we going to say, well, Dean's ahead in the polls, he's probably going to win? What can we expect?

CROWLEY: Well, there's some of that. And we don't -- I'm not really sure -- look, if I had to bet, I suppose I would bet on Dean. But here's the problem with Iowa. It's not like you go in, you check off a name and you leave.

You go to your school room, you go to your church, you go to your community meeting hall, and you and your neighbors sit around and talk politics for two to three hours. And then you stand up and go to whatever corner you want to be in, the Dean corner over here and the Kerry corner over here, et cetera, and a lot of people can change their minds going into these caucuses, thinking, well, I'm going to vote for Kerry. And then maybe changing their mind to Gephardt and that kind of thing.

Plus, it's awfully hard. It is Iowa, it is January, it is really cold. The sort of weather predicting here has to do with if it's really, really cold, who's voters stay home and whose still go to the caucuses? So it's very hard to predict.

WALLACE: Candy, take us behind the scenes. I know you were reporting that some of the other campaigns that did not get the endorsement from Senator Harkin, are saying, look, this is coming so late, it's not going to make that big of a difference. But privately, how concerned are they that having Harkin coming out for Dean can really give Dean even more momentum going into the caucuses? CROWLEY: Well, you know, it's interesting, because if you are undecided -- and here's a man that is very well known statewide and very well liked among Democrats -- it's got to be a plus for Howard Dean. On the other hand, they have been -- there's sort of this union split here between the unions, largely the industrial sort of older unions behind Gephardt, and then the kind of higher taxed more service-oriented unions for Dean.

So you had this constant sort of pounding on Tom Harkin for weeks, who everyone pretty much thought would endorse Dean. Then there was a time they thought he would hold back. It's got to hurt not to have Harkin's endorsement. On the other hand, maybe it is a little too late. But let me tell you something, these people would have lot rather had Tom Harkin's endorsement than be sitting around saying, oh, well, it's too late.

BASH: Candy, there have been reports this week, kind of anecdotal reporting, that there is some second guessing of Dean. People who said that they were gung-ho for Dean now are having some second thoughts. As you talk to people in and around Iowa, are you picking that up at all?

CROWLEY: You do pick it up. Look, the people that are firmly, you know, heart and soul committed to Howard Dean, are not swayed by anything they see on the news or in the ads or anything else. Some of these are, as I said, newcomers to the race.

This is their guy. He's what brought them in. But there's this -- about a quarter of Iowa voters we think are undecided, and the rest of them can be sort of very soft in who they currently support.

So, you know, what you hear on the streets, and when we talk to people, they say, well, you know, I sort of liked Howard Dean, but he keeps -- he seem to have foot in mouth disease. All of these things that we heard, he said this, he said that, he doesn't think -- he's sort of questioning whether Osama bin Laden is guilty. We aren't any safer with Saddam.

His timing of some of these remarks, his dissing of Iowa that was said four years ago but comes out now. So people are beginning to think two things. First of all, is he ready for prime time? And, second of all, the really big thing is, can he beat George Bush?

I mean, I think if there's one thing you hear here is, I want the guy -- these nine guys are fine. We know them all, but I want the one that can beat George Bush. And some of these missteps that come up pause a lot of people to think, OK, is this the guy? So I think that's where it's coming from, and we do hear it on the streets.

ARENA: Candy, what about Wesley Clark? I mean, there seemed to be some suggestion that he was narrowing the gap in the polls. I mean, is he really gaining traction? And could he be the guy?

CROWLEY: Well, you know, in Iowa, he's not even contesting here. So he's been in New Hampshire. And certainly, what we've seen in our polling is this: that when support falls away from Howard Dean, it tends to go to Wesley Clark.

Why? Democrats think to go up against George Bush. They need someone who is very strong on defense, and Wesley Clark has that key title, "general," in fronts of him.

He's a novice politician. He hasn't gotten as much scrutiny as Howard Dean, or even any of the others have, because he was the latest coming into the race. So he is sort of the natural fallback position for some of these people who are beginning to have second thoughts about Dean. How sustainable that is, when that spotlight goes on Wesley Clark, we'll have to see when we get to New Hampshire.

HAYS: So Candy, you've been following these campaigns for so long. How important is Iowa? And not just for the frontrunner, because we know there can only be one person who comes in number one. But how important then is it to be number two and number three in order to keep momentum, maybe even build some, remain a viable candidate? I'm thinking about Kerry, I'm thinking about Gephardt.

CROWLEY: Yes. If they have a theme song for this, for all the others, it would be "Stayin' Alive." I mean, that is the whole point here is that you just want to stay alive to get to the South.

Here's the theory, that if you can stay in there and you can do better than people thought you were going to do, if you can come in a strong third or even a surprising second or anything like that, that keeps you in the buzz. It will get you through New Hampshire, where everyone assumes Howard Dean will win, and it takes you into the next phase, which is sort of a multi-state primary, where you're going into the South.

You're going into South Carolina, New Mexico, Arizona, places where a lot of these people think are not Dean's natural constituencies. Now, the problem with that, of course, is if Dean has the momentum, a lot of people fall in line, thinking, OK, this is the guy. But staying alive is the key thing for the seconds and the thirds so that they can get into some -- what they believe will be friendlier territory in the South.

ARENA: Well, Candy, thank you. I think we're done, right?

Of course, a big question mark over campaign 2004 is the risk of terrorism. And coming up, we're book bach on the story of how and why the government lowered the threat level yesterday.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY SECRETARY: Although we've returned to yellow, we have not let our guard down. Yellow still means that we are in elevated risk of attack and we will maintain particular vigilance around some critical resources and locales.

(END VIDEO CLIP) ARENA: Homeland Security Secretary Tom Ridge yesterday lowering the terrorism threat level, but making clear dangers remain. Welcome back. We're ON THE STORY.

Well, we heard it straight from him, we're at yellow, folks. But it is a mottled yellow, because there are certain areas within cities, including New York City, the financial district, Las Vegas, around the strip, Washington, D.C., some government buildings that will remain on a higher level of alert.

Now, they're not saying that this is orange, but what they're saying is it's sort of a yellow-plus. Chemical plants, nuclear facilities and so on. So it's a very different approach than we've seen in the past, but something that homeland has said all along was the ultimate goal, to be able to refine the system to react specifically to the intelligence.

BASH: Kelli, what are your sources telling you about whether or not there actually was a terrorist plot that was stopped over the past few weeks during the holiday period when the alert level was so high?

ARENA: What they're saying at this point, Dana, is they don't know. What they do have is information from detainees that have been captured that said, hey, when security is increased, when you change your strategy, that does interrupt terrorist plans. There was some information that Secretary Ridge spoke about in Istanbul, saying, gee, we attacked the British, you know, consulate embassy, not the American embassy, because there was a change -- because the security was just too tight.

So they do know that it does make a difference. But whether or not this actually thwarted a plan or merely postponed a plan, or if they even had the correct intelligence in the first place, is all still very much a work in progress. And until they actually get somebody who can say, oh, yes, we had this plan in progress (AUDIO GAP).

CROWLEY: Kelli, one of the things I was watching from out here, there were a couple of days of, well, we're going to move back down to yellow. And I kept thinking, well, if they know they're going to do it, why don't they go ahead and do it? I mean, are they waiting for some deadline to pass? What happened in those two days?

ARENA: Well, there was a lot of discussion, Candy, and here's why. The original intelligence that came in gave us a window of November to early February. I've heard February 5, 6. This sort of fluctuates. But that was the window of opportunity, of vulnerability that so many intelligence officials pointed to.

So there was a great deal of debate. The volume of threat information hasn't really declined all that much. It's still very high. It's very general in nature.

Before, it was a little more specific. They were getting heavy- duty information on the aviation front, as we saw certain flights canceled and delayed and so on. Heavy-duty information about possibility vulnerabilities out of flights from Mexico, France, the U.K.

Right now, it's just general. It's, yes, we want to attack. Al Qaeda wants to attack. They want to do something, "spectacular."

So there was a lot of debate back and forth as to whether or not you needed to wait until that February window was sealed or whether you went down now and did this sort of two-pronged approach. And everyone was comfortable as long as certain sectors and areas remained on a higher level.

WALLACE: Kelli, picking on what you said a little bit earlier, questions even about the intelligence, are any of your sources expressing any concern that al Qaeda could be putting out sort of a misinformation campaign, trying to get the administration to be scuttling around and that there's no real "there" there?

ARENA: There's always that concern, Kelly. And here's what one person said to me. A very high ranking law enforcement official said, there's always the chance that there was this concerted campaign to sort of test the waters, see what the response would be. What security precautions would be put into place to find out where the vulnerabilities were that they could exploit later on.

So this could have been a test run. We know that al Qaeda did test runs on those airlines. They took flights back and forth before they actually attacked on September 11. So this, too, could have been a test run.

The thing that took this to a different level right before the holidays, was that there was so much information and much of it was corroborating other information that had come in. And there were some reliable human sources of intelligence that were also involved in that mix, which just gives it a little more credibility and validity. And, really, as we saw, really triggered some very serious action on the part of this administration.

But the point you raise, though, is something that is always at the back of these guys' minds, are we being played? And it's always a possibility.

HAYS: Well, the government taking more steps on another front. This new U.S. visit program I think is so fascinating. You're going to find a way to surveil people electronically as they come in from foreign countries.

I've talked to people who said they think it's potentially an infringement, big brother, big sister. On the other hand, they say, hey, if it will stop terrorism, go ahead, fingerprint, I don't care.

ARENA: Well, you know, that's really split right down the middle on this issue. And there are those who say, look, whatever we can do let's do. OK?

We need to be able to find people when we need to find them if we get intelligence. We may not have intelligence when they come into the country, but we may get it subsequently, and so we need to be able to track them down and track them down quickly.

There's the other part of the coin, and some officials say, well, you know what? Terrorists, or those who are sent in for suicide missions, usually it's very typical that their very first crime is blowing themselves up and whoever else they can take with them. So they said with somebody starting with a clean slate, that's not going to help stop them, you know?

You can fingerprint them, you can photograph them, you can put a chip in their head. It doesn't matter. You won't be able to stop them if you have not picked up the intelligence about a plan and attach that specific individual to that plan.

So if al Qaeda and related groups continue to try to recruit people with no track record, with -- that are not known to the intelligence community -- and there are a lot of young men who fit that description and who have a desire to fight for the cause -- they say even that won't help.

HAYS: Some people say at least people couldn't use the same visa, start keeping people in and out of the country, which we've heard stories about that in New York over and over.

Well, like the terror alert, the stock market was up and then down in recent days. I'm back on the story of the economy and the markets after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN SNOW, TREASURY SECRETARY: We're not out of the woods yet. We all know that. But we clearly have a much stronger and healthier economy today, and the prospects for one going forward than was the case a year ago.

(END VIDEO CLIP)

HAYS: But he does admit we're not out of the woods yet. Treasury Secretary John Snow this week. And, of course, not many new jobs in the woods. That's the problem.

Welcome back. We're ON THE STORY.

The December employment report, one of the most closely watched reports on Wall Street. People were expecting a gain of 130,000 to 150,000 jobs, the fifth month in a row of improvement. We've seen other signs of improvement.

The holiday shopping season was pretty good. Third quarter GDP, the economy's growth rate, was good. Instead, the economy only created 1,000 jobs over the past five months, less than 300,000 jobs. In a good month, in a more booming economy, it would be -- it wouldn't be that big of a deal to create 300,000 jobs in one month.

ARENA: That's astounding. CROWLEY: Kathleen, you know, how can you go from 250,000 jobs expected to 1,000? Something clearly is wrong here. Is there any theory on why the economy is not creating jobs? I mean, I think I saw a report that manufacturing was up. What's going on?

HAYS: Actually, manufacturing, there was a big survey, Candy, about a week ago of manufacturing that was so strong. And it's a closely watched survey.

People said one more reason they were more optimistic is thinking manufacturing jobs would finally increase. Instead, they fell for the 41st month in a row. Now, some people are saying, you know, it could be that partly because when the economy turns, one of the last things that turns is jobs. And businesses are still reluctant to hire.

They say maybe we'll see some other (ph) provisions in the report. The problem is, there were other signs of weakness as well. There are more people than ever working part-time because they can't get full-time work.

The number of hours worked in the economy, the average work week actually declined a bit, too. If demand is picking up, you know, even if you're not going to hire a worker, you work people longer hours.

And then another thing that happened, you know the unemployment rate came down. One of the big reasons was because people left the labor force. It seems like people, some of them, are discouraged. They don't see a job out there so they stop looking.

If you stop looking for work, you're not counted as unemployed. That's the wrong way for the unemployment rate to come down.

WALLACE: Kathleen, also, are you seeing increases in productivity, other cost-cutting measures that you could see sort of this economic growth but these moves by these companies to have higher productivity, cutting costs, and that means not increasing more jobs?

HAYS: Absolutely. And, of course, that's been good for corporate profits. And that's one reason why we've been having this great stock market rally.

Dow Jones Industrials, up 25 percent last year. The Nasdaq up 45 percent last year. It's wonderful to have productivity, it's wonderful to have profits.

You know, we've talked about a jobless recovery. I wonder, can we have a jobless bull market in stocks? I think the problem with that is ultimately, companies need to have more demand for their products. And to have more demand for their products, they need to have more people working. That's one thing.

The other thing is, and another reason why Wall Street, why the stock market pulled back on this report, is because people feel, many people on Wall Street, that President Bush's policies have been good for the economy. Certainly, the dividend tax cuts, the tax cuts overall good for the economy and good for the markets. And they're worried that if the jobs don't pick up, that weakens Bush, and that could ultimately weaken what they feel is a strong plank for this stock market rally.

ARENA: I'm going to switch gears here. The Fastows this week, Enron, I had so many people just expressing shock that there would be any plea deal offered at all from his wife. You know, the judge dismissed that one. But what is the thinking here in terms of -- is it just to try to really get their hands on the bigger guys? Do they really believe that that will happen?

HAYS: Well, it has to be. And, of course, Kelli, this Enron he is really the poster child company of corporate scandal, of corporate excess. Andy Fastow, the former chief financial officer, who was the mastermind of all these off balance sheet, highly structured deals that enriched him, enriched his friends, but ultimately helped bring down the company.

And, of course, the higher officers above him, the bigger fish a lot of people want to see gotten are Ken Lay, who was the CEO, Jeff Skilling, who was the President. And the question about them is, did they know more about Fastow's deals than they let on when they were selling their stock in Enron and employees could not sell the stock, and still being very optimistic about the company.

That's the kind of thing presumably that prosecutors think Andy Fastow might be able to give up. But he's saying, I'll take 10 years in prison if you give my wife, Lea, just five months. I'll also give back $20 million. But the negotiations ongoing over the weekend. We'll see what the judge says on Monday and what the Fastows say as well.

BASH: Kathleen, another person who has unwittingly become one of the poster people for the corporate scandals officer the last couple years is, of course, Martha Stewart. Tell us what went on this week with her trial coming up.

HAYS: Well, they started jury selection. And, of course, selecting a jury for someone like Martha Stewart is not like selecting a jury if it was just you or more me, Dana. They have to fill out a special questionnaire, because people really want to -- and, you know, Martha Stewart is one of those people who inspires great love, great hate.

You know, how do they also feel about wealthy CEOs. Bottom line, there are two weeks to go over these questionnaires. On January 20, the judge will start questioning jurors, he'll start assembling the trial.

We spoke to a former SEC prosecutor on the flip side this week who said that the case against Martha could be stronger than people think. He said, you know, depending on how things go, Martha Stewart could maybe even see some jail time when all is said and done.

ARENA: Can you imagine that?

HAYS: I know. WALLACE: You know, Kathleen, people will be watching that one closely.

Well, moving from the ups and downs in Martha Stewart's life to this question: what can we learn about Howard Dean from his time in Vermont? I'm on the story on that subject right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), DEMOCRATIC PRESIDENTIAL CANDIDATE: You can't beat George Bush by being Bush-lite. The way to beat George Bush is to stand up for what you believe.

(END VIDEO CLIP)

WALLACE: And that is Howard Dean on the stump. One of his biggest messages, criticizing what he calls the Washington Democrats, saying they are too closely aligned with the policies of President Bush.

Welcome back to ON THE STORY.

I found something interesting. We spent few days this week in Vermont, where Howard Dean was governor for about 11 and a half years. And nationally, he is being portrayed by some, especially his critics, as some left-wing liberal from Vermont.

But what is so interesting, when we talk to people in Vermont, they say this guy is no left wing liberal. In fact, they say part of his administration, he was known as leading the Republican wing of the Democratic Party. That some of his biggest critics during hig tenure weren't Republicans, but Democrats, those who felt that Howard Dean was simply too conservative.

ARENA: Well, of course, you're in Vermont, Kelly. But here's my question. The spotlight has been on Dean for months now. And they really haven't been able to -- I mean, they've said kooky things, but they haven't really been able to come up with any real horrid skeleton in the closet. I mean, one has to assume there isn't one.

WALLACE: Well, part of it, let's pick up on your first comment. We're talking about Vermont.

This is a very small state. I think population, 600,000 people. It's almost the size of a city on the national scale, really.

So people say everyone in Vermont knows each other. Lawmakers, they all know one another. Their records are out there. So you really can't get away with anything corrupt.

What Howard Dean did do, and other Vermont governors have done as well, is he has sealed his records. Records from his tenure as governor for 10 years. And he's facing a lot of criticism from his Democratic rivals who say, you should be open, transparent, release those records.

But even his critics say they don't really think there's anything damaging in the closet. Maybe embarrassing correspondence, Howard Dean trying to encourage businesses to come to the state. But they don't think there's any real "there" there. But he's getting criticism for not opening those records to the public.

BASH: Kelly, I'm sitting here thinking back four years to another governor that was then Governor Bush, and I remember the stories, kind of similar stories of how he worked very closely with Democrats when he was here in Texas and that he was somebody who could get along across apart lines. But things definitely change once you get to the national stage.

Are you getting the sense, from talking to people in Vermont, that they understand that and that they see that perhaps what we're seeing is a different Howard Dean and it might stay that way, actually?

WALLACE: Well, they definitely see that, Dana. And they say that they see what Howard Dean is doing, that they believe he is doing something in a very calculated way. That he's appeal to get left wing of the Democratic Party, part of his message against the war, appealing to liberals on the left.

But that ultimately, he is going to have to come back to the center if he becomes the Democratic nominee. And what people said to me in Vermont this week, they say people laugh and say Howard Dean, could he be a centrist? Well, they say he was a centrist entirely so during his time in Vermont. But that eventually, he'll have to come back to the center on the national scale. The question is, if he's being perceived as something else, and if he face a very divided Democratic Party, how successful will he be then?

CROWLEY: Kelly, you know, is part of the problem that in these records, the 40 percent of Howard Dean's records that the other Democrats keep saying, hey, put this out there, is not the fear that there's some horrible little scandal there, but the fear that, in fact, there is something about, say, he was the first governor to sign a gay unions bill, that he was, say, against that? Because much of the support that Dean has is definitely the left of the party, and so is the sense that the fear is that some of this moderation, as they call it in Vermont, might turn off what really is the core of Dean voters?

WALLACE: You raise such a good point, Candy, because I was talking to pretty much one of the only Dean critics I could find. You get a sense that the hometown crowd is trying to protect Howard Dean. But he did say that he thinks possibly in these documents you could have something where Howard Dean expresses some of his concerns, some of his reluctance for this legislation.

And you know it was December, 1999, the Vermont Supreme Court coming out, leaving Vermont, really, with two options: either legalizing marriage between homosexuals or giving benefits to homosexuals. They came up with a civil unions legislation legalizing, for the first time in the country, civil unions.

But one -- some believe that there could be something in there, correspondence, some reluctance on the part of Howard Dean about this. And again, Howard Dean, who has been very much kind of a message of, you know, anti-corporate corruption and corporate welfare and criticizing President Bush for being too cozy with corporate America. Another thing that could be of concern, some believe, correspondence where he's encouraging businesses to come to the state of Vermont, and that that could turn off some of the left wing of the party and hurt him on the national stage.

HAYS: It must have turned off Madonna, since she gave her endorsement to Wesley Clark. Obviously, she's not in Mr. Dean's camp. What about the celebrity endorsement race?

WALLACE: Absolutely. I guess he need to do a better job to get the material girl's support. Well, it is so interesting, Madonna, all our viewers paying attention here, she is, get this, endorsing retired General Wesley Clark. She's even put up a letter on her Web site encouraging her fans to support Wesley Clark.

And endorsements, we see them all the time, but there have been a few whacky ones, you can say. You have Peter, from Peter, Paul and Mary endorsing John Kerry. But what I like so much -- and this shows you democracy at work -- Crosby, Stills and Nash. I believe -- I hope I get this right.

I think Stills is for John Kerry and Crosby and Nash say, no, Howard Dean is their guy. So even the band not quite seeing eye to eye on this one.

BASH: Well, Kelly, we're going to go next from all those presidential wannabes and those endorsements to the guy that they're all hoping to get the chance to beat. We'll talk about the president's new immigration proposal and the possible political pain or gain from that. And, also, a new space initiative that he will launch next week.

All that is back ON THE STORY right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As a nation that values immigration and depends on immigration, we should have immigration laws that work and make us proud. Yet today, we do not.

(END VIDEO CLIP)

BASH: That's President Bush on Wednesday, spelling out sweeping new changes in immigration laws that he wants to get enacted. And welcome back. We're ON THE STORY on that issue.

This was the first major policy initiative from the White House of the election year. They're billing it as an economic proposal because they say this will help fill jobs that Americans simply don't want. They're billing it as a humane proposal because, as the White House put it, this will bring out of the shadows some 10 million immigrants who are here in the country illegally, and many of them, most of them are already working.

But as you can imagine, his opponents, political opponents, are billing this as a political proposal, because they say this is just an attempt to woo Hispanic voters, which are going to be absolutely key in this next election year.

WALLACE: Dana, it's so funny. So the people you talk to, they're saying at the White House, probably, no politics involved here. But what are your sources telling you about how important politically this is for the president, especially when it comes to Hispanics? How important they'll be for his possible reelection?

BASH: Well, it's no secret that reaching, that expanding the base is the way the president's political advisors like to describe it. It's absolutely essential for him and for the Republican Party going forward, but particularly for the Hispanic vote.

This is something that they really want to keep grabbing on to. In 2000, the president did get about 35 percent of the Hispanic vote. It doesn't sound like a lot, but it's certainly more than the Republicans have in the past. But there is some question about whether or not this could backfire.

You've sort of seen a split in the reaction to this proposal. Some Hispanic groups are saying that there they're worried that this could be just a trap, if you will, because under the proposal that the president put forward, basically, these people would have six years to work temporarily legally and then would have to apply for a green card, just like everybody else. There's concern that maybe they'd be kicked out of the country eventually and not be able to get back in.

CROWLEY: Dana, I want to go -- like sort of move from south of the border to Mars. Here's what struck me about the "let's go back to the moon and let's go to mars." Sitting out here in Iowa, where we're talking about what Howard Dean said four years ago about Iowa and special interests or, you know, who is -- what state senators endorse what. And all of a sudden, here comes the president with this huge, sort of presidential vision. You know, let's go to Mars. Just wondering about the politics of that particular story.

BASH: It's nice to be the incumbent, Candy, that's for sure. And certainly, this is something that, you know, the White House is saying, oh, don't look at this as the JFK moment. Don't look at this as something that's more than it actually is.

But there's no question that the president is going to try to come out and explain that -- in a really sort of optimistic terms and tones that Americans need to know that this is an important priority for the United States. And basically, he's going to talk about something very long term, getting to the moon eventually. We're talking decades. Having a permanent presence there in order to eventually send a manned mission to Mars. You know, you've seen people sort of glued to the television sets over the past couple of weeks looking at what's going on with an unmanned mission to Mars. You can imagine what would happen if there were actually people up there. But the White House is not gone going to probably have a lot of details on this, particularly on the cost, because that is definitely going to be one of the major criticisms of this, is how are you going to pay for something like this when we have a $500 billion deficit? We're already hearing that from Democrats.

HAYS: You know, Dana, I'm wondering, switching gears again slightly, if the White House would maybe like to put former treasury Secretary Paul O'Neill on a launch into deep space.

BASH: I think they thought they did that already, Kathleen.

HAYS: Well, you know what I'm talking about. The interview's going to be on this weekend. He's obviously still smarting about the fact that he was summarily dismissed by George Bush a couple of years ago.

But referring to the president as a blind man in the room of deaf people at cabinet meetings, no interchange of ideas, what are you hearing behind the scenes? Do people care? Are they angry about this? What kind of reaction from the White House on the quiet?

BASH: Well, you know, the public reaction is that they don't do book reviews. But certainly, privately, this is not something that this White House is used to, frankly. The president surrounds himself with people who are very loyal to him, people -- most people he's known for a very long time.

Paul O'Neill was never, you know, sort of behind the scenes, was somebody who rubbed a lot with some of the president's other advisers on sort of personality and on policy issues. So it might not be that big of a surprise. But certainly, it is not something that this White House is used to at all.

ARENA: I want to pick up on just the whole thing and talking about Bush as candidate, Dana. Any concern that this economic picture will really play a larger role as we get closer to November? Or are they just thinking that it's a no-show right now?

BASH: Well, certainly, the economy, you know, the president's advisers will tell you time and time again, particularly when you're asking about, well, what about Iraq and other issues, that they still believe that this is the issue that people vote on and that presidents have won second terms or lost second terms because of. But you have seen our poll numbers recently, and others, showing that people are more confident in the way the president is handling the economy, and the president's advisers are certainly very happy about that.

But they were really, really hoping and looking forward to and really thought that there was going to be great job numbers report on Friday, as Kathleen was just talking about. They were preparing for it. The president was positioned for it. He was at the Commerce Department ready to talk about the economy. And it's unlikely he would have been there to do that if they knew that the jobs numbers wouldn't be good.

This is going to be a big, big issue, and the president is already framing his economic proposals as, make those tax cuts permanent. Democrats, obviously, we know, are saying the opposite, roll them back. That's going to be a major campaign theme, the economy, jobs, and tax cuts.

ARENA: All right. Well, hang with us, Dana.

I also would like to say thank you to Candy in Iowa. We'll be watching you ON THE STORY in coming days, Candy.

And from national politicking to baseball politics, and whether bad boy Pete Rose came clean enough to win his dream, we'll wake up our sister, Josie Burke, in Colorado, right after this.

(COMMERCIAL BREAK)

HAYS: We're back ON THE STORY, and we're back on a regular feature, sports stars in trouble. And our sports correspondent, Josie Burke, is on the phone from Colorado.

So Josie, we were just sitting here talking about Pete Rose, OK, I gambled. But you know, he hasn't said he's sorry yet. And I think a lot of people are really not moved by his latest admission.

JOSIE BURKE, CNN SPORTS CORRESPONDENT: It's really hard to imagine his concession coming off any worse than it did. And the three things that really seemed to irk his critics most -- and that group of critics is growing larger and larger by the day -- are that, number one, he's making money off of lying. He made the confession in a book.

Number two, the timing of the book. It came out the week the hall of fame announced their latest two latest inductees. And then the third thing is, not everyone is convinced that he's telling all of the truth.

WALLACE: So Josie, give us a sense of what people are saying about whether or not he could be sort of reinstated into the hall of fame or get a better standing after coming forward with what he's saying.

BURKE: Well, people are really split. There's not a single consensus, where any group of people have come out and said that he'll definitely get in, get reinstated because of the confession that he just made.

I think a lot of people thought that any kind of confession would help Pete Rose's case. But because of the different ways that there seems to be a backlash now, I think there are a lot of people who think that this kind of confession -- and it was hard to imagine there would be one -- probably hurt him.

ARENA: Well, here's what I'm puzzled by. I mean, he's been lying for all these years to everybody, the fans, his teammates, you know, officials in baseball. But not only did he come out and say, OK, yeah, I did it, but he said he's still gambling.

BURKE: This is something that's hard to believe too. But the difference that he's making is that he's gambling legally. He says the only thing that he really does is go to the track on occasion. This is something, the horse track, he grew up with his dad. So this is what he still does.

He says when he goes to casinos -- and he has been ben sighted in casinos -- he's not gambling. He doesn't have a line of credit at any casino. He's just there because somebody is paying him to sit in a chair and sign autographs for hours.

BASH: Josie, tell us exactly how it would work to get Pete Rose into the hall of fame. I mean, now that he's admitted it, what would be the process to reinstate him?

BURKE: Well, there is one judge and one jury, and it's the same person. It's Bud Selig, the commissioner of baseball. He has to decide whether to remove Pete Rose's name from the permanently ineligible list. That's step number one.

Once somebody is no longer on that list -- and nobody's ever been taken off of it -- only then could the hall of fame put him back on the ballot and let the writers vote on whether he should be inducted. But the question is, how far would reinstatement go? Would Bud Selig decide that he could come back with absolutely no restrictions?

Pete Rose says he wants to manage again. But that idea is abhorrent to a lot of people, and it seems very farfetched that Bud Selig would just open the door, throw away the key and say "welcome back."

HAYS: Kobe Bryant this week. L.A. Lakers against the Nuggets in Denver, gets booed by the fans. What's that about?

BURKE: It was really relentless. He's booed on the road wherever he goes, but this was a little different than any of the other road stops.

He was in Minnesota the night before, the game before, they'd booed him. There were a lot of signs. The booing didn't stop. It started in the pre-game introductions and it really went throughout the game whenever he touched the ball.

Bryant was asked about it before the game, after the game. He says his attitude is he goes in expecting the worst, so nothing surprises him. But a lot of observers were a little bit surprised at the tenacity and the way the crowd really stuck with it.

ARENA: Josie, how does he play? I mean, it's got to be really difficult to sort of keep your focus while everybody is screaming at you.

BURKE: He certainly had experience with it this season as a professional athlete. You're in hostile environments for whatever reason half of the time. But it looked like in this game, if you looked at his stats, even though he was the game's leading scorer with 27 points, he had an inordinate number of turnovers. And most observers say that he did look a little rattled.

The Lakers as a team aren't playing well. They just last night snapped a four-game losing streak. So it looked like in that one game in particular, that it might have affected him. And it was one interesting thing. The coach of the Lakers, Phil Jackson...

ARENA: I'm sorry. We're out of time. We're out of time. I'm going to thank you. And when you're back -- when are you back ON THE STORY on camera?

BURKE: Well, we're going up for the NFL Playoffs next weekend, the championship games, trying to see who will go to the Super Bowl. And that's my next assignment.

ARENA: All right. Hang in there.

President Bush gets the last word when we come back ON THE STORY.

(COMMERCIAL BREAK)

HAYS: Thanks to my colleagues, and thank you for watching ON THE STORY. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS," focusing this week on Martha Stewart and Phil Specter. At 12:00 noon Eastern, 9:00 Pacific, "CNN LIVE SATURDAY." And at 1:00 p.m. Eastern, 10:00 a.m. Pacific, CNN's "IN THE MONEY."

Coming up at the top of the hour a check of the top stories. But first, the president's weekly radio address.

(BEGIN AUDIOTAPE)

BUSH: Good morning.

As the year 2004 begins, America's economy is strong and getting stronger. More Americans than ever own their own homes. More businesses are investing. More manufacturers are seeing increased activity than at any time in the last 20 years.

Stock market wealth has increased by more than $3 trillion over the past year. And over the past five months, more than a quarter million Americans started work at new jobs.

In December, the unemployment rate fell to 5.7 percent from a high of 6.3 percent last June. This latest report underscore a choice about the future of our economy and the future of those who are looking for work. We can continue on the path to prosperity and new jobs, a path marked by a pro-growth agenda that has cut taxes on paychecks for 109 million American taxpayers, or we can reverse the course by raising taxes on hard working Americans. The choice is clear. Tax relief has got this economy going again and tax relief will keep it moving forward.

In my budget for the upcoming fiscal year, I will call on Congress to make permanent all of the tax relief we have delivered to the American people and our nation's small businesses. If Congress fails to act, this tax relief will disappear and millions of American families and small businesses would see tax hikes starting in 2005.

For the sake of our economic expansion and for the sake of millions of Americans who depend on small businesses for their jobs, we need Congress to act and to make tax relief permanent. Every American who pays income taxes got a tax cut. They should keep that tax cut in the future.

American families saw the child credit doubled to $1,000 per child. And they should keep that higher credit. American investors, including millions of seniors, saw taxes fall on dividend income and investment gains. They should keep that tax relief.

American small businesses received new tax incentives to invest in equipment and software. They should keep those incentive incentives.

Every American family, including every farmer, rancher and small business owner, will see the death tax disappear in 2010. Then reappear in 2011. But the death tax should stay buried.

Now is not the time to turn our backs on America's families and workers and entrepreneurs by letting much needed tax relief expire. Making tax relief permanent is a simple step that would keep our economy growing so that every American who wants to work can find a job. We must continue to take other steps to promote growth in job creation throughout our economy. We must promote free and fair trade, reform our class action system, and help businesses and their employees address the problem of rising healthcare costs.

To serve the economic needs of our country, we must also reform our immigration laws. Reform must begin by confronting a basic fact of life in economics. Some of the jobs being generated in America's growing economy are jobs American citizens are not filling.

This past week, I proposed a new temporary worker program that would match willing foreign workers with willing American employers when no Americans can be found to fill the jobs. If an American employer is offering a job that American citizens are not willing to take, we ought to welcome into our country a person who will fill that job.

The program I've outlined is not an amnesty program, an automatic path to citizenship. It is a program that recognizes the contributions that many undocumented workers are now making to our economy. This temporary worker program represents the best tradition of our society. It will help strengthen our economy, return order to our immigration system, and secure our homeland.

Thank you for listening.

(END AUDIOTAPE)

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Political Reputation Howard Dean Has in Vermont>