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JUDY WOODRUFF'S INSIDE POLITICS

Immigration Reform Proposal; Happy Days are Here Again, the Survey Says

Aired January 7, 2004 - 15:30   ET

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

(BEGIN VIDEOTAPE)
ANNOUNCER: President Bush says he wants to bring illegal immigrants out of the shadows. How much does election year politics play into his plan?

How many people can you insult in one political commercial?

UNIDENTIFIED MALE: ... latte-drinking, sushi-eating, Volvo- driving, "New York Times"-reading...

UNIDENTIFIED FEMALE: Body-piercing, Hollywood-loving...

ANNOUNCER: We'll have a liberal dose of ad analysis.

What are Americans smiling about? We'll tell you why "Happy Days are Here Again" could become the new theme song for Republicans.

(END VIDEOTAPE)

ANNOUNCER: Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

JUDY WOODRUFF, HOST: Thank you for joining us.

When President Bush outlined his immigration reform plan just a short while ago, some things were left unsaid, including the potential benefits for his re-election campaign. After getting a little over one-third of the Hispanic vote back in 2000, Mr. Bush is hoping to improve his chances with Latinos this year. And his new proposal could help him do just that.

Let's get details now on the plan from CNN's Kathleen Koch at the White House -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Judy, in a ceremony here at the White House just a few minutes ago, President Bush described this new measure as something that would make the United States a more humane and compassionate country. The president described the plight of the roughly eight million illegal immigrants in the United States, saying that they are condemned to lives of fear and insecurity.

The president said they live in fear of abuse, of exploitation, of being deported at any moment. So the president said clearly current U.S. immigration policy is simply not working. And he laid out what he proposed to change it to. Step one, the president would allow illegal immigrants to pay a fee and apply for the right to work. The applicant, though, would first have to show that he or she has a job.

Then the employer would have to show that there is no American citizen who wants that same job. And at that point, not only then could the illegal immigrant be -- would they be allowed to work for a period of three years in the United States free and clear, but they would also be allowed to bring their dependents into the U.S. as long as they could support them. Now, President Bush said this was a policy that will again make the country more humane and compassionate.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In common sense and fairness, our laws should allow willing workers to enter our country and fill jobs that Americans are not filling.

(APPLAUSE)

BUSH: We must make our immigration laws more rational and more humane. And I believe we can do so without jeopardizing the livelihoods of American citizens.

(END VIDEO CLIP)

KOCH: President Bush made it clear that this is not in any way rewarding those who have illegally entered the country and broken U.S. laws. He says this is not a fast track to amnesty. This would not give these workers a leg up on, say, people who are following the formal legal process, applying for a green card for their permanent residency.

And there are numerous critics of what the president has proposed, conservatives who do say yes, indeed, it is rewarding people who have broken the law, that it is wrong. And then liberals who say it doesn't go far enough. For instance, Senator Ted Kennedy called the president's proposal disappointing. He said, "The proposal that President Bush will announce today is woefully inadequate and falls far short of a serious reform our country needs to fix our broken immigration system."

President Bush believes, though, not only will this proposal help him with Hispanics, a very important voting block in the U.S., making up some 14 percent of U.S. voters, but also believes it will help him a great deal with his neighbor to the south, Mexican president, Vicente Fox.

President Fox pushing President Bush very hard for these immigration reforms. They were tabled after the 9/11 terrorism attacks. But the two men are meeting next week for a regional summit in Mexico. President Bush called President Fox this morning to lay out the details of this plan. So we should certainly see a warming with our neighbor to the south -- Judy.

WOODRUFF: Well, I know it's something President Fox has been waiting for a long time.

KOCH: Quite so.

WOODRUFF: Kathleen, thank you very much.

Well, some of the '04 Democrats are accusing Mr. Bush of having "an election year conversion" on immigration reform to politically position himself with Latino voters.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: It's not enough. The problem is, there are still not going to be enough green cards available, and we're going to continue to have a group of second-class citizens in America. This is not real immigration reform, which is what the country needs.

(END VIDEO CLIP)

WOODRUFF: Howard Dean is one of a few Democratic candidates who did not issue a statement blasting the president's plan. Here's what he said about immigration in Iowa today.

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), DEMOCRATIC PRESIDENTIAL CANDIDATE: My view is if you lived here for a significant period of time, whether you're undocumented or documented, and you have contributed to your community, you have never been arrested or gone to jail or any of that stuff, and you paid your taxes and worked hard, that you ought to have a path to earn legalization of citizenship and so forth.

(END VIDEO CLIP)

WOODRUFF: President Bush had been relatively silent about immigration issues since the September 11 attacks about fears -- heightened fears, that is, about border security. But a lot has changed in the last two years. A reality that hits home in our latest poll.

Let's bring in our senior political analyst, Bill Schneider.

Bill, what did you see? Anything surprising in these numbers?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Oh, yes. It has to do with whether Americans feel safer from terrorism.

A month ago, we had the capture of Saddam Hussein. Howard Dean said that did not make the U.S. safer. Now we have an orange alert, flights canceled and diverted, and extra precautions at public events.

So are Americans more worried or less worried about terrorism? And the answer is less worried. Only 28 percent of Americans now say they are worried that they or someone in their family will become a victim of terrorism. That's the lowest level of concern since September 2001. Now, that number has usually gone up when the threat level is raised. Not this time.

Was Saddam's capture that reassuring? Is the public so impressed by the homeland security measures? Maybe. But notice that the long- term trend since 9/11 has been diminishing concern about a terrorist attack.

What most people find encouraging is experience. There haven't been any attacks since 9/11 and there weren't any over the holidays. I think the poll results reveal a widespread sense of relief.

WOODRUFF: All right. Then what does the poll show about the economy?

SCHNEIDER: Well, the economy, more good news. More and more Americans say the nation's economy is in good shape. It's now 43 percent, nearly double what it was a year ago.

Economic optimism is growing even faster. Two-thirds of Americans now say the country's economy is getting better. That's more than double what it was last January.

The view that the country is in a recession has completely flipped. Last April, just after the major fighting ended in Iraq, most Americans thought the country was in a recession. Now, two- thirds say it's not.

In January 1992, when his father started his re-election campaign, 84 percent of Americans thought the country was in recession. Remember "the economy stupid" from that year? Well, this year, too, the economy is the number one issue to voters, but with a difference. Voters who say the economy is their most important concern are voting for President Bush over Democratic frontrunner Howard Dean by a 17-point margin.

WOODRUFF: And that is a big difference.

SCHNEIDER: It is.

WOODRUFF: All right. Bill, thank you very much.

Well, maybe in connection with that, Howard Dean may be retooling his economic plan. He reportedly is moving towards supporting tax relief for middle class Americans after months of promising to repeal all of the Bush tax cuts.

As our national correspondent, Bruce Morton, reports, Dean's tax talk has given his Democratic rivals some ammunition.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): The tax flap started during the candidates' Des Moines debate, when Howard Dean said most middle class people didn't notice the Bush tax cuts because their property tax went up to pay for education, their health care costs went up, and so on.

DEAN: Middle class people did not see a tax cut. There was no middle class tax cut. It was a Bush tax increase with tuitions, with property taxes, with health care premiums, and most middle class people in this country are worse off because of President Bush's so- called tax cut than they are better off.

MORTON: Other candidates pounced on that.

SEN. JOSEPH LIEBERMAN (D-CT), DEMOCRATIC PRESIDENTIAL CANDIDATE: I don't know which is worse, that he wants to repeal the tax cuts or that he won't admit that they ever existed.

SEN. JOHN KERRY (D-MA), DEMOCRATIC PRESIDENTIAL CANDIDATE: I roll back the tax cut for the wealthy Americans, not the one for the middle class Americans that Howard's not aware they got.

MORTON: Raising taxes is never popular. Remember Walter Mondale running against Ronald Reagan in 1984?

WALTER MONDALE (D), FMR. PRESIDENTIAL CANDIDATE: Mr. Reagan will raise taxes, and so will I. He won't tell you. I just did.

MORTON: Mondale, of course, carried only his home state of Minnesota. Still...

STUART ROTHENBERG, ROTHENBERG POLITICAL REPORT: Coming out and flat-out saying you want to raise taxes, you want people to pay more money to the government, is never popular. However, that's a little different in substance in terms of rolling back tax cuts.

MORTON: If you repeal the tax cuts, people's taxes will go up. But Dean and Dick Gephardt say they'd spend the money to provide health care. And among Democrats, they may be on solid ground. Seventy-one percent of the Republicans in a CNN-"USA Today" Gallup poll this month said the Bush tax cuts have mostly helped the economy. Just 18 percent of the Democrats agree.

ROTHENBERG: No, I don't think that Dean and gephardt's position is a problem in a Democratic race. They're two of the frontrunners. Democrats seem to respond to that. The question is whether that same position will sell in the general election. That's their conundrum.

MORTON: But that's months away. And in the meantime, Dean now says he's for middle class tax cuts, too. Before health care? After health care? Well, somewhere.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Well, one question is, do Howard Dean's claims about the Bush tax cuts add up? We'll crunch the numbers later on INSIDE POLITICS.

Howard Dean does lead our headlines in today's "Campaign News Daily." A cell phone call that interrupts a speech is usually a big inconvenience, unless you're Howard Dean and the caller is former Vice President Al Gore.

(BEGIN VIDEO CLIP)

DEAN: Any trusty staff here? There must be some. He says that he loves you all, he's really grateful for all the help, and he's looking forward to -- I think he's going to come out and campaign for us.

(END VIDEO CLIP)

WOODRUFF: Well, as you just heard Howard Dean say there, Al Gore does plan to join Dean in Iowa later this week. Gore is expected to attend rallies on Friday and Saturday in eastern Iowa and in Des Moines.

President Bush plans to hit the road tomorrow in a state he knows very well. Mr. Bush is scheduled to tend a fund-raiser in Palm Beach County Florida, his 18th visit to the Sunshine State as president. It will be his first trip to Palm Beach since the county made post- election headlines for its new infamous butterfly ballots.

The money he raises will add to an already impressive total. The Bush campaign said today that it raised more than $130 million last year, with $99 million in cash on hand. And that's no primary opponent.

Big bucks can buy you a whole lot of campaign ads. Up next, we will check the latest spots in the early caucus and primary states and find out who's getting the most bang for their bucks.

Also ahead, is another top Democrat likely to flip for Howard Dean? We'll ask Iowa Senator Tom Harkin whether an endorsement is in the works.

Plus, Connecticut's governor goes on the air with his career on the line. We'll have the latest on the speech and the scandal

(COMMERCIAL BREAK)

WOODRUFF: As we head into the primary season, the political ads filling the airwaves in key states are taking on a sharper edge, especially the new one that goes after Howard Dean: Sushi eaters and Volvo drivers all in 30 seconds.

Howard Kurtz of CNN's "RELIABLE SOURCES" has more.

(BEGIN VIDEOTAPE)

HOWARD KURTZ, "RELIABLE SOURCES" (voice-over): Dick Gephardt, Joe Lieberman and Howard Dean all rolled out new ads this week in the battle for Iowa and New Hampshire. But none of them are taking off the gloves just yet. These spots are basically political patty-cake. The punchiest Iowa ad, in fact, is from an independent group, the Conservative Club for Growth, which mocks the Democratic frontrunner. UNIDENTIFIED MALE: Howard Dean should take his tax-hiking, government-expanding latte-drinking, sushi-eating, Volvo-driving, "New York Times"-reading...

UNIDENTIFIED FEMALE: Body-piercing, Hollywood-loving, left-wing freak show back to Vermont, where it belongs.

KURTZ: Pretty low stuff going negative on latte lovers. But Club for Growth president Steve Moore says his $100,000 ad bite is designed to hurt Dean in the general election, since he thinks the former Vermont governor has the nomination sewn up.

STEPHEN MOORE, PRESIDENT, CLUB FOR GROWTH: I would put pretty high odds at this point that Howard Dean is going to be the nominee.

KURTZ: The candidates, meanwhile, are replaying their greatest hits and targeting certain voting blocks. Dean is the doctor.

NARRATOR: As governor, he provided health care coverage for nearly every child in his state and prescription drug benefits for seniors.

KURTZ: Senior citizens, you may recall, vote in large numbers. Dean also promises...

NARRATOR: ... to provide health insurance for every American.

KURTZ: Well, not quite. The Dean plan would cover only 30 million of the 45 million uninsured.

Gephardt is Mr. tough on trade, pitching himself to Iowa union members and formers hurt by global competition.

NARRATOR: One candidate for president voted against NAFTA and the China trade deal, Dick Gephardt.

REP. RICHARD GEPHARDT (D-MO), DEMOCRATIC PRESIDENTIAL CANDIDATE (voice-over): We must raise global standards so that everyone everywhere does better.

KURTZ: Lieberman is the middle-of-the-road centrist seeking middle class votes.

NARRATOR: He's the only one who has proposed a new cut in tax rates for the middle class. Not tax increases. The only one fighting for paid family and medical leave. He's the only one who's consistently taken a clear stand against terrorism and tyranny.

KURTZ: The only one opposed to terrorism? Not quite. But even this Lieberman swipe at Dean's temperament in a New Hampshire ad...

NARRATOR: It will take more than extreme anger.

KURTZ: ... doesn't mention Howard Dean's name.

(on camera): Why does the Club for Growth pummel Dean while his rivals are running softer ads? Simple. Candidates who attack often trigger a backlash because voters see them as too negative. But if the Dean steamroller keeps moving at full speed, his opponents may risk throwing some sharper tacks beneath his tires.

This is Howard Kurtz of CNN's "RELIABLE SOURCES."

(END VIDEOTAPE)

WOODRUFF: And in addition to its TV ad, the Club for Growth is taking its anti-Democratic message a step further. Today, the group launched the Web site moveright.org in an effort to raise $5 million in hard money to be used to spotlight the Democratic hopefuls' tax proposals.

Democratic presidential candidate John Kerry is a subject of a new book by historian Douglas Brinkley. "Tour of Duty: John Kerry and the Vietnam War" hits the bookstores this week. It covers his military career and his journey from decorated war veteran to anti-war activist.

Douglas Brinkley joins me now from New York.

Good to see you again.

DOUGLAS BRINKLEY, HISTORIAN: Thanks for having me on, Judy.

WOODRUFF: I want to ask you, first of all, about the timing of this book. It chronicles the war experiences of John Kerry. But it's coming out just before the Iowa caucuses, a very important contest for him.

You're going to be talking about the book in Iowa. The Kerry campaign points out that you're going to be talking about the book all over the country. Is this part of the Kerry campaign? Are you trying to help him as a candidate?

BRINKLEY: No, I'm not. But what's happened to me is I just wanted to do a book on the Vietnam War, particularly the Navy in Vietnam. And Senator Kerry a while ago gave me all of his war diaries.

I went and looked at them. And they're voluminous, including all of his correspondence from Vietnam and his papers from the VVAW, the Vietnam Veterans Against the War. So it's a great treasure trove of material.

And my publisher, William Morrow (ph), wanted to get the book out as soon as possible. I think they would have preferred it out in the fall. But I got it done as quickly and as smartly as I could with the time I have. But I think the fact that my character is in the news -- my book is about John Kerry, but it's also about the Navy and the Mekong Delta and the swift boats in Vietnam.

WOODRUFF: But you're comfortable with the idea that you're being out there talking about him as a hero in Vietnam coincides with his campaign? BRINKLEY: Look, hero in Vietnam, one has to read the book to decide if that's it. The "Atlantic Monthly" excerpts from the book, for example -- I mean, you're dealing with the accidental killing with his crew of an old man and a buffalo. Is that heroism? You're dealing with having to have a government policy of shooting people in free fire zones.

Vietnam is a very complicated thing. It is true that John Kerry, somebody privileged from Yale, was able to go into the military and was wounded three times and won three Purple Hearts. But there's a lot of moral ambiguity in Vietnam, hence in the book.

And I think that when Kerry came back he then, of course, joined the anti-war movement because he lost so many of his friends over there. People like Dick Pershing, who was the grandson of "Black Jack" Pershing (UNINTELLIGIBLE). So it's a very dramatic story of both war and anti-war, which is Vietnam. They're called the haunted generation for a reason, and I try to capture that feeling.

WOODRUFF: Well, Doug Brinkley, is John Kerry a hero for what he did in Vietnam?

BRINKLEY: I'm not -- he's somebody who's a patriot for what he did in Vietnam. That when his number came up, he enlisted. He didn't try to claim he was a conscientious objector.

In a letter he wrote to his mother and father that I read, he called himself early -- this was when he was on the Gridly (ph) in 1968 -- an uncommitted soldier. And I was curious about that. I mean, what if you felt Vietnam was somehow wrong, that the Johnson administration, the Nixon administrations were wrong, yet you were in uniform and had to fight for your country? How does one live with that?

And then, of course, you get all the dilemmas of the Vietnam veterans. They came back. There was no parade for them. Many of them had been ignored.

They came back to very poor VA hospitals. You have the questions of Agent Orange and the like. And I call this book, Judy, "Tour of Duty." But studying Kerry, what interested me, as I'm telling you, one man and a group of his friends' story through Vietnam as he went from the Gridly (ph) to the Mekong Delta, but also with John McCain looking for the POWs and MIAs and finally working for the normalization of relations in Vietnam.

WOODRUFF: Voters looking at John Kerry, what did you learn about his character that stays with him today?

BRINKLEY: How deeply reflective he is. When you read these journals, he was very well read. And he was -- in many ways, the prose was affected by his love of Hemingway and Fitzgerald. And he was trying to capture something.

But just how he looks deeply into issues. Sometimes this is a great thing to have in a policymaker and it works very well at certain speeches. But other times, you're looking for sound bites for the nightly news. And he hasn't mastered that art.

Instead, he tends to talk at great length about Middle East policy instead of maybe having the one or two lines that are going to get remembered. And I think it's this sort of the dilemma of a deeply reflective, intelligent man, and you know, operating in this sound bite culture.

WOODRUFF: Douglas Brinkley, distinguished historian. His latest book, "Tour of Duty: John Kerry in the Vietnam War."

Douglas Brinkley, good to see you again. Thank you very much for talking with us.

BRINKLEY: Thank you.

WOODRUFF: We appreciate it.

BRINKLEY: OK, thanks.

WOODRUFF: Separately, another story, an embattled governor goes on television tonight to try to save his political career. Coming up, the controversy that has some Connecticut lawmakers talking about impeachment.

(COMMERCIAL BREAK)

WOODRUFF: Republican Governor John Rowland of Connecticut goes on statewide television in a couple of hours to deliver what may be the most important speech of his political career.

CNN's Deborah Feyerick is in New York with details -- Deborah.

DEBORAH FEYERICK, CNN CORRESPONDENT: Judy, Governor John Rowland tonight is reaching out to the people who elected him three times, once again seeking their support. The threat of impeachment is looming at the state capital. Democrats meeting tomorrow to decide whether to begin proceedings to get the governor out.

The once popular Republican met with six of the state's top lawmakers yesterday. A meeting described as somber, and almost like a wake.

(BEGIN VIDEO CLIP)

GOV. JOHN ROWLAND (R), CONNECTICUT: Good morning.

(END VIDEO CLIP)

FEYERICK: Rowland is the focus of a federal investigation into alleged bribery and bid rigging. Federal agents yesterday subpoenaed the governor's financial records, including tax returns for the last seven years. At issue, luxury improvements on the governor's lake home. Rowland said he paid for them, then admitted he didn't. Not the hot tub, not the heating system.

Rowland conceded the people paying were employees and people seeking to do business with the state. One of them a big contractor with hundreds of millions in state deals. The governor has denied influencing any contracts. Now the State Ethics Commission is looking into a D.C. condo Rowland allegedly sold above market price.

His approval ratings have fallen. A new Quinnipiac Poll which had him at above 50 percent now having him at around -- at around 62 percent, saying that they disapprove of what has happened. The specter of corruption has prompted the governor to talk to the people of Connecticut and to lobby state lawmakers to try to avoid impeachment.

The governor said it would hobble the government and, in his words, "suck the oxygen out of the building." Both the House and Senate are controlled by Democrats. It's not clear whether Republicans will stand by their governor, especially with the entire assembly up for re-election next year. The governor's made it clear he will not resign -- Judy.

WOODRUFF: All right. Deborah Feyerick. And of course we'll be following that speech when it comes along tonight. Deborah, thank you very much.

When Senator Tom Harkin talks, people in Iowa listen carefully. So which Democratic presidential candidate will Harkin back in the Iowa caucuses? The senator joins me next live from the Hawkeye State.

Plus, we've seen a lot of Howard Dean on the campaign trail, but not his wife. Will that be changing anytime soon?

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

WESLEY CLARK (D), DEMOCRATIC PRESIDENTIAL CANDIDATE: I believe we're bringing a lot of people over.

ANNOUNCER: He's rising in the polls. But can this retired general catch up with Howard Dean?

A campaign clash over your taxes.

DEAN: Middle class people did not see a tax cut. There was no middle class tax cut.

LIEBERMAN: I don't know which is worse, that he wants to repeal the tax cuts or that he won't admit that they ever existed.

ANNOUNCER: So who's right? We'll break down the numbers.

He's the top Democrat in Congress, but he faces a tough fight for re-election.

WOODRUFF: This is going to be an up-hill fight, isn't it?

ANNOUNCER: We'll speak with Senate Minority Leader Tom Daschle.

Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. With less than three weeks to go before the New Hampshire primary a new tracking poll shows Howard Dean still leading his Democratic rivals by a wide margin in the Granite State. But, look at this. A survey shows Wesley Clark moving into second place, narrowly ahead of John Kerry. CNN's Dan Lothian is with Clark in New Hampshire today.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF (voice-over): The Clark campaign is clearly feeling good about the latest numbers that shows he is closing in on front-runner Howard Dean. Clark aides saying that, quote, "He is growing as a candidate. He is becoming more confident and more comfortable and that the voters are starting to buy his message."

This aide also believing that voters out there believe that Clark has the best chance at beating Bush. Clark says he is not watching poll numbers but he does believe the voters are starting to tune in to his message.

WESLEY CLARK (D), PRESIDENTIAL CANDIDATE: I'm getting a tremendous response from the people in New Hampshire. And I think you'll see that today in the meeting. It's really nice to be able to communicate with people and talk to them. And I'm getting a lot of resonance out there for what I'm saying. I believe we need a higher standard of leadership in America. And so do the people in New Hampshire. And that's why they're coming and responding this way.

LOTHIAN: Howard Dean campaigning in Iowa was asked if he was concerned about the movement in Clark's campaign? He said no. But here in New Hampshire, some of his supporters are clearly concerned. Outside the Clark event they were handing out anti-Clark flyers to people attending. One aide for Clark said, "He's used to taking real bullets, he should be able to handle verbal attacks."

Dan Lothian, CNN, Peterborough, New Hampshire.

(END VIDEOTAPE)

WOODRUFF: So that's the situation in New Hampshire. Now we turn to our Iowa countdown, and questions about who may be joining forces with Howard Dean.

In Iowa today, INSIDE POLITICS asked John Edwards about suggestions that he may be coordinating his efforts to some degree with the Dean camp. Perhaps with a vice presidential nod in mind. Edwards says it isn't so.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: My campaign is not about Governor Dean, nor about any of the other candidates. Never has been and never will be. I'm focused on the things that need to be done to change this country and I'll continue to be focused on that.

(END VIDEO CLIP)

WOODRUFF: With just 12 days to go before the Iowa caucuses, many political observers have been wondering when and if home state Senator Tom Harkin might endorse a presidential contender. Senator Harkin joins us right now from Cedar Rapids. Senator, good to see you.

SEN TOM HARKIN (D), IOWA: Hi, Judy.

WOODRUFF: So put us out of our misery. Are you going to endorse or are you going to stay neutral?

HARKIN: Judy, I don't have you in any misery. Look, I'm just honest with you, that at this time, this afternoon, I have not made any decision yet. I have tried to be open and fair to all the candidates, and we have an open system here.

As you know, I had all these forums with the candidates last year. I have not helped or hindered any candidate. I've tried to make sure that each candidate was able to put his or her best foot forward and to get their message out. But right now...

WOODRUFF: Senator, I was just going to say, you know these candidates, you know some of them better than others. You've known some for a long time. You got all the information you need to make the decision. What's the holdup?

HARKIN: Well, I guess, Judy, the holdup is, like so many Iowans, we're just confronted with a lot of good choices. I know that may sound trite but it's true. There are no bad choices in this lineup. Every candidate is very good. That's why I think we have a large undecided group of Democrats still just a week and a half away because there just are so many good choices there.

WOODRUFF: Let me ask you about a specific report coming in to CNN. Sources have been telling us that you were close to endorsing Howard Dean, but then you came under pressure by some of the labor groups that are supporting Dick Gephardt, who said to you, in essence, don't do it. You're going to hurt Dick Gephardt. Is that true?

HARKIN: Well, Judy, I've been called by a lot of people, as you can imagine, from a lot of different camps. And I've tried to take all their calls and to talk with everyone openly and honestly about this. But no one's threatened me or anything like that. I think most people try to put their best foot forward.

But, quite frankly, we have a week and a half to go, and I am, like most Iowans, reaching a decision point. But as I said, there are a lot of undecided Democrats still here in Iowa.

WOODRUFF: What do you think of Howard Dean?

HARKIN: I like Howard Dean. I like them all. I think he's put on a very impressive campaign, I will say that. He started out last year. And now it looks like he's probably first here, or at least close bunched up with a couple of others. Very impressive campaign.

WOODRUFF: The fact that John Kerry slipping to third place in New Hampshire, does that affect the thinking of Iowa voters, do you think?

HARKIN: Well, I don't think so. I think Iowans are going to look at the candidates, again, are they connecting with people? Do they have a strong message? Are they able to motivate, inspire, organize people?

And the issues that are particularly important to us. Rural issues, health care issues, education issues. You know, one out of every five Iowans receive Social Security. So these are issues that are not only unique to Iowa, but I think are very pertinent to the oncoming total campaign for president.

So I don't think where a candidate is out in the polls in South Carolina or Oklahoma or New Hampshire has really much bearing here.

WOODRUFF: Senator Kerry, among other things, has requested the ability of Howard Dean to lead the country and to lead Democrats to victory in November. Do you share any of those worries, concerns?

HARKIN: No, I don't. I was quite surprised that he got both Al Gore and Bill Bradley to endorse him. That seems to be pretty inclusive.

WOODRUFF: Let me just get this clear before I let you go, Senator Harkin. There's a chance that you could endorse between now and the 19th? Is that right?

HARKIN: Well, look, I am a caucus attender. And I might at some point very soon make it clear. But I am still wrestling with this.

and as I said, I'm not unique. I can tell you, Judy, there are a lot of Iowans out here who feel just like I do, these are really good candidates. And it's very difficult to say -- well, like I said, there's no bad choices. Maybe someone stands out more than the rest in each of our opinions. And that's what I'm trying to decide right now.

WOODRUFF: We hear you. Senator Tom Harkin. And we hope you'll come back when you do make that decision.

HARKIN: I'll see you out here this weekend.

WOODRUFF: I'll be there. Thank you very much. Senator Tom Harkin. We appreciate it.

HARKIN: Thank you.

WOODRUFF: As we reported earlier, Howard Dean has come under some political fire for, among other things, for saying that middle- class Americans do not or did not benefit from the Bush tax cut. The question is, do Dean's numbers add up? To find out we went to the Web site FactCheck.org. It's a Web site sponsored by the University of Pennsylvania's Annenberg Public Policy Center. And there we found our former colleague, Brooks Jackson, who's working on this Web site.

Brooks, we are so glad to have you back to talk about this. Because we know how much you follow politics in general, and these specific kinds of questions in particular. What about Dean's numbers? When he says the average middle-class person only got about $300, and it was wiped out by payroll -- property taxes and so forth, what's the truth of that?

BROOKS JACKSON, ANNENBERG PUBLIC POLICY CENTER: Oh, this is fascinating. This is the kind of stuff I love. He says $304, first of all. He's very precise about it. And the numbers kind of add up, but sort of don't. Let's take a look at how he arrived at that.

First of all he didn't make them up. He starts with good numbers. He starts with a distribution of tax benefits that's put out by the Tax Policy Center which is a very nonpartisan group here in town. And what that shows is that the lowest 20 percent of taxpayers got only about a $3, on the average tax cut. Most of those people don't make enough to pay taxes in the first place. So it's quite logical. And as you can see from the graphic here as you go farther up the income scale, you get more and more of a tax cut.

Now let's take a look at Dean's arithmetic? Where did he come up with the $304 figure? He added up the lowest 20 percent, then the $235 gotten by the second 20 percent, then the $676 gotten by the middle 20 percent, divided by three. Lo and behold, he has an average much $304.70. Actually closer to $305, but he must have rounded down instead of up.

Now, that almost founds plausible, but hold on. Take that same logic, and look at what happens when you add it up a different 20 percent starting from the top. If you add up all the tax cuts gotten by the people in the top 20 percent, the next 20 percent down and the middle 20 percent, you come up with an average of...

(CROSSTALK)

WOODRUFF: ... a very different way of looking at it.

So bottom line is there one correct number out there? And by the way he says that $300 was virtually wiped out by increases in property taxes and health care costs.

JACKSON: And that's not documented yet. For some people it clearly was. For many others it wasn't. But he's starting with an unreasonably low number because he says 60 percent of us got $304.

Actually, if you have to pick one number, a much better number is the median tax cut, $470. Half of all Americans got more than that. Half of all Americans got less than that.

Now, but one number isn't really a very good way to look at this because it's so lumpy. It depends on whether you're married, whether you've got kids. Just take a look quickly at a few typical tax cuts, give you some idea. These are all from the Tax Policy Center, by the way. Nonpartisan figures.

If you're a single person, you can see that one little single stick figure on the left making $15,000 a year, you get a $350 tax cut. Not a whole lot.

If you're a married couple with no children making $35,000 a year, you get over $900. If you're a couple with two children, and they're both under age 17, and qualify for the child tax credit, which was increased, making $50,000 a year you get $1773 in a tax cut.

Now Howard Dean says he'd repeal every penny of that. So he would like you to believe that it's much lower than it really is.

WOODRUFF: All right. Brooks Jackson showing us there's a lot more to these numbers and many more variables perhaps than sometimes politicians use in their shorthand references.

JACKSON: Way more.

WOODRUFF: Brooks Jackson, thanks very much. We hope to have you back on. Thank you, during this campaign season.

Howard Dean is all over TV news and the national newsmagazines. But we never see his wife. Coming up, the candidate explains why his spouse is staying off the campaign trail.

Later, Senate minority leader Tom Daschle talks about his upcoming challenge from South Dakota's one-time congressman.

And then Education Secretary Rod Paige joins me for a parent/teacher conference on education reform.

(COMMERCIAL BREAK)

WOODRUFF: You may have noticed or perhaps you haven't, Howard Dean's wife has been mostly absent from the campaign trail. She's a medical doctor, and she works as a doctor in Vermont. Except for those rare occasions such as his campaign announcement. Well, on the road in Iowa yesterday, Dean told reporters that that is just fine with him.

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: Our deal in 23 years of marriage has been that we respect each other. And we respect our goals in life. And we support each other's goals in life. Her goal in life is to be a good doctor, a good mom. And I think that's a pretty good goal and I'm going to support that. So I do not intend to drag her around, because I think I need her as a prop for the campaign trail.

(END VIDEO CLIP) WOODRUFF: Dean says that the public will eventually get to see more of Dr. Judith Dean and to get to know her and he says if he wins the presidency, he says, she'll join him in the White House, and he says she'll practice medicine in Washington.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: Senate minority leader Tom Daschle faces a number of challenges on Capitol Hill this year and one very big challenge back home. Former South Dakota Congressman John Thune who came within 524 votes of winning the state's other U.S. Senate seat in 2002 has announced that he plans to run against Senator Daschle.

During an interview on INSIDE POLITICS yesterday, Thune told me he is absolutely confident that he can win. I asked Senator Daschle today for his reaction.

(BEGIN VIDEOTAPE)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: Well you have to be to run a race like this. I have a lot of respect for John. This is a tough decision for him. This is going to be a hard-fought race, a close race. But I'm looking forward to it as well. And I have at least that much confidence about my ultimate success.

WOODRUFF: You are right now ahead with money. You've been organizing your campaign, obviously longer than he has. But on the other hand, he's going to have President Bush in there campaigning for him, we can be sure of that, a number of times. Mr. Bush won South Dakota in 2000, with what, 60 percent of the vote? Well ahead of Al Gore. This is going to be an uphill fight, isn't it?

DASCHLE: Well, of course, President Bush came to South Dakota two years ago, and I think he came five times. And ultimately, my colleague Tim Johnson won that election. I've had the good fortune to be on the ballot for re-election the last two times, Judy, and I won by over 60 percent.

So I've also been able to develop a close and good relationship with the people of my state, and I'm proud of that. So I'm not sure that whether it's President Bush or any other celebrity is going to make that much difference.

WOODRUFF: So you're confident you can hold on to the seat?

DASCHLE: Absolutely, absolutely.

WOODRUFF: Let's talk a little bit about the presidential campaign. Howard Dean, and the repercussion from that. Howard Dean, front-runner at this point, is already saying that Washington Democrats, and of course that includes you, have on too many important issues gone along with President Bush.

Education, tax cuts, the war in Iraq. He even says, Washington Democrats have been co-opted by President Bush. What do you say to that?

DASCHLE: Well, I guess I'd invite Howard Dean to come down to the Senate floor on occasion when we've taken on these battles. We fought hard on the tax policy. We brought up a lot of very important questions on the Iraq issue, as it was being debated. We fought on judges. And won a few of those votes. And in fact, every one that we've taken on we've won so far.

Even though we have confirmed 171 judges in this administration. So we'll stand on our record and by our record. I'm very proud of it. We'll take on other fights. We'll agree with the president when he's right. We'll disagree with him when he's wrong.

WOODRUFF: But isn't much of the premise of his campaign that Washington Democrats haven't stood up to this president enough? And that it's on the strength of that argument that he's done as well as he has.

DASCHLE: Well, I don't know that that's the only argument that has brought him the kind of support that he has. Obviously there is some frustration among many Democrats about the direction the Bush administration has taken this country. They have every right to be as frustrated, and as concerned as I think they are.

We're going to continue to provide an alternative, a difference in direction, and use as many opportunities as we have available to us. Keep in mind, we're in the minority. And as long as we're in the minority, we don't have the ability to set a different agenda in the United States Senate. We're going to change that in this election. But that's partly what this debate will be all about.

WOODRUFF: It is already being discussed among Democrats all over this country. I know you're hearing these discussions. Worry that Howard Dean, if he's the nominee of the party, is going to hurt Democrats down ballot. How worried are you about that? I realize we don't know who the nominee is going to be yet. But at this point is there any reason to worry that he would not be a strong candidate?

DASCHLE: There is no reason. We're going to have a strong candidate, Judy, I promise you. Howard Dean is one of many who I think would serve our country and our party very, very well. So I'm enthusiastic. I think this is going to be a very competitive race.

Keep in mind our country is very equally divided politically. And I think they're just looking for the standard bearer for the Democratic party and you're going to see us coalesce around whoever that turns out to be.

WOODRUFF: Senator, one other issue, immigration. President Bush today proposing to grant legal status to foreign workers who can prove they have a job in the U.S. Your colleague Senator Kennedy says this is woefully inadequate. He's very disappointed. Are you as disappointed?

DASCHLE: Well, I think Senator Kennedy's right. We've got to find a way to ensure that we have broad, comprehensive immigration reform on a bipartisan basis, Judy. I think the president is right to make this a priority. At long last he's waited a long time. But I think we can have a good debate about what comprehensive legislation can be passed. It ought to be done. It ought to be done this year.

(END VIDEOTAPE)

WOODRUFF: Senate Minority Leader Tom Daschle.

Coming up, the ABCs of education reform. I'll ask Education Secretary Rob Paige what grade he would give No Child Left Behind.

(COMMERCIAL BREAK)

(AUDIO/VIDEO GAP)

ROD PAIGE, EDUCATION SECRETARY: Well, first of all, let's congratulate those states for setting high standards. What this means is Florida and other states that you named set high standards and they're taking on that percentage of schools to improve them. We never use the term failing.

What we say is those schools have been identified for improvement. And when we identify schools for improvement that means we want to give them more resources, more technical assistance and to help them. Some states take on more schools than others and the states that you named are very aggressive.

WOODRUFF: But you have to acknowledge that the picture coming back is of a lot of schools that are failing to meet, whether you call it high standards or whatever, failing to meet what's expected of them.

PAIGE: Oh, well, actually, what is expected of them is set by the state itself. So Florida could have set standards so there would have been fewer schools. But they chose to set standards so they would address a lot of schools. Far from being a negative, that's a very strong positive for the state of Florida.

WOODRUFF: Let me read you a comment from someone who was absolutely critical to getting No Child Left Behind passed in the Congress and that is Senator Edward Kennedy.

"The education budget will leave over 4.6 million children left behind because it is, he says, $7 billion short of the amount originally promised for smaller classes, better teachers, and higher standards." What do you say?

PAIGE: First thing I say is President Kennedy -- Senator Kennedy is a great American. But in this case, I think we make the case that the federal government is pushing money at states faster than they can spend it. That's $6 billion now of unspent money that was appropriated for this use in states now.

Laying on the table unused. And so states rather than complaining about not having enough money should look and see if they're effectively spending the money the federal government's made available for them already.

WOODRUFF: So you're saying the money is there, they just can't find it?

PAIGE: Well, I think they can find it. I think it is there. I think that it's just floods of dollars going into states. This isn't really a money issue. Money is important. But since President Bush has been in place, 41 percent increase in the federal funding to schools. So now the issue is about programs, not funding. We don't have a money issue here.

WOODRUFF: Let me also quote something from the Democratic, at least at this point, the man who appears to be the front-runner in the Democratic raise for president, Howard Dean. He is saying these standards in his words are so ridiculous that every single public school in America will be deemed a school in need of improvement or a failing school by 2013.

PAIGE: Is he saying that every state set ridiculous standards? For the No Child Left Behind act, the states themselves set the standards and I'd hate to think that this candidate for the presidency is saying that each state was ridiculous in setting its own standards.

WOODRUFF: He also cites a teacher who he identified in a debate Sunday. He said she was very qualified, had been teaching for over two decades. And he said she was kicked out of her job, told she was not qualified.

PAIGE: Here again, the states have a role in deciding what is qualified in that state. So I hate to think that he's accusing these states of not being thoughtful in what they're doing.

I think the states are very thoughtful. Each state sets its own standards. We don't have a federal system here. We have a collection of state systems. And the states are working hard towards making improvement.

WOODRUFF: Education Secretary Rod Paige. We appreciate you joining us. Complicated subject.

PAIGE: It is.

WOODRUFF: Thanks a lot. Great to see you.

Coming up next, if it's January, and it's an election year, then it must be time for politics and pancakes. Stay with us.

(COMMERCIAL BREAK)

WOODRUFF: Howard Dean began his day in Iowa with a pancake breakfast. The sight of Dean wearing a chef's apron with spatula in hand and standing over a griddle full of pancakes brought to mind one of the memorable moments of the 2000 primary season.

That was Republican Gary Bower showing off his concentration skills at a pancake flipping contest, just before the New Hampshire primary. He was a good sport about it all. He fell backwards but then came back, he still held onto the pancake. Just another eventful day on the campaign trail.

That's it for INSIDE POLITICS 2004. I'm Judy Woodruff. "CROSSFIRE" starts right now.

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