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Inside Politics
President Prepares State of Union Address; Enron Investigation Continues
Aired January 28, 2002 - 16:00 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.
JUDY WOODRUFF, CNN ANCHOR: I'm Judy Woodruff in Washington. As the president fine-tunes tomorrow's "State of the Union" address, I'll ask adviser Karen Hughes about the higher-than-usual expectations facing Mr. Bush.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: I'm John King at the White House. Vice President Dick Cheney calls it -- quote -- "a classic Washington feeding frenzy," and in an interview, discusses the collapse of Enron and the looming court battle pitting the administration against the Congress.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: I'm Candy Crowley with a new glimpse at how Americans view the president in these times of war and recession.
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: I'm Bill Schneider. Try as he might, can President Bush avoid the "State of the Union" mistakes made by his father?
ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff.
WOODRUFF: And thank you for joining us for our big comeback edition of INSIDE POLITICS, after four and a half months being away. I'm personally thrilled we are returning at a time when politics is front and center here in Washington again, with President Bush's "State of the Union" address tomorrow, as well as the ongoing Enron investigation.
We begin with Enron, and the president's insistence again today that it is not a political issue.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There are some on Capitol Hill who want to politicize this issue. This is not a political issue. It is a business issue, that this nation must deal with. And, you know, Enron had made contributions to a lot of people around Washington, D.C. And if they came to this administration looking for help, they didn't find any.
(END VIDEO CLIP) WOODRUFF: But our new poll shows nearly half of all Americans believe the Bush administration's involvement with Enron was either illegal or unethical. Most of those come down on the side of unethical. About half also say Congressional Democrats' involvement with Enron was illegal or unethical. But here is where President Bush has an advantage over the Democrats on the Hill. Less than 1/3 believe Mr. Bush felt he owed special treatment to Enron executives who gave him campaign donations. More than half say Congressional Democrats felt beholden to Enron donors.
And now to a dispute involving Enron that may land the Bush administration in court. The president today flatly refused to identify the business executives who advised him and Vice President Dick Cheney on their energy policy. Our senior White House correspondent John King is just back from an interview with Mr. Cheney -- John.
KING: Mr. Cheney, Judy, even more than the president, at the center of the debate. It of course predates the collapse of Enron. Some Democrats in Congress, with the help of the investigative arm of Congress, the GAO, the General Accounting Office, want all the records -- who did vice president and his energy task force meet with? What did they discuss? What energy companies came into the White House?
Mr. Cheney has been fighting this now for months and months and months. It has of course received new prominence. Democrats saying, did you meet with Enron? Did Enron get any special treatment? A bit of a political issue now in this congressional election year. Some Republicans on Capitol Hill in principle support the administration, but they should be able to have those private meetings and not disclose who they met with, and what was discussed. Politically, though, some Republicans worry the Democrats will run a campaign-year ad saying Bush helping out his big oil buddies.
If at all this is causing any political heat here at the White House, the vice president quite calm about it, but also quite defiant. He said he is not going to turn over those records.
(BEGIN VIDEO CLIP)
DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: We went through this debate with Henry Waxman and the GAO last summer. We said, no, we're not going to give it to you. And the GAO at that point sort of went quite, they kind of backed off, because I think they know they have a weak case. All the attorneys that have reviewed this, and the Justice Department, White House counsel's office and so forth, have concluded that the GAO doesn't have the authority they're seeking to exercise there.
What's happened now, since Enron collapsed, is the suggestion that somehow now the GAO ought to come back and get that information. But the collapse of Enron in no way, shape or form, affects the basic principle we're trying to protect here. This is about the ability of future presidents and vice presidents to do their job.
(END VIDEO CLIP) KING: Cheney called it a classic Washington feeding frenzy. Some of his aides suggest this is payback -- Democrats on Capitol Hill, trying to get back at the Republicans for all the investigations during the Clinton years. In any the event, though, Mr. Cheney says he has the full support of the president, that under no circumstances will he turn over these documents. The administration is confident it will win its case if and when this goes to the courts, and that could happen as soon as the end of this week.
I asked him about the politics of all this, whether he wanted to do anything to calm the fears of Republicans on Capitol Hill. He shrugged and he said he understands those complaints, but that he and the president are determined to defend the principle, even if they have to go to court about it -- Judy.
WOODRUFF: John, they're holding the line on turning these documents over. But at the same time, are they at all sensitive to charges that somehow there was a quid pro quo, that when you take that kind of money over that period of time, that there was special treatment involved?
KING: They are a bit more sensitive to that, and you can hear that if you listen closely to the answers now. Not only are they saying Enron did not receive any special treatment, but they also -- and the vice president did this in the interview -- going out of their way to say Enron supported the Kyoto protocol, the climate change treaty, which this administration backed away from and was roundly criticized for.
Mr. Cheney said Enron in those meetings asked for mandatory emission levels on carbon dioxide, and those were not included in the Bush energy plan as well. Yes, he says there are some things in the plan Enron likes, but they are going out of their way now, as the political intensity steps up here, the volume and the heat turn up here in Washington, they say there are many things Enron asked for that Enron did not get, including help at the very end just before it went and filed for bankruptcy -- Judy.
WOODRUFF: All right, John King at the White House. Thank you, John.
The Enron story may be out there, but as Mr. Bush prepares for his "State of the Union" address tomorrow, many Americans appear to be in his corner. Our senior political correspondent, Candy Crowley, has been talking to people and checking out our new poll.
(BEGIN VIDEOTAPE)
CROWLEY (voice-over): Dinnertime talk at the Scaff (ph) household in Arinda, California, is of carrots and swimming lessons -- anything but the "P" word.
UNIDENTIFIED FEMALE: We try not to talk about politics a whole lot, especially with the children around.
CROWLEY: He is a business exec, who voted for George Bush. UNIDENTIFIED MALE: He's running the government like a business, and that is important.
CROWLEY: She's a self-described old hippie, a tie-dye kind of liberal.
UNIDENTIFIED FEMALE: I didn't vote for President Bush, but I do think, in light of the tragedies that we've been dealing with, that so far, I think he's done a pretty good job addressing those issues.
CROWLEY: That feeling echoes loudly in the latest CNN-"USA Today"-Gallup poll. Eighty-three percent of those questioned rated the first year of the Bush administration a success. The poll numbers paint the picture of a president whose handling of the war has given him a powerful hand to play in the domestic arena.
Respondents were asked whether they had more confidence in President Bush or Congressional Democrats to handle 13 different issues. On 11 of those issues, the advantage goes to the Oval Office. The president's biggest vote of confidence came on the subject of terrorism, where he out-polls Democrats by 65 points. The numbers are not as stratospheric, but still hearty on the home front: Education, the president, 58 percent, Democrats, 31. The economy, the president, 55 percent, Democrats, 36. And Social Security, the president, 45 percent, to Democrats' 40.
Mr. Bush has wrestled Democrats to a tie on health care. And while Democrats do hold an eight-point edge on the environment, it's paltry compared to numbers past. In total, 71 percent of those polled said George Bush agrees with them on the issues that matter most. And as September 11th moves deeper into the past, and if the war continues to go well, what matters begins to move back home.
UNIDENTIFIED FEMALE: As much as I enormously relieved that the question of national security is being addressed, I have a concern that a lot of people are going to fall through the cracks during this recession.
UNIDENTIFIED MALE: It looks like we're going to have some deficits coming in the next couple of years. And that's disappointing for me.
(END VIDEOTAPE)
CROWLEY: During the campaign, then-Governor Bush frequently told crowds if they would only vote for him, he would take that political capital and spend it in Washington on his agenda. But what George Bush did not get during the election he now has, 73 percent of those polled in this "U.S.A. TODAY"-CNN-Gallup poll said they believe the policies the president is pursuing are taking the country in the right direction -- Judy.
WOODRUFF: A lot of comfort for the White House.
CROWLEY: Absolutely. WOODRUFF: Candy Crowley, thanks very much.
Well, we've been talking about the war, and we turn to the war front now. President Bush met today with Afghan interim leader, Hamid Karzai, at the White House. And he reaffirmed his pledge that the United States will play a leading role in rebuilding Afghanistan. Despite international concerns about U.S. treatment of Afghan captives in Cuba, Mr. Bush says his administration will continue to call them "detainees," not prisoners of war. But the president says he still is weighing the legal ramifications of whether the Geneva Conventions apply to those detainees.
The White House is offering whatever help it can to find an American journalist who has apparently been taken hostage in Pakistan. Photographs were e-mailed to one of Daniel Pearl's colleagues at "The Wall Street Journal," showing Pearl shackled and held at gunpoint.
President Bush is expected to devote a good deal of his "State of the Union" address to the war on terrorism but, we're told, he doesn't want to overdo it -- a lesson he learned from watching his father. Now our senior political analyst, Bill Schneider.
(BEGIN VIDEOTAPE)
SCHNEIDER (voice-over): An acclaimed war leader delivers a widely-anticipated "State of the Union" speech to a country mired in recession. It's 1992. The president is George Bush. Now the same spotlight is on his son. But this President Bush is in a stronger position, politically, than that President Bush was 10 years ago.
This President Bush has a sky-high job approval rating. His father's job rating at the time of his 1992 "State of the Union" speech: 46. That President Bush spent the first half of his speech talking about world affairs.
GEORGE BUSH SR., FORMER PRESIDENT OF THE UNITED STATES: The biggest thing that has happened in the world in my life, in our lives, is this: by the grace of God, America won the Cold War.
(APPLAUSE)
SCHNEIDER: But for most of his audience in 1992, the biggest thing that had happened in their lives was the threat of losing their jobs and their health care. That President Bush didn't get around to mentioning jobs until the middle of his speech. This President Bush does not intend to make that mistake.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My economic plan is summed up in one word: jobs.
SCHNEIDER: It was hard for the first President Bush to ask the nation to "stay the course" in 1992, because the course he had set...
GEORGE BUSH SR.: Read my lips: no new taxes!
(APPLAUSE) SCHNEIDER: ... was one he had abandoned. This President Bush has no intention of changing course.
GEORGE W. BUSH: Not over my dead body will they raise your taxes.
(APPLAUSE)
SCHNEIDER (on camera): This President Bush has his party solidly behind him. A lot of Republicans were behind his father in 1992, with their knives out. Bill Schneider, CNN, Washington.
(END VIDEOTAPE)
WOODRUFF: Well, another big influence on Mr. Bush's address tomorrow: presidential counselor, Karen Hughes. Coming up next on INSIDE POLITICS, Hughes goes on the record with us about the big speech, policy and politics.
And later, find out why rock star Bono is part of the "Inside Buzz" here in Washington.
And on our back page: "State of the Union" speeches through the years, as echoes of the times.
(COMMERCIAL BREAK)
WOODRUFF: As we relaunch "INSIDE POLITICS," we are starting a new daily segment, "On the Record." It's a place for newsmaker interviews and, we hope, provocative debates. Today, on the eve of the president's "State of the Union" speech, I'll speak to the woman who is in charge of Mr. Bush's message, counselor to the president, Karen Hughes.
But first, CNN's senior White House correspondent, John King, sets the stage for the president's big speech.
(BEGIN VIDEOTAPE)
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: He is, on the one hand, the wartime commander-in-chief, riding high in the polls, but at an uncertain time in the mission. On the other hand, the president of a country in recession, suddenly again running deficits.
STEPHEN HESS, BROOKINGS INSTITUTE: A really skillful president is a two-ball juggler. He's got to keep both those balls in the air at the same time and be able to catch them.
KING: So, the "State of the Union" address is both a major moment and a major challenge.
SEN. CHUCK HAGEL (R), NEBRASKA: I don't recall a time, nor have read of a time, certainly in modern political history, when a president will deal with as much, or has dealt with as much as what the president and the Congress will deal with this year. KING: Wartime Washington is a city of shifting allegiances, remarkable bipartisanship when it comes to the war on terrorism overseas, but a widening political divide if the issue is fighting unemployment here at home.
REP. NANCY PELOSI (D-CA), MINORITY WHIP: It's clear to me that the economic policies of the Bush administration have not gotten the economy going. We need to hear something different from the president on Tuesday night.
KING: It is a Congressional election year, and the economy and the return of deficit spending will dominate the domestic policy debate.
HAGEL: The Democrats, it seems to me, have to be careful not to overreach, not to be too partisan, not to push too far or blame Bush or the Republicans for every ill that we have to deal with in this country.
PETER HART, DEMOCRATIC POLLSTER: If you think that we'll arrive at the end of 2002 and see a whole bunch of commercials about war and what went on there, I don't think so. It will be right back to the domestic issue. That is what is going to count.
KING: Democrats think they have the upper hand on the domestic front. The challenge for the president is proving his popularity is not limited to the war overseas.
KEN DUBERSTEIN, FMR. REAGAN CHIEF OF STATE: That's the right thing to do, because if you hoard your chips, they waste away. So I think you're going to see him spend them wisely, for his priorities, especially straightening out the economy.
KING: Enron is a wild card, a blossoming business scandal that some believe could prove a political headache to the Bush White House.
HESS: While it hasn't come into the White House as such, there are an awful lot of the president's friends that are involved, and you can be sure that sort of a subliminal theme of the Democrats will be how to use the Enron crisis to remind Americans that those fellows are George W. Bush's friends.
KING: The stage for the speech is a Capitol under heavy guard. A few miles away, another reminder of the day that drives any discussion of the "State of the Union." John King, CNN, the White House.
(END VIDEOTAPE)
WOODRUFF: And that brings us to my conversation with counselor to the president, Karen Hughes. I spoke to her just a short time ago.
(BEGIN VIDEOTAPE)
KAREN HUGHES, COUNSELOR TO THE PRESIDENT: Judy, it's good to be here, and welcome back to "INSIDE POLITICS." I'm sure political junkies all across America and here in Washington are celebrating today.
(LAUGHTER)
WOODRUFF: We all are celebrating. Karen, thank you again. The president's "State of the Union" addresses tomorrow night: how much of it will focus on the war on terrorism?
HUGHES: Obviously some of it, Judy. This is a very unique "State of the Union." As the president will say right in the beginning, we meet at a time when our country is at war and our economy is in recession, and our society faces unprecedented danger. So it's a unique "State of the Union." But he will focus the "State of Union" on three great goals for America, and that is: winning the war on terrorism, protecting our homeland from the threat of further attack and defeating this recession and restoring economic growth so we can create jobs. And those will be the focus of the "State of the Union."
WOODRUFF: But is it really possible to be separate any of the rest the president's agenda from the war a terrorism, given the fact that it seems to intertwined with everything else going on?
HUGHES: Well, I think, you know, just because we are -- obviously, his focus is on conducting and winning this war against terrorism. But it's also on defeating this recession. And he will say that, because his economic security plan for America can be summed up in one word: "jobs." And he knows it's very important that we act now to stimulate our economy, to get a good energy policy, to expand free trade -- all those policies that help create jobs for American workers. So that's an important part of the "State of the Union" as well. But he talks about three great goals, and I think we can accomplish all three of them.
WOODRUFF: In the report by John King, Karen, leading up to this, he had an interview with Nancy Pelosi, the House Democratic whip, in which she said among other things, the president has to say something different about the economy because what he's done so far hasn't worked.
HUGHES: Well, one of the things that needs to be done is that the Democrats in the United States Senate need to act on what the president has suggested. As you know, the House, last fall, some 800,000 lost jobs ago, passed an economic stimulus plan. And we believe we have enough votes to pass that plan in the Senate. Yet the Senate leadership has refused to bring it up.
And so the president again tomorrow night will call on the United States Senate and the Congress to act to stimulate jobs for Americans. Because that's really important for our economy. But as I said, it's broader than just an economic stimulus. It includes education reform, it includes an energy package, it includes free trade. There are a lot of things we need to do to help create jobs.
WOODRUFF: You say there are three great goals, and yet a top adviser, unnamed to the president, quoted in "The Washington Post" today, is saying the president is going to be introducing a fairly familiar agenda, because to do anything huge is probably not achievable with the current Congress.
HUGHES: Well, I don't know who that is, Judy, but I've been integrally involved in the drafting of the speech, and I can assure you that's not the way the president views this. He sees this as a time of great opportunity, not only in America, to preserve the good that has emerged in the aftermath of the evil of September 11th, but also a time of great opportunity throughout the world. And he'll say in his speech: We are working with Russia and China and India, in ways that we never have before, to extend peace and prosperity. So the president sees this as a time of great opportunity. And in many ways, I think this is a very inspirational speech, which is somewhat unusual for a "State of the Union." It's not the typical laundry list.
WOODRUFF: Karen, as we know, Enron is a story that is getting a great deal of coverage these days. CNN-"USA Today"-Gallup poll out today shows, while the president enjoying very high popularity, 84 percent of the people approving of the job he's doing, it also shows that a total of 47 percent of the people think that the Bush administration did something either illegal or unethical, with regard to Enron. How do you deal with that?
HUGHES: Well, Judy, I think the polls show something similar. People are somewhat skeptical about Congress as well. I can just tell you what's been reported. Our two cabinet secretaries who were called for Enron and asked for help, refused to intervene and did not feel it was appropriate, and did nothing inappropriate or unethical.
The president has focused on two things: One is, finding out what went wrong. And many of the things at Enron that went wrong occurred back in 1997 and 1998, during the Clinton administration. And I think there are legitimate questions as to where were the federal regulators when these accounting practices were occurring at Enron. And then going forward, he wants to make sure that this does not happen to other workers at other companies.
You know, the president is understandably outraged about all this, Judy. When I talked to him about this, it came up at a meeting at the Oval Office a couple of weeks ago. We were talking about how the executive had enriched themselves, and the workers, many of them were left with nothing. And the president said, "I thought the captain was supposed to be the last one off a sinking ship, not the first one." He said, "This stinks."
WOODRUFF: But if, out of the six something -- almost $6 million that Enron has given to politicians over the last 12 years, 3/4 of that money went to Republicans, $736,000 of it went to George Bush and George W. Bush in his different campaigns. So my question is, isn't there a greater burden on the president, on Republicans here?
HUGHES: Well, I think again, Judy, we have to look at the facts. And the facts are, Enron called two of our cabinet secretaries, apparently hinted, or in one case asked, and in another case hinted for help. And our cabinet secretaries determined it was not appropriate to intervene. We are conducting a criminal investigation. We are the ones who are conducting a pension investigation to find out what went wrong.
WOODRUFF: This president, Karen Hughes, you probably know as well as anyone -- practically all the analysts would agree -- he has benefited over the years from low expectations. This time, for this "State of the Union," people are saying high expectations. How you are wrestling with that?
HUGHES: Judy, I think the president feels very comfortable about this speech. He's looking forward to the opportunity to going before Congress, to going before the American people. It's an opportunity to update people on the great progress, that we're winning the war against terror but we have much more to do.
And one of the things he wants to remind people is, 19 hijackers committed those terrible acts of September 11th, yet 100,000 terrorists trained in the training camps of Afghanistan. So we have lot more to do, both to win the war against terror and to restore our economy and strengthen our homeland security. And that's what this speech is about.
WOODRUFF: One last question, Karen Hughes, about the press. It was noted by everyone, I think, that the president was carrying a book by former CBS correspondent Bernard Goldberg, "Bias," when he left the White House the other day. Does that mean the president thinks the press is biased?
HUGHES: Well, I think he was -- I think some of stories recounted in that book feel a little familiar to him and to those of us in the administration. We were laughing about some of the choices of words that the media sometimes use. But you know, the president has a good relationship with members of the media. He likes to tease the media. He enjoys the jousting and jesting with them. And over all, I think our administration has a good relationship with members of the news media.
WOODRUFF: Karen Hughes, we want to thank you very much for joining us, and particularly on this first day that "Inside Politics" is back.
HUGHES: Welcome back!
WOODRUFF: Thank you. Good to see you.
Coming up later tonight: be sure to watch CNN for John King's extended interview with Vice President Dick Cheney. "LIVE FROM THE WHITE HOUSE WITH JOHN KING" begins at 8:00 p.m. Eastern.
Campaign fund raising and a passing of the conservative courts headline our Monday edition of campaign news daily. President Bush, Vice President Cheney and first lady Laura Bush, trying to hit the campaign trail this year. The three of them will make appearances to raise money for House Republicans. Vice President Cheney will handle most of the estimated 50 events.
California Democrats are turning to their own big money attraction. Former President Clinton will headline fund raisers this week for Senator Barbara Boxer and Governor Gray Davis.
And, expect words of praise for Elizabeth Dole at the annual Washington gathering of conservative activists. Dole will introduce retiring Senator Jesse Helms this week. Helms is expected to have a lot of nice things to say about his potential successes.
Well, it's no joke. President Bush left some Washington insiders laughing. Ahead on INSIDE POLITICS, the president, laugh lines and laundry lists, make it into the "Inside Buzz," courtesy of our Bob Novak.
(COMMERCIAL BREAK)
WOODRUFF: It's time now for some "Inside Buzz."
First up, our John King is back with some tidbits on the State of the Union and on Vice President Cheney.
Hello again, John. What are you hearing about the State of the Union?
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Hello to you, Judy.
Just a short time before INSIDE POLITICS came back on the air, the president was to have his first complete rehearsal of the State of the Union address. He has had some practice sessions. He was hoping to get this speech done in 40 to 45 minutes, we are told -- three major themes: the economy, homeland security and the war on terrorism.
The president will try in the speech to transfer his wartime popularity to the domestic agenda here at home. We know that is a difficult task -- all the partisanship starting to come up, especially with over the economy, with Democrats. And if you count every time you change a sentence or two -- and you know how we do that with scripts here in television -- if you count that as a draft, the president was on about draft No. 25 when he began that session here, the rehearsal, 3:30 Washington time, so about an hour ago.
WOODRUFF: Twenty-five, but who is counting?
John, we know you just talked with the vice president. Is he going to be there when the president speaks tomorrow night?
KING: He very much wants to be there. He would not answer the question directly. He says that is because of the ongoing security concerns. Remember, when the president addressed the joint session of Congress to discuss his response to the events of September 11, the vice president did not go because of security concerns. He very much wants to go.
The new leader of Afghanistan, Mr. Karzai, will be there for the speech, we are told. There has been a joke among Cheney aides that, if can he can not go, perhaps he should do what he has done throughout this crisis when he is off at that secure, undisclosed location. Then he participates via a secure video link. They're joking perhaps they should put a TV in the seat up there. You could show Dick Cheney watching from wherever he is. That is to keep Democrat Bobby Byrd, who will get the seat, if the vice president doesn't go, from that seat.
He wants to go. We just won't get an answer until tomorrow.
WOODRUFF: Oh, so much suspense around these things.
All right, John King -- and we will talk to you later.
For more "Inside Buzz," let's turn now to our Bob Novak.
All right, Bob, what are you hearing about the State of the Union?
ROBERT NOVAK, CNN POLITICAL ANALYST: Judy, I have been listening and watching State of the Unions since Dwight Eisenhower. And they all -- every one president has these long laundry lists of proposals. I'm told that this president will not have a long laundry list. Remember the last time, Bill Clinton had over 100 new programs, went over an hour.
They were trying to get the speech, the last I heard, down to 40 minutes. I will give you a bet. They won't make it.
WOODRUFF: All right, you have also been talking to some Republicans about the budget. What are they saying?
NOVAK: You remember last week I told you that the House Republicans went to this retreat at Saint Michael's Island last week. Well, it turns out that two administration officials, including Budget Director Mitch Daniels, joined them there. And the House majority whip, soon to be majority leader, Tom DeLay really read them the riot act on too much deficit spending.
They all went off to Camp David later to see the president. And the president, I am told, reassured Mr. DeLay. But it's interesting. The president is getting heat from both the left and the right on the budget.
WOODRUFF: Now, Bob, I have a quote to read to you from -- this was spoken Saturday night in Washington -- quote -- "A year ago, I couldn't have told you that Mullah Omar was the head of Afghanistan. I bet that sucker wishes I hadn't found out."
Who spoke those words, Bob?
NOVAK: That was George W. Bush, president of the United States, speaking at the Alfalfa dinner, a black-tie dinner, very, very exclusive. I have been here 45 years, never been invited. And President Bush got something nobody at the old Alfalfa-goers had ever seen. He got a standing ovation for telling a joke. That's called popularity inside the Beltway.
WOODRUFF: All right, well, you are always popular with us. Bob Novak, thanks. We'll see you later. Another inside story: Congressional Republicans will have a special guest at their three-day retreat this week: U2 leader singer Bono. The politically active entertainer and Senator Bill Frist will make a joint presentation to lawmakers about Third World debt relief and the AIDS epidemic in Africa.
The Bush administration is hoping to generate its own buzz before the president's State of the Union address tomorrow night.
Joining me now: Howard Kurtz of CNN's "RELIABLE SOURCES."
Howard, just how intense is this pre-State of the Union blitz from the White House?
HOWARD KURTZ, "RELIABLE SOURCES": There was a time, Judy, when presidents just went up to Hill and gave the speech. And then for many years, tidbits were leaked to newspaper reporters.
But now you have a full-fledged, five-star theatrical rollout. So we saw the president, for example, going out a few days ago to talk to military reservists and say that he would push for a major increase in Pentagon spending; then talking to a law enforcement audience about spending more on homeland security; also letting it be known that more spending was in store for the National Institutes of Health.
But yesterday, the blitz, as you put it, reached Afghanistan-like intensity: Dick Cheney and White House Chief of Staff Andrew Card charging their way onto four Sunday talk shows to help set the stage for tomorrow night's speech; and, of course, and Karen Hughes out today talking to you and other journalists, trying to do the same thing.
WOODRUFF: Well, we are happy to be part of that process.
What does the White House, Howard, gain from this? Or do they gain very much from it?
KURTZ: The White House gains something very important. And that is the opportunity to frame the debate. Bill Clinton had this for eight years, so that, if the president can emphasize the areas that are important to him, what he wants to spend more money on, the stories don't dwell, therefore, on what programs might be cut. A lot of domestic spending is going to be limited to the rate of inflation.
And Democrats don't get a chance to talk about what happened to the surplus, because reporters are hungry for more information about what is going to be in that speech. We can't resist. So they get to put it out piece by piece. And the stories, therefore, are built around their point of view, the arguments that the White House wants to make.
WOODRUFF: It is a challenge for all of us in journalism to figure out how to balance what they are saying with other points of view.
KURTZ: Well, once the president gives the speech and the Democrats get a chance to argue about specific budgetary or policy detail, the media will say, "Well, this is kind of dull," and move on to something hotter. so clearly this is the White House moment. And they are using every means available and all the different media outlets to try to set that stage and also build an audience for Mr. Bush tomorrow night.
WOODRUFF: All right, Howard Kurtz, thanks very much. And we will see you again soon. Appreciate it.
KURTZ: Well, the State of the Union speech usually captures the attention of the average citizen, but it literally steals the spotlight in official Washington. Does Washington have its priorities out of line?
Our new segment from senior analyst Jeff Greenfield -- we're calling it "Bite of the Apple." Normally, he's in New York. Today, he happens to be here in Washington.
Hello, Jeff.
JEFF GREENFIELD, CNN SR. ANALYST: Happens, indeed.
Yes, in fact, all Washington is agog, of course, over tomorrow's speech because -- well, because that's what people in Washington do. This is, after all, the kind of town where people watch C-SPAN 2 for erotic pleasure. So let this out-of-towner offer up a heretical idea: Most of the time these pageants do not really move most Americans one way or another.
Only rarely do State of the Union speeches find a president in the middle of a major political drama.
(BEGIN VIDEOTAPE)
(voice-over): In 1974, Richard Nixon tried to tell an increasingly suspicious nation that one year of Watergate was enough. Seven months later, he was gone.
UNIDENTIFIED MALE: The president of the United States!
(APPLAUSE)
GREENFIELD: In 1987, Ronald Reagan, confronting a failed arms- for-hostages deal with Iran and secret funding for Nicaragua's contras, bluntly took the blame.
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Ronald REAGAN, PRESIDENT OF THE UNITED STATES: It did not work. And for that, I assume full responsibility.
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GREENFIELD: The country forgave him. In 1992, the first President Bush, on the eve of a reelection fight, tried to promise that his battle against recession would be as triumphant as the war against Iraq.
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GEORGE H.W. BUSH, PRESIDENT OF THE UNITED STATES: This will not stand.
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GREENFIELD: The country didn't buy it and showed him the door in November.
In 1998, as the Monica Lewinsky scandal was exploding around him, President Clinton ignored it and declared his priority for the budget surplus.
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WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: Social Security first!
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GREENFIELD: That brought him precious political capital.
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GREENFIELD: But these are the exceptions. What happens in November, I suggest, has way more to do with the state of the economy and the optimism or pessimism of the voters than with any January speech. It brings to mind what Dallas Cowboy great Duane Thomas said at a Super Bowl when asked how it felt to play in the ultimate game. "Let me ask you something. If this is the ultimate game," said Thomas, "how come they're going to play it again next year?"
Judy.
WOODRUFF: I'm sure we're not going to ask that question about the State of the Union address tomorrow.
Jeff, but in the meantime, tell us about "GREENFIELD AT LARGE" tonight.
GREENFIELD: Well, completely contradicting what I just said, we will be talking about the State of the Union. We're going to be talking about the demands on rhetoric with a couple of former White House speechwriters and then talk about the politics of it. Once we get past the obvious "He has got to figure out a way to translate his popularity on the war into the economy," we are going to try to put some meat on those bones tonight at 11:00 Eastern time. And thank you for mentioning that.
WOODRUFF: And we will be watching, Jeff Greenfield. And we will see you later. Thanks.
WOODRUFF: Ahead here: State governments are forced to grapple with budget shortfalls. Also coming up: President Bush and Afghanistan's interim leader one on one at the White House.
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WOODRUFF: In "The Newscycle" this hour: President Bush said today he will not turn over records of last year's White House policy meetings on energy. Officials from Enron attended some of those meetings. And the General Accounting Office is weighing a possible lawsuit to get those meeting records.
President Bush and Afghanistan's interim leader Hamid Karzai met today at the White House. Karzai thanked the American people for their support and he said Afghanistan will remain what he called a good partner.
One other note on Afghanistan: Just this hour, CNN has learned a U.S. Army CH-47 Chinook helicopter made what the Pentagon calls a hard landing in Afghanistan. Early reports say there are -- quote -- "some injuries" -- more details expected a little later today.
And a quick reminder: Wolf Blitzer interviews Afghan interim leader Hamid Karzai next hour on "WOLF BLITZER REPORTS." That's coming up at 5:00 Eastern right here on CNN.
On the eve of the State of the Union speech, many governors are all too aware of the nation's economic challenges. For them, the budget crunch has already hit very close to home.
Political analyst Ron Brownstein of "The Los Angeles Times" has that.
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RON BROWNSTEIN, CNN POLITICAL ANALYST (voice-over): Coast to coast, it's the morning after.
GOVERNOR GRAY DAVIS (D), CALIFORNIA: The department of Finance and the legislative analysts agree that we are facing a shortfall of more than $12 billion.
GOVERNOR GEORGE PATAKI (R), NEW YORK: Our projected revenue losses will reach into the billions this fiscal year and next. We will lose more revenue than many states collect.
GOVERNOR JESSE VENTURA, MINNESOTA: Over two years, Minnesota will collect almost $2 billion less in taxes and fees than we thought.
BROWNSTEIN: In the late 1990s, good times filled state treasuries with the money to both cut taxes and increase spending on popular programs like education. This year, the party's over. In all, with the economy slowing, over 40 states are facing budget deficits.
GOVERNOR JEB BUSH (R), FLORIDA: When you met in session a few weeks ago, you dealt with a $1.3 billion shortfall in our budget.
BROWNSTEIN: And that's demanding painful budget cuts, the delay of promised tax reductions and, in some cases, tax increases, even as 36 states are gearing up to elect new governors this fall. That could make for a volatile election season.
Over the past five years, when states were flush, only three incumbent governors were defeated nationwide. But when state budgets were tight in the early 1990s, a dozen incumbent governors were voted out. If that history is any guide, red ink now may leave some governors singing the blues this fall.
This is Ron Brownstein for INSIDE POLITICS.
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WOODRUFF: Well, State of the Union address are usually about policy and politics, but do they also say something about the mood of the country?
Coming up next on our "Back Page," our Bruce Morton flashes back to presidential speeches of the past and the tenor of the times.
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WOODRUFF: Now, in what we are calling our "Back Page": State of the Union addresses as a mirror of the times. As President Bush prepares to speak to Congress and to the American people tomorrow night, our Bruce Morton has been thinking about the intersection between the national mood and a president's message.
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BRUCE MORTON, CNN CORRESPONDENT (voice-over): Woodrow Wilson was the first president in more than 100 years to deliver the speech in person. Lot of men in uniform as his policy unfolded, songs like "Over There" and "It's a Grand Old Flag." Americans were making the world safe for democracy. And then the jazz age: short skirts and the Charleston.
It was the bee's knees, good times. And President Herbert Hoover said the fundamental difficulties which have brought about financial strains in foreign countries do not exist in the United States. Well, wrong. Babe Ruth could still hit them out of the park. Folk singers were singing "This land belongs to you and me."
UNIDENTIFIED MALE (singing): This land was made for you and me.
MORTON: But it was the Great Depression, a lot of people lining up for free soup. And their song was: Brother, can you spare a dime?
Franklin Roosevelt convinced the country it could come back. And it did -- slowly. Big bands played swing. You could tell the mood was improving. And then Roosevelt led the country through its Second World War. And then peace came. And the G.I.s came home. And cars grew fins and they built the interstate highway system. And then people lived in suburbs and went to malls. And Dwight Eisenhower spoke about the State of the Union. And then John Kennedy and the Beatles. And then Lyndon Johnson, the mood ugly again by then: cities burning, protest against the Vietnam War.
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RICHARD NIXON, PRESIDENT OF THE UNITED STATES: But now that night has ended.
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MORTON: Richard Nixon said he had a plan to end the war and he did -- sort of. But by then, he was caught up in Watergate. He told the Congress in 1974 that one year of Watergate was enough. It wasn't. And he was forced to resign later that year.
The country was calmer under Ronald Reagan. People liked the Gipper.
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REAGAN: Win just one for the Gipper.
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MORTON: And then Bill Clinton brought his own music, rock 'n' roll, a little the dated, maybe, but -- his State of the Union speeches weren't what caught the country's interest, of course. Gennifer and Paula and, most of all, Monica did that. He did not ask Congress for Social Security reform, Medicare reform, Instead, he got impeached, gave one State of the Union in the middle of his Senate trial.
The speeches are a ritual. Now it's George W. Bush's turn, a popular president leading a country at war. This year's symbol might be an American flag.
Bruce Morton, CNN, Washington.
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WOODRUFF: And it probably is the flag this year.
Well, now something you are going to be hearing from us frequently. We are going to ask you: Have you have heard something you liked on today's show or not? We are looking for your comments. We welcome them. You can check out our Web page at CNN.com/INSIDEPOLITICS. And you can e-mail us with your thoughts, your suggestions, or whatever is on your mind -- well, almost whatever.
The State of the Union in focus when we return: My colleague Aaron Brown joins me after the break with his thoughts, our thoughts about tomorrow night's address.
(COMMERCIAL BREAK) WOODRUFF: We have a lot planned in the days ahead here on INSIDE POLITICS. And we will tell you, first of all, what is in store tomorrow. My guest will include White House Chief of Staff Andy Card. We will also have an interview with House Speaker Dennis Hastert. And, of course, tomorrow's INSIDE POLITICS will have a complete preview of tomorrow night's State of the Union address, which you can see live here on CNN.
Well, now a special treat: joining me here in Washington, my colleague Aaron Brown, who, as you know, host of CNN's "NEWSNIGHT." And he is going to be -- we will be co-anchoring coverage tomorrow night, along with Jeff Greenfield.
And before I let you a say a word, you brought the warm weather.
AARON BROWN, "NEWSNIGHT": Well, I will take credit for it. I will take credit for the warm weather. And I will take no credit for the three pictures of us they just put you up.
WOODRUFF: OK, I didn't see that.
BROWN: And this is not technically an e-mail, but it's so nice to have you back where I think you belong, doing politics every day and to have IP back. This is good and this is fun.
WOODRUFF: Well, we are actually very excited about it.
Tomorrow night, we do a lot of comparing in journalism. And there is a lot of comparing going on with last year. The president -- talking about warmth -- he is going to be more warmly welcomed than he was last year.
BROWN: It just seems to me such a different speech than when he came up a year ago to do the budget speech -- a squeaker of an election, a country not altogether pleased -- or at least evenly split about how it came out, the White House having spent an awful lot of time tamping down expectations of the president's speech. And all that is different.
The president, on the 20th of September, when he came to the Congress after the attack and really found his voice that day -- you can no longer say about the president he hasn't found his rhetorical center. He has found it. And so I think the expectations for him tomorrow are so much higher than they were a year ago.
On the other hand, I think it's the kind of speech that is right for him. This is a time when straight talk, not rhetorical flourishes, seems to me to be in order, if I were writing the speech. And I'm glad I'm not. And I think the president is most comfortable when he is giving straight talk.
WOODRUFF: Can you imagine the pressure, though, on the people around the president? They want this speech to be the very best. They know the expectations are higher. I talked with Karen Hughes about that a little bit earlier. They have got to get it right. BROWN: Yes. And my own sense is, they didn't have a very good week last week with it. They went out a couple times last week to try out themes for the speech. And those appearances seemed to be overwhelmed by other events.
WOODRUFF: Enron.
BROWN: By Enron, for one, by the detainees and all the attention that we were paying on that. And so those talks in New Orleans, for one, and in West Virginia, it seemed to me, got lost a bit in the press of business for the day. So I'm not sure they have set it up quite the way they wanted.
WOODRUFF: Well, and I think they realize that. And I think they are now even today trying to be -- to say: Well, the president is just as outraged about Enron. Again, we heard Karen say that earlier.
BROWN: Well, one of things I'm sure of is, if I realize it, they realized it days ago. And it never occurred to me I was ahead of them on anything.
It will be interesting to see if and how he weaves Enron into the speech. There's a risk of saying too much, because he certainly doesn't want to be any more connected to what happened in Houston than he is already. And, on the other hand, can he afford to say nothing?
WOODRUFF: But it's hard to imagine that he -- George Bush uttering the word Enron. But we will see tomorrow night.
All right, we're going to have to leave. Aaron Brown, I look forward to...
BROWN: I'll see you tomorrow.
WOODRUFF: ... working with you today, tomorrow and on.
CNN's coverage continues now with "WOLF BLITZER REPORTS: America Strikes Back."
Thanks for joining us on this first day. I'm Judy Woodruff.
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