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Inside Politics

Attacks and Counterattacks Over the Airwaves; Interview With DNC Chairman Terry McAuliffe

Aired March 12, 2004 - 15:30   ET

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

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


(BEGIN VIDEOTAPE)
ANNOUNCER: Attacks.

(BEGIN VIDEO CLIP, AD)

NARRATOR: John Kerry's plan: to pay for new government spending, raise taxes by at least $900 billion.

(END VIDEO CLIP)

ANNOUNCER: And counterattacks over the airwaves.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Once again, George Bush is misleading America.

(END VIDEO CLIP)

ANNOUNCER: We'll check the accuracy of these ads.

He's the man who runs the Democratic Party. But is Terry McAuliffe on the same page as John Kerry?

A new fight in Congress over the price of your prescription drugs. Is it party politics or something more? We'll go live to Capitol Hill.

(END VIDEOTAPE)

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

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us.

Depending on whom you ask they are either negative ads or legitimate efforts to set the record straight. Either way, the television airwaves will soon be filled with competing claims by President Bush and Senator John Kerry. The Kerry team plans to air a new ad in 16 battleground states as a direct response to a new Bush ad set to air in 18 states that criticizes the Kerry record. It is the first major air battle of the 2004 race. But does the truth get lost amid all the back and forth?

We asked Howard Kurtz of CNN's "RELIABLE SOURCES" to check the facts. (BEGIN VIDEOTAPE)

HOWARD KURTZ, "RELIABLE SOURCES" (voice-over): In launching the first attack ad of his reelection campaign, President Bush is charging John Kerry with being a big tax-and-spend man and weak on terrorism and defense. But how do those claims measure up?

(BEGIN VIDEO CLIP, AD)

NARRATOR: John Kerry's plan, to pay for new government spending, raise taxes by at least $900 billion.

(END VIDEO CLIP)

KURTZ: That's misleading. Kerry has no $900 billion tax plan. The only taxes he says he'll raise are on the wealthiest 2 percent of Americans, which would raise about $250 billion over 10 years. What Kerry does have is a health insurance plan that would cost $900 billion over the next decade. The Bush ad assumes that Kerry would have to raise taxes to cover the rest, which the Democratic senator denies, though he hasn't fully explained how he'd finance his health proposal.

(BEGIN VIDEO CLIP, AD)

NARRATOR: On the war on terror, weaken the Patriot Act used to arrest terrorists and protect America.

(END VIDEO CLIP)

KURTZ: The ad tries to make it sound like John Kerry is soft on terrorism. Kerry voted for the Patriot Act, but charges that Attorney General John Ashcroft has abused it, and wants to replace the law with a new Patriot Act that he says would better protect individual privacy.

(BEGIN VIDEO CLIP, AD)

NARRATOR: And he wanted to delay defending America until the United Nations approved.

(END VIDEO CLIP)

KURTZ: Kerry has slammed the president for rushing to invade Iraq without exhausting all diplomatic efforts at the U.N., but never called for U.N. approval of the war.

The Kerry campaign wasted little time in throwing together a counterattack spot, although, with only a fraction of the Bush team's $100 million war chest, it's not clear the senator will be able to match the president's advertising buy in 18 battleground states. The ad's message, Kerry doesn't want to act like the last nominee from Massachusetts, Michael Dukakis, who didn't respond to many attacks by Bush's fair.

(BEGIN VIDEO CLIP, AD) NARRATOR: Once again, George Bush is misleading America. John Kerry has never called for a $900 billion tax increase. He wants to cut taxes for the middle class. Doesn't America deserve more from its president than misleading negative ads?

(END VIDEO CLIP)

KURTZ: Kerry's response ad, of course, is also negative. And it's true that the senator has suggested a further cut for middle- income taxpayers.

But some budget experts say Kerry's overall figures don't add up, that he can't cut taxes further, pay for health care and other social programs and hold the line on the deficit, as he's promised to do. A "Washington Post" analysis says Kerry would boost spending by $165 billion.

(END VIDEOTAPE)

KURTZ: The Bush campaign knows that most voters don't read the fine print and that charging Kerry with a $900 billion tax plan, even if no such plan exists, will raise doubts about him as a liberal big spender.

The Kerry campaign knows that it can't let such charges stick and that its ad will raise doubts about the president's credibility. What's clear is that the ad wars have already turned combative and it's only the middle of March -- Judy.

WOODRUFF: Indeed, it is.

Howard, a couple of questions. No. 1, some are saying, well, it's not really a negative ad. It's not really an attack ad. We've heard the Bush camp saying these are just contrast ads. What's the difference?

KURTZ: Campaigns hate the N-word, negative ads, and they love that contrast term. It's so much more delicate. But the fact is, these are both very negative ads.

Kerry is in effect calling the president a liar. The president is raising very serious questions about Kerry's record on the economy and terrorism. They're fair game. They're issue-oriented. They're not about personal conduct or personal scandal or alleged scandal. But they are negative.

WOODRUFF: Howard, is there any evidence of how effective ads like this are? You've had so much news conference of this campaign up until now. Now the public, in these 16 or 18 states, is seeing clearly paid ads. Are these going to be as effective as watching the news, more effective? What do we think?

KURTZ: Voters in every survey say they don't like negative ads. But negative advertising works, in part, ironically, because they're more likely to believe somebody saying something bad about the other candidate than saying something positive about themselves. The danger here is what happened to Dick Gephardt and Howard Dean in Iowa, where they went heavily negative on each other, turned voters off and they both, as you'll recall, ended up losing in the Iowa caucuses. In other words, if this exchange continues at this kind of rate -- this is like October advertising, not March -- we could see both candidates driving each other's negatives up. And that could end up being a very -- not a very pretty picture.

WOODRUFF: It could bode well for Ralph Nader. Maybe he'll benefit from all of this.

(LAUGHTER)

KURTZ: Good point.

WOODRUFF: OK, Howard Kurtz, thank you very much.

KURTZ: Thank you.

WOODRUFF: Appreciate it. CNN's "RELIABLE SOURCES."

Well, President Bush's new ad is the first TV spot to go negative since John Kerry clinched his party's nomination. But Senator Kerry has already aired TV ads critical of the president. He ran several negative ads early in the primary season, including this one that aired last fall in Iowa.

(BEGIN VIDEO CLIP, AD)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Under George Bush, we have a government that works for those at the top, not you. He's given the biggest tax cuts in history to the wealthy. George Bush and Dick Cheney let polluters and oil companies rewrite our environmental laws. They defend the loopholes that let corporations avoid taxes by moving jobs overseas. I'm John Kerry. And I approve...

(END VIDEO CLIP)

WOODRUFF: Another Kerry campaign ad which aired last September described the Bush administration's record on jobs as -- quote -- "an astonishing failure."

Well, we have more reaction to that new Bush campaign ad. That leads the headlines in our Friday "Campaign News Daily." James Zogby of the Arab American Institute is unhappy with imagery used in the ad while the ad's voice-over announcer refers to the war on terror. Zogby says references to terrorism over the image of what he calls an Arab-looking young male can only create -- quote -- "fear and suspicion." The Bush campaign denies that the ad is insensitive.

Democrat Al Sharpton has received approval for $100,000 in federal matching funds for his campaign. But there's a catch. The Federal Election Commission wants to know if Sharpton loaned more than $50,000 of his own money to his campaign, which would make him ineligible to receive matching funds. The Sharpton campaign says it doesn't expect any problems, but he is prepared to challenge the FEC in court if needed.

Former Democratic hopeful Wesley Clark is liquidating his campaign supplies. Everything from buttons and computers to yard signs and even chocolate Clark Bars went on the auction block this morning in Little Rock.

Well, you may soon be spotting another well-known politician in a TV ad. Former President Bill Clinton is doing some public service announcements. We'll tell you about the cause in a minute.

Later, he has talked with nominee-to-be John Kerry. I'll ask DNC Chairman Terry McAuliffe about the upcoming campaign and about his own job.

And we'll also have more on the strategy behind the moves and countermoves in the campaign ad wars.

(COMMERCIAL BREAK)

WOODRUFF: John Kerry paid a high-profile visit to the offices of the Democratic National Committee this week for a talk with party Chairman Terry McAuliffe. The DNC chairman joins me now from New York.

Terry McAuliffe, good to see you again.

TERRY MCAULIFFE, DNC CHAIRMAN: Judy, great to be with you again.

WOODRUFF: We have Bush campaign ads out arguing that John Kerry's plan, health care plan and his plan to cut the deficit is going to have to mean $900 billion worth of new taxes. Are you worried that this campaign is going to be painting John Kerry right off the bat as another tax-and-spend liberal?

MCAULIFFE: Well, first of all, the ads are wrong. They're misleading. John Kerry has called for tax cuts. He wants to make sure that the middle class, lower-income, small business gets tax cuts.

So, you know, it's just plain wrong. But what I have been saying, Judy, on your show for the last three years is that these Republicans and George Bush are going to continually mislead the American public. They can't talk about positive news about the economy. He's lost three million jobs. Health care has gone up, as you know, 14 percent. He's underfunded schools. So, you know, he's going to try and resort to these tactics to distort our candidate.

WOODRUFF: But this is the way -- but this is the way the Bush campaign is trying to introduce John Kerry to the American people.

MCAULIFFE: Well, that's right. And they're just plain wrong. I think the president of the United States...

WOODRUFF: But how do you know it won't stick, is my question?

MCAULIFFE: Well, they won't because we aggressively are also going to go up with television advertising. The Kerry campaign has just gone up. The Democratic National Committee, as you know, we are prepared to go up immediately.

We're going to get out with our positive a message. Let George Bush and the Bush-Cheney campaign, you know, talk about their distortions. We're going to talk about what we're going to do to move this country forward on the economy, on health care and on education. John Kerry has served this country admirably and we're going to have a campaign that's going to excite a lot of people.

WOODRUFF: Well, it is true that John Kerry's responding. But is he going to be able to keep up? The Bush-Cheney people raising something like $140 million, $150 million. Is John Kerry going to have the ability, the resources, to get his message out there?

MCAULIFFE: Well, and that's something that, you know, I've worried about for several years. As you know the national party, we've got $17 million in the bank, which is $17 million more than we've ever had. We're debt-free. John Kerry can continue to raise money.

I promised John Kerry -- he and I were meeting together for an hour this week over at the national headquarters. The DNC, I'm committed to putting another $100 million together for the campaign. So we're going to have the resources we need. We're never going to have as much money, Judy, as they have. They've got the best money they can buy from the insurance industry, from the energy industry. We're going to be able to compete. We're going to have enough money to get our message out.

I remind you that they outspent Al Gore by $178 million and he did get 500,000 more votes than George Bush did.

WOODRUFF: Well, but they also made it to the White House.

What about the front-loading system, Terry? This was clearly something you wanted. You've done, Don Fowler, one of your predecessors as head of the DNC, said the other day: "Whether or not John Kerry can be an effective candidate operating on limited funds for four or five months until the convention will determine whether this" -- in other words, this front-loading thing -- "was a good idea."

MCAULIFFE: Well, first of all, I remind you that Al Gore and George Bush were the nominees on March 7, about the exact same time that John Kerry became the nominee of our party.

But instead of three days of voting, which you had under the old presidential calendar, three days of voting, 19 states, you now had 38 states voting, over 10 different states. John Kerry proved that he could win in the South, he could win in the West, the East, the North.

WOODRUFF: Right.

MCAULIFFE: It was a much better calendar. We have a nominee. I've said for years that George Bush is going to go up early with an aggressive media buy.

WOODRUFF: All right.

MCAULIFFE: He did that on March 4. We're going to have the money that we need. We are in the best shape -- as John Kerry said to the DNC staff, best shape this party's ever been in.

WOODRUFF: Well, let me talk to you about you, Terry McAuliffe. It was reported that John Kerry, that his campaign was furious with you after you described the president as AWOL in his Air National Guard service. One Kerry aide was quoted as saying at the time, it was just not the message we wanted out there.

They are now putting their own man in at the DNC. Is this going to be somebody who outranks you?

MCAULIFFE: There's no one going into the national party that's going to outrank the chairman of the party. Clearly, the campaign is going to send people over to the DNC. We have been preparing for this. I've been doing this for 24 years. It is always the same with the DNC when you have a candidate.

John Kerry got up in front of the staff and he was spectacular. He said, this is the best DNC we've ever had. He said, Terry McAuliffe deserved tremendous credit. I'll let John Kerry talk about me. I don't need to do that today. But we're going to have people move over. We are one unit today. The Kerry campaign and the DNC, we are together. I spoke to Senator Kerry today. I spoke to him yesterday. I met with him the day before. He and I have had a long 20-year friendship. We're very close personal friends.

We are now and we always will be. So I'm very excited about where we are. We're in the best shape. We have a nominee. We are unified. We have money in the bank.

WOODRUFF: All right.

MCAULIFFE: The issues are on our side. And we're ahead in the polls. It is all positive. You're always going to have campaign people talking about this and that. Listen, this is politics.

WOODRUFF: All right.

MCAULIFFE: We're excited. We're ready to go.

WOODRUFF: We hear you.

MCAULIFFE: Thanks, Judy.

WOODRUFF: Terry McAuliffe, who will remain as chairman of the Democratic National Committee.

MCAULIFFE: You bet.

WOODRUFF: Thank you very much.

MCAULIFFE: Thank you.

WOODRUFF: It's good to see you.

MCAULIFFE: You bet. Thanks.

WOODRUFF: Thank you for talking with us.

Taking off the gloves eight months before the election. Coming up, two veteran reporters join me to talk about the ad war and the general tone of this campaign shaping up between President Bush and Senator Kerry.

(COMMERCIAL BREAK)

WOODRUFF: Joining me now to talk about the already hot tone of this presidential campaign, "TIME" magazine's Karen Tumulty and Dan Balz of "The Washington Post."

Dan, to you firs.

Why has this campaign taken on such a negative, hostile tone, if you will, so early?

DAN BALZ, "THE WASHINGTON POST": Well, I think because the stakes are so large and because I think Senator Kerry came out of the Democratic primaries in relatively good shape. Most nominees of the party come out after a tough fight. Certainly, George Bush came out of a tough fight in 2000 and had to do some repair work.

But there was very little criticism of Senator Kerry. And so I think the Bush campaign feels that they have to move very quickly to try to define Senator Kerry and not let him get up a head of steam.

WOODRUFF: Karen Tumulty, do you think the Bush campaign didn't expect that Kerry -- that the nominee would come out of this process as supposedly strong a shape as Senator Kerry is in?

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, "TIME": Well, certainly, until fairly recently, they were thinking that the nominee was going to be Howard Dean and that in fact it was going to be quite brutal.

So this is something of a surprise for them. Around Washington, you're hearing a lot of talk among Republicans at the sort of slow response time that we've seen out of the Bush operation, because they just really haven't been as nimble as a lot of their, you know, allies were hoping.

WOODRUFF: And, Dan, is that something that they're now trying to turn around? They've now rolled out their second set of ads in the span of one week?

BALZ: Yes. I think, in a funny way, the surprise is how quickly they went negative in their advertising after starting out positive. I think some people assumed that they would start on a positive note, try to build up Bush's image, after having had two tough months, and that they would eventually turn negative.

But Karen's right. There are a lot of Republicans -- and, clearly, the Bush campaign agrees with them -- who said they have to move very quickly on the negative front. And they did it faster than I think a lot of people thought they might.

WOODRUFF: Karen, is there a risk, though, in going negative so early?

TUMULTY: There is. And one of the risks is that this is the first election season we've seen where the candidate himself has to appear, his face, his voice, on the ad, and say, I, George Bush, or, I, John Kerry, approved this ad.

So you can't get that kind of antiseptic distance that candidates really like to have from negative advertising. And we saw in the Democratic primary that when Howard Dean and Dick Gephardt went after each other with negative ads, it actually hurt both of them. Now, here, you're left with only two candidates. There is no alternative beyond Ralph Nader maybe than one of those two. But it could just turn off the electorate entirely.

WOODRUFF: Dan, how do you see that? Is the campaign, the Bush campaign, at this stage, are they concerned about that?

BALZ: I don't think they're overly concerned about that. My guess is that they think that the advertising they're doing -- all of these campaigns test these ads before focus groups and try to get some sense of it. My guess is that they believe that the ads they're putting on the air will work and work effectively and not have a serious effect on Bush and his image.

Most voters are pretty savvy at this point about evaluating the difference between a really harsh personal negative attack and an ad that compares someone's record with the person who put the ad on. And, you know, my guess is that their assumption is that this falls within those pounds, that people will be receptive to a discussion of the record and the issues and that they don't think they can get hurt.

They obviously are taking a risk. They've done it very quickly. And so there is -- it's not as though it's cost-free. But my guess is that the public is ready for a sharp debate.

WOODRUFF: Karen, how will we know whether these ads have been successful? Do we just wait for the next set of polls to come out? Is that really what it comes down to?

TUMULTY: That is sort of what it comes down to.

The one thing that's interesting that we're seeing in this election is that the polls indicate that voters are paying attention much, much earlier than they have been in past elections. So, it could be that the Bush campaign saw that there was a, you know, window of opportunity here to define John Kerry, to use the term of art, and they felt like they really had to seize it, because pretty soon the voters could be tuning out and going off on their summer vacations and not tuning back in until Labor Day.

WOODRUFF: Dan, how do you think we'll know whether these ads are doing the damage that each side hope they're doing?

BALZ: Judy, I think to some extent we try to calibrate this too finely, that we watch a set of ads for a week or so and assume that we're going to see movement.

I think that these ads on both sides are going to be designed to have a longer-term effect. And I think what's going to be important is what are the perceptions of these two candidates in a few months, after we have seen a back-and-forth between the two of them, both campaigning and through the advertising. I think that both sides want to lay down certain impressions and fix certain impressions of their opponents. You can't do that in a week or two of advertising. There's too many distractions. People come and go in terms of paying attention.

So I think it will take a little time before we know.

WOODRUFF: Very quickly, Karen, is this going to keep up from now until November?

TUMULTY: Well, it's very rare that you see a campaign start off nasty and then get nice.

(LAUGHTER)

WOODRUFF: OK. That means yes. Maybe we will see this last until November.

All right, Karen Tumulty, Dan Balz, great to see both of you. Thanks very much.

TUMULTY: Thanks, Judy.

WOODRUFF: Well, former President Bill Clinton, you remember him. He's doing his part to get minority young people to register to vote. He has taped two public service announcements that will be aired off the Black Entertainment Network.

Here's one of them.

(BEGIN VIDEO CLIP, AD)

WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: But you also have the right to speak, be heard and shape your own fate. It's simple. Log on to BET.com and register to vote. It's your right.

(END VIDEO CLIP)

WOODRUFF: Black Entertainment network -- television network -- has donated $1 million in free advertising time for these ads, which are to air between April and November.

Well, health care reform is usually the prescription for discord on Capitol Hill, but it can also lead to some surprises.

(BEGIN VIDEO CLIP)

SEN. TRENT LOTT (R), MISSISSIPPI: My attitude is, if you want to go across the border, if you want to order and buy some other form of drug and take the chance of it being not what you're told it is and cause health problems, my attitude is, go to it.

(END VIDEO CLIP)

WOODRUFF: Coming up, the fight to go across the borders for less expensive medicine.

Also ahead, an apparent presidential change of mind, thanks to the "Political Play of the Week."

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: He's clinched the nomination, but the Democratic Convention is not until July. So what does John Kerry do over the next four months?

We knew that the battle for the White House would get rough, but, please, it's only march.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My opponent clearly has strong beliefs. They just don't last very long.

KERRY: These guys are the most crooked, you know, lying group of people I've ever seen.

ANNOUNCER: We'll look back at the week that was.

(END VIDEOTAPE)

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

WOODRUFF: Welcome back.

With much of the political world focused on the competing campaign ads soon to be aired by President Bush and John Kerry, the candidates themselves are keeping relatively low profiles this Friday. The president had only one public event today and John Kerry is working from his home in Boston. But behind the scenes, away from the cameras, the strategy sessions continue.

CNN's Bob Franken has more on Kerry's plans to make the most of the long road from now till November.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): A key part of the Kerry strategy, according to advisers, hit back. Respond immediately when the Bush forces attack. In fact, use preemptive strikes.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: These guys are the most crooked, you know, lying group of people I've ever seen.

FRANKEN: Plenty of political strategists believe this week's events were largely calculated. John Kerry's scathing remarks just happened to be overheard on a live mic, and just happened to come out before the Bush campaign put out new negative ads.

AD ANNOUNCER: John Kerry, wrong on taxes, wrong on defense.

FRANKEN: A danger for Kerry is that the get Bush Democratic passion of a lively primary campaign will dissipate as the post- primary, pre-general election season drags on and on for months.

The solution, Kerry advisers say, is straightforward. Raise enough money to counter the huge resources Republicans will use to mount a crushing assault. Make sure the candidate always looks like a fight.

TAD DEVINE, SENIOR KERRY ADVISER: I think his message and the message of our campaign to the Bush campaign is simply this: we're not going to take it. You can send all these people out, attack John Kerry, his patriotism, his service to this country. We're simply not going to take it. We're going to push back.

FRANKEN: The Kerry campaign has just launched a section of its Web site called "debunker." And there will be an air war.

AD ANNOUNCER: Once again George Bush is misleading America.

FRANKEN: It could be an eye for an eye campaign, or more accurately an ad for an ad.

(END VIDEOTAPE)

FRANKEN: The Kerry campaign will be trying to have it both ways, attacking the Bush administration and attacking the Bush campaign for attacking him -- Judy.

WOODRUFF: OK. Bob Franken. And again it's only March. Thanks very much. We appreciate it.

Well, as for President Bush, he's moving ahead with his plan to highlight his leadership in the war on terror. Next week he plans political events in Pennsylvania and Florida, and a speech on the one- year anniversary of the start of the war in Iraq. All the while, his new TV ad criticizing John Kerry will be airing on cable networks and in local markets across 18 battleground states.

Earlier today I spoke with the Bush/Cheney campaign manager Ken Mehlman. I started by asking him if his campaign is running a risk by airing a negative ad so early in the campaign season.

(BEGIN VIDEOTAPE) KEN MEHLMAN, BUSH/CHENEY CAMPAIGN MANAGER: Well, I think that our country's had several months of what we called a diatribe: an unprecedented number of attacks by Senator Kerry and by his colleagues. And now we're talking about the issues.

And the fact is Senator Kerry has said in his first 100 days in office he would raise taxes $900 billion. That will be very problematic. If you worry about jobs and if you worry about making our economy better. That would destroy jobs. That would hurt the economy.

He's also said repeatedly he's criticized the PATRIOT Act. He says he would weaken the PATRIOT Act. We disagree. And we disagree with his approach on defense.

These are very important issues we think the American people want to hear addressed.

WOODRUFF: Let me ask you about the tax part because he has not said in so many words I want to raise taxes $900 billion. Here's what his campaign says. They say their health plan, which is going to be paid for by rolling back the Bush tax cuts on the wealthy, has been estimated to cost $900 billion over ten years.

But they say a third of that is going to be paid for with, yes, a tax cut on the wealthy. A third is going to be relief, they say, for those most in need and a third is cost savings.

MEHLMAN: I think the American people have heard such promises from politicians before. They may not have heard such promises from a politician who, as Senator Kerry has, has supported 350 tax increases over the course of his career.

The fact is, his plan would cost $900 billion which they agree with. The fact is allegedly raising taxes on the rich only gets you $250 billion. There is another $650 billion, that he has some secret tax increase plan.

I don't know where he's going to find it, but again, given the fact that he is already, as a senator, voted 350 times for higher taxes I'll bet he's got some good places to look for it.

WOODRUFF: Looking at this campaign overall, Ken Mehlman, are you satisfied with the way your campaign has gotten off the ground? I ask because your first ads using the images of 9/11 were criticized. The president had to go and explain it. You've already had the president name a manufacturing czar. That person had to be pulled back after John Kerry pointed out he had sent jobs to China. Do you feel good about the way your campaign has gotten off?

MEHLMAN: I do. I feel good about it. I feel good about the dialogue the American people are going to have. I feel good about the choice the American people are going to have. I feel good about our ability to discuss this choice and the critical issues our country faces. WOODRUFF: Having said that, "The Los Angeles Times" today is reporting that a number of Republicans, including the White House political director under the first President Bush, are saying they are anxious, they're saying there's a lot of fretting going on, that this nervousness is exacerbated by the fact that so few jobs are being created and so on.

MEHLMAN: I think the country is closely divided. We've always anticipated a close election. This president has incredible transformational leadership. And our opponents know that and they've run a very negative campaign. We've had a diatribe. Now we're going to have a dialogue.

WOODRUFF: Let me also quote you something today from "The Wall Street Journal." This is a quote from Bill Kristol whom you know very well, the editor of "The Weekly Standard."

Among other things he says -- I'm going to quote what he said. He said -- he likens the Republicans' decision to hold the 2004 convention in New York City to the president's landing on the deck of an aircraft carrier. He says, "They are too clever by half with most of these moves."

MEHLMAN: I think that New York City was chosen for the convention by the Republican National Committee because of the fact that it's a fabulous city. It's going to be a great convention. We look forward to it. And we look forward to hosting Mr. Kristol and his colleagues. It's going to be a great time. We look forward to their being up there with us.

(END VIDEOTAPE)

WOODRUFF: Ken Mehlman attributed some of the grumbling Republicans. He said those are people not at the center of our decision making and that's why they're talking to the press.

In the wee hours of this morning the Senate approved President Bush's nomination of Mark McClellan to head Medicare. It had been held up because some senators were upset over McClellan's suspected opposition to the importation of prescription drugs. Joining us now from Capitol Hill our congressional correspondent Joe Johns -- Joe.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Judy, this is one of those issues that is just not going to go away any time soon. The issue of drug reimportation remains very much alive here on Capitol Hill, as well as on the campaign trail. Senator Byron Dorgan was out on the Senate floor again today making the case for it.

SEN. BYRON DORGAN (D), NORTH DAKOTA: We've had an abiding, lengthy debate here in the Congress about the prospect of importing prescription drugs from Canada, for example. The same prescription drugs, same pill, put in the same bottle, made by the same company. The only difference is they are sold for a substantial discount in Canada versus the U.S. consumer price in this country.

(END VIDEO CLIP) JOHNS: And it is not just the Democrats. Senator Bill Frist, the majority leader, also has indicated that he is prepared to pursue it in some form. However he also says that as far as he's concerned there have to be controls for safe, with the emphasis on safe reimportation of drugs.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R-TN), MAJORITY LEADER: The whole issue of prescription drug reimportation has arisen, has been discussed, been talked about. And it's a very important issue. And an issue that, as majority leader, I can tell you we will address.

And it deserves to be addressed. We've addressed it in the past by saying reimportation is under certain prescriptions and limit limitations that reimportation is fine, but it's fine only if we can demonstrate and guarantee safety.

(END VIDEO CLIP)

JOHNS: One issue, of course, is who will bear the cost of safety programs. That, of course, is yet to be decided.

One thing I can tell you is I talked to a veteran vote counter around here, Senator Trent Lott of Mississippi, he says in his view, whenever a bill gets to the floor, it will pass. In fact, Senator Trent Lott told me that he has decided he will vote in favor of drug reimportation which, for him, is a switch of positions -- Judy.

WOODRUFF: All right. Joe Johns with the very latest on this hot, hotly debated issue up on Capitol Hill. Joe, thank you very much.

Politicians and office holders aren't the only people who qualify for the "Political Play of the Week." Coming up, a case where Bill Schneider's choice goes to some people that even a president, it seems, has been listening to.

Later, we've seen the ads, but which TV viewers will be seeing them again and gone and again?

Also...

(BEGIN VIDEO CLIP)

BUSH: So far all we hear from this side is a lot of old bitterness.

(END VIDEO CLIP)

WOODRUFF: We'll hear plenty from both sides. Stay with us for our "Friday Look Back at This Week on the Campaign Trail."

(COMMERCIAL BREAK)

WOODRUFF: The most obvious way that regular citizens can affect the government, of course, is by voting. But it isn't the only way. Sometimes all you have to do is get together, and speak up. Who knows, you might also get Bill Schneider's political play of the week.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: That's right. Because this week a new pressure group demonstrated its clout, and got the White House to change its position. Now that's a pretty impressive political play of the week.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Last week some family members of 9/11 victims expressed anger over the president's use of footage from the attacks in a campaign ad.

RITA LASAR, LOST BROTHER IN 9/11: We're saying, find some other way to run a campaign, without stepping on the bodies of our dead.

SCHNEIDER: The 9/11 families have gotten organized. They formed advocacy groups. On Monday, the Family Steering Committee issued a statement saying, this administration has not fully cooperated with the 9/11 commission. President Bush opposed the creation of the 9/11 commission and his administration has set up road blocks that have inhibited the commission's progress. One complaint, a time limit of one hour for the president's interview with the commission.

KRISTEN BREITWEISER, 9/11 WIDOW: I encourage them to speak to the commission for longer than an hour. Which is all he's willing to give of his time.

SCHNEIDER: The families' criticism was echoed on the campaign trail.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: If the president of the United States can find the time to go to a rodeo, he can find the time to do more than one hour in front of a commission that is investigating what happened to America's intelligence.

SCHNEIDER: On Tuesday, the White House modified its policy.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The president's willing to answer all the questions that they want to raise.

SCHNEIDER: What about that one-hour time limit?

MCCLELLAN: Nobody's watching the clock.

SCHNEIDER: When Republicans chose to hold their convention in New York City this summer, the idea of Ground Zero as a backdrop could not have been far from their minds. Now they have to worry about protests from the victims' families.

RITA LASAR, LOST BROTHER IN 9/11: President Bush promised in a speech he gave in 2002, that he would not use the site for political reasons. We believed him. We trusted him. He has broken his promise to us. To say that we're outraged is the truth.

SCHNEIDER: The families of 9/11 victims are becoming political players.

(END VIDEOTAPE)

SCHNEIDER: They've already won the political play of the week. Congress has granted the 9/11 commission an extension for the deadline of producing their final report. It is now due July 26. And that happens to be the first day of the Democratic National Convention -- Judy.

WOODRUFF: Very interesting coincidence. All right, Bill, thank you very much.

Well, President Bush and Senator Kerry are barely out of the starting blocks, but a lot of money is already being spent on getting their message out. We'll tell you just how much since Super Tuesday, and in the targeted states when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

WOODRUFF: Since Super Tuesday millions of dollars have already been spent on political ads and not all of it by the Bush and Kerry campaigns. Joining me now with details on who's doing the buying, how much and where, Evan Tracey of TNS Media Intelligence. His company tracks ad spending in the nation's top 100 markets. First of all, let's talk about the president's ad buy that we've now heard not just one, but two waves already. Where are they buying, what are they doing?

EVAN TRACEY, TNS MEDIA INTELLIGENCE: The president's buy started last week. It's off to a very robust start. He spent about $5.5 million in the first week. A lot of that in the 17 battleground states that we're going to talk so much about this year. But they're also buying a lot of national cable. And actually if you total up the buys in Florida, Michigan, Ohio and Pennsylvania, it's making up about half of their ad spending. So you can really see where they're really putting the heavy hit into.

WOODRUFF: And what about the second wave? How is that adding to then?

TRACEY: The second wave, I think you'll see it rotate in. The spending levels should stay about where they've been. And we'll watch the campaign go from there. It's March. It's early. We're going to see a lot of this spending.

WOODRUFF: Seems to me early, especially for the negative kinds of things. You and I were just talking about that. What about the Kerry campaign? They are gearing up and they're getting some help from their friends, so to speak although they're not coordinating, they say. What do you see there?

TRACEY: Kerry hasn't spent any money since Super Tuesday. We understand a new spot is supposed to go up today or tomorrow. It will be interesting to see just how long they leave that up and just how much they can afford to spend in the battleground states. Really the Kerry campaign has been getting in essence a bridge loan from these groups like Moveon.org and the Media Fund and the New Democratic Network. Moveon.org is targeting the same states as the Bush buy is without the national cable component, spending about $2.5 million. The Media Fund, the (UNINTELLIGIBLE) group has spent about $400,000 in the very first day of their buy which started this week. And the New Democratic Network is a group that's focused on Hispanic media they've got a little buy in New Mexico and Nevada, key states again in the upcoming fall election.

WOODRUFF: You have any sense of these ads? You able to look at them when they get them out there?

TRACEY: They're the talking points. They could be Kerry campaign, they could be Democratic National Committee ads. It's just the new world order with the campaign finance reform.

WOODRUFF: What about, Evan, on the president's side? Are there any Independent groups out there? Now they don't need these groups as much as the Kerry campaign does, but what do you see?

TRACEY: The Bush campaign might disagree as far as need. I don't think you can ever have too many friends.

WOODRUFF: I'm sure you're right.

TRACEY: But there's only been the one effort so far earlier this week, the Citizens United Group ran kind of the attempt at humor with the Kerry's barber, and where Kerry buys his shirts and his vacation home at. But again, that ad has only amounted to about $25,000 in total spending and we've only seen it in New Mexico and a couple spots in Tennessee. And of course that very important swing state of Washington, D.C.

WOODRUFF: Very quickly, Evan, you and I were talking about this just a minute ago before we went on the air, the fact that some of these ads are really negative this early, it is only March, it is eight months to the election, is there a downside in that?

TRACEY: You know again, it's for the voters to tell us, but we saw a little bit of this with Clinton in '96 during his quote unquote "stealth campaign." But again, that was run out of the DNC. It's different than we're seeing now. It's coming from the candidates and the campaigns. It's only March. In a lot of ways it's just March madness.

WOODRUFF: So we'll see how the voters react.

TRACEY: It's going to be just a long drive to these conventions.

WOODRUFF: And beyond.

TRACEY: And beyond.

WOODRUFF: Evan Tracey, TNS Media Intelligence. Thank you very much.

WOODRUFF: Thanks, Judy. Both President Bush and John Kerry did sharpen their attacks this week.

(BEGIN VIDEO CLIP)

KERRY: I always thought that there was a lot cheaper way to bring Iraq to its knees, it was just send the Bush economic team over there to run the country.

(END VIDEO CLIP)

WOODRUFF: Next, our Friday look back at the highlights of the political week that was.

(COMMERCIAL BREAK)

WOODRUFF: This week, both George W. Bush and John Kerry clinched enough delegates to secure their party's nominations. And this campaign moved into a mode of contrast, defend, and counterattack. Here now is our Friday look back at the political week that was.

(BEGIN VIDEOTAPE)

KERRY: I remember spring break. You could come down here, kick back, lay around, do nothing. The only place you could do that now is on the Bush economic team.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My opponent hasn't offered much in the way of strategies to win the war. Or policies to expand our economy. So far all we hear from that side is a lot of old bitterness and partisan anger.

KERRY: George Bush thinks exporting our jobs is good economic policy. I believe keeping good jobs here and exporting goods is good for our economy.

BUSH: Their agenda is to increase federal taxes. To build a wall around this country. They never get around to explaining how higher taxes would help create a single job in America. Except maybe at the IRS.

KERRY: If the president of the United States can find the time to go to a rodeo, he can find the time to do more than one hour in front of a commission that is investigating what happened to America's intelligence.

BUSH: The enemy declared war on us. And as I tell people, war is what they got with George W. Bush as the president.

KERRY: I always thought that there was a lot cheaper way to bring Iraq to its knees. It was just send the Bush economic team over there to run the country.

BUSH: Senator Kerry voted for the Patriot Act, for NAFTA, for the No Child Left Behind Act, and for the use of force in Iraq. Now he opposes the Patriot Act, NAFTA, the No Child Left Behind Act, and the liberation of Iraq. My opponent clearly has strong beliefs. They just don't last very long.

KERRY: I'm just beginning to fight here. These guys are -- these guys are the most crooked, you know, lying group of people I've ever seen.

Thank you very much. Thank you very much, everybody.

I know better than to make a complete ass of myself before the whole country.

(END VIDEOTAPE)

WOODRUFF: The week that was. That's it for INSIDE POLITICS. I'm Judy Woodruff. And remember, politics doesn't take the weekend off. Be sure to keep up with all the latest campaign news on INSIDE POLITICS Sunday. That's at 10:30 a.m. Eastern, 7:30 a.m. Pacific right here on CNN. Have a wonderful weekend. "CROSSFIRE" starts right now.

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





With DNC Chairman Terry McAuliffe>


Aired March 12, 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: Attacks.

(BEGIN VIDEO CLIP, AD)

NARRATOR: John Kerry's plan: to pay for new government spending, raise taxes by at least $900 billion.

(END VIDEO CLIP)

ANNOUNCER: And counterattacks over the airwaves.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Once again, George Bush is misleading America.

(END VIDEO CLIP)

ANNOUNCER: We'll check the accuracy of these ads.

He's the man who runs the Democratic Party. But is Terry McAuliffe on the same page as John Kerry?

A new fight in Congress over the price of your prescription drugs. Is it party politics or something more? We'll go live to Capitol Hill.

(END VIDEOTAPE)

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

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us.

Depending on whom you ask they are either negative ads or legitimate efforts to set the record straight. Either way, the television airwaves will soon be filled with competing claims by President Bush and Senator John Kerry. The Kerry team plans to air a new ad in 16 battleground states as a direct response to a new Bush ad set to air in 18 states that criticizes the Kerry record. It is the first major air battle of the 2004 race. But does the truth get lost amid all the back and forth?

We asked Howard Kurtz of CNN's "RELIABLE SOURCES" to check the facts. (BEGIN VIDEOTAPE)

HOWARD KURTZ, "RELIABLE SOURCES" (voice-over): In launching the first attack ad of his reelection campaign, President Bush is charging John Kerry with being a big tax-and-spend man and weak on terrorism and defense. But how do those claims measure up?

(BEGIN VIDEO CLIP, AD)

NARRATOR: John Kerry's plan, to pay for new government spending, raise taxes by at least $900 billion.

(END VIDEO CLIP)

KURTZ: That's misleading. Kerry has no $900 billion tax plan. The only taxes he says he'll raise are on the wealthiest 2 percent of Americans, which would raise about $250 billion over 10 years. What Kerry does have is a health insurance plan that would cost $900 billion over the next decade. The Bush ad assumes that Kerry would have to raise taxes to cover the rest, which the Democratic senator denies, though he hasn't fully explained how he'd finance his health proposal.

(BEGIN VIDEO CLIP, AD)

NARRATOR: On the war on terror, weaken the Patriot Act used to arrest terrorists and protect America.

(END VIDEO CLIP)

KURTZ: The ad tries to make it sound like John Kerry is soft on terrorism. Kerry voted for the Patriot Act, but charges that Attorney General John Ashcroft has abused it, and wants to replace the law with a new Patriot Act that he says would better protect individual privacy.

(BEGIN VIDEO CLIP, AD)

NARRATOR: And he wanted to delay defending America until the United Nations approved.

(END VIDEO CLIP)

KURTZ: Kerry has slammed the president for rushing to invade Iraq without exhausting all diplomatic efforts at the U.N., but never called for U.N. approval of the war.

The Kerry campaign wasted little time in throwing together a counterattack spot, although, with only a fraction of the Bush team's $100 million war chest, it's not clear the senator will be able to match the president's advertising buy in 18 battleground states. The ad's message, Kerry doesn't want to act like the last nominee from Massachusetts, Michael Dukakis, who didn't respond to many attacks by Bush's fair.

(BEGIN VIDEO CLIP, AD) NARRATOR: Once again, George Bush is misleading America. John Kerry has never called for a $900 billion tax increase. He wants to cut taxes for the middle class. Doesn't America deserve more from its president than misleading negative ads?

(END VIDEO CLIP)

KURTZ: Kerry's response ad, of course, is also negative. And it's true that the senator has suggested a further cut for middle- income taxpayers.

But some budget experts say Kerry's overall figures don't add up, that he can't cut taxes further, pay for health care and other social programs and hold the line on the deficit, as he's promised to do. A "Washington Post" analysis says Kerry would boost spending by $165 billion.

(END VIDEOTAPE)

KURTZ: The Bush campaign knows that most voters don't read the fine print and that charging Kerry with a $900 billion tax plan, even if no such plan exists, will raise doubts about him as a liberal big spender.

The Kerry campaign knows that it can't let such charges stick and that its ad will raise doubts about the president's credibility. What's clear is that the ad wars have already turned combative and it's only the middle of March -- Judy.

WOODRUFF: Indeed, it is.

Howard, a couple of questions. No. 1, some are saying, well, it's not really a negative ad. It's not really an attack ad. We've heard the Bush camp saying these are just contrast ads. What's the difference?

KURTZ: Campaigns hate the N-word, negative ads, and they love that contrast term. It's so much more delicate. But the fact is, these are both very negative ads.

Kerry is in effect calling the president a liar. The president is raising very serious questions about Kerry's record on the economy and terrorism. They're fair game. They're issue-oriented. They're not about personal conduct or personal scandal or alleged scandal. But they are negative.

WOODRUFF: Howard, is there any evidence of how effective ads like this are? You've had so much news conference of this campaign up until now. Now the public, in these 16 or 18 states, is seeing clearly paid ads. Are these going to be as effective as watching the news, more effective? What do we think?

KURTZ: Voters in every survey say they don't like negative ads. But negative advertising works, in part, ironically, because they're more likely to believe somebody saying something bad about the other candidate than saying something positive about themselves. The danger here is what happened to Dick Gephardt and Howard Dean in Iowa, where they went heavily negative on each other, turned voters off and they both, as you'll recall, ended up losing in the Iowa caucuses. In other words, if this exchange continues at this kind of rate -- this is like October advertising, not March -- we could see both candidates driving each other's negatives up. And that could end up being a very -- not a very pretty picture.

WOODRUFF: It could bode well for Ralph Nader. Maybe he'll benefit from all of this.

(LAUGHTER)

KURTZ: Good point.

WOODRUFF: OK, Howard Kurtz, thank you very much.

KURTZ: Thank you.

WOODRUFF: Appreciate it. CNN's "RELIABLE SOURCES."

Well, President Bush's new ad is the first TV spot to go negative since John Kerry clinched his party's nomination. But Senator Kerry has already aired TV ads critical of the president. He ran several negative ads early in the primary season, including this one that aired last fall in Iowa.

(BEGIN VIDEO CLIP, AD)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Under George Bush, we have a government that works for those at the top, not you. He's given the biggest tax cuts in history to the wealthy. George Bush and Dick Cheney let polluters and oil companies rewrite our environmental laws. They defend the loopholes that let corporations avoid taxes by moving jobs overseas. I'm John Kerry. And I approve...

(END VIDEO CLIP)

WOODRUFF: Another Kerry campaign ad which aired last September described the Bush administration's record on jobs as -- quote -- "an astonishing failure."

Well, we have more reaction to that new Bush campaign ad. That leads the headlines in our Friday "Campaign News Daily." James Zogby of the Arab American Institute is unhappy with imagery used in the ad while the ad's voice-over announcer refers to the war on terror. Zogby says references to terrorism over the image of what he calls an Arab-looking young male can only create -- quote -- "fear and suspicion." The Bush campaign denies that the ad is insensitive.

Democrat Al Sharpton has received approval for $100,000 in federal matching funds for his campaign. But there's a catch. The Federal Election Commission wants to know if Sharpton loaned more than $50,000 of his own money to his campaign, which would make him ineligible to receive matching funds. The Sharpton campaign says it doesn't expect any problems, but he is prepared to challenge the FEC in court if needed.

Former Democratic hopeful Wesley Clark is liquidating his campaign supplies. Everything from buttons and computers to yard signs and even chocolate Clark Bars went on the auction block this morning in Little Rock.

Well, you may soon be spotting another well-known politician in a TV ad. Former President Bill Clinton is doing some public service announcements. We'll tell you about the cause in a minute.

Later, he has talked with nominee-to-be John Kerry. I'll ask DNC Chairman Terry McAuliffe about the upcoming campaign and about his own job.

And we'll also have more on the strategy behind the moves and countermoves in the campaign ad wars.

(COMMERCIAL BREAK)

WOODRUFF: John Kerry paid a high-profile visit to the offices of the Democratic National Committee this week for a talk with party Chairman Terry McAuliffe. The DNC chairman joins me now from New York.

Terry McAuliffe, good to see you again.

TERRY MCAULIFFE, DNC CHAIRMAN: Judy, great to be with you again.

WOODRUFF: We have Bush campaign ads out arguing that John Kerry's plan, health care plan and his plan to cut the deficit is going to have to mean $900 billion worth of new taxes. Are you worried that this campaign is going to be painting John Kerry right off the bat as another tax-and-spend liberal?

MCAULIFFE: Well, first of all, the ads are wrong. They're misleading. John Kerry has called for tax cuts. He wants to make sure that the middle class, lower-income, small business gets tax cuts.

So, you know, it's just plain wrong. But what I have been saying, Judy, on your show for the last three years is that these Republicans and George Bush are going to continually mislead the American public. They can't talk about positive news about the economy. He's lost three million jobs. Health care has gone up, as you know, 14 percent. He's underfunded schools. So, you know, he's going to try and resort to these tactics to distort our candidate.

WOODRUFF: But this is the way -- but this is the way the Bush campaign is trying to introduce John Kerry to the American people.

MCAULIFFE: Well, that's right. And they're just plain wrong. I think the president of the United States...

WOODRUFF: But how do you know it won't stick, is my question?

MCAULIFFE: Well, they won't because we aggressively are also going to go up with television advertising. The Kerry campaign has just gone up. The Democratic National Committee, as you know, we are prepared to go up immediately.

We're going to get out with our positive a message. Let George Bush and the Bush-Cheney campaign, you know, talk about their distortions. We're going to talk about what we're going to do to move this country forward on the economy, on health care and on education. John Kerry has served this country admirably and we're going to have a campaign that's going to excite a lot of people.

WOODRUFF: Well, it is true that John Kerry's responding. But is he going to be able to keep up? The Bush-Cheney people raising something like $140 million, $150 million. Is John Kerry going to have the ability, the resources, to get his message out there?

MCAULIFFE: Well, and that's something that, you know, I've worried about for several years. As you know the national party, we've got $17 million in the bank, which is $17 million more than we've ever had. We're debt-free. John Kerry can continue to raise money.

I promised John Kerry -- he and I were meeting together for an hour this week over at the national headquarters. The DNC, I'm committed to putting another $100 million together for the campaign. So we're going to have the resources we need. We're never going to have as much money, Judy, as they have. They've got the best money they can buy from the insurance industry, from the energy industry. We're going to be able to compete. We're going to have enough money to get our message out.

I remind you that they outspent Al Gore by $178 million and he did get 500,000 more votes than George Bush did.

WOODRUFF: Well, but they also made it to the White House.

What about the front-loading system, Terry? This was clearly something you wanted. You've done, Don Fowler, one of your predecessors as head of the DNC, said the other day: "Whether or not John Kerry can be an effective candidate operating on limited funds for four or five months until the convention will determine whether this" -- in other words, this front-loading thing -- "was a good idea."

MCAULIFFE: Well, first of all, I remind you that Al Gore and George Bush were the nominees on March 7, about the exact same time that John Kerry became the nominee of our party.

But instead of three days of voting, which you had under the old presidential calendar, three days of voting, 19 states, you now had 38 states voting, over 10 different states. John Kerry proved that he could win in the South, he could win in the West, the East, the North.

WOODRUFF: Right.

MCAULIFFE: It was a much better calendar. We have a nominee. I've said for years that George Bush is going to go up early with an aggressive media buy.

WOODRUFF: All right.

MCAULIFFE: He did that on March 4. We're going to have the money that we need. We are in the best shape -- as John Kerry said to the DNC staff, best shape this party's ever been in.

WOODRUFF: Well, let me talk to you about you, Terry McAuliffe. It was reported that John Kerry, that his campaign was furious with you after you described the president as AWOL in his Air National Guard service. One Kerry aide was quoted as saying at the time, it was just not the message we wanted out there.

They are now putting their own man in at the DNC. Is this going to be somebody who outranks you?

MCAULIFFE: There's no one going into the national party that's going to outrank the chairman of the party. Clearly, the campaign is going to send people over to the DNC. We have been preparing for this. I've been doing this for 24 years. It is always the same with the DNC when you have a candidate.

John Kerry got up in front of the staff and he was spectacular. He said, this is the best DNC we've ever had. He said, Terry McAuliffe deserved tremendous credit. I'll let John Kerry talk about me. I don't need to do that today. But we're going to have people move over. We are one unit today. The Kerry campaign and the DNC, we are together. I spoke to Senator Kerry today. I spoke to him yesterday. I met with him the day before. He and I have had a long 20-year friendship. We're very close personal friends.

We are now and we always will be. So I'm very excited about where we are. We're in the best shape. We have a nominee. We are unified. We have money in the bank.

WOODRUFF: All right.

MCAULIFFE: The issues are on our side. And we're ahead in the polls. It is all positive. You're always going to have campaign people talking about this and that. Listen, this is politics.

WOODRUFF: All right.

MCAULIFFE: We're excited. We're ready to go.

WOODRUFF: We hear you.

MCAULIFFE: Thanks, Judy.

WOODRUFF: Terry McAuliffe, who will remain as chairman of the Democratic National Committee.

MCAULIFFE: You bet.

WOODRUFF: Thank you very much.

MCAULIFFE: Thank you.

WOODRUFF: It's good to see you.

MCAULIFFE: You bet. Thanks.

WOODRUFF: Thank you for talking with us.

Taking off the gloves eight months before the election. Coming up, two veteran reporters join me to talk about the ad war and the general tone of this campaign shaping up between President Bush and Senator Kerry.

(COMMERCIAL BREAK)

WOODRUFF: Joining me now to talk about the already hot tone of this presidential campaign, "TIME" magazine's Karen Tumulty and Dan Balz of "The Washington Post."

Dan, to you firs.

Why has this campaign taken on such a negative, hostile tone, if you will, so early?

DAN BALZ, "THE WASHINGTON POST": Well, I think because the stakes are so large and because I think Senator Kerry came out of the Democratic primaries in relatively good shape. Most nominees of the party come out after a tough fight. Certainly, George Bush came out of a tough fight in 2000 and had to do some repair work.

But there was very little criticism of Senator Kerry. And so I think the Bush campaign feels that they have to move very quickly to try to define Senator Kerry and not let him get up a head of steam.

WOODRUFF: Karen Tumulty, do you think the Bush campaign didn't expect that Kerry -- that the nominee would come out of this process as supposedly strong a shape as Senator Kerry is in?

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, "TIME": Well, certainly, until fairly recently, they were thinking that the nominee was going to be Howard Dean and that in fact it was going to be quite brutal.

So this is something of a surprise for them. Around Washington, you're hearing a lot of talk among Republicans at the sort of slow response time that we've seen out of the Bush operation, because they just really haven't been as nimble as a lot of their, you know, allies were hoping.

WOODRUFF: And, Dan, is that something that they're now trying to turn around? They've now rolled out their second set of ads in the span of one week?

BALZ: Yes. I think, in a funny way, the surprise is how quickly they went negative in their advertising after starting out positive. I think some people assumed that they would start on a positive note, try to build up Bush's image, after having had two tough months, and that they would eventually turn negative.

But Karen's right. There are a lot of Republicans -- and, clearly, the Bush campaign agrees with them -- who said they have to move very quickly on the negative front. And they did it faster than I think a lot of people thought they might.

WOODRUFF: Karen, is there a risk, though, in going negative so early?

TUMULTY: There is. And one of the risks is that this is the first election season we've seen where the candidate himself has to appear, his face, his voice, on the ad, and say, I, George Bush, or, I, John Kerry, approved this ad.

So you can't get that kind of antiseptic distance that candidates really like to have from negative advertising. And we saw in the Democratic primary that when Howard Dean and Dick Gephardt went after each other with negative ads, it actually hurt both of them. Now, here, you're left with only two candidates. There is no alternative beyond Ralph Nader maybe than one of those two. But it could just turn off the electorate entirely.

WOODRUFF: Dan, how do you see that? Is the campaign, the Bush campaign, at this stage, are they concerned about that?

BALZ: I don't think they're overly concerned about that. My guess is that they think that the advertising they're doing -- all of these campaigns test these ads before focus groups and try to get some sense of it. My guess is that they believe that the ads they're putting on the air will work and work effectively and not have a serious effect on Bush and his image.

Most voters are pretty savvy at this point about evaluating the difference between a really harsh personal negative attack and an ad that compares someone's record with the person who put the ad on. And, you know, my guess is that their assumption is that this falls within those pounds, that people will be receptive to a discussion of the record and the issues and that they don't think they can get hurt.

They obviously are taking a risk. They've done it very quickly. And so there is -- it's not as though it's cost-free. But my guess is that the public is ready for a sharp debate.

WOODRUFF: Karen, how will we know whether these ads have been successful? Do we just wait for the next set of polls to come out? Is that really what it comes down to?

TUMULTY: That is sort of what it comes down to.

The one thing that's interesting that we're seeing in this election is that the polls indicate that voters are paying attention much, much earlier than they have been in past elections. So, it could be that the Bush campaign saw that there was a, you know, window of opportunity here to define John Kerry, to use the term of art, and they felt like they really had to seize it, because pretty soon the voters could be tuning out and going off on their summer vacations and not tuning back in until Labor Day.

WOODRUFF: Dan, how do you think we'll know whether these ads are doing the damage that each side hope they're doing?

BALZ: Judy, I think to some extent we try to calibrate this too finely, that we watch a set of ads for a week or so and assume that we're going to see movement.

I think that these ads on both sides are going to be designed to have a longer-term effect. And I think what's going to be important is what are the perceptions of these two candidates in a few months, after we have seen a back-and-forth between the two of them, both campaigning and through the advertising. I think that both sides want to lay down certain impressions and fix certain impressions of their opponents. You can't do that in a week or two of advertising. There's too many distractions. People come and go in terms of paying attention.

So I think it will take a little time before we know.

WOODRUFF: Very quickly, Karen, is this going to keep up from now until November?

TUMULTY: Well, it's very rare that you see a campaign start off nasty and then get nice.

(LAUGHTER)

WOODRUFF: OK. That means yes. Maybe we will see this last until November.

All right, Karen Tumulty, Dan Balz, great to see both of you. Thanks very much.

TUMULTY: Thanks, Judy.

WOODRUFF: Well, former President Bill Clinton, you remember him. He's doing his part to get minority young people to register to vote. He has taped two public service announcements that will be aired off the Black Entertainment Network.

Here's one of them.

(BEGIN VIDEO CLIP, AD)

WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: But you also have the right to speak, be heard and shape your own fate. It's simple. Log on to BET.com and register to vote. It's your right.

(END VIDEO CLIP)

WOODRUFF: Black Entertainment network -- television network -- has donated $1 million in free advertising time for these ads, which are to air between April and November.

Well, health care reform is usually the prescription for discord on Capitol Hill, but it can also lead to some surprises.

(BEGIN VIDEO CLIP)

SEN. TRENT LOTT (R), MISSISSIPPI: My attitude is, if you want to go across the border, if you want to order and buy some other form of drug and take the chance of it being not what you're told it is and cause health problems, my attitude is, go to it.

(END VIDEO CLIP)

WOODRUFF: Coming up, the fight to go across the borders for less expensive medicine.

Also ahead, an apparent presidential change of mind, thanks to the "Political Play of the Week."

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: He's clinched the nomination, but the Democratic Convention is not until July. So what does John Kerry do over the next four months?

We knew that the battle for the White House would get rough, but, please, it's only march.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My opponent clearly has strong beliefs. They just don't last very long.

KERRY: These guys are the most crooked, you know, lying group of people I've ever seen.

ANNOUNCER: We'll look back at the week that was.

(END VIDEOTAPE)

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

WOODRUFF: Welcome back.

With much of the political world focused on the competing campaign ads soon to be aired by President Bush and John Kerry, the candidates themselves are keeping relatively low profiles this Friday. The president had only one public event today and John Kerry is working from his home in Boston. But behind the scenes, away from the cameras, the strategy sessions continue.

CNN's Bob Franken has more on Kerry's plans to make the most of the long road from now till November.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): A key part of the Kerry strategy, according to advisers, hit back. Respond immediately when the Bush forces attack. In fact, use preemptive strikes.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: These guys are the most crooked, you know, lying group of people I've ever seen.

FRANKEN: Plenty of political strategists believe this week's events were largely calculated. John Kerry's scathing remarks just happened to be overheard on a live mic, and just happened to come out before the Bush campaign put out new negative ads.

AD ANNOUNCER: John Kerry, wrong on taxes, wrong on defense.

FRANKEN: A danger for Kerry is that the get Bush Democratic passion of a lively primary campaign will dissipate as the post- primary, pre-general election season drags on and on for months.

The solution, Kerry advisers say, is straightforward. Raise enough money to counter the huge resources Republicans will use to mount a crushing assault. Make sure the candidate always looks like a fight.

TAD DEVINE, SENIOR KERRY ADVISER: I think his message and the message of our campaign to the Bush campaign is simply this: we're not going to take it. You can send all these people out, attack John Kerry, his patriotism, his service to this country. We're simply not going to take it. We're going to push back.

FRANKEN: The Kerry campaign has just launched a section of its Web site called "debunker." And there will be an air war.

AD ANNOUNCER: Once again George Bush is misleading America.

FRANKEN: It could be an eye for an eye campaign, or more accurately an ad for an ad.

(END VIDEOTAPE)

FRANKEN: The Kerry campaign will be trying to have it both ways, attacking the Bush administration and attacking the Bush campaign for attacking him -- Judy.

WOODRUFF: OK. Bob Franken. And again it's only March. Thanks very much. We appreciate it.

Well, as for President Bush, he's moving ahead with his plan to highlight his leadership in the war on terror. Next week he plans political events in Pennsylvania and Florida, and a speech on the one- year anniversary of the start of the war in Iraq. All the while, his new TV ad criticizing John Kerry will be airing on cable networks and in local markets across 18 battleground states.

Earlier today I spoke with the Bush/Cheney campaign manager Ken Mehlman. I started by asking him if his campaign is running a risk by airing a negative ad so early in the campaign season.

(BEGIN VIDEOTAPE) KEN MEHLMAN, BUSH/CHENEY CAMPAIGN MANAGER: Well, I think that our country's had several months of what we called a diatribe: an unprecedented number of attacks by Senator Kerry and by his colleagues. And now we're talking about the issues.

And the fact is Senator Kerry has said in his first 100 days in office he would raise taxes $900 billion. That will be very problematic. If you worry about jobs and if you worry about making our economy better. That would destroy jobs. That would hurt the economy.

He's also said repeatedly he's criticized the PATRIOT Act. He says he would weaken the PATRIOT Act. We disagree. And we disagree with his approach on defense.

These are very important issues we think the American people want to hear addressed.

WOODRUFF: Let me ask you about the tax part because he has not said in so many words I want to raise taxes $900 billion. Here's what his campaign says. They say their health plan, which is going to be paid for by rolling back the Bush tax cuts on the wealthy, has been estimated to cost $900 billion over ten years.

But they say a third of that is going to be paid for with, yes, a tax cut on the wealthy. A third is going to be relief, they say, for those most in need and a third is cost savings.

MEHLMAN: I think the American people have heard such promises from politicians before. They may not have heard such promises from a politician who, as Senator Kerry has, has supported 350 tax increases over the course of his career.

The fact is, his plan would cost $900 billion which they agree with. The fact is allegedly raising taxes on the rich only gets you $250 billion. There is another $650 billion, that he has some secret tax increase plan.

I don't know where he's going to find it, but again, given the fact that he is already, as a senator, voted 350 times for higher taxes I'll bet he's got some good places to look for it.

WOODRUFF: Looking at this campaign overall, Ken Mehlman, are you satisfied with the way your campaign has gotten off the ground? I ask because your first ads using the images of 9/11 were criticized. The president had to go and explain it. You've already had the president name a manufacturing czar. That person had to be pulled back after John Kerry pointed out he had sent jobs to China. Do you feel good about the way your campaign has gotten off?

MEHLMAN: I do. I feel good about it. I feel good about the dialogue the American people are going to have. I feel good about the choice the American people are going to have. I feel good about our ability to discuss this choice and the critical issues our country faces. WOODRUFF: Having said that, "The Los Angeles Times" today is reporting that a number of Republicans, including the White House political director under the first President Bush, are saying they are anxious, they're saying there's a lot of fretting going on, that this nervousness is exacerbated by the fact that so few jobs are being created and so on.

MEHLMAN: I think the country is closely divided. We've always anticipated a close election. This president has incredible transformational leadership. And our opponents know that and they've run a very negative campaign. We've had a diatribe. Now we're going to have a dialogue.

WOODRUFF: Let me also quote you something today from "The Wall Street Journal." This is a quote from Bill Kristol whom you know very well, the editor of "The Weekly Standard."

Among other things he says -- I'm going to quote what he said. He said -- he likens the Republicans' decision to hold the 2004 convention in New York City to the president's landing on the deck of an aircraft carrier. He says, "They are too clever by half with most of these moves."

MEHLMAN: I think that New York City was chosen for the convention by the Republican National Committee because of the fact that it's a fabulous city. It's going to be a great convention. We look forward to it. And we look forward to hosting Mr. Kristol and his colleagues. It's going to be a great time. We look forward to their being up there with us.

(END VIDEOTAPE)

WOODRUFF: Ken Mehlman attributed some of the grumbling Republicans. He said those are people not at the center of our decision making and that's why they're talking to the press.

In the wee hours of this morning the Senate approved President Bush's nomination of Mark McClellan to head Medicare. It had been held up because some senators were upset over McClellan's suspected opposition to the importation of prescription drugs. Joining us now from Capitol Hill our congressional correspondent Joe Johns -- Joe.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Judy, this is one of those issues that is just not going to go away any time soon. The issue of drug reimportation remains very much alive here on Capitol Hill, as well as on the campaign trail. Senator Byron Dorgan was out on the Senate floor again today making the case for it.

SEN. BYRON DORGAN (D), NORTH DAKOTA: We've had an abiding, lengthy debate here in the Congress about the prospect of importing prescription drugs from Canada, for example. The same prescription drugs, same pill, put in the same bottle, made by the same company. The only difference is they are sold for a substantial discount in Canada versus the U.S. consumer price in this country.

(END VIDEO CLIP) JOHNS: And it is not just the Democrats. Senator Bill Frist, the majority leader, also has indicated that he is prepared to pursue it in some form. However he also says that as far as he's concerned there have to be controls for safe, with the emphasis on safe reimportation of drugs.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R-TN), MAJORITY LEADER: The whole issue of prescription drug reimportation has arisen, has been discussed, been talked about. And it's a very important issue. And an issue that, as majority leader, I can tell you we will address.

And it deserves to be addressed. We've addressed it in the past by saying reimportation is under certain prescriptions and limit limitations that reimportation is fine, but it's fine only if we can demonstrate and guarantee safety.

(END VIDEO CLIP)

JOHNS: One issue, of course, is who will bear the cost of safety programs. That, of course, is yet to be decided.

One thing I can tell you is I talked to a veteran vote counter around here, Senator Trent Lott of Mississippi, he says in his view, whenever a bill gets to the floor, it will pass. In fact, Senator Trent Lott told me that he has decided he will vote in favor of drug reimportation which, for him, is a switch of positions -- Judy.

WOODRUFF: All right. Joe Johns with the very latest on this hot, hotly debated issue up on Capitol Hill. Joe, thank you very much.

Politicians and office holders aren't the only people who qualify for the "Political Play of the Week." Coming up, a case where Bill Schneider's choice goes to some people that even a president, it seems, has been listening to.

Later, we've seen the ads, but which TV viewers will be seeing them again and gone and again?

Also...

(BEGIN VIDEO CLIP)

BUSH: So far all we hear from this side is a lot of old bitterness.

(END VIDEO CLIP)

WOODRUFF: We'll hear plenty from both sides. Stay with us for our "Friday Look Back at This Week on the Campaign Trail."

(COMMERCIAL BREAK)

WOODRUFF: The most obvious way that regular citizens can affect the government, of course, is by voting. But it isn't the only way. Sometimes all you have to do is get together, and speak up. Who knows, you might also get Bill Schneider's political play of the week.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: That's right. Because this week a new pressure group demonstrated its clout, and got the White House to change its position. Now that's a pretty impressive political play of the week.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Last week some family members of 9/11 victims expressed anger over the president's use of footage from the attacks in a campaign ad.

RITA LASAR, LOST BROTHER IN 9/11: We're saying, find some other way to run a campaign, without stepping on the bodies of our dead.

SCHNEIDER: The 9/11 families have gotten organized. They formed advocacy groups. On Monday, the Family Steering Committee issued a statement saying, this administration has not fully cooperated with the 9/11 commission. President Bush opposed the creation of the 9/11 commission and his administration has set up road blocks that have inhibited the commission's progress. One complaint, a time limit of one hour for the president's interview with the commission.

KRISTEN BREITWEISER, 9/11 WIDOW: I encourage them to speak to the commission for longer than an hour. Which is all he's willing to give of his time.

SCHNEIDER: The families' criticism was echoed on the campaign trail.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: If the president of the United States can find the time to go to a rodeo, he can find the time to do more than one hour in front of a commission that is investigating what happened to America's intelligence.

SCHNEIDER: On Tuesday, the White House modified its policy.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The president's willing to answer all the questions that they want to raise.

SCHNEIDER: What about that one-hour time limit?

MCCLELLAN: Nobody's watching the clock.

SCHNEIDER: When Republicans chose to hold their convention in New York City this summer, the idea of Ground Zero as a backdrop could not have been far from their minds. Now they have to worry about protests from the victims' families.

RITA LASAR, LOST BROTHER IN 9/11: President Bush promised in a speech he gave in 2002, that he would not use the site for political reasons. We believed him. We trusted him. He has broken his promise to us. To say that we're outraged is the truth.

SCHNEIDER: The families of 9/11 victims are becoming political players.

(END VIDEOTAPE)

SCHNEIDER: They've already won the political play of the week. Congress has granted the 9/11 commission an extension for the deadline of producing their final report. It is now due July 26. And that happens to be the first day of the Democratic National Convention -- Judy.

WOODRUFF: Very interesting coincidence. All right, Bill, thank you very much.

Well, President Bush and Senator Kerry are barely out of the starting blocks, but a lot of money is already being spent on getting their message out. We'll tell you just how much since Super Tuesday, and in the targeted states when INSIDE POLITICS continues.

(COMMERCIAL BREAK)

WOODRUFF: Since Super Tuesday millions of dollars have already been spent on political ads and not all of it by the Bush and Kerry campaigns. Joining me now with details on who's doing the buying, how much and where, Evan Tracey of TNS Media Intelligence. His company tracks ad spending in the nation's top 100 markets. First of all, let's talk about the president's ad buy that we've now heard not just one, but two waves already. Where are they buying, what are they doing?

EVAN TRACEY, TNS MEDIA INTELLIGENCE: The president's buy started last week. It's off to a very robust start. He spent about $5.5 million in the first week. A lot of that in the 17 battleground states that we're going to talk so much about this year. But they're also buying a lot of national cable. And actually if you total up the buys in Florida, Michigan, Ohio and Pennsylvania, it's making up about half of their ad spending. So you can really see where they're really putting the heavy hit into.

WOODRUFF: And what about the second wave? How is that adding to then?

TRACEY: The second wave, I think you'll see it rotate in. The spending levels should stay about where they've been. And we'll watch the campaign go from there. It's March. It's early. We're going to see a lot of this spending.

WOODRUFF: Seems to me early, especially for the negative kinds of things. You and I were just talking about that. What about the Kerry campaign? They are gearing up and they're getting some help from their friends, so to speak although they're not coordinating, they say. What do you see there?

TRACEY: Kerry hasn't spent any money since Super Tuesday. We understand a new spot is supposed to go up today or tomorrow. It will be interesting to see just how long they leave that up and just how much they can afford to spend in the battleground states. Really the Kerry campaign has been getting in essence a bridge loan from these groups like Moveon.org and the Media Fund and the New Democratic Network. Moveon.org is targeting the same states as the Bush buy is without the national cable component, spending about $2.5 million. The Media Fund, the (UNINTELLIGIBLE) group has spent about $400,000 in the very first day of their buy which started this week. And the New Democratic Network is a group that's focused on Hispanic media they've got a little buy in New Mexico and Nevada, key states again in the upcoming fall election.

WOODRUFF: You have any sense of these ads? You able to look at them when they get them out there?

TRACEY: They're the talking points. They could be Kerry campaign, they could be Democratic National Committee ads. It's just the new world order with the campaign finance reform.

WOODRUFF: What about, Evan, on the president's side? Are there any Independent groups out there? Now they don't need these groups as much as the Kerry campaign does, but what do you see?

TRACEY: The Bush campaign might disagree as far as need. I don't think you can ever have too many friends.

WOODRUFF: I'm sure you're right.

TRACEY: But there's only been the one effort so far earlier this week, the Citizens United Group ran kind of the attempt at humor with the Kerry's barber, and where Kerry buys his shirts and his vacation home at. But again, that ad has only amounted to about $25,000 in total spending and we've only seen it in New Mexico and a couple spots in Tennessee. And of course that very important swing state of Washington, D.C.

WOODRUFF: Very quickly, Evan, you and I were talking about this just a minute ago before we went on the air, the fact that some of these ads are really negative this early, it is only March, it is eight months to the election, is there a downside in that?

TRACEY: You know again, it's for the voters to tell us, but we saw a little bit of this with Clinton in '96 during his quote unquote "stealth campaign." But again, that was run out of the DNC. It's different than we're seeing now. It's coming from the candidates and the campaigns. It's only March. In a lot of ways it's just March madness.

WOODRUFF: So we'll see how the voters react.

TRACEY: It's going to be just a long drive to these conventions.

WOODRUFF: And beyond.

TRACEY: And beyond.

WOODRUFF: Evan Tracey, TNS Media Intelligence. Thank you very much.

WOODRUFF: Thanks, Judy. Both President Bush and John Kerry did sharpen their attacks this week.

(BEGIN VIDEO CLIP)

KERRY: I always thought that there was a lot cheaper way to bring Iraq to its knees, it was just send the Bush economic team over there to run the country.

(END VIDEO CLIP)

WOODRUFF: Next, our Friday look back at the highlights of the political week that was.

(COMMERCIAL BREAK)

WOODRUFF: This week, both George W. Bush and John Kerry clinched enough delegates to secure their party's nominations. And this campaign moved into a mode of contrast, defend, and counterattack. Here now is our Friday look back at the political week that was.

(BEGIN VIDEOTAPE)

KERRY: I remember spring break. You could come down here, kick back, lay around, do nothing. The only place you could do that now is on the Bush economic team.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My opponent hasn't offered much in the way of strategies to win the war. Or policies to expand our economy. So far all we hear from that side is a lot of old bitterness and partisan anger.

KERRY: George Bush thinks exporting our jobs is good economic policy. I believe keeping good jobs here and exporting goods is good for our economy.

BUSH: Their agenda is to increase federal taxes. To build a wall around this country. They never get around to explaining how higher taxes would help create a single job in America. Except maybe at the IRS.

KERRY: If the president of the United States can find the time to go to a rodeo, he can find the time to do more than one hour in front of a commission that is investigating what happened to America's intelligence.

BUSH: The enemy declared war on us. And as I tell people, war is what they got with George W. Bush as the president.

KERRY: I always thought that there was a lot cheaper way to bring Iraq to its knees. It was just send the Bush economic team over there to run the country.

BUSH: Senator Kerry voted for the Patriot Act, for NAFTA, for the No Child Left Behind Act, and for the use of force in Iraq. Now he opposes the Patriot Act, NAFTA, the No Child Left Behind Act, and the liberation of Iraq. My opponent clearly has strong beliefs. They just don't last very long.

KERRY: I'm just beginning to fight here. These guys are -- these guys are the most crooked, you know, lying group of people I've ever seen.

Thank you very much. Thank you very much, everybody.

I know better than to make a complete ass of myself before the whole country.

(END VIDEOTAPE)

WOODRUFF: The week that was. That's it for INSIDE POLITICS. I'm Judy Woodruff. And remember, politics doesn't take the weekend off. Be sure to keep up with all the latest campaign news on INSIDE POLITICS Sunday. That's at 10:30 a.m. Eastern, 7:30 a.m. Pacific right here on CNN. Have a wonderful weekend. "CROSSFIRE" starts right now.

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With DNC Chairman Terry McAuliffe>