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Inside Politics

Kerry, Bush Attack Each Other With Negative Ads; Reading VP Tea Leaves

Aired March 14, 2004 - 10:00   ET

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

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


HEIDI COLLINS, CNN ANCHOR: As we said, "INSIDE POLITICS" beginning in just a minute or so. But first, the headlines.
A nation in mourning goes to the polls. Spain is holding its general elections three days after its worst ever terrorist attack. Prime Minister Jose Maria Aznar was among those casting ballots. Protesters accuse his government of initially blaming the Basque separatist group ETA for Thursday's attacks for political gain. The investigation is now focusing, though, on al Qaeda. Five people have been detained in connection with the bombings.

In Iraq, American troops face more deadly attacks. Roadside bombings have killed six U.S. soldiers this weekend. In the latest incident, a roadside bomb exploded this morning in Baghdad, killing a first infantry division soldier.

Here in the United States, the Pittsburgh Fire Department is mourning the deaths of two of its firefighters. They died yesterday while battling a blaze at an historic church as its bell tower collapsed. More than two dozen other firefighters were injured.

"INSIDE POLITICS SUNDAY" begins right now.

JEANNE MESERVE, HOST: "INSIDE POLITICS": Today, let the games begin. Both presidential camps go on the attack with negative ads, and it's only March. We'll take you behind the scenes with two campaign strategists.

Reading the vice presidential tea leaves, who will John Kerry pick as his number two? We will share our predictions.

And searching for an American candidate right here in Washington. We'll tell you about the New reality TV show that wants you in the White House.

ANNOUNCER: Live from Washington, this is "INSIDE POLITICS SUNDAY."

MESERVE: As we talk politics this morning, we're also getting set to mark an important anniversary. One year ago this week, the U.S.-led coalition launched its war on Iraq.

Hello. I'm Jeanne Meserve in Washington. Politics doesn't take weekends off, and neither do we. We begin on the presidential campaign trail. It has been a week of heeded exchanges between President Bush and the Democrat who wants his job, Senator John Kerry. Mr. Bush launched an ad campaign bashing Kerry, and Kerry fired back. Plus, he's challenging the president to a series of debates.

Our national correspondent Bob Franken is keeping an eye on the Kerry campaign for us.

Bob, what's the latest?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT : Well, the latest is that the Senator is in Ohio and Pennsylvania today. And why is he in those two states? Well, they are going to be there a lot. It is the -- Ohio and Pennsylvania are two of the major battleground states.

He was in Quincy, Illinois, last night. And why? Well, that was the scene of one of the Lincoln-Douglas debates. Kerry says that is a really good idea. In fact, he and the president should do that once every month.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I am asking George Bush to agree to a series of monthly debates starting this spring to talk about the real issues in our country.

(END VIDEO CLIP)

FRANKEN: Real issues? The Bush campaign says, no, no, no. We're not going to do that. Why? Because first Kerry has to decide what he is all about, particularly after that soft-spoken rant this week.

(BEGIN VIDEO CLIP)

KERRY: We're going to keep pounding, let me tell you. We're just beginning to fight here. These guys are the most crooked, you know, lying group that I have ever seen.

(END VIDEO CLIP)

FRANKEN: So, let's really crystallize the campaign. The Bush campaign has ads out making a variety of accusations against John Kerry. Kerry says they are not true.

That's it. That's the campaign, Jeanne.

MESERVE: OK. Well, that certainly gets it down to its simplest elements. Bob, thanks a lot. Go enjoy the day.

The Bush administration side of the story on the debate challenge now. We turn to CNN's Kathleen Koch at the White House -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Well, Jeanne, there obviously is no love lost between these two opponents. There is, of course, the dueling negative ad campaigns that Bob just mentioned. They started running last week. And then -- so then there was this offhand comment by John Kerry.

So needless to say, while the president himself has agreed to three debates with his opponent, this latest challenge by John Kerry was not at all well received. Totally rebuffed by the Bush campaign in a statement saying, "After calling Republicans crooks and liars, John Kerry is now calling for a civil debate on the issues. Senator Kerry should finish the debate with himself before he starts trying to explain his positions to the voters."

So it doesn't appear that the two are likely to kiss and make up, or have more than three debates anytime soon -- Jeanne.

MESERVE: Kathleen, this week marks the one-year anniversary since the invasion of Iraq. Wondering what the White House is saying about that and about possible al Qaeda links to the recent Madrid bombing.

KOCH: Well, the White House, regarding the one-year anniversary, says that this war on terrorism is one that the U.S. and its allies are winning. They are taking the fight to the terrorists, and that the world is now a safer place. National Security Adviser Condoleezza Rice this morning insisted that the U.S. and its allies would not be intimidated by these attacks like the ones suffered by Madrid, Spain, this week.

MESERVE: Kathleen Koch...

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY CORRESPONDENT: No one can be intimidated. We're at war with these people. And yes, they will try to attack those who they believe might defeat them. That is a part of their game. But they will not win and we will not falter.

(END VIDEO CLIP)

KOCH: This week, on Tuesday and Wednesday, he meets with two prime ministers from some of our allies in the war. And they are both the Netherlands and Ireland. On Thursday, the president travels to Fort Campbell, Kentucky, where he will be meeting with troops.

And then returning to the White House Friday. He will be here for a major speech in the East Room on the anniversary of the war -- Jeanne.

MESERVE: Kathleen Koch at the White House. Thanks.

And checking some other political news this morning, former presidential candidate Dick Gephardt is blasting President Bush over his support for a constitutional amendment banning same-sex marriage. The Democratic congressman from Missouri attended an awards ceremony last night in Washington hosted by parents, families and friends of lesbians and gays. Gephardt has a gay daughter, Chrissy, who, along with her father, also attended the ceremony. (BEGIN VIDEO CLIP)

REP. RICHARD GEPHARDT (D-MO), FMR. PRESIDENTIAL CANDIDATE: I am ashamed when top leaders in this country and citizens and citizens of this country and even the president of the United States suggest to the people of this country that there should be an amendment to the Constitution to take away rights from people rather than giving rights to people.

(END VIDEO CLIP)

MESERVE: Gephardt takes part in a public service campaign that encourages the families of gays and lesbians to stay close.

The controversy over the price tag for Medicare reform is still a hot-button issue. The New York Times says Democrats are calling for an investigation of charges the Bush administration threatened to fire a top Medicare official if he gave data to Congress showing the high cost of the legislation. The official, Richard Foster, tells the paper, "There was a pattern of with holding information from what I perceive to be political purposes, which I thought was inappropriate." President Bush signed the reform measure in early December, and nearly two months later, the White House said the new law would cost about a third more than the amount given to Congress when it passed the bill.

Time now for the Sunday edition of our "Campaign News Daily."

The presidential campaign of retired General Wesley Clark is selling history and some office supplies in order to retire some campaign debt. About 300 people showed for the auction at his Little Rock headquarters. The event raised more than $27,000.

Meanwhile, Senator John Kerry did some shopping of his own this weekend with daughter Vanessa in Boston. They picked up some running clothes and reading material. The books included Walter Isaacson's "Benjamin Franklin: An American Life"; "Perfectly Legal" by David Cay Johnston; "100 Years of Solitude" by Gabriel Garcia Marquez"; and "Middlesex" by Jeffrey Eugenides. Kerry paid $155.62 with a credit card.

And who wants to be the next American candidate? A Showtime reality TV series holds a casting call in Washington this weekend. The winner of "American Candidate" gets $200,000 and national exposure, but is not necessarily obligated to run for president.

Coming up, a very full hour of "INSIDE POLITICS SUNDAY."

The campaigns are trading ugly issue ads. Is this what we can expect for the next eight months? We'll ask strategist for both campaigns just ahead.

And later...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How you doing? I just wanted to say you did not know I was coming but I checked with Maria. She said come on (UNINTELLIGIBLE).

(END VIDEO CLIP)

MESERVE: No, it's not Governor Schwarzenegger, but Senator Kerry's not so secret weapon is still a big draw in the campaign trail. We'll get a behind-the-scenes look at Chris Heinz.

(COMMERCIAL BREAK)

MESERVE: And welcome back to "INSIDE POLITICS SUNDAY."

As we reported, Spanish authorities are now looking for a possible al Qaeda link in Thursday's terror attacks in Madrid. What does this potentially mean for the presidential election here in the United States?

With me now, Michael Donilon, senior adviser and strategist for the Kerry campaign, and Charlie Black, Republican strategist and Bush supporter.

Thanks a lot for coming in.

Mike, let me start with you. Does this attack in Madrid potentially turn the debate back to national security and work to the advantage of President Bush?

MICHAEL DONILON, KERRY SENIOR ADVISER: Well, the debate has never been very far from national security. So I don't think it changes it. It reminds us how important that issue is. And Senator Kerry has been very clear about what he intends to do about that.

He spoke just a couple of weeks ago at UCLA and laid out a detailed plan about how to deal with terrorism, how to win the war on terror. And one of the things he said in that speech which is very important is, we're not doing too much to win the war on terror. He believes we are doing too little.

And there are a number of steps which need to be implemented which have yet to be regarding centralizing real intelligence between the CIA and the FBI. We don't have that databank yet. With regard to really protecting our ports and containers, we haven't done that yet. And with regard to really sort of looking to our international allies around the world to bring them together so we can have a war on terror that's going to be comprehensive across the world.

MESERVE: Charlie, does this give the Democrats an opening to say the president has concentrated too much on the away game when it comes to al Qaeda and not enough on defense?

CHARLIE BLACK, PRESIDENT BUSH SUPPORTER: Well, they can do that. But it sure won't help him politically. Because the more people learn about what the Department of Homeland Security has done under President Bush's leadership, we cannot guarantee that there will not be terrorist attacks, but we have gone a long way to make the homeland safer. Plus, you know, Senator Kerry disagrees with the president. Talk about intelligence, he several times in the '90s after the first bombing of the World Trade Center wanted to cut the intelligence budget. He believes that we should fight the war on terror here and treat it as a criminal matter rather than fight the in Kandahar and Baghdad. And, of course, he wants to replace the Patriot Act, which simply allows us to use against terrorists the same law enforcement techniques we use against drug pushers and the Mafia.

MESERVE: I have to get a response here.

DONILON: Well, a couple of points here. First of all, Senator Kerry does not simply want to replace the Patriot Act. He wants to improve it. And clearly, there are ways we can do that, protecting us here at home, but also protect the civil liberties. It's an important distinction between President Bush and Senator Kerry.

The second thing is, with respect to intelligence, there's no question that we need to improve the intelligence agencies in this country. The fact of the matter is that 9/11 was a terrible tragedy in this country, but it was also a great intelligence failure and it was a domestic security failure.

And the second thing is we're still looking for the weapons of mass destruction. The fact of the matter is the intelligence agencies in the United States, fully funded for years, have failed to do their job to the degree they need to. And Senator Kerry has talked about the ways to improve the intelligence agencies of this country so that we really rely on human intelligence and we bring our allies into this. We cannot go it alone in this war on terror.

MESERVE: Quick response.

BLACK: Well, Senator Kerry has had two and a half years since 9/11 to propose in the Senate to increase intelligence budgets and make these changes, and he's never done it. And of course we don't go it alone.

We have 30 allies right now in Iraq. Senator Kerry believes you have to go to the U.N. and get a permission slip to go fight the war on terror overseas. President Bush disagrees.

DONILON: Well, first of all, we can't let that stand, because the fact of the matter is that Senator Kerry has never said we need a permission slip from the U.N. Has never said it. The fact of the matter is that what we need to do is to cooperate with our allies around the world. Because, otherwise, if we stand alone, it is difficult to beat this issue all across the world.

MESERVE: Mike, why haven't we heard a statement from John Kerry about what happened in Spain?

DONILON: I believe we have. I believe he has expressed his condolences. And he also said that what this event reminds us of is how important it is for us to stay committed and to win the war on terror. And Senator Kerry believes we will win that war on terror. MESERVE: There has been a lot of talk about the negative advertising in this campaign. Both sides are complaining about it.

I want to ask you, Charlie, if the administration is so upset about the tone, why not take up the challenge to have a series of debates that talk about the issues?

BLACK: Well, you know, Senator Kerry had a bad week last week. The American people began to see that he was running from his record and flip-flopping on issues. And some of them started to think, well, maybe he's not such a nice guy calling his opponents crooks and liars.

So yesterday, to try to cure that, he said, "Let's have a debate on the issues. And I would like to go to a baseball game with George Bush." Well, I try not to sit with crooks and liars at baseball games when I go. So he needs to apologize and take that...

MESERVE: But why not debate?

BLACK: Look, we're going to have debates. The presidential commission on debates of the two parties always arranges them. But if Senator Kerry will apologize for the crooks and liars accusation, I'll personally hand carry his debate proposal to the White House and make sure they consider it.

DONILON: But what you are hearing here is a clear evasion. The fact of the matter is what Senator Kerry said is this: let's have a monthly debate. Let's lift the tone of the campaign. Let's do what is in the tradition of Lincoln-Douglas. Let's do what Senator Kerry did with Governor Wells in 1996, which many people acknowledge was one of the finest campaigns and most detailed campaigns run in recent years.

One final point I want to make is this: bad weeks are these things. Bad weeks are when have you a story on the front page of The Washington Post saying the administration, the United States of America, has told Medicare officials not to produce real numbers about the cost of proposals going before the Congress.

Bad weeks are when you propose a manufacturing czar who himself has been involved in exporting jobs out of this country. Those are the kinds of things which we ought to be talking about. And If President Bush would take up Senator Kerry's challenge, we would have a monthly debate which would lift the tone of this campaign, and the American people would benefit.

MESERVE: We are hearing the charges and countercharges here that we have been hearing in the advertising and from the candidates. Some people are decrying this is negative campaigning. But isn't this exactly what the American publics? Does this keep them engaged in the political process?

BLACK: If you keep it on the issues, there are huge issues in this campaign. It should be decided on the big issues.

And, by the way, it was the White House and OMB who came out with the actual cost of the prescription drug bill, not this bureaucrat. He followed along later. But if Senator Kerry will decide which record he wants to run on, his 19-year record in the Senate, or his assertions during the campaign which are opposite his record, then we might debate him. But I expect we will in the fall anyhow.

MESERVE: You know, how do the Democrats counter these sorts of charges which the Republicans will be (UNINTELLIGIBLE) in the advertising of the flip-flopper and so forth when they have this tremendous bank roll? How do you possibly counter that?

DONILON: Well, first of all, it's good to have the true thing aside, which we do. Senator Kerry's record for 19-plus years have been very steady, very clear. His criticisms of the president's policies and the direction he has taken this country in are very clear. So that's one way we counter it.

The second way we counter it is this: is that on a day-to-day basis, the facts of the ground on this country are making one very clear case, which is that the direction that the president is leading this country in with respect to economic job loss, with respect to rising health care costs, and with respect to an exploding federal deficit, are making the case every day for us that change needs to come to America.

MESERVE: And I'm afraid we have to call the debate off right there. Thank you both for joining us here this morning.

DONILON: Thank you.

BLACK: Thank you.

MESERVE: Appreciate it. Enjoy your Sunday.

And coming up next, the Bush and Kerry campaigns pick their targets. Which states will be the most hotly contested come November? CNN's political analyst Ron Brownstein will give us the lay of the land.

Plus...

(BEGIN VIDEO CLIP)

JAY LENO, TALK SHOW HOST: You know, political experts are saying this is shaping up to be the ugliest, nasty election ever. Good.

(END VIDEO CLIP)

MESERVE: And we'll check in with late night comics who are definitely looking forward to this political year.

(COMMERCIAL BREAK)

MESERVE: With such a closely divided electorate, both presidential candidates are scrambling for every vote. Los Angeles Times reporter Ron Brownstein went inside both camps and got their wish lists of states, which ones they are targeting, and which ones they hope to pick off from the other side.

Welcome. Thanks for coming in, Ron.

RON BROWNSTEIN, LOS ANGELES TIMES: Hi, Jeanne.

MESERVE: So what are the lists? What are the battlegrounds in the view of the two candidates?

BROWNSTEIN: Well, a wish list is a very good way to describe it. If you ask the Kerry campaign, some of their internal first cuts at looking at the electorate, they have about 10 states that they put right on the fence as tossup. Five of them went for Bush last time that they are targeting, and five of them that Gore won that they have to defend.

The Gore states: Iowa, Minnesota, Wisconsin, New Mexico and Oregon. The targets that Bush won that they're going to focus on: Florida, Missouri, Ohio, West Virginia and Nevada.

The Bush camp largely agrees with that list, but adds two more to the tossup category that the Kerry camp now feel leans toward them. One of them the New Hampshire, that Bush carried. The other one is Pennsylvania.

So you start with those dozen states as at the center of the election. There are a few more targets on each side, Arizona and Arkansas for the Democrats, Michigan, Maine, Washington for the Republicans. But it's a pretty narrow concentrated list this far away from an election.

MESERVE: Do you see a significant shift from what were considered the battleground states in 2000?

BROWNSTEIN: Yes, I do. I think that there is a subtle but real shift away from some of the southern and border states that Al Gore, as a southern native, focused on toward two other targets.

One is the Southwest, where you have New Mexico, the Democrats have to defend; Nevada and Arizona they want to target. Even more important, the Midwest. You look at the list, you have Pennsylvania, you have Wisconsin, you have Iowa, you have Minnesota, and above all, you have Ohio, which I think both states today would probably say is the state most likely to decide the election. It's probably going to be in 2004 what Florida was in 2000.

MESERVE: And didn't the president travel out there just this week?

BROWNSTEIN: And John Kerry is there today in what is arguably his first general election visit.

Look, Florida is still a top target for both sides. But since 2000, Florida has gained over 200,000 jobs. It may have tilted it slightly toward the Republicans.

Ohio, on the other hand, has lost 225,000 jobs since George Bush took office. Nearly 170,000 manufacture jobs. And I think in both sides there's a sense that it has put that more within reach for Democrats and made it more competitive.

MESERVE: Is there anyone who John Kerry could put on the ticket that might help him in those battleground states that you've outlined?

BROWNSTEIN: That is a really good question. I mean, if there was someone who could absolutely help him in small-town, blue-collar Midwestern communities, that candidate I think would be a guaranteed winner.

John Edwards has some claim to that. Dick Gephardt has some claim to that. But I think that's going to be one of the things they're looking at over the next four months or so as they make their choice.

MESERVE: Yes, I bet they will be, if you believe that the vice presidential pick really has an impact. Do you think so?

BROWNSTEIN: Look, it can't hurt. I mean, I think -- look, if you can pick someone who could spend all of their time in those few states, traveling around on blue highways, smaller markets, especially rural communities, where George Bush has dominated in 2000 and looks very strong again in 2004, I think that could be an asset. The electoral college is so close. There's a lot of incentive to pick someone who can help you in a particular place, in contrast to someone who could send a broad national message, the way Gore did by picking Joe Lieberman in 2000.

MESERVE: OK. Ron Brownstein, thank as lot for coming in.

BROWNSTEIN: Thank you.

MESERVE: And we'll be watching.

There's a lot of talk about negative campaign ads and who is picking up the bill. Our Bill Schneider explains what all the fuss is about in our "Story Behind the Story."

And who is pulling ahead of the VP stakes? (UNINTELLIGIBLE) we'll read the morning grind tea leaves coming up next.

(COMMERCIAL BREAK)

COLLINS: I'm Heidi Collins at CNN Center. Here now are the headlines at this hour.

Spain shifts its focus. Al Qaeda, not the Basque terror group ETA, is now the primary focus of an investigation into Thursday's Madrid bombings that killed 200 people. A videotape has surfaced crediting Osama bin Laden's network for the attacks. The investigation could impact today's national election.

Some accuse Prime Minister Jose Maria Aznar's popular party of a cover-up about who was responsible for the blasts. The conservatives were favored to win before the latest revelations. The attacks in Spain are a warning to the world about vulnerability to terrorism. That's according to Secretary of State Colin Powell, who appeared on ABC's "This Week" program just a short time ago.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: I hope that Europeans will now see that no one is immune and no system of transportation is immune -- airplane, rail lines and the like. And I hope this will cause Europeans to rededicate themselves to going after terrorist organizations. Terrorist organizations, whether it is ETA or whether it's al Qaeda, are a threat to all civilized nations.

(END VIDEO CLIP)

COLLINS: Powell also called for international unity in the fight against terrorism.

A Fresno, California, man is charged with killing nine of his own offspring, some apparently conceived in incest. Police say Wesson had children with two of his daughters. Outside the home where the bodies were discovered, a makeshift memorial of stuffed animals, balloons and flowers. No word yet on the victim's cause of death. Wesson's bail is set at $9 million.

Activists plan a peace march later today to mark the one-year anniversary of the U.S. invasion in Iraq. The protests steps off in Dover, Delaware. And that's where the bodies of U.S. soldiers are prepared for burial. The march will end in Washington. The U.S. launched the war on March 19th.

For now, back to "INSIDE POLITICS SUNDAY."

MESERVE: And welcome back to INSIDE POLITICS Sunday.

Here with our Sunday cup of "The Morning Grind" is CNN political editor John Mercurio.

John, thanks a lot for coming in.

JOHN MERCURIO, CNN POLITICAL EDITOR: Good morning, Jeanne.

MESERVE: So Ron and I were talking a little bit about the veepstakes. How is John Kerry's search for a vice presidential partner coming along?

MERCURIO: I think at this point it's still pretty much major- league guessing game. I don't think we're really going to have any specific names for at least two or three weeks, probably longer than that. The only people who are actually kind of clued into this are Mary Beth Cahill, the campaign manager, probably Bob Shrum, John Kerry and Jim Johnson, his camp -- his -- sort of his search team captain.

What we do know is that Johnson was on the Hill and was around Washington this week talking to Nancy Pelosi, Tom Daschle, the leaders -- the Democratic leaders in the House and Senate. John Sweeney, who obviously endorsed Kerry, Fritz Holllings, one of his biggest -- one of Kerry's biggest backers in the South. Johnson's intent, I guess, is -- at this point, is just to consult and give the appearance of party unity, that he's trying to bring the party together, find out what people want in a vice president and sort of create what we're looking at right now, which is the kind of long list of candidates.

MESERVE: And who's on the list? What are you hearing about what some of those people are up to?

MERCURIO: Yes. Well, the list is obviously 50 or 60 people long. I won't go through the whole list.

But what we're hearing this week is that John Edwards obviously had a meeting on Thursday with John Kerry in Washington at the St. Regis Hotel. We all saw Edwards greet Kerry with the, "Hey, brother," little moniker. But I don't know if that worked with Kerry.

In the meeting, though -- and I'm told by some people who were there, some Kerry campaign people, Edwards' supporters, his financial donors, stood up and basically sounded as though they were tying their financial contributions to Kerry to Kerry's intention to support Edwards as VP, the idea being, you know, we'd really like to see John Edwards as VP, so take that into consideration.

Tom Vilsack, the governor of Iowa -- he's the chairman of the Democratic Governors Association -- he gave a scathing speech last night in Montana at their Mansfield Metcalf Dinner, sort of the annual party dinner -- scathing speech against Bush, talked about how Democrats can win red states. And the reason that we know about this speech -- it's Sunday morning, he give this speech late last night -- is that Vilsack has some people working in Washington, (UNINTELLIGIBLE). He's got some Democratic sort of cheerleaders working on his behalf on the vice-presidential race. And that's important, and that works for him.

The other name that we're hearing -- and this isn't a candidate so much for VP, but Bob Shrum. I mentioned him earlier. Is one of Kerry's closest advisers, he's also a very good friend of Jim Johnson. And he famously urged gore in 2000 to pick John Edwards, who was one of his clients in 1998. He's very influential in this process, as he is in most of the processes that go on in the Kerry administration. And one of his clients in 2000 was Bill Nelson, a senator from Florida who is now being talked about more closely. You can assume that Shrum has something to do with Bill Nelson's name being mentioned.

MESERVE: Howard Dean, big announcement Thursday. What's that all about?

MERCURIO: That's about Dean's intention to remain active in the Democratic process. He's going to be coming out with this group. It's sort of a grass-roots group. He said it's going to be focused on universal healthcare and campaign finance reform.

We know at this point he's going to launch it in Seattle -- Seattle, Washington -- and that he's going to go on a multi-city tour of San Francisco, New York -- obviously, Burlington, Vermont, his hometown -- and Washington, D.C. The group is going to be based in Burlington.

The parlor game right now in Washington, I think, is to try to figure out how closely his group, which we don't have the name of yet -- apparently the name hasn't been resolved -- how closely his group is going to be aligned with Joe Trippi, his former campaign manager's group, Change for America. Dean aides tell us that it's -- it -- that they do intend to work closely. And if you look at Joe Trippi's blog, changeforamerica.com, their focus is on beating Bush, but also on sort of maintaining a high profile for Dean in the future. So I think you're going to see them working closely.

MESERVE: The one-year anniversary of the Iraq war this week. It's likely to be a big topic on the campaign trail. How do you see that playing out?

MERCURIO: I actually see it probably playing out pretty well for Bush. Polls at this point show that people by, I guess a two-to-one margin, support Bush's handling of the war, at least the war on terrorism. And Bush knows that and so does his campaign and you're going to them highlight things. Every day this week there is an event that highlights foreign policy. I know on Tuesday and Wednesday, I think Bush is meeting with the foreign ministers -- Dutch and the Irish foreign ministers who were obviously big allies on the war in Iraq. You've got Rumsfeld, Condoleezza Rice and Colin Powell on the morning talk shows today, highlighting not so much the war in Iraq as much as the progress that they've made in Pakistan and in Libya.

The interesting thing, though, is on Wednesday, Dick Cheney is going to be giving a speech at the Ronald Reagan Presidential Library in California, sort of highlighting the differences between the Bush and Kerry foreign policy. Kerry's people tell me they're going to be responding to that with a speech of their own on -- later that day, talking about how much better Kerry's foreign policy would be. They also have surrogates like Wes Clark on Tuesday in Ohio giving a big foreign policy speech on Kerry's behalf.

MESERVE: We just have a second, give me the quick answer on where John Kerry is going on vacation, a decision fraught with political implications.

MERCURIO: Absolutely. It's undecided. But there's apparently three options right now: their home in Idaho -- they're in Sun Valley -- also possibility in Arizona or, of course, Florida.

MESERVE: OK. Great. Thanks a lot, John, for joining us.

For the best daily briefing on politics, don't miss "The Morning Grind." Go to www.cnn.com/grind for all the latest political news.

Campaign cheating or a fair and legal loophole? Election officials are looking into a Bush-Cheney campaign complaint that Democrats are not playing by the rules. It all has do with the way new anti-Bush attack ads are being funded.

Senior political analyst, Bill Schneider, has "The Story Behind the Story."

(BEGIN VIDEOTAPE)

KERRY: I'm an advocate of campaign finance reform.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Yes, he is. So were most Democrats, including this one.

WILLIAM CLINTON, PRESIDENT OF THE UNITED STATES: This legislation closes a special-interest loophole.

SCHNEIDER: Good news for Democrats: there's still a big loophole.

Republicans have been far more successful than democrats in raising so-called hard money, relatively small campaign contributions that are limited by law.

BEN GINSBERG, ATTORNEY, BUSH-CHENEY CAMPAIGN: We have over 600,000 donors that have given an average of $117 in contributions.

SCHNEIDER: In the past, Democrats have been able to match Republicans only in soft money, large contributions unlimited and unregulated, money John Kerry could use now.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: He's pretty much out of money. In the past, the political party would have stepped in with soft money and done the ads between now and the convention.

SCHNEIDER: The campaign finance reform passed in 2002 bans political parties from raising soft money.

SEN. JOHN MCCAIN (R), ARIZONA: There are efforts by political operators to redirect some of that money to groups that operate as political organizations under Section 527.

SCHNEIDER: Like the liberal Moveon.org Voter Fund, which ran this anti-Bush ad.

ANNOUNCER: George Bush wants to eliminate overtime pay...

SCHNEIDER: Critics argue that under the law, that ad should be paid for only by hard money, the kind Democrats have trouble raising.

GINSBERG: They're cheating by getting unlimited contributions in soft money from special-interest groups.

SCHNEIDER: The Democratic co-sponsor of campaign finance reform wants the Federal Elections Commission to close that loophole.

SEN. RUSS FEINGOLD (D), WISCONSIN: The FEC must not bless a new circumvention of the election laws so soon after we closed the last loophole it created.

SCHNEIDER: But some Democrats who once accused the GOP of blocking reform are now exploiting that loophole. They claim it levels the playing field.

HAROLD ICKES, DIRECTOR, THE MEDIA FUND: Oh, give me a sponge for the tears. The Republicans talking about -- we're going to have more money?

SCHNEIDER: So when the Bush campaign opened with this charge.

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

SCHNEIDER: The Kerry campaign had to return fire.

ANNOUNCER: John Kerry has never called for a $900 billion tax increase.

SCHNEIDER: But they can't afford to keep doing that for long. Some independent conservative groups have run ads, too, like this one against Howard Dean. But the Democrats now have to rely on independent liberal groups to carry the Kerry message.

(on camera): Democrats said they wanted to get unlimited soft money out of politics. Have they changed their minds?

Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

MESERVE: And it's all in the family on the campaign trail. Coming up next, Chris Heinz trades in his day job to stump for his stepdad full time. A candid interview up next.

(COMMERCIAL BREAK)

MESERVE: Campaigning for president can be a family event. Senator Kerry, for instance, is getting a helping hand from at least six family members: his wife, Teresa Heinz Kerry, his own two daughters, and his wife's three sons from her marriage to the late senator John Heinz.

CNN's Anderson Cooper spoke recently with Chris Heinz, Senator Kerry's stepson.

(BEGIN VIDEOTAPE)

CHRIS HEINZ, JOHN KERRY'S STEPSON: It was off the record. Regardless whether it was physically on the record or not, certainly I think that the GOP and the political operatives have a history of being more than aggressive.

ANDERSON COOPER, CNN ANCHOR: Is this just part of politics or do you think your stepdad really...?

HEINZ: And the president? I don't think he was referring to the president.

COOPER: And he's come out saying he wasn't, he was referring to referring to Republican attack dogs.

HEINZ: Right. And those are two different things. Both the president and my stepfather are professionals in that sense.

COOPER: Senator Kerry, he has been tough on President Bush, called it arrogant, inept, reckless. He said the president was playing dress-up on an aircraft carrier. Are you surprised at sort of the level of, or at least the war of words so early on in the campaign?

HEINZ: No. We just went through a Democratic primary. The level of anger towards this president in that group of voters is much more severe than the words that John used to describe the president's foreign policy.

COOPER: Do you find yourself being called upon to do things that surprise you? I know one point you were called to do your Arnold Schwarzenegger impression.

HEINZ: Yes. I've been called upon not to do it anymore.

COOPER: That means I can't ask you to do it.

HEINZ: Hey. Just being asked that is surprising enough.

COOPER: I read that your mom had some concerns about the campaign. She is now out on the campaign trail. Did you talk about that with her? What were those conversations like?

HEINZ: Well, we've had a few surreal conversations as a family. It is just an intimidating process. We've been talking about the press intensity and I would be lying to say we weren't happy normal people before who didn't think we were jumping off into a big chasm.

COOPER: Your late father, Senator John Heinz, was Republican. Were you Republican before? Where do you see yourself now in the political realm?

HEINZ: I admit I'm a Democrat. If you would have asked me probably until the time I was 18 when my father died, I probably would have answered I was Republican. And I' say over the last 12, 13 years from what I've seen, the Republican party shifted (UNINTELLIGIBLE).

COOPER: You've grown up with politics all your life, grown up in a political family. I understand that when you were younger, I think I read in the "Times," you even went to Camp David with the first President Bush. What was that like?

HEINZ: It was great. I went there with my brother and my father. Just like anything, you look around with wide eyes. It was a mystical place, helicopters and marines everywhere. It was pretty wild.

COOPER: Do you want to get back to Camp David some time?

HEINZ: Yes. I would like to earn John the right to take us to Camp David. I'm working hard for that. Otherwise, not really.

COOPER: We'll leave it there. Thanks.

(END VIDEOTAPE)

MESERVE: Well, if you were too tired to stay up for the late- night talk shows you won't miss a thing, because we've compiled the funniest hits of the week. Late-night laughs coming up.

(BEGIN VIDEOTAPE)

ANNOUNCER: ..has never called for a $900 million tax increase.

ANNOUNCER: John Kerry. Wrong on taxes...

(END VIDEOTAPE)

MESERVE: Plus, the gloves are coming off, but our panel has plenty of experience deflecting negative ads. We'll get their advice for the candidates next.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): There's just over one month to file your taxes. On this day in 1923, Warren G. Harding became the first U.S. president to file an income tax return. His tax bill that year amounted to nearly $18,000.

Fast forward to current President George W. Bush, who paid more than $258,000 in federal income taxes last year.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

MESERVE: Those nasty issue ads started surfacing this past week on television, prompting allegations of negative campaigning and setting the stage for the fall slugfest.

But the underlying questions about the economy, jobs and leadership are certainly important topics, too. Here to discuss those issues and more are Democratic strategist and CNN political analyst Donna Brazile, and Republican strategist and former deputy communications director for the Republican National Committee, Cheri Jacobus.

Thank you both for coming in.

CHERI JACOBUS, GOP STRATEGIST: thank you.

MESERVE: Cheri, let me start with you. A lot of questions why these ads have started so soon from the White House. And some Republican strategists being quoted anonymously, many of them, as saying this reflects just how worried the White House is about this election. Worried? JACOBUS: Well, I don't -- I think they're taking it seriously, of course. They've said from the beginning they expect this to be a close race, and they're taking it seriously. No one is being cocky or taking anything for granted.

But the schedule is really set by Terry McAuliffe and the Democrats. They decided that they wanted to have the nominee early and push up their primaries and caucuses to make sure they had a nominee. I think they're a little bit concerned now that they might not have the money to back up that nominee.

But it only makes that the president and the White House would start -- as long as the Democrats have decided that the race starts now, then certainly the White House is, considering the fact they've been attacked for months and months.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well..

MESERVE: Go ahead, Donna.

BRAZILE: Well, if truth be told, they're frantic. They're running scared. They've seen the poll numbers. Voters are concerned about this president's record on the economy, on health care.

They are also very worried that George Bush just doesn't get it. He has a lot of explaining to do. He 's been in office for three years and he has really no record to run on. That's why the Bush-Cheney campaign are running negative ads. And it won't work. It will backfire and it will not work.

JACOBUS: The president's record is pretty solid. Everybody knows exactly what he's done for the past three years. But he has had to withstand a barrage of $6.3 million of attacks on the part of the Democrats. John Kerry has spent millions of dollars attacking him, as all these Democrats have. They've run -- you know, he's run 17,000 ads...

BRAZILE: They've attacked his record. His records on jobs, on the economy, on health care...

(CROSSTALK)

JACOBUS: ...liars and crooks, and we've had moveon.org put this ad up on the Internet they said was an accident, comparing him to Hitler and the Nazis.

So I think that it's perfectly within the rights and appropriate for the White House to respond and start looking at some of the things Kerry has said.

(CROSSTALK)

BRAZILE: The White House -- normally a president, a sitting president, stays above the fray. Don't get into the mud and in the ditch and throw -- and throw...

(CROSSTALK)

MESERVE: He's certainly come out of the Rose Garden, however. It's certainly a change in tactics from previous presidents.

JACOBUS: And, you know -- and it depends who you talk to, because a lot of republicans have said, Well, perhaps he should have done this earlier or responded sooner. So it really depends who you talk to.

MESERVE: Well, what do you think? Did he wait too long to engage?

JACOBUS: I personally would have liked to have seen him to respond sooner. We did see his numbers dip down because it was all the Democrats attacking him at a very, very nasty level that's pretty much unprecedented. So I'm happy to see the campaign coming out and responding and sticking to the issues by trying to put a dollar figure on some of the Kerry proposals.

I find it interesting that the Kerry campaign responded with an ad that didn't put a dollar figure on his own proposals. So I think that's very telling.

(CROSSTALK)

BRAZILE: Well, it's amazing that the president would put a dollar figure on John Kerry's plan when John Kerry has not put forward a budget plan.

Look, this is an incumbent president. He must run on his record, and the challengers must challenge his record.

The other thing is that his poll numbers are dipping because the American people have lost confidence in his ability to lead on jobs, the economy and health care.

(CROSSTALK)

JACOBUS: And we also have -- we also have heard this week from Alan Greenspan that the jobs are going to start coming back. So I expect in the coming months, Donna, you and other Democrats aren't going to be talking with jobs anymore. You'll have to find another issue.

BRAZILE: We've been hearing that the jobs are coming, the jobs are coming. Dick Cheney is saying the jobs are coming. The president couldn't even keep his signature on the economic report because the jobs are not coming.

(CROSSTALK)

JACOBUS: In a recovering economy, jobs are the last, lagging indicator. It's sad. It's painful. But we do know they will be coming back.

MESERVE: The two of you aren't going to agree on that issue, so let me move on, if I could.

There was mention of the now infamous tape of John Kerry referring to liars. Did he go too far, Donna? Was that a mistake?

BRAZILE: Well, I think what he was referring to is the Republican attack machines that lies, misleads, deceives and, of course, you know, outright destroyed the character of Democrats.

Look, even if...

(CROSSTALK)

JACOBUS: He should name names. He should say exactly where the crooks are and what they're lying about. And that's not what happened, Donna.

(CROSSTALK)

BRAZILE: ...for going against the president's tax cut plans, that's a part of the Republican attack machine. When you tag John McCain the way the Republicans did in 2000, even criticizing his wife, that's the Republican attack machine.

(CROSSTALK)

JACOBUS: ...they're trying to figure out what John Kerry meant because John Kerry has not said -- he called -- he said this amorphous group of Republicans -- he won't say who they are -- they're liars and they're crooks. He won't say why. He was caught off-mike and now his people are standing by those.

(CROSSTALK)

JACOBUS: And I think that this is going to hurt his fund-raising because rank-and-file Democrats that might otherwise write a check, don't like to see this in their candidate. They don't like that the first press conference he has on the Hill with Democrat leaders is to defend those statements.

It's nasty business. He's showing he's not quite ready for primetime.

BRAZILE: Well, this is a president who, in 2000, used a word that I can't even use on Sunday morning when he referred to a New York Time reporter as a major league (UNINTELLIGIBLE).

JACOBUS: And didn't say it to voters. John Kerry actually said this to voters and then stood by his statements. And a senior spokesman said he would have said this on and off mike.

The president, when he was caught saying it privately to his running mate, said, you know, I shouldn't have said that. John Kerry seems to be rather proud of his statements.

(CROSSTALK)

BRAZILE: He should not apologize.

MESERVE: I want to ask you about the money situation.

Here, John Kerry has had a pretty wide-open field here for a while, he and the other Democrats hammering President Bush on his policies. Now, the Republicans are up and running, running those ads. They've got one heck of lot more money.

BRAZILE: Yes.

MESERVE: And the polls at the moment show a mixed picture.

BRAZILE: Absolutely.

MESERVE: Some show Kerry ahead, one shows Bush ahead in a match- up between the two.

How is Kerry going to withstand the onslaught?

BRAZILE: Well, easy. Because in every election cycle -- and, Cheri, you would agree with this -- that Republicans start off with more money and cash on hand than Democrats.

The way you make up the fact that the Bush team has a huge slush fund is to start campaigning on ideas. John Kerry needs to go out there, tell the American people what type of country he will lead and his policies. That's how you make it up. You give people something to vote for.

MESERVE: And we have to leave it there. I'm sorry. Donna, Cheri, thank you both for coming in. It was a lot of fun.

And a Sunday brunch edition of late-night laughs. We're serving up the best campaign comedy of the week.

(COMMERCIAL BREAK)

MESERVE: And we have this breaking news to report. Eight people killed in two explosions in the Israeli port of Ashdod. Israeli TV says it apparently was a double suicide bombing. CNN is on its way to the scene. We'll have more information and we'll bring it to you soon.

INSIDE POLITICS SUNDAY continues in just a moment.

(COMMERCIAL BREAK)

MESERVE: What would politics be without a little humor thrown in? Here now, a look at some of the late-night laughs of his week.

(BEGIN VIDEOTAPE)

JAY LENO, HOST, "THE TONIGHT SHOW": You know, the political experts are saying this election is shaping up to be the ugliest, nastiest election ever. Good.

UNIDENTIFIED MALE: Election season is upon us and if the war on Iraq, the budget deficit or the future of Social Security aren't enough to inspire you to vote, maybe a fancy truck will get you off your ass.

Say hello to Reggie, the registration rig. That's what the Republican National Committee is calling its 18-wheel voter registration center. The democrats just have the old please-help-us mobile.

JON STEWART, HOST, "THE DAILY SHOW": The president and the GOP have drawn fire for the ad, which includes footage of not only the destroyed Twin Towers, but the image of a dead firefighter being brought out of the rubble. It's arguably the most disturbing image ever shown in a campaign commercial, eclipsing even Bob Dole's infamous talking belly button ad.

LENO: I know you saw John Kerry visiting Capitol Hill yesterday. You know who I think likes Kerry a little too much? Ted Kennedy. I'm not mistaken -- did you see this yesterday? Now is it me or is Ted Kennedy checking out John Kerry's rear-end? Look at this. No, watch. No. Look. You watch. Now what is that all about?

(END VIDEOTAPE)

MESERVE: And thanks for joining us for INSIDE POLITICS SUNDAY.

Coming up in one half hour, a special RELIABLE SOURCES. Howard Kurtz takes on former New York Times reporter Jayson Blair about his new book, "Burning Down My Master's House."

And at noon Eastern, on "LATE EDITION," Wolf Blitzer interviews Defense Secretary Donald Rumsfeld.

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





VP Tea Leaves>


Aired March 14, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: As we said, "INSIDE POLITICS" beginning in just a minute or so. But first, the headlines.
A nation in mourning goes to the polls. Spain is holding its general elections three days after its worst ever terrorist attack. Prime Minister Jose Maria Aznar was among those casting ballots. Protesters accuse his government of initially blaming the Basque separatist group ETA for Thursday's attacks for political gain. The investigation is now focusing, though, on al Qaeda. Five people have been detained in connection with the bombings.

In Iraq, American troops face more deadly attacks. Roadside bombings have killed six U.S. soldiers this weekend. In the latest incident, a roadside bomb exploded this morning in Baghdad, killing a first infantry division soldier.

Here in the United States, the Pittsburgh Fire Department is mourning the deaths of two of its firefighters. They died yesterday while battling a blaze at an historic church as its bell tower collapsed. More than two dozen other firefighters were injured.

"INSIDE POLITICS SUNDAY" begins right now.

JEANNE MESERVE, HOST: "INSIDE POLITICS": Today, let the games begin. Both presidential camps go on the attack with negative ads, and it's only March. We'll take you behind the scenes with two campaign strategists.

Reading the vice presidential tea leaves, who will John Kerry pick as his number two? We will share our predictions.

And searching for an American candidate right here in Washington. We'll tell you about the New reality TV show that wants you in the White House.

ANNOUNCER: Live from Washington, this is "INSIDE POLITICS SUNDAY."

MESERVE: As we talk politics this morning, we're also getting set to mark an important anniversary. One year ago this week, the U.S.-led coalition launched its war on Iraq.

Hello. I'm Jeanne Meserve in Washington. Politics doesn't take weekends off, and neither do we. We begin on the presidential campaign trail. It has been a week of heeded exchanges between President Bush and the Democrat who wants his job, Senator John Kerry. Mr. Bush launched an ad campaign bashing Kerry, and Kerry fired back. Plus, he's challenging the president to a series of debates.

Our national correspondent Bob Franken is keeping an eye on the Kerry campaign for us.

Bob, what's the latest?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT : Well, the latest is that the Senator is in Ohio and Pennsylvania today. And why is he in those two states? Well, they are going to be there a lot. It is the -- Ohio and Pennsylvania are two of the major battleground states.

He was in Quincy, Illinois, last night. And why? Well, that was the scene of one of the Lincoln-Douglas debates. Kerry says that is a really good idea. In fact, he and the president should do that once every month.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I am asking George Bush to agree to a series of monthly debates starting this spring to talk about the real issues in our country.

(END VIDEO CLIP)

FRANKEN: Real issues? The Bush campaign says, no, no, no. We're not going to do that. Why? Because first Kerry has to decide what he is all about, particularly after that soft-spoken rant this week.

(BEGIN VIDEO CLIP)

KERRY: We're going to keep pounding, let me tell you. We're just beginning to fight here. These guys are the most crooked, you know, lying group that I have ever seen.

(END VIDEO CLIP)

FRANKEN: So, let's really crystallize the campaign. The Bush campaign has ads out making a variety of accusations against John Kerry. Kerry says they are not true.

That's it. That's the campaign, Jeanne.

MESERVE: OK. Well, that certainly gets it down to its simplest elements. Bob, thanks a lot. Go enjoy the day.

The Bush administration side of the story on the debate challenge now. We turn to CNN's Kathleen Koch at the White House -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Well, Jeanne, there obviously is no love lost between these two opponents. There is, of course, the dueling negative ad campaigns that Bob just mentioned. They started running last week. And then -- so then there was this offhand comment by John Kerry.

So needless to say, while the president himself has agreed to three debates with his opponent, this latest challenge by John Kerry was not at all well received. Totally rebuffed by the Bush campaign in a statement saying, "After calling Republicans crooks and liars, John Kerry is now calling for a civil debate on the issues. Senator Kerry should finish the debate with himself before he starts trying to explain his positions to the voters."

So it doesn't appear that the two are likely to kiss and make up, or have more than three debates anytime soon -- Jeanne.

MESERVE: Kathleen, this week marks the one-year anniversary since the invasion of Iraq. Wondering what the White House is saying about that and about possible al Qaeda links to the recent Madrid bombing.

KOCH: Well, the White House, regarding the one-year anniversary, says that this war on terrorism is one that the U.S. and its allies are winning. They are taking the fight to the terrorists, and that the world is now a safer place. National Security Adviser Condoleezza Rice this morning insisted that the U.S. and its allies would not be intimidated by these attacks like the ones suffered by Madrid, Spain, this week.

MESERVE: Kathleen Koch...

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY CORRESPONDENT: No one can be intimidated. We're at war with these people. And yes, they will try to attack those who they believe might defeat them. That is a part of their game. But they will not win and we will not falter.

(END VIDEO CLIP)

KOCH: This week, on Tuesday and Wednesday, he meets with two prime ministers from some of our allies in the war. And they are both the Netherlands and Ireland. On Thursday, the president travels to Fort Campbell, Kentucky, where he will be meeting with troops.

And then returning to the White House Friday. He will be here for a major speech in the East Room on the anniversary of the war -- Jeanne.

MESERVE: Kathleen Koch at the White House. Thanks.

And checking some other political news this morning, former presidential candidate Dick Gephardt is blasting President Bush over his support for a constitutional amendment banning same-sex marriage. The Democratic congressman from Missouri attended an awards ceremony last night in Washington hosted by parents, families and friends of lesbians and gays. Gephardt has a gay daughter, Chrissy, who, along with her father, also attended the ceremony. (BEGIN VIDEO CLIP)

REP. RICHARD GEPHARDT (D-MO), FMR. PRESIDENTIAL CANDIDATE: I am ashamed when top leaders in this country and citizens and citizens of this country and even the president of the United States suggest to the people of this country that there should be an amendment to the Constitution to take away rights from people rather than giving rights to people.

(END VIDEO CLIP)

MESERVE: Gephardt takes part in a public service campaign that encourages the families of gays and lesbians to stay close.

The controversy over the price tag for Medicare reform is still a hot-button issue. The New York Times says Democrats are calling for an investigation of charges the Bush administration threatened to fire a top Medicare official if he gave data to Congress showing the high cost of the legislation. The official, Richard Foster, tells the paper, "There was a pattern of with holding information from what I perceive to be political purposes, which I thought was inappropriate." President Bush signed the reform measure in early December, and nearly two months later, the White House said the new law would cost about a third more than the amount given to Congress when it passed the bill.

Time now for the Sunday edition of our "Campaign News Daily."

The presidential campaign of retired General Wesley Clark is selling history and some office supplies in order to retire some campaign debt. About 300 people showed for the auction at his Little Rock headquarters. The event raised more than $27,000.

Meanwhile, Senator John Kerry did some shopping of his own this weekend with daughter Vanessa in Boston. They picked up some running clothes and reading material. The books included Walter Isaacson's "Benjamin Franklin: An American Life"; "Perfectly Legal" by David Cay Johnston; "100 Years of Solitude" by Gabriel Garcia Marquez"; and "Middlesex" by Jeffrey Eugenides. Kerry paid $155.62 with a credit card.

And who wants to be the next American candidate? A Showtime reality TV series holds a casting call in Washington this weekend. The winner of "American Candidate" gets $200,000 and national exposure, but is not necessarily obligated to run for president.

Coming up, a very full hour of "INSIDE POLITICS SUNDAY."

The campaigns are trading ugly issue ads. Is this what we can expect for the next eight months? We'll ask strategist for both campaigns just ahead.

And later...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How you doing? I just wanted to say you did not know I was coming but I checked with Maria. She said come on (UNINTELLIGIBLE).

(END VIDEO CLIP)

MESERVE: No, it's not Governor Schwarzenegger, but Senator Kerry's not so secret weapon is still a big draw in the campaign trail. We'll get a behind-the-scenes look at Chris Heinz.

(COMMERCIAL BREAK)

MESERVE: And welcome back to "INSIDE POLITICS SUNDAY."

As we reported, Spanish authorities are now looking for a possible al Qaeda link in Thursday's terror attacks in Madrid. What does this potentially mean for the presidential election here in the United States?

With me now, Michael Donilon, senior adviser and strategist for the Kerry campaign, and Charlie Black, Republican strategist and Bush supporter.

Thanks a lot for coming in.

Mike, let me start with you. Does this attack in Madrid potentially turn the debate back to national security and work to the advantage of President Bush?

MICHAEL DONILON, KERRY SENIOR ADVISER: Well, the debate has never been very far from national security. So I don't think it changes it. It reminds us how important that issue is. And Senator Kerry has been very clear about what he intends to do about that.

He spoke just a couple of weeks ago at UCLA and laid out a detailed plan about how to deal with terrorism, how to win the war on terror. And one of the things he said in that speech which is very important is, we're not doing too much to win the war on terror. He believes we are doing too little.

And there are a number of steps which need to be implemented which have yet to be regarding centralizing real intelligence between the CIA and the FBI. We don't have that databank yet. With regard to really protecting our ports and containers, we haven't done that yet. And with regard to really sort of looking to our international allies around the world to bring them together so we can have a war on terror that's going to be comprehensive across the world.

MESERVE: Charlie, does this give the Democrats an opening to say the president has concentrated too much on the away game when it comes to al Qaeda and not enough on defense?

CHARLIE BLACK, PRESIDENT BUSH SUPPORTER: Well, they can do that. But it sure won't help him politically. Because the more people learn about what the Department of Homeland Security has done under President Bush's leadership, we cannot guarantee that there will not be terrorist attacks, but we have gone a long way to make the homeland safer. Plus, you know, Senator Kerry disagrees with the president. Talk about intelligence, he several times in the '90s after the first bombing of the World Trade Center wanted to cut the intelligence budget. He believes that we should fight the war on terror here and treat it as a criminal matter rather than fight the in Kandahar and Baghdad. And, of course, he wants to replace the Patriot Act, which simply allows us to use against terrorists the same law enforcement techniques we use against drug pushers and the Mafia.

MESERVE: I have to get a response here.

DONILON: Well, a couple of points here. First of all, Senator Kerry does not simply want to replace the Patriot Act. He wants to improve it. And clearly, there are ways we can do that, protecting us here at home, but also protect the civil liberties. It's an important distinction between President Bush and Senator Kerry.

The second thing is, with respect to intelligence, there's no question that we need to improve the intelligence agencies in this country. The fact of the matter is that 9/11 was a terrible tragedy in this country, but it was also a great intelligence failure and it was a domestic security failure.

And the second thing is we're still looking for the weapons of mass destruction. The fact of the matter is the intelligence agencies in the United States, fully funded for years, have failed to do their job to the degree they need to. And Senator Kerry has talked about the ways to improve the intelligence agencies of this country so that we really rely on human intelligence and we bring our allies into this. We cannot go it alone in this war on terror.

MESERVE: Quick response.

BLACK: Well, Senator Kerry has had two and a half years since 9/11 to propose in the Senate to increase intelligence budgets and make these changes, and he's never done it. And of course we don't go it alone.

We have 30 allies right now in Iraq. Senator Kerry believes you have to go to the U.N. and get a permission slip to go fight the war on terror overseas. President Bush disagrees.

DONILON: Well, first of all, we can't let that stand, because the fact of the matter is that Senator Kerry has never said we need a permission slip from the U.N. Has never said it. The fact of the matter is that what we need to do is to cooperate with our allies around the world. Because, otherwise, if we stand alone, it is difficult to beat this issue all across the world.

MESERVE: Mike, why haven't we heard a statement from John Kerry about what happened in Spain?

DONILON: I believe we have. I believe he has expressed his condolences. And he also said that what this event reminds us of is how important it is for us to stay committed and to win the war on terror. And Senator Kerry believes we will win that war on terror. MESERVE: There has been a lot of talk about the negative advertising in this campaign. Both sides are complaining about it.

I want to ask you, Charlie, if the administration is so upset about the tone, why not take up the challenge to have a series of debates that talk about the issues?

BLACK: Well, you know, Senator Kerry had a bad week last week. The American people began to see that he was running from his record and flip-flopping on issues. And some of them started to think, well, maybe he's not such a nice guy calling his opponents crooks and liars.

So yesterday, to try to cure that, he said, "Let's have a debate on the issues. And I would like to go to a baseball game with George Bush." Well, I try not to sit with crooks and liars at baseball games when I go. So he needs to apologize and take that...

MESERVE: But why not debate?

BLACK: Look, we're going to have debates. The presidential commission on debates of the two parties always arranges them. But if Senator Kerry will apologize for the crooks and liars accusation, I'll personally hand carry his debate proposal to the White House and make sure they consider it.

DONILON: But what you are hearing here is a clear evasion. The fact of the matter is what Senator Kerry said is this: let's have a monthly debate. Let's lift the tone of the campaign. Let's do what is in the tradition of Lincoln-Douglas. Let's do what Senator Kerry did with Governor Wells in 1996, which many people acknowledge was one of the finest campaigns and most detailed campaigns run in recent years.

One final point I want to make is this: bad weeks are these things. Bad weeks are when have you a story on the front page of The Washington Post saying the administration, the United States of America, has told Medicare officials not to produce real numbers about the cost of proposals going before the Congress.

Bad weeks are when you propose a manufacturing czar who himself has been involved in exporting jobs out of this country. Those are the kinds of things which we ought to be talking about. And If President Bush would take up Senator Kerry's challenge, we would have a monthly debate which would lift the tone of this campaign, and the American people would benefit.

MESERVE: We are hearing the charges and countercharges here that we have been hearing in the advertising and from the candidates. Some people are decrying this is negative campaigning. But isn't this exactly what the American publics? Does this keep them engaged in the political process?

BLACK: If you keep it on the issues, there are huge issues in this campaign. It should be decided on the big issues.

And, by the way, it was the White House and OMB who came out with the actual cost of the prescription drug bill, not this bureaucrat. He followed along later. But if Senator Kerry will decide which record he wants to run on, his 19-year record in the Senate, or his assertions during the campaign which are opposite his record, then we might debate him. But I expect we will in the fall anyhow.

MESERVE: You know, how do the Democrats counter these sorts of charges which the Republicans will be (UNINTELLIGIBLE) in the advertising of the flip-flopper and so forth when they have this tremendous bank roll? How do you possibly counter that?

DONILON: Well, first of all, it's good to have the true thing aside, which we do. Senator Kerry's record for 19-plus years have been very steady, very clear. His criticisms of the president's policies and the direction he has taken this country in are very clear. So that's one way we counter it.

The second way we counter it is this: is that on a day-to-day basis, the facts of the ground on this country are making one very clear case, which is that the direction that the president is leading this country in with respect to economic job loss, with respect to rising health care costs, and with respect to an exploding federal deficit, are making the case every day for us that change needs to come to America.

MESERVE: And I'm afraid we have to call the debate off right there. Thank you both for joining us here this morning.

DONILON: Thank you.

BLACK: Thank you.

MESERVE: Appreciate it. Enjoy your Sunday.

And coming up next, the Bush and Kerry campaigns pick their targets. Which states will be the most hotly contested come November? CNN's political analyst Ron Brownstein will give us the lay of the land.

Plus...

(BEGIN VIDEO CLIP)

JAY LENO, TALK SHOW HOST: You know, political experts are saying this is shaping up to be the ugliest, nasty election ever. Good.

(END VIDEO CLIP)

MESERVE: And we'll check in with late night comics who are definitely looking forward to this political year.

(COMMERCIAL BREAK)

MESERVE: With such a closely divided electorate, both presidential candidates are scrambling for every vote. Los Angeles Times reporter Ron Brownstein went inside both camps and got their wish lists of states, which ones they are targeting, and which ones they hope to pick off from the other side.

Welcome. Thanks for coming in, Ron.

RON BROWNSTEIN, LOS ANGELES TIMES: Hi, Jeanne.

MESERVE: So what are the lists? What are the battlegrounds in the view of the two candidates?

BROWNSTEIN: Well, a wish list is a very good way to describe it. If you ask the Kerry campaign, some of their internal first cuts at looking at the electorate, they have about 10 states that they put right on the fence as tossup. Five of them went for Bush last time that they are targeting, and five of them that Gore won that they have to defend.

The Gore states: Iowa, Minnesota, Wisconsin, New Mexico and Oregon. The targets that Bush won that they're going to focus on: Florida, Missouri, Ohio, West Virginia and Nevada.

The Bush camp largely agrees with that list, but adds two more to the tossup category that the Kerry camp now feel leans toward them. One of them the New Hampshire, that Bush carried. The other one is Pennsylvania.

So you start with those dozen states as at the center of the election. There are a few more targets on each side, Arizona and Arkansas for the Democrats, Michigan, Maine, Washington for the Republicans. But it's a pretty narrow concentrated list this far away from an election.

MESERVE: Do you see a significant shift from what were considered the battleground states in 2000?

BROWNSTEIN: Yes, I do. I think that there is a subtle but real shift away from some of the southern and border states that Al Gore, as a southern native, focused on toward two other targets.

One is the Southwest, where you have New Mexico, the Democrats have to defend; Nevada and Arizona they want to target. Even more important, the Midwest. You look at the list, you have Pennsylvania, you have Wisconsin, you have Iowa, you have Minnesota, and above all, you have Ohio, which I think both states today would probably say is the state most likely to decide the election. It's probably going to be in 2004 what Florida was in 2000.

MESERVE: And didn't the president travel out there just this week?

BROWNSTEIN: And John Kerry is there today in what is arguably his first general election visit.

Look, Florida is still a top target for both sides. But since 2000, Florida has gained over 200,000 jobs. It may have tilted it slightly toward the Republicans.

Ohio, on the other hand, has lost 225,000 jobs since George Bush took office. Nearly 170,000 manufacture jobs. And I think in both sides there's a sense that it has put that more within reach for Democrats and made it more competitive.

MESERVE: Is there anyone who John Kerry could put on the ticket that might help him in those battleground states that you've outlined?

BROWNSTEIN: That is a really good question. I mean, if there was someone who could absolutely help him in small-town, blue-collar Midwestern communities, that candidate I think would be a guaranteed winner.

John Edwards has some claim to that. Dick Gephardt has some claim to that. But I think that's going to be one of the things they're looking at over the next four months or so as they make their choice.

MESERVE: Yes, I bet they will be, if you believe that the vice presidential pick really has an impact. Do you think so?

BROWNSTEIN: Look, it can't hurt. I mean, I think -- look, if you can pick someone who could spend all of their time in those few states, traveling around on blue highways, smaller markets, especially rural communities, where George Bush has dominated in 2000 and looks very strong again in 2004, I think that could be an asset. The electoral college is so close. There's a lot of incentive to pick someone who can help you in a particular place, in contrast to someone who could send a broad national message, the way Gore did by picking Joe Lieberman in 2000.

MESERVE: OK. Ron Brownstein, thank as lot for coming in.

BROWNSTEIN: Thank you.

MESERVE: And we'll be watching.

There's a lot of talk about negative campaign ads and who is picking up the bill. Our Bill Schneider explains what all the fuss is about in our "Story Behind the Story."

And who is pulling ahead of the VP stakes? (UNINTELLIGIBLE) we'll read the morning grind tea leaves coming up next.

(COMMERCIAL BREAK)

COLLINS: I'm Heidi Collins at CNN Center. Here now are the headlines at this hour.

Spain shifts its focus. Al Qaeda, not the Basque terror group ETA, is now the primary focus of an investigation into Thursday's Madrid bombings that killed 200 people. A videotape has surfaced crediting Osama bin Laden's network for the attacks. The investigation could impact today's national election.

Some accuse Prime Minister Jose Maria Aznar's popular party of a cover-up about who was responsible for the blasts. The conservatives were favored to win before the latest revelations. The attacks in Spain are a warning to the world about vulnerability to terrorism. That's according to Secretary of State Colin Powell, who appeared on ABC's "This Week" program just a short time ago.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: I hope that Europeans will now see that no one is immune and no system of transportation is immune -- airplane, rail lines and the like. And I hope this will cause Europeans to rededicate themselves to going after terrorist organizations. Terrorist organizations, whether it is ETA or whether it's al Qaeda, are a threat to all civilized nations.

(END VIDEO CLIP)

COLLINS: Powell also called for international unity in the fight against terrorism.

A Fresno, California, man is charged with killing nine of his own offspring, some apparently conceived in incest. Police say Wesson had children with two of his daughters. Outside the home where the bodies were discovered, a makeshift memorial of stuffed animals, balloons and flowers. No word yet on the victim's cause of death. Wesson's bail is set at $9 million.

Activists plan a peace march later today to mark the one-year anniversary of the U.S. invasion in Iraq. The protests steps off in Dover, Delaware. And that's where the bodies of U.S. soldiers are prepared for burial. The march will end in Washington. The U.S. launched the war on March 19th.

For now, back to "INSIDE POLITICS SUNDAY."

MESERVE: And welcome back to INSIDE POLITICS Sunday.

Here with our Sunday cup of "The Morning Grind" is CNN political editor John Mercurio.

John, thanks a lot for coming in.

JOHN MERCURIO, CNN POLITICAL EDITOR: Good morning, Jeanne.

MESERVE: So Ron and I were talking a little bit about the veepstakes. How is John Kerry's search for a vice presidential partner coming along?

MERCURIO: I think at this point it's still pretty much major- league guessing game. I don't think we're really going to have any specific names for at least two or three weeks, probably longer than that. The only people who are actually kind of clued into this are Mary Beth Cahill, the campaign manager, probably Bob Shrum, John Kerry and Jim Johnson, his camp -- his -- sort of his search team captain.

What we do know is that Johnson was on the Hill and was around Washington this week talking to Nancy Pelosi, Tom Daschle, the leaders -- the Democratic leaders in the House and Senate. John Sweeney, who obviously endorsed Kerry, Fritz Holllings, one of his biggest -- one of Kerry's biggest backers in the South. Johnson's intent, I guess, is -- at this point, is just to consult and give the appearance of party unity, that he's trying to bring the party together, find out what people want in a vice president and sort of create what we're looking at right now, which is the kind of long list of candidates.

MESERVE: And who's on the list? What are you hearing about what some of those people are up to?

MERCURIO: Yes. Well, the list is obviously 50 or 60 people long. I won't go through the whole list.

But what we're hearing this week is that John Edwards obviously had a meeting on Thursday with John Kerry in Washington at the St. Regis Hotel. We all saw Edwards greet Kerry with the, "Hey, brother," little moniker. But I don't know if that worked with Kerry.

In the meeting, though -- and I'm told by some people who were there, some Kerry campaign people, Edwards' supporters, his financial donors, stood up and basically sounded as though they were tying their financial contributions to Kerry to Kerry's intention to support Edwards as VP, the idea being, you know, we'd really like to see John Edwards as VP, so take that into consideration.

Tom Vilsack, the governor of Iowa -- he's the chairman of the Democratic Governors Association -- he gave a scathing speech last night in Montana at their Mansfield Metcalf Dinner, sort of the annual party dinner -- scathing speech against Bush, talked about how Democrats can win red states. And the reason that we know about this speech -- it's Sunday morning, he give this speech late last night -- is that Vilsack has some people working in Washington, (UNINTELLIGIBLE). He's got some Democratic sort of cheerleaders working on his behalf on the vice-presidential race. And that's important, and that works for him.

The other name that we're hearing -- and this isn't a candidate so much for VP, but Bob Shrum. I mentioned him earlier. Is one of Kerry's closest advisers, he's also a very good friend of Jim Johnson. And he famously urged gore in 2000 to pick John Edwards, who was one of his clients in 1998. He's very influential in this process, as he is in most of the processes that go on in the Kerry administration. And one of his clients in 2000 was Bill Nelson, a senator from Florida who is now being talked about more closely. You can assume that Shrum has something to do with Bill Nelson's name being mentioned.

MESERVE: Howard Dean, big announcement Thursday. What's that all about?

MERCURIO: That's about Dean's intention to remain active in the Democratic process. He's going to be coming out with this group. It's sort of a grass-roots group. He said it's going to be focused on universal healthcare and campaign finance reform.

We know at this point he's going to launch it in Seattle -- Seattle, Washington -- and that he's going to go on a multi-city tour of San Francisco, New York -- obviously, Burlington, Vermont, his hometown -- and Washington, D.C. The group is going to be based in Burlington.

The parlor game right now in Washington, I think, is to try to figure out how closely his group, which we don't have the name of yet -- apparently the name hasn't been resolved -- how closely his group is going to be aligned with Joe Trippi, his former campaign manager's group, Change for America. Dean aides tell us that it's -- it -- that they do intend to work closely. And if you look at Joe Trippi's blog, changeforamerica.com, their focus is on beating Bush, but also on sort of maintaining a high profile for Dean in the future. So I think you're going to see them working closely.

MESERVE: The one-year anniversary of the Iraq war this week. It's likely to be a big topic on the campaign trail. How do you see that playing out?

MERCURIO: I actually see it probably playing out pretty well for Bush. Polls at this point show that people by, I guess a two-to-one margin, support Bush's handling of the war, at least the war on terrorism. And Bush knows that and so does his campaign and you're going to them highlight things. Every day this week there is an event that highlights foreign policy. I know on Tuesday and Wednesday, I think Bush is meeting with the foreign ministers -- Dutch and the Irish foreign ministers who were obviously big allies on the war in Iraq. You've got Rumsfeld, Condoleezza Rice and Colin Powell on the morning talk shows today, highlighting not so much the war in Iraq as much as the progress that they've made in Pakistan and in Libya.

The interesting thing, though, is on Wednesday, Dick Cheney is going to be giving a speech at the Ronald Reagan Presidential Library in California, sort of highlighting the differences between the Bush and Kerry foreign policy. Kerry's people tell me they're going to be responding to that with a speech of their own on -- later that day, talking about how much better Kerry's foreign policy would be. They also have surrogates like Wes Clark on Tuesday in Ohio giving a big foreign policy speech on Kerry's behalf.

MESERVE: We just have a second, give me the quick answer on where John Kerry is going on vacation, a decision fraught with political implications.

MERCURIO: Absolutely. It's undecided. But there's apparently three options right now: their home in Idaho -- they're in Sun Valley -- also possibility in Arizona or, of course, Florida.

MESERVE: OK. Great. Thanks a lot, John, for joining us.

For the best daily briefing on politics, don't miss "The Morning Grind." Go to www.cnn.com/grind for all the latest political news.

Campaign cheating or a fair and legal loophole? Election officials are looking into a Bush-Cheney campaign complaint that Democrats are not playing by the rules. It all has do with the way new anti-Bush attack ads are being funded.

Senior political analyst, Bill Schneider, has "The Story Behind the Story."

(BEGIN VIDEOTAPE)

KERRY: I'm an advocate of campaign finance reform.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Yes, he is. So were most Democrats, including this one.

WILLIAM CLINTON, PRESIDENT OF THE UNITED STATES: This legislation closes a special-interest loophole.

SCHNEIDER: Good news for Democrats: there's still a big loophole.

Republicans have been far more successful than democrats in raising so-called hard money, relatively small campaign contributions that are limited by law.

BEN GINSBERG, ATTORNEY, BUSH-CHENEY CAMPAIGN: We have over 600,000 donors that have given an average of $117 in contributions.

SCHNEIDER: In the past, Democrats have been able to match Republicans only in soft money, large contributions unlimited and unregulated, money John Kerry could use now.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: He's pretty much out of money. In the past, the political party would have stepped in with soft money and done the ads between now and the convention.

SCHNEIDER: The campaign finance reform passed in 2002 bans political parties from raising soft money.

SEN. JOHN MCCAIN (R), ARIZONA: There are efforts by political operators to redirect some of that money to groups that operate as political organizations under Section 527.

SCHNEIDER: Like the liberal Moveon.org Voter Fund, which ran this anti-Bush ad.

ANNOUNCER: George Bush wants to eliminate overtime pay...

SCHNEIDER: Critics argue that under the law, that ad should be paid for only by hard money, the kind Democrats have trouble raising.

GINSBERG: They're cheating by getting unlimited contributions in soft money from special-interest groups.

SCHNEIDER: The Democratic co-sponsor of campaign finance reform wants the Federal Elections Commission to close that loophole.

SEN. RUSS FEINGOLD (D), WISCONSIN: The FEC must not bless a new circumvention of the election laws so soon after we closed the last loophole it created.

SCHNEIDER: But some Democrats who once accused the GOP of blocking reform are now exploiting that loophole. They claim it levels the playing field.

HAROLD ICKES, DIRECTOR, THE MEDIA FUND: Oh, give me a sponge for the tears. The Republicans talking about -- we're going to have more money?

SCHNEIDER: So when the Bush campaign opened with this charge.

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

SCHNEIDER: The Kerry campaign had to return fire.

ANNOUNCER: John Kerry has never called for a $900 billion tax increase.

SCHNEIDER: But they can't afford to keep doing that for long. Some independent conservative groups have run ads, too, like this one against Howard Dean. But the Democrats now have to rely on independent liberal groups to carry the Kerry message.

(on camera): Democrats said they wanted to get unlimited soft money out of politics. Have they changed their minds?

Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

MESERVE: And it's all in the family on the campaign trail. Coming up next, Chris Heinz trades in his day job to stump for his stepdad full time. A candid interview up next.

(COMMERCIAL BREAK)

MESERVE: Campaigning for president can be a family event. Senator Kerry, for instance, is getting a helping hand from at least six family members: his wife, Teresa Heinz Kerry, his own two daughters, and his wife's three sons from her marriage to the late senator John Heinz.

CNN's Anderson Cooper spoke recently with Chris Heinz, Senator Kerry's stepson.

(BEGIN VIDEOTAPE)

CHRIS HEINZ, JOHN KERRY'S STEPSON: It was off the record. Regardless whether it was physically on the record or not, certainly I think that the GOP and the political operatives have a history of being more than aggressive.

ANDERSON COOPER, CNN ANCHOR: Is this just part of politics or do you think your stepdad really...?

HEINZ: And the president? I don't think he was referring to the president.

COOPER: And he's come out saying he wasn't, he was referring to referring to Republican attack dogs.

HEINZ: Right. And those are two different things. Both the president and my stepfather are professionals in that sense.

COOPER: Senator Kerry, he has been tough on President Bush, called it arrogant, inept, reckless. He said the president was playing dress-up on an aircraft carrier. Are you surprised at sort of the level of, or at least the war of words so early on in the campaign?

HEINZ: No. We just went through a Democratic primary. The level of anger towards this president in that group of voters is much more severe than the words that John used to describe the president's foreign policy.

COOPER: Do you find yourself being called upon to do things that surprise you? I know one point you were called to do your Arnold Schwarzenegger impression.

HEINZ: Yes. I've been called upon not to do it anymore.

COOPER: That means I can't ask you to do it.

HEINZ: Hey. Just being asked that is surprising enough.

COOPER: I read that your mom had some concerns about the campaign. She is now out on the campaign trail. Did you talk about that with her? What were those conversations like?

HEINZ: Well, we've had a few surreal conversations as a family. It is just an intimidating process. We've been talking about the press intensity and I would be lying to say we weren't happy normal people before who didn't think we were jumping off into a big chasm.

COOPER: Your late father, Senator John Heinz, was Republican. Were you Republican before? Where do you see yourself now in the political realm?

HEINZ: I admit I'm a Democrat. If you would have asked me probably until the time I was 18 when my father died, I probably would have answered I was Republican. And I' say over the last 12, 13 years from what I've seen, the Republican party shifted (UNINTELLIGIBLE).

COOPER: You've grown up with politics all your life, grown up in a political family. I understand that when you were younger, I think I read in the "Times," you even went to Camp David with the first President Bush. What was that like?

HEINZ: It was great. I went there with my brother and my father. Just like anything, you look around with wide eyes. It was a mystical place, helicopters and marines everywhere. It was pretty wild.

COOPER: Do you want to get back to Camp David some time?

HEINZ: Yes. I would like to earn John the right to take us to Camp David. I'm working hard for that. Otherwise, not really.

COOPER: We'll leave it there. Thanks.

(END VIDEOTAPE)

MESERVE: Well, if you were too tired to stay up for the late- night talk shows you won't miss a thing, because we've compiled the funniest hits of the week. Late-night laughs coming up.

(BEGIN VIDEOTAPE)

ANNOUNCER: ..has never called for a $900 million tax increase.

ANNOUNCER: John Kerry. Wrong on taxes...

(END VIDEOTAPE)

MESERVE: Plus, the gloves are coming off, but our panel has plenty of experience deflecting negative ads. We'll get their advice for the candidates next.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): There's just over one month to file your taxes. On this day in 1923, Warren G. Harding became the first U.S. president to file an income tax return. His tax bill that year amounted to nearly $18,000.

Fast forward to current President George W. Bush, who paid more than $258,000 in federal income taxes last year.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

MESERVE: Those nasty issue ads started surfacing this past week on television, prompting allegations of negative campaigning and setting the stage for the fall slugfest.

But the underlying questions about the economy, jobs and leadership are certainly important topics, too. Here to discuss those issues and more are Democratic strategist and CNN political analyst Donna Brazile, and Republican strategist and former deputy communications director for the Republican National Committee, Cheri Jacobus.

Thank you both for coming in.

CHERI JACOBUS, GOP STRATEGIST: thank you.

MESERVE: Cheri, let me start with you. A lot of questions why these ads have started so soon from the White House. And some Republican strategists being quoted anonymously, many of them, as saying this reflects just how worried the White House is about this election. Worried? JACOBUS: Well, I don't -- I think they're taking it seriously, of course. They've said from the beginning they expect this to be a close race, and they're taking it seriously. No one is being cocky or taking anything for granted.

But the schedule is really set by Terry McAuliffe and the Democrats. They decided that they wanted to have the nominee early and push up their primaries and caucuses to make sure they had a nominee. I think they're a little bit concerned now that they might not have the money to back up that nominee.

But it only makes that the president and the White House would start -- as long as the Democrats have decided that the race starts now, then certainly the White House is, considering the fact they've been attacked for months and months.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well..

MESERVE: Go ahead, Donna.

BRAZILE: Well, if truth be told, they're frantic. They're running scared. They've seen the poll numbers. Voters are concerned about this president's record on the economy, on health care.

They are also very worried that George Bush just doesn't get it. He has a lot of explaining to do. He 's been in office for three years and he has really no record to run on. That's why the Bush-Cheney campaign are running negative ads. And it won't work. It will backfire and it will not work.

JACOBUS: The president's record is pretty solid. Everybody knows exactly what he's done for the past three years. But he has had to withstand a barrage of $6.3 million of attacks on the part of the Democrats. John Kerry has spent millions of dollars attacking him, as all these Democrats have. They've run -- you know, he's run 17,000 ads...

BRAZILE: They've attacked his record. His records on jobs, on the economy, on health care...

(CROSSTALK)

JACOBUS: ...liars and crooks, and we've had moveon.org put this ad up on the Internet they said was an accident, comparing him to Hitler and the Nazis.

So I think that it's perfectly within the rights and appropriate for the White House to respond and start looking at some of the things Kerry has said.

(CROSSTALK)

BRAZILE: The White House -- normally a president, a sitting president, stays above the fray. Don't get into the mud and in the ditch and throw -- and throw...

(CROSSTALK)

MESERVE: He's certainly come out of the Rose Garden, however. It's certainly a change in tactics from previous presidents.

JACOBUS: And, you know -- and it depends who you talk to, because a lot of republicans have said, Well, perhaps he should have done this earlier or responded sooner. So it really depends who you talk to.

MESERVE: Well, what do you think? Did he wait too long to engage?

JACOBUS: I personally would have liked to have seen him to respond sooner. We did see his numbers dip down because it was all the Democrats attacking him at a very, very nasty level that's pretty much unprecedented. So I'm happy to see the campaign coming out and responding and sticking to the issues by trying to put a dollar figure on some of the Kerry proposals.

I find it interesting that the Kerry campaign responded with an ad that didn't put a dollar figure on his own proposals. So I think that's very telling.

(CROSSTALK)

BRAZILE: Well, it's amazing that the president would put a dollar figure on John Kerry's plan when John Kerry has not put forward a budget plan.

Look, this is an incumbent president. He must run on his record, and the challengers must challenge his record.

The other thing is that his poll numbers are dipping because the American people have lost confidence in his ability to lead on jobs, the economy and health care.

(CROSSTALK)

JACOBUS: And we also have -- we also have heard this week from Alan Greenspan that the jobs are going to start coming back. So I expect in the coming months, Donna, you and other Democrats aren't going to be talking with jobs anymore. You'll have to find another issue.

BRAZILE: We've been hearing that the jobs are coming, the jobs are coming. Dick Cheney is saying the jobs are coming. The president couldn't even keep his signature on the economic report because the jobs are not coming.

(CROSSTALK)

JACOBUS: In a recovering economy, jobs are the last, lagging indicator. It's sad. It's painful. But we do know they will be coming back.

MESERVE: The two of you aren't going to agree on that issue, so let me move on, if I could.

There was mention of the now infamous tape of John Kerry referring to liars. Did he go too far, Donna? Was that a mistake?

BRAZILE: Well, I think what he was referring to is the Republican attack machines that lies, misleads, deceives and, of course, you know, outright destroyed the character of Democrats.

Look, even if...

(CROSSTALK)

JACOBUS: He should name names. He should say exactly where the crooks are and what they're lying about. And that's not what happened, Donna.

(CROSSTALK)

BRAZILE: ...for going against the president's tax cut plans, that's a part of the Republican attack machine. When you tag John McCain the way the Republicans did in 2000, even criticizing his wife, that's the Republican attack machine.

(CROSSTALK)

JACOBUS: ...they're trying to figure out what John Kerry meant because John Kerry has not said -- he called -- he said this amorphous group of Republicans -- he won't say who they are -- they're liars and they're crooks. He won't say why. He was caught off-mike and now his people are standing by those.

(CROSSTALK)

JACOBUS: And I think that this is going to hurt his fund-raising because rank-and-file Democrats that might otherwise write a check, don't like to see this in their candidate. They don't like that the first press conference he has on the Hill with Democrat leaders is to defend those statements.

It's nasty business. He's showing he's not quite ready for primetime.

BRAZILE: Well, this is a president who, in 2000, used a word that I can't even use on Sunday morning when he referred to a New York Time reporter as a major league (UNINTELLIGIBLE).

JACOBUS: And didn't say it to voters. John Kerry actually said this to voters and then stood by his statements. And a senior spokesman said he would have said this on and off mike.

The president, when he was caught saying it privately to his running mate, said, you know, I shouldn't have said that. John Kerry seems to be rather proud of his statements.

(CROSSTALK)

BRAZILE: He should not apologize.

MESERVE: I want to ask you about the money situation.

Here, John Kerry has had a pretty wide-open field here for a while, he and the other Democrats hammering President Bush on his policies. Now, the Republicans are up and running, running those ads. They've got one heck of lot more money.

BRAZILE: Yes.

MESERVE: And the polls at the moment show a mixed picture.

BRAZILE: Absolutely.

MESERVE: Some show Kerry ahead, one shows Bush ahead in a match- up between the two.

How is Kerry going to withstand the onslaught?

BRAZILE: Well, easy. Because in every election cycle -- and, Cheri, you would agree with this -- that Republicans start off with more money and cash on hand than Democrats.

The way you make up the fact that the Bush team has a huge slush fund is to start campaigning on ideas. John Kerry needs to go out there, tell the American people what type of country he will lead and his policies. That's how you make it up. You give people something to vote for.

MESERVE: And we have to leave it there. I'm sorry. Donna, Cheri, thank you both for coming in. It was a lot of fun.

And a Sunday brunch edition of late-night laughs. We're serving up the best campaign comedy of the week.

(COMMERCIAL BREAK)

MESERVE: And we have this breaking news to report. Eight people killed in two explosions in the Israeli port of Ashdod. Israeli TV says it apparently was a double suicide bombing. CNN is on its way to the scene. We'll have more information and we'll bring it to you soon.

INSIDE POLITICS SUNDAY continues in just a moment.

(COMMERCIAL BREAK)

MESERVE: What would politics be without a little humor thrown in? Here now, a look at some of the late-night laughs of his week.

(BEGIN VIDEOTAPE)

JAY LENO, HOST, "THE TONIGHT SHOW": You know, the political experts are saying this election is shaping up to be the ugliest, nastiest election ever. Good.

UNIDENTIFIED MALE: Election season is upon us and if the war on Iraq, the budget deficit or the future of Social Security aren't enough to inspire you to vote, maybe a fancy truck will get you off your ass.

Say hello to Reggie, the registration rig. That's what the Republican National Committee is calling its 18-wheel voter registration center. The democrats just have the old please-help-us mobile.

JON STEWART, HOST, "THE DAILY SHOW": The president and the GOP have drawn fire for the ad, which includes footage of not only the destroyed Twin Towers, but the image of a dead firefighter being brought out of the rubble. It's arguably the most disturbing image ever shown in a campaign commercial, eclipsing even Bob Dole's infamous talking belly button ad.

LENO: I know you saw John Kerry visiting Capitol Hill yesterday. You know who I think likes Kerry a little too much? Ted Kennedy. I'm not mistaken -- did you see this yesterday? Now is it me or is Ted Kennedy checking out John Kerry's rear-end? Look at this. No, watch. No. Look. You watch. Now what is that all about?

(END VIDEOTAPE)

MESERVE: And thanks for joining us for INSIDE POLITICS SUNDAY.

Coming up in one half hour, a special RELIABLE SOURCES. Howard Kurtz takes on former New York Times reporter Jayson Blair about his new book, "Burning Down My Master's House."

And at noon Eastern, on "LATE EDITION," Wolf Blitzer interviews Defense Secretary Donald Rumsfeld.

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