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Inside Politics

Death and Taxes; Interview With Author John Fox

Aired April 15, 2004 - 15:30   ET

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

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


(BEGIN VIDEOTAPE)
ANNOUNCER: The threat in Iraq and the presidential race.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I think we deserve a president of the United States who knows how to get it right the first time.

ANNOUNCER: But what would and could John Kerry do differently?

It's April 15. Do you know where Bush and Kerry stand on taxes? We'll reveal 10 tax questions the candidates don't want you to ask.

Stop the clock. The 2004 campaign pits the timely versus the tardy.

(END VIDEOTAPE)

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

CANDY CROWLEY, HOST: Thanks for joining us. Judy is off today. I'm Candy Crowley.

Politicians can be a predictable lot. On tax filing day they talk taxes. But in the two weeks leading up to this April 15, 90 Americans have died in Iraq, making that a subject that cannot be ignored.

During a Tax Day event in Iowa, President Bush talked again about tough times in Iraq. Our senior White House correspondent, John King, traveled with the president to Des Moines.

John, I've got to believe that even a month ago this was not the speech the president was prepared to give at this moment. How did he mesh these two messages?

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, certainly, he tends to mention Iraq in just about every speech. But he dedicated quite a bit of time to it today, Candy. And you're exactly right, the president noting the tough times, as he called them, of recent weeks in Iraq, the tough times for U.S. servicemen on the ground, the tough times for the American people who have to see those graphic pictures on television.

Also, remember, in this state, of course, the Democrats were swarming Iowa in the early months of this year, and one constant theme of the Democratic campaign was either opposition to the war itself or opposition to the president's handling of the post-war situation in Iraq. So the president saying that, yes, these were tough times, but he also said the United Nations is now more involved. He voiced confidence there would be a plan in place relatively soon.

He also mentioned a story told to him just this morning as he arrived here by a Republican congressman from Iowa who recently had to attend a Marine's funeral. The president said it is critical that that Marine and others who have fallen in Iraq not die in vain.

So the president even choking up at that point, Candy. He knows that, yes, he wanted to talk the economy today, but Iraq perhaps even much more so than the economy the driving political issue in this campaign right now -- Candy.

CROWLEY: John, you know, I have to ask about Osama bin Laden. We have this New tape. The CIA says it's probably him; Colin Powell told Polish interviews (ph), apparently, yes, and it is bin Laden.

This is the man that almost four years ago the president said he wanted dead or alive. Politically, how big a problem is his continued existence and even kind of trying to make deals with Europe a problem for the White House?

KING: It's an interesting question because, on the one hand, the Bush political team would tell you that the American people give their greatest trust to the president when it comes to leading the war on terrorism. The president's spokesman, Scott McClellan, did tell reporters on the way out here that the CIA had determined to the best of its an ability that is the voice of Osama bin Laden.

Scott McClellan saying it is a reminder we are still at war against terrorism. Also, he said a reminder of the evil tactics that the terrorists will use. Now, Scott McClellan voicing confidence the coalition will hold together.

So, on the one hand, a reflection again that this president for 31 months has been leading the United States in the war against al Qaeda, in the war against terrorism. But also, as the election approaches, a reminder that 31 months after those attacks, the man that the United States says is responsible for them is not only still at large, but every now and then through these audiotapes essentially taunting the United States -- Candy.

CROWLEY: So Tax Day, and let's kind of go to the original purpose for going to Iowa. Tax cuts always a part of this president's plan during his campaign and on. Any New messages today?

KING: No New message, but a reinforcement. And as you well remember, four years ago -- and it was Governor Bush and candidate Bush -- it was here in Iowa that he first unveiled his tax cut proposal. He came here on Tax Day two years ago.

The president making remarks here, saying that nobody likes people from Washington on Tax Day. But he believes that the pain, if you will, is a bit softer. He was introduced by Senator Chuck Grassly, a very popular Republican Senator here as the tax cutter in chief. And the president saying, because of his tax cuts, two times now through the Congress the president says they helped pull the economy out of recession and, in Mr. Bush's view, now contributing to more robust job growth.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Tax Day is something most people really don't look forward to. But this year, it's a little better because of the tax relief we delivered. And the economy is stronger for it.

(END VIDEO CLIP)

KING: The administration releasing some New numbers to make a case. It says the average refund back in 2001 was about $1,750. Says the average refund this year as the tax returns still flow in is somewhere around $2,100. And, Candy the president also making the case that the worst thing you could do is raise taxes now for the economy.

Senator Kerry, of course, has proposed scaling back the biggest bracket, wealthy tax cuts given to wealthy Americans under the Bush plan. And no accident at all the president is making that case here in Iowa.

Again, he first released his tax plan four years ago. He lost this state by just about 4,100 votes. It is a small state, but still viewed as a critical battleground that the president hopes very much he can win this November. Today, his 10th trip to Iowa since becoming president -- Candy.

CROWLEY: Thanks so much, senior White House correspondent John King. We appreciate it.

KING: Thank you.

CROWLEY: John Kerry delivered his Tax Day message right here in the nation's capital. During a town hall event at Howard University, Kerry argued his plan would give middle class Americans $225 billion more in tax cuts than they've gotten under President Bush.

Later, the discussion turned to Iraq. A student asked Kerry if he agrees with those who compare Iraq to the war that Kerry fought in.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: It's not Vietnam yet. And I underscore "yet." And there are a lot of differences. A lot of differences. But I think this administration is making mistakes of judgment and stubbornness that increasingly push it towards the potential of developing into a much more difficult situation.

(END VIDEO CLIP) CROWLEY: Beyond Kerry's tough critique of the president's policy, what kind of action would he take in Iraq? Our senior political analyst, Bill Schneider, looks at what Kerry has said and what he would do.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Listen to John Kerry and you get the impression he has vast differences with President Bush on Iraq.

KERRY: I believe the president made a terrible mistake to take us to the war the way he did.

SCHNEIDER: But what exactly would he do differently? Yesterday he was confronted with that question.

UNIDENTIFIED MALE: You may fool some of the Americans that you are different from George Bush on this war. But you're not fooling most of the world.

SCHNEIDER: Kerry's response later that day was cautious.

KERRY: It is important not just to cut and run.

SCHNEIDER: He says he would send more troops if they're needed.

KERRY: If the generals and those in charge need more troops, they get more troops.

SCHNEIDER: So does President Bush.

BUSH: If additional forces are needed, I will send them.

SCHNEIDER: Kerry sees American occupation as the problem.

KERRY: If you were to ask any student at college, first year of foreign policy, do you think it's a good idea for the United States of America almost alone to occupy a Middle East herniation, what do you think the answer would be?

AUDIENCE: No.

KERRY: But that's precisely what we're doing.

SCHNEIDER: President Bush sees the occupation as a problem, too.

BUSH: They're not happy they're occupied. I wouldn't be happy if I were occupied either.

SCHNEIDER: That's why Bush repeated his commitment to end the occupation on June 30, a date certain.

BUSH: Iraqis do not support an indefinite occupation. And neither does America.

SCHNEIDER: Kerry's big complaint: the U.S. is doing this on its own.

KERRY: Why is the United States of America almost alone in carrying this burden and the risks which the world has a stake in?

SCHNEIDER: He wants the United Nations to take charge of the political process in Iraq.

KERRY: The course that I have proposed is to turn over to the United Nations the full responsibility for the transformation of the government and for the reconstruction.

SCHNEIDER: But President Bush is not exactly hostile to the idea.

BUSH: I think that one of the things you're seeing is more involvement by the United Nations in terms of the political process. That's helpful.

SCHNEIDER: It's not just the occupation that alienates Iraqis. It's also America's policy towards Israel. This week, Bush backed Ariel Sharon. Even on that, Kerry did not beg to differ.

KERRY: And I agree with the decision today with respect to the withdrawal.

(END VIDEOTAPE)

SCHNEIDER: Here's a difference between Kerry and Bush: Kerry says his goal is a stable Iraq, not necessarily a fully democratic Iraq. Now, is that a basic difference? Sounds more like a nuance -- Candy.

CROWLEY: We know some people that don't do nuance, don't we?

SCHNEIDER: No.

CROWLEY: Thanks so much, Bill Schneider. Appreciate it.

The Bush camp is resurrecting an ad charging Kerry is "wrong on defense." It's a slightly modified version of the spot that includes Kerry's comment that he voted for $87 billion in troop funding before he voted against it. The ad begins airing tomorrow on national cable outlets and some local stations.

Two New polls lead the headlines in "Campaign News Daily." The race is very tight in the battleground of Oregon and close in New Jersey, as well.

The University of Oregon survey gives President Bush a two-point edge over Kerry, 47 percent to 45, well within the margin of error. In New Jersey, Kerry and Bush are one point apart in the Garden State, according to a survey by Fairleigh Dickinson University. President Bush lost New Jersey to Al Gore by 16 percentage points just four years ago.

Howard Dean is lending his support to an upcoming abortion rights march here in Washington. Today, Dean sent a video message to the 650,000 people on his e-mail list. Abortion rights activists Kate Michaelman (ph) joins Dean on the video.

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: George Bush and his allies around the country are putting a woman's right to choose at risk. But you have the power to keep it safe. When we stand up together for what's right, we can make Washington take notice.

(END VIDEO CLIP)

CROWLEY: The video is more than 90 seconds long. The march is scheduled for the National Mall a week from Sunday.

Former Democratic presidential hopeful John Edwards is out on the campaign trail again, tending a luncheon for Washington Democratic senator, Patty Murray. Edwards is an oft-mentioned name in the buzz surrounding the Kerry campaign's ongoing search for a vice presidential running mate. Edwards, perhaps not coincidentally, is also expected to attend Kerry fundraisers next week in Florida.

John Kerry has been the big man on campus in recent days. Still ahead, how is the senator playing with the college crowd? We'll have the results of a new poll and a live report.

Up next, with all the talk about taxes today, what questions would make the candidates clam up? We'll ask an author for his top 10 list.

Plus, will grim images from Iraq tilt the balance on Election Day? Jeff Greenfield shares his snapshot of the race.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

CROWLEY: If you are not aware that today is Tax Day, now you know, and now would be a good time to start looking for that 1040. For the rest of us, author and veteran tax attorney John Fox has written a book about the U.S. income tax system and the presidential campaign. It's titled "Ten Questions the Candidates Don't Want You to Ask." John Fox is with me from Hartford, Connecticut.

Thank you so much for joining us here. What I'd like to do -- and I speed-read your book, and the sense I get, of course, is that you think that the tax system is unfair. And what I'd like to do is sort of put up for our viewers some of these questions and have you tell us what's unfair about the current law.

JOHN FOX, AUTHOR, "TEN QUESTIONS THE CANDIDATES DON'T WANT YOU TO ASK": Sure, happy to.

CROWLEY: The first one is about the deductions that homeowners can get on an equity loan up to $100,000. You think we should ask politicians why is that in place. FOX: Well, it really doesn't make any sense. Years ago, Congress said to the two-thirds of all taxpayers who don't itemize their deductions that they simply can't get any deduction for their consumption loans. So if they have to pay very high interest on their consumption loans, they don't get any deduction.

We say to homeowners who itemize, you get to deduct the interest on up to $100,000 in loans. I don't think that makes any sense. I think we ought to ask the candidates about that.

CROWLEY: So the second question that you would ask them is about tax credits for college tuition. Tell us about that one.

FOX: Well, again, Congress, through the tax law, said that you can get credits for going to college. A credit of $1,500 for the Hope credit, $2,000 for the lifetime credit. But if you don't owe taxes, you don't get the credit. And the people who don't owe taxes often are the people who are at the lower end of the income scale.

So they're double losers. In fact, the tuitions and fees have gone up in light of the credit. They can't afford to go to college. I think we ought to say to the candidates, if we're going to help other people go to college, don't you think that we should let these credits extend to lower income families?

CROWLEY: Number three, childcare tax credits. What's wrong with that setup? That's a pretty popular one.

FOX: Which?

CROWLEY: Childcare tax credits.

FOX: Oh, yes. Well, the childcare tax credits are interesting.

We say to executives earning millions of dollars that they can get a credit against their taxes of $600 if they have one child, $1,200 if they have two children. But we say to lower income people who don't owe taxes and for whom childcare is the most expensive thing, we're not going to help you with our childcare at all. These are people off of welfare.

So I say to the candidate, if you're going to help the executives with their childcare costs, how about helping the people who need the assistance most.

CROWLEY: Now, let me get into Social Security, which is also a touchy issue. There is a cap now on taxes you pay against Social Security on your income. What's wrong with that?

FOX: Well, it's very interesting. The question really is, how are we going to teal deal with the long-term insolvency of Social Security? We know the trust fund is going to be bankrupt in the year 2042. Alan Greenspan says, well, let's cut the benefits of Social Security beneficiaries.

Well, for most of them, their Social Security benefits are what they live on. So I say, why not raise the threshold? As you know, the Social Security taxes end at about $88,000 this year. Most people pay the full Social Security tax on all their wages. Why not extend the tax to higher wages?

CROWLEY: And this one I have to say touched a nerve with the single people in the office. But this has to do with the poverty level and single people who don't make enough to take them love the poverty level.

FOX: Yes. It's really incredible that if you view the single person the way Congress taxes them, you might think they're almost un- American.

The poverty threshold for a single person is $9,600. That's really low. But their tax threshold, they'll begin to pay taxes once their income exceeds $9,300.

I mean, just take $9,600. After Social Security and Medicare taxes, they have $740 a month to live on. They can't live on that.

I say to the candidates, do you think that's fair? Don't you think you should allow the single person enough income to pay their basic expenses before you start exacting an income tax from them.

CROWLEY: John Fox author of "Ten Tax Questions the Candidates Don't Want You to Ask." I'll ask some of them on the campaign trail for you. Thanks so much.

FOX: Thank you.

CROWLEY: The so-called experts say events will decide the winner on Election Day. But our Jeff Greenfield asks, what does that really mean? A closer look at where we live and what we believe and how those factors could influence the vote come November.

(COMMERCIAL BREAK)

CROWLEY: The nation's economy and the war on terror are obviously hot buttons in the presidential race. But how much will they influence voters on November 2? Our senior analyst, Jeff Greenfield, shares his thoughts on the big issues and the divided electorate.

(BEGIN VIDEOTAPE)

JEFF GREENFIELD, CNN SR. ANALYST: One of the constant refrains of this election is that events will determine the outcome. Now, at first this sounds stupifyingly obvious, sort of like television is a visual medium. But there is more to it than that. By saying that the economy or Iraq might shape the outcome, we're also saying something about how close and how polarized this race already is.

(voice-over): Just about every poll number tells us this is a virtual dead heat right now. But why? Here's one big reason: both President Bush and Senator Kerry enjoy enormous support from within their own parties. Nearly nine in 10 Democrats say they back Kerry; more than nine in 10 Republicans say they're with the president. What's more, Americans have grown more and more likely to live among people who live the way they do.

According to one recent study analyzed by Bill Bishop in the Austin American Statesman, the United States has become sharply polarized geographically in the last 30 years or so. Back in 1976, about 26.8 percent of American voters lived in so-called landslide counties. Those are counties where a presidential candidate got 60 percent or more of the vote.

By 2000, the proportion of landslide counties had nearly doubled to 45.3 percent. That, in turn, has helped make our politics more poll polarized, as well. On average, 95 percent of all House incumbents are re-elected. Indeed, by some estimates, barely 5 percent of House seats are even competitive.

The result? Less and less bipartisanship, more and more emphasis on turning out the base with campaign appeals that increasingly paint the other guy as not just wrong, but as dangerous. Maybe even evil.

RICHARD CLARKE, FMR. COUNTERTERRORISM ADVISER: There was an al Qaeda. No one had ever said that.

GREENFIELD: And there's another political impact. More and more, voters see things through a prism of pre-existing beliefs and preferences. Most of us have made up our minds long ago, and so we process what we see and hear through that prism.

The president is either a strong, clear-minded leader, or a dangerously misguided simpleton. John Kerry is either the commonsense alternative or a tax-and-spend flip-flopper. What Condi Rice says about September 11 is either a breath of fresh air or a fog of evasion.

And this is what makes these images out of Iraq so potentially significant. They may have the power to change the minds of that relative handful of voters not fully committed yet. Those who say, back the president on going to war, but are unsure about the cost.

They are pictures that are hard to spin. And even if they obscure signs of progress elsewhere in Iraq, their power is undeniable.

(on camera): In the coming weeks and months, there may be other pictures from Iraq of stability, progress, well being. For now, however, the images coming out of Iraq do pose a real danger to the president because they're precisely the kind of information that can move the relative handful of undecided voters in this very evenly divided race.

Jeff Greenfield, CNN, New York.

(END VIDEOTAPE) CROWLEY: More INSIDE POLITICS at the top of the hour, including a look at John Kerry's New York fundraisers. President Bush may be the champ when it comes to campaign cash, but Senator Kerry had a record-setting haul through the Big Apple.

Also, two reviews of Tuesday's primetime news conference. Bay Buchanan and Donna Brazile analyze the president's performance.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: The campus campaign.

KERRY: A lot of late nights and a lot of cramming, a lot of warm beer, cold pizza. It's just like being in college, folks.

ANNOUNCER: Is John Kerry winning the battle for the college student vote?

On tax deadline day, we ask, are those forms too complicated?

JOHN SNOW, TREASURY SECRETARY: It is too complex, and few people are able to work their way through it without a lot of difficulty and anguish.

ANNOUNCER: Treasury Secretary John Snow is our guest.

UNIDENTIFIED MALE: George W. Bush is assigned the task of being president.

ANNOUNCER: Will the Donald fire the presidential apprentice? We'll log on to an anti-Bush Web ad.

(END VIDEOTAPE)

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

CROWLEY: Welcome back. I'm Candy Crowley sitting in for Judy today.

In an era when American voters are so closely and often bitterly divided, there may be more of a payoff than ever for candidates who reach out to steal impressionable first-time voters. John Kerry's appearance at Washington's Howard University today is part of his continuing tour of colleges around the country.

CNN's Kelly Wallace joins with us more on Kerry and the state of his campus appeal -- Kelly.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Well, Candy, what's really interesting is a new national poll has come out today by Harvard University's Institute of Politics. And what it finds is that support on college campuses for President Bush has gone down significantly over the past six months, as support for the war in Iraq has gone down significantly.

And what is all translating into is when you ask college students who would they vote for in November, 48 percent are saying they would vote for John Kerry, 38 percent are saying they would vote for George W. Bush and 5 percent are saying they would go for Ralph Nader.

There's another interesting thing going on though. When you ask college students are they Democrat or Republican. Well, 41 percent say they are independent. So more college students are saying they're independents than describing themselves as Democrat or Republican.

And as you said, John Kerry is doing what he can to reach out to these college students. He's on Howard University campus today. He's in the midst of a college tour this week while the Republicans are doing what they can to reach out to college students.

We had Ed Gillespie, the Republican party chair, not too long ago taking what the Republicans call "Reggie the Registration Rig," yep, that's what it's called. And he took that to Times Square and MTV again to try to register college voters and get them to vote Republican.

We saw a graphic at the top of this report. The big question is, will these college students go to the polls? Well if you look at this poll that was just conducted, 62 percent say they are following the presidential campaign very closely. And that same number, 62 percent, Candy, say they will definitely be voting in November...

CROWLEY: Sorry, we've got to interrupt Kelly and go to the State Department. Colin Powell is talking.

(INTERRUPTED BY LIVE EVENT)

CROWLEY: That is Secretary of State Colin Powell, as we said, defending the president's statement yesterday that the U.S. would indeed support a proposal by Israel to pull out of Gaza completely, but stay for the most part in the West Bank.

Colin Powell calling that merely a reflection of reality on the ground in the Mideast and saying that it was not by any means a done deal, simply that the president was reflecting what other negotiators have also found out, but the president was not in any case trying to dictate a settlement.

Also, according to Colin Powell, the intelligence officers, CIA and such, do believe that the voice on that tape today is that of it Osama bin Laden.

Now, before I so rudely interrupted her, Kelly Wallace was telling us about John Kerry's appeal to college students. Forgive me and go ahead.

WALLACE: Well, Candy, you know the best way to wrap up is really one of the other surprising findings of this new poll that we were talking about released by Harvard University, that did a survey of college students around the country. And it found that again, 62 percent saying they would definitely be voting, and that is important because obviously, this is an important voting block for John Kerry and for President Bush.

But, Candy, what is also very interesting, it appears that there's almost a new demographic block here when it comes to college students because some 52 or 53 percent of those students say they're not a traditional liberal or a traditional conservative.

They're describing themselves as centrists, either religious or secular centrists. And saying their main issues are social issues like gay marriage, affirmative action, the role that religion should play in government.

So we could be seeing is the emergence of a new swing voting block when it comes to college students and how both President Bush and John Kerry might try to appeal to them in the months ahead -- Candy.

CROWLEY: Thanks so much. Young voters, as they are want to do, changing the political scene. Thanks so much, Kelly Wallace. We appreciate it.

Kerry's campaign bank account is considerably fatter after serious partying in New York. Young celebrities such as actress Natalie Portman joined Kerry at the Crowbar Nightclub. At that event and several others he raised a total of $6.5 million for his campaign and another $1.5 million for the party. That is a one-day record for any presidential candidate.

Kerry went on to raise another $2.4 million at a party breakfast this morning.

This election year was supposed to be different in at least one way -- those huge unregulated contributions to political parties known in the fund raising trade as "soft money" are supposed to be banned. But Republican critics argue the Democrats are not playing by the rules. Bruce Morton looks at what the fuss is all about.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I would love to say to them it, hey, you want campaign finance reform. I'll show you what real reform is.

BRUCE MORTON CNN NATIONAL CORRESPONDENT (voice-over): Money, of course, is the mother's milk of politics. The Federal Elections Commission is holding hearings this week to try to decide which candidates can drink which kind of milk.

AD ANNOUNCER: John Kerry's record on the economy? Troubling. He opposed tax relief for married couples 22 times.

MORTON: A Bush ad, paid for by the Bush campaign. Under the McCain/Feingold Campaign Finance Reform Act, it has to be paid for with hard money: limited contributions from individuals and committees. AD ANNOUNCER: The issue is, middle class tax cuts. John Kerry voted to eliminate the marriage penalty and for a child tax credit.

MORTON: This ad is for John Kerry but it was paid for by an independent group called The Media Fund, a 527 organization so-called because that's the part of the tax law that covers it. These independent groups are allowed to use soft money, unlimited big bucks from corporations, unions, whatever. They say hey, freedom of speech.

UNIDENTIFIED FEMALE: The average MoveOn member contributing to an ad is putting in $60. These are regular citizens that wanted to be heard. I mean, it's really very exciting that we have the regular public getting involved in the political dialogue. It would be tragic to shut that down now.

MORTON: The critics who want the FEC To change the rules, say wait a minute, one set of rules for everyone. Hard money only.

Larry Noble's nonpartisan group studies money and politics.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: Right now the FEC is faced with a massive evasion of the law and they really need to take action on it.

MORTON (on camera): And say to all these guys, hard money, folks.

NOBLE: Say to all these guys, hard money. You're involved in trying to defeat Bush. Or if there are committees on the other side, you're involved in trying to defeat Kerry, you have to use hard money.

MORTON (voice-over): Does it matter? Yes. Look at the numbers. Between April 5 and 11, the Bush campaign, hard money, sent $4.7 million on ads. The Kerry campaign, not as well off, spent $1.46 million, hard money again.

But the independent pro-Kerry groups spent $3.85 million, soft money. So the Kerry forces actually outspent the Bush campaign. Could they do that if they had to use hard money? Almost certainly not.

(on camera): The commission won't vote on any proposed changes until mid-May. It does not have a reputation for decisive action and many here think it will end up doing nothing.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

CROWLEY: Democratic Congressman Charles Rangle of New York said today the deaths of low income Americans serving in Iraq amount to what he calls a, quote, "death tax."

In a speech at the National Press Club, Rangle argued that the poor are enticed to join the armed forces by recruitment bonuses and other offers. But they are then more likely to be killed or injured in battle.

(BEGIN VIDEO CLIP)

REP. CHARLES RANGLE (D), NEW YORK: The relationship between those who enlist, those who find themselves in harm's way, those who pay that ultimate death tax are those people who cannot find decent employment and who want to better themselves.

(END VIDEO CLIP)

CROWLEY: Rangle has made this argument before. Last year, he introduced a bill to reinstate the military draft to correct what he says is an economic imbalance among members of the armed forces.

A totally different story, the annual deadline for Americans to pay income taxes. Seems like an appropriate time to us to talk with the secretary of the treasury. Secretary John Snow is with me now from the White House Lawn.

Mr. Secretary, thank you for joining us.

JOHN SNOW, SECRETARY OF THE TREASURY: Candy, good to be with you. Thank you.

CROWLEY: And did you do your taxes by yourself?

SNOW: No, like many, many other Americans, I had to call on -- I had to call on tax experts to help me get through that.

CROWLEY: It's no inexpensive deal to have someone else do your taxes. I can't remember a candidate that I have covered running for the White House or anything else that hasn't called for simplification of the tax code. And I can't remember it ever being done. What's the problem here?

SNOW: Well, is the problem is, the complexity of the political processes surrounding the code as it exists today.

CROWLEY: Is that code for "political reasons the tax code is written"?

SNOW: Well, every single individual line in the tax code is there to advance somebody's interest. Every deduction, every preference, every credit. And people have a stake in those preferences and credits.

But the problem is that taken together, while they will advance the interests of individual interest groups, they're enormously burdensome and costly for the American public and the American taxpayer.

That's why we really are focused and need to focus on finding ways to simplify the code.

CROWLEY: I wonder, looking at it, we just had another guest on the tax code. Do you look at the tax code as it's now written and think that it is fundamentally fair to all-Americans?

SNOW: No, I think it needs to be made fairer, simpler, less complex and flatter. I think we can do a lot better job with the code and I hope we'll have the opportunity.

But I would point out that is it's a lot better today than it was a year ago for taxpayers, a lot better on this April 15 than a year ago April 15 because the tax code takes a smaller bite from the average Tax payer's income.

A hundred and eleven million Americans, every single tax payer, got a tax break this year because of President Bush's tax cuts.

CROWLEY: Mr. Secretary, I wanted to talk to you about economic conditions so that's a good segue for me. What do you make of that big increase in the new jobless -- new applications for jobless benefits last week? What is that about?

SNOW: Well, the long-term trend there is still very, very good. There was a spike, but it's still well below the levels that are not consistent with creating jobs.

I wouldn't put too much emphasis on one week's numbers. Rather, I'd focus on the longer term trends. The four-week average is still very low and consistent with continuing strong job creation.

CROWLEY: Mr. Secretary, the Democrats say that the reason the jobs have been so slow in coming is the policies of the Bush administration, the tax cuts that you have been trying to help corporations rather than the average people.

Tell me why you think new jobs have not been created in as rapid a rate as everyone thought they would be when the economy recovered.

SNOW: Well, it, takes a while for the economy to recover after the tax reductions. We saw the nice pickup in the second half of last year.

And with a growing and expanding economy, you get jobs, but jobs are the lagging indicator. They come back last. The numbers for March, you know, 308,000, 500,000 for the quarter with both January and February being revised upward, suggests that we're now creating lost and lots of jobs.

One obvious factor slowing job creation has been very high productivity. Three straight years of over 4 percent productivity, the highest back-to-backs consecutive productivity increases in the country's history.

CROWLEY: One last question because I'm told I've run out of time. And that is, do you expect that this month's job creation will be as robust as last month? Do you expect it to exceed it?

SNOW: I don't know that it will exceed it. But everything I've seen indicates that we will have good job numbers, continuing strong job numbers, that this recovery is sustainable and that it will create lost and lots of jobs in the months ahead.

CROWLEY: Treasury Secretary John Snow, happy tax day, if there is such a thing.

SNOW: Thank you.

CROWLEY: The president appears in primetime. How did he do? Up next, Bay Buchanan and Donna Brazile ahead on the Bush news conference and other hot topics ahead on INSIDE POLITICS.

(COMMERCIAL BREAK)

(AUDIO/VIDEO GAP)

DONNA BRAZILE, CNN CONTRIBUTOR: ...realized that the U.N. must be brought in to help stabilize and to help with the transition. John Kerry laid that out weeks ago. John Kerry understands that NATO and other international forces are needed under U.S. command and George Bush has come around. So like everything else, Bush is finally coming around after opposing it.

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: Donna, I don't know if that campaign or Kerry is just straight ignorant, but these are things the president has been talking about for month after month. He has laid out this plan, he has not changed it at all and you suggest that all of a sudden, Kerry has come up with the ideas? He criticizes -- you know, a year ago, he specifically said he would not criticize the policy in Iraq as long as troops were in harm's way. We owe it to the troops, were his words, and yet today, he ceaselessly criticizes this president...

BRAZILE: Because John Kerry would like to make sure that our troops have what they need to finish the battle. Look, we're coming upon the one-year anniversary of Mission Accomplished, one-year anniversary, George Bush said mission accomplished and he was absolutely wrong because first of all, the mission never had a plan. The mission never had an exit strategy and that's what John Kerry has been trying to point out.

CROWLEY: Politically, is it a bit of a problem for him to separate himself from the president? As we all know, quite famously, he voted for the Iraq resolution. He's tried very hard to say, well I would have done this sooner, I would have done this more, I would have worked harder on this. But there's no difference at the nub of the plans, is there?

BRAZILE: I do believe that John Kerry's plan would bring us to peace, bring us to stability and perhaps bring us to democracy sooner than George Bush's plan which continues to alienate people that we need in order to win. Look, we need people to win. We can't win this by ourselves.

BUCHANAN: The key is his plan is the president's plan. He stole it. Now he says it's his plan. President Bush has been working with the U.N. to turn this thing over. He wants them to take charge of the transition. He has been working with NATO... BRAZILE: Finally.

BUCHANAN: Not finally. All along. We have NATO in there now.

BRAZILE: Finally. George Bush just woke up and decided he needed help. Thank God that the president woke up. He's been sleeping at the wheel.

BUCHANAN: It is irresponsible for a national leader such as Kerry to suggest that the president is not doing exactly what he is doing, to say he uses the terms that we are occupying. He uses the terms of the enemy and says occupying.

BRAZILE: John Kerry is a United States senator, and every Congress person, every American should be able to stand up and say whether they disagree with this president...

BUCHANAN: Not if it's cheap criticism.

BRAZILE: It's not cheap.

CROWLEY: If I don't stop you, we'll never get to one more subject. We have less than a minute left and these have to be succinct. The president's performance at the news conference, what did you think of it?

BRAZILE: It was mind boggling. The president missed a great opportunity to answer questions that's on the minds of the American people. Where are the weapons of mass destruction? How do we get out of Iraq? What's happening now? The president, you know, dodged. He didn't want to talk about why he's appearing with Dick Cheney...

CROWLEY: Nothing good?

BRAZILE: Nothing good. The 17 minutes, maybe three to 17 minutes I listened he was coherent. Otherwise, most people turned the TV down and went and got some popcorn.

BUCHANAN: You know, that's just an unfair statement. I believe the president came on, he had two jobs to do, he did them both very, very outstandingly. He said, one, that to the American people, this is a very important cause. It's about terrorism. It's part of a war on terrorism and secondly, he said that that we will not waiver. He sent a message to the enemy, we're not going to back off. He was extremely strong, showed enormous leadership.

(CROSSTALK)

CROWLEY: Donna Brazile, if you don't know, is a Democrat, Bay Buchanan, if you don't know, is a Republican. Thank you very much. Appreciate it.

Many believe there are two kinds of people in the world, those who arrive on time and those who are always late. Up next, we're watching the clock and punctuality in the presidential race.

(COMMERCIAL BREAK)

CROWLEY: OK. It's all coming down to two candidates tonight. No, not Bush and Kerry, the ones you really care about, the two final contenders to be Donald Trump's apprentice. A new Internet spot plays off the hype about the hit reality TV show and takes aim at President Bush in the process.

(BEGIN VIDEO END)

TV ANNOUNCER: Thursday on an all new "Apprentice," George W. Bush is assigned the task of being president. And back in the board room, someone's going home for a giant mistake.

DONALD TRUMP, "THE APPRENTICE": Who chose this stupid concept? You're fired. You're fired. You're fired. You're fired.

(END VIDEO CLIP)

CROWLEY: That spot was put on the Internet by True Majority Action Pac, a liberal anti-war, anti-Bush group launched by Ben Cohen, who is the co-founder of Ben & Jerry's Ice Cream. Kerry's allies have many lines of attack against the president but we doubt anyone would question the president's punctuality. The same cannot be said about John Kerry. As CNN's Jennifer Micheals reports, the senator was reminded of his timeliness problem at a New York preschool yesterday.

(BEGIN VIDEOTAPE)

UNIDENTIFIED CHILD: You took a long time. Why did you take a long time?

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Why?

JENNIFER MICHAELS, CNN CORRESPONDENT (voice-over): Out of the mouths of babes.

KERRY: I don't know, I'm running late here.

MICHEAL: John Kerry may be many things, but punctual isn't one of them. He almost always runs late to campaign appearances keeping restless supporters waiting.

UNIDENTIFIED SUPPORTERS: We want Kerry. We want Kerry.

MICHAELS: And forcing local VIPs to fill the void.

UNIDENTIFIED MALE: Well, I'm not John Kerry, but I'm as close as you're going to get for right now.

MICHAELS: By being habitually tardy on the trail, Kerry is carrying on the legacy of the last Democratic president who ran on what reporters came to call Clinton time. By contrast, President Bush's public appearances usually run like clockwork or even ahead of schedule.

RUDY GIULIANI, FMR. NEW YORK MAYOR: I got to tell you one thing about President Bush, he's on time.

MICHAELS: At least on this issue, Bush and Kerry offer a clear choice between those who put a premium on punctuality and those who insist on setting their own pace. Jennifer Michealss, CNN, Atlanta.

(END VIDEOTAPE)

CROWLEY: We would also like to note we here at INSIDE POLITICS are always on time and that is it for INSIDE POLITICS.

I'm Candy Crowley. "CROSSFIRE" starts right now.

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


Aired April 15, 2004 - 15:30   ET
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(BEGIN VIDEOTAPE)
ANNOUNCER: The threat in Iraq and the presidential race.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I think we deserve a president of the United States who knows how to get it right the first time.

ANNOUNCER: But what would and could John Kerry do differently?

It's April 15. Do you know where Bush and Kerry stand on taxes? We'll reveal 10 tax questions the candidates don't want you to ask.

Stop the clock. The 2004 campaign pits the timely versus the tardy.

(END VIDEOTAPE)

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

CANDY CROWLEY, HOST: Thanks for joining us. Judy is off today. I'm Candy Crowley.

Politicians can be a predictable lot. On tax filing day they talk taxes. But in the two weeks leading up to this April 15, 90 Americans have died in Iraq, making that a subject that cannot be ignored.

During a Tax Day event in Iowa, President Bush talked again about tough times in Iraq. Our senior White House correspondent, John King, traveled with the president to Des Moines.

John, I've got to believe that even a month ago this was not the speech the president was prepared to give at this moment. How did he mesh these two messages?

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, certainly, he tends to mention Iraq in just about every speech. But he dedicated quite a bit of time to it today, Candy. And you're exactly right, the president noting the tough times, as he called them, of recent weeks in Iraq, the tough times for U.S. servicemen on the ground, the tough times for the American people who have to see those graphic pictures on television.

Also, remember, in this state, of course, the Democrats were swarming Iowa in the early months of this year, and one constant theme of the Democratic campaign was either opposition to the war itself or opposition to the president's handling of the post-war situation in Iraq. So the president saying that, yes, these were tough times, but he also said the United Nations is now more involved. He voiced confidence there would be a plan in place relatively soon.

He also mentioned a story told to him just this morning as he arrived here by a Republican congressman from Iowa who recently had to attend a Marine's funeral. The president said it is critical that that Marine and others who have fallen in Iraq not die in vain.

So the president even choking up at that point, Candy. He knows that, yes, he wanted to talk the economy today, but Iraq perhaps even much more so than the economy the driving political issue in this campaign right now -- Candy.

CROWLEY: John, you know, I have to ask about Osama bin Laden. We have this New tape. The CIA says it's probably him; Colin Powell told Polish interviews (ph), apparently, yes, and it is bin Laden.

This is the man that almost four years ago the president said he wanted dead or alive. Politically, how big a problem is his continued existence and even kind of trying to make deals with Europe a problem for the White House?

KING: It's an interesting question because, on the one hand, the Bush political team would tell you that the American people give their greatest trust to the president when it comes to leading the war on terrorism. The president's spokesman, Scott McClellan, did tell reporters on the way out here that the CIA had determined to the best of its an ability that is the voice of Osama bin Laden.

Scott McClellan saying it is a reminder we are still at war against terrorism. Also, he said a reminder of the evil tactics that the terrorists will use. Now, Scott McClellan voicing confidence the coalition will hold together.

So, on the one hand, a reflection again that this president for 31 months has been leading the United States in the war against al Qaeda, in the war against terrorism. But also, as the election approaches, a reminder that 31 months after those attacks, the man that the United States says is responsible for them is not only still at large, but every now and then through these audiotapes essentially taunting the United States -- Candy.

CROWLEY: So Tax Day, and let's kind of go to the original purpose for going to Iowa. Tax cuts always a part of this president's plan during his campaign and on. Any New messages today?

KING: No New message, but a reinforcement. And as you well remember, four years ago -- and it was Governor Bush and candidate Bush -- it was here in Iowa that he first unveiled his tax cut proposal. He came here on Tax Day two years ago.

The president making remarks here, saying that nobody likes people from Washington on Tax Day. But he believes that the pain, if you will, is a bit softer. He was introduced by Senator Chuck Grassly, a very popular Republican Senator here as the tax cutter in chief. And the president saying, because of his tax cuts, two times now through the Congress the president says they helped pull the economy out of recession and, in Mr. Bush's view, now contributing to more robust job growth.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Tax Day is something most people really don't look forward to. But this year, it's a little better because of the tax relief we delivered. And the economy is stronger for it.

(END VIDEO CLIP)

KING: The administration releasing some New numbers to make a case. It says the average refund back in 2001 was about $1,750. Says the average refund this year as the tax returns still flow in is somewhere around $2,100. And, Candy the president also making the case that the worst thing you could do is raise taxes now for the economy.

Senator Kerry, of course, has proposed scaling back the biggest bracket, wealthy tax cuts given to wealthy Americans under the Bush plan. And no accident at all the president is making that case here in Iowa.

Again, he first released his tax plan four years ago. He lost this state by just about 4,100 votes. It is a small state, but still viewed as a critical battleground that the president hopes very much he can win this November. Today, his 10th trip to Iowa since becoming president -- Candy.

CROWLEY: Thanks so much, senior White House correspondent John King. We appreciate it.

KING: Thank you.

CROWLEY: John Kerry delivered his Tax Day message right here in the nation's capital. During a town hall event at Howard University, Kerry argued his plan would give middle class Americans $225 billion more in tax cuts than they've gotten under President Bush.

Later, the discussion turned to Iraq. A student asked Kerry if he agrees with those who compare Iraq to the war that Kerry fought in.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: It's not Vietnam yet. And I underscore "yet." And there are a lot of differences. A lot of differences. But I think this administration is making mistakes of judgment and stubbornness that increasingly push it towards the potential of developing into a much more difficult situation.

(END VIDEO CLIP) CROWLEY: Beyond Kerry's tough critique of the president's policy, what kind of action would he take in Iraq? Our senior political analyst, Bill Schneider, looks at what Kerry has said and what he would do.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Listen to John Kerry and you get the impression he has vast differences with President Bush on Iraq.

KERRY: I believe the president made a terrible mistake to take us to the war the way he did.

SCHNEIDER: But what exactly would he do differently? Yesterday he was confronted with that question.

UNIDENTIFIED MALE: You may fool some of the Americans that you are different from George Bush on this war. But you're not fooling most of the world.

SCHNEIDER: Kerry's response later that day was cautious.

KERRY: It is important not just to cut and run.

SCHNEIDER: He says he would send more troops if they're needed.

KERRY: If the generals and those in charge need more troops, they get more troops.

SCHNEIDER: So does President Bush.

BUSH: If additional forces are needed, I will send them.

SCHNEIDER: Kerry sees American occupation as the problem.

KERRY: If you were to ask any student at college, first year of foreign policy, do you think it's a good idea for the United States of America almost alone to occupy a Middle East herniation, what do you think the answer would be?

AUDIENCE: No.

KERRY: But that's precisely what we're doing.

SCHNEIDER: President Bush sees the occupation as a problem, too.

BUSH: They're not happy they're occupied. I wouldn't be happy if I were occupied either.

SCHNEIDER: That's why Bush repeated his commitment to end the occupation on June 30, a date certain.

BUSH: Iraqis do not support an indefinite occupation. And neither does America.

SCHNEIDER: Kerry's big complaint: the U.S. is doing this on its own.

KERRY: Why is the United States of America almost alone in carrying this burden and the risks which the world has a stake in?

SCHNEIDER: He wants the United Nations to take charge of the political process in Iraq.

KERRY: The course that I have proposed is to turn over to the United Nations the full responsibility for the transformation of the government and for the reconstruction.

SCHNEIDER: But President Bush is not exactly hostile to the idea.

BUSH: I think that one of the things you're seeing is more involvement by the United Nations in terms of the political process. That's helpful.

SCHNEIDER: It's not just the occupation that alienates Iraqis. It's also America's policy towards Israel. This week, Bush backed Ariel Sharon. Even on that, Kerry did not beg to differ.

KERRY: And I agree with the decision today with respect to the withdrawal.

(END VIDEOTAPE)

SCHNEIDER: Here's a difference between Kerry and Bush: Kerry says his goal is a stable Iraq, not necessarily a fully democratic Iraq. Now, is that a basic difference? Sounds more like a nuance -- Candy.

CROWLEY: We know some people that don't do nuance, don't we?

SCHNEIDER: No.

CROWLEY: Thanks so much, Bill Schneider. Appreciate it.

The Bush camp is resurrecting an ad charging Kerry is "wrong on defense." It's a slightly modified version of the spot that includes Kerry's comment that he voted for $87 billion in troop funding before he voted against it. The ad begins airing tomorrow on national cable outlets and some local stations.

Two New polls lead the headlines in "Campaign News Daily." The race is very tight in the battleground of Oregon and close in New Jersey, as well.

The University of Oregon survey gives President Bush a two-point edge over Kerry, 47 percent to 45, well within the margin of error. In New Jersey, Kerry and Bush are one point apart in the Garden State, according to a survey by Fairleigh Dickinson University. President Bush lost New Jersey to Al Gore by 16 percentage points just four years ago.

Howard Dean is lending his support to an upcoming abortion rights march here in Washington. Today, Dean sent a video message to the 650,000 people on his e-mail list. Abortion rights activists Kate Michaelman (ph) joins Dean on the video.

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: George Bush and his allies around the country are putting a woman's right to choose at risk. But you have the power to keep it safe. When we stand up together for what's right, we can make Washington take notice.

(END VIDEO CLIP)

CROWLEY: The video is more than 90 seconds long. The march is scheduled for the National Mall a week from Sunday.

Former Democratic presidential hopeful John Edwards is out on the campaign trail again, tending a luncheon for Washington Democratic senator, Patty Murray. Edwards is an oft-mentioned name in the buzz surrounding the Kerry campaign's ongoing search for a vice presidential running mate. Edwards, perhaps not coincidentally, is also expected to attend Kerry fundraisers next week in Florida.

John Kerry has been the big man on campus in recent days. Still ahead, how is the senator playing with the college crowd? We'll have the results of a new poll and a live report.

Up next, with all the talk about taxes today, what questions would make the candidates clam up? We'll ask an author for his top 10 list.

Plus, will grim images from Iraq tilt the balance on Election Day? Jeff Greenfield shares his snapshot of the race.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

CROWLEY: If you are not aware that today is Tax Day, now you know, and now would be a good time to start looking for that 1040. For the rest of us, author and veteran tax attorney John Fox has written a book about the U.S. income tax system and the presidential campaign. It's titled "Ten Questions the Candidates Don't Want You to Ask." John Fox is with me from Hartford, Connecticut.

Thank you so much for joining us here. What I'd like to do -- and I speed-read your book, and the sense I get, of course, is that you think that the tax system is unfair. And what I'd like to do is sort of put up for our viewers some of these questions and have you tell us what's unfair about the current law.

JOHN FOX, AUTHOR, "TEN QUESTIONS THE CANDIDATES DON'T WANT YOU TO ASK": Sure, happy to.

CROWLEY: The first one is about the deductions that homeowners can get on an equity loan up to $100,000. You think we should ask politicians why is that in place. FOX: Well, it really doesn't make any sense. Years ago, Congress said to the two-thirds of all taxpayers who don't itemize their deductions that they simply can't get any deduction for their consumption loans. So if they have to pay very high interest on their consumption loans, they don't get any deduction.

We say to homeowners who itemize, you get to deduct the interest on up to $100,000 in loans. I don't think that makes any sense. I think we ought to ask the candidates about that.

CROWLEY: So the second question that you would ask them is about tax credits for college tuition. Tell us about that one.

FOX: Well, again, Congress, through the tax law, said that you can get credits for going to college. A credit of $1,500 for the Hope credit, $2,000 for the lifetime credit. But if you don't owe taxes, you don't get the credit. And the people who don't owe taxes often are the people who are at the lower end of the income scale.

So they're double losers. In fact, the tuitions and fees have gone up in light of the credit. They can't afford to go to college. I think we ought to say to the candidates, if we're going to help other people go to college, don't you think that we should let these credits extend to lower income families?

CROWLEY: Number three, childcare tax credits. What's wrong with that setup? That's a pretty popular one.

FOX: Which?

CROWLEY: Childcare tax credits.

FOX: Oh, yes. Well, the childcare tax credits are interesting.

We say to executives earning millions of dollars that they can get a credit against their taxes of $600 if they have one child, $1,200 if they have two children. But we say to lower income people who don't owe taxes and for whom childcare is the most expensive thing, we're not going to help you with our childcare at all. These are people off of welfare.

So I say to the candidate, if you're going to help the executives with their childcare costs, how about helping the people who need the assistance most.

CROWLEY: Now, let me get into Social Security, which is also a touchy issue. There is a cap now on taxes you pay against Social Security on your income. What's wrong with that?

FOX: Well, it's very interesting. The question really is, how are we going to teal deal with the long-term insolvency of Social Security? We know the trust fund is going to be bankrupt in the year 2042. Alan Greenspan says, well, let's cut the benefits of Social Security beneficiaries.

Well, for most of them, their Social Security benefits are what they live on. So I say, why not raise the threshold? As you know, the Social Security taxes end at about $88,000 this year. Most people pay the full Social Security tax on all their wages. Why not extend the tax to higher wages?

CROWLEY: And this one I have to say touched a nerve with the single people in the office. But this has to do with the poverty level and single people who don't make enough to take them love the poverty level.

FOX: Yes. It's really incredible that if you view the single person the way Congress taxes them, you might think they're almost un- American.

The poverty threshold for a single person is $9,600. That's really low. But their tax threshold, they'll begin to pay taxes once their income exceeds $9,300.

I mean, just take $9,600. After Social Security and Medicare taxes, they have $740 a month to live on. They can't live on that.

I say to the candidates, do you think that's fair? Don't you think you should allow the single person enough income to pay their basic expenses before you start exacting an income tax from them.

CROWLEY: John Fox author of "Ten Tax Questions the Candidates Don't Want You to Ask." I'll ask some of them on the campaign trail for you. Thanks so much.

FOX: Thank you.

CROWLEY: The so-called experts say events will decide the winner on Election Day. But our Jeff Greenfield asks, what does that really mean? A closer look at where we live and what we believe and how those factors could influence the vote come November.

(COMMERCIAL BREAK)

CROWLEY: The nation's economy and the war on terror are obviously hot buttons in the presidential race. But how much will they influence voters on November 2? Our senior analyst, Jeff Greenfield, shares his thoughts on the big issues and the divided electorate.

(BEGIN VIDEOTAPE)

JEFF GREENFIELD, CNN SR. ANALYST: One of the constant refrains of this election is that events will determine the outcome. Now, at first this sounds stupifyingly obvious, sort of like television is a visual medium. But there is more to it than that. By saying that the economy or Iraq might shape the outcome, we're also saying something about how close and how polarized this race already is.

(voice-over): Just about every poll number tells us this is a virtual dead heat right now. But why? Here's one big reason: both President Bush and Senator Kerry enjoy enormous support from within their own parties. Nearly nine in 10 Democrats say they back Kerry; more than nine in 10 Republicans say they're with the president. What's more, Americans have grown more and more likely to live among people who live the way they do.

According to one recent study analyzed by Bill Bishop in the Austin American Statesman, the United States has become sharply polarized geographically in the last 30 years or so. Back in 1976, about 26.8 percent of American voters lived in so-called landslide counties. Those are counties where a presidential candidate got 60 percent or more of the vote.

By 2000, the proportion of landslide counties had nearly doubled to 45.3 percent. That, in turn, has helped make our politics more poll polarized, as well. On average, 95 percent of all House incumbents are re-elected. Indeed, by some estimates, barely 5 percent of House seats are even competitive.

The result? Less and less bipartisanship, more and more emphasis on turning out the base with campaign appeals that increasingly paint the other guy as not just wrong, but as dangerous. Maybe even evil.

RICHARD CLARKE, FMR. COUNTERTERRORISM ADVISER: There was an al Qaeda. No one had ever said that.

GREENFIELD: And there's another political impact. More and more, voters see things through a prism of pre-existing beliefs and preferences. Most of us have made up our minds long ago, and so we process what we see and hear through that prism.

The president is either a strong, clear-minded leader, or a dangerously misguided simpleton. John Kerry is either the commonsense alternative or a tax-and-spend flip-flopper. What Condi Rice says about September 11 is either a breath of fresh air or a fog of evasion.

And this is what makes these images out of Iraq so potentially significant. They may have the power to change the minds of that relative handful of voters not fully committed yet. Those who say, back the president on going to war, but are unsure about the cost.

They are pictures that are hard to spin. And even if they obscure signs of progress elsewhere in Iraq, their power is undeniable.

(on camera): In the coming weeks and months, there may be other pictures from Iraq of stability, progress, well being. For now, however, the images coming out of Iraq do pose a real danger to the president because they're precisely the kind of information that can move the relative handful of undecided voters in this very evenly divided race.

Jeff Greenfield, CNN, New York.

(END VIDEOTAPE) CROWLEY: More INSIDE POLITICS at the top of the hour, including a look at John Kerry's New York fundraisers. President Bush may be the champ when it comes to campaign cash, but Senator Kerry had a record-setting haul through the Big Apple.

Also, two reviews of Tuesday's primetime news conference. Bay Buchanan and Donna Brazile analyze the president's performance.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: The campus campaign.

KERRY: A lot of late nights and a lot of cramming, a lot of warm beer, cold pizza. It's just like being in college, folks.

ANNOUNCER: Is John Kerry winning the battle for the college student vote?

On tax deadline day, we ask, are those forms too complicated?

JOHN SNOW, TREASURY SECRETARY: It is too complex, and few people are able to work their way through it without a lot of difficulty and anguish.

ANNOUNCER: Treasury Secretary John Snow is our guest.

UNIDENTIFIED MALE: George W. Bush is assigned the task of being president.

ANNOUNCER: Will the Donald fire the presidential apprentice? We'll log on to an anti-Bush Web ad.

(END VIDEOTAPE)

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

CROWLEY: Welcome back. I'm Candy Crowley sitting in for Judy today.

In an era when American voters are so closely and often bitterly divided, there may be more of a payoff than ever for candidates who reach out to steal impressionable first-time voters. John Kerry's appearance at Washington's Howard University today is part of his continuing tour of colleges around the country.

CNN's Kelly Wallace joins with us more on Kerry and the state of his campus appeal -- Kelly.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Well, Candy, what's really interesting is a new national poll has come out today by Harvard University's Institute of Politics. And what it finds is that support on college campuses for President Bush has gone down significantly over the past six months, as support for the war in Iraq has gone down significantly.

And what is all translating into is when you ask college students who would they vote for in November, 48 percent are saying they would vote for John Kerry, 38 percent are saying they would vote for George W. Bush and 5 percent are saying they would go for Ralph Nader.

There's another interesting thing going on though. When you ask college students are they Democrat or Republican. Well, 41 percent say they are independent. So more college students are saying they're independents than describing themselves as Democrat or Republican.

And as you said, John Kerry is doing what he can to reach out to these college students. He's on Howard University campus today. He's in the midst of a college tour this week while the Republicans are doing what they can to reach out to college students.

We had Ed Gillespie, the Republican party chair, not too long ago taking what the Republicans call "Reggie the Registration Rig," yep, that's what it's called. And he took that to Times Square and MTV again to try to register college voters and get them to vote Republican.

We saw a graphic at the top of this report. The big question is, will these college students go to the polls? Well if you look at this poll that was just conducted, 62 percent say they are following the presidential campaign very closely. And that same number, 62 percent, Candy, say they will definitely be voting in November...

CROWLEY: Sorry, we've got to interrupt Kelly and go to the State Department. Colin Powell is talking.

(INTERRUPTED BY LIVE EVENT)

CROWLEY: That is Secretary of State Colin Powell, as we said, defending the president's statement yesterday that the U.S. would indeed support a proposal by Israel to pull out of Gaza completely, but stay for the most part in the West Bank.

Colin Powell calling that merely a reflection of reality on the ground in the Mideast and saying that it was not by any means a done deal, simply that the president was reflecting what other negotiators have also found out, but the president was not in any case trying to dictate a settlement.

Also, according to Colin Powell, the intelligence officers, CIA and such, do believe that the voice on that tape today is that of it Osama bin Laden.

Now, before I so rudely interrupted her, Kelly Wallace was telling us about John Kerry's appeal to college students. Forgive me and go ahead.

WALLACE: Well, Candy, you know the best way to wrap up is really one of the other surprising findings of this new poll that we were talking about released by Harvard University, that did a survey of college students around the country. And it found that again, 62 percent saying they would definitely be voting, and that is important because obviously, this is an important voting block for John Kerry and for President Bush.

But, Candy, what is also very interesting, it appears that there's almost a new demographic block here when it comes to college students because some 52 or 53 percent of those students say they're not a traditional liberal or a traditional conservative.

They're describing themselves as centrists, either religious or secular centrists. And saying their main issues are social issues like gay marriage, affirmative action, the role that religion should play in government.

So we could be seeing is the emergence of a new swing voting block when it comes to college students and how both President Bush and John Kerry might try to appeal to them in the months ahead -- Candy.

CROWLEY: Thanks so much. Young voters, as they are want to do, changing the political scene. Thanks so much, Kelly Wallace. We appreciate it.

Kerry's campaign bank account is considerably fatter after serious partying in New York. Young celebrities such as actress Natalie Portman joined Kerry at the Crowbar Nightclub. At that event and several others he raised a total of $6.5 million for his campaign and another $1.5 million for the party. That is a one-day record for any presidential candidate.

Kerry went on to raise another $2.4 million at a party breakfast this morning.

This election year was supposed to be different in at least one way -- those huge unregulated contributions to political parties known in the fund raising trade as "soft money" are supposed to be banned. But Republican critics argue the Democrats are not playing by the rules. Bruce Morton looks at what the fuss is all about.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I would love to say to them it, hey, you want campaign finance reform. I'll show you what real reform is.

BRUCE MORTON CNN NATIONAL CORRESPONDENT (voice-over): Money, of course, is the mother's milk of politics. The Federal Elections Commission is holding hearings this week to try to decide which candidates can drink which kind of milk.

AD ANNOUNCER: John Kerry's record on the economy? Troubling. He opposed tax relief for married couples 22 times.

MORTON: A Bush ad, paid for by the Bush campaign. Under the McCain/Feingold Campaign Finance Reform Act, it has to be paid for with hard money: limited contributions from individuals and committees. AD ANNOUNCER: The issue is, middle class tax cuts. John Kerry voted to eliminate the marriage penalty and for a child tax credit.

MORTON: This ad is for John Kerry but it was paid for by an independent group called The Media Fund, a 527 organization so-called because that's the part of the tax law that covers it. These independent groups are allowed to use soft money, unlimited big bucks from corporations, unions, whatever. They say hey, freedom of speech.

UNIDENTIFIED FEMALE: The average MoveOn member contributing to an ad is putting in $60. These are regular citizens that wanted to be heard. I mean, it's really very exciting that we have the regular public getting involved in the political dialogue. It would be tragic to shut that down now.

MORTON: The critics who want the FEC To change the rules, say wait a minute, one set of rules for everyone. Hard money only.

Larry Noble's nonpartisan group studies money and politics.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: Right now the FEC is faced with a massive evasion of the law and they really need to take action on it.

MORTON (on camera): And say to all these guys, hard money, folks.

NOBLE: Say to all these guys, hard money. You're involved in trying to defeat Bush. Or if there are committees on the other side, you're involved in trying to defeat Kerry, you have to use hard money.

MORTON (voice-over): Does it matter? Yes. Look at the numbers. Between April 5 and 11, the Bush campaign, hard money, sent $4.7 million on ads. The Kerry campaign, not as well off, spent $1.46 million, hard money again.

But the independent pro-Kerry groups spent $3.85 million, soft money. So the Kerry forces actually outspent the Bush campaign. Could they do that if they had to use hard money? Almost certainly not.

(on camera): The commission won't vote on any proposed changes until mid-May. It does not have a reputation for decisive action and many here think it will end up doing nothing.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

CROWLEY: Democratic Congressman Charles Rangle of New York said today the deaths of low income Americans serving in Iraq amount to what he calls a, quote, "death tax."

In a speech at the National Press Club, Rangle argued that the poor are enticed to join the armed forces by recruitment bonuses and other offers. But they are then more likely to be killed or injured in battle.

(BEGIN VIDEO CLIP)

REP. CHARLES RANGLE (D), NEW YORK: The relationship between those who enlist, those who find themselves in harm's way, those who pay that ultimate death tax are those people who cannot find decent employment and who want to better themselves.

(END VIDEO CLIP)

CROWLEY: Rangle has made this argument before. Last year, he introduced a bill to reinstate the military draft to correct what he says is an economic imbalance among members of the armed forces.

A totally different story, the annual deadline for Americans to pay income taxes. Seems like an appropriate time to us to talk with the secretary of the treasury. Secretary John Snow is with me now from the White House Lawn.

Mr. Secretary, thank you for joining us.

JOHN SNOW, SECRETARY OF THE TREASURY: Candy, good to be with you. Thank you.

CROWLEY: And did you do your taxes by yourself?

SNOW: No, like many, many other Americans, I had to call on -- I had to call on tax experts to help me get through that.

CROWLEY: It's no inexpensive deal to have someone else do your taxes. I can't remember a candidate that I have covered running for the White House or anything else that hasn't called for simplification of the tax code. And I can't remember it ever being done. What's the problem here?

SNOW: Well, is the problem is, the complexity of the political processes surrounding the code as it exists today.

CROWLEY: Is that code for "political reasons the tax code is written"?

SNOW: Well, every single individual line in the tax code is there to advance somebody's interest. Every deduction, every preference, every credit. And people have a stake in those preferences and credits.

But the problem is that taken together, while they will advance the interests of individual interest groups, they're enormously burdensome and costly for the American public and the American taxpayer.

That's why we really are focused and need to focus on finding ways to simplify the code.

CROWLEY: I wonder, looking at it, we just had another guest on the tax code. Do you look at the tax code as it's now written and think that it is fundamentally fair to all-Americans?

SNOW: No, I think it needs to be made fairer, simpler, less complex and flatter. I think we can do a lot better job with the code and I hope we'll have the opportunity.

But I would point out that is it's a lot better today than it was a year ago for taxpayers, a lot better on this April 15 than a year ago April 15 because the tax code takes a smaller bite from the average Tax payer's income.

A hundred and eleven million Americans, every single tax payer, got a tax break this year because of President Bush's tax cuts.

CROWLEY: Mr. Secretary, I wanted to talk to you about economic conditions so that's a good segue for me. What do you make of that big increase in the new jobless -- new applications for jobless benefits last week? What is that about?

SNOW: Well, the long-term trend there is still very, very good. There was a spike, but it's still well below the levels that are not consistent with creating jobs.

I wouldn't put too much emphasis on one week's numbers. Rather, I'd focus on the longer term trends. The four-week average is still very low and consistent with continuing strong job creation.

CROWLEY: Mr. Secretary, the Democrats say that the reason the jobs have been so slow in coming is the policies of the Bush administration, the tax cuts that you have been trying to help corporations rather than the average people.

Tell me why you think new jobs have not been created in as rapid a rate as everyone thought they would be when the economy recovered.

SNOW: Well, it, takes a while for the economy to recover after the tax reductions. We saw the nice pickup in the second half of last year.

And with a growing and expanding economy, you get jobs, but jobs are the lagging indicator. They come back last. The numbers for March, you know, 308,000, 500,000 for the quarter with both January and February being revised upward, suggests that we're now creating lost and lots of jobs.

One obvious factor slowing job creation has been very high productivity. Three straight years of over 4 percent productivity, the highest back-to-backs consecutive productivity increases in the country's history.

CROWLEY: One last question because I'm told I've run out of time. And that is, do you expect that this month's job creation will be as robust as last month? Do you expect it to exceed it?

SNOW: I don't know that it will exceed it. But everything I've seen indicates that we will have good job numbers, continuing strong job numbers, that this recovery is sustainable and that it will create lost and lots of jobs in the months ahead.

CROWLEY: Treasury Secretary John Snow, happy tax day, if there is such a thing.

SNOW: Thank you.

CROWLEY: The president appears in primetime. How did he do? Up next, Bay Buchanan and Donna Brazile ahead on the Bush news conference and other hot topics ahead on INSIDE POLITICS.

(COMMERCIAL BREAK)

(AUDIO/VIDEO GAP)

DONNA BRAZILE, CNN CONTRIBUTOR: ...realized that the U.N. must be brought in to help stabilize and to help with the transition. John Kerry laid that out weeks ago. John Kerry understands that NATO and other international forces are needed under U.S. command and George Bush has come around. So like everything else, Bush is finally coming around after opposing it.

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: Donna, I don't know if that campaign or Kerry is just straight ignorant, but these are things the president has been talking about for month after month. He has laid out this plan, he has not changed it at all and you suggest that all of a sudden, Kerry has come up with the ideas? He criticizes -- you know, a year ago, he specifically said he would not criticize the policy in Iraq as long as troops were in harm's way. We owe it to the troops, were his words, and yet today, he ceaselessly criticizes this president...

BRAZILE: Because John Kerry would like to make sure that our troops have what they need to finish the battle. Look, we're coming upon the one-year anniversary of Mission Accomplished, one-year anniversary, George Bush said mission accomplished and he was absolutely wrong because first of all, the mission never had a plan. The mission never had an exit strategy and that's what John Kerry has been trying to point out.

CROWLEY: Politically, is it a bit of a problem for him to separate himself from the president? As we all know, quite famously, he voted for the Iraq resolution. He's tried very hard to say, well I would have done this sooner, I would have done this more, I would have worked harder on this. But there's no difference at the nub of the plans, is there?

BRAZILE: I do believe that John Kerry's plan would bring us to peace, bring us to stability and perhaps bring us to democracy sooner than George Bush's plan which continues to alienate people that we need in order to win. Look, we need people to win. We can't win this by ourselves.

BUCHANAN: The key is his plan is the president's plan. He stole it. Now he says it's his plan. President Bush has been working with the U.N. to turn this thing over. He wants them to take charge of the transition. He has been working with NATO... BRAZILE: Finally.

BUCHANAN: Not finally. All along. We have NATO in there now.

BRAZILE: Finally. George Bush just woke up and decided he needed help. Thank God that the president woke up. He's been sleeping at the wheel.

BUCHANAN: It is irresponsible for a national leader such as Kerry to suggest that the president is not doing exactly what he is doing, to say he uses the terms that we are occupying. He uses the terms of the enemy and says occupying.

BRAZILE: John Kerry is a United States senator, and every Congress person, every American should be able to stand up and say whether they disagree with this president...

BUCHANAN: Not if it's cheap criticism.

BRAZILE: It's not cheap.

CROWLEY: If I don't stop you, we'll never get to one more subject. We have less than a minute left and these have to be succinct. The president's performance at the news conference, what did you think of it?

BRAZILE: It was mind boggling. The president missed a great opportunity to answer questions that's on the minds of the American people. Where are the weapons of mass destruction? How do we get out of Iraq? What's happening now? The president, you know, dodged. He didn't want to talk about why he's appearing with Dick Cheney...

CROWLEY: Nothing good?

BRAZILE: Nothing good. The 17 minutes, maybe three to 17 minutes I listened he was coherent. Otherwise, most people turned the TV down and went and got some popcorn.

BUCHANAN: You know, that's just an unfair statement. I believe the president came on, he had two jobs to do, he did them both very, very outstandingly. He said, one, that to the American people, this is a very important cause. It's about terrorism. It's part of a war on terrorism and secondly, he said that that we will not waiver. He sent a message to the enemy, we're not going to back off. He was extremely strong, showed enormous leadership.

(CROSSTALK)

CROWLEY: Donna Brazile, if you don't know, is a Democrat, Bay Buchanan, if you don't know, is a Republican. Thank you very much. Appreciate it.

Many believe there are two kinds of people in the world, those who arrive on time and those who are always late. Up next, we're watching the clock and punctuality in the presidential race.

(COMMERCIAL BREAK)

CROWLEY: OK. It's all coming down to two candidates tonight. No, not Bush and Kerry, the ones you really care about, the two final contenders to be Donald Trump's apprentice. A new Internet spot plays off the hype about the hit reality TV show and takes aim at President Bush in the process.

(BEGIN VIDEO END)

TV ANNOUNCER: Thursday on an all new "Apprentice," George W. Bush is assigned the task of being president. And back in the board room, someone's going home for a giant mistake.

DONALD TRUMP, "THE APPRENTICE": Who chose this stupid concept? You're fired. You're fired. You're fired. You're fired.

(END VIDEO CLIP)

CROWLEY: That spot was put on the Internet by True Majority Action Pac, a liberal anti-war, anti-Bush group launched by Ben Cohen, who is the co-founder of Ben & Jerry's Ice Cream. Kerry's allies have many lines of attack against the president but we doubt anyone would question the president's punctuality. The same cannot be said about John Kerry. As CNN's Jennifer Micheals reports, the senator was reminded of his timeliness problem at a New York preschool yesterday.

(BEGIN VIDEOTAPE)

UNIDENTIFIED CHILD: You took a long time. Why did you take a long time?

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Why?

JENNIFER MICHAELS, CNN CORRESPONDENT (voice-over): Out of the mouths of babes.

KERRY: I don't know, I'm running late here.

MICHEAL: John Kerry may be many things, but punctual isn't one of them. He almost always runs late to campaign appearances keeping restless supporters waiting.

UNIDENTIFIED SUPPORTERS: We want Kerry. We want Kerry.

MICHAELS: And forcing local VIPs to fill the void.

UNIDENTIFIED MALE: Well, I'm not John Kerry, but I'm as close as you're going to get for right now.

MICHAELS: By being habitually tardy on the trail, Kerry is carrying on the legacy of the last Democratic president who ran on what reporters came to call Clinton time. By contrast, President Bush's public appearances usually run like clockwork or even ahead of schedule.

RUDY GIULIANI, FMR. NEW YORK MAYOR: I got to tell you one thing about President Bush, he's on time.

MICHAELS: At least on this issue, Bush and Kerry offer a clear choice between those who put a premium on punctuality and those who insist on setting their own pace. Jennifer Michealss, CNN, Atlanta.

(END VIDEOTAPE)

CROWLEY: We would also like to note we here at INSIDE POLITICS are always on time and that is it for INSIDE POLITICS.

I'm Candy Crowley. "CROSSFIRE" starts right now.

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