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Inside Politics

Kerry Defends Vietnam Record; Could Dems Reclaim the House?

Aired August 19, 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: John Kerry joins the fight to defend his record of valor in Vietnam against an ad attack.

UNIDENTIFIED MALE: He is lying about his record.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: They're not telling the truth. They're a front for the Bush campaign.

ANNOUNCER: We'll sort through the charges and countercharges and the political implications and talk to a Kerry critic whose own claims are being questioned.

UNIDENTIFIED FEMALE: This man is governor of...

ANNOUNCER: Was this the ad that started it all? We'll revisit the commercial bombshell dropped on a Democrat two decades ago and lessons learned.

The first lady's costarring role. Could her higher political profile turn off voters of both parties who really do like her?

(END VIDEOTAPE)

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

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

John Kerry promised some time ago that he would not hesitate to fight back if attacked. But for two weeks, the Democrat preferred to let allies respond to an ad accusing him of lying about his Vietnam War record. That changed today, when Senator Kerry directly took on the ad and President Bush. We begin with CNN's Dan Lothian.

(BEGIN VIDEOTAPE)

KERRY: The first definition of patriotism is keeping faith with those who wear the uniform...

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): In an all-out effort to defend his war record, Senator John Kerry launched an attack on the group Swift Boat Veterans for Truth, which has been running a television ad in key battleground states and speaking out publicly, questioning his service and medals. KERRY: This group isn't interested in the truth, they're not telling the truth.

LOTHIAN: Speaking in Boston to some 5,000 members of the International Association of Firefighters, Kerry took the offensive, saying in public what his press releases and campaign have said in response for months. Kerry also went after President Bush for not denouncing the ads.

KERRY: He wants them to do his dirty work.

LOTHIAN: The Bush campaign calls that claim false and insists the president has always considered Kerry's service in Vietnam noble. But last week on "LARRY KING LIVE," Bush passed up the opportunity to call on his supporters to back down.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I haven't seen the ad, but what I do condemn is these unregulated soft money expenditures by very wealthy people.

LOTHIAN: Kerry's war record has been questioned throughout his political career, but the controversy has intensified in the presidential campaign. Aides say the senator's new aggressive response was a personal decision, not a sign that the ads are taking a toll. But at least one of Kerry's veteran brothers called on today to defend Kerry's record agreed the issue is a thorn in the side.

UNIDENTIFIED MALE: Most of us felt that the charges would dissipate because they're just so off the wall.

UNIDENTIFIED MALE: To degrade him and demean him in such a manner that they are is really deplorable and sickening.

LOTHIAN: In addition to marching outs these supporters, the Kerry campaign is firing back with another 30-second ad.

UNIDENTIFIED MALE: I expected I'd be shot. When he pulled me out of the river, he risked his life to save mine.

LOTHIAN: This aggressive response comes as the credibility of the leading veteran behind the critical Kerry ad is being questioned. Larry Thurlow had disputed Kerry's claim of a gun battle that led to a Bronze Star. But now, in documents obtained by CNN, Thurlow's own military record shows that, in fact, there was "weapons fire" directed at "all units in the area that day." Thurlow now says his record reflects an account written up by Kerry and calls it "a lie."

(on camera): The new Kerry counter-ad will run in Ohio, Wisconsin and West Virginia. That means the Kerry campaign is deviating from cost-saving plans not to buy any television ads until September, a sign that despite the official line there is pressure to end this controversy.

Dan Lothian, CNN, Derry, New Hampshire.

(END VIDEOTAPE) CROWLEY: We want to talk more about Larry Thurlow's claims about Kerry and what happened to them on March 13, 1969. Former swift boat commander Larry Thurlow joins us on the phone from Kansas.

Mr. Thurlow, thank you so much for being here. I want to try and just sort of set the stage for our audience.

You were on the same mission, although a different boat that John Kerry was on, along with other boats up the Mekong at the time that he was awarded a Bronze Star and you were awarded a Bronze Star. He says that you all were under fire. You have said that you were not.

And now up comes your citation, which does several times say that you were under small arms fire. Can you justify the two of those for us?

LARRY THURLOW, FMR. SWIFT BOAT COMMANDER: Well, I can certainly try to explain why this would have happened. One point I would make, we were not on the Mekong River. We were on the Bay Hap River.

CROWLEY: That's right.

THURLOW: And there's quite a geographic difference there.

CROWLEY: Yes, my apologies.

THURLOW: Certainly. On this day in question, the three boat, a PCF in front of my boat, was blown up by a water mine. Immediately, the boat I was on, the boat directly in front of me, the 23 boat, opened fire on the left bank of the river in case there would be an ambush in connection with the water mine.

There was not. We stopped firing. We went to the aid of the three boat. I jumped on the three boat to help those that were wounded and to later assist in damage control to keep it from sinking because it was sinking.

At this time, when the mine went off, John Kerry fled down the river. Jim Rassmann fell off his boat. After a short passage of time, as the wounded were attended to and the damage control started on the three boat, John Kerry came back and pulled Lieutenant Rassmann out of the river just ahead of the arrival of the 23 boat, which had started over to get him.

Now, at no time were we under fire then. And my citation, which was read to me on the phone by a man named Michael Dodd (ph) yesterday, who had accessed it from my files, read it to me. And it does say in there on at least two occasions that as I assisted the wounded and I helped with the boat, that I was under heavy fire. This isn't true. And...

CROWLEY: Were you under -- can -- I'm sorry to interrupt. I just want to try and clarify this.

So you are talking now about along the Bay Hap River, that there was no fire going on at all during this time. And I'm just trying to figure out why it says on your citation for your Bronze Medal that there was.

THURLOW: Well, I think I can explain this. Now, the only firing that took place was us firing in defense in case we came under attack from people stationed on the -- on the bank. And this lasted for probably less than a minute, maybe even like 30 seconds. Then it became apparent we weren't under fire and returned all our efforts to the -- to the rescue of the three boat.

Now, an after-action report was filed on that incident. John Kerry wrote the after-action report. And it reports that he returned.

And I have seen this thing now. I have seen it in recent times. The Navy has all these things, and they're accessible simply by asking because they've been declassified.

This report was filed on that action that day. And it says he returned through 5,000 meters of automatic and semi-automatic weapons fire to get Lieutenant Rassmann. And, in fact, he did get Lieutenant Rassmann from the water.

CROWLEY: Mr. Thurlow...

THURLOW: Then John came on over to our boat, where we were working. And then, when he got back to the WTC, the Coast Guard cutter in the bay, he filed this report which -- and the reason I'm sure John filed it because the entire report has the nine boat -- I'm sorry the 94 boat, John's boat, as the central figure in all the action.

CROWLEY: Well, you know, I understand what you're trying to say here, but other than that, there's no evidence that John Kerry wrote the report about your citation. Would you concede that?

THURLOW: Well, I would concede that his signature's certainly not on it. You're right.

CROWLEY: OK.

THURLOW: But what I'm trying to say is that when my citation was written up -- and it was written up -- I asked Michael Dodd (ph). I said, "Who wrote it and when was it written?"

It was written 10 days later. It was written up by the officer in charge of our division, Lieutenant Commander George Elliott.

It has a witness it to. It's RD Lambert. Now, RD Lambert, I don't know whether that was Radarman Lambert or his initials were RD Lambert. And RD Lambert testified to the fact that, yes, I did jump on the three boat and assist with the wounded (UNINTELLIGIBLE).

CROWLEY: Mr...

THURLOW: But the report that George Elliott used to write up the fact that I was under fire came from the only report he had which said John's boat was under intense fire and, despite their claim that we weren't on the same boat, we were so close together that if he was under intense fire, I would have had to been under intense fire. CROWLEY: Let me ask you, Mr. Thurlow, just because it's television. I know this is awful to try to get you down into a short space, but they're already telling me to try and wrap this up.

THURLOW: OK.

CROWLEY: You know, when I -- when I look at this, and I try to put myself in the place of the viewer...

THURLOW: Yes?

CROWLEY: ... you're kind of looking at the fog of war, you're looking at all these things. What's the point here? If John Kerry went to war, if he served well -- I mean, just going to Vietnam, you know, says something about your heroism, as well as his heroism -- what is the point of all these things?

THURLOW: I think there's more than one point. The first point is that John, on more than one occasion, embellished his record. In fact, I will say lied about what he did there. And then John uses his war record as the central plank in his platform for his bid for the presidency.

CROWLEY: And let me -- let me ask you just one really quick question, which I hope is a yes or no.

THURLOW: Yes?

CROWLEY: And that is, are you in contact with any arm of the Republican National Committee, with the Bush White House? As you know, Senator Kerry said today that you're doing George Bush's dirty work for him. Have you had any contact with any Republican entity?

THURLOW: I've had absolutely no contact with any of them, nor do I plan to, nor can they tell me to not take part in the Swift Boat group's campaign.

CROWLEY: Thank you so much, Mr. Thurlow. We really appreciate your time.

THURLOW: Thank you.

CROWLEY: Now to the headlines in "Campaign News Daily."

New polls show John Kerry holding a modest lead in the showdown states of Pennsylvania and Ohio. In the Keystone Poll of registered Pennsylvania voters, it's Kerry 48, Bush 42, and Ralph Nader, three percent.

And in Ohio, our new poll of likely voters shows Kerry with 47 percent, Bush 45 percent, and Nader four percent. A University of Cincinnati poll offers a similar snapshot of likely voters in Ohio, with Kerry again leading by two points.

Another setback for the Nader campaign. The Missouri secretary of says Nader fell 994 valid signatures short of the 10,000 needed to get on the ballot. Nader backers in Missouri say they still are trying to figure out a way to get the Independent candidate on the ballot in that showdown state.

A familiar face from the Clinton era will soon be joining the Kerry campaign. Former White House press secretary Joe Lockhart's campaign role has yet to be determined, but a Kerry campaign spokeswoman says he will "help bolster the team to bring us to the finish line."

It's official, long-time Bush adviser Karen Hughes is back. Hughes gave up a powerful White House post two years ago to return home to Texas, though she continued to informally advise the president. Now she says she is back on the campaign payroll full time and "the training wheels are off."

When John Kerry decided to launch a counterattack against a stinging ad, he may have been heeding lessons learned by another Massachusetts Democrat. Coming up, the Dukakis dilemma then and Kerry's conundrum now.

Plus, voters are seeing a lot more of Laura Bush. We'll discuss the benefits and drawbacks of her expanded role in the campaign.

And not to be outdone by the Democrats, Republicans unveil their day-by-day convention themes.

With 75 days until the election, this is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

CROWLEY: First Lady Laura Bush has spent the past four years keeping a relatively low profile. But as campaign 2004 moves forward, Mrs. Bush's role has grown.

On the campaign trail, she finds herself speaking out on issues ranging from stem cell research to the economy. With polls showing the president's support weaker among women than men, Laura Bush's presence targets that sizable voting bloc.

Joining me to talk now about the first lady's expanding role in the campaign are "Washington Post" reporter Mark Leibovich and James Carney, White House correspondent for "TIME" Magazine.

Let me ask you first -- let's just go to you Mark. Do you agree with the premise that she now seems to be taking on substantive issues?

MARK LEIBOVICH, "WASHINGTON POST": Somewhat more than before. I mean, she -- you know, you could argue that she's always done soft issues. Last week, she talked about stem cells. But I think, you know, the presence -- her presence itself is really the story.

I mean, she's been out far more than she was four years ago. And you could argue that a lot of this has to do with Teresa Heinz Kerry's fairly controversial profile in recent months. CROWLEY: And James, what does she do for George Bush? What does she bring to the campaign trail?

JAMES CARNEY, "TIME" MAGAZINE: Well, I think there is one reason why Laura Bush is out there more often, and that's because her husband needs her. In 2000, Bush ran creditably as governor of Texas as a moderate compassionate conservative. His record in Texas reflected that and he did an effective job selling himself as, more or less, a moderate, a new kind of Republican.

Now he's got a record as president that a lot of people don't see as that moderate, and his compassionate credentials aren't that strong. Laura brings a softer edge to -- to his presidency.

And she's very likable, she was liked by Democrats and Republicans alike in Texas. And really, no one has a bad word to say about her. So deploying her makes all the sense in the world.

CROWLEY: So -- I mean, Mark, so basically, she softens him up. It's interesting that stem sell research and tax cuts are the two things -- you know, the things that they -- the Democrats seize on as, oh, he's just a mean president. So they send her out on these. So what are the risks here for her, for the president? Are there any?

LEIBOVICH: I can't really see any. I mean, she's incredibly disciplined. She really almost never makes news. And when she does, you know, on the stem cell issue, it's over -- it's one line, and it's not a terribly controversial line.

So, yes, she's a good campaigner. She's obviously not going to, you know, make any unwanted headlines. And for as much as she's a character witness for her husband, who, you know, as a lot of people agree, does need some "softening up" with a lot of swing voters, she's nothing but an asset.

CROWLEY: I wanted to show you, James, before I get to you a poll. It's a Pew poll, asking voters their view of Laura Bush.

Those who planned to vote for John Kerry have a 52 percent favorable view of Laura Bush and only a 38 percent unfavorable. That's vastly different from how those who are going to vote view Teresa Kerry, as you might imagine.

CARNEY: Right.

CROWLEY: Does she risk any of that popularity or is it too short a time?

CARNEY: Well, I think as long as she keeps it very on script and doesn't -- doesn't say anything particularly controversial, I think, you know, her favorability ratings will remain high. It's hard to image, again, how anybody could have an unfavorable impression of Laura Bush, because we haven't had much of an impression at all except of a woman who's a very nice and loyal wife -- spouse to her husband. But the contrast with Teresa Heinz Kerry will -- will work to their advantage, to the extent that there are any voters out there who will make a decision in this race based on the candidates' wives.

CROWLEY: Well, stop answering my question. You know, Mark, does anybody say, you know what? I really like that Laura Bush so I'm going to vote for her husband, or I really dislike that Teresa Heinz, so I'm not going to vote for her husband?

LEIBOVICH: You know, I doubt it. I mean, I really don't think I've met many people with any people in my life who would vote based on, you know, who a spouse is. Although, in close election, if all things are equal in the mind of a voter, you know, you are voting for an entire package and an entire family. And for as much as Teresa Heinz or Laura Bush is seen as part of the presidential entity that -- that you're going to be voting for, I mean, it could turn a very, very close election, if not a close dilemma in one's mind.

CROWLEY: James, it seems to me that at least since, gosh, Eleanor Roosevelt, I mean, people have paid attention to what first ladies do. Is that just sort of a curiosity? Do they expect anything of their first ladies?

CARNEY: Well, look, Hillary Clinton certainly -- I think Hillary Clinton moved votes. There were Democrats who were very passionately supportive of her, and certainly opponents who disliked her even more than they disliked her husband. So there is that capacity here.

Laura Bush is more a reactive quality here. Teresa Heinz, if she causes trouble for her husband in this race by saying the wrong thing, will help Bush. And Laura will be -- will take advantage of that by the contrast. But I don't think Laura herself will move votes.

Jay Carney, "TIME" Magazine, Mark Leibovich, "Washington Post," thank you guys so much.

CARNEY: Thank you.

LEIBOVICH: Thank you.

CROWLEY: Still ahead on INSIDE POLITICS, a trip back in time to a 1988 campaign ad and the lessons it's teaching today's presidential candidates.

(COMMERCIAL BREAK)

CROWLEY: Political attention and controversy has been focusing on an outside group's TV ads, questioning Democrat John Kerry's Vietnam service. We wondered how those ads compare with a notorious one from the 1988 presidential campaign and what type of lessons have been learned since then. Our Bruce Morton offers this perspective.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): In 1988, a group called Conservatives for Freedom ran this attack ad against Democratic presidential nominee Michael Dukakis.

UNIDENTIFIED FEMALE: This man is governor of Massachusetts. This man was convicted of murder and sentenced to life in a Massachusetts prison. Then, this man let him out of prison on a weekend furlough. While on furlough, this man ran away to Maryland, twice raped a woman and tortured her husband.

Now this man is running for president. President?

MORTON: Dukakis did not respond. George Walker Herbert Bush won the election. Lesson? When attacked, fight back.

This time the attack is on John Kerry's record as a swift boat commander in Vietnam. Again, the ad is from an outside group, Swift Boat Veterans for Truth.

UNIDENTIFIED MALE: John Kerry lied to get his Bronze Star. I know. I was there. I saw what happened.

UNIDENTIFIED MALE: His account of what happened and what actually happened are the difference between night and day.

MORTON: One of the vets said Kerry's boat was not under fire. Kerry, (UNINTELLIGIBLE) counter-attack with an ad featuring a vet who says Kerry saved his life.

UNIDENTIFIED MALE: All these Viet Cong were shooting at me. I expected I'd be shot. When he pulled me out of the river he risked his life to save mine.

MORTON: Kerry and Republican Vietnam vet John McCain urged President Bush to repudiate the attack ad. He has not. At the same time, another outside group, MoveOn.org, sponsored an ad attacking Bush's service in the National Guard.

UNIDENTIFIED MALE: The second man sailed to the top of the list on his father's name, was trained as pilot, but failed to show up for a required physical. He was grounded, wasn't seen for months, and then was released eight months early to go to Harvard Business School. This election is about character...

MORTON: Kerry was asked to repudiate that ad and did in a statement. But his surrogates make the same point in campaign appearances.

WESLEY CLARK (D), FMR. PRESIDENTIAL CANDIDATE: One man volunteered to serve his country, he volunteered to go to Vietnam, and he volunteered a third time to command a swift boat in one of the most dangerous activities in the war. The other man scrambled and used his family's influence to get out of hearing a shot fired in anger. That's the comparison.

MORTON: And then Kerry attacked him personally.

KERRY: Well, if he wants to have a debate about our service in Vietnam, here is my answer: bring it on.

MORTON (on camera): The old rule was, if you're attacked, hit back. Now, it's attack, counterattack, counter-counter, counter- counter-counterattack. The beat goes on.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

CROWLEY: Ahead on INSIDE POLITICS, the story that won't let go. The Kerry and Bush camps respond to the controversy over the Kerry Swift Boat ads. And we look at why it's even a story and why it matters.

And the latest presidential campaign pitches on how to make health care more affordable.

Stay with CNN, the most trusted name in news.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: With a hot battle going on right now in Iraq, why are we spending so much time talking about a decades-old war? How will this new fight over an old battle affect the race for the White House?

The presidential campaign isn't the only contest this November. Can the Democrats wrestle the House back from the Republicans?

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

(END VIDEOTAPE)

CANDY CROWLEY, HOST: Welcome back. I'm Candy Crowley, sitting in for Judy this week.

There is no shortage of angry finger-pointing between the Bush and Kerry campaigns today, all stemming from a now famous ad attack on Kerry's Vietnam War record.

The spot, by those who call themselves Swift Boat Veterans for Truth, accuses Kerry of lying about events that earned a Bronze Star during the war.

In Boston today, Senator Kerry said the ad does not tell the truth, and he laid some of the blame for it on President Bush.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: But here's what you really need to know about them. They're funded by hundreds of thousands of dollars from a Republican contributor out of Texas. They're a front for the Bush campaign. And the fact that the president won't denounce what they're up to tells you everything you need know; he wants them to do his dirty work.

(END VIDEO CLIP)

CROWLEY: The Kerry camp is apparently concerned enough about this controversy that it's ending its ad hiatus and rolling out a new commercial, defending the Senator's war record. It features veteran Jim Rassmann, who saved -- who says Kerry saved his life in Vietnam.

To pay for the ad Kerry has to dip into precious federal funds for the general election season, something he had not wanted to do quite yet.

The Bush campaign and the White House are flatly rejecting Kerry's charge that President Bush is letting the swift boat ad, quote, "do his dirty work." Bush is in Crawford, Texas, which is -- what happened -- which is where Jill Dougherty is -- Jill.

JILL DOUGHERTY, CNN CORRESPONDENT: Well, Candy, you know the sniping has been going on back and forth for quite a while. But today, the rhetoric heated up.

Scott McClellan, a spokesman for the president, asked about the issue, and he called Kerry's charges false. He said that President Bush has not and will not question the military record of John Kerry.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Senator Kerry knows that his latest attack is false and baseless.

The president has condemned all of the ads by the shadowy groups. We have called on Senator Kerry to join us in calling for an end to all the unregulated soft money that is going on in this campaign.

And the president has stayed focused on the issues and choices that the voters face. That's what this ought to be about. There's some clear choices that the voters face for the future. This should not be about the past.

(END VIDEO CLIP)

DOUGHERTY: So, as has happened before, McClellan was pressed on whether the president would actually condemn that particular ad. McClellan would not go that far, but he said the president has condemned all of those so-called soft money attack ads, and has called upon the Kerry campaign to join them.

Kerry, they say, has not agreed to do that. And therefore in the eyes of the Bush campaign, at least in the eyes of the White House, that means that Kerry implicitly or tacitly goes along with those ads.

And Candy, just one note. Here in Crawford, the president is taking a few days off, a little downtime, but he's also working on the speech that he will give, the acceptance speech at the Republican National Convention.

CROWLEY: Jill, let me ask you, going back to the swift boat controversy. It's very clear that the Kerry campaign wants to put -- wants to go back on the offense and put the president on the defense, saying, "Hey, you'd better apologize for this ad. John McCain says that you should. We say you should." Do you get any sense that the White House, either from listening to Scott or talking to anyone else, that the White House feels any pressure about that?

DOUGHERTY: Not really. I'd have to say that in just the past couple of weeks, that has come up numerous times. And what Scott McClellan has said is verbatim, the same thing that he said a few weeks ago, which is they're not going to go there. They are not going to talk about that specific ad. But in the same breath they will condemn all of those ads.

So that's -- I do not see that they're going to budge on that one, Candy.

CROWLEY: Our Jill Dougherty in Texas with the president. Thanks, Jill.

Kerry's decision to personally respond to the swift boat ad attack could put the allegations to rest or it could stir things up. Our senior political analyst considers how the campaigns got to this point.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): There's no shortage of issues in this campaign: terrorism, war, jobs, healthcare, energy. So why are we stuck in a debate about something that happened more than 35 years ago?

Charges...

UNIDENTIFIED MALE: John Kerry has not been honest about what happened in Vietnam.

SCHNEIDER: And counter charges...

UNIDENTIFIED MALE: The people attacking John Kerry's war record are funded by big money supporters. Listen to someone who was there.

SCHNEIDER: Issues are not what got Kerry the Democratic nomination. Democrats agreed with Howard Dean on the issues, mostly notably, Iraq.

Democrats preferred Kerry because of his personal qualities. They saw him as more electable, someone who could beat Bush. Why? His Vietnam War record. Kerry made it the centerpiece of his campaign.

KERRY: I thought it was important if you had a lot of privileges as I had had, to go to a great university like Yale to give something back to your country.

SCHNEIDER: After Kerry showcased his war record at the Democratic convention, conservatives pounced, like Rush Limbaugh, on his radio show. RUSH LIMBAUGH, RADIO TALK SHOW HOST: You didn't start basing your whole career and future on your four months service in Vietnam until the convention. And when you did that, yes, these guys finally came up.

SCHNEIDER: Kerry now feels he has to fight back with something more than press releases.

KERRY: Of course, the president keeps telling people he would never question my service to our country. Instead, he watches as a Republican funded attack group does just that.

Well, if he wants to have a debate about our service in Vietnam, here is my answer: bring it on!

SCHNEIDER: Brave words. But the fact is, Kerry is not likely to beat Bush on personal qualities. Polls show Bush has a clear advantage over Kerry as a strong leader, who is good in a crisis, down-to-earth, and sticks to his positions.

Kerry's personal strength? Like any good Democrat, he cares about people.

But when you talk about most issues, the advantage shifts to Kerry. Voters rate Kerry better on the economy, jobs, education, and healthcare. Bush's issue advantage is on terrorism. That's it.

What about Iraq? The two are rated about equal. Kerry has to get the debate off personal qualities and onto the issues. His supporters know that.

GEN. WESLEY CLARK (D), FORMER PRESIDENTIAL CANDIDATE: Stop the swift boat campaign, pull it all off the air, let's get down the issues.

SCHNEIDER: Kerry's opponents are doing their best to make sure that doesn't happen.

(END VIDEOTAPE)

SCHNEIDER: Kerry has to reverse strategies from the primaries: get off his war record and get onto Bush's record as president. And so far, that hasn't happened.

CROWLEY: Thanks, Bill. Believe it or not, we're going to move onto another topic. I appreciate it.

The swift boat flap is overshadowing Kerry's other theme of the day, healthcare. He held a front porch conversation on that subject in Derry, New Hampshire.

He's highlighting a new campaign report that says the high cost of healthcare is a key factor in keeping the jobs market weak.

Meantime the president has made something of a concession in the political debate over healthcare. He told Wisconsin voters yesterday that it makes sense for Americans to import cheaper medicine from Canada and elsewhere, as long as it's safe.

His administration is studying the idea, which John Kerry already supports.

A quick note on Senator Kerry's itinerary. Democratic Senator Bill Nelson of Florida has invited Kerry to the state to tour damage from Hurricane Charley. The Kerry campaign says that could happen as soon as tomorrow.

President Bush toured the storm damage last weekend shortly after the hurricane hit.

The political storm over Kerry's Vietnam War medals isn't letting up. When we come back, the take from the left and the right over the swift boat controversy.

A governor under siege. Can New Jersey's Jim McGreevey last in office until November?

And later, a House fight. Can the Democrats retake the House of Representatives from the Republicans?

(COMMERCIAL BREAK)

CROWLEY: Joining me now, Democratic strategist Donna Brazile and Bay Buchanan, president of American Cause. Girl's day on INSIDE POLITICS.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Thank you.

CROWLEY: Listen, the swift boat ads. Why -- why after two weeks of letting it out there does John Kerry all of a sudden go in front of the firefighters and slug it out?

BRAZILE: I think it was important that Senator Kerry draw the line, and especially this week, you know, ten days before the Republican convention. These so-called hired guns are out there, ranting and raving about John Kerry's service.

And look, what he did today was he blew them completely out of the water. He exposed them. He said they don't know what they're talking about. He served. He served with honor and you know what? He has shrapnel to prove.

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: You know, the problem here is he's given it more days if not some more weeks here. You want one of these stories to go away in a campaign, you give them their little time and you move on.

And he -- he's obviously brought it back up mainly for one reason: his polls are showing it's hurting him. And so he's now going to try to show it somehow involved the president, blame this on the president, try to hurt the president with it.

The president never made this an issue, Vietnam an issue in this campaign or his record, Kerry's record. He's always recognized him as somebody who went and respected that. The person who made Vietnam an issue in this campaign is Mr. Kerry, four days of a convention. This is why he says he's qualified to be commander in chief.

BRAZILE: But the real issue is hiding behind these illegitimate third party organizations. John Kerry yesterday denounced and said to MoveOn.org to pull the ads. He was right to say that.

John McCain called on President Bush to denounce these ads a couple of weeks ago. And Because President Bush has failed to act, John Kerry, of course, today once again repeated the assertion that the president should call on these veterans to stand down. That's what he did. He blew them out of the water.

CROWLEY: Do you think there's a little over-the-topness in that? You know, they're doing George Bush's dirty work for him? I mean, is -- is this group doing George Bush's dirty work any more than MoveOn.org is doing it for John Kerry? Or any of the other 527s? Because on the Democratic side there are many more 527s. So...

BRAZILE: There are a lot of 527s on both sides. But look, what Kerry said today is that this -- this group of so-called veterans lied. They did not serve. They served in Vietnam, but they did not serve with Senator Kerry.

The men who served with John Kerry, who knows him best, they have stood up. And they have said they know what happened during that period of time that John Kerry served. And John Kerry was right to blow them out of the water.

BUCHANAN: You know, when you say that the president is somehow hiding behind these donors and this group, that is completely a false accusation. There's no evidence, and in fact, it's completely not true. And there will never be...

BRAZILE: Then denounce it.

BUCHANAN: The president, he has denounced all these ads, all these 527 ads. He think this soft money ad should not be going on. He's denounced them all. That's something Kerry -- Kerry wants to pick and choose. He likes these; they work for him. These don't.

BRAZILE: No. He's been very consistent about them all.

CROWLEY: It -- with one of the MoveOn.org ads, it did take on the swift boat a week ago before the new one came out that did suggest again that the president's father got him out of the Vietnam War.

You had Wesley Clark out there, who's, you know, a front man in the best of ways for the Kerry campaign, saying exactly what the ad said. But they're not condemning that.

So do you worry that, you know, you're looking at this kind of both ways. Aren't both sides kind of equally culpable of using these?

BRAZILE: I think it's important John Kerry not sleep through these attacks on his character and sleep through the attacks on his record.

And absolutely, General Clark is an honorable public servant. To go out there -- I just want to still Bay's fire a little bit, because I know how much she loved General Clark like myself.

But look, General Clark did the right thing standing up for a fellow Vietnam veteran. And it's important that the campaign respond to these attacks. Look, the attacks are coming every day...

BUCHANAN: General Clark...

BRAZILE: ... not just from this organization, but it's coming from all quarters.

BUCHANAN: The president has been hammered and hammered from these same types of groups from Move On and the others. And you didn't hear a peep, just like Candy said. He is picking and choosing the ones he wants to denounce, and he's picking and choosing the ones he wants the president to denounce.

CROWLEY: So Bay, why not just say, "Look, I denounce this?" Why not -- I mean, why not get it off the board? If he thinks it's ugly politics, why go on? Because there's no real evidence that it's helping George Bush. In fact it may be hurting him.

BUCHANAN: I agree that at some stage you could, indeed, hurt the president. But the key here is, you know, the president has denounced them all outright.

If he says, "Listen, I don't want -- I don't think they should do this," there's going to be questions. You're all going to say to him, "What about this? What about this?" He's going to involve himself in this debate. He should just stay completely removed about it and say, "I denounce them all."

(CROSS TALK)

CROWLEY: Governor McGreevey, if we have the time. OK. The governor now appears to be saying that he is going to be able to stay until November 15. Yes or no? Is he...

MCGREEVEY: He should stay. He should allow for an orderly transition. He did the right thing in stepping down. And there is the state business at hand. A Democrat will replace him. And he should step down on November 15.

BUCHANAN: He's a completely corrupt man who's hiding behind the fact that he's also gay. He's a disgrace to his family and office of the governorship, and he's really, really humiliated the people of New Jersey. Get out now.

BRAZILE: He has a lot of state business to continue.

BUCHANAN: Come on, guys.

CROWLEY: Let New Jersey be New Jersey. Donna Brazile, Bay Buchanan, thank you very much.

Lest we forget, when November rolls around, there will be a lot more at stake than a presidential race. Coming up, the quest for Congress. Could the upcoming House races change the face of Washington?

(COMMERCIAL BREAK)

CROWLEY: The lion's share of our attention has been focused in recent months on the coming presidential election, but there are many congressional races at stake this November, as well. In fact, all of them.

Joining us those contests and their potential impact are California Representative Robert Matsui, chairman of the Democratic Congressional Campaign Committee, and his Republican counterpart, Representative Thomas Reynolds of New York.

Thank you both.

I want to start out, Congressman Matsui with a sore point here, and that is Rodney Alexander. He has made your hill a little steeper, has he not, by going from Democrat to Republican?

REP. ROBERT MATSUI (D), CALIFORNIA: Well, we're not quite sure yet, because we're going to try to take him off the ballot and obviously make this a fair (ph) race. In fact, if we are successful in that effort.

That brings us 12 seats down, if in fact he remains on the ballot, provided we can't find anybody to run against him.

And we have right now 38 congressional districts that are currently held by Republicans that we have first year candidates. So we're very confident, as long as the national mood remains as it is.

And obviously, the American public right now is very, very skeptical of this administration and the Republican House and Senate, because things aren't going well.

CROWLEY: Well, I want to get to the down ballot effect, but I first want to ask Congressman Reynolds, Nancy Pelosi, of course, has said that, in fact, if the election were to happen today, the Democrats would take over the House.

REP. THOMAS REYNOLDS (R), NEW YORK: She also said she'd put her credibility on it, and quite frankly, it just isn't going to happen.

Rodney Alexander's switch to a Republican was devastating news to the Democrats. It was a huge setback. He will be on the ballot. It is a frivolous lawsuit that's been entered by some of the Louisiana Democrats.

His popularity is strong enough, he will win no matter what his title of Republican, Democrat, independent behind his name. Rodney Alexander is a winner. He'll be with the Republican conference. When you look at the math, the math is just plain simple. And when you look at Charlie Cook, who's been an independent observer of politics in the House, it's clear that he says the Democrats have a small, snowball's chance in hell of recap touring the majority this fall. I believe him.

CROWLEY: So, I mean, how many -- Let me first sort of set the table, which is how many seats would you say, Congressman Matsui, are in play?

MATSUI: We have 38 Republican seats right now, as I mentioned, which we have first year candidates. And we have four in Pennsylvania. These are turnover seats. We have two in Colorado, and two in Connecticut, two in Washington state and a scattering of states throughout the country. You have Georgia, in which the Democratic performance is 62 percent.

As I said, if the election were held today, we would take the House back. We're 10 points ahead on the generic question in the CNN poll, and we're 22 points up in terms of right track/wrong track.

And Tom Reynolds could be whistling by the grave. But the reality is that since he's worried; I know he's worried. And he should be worried. I think we have a good shot.

Mainly because the American public, the mood has shifted completely. People are very skeptical of this administration. They don't like the idea of the war going on, and middle class Americans aren't gaining from the so-called economic recovery.

CROWLEY: Congressman Reynolds, let me give you a chance to respond. But I also want to know, you know, the conventional wisdom is, look, these races are about local issues. They are not about who's at the top of the ballot, and yet the war is such an overpowering issue.

Do you see that changing this year?

REYNOLDS: Candy, I've said so long and it's just so true, that House races, we build them from the ground up. Each race is customized to the district they're in.

And people are worried on House races what their congressman thinks about kitchen table issues: economy, jobs, taxes. And we think we have a record, and we have the opportunity to get that message out to voters.

When you look at generic polls, I've seen generics all over. We're used to running behind. July and October in 2000 and 2002 had the Republicans down in the generic ballot.

Just last week I think it was the Gallup poll had us even. That's not what's important. What's important is how the structure for House races is coming together.

I think Charlie Cook said it well when he said there isn't a snowball's chance in hell that the Democrats can get it. And let me just show you the math.

There's 195 Republican seats now that are in the bank that are Republicans to be reelected. Charlie Cook in 10 years has only predicted two wrong when he says that likely Republican seats, there's 19.

There is 214 seats. We have four to get out of 34 Republican leaning or toss-up seats. We are going to have not only 218. We're going to bring back our 229.

CROWLEY: Congressman, let me interrupt, because I want you to respond to that. You've got about 30 seconds, but I want to know, is it that George Bush hurts down ballot Republicans or that John Kerry helps down ballot Democrats?

MATSUI: Well, I don't think there's any question John Kerry's a great candidate for us. But the reality is the Republicans have been rubber stamped for George Bush, and they are responsible for the economy. They're responsible for what's going on internationally, and they're going to end up paying for it.

I'm glad that Tom Reynolds is saying let's join the issue on the economy, jobs and obviously the whole issue of international relations, because Democrats are going to win that battle.

CROWLEY: Congressman Robert Matsui for the Democrats; Thomas Reynolds for the Republicans. I wish we had more time. Come back.

REYNOLDS: Thank you.

MATSUI: Thanks.

CROWLEY: Next on INSIDE POLITICS, he may be one of the most recognized U.S. politicians in the world, but not necessarily to some airport screeners in Boston. We'll explain when we return.

(COMMERCIAL BREAK)

(STOCK REPORT)

(COMMERCIAL BREAK)

CROWLEY: Guess who's getting stopped in his hometown airport and labeled a security risk, incorrectly we believe?

At a Senate hearing today Senator Ted Kennedy revealed that he was stopped at Logan Airport in his native Boston not once but several times beginning in March.

The Department of Homeland Security says Kennedy faced the additional screening because his name is similar to someone of concern. In all cases, Kennedy was eventually allowed to fly, but Homeland Security Secretary Tom Ridge called Kennedy to apologize anyway.

So you thought you were the only ones getting hassled. 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 August 19, 2004 - 15:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: John Kerry joins the fight to defend his record of valor in Vietnam against an ad attack.

UNIDENTIFIED MALE: He is lying about his record.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: They're not telling the truth. They're a front for the Bush campaign.

ANNOUNCER: We'll sort through the charges and countercharges and the political implications and talk to a Kerry critic whose own claims are being questioned.

UNIDENTIFIED FEMALE: This man is governor of...

ANNOUNCER: Was this the ad that started it all? We'll revisit the commercial bombshell dropped on a Democrat two decades ago and lessons learned.

The first lady's costarring role. Could her higher political profile turn off voters of both parties who really do like her?

(END VIDEOTAPE)

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

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

John Kerry promised some time ago that he would not hesitate to fight back if attacked. But for two weeks, the Democrat preferred to let allies respond to an ad accusing him of lying about his Vietnam War record. That changed today, when Senator Kerry directly took on the ad and President Bush. We begin with CNN's Dan Lothian.

(BEGIN VIDEOTAPE)

KERRY: The first definition of patriotism is keeping faith with those who wear the uniform...

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): In an all-out effort to defend his war record, Senator John Kerry launched an attack on the group Swift Boat Veterans for Truth, which has been running a television ad in key battleground states and speaking out publicly, questioning his service and medals. KERRY: This group isn't interested in the truth, they're not telling the truth.

LOTHIAN: Speaking in Boston to some 5,000 members of the International Association of Firefighters, Kerry took the offensive, saying in public what his press releases and campaign have said in response for months. Kerry also went after President Bush for not denouncing the ads.

KERRY: He wants them to do his dirty work.

LOTHIAN: The Bush campaign calls that claim false and insists the president has always considered Kerry's service in Vietnam noble. But last week on "LARRY KING LIVE," Bush passed up the opportunity to call on his supporters to back down.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I haven't seen the ad, but what I do condemn is these unregulated soft money expenditures by very wealthy people.

LOTHIAN: Kerry's war record has been questioned throughout his political career, but the controversy has intensified in the presidential campaign. Aides say the senator's new aggressive response was a personal decision, not a sign that the ads are taking a toll. But at least one of Kerry's veteran brothers called on today to defend Kerry's record agreed the issue is a thorn in the side.

UNIDENTIFIED MALE: Most of us felt that the charges would dissipate because they're just so off the wall.

UNIDENTIFIED MALE: To degrade him and demean him in such a manner that they are is really deplorable and sickening.

LOTHIAN: In addition to marching outs these supporters, the Kerry campaign is firing back with another 30-second ad.

UNIDENTIFIED MALE: I expected I'd be shot. When he pulled me out of the river, he risked his life to save mine.

LOTHIAN: This aggressive response comes as the credibility of the leading veteran behind the critical Kerry ad is being questioned. Larry Thurlow had disputed Kerry's claim of a gun battle that led to a Bronze Star. But now, in documents obtained by CNN, Thurlow's own military record shows that, in fact, there was "weapons fire" directed at "all units in the area that day." Thurlow now says his record reflects an account written up by Kerry and calls it "a lie."

(on camera): The new Kerry counter-ad will run in Ohio, Wisconsin and West Virginia. That means the Kerry campaign is deviating from cost-saving plans not to buy any television ads until September, a sign that despite the official line there is pressure to end this controversy.

Dan Lothian, CNN, Derry, New Hampshire.

(END VIDEOTAPE) CROWLEY: We want to talk more about Larry Thurlow's claims about Kerry and what happened to them on March 13, 1969. Former swift boat commander Larry Thurlow joins us on the phone from Kansas.

Mr. Thurlow, thank you so much for being here. I want to try and just sort of set the stage for our audience.

You were on the same mission, although a different boat that John Kerry was on, along with other boats up the Mekong at the time that he was awarded a Bronze Star and you were awarded a Bronze Star. He says that you all were under fire. You have said that you were not.

And now up comes your citation, which does several times say that you were under small arms fire. Can you justify the two of those for us?

LARRY THURLOW, FMR. SWIFT BOAT COMMANDER: Well, I can certainly try to explain why this would have happened. One point I would make, we were not on the Mekong River. We were on the Bay Hap River.

CROWLEY: That's right.

THURLOW: And there's quite a geographic difference there.

CROWLEY: Yes, my apologies.

THURLOW: Certainly. On this day in question, the three boat, a PCF in front of my boat, was blown up by a water mine. Immediately, the boat I was on, the boat directly in front of me, the 23 boat, opened fire on the left bank of the river in case there would be an ambush in connection with the water mine.

There was not. We stopped firing. We went to the aid of the three boat. I jumped on the three boat to help those that were wounded and to later assist in damage control to keep it from sinking because it was sinking.

At this time, when the mine went off, John Kerry fled down the river. Jim Rassmann fell off his boat. After a short passage of time, as the wounded were attended to and the damage control started on the three boat, John Kerry came back and pulled Lieutenant Rassmann out of the river just ahead of the arrival of the 23 boat, which had started over to get him.

Now, at no time were we under fire then. And my citation, which was read to me on the phone by a man named Michael Dodd (ph) yesterday, who had accessed it from my files, read it to me. And it does say in there on at least two occasions that as I assisted the wounded and I helped with the boat, that I was under heavy fire. This isn't true. And...

CROWLEY: Were you under -- can -- I'm sorry to interrupt. I just want to try and clarify this.

So you are talking now about along the Bay Hap River, that there was no fire going on at all during this time. And I'm just trying to figure out why it says on your citation for your Bronze Medal that there was.

THURLOW: Well, I think I can explain this. Now, the only firing that took place was us firing in defense in case we came under attack from people stationed on the -- on the bank. And this lasted for probably less than a minute, maybe even like 30 seconds. Then it became apparent we weren't under fire and returned all our efforts to the -- to the rescue of the three boat.

Now, an after-action report was filed on that incident. John Kerry wrote the after-action report. And it reports that he returned.

And I have seen this thing now. I have seen it in recent times. The Navy has all these things, and they're accessible simply by asking because they've been declassified.

This report was filed on that action that day. And it says he returned through 5,000 meters of automatic and semi-automatic weapons fire to get Lieutenant Rassmann. And, in fact, he did get Lieutenant Rassmann from the water.

CROWLEY: Mr. Thurlow...

THURLOW: Then John came on over to our boat, where we were working. And then, when he got back to the WTC, the Coast Guard cutter in the bay, he filed this report which -- and the reason I'm sure John filed it because the entire report has the nine boat -- I'm sorry the 94 boat, John's boat, as the central figure in all the action.

CROWLEY: Well, you know, I understand what you're trying to say here, but other than that, there's no evidence that John Kerry wrote the report about your citation. Would you concede that?

THURLOW: Well, I would concede that his signature's certainly not on it. You're right.

CROWLEY: OK.

THURLOW: But what I'm trying to say is that when my citation was written up -- and it was written up -- I asked Michael Dodd (ph). I said, "Who wrote it and when was it written?"

It was written 10 days later. It was written up by the officer in charge of our division, Lieutenant Commander George Elliott.

It has a witness it to. It's RD Lambert. Now, RD Lambert, I don't know whether that was Radarman Lambert or his initials were RD Lambert. And RD Lambert testified to the fact that, yes, I did jump on the three boat and assist with the wounded (UNINTELLIGIBLE).

CROWLEY: Mr...

THURLOW: But the report that George Elliott used to write up the fact that I was under fire came from the only report he had which said John's boat was under intense fire and, despite their claim that we weren't on the same boat, we were so close together that if he was under intense fire, I would have had to been under intense fire. CROWLEY: Let me ask you, Mr. Thurlow, just because it's television. I know this is awful to try to get you down into a short space, but they're already telling me to try and wrap this up.

THURLOW: OK.

CROWLEY: You know, when I -- when I look at this, and I try to put myself in the place of the viewer...

THURLOW: Yes?

CROWLEY: ... you're kind of looking at the fog of war, you're looking at all these things. What's the point here? If John Kerry went to war, if he served well -- I mean, just going to Vietnam, you know, says something about your heroism, as well as his heroism -- what is the point of all these things?

THURLOW: I think there's more than one point. The first point is that John, on more than one occasion, embellished his record. In fact, I will say lied about what he did there. And then John uses his war record as the central plank in his platform for his bid for the presidency.

CROWLEY: And let me -- let me ask you just one really quick question, which I hope is a yes or no.

THURLOW: Yes?

CROWLEY: And that is, are you in contact with any arm of the Republican National Committee, with the Bush White House? As you know, Senator Kerry said today that you're doing George Bush's dirty work for him. Have you had any contact with any Republican entity?

THURLOW: I've had absolutely no contact with any of them, nor do I plan to, nor can they tell me to not take part in the Swift Boat group's campaign.

CROWLEY: Thank you so much, Mr. Thurlow. We really appreciate your time.

THURLOW: Thank you.

CROWLEY: Now to the headlines in "Campaign News Daily."

New polls show John Kerry holding a modest lead in the showdown states of Pennsylvania and Ohio. In the Keystone Poll of registered Pennsylvania voters, it's Kerry 48, Bush 42, and Ralph Nader, three percent.

And in Ohio, our new poll of likely voters shows Kerry with 47 percent, Bush 45 percent, and Nader four percent. A University of Cincinnati poll offers a similar snapshot of likely voters in Ohio, with Kerry again leading by two points.

Another setback for the Nader campaign. The Missouri secretary of says Nader fell 994 valid signatures short of the 10,000 needed to get on the ballot. Nader backers in Missouri say they still are trying to figure out a way to get the Independent candidate on the ballot in that showdown state.

A familiar face from the Clinton era will soon be joining the Kerry campaign. Former White House press secretary Joe Lockhart's campaign role has yet to be determined, but a Kerry campaign spokeswoman says he will "help bolster the team to bring us to the finish line."

It's official, long-time Bush adviser Karen Hughes is back. Hughes gave up a powerful White House post two years ago to return home to Texas, though she continued to informally advise the president. Now she says she is back on the campaign payroll full time and "the training wheels are off."

When John Kerry decided to launch a counterattack against a stinging ad, he may have been heeding lessons learned by another Massachusetts Democrat. Coming up, the Dukakis dilemma then and Kerry's conundrum now.

Plus, voters are seeing a lot more of Laura Bush. We'll discuss the benefits and drawbacks of her expanded role in the campaign.

And not to be outdone by the Democrats, Republicans unveil their day-by-day convention themes.

With 75 days until the election, this is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

CROWLEY: First Lady Laura Bush has spent the past four years keeping a relatively low profile. But as campaign 2004 moves forward, Mrs. Bush's role has grown.

On the campaign trail, she finds herself speaking out on issues ranging from stem cell research to the economy. With polls showing the president's support weaker among women than men, Laura Bush's presence targets that sizable voting bloc.

Joining me to talk now about the first lady's expanding role in the campaign are "Washington Post" reporter Mark Leibovich and James Carney, White House correspondent for "TIME" Magazine.

Let me ask you first -- let's just go to you Mark. Do you agree with the premise that she now seems to be taking on substantive issues?

MARK LEIBOVICH, "WASHINGTON POST": Somewhat more than before. I mean, she -- you know, you could argue that she's always done soft issues. Last week, she talked about stem cells. But I think, you know, the presence -- her presence itself is really the story.

I mean, she's been out far more than she was four years ago. And you could argue that a lot of this has to do with Teresa Heinz Kerry's fairly controversial profile in recent months. CROWLEY: And James, what does she do for George Bush? What does she bring to the campaign trail?

JAMES CARNEY, "TIME" MAGAZINE: Well, I think there is one reason why Laura Bush is out there more often, and that's because her husband needs her. In 2000, Bush ran creditably as governor of Texas as a moderate compassionate conservative. His record in Texas reflected that and he did an effective job selling himself as, more or less, a moderate, a new kind of Republican.

Now he's got a record as president that a lot of people don't see as that moderate, and his compassionate credentials aren't that strong. Laura brings a softer edge to -- to his presidency.

And she's very likable, she was liked by Democrats and Republicans alike in Texas. And really, no one has a bad word to say about her. So deploying her makes all the sense in the world.

CROWLEY: So -- I mean, Mark, so basically, she softens him up. It's interesting that stem sell research and tax cuts are the two things -- you know, the things that they -- the Democrats seize on as, oh, he's just a mean president. So they send her out on these. So what are the risks here for her, for the president? Are there any?

LEIBOVICH: I can't really see any. I mean, she's incredibly disciplined. She really almost never makes news. And when she does, you know, on the stem cell issue, it's over -- it's one line, and it's not a terribly controversial line.

So, yes, she's a good campaigner. She's obviously not going to, you know, make any unwanted headlines. And for as much as she's a character witness for her husband, who, you know, as a lot of people agree, does need some "softening up" with a lot of swing voters, she's nothing but an asset.

CROWLEY: I wanted to show you, James, before I get to you a poll. It's a Pew poll, asking voters their view of Laura Bush.

Those who planned to vote for John Kerry have a 52 percent favorable view of Laura Bush and only a 38 percent unfavorable. That's vastly different from how those who are going to vote view Teresa Kerry, as you might imagine.

CARNEY: Right.

CROWLEY: Does she risk any of that popularity or is it too short a time?

CARNEY: Well, I think as long as she keeps it very on script and doesn't -- doesn't say anything particularly controversial, I think, you know, her favorability ratings will remain high. It's hard to image, again, how anybody could have an unfavorable impression of Laura Bush, because we haven't had much of an impression at all except of a woman who's a very nice and loyal wife -- spouse to her husband. But the contrast with Teresa Heinz Kerry will -- will work to their advantage, to the extent that there are any voters out there who will make a decision in this race based on the candidates' wives.

CROWLEY: Well, stop answering my question. You know, Mark, does anybody say, you know what? I really like that Laura Bush so I'm going to vote for her husband, or I really dislike that Teresa Heinz, so I'm not going to vote for her husband?

LEIBOVICH: You know, I doubt it. I mean, I really don't think I've met many people with any people in my life who would vote based on, you know, who a spouse is. Although, in close election, if all things are equal in the mind of a voter, you know, you are voting for an entire package and an entire family. And for as much as Teresa Heinz or Laura Bush is seen as part of the presidential entity that -- that you're going to be voting for, I mean, it could turn a very, very close election, if not a close dilemma in one's mind.

CROWLEY: James, it seems to me that at least since, gosh, Eleanor Roosevelt, I mean, people have paid attention to what first ladies do. Is that just sort of a curiosity? Do they expect anything of their first ladies?

CARNEY: Well, look, Hillary Clinton certainly -- I think Hillary Clinton moved votes. There were Democrats who were very passionately supportive of her, and certainly opponents who disliked her even more than they disliked her husband. So there is that capacity here.

Laura Bush is more a reactive quality here. Teresa Heinz, if she causes trouble for her husband in this race by saying the wrong thing, will help Bush. And Laura will be -- will take advantage of that by the contrast. But I don't think Laura herself will move votes.

Jay Carney, "TIME" Magazine, Mark Leibovich, "Washington Post," thank you guys so much.

CARNEY: Thank you.

LEIBOVICH: Thank you.

CROWLEY: Still ahead on INSIDE POLITICS, a trip back in time to a 1988 campaign ad and the lessons it's teaching today's presidential candidates.

(COMMERCIAL BREAK)

CROWLEY: Political attention and controversy has been focusing on an outside group's TV ads, questioning Democrat John Kerry's Vietnam service. We wondered how those ads compare with a notorious one from the 1988 presidential campaign and what type of lessons have been learned since then. Our Bruce Morton offers this perspective.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): In 1988, a group called Conservatives for Freedom ran this attack ad against Democratic presidential nominee Michael Dukakis.

UNIDENTIFIED FEMALE: This man is governor of Massachusetts. This man was convicted of murder and sentenced to life in a Massachusetts prison. Then, this man let him out of prison on a weekend furlough. While on furlough, this man ran away to Maryland, twice raped a woman and tortured her husband.

Now this man is running for president. President?

MORTON: Dukakis did not respond. George Walker Herbert Bush won the election. Lesson? When attacked, fight back.

This time the attack is on John Kerry's record as a swift boat commander in Vietnam. Again, the ad is from an outside group, Swift Boat Veterans for Truth.

UNIDENTIFIED MALE: John Kerry lied to get his Bronze Star. I know. I was there. I saw what happened.

UNIDENTIFIED MALE: His account of what happened and what actually happened are the difference between night and day.

MORTON: One of the vets said Kerry's boat was not under fire. Kerry, (UNINTELLIGIBLE) counter-attack with an ad featuring a vet who says Kerry saved his life.

UNIDENTIFIED MALE: All these Viet Cong were shooting at me. I expected I'd be shot. When he pulled me out of the river he risked his life to save mine.

MORTON: Kerry and Republican Vietnam vet John McCain urged President Bush to repudiate the attack ad. He has not. At the same time, another outside group, MoveOn.org, sponsored an ad attacking Bush's service in the National Guard.

UNIDENTIFIED MALE: The second man sailed to the top of the list on his father's name, was trained as pilot, but failed to show up for a required physical. He was grounded, wasn't seen for months, and then was released eight months early to go to Harvard Business School. This election is about character...

MORTON: Kerry was asked to repudiate that ad and did in a statement. But his surrogates make the same point in campaign appearances.

WESLEY CLARK (D), FMR. PRESIDENTIAL CANDIDATE: One man volunteered to serve his country, he volunteered to go to Vietnam, and he volunteered a third time to command a swift boat in one of the most dangerous activities in the war. The other man scrambled and used his family's influence to get out of hearing a shot fired in anger. That's the comparison.

MORTON: And then Kerry attacked him personally.

KERRY: Well, if he wants to have a debate about our service in Vietnam, here is my answer: bring it on.

MORTON (on camera): The old rule was, if you're attacked, hit back. Now, it's attack, counterattack, counter-counter, counter- counter-counterattack. The beat goes on.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

CROWLEY: Ahead on INSIDE POLITICS, the story that won't let go. The Kerry and Bush camps respond to the controversy over the Kerry Swift Boat ads. And we look at why it's even a story and why it matters.

And the latest presidential campaign pitches on how to make health care more affordable.

Stay with CNN, the most trusted name in news.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: With a hot battle going on right now in Iraq, why are we spending so much time talking about a decades-old war? How will this new fight over an old battle affect the race for the White House?

The presidential campaign isn't the only contest this November. Can the Democrats wrestle the House back from the Republicans?

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

(END VIDEOTAPE)

CANDY CROWLEY, HOST: Welcome back. I'm Candy Crowley, sitting in for Judy this week.

There is no shortage of angry finger-pointing between the Bush and Kerry campaigns today, all stemming from a now famous ad attack on Kerry's Vietnam War record.

The spot, by those who call themselves Swift Boat Veterans for Truth, accuses Kerry of lying about events that earned a Bronze Star during the war.

In Boston today, Senator Kerry said the ad does not tell the truth, and he laid some of the blame for it on President Bush.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: But here's what you really need to know about them. They're funded by hundreds of thousands of dollars from a Republican contributor out of Texas. They're a front for the Bush campaign. And the fact that the president won't denounce what they're up to tells you everything you need know; he wants them to do his dirty work.

(END VIDEO CLIP)

CROWLEY: The Kerry camp is apparently concerned enough about this controversy that it's ending its ad hiatus and rolling out a new commercial, defending the Senator's war record. It features veteran Jim Rassmann, who saved -- who says Kerry saved his life in Vietnam.

To pay for the ad Kerry has to dip into precious federal funds for the general election season, something he had not wanted to do quite yet.

The Bush campaign and the White House are flatly rejecting Kerry's charge that President Bush is letting the swift boat ad, quote, "do his dirty work." Bush is in Crawford, Texas, which is -- what happened -- which is where Jill Dougherty is -- Jill.

JILL DOUGHERTY, CNN CORRESPONDENT: Well, Candy, you know the sniping has been going on back and forth for quite a while. But today, the rhetoric heated up.

Scott McClellan, a spokesman for the president, asked about the issue, and he called Kerry's charges false. He said that President Bush has not and will not question the military record of John Kerry.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Senator Kerry knows that his latest attack is false and baseless.

The president has condemned all of the ads by the shadowy groups. We have called on Senator Kerry to join us in calling for an end to all the unregulated soft money that is going on in this campaign.

And the president has stayed focused on the issues and choices that the voters face. That's what this ought to be about. There's some clear choices that the voters face for the future. This should not be about the past.

(END VIDEO CLIP)

DOUGHERTY: So, as has happened before, McClellan was pressed on whether the president would actually condemn that particular ad. McClellan would not go that far, but he said the president has condemned all of those so-called soft money attack ads, and has called upon the Kerry campaign to join them.

Kerry, they say, has not agreed to do that. And therefore in the eyes of the Bush campaign, at least in the eyes of the White House, that means that Kerry implicitly or tacitly goes along with those ads.

And Candy, just one note. Here in Crawford, the president is taking a few days off, a little downtime, but he's also working on the speech that he will give, the acceptance speech at the Republican National Convention.

CROWLEY: Jill, let me ask you, going back to the swift boat controversy. It's very clear that the Kerry campaign wants to put -- wants to go back on the offense and put the president on the defense, saying, "Hey, you'd better apologize for this ad. John McCain says that you should. We say you should." Do you get any sense that the White House, either from listening to Scott or talking to anyone else, that the White House feels any pressure about that?

DOUGHERTY: Not really. I'd have to say that in just the past couple of weeks, that has come up numerous times. And what Scott McClellan has said is verbatim, the same thing that he said a few weeks ago, which is they're not going to go there. They are not going to talk about that specific ad. But in the same breath they will condemn all of those ads.

So that's -- I do not see that they're going to budge on that one, Candy.

CROWLEY: Our Jill Dougherty in Texas with the president. Thanks, Jill.

Kerry's decision to personally respond to the swift boat ad attack could put the allegations to rest or it could stir things up. Our senior political analyst considers how the campaigns got to this point.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): There's no shortage of issues in this campaign: terrorism, war, jobs, healthcare, energy. So why are we stuck in a debate about something that happened more than 35 years ago?

Charges...

UNIDENTIFIED MALE: John Kerry has not been honest about what happened in Vietnam.

SCHNEIDER: And counter charges...

UNIDENTIFIED MALE: The people attacking John Kerry's war record are funded by big money supporters. Listen to someone who was there.

SCHNEIDER: Issues are not what got Kerry the Democratic nomination. Democrats agreed with Howard Dean on the issues, mostly notably, Iraq.

Democrats preferred Kerry because of his personal qualities. They saw him as more electable, someone who could beat Bush. Why? His Vietnam War record. Kerry made it the centerpiece of his campaign.

KERRY: I thought it was important if you had a lot of privileges as I had had, to go to a great university like Yale to give something back to your country.

SCHNEIDER: After Kerry showcased his war record at the Democratic convention, conservatives pounced, like Rush Limbaugh, on his radio show. RUSH LIMBAUGH, RADIO TALK SHOW HOST: You didn't start basing your whole career and future on your four months service in Vietnam until the convention. And when you did that, yes, these guys finally came up.

SCHNEIDER: Kerry now feels he has to fight back with something more than press releases.

KERRY: Of course, the president keeps telling people he would never question my service to our country. Instead, he watches as a Republican funded attack group does just that.

Well, if he wants to have a debate about our service in Vietnam, here is my answer: bring it on!

SCHNEIDER: Brave words. But the fact is, Kerry is not likely to beat Bush on personal qualities. Polls show Bush has a clear advantage over Kerry as a strong leader, who is good in a crisis, down-to-earth, and sticks to his positions.

Kerry's personal strength? Like any good Democrat, he cares about people.

But when you talk about most issues, the advantage shifts to Kerry. Voters rate Kerry better on the economy, jobs, education, and healthcare. Bush's issue advantage is on terrorism. That's it.

What about Iraq? The two are rated about equal. Kerry has to get the debate off personal qualities and onto the issues. His supporters know that.

GEN. WESLEY CLARK (D), FORMER PRESIDENTIAL CANDIDATE: Stop the swift boat campaign, pull it all off the air, let's get down the issues.

SCHNEIDER: Kerry's opponents are doing their best to make sure that doesn't happen.

(END VIDEOTAPE)

SCHNEIDER: Kerry has to reverse strategies from the primaries: get off his war record and get onto Bush's record as president. And so far, that hasn't happened.

CROWLEY: Thanks, Bill. Believe it or not, we're going to move onto another topic. I appreciate it.

The swift boat flap is overshadowing Kerry's other theme of the day, healthcare. He held a front porch conversation on that subject in Derry, New Hampshire.

He's highlighting a new campaign report that says the high cost of healthcare is a key factor in keeping the jobs market weak.

Meantime the president has made something of a concession in the political debate over healthcare. He told Wisconsin voters yesterday that it makes sense for Americans to import cheaper medicine from Canada and elsewhere, as long as it's safe.

His administration is studying the idea, which John Kerry already supports.

A quick note on Senator Kerry's itinerary. Democratic Senator Bill Nelson of Florida has invited Kerry to the state to tour damage from Hurricane Charley. The Kerry campaign says that could happen as soon as tomorrow.

President Bush toured the storm damage last weekend shortly after the hurricane hit.

The political storm over Kerry's Vietnam War medals isn't letting up. When we come back, the take from the left and the right over the swift boat controversy.

A governor under siege. Can New Jersey's Jim McGreevey last in office until November?

And later, a House fight. Can the Democrats retake the House of Representatives from the Republicans?

(COMMERCIAL BREAK)

CROWLEY: Joining me now, Democratic strategist Donna Brazile and Bay Buchanan, president of American Cause. Girl's day on INSIDE POLITICS.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Thank you.

CROWLEY: Listen, the swift boat ads. Why -- why after two weeks of letting it out there does John Kerry all of a sudden go in front of the firefighters and slug it out?

BRAZILE: I think it was important that Senator Kerry draw the line, and especially this week, you know, ten days before the Republican convention. These so-called hired guns are out there, ranting and raving about John Kerry's service.

And look, what he did today was he blew them completely out of the water. He exposed them. He said they don't know what they're talking about. He served. He served with honor and you know what? He has shrapnel to prove.

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: You know, the problem here is he's given it more days if not some more weeks here. You want one of these stories to go away in a campaign, you give them their little time and you move on.

And he -- he's obviously brought it back up mainly for one reason: his polls are showing it's hurting him. And so he's now going to try to show it somehow involved the president, blame this on the president, try to hurt the president with it.

The president never made this an issue, Vietnam an issue in this campaign or his record, Kerry's record. He's always recognized him as somebody who went and respected that. The person who made Vietnam an issue in this campaign is Mr. Kerry, four days of a convention. This is why he says he's qualified to be commander in chief.

BRAZILE: But the real issue is hiding behind these illegitimate third party organizations. John Kerry yesterday denounced and said to MoveOn.org to pull the ads. He was right to say that.

John McCain called on President Bush to denounce these ads a couple of weeks ago. And Because President Bush has failed to act, John Kerry, of course, today once again repeated the assertion that the president should call on these veterans to stand down. That's what he did. He blew them out of the water.

CROWLEY: Do you think there's a little over-the-topness in that? You know, they're doing George Bush's dirty work for him? I mean, is -- is this group doing George Bush's dirty work any more than MoveOn.org is doing it for John Kerry? Or any of the other 527s? Because on the Democratic side there are many more 527s. So...

BRAZILE: There are a lot of 527s on both sides. But look, what Kerry said today is that this -- this group of so-called veterans lied. They did not serve. They served in Vietnam, but they did not serve with Senator Kerry.

The men who served with John Kerry, who knows him best, they have stood up. And they have said they know what happened during that period of time that John Kerry served. And John Kerry was right to blow them out of the water.

BUCHANAN: You know, when you say that the president is somehow hiding behind these donors and this group, that is completely a false accusation. There's no evidence, and in fact, it's completely not true. And there will never be...

BRAZILE: Then denounce it.

BUCHANAN: The president, he has denounced all these ads, all these 527 ads. He think this soft money ad should not be going on. He's denounced them all. That's something Kerry -- Kerry wants to pick and choose. He likes these; they work for him. These don't.

BRAZILE: No. He's been very consistent about them all.

CROWLEY: It -- with one of the MoveOn.org ads, it did take on the swift boat a week ago before the new one came out that did suggest again that the president's father got him out of the Vietnam War.

You had Wesley Clark out there, who's, you know, a front man in the best of ways for the Kerry campaign, saying exactly what the ad said. But they're not condemning that.

So do you worry that, you know, you're looking at this kind of both ways. Aren't both sides kind of equally culpable of using these?

BRAZILE: I think it's important John Kerry not sleep through these attacks on his character and sleep through the attacks on his record.

And absolutely, General Clark is an honorable public servant. To go out there -- I just want to still Bay's fire a little bit, because I know how much she loved General Clark like myself.

But look, General Clark did the right thing standing up for a fellow Vietnam veteran. And it's important that the campaign respond to these attacks. Look, the attacks are coming every day...

BUCHANAN: General Clark...

BRAZILE: ... not just from this organization, but it's coming from all quarters.

BUCHANAN: The president has been hammered and hammered from these same types of groups from Move On and the others. And you didn't hear a peep, just like Candy said. He is picking and choosing the ones he wants to denounce, and he's picking and choosing the ones he wants the president to denounce.

CROWLEY: So Bay, why not just say, "Look, I denounce this?" Why not -- I mean, why not get it off the board? If he thinks it's ugly politics, why go on? Because there's no real evidence that it's helping George Bush. In fact it may be hurting him.

BUCHANAN: I agree that at some stage you could, indeed, hurt the president. But the key here is, you know, the president has denounced them all outright.

If he says, "Listen, I don't want -- I don't think they should do this," there's going to be questions. You're all going to say to him, "What about this? What about this?" He's going to involve himself in this debate. He should just stay completely removed about it and say, "I denounce them all."

(CROSS TALK)

CROWLEY: Governor McGreevey, if we have the time. OK. The governor now appears to be saying that he is going to be able to stay until November 15. Yes or no? Is he...

MCGREEVEY: He should stay. He should allow for an orderly transition. He did the right thing in stepping down. And there is the state business at hand. A Democrat will replace him. And he should step down on November 15.

BUCHANAN: He's a completely corrupt man who's hiding behind the fact that he's also gay. He's a disgrace to his family and office of the governorship, and he's really, really humiliated the people of New Jersey. Get out now.

BRAZILE: He has a lot of state business to continue.

BUCHANAN: Come on, guys.

CROWLEY: Let New Jersey be New Jersey. Donna Brazile, Bay Buchanan, thank you very much.

Lest we forget, when November rolls around, there will be a lot more at stake than a presidential race. Coming up, the quest for Congress. Could the upcoming House races change the face of Washington?

(COMMERCIAL BREAK)

CROWLEY: The lion's share of our attention has been focused in recent months on the coming presidential election, but there are many congressional races at stake this November, as well. In fact, all of them.

Joining us those contests and their potential impact are California Representative Robert Matsui, chairman of the Democratic Congressional Campaign Committee, and his Republican counterpart, Representative Thomas Reynolds of New York.

Thank you both.

I want to start out, Congressman Matsui with a sore point here, and that is Rodney Alexander. He has made your hill a little steeper, has he not, by going from Democrat to Republican?

REP. ROBERT MATSUI (D), CALIFORNIA: Well, we're not quite sure yet, because we're going to try to take him off the ballot and obviously make this a fair (ph) race. In fact, if we are successful in that effort.

That brings us 12 seats down, if in fact he remains on the ballot, provided we can't find anybody to run against him.

And we have right now 38 congressional districts that are currently held by Republicans that we have first year candidates. So we're very confident, as long as the national mood remains as it is.

And obviously, the American public right now is very, very skeptical of this administration and the Republican House and Senate, because things aren't going well.

CROWLEY: Well, I want to get to the down ballot effect, but I first want to ask Congressman Reynolds, Nancy Pelosi, of course, has said that, in fact, if the election were to happen today, the Democrats would take over the House.

REP. THOMAS REYNOLDS (R), NEW YORK: She also said she'd put her credibility on it, and quite frankly, it just isn't going to happen.

Rodney Alexander's switch to a Republican was devastating news to the Democrats. It was a huge setback. He will be on the ballot. It is a frivolous lawsuit that's been entered by some of the Louisiana Democrats.

His popularity is strong enough, he will win no matter what his title of Republican, Democrat, independent behind his name. Rodney Alexander is a winner. He'll be with the Republican conference. When you look at the math, the math is just plain simple. And when you look at Charlie Cook, who's been an independent observer of politics in the House, it's clear that he says the Democrats have a small, snowball's chance in hell of recap touring the majority this fall. I believe him.

CROWLEY: So, I mean, how many -- Let me first sort of set the table, which is how many seats would you say, Congressman Matsui, are in play?

MATSUI: We have 38 Republican seats right now, as I mentioned, which we have first year candidates. And we have four in Pennsylvania. These are turnover seats. We have two in Colorado, and two in Connecticut, two in Washington state and a scattering of states throughout the country. You have Georgia, in which the Democratic performance is 62 percent.

As I said, if the election were held today, we would take the House back. We're 10 points ahead on the generic question in the CNN poll, and we're 22 points up in terms of right track/wrong track.

And Tom Reynolds could be whistling by the grave. But the reality is that since he's worried; I know he's worried. And he should be worried. I think we have a good shot.

Mainly because the American public, the mood has shifted completely. People are very skeptical of this administration. They don't like the idea of the war going on, and middle class Americans aren't gaining from the so-called economic recovery.

CROWLEY: Congressman Reynolds, let me give you a chance to respond. But I also want to know, you know, the conventional wisdom is, look, these races are about local issues. They are not about who's at the top of the ballot, and yet the war is such an overpowering issue.

Do you see that changing this year?

REYNOLDS: Candy, I've said so long and it's just so true, that House races, we build them from the ground up. Each race is customized to the district they're in.

And people are worried on House races what their congressman thinks about kitchen table issues: economy, jobs, taxes. And we think we have a record, and we have the opportunity to get that message out to voters.

When you look at generic polls, I've seen generics all over. We're used to running behind. July and October in 2000 and 2002 had the Republicans down in the generic ballot.

Just last week I think it was the Gallup poll had us even. That's not what's important. What's important is how the structure for House races is coming together.

I think Charlie Cook said it well when he said there isn't a snowball's chance in hell that the Democrats can get it. And let me just show you the math.

There's 195 Republican seats now that are in the bank that are Republicans to be reelected. Charlie Cook in 10 years has only predicted two wrong when he says that likely Republican seats, there's 19.

There is 214 seats. We have four to get out of 34 Republican leaning or toss-up seats. We are going to have not only 218. We're going to bring back our 229.

CROWLEY: Congressman, let me interrupt, because I want you to respond to that. You've got about 30 seconds, but I want to know, is it that George Bush hurts down ballot Republicans or that John Kerry helps down ballot Democrats?

MATSUI: Well, I don't think there's any question John Kerry's a great candidate for us. But the reality is the Republicans have been rubber stamped for George Bush, and they are responsible for the economy. They're responsible for what's going on internationally, and they're going to end up paying for it.

I'm glad that Tom Reynolds is saying let's join the issue on the economy, jobs and obviously the whole issue of international relations, because Democrats are going to win that battle.

CROWLEY: Congressman Robert Matsui for the Democrats; Thomas Reynolds for the Republicans. I wish we had more time. Come back.

REYNOLDS: Thank you.

MATSUI: Thanks.

CROWLEY: Next on INSIDE POLITICS, he may be one of the most recognized U.S. politicians in the world, but not necessarily to some airport screeners in Boston. We'll explain when we return.

(COMMERCIAL BREAK)

(STOCK REPORT)

(COMMERCIAL BREAK)

CROWLEY: Guess who's getting stopped in his hometown airport and labeled a security risk, incorrectly we believe?

At a Senate hearing today Senator Ted Kennedy revealed that he was stopped at Logan Airport in his native Boston not once but several times beginning in March.

The Department of Homeland Security says Kennedy faced the additional screening because his name is similar to someone of concern. In all cases, Kennedy was eventually allowed to fly, but Homeland Security Secretary Tom Ridge called Kennedy to apologize anyway.

So you thought you were the only ones getting hassled. That is it for INSIDE POLITICS. I'm Candy Crowley. "CROSSFIRE" starts right now.

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