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Inside Politics

Growing Political Crisis in Ukraine; Sparring Over Spending; Intel Reform Battle

Aired November 24, 2004 - 15:29   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: People on the march, police on the street. A political crisis unfolds as election results are announced overseas.

COLIN POWELL, SECRETARY OF STATE: We cannot accept this result as legitimate.

ANNOUNCER: President Bush welcomes the king of Spain, but is he still snubbing that country's prime minister?

It may be the time of year to talk turkey, but this November, did Congress prefer pork?

(END VIDEOTAPE)

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

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

We begin with the growing political crisis in the Ukraine and the reaction here in Washington. Secretary of State Colin Powell says the U.S. does not accept the results of Ukraine's presidential elections, citing credible reports of fraud and abuse.

Tens of thousands of demonstrators in the street of Ukraine, the Ukrainian capital, charge that the vote was rigged in favorite of the Kremlin-backed candidate who was formally announced the winner today. The country's election commission says Prime Minister Viktor Yanukovych, beat opposition candidate Viktor Yushchenko by three percentage points. Yushchenko is refusing, though, to concede defeat, and is calling for a nationwide strike, adding to fears of violence in Kiev.

Here in Washington, Secretary Powell called for a full review of the vote, challenging Ukrainian leaders to decide whether they are on the side of democracy or not.

(BEGIN VIDEO CLIP)

POWELL: If the Ukrainian government does not act immediately and responsibly, there will be consequences for our relationship for Ukraine's hopes for Euro-Atlantic integration and for individuals responsible for perpetrating fraud.

(END VIDEO CLIP)

WOODRUFF: In a show of support for the opposition candidate, demonstrators rallied at the Ukrainian embassy here in Washington.

President Bush also is following the developments of the Ukraine, as he hosts the king of Spain at his Texas ranch. Our White House correspondent, Suzanne Malveaux, joins us now from Crawford.

Hello, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hello, Judy.

Of course, President Bush and the White House keeping a very close eye on the developments in the Ukraine. As you had mentioned before, Secretary of State Colin Powell decrying this election really as a fraud, saying they do not accept the election results.

The reason why the Bush administration is concerned about this, they feel that it is a blow to democracy in that region with Russian and Ukrainian authorities essentially on one side, declaring its candidate the winner, while the U.S., Europeans, Ukrainian people supporting the opposition. Now, the Bush administration is putting pressure on the Ukraine government to investigate the election results and to cooperate with international observers.

(BEGIN VIDEO CLIP)

POWELL: It is time for Ukrainian leaders to decide whether they are on the side of democracy or not, whether they respect the will of the people or not. If the Ukrainian government does not act immediately and responsibly, there will be consequences for our relationship for Ukraine's hopes for Euro-Atlantic integration and for individuals responsible for perpetrating fraud.

(END VIDEO CLIP)

MALVEAUX: Now, U.S. authorities are also concerned with Russia's role in this whole debacle. They feel that it is only increasing, exacerbating the tension between the U.S. and Russia.

It was just five days ago, Judy, that President Bush met with Russian President Vladimir Putin in Chile at the APEC Summit. That is where senior administration officials say that privately, behind closed doors, President Bush expressed a number of concerns to Putin about retreating from those democratic reforms, about crushing the media, and about essentially a centralized authoritative regime. They feel, of course, that is only going to make matters worse in that region -- Judy.

WOODRUFF: Now, Suzanne, we know the president has a royal visitor today, the king of Spain. We want to ask you about that, because we know relations between the United States and Spain strained this year after the new Spanish prime minister pulled troops out of Iraq.

MALVEAUX: Well, Judy, you could actually call it really as extending an olive branch, Texas-style. We saw President Bush, his father, the first lady, drive up in a pickup truck to greet the king and the queen of Spain. They are taken to the Crawford ranch, where they celebrated a Turkey feast.

Now, this was a visit that was initiated by the king because essentially he was in the country. But at the same time, both of the leaders recognize here that this is only going to improve those relationships, specifically the relationship between the prime minister of Spain, Zapatero, who won his election based on the -- essentially the platform that he was pulling out Spanish troops from Iraq.

He did just that. He made several phone calls to President Bush to congratulate Bush on his reelection win.

President Bush not returning his calls. But we are told that the president sent a formal letter to Zapatero saying, yes, I acknowledge your calls; yes, I believe that our governments can work together -- Judy.

WOODRUFF: All right. Suzanne Malveaux. Nothing like having the king and queen visit just before Thanksgiving. We appreciate it.

Now we turn to Capitol Hill. This may be the day before Thanksgiving, but that's not stopping lawmakers from some last-minute political maneuvering and arguing about the spending bill.

Let's check in with our congressional correspondent, Ed Henry -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Judy.

It would not be Thanksgiving without a budget standoff on Capitol Hill. As you know, Congress can sometimes resemble a dysfunctional family that argues around the Thanksgiving table. Today, no exception.

In fact, fighting about the budget. And that's because House Republicans have three problems.

Number one, the government was about to shut down because they did not finish that omnibus bill, that some 3,000-page behemoth that got stalled on Saturday. The second problem is, why did it get stalled? It got stalled because of that tax provision that was added by a congressional staffer at the last minute.

No one has been able to track down exactly how it got in. But there's been a lot of bipartisan outrage about the fact that this provision would have allowed members of Congress to look at individual tax returns.

The third problem that Republicans have is they now want to fix it. They want to take that tax provision out. But Democrats are refusing to let them fix it.

The Democrats today basically blocking unanimous consent on an effort by Republicans to take this offensive provision out that both sides want out. The reason that Democrats are not letting it out is because they want to score some political points right now.

They want Republicans to stew in this mess a little bit. Congressman David Obey, Democrat of Wisconsin, was on the House floor today, lashing out at Republicans for blaming staff for the mistake, as I mentioned. He pointed out that two congressional staffers had actually fainted during these negotiations because they had not slept for two days.

Obey said the real problem is that these bills are being rushed through without lawmakers getting a look at them. And he said it's time to fix it. And to do that, he quoted a former congressman, Dick Bolling.

(BEGIN VIDEO CLIP)

REP. DAVID OBEY (D), WISCONSIN: The Congress has egg on its face. The majority has disgraced the Appropriation Committee's ability to conduct oversight still has not been addressed. If Dick were around today, he would say "Let's stop the bitching and get about the fixing." That's exactly what we ought to do.

(END VIDEO CLIP)

HENRY: As I mentioned earlier, they're trying to get to the fixing. But Democrats are trying to score points here. Republicans also say that, in their estimation, it's the height of hypocrisy because the Democrats, when they were in power in the House, in particular, more than a decade ago, they used to have same-day consideration of things, as well. They used to rush things through as well.

And Republicans say this is all about hypocrisy. Also, everyone, though, did calm down just enough today during this pro forma session in the House to pass a continuing resolution. That's the short-term fix here.

That will basically keep the government open through December 8, get them home for the Thanksgiving holiday, let everyone calm down. And they're expected to come back on December 6 and 7, try to finally complete this budget process. And maybe also deal with the 9/11 intelligence reform bill -- Judy.

WOODRUFF: Where does that stand, Ed?

HENRY: Well, you know, Democrats also used this pro forma session today to try to also score political points on the 9/11 bill. House Democratic Whip Steny Hoyer said that it's long past due to pass it.

He also lashed out at the spokesman for House Speaker Dennis Hastert, John Thery (ph), who has been quoted as saying that there is no real point, no good would have been done in trying to pass this 9/11 bill with the Republican and Democratic votes this past weekend. Steny Hoyer jumped all over that today.

(BEGIN VIDEO CLIP) REP. STENY HOYER (D), MARYLAND: If the 9/11 Commission report is put on this floor, as reported out of the Senate, and as agreed to in the conference committee on this bill, it will be passed overwhelmingly in this House. And I will say to my friend, the spokesman for the speaker, the good is that the American people will be well-served, whether or not a majority of your conference agrees. That is the good.

(END VIDEO CLIP)

HENRY: I spoke to John Thery (ph) a few moments ago, the spokesman for the speaker. He said Democrats are once again being hypocritical because they're trying to push through the 9/11 bill, even though a lot of provisions have been added to that in conference committee, and not a lot of lawmakers outside of that conference committee have been able to see it.

So they're saying -- on one hand, the Democrats are saying, oh, boy, the omnibus got rushed through, but now they want the 9/11 bill rushed through, as well. The bottom line, though, is that regardless of the games going on back and forth, Congressman Jim Sensenbrenner, the Republican, and Duncan Hunter, the Republican of California, they have been blocking this deal on 9/11.

And right now, it looks like, Judy, they are digging in. They are not about to let this deal go through. The House leadership hopes that they can do this in early December. But right now, I can tell you that both parties are very pessimistic on the possibility of a deal -- Judy.

WOODRUFF: And a lot may hinge on how much the president weighs in on this. And that we're going to wait to find out.

HENRY: That's right.

WOODRUFF: Ed Henry, thank you very much.

HENRY: Thank you.

WOODRUFF: On this Thanksgiving eve, many Americans are finding themselves stuck at the airport because of bad weather. We'll get an updated travel forecast ahead.

Back on the political beat, we'll continue a grim turning point in American history that did not get that much attention this year.

And later, an update on the recount in Washington State. Will we know who won the governor's race today, or will the cliffhanger continue?

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Americans give the Centers for Disease Control the highest approval rating among major government agencies according to a new survey. The Harris Poll shows that the CDC received positive marks from 84 percent of those polled.

The Federal Aviation Administration, the National Institutes of Health, the Food and Drug Administration and the FBI all round out the top five. At the bottom of the list, receiving just over a 50 percent approval rating, were the IRS, the CIA, the Environmental Protection Agency, and in the very last place, the Social Security Administration.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: It is 22 days since the Election Day, November 2. And finally, officials in the state of Washington are able to declare that Republican Dino Rossi has won the governor's race in that state. That report just coming into to CNN.

We know that Christine Gregoire, the Democrat, was facing Dino Rossi, the Republican. There was a recount, an automatic recount kicked in because the results were so close. And the word is just coming into us from The Associated Press that Mr. Rossi has been declared the winner. We're going to have a live report from Washington State at the top of the hour.

On this day before Thanksgiving, millions of Americans are on the road, riding the rails and packing the nation's airports. And the weather in parts of the country is a mess.

(WEATHER REPORT)

WOODRUFF: It looks like no matter where you live, the word to remember is "patience." Thanks very much. And we'll talk to you later.

By the way, you can go to our Web site to find out everything you need to know about the weather and travel conditions as you head out for your Thanksgiving destination. The address: cnn.com/travel.

What does the standoff between President Bush and some congressional Republicans over intelligence reform mean? We'll have more on that when we return.

Plus, remembering a grim period in American history. We'll talk about the anniversary of President Kennedy's assassination with a man who was on the scene in Dallas.

Stay with us.

(COMMERCIAL BREAK)

WOODRUFF: The battle over intelligence reform coming out of the 9/11 Commission is one of the major topics we've been focusing on this week. Jack Valenti, a former aide to President Lyndon Johnson, and a CNN contributor, with me now to talk more about this and what it means for President Bush.

Jack Valenti, here you have a president who says he wants the intelligence reform bill done. But his own leadership in the House isn't going along with him. What does that mean?

JACK VALENTI, FMR. AIDE TO PRESIDENT JOHNSON: Well, it is kind of bizarre. My own judgment is that whatever the president wants he will get.

He's never going to be stronger than he is now coming off of this election. Although, I do know Congressman Hunter and Congressman Sensenbrenner, and they're strong and they're very able people. So they feel very -- I think they feel quite sincerely about this. But I think in the long run, the president will get his way.

WOODRUFF: But why didn't that happen the first go-around? I mean, didn't the president make his position clear enough? The White House says that he did.

VALENTI: I think that we have to draw the curtains back. I think it's, as I said, very strange that the chairman of the Joint Chiefs of Staff would take a position that seems to be colliding with the president.

That's unheard of. And it may be that Secretary Rumsfeld is absolutely correct, that the president's position was evolving, as he said. And that may be true.

But I think we'll find out on December 6 and 7 when they come back. If the president really wants this done, my judgment is he will get it done.

WOODRUFF: How much is really at stake here? I mean, you -- I know you know people on both sides of this debate. Does it really matter whether this reform gets done?

VALENTI: To me, the biggest problem is the lack or the perceived lack of cooperation between all the intelligence agencies: the FBI, the Defense Intelligence Agency, the CIA. And I don't know, maybe 12 or 14 different intelligence agencies.

How do they coordinate? Do they cooperate? Do they really trade information, and quickly?

That's the key. And I believe that if we had some new attack on us, that the lack of that coordination would be run of the great scandals of our time.

WOODRUFF: I interviewed Duncan Hunter, Congressman Hunter, Chairman Hunter on this program two days ago. And he makes a very passionate case for how the military really does need to keep a lock, if you will, a strong say on where those intelligence dollars are spent.

VALENTI: Yes. Duncan Hunter really understands the Pentagon. He understands military affairs very well.

He's -- he's a very capable and competent man. So I would take seriously what he says. But there's some other people who say -- Senator Roberts, for example -- Pat Roberts is saying that that's not so. So it's a question of a -- of a contradiction of views by people who are really able and who understand this thing quite well.

WOODRUFF: Let's talk about the political party you know very well, the Democratic Party. Floundering in the eyes of some people after John Kerry's loss on November 2.

A number of people have taken themselves out of the running for chairman of the party. Iowa Governor Tom Vilsack, among others. Now Howard Dean looks to be the frontrunner. Would he be the right man to lead the Democrats?

VALENTI: I think the Democratic Party is going to be led by Democrats in the Congress. I think the head of the Democratic National Committee has some influence. But the key leadership has got to come from those people who have a vote in the Congress, who shape the public policy of the Democratic Party.

Same thing goes for the Republican Party. Actually, though, of course the Democratic chairman, when you don't have the White House -- he does have more power or she has more power than when you do own the White House. But in the end, it's going to be the leadership in the House, leadership in the Senate. And I think Democratic governors are going to really be the architects of the shaping and forming of whatever policies that the Democrats want to put forward.

WOODRUFF: But Jack Valenti, you know as well as anybody, they are distinctly in the minority. What clout do they have?

VALENTI: Well, I -- things -- politics -- in politics, nothing last. Remember, it took 40 years, but the Republicans took back the House. And now they've had it for 10 years. But things change, and they change bewilderingly fast.

I have said many times I saw Lyndon Johnson win in 1964, just decimated the Republicans. Four years later, Richard Nixon was president.

So things never last. And it depends on how each of those parties begins to form the kind of impact they want to make on the American people. And I think that will count more than whoever's chairman of whatever party.

WOODRUFF: Finally, help us remember for a moment that terrible day in November, November 22, 1963.

VALENTI: '63. I must say, just two days ago, Monday was a very terrible day for me. I was in that motorcade, six cars back of the president when he was murdered, a senseless act of mindless malice. And I was ordered aboard Air Force One by the new president.

And I was there as a volunteer helping with the logistics of that trip. And suddenly, within hours, I'm a newly-hired special assistant to the president. And there's Mrs. Kennedy standing behind -- beside him as he holds up his hands to speak the same words that George Washington did and swear the same oath that Washington did, which was, to me, a kind of divine continuum that the Constitution really worked.

But that day is so seared in my memory. I must say, as I said Monday, I felt desolated as I remembered.

On the other hand, also what it proved, though, that our Constitution is such a supple document. The president is dead, the president lives, the nation goes on.

WOODRUFF: Yes. All of us who were around then were decimated by that. And it's a day that we will never forget in American history.

VALENTI: One final point.

WOODRUFF: Yes?

VALENTI: I think that that day can be summed up in a line from one of William Butler Yeats' poems, when he said, "The ceremony of innocence is drowned."

WOODRUFF: Jack Valenti, thank you for helping us remember that moment in American history.

VALENTI: Thank you, Judy.

WOODRUFF: Thank you. And thank you for being with us. Have a good Thanksgiving.

VALENTI: Same to you.

WOODRUFF: Breaking political news out of Washington State. We'll have the very latest on the recount in the governor's race there. They have a winner. And it appears it's the Republican, but by only 42 votes.

Is another recount in the cards? We're going to go live to Seattle.

(COMMERCIAL BREAK)

WOODRUFF: Just before 4:00 in the East, as the markets get set to close on Wall Street, I'm joined by Kitty Pilgrim in New York with "The Dobbs Report."

Hi, Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Hi, Judy. Thanks.

Well, stocks are modestly higher in quiet pre-holiday trading. The market is closed tomorrow, and Friday is just half a day.

As the final trades are being counted, the Dow Industrials are up about 30 points. Strength in tech stocks pushed the NASDAQ composite up nearly one percent. The government is asking for some outside help to catch up with people who skip out on their taxes. For the first time, the IRS is hiring collection firms to track down delinquent tax money. Last year alone, $120 billion in taxes went unpaid.

They plan to start hunting unpaid taxes next year. But several consumer groups are trying to stop the IRS plan.

Prices for stamps may be going up again. The "Wall Street Journal" reports the postal service is on the verge of asking for a 10 percent increase in postage rates, sending the cost of a first-class stamp from 37 cents now to 41 cents. It will be the fourth and biggest hike in the past few years.

The postal service says it hasn't start the rate change process yet and any increase won't take effect until sometime in 2006.

Finally, there could soon be more radio stations on your FM dial. The Federal Communications Commission today auctioned off more than 250 permits for new stations around the country. That's the first- ever open auction. The winning bidders, many of them new to the radio business, will have three years to get their stations up and running.

Coming up at 6 p.m. Eastern on "LOU DOBBS TONIGHT," the Wal-Mart invasion, the giant retailer's encroaching on the military, challenging the base exchange store.

Then, "Exporting America," sending our technology overseas. We take a look at one company that says it's forced to take its cutting edge technology and good paying jobs elsewhere.

And our "Face-Off" tonight, we debate the issue of driver's licenses for illegal aliens. The issue stalled the Intelligence Reform Bill in Congress.

That's the latest. Back to you, Judy.

WOODRUFF: Kitty, thanks very much. And INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: Counting and recounting the votes in Washington state. Twenty-two days after the election, voters there still don't know who their next governor will be. Could they find out today?

Red states, blue states, but is it really that black and white? Our Bill Schneider investigates.

Just in time for Thanksgiving. A family story.

SENATOR-ELECT KEN SALAZAR (D), COLORADO: That's where we learned how to work, we learned how to be a part of a great family.

ANNOUNCER: Two brothers from farm country far from Washington are now headed to Congress. SALAZAR: It is awesome to be your United States senator.

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

(END VIDEOTAPE)

WOODRUFF: Welcome back.

Just a few moments ago, from the Associated Press, results from the recount in the Washington state's governor's race, but another round of reviewing ballots may lie ahead.

Essex Porter of CNN affiliate KIRO in Seattle is following the action.

Hello, Essex.

ESSEX PORTER, KIRO REPORTER: The action continuing to go back and forth. And we have seen that Associated Press report here, but we have not yet been able to confirm that independently in our newsroom. And we're not yet going with that report and that number. There is more work to be done before that can be confirmed.

We can tell you that the recount process has been contentious in some places, especially here in King County, where Democrat Christine Gregoire has a very large edge over Dino Rossi. And if she is to win this election, King County would have to add significantly more votes for her in the recount.

And in fact, when the recount was completed and the numbers posted in King County, she did win significantly more results.

But, should Democrats fall short here, the Democrats are already saying that they will demand a hand recount, a recount they'll have to pay for, at least in part. And Republicans are already demanding that Democrats concede if they do end up behind today.

Listen to the chairmen of both political parties.

(BEGIN VIDEO CLIP)

PAUL BERENDT, WASHINGTON DEMOCRATIC CHAIRMAN: We will fight, and we will fight, and we will fight again to make sure that every vote is counted in this state.

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

BERENDT: And we will not let the Republican Party try to take people's rights away in state and federal court, and we will do everything within our power to beat them back every time.

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

CHRIS VANCE, WASHINGTON REPUBLICAN CHAIRMAN: She should concede the election. She should not drag this state into the Christmas season not knowing who the governor is. And for what? To count them again and again until she finally gets the results she wanted?

(END VIDEO CLIP)

PORTER: With the numbers turning out to be so close here, if indeed it is just a 42 vote difference, can you almost be sure that Democrats will press for at least a partial hand recount, which they'll have to pay for at about 25 cent a vote. At least a partial one.

And then, of course, should the result change, that would automatically trigger a statewide hand state recount of the votes. We very well may not know until close to Christmas -- Judy.

WOODRUFF: And Essex, you're right. The Associated Press reporting a 42-point margin out of 2.8 million ballots cast. Essex, we understand a Libertarian candidate on the ballot may be affecting this somehow?

PORTER: Absolutely. The Libertarian candidate on the ballot is Ruth Bennett. And Ruth Bennett campaigned largely on the idea that she supported gay marriage. Neither the Democrat nor Republican candidate in this race supported gay marriage.

But Ruth Bennett figured that many of the people who might otherwise support a Democrat in this race would be disappointed with Democrat Christine Gregoire and vote for her instead. She has a little over two percent of the vote, and she is definitely a factor.

WOODRUFF: OK, lots of wrinkles to be ironed out in your -- in your state. Essex Porter, CNN affiliate KIRO. Thank you very much. We appreciate it.

PORTER: My pleasure.

WOODRUFF: We're going to be -- you bet we're going to be following that story.

More recount news in today's "Campaign News Daily."

Advocates of a recount in Ohio say they may appeal a federal judge's ruling rejecting a review of presidential ballots. But Ohio Republicans are calling yesterday's ruling yesterday's victory for the state's voters.

The judge denied the Green Party and the Libertarian candidates a recount, saying they could not credibly claim a chance of winning. President Bush beat John Kerry by 136,000 votes in Ohio, according to unofficial numbers.

A recount has been suspended in Puerto Rico's tight governor's race because of a dispute over whether to count certain ballots. Official -- election officials on the island say they want to wait for a ruling by a federal court. Preliminary results show that the candidate who supports Puerto Rico's U.S. commonwealth status is narrowly leading the pro-statehood candidate.

And now, let's consider the varying shades of red and blue this election year. Our senior political analyst, Bill Schneider, is with us.

Bill, we were talking about Washington. It is a blue state, where a Republican may be taking the governor's race -- or rather, office away from the Democrats.

Where have the Democrats made major gains, and are there examples of Democrats making gains in red states, is my question?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Yes, there are some schizophrenic states, I call them. Red for president, blue for everything else. Colorado elected its first Democratic -- Democrat to the Senate since 1992, Ken Salazar. Both houses of the legislature switched from Republican to Democrat, the only state where that happened.

How did it happen? Money. Four wealthy Coloradoans financed independent spending to help the Democrats.

A strong local candidate. Salazar is Hispanic. He has strong local roots and he kept his distance from John Kerry in the Democratic campaign.

There was a budget crisis in Colorado, and that tarnished Governor Bill Owens, the Republican governor, and the Republican state legislature. It might have hurt his ambitions for national office.

And also values. The Republicans in Colorado got all hung up in debates over the Pledge of Allegiance and censorship and same-sex marriage and affirmative action instead of dealing with issues that Coloradoans thought were more serious.

WOODRUFF: What about another red state, Montana?

SCHNEIDER: Montana, same thing happened. Another schizophrenic state.

Democrats won every statewide office but one, even though Bush took 50 out of 56 counties. They gained control of the governor's office for the first time in 20 years and they took control of the state Senate.

How? They had candidates with deep local roots, like the governor-elect, Brian Schweitzer, who's a rancher.

Moderation: Schweitzer ran with a Republican running mate -- he's a Democrat with a Republican for lieutenant governor.

And they stayed away, the Democrats stayed away from same-sex marriage and guns.

They had a very unpopular incumbent. The Republican governor had very negative ratings. And the Democrats talked about kitchen table issues like the economy, in a state where the rural economy is really hurting.

WOODRUFF: And what about the blue states where Republicans made gains?

SCHNEIDER: OK, 19 blue states. Kerry won 19 states. Nine of them now have Democratic governors; nine have Republican governors. Washington could make it ten Republican governors, if the Republican wins. Two-thirds of the senators from the Kerry states are Democrats.

What we see is a pattern. Senate results usually match the state's presidential color. Voting for governor often doesn't. That's true in both red and blue states.

Why? Because it's easier to keep campaigns for governor separate from national politics.

So Massachusetts and California, two very blue states, have Republican governors. Virginia and Oklahoma, two pretty red states, have Democratic governors.

WOODRUFF: We need to come up with different colors for these other states. Shades of purple.

SCHNEIDER: Yes, exactly.

WOODRUFF: Or fuchsia or something like that.

SCHNEIDER: Exactly.

WOODRUFF: Bill Schneider, thank you very much.

We do want to take a closer look at Colorado, one of the states Bill mentioned, and two brothers named Salazar who have helped to give the state its bluish red tinge.

Here now, CNN's Sean Callebs.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): It's about as much fanfare as people in Colorado's San Luis Valley ever see, a hero's welcome for favorite sons John and Ken Salazar, returning to their old high school.

John just won a congressional seat. Ken, the state's senator- elect.

SALAZAR: Today, I'm proud to say that I return as the next United States senator for the state of Colorado.

CALLEBS: An anomaly in this recent election, Democrats capturing new seats and in a state that went to President Bush.

John Jordan is the head of the school district in rural Conejos County.

JOHN JORDAN, FAMILY FRIEND: Even though they're Democrats, they're supported by many Republicans in our community. I think they're the type of people that can -- they're down to earth, they really do have a strong belief in our community.

CALLEBS: This is the San Luis Valley, a desolate looking landscape and a four-hour drive south of Denver, home to ranchers, farmers and for the past 150 years, the Salazar family.

SALAZAR: That's where we learned how to work. We learned how to be a part of a great family.

CALLEBS: The brothers are among eight children and say their heroes remain their mother, Emma, and their late father, Henry. Values they learned growing up both want to take to Washington.

Among their goals, they say, fight for rural America, strengthen homeland security, and mend divisions across the nation.

(on camera) One hundred members in the U.S. Senate, and where do you rank in the seniority?

SALAZAR: No. 100, at very bottom. The fact that I'm ranked No. 100 today doesn't unnerve me at all. There's just a lot of work that I'm going to do.

CALLEBS (voice-over): The Salazars are devout Catholic but support a woman's right to abortion and know with an aging Supreme Court, they could have a say in confirming the next high court justice.

SALAZAR: I don't believe that ideologues or people that have a particular social agenda should be the ones that are appointed.

CALLEBS: John served as a state legislator and the outgoing Colorado attorney general.

They plan on sharing a department in Washington, D.C., but remain adamant, telling friends and family that helped forge their lives that the San Luis Valley will always be home.

Sean Callebs, CNN, Conejos County, Colorado.

(END VIDEOTAPE)

WOODRUFF: We like those hats.

Well, if you're heading home for the holiday, you may find bad weather standing your way. Another travel forecast is ahead. Plus, a hearty serving of political pork. We'll look at the ways Congress stuffed the latest spending Bill.

And later, November flashbacks: political snapshots from one year ago.

(COMMERCIAL BREAK)

WOODRUFF: As we reported earlier, the government's spending bill is now expected to be sent to President Bush early next month. That is after the removal of a provision that would have permitted some legislators and their staffs access to individuals' tax returns.

What won't be removed, though: appropriations for a wide spectrum of government agencies and programs, as well as a whole lot of pork barrel spending.

Bruce Morton has details.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This is it.

BRUCE MORTON, CNN CORRESPONDENT (voice-over): The spending bill is 1,690 pages long and full of surprises.

The president, you may remember, wants man to go back to the moon and on to Mars. NASA, the space agency, got an increase of $822 million in its budget, not quite as much as the president asked for, but an increase.

Some agencies win, some lose. The National Institutes of Health got a 2.1 percent increase, their smallest in years. The Centers for Disease Control got about a four percent increase.

Abstinence education programs went up by more than a third from $76 million to $105 million. Head Start got about a one percent increase. Programs for agricultural conservation and rural development were cut; farm subsidies were not.

Congress cut funds for the Environmental Protection Agency, especially a fund that helps local government with water quality programs.

But the most interesting things may be the little goodies for individual congressional districts. Congress of course loves those. A nonpartisan group called Taxpayers for Common Sense keeps track of them. And you won't believe what they found.

STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: Well, you've got everything from $250,000 for asparagus research in Washington state to $1,500 for potato storage in Madison, Wisconsin; from $25,000 for the study of mariachi music in Las Vegas to a million dollars for a museum dedicated to B.B. King in Mississippi.

MORTON: But they're little, right? They don't really matter? Wrong.

ELLIS: We found 11,722 earmarks, these little provisions for various members of Congress' pet projects, littered across country. And they totaled to about $15.7 billion.

MORTON: And there are more of them every year. John McCain says the system is broken, and it's hard to argue with that.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Thank you, Bruce. Oink-oink.

For many travelers, though, it is a miserable day to be heading out for the holiday. Just ahead, we'll check in again with Orelon Sidney for a look at the latest Thanksgiving travel conditions.

(COMMERCIAL BREAK)

(WEATHER REPORT)

WOODRUFF: Thank you very much.

ORELON SIDNEY, CNN METEOROLOGIST: You're welcome.

WOODRUFF: Well, what a year this has been in the political arena. Just ahead, we'll take a step back in time to one year ago and see how that period helped shape the battle for the White House.

(COMMERCIAL BREAK)

WOODRUFF: On this day before Thanksgiving, it's quiet here in Washington, and even quieter on the campaign trail. So, let's go back in time to a year ago, when the race for the White House was just heating up.

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): November 2003, Howard Dean cemented his position as Democratic front-runner when two of the nation's largest unions endorsed him.

Days earlier, Dean made history by announcing that he would be the first Democratic presidential candidate ever to forego public financing in his prime minister campaign. By dropping out, Dean would be able to raise as much money and spend as much money as possible.

But November wasn't all roses for Dean. Comments he made earlier in the year came back to bite him.

HOWARD DEAN (D), FORMER PRESIDENTIAL CANDIDATE: White folks in the south who drive pickup trucks with Confederate decal ought to be voting with us and not them.

WOODRUFF: The "Des Moines Register" picked up on what Dean said, prompting his rivals to condemn his remarks. Dean defended himself at a CNN sponsored debate.

DEAN: I make no apologies for reaching out to poor white people.

WOODRUFF: Then reversed himself the next day.

DEAN: I deeply regret the pain that I may have caused.

WOODRUFF: November also found John Kerry in a tough spot. With his presidential bid faltering, Kerry ousted his campaign manager, Jim Jordan, and replaced him with longtime Democratic strategist Mary Beth Cahill.

Then, Kerry followed Howard Dean's lead and dropped out of public financing to better compete financially with Dean and with President Bush.

SEN. JOHN KERRY (D-MA), FORMER PRESIDENTIAL CANDIDATE: I wish that Howard Dean had kept his promise to take federal matching money, but he did not. He changed the rules of this race. And anyone with a real shot at the nomination is going to have to play by those rules.

WOODRUFF: Kerry went on to loan his campaign several million dollars by taking out a second mortgage on his Boston home.

Kerry and Dean were hogging the headlines, but there were seven other Democrats still in the running last November. Bob Graham had already dropped out of the race, but John Edwards, Dick Gephardt, Joe Lieberman, Wesley Clark, Dennis Kucinich, Al Sharpton and carol Moseley Braun were all campaigning.

As a sitting president with no primary opposition, George W. Bush wasn't as overtly into campaign mode as the Democrats in November 2003, but re-election was very much on the mind of the White House.

Bush began the month by receiving a political gift from a Democrat. Senator Zell Miller of Georgia announced that he planned to back Bush, because he felt the entire Democratic Party had drifted too far to the left.

(END VIDEOTAPE)

WOODRUFF: And our apologies. There was a mistake in the piece. The picture you saw that we said was Jim Jordan, the man John Kerry fired as his campaign manager, that picture was not Jim Jordan. It was Jim Johnson, who was an adviser to the John Kerry campaign. Our mistake.

And that's it for this Wednesday's INSIDE POLITICS. I'm Judy Woodruff. Be sure to watch INSIDE POLITICS tomorrow for our annual Thanksgiving treat. Bill Schneider will be here to present his political Turkey of the Year Awards. It's a holiday tradition you don't want to miss.

Have a good evening and be safe in your travels.

"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 November 24, 2004 - 15:29   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: People on the march, police on the street. A political crisis unfolds as election results are announced overseas.

COLIN POWELL, SECRETARY OF STATE: We cannot accept this result as legitimate.

ANNOUNCER: President Bush welcomes the king of Spain, but is he still snubbing that country's prime minister?

It may be the time of year to talk turkey, but this November, did Congress prefer pork?

(END VIDEOTAPE)

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

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

We begin with the growing political crisis in the Ukraine and the reaction here in Washington. Secretary of State Colin Powell says the U.S. does not accept the results of Ukraine's presidential elections, citing credible reports of fraud and abuse.

Tens of thousands of demonstrators in the street of Ukraine, the Ukrainian capital, charge that the vote was rigged in favorite of the Kremlin-backed candidate who was formally announced the winner today. The country's election commission says Prime Minister Viktor Yanukovych, beat opposition candidate Viktor Yushchenko by three percentage points. Yushchenko is refusing, though, to concede defeat, and is calling for a nationwide strike, adding to fears of violence in Kiev.

Here in Washington, Secretary Powell called for a full review of the vote, challenging Ukrainian leaders to decide whether they are on the side of democracy or not.

(BEGIN VIDEO CLIP)

POWELL: If the Ukrainian government does not act immediately and responsibly, there will be consequences for our relationship for Ukraine's hopes for Euro-Atlantic integration and for individuals responsible for perpetrating fraud.

(END VIDEO CLIP)

WOODRUFF: In a show of support for the opposition candidate, demonstrators rallied at the Ukrainian embassy here in Washington.

President Bush also is following the developments of the Ukraine, as he hosts the king of Spain at his Texas ranch. Our White House correspondent, Suzanne Malveaux, joins us now from Crawford.

Hello, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hello, Judy.

Of course, President Bush and the White House keeping a very close eye on the developments in the Ukraine. As you had mentioned before, Secretary of State Colin Powell decrying this election really as a fraud, saying they do not accept the election results.

The reason why the Bush administration is concerned about this, they feel that it is a blow to democracy in that region with Russian and Ukrainian authorities essentially on one side, declaring its candidate the winner, while the U.S., Europeans, Ukrainian people supporting the opposition. Now, the Bush administration is putting pressure on the Ukraine government to investigate the election results and to cooperate with international observers.

(BEGIN VIDEO CLIP)

POWELL: It is time for Ukrainian leaders to decide whether they are on the side of democracy or not, whether they respect the will of the people or not. If the Ukrainian government does not act immediately and responsibly, there will be consequences for our relationship for Ukraine's hopes for Euro-Atlantic integration and for individuals responsible for perpetrating fraud.

(END VIDEO CLIP)

MALVEAUX: Now, U.S. authorities are also concerned with Russia's role in this whole debacle. They feel that it is only increasing, exacerbating the tension between the U.S. and Russia.

It was just five days ago, Judy, that President Bush met with Russian President Vladimir Putin in Chile at the APEC Summit. That is where senior administration officials say that privately, behind closed doors, President Bush expressed a number of concerns to Putin about retreating from those democratic reforms, about crushing the media, and about essentially a centralized authoritative regime. They feel, of course, that is only going to make matters worse in that region -- Judy.

WOODRUFF: Now, Suzanne, we know the president has a royal visitor today, the king of Spain. We want to ask you about that, because we know relations between the United States and Spain strained this year after the new Spanish prime minister pulled troops out of Iraq.

MALVEAUX: Well, Judy, you could actually call it really as extending an olive branch, Texas-style. We saw President Bush, his father, the first lady, drive up in a pickup truck to greet the king and the queen of Spain. They are taken to the Crawford ranch, where they celebrated a Turkey feast.

Now, this was a visit that was initiated by the king because essentially he was in the country. But at the same time, both of the leaders recognize here that this is only going to improve those relationships, specifically the relationship between the prime minister of Spain, Zapatero, who won his election based on the -- essentially the platform that he was pulling out Spanish troops from Iraq.

He did just that. He made several phone calls to President Bush to congratulate Bush on his reelection win.

President Bush not returning his calls. But we are told that the president sent a formal letter to Zapatero saying, yes, I acknowledge your calls; yes, I believe that our governments can work together -- Judy.

WOODRUFF: All right. Suzanne Malveaux. Nothing like having the king and queen visit just before Thanksgiving. We appreciate it.

Now we turn to Capitol Hill. This may be the day before Thanksgiving, but that's not stopping lawmakers from some last-minute political maneuvering and arguing about the spending bill.

Let's check in with our congressional correspondent, Ed Henry -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Judy.

It would not be Thanksgiving without a budget standoff on Capitol Hill. As you know, Congress can sometimes resemble a dysfunctional family that argues around the Thanksgiving table. Today, no exception.

In fact, fighting about the budget. And that's because House Republicans have three problems.

Number one, the government was about to shut down because they did not finish that omnibus bill, that some 3,000-page behemoth that got stalled on Saturday. The second problem is, why did it get stalled? It got stalled because of that tax provision that was added by a congressional staffer at the last minute.

No one has been able to track down exactly how it got in. But there's been a lot of bipartisan outrage about the fact that this provision would have allowed members of Congress to look at individual tax returns.

The third problem that Republicans have is they now want to fix it. They want to take that tax provision out. But Democrats are refusing to let them fix it.

The Democrats today basically blocking unanimous consent on an effort by Republicans to take this offensive provision out that both sides want out. The reason that Democrats are not letting it out is because they want to score some political points right now.

They want Republicans to stew in this mess a little bit. Congressman David Obey, Democrat of Wisconsin, was on the House floor today, lashing out at Republicans for blaming staff for the mistake, as I mentioned. He pointed out that two congressional staffers had actually fainted during these negotiations because they had not slept for two days.

Obey said the real problem is that these bills are being rushed through without lawmakers getting a look at them. And he said it's time to fix it. And to do that, he quoted a former congressman, Dick Bolling.

(BEGIN VIDEO CLIP)

REP. DAVID OBEY (D), WISCONSIN: The Congress has egg on its face. The majority has disgraced the Appropriation Committee's ability to conduct oversight still has not been addressed. If Dick were around today, he would say "Let's stop the bitching and get about the fixing." That's exactly what we ought to do.

(END VIDEO CLIP)

HENRY: As I mentioned earlier, they're trying to get to the fixing. But Democrats are trying to score points here. Republicans also say that, in their estimation, it's the height of hypocrisy because the Democrats, when they were in power in the House, in particular, more than a decade ago, they used to have same-day consideration of things, as well. They used to rush things through as well.

And Republicans say this is all about hypocrisy. Also, everyone, though, did calm down just enough today during this pro forma session in the House to pass a continuing resolution. That's the short-term fix here.

That will basically keep the government open through December 8, get them home for the Thanksgiving holiday, let everyone calm down. And they're expected to come back on December 6 and 7, try to finally complete this budget process. And maybe also deal with the 9/11 intelligence reform bill -- Judy.

WOODRUFF: Where does that stand, Ed?

HENRY: Well, you know, Democrats also used this pro forma session today to try to also score political points on the 9/11 bill. House Democratic Whip Steny Hoyer said that it's long past due to pass it.

He also lashed out at the spokesman for House Speaker Dennis Hastert, John Thery (ph), who has been quoted as saying that there is no real point, no good would have been done in trying to pass this 9/11 bill with the Republican and Democratic votes this past weekend. Steny Hoyer jumped all over that today.

(BEGIN VIDEO CLIP) REP. STENY HOYER (D), MARYLAND: If the 9/11 Commission report is put on this floor, as reported out of the Senate, and as agreed to in the conference committee on this bill, it will be passed overwhelmingly in this House. And I will say to my friend, the spokesman for the speaker, the good is that the American people will be well-served, whether or not a majority of your conference agrees. That is the good.

(END VIDEO CLIP)

HENRY: I spoke to John Thery (ph) a few moments ago, the spokesman for the speaker. He said Democrats are once again being hypocritical because they're trying to push through the 9/11 bill, even though a lot of provisions have been added to that in conference committee, and not a lot of lawmakers outside of that conference committee have been able to see it.

So they're saying -- on one hand, the Democrats are saying, oh, boy, the omnibus got rushed through, but now they want the 9/11 bill rushed through, as well. The bottom line, though, is that regardless of the games going on back and forth, Congressman Jim Sensenbrenner, the Republican, and Duncan Hunter, the Republican of California, they have been blocking this deal on 9/11.

And right now, it looks like, Judy, they are digging in. They are not about to let this deal go through. The House leadership hopes that they can do this in early December. But right now, I can tell you that both parties are very pessimistic on the possibility of a deal -- Judy.

WOODRUFF: And a lot may hinge on how much the president weighs in on this. And that we're going to wait to find out.

HENRY: That's right.

WOODRUFF: Ed Henry, thank you very much.

HENRY: Thank you.

WOODRUFF: On this Thanksgiving eve, many Americans are finding themselves stuck at the airport because of bad weather. We'll get an updated travel forecast ahead.

Back on the political beat, we'll continue a grim turning point in American history that did not get that much attention this year.

And later, an update on the recount in Washington State. Will we know who won the governor's race today, or will the cliffhanger continue?

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Americans give the Centers for Disease Control the highest approval rating among major government agencies according to a new survey. The Harris Poll shows that the CDC received positive marks from 84 percent of those polled.

The Federal Aviation Administration, the National Institutes of Health, the Food and Drug Administration and the FBI all round out the top five. At the bottom of the list, receiving just over a 50 percent approval rating, were the IRS, the CIA, the Environmental Protection Agency, and in the very last place, the Social Security Administration.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: It is 22 days since the Election Day, November 2. And finally, officials in the state of Washington are able to declare that Republican Dino Rossi has won the governor's race in that state. That report just coming into to CNN.

We know that Christine Gregoire, the Democrat, was facing Dino Rossi, the Republican. There was a recount, an automatic recount kicked in because the results were so close. And the word is just coming into us from The Associated Press that Mr. Rossi has been declared the winner. We're going to have a live report from Washington State at the top of the hour.

On this day before Thanksgiving, millions of Americans are on the road, riding the rails and packing the nation's airports. And the weather in parts of the country is a mess.

(WEATHER REPORT)

WOODRUFF: It looks like no matter where you live, the word to remember is "patience." Thanks very much. And we'll talk to you later.

By the way, you can go to our Web site to find out everything you need to know about the weather and travel conditions as you head out for your Thanksgiving destination. The address: cnn.com/travel.

What does the standoff between President Bush and some congressional Republicans over intelligence reform mean? We'll have more on that when we return.

Plus, remembering a grim period in American history. We'll talk about the anniversary of President Kennedy's assassination with a man who was on the scene in Dallas.

Stay with us.

(COMMERCIAL BREAK)

WOODRUFF: The battle over intelligence reform coming out of the 9/11 Commission is one of the major topics we've been focusing on this week. Jack Valenti, a former aide to President Lyndon Johnson, and a CNN contributor, with me now to talk more about this and what it means for President Bush.

Jack Valenti, here you have a president who says he wants the intelligence reform bill done. But his own leadership in the House isn't going along with him. What does that mean?

JACK VALENTI, FMR. AIDE TO PRESIDENT JOHNSON: Well, it is kind of bizarre. My own judgment is that whatever the president wants he will get.

He's never going to be stronger than he is now coming off of this election. Although, I do know Congressman Hunter and Congressman Sensenbrenner, and they're strong and they're very able people. So they feel very -- I think they feel quite sincerely about this. But I think in the long run, the president will get his way.

WOODRUFF: But why didn't that happen the first go-around? I mean, didn't the president make his position clear enough? The White House says that he did.

VALENTI: I think that we have to draw the curtains back. I think it's, as I said, very strange that the chairman of the Joint Chiefs of Staff would take a position that seems to be colliding with the president.

That's unheard of. And it may be that Secretary Rumsfeld is absolutely correct, that the president's position was evolving, as he said. And that may be true.

But I think we'll find out on December 6 and 7 when they come back. If the president really wants this done, my judgment is he will get it done.

WOODRUFF: How much is really at stake here? I mean, you -- I know you know people on both sides of this debate. Does it really matter whether this reform gets done?

VALENTI: To me, the biggest problem is the lack or the perceived lack of cooperation between all the intelligence agencies: the FBI, the Defense Intelligence Agency, the CIA. And I don't know, maybe 12 or 14 different intelligence agencies.

How do they coordinate? Do they cooperate? Do they really trade information, and quickly?

That's the key. And I believe that if we had some new attack on us, that the lack of that coordination would be run of the great scandals of our time.

WOODRUFF: I interviewed Duncan Hunter, Congressman Hunter, Chairman Hunter on this program two days ago. And he makes a very passionate case for how the military really does need to keep a lock, if you will, a strong say on where those intelligence dollars are spent.

VALENTI: Yes. Duncan Hunter really understands the Pentagon. He understands military affairs very well.

He's -- he's a very capable and competent man. So I would take seriously what he says. But there's some other people who say -- Senator Roberts, for example -- Pat Roberts is saying that that's not so. So it's a question of a -- of a contradiction of views by people who are really able and who understand this thing quite well.

WOODRUFF: Let's talk about the political party you know very well, the Democratic Party. Floundering in the eyes of some people after John Kerry's loss on November 2.

A number of people have taken themselves out of the running for chairman of the party. Iowa Governor Tom Vilsack, among others. Now Howard Dean looks to be the frontrunner. Would he be the right man to lead the Democrats?

VALENTI: I think the Democratic Party is going to be led by Democrats in the Congress. I think the head of the Democratic National Committee has some influence. But the key leadership has got to come from those people who have a vote in the Congress, who shape the public policy of the Democratic Party.

Same thing goes for the Republican Party. Actually, though, of course the Democratic chairman, when you don't have the White House -- he does have more power or she has more power than when you do own the White House. But in the end, it's going to be the leadership in the House, leadership in the Senate. And I think Democratic governors are going to really be the architects of the shaping and forming of whatever policies that the Democrats want to put forward.

WOODRUFF: But Jack Valenti, you know as well as anybody, they are distinctly in the minority. What clout do they have?

VALENTI: Well, I -- things -- politics -- in politics, nothing last. Remember, it took 40 years, but the Republicans took back the House. And now they've had it for 10 years. But things change, and they change bewilderingly fast.

I have said many times I saw Lyndon Johnson win in 1964, just decimated the Republicans. Four years later, Richard Nixon was president.

So things never last. And it depends on how each of those parties begins to form the kind of impact they want to make on the American people. And I think that will count more than whoever's chairman of whatever party.

WOODRUFF: Finally, help us remember for a moment that terrible day in November, November 22, 1963.

VALENTI: '63. I must say, just two days ago, Monday was a very terrible day for me. I was in that motorcade, six cars back of the president when he was murdered, a senseless act of mindless malice. And I was ordered aboard Air Force One by the new president.

And I was there as a volunteer helping with the logistics of that trip. And suddenly, within hours, I'm a newly-hired special assistant to the president. And there's Mrs. Kennedy standing behind -- beside him as he holds up his hands to speak the same words that George Washington did and swear the same oath that Washington did, which was, to me, a kind of divine continuum that the Constitution really worked.

But that day is so seared in my memory. I must say, as I said Monday, I felt desolated as I remembered.

On the other hand, also what it proved, though, that our Constitution is such a supple document. The president is dead, the president lives, the nation goes on.

WOODRUFF: Yes. All of us who were around then were decimated by that. And it's a day that we will never forget in American history.

VALENTI: One final point.

WOODRUFF: Yes?

VALENTI: I think that that day can be summed up in a line from one of William Butler Yeats' poems, when he said, "The ceremony of innocence is drowned."

WOODRUFF: Jack Valenti, thank you for helping us remember that moment in American history.

VALENTI: Thank you, Judy.

WOODRUFF: Thank you. And thank you for being with us. Have a good Thanksgiving.

VALENTI: Same to you.

WOODRUFF: Breaking political news out of Washington State. We'll have the very latest on the recount in the governor's race there. They have a winner. And it appears it's the Republican, but by only 42 votes.

Is another recount in the cards? We're going to go live to Seattle.

(COMMERCIAL BREAK)

WOODRUFF: Just before 4:00 in the East, as the markets get set to close on Wall Street, I'm joined by Kitty Pilgrim in New York with "The Dobbs Report."

Hi, Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Hi, Judy. Thanks.

Well, stocks are modestly higher in quiet pre-holiday trading. The market is closed tomorrow, and Friday is just half a day.

As the final trades are being counted, the Dow Industrials are up about 30 points. Strength in tech stocks pushed the NASDAQ composite up nearly one percent. The government is asking for some outside help to catch up with people who skip out on their taxes. For the first time, the IRS is hiring collection firms to track down delinquent tax money. Last year alone, $120 billion in taxes went unpaid.

They plan to start hunting unpaid taxes next year. But several consumer groups are trying to stop the IRS plan.

Prices for stamps may be going up again. The "Wall Street Journal" reports the postal service is on the verge of asking for a 10 percent increase in postage rates, sending the cost of a first-class stamp from 37 cents now to 41 cents. It will be the fourth and biggest hike in the past few years.

The postal service says it hasn't start the rate change process yet and any increase won't take effect until sometime in 2006.

Finally, there could soon be more radio stations on your FM dial. The Federal Communications Commission today auctioned off more than 250 permits for new stations around the country. That's the first- ever open auction. The winning bidders, many of them new to the radio business, will have three years to get their stations up and running.

Coming up at 6 p.m. Eastern on "LOU DOBBS TONIGHT," the Wal-Mart invasion, the giant retailer's encroaching on the military, challenging the base exchange store.

Then, "Exporting America," sending our technology overseas. We take a look at one company that says it's forced to take its cutting edge technology and good paying jobs elsewhere.

And our "Face-Off" tonight, we debate the issue of driver's licenses for illegal aliens. The issue stalled the Intelligence Reform Bill in Congress.

That's the latest. Back to you, Judy.

WOODRUFF: Kitty, thanks very much. And INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: Counting and recounting the votes in Washington state. Twenty-two days after the election, voters there still don't know who their next governor will be. Could they find out today?

Red states, blue states, but is it really that black and white? Our Bill Schneider investigates.

Just in time for Thanksgiving. A family story.

SENATOR-ELECT KEN SALAZAR (D), COLORADO: That's where we learned how to work, we learned how to be a part of a great family.

ANNOUNCER: Two brothers from farm country far from Washington are now headed to Congress. SALAZAR: It is awesome to be your United States senator.

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

(END VIDEOTAPE)

WOODRUFF: Welcome back.

Just a few moments ago, from the Associated Press, results from the recount in the Washington state's governor's race, but another round of reviewing ballots may lie ahead.

Essex Porter of CNN affiliate KIRO in Seattle is following the action.

Hello, Essex.

ESSEX PORTER, KIRO REPORTER: The action continuing to go back and forth. And we have seen that Associated Press report here, but we have not yet been able to confirm that independently in our newsroom. And we're not yet going with that report and that number. There is more work to be done before that can be confirmed.

We can tell you that the recount process has been contentious in some places, especially here in King County, where Democrat Christine Gregoire has a very large edge over Dino Rossi. And if she is to win this election, King County would have to add significantly more votes for her in the recount.

And in fact, when the recount was completed and the numbers posted in King County, she did win significantly more results.

But, should Democrats fall short here, the Democrats are already saying that they will demand a hand recount, a recount they'll have to pay for, at least in part. And Republicans are already demanding that Democrats concede if they do end up behind today.

Listen to the chairmen of both political parties.

(BEGIN VIDEO CLIP)

PAUL BERENDT, WASHINGTON DEMOCRATIC CHAIRMAN: We will fight, and we will fight, and we will fight again to make sure that every vote is counted in this state.

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

BERENDT: And we will not let the Republican Party try to take people's rights away in state and federal court, and we will do everything within our power to beat them back every time.

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

UNIDENTIFIED MALE: Yes!

CHRIS VANCE, WASHINGTON REPUBLICAN CHAIRMAN: She should concede the election. She should not drag this state into the Christmas season not knowing who the governor is. And for what? To count them again and again until she finally gets the results she wanted?

(END VIDEO CLIP)

PORTER: With the numbers turning out to be so close here, if indeed it is just a 42 vote difference, can you almost be sure that Democrats will press for at least a partial hand recount, which they'll have to pay for at about 25 cent a vote. At least a partial one.

And then, of course, should the result change, that would automatically trigger a statewide hand state recount of the votes. We very well may not know until close to Christmas -- Judy.

WOODRUFF: And Essex, you're right. The Associated Press reporting a 42-point margin out of 2.8 million ballots cast. Essex, we understand a Libertarian candidate on the ballot may be affecting this somehow?

PORTER: Absolutely. The Libertarian candidate on the ballot is Ruth Bennett. And Ruth Bennett campaigned largely on the idea that she supported gay marriage. Neither the Democrat nor Republican candidate in this race supported gay marriage.

But Ruth Bennett figured that many of the people who might otherwise support a Democrat in this race would be disappointed with Democrat Christine Gregoire and vote for her instead. She has a little over two percent of the vote, and she is definitely a factor.

WOODRUFF: OK, lots of wrinkles to be ironed out in your -- in your state. Essex Porter, CNN affiliate KIRO. Thank you very much. We appreciate it.

PORTER: My pleasure.

WOODRUFF: We're going to be -- you bet we're going to be following that story.

More recount news in today's "Campaign News Daily."

Advocates of a recount in Ohio say they may appeal a federal judge's ruling rejecting a review of presidential ballots. But Ohio Republicans are calling yesterday's ruling yesterday's victory for the state's voters.

The judge denied the Green Party and the Libertarian candidates a recount, saying they could not credibly claim a chance of winning. President Bush beat John Kerry by 136,000 votes in Ohio, according to unofficial numbers.

A recount has been suspended in Puerto Rico's tight governor's race because of a dispute over whether to count certain ballots. Official -- election officials on the island say they want to wait for a ruling by a federal court. Preliminary results show that the candidate who supports Puerto Rico's U.S. commonwealth status is narrowly leading the pro-statehood candidate.

And now, let's consider the varying shades of red and blue this election year. Our senior political analyst, Bill Schneider, is with us.

Bill, we were talking about Washington. It is a blue state, where a Republican may be taking the governor's race -- or rather, office away from the Democrats.

Where have the Democrats made major gains, and are there examples of Democrats making gains in red states, is my question?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Yes, there are some schizophrenic states, I call them. Red for president, blue for everything else. Colorado elected its first Democratic -- Democrat to the Senate since 1992, Ken Salazar. Both houses of the legislature switched from Republican to Democrat, the only state where that happened.

How did it happen? Money. Four wealthy Coloradoans financed independent spending to help the Democrats.

A strong local candidate. Salazar is Hispanic. He has strong local roots and he kept his distance from John Kerry in the Democratic campaign.

There was a budget crisis in Colorado, and that tarnished Governor Bill Owens, the Republican governor, and the Republican state legislature. It might have hurt his ambitions for national office.

And also values. The Republicans in Colorado got all hung up in debates over the Pledge of Allegiance and censorship and same-sex marriage and affirmative action instead of dealing with issues that Coloradoans thought were more serious.

WOODRUFF: What about another red state, Montana?

SCHNEIDER: Montana, same thing happened. Another schizophrenic state.

Democrats won every statewide office but one, even though Bush took 50 out of 56 counties. They gained control of the governor's office for the first time in 20 years and they took control of the state Senate.

How? They had candidates with deep local roots, like the governor-elect, Brian Schweitzer, who's a rancher.

Moderation: Schweitzer ran with a Republican running mate -- he's a Democrat with a Republican for lieutenant governor.

And they stayed away, the Democrats stayed away from same-sex marriage and guns.

They had a very unpopular incumbent. The Republican governor had very negative ratings. And the Democrats talked about kitchen table issues like the economy, in a state where the rural economy is really hurting.

WOODRUFF: And what about the blue states where Republicans made gains?

SCHNEIDER: OK, 19 blue states. Kerry won 19 states. Nine of them now have Democratic governors; nine have Republican governors. Washington could make it ten Republican governors, if the Republican wins. Two-thirds of the senators from the Kerry states are Democrats.

What we see is a pattern. Senate results usually match the state's presidential color. Voting for governor often doesn't. That's true in both red and blue states.

Why? Because it's easier to keep campaigns for governor separate from national politics.

So Massachusetts and California, two very blue states, have Republican governors. Virginia and Oklahoma, two pretty red states, have Democratic governors.

WOODRUFF: We need to come up with different colors for these other states. Shades of purple.

SCHNEIDER: Yes, exactly.

WOODRUFF: Or fuchsia or something like that.

SCHNEIDER: Exactly.

WOODRUFF: Bill Schneider, thank you very much.

We do want to take a closer look at Colorado, one of the states Bill mentioned, and two brothers named Salazar who have helped to give the state its bluish red tinge.

Here now, CNN's Sean Callebs.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): It's about as much fanfare as people in Colorado's San Luis Valley ever see, a hero's welcome for favorite sons John and Ken Salazar, returning to their old high school.

John just won a congressional seat. Ken, the state's senator- elect.

SALAZAR: Today, I'm proud to say that I return as the next United States senator for the state of Colorado.

CALLEBS: An anomaly in this recent election, Democrats capturing new seats and in a state that went to President Bush.

John Jordan is the head of the school district in rural Conejos County.

JOHN JORDAN, FAMILY FRIEND: Even though they're Democrats, they're supported by many Republicans in our community. I think they're the type of people that can -- they're down to earth, they really do have a strong belief in our community.

CALLEBS: This is the San Luis Valley, a desolate looking landscape and a four-hour drive south of Denver, home to ranchers, farmers and for the past 150 years, the Salazar family.

SALAZAR: That's where we learned how to work. We learned how to be a part of a great family.

CALLEBS: The brothers are among eight children and say their heroes remain their mother, Emma, and their late father, Henry. Values they learned growing up both want to take to Washington.

Among their goals, they say, fight for rural America, strengthen homeland security, and mend divisions across the nation.

(on camera) One hundred members in the U.S. Senate, and where do you rank in the seniority?

SALAZAR: No. 100, at very bottom. The fact that I'm ranked No. 100 today doesn't unnerve me at all. There's just a lot of work that I'm going to do.

CALLEBS (voice-over): The Salazars are devout Catholic but support a woman's right to abortion and know with an aging Supreme Court, they could have a say in confirming the next high court justice.

SALAZAR: I don't believe that ideologues or people that have a particular social agenda should be the ones that are appointed.

CALLEBS: John served as a state legislator and the outgoing Colorado attorney general.

They plan on sharing a department in Washington, D.C., but remain adamant, telling friends and family that helped forge their lives that the San Luis Valley will always be home.

Sean Callebs, CNN, Conejos County, Colorado.

(END VIDEOTAPE)

WOODRUFF: We like those hats.

Well, if you're heading home for the holiday, you may find bad weather standing your way. Another travel forecast is ahead. Plus, a hearty serving of political pork. We'll look at the ways Congress stuffed the latest spending Bill.

And later, November flashbacks: political snapshots from one year ago.

(COMMERCIAL BREAK)

WOODRUFF: As we reported earlier, the government's spending bill is now expected to be sent to President Bush early next month. That is after the removal of a provision that would have permitted some legislators and their staffs access to individuals' tax returns.

What won't be removed, though: appropriations for a wide spectrum of government agencies and programs, as well as a whole lot of pork barrel spending.

Bruce Morton has details.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This is it.

BRUCE MORTON, CNN CORRESPONDENT (voice-over): The spending bill is 1,690 pages long and full of surprises.

The president, you may remember, wants man to go back to the moon and on to Mars. NASA, the space agency, got an increase of $822 million in its budget, not quite as much as the president asked for, but an increase.

Some agencies win, some lose. The National Institutes of Health got a 2.1 percent increase, their smallest in years. The Centers for Disease Control got about a four percent increase.

Abstinence education programs went up by more than a third from $76 million to $105 million. Head Start got about a one percent increase. Programs for agricultural conservation and rural development were cut; farm subsidies were not.

Congress cut funds for the Environmental Protection Agency, especially a fund that helps local government with water quality programs.

But the most interesting things may be the little goodies for individual congressional districts. Congress of course loves those. A nonpartisan group called Taxpayers for Common Sense keeps track of them. And you won't believe what they found.

STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: Well, you've got everything from $250,000 for asparagus research in Washington state to $1,500 for potato storage in Madison, Wisconsin; from $25,000 for the study of mariachi music in Las Vegas to a million dollars for a museum dedicated to B.B. King in Mississippi.

MORTON: But they're little, right? They don't really matter? Wrong.

ELLIS: We found 11,722 earmarks, these little provisions for various members of Congress' pet projects, littered across country. And they totaled to about $15.7 billion.

MORTON: And there are more of them every year. John McCain says the system is broken, and it's hard to argue with that.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Thank you, Bruce. Oink-oink.

For many travelers, though, it is a miserable day to be heading out for the holiday. Just ahead, we'll check in again with Orelon Sidney for a look at the latest Thanksgiving travel conditions.

(COMMERCIAL BREAK)

(WEATHER REPORT)

WOODRUFF: Thank you very much.

ORELON SIDNEY, CNN METEOROLOGIST: You're welcome.

WOODRUFF: Well, what a year this has been in the political arena. Just ahead, we'll take a step back in time to one year ago and see how that period helped shape the battle for the White House.

(COMMERCIAL BREAK)

WOODRUFF: On this day before Thanksgiving, it's quiet here in Washington, and even quieter on the campaign trail. So, let's go back in time to a year ago, when the race for the White House was just heating up.

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): November 2003, Howard Dean cemented his position as Democratic front-runner when two of the nation's largest unions endorsed him.

Days earlier, Dean made history by announcing that he would be the first Democratic presidential candidate ever to forego public financing in his prime minister campaign. By dropping out, Dean would be able to raise as much money and spend as much money as possible.

But November wasn't all roses for Dean. Comments he made earlier in the year came back to bite him.

HOWARD DEAN (D), FORMER PRESIDENTIAL CANDIDATE: White folks in the south who drive pickup trucks with Confederate decal ought to be voting with us and not them.

WOODRUFF: The "Des Moines Register" picked up on what Dean said, prompting his rivals to condemn his remarks. Dean defended himself at a CNN sponsored debate.

DEAN: I make no apologies for reaching out to poor white people.

WOODRUFF: Then reversed himself the next day.

DEAN: I deeply regret the pain that I may have caused.

WOODRUFF: November also found John Kerry in a tough spot. With his presidential bid faltering, Kerry ousted his campaign manager, Jim Jordan, and replaced him with longtime Democratic strategist Mary Beth Cahill.

Then, Kerry followed Howard Dean's lead and dropped out of public financing to better compete financially with Dean and with President Bush.

SEN. JOHN KERRY (D-MA), FORMER PRESIDENTIAL CANDIDATE: I wish that Howard Dean had kept his promise to take federal matching money, but he did not. He changed the rules of this race. And anyone with a real shot at the nomination is going to have to play by those rules.

WOODRUFF: Kerry went on to loan his campaign several million dollars by taking out a second mortgage on his Boston home.

Kerry and Dean were hogging the headlines, but there were seven other Democrats still in the running last November. Bob Graham had already dropped out of the race, but John Edwards, Dick Gephardt, Joe Lieberman, Wesley Clark, Dennis Kucinich, Al Sharpton and carol Moseley Braun were all campaigning.

As a sitting president with no primary opposition, George W. Bush wasn't as overtly into campaign mode as the Democrats in November 2003, but re-election was very much on the mind of the White House.

Bush began the month by receiving a political gift from a Democrat. Senator Zell Miller of Georgia announced that he planned to back Bush, because he felt the entire Democratic Party had drifted too far to the left.

(END VIDEOTAPE)

WOODRUFF: And our apologies. There was a mistake in the piece. The picture you saw that we said was Jim Jordan, the man John Kerry fired as his campaign manager, that picture was not Jim Jordan. It was Jim Johnson, who was an adviser to the John Kerry campaign. Our mistake.

And that's it for this Wednesday's INSIDE POLITICS. I'm Judy Woodruff. Be sure to watch INSIDE POLITICS tomorrow for our annual Thanksgiving treat. Bill Schneider will be here to present his political Turkey of the Year Awards. It's a holiday tradition you don't want to miss.

Have a good evening and be safe in your travels.

"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