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Inside Politics

New CEO at Commerce?; Sidestepping Gay Marriage; Intel Bill P.R.

Aired November 29, 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: President Bush looks to the private sector in picking his next Commerce secretary.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Carlos Gutierrez is one of America's most respected business leaders.

ANNOUNCER: Is this a sign of things to come, as Mr. Bush overhauls his economic thing?

UNIDENTIFIED FEMALE: I now pronounce that you are married.

ANNOUNCER: Gay marriage, it was one of the hot-button issues in the presidential election. But the Supreme Court steers clear of a Massachusetts law that legalizes same-sex marriages.

Fifty years of the high court ruled separate but equal public schools are unconstitutional, one state still has segregation on its books.

UNIDENTIFIED MALE: I'm disturbed over the fact that we still in 2004 have racist language.

(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 latest move in the Bush cabinet shuffle. This time, the president went outside of his inner circle, choosing the CEO of the Kellogg Company, Carlos Gutierrez, to be the next Commerce secretary.

Let's go to the White House and CNN's Elaine Quijano.

Hi, Elaine.

ELAINE QUIJANO, CNN CORRESPONDENT: Hello to you, Judy.

That's right, the name Carlos Gutierrez wasn't one of those names that had been floated around here in Washington as a possible contender for this job. But the president, in the Roosevelt Room of the White House, today announcing that Carlos Gutierrez, CEO of Kellogg, is his choice to replace outgoing Commerce secretary, Don Evans.

Now, the president called Gutierrez a "great American success story." And with an eye toward the future and his second term, Mr. Bush also laid out some of his administration's items, items that he believes Gutierrez can advance if the Senate confirms him.

(BEGIN VIDEO CLIP)

BUSH: With Carlos' leadership, we'll help more Americans, especially minorities and women, to start and grow their own small business. We'll reduce the burden of junk lawsuits and regulations on our entrepreneurs. We'll reform our outdated tax code to eliminate needless paperwork and encourage savings, investment and growth. We'll continue our commitment to free and fair trade.

(END VIDEO CLIP)

QUIJANO: Now, the president also pointed to Gutierrez's background. Gutierrez, as we said, CEO of Kellogg, the Kellogg Company. He has been chairman of the board at Kellogg since April of 2000.

He has been the chief executive officer since April of 1999. And he joined Kellogg's Mexico offenses in 1975 as a sales representative. He was born in 1953, in Havana, Cuba.

Now, Gutierrez made clear today that his views on economic issues are in lockstep with President Bush's.

(BEGIN VIDEO CLIP)

CARLOS GUTIERREZ, COMMERCE SECRETARY NOMINEE: I look forward to working with you on your team, helping you achieve the plans that you've laid out, the bold plans for our economy. And I'll be especially honored if confirmed to walk in the footsteps of Secretary Evans, who has served with great honor and distinction.

(END VIDEO CLIP)

QUIJANO: Now, Gutiererrez went on to say that he has some big shoes to fill. And the president himself extending some warm words about his Commerce secretary, outgoing secretary, Don Evans, saying that Secretary Evans led at a time of great difficulty, the September 11 attacks. Also mentioned corporate scandals and a recession.

And also, interestingly, Judy, of course the president noting that Don Evans has been a personal friend of his for some 30 years -- Judy.

WOODRUFF: True. The two are very close friends going way back. Elaine, thank you very much.

Now we turn to the Supreme Court, where the justices today refused to get involved in an issue that, by most accounts, was influential in this year's election: gay marriage. We're joined now by CNN's Bob Franken -- Bob. BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And, Judy, it's so interesting that the Supreme Court can have so much notice for doing nothing. What they did was decide not to take on the issue of the Massachusetts law that permits gay marriage.

They never give the reasons for not to use, their term, granting certiorari, but the feeling was that in this particular case, those who were filing the challenges to that law did not really have legal standing. That is to say, they're not affected.

It does not mean, Judy, that they may not take on the issue when someone who has a better case doesn't come forward later. And there are other cases out there.

WOODRUFF: But, Bob, the court, we learn, is taking on another controversial issue. And that is medical marijuana.

FRANKEN: This was social issue day. And this is, of course, the case that 11 states, including California, have laws on the book that allow the medical use of marijuana.

However, the federal government has the Controlled Substance Act which prohibits virtually any use of marijuana. And the two are in conflict.

So we end up with a constitutional question, the kind the justices consider all the time. Is the use of marijuana something that is done within the state for medicinal purposes, to use the term, something that does not violate the commerce clause? The Constitution gives Congress the right to regulate interstate commerce.

The administration argues that by implication, because it would contribute to a larger supply of marijuana, there is a violation of the federal laws that Congress has the right to regulate it. The states are saying, no, the states have the right to determine their own uses under the circumstances.

It's a quintessential Supreme Court case. And it's one that will be decided by the end of the term, which of course is next July.

WOODRUFF: Is next July. So we've got months to go before we find out how they come down on that one. Bob Franken, thank you very much. We appreciate it.

Well, 80-year-old chief justice, William Rehnquist, continues to work from home while receiving chemotherapy for thyroid cancer. A new poll shows 60 percent of Americans believe there should be a mandatory retirement age for U.S. Supreme Court justices, rather than the current life term.

Rehnquist's health has heightened speculation that President Bush will nominate at least one new member to the high court in his second term. An Associated Press-Ipsos poll found that 59 percent of Americans say they believe Mr. Bush should nominate Supreme Court justices that would uphold Roe versus Wade. Thirty-one percent say they favor justices who would overturn the decision that legalized abortion.

Over on Capitol Hill, a new P.R. campaign is in the works aimed at unblocking the intelligence reform bill. Many Democrats and Republicans are publicly now urging the president to get more involved in promoting the bill, even as some still privately wonder about his commitment to its passage.

Here now, our congressional correspondent, Joe Johns.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): The administration is trying to put an end to criticism the president is only lukewarm in passing intelligence reform. The White House says President Bush will send a letter to Capitol Hill later this week urging Congress to get the bill finished.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The president is firmly committed to getting this legislation passed and done as quickly as possible.

JOHNS: White House spokesman Scott McClellan made clear Monday the president disagrees with Republican Congressman Duncan Hunter, who opposes intelligence reforms on the grounds it could confuse the chain of command for military intelligence.

MCCLELLAN: The president would never sign legislation that would harm our troops or hurt our troops in any way. And the president believes that this is an important legislation that will further strengthen our intelligence operations.

JOHNS: With time running out, former members of the 9/11 Commission are also ratcheting up the public relations push to get a bill passed.

TOM KEAN, 9/11 COMMISSION CHAIRMAN: And if it doesn't pass now, it could be six months or longer. And that's six months or longer without the American people having the protections which we think they must have and which they want, 80 percent of them want. That's a danger we shouldn't risk.

JOHNS: This week, former members of the 9/11 Commission will meet with reporters, while representatives Chris Shays and Carolyn Maloney, who started a 9/11 Commission caucus, will hold an event with 9/11 families. Some families are also holding vigils this week in New york, Boston and Los Angeles. The hope is that added pressure and more public information about the bill will make it harder for some House members to continue opposing it.

(END VIDEOTAPE)

JOHNS: And the intel reform bill is expected to come up at a retreat of House Republicans in Virginia this week. White House officials are expected to be there. As well, people who are pushing for changes in the legislation are going to try to get their voices heard, including September 11 families, who want tougher immigration language in the bill, will be speaking out starting tomorrow.

Judy, back to you.

WOODRUFF: So, again, Joe, what's the timetable for this?

JOHNS: Well, the timetable, a lot of people hope, is that the Congress will come back into session early next week and actually do something about this bill. Of course, a lot of questions there as to whether those two key chairman from the Armed Services and Judiciary committees are willing to sign on.

Of course, a lot of pressure being placed on them. If they don't cave, then the question is whether it will get done at all.

WOODRUFF: Joe Johns, thank you very much. It sounds like you're fighting laryngitis. Take care of that voice. Thank you, Joe.

Well, the intel bill is just one piece of the puzzle. The Democrats grapple with their post-election political status. Up next, Iowa governor, Tom Vilsack, on the Democrats' future and why he took a pass on leading his party.

Also ahead, revisiting Alabama's segregationist history. Are beliefs of the past still present?

And later, the people of Ukraine showing their political colors.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Checking the Monday headlines in our "Campaign News Daily," former Democratic vice presidential hopeful John Edwards says his party needs to do a better job of connecting with the so-called values voters we have heard so much about since Election Day.

Looking back at the presidential campaign, Edwards tells the "Charlotte Observer," "I wish we had had better chances, better opportunities for me to talk about what my personal values are, how important my relationship with god is, how important my faith is in our day-to-day lives."

Continuing, he said, "The struggles my family's had in the past. Plus, what Elizabeth is facing now." Edwards' wife, as we have reported, is being treated for breast cancer.

John Edwards' running mate, John Kerry, is laying the ground work for reelection to the Senate four years from now. The "Boston Herald" reports that Kerry plans to file the paperwork this week to create the Friends of John Kerry Campaign Committee. Kerry, we should aid, has not ruled out another run for the White House.

John Kerry conceded defeat to George W. Bush after concluding he could not win Ohio. But the Reverend Jesse Jackson is among those who still question the outcome there. Ohio counties have until Wednesday to complete their official vote tallies. And the secretary of state says he plans to certify the results a week from today.

In Columbus yesterday, Jackson said he wants Congress to investigate reports of malfunctions involving Ohio's electronic voting machines, as well as reported problems in predominantly black and Democratic precincts. Jackson also says he supports plans by the Green and Libertarian parties to pay for a statewide recount.

In New Jersey, candidates are lining up to run for governor next year. Republican Brett Schundler, who lost to Democrat Jim McGreevey in 2001, plans to announce his candidacy this evening. The third Republican to enter the race.

Meanwhile, as we have reported, Senator Jon Corzine is to announce his candidacy later this week, setting up a possible showdown with acting governor and fellow Democrat, Richard Codey.

Well, in the days of John Kerry's defeat, Iowa's Democratic governor, Tom Vilsack, was among those mentioned as a potential candidate to become Democratic Party chair. Last week, however, he said he was not interested in the post.

Governor Vilsack joins me now from Des Moines to talk about the direction of his party and about his own political future.

Governor Vilsack, good to see you.

GOV. TOM VILSACK (D), IOWA: Hi, Judy. How are you?

WOODRUFF: Thanks for joining us. Why did you drop out of the race for DNC chair?

VILSACK: Well, Judy, I was asked to consider it. And out of respect for those who were making that request, I gave it some consideration.

But we have a very aggressive effort to instill early childhood opportunities for our youngsters in Iowa. And I was told by my staff that the time and the resources necessary to do the job at the DNC, and also to be governor of Iowa, would make it very difficult for that legislative agenda to get passed. And if I had to choose between my kids and my party, I figured I'd work for my kids now, and maybe someday serve my party in some other capacity.

WOODRUFF: Did the decision have anything to do with your thinking about possibly running for president in '08?

VILSACK: Judy, this is 2004; 2008 is a long, long, long time away. Frankly, if I'm going to focus on an election, I'm going to focus on 2006.

As the current chair of the Democratic Governors Association, I'm very interested in what we're going to be able to do as a party to prepare ourselves for 34 governors races, a third of the Senate and all of the House. A very, very critical election coming up, and we need to prepare for that.

WOODRUFF: Who should the Democratic Party pick? As you know, Howard Dean is the front-runner. Would he be a good choice?

VILSACK: You know, there are a lot of people that -- that would be able to do a good job as the DNC chair. But, you know, at the end of the day, it's really not as much about the chair as it is about the rest of us willing to help the chair.

This party has some significant challenges ahead. We've got to rebuild the grassroots. We've got to make sure that neighbor to neighbor are talking about Democratic ideals and policies and programs and politicians.

That's going to take a lot of effort on the part of a lot of people. Not just the chair.

Howard is certainly someone who energized the grassroots. There's other folks, Jeanne Shaheen, a variety of other people that have been mentioned that I know could do the job.

So I'm confident we're going to have a good chair. But I want to make sure that the rest of us help carry this rather significant heavy load that we face.

WOODRUFF: Well, given the Democrats' loss on November 2, though, Governor, would the Democratic Party be better off choosing a chair from a red state?

VILSACK: I don't think it's about where the chair's from. I think it's about what we -- what we promote. In the lead-in to this segment, you mentioned Senator Edwards and his concerns about one of the gaps that the Democratic Party has to deal with, and that's the values gap.

There are several other gaps. There is the security gap. We have to reassure people that we are going to keep people safe as a party. And those of us who run as Democrats have to do that at every level.

We also have a reform gap. What's interesting is that governors, the Senate, the House the White House, now controlled by a majority of Republicans. They now basically control government.

Democrats need to be the party of reform. We need to be the party of change. We need to challenge the status quo. We ought not to be about defending the status quo.

And so I think it's going to be important for the chair to -- to engage all of us in this conversation. And it's really going to be about the ideals, the programs, the policies that the Democratic Party focuses on in the next couple of years that I think is most important, rather than where the chair is from.

WOODRUFF: So is John Kerry the leader of the Democratic Party right now? VILSACK: Well, John Kerry won the nomination. And by virtue of that, he certainly is considered one of the leaders of the Democratic Party.

I think that there are a number of other people that, obviously, as a result of their own election success, or as a result of past elections, have -- have a say in what goes on. There are governors who want to be engaged and involved.

Bill Richardson, who's the incoming chair of the Democratic Governors Association, is certainly someone that we all need to be listening to. A number of other governors, some key and influential senators, members of the House of Representatives, state legislators, mayors.

This really needs to be an inclusive process. It can't just be one person at the head of the party. It can't be just about where the chair is from. It's about reorganizing and restructuring the Democratic Party to respond to the concerns that are out there among Americans.

WOODRUFF: It sounds like a tall order for the Democrats.

VILSACK: It is. But you know, I'm optimistic about this.

I took a look at the state legislative races. And the Democrats had a net gain of 75. So at the grassroots, we're beginning that process of turning this party around. And I'm pretty sure by 2006, we're going to be ready to reclaim our status as the majority party in this country.

WOODRUFF: Governor of the state of Iowa, Tom Vilsack. Thank you very much. It's good to see you, Governor.

VILSACK: Thank you. Good to see you.

WOODRUFF: Thank you for talking with me. We appreciate it.

The Supreme Court outlawed segregation in schools 50 years ago. But in Alabama, segregation language remains in the state constitution. We'll give you the latest on the recount on a controversial ballot initiative, and a bit of historical perspective after the break.

(COMMERCIAL BREAK)

WOODRUFF: Some late-breaking developments to tell you about in the case of convicted murderer, Scott Peterson. Let's go for the latest to San Francisco and our correspondent, Ted Rowlands -- Ted.

TED ROWLANDS, CNN CORRESPONDENT: Judy, the State Supreme Court here in California has just denied a request for a review and a stay from Scott Peterson's lawyers. Mark Geragos had filed this with the high court here, asking that a new jury be empanelled for the penalty phase in the Scott Peterson murder trial. He also asked the State Supreme Court to step in and grant a change of venue for the penalty phase. The State Supreme Court, just within the last few minutes, however, denied that request for a review and a request for a stay.

That means that the penalty phase in this case is expected to start tomorrow morning in Redwood City. The same jury that found Peterson guilty of first-degree murder for the death of his wife and second-degree murder for the death of his unborn child will decide his fate. It will either be the death penalty or life in prison without the possibility of parole.

It is expected that prosecutors will show, as part of their case, photographs of Laci Peterson when she was growing up. This is a video presentation that the judge reviewed last week, but the prosecution wants to show it to this jury to document her life.

It was shown at a memorial service held in Modesto after Laci Peterson's death. The defense will of course ask this jury to spare Scott Peterson's life. That is expected to start tomorrow -- Judy.

WOODRUFF: All right. Ted Rowlands bringing us the latest from San Francisco.

Ted, thank you very much.

Come January, Republicans will have more seats in Congress. So you'd think President Bush would have an easier time getting his agenda passed on Capitol Hill. But that may not be the case. The story coming up.

Plus, Washington gets into the holiday spirit. We'll tell you about two very important arrivals here in the nation's capital.

(COMMERCIAL BREAK)

WOODRUFF: It's just before 4:00 in the East, and as the markets close on Wall Street I'm joined by Kitty Pilgrim in New York with "The Dobbs Report."

Hello, Kitty.

KITTY PILGRIMS, CNN CORRESPONDENT: Thanks, Judy.

Well, retailers are adding up the receipts from the season's first big holiday shopping weekend. So far, the reviews are mixed. Now, the national retail federation says 133 million shoppers hit the stores over Thanksgiving weekend, spending nearly $23 billion. According to Shopper Track, that's up ten percent from last year. Now, on average, each shopper spent about $265. That's about a third of their expected budget for the entire season.

Analysts say things look good. Consumers are more comfortable with the state of the economy and their jobs this year, but while spending started strong on Friday, it faded by the weekend's close. So it really is too soon to tell how the overall season will be. SCOTT KRUGMAN, NATIONAL RETAIL FEDERATION: It's usually not a bell weather for the rest of the holiday season. As we're fond of saying, it's a marathon, it's not a sprint. And it's typically the week before Christmas and the week after Christmas that really helps us determine what kind of holiday season we're going to have.

PILGRIM: Wal-Mart slashed its sales forecast for the month. They say that consumer traffic slowed toward the end of Thanksgiving week. J.C. Penny, Sears, also remain cautious about their holiday seasons. All three stocks were lower and Wal-Mart dragged the down -- the Dow industrials.

Now, as the final trades are being counted, the Dow is down 46 points while the Nasdaq is just slightly higher. Shares of Apple Computer, they're up 6 percent. Two brokerages raised their price targets on the stock, and that's based on strong sales of Apple's iPod music player.

Coming up at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," we begin our special series, "Overmedicated Nation." Tonight we take a look at how profits are driving the healthcare system in our country.

And then, a new report from the United Nations shows broken borders are not just a problem for the United States. We take a look at the global increase in immigration and how world governments are dealing with it.

And in Iraq, concerns the country may not be ready for January elections. Senator Ben Nelson of the Armed Services Committee is just back from Iraq and he is our guest tonight. Back to you -- Judy.

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

(BEGIN VIDEOTAPE)

ANNOUNCER: President Bush chooses a cereal company executive to take over at Commerce.

UNIDENTIFIED MALE: I look forward to working with you on your team.

ANNOUNCER: Will Mr. Bush continue to look to outsiders as he pushes his economic agenda?

Heading north of the border.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Looking forward to bringing greetings from my great country to your great country.

ANNOUNCER: Will President Bush receive a warm welcome or a cold shoulder when he visits Canada tomorrow?

A country divided into different colors. Sound familiar? We're not talking about our election. Is the Ukraine as divided as the U.S.? Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. With President Bush's nomination of a new commerce secretary today, he began the process of retooling his economic team for a second term. Mr. Bush praised Kellogg CEO Carlos Gutierrez as one of America's most respected business leaders. And, quote, as a "great American success story." But what would Gutierrez bring to the Bush cabinet if he is confirmed to replace long-time Bush friend Don Evans?

Let's go now to our senior White House correspondent John King. John, do we know what sold the president on Carlos Gutierrez?

JOHN KING, SENIOR WHITE HOUSE CORRESPONDENT: Well, what sold him is an impressive record in the board room at the Kellogg company. And also, a very impressive story, a Cuban immigrant who came to this country, was selling cereal out of a truck for Kellogg's in his first job, now the CEO.

There are inside players, Judy, in Washington and outside players. The White House views Carlos Gutierrez as a good outside player, a man to travel the country to go to major business and manufacturing meetings around the country, who can make the case that he succeeded in the board room, listen to him as he sells the present agenda. Also as a man who can go to trade meetings around the world and represent the administration's agenda, as well.

Yes, here in Washington, to help sell a quite ambitious agenda on social security and tax reform, but there will be other faces on the economic team, White House officials say, who will take bigger roles in that. They think in Carlos Gutierrez they have a very good salesman to send around the country and the world representing the president.

WOODRUFF: Speaking of the rest of the economic team, John, reports today of other potential changes in the team and the agenda. What are you hearing?

KING: Well, they're key jobs. Not well-known around the country, not even well-known really in Washington sometimes, but the top economic adviser's job here at the White House, Steve Friedman, has already said he's leaving that job. Greg Mankiw runs what is called the Council of Economic Advisers here at the White House. He is out right now, expected to come back for a very short period of time, if at all. That job is likely to be open as well.

Those are behind the scenes positions, if you will, but critical in shaping that new social security policy, the new tax reform policy. Two very ambitious and controversial items on the second term agenda. So those jobs will be key. And we're also told that Treasury Secretary John Snow is likely to stay on a few months, maybe, into the second term, but perhaps not much longer, so there could be two, three, perhaps even four or five if you take the subpositions in the Treasury and other departments. More change to come. But Judy, we should make clear that economic policy is run by the president and the vice president. For all the change we are likely to see, they will be the two key salesmen in making the case for these quite ambitious proposals.

WOODRUFF: John, what about some of the names that are already circulating at Treasury, to run Treasury?

KING: Well, we're being told to be very careful here at the White House, because they say there is no timetable as yet for Secretary Snow to leave, so he is the secretary. But you do hear some people in Washington saying the president needs, if he is to sell dramatic tax reform, if he is to sell dramatic social security overhaul, he needs somebody with very good relations on Capitol Hill. So you hear former Senator Graham's name mentioned in some circles. There's a retired banker whose name has come up in recent days.

Administration officials, though, point to today, when the president surprised all of us and they say, be careful of all this speculation. When the president has an opening, he'll fill it. You might speculate now, you might be wrong.

WOODRUFF: They are capable of surprising us, aren't they, John?

KING: Yes they are.

WOODRUFF: Every once in a while. OK. John King, thanks very much.

KING: Thank you.

WOODRUFF: Well, tomorrow the president travels to Canada, the first state visit there by a U.S. president in nearly ten years. The two countries share a border and much more. But that will not necessarily translate into a warm welcome for Mr. Bush.

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): Some members of Parliament and other Canadians are not shy about showing their less than friendly feelings toward President Bush. This lawmaker recently was seen on Canadian television stomping on a Bush action figure. It was meant to be a spoof, but it wasn't the first time she had publicly dissed the president.

UNIDENTIFIED FEMALE: We are not joining the coalition of the idiots.

WOODRUFF: That helps explain why President Bush will not address the Canadian Parliament during his trip, as most major foreign leaders do. Cat calls from sometimes raucous members would have been a real possibility, as President Reagan found out in 1987.

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: We see such a campaign on our own shores, threatening -- is there an echo in here? WOODRUFF: It may be more difficult for Mr. Bush to avoid the thousands of anti-war protesters expected to converge in Canada during his visit. Like the Europeans, many Canadians oppose the U.S.-led war in Iraq and are turned off by what they perceive to be the Bush Administration's go it alone foreign policy. Two-thirds of Canadians say their opinion of the United States has gotten worse over the past four years. No wonder Mr. Bush is expected to deliver a we're all in this together message to Canadians, particularly on the War on Terror.

BUSH: Looking forward to bringing the greetings of my great country to your great country.

WOODRUFF: Canadian Prime Minister Paul Martin is expected to walk a fine line during his talks with the president. He hopes to make progress on trade disputes without appearing too chummy with someone so unpopular with so many Canadians.

PAUL MARTIN, CANADIAN PRIME MINISTER: We have a lot of issues to discuss in terms of North America and also in terms of the world.

(END VIDEOTAPE)

WOODRUFF: At the very least, Martin is not in the uncomfortable position that former Canadian Prime Minister Jean Chretien was in two years ago. When a top aide to Chretian was overheard calling Mr. Bush a moron, Chretian was then forced publicly to state that the president was a friend of his and quoting now, "not a moron at all."

Republicans on Capitol Hill are operating under a strict guideline, the Hastert rule. That's what Ron Brownstein calls it. He will be along to talk about the rule and the ramifications.

Also ahead, are there parallels between the disputed election in the Ukraine and the November 2nd vote in this country?

And later, another tree or two closer to Christmas in the Capitol.

(COMMERCIAL BREAK)

WOODRUFF: In all the recent political wrangling over intelligence reform, House Speaker Dennis Hastert has played an important role in blocking the bill. And Hastert's actions raise broader questions about GOP leadership on the Hill during the president's second term. Let's bring in our political analyst Ron Brownstein of the "Los Angeles Times." Ron, first of all, you wrote in your piece today in the "Times" that the bill lacked the right kind of support. What did you mean by that?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, I don't think anyone on either side of this dispute right now there is a majority for the intelligence reform legislation in both chambers of Congress. What's held it up is the concern among the House Republican leadership that it may not have majority support among House Republicans. And what Denny Hastert is saying, making more explicit than he has before though it's been a general guideline for him, is he does not want to pass a bill unless it has majority support not only from the House overall but among the House Republicans.

WOODRUFF: But the president -- and here's where it gets interesting. The president has said he's for this reform. But you get sort of, you know, the sense from a lot of the reporting that the White House wasn't pushing as hard as it might have been.

BROWNSTEIN: First of all, clearly the House Republicans are saying the White House is giving them mixed signals. I had a senior aide say to me for the column today that they even had different vibrations from the president and vice president on whether they wanted the existing bill voted upon.

WOODRUFF: So what's all that about?

BROWNSTEIN: If the president does want the bill and certainly the White House today, the comments from Scott McClellan were stronger, they said that they want the bill passed as soon as possible, they want to work with Republicans this week at a congressional retreat. They're going to put out a letter later this week outlining their views on the bill. Clearly if he wants the bill passed and he can't reach on agreement in the next few days that both brings into line the House Republicans without alienating the Senate, if he does want the bill passed, the obvious way for him to do it is call for an up or down vote.

WOODRUFF: But at this point, how does one -- I mean, you're over there reporting, talking to people all the time. How do you determine how hard the president is pushing?

You have a division in the Pentagon. You have Rumsfeld saying he's for the president and the joint chiefs of staff saying -- the chairman of the joint chief -- General Myers saying, no, we're with Duncan Hunter.

BROWNSTEIN: We're all looking at the shadows in the cave. Congressman Sensenbrenner said it was not a hard sell from the president when he spoke to him about his objections on immigration which is a separate issue. Clearly the administration has said they want this bill. If they do want it they have to challenge, I think, in this case, what I call the Hastert rule, where you need the majority of the majority.

One of the clearest tests of leadership for a president is on occasion being (UNINTELLIGIBLE) and challenge your own party. No one wants to do it. But Bill Clinton did sign and promote NAFTA after 60 percent of House Democrats voted against it and he promoted and signed welfare reform after exactly half of House Democrats voted against it. So I think the test for the president will be if he wants this bill and he can't work out a deal, which is a logical first step, if he can't work out a deal, will he ask them for an up or down vote on it?

WOODRUFF: Something you mentioned that's very interesting in all this is Speaker Hastert saying we're not for this in effect because we don't have a majority of the majority -- a majority of the Republicans. What does that bode for future legislation? BROWSTEIN: I think it's going to be difficult for the president if he allows this precedent to stand. The obvious case is immigration reform where he wants to create a system where illegal immigrants can get temporary work visas. It's hard to imagine a version of that proposal that can win majority support among House Republicans and still have any chance of reaching 60 votes in the Senate to kill a filibuster. Social Security reform may face it as well. Joe Lieberman said, look, the issue should be is there a majority for the bill, not who constitutes the majority. The president may not necessarily go that far. He obviously has targeted most of his proposals as Republican base. No president likes to have conflict with his base. But can you go through an entire presidency and say there's nothing important enough where you will not risk it.

WOODRUFF: The other question it raises, is the leadership of the Republican party in the House in particular strong enough frankly to ignore what the president is saying to them?

BROWSTEIN: Well, and of course as I was saying before we don't know how hard he is saying it to them behind the scenes. Legislative leader obviously has to be conscious of his own caucus. No speaker is going to push bills systematically, that have systematic resistance in their caucus because he probably won't be the speaker then. The same question for the president is there for the speaker. Are there no bills where this general principle should be avoided?

WOODRUFF: And, you know, and again, with Hastert's decision not to go forward on this, the fingerprints of the president not clear.

BROWSTEIN: Exactly right. As I said, it's very clear, president's logical for him to do what he's doing right now, try to work out a deal. They're going to meet with House Republicans. But if they can't work out a deal, there's a very simple test for him whether he wants the bill. If he wants the bill, he can ask for a vote on it because he will probably win the vote.

WOODRUFF: A lot of ifs not right. Not certain as far as we know. Okay. Ron Brownstein, thanks very much.

Demonstrators continue to fill the streets of Kiev. Is orange the new color of public outrage? Our Bill Schneider looks at the centuries of conflict fueling Ukraine's current divide.

(COMMERCIAL BREAK)

WOODRUFF: The demonstrations continue today in the Ukrainian capital of Kiev where outgoing President Leonid Kuchma was quoted by Russian media as saying that a new election might be the only way to resolve the country's election crisis. Kuchma backed Viktor Yanukovych who appeared to get most votes in last week's election. But supporters of the other Viktor Yushchenko say the election was rigged. Our Bill Schneider has more on the longstanding political and cultural divisions inside Ukraine.

(BEGIN VIDEOTAPE) WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The Ukrainian election has a little bit of the Cold War, some echoes of Tiananmen Square and an election monitor from the U.S. noted, parallels to the recent American election.

SEN. RICHARD LUGAR (R), FOREIGN RELATIONS CHAIRMAN: Some leaders in the eastern part of the country are talking about dividing the country. One-third of the election divided it absolutely down the center between the red and the blue states, to use the analogy from the United States.

SCHNEIDER: The Ukrainian division actually goes back 350 years. In 1654 when Ukrainians were fighting Polish rule, a cossack (ph) leader named Hmel Nitski (ph), that's him on the horse, swore allegiance to the Russian czar. Since then, Ukrainians have been dominated by Russia. The east and south are strongly pro-Russian. Western Ukrainians are intensely nationalistic and distrustful of Russia.

Now look at what happened in the October 31 election. The east and south voted for one candidate, Viktor Yanukovych, a favorite of Moscow. Western Ukraine voted for Viktor Yushchenko, who favors stronger ties with Europe and the west. The election was officially called for Yanukovych, the current president's hand-picked successor. Observers saw massive fraud.

NELSON LEDSKY, NATL. DEMOCRATIC INSTITUTE: They reported that the voting -- the rigged voting was in the neighborhood of over a million extra votes.

SCHNEIDER: Yushchenko supporters massed in the streets of Kiev demanding that the results be annulled. Its orange the color of the Yushchenko protesters versus blue for Yanukovych supporters. Apparently in the post-Soviet era, nobody wants to be red. The European Union and the U.S. have denounced the election as fraudulent.

COLIN POWELL, SECRETARY OF STATES: And because there has not been an investigation of the numerous and credible reports of fraud and abuse.

SCHNEIDER: Sounds like what some Democrats are saying about Ohio. But in this case, Russia is involved. President Putin openly supported Yanukovych and has warned the west to back off. Polish leader Lech Walesa showed up to support the protesters. Poles versus Russians like in 1964. The Ukrainian election did not resolve anything. Instead, it brought the division of the country to a head. In the old days, Soviet tanks would have determined the outcome. Now it's in the hands of Ukrainian security forces.

JIM WALSH, TERRORISM EXPERT: If they turn against the protesters, it's unlikely that that's what a protest will succeed. But when they back the protesters it really helps create the possibility of a peaceful transition.

(END VIDEOTAPE) SCHNEIDER: Elections can expose divisions rather than heal them. That's what happened in Ukraine. That's what happened in the United States. And you know, that's what a lot of people worry could happen in Iraq.

WOODRUFF: Bill, you were just telling me there's an example of that in American history.

SCHNEIDER: There is indeed. The 1860 election, a long time ago. Abraham Lincoln got elected. The first Republican president. He got elected in November of 1860. A month later, in December, South Carolina seceded. The south would not remain in a country that was led by a Republican president.

WOODRUFF: And then we know what happened after that.

SCHNEIDER: Yes, indeed, tragically.

WOODRUFF: Bill Schneider, thanks very much.

Well, it's beginning to look a lot like Christmas here in the nation's capital. A Washington tradition continued this morning at the White House and on Capitol Hill. We'll have the festive details when we come back.

(COMMERCIAL BREAK)

WOODRUFF: A holiday tradition continued this morning here in Washington at both ends of Pennsylvania Avenue. First lady Laura Bush accepted the White House Christmas tree. An 18-foot noble fir from Washington state. The tree will be placed in the White House blue room.

Across town, the U.S. Capitol tree also has arrived. The huge Virginia Red Spruce is 65 feet tall. It will be positioned on the Capitol grounds and decorated with 5,000 ornaments and 10,000 lights. Something for us all to look forward to seeing. That's it for INSIDE POLITICS on this Monday. I'm Judy Woodruff. Thanks for joining us. "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 29, 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: President Bush looks to the private sector in picking his next Commerce secretary.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Carlos Gutierrez is one of America's most respected business leaders.

ANNOUNCER: Is this a sign of things to come, as Mr. Bush overhauls his economic thing?

UNIDENTIFIED FEMALE: I now pronounce that you are married.

ANNOUNCER: Gay marriage, it was one of the hot-button issues in the presidential election. But the Supreme Court steers clear of a Massachusetts law that legalizes same-sex marriages.

Fifty years of the high court ruled separate but equal public schools are unconstitutional, one state still has segregation on its books.

UNIDENTIFIED MALE: I'm disturbed over the fact that we still in 2004 have racist language.

(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 latest move in the Bush cabinet shuffle. This time, the president went outside of his inner circle, choosing the CEO of the Kellogg Company, Carlos Gutierrez, to be the next Commerce secretary.

Let's go to the White House and CNN's Elaine Quijano.

Hi, Elaine.

ELAINE QUIJANO, CNN CORRESPONDENT: Hello to you, Judy.

That's right, the name Carlos Gutierrez wasn't one of those names that had been floated around here in Washington as a possible contender for this job. But the president, in the Roosevelt Room of the White House, today announcing that Carlos Gutierrez, CEO of Kellogg, is his choice to replace outgoing Commerce secretary, Don Evans.

Now, the president called Gutierrez a "great American success story." And with an eye toward the future and his second term, Mr. Bush also laid out some of his administration's items, items that he believes Gutierrez can advance if the Senate confirms him.

(BEGIN VIDEO CLIP)

BUSH: With Carlos' leadership, we'll help more Americans, especially minorities and women, to start and grow their own small business. We'll reduce the burden of junk lawsuits and regulations on our entrepreneurs. We'll reform our outdated tax code to eliminate needless paperwork and encourage savings, investment and growth. We'll continue our commitment to free and fair trade.

(END VIDEO CLIP)

QUIJANO: Now, the president also pointed to Gutierrez's background. Gutierrez, as we said, CEO of Kellogg, the Kellogg Company. He has been chairman of the board at Kellogg since April of 2000.

He has been the chief executive officer since April of 1999. And he joined Kellogg's Mexico offenses in 1975 as a sales representative. He was born in 1953, in Havana, Cuba.

Now, Gutierrez made clear today that his views on economic issues are in lockstep with President Bush's.

(BEGIN VIDEO CLIP)

CARLOS GUTIERREZ, COMMERCE SECRETARY NOMINEE: I look forward to working with you on your team, helping you achieve the plans that you've laid out, the bold plans for our economy. And I'll be especially honored if confirmed to walk in the footsteps of Secretary Evans, who has served with great honor and distinction.

(END VIDEO CLIP)

QUIJANO: Now, Gutiererrez went on to say that he has some big shoes to fill. And the president himself extending some warm words about his Commerce secretary, outgoing secretary, Don Evans, saying that Secretary Evans led at a time of great difficulty, the September 11 attacks. Also mentioned corporate scandals and a recession.

And also, interestingly, Judy, of course the president noting that Don Evans has been a personal friend of his for some 30 years -- Judy.

WOODRUFF: True. The two are very close friends going way back. Elaine, thank you very much.

Now we turn to the Supreme Court, where the justices today refused to get involved in an issue that, by most accounts, was influential in this year's election: gay marriage. We're joined now by CNN's Bob Franken -- Bob. BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And, Judy, it's so interesting that the Supreme Court can have so much notice for doing nothing. What they did was decide not to take on the issue of the Massachusetts law that permits gay marriage.

They never give the reasons for not to use, their term, granting certiorari, but the feeling was that in this particular case, those who were filing the challenges to that law did not really have legal standing. That is to say, they're not affected.

It does not mean, Judy, that they may not take on the issue when someone who has a better case doesn't come forward later. And there are other cases out there.

WOODRUFF: But, Bob, the court, we learn, is taking on another controversial issue. And that is medical marijuana.

FRANKEN: This was social issue day. And this is, of course, the case that 11 states, including California, have laws on the book that allow the medical use of marijuana.

However, the federal government has the Controlled Substance Act which prohibits virtually any use of marijuana. And the two are in conflict.

So we end up with a constitutional question, the kind the justices consider all the time. Is the use of marijuana something that is done within the state for medicinal purposes, to use the term, something that does not violate the commerce clause? The Constitution gives Congress the right to regulate interstate commerce.

The administration argues that by implication, because it would contribute to a larger supply of marijuana, there is a violation of the federal laws that Congress has the right to regulate it. The states are saying, no, the states have the right to determine their own uses under the circumstances.

It's a quintessential Supreme Court case. And it's one that will be decided by the end of the term, which of course is next July.

WOODRUFF: Is next July. So we've got months to go before we find out how they come down on that one. Bob Franken, thank you very much. We appreciate it.

Well, 80-year-old chief justice, William Rehnquist, continues to work from home while receiving chemotherapy for thyroid cancer. A new poll shows 60 percent of Americans believe there should be a mandatory retirement age for U.S. Supreme Court justices, rather than the current life term.

Rehnquist's health has heightened speculation that President Bush will nominate at least one new member to the high court in his second term. An Associated Press-Ipsos poll found that 59 percent of Americans say they believe Mr. Bush should nominate Supreme Court justices that would uphold Roe versus Wade. Thirty-one percent say they favor justices who would overturn the decision that legalized abortion.

Over on Capitol Hill, a new P.R. campaign is in the works aimed at unblocking the intelligence reform bill. Many Democrats and Republicans are publicly now urging the president to get more involved in promoting the bill, even as some still privately wonder about his commitment to its passage.

Here now, our congressional correspondent, Joe Johns.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): The administration is trying to put an end to criticism the president is only lukewarm in passing intelligence reform. The White House says President Bush will send a letter to Capitol Hill later this week urging Congress to get the bill finished.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The president is firmly committed to getting this legislation passed and done as quickly as possible.

JOHNS: White House spokesman Scott McClellan made clear Monday the president disagrees with Republican Congressman Duncan Hunter, who opposes intelligence reforms on the grounds it could confuse the chain of command for military intelligence.

MCCLELLAN: The president would never sign legislation that would harm our troops or hurt our troops in any way. And the president believes that this is an important legislation that will further strengthen our intelligence operations.

JOHNS: With time running out, former members of the 9/11 Commission are also ratcheting up the public relations push to get a bill passed.

TOM KEAN, 9/11 COMMISSION CHAIRMAN: And if it doesn't pass now, it could be six months or longer. And that's six months or longer without the American people having the protections which we think they must have and which they want, 80 percent of them want. That's a danger we shouldn't risk.

JOHNS: This week, former members of the 9/11 Commission will meet with reporters, while representatives Chris Shays and Carolyn Maloney, who started a 9/11 Commission caucus, will hold an event with 9/11 families. Some families are also holding vigils this week in New york, Boston and Los Angeles. The hope is that added pressure and more public information about the bill will make it harder for some House members to continue opposing it.

(END VIDEOTAPE)

JOHNS: And the intel reform bill is expected to come up at a retreat of House Republicans in Virginia this week. White House officials are expected to be there. As well, people who are pushing for changes in the legislation are going to try to get their voices heard, including September 11 families, who want tougher immigration language in the bill, will be speaking out starting tomorrow.

Judy, back to you.

WOODRUFF: So, again, Joe, what's the timetable for this?

JOHNS: Well, the timetable, a lot of people hope, is that the Congress will come back into session early next week and actually do something about this bill. Of course, a lot of questions there as to whether those two key chairman from the Armed Services and Judiciary committees are willing to sign on.

Of course, a lot of pressure being placed on them. If they don't cave, then the question is whether it will get done at all.

WOODRUFF: Joe Johns, thank you very much. It sounds like you're fighting laryngitis. Take care of that voice. Thank you, Joe.

Well, the intel bill is just one piece of the puzzle. The Democrats grapple with their post-election political status. Up next, Iowa governor, Tom Vilsack, on the Democrats' future and why he took a pass on leading his party.

Also ahead, revisiting Alabama's segregationist history. Are beliefs of the past still present?

And later, the people of Ukraine showing their political colors.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Checking the Monday headlines in our "Campaign News Daily," former Democratic vice presidential hopeful John Edwards says his party needs to do a better job of connecting with the so-called values voters we have heard so much about since Election Day.

Looking back at the presidential campaign, Edwards tells the "Charlotte Observer," "I wish we had had better chances, better opportunities for me to talk about what my personal values are, how important my relationship with god is, how important my faith is in our day-to-day lives."

Continuing, he said, "The struggles my family's had in the past. Plus, what Elizabeth is facing now." Edwards' wife, as we have reported, is being treated for breast cancer.

John Edwards' running mate, John Kerry, is laying the ground work for reelection to the Senate four years from now. The "Boston Herald" reports that Kerry plans to file the paperwork this week to create the Friends of John Kerry Campaign Committee. Kerry, we should aid, has not ruled out another run for the White House.

John Kerry conceded defeat to George W. Bush after concluding he could not win Ohio. But the Reverend Jesse Jackson is among those who still question the outcome there. Ohio counties have until Wednesday to complete their official vote tallies. And the secretary of state says he plans to certify the results a week from today.

In Columbus yesterday, Jackson said he wants Congress to investigate reports of malfunctions involving Ohio's electronic voting machines, as well as reported problems in predominantly black and Democratic precincts. Jackson also says he supports plans by the Green and Libertarian parties to pay for a statewide recount.

In New Jersey, candidates are lining up to run for governor next year. Republican Brett Schundler, who lost to Democrat Jim McGreevey in 2001, plans to announce his candidacy this evening. The third Republican to enter the race.

Meanwhile, as we have reported, Senator Jon Corzine is to announce his candidacy later this week, setting up a possible showdown with acting governor and fellow Democrat, Richard Codey.

Well, in the days of John Kerry's defeat, Iowa's Democratic governor, Tom Vilsack, was among those mentioned as a potential candidate to become Democratic Party chair. Last week, however, he said he was not interested in the post.

Governor Vilsack joins me now from Des Moines to talk about the direction of his party and about his own political future.

Governor Vilsack, good to see you.

GOV. TOM VILSACK (D), IOWA: Hi, Judy. How are you?

WOODRUFF: Thanks for joining us. Why did you drop out of the race for DNC chair?

VILSACK: Well, Judy, I was asked to consider it. And out of respect for those who were making that request, I gave it some consideration.

But we have a very aggressive effort to instill early childhood opportunities for our youngsters in Iowa. And I was told by my staff that the time and the resources necessary to do the job at the DNC, and also to be governor of Iowa, would make it very difficult for that legislative agenda to get passed. And if I had to choose between my kids and my party, I figured I'd work for my kids now, and maybe someday serve my party in some other capacity.

WOODRUFF: Did the decision have anything to do with your thinking about possibly running for president in '08?

VILSACK: Judy, this is 2004; 2008 is a long, long, long time away. Frankly, if I'm going to focus on an election, I'm going to focus on 2006.

As the current chair of the Democratic Governors Association, I'm very interested in what we're going to be able to do as a party to prepare ourselves for 34 governors races, a third of the Senate and all of the House. A very, very critical election coming up, and we need to prepare for that.

WOODRUFF: Who should the Democratic Party pick? As you know, Howard Dean is the front-runner. Would he be a good choice?

VILSACK: You know, there are a lot of people that -- that would be able to do a good job as the DNC chair. But, you know, at the end of the day, it's really not as much about the chair as it is about the rest of us willing to help the chair.

This party has some significant challenges ahead. We've got to rebuild the grassroots. We've got to make sure that neighbor to neighbor are talking about Democratic ideals and policies and programs and politicians.

That's going to take a lot of effort on the part of a lot of people. Not just the chair.

Howard is certainly someone who energized the grassroots. There's other folks, Jeanne Shaheen, a variety of other people that have been mentioned that I know could do the job.

So I'm confident we're going to have a good chair. But I want to make sure that the rest of us help carry this rather significant heavy load that we face.

WOODRUFF: Well, given the Democrats' loss on November 2, though, Governor, would the Democratic Party be better off choosing a chair from a red state?

VILSACK: I don't think it's about where the chair's from. I think it's about what we -- what we promote. In the lead-in to this segment, you mentioned Senator Edwards and his concerns about one of the gaps that the Democratic Party has to deal with, and that's the values gap.

There are several other gaps. There is the security gap. We have to reassure people that we are going to keep people safe as a party. And those of us who run as Democrats have to do that at every level.

We also have a reform gap. What's interesting is that governors, the Senate, the House the White House, now controlled by a majority of Republicans. They now basically control government.

Democrats need to be the party of reform. We need to be the party of change. We need to challenge the status quo. We ought not to be about defending the status quo.

And so I think it's going to be important for the chair to -- to engage all of us in this conversation. And it's really going to be about the ideals, the programs, the policies that the Democratic Party focuses on in the next couple of years that I think is most important, rather than where the chair is from.

WOODRUFF: So is John Kerry the leader of the Democratic Party right now? VILSACK: Well, John Kerry won the nomination. And by virtue of that, he certainly is considered one of the leaders of the Democratic Party.

I think that there are a number of other people that, obviously, as a result of their own election success, or as a result of past elections, have -- have a say in what goes on. There are governors who want to be engaged and involved.

Bill Richardson, who's the incoming chair of the Democratic Governors Association, is certainly someone that we all need to be listening to. A number of other governors, some key and influential senators, members of the House of Representatives, state legislators, mayors.

This really needs to be an inclusive process. It can't just be one person at the head of the party. It can't be just about where the chair is from. It's about reorganizing and restructuring the Democratic Party to respond to the concerns that are out there among Americans.

WOODRUFF: It sounds like a tall order for the Democrats.

VILSACK: It is. But you know, I'm optimistic about this.

I took a look at the state legislative races. And the Democrats had a net gain of 75. So at the grassroots, we're beginning that process of turning this party around. And I'm pretty sure by 2006, we're going to be ready to reclaim our status as the majority party in this country.

WOODRUFF: Governor of the state of Iowa, Tom Vilsack. Thank you very much. It's good to see you, Governor.

VILSACK: Thank you. Good to see you.

WOODRUFF: Thank you for talking with me. We appreciate it.

The Supreme Court outlawed segregation in schools 50 years ago. But in Alabama, segregation language remains in the state constitution. We'll give you the latest on the recount on a controversial ballot initiative, and a bit of historical perspective after the break.

(COMMERCIAL BREAK)

WOODRUFF: Some late-breaking developments to tell you about in the case of convicted murderer, Scott Peterson. Let's go for the latest to San Francisco and our correspondent, Ted Rowlands -- Ted.

TED ROWLANDS, CNN CORRESPONDENT: Judy, the State Supreme Court here in California has just denied a request for a review and a stay from Scott Peterson's lawyers. Mark Geragos had filed this with the high court here, asking that a new jury be empanelled for the penalty phase in the Scott Peterson murder trial. He also asked the State Supreme Court to step in and grant a change of venue for the penalty phase. The State Supreme Court, just within the last few minutes, however, denied that request for a review and a request for a stay.

That means that the penalty phase in this case is expected to start tomorrow morning in Redwood City. The same jury that found Peterson guilty of first-degree murder for the death of his wife and second-degree murder for the death of his unborn child will decide his fate. It will either be the death penalty or life in prison without the possibility of parole.

It is expected that prosecutors will show, as part of their case, photographs of Laci Peterson when she was growing up. This is a video presentation that the judge reviewed last week, but the prosecution wants to show it to this jury to document her life.

It was shown at a memorial service held in Modesto after Laci Peterson's death. The defense will of course ask this jury to spare Scott Peterson's life. That is expected to start tomorrow -- Judy.

WOODRUFF: All right. Ted Rowlands bringing us the latest from San Francisco.

Ted, thank you very much.

Come January, Republicans will have more seats in Congress. So you'd think President Bush would have an easier time getting his agenda passed on Capitol Hill. But that may not be the case. The story coming up.

Plus, Washington gets into the holiday spirit. We'll tell you about two very important arrivals here in the nation's capital.

(COMMERCIAL BREAK)

WOODRUFF: It's just before 4:00 in the East, and as the markets close on Wall Street I'm joined by Kitty Pilgrim in New York with "The Dobbs Report."

Hello, Kitty.

KITTY PILGRIMS, CNN CORRESPONDENT: Thanks, Judy.

Well, retailers are adding up the receipts from the season's first big holiday shopping weekend. So far, the reviews are mixed. Now, the national retail federation says 133 million shoppers hit the stores over Thanksgiving weekend, spending nearly $23 billion. According to Shopper Track, that's up ten percent from last year. Now, on average, each shopper spent about $265. That's about a third of their expected budget for the entire season.

Analysts say things look good. Consumers are more comfortable with the state of the economy and their jobs this year, but while spending started strong on Friday, it faded by the weekend's close. So it really is too soon to tell how the overall season will be. SCOTT KRUGMAN, NATIONAL RETAIL FEDERATION: It's usually not a bell weather for the rest of the holiday season. As we're fond of saying, it's a marathon, it's not a sprint. And it's typically the week before Christmas and the week after Christmas that really helps us determine what kind of holiday season we're going to have.

PILGRIM: Wal-Mart slashed its sales forecast for the month. They say that consumer traffic slowed toward the end of Thanksgiving week. J.C. Penny, Sears, also remain cautious about their holiday seasons. All three stocks were lower and Wal-Mart dragged the down -- the Dow industrials.

Now, as the final trades are being counted, the Dow is down 46 points while the Nasdaq is just slightly higher. Shares of Apple Computer, they're up 6 percent. Two brokerages raised their price targets on the stock, and that's based on strong sales of Apple's iPod music player.

Coming up at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," we begin our special series, "Overmedicated Nation." Tonight we take a look at how profits are driving the healthcare system in our country.

And then, a new report from the United Nations shows broken borders are not just a problem for the United States. We take a look at the global increase in immigration and how world governments are dealing with it.

And in Iraq, concerns the country may not be ready for January elections. Senator Ben Nelson of the Armed Services Committee is just back from Iraq and he is our guest tonight. Back to you -- Judy.

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

(BEGIN VIDEOTAPE)

ANNOUNCER: President Bush chooses a cereal company executive to take over at Commerce.

UNIDENTIFIED MALE: I look forward to working with you on your team.

ANNOUNCER: Will Mr. Bush continue to look to outsiders as he pushes his economic agenda?

Heading north of the border.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Looking forward to bringing greetings from my great country to your great country.

ANNOUNCER: Will President Bush receive a warm welcome or a cold shoulder when he visits Canada tomorrow?

A country divided into different colors. Sound familiar? We're not talking about our election. Is the Ukraine as divided as the U.S.? Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. With President Bush's nomination of a new commerce secretary today, he began the process of retooling his economic team for a second term. Mr. Bush praised Kellogg CEO Carlos Gutierrez as one of America's most respected business leaders. And, quote, as a "great American success story." But what would Gutierrez bring to the Bush cabinet if he is confirmed to replace long-time Bush friend Don Evans?

Let's go now to our senior White House correspondent John King. John, do we know what sold the president on Carlos Gutierrez?

JOHN KING, SENIOR WHITE HOUSE CORRESPONDENT: Well, what sold him is an impressive record in the board room at the Kellogg company. And also, a very impressive story, a Cuban immigrant who came to this country, was selling cereal out of a truck for Kellogg's in his first job, now the CEO.

There are inside players, Judy, in Washington and outside players. The White House views Carlos Gutierrez as a good outside player, a man to travel the country to go to major business and manufacturing meetings around the country, who can make the case that he succeeded in the board room, listen to him as he sells the present agenda. Also as a man who can go to trade meetings around the world and represent the administration's agenda, as well.

Yes, here in Washington, to help sell a quite ambitious agenda on social security and tax reform, but there will be other faces on the economic team, White House officials say, who will take bigger roles in that. They think in Carlos Gutierrez they have a very good salesman to send around the country and the world representing the president.

WOODRUFF: Speaking of the rest of the economic team, John, reports today of other potential changes in the team and the agenda. What are you hearing?

KING: Well, they're key jobs. Not well-known around the country, not even well-known really in Washington sometimes, but the top economic adviser's job here at the White House, Steve Friedman, has already said he's leaving that job. Greg Mankiw runs what is called the Council of Economic Advisers here at the White House. He is out right now, expected to come back for a very short period of time, if at all. That job is likely to be open as well.

Those are behind the scenes positions, if you will, but critical in shaping that new social security policy, the new tax reform policy. Two very ambitious and controversial items on the second term agenda. So those jobs will be key. And we're also told that Treasury Secretary John Snow is likely to stay on a few months, maybe, into the second term, but perhaps not much longer, so there could be two, three, perhaps even four or five if you take the subpositions in the Treasury and other departments. More change to come. But Judy, we should make clear that economic policy is run by the president and the vice president. For all the change we are likely to see, they will be the two key salesmen in making the case for these quite ambitious proposals.

WOODRUFF: John, what about some of the names that are already circulating at Treasury, to run Treasury?

KING: Well, we're being told to be very careful here at the White House, because they say there is no timetable as yet for Secretary Snow to leave, so he is the secretary. But you do hear some people in Washington saying the president needs, if he is to sell dramatic tax reform, if he is to sell dramatic social security overhaul, he needs somebody with very good relations on Capitol Hill. So you hear former Senator Graham's name mentioned in some circles. There's a retired banker whose name has come up in recent days.

Administration officials, though, point to today, when the president surprised all of us and they say, be careful of all this speculation. When the president has an opening, he'll fill it. You might speculate now, you might be wrong.

WOODRUFF: They are capable of surprising us, aren't they, John?

KING: Yes they are.

WOODRUFF: Every once in a while. OK. John King, thanks very much.

KING: Thank you.

WOODRUFF: Well, tomorrow the president travels to Canada, the first state visit there by a U.S. president in nearly ten years. The two countries share a border and much more. But that will not necessarily translate into a warm welcome for Mr. Bush.

(BEGIN VIDEOTAPE)

WOODRUFF (voice-over): Some members of Parliament and other Canadians are not shy about showing their less than friendly feelings toward President Bush. This lawmaker recently was seen on Canadian television stomping on a Bush action figure. It was meant to be a spoof, but it wasn't the first time she had publicly dissed the president.

UNIDENTIFIED FEMALE: We are not joining the coalition of the idiots.

WOODRUFF: That helps explain why President Bush will not address the Canadian Parliament during his trip, as most major foreign leaders do. Cat calls from sometimes raucous members would have been a real possibility, as President Reagan found out in 1987.

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: We see such a campaign on our own shores, threatening -- is there an echo in here? WOODRUFF: It may be more difficult for Mr. Bush to avoid the thousands of anti-war protesters expected to converge in Canada during his visit. Like the Europeans, many Canadians oppose the U.S.-led war in Iraq and are turned off by what they perceive to be the Bush Administration's go it alone foreign policy. Two-thirds of Canadians say their opinion of the United States has gotten worse over the past four years. No wonder Mr. Bush is expected to deliver a we're all in this together message to Canadians, particularly on the War on Terror.

BUSH: Looking forward to bringing the greetings of my great country to your great country.

WOODRUFF: Canadian Prime Minister Paul Martin is expected to walk a fine line during his talks with the president. He hopes to make progress on trade disputes without appearing too chummy with someone so unpopular with so many Canadians.

PAUL MARTIN, CANADIAN PRIME MINISTER: We have a lot of issues to discuss in terms of North America and also in terms of the world.

(END VIDEOTAPE)

WOODRUFF: At the very least, Martin is not in the uncomfortable position that former Canadian Prime Minister Jean Chretien was in two years ago. When a top aide to Chretian was overheard calling Mr. Bush a moron, Chretian was then forced publicly to state that the president was a friend of his and quoting now, "not a moron at all."

Republicans on Capitol Hill are operating under a strict guideline, the Hastert rule. That's what Ron Brownstein calls it. He will be along to talk about the rule and the ramifications.

Also ahead, are there parallels between the disputed election in the Ukraine and the November 2nd vote in this country?

And later, another tree or two closer to Christmas in the Capitol.

(COMMERCIAL BREAK)

WOODRUFF: In all the recent political wrangling over intelligence reform, House Speaker Dennis Hastert has played an important role in blocking the bill. And Hastert's actions raise broader questions about GOP leadership on the Hill during the president's second term. Let's bring in our political analyst Ron Brownstein of the "Los Angeles Times." Ron, first of all, you wrote in your piece today in the "Times" that the bill lacked the right kind of support. What did you mean by that?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, I don't think anyone on either side of this dispute right now there is a majority for the intelligence reform legislation in both chambers of Congress. What's held it up is the concern among the House Republican leadership that it may not have majority support among House Republicans. And what Denny Hastert is saying, making more explicit than he has before though it's been a general guideline for him, is he does not want to pass a bill unless it has majority support not only from the House overall but among the House Republicans.

WOODRUFF: But the president -- and here's where it gets interesting. The president has said he's for this reform. But you get sort of, you know, the sense from a lot of the reporting that the White House wasn't pushing as hard as it might have been.

BROWNSTEIN: First of all, clearly the House Republicans are saying the White House is giving them mixed signals. I had a senior aide say to me for the column today that they even had different vibrations from the president and vice president on whether they wanted the existing bill voted upon.

WOODRUFF: So what's all that about?

BROWNSTEIN: If the president does want the bill and certainly the White House today, the comments from Scott McClellan were stronger, they said that they want the bill passed as soon as possible, they want to work with Republicans this week at a congressional retreat. They're going to put out a letter later this week outlining their views on the bill. Clearly if he wants the bill passed and he can't reach on agreement in the next few days that both brings into line the House Republicans without alienating the Senate, if he does want the bill passed, the obvious way for him to do it is call for an up or down vote.

WOODRUFF: But at this point, how does one -- I mean, you're over there reporting, talking to people all the time. How do you determine how hard the president is pushing?

You have a division in the Pentagon. You have Rumsfeld saying he's for the president and the joint chiefs of staff saying -- the chairman of the joint chief -- General Myers saying, no, we're with Duncan Hunter.

BROWNSTEIN: We're all looking at the shadows in the cave. Congressman Sensenbrenner said it was not a hard sell from the president when he spoke to him about his objections on immigration which is a separate issue. Clearly the administration has said they want this bill. If they do want it they have to challenge, I think, in this case, what I call the Hastert rule, where you need the majority of the majority.

One of the clearest tests of leadership for a president is on occasion being (UNINTELLIGIBLE) and challenge your own party. No one wants to do it. But Bill Clinton did sign and promote NAFTA after 60 percent of House Democrats voted against it and he promoted and signed welfare reform after exactly half of House Democrats voted against it. So I think the test for the president will be if he wants this bill and he can't work out a deal, which is a logical first step, if he can't work out a deal, will he ask them for an up or down vote on it?

WOODRUFF: Something you mentioned that's very interesting in all this is Speaker Hastert saying we're not for this in effect because we don't have a majority of the majority -- a majority of the Republicans. What does that bode for future legislation? BROWSTEIN: I think it's going to be difficult for the president if he allows this precedent to stand. The obvious case is immigration reform where he wants to create a system where illegal immigrants can get temporary work visas. It's hard to imagine a version of that proposal that can win majority support among House Republicans and still have any chance of reaching 60 votes in the Senate to kill a filibuster. Social Security reform may face it as well. Joe Lieberman said, look, the issue should be is there a majority for the bill, not who constitutes the majority. The president may not necessarily go that far. He obviously has targeted most of his proposals as Republican base. No president likes to have conflict with his base. But can you go through an entire presidency and say there's nothing important enough where you will not risk it.

WOODRUFF: The other question it raises, is the leadership of the Republican party in the House in particular strong enough frankly to ignore what the president is saying to them?

BROWSTEIN: Well, and of course as I was saying before we don't know how hard he is saying it to them behind the scenes. Legislative leader obviously has to be conscious of his own caucus. No speaker is going to push bills systematically, that have systematic resistance in their caucus because he probably won't be the speaker then. The same question for the president is there for the speaker. Are there no bills where this general principle should be avoided?

WOODRUFF: And, you know, and again, with Hastert's decision not to go forward on this, the fingerprints of the president not clear.

BROWSTEIN: Exactly right. As I said, it's very clear, president's logical for him to do what he's doing right now, try to work out a deal. They're going to meet with House Republicans. But if they can't work out a deal, there's a very simple test for him whether he wants the bill. If he wants the bill, he can ask for a vote on it because he will probably win the vote.

WOODRUFF: A lot of ifs not right. Not certain as far as we know. Okay. Ron Brownstein, thanks very much.

Demonstrators continue to fill the streets of Kiev. Is orange the new color of public outrage? Our Bill Schneider looks at the centuries of conflict fueling Ukraine's current divide.

(COMMERCIAL BREAK)

WOODRUFF: The demonstrations continue today in the Ukrainian capital of Kiev where outgoing President Leonid Kuchma was quoted by Russian media as saying that a new election might be the only way to resolve the country's election crisis. Kuchma backed Viktor Yanukovych who appeared to get most votes in last week's election. But supporters of the other Viktor Yushchenko say the election was rigged. Our Bill Schneider has more on the longstanding political and cultural divisions inside Ukraine.

(BEGIN VIDEOTAPE) WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The Ukrainian election has a little bit of the Cold War, some echoes of Tiananmen Square and an election monitor from the U.S. noted, parallels to the recent American election.

SEN. RICHARD LUGAR (R), FOREIGN RELATIONS CHAIRMAN: Some leaders in the eastern part of the country are talking about dividing the country. One-third of the election divided it absolutely down the center between the red and the blue states, to use the analogy from the United States.

SCHNEIDER: The Ukrainian division actually goes back 350 years. In 1654 when Ukrainians were fighting Polish rule, a cossack (ph) leader named Hmel Nitski (ph), that's him on the horse, swore allegiance to the Russian czar. Since then, Ukrainians have been dominated by Russia. The east and south are strongly pro-Russian. Western Ukrainians are intensely nationalistic and distrustful of Russia.

Now look at what happened in the October 31 election. The east and south voted for one candidate, Viktor Yanukovych, a favorite of Moscow. Western Ukraine voted for Viktor Yushchenko, who favors stronger ties with Europe and the west. The election was officially called for Yanukovych, the current president's hand-picked successor. Observers saw massive fraud.

NELSON LEDSKY, NATL. DEMOCRATIC INSTITUTE: They reported that the voting -- the rigged voting was in the neighborhood of over a million extra votes.

SCHNEIDER: Yushchenko supporters massed in the streets of Kiev demanding that the results be annulled. Its orange the color of the Yushchenko protesters versus blue for Yanukovych supporters. Apparently in the post-Soviet era, nobody wants to be red. The European Union and the U.S. have denounced the election as fraudulent.

COLIN POWELL, SECRETARY OF STATES: And because there has not been an investigation of the numerous and credible reports of fraud and abuse.

SCHNEIDER: Sounds like what some Democrats are saying about Ohio. But in this case, Russia is involved. President Putin openly supported Yanukovych and has warned the west to back off. Polish leader Lech Walesa showed up to support the protesters. Poles versus Russians like in 1964. The Ukrainian election did not resolve anything. Instead, it brought the division of the country to a head. In the old days, Soviet tanks would have determined the outcome. Now it's in the hands of Ukrainian security forces.

JIM WALSH, TERRORISM EXPERT: If they turn against the protesters, it's unlikely that that's what a protest will succeed. But when they back the protesters it really helps create the possibility of a peaceful transition.

(END VIDEOTAPE) SCHNEIDER: Elections can expose divisions rather than heal them. That's what happened in Ukraine. That's what happened in the United States. And you know, that's what a lot of people worry could happen in Iraq.

WOODRUFF: Bill, you were just telling me there's an example of that in American history.

SCHNEIDER: There is indeed. The 1860 election, a long time ago. Abraham Lincoln got elected. The first Republican president. He got elected in November of 1860. A month later, in December, South Carolina seceded. The south would not remain in a country that was led by a Republican president.

WOODRUFF: And then we know what happened after that.

SCHNEIDER: Yes, indeed, tragically.

WOODRUFF: Bill Schneider, thanks very much.

Well, it's beginning to look a lot like Christmas here in the nation's capital. A Washington tradition continued this morning at the White House and on Capitol Hill. We'll have the festive details when we come back.

(COMMERCIAL BREAK)

WOODRUFF: A holiday tradition continued this morning here in Washington at both ends of Pennsylvania Avenue. First lady Laura Bush accepted the White House Christmas tree. An 18-foot noble fir from Washington state. The tree will be placed in the White House blue room.

Across town, the U.S. Capitol tree also has arrived. The huge Virginia Red Spruce is 65 feet tall. It will be positioned on the Capitol grounds and decorated with 5,000 ornaments and 10,000 lights. Something for us all to look forward to seeing. That's it for INSIDE POLITICS on this Monday. I'm Judy Woodruff. Thanks for joining us. "CROSSFIRE" starts right now.

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