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Inside Politics

U.S. Calls Off Search for WMD in Iraq; Howard Dean Says He'll Target Grassroots Recruitment as DNC Chair; Bush Second-Term Strategy in Crisis Mode; Louisiana Senator Urges Action on International Adoption

Aired January 12, 2005 - 15:30   ET

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

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


(BEGIN VIDEOTAPE)
ANNOUNCER: Iraq flashpoints. As election day gets closer, are hopes for a free, fair and safe vote getting bleaker?

Dr. Dean's prescription for the Democratic Party.

HOWARD DEAN, DNC CHAIR CANDIDATE: We're about 20 years behind the Republicans in terms of organization, in terms of message.

ANNOUNCER: The now official candidate for DNC chair talks about his campaign platform.

An uphill battle to help tsunami orphans. U.S. lawmakers promote protections and adoptions.

SEN. MARY LANDRIEU (D), LOUISIANA: Stop building orphanages and start building families.

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

(END VIDEOTAPE)

JUDY WOODRUFF, HOST: Thank you for joining us.

We begin with Iraq, and new word that the physical hunt for weapons of mass destruction ended in recent weeks. To some, that may be like stating the obvious, but to others, it is a reminder that one of President Bush's early justifications for the war has been discredited.

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

Hi, Elaine.

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

That's right. The president's spokesman says that the White House is no longer holding open the possibility that there might still be weapons of mass destruction in Iraq. White House spokesman Scott McClellan saying earlier today it was his understanding that physical search for WMDs in Iraq is over. Now that conclusion comes almost two years after the U.S.-led invasion of Iraq. In making its case, the Bush administration had pointed to what it said was intelligence that indicated Saddam Hussein was pursuing weapons of mass destruction programs and likely had stockpiles hidden away.

But no stockpiles were found, and a U.S. intelligence official says the man who led the search, Charles Duelfer, is back in the U.S. and working on his final report.

Well, today, Scott McClellan said the president has already addressed this issue.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: What he said back in October, that the comprehensive report by Charles Duelfer concluded what his predecessor had said, as well, that the weapons that we all believed were there based on the intelligence, were not there.

And now what is important is that we need to go back and look at what was wrong with much of the intelligence that we had accumulated over a 12-year period and that our allies had accumulated over that same period of time and correct any flaws.

(END VIDEO CLIP)

QUIJANO: Now to do that, the president appointed an independent commission to figure out what went wrong with Iraq intelligence. That commission's work continues.

At the same time, McClellan also said that, based on what the U.S. knows now, the president would have taken the same action because in McClellan's words, quote, "This is about protecting the American people" -- Judy.

WOODRUFF: Elaine, we know, too, in connection with what you're talking about, that something like 44 political parties and organizations have announced they're pulling out of the elections because they're concerned about fairness, they're concerned about security.

What's the White House saying about that?

QUIJANO: Well, White House officials say that they want to make sure that there is the broadest participation possible in the Iraq elections. Officials, though, acknowledging that the elections will not be perfect, but also saying, of course, the security concerns that do exist are being addressed by the multinational forces that are in place there -- Judy.

WOODRUFF: All right. Elaine Quijano at White House. Elaine, thank you very much.

We'll have more on the formal end of the WMD search later on INSIDE POLITICS. Our Bill Schneider considers whether it matters to the American people.

In California today, the death toll from a massive mudslide rose to 10. Governor Arnold Schwarzenegger toured the scene in La Conchita from the air and on the ground.

Rescuers have been using shovels fiber optic cameras and their bare hands to search for missing people in the mud, sand and debris.

Schwarzenegger says the state will do everything it can to make the area safe again.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: In the past few days, we have seen the power of nature cause damage and despair, but we will match that power with our own resolve and we will come together as Californians and as neighbors.

(END VIDEO CLIP)

WOODRUFF: For more on the California mudslide, tune in tonight to CNN's "PAULA ZAHN NOW" at 8 Eastern.

And if you've been wondering what's going on with the world's weather, from mudslides to tsunamis, be sure to watch a special edition of "NEWSNIGHT" on extreme weather. That's tonight at 10 Eastern.

Turning to today's "Political Bytes," Democratic Christine Gregoire was sworn in as Washington state governor a short time ago, a day after state lawmakers certified her 129-vote victory. But Republicans still are challenging the election in court and demanding a revote. The first hearing in the case is scheduled for Friday.

Two San Mateo Democrats are urging President Bush to remove journalist Armstrong Williams from the president's Commission on White House Fellowship. We learned this week that the Bush administration paid Williams to promote the president's education reform plan.

Senate Minority Leader Harry Reid and Senator Frank Lautenberg say that Williams should not be affiliated with the White House in any way while the legality of that payment is being investigated.

Former Kerry campaign senior advisor Bob Shrum appears to be starting a new chapter of his career. Shrum tells me that he's selling his interest in his consulting firm and is moving with his wife from Washington to New York. He says he will teach at New York University this fall, and he may do some writing and some commentary, as well.

Well, Democrat Howard Dean is moving beyond the '04 election in a different way. After weeks of testing the waters, Dean formally announced his bid to be the new party chairman yesterday.

The former Vermont governor and 2004 presidential candidate joins us now on INSIDE POLITICS. Welcome, Governor. Good to see you again.

DEAN: Thanks. Good to be back on.

WOODRUFF: All right. Not to put too fine a point on it, but if the Democrats didn't want you to be their nominee, why should they want you to be their party chair?

DEAN: Well, we brought enormous energy to the Democratic Party and enormous numbers of new people and an enormous numbers -- amount of money. Those are all things that are very important for the Democratic National Committee.

Look, we're in the best shape we've ever been in. Terry McAuliffe has left us with the first surplus I've ever seen after a Democratic presidential campaign, but there are things that we haven't done because we haven't had the money.

And those include supporting state parties so we can have grassroots four-year campaigns instead of seven-month campaigns, and those include targeting lower offices like secretary of state.

I've been appalled by the conduct of some, although the Washington secretary of state is the great exception to this, but I've been appalled by the conduct of Republican secretaries of state, particularly in Florida and Ohio in the last couple election cycles where they actually participate in suppressing voter turnout and making sure, for example, that there are three voting machines in a precinct which is heavily Democratic, 10 voting machines in the one that's Republicans.

We need to pay attention to county clerks, secretaries of state, state legislatures who reapportion, and we're not paying attention to that now, because we haven't had the grass roots four-year cycle money to do that. And we will.

WOODRUFF: So you want to have a local focus.

You know the rap on Howard Dean is that, at a time when the party should be centrist, if anything, a time when the party has been walloped by the Republicans two times in a row, the last thing it needs is a visible liberal like Howard Dean to be its chair.

DEAN: Well, first of all I don't thing anything the matter with the word "liberal." We ought to get that straight right away.

Having said that I am a centrist. I'm in the center of where most of America is. I balance budgets. We haven't seen a balanced budget from a Republican, particularly in this administration, for a long time.

I speak my mind, and that is what I think Democrats have to do to win. I don't think Democrats need to jump around in the political spectrum to win. What we have to have is a clear message that stands for our values. Our values are more in tune with the values of the American people in general than the Republican values are. They focus on things like gay rights and abortion. We need to focus on things that most Americans care about: helping the least among us, strengthening education, health insurance, which is an enormous problem for most middle class Americans. That's how you win elections.

WOODRUFF: At the same time, Governor, what's to stop the Republicans from, if you're elected party chair, pointing at you and saying, "Here's somebody who's out of the mainstream, unrepresentative of what the great middle of this country wants?"

I mean, there were reports during the campaign that they were salivating at the idea of your being the nominee of the party. Why wouldn't they salivate at the idea of your being the head of the party?

DEAN: Well, when they publicly salivate you always wonder what they always think -- what they think privately.

The truth is that only way to take on the Republicans is straight ahead and fight them and not become one of the Republicans. If we become -- Ted Kennedy said this today in one of the great speeches I think we've had for a long time. It is not the way to beat the Republican Party by becoming Republican.

Harry Truman said that if you run a Republican against a Democrat who acts like a Republican, then the real Republican wins every time.

And let's look at Newt Gingrich for a model. How did he get rid of us? He stood up and made a distinct difference between the Republican Party and the Democratic Party after years of Republicans trying to pretend like they were Democrats.

It doesn't work to mimic the other party. Our values and the American people's values, we need to be proud of our values.

WOODRUFF: It's been reported that some conservative Democrats have let it be known they're ready to leave the party if you're elected chair. Have you heard this?

DEAN: Well, I haven't -- no, I haven't heard that. That sounds like Washington gossip to me, but I'd be happy to take a look at those reports if you let me see them.

WOODRUFF: Well, let me -- let me quote somebody you know well, and that is your former campaign manager, Joe Trippi. As I'm sure you know, he's weighed in for someone else, Simon Rosenberg of the New Democratic Network.

But Joe Trippi says of you, Howard Dean, he says, "We are muting one of the most progressive voices in the party, when we ought to be taking somebody who knows how to make the apparatus work, which Howard was not really that interested in."

DEAN: I'm not going to -- I'm not going to go after Joe Trippi. I have been very good about that.

Our campaign didn't work. There were plenty of reasons why it didn't work, and to get into all that stuff doesn't make sense.

This is not about Joe Trippi. The election is about the future of Democrats and the future of democracy. I know how to make grassroots work. We brought hundreds of thousands of people into this party, many of whom were not Democrats. We need those people in order to win.

We also need to concentrate on our base. Frankly I don't think we can go to the African-American community and say, "Gee, with three weeks to go, could you please get your vote out?"

We need to honor our base: labor, women, Latinos, African- Americans, people of color. And particularly, we need to increase our turn out with white working men. We can do that. The labor unions are the key to that. We just have to honor our base and our beliefs.

WOODRUFF: Two quick things. Bill Clinton, it's been reported, was out trying to recruit Wesley Clark to run for party chair. Do you have an endorsement either from Bill Clinton or John Kerry? Where does that stand?

DEAN: Well, you know, it would be ill served if I -- if I tried to respond to every Washington rumor that there was. I'm not going to respond to that one.

I have spoken to the president about this. I have spoken to Senator Clinton about this on number of occasions. I've spoken to John Kerry about this. You know, I believe I'm in pretty good terms with all the potential candidates for '08, which I am not, if I end up in this job.

But it's my job not to align myself with any particular candidate. It's my job to try to make sure that the party wins, whoever the nominee is. And we need to take back this party from the borrow and spend philosophy of George W. Bush.

WOODRUFF: Finally, hard for you to give up your dream of being president, which you said you will give up?

DEAN: Look, I want -- more important than my being president is bringing this country back into the mainstream course, which set us in such good stead for so many years.

We've lost our respect abroad. The president, as we just -- as you talked earlier, misled us by guiding us into Iraq, and now more than 1,300 brave Americans are dead.

We have -- are running up the largest deficit in the history of the state -- country and now he wants to borrow another $2 trillion so he can take away benefits from Social Security for old people.

This is not a country that's in good hands. We need to put it in good hands. So it's not so important for me to be the next president. It's important for somebody in the -- who has compassion for ordinary people, and that's a Democrat, to be the next president of the United States.

WOODRUFF: Governor Howard Dean, we'll be watching your candidacy, this one's for party chair.

DEAN: Thank you.

WOODRUFF: Thanks very much.

DEAN: Thanks very much.

WOODRUFF: We appreciate it.

Well, as the Bush administration tells it, the Social Security system is in crisis. How much does the president rely on the "c" word when he wants political action?

Plus the plight of tsunami orphans. It is an issue especially close to the heart of some members of Congress.

And later, an interview with Senator Edward Kennedy. We were just talking about him. He's urging his party to promote values while warning against becoming Republican clones.

(COMMERCIAL BREAK)

WOODRUFF: President Bush seems to be pushing his second term agenda with a sense of urgency. That crisis mode is especially true when he talks about his plan to overhaul Social Security.

Our Bruce Morton takes a closer look at this crisis approach and how it could play out for the president.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Critics say George W. Bush seems to have one strategy whenever he wants Congress to act on an issue. They say he proclaims it's a crisis and must act now.

Here he is this week urging action on Social Security.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want you to think about a Social Security system that will be flat bust, bankrupt, unless the United States Congress has got the willingness to act now.

MORTON: Act now: does it work? Sometimes.

Nine-eleven really was a crisis, of course, thousands of Americans killed. The president acted. The country approved going after al Qaeda, the attackers, in Afghanistan. Americans approved then and approve now of how Mr. Bush is handling terrorism.

Iraq was a crisis, Mr. Bush said. Saddam Hussein was a direct threat to the United States, had weapons that could hurt us.

But many argued Iraq wasn't a crisis in terms of America's safety. Saddam was a bad man, but now we know almost surely he didn't have those weapons of mass destruction.

Lately, columnists have been writing about what they say is the president's crisis approach to issues. Democratic Senator Edward Kennedy talked about it today.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We have an administration that falsely hypes almost every issue as a crisis. They did it on Iraq, and they are doing it now on Social Security. They exploit the politics of fear and division, while ours is a politics of hope and unity.

MORTON (on camera): How successful will be president be? Most experts say Social Security has problems but that they won't become acute for years yet.

In a recent CNN/"USA Today"/Gallup poll, just 18 percent of the sample thought the system faced a crisis. Over half said it had serious problems.

On tort reform, how much a plaintiff can get for winning a lawsuit, another Bush issue this year, just 12 percent saw a crisis.

Still, the president has just begun campaigning on these issues. It will be awhile before we know whether he can convince the voters these are crises demanding action now, or whether they decide he's just hollered, "Wolf!" too often.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Surviving the tsunami was only the first step for thousands of children in Southern Asia. Political roadblocks are stopping many who want to help those orphans. Coming up, the effort to prevent those children from becoming victims again.

(COMMERCIAL BREAK)

WOODRUFF: The tsunami in Southern Asia destroyed many of the families in its path, leaving an estimated 40,000 orphans. Adoption has been an option to help children from that part of the world.

Joe Johns looks at an effort to put that option to work for this latest group of orphans.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): In the up and down world of international adoptions, 17-month-old Mali is a success story.

UNIDENTIFIED FEMALE: Where's Mali? There she is! JOHNS: With loving parents and a nice home in Virginia, she's one of 72 children from Thailand adopted in the U.S. last year. But after the tsunami struck, the same patchwork system that brought her here is putting on the brakes.

Agencies are overwhelmed with inquiries about adopting children from the disaster, and Molly's new mom, like virtually everyone else who understands the uncertainties of international adoption, embraces the go-slow approach.

NINA SIEBENS, MALI'S ADOPTIVE MOTHER: Not moving too quickly and being able to find relatives, if possible, for these kids would be very, very important. And I think if people move too quickly, then perhaps that would be something that would not be in the best interest of the child.

JOHNS: Echoing those sentiments these days is Democratic senator Mary Landrieu, whose concern about adoption also comes from the heart.

LANDRIEU: These are my two children, our two, my husband and I. These are our two children. And they've been adopted into this huge, loving, wonderful family.

JOHNS: The mother of two adopted kids herself, Landrieu just went on a congressional trip to Sri Lanka, where she focused on the tsunami orphans.

Now that she's back, Landrieu is pressuring the State Department to implement a treaty to standardize international adoption practices. A treaty she says could help protect children orphaned in such disasters or otherwise from exploitation and mistreatment, including sexual abuse and forced labor.

LANDRIEU: It needs to be implemented immediately. We need to focus the resources on it. The world is looking to see what the United States is doing so that they -- we can be the incredible in our efforts to get other countries to implement it and to stop building orphanages and start building families.

JOHNS: The Treaty on International Adoption was passed by the Senate four years ago, but it doesn't go into effect until the State Department finalizes guidelines for it.

What's the hold up? Landrieu says the department had other priorities, including wars and terrorism. More recently, the department says, the adoption community has weighed in with so many suggestions on the guidelines that it slowed down the process.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: We have received subsequently something like 1,800 individual comments on those rules from a variety of different organizations and state licensing authorities.

(END VIDEOTAPE)

JOHNS: Landrieu is not the only person on Capitol Hill asking questions about the tsunami orphans. House Majority Leader Tom DeLay is expected to start asking some questions of his own when Congress returns next week -- Judy.

WOODRUFF: So Joe, is what the sense in terms of how long in a crisis situation like this, these families that are broken up, the communities, need to determine whether there are relatives or others that might take these children in before they're available for adoption?

JOHNS: Well, a lot of people have suggested it could take quite a long time because, as you know, families are dispersed in different places, and it's very difficult in a chaotic situation like that to try to figure out where an uncle or an aunt or whatever might be.

That is something we're told the governments are simply going to have to work out on their own. Sometime well after that, we're told, the United States government and other governments can start considering whether to move into the international adoption realm, Judy.

WOODRUFF: And we'll be watching that treaty to see whether it does get the go ahead from the United States. Joe, thank you very much.

Well, they lost across the board in the November elections, but a senior Democrat, still optimistic.

(BEGIN VIDEO CLIP)

KENNEDY: We have to look at this as an opportunity to be taken and to be grasped and seized on and dealt with.

(END VIDEO CLIP)

WOODRUFF: Coming up, my conversation with Senator Edward Kennedy about the future of the Democratic Party.

Plus, it looks like President Bush may be tightening the nation's belt, but will his leaner budget be meaner, as well? We'll talk with two veteran political advisors about the possible budget cuts.

(COMMERCIAL BREAK)

WOODRUFF: It's that time of day, and as the markets get set to close on Wall Street, I'm joined by Lou Dobbs in New York with "The Dobbs Report." Hello, again, Lou.

LOU DOBBS, CNN ANCHOR: All right, Judy. A last minute but broad-based rally occurring on Wall Street today. Stocks have been little changed for most of the session. The final trades are now being counted and the Dow has gained just about 66 points. The Nasdaq is two-thirds of a percent higher on the day. Intel shares are moving higher, and that's helping lift the Dow. Intel said it's fourth quarter sales rose to a record high. That was better than expected.

And our nation's trade deficit hit another all-time record high. The deficit between imports and exports widened to sixty billion dollars in the month of November. The Commerce Department reporting Americans depended more on imported oil and consumer goods than ever before, while sales of American goods and services abroad fell for the first time in five months. As usual, the nation's largest deficit is with China. Just yesterday, a report from the Economic Policy Institute said the United States lost nearly one and a half billion jobs in 14 years because of higher imports from China.

Microsoft today is warning Windows users about major flaws in that system's security, which could allow attackers to take control of your computer. Microsoft is advising users of all versions of Windows, dating back to 1998, to get up to three security updates, even if they downloaded the company's massive fix for Windows XP last summer. The security fixes are available on Microsoft's Web site as part of its monthly security update.

And tonight here on CNN, coming up at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," we continue our SPECIAL REPORT, "Overmedicated Nation." Tonight we take a look at the pharmaceutical industry's image problem. High drug prices, dangerous drugs and the fight against cheaper imports have given the industry a bad name. Critics say the industry has only itself to blame.

(BEGIN VIDEO CLIP)

FRAN HAWTHORNE, AUTHOR, "THE MERCK DRUGGERNAUT": It is amazing that the industry that, you know, strives to find cures for cancer is so hated. And they've really done it themselves. It's completely their fault.

(END VIDEO CLIP)

DOBBS: Also tonight, a desperate search to find more survivors in the California mudslide two days after the beachfront village of La Conchita was destroyed. We'll have a live report from the region.

Also we'll focus on Social Security reform. The Bush administration wants to reform Social Security but is the system broken or is it actually the government? I'll be talking with former Commerce Secretary Pete Peterson.

And the National Guard is struggling to attract new recruits, with recent enlistments falling far short of targets. The Guard is trying now to reinvent itself. My guest tonight is the man running the National Guard, Lieutenant-General Steven Blum, the head of the National Guard. All of that and more coming up tonight 6:00 p.m. Eastern right here on CNN. Please join us.

Now back to Judy Woodruff -- Judy.

WOODRUFF: Lou, you mentioned the trade deficit hitting another record. This is the story it seems month after month. Is this something that is spiralling out of control? And if so, is there something that could be done to reverse it?

DOBBS: As you know, Judy, on our broadcast, we've been focusing on just the absolute wrong-headed trade policies that have been pursued by this administration and the previous administration through two terms. It is time for people to really come to grips with the simple fact: so-called free trade isn't free and it sure isn't working.

We're going to have a trade deficit this year of excess of $600 billion, over six percent of our GDP. We're nearing a real, crisis juncture in terms of policy and the practice that's being followed. Jobs are being lost, we're a nation rising into higher and higher mountains of debt and we can't afford to sustain this level of both debt and trade deficits.

WOODRUFF: Well, it's a story that deserves more focus all the way around.

DOBBS: We'll do that tonight.

WOODRUFF: We'll be watching. Lou, 6:00, thank you.

DOBBS: Thanks, Judy.

WOODRUFF: INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: A fruitless search officially ends. Do Americans care about the failure to find weapons of mass destruction in Iraq or have they moved on?

A liberal icon preaches the value of talking about the Democrat's values.

SEN. EDWARD KENNEDY (D), MASSACHUSSETS: We cannot move our party or our nation forward under the pale colors and timid voices.

ANNOUNCER: Senator Edward Kennedy talks with Judy about his vision for his party. Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. When the Bush administration confirmed today that the search for weapons of mass destruction in Iraq had ended quietly and unsuccessfully, it may have felt like a jab in an open wound for folks in the White House. But the revelation may not be registering all that much with the American people, as our senior political analyst Bill Schneider explains.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): It's official, the United States has given up the search for weapons of mass destruction in Iraq. So what? So what? The existence of those weapons was central to President Bush's case for war.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That the Iraq regime continues to possess and conceal some of the most lethal weapons ever devised.

SCHNEIDER: But once Saddam Hussein was ousted, finding weapons of mass destruction didn't seem to matter to the public anymore. Nearly 80 percent of Americans said the war was still justified. Americans don't like to quarrel with success. At that time, the war looked like a brilliant success. Remember, mission accomplished? In January 2004, the former chief weapons inspector told Congress...

DAVID KAY, FMR. CHIEF WEAPONS INSPECTOR: The intelligence service believed that there were WMD. It turns out we were all wrong.

SCHNEIDER: The public was still not impressed. Less than two months after Saddam's capture, most Americans continued to say it doesn't matter. Last October, the man who headed the weapons search made this statement.

CHARLES DUELFER, SPECIAL ADVISER ON IRAQI WMD: It is clear that Saddam chose not to have weapons at a point in time before the war.

SCHNEIDER: Five days later, President Bush modified his language.

BUSH: Saddam Hussein retained the intent and the capability to rebuild his weapons programs.

SCHNEIDER: The news that the search has been abandoned is being treated like a footnote.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Nothing's changed in terms of his views when it comes to Iraq.

SCHNEIDER: Nevertheless, Bush's Iraq problem is becoming more serious. The number of Americans who say the war was a mistake is growing, from 27 percent a few months after the fall of Baghdad to 42 percent a year ago to 44 percent just before the election last fall. Now, half of all Americans say the war was a mistake.

What's changed? The American death toll in Iraq keeps rising, with no end in sight.

(END VIDEOTAPE)

SCHNEIDER: Americans don't like to quarrel with success. What's changed is that U.S. policy in Iraq no longer looks like a success.

WOODRUFF: All right. Bill Schneider, thank you very much. We appreciate it.

Well, Senator Edward Kennedy took aim again today at the president's handling of Iraq, saying the Bush administration has bogged down America in what he called an endless quagmire. But his speech to the National Press Club was mostly about the future of the Democratic party. Borrowing from Martin Luther King, Kennedy said that Democrats can accept finite disappointment, but they can never give up infinite hope.

I asked Kennedy what he meant by that during an interview about his vision for the party.

(BEGIN VIDEOTAPE)

KENNEDY: This was a tough election, very, very close. I was proud of the campaign that John Kerry waged, but President Bush did better. Now I think we're facing a new administration, new Congress, new Senate. We have a president that basically is not going to run again. I think the opportunities to make meaningful progress in the Congress are at the highest point now in the first year of this administration.

And then finally, I think we are facing this globalization that is increasingly impacting the quality of life of Americans. We have to look at this as an opportunity to be taken and to be grasped and seized on and dealt with, or we're going to be run out of town in terms of the race to the bottom, in terms of wages, in terms of jobs, in terms of working conditions for working families in the middle class.

WOODRUFF: You also talk about how, yes, it's the right thing for Democrats to look in themselves and think about what they can do differently. But you say Democrats should never give up on their fundamental values and yet, wasn't that exactly what voters rejected in this election?

KENNEDY: No, absolutely not. There's a -- basically, if the Republicans want the debate on values, I think Democrats win. I think their appeal, Republicans, have been too negative forces and a cynical appeals in the utilization of those values. I think the Democratic party are basically the party that believes in fairness and opportunity and respect.

I mean, I don't see -- Democrats' value work. We believe that men and women that are going to work hard, play by the rules, should not have to live in poverty, not provide for their children and not be able to get ahead...

WOODRUFF: But with all due respect...

KENNEDY: Meanwhile we lavish these excessive benefits on the wealthiest individuals. That's a value. I welcome the debate.

WOODRUFF: With all due respect, though, Senator, if that's what Democrats believe, why didn't voters embrace those values?

KENNEDY: Well, it's...

WOODRUFF: They didn't.

KENNEDY: There's no question that this was a close election, a handful of votes, a difference in Ohio would have decided the presidency. And there were three very extremely close races for the United States Senate. It was a very close race. You have to give -- congratulate the president. Nonetheless, we have to look at whether -- which party is going to have the agenda for the future. And what we have seen on the one hand is the appeal to the negative forces, we are going to appeal to the hopeful side which we -- that has been our tradition. The tradition of the Democratic party has been the progressive vision of opportunities, so people can move ahead, it's been based upon respect, and I think we have the opportunity to make real progress now.

WOODRUFF: But you don't think the voters turned away from that?

KENNEDY: No, I think we represent the overwhelming majority of middle income working families that are concerned about their jobs, concerned about the quality of education, concerned about the cost of healthcare. Look, we can look back on this past election and you can find a lot of different reasons, was it the field operation in Ohio? Was it the fact that they didn't speak on certain issues earlier. They didn't emphasize the economy, all of those. Those are wide open issues for pundits to speculate on. That isn't what Democrats are really looking for. You can learn from history but we are looking towards the future.

(END VIDEOTAPE)

WOODRUFF: And as Democrats move forward should they be tougher on the president's judicial and cabinet nominees? That question for Senator Kennedy ahead.

Plus the WMD fall-out for President Bush. We'll get dueling takes from veterans of Democratic and Republican politics.

Before we go to break, new pictures from just north of Overton, Nevada, of a train derailment apparently caused by high waters from those massive western storms. These pictures are from our affiliate KVBC. No word yet on injuries.

If you have been wondering what is going on with the world's weather from mudslides to tsunamis, be sure to watch a special edition of "NEWSNIGHT" on extreme weather. That's tonight at 10:00 Eastern. We'll be back in a minute.

(COMMERCIAL BREAK)

WOODRUFF: As we heard before the break Democratic Senator Edward Kennedy is speaking out about his party's future. In the second part of my interview with the Massachusetts Democrat, I started by asking him whether Democrats are being tough enough on President Bush's nominees?

(BEGIN VIDEOTAPE)

KENNEDY: No, I think there's obviously a general disposition to permit the president to have his own advisers. There's a different standard for the cabinet that there are for judges, for example, and a different standard for judges as there are for the Supreme Court justices. But I think Mr. Gonzales before the judiciary committee, I think there are a lot of question still left very much unanswered. I'm not sure that he really satisfied many of the questions about his role on torture. We're talking about the torture amendments and who in the administration permitted the kind of torture that we saw at Abu Ghraib and that we're finding out through the FBI and through other reports torture that took place in Guantanamo and other places. And Mr. Gonzales was right in the -- the position to know about this and he was not forthcoming before the judiciary committee. There's going to be follow-up questions. And we have a new nominee for homeland security that has gone through the judiciary committee, this is a different challenge. We'll wait and see. On the other hand, Margaret Spellings who was selected by the president to head the education department I think is clearly qualified. She doesn't always say yes but she doesn't always say no. She has her presence here and education is a key issue. I want to work with her. I think Democrats want to work with her, as well.

WOODRUFF: The chairman of the Democratic National Committee. How much does that position matter and if someone is pro-life, anti- abortion rights as Tim Roemer should have disqualify?

KENNEDY: I don't think we should have a litmus test. What that role is is basically establishing the organization, helping develop the resource lists. To have a successful campaign you have to have a candidate, you have to have resources in the organization. The Democratic National Committee ought to work on the organization, help establish the resources, the outreach, and we'll have -- the message will be from the elected leaders, from the Congress and the Senate. We have some able, gifted people, they will do the job. I think we have good candidates. They all come from different backgrounds but we'll have a good chairman or a national committee.

(END VIDEOTAPE)

WOODRUFF: Senator Edward Kennedy. I talked with him earlier today.

Nearly two years after the start of the war in Iraq the search for weapons of mass destruction has officially ended. When we return, Jack Valenti and Ed Rollins join me to talk about this new development and its political implications.

(COMMERCIAL BREAK)

WOODRUFF: As we reported earlier, the physical search for weapons of mass destruction in Iraq has ended. With me now to talk about that and some other issues of the day Jack Valenti, a former aide to president Lyndon Johnson. He's in Los Angeles. And in New York, Republican strategist Ed Rollins. Gentlemen, good to see both of you.

Jack Valenti, to you first, this acknowledgement coming two years -- more than two years after the administration used the weapons of mass destruction as the principal rationale for going into Iraq. Are the American people owed an explanation if not an apology?

JACK VALENTI, FMR. AIDE TO PRESIDENT JOHNSON: I think this was all decided in the November election. I think most Americans knew there were no weapons of mass destruction. This confession now that sort of a final blow I think is irrelevant. The fact that the election took place and most Americans, at least 50.1 percent of them, believed that they would go with President Bush regardless of whether there were weapons of mass destruction.

WOODRUFF: So, Ed Rollins, this is the end of it, nobody cares?

ED ROLLINS, GOP STRATEGIST: I think people care. I think as Jack said, I think we have to move on now. The critical thing is the elections at the end of this month and the key thing for us is to make sure that this action that we have taken, is not going to end up in a civil war there that ends up being far more significant as a threat to us and equally to the people of Iraq. So we have to make sure that we stay there long enough to make sure they can put up a government and function effectively.

VALENTI: Judy, I think the key issue now is not WMD, the key issue is the confusion whose end is not in sight. That's why these elections are so important to get them on and even if there are pockets of Iraq today that won't be involved in this election for their own particular reasons elections have to go forward. Otherwise, if you keep postponing, when do you stop? When is it going to be safe enough to have elections? That's why I think January 30 is a key time.

WOODRUFF: Well, you even have Republicans, you even have senior adviser to the U.S.-led coalition, Ed Rollins, asking whether this is in the words of one self defeating obstinacy on the part of the administration to stick to this deadline. Are there problems -- looming problems for this president right around the corner here?

ROLLINS: There's nothing but big agenda items ahead. Certainly in Iraq the public is not as much behind it as it had been at one point in time. I think they want the president to succeed. Certainly we made a very big investment in manpower and troops and certainly in resources that we've got to do everything to make sure it succeeds. I agree with Jack that I think it's important. We now have an appointed government there. It's very important that the Iraqis feel an ownership of their new government. Having an election certainly will help that. I think there's a long hard way to go. But we can't back away at this point in time, otherwise the insurgents will have won.

WOODRUFF: Jack, what's the standard for the day or week after this election? What needs to happen?

VALENTI: Well, there needs to be an Iraqi government in control even though there are fragments of Iraq maybe in Baghdad and Mosul and some of the -- Tikrit and other places where the Sunnis are in large numbers, where there may not be a kind of district or representative group but that's the beginning, I think, that can be handled. The only way the Americans are going to be able to disengage is to have Iraqis in charge of their own governmental destiny. Without that, we're conquerors in an alien land. People don't like that.

WOODRUFF: Is that the standard for you, Ed Rollins? ROLLINS: I think very much so. I think the critical thing is obviously the Sunnis are never going to be happy because they are not going to have as much power as they had under Saddam. They have to be involved in the process. We have to get some kind of peaceful coalition put together here. We have to basically create troops and create police forces that can put the peace in day in and day out. It has to be their government. They have to feel an ownership of it. At this point in time I'm not sure they do.

WOODRUFF: Jack Valenti, let me turn you back here to home and ask you about the coming budget cuts, cutbacks that we hear are going to be made by the Bush administration. We're seeing reports that the president is going to be proposing cutbacks in domestic programs ranging from housing to health and science, research, veterans programs, farm subsidies. Are these things that the Democrats are going to go along with? Are they going to fight?

VALENTI: I think you'll find it on both sides. It's very easy to write down fiscal arithmetic on a piece of paper because paper offers little resistance. Making those numbers come alive, that's the rub. There's so many needs of the American public now that at a time when we are having these deficits and I know it does not sound well and not received well in certain quarters of the government, today, but I think if you took that 1 percent wealthiest people in this country and didn't make these tax cuts that they get permanent, you'd save an enormous amount of money right there. You can't go on with half a trillion dollar deficit, a trade deficit, which eat away at the vitals of this country. You just can't do it.

WOODRUFF: Ed Rollins, there's no chance in the world the president is going to back down on his tax cuts is there?

ROLLINS: The president is not going to back down. Equally as important the Republicans have made a commitment both from the House and Senate that they are going to make cuts. The new chairman of the appropriations committee in the House, Jerry Lewis, one of the key things for him to get that chairmanship was that he had to promise the leadership that he would make some tough cuts. Nothing but tough decisions ahead. I do think the Republicans are unified on those issues and I think we move forward on those issues.

VALENTI: I think, Judy, that the decisions in front of the president remind me of Woody Allen's old cliche, if you take the left fork in the road it leads to despair, disappointment and absolute oblivion. If you take the right fork it means total extinction. May we be wise enough to make the right choice. That's I think somewhat the undesirable choices the president has right now.

WOODRUFF: So that's the choice?

ROLLINS: You know, I think to a certain extent we have to reset some priorities. The defense department made some very appropriate decisions to cut back on some of the big weapon systems they wanted to be able to fund, what they have today shifting stuff from the Navy to the army. So I think every place is going to have to make some tough choices. Obviously these kinds of deficits, that's what we're up against.

WOODRUFF: We'll leave it there. Thank you both. Ed Rollins. Jack Valenti. We appreciate it.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: We're out of time for this edition of INSIDE POLITICS. Thank you for joining us. I'm Judy Woodruff. "CROSSFIRE" starts right now.

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Aired January 12, 2005 - 15:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: Iraq flashpoints. As election day gets closer, are hopes for a free, fair and safe vote getting bleaker?

Dr. Dean's prescription for the Democratic Party.

HOWARD DEAN, DNC CHAIR CANDIDATE: We're about 20 years behind the Republicans in terms of organization, in terms of message.

ANNOUNCER: The now official candidate for DNC chair talks about his campaign platform.

An uphill battle to help tsunami orphans. U.S. lawmakers promote protections and adoptions.

SEN. MARY LANDRIEU (D), LOUISIANA: Stop building orphanages and start building families.

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

(END VIDEOTAPE)

JUDY WOODRUFF, HOST: Thank you for joining us.

We begin with Iraq, and new word that the physical hunt for weapons of mass destruction ended in recent weeks. To some, that may be like stating the obvious, but to others, it is a reminder that one of President Bush's early justifications for the war has been discredited.

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

Hi, Elaine.

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

That's right. The president's spokesman says that the White House is no longer holding open the possibility that there might still be weapons of mass destruction in Iraq. White House spokesman Scott McClellan saying earlier today it was his understanding that physical search for WMDs in Iraq is over. Now that conclusion comes almost two years after the U.S.-led invasion of Iraq. In making its case, the Bush administration had pointed to what it said was intelligence that indicated Saddam Hussein was pursuing weapons of mass destruction programs and likely had stockpiles hidden away.

But no stockpiles were found, and a U.S. intelligence official says the man who led the search, Charles Duelfer, is back in the U.S. and working on his final report.

Well, today, Scott McClellan said the president has already addressed this issue.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: What he said back in October, that the comprehensive report by Charles Duelfer concluded what his predecessor had said, as well, that the weapons that we all believed were there based on the intelligence, were not there.

And now what is important is that we need to go back and look at what was wrong with much of the intelligence that we had accumulated over a 12-year period and that our allies had accumulated over that same period of time and correct any flaws.

(END VIDEO CLIP)

QUIJANO: Now to do that, the president appointed an independent commission to figure out what went wrong with Iraq intelligence. That commission's work continues.

At the same time, McClellan also said that, based on what the U.S. knows now, the president would have taken the same action because in McClellan's words, quote, "This is about protecting the American people" -- Judy.

WOODRUFF: Elaine, we know, too, in connection with what you're talking about, that something like 44 political parties and organizations have announced they're pulling out of the elections because they're concerned about fairness, they're concerned about security.

What's the White House saying about that?

QUIJANO: Well, White House officials say that they want to make sure that there is the broadest participation possible in the Iraq elections. Officials, though, acknowledging that the elections will not be perfect, but also saying, of course, the security concerns that do exist are being addressed by the multinational forces that are in place there -- Judy.

WOODRUFF: All right. Elaine Quijano at White House. Elaine, thank you very much.

We'll have more on the formal end of the WMD search later on INSIDE POLITICS. Our Bill Schneider considers whether it matters to the American people.

In California today, the death toll from a massive mudslide rose to 10. Governor Arnold Schwarzenegger toured the scene in La Conchita from the air and on the ground.

Rescuers have been using shovels fiber optic cameras and their bare hands to search for missing people in the mud, sand and debris.

Schwarzenegger says the state will do everything it can to make the area safe again.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: In the past few days, we have seen the power of nature cause damage and despair, but we will match that power with our own resolve and we will come together as Californians and as neighbors.

(END VIDEO CLIP)

WOODRUFF: For more on the California mudslide, tune in tonight to CNN's "PAULA ZAHN NOW" at 8 Eastern.

And if you've been wondering what's going on with the world's weather, from mudslides to tsunamis, be sure to watch a special edition of "NEWSNIGHT" on extreme weather. That's tonight at 10 Eastern.

Turning to today's "Political Bytes," Democratic Christine Gregoire was sworn in as Washington state governor a short time ago, a day after state lawmakers certified her 129-vote victory. But Republicans still are challenging the election in court and demanding a revote. The first hearing in the case is scheduled for Friday.

Two San Mateo Democrats are urging President Bush to remove journalist Armstrong Williams from the president's Commission on White House Fellowship. We learned this week that the Bush administration paid Williams to promote the president's education reform plan.

Senate Minority Leader Harry Reid and Senator Frank Lautenberg say that Williams should not be affiliated with the White House in any way while the legality of that payment is being investigated.

Former Kerry campaign senior advisor Bob Shrum appears to be starting a new chapter of his career. Shrum tells me that he's selling his interest in his consulting firm and is moving with his wife from Washington to New York. He says he will teach at New York University this fall, and he may do some writing and some commentary, as well.

Well, Democrat Howard Dean is moving beyond the '04 election in a different way. After weeks of testing the waters, Dean formally announced his bid to be the new party chairman yesterday.

The former Vermont governor and 2004 presidential candidate joins us now on INSIDE POLITICS. Welcome, Governor. Good to see you again.

DEAN: Thanks. Good to be back on.

WOODRUFF: All right. Not to put too fine a point on it, but if the Democrats didn't want you to be their nominee, why should they want you to be their party chair?

DEAN: Well, we brought enormous energy to the Democratic Party and enormous numbers of new people and an enormous numbers -- amount of money. Those are all things that are very important for the Democratic National Committee.

Look, we're in the best shape we've ever been in. Terry McAuliffe has left us with the first surplus I've ever seen after a Democratic presidential campaign, but there are things that we haven't done because we haven't had the money.

And those include supporting state parties so we can have grassroots four-year campaigns instead of seven-month campaigns, and those include targeting lower offices like secretary of state.

I've been appalled by the conduct of some, although the Washington secretary of state is the great exception to this, but I've been appalled by the conduct of Republican secretaries of state, particularly in Florida and Ohio in the last couple election cycles where they actually participate in suppressing voter turnout and making sure, for example, that there are three voting machines in a precinct which is heavily Democratic, 10 voting machines in the one that's Republicans.

We need to pay attention to county clerks, secretaries of state, state legislatures who reapportion, and we're not paying attention to that now, because we haven't had the grass roots four-year cycle money to do that. And we will.

WOODRUFF: So you want to have a local focus.

You know the rap on Howard Dean is that, at a time when the party should be centrist, if anything, a time when the party has been walloped by the Republicans two times in a row, the last thing it needs is a visible liberal like Howard Dean to be its chair.

DEAN: Well, first of all I don't thing anything the matter with the word "liberal." We ought to get that straight right away.

Having said that I am a centrist. I'm in the center of where most of America is. I balance budgets. We haven't seen a balanced budget from a Republican, particularly in this administration, for a long time.

I speak my mind, and that is what I think Democrats have to do to win. I don't think Democrats need to jump around in the political spectrum to win. What we have to have is a clear message that stands for our values. Our values are more in tune with the values of the American people in general than the Republican values are. They focus on things like gay rights and abortion. We need to focus on things that most Americans care about: helping the least among us, strengthening education, health insurance, which is an enormous problem for most middle class Americans. That's how you win elections.

WOODRUFF: At the same time, Governor, what's to stop the Republicans from, if you're elected party chair, pointing at you and saying, "Here's somebody who's out of the mainstream, unrepresentative of what the great middle of this country wants?"

I mean, there were reports during the campaign that they were salivating at the idea of your being the nominee of the party. Why wouldn't they salivate at the idea of your being the head of the party?

DEAN: Well, when they publicly salivate you always wonder what they always think -- what they think privately.

The truth is that only way to take on the Republicans is straight ahead and fight them and not become one of the Republicans. If we become -- Ted Kennedy said this today in one of the great speeches I think we've had for a long time. It is not the way to beat the Republican Party by becoming Republican.

Harry Truman said that if you run a Republican against a Democrat who acts like a Republican, then the real Republican wins every time.

And let's look at Newt Gingrich for a model. How did he get rid of us? He stood up and made a distinct difference between the Republican Party and the Democratic Party after years of Republicans trying to pretend like they were Democrats.

It doesn't work to mimic the other party. Our values and the American people's values, we need to be proud of our values.

WOODRUFF: It's been reported that some conservative Democrats have let it be known they're ready to leave the party if you're elected chair. Have you heard this?

DEAN: Well, I haven't -- no, I haven't heard that. That sounds like Washington gossip to me, but I'd be happy to take a look at those reports if you let me see them.

WOODRUFF: Well, let me -- let me quote somebody you know well, and that is your former campaign manager, Joe Trippi. As I'm sure you know, he's weighed in for someone else, Simon Rosenberg of the New Democratic Network.

But Joe Trippi says of you, Howard Dean, he says, "We are muting one of the most progressive voices in the party, when we ought to be taking somebody who knows how to make the apparatus work, which Howard was not really that interested in."

DEAN: I'm not going to -- I'm not going to go after Joe Trippi. I have been very good about that.

Our campaign didn't work. There were plenty of reasons why it didn't work, and to get into all that stuff doesn't make sense.

This is not about Joe Trippi. The election is about the future of Democrats and the future of democracy. I know how to make grassroots work. We brought hundreds of thousands of people into this party, many of whom were not Democrats. We need those people in order to win.

We also need to concentrate on our base. Frankly I don't think we can go to the African-American community and say, "Gee, with three weeks to go, could you please get your vote out?"

We need to honor our base: labor, women, Latinos, African- Americans, people of color. And particularly, we need to increase our turn out with white working men. We can do that. The labor unions are the key to that. We just have to honor our base and our beliefs.

WOODRUFF: Two quick things. Bill Clinton, it's been reported, was out trying to recruit Wesley Clark to run for party chair. Do you have an endorsement either from Bill Clinton or John Kerry? Where does that stand?

DEAN: Well, you know, it would be ill served if I -- if I tried to respond to every Washington rumor that there was. I'm not going to respond to that one.

I have spoken to the president about this. I have spoken to Senator Clinton about this on number of occasions. I've spoken to John Kerry about this. You know, I believe I'm in pretty good terms with all the potential candidates for '08, which I am not, if I end up in this job.

But it's my job not to align myself with any particular candidate. It's my job to try to make sure that the party wins, whoever the nominee is. And we need to take back this party from the borrow and spend philosophy of George W. Bush.

WOODRUFF: Finally, hard for you to give up your dream of being president, which you said you will give up?

DEAN: Look, I want -- more important than my being president is bringing this country back into the mainstream course, which set us in such good stead for so many years.

We've lost our respect abroad. The president, as we just -- as you talked earlier, misled us by guiding us into Iraq, and now more than 1,300 brave Americans are dead.

We have -- are running up the largest deficit in the history of the state -- country and now he wants to borrow another $2 trillion so he can take away benefits from Social Security for old people.

This is not a country that's in good hands. We need to put it in good hands. So it's not so important for me to be the next president. It's important for somebody in the -- who has compassion for ordinary people, and that's a Democrat, to be the next president of the United States.

WOODRUFF: Governor Howard Dean, we'll be watching your candidacy, this one's for party chair.

DEAN: Thank you.

WOODRUFF: Thanks very much.

DEAN: Thanks very much.

WOODRUFF: We appreciate it.

Well, as the Bush administration tells it, the Social Security system is in crisis. How much does the president rely on the "c" word when he wants political action?

Plus the plight of tsunami orphans. It is an issue especially close to the heart of some members of Congress.

And later, an interview with Senator Edward Kennedy. We were just talking about him. He's urging his party to promote values while warning against becoming Republican clones.

(COMMERCIAL BREAK)

WOODRUFF: President Bush seems to be pushing his second term agenda with a sense of urgency. That crisis mode is especially true when he talks about his plan to overhaul Social Security.

Our Bruce Morton takes a closer look at this crisis approach and how it could play out for the president.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Critics say George W. Bush seems to have one strategy whenever he wants Congress to act on an issue. They say he proclaims it's a crisis and must act now.

Here he is this week urging action on Social Security.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want you to think about a Social Security system that will be flat bust, bankrupt, unless the United States Congress has got the willingness to act now.

MORTON: Act now: does it work? Sometimes.

Nine-eleven really was a crisis, of course, thousands of Americans killed. The president acted. The country approved going after al Qaeda, the attackers, in Afghanistan. Americans approved then and approve now of how Mr. Bush is handling terrorism.

Iraq was a crisis, Mr. Bush said. Saddam Hussein was a direct threat to the United States, had weapons that could hurt us.

But many argued Iraq wasn't a crisis in terms of America's safety. Saddam was a bad man, but now we know almost surely he didn't have those weapons of mass destruction.

Lately, columnists have been writing about what they say is the president's crisis approach to issues. Democratic Senator Edward Kennedy talked about it today.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We have an administration that falsely hypes almost every issue as a crisis. They did it on Iraq, and they are doing it now on Social Security. They exploit the politics of fear and division, while ours is a politics of hope and unity.

MORTON (on camera): How successful will be president be? Most experts say Social Security has problems but that they won't become acute for years yet.

In a recent CNN/"USA Today"/Gallup poll, just 18 percent of the sample thought the system faced a crisis. Over half said it had serious problems.

On tort reform, how much a plaintiff can get for winning a lawsuit, another Bush issue this year, just 12 percent saw a crisis.

Still, the president has just begun campaigning on these issues. It will be awhile before we know whether he can convince the voters these are crises demanding action now, or whether they decide he's just hollered, "Wolf!" too often.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Surviving the tsunami was only the first step for thousands of children in Southern Asia. Political roadblocks are stopping many who want to help those orphans. Coming up, the effort to prevent those children from becoming victims again.

(COMMERCIAL BREAK)

WOODRUFF: The tsunami in Southern Asia destroyed many of the families in its path, leaving an estimated 40,000 orphans. Adoption has been an option to help children from that part of the world.

Joe Johns looks at an effort to put that option to work for this latest group of orphans.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): In the up and down world of international adoptions, 17-month-old Mali is a success story.

UNIDENTIFIED FEMALE: Where's Mali? There she is! JOHNS: With loving parents and a nice home in Virginia, she's one of 72 children from Thailand adopted in the U.S. last year. But after the tsunami struck, the same patchwork system that brought her here is putting on the brakes.

Agencies are overwhelmed with inquiries about adopting children from the disaster, and Molly's new mom, like virtually everyone else who understands the uncertainties of international adoption, embraces the go-slow approach.

NINA SIEBENS, MALI'S ADOPTIVE MOTHER: Not moving too quickly and being able to find relatives, if possible, for these kids would be very, very important. And I think if people move too quickly, then perhaps that would be something that would not be in the best interest of the child.

JOHNS: Echoing those sentiments these days is Democratic senator Mary Landrieu, whose concern about adoption also comes from the heart.

LANDRIEU: These are my two children, our two, my husband and I. These are our two children. And they've been adopted into this huge, loving, wonderful family.

JOHNS: The mother of two adopted kids herself, Landrieu just went on a congressional trip to Sri Lanka, where she focused on the tsunami orphans.

Now that she's back, Landrieu is pressuring the State Department to implement a treaty to standardize international adoption practices. A treaty she says could help protect children orphaned in such disasters or otherwise from exploitation and mistreatment, including sexual abuse and forced labor.

LANDRIEU: It needs to be implemented immediately. We need to focus the resources on it. The world is looking to see what the United States is doing so that they -- we can be the incredible in our efforts to get other countries to implement it and to stop building orphanages and start building families.

JOHNS: The Treaty on International Adoption was passed by the Senate four years ago, but it doesn't go into effect until the State Department finalizes guidelines for it.

What's the hold up? Landrieu says the department had other priorities, including wars and terrorism. More recently, the department says, the adoption community has weighed in with so many suggestions on the guidelines that it slowed down the process.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: We have received subsequently something like 1,800 individual comments on those rules from a variety of different organizations and state licensing authorities.

(END VIDEOTAPE)

JOHNS: Landrieu is not the only person on Capitol Hill asking questions about the tsunami orphans. House Majority Leader Tom DeLay is expected to start asking some questions of his own when Congress returns next week -- Judy.

WOODRUFF: So Joe, is what the sense in terms of how long in a crisis situation like this, these families that are broken up, the communities, need to determine whether there are relatives or others that might take these children in before they're available for adoption?

JOHNS: Well, a lot of people have suggested it could take quite a long time because, as you know, families are dispersed in different places, and it's very difficult in a chaotic situation like that to try to figure out where an uncle or an aunt or whatever might be.

That is something we're told the governments are simply going to have to work out on their own. Sometime well after that, we're told, the United States government and other governments can start considering whether to move into the international adoption realm, Judy.

WOODRUFF: And we'll be watching that treaty to see whether it does get the go ahead from the United States. Joe, thank you very much.

Well, they lost across the board in the November elections, but a senior Democrat, still optimistic.

(BEGIN VIDEO CLIP)

KENNEDY: We have to look at this as an opportunity to be taken and to be grasped and seized on and dealt with.

(END VIDEO CLIP)

WOODRUFF: Coming up, my conversation with Senator Edward Kennedy about the future of the Democratic Party.

Plus, it looks like President Bush may be tightening the nation's belt, but will his leaner budget be meaner, as well? We'll talk with two veteran political advisors about the possible budget cuts.

(COMMERCIAL BREAK)

WOODRUFF: It's that time of day, and as the markets get set to close on Wall Street, I'm joined by Lou Dobbs in New York with "The Dobbs Report." Hello, again, Lou.

LOU DOBBS, CNN ANCHOR: All right, Judy. A last minute but broad-based rally occurring on Wall Street today. Stocks have been little changed for most of the session. The final trades are now being counted and the Dow has gained just about 66 points. The Nasdaq is two-thirds of a percent higher on the day. Intel shares are moving higher, and that's helping lift the Dow. Intel said it's fourth quarter sales rose to a record high. That was better than expected.

And our nation's trade deficit hit another all-time record high. The deficit between imports and exports widened to sixty billion dollars in the month of November. The Commerce Department reporting Americans depended more on imported oil and consumer goods than ever before, while sales of American goods and services abroad fell for the first time in five months. As usual, the nation's largest deficit is with China. Just yesterday, a report from the Economic Policy Institute said the United States lost nearly one and a half billion jobs in 14 years because of higher imports from China.

Microsoft today is warning Windows users about major flaws in that system's security, which could allow attackers to take control of your computer. Microsoft is advising users of all versions of Windows, dating back to 1998, to get up to three security updates, even if they downloaded the company's massive fix for Windows XP last summer. The security fixes are available on Microsoft's Web site as part of its monthly security update.

And tonight here on CNN, coming up at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," we continue our SPECIAL REPORT, "Overmedicated Nation." Tonight we take a look at the pharmaceutical industry's image problem. High drug prices, dangerous drugs and the fight against cheaper imports have given the industry a bad name. Critics say the industry has only itself to blame.

(BEGIN VIDEO CLIP)

FRAN HAWTHORNE, AUTHOR, "THE MERCK DRUGGERNAUT": It is amazing that the industry that, you know, strives to find cures for cancer is so hated. And they've really done it themselves. It's completely their fault.

(END VIDEO CLIP)

DOBBS: Also tonight, a desperate search to find more survivors in the California mudslide two days after the beachfront village of La Conchita was destroyed. We'll have a live report from the region.

Also we'll focus on Social Security reform. The Bush administration wants to reform Social Security but is the system broken or is it actually the government? I'll be talking with former Commerce Secretary Pete Peterson.

And the National Guard is struggling to attract new recruits, with recent enlistments falling far short of targets. The Guard is trying now to reinvent itself. My guest tonight is the man running the National Guard, Lieutenant-General Steven Blum, the head of the National Guard. All of that and more coming up tonight 6:00 p.m. Eastern right here on CNN. Please join us.

Now back to Judy Woodruff -- Judy.

WOODRUFF: Lou, you mentioned the trade deficit hitting another record. This is the story it seems month after month. Is this something that is spiralling out of control? And if so, is there something that could be done to reverse it?

DOBBS: As you know, Judy, on our broadcast, we've been focusing on just the absolute wrong-headed trade policies that have been pursued by this administration and the previous administration through two terms. It is time for people to really come to grips with the simple fact: so-called free trade isn't free and it sure isn't working.

We're going to have a trade deficit this year of excess of $600 billion, over six percent of our GDP. We're nearing a real, crisis juncture in terms of policy and the practice that's being followed. Jobs are being lost, we're a nation rising into higher and higher mountains of debt and we can't afford to sustain this level of both debt and trade deficits.

WOODRUFF: Well, it's a story that deserves more focus all the way around.

DOBBS: We'll do that tonight.

WOODRUFF: We'll be watching. Lou, 6:00, thank you.

DOBBS: Thanks, Judy.

WOODRUFF: INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: A fruitless search officially ends. Do Americans care about the failure to find weapons of mass destruction in Iraq or have they moved on?

A liberal icon preaches the value of talking about the Democrat's values.

SEN. EDWARD KENNEDY (D), MASSACHUSSETS: We cannot move our party or our nation forward under the pale colors and timid voices.

ANNOUNCER: Senator Edward Kennedy talks with Judy about his vision for his party. Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

(END VIDEOTAPE)

WOODRUFF: Welcome back. When the Bush administration confirmed today that the search for weapons of mass destruction in Iraq had ended quietly and unsuccessfully, it may have felt like a jab in an open wound for folks in the White House. But the revelation may not be registering all that much with the American people, as our senior political analyst Bill Schneider explains.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): It's official, the United States has given up the search for weapons of mass destruction in Iraq. So what? So what? The existence of those weapons was central to President Bush's case for war.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: That the Iraq regime continues to possess and conceal some of the most lethal weapons ever devised.

SCHNEIDER: But once Saddam Hussein was ousted, finding weapons of mass destruction didn't seem to matter to the public anymore. Nearly 80 percent of Americans said the war was still justified. Americans don't like to quarrel with success. At that time, the war looked like a brilliant success. Remember, mission accomplished? In January 2004, the former chief weapons inspector told Congress...

DAVID KAY, FMR. CHIEF WEAPONS INSPECTOR: The intelligence service believed that there were WMD. It turns out we were all wrong.

SCHNEIDER: The public was still not impressed. Less than two months after Saddam's capture, most Americans continued to say it doesn't matter. Last October, the man who headed the weapons search made this statement.

CHARLES DUELFER, SPECIAL ADVISER ON IRAQI WMD: It is clear that Saddam chose not to have weapons at a point in time before the war.

SCHNEIDER: Five days later, President Bush modified his language.

BUSH: Saddam Hussein retained the intent and the capability to rebuild his weapons programs.

SCHNEIDER: The news that the search has been abandoned is being treated like a footnote.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Nothing's changed in terms of his views when it comes to Iraq.

SCHNEIDER: Nevertheless, Bush's Iraq problem is becoming more serious. The number of Americans who say the war was a mistake is growing, from 27 percent a few months after the fall of Baghdad to 42 percent a year ago to 44 percent just before the election last fall. Now, half of all Americans say the war was a mistake.

What's changed? The American death toll in Iraq keeps rising, with no end in sight.

(END VIDEOTAPE)

SCHNEIDER: Americans don't like to quarrel with success. What's changed is that U.S. policy in Iraq no longer looks like a success.

WOODRUFF: All right. Bill Schneider, thank you very much. We appreciate it.

Well, Senator Edward Kennedy took aim again today at the president's handling of Iraq, saying the Bush administration has bogged down America in what he called an endless quagmire. But his speech to the National Press Club was mostly about the future of the Democratic party. Borrowing from Martin Luther King, Kennedy said that Democrats can accept finite disappointment, but they can never give up infinite hope.

I asked Kennedy what he meant by that during an interview about his vision for the party.

(BEGIN VIDEOTAPE)

KENNEDY: This was a tough election, very, very close. I was proud of the campaign that John Kerry waged, but President Bush did better. Now I think we're facing a new administration, new Congress, new Senate. We have a president that basically is not going to run again. I think the opportunities to make meaningful progress in the Congress are at the highest point now in the first year of this administration.

And then finally, I think we are facing this globalization that is increasingly impacting the quality of life of Americans. We have to look at this as an opportunity to be taken and to be grasped and seized on and dealt with, or we're going to be run out of town in terms of the race to the bottom, in terms of wages, in terms of jobs, in terms of working conditions for working families in the middle class.

WOODRUFF: You also talk about how, yes, it's the right thing for Democrats to look in themselves and think about what they can do differently. But you say Democrats should never give up on their fundamental values and yet, wasn't that exactly what voters rejected in this election?

KENNEDY: No, absolutely not. There's a -- basically, if the Republicans want the debate on values, I think Democrats win. I think their appeal, Republicans, have been too negative forces and a cynical appeals in the utilization of those values. I think the Democratic party are basically the party that believes in fairness and opportunity and respect.

I mean, I don't see -- Democrats' value work. We believe that men and women that are going to work hard, play by the rules, should not have to live in poverty, not provide for their children and not be able to get ahead...

WOODRUFF: But with all due respect...

KENNEDY: Meanwhile we lavish these excessive benefits on the wealthiest individuals. That's a value. I welcome the debate.

WOODRUFF: With all due respect, though, Senator, if that's what Democrats believe, why didn't voters embrace those values?

KENNEDY: Well, it's...

WOODRUFF: They didn't.

KENNEDY: There's no question that this was a close election, a handful of votes, a difference in Ohio would have decided the presidency. And there were three very extremely close races for the United States Senate. It was a very close race. You have to give -- congratulate the president. Nonetheless, we have to look at whether -- which party is going to have the agenda for the future. And what we have seen on the one hand is the appeal to the negative forces, we are going to appeal to the hopeful side which we -- that has been our tradition. The tradition of the Democratic party has been the progressive vision of opportunities, so people can move ahead, it's been based upon respect, and I think we have the opportunity to make real progress now.

WOODRUFF: But you don't think the voters turned away from that?

KENNEDY: No, I think we represent the overwhelming majority of middle income working families that are concerned about their jobs, concerned about the quality of education, concerned about the cost of healthcare. Look, we can look back on this past election and you can find a lot of different reasons, was it the field operation in Ohio? Was it the fact that they didn't speak on certain issues earlier. They didn't emphasize the economy, all of those. Those are wide open issues for pundits to speculate on. That isn't what Democrats are really looking for. You can learn from history but we are looking towards the future.

(END VIDEOTAPE)

WOODRUFF: And as Democrats move forward should they be tougher on the president's judicial and cabinet nominees? That question for Senator Kennedy ahead.

Plus the WMD fall-out for President Bush. We'll get dueling takes from veterans of Democratic and Republican politics.

Before we go to break, new pictures from just north of Overton, Nevada, of a train derailment apparently caused by high waters from those massive western storms. These pictures are from our affiliate KVBC. No word yet on injuries.

If you have been wondering what is going on with the world's weather from mudslides to tsunamis, be sure to watch a special edition of "NEWSNIGHT" on extreme weather. That's tonight at 10:00 Eastern. We'll be back in a minute.

(COMMERCIAL BREAK)

WOODRUFF: As we heard before the break Democratic Senator Edward Kennedy is speaking out about his party's future. In the second part of my interview with the Massachusetts Democrat, I started by asking him whether Democrats are being tough enough on President Bush's nominees?

(BEGIN VIDEOTAPE)

KENNEDY: No, I think there's obviously a general disposition to permit the president to have his own advisers. There's a different standard for the cabinet that there are for judges, for example, and a different standard for judges as there are for the Supreme Court justices. But I think Mr. Gonzales before the judiciary committee, I think there are a lot of question still left very much unanswered. I'm not sure that he really satisfied many of the questions about his role on torture. We're talking about the torture amendments and who in the administration permitted the kind of torture that we saw at Abu Ghraib and that we're finding out through the FBI and through other reports torture that took place in Guantanamo and other places. And Mr. Gonzales was right in the -- the position to know about this and he was not forthcoming before the judiciary committee. There's going to be follow-up questions. And we have a new nominee for homeland security that has gone through the judiciary committee, this is a different challenge. We'll wait and see. On the other hand, Margaret Spellings who was selected by the president to head the education department I think is clearly qualified. She doesn't always say yes but she doesn't always say no. She has her presence here and education is a key issue. I want to work with her. I think Democrats want to work with her, as well.

WOODRUFF: The chairman of the Democratic National Committee. How much does that position matter and if someone is pro-life, anti- abortion rights as Tim Roemer should have disqualify?

KENNEDY: I don't think we should have a litmus test. What that role is is basically establishing the organization, helping develop the resource lists. To have a successful campaign you have to have a candidate, you have to have resources in the organization. The Democratic National Committee ought to work on the organization, help establish the resources, the outreach, and we'll have -- the message will be from the elected leaders, from the Congress and the Senate. We have some able, gifted people, they will do the job. I think we have good candidates. They all come from different backgrounds but we'll have a good chairman or a national committee.

(END VIDEOTAPE)

WOODRUFF: Senator Edward Kennedy. I talked with him earlier today.

Nearly two years after the start of the war in Iraq the search for weapons of mass destruction has officially ended. When we return, Jack Valenti and Ed Rollins join me to talk about this new development and its political implications.

(COMMERCIAL BREAK)

WOODRUFF: As we reported earlier, the physical search for weapons of mass destruction in Iraq has ended. With me now to talk about that and some other issues of the day Jack Valenti, a former aide to president Lyndon Johnson. He's in Los Angeles. And in New York, Republican strategist Ed Rollins. Gentlemen, good to see both of you.

Jack Valenti, to you first, this acknowledgement coming two years -- more than two years after the administration used the weapons of mass destruction as the principal rationale for going into Iraq. Are the American people owed an explanation if not an apology?

JACK VALENTI, FMR. AIDE TO PRESIDENT JOHNSON: I think this was all decided in the November election. I think most Americans knew there were no weapons of mass destruction. This confession now that sort of a final blow I think is irrelevant. The fact that the election took place and most Americans, at least 50.1 percent of them, believed that they would go with President Bush regardless of whether there were weapons of mass destruction.

WOODRUFF: So, Ed Rollins, this is the end of it, nobody cares?

ED ROLLINS, GOP STRATEGIST: I think people care. I think as Jack said, I think we have to move on now. The critical thing is the elections at the end of this month and the key thing for us is to make sure that this action that we have taken, is not going to end up in a civil war there that ends up being far more significant as a threat to us and equally to the people of Iraq. So we have to make sure that we stay there long enough to make sure they can put up a government and function effectively.

VALENTI: Judy, I think the key issue now is not WMD, the key issue is the confusion whose end is not in sight. That's why these elections are so important to get them on and even if there are pockets of Iraq today that won't be involved in this election for their own particular reasons elections have to go forward. Otherwise, if you keep postponing, when do you stop? When is it going to be safe enough to have elections? That's why I think January 30 is a key time.

WOODRUFF: Well, you even have Republicans, you even have senior adviser to the U.S.-led coalition, Ed Rollins, asking whether this is in the words of one self defeating obstinacy on the part of the administration to stick to this deadline. Are there problems -- looming problems for this president right around the corner here?

ROLLINS: There's nothing but big agenda items ahead. Certainly in Iraq the public is not as much behind it as it had been at one point in time. I think they want the president to succeed. Certainly we made a very big investment in manpower and troops and certainly in resources that we've got to do everything to make sure it succeeds. I agree with Jack that I think it's important. We now have an appointed government there. It's very important that the Iraqis feel an ownership of their new government. Having an election certainly will help that. I think there's a long hard way to go. But we can't back away at this point in time, otherwise the insurgents will have won.

WOODRUFF: Jack, what's the standard for the day or week after this election? What needs to happen?

VALENTI: Well, there needs to be an Iraqi government in control even though there are fragments of Iraq maybe in Baghdad and Mosul and some of the -- Tikrit and other places where the Sunnis are in large numbers, where there may not be a kind of district or representative group but that's the beginning, I think, that can be handled. The only way the Americans are going to be able to disengage is to have Iraqis in charge of their own governmental destiny. Without that, we're conquerors in an alien land. People don't like that.

WOODRUFF: Is that the standard for you, Ed Rollins? ROLLINS: I think very much so. I think the critical thing is obviously the Sunnis are never going to be happy because they are not going to have as much power as they had under Saddam. They have to be involved in the process. We have to get some kind of peaceful coalition put together here. We have to basically create troops and create police forces that can put the peace in day in and day out. It has to be their government. They have to feel an ownership of it. At this point in time I'm not sure they do.

WOODRUFF: Jack Valenti, let me turn you back here to home and ask you about the coming budget cuts, cutbacks that we hear are going to be made by the Bush administration. We're seeing reports that the president is going to be proposing cutbacks in domestic programs ranging from housing to health and science, research, veterans programs, farm subsidies. Are these things that the Democrats are going to go along with? Are they going to fight?

VALENTI: I think you'll find it on both sides. It's very easy to write down fiscal arithmetic on a piece of paper because paper offers little resistance. Making those numbers come alive, that's the rub. There's so many needs of the American public now that at a time when we are having these deficits and I know it does not sound well and not received well in certain quarters of the government, today, but I think if you took that 1 percent wealthiest people in this country and didn't make these tax cuts that they get permanent, you'd save an enormous amount of money right there. You can't go on with half a trillion dollar deficit, a trade deficit, which eat away at the vitals of this country. You just can't do it.

WOODRUFF: Ed Rollins, there's no chance in the world the president is going to back down on his tax cuts is there?

ROLLINS: The president is not going to back down. Equally as important the Republicans have made a commitment both from the House and Senate that they are going to make cuts. The new chairman of the appropriations committee in the House, Jerry Lewis, one of the key things for him to get that chairmanship was that he had to promise the leadership that he would make some tough cuts. Nothing but tough decisions ahead. I do think the Republicans are unified on those issues and I think we move forward on those issues.

VALENTI: I think, Judy, that the decisions in front of the president remind me of Woody Allen's old cliche, if you take the left fork in the road it leads to despair, disappointment and absolute oblivion. If you take the right fork it means total extinction. May we be wise enough to make the right choice. That's I think somewhat the undesirable choices the president has right now.

WOODRUFF: So that's the choice?

ROLLINS: You know, I think to a certain extent we have to reset some priorities. The defense department made some very appropriate decisions to cut back on some of the big weapon systems they wanted to be able to fund, what they have today shifting stuff from the Navy to the army. So I think every place is going to have to make some tough choices. Obviously these kinds of deficits, that's what we're up against.

WOODRUFF: We'll leave it there. Thank you both. Ed Rollins. Jack Valenti. We appreciate it.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: We're out of time for this edition of INSIDE POLITICS. Thank you for joining us. I'm Judy Woodruff. "CROSSFIRE" starts right now.

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