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Inside Politics

U.S. remembering those who served and those who died, France's vote on a European constitution.

Aired May 30, 2005 - 16:00   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.


ANNOUNCER: Remembering those who served and those who died, from wars long past and from battles still being waged.
GEORGE W. BUSH, U.S. PRESIDENT (video clip): We must honor them by completing the mission for which they gave their lives.

ANNOUNCER: On this Memorial Day, thoughts of the war in Iraq. U.S. and Iraqi troops team up for a major mission but there's no letup in attacks by insurgents.

Did the French fry Europe? Will yesterday's vote strike a fatal blow to unifying the continent?

Bush in '08. No, not him and not him. But how about her?

LYNNE CHENEY, WIFE OF VICE PRESIDENT CHENEY (video clip): I think Mrs. Bush ought to run for president.

ANNOUNCER: Now live from the Marine Corps War Memorial in Arlington, Virginia, JUDY WOODRUFF'S INSIDE POLITICS.

JUDY WOODRUFF, CNN HOST: Thank you for joining us on this Memorial Day holiday. I'm reporting this afternoon from the Marine Corps War Memorial in Arlington, Virginia, just outside of Washington. This memorial is dedicated to all marines who have died in service to their country since 1775. President Bush traveled to nearby Arlington National Cemetery today for the annual wreath laying ceremony at the Tomb of the Unknowns. Afterwards he paid tribute to those who died while fighting for freedom saying their courage will never be forgotten. Mr. Bush also praised the men and women fighting in the nation's current military conflicts.

BUSH: Another generation is fighting a new war against an enemy that threatens the peace and stability of the world. Across the globe our military is standing directly between our people and the worst dangers in the world and Americans are grateful to have such brave defenders.

WOODRUFF: There are more examples today of the dangers facing U.S. troops in Iraq. An Iraqi military aircraft carrying four U.S. personnel and one Iraqi crashed in eastern Iraq. It is believed that everyone on board died in the crash.

Also today two suicide bombers attacked a crowd of Iraqi police officers in the city of Hillah south of Baghdad. Some 27 people were killed, 118 others injured. Meanwhile U.S. troops continue to provide support for Iraqi forces in what is being called Operation Lightning. The campaign involves the massive sweep of Baghdad neighborhoods designed to round up insurgents. The continued violence in Iraq has tested the resolve of many Americans, especially those whose loved ones are serving in the region. Our senior political analyst Bill Schneider has more on how events in Iraq are influencing public opinion.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN ANALYST, (voice-over): More than 1600 Americans have been killed in Iraq, 139 in the war two years ago. Even more since the January 30 elections in Iraq. Americans were encouraged by those elections.

BUSH: We will succeed because the Iraqi people value their own liberty as they showed the world last Sunday.

SCHNEIDER: Iraq was getting a new government. The end was in sight. But the news since January has been discouraging.

UNIDENTIFIED FEMALE: That makes at least eight bombings since Sunday and at least 46 deaths.

SCHNEIDER: Just after the elections in early February most Americans thought things were going well for the U.S. in Iraq. By early May the public's mood had soured, not just because of the losses as one analyst predicted before the war.

STEVE KULL, UNIVERSITY OF MARYLAND: The critical question in American's find is not whether there are body bags or not but whether the operation -- that the military operation in question makes sense to them, and whether they think it's succeeding or not.

SCHNEIDER: The military says it's succeeding.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: They keep going after what we in the military call the centers of gravity. They are not successful.

SCHNEIDER: Critics say there's no plan.

REP. STENY HOYER, (D) MD: They failed to articulate a successful strategy in Iraq.

SCHNEIDER: The president begs to differ.

BUSH: And our strategy is clear, we will train Iraqi forces so they can take the fight to the enemy and defend their own country.

SCHNEIDER: The public appears to be losing confidence in that strategy. In early February, Americans were split over President Bush's handling of Iraq. By late May, the public's assessment had turned negative. What seems to be affecting public opinion are local news reports which give the losses a face.

UNIDENTIFIED MALE: Gore was doing security work when the helicopter in which he was a passenger was shot down near Baghdad.

SCHNEIDER: And a family.

UNIDENTIFIED MALE: A message ...

(END VIDEOTAPE)

SCHNEIDER (on camera): Americans are willing to bear sacrifice as long as it's clear there's a purpose and a strategy. And that seemed clear when Iraqis voted in January. It's less clear now.

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

Among those who travel here to Washington for Memorial Day are members of the veteran's rights group Rolling Thunder. I spoke last Friday with the executive director of the motorcycle group Artie Muller and I started by asking him if this memorial day has a special meaning.

(BEGIN VIDEOTAPE)

ARTIE MULLER, EXECUTIVE DIRECTOR, ROLLING THUNDER: Well, I think every Memorial Day in this country should have a special meaning. There's a lot of men and women that gave their lives for our country so we can live the way we do. And a lot of people forget about that. And go out shopping, go to the beach and have a barbecue, they never really think about their freedom and how many have sacrificed their lives. Not only those that gave their lives but many have come back with limbs missing, PTSD or other wounds and problems from their military service.

WOODRUFF: And now we are engaged in another war in Iraq. As somebody who is a veteran of Vietnam, is the country paying enough attention to what is going on over there?

MULLER: They are paying attention and a lot of people are complaining about the troops that are dying. But you can't have a war and we actually have two wars going on, Iraqi Freedom and Afghanistan and between both of them we're going to lose some military troops. We lose military troops when we don't have a war in peace time because of accidents.

WOODRUFF: The latest polls are showing something like 57 percent -- more than half of Americans are stage war in Iraq was a mistake. Is this reminiscent of Vietnam for you in any way?

MULLER: I don't think those figures are too accurate. Ask a veteran, you know, if we should be there. Most of the veterans say, yeah, we have to stop what is going on. They didn't do anything after the First World Trade Center bombing then we really got hit. Four planes, buildings, Pentagon and a lot of Americans and foreigners died. And because they went to work -- it was actually worse than Pearl Harbor because at least Japanese hit our military. They hit civilians. WOODRUFF: What about the -- you have written an article in the last few days about the administration and the returning Iraq veterans. How is the administration treating these men and women?

MULLER: Well, there's a lot I could say about the whole thing there. I had a very good meeting with President Bush last year on May 30, Memorial Day weekend. And we talked about the live POW issue that -- were left behind in the past. We talked about veterans benefits. That we're going to need a lot more funds for the V.A. because of the wounded veterans that are coming back nowadays. We're getting a lot of veterans in. There are going to need more funds to take care of them. They are missing a lot of limbs. They are going to have post- traumatic stress disorder. They are going to have a lot of wounds besides an arm or leg.

And this all has to be taken care of. How are we going to take care of them if we are short $3 billion for the 2006 budget? And the new secretary, Nicholson wants to layoff 3900 doctors, nurses and staff in the V.A. and it would put the V.A. in worse shape than it was before president bush took over after he was elected in 2000.

WOODRUFF: Have you made the case to the Bush administration about this?

MULLER: We've discussed it with certain people, yes, we sent letters. You know, it's not a very good thing. We have been talking about it all over.

WOODRUFF: What do they say in return?

MULLER: Right now, we haven't had any answers on it. It's the same thing -- we haven't had many answers on the live issue, on the president's part. He's a very honorable person. We had a very good talk. We have a good relationship. And I hope the relationship continues. But it's been a year and nothing has been done on a live issue. We talked about how we could possibly solve the live issue.

WOODRUFF: When you say live issue, what are you referring to?

MULLER: Prisoner of war problem, World War II, Korea, Vietnam, Bosnia, we have got one guy missing now, Matt Maupin from Ohio. He has been missing since April of last year.

(END VIDEOTAPE)

WOODRUFF: Rolling Thunder's Arty Muller some of what he said involved some serious charges. So how does the Veteran's Administration respond? I'll speak with the Veteran's Administration Secretary Jim Nicholson when we return.

Plus, the French say "no" in a big way. Will yesterday's vote destroy efforts to unify Europe?

Later, Senate Majority Leader Bill Frist tries to wave away a tough week at work.

(COMMERCIAL BREAK)

WOODRUFF: Before we go back to our coverage on this Veteran's Day (sic) we have an item of news out of Iraq. Abu Musab al Zarqawi, the terrorist leader, has issued a statement. It has come across the news wires in the statement Zarqawi is saying he is now back with his brothers and his family in Iraq after what he describes as a minor wound.

There had been an attack in Iraq in which U.S. officials had picked up word that Zarqawi had been injured. Had been wounded. It is not been clear how serious the wound was. Today's statement is the first word from -- that appears to be from Zarqawi himself. He's describing it as minor and he is saying he's now back with what he calls his brothers and his family. CNN attempting, of course, to get more information on this and when we do we'll share it with you.

Well this is Memorial Day. And the Secretary of Veterans' Affairs Jim Nicholson is with me now on this day to talk about a number of issues related to the military. We are here at the Iwo Jima Memorial, the U.S. Marine Memorial, and it's good to see you.

JIM NICHOLSON, SECRETARY OF VETERANS' AFFAIRS: Thank you, good to be with you.

WOODRUFF: We have just been listening to Artie Muller who is the head of -- the co-founder of this group Rolling Thunder. Supportive of the war in Iraq. Supportive of President Bush and the administration considered about what he says the way U.S. veterans are being treated after they come back from Iraq. Should he and others be concerned?

NICHOLSON: Well, we're all concerned for veterans and this is Memorial Day and we are here at this hallowed ground and commemorating the 1.2 million people that gave their life for our country. And we have 25 million veterans in our country. And our country is really committed to taking care of our veterans. The budget that we have submitted for fiscal '06, if approved will be a record, be nearly $71 billion which is higher than the budgets of 24 states combined. Since President Bush was inaugurated the budget for the veterans has increased 47 percent. In this new budget we have $100 million in there for prosthetic research. $100 million in there for post- traumatic stress disorder, they call it PTSD.

WOODRUFF: Is it all because of the war in Iraq?

NICHOLSON: It's certainly related because we're seeing young folks coming back from Iraq needing prosthetic devices and some of them needing help from stress and that's why we have those in the budget.

WOODRUFF: Well, how -- if it is the highest budget ever, how do you reconcile that with what Artie Muller said was something like a $3 billion cut in healthcare? Medical care for these returning wounded veterans?

NICHOLSON: I don't know where he gets that information. Because it's not a cut at all. It's an increase and as I said it will be a record if approved. And that budget has not yet been approved. But President Bush is committed to veterans and he called me to the Oval Office and asked me if I would do this job and I agreed and he said I want you to take care of our veterans. He feels it. And that's what we're committed to doing. And that's what we're doing. We have 158 major medical centers around the United States that have one mission which is to take care of our veterans. And I'm very proud of them. Because they are doing a wonderful job.

WOODRUFF: Again, Artie Muller, somebody who supports the administration, supports the war in Iraq, he's talking about a proposed cutback of 3900 doctors, nurses and staff from the nation's V.A. hospitals.

NICHOLSON: I heard him say that. I don't know where gets that information. We're not planning a cutback of doctors, no.

WOODRUFF: So no sort of cutback whatsoever planned across ...

NICHOLSON: Well, there may be adjustments in one hospital and another, but overall there's no significant cutbacks going at all. In fact we're increasing. We're increasing, as I said, research in prosthetic, research into post-traumatic stress disorder. We have a goal of having our veterans when they come back from the war theater have a seamless transition into their life back into the United States. And we have a tremendous number of outreach programs, where we're telling them what they are entitled to. We're helping them get jobs. We're helping them know what their benefits are because every person who serves over there when they come back is eligible to two years of full medical benefits from the V.A., including our reserve complements.

WOODRUFF: What is your chief concern? Again, it's Memorial Day, it's a day where we remember those that gave their lives for this country. As someone who is responsible for how many million veterans in this country did you say?

NICHOLSON: 25 million living veterans.

WOODRUFF: What is your chief concern?

NICHOLSON: My concern is that we're communicating and that they know the benefits that they are entitled to and that we the V.A. are doing a good job in dispensing those benefits to those veterans who are eligible for those. And we have a priority of those who are those that have incurred a service connected disability, either physical or mental. A veteran who might be down on his luck, maybe he's homeless, or a veteran who is in need of special care, dialysis, tracheotomy, so forth.

WOODRUFF: Jim Nicholson who is the Secretary of Veterans' Affairs. It's very good to see you. Thank you for coming out here to the Iwo Jima site in Virginia.

NICHOLSON: Nice to be here.

WOODRUFF: We appreciate it. Thank you very much.

Just ahead, talk of another Bush family member running for president is nothing new. But usually it involves the Florida governor. Now someone else's name has been thrown into the ring. We'll tell you what GOP power couple is promoting that campaign next.

(COMMERCIAL BREAK)

WOODRUFF: Back at Iwo Jima Memorial and checking the political bytes on this Memorial Day. There has been talk before of another Bush running for the White House. Florida Governor Jeb Bush. But should that focus really be on First Lady Laura Bush? In an interview for tonight's edition of CNN's LARRY KING LIVE, Vice President Dick Cheney and his wife Lynne tell Larry that the first lady would make a formidable candidate.

(BEGIN VIDEOTAPE)

L. CHENEY: I think Mrs. Bush ought to run for president. If we want to have a Bush dynasty. Has she been wonderful?

LARRY KING, CNN HOST: What do you think of that, Mrs. Bush versus Mrs. Clinton?

RICHARD CHENEY, VICE PRESIDENT: Great idea.

KING: The biggest turn-out in American history.

R. CHENEY: I think I know who would win.

(END VIDEOTAPE)

WOODRUFF: You can see the entire interview with Vice President Cheney and wife Lynne tonight at 9:00 Eastern on CNN's LARRY KING LIVE.

Republican Party Chairman Ken Melman and Democratic Party Chairman Howard Dean don't agree on much. But today both party leaders issued statements urging Americans to take time to remember America's troops. Dean also managed to work in a plug for Democratic Party efforts on behalf of veterans.

As we reported on Friday, Senate Majority Leader Bill Frist spent Sunday at the Coca Cola 600 NASCAR race in North Carolina. Frist waved the green flag as the honorary starter. He stuck around above the track to watch about 30 laps from his front row seat.

A push for a stronger Europe suffers a stinging setback. French voters weigh in on a proposed European constitution. A report from our European political editor straight ahead.

(COMMERCIAL BREAK)

WOODRUFF: Across much of Europe today there are new concerns about the continent's political and economic future. French voters delivered a crushing defeat to the European Union's push for closer unity by rejecting a proposed E.U. constitution. The constitution must be ratified by all 25 nations to go into effect. Our European political editor Robin Oakley is in the French capital.

(BEGIN VIDEOTAPE)

ROBIN OAKLEY, CNN CORRESPONDENT (voice-over): Many among the crowds who celebrated the emphatic defeat of the European Union constitution treaty and of the French political establish establishment in the Place de la Bastille insisting they were still strong pro-Europeans. They just didn't like the version of Europe they saw in the treaty. But will there be any other version? How will Europe cope with the impasse the French rejectionists created?

Their president was swift to insist to his countrymen that nothing had changed in France's relationship with Europe.

JACQUES CHIRAC, FRENCH PRESIDENT: It is your sovereign decision and I take note of it. Nevertheless, our ambitions and interests are profoundly linked to Europe. France, a founder member of the Union remains naturally enough within the Union. I want to tell you and our European partners and all the people's of Europe that France will continue to occupy its full place, respecting the undertakings of the E.U.

OAKLEY: While French voters digested what they had done, Mr. Chirac's phone was busy with calls from other leaders who campaigned in France to help him. Not good news but not a catastrophe claimed Spanish Prime Minister Jose Luis Rodriguez Zapatero. A setback for the constitution but not its end argued German Chancellor Gerhard Schroeder. It wasn't, he insisted, the end, either, of the Franco- German partnership. In Brussels E.U. officials urged others the ratify the treaty.

JOSE MANUEL BARROSO, EUROPEAN COMMISSION PRESIDENT: We are 25 states, nine have already ratified the treaty, like Germany, Spain, Italy, we have to look at it taking consideration to broader picture. So it's very difficult to draw European conclusion based on one country even if it is a very important country.

OAKLEY: Few European leaders, though, were seeking to cloak the severity of the blow dealt to their hopes by French voters.

JACK STRAW, BRITISH FOREIGN SECRETARY: Indeed, the result raises profound questions for all of us about the future direction of Europe.

OAKLEY (on camera): Like other leading figures across Europe, Mr. Straw urged a period of calm reflection. But that's what politicians always say when they can't think of what to do next. And the mood across Europe is far from calm. Robin Oakley, CNN, Paris.

(END VIDEOTAPE)

WOODRUFF: Thank you, robin. And that is it for this Memorial Day edition of INSIDE POLITICS. From the Marine Corps Memorial in Arlington, Virginia I'm Judy Woodruff. I'll see you again at the top of the hour on WOLF BLITZER REPORTS. 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 May 30, 2005 - 16:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Remembering those who served and those who died, from wars long past and from battles still being waged.
GEORGE W. BUSH, U.S. PRESIDENT (video clip): We must honor them by completing the mission for which they gave their lives.

ANNOUNCER: On this Memorial Day, thoughts of the war in Iraq. U.S. and Iraqi troops team up for a major mission but there's no letup in attacks by insurgents.

Did the French fry Europe? Will yesterday's vote strike a fatal blow to unifying the continent?

Bush in '08. No, not him and not him. But how about her?

LYNNE CHENEY, WIFE OF VICE PRESIDENT CHENEY (video clip): I think Mrs. Bush ought to run for president.

ANNOUNCER: Now live from the Marine Corps War Memorial in Arlington, Virginia, JUDY WOODRUFF'S INSIDE POLITICS.

JUDY WOODRUFF, CNN HOST: Thank you for joining us on this Memorial Day holiday. I'm reporting this afternoon from the Marine Corps War Memorial in Arlington, Virginia, just outside of Washington. This memorial is dedicated to all marines who have died in service to their country since 1775. President Bush traveled to nearby Arlington National Cemetery today for the annual wreath laying ceremony at the Tomb of the Unknowns. Afterwards he paid tribute to those who died while fighting for freedom saying their courage will never be forgotten. Mr. Bush also praised the men and women fighting in the nation's current military conflicts.

BUSH: Another generation is fighting a new war against an enemy that threatens the peace and stability of the world. Across the globe our military is standing directly between our people and the worst dangers in the world and Americans are grateful to have such brave defenders.

WOODRUFF: There are more examples today of the dangers facing U.S. troops in Iraq. An Iraqi military aircraft carrying four U.S. personnel and one Iraqi crashed in eastern Iraq. It is believed that everyone on board died in the crash.

Also today two suicide bombers attacked a crowd of Iraqi police officers in the city of Hillah south of Baghdad. Some 27 people were killed, 118 others injured. Meanwhile U.S. troops continue to provide support for Iraqi forces in what is being called Operation Lightning. The campaign involves the massive sweep of Baghdad neighborhoods designed to round up insurgents. The continued violence in Iraq has tested the resolve of many Americans, especially those whose loved ones are serving in the region. Our senior political analyst Bill Schneider has more on how events in Iraq are influencing public opinion.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN ANALYST, (voice-over): More than 1600 Americans have been killed in Iraq, 139 in the war two years ago. Even more since the January 30 elections in Iraq. Americans were encouraged by those elections.

BUSH: We will succeed because the Iraqi people value their own liberty as they showed the world last Sunday.

SCHNEIDER: Iraq was getting a new government. The end was in sight. But the news since January has been discouraging.

UNIDENTIFIED FEMALE: That makes at least eight bombings since Sunday and at least 46 deaths.

SCHNEIDER: Just after the elections in early February most Americans thought things were going well for the U.S. in Iraq. By early May the public's mood had soured, not just because of the losses as one analyst predicted before the war.

STEVE KULL, UNIVERSITY OF MARYLAND: The critical question in American's find is not whether there are body bags or not but whether the operation -- that the military operation in question makes sense to them, and whether they think it's succeeding or not.

SCHNEIDER: The military says it's succeeding.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: They keep going after what we in the military call the centers of gravity. They are not successful.

SCHNEIDER: Critics say there's no plan.

REP. STENY HOYER, (D) MD: They failed to articulate a successful strategy in Iraq.

SCHNEIDER: The president begs to differ.

BUSH: And our strategy is clear, we will train Iraqi forces so they can take the fight to the enemy and defend their own country.

SCHNEIDER: The public appears to be losing confidence in that strategy. In early February, Americans were split over President Bush's handling of Iraq. By late May, the public's assessment had turned negative. What seems to be affecting public opinion are local news reports which give the losses a face.

UNIDENTIFIED MALE: Gore was doing security work when the helicopter in which he was a passenger was shot down near Baghdad.

SCHNEIDER: And a family.

UNIDENTIFIED MALE: A message ...

(END VIDEOTAPE)

SCHNEIDER (on camera): Americans are willing to bear sacrifice as long as it's clear there's a purpose and a strategy. And that seemed clear when Iraqis voted in January. It's less clear now.

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

Among those who travel here to Washington for Memorial Day are members of the veteran's rights group Rolling Thunder. I spoke last Friday with the executive director of the motorcycle group Artie Muller and I started by asking him if this memorial day has a special meaning.

(BEGIN VIDEOTAPE)

ARTIE MULLER, EXECUTIVE DIRECTOR, ROLLING THUNDER: Well, I think every Memorial Day in this country should have a special meaning. There's a lot of men and women that gave their lives for our country so we can live the way we do. And a lot of people forget about that. And go out shopping, go to the beach and have a barbecue, they never really think about their freedom and how many have sacrificed their lives. Not only those that gave their lives but many have come back with limbs missing, PTSD or other wounds and problems from their military service.

WOODRUFF: And now we are engaged in another war in Iraq. As somebody who is a veteran of Vietnam, is the country paying enough attention to what is going on over there?

MULLER: They are paying attention and a lot of people are complaining about the troops that are dying. But you can't have a war and we actually have two wars going on, Iraqi Freedom and Afghanistan and between both of them we're going to lose some military troops. We lose military troops when we don't have a war in peace time because of accidents.

WOODRUFF: The latest polls are showing something like 57 percent -- more than half of Americans are stage war in Iraq was a mistake. Is this reminiscent of Vietnam for you in any way?

MULLER: I don't think those figures are too accurate. Ask a veteran, you know, if we should be there. Most of the veterans say, yeah, we have to stop what is going on. They didn't do anything after the First World Trade Center bombing then we really got hit. Four planes, buildings, Pentagon and a lot of Americans and foreigners died. And because they went to work -- it was actually worse than Pearl Harbor because at least Japanese hit our military. They hit civilians. WOODRUFF: What about the -- you have written an article in the last few days about the administration and the returning Iraq veterans. How is the administration treating these men and women?

MULLER: Well, there's a lot I could say about the whole thing there. I had a very good meeting with President Bush last year on May 30, Memorial Day weekend. And we talked about the live POW issue that -- were left behind in the past. We talked about veterans benefits. That we're going to need a lot more funds for the V.A. because of the wounded veterans that are coming back nowadays. We're getting a lot of veterans in. There are going to need more funds to take care of them. They are missing a lot of limbs. They are going to have post- traumatic stress disorder. They are going to have a lot of wounds besides an arm or leg.

And this all has to be taken care of. How are we going to take care of them if we are short $3 billion for the 2006 budget? And the new secretary, Nicholson wants to layoff 3900 doctors, nurses and staff in the V.A. and it would put the V.A. in worse shape than it was before president bush took over after he was elected in 2000.

WOODRUFF: Have you made the case to the Bush administration about this?

MULLER: We've discussed it with certain people, yes, we sent letters. You know, it's not a very good thing. We have been talking about it all over.

WOODRUFF: What do they say in return?

MULLER: Right now, we haven't had any answers on it. It's the same thing -- we haven't had many answers on the live issue, on the president's part. He's a very honorable person. We had a very good talk. We have a good relationship. And I hope the relationship continues. But it's been a year and nothing has been done on a live issue. We talked about how we could possibly solve the live issue.

WOODRUFF: When you say live issue, what are you referring to?

MULLER: Prisoner of war problem, World War II, Korea, Vietnam, Bosnia, we have got one guy missing now, Matt Maupin from Ohio. He has been missing since April of last year.

(END VIDEOTAPE)

WOODRUFF: Rolling Thunder's Arty Muller some of what he said involved some serious charges. So how does the Veteran's Administration respond? I'll speak with the Veteran's Administration Secretary Jim Nicholson when we return.

Plus, the French say "no" in a big way. Will yesterday's vote destroy efforts to unify Europe?

Later, Senate Majority Leader Bill Frist tries to wave away a tough week at work.

(COMMERCIAL BREAK)

WOODRUFF: Before we go back to our coverage on this Veteran's Day (sic) we have an item of news out of Iraq. Abu Musab al Zarqawi, the terrorist leader, has issued a statement. It has come across the news wires in the statement Zarqawi is saying he is now back with his brothers and his family in Iraq after what he describes as a minor wound.

There had been an attack in Iraq in which U.S. officials had picked up word that Zarqawi had been injured. Had been wounded. It is not been clear how serious the wound was. Today's statement is the first word from -- that appears to be from Zarqawi himself. He's describing it as minor and he is saying he's now back with what he calls his brothers and his family. CNN attempting, of course, to get more information on this and when we do we'll share it with you.

Well this is Memorial Day. And the Secretary of Veterans' Affairs Jim Nicholson is with me now on this day to talk about a number of issues related to the military. We are here at the Iwo Jima Memorial, the U.S. Marine Memorial, and it's good to see you.

JIM NICHOLSON, SECRETARY OF VETERANS' AFFAIRS: Thank you, good to be with you.

WOODRUFF: We have just been listening to Artie Muller who is the head of -- the co-founder of this group Rolling Thunder. Supportive of the war in Iraq. Supportive of President Bush and the administration considered about what he says the way U.S. veterans are being treated after they come back from Iraq. Should he and others be concerned?

NICHOLSON: Well, we're all concerned for veterans and this is Memorial Day and we are here at this hallowed ground and commemorating the 1.2 million people that gave their life for our country. And we have 25 million veterans in our country. And our country is really committed to taking care of our veterans. The budget that we have submitted for fiscal '06, if approved will be a record, be nearly $71 billion which is higher than the budgets of 24 states combined. Since President Bush was inaugurated the budget for the veterans has increased 47 percent. In this new budget we have $100 million in there for prosthetic research. $100 million in there for post- traumatic stress disorder, they call it PTSD.

WOODRUFF: Is it all because of the war in Iraq?

NICHOLSON: It's certainly related because we're seeing young folks coming back from Iraq needing prosthetic devices and some of them needing help from stress and that's why we have those in the budget.

WOODRUFF: Well, how -- if it is the highest budget ever, how do you reconcile that with what Artie Muller said was something like a $3 billion cut in healthcare? Medical care for these returning wounded veterans?

NICHOLSON: I don't know where he gets that information. Because it's not a cut at all. It's an increase and as I said it will be a record if approved. And that budget has not yet been approved. But President Bush is committed to veterans and he called me to the Oval Office and asked me if I would do this job and I agreed and he said I want you to take care of our veterans. He feels it. And that's what we're committed to doing. And that's what we're doing. We have 158 major medical centers around the United States that have one mission which is to take care of our veterans. And I'm very proud of them. Because they are doing a wonderful job.

WOODRUFF: Again, Artie Muller, somebody who supports the administration, supports the war in Iraq, he's talking about a proposed cutback of 3900 doctors, nurses and staff from the nation's V.A. hospitals.

NICHOLSON: I heard him say that. I don't know where gets that information. We're not planning a cutback of doctors, no.

WOODRUFF: So no sort of cutback whatsoever planned across ...

NICHOLSON: Well, there may be adjustments in one hospital and another, but overall there's no significant cutbacks going at all. In fact we're increasing. We're increasing, as I said, research in prosthetic, research into post-traumatic stress disorder. We have a goal of having our veterans when they come back from the war theater have a seamless transition into their life back into the United States. And we have a tremendous number of outreach programs, where we're telling them what they are entitled to. We're helping them get jobs. We're helping them know what their benefits are because every person who serves over there when they come back is eligible to two years of full medical benefits from the V.A., including our reserve complements.

WOODRUFF: What is your chief concern? Again, it's Memorial Day, it's a day where we remember those that gave their lives for this country. As someone who is responsible for how many million veterans in this country did you say?

NICHOLSON: 25 million living veterans.

WOODRUFF: What is your chief concern?

NICHOLSON: My concern is that we're communicating and that they know the benefits that they are entitled to and that we the V.A. are doing a good job in dispensing those benefits to those veterans who are eligible for those. And we have a priority of those who are those that have incurred a service connected disability, either physical or mental. A veteran who might be down on his luck, maybe he's homeless, or a veteran who is in need of special care, dialysis, tracheotomy, so forth.

WOODRUFF: Jim Nicholson who is the Secretary of Veterans' Affairs. It's very good to see you. Thank you for coming out here to the Iwo Jima site in Virginia.

NICHOLSON: Nice to be here.

WOODRUFF: We appreciate it. Thank you very much.

Just ahead, talk of another Bush family member running for president is nothing new. But usually it involves the Florida governor. Now someone else's name has been thrown into the ring. We'll tell you what GOP power couple is promoting that campaign next.

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WOODRUFF: Back at Iwo Jima Memorial and checking the political bytes on this Memorial Day. There has been talk before of another Bush running for the White House. Florida Governor Jeb Bush. But should that focus really be on First Lady Laura Bush? In an interview for tonight's edition of CNN's LARRY KING LIVE, Vice President Dick Cheney and his wife Lynne tell Larry that the first lady would make a formidable candidate.

(BEGIN VIDEOTAPE)

L. CHENEY: I think Mrs. Bush ought to run for president. If we want to have a Bush dynasty. Has she been wonderful?

LARRY KING, CNN HOST: What do you think of that, Mrs. Bush versus Mrs. Clinton?

RICHARD CHENEY, VICE PRESIDENT: Great idea.

KING: The biggest turn-out in American history.

R. CHENEY: I think I know who would win.

(END VIDEOTAPE)

WOODRUFF: You can see the entire interview with Vice President Cheney and wife Lynne tonight at 9:00 Eastern on CNN's LARRY KING LIVE.

Republican Party Chairman Ken Melman and Democratic Party Chairman Howard Dean don't agree on much. But today both party leaders issued statements urging Americans to take time to remember America's troops. Dean also managed to work in a plug for Democratic Party efforts on behalf of veterans.

As we reported on Friday, Senate Majority Leader Bill Frist spent Sunday at the Coca Cola 600 NASCAR race in North Carolina. Frist waved the green flag as the honorary starter. He stuck around above the track to watch about 30 laps from his front row seat.

A push for a stronger Europe suffers a stinging setback. French voters weigh in on a proposed European constitution. A report from our European political editor straight ahead.

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WOODRUFF: Across much of Europe today there are new concerns about the continent's political and economic future. French voters delivered a crushing defeat to the European Union's push for closer unity by rejecting a proposed E.U. constitution. The constitution must be ratified by all 25 nations to go into effect. Our European political editor Robin Oakley is in the French capital.

(BEGIN VIDEOTAPE)

ROBIN OAKLEY, CNN CORRESPONDENT (voice-over): Many among the crowds who celebrated the emphatic defeat of the European Union constitution treaty and of the French political establish establishment in the Place de la Bastille insisting they were still strong pro-Europeans. They just didn't like the version of Europe they saw in the treaty. But will there be any other version? How will Europe cope with the impasse the French rejectionists created?

Their president was swift to insist to his countrymen that nothing had changed in France's relationship with Europe.

JACQUES CHIRAC, FRENCH PRESIDENT: It is your sovereign decision and I take note of it. Nevertheless, our ambitions and interests are profoundly linked to Europe. France, a founder member of the Union remains naturally enough within the Union. I want to tell you and our European partners and all the people's of Europe that France will continue to occupy its full place, respecting the undertakings of the E.U.

OAKLEY: While French voters digested what they had done, Mr. Chirac's phone was busy with calls from other leaders who campaigned in France to help him. Not good news but not a catastrophe claimed Spanish Prime Minister Jose Luis Rodriguez Zapatero. A setback for the constitution but not its end argued German Chancellor Gerhard Schroeder. It wasn't, he insisted, the end, either, of the Franco- German partnership. In Brussels E.U. officials urged others the ratify the treaty.

JOSE MANUEL BARROSO, EUROPEAN COMMISSION PRESIDENT: We are 25 states, nine have already ratified the treaty, like Germany, Spain, Italy, we have to look at it taking consideration to broader picture. So it's very difficult to draw European conclusion based on one country even if it is a very important country.

OAKLEY: Few European leaders, though, were seeking to cloak the severity of the blow dealt to their hopes by French voters.

JACK STRAW, BRITISH FOREIGN SECRETARY: Indeed, the result raises profound questions for all of us about the future direction of Europe.

OAKLEY (on camera): Like other leading figures across Europe, Mr. Straw urged a period of calm reflection. But that's what politicians always say when they can't think of what to do next. And the mood across Europe is far from calm. Robin Oakley, CNN, Paris.

(END VIDEOTAPE)

WOODRUFF: Thank you, robin. And that is it for this Memorial Day edition of INSIDE POLITICS. From the Marine Corps Memorial in Arlington, Virginia I'm Judy Woodruff. I'll see you again at the top of the hour on WOLF BLITZER REPORTS. CROSSFIRE starts right now.

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