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Inside Politics

Democrats Attack Bush Tax Cut Proposal; Israel Elects a New Prime Minister

Aired February 6, 2001 - 5:00 p.m. ET


JUDY WOODRUFF, CNN ANCHOR: In the Israeli election, Prime Minister Ehud Barak concedes to Ariel Sharon. Our live coverage continues. Also ahead...


SEN. PAUL WELLSTONE (D), MINNESOTA: It's absolutely ridiculous. It's like Robin Hood in reverse.



SEN. TRENT LOTT (R-MS), MAJORITY LEADER: The Democrats don't like tax relief. They hate tax cuts.


BERNARD SHAW, CNN ANCHOR: Some Democrats may want to toy around with the president's tax cut plan, but is the real threat from the right?

WOODRUFF: Plus, we will mark Ronald Reagan's 90th birthday with reflections on the man and his political legacy.

ANNOUNCER: From Washington, this is INSIDE POLITICS with Bernard Shaw and Judy Woodruff.

SHAW: Thanks very much for joining us. The people of Israel have cast their votes, and now the Jewish state is poised to get a new prime minister and a new approach to the Middle East peace.

After incumbent Ehud Barak's concession a short while ago, we are awaiting the apparent victor, Ariel Sharon.

CNN's Christiane Amanpour joins us from Tel Aviv -- Christiane.

CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Well, Bernie, the prime minister, Ehud Barak, tonight conceded defeat. If the exit polls hold, he will have lost by a massive, whopping 19 points. That's a crushing defeat by any standard, and perhaps the biggest defeat ever in the history of Israeli elections here. He has just given his concession speech. Earlier today, he went to the polls, he cast his ballot like many other Israelis, and he expressed optimism at that point. He asked Israelis to come out and join him for what was important for the future of Israel.

By contrast Ariel Sharon stands tonight as prime minister-elect of Israel: a man who the opinion polls said just a few weeks ago was unelectable. And he appears to have won, according to the exit polls of course, by more than a landslide, 19 points.

When he went to vote, he told the people of Israel that they should vote for him, because he would keep, among other things, Jerusalem undivided, the eternal capital of the Jewish state.

Earlier, as I said, a few moments ago Ehud Barak wrapped up his concession speech in which he still said that despite the fact that they lost, he believed his path was the only right one.


EHUD BARAK, PRIME MINISTER OF ISRAEL (through translator): Not long ago I telephoned member of the Knesset Ariel Sharon and I congratulated him on his election.

Please, no booing.

Just a short while ago, just a short while ago, Ariel Sharon didn't even imagine that this evening he would be elected as prime minister, and he stood at Likud -- at a Likud conference and he said he wanted to see me as his minister of defense and then there was booing. And there shouldn't have been booing then and there shouldn't be booing now.


AMANPOUR: Well, that was just part of a fairly emotional speech that Ehud Barak gave as a concession speech. He said that he was convinced that the path to peace that he had forged was the right path and that eventually that would be the peace plan that would be accepted.

He also said that he had been asked to join a national unity government. He didn't entirely rule that out, but said that unless both parties could come to an agreement whereby they could have a joint policy and platform, there would be no Labor Party in the national unity government.

And perhaps the biggest news from tonight is that Ehud Barak has resigned as leader of the Labor Party, has resigned his Knesset seat, his seat in the Israeli parliament, although he does remain part of the Labor Party.

Bill Schneider, our political analyst, so familiar to INSIDE POLITICS audiences: This rejection of Barak, does that amount to a rejection of the peace process? WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: No. Every poll that's been taken in Israel shows that overwhelmingly Israelis, Jews expect the peace process to continue. They support a peace process. I would call it a rejection of illusions about peace.

They feel disillusioned by what happened under Ehud Barak and the formula that's been prevalent since Oslo: Namely territorial concessions will lead to greater security. Well, that didn't happen. The territorial concessions were rejected by Yasser Arafat and they did not lead to greater security. They led to violence.

Interestingly, Ariel Sharon knew that, and he ran a campaign in which his slogan was "Ariel Sharon will bring peace." Now, it's a little mind-boggling to imagine Ariel Sharon and peace in the same sentence, much less the same campaign slogan, but apparently Israelis saw him as having a different path to peace.

What path is that? I spoke to a Sharon adviser, and he said, "It's more like Ronald Reagan's approach to peace: not peace through concessions but peace through strength." We'll see what happens.

AMANPOUR: Indeed we will. Will it work, this deterrence policy?

SCHNEIDER: Well, it'll be very difficult. That was the Cold War that Ronald Reagan won, and of course the Russians weren't staging a guerrilla war against the United States or an Intifada. The Israelis have to live with the Palestinians at their doorstep, making life impossible. That wasn't the case in the Cold War.

AMANPOUR: Bill, that's exactly right. And Bernie, what Ariel Sharon has done very skillfully is run a platform on peace. His campaign slogan was "Only Sharon will bring peace." On the other hand, as many people say, Sharon wants to keep the land and have peace. They don't think that that's possible. And he hasn't really spelled out his plan, his detailed plan for how he's going to achieve first security and then peace.

SHAW: Christiane, also, Bill, I'd like to look at this election from the other end. By this vote, what are the Israeli people saying?


AMANPOUR: The Israeli people appear to be saying -- I think we can agree to this -- that first of all, by an overwhelming margin, they still support the Oslo peace process, the peace process. On the other hand, they seem to be saying that, as Bill said, they simply don't think that Barak was the one to be able to deliver it.

And what this had shaped up really to be was not necessarily a vote for Sharon, but a definite vote against Barak. And what we had here was one of his core constituencies, the Israelis who are Arab, really the Arabs who are Israeli citizens, stayed away from the polls in droves, and that was a huge blow to Ehud Barak's chances, and that along with some of his traditional Jewish sector voters staying away, casting blank ballots, it amounted to a vote no confidence in Barak himself. SCHNEIDER: And, in addition, a vote of anger and no confidence in Yasser Arafat. Many of the Israelis have said this election, the election of Ariel Sharon, was a gift from Yasser Arafat, who rejected the Barak concessions, who the Israelis hold responsible for the last four months of terrifying violence, the uprising, and they believe that they have no partner for peace anymore. So if anyone can be credited, ironically, with the election of Sharon, it may be the leader of the Palestinian Authority.

SHAW: Thank you, Bill Schneider, Christiane Amanpour. Thanks very much for the excellent coverage -- Judy.

WOODRUFF: Here in Washington, Bush administration officials have been following the Israeli election results, and privately weighing their next diplomatic moves.

Let's check in now with our senior White House correspondent John King -- John.

JOHN KING, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, caution had been the White House watchword until the results were considered official. And now that Ehud Barak has conceded the election to Ariel Sharon, senior Bush administration officials telling us the president will call Mr. Sharon perhaps even in the next hour or so to offer his congratulations, to make clear he looks forward to working with the new Israeli leader. to make clear, as well, the continued U.S. commitment to Israeli security as well as peace and security throughout the region.

Now as for the peace process, we're told Mr. Bush will make clear, he very much hopes that the new Israeli government will get back to negotiating with the Palestinians, but the expectation here is that there will be a bit of a pause here and it could be weeks, if not months or longer, before we see any progress toward peace.


KING (voice-over): The White House expectation was a Sharon victory followed by the uncertainty of a difficult transition and the possibility of unrest.

COLIN POWELL, SECRETARY OF STATE: This is the time to be patient, see what the Israeli people say, give the winner an opportunity to decide what kind of a government will be formed as a result of this, and to encourage all the leaders and all the people of the region to refrain from any acts that would lead to violence.

KING: The Bush team, and many Republican allies, believe President Clinton pushed too hard for a peace deal in his final months, and in any event, the new president prefers a more hands-off approach.

SEN. CHUCK HAGEL (R), NEBRASKA: Where we make mistakes is we interfere, is that we get ourselves in the middle of something we shouldn't get ourselves in the middle of. The Israelis and the Palestinians are going to have to sort some of this out. We can't force them into that. So we must push back, let the Israelis form their government with a new prime minister, and then see how that plays out.

KING: But crisis is the region's one constant, and a veteran of the last administration says Mr. Bush might be tested sooner rather than later.

SAMUEL BERGER, FORMER NATIONAL SECURITY ADVISER: I think that it will be important after this election for the administration to do its best to assure that things do not escalate into a situation of increasing turmoil. That will be very much against America's interests. I don't think it will be possible to stand aside in the face of that.

KING: Sharon has talked of a non-belligerency agreement or a cease-fire with the Palestinians, but has repudiated the negotiating approach taken by Prime Minister Barak.

BERGER: He's made it clear that he is not prepared to make the kind of territorial compromises that I think will be necessary, ultimately, for a comprehensive peace.

KING: Secretary Powell plans to visit the region at the end of the month to get a firsthand sense of how The Israeli elections have changed the landscape.


KING: White House officials say President Bush also plans to reach out to outgoing Prime Minister Barak. Most likely that telephone call will come tomorrow, we're told. As of now, no plans for the president to talk directly to the Palestinian leader, Yasser Arafat.

He has yet to speak with him in his more than two weeks in office now. Secretary Powell has been the administration's point of contact with the Palestinian leader; a sign of the very different approach this president takes to the peace process and the Middle East than his predecessor -- Judy.

WOODRUFF: John, you describe the president, the new administration as taking a more hands-off approach to the peace process, to Israel, the Palestinians. Does that mean it's less of a priority for them, that reaching peace in the Middle East just isn't the priority that it was?

KING: Certainly not, and Secretary Powell made that clear today. And look at another key appointment today to the State Department, Richard Haass, a veteran of the first Bush administration, an expert on Middle East policy.

It is more a stylistic difference in that the president, President Bush will not have the day-to-day hands-on approach that President Clinton had in this process. He will leave much of that up to Secretary Powell and the diplomatic team at the State Department. Certainly, they make the case here the U.S. has a very large strategic interest in the region and certainly a commitment to Israel's security.

It's just a different stylistic approach between the two presidents. They do believe here that one of the reasons Mr. Barak got into so much trouble and Mr. Arafat, as well, with their base constituencies is that President Clinton pushed them to a deal that neither man was strong enough to make.

They believe that was a mistake on the Clinton team's part, and this administration believes the key choices must be made in the region first and then, and only then, can the United States come in to do what Secretary Powell today called jawboning.

WOODRUFF: All right, John King at the White House. Thanks very much.

Well, regardless of the outcome of the Israeli election, a new Gallup Poll taken before the vote shows most Americans believe Middle East peace is an important goal for the United States to pursue. However, when asked if Israelis and Arabs will ever live in peace, more than half said no.

And the poll shows that for the first time since the Persian Gulf war, a majority of Americans say they sympathize more with the Israelis than the Palestinians. Many who had been unsure of their sympathies now side with the Israelis. Over the years, support for the Palestinians has remained roughly what it is now, at 16 percent.

And ahead on INSIDE POLITICS: President Bush takes his tax cut message on the road. The promotional tour heads to the suburbs, with a special focus on small businesses.

Also ahead, Senator John McCain strays from the White House agenda. An update on competing efforts to shape a patients' bill of rights.


WOODRUFF: President Bush visited a suburban Washington toy store today as part of his week-long campaign to build support for his tax cut plan. He faces resistance from Democrats, who think the plan goes too far.

And CNN Congressional correspondent Jonathan Karl reports some Republicans aren't satisfied either, but for much different reasons.


JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): As President Bush presses for his $1.6 trillion tax cut proposal, here visiting a Washington-area toy store to talk about how it would help small business owners, he is facing thunder on the right: conservatives who think his tax cut is too small.

On Wednesday, a group of about 15 House Republicans, led by Pennsylvania Republican Pat Toomey, will unveil a $2.2 trillion tax cut plan that would include all of Bush's cuts, plus: accelerate the income tax rate cuts, which under the Bush plan are phased in over 10 years; eliminate the alternative minimum tax; reduce capital gains taxes, and reduce taxes on small businesses.

And House Majority Leader Dick Armey, in a memo to House Republicans, raised the possibility of an even larger tax cut, saying -- quote -- "Returning $1.6 trillion or even $2.6 trillion to the people who earned the money is not unreasonable."

Armey says he will try to convince the president to go for a larger tax cut. But Senate Leader Trent Lott warned his fellow Republicans not to -- quote -- "love to death" the tax cut by making it too big to pass.

SEN. TRENT LOTT (R-MS), MAJORITY LEADER: The greatest danger there is that we get carried away and start adding too many things to it and wind up pulling it down.

KARL: Meanwhile Democrats are pointing out that despite the current surplus projections over the short-run, the government faces long-run deficits in Social Security and Medicare once the massive baby boom generation retires, a point made by the comptroller general of the United States to the Senate Budget Committee Tuesday.

SEN. KENT CONRAD (D), NORTH DAKOTA: Yellow lights are flashing here; they're telling us to be cautious. Here we have the comptroller general of the United States warning us that while we have short-term surpluses, we have long-term deficits, and that we ought to take this time.

KARL: But President Bush said the problem is in the short-term: The current slowing of the economy.

BUSH: We better act. The economy is slowing down, and we need to act and act as quickly as we possibly can, including working with Congress to make sure the tax cuts can take -- as much of the tax cuts as possible can take immediate effect to help people.


KARL: And Vice President Cheney, who has become somewhat of a fixture here on Capitol Hill, was up here again today, meeting with Republicans in both the House and the Senate. Cheney also met with a key group of Democrats, the so-called Blue Dog Democrats in the House.

He's met with them. They are a very key group in terms of possibly getting the tax cut passed. Now, I've talked to a source close to the Blue Dogs who says that of the 31 who call themselves Blue Dog Democrats, at least 10 are currently strongly leaning in favor of endorsing the Bush tax cut plan -- Bernie.

SHAW: Thank you, Jonathan Karl.

One of the key architects of the Bush economic plan is White House Economic Adviser Larry Lindsey. He joins us now.

Mr. Lindsey, do you have momentum on your side? LARRY LINDSEY, WHITE HOUSE ECONOMIC ADVISER: Well, I'm an economic adviser, not a political adviser. But I think that there is a widespread recognition in this town that we do need a tax cut, and we need to put money in the pockets of people just as quickly as possible.

SHAW: Well, do you have momentum on your side in this battle, is my question?

LINDSEY: I'm not sure what momentum is, sir, but, yes, why don't I say, yes.

SHAW: All right, whatever your answer. Yesterday here on INSIDE POLITICS, Judy Woodruff interviewed California Democrat Robert Matsui and he said your $1.6 trillion tax cut is actually $1.9 trillion when you include the interest lost on the 1.6; is that correct?

LINDSEY: Well, again, whenever anyone -- whenever there is a spending program out there, I'm sure you could include in the cost of that spending program interest on that as well. That's not the way accounting is done in Washington on either tax or spending side. So I think, you know, for truth in advertising, the number -- the 1.6 number is the correct one.

SHAW: You might have heard Jonathan Karl's piece. Some Republican conservatives are saying this is not enough. They're Talking of a tax cut from $2 trillion to $2.6 trillion. What say you?

LINDSEY: Well, the president fought very hard about the program he proposed. he spent about six months working on it before he proposed it in December of 1999. He ran on it during the primaries when he was attacked from the right. He ran on it during the general election when he was attacked from the left. He's stuck with the same program throughout. He thinks it's the right way of providing tax reform and tax relief for the American people, and he's sticking by it.

SHAW: So, is the upshot of what you said the conservatives in your party really are not being realistic?

LINDSEY: The president wants to see passed the proposal that he ran on and was elected on. Now, he also said that he'd be very willing to work with the Congress to see if we couldn't accelerate the proposal to see if we can't put money in the pockets of people sooner, and the president, I think, is quite open to that.

SHAW: Tell us very candidly, what's the risk in basing tax cuts on a projected surplus, a 10-year projected surplus? What is the inherent risk?

LINDSEY: Well, I think this is a very, very realistic projection. It is lower than the projection that President Clinton had as far as economic growth. The economic growth assumption is lower than the blue chip consensus. The economic assumption is lower than what Chairman Greenspan testified as his expectation for the economy. So, it is a very, very prudent forecast. In addition, the forecast assumes that the tax share of the economy is going to go down on its own. But when you have a growing economy, the simple math says the tax should go up. So, for a variety of reasons, I think anyone who looks at the assumptions behind the number would have to conclude that it's very cautious and quite prudent.

SHAW: So, are you implying that there is no risk?

LINDSEY: I didn't say that, Bernie. You never know what can happen 10 years out. But, you know, we have programs, government spending programs that go on in perpetuity and it doesn't stop us from doing that. The key point to make is that the assumptions that underlie the economic forecast are quite realistic and quite prudent compared to any reasonable benchmark you'd want to look at.

SHAW: White House Economic Adviser Larry Lindsey, thanks for joining us.

LINDSEY: My pleasure.

SHAW: To become reality, this Bush tax plan will have to pass muster with a closely divided House and Senate. One of the key Democrats who will consider the issue is North Dakota Senator Kent Conrad. He is the ranking Democrat on the Budget Committee.

Senator, you just heard Mr. Lindsey. What do you think?

SEN. KENT CONRAD (D), NORTH DAKOTA: Well, I think, first of all, with respect to the certainty of this forecast, let's do a reality check. This is a 10-year projection. The forecasting agency themselves warned of its uncertainty. They said it could be $500 billion high or low in the fifth year alone. So, this is very uncertain when you start talking about 10-year numbers.

But beyond that, the fundamental question is what's a responsible tax cut? I think virtually all of us are for a tax cut, and a significant one. Our concern is that the Bush plan goes way too far, threatens to put us back into deficit, and more than that, pushes the long-term debt off on our kids because we're not dealing with the Social Security and the Medicare debt that the controller general of the United States warned us about today.

SHAW: Let's back up and review the exact quotes that you and our viewers heard from Mr. Lindsey. He says the assumptions that underlay what the president wants to do, quote, "that this is a projection that is realistic" and he calls it a prudent forecast. Do you agree with that?

CONRAD: I agree that it is a realistic assumption, but it is just that. It's an assumption and the Congressional Budget Office told us when they provided that projection for 10 years, that in the fifth year it could either be a $50 billion deficit or a trillion dollar surplus. That's the uncertainty of this forecast.

SHAW: How much of a tax cut do you honestly think the federal government treasury can afford?

CONRAD: What I believe is that we should set aside the Social Security and Medicare trust fund surpluses, every penny of them, and then take what's left and divide it in equal thirds: One-third for a tax cut; one-third for these high-priority domestic needs like education, health care, national defense; and one third to deal with this long-term debt crisis that we face in Social Security and Medicare. That would be equal chunks of about $900 billion.

SHAW: Kent Conrad, has this Republican president outfoxed the Democrats with this tax cut plan?

CONRAD: No, I don't think it's a matter of outfoxing. I do think he's had the wind at his back with the Greenspan testimony, with the Congressional Budget Office increasing their projection of a surplus, but remember, at the end of the day, this isn't just short- term politics.

All of us are responsible for the long-term fiscal condition of our country. We went through this before in the 1980s and ran the country right into a deficit ditch that took us 15 years to dig out of. Let's not repeat that experience. Let's be cautious. Let's be prudent. Yes, let's have a significant tax cut, but let's also pay attention to these high-priority domestic needs and, most especially, let's not shift this debt off onto our kids. It's our responsibility.

SHAW: Do you endorse the president's idea that this tax cut should be retroactive?

CONRAD: I do. I think that is a wise thing to do in terms of giving additional lift to this economy, even though I keep in mind Chairman Greenspan's testimony that the best way to short circuit and economic downturn is through the monetary policy of the Federal Reserve Board by lowering interest rates because that takes place immediately and has a much bigger bang for the buck than any tax cut.

But still in all, I think it would be useful to have some short- term fiscal stimulus as well.

SHAW: North Dakota Senator Kent Conrad, thanks so much for joining us -- Judy.

WOODRUFF: As the president builds his case for a major tax cut, his one-time Republican rival has turned his attention to health care reform. Arizona Senator John McCain today joined a bipartisan group of lawmakers to endorse a patients' bill of rights. The bill includes provisions the president is against. But Senator McCain said now is the time to resolve the issue.


SEN. JOHN MCCAIN (R), ARIZONA: We don't have time to wait any longer for reform. Under today's medical system, too many Americans feel powerless when faced with a health care crisis in their personal life. Each day, month, and year that reform is postponed just exacerbates the problems facing patients. (END VIDEO CLIP)

WOODRUFF: This afternoon, President Bush downplayed his differences with the current legislation.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There's a lot of details to be worked out, but I am really pleased with the progress and I'm very hopeful that we can get a patients' bill of rights on my desk, pretty soon. And the fact that John McCain and Senator Kennedy and others have come together is a good sign.


WOODRUFF: Republican Congressman Charles Norwood of Georgia helped to write the current version of the patients' rights bill. But the White House has persuaded Norwood to remove his name from the legislation until the president presents his own plan. INSIDE POLITICS will be right back.


SHAW: Former President Ronald Wilson Reagan will celebrate his 90th birthday with a quiet dinner at home tonight in Los Angeles. The former president is still recuperating from last month's hip surgery, and he continues to grapple with the symptoms of Alzheimer's Disease.

Supporters are paying tribute to the nation's 40th president this day, whose political touchstones were smaller government and lower taxes. Those themes are, of course, still current. But as the Washington bureau chief Frank Sesno recalls the economic environment was very different.



RONALD REAGAN, 40TH PRESIDENT OF THE UNITED STATES: Big government is neither healthy nor efficient, and it's not what the Founding Fathers had in mind when they created the United States of America.


EDWIN MEESE, FORMER ATTORNEY GENERAL: The economic recovery program had four major elements, and the biggest by far was the tax rate reduction. He had wanted a 30 percent rate reduction over a period of three years; he ultimately got 25 percent.


REAGAN: I ask you now to put aside any feelings of frustration or helplessness about our political institutions, and join me in this dramatic but responsible plan to reduce the enormous burden of federal taxation on you and your family. (END VIDEO CLIP)

KEN DUBERSTEIN, FORMER WHITE HOUSE CHIEF OF STAFF: Reagan was coming from this very simple proposition. If you lower the tax rate, then more people will work, there will be more income, and the economy and everyone's lives would be better.

FRANK SESNO, CNN CORRESPONDENT (voice-over) But everyone's life did not get better. Though he won a three-year, 25 percent income tax cut, by 1982 Reagan faced a deepening recession, mounting unemployment and homelessness, a contentious Congress, and growing public skepticism. Reaganomics, the critics said, wasn't working.

(on camera): In October of 1982, unemployment actually hit 10 percent.


SESNO: That was when the president's polls took, probably, their most significant hit of his presidency. How difficult was that?

BAKER: It was very difficult. It was very difficult. It was the only time in the eight years of the Reagan presidency that I remember seeing him really, really sort of down.

MICHAEL DEAVER, FORMER WHITE HOUSE DEPUTY CHIEF OF STAFF: All of the things that he said were going to happen, that things were going to get better, were not getting better. His budget had, in fact, not caught up with the recession in the country as fast as he thought it would.

SESNO (voice-over): At the White House, they coined a phrase, "stay the course." Beyond those gates, however, many doubted and some demonized the president.

(on camera): Was he thin-skinned when he would be burned in effigy, or people would say that Ronald Reagan was heartless or that he was responsible for daddy being out of work or the family having to go on welfare or show up at a soup kitchen?

BAKER: He could get very upset when he was challenged directly on those types of issues.

DUBERSTEIN: He thought it was totally unfair. He thought this was the media at it's worst, that they were trying to ramrod something against him, to try to show that it wasn't going to work. What I remember most vividly from that time is the story that he told and told and told, about the optimistic kid and the pessimistic kid.

MEESE: The pessimist went to his room, and in his room was this tremendous array of new toys: trucks and dump trucks and railroad trains and all kinds of great toys. And the father just left him alone in there. And then he took his other son and he put him into his room and there was this big pile of manure.

(BEGIN VIDEO CLIP) REAGAN: They then went in and followed where the boy was with the toys, and he was sitting there crying. And they said, what are you crying about? And he said, well, I know somebody is going to come and take these away from me.


And they went down to the room with the optimist and he was on the top of that pile of stuff and he was throwing it over his shoulder as fast as he could. And they said, what are you doing? He says, there's got to be a pony in here somewhere.



DUBERSTEIN: He told that story incessantly. It was not just for himself but for all of us. Got to keep our optimism up, we're going to make it.

DEAVER: I think Reagan probably talked the country back into prosperity for about a year there before it all clicked in.

SESNO: Did he ever doubt himself?

DEAVER: Never.

SESNO: Did you ever doubt him?

DEAVER: Probably, yes. Probably. I didn't have the confidence he had. I don't think there was anybody around him that took the long view of things. All of us pretty much took the short view.

SESNO: How great a temptation to change course in those early days?

BAKER: There was some temptation to change course, but it never would have happened with Ronald Reagan.

SESNO (voice-over): Ultimately, under Ronald Reagan, the economy turned around. The stock market boomed, millions of jobs were created, in what was, at the time, the longest peace time economic expansion in U.S. history. But Reagan's economic legacy was tainted by record deficits that more than doubled the national debt, and by finger pointing with Congress over who was responsible.


REAGAN: Failure to cope with this problem now could mean as much as a trillion dollars more in national debt in the next four years alone. That would average $4,300 in additional debt for every man, woman child, and baby in our nation.


SESNO: Ronald Reagan presided over big deficits that more than doubled the national debt.

BAKER: You do have to accept that fact. But you have to explain also that the reason we got those deficits, the reason those deficits were generated was because the Congress would not cut spending in the way and to the extent that Ronald Reagan wanted it cut.


SESNO: Taxes were cut, the economy grew, regulation was curbed, and business responded after that deep recession. And Bernie, much of that piece you saw there, and the interviews were taken, you know, we did out at the Reagan Library in Simi Valley, California. And all those exhibits reinforced these themes of the Reagan years: smaller government, lower taxes -- excuse me -- and ultimately, in the end, an economy that took off. The backdrop: Ronald Reagan's optimism and buoyancy.

SHAW: Frank Sesno, thanks very much.

CNN will be taking an in-depth look at the presidency of Ronald Reagan in the coming weeks. The first installment of "THE REAGAN YEARS," a four-part series, airs this Sunday at 10:00 p.m. Eastern.

And just ahead, considering the impact of those Reagan years, on this, his 90th birthday. Judy will talk with our Jeff Greenfield and former Reagan staffers Michael Deaver and Martin Anderson.



NANCY REAGAN, FORMER FIRST LADY: It's sad to see someone you love and had been married for so long and you can't share memories. That's the sad part.

LARRY KING, HOST: You know, I never thought of that. A couple will sit down and say, remember when little Fergie broke his foot. What year was the picnic?

N. REAGAN: Right. We can't do that.


WOODRUFF: Before we move on to our own conversation coming up, a reminder: CNN has been watching the Israeli election results all day. We expect that in just a few moments, we will hear from the apparent winner Ariel Sharon in the race for prime minister. This is a picture of the Likud Party headquarters in Tel Aviv.

As soon as Mr. Sharon appears, we will go there live. But in the meantime, we are going to continue with our own coverage of Ronald Reagan's 90th birthday.

We do want to talk about his political legacy with our guests. They are: Michael Deaver, former White House deputy chief of staff. And Martin Anderson, a former Reagan adviser and co-author of the new book, "Reagan in his Own Hand." And in New York, joining us, CNN senior analyst Jeff Greenfield.

Let me ask you all three. Did the country change as a result of Ronald Reagan having been president? Michael Deaver.

MICHAEL DEAVER, FORMER DEPUTY WHITE HOUSE CHIEF OF STAFF: I think so. We had been through Watergate and we had been through Vietnam and malaise of the Carter years and I think Reagan brought a greater confidence into to America that we hadn't had for a long time.

WOODRUFF: Jeff Greenfield?

JEFF GREENFIELD, CNN SENIOR ANALYST: I think that the psychology is different, and the politics were different. And I do think that when Bill Clinton said the era of big government is over, half through his eight years, that was the reflection of part of what Ronald Reagan had brought. I think he was both riding a wave and help make that wave bigger. Substantively, the government was no smaller when Reagan left, than when he came; the tax burden was not particularly lighter.

But I think, in terms of anybody thinking that there would be a major new federal government initiative, the power of Reagan's notion that government had grown too big, was a very important shift politically.

WOODRUFF: So Martin Anderson, was there a legacy of smaller government, if, as Jeff Greenfield says, government had not changed overall in size.

MARTIN ANDERSON, AUTHOR: No. Frankly, that was never Ronald Reagan's purpose. The legacy was best put forth in the "Washington Post" when they talked about, he had changed the agenda. If you look at the campaign of 2000, people are talking about rebuilding the military, missile defense and talking about cutting tax rates, talking about reforming Social Security. Those of all issues that Ronald Reagan introduced and pushed while he was president. And, I think as time goes on, his legacy is, in an interesting way, becoming even stronger.

WOODRUFF: Mike Deaver, was it clear to him from the beginning, from when he first ran for president, what he wanted to do as president?

DEAVER: Oh, I don't think that there was any question. I think that his primary goal was to get the Soviets to the table and end the nuclear war; and secondly, was to reduce the size of government and to expand freedom here in the United States, and to stop tyranny all over the globe. And those were his priorities and he stuck with them.

WOODRUFF: And in your mind, Mike Deaver, did he accomplish them?

DEAVER: Well, I think so. I think that the proof's in the pudding. We are enjoying an awful lot today, so far as the peace is concerned and the great economy that we have experienced as a result of many of the things that Reagan did. WOODRUFF: Jeff Greenfield, is it that straightforward, that Ronald Reagan got what he wanted?

GREENFIELD: I think what is straightforward is that he was more than most presidents, a president of the ideas, which a lot of his critics never understood. The 1980 election was, in my view, one of the most substantive political elections that we've had in recent memory.

And in that sense, I think that it's fair to say that he got a lot of what he wanted done. There are plenty of things we can talk about that weren't done, and certainly weren't done the right way. I mean, I believe he promised a balanced budget by 1983, if I remember, in his '80 campaign. That certainly, as James Baker acknowledged, didn't happen.

And there are people who will argue that the internal dynamics of the Soviet Union had a lot to do with its fall, but I must say, I think even now Democrats will acknowledge that what Reagan did in making a moral case for the West and say that the Soviet Union was going to collapse was a very important factor in what happened.

WOODRUFF: And Martin Anderson, to what extent, when we talk about his political legacy, was he able to accomplish what he did because of his skills as a communicator?

MARTIN ANDERSON, FORMER REAGAN ADVISER: No, I think one of the things that some of the new evidence that we have in this book called "Reagan, In His Own Hand," I think it confirms the point that Jeff just made, that Reagan was a man of ideas, and most of the writings in this book were done before he became president, especially in the 1970s. We found 670 major essays that he had written on every conceivable topic.

And if you go back and read in his own hand, in his own handwriting, what he was doing, and I hate to say this, but before the advisers got involved, you have to conclude that he basically wrote his own platform and discussed it with the American people before he ran for office.

WOODRUFF: Mike Deaver, what else is there about Ronald Reagan that probably people don't know or perhaps people don't know?

MIKE DEAVER, FORMER DEPUTY WHITE HOUSE CHIEF OF STAFF: Well, I think they know that he was his own man, that he was about as comfortable as any president we've ever had. In other words, he liked who he was. He didn't want to change. He wasn't about to change the hue of his clothes or the part in his hair. He liked himself the way he way.

I think one of the things that would be a surprise to most Americans is that he was basically a shy person. The great communicator was basically shy.

WOODRUFF: And that being the case, Jeff, how do we explain his skills as the great communicator? GREENFIELD: Well, I'll tell you, I think what is often overlooked, although Lou Cannon (ph) makes a lot of this in his terrific biography, Reagan's years when he was working in General Electric -- we know him as a television talk show -- or a television host.

Part of his job was to go out and gives speeches and answer questions in factories all over America, and I think while most politicians spend their rhetorical lives in Washington where English is a foreign language, Reagan spent a lot of his formative years talking with regular folks, paid by the hour who worked with their hands, and I think his gift for rhetoric, his gift for language was not a product of his speechwriters.

I remember in 1980 watching his acceptance speech as a then- younger analyst and he was editing the speech as he gave it. I also think the fact that he grew up in radio meant he had a gift for words spoken for the ear. He was very much not a sound-bite kind of communicator. He thought in more formal rhetorical terms and it did him a lot of good.

And if I can just add one thing, before we overlook this, what Ronald Reagan did in the Republican Party may be one of his great legacies. He is to the Republicans now what FDR was to the Democrats.

WOODRUFF: Meaning?

GREENFIELD: Meaning that you cannot run for office as a Republican without paying tribute to the legacy of Ronald Reagan. There are no un-Reagan Republicans just as for decades there were no un-Roosevelt Democrats.

WOODRUFF: Mike Deaver, was he a politician in the sense that we normally think?

DEAVER: Well, I think he was very gifted. I think one of the things that Jeff just hit one which was in the Lou Cannon book is this business about listening. He was a big listener. I remember -- I think that one of the skills that he developed for politics was going out for General Electric and having that dialogue with employees all over the country.

And early on in his political career, Richard Nixon gave him a piece of advice and said, you know, when you're doing all of these Republican fund-raising dinners, go up to your room and eat your dinner alone, and then come down, save yourself for the speech. Reagan said, no, no, no. I want to be down there in the room. I want to see the people. I want to have them come up to me during dinner and talk to me. I want to get a feel for it. He got a feel for America the same way, and that came through.



WOODRUFF: We are going to have to interrupt, gentlemen, because Ariel Sharon, the apparent winner in the Israeli race for prime minister, is about to speak to his supporters in Tel Aviv.

UNIDENTIFIED MALE (through translator): ... was one of the leaders of the this landslide victory, MK Silvan Shalom; chairman of the Shas movement, Eli Yishai; chairman of the Gesher movement, MK David Levi.

UNIDENTIFIED FEMALE: The commentator points out that some people are happier than others. They're all happy. Some are happier during the thin times, the lean times when no one thought that Ariel Sharon would become leader, and I'm referring here particularly to (UNINTELLIGIBLE) who was eulogized as being a political has-been until very recently and see how much is acclaimed here.

The person who was the real driving force behind this whole campaign, -- he's being totally praised here.

WOODRUFF: This is -- Ariel Sharon is not speaking yet. This is another official in his party introducing supporters. We're going to take a break here and ask our guest in the Ronald Reagan discussion to forgive us for breaking in. But we want to thank them, Mark Deaver, Martin Anderson, Jeff Greenfield for talking about the legacy of Ronald Reagan. And we'll be back with more coverage of the Israeli election in just a moment.


WOODRUFF: The celebration at Ariel Sharon's victory. The Israeli prime minister election is continuing, and it looks like Sharon -- General Sharon stepping up to the microphone.


UNIDENTIFIED MALE (through translator): ... has fought many, many, many battles and campaigns, and he now reaches the moment that he himself never thought he'd reach. And during this speech, he intends to thank those who have stood by his side throughout his entire path, and he wants to thank his late wife, Lili Sharon, who wasn't able to see this moment. And the last two minutes of his speech, he's going to devote to his late wife, Lili.

ARIEL SHARON, ISRAELI PRIME MINISTER-ELECT: Good evening, and a wonderful evening to all of you.


My friends -- Silvan Shalom, chairman of my headquarters, and Reuven Rivlin, chairman of the Parliamentary Party, the faction; all members of Knesset from this large camp who are sitting here, people from the Likud and all the other parties. MK Eli Yishai, Shas; MK Natan Sharansky; MK Avig Liberman; MK (UNINTELLIGIBLE) Levy; Rabbi Menachem Polsh (ph) and Rabbi Meir Polsh (ph), two generations. Michael Kleiner (ph). My friend for many years, David Levy, and mayor of Jerusalem, Ehud Olmert. Together with you we have reached this wonderful point, and made this marvelous achievement.

I want to say that a few moments before I came into the hall, when I was already in the building, the president of the United States, President Bush, called me, and asked me to present his best wishes to you. He told me that they want to cooperate very closely with the government under my leadership.

And he reminded me of the trip I took with him through Samaria and the Jordan Valley. And at that time, he said to me, "No one believed then," he said, "that I would be president and you would be prime minister. But as things turned out, despite the fact that no one believed us," he said, "I have been elected president, and you have been elected prime minister."


SHARON (through translator): Citizens of Israel, my colleagues from various parties, today the state of Israel has embarked on a new path, a path of domestic unity and harmony, of striving for security and a real genuine peace.

I would like to thank every single one of you for your support, for your involvement, for your devotion, for your hard work. It's as a result of your work and this great confidence that you have shown in me and the thousands and thousands of individual activists throughout Israel that we have achieved this great victory. We have achieved this moment, and we thank you from the bottom of our heart.

This night is a very moving night. It's one of great significance for me.

From the very earliest days, I have entirely devote myself to the country to consolidating its security and building it up. In all of my possessions, in all moments, whether hard or happy, I was accompanied by my dear wife, Lili, who supported me wholeheartedly. At this moment, when the Israeli people have expressed their confidence in me to lead the country in the next few years, Lili is not with me anymore, and I miss her. She's not with me here.

I want, this evening, to thank every single one of Israel's citizens who have expressed their confidence in me. I shall do everything in order to succeed in this mission that you have consigned to me.

This is the state of all of us, and all of us have a joint future and a single destiny. In the course of the years, divisions, incisions in our people and society have proliferated. Baseless hatred and fury have multiplied. The time now has come to seek for as wide-based unity and agreement as possible. There is a deep-felt desire among the people to stand firmly together in dealing with the challenges of the future. I call now for the establishment of as wide a government of national unity as possible.

And I here turn to the Labor Party and call upon it to join us in a partnership in pursuing the difficult path towards security and peace.

(APPLAUSE) SHARON (through translator): Citizens of Israel, today you have called upon me to lead you as prime minister of Israel, and to succeed in the mission you have conferred upon me. I shall, to do this, need the confidence of the Knesset, and the maximum support of its members. We live in a parliamentary system in which the government functions on the basis of a parliamentary majority. As prime minister...


SHARON (through translator): ... as prime minister, I will act responsibly and with respect to the parliament, to the Knesset, and with regard to all members of the house. The government, under my leadership, will act to implement the rule of law, and to maintain the independence of the judicial system, which is one of the pillars of maintaining a democratic system.

Citizens of Israel, the government, under my leadership, will act to restore security to the citizens of Israel, and to achieve a genuine peace and stability in the area.

I'm aware of the fact that peace requires painful compromises by both sides. Any and every political arrangement will be based on security for all peoples of the region. I call upon our Palestinian neighbors to cast off the path of violence and to return to the path of dialogue and solving the conflicts between us by peaceful means.

The government, under my leadership, will act to achieve genuine political settlements that will preserve the existential and historic needs of Israel, which will be based on mutual respect and mutual security.

We shall act to achieve more profound reciprocal relationships with our great friend and our ally the United States. And we shall strive to achieve closer ties between the state of Israel and the countries of the world.

In Israeli society, there are many areas of distress with which I am familiar. We will do everything we can to wipe these out. A people cannot exist if there is no social solidarity. We shall act to reduce the social gaps and to achieve equality of opportunity to everybody.

We will turn over a new leaf in our relationships with our Israeli Arab citizens in order to achieve a genuine partnership and a feeling of equality between all citizens of the country.

The government, under my leadership, will fly the social flag side-by-side with the flag of security and peace, and we will be greatly supporting the value of education.


SHARON (through translator): And above both flags, there will be the flag of Zionism, the flag of national honor, immigration and settlement. The government, which I shall set up will strive to strengthen and consolidate united Jerusalem, the capital of Israel, and the eternal capital of the Jewish people; to which we always turn, saying, "If I forget thee, oh Jerusalem, may my right hand forget its coming. May my tongue cleave to the roof of my mouth if I do not remember you, if I do not make Jerusalem the chief of my joys."


SHARON (through translator): The government, under my leadership...


SHARON (through translator): The government, under my leadership, will act to achieve constant economic growth, and in this way, we will create new employment possibilities and reduce unemployment. We will maintain price stability and prevent inflation.

We will ensure that we act responsibly in the economic area, without increasing any deficit. And at the same time, we will invest in infrastructure and education. We will reduce the tax burdens on Israeli citizens. We will maintain the principles of a modern, open economy, based on competition and integration in the world economy.

To achieve these goals, it is my intention to establish an economic cabinet, which I shall head.

Citizens of Israel, we have a small country which is blessed with talents and has achieved greatly. Let us join forces as one single body, with one single heart, setting out on a new path. Together, we will be ready to face all the challenges confronting us. Together, we will be able to realize all of our hopes and our dreams.

Thank you.


UNIDENTIFIED FEMALE: Ariel Sharon, says the commentator, completes his speech and is presented with a bouquet and maintenance of the rule of law is a very important message which he hasn't yet referred to.

AMANPOUR: That was the prime minister-elect, Ariel Sharon, Israel's new prime minister giving his victory speech in Hebrew to a domestic audience. We understand that in about half an hour from now, he will give another speech in English for the benefit of the international community, and we hope to bring that you as well.

Here he spent quite a lot of time thanking his party supporters, thanking the people of Israel for bringing him to the position of prime minister. He spoke about his wife, Lili, who is no longer here. He said she has stood by him throughout his entire career, and at this moment when he reached the pinnacle of power in Israel, she was not here and he said that he missed here.

He spoke quite a lot about the divisiveness, as he sees it, within Israeli society. He said that he wanted to have a national unity government, the widest possible. he called on the Palestinians to resume negotiations and follow a peace process through dialogue and not through violence, as he put it. And he talked and got his biggest line of applause about Jerusalem, vowing to keep it the united capital, eternally undivided as he put, it the capital of the Jewish state.

Joining me now here at our platform in Tel Aviv, Chemi Shalev. What did you get that from that speech? It wasn't a very flamboyant speech, if I could say. It seemed very low-key. He didn't look that happy, even?

CHEMI SHALEV, POLITICAL ANALYST: No, he didn't look that happy. Perhaps the weight of the responsibility which is now on him hit him in the moments before the speech. This was a carefully planned speech, aimed at the Israeli consensus. There is nothing that even Mr. Sharon's opponents could find objectionable in the things that he said. It was a sort of motherhood and apple pie, from an Israeli point of view, and it leaves room to wonder where Mr. Sharon is headed.

Obviously, at least until now, he wants to avoid inflammatory rhetoric. he wants to move towards the center. He will try to establish a national unity government, as he said. It's not likely that he'll find that easy because of the internal turmoil inside of the Labor Party and because, ultimately, they'll have to get down to the brass tacks of the peace process and there it might turn out that Labor and Likud don't have anything in common.

AMANPOUR: Chemi Shalev, we're going to go now to CNN's Jerrold Kessel at the Likud Party headquarters where he has been all night.

Jerrold, what was the atmosphere as Ariel Sharon was giving his speech?

JERROLD KESSEL, CNN CORRESPONDENT: I think, Christiane, above all, as the national anthem goes on now, that what one got out of the speech was the dissonance between the way Mr. Sharon was projecting his opinions and the way he said he would put Israel on a new path in the future, that it had set out a new path this evening, and what the crowd here were applauding. In other words, what the majority of Israelis had voted for.

They applauded most loudly when he said he would bring them personal security. But his three watch words of unity, security, and a different kind of peace process, including as he rightly pointed out, a totally united Jerusalem under Israel, seems difficult to imagine how he can carry that out while at the same time not running into obstacles.

Tonight, I think you saw Ariel Sharon coming to grips with the fact that he may have to be a very pragmatic kind of prime minister if he's to succeed in achieving any of those the watch words of unity, security and a different peace process. They may be on collision course -- Christiane.

AMANPOUR: Jerrold, thank you. Let's go now to Mike Hanna who's at a very empty, very subdued Labor Party headquarters. Mike, when we heard Prime Minister Barak, the defeated prime minister, give his concession speech, he gave a really feisty speech, and almost as an afterthought said, and by the way, I'm resigning as Labor Party leader.

MIKE HANNA, CNN CORRESPONDENT: Well, it does appear that that decision was made at the very last moment. The size of his defeat was a crushing blow to the supporters of the Labor Party. They had been hoping for at least a defeat with some honor, but an greater shock was the news of his resignation, announcing resignation as member of the Knesset, or parliament, and as leader of the Labor Party.

All the delegates here, the Labor Party members, were clearly caught off guard. They were clearly deeply surprised by the decision, and it does appear that this decision was made, as his critics have contended that so many decision were made while he was prime minister, with the minimum of consultation -- Christiane.

AMANPOUR: Mike, thank you very much. As we heard Ariel Sharon start his victory speech, he said that as he was coming up to the platform, he had received a telephone call from the president of the United States, George W. Bush.

We go now to CNN's John King at the White House for reaction from there -- John.

KING: Well, Christiane, we are told that was a five-minute conversation, largely a congratulatory call from President Bush to the incoming prime minister, Ariel Sharon. The White House has released a brief statement. Let me read from it.

Quote: "The president told Prime Minister-elect Sharon he looked forward to working with him, especially with regard to advancing peace and stability in the region. The United States has worked with every leader of Israel since its creation in 1948. Our bilateral relationship is rock solid, as is the U.S. commitment to Israel's security."

The statement goes on as well to thank the outgoing Prime Minister Ehud Barak for his friendship with the United States, and his commitment to peace, and we're told by senior Bush administration officials to expect a call from the president to Mr. Barak, most likely tomorrow.

As for the U.S. policy from here on out, they say the United States obviously remains engaged with Israel in the region, looks forward to the resumption of the peace talks, but they believe the best posture for Washington to take right now is to step back, give Mr. Sharon a chance to build a government.

Many questions here in Washington, as well as in Israel and throughout the region, will he be successful in forming a unity government? What will the reaction of the Palestinians be?

Until those questions are answered, the United States saying its best position right now is simply to offer its support to the state of Israel, step back, and wait and see. We do know Secretary of State Colin Powell plans to visit Israel and other nations in the region, but before the end of the month -- Christiane.

AMANPOUR: John, thank you. And clearly, the rest of the world and, indeed, the Israeli people are waiting to see which direction peace takes. Will there be security? Will Ariel Sharon be able to deliver on what he says and that is to demand and to get security on the streets and in the territories before he manages to make any further progress on the peace process.

We'll be watching. So will the rest of the world. So will the Palestinian, the Arab neighbors and the Israeli people. That concludes our coverage for the moment. We'll be here for the rest of the evening with all the developments as they come in.

As I say, we expect another speech from Ariel Sharon, this time directed at the international press and the international community. We'll bring that when he delivers it. I'm Christiane Amanpour from Tel Aviv.


SHAW: In New York today, Al Gore began his gig lecturing at Columbia University's School of Journalism, but his students may have gotten some lessons by watching him in action outside the classroom. Lesson one, the photo-op. The former vice president alerting the news media when and where he would arrive on campus. Lesson two, look the part. He wore this professorial sweater and sports coat. Lesson three, a reminder that even former presidential candidates may try to finesse questions from those reporters.


AL GORE, FRM. VICE PRESIDENT OF THE UNITED STATES: I feel great about it. I'm very excited about it. I'm looking forward to it.

QUESTION: Mr. Gore, why won't you allow reporters inside?

GORE: It's the school's policy.

QUESTION: Would you invite us in if it was up to you?


QUESTION: You can change the policy. You can let us in today.

GORE: I'm new here. That's above my pay grade. Thank you.


SHAW: This evening, Gore turns his attention to more corporate pursuits. He's going to give a speech on health care to PaineWebber clients, reportedly for a fee of $75,000.

WOODRUFF: A new book,"Reagan, In His Own Hand," co-authored by our earlier guest on INSIDE POLITICS, Martin Anderson, the book contains a collection of Ronald Reagan's radio broadcasts and speeches. Between his time as governor of California until he became president, Reagan made his living speaking to audiences.

As Bruce Morton reports, it is a skill that helped him to deliver his conservative message on the campaign trail and in the White House.


BRUCE MORTON, CNN CORRESPONDENT (voice-over): The book's subtitle talks about Reagan's "revolutionary vision" for America, but the speeches and broadcasts reveal a conventional conservative for less government; lower taxes; for containing the Soviet Union, a policy which presidents of both parties had followed since the end of World War II.

Barry Goldwater, in 1964, had shown that conservatism had broad appeal within the Republican Party when he defeated Eastern moderate Nelson Rockefeller for the nomination. But the broadcasts also show the warmth and optimism which made Reagan so successful.

This is from "Looking Out a Window," a radio broadcast about the people, the Americans, he saw from his hotel room while on a speaking tour.


RONALD REAGAN, FRM. PRESIDENT OF THE UNITED STATES: They are not "the masses," or as the elitists would have it, "the common man." They are very uncommon. Individuals, each with his or her own hopes and dreams, plans and problems, and the kind of quiet courage that makes this whole country run better than just about any other place on Earth.



REAGAN: Thank you all, and God bless you.


MORTON: He spoke softly, warmly. When he said things like this:


REAGAN: Mr. Gorbachev, tear down this wall.


MORTON: They sounded less extreme than if someone else had said them. The speeches and broadcasts are evidence, if more was needed, that Reagan wasn't dumb, that he chose his issues and knew what he wanted to run on. But nobody with that many one-liners could have been dumb anyway.

The wounded president, wheeled into the hospital, saying he hoped the doctors were Republicans; the president, seeming to start his radio broadcast from the White House one week by saying:


REAGAN: We begin bombing in five minutes.


MORTON: Just a joke, of course. Or the candidate, back in 1980, at a Nashua, New Hampshire debate with George Bush, who'd won the Iowa caucuses, and the other candidates saying, "Can't we play, too?" Reagan's campaign had paid to put on the debate, though a local newspaper was the official sponsor.


UNIDENTIFIED MALE: Will the sound man please turn Mr. Reagan's mike off?


REAGAN: Is this on? Mr. Green, you asked for me -- I am paying for this microphone, Mr. Green.


MORTON: The line was originally Spencer Tracy's in a movie called "State of the Union," but Reagan got a lot more mileage out of it. Won New Hampshire and never looked back. Former House Speaker Newt Gingrich said once, "We are all Ronald Reagan's children," and in a sense that's true. Reagan didn't invent conservatism, but he made it warm and human and popular, and the movement and the Republican Party down to the present day and the new president, are in his debt.

Bruce Morton, CNN, Washington.


WOODRUFF: And we will keep on talking about him for a long time to come. That's all for this edition of INSIDE POLITICS.

SHAW: And this reminder, please: Tonight on "LARRY KING LIVE," a conversation with Nancy Reagan on the occasion of former President Reagan's 90th birthday. That's at 9:00 p.m. Eastern. I'm Bernard Shaw.

WOODRUFF: And I'm Judy Woodruff. "MONEYLINE" is next.



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