Inside Politics

Bush's Income Tax-Cut Bill Passes House of Representatives

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

ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff.

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UNIDENTIFIED MALE: This is the Bush's "best beans" tax cut, and that's all that it amounts to.

UNIDENTIFIED MALE: Anxiously await creating a larger tax cut so the gentleman can add to the canned beans something he is quite familiar with, canned ham.

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ANNOUNCER: Food for thought on the Bush tax cut plan, on this day of sniping and voting in the House.

Still under scrutiny after a scandal, Jesse Jackson defends his financial records.

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SEN. JEAN CARNAHAN (D), MISSOURI: Some days I feel like I take one or two steps forward, and some times I take one or two steps back.

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ANNOUNCER: Senator Jean Carnahan talks to us about her personal and political journey.

Now, Judy Woodruff takes you INSIDE POLITICS.

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. The Republican majority in the House is preparing to hand President Bush his first major victory in Congress. Members are nearing a vote on a major portion of Mr. Bush's tax cut plan, that is expected to pass largely along party lines.

Our Kate Snow is covering the House vote, and our Jonathan Karl is looking ahead to the battle in the Senate.

First to you, Kate.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: Well, Judy, things are really rolling along in the House of Representatives this afternoon. They've spent most of the afternoon debating the tax cut bill. And right now they're in the midst of a vote on the Democratic alternative, that, of course, a smaller tax cut proposed by Democrats. We do not expect that that will get very far. They don't simply have the votes to pass that alternative. After they finish with this, then they'll move onto voting on the Republican version of the bill, which of course, is the first part of President Bush's large $1.6 trillion tax cut.

And within the last half hour, Judy, we've heard from the two leaders in the House, House Speaker Dennis Hastert speaking just a few minutes ago, telling his colleagues that he thinks it's time for a tax cut, that this is the right thing to do for the American people. He's also trying to convince some Democrats to come aboard. He said, I know some of you want to be for a tax cut, but you think the politics is holding you back. He said, Well, I encourage you to leave the politics behind and vote with us on this one.

Just before that, House Minority Leader Richard Gephardt with a different point of view, telling his colleagues, encouraging them to vote for that Democratic alternative, and saying that the Republican tax cut, as many Democrats have said along today, is simply too risky.

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SNOW (voice-over): On the House floor, Democrats comparing the projected surplus to a snowy weather forecast.

REP. JERRY KLECZKA (D), WISCONSIN: How many of you would plan a vacation based on a 10-year weather forecast?

REP. WILLIAM THOMAS (R), CALIFORNIA: Everyone talks about the weather but no one can do anything about it. This is tax reduction; we can do something about it.

SNOW: The Republican bill provides $958 billion in tax cuts over 10 years. The five current tax rates are reduced to four smaller ones by the year 2006. The lowest drops to 10 percent. The highest goes down to 33 percent.

Republicans say the bill will help real Americans, so they invited a few to Capitol Hill to illustrate their point, from construction workers, to a bilingual teacher.

REP. RICHARD ARMEY (R-TX), MAJORITY LEADER: We are doing a good thing for America. We'd like to see Republicans and Democrats do it together. Democrats decided they don't want to work with us on this. There is an old line from a Hoyt Axton song: "I am going to heaven in a flash of fire with or without you." We are cutting these taxes with or without the Democrats.

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: The American people want us to work together in the middle to get things done. But I must say, with all due respect, that this tax cut bill, coming without a budget, is another "my way or the highway" approach to legislating in this Congress. SNOW: Democrats aren't hiding their anger. They say Republicans are ramming through the tax cut. The so-called Blue Dog Democrats used procedural tactics to delay the vote, and show their disapproval.

REP. JIM TURNER (D), TEXAS: It is important to have a budget first. Democrats want the largest tax cut we can afford. But how in the world do you know how large a tax cut you can afford until you first go through a budget process?

SNOW: But in the end, some of the Blue Dogs will support President Bush, giving him an easy win in the House. One of them: Congressman Collin Peterson of Minnesota.

REP. COLLIN PETERSON (D), MINNESOTA: There is no question about it. This is -- for Democrats especially, this is a no-win deal: if you vote for it, you will catch heck from certain people, and if you vote against it, you will catch heck from other people. But I caution people to think that we're at the beginning of this.

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SNOW: Collin Peterson saying, look, there are going to be many more votes on different areas of tax relief, on marriage penalty, on the estate tax. He says, he's probably going to withhold judgment, but he may not support those other areas of the Republican plan. He simply wants to support this initial Bush bill. Judy, back to you.

WOODRUFF: All right, Kate, we want you to stand by, and now we want to go over to the Senate, and Jonathan Karl.

Jonathan, we know the House -- it looks like the president is going to win there; what's going to happen when this goes to the Senate?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well. Judy, over in the House, of course, the Republicans have that narrow majority and it's enough to get their way on taxes. But over here in this 50-50 Senate, the Republican hold on power is much more tenuous, and the fate of the president's tax cut plan is much more uncertain.

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KARL (voice-over): As the House charges ahead with tax cuts, Democrats in the Senate are warning Republicans to keep their champagne on ice for a while.

SEN. MAX BAUCUS (D), MONTANA: This bill's going to be written in the Senate; not in the House, but the Senate. It may be March madness over in the House, but there's no slam dunk in the Senate on this tax bill.

KARL: Simply put, the pace is much slower in the Senate, where the razor-thin Republican majority doesn't have the votes yet to pass the Bush tax plan.

SEN. TRENT LOTT (R), MAJORITY LEADER: It won't be easy. We'll have disagreements as to how to do it, and how much to do it. But my goal is always to seek to find a way to get it done.

SEN. TOM DASCHLE (D), MINORITY LEADER: They will not be able to pass the bill in its current form unless something dramatic changes, and I don't expect that it will.

KARL: The change, moderates in both parties are talking about, is a so-called "trigger" that would scale back the tax cuts if projected surpluses don't emerge.

Republicans may be more interested in an idea put forth by Nebraska's Ben Nelson, a freshman Democrat who says he'd like to vote for a big tax cut this year.

SEN. BEN NELSON (D), NEBRASKA: You have to be sure that spending is under control. And that's why I've supported having a mechanism called a "circuit breaker."

KARL: With Nelson's "circuit breaker" idea, if projected surpluses don't emerge, Congress would come back and not necessarily raise taxes, but cut spending. This so-called circuit breaker would also allow the tax cut to be phased in more quickly if surpluses are bigger than expected. It's an idea some Republicans like more than the trigger.

SEN. KAY BAILEY HUTCHISON (R), TEXAS: I like the idea of a "circuit breaker," that would have a freeze on spending if it looked like we going over the caps.

KARL: Under pressure in the Senate are moderate Democrats up for re-election, like Louisiana's Mary Landrieu, one of the targets of a pro-Bush radio campaign from the issues management center, featuring the words of John F. Kennedy and Steve Forbes.

STEVE FORBES, PUBLISHER: If Democrat Jack Kennedy could support a tax cut in 1962, then Democrat Mary Landrieu can support a tax cut today.

KARL: Another conservative group is targeting Democrats in Republican majority states like South Dakota and Montana.

UNIDENTIFIED MALE: Call Senators Max Baucus right now, at 202- 224-2651. Ask him be a hero and support President Bush's bipartisan tax-cut plan.

KARL: In a strike back at this, and President Bush's visit to South Dakota, Democratic leader Tom Daschle is running his own ads in his home state.

DASCHLE: We should work together for real tax relief that's responsible and fair.

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KARL: Over here in the slow-moving Senate, there may be plenty of time for Republicans to craft a compromise that would get them the votes they need to pass a big tax cut. That's because over here, Judy, They are not -- we are not expected to see our first vote on a tax cut until May at very earliest -- Judy.

WOODRUFF: And it'll come along in a different form. Jonathan, we want to you stick around for just a second.

And Kate Snow, back to you. Why is it that Republicans in the House wanted to rush this through as Democrats charge them with doing?

SNOW: They don't put it that way, Judy. They will tell you that,"Look, tax relief is needed right now." The economy's not doing so well. They think it's taking a turn potentially for the worse.

The president came up here to Capitol Hill just last week and said, "Get this done quickly." So they're listening to the president. Not that they're taking orders from him, but that they appreciate his point of view, and they think he's right. They think this needed to be done quickly. They needed to get these rate cuts in place.

And, by the way, part of this bill is retroactive. So, if it gets in place by this summer, let's say, it would actually affect everyone's taxes retroactively to January 1.

WOODRUFF: And Jon Karl, to you. The president traveling around different states today. He's in the Dakotas. Is this sort of campaigning among the people going to affect votes in the Senate?

KARL: Well, you have a number of Democrats in states that Bush carried by very big margins. I mean, look at the Dakotas. You actually have four Democrats from two states that Bush carried quite handily in the election. So, they're hoping some of this pressure will work. I don't know if it's going to have much of an impact in the Dakotas.

I've been talking to each of those senators virtually every day about where they stand on this. They don't seem be to too concerned about what the president's doing, but they are looking at their own reelection campaigns next year, those up for reelection. And there are six Democratic senators that are up for reelection from states that Bush carried last year in the election. So you can be sure they'll be listening very closely to their constituents and eying what kind of, you know, what questions they'll have to answer when their up for reelection next year.

WOODRUFF: All right. John Karl in the Senate. Kate Snow at the House. Thank you very much, both of you.

And we are joined now by the House majority leader, Dick Armey.

Representative Armey, we understand now that the Democratic alternative has failed. Can you tell us the vote?

ARMEY: Well, I don't know the final vote. I do know that we are anticipating 10 Democrats or so to vote with us on our final passage of the bill itself.

We're going through another in a series of parliamentary votes as we speak, but we should be able to move on to that vote in just a few minutes, and we will have passed the first of several parts of the president's tax bill.

And Judy, what we're doing here is getting this train rolling early. We realize we've got to pull it through the Senate someplace along the way, hopefully by the early part of July, and then put the whole thing together and send it on to the president.

WOODRUFF: Mr. Armey, we know that in the early 1980s when Ronald Reagan -- President Reagan was pushing through tax cuts and budget cuts, the first go-around had something like 50 Democrats with him on the tax cut -- or on the budget plan, more than 60 Democrats with him on tax cut proposal.

Why is this president having a harder time getting Democrats on board?

ARMEY: Well, one of the things you always have to keep in mind is that, one, we have a smaller majority in the House than we had at that time, and so there are fewer Democrats from which to pick, and then finally you have to understand that, quite frankly, the "Blue Dog," or conservative Democrat population has shrunk enormously since the early '80s.

Those Democrats that have remained in the party -- those seats that have remained on the Democratic side of the aisle -- have tended to be more liberal, and the conservative Democrats, mostly Southern Democrats that you saw in such large numbers in the early '80s, are just frankly not there now, we are down to around 10 or so of those.

WOODRUFF: Well, speaking of those "Blue Dog" Democrats, Mr. Armey, what do you say to those who say that this has been rushed through, there hasn't been -- they wanted to a budget first, they wanted committee hearings, and some of them are saying the president has squandered an opportunity to have bipartisanship here?

ARMEY: Well, I really don't feel like they've got an argument here. There were hearings on this bill. We've talked about this for a long time. The president's budget proposal is $1.6 trillion...

WOODRUFF: For a long time? You mean -- what do you mean?

ARMEY: Reducing taxes, reducing tax rates. Remember, we've just been through two years of presidential vetoes on just about everything that you see in this package of the presidential recommendations.

So most of this is not new to the processes of the House and the Senate. And the fact of the matter is, we're well within what everybody knows will be the budget number for tax relief in both the House, the Senate, the budget and the president's budget -- $1.6 trillion.

So, as we move the separate pieces, we are aware we will not put them all together until we get to budget reconciliation after the budget has passed both the House and the Senate. I believe this is just a delaying tactic and tactic to express their dismay and their overall reluctance to lower taxes. WOODRUFF: Let me ask you about something your Republican colleague, Representative Ray LaHood of Illinois said. He said that if it were up to him, things would have been done differently. And I'm quoting, he said: "This is not the way to build a good esprit de corps."

ARMEY: Well, you know, everybody has to take care of their highest priorities. Ray has taken on an enormous step forward in trying to improve across-the-aisle relations between Democrats and Republicans, that is his highest priority. Our highest priority in the leadership team is to get this train moving, to start this process of reducing taxes, signal to America that help is on the way, see the economic impact begin to manifest itself in the lives of the American people, and just get the thing done as early as we can in the year.

The earlier you get started, the sooner you can pull it all together. So, I appreciate Ray's priority, it just isn't the priority that has driven these decisions.

WOODRUFF: Let me also ask you about a comment from Democratic conservative, Democratic Senator John Breaux, who said that this first piece of the tax cut, in his words, has united the Democrats in the House in a way that House leader -- House minority leader Gephardt could only dream of?

ARMEY: Well, that may be. The vast majority of the Democrats do not want to lower taxes or give tax relief at all. We have some Democrats that want to.

There is always a sense of commitment to one's own caucus, we see that in our side of the aisle as well. If we have a large contingent of our people that don't feel they are being treated right, almost all of us would rally around that even if we'd happened to disagree on the point in question, because we stick up for one another. It's a natural thing, and you have to appreciate that.

WOODRUFF: So, when you say you think -- did I understand you correctly, you said most Democrats you don't think want any tax relief at all? That's not what they're saying on the floor. Are you saying they don't take them at their word or what?

ARMEY: No, I don't. I take them at their vote. If you look at the Democratic party, they've been voting against tax reduction for as long as I can remember during the period of time we were in the majority, and we got tax relief bills to the floor.

WOODRUFF: But aren't they saying they're willing to go to $800, $900 billion, they're just not willing to go to $1.6 trillion?

ARMEY: I would just say -- two years ago, it was $700-and-some- $900 billion. They thought that was too high. Today, they've come back with a number higher that is higher than that, which is what they might be willing to be for, but I guarantee you that if we had brought that number to the floor, it would have been too high.

I've been through it too many times with them, Judy. I understand who they are. I understand what they're saying. They don't want to raise taxes, they think doing so denies the government that money which they would rather put into a government spending scheme, that's their priority, it's always been, and we understand that. We don't necessarily argue against the right to hold that priority, but we don't think it's a priority shared by the American people.

WOODRUFF: Finally, Mr. Armey. There seemed to me to be -- I was listening to a good bit of the debate on the floor today. There seemed to me to be a fair amount of rancor in the voices of members on both sides of the aisle. Do you agree with what -- am I reading that wrong? What do you think?

ARMEY: I think there is. I think politics in America today has been -- and is -- too polarizing. That spills over into such things as the floor debates.

I'd like to see us all get over that process. They have a point of view, we have a point of view. Let's express that. Let's try to have a little fun.

I try to go on my three minutes on the floor and have a little fun while I made my points, I hope it was somewhat engaging, and I hope the points were well made. But I think we just all need to understand that this is a good time for us to just sort of get focused on our work, get our hearts right for the American people, and forget about any animosity we may have borne out of our political adversaries.

WOODRUFF: House majority leader Dick Armey, we thank you very much for joining us. We appreciate it.

ARMEY: Thank you.

WOODRUFF: Thanks.

And now, we're joined by a Senate Democrat, Evan Bayh of Indiana, to look ahead to the next big tax cut vote, which may be another couple of months away.

Senator Bayh, thank you for being with us.

SEN. EVAN BAYH (D), INDIANA: Thank you, Judy.

WOODRUFF: Senator, when you hear Majority Leader Armey say he doesn't believe most Democrats are really for tax cuts, how do you respond?

BAYH: Well, that's just not true, Judy. I can speak for myself -- and the majority of my colleagues I've spoken with, we're for a substantial tax cut.

We want to make sure that it's fiscally responsible, and we don't go back to the days of debt and deficit. We'd also like to make sure that it's fair and make sure that it's not disproportionately skewed toward one part of the tax-paying public versus another. And we'd also like to make sure that it's balanced, making room for education and some assistance for senior citizens, but I think we've got plenty of room for a very substantial tax cut, and we should have one.

WOODRUFF: But perhaps you heard him, he said, look, I've been through this for years and years, we've been around and around on this issue, and he said Democrats just don't support tax cuts in a significant enough size?

BAYH: Judy, I will guarantee you that if the president of the United States and Congressman Armey present us with a proposal that is fiscally responsible, that's fair, and that is balanced, we'll vote for it.

WOODRUFF: If President Bush comes out of the House, Senator, by -- as he's expected to -- winning on this portion, this first major piece of his tax cut plan. He's out on the road, selling it around the country, what is to stop him from wearing down Democrats in the Senate?

BAYH: Well, this isn't a physical endurance contest, Judy. It's a challenge of doing what's right for our country. And we support the president's call for a significant tax cut for everyone in our country who pays taxes, and the magnitude of this tax cut for the next year or two is probably fine.

It's in the out years, seven, eight, nine, 10 years from now, I think most of the American people understand that predicting something this important over that period of time is very difficult to do. We shouldn't run the risks of running up the debts and deficit, because in the long run, that's bad for the economy.

So, Judy, it's a question here of fiscal stimulus today to help get this economy going, but not going back to higher interest rates, slow growth in the long run. Good short-run economic policy, but also remembering what helped us grow the economy in the long run the last eight years.

WOODRUFF: Senator, why shouldn't the Senate move -- at least move more quickly to consider this? It's not just Representative Armey, but a number of Republicans today were saying the American people want tax relief. They want it now. Why delay?

BAYH: Well, we need to make sure we get it right, Judy. We need to move as quickly as possible, but the president hasn't submitted the budget, the Congress doesn't have a budget in its entirety, and we need to make sure that this fits in with the other priorities as a country that we have.

So, I don't think -- I speak for myself, and I think for a majority of my colleagues, when I say we should move as quickly as possible to give tax relief -- substantial tax relief to the American people, everyone who pays taxes, and do it in a way that's prudent and responsible.

WOODRUFF: Let me quote to you, Senator, something that the White House put out today. They said, "The share of income tax relief under the president's plan provided to families with incomes under $100,000 a year is larger than their share of current income taxes paid. So, those Americans," this is what the White House is saying, "will pay a smaller share of the total income tax burden under the president's plan than they do under current law."

In other words, it's those people, middle-income Americans who will benefit the most.

BAYH: Well, Judy, there's a lot of gamesmanship going on with numbers around here. And I'm sure your viewers at home kind of have their eyes glaze over when they hear one set of statistics used by one side and the other. When you deal in percentages...

WOODRUFF: Is that what you're saying it is, just gamesmanship?

BAYH: Well, I'm saying, the old saying, that you can use statistics to prove about anything, is true. When you use percentages, the president's argument is right. But when you use aggregate numbers, the amount of money -- your average family at home trying to make ends meet, pay the mortgage, the car payment, send their kids to school, doesn't use percentages. They have to use cash dollars to pay their bills.

So, the president gives them more in percentages, but we'd like to give them more cash money in their pockets to actually meet the obligations that they have. That, after all, is what tax relief is all about. And our approach does more of that for working class middle-income Americans.

If I could just get back to your previous question about timing, Judy. I think we need to move expeditiously, but one final point I'd like to make, these are decisions that are going to affect our country for the next 10 years. They're going to affect Americans in a very profound way or our economy in a profound way. So we need to move quickly, yes, but we need to take whatever time it takes to make sure we get it right.

WOODRUFF: Senator, I want to ask you, just quickly. The last question I asked Representative Armey was about the rancor that I seemed to sense in the voices of members on both sides of the aisle today, and he said that's a result of American politics simply being more polarizing.

Do you share that view, that it's just more polarizing on virtually every issue out there, and particularly on tax cuts?

BAYH: Well, there's been too much partisan animosity in recent years. There's no question about that. And I think we do need to improve the tone, as the president has said, and clear the air around this place.

I think we're making some progress on that, Judy, at least in the Senate. Yesterday we had a press conference over here. Five Republicans, six Democrats, joining together in favor of a safety mechanism to make sure that these tax cuts are fiscally responsible. That was a very good sign. We had Congressman Houghton from New York indicate this was the first time in his long tenure in Congress that he'd been to a bipartisan, bicameral press conference. So, there has been too much partisanship, but I think there's some encouraging news that there are more of us who are centrists, who want to work across the aisle, who want to try and get things done, who want to tone down the rhetoric, and I think that's what the American people long for.

WOODRUFF: And all those Republicans are voting with the president, regardless.

BAYH: Well, this is the first step in a long process. And I think that those Republicans who were at the press conference yesterday were saying, "Mr. President, we want to join you in cutting taxes, but we don't want to go back to the days of debt and deficit, higher interest rates and a slower economy," Judy.

A fiscally responsible tax cut; that's what we all want. And we need to work with the president to make sure that that's what we actually pass.

WOODRUFF: Senator Evan Bayh, Democrat of Indiana, we thank you so much for joining us. We appreciate it, Senator.

BAYH: Thank you.

WOODRUFF: Thank you.

Well, President Bush, no doubt, had that upcoming Senate vote in mind as he left for North Dakota, and another attempt to sell the public on his tax cut plan. Our senior White House correspondent John King is in Fargo right now, covering Mr. Bush's trip.

Hi, John.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Hello, Judy, to you, from beautiful balmy Fargo, North Dakota. The president due here just a little bit of a while. As you mentioned, most of his travels aimed at the negotiations and the votes well down the road, weeks and months ahead, aimed mostly at the Senate.

But the president is expecting, when he lands her in just a few minutes, to receive a phone call from the speaker, Dennis Hastert, informing him, the administration hopes, that there was a victory in the house today. The first big victory for the president's tax cut proposal. That was on his mind as he left the White House earlier today. The president stopping briefly to meet with reporters, making one last pitch for his plan, offering one last rebuttal to his critics.

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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The message is loud and clear that we've got ample, ample revenues to fund our priorities, to pay down debt, to set aside money for a contingency, and ample revenues to send money back to the people who pay the bills -- the taxpayers. I strongly believe and I hope the House of Representatives sends a message, that the people of America are overtaxed and deserve a refund.

(END VIDEO CLIP)

KING: Now the president expecting to have a bit of a victory celebration here, but as you mentioned, most of all this geared toward the Senate vote. North Dakota and South Dakota today, South Dakota again in the morning then on to Louisiana.

All three states carried by President Bush in the presidential election, but all three states have Democratic senators, six Democratic senators in total. Most of them, including, of course, the Democratic leader, Tom Daschle of South Dakota, highly critical of the Bush tax cut plan, and the president's approach so far in selling it.

The Democrats obviously saying he has not been bipartisan as promised. What the president's trying to do is rally public opinion in those states and across the country, so that when he gets to the negotiations, once the Senate action begins, that he has a much stronger hand to play.

The White House defending its position, so far, against that Democratic criticism, saying if the president started to negotiate now he would have to give ground on the price tag, 1.6 trillion over all, and that he's not prepared to do that yet. He's hoping to not do that in the end, although White House officials acknowledge, given that situation in the Senate John Karl was talking about, ultimately the president is going to have to compromise -- Judy.

WOODRUFF: So, John, when, as we heard Jon Karl say, it may well be May before this comes up for a vote in the Senate, does that throw the president off his game plan or is that exactly what they are predicting?

KING: That's what they expected. Early on, Senate Majority Leader Trent Lott told the president the earliest he could probably get the tax bill to his desk as part of the budget would be around the July Fourth, congressional recess. So, the president will be traveling just about every week between now and then. There's some international trips coming up in the spring and early summer, but the president planning to travel two, sometimes three days a week.

The White House modeling this much after Ronald Reagan's effort back in 1981, 20 years ago, to sell his tax cut plan and they say ultimately, if you look at the public opinion polls, that the skepticism for a tax cut has disappeared. The American people more, and more want one. They acknowledge some differences over debt reduction, over the approach between the Republicans and the Democrats, but the president believes the momentum is moving his way.

WOODRUFF: All right. John King in Fargo, North Dakota. You can build a snowman while you're waiting for the president. Thanks, John. Appreciate it.

Personal tragedy catapulted her into the national limelight. Coming up on INSIDE POLITICS, we will hear from freshman Missouri Senator Jean Carnahan.

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WOODRUFF: Missouri Democrat Jean Carnahan's journey from candidate's wife to United States senator is surely one of the most amazing political stories in recent memory.

Just a month before the election her husband, Mel Carnahan, and their son died tragically in a plane crash. Through her grief, Carnahan picked up her husband's mantel and went on to defeat incumbent Republican Senator, John Ashcroft.

I visited Carnahan in her new Senate office this afternoon, and asked her whether, at times, her incredible journey seems like a dream.

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CARNAHAN: Sometimes it does. I go through such a range of emotions even today. But it's getting better. Some days I feel like I take one or two steps forward, and sometimes I take one or two steps back. But more and more I'm adjusting, and I can -- I feel, though, that very much I'm doing what my husband would have wanted me to do under the circumstances, and what I feel very comfortable doing. So I think I'm making progress.

WOODRUFF: Some people look at you -- I've heard people say, "I don't know how she does it," people say, "I don't think I could do what she's doing under those circumstances."

What keeps you going?

CARNAHAN: The strength comes when you need it. It's there and it comes. People still help me so much. They see me in a mall, or in an airport and they'll come up to me, and give me a hug, and encourage me, and tell me about their own problems and how they've overcome a tragedy in their own lives. And that inspires me.

And somehow or another, people connect with me at that level, because they have gone through something. And they want to give me support and they want to tell me to go forward and do what I'm doing. They're very, very helpful to me.

WOODRUFF: You've already introduced your first piece of legislation.

CARNAHAN: Yes, I have.

WOODRUFF: Having to do with education, the Quality Classroom Act, you called it.

CARNAHAN: That's right.

WOODRUFF: It would put, as I understand it, 50 million?

CARNAHAN: Billion. WOODRUFF: Billion?

CARNAHAN: 50 billion.

WOODRUFF: We have to get used to the big numbers.

CARNAHAN: That's right.

WOODRUFF: Over 10 years, giving local school districts the option of spending more money on teachers, on classrooms. Why did you think this particular legislation was necessary?

CARNAHAN: This is something that my husband campaigned on. He was so interested in education, all of his life he always was. And -- and I saw this piece that had been developed by him and by other people in the education community, and I believed in it just as much as he did. And I thought this would be a wonderful thing to take forward.

So I introduced it on the floor of the House, and I -- I'm just so pleased with it, because it would, as you say, bring $50 billion over the next 10 years, flowing directly from the federal government, bypassing the bureaucracy, and going directly to local schools. They, then, can decide from a menu of five options how they're going to spend that money. But it must all be directed to the classroom.

WOODRUFF: Let me ask you about something in connection with that. There have been a number of -- just in the last few days -- very tragic shootings at schools across this country. Once again, children killing other children, in effect.

Do you believe that now is the time for Democrats and others who believe in stricter gun laws to press for that kind of legislation?

CARNAHAN: Certainly I was very troubled by what happened. Any time this sort of thing happens it's very, very, very sad. Certainly, any time we make gun laws we don't want to overextend and infringe upon the legitimate rights of sportsmen to have and to hold, to own guns.

But we do need to do some things that make sure that guns don't get into the hands of children. And those are the things we want to protect. You know, like trigger locks. Those make sense. We want sensible laws that will do that.

WOODRUFF: Is it frustrating to you, as someone who I presume is an advocate of gun control with the kinds of qualifiers that you just described, that Democrats last year -- I mean, from Vice President Al Gore running for president on down -- really sort of held back on this issue? That there was a -- almost a timidity on their part to press gun issues because they saw the polls showed most people really didn't want that? How do you view that as a political problem facing Democrats?

CARNAHAN: Well, again, I don't think we should ever go so far that we're infringing on the rights of sportsmen and people to enjoy shooting. I have guns in my own home and I even hold a marksmanship badge, so I enjoy doing that sort of thing. So we must make sure that those laws don't infringe. At the same time we've got to protect our children.

WOODRUFF: Let me ask you, Senator, about taxes and the president's tax cut proposal, very much front and center today going through the House of Representatives.

The White House is saying today, among other things, they're saying really people in the lower income tax brackets are going to get, in their words, the biggest share of reductions from this across- the-board tax cut, the president is proposing, an income tax raise.

CARNAHAN: Well, I certainly hope that's true. I think we need to have this targeted to middle-income families. They're the ones who need the tax -- tax breaks. But we need for our taxes to be a substantial cut. I really want a substantial cut. But I want it to be a responsible cut, too, at the same time.

I wanted to take into effect -- into account that we should pay down the -- our national debt and that we should shore up Social Security and Medicare. And that we need to think of such important things as defense spending and spending on education. So all those factors have to be put into the mix along with that, so I think that's what the battle is going to be here.

WOODRUFF: And do you think right now that the president's tax cut proposal reflects that?

CARNAHAN: Well, we haven't seen any budget numbers. We don't know. So when those budget numbers come, then we'll know what's being cut and then we can go from there.

WOODRUFF: The leaders in the Republican party in your state of Missouri, after you voted against John Ashcroft to be confirmed as attorney general, said they were deeply disappointed in your vote. A couple of them, in fact, one in particular said, -- quote -- "We will remember."

Do you fear that sort of attitude on their part?

CARNAHAN: No, I don't. Sometimes you take a vote, it's a vote of conscience, and you do it regardless of what -- what you think might occur. And that's what it was.

Up until now he's been trying to, I think, make things right, and do what he thinks is right in many respects that people thought were concerned about.

WOODRUFF: You mean in terms of the people he's brought into the department, or...

CARNAHAN: Yes, uh-huh. I've been pleased with what he's been doing, and I wish him every success. And I think he's on the right track, and I'm encouraged by it. WOODRUFF: Finally, Senator, we know that you have to run, if you choose to run, to run again in two years, if you decide to seek reelection.

What's your thinking about that right now?

CARNAHAN: Well, of course, it's one of those things where you have to start so early to raise money for these campaigns, I feel like I'm no sooner through a campaign, I have to think: are you about to start another one?

And I'm not ready to announce that yet, but all of us know that when you have a campaign just a year off, it has to be on the back -- in the back of your mind all the time.

WOODRUFF: So you're are actively raising money right now?

CARNAHAN: Yes.

WOODRUFF: Well, Senator Jean Carnahan, we thank you very much for joining us.

CARNAHAN: Thank you.

WOODRUFF: That interview done just a few hours ago this afternoon at her office at the Capitol.

Still ahead on INSIDE POLITICS: On the defensive, the Reverend Jesse Jackson. From questions about his personal life to how he runs his political action groups.

(COMMERCIAL BREAK)

WOODRUFF: More of the day's political news coming up, but now a look at some other top stories.

This is the second day students are back in class at Santana High School in Santee, California. Yesterday a judge delayed the arraignment of Charles Andrew Williams on murder and gun charges.

CNN national correspondent Frank Buckley joins us now from Santee -- Frank?

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Judy, students were back on campus in fewer numbers today than they were on the first day back on campus since the shootings took place on Monday. Eighty-five percent attendance yesterday, roughly 80 percent attendance today. The school board president, however, said the atmosphere had all the earmarks of he called a regular or a normal day. He acknowledged, however, that truly regular or normal days would be a long time coming at Santana High School.

In fact, there was evidence of that at a noontime assembly today, where students were called together by the principal -- they were informed of an e-mail or an instant message threat that was received by one of the students. In this message, according to school district officials, this person said he would "finish the job" that Andrew Williams allegedly began on Monday. Now, this may have been sent as a joke. It isn't clear, but school district officials are taking it very seriously.

(BEGIN VIDEO CLIP)

GRANGER WARD, SCHOOL SUPERINTENDENT: We are aware of that. In fact, at this point -- have law enforcement involved in this investigation to try and track down this person. And I hope we can do that very, very quickly. We will not treat this as a joke. I will take that very seriously. That is a terrorist threat.

(END VIDEO CLIP)

BUCKLEY: Students who were on campus tell us that they were reassured by school administrators that their safety was a paramount concern and they would continue to have law enforcement officers -- both sheriff's deputies and police officers -- on campus to maintain the security.

Frank Buckley, CNN, reporting live from Santee, California.

WOODRUFF: Thank you, Frank.

A mixed ruling for former Chilean leader Augusto Pinochet today. An appeals court in Chile threw out murder and kidnapping charges against the 85-year-old Pinochet. But, in throwing out those indictments, the court says Pinochet can be tried for covering up those crimes.

A report out today says there needs to be more study of technologies used to detect breast cancer. It says there are no significant steps forward in the field of breast imaging, and while some detection techniques show promise, X-ray mammography remains the best way to detect the disease. The report looked at 17 breast imaging tools. More than 180,000 cases of breast cancer are diagnosed in the United States each year.

There has been a new wave of questions surrounding the Reverend Jesse Jackson in recent weeks; we will have Jackson's response next, on INSIDE POLITICS.

(COMMERCIAL BREAK)

WOODRUFF: Any moment now, we are expecting the vote to begin in the House of Representatives on the first main piece of President Bush's tax cut plan. We will, of course, be watching that vote very closely. Once it gets underway -- it looks like it may be getting underway as we speak. It will take about 15, 16 minutes or so, and once it is done, we will bring that report to you, of course, right away.

The Reverend Jesse Jackson was grilled by reporters today about his tax returns and the money involved in his nonprofit political action groups. Jackson is used to turning up the heat on others. But as CNN's Mike Boettcher reports, now it's Jackson under fire. (BEGIN VIDEOTAPE)

MIKE BOETTCHER, CNN CORRESPONDENT (voice-over): Never before had Reverend Jesse Jackson opened the books to his various civil rights groups, like Operation Rainbow/Push. Under pressure, today, he did.

REV. JESSE JACKSON, RAINBOW/PUSH COALITION: Our financial records reflect discipline, dignity, integrity and results and legal proprietary.

BOETTCHER: Reverend Jackson's organizations have been under scrutiny since January when Rainbow/PUSH officials acknowledged that one of Jackson's nonprofit groups, the Citizenship Education Fund, paid $35,000 in severance to Karin Stanford, who had a child with Jackson during an extramarital affair. The payment to Stanford was not listed in the group's 1999 tax returns, but Jackson said the omission was inadvertent and an amended return will be filed.

JACKSON: There is no evidence that there is any inconsistency or impropriety in the way that they are filing our return.

BOETTCHER: Jackson also denied allegations that threats of boycotts or protests are used to force companies to contribute to his organizations. In 1999, several of the nation's largest telecommunications companies, some of whom were proposing mergers opposed by Jackson, each donated hundreds of thousands of dollars to Jackson's organizations.

Jackson insists this newest controversy is the work of his conservative opposition. One of those groups, the National Legal and Policy Center, filed an IRS complaint last week, alleging that Jackson's Citizenship Education Fund violated its tax-exempt status.

DAN RENE, NATIONAL LEGAL & POLICY CENTER: Reverend Jackson and his Citizenship Education Fund has been operating for the private benefit of his family and friends.

BOETTCHER: Jackson insists that he has never pressured corporations to make deals with his close associates.

JACKSON: We never say to a company, take this person or that person. We never do that.

(END VIDEOTAPE)

BOETTCHER: The year 2000 financial data supplied by Jackson is sketchy, but he promises more information and maintains that civil rights, not enrichment, is still the goal of his organizations -- Judy.

WOODRUFF: All right, Mike Boettcher reporting, thank you very much.

We are continuing to keep an eye on the House of Representative. As we say, that vote has gotten underway; we will report results to you just as soon as it ends and we will keep watching it. Take a break. When we come back, we will be speaking with the head of the NAACP Kweisi Mfume. We'll be back.

(COMMERCIAL BREAK)

WOODRUFF: You are looking at the numbers there -- the first major portion of President Bush's tax cut, $958 billion worth passing the House of Representatives by a vote. This is the early wave -- it will have to be confirmed. At this moment, though, it's 225 for -- it looks like 10 Democrats and one republican -- I'm sorry, one Independent crossed over to vote with the Republicans, giving the president his first major victory in the Congress: 226 to 196. All but 10 of the Democrats voted against, and all the Republicans voted with the president.

Kate Snow, not a surprise.

SNOW: No, not really, Judy. This is, in fact, almost exactly what we've been anticipating all day. Democratic aides had said somewhere around 10 or 12 Democrats would probably end up siding with the Republicans; Republicans have been saying all along they thought they had most of their rank in order and that most of their Republicans would be voting with the president. And, indeed, that's what you see happening here.

There was pretty universal support on the part of Republicans for this tax cut. They wanted it down now; they wanted it done quickly; they feel like it's a boost to the economy; they feel like it's the right thing to do -- give Americans some of their money back, as they would put it -- Judy.

WOODRUFF: And Kate, what happened to the president's hopes for bipartisanship here?

SNOW: Well, Republicans will tell you that hope is still alive. They're having -- the House is going to have a bipartisan retreat this weekend; members from both parties expected to be there, Republicans still very hopeful.

But I can tell you, Democrats have a very different point of view; Democratic Minority Leader Richard Gephardt again today saying bipartisanship is over, it's dead; this week marks the end of it, he has said. He feels that the words were very nice. He says the rhetoric from President Bush was a good thing, but he called it rhetoric; and he said, look, the actions haven't borne it out. The Democrats feel that many things -- several things have been pushed through the House, including this tax-cut bill -- Judy?

WOODRUFF: All right; Kate snow at the House of Representatives where, as we've just been reporting, President Bush wins a big one -- his first wave of his tax-cut plan wins largely along a party-line vote.

Speaking of bipartisanship, can the Grand Old Party win over black voters? Ahead on INSIDE POLITICS: NAACP President Kweisi Mfume on his dialogue with the Republican leadership.

(COMMERCIAL BREAK) WOODRUFF: House Majority Leader Dick Armey is heading a Republican effort to build bridges with the nation's black community. What's been the response?

Well, for that we turn to NAACP President Kweisi Mfume, who has been holding a dialogue with Mr. Armey.

In fact, you had what you tell me was an hour and a half meeting with him today.

KWEISI MFUME, NAACP PRESIDENT: Yes, we spent about an hour and a half together today.

WOODRUFF: What -- first of all, how did the meeting come about?

MFUME: Well, Dick Armey and I are good friends; we've been friends for over 15 years. We're kind of like the odd couple, and were that way in Congress because of our views on principal issues.

But I had made a set of remarks at our annual meeting, the NAACP meeting, saying the time was now for dialogue and that I wanted to reach out and try to find a way to do that. He wrote me a letter a few days later saying that he thought that the racial rhetoric had gone too high and that the finger-pointing on both sides really had gotten out of control, and could we meet and talk about some core issues that we both felt real about, and we did today.

WOODRUFF: In fact, Julian Bond, who is prominent in the NAACP has been -- had said some things, used very strong language. Was that in part a reaction to what was said?

MFUME: It may have been some reaction to that. He mentioned that; he also mentioned the Florida situation and church burnings and other things where he thought that Republicans were painted in the wrong sort of way.

My position is that we are going to have principal differences on issues, but we don't have to have permanent disengagement. And we know -- at least I do, that all Republicans are not racists or bigots and all Democrats are not saints or saviors. It's trying to find a way to at least take the first step. Dick and I wanted to do that because it's kind of hard to take the second and third step if you don't begin somewhere.

WOODRUFF: What are second and third steps? What do you want to see happen next and what do you think is realistic?

MFUME: Well, we talked about those things where we do have some commonality: slavery in the Sudan, hate crimes in this country, trying to find a way to get proper funding and infrastructure for public education, making sure that we do look at Social Security reform in such a way that we don't penalize a group such as African-Americans, who have a lower life expectancy, by raising the retirement age. We talked about having some sort of exchange on a regular basis, to kind of -- I don't want to say -- well, to take some of the inflation out and some of the fire out of the remarks that people make sometimes -- but to have a communication one to another.

Now, both of us may fall on our face flat, but it won't be for lack of trying. And we honestly believe that somebody has got to stop somewhere along the way and say, the election is over; how do we work together, if we can work together, and what path do we take?

WOODRUFF: Is the conversation you had with Dick Armey today, Mr. Mfume, something it would be hard for him to have with members of the Congressional Black Caucus.

MFUME: That's a good question. You know, Dick has a fondness for some of those members, and some of them genuinely like him. I don't know and I don't want to speak for the caucus; I've got a tremendous amount of respect for them, so I don't want to second-guess them in any sort of way.

So I do know that he was well-intentioned with this. How it is portrayed or pictured by other people on both sides of the political spectrum remains to be seen. But I think, more than anything else, people ought to at least call him on this if they don't think that he's honest or sincere about it and try to figure out whether or not it will really work.

WOODRUFF: How do you think President Bush is doing so far with regard to African-Americans? Clearly he's made an effort to reach out; he's appointed African-Americans to prominent positions in his administration; he's talked about an end to racial profiling. Is he taking the first steps toward meaningful reaching out, do you think?

MFUME: Well, I guess history is going to have to really judge that. I think, however, that some of the things that the president has done clearly suggest that he has a willingness, at least, to talk about differences. And there are real differences -- principal differences. But as I said before, that doesn't mean you have to have permanent disengagement.

I hope to meet with the president soon, just as I did with Mr. Armey, and I hope to do that with the speaker, Senator Lott, to start talking about whether or not there are things that we share in common that we can work together on. In the absence of that, I think you're going to continue to see accusations and acrimony that don't serve this process at all, and at the end of the day further divide us as a nation.

WOODRUFF: Do you have a meeting set up now with the president?

MFUME: No, I do not, and I expect to reach out to the president shortly. I know he wanted to get this tax bill through and spent a great deal of time on that. But I'm looking forward to sitting down and having a discussion with him.

WOODRUFF: And just finally, new census figures showing great growth among Hispanic Americans. Does that change the political landscape in this country with regard to African-Americans at all?

MFUME: I don't think so. I think, on most of the core issues you find a commonality in terms of positions with respect to Latinos and African-Americans. I think what it does change, and perhaps rightfully so, are some of our concepts; that we're forced now to look at America as an even greater mosaic of different colors and nationalities and races.

If we do that, we win because it makes us also realize that racism, sexism and anti-Semitism are wrong, that black bigotry is just as cruel and evil as white bigotry, and that all the terrible things, like immigrant-bashing and city-bashing and gay-bashing, that divide us as a nation, will continue to divide us unless we see ourselves as this mosaic, different races of people working together all under one flag.

WOODRUFF: Kweisi Mfume, the president of NAACP, we thank you very much.

MFUME: Thank you.

WOODRUFF: We appreciate you coming by

MFUME: Thank you.

WOODRUFF: Thanks a lot.

The House vote on the Bush tax cut: coming up on INSIDE POLITICS, we will get the latest from Capitol Hill on what is being called a milestone for the White House.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We're cutting these taxes with or without the Democrats.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEPHARDT: This is a continuation of a "my way or the highway" leadership.

(END VIDEO CLIP)

WOODRUFF: The House may have ignored the president's call for bipartisanship, but it has said yes to his tax cut plan.

Welcome back to INSIDE POLITICS. A short while ago, the House passed what President Bush calls "an important milestone." Members approved the core of Mr. Bush's across-the-board tax cut plan by a vote of 230 to 198. Ten Democrats joined the Republican majority in voting yes. Supporters say the $1.6 trillion plan is needed to help taxpayers and the economy.

(BEGIN VIDEO CLIP) REP. DENNIS HASTERT (R), ILLINOIS: We need to take a fraction of that surplus, and we need to give it back to the American people, so that they have it in their pocket, so they can make decisions how they are going to spend that money for their families and their future.

(END VIDEO CLIP)

WOODRUFF: Democratic opponents of the Bush tax cut say it is too big, and they accuse Republicans of ramming it through Congress.

(BEGIN VIDEO CLIP)

RANGEL: Unfortunately, the other side believes that the faster they go, the better it is, and so therefore we hope to slow down this train, so the American people could take a good look at the fraud that's being perpetrated.

(END VIDEO CLIP)

WOODRUFF: Today's vote sets the stage for a tax cut vote in the divided Senate, where the fate of Mr. Bush's plan is uncertain.

Now, let's bring in our two congressional correspondents: Kate Snow on the House side, Jonathan Karl in the Senate.

Kate, we know that some Republicans were uneasy at least with the approach the president is taking and the approach of the Republican leadership. How were the Republicans able to hold the line, though? There were no Republicans crossovers. They all were with the president.

SNOW: Well, they worked very hard at it, I know that. They were on the phone, working the phones as early as -- or as late as last night, I should say.

One of the Republicans who they thought perhaps might be tempted to vote with Democrats was Connie Morella from Maryland. She ended up voting along with the Republicans, so certainly the message somehow got through to her.

We should point out, though, that in the House most Republicans were all along very favorable to President Bush. They were very supportive of the president's plan. It's bit of a different picture, of course, over in the Senate where there've been some Republicans who've been very vocal about thinking this tax cut simply too large.

WOODRUFF: And Jon Karl, why is it a different picture in the Senate? Why can't the president count on solid Republican support in the Senate?

KARL: We have a couple of things at work here. One, of course, that Kate referred to the 50-50 split between Republicans and Democrats means that you need all Republicans. You can't afford any defections.

And you've already had a couple of Republicans, Republicans from very strongly Democratic states who are very critical of this plan. One is Lincoln Chafee. I mean, Rhode Island -- he is the senator from Rhode Island -- Rhode Island is a state that voted for Al Gore by more than 20 points.

Another is Jim Jeffords, from perhaps the most Democratic state in the Northeast, they've both been very critical of the president's plan. That makes it very hard. That means he has to go over to the other side and needs to look for Democratic support.

But there's something else, Judy, and that is things move much more slowly over here in the Senate. We probably won't see the first vote on the tax cut in the Senate until May at the very earliest.

WOODRUFF: We are going to interrupt John and Kate for just a moment. Speaker Hastert and some other Republicans leaders in the House are placing a phone call now to President Bush, who is in North Dakota.

Let's listen in.

UNIDENTIFIED MALE: Now I know why they don't do very many live shows.

WOODRUFF: Speaker Hastert with the telephone there, Majority Leader Dick Armey on the right.

Looks like -- I'm told they're having a little difficulty getting through to the president. You'd think that this would be a phone call he would want to get.

UNIDENTIFIED MALE: Actually, they're all laughing.

UNIDENTIFIED MALE: How long is it going to...

WOODRUFF: Bill Thomas there who shares the committee that shepherded this tax cut through the House, and on the left, the House Republican whip, Tom DeLay.

Kate Snow, we're looking at the leadership that really pulled this victory together for the president.

SNOW: That's right, Judy. I actually just got off the phone with Chairman Thomas' office -- he is to the left there of Speaker Hastert, the gentleman on the phone -- and they are thrilled by this.

And I can tell you -- they got 10 Democrats on board. They got one independent. It's exactly what they were looking for. Every single Republican who voted, voted in favor of Bush's tax plan. They were very excited, and are very excited about this victory.

WOODRUFF: John King, are you there in North Dakota, are you hearing me?

KING: I'm hearing you, Judy, just fine.

WOODRUFF: What's the holdup there -- the president -- you'd think this would be a call he'd want to get?

KING: He very much wants to take it. The arrangement were made. The president landed a short time ago, gave a thumbs up to reporters, and said, good vote out of the House today. We're waiting for him here at this victory rally -- victory rally for today's vote, and also an effort by the president to build supports for the votes down the road in the Senate, as you've been talking about throughout the show.

Don't know what the technical hangup is, but the president very much wants to get the good news directly from the speaker, but his staff already told him that he scored his first major victory in the tax cut debate.

WOODRUFF: We're getting a good look now at the Republican leadership of the House of Representatives.

Let me come back to you, Kate, for just a moment while we're waiting. They all seem to have a good laugh while they're waiting.

Kate -- no, here we go, maybe he has the president now. Let's listen.

BUSH: Mr. Speaker.

HASTERT: Hey, Mr. President, how you doing?

BUSH: I understand you have Tom Delay.

HASTERT: Well, we have...

BUSH: Chairman Thomas and JC Watts.

HASTERT: Right. We have good news for you.

BUSH: I hear that. I just landed in Fargo. Give me the news.

HASTERT: You had 230 yeses and 198 nos and that's a win. So, help is on the way.

BUSH: It's a win and I can't thank you all enough. It's great leadership. I'm glad -- I'm glad we moved it the way we did. It's a strong message to the American people that the members of the U.S. Congress have heard loud and clear that if we set priorities and watch our spending habits that we can send some meaningful money back to the people.

HASTERT: Mr. President, this is the first step.

BUSH: It is the first step.

HASTERT: It's a good day here.

BUSH: I'm honored and thank you very much. I'm really pleased and I look forward to working with you all on future matters.

HASTERT: Delay's a good weapon on this. BUSH: Sure did.

HASTERT: Thank you, sir.

BUSH: Thank you all very much.

HASTERT: All right.

BUSH: Bye, bye.

HASTERT: Bye.

WOODRUFF: That was short and sweet. In essence, the Republican leaders in the House delivering the good news to President Bush.

John King, just how significant is this for this president?

KING: Well, he thinks it's very significant and the White House staff thinks it's very significant, in the sense that, in the headlines tomorrow, it will be that the House has passed a tax cut. They want to build momentum; they know there's skepticism in the country about how big it should be.

Should there be that trigger, as they call it in the Congress, that you'd slow down tax cuts if the deficit -- if the money didn't come in and you weren't paying down the long-term debt.

In North Dakota, the ranking Democrat on the Budget Committee is Senator Kent Conrad; been highly critical of the Bush tax cut approach, and the politics in telling it. The President coming here to a state he's won, trying to build public support. They believe every day there's a story in the newspaper or on the television -- news saying there will be a tax cut, it helps the president ultimately get to what he wants: $1.6 trillion over ten years.

White House aides would privately say, they may not get all that in the end, but they're certainly not going to compromise now because they know the final decisions won't be made until May, June, perhaps even as early as July.

WOODRUFF: All right, John King on the road with President Bush in Fargo, North Dakota. Thanks John. We want to thank Jon Karl and Kate Snow at the Capitol.

Now, let's find out if President Bush's public appeals are starting to pay off. Our Bill Schneider joins us from Los Angeles, armed with the results of the latest national polls.

Bill, tell us; first of all, does the public say it likes the president's tax-cut proposal?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, Judy, I'd say the answer is "yes, but."

Here's the "yes." This week's Gallup Poll asked people straight up, do you favor or oppose the federal income tax cuts President Bush has proposed? The answer is yes, 56 to 34 percent.

Almost the same result from "The Wall Street Journal"-NBC News Poll, 57 percent to 32 percent, yes.

"The L.A. Times" National Poll shows a closer margin, 52 to 40 percent yes. The "Times" gave people a choice: do you favor Bush's tax cut for all taxpayers, or a targeted tax cut for low- and middle- income families? Now, a majority still favors Bush's tax cut, but you noticed, it's a smaller majority.

WODDRUFF: What's the "but?"

SCHNEIDER: The "but" is: give Americans a trade-off between a tax cut and other objectives, and the other objectives win.

In "The Wall Street Journal"-NBC News Poll, at least 60 percent say that, instead of a large tax cut, they'd rather see more funding for education, more funding for Social Security and more money to pay off the national debt.

"The L.A. Times" poll wrapped it all into one question. Do you prefer Bush's $1.6 trillion tax cut, or the Democrats' proposal for a smaller tax cut with more money for some of those other priorities?

The Democrats win that argument, 55 percent to 30 percent. In fact, only 51 percent of Republicans say they prefer President Bush's tax cut. Nearly a third of Republicans prefer the Democratic proposal for a smaller tax cut.

WOODRUFF: Now, what about the proposal made by some moderate senators that would tie the tax cut to the size of the budget surplus?

SCHNEIDER: That's a gosh yes. An even better idea, people say. Almost three quarters say the tax cut should be scaled back if the budget surplus turns out to be smaller than projected. That's the Democrats' best argument: show me the money!

WOODRUFF: And Bill, what about concern these days about the economy? How does that affect people's support for the tax cut?

SCHNEIDER: Well, Judy, a big surprise here. Concern about the economy is certainly growing. Less than half of all Americans say the economy is in excellent or good shape, and that is down from 2/3 in January. And people who say the economy is not in good shape are less favorable to President Bush's tax cut. The better you think the economy is, the more you favor Bush's tax cut. That suggests that people do not favor the tax cut to rescue the economy, they favor it only if they think the economy is strong enough that the country can afford it -- Judy.

WOODRUFF: All right, Bill Schneider in Los Angeles and we hope you come home pretty soon.

SCHNEIDER: OK.

WOODRUFF: Thanks, Bill. I'm told in about five minutes from now, President Bush is expected to begin that speech in Fargo, North Dakota. Once it gets underway, CNN will bring it to you live. You can see the people now waiting for the president to come out.

We'll take a break; we'll be back in just a moment.

(COMMERCIAL BREAK)

WOODRUFF: Although President Bush has been out actively promoting his tax cut plan, he says he has found it difficult at times to get some in the national news media to pay attention. As Major Garrett reports, the White House believes Mr. Bush's message is still getting through.

(BEGIN VIDEOTAPE)

MAJOR GARRETT, CNN CORRESPONDENT (voice-over): St. Louis. President Bush arrives to tout education reform and tax cuts, but the timing of the tax cut event is too late for the network evening news shows, leaving them in the dark, but not for St. Louis TV stations and the one million TV households they serve in Missouri and Illinois.

The next day: eastern Tennessee. Mr. Bush toured an elementary school in Townsend, Tennessee, a trip Knoxville TV stations covered exhaustively. Reporters from stations in Chattanooga were there, too. And by day's end, coverage of the Bush event, which received scant attention nationally, spread to part of six states and 780,000 TV households.

Last week, the President stopped in Council Bluffs, Iowa and Omaha, Nebraska. The cities are only few miles apart, but local TV coverage spread out across both states.

The White House says local coverage has sustained the president's message during what aides say has sometimes felt like a national news blackout.

BUSH: I'm also looking forward to continuing my trip around the country. We're off to North Dakota and South Dakota and Louisiana.

GARRETT: Playing to local media fits into the political strategy as well. Each stop on the president's current trip represents a legislative target. In the Dakotas, its Democrats Kent Conrad, Byron Dorgan and Tim Johnson. Previous stops have targeted fence-sitting Republicans. Every stop is a test of Mr. Bush's ability to light a grassroots fire.

BUSH: I'll be going to states where -- where we've got a good chance of convincing members, and states where maybe there's some obstinance.

GARRETT: Mr. Bush cannot light a fire from the Oval Office, but he can with crowds like this.

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GARRETT: The White House strategy is simple: Go to the people, and the people's local TV stations.

As one White House aide put it, "There's always an echo chamber out there, and our job is to make sure the president is in it, one way or the other."

Major Garrett, CNN, the White House.

WOODRUFF: Well, President Bush is getting his word out right now. We're going to take you live to Fargo, North Dakota, where the president is speaking to a large assembled group there. You could see he is walking out toward a stage.

And, as you can see, a good size crowd greets the president on this day when he has just pulled off his first major victory in the House of Representatives. The House voting by a significant margin to -- but along, primarily along party lines, to give the president the first major piece of his tax cut plan, $950 some-odd billion, for 10 years.

We're going to take a break. When we come back, we'll bring you the president's remarks.

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WOODRUFF: Now to President Bush, Fargo, North Dakota. He is just about to begin his remarks.

BUSH: Thank you all.

Thank you all very much.

Thank you. Thank you very much.

The air may be cold, but the reception is unbelievably warm. Thank you all for that warm reception.

Governor, thank you very much. I appreciate you and Mikey (ph) meeting me at the airport.

It's good to see public servants such as your governor who are willing to do what they think is right. He follows the footsteps of a good friend of mine, a man who did a fine job as the governor of North Dakota over the past years, and that's Ed Schafer. It's good to see Ed here as well.

(APPLAUSE)

I don't want to jump the gun on my speech here, but I just got off the phone with the speaker of the House. He informed me that the House of Representatives just took a vote on a major portion of my tax relief package, and by the margin of 230 to 198 the tax rate cut passed the House of Representatives.

(APPLAUSE)

The American people had a victory today. The American family had a victory today. The American entrepreneur had a victory today. One House down, and now the Senate to go.

(APPLAUSE)

I'm here for a lot of reasons. One is to ask for your help. I wasn't sure how many folks were going to show up to hear a budget speech. It seems like a lot of people are interested in the national budget, and more particularly, your own personal budgets. And so I'm here to ask for you, if you like what you hear today, to maybe e-mail some of the good folks from the United States Senate from your state.

(APPLAUSE)

BUSH: If you like what you hear, why don't you just give them a call or write them a letter and let them know that the people are speaking?

You see, one of the important things for the president -- and the truth be known, for people who hold federal office -- is to make sure you get out of Washington, D.C., on a regular basis.

(APPLAUSE)

It's important to make sure you get outside of the D.C. scene and listen to the people.

I tell you, I love traveling our country. I'm so proud to be landing in Air Force One and getting off of the airplane and driving into this hall and seeing people lining the street, waving at the office of the president.

BUSH: It makes me proud to be your president.

(APPLAUSE)

No, they wave because they respect the office and sometimes, at least in this state, it seems like the people like the occupant, too.

(APPLAUSE)

It's a huge honor to be your president. It's a huge honor. One of the things I hope that people figure out about me is I like to bring commonsense approaches to our government.

Take budgeting. It seems like we need to have a commonsense approach on how we spend the people's money, which means it's important to set priorities. You set priorities in your family budgets. The federal government ought to set priorities with your money. And let me describe...

(APPLAUSE)

Let me describe some of our priorities. Educating our children is a priority.

(APPLAUSE) But lest you think I forgot where I came from, I want you to understand I firmly believe that the people who are best able to run the schools in North Dakota are the citizens of North Dakota. I believe in strong...

(APPLAUSE)

WOODRUFF: President George W. Bush sharing the good news with the crowd at North Dakota State University that the first major piece of his tax cut plan has passed the House of Representatives this afternoon, just a short time ago, by a vote of 230 to 198, largely along party lines. Ten Democrats crossed over to vote with the Republicans supporting the president.

Tomorrow on INSIDE POLITICS: an interview with the wife of the vice president, Lynne Cheney. We will bring that to you 5:00 Eastern.

I'm Judy Woodruff in Washington; "MONEYLINE" is next.

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