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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.
As the president prepares to roll out his energy policy, he's trying to attract some strange bedfellows.
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MAJOR GARRETT, CNN CORRESPONDENT: In his first speech on guns in America, President Bush sounded a lot like Bill Clinton.
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ANNOUNCER: Major Garrett on guns, presidential rhetoric and political reality.
Plus: the fallout from a high-court ruling on medical marijuana.
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GOV. JEB BUSH (R), FLORIDA: There have been persistent rumors about my fidelity to my wife.
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ANNOUNCER: Florida Governor Jeb Bush responds to the rumors.
Now, Judy Woodruff takes you INSIDE POLITICS.
JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. We begin with the Bush administration, trying to rally all the support it can get for its soon-to-be-announced but already-controversial energy policy.
Today, that translated into a meeting with a traditional ally of Democrats, union leaders. That meeting broke up just a short while ago, and let's go to our senior White House correspondent, John King -- John. JOHN KING, CNN CORRESPONDENT: Well, Judy, in the early weeks of this administration, roundly criticized by American labor leaders for policies early in the Bush administration, particularly reversals of Clinton administration policies. But as you mentioned, the energy plan out this week, due out on Thursday, is quite controversial. The administration, knowing it has a very tough sales job ahead, is beginning to reach out to what we might consider unlikely allies -- a number of labor leaders brought into the White House here today. The pitch to them: that this plan the president will unveil on Thursday means jobs -- building more refineries, more power plants, more transmission lines, more drilling for oil and natural gas: including, though, proposals quite vehemently opposed by the environmental community.
I want to bring in one of the representatives at that meeting with me, James P. Hoff, president of the International Brotherhood of Teamsters.
The labor movement has been very critical of this administration, obviously, during the campaign, supported then-Vice President Al Gore. Why come in now, and what do you make of this meeting today with the vice president?
JAMES P. HOFFA, TEAMSTERS PRESIDENT: Well, the meeting today was about the crisis we have in America. We have an energy crisis. We have $2 gasoline. That's a crisis. We've got to find some solution to it. We got a broad outline of what the plan is.
Basically, it means a lot of jobs for American workers. It means the fact that we have to start building refineries, which we haven't been building. We haven't been building nuclear generators. We haven't been doing anything with regard to energy. It is a program we want to look at.
But I think the consensus was that it's something that's possible. It's a long-term solution to a great problem. The one thing we did urge today is that we need relief at the pumps as soon as possible because it is hurting the consumer. And I think -- and it's hurting working families. And I think that's something this administration has to focus on, as to how we get these prices down.
If we're going to start building resources to generate electricity, let's do it. But let's get going on the protect. And I think that was the overall consensus, and it was received well. But I think people want to see the details.
KING: Some of your traditional allies, especially in the environmental community, and even some labor leaders I spoke to today on the telephone, question about whether you're being used here. The report is already at the printers. The policy has been drafted, labor leaders brought in at the end.
Do you worry at all that you're being used as part of the political sales pitch and not actually involved in the policy discussions? HOFFA: Well, I don't think we're being used. What I think is that this is basically an involvement to say: How did organized labor help solve this problem? And I think this is a beginning. We want to look at it some more. We're going to have more meetings, but I do think it's a start to dialogue with labor, which we are encouraging this administration to do. I think they made a few mistakes with regard to some of the early moves they made, and I think they should dialogue with labor if they're going to have any type of a relationship over the next four years.
KING: One of the more contentious proposals in the president's plans is oil and natural gas exploration in the Arctic National Wildlife Refuge. Now, environmental groups, one member of the Democratic coalition, they see that as devastation to a very sensitive area of the country.
Do you see something quite different?
HOFFA: Well, I think you have to understand that No. 1, it's only 2,000 acres, something the size of most airports. And it's not going into all 19,000 acres. It's a very small -- it's a small intrusion. It's going to be done in the wintertime with ice roads, so there's no marks on the tundra. It's going to be done surgically. And I think it's something -- the return is great for doing this.
The Teamsters Union and several other international unions have endorsed this because it means jobs, and it also gives us a new supply of oil. I think anybody paying $2 a gallon wants cheaper gas. And if that's the one way we have to do it, let's do it.
KING: Let's talk more broadly about the relationship from this point out. The administration brings you in for the first time, labor leaders in for the first time, on a policy proposal important to them. To help them on this one, are you asking for anything in return? A more open door, say, when other issues come up; whether they be the minimum wage or contracting rules -- things that the labor movement has been critical of this president for?
HOFFA: I think that's the consensus. I think that the people there were encouraging this administration to reach out to labor, so they include them in policy decisions that will affect working Americans everywhere, whether it be minimum wage, whether it be Davis Bacon, whether it be a lot of the issues.
I think this administration has to open up more to just business. It has to open up to labor. And we certainly encouraged them today that they should be more open with regard to dealing with organized labor.
KING: And what are you prepared to do, politically, to help the president sell this plan? A number of proposals will be quite difficult to get through the United States Congress. Are the Teamsters, are your brothers in the Carpenters Union, the Steelworkers Union, are they prepared to lobby Democratic members of Congress and say: On this one we want you to be with the Republican president? HOFFA: I think what we have to do is see more about it. I think that we're encouraged by this. What we're going to do, I can't outline today. But I think what we're going to say is we want to see more of this plan. I think we do need more capacity. I don't think oil is the problem. I think refining and getting oil out is the biggest problem. And we're willing to work with the administration on that now. What we're going to do specifically, I don't want to get into.
KING: OK, James P. Hoffa, president of the International Brotherhood of Teamsters. We thank you for joining us today.
And, Judy, as you mention, "strange bedfellows," a term often applied in politics. certainly applied here at the White House today. This, the first major outreach by the Bush administration to organized labor, and it comes just a few days before the president presents to the American people a very controversial, new, long-term energy plan.
Again, many critics in the environmental community see trouble in the plan. But many of the labor leaders gathered here today believe what they see is jobs for the American worker -- Judy.
WOODRUFF: All right, John King at the White House. And now let's bring in our senior political analyst, Bill Schneider.
Bill, where do union voters stand on environmental issues?
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, the conventional wisdom is give union voters a trade-off between the environment and the economy, and they'll favor the economy. You know, the hard hat image.
Well, like a lot of conventional wisdom, it's wrong. On election day last November we asked voters across the country, which is more important to you, protecting the environment or encouraging economic growth? Americans were just about evenly split on that question. But union voters tended to favor environmental protection over economic growth. Non-union voters tilted toward growth over the environment.
Environmental values are not a turn-off for union voters. While union voters are certainly focused on jobs as a major priority, No. 1, they do not necessarily see jobs as incompatible with environmental protection. And No. 2, unions are not just a narrow economic interest group. They operate as part of a broader political coalition that promotes progressive values, like racial tolerance and environmentalism.
WOODRUFF: Is there a split within the union movement?
SCHNEIDER: Well, let's see what difference it makes whether union voters give top priority either to the economy or to the environment. Those who said the environment is more important voted overwhelmingly for Al Gore. Those who said the economy was more important also voted for Gore, but a little less overwhelmingly.
Now, notice how George W. Bush's support grew from 28 percent of union voters whose top priority was the environment to 42 percent of union voters whose top priority was the economy. That is the constituency President Bush is trying to reach today, union voters for whom paycheck issues -- jobs, economic growth -- are more important than progressive social values like the environment.
Now, Bush was only partially successful in driving that wedge last year. Paycheck voters still voted for Gore. Union leaders worked very hard to convey the message that Bush was bad for unions, and it looks like they succeeded. And with the meeting today in the White House. Bush, once again, is trying to drive a wedge among union voters.
What makes him think he can succeed at that? Just this: the economy is worse than it was last fall. Paycheck issues are now more urgent. The president's promise to build 1,900 new power plants across the country sounds awfully good to a lot of labor leaders -- Judy.
WOODRUFF: All right. A lot of jobs.
SCHNEIDER: A lot of jobs.
WOODRUFF: Bill Schneider, thank you.
While energy concerns have surged at the White House and nationwide, the debate over guns isn't quite as politically charged as it once was. Nonetheless, President Bush addressed the issue today, announcing a plan targeting gun violence.
Our Major Garrett traveled with Mr. Bush to Philadelphia.
GARRETT (voice-over): In his first speech on guns in America, President Bush sounded a lot like Bill Clinton.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The violent crime rate in the United States remains among the highest in the industrialized world. Nationally, there were 12,658 murders in 1999, 2/3 of which were shooting deaths. And, folks, this is unacceptable in America.
GARRETT: And here's Bill Clinton last year.
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: And I'll tell you what my goal is. My goal is not the lowest crime rate in 25 years. I want America to be the safest big country in the entire world.
GARRETT: But that's where the similarities end. Mr. Clinton favored new gun laws. The Bush White House wants to enforce existing ones.
The president wants to spend more than $550 million over two years to hire more than 100 federal and 600 state and local prosecutors. Federal gun prosecutions dropped during the Clinton years, and though they rose at the end, they never matched prosecutions during the last year of the first Bush presidency.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Those who commit crimes with guns will find a determined adversary in my administration.
GARRETT: A year ago, it appeared the gun rights debate would play heavily in the national campaign. The million mom march gave the push for new gun laws unprecedented visibility.
But now, intensity has diminished. This years' million mom march in Washington drew a tiny crowd. So did a scheduled protest against Mr. Bush's speech in Philadelphia. Organizers sense the move to limit gun rights has lost momentum nationally and in Congress.
DONNA DEES-THOMAS, FOUNDER, MILLION MOM MARCH: We have not thrown up our hands. Some of these congresspeople may have thrown up their hands, and they're giving up. We aren't.
GARRETT (on camera): The Bush approach to gun issues borrows some of his predecessor's rhetoric but none of his policies. The White House hopes the president can appeal to suburbanites by voicing his concern about gun violence, while appealing to his traditional political base with policies that rely on a tough-on-crime approach.
Major Garrett, CNN, Philadelphia.
WOODRUFF: To mark President Bush's trip to Philadelphia, a gun safety group ran an ad on radio stations in that city today only, promoting background checks at gun shows. Here is a sample of the 60- second spot.
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NARRATOR: Mr. President, thank you for your commitment to crack down on criminals who use guns. We hope you will also help us make it harder for criminals to get guns in the first place, and that means requiring background checks at gun shows.
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WOODRUFF: The group behind that ad, Americans for Gun Safety, is also sponsoring a trailer that will run in movie theaters across the country for a month, beginning thing Friday. It features Republican Senator John McCain.
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SEN. JOHN MCCAIN (R), ARIZONA: In great country, owning a gun is a right that carries responsibilities. Yet every year, over 40,000 kids bring guns to school. As adults, we owe it to our children to be responsible by keeping our guns locked up. And kids, if someone is talking about using a gun, do the right thing: tell a parent or teacher.
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WOODRUFF: Yet another ad that will be launched by Americans for Gun Safety on television Wednesday urges Congress to support gun legislation, sponsored by Senator McCain and Democratic Senator Joe Lieberman. The measure would require background checks at gun shows.
Another elected official confronts rumors about his private life. This time, it is the president's brother.
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GOV. JEB BUSH (R), FLORIDA: It's hurtful to my family. It's hurtful to other families. I imagine it is political in nature. I do not know. But it is ugly, and it should stop.
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WOODRUFF: Jeb Bush says, enough is enough.
Also ahead: the Supreme Court weighs in on the use of medical marijuana.
And later, the rising costs of gasoline and diesel fuel. A closer look at the trickle-down effects far beyond the pump. This is INSIDE POLITICS.
WOODRUFF: Florida Governor Jeb Bush today strongly denied rumors that he had an extramarital affair with a political appointee. CNN senior political correspondent Candy Crowley has more on how the story spread, and why the governor decided to tackle the rumors head on.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): The whispers in Tallahassee became rampant rumors. The rumors flew on the Internet. The Internet spawned newspaper stories. For the governor of Florida, who may open a re-election campaign next month, the time had come to talk.
J. BUSH: I cannot tell you how hurtful this is. I love my wife dearly. I've been married to her for 27 years. I've been faithful to her, and there is nothing to these rumors. It is an outright lie.
CROWLEY: It has been out there for months, an unproven rumor that Jeb Bush and one of his appointees, Cynthia Henderson, had an extramarital affair .
CYNTHIA HENDERSON, FLORIDA DEPARTMENT OF MANAGEMENT SVCS: I think his comments speak for themselves. It's very shameful, and absolutely false.
CROWLEY: The Jeb Bush people think Democrats began and fed the rumors of a relationship. The Democrats would love it if they could get this governor not to run, said one Tallahassee source, who believes the rumor of an affair was designed to drive Bush from the race.
J. BUSH: I have been faithful to my wife. I love my wife. And whatever the motivation is, it isn't going to work.
CROWLEY: Certainly, the younger brother of the president and the governor of the state that decided the election would be big game to bag in the 2002 political hunt. The governor says he'll announce next month whether he'll run again, but a case can be made that Monday's denial of the rumors is as good an indication as any that he'll seek re-election.
LARRY SABATO, POLITICAL ANALYST: He won't want this to be a major issue during that campaign. By dealing with it now, assuming none of it is true, he cuts it off and probably kills it. The alternative was much worse, which was to let it continue at slow boil for months, so that potentially it would interrupt the flow of his own re-election campaign.
CROWLEY: Governor Bush chose to take on the rumors at a bill signing, which gave him the perfect forum not only to answer the questions, but signal that it is now time to move on.
J. BUSH: I'm telling you now, that's the last time I'm going to talk about this. That's it. Any other questions about this historic piece of legislation?
CROWLEY: Candy Crowley, CNN, Washington.
WOODRUFF: For more now on today's comments by Governor Jeb Bush, as well as prospects for his political future, I'm joined by Tom Fiedler of the "Miami Herald." Tom, this story had been moving around, as Candy Crowley reported, for months. Why did he choose today to comment on it?
TOM FIEDLER, "MIAMI HERALD": Well, I think in the last several days, in the last week or so, it had started to break out in places where it become increasingly difficult for him to function without bumping into it.
This first appeared -- it's been kicking around on a few Web sites or chat rooms for probably a couple of weeks, but it popped up in a column by Bob Novak about a week or so ago, and then it was in "The Guardian," the British newspaper, I believe it was last Thursday.
And so, it just became such an annoyance, and I think the volume on it has been turned up so loud, that I think he felt he needed to actually, as professor Sabato said, confront it, put it out there and hopefully deflate it.
WOODRUFF: And the governor had been talking, either on background or off the record, with some reporters about it even before today, is that right?
FIEDLER: Well, that's right. Again, he had been -- he had been asked about this by the news media, and again particularly since the legislative session ended last week. And I think that he decided that at some point, as the mainstream media began to try to find ways to deal with it. That so-called "it's out there" threshold was being crossed. I think he just decided he had to find the opportunity to confront it directly.
WOODRUFF: Do you think this puts an end to these rumors?
FIEDLER: Well, you know, frankly, I hope it does, because these are rumors that have gone around without any -- any visible means of support, so to speak. It's simply -- it's simply something that people have talked about. And that old line about there's nothing like exposing flat wine to air to make it go bad -- and I hope that that is something that would hold true in this particular case.
He's denied it. I don't think he left any room in the denial. I don't think we need to parse the denial as we did with President Clinton a few years ago.
So unless something truly comes up that would show that this denial was -- was false or calculated, I think it will put it aside. In fact, I think it can benefit him to the extent that the public, frankly, it doesn't take them much to turn against the news media and make the news media the bad guys. This could create Jeb Bush as the victim.
WOODRUFF: Well, we heard -- Tom, we heard in Candy Crowley's report some thinking that perhaps this was a way to -- to begin to make clear that he does intend to seek re-election. Is there any doubt in your mind that he's going to run?
FIEDLER: You know, I frankly don't have any doubt that he will. He is concerned with his family. And in the conversations I've had with him, he has always said that the family would come first.
I suspect if there was any, any shred of evidence here that there was some truth, that that would be the instance in which he would not seek re-election. I think that now by -- by confronting this, I think Candy is right, that this is clearing the way for him to seek re- election.
WOODRUFF: And assuming he does, what are his chances right now?
FIEDLER: Well, he has to start out as the front-runner here. Carries a little bit of the baggage that is left over from the post- November 7th election here in Florida. But I think the fact that he has pushed through legislation that it will become the model for the country in reforming that -- that voting process, I think he's gone a long way toward correcting that. So unless the Democrats can unite early behind someone who has high visibility, I think Jeb Bush will be very difficult to unseat.
WOODRUFF: So you're saying there's nothing standing between him and re-election?
FIEDLER: Oh, no, there are going to be some issues out there. There's certainly some leftover anger from November 7th, the 2000 election. And there are some Democratic voting blocks that remain quite energized: the African-American community. The environmental community in Florida is angry not so much at Jeb but at President Bush. So there will be some problems and some obstacles there. But -- but Jeb Bush has the ability to raise an awful lot of money.
And frankly, even many people who disagree with him have a hard time not liking him, and that's a big plus in politics, as you know.
WOODRUFF: And names on the Democratic side?
FIEDLER: Well, there are -- there is a list, a growing list. I think the biggest on the wish list for the Democrats is now former congressman and ambassador to Vietnam now Pete Peterson. He was in many ways -- his profile is similar to that of John McCain -- spent many years as a POW. He's from north Florida and yet he had a very progressive voting record in Congress.
So I think the Democrats feel he has that profile that Democrats have in the past been successful with: the Lawton Childs, Reubin Askew kind of profile.
Beyond that, there are some younger faces, but I think the -- the long shot and probably too much to wish for by Democrats would be Janet Reno getting in.
WOODRUFF: All right, Tom Fiedler, I know we'll be talking about this again.
FIEDLER: I'm sure we will.
WOODRUFF: Thanks very much.
WOODRUFF: Good to see you, Tom.
WOODRUFF: The Supreme Court rules on medical marijuana. Did a decision by California voters to allow marijuana use with a doctor's approval pass muster? The latest, up next.
WOODRUFF: The United States Supreme Court today overturned a decision by California voters and ruled that marijuana use, even for state-approved medicinal purposes, is illegal under the federal law.
CNN's Charles Bierbauer takes a closer look at the case.
CHARLES BIERBAUER, CNN CORRESPONDENT (voice-over): The Supreme Court ruled such organizations as the Oakland Cannabis Buyers' Cooperative could not claim medical necessity to distribute marijuana. One co-op client, Angel McClary, uses marijuana for relief from an inoperable tumor and other ailments.
ANGEL MCCLARY, MARIJUANA USER: The first thing I have to do when I get up in the morning is I have to medicate. I have to take medication. I have to take my cannabis.
BIERBAUER: In 1996, California voters passed the Compassionate Use Act. It made medical marijuana available, with a doctor's approval, to patients with such diseases as cancer, AIDS, glaucoma. But the justices overturned the California law, ruling the federal Controlled Substances Act, prohibits the manufacture and distribution of marijuana and other illegal drugs with no medical exception.
Justice Thomas: "It is clear from the text of the act that Congress has made a determination that marijuana has no medical benefits worthy of an exception."
JEFFREY JONES, CO-OP FOUNDER: I feel that it's heavy-handed and misguided, and that it does not take into light what these patients are to do with no alternative being offered from the federal government as to where their medicine is coming from.
BIERBAUER: Federal officials suggest an alternative: legal drugs such as Marinol. Attorneys for the California co-op say this defeat is only a first step and vow to be back in court with broader constitutional issues.
ROBERT RAJCH, ATTORNEY FOR OAKLAND CO-OP: The issue of federalism and states rights, substantive due process and the right to be free from pain, and the commerce clause.
BIERBAUER: The ruling was unanimous but narrow. It rejected the distribution allowed by the California statute but does not address individual use.
Justice Stevens: "Whether the defense might be available to a seriously ill patient for whom there is no alternative means of avoiding starvation or extraordinary suffering is a difficult issue that is not presented here."
(on camera): Nine states have passed laws or referenda permitting marijuana use for medical necessity. But the court ruling says the only allowable exception is for government-approved research projects.
Charles Bierbauer, CNN, the Supreme Court.
WOODRUFF: Newly released FBI documents spark a Supreme Court appeal, but not by Timothy McVeigh. We'll have the latest in the Oklahoma City bombing case, when we return.
WOODRUFF: We will have more of the day's political news coming up, but now a look at some other top stories. There is more activity today in the Oklahoma City bombing case, this time, it's Timothy McVeigh's convicted coconspirator Terry Nichols. He wants the Supreme Court to reconsider his appeal. CNN's Martin Savidge is in Oklahoma City with details -- Martin.
MARTIN SAVIDGE, CNN CORRESPONDENT: Hello, Judy.
As the attorneys try get the U.S. Supreme Court to reconsider the case of Terry Nichols, he is actually located here in Oklahoma City. If you look in the distant background there, you may see a high rise building made of red brick. It's the Oklahoma County jail. And it is there, he is residing these days, waiting for his state trial on the bombing case. No specific date has been set in that regard.
Meanwhile, the attorneys have filed documents, as you say, with the U.S. Supreme Court. What they are asking the high court to do is reconsider, in light of all of these documents that have come forward, several thousands that the FBI released last week. Nichols has already been convicted on federal charges. He is serving a life sentence for his part in the bombing.
Ironically, just a month ago, the Supreme Court turned down his request for a new trial. Now, they are asking the court to reconsider, in light of all of this evidence.
There has also been some talk about the possibility of a retrial for Timothy McVeigh. That is, according to his attorneys, one of several options that they have. And that makes the people here in Oklahoma City extremely nervous. They don't like to hear that kind of talk. Presumably, the way that it would go, is those attorneys representing McVeigh might end up back in the federal courtroom before Judge Richard Matsch, who was the man who presided over the original McVeigh trial.
However, one of the original prosecutors in that case says, he thinks that it's very unlikely that a retrial would be granted.
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LARRY MACKEY, FORMER MCVEIGH PROSECUTOR: There are two sources of information to gauge the proof against Tim McVeigh. One, was the evidence that the jury heard in Denver in, now four years ago, that was characterized by many as absolutely overwhelming.
But second and since then, is Tim McVeigh's own words. Printed in the book, proudly published as far as he's concerned, only a few weeks ago, where he took sole responsibility for the murders of those 168 individuals.
(END VIDEO CLIP)
SAVIDGE: For the people of Oklahoma City, Judy, it has been a difficult number of days here. Keeping in mind that they thought after Wednesday of this week, they would not hear the word of Timothy McVeigh for quite some time. Now they realize that they will be hearing it quite a bit over the next month -- Judy. WOODRUFF: Given all of that, Martin, what are the options now available to McVeigh's legal team?
SAVIDGE: Well, simply put, there are probably three options that they have to go forward with. One of the options is that they could go to the court system and simply ask for more time to review the documents. It may also be, that they want to conduct more interviews as a result of this new information that has come forward.
And then the other is, that they could believe that there is enough significant new evidence there that they could ask for a retrial. They could possibly do a little bit of both, that is, get the extension and also ask for a retrial.
And finally, the last option would be not to do anything at all, but that would be of course for the expressed request of their client, Timothy McVeigh.
WOODRUFF: All right, Martin Savidge reporting from Oklahoma City, thanks.
In the case of the 14-year-old Florida boy charged with the shooting of his teacher. That case now gone to the jury. Both sides wrapped up their arguments in the case on Nathaniel Brazill on trial for first-degree murder. His lawyers are saying that the shooting was an accident.
(BEGIN VIDEO CLIP)
MARC SHINER, ASSISTANT STATE ATTORNEY: Can't just say I thought the safety was on, I didn't mean it. I'm sorry. I'm sorry I killed the man. I was -- it was unintentional. It doesn't work that way. Just doesn't work that way, Nate Brazill, you need to take responsibility. You can't do that. That's first-degree murder.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
ROBERT UDELL, DEFENSE ATTORNEY: We never said, and I will not tell you that Nathaniel is not responsible for what happened here. His parents are not at fault, the school's not at fault, the gun's not at fault. Nathaniel's at fault.
(END VIDEO CLIP)
WOODRUFF: Brazill was 13 at the time of the shooting, he is being tried as an adult.
It was a mixed day for the markets. The Dow closed up 56 points, but the Nasdaq down more than 25. Ringing the closing bell this afternoon, Jamie Kellner, the new chairman of Turner Broadcasting Systems, including this network, and veteran CNN financial news anchor Lou Dobbs.
Lou returns to the air this evening on MONEYLINE. Tonight, an exclusive interview with Treasury Secretary Paul O'Neill. Make sure to tune in for that following this show at 6:30 Eastern, 3:30 Pacific.
Beyond the gas pump, the extra dollars you spend as fuel prices climb. We will check the numbers, when INSIDE POLITICS returns.
WOODRUFF: An item from the notebook of CNN congressional correspondent Jonathan Karl. Jonathan reports that Vice President Cheney intended to attend a meeting of Senate Democrats this Thursday. But the visit, which made it on the Cheney's schedule, was abruptly canceled.
According to Republicans, Cheney was disinvited by Senate Minority Leader Tom Daschle. Cheney had wanted to talk about the president's energy policy. Daschle's office has a slightly different story that Cheney was never actually invited, and besides, Democrats want to talk about taxes, not energy. Democrats do say they will invite Cheney over at some future date.
Of course, Thursday, the White House will be unveiling the president's energy policy. One thing that is not expected to be part of that policy: immediate relief for high gas prices. As Brooks Jackson reports, that means American consumers will continue to bear the brunt of rising energy costs across the country.
BROOKS JACKSON, CNN CORRESPONDENT (voice-over): This is not the only place you pay. Higher fuel prices have been rippling through the entire economy.
DAVID WYSS, CHIEF ECONOMIST, STANDARD & POOR'S: All the goods you buy have to be shipped to you, to the store. And the cost of shipping those goods has to show up at what you pay at the cash register when you check out at the grocery.
The rising energy prices has a direct impact on consumers, what they pay at the pump, what they pay to heat their house. That has added about a percentage point to the cost of living. The indirect impact: your transportation costs adds almost another half a point.
JACKSON: Because of higher diesel fuel prices, Yellow Freight is currently charging more than its normal shipping rates, a fuel surcharge of 3.5% percent extra. Consolidated Freightways is charging 4 percent extra. Roadway Express, also charging a 4 percent fuel surcharge.
ROBERT COSTELLO, CHIEF ECONOMIST, AMERICAN TRUCKING ASSOCIATION: Certainly, most trucking companies out there are putting in fuel surcharges, and they have to. The ones that aren't are actually going bankrupt.
JACKSON: The extra charges even affect goods bought in cyberspace. Even e-goods have to be delivered by truck. United Parcel Service is tacking on an extra 1.25 percent to its delivery fees. And Federal Express, a fuel surcharge of 4 percent.
Diesel fuel was down to 96 cents a gallon a little over two years ago, but shot up to a high of $1.67 last October. Now diesel is down a bit, while gasoline prices soar.
COSTELLO: We're getting to the peak demand season for gasoline. Diesel fuel, on the other hand, the peak demand seasons are the fall and the winter. The fall is the fall freight season, that's when trucks transport more goods than at any other time of the year. And then, as we get into the winter, diesel fuel competes with home heating oil.
JACKSON (on camera): Diesel prices could be even higher next fall. Nobody really knows. But all agree the days of 99-cent truck fuel are probably gone forever, and higher freight costs will be with us for a long time.
Brooks Jackson, CNN, Washington.
WOODRUFF: Given all that, public opinion and the energy crunch: how will growing public concern affect the president's upcoming announcement? We will talk politics and strategy, ahead.
WOODRUFF: What is the public saying about energy? A few hours ago, I sat down with Democratic pollster Mark Mellman and Republican strategist Alex Castellanos to talk about energy and environmental issues under the Bush administration.
I started by asking Mark Mellman about recent poll numbers that show a majority of Americans now believe the energy situation is very serious, and whether that should worry the president as he prepares to release his energy plan.
MARK MELLMAN, DEMOCRATIC POLLSTER: Oh, he needs to worry about this, because -- for a couple of reasons: first, George Bush is promising a solution to this very serious problem, but the solution he's promising won't materialize for a decade. So, he's going to raise expectations, then he's going to disappoint them.
Second, he's got a package of proposals that really run right up against what the American people think needs to be done to solve this problem. The American problem thinks that this problem exists because of oil company manipulation. Bush wants to put more money in the pockets of oil companies and utility companies, and at the same time, destroy our environment.
WOODRUFF: So, Alex Castellanos, and you are shaking your head. ALEX CASTELLANOS, REPUBLICAN STRATEGIST: Oh, those scary Republicans you know who don't have children are going to destroy the environment again. Look, it's pretty clear what's happened here. We have no energy policy in this country for eight years. We have not developed any new refining capacity in 25 years, we have not had any new energy sources domestically in 25 years. And for eight years, the Clinton administration just totally ignored.
Now, I think folks are going to hold the president responsible for coming up with the first energy policy we've had in eight years, which is exactly what he is doing. It's a balanced energy policy that uses new technology, new 21st century technology, to develop new source of energy and to conserve energy. We are talking about (UNINTELLIGIBLE) automobiles here, so it's a pretty exciting time.
WOODRUFF: Mark Mellman, why won't the public give George W. Bush credit for addressing the problem?
MELLMAN: Oh, I think they would be.
CASTELLANOS: Good question.
MELLMAN: It's a good question and I'll give you a good answer. They would give him credit if he did address the problem. The reality is that we're talking about drilling in the Arctic Wildlife Refuge, set aside for decades as a refuge. He wants to open up the drilling -- even if he were successful, none of that oil will be in this country for 10 years.
He's not really going to solve this problem. People want to solve the problem by conservation. Alex has spoken well of conservation. Dick Cheney has not spoken well of conservation.
CASTELLANOS: Sure he has. Everyone -- look, we all want to conserve energy. The thing is that this is a new economy now. We have log-on computers on our desk, there's a greater demand for energy, but that same new economy and new technology, I think, lets us explore for energy in much cleaner, environmentally-friendly ways.
For example, we can now explore for oil in an area the size of a postage stamp, a pin hole, and get energy from a football field.
MELLMAN: But why not...
CASTELLANOS: But we can do that and we can conserve too. But all we know is that with energy growth, demand growing 20 percent a year in some places...
MELLMAN: But why not use...
CASTELLANOS: Conservation alone is not enough.
MELLMAN: But why not use that technology to use alternative fuels, with zero debt out of the budget? Why not use that technology to develop cleaner-burning automobiles? You don't hear Bush talking about those kinds of things. CASTELLANOS: It's a three-part...
CASTELLANOS: It's a three-part plan. We use new technology to develop new sources of energy, to expand refining capacity and to conserve. We can do all three. It's not just a one-sided thing.
WOODRUFF: But the administration has put the emphasis, has it not, on production, on new production, new supplies?
CASTELLANOS: Well, again, we are using a lot of energy that we were not using years ago, and our energy capacity to produce and refine energy just has not kept up. So, yes, we need to conserve. We all acknowledge that, and for the first time, we do have an energy policy, which we've hadn't had. And Bill Clinton didn't say anything about this for eight years.
WOODRUFF: Mark Mellman, we talked -- we haven't talked about it yet, but you've done some polling in the last number of weeks about looking at what people want to see done about energy. What did you find?
MELLMAN: What people want to see is, first of all, they believe that the problem is created by oil company/utility company manipulation. Second -- and they want to see those companies held to an account. Second, they want to see energy efficiency. They want to require cleaner-burning automobiles. They want to require the cleaner-burning fuels. Third, they want alternative energy sources explored: the kind of things that George Bush is zeroing out of the budget. And they want efficiency and they want incentives for that efficiency. People do want a balanced approach.
This administration is focused only on drilling, but drilling in our most sensitive environmental places: national monuments, national forests.
WOODRUFF: Alex Castellanos, given this view on the part of the public, how is the president's plan likely to sell?
CASTELLANOS: Well, what the -- what Mark doesn't ask in his surveys, and I think most balanced, you know, a more balanced approach would -- is that do you believe that with new technology, we can explore the environment, explore for energy in a cleaner, more environmentally way? And sure, we can.
For example, in the Arctic tundra up there where I think the wind chill is 200 degrees below zero or something, you can explore for energy there now with less human intrusion than you have in Yellowstone or Yosemite National Park.
So, yes, we can do that while we can help develop hybrid cars for Mark to ride around in. So we can do both. That's the president's plan.
MELLMAN: But see, Alex has fundamentally stated the problem here, because, on the one hand, you've had 400 oil spills in Prudhoe Bay where we do allow drilling, but right next to that wildlife refuge. And secondly, we do have the -- even if you go and drill there, it won't be available for a decade and it's only 180 days worth of oil. Not worth ruining the Alaska wildlife refuge for.
WOODRUFF: Alex Castellanos, let me just ask you, though, about the number that we stated originally. That -- again, the CNN poll from just last week: 58 percent of the public now saying they think the energy problem is very serious. And another 36 percent say, fairly serious.
How worried should the White House be?
CASTELLANOS: Well, I think right now what the -- what you have to do is do something serious about the problem. That's what American people expect, is that we should have an energy policy after all this while. What they don't want, I think, is the quick fix that doesn't work. We've had eight years of instant gratification, the kind one- night-stand policies that will make people feel better today, but don't solve our problems tomorrow. There's no way...
WOODRUFF: But now, prices are going up.
CASTELLANOS: Prices are going up. And the best way to deal with that is to expand capacity -- fast-track refining capacity, which is what the president is doing, and create incentives to conserve, which what we're also doing in this administration, and we haven't done for a while but...
WOODRUFF: And no, you don't have any concerns about the president's ability to sell that to the public given the kinds of things Mark is saying he found in his poll?
CASTELLANOS: When you -- when you ask people if they believe that new technology is consuming more energy they say yes. When you ask people if you believe new technology can help us produce energy and conserve energy, more efficiency, they say yes. That's the balanced approach the president is taking. Do we have to take the case out and make it to the American people? I think certainly we do.
WOODRUFF: OK, we're going to leave it there for now. Alex Castellanos, Mark Mellman, thank you both.
MELLMAN: Thank you, Judy.
WOODRUFF: We'll find out on Thursday.
WOODRUFF: Virginia Governor and Republican National Chairman Jim Gilmore talks about the Bush administration, energy and gun policy. Plus, the latest on the vice president's pow-wow with labor leaders. Much more ahead on INSIDE POLITICS in the next half hour.
(COMMERCIAL BREAK) WOODRUFF: An old-fashioned showdown between powerful interest groups. Insiders recount that face off of campaign 2000. Also ahead, do power politics and union politics mix? And later...
(BEGIN VIDEO CLIP)
COLIN POWELL, SECRETARY OF STATE: Everybody knew this president was going to be committed to seeking a new strategic framework. And he has shown leadership. But when you show leadership, you sometimes get hit back.
(END VIDEO CLIP)
WOODRUFF: Insights into the Bush administration's global view from Secretary of State Colin Powell.
ANNOUNCER: From Washington, this is INSIDE POLITICS, with Judy Woodruff.
WOODRUFF: Welcome back to INSIDE POLITICS.
The Bush administration says its discussion about energy with union leaders today was "good government," not an attempt, as some have suggested, to drive a wedge between labor and environmentalists. For more on those talks and the political implications, let's go back to our senior White House correspondent, John King -- John.
KING: Well, Judy, if not to drive a wedge, at least to build some political support. Unlikely political support, perhaps, in the eyes of some for that controversial plan the president will roll out come Thursday.
Now, labor unions have complained throughout this administration of being shut out. They say key leaders don't get their phone calls returned promptly. But the administration has processed a number of executive orders, excuse me, that have hurt labor unions.
But union officials here today at the White House saying on this issue they're going to stand by the president's side and walk away from some of their traditional allies in the Democratic coalition.
DOUGLAS MCARRON, PRESIDENT, CARPENTERS UNION: I'm for my members -- the AFL-CIO members. We're paying too much for gas. We're paying to much for electricity. And -- and the problem is there's a lack of supply. We have got to increase the supply. And that's an American issue. It's not an American labor issue.
KING (voice-over): The administration's outreach to labor included leaders from the Teamsters, steelworkers, mine workers, laborers, maritime unions and carpenters. They see the potential for thousands of new union jobs in the Bush plan to build new power plants and transmission lines. And the White House sees the potential to counter criticism from environmental groups and others to proposals like drilling for oil and natural gas in the Arctic National Wildlife Refuge.
DANIEL BECKER, SIERRA CLUB: The centerpiece of the president's plan is to pillage the Arctic National Wildlife Refuge for a six-month fix of oil. The Congress has said no because the American people have said no. That's an unacceptable destruction of a very special place.
KING: But the Teamsters see at least 25,000 new jobs associated with exploration at the Alaska site. They'll try to help the president make the case it can be explored without hurting the environment.
JAMES P. HOFFA, PRESIDENT, TEAMSTERS UNION: This is the beginning of finding a solution to many problems we are having. This crisis with regard to energy is taking billions of dollars out of the pockets of working Americans. We have to find a solution.
KING: Now labor leaders promising to help the president sell his long-term energy plan, but still some tension over immediate concerns. Mr. Hoffa, the Teamsters President, said he complained to the vice president that rising gasoline prices are punishing the truckers in the Teamsters Union.
He said the vice president nodded, as if to make clear that he heard the complaint, but made no promises -- Judy
WOODRUFF: John, separately, the president today gave his first speech as president on guns. What is he talking about and why now?
KING: Why now? Because it is National Police Week. What is he talking about? The expansion of a program -- we have an example of it in the neighboring state of Virginia called Project Exile.
The president talked repeatedly during the campaign, you will remember, when he was Governor Bush at the time, about doing more to enforce existing gun laws. Well, the president promising some $550 million over the next two years to beef up prosecuting teams to enforce existing gun laws, and also promising as well that the administration will do all it can to get counselors into the school, trigger locks, child safety devices of the like.
This president putting an emphasis on law enforcement. You'll remember that was a major difference in last year's campaign. His opponent, then-Vice President Al Gore, calling for stricter gun controls -- Judy.
WOODRUFF: John King at the White House.
On the face of it, gun and union issues may seem totally separate, but there is an important political connection between the two, with serious implications for the next election. The link: many union members in key swing states also are gun owners. That's a challenge for Democrats, who need these workers to vote their wallets, not their guns and a big opportunity for the gun rights movement. Last week, CNN political analyst Ron Brownstein of the "Los Angeles Times" hosted a rare meeting between top officers of the National Rifle Association and the AFL-CIO to talk about what happened in 2000. Here's Ron now with some of the exchanges.
RON BROWNSTEIN, CNN POLITICAL ANALYST (voice-over): It was the shadow war of Campaign 2000, the subterranean conflict in states like Michigan and Pennsylvania and Missouri between two of the most powerful groups in American politics: The National Rifle Association and the AFL-CIO.
Last week in a forum at Harvard University, this conflict came out of the shadows. As senior officials from each group discussed with more detail than ever before their ongoing struggle for the allegiance of blue collar men who prize their hunting rifles as much as their union cards.
No less an authority than former President Clinton has described this tug of war as a key to the outcome in the 2000 election, and it's likely to be just as important in 2002 and 2004.
WAYNE LAPIERRE, EXECUTIVE VICE PRESIDENT, NATIONAL RIFLE ASSOCIATION: It was a very, very close election, and during a lot of the campaign, we heard out there on the road from a lot of the Democratic leadership and from a lot of the union leadership that Gore is not anti firearms, that Bush is anti-union, that NRA is anti-union, that NRA is pro-Republican, that NRA used radical rhetoric to scare union members into crossing party lines to vote for George Bush.
You heard a lot of those type of statements. In other words, they want to blame Al Gore's loss on everything except the truth, which I believe is the fact that they beat themselves.
STEVE ROSENTHAL, AFL-CIO POLITICAL DIRECTOR: Our response in the gun issue has been just that, a response. We don't go out on the offensive on the issue, we try to talk to talk about things, contrary to what Wayne said.
We didn't encourage union members across the country to go out and leaflet flyers that said there's no difference between Gore and Bush on guns, we encouraged them to go out and talk about workplace issues and workplace rights, family economic security, Social Security, pensions, health care, things of that nature.
LAPIERRE: What you had was a clear and present threat re-awaken a love for freedom out there in the heartland of America. And that drove voters to the polls out there in the heartland, made a huge difference in numerous states and probably made the difference in Arkansas, West Virginia, Tennessee, Missouri. Any one of those states, had Al Gore won, he would have been elected president.
ROSENTHAL: I was in West Virginia a week or so before the election and we were leaf-letting a union plant with over a thousand workers in a shift change and I looked in the parking lot and I'd say every other car in the parking lot was a pickup truck. And every second or third pickup truck had a gun rack in the window.
And we had all these beautiful flyers printed up that said, Al Gore doesn't want to take away your gun, but George Bush wants to take away your union. And we were out at this plant leafing this flyer that was on health care, or something.
So I said to the guy who was from the local union, where's the gun flyer that we sent out? And he said, oh, we're mailing those out, which is code for, we're not using them.
BROWNSTEIN: In the next election, this battle to shape the agenda will continue. Unions want to shift their members focus away from guns toward bread and butter issues. But the NRA is mobilizing to fight the unions for blue collar votes again.
This is Ron Brownstein for INSIDE POLITICS.
WOODRUFF: Let's look some more ahead, now, to guns, as a potential issue in future campaigns. I spoke earlier today about that, and other political matters, with the chairman of the Republican National Committee, Virginia Governor Jim Gilmore. I began by asking him how he believes the gun issue is playing for the GOP.
GOV. JAMES GILMORE (R), VIRGINIA: I think that the president is concerned about reducing gun violence. He went to the Project Exile program that we put together in Richmond, Virginia, a joint program with the locals and the Feds, in order to reduce gun violence. And the whole philosophy this is, let's reduce gun violence, and save lives without disrupting the entire American people over the issue of guns.
You can do that by just simply focusing your attention on people who misuse firearms, felons who have guns, people who take guns onto school property and just put them away for a long, long time. And it works.
WOODRUFF: What is the role of the NRA in this? How do the Republican Party and the NRA cooperate on this?
GILMORE: I think the National Rifle Association tends to support the Project Exile in Richmond. And I expanded that out to Project Virginia Exile, and took it entire statewide in the state of Virginia.
President Bush took it statewide in Texas. I think the National Rifle Association supports that approach. Because, instead of going after their members who have firearms perfectly legally, and they're perfectly law abiding, this goes after criminals who've misused guns. Therefore, I think they're more supportive of that, and frankly, it works a lot better.
WOODRUFF: You may be aware that there's a bill being backed by Senators John McCain, Republican, and Joe Lieberman, Democrat. They will introduce it tomorrow to close a so-called "gun show loophole."
This would require background checks at gun shows across the country. Is this something that -- the president, as we know, has said during the campaign, he likes this and he would support it -- is this something the Republican Party would get behind?
GILMORE: I think that's difficult to say at this point. I know that the president wants to do everything he can do to reduce victims and to help victims and to make sure that there aren't more victims and to reduce gun violence. But the Republican Party generally has had more success out there on the ground, saving people's lives and doing better things when you focus on criminals and not on law-abiding citizens that are out there.
Now, in Virginia and across the nation, we have many instant record checks, and that's a pretty good approach. I'm not sure what the NRA's position on it is, because we don't consult with them every day on those types of things.
WOODRUFF: So, you are not sure -- it won't be one united Republican approach to this, as far as you know?
GILMORE: As national chairman, I wish I could find unanimity in a national party as broad as the Republican Party. We're all on agreement on one thing. And that is, and that is, we support law- abiding citizens and we want to make sure criminals that mis-use guns go away for a long, long time and these exile programs work.
WOODRUFF: Let me ask you about tax cuts. There are now, as we know, business lobbyists gearing up to have more business tax breaks added to a minimum wage bill that's moving through Congress. Is this a good idea?
GILMORE: Of course, naturally, we are all very supportive of the president's program to help people and to reduce the brackets and to reduce that down to 33 percent. Nobody should be paying more than about a third of their income to the federal government. And to reduce taxes in that way, in order to help working men and women all across the country.
As for corporate tax breaks, you'd have to look at them and see whether or not they would create more jobs and more opportunities for people, particularly in a time at which people are nervous about the economy, and there's some unemployment beginning to emerge. If you could do something that would stimulate growth within businesses and create more jobs, it would be something we probably should look at.
WOODRUFF: I'm going to move quickly now on energy. Given what we're seeing in the public opinion polls of late: are you at all concerned that the president's energy plan, as it has rolled out this week, will seem too tilted toward production and increasing supply rather than anything else?
GILMORE: The president's program is one of balance. It's a combination of additional supplies and conservation. And a variety of other types of measures. A balanced type of approach. I know the president is very concerned about the state of affairs in California and the situation in California. And I am too.
I've been to California a lot. I was stationed there when I was in the Army. I really love the state and the president does, too. So, we want to do everything we can do to try to help that situation.
But, Judy, you have to be realistic here. They haven't built a new power plant in California in 10 years. And the fact of the matter is, Governor Davis really needs to kind of acknowledge that the last three years, they haven't been doing much on this, until all of a sudden, their blackouts began to occur.
WOODRUFF: So, but in terms of the national policy, what role does conservation play, alternative energy sources?
GILMORE: I think they should play a significant role. I think we should be looking at all types of measures to make sure that the long-term interests of energy policy in this country are maintained.
And I think it will mean a balanced policy with conservation and renewable energy and other types of approaches with particularly increasing supply are going to be the long-term approaches. You have to increase supply, or won't be able to get the job done.
WOODRUFF: In your own state of Virginia, the legislature for the first time in history has adjourned in the last few days without reaching any agreement on a budget; this, after you had insisted on zeroing out the state car tax.
Now, this is something that many Republicans said, in Virginia, was irresponsible. Do you think this is going to hurt your own leadership? Your reputation for leadership? Has it been tarnished by this situation in your state?
GILMORE: Well, many Republicans didn't say that the elimination of the tax was a good thing. A few did. The broad base of this party, including the House of Delegates, the governor's office, and the rank and file of the party across the state believe that when you make a promise, you keep a promise. And we promised to eliminate this tax and to get rid of it. And it's the right policy and it's the right thing to do.
If anything, I think my leadership is being recognized as being one who keeps his word and keeps his promises and does good things for working men and women through tax cuts.
WOODRUFF: But, historically, no budget agreement for the first time; you've got state employees, no raises.
GILMORE: Yes, indeed. In fact, I proposed that budget amendment, as the chief executive should do at the very beginning of this process. It would have kept the 70 percent and the 100 percent over the next two years and gotten rid of the tax. It would have raises for state employees, it would have money for cultural and museums, it would have had other types of appropriate approaches across the state.
And the state senate just refused to do it, because they really believed that you have to break this word. And I will not do that.
WOODRUFF: At the heart of this: a disagreement among Republicans.
GILMORE: No, I think that's a misnomer also. There are a few Republicans, and they have a complete solid block of the Democrats in the state senate that are in favor of wrecking this promise and reemerging the tax. So, I don't think the Democrats have anything to be proud of here.
WOODRUFF: 2004, the convention; Democrats already talking about their convention, at a time that will make your convention compete with the Olympics. In a word, will that happen?
GILMORE: You know, Judy, I just got word a few minutes ago that they've changed the date of the Olympics, so Mr. McAuliffe's all wrong there.
I think that trivial stuff is inappropriate. We have to look at the policies like energy and education, and Project Exile, and those kinds of issues, and really go to the concerns of the people, not play silly little games.
WOODRUFF: All right, Jim Gilmore, chairman of the Republican Party. Thank you very much.
GILMORE: Thank you.
WOODRUFF: Just to clarify, Governor Gilmore did say after that interview that he was just kidding about the date of the Olympics being changed in the summer of 2004; he said he was simply trying to make the point that he thinks what the Democrats are doing is "silly," in his words.
The secretary of state talks about China, the Middle East and U.S. relations with Russia.
(BEGIN VIDEO CLIP)
POWELL: What we want to do is speak to the Russians about how we move to strategic framework which might be framework, which might be another treaty. We're not sure what it is yet.
(END VIDEO CLIP)
WOODRUFF: Up next, a close-up look at U.S. international policy. Colin Powell's conversation with CNN State Department Correspondent Andrea Koppel.
WOODRUFF: Secretary of State Colin Powell today gave an extended interview to CNN State Department Andrea Koppel. Their conversation covered issues ranging from North Korea, China, and the Middle East to the evolving relationship between the U.S. and Russia.
ANDREA KOPPEL, CNN CORRESPONDENT (voice-over): Secretary of State Colin Powell told CNN the Bush administration has no plans at the moment to unilaterally withdraw from the 1972 Antiballistic Missile Treaty. This even as the U.S. moves forward to develop a missile defense shield, in violation of the treaty.
POWELL: What we want to do is speak to the Russians about how we can move to a strategic framework, which might be a framework, might be another treaty. We're not sure what it is yet.
KOPPEL: In fact, Powell said he plans to hold talks later this week with Russia's foreign minister, to either modify the ABM or find a mutually acceptable substitute for this 29-year old treaty, long considered the foundation of U.S.-Russian arms control.
Secretary Powell also expressed optimism there could be a breakthrough in the next few days in its stand-off with China over an $80 million U.S. spy plane.
POWELL: I'm quite confident we will resolve this issue and get our airplane back, and we're in serious conversations with the Chinese.
KOPPEL: But in a move sure to draw strong criticism from China, Powell added that the Bush administration will allow Taiwan's president to transit the U.S. next week en route to Latin America.
And on North Korea, Powell tried to play down an embarrassing situation. In March, he got out ahead of the president and said the U.S. would continue the Clinton administration's policy of engagement with the North.
POWELL: Where we are not is ready to engage yet, because we are conducting our policy review. And the only thing that happened that day was that, as I have kidded others in saying, I got a little too far forward on my skis.
KOPPEL: Another controversial policy still under review: whether to pursue regime change in Baghdad and how to revamp United Nations sanctions on Iraq.
KOPPEL: Judy, I also asked Secretary Powell about reports of tension between himself and other officials within the Bush cabinet, reports Secretary Powell did not dismiss out of hand.
(BEGIN VIDEO CLIP)
POWELL: We have utmost respect for each other. We get along just fine. Do we have differences of opinion? Well, what fun would it be if you didn't have differences of opinion? How would it serve the president if all of us thought the same thing about every issue all the time?
The important point is that we know how to air our differences, we know how to come to solid recommendation for the president. And we also know who is responsible for foreign policy and defense policy and national security policy. It's the president of the United States in the name of the American people.
(END VIDEO CLIP)
KOPPEL: Secretary Powell's message, Judy, this is just the way things work within any administration -- Judy.
WOODRUFF: Andrea, the secretary obviously has a full platter. What would you say are his top priorities?
KOPPEL: Well, first and foremost I would have to say, the Iraq policy is at the top of his agenda. If you look at where the secretary is traveled since he first came into office less than four months ago, not including the two trips he made with President Bush: his first solo trip was to the Middle East, where he tried to drum up support for revitalized sanctions.
Then, if you look, his second trip, to the Balkans, to Macedonia, and to Bosnia; there of course, his message is, we went in together and we will come out together, trying to keep the peace and stability in that region.
And then finally, next week, he will be heading off to Africa, where as the first U.S. secretary of state who is an African-American, he believes that more attention needs to be placed on that continent. He said, he wants to make sure everybody understands that Africa is important -- Judy.
WOODRUFF: All right. Andrea Koppel with an interview with the secretary of state. Thanks.
For more on Secretary Powell and U.S. policies, let's now bring in our CNN Washington bureau chief Frank Sesno.
Frank, you've been talking to a number of people. How is this administration being perceived outside the United States in terms of its grappling with global issue.
SESNO: Well, both outside the United States and among many foreign policy analysts inside the United States the verdict is very much that these are still early days, and what you saw from Colin Powell today sort of personifies what the administration broadly is doing: sidestepping certain issues, not engaging in certain issues, in some cases that the world and foreign policy analysts think the United States should be more involved with. The Middle East, for example.
Many say -- and I spoke with several today who say -- there really should be -- and the pressure is intense -- a higher U.S. presence in the region. That's the one way not to get peace talks per se back on the table, but to give both sides a sense that there is a place to go and that there are ways to at least start to disengage. No one is talking about the peace process.
On the subject of China, to further develop and articulate the overall strategic relationship. Many, especially those who are in the Clinton administration, the previous administration, are highly critical of the China policy. As one top former official put it just a short time ago, he says this looks like economic engagement, but strategic containment.
WOODRUFF: As you look at the administration and how it makes decision, how things get fed up to the president, Frank, what exactly is Colin Powell's role here?
SESNO: Well, Colin Powell's role is -- and he was very diplomatic, again, at the end of the interview is to be a voice within the administration. It's a voice among the vice president, Dick Cheney; Donald Rumsfeld, the defense secretary; and of course, Condoleezza Rice, who's the national security adviser. She's sort of the moderator at this big table of debate.
And the big question among many is, what is Colin Powell's real influence here? What and where is he going to step forward and really articulate again the strategic, the big-picture policy? How is the United States going to go forward with its relationship with Russia, for example? The president -- the two presidents haven't met yet. That's coming up soon. But there needs to be, in the view of many, a framework as this administration starts to define this big policy.
WOODRUFF: The feeling being that has not taken place yet.
SESNO: The feeling is that that has not taken place. Now, the administration, of course, would take exception with that, but they say freely -- and we heard Powell say it just today, for example, on North Korea -- the review is still under way. It takes time.
WOODRUFF: It is still early. Frank, speaking of his being a voice, one of the things he's going to have to speak about in the coming days -- we've got this energy policy being put out by the administration this week -- somebody is going to have to explain that to the rest of the world.
SESNO: The administration knows that it has come under incredible and very vocal criticism in Europe and Asia and other places for some of the positions that it's taken with respect to national missile defense, for example, the walking away from the Kyoto global warming treaty. And as the energy policy is put on the table, there is some concern that yet again some of the U.S. allies and others are going to point to the United States and scream arrogance.
Ari Fleischer stood at the podium the other day from the White House and said, "The American way of life is a blessed way of life." To many around the world, they will look at the United States and say 5 percent of the population, the world's population, consuming 20 percent of its resources. That's going to be a challenge to Colin Powell and others to explain this to the rest of the world. WOODRUFF: All right, Frank Sesno, thanks very much. Appreciate it.
Well, a name you know returns to CNN Financial News. Straight ahead: a quick preview of the day's financial headlines. We will join Lou Dobbs for a first look on what's ahead on "MONEYLINE."
WOODRUFF: The closing bell at the New York Stock Exchange today marked the end of another trading day and a fresh beginning for financial news coverage here at CNN.
Our own Lou Dobbs joined executives of parent company AOL Time Warner at the Exchange to ring the closing bell, marking Lou's return as host of "MONEYLINE," the show that he created. And let's join Lou right now in New York for a preview of what's coming up.
Welcome back to your old stomping grounds, Lou.
LOU DOBBS, CNN ANCHOR: Thank you, Judy, and thank you for not mentioning how ago it was that we created MONEYLINE.
Coming up next, investors are awaiting the Fed's decision on interest rates. That will come tomorrow afternoon. And tonight, I'll be talking with Treasury Secretary Paul O'Neill about the chances we'll avoid recession. And one-on-one with a top executive at Wall Street's biggest company -- indeed, the world's -- Citigroup CEO Sandy Weill.
Also tonight, we'll be going live to Taiwan and China to look at how economic ties complicate an already volatile geo-political relationship.
All of that and a lot more coming up on "MONEYLINE." Now back to INSIDE POLITICS.
WOODRUFF: A political comeback of sorts from overseas. The final votes are still being counted, but it appears billionaire media baron Silvio Berlusconi will be Italy's next prime minister. Berlusconi's coalition of conservative parties won majorities Sunday in both houses of parliament, permitting Berlusconi to return to the post he held for seven months back in 1994.
When he takes office, Berlusconi will lead Italy's 59th government since the end of World War II.
I think they hold the record.
That's all for this edition of INSIDE POLITICS, but of course, you can go online all the time at CNN's Allpolitics.com. AOL keyword: CNN. And you can also e-mail us at firstname.lastname@example.org.
And this programming reminder: Teamsters President James Hoffa will talk about his visit today to the White House. That's tonight on "CROSSFIRE" at 7:30 p.m. Eastern.
I'm Judy Woodruff. "MONEYLINE" with Lou Dobbs is coming up next.
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