THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Live from Washington, this is INSIDE POLITICS with Judy Woodruff. President Bush examines questions of life and death under new pressure from some fellow Republicans.
Still under scrutiny because of the missing intern case, Congressman Gary Condit is hit with new allegations.
Plus: a girl, her jailed father, and an appeal to President Bush: Can they influence U.S.-China relations?
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Please bring my daddy home.
(END VIDEO CLIP)
ANNOUNCER: Now Judy Woodruff takes you INSIDE POLITICS.
FRANK SESNO, CNN ANCHOR: And thanks very much for joining us. Judy is off today. I'm Frank Sesno.
The investigation into the appearance -- disappearance, rather, of Washington intern Chandra Levy has led to new questions surrounding Congressman Gary Condit and his relationship with an airline flight attendant and her version of at least a part of the story.
For the very latest and new developments within the last few hours, we're joined by CNN national correspondent Bob Franken, who has been tracking this story -- Bob.
BOB FRANKEN, CNN CORRESPONDENT: And after almost a day, Congressman Gary Condit and his office put out statements which refute the claims made by Anne Marie Smith, the flight attendant who claimed in a Fox News Channel interview that in fact (a) she had a romantic relationship with Congressman Condit and that he tried to get her to lie under oath about it.
First, the statement from Congressman Condit. "I have repeatedly urged anyone who has any information that can help police find Chandra Levy to come forward and tell all they know and be as forthcoming as possible. I have not asked anyone to refrain from discussing this matter with authorities nor have I suggested that anyone mislead the authorities." Now what is at question here is an affidavit, a "draft affidavit" said Congressman Levy's attorney in another statement, a draft affidavit that was sent to the lawyer for Anne Marie Smith in which the claim is made "I do not have and have not had a romantic relationship with Congressman Condit."
Now, that is what Anne Marie Smith said was an effort to mislead under oath. But the attorney for Congressman Condit says it was only an effort to try and capture what she had been telling them.
Anne Marie Smith was interviewed by the Fox News Channel.
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ANNE MARIE SMITH, FLIGHT ATTENDANT: Obviously, Mr. Condit knew it was false and he was asking me to sign it, and I personally could never have signed it or would never have signed it. And he was urging me to sign it. He said, you don't want anything -- this could be potentially embarrassing for both of us.
(END VIDEO CLIP)
FRANKEN: Now, at the top of the recommended document is attached is this declaration, "Please edit, cut, suggest, et cetera." And of course, all of this nearly obscures the fact that there is an investigation going on into the disappearance of 24-year-old former Washington intern Chandra Levy. She did not intern for Congressman Condit, but there have been repeated allegations that he had a romantic relationship with Chandra Levy through spokesmen. Congressman Condit has repeatedly denied that, in fact, there was a romantic relationship.
What is real about all this, it has now been nine weeks and nobody yet knows the whereabouts of Chandra Levy -- Frank.
SESNO: Bob, this version of events from the flight attendant, whether true or not, what relevance they have to the missing intern?
FRANKEN: Well, the FBI has interviewed the flight attendant. They're trying to see if, in fact, that there was anything in her relationship with Congressman Condit that might cast some light in (a) a relationship that the congressman might have had with the missing intern and (b) that might give them some clues to try and figure out where in fact Chandra Levy is.
SESNO: Bob Franken, thanks.
Now, to another big story here in Washington, it is about morals and medicine, the definition of life and what we should do to preserve it: The debate over federal funding for embryonic stem cell research, also a divisive political issue -- even more so now that key House Republicans have made a strongly worded appeal directly to President Bush.
Jonathan Karl has more on the debate. He joins us live -- Jonathan. JONATHAN KARL, CNN CORRESPONDENT: Frank, President Bush said today that he is thinking about that decision, but he offered no clue as to whether or not he will ultimately allow continued federal funding of research on human embryos. He said that he offered no clue as to how he will go and also not when he will make that decision.
KARL (voice-over): As the president enters what one administration official called the final stages of making a decisions, he is facing intense pressure from anti-abortion rights conservatives in Congress. In a joint statement, three of the four top GOP leaders in the House called on the president to prohibit any federal funding of research on human embryos.
"It is not pro-life to rely on an industry of death, even if the intention is to find cures for diseases," Dick Armey, Tom DeLay and J.C. Watts said in a statement. "We can find cures with life- affirming, not life-destroying, methods that are becoming more promising with each passing day."
Pointedly absent from the statement was House Speaker Dennis Hastert. One aide to the speaker said it was a bad idea to publicly pressure the president on such a sensitive and complicated issue.
In fact, abortion rights opponents are divided on the issue. Some say stem cell research should be funded as long as the stem cells don't come from aborted fetuses but instead from unused embryos at fertility clinics. Advocates say the research could lead to cures for diseases such as Parkinson's, Alzheimer's and diabetes.
SEN. ORRIN HATCH (R), UTAH: These cells are going to be thrown away. They're going to be discarded. They're going to be killed, if you will. Why can't we take the pluripotent cells from them and utilize them for the best benefits of mankind? It seems to me that's the logical, reasonable thing to do, it's the right thing to do, it's the pro-life thing to do.
KARL: But politically powerful religious groups strongly disagree with Hatch's position.
RICHARD DOERFLINGER, NATIONAL CONFERENCE OF CATHOLIC BISHOPS: It's very puzzling to me. I think that he's working on some kind of assumption that -- that an embryo made in a fertility clinic is somehow different from the children that he's been fighting for respect for all his life. He's just wrong about that.
KARL: There are currently approximately 100,000 frozen and unused embryos in fertility clinics around the country. Tommy Thompson, President Bush's health and human services secretary and an abortion rights opponent, is among those who favor using those embryos for medical research.
KARL: But Bush himself has previously expressed his opposition to medical research on living embryos. That's a position that many religious conservatives and their allies here on Capitol Hill are pressuring him to maintain -- Frank.
SESNO: Jonathan, we saw that letter from Republicans in the House of Representatives. What kind of pressures and crosswinds are developing over in the United States Senate?
KARL: Well, stark contrast there, Frank. As a matter of fact, Senate Republican leaders have been extremely quiet on the issue. Trent Lott has been repeatedly asked about this over the last few weeks. He has offered no clue as to what his position on this, only saying it's a complicated issue.
And in fact, Frank, many of the prominent conservatives here in the Senate, at least a few of them, have been those that have come out in favor of medical research. Perhaps most prominent among those is one of the first conservatives to come out in favor of that, and that was none other than 98-year-old Strom Thurmond.
SESNO: And Jonathan, this is one of those key issues, right? Because we've got people who say research could solve some of the key diseases in life and others who say this is a core issue about life. Many members agonizing over this?
KARL: Absolutely, and that's why you see some of them trying to finesse the issue. I mean, Orrin Hatch has said simply that he does not want to see research on aborted fetuses. He's adamantly opposed to that. But when it comes to the question of these embryos that are ultimately going to be discarded from fertility clinics, he's in favor of it.
So it is something that clearly many Republicans, especially here in the Senate, are agonizing over.
SESNO: Wrenching issue. Jonathan Karl on Capitol Hill, thanks.
President Bush made a pitch today for a patients' bill of rights, at least the one that he supports, and he found a family-friendly backdrop to do it: a maternity ward in a Virginia hospital. The president and Mrs. Bush stopped by to visit one of the first lady's staff assistants and her 1-day-old daughter. And that prompted Mr. Bush to discuss parental responsibilities and congressional responsibilities.
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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Congress needs to bring me a bill that will help the patients who come to these hospitals maintain reasonable insurance and a bill that doesn't help lawyers.
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SESNO: Later this month, the House is scheduled to debate a patients' rights bill supported by Mr. Bush. It offers similar patient protection as a measure approved by the United States Senate, but fewer rights to sue doctors and HMOs. The president has threatened to veto the Senate version.
Well, patients' rights and stem cell research, that debate, they're among the issues that may prove troublesome for the president, Republicans, Democrats, even as all those advisers keep an eye on the images and the poll numbers. So let's talk about all of that now with Democratic strategist and former Clinton White House press secretary Joe Lockhart, and Republican strategist and former Dole campaign manager, Scott Reed.
Gentlemen, welcome to you both.
First, to stem cell research. This is one that is not just about politics, but it's about medicine and it's morality.
SCOTT REED, REPUBLICAN STRATEGIST: Well, this debate really started in the Republican Party last summer at the Republican convention where then-Governor Tommy Thompson was the chair of the platform committee, and he finessed it very carefully through the convention. As you remember, it wasn't an issue.
I believe he's been trying to do that now as the secretary of HHS. He's made some initial decisions. It's now in the White House's hands, and I think the president is looking to do the right thing.
SESNO: What's the right thing?
REED: The right thing is to move forward and allow some type of research. When you have pro-life Republicans like Orrin Hatch and Strom Thurmond, and even former Senator Connie Mack of Florida, who's a former member of the Senate, pro-life, Catholic, cancer survivor, those type of men behind this, that's the right thing.
SESNO: Turning your back on that letter from House Republicans?
REED: I think what you're seeing in the Senate is a little more decorum, as they usually have. Let's let the president make the right decision at his time. That's a different style between the way the Senate leadership operates and the House.
SESNO: Joe Lockhart, your take?
JOE LOCKHART, DEMOCRATIC STRATEGIST: Yeah, I think Scott used the right word, which is "finesse," which is this is a difficult issue, because there is a small minority of people who feel strongly on moral terms, and it's very difficult to tell someone they're wrong morally. But I think the scientists are all certain about this now, that there really is potential research that can only be done this way. And it sort of underscores some of the problems for Bush, because the fact that we're having such a public debate on this shows a certain weakening in his ability to deal with the right wing in his party.
There's no doubt what he should do: He ought to listen to the scientists, not Karl Rove, his political adviser. But the fact that we're really -- the fact that we're even debating this today is an indication I think of a weakened position. SESNO: Well, wait a minute. You just used the word "finesse." I mean, doesn't he have a certain obligation, the president of the United States, to these conservatives and others in his party and to be able to finesse their views and take those views into consideration?
LOCKHART: Certainly, but I think that any issue that's finessed is contradicted by the kind of letter that the House leadership wrote today. They could have dealt with this in a more quiet way, but I think they realize that they may be able to push him at this weakened state toward their position. Either way, I think he loses.
SESNO: Scott Reed, a weakened state?
REED: I don't think a weakened state. He's got this on track for a decision to be made, probably in the later -- latter part of July, which is what they wanted to do all along. It is unfortunate this burst out into the front pages of the newspaper. That's not the way Bush likes to run this White House. This is really the first big issue like that to break out of his small core of advisers onto the front pages, but that's what happens.
SESNO: What do you have to say to what Jonathan Karl quoted an aide to Dennis Hastert as saying, that it's a bad idea for Republicans to publicly pressure their president like this?
REED: Well, I think Hastert and his team are using some discipline here, and that's healthy. As the leader of the House, the people's house, it's important to let this president make decisions on his own timetable. And he doesn't...
REED: Discipline. Hastert wasn't part of the letter. That's good discipline for the leader.
LOCKHART: Well, listen, the fact that the -- three of the four leaders in the House of the Republican Party came out and publicly pressured the president to take a stance that goes against the scientific community and most of the people in this country, including Republicans, including Catholics, including pro-life people, I think indicates that they think that they can force him into this position. And either way, I think that politically that's bad for Bush.
SESNO: Scott Reed, is George Bush, George W. Bush taking the right for granted?
REED: I don't think so at all. I think as you've seen his moves throughout the first six months of this administration, his appointments, some of his positions, I think it's been solid conservative. That's the way he governed in Texas. That's the way he's governing as president. And I don't think he's taking anything for granted.
But the fact is this is an issue that some of the right really cares a lot about. But I can't stress enough the importance of when Connie Mack came forward -- that sent a signal to a lot of Republicans this is OK.
SESNO: Gentlemen, let's turn over to the patients' bill of rights now. Joe Lockhart, Democrats are trying to ride this issue all the way up and down Main Street. But many Republicans say one thing that folks don't realize is what you can conceivably do to cost and medical care if people can sue their own employers. If these lawsuits can jump out of the front pages, frivolous and otherwise, why is that something that's lost on Democrats?
LOCKHART: Well, I don't think -- because I think there's evidence out there in the states that that hasn't been the way. I mean, Texas had a patients' bill of rights with the ability to sue. George Bush took the politically courageous view of either vetoing it or signing it. He sort of wandered off for the weekend and decided I'll just let that become law. Maybe that's what he'll do this time. Who knows?
But this is really a popular idea. It's an idea whose time has come. And it says something about the fact that the Democrats after a -- a very tentative and slow start to this legislative session have really taken over the agenda.
SESNO: Scott Reed, why has it been so difficult for Republicans to make the case that all this litigation could make medical care in this country more expensive, more complicated? That's the nub of their argument.
REED: That's the nub of the argument. I think they're making it to the business community. And believe it or not, this week for the first time the unions have stepped into this debate and they recognize, hey, we're employers, too, this is going to cost us more money. And...
SESNO: They could actually be on the receiving end of litigation, right?
REED: So Democrats on Capitol Hill are starting to hear -- starting to hear from major labor union leaders for the first time that this is wrong, you guys better slow down.
REED: Prediction: There's going to end up being a bill that Bush is going to end up signing.
LOCKHART: The bill as it is will get down to Bush. He'll have to decide whether -- what side he wants to come down on.
SESNO: Joe Lockhart, Scott Reed, pleasure as always. Great to see you.
A family split apart desperate for help from Washington. Up next, a young girl's letters to the president as seen against the backdrop of U.S. policy toward China.
Also ahead: Congress faces tough decisions on spending amid talk of a shrinking surplus. We'll hear from the chairman of the Senate Budget Committee as well as the top economic adviser to the president.
Plus, renovation at the National Archives: The ideas that formed a nation will soon be out of public view. This is INSIDE POLITICS.
SESNO: The Pentagon says the last aircraft carrying pieces of a dismantled U.S. surveillance plane has left China en route to the United States. The parts are headed to Dobbins Air Force base in Georgia to be reassembled and re-equipped. The plane and the 11-day detention of its crew by China have become symbols of the tense relationship between Beijing and Washington.
But now, there's another symbol: a young girl, who's desperate to be reunited with her father.
Our senior White House correspondent, John King, has her story.
JOHN KING, CNN CORRESPONDENT (voice-over): It has been four months now since Diana Li last saw her father over dinner in Hong Kong, and she remembers he called from work the next day.
DIANA LI, LI SHAOMIN'S DAUGHTER: And he said he'd be back tomorrow, which is Monday. And on Monday he didn't arrive home, and Tuesday he didn't arrive home, and Wednesday he didn't arrive home. And only mommy knew what happened.
KING: Li Shaomin was and is in a Chinese jail, one of four U.S.- based academics being held on espionage charges the State Department says are dubious at best. And Diana and her mother walk the halls of Congress looking for help: new faces in what to China's critics is an all-too-familiar debate.
REP. CHRISTOPHER SMITH (R), NEW JERSEY: This has not been raised to the highest possible level, and that is where the president himself gets on the phone with Jiang Zemin and says, "We want our hostages back." These are Chinese-Americans. These are trumped up charges, and we're not going to look the other way and have business as usual.
KING: China will choose new leaders next year, and its critics see a pattern.
SMITH: They've cracked down on the pro-democracy people. They've cracked down on the religious believers. Now they're going after the scholars and the academics as part of a policy. This isn't some willy-nilly happening.
KING: Diana first wrote the president back in late April. "Please help me rescue my daddy," she said.
Mr. Bush wrote back, promising to keep close watch on the situation. So Diana wrote again.
LI: "I miss him, his jokes and the time we spent together. I still need your help to bring him home. Would you please tell the president of China to let my daddy go? Thank you. From Diana Li, once again."
KING: As a candidate for president, Mr. Bush promised a harder line against Beijing, and after the release of the U.S. EP-3 surveillance plane crew senior administration officials talked of taking some punitive measures. But the president now wants Congress to renew China's favorable trade status with the United States, has decided not to oppose China's bid to host the 2008 Olympics, and is making plans for a fall trip to Shanghai and Beijing.
The House Ways and Means Committee takes up the China trade debate next week, and the president is hardly alone in arguing that isolating Beijing would only make matters worse.
SEN. JOSEPH BIDEN (D), CHAIRMAN, FOREIGN RELATIONS COMMITTEE: The United States of America will do all it can to continue to put pressure on China that may result in her daddy being freed, and the way to do that, if you think about it, is to better relations with China so China has something at stake.
KING: But to a 9-year-old partial to cartoons, the debate over engagement or isolation is too confusing. Diana sees it as a simple matter of right and wrong, and says the president of China should be scolded or worse.
(on camera): What would you do?
LI: I would spank him.
KING (voice-over): John King, CNN, Washington.
SESNO: And to the dwindling budget surplus now, which may be putting the president and his economic advising -- his economic plans rather in something of a bind. Up next, we'll talk to the president's top economic adviser and the chairman of the Senate Budget Committee. He's demanding some answers.
SESNO: The new Democratic chairman of the Senate Budget Committee, Kent Conrad, says he'll call a hearing next week on new estimates that show the federal budget surplus isn't as big as previously thought. Conrad says he wants members of the president's economic team to propose ways to make up for the shortfall without raiding Medicare and Social Security trust funds.
Now, we'll talk to Senator Conrad in just a moment. A short while ago, I asked the president's chief economic adviser, Lawrence Lindsey, to respond to Conrad's claims that the Bush administration is driving the country into the deficit ditch.
(BEGIN VIDEO CLIP)
LARRY LINDSEY, BUSH ECONOMIC ADVISER: Well, first of all, we're going to have the largest surpluses in history for the next few years, so I really don't know what the senator is talking about. But fortunately, the Congress backed away from what Senator Conrad and his colleagues wanted to do before they went home for Easter break. You know, they passed a budget resolution in the Senate that increased discretionary spending more than 12 percent. They were so embarrassed at what they did they put an asterisk on it, and said, when we come back, we'll cut it to a mere 8 percent increase.
If we'd had to live with that, they would have raided Social Security to the tune of $1.8 trillion over the decade. So really, I don't think Senator Conrad should be throwing stones.
SESNO: What Senator Conrad -- and we'll hear from him in just a few minutes -- and other Democrats are saying is because of the large size of the tax cut -- this is their contention -- because of the questionable projections on which it was built and because of the budget resolution, they say that the administration, the country is going to have to dip into the Social Security trust fund this year -- rather next year -- the Medicare trust fund this year. True?
LINDSEY: Well, I don't -- I don't think so. The president had made very clear that every dime in Medicare money should be spent on Medicare. Indeed, that's what Senator Daschle said the other day as well. We agree. And there will be no raiding of Social Security.
SESNO: Won't you in effect, or will you in effect, have any surplus left once the non-Social Security, non-Medicare surpluses is taken off the ledger?
LINDSEY: Well, remember, we're paying off debt to the tune of 150 to 250 billion dollars a year for this decade. That is the biggest surplus that we have ever had in history. And by any measure, that is very, very tight fiscal management.
You know, at no time that the Democrats have had control of the Congress or that there's been a Democratic president has there been a surplus anywhere approaching the size that we're talking about, even adjusting for the size of the economy.
So you know, I think we're doing a pretty good job.
SESNO: But you say you're not going to be dipping in, you're not going to need to factor in those other surpluses -- Social Security, Medicare -- period. Correct?
LINDSEY: We are not -- we are not going to need to break into Social Security surplus as the president said during the campaign, and every dime in Medicare is going to be spend on Medicare.
SESNO: What are Americans to make of this fact, and that is for months and months -- really a couple of years -- we've been hearing about surplus, surplus, surplus, and it was the cornerstone in many ways of the president's campaign, and now it seems over night that questions are being raised as to the fact that the surplus is diminishing and may not even be there for very long?
LINDSEY: Well, we have an economic slowdown that began last September, 10 months ago. When the president came into office in January, it was becoming more and more obvious that the economy was slowing, and that has definitely slowed revenues. This is a situation we have to deal with. We inherited it. And the president felt and most members of Congress, including a lot of Democrats, felt it was more important to put a floor under the economy. We had to put a floor under the economy. That's why we have a tax cut. That's why the American people are going to have a withholding cut, they're going to get a check in the mail in September, they're going to get another withholding cut in January. All of this is to support an economy.
You know, God help the country, not to mention the surplus, if we were to actually let the slide that started last September continue.
SESNO: Let me try to ask you this...
LINDSEY: Then we'd be in tough, tough shape.
SESNO: Yeah, let me try to ask you this question rather precisely. Can the country have the 10-year tax cut package proceed as it was passed and maintain the rate of payoff of the national debt, and do all the spending that you and others in Congress deem as essential to the national security and other things -- can the country still do all of that given the economic slowdown?
LINDSEY: Well, what the -- we could -- we could never spend as much as everyone in Congress wants to spend. I mean, let's face it: There's unlimited desire to spend in this town. And you could easily see the Congress spend our way into problems.
SESNO: Well, I'm talking about -- I'm talking about -- if I may...
LINDSEY: We are -- we are determined -- what the key here...
LINDSEY: ... the key -- I'm sorry -- the key here is that Congress obey its own rules. Back in late April and May, when they came back from holiday, they passed a budget resolution. That established the rules of the game for how much they could spend. If they stick to that, if they stick to their own rules, we will not have any of those problems.
SESNO: If they stick to their own rules, they won't have any of those problems. Now as promised, Senate Budget Committee Chairman Kent Conrad joining us from Capitol Hill.
Well, you heard what Mr. Lindsey just said, and he suggests maybe you're playing a little "Chicken Little" here and the sky is falling. Plenty of money, he says. What's your response?
SEN. KENT CONRAD (D), NORTH DAKOTA: Mr. Lindsey is in deep denial. Look, the budget resolution that he complained about, that was passed by his party in the House and the Senate with the president's support, No. 1. No. 2, the point I made today was that their plan will raid the Medicare trust fund not in the future; it will raid it this year. Their economic plan will raid both the Medicare and the Social Security trust fund next year.
That's how bad the fiscal mismanagement by this administration has been.
SESNO: Larry Lindsey says...
CONRAD: This is before any appropriation bill passed.
SESNO: Senator, Larry Lindsey says you're flat wrong on those points.
CONRAD: Well, it's just as clear as it can be. All one has to do is add. And that's what they have failed to do. They've put forward a budget that never did add up, and now with the resolution, the revenue falling, they have put us right in position to raid the Medicare trust fund this year...
SESNO: Senator, you know...
CONRAD: ... to raid Medicare -- to raid the entire Medicare trust fund next year as well as dipping into the Social Security trust fund. And that's before a single appropriations bill has passed. That's just using their budget resolution, their tax cut and the revenue decline that he himself predicted just a few day ago.
SESNO: Senator, you know the numbers pretty well. What is the budget surplus projected to be for this year?
CONRAD: The total budget surplus was $275 billion. Then you take out the Medicare trust fund, the Social Security trust fund, the tax cut, and you very quickly get down to a $6 billion cushion. Mr. Lindsey the other day said that we were going to have a revenue shortfall of $56 billion.
SESNO: Well, he didn't say a revenue shortfall. What he said is projections would be somewhat lower by that amount because of the economic slowdown.
CONRAD: No, but that's -- that's what the translation means, Frank. When you talk about being less than projected, that gives us a revenue shortfall from what was forecast of that amount.
I mean, actually, some of that has already been taken into account by a Congressional Budget Office. But when you take what he has discussed, it becomes very clear that we'll be into the Medicare trust fund this year. We had three prominent economists, including one chosen by the Republicans, talk to us and come and testify about 2002. They're predicting a 50 to 75 billion dollar revenue shortfall that year, which will put us not only into the Medicare trust fund, but it will take the entire Medicare trust fund and put us into Social Security as well.
SESNO: Senator, you're -- you're going to have Larry Lindsey and the budget director up for your hearings, and clearly, you will spar over the definition of surplus and what these numbers add up to. But what specifically are you going to be asking them to be doing, or are you merely -- and if you'll forgive the question here -- playing politics with this next week?
CONRAD: No, look, we have got an obligation, all of us, to go to work to fix the problem that they have created, because if we don't, we'll find ourselves in a deep hole and it will be very quick. You know, who would have thought that just six months into this administration they've already got us headed back into the deficit ditch? They've also -- they've got us already back into a circumstance in which the trust funds are being raided.
SESNO: So what are you going to ask from them?
CONRAD: I'm going to ask them: Look, what is your plan? What are you going to do? What spending cuts do you propose specifically? What revenue increases do you propose specifically, or what combination of spending cuts or revenue increases do you propose to prevent what is now clearly going to occur absent action?
SESNO: And very quickly, in 10 seconds, senator, because we're almost out of time, what you're going to hear is something we just heard, and that is, Congress, you spend too much. Your response?
CONRAD: We're talking about being in trouble before the Congress has spent one thin dime. This is based on the budget resolution that their party passed, the tax cut that they passed and the president signed.
We're in trouble before a single appropriations bill has passed.
SESNO: We will anxiously await your hearing and the great debate next week. Thank you very much, senator. We appreciate your time.
CONRAD: You bet.
SESNO: Well, are opponents in the battle over patients' rights breaking the bank to air their messages? That story when INSIDE POLITICS returns.
And coming up in the news headlines, comedian Paula Poundstone responds to charges of lewd conduct and child endangerment.
SESNO: We will have more of the day's political news coming up, but now, here's Bill Hemmer with a look at some of the other top stories.
Hello, Bill. BILL HEMMER, CNN ANCHOR: Frank, thank you. Good afternoon to you as well.
A Russian airliner crashed today in Siberia, Russian media reporting no survivors among 143 passengers and crew. That plane was bound for the town of Vladivostok in Far Eastern Siberia. Witnesses say the plane burst into flames and then crashed into the town of Irkutsk.
In his first court appearance today, former Yugoslav President Slobodan Milosevic refused to enter a plea to war crimes charges. Courtroom guards had to prod the former leader to rise for the judges at the U.N. court in the Netherlands. When asked for his plea, he responded with condemnation of both the court and NATO.
Outside the court a bit later, a lawyer spoke on behalf of Milosevic.
(BEGIN VIDEO CLIP)
ZDENKO TOMANOVIC, LAWYER: Mr. Milosevic does not recognize the (UNINTELLIGIBLE). He claims that (UNINTELLIGIBLE) and that charge against him are false.
The (UNINTELLIGIBLE) is a part of the mechanism to conduct genocide on the Serb people. (UNINTELLIGIBLE) is to hide war crimes committed by NATO in Yugoslavia.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
SAMUEL BERGER, FORMER NATIONAL SECURITY ADVISER: It's a typical -- typical of Milosevic. It's an arrogant, defiant statement against the world. It's a denial of reality, all of which we've seen over the last 10 years. But it also is a great statement by the Serbian government and the Serbian people that they have done this.
It's obviously controversial in Serbia, but they have decided to turn this man over to the international community, the War Crimes Tribunal, to put the past in the dock of justice, and to move on and join the international community.
(END VIDEO CLIP)
HEMMER: And after Milosevic refused to enter a plea, the court entered a plea of not guilty for him. The court then adjourned until the 27th of August.
An attorney for accused FBI spy Robert Hanssen says he is changing his plea to guilty. Hanssen expected to officially enter the plea on Friday of this week under an agreement with federal prosecutors.
Details still under seal, but a agreement source tells CNN the plea is in exchange for a sentence of life without parole. Prosecutors could have sought the death penalty for Hanssen. He's facing 21 charges relating to allegations he sold U.S. secrets to Moscow.
In California, Paula Poundstone pleaded not guilty today, this to charges of lewd conduct and child endangerment. The popular comedian appeared in court in Santa Monica, California, where a preliminary hearing was set for the 30th of July. At the time of her arrest, Poundstone was caring for five children, three of whom she had adopted. At the hearing today, she was barred from having contact with two of the children and told that contact with any other minors must be legally supervised.
Doctors have successfully implanted the first self-contained artificial heart, and the patient is said to be resting comfortably. The heart pumps blood through the body using a small battery powered motor. The internal battery is recharged by an external battery pack that transfers energy through the patient's skin. The device is to be used only in the most extreme of cases, and even then, only intended to buy time until a heart transplant becomes available.
Coming up at the top of the hour on the "FIRST EVENING NEWS," "Target America." A convicted terrorist gives a detailed account on how he planned to bomb a major American airport. We'll have that for you top of the hour at 6 o'clock Eastern, 3:00 on the West Coast. But for now, back to Frank and more in Washington.
See you in a bit, Frank.
SESNO: See you in a bit, Bill, thanks.
Back to politics, after a break, a closeup look at the issue ads on the nation's airwaves: what you may be seeing. Also, brand-new poll numbers on the New Jersey governor's race. Plus, the mayor of York, Pennsylvania learns if he'll have to stand trial for a shooting that happened more than 30 years ago. We'll be right back.
SESNO: You're a patient, you're a part of an HMO. What are your rights? Should you be able to sue?
Well, the debate over the patients' rights bill has spilled beyond the halls of Congress and onto the television airwaves. Touching on some of those issues, joining me now with an inside look at who's spending the big money on this political advertising, David Peeler of Competitive Media Reporting.
OK, David, which groups are spending on this issue right now?
DAVID PEELER, COMPETITIVE MEDIA REPORTING: Well, Frank, let's frame the timeline. You know, this issue still needs to go before the House and the conference after that. So there's plenty of time left for these groups to craft their message into the airwaves, and that's just what they're doing.
Right now, it's mostly the opponents that are spending most of the money. You know, we've seen a group called the American Association of Health Plans. They have a new ad. They're taking the attack not just to the patients' bill of rights but to one of the other favorite targets of them, the lawyers. Let's take a look.
(BEGIN VIDEO CLIP, AMERICAN ASSOCIATION OF HEALTH PLANS AD)
UNIDENTIFIED ACTOR: Hi, Joe. Our barrister chums in the U.S. are suing health plans for the sport of it. Bloody genius! They'll make millions and send rates sky-high.
UNIDENTIFIED ACTOR: And when employers can't afford to pay, they'll sue them, too.
UNIDENTIFIED ACTOR: They'll sue them, too.
(END VIDEO CLIP)
PEELER: And it's breaking over the 4th of July. Interesting! But really what this group has done is spent about $80,000 in the D.C. Beltway area. We've seen a group called the Health Benefits Coalition spend $60,000. And the U.S. Chamber for Legal Reform has weighed in with about a little over $100,000.
Again, all of this has been spent in the Beltway. It's an opinion leaders type of tactic, trying to craft the debate. But in support of the patients' bill of rights, we have seen one group, the National Partnership for Women and Families, come out and they used a different tactic. They spent some money in Washington, but they also spent a fair amount of money in Omaha, Nebraska targeted against the new senator there, Ben Nelson, and it was very successful, because he in turn voted for the patients' bill of rights issue.
SESNO: OK. Thanks for checking the pulse on that one. David, what about the ads relating to energy policy?
PEELER: Well, as you can imagine, it's a hot topic, and right now there's an awful lot of debate going on in California. There are some new ads that are really going after Governor Gray Davis, and let's take a look at some of those.
(BEGIN VIDEO CLIP, AMERICAN TAXPAYERS ALLIANCE AD)
NARRATOR: ... living in a Third World country where the lights went out. We laughed at that government's leadership. You don't have to imagine it. Just look at Governor Gray Davis and our blackouts. He blames everyone but himself.
(END VIDEO CLIP)
PEELER: Well, the American Taxpayer Alliance is run by a guest you just had on, Scott Reed. That group has spent over a million dollars in that state and they've blanketed the airwaves, so it's clearly going to be a hot topic there.
SESNO: David, the energy issue is drawing nationwide attention. But are the ads nationwide, are limited to the West and to California, where the issue, as you say, is the hottest?
PEELER: Well, really, Frank, from west to east. We also saw a tremendous amount of ads being ran here in the East, both in the New Jersey governor's race -- we've seen close to a million dollars spent there -- and event in the congressional race that was run in Virginia. So this is clearly an issue that's going to resonate from all over the country so far.
SESNO: All right. One more note on that New Jersey governor's race David Peeler spoke about. A new poll by Quinnipiac College has an early read on the head-to-head matchup between Democrat Jim McGreevey and Republican Bret Schundler. At this early stage of the race, McGreevey leads with 48 percent of registered voters to Schundler's 35 percent: 14 percent of the respondents said they were undecided. Write it down.
In nearby Pennsylvania, a judge announced today that York Mayor Charlie Robertson and five other white men will stand trial for a 1969 race riot shooting. Robertson is accused of being an accessory to the shooting of a 27-year-old black woman who had driven into a white neighborhood. The mayor is a two-term Democrat who was a city police officer at the time of the incident. He denies the charges and has refused calls to resign from office.
And now we turn to "MONEYLINE's" Lou Dobbs for a look at today's top business story, the GE-Honeywell merger.
Lou, now that we know that the deal is officially dead, how about the fallout?
LOU DOBBS, CNN ANCHOR: Well, the fallout, Frank, as you know, is going to be somewhat severe. Apparently, Michael Bonsignore of Honeywell, his fate may have already been decided. A conference call is now under way. We're waiting to find out whether in fact he will lose his job because of the failure of the GE/Honeywell merger to go through, even though, frankly, it is no fault of his own. Who could resist the idea of going along with Jack Welch when he calls to make an offer for your company?
SESNO: Huge story. Lou, what else have you got lined up for tonight?
DOBBS: Well, tonight, we'll be talking with former Defense Secretary William Cohen, we'll be talking about the fallout from that GE-Honeywell fiasco at this point. We'll also be talking with Dick McCabe, who's the chief market analyst with Merrill Lynch about what investors can be doing with their money in what has been a trying market for just about everyone. And one of the -- well, one of the legends of boxing, certainly boxing promotion, Don King will be joining us to talk about his new promotion, Frank. It's called the Great -- the Great Brawl of China.
All of that and a lot more.
SESNO: We'll -- we'll be there, about 45 minutes from now. We'll have to see what that's all about.
Thanks, Lou. Good to see you.
DOBBS: Thanks, Frank.
SESNO: Well, over to Florida and the next Florida governor's race, drawing nationwide interest from both parties. Up next, we'll talk with the first Florida Democrat to formally announce he wants to weigh in for the "Great Brawl of Florida," challenging incumbent Jeb Bush, the president's brother.
Also ahead, a two-year effort about to get started to preserve the nation's most sacred documents. This is INSIDE POLITICS.
SESNO: The election for Florida governor is more than a year away, but yesterday two Democrats formerly entered the race to take on incumbent Republican Jeb Bush. One of the challengers is Tampa attorney Bill McBride. He has filed, but not officially announced that he's in. We presume that's pending.
The other is Miami-area State Senator Daryl Jones. Senator Daryl Jones joins us now from Miami.
We should point out as we welcome you that of course Janet Reno, the former attorney general, has also talked about jumping in, but this is about you to start with, Senator Jones, so let's start. How much is...
DARYL JONES (D), FLORIDA STATE SENATOR: Thank you, Frank.
SESNO: Thanks, and thanks for being with us. How much is what the nation focused on so much in Florida -- that is to say that disputed Florida election contest -- going to be part of your campaign against Jeb Bush?
JONES: Well, I think it's going to be important in the campaign regardless of whose campaign it is, because if you believe "The St. Pete Times" and "The Florida Times Union," there were over 100,000 people who went to vote that day who did not get their votes counted, plus there were thousands of other people who also went to vote who were not permitted to vote who were valid registered voters.
And so with that kind of swing in this state coming in the next election I think it's going to have a definite impact.
SESNO: And of course, before you line up against Jeb Bush, you have to square off and triumph against your Democratic rivals and competitors there. But what issues do you plan to invoke beyond that one in any campaign?
JONES: Well, over the last three years, the Bush administration has been focused on things that I think that are category c issues: vouchers, getting rid of affirmative action, getting rid of career service employees, as well as tax cuts for the top 5 percent. I think the people of the state of Florida, and indeed the people around the country, vote for elected officials to handle the major issues, making sure that every child has an opportunity for a great education, making sure that we work toward economic development, both domestically and internationally. And we also want to handle health care issues as well as other major issue that are important to the people of the state of Florida and around the country.
SESNO: Is that about spending more money?
JONES: Not necessarily. I think that there are more effective and efficient ways to deal with state government. I think that we can enlist the people who are closest to the spending of those dollars to help us spend it more effectively and efficiently...
JONES: ... and that will be a part of my platform.
SESNO: I'm sorry. I didn't mean to interrupt. How tough do you think it's going to be to unseat Jeb Bush? You know, he's come back stronger than a lot of Democrats thought he was going to out of that presidential standoff.
JONES: Well, we have as many as 10 people who are interested in running as Democratic candidates in this case, so I think that really indicates that a lot of us believe that there is some some weakness in his administration and that he is vulnerable.
SESNO: Do you see his move on election reform, for example, in the state -- really the only state to do it in such a sweeping way -- as something that inoculates him to some extent against what took place?
JONES: Well, I served on the election reform task force, and we adopted 27 of the 35 recommendations in the legislature that came from the task force, but there were some interesting things that also were presented in that bill that eventually became law. For example, for only the 2002 election we're doing away with the runoff. And that's going to be a little bit unusual for us. If we don't take any further action, we'll have a runoff in the 2004 election.
I think that -- and some people think that was a Republican strategy to put the Democrats at a disadvantage, but I don't think it's going to hurt us at all.
SESNO: Word yesterday that the Interior Department is saying, OK, we're going to stay 100 miles offshore for any kind of drilling off Florida's coast. That was key to Governor Jeb Bush. Looks like a win for him. How much credit will you give him for that?
JONES: Well, that's a big issue in the state of Florida. Well over 80 percent of the people in the state of Florida were against drilling in the Gulf. The governor capitulating on this particular issue I think makes him -- it's definitely going to be an issue in the campaign. There's no question about it. SESNO: Will he get credit?
JONES: Credit or blame? I think there's going to be a lot of blame for that.
SESNO: Janet Reno considering a run as a Democrat. How tough might she be?
JONES: Well, right now she has the highest name recognition of any Democrat in the state, but it's a long time between now and next September when our primary occurs, and I think there are about four political lifetimes between now and then. So...
SESNO: Do you think she's tough? Do you think she'd be a good candidate?
JONES: Well, I have great respect for Janet Reno. I've known her ever since before I was even an elected official. However, I think that it'll be a very robust race and we'll have an opportunity to get all of our issues on the table and the people will have an opportunity to make the decision.
SESNO: Well, Florida State Senator Daryl Jones, I think we'll be hearing some more of you in the months and the year to come. So thanks very much for your time today. I appreciate it.
JONES: Thanks for having me, Frank.
SESNO: All right. On this eve of Independence Day, we'll look at the papers on which this country's history is printed and we'll tell you why they won't be seen for a while -- just ahead.
SESNO: They enshrined the spirit and the words of American democracy, and many visitors to the National Archives here in Washington will spend part of their 4th of July peering at these special old papers at the heart of the holiday.
Our Bruce Morton explains why they may want to savor the experience.
BRUCE MORTON, CNN CORRESPONDENT (voice-over): Every morning, people -- about a million a year -- line up on the steps of the National Archives Building to see the documents the United States is all about: the Declaration of Independence, the Constitution and the Bill of Rights. But July 4th is the last day you can do that for a while. They'll be out of sight for the next two years.
JOHN CARLIN, U.S. ARCHIVIST: The reason, primary reason we're closing and that the documents will be off is so that we can produce new encasements, which we're working on, and also to do conservation work on the documents. They have not been touched, worked on in any way since 1952, when they were placed in the existing encasements. MORTON: The documents are on parchment, animal skin. The new cases will be friendlier than the old ones -- won't touch the parchment. But what's damaged these old documents happened a long time ago.
CARLIN: Early in our history, moving from one building to the next, the potential of fire -- the war of 1812 had an impact -- the records were scampered out of town in a cloth bag to go up the river and protect them so that the British couldn't access them.
MORTON: But it's a lot more than just new cases. Visitors won't have to wait on the steps anymore and there'll be a visitors' center, better access for the handicapped, and the documents will be lower so children and people in wheelchairs can see them better. And there'll be more of the Constitution to see.
CARLIN: The Declaration will be to my left on that side of that pillar. We'll have in here all four pages, the first time that the public will see all four pages, and with the Bill of Rights.
MORTON: And they'll slide back into the wall at the end of the day, not down into a vault the way they do now. Up and down is bad form parchment, the experts say. Oh, and they're going to clean these murals, painted on canvas, but held to the wall with some old, poisonous lead-based paint.
You can see why they need two years, and Carlin is sure it will be worth the wait.
CARLIN: I want people to leave with more than just seeing the documents and almost having a religious experience. I want them to have that, but I also want them to have a connection between these documents and their lives today.
MORTON: There is a connection, of course.
CARLIN: These documents and all the records that flow from them are really the foundation of this system we have that's lasted so well for over 200 years.
MORTON: That foundation will be out of sight for two years, but it will be there all the same.
Bruce Morton, CNN, Washington.
SESNO: No fireworks needed.
That's all for this edition of INSIDE POLITICS. I'm Frank Sesno. "FIRST EVENING NEWS" is next.
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