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Lott on Defensive After Comments on Thurmond's 1948 Presidential Bid; Is Landrieu's Victory a Roadmap for Democratic Success?

Aired December 10, 2002 - 16:00   ET


UNIDENTIFIED FEMALE: It was a shocking if you will piercing voice through the fabric of black America.

ANNOUNCER: Trent Lott says he did not mean to sound like a segregationist, but black Democrats say sorry isn't good enough.

UNIDENTIFIED FEMALE: Action will be taken.

ANNOUNCER: Al Gore has more to tell us about Lott's remarks and about his own decision on running for the White House.

She's the new poster girl of Democrats eager to end the losing streak. Mary Landrieu joins us to share her winning ways.

What a doll. But does he have way with words?

UNIDENTIFIED MALE: He's not going to actually let the doll take his place at certain press conferences, is he?


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

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. Another protest against possible war with Iraq begins here in Washington later this hour. In this new cycle, demonstrators took to the streets in a number of cities, more than 100 were arrested in New York, including ice cream magnate Ben Cohen and "Pentagon paper" source Daniel Ellsberg.

In Los Angeles, stars came out to warn against war.


MARTIN SHEEN, ACTOR: The president should care about all its citizens' opinions, and particularly about matters of war and peace. There's so much at stake. You can't put the bullet back in the gun once it's been fired.

(END VIDEO CLIP) WOODRUFF: Also today, President Bush named investment banker William Donaldson to replace Harvey Pitt as chairman of the Securities & Exchange Commission. Senior White House officials say Mr. Bush still is on track to tap Wall Street executive Stephen Friedman as a top economic adviser. Despite complaints from some conservative groups.

Now to Trent Lott's political troubles. The White House says the Senator has apologized for controversial remarks he made and the president remains unquestionably confident in him as the incoming majority leader. Lott says his remarks, praising Strom Thurmond's segregationist presidential bid in 1948 were quote "A poor choice of words that conveyed to some the impression I embrace the discarded policies of the past. Nothing could be further from the truth. I apologize to anyone who was offended by my statement." But some Democrats still are seething about Lott's remarks at the birthday party last week.

Here is our Congressional correspondent Jonathan Karl.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Call it belated outrage. Five days after Trent Lott's controversial comments, Democratic leaders on Capitol Hill went on the attack, declaring Lott's apology insufficient.

REP. NANCY PELOSI (D), CALIFORNIA: I understand Senator Lott has made an apology. He can apologize all he wants. It doesn't remove the sentiment that escaped his mouth that day at that party. And I find it something that is unacceptable.

KARL: But the house's top Democrat had been before the cameras Monday and had nothing to say about Lott until today, the members of the Congressional black caucus had been among the few voices on Capitol Hill publicly condemning Senator Lott's comments. The Senate's top Democrat had given Lott a pass on the issue.

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: There are a lot of times when he and I go to the microphone and would like to say things we meant to say differently and I'm sure this is one of those cases for him as well.

KARL: At a press conference on an unrelated subject, Democrat Maxine Waters condemned Lott but said she was disappointed with Daschle's response, calling it an indication the party takes African- Americans for granted.

REP. MAXINE WATERS (D), CALIFORNIA: It is not enough to simply defend or to explain these kind of statements and then, at election time, talk about why black Americans should turn out in large numbers.

KARL: As for Lott, several top Republicans are privately questioning why it took him so long to apologize. Coming so late, his apology has fueled the controversy and not satisfied his critics. In a statement, NAACP president said "Senator Lott should resign from the position of majority leader-elect to make way for another member of the Republican party whose moral compass is pointed toward improving race relations."


And we have yet another development. Senator Daschle's office is right now readies a follow-up statement clarifying his remarks saying that he believes what Senator Lott said was offensive to anybody who believes in racial equality and freedom. But by explaining what Senator Lott said to him yesterday, he was saying he merely accepted what he said yet, but doesn't change the fact that what Senator Daschle thinks Senator Lott said was inexcusable.

Now also we don't have any new word on Senator Lott on this. Senator Lott is letting his apology of last night stand, but J.C. Watts has gone to the cameras. We will have that interview shortly. J.C. Watts doing a number of interviews. Of course, J.C. Watts is the last remaining African-American Republican in Congress, leaving the Congress in January. He defend Senator Lott, saying he's talked to Senator Lott about this and is convinced that the comments were in no way racially motivated.

So Judy, that's where it stands now.

OK. John Karl at the Capital.

We've been saying there has been criticism of Senator Lott from conservative quarters and we'll mention it later in the program. Including the Family Research Council.

As we've been seeing, Lott apologized for the remarks last night not long after Al Gore urged him to do just that after his interview with INSIDE POLITICS. We aired some of Gore's criticism of Lott yesterday. I want to share now with you the fact that I went on to ask the former Vice President about Lott's defenders who were saying he made an innocent remark at a 100th birthday party.


AL GORE, FORMER VICE PRESIDENT: I don't buy that at all. And I would say that for African-Americans to hear someone in a position of leadership say that our country would be -- would not have the problems we have now if we'd just stayed with segregation, I think it is insulting to what this country is all about.

WOODRUFF (on camera): So just an overstatement at a birthday party...

GORE: I don't buy that. I don't buy that. The majority leader of the United States Senate, one who, after all, has been in controversies in the past for talking -- for praising work of the White Citizens Council or the successor to -- what are they called now? I can't remember the official name, the White Citizen's Council, it used to be called. For him to say that this nation as a lot of problems today that stem directly from not electing a segregationist as president of the United States, look, this is 2002.

Does he want to be the hider of the United States of America? Appealing to the racist sentiments that lie just beneath the surface? I think it's outrageous. This man is in a position of leadership. He is the person who is in charge of shepherding the confirmation process for Supreme Court Justices. Who interprets whether or not we have a commitment to be one nation under law, where all of us are equal regardless of race whether we're one country or not.


WOODRUFF: Again, those comments coming yesterday in that interview. And we'll have more of my conversation with Al Gore ahead. Gore tells us what kind of feedback he's getting as he considers whether to run for president again.

Now, let's bring in our senior analyst, Jeff Greenfield. Jeff, why does this story about Trent Lott continue to go on here? What's behind this thing.

JEFF GREENFIELD, CNN SENIOR ANALYST: One of the things is something you alluded to that you'll talk about later. That while Tom Daschle kind of brushed this off, there were conservatives who were very angry at Lott. The "Wall Street Journal" editorial page today rapped his knuckles. "The Weekly Standard," a conservative publication. "The National Review Online, very tough on Trent Lott. A conservative African-American columnist in the "New York Post," a conservative paper. (UNINTELLIGIBLE) said this kind of language is simply unacceptable.

And one of the reasons, I think, apart from the fact that Lott has had his troubles before when he praised the work of the Counsel Council Of Conservative Citizens, a successor to it White Citizens Council, an organization that was tough on civil rights in the '50s. Is that there's a historical issue here. The Republican party in the south grew because of the backlash against civil rights. After 1964, the civil rights act Barry Goldwater, the only states he carried out a Arizona was southern states.

And a lot of conservative southerners now don't want any part of that history. They talk about values, they talk about patriotism, conservative economics. But they want to distance themselves from any sense of racial sentiment. You remember when Newt Gingrich became speakers of the house, he defended civil rights, so did George W. Bush. This is a potential embarrassment that also could lead to increase the black turnout in future elections, something that conservatives don't want to see happen in the south. They want no part of that kind of rhetoric.

WOODRUFF: All right. Jeff Greenfield, and you're right, we did mention the conservative -- the comments we're hearing from conservatives and we'll bring that up later. It will be a topic in the "CROSSFIRE" when Paul Begala and Bob Novak join us a bit later.

Coming up next, our interview with Senator Mary Landrieu. Can she teach members of her party a few things about winning in the south?

Also ahead, how do you make this decision? (BEGIN VIDEO CLIP)

WOODRUFF (on camera): Does it come down to your gut, finally, and, you know, I heard somebody or read somewhere, somebody said, of course he's going to run. What else is he going to do with his life?


Press Al Gore about his presidential plans. He says he's still mulling. But do his actions speak louder than words?

BROOKS JACKSON, CNN CORRESPONDENT: I'm Brooks Jackson in Washington. The Bush administration has a new pension proposal on the table. Critics say it's a green light for big business to raid older workers' nest eggs.


WOODRUFF: Republicans put everything they had into Saturday's Louisiana Senate runoff, but it wasn't enough. Incumbent Democrat Mary Landrieu defeated Republican challenger Suzanne Terrell.

Senator Landrieu is with me here in Washington. Senator, congratulations.

SEN. MARY LANDRIEU (D), LOUISIANA: Thank you, Judy. It was a tremendous victory for the people of my state.

WOODRUFF: Well, you know, I just heard this afternoon that your pollster at 6:00 on Election Day was still saying -- was saying that he thought you were going to lose. Was this a near death experience for you?

LANDRIEU: Well actually, I had such confidence. I just can't express to you the confidence that I had in the people of my state because I realized that they had experienced a lot of injustice and that they were going to stand up against this false sort of prophecy coming into the state saying, you know, We need labels in Washington. The people in my state, maybe because we're more -- you know, we've been poor, we've had harder times -- believe they need leaders in Washington. They rejected the notion of sending a rubber stamp to Washington and want an independent voice. So I just had confidence if we could build that coalition, we would win.

WOODRUFF: Someone said to me that President Bush -- that the Bush White House overdid it, that they came in too much, they were there too much. Is that what happened?

LANDRIEU: Well, they did it all over the nation, but what happened is in hindsight of the November elections and the light came on and people could see the injustice of people coming from Washington into a state trying to tell people what they needed. People know instinctively what they need a leader.

The African-American community, which is the soul of the Democratic party, rallied. I just can't thank the community enough. There were prayers and shouts of joy. And we pulled together our labor base, which was extraordinary. The labor leaders in Louisiana pulled together. We built the old fashioned Democratic coalition that works and is, I think, taking this state in the right direction.

WOODRUFF: What is going to be your relationship going forward with the Bush White House? Are you going to be able to do business with these people who tried very hard to defeat you?

LANDRIEU: Surely, I will. And I told the people in my state, I'm happy to work with any president. When they put down an idea for the people of Louisiana that works.

But you know what, Judy? My most important relationship is not with the president of the United States. My most important relationship is with the people that I serve. And leaders, I think, should think about that. It's not our relationships in Washington that matter the most. It's when a leader has a good relationship with the people, a relationship of trust and that's what the people of Louisiana understand and believe in. So, it was a great victory.

WOODRUFF: A lot of talk about how the black vote got out, turned out in larger numbers than it had on Election Day, November 5. But also, the white vote that your percentage of the white vote was up from something to like 31 to 38 percent. Now what do you attribute that too?

LANDRIEU: Well first of all, I didn't have to drag black voters out of their homes. They came out on their own feet. They were inspired. They were motivated. They understand injustice and they saw it and they responded to a person who has a good record.

I've got a 91 percent record with the NAACP, one of the highest of any member of Congress. I'm proud of that. The white vote rallied to us. I got 80 percent of my own home parish in New Orleans, which was terrific.

WOODRUFF: Last question, having to do with race. Your colleague in the Senate, Republican leader Trent Lott, is in hot water right now over a statement he made last week, lamenting the fact that Strom Thurmond wasn't elected president and the rest of the country didn't follow behind.

Now he's since apologized, but there's a lot of comment in your party that that's not enough. Where do you come down on this?

LANDRIEU: Well, first of all, it was a very unfortunate statement. It was a very hurtful statement. And I think it was a very wrong statement. And while I think his apology should be accepted, I think what's most important, is his actions should speak more than words. If he'll fight for fair housing, for an increase in minimum wage to give people, poor people, African-Americans, Hispanics -- all people want the same thing, Judy. They just want a chance. They want an opportunity. And we need to be uplifting and respectful of all people in this country, not disrespectful.

So I hope that his actions will follow up his apology and will minister and help the people in our states and across the nation.

WOODRUFF: Senator Mary Landrieu, once again, good to see you.

LANDRIEU: Thank you so much.

WOODRUFF: We appreciate you coming by.

LANDRIEU: Thank you very much.

WOODRUFF: Thanks very much.

Well, Democrats are pointing to the victory of Mary Landrieu as a possible road map to winning elections against a popular Republican president.

Political analyst Ron Brownstein of the "Los Angeles Times" is with me now. Now Ron, are there lessons in what Mary Landrieu did for other Democrats?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Clearly, Judy, I think there are.

And there was a lot of similarity between the arguments that Senator Landrieu used, especially in the runoff portion of the election and what Mark Pryor used right nearby in Arkansas to win in November in the one bright spot for Democrats in the South in the November election.

Both argued that they would support the president when he was right for their state, but would also oppose him when they thought he was wrong for their state and then tried to paint the Republican opponent as a rubber stamp, the language the senator just used.

That's different than the approach that many other Democrats in states that Bush won in 2000, where they went out and emphasized their agreements with them. And what these Democrats did -- Pryor and Senator Landrieu is provide, I think, more of an incentive for the Democratic base to turn out by also highlighting the disagreements.

It's important, though, to note that all, though, of that was predicated on agreeing with the president on a lot of issues, particularly the tax cut, homeland security. So it's not clear that this is a license to simply go out and bash Bush in states where he remains very popular.

WOODRUFF: Well, that was my question, Ron. How do you know that what worked in Louisiana and what worked in Arkansas is going to work in other states -- Southern states where the circumstances may be very different?

BROWNSTEIN: You don't know that it's going to work. But I think you do have some sense that it's a better possibility than what clearly didn't work for Democrats in a number of other states this year.

Look Judy, this victory came at a important time for Democrats. If Senator Landrieu would have lost, there might have been a collective nervous breakdown among the Southern Democrats. They have five Democratic senators up in 2004. John Edwards in North Carolina, Fritz Hollings in South Carolina, Zell Miller in Georgia, Blanch Lincoln in Arkansas and Senator Landrieu's colleague John Breaux in Louisiana.

And all of them have to look over their shoulder at the prospect of President Bush coming in and making the argument that he made effectively in places like Georgia and Missouri this time, that he needs senators who will vote with him.

What Senator Landrieu may have done is point a way for them to parry that. Is it always going to be successful? Maybe not. But it's a little bit more of a reed to hang on than they had the morning after Election Day.

WOODRUFF: All right, Ron Brownstein, thanks very much.

Question, is a new proposal by the White House a peril to your pension plan.

Plus, will he or won't he run again? Coming up, more of my one on one conversation with Al Gore.



WOODRUFF: Al Gore says even if he decides not to take another shot at the presidency, he still wants to influence the political debate. That's why he says he will unveil health care and tax plans next month.

But would he really issue position papers if he weren't planning to run? In our interview yesterday, I asked Gore about his decision making process and the public reaction he's been getting.


GORE: You know, the reaction from people that I've been talking to has been very, very positive. And now, I know there are probably others who have a different reaction who don't come up to me and say hey, you know, I have a negative reaction to this.

But I can tell you at the book signings, the people who come and buy our books and ask us to sign them are overwhelmingly positive. That seems like a fair random cross sample, doesn't it?

WOODRUFF: Does the fact that these polls showing that Bush, if the election were held soon, George W. Bush would beat you 57 to 40 percent, the fact that the Democratic National Committee survey showed that almost half of the members of the DNC don't want you to run again.

GORE: Is that the one that showed many more of them wanting me than any of the candidates? WOODRUFF: I think that's the same one. But almost half said they didn't want you.

GORE: None of that. I don't think that ought to be relevant, and here's why. Public -- you know, there's -- it's almost as if a lot of people get hypnotized by public opinion polls. As if they are accurate predictors of the future. They're not.

In the recent elections, you know, because you're an expert in all of this, the public opinion polls, even ones taken the day before the election, were radically wrong.

And so public opinion polls as an accurate measure of what's going to happen in this country two years from now? I mean, that's not credible to me.

WOODRUFF: You got more votes than George W. Bush did in 2000, as everybody knows. There are a number of Democrats who think you should be president if this whole thing didn't turn out right.

GORE: Those are smart people, don't you think?

WOODRUFF: What's the rationale for Al Gore not trying again?

GORE: Well, you know, I'm not ready to get into all that decision making. And certainly not on the air. I'm just going to get together with my family and make that decision.

WOODRUFF: Politics, a number of the people who were your top campaign staff in 2000 have now signed up with other candidates, Kerry or Edwards or Gephardt. Is that going to be a problem? Have you maybe waited too late to make this decision?

GORE: I think that my decision to take two years off from politics has had both pluses and minuses. For me, it was the right decision. Have there been some costs associated with it? Yes, sure.

And some -- most people who have been strong supporters and loyalists are still there. And some wanted to go ahead and get active in politics. Hey, that's fine. That's fine. That's a necessary consequence of kind of withdrawing from the process for two years.

WOODRUFF: We were told that -- and I guess it's been reported that you haven't been in regular touch with people who are considered Democratic activists, high profile Democrats around the country.

GORE: I've been writing a book and now we're on the book tour. That will be over very soon.

WOODRUFF: That's not a problem. You feel like you're staying in touch with the people you need to stay in touch with?

GORE: Yes. But again, I want to be candid in acknowledging that there are costs as well as benefits to just separating yourself as much as I have from politics for a two-year period. It's not all a plus. There are some people who would have wanted to hear from me who didn't, and I understand that. And I'm sorry. But it was the right thing for me to do.

WOODRUFF: I want to ask you about something else. You've left some reporters with the impression that you would run -- this is not your word, but theirs -- almost as an insurgent. Somebody who would come in, meet with small groups of voters, run a different campaign than what you ran -- if you ran.

Would it be possible to be a different kind of candidate doing that kind of a campaign and be the front runner, who's the best known? Could you really do both?

GORE: I don't know why those things would necessarily be in conflict. I don't think we always have to go back and do things the same way they've always been done.

I think a lot of what goes on in politics today leaves people cold. You know, it's formulaic and it seems gimmicky. I don't know. I think that listening -- not just listening on a surface, but really trying to understand at a deep level what people are saying, what they're concerned about, what their hopes are, what they think the country ought to be and then really trying hard to translate those hopes and dreams into a program that would work to make our country better.

That's really the essence of what Democratic leadership is all about. And if that can be done without all these little media sideshows and gimmicks and stuff, then it might be a good thing.

WOODRUFF: How do you make the decision? Does it come down to your gut, finally? And, you know, I heard somebody or read somewhere the other day somebody said of course he's going to run. What else is he going to do with his life? He's been in public life his whole adult life.

GORE: You know, how do I make a decision like that? When the book tour is over with, I'll just make the decision. And -- but since there's so many factors involved, ultimately, it does come down to a gut feeling. Sure.


WOODRUFF: And he says if he does decide to run in 2004 he says he will be mending fences in his home state of Tennessee which he lost in 2000. He say that will become an even more urgent priority along with efforts to reach out to voters in key states like Iowa and New Hampshire.

Well, when we return: the Carter presidency revisited. Do the Democrat's days in the White House look any different now that he's won a Nobel Peace Prize? Two Carter administration veterans join us next.

(COMMERCIAL BREAK) WOODRUFF: As you can see by this new Gallup Poll, a majority of Americans feel the economy is getting worse. Will the president's new economic team make a difference? The view from the right and the left coming up in the "CROSSFIRE."


WOODRUFF: Looking for a Christmas gift? How about this? Coming up, our Jeanne Moos unwraps a presidential doll that's an earful.


WOODRUFF: An effort to bring peace to one of the most troubled parts of the world was among the highlights of Jimmy Carter's presidency. His time in office was filled with difficult challenges at home and abroad, which ultimately contributed to his political defeat.

Here's CNN's Bruce Morton.


CARTER: I'll never tell a lie. I'll never make a misleading statement.

BRUCE MORTON, CNN CORRESPONDENT (voice-over): He campaigned as a truth seller and voters who had been lied to by other presidents about Vietnam and Watergate elected him. He had two great triumphs, the Camp David accords, under which Israel agreed to return the Sinai to Egypt, and successfully negotiating a Panama Canal treaty.

But he had many problems. He turned down the White House thermostats and said the energy crisis was the moral equivalent of war and voters remembered the gas lines, the long gas lines. And then the whole economy went south, interest rates of 17 percent, inflation soaring. His relations with the Democratic Congress turned sour. The Soviet Union invaded Afghanistan. The president said he was surprised. Others were not. And then, worst of all, Iranian rebels overthrew the U.S.-backed Shah and held Americans hostage in the embassy in Tehran.

The hostage issue preoccupied the headlines, the country and the president.

CARTER: I think the American people understand what the situation is, that it's an unpredictable thing and that we're doing the best we can.

MORTON: It wasn't enough. A military rescue attempt failed. Carter's secretary of state, Cyrus Vance, resigned in protest. The hostages, the economy set the stage for a telling question from the president's Republican opponent in the 1980 campaign debate.

RONALD REAGAN, PRESIDENT OF THE UNITED STATES: Are you better off than you were four years ago? MORTON: The voters answered. Ronald Reagan got 489 electoral votes in that fall's election, Jimmy Carter got 49. Iran freed the hostages the day of Reagan's inauguration.

REAGAN: I, Ronald Reagan...

MORTON: Bruce Morton, CNN, Washington.


WOODRUFF: Well, Jody Powell and Stuart Eizenstat are among those who know Jimmy Carter best. Powell served as Carter's White House press secretary. Eizenstat was his domestic policy adviser. Before the two men headed to attend Norway to attend today's ceremony, I asked them what they expected to be thinking when they watched Carter accept the Nobel Prize.


STUART EIZENSTAT, CARTER WHITE HOUSE DOMESTIC POLICY ADVISER: I can tell you that my emotion when I first heard the news going into work in the morning was to cry like a baby. I was so pleased for him. It was so long awaited, so long deserved, and so richly deserved. And I think we all feel a sense of pride. He said to us that, well, we had a piece of that. But we all said, "No, this is yours."

JODY POWELL, CARTER WHITE HOUSE PRESS SECRETARY: I think one of the things that was particularly gratifying was that the Nobel Committee recognized not only his achievements as a former president, but the significant achievements of Jimmy Carter as president of this country.

EIZENSTAT: Oftentimes, people say, well, he's the greatest ex- president we've ever had. But I think this gives us the opportunity to focus on the fact that there were a lot of enduring legacies that he left as president.

WOODRUFF: Well, that's what I want to ask you about, because it's become almost a mantra for people to say Jimmy Carter, great ex- president, the model of a former president, but his administration, the words are everything from didn't work so well, all the way to disaster.

POWELL: The fact of the matter is, that Jimmy Carter not only had a successful presidency, but a remarkably successful presidency.

If you look just at his success rate with the Congress, according to "Congressional Quarterly," his batting average was one of the highest of any president over the past 50 years. And this was a president who no doubt asked Congress to do more tough, controversial things than just about any president we've had.

EIZENSTAT: I think that one of the problems, Judy, is that we measure success by whether you're reelected.

And he had two great disabilities going into the reelection. One was roaring inflation and high interest rates, which were, significantly, the result of an external shock. That is the Iranian Revolution and the oil shock and declining worker productivity and the hostage crisis. Both problems came from the Iranian Revolution.

And I think, but for that, he probably would have been reelected. But if we can look at what his enduring legacies are in that first term, and you look at the Middle East peace process, which is still the basis for our Middle East policy, the U.S.-Egyptian peace agreement, human rights is now the fundamental touchstone of all American presidents abroad, the normalization with China, getting energy pricing right, deregulating our airlines, it was a remarkably successful one-term presidency.

But, again, we often view success by whether you earn reelection.

POWELL: Why it's important to properly understand those four years is because of the lessons that can be drawn.

I'm afraid that people now believe that, if you do the right thing and take the political heat, that is tantamount to political suicide. The fact of the matter is that Jimmy Carter almost certainly would have been reelected, despite divisions in his own party, despite all of the controversial issues that he pushed, absent the oil shock and the hostages, matters which no president could have controlled or prevented. So, it is possible.


WOODRUFF: Jody Powell and Stuart Eizenstat were with Jimmy Carter today when he was given the Nobel Peace Prize.

Well, when politicians get angry, you may find Paul Begala and Bob Novak eager to jump into the fray. Up next, the "CROSSFIRE" duo take on the Trent Lott controversy and whether his apology should be the end of it.


WOODRUFF: With us now from the CNN "CROSSFIRE" set at George Washington University: Paul Begala and Bob Novak.

Gentlemen, Trent Lott made those comments. He's now apologized for them. The Black Caucus is still upset. Some Democrats are still upset, but so are some conservatives.

Let me just read quickly what Ken Conner with the Family Research Council said. "Such thoughtless remarks -- and the senator has an unfortunate history of such gaffs -- simply reinforce the suspicion that conservatives are closest racists and secret segregationists."

Is there a problem for Trent Lott among conservatives, Bob Novak?

ROBERT NOVAK, CNN POLITICAL ANALYST: Well, I think it is with "The Weekly Standard" and the editorial page of "The Wall Street Journal" and the other la-di-da conservatives inside the Beltway. It just shows how far political correctness has gone. This is really one of the silliest stories I have ever seen. The idea that Trent Lott is a segregationist is just absolutely nonsense. He made a mistake. He says he made a mistake. Tom Daschle says, "OK, you made a mistake." It is really ridiculous for conservatives to join the P.C. bandwagon.

WOODRUFF: Paul Begala, is this thing just going to blow over?

PAUL BEGALA, CO-HOST, "CROSSFIRE": No, it's not, because Democrats won't let it, if they have any guts, any spine whatsoever.

The man, in his half-hearted, self-serving nonapology, said: I chose the wrong words. Well, gee, what words are proper to embrace segregation, to say that America would have been better off with a racist segregationist president instead of Harry Truman? Democrats, if thank have any spine, should remind voters about this in November. But they should also torment every single Republican senator before they choose Trent Lott to lead the party of Lincoln again after these racist statements that he made.

NOVAK: Well, Paul is always looking for a political angle and something to run in the campaign. I think it would be a silly thing to try to run.

But of course it wasn't matter of endorsing segregation. Trent Lott was trying to be nice to the old man. People get extravagant when they have these roasts. I think, if I ever got to a retirement party on Paul Begala's 100th birthday, I'd say something silly.


WOODRUFF: Let me turn you both quickly to the president's new economic team. We've heard about the treasury secretary. We've now heard about the SEC chairman. But the choice, apparently, to be the head of the president's Council of Economic Advisers, Steve Friedman, formerly chairman of Goldman Sachs, we're now hearing from the Conservative Club for Growth that Friedman is deficit-phobic and not somebody they want to see advising the president at the president's ear.

What's going on, Paul Begala? Bob Novak? Either one.


NOVAK: Can I correct you on two points?

First place is, he's not the head of the Council of Economic Advisers. He's head of the National Economic Council.

WOODRUFF: Thank you.

NOVAK: That's being kind of nitpicky.

WOODRUFF: Thank you for straightening me out. NOVAK: And, secondly, the chairman of the SEC is not part of the economic team. That is the ridiculous thing that the journalists have been saying, that this is part of the economic team. It's a regulatory agency and it's completely different.

Now, the idea of Steve Friedman, Steve Friedman hasn't been appointed yet. And the word is that he's got health problems. Well, did he develop the health problems this week when he found that some conservatives didn't like him contributing to Chuck Schumer and belonging to the Concord Coalition? I wonder about that.

BEGALA: Well, in fact, Bob Novak sells his own role short. Bob has been one of principal conservatives banging the drums against this guy. Steve Moore was on our program last night calling him too deficit-phobic.

I like the idea that he may a little Rubin-esque, not in the sense of being soft and plump, but in the sense of having worked with Bob Rubin him at Goldman Sachs. He is a Republican. But the new guy the president announced today, Mr. Donaldson, to run the SEC is a contributor to Hillary Rodham Clinton. So maybe there's a glimmer of hope for the Democrats that there will be changes in the economic scheme


NOVAK: Mr. Donaldson is not a policy-maker. He's a regulator. Can you understand that?

WOODRUFF: All right.

BEGALA: I didn't say he was. I said he's a Hillary donor, which he is. God bless him.


WOODRUFF: All right, we're going to have figure out right from left next time.

Bob Novak, Paul Begala, thank you both.

NOVAK: Thank you.

BEGALA: Thanks, Judy.

WOODRUFF: Proposed changes in rules governing pension plans could have a major impact on workers young and old. Up next, our Brooks Jackson checks the balance sheet on so-called...


WOODRUFF: Some news we want to share with you about a ship with suspicious cargo seized in the Indian Ocean.

For the very latest, let's go to the Pentagon to CNN's Barbara Starr -- Barbara. BARBARA STARR, CNN PENTAGON CORRESPONDENT: Judy, hello to you.

Yes, CNN has learned a U.S. military explosive ordnance disposal team, U.S. military weapons specialists, are on board at this hour, on board a ship that has come out of North Korea that was boarded yesterday in a maritime intercept operation in the Indian Ocean.

This incident began several days ago when a ship coming out of a North Korean port called the Sosan (ph) began making its way across the Indian Ocean towards the Arabian Gulf region. It was boarded yesterday by two Spanish warships. When the crew, the Spanish naval crew that boarded this suspicious ship, looked at the cargo, which was supposed to be cement, they found containers buried in the cement. They opened one of those containers and it had suspected missile parts.

The Spanish believed that they were looking at missile parts being illegally shipped into the region. They called for assistance. A U.S. military disposal team is on board the ship now. It is being held in this region southeast of Yemen. The cargo is unstable. We are told that U.S. intelligence had been following this ship since it came out of North Korea several days ago. No word on whether it was headed to Iraq or Yemen with that missile cargo -- Judy.

WOODRUFF: All right, Barbara Starr, and we know you're going to continue to follow that story. Thanks very much.

Well, after the Enron debacle, many politicians were calling for greater safeguards for employee pension plans. Today, the Bush administration is proposing new pension regulations.

But, as our Brooks Jackson explains, critics say the change would help corporations and hurt millions of workers.


JACKSON (voice-over): For millions of workers, the new breed of pension plans is major change. Now the Bush administration is proposing new regulations, giving a green-light to the so-called cash benefit pensions. Critics say it's a go-ahead for corporations to raid pension funds.

REP. BERNIE SANDERS (I), VERMONT: While I think it's a disaster, it doesn't surprise me. But I think it's going to have the effect of cutting back on the pensions that millions of American workers, mostly older workers, expected to receive.

JACKSON: Nearly 400 large companies, like IBM, already have made the change to the new type of pension, often saving millions in the process. But the Internal Revenue Service stopped approving new ones three years ago after protests over apparent age discrimination. If the new regulations become final, approvals could resume by next summer.

KAREN FRIEDMAN, PENSION RIGHTS CENTER: What the administration's proposed regulations would do is basically give a lot of leeway to employers on how to implement these. And we fear that this will lead to a lot of cutbacks of older workers' benefits.

JACKSON: Under the traditional defined benefit pension plans, retired workers get a guaranteed monthly payment, typically based on their highest years of earnings. Under the new cash balance plans, workers get a lump-sum payment, based on all their years of earnings, low and high, plus interest.

That often favors younger workers who change jobs. Cash balance plans are portable. But it also can produce lower benefits for older workers with many years at the same company. Unlike the increasingly popular 401(k) plans, which proved so risky for Enron employees, the cash balance plans have some advantages.

JOHN SCOTT, AMERICAN BENEFITS COUNCIL: They are insured by the federal government. The employer shoulders the risk of investment as well as funding. That's not true with 401(k) plans, which are ubiquitous today. So, I think there are a lot of good things about these cash balance plans.


JACKSON: The issue could come to a head in April, when the administration plans public hearings. Look for plenty of organized protests before then -- Judy.

WOODRUFF: We haven't heard the end of it.

All right, Brooks, thanks very much.

More INSIDE POLITICS after this.


WOODRUFF: If you still haven't come up with the perfect holiday gift for your favorite political junky, search no more.

CNN's Jeanne Moos found a doll who speaks the language of the Bush presidency.





JEANNE MOOS, CNN CORRESPONDENT (voice-over): And you will not believe what they've done to the president. Dolled him up...


UNIDENTIFIED MALE: Oh, gosh. MOOS: And put words in his mouth, his own.


MOOS (on camera): Have you seen the talking Bush doll?


MOOS (voice-over): Push a button on his back and he'll deliver one of 17 sound bites.

VOICE OF GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Freedom itself was attacked by faceless cowards.



MOOS (on camera): It's a talking president's doll. Here he comes.

UNIDENTIFIED FEMALE: The only place I want to see him is out of office.

MOOS (voice-over): But at this office...

JOHN WARNOCK, FOUNDER, TALKINGPRESIDENTS.COM: Talkingpresidents, can you hold please?

MOOS: Orders are pouring in after some media mentions. They sold 10,000 dolls, mostly through the Talkingpresidents Web site.

WARNOCK: I like toys that talk. We like Bush. So we thought it would be the great first person to do.

MOOS: A staunch Republican, California contractor John Warnock dreamed up the idea along with his father-in-law.

JIM WESSLING, TALKINGPRESIDENTS.COM: Amazed and amused and we need additional help. We need additional phone lines.

MOOS: They sell for 30 bucks apiece plus shipping. Already, "Saturday Night Live" has picked up on the talking doll.

UNIDENTIFIED FEMALE: Actually, it's only one phrase. It just takes him 17 tries to get it right.

MOOS: Among the 17 sound bites taken from real speeches, there are three Bushisms.

VOICE OF GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I don't think we need to be subliminable...

MOOS: Ranging from subliminable to...

VOICE OF GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And you're working hard to put food on your family.

MOOS: Families with food on them, countries held hostile rather than hostage.

VOICE OF GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Hostile or hold our allies hostile.

UNIDENTIFIED MALE: Now, he's not going to actually let the doll take his place for certain during the press conference is he?

MOOS: This Democrat found the doll tasteless.

(on camera): Well, you think this is tasteless, wait till you see this.

UNIDENTIFIED FEMALE: Oh, let me see. What? Oh.

MOOS (voice-over): The Saddam Hussein doll is put out by a completely different outfit, Two versions of Saddam are sold as villains.

UNIDENTIFIED FEMALE: He just says "kill 'em all."

MOOS: Actually, the Saddam doll doesn't talk. As a form of fashion ridicule, it can be accessorized with a leather outfit that includes a riding crop.


MOOS: Folks who buy the talking president doll tend to be Bush supporters.

UNIDENTIFIED FEMALE: It was an honor to meet you in New York.


MOOS (on camera): What did he say?

UNIDENTIFIED FEMALE: I know you come from Texas.

MOOS (voice-over): The makers say they didn't ask for the president's permission, but they are sending some dolls to the White House, which had no comment. More talking presidents are planned and when it's Bill Clinton's turn, there's one line the doll makers say is certain...


Jeanne Moos, CNN, New York.


WOODRUFF: Surely, one of those dolls will find its way to the president. That's it for INSIDE POLITICS. I'm Judy Woodruff.


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