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House Republicans Slam Republican Senators Over Tax Cuts; Fierce Fight Breaks Out Over Judicial Nominees

Aired May 9, 2003 - 16:00   ET


ANNOUNCER: A bitter tax fight within party lines. Republicans in the House slam their colleagues.

UNIDENTIFIED MALE: They're not acting like Republicans.

UNIDENTIFIED MALE: This is outrageous.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The judicial confirmation process is broken. And it must be fixed for the good of the country.

ANNOUNCER: A fierce fight over the president's judicial nominees.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: That is exactly the success level of this administration when it comes to judicial nominees, 98.4 percent. Mr. President, if it ain't broke don't fix it.

ANNOUNCER: The senior senator from Florida, or the president of the United States? Which one captured the political play of the week? Stay tuned.

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


JUDY WOODRUFF, HOST: Thank you for joining us.

After days of White House pressure and behind-the-scenes bargaining, scaled-down versions of the president's proposed tax cuts are making their way through Congress. Just a short time ago, the House passed a bill along party lines reducing taxes by $550 billion. The Senate plans to vote next week on a smaller package of cuts. Among the key points in the House version, speeding up some proposed income tax cuts, reducing taxes on corporate dividends and capital gains, and new cuts in taxes on small business investments.

Now, the House bill falls short of the $726 billion in cuts that was first requested by the president, but shortly after the measure passed, Mr. Bush issued a statement praising the House for passing a bill that he said will, quote, "spur economic growth and create jobs for American workers." Our Kate Snow is on Capitol Hill now with more on the tax cut debate and the battles still ahead to reconcile the House and Senate versions. Kate, some House Republicans are not very happy with what's been going on in the Senate.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT: Judy, remember a few weeks ago, House Republicans were pretty upset when Senator Chuck Grassley cut a deal, essentially, to settle on that lesser figure, on that $350-billion figure over in the Senate. Well, today, as they voted here in the House on their tax bill, I'm told there was a lot of grumbling among House Republicans on the floor of the House, kind of in the back of the room, talking about the fact that Senator Grassley had to make some real changes to make what is essentially a $433- billion package fit into that $350-billion window that he had created yesterday in the Finance Committee.

Now, to make that happen, the bill finds extra money by essentially raising taxes in other areas to pay for the president's tax cut. There are about 30 different or more than 30 offsets in the Senate bill. The one getting the most attention would take away what currently exists, which is that people who live overseas, Americans overseas can live tax-free on their first $80,000 of income. They don't have to pay taxes on that. The Grassley bill would take that away. The House Republicans called that today lunacy and said that would affect about 40,000 teachers living overseas.


REP. RON LEWIS (R) KENTUCKY: I thought the Senate couldn't do anything that I would be any more disappointed with. Here they come up with this idea and prove me wrong. This is outrageous and I didn't come here to Washington to increase taxes. I came here to cut taxes.


SNOW: Now, Senate Republicans are none too happy with what they're having to do either. An aide to Senator Olympia Snowe said today that he thinks she's probably the only one who is really happy with the package that came out of the Senate Finance Committee yesterday. She, of course, being the one that helped orchestrate that deal. I talked with majority leader Tom DeLay in the House, who says he's not real happy with it either in principal. Of course, he hates the idea, he says, of raising taxes, but he's not too worried.


REP. TOM DELAY (R-TX), MAJORITY LEADER: Actually, from my perspective, I don't care what they pass out of the Senate, just so long as they pass a bill. Because the real work will be done in the conference committee where we come together and work on policies that will have real impact on the economy.


SNOW: And DeLay acknowledges Judy that it's going to be a messy fight. He says of course no House conservative is going to vote for a bill that even implies that it raises taxes. He says they would sooner torpedo this bill than do that. But he says he doesn't think it is going to come to that, Judy. He thinks there will be enough Republicans in the Senate to help out the president, and he said maybe even some Democrats too. Next week, President Bush travels to several key states where there are Democrats who might be on the fence -- Judy.

WOODRUFF: And we may be talking to one of them in just a minute.

Kate Snow at the Capitol, thanks very much.

Well, a key sticking point throughout this debate has been the president's proposal to eliminate the tax on corporate dividends. Mr. Bush argues that that tax is unfair. Democrats say the idea would only benefit the wealthy. Simply put, dividends are the payments that companies make to their shareholders. The IRS currently taxes both company profits and investor dividends. About a quarter of Americans reported dividend income in the year 2000. Sixty percent of those people earned more than $100,000 a year.

For more now on taxes, dividends and the overall tax cut debate, I'm joined from Capitol Hill by Democratic Senator John Breaux of Louisiana. He's a key player on the Senate Finance Committee. Senator, we've just been talking with Kate Snow, a number of changes made in the Finance Committee. Tax increases put in there to offset the tax cut. If those increases, which I know you're not happy with, are taken out, couldn't this whole thing fall apart, though?

SEN. JOHN BREAUX (D), LOUISIANA: Well, Judy, I think what we're witnessing is a political war, but the combatants are Republicans battling Republicans. I think we should sort of step aside and watch the event. I think we've created a tax measure where almost everybody finds real serious problems with it. Find very few people, either Republicans or Democrats, that like it, which I think says something about the package.

WOODRUFF: Well, right now you've got the Republicans in the House, they don't like not only -- the fact that some taxes are increased, but they don't like the fact that the whole dividend proposal by the president has been scaled down. But, again, if that gets changed in conference, aren't you going to lose some of the people on board in the Senate and the House, for that matter?

BREAUX: Well, Judy, you're exactly right and there lies the problem. How do we fix it? It's going to be very difficult. The problem is that we're going to have to borrow money to give this tax cut or, secondly, we're going to have to increase taxes on other Americans. The Senate bill increases taxes and borrows in order to give a tax cut, which many economists think will not be very effective in actually stimulating growth. I can understand why so many people do not like the product of either in the House or the Senate. Some think it's too expensive, some think it's not as expensive as it should be. This package has a lot of problems in the form that it is in now, either in the House or in the Senate version.

WOODRUFF: Do you know right now what number you would support? BREAUX: Yes, we had said in a bipartisan statement before the process began that a $350 billion net tax cut would be something that's acceptable. In trying to tailor it to actually help people that need help. I mean, the dividend tax cut is an example, 92 percent of the people in my state of Louisiana do not pay taxes on dividends. Only 8 percent are affected. And it's very difficult to say we're going to spend $400 billion to fix a problem that doesn't exist.

WOODRUFF: Senator, the president has gone to Arkansas, and we know that the Arkansas Democratic senator, Branch Lincoln, was the only Democrat voting with the majority in the Finance Committee to get the compromise through. The president is going to be traveling to Nebraska, Senator Van Nelson. You are a Democrat up for reelection next year. Are you feeling heat from the president on this?

BREAUX: No. I understand the politics of it. I think that even more important than the politics, however, is to do something that's economically correct. I think the people ultimately respect that. They want you to conduct policies that are not just politically popular, it's always politically popular to cut taxes. The problem is we're borrowing money to do it, and we're margining the future of our children to give a tax cut that in some areas is not good tax policy. There's a lot in common. There is a lot of things in the president's package that I would strongly support, the rates and marriage penalties and the child deduction are good policy. There are some things we should not do, though.

WOODRUFF: Real quickly, Senator, in an effort to do something about getting the president's judicial nominees through, the Senate majority leader, Bill Frist, has come up with a plan to make it easier to break a filibuster. Are you going to go along with that?

BREAUX: No, this is not a problem. We've approved 124 of the president's judges. There have only been two of them that have had a problem. You don't have to change the rules of the United States Senate just to get people who have not been confirmed, confirmed when you have a record number being confirmed.

WOODRUFF: All right. Senator John Breaux, it's always good to see you. Thanks very much for talking with us. We appreciate it.

BREAUX: Thank you, Judy. Thank you.

WOODRUFF: As I just mentioned to Senator Breaux, the Senate majority leader Bill Frist did, today, introduce a bill that would change Senate rules to prevent Democrats from staging indefinite filibusters designed to block White House judicial nominees. And his action follows comments this morning by the president who blasted Senate Democrats for blocking his appeals court nominees, Miguel Estrada and Priscilla Owen.


BUSH: More appeals court nominees have had to wait over a year for a hearing in my presidency than in the last 50 years combined. This is not just business as usual. This is an abdication of constitutional responsibility and it is hurting our country.


WOODRUFF: You just heard Senator Breaux disagree with the president, but a short time after the president spoke, Democratic Senate leader Tom Daschle defended his party's actions, saying the overwhelming majority of Bush nominees have been confirmed. And he said there's no reason to modify Senate rules.


DASCHLE: I don't know of another administration that has enjoyed the success in confirmations of its judges as this administration has. 124-2, that's the score.


WOODRUFF: After noting the high percentage of confirmations, Senator Daschle defended Senate members' rights to block nominees that they consider outside the legal mainstream.

Ahead here, a repeat performance by a wartime president. Bill Schneider joins me next to deliver the political play of the week.

Also, a mother's day edition of our "Campaign News Daily." The Democratic presidential hopefuls are all over the map.

And later, the political outtakes that escape the headlines. Candy Crowley on the political week it was.

You're watching INSIDE POLITICS, the place for campaign news.


WOODRUFF: Ignoring pleas from leading Republicans, including the president himself, former Illinois Governor Jim Edgar today ruled out running for the Senate. Edgar was a White House choice to run for the seat now held by Republican Peter Fitzgerald. Fitzgerald announced earlier that he will not seek reelection next year.

Does George W. Bush have an unfair advantage heading into the next election?

Coming up, our Bruce Morton with some thoughts on the power of the presidency.

INSIDE POLITICS back in just 60 seconds.


WOODRUFF: Sometimes, a good political story, you know, just won't go away. And that is the case with one of the more dramatic visual images of the last week or so. With me now to explain, our senior political analyst Bill Schneider -- Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, Judy, you know, we've never seen a play of the week come back for an encore. But last week's play had legs, as they say, in Hollywood. So, play it again, guys.


SCHNEIDER (voice-over): This President Bush intends to run for reelection as the commander-in-chief. He opened the 2004 campaign this week on the deck of the Abraham Lincoln, with the "Political Play of the Week." That was last week. This week, some Democrats complained bitterly.

SEN. ROBERT BYRD (D), WEST VIRGINIA: I do question the motives of a deskbound president who assumes the garb of a warrior for the purposes of a speech.

SCHNEIDER: Well, President Bush is commander-in-chief, and the war in Iraq was very much his war. What got the Democrats dander up was the revelation that the ship was a lot closer to port than originally announced. President Bush could have taken a helicopter, instead of landing like "Top Gun."

ARI FLEISCHER, PRESS SECRETARY, WHITE HOUSE: The president wanted to arrive on it in a manner that would allow him to see an arrival on the carrier the same way pilots got to see an arrival on a carrier.


UNIDENTIFIED MALE: It was also a really good landing.

SCHNEIDER: At the risk of appearing petty and grudging some Democrats appeared, well, petty and grudging.

REP. HENRY WAXMAN (D), CALIFORNIA: We've asked the General Accounting Office to tell us how much money all this cost, and I hope the president's campaign will pay the taxpayers back for the costs.

SCHNEIDER: Democrats accuse President Bush of politics. Oh, the horror!

REP. ROBERT MENENDEZ (D), NEW JERSEY: If the president's not going to use this in his commercials next year for his run for presidency, it would be very interesting to see that he doesn't do that.

SCHNEIDER: The more critics complained, the more the pictures ran. And ran and ran.

REP. PETER KING (R), NEW YORK: Let me just say, as a Republican politician, I am delighted they keep raising this issue because it helps the president.

SCHNEIDER: Yes, it does. It created an unexpected bonus for the White House. The political replay of the week.

(END VIDEOTAPE) SCHNEIDER: There's a famous story from the 1984 campaign when CBS News ran a story that juxtaposed stirring images from President Ronald Reagan's "Morning in America" campaign with the sometimes harsh reality of his policies. Now, the White House called CBS afterwards to thank them for the story. It didn't matter what the correspondent was saying, the White House said, the only thing that mattered was the pictures -- Judy.

WOODRUFF: So Bill, this is the first time you've ever done a replay of the week, right?

SCHNEIDER: This is a first.

WOODRUFF: OK. That's going down in our INSIDE POLITICS library. OK, Bill Schneider, thanks very much.

We're going to check the political calendar next in our "Campaign News Daily." Sunday is Mother's Day, and at least one candidate has already figured out how to honor mom without leaving the campaign trail.


WOODRUFF: Checking the headlines now in our "Campaign News Daily," we thought we'd give you an update on the Mother's Day weekend travels of the Democratic hopefuls. Senator Bob Graham is in New Hampshire taking part in another one of his well-known workdays. Graham is working in Durham, New Hampshire teaching history and government at Oyster River High School.

Senator John Edwards has gone back to school as well. He is visiting Atlanta's Grady High School today. Tomorrow night in Atlanta, he will be the keynote speaker at the human rights campaign gala. A speaking engagement will keep Edwards away from Saturday night's Democratic Party dinner in Polk County, Iowa. But Elizabeth Edwards will be standing in for her husband. Howard Dean, Dennis Kucinich and Bob Graham are all expected to attend.

In honor of Mother's Day, Senator Joe Lieberman will be joined by his mom Sunday in Iowa. Marcia Lieberman will join her son for the Mother's Day brunch at a Des Moines synagogue. This is the photo of Senator Lieberman and his mom taken two years ago on her 86th birthday. Happy Mother's Day to all you mothers of candidates.

Heading toward next year's presidential election, neither side speaks with one voice, we know, but the Republicans at least have an official line to follow. And that's an advantage, but it's not the only one for President Bush as CNN's Bruce Morton reports.


BRUCE MORTON, CNN CORRESPONDENT (voice-over): The 2004 election could be about real things. Foreign policy, should the United States pursue President Bush's policy of preemptive war, America attacks first, striking countries it disapproves of? Or should it return to a more traditional role as a member of alliances of the United Nations? It could be about that, but the Democrats don't all agree on a position. And whoever the nominee is probably won't speak for the whole party.

2004 could be about health care. Congressman Richard Gephardt introduced a sweeping plan for universal coverage, repealing the Bush tax cuts to pay for the program. But, again, Democrats don't agree on the Gephardt plan. Howard Dean and most of the others would go more slowly, and they don't all have the same road map for getting there. Tax cuts? Most of the Democratic candidates would stale back the Bush cuts to one degree or another. Gephardt, as I said, would repeal the lot of them. So, again, the party doesn't speak with one voice. There isn't a Democratic position. There are several.

Republicans aren't always perfectly united either, of course. The president's latest tax plan came to grief in Congress. And they don't all agree with Rick Santorum who likened a homosexual act between consenting adults to crimes like incest and bigamy, which have victims. Still, they're not as split on as many things as the Dems.

And the president has one other huge advantage, his office. His campaign stops get all-out coverage wherever he goes. The cable all- news networks often carry his speeches live, and the White House briefings and the Pentagon briefings and so on. It's impossible for any of the Democrat hopefuls to reach that kind of volume. CNN covered Senator Bob graham's announcement this past week live, but didn't carry his whole speech. The president's advantage in coverage will lessen once he's running against a single Democratic nominee, of course, but a sitting president still has the edge in media power.

(on camera): So is George W. Bush a lock for reelection? No. A really terrible economy could do him in. That's usually the dominant issue in American elections -- inflation, recession, all of that. He could lose, but don't, not even you Mr. Bennett, don't bet on it.

Bruce Morton, CNN, Washington.


WOODRUFF: Ah, Bruce.

Still ahead, some of the things we have not seen on the political trail until now. Candy Crowley's outtakes.



WOODRUFF: The 24-hour news cycle is just not long enough for reporters who always have more to say than there is time to say it. And that brings us to the first installment of outtakes, the political scenes that didn't make air this week.

Our reporter, Candy Crowley.

(BEGIN VIDEOTAPE) CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Life is in the moment, and so is the best of. One presidential candidate got so caught up in her moment ...

CAROL MOSELEY BRAUN (D), PRESIDENTIAL CANDIDATE: You may not know a whole lot about me. I'm a former senator, a former Democrat, a former ...

CROWLEY: She forgot she was a Democrat but remembered the magic.

BRAUN: But what you may not know about me is I come from a long line of voodoo ladies. And I can tell you that this Bush economic policy gives voodoo a bad name.

CROWLEY: Given no shot at winning the nomination, Carol Braun in the spin room after a debate, proved that life is lonely at the bottom too. And from no spin to worse spin we offer up this news release. Howard Dean complaining that his words, "Bush lite," have been stolen by Richard Gephardt.

And in the center square of a Miami Lakes shopping center, Bob Graham announced his candidacy. He is long on experience and short on sex appeal. But we give his campaign "A" for effort. Graham is known for his attention to detail and prolific diary keeping.

SEN. BOB GRAHAM (D-FL), PRESIDENTIAL CANDIDATE: Would you like to put your name in my notebook? Would you mind using this pen?


GRAHAM: It's just it's easy to see it.

CROWLEY: In New Hampshire, Carl Rove, the "it" boy of political consultants was mobbed at the state's eggs and politics breakfast, which they held at noon, serving salad, quiche and chocolate cake. Later, Rove told college students about his career path.

KARL ROVE, WHITE HOUSE POLITICAL ADVISER: When I was in high school, I was the complete nerd.

CROWLEY: Wow, that is so hard to imagine.

We are mindful that politics is a serious business so we end on a serious note. The state Democratic convention in South Carolina.

REV. AL SHARPTON (D), PRESIDENTIAL CANDIDATE: I learned one thing in my grandfather's field (ph) in Alabama. The way to move a donkey is to slap the donkey ...

CROWLEY: Keep collecting moments, we will too.

Candy Crowley, CNN, Washington.


WOODRUFF: Just like it in politics to serve chocolate cake and salad for a politics and eggs breakfast. More next week.

Well, that's it for today's INSIDE POLITICS. Thanks for joining us. I'm Judy Woodruff.

"CROSSFIRE" starts right now.


Fierce Fight Breaks Out Over Judicial Nominees>

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