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Davis, Schawarzenegger Meet in Sacramento; Senate Democrats Vow to Block Medicare Compromise

Aired October 23, 2003 - 16:00   ET


ANNOUNCER: An awkward transition. Gray Davis welcomes Arnold Schwarzenegger to the California governor's office.

ARNOLD SCHWARZENEGGER (R), CALIFORNIA GOV.-ELECT: He's going to show me the ropes. He's going to give me some of the inside information.

ANNOUNCER: A season of change in New Hampshire. With the '04 Democrats vying for attention, what's the primary motivation of voters?

KATHLEEN SULLIVAN, N.H. DEMOCRATIC CHAIR: Democrats in New Hampshire want a candidate who will defeat George Bush.

ANNOUNCER: Not so fast. Senate Democrats vow to block a Medicare compromise, citing poison pills in the prescription drug plan.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We will not support a conference report that is going to do harm to the Medicare system.



JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us.

Arnold Schwarzenegger says that Gray Davis has been very gracious during this political transition period in California. But at their first meeting today since the recall election, their kind words and stiff smiles couldn't entirely mask the animosity of weeks past.

CNN's Frank Buckley is with us from Sacramento.

Frank, this was a very bitter campaign at points. What was it really like in the room? You were there with them when the two -- the outgoing and incoming governors were together.

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Well, it was pretty stiff and awkward at first, and you had the sense that, well, these were two opponents who fought each other hard during this campaign. But they did their best to put on a good face, to talk about things that they had in common, to talk about things that they agreed upon, and we didn't see them get into any of the rhetoric that we saw during the campaign.

In fact, after the photo-op meeting that we all had an opportunity to see, either on video or some of us saw in person, we saw Governor Schwarzenegger -- or Governor-Elect Schwarzenegger, excuse me, emerging with Governor Davis and had our boom mike over the top of them -- that's one of those microphones on the end of a long stick -- and -- and we could overhear a bit of the conversation between the two of them. And I actually heard Governor-Elect Schwarzenegger say to Governor Davis, something to the effect that perhaps we can get together at some point in the future at Spago. So -- and that's a restaurant there in Beverly Hills. So a little bit of the Hollywood coming here to Sacramento and it appeared as if they had a good chat and that graciousness that you talked about was still there.

During the photo-op session, a few of us had a chance to ask questions, and one of the questions to Arnold Schwarzenegger was, Are there any hard feelings left over from that bitter campaign?


SCHWARZENEGGER: The governor has been very gracious and has been absolutely fantastic, not only with his phone call the day after election, -- he offered right away his -- you know, to work together with us and to make it a smooth transition, and he kept his promise -- every day we're working with his office.


BUCKLEY: And as you heard, Governor-Elect Schwarzenegger said -- say Governor Davis has said from the beginning that it will be a smooth transition.

As to whether or not he was going to be giving advice to Arnold Schwarzenegger, here's what Governor Davis had to say about that.


GOV. GRAY DAVIS (D), CALIFORNIA: One piece of advice I will -- pleased to share with everyone is something my wife gave me the first 10 days I was in office. And she said -- I was complaining that everybody was trying to get me to work on their issue right now, immediately. And she said, "Just enjoy every moment. This is the best job you'll ever have, even the bad moments. Enjoy it."



BUCKLEY: Governor-Elect Schwarzenegger continuing to go around meeting various officials here in state government. A bit of news came out of his visit to the capital as well. His transition staff announcing the -- that Pat Clarey has been announced as the chief of staff for the transition team. She's a former deputy chief of staff under Pete Wilson. And also, Judy, we expect now that the swearing-in ceremony of Arnold Schwarzenegger will take place on November 17. That date isn't a firm date yet, but that's the date that -- that they're moving toward -- Judy.

WOODRUFF: All right. Frank, a little less than a month away. And it looks like they're letting bygones be bygones, but we shall see.

All right. Frank Buckley, thanks very much.

Now we turn to New Hampshire, where Wesley Clark is expected to be the only presidential candidate attending a major Democratic dinner tonight. That's a nice perk for a man quoted today as saying that he -- quote -- "does not have a realistic shot of winning the Granite State." Some of Clark's rivals have said to been staying away because they were told the event was not supposed to be about presidential politics.

But in the lead-up to the primary, it's hard to escape presidential politics in New Hampshire.

CNN's Dan Lothian is in Manchester.


DAN LOTHIAN, CNN CORRESPONDENT (voice-over): The changing of seasons in New Hampshire means cold weather is on the way. But the political climate is just heating up.

Strategists and pollsters say in the 2004 presidential primary race, this battleground state is more critical than ever.

ANDREW SMITH, UNIV. OF NEW HAMPSHIRE: Both because Iowa's been somewhat diminished by Clark and Lieberman dropping out of that camp -- contest. Plus, the frontloaded nature of the rest of the primaries.

LOTHIAN: In other words, a win here on January 27 means huge momentum going into seven primaries a week later.

That's why retired General Wesley Clark is campaigning for the second time in the Granite State since getting into the race five weeks ago -- and why all nine Democratic candidates are expected to spend considerable time here over the next three months.

State Democratic Chairperson Kathleen Sullivan says winning the hearts of voters will mean stumping on more than just issues and promises.

SULLIVAN: You now have to convince the Democratic base that you can win. The Democrats in New Hampshire want a candidate who will defeat George Bush. LOTHIAN: The latest polls show former Vermont Governor Howard Dean leading in the state. In "The Concord Monitor" poll, 33 percent of likely Democratic voters are supporting Dean; 18 percent for Massachusetts Senator John Kerry; 14 percent for Clark. The rest of the field is in single digits.

But there is one other critical number.

SMITH: This is blackline. This is the undecided voters.

LOTHIAN: In this presidential primary class at the University of New Hampshire, a discussion of the all-important 20 percent of voters who are still undecided.

SMITH: It tells me that the Democratic electorate in the state still isn't particularly happy with the candidates.

LOTHIAN: The problem?

SULLIVAN: There really is not such significant differences that you could not support any one of them.

LOTHIAN: Political strategists say the battle to win the undecideds could be the difference for top tier candidates, who are working to stand out among the field on the road to the White House.


LOTHIAN: Now Julie (sic), the reason we are in this banquet hall is because, as you mentioned, the state Democratic Party will be hosting a fundraiser here tonight. More than 1,000 people are expected to be here. It's the largest gathering of Democrats since 1998. That's when President Bill Clinton was here.

Tonight, the only candidate expected here is Wesley Clark, although we are told he will not be speaking. His aides, though, say that before the event, he will be meeting privately with some -- some donors as he continues to try to finance his campaign.

And one other note, his aides also telling CNN that he will be spending between two to three days a week from now -- here in New Hampshire -- from now until January 27 -- Judy.

WOODRUFF: All right, Dan. Well, he's maybe pulling out of Iowa, but it sounds like he's putting some time and resources into New Hampshire.

OK. Thanks very much.

More presidential headlines in today's "Campaign News Daily." A new poll finds Joe Lieberman has lost an early lead among New York Democrats. A Marist College survey shows that Howard Dean Is out front with 18 percent, with Lieberman close behind at 16 percent. Wesley Clark has 14 percent and Dick Gephardt 10. In a Marist poll just last month, Lieberman led the field by 10 points. Senator Lieberman has sided with Florida Republican Governor Jeb Bush in the Terri Schiavo right-to-die case. Lieberman tells the Associated Press that in cases where there is no living will -- quote -- "I feel very strongly that we ought to honor life and we ought not to create a system where people are deprived of nutrition or hydration in a way that ends their lives" -- endquote.

Former President Clinton has a few words of advice for the Democratic hopefuls. Mr. Clinton tells "American Prospect" magazine the candidates shouldn't use phrases such as "I'm a real Democrat and the other is not." Mr. Clinton didn't single anyone out, but Howard Dean is the one who is widely known for telling audiences he belongs to what that he calls the Democratic wing of the Democratic Party.

Over on Capitol Hill, Senate Democrats say reports of progress toward Medicare reform are premature. Forty-one members have signed a letter to President Bush vowing to block a prescription drug compromise that is now being negotiated in conference committee.

With me now, our Congressional correspondent, Jonathan Karl.

Jon, where do things stand?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Judy, House Senate negotiators have been working on this since August, and their negotiations have intensified in recent days and, in fact, have gone on all day today. But what's happening is they come close to coming to a deal, Democrats, who by and large have been left out of that conference committee, are complaining that the deal they see emerging is one that they simply cannot support.


KENNEDY: We're reaching the final hours. We call on the president to intervene and to exercise judgment in this conference, to indicate that they want a bi-partisan bill. It's still possible, but we're further away from that possibility today than anytime since the conference first began.


KARL: There was a long list of concerns the Democrats have. But first and foremost, they're worried about changes to Medicare itself that they see coming out of this deal, changes that would put Medicare in direct competition with private insurance companies.

Now, one of the top Republicans on this committee, the finance chairman in the Senate, Chuck Grassley, told CNN a short while ago that Democratic concerns are simply premature, that the conference committee hasn't come to a final deal yet.


SEN. CHARLES GRASSLEY (R), IOWA: There's been kind of a consensus document put together that is nothing but a working document, and we're going through that line by line, make something final decisions. And there will not be a compromise until the end of this week or early next week. And so there should not be anybody making any judgments of what's in a bill that does not exist yet.


KARL: Now, Judy, that letter you mentioned of Democrats outlining their concerns on this, was signed by 39 Democrats, one independent, Jim Jeffords, and one Republican, Olympia Snowe. The number 41, 41 signatures on that, signals that Democrats say they have enough votes to dill kill the deal if they don't like what they see in it.

Now they aren't threatening to do so, but by having 41 signatures on that letter, they're sending a very clear signal that they better agree, or at least be able to go along with what comes out of conference committee or it's not going to pass the United States Senate -- Judy.

WOODRUFF: Very interesting. Jon Karl. And after our talk yesterday with the house majority leader, Tom DeLay, I had the distinct impression they were close to a deal. But, evidently, that's not the case. At least not as of today. Jon Karl, thanks very much.

President Bush is back on U.S. soil after his Asian tour. Up next, what's on his agenda in Hawaii? And is he miffed about being heckled during a stop in Australia?

Plus, Iowa versus New Hampshire. Bay Buchanan and Donna Brazile step into the primary season battle between the states.

And later, a candidate who's willing to run for her money. This is INSIDE POLITICS, the place for campaign news.


WOODRUFF: President Bush has arrived in Hawaii, the last stop on his return home from a six-nation trip to the Pacific rim. He spent much of his time thanking various governments for their support in the war on terror.

Back home, in an interview for Saturday's "CAPITAL GANG," Senator John McCain tells CNN that the president still needs to clear up confusion about pre-war intelligence on Iraq.


SEN. JOHN MCCAIN (R), ARIZONA: There needs to be an in-depth review in the intelligence that led to statements made by highly- respected people, the president, Colin Powell at the U.N., and others.

There will be a credibility problem unless the American people are assured that those kinds of mistakes are not made again.

There's no doubt that information was provided to the president of the United States, in my view, which was not accurate.


WOODRUFF: With me from Honolulu, is CNN White House correspondent Dana Bash. Other than the fact that it's a beautiful place to be, why the stopover in Hawaii?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Judy, it's a beautiful place to be and you should note it's the president and ours second Thursday in a row, because of the time difference, coming from his last stop Australia.

But, Judy, the main purpose of his trip here is to go to Pearl Harbor, to pay tribute there, to lay a wreath, and to discuss -- or actually to sort of have a solemn moment there and to pay tribute.

And the White House says it really provides an obvious parallel to what happened under President Bush's watch. The attacks of September 11.

And it also provides a book end for the president and the major theme of his trip, the war on terrorism. That is something they talked about every single leader he met with throughout Asia and Australia.

But, Judy, before he leaves here, he'll get politics in. He'll raise about $600,000 in a fund raiser tonight before he heads back to Washington -- Judy.

WOODRUFF: Dana, was there surprise on the part of the president or the people around him about the negative reaction he received in some places, especially in Australia?

BASH: Well, they were certainly expecting protests along the way as he made all of his stops through Asia and Australia. But Australia was certainly significant and interesting, because he went to pay tribute to thank John Howard, the prime minister of Australia, for his support in Iraq.

But clearly, like other places, especially the United States, that support was not unanimous. And because of the tradition of the parliamentary system, the main event of the -- for the president, his speech there, was interrupted by political opponents. He had to stop twice because of senators from Australia's Green Party who were screaming out in opposition to his policies, particularly the war in Iraq and the war on terrorism.

It is certainly something that the president hears a lot, opposition from parties, from the Democratic Party in the United States, but not in the way that he did in parliament, sort of face-to- face like that. His aides say he was warned by his friend, John Howard, that this could happen, that it happens to him quite often.

But it was certainly an interesting way to end the trip for the president, because he heard, and we heard, of protests throughout his trip across the continent of Asia. But not as up front and in personal as he got at the parliament -- Judy.

WOODRUFF: The prime ministers, with those parliamentary systems, that's right. They have to face members of the parliament.

BASH: Quite different.

WOODRUFF: Dana Bash, thanks very much. Have a safe trip home.

BASH: Thank you.

WOODRUFF: Question, can a Democratic hopeful find success without competing in Iowa? Bay Buchanan and Donna Brazile consider the strategies behind the decisions of Joe Lieberman and Wesley Clark when we return.


WOODRUFF: With me now from Washington, former Gore campaign manager, Donna Brazile; and Bay Buchanan, president of American Cause.

Bay, to too you first. We had two Democrats this week say that they are going to skip, essentially, the Iowa caucuses, Joe Lieberman and Wesley Clark.

Is this a smart move?

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: It's certainly not. It doesn't portend well for them at all.

The key in a primary is to start earlier, not later. I've done this a number of times. We went as far as to go up there to Alaska to being picking up that momentum so we could go into New Hampshire with some real momentum.

Their problem is, this is going to be decided in Iowa, New Hampshire. The person coming out of there or two coming possibly will have momentum. It'll become a two-man race, possibly three, but I think that's a long shot. It's over. Those other fellas that are not playing in those two races, Donna and Judy, are basically, politically dead men walking.

WOODRUFF: But, Donna, the Ely Siegel, who is Wesley Clark's campaign manager, said the calendar has changed completely. He said, "I'm not saying history is bunk, but the lessons of the past are of limited utility."

DONNA BRAZILE, FMR. GORE CAMPAIGN MANAGER: Well, but the lessons of the past also should instruct anyone that those two states carry a lot of weight in the nominating process.

And I agree with Bay, the eventual winner in Iowa and New Hampshire will have a tremendous amount of momentum going into the February 3 set of primaries and caucuses. And since these candidates have decided to plant their campaigns on much more fertile ground, they'll have to win. Otherwise, they'll be out of the contest by -- February 3.

WOODRUFF: But why -- why -- go ahead, Bay. BUCHANAN: You know -- you know, I think the key here, Judy, is in Iowa, you've got to two people out there playing. Gephardt could be a real upset, and that's what he's hoping. And he goes into New Hampshire hoping that the establishment will then go behind him because the establishment doesn't want Dean. Kerry is hoping they wait a week and see if he can be a player that all the establishment goes behind to stop Dean.

But by February 1, the establishment has to make a move to stop Dean if he's winning at that stage, or it's all over. These other guys don't have even have a play in this game.

BRAZILE: Well, the way I see it is that Gephardt, Dean and Clark are most likely to succeed, because they're participating in those first two early contests. And Clark, Lieberman and Edwards are waiting to exhale, waiting for some wind to allow them to pick up some momentum in South Carolina, Oklahoma, or one of the other number of states that will take place the early weeks of February.

But you cannot discount the value of campaigning in Iowa or New Hampshire. And I guess Joe Lieberman might decide to campaign here in the District of Columbia, where we will hold a beauty contest on January 13.


WOODRUFF: Real quick, Bay.


BUCHANAN: It's been shown that New Hampshire is worth ten points in the next primary. I don't know how anyone's going to beat that.

BRAZILE: I agree.

WOODRUFF: All right. Let me quickly you now to the fight over the $87 billion for Iraq reconstruction.

Bay, what about the -- there was a Democratic consulting group, the Democracy Corps, put out a memo today saying the president's request for this money is no doubt contributing to his worsening position on priorities, budgets and the economy. Is this going to hurt the president next year?

BUCHANAN: I don't believe. There's no question it's uncomfortable right now, especially with Republicans, really -- many of them going over and saying they agree that there should be a loan rather than a payout.

But I think it's just a temporary thing. I think the key here is the president must make certain that he has control over this Iraq policy by next year, that we're pulling out, that people feel comfortable, there's an end in sight. If he doesn't do that, anything associated with Iraq could be harmful to him.

BRAZILE: Well, that loan is like an insurance policy for politicians who are afraid this may come back to by the them next year when voters start asking, What about our schools? What about our healthcare system? What about our roads and bridges? So I believe that these politicians made the correct decision in voting their conscience, voting for their constituents and making this a loan, not a handout for the Iraqi reconstruction.

Look, we all support our troops. We want them home and we want them home safely. But at the same time, I think this administration has not called for the American people to make any sacrifice to pay for this awesome bill that we have now to reconstruct Iraq. And that's what politicians are worried about.

BUCHANAN: And Judy, there's no question -- Donna makes an excellent point. This issue brings the economy in Iraq somehow close together. And the American people suffering out there, some -- a lot of them are real very concerned about their own situations, see the taxpayers money going to a country that is potentially very rich.

BRAZILE: That's true.

WOODRUFF: All right. We're going to have -- we're going to have to leave there it. Bay Buchanan, Donna Brazile, we always want to go much longer than we can. We'll see you next week. Thanks.

BRAZILE: Thank you.

BUCHANAN: Thank you.

WOODRUFF: Well, get out your track shoes. When we return, President Bush isn't the only candidate who hit the ground running.


WOODRUFF: Well, if you can't find time to exercise -- and a lot of us can't -- consider this. While Robin Carnehan has been busy running for secretary of state in Missouri, she's also been training to run a marathon. Carnehan is asking supporters to donate from $1 to $45 for every mile she runs in the 26.2-mile marathon. She says that it will inspire her to cross the finish line in the November 2 race and in the 2004 election. At the very least, she'll be in good physical shape.

That's it for INSIDE POLITICS. Thanks for joining us. I'm Judy Woodruff.


Democrats Vow to Block Medicare Compromise>

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