Inside Politics

President Bush Returns to Florida to Promote His Tax Plan; Errant U.S. Bomb Kills Military Observers in Kuwait

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is time to have fiscal sanity in our nation's capital And it's time to remember who pays the bills. It's the working people of America who pay the bills.

(END VIDEO CLIP)

ANNOUNCER: President Bush returns to Florida, focused on promoting his tax cut plan, but state Democrats offer a chilly reception, including a reminder of the November election.

Organized labor faces political reality. Mr. Bush takes a tough stand against potential airline strikes and sends unions an early message about life under a Republican White House.

More of our interview with Lynne Cheney at the vice president's residence. Her thoughts on education and pop culture, and results of a new CNN poll on how Americans view her husband's health problems.

Now Judy Woodruff takes you INSIDE POLITICS.

JUDY WOODRUFF, CNN ANCHOR: Thank you for joining us. We are covering several important stories at this hour, including a 400-point drop in the Dow industrials. It comes on a day President Bush travels to Florida to continue trying to sell his tax cut proposal. We'll have reactions and analysis in just a moment.

But first we want to update a story that CNN first reported just a few hours ago: a U.S. military training accident in Kuwait.

For details on exactly what happened, joining us is CNN's national security correspondent, David Ensor at the Pentagon -- David.

DAVID ENSOR, CNN CORRESPONDENT: Well, Judy, the numbers may change as the evening progresses, but at the moment, Pentagon officials are saying they believe that there are five dead and five injured after an F-18 Hornet -- a jet that was based on the on the USS Harry Truman, an aircraft carrier in the Persian Gulf, on a training exercise -- dropped a 500-pound bomb on a training range in Kuwait at the Udairi training range. There it is on the map, right near the border with Iraq. Now, they were -- this was a routine training mission. And the plane, as I said, based on the Truman, was dropping this bomb as part of that exercise. But for reasons that no one is able at this point to explain yet, the bomb hit some spectators -- some military observers. And the dead include four American servicemen, and one military person from New Zealand. There are five others injured.

We're told they are in the Kuwait armed forces hospital in Kuwait City. So, a very serious accident at a training facility now in Kuwait. And, as I said, the numbers may go up, but at moment, they figure five dead and five injured -- Judy.

WOODRUFF: David, is there any information at this point on where these people were? Were they in what was presumably a target area?

ENSOR: Our understanding is that those who were injured were observing the exercise, and clearly there was either a misunderstanding on the part of the pilot and those conducting the exercises as to where the observers would be, or the observers were in the wrong place and had a misunderstanding there.

These kinds of exercises are relatively routine and they normally pass without any injuries. That's out on the desert. There's not a lot of people there, usually -- Judy.

WOODRUFF: David, how much activity like this is going on in that part of the world? You pointed out this happened very close to the border between Kuwait and Iraq. We know there are military personnel in Kuwait -- U.S. Personnel in Kuwait. We also know, as you pointed out, the presence of the Navy in that area. How much of this going on?

ENSOR: Well, as you know, the U.S. and its British ally patrol the northern and southern no-fly zones over Iraq, so there's a great deal of U.S. military aircraft in the air in this area at almost at any time. So -- and they also bomb sometimes when -- when they are fired upon inside Iraq.

So quite a lot of activity, military activity. And this is not all that unusual, that they would be doing a training exercise in the Kuwait area. There is a permanent military presence now in Kuwait ever since the Iraqis were forced out of the country -- Judy.

WOODRUFF: All right. David Ensor reporting from the Pentagon. Thanks.

President Bush received word of today's military accident during a trip to Florida to promote his tax cut plan.

For details on what the president had to say about the accident, we are joined by CNN senior White House correspondent John King -- John.

JOHN KING, CNN CORRESPONDENT: Judy, very little so far. As David Ensor mentioned, some of the details still sketchy. The White House situation room here monitoring development, taking reports in from the Pentagon and other and agencies, relaying that information as quickly as possible to the president. He's on his way back to Washington now.

As you mentioned, he received first word of this, and only sketchy details of this while in Florida promoting his tax cut plan. It was during a speech, he walked into a room, there was raucous applause. His brother Jeb, the governor on hand, so somewhat of an awkward moment as the president brought the crowd to quiet and asked them to remember those killed today in this tragic accident.

(BEGIN VIDEO CLIP)

BUSH: I am reminded today of how dangerous service can be. We lost some servicemen today in Kuwait on a training accident. I hope you'll join me in a moment of silence for those soldiers and their families.

(END VIDEO CLIP)

ENSOR: Administration sources telling CNN that among the four U.S. military personnel killed, two U.S. Air Force personnel. They say they're still collecting the names, and that it's possible, we might get an additional statement from the president later today when more details are clear.

Again, the president on his way back to Washington. And his father was in Kuwait just last month for ceremonies marking the 10- year anniversary of the end of the Gulf war. He visited this very range, we're told, and complimented the troops there on their professionalism. Again, a reminder that 10 years after the Gulf war, still a continued military presence in the Persian Gulf region -- Judy.

WOODRUFF: John, these are the first publicized military deaths of military personnel during President Bush's tenure?

ENSOR: I believe that's correct. It's certainly the first accident of this nature. We did have the -- we had the attention focused on the new commander-in-chief during the military strikes on Iraq just a bit ago. This is the first known fatality, certainly, in a large-scale military exercise, although White House officials would say that, you know, there are risks involved, certainly in this training, and there are -- deaths are relatively common. Not in high numbers, but that's relatively common in the military during these training exercises.

WOODRUFF: John, let me also ask you about the purpose of the president's trip. As you point out, he was down there to sell the tax cut proposal. How did that go over? What did he have to say?

ENSOR: Well, the crowd that greeted him down there was quite enthusiastic. Again, his brother the governor on hand, two Democratic senators from Florida. Again, this, very much, another chapter, as we saw last week when the president visited North Dakota, South Dakota, and Louisiana, all states he carried in the presidential election, all states represented in the Congress by two Democratic senators. That's the case in Florida as well.

But, of course, this was the president's first trip back to Florida as president. And given the details, the contested election back there, the continuing dispute, as some media organizations look at the ballot a little bit more heightened political theater as the president visited. But he made only brief remarks about the election controversy, saying some Democrats will never be satisfied with the count. The president hoping to bring public pressure on Senators Graham and Nelson of Florida, two Democrats, who could prove critical as the debate over tax cuts now moves to the Senate.

WOODRUFF: All right. John King reporting from the White House. Thanks very much.

Well, another major story we're following on this busy news day has both economic and political implications: the financial markets struggled throughout the trading day, and stumbled badly in the final hours of trading.

Joining me from the New York Stock Exchange on what became a bleak Monday for investors: Terry Keenan of CNN Financial News.

Hi, Terry.

TERRY KEENAN, CNN CORRESPONDENT: Judy, talk about March madness. It was a day of relentless selling both here at the New York Stock Exchange and uptown at the Nasdaq marketsite.

In fact, the Nasdaq has not been this low since December of 1998, falling convincingly below the 2000 mark. Never really making any attempt to recover. The trigger today...

WOODRUFF: Terry, I'm going to interrupt because we're having a hard time hearing you and we want to hear everything you're saying. We're going to try to get that sound fixed and then come back to you.

And while we're waiting to do that, and as we're talking about today's markets, we want to bring in Ron Brownstein of "The Los Angeles Times."

Ron, you've been looking at the president's selling of his tax cut plan. You've also been, of course, following the developments on the economy. Given this kind of news in the markets today, will it have any affect on the basic argument behind the president?

RON BROWNSTEIN, CNN POLITICAL ANALYST: In the short run, this is the kind of event that is used more to reinforce arguments and beliefs that are already held than to change, I think, opinions.

I think what you'll see very quickly are the advocates of the tax cut plan saying: look, here's the evidence that we do need this kind of tax cut to stimulate the economy, maybe we even need a capital gains tax cut to revive some of the high-tech and entrepreneurial companies that are leading the decent.

On the other side, I think you'll see that the critics of the tax cut say: so much of the revenue gain, the unexpected revenue gain that have produced these surpluses over the last decade has been key to the rising market, the enormous growth in income at the very top. The big -- the big gains that have come from the raising of the top rate in relation to that, and it shows the difficulty of making a 10-year projection of how much money the government will have to spend and to cut taxes with. And it underscores the need to be cautious.

So I suspect that in the short run, you'll see each side using it to reinforce positions they already hold. The bigger question is: does it really deepen the spreading sense of economic anxiety that polls are picking up, and how would that affect members of Congress?

WOODRUFF: But are you saying, for right now, it may be a wash, because there are people making arguments on both side of this?

BROWNSTEIN: Yeah, I think -- I think, pretty much, that the advocates and the opponents of the tax plan are going to use this as proof, as we do most events in Washington, to reinforce what we already believe, rather than to causes us to rethink it. And I think that's what will probably happen here.

WOODRUFF: Ron, you've been looking pretty closely at this growing clamor for a so-called trigger. which would key the tax cut in the so-called out years down the line to the state of the budget surplus, or0 deficit, as the case may be.

What are you finding out about the people who are supporting? First of all, explain for us quickly. What is the trigger? How would it work?

BROWNSTEIN: The trigger is sort of an updated and the inverted version of the Gramm-Rudman idea of the 1980s which said -- Senators Gramm and Rudman proposed that the federal deficit, which had ballooned in the mid-'80s had to be eliminate by the early '90s or else, it had to make progress each year to reducing it or automatic spending cuts.

Now, you have a group of moderate Republicans and Democrats in the Senate -- about 11 altogether -- saying that there has to be specified progress each year on reducing the national debt. In other words, the surplus has to come in big enough to meet specified targets and reducing the national deficit or else, the next year's increment of the tax cut will not go into effect and any new spending promise of the next year will not go into effect.

The idea is to create a more fiscally responsible tax cut. The unintended consequence -- and the reason why some of the usual allies of these folks are so critical -- is that it could, the trigger could ironically make it easier for Bush to get a bigger tax cut passed, because people will feel that they have the safety salve or the fall back of the trigger that would prevent them. Now, the Gramm-Rudman experience leads you to some doubt about whether the trigger would actually get pulled down the road if it needs to be.

WOODRUFF: Ron, who is supporting the idea of a trigger? You have people in both of the political parties... BROWNSTEIN: That is what makes it really important in the Senate. The 50/50 Senate is like living on the high-wire. Any small group can sort of blow you off of your stride. You have five Republicans and six moderate Democrats who are saying they want the trigger to be in the tax bill and the White House at the moment is adamantly opposed to it.

If the moderate Republicans stuck to their guns on this, it would be very hard to pass the tax cut of the magnitude Bush wants without the trigger. The irony here Judy, is that the Democrats and the Republicans have different motivations. I think that the Republicans are looking for a way to support the full Bush tax cut. These folks, mostly from New England and the northeast, mostly coming from the fiscally conservative, fiscally moderate states. They are looking for something that they can go back to their voters and say, look, I put in some elements of fiscal responsibility, without alienating the base by opposing the tax cuts.

And the Democrats may be looking for a way to slow it down, so it's hard to see how long this marriage can hold together, when both have different incentives at the moment.

WOODRUFF: I have more questions, Ron, but I am told that we have sound from Terry Keenan now from the New York Stock Exchange.

Terry, I want to come back to you, because this is a huge story that we are following in the markets. Let's see if we can hear you -- Terry.

KEENAN: Well, Judy, it was just a day of relentless selling in what has already been a horrific year for the Nasdaq. That index down now 60 percent from the high set exactly a year ago. Coming into today's trading session, traders had some bad news from Cisco. The poster child of this bull market in the new economy saying it may lay off as much as 17 percent of its work force. It is seeing a global slowdown, not just here in the U.S. but in the markets in Europe and in Asia. That triggered the sell-off today and we really made no attempts to rally throughout the session, even as the Nasdaq fell below the 2,000 mark and tonight at its lowest level since December of 1998.

Among the biggest losers: Microsoft down 8 percent, Disney down 8 percent, General Electric, the most valuable company in the entire world, losing 10 percent of the market value. All told, a half- trillion dollars in market value wiped out of this economy. To put that into perspective. it's about a third of President Bush's $1.6 trillion tax cut plan; sure to have an impact on consumer confidence going forward. Tomorrow, traders are looking for the market to try to attempt a rally; that is something to watch carefully as the opening bell rings here at 8:30 a.m. -- Judy.

WOODRUFF: All right, Terry Keenan. We appreciate that report from the New York Stock Exchange.

Ron Brownstein still with me here in the studio in Washington. Ron, John King was telling us earlier and I asked him if the White House said anything; anything or the president saying anything about the markets. He said, no, they're not saying anything -- they don't want to talk about it. And traditionally, White House administrations don't comment when the markets move dramatically one way or the other.

BROWNSTEIN: Yes. And in the past, we have a few of these big drops in the past few years, and it really has not had a lasting effect on the either the political debate, or the consumer attitudes toward the economy.

I think what's different, this is coming in a period when there is already anxiety. And there already is some predisposition to be more attuned, perhaps, to the bad news than there might have been in, say, the fall of '98 when everything is going well. And you do wonder if this does have an effect. It probably will have some effect on consumer confidence, which, again, has some effect on the members of Congress.

WOODRUFF: Ron, back on the president's tax cut proposal. We will discussing the so-called trigger. You made of what sounded to me like plausible arguments for those who are supporting it. Why, then, is the administration so adamantly against it right now?

BROWNSTEIN: Well, they think that it undermines the basic premise of the tax cut, which is -- one of the basic arguments of the tax cut, which is to jump-start consumer confidence. Their belief is that if you tell people they are getting a tax cut, they will be more optimistic and they will go out and spend more money. And if the tax cut becomes conditional, they feel that a lot of the psychological value will be undermined.

They also think that it will provide incentives for Democrats to push up spending, even though the sponsors will try to take care of that by having a spending portion of it. But basically, they want their $1.6 trillion tax cut as written and they don't really want it encumbered with some of these other provisions. The irony, as I said, Judy, is, in the end, it may be more of a weapon for them -- trigger -- than against them, because it may provide the cover or the rationale for some of the moderate Republicans who are skeptical to vote for him in the end.

WOODRUFF: ...to do come on board.

BROWNSTEIN: To come on board in the end, yes.

WOODRUFF: Ron Brownstein, thanks very much.

And just a quick footnote of what Ron is talking about. There a new CNN-"USA Today"-Gallup Poll out that reveals of how some Americans view the president and his tax plan. As the tax cut bill heads to the Senate, 75 percent say they would support changes, giving more tax cuts to the poor; 63 percent of those surveyed say they would support the so-called "trigger" that we've been discussing here, designed to stop the cuts if they threaten to create a budget deficit.

And 59 percent said they would support a plan that would lower the overall amount of the tax cuts. As for President Bush's overall approval rating: 58 percent of respondents said they approve of how Mr. Bush is handling his job; 29 percent said they disapproved. One week ago, 63 percent approved, and 22 percent said then, a week ago, they disapproved.

You got that?

Coming up next on INSIDE POLITICS, President Bush takes his tax cut plan to hostile territory, or is it? We'll have the latest on the president's first trip to Florida since he took office.

(COMMERCIAL BREAK)

WOODRUFF: President Bush's one day stop over in the Florida panhandle today was just the latest multi-state blitz to promote his tax cut plan. But as CNN White House correspondent Major Garrett reports, this first official visit to Florida carries extra meaning for the president.

(BEGIN VIDEOTAPE)

MAJOR GARRETT, CNN CORRESPONDENT (voice-over): President Bush landed on some of the safest terrain the White House could find, an Air Force base in the middle of the heavily Republican Florida panhandle. A cheering crowd greeted him at Tyndall Air Force Base.

BUSH: It is such an honor to be the commander in chief of the greatest nation on the face of the Earth.

GARRETT: During a tour of military housing, the president said Democrats need to get over their narrow loss last November.

BUSH: Some of the Democrats here want to keep revoting the election.

GARRETT: Later, at a tax cut speech, just two protesters. Then Mr. Bush's brother, the governor, introduced him, another first since Inauguration Day.

BUSH: Governor, what a good man he is.

GARRETT: In two speeches, the president said nothing about the recounts or election reform. Instead, he stayed on message, pounding on familiar themes of tax cuts and a strong defense.

BUSH: The surplus is the people's money. It's not the government's money.

GARRETT: Florida Democrats, eager to fuel resentment against Governor Bush and the president, ran this commercial in the Florida panhandle.

(BEGIN VIDEO CLIP)

NARRATOR: Jeb Bush delivered Florida to his brother, George. And now, we're paying the price. The George Bush tax cut undermines our prosperity. It spends money we don't have and doesn't pay off the debt.

(END VIDEO CLIP)

GARRETT (on camera): Florida is the tenth state the president has visited in two weeks, a hectic pace that's as much about selling his tax cut as building up political capital; capital that even White House aides concede was in short supply after losing the popular vote and just winning the Florida recount.

Major Garrett, CNN, Panama City, Florida.

(END VIDEOTAPE)

WOODRUFF: There is much more ahead on INSIDE POLITICS. Still to come:

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It has to be interesting, shocking, enjoyable, beautiful, funny, something to get them to stop.

(END VIDEO CLIP)

WOODRUFF: Dressing up policy and proposals to attract the attention and the support of the American voter.

And, a preview of the gubernatorial match-up in the Garden State.

But first, the rest of my visit with Lynne Cheney, and our wide- ranging discussion: from her work on education to the new Cheney home.

(COMMERCIAL BREAK)

WOODRUFF: A new book chronicles the long and contentious path of Election 2000. It is called "Deadlock: The Inside Story of America's Closest Election," and it gives readers the unique perspective of its authors, a team of "Washington Post" reporters led by David von Drehle and Dan Balz.

Earlier today, I them about a new Democratic ad running in Florida that says Governor Jeb Bush delivered the state for his brother, George W. Bush, And just how accurate that statement is?

(BEGIN VIDEOTAPE)

DAN BALZ, CO-AUTHOR, "DEADLOCK": Well, what we found was that there was a great advantage for then-Governor Bush to have his brother as the governor of Florida. From the beginning, Jeb Bush put the resources of his operation behind his brother. He had done it during the campaign, and didn't quite get as far along as they wanted. But once the election night happened and they knew exactly where they were, among other things, they helped lock-up key legal talent right away on behalf of the Bush operation.

DAVID VON DREHLE, CO-AUTHOR, "DEADLOCK": Well, it was a big advantage, Judy. One of the things that we discovered is just how much the people in Florida, the politicians there, working on behalf of the national candidates were conscience that they'd have to live in Florida after the circus had gone home and somebody was elected.

They'd have to do business with each other, and that meant doing business with Jeb Bush, the governor of Florida, and so people were concerned about crossing him. But beyond that, Bush is one of the most experienced, tactical, political vote-counting minds in his state. That's how he got to be governor, and so he was able to give very cogent advice at key moments to his brother's operation.

BALZ: Judy, one of the telling signs was when Jim Baker and Joe Allbaugh, who was Bush's campaign manager, arrived in Florida the first day after the election, the first thing they did was spend 90 minutes with Jeb Bush to get a lay of the land.

WOODRUFF: If one or both of you could just talk for a moment about the connection between the Bush campaign and what was going on in the office of the secretary of state, Katherine Harris. What have you learned there?

VON DREHLE: We learned that in the hours after the deadlock set in that the Bush operation reached out to a lobbyist in Tallahassee, Max Steponovic (ph), one of the senior Republican players in the state of Florida, and urged him, prevailed on him to go to work as a consultant for Katherine Harris and he became the pipeline to ensure communication between the two operations, and even when they didn't communicate, to advise her, obviously, with the interests of now- President Bush, in mind. They didn't always do exactly what the Bush camp wanted, but most of the time.

BALZ: Well, Steponovic, you know, agreed to an interview with Jo Becker of our staff, who was part of the team that produced the book, and would not answer every question she asked of him about exactly what his role was. We did talk to Katherine Harris. She was forthcoming, but I don't think she said that he controlled what she was doing.

She claimed that she was doing it within the law and doing what the law required. But there's no question that having somebody like that close by who is as savvy as Max Steponovic is was again a big help.

WOODRUFF: There's so much about this that clearly was legal maneuvering, but to what extent, and this is getting back to what we talked about earlier, did political considerations sort of determine legal maneuvering in what happened? Or did they?

VON DREHLE: Well one of the things that we learned is that the Bush camp from the very beginning was focused on winning Florida, and less on questions of reputation or what people would think of them. Some of the senior Gore advisers were very concerned, particularly Warren Christopher, about Al Gore's political future, preserving his reputation, and at moments where that might have collided with the cutthroat legal calculations, there was always a voice, a very strong voice in Gore's ears advising him to consider his reputation. That similar thing was not going on with George Bush, and so in that sense, politics were playing a part. But I think that it's important to remember the people, whether they were lawyers or tacticians, who were sent to Florida to fight this war, they were politicians. They were not civics teachers. They were not university professors and they fought a political fight down there, and you don't send infantrymen, you know, to teach an ethics class and so it was tough.

WOODRUFF: Just over the weekend, "The Palm Beach Post" investigation came out and which, as you know, showed, what is it, 6,000-some odd additional votes for Gore among the overvotes. Did Gore make a mistake by not challenging the butterfly ballot straight on in Palm Beach County?

BALZ: I'm not sure that he did. I think that in the end, that case would have probably gotten thrown out. I don't think that that was a case in which they had probably that strong a legal ground.

VON DREHLE: As we found, for the first four or five days, they felt that was their best case, and they really investigated it. They went deeply into it as a legal issue and concluded that they might win on the merits, but it couldn't be fixed. You can't rerun the presidential election in one county because of a legal but flawed ballot.

WOODRUFF: Whether it's "The Palm Beach Post" or the other investigations that have gone one and been reported and the consortium that's still under way, do you think that these things will affect -- will matter in the long run?

BALZ: I think that the people who believe Bush won will still believe Bush won and the people who believe that Gore won will still believe Gore won and there will be some people in the middle who will say, well, I don't really know, but George Bush is the president and I accept him as the president.

But it could have an impact certainly on 2004. It could have an impact on the Bush presidency depending on how he performs as president.

I mean, I think it's certainly the backdrop for the first four years that he's in office.

WOODRUFF: Lingering political effect in the state of Florida on Jeb Bush. How does he -- did he come out of this stronger, vulnerable? Is that possible to know right now?

BALZ: I think he's more vulnerable and certainly a prime target for the Democrats in 2004. It's not clear who his opponent will be, but you now know that there will be a very united, very energized, very aggressive Democratic Party not just in Florida working there, but nationally, aiming at Florida. There will be a lot of money that will come into that state. There will be a huge amount of journalistic attention that will be given to it.

He will be -- he will be in the spotlight like no other candidate I think in 2002.

VON DREHLE: There's a moment in the book where after the -- the Florida election was called for Gore and then taken back off of the table, the wise-cracking brother, Marvin Bush, yells out, "Jeb can come down from the ledge now."

(LAUGHTER)

I'm not sure he can come down from the ledge yet.

(END VIDEOTAPE)

WOODRUFF: That was David Von Drehle and Dan Balz of "The Washington Post." The book is "Deadlock."

When INSIDE POLITICS continues, Lynne Cheney on her work and her role as the wife of a vice president. Plus, public opinion and her husband's health.

(COMMERCIAL BREAK)

WOODRUFF: The last two months have been busy ones for Vice President Dick Cheney and his wife, Lynne Cheney. As her husband handles his official duties as the right hand of the president, Mrs. Cheney is settling in, just getting started settling in into the vice presidential residence, focusing on her work on the issues that matter most to her.

On Friday, we heard Lynne Cheney talk about her husband's job. Today, more from my visit with the vice president's wife and her thoughts on life at the newly remodeled residence and her work in Washington.

(BEGIN VIDEOTAPE)

LYNNE CHENEY, VICE PRESIDENT DICK CHENEY'S WIFE: What a great adventure to have an old house like this, it's so gracious, and to be able to bring some of our things into it that we love.

I love the draperies, the way they've gone up. And these chairs actually are chairs that the Quayles bought when they were here, and we put green silk on them.

The table was from the Rockefellers and used to sit in John D. Rockefeller's apartment in New York.

WOODRUFF: This is an old house.

CHENEY: It is a very old house and like...

WOODRUFF: (UNINTELLIGIBLE) on the grounds of the Naval Observatory...

CHENEY: That's right.

WOODRUFF: ... which is -- the Navy still uses or... CHENEY: This is actually called the temporary residence of the vice president. The Navy is -- owns this house, is in charge of this house, and they're very good landlords.

(LAUGHTER)

WOODRUFF (voice-over): It may be their temporary residence, but it's also very much the Cheney's house: from the hand-picked art, an Andrew Wyeth in the library, to the fishing books on the shelves.

CHENEY: And a few years ago, I started buying him these classic fishing books that are leather-bound. I kind of thought it would be like a one-year present, you know, it was like a birthday present. No, I am not allowed to let the prescription lapse. So we're getting more and more of those.

"Fishing With a Fly" This is a classic fly-fishing book, and you have to notice the authors. Charles Orvis, which is a very famous name in fly-fishing circles, and A. Nelson Cheney, who is a (UNINTELLIGIBLE) relative. So we're proud to have that book, too.

WOODRUFF (on camera): And in Wyoming, it's pronounced Cheney and not Cheney. Is that right?

CHENEY: Well, we say Cheney. Yeah, both. If you want to say Cheney, it's like tomato and tomato.

(LAUGHTER)

WOODRUFF: (voice-over): In our interview, we spoke about her husband's health and about his unique working relationship with the president.

CHENEY: It is kind of a business model, isn't it? And the president is our first president with a business degree, an MBA, a masters in business, to serve in the Oval Office. And I wonder if that might not have something to do with it, because this is not an uncommon model in business for the chairman or the CEO to set large goals, to implement policies and to delegate large areas of authority, particularly when you're running a huge operation.

I've served on the board of major corporations, and there really is no other way to do it.

WOODRUFF: She is still sitting on corporate boards and there's her day job, a senior fellow at the American Enterprise Institute. She's written five books and is working on the sixth, on education reform.

(on camera): You are working on a book, though, on education reform, and I believe you've described it as thinking about the role that our broader culture has played in preventing true education reform from taking place. Is that accurate? How would you characterize...

CHENEY: Well, it's a really interesting question. We have had wave after wave of reform. Probably if you could at least think back to 1983 when "A Nation at Risk" was published and called for a vast reforms in our schools, many of those calls to reform were exactly on target, exactly what we should be doing. The outcry goes up. People become mobilized. They try to to put the reform in place. And it fails, it founders. It doesn't happen.

So I am trying to deal with the cultural context in which reform tries to occur and understand why it is that even though we know how to fix our schools -- in many ways we know what the answers are -- we don't get it done somehow.

WOODRUFF: Can you give you us an advance peek at what some of the answers are?

CHENEY: Well, part of it is a longstanding belief -- it's been in our education establishment at least since the 1930s -- that somehow children should be allowed to discover knowledge for themselves, that they should construct their own knowledge. This has surfaced most recently in connection with mathematics instruction, where the idea is that they need to discover how to ad for themselves. Rather than being taught how to add, they should construct this knowledge on their own.

Well, just as I described it to you, I can see this doubt in your face. Is anybody really saying that? Yes, they are really saying that. It's been in textbooks all across this country.

This is not the result of common sense, it's not the result of research. It's the result of a long-held set of beliefs that dominate the education establishment. And I'm interested in how they got there and how we can perhaps get rid of some of them, and just providing an understanding for how reform fails.

(BEGIN VIDEO CLIP)

CHENEY: This is my granddaughter Kate.

(APPLAUSE)

(END VIDEO CLIP)

WOODRUFF (voice-over): With two grown daughters and three granddaughters, Lynne Cheney is concerned about how the broader culture is affecting our children. We talked about that in light of a pair of recent incidents: the shooting at Santee High School and the case of the Florida boy sentenced to life without parole for killing a 6-year-old in what his lawyers said was a re-enactment of professional wrestling.

(on camera): Should we be thinking harder about the role that the entertainment industry plays in our society?

CHENEY: Oh, absolutely. And -- but it's not -- you know, the entertainment industry has a great deal of responsibility to bear. We certainly need to do something about the rating system, so that it makes more sense to parents, so they can tell the difference between an R-rated move that is "Saving Private Ryan" and an R-rated movie that's called "Scream," so there's a lot of good work to be done there.

But there's also a lot of thinking to be done -- and maybe a national dialogue that needs to take place -- about parenting. I read an interesting proposal that Chuck Schumer is making, the Democratic senator from New York, about getting together gun control people and gun people -- the NRA, for example -- and getting them together to talk about what is a parent's responsibility?

You know, you need to, one, lock those guns up, make sure kids don't have access to them, talk to your kids about firearms, talk to your kids about how you respond when somebody's mean to you. We need to talk to kids about living in a civil way in a civil society.

WOODRUFF: Are parents just doing a worse job now than they have ever done?

CHENEY: I think it's harder to be a parent. You know, you have to fight the culture in many ways. You turn on the television -- a study not long ago talking about how much sex there is on television -- you are trying to raise your children to be sexually responsible, and it's easy for them, even at a very young age, to turn on a television program which goes in exactly the opposite direction.

So, I think it's very hard to be a parent, I think you have to fight the culture. I think that's one of the reasons for the growth in home schooling. People are worried about turning their little kids loose in the culture that seems increasingly damaging to how it is they might grow up and turn out.

WOODRUFF: But in terms of requirements on the entertainment industry, whether it's film or television, do you think that there should be laws passed?

CHENEY: I am very wary of that, I have been a sturdy advocate of the First Amendment for my entire life. So, I worry, even when I hear somebody like Joe Lieberman talking about six months and we are going to pass legislation, because it's very difficult to deal with this legislatively without running afoul of the First Amendment.

WOODRUFF: You have an extraordinary public platform. What is -- as you look ahead, what would you like -- at the end of the four years of your husband's time as vice president, or at least at the first term of his being vice president, what would you have accomplished from this -- from this, really, gift that you have been given?

CHENEY: No, you are absolutely right. It is that. It's an enormous honor, and I have been struck by the fact that I am often doing and saying the same thing now that I have been doing and saying for 10 or 15 years, and yet, it does attract more attention.

And that is -- that is a gift to be used carefully. I hope that I will be able to draw attention to some of the really fantastic things that are going on in education in this country. Even as I write about the problem, even as I describe how difficult it is to get reform to happen, I visit schools where people are working against the prevailing ideology and doing wonderful thing for children.

I have twice visited a school in Minneapolis called Harvest Academy, where they're using a very structured, very rigorous programs to teach kids how to read. It involves memorization, it involves instant correction of mistakes -- these are all anathema in that ideology that prevails in most of our education schools, but let me tell you, these little kids come from poor homes, and at five years old, they are reading.

I visited this school twice. The first time, of course, it got no attention at all. The second time I went, I could take three television cameras and two newspaper reporters. Now, see, that is a wonderful thing to do, to say look what at what the man who runs the school -- his name is Eric Mahmoud -- look at what Eric Mahmoud and this school are doing for these little kids whose lives are going to be so much better as a result. So, that is what I would like to be able to do a lot of in the next four years.

(END VIDEOTAPE)

WOODRUFF: That is part two of my conversation with Mrs. Cheney. She told me on Friday that her husband went back to work as quickly as he did after he had a procedure at the hospital, feeling a tightness in his chest and a difficulty with the stent that had been placed in an artery. He said the president was feeling good, that there was no reason for him not to go back as quickly as he did.

For the majority of Americans, the vice president's heart trouble is not a problem, although as you can tell from this survey, his most recent episode did increase concern. The CNN/"USA Today"/Gallup poll found 39 percent of Americans said they were concerned with Mr. Cheney's health; 59 percent said they were not.

Now, that's a change from November, when only 30 percent of respondents said they were concerned, and 68 percent were not.

As for how the vice president should proceed, 11 percent said he should resign, 21 percent said he should cut back on his duties, but the majority, 66 percent, said he should continue with his current duties.

Just ahead, the changing face of America: we'll talk diversity in politics with Jeff Greenfield.

(COMMERCIAL BREAK)

WOODRUFF: Former Democratic Congressman Joe Kennedy says that he will not run for governor of Massachusetts in 2002. Kennedy released a two-page statement today, putting an end to any speculation about a possible bid.

A new contender but not exactly a new face has jumped into the ring for the New Jersey's governor seat. Democrat Jim McGreevey says he wants to make a winning comeback this year, now that Christie Todd Whitman has left the post for a position in the Bush administration.

CNN's Deborah Feyerick has an overview.

(BEGIN VIDEOTAPE)

JAMES MCGREEVEY (D), NEW JERSEY GOVERNOR CANDIDATE: I declare my candidacy for governor of the great state of New Jersey.

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): The last time Democrat Jim McGreevey ran for governor, the relatively unknown state legislator almost won, narrowly losing to incumbent Christie Todd Whitman.

That was four years ago. Today, McGreevey, mayor of one of New Jersey's largest townships, is ready to take on what he sees as the Whitman legacy.

MCGREEVEY: We in New Jersey have had eight years of failed leadership, failed leadership that has tripled our debt, driven up our property taxes, and failed to improve our schools.

FEYERICK: The likely Republican candidate, Donald DeFrancesco, is the state's Senate president and acting governor.

DONALD DEFRANCESCO, ACTING GOVERNOR OF NEW JERSEY: This is really as good as it gets.

FEYERICK: In a state with no lieutenant governor, DeFrancesco took over when Whitman left to accept President Bush's appointment as head of the Environmental Protection Agency. But will DeFrancesco's ties to the controversial political celebrity help or hurt?

INGRID REED, EAGLETON INSTITUTE: He can claim, in effect, credit for those parts of the Whitman administration that were positive ones, but then he also has to take, in effect, the blame if the Whitman administration is criticized.

FEYERICK: Criticism levied for racial profiling, high property taxes, and auto insurance, with McGreevey making it clear that he will come out swinging.

MCGREEVEY: We need a new era of accountability.

FEYERICK: Says DeFrancesco's spokesman...

DAVID MURRAY, REPUBLICAN SPOKESMAN: What you didn't hear from Jim McGreevey is that his record as mayor in this town of Woodbridge is raising property taxes over 70 percent.

FEYERICK: New Jersey voters are considered moderate, middle of the road. One recent poll shows they tend to think Republican when it comes to taxes and crime. But they side with Democrats on issues of education, race, abortion and the environment.

FEYERICK: Pollster Maurice Carroll says both men are likely to emerge as strong candidates.

MAURICE CARROLL, POLLSTER: McGreevey's a Democrat and things have been turning Democrat in New Jersey, DeFrancesco is the acting governor and that's an 800-pound political gorilla, so they've both got lots of things going for them.

FEYERICK: First, though, the Republican candidate must win a June primary.

Deborah Feyerick, CNN, New Jersey.

(END VIDEOTAPE)

WOODRUFF: The results of Census 2000 paint a clearer picture of America's racial and ethnic diversity. Calling the nation far more diverse than in decades past, the Census Bureau released new figures today. Among the findings, 13 percent of the population is Hispanic, a 58 percent increase from the 1990 census; 12 percent of the population is African-American.

And despite new categories and the option to choose more than one race on the census forms, just 2 percent of respondents identified themselves as biracial or multiracial. Non-Hispanic whites are still the largest single group making up 76 percent of the population.

Joining us now is CNN senior analyst Jeff Greenfield. Hello, Jeff.

JEFF GREENFIELD, CNN SENIOR ANALYST: How are you doing?

WOODRUFF: You have been doing some thinking about the political implications of these census figures.

GREENFIELD: Well, the most obvious one is why the Democrats are in such good shape in California, when the Republicans turned to an anti-immigration theme that alienated a lot of Hispanics, who are an ever larger part of the California population. California has now a Democratic governor and two Democratic senators.

The other issue is one of those weird bureaucratic things that most of us often ignore. Do you remember last week that the director of the Census Bureau said that they were not going to use a statistical sample to make up for the -- some 3 million people that the raw count of the consensus misses? That could have enormous political implications.

It's been a fight between the Democrats and the Republicans. Democrats want that statistical sample because they feel that people in neighborhoods that are more traditionally more Democratic, and if they are a large number of poor people, minorities tend to get undercounted. And when you redistrict a congressional state, by congressional district after a census, that count tells you where you are supposed to shrink districts, redistrict them, make people count for less.

And so what has happened is that decision not to use a statistical sample -- it's hard to say, means that the traditionally Democratic neighborhoods may wind up with a smaller population than they actually have. So what? Republicans thought that nationally a statistical sample could add as many as 12 seats to the Democratic column in 2002. Republicans only control the House by five. A switch of five seats changes the House from Republican to Democratic. So this apparently bureaucratic statistical decision by the director of the census may actually wind up having enormous political impact.

WOODRUFF: And there is a monetary effect to all of that, isn't there, Jeff, as well?

GREENFIELD: You bet. Big time, as the vice president might say. When federal dollars are allocated -- some 185 billion of them are allocated based on how many people live in the area. That's not just voting people. That's illegal aliens, that's kids, that's everybody. And so if three million people are under counted in certain neighborhoods, those neighborhoods will get fewer dollars than if they had been counted by another method.

So, yes, you are talking about political power and you're talking about money. And that ain't bean bag.

WOODRUFF: Speaking of money, Jeff, there is another story that we probably haven't been paying as much attention to as we should have lately -- having to do with campaign finance reform.

GREENFIELD: Yes. One of the most interesting things that's happened in this whole political year is that the Democrats, as we get into the floor debate, set for next week, on the McCain-Feingold Bill, are apparently beginning to have some second thoughts.

They have been solidly behind McCain-Feingold -- the Democrats in the Senate have -- and some cynics have said, that is because you knew that it wouldn't pass. Well, now there are four more Democrats in the Senate; they may have a filibuster-proof majority. And certainly, Democrats are looking up some of them and saying, you know, we equaled Republicans when it came to raising soft money in 2000. Where we got killed was in the regulated hard money, limited to $1,000.

And groups like the AFL-CIO, one of the Democratic Party's most loyal constituencies are saying, wait a second, that bill is going to restrict the kind of advertising we as independent sources -- you know, the kind of ads where we don't say, vote for Smith but we say, call Jones, and tell Jones to stop proposing all things good.

Those ads would be controlled and affected by McCain-Feingold, and groups like the AFL-CIO are saying, you know, maybe we don't like this bill as much as we once did. So you may see that solid Democratic phalanx for McCain-Feingold wavering a little when that floor debate starts.

WOODRUFF: And of course, the Republicans, who've opposed at least this form of campaign finance reform all along, are watching all of this with great interest, Jeff.

GREENFIELD: Yes, and they have got their own proposals and it just shows -- it never ceases to amaze me how the battle lines change when people start thinking, now, how does this affect me and my party.

WOODRUFF: All politics is local. Somebody said that; Was it Tip O'Neil.

GREENFIELD: Yes, but I think I'd amend that to say, all politics has to do with, who's ox is Gored -- local, national?

WOODRUFF: And something about my backyard.

GREENFIELD: You got it.

WOODRUFF: All right. Jeff Greenfield, thanks a lot.

GREENFIELD: See you soon.

WOODRUFF: Coming up next on INSIDE POLITICS, Capitol Hill is apparently taking a lesson from Madison Avenue, using gimmicks to sell policy. We'll pull out the latest political props, next.

(COMMERCIAL BREAK)

WOODRUFF: Sometimes, if you can imagine it, the issues that consume lawmakers on Capitol Hill are less than fascinating for the average American. So to attract cameras, and most important, voter attention, politicians on both sides of the aisle are enlisting the help of real people. Kate Snow reports on this Capitol Hill strategy.

(BEGIN VIDEOTAPE)

KATE SNOW, CNN CORRESPONDENT (voice-over): Last week it was Uncle Sam and workers dressed for their jobs put in place to illustrate a Republican point.

REP. DENNIS HASTERT (R-IL), HOUSE SPEAKER: We are going to cut the income tax rate for all taxpayers in this country.

SNOW: Here is the thinking. Maybe Americans don't know who Dennis Hastert is, but they can relate to a chef and construction workers.

MICHAEL DEAVER, FORMER REAGAN AIDE: People watch television news, with an entertainment frame of mind. So it has to be either interesting, shocking, enjoyable, beautiful, funny, something to get them to stop.

SNOW: So they use gimmicks and real people. How they get those real people is part of the game in Washington. Republicans put out the call to industry groups, the calls turn into e-mails. The "Washington Post" got ahold of one on the Republican event; it said, "we do need bodies. They must be dressed down, appear to be real worker types."

Republican aides say, the author got a little too excited. They didn't tell anyone to come in costume, just come as they are.

It is common practice on Capitol Hill, and industry groups are glad to help.

LISBETH LYONS, NFIB: There are many members who are very anxious to share their story with Congress. We will call them, we will send a fax alert. Typically, it's a very personal type of interaction.

SNOW (on camera): Democrats play the game, too. Sometimes, they invite people to this spot right outside the Capitol, or even better, get off Capitol Hill, but close enough that they cameras will come.

(voice-over): Democrats wanted to use nearby Pete's Diner for their tax event. They didn't want you to see House Minority Leader Richard Gephardt in this room, they wanted to put him behind the counter with a waitress, a waitress imported from Virginia.

GUM TONG, OWNER, PETE'S DINER: I think, like, none of the other waitresses, you know, met the requirement they wanted to be put on the news for.

SNOW: And if there aren't any real people around, congressional aides will do, dressing the part to call for marriage penalty relief.

MICHAEL DEAVER, FORMER REAGAN ADVISER: That's a good image, because that instantly said marriage. People stopped and listened, they say, somebody's getting married on the steps of the Capitol?

SNOW: Deaver says using images works. Drive home the point to viewers, and they'll call a member of Congress, which can change a vote in Washington, but there is a line between fun and fakery.

DEAVER: I don't think you can fake it. I mean, because -- Ronald Reagan used to always tell me, the camera never lies. You can't fool the camera. We get -- we understand when you are trying fool us.

SNOW: It has to sell in Spokane and Tucson to be a success on the Hill.

Kate Snow, CNN, Capitol Hill.

(END VIDEOTAPE)

WOODRUFF: Coming up at the top of the hour, we will bring you the latest details on the accidental U.S. Navy bombing in Kuwait.

And protesters ascend on 1600 Pennsylvania Avenue. We will tell you who they are, and why they are targeting President Bush.

(COMMERCIAL BREAK)

WOODRUFF: Thank you for joining us.

We begin with a dismal day on Wall Street, and some of the political fallout that may result. For the very latest, we join CNN's Terry Keenan at the New York Stock Exchange -- Terry.

KEENAN: Well, Judy, believe it or not, they're having a party here on the floor of the New York Stock Exchange as we speak, but certainly wasn't a day for celebration during official trading hours.

We had a brutal sell-off, and the Nasdaq today officially broke into bear market territory -- excuse me, the S&P 500 officially broke into bear market territory that brought index down 23 percent. The Nasdaq, of course, as we all know, already in bear market territory. Today, it fell another 6 percent, more than 129 points, while the Dow -- as you can see, they're down 436 points, a decline there of better than 4 percent.

The bullish investors who thought that the selling in the Nasdaq would not affect the rest of the old economy stocks that trade in the Dow learned the hard lesson today that no stocks were spared. We had heavy selling in shares of General Electric, the most valuable company in the world -- down 10 percent, wiping out $41 billion in market value. Honeywell, also down by about 10 percent. Disney -- down 8 percent. Microsoft -- down 8 percent, all indicative that big professional money managers were selling and selling pretty relentlessly today.

Traders would like to see a rally come tomorrow morning, or at least some attempt at a rally. We didn't see that at any point in today's trading session. That will be the thing to watch when the opening bell rings here tomorrow -- Judy.

WOODRUFF: And, Terry, what are the experts saying were the factors that attributed to this?

KEENAN: Well, today, the final straw was Cisco, which of course, used to be most valuable company in the world this time last year -- it sells the things that make the Internet work, the plumbing of Internet -- that company coming on very hard times, surprising the street late Friday by saying it was going to lay off 17 percent of its work force. It says it has no idea how bad business is going to be the rest of the year, because it is pretty bad right now, and surprisingly so, not just in the U.S., but around the world.

And that just really triggered wholesale selling in a lot of Cisco competitors, and it trickled over into the rest of the market, and it all should have a big negative impact, unfortunately, on consumer confidence. We'll get latest consumer confidence numbers for the month of March, that out on Friday.

WOODRUFF: All right. Terry Keenan, reporting from the New York Stock Exchange. Thanks very much.

Well, a stock market tumble of this size reaches far beyond Wall Street, and might have a major political effect as well. CNN's Jonathan Karl is standing by on Capitol Hill with the political reaction to the stock sell-off.

Jon, first of all, is there any sort of early sense of how today's events could, down the road, affect the tax cut debate?

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, first and foremost, Republicans are saying that this plays right into their central argument for the tax cut, which is that we need a tax cut to stimulate the economy. There is more signs the economy seems to be in trouble, certainly the stock market seems to be in trouble. The Republicans are saying this just shows once again that what Bush has been saying is correct, which is that we need a tax cut to boost the economy.

But, Judy, it doesn't really end there, because a lot of Republicans are saying, at least privately, that this Bush tax cut was never even designed to stimulate the economy, and what really needs to be done is is it needs to be redesigned to have more of a stimulative effect, and that means a capital gains tax cut.

Today, Trent Lott, before we really saw the worst of the sell- off, spoke to reporters and talked about how he would continue to advocate for a capital gains tax cut. He said as long as he is in Senate -- it was his strongest argument I have to date this year, talking about a capital gains tax rate, which of course, the capital gains tax cut is not in Bush's present plan. People like Lott and people around Lott are saying, Bush needs to start thinking about going after a tax cut that would stimulate the economy, and that means cutting capital gains.

WOODRUFF: So, Jonathan, what about those who are, you have to say, on the fence? People who are saying they will take a look at the Bush plan, but they are not sure, they have concerns. How might this, down the road, affect them?

KARL: Well, that is very interesting, because there's a lot of fence-sitters on this, or the moderates on both the Republican and the moderate side -- Republican and Democratic side -- who have been saying all along that what needs to happen is you need a trigger, a trigger that would mean these tax cuts would not go into effect if these projected budget surpluses do not merge. That has been a central arguments of people like Olympia Snowe and Susan Collins of Maine.

And basically, what this means if that you have an economic slowdown, it is quite possible that the projected surpluses would not emerge. So, you have kind of two arguments running into conflict here: the economic slowdown may mean that surplus projections will not be what they are right now, that we might not have as big a surplus, and that means that a lot of these Republicans who are arguing the case that we need a tax cut to stimulate the economy are going to be less inclined toward that moderate compromise of having a trigger in this tax cut.

So it's too early to say -- I have not -- many of the moderates who have been pushing this trigger idea were not on Capitol Hill today, were not out publicly talking about the sell-off. We haven't heard from them directly in response to today's news, but it's going to be an interesting argument, it's going to bring an argument for the trigger into a whole new dimension.

WOODRUFF: Well, Jonathan Karl, as you say, this is -- it is early, this is just one day of the market, and of course, we will continue to watch it very closely. Thanks very much. President Bush sent organized labor a strong message by intervening in the Northwest Airlines labor dispute. His action, which averts a strike for at least 60 days, angered mechanics who are in negotiations with the airline.

Our John King takes a closer look at the dispute and the president's strategy.

(BEGIN VIDEOTAPE)

CROWD: Bush unfair to labor.

KING (voice-over): Not a picket line, but a protest by Northwest Airlines mechanics angry that President Bush took away their right to strike and convinced they will soon have company.

VICTOR REMENESKI, AMFA LOCAL 19: If we could be forced against our wishes to stay at work, then the other airlines are going to face the exact same thing.

KING: The labor dispute at Northwest involves some 9,400 mechanics, cleaners and custodians. The union had set a Sunday strike deadline, but the order creating a presidential emergency board effectively pushes the possibility of a strike back to mid-May. Northwest management welcomed the decision, and the White House said the president acted to prevent any major new turbulence in an already sluggish economy.

ED HUDGINS, CATO INSTITUTE: George W. Bush is a pragmatist. That is, he is going to take his authority and when he sees a crisis coming along, he's going to try to head it off.

KING: There are labor disputes brewing at the nation's three largest airlines: United, American, and Delta as well as regional carrier Comair. And some see the president's quick intervention in the Northwest dispute as a blunt message to unions at other airlines.

REP. JIM OBERSTAR (D), MINNESOTA: That if you don't come to terms with management, then the president of the United States will settle the dispute for you, not necessarily on your terms.

KING: The Railway Labor Act gives the president authority to name an emergency board and order a 60-day cooling off period. The board is charged with proposing a new contract, and if the parties refuse to accept it, Congress can step in and impose a settlement.

That power was last used in 1997, when President Clinton stepped in to block a Christmas-time strike by American Airline pilots.

(on camera): It is the fast-approaching spring and summer vacation season that Mr. Bush is worried about, and the president is making clear to top aides he is prepared to take whatever steps necessary to avoid major disruptions, regardless of the criticism from labor unions.

John King, CNN, the White House. (END VIDEOTAPE)

WOODRUFF: Just ahead on INSIDE POLITICS, the president takes his budget proposals to Florida, as one newspaper reexamines the controversial butterfly ballot and its possible role in Al Gore's defeat in that state.

(COMMERCIAL BREAK)

WOODRUFF: An update now on the U.S. military accident at a bombing test range in Kuwait today. Pentagon officials say that a Navy F/A-18 Hornet dropped a 500-pound bomb during military exercises in northwest Kuwait. That's about 30 miles from the Iraqi border. Pentagon officials say six people died, including five American servicemen, and a New Zealander. Five others were reported wounded. All of those killed were observers.

The F/A-18 involved in the incident was similar to the one seen here. It is based on the aircraft carrier USS Harry Truman which is currently on patrol in the Persian Gulf. Kuwaiti officials say the accident happened near the end of joint U.S., British and Kuwaiti exercises,

President Bush traveling in Florida called for a moment of silence to honor the American servicemen killed in Kuwait today. The president was in the Sunshine State to talk about his tax cuts and budget proposals, and he found a receptive audience for his plans to improve the military quality of life.

Bush's primary focus, however, was his tax cut plan during this, his first official visit to Florida since the end of disputed presidential election. Mr. Bush appeared with his brother, Florida Governor Jeb Bush, but he did not discuss publicly the Florida election.

Over the weekend, "The Palm Beach Post" newspaper reported a new wrinkle in the post-election ballot examinations. "The Post" found that Al Gore lost more than 6,000 votes to double punching. The cause: That controversial butterfly ballot design.

Joining us now to talk about the findings, Bill Rose of "The Palm Beach Post." First of all, Bill Rose, why did your newspaper undertake this ballot examination?

BILL ROSE, "THE PALM BEACH POST": Well, if you had been in Palm Beach County the day after the November 7th general election, you would know why, because there was consternation, there was confusion, people were upset. Our telephones were literally ringing off the hook with people saying that they were totally confused by the butterfly ballot, and -- yes, go ahead.

WOODRUFF: Any word ahead of time that this might be a problem? The ballot had been published in the newspaper.

ROSE: The ballot had been published in the newspaper, but there was no word ahead of time that this might be a problem, other than, you know, an occasional mention here and there. Gee, this might be confusing, said a couple of election supervisors from other counties at a meeting back before the election. But in Palm Beach County, there really wasn't a lot of talk about it beforehand.

WOODRUFF: Now, you were looking at the so-called "overvotes," people who voted more than once. Is that correct?

ROSE: That's correct. There were 19,125 of them, I think, in Palm Beach County. And when we examined them, we found that an extraordinary 80 percent of them involved a vote for Al Gore, and of course, somebody else. But...

WOODRUFF: How did you decide, as you were looking -- excuse me for interrupting, but how did you decide which to count for Gore, and which to count -- how did you know that the voter intended Al Gore on those you counted for him?

ROSE: Well, the first indication that they intended to vote for Al Gore was he was one of the two names they punched. But from there, it was pretty easy to figure out who they were trying to vote for because so many of those votes came in heavily Jewish, heavily Democratic precincts, where you just don't expect to have a lot of votes for candidates like Pat Buchanan.

We went through one precinct in South Palm Beach County and talked to 1,200 voters where there was supposedly several dozen votes for Pat Buchanan. We found not a single voter who intended to vote for Buchanan. So it was obvious that people were confused by the candidates being on different sides of the ballot.

WOODRUFF: What do you say to Republicans who are looking at this process and saying, this is just speculation, you really don't know what was in the voter's minds, no matter how many surveys you do after election day?

ROSE: Well, you know, I would say there's a lot of merit to that argument when you're talking about undervotes. But when you're talking about overvotes like we looked at, and 80 percent of them involved Al Gore, it was pretty obvious to us that if you knew the composition of those precincts and you knew Palm Beach County's voting history, that the Palm Beach County voters had the will and the intent and the ability to elect Al Gore on November 7th, and they failed at the voting booth.

And for many of them, the reason they failed was the butterfly ballot. They were confused, and these were voters, I might add, that are not normally confused. These are voters that usually get it right.

WOODRUFF: How much does all this matter, Bill Rose, in the aftermath? What is the aftermath there in Palm Beach County?

ROSE: Well, there is still a lot of people that are confused and angry. I think Theresa LePore, the election supervisor, if she had it to do over again, she said it, in fact, would never use another butterfly ballot. I think that people will be a lot more careful about how they vote. I think people will be a lot more critical of proposed ballots, and I think the state legislature will take a hard look at the process because it's proved to be a lot more frail and a lot more troublesome than we ever realized.

WOODRUFF: Are there Republicans in Florida, in the county or elsewhere who have embraced what your newspaper has done?

ROSE: Well, I wouldn't say many Republicans have embraced what we have done anywhere. We've gotten a lot of e-mail, a lot of phone calls today. Most of it from Republicans is critical. You know, they see it as trying to undermine George Bush's presidency.

In fact, that's not our intent at all. The election is over. George Bush was elected president. He was officially chosen, you know, by the people. Those ballots that might have elected Al Gore were thrown out. What I tell those people is that's fine, and I agree with all that.

It's just that we're reporting on what appeared to be a tragic mistake by voters and election officials, and, you know, one would hope that this would not happen again in American political history.

WOODRUFF: All right, well Bill Rose at "The Palm Beach Post," we thank you very much for joining us. Thank you.

ROSE: Thank you.

WOODRUFF: Appreciate it. "The Palm Beach Post" recount is independent, we want to report here, of an analysis by a consortium of news media working together counting ballots in other counties as well, of which CNN is a part.

And coming up next, George Bush in the land of oranges and sunshine. Is his visit to Florida bittersweet?

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): ... to Florida. It was exactly three months to the day that the Supreme Court ruled in a decision which, for better or worse, settled the election. But he is not one for retrospection.

BUSH: I want to create awareness about a common sense budget and ask you to take action to help me get it passed.

CROWLEY: For candidate Bush, Florida held the keys to the kingdom. For President Bush, Florida is just another stop on a tour to push for tax cuts.

BUSH: Well, I'm glad I came.

CROWLEY: The president's top campaign strategist, Karl Rove, told interviewers recently he still has Florida election nightmares, but if the near-miss experience plagues the president's nights or days, it does not show.

Moving on is as much a political necessity as a personal proclivity. To govern effectively, the president must create in office the mandate he did not get in the election.

For Democrats, Florida remains both a sore spot and, they believe, a potent political weapon, not just against the new president and his agenda, but against his brother, the governor of Florida up for reelection next year.

(BEGIN VIDEO CLIP, FLORIDA STATE PARTY AD)

NARRATOR: Jeb Bush didn't stand up to count Florida's votes right and George Bush's budget undermines prosperity.

(END VIDEO CLIP)

CROWLEY: With ads and news conferences, press releases and phone calls, Democrats are determined to keep Florida alive. In the political lexicon, Florida is a rallying cry now, a way to keep the grassroots burning with fury; all the better to get them to the polls in 2002, and beyond.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: And that's all for this edition of INSIDE POLITICS. I'm Judy Woodruff. "MONEYLINE" is next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com