Margaret Warner speaks to former Tennessee Governor Lamar Alexander, the man whose third place finish in Iowa has given new life to his New Hampshire campaign.

MARGARET WARNER: Welcome, Governor.

LAMAR ALEXANDER, Republican Presidential Candidate: Thank you, Margaret.

MARGARET WARNER: The big political news today, just happened an hour or so ago, is that Phil Gramm has dropped out of the race. How does that affect this contest?

LAMAR ALEXANDER: Well, it affects it quite a bit. Phil was one of the most important competitors from the beginning. He had a real chance to be President. He campaigned well. He has a lot of political and financial support, and I hope a lot of that will go to me, particularly in the South, from Texas to Mississippi, Tennessee, Georgia, South Carolina, Florida, those are all very key primary states, plus Phil had a strong financial base so it's one important conservative out, and as someone who's trying to present a conservative vision of the future, I hope to attract his supporters.

MARGARET WARNER: Does it strike you as unusual or remarkable that the three people who've dropped out of the race are a governor, Pete Wilson, and two U.S. Senators, people who in another year might have been considered very serious contenders?

LAMAR ALEXANDER: Well, they are serious contenders. This is just an obstacle course that's hard to get across, and the race is narrowing down quickly. I think what an awful lot of Americans don't realize it's about over. I mean, this is a 40-yard dash which is just starting. There are only two, maybe three, of us left who have a chance to be the Republican nominee, and we'll know by March the 12th, so it's pretty natural that it would narrow down by then.

MARGARET WARNER: And who are those three?

LAMAR ALEXANDER: Well, Senator Dole and I, I believe, will be the two after New Hampshire who have a chance to be the Republican nominee. We're very different. I have nothing but respect for Bob Dole. I just think there are a great many Republicans looking up at the race now and realizing that in order to have our vision of the future, we have to get Bill Clinton out of the way. And they want to beat Bill Clinton. So they're saying to Bob Dole, Bob, we respect you, but you're not the right man to be in that debate with Bill Clinton next October, you're not the right man to be the first President of the next century. His support is very low for someone who's known so well.

MARGARET WARNER: So if there's one key message you have to get across to the voters of New Hampshire before next Tuesday, in the next six days, what is it?

LAMAR ALEXANDER: Well, it's that I represent new ideas, the future, new leadership. Sen. Dole represents not very many ideas, and Mr. Buchanan represents the wrong ideas.

MARGARET WARNER: Today Bill Bennett, former Education Secretary, endorsed you. Why?

LAMAR ALEXANDER: Well, we're great friends. I'll tell you why I'm glad he endorsed me. Bill Bennett is not just an endorsement. He's chairman of my campaign. Bill Bennett is America's conservative conscience. If there is one person in this country whose support I would like to have as we try to select a Republican nominee to be the first President of the next century, it would be Bill Bennett. He has his ear to the ground. He has his hand on the most important issues in our country, which are outside Washington and which have to do with rebuilding the family, the neighborhood, the church, the synagogue, and the school. He is chairman of the campaign. Our views are greatly alike. Many people would be surprised to know how much alike our views are, and we've known each other for a long time. We work well together.

MARGARET WARNER: Why would they be surprised to know that?

LAMAR ALEXANDER: Well, because we're different. We look different. Bill used to joke and say, he could say, he could stand up and say, well, it's a pleasant day, and everybody would say, what a great conservative speech, and I can stand up and say, let's hang 'em by their toes and cut out their entrails, and everybody would say, what a pleasant person, so we could say the same thing and people don't hear it. But when it comes to a new tax system, when it comes to school choice, when it comes to paying teachers more for teaching well, when it comes to ending Washington welfare and turning it into neighborhood charity, when it comes to fighting drugs and controlling our borders, we see eye to eye, and I believe a great many Republicans will be comfortable with leadership that includes Lamar Alexander and Bill Bennett.

MARGARET WARNER: Let me ask you about Steve Forbes. The polls here which are very volatile do suggest that you and he are battling for third place. Why should voters choose you over Forbes?

LAMAR ALEXANDER: Well, because I'm from the real world, and I'm better prepared to be President than Steve Forbes. I mean, I've been a governor, a university president, a cabinet secretary. I helped to start a business with 1200 employees. My feet are on the real ground outside Washington. What happened to Steve in Iowa was he spent $4 million, he brought out this flat tax, which he took to a zany extreme, which became very unpopular, and then he became very unpopular because of all this mudslinging. He spent $4 million, most of it slinging mud, telling untruths about Sen. Dole, about me, about Sen. Gramm, and he went straight down, and that will happen to him in New Hampshire if he keeps it up.

MARGARET WARNER: All right. But today his campaign's announcing they're pulling all negative ads; they're not going to run any negative ads.

LAMAR ALEXANDER: That's terrific.

MARGARET WARNER: He's going back to his positive message.

LAMAR ALEXANDER: I commend him for that, because Steve Forbes has a lot to say to the American people. He has a lot to contribute to the Republican Party, and when he was focusing on himself and where he wanted to take the country, he did well. I would challenge Sen. Dole to do the very same thing that Steve Forbes says he will do, and that I have done in Iowa. What happened in Iowa was that Dole and Forbes almost persuaded people that what they were saying about each other was actually true, that Forbes is unprepared and that Dole doesn't have the vision to be the first President of the next century, and they looked for somebody else. So if Sen. Dole will join us in that--

MARGARET WARNER: In what?

LAMAR ALEXANDER: In running a positive campaign, taking the high road. Already, they were saying today the Dole campaign was going to start running negative ads against me. I think it'll hurt him. I think he'll go down if he does that, and I think I'll go up.

MARGARET WARNER: You have discounted Pat Buchanan as the guy with the wrong ideas. But, in fact, he seems to have a lot of support here. How do you explain that?

LAMAR ALEXANDER: Well, we haven't voted yet. Pat has a lot of energy, and I give--I respect him for that. I don't have any criticism of him personally. He, he's a social conservative. I will acknowledge that. But economically, he has the wrong ideas. He has George McGovern's foreign policy. He has Robert Reich's labor policy. He has Dick Gephardt's trade policy. That's an odd set of ideas, but it's certainly not a conservative set of ideas. And when Republicans in New Hampshire discover Pat's policies, I think they will agree they're wrong and they'll look to me for a new set of ideas that are more in keeping with where our country needs to go.

MARGARET WARNER: Let me in the interest of fair play quote to you what Pat Buchanan said in my interview with him yesterday about you. He also said, he said, you're a class act, but he said, "Lamar's problem is, he has no agenda, there's no cutting edge." He said, "There's just Lamar, who's a very nice moderate man." Do you have a definition problem?

LAMAR ALEXANDER: No, I have no definition problem. I think that what people want when they elect a President is someone whose character and personality and temperament is something in which they have some confidence. That's where they start. We're not electing a flame thrower or someone to make a list of people we don't like. We're not electing a President of a think tank or someone to be the President of Washington. We're electing a chief executive of the whole country, and you start with character and temperament. But if you want to go to new ideas, my ideas are a new tax system. My ideas are a new branch of the armed services to control our border, to a neighborhood charity foundation instead of Washington welfare, a GI Bill for kids to help parents take back their schools, a part-time citizen congress created by cutting the pay of Congress and sending them home. My ideas include turning all the work--job training programs we have in this country, almost all of them, $20 billion worth, into work scholarships. Now, that's a set of conservative ideas that would lead straight into the next century very well, and I'm just now having a chance to tell the American people that they're just becoming aware of my, my ideas and my agenda.

MARGARET WARNER: And what would you regard as victory here in New Hampshire?

LAMAR ALEXANDER: Victory here in New Hampshire, I would like, as we come out of New Hampshire, for the country to look at what's left and say there are really only two left. I think it will be Sen. Dole and me, who can be the Presidential nominee of the Republican Party. That won't be a bad choice for the country. We're just very different.

MARGARET WARNER: But are you saying then you have to come in second?

LAMAR ALEXANDER: Well, I'm just saying there will have to be two. I think Steve Forbes can be around as long as he wants to spend money, and Pat can be around. He's a class act as well. He can be around, though, as long as he wants to take extreme positions. But at some point, everyone is going to have to say, whoops, this is going to be over by March 12th. We've got about three weeks. Let's narrow it down to two. And the two are likely to be Senator Dole and me, and that's just a choice. I mean, he's from one generation; I'm from another. His career is Washington; mine is mostly outside. He's a chief legislator. I'm a chief executive, and I believe I can win a vision contest with Bill Clinton and a growing number of Republicans are beginning to agree with that.

MARGARET WARNER: Well, thank you, Governor. Thanks very much.

LAMAR ALEXANDER: Thank you.