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CNN Live Today

President Bush Makes Surprise Call to John McCain; Najaf Standoff; Poor and Uninsured

Aired August 26, 2004 - 11:00   ET

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


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


DARYN KAGAN, CNN ANCHOR: It is 11:00 a.m. on the East Coast, 8:00 a.m. on the West Coast. From CNN Center in Atlanta, good morning once again. I'm Daryn Kagan.
Up first this hour on CNN, a new development in the wake of the Swift Boat ad controversy. Our Kathleen Koch is traveling with the president and joins us now from New Mexico.

Kathleen, good morning.

KATHLEEN KOCH, CNN CORRESPONDENT: Good morning, Daryn.

White House spokesman Scott McClellan says that President Bush made a surprise call this morning to Senator John McCain. President Bush telling the senator that he wants to work with McCain to pursue court action to shut down these 527 groups, these unregulated third- party groups that are spending on not only the Swift Boat ad, but also numerous anti-Bush ads that have been running on the airwaves around the nation. And the president told Senator McCain that if that does not work, taking legal action, that he wants to work with him to pursue legislative action.

Mcclellan said that McCain responded, saying that he thought it was good that the two men were working together. Senator McCain just yesterday told both "USA Today" and "The New York Times" that he and was going to speak directly to the president to express his displeasure that President Bush had not specifically condemned the content of the Swift Boat Veterans for Truth ads.

Now, a spokesman for the Bush-Cheney campaign, Scott Stanzel, says, in their opinion., President Bush has condemned not only that ad, but all 527 ads. And also, McCain is very much caught in the middle of this because he's also expressed his displeasure that the Kerry campaign has taken an excerpt of a Bush-McCain debate from 2000 and is using that in a campaign commercial. And Stanzel said it would be very interesting to see if the Kerry responds swiftly to McCain's request to withdraw that ad, to not use him in that ad.

Now, the president is -- President Bush is here in New Mexico. This is a very important battleground state for him. He lost it by just 366 votes back in 2000. He's going to be hitting three different cities, Las Cruces, Farmington, and then Albuquerque before heading back to Washington -- Daryn.

KAGAN: Kathleen Koch in Las Cruces, New Mexico. Thank you. Well, the controversy has already caused attorney Benjamin Ginsberg his job with the president's re-election campaign. It came out that he also advised the group behind the anti-Kerry spot, even though he said that advice was totally divorced from his campaign duties. Earlier today on CNN's AMERICAN MORNING, Ginsberg explained why he decided to quit.

(BEGIN VIDEOTAPE)

BENJAMIN GINSBERG, ATTORNEY: Good morning.

(END VIDEOTAPE)

KAGAN: Well...

(BEGIN VIDEO CLIP)

GINSBERG: The whole country was getting distracted from the president's forward-looking agenda that he wants to propose and had the country focus on it. Unfortunately, the -- the kind of virulent street theater that Senator Cleland did yesterday in Crawford just contributes to that distraction.

BILL HEMMER, "AMERICAN MORNING": Was this your decision or did the campaign come to you and say, "Mr. Ginsberg, it is time to exit?"

GINSBERG: No, it was mine. I mean, I'm -- unfortunately, the highest honor I've had as a lawyer is representing the president. But when the representation by a lawyer distracts from the agenda that the president wants to put forward, it is time to go.

(END VIDEO CLIP)

HEMMER: Ginsberg was referring to former Senator Max Cleland, who traveled to President Bush's ranch yesterday to personally deliver a letter of protest over the Swift Boat commercials. Cleland was not successful in meeting with the president. He also appeared today on AMERICAN MORNING to explain his objective.

(BEGIN VIDEO CLIP)

MAX CLELAND (D), FMR. SENATOR: The mission was to carry to the president this plea to please stop attacking the credibility and courage and character of John Kerry because those attacks are false and the president is behind it.

Two campaign officials in the last two weeks have had to resign because of their connection with the Swift Boat Veterans for Bush. This president has gone after three Vietnam veterans in four years. And it is time for this to stop.

(END VIDEO CLIP)

KAGAN: Cleland's letter was also signed by nine senators, all of whom are Vietnam vets. We turn our attention now to the standoff in Najaf. Iraq's most powerful Shiite cleric arrived back in the embattled city today. Grand Ayatollah Ali al-Sistani is trying to end nearly three weeks of fighting in Najaf. The bloodshed in that region continues.

An attack on a mosque in nearby Kufa today killed at least 25 people, according to Iraqi officials. Demonstrators responding to the call for a march on Najaf were gathered at the mosque when it was hit by mortars. Another 23 people were killed when snipers opened fire on the crowd in Kufa.

Iraq's interim prime minister has declared a 24-hour cease-fire in Najaf. And representatives of the Grand Ayatollah have started contact with the followers of the radical cleric Muqtada al-Sadr. CNN's Kianne Sadeq was in Najaf when al-Sistani arrived, and she explains what he is hoping to accomplish.

(BEGIN AUDIO CLIP)

KIANNE SADEQ, CNN CORRESPONDENT: They had five goals that they were attempting to accomplish in their time here. They wanted all armed persons out of Najaf and Kufa. They want no arms in Najaf and Kufa.

They said, "We want all foreign forces out of Najaf" as well. He said that they want compensation for those who -- who were affected by this conflict. And they want to solve all the problems of Iraq through legitimate elections.

(END VIDEO CLIP)

KAGAN: Let's get the latest developments out of Iraq this morning. Our Diana Muriel joins us live from Baghdad -- hello.

DIANA MURIEL, CNN CORRESPONDENT: Hello, Daryn.

Well, the cease-fire that was declared by the interim prime minister, Prime Minister Iyad Allawi, four hours ago, seems to be holding. The announcement of that -- that cease-fire coincided with the arrival of the Grand Ayatollah Ali al-Sistani who came from Basra, in the south of the country, today, through the country to -- to Najaf, where he is this evening.

His clerics, his supporters are now negotiating with the -- those clerics who support Muqtada al-Sadr. This is this junior renegade cleric whose Mehdi militia, Mehdi Army have been holed up in the shrine, the shrine of Imam Ali, one of the holiest sites in Shia Islam for the past three weeks.

The cease-fire extends to the Iraqi police force, the Iraqi defense force and U.S. forces who will hold their fire during the course of this night. Over the past four nights, we've seen aerial bombardments taking place around Najaf by U.S. forces. That is not going to happen tonight. But it has been a deadly day in Najaf and, indeed, in Kufa. At the beginning of the day, at the mosque where many of those who had responded to the Grand Ayatollah's call to come to Najaf to help rescue the holy city from the Mehdi militia, there were three mortars fired at the mosque, the main mosque there in Kufa. We understand that there were 23 dead and around 100 wounded there.

And then, subsequently to that, a group of peaceful demonstrators tried to make their way from the mosque area in Kufa towards Najaf itself, down the main approach road. It is approximately six miles away from -- from Najaf itself. And they were fired on by snipers and what sounded like machine gun fire.

In that skirmish, 25 people were killed and 60 wounded. So a very bloody day indeed in Najaf and Kufa this Thursday -- Daryn.

KAGAN: Diana Muriel reporting live from Baghdad. Thank you.

You can log on to our Web site for a special report on the struggle for Iraq, check the latest headlines, and get in-depth information and background at cnn.com/iraq.

Live picture there from Las Cruces, New Mexico. President Bush making a campaign stop. We'll be listening in. He's also going to be introduced.

Do you recognize the man at the podium? Former New York City Mayor Rudy Giuliani.

We're back in a moment.

Also, it is a name we haven't really heard in years and probably he would have wanted it that way. William Kennedy Smith facing a new accusation with a familiar ring. That's coming up next.

Also, an investigator takes center stage in the Peterson trial. We'll get an update.

And later, heavy manpower, even heavier firepower. With just days to go before the big convention, we'll show you how New York City is playing it safe.

CNN LIVE TODAY is back after this.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

KAGAN: Live pictures from Las Cruces, New Mexico. Of course, that's President Bush at the rally. We are listening in for any newsworthy developments. We'll bring those to you as they happen.

Meanwhile, the government last hour reported a sharp rise in the number of poor and uninsured Americans. The number of people living in poverty last year grew by 1.3 million to almost 36 million. And Americans without health insurance in 2003 also grew dramatically, up 1.4 million.

Financial correspondent Chris Huntington is in New York City looking at these latest numbers.

Chris, hello.

CHRIS HUNTINGTON, CNN FINANCIAL CORRESPONDENT: Daryn, hello. Well, buried in that report is -- are facts about another group of Americans, perhaps as many as 13 million of them who are sort of stuck in a no-coverage zone.

(BEGIN VIDEOTAPE)

HUNTINGTON (voice-over): Patricia Orzano owns a 7-Eleven in Massapequa, New York. And she used to have no trouble providing health care coverage for her eight full-time workers.

PATRICIA ORZANO, 7-11 FRANCHISE OWNER: Five years ago, I had a complete medical, dental, hospitalization plan for my employees that wanted it. And they either paid minimal $20 a week or nothing.

HUNTINGTON: But that's changed because of her skyrocketing insurance costs.

ORZANO: Just recently, the last couple of years, we have not been able to afford health care coverage for our employees. The rising cost each year, they used to go up five percent. But each year now it's 10 to 20 percent. And the premiums are just outlandish.

HUNTINGTON: And that puts Orzano's workers, like Frank Martin, in a terrible bind.

UNIDENTIFIED MALE: I really can't afford to see a doctor. If I'm working full time I deserve some coverage.

HUNTINGTON: That situation is alarmingly common.

(on camera): According to Families USA, a health care advocacy group funded by private foundations, there are more than 13 million low-income working Americans who do not get health care coverage through their jobs. And they're also ineligible for public assistance programs, like Medicaid, simply because they have a job.

KATHLEEN STOLL, FAMILIES USA: If you don't have employer-based coverage, and you don't have eligibility for Medicaid, you are really in a bad place. You may not be able to get any health insurance coverage at all.

HUNTINGTON: Stoll and others wrestling with health care reform point to several problems creating this no-coverage zone: outdated Medicaid eligibility rules that deny coverage to working families, a dizzying array of state laws that require insurance plans to cover expensive elective medical procedures, and the fact that small independent businesses cannot pool together to share insurance costs. President Bush supports small business insurance pooling, but the Small Business Health Fairness Act that passed the House last year is stalled in the Senate.

Democratic presidential nominee John Kerry wants the government to subsidize premiums for catastrophic health coverage. Both plans make for good stump speeches, but so far haven't done much for Patricia Orzano, nor her employees.

(END VIDEOTAPE)

HUNTINGTON: Well, Daryn, it's no overstatement to say that this is a problem that will not go away soon. The stump speeches notwithstanding, it is very difficult to get traction on Capitol Hill with making the kind of reforms that would help close the gap for these folks who are hard working but don't have health coverage.

KAGAN: Chris, some charges from Democrats today saying these numbers are actually out a month early, that the Republicans, since it is such bad news, want it to come farther away from the election. When would these numbers typically come out?

HUNTINGTON: Daryn, this is -- I can't speak exactly to that charge, but, generally speaking, the Census Bureau, as is the case with most government agencies, really sticks to a timetable of its own. These are career folks that are putting these numbers together. This is not something that is easily politically motivated.

Frankly, these numbers, there's something in there for both candidates to chew on and to make hay out of. The overall number of insured Americans went up. In fact, the number of Americans on government assistance programs also went up.

So President Bush, could, in fact, if he wanted to, point to that and say, well, we're doing our part here. The real burden will have to shift back to Congress to -- to change some of the laws that keep coverage from hitting all of those that really need it.

KAGAN: Something tells me we will hear from both sides, making the numbers work for them. Chris Huntington in New York, thank you.

Let's check the stories on the docket today in our CNN "Legal Briefs."

Jury selection begins tomorrow in Kobe Bryant's sexual assault trial. But today, another hearing. Prosecutors are challenging some DNA evidence in the case, claiming there was contamination. They also questioned the reliability of DNA tests done by defense experts.

And William Kennedy Smith is facing new allegations of sexual assault today. The nephew of President Kennedy and Senator Edward Kennedy denies the claim made in a civil lawsuit. A Chicago woman says Smith forced her out of the cab and into his house after a night of drinking, and then raped her. Smith was acquitted of rape in a high-profile trial back in 1991.

Testimony resumes next hour in Scott Peterson's double murder trial. A prosecution investigator is due back on the witness stand. Under cross-examination yesterday, Steven Jacobson said police once suspected co-conspirators may have been involved in Laci Peterson's disappearance. Jacobson also testified police at one time suspected that Amber Frey was not cooperating with them.

Investigators hope a $10,000 reward will help find the killer of two camp counselors found shot to death near -- on the beach near Jenner, California. A Wisconsin man interviewed in the case has been cleared after passing a polygraph test.

A show of force on the streets of New York City just days before the start of the Republican National Convention. Security is tight. The tension is high. That's coming up.

And you can usually find Olympian Jenny Finch on the softball field. But millions of Americans are looking for her someplace else. We will tell you where. This week's "Web Talk" is coming up.

(COMMERCIAL BREAK)

KAGAN: Let's go live to Las Cruces, New Mexico, and listen to President Bush.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Most people get their health insurance through small businesses. And yet, small businesses are having trouble providing health coverage. To help more Americans get health insurance, we must allow small employers to join together to purchase insurance at the discounts that big companies get in America.

(APPLAUSE)

BUSH: We'll use technology to reduce costs and prevent mistakes. We'll expand research to seek new cures for deadly diseases. And to make sure you've got affordable and available health care here in Mew Mexico, we need medical liability reform.

(APPLAUSE)

BUSH: These frivolous lawsuits are running up the cost of health care and they're running good docs out of business. See, I don't think you can be -- I don't think you can be pro-patient, pro-doctor and pro-trial lawyer at the same time.

(APPLAUSE)

BUSH: I think you have to choose. My opponent made his choice, and he put him on the ticket. I made my choice. I am for medical liability reform.

(APPLAUSE)

BUSH: We have more to do to make this economy stronger. Listen, we've been through a lot in this economy. Think about it, we've been through a recession, the stock market decline, we've been through attacks, we've had corporate scandals. But we've overcome these obstacles.

We've overcome them because the American workers are the best in the world. We've overcome it because our farmers and ranchers know what they're doing. We've overcome it...

(APPLAUSE)

BUSH: We've overcome these obstacles because the entrepreneurial spirit is strong and the small business sector of our economy is vibrant. I also think we've overcome it because of well-timed tax cuts.

(APPLAUSE)

BUSH: When you're talking to your friends and neighbors, remember to tell them we've helped American families by raising the child credit. We've helped the marriage families -- America's families by reducing the marriage penalty. By the way, the tax code ought to encourage marriage, not penalize marriage.

(APPLAUSE)

BUSH: We helped those small businesses. And this time the check actually was in the mail.

Because we acted, our economy since last summer has grown at a rate as fast as any in nearly 20 years. Because we acted, we created about 1.5 million new jobs over the past 12 months. Because we acted, the national unemployment rate is 5.5 percent. Because we acted, the unemployment rate in your great state is 5.3 percent. Because we acted, the people in this country are working.

(APPLAUSE)

BUSH: There's more work to be done. In order to make sure American jobs stay here in America, we need less regulations on our employers.

You ask your small business neighbor what it's like to fill out the paperwork. They'll say it's quite onerous. My problem is I can't promise anybody in Washington has ever read the paperwork.

We need tort reform to keep jobs here in America. To make sure people can find good work here at home, we need an energy policy. We need to become less dependent on foreign sources of energy.

(APPLAUSE)

BUSH: In order to keep jobs here at home, we've got to make sure other nations treat us in trade the way we treat them. Our markets are open for other products -- for products from other countries because it's good for consumers. And all we're saying is just make sure you open up your markets. We can compete with anybody, anyplace, anywhere with fair rules.

KAGAN: We've been listening in to President Bush. He's making a campaign appearance in Las Cruces, New Mexico, today.

Interesting state, New Mexico. Forget Florida. New Mexico was the closest race, state race back in 2000. Al Gore winning the state by fewer than 400 votes. This time around, New Mexico worth five electoral votes.

Meanwhile, in Minnesota, John Kerry will be making an appearance there, another battleground state. We will be listening in and seeing what he has to stay just ahead.

Right now we take a quick break.

(COMMERCIAL BREAK)

KAGAN: I'm Daryn Kagan in Atlanta. Let's check the headlines "Now in the News."

Democratic presidential candidate John Kerry is in Anoka, Minnesota, at this hour. He's due at a town hall meeting in about 15 minutes. The senator is expected to discuss health care.

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Aired August 26, 2004 - 11:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: It is 11:00 a.m. on the East Coast, 8:00 a.m. on the West Coast. From CNN Center in Atlanta, good morning once again. I'm Daryn Kagan.
Up first this hour on CNN, a new development in the wake of the Swift Boat ad controversy. Our Kathleen Koch is traveling with the president and joins us now from New Mexico.

Kathleen, good morning.

KATHLEEN KOCH, CNN CORRESPONDENT: Good morning, Daryn.

White House spokesman Scott McClellan says that President Bush made a surprise call this morning to Senator John McCain. President Bush telling the senator that he wants to work with McCain to pursue court action to shut down these 527 groups, these unregulated third- party groups that are spending on not only the Swift Boat ad, but also numerous anti-Bush ads that have been running on the airwaves around the nation. And the president told Senator McCain that if that does not work, taking legal action, that he wants to work with him to pursue legislative action.

Mcclellan said that McCain responded, saying that he thought it was good that the two men were working together. Senator McCain just yesterday told both "USA Today" and "The New York Times" that he and was going to speak directly to the president to express his displeasure that President Bush had not specifically condemned the content of the Swift Boat Veterans for Truth ads.

Now, a spokesman for the Bush-Cheney campaign, Scott Stanzel, says, in their opinion., President Bush has condemned not only that ad, but all 527 ads. And also, McCain is very much caught in the middle of this because he's also expressed his displeasure that the Kerry campaign has taken an excerpt of a Bush-McCain debate from 2000 and is using that in a campaign commercial. And Stanzel said it would be very interesting to see if the Kerry responds swiftly to McCain's request to withdraw that ad, to not use him in that ad.

Now, the president is -- President Bush is here in New Mexico. This is a very important battleground state for him. He lost it by just 366 votes back in 2000. He's going to be hitting three different cities, Las Cruces, Farmington, and then Albuquerque before heading back to Washington -- Daryn.

KAGAN: Kathleen Koch in Las Cruces, New Mexico. Thank you. Well, the controversy has already caused attorney Benjamin Ginsberg his job with the president's re-election campaign. It came out that he also advised the group behind the anti-Kerry spot, even though he said that advice was totally divorced from his campaign duties. Earlier today on CNN's AMERICAN MORNING, Ginsberg explained why he decided to quit.

(BEGIN VIDEOTAPE)

BENJAMIN GINSBERG, ATTORNEY: Good morning.

(END VIDEOTAPE)

KAGAN: Well...

(BEGIN VIDEO CLIP)

GINSBERG: The whole country was getting distracted from the president's forward-looking agenda that he wants to propose and had the country focus on it. Unfortunately, the -- the kind of virulent street theater that Senator Cleland did yesterday in Crawford just contributes to that distraction.

BILL HEMMER, "AMERICAN MORNING": Was this your decision or did the campaign come to you and say, "Mr. Ginsberg, it is time to exit?"

GINSBERG: No, it was mine. I mean, I'm -- unfortunately, the highest honor I've had as a lawyer is representing the president. But when the representation by a lawyer distracts from the agenda that the president wants to put forward, it is time to go.

(END VIDEO CLIP)

HEMMER: Ginsberg was referring to former Senator Max Cleland, who traveled to President Bush's ranch yesterday to personally deliver a letter of protest over the Swift Boat commercials. Cleland was not successful in meeting with the president. He also appeared today on AMERICAN MORNING to explain his objective.

(BEGIN VIDEO CLIP)

MAX CLELAND (D), FMR. SENATOR: The mission was to carry to the president this plea to please stop attacking the credibility and courage and character of John Kerry because those attacks are false and the president is behind it.

Two campaign officials in the last two weeks have had to resign because of their connection with the Swift Boat Veterans for Bush. This president has gone after three Vietnam veterans in four years. And it is time for this to stop.

(END VIDEO CLIP)

KAGAN: Cleland's letter was also signed by nine senators, all of whom are Vietnam vets. We turn our attention now to the standoff in Najaf. Iraq's most powerful Shiite cleric arrived back in the embattled city today. Grand Ayatollah Ali al-Sistani is trying to end nearly three weeks of fighting in Najaf. The bloodshed in that region continues.

An attack on a mosque in nearby Kufa today killed at least 25 people, according to Iraqi officials. Demonstrators responding to the call for a march on Najaf were gathered at the mosque when it was hit by mortars. Another 23 people were killed when snipers opened fire on the crowd in Kufa.

Iraq's interim prime minister has declared a 24-hour cease-fire in Najaf. And representatives of the Grand Ayatollah have started contact with the followers of the radical cleric Muqtada al-Sadr. CNN's Kianne Sadeq was in Najaf when al-Sistani arrived, and she explains what he is hoping to accomplish.

(BEGIN AUDIO CLIP)

KIANNE SADEQ, CNN CORRESPONDENT: They had five goals that they were attempting to accomplish in their time here. They wanted all armed persons out of Najaf and Kufa. They want no arms in Najaf and Kufa.

They said, "We want all foreign forces out of Najaf" as well. He said that they want compensation for those who -- who were affected by this conflict. And they want to solve all the problems of Iraq through legitimate elections.

(END VIDEO CLIP)

KAGAN: Let's get the latest developments out of Iraq this morning. Our Diana Muriel joins us live from Baghdad -- hello.

DIANA MURIEL, CNN CORRESPONDENT: Hello, Daryn.

Well, the cease-fire that was declared by the interim prime minister, Prime Minister Iyad Allawi, four hours ago, seems to be holding. The announcement of that -- that cease-fire coincided with the arrival of the Grand Ayatollah Ali al-Sistani who came from Basra, in the south of the country, today, through the country to -- to Najaf, where he is this evening.

His clerics, his supporters are now negotiating with the -- those clerics who support Muqtada al-Sadr. This is this junior renegade cleric whose Mehdi militia, Mehdi Army have been holed up in the shrine, the shrine of Imam Ali, one of the holiest sites in Shia Islam for the past three weeks.

The cease-fire extends to the Iraqi police force, the Iraqi defense force and U.S. forces who will hold their fire during the course of this night. Over the past four nights, we've seen aerial bombardments taking place around Najaf by U.S. forces. That is not going to happen tonight. But it has been a deadly day in Najaf and, indeed, in Kufa. At the beginning of the day, at the mosque where many of those who had responded to the Grand Ayatollah's call to come to Najaf to help rescue the holy city from the Mehdi militia, there were three mortars fired at the mosque, the main mosque there in Kufa. We understand that there were 23 dead and around 100 wounded there.

And then, subsequently to that, a group of peaceful demonstrators tried to make their way from the mosque area in Kufa towards Najaf itself, down the main approach road. It is approximately six miles away from -- from Najaf itself. And they were fired on by snipers and what sounded like machine gun fire.

In that skirmish, 25 people were killed and 60 wounded. So a very bloody day indeed in Najaf and Kufa this Thursday -- Daryn.

KAGAN: Diana Muriel reporting live from Baghdad. Thank you.

You can log on to our Web site for a special report on the struggle for Iraq, check the latest headlines, and get in-depth information and background at cnn.com/iraq.

Live picture there from Las Cruces, New Mexico. President Bush making a campaign stop. We'll be listening in. He's also going to be introduced.

Do you recognize the man at the podium? Former New York City Mayor Rudy Giuliani.

We're back in a moment.

Also, it is a name we haven't really heard in years and probably he would have wanted it that way. William Kennedy Smith facing a new accusation with a familiar ring. That's coming up next.

Also, an investigator takes center stage in the Peterson trial. We'll get an update.

And later, heavy manpower, even heavier firepower. With just days to go before the big convention, we'll show you how New York City is playing it safe.

CNN LIVE TODAY is back after this.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

KAGAN: Live pictures from Las Cruces, New Mexico. Of course, that's President Bush at the rally. We are listening in for any newsworthy developments. We'll bring those to you as they happen.

Meanwhile, the government last hour reported a sharp rise in the number of poor and uninsured Americans. The number of people living in poverty last year grew by 1.3 million to almost 36 million. And Americans without health insurance in 2003 also grew dramatically, up 1.4 million.

Financial correspondent Chris Huntington is in New York City looking at these latest numbers.

Chris, hello.

CHRIS HUNTINGTON, CNN FINANCIAL CORRESPONDENT: Daryn, hello. Well, buried in that report is -- are facts about another group of Americans, perhaps as many as 13 million of them who are sort of stuck in a no-coverage zone.

(BEGIN VIDEOTAPE)

HUNTINGTON (voice-over): Patricia Orzano owns a 7-Eleven in Massapequa, New York. And she used to have no trouble providing health care coverage for her eight full-time workers.

PATRICIA ORZANO, 7-11 FRANCHISE OWNER: Five years ago, I had a complete medical, dental, hospitalization plan for my employees that wanted it. And they either paid minimal $20 a week or nothing.

HUNTINGTON: But that's changed because of her skyrocketing insurance costs.

ORZANO: Just recently, the last couple of years, we have not been able to afford health care coverage for our employees. The rising cost each year, they used to go up five percent. But each year now it's 10 to 20 percent. And the premiums are just outlandish.

HUNTINGTON: And that puts Orzano's workers, like Frank Martin, in a terrible bind.

UNIDENTIFIED MALE: I really can't afford to see a doctor. If I'm working full time I deserve some coverage.

HUNTINGTON: That situation is alarmingly common.

(on camera): According to Families USA, a health care advocacy group funded by private foundations, there are more than 13 million low-income working Americans who do not get health care coverage through their jobs. And they're also ineligible for public assistance programs, like Medicaid, simply because they have a job.

KATHLEEN STOLL, FAMILIES USA: If you don't have employer-based coverage, and you don't have eligibility for Medicaid, you are really in a bad place. You may not be able to get any health insurance coverage at all.

HUNTINGTON: Stoll and others wrestling with health care reform point to several problems creating this no-coverage zone: outdated Medicaid eligibility rules that deny coverage to working families, a dizzying array of state laws that require insurance plans to cover expensive elective medical procedures, and the fact that small independent businesses cannot pool together to share insurance costs. President Bush supports small business insurance pooling, but the Small Business Health Fairness Act that passed the House last year is stalled in the Senate.

Democratic presidential nominee John Kerry wants the government to subsidize premiums for catastrophic health coverage. Both plans make for good stump speeches, but so far haven't done much for Patricia Orzano, nor her employees.

(END VIDEOTAPE)

HUNTINGTON: Well, Daryn, it's no overstatement to say that this is a problem that will not go away soon. The stump speeches notwithstanding, it is very difficult to get traction on Capitol Hill with making the kind of reforms that would help close the gap for these folks who are hard working but don't have health coverage.

KAGAN: Chris, some charges from Democrats today saying these numbers are actually out a month early, that the Republicans, since it is such bad news, want it to come farther away from the election. When would these numbers typically come out?

HUNTINGTON: Daryn, this is -- I can't speak exactly to that charge, but, generally speaking, the Census Bureau, as is the case with most government agencies, really sticks to a timetable of its own. These are career folks that are putting these numbers together. This is not something that is easily politically motivated.

Frankly, these numbers, there's something in there for both candidates to chew on and to make hay out of. The overall number of insured Americans went up. In fact, the number of Americans on government assistance programs also went up.

So President Bush, could, in fact, if he wanted to, point to that and say, well, we're doing our part here. The real burden will have to shift back to Congress to -- to change some of the laws that keep coverage from hitting all of those that really need it.

KAGAN: Something tells me we will hear from both sides, making the numbers work for them. Chris Huntington in New York, thank you.

Let's check the stories on the docket today in our CNN "Legal Briefs."

Jury selection begins tomorrow in Kobe Bryant's sexual assault trial. But today, another hearing. Prosecutors are challenging some DNA evidence in the case, claiming there was contamination. They also questioned the reliability of DNA tests done by defense experts.

And William Kennedy Smith is facing new allegations of sexual assault today. The nephew of President Kennedy and Senator Edward Kennedy denies the claim made in a civil lawsuit. A Chicago woman says Smith forced her out of the cab and into his house after a night of drinking, and then raped her. Smith was acquitted of rape in a high-profile trial back in 1991.

Testimony resumes next hour in Scott Peterson's double murder trial. A prosecution investigator is due back on the witness stand. Under cross-examination yesterday, Steven Jacobson said police once suspected co-conspirators may have been involved in Laci Peterson's disappearance. Jacobson also testified police at one time suspected that Amber Frey was not cooperating with them.

Investigators hope a $10,000 reward will help find the killer of two camp counselors found shot to death near -- on the beach near Jenner, California. A Wisconsin man interviewed in the case has been cleared after passing a polygraph test.

A show of force on the streets of New York City just days before the start of the Republican National Convention. Security is tight. The tension is high. That's coming up.

And you can usually find Olympian Jenny Finch on the softball field. But millions of Americans are looking for her someplace else. We will tell you where. This week's "Web Talk" is coming up.

(COMMERCIAL BREAK)

KAGAN: Let's go live to Las Cruces, New Mexico, and listen to President Bush.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Most people get their health insurance through small businesses. And yet, small businesses are having trouble providing health coverage. To help more Americans get health insurance, we must allow small employers to join together to purchase insurance at the discounts that big companies get in America.

(APPLAUSE)

BUSH: We'll use technology to reduce costs and prevent mistakes. We'll expand research to seek new cures for deadly diseases. And to make sure you've got affordable and available health care here in Mew Mexico, we need medical liability reform.

(APPLAUSE)

BUSH: These frivolous lawsuits are running up the cost of health care and they're running good docs out of business. See, I don't think you can be -- I don't think you can be pro-patient, pro-doctor and pro-trial lawyer at the same time.

(APPLAUSE)

BUSH: I think you have to choose. My opponent made his choice, and he put him on the ticket. I made my choice. I am for medical liability reform.

(APPLAUSE)

BUSH: We have more to do to make this economy stronger. Listen, we've been through a lot in this economy. Think about it, we've been through a recession, the stock market decline, we've been through attacks, we've had corporate scandals. But we've overcome these obstacles.

We've overcome them because the American workers are the best in the world. We've overcome it because our farmers and ranchers know what they're doing. We've overcome it...

(APPLAUSE)

BUSH: We've overcome these obstacles because the entrepreneurial spirit is strong and the small business sector of our economy is vibrant. I also think we've overcome it because of well-timed tax cuts.

(APPLAUSE)

BUSH: When you're talking to your friends and neighbors, remember to tell them we've helped American families by raising the child credit. We've helped the marriage families -- America's families by reducing the marriage penalty. By the way, the tax code ought to encourage marriage, not penalize marriage.

(APPLAUSE)

BUSH: We helped those small businesses. And this time the check actually was in the mail.

Because we acted, our economy since last summer has grown at a rate as fast as any in nearly 20 years. Because we acted, we created about 1.5 million new jobs over the past 12 months. Because we acted, the national unemployment rate is 5.5 percent. Because we acted, the unemployment rate in your great state is 5.3 percent. Because we acted, the people in this country are working.

(APPLAUSE)

BUSH: There's more work to be done. In order to make sure American jobs stay here in America, we need less regulations on our employers.

You ask your small business neighbor what it's like to fill out the paperwork. They'll say it's quite onerous. My problem is I can't promise anybody in Washington has ever read the paperwork.

We need tort reform to keep jobs here in America. To make sure people can find good work here at home, we need an energy policy. We need to become less dependent on foreign sources of energy.

(APPLAUSE)

BUSH: In order to keep jobs here at home, we've got to make sure other nations treat us in trade the way we treat them. Our markets are open for other products -- for products from other countries because it's good for consumers. And all we're saying is just make sure you open up your markets. We can compete with anybody, anyplace, anywhere with fair rules.

KAGAN: We've been listening in to President Bush. He's making a campaign appearance in Las Cruces, New Mexico, today.

Interesting state, New Mexico. Forget Florida. New Mexico was the closest race, state race back in 2000. Al Gore winning the state by fewer than 400 votes. This time around, New Mexico worth five electoral votes.

Meanwhile, in Minnesota, John Kerry will be making an appearance there, another battleground state. We will be listening in and seeing what he has to stay just ahead.

Right now we take a quick break.

(COMMERCIAL BREAK)

KAGAN: I'm Daryn Kagan in Atlanta. Let's check the headlines "Now in the News."

Democratic presidential candidate John Kerry is in Anoka, Minnesota, at this hour. He's due at a town hall meeting in about 15 minutes. The senator is expected to discuss health care.

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