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CNN Live At Daybreak
And Then There Were Nine; Congress Gets Back to Work Today
Aired November 16, 2004 - 06:00 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.
CAROL COSTELLO, CNN ANCHOR: And then there were nine. After a week of resignations, only nine people stay on in President Bush's cabinet. This morning, we ask who might be the next to go?
Plus, Iraq, the economy, health care -- as Congress gets back to work today, what do you want them to focus on?
And an American institution, the world's largest company, Wal- Mart. Is the discount chain really good for America?
It is Tuesday, November 16.
This is DAYBREAK.
And good morning to you.
Thank you for waking up with us.
I'm Carol Costello in New York.
There is a lot going on this morning, so let's check the latest headlines for you now.
With Falluja winding down, U.S. troops move on to new ground. Right now, American and Iraqi troops are launching an offensive in Mosul. It's aimed at securing the northern city from insurgents.
It is unanimous -- the U.N. Security Council votes to impose a 13-month arms embargo on the Ivory Coast. This as the battles between government and rebel forces rage on in the troubled African nation.
Chicago's Midway Airport back to normal this morning after a security scare. Apparently somebody walked away with a bag that had been flagged for extra screening, so authorities evacuated the airport and grounded all planes.
NASA will tray gain today. It had to scrub yesterday's final test of the scram jet technology. The unmanned craft is expected to reach mach 10, or that would be 7,000 miles per hour.
To the forecast center in Atlanta and Chad -- good morning.
CHAD MYERS, CNN METEOROLOGIST: Let's hope that goes well for those guys out there.
Good morning, Carol.
(WEATHER REPORT)
COSTELLO: You'll be hearing about it all day. Condoleezza Rice in, Colin Powell out. The changing of the guard on Capitol Hill might take on a whole new dimension now. We're expecting President Bush to nominate Rice as his new secretary of state this afternoon, perhaps. The domino effect will likely play out with Rice's top deputy filling her shoes. Stephen Hadley is expected to be the president's new national security adviser.
President Bush has other holes to fill, as well. Six cabinet members are leaving. Four of them were announced yesterday. And others may be leaving, as well.
Let's bring in CNN Radio correspondent Dick Uliano.
He joins us live from Washington -- good morning, Dick.
DICK ULIANO, CNN RADIO CORRESPONDENT: A very good morning to you, Carol.
COSTELLO: So this really isn't so surprising. In every administration in the second term people leave.
ULIANO: Absolutely. And this is the time for the individuals to change in the cabinet, as the president transitions from his first term to his second. And it's now quite apparent the second term won't look much like the first, with his closest advisers, some going, some staying.
But, you know, in the past we've seen this in the Reagan administration, really, the Clinton administration was not a good model for this sort of thing because so many individuals tended to stay on, like Attorney General Janet Reno and Health and Human Services Secretary Shalala staying on for two terms.
COSTELLO: You know, Dick, there are so many people who say, you know, just focusing on Colin Powell right now, that he was marginalized.
What is the real reason he left? Was he just stressed out and tired? Or was there more to it?
ULIANO: It's probably pretty complicated, Carol, when you think about it. The analysts are quick to say that he didn't get along with Defense Secretary Donald Rumsfeld. But that's, you know, that's kind of simplistic and it'd only be fair to point out that both of these individuals deny that and they say that they did get along, they are friends.
We know that his wife, Alma, has long asked that he get back into a private life. He's given so much of his service to the United States. We know that he likes to tinker with mechanics. He likes to restore old Volvos and get under the hood. He usually has one or two in his garage that he likes to work on. And in his statement yesterday, he says he wants to return to private life.
COSTELLO: Oh, interesting. You know, you were talking about the relationship between Colin Powell and Defense Secretary Rumsfeld.
Here's what Mr. Rumsfeld had to say about Colin Powell leaving.
(BEGIN VIDEO CLIP)
DONALD RUMSFELD, SECRETARY OF DEFENSE: Four years is a long time and these are tough jobs. I have not pressed anyone in the cabinet as to what their future plans were and I have enjoyed working with Colin. Needless to say, we've covered a lot of miles together.
(END VIDEO CLIP)
COSTELLO: So, you know, some people are saying, Dick, that Donald Rumsfeld will leave in a few months, once the Iraqi elections get under way.
Is there any new buzz about that?
ULIANO: No, but it could be. As he points out, four years is a long time. And many cabinet secretaries in modern times don't really stay more than three years. And Donald Rumsfeld, it is said, wants to see through some of the military operations in Iraq, his -- also see through his changes that he envisions for the military, particularly the Army, making it a smaller, more mobile force.
So perhaps he'll stay on a while longer. He has no plans. He says currently, he says he hasn't discussed leaving with the president at this point. So at least that job at the Pentagon, we expect, is going to remain the same.
COSTELLO: Dick Uliano reporting live from Washington this morning.
Thank you.
Both houses of Congress gavel into session today for the last time in their current configuration. In the meantime, the group of incoming freshmen are taking their turn in the spotlight. But they won't get to govern just yet.
CNN congressional correspondent Joe Johns looks at their incoming agenda and the business still at hand in this lame duck session.
(BEGIN VIDEO TAPE)
JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Seven Republican senators are left, six of them current or former House members and one a former Cabinet secretary, all determined to put a conservative stamp on the Congress, representing a significant shift in the political center of gravity.
SEN. ELECT TOM COBURN (R), OKLAHOMA: You know, our biggest problem in this country is people campaign on promises and then don't try to carry them out, let alone carry them out.
JOHNS: Of course, they won't even be sworn in until January, but their mere presence on Capitol Hill says something about the direction of the next Congress. All pledged bipartisanship but said Democrats will have to recognize the new political reality.
SEN. GEORGE ALLEN (R), VIRGINIA: Messages have been sent, lessons have been learned.
JOHNS: At the top of the freshman agenda, health-care and Social Security reform, getting floor votes for conservative judges, cutting taxes and reigning in government spending. However, this group will have to sit on the sidelines while the 108th Congress, in its last breath, wrestles with a mammoth spending bill and a bill to reform the nation's intelligence community.
After weeks of stalled talks, House Republicans Monday reporting progress on the intelligence bill, including the sticky issue of giving a new national intelligence director the power to handle the purse strings.
REP. PETE HOEKSTRA (R), MICHIGAN: I think on budget authority, budget control, we may have an agreement on language.
JOHNS: Democrats are warning that failure to finish the entire bill now means the Congress will have to start all over again next year.
REP. JANE PELOSI (D), CALIFORNIA: The requirement is within the next 24 hours to come to agreement on a consensus product. If we don't get it now and it dies this week, it won't be back in the next Congress.
JOHNS (on camera): The Congress also has to tackle the issue of raising the government's debt ceiling again. Democrats want an up or down vote on that. Republicans don't. Either way, the Treasury Department says something has to be done.
Joe Johns, CNN, Capitol Hill.
(END VIDEO TAPE)
COSTELLO: And just outside the nation's capital, more signs of turmoil at the CIA. Two top leaders of the agency's clandestine service have now resigned. The move comes after angry exchanges with aides to the new CIA director, Porter Goss. The resignations also came just days after John McLaughlin, the man who served briefly as acting director of the spy agency, announced his resignation.
CIA Chief Porter Goss says, "The exits leave no gap in our operations fighting the global war on terror." That's a quote from him.
Here's how the former head of the agency's Osama bin Laden sees it.
(BEGIN VIDEO CLIP)
MICHAEL SCHEUER, FORMER CIA OFFICIAL: I think that there's a little agitation, surely. There's always a lot of apprehension when a new management team takes over and the rumors have been pretty much rife for the last two weeks that heads were going to roll or heads were not going to roll.
So I think there is -- it's safe to say that there is a degree of agitation within the agency.
(END VIDEO CLIP)
COSTELLO: You can hear more from this former top spy. He'll be live on CNN's "AMERICAN MORNING." That will happen in the next hour.
Let's talk about the battle for Falluja. Falluja is secure, or so says U.S. military officials. But that's not the same as saying it's safe. Sporadic gunfire still being heard in parts of that Iraqi city.
Jane Arraf is on the city's south side.
She's embedded with the Army and she's got some information for us this morning.
Hello -- Jane.
JANE ARRAF, CNN CORRESPONDENT: Hello, Carol.
Carol, this is probably the first time since the battle started a week ago that we've gone hours, several hours without the sound of explosions or gunfire. Now, they are definitely going to start up again. But it has been relatively quiet.
Overnight, there were 500 pound J-DAMs dropped on some suspected insurgents and their hiding places here in the south.
We were speaking to one of the Marine commanding generals this morning and he tells us that, as you pointed out, Carol, although it is relatively secure here at the moment, it's not yet safe for civilians. And it will be a while before they encourage them to come back.
We were speaking with a Marine civil affairs officer who is going around doing assessments of the city. He says he believes they could have the water back in four days, but electricity is going to take a couple of weeks.
And then there's that bigger question of safety. There are still insurgents out here. There are still land mines, explosives and other extremely dangerous things littered throughout many of these neighborhoods -- Carol.
COSTELLO: I've got a question for you. I know that most civilians have left Falluja. But are there signs they're coming back now, now that the fighting had dissipated, at least a little bit?
ARRAF: There are no signs they're coming back. In fact, they're being discouraged from coming back. And there are far fewer than we had originally thought. Marine officials estimate that perhaps 95 percent of the population has left, leaving very few people left here.
They've set up three distribution points for food and they say that they are trying to get to the entire population here in Falluja.
They've also, today, they tell us, agreed on a way that aide organizations who have complained that they are not able to deliver aide to Falluja, complained that those organizations can bring supplies into the city. It involves using alternate routes other than the main supply routes. But they say that they are coming to an agreement on that -- Carol.
COSTELLO: Jane Arraf reporting live from south of Falluja, or in the southern part of that city, I should say.
Jane Arraf embedded with the Army there.
The military is now investigating the killing of a wounded unarmed insurgent by an American Marine. The Marines had entered a mosque in Falluja that another group of Marines had stormed the day before and found wounded insurgents inside. A videotape by a pool reporter traveling with the troops shows what happened next.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There Marines in here?
UNIDENTIFIED MALE: Yes, they're on the far, far right, the far right.
UNIDENTIFIED MALE: Coming around the back.
Hey, who's in here?
Coming around.
UNIDENTIFIED MALE: What the (OBSCENE WORD OMITTED) you doing in here?
(OBSCENE WORD OMITTED) you almost got shot by tanks.
UNIDENTIFIED MALE: Huh, us?
UNIDENTIFIED MALE: Yes. Yes.
UNIDENTIFIED MALE: You guys almost got shot up by tanks.
UNIDENTIFIED MALE: They told us all to come in here.
UNIDENTIFIED MALE: The tanks did?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: They're telling us people are in here and told us to come in here. UNIDENTIFIED MALE: Yes, we had two in there.
UNIDENTIFIED MALE: Did you shoot them?
UNIDENTIFIED MALE: Yes, man.
UNIDENTIFIED MALE: They have any weapons on them?
Same guys from yesterday?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: All right.
UNIDENTIFIED MALE: These are the ones from yesterday.
UNIDENTIFIED MALE: These are the wounded that they never picked up.
UNIDENTIFIED MALE: He's (OBSCENE WORD OMITTED) faking he's dead.
UNIDENTIFIED MALE: Yes, he's breathing.
UNIDENTIFIED MALE: He's faking (OBSCENE WORD OMITTED) dead. Dead now.
(END VIDEO TAPE)
COSTELLO: And what you did not see in its entirety is that the wounded, unarmed man was shot in the head at close range. A Marine commander is now vowing to get to the bottom of this.
(BEGIN VIDEO CLIP)
LT. GEN. JOHN F. SATTLER, 1ST MARINE EXPEDITIONARY FORCE: The Marine has been withdrawn from the battlefield pending the results of the investigation. Based upon the investigation, the convenient authority will determine the appropriate course of action. Let me make it perfectly clear. We follow the law of armed conflict and we hold ourselves to a high standard of accountability. The facts of this case will be thoroughly pursued to make an informed decision and to protect t rights of all persons involved.
(END VIDEO CLIP)
COSTELLO: We just got that in this morning and I believe that was the commander of that particular Marine wounded. We'll be hearing a lot more about this in the hours to come. The Marines also investigating why the wounded Iraqis were left behind for a full 24 hours.
It is 13 minutes past the hour.
There's plenty more ahead here on DAYBREAK.
Wal-Mart is staking its claim as one of the most powerful companies in the world. We'll get a preview of a new documentary on the controversial retailer.
And the president's cabinet is being remodeled in a big way. Our Tuesday talkers will try to sort it all out.
But first, here's a look at what else is making news this Tuesday morning.
(COMMERCIAL BREAK)
(STOCK MARKET REPORT)
COSTELLO: Your news, money, weather and sports now.
It's 6:17 Eastern.
Here's what's all new this morning.
Colin Powell out, Condoleezza Rice in, almost. Two senior administration sources say the national security adviser is President Bush's choice to become the next secretary of state. An announcement could come as early as today.
There is a new government warning this morning for women who take the abortion pill RU-486. The FDA says it has reports of serious bacterial infection, bleeding and death.
In money news, a big battle is brewing. American Express is suing Visa and MasterCard. American Express says the two competitors worked together to encourage banks not to offer the American Express charge cards.
In culture, school kids on the go -- a new study indicates 80 percent of students in grades seven through 12 are taking part in some type of organized activity after school.
And in sports, Barry Bonds is in seventh heaven. The San Francisco Giants left fielder is once again the National League's MVP. He's now won the title, count 'em, seven times. This latest is his fourth in a row.
We are not worthy -- Chad.
MYERS: Good, good playing out there.
Hey, you know what? The Mets let Al Leiter go as a free agent yesterday. They didn't pick up his contract. They didn't pick up his option. $10 million. They decided to pay him out $2 million and get rid of him so.
COSTELLO: Wow!
MYERS: Al Leiter available. I'll be his agent. I'll take any percent.
(WEATHER REPORT)
COSTELLO: Those are the latest headlines for you this morning.
Every week 100 million Americans shop at Wal-Mart. One hundred million. Coming up next, we'll look at who's helped and who's hurt by our super sized addiction to the Wal-Mart superstore.
You are watching DAYBREAK.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Your company was the first company on the planet to report one quarter of a trillion dollars in sales -- $256 billion. Do you know what that is? That's one IBM, one Hewlett- Packard, one Dell Computer, one Microsoft and one Cisco Systems. And, oh, by the way, after that, we've got $2 billion left over.
(END VIDEO CLIP)
COSTELLO: Oh, it would be Wal-Mart. Huge profits and a humongous customer base -- 100 million shoppers every single week. But is Wal-Mart good for America? That is the title of a "Frontline" documentary tonight.
Live from Washington, PBS' Hendrick Smith.
Good morning.
HENDRICK SMITH, PRODUCER: Good morning, Carol.
How are you?
COSTELLO: I'm fine.
You know, it's hard to believe that Sam Walton started out so small.
SMITH: It, you know, when you go to Bentonville, Arkansas, it's utterly amazing. And when you see this small town down in the barbecue and bible belt of northwest Arkansas, a little place, and then suddenly you realize it's the global headquarters of this enormous company, the biggest in the world, 1.2 million employees, delivering bargain prices to 100 million shoppers every week, stretching out all across the globe -- China, Japan, Africa, Europe, all over the place. And having an enormous impact on the global economy.
COSTELLO: Yes, let's talk about that. Let's talk about Wal- Mart's business model. It's buy cheap and in bulk and sell low. You examined how many goods are actually bought in China to sell here. Tell us about that.
SMITH: Well, what's amazing is, you know, what Wal-Mart delivers to people. It's amazing how efficient it is. But it's also amazing how much power it has and what a huge role it plays in driving U.S. jobs overseas, particularly to China. Last year, Wal-Mart alone imported at least $15 billion in goods from China, and maybe twice that much, and they say the number is going to grow. Now those are imports of a lot of consumer goods, whether you're talking vacuum cleaners or microwaves or lawn mowers or textiles or furniture, whatever you're talking about, electronics, television sets. Those are goods that are made in China and many of them used to be made in America.
And we talked to some of the people that used to make them and they say they got a lot of pressure from Wal-Mart to move their production, particularly for the low cost goods, to China.
COSTELLO: Unbelievable. You know, I read the whole script from the "Frontline" documentary. It's absolutely fascinating. And in China, so many workers flock to work at these companies, it's like started a whole economy of its own, thanks to Wal-Mart over in China.
SMITH: You have to see China to believe it. I've been there several times over the last 20 years. Every time I go, it blows my mind. And, of course, we're going to take viewers there tonight on this program. Miracle City of Shenjin was literally a fishing village and rice paddies 20 years ago. Today, seven million people, modern, sophisticated, young people, you know, electronics stores on the corners, French perfumes and, you know, just a modern city with high rises and office buildings all over the place.
You can't believe it. They have a port there that didn't exist 10 years ago. It's on the verge of becoming the third biggest port in the world and its main customer is America and its biggest single customer, corporate customer, is Wal-Mart.
COSTELLO: So...
SMITH: So the connection between Wal-Mart and China is very close and very large.
COSTELLO: So is there any stopping Wal-Mart?
SMITH: I don't know whether there's any stopping Wal-Mart. You've got to ask Target and Costco and the others. I think the real question is what's the impact in a place like Circleville, Ohio or Worcester, Ohio or down in the Carolinas, where you see the textile plants or the television plants shutting down and you see a Wal-Mart super center coming in next door and the workers who used to be making $15, $16 an hour at some American factory are now looking at a Wal- Mart job at $7, $8, $9 an hour at much lower benefits.
Is this a model? I mean our question is, is Wal-Mart good for America? Is this a model that we want? The consumers are getting a good deal, but the workers are getting it tough. If we go on this way a long time, where are we going to be?
COSTELLO: Hendrick Smith from PBS' "Frontline."
The documentary airs tonight.
Thanks for joining DAYBREAK this morning.
SMITH: Nice to be with you, Carol.
COSTELLO: Thank you.
As U.S. voters start to look toward 2008, you will be surprised to hear some of the names that top the early polls.
Stay with us.
(COMMERCIAL BREAK)
COSTELLO: And good morning to you.
I'm Carol Costello.
Welcome to the last half hour of DAYBREAK.
There's a lot going on this morning, so here are the latest headlines for you now.
U.S. and Iraqi forces have launched an offensive against insurgents in the northern city of Mosul, trying to put down an uprising that started last week when insurgents took over several police stations.
Crude oil futures fell today. Can gasoline prices be far behind? U.S. light crude futures dropped as much as 4 percent overnight, to $45.20 a barrel.
Senator Harry Reid of Nevada has been tapped by Democrats to take over as minority leader. Reid replaces South Dakota's outgoing Senator Tom Daschle, who was defeated in his bid for reelection.
Senator Arlen Specter will argue today that he should be the next chairman of the Judiciary Committee.
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Aired November 16, 2004 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: And then there were nine. After a week of resignations, only nine people stay on in President Bush's cabinet. This morning, we ask who might be the next to go?
Plus, Iraq, the economy, health care -- as Congress gets back to work today, what do you want them to focus on?
And an American institution, the world's largest company, Wal- Mart. Is the discount chain really good for America?
It is Tuesday, November 16.
This is DAYBREAK.
And good morning to you.
Thank you for waking up with us.
I'm Carol Costello in New York.
There is a lot going on this morning, so let's check the latest headlines for you now.
With Falluja winding down, U.S. troops move on to new ground. Right now, American and Iraqi troops are launching an offensive in Mosul. It's aimed at securing the northern city from insurgents.
It is unanimous -- the U.N. Security Council votes to impose a 13-month arms embargo on the Ivory Coast. This as the battles between government and rebel forces rage on in the troubled African nation.
Chicago's Midway Airport back to normal this morning after a security scare. Apparently somebody walked away with a bag that had been flagged for extra screening, so authorities evacuated the airport and grounded all planes.
NASA will tray gain today. It had to scrub yesterday's final test of the scram jet technology. The unmanned craft is expected to reach mach 10, or that would be 7,000 miles per hour.
To the forecast center in Atlanta and Chad -- good morning.
CHAD MYERS, CNN METEOROLOGIST: Let's hope that goes well for those guys out there.
Good morning, Carol.
(WEATHER REPORT)
COSTELLO: You'll be hearing about it all day. Condoleezza Rice in, Colin Powell out. The changing of the guard on Capitol Hill might take on a whole new dimension now. We're expecting President Bush to nominate Rice as his new secretary of state this afternoon, perhaps. The domino effect will likely play out with Rice's top deputy filling her shoes. Stephen Hadley is expected to be the president's new national security adviser.
President Bush has other holes to fill, as well. Six cabinet members are leaving. Four of them were announced yesterday. And others may be leaving, as well.
Let's bring in CNN Radio correspondent Dick Uliano.
He joins us live from Washington -- good morning, Dick.
DICK ULIANO, CNN RADIO CORRESPONDENT: A very good morning to you, Carol.
COSTELLO: So this really isn't so surprising. In every administration in the second term people leave.
ULIANO: Absolutely. And this is the time for the individuals to change in the cabinet, as the president transitions from his first term to his second. And it's now quite apparent the second term won't look much like the first, with his closest advisers, some going, some staying.
But, you know, in the past we've seen this in the Reagan administration, really, the Clinton administration was not a good model for this sort of thing because so many individuals tended to stay on, like Attorney General Janet Reno and Health and Human Services Secretary Shalala staying on for two terms.
COSTELLO: You know, Dick, there are so many people who say, you know, just focusing on Colin Powell right now, that he was marginalized.
What is the real reason he left? Was he just stressed out and tired? Or was there more to it?
ULIANO: It's probably pretty complicated, Carol, when you think about it. The analysts are quick to say that he didn't get along with Defense Secretary Donald Rumsfeld. But that's, you know, that's kind of simplistic and it'd only be fair to point out that both of these individuals deny that and they say that they did get along, they are friends.
We know that his wife, Alma, has long asked that he get back into a private life. He's given so much of his service to the United States. We know that he likes to tinker with mechanics. He likes to restore old Volvos and get under the hood. He usually has one or two in his garage that he likes to work on. And in his statement yesterday, he says he wants to return to private life.
COSTELLO: Oh, interesting. You know, you were talking about the relationship between Colin Powell and Defense Secretary Rumsfeld.
Here's what Mr. Rumsfeld had to say about Colin Powell leaving.
(BEGIN VIDEO CLIP)
DONALD RUMSFELD, SECRETARY OF DEFENSE: Four years is a long time and these are tough jobs. I have not pressed anyone in the cabinet as to what their future plans were and I have enjoyed working with Colin. Needless to say, we've covered a lot of miles together.
(END VIDEO CLIP)
COSTELLO: So, you know, some people are saying, Dick, that Donald Rumsfeld will leave in a few months, once the Iraqi elections get under way.
Is there any new buzz about that?
ULIANO: No, but it could be. As he points out, four years is a long time. And many cabinet secretaries in modern times don't really stay more than three years. And Donald Rumsfeld, it is said, wants to see through some of the military operations in Iraq, his -- also see through his changes that he envisions for the military, particularly the Army, making it a smaller, more mobile force.
So perhaps he'll stay on a while longer. He has no plans. He says currently, he says he hasn't discussed leaving with the president at this point. So at least that job at the Pentagon, we expect, is going to remain the same.
COSTELLO: Dick Uliano reporting live from Washington this morning.
Thank you.
Both houses of Congress gavel into session today for the last time in their current configuration. In the meantime, the group of incoming freshmen are taking their turn in the spotlight. But they won't get to govern just yet.
CNN congressional correspondent Joe Johns looks at their incoming agenda and the business still at hand in this lame duck session.
(BEGIN VIDEO TAPE)
JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Seven Republican senators are left, six of them current or former House members and one a former Cabinet secretary, all determined to put a conservative stamp on the Congress, representing a significant shift in the political center of gravity.
SEN. ELECT TOM COBURN (R), OKLAHOMA: You know, our biggest problem in this country is people campaign on promises and then don't try to carry them out, let alone carry them out.
JOHNS: Of course, they won't even be sworn in until January, but their mere presence on Capitol Hill says something about the direction of the next Congress. All pledged bipartisanship but said Democrats will have to recognize the new political reality.
SEN. GEORGE ALLEN (R), VIRGINIA: Messages have been sent, lessons have been learned.
JOHNS: At the top of the freshman agenda, health-care and Social Security reform, getting floor votes for conservative judges, cutting taxes and reigning in government spending. However, this group will have to sit on the sidelines while the 108th Congress, in its last breath, wrestles with a mammoth spending bill and a bill to reform the nation's intelligence community.
After weeks of stalled talks, House Republicans Monday reporting progress on the intelligence bill, including the sticky issue of giving a new national intelligence director the power to handle the purse strings.
REP. PETE HOEKSTRA (R), MICHIGAN: I think on budget authority, budget control, we may have an agreement on language.
JOHNS: Democrats are warning that failure to finish the entire bill now means the Congress will have to start all over again next year.
REP. JANE PELOSI (D), CALIFORNIA: The requirement is within the next 24 hours to come to agreement on a consensus product. If we don't get it now and it dies this week, it won't be back in the next Congress.
JOHNS (on camera): The Congress also has to tackle the issue of raising the government's debt ceiling again. Democrats want an up or down vote on that. Republicans don't. Either way, the Treasury Department says something has to be done.
Joe Johns, CNN, Capitol Hill.
(END VIDEO TAPE)
COSTELLO: And just outside the nation's capital, more signs of turmoil at the CIA. Two top leaders of the agency's clandestine service have now resigned. The move comes after angry exchanges with aides to the new CIA director, Porter Goss. The resignations also came just days after John McLaughlin, the man who served briefly as acting director of the spy agency, announced his resignation.
CIA Chief Porter Goss says, "The exits leave no gap in our operations fighting the global war on terror." That's a quote from him.
Here's how the former head of the agency's Osama bin Laden sees it.
(BEGIN VIDEO CLIP)
MICHAEL SCHEUER, FORMER CIA OFFICIAL: I think that there's a little agitation, surely. There's always a lot of apprehension when a new management team takes over and the rumors have been pretty much rife for the last two weeks that heads were going to roll or heads were not going to roll.
So I think there is -- it's safe to say that there is a degree of agitation within the agency.
(END VIDEO CLIP)
COSTELLO: You can hear more from this former top spy. He'll be live on CNN's "AMERICAN MORNING." That will happen in the next hour.
Let's talk about the battle for Falluja. Falluja is secure, or so says U.S. military officials. But that's not the same as saying it's safe. Sporadic gunfire still being heard in parts of that Iraqi city.
Jane Arraf is on the city's south side.
She's embedded with the Army and she's got some information for us this morning.
Hello -- Jane.
JANE ARRAF, CNN CORRESPONDENT: Hello, Carol.
Carol, this is probably the first time since the battle started a week ago that we've gone hours, several hours without the sound of explosions or gunfire. Now, they are definitely going to start up again. But it has been relatively quiet.
Overnight, there were 500 pound J-DAMs dropped on some suspected insurgents and their hiding places here in the south.
We were speaking to one of the Marine commanding generals this morning and he tells us that, as you pointed out, Carol, although it is relatively secure here at the moment, it's not yet safe for civilians. And it will be a while before they encourage them to come back.
We were speaking with a Marine civil affairs officer who is going around doing assessments of the city. He says he believes they could have the water back in four days, but electricity is going to take a couple of weeks.
And then there's that bigger question of safety. There are still insurgents out here. There are still land mines, explosives and other extremely dangerous things littered throughout many of these neighborhoods -- Carol.
COSTELLO: I've got a question for you. I know that most civilians have left Falluja. But are there signs they're coming back now, now that the fighting had dissipated, at least a little bit?
ARRAF: There are no signs they're coming back. In fact, they're being discouraged from coming back. And there are far fewer than we had originally thought. Marine officials estimate that perhaps 95 percent of the population has left, leaving very few people left here.
They've set up three distribution points for food and they say that they are trying to get to the entire population here in Falluja.
They've also, today, they tell us, agreed on a way that aide organizations who have complained that they are not able to deliver aide to Falluja, complained that those organizations can bring supplies into the city. It involves using alternate routes other than the main supply routes. But they say that they are coming to an agreement on that -- Carol.
COSTELLO: Jane Arraf reporting live from south of Falluja, or in the southern part of that city, I should say.
Jane Arraf embedded with the Army there.
The military is now investigating the killing of a wounded unarmed insurgent by an American Marine. The Marines had entered a mosque in Falluja that another group of Marines had stormed the day before and found wounded insurgents inside. A videotape by a pool reporter traveling with the troops shows what happened next.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There Marines in here?
UNIDENTIFIED MALE: Yes, they're on the far, far right, the far right.
UNIDENTIFIED MALE: Coming around the back.
Hey, who's in here?
Coming around.
UNIDENTIFIED MALE: What the (OBSCENE WORD OMITTED) you doing in here?
(OBSCENE WORD OMITTED) you almost got shot by tanks.
UNIDENTIFIED MALE: Huh, us?
UNIDENTIFIED MALE: Yes. Yes.
UNIDENTIFIED MALE: You guys almost got shot up by tanks.
UNIDENTIFIED MALE: They told us all to come in here.
UNIDENTIFIED MALE: The tanks did?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: They're telling us people are in here and told us to come in here. UNIDENTIFIED MALE: Yes, we had two in there.
UNIDENTIFIED MALE: Did you shoot them?
UNIDENTIFIED MALE: Yes, man.
UNIDENTIFIED MALE: They have any weapons on them?
Same guys from yesterday?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: All right.
UNIDENTIFIED MALE: These are the ones from yesterday.
UNIDENTIFIED MALE: These are the wounded that they never picked up.
UNIDENTIFIED MALE: He's (OBSCENE WORD OMITTED) faking he's dead.
UNIDENTIFIED MALE: Yes, he's breathing.
UNIDENTIFIED MALE: He's faking (OBSCENE WORD OMITTED) dead. Dead now.
(END VIDEO TAPE)
COSTELLO: And what you did not see in its entirety is that the wounded, unarmed man was shot in the head at close range. A Marine commander is now vowing to get to the bottom of this.
(BEGIN VIDEO CLIP)
LT. GEN. JOHN F. SATTLER, 1ST MARINE EXPEDITIONARY FORCE: The Marine has been withdrawn from the battlefield pending the results of the investigation. Based upon the investigation, the convenient authority will determine the appropriate course of action. Let me make it perfectly clear. We follow the law of armed conflict and we hold ourselves to a high standard of accountability. The facts of this case will be thoroughly pursued to make an informed decision and to protect t rights of all persons involved.
(END VIDEO CLIP)
COSTELLO: We just got that in this morning and I believe that was the commander of that particular Marine wounded. We'll be hearing a lot more about this in the hours to come. The Marines also investigating why the wounded Iraqis were left behind for a full 24 hours.
It is 13 minutes past the hour.
There's plenty more ahead here on DAYBREAK.
Wal-Mart is staking its claim as one of the most powerful companies in the world. We'll get a preview of a new documentary on the controversial retailer.
And the president's cabinet is being remodeled in a big way. Our Tuesday talkers will try to sort it all out.
But first, here's a look at what else is making news this Tuesday morning.
(COMMERCIAL BREAK)
(STOCK MARKET REPORT)
COSTELLO: Your news, money, weather and sports now.
It's 6:17 Eastern.
Here's what's all new this morning.
Colin Powell out, Condoleezza Rice in, almost. Two senior administration sources say the national security adviser is President Bush's choice to become the next secretary of state. An announcement could come as early as today.
There is a new government warning this morning for women who take the abortion pill RU-486. The FDA says it has reports of serious bacterial infection, bleeding and death.
In money news, a big battle is brewing. American Express is suing Visa and MasterCard. American Express says the two competitors worked together to encourage banks not to offer the American Express charge cards.
In culture, school kids on the go -- a new study indicates 80 percent of students in grades seven through 12 are taking part in some type of organized activity after school.
And in sports, Barry Bonds is in seventh heaven. The San Francisco Giants left fielder is once again the National League's MVP. He's now won the title, count 'em, seven times. This latest is his fourth in a row.
We are not worthy -- Chad.
MYERS: Good, good playing out there.
Hey, you know what? The Mets let Al Leiter go as a free agent yesterday. They didn't pick up his contract. They didn't pick up his option. $10 million. They decided to pay him out $2 million and get rid of him so.
COSTELLO: Wow!
MYERS: Al Leiter available. I'll be his agent. I'll take any percent.
(WEATHER REPORT)
COSTELLO: Those are the latest headlines for you this morning.
Every week 100 million Americans shop at Wal-Mart. One hundred million. Coming up next, we'll look at who's helped and who's hurt by our super sized addiction to the Wal-Mart superstore.
You are watching DAYBREAK.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Your company was the first company on the planet to report one quarter of a trillion dollars in sales -- $256 billion. Do you know what that is? That's one IBM, one Hewlett- Packard, one Dell Computer, one Microsoft and one Cisco Systems. And, oh, by the way, after that, we've got $2 billion left over.
(END VIDEO CLIP)
COSTELLO: Oh, it would be Wal-Mart. Huge profits and a humongous customer base -- 100 million shoppers every single week. But is Wal-Mart good for America? That is the title of a "Frontline" documentary tonight.
Live from Washington, PBS' Hendrick Smith.
Good morning.
HENDRICK SMITH, PRODUCER: Good morning, Carol.
How are you?
COSTELLO: I'm fine.
You know, it's hard to believe that Sam Walton started out so small.
SMITH: It, you know, when you go to Bentonville, Arkansas, it's utterly amazing. And when you see this small town down in the barbecue and bible belt of northwest Arkansas, a little place, and then suddenly you realize it's the global headquarters of this enormous company, the biggest in the world, 1.2 million employees, delivering bargain prices to 100 million shoppers every week, stretching out all across the globe -- China, Japan, Africa, Europe, all over the place. And having an enormous impact on the global economy.
COSTELLO: Yes, let's talk about that. Let's talk about Wal- Mart's business model. It's buy cheap and in bulk and sell low. You examined how many goods are actually bought in China to sell here. Tell us about that.
SMITH: Well, what's amazing is, you know, what Wal-Mart delivers to people. It's amazing how efficient it is. But it's also amazing how much power it has and what a huge role it plays in driving U.S. jobs overseas, particularly to China. Last year, Wal-Mart alone imported at least $15 billion in goods from China, and maybe twice that much, and they say the number is going to grow. Now those are imports of a lot of consumer goods, whether you're talking vacuum cleaners or microwaves or lawn mowers or textiles or furniture, whatever you're talking about, electronics, television sets. Those are goods that are made in China and many of them used to be made in America.
And we talked to some of the people that used to make them and they say they got a lot of pressure from Wal-Mart to move their production, particularly for the low cost goods, to China.
COSTELLO: Unbelievable. You know, I read the whole script from the "Frontline" documentary. It's absolutely fascinating. And in China, so many workers flock to work at these companies, it's like started a whole economy of its own, thanks to Wal-Mart over in China.
SMITH: You have to see China to believe it. I've been there several times over the last 20 years. Every time I go, it blows my mind. And, of course, we're going to take viewers there tonight on this program. Miracle City of Shenjin was literally a fishing village and rice paddies 20 years ago. Today, seven million people, modern, sophisticated, young people, you know, electronics stores on the corners, French perfumes and, you know, just a modern city with high rises and office buildings all over the place.
You can't believe it. They have a port there that didn't exist 10 years ago. It's on the verge of becoming the third biggest port in the world and its main customer is America and its biggest single customer, corporate customer, is Wal-Mart.
COSTELLO: So...
SMITH: So the connection between Wal-Mart and China is very close and very large.
COSTELLO: So is there any stopping Wal-Mart?
SMITH: I don't know whether there's any stopping Wal-Mart. You've got to ask Target and Costco and the others. I think the real question is what's the impact in a place like Circleville, Ohio or Worcester, Ohio or down in the Carolinas, where you see the textile plants or the television plants shutting down and you see a Wal-Mart super center coming in next door and the workers who used to be making $15, $16 an hour at some American factory are now looking at a Wal- Mart job at $7, $8, $9 an hour at much lower benefits.
Is this a model? I mean our question is, is Wal-Mart good for America? Is this a model that we want? The consumers are getting a good deal, but the workers are getting it tough. If we go on this way a long time, where are we going to be?
COSTELLO: Hendrick Smith from PBS' "Frontline."
The documentary airs tonight.
Thanks for joining DAYBREAK this morning.
SMITH: Nice to be with you, Carol.
COSTELLO: Thank you.
As U.S. voters start to look toward 2008, you will be surprised to hear some of the names that top the early polls.
Stay with us.
(COMMERCIAL BREAK)
COSTELLO: And good morning to you.
I'm Carol Costello.
Welcome to the last half hour of DAYBREAK.
There's a lot going on this morning, so here are the latest headlines for you now.
U.S. and Iraqi forces have launched an offensive against insurgents in the northern city of Mosul, trying to put down an uprising that started last week when insurgents took over several police stations.
Crude oil futures fell today. Can gasoline prices be far behind? U.S. light crude futures dropped as much as 4 percent overnight, to $45.20 a barrel.
Senator Harry Reid of Nevada has been tapped by Democrats to take over as minority leader. Reid replaces South Dakota's outgoing Senator Tom Daschle, who was defeated in his bid for reelection.
Senator Arlen Specter will argue today that he should be the next chairman of the Judiciary Committee.
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