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NEWS FROM CNN

Palestinians Preparing to Go to Polls Sunday to Elect New Leader; Interview With Treasury Secretary John Snow

Aired January 7, 2005 - 12:32   ET

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


WOLF BLITZER, CNN ANCHOR: Welcome back to NEWS FROM CNN. Palestinians preparing to go to the polls this Sunday to elect a new leader. Israel says its troops won't go into Palestinian areas except in the event of what it calls ticking bombs. CNN's Guy Raz is joining us now live from Jerusalem with a preview of the upcoming elections -- Guy.
GUY RAZ, CNN CORRESPONDENT: Wolf, Sunday's presidential race is perhaps the most important election in modern Palestinian history, and certainly the most closely watched election in modern history. For the first time in 40 years, the leadership role of the Palestinian people is wide open, a role, of course, previously filled by the late Yasser Arafat.

Now earlier today, Mahmoud Abbas, also known as Abu Mazen, the man widely expected to win Sunday's race, paid a visit to Yasser Arafat's tomb in Ramallah. Mr. Abbas promising to remain faithful to Yasser Arafat's legacy, which is certainly casting a long shadow over this election campaign. Mahmoud Abbas saying he will remain faithful to Yasser Arafat's so-called red line. That is the establishment of an independent Palestinian state in all of the West Bank, Gaza, with East Jerusalem as its capital, and also a fair and just solution for the hundreds and thousands of Palestinian refuges who either fled their homes or were forced to flee during the 1948 independence war, that brought about the establishment of Israel.

Meanwhile, Wolf, Mustafa Barghouti, the man widely expected to come in second place in Sunday's race, was briefly detained by Jerusalem police in East Jerusalem earlier today. Mr. Barghouti was campaigning in East Jerusalem without a permit. That's a violation of Israel's conditions placed on Palestinian presidential candidates.

But it also highlights some of the difficulties that Palestinian voters in East Jerusalem will face on Sunday. There are some 120,000 Palestinians in East Jerusalem who are eligible to vote in this election, but Israel has permitted election officials to set up just six polling centers, and so they fear that only a small fraction of these voters will manage to vote on Sunday -- Wolf.

BLITZER: Guy, this candidate Mustafa Barghouti, is he any relationship to Marwan Barghouti, who's serving a life sentence for terrorism, convicted of terrorism by the Israelis, and who had once been considered a possible challenger to Abu Mazen and Mahmoud Abbas, even from prison?

RAZ: That's right, Wolf. Well, Mustafa Barghouti is a very distant relative of Marwan Barghouti, the man you mentioned who is now serving five life terms in an Israeli prison, convicted of being involved in murder by an Israeli court. Mustafa Barghouti is a fairly different kind of figure. He's generally been involved in nongovernmental organizations and in public institutions. Often he's been an analyst here on CNN. A very different kind of candidate as well to Mahmoud Abbas, Abu Mazen. Mustafa Barghouti, essentially, opposes the Oslo Accords that Israel signed with the Palestinian Liberation Organization in 1993. He's been arrested or detained by Israeli security forces more than five times now on the campaign trail. We've spent time with him on the campaign trail.

But it's not expected that he'll win more than 15, perhaps 20 percent of the popular vote on Sunday -- Wolf.

BLITZER: Guy Raz in Jerusalem for us, and thanks very much, and please stay with CNN for complete coverage Sunday of the Palestinian elections.

Please join us on CNN's "LATE EDITION." Among my guest this Sunday will be the Palestinian cabinet minister Nabil Shath (ph) and the Israeli vice president minister Ehud Olmert. That's Sunday, noon Eastern on LATE EDITION, 9:00 a.m. Pacific. And this additional note, on Monday, right here on CNN, the former U.S. president Jimmy Carter will join us live from Jerusalem. He's there to monitor the Palestinian elections, together with a whole team of Americans and others from around the world. That airs here, Monday right here on the NEWS FROM CNN.

Keeping the U.S. economy moving. The president has a plan for America, but will his tax reform plan be part of the answer? The U.S. Treasury Secretary John Snow, standing by to join us live next. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: This note, conservative radio talk show host Armstrong Williams, a frequent guest here on CNN, including on this program, has been a big booster of President Bush's Leave No Child Behind education program. The trouble is, the Bush administration apparently paid him nearly a quarter of a million dollars to promote it, and he did not tell his audience about the deal.

Earlier today, Armstrong Williams defending himself on CNN's AMERICAN MORNING.

(BEGIN VIDEO CLIP)

ARMSTRONG WILLIAMS, POL. COMMENTATOR: It was an issue that I did not want to tell them. If the issue came up on the air, I made it very clear that we had a professional relationship, where No Child Left Behind was used in our media as advertising. It was advertising; it's not as if we were paid. People look at the article and say we were paid $240,000. It was an advertising. They used our media. We taped a one-minute commercial with Secretary Paige, where we produced -- we did it for about 20 minutes. We produced a one-minute commercial. He had two one-minute commercial spots in our shows. (END VIDEO CLIP)

BLITZER: Armstrong Williams always describes himself as an advocate for the Bush education plan. Tax reform, simplifying the federal tax code, is one of the president's second-term priorities.

Our White House correspondent Suzanne Malveaux is joining us now live from the White House with word of an announcement earlier today by the president -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Yes, Wolf, as a matter of fact, President Bush announced the panel, those people who would be helping him overhaul the federal tax code earlier today. It's really a nine-member panel, it's bipartisan, modeled after the Social Security commission that was created four years ago. It's meant to report to the treasury secretary about various recommendations to overhaul. The chair being former senator Connie Mack and co-chair John Breaux, a Democrat from Louisiana. The president has made this a top priority for his second term.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I believe this is an essential task for our country, it's a task that will treat our taxpayers more fairly. A simple code will make it easier on the taxpayers. But it's an important task in order to make sure the economic growth we are seeing in the United States continues forward.

(END VIDEO CLIP)

MALVEAUX: And Wolf, of course, another priority of the president is to curb what he calls junk lawsuits. Right now he is in Clinton, Michigan. That is where he's holding a forum talking to people about the need specifically about curbing or limiting those lawsuits related to asbestos. He says this is costing the country, the economy, billions of dollars, that it is clogging the legal system, that somehow it has to be basically controlled.

He doesn't feel like it's good for the economy. It was just earlier in the week he was talking about medical liability reform, as well. These are major domestic priorities that the president is focusing on. And again, he's using a formula that the White House believes has been successful, that kind of town hall conversation formula, to get the word out -- Wolf.

BLITZER: Suzanne Malveaux at the White House. Thanks, Suzanne, very much.

And joining us now for a little bit more explanation of what the president has in mind with the creation of this bipartisan tax reform panel is the U.S. treasury secretary, John Snow. Mr. Secretary, thanks very much for joining us. Welcome back to CNN.

What kind of time frame, first of all, are we talking about? When specifically do you expect to get final recommendations from the panel and when will the president, after that, submit legislation to Congress to revise -- to simplify the tax code?

JOHN SNOW, TREASURY SECRETARY: Wolf, we've asked the panel to report by the end of July, which is a pretty fast timetable. And the panel will give their recommendations to me as treasury secretary. We will then issue recommendations for the president. The president will look at the recommendations and decide where to go. So this is on a pretty fast timetable. I would fully expect we'd have legislative proposals by the end of the year, certainly by the fall.

BLITZER: So but later in 2005 there could be real legislation. There's no guarantee that you'll accept what the panel recommends, these are simply recommendations. Is that right?

SNOW: Yes, that's right, Wolf. But this is an extraordinary panel, headed by very knowledgeable legislative leaders in Connie Mack and John Breaux, Bill Frenzel, the former Congressman, a group of experts who know the code, know the policy issues.

It's a superb group of people. They're going to go to the country and hold hearings and listen to the American people and come back with a wide range of options for the president. The president has said, you know, everything's on the table. Give me your very best thinking here.

BLITZER: So everything on the table, meaning there could be a flat tax, let's say a 12 or a 15 percent flat tax for everyone across the board? Or some sort of consumption tax, what they call a value- added tax, and eliminate the income tax, the entire code? Is that right that you're considering all these kinds of options?

SNOW: Well, the panel will. The president has asked the panel to do their very best thinking on what will make the code fairer, simpler and more pro-growth. We owe it to the American people to give them the very best code we can. The president has said to the panel, go forward, give us your best thinking, come forward with the best recommendations you can come up with.

BLITZER: In terms of legislative strategy, do you envisage the Social Security reform that the president is proposing, the little partial privatization of Social Security, for that legislative battle to precede the tax simplification battle, if in fact, there is a battle? Or to be simultaneous? These two issues coming before the Congress around same time.

SNOW: Well, the -- we're already engaged, as you know, Wolf, on the issue of Social Security. Just yesterday the president had his second meeting in the White House with congressional leaders. We want to get -- build bipartisan support for reform of Social Security to modernize it, make it secure and make it available to future generations.

It's already underway. The first job there, though, is to engage the American people in the importance of this issue and define the problem. We have a lot of work ahead of us to define the problem well. BLITZER: What is your assessment in terms of job creation for 2005? We now know that what, about 2.2 million jobs were created last year, 157,000 estimated jobs were created in December. The number is just coming out this morning. What do you anticipate 2005 will bring?

SNOW: I think, Wolf, we're going to see continued strong economic growth, good economic growth, as we've seen this year and with the sort of economic growth, I foresee there will be lots of jobs created, as we're seeing in today's report and as we've seen for the last 16 months. So I'd say we'll see continuing good, strong growth in the economy and good, strong job pickup for the foreseeable future.

BLITZER: Well, because there's been some of your estimates earlier were suggesting maybe 3.5, 3.6 million new jobs in 2005. You sort of have scaled that back now to around 2.2 or 2.3, or 2.1, I'm not exactly sure. But what is the hard number, at least as you look forward to this coming year?

SNOW: Well, I think -- I'm not going to forecast that. But I would say we would see continuing strong growth in jobs, as we've seen over the course of this last year.

BLITZER: Will we also be seeing the export, if you will, or a lot of jobs -- manufacturing jobs, service jobs, being sent overseas? Is that phenomenon, in your estimate, going to continue in this current year?

SNOW: Wolf, we don't have forecasts on matters like that. But let me say the issue of job creation is the fundamental issue that confronts the economic policy team here. And I'm confident we're going to continue to create lots and lots of jobs with a nice big net pickup in jobs for American workers over the course of the next year.

BLITZER: And you're confident the economy will continue to grow at a nice, robust level this coming year?

SNOW: I'm confident it will. All the fundamentals are in place. High productivity, low inflation, good corporate profitability and jobs coming back.

BLITZER: All sounds pretty good. Let's hope you're right. Thanks very much, Mr. Secretary.

SNOW: Thank you very much.

BLITZER: And almost two weeks after the tsunami, families are still dealing with the unknown, searching for lost loved ones with no place to start. When the news from CNN continues, we'll have an update. We'll speak with one of those families.

(COMMERCIAL BREAK)

BLITZER: Many Americans are still missing or unaccounted for in the aftermath of the tsunamis. Barbara Laing has yet to hear from her cousin and aunt who were in Thailand. She's joining us now live from Houston. What happened? What were they doing there? And what is your best assessment of where they may be now?

BARBARA LAING, RELATIVES MISSING IN THAILAND: Corrnia (ph) lost her brother, my cousin Colin, in September of 2004. That was the last time we had any communication with her, until we received a Christmas card January 3rd of this year, that was addressed to her father, my uncle Nathan, who lives in Goshores (ph), Alabama, and basically said, hi, dad, still in Thailand, don't know how long I'll stay. We noticed on the postmark, it was dated 12-17, postmarked from Phuket.

BLITZER: So what is the State Department telling you? I'm sure you're in close touch with them.

LAING: We only reported them missing, and otherwise we haven't heard anything else, actually. Corrina's mother, Margaret, was raising her deceased brother's son, which is the picture you also have of the little boy, Colin (ph). We believe that she was also there potentially on holiday with her.

BLITZER: And would you normally be speaking to them often, or would this delay in not hearing from them or speaking to them now be extraordinary?

LAING: No, Wolf, it wouldn't be extraordinary. Corrina was not raised with my uncle, however, she lived in California. She was an international flight attendant. However, we don't know what airlines, and they communicated probably once every two or three months by card or by phone. Like I say, they called in September to announce that the son had died and that they were there. Unfortunately, my uncle and my mother at that point in time were literally running from Hurricane Ivan, which subsequently hit their house, so it was not at all abnormal that we haven't had any communication since that time.

BLITZER: Is someone going out to Phuket, out to the region to physically try to find these people from your family?

LAING: Right now, frankly, I think that my uncle is too distraught. That's something that my mother and I are discussing right now. I just tried to do everything that I can, via an Internet search. I've contacted the police in Corona, California, where Corrina resides. I'm hoping maybe someone can recognize the flight attendant uniform on the show today and give us additional contacts.

BLITZER: And you don't know which airlines she's been working for?

LAING: No, sir.

BLITZER: Is -- what else can you do, a person in your situation looking for a loved one who you suspect was there in Phuket at the time of this tsunami, what else can you do or do you think you should be doing?

LAING: I wish, honestly, that I had the resources and the know- how to hop on a plane tomorrow. This is something obviously nobody expects, and I'm doing the best I can. I think when we heard of it, we thought that the potential was there for Corrina to be in Thailand, but I guess we were hoping that that wasn't the case, until we received the Christmas card. This came upon me, a request for help from my mother and uncle quite suddenly this week. I went to a CNN link, wrote my appeal, and was fortunate enough to be contacted to be on the show today. So I'm in the early stages of trying to locate them.

BLITZER: Have there been people in Thailand and Phuket that you've been able to talk to directly that you might be able to get help from?

LAING: No, sir. I just got the name of the business card with the name of the business in Rawai (ph) Beach. Apparently it was called "Paradise," which was a series of bungalows, a dive school and a restaurant. I haven't been able to locate that on the Internet. There is an international number on there. I have tried one of them, and have been repeatedly disconnected. I have not yet tried the other one. I just received that information late yesterday.

BLITZER: When you speak with consular officials at the State Department and the hotline -- I'm sure you've been in touch with them -- what advice do they give you?

LAING: Wolf, I have not done that. In fact, my mother was the one that contacted the Red Cross, who then referred her to the State Department, who only told her basically if we had any news of finding them to please contact them again.

BLITZER: And they didn't have any other specific recommendations what you should be doing, how you should be searching?

LAING: No, sir.

BLITZER: What goes through your mind right now? Are you fearful that this could be -- that the worst news might be out there?

LAING: Personally I am. I'm very afraid. We feel that since we had communication with them, when the son died, when my cousin died, that surely if Corrina was missing and her mother was alive, she would have contacted us by now. When I look on the Internet and they do the victim search and list of victims, it's just horrific, and it seems impossible to believe that they are OK, and yet I also read the reunifications on CNN, and that of course gives me hope. But, Wolf, their family and I can't let this go. We'll do everything we can.

BLITZER: Well, Let's hope for the best. Barbara Laing, good luck to you and your family. Thanks very much for sharing your story. Maybe someone out watching might be able to help out. We appreciate it.

LAING: Thank you for the opportunity.

BLITZER: And we'll take a quick break. We'll be right back.

(COMMERCIAL BREAK) LAING: I'll be back later today, every weekday 5:00 p.m. Eastern for WOLF BLITZER REPORTS. Much more developments coming up on the tsunami disaster, the fallout from that, what's happening in Iraq and other stories. We're watching all of that for you.

Until then, thanks very much for joining us. I'm Wolf Blitzer in Washington. A CNN special, "SAVING THE CHILDREN." That's coming up next.

(COMMERCIAL BREAK)

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