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CNN Live At Daybreak

Security For Today's Presidential Inauguration Events in Washington; Examining How Easy It is to Get Driver's License in North Carolina

Aired January 20, 2005 - 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: Straight ahead on DAYBREAK, countdown to inauguration. President Bush's swearing in ceremony just hours away. We will bring you a sneak preview.
Plus, paying the tab -- find out who's picking up the more than $40 million bill for the inaugural festivities and why.

And the confirmation of Condoleezza Rice -- we'll show you what Democrats may do to delay the process.

It is Thursday, January 20.

You are watching DAYBREAK.

And good morning to you.

From the Time Warner Center in New York, I'm Carol Costello, along with Chad Myers.

Now in the news, Washington gets buttoned up. Security is tight for today's presidential inauguration. Police from as far away as Seattle are in the nation's capital. About 100 square blocks are closed, or soon will be. A police officer will be stationed every seven to 10 feet along the inaugural parade route.

Information from an unknown and uncorroborated source has authorities in the Boston area on alert this morning. Police are looking for four Chinese nationals wanted for questioning in a possible terrorist threat.

Condoleezza Rice is expected to get Senate approval as the next secretary of state, but possibly not today. Sources tell CNN some Senate Democrats plan to use delaying tactics that will push her confirmation to next week.

And the Muslim faithful fulfill one of the pillars of Islam and then get ready to head home. Hajj for about two million people is coming to an end in Saudi Arabia.

To the forecast center and Chad -- good morning.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: What are you, like performing a little tough love this morning?

MYERS: Well, everybody is whining how cold it is and it's January.

COSTELLO: All right, Mr. Weatherman, thank you.

MYERS: What do you expect?

COSTELLO: The road ahead starts today for President Bush. And it begins with prayer. The first stop on the president's agenda this inauguration morning is St. John's Episcopal Church. And then it's on to the Capitol for his inauguration ceremony. The first family has been celebrating in the run-up to today's festivities. They attended three dinners for big donors and popped in on the Texas Black Tie & Boots Ball last night in Washington. And that's where the president gave revelers a preview of his inaugural address.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm looking forward to talking to the country and really speaking to the world. And here's what I'm going to say. I'll say we love freedom in America and everybody deserves to be free. And I know that when this world becomes more free, the world will become more peaceful.

(END VIDEO CLIP)

COSTELLO: And be sure to stay with CNN throughout the day for all of your live inauguration coverage. From the swearing in to the parade to the balls, it is all right here on CNN.

One reporter describes it as a steel curtain surrounding the city. Security for the president's inauguration is intense. Anti- aircraft missiles, F16 and F15 combat aircraft and 7,000 police officers on duty and ready for anything. And, no, the terror alert level has not been raised for Washington, D.C.

Live to Atlanta and our law enforcement analyst Mike Brooks -- good morning, Mike.

MIKE BROOKS, CNN CORRESPONDENT: Good morning, Carol.

COSTELLO: Hey, I know it's better to be safe than sorry, but even Homeland Security Secretary Tom Ridge says there is no credible threat to the festivities today.

Does someone know something we don't?

BROOKS: No, but this is the first inauguration since 9/11 of 2001 and they are taking every precaution they can to make sure that this city is going to be the safest place on Earth today. There are over, as you said, almost 7,000 police officers and as of midnight, they've shut down 100 city blocks just around the Capitol. We look right here at this graphic and we see the red line. That is basically the sterile area between the Capitol and the Lincoln Memorial. Nothing is going to move in this area unless you have a badge and the right credentials and a pass for your car to drive in and out of here.

Now, the dotted area will, you see the dotted lines? That will be an area where people can come in and out to conduct business, but they have to have the right information.

There will also be security checkpoints along the parade route, Carol, where anyone who's going to the grandstands and are going to stand there and watch will have to pass through Magnetometers, similar to what you go through at the airports every day. So they're encouraging people not to bring any backpacks and there's a prohibited list of items that you cannot bring on the inaugural Web site.

COSTELLO: OK, during the inaugural parade, there's a tradition of the president and the first lady getting out of the limo and walking the parade route.

Do you think they'll do that this year? Because I know they had a little bit of a problem even four years ago.

BROOKS: Well, they will not say exactly where they will get out. But usually after they leave the Capitol and they go west bound, they go down Constitution Avenue and then west bound on Pennsylvania, they'll get out and walk. It's a nightmare for the Secret Service because, I can tell you, I was three cars behind the president during the Clinton inaugural parade and it's a nightmare. Because then all of the agents have to get out and walk behind them, as we see here.

And the last inaugural, in 2001, the demonstrators got a little close. And we saw a scurry of activity. They got them back into the limos and took off up 15th Street and then left to Pennsylvania Avenue to the reviewing stand in front of the White House.

But it's a very, very dangerous time when this does happen. Even though everyone's been cleared, it's still a nightmare for the Secret Service and all the security people along the parade.

COSTELLO: Well, and, also, Mike, there are to be protesters along the parade route.

Do you know anything about that?

BROOKS: This is the first time ever that protesters have actually been given their own space along the parade. The protesters work with the group A.N.S.W.E.R., Act Now To Stop War and End Racism. It is going to be on Pennsylvania Avenue. The parade is going to come out of the west -- east front of the Capitol, down Constitution Avenue, bear in with Pennsylvania and then right along Pennsylvania Avenue, right about here is where they are going to be set up. They're going to have their own grandstands. But I guarantee you, you're going to see more and more action -- it's going to be right here -- more and more police between here and here, because what they're planning to do is they're planning to stand up and basically turn their back on the president and the first lady. But they decided -- but I guarantee you, there will be many, many Metropolitan Police Department officers, U.S. Capitol Police, Park Police right here. And then the parade will continue on down Pennsylvania Avenue. And as it gets closer to the White House, it will make a right hand turn on 15th Street. It'll pass here by the J.W. Marriott Hotel. Then it will make a right hand turn, go up 15th Street, make another left onto Pennsylvania Avenue in this secure area, where the reviewing stand will be right here. Normally, Carol, what they usually do, they get here, they go into the White House, freshen up a little bit, come out, sit in the reviewing stand and watch the two hour parade go by.

We'll be seeing all of this on CNN as -- because our press area will be right here. This is something that's been done for years. It's, they've been planning for the worst and they're hoping for the best, but it's now game time -- Carol.

COSTELLO: It certainly is and I'm sure they'll do a great job.

Mike Brooks live from Atlanta this morning.

Thank you.

BROOKS: Thank you.

COSTELLO: Be sure to stay tuned into CNN day and night for the most reliable news about your security.

Some may call it the key to the kingdom. It's the one document in this country that allows someone, even a possible terrorist, to build a legitimate identity.

Homeland security correspondent Jeanne Meserve takes a look at what's being done about it.

(BEGIN VIDEO TAPE)

SHERIFF TERRY JOHNSON, ALAMANCE COUNTY, NORTH CAROLINA: And you can see somebody's been into that plastic and it's taped over. But that's not a legit consular card. That's been handwritten. This picture has been replaced. No stamp whatsoever on this passport. Printed off of a computer. No, it's not the real deal.

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): Fake and altered documents, all used to try to obtain North Carolina drivers licenses, often successfully.

JOHNSON: That is the key to the kingdom. That will also be the key that will bring the kingdom down if we don't do something.

MESERVE: Alamance County, North Carolina Sheriff Terry Johnson has been fighting crime for 30 years.

JOHNSON: Yes, well, thank you.

MESERVE: He says a license, once issued, gives a legitimate identity to a criminal or worse.

JOHNSON: You can get an airplane ticket and be able to get on an airplane showing the driver's license. They could even get a pilot's license like some of those individuals in 9/11 did who crashed into our Twin Towers.

MESERVE: In the past year at this one small North Carolina motor vehicle office, Johnson and his deputies have caught more than 125 people trying to use fraudulent documents to get licenses.

(on camera): Now, do you believe that any of these people who have come to this DMV and gotten a license are terrorists?

JOHNSON: I don't know. And that's the problem.

MESERVE (voice-over): Johnson says people come from as far away as New York to exploit North Carolina's licensing procedures. We watched one man present a Mexican passport as identification.

UNIDENTIFIED FEMALE: This is expired, OK? It's 2004 and you have no, no visa, no INS stamp. I've got to have something that can go along with this (UNINTELLIGIBLE) I can use. This is mandatory, but I've got to have something else. Do you have a utility bill or anything like that?

MESERVE: The sheriff checks his identification and finds it is authentic. Though the man admits to being in the United States illegally, North Carolina had already given him one license.

JOHNSON: Have you ever had a driver's license? UNIDENTIFIED MALE: Right now my driver's license is suspended.

JOHNSON: Suspended?

UNIDENTIFIED MALE: Yes.

JOHNSON: A North Carolina driver's license?

UNIDENTIFIED MALE: Yes.

JOHNSON: And why are they suspended?

UNIDENTIFIED MALE: I had one dui.

JOHNSON: One dui. But yet you drove here anyway.

MESERVE: The stringency of licensing requirements varies. Though 40 states require a driver's license applicant to prove he is in the country legally, North Carolina does not. To establish identity and North Carolina residency, the Department of Motor Vehicles accepts some documents that have been rejected by other states as unreliable and some that are easily forged or falsified.

The DMV says it is tightening up with new technology and anti- fraud training for employees.

GEORGE TATUM, COMMISSIONER, NORTH CAROLINA DMV: We feel like we are on the right road to providing a very secure system in North Carolina in the issuance of drivers licenses. MESERVE: Sheriff Johnson hasn't seen the impact yet.

JOHNSON: We arrested one guy who had six different North Carolina drivers licenses in six different names. That tells you how easy it is.

MESERVE: Johnson believes homeland security is only as strong as its weakest link. And as he sees it, one of the weak links is right here in North Carolina.

JOHNSON: The government has got to open its eyes.

MESERVE: Jean Meserve, CNN, Alamans County, North Carolina.

(END VIDEO TAPE)

COSTELLO: The focus in the nation's capital may be on the presidential inauguration today, but the Senate does have business to attend to. And on the agenda, confirming a new secretary of state. We'll see what the Democrats have planned for Condoleezza Rice.

And after the political wrangling, it's time to dress up for the parade and more parties. At 24 minutes past the hour, we've got a look at the gala celebrations ahead.

And after the parties, it'll be down to business with some fence mending. We'll get a look at what our European allies are expecting from the next Bush term.

You are watching DAYBREAK for a Thursday morning.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: I would be the first again to say we've had to make a lot of decisions, some of them good, some of them bad. But I would hope that what we will do now is to focus on where we go from here.

(END VIDEO CLIP)

COSTELLO: Well, one place she won't be going today, if some Senate Democrats have their say, is the secretary of state's office. Sources tell CNN those senators want to delay her confirmation, kind of a political poke in the eye for President Bush. During Rice's confirmation hearings, though, Senator Barbara Boxer was perhaps the most vocal critic of Condoleezza Rice.

The question for us this morning -- was Boxer's sparring partisan sniping or should Rice's confirmation hearing have been even more combative?

Political analyst and "Los Angeles Times" columnist Ron Brownstein joins us live now -- good morning.

RON BROWNSTEIN, CNN POLITICAL ANALYST: Good morning, Carol.

COSTELLO: You know, the "New York Times," despite Senator Boxer's questions, said in an editorial: "With few exceptions, the hearing was political theater." It also said, "Rice went through a delicate rinse cycle at best."

Do you agree?

BROWNSTEIN: Well, the one quote that you aired there was a closest she came to acknowledging mistakes in the first term. It's something Democrats have been battering the president's nominees to do in these hearings one after the other. And by and large, they have refused.

I don't think it was quite as tame as that editorial suggests. There was very tough questioning, not only from Barbara Boxer, but John Kerry and Joe Biden. I think what Democrats have decided, and we talked about this a couple of weeks ago in the context of Alberto Gonzales, is they've decided to use these confirmation hearings to raise questions about the policies. But in the end, they are willing to give the president his nominees for the executive branch, choosing to reserve their fire mostly for the judicial lifetime appointments.

COSTELLO: Interesting. You know, we mentioned Barbara Boxer and her questions of Ms. Rice. For those of our viewers who didn't witness her barrage of questions, here's a sample.

(BEGIN VIDEO CLIP)

RICE: I really hope that you will refrain from impugning my integrity.

Thank you very much.

SEN. BARBARA BOXER (D-CF), FOREIGN RELATIONS COMMITTEE: I'm not. I'm just quoting what you said. You contradicted the president and you contradicted yourself.

RICE: But there were other provisions that you did not put up. It was not fully in context, what you presented yesterday.

BOXER: Dr. Rice...

RICE: And...

BOXER: I agree with you completely.

RICE: Yes. And...

BOXER: But your letter didn't say...

RICE: No, I understand that.

BOXER: ... that one provision...

RICE: But... BOXER: ... because the conferees could have kept that one provision.

RICE: Yes, we decided, you're right, not to try and parse. But I just want to make clear that you did not put up the entire set of provisions.

BOXER: Of course I didn't.

RICE: Yes. And that's just...

BOXER: Because the conferees could have kept that. You didn't tell them to keep it.

RICE: Yes, but the impression was left that what we objected to was that one provision when it...

BOXER: Well, you did.

RICE: ... when, in fact, there were several.

BOXER: The fact is that the reconstituting were based on the yellow cake and the aluminum tubes, both of which proved to be false. And when I asked you about aluminum tubes...

RICE: And balancing equipment...

BOXER: ... you switched to...

RICE: ... and the accounts out of which these came...

BOXER: You...

RICE: ... and his keeping nuclear scientists together. Let's have the entire picture.

BOXER: OK. Yes, exactly my point.

(END VIDEO CLIP)

COSTELLO: All right, so if that was political theater, it was well acted.

And isn't Barbara Boxer right about a few things? Rice was front and center prewar pushing the nation to war and she didn't really say that much about whether troop strength was adequate or if mistakes were made. Did she give you any clue as to how she would garner more support for the war overseas?

BROWNSTEIN: The short answer is no. I mean I think, look, those were -- you cited very quickly the three principal areas, I think, that were in dispute -- the accuracy of the administration warnings before the war, the degree of planning after the war and the ability to build an independent Iraqi force and how far we have progressed on that front.

Joe Biden was very assertive in arguing that the Iraqis have made much less progress, in fact, than the administration is portraying.

You know, I find all of this a wonderful contrast to what we're doing here today with the inaugural. The inaugural is about aspiration. It is about ends. What we saw in the Condi Rice hearing was that really the fight in Washington always is about implementation. It's about means.

The president today is going to talk about spreading liberty through the world as the best defense for America in the long run. No one really disagrees with that. The question is whether the means we have chosen to pursue that end, in fact, are getting us closer to that goal. And I think what you saw in the Rice hearings was a great deal of skepticism from Democrats and even some Republicans about whether the war in Iraq is moving us in that direction. And, on the flip side, a very firm defense from Condi Rice -- I think what we'll hear from President Bush as well -- that what we're doing is equivalent to what we did after World War 2 in Germany and Japan. We are trying to lay the foundation of a new international security order, beginning with Iraq, that will move toward a more democratic Middle East and ultimately will reduce the threat of terror.

COSTELLO: Well, it'll be interesting today to see if the Democrats really do delay her confirmation, Condoleezza Rice's confirmation.

We have an interesting picture to leave our viewers with on this subject of Condoleezza Rice and Barbara Boxer together after the confirmation hearings. And they seem to be making friends. Can we see that picture now? We're getting it. There it is. So, see? They made friends at the end, Ron.

BROWNSTEIN: Yes, and, you know, Dianne Feinstein introduced, the colleague of Barbara Boxer introduced Condoleezza Rice, who, of course, was provost at Stanford, a home state girl, and, you know? And there was Barbara Boxer being the most aggressive. It's what Democrats, I think, want to see and probably what we're going to see a lot of in this year. It is still a very polarized environment in Washington.

COSTELLO: All right, Ron Brownstein live in Washington this morning.

Thank you.

Your news, money, weather and sports.

It's 6:20 Eastern.

Here's what's all new this morning.

Up to half a million people are expected to be bundled up in Washington to witness President Bush's second inauguration. Police from across the country will line the parade route, one officer every 10 feet.

The FBI tells Boston authorities that four possible terror suspects may be heading their way. They are Chinese nationals who may have been smuggled in from Mexico. Federal authorities say they received a tip about an unsubstantiated threat against Boston.

In money news, Martha Stewart is holding a huge going out of business sale. Her company is closing its online catalogs -- her online and catalog store and selling what's left at a big discount. The company says the online store was not profitable.

In culture, an original Picasso has been sold at the discount, sort of. One of the great artist's crayon on paper drawings was sold by discount retailer Costco on its Web site. The art work went for just a penny under $40,000.

In sports, NASCAR driver Bobby Gordon announced that he'll be driving with Jim Bean Bourbon this year. Actually, Jim Bean will not be on his car. It will be on his car, rather, not in it. NASCAR broke away from a longstanding rule and will allow hard liquor sponsorships this year. Jim Bean joins Jack Daniels and Crown Royal as the new sponsors -- Chad.

MYERS: Carol, and did you hear? Bill Elliot will actually be driving in the Bud Shootout February 12 and the 24 hours of Rolex of Daytona starts February 5. It's almost here. It's almost here. The racing blackout is almost over.

Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you.

Just ahead on this inaugural DAYBREAK, a cop every 10 feet. Super tight security for traditional parades this afternoon. We'll have a preview for you.

And what does Congress want and expect from this president in term two? We'll talk with legislators from both parties.

(COMMERCIAL BREAK)

CARRIE LEE, CNN CORRESPONDENT: Good morning.

I'm Carrie Lee at the Nasdaq market site.

The "Wall Street Journal" reporting that Federated Department Stores is in preliminary talks to buy May Department Stores. Value of a possible deal hard to say at this point, but together the companies would have over 1,000 department stores in the United States, nearly 1,000, that is. Federated owns Macy's and Bloomingdale's. May owns Lord & Taylor, Marshall Field's and David Bridal. Both companies have market values between $9 billion and $10 billion.

If this deal happens, it would be just the latest retail merger. Remember, Sears and Kmart came together not too long ago in an $11.5 billion deal.

So that's the latest there.

Turning to stocks, futures are looking very weak. We're expecting a sharply lower open for stocks this Thursday on the heels of quite a bit of selling at the close on Wednesday. The Nasdaq down 1 1/2 percent.

One name to watch today, eBay. The online retailer disappointed Wall Street last night, with Q4 profits that missed the Wall Street estimate. They're also lowering profit and sales guidance for this year. EBay's shares down about 12 percent in the after hours session. And that is certainly going to be one to watch on Wall Street today.

And that is the latest business news.

DAYBREAK will be right back.

(COMMERCIAL BREAK)

COSTELLO: Chapter two of the Bush presidency begins just hours from now. The commander-in-chief, during these turbulent times, is focusing on freedom.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In these four years, we have moved forward as a people. We have faced challenges. We have faced them together and we have taken up serious tasks at home, as well as abroad. We have grown in appreciation for our freedom and we have grown in appreciation for the men and women who defend it.

(END VIDEO CLIP)

COSTELLO: Live now to CNN White House correspondent Suzanne Malveaux -- Suzanne, I understand the president's inaugural speech is going to be rather short.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, yes.

Good morning, Carol.

As a matter of fact, it's going to be about 17 minutes, we are told. This is a draft that has gone through perhaps 21 different versions. The president's been practicing this since last Thursday in the family theater at about one hour sessions or so. And a theme that we are hearing is that it's going to be a very optimistic, very hopeful speech, really talking about achieving peace abroad, security at home.

One of the excerpts that we have from the speech, he says: "We are led by events and common sense to one conclusion -- the survival of liberty in our land increasingly depends on the success of liberty in other lands. The best hope for peace in our world is the expansion of freedom in all the world."

Clearly, you get a sense of the president's priority here, and that is moving forward with diplomacy, moving forward with democracy, really trying to patch up some of those relations that had soured over the Iraq war, also trying to make peace, perhaps, with a lot of his critics, the Democrats as well as others, who really have not seen eye to eye on his policy. And this comes, of course, Carol, at a time when the nation is still very much split over a number of issues.

COSTELLO: Suzanne Malveaux live from Washington this morning.

Thank you.

How is Europe reacting to President Bush's second term? We'll take you live to London for an update.

Plus, we know how much the inauguration costs, but exactly who is picking up the tab? Ali Velshi will be back to break down the costs of the big celebration, and he's naming names.

DAYBREAK will be right back.

(COMMERCIAL BREAK)

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Aired January 20, 2005 - 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: Straight ahead on DAYBREAK, countdown to inauguration. President Bush's swearing in ceremony just hours away. We will bring you a sneak preview.
Plus, paying the tab -- find out who's picking up the more than $40 million bill for the inaugural festivities and why.

And the confirmation of Condoleezza Rice -- we'll show you what Democrats may do to delay the process.

It is Thursday, January 20.

You are watching DAYBREAK.

And good morning to you.

From the Time Warner Center in New York, I'm Carol Costello, along with Chad Myers.

Now in the news, Washington gets buttoned up. Security is tight for today's presidential inauguration. Police from as far away as Seattle are in the nation's capital. About 100 square blocks are closed, or soon will be. A police officer will be stationed every seven to 10 feet along the inaugural parade route.

Information from an unknown and uncorroborated source has authorities in the Boston area on alert this morning. Police are looking for four Chinese nationals wanted for questioning in a possible terrorist threat.

Condoleezza Rice is expected to get Senate approval as the next secretary of state, but possibly not today. Sources tell CNN some Senate Democrats plan to use delaying tactics that will push her confirmation to next week.

And the Muslim faithful fulfill one of the pillars of Islam and then get ready to head home. Hajj for about two million people is coming to an end in Saudi Arabia.

To the forecast center and Chad -- good morning.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: What are you, like performing a little tough love this morning?

MYERS: Well, everybody is whining how cold it is and it's January.

COSTELLO: All right, Mr. Weatherman, thank you.

MYERS: What do you expect?

COSTELLO: The road ahead starts today for President Bush. And it begins with prayer. The first stop on the president's agenda this inauguration morning is St. John's Episcopal Church. And then it's on to the Capitol for his inauguration ceremony. The first family has been celebrating in the run-up to today's festivities. They attended three dinners for big donors and popped in on the Texas Black Tie & Boots Ball last night in Washington. And that's where the president gave revelers a preview of his inaugural address.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm looking forward to talking to the country and really speaking to the world. And here's what I'm going to say. I'll say we love freedom in America and everybody deserves to be free. And I know that when this world becomes more free, the world will become more peaceful.

(END VIDEO CLIP)

COSTELLO: And be sure to stay with CNN throughout the day for all of your live inauguration coverage. From the swearing in to the parade to the balls, it is all right here on CNN.

One reporter describes it as a steel curtain surrounding the city. Security for the president's inauguration is intense. Anti- aircraft missiles, F16 and F15 combat aircraft and 7,000 police officers on duty and ready for anything. And, no, the terror alert level has not been raised for Washington, D.C.

Live to Atlanta and our law enforcement analyst Mike Brooks -- good morning, Mike.

MIKE BROOKS, CNN CORRESPONDENT: Good morning, Carol.

COSTELLO: Hey, I know it's better to be safe than sorry, but even Homeland Security Secretary Tom Ridge says there is no credible threat to the festivities today.

Does someone know something we don't?

BROOKS: No, but this is the first inauguration since 9/11 of 2001 and they are taking every precaution they can to make sure that this city is going to be the safest place on Earth today. There are over, as you said, almost 7,000 police officers and as of midnight, they've shut down 100 city blocks just around the Capitol. We look right here at this graphic and we see the red line. That is basically the sterile area between the Capitol and the Lincoln Memorial. Nothing is going to move in this area unless you have a badge and the right credentials and a pass for your car to drive in and out of here.

Now, the dotted area will, you see the dotted lines? That will be an area where people can come in and out to conduct business, but they have to have the right information.

There will also be security checkpoints along the parade route, Carol, where anyone who's going to the grandstands and are going to stand there and watch will have to pass through Magnetometers, similar to what you go through at the airports every day. So they're encouraging people not to bring any backpacks and there's a prohibited list of items that you cannot bring on the inaugural Web site.

COSTELLO: OK, during the inaugural parade, there's a tradition of the president and the first lady getting out of the limo and walking the parade route.

Do you think they'll do that this year? Because I know they had a little bit of a problem even four years ago.

BROOKS: Well, they will not say exactly where they will get out. But usually after they leave the Capitol and they go west bound, they go down Constitution Avenue and then west bound on Pennsylvania, they'll get out and walk. It's a nightmare for the Secret Service because, I can tell you, I was three cars behind the president during the Clinton inaugural parade and it's a nightmare. Because then all of the agents have to get out and walk behind them, as we see here.

And the last inaugural, in 2001, the demonstrators got a little close. And we saw a scurry of activity. They got them back into the limos and took off up 15th Street and then left to Pennsylvania Avenue to the reviewing stand in front of the White House.

But it's a very, very dangerous time when this does happen. Even though everyone's been cleared, it's still a nightmare for the Secret Service and all the security people along the parade.

COSTELLO: Well, and, also, Mike, there are to be protesters along the parade route.

Do you know anything about that?

BROOKS: This is the first time ever that protesters have actually been given their own space along the parade. The protesters work with the group A.N.S.W.E.R., Act Now To Stop War and End Racism. It is going to be on Pennsylvania Avenue. The parade is going to come out of the west -- east front of the Capitol, down Constitution Avenue, bear in with Pennsylvania and then right along Pennsylvania Avenue, right about here is where they are going to be set up. They're going to have their own grandstands. But I guarantee you, you're going to see more and more action -- it's going to be right here -- more and more police between here and here, because what they're planning to do is they're planning to stand up and basically turn their back on the president and the first lady. But they decided -- but I guarantee you, there will be many, many Metropolitan Police Department officers, U.S. Capitol Police, Park Police right here. And then the parade will continue on down Pennsylvania Avenue. And as it gets closer to the White House, it will make a right hand turn on 15th Street. It'll pass here by the J.W. Marriott Hotel. Then it will make a right hand turn, go up 15th Street, make another left onto Pennsylvania Avenue in this secure area, where the reviewing stand will be right here. Normally, Carol, what they usually do, they get here, they go into the White House, freshen up a little bit, come out, sit in the reviewing stand and watch the two hour parade go by.

We'll be seeing all of this on CNN as -- because our press area will be right here. This is something that's been done for years. It's, they've been planning for the worst and they're hoping for the best, but it's now game time -- Carol.

COSTELLO: It certainly is and I'm sure they'll do a great job.

Mike Brooks live from Atlanta this morning.

Thank you.

BROOKS: Thank you.

COSTELLO: Be sure to stay tuned into CNN day and night for the most reliable news about your security.

Some may call it the key to the kingdom. It's the one document in this country that allows someone, even a possible terrorist, to build a legitimate identity.

Homeland security correspondent Jeanne Meserve takes a look at what's being done about it.

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SHERIFF TERRY JOHNSON, ALAMANCE COUNTY, NORTH CAROLINA: And you can see somebody's been into that plastic and it's taped over. But that's not a legit consular card. That's been handwritten. This picture has been replaced. No stamp whatsoever on this passport. Printed off of a computer. No, it's not the real deal.

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): Fake and altered documents, all used to try to obtain North Carolina drivers licenses, often successfully.

JOHNSON: That is the key to the kingdom. That will also be the key that will bring the kingdom down if we don't do something.

MESERVE: Alamance County, North Carolina Sheriff Terry Johnson has been fighting crime for 30 years.

JOHNSON: Yes, well, thank you.

MESERVE: He says a license, once issued, gives a legitimate identity to a criminal or worse.

JOHNSON: You can get an airplane ticket and be able to get on an airplane showing the driver's license. They could even get a pilot's license like some of those individuals in 9/11 did who crashed into our Twin Towers.

MESERVE: In the past year at this one small North Carolina motor vehicle office, Johnson and his deputies have caught more than 125 people trying to use fraudulent documents to get licenses.

(on camera): Now, do you believe that any of these people who have come to this DMV and gotten a license are terrorists?

JOHNSON: I don't know. And that's the problem.

MESERVE (voice-over): Johnson says people come from as far away as New York to exploit North Carolina's licensing procedures. We watched one man present a Mexican passport as identification.

UNIDENTIFIED FEMALE: This is expired, OK? It's 2004 and you have no, no visa, no INS stamp. I've got to have something that can go along with this (UNINTELLIGIBLE) I can use. This is mandatory, but I've got to have something else. Do you have a utility bill or anything like that?

MESERVE: The sheriff checks his identification and finds it is authentic. Though the man admits to being in the United States illegally, North Carolina had already given him one license.

JOHNSON: Have you ever had a driver's license? UNIDENTIFIED MALE: Right now my driver's license is suspended.

JOHNSON: Suspended?

UNIDENTIFIED MALE: Yes.

JOHNSON: A North Carolina driver's license?

UNIDENTIFIED MALE: Yes.

JOHNSON: And why are they suspended?

UNIDENTIFIED MALE: I had one dui.

JOHNSON: One dui. But yet you drove here anyway.

MESERVE: The stringency of licensing requirements varies. Though 40 states require a driver's license applicant to prove he is in the country legally, North Carolina does not. To establish identity and North Carolina residency, the Department of Motor Vehicles accepts some documents that have been rejected by other states as unreliable and some that are easily forged or falsified.

The DMV says it is tightening up with new technology and anti- fraud training for employees.

GEORGE TATUM, COMMISSIONER, NORTH CAROLINA DMV: We feel like we are on the right road to providing a very secure system in North Carolina in the issuance of drivers licenses. MESERVE: Sheriff Johnson hasn't seen the impact yet.

JOHNSON: We arrested one guy who had six different North Carolina drivers licenses in six different names. That tells you how easy it is.

MESERVE: Johnson believes homeland security is only as strong as its weakest link. And as he sees it, one of the weak links is right here in North Carolina.

JOHNSON: The government has got to open its eyes.

MESERVE: Jean Meserve, CNN, Alamans County, North Carolina.

(END VIDEO TAPE)

COSTELLO: The focus in the nation's capital may be on the presidential inauguration today, but the Senate does have business to attend to. And on the agenda, confirming a new secretary of state. We'll see what the Democrats have planned for Condoleezza Rice.

And after the political wrangling, it's time to dress up for the parade and more parties. At 24 minutes past the hour, we've got a look at the gala celebrations ahead.

And after the parties, it'll be down to business with some fence mending. We'll get a look at what our European allies are expecting from the next Bush term.

You are watching DAYBREAK for a Thursday morning.

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(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: I would be the first again to say we've had to make a lot of decisions, some of them good, some of them bad. But I would hope that what we will do now is to focus on where we go from here.

(END VIDEO CLIP)

COSTELLO: Well, one place she won't be going today, if some Senate Democrats have their say, is the secretary of state's office. Sources tell CNN those senators want to delay her confirmation, kind of a political poke in the eye for President Bush. During Rice's confirmation hearings, though, Senator Barbara Boxer was perhaps the most vocal critic of Condoleezza Rice.

The question for us this morning -- was Boxer's sparring partisan sniping or should Rice's confirmation hearing have been even more combative?

Political analyst and "Los Angeles Times" columnist Ron Brownstein joins us live now -- good morning.

RON BROWNSTEIN, CNN POLITICAL ANALYST: Good morning, Carol.

COSTELLO: You know, the "New York Times," despite Senator Boxer's questions, said in an editorial: "With few exceptions, the hearing was political theater." It also said, "Rice went through a delicate rinse cycle at best."

Do you agree?

BROWNSTEIN: Well, the one quote that you aired there was a closest she came to acknowledging mistakes in the first term. It's something Democrats have been battering the president's nominees to do in these hearings one after the other. And by and large, they have refused.

I don't think it was quite as tame as that editorial suggests. There was very tough questioning, not only from Barbara Boxer, but John Kerry and Joe Biden. I think what Democrats have decided, and we talked about this a couple of weeks ago in the context of Alberto Gonzales, is they've decided to use these confirmation hearings to raise questions about the policies. But in the end, they are willing to give the president his nominees for the executive branch, choosing to reserve their fire mostly for the judicial lifetime appointments.

COSTELLO: Interesting. You know, we mentioned Barbara Boxer and her questions of Ms. Rice. For those of our viewers who didn't witness her barrage of questions, here's a sample.

(BEGIN VIDEO CLIP)

RICE: I really hope that you will refrain from impugning my integrity.

Thank you very much.

SEN. BARBARA BOXER (D-CF), FOREIGN RELATIONS COMMITTEE: I'm not. I'm just quoting what you said. You contradicted the president and you contradicted yourself.

RICE: But there were other provisions that you did not put up. It was not fully in context, what you presented yesterday.

BOXER: Dr. Rice...

RICE: And...

BOXER: I agree with you completely.

RICE: Yes. And...

BOXER: But your letter didn't say...

RICE: No, I understand that.

BOXER: ... that one provision...

RICE: But... BOXER: ... because the conferees could have kept that one provision.

RICE: Yes, we decided, you're right, not to try and parse. But I just want to make clear that you did not put up the entire set of provisions.

BOXER: Of course I didn't.

RICE: Yes. And that's just...

BOXER: Because the conferees could have kept that. You didn't tell them to keep it.

RICE: Yes, but the impression was left that what we objected to was that one provision when it...

BOXER: Well, you did.

RICE: ... when, in fact, there were several.

BOXER: The fact is that the reconstituting were based on the yellow cake and the aluminum tubes, both of which proved to be false. And when I asked you about aluminum tubes...

RICE: And balancing equipment...

BOXER: ... you switched to...

RICE: ... and the accounts out of which these came...

BOXER: You...

RICE: ... and his keeping nuclear scientists together. Let's have the entire picture.

BOXER: OK. Yes, exactly my point.

(END VIDEO CLIP)

COSTELLO: All right, so if that was political theater, it was well acted.

And isn't Barbara Boxer right about a few things? Rice was front and center prewar pushing the nation to war and she didn't really say that much about whether troop strength was adequate or if mistakes were made. Did she give you any clue as to how she would garner more support for the war overseas?

BROWNSTEIN: The short answer is no. I mean I think, look, those were -- you cited very quickly the three principal areas, I think, that were in dispute -- the accuracy of the administration warnings before the war, the degree of planning after the war and the ability to build an independent Iraqi force and how far we have progressed on that front.

Joe Biden was very assertive in arguing that the Iraqis have made much less progress, in fact, than the administration is portraying.

You know, I find all of this a wonderful contrast to what we're doing here today with the inaugural. The inaugural is about aspiration. It is about ends. What we saw in the Condi Rice hearing was that really the fight in Washington always is about implementation. It's about means.

The president today is going to talk about spreading liberty through the world as the best defense for America in the long run. No one really disagrees with that. The question is whether the means we have chosen to pursue that end, in fact, are getting us closer to that goal. And I think what you saw in the Rice hearings was a great deal of skepticism from Democrats and even some Republicans about whether the war in Iraq is moving us in that direction. And, on the flip side, a very firm defense from Condi Rice -- I think what we'll hear from President Bush as well -- that what we're doing is equivalent to what we did after World War 2 in Germany and Japan. We are trying to lay the foundation of a new international security order, beginning with Iraq, that will move toward a more democratic Middle East and ultimately will reduce the threat of terror.

COSTELLO: Well, it'll be interesting today to see if the Democrats really do delay her confirmation, Condoleezza Rice's confirmation.

We have an interesting picture to leave our viewers with on this subject of Condoleezza Rice and Barbara Boxer together after the confirmation hearings. And they seem to be making friends. Can we see that picture now? We're getting it. There it is. So, see? They made friends at the end, Ron.

BROWNSTEIN: Yes, and, you know, Dianne Feinstein introduced, the colleague of Barbara Boxer introduced Condoleezza Rice, who, of course, was provost at Stanford, a home state girl, and, you know? And there was Barbara Boxer being the most aggressive. It's what Democrats, I think, want to see and probably what we're going to see a lot of in this year. It is still a very polarized environment in Washington.

COSTELLO: All right, Ron Brownstein live in Washington this morning.

Thank you.

Your news, money, weather and sports.

It's 6:20 Eastern.

Here's what's all new this morning.

Up to half a million people are expected to be bundled up in Washington to witness President Bush's second inauguration. Police from across the country will line the parade route, one officer every 10 feet.

The FBI tells Boston authorities that four possible terror suspects may be heading their way. They are Chinese nationals who may have been smuggled in from Mexico. Federal authorities say they received a tip about an unsubstantiated threat against Boston.

In money news, Martha Stewart is holding a huge going out of business sale. Her company is closing its online catalogs -- her online and catalog store and selling what's left at a big discount. The company says the online store was not profitable.

In culture, an original Picasso has been sold at the discount, sort of. One of the great artist's crayon on paper drawings was sold by discount retailer Costco on its Web site. The art work went for just a penny under $40,000.

In sports, NASCAR driver Bobby Gordon announced that he'll be driving with Jim Bean Bourbon this year. Actually, Jim Bean will not be on his car. It will be on his car, rather, not in it. NASCAR broke away from a longstanding rule and will allow hard liquor sponsorships this year. Jim Bean joins Jack Daniels and Crown Royal as the new sponsors -- Chad.

MYERS: Carol, and did you hear? Bill Elliot will actually be driving in the Bud Shootout February 12 and the 24 hours of Rolex of Daytona starts February 5. It's almost here. It's almost here. The racing blackout is almost over.

Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you.

Just ahead on this inaugural DAYBREAK, a cop every 10 feet. Super tight security for traditional parades this afternoon. We'll have a preview for you.

And what does Congress want and expect from this president in term two? We'll talk with legislators from both parties.

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CARRIE LEE, CNN CORRESPONDENT: Good morning.

I'm Carrie Lee at the Nasdaq market site.

The "Wall Street Journal" reporting that Federated Department Stores is in preliminary talks to buy May Department Stores. Value of a possible deal hard to say at this point, but together the companies would have over 1,000 department stores in the United States, nearly 1,000, that is. Federated owns Macy's and Bloomingdale's. May owns Lord & Taylor, Marshall Field's and David Bridal. Both companies have market values between $9 billion and $10 billion.

If this deal happens, it would be just the latest retail merger. Remember, Sears and Kmart came together not too long ago in an $11.5 billion deal.

So that's the latest there.

Turning to stocks, futures are looking very weak. We're expecting a sharply lower open for stocks this Thursday on the heels of quite a bit of selling at the close on Wednesday. The Nasdaq down 1 1/2 percent.

One name to watch today, eBay. The online retailer disappointed Wall Street last night, with Q4 profits that missed the Wall Street estimate. They're also lowering profit and sales guidance for this year. EBay's shares down about 12 percent in the after hours session. And that is certainly going to be one to watch on Wall Street today.

And that is the latest business news.

DAYBREAK will be right back.

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COSTELLO: Chapter two of the Bush presidency begins just hours from now. The commander-in-chief, during these turbulent times, is focusing on freedom.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In these four years, we have moved forward as a people. We have faced challenges. We have faced them together and we have taken up serious tasks at home, as well as abroad. We have grown in appreciation for our freedom and we have grown in appreciation for the men and women who defend it.

(END VIDEO CLIP)

COSTELLO: Live now to CNN White House correspondent Suzanne Malveaux -- Suzanne, I understand the president's inaugural speech is going to be rather short.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, yes.

Good morning, Carol.

As a matter of fact, it's going to be about 17 minutes, we are told. This is a draft that has gone through perhaps 21 different versions. The president's been practicing this since last Thursday in the family theater at about one hour sessions or so. And a theme that we are hearing is that it's going to be a very optimistic, very hopeful speech, really talking about achieving peace abroad, security at home.

One of the excerpts that we have from the speech, he says: "We are led by events and common sense to one conclusion -- the survival of liberty in our land increasingly depends on the success of liberty in other lands. The best hope for peace in our world is the expansion of freedom in all the world."

Clearly, you get a sense of the president's priority here, and that is moving forward with diplomacy, moving forward with democracy, really trying to patch up some of those relations that had soured over the Iraq war, also trying to make peace, perhaps, with a lot of his critics, the Democrats as well as others, who really have not seen eye to eye on his policy. And this comes, of course, Carol, at a time when the nation is still very much split over a number of issues.

COSTELLO: Suzanne Malveaux live from Washington this morning.

Thank you.

How is Europe reacting to President Bush's second term? We'll take you live to London for an update.

Plus, we know how much the inauguration costs, but exactly who is picking up the tab? Ali Velshi will be back to break down the costs of the big celebration, and he's naming names.

DAYBREAK will be right back.

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