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CNN Live At Daybreak

Texas Abduction; Bush's Agenda; 'It's Your Money'; Sundance Film Festival

Aired January 21, 2005 - 06:29   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: Good morning to you. Welcome to the last half-hour of DAYBREAK. From the Time Warner center in New York, I'm Carol Costello, along with Chad Myers.
"Now in the News."

At least 14 people are dead following a car bomb attack at a Shiite mosque south of Baghdad. Iraqi police say another 42 people were injured in that attack. The bombing comes on the Muslim holiday that celebrates the traditional end of the hajj pilgrimage.

Palestinian security forces are moving into position in northern Gaza. They're being deployed in an effort to stop attacks on Israeli targets. Israeli had threatened a military offensive if Palestinian leaders took no action.

The Senate vote on the nomination of Condoleezza Rice to be secretary of state is on hold until Wednesday. Democratic senators will get nine hours on Tuesday to debate the nomination.

(WEATHER REPORT)

COSTELLO: Police in Tyler, Texas, are looking for Wal-Mart cashier Megan Holden. She's been missing since Wednesday night, and she may have been abducted.

Take a look at this. The 19-year-old woman and a man suspected of kidnapping her are seen in this store surveillance tape. You see Holden is running in the Wal-Mart parking lot, and she was being chased by a man. He does catch her. He shoves her into her own truck, and then you can see the truck speeding away.

More on this story now from reporter Julie Tam of our affiliate, KLTV, in Tyler, Texas.

Julie, what more can you tell us about this?

JULIE TAM, CNN AFFILIATE KLTV REPORTER: Well, we do have a description of the suspect. Of course, he may not be wearing the same thing. But he is a black male. This is according to the Tyler Police Department. About 5'6 to 5'8, approximately 140 to 145 pounds, 20 to 25 years old. And at the time he had on a black ball cap and a black, short, zip-up type jacket, and then with a red, long shirt inside that, and then inside that a white t-shirt, and also carrying a blue duffel bag. And, of course, officers don't know what was inside that bag, which was the scary thing. COSTELLO: Yes, it was, because you can't really tell if he's using a weapon to abduct this woman, if indeed he did abduct her.

TAM: Right.

COSTELLO: Now, inside the store, he was inside that Wal-Mart store for quite some time. What was he doing?

TAM: Well, exactly. The surveillance cameras first caught him at about 10:11 p.m. on Wednesday night, and he didn't abduct her until an hour and a half later. He was seen loitering around. You know, there you see him outside the front door. He came out of the bathroom and was just walking down the halls, even approached the McDonald's.

You know, he just seemed very brazen, because there were security cameras everywhere. But, of course, the ball cap had helped hide his face, and so it's hard to see what he looks like from the camera.

COSTELLO: Now, she was a cashier. At any point, did he talk to her? Did he go through her line?

TAM: The police would not reveal exactly what they found out from the Wal-Mart employees, but they did question all of them, including some of the customers who think that they saw the man. And, of course, Wal-Mart is not commenting on the case at all. So, we don't know that.

COSTELLO: Give us a description again of the pickup truck.

TAM: The pickup was a 2002 red Ford F-150 sport truck. And, of course, it was Megan's truck, license plate number 6-Victor-Texas- Victor-8-4. And that's what they were seen leaving in. And, of course, helicopters overhead were searching for that. They found no leads yesterday afternoon. That's what they were searching for, assuming that either the pickup truck might be abandoned or maybe the two of them were still in it.

COSTELLO: Has anyone heard from her family?

TAM: Her family yesterday, we tried to get them to talk on- camera to plead, you know, for people to help find her, but they were not willing to talk. But they have talked to police, and they watched the video, said they did not recognize the man at all. Of course, you know, the sketch is rough, and from the video it's hard to tell. But they did not know who this person was. So, apparently it's not someone that the family was aware of. I don't know if Megan knew him or not.

COSTELLO: So, if any of our viewers know anything, please call Tyler, Texas, police. That was Julie Tam of KLTV in Tyler, Texas. And thank you, Julie, for that report.

After a prayer service this morning, it will be back to work on a second term for President Bush. He's laid out an ambitious agenda for his next four years with Social Security reform near the top of the list. But as CNN's Lisa Sylvester reports, even with a Republican House and Senate changes will not be easy.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): House Ways and Means Chairman Bill Thomas predicted that the president's ambitious plan to overhaul Social Security will be rendered a dead horse.

Republicans are increasingly hesitant to get on board because of the cost, both financial and political. The president's proposal to create personal spending accounts for younger workers is running into stiff resistance from the AARP.

THOMAS MANN, BROOKINGS INSTITUTION: He may talk about the political capital he's earned, but that only works if you can intimidate your opponents, people who disagree with you, and persuade them that the country is with you and not them. But Democrats don't believe it, and Republicans are beginning to get very uneasy about it.

SYLVESTER: Mr. Bush's plan to create a guest worker program for illegal aliens may also be dead on arrival. Conservative Republicans are denouncing the president's proposal as a form of amnesty.

Judiciary Committee Chairman James Sensenbrenner, Republican House Majority Leader Tom DeLay and Representative Tom Tancredo, who heads the House Immigration Reform Caucus, are all in opposition.

REP. TOM TANCREDO (R), COLORADO: The momentum has shifted to our side. They are on the defensive. It's the first time it's ever been that way.

SYLVESTER: During the first term, Republicans stood behind the president's plan to lower taxes. This time, with a growing budget deficit, fiscal conservatives are resisting making the tax cuts permanent.

White House spokesman Scott McClellan, when asked about the tough fight ahead on Social Security, acknowledged the political realities.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Legislation, anytime it goes through Congress, tends to change during the process. The president looks forward to working with members to move forward on legislation.

SYLVESTER: As the president begins his second term, he may find his so-called mandate is not enough. He may need some muscle.

(on camera): Congressional analysts think that with a strong majority in the Senate, the president may be able to achieve some quick victories on the stalled energy bill and on tort reform, but even those issues are not a given.

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE) COSTELLO: Well, let's talk about Social Security, because you could call it the Bush push. As Lisa said, the president is wasting no time in getting his agenda out there and pushing Congress. But he and his loyal troops are also taking it to the people.

"The Wall Street Journal" is reporting the president will hit the road to talk to you about his plan for Social Security. He'll be assisted by groups like Progress for America, who have paid for a pro- Bush TV ad campaign. And not only that, Republicans are organizing activists to mail out flyers, call radio talk show hosts, and even to start an e-mail campaign. But will it work?

Let's head live to Washington and Congressman Mark Foley, a Republican from Florida, and Representative Chris Van Hollen, Jr., a Democrat from Maryland.

Welcome to you both.

REP. MARK FOLEY (R), FLORIDA: It's good to be here.

REP. CHRIS VAN HOLLEN (D), MARYLAND: Good morning, Carol.

COSTELLO: Good morning.

Congressman Foley, we just heard that powerful Republican Representative Bill Thomas says it would be wise to broaden the debate over Social Security or it would be a dead issue. Can the president's push change his mind?

FOLEY: There is no question he is persuasive. When the president invests his political capital, he's been able to get extraordinary results. But Mr. Thomas is right on the mark. We're going to have to broaden the debate. We have to include Democrats. Charlie Rangel on Ways and Means and others will be enlisted to at least offer what we hope are positive suggestions to save this very important program.

COSTELLO: Congressman Van Hollen, Democrats have their own ideas about Social Security. But can they fight back against a Republican grassroots push, a push that has proved so successful in the past?

VAN HOLLEN: Well, yes. You know, the president at his inaugural yesterday talked a lot about the importance of freedom. Social Security is a program that has kept millions of American seniors free from poverty and destitution in their old age. And rather than taking that guaranteed benefit away for future retirees, we should be shoring it up and guaranteeing it in the future. And the Democrats are willing to work with the president to do that.

What we're not willing to do is to scare the American people into thinking that the current system needs to be thrown out and radically changed, when, in fact, some adjustments can make sure that the current benefits are there for people in the future.

COSTELLO: But, Congressman, you have the president and the president's men going out with this grassroots effort. How will the Democrats fight back against that specifically?

VAN HOLLEN: Well, the first thing we're going to make it clear to people is that this is not a crisis. The president has tried to manufacture crises. He uses the rhetoric of crisis in order to justify these real radical changes. He's used the word "bankruptcy." That's just not true.

The trustees of Social Security themselves have said that the current trust fund is adequate to cover people up to the year 2042, and beyond that at 75 percent of current benefits. So, we're dealing with trying to fill a gap of 25 percent of current benefits beyond the year 2042.

So, the first thing people need to understand is don't be scared. We can fix this problem.

In the 1980s, Republicans and Democrats got together to fix the problem. It can be done. But it's not a crisis. It's a challenge.

COSTELLO: OK. On that line of thought, if the Democrats and Republicans can get together, Congressman Foley, how split is Congress on this issue? And is the issue likely to slowly die?

FOLEY: Well, let's do the math. In 1935, there were 45 working Americans for every 1 retiree. We're down to 4 to 1, heading to 2 to 1. So, I disagree with my colleague. There is a looming fiscal crisis.

And I also believe that most Americans want to hear positive solutions. The children of the future need to know Social Security will be there. We're not talking about privatizing it. We're trying to stabilize it, secure it, and provide real meaningful reform. That can be done.

Now, if we're going to have a fight between parties, nothing will happen. And that's why I think Bill Thomas and Congressman McCrery, chairman of the subcommittee, have earnestly sought to find suggestions from Democrats. You'll notice very few of them offer anything in the way of what they would do to ensure the security of Social Security.

So, I'm willing to have the debate. I think America is listening. Congressman Crenshaw from Florida had a town hall meeting of 200 seniors last week in Florida. All of the seniors were interested. They weren't rebelling. They weren't throwing taunts or jeers. They were asking him what the plan entailed. And once they heard parts of the plan, they were very interested and listening more to this debate as it unfolds.

But if we simply have a debate about we're scaring America and the president is scaring citizens, then we're not going to get very far.

COSTELLO: All right. Well, thanks to both of you. We could debate this issue for hours. It's so interesting. Congressman Chris Van Hollen, a Democrat from Maryland, Congressman Mark Foley, a Republican from Florida, thank you for joining DAYBREAK this morning.

FOLEY: Thank you, Carol.

VAN HOLLEN: Thank you.

COSTELLO: Back from Washington, "AMERICAN MORNING's" Soledad O'Brien joins us now from her office in New York -- Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: Thanks, Carol. Good morning to you.

COSTELLO: Good morning.

O'BRIEN: Yes, a little chilly out there for the inauguration yesterday, not just for us in the morning, but the folks who camped out and waited for the entire event outdoors, 100,000 or so. Reviews are now coming in for the president's second inaugural address. Liberty and freedom, as you well know, were the big themes of the speech. Some say the address was powerful and aggressive. Others say, though, it was confrontational.

Is promoting global democracy ambitious, or is it just dangerous? This morning, we talk to former Senate Majority leader George Mitchell. We're going to ask him what he thought of the speech and also see what he thought of it in a historical perspective. How does it hold up to other speeches that have been given in the past?

That's ahead this morning, Carol, on "AMERICAN MORNING." We'll see you in about 20 minutes.

COSTELLO: We'll be here. Thank you, Soledad.

You are watching DAYBREAK for a Friday.

(COMMERCIAL BREAK)

COSTELLO: Do you ever feel that no matter how much money you make you just can't seem to get ahead? It could be that inflation is eating up your extra cash. Inflation.

DAYBREAK contributor Ali Velshi is back with some insights.

Inflation?

ALI VELSHI, CNN DAYBREAK CONTRIBUTOR: It's going to rock.

COSTELLO: This report is going to rock.

VELSHI: Carol needs a little nap, because I'm going to talk to you for a few minutes about inflation.

All right, here it is. Yesterday, we had the inflation numbers for 2004 come up, the CPI number, Consumer Price Index, coming in at 3.3 percent for the year 2004. This is where all of the fun starts.

Now, if you track inflation since, you know, the early 1900s, we are looking at a little more than 3 percent a year of inflation. Things cost that much more year over year.

It's a calculation of a basket of goods that the Bureau of Labor Statistics puts together. And they've done a lot of studies of this. They have families track what they buy for two years in a little diary. And they've figured out what the average family comes out to use every year. And they create this basket upon which they base their inflation numbers.

Let me show you what's in the basket. Food and beverages is about 16 percent of the basket, or the pie chart as we have. Housing is about 41 percent. Apparel, clothing, 4 percent. Transport, 17 percent. And it goes like that. Medical care, recreation, goods and services.

Now, as you can see, housing is the biggest chunk. Transport and food -- food and energy as we like to refer to it -- are the second biggest chunks.

Now, when you calculate inflation, food and energy tend to be the most volatile parts. They're the ones that go up and down, because seasonally it's different and commodities are affected by the weather. And oil prices, as you know, go up and down.

So, historically, they take those two elements out and track the rest of it, because the other stuff stays relatively steady. So, that's why over the years you've got, you know, inflation goes up, but it's not too much.

The problem is you can't take food and energy out of your expenses.

COSTELLO: No.

VELSHI: So, your basket doesn't necessarily represent that basket. So, you may not be too alarmed. You're sitting there saying, all right, 3 percent a year, I can live with that. But it's not 3 percent for you. It could be 10 percent. It could be 11 percent if you drive, you heat a home.

Take a look at energy prices and how they affected inflation last year. Home heating oil, 39.5 percent higher.

COSTELLO: Wow!

VELSHI: Take a look at gasoline: 26.1 percent higher. And natural gas for heating your home, 16.4 percent higher. So, the energy component of inflation was up 16 percent. So, if you consume a lot of energy, your inflation rate is higher. If you have kids in college, your inflation rate is higher, because education costs are higher. Health care costs were higher. So, you could be up at 7 or 8 percent.

COSTELLO: So the bottom line is that you'll just never get ahead. So forget it!

VELSHI: The bottom line is you've got to think of it, even if you don't think about losing money, you've got to realize that inflation just eats up a piece of your money. So, if your money is sitting in a bank account earning 2.25 percent, you are still behind. Wages have gone up on average 2.5 percent in the last year.

COSTELLO: Oh, it's so depressing. Thanks for waking me up, though.

VELSHI: Exactly.

COSTELLO: Ali Velshi, many thanks to you.

We're going to check in with Chad one more time, because he's been talking about this big weekend storm, and it's going to be wicked.

(WEATHER REPORT)

COSTELLO: Stars and Hollywood dealmakers are in Utah this week for the Sundance Film Festival. We have all of the juicy details for you right after our break.

(COMMERCIAL BREAK)

COSTELLO: A cab driver asked me about Bill Hemmer, asked if he was back from Washington. And yes, indeed, he is. And he is here to tell us about the latest "New You" series. And I shouldn't really bite my nails in anticipation of this.

BILL HEMMER, CNN ANCHOR: No. We've been waiting for this story all week, in fact. I think it's one of the more unique things we've ever done on "AMERICAN MORNING" actually, Carol.

Day five of the "New You Revolution" today, we're going to talk to a habitual nail biter. It might sound like just a bad habit, but for people like Jonathan Karp, it can lead to serious health problems. Dr. Sanjay Gupta has this story. He talks about the risks and talks about putting a plan into action for young Jonathan.

So, swallow hard, Carol. Have a great weekend.

COSTELLO: Does it involve putting, like, cayenne pepper under your nails?

HEMMER: You know, actually, he was with us on Monday introducing -- well, is it a syndrome he has, or his condition that he has? We'll leave it at that. He says sometimes they would put hot sauce on his fingernails to make sure that he does not chew on them. And it did not work. He's tried everything. And he's got little, little stubs down here, Carol, right down to the cuticle. Are you grossed out yet?

COSTELLO: I'm pretty grossed out. I'm thinking about those little stubs right now.

HEMMER: Yes.

COSTELLO: Thank you, Bill. We'll see you... HEMMER: Enjoy the weekend.

COSTELLO: I will.

HEMMER: All right.

COSTELLO: We'll see you in seven minutes.

The Sundance Film Festival is under way now in Park City, Utah. And who better than Tom O'Neil of "In-Touch Weekly" to tell us all about it?

It's pretty exciting this year.

TOM O'NEIL, EDITOR, "IN-TOUCH WEEKLY": It really is. A lot of A-list stars are trying to re-enter the business now and redefine their careers. And the...

COSTELLO: Do you mean by making better movies and more interesting fare for the public?

O'NEIL: Yes, for less money. I think one of the most interesting movies being shown at Sundance right now is the James Bond character, Pierce Brosnan, making more than $10 million a film, now working for lunch money in this little movie called "The Matador," in which he's still a sexual animal, but now he's a bad guy instead of a good guy.

COSTELLO: He's a bad sexual animal. I know you've described him as wearing a Speedo and smoking something.

O'NEIL: That's right, foul-mouthed. But here he's taking an artistic chance, and that's why we love Sundance. It's that little Cinderella town out west. It's like the Las Vegas of filmmaking. Someday, Carol, when you make your movie, you take it to Sundance. It gets discovered. You have a distributor, and you're a glamorous movie star.

COSTELLO: I would love that. I'll just make a movie about this show behind the scenes.

O'NEIL: It's been made. It's called "Network."

COSTELLO: Yes, exactly. Tell us about this movie "Happy Endings," because I'm happy for Lisa Kudrow. She was always my favorite in "Friends."

O'NEIL: Yes. And I think she is really making a breakout at this festival, which opened last night with "Happy Endings" by screenwriter and director Don Roos, who I went to the University of Notre Dame with a few years ago. We put out the student newspaper.

Last year, Don and I were on campus helping to launch a film festival. And Don said, oh, my movie fell apart. Jennifer Aniston -- I mean, Jennifer Garner has backed out of it. Gwyneth Paltrow. In this subsequent year, he's got it made with Maggie Gyllenhaal and Lisa Kudrow and Jason Ritter and a whole big cast. And it's so big it's going to rejuvenate his career, and it opened the festival.

COSTELLO: And maybe Lisa Kudrow's as well. What's it about?

O'NEIL: It's three separate story lines. One of them is very controversial, because it's about two gay men who are accusing two lesbians of stealing their sperm and having a child by them. Lisa plays a counselor at an abortion clinic, who gave up a child at birth. You have swapping babies, slamming doors, confused lives.

COSTELLO: It sounds very interesting, Tom. It really does. I want to talk about one more. How about "Thumbsucker?"

O'NEIL: "Thumbsucker" is Keanu Reeves portraying a doctor, who is trying to get a boy to break this bad habit. It's kind of like the nail story Bill was...

COSTELLO: Now, come on. Keanu Reeves starred in another movie and he portrayed a doctor, and that did not work. That was a big flop. Remember?

O'NEIL: Oh, with Diane Keaton, yes, "Something's Gotta Give." But, you know, he's...

COSTELLO: Well, that movie wasn't a flop. I was thinking of the other movie with Ashley Judd. Remember that?

O'NEIL: No.

COSTELLO: So you don't even remember that and you're a movie watcher.

O'NEIL: I know.

COSTELLO: Well, we look forward to it. And, of course, we'll have updates from you from Sundance. That will be great.

O'NEIL: Sure.

COSTELLO: Tom O'Neil from "In-Touch Weekly" joining DAYBREAK this morning. Thank you.

You're watching DAYBREAK for a Friday morning.

(COMMERCIAL BREAK)

COSTELLO: Monday on DAYBREAK, only four teams remain -- after this weekend, that is. It will be down to two. So who is heading to the Super Bowl? We'll talk about the teams and the talents behind them. That's coming up Monday on DAYBREAK.

And from -- Chad, hi.

CHAD MYERS, CNN METEOROLOGIST: I'm right here. COSTELLO: Can you tell us about the snow again?

MYERS: I just want to see you walk to work in your boots on Monday, Carol. That would be something to see. Anyway, there's going to be a big storm to the Northeast. More details on "AMERICAN MORNING."

COSTELLO: "AMERICAN MORNING" starts right now. Thank you, Chad.

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Aired January 21, 2005 - 06:29   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Good morning to you. Welcome to the last half-hour of DAYBREAK. From the Time Warner center in New York, I'm Carol Costello, along with Chad Myers.
"Now in the News."

At least 14 people are dead following a car bomb attack at a Shiite mosque south of Baghdad. Iraqi police say another 42 people were injured in that attack. The bombing comes on the Muslim holiday that celebrates the traditional end of the hajj pilgrimage.

Palestinian security forces are moving into position in northern Gaza. They're being deployed in an effort to stop attacks on Israeli targets. Israeli had threatened a military offensive if Palestinian leaders took no action.

The Senate vote on the nomination of Condoleezza Rice to be secretary of state is on hold until Wednesday. Democratic senators will get nine hours on Tuesday to debate the nomination.

(WEATHER REPORT)

COSTELLO: Police in Tyler, Texas, are looking for Wal-Mart cashier Megan Holden. She's been missing since Wednesday night, and she may have been abducted.

Take a look at this. The 19-year-old woman and a man suspected of kidnapping her are seen in this store surveillance tape. You see Holden is running in the Wal-Mart parking lot, and she was being chased by a man. He does catch her. He shoves her into her own truck, and then you can see the truck speeding away.

More on this story now from reporter Julie Tam of our affiliate, KLTV, in Tyler, Texas.

Julie, what more can you tell us about this?

JULIE TAM, CNN AFFILIATE KLTV REPORTER: Well, we do have a description of the suspect. Of course, he may not be wearing the same thing. But he is a black male. This is according to the Tyler Police Department. About 5'6 to 5'8, approximately 140 to 145 pounds, 20 to 25 years old. And at the time he had on a black ball cap and a black, short, zip-up type jacket, and then with a red, long shirt inside that, and then inside that a white t-shirt, and also carrying a blue duffel bag. And, of course, officers don't know what was inside that bag, which was the scary thing. COSTELLO: Yes, it was, because you can't really tell if he's using a weapon to abduct this woman, if indeed he did abduct her.

TAM: Right.

COSTELLO: Now, inside the store, he was inside that Wal-Mart store for quite some time. What was he doing?

TAM: Well, exactly. The surveillance cameras first caught him at about 10:11 p.m. on Wednesday night, and he didn't abduct her until an hour and a half later. He was seen loitering around. You know, there you see him outside the front door. He came out of the bathroom and was just walking down the halls, even approached the McDonald's.

You know, he just seemed very brazen, because there were security cameras everywhere. But, of course, the ball cap had helped hide his face, and so it's hard to see what he looks like from the camera.

COSTELLO: Now, she was a cashier. At any point, did he talk to her? Did he go through her line?

TAM: The police would not reveal exactly what they found out from the Wal-Mart employees, but they did question all of them, including some of the customers who think that they saw the man. And, of course, Wal-Mart is not commenting on the case at all. So, we don't know that.

COSTELLO: Give us a description again of the pickup truck.

TAM: The pickup was a 2002 red Ford F-150 sport truck. And, of course, it was Megan's truck, license plate number 6-Victor-Texas- Victor-8-4. And that's what they were seen leaving in. And, of course, helicopters overhead were searching for that. They found no leads yesterday afternoon. That's what they were searching for, assuming that either the pickup truck might be abandoned or maybe the two of them were still in it.

COSTELLO: Has anyone heard from her family?

TAM: Her family yesterday, we tried to get them to talk on- camera to plead, you know, for people to help find her, but they were not willing to talk. But they have talked to police, and they watched the video, said they did not recognize the man at all. Of course, you know, the sketch is rough, and from the video it's hard to tell. But they did not know who this person was. So, apparently it's not someone that the family was aware of. I don't know if Megan knew him or not.

COSTELLO: So, if any of our viewers know anything, please call Tyler, Texas, police. That was Julie Tam of KLTV in Tyler, Texas. And thank you, Julie, for that report.

After a prayer service this morning, it will be back to work on a second term for President Bush. He's laid out an ambitious agenda for his next four years with Social Security reform near the top of the list. But as CNN's Lisa Sylvester reports, even with a Republican House and Senate changes will not be easy.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): House Ways and Means Chairman Bill Thomas predicted that the president's ambitious plan to overhaul Social Security will be rendered a dead horse.

Republicans are increasingly hesitant to get on board because of the cost, both financial and political. The president's proposal to create personal spending accounts for younger workers is running into stiff resistance from the AARP.

THOMAS MANN, BROOKINGS INSTITUTION: He may talk about the political capital he's earned, but that only works if you can intimidate your opponents, people who disagree with you, and persuade them that the country is with you and not them. But Democrats don't believe it, and Republicans are beginning to get very uneasy about it.

SYLVESTER: Mr. Bush's plan to create a guest worker program for illegal aliens may also be dead on arrival. Conservative Republicans are denouncing the president's proposal as a form of amnesty.

Judiciary Committee Chairman James Sensenbrenner, Republican House Majority Leader Tom DeLay and Representative Tom Tancredo, who heads the House Immigration Reform Caucus, are all in opposition.

REP. TOM TANCREDO (R), COLORADO: The momentum has shifted to our side. They are on the defensive. It's the first time it's ever been that way.

SYLVESTER: During the first term, Republicans stood behind the president's plan to lower taxes. This time, with a growing budget deficit, fiscal conservatives are resisting making the tax cuts permanent.

White House spokesman Scott McClellan, when asked about the tough fight ahead on Social Security, acknowledged the political realities.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Legislation, anytime it goes through Congress, tends to change during the process. The president looks forward to working with members to move forward on legislation.

SYLVESTER: As the president begins his second term, he may find his so-called mandate is not enough. He may need some muscle.

(on camera): Congressional analysts think that with a strong majority in the Senate, the president may be able to achieve some quick victories on the stalled energy bill and on tort reform, but even those issues are not a given.

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE) COSTELLO: Well, let's talk about Social Security, because you could call it the Bush push. As Lisa said, the president is wasting no time in getting his agenda out there and pushing Congress. But he and his loyal troops are also taking it to the people.

"The Wall Street Journal" is reporting the president will hit the road to talk to you about his plan for Social Security. He'll be assisted by groups like Progress for America, who have paid for a pro- Bush TV ad campaign. And not only that, Republicans are organizing activists to mail out flyers, call radio talk show hosts, and even to start an e-mail campaign. But will it work?

Let's head live to Washington and Congressman Mark Foley, a Republican from Florida, and Representative Chris Van Hollen, Jr., a Democrat from Maryland.

Welcome to you both.

REP. MARK FOLEY (R), FLORIDA: It's good to be here.

REP. CHRIS VAN HOLLEN (D), MARYLAND: Good morning, Carol.

COSTELLO: Good morning.

Congressman Foley, we just heard that powerful Republican Representative Bill Thomas says it would be wise to broaden the debate over Social Security or it would be a dead issue. Can the president's push change his mind?

FOLEY: There is no question he is persuasive. When the president invests his political capital, he's been able to get extraordinary results. But Mr. Thomas is right on the mark. We're going to have to broaden the debate. We have to include Democrats. Charlie Rangel on Ways and Means and others will be enlisted to at least offer what we hope are positive suggestions to save this very important program.

COSTELLO: Congressman Van Hollen, Democrats have their own ideas about Social Security. But can they fight back against a Republican grassroots push, a push that has proved so successful in the past?

VAN HOLLEN: Well, yes. You know, the president at his inaugural yesterday talked a lot about the importance of freedom. Social Security is a program that has kept millions of American seniors free from poverty and destitution in their old age. And rather than taking that guaranteed benefit away for future retirees, we should be shoring it up and guaranteeing it in the future. And the Democrats are willing to work with the president to do that.

What we're not willing to do is to scare the American people into thinking that the current system needs to be thrown out and radically changed, when, in fact, some adjustments can make sure that the current benefits are there for people in the future.

COSTELLO: But, Congressman, you have the president and the president's men going out with this grassroots effort. How will the Democrats fight back against that specifically?

VAN HOLLEN: Well, the first thing we're going to make it clear to people is that this is not a crisis. The president has tried to manufacture crises. He uses the rhetoric of crisis in order to justify these real radical changes. He's used the word "bankruptcy." That's just not true.

The trustees of Social Security themselves have said that the current trust fund is adequate to cover people up to the year 2042, and beyond that at 75 percent of current benefits. So, we're dealing with trying to fill a gap of 25 percent of current benefits beyond the year 2042.

So, the first thing people need to understand is don't be scared. We can fix this problem.

In the 1980s, Republicans and Democrats got together to fix the problem. It can be done. But it's not a crisis. It's a challenge.

COSTELLO: OK. On that line of thought, if the Democrats and Republicans can get together, Congressman Foley, how split is Congress on this issue? And is the issue likely to slowly die?

FOLEY: Well, let's do the math. In 1935, there were 45 working Americans for every 1 retiree. We're down to 4 to 1, heading to 2 to 1. So, I disagree with my colleague. There is a looming fiscal crisis.

And I also believe that most Americans want to hear positive solutions. The children of the future need to know Social Security will be there. We're not talking about privatizing it. We're trying to stabilize it, secure it, and provide real meaningful reform. That can be done.

Now, if we're going to have a fight between parties, nothing will happen. And that's why I think Bill Thomas and Congressman McCrery, chairman of the subcommittee, have earnestly sought to find suggestions from Democrats. You'll notice very few of them offer anything in the way of what they would do to ensure the security of Social Security.

So, I'm willing to have the debate. I think America is listening. Congressman Crenshaw from Florida had a town hall meeting of 200 seniors last week in Florida. All of the seniors were interested. They weren't rebelling. They weren't throwing taunts or jeers. They were asking him what the plan entailed. And once they heard parts of the plan, they were very interested and listening more to this debate as it unfolds.

But if we simply have a debate about we're scaring America and the president is scaring citizens, then we're not going to get very far.

COSTELLO: All right. Well, thanks to both of you. We could debate this issue for hours. It's so interesting. Congressman Chris Van Hollen, a Democrat from Maryland, Congressman Mark Foley, a Republican from Florida, thank you for joining DAYBREAK this morning.

FOLEY: Thank you, Carol.

VAN HOLLEN: Thank you.

COSTELLO: Back from Washington, "AMERICAN MORNING's" Soledad O'Brien joins us now from her office in New York -- Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: Thanks, Carol. Good morning to you.

COSTELLO: Good morning.

O'BRIEN: Yes, a little chilly out there for the inauguration yesterday, not just for us in the morning, but the folks who camped out and waited for the entire event outdoors, 100,000 or so. Reviews are now coming in for the president's second inaugural address. Liberty and freedom, as you well know, were the big themes of the speech. Some say the address was powerful and aggressive. Others say, though, it was confrontational.

Is promoting global democracy ambitious, or is it just dangerous? This morning, we talk to former Senate Majority leader George Mitchell. We're going to ask him what he thought of the speech and also see what he thought of it in a historical perspective. How does it hold up to other speeches that have been given in the past?

That's ahead this morning, Carol, on "AMERICAN MORNING." We'll see you in about 20 minutes.

COSTELLO: We'll be here. Thank you, Soledad.

You are watching DAYBREAK for a Friday.

(COMMERCIAL BREAK)

COSTELLO: Do you ever feel that no matter how much money you make you just can't seem to get ahead? It could be that inflation is eating up your extra cash. Inflation.

DAYBREAK contributor Ali Velshi is back with some insights.

Inflation?

ALI VELSHI, CNN DAYBREAK CONTRIBUTOR: It's going to rock.

COSTELLO: This report is going to rock.

VELSHI: Carol needs a little nap, because I'm going to talk to you for a few minutes about inflation.

All right, here it is. Yesterday, we had the inflation numbers for 2004 come up, the CPI number, Consumer Price Index, coming in at 3.3 percent for the year 2004. This is where all of the fun starts.

Now, if you track inflation since, you know, the early 1900s, we are looking at a little more than 3 percent a year of inflation. Things cost that much more year over year.

It's a calculation of a basket of goods that the Bureau of Labor Statistics puts together. And they've done a lot of studies of this. They have families track what they buy for two years in a little diary. And they've figured out what the average family comes out to use every year. And they create this basket upon which they base their inflation numbers.

Let me show you what's in the basket. Food and beverages is about 16 percent of the basket, or the pie chart as we have. Housing is about 41 percent. Apparel, clothing, 4 percent. Transport, 17 percent. And it goes like that. Medical care, recreation, goods and services.

Now, as you can see, housing is the biggest chunk. Transport and food -- food and energy as we like to refer to it -- are the second biggest chunks.

Now, when you calculate inflation, food and energy tend to be the most volatile parts. They're the ones that go up and down, because seasonally it's different and commodities are affected by the weather. And oil prices, as you know, go up and down.

So, historically, they take those two elements out and track the rest of it, because the other stuff stays relatively steady. So, that's why over the years you've got, you know, inflation goes up, but it's not too much.

The problem is you can't take food and energy out of your expenses.

COSTELLO: No.

VELSHI: So, your basket doesn't necessarily represent that basket. So, you may not be too alarmed. You're sitting there saying, all right, 3 percent a year, I can live with that. But it's not 3 percent for you. It could be 10 percent. It could be 11 percent if you drive, you heat a home.

Take a look at energy prices and how they affected inflation last year. Home heating oil, 39.5 percent higher.

COSTELLO: Wow!

VELSHI: Take a look at gasoline: 26.1 percent higher. And natural gas for heating your home, 16.4 percent higher. So, the energy component of inflation was up 16 percent. So, if you consume a lot of energy, your inflation rate is higher. If you have kids in college, your inflation rate is higher, because education costs are higher. Health care costs were higher. So, you could be up at 7 or 8 percent.

COSTELLO: So the bottom line is that you'll just never get ahead. So forget it!

VELSHI: The bottom line is you've got to think of it, even if you don't think about losing money, you've got to realize that inflation just eats up a piece of your money. So, if your money is sitting in a bank account earning 2.25 percent, you are still behind. Wages have gone up on average 2.5 percent in the last year.

COSTELLO: Oh, it's so depressing. Thanks for waking me up, though.

VELSHI: Exactly.

COSTELLO: Ali Velshi, many thanks to you.

We're going to check in with Chad one more time, because he's been talking about this big weekend storm, and it's going to be wicked.

(WEATHER REPORT)

COSTELLO: Stars and Hollywood dealmakers are in Utah this week for the Sundance Film Festival. We have all of the juicy details for you right after our break.

(COMMERCIAL BREAK)

COSTELLO: A cab driver asked me about Bill Hemmer, asked if he was back from Washington. And yes, indeed, he is. And he is here to tell us about the latest "New You" series. And I shouldn't really bite my nails in anticipation of this.

BILL HEMMER, CNN ANCHOR: No. We've been waiting for this story all week, in fact. I think it's one of the more unique things we've ever done on "AMERICAN MORNING" actually, Carol.

Day five of the "New You Revolution" today, we're going to talk to a habitual nail biter. It might sound like just a bad habit, but for people like Jonathan Karp, it can lead to serious health problems. Dr. Sanjay Gupta has this story. He talks about the risks and talks about putting a plan into action for young Jonathan.

So, swallow hard, Carol. Have a great weekend.

COSTELLO: Does it involve putting, like, cayenne pepper under your nails?

HEMMER: You know, actually, he was with us on Monday introducing -- well, is it a syndrome he has, or his condition that he has? We'll leave it at that. He says sometimes they would put hot sauce on his fingernails to make sure that he does not chew on them. And it did not work. He's tried everything. And he's got little, little stubs down here, Carol, right down to the cuticle. Are you grossed out yet?

COSTELLO: I'm pretty grossed out. I'm thinking about those little stubs right now.

HEMMER: Yes.

COSTELLO: Thank you, Bill. We'll see you... HEMMER: Enjoy the weekend.

COSTELLO: I will.

HEMMER: All right.

COSTELLO: We'll see you in seven minutes.

The Sundance Film Festival is under way now in Park City, Utah. And who better than Tom O'Neil of "In-Touch Weekly" to tell us all about it?

It's pretty exciting this year.

TOM O'NEIL, EDITOR, "IN-TOUCH WEEKLY": It really is. A lot of A-list stars are trying to re-enter the business now and redefine their careers. And the...

COSTELLO: Do you mean by making better movies and more interesting fare for the public?

O'NEIL: Yes, for less money. I think one of the most interesting movies being shown at Sundance right now is the James Bond character, Pierce Brosnan, making more than $10 million a film, now working for lunch money in this little movie called "The Matador," in which he's still a sexual animal, but now he's a bad guy instead of a good guy.

COSTELLO: He's a bad sexual animal. I know you've described him as wearing a Speedo and smoking something.

O'NEIL: That's right, foul-mouthed. But here he's taking an artistic chance, and that's why we love Sundance. It's that little Cinderella town out west. It's like the Las Vegas of filmmaking. Someday, Carol, when you make your movie, you take it to Sundance. It gets discovered. You have a distributor, and you're a glamorous movie star.

COSTELLO: I would love that. I'll just make a movie about this show behind the scenes.

O'NEIL: It's been made. It's called "Network."

COSTELLO: Yes, exactly. Tell us about this movie "Happy Endings," because I'm happy for Lisa Kudrow. She was always my favorite in "Friends."

O'NEIL: Yes. And I think she is really making a breakout at this festival, which opened last night with "Happy Endings" by screenwriter and director Don Roos, who I went to the University of Notre Dame with a few years ago. We put out the student newspaper.

Last year, Don and I were on campus helping to launch a film festival. And Don said, oh, my movie fell apart. Jennifer Aniston -- I mean, Jennifer Garner has backed out of it. Gwyneth Paltrow. In this subsequent year, he's got it made with Maggie Gyllenhaal and Lisa Kudrow and Jason Ritter and a whole big cast. And it's so big it's going to rejuvenate his career, and it opened the festival.

COSTELLO: And maybe Lisa Kudrow's as well. What's it about?

O'NEIL: It's three separate story lines. One of them is very controversial, because it's about two gay men who are accusing two lesbians of stealing their sperm and having a child by them. Lisa plays a counselor at an abortion clinic, who gave up a child at birth. You have swapping babies, slamming doors, confused lives.

COSTELLO: It sounds very interesting, Tom. It really does. I want to talk about one more. How about "Thumbsucker?"

O'NEIL: "Thumbsucker" is Keanu Reeves portraying a doctor, who is trying to get a boy to break this bad habit. It's kind of like the nail story Bill was...

COSTELLO: Now, come on. Keanu Reeves starred in another movie and he portrayed a doctor, and that did not work. That was a big flop. Remember?

O'NEIL: Oh, with Diane Keaton, yes, "Something's Gotta Give." But, you know, he's...

COSTELLO: Well, that movie wasn't a flop. I was thinking of the other movie with Ashley Judd. Remember that?

O'NEIL: No.

COSTELLO: So you don't even remember that and you're a movie watcher.

O'NEIL: I know.

COSTELLO: Well, we look forward to it. And, of course, we'll have updates from you from Sundance. That will be great.

O'NEIL: Sure.

COSTELLO: Tom O'Neil from "In-Touch Weekly" joining DAYBREAK this morning. Thank you.

You're watching DAYBREAK for a Friday morning.

(COMMERCIAL BREAK)

COSTELLO: Monday on DAYBREAK, only four teams remain -- after this weekend, that is. It will be down to two. So who is heading to the Super Bowl? We'll talk about the teams and the talents behind them. That's coming up Monday on DAYBREAK.

And from -- Chad, hi.

CHAD MYERS, CNN METEOROLOGIST: I'm right here. COSTELLO: Can you tell us about the snow again?

MYERS: I just want to see you walk to work in your boots on Monday, Carol. That would be something to see. Anyway, there's going to be a big storm to the Northeast. More details on "AMERICAN MORNING."

COSTELLO: "AMERICAN MORNING" starts right now. Thank you, Chad.

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