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CNN Live At Daybreak

Interview With Congressman Adam Schiff; 'America's Voice'

Aired February 01, 2005 - 06:30   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. 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."

Pop icon Michael Jackson returns to a California courtroom in six hours for the second day of jury selection. Only one person was dismissed during the first day. The trial is expected to last up to six months.

Attorneys for defrocked priest Paul Shanley are expected to only call one witness in his child molestation trial. The prosecution wrapped up its case yesterday. An expert in repressed memory is expected to testify when court resumes tomorrow or Thursday.

In the Himalayan kingdom of Nepal, the king has fired the government and declared a state of emergency. Troops are now patrolling the streets of the capital. Phone lines there have been cut.

More than a month after the earthquake and tsunamis destroyed parts of Southeast Asia, new pictures have surfaced. Some show people being fished out of the water and perched in trees. As of this morning, the death toll is at more than 154,000 in the region, but thousands more are still missing.

(WEATHER REPORT)

COSTELLO: There is more post-election violence in Iraq this morning. A bomb explodes in the northern Iraqi town of Erbil. It happened outside of the home of a top Kurdish political official who has been the target of attacks before. Two guards who tried to remove the bombs were killed.

But let's talk about that election. It's an image imprinted on many of our minds: Iraqis dancing joyously in the streets after casting ballots in a new burgeoning democracy.

President Bush will surely bring the image to mind in his State of the Union address on Wednesday. Democrats will have the tough political job of rebutting the president's speech. Perhaps that's why they're talking now.

Let's head live to Washington and Congressman Adam Schiff, a Democrat from California. He serves on the House International Relations Committee. Welcome.

REP. ADAM SCHIFF (D), CALIFORNIA: Carol, welcome to you, and good morning.

COSTELLO: Good morning. Congresswoman Nancy Pelosi and Senator Harry Reid delivered the Democratic pre-buttal before the National Press Club yesterday. But why didn't they wait until after the president's State of the Union as usual?

SCHIFF: Well, actually there's a new tradition of offering the pre-buttal. Every side wants to get out their message as quickly as they can. So, both Harry Reid and Nancy Pelosi got out early and tried to articulate the Democratic message.

And I think what Democrats really want to hear from the president is how are we going to build upon this really remarkable election in Iraq. And it was a wonderful, wonderful election. We were all, I think, delighted to see Iraqis turn out in relatively high numbers at the risk of their own lives. It's really a tribute to the Iraqi people.

And more importantly, it's a tribute to the American soldiers that are out there in harm's way every day. They did an incredible job in securing that country so elections could take place. And...

COSTELLO: And on the topic of soldiers and our troops over there, one of the topics touched on in the pre-buttal is troop strength in Iraq. Let's listen to Senator Reid.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), SENATE MINORITY LEADER: Because this administration's policies have left our troops stretched too thin and shouldering far too much the burden, we need to add to our troop levels. We need to do this by making sure that our people, our military, have enough soldiers to do the job, both in Iraq and around the world in our war on terror. What this means is increasing our Army and Marines by at least 40,000 troops over the next two years.

(END VIDEO CLIP)

COSTELLO: Now, that comment comes at a time after those wonderful Iraqi elections. And many say it's time to reduce troops in Iraq. Forty thousand, really?

SCHIFF: I think actually Senator Reid is exactly right. And what we're talking about is increasing the overall troop strength of the American armed forces, not necessarily the troops in Iraq.

The problem is that we are putting such a strain on our Guard and Reserves that are being called up time and time again. The Guard and Reservists are really becoming regulars in the military forces. That was not their expectation. A lot are being taken away from their jobs, from their families, for extended periods. And, unfortunately, we have the Army very close to a breaking point. We're already seeing real trouble with the recruitment and retention. When we generally have people that are leaving the active duty, they often will join the Reserves and the Guards.

COSTELLO: So, where do you find...

SCHIFF: But they're not joining in the same numbers.

COSTELLO: So, where do you find 40,000 more troops? Where do you find these people?

SCHIFF: Well, we're going to have to do aggressive recruiting and incentive programs to attract new people to come into the service. But this, I think, extraordinarily important. I would go beyond. I think we probably need to add closer to 25,000 troops a year for several years just to keep up with the commitments that we've undertaken.

But I think also Senator Reid in his speech talked about the need for the president to really develop a clear plan for how are we going to train-up, stand up the Iraqi military forces.

When I was in Iraq and met with General Portrais (ph), who at the time was in charge of that effort, it looked promising. But those promises haven't been kept. We haven't been able to bring those troops up to strength, and that's the key ultimately to our being able to leave Iraq.

COSTELLO: Well, you have to admit, though, they did pretty darn good during the elections, because the Iraqis were the ones at the polling stations closest to them.

SCHIFF: Well, the elections were wonderful. But, you know, it's very important that we not have another mission accomplished moment, where we think that the war is essentially over, the political struggle has ended, as we saw in the bombing that you just reported from Erbil. The violence goes on. It's likely to continue.

And I think we've missed a great opportunity the first time the president declared mission accomplished not to bring the rest of the world in, not to really internationalize the work in Iraq.

We had a wonderful election on Saturday in Iraq. Let's use the momentum of that election, not only to bring all of the parties in Iraq together -- the Sunnis, the Shiites, the Kurds and others -- but also to bring the nations of the world back together into playing a positive and a constructive role in Iraq. This really ought to be a great opportunity to bring the world together and bring Iraq back together.

COSTELLO: All right, Congressman Schiff, thank you for joining DAYBREAK this morning. We appreciate it.

SCHIFF: You're welcome. Thank you, Carol. COSTELLO: With the elections in Iraq behind us, I'll bet you're wondering when the troops will start to come home. We touched on that a little bit in the interview with Congressman Schiff.

CNN's Bill Hemmer joins us now from his New York office with a look at the coverage ahead on "AMERICAN MORNING."

Good morning -- Bill.

BILL HEMMER, CNN ANCHOR: Hey, Carol. Yes, we started talking a little bit about this yesterday. There is now word of a potential shift in strategy for U.S. forces and how they will work and integrate with the Iraqi forces and a new plan that may expedite a return for thousands.

We'll talk to a reporter fresh from Iraq. She works with "U.S. News & World Report" and spent 10 days on the ground. You remember Gary Luck (ph), Carol? The gentleman's name came up about a week ago about the advice that he was giving the U.S. military after his time in Iraq. She was with him. So, she'll tell us her story and the headline that we will be reading in her article sometime very soon.

It's part of our three-hour show today, Carol, on "AMERICAN MORNING."

COSTELLO: All right, thank you, Bill.

Let's talk about money now. Federal policymakers are meeting today and tomorrow, and they could announce another interest rate hike. What's worse? Inflation or higher rates? How is the economy treating you?

Gallup Poll's Frank Newport is listening to "America's Voice." He joins us live now from Princeton, New Jersey.

Good morning, Frank.

FRANK NEWPORT, GALLUP POLL EDITOR-IN-CHIEF: Good morning, Carol.

This is a new question we just started asking -- just releasing right now -- the American public: What's the biggest financial problem facing your family, not the country, but your family?

Here are the results we got: Interestingly, health care costs by 1 point the No. 1 issue facing Americans today, too much debt, cost of living, unemployment, and college expenses.

Look at some differences by demographic groups, which we found interesting. First off, these are the youngest Americans, the oldest. If you're young, 18 to 29, it's debt. See that taller column over there? That's what they worry about. But, boy, if you're an older American, 50 and over, health care costs, health care costs, health care costs. That's your big financial problem.

Also, by income, we wondered, what do rich people worry about, $100,000 or more? Interestingly, it's college costs. That's what they tell us. If you're poor, that is under $20,000 a year, overwhelmingly 18 percent say it is health care costs. So, you can't really get away from the fact that that's a big issue facing American families today -- Carol.

COSTELLO: Interesting. Changing the subject a little. President Bush is polishing his State of the Union address for tomorrow night. Are Americans satisfied with the direction of the country?

NEWPORT: Well, let's break it down into components. We gave Americans a long list of items just recently and said, which one are you satisfied with? Here are the top ones. Bush presumably tomorrow night can say these are the things that are going better for Americans: military strength, security from terrorism, race relations, America's role in the world and gun laws.

Here is, however, the problem. These are the things Americans are least satisfied with, based on our list: gay and lesbian relations. Americans are not as happy with the way that's going in America today. Social Security. He'll certainly touch on that, we know that. Immigration. Poverty. There it is again, Carol. Least satisfied: affordable health care. We can't get away from that issue, a big problem.

COSTELLO: Interesting. We've talked a lot about red states and blue states. So, which states have the highest concentrations of Republicans and Democrats?

NEWPORT: Well, we analyzed over 37,000 interviews, Carol. We did last year. And now we can reveal to you. Here are the most Republican states in the country. If you guess Utah, believe it or not, that has more Republicans in it on a percentage basis than any other state, slightly more than Idaho, its neighboring state, Kansas, Wyoming and then Bush's state of Texas.

The bluest states, which ones have the highest concentrations of Democrats? The District of Columbia, not surprising. Beyond that? Massachusetts, Vermont, Rhode Island, and New York.

COSTELLO: No surprises there. Frank Newport, thank you for the interesting numbers this morning.

Dozens of cheering fans and a pop star dressed in white and wearing jewels. It wasn't a concert. It was the opening day of jury selection in Michael Jackson's trial on child molestation charges. Jackson appeared upbeat as he arrived at a California courthouse, and he even shook hands with the court clerk.

In the meantime, his fans defended Jackson in their own way.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I first met Michael overseas in the U.K. and different countries. And I'm very proud to do what I do. And I'm very proud to be a Michael Jackson fan and to support him today. UNIDENTIFIED MALE: I think he's like as big as a musician gets, you know. And then America has this tendency to, like, build people up and break them down. And they can't break him down, so they're just kind of, like, stuck on that and trying to. It's not going to work.

(END VIDEO CLIP)

COSTELLO: Dozens more jurors -- potential jurors, I should say, will be screened today. Seating a jury could take a month or more.

It was just one basket and one game, but these kids are unlikely to see anything like it again. We'll show you this amazing shot. You won't believe it. Actually, you will, because you're going to see it.

But first, here's a look at what else is making news this Tuesday morning.

(COMMERCIAL BREAK)

COSTELLO: Your news, money, weather and sports. It is 6:45 Eastern. Here's what's all new this morning.

All of the ballots in Iraq have been counted by hand. Now, election workers are sending those numbers to Baghdad, where they will be entered into computers. Partial results could come tonight, but official numbers could take up to 10 days.

A man who ran a Georgia crematory gets 12 years in prison for dumping more than 300 bodies around his property. At his sentencing, Ray Brentmarsh (ph) didn't say why he did it, but he did say he was sorry.

In money news, a little more breathing room for Social Security. Analysts at the Congressional Budget Office now say the system will start losing money in 2020, and that's a full two years later than they first estimated.

In culture, Keanu Reeves will have people walking all over him, but he won't mind. The star of "The Maxtrix" movies has gotten a star on the Hollywood Walk of Fame.

And in sports, the Philadelphia 76ers beat the Indiana Pacers 89- 88 to move into first place in the Atlantic Division. Allan Iverson (ph) returned from a three-game absence, and he scored 27 points.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you this morning.

It's rising up to the fight against the low-carb diet fad. Just ahead, what the bread industry is doing to win back popularity. We'll be right back.

(COMMERCIAL BREAK) COSTELLO: It's time now for a little "Business Buzz." The popularity of low-carb diets really hurt the bread industry. But now, those companies are spending some dough to preach the benefits of bread.

Carrie Lee live at the Nasdaq Marketsite with more puns.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Spending money, spending dough. I like it, Carol.

Bread is essential. That's what the slogan is here from the Grains Food Foundation. The launching of big ad campaigns, spending $3.5 million to promote grains and bread as part of a healthy diet; this, after last year's low-carb fad. The bread industry is now hoping for a comeback.

So, this "grains for life" campaign is going to be announced in New York and Washington with billboards, posters and people dancing in bread costumes. A lot of freelance actors are probably lining up for that, at least here in New York.

This comes three weeks after the government issued guidelines calling for adults to have three one-ounce servings of whole grains a day.

And a study from the MPD Group -- this is an independent marketing company -- found that the low-carb diet hit a peak last February, 9.1 percent of American adults were on that kind of diet, and that fell to 3.6 percent by mid-November.

So, now the bread industry is saying it's the calories, not the carbs, that are important. We'll see if it works.

COSTELLO: You know, I just can't wait to see the people dancing in bread costumes, because I'm sure that it will bring consumers back.

LEE: It's probably going to get people's attention. I'm just envisioning somebody kind of enveloped in a giant hot dog bun. I don't know. We'll see if they come to Times Square at all. We'll take some pictures and send them to you.

COSTELLO: We would love that. A quick look at the futures.

LEE: Yes. Things are looking a little bit weak for today's session; this, after the Dow finished the month of January down 2.7 percent.

Walt Disney could be a stock to watch today, out with profits last night. The stock gained a little bit of ground. They came in well ahead of the Wall Street estimate on profits. The ESPN Network helped. Theme park business helped. And ABC has those hits we all know about -- "Desperate Housewives" and "Lost" -- helping results as well.

So, it could be a good move for today -- Carol.

COSTELLO: Carrie Lee live at the Nasdaq Marketsite. Thank you.

In news across America this morning, Oregon lawmakers are re- thinking their security after a man burst into the State Senate holding a butcher knife. Boyd Owens (ph) held a knife to his own chest and demanded to see the governor. There were no injuries in the end. Owens is now undergoing a mental evaluation. He's been charged with criminal mischief, menacing and disorderly conduct.

A North Carolina medical examiner faces discipline after pronouncing an accident victim dead when he wasn't. Two paramedics have already been fired over the incident. A report from Franklin County investigators found that Dr. J.D. Purdue (ph) ignored paramedics when they thought that Larry Green (ph) was still alive. Green (ph) remains in critical condition.

A controversial University of Colorado professor has stepped down as head of the school's ethics studies department. Ward Churchill made news when he compared the 9/11 victims of the World Trade Center to Nazis. He also referred to the -- quote -- "gallant sacrifices made by the attackers." Many 9/11 families are protesting his upcoming speaking engagement at Hamilton College in New York.

And, Chad, do you remember last week when we talked about that semester-at-sea ship that was tossed around the coast of Alaska?

CHAD MYERS, CNN METEOROLOGIST: It came out of Vancouver and was headed to Korea, and actually got hit by a huge rogue wave south of Alaska, right.

COSTELLO: A 50-foot wave. Well, we have some new pictures showing just how rough it was for those poor college students. This is inside the ship. Oh, my gosh! As you said, bad weather and that big wave, it actually damaged the ship's engine.

MYERS: It did. It actually damaged three of the four. And, in fact, the wave came over the bow far enough that it actually went right through the wheel house and broke some of the windows there. Obviously, they already knew. This was after the first wave hit. They put on their -- they went out to the muster (ph) stations and got their life preservers on.

But look at how that -- people are sliding across the floor as this thing is just going back and forth as the waves hit from one side to another.

And because they only had one engine to run on at that point, they couldn't steer the boat really into the ship right into the waves, like you would like to take them on the bow. They were actually taking them on the beam, which made the ride even worse.

COSTELLO: It's amazing the ship didn't capsize.

MYERS: Yes.

COSTELLO: But, I mean, it was a huge, gigantic ship.

MYERS: Right. This was 100-day cruise for the semester at sea. But they did get to Honolulu yesterday for repairs.

COSTELLO: Yes. And I believe that some of those kids will be joining Bill and Soledad on "AMERICAN MORNING"...

MYERS: Oh, great.

COSTELLO: ... to get the story straight from the horse's mouth, so to speak. And, of course, that's coming up in just a few minutes here on CNN.

We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: All right, Chad, it's time to check out some amazing pictures.

MYERS: Oh.

COSTELLO: On paper it just looks like a 2-point win. But, oh, no, in person it's incredible. Not that. It's coming up. Guilford College player Jordan Snipes (ph) grabbed a rebound in overtime. And look at what he did with it. This is a game against Randolph Macon (ph). He heaved the ball 92 feet, in case you're interested. And as you can see, it went.

MYERS: It left his fingers. If you look at the clock, it left his fingers there with .2 on the clock, and obviously zero by the time it got there. But that's a 3-point shot, Carol.

COSTELLO: It certainly is. The improbable shot left the players from both teams shocked and awed.

MYERS: OK.

COSTELLO: I just had to add that line.

MYERS: OK.

COSTELLO: Looking at the headlines this morning, there's an interesting story in "The Washington Post." It says, the headline is, "Brain Immaturity Could Explain Teen Crash Rate." Apparently, in a study done by the NIH, risk-taking diminishes at the age of 25. It was previously thought it took place at the age of 18.

The reason this is important, Chad, is...

MYERS: Because your insurance rate goes down when you're 25.

COSTELLO: That's true. And that's one of the reasons for that. But there are two laws in the Washington area that kind of cites brain development research in proposing them. One is in Virginia, and it bans cell phone use for drivers younger than 18 years old. The other one is in Maryland, and it bans more than one teenager in the car at the same time.

So there you have it.

MYERS: All right.

COSTELLO: If you're interested, WashingtonPost.com.

MYERS: There you go.

COSTELLO: From the Time Warner center in New York, I'm Carol Costello, along with Chad Myers. "AMERICAN MORNING" starts right now.

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Aired February 1, 2005 - 06:30   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. 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."

Pop icon Michael Jackson returns to a California courtroom in six hours for the second day of jury selection. Only one person was dismissed during the first day. The trial is expected to last up to six months.

Attorneys for defrocked priest Paul Shanley are expected to only call one witness in his child molestation trial. The prosecution wrapped up its case yesterday. An expert in repressed memory is expected to testify when court resumes tomorrow or Thursday.

In the Himalayan kingdom of Nepal, the king has fired the government and declared a state of emergency. Troops are now patrolling the streets of the capital. Phone lines there have been cut.

More than a month after the earthquake and tsunamis destroyed parts of Southeast Asia, new pictures have surfaced. Some show people being fished out of the water and perched in trees. As of this morning, the death toll is at more than 154,000 in the region, but thousands more are still missing.

(WEATHER REPORT)

COSTELLO: There is more post-election violence in Iraq this morning. A bomb explodes in the northern Iraqi town of Erbil. It happened outside of the home of a top Kurdish political official who has been the target of attacks before. Two guards who tried to remove the bombs were killed.

But let's talk about that election. It's an image imprinted on many of our minds: Iraqis dancing joyously in the streets after casting ballots in a new burgeoning democracy.

President Bush will surely bring the image to mind in his State of the Union address on Wednesday. Democrats will have the tough political job of rebutting the president's speech. Perhaps that's why they're talking now.

Let's head live to Washington and Congressman Adam Schiff, a Democrat from California. He serves on the House International Relations Committee. Welcome.

REP. ADAM SCHIFF (D), CALIFORNIA: Carol, welcome to you, and good morning.

COSTELLO: Good morning. Congresswoman Nancy Pelosi and Senator Harry Reid delivered the Democratic pre-buttal before the National Press Club yesterday. But why didn't they wait until after the president's State of the Union as usual?

SCHIFF: Well, actually there's a new tradition of offering the pre-buttal. Every side wants to get out their message as quickly as they can. So, both Harry Reid and Nancy Pelosi got out early and tried to articulate the Democratic message.

And I think what Democrats really want to hear from the president is how are we going to build upon this really remarkable election in Iraq. And it was a wonderful, wonderful election. We were all, I think, delighted to see Iraqis turn out in relatively high numbers at the risk of their own lives. It's really a tribute to the Iraqi people.

And more importantly, it's a tribute to the American soldiers that are out there in harm's way every day. They did an incredible job in securing that country so elections could take place. And...

COSTELLO: And on the topic of soldiers and our troops over there, one of the topics touched on in the pre-buttal is troop strength in Iraq. Let's listen to Senator Reid.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), SENATE MINORITY LEADER: Because this administration's policies have left our troops stretched too thin and shouldering far too much the burden, we need to add to our troop levels. We need to do this by making sure that our people, our military, have enough soldiers to do the job, both in Iraq and around the world in our war on terror. What this means is increasing our Army and Marines by at least 40,000 troops over the next two years.

(END VIDEO CLIP)

COSTELLO: Now, that comment comes at a time after those wonderful Iraqi elections. And many say it's time to reduce troops in Iraq. Forty thousand, really?

SCHIFF: I think actually Senator Reid is exactly right. And what we're talking about is increasing the overall troop strength of the American armed forces, not necessarily the troops in Iraq.

The problem is that we are putting such a strain on our Guard and Reserves that are being called up time and time again. The Guard and Reservists are really becoming regulars in the military forces. That was not their expectation. A lot are being taken away from their jobs, from their families, for extended periods. And, unfortunately, we have the Army very close to a breaking point. We're already seeing real trouble with the recruitment and retention. When we generally have people that are leaving the active duty, they often will join the Reserves and the Guards.

COSTELLO: So, where do you find...

SCHIFF: But they're not joining in the same numbers.

COSTELLO: So, where do you find 40,000 more troops? Where do you find these people?

SCHIFF: Well, we're going to have to do aggressive recruiting and incentive programs to attract new people to come into the service. But this, I think, extraordinarily important. I would go beyond. I think we probably need to add closer to 25,000 troops a year for several years just to keep up with the commitments that we've undertaken.

But I think also Senator Reid in his speech talked about the need for the president to really develop a clear plan for how are we going to train-up, stand up the Iraqi military forces.

When I was in Iraq and met with General Portrais (ph), who at the time was in charge of that effort, it looked promising. But those promises haven't been kept. We haven't been able to bring those troops up to strength, and that's the key ultimately to our being able to leave Iraq.

COSTELLO: Well, you have to admit, though, they did pretty darn good during the elections, because the Iraqis were the ones at the polling stations closest to them.

SCHIFF: Well, the elections were wonderful. But, you know, it's very important that we not have another mission accomplished moment, where we think that the war is essentially over, the political struggle has ended, as we saw in the bombing that you just reported from Erbil. The violence goes on. It's likely to continue.

And I think we've missed a great opportunity the first time the president declared mission accomplished not to bring the rest of the world in, not to really internationalize the work in Iraq.

We had a wonderful election on Saturday in Iraq. Let's use the momentum of that election, not only to bring all of the parties in Iraq together -- the Sunnis, the Shiites, the Kurds and others -- but also to bring the nations of the world back together into playing a positive and a constructive role in Iraq. This really ought to be a great opportunity to bring the world together and bring Iraq back together.

COSTELLO: All right, Congressman Schiff, thank you for joining DAYBREAK this morning. We appreciate it.

SCHIFF: You're welcome. Thank you, Carol. COSTELLO: With the elections in Iraq behind us, I'll bet you're wondering when the troops will start to come home. We touched on that a little bit in the interview with Congressman Schiff.

CNN's Bill Hemmer joins us now from his New York office with a look at the coverage ahead on "AMERICAN MORNING."

Good morning -- Bill.

BILL HEMMER, CNN ANCHOR: Hey, Carol. Yes, we started talking a little bit about this yesterday. There is now word of a potential shift in strategy for U.S. forces and how they will work and integrate with the Iraqi forces and a new plan that may expedite a return for thousands.

We'll talk to a reporter fresh from Iraq. She works with "U.S. News & World Report" and spent 10 days on the ground. You remember Gary Luck (ph), Carol? The gentleman's name came up about a week ago about the advice that he was giving the U.S. military after his time in Iraq. She was with him. So, she'll tell us her story and the headline that we will be reading in her article sometime very soon.

It's part of our three-hour show today, Carol, on "AMERICAN MORNING."

COSTELLO: All right, thank you, Bill.

Let's talk about money now. Federal policymakers are meeting today and tomorrow, and they could announce another interest rate hike. What's worse? Inflation or higher rates? How is the economy treating you?

Gallup Poll's Frank Newport is listening to "America's Voice." He joins us live now from Princeton, New Jersey.

Good morning, Frank.

FRANK NEWPORT, GALLUP POLL EDITOR-IN-CHIEF: Good morning, Carol.

This is a new question we just started asking -- just releasing right now -- the American public: What's the biggest financial problem facing your family, not the country, but your family?

Here are the results we got: Interestingly, health care costs by 1 point the No. 1 issue facing Americans today, too much debt, cost of living, unemployment, and college expenses.

Look at some differences by demographic groups, which we found interesting. First off, these are the youngest Americans, the oldest. If you're young, 18 to 29, it's debt. See that taller column over there? That's what they worry about. But, boy, if you're an older American, 50 and over, health care costs, health care costs, health care costs. That's your big financial problem.

Also, by income, we wondered, what do rich people worry about, $100,000 or more? Interestingly, it's college costs. That's what they tell us. If you're poor, that is under $20,000 a year, overwhelmingly 18 percent say it is health care costs. So, you can't really get away from the fact that that's a big issue facing American families today -- Carol.

COSTELLO: Interesting. Changing the subject a little. President Bush is polishing his State of the Union address for tomorrow night. Are Americans satisfied with the direction of the country?

NEWPORT: Well, let's break it down into components. We gave Americans a long list of items just recently and said, which one are you satisfied with? Here are the top ones. Bush presumably tomorrow night can say these are the things that are going better for Americans: military strength, security from terrorism, race relations, America's role in the world and gun laws.

Here is, however, the problem. These are the things Americans are least satisfied with, based on our list: gay and lesbian relations. Americans are not as happy with the way that's going in America today. Social Security. He'll certainly touch on that, we know that. Immigration. Poverty. There it is again, Carol. Least satisfied: affordable health care. We can't get away from that issue, a big problem.

COSTELLO: Interesting. We've talked a lot about red states and blue states. So, which states have the highest concentrations of Republicans and Democrats?

NEWPORT: Well, we analyzed over 37,000 interviews, Carol. We did last year. And now we can reveal to you. Here are the most Republican states in the country. If you guess Utah, believe it or not, that has more Republicans in it on a percentage basis than any other state, slightly more than Idaho, its neighboring state, Kansas, Wyoming and then Bush's state of Texas.

The bluest states, which ones have the highest concentrations of Democrats? The District of Columbia, not surprising. Beyond that? Massachusetts, Vermont, Rhode Island, and New York.

COSTELLO: No surprises there. Frank Newport, thank you for the interesting numbers this morning.

Dozens of cheering fans and a pop star dressed in white and wearing jewels. It wasn't a concert. It was the opening day of jury selection in Michael Jackson's trial on child molestation charges. Jackson appeared upbeat as he arrived at a California courthouse, and he even shook hands with the court clerk.

In the meantime, his fans defended Jackson in their own way.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I first met Michael overseas in the U.K. and different countries. And I'm very proud to do what I do. And I'm very proud to be a Michael Jackson fan and to support him today. UNIDENTIFIED MALE: I think he's like as big as a musician gets, you know. And then America has this tendency to, like, build people up and break them down. And they can't break him down, so they're just kind of, like, stuck on that and trying to. It's not going to work.

(END VIDEO CLIP)

COSTELLO: Dozens more jurors -- potential jurors, I should say, will be screened today. Seating a jury could take a month or more.

It was just one basket and one game, but these kids are unlikely to see anything like it again. We'll show you this amazing shot. You won't believe it. Actually, you will, because you're going to see it.

But first, here's a look at what else is making news this Tuesday morning.

(COMMERCIAL BREAK)

COSTELLO: Your news, money, weather and sports. It is 6:45 Eastern. Here's what's all new this morning.

All of the ballots in Iraq have been counted by hand. Now, election workers are sending those numbers to Baghdad, where they will be entered into computers. Partial results could come tonight, but official numbers could take up to 10 days.

A man who ran a Georgia crematory gets 12 years in prison for dumping more than 300 bodies around his property. At his sentencing, Ray Brentmarsh (ph) didn't say why he did it, but he did say he was sorry.

In money news, a little more breathing room for Social Security. Analysts at the Congressional Budget Office now say the system will start losing money in 2020, and that's a full two years later than they first estimated.

In culture, Keanu Reeves will have people walking all over him, but he won't mind. The star of "The Maxtrix" movies has gotten a star on the Hollywood Walk of Fame.

And in sports, the Philadelphia 76ers beat the Indiana Pacers 89- 88 to move into first place in the Atlantic Division. Allan Iverson (ph) returned from a three-game absence, and he scored 27 points.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you this morning.

It's rising up to the fight against the low-carb diet fad. Just ahead, what the bread industry is doing to win back popularity. We'll be right back.

(COMMERCIAL BREAK) COSTELLO: It's time now for a little "Business Buzz." The popularity of low-carb diets really hurt the bread industry. But now, those companies are spending some dough to preach the benefits of bread.

Carrie Lee live at the Nasdaq Marketsite with more puns.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Spending money, spending dough. I like it, Carol.

Bread is essential. That's what the slogan is here from the Grains Food Foundation. The launching of big ad campaigns, spending $3.5 million to promote grains and bread as part of a healthy diet; this, after last year's low-carb fad. The bread industry is now hoping for a comeback.

So, this "grains for life" campaign is going to be announced in New York and Washington with billboards, posters and people dancing in bread costumes. A lot of freelance actors are probably lining up for that, at least here in New York.

This comes three weeks after the government issued guidelines calling for adults to have three one-ounce servings of whole grains a day.

And a study from the MPD Group -- this is an independent marketing company -- found that the low-carb diet hit a peak last February, 9.1 percent of American adults were on that kind of diet, and that fell to 3.6 percent by mid-November.

So, now the bread industry is saying it's the calories, not the carbs, that are important. We'll see if it works.

COSTELLO: You know, I just can't wait to see the people dancing in bread costumes, because I'm sure that it will bring consumers back.

LEE: It's probably going to get people's attention. I'm just envisioning somebody kind of enveloped in a giant hot dog bun. I don't know. We'll see if they come to Times Square at all. We'll take some pictures and send them to you.

COSTELLO: We would love that. A quick look at the futures.

LEE: Yes. Things are looking a little bit weak for today's session; this, after the Dow finished the month of January down 2.7 percent.

Walt Disney could be a stock to watch today, out with profits last night. The stock gained a little bit of ground. They came in well ahead of the Wall Street estimate on profits. The ESPN Network helped. Theme park business helped. And ABC has those hits we all know about -- "Desperate Housewives" and "Lost" -- helping results as well.

So, it could be a good move for today -- Carol.

COSTELLO: Carrie Lee live at the Nasdaq Marketsite. Thank you.

In news across America this morning, Oregon lawmakers are re- thinking their security after a man burst into the State Senate holding a butcher knife. Boyd Owens (ph) held a knife to his own chest and demanded to see the governor. There were no injuries in the end. Owens is now undergoing a mental evaluation. He's been charged with criminal mischief, menacing and disorderly conduct.

A North Carolina medical examiner faces discipline after pronouncing an accident victim dead when he wasn't. Two paramedics have already been fired over the incident. A report from Franklin County investigators found that Dr. J.D. Purdue (ph) ignored paramedics when they thought that Larry Green (ph) was still alive. Green (ph) remains in critical condition.

A controversial University of Colorado professor has stepped down as head of the school's ethics studies department. Ward Churchill made news when he compared the 9/11 victims of the World Trade Center to Nazis. He also referred to the -- quote -- "gallant sacrifices made by the attackers." Many 9/11 families are protesting his upcoming speaking engagement at Hamilton College in New York.

And, Chad, do you remember last week when we talked about that semester-at-sea ship that was tossed around the coast of Alaska?

CHAD MYERS, CNN METEOROLOGIST: It came out of Vancouver and was headed to Korea, and actually got hit by a huge rogue wave south of Alaska, right.

COSTELLO: A 50-foot wave. Well, we have some new pictures showing just how rough it was for those poor college students. This is inside the ship. Oh, my gosh! As you said, bad weather and that big wave, it actually damaged the ship's engine.

MYERS: It did. It actually damaged three of the four. And, in fact, the wave came over the bow far enough that it actually went right through the wheel house and broke some of the windows there. Obviously, they already knew. This was after the first wave hit. They put on their -- they went out to the muster (ph) stations and got their life preservers on.

But look at how that -- people are sliding across the floor as this thing is just going back and forth as the waves hit from one side to another.

And because they only had one engine to run on at that point, they couldn't steer the boat really into the ship right into the waves, like you would like to take them on the bow. They were actually taking them on the beam, which made the ride even worse.

COSTELLO: It's amazing the ship didn't capsize.

MYERS: Yes.

COSTELLO: But, I mean, it was a huge, gigantic ship.

MYERS: Right. This was 100-day cruise for the semester at sea. But they did get to Honolulu yesterday for repairs.

COSTELLO: Yes. And I believe that some of those kids will be joining Bill and Soledad on "AMERICAN MORNING"...

MYERS: Oh, great.

COSTELLO: ... to get the story straight from the horse's mouth, so to speak. And, of course, that's coming up in just a few minutes here on CNN.

We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: All right, Chad, it's time to check out some amazing pictures.

MYERS: Oh.

COSTELLO: On paper it just looks like a 2-point win. But, oh, no, in person it's incredible. Not that. It's coming up. Guilford College player Jordan Snipes (ph) grabbed a rebound in overtime. And look at what he did with it. This is a game against Randolph Macon (ph). He heaved the ball 92 feet, in case you're interested. And as you can see, it went.

MYERS: It left his fingers. If you look at the clock, it left his fingers there with .2 on the clock, and obviously zero by the time it got there. But that's a 3-point shot, Carol.

COSTELLO: It certainly is. The improbable shot left the players from both teams shocked and awed.

MYERS: OK.

COSTELLO: I just had to add that line.

MYERS: OK.

COSTELLO: Looking at the headlines this morning, there's an interesting story in "The Washington Post." It says, the headline is, "Brain Immaturity Could Explain Teen Crash Rate." Apparently, in a study done by the NIH, risk-taking diminishes at the age of 25. It was previously thought it took place at the age of 18.

The reason this is important, Chad, is...

MYERS: Because your insurance rate goes down when you're 25.

COSTELLO: That's true. And that's one of the reasons for that. But there are two laws in the Washington area that kind of cites brain development research in proposing them. One is in Virginia, and it bans cell phone use for drivers younger than 18 years old. The other one is in Maryland, and it bans more than one teenager in the car at the same time.

So there you have it.

MYERS: All right.

COSTELLO: If you're interested, WashingtonPost.com.

MYERS: There you go.

COSTELLO: From the Time Warner center in New York, I'm Carol Costello, along with Chad Myers. "AMERICAN MORNING" starts right now.

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