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LIVE FROM...

News; International

Aired February 2, 2005 - 14:30   ET

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


MILES O'BRIEN, CNN ANCHOR: Checking stories "Now in the News." The Federal Reserve raises the U.S. benchmark fed fund's rate a quarter point, to 2.5 percent. It's the sixth straight interest rate hike. The decision by the Central Bank's federal open market committee was unanimous. Analysts say the move is meant to ward off inflation pressures.
Pope stable. Vatican officials say there's no cause for alarm over the pope's latest illness. The 84-year-old pontiff rushed to hospital yesterday for an acute respiratory infection. A papal spokesman says the pope's condition has since stabilized.

A takeoff failure. At least 19 people injured, one critically, in a plane crash at New Jersey's Teterboro Airport. This corporate jet smashed into a warehouse after skidding off a runway as it rolled toward takeoff. The plane hit two cars as it streaked across an adjacent highway. 11 people aboard the airplane.

Honda is recalling almost a half million cars to fix an ignition defect. The company says the flaw could cause vehicles with automatic transmissions to roll after they've been parked and the key removed. Included in the recall are certain 1999/2002 Accord models and all 1997-2001 Prelude models, as well as some '99 to 2000 Acura TL sedans.

KYRA PHILLIPS, CNN ANCHOR: President Bush lays out the goals for his second term in tonight's State of the Union address.CNN's senior political analyst Bill Schneider tells us the big themes to be looking for.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The 2004 campaign bitterly divided the country. Those divisions have shown no sign of healing until Sunday. The Iraqi election has given President Bush a much-needed boost. Iraqis seem to want to reconcile, how about Americans?

What signals should viewers be looking for in the president's State of the Union speech? On Iraq, viewers will be looking for some sign that the end is in sight, but don't count on a timetable.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Timetables send the wrong message to the terrorists because all terrorists have to do is wait, and then they can plan and coordinate and prepare attacks around those timetables.

SCHNEIDER: Social Security will be the big item on the president's domestic agenda.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: One innovative response to this issue is to allow younger workers to take some of their own money and set it aside in a personal savings account.

SCHNEIDER: Democrats are all geared up to take shots at President Bush's Social Security plan, if he presents one. But Bush may decide not to make the same mistake his predecessor did on healthcare and give his opponents a target to shoot at.

Both liberals and conservatives will be listening to hear how much of a priority he intends to place on social issues. Conservatives will be disappointed if he doesn't say he'll work hard to pass a constitutional amendment to ban same-sex marriages. They will also be disappointed if he says he will work hard to pass his immigration reform proposal, which they don't like.

One sign of reconciliation to look for -- how many times Democrats join Republicans in a standing ovation. It happened often in Bush's 2002 State of the Union speech.

BUSH: So my economic security plan can be summed up in one word -- jobs.

SCHNEIDER: But that was during the era of good feeling after 9/11, when partisanship was subdued. It happened less often last year. The country had become divided over Iraq. The era of ill will had set in. It's still going on.

(on camera): The Iraq election gives President Bush an opening to try to break through the ill will. But he has to seize the moment Wednesday night.

Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: And you can join CNN tonight for coverage of the State of the Union address. Paula Zahn, Wolf Blitzer and Larry King look at the big issues and how they affect you. Primetime coverage begins at 8:00 Eastern.

O'BRIEN: Now more on the pope's condition. Vatican officials say he has stabilized after an overnight health scare. But although the Vatican refuses to discuss it, some people are speculating about a possible successor to the aging, ailing pontiff.

But first before we get into that, and we won't talk about it too long, we go to CNN Vatican analyst Delia Gallagher to just get an update on the pope's condition. What do we know exactly about what ails the pope, Delia?

DELIA GALLAGHER, CNN VATICAN ANALYST: Well, clearly, what we've got are the reports of the respiratory difficulties, this problem in the trachea that he has. Aside from the many other ailments, which we already know, the Parkinson's disease being one of the main ones. And his old age. So all of these combined with the flu have led to these complications. What we'll need to see in the next few days is if the condition continues to be stable.

Of course, this is a very resilient pope. We've seen him come back many times. And we might not be surprised to see him back at his desk next week for that meeting with secretary of state Condoleezza Rice.

O'BRIEN: Tremendous spirit. Up to and including coming back from being shot, of course. Generally, though, we have seen -- we have all just witnessed his health deteriorate. Is there a different feel this time as the pope undergoes treatment in a hospital?

GALLAGHER: Well, there was certainly that sense of alarm last night with -- when he was taken away in the ambulance late at night. Of course, that causes some kind of alarm. And yet I have to say that the feeling here was still a sense of cautious calm. And not the sense that this was the beginning of the end, and that seems to have been confirmed today by the reports.

So I would say no, there wasn't necessarily a different feel other than an initial state of alarm. And now, of course, we'll be even more vigilant, but we've always been vigilant about the pope's health in the last few years. So in a sense, we'll just be continuing to watch it.

O'BRIEN: And, of course, we want to be sensitive to the situation here. The pope is alive, although not well at the moment. But nevertheless, given his continuing health problems and the slide we've all witnessed and his advanced age, there is a lot of talk, of course, about what next, as far as who would lead the world's Catholics.

And I guess just without going through candidates, just a general question for you, Delia. The College of Cardinals under this pope for 27 years or so very much reflects his philosophy. The College of Cardinals, of course, elects the next pope. Are we likely to see somebody, whoever it may be, whatever geographic region, who would philosophically echo this particular pontiff?

GALLAGHER: Well, philosophically speaking is very broad, of course. These cardinals are on the conservative side. But conservative, again, is a big word when you use it in terms of the church. Most of them would be considered conservative compared to the rest of the world, perhaps, because some of the Catholic Church's teachings are considered conservative, and most of the cardinals appointed by the pope would follow those teachings. So in terms of some of the hot-issue teachings such as abortion or women priests and so on, we might not expect drastic changes there.

But philosophically speaking, yes, these are all individual thinkers, and what's more, now the College of Cardinals has been expanded to this international body. And so they do reflect also the places from where they come. And this will certainly have an effect on the future of the church, although, as we said, you know, it's premature to say exactly how that's going to pan out. But we look at a couple of things. One is that geographical consideration because we've got to look now to third-world countries, to South America, to Africa, where the Catholic communities are growing. In Europe, the traditional base for the pope, certainly in Italy, the Catholic communities are declining. So we might be looking towards a candidate from those other continents, which will bring a completely different vision of the church, but still within some of the guidelines that this pontiff has set.

O'BRIEN: Delia Gallagher, thank you very much.

PHILLIPS: So are you going to -- are you going broke? Going to the doctor? It does get pretty expensive.

O'BRIEN: Yes, it does.

PHILLIPS: Unless, of course, you have that small fee that you pay. But then you question your service. But anyway, a big number of Americans are suffering chapter 11 aches and pains these days.

O'BRIEN: And then Pennsylvania takes Groundhog Day very -- well, you call that serious? You might say there a few adult beverages in that crowd.

PHILLIPS: That early?

O'BRIEN: Find out what Phil predicts for the rest of the winter.

SIBILA VARGAS, CNN ENTERTAINMENT CORRESPONDENT: And I'm Sibila Vargas in Hollywood. I'll tell you why ABC anchor Ted Koppel may be going from the p.m. to the a.m.

And should R&B phenom Usher make more room on his mantel for more awards? I'll explain when LIVE FROM continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: As I study the sun, it's all about fun, but I'm sorry to say, I see my shadow today. When I see my shadow, six more weeks of winter.

He's only the messenger!

(END VIDEO CLIP)

PHILLIPS: Poor guy. The crowd wasn't happy with Punxsutawney Phil's prediction of six more weeks of winter weather today. Groundhog prognosticators across the U.S. handed out their forecasts today, and not all of them agree. So if you're a fan of Phil's, well, hang on to your winter coat and gloves. If not, well, maybe spring will be early.

Well, if you're a big fan of the late Johnny Carson, get ready to bid on something truly remarkable on eBay. And games of musical chairs are going to behind the anchor desks at two networks. As always, Sibila Vargas live in Hollywood with the latest -- Sibila.

VARGAS: Hey, Kyra. Anyone who's ever watched "The Tonight Show with Johnny Carson" knows he had some of the best entertainers on his show. Well, now three books containing signatures of some of Carson's guests are up for auction on eBay. The books were on their way to the trash during a 1967 closet cleaning. But they were salvaged by a 14- year-old boy, very smart boy. The books contain more than 400 signatures, notes and drawings from guests like Groucho Marx, Paul Newman and Joan Rivers. Now if you want them, you'd better act fast. The auction on eBay ends this Sunday.

And for decades, he's been the king of ABC's late night, but now there's word that Ted Koppel may be moving to dayside. According to published reports, the "NIGHTLINE" anchor may become the new host of the ABC Sunday morning show "THIS WEEK." "THIS WEEK" is currently hosted by George Stephanopolous who has been rumored to be Koppel's replacement. So they may be doing the old switcheroo.

And over at CBS, it's looking like Bob Schieffer is the top candidate to replace Dan Rather on a temporary basis after Rather leaves his seat in March. A network executive confirms the "FACE THE NATION" host will probably replace Rather on an interim basis as "CBS EVENING NEWS" anchor.

Now if you love those great animation films like "Toy Story," "Finding Nemo" and "The Incredibles," who didn't, then I have some good news for you. The Walt Disney Company is building a new animation unit strictly to create sequels to some of the hit films it co-produced with Pixar Animation Studios. Now you may recall that Pixar and Disney severed their ties last year. But Disney retained the rights to make sequels to the films whether Pixar was involved or not. The next animation sequel being released in 2008.

Moving on to music news, the 19th Annual Soul Train Music Award nominations are out. Once again, Usher reigned supreme. The R&B sensation led the pack of nominees with five nominations. Of his nominations are best male R&B soul album for "Confessions," and best male R&B soul single for "Confessions Part 2." Sexy super newcomer Ciara came in second with four nominations. The Soul Train Awards will be presented on February 28th in Hollywood. And you know what, the nominations for Usher are certainly no surprise. Now it definitely would be a surprise if he didn't get nominated.

Well, more news from LIVE FROM will continue after the break.

(COMMERCIAL BREAK)

PHILLIPS: Well, the rising costs of health care is a cause of concern for many Americans. Now a new study shows that medical bills are behind half of all personal bankruptcies.

O'BRIEN: Susan Lisovicz at the New York Stock Exchange with that and more.

Hello, Susan. SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Hello, Miles and Kyra. And what's really shocking here is that it's not just the uninsured that are sinking bankruptcy because of those soaring medical bills. Most of the people sent into debt by illness are middle-class workers with jobs and with health insurance.

The Harvard University study says more than three-quarters of the people filing for bankruptcy had health insurance prior to the illness. But in many cases the illness caused the person to miss so much work it that it resulted in the loss of income and of the employer's health coverage at the time it was needed most.

Consider this: The average bankrupt person surveyed had spent more than $13,000 on co-payments, deductibles and uncovered services, even if they had private insurance.

Food for thought. Kyra and Miles, back to you.

O'BRIEN: All right. Big Fed announcement. Interest rates going up. Not exactly a surprise, which means that probably the market already figured that in, right?

(STOCK MARKET REPORT)

PHILLIPS: The Teterboro Airport is shut down while investigators try to figure out why a small plane crashed this morning on its way to Chicago. We're going to get the latest from our reporter on the scene.

O'BRIEN: And an amazing survival story. We're just hearing about more tsunami survivors discovered today. It's an amazing one, we'll give you the update, stay with us.

(COMMERCIAL BREAK)

PHILLIPS: A bittersweet cycle of life. There are many stories of American sacrifices coming out of Iraq. The same day one Marine's life ended in mid-November, his son was born back home in Nebraska. For his family, the date will always be mingled with mixed emotions.

Here's our Frank Buckley.

(BEGIN VIDEOTAPE)

APRIL KIELION, CPL. SHANE KIELION'S WIDOW: There we go.

FRANK BUCKLEY, CNN CORRESPONDENT (voice-over): April Killian looks into her baby boy's face and sees her late husband, Shane, looking back.

A. KIELION: Every time I look at him, I see his father. You know, knowing that, you know, we were supposed to share a life together and have a family, and we're not going to have that anymore. It's hard.

BUCKLEY: Marine Corporal Shane Kielion, 23 years old, was killed in action in Falluja on November 15th.

A. KIELION: I can't imagine not being with him again.

BUCKLEY: November 15th, a day seared into April's life. And not just because it was the day her husband was killed. It was also the day Shane Jr. was born.

A. KIELION: I still have so much disbelief, you know. You know, it's like how do you explain the hardest day in your life is one of the most happiest days, too?

BUCKLEY: As it was for Roger and Pat Kielion. They gained a grandson on that day, but lost a child.

ROGER KIELION, FATHER OF CPL. KIELION: Quarter to 3:00 in the morning...

PAT KIELION, MOTHER OF CPL. KIELION: 2:46.

R. KIELION: ... it was -- you know, everything just came crashing down completely.

P. KIELION: We went from such a high to such a...

R. KIELION: Yes.

P. KIELION: They say, well, you know, you've got that baby. Yes, we have the baby, but it still -- it's not our Shane.

BUCKLEY: All of Omaha seemed to turn out for Shane's funeral. Thousands lined the streets. He was the first of the city's citizens killed in combat in Iraq. Jay Ball was Shane's high school football coach. As a team captain and starting quarterback, Shane led South High to the state playoffs.

JAY BALL, HIGH SCHOOL FOOTBALL COACH: People respect the kind of person that Shane was. You know, he went to school every day. Didn't get in trouble. He represented the country. He was awful proud to do that. He was so proud of being a Marine.

BUCKLEY: Shane's jersey, his No. 1, was retired after he was killed.

BALL: And there's only one other person who will ever get to wear that at South High School, and that would be Shane Jr.

BUCKLEY: Shane Jr. will grow up hearing stories about his father from people who loved him and who are determined to keep his memory alive.

(on camera): They want to make sure that even though Shane Jr. will never meet his father, he will know him.

(voice-over): Know No. 1.

A. KIELION: How athletic he was. You know, how he could make everybody laugh.

BUCKLEY: How much he loved his wife.

BALL: He'd always kind of tilt his head back. Coach, she's so beautiful. I just love her. Then, of course, his baby was coming. And he was really excited about that.

BUCKLEY: Shane Jr. will hear about the cocky young man that was Nick Sidzick's (ph) best friend.

UNIDENTIFIED MALE: I lost Shane, but, you know, this is the closest thing I have. And you know, it's pretty much a replica of him. If it's all I have, then I'm going to hold onto it as tight as I can.

BUCKLEY: And when the time is right, Shane's No. 1 necklace, the one he gave to his mom just before boot camp, will go to the blond baby who looks just like his dad, a boy his grandma calls "Frosty."

P. KIELION: When my "Frosty" grows up enough to know, I'm going to put it on him, to know that his dad was No. 1.

BUCKLEY: The son of a fallen Marine, a boy from America's heartland.

Frank Buckley, CNN, Omaha, Nebraska.

(END VIDEOTAPE)

PHILLIPS: In the news now, previewing the next four years. The president goes before Congress and the nation tonight to report on the State of the Union. He's expected to outline a quote, "strategy for success in Iraq," and his plan to reform Social Security.

An amazing discovery, nine more tsunami survivors. An Indian police officer tells CNN his team stumbled upon them while searching the island chains of the Andaman and Nicobar provinces. Five men -- or islands, rather, the five men, two women and two children said they were survived -- or survived, rather, by eating wild boar and coconut.

Searching for answers in the crash of this corporate jet. Eleven people on board were hurt, one seriously, after the twin engine plane failed to take off from Teterboro Airport. It slammed into a building across the road. Several people on the ground were also injured.

Filling in, veteran newsman Bob Schieffer has been pegged to take over the anchor duties at CBS temporarily after Dan Rather steps down next month. Network executives say they may go to a multi-anchor format.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


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