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CNN Live At Daybreak

Uprisings in Afghanistan; Will Congress Allow Stem Cell Research to Bloom?

Aired May 16, 2005 - 06:00   ET

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


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


CAROL COSTELLO, CNN ANCHOR: Straight ahead on DAYBREAK, a firestorm of anti-American rage might have been sparked by a false alarm.
Also, will it keep you in the house or put you on the curb? We'll take a look at your mortgage.

And stem cell research -- will Congress stem it or allow it to bloom?

It is Monday, May 16.

You are watching DAYBREAK.

And good morning to you.

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

Now in the news, Defense Secretary Donald Rumsfeld answers questions today about the base closing list he released last week. He appears before the Base Closure and Realignment Commission at 10:30 Eastern.

Russia's deputy parliament speaker is accused of profiting from the U.N. Oil For Food Program in Iraq. He has denied previous such reports. A Senate report alleges several other top Russian officials also profited.

As you well know, Florida was clobbered by a record number of hurricanes last year. We will learn what the prediction is for the upcoming Atlantic hurricane season. That will happen this afternoon at 12:30 Eastern.

What do you think they'll say -- Chad.

CHAD MYERS, CNN METEOROLOGIST: We already know what they said, Carol. But we can't...

COSTELLO: Well, spill it.

MYERS: We can't tell you until 12:30. Actually, they give us the information a few hours early so that we can build the graphics necessary to put that on the air when it comes out.

COSTELLO: Come on, give us a hint. MYERS: I...

COSTELLO: Come on. Come on.

MYERS: Yes, they will never send me another press release again if I do, Carol.

COSTELLO: All right.

MYERS: No. But they're -- it will be a season that we'll probably have to remember again, I'll just put it that way.

COSTELLO: OK.

(WEATHER REPORT)

COSTELLO: Our top story this hour, the U.S. military is attempting to defuse tensions with Afghanistan in the wake of deadly violence there. At a military news conference today in Kabul, Army Colonel Gary Cheek said: "We want to redouble our efforts to communicate with the Afghan people." That's what he said.

"Newsweek" magazine is now backing off a report that sparked deadly anti-American protests in Afghanistan and the Muslim world. The May 9 story alleged that interrogators at Guantanamo Bay desecrated the Koran, which is the Muslim holy book, even flushing one down a toilet. Three days later, at least 15 people were killed in demonstrations.

While "Newsweek" acknowledges errors in the report, it stopped short of retracting it.

(BEGIN VIDEO CLIP)

DAN KLAIDMAN, "NEWSWEEK" MAGAZINE: There is an enormous amount of pent up and not so pent up anti-American rage and sentiment in that region, in that part of the world. There are a lot of people who think that our war on terror and our war in Iraq is a much wider war against Islam. And, you know, I think this was a -- this was -- this played into all of that, tragically.

(END VIDEO CLIP)

COSTELLO: Joining me now live from Kabul is journalist Nick Meo.

He attended the military's news briefing that I mentioned at the top of this story.

Nick, what else did they say?

NICK MEO, JOURNALIST: Well, U.S. military commanders here in Kabul are saying that they're going to be reviewing their operating tactics for troops on the ground after these devastating riots. In many areas in eastern and southern Afghanistan, where the Taliban insurgency continues, many Afghans complain about tactics like, for example, intrusive house searches. When American soldiers go into villages looking for weapons they sometimes barge into houses. That can be extremely insulting in Pashtun tribal culture, particularly if they go into the women's quarters. Another complaint that Afghans often make is that innocent men are sometimes arrested and taken to Guantanamo, perhaps because of faulty intelligence.

These are the kinds of Afghan concerns that the military says it's now going to be looking at more closely. It's going to be redoubling its efforts at communicating with the Afghan people, according to U.S. commanders here. And they say, as well, that they're going to be working much more closely with the Afghan government when it comes to planning military operations.

COSTELLO: Nick, I wanted to ask you more about this "Newsweek" article. It was a 10-line article. And as we mentioned before, it mentioned that at Guantanamo Bay they supposedly flushed the Koran down the toilet, which turned out not to be true. Officials here in America are enraged at this.

How is the military reacting there?

MEO: Well, the military is not getting into that argument too much. They're certainly emphasizing their respect for Islam. They're saying that they're going to be meeting a lot more in the future with religious leaders. They're going to be talking to Afghan officials a lot more.

I've been speaking to Afghans today and some of them think that this perhaps unexpected divert over the magazine article and the partial retraction might do something to defuse some of the anger in Afghanistan. A lot of ordinary Afghans felt very insulted by this allegation of what had happened to the holy Koran.

Of course, the extremists here in Afghanistan were handed a powerful weapon and they've already done a lot of damage.

COSTELLO: And I would guess what you mean by that, they were taking advantage of the situation. This demonstration occurred. I'm sure they didn't start out for it to be violent. And then the extremists played a part and it turned really ugly.

MEO: Yes. It was the worst demonstrations, the worst street violence in Afghanistan for over three years. It's caused something of a political crisis here. President Hamid Karzai has stepped in. It's created a debate, a political debate, as well, over the future of U.S. bases in Afghanistan about having U.S. troops here.

So the repercussions from last week's violence go on.

COSTELLO: Nick Meo reporting live for us from Kabul, Afghanistan this morning.

Secretary of State Condoleezza Rice has wrapped up an unannounced visit to Iraq. Rice's main purpose was to meet Iraq's fledgling government leaders. In Baghdad, she met with the prime minister, Ibrahim al-Jaafari.

Afterward, Rice stressed the need for patience to resolve the violence two years after Saddam Hussein's ouster.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: Our promise to the Iraqi leadership is that the multinational forces are here to help Iraq defend itself until it can defend itself. And we want that to be as soon as possible, I assure you. We want it be as soon as possible.

(END VIDEO CLIP)

COSTELLO: Rice also carried the message that the new regime must meet the August time line for drafting a new constitution.

In this morning's "Security Watch," there is still confusion about the CIA killing of an al Qaeda member. Sources tell CNN a key al Qaeda operative in Pakistan was killed by a missile fired from an unmanned CIA aircraft. Government officials in Pakistan say it did not happen on their territory. U.S. officials are keeping quiet.

Jury selection is set to begin in Tampa, Florida today in the case of an ex-college professor accused of helping a Palestinian terrorist group. The former University of South Florida professor and three other men are charged with financing suicide bomb attacks in Israel. Their lawyers have asked for a change of venue, saying there's been too much pre-trial publicity.

And now to a terrorism trial underway in Spain. An Al Jazeera reporter is expected to testify and defend himself today against charges he's a member of al Qaeda. He's one of two dozen suspects on trial.

Live to Madrid now and CNN's Al Goodman -- hello, Al.

AL GOODMAN, CNN CORRESPONDENT: Hello, Carol.

Well, Taysir Alluni is the best known of the 24 al Qaeda suspects on trial here in Madrid, in the courthouse behind me. He's the Al Jazeera correspondent who had the last known interview with Osama bin Laden in late 2001, shortly after the September 11 attacks. He faces nine years in jail if convicted of belonging to al Qaeda and carrying funds for al Qaeda.

Taysir Alluni says he's innocent and he has now just started testifying in the past hour, vigorously denying that he had a close and continuous relationship, friendship, with a suspected al Qaeda leader in Spain, who is also on trial here behind me -- Carol.

COSTELLO: Al, I was just wondering, two dozen men on trial. How are these men defending themselves against these charges?

GOODMAN: Well, Carol, let's start with Taysir Alluni. His defense is expected to say basically that the police and the prosecutors and the investigating magistrates got it all wrong; cultural misunderstandings, he will argue. They didn't understand these wiretapped conversations that -- when he was under surveillance in the 1990s. He also says that because of his work for Al Jazeera, he's been singled out. Al Jazeera, of course, has been critical of the Bush administration's war on terror.

Now, three of the 24 suspects are charged with helping to plan the September 11 attacks. Alluni is not one of those. But as we've heard the testimony in the recent weeks, there has been a common theme that yes, these men knew each other at the mosque, the local mosque, of course, but that doesn't make them terrorists, they are saying, and that the police didn't understand these wiretapped conversations they were listening in on. They just got it wrong. That's the defense -- Carol.

COSTELLO: We'll check back with you.

Al Goodman reporting live from Madrid, Spain this morning.

We want to remind you to stay tuned to CNN day and night for the most reliable news about your security.

Across America now, four people aboard this ill-fated small jet suffered only minor injuries after crashing into a bay in Atlantic City, New Jersey. Take a look at that. The pilot says his brakes failed. But a witness on the ground said the plane was trying to land on a runway that isn't meant for jets. Investigators plan to fish the plane out of the bay some time today. It's still in there.

About 100 people were denied communion on Pentecost Sunday at the Cathedral of St. Paul in Minnesota. Supporters of the Rainbow Sash Alliance had taken communion there for the past few years. The sash is meant to show support for gay Catholics. But the archbishop said they're -- they now seem to represent a protest against church teachings, so no communion.

This Oakland As fan is facing charges after throwing a beer at the Yankees' Jason Giambi. It's the second incident this year between a Yankee player and a beer toting fan. The fan in Oakland was charged with battery and public intoxication. Giambi, of course, is a former Oakland player who admitted to using steroids earlier in his career. And he handled it gracefully.

Still to come on DAYBREAK, prominent African-Americans are voicing outrage after comments made by the Mexican president, Vicente Fox. More on that story after the break.

And at a quarter past, how another mortgage option is allowing homebuyers a little more house for lower payments.

And at 22 minutes past, could a GOP controlled Capitol Hill open the doors to more stem cell research?

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

(COMMERCIAL BREAK)

COSTELLO: Civil rights leaders say some comments from south of the border really crossed the line. They're criticizing Mexican President Vicente Fox for what he told reporters on Friday. Fox was criticizing U.S. immigration restrictions and praising the Mexican work ethic.

Here's what he said. He said: "There's no doubt that the Mexican men and women, full of dignity, willpower and a capacity for work, are doing the work that not even blacks want to do in the United States."

Well, as you might expect, civil rights leaders in the United States say someone like Fox should really know better.

(BEGIN VIDEO CLIP)

REV. APPARENTLY SHARPTON, NATIONAL ACTION NETWORK: And I would hope that we not have to go that far. I would hope that if the president was really misunderstood, he would apologize and make it clear that he, as the head of state of a neighboring nation to the United States, does not see blacks in that light.

(END VIDEO CLIP)

COSTELLO: Mexican officials say Fox's remark was not meant as an insult.

Your news, money, weather and sports.

It's 6:15 Eastern.

Here's what's all new this morning.

"Newsweek" magazine is apologizing for its part in sparking deadly protests in Afghanistan. The magazine said it made an error in reporting that U.S. interrogators had desecrated the Koran. Those charges fed anti-U.S. violence that led to as many as 15 deaths.

In money news, Jane Fonda and Jennifer Lopez are drawing audiences to their new comedy, "Monster-In-Law." The movie was tops at the box office over the weekend, with $24 million.

In culture, you'll get your first chance to see "Star Wars Episode Three" this week. But a select few were able to get a sneak preview last night when the final "Star Wars" film was shown at the Cannes Film Festival.

In sports, the war between the Pistons and Pacers is now all even at two games apiece. The Pistons opened yup a big lead and cruised to an 89-76 win in game four. Game five set tomorrow in Detroit -- Chad.

MYERS: Hey, good morning, Carol.

Did you watch any of the golf over the weekend, Ted Purdy shooting at five under par 65 yesterday?

COSTELLO: You know...

MYERS: Wow, did he just do so great.

COSTELLO: ... watching golf is not the most exciting thing. MYERS: No. But he won $1.1 million for winning that, Carol, so...

COSTELLO: That's exciting.

MYERS: You should take up the game.

COSTELLO: Yes.

MYERS: Four days work for a million bucks.

Good morning, everybody.

(WEATHER REPORT)

COSTELLO: That's a look at the latest headlines for you.

If you are like me, you like driving around on Sunday, looking at the homes for sale and marveling at how expensive they are and wondering how anyone can afford the American Dream anymore. Ah, but along comes the 40-year mortgage. A happy ending?

With us now, Eric Schurenberg from "Money" magazine.

I hope I pronounced your name right.

ERIC SCHURENBERG, "MONEY" MAGAZINE: Schurenberg.

COSTELLO: Yes, that's good. I did a good job this Monday morning.

Welcome.

SCHURENBERG: Thank you.

COSTELLO: OK, so you write Fannie Mae is going to increase its purchase of 40-year mortgages. I guess that's a good thing.

SCHURENBERG: Right. Well, and it's a big difference because most mortgage lenders don't hold onto the mortgages they write. They sell them to Fannie Mae. Fannie Mae repackages them and sells them to investors. That means there will be more 40-year mortgages around.

COSTELLO: They had a test pilot, didn't they? They tried it for 22 months to see how many people were interested.

SCHURENBERG: They did. They did. And it worked out fine. And that spurred them to decide to go full hog.

COSTELLO: OK, a 40-year mortgage. So it's tempting because you think, oh, it's going to make my payment go down a lot and I'll be able to afford a home.

SCHURENBERG: Well, that's right, it will make your payment on a $300,000 mortgage, it could make your payment go down by $100 a month.

COSTELLO: Well, we have a graphic on a $200,000 home mortgage.

SCHURENBERG: OK.

COSTELLO: And it saves you, what, $63 a month?

SCHURENBERG: Right, on $200,000.

COSTELLO: That's not very much.

SCHURENBERG: Well, it's not. But there are -- and there are other ways to bring your mortgage -- your payment down even further. You could buy an interest only mortgage or an adjustable rate mortgage. The thing I like about this, though, is that a fixed rate mortgage is a lot safer from the point of view of an investor -- from the point of view of a homeowner.

COSTELLO: So what are the other advantages of my getting a 40- year mortgage? Because if I'm going to stay in the house in the long- term, that's a long-term mortgage, 40 years, and I'm paying a lot of interest on top of that, for an extra 10 years.

SCHURENBERG: Well, that's right. But most people don't stay in a house for 40 years or 30 years, with a 30-year mortgage. It really is just a way to stretch out the payments and lower your monthly payments.

Now, really, that only makes sense if you have something better to do with the money; also, if you know that your income is going to go up so that if you're stretching to get into an expensive house using this 40-year meeting, you know that you're going to -- it's going to be an easier burden later on.

COSTELLO: There has to be some disadvantage to this, though.

SCHURENBERG: Oh, there are some disadvantages.

COSTELLO: OK, tell us.

SCHURENBERG: Well, I mean, you do pay extra interest over the life of the mortgage, or the life of the time you stay there. Also, you don't build up equity quite as fast. When you're paying off a mortgage on a faster schedule, it's a kind of forced savings. You're building up your equity. You're building up your ownership of that asset. You don't do that as fast when you're stretching it out over 40 years.

COSTELLO: OK, so even if you're staying in the home on the short-term, let's say I move out in two to three years, I'm going to lose money, aren't I, if I have a 40-year mortgage?

SCHURENBERG: Well, it depends on what happens to the price of the house. Now, any mortgage is kind of a risk. You know, if you own a house completely, without a mortgage, and the prices go down by 10 percent, you're out 10 percent. If you put down 10 percent on the price of your house and the prices of homes go down by 10 percent, you're wiped out. COSTELLO: OK, so who is the primo candidate for a 40-year mortgage?

SCHURENBERG: The perfect candidate for a 40-year mortgage is someone who knows their income is going to go up, they want to get into a house that's kind of at the edge of the their reach right now but they know their income is going to go up and their burden is going to go down. And they have something good to do with that money, the money that they save. They are going to pay off higher interest credit card debt or something like that.

COSTELLO: That would be so responsible, wouldn't it?

SCHURENBERG: Yes.

COSTELLO: Eric from "Money" magazine, thank you for joining DAYBREAK this morning.

SCHURENBERG: My pleasure.

COSTELLO: Still to come, Capitol Hill takes on stem cell research.

And the airline industry put up fares again, the seventh time in three months, when DAYBREAK continues.

(COMMERCIAL BREAK)

COSTELLO: Just in time -- stem cell research, a line to consider. The Republican-controlled House, the same House that threw a lifeline to Terry Schiavo, could pass a bill expanding research on human embryos, thousands of them.

Live to Washington and "Time" magazine correspondent Viveca Novak.

Good morning.

VIVECA NOVAK, "TIME" CORRESPONDENT: Good morning, Carol.

COSTELLO: So why this Congress and why now?

NOVAK: Well, that's an interesting question. You recall that President Bush used his first prime time news conference, his very first in his first term, to announce his policy on stem cells, which very much limited the amount of federal funding for stem cell research, for embryonic stem cell research.

And now we have a bill moving through Congress that is Republican-backed, and it looks like it would have Republican support in both houses. It's partly because of high profile advocates like Nancy Reagan, who have come out and said, you know, we really need these stem cell lines to advance research for these horrible diseases like Alzheimer's. And it's also partly because the lines of stem cells that President Bush said were available and were sufficient for research turn out not to be as many as he said and, also, many of them are contaminated with mouse DNA.

So -- and scientists are starting to move to other countries and elsewhere, where policies are less restrictive on this kind of research.

COSTELLO: And states are passing their own laws that allow stem cell research.

NOVAK: That's right.

COSTELLO: There are...

NOVAK: Especially California.

COSTELLO: Exactly.

NOVAK: Yes.

COSTELLO: There are stipulations attached to this bill, as to what embryos can and cannot be used.

NOVAK: Right. And it would be embryos left over from in vitro fertilization that were, you know, more than the people involved in creating the embryos needed. And they would have to be informed and have to sign a consent form saying that any left over embryos could be used for this purpose.

COSTELLO: And they can't profit in any way, I would assume.

NOVAK: Right. No payment. That's right.

COSTELLO: No payment. You can't sell your embryos.

NOVAK: Right. Right.

COSTELLO: So when will this hit the House and when might it arrive in the Senate?

NOVAK: Well, it...

COSTELLO: And will President Bush sign it? That's another thing to think of.

NOVAK: Well, that's the big question. It's moving along. It's really percolating along. The big question is will the president sign it? And it's something that he's getting a lot of pressure from some of the religious groups on and he is saying so far that he's going to stick to his original policy, that this bill goes against his policy.

But if he vetoed it, it would be his first veto and this is a very big deal. And I think a lot of Republicans are kind of scrambling to find perhaps some kind of middle ground. But it's really not clear what that would be at this point.

COSTELLO: Interesting.

Viveca Novak from "Time" magazine.

And you can read more in this week's issue of "Time."

Thanks, Viveca.

NOVAK: Thank you.

Also in "Time," comedian Dave Chappelle says, "I'm not crazy and I'm not smoking crack." Chappelle took off to South Africa after his hit Comedy Central show was suspended. In an exclusive interview, Chappelle tells "Time": "This is kind of my spot where I can come to fill my spirit back up. Sometimes you neglect these things if you are running on a corporate schedule."

Still to come on DAYBREAK, a small plane skids off an Atlantic City runway, landing in a nearby bay.

And we've heard about the Pentagon's plan to close 33 bases. Well, today Donald Rumsfeld explains why to a congressional commission.

We'll be right back.

(COMMERCIAL BREAK)

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Aired May 16, 2005 - 06:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Straight ahead on DAYBREAK, a firestorm of anti-American rage might have been sparked by a false alarm.
Also, will it keep you in the house or put you on the curb? We'll take a look at your mortgage.

And stem cell research -- will Congress stem it or allow it to bloom?

It is Monday, May 16.

You are watching DAYBREAK.

And good morning to you.

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

Now in the news, Defense Secretary Donald Rumsfeld answers questions today about the base closing list he released last week. He appears before the Base Closure and Realignment Commission at 10:30 Eastern.

Russia's deputy parliament speaker is accused of profiting from the U.N. Oil For Food Program in Iraq. He has denied previous such reports. A Senate report alleges several other top Russian officials also profited.

As you well know, Florida was clobbered by a record number of hurricanes last year. We will learn what the prediction is for the upcoming Atlantic hurricane season. That will happen this afternoon at 12:30 Eastern.

What do you think they'll say -- Chad.

CHAD MYERS, CNN METEOROLOGIST: We already know what they said, Carol. But we can't...

COSTELLO: Well, spill it.

MYERS: We can't tell you until 12:30. Actually, they give us the information a few hours early so that we can build the graphics necessary to put that on the air when it comes out.

COSTELLO: Come on, give us a hint. MYERS: I...

COSTELLO: Come on. Come on.

MYERS: Yes, they will never send me another press release again if I do, Carol.

COSTELLO: All right.

MYERS: No. But they're -- it will be a season that we'll probably have to remember again, I'll just put it that way.

COSTELLO: OK.

(WEATHER REPORT)

COSTELLO: Our top story this hour, the U.S. military is attempting to defuse tensions with Afghanistan in the wake of deadly violence there. At a military news conference today in Kabul, Army Colonel Gary Cheek said: "We want to redouble our efforts to communicate with the Afghan people." That's what he said.

"Newsweek" magazine is now backing off a report that sparked deadly anti-American protests in Afghanistan and the Muslim world. The May 9 story alleged that interrogators at Guantanamo Bay desecrated the Koran, which is the Muslim holy book, even flushing one down a toilet. Three days later, at least 15 people were killed in demonstrations.

While "Newsweek" acknowledges errors in the report, it stopped short of retracting it.

(BEGIN VIDEO CLIP)

DAN KLAIDMAN, "NEWSWEEK" MAGAZINE: There is an enormous amount of pent up and not so pent up anti-American rage and sentiment in that region, in that part of the world. There are a lot of people who think that our war on terror and our war in Iraq is a much wider war against Islam. And, you know, I think this was a -- this was -- this played into all of that, tragically.

(END VIDEO CLIP)

COSTELLO: Joining me now live from Kabul is journalist Nick Meo.

He attended the military's news briefing that I mentioned at the top of this story.

Nick, what else did they say?

NICK MEO, JOURNALIST: Well, U.S. military commanders here in Kabul are saying that they're going to be reviewing their operating tactics for troops on the ground after these devastating riots. In many areas in eastern and southern Afghanistan, where the Taliban insurgency continues, many Afghans complain about tactics like, for example, intrusive house searches. When American soldiers go into villages looking for weapons they sometimes barge into houses. That can be extremely insulting in Pashtun tribal culture, particularly if they go into the women's quarters. Another complaint that Afghans often make is that innocent men are sometimes arrested and taken to Guantanamo, perhaps because of faulty intelligence.

These are the kinds of Afghan concerns that the military says it's now going to be looking at more closely. It's going to be redoubling its efforts at communicating with the Afghan people, according to U.S. commanders here. And they say, as well, that they're going to be working much more closely with the Afghan government when it comes to planning military operations.

COSTELLO: Nick, I wanted to ask you more about this "Newsweek" article. It was a 10-line article. And as we mentioned before, it mentioned that at Guantanamo Bay they supposedly flushed the Koran down the toilet, which turned out not to be true. Officials here in America are enraged at this.

How is the military reacting there?

MEO: Well, the military is not getting into that argument too much. They're certainly emphasizing their respect for Islam. They're saying that they're going to be meeting a lot more in the future with religious leaders. They're going to be talking to Afghan officials a lot more.

I've been speaking to Afghans today and some of them think that this perhaps unexpected divert over the magazine article and the partial retraction might do something to defuse some of the anger in Afghanistan. A lot of ordinary Afghans felt very insulted by this allegation of what had happened to the holy Koran.

Of course, the extremists here in Afghanistan were handed a powerful weapon and they've already done a lot of damage.

COSTELLO: And I would guess what you mean by that, they were taking advantage of the situation. This demonstration occurred. I'm sure they didn't start out for it to be violent. And then the extremists played a part and it turned really ugly.

MEO: Yes. It was the worst demonstrations, the worst street violence in Afghanistan for over three years. It's caused something of a political crisis here. President Hamid Karzai has stepped in. It's created a debate, a political debate, as well, over the future of U.S. bases in Afghanistan about having U.S. troops here.

So the repercussions from last week's violence go on.

COSTELLO: Nick Meo reporting live for us from Kabul, Afghanistan this morning.

Secretary of State Condoleezza Rice has wrapped up an unannounced visit to Iraq. Rice's main purpose was to meet Iraq's fledgling government leaders. In Baghdad, she met with the prime minister, Ibrahim al-Jaafari.

Afterward, Rice stressed the need for patience to resolve the violence two years after Saddam Hussein's ouster.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: Our promise to the Iraqi leadership is that the multinational forces are here to help Iraq defend itself until it can defend itself. And we want that to be as soon as possible, I assure you. We want it be as soon as possible.

(END VIDEO CLIP)

COSTELLO: Rice also carried the message that the new regime must meet the August time line for drafting a new constitution.

In this morning's "Security Watch," there is still confusion about the CIA killing of an al Qaeda member. Sources tell CNN a key al Qaeda operative in Pakistan was killed by a missile fired from an unmanned CIA aircraft. Government officials in Pakistan say it did not happen on their territory. U.S. officials are keeping quiet.

Jury selection is set to begin in Tampa, Florida today in the case of an ex-college professor accused of helping a Palestinian terrorist group. The former University of South Florida professor and three other men are charged with financing suicide bomb attacks in Israel. Their lawyers have asked for a change of venue, saying there's been too much pre-trial publicity.

And now to a terrorism trial underway in Spain. An Al Jazeera reporter is expected to testify and defend himself today against charges he's a member of al Qaeda. He's one of two dozen suspects on trial.

Live to Madrid now and CNN's Al Goodman -- hello, Al.

AL GOODMAN, CNN CORRESPONDENT: Hello, Carol.

Well, Taysir Alluni is the best known of the 24 al Qaeda suspects on trial here in Madrid, in the courthouse behind me. He's the Al Jazeera correspondent who had the last known interview with Osama bin Laden in late 2001, shortly after the September 11 attacks. He faces nine years in jail if convicted of belonging to al Qaeda and carrying funds for al Qaeda.

Taysir Alluni says he's innocent and he has now just started testifying in the past hour, vigorously denying that he had a close and continuous relationship, friendship, with a suspected al Qaeda leader in Spain, who is also on trial here behind me -- Carol.

COSTELLO: Al, I was just wondering, two dozen men on trial. How are these men defending themselves against these charges?

GOODMAN: Well, Carol, let's start with Taysir Alluni. His defense is expected to say basically that the police and the prosecutors and the investigating magistrates got it all wrong; cultural misunderstandings, he will argue. They didn't understand these wiretapped conversations that -- when he was under surveillance in the 1990s. He also says that because of his work for Al Jazeera, he's been singled out. Al Jazeera, of course, has been critical of the Bush administration's war on terror.

Now, three of the 24 suspects are charged with helping to plan the September 11 attacks. Alluni is not one of those. But as we've heard the testimony in the recent weeks, there has been a common theme that yes, these men knew each other at the mosque, the local mosque, of course, but that doesn't make them terrorists, they are saying, and that the police didn't understand these wiretapped conversations they were listening in on. They just got it wrong. That's the defense -- Carol.

COSTELLO: We'll check back with you.

Al Goodman reporting live from Madrid, Spain this morning.

We want to remind you to stay tuned to CNN day and night for the most reliable news about your security.

Across America now, four people aboard this ill-fated small jet suffered only minor injuries after crashing into a bay in Atlantic City, New Jersey. Take a look at that. The pilot says his brakes failed. But a witness on the ground said the plane was trying to land on a runway that isn't meant for jets. Investigators plan to fish the plane out of the bay some time today. It's still in there.

About 100 people were denied communion on Pentecost Sunday at the Cathedral of St. Paul in Minnesota. Supporters of the Rainbow Sash Alliance had taken communion there for the past few years. The sash is meant to show support for gay Catholics. But the archbishop said they're -- they now seem to represent a protest against church teachings, so no communion.

This Oakland As fan is facing charges after throwing a beer at the Yankees' Jason Giambi. It's the second incident this year between a Yankee player and a beer toting fan. The fan in Oakland was charged with battery and public intoxication. Giambi, of course, is a former Oakland player who admitted to using steroids earlier in his career. And he handled it gracefully.

Still to come on DAYBREAK, prominent African-Americans are voicing outrage after comments made by the Mexican president, Vicente Fox. More on that story after the break.

And at a quarter past, how another mortgage option is allowing homebuyers a little more house for lower payments.

And at 22 minutes past, could a GOP controlled Capitol Hill open the doors to more stem cell research?

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

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COSTELLO: Civil rights leaders say some comments from south of the border really crossed the line. They're criticizing Mexican President Vicente Fox for what he told reporters on Friday. Fox was criticizing U.S. immigration restrictions and praising the Mexican work ethic.

Here's what he said. He said: "There's no doubt that the Mexican men and women, full of dignity, willpower and a capacity for work, are doing the work that not even blacks want to do in the United States."

Well, as you might expect, civil rights leaders in the United States say someone like Fox should really know better.

(BEGIN VIDEO CLIP)

REV. APPARENTLY SHARPTON, NATIONAL ACTION NETWORK: And I would hope that we not have to go that far. I would hope that if the president was really misunderstood, he would apologize and make it clear that he, as the head of state of a neighboring nation to the United States, does not see blacks in that light.

(END VIDEO CLIP)

COSTELLO: Mexican officials say Fox's remark was not meant as an insult.

Your news, money, weather and sports.

It's 6:15 Eastern.

Here's what's all new this morning.

"Newsweek" magazine is apologizing for its part in sparking deadly protests in Afghanistan. The magazine said it made an error in reporting that U.S. interrogators had desecrated the Koran. Those charges fed anti-U.S. violence that led to as many as 15 deaths.

In money news, Jane Fonda and Jennifer Lopez are drawing audiences to their new comedy, "Monster-In-Law." The movie was tops at the box office over the weekend, with $24 million.

In culture, you'll get your first chance to see "Star Wars Episode Three" this week. But a select few were able to get a sneak preview last night when the final "Star Wars" film was shown at the Cannes Film Festival.

In sports, the war between the Pistons and Pacers is now all even at two games apiece. The Pistons opened yup a big lead and cruised to an 89-76 win in game four. Game five set tomorrow in Detroit -- Chad.

MYERS: Hey, good morning, Carol.

Did you watch any of the golf over the weekend, Ted Purdy shooting at five under par 65 yesterday?

COSTELLO: You know...

MYERS: Wow, did he just do so great.

COSTELLO: ... watching golf is not the most exciting thing. MYERS: No. But he won $1.1 million for winning that, Carol, so...

COSTELLO: That's exciting.

MYERS: You should take up the game.

COSTELLO: Yes.

MYERS: Four days work for a million bucks.

Good morning, everybody.

(WEATHER REPORT)

COSTELLO: That's a look at the latest headlines for you.

If you are like me, you like driving around on Sunday, looking at the homes for sale and marveling at how expensive they are and wondering how anyone can afford the American Dream anymore. Ah, but along comes the 40-year mortgage. A happy ending?

With us now, Eric Schurenberg from "Money" magazine.

I hope I pronounced your name right.

ERIC SCHURENBERG, "MONEY" MAGAZINE: Schurenberg.

COSTELLO: Yes, that's good. I did a good job this Monday morning.

Welcome.

SCHURENBERG: Thank you.

COSTELLO: OK, so you write Fannie Mae is going to increase its purchase of 40-year mortgages. I guess that's a good thing.

SCHURENBERG: Right. Well, and it's a big difference because most mortgage lenders don't hold onto the mortgages they write. They sell them to Fannie Mae. Fannie Mae repackages them and sells them to investors. That means there will be more 40-year mortgages around.

COSTELLO: They had a test pilot, didn't they? They tried it for 22 months to see how many people were interested.

SCHURENBERG: They did. They did. And it worked out fine. And that spurred them to decide to go full hog.

COSTELLO: OK, a 40-year mortgage. So it's tempting because you think, oh, it's going to make my payment go down a lot and I'll be able to afford a home.

SCHURENBERG: Well, that's right, it will make your payment on a $300,000 mortgage, it could make your payment go down by $100 a month.

COSTELLO: Well, we have a graphic on a $200,000 home mortgage.

SCHURENBERG: OK.

COSTELLO: And it saves you, what, $63 a month?

SCHURENBERG: Right, on $200,000.

COSTELLO: That's not very much.

SCHURENBERG: Well, it's not. But there are -- and there are other ways to bring your mortgage -- your payment down even further. You could buy an interest only mortgage or an adjustable rate mortgage. The thing I like about this, though, is that a fixed rate mortgage is a lot safer from the point of view of an investor -- from the point of view of a homeowner.

COSTELLO: So what are the other advantages of my getting a 40- year mortgage? Because if I'm going to stay in the house in the long- term, that's a long-term mortgage, 40 years, and I'm paying a lot of interest on top of that, for an extra 10 years.

SCHURENBERG: Well, that's right. But most people don't stay in a house for 40 years or 30 years, with a 30-year mortgage. It really is just a way to stretch out the payments and lower your monthly payments.

Now, really, that only makes sense if you have something better to do with the money; also, if you know that your income is going to go up so that if you're stretching to get into an expensive house using this 40-year meeting, you know that you're going to -- it's going to be an easier burden later on.

COSTELLO: There has to be some disadvantage to this, though.

SCHURENBERG: Oh, there are some disadvantages.

COSTELLO: OK, tell us.

SCHURENBERG: Well, I mean, you do pay extra interest over the life of the mortgage, or the life of the time you stay there. Also, you don't build up equity quite as fast. When you're paying off a mortgage on a faster schedule, it's a kind of forced savings. You're building up your equity. You're building up your ownership of that asset. You don't do that as fast when you're stretching it out over 40 years.

COSTELLO: OK, so even if you're staying in the home on the short-term, let's say I move out in two to three years, I'm going to lose money, aren't I, if I have a 40-year mortgage?

SCHURENBERG: Well, it depends on what happens to the price of the house. Now, any mortgage is kind of a risk. You know, if you own a house completely, without a mortgage, and the prices go down by 10 percent, you're out 10 percent. If you put down 10 percent on the price of your house and the prices of homes go down by 10 percent, you're wiped out. COSTELLO: OK, so who is the primo candidate for a 40-year mortgage?

SCHURENBERG: The perfect candidate for a 40-year mortgage is someone who knows their income is going to go up, they want to get into a house that's kind of at the edge of the their reach right now but they know their income is going to go up and their burden is going to go down. And they have something good to do with that money, the money that they save. They are going to pay off higher interest credit card debt or something like that.

COSTELLO: That would be so responsible, wouldn't it?

SCHURENBERG: Yes.

COSTELLO: Eric from "Money" magazine, thank you for joining DAYBREAK this morning.

SCHURENBERG: My pleasure.

COSTELLO: Still to come, Capitol Hill takes on stem cell research.

And the airline industry put up fares again, the seventh time in three months, when DAYBREAK continues.

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COSTELLO: Just in time -- stem cell research, a line to consider. The Republican-controlled House, the same House that threw a lifeline to Terry Schiavo, could pass a bill expanding research on human embryos, thousands of them.

Live to Washington and "Time" magazine correspondent Viveca Novak.

Good morning.

VIVECA NOVAK, "TIME" CORRESPONDENT: Good morning, Carol.

COSTELLO: So why this Congress and why now?

NOVAK: Well, that's an interesting question. You recall that President Bush used his first prime time news conference, his very first in his first term, to announce his policy on stem cells, which very much limited the amount of federal funding for stem cell research, for embryonic stem cell research.

And now we have a bill moving through Congress that is Republican-backed, and it looks like it would have Republican support in both houses. It's partly because of high profile advocates like Nancy Reagan, who have come out and said, you know, we really need these stem cell lines to advance research for these horrible diseases like Alzheimer's. And it's also partly because the lines of stem cells that President Bush said were available and were sufficient for research turn out not to be as many as he said and, also, many of them are contaminated with mouse DNA.

So -- and scientists are starting to move to other countries and elsewhere, where policies are less restrictive on this kind of research.

COSTELLO: And states are passing their own laws that allow stem cell research.

NOVAK: That's right.

COSTELLO: There are...

NOVAK: Especially California.

COSTELLO: Exactly.

NOVAK: Yes.

COSTELLO: There are stipulations attached to this bill, as to what embryos can and cannot be used.

NOVAK: Right. And it would be embryos left over from in vitro fertilization that were, you know, more than the people involved in creating the embryos needed. And they would have to be informed and have to sign a consent form saying that any left over embryos could be used for this purpose.

COSTELLO: And they can't profit in any way, I would assume.

NOVAK: Right. No payment. That's right.

COSTELLO: No payment. You can't sell your embryos.

NOVAK: Right. Right.

COSTELLO: So when will this hit the House and when might it arrive in the Senate?

NOVAK: Well, it...

COSTELLO: And will President Bush sign it? That's another thing to think of.

NOVAK: Well, that's the big question. It's moving along. It's really percolating along. The big question is will the president sign it? And it's something that he's getting a lot of pressure from some of the religious groups on and he is saying so far that he's going to stick to his original policy, that this bill goes against his policy.

But if he vetoed it, it would be his first veto and this is a very big deal. And I think a lot of Republicans are kind of scrambling to find perhaps some kind of middle ground. But it's really not clear what that would be at this point.

COSTELLO: Interesting.

Viveca Novak from "Time" magazine.

And you can read more in this week's issue of "Time."

Thanks, Viveca.

NOVAK: Thank you.

Also in "Time," comedian Dave Chappelle says, "I'm not crazy and I'm not smoking crack." Chappelle took off to South Africa after his hit Comedy Central show was suspended. In an exclusive interview, Chappelle tells "Time": "This is kind of my spot where I can come to fill my spirit back up. Sometimes you neglect these things if you are running on a corporate schedule."

Still to come on DAYBREAK, a small plane skids off an Atlantic City runway, landing in a nearby bay.

And we've heard about the Pentagon's plan to close 33 bases. Well, today Donald Rumsfeld explains why to a congressional commission.

We'll be right back.

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