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CNN Wolf Blitzer Reports

North Korea, U.S. Officials Meet; Patirot Act Gets Tougher; Chinese Trade Problems Continue; Cuba Demands Turnover of Accused Terrorist

Aired May 19, 2005 - 17:00   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.


WOLF BLITZER, CNN ANCHOR: Speaking now and shortly after, we heard from the father of those two missing children. The father making an emotional appeal to the abductor or abductors to go forward. WOLF BLITZER REPORTS starts right now.
(BEGIN VIDEOTAPE)

BLITZER (voice-over): Face to face: Public threats, private talks. Can a dialogue with North Korea head off a nuclear showdown?

Trousers and T-shirts: a crack down on imports from China. Will it save American jobs? Or just make your clothing cost more?

Tired of swiping? Now, a new type of credit card, let's you wave or flash and be on your way without even a signature.

ANNOUNCER: This is WOLF BLITZER REPORTS for Thursday, May 19, 2005.

(END VIDEOTAPE)

BLITZER: Thanks for joining us. Just a few days ago, the United States warned that North Korea might be getting ready to test a nuclear weapon. And the president's national security adviser Stephen Hadley told me, that if that happened -- and I'm quoting now -- "action would have to be taken."

But now it turns out that the U.S. had by then quietly resumed direct talks with North Korea. Something the North has been demanding. What sort of message does that send? We begin our coverage with our White House correspondent Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well Wolf, it certainly is an indication that pressure is mounting on all sides here. And perhaps an indication that the White House wants to say that, if diplomacy fails, they're not to blame.

(BEGIN VIDEOTAPE)

BASH (voice-over): They offered no incentives, no new proposals, but U.S. officials had a rare face to face meeting with North Korean diplomats near the U.N. last week, imploring them to return to negotiations over their nuclear program.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: The North Koreans probably read different things about what our policy is or is not. And so every now and then, when we think it's useful, we find it useful -- we sit down with them directly and tell them the story directly of what our policy is.

BASH: The Bush administration will only negotiate with Pyongyang if Japan, Russia, South Korea and China are involved. But those six- way talks have been stalled for nearly a year. And U.S. officials are under pressure to revive them.

South Korea tried this week as well, even offered new incentives, all amid increasing concern North Korea is advancing its nuclear capability. Estimates they already have two to six weapons and worries they may conduct a provocative test.

STEPHEN HADLEY, NATIONAL SECURITY ADVISER: We've seen some activity that is consistent with possible preparations for a nuclear test. We don't know for sure. As you know, North Korea is a very hard target.

BASH: U.S. envoy Joseph Tetrani (ph) led the talks, the first since December, as a good will gesture to North Korea, long demanding more direct American engagement and to remind them face to face Washington still has a proposal on the table to offer energy and security if Pyongyang halts all nuclear development.

(END VIDEOTAPE)

BASH: And this new diplomatic effort came almost simultaneously with the White House warning that, if talks don't resume soon and that situation deteriorates even further, that perhaps the administration may seek other options, like perhaps sanctions against North Korea at the United Nations -- Wolf.

BLITZER: Dana Bash at the White House. Thanks very much.

At the same time, the two Koreas wrapped up a meeting of their own today in a border town. It was their first face to face session in ten months. South Korea couldn't persuade the North to return to those six-nation nuclear negotiations. And a he joint statement made no mention of the nuclear standoff. But the two nations did agree to meet again next month.

In the meantime, the South agreed to ship 200,000 tons of fertilizer to help ease its neighbor's food shortages. And they are significant.

The PATRIOT Act was passed just 45 days after the 9/11 attacks in a bid to help battle terrorism. Critics complain it goes too far, but now there's a bid to make it even tougher. Our justice correspondent Kelli Arena is standing by. She has the story -- Kelli.

KELLI ARENA, CNN CORRESPONDENT: Wolf, Senate Republicans are set to introduce a bill that would give the FBI more power to subpoena certain records. Now the bill is not public. It's being written by the powerful head of the Senate Intelligence Committee and is expected to be considered next week in a closed session. (BEGIN VIDEOTAPE)

ARENA (voice-over): If the administration gets its way, FBI agents would be able to obtain a variety of personal records from businesses and other entities without an OK from a judge or a grand jury.

ROBERT MUELLER, FBI DIRECTOR: We may get information from the CIA or another agency that a person has come into the United States and is staying at a particular hotel in Washington D.C. with an intent to link up with somebody else to conduct a terrorist attack in New York City. We need the information from the hotel.

ARENA: The vehicle would be administrative subpoenas, which would clear the way in a hurry, because they can be approved by either the FBI director or agents in charge of local field offices.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Getting information quickly is really important. And I actually was around when the PATRIOT Act was passed. I think it has been a tremendous positive value added element of the war against terror.

ARENA: Federal agents for years have had the authority to issue administrative subpoenas when investigating crimes such as healthcare fraud or drug trafficking.

MUELLER: I think there are approximately 300 separate statutes that provide for the utility, or the use of administrative subpoenas. That makes very good sense for us to have that tool available when it comes to national security investigations.

ARENA: But civil rights advocates worry the proposed power is too broad and will be used in cases that have nothing to do with national security.

ANTHONY ROMERO, ACLU EXECUTIVE DIRECTOR: This would allow the government to essentially get access to people's medical records, personnel records, financial records, without any judicial oversight or any judicial review.

ARENA: The subpoenas can be challenged in court. And the bill is expected to require the administration to tell Congress twice a year specifically how the new power is being used. But Romero says congressional oversight is not enough.

ROMERO: Public reporting on how these powers are being used cannot be placed in change of judicial review.

ARENA: The proposal is part of a larger effort to renew parts of the PATRIOT Act, which expire at the end of the year.

(END VIDEOTAPE)

ARENA: Now it's not at all clear whether there's enough support to make those provisions permanent let alone expand powers even further, Wolf. BLITZER: Kelli, you know, when I interviewed Alberto Gonzales, the new attorney general, a few weeks ago, he seemed much more receptive to thinking about considering some changes in the PATRIOT Act than John Ashcroft appeared to be willing to do when he was the attorney general. You cover the Justice Department. Do you sense it's just a change in style, or is there a substantive difference between Ashcroft and Gonzales?

ARENA: There is not a difference. There is a change in style. At least this attorney general is willing to hear and talk, according to those on the Hill, but this administration supports every bit of the PATRIOT Act. They have endorsed some very minor changes in some provisions, but they want each of those eight provisions that sunset at the end of this year to be made permanent.

BLITZER: Kelli Arena, our Justice Correspondent. Thanks very much.

The House of Representatives, meanwhile, wants to change the system the government uses to issue security alerts. It's passed a bill that would make the current color code system optional, but instead require alerts to include detailed information about potential targets and possible responses.

Before it becomes law, the House plan would have to be approved by the Senate and signed into law by the president of the United States.

To our viewers, please stay tuned to CNN day and night for the most reliable news about your security.

They're written on your clothing labels. We're talking about the words made in China. now a new move by the United States government could make your next shopping trip a little bit more expensive. We'll explain what's going on.

Danger on duty: A frightening display of the threat to cops on patrol. Why officers need protection when they protect you.

And the future of plastic. A revolution taking place in the credit card industry. But will this new method of payment be secure? Stay with us.

(COMMERCIAL BREAK)

BLITZER: There's been a sharp increase in mortar and rock attacks on Jewish settlements in Gaza and inside Israel itself. Israel says the Palestinian Authority isn't handling the situation and warns it will use all necessary means to put an end to the shelling.

CNN's John Vause reports from Gaza.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): Palestinian against Palestinian. When Gaza Police tried to stop Hamas militants from firing mortar rounds at nearby Jewish settlements, they come under gun fire and faced an angry mob throwing stones. The police retreated despite Israeli demands that Palestinian Authority stopped the attacks.

And within 24 hours, Hamas had fired more than three dozen rockets and mortar shells at settlements and into Israel. The Israeli government now says it will stop the mortar attacks. On Wednesday, a missile strike left one Hamas militant dead. In Gaza, the three- month-old cease fire looks increasingly fragile. Palestinian Authority President Mahmoud Abbas had tried to woo the militants, even offering them jobs in his security forces.

MAHMOUD ABBAS, PRES. PALESTINIAN AUTHORITY (through translator): So we prefer this approach over another approach, which is trying to disarm by force, which would lead to a civil war.

VAUSE (on camera): Mahmoud Abbas has been trying to avoid a direct confrontation with Palestinian factions. Part of that has been his job as been more militant schemes. The more senior and better paying positions are being offered to those wounded by Israeli forces or spent time in an Israeli jail. But he's also demanding those who take the jobs hand in their illegal and unregistered weapons.

(voice-over): Hamas has refused outright.

UNIDENTIFIED MALE (through translator): Joining the Palestinian security forces is not negotiable now. We won't give up our weapons. Whoever is asking us to do so, he has to have an alternative to defend the Palestinian people.

VAUSE: Even the Al Aqsa Martyrs Brigrade, the military offshoot of Abbas' own Fatah political party says now is not the time to trade their weapons for a job directing traffic.

UNIDENTIFIED MALE (through translator): It is our right to protect our homes against Israeli aggression and they're right to keep their weapons.

VAUSE: And both militant groups admit they've been using the cease fire to rearm.

UNIDENTIFIED MALE (through translator): It is no secret what Hamas has been saying regarding weapons. It is our duty.

VAUSE: A direct challenge to both Mahmoud Abbas and to Israel as well.

John Vause, CNN, Gaza.

(END VIDEOTAPE)

BLITZER: Here at home, it began last week with cotton trousers, shirts, and underwear. And now the Bush administration has produced quotas on other types of clothing and textiles from China. This follows a huge increase on such imports. U.S. manufacturers are cheering, but retailers warn the American consumer will wind up paying more.

Let's go live to CNN's Mary Snow in New York. She has details -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, the tensions are between U.S. and China will be played out in the aisles of U.S. stores. Of all clothing imports into the U.S., the Commerce Department points out that only 20 percent of those imports come from China. However, those imports have been growing quickly.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Susan Gibbons spent $26 on sheets at Kmart, but she says she would spend more if she knew her products were made in the United States.

SUSAN GIBBONS, SHOPPER: If I were convinced -- see, part of this is depending on being able to be convinced that, when something we buy is made in America -- I would pay 20 percent more.

SNOW: From discounters to designers, there's no question that the made in China label cuts costs. The manager for designer Derek Lam had this $1,900 designer dress made in Italy.

JAN SCHLOTTMAN, DEREK LAM: You could sell it for $350 if you would produce it in China, but it wouldn't like that.

SNOW: Trade groups representing manufacturers say, with the savings comes a cost.

AUGUSTINE TANTILLO, PRES. AMTAC: The consumer is also paying an enormous price, such as the loss of millions of manufacturing jobs, frozen wages, lost health and pension benefits for these workers.

SNOW: The American Manufacturing Trade Action Coalition says 400,000 jobs have been lost since January of 2001. It supports quotas on clothing imports from China.

But demand is growing for that clothing with a made in China label. Imports have been soaring all year. A trade group representing retailers opposes the quotas, even though they were expected. But what does it mean for consumers?

JULIA HUGES, USA-ITA: Higher prices unfortunately. We hate to have that message, but it's going to definitely push prices up as companies are struggling to make sure that they have the product in the stores that consumers wants to buy.

SNOW: Consumers like Paul Maxine, who say people in this country should be looking forward, not back.

PAUL MAXON, CONSUMER: I think we're better suited, better educational based to do things a little bit higher up the food chain than making clothing.

SNOW: There is debate over how many jobs can be saved. While one economist says these quotas can reduce the number of jobs lost for now, it's not a long term solution.

PIETRA RIVOLI, GEORGETOWN UNIVERSITY: All bets are off as of 2008. So the U.S. and the EU have the right to impose these limits up through the year 2008. After that, no more quotas.

(END VIDEOTAPE)

SNOW: And for the immediate future, one trade group representing retailers predicts the prices for consumers could go up between 5 percent and 20 percent by the end of the year -- Wolf.

BLITZER: Mary Snow reporting from us from New York. Thanks, Mary, very much.

Won't other countries just simply make up the difference and sell more clothing to the U.S.? And will Americans benefit at all from these trade barriers? Joining us now from the North Lawn of the White House is president's economic adviser Allen Hubbard. Mr. Hubbard, thanks very much for joining us.

Let's talk a little bit about this trade off. Is it as simple as you lose American jobs in manufacturing, 400,000, Mary just said, over the past few years. But millions of consumers are not going to wind up spending more at Wal-Mart or Kmart or other stores around the country. How do you balance that tradeoff?

ALLEN HUBBARD, WHITE HOUSE ECONOMIC ADVISER: Well, obviously, we very much believe in a balance. We very much believe in free trade.

At the same time, we believe in a level playing field. And what the United States is doing is working through the World Trade Organization, the WTO agreement with China and enforcing those agreements. And making sure that American manufacturers are treated fairly, that there is a level playing field. And that both the American consumer as well as the American worker are protected while supporting free trade.

This president has an incredible record on free trade. We have 12 to 14 bilateral agreements during his 4 1/2 years in office. He continues to push for free trade agreements. CAFTA, the Central American Free Trade agreement, is now before Congress, which he very much supports. It's very important to get passed.

So, again, this president very much believes in free trade and believes it benefits all Americans.

BLITZER: If you curtail the imports from China, if China can't export as much to the United States, who's to say that other countries, Taiwan or Indonesia or Malaysia or India, other countries around the world won't pick up that slack? Who's going to guarantee that those jobs, that those imports will be translated into American factories? Is that your goal?

HUBBARD: Well, as you know, there have been limits on how much China could sell in terms of textiles up until the end of last year, and those limits were removed. And what we're doing is subscribing to the World Trade Organization agreements that allow us to limit the growth in that trade.

Now, where it will go, you know, as long as it's a level playing field, the president believes very strongly that the American worker will be competitive, American industry will be competitive, and the American consumer and the American worker will be well served.

BLITZER: Let's talk a little bit about Social Security while I have you. I don't know if you saw the statement issued by Robert Posen, an economist whose economic plan on Social Security the president seems to have endorsed. He has issued a statement, and I'll read it to you. He says, "the president should not insist on carving out these private savings accounts as part of the Social Security program if the Democrats support an overall legislative package for Social Security reform that is otherwise satisfactory to him."

Is the president ready to give up on those private accounts if everything else with the Democrats can be worked out? Because they say they don't even want to talk to you as long as you keep those private accounts on the table.

HUBBARD: The president is totally committed to voluntary personal retirement accounts. I just came back from Wisconsin with him today. He repeated it over and over again. He believes very strongly, people should have the option of taking a portion of their payroll taxes, investing them in a voluntary personal retirement account that will be their nest egg, that will grow over time, will grow faster than if they left it in the Social Security administration. It will be something they can count on when they retire, and in the unfortunate situation, if they die prior to -- pass away prior to retirement, it can be passed on to their heirs. The president is committed to personal retirement accounts.

BLITZER: So you're rejecting Pozen's recommendation?

HUBBARD: Again, the president's totally committed to voluntary personal retirement accounts. He thinks it's the only fair way to solve this problem for younger people in America.

BLITZER: Look at this latest NBC News/"Wall Street Journal" poll number on the president's handling of the economy: 43 percent approve of the way he's handling the economy, 51 percent disapprove. Why do you think a majority now disapproves of the way he's handling the economy?

HUBBARD: Well, obviously, gasoline and petroleum prices have gone up, which make everyone a little unhappy about the economy, and the president's particularly concerned about that, when it comes to lower-income people, when they fill up their tanks and it takes money away from their other needs and also for small business people. It robs them of the opportunity to grow their business, hire new workers, invest in new equipment.

At the same time, we're very proud of what's -- of how the economy's doing. We added 274,000 jobs last month. We've added almost 850,000 jobs since the beginning of the year. We're growing at over 3 percent a year. We grew over 4 percent last year. Inflation, core inflation, which was just reported yesterday, was actually at zero. Again, we're very positive on the future of the economy.

BLITZER: One final question, Mr. Hubbard. What is your assessment for the balance of this year? How will the economy grow?

HUBBARD: Our expectation is around 3.5 percent. Also, the Blue Chip Economist -- they're independent of this administration -- they currently estimate around 3.4 percent. Again, that's very, very healthy growth. Our unemployment rate is 5.2 percent. It's dropped from a peak of 6.3 percent. It's lower than it was on average during the '70s, '80s, or '90s, and, again, we feel very good about it.

At the same time, the president is committed to working, doing everything he can to get oil prices down so gasoline will be less expensive. That's why he has this energy bill on Capitol Hill and looks forward to Congress passing this bill.

BLITZER: Allen Hubbard is the director of the National Economic Counsel, special assistant to the president for economic policy. Mr. Hubbard, thanks very much for joining us. We hope you'll come back.

HUBBARD: Thank you for this opportunity.

BLITZER: We'll take a quick break. When we come back, Castro's foe in United States' custody right now. Charges brought against Luis Posada Carriles, the man who sparked major protests in Cuba earlier this week.

Nature's furry: a stunning discovery about the killer quake that triggered the deadly tsunami. You'll want to stick around for this information.

And King in court, how CNN's own Larry King got caught up in the Michael Jackson child molestation trial today. We'll tell you what happened.

(COMMERCIAL BREAK)

BLITZER: To put it mildly, it's an awkward situation for the Bush administration. A militant Cuban exile condemned by Fidel Castro's government as a terrorist was charged today with entering the United States illegally. That raises the possibility he might be deported back to Cuba, where he could face the death penalty.

Our national correspondent Susan Candiotti is standing by in Miami. She's been covering this story from the start. Susan?

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hello, Wolf.

Of course, the likelihood that the Bush administration would deport suspected terrorist Luis Posada Carriles to Cuba is slim to none, so says the Department of Homeland Security. Nor is it likely he would be sent to Venezuela, that has filed extradition papers on him because of the close relationship that country has with Fidel Castro.

So, where would he go if deported? Well, that has yet to be decided, but certainly it would have to be a country willing to take him in. For now, Posada's attorney says that he will fight to remain in the United States.

Now, on Tuesday at a news conference, Posada said he was withdrawing his asylum claim to stay here and was going to slip out of the country. A short time later, that's when federal agents took him into custody. Posada admitted that he crossed the border illegally from Mexico and today, that's what he was charged with.

(BEGIN VIDEO CLIP)

ALFREDO DURAN, CUBAN CMTE FOR DEMOCRACY: The charging document contains allegations of being unlawfully present in the United States, and that is it. There are no charges of anything else, whether it be terrorism or other allegations.

(END VIDEO CLIP)

CANDIOTTI: The subject of terrorism could come up if Posada wanted a bond hearing. Then the United States could bring up that kind of information. Now, he is suspected of helping to plan the bombing of a Cubana airliner in 1976 that killed 73 people. Posada denies it, but FBI documents suggested he played a role.

After hotel bombings in Havana in 1997 that killed an Italian tourist, Posada claimed responsibility, then later said he made it up. In 2000 he was convicted in a plot to assassinate Fidel Castro in Panama, and C-4 explosives were seized. Well, Cuba's president continues to accuse President Bush of hypocrisy for not turning Posada over for prosecution of his alleged crimes, and staged a huge demonstration in Havana on Tuesday.

But you know, in all of this, a key question remains: Why did Posada, who was living in Miami in hiding since March, suddenly come forward at the end instead of slipping away quietly without fanfare? Well, here's how one of his fellow exiles sees it.

(BEGIN VIDEO CLIP)

DURAN: He's saying that nobody's looking for him, that immigration and nobody's looking for him. I think that somehow he was provoking this action, and I think that the reason that he might be provoking this action is because he is a person who likes to go out with a bang.

(END VIDEOTAPE)

CANDIOTTI: Posada's attorney says that he will be refiling his asylum claim, based in part on his contention that he worked successfully for the CIA many, many years ago. He does have his hearing scheduled for June 13th in El Paso, Texas. His attorney says he will ask for a change of venue. Back to you, Wolf.

BLITZER: Susan, there's one suggestion i've heard that perhaps Italy might ask for his extradition because of that Italian tourist who was killed. Is that -- are you hearing that that's likely or even possible?

CANDIOTTI: Well, he would -- Italy would have the right to do that. We've been checking constantly with our sources in the Italian government. So far we are told that nothing is in the works in that regard. But we're told to continue checking.

So, I don't know if that's out of the picture or whether the United States behind the scenes would likely be working with some other country, might be willing to take him in probably in Central America.

BLITZER: It would be politically convenient to send him to Italy. There's no doubt about that.

All right. Susan Candiotti reporting. We'll check back with you. You check with them. We'll check with you. Susan Candiotti reporting.

Baghdad blood bank: The lengths many Iraqis have to do to give blood during the fight for Iraq.

And hazardous duty: Dramatic video showing exactly the kind of danger facing cops on America's streets.

Wiping out the swipe: There's new technology that will change the way all of us use our credit cards. We have details. Here's a question, though, is it secure?

(COMMERCIAL BREAK)

BLITZER: In Iraq, the unending bloodshed has caused a serious shortage at the blood back. That's left many Iraqis fending for themselves. CNN's Ryan Chilcote reports from Baghdad.

(BEGIN VIDEOTAPE)

RYAN CHILCOTE, CNN CORRESPONDENT (voice-over): These men are lending a helping hand to a growing number of their fellow Iraqis. At the Baghdad blood bank, the ebb and flow of violence is measured in pints of blood.

The explosion of car bombings is bleeding the bank's reserves dry. Violence accounts for 60 percent of demand. Under Saddam, the bank got by on 125 donors a day.

(on camera): The blood bank now processes 500 donors a day. Still, the doctors say that's only half the number of donors they need. Blood in Iraq is in demand like never before.

(voice-over): Hospitals will provide you with a blood transfusion, but only if you have a life-threatening emergency. And that's if they have the blood at all. Short of that, you need to either provide your own blood or have someone like a relative provide it for you.

UNIDENTIFIED MALE: He's giving because his ankle need the blood, because he infected by terrorists and he has a fracture in his leg and his arm and his shoulder.

CHILCOTE: Baghdad's young and old crowd the lobby to meet the need or look for others who can. If you don't have a donor with the right blood type, the blood bank allows you to trade, but that means waiting. It's the luck of the draw here.

Mohammed Halifa is AB positive, one of the rarest blood types. He's getting anxious.

MOHAMMED HALIFA, PATIENT: I came looking for a bottle of blood, and I haven't found anyone to donate. I was shot in the leg. Tomorrow, I'm going to have an operation on it. I've got my container with me for when I find it. I prayed maybe somebody would help me.

CHILCOTE: He's not the only one with a cooler.

People wait outside to help, but only for a price. These men will sell you half a pint of their blood from anywhere from $20 to $35, depending on the blood type. It's against the rules, yet tolerated.

But not everyone outside is as cold blooded as the merchants, Hidir Jafar is a taxi driver.

UNIDENTIFIED MALE (through translator): I'm here to give blood today. One of my passengers came here to get blood for his daughter. I told him I'd do it for free. He just had to pay me the taxi fare. I told him we're all wounded in today's Iraq.

CHILCOTE: Some of the hardest hit by the shortage of blood are those like 6-year-old Salam, who suffers from leukemia. He and his father spend much of their time visiting the blood bank. But there is hope, they found a donor today.

Ryan Chilcote, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: Let's take a look at some other stories making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): A 35-year-old electrician will be arraigned next week in connection with the 1998 car bomb attack that killed 29 people in Omagh, Northern Ireland. Prosecutors say the man, a suspected member of an Irish Republican Army splinter group, will face 29 counts of murder plus dozens of other charges.

New Zealand floods. A state of emergency is in effect in New Zealand's North Island where heavy rain has flooded part of the East Coast. One city received one quarter of its average annual rainfall in just 24 hours. Bridges have been washed away, and hundreds of people have been evacuated from their homes.

Singer's surgery. A spokes man for Kylie Minogue says the Australian pop star has checked into a Melbourne hospital for breast cancer surgery. The Grammy Award winning singer has sent a letter thanking fans for their support.

And that's a look around the world.

(END VIDEOTAPE)

BLITZER: Amazing video from a deputy's dashboard camera. He survives the accident, but many officers are not so lucky. Our Brian Todd standing by. He'll take a closer look at this unusual job danger.

And Larry King appearing in court. Why the CNN host was involved in the Michael Jackson trial. Today we'll tell you what happened.

And impacting every corner of the Earth. New information revealed about the massive earthquake that triggered last December's tsunami.

(COMMERCIAL BREAK)

BLITZER: Law enforcement is a very dangerous business. Everyone knows that. But it's not just the cops serving on S.W.A.T. teams or responding to armed robberies who put their lives on the line. CNN's Brian Todd is here with two stories that prove that point. Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, those stories illustrate a growing danger to police, the danger of a projectile weighing more than a ton flying right at an officer, often unseen until impact.

(BEGIN VIDEOTAPE)

(voice-over): Outside St. Paul, Minnesota, a sheriff's deputy is blasted off the interstate by a skidding pickup truck.

UNIDENTIFIED FEMALE: Officer down! Officer down!

TODD: Some 900 miles away, a car going much slower accidentally hits a reserve cop directing traffic at a busy Washington D.C. intersection. The deputy in Minnesota survives. The D.C. cop does not. Both incidents occurred over the past week. The Minnesota deputy recalls his moment of horror.

DEP. GLEN POTHEN, RAMSEY CO. SHERIFF'S DEPT.: I didn't realize what happened to me until I had a chance to review the film footage from the trooper's squad car, and I cannot believe that I am actually here.

TODD: This officer, now aware of just how dangerous the nation's roads are.

BRUCE MENDELSOHN, NAT'L LAW OFFICERS MEMORIAL: Any time a police officer is in the street, he or she is vulnerable, any time.

TODD: And the facts defy popular perception. According to the National Law Enforcement Officer's Memorial Fund, a group that has tracked the number of officers killed in the line of duty going back more than 200 years, 57 officers were shot and killed while on duty last year -- 73 were killed in vehicle accidents. Many more are injured every year.

On this wall, the names of some 17,000 American law enforcement officers killed in the line of duty since the late 1700s, about a third of them on the road, a problem that has only been getting worse.

MENDELSOHN: More officers are threatened by the increased traffic, the increased volume, and more erratic drivers, quite honestly.

TODD: Most officers die in high speed chases or other accidents, but many are struck while outside their vehicles at traffic stops, where experts say they're most vulnerable.

MENDELSOHN: All their attention is focused on that vehicle that they've stopped. They are not necessarily aware of what's going on around them because the threat is that vehicle in front of them.

TODD: So while an officer watches to see if a driver or passenger reaches for a weapon, their fate often is in the hands of an approaching driver who may be impaired or, so often these days, distracted.

(END VIDEOTAPE)

(on camera): Law enforcement groups are pushing for new laws to protect officers like the one now, ironically, on the books in Minnesota, where that deputy was hit. The law requires drivers to slow down to 10 miles an hour under the speed limit and give a lane's berth to an officer on the side of the road. Wolf?

BLITZER: All right, Brian Todd reporting. Thanks, Brian.

Today's news from the Michael Jackson child molestation trial involves a member of our own CNN family. Larry King, however, won't be testifying after he showed up earlier in court today.

CNN's Ted Rowlands is joining us now from outside the courthouse in Santa Maria, California. Ted, what happened?

TED ROWLANDS, CNN CORRESPONDENT: Well, Wolf, Larry King showed up bright and early today and was sworn in. He took the stand and testified in front of the judge only. The judge wanted to see exactly what Larry King was going to say before he would allow him to testify in front of the jury.

Larry King basically said that he had a conversation with attorney Larry Feldman, a Los Angeles-based attorney that represented the 1993 accuser against Jackson, and also had interacted with the current accuser and the current accuser's family. King says that Feldman told him that the mom in the case was a, quote, "wacko," possibly very good evidence for the defense. But in the end, after hearing Larry King, the judge said no, he would not allow Larry King's testimony in. So, within an hour of arriving here, Larry King left and presumably went home to get ready for his show on CNN tonight.

The other big news out of the -- out of Santa Maria this week is that the defense has articulated to the judge that they have significantly pared down their witness list, and it looks like they'll be wrapping up their case, as they said, sooner than later. Not in the next few weeks, but presumably in a week, week-and-a-half, they will be done. That will obviously affect the scheduling of it. We're not quite sure when they will finish, but it looks like sooner than later. Wolf?

BLITZER: So what does it look like in terms of how many more weeks this trial is going to continue on?

ROWLANDS: Let's assume that the defense finishes within two weeks. There will be probably a week of rebuttal from the prosecution, which is their right, and then you'll have closing arguments and other things that will be hashed out, in terms of jury instructions, which should only take a day or two. So, we're looking really at four weeks total before we can have a verdict in this case. That's assuming the defense finishes in the next two weeks.

BLITZER: Ted Rowlands reporting for us. Thanks, Ted, very much.

Coming up at the top of the hour, "LOU DOBBS TONIGHT." Lou is standing by in New York, now. He has a preview. Lou?

LOU DOBBS, HOST "LOU DOBBS TONIGHT": Wolf, yes, I am, now.

At 6:00 p.m. Eastern right here on CNN, we'll be reporting on the first head-to-head nuclear talks between the United States and North Korea in months. We'll have a special report.

Also, a massive highway spending bill stuffed with pork easily wins congressional support, as you might guess. But will President Bush veto that bill for the first time in his presidency? We'll have the report.

And has the conservative movement in this country passed into history? My guest tonight, Patrick Buchanan, who says American conservatives are at war with themselves. Also joining us will be Jesse Jackson, just returned from Mexico, with his meetings with President Vicente Fox. All of that and more in just minutes at the top of the hour. Please join us.

Now, back to Wolf Blitzer. Wolf?

BLITZER: Thanks very much, Lou. We'll be watching.

When we come back, the tsunami's stunning power. There's new information about the force behind these killer waves.

No swipe: new technology will make credit card purchases faster. But will it compromise our security? We'll have details.

(COMMERCIAL BREAK) BLITZER: Welcome back. More details are now emerging about last December's earthquake that triggered the deadly Asian tsunami. One example -- listen to this -- the power of that earthquake would be equivalent to 5 million Nagasaki atomic bombs. Let's get more now from CNN technology correspondent, Daniel Sieberg.

(BEGIN VIDEOTAPE)

DANIEL SIEBERG, CNN TECHNOLOGY CORRESPONDENT (voice-over): The human toll was staggering, hundreds of thousands of lives lost as tsunamis swept ashore across Asia in December. Now the scientific data on the quake that caused this disaster is being revealed. It is also stunning.

PROF. CHARLES AMMON, PENN STATE UNIVERSITY: Normally, a small earthquake might last less than a second. A moderate-sized earthquake might last a few seconds. This earthquake lasted between 500 to 600 seconds.

SIEBERG: The magnitude of this second largest earthquake on record has been raised from 9.0 to between 9.1 and 9.3, substantially more powerful than first thought. It released the same energy as a 100-gigaton bomb. That's as much as the entire United States uses in six months. And it ripped open the Earth's crust for a record 800 miles.

AMMON: That distance was traveled by the rupture in about or under 10 minutes.

SIEBERG: Information from many new technologies has left even veteran scientists in awe.

PROF. THORNE LAY, UNIVERSITY OF CALIFORNIA-SANTA CRUZ: The availability of this instrumentation was a real breakthrough for being able to see the complete rupture process of one of these truly monstrous events.

SIEBERG: Earth scientist Thorne Lay organized researchers worldwide to analyze quake data. Their findings are in this week's issue of the journal "Science."

(on camera): Near the quake's center, the earth shifted by up to 15 feet. Even 1,000 miles away in Sri Lanka, the movement was nearly four inches. And the big picture here, globally, this earthquake was large enough to basically vibrate the entire planet by as much as half an inch. Now, that's not enough for most of us to feel anything, but everywhere that seismic monitors existed on the Earth, they picked up vibrations.

(voice-over): Digital broadband seismometers picked up many of those vibrations. Other new tools added to scientists' understanding. Underwater cameras documented the huge crack in the ocean floor. Ocean buoys and sonar from the British navy helped the analysis. Two satellites in the right place at the right time also helped.

LAY: It's two hours after the earthquake has occurred, the wave is spreading out through the Bay of Bengal. Two satellites went over that saw the south going wave and the north going part of the wave. That was an amazing record. We've never seen such a record.

SIEBERG: It may be human nature to want to forget these disturbing images, but Mother Nature will do it again. And scientists hope all this new data will someday help tame the destruction with reliable tsunami warning systems.

AMMON: Technology has limits, but technology with education is probably the best bet.

SIEBERG: Daniel Sieberg, CNN, Atlanta.

(END VIDEOTAPE)

BLITZER: This footnote -- 170,000 people are confirmed dead in those tsunamis, and another 170,000, but probably a lot more, are still listed as missing.

When we come back, losing the swipe. Changes designed for your charging convenience. But could they also make it easier for thieves? We'll take a closer look.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE (voice-over): This week in history in 1881, Clara Barton founded the American Red Cross in Washington, D.C. She went on to head the organization for 23 years.

Amelia Earhart took to the sky on May 21st, 1932, to become the first woman to fly solo across the Atlantic Ocean.

And Oliver Brown led the fight in what is now known as a judiciary landmark. The 1954 U.S. Supreme Court decision in the Brown versus Board of Education case declared it was unconstitutional to separate educational facilities by race.

And that is this week in history.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: It's official. U.S. Airways and America West have agreed to merge and adopt the U.S. Airways name. Officials say the goal in combining the struggling seventh and eighth largest airlines is to create a stronger national carrier better able to compete against low-cost rivals.

Waving credit cards. That may be the future at checkout aisles and elsewhere. Our senior correspondent Allan Chernoff standing by in New York with more -- Allan.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Wolf, say goodbye to the swipe and hello to the wave. That's exactly what credit card companies have in mind for us as they use new technology to make it easier to charge.

(BEGIN VIDEOTAPE)

CHERNOFF (voice-over): Using your credit card will soon be that simple. A computer chip and tiny antenna embedded into the card make it possible for a scanner at the retail counter to quickly complete the transaction.

DAVID BONALLE, VICE PRESIDENT, AMERICAN EXPRESS: A consumer can simply take their Express card, wave it at a special reader at the point of sale. They don't have to sign. They simply take their receipt, and they're on their way.

CHERNOFF: American Express has been testing the new cards in Phoenix for two years. Next month, the company begins a nationwide rollout. Chase Bank also will unveil its version next month.

It's certainly faster than swiping and signing, but how secure is it?

PROF. AVI RUBIN, JOHNS HOPKINS UNIVERSITY: It's very, very easy to get the security wrong when you do something like this, because you're constrained by the low power in these battery-less devices. The devices -- the cards don't have batteries on them, so the circuits can only compute very simple functions. And so getting security with such a low power environment is quite difficult.

CHERNOFF: The card companies say they've addressed that issue. Every transaction creates a new digital signature for added security.

THOMAS O'DONNELL, CHASE CARD SERVICES: For the customer, what they need to recognize is that -- it is a safe and secure process from the minute they hold their card up to that reader.

(END VIDEOTAPE)

CHERNOFF: In a nation that simply hates to wait, the card companies believe those simple waves will have more Americans reaching for plastic instead of cash -- Wolf.

BLITZER: Allan Chernoff reporting. Thanks, Allan, very much.

That's it for me. "LOU DOBBS TONIGHT" starts right now, Lou standing by in New York -- Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Have a great evening, Wolf.

END

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


Aired May 19, 2005 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Speaking now and shortly after, we heard from the father of those two missing children. The father making an emotional appeal to the abductor or abductors to go forward. WOLF BLITZER REPORTS starts right now.
(BEGIN VIDEOTAPE)

BLITZER (voice-over): Face to face: Public threats, private talks. Can a dialogue with North Korea head off a nuclear showdown?

Trousers and T-shirts: a crack down on imports from China. Will it save American jobs? Or just make your clothing cost more?

Tired of swiping? Now, a new type of credit card, let's you wave or flash and be on your way without even a signature.

ANNOUNCER: This is WOLF BLITZER REPORTS for Thursday, May 19, 2005.

(END VIDEOTAPE)

BLITZER: Thanks for joining us. Just a few days ago, the United States warned that North Korea might be getting ready to test a nuclear weapon. And the president's national security adviser Stephen Hadley told me, that if that happened -- and I'm quoting now -- "action would have to be taken."

But now it turns out that the U.S. had by then quietly resumed direct talks with North Korea. Something the North has been demanding. What sort of message does that send? We begin our coverage with our White House correspondent Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well Wolf, it certainly is an indication that pressure is mounting on all sides here. And perhaps an indication that the White House wants to say that, if diplomacy fails, they're not to blame.

(BEGIN VIDEOTAPE)

BASH (voice-over): They offered no incentives, no new proposals, but U.S. officials had a rare face to face meeting with North Korean diplomats near the U.N. last week, imploring them to return to negotiations over their nuclear program.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: The North Koreans probably read different things about what our policy is or is not. And so every now and then, when we think it's useful, we find it useful -- we sit down with them directly and tell them the story directly of what our policy is.

BASH: The Bush administration will only negotiate with Pyongyang if Japan, Russia, South Korea and China are involved. But those six- way talks have been stalled for nearly a year. And U.S. officials are under pressure to revive them.

South Korea tried this week as well, even offered new incentives, all amid increasing concern North Korea is advancing its nuclear capability. Estimates they already have two to six weapons and worries they may conduct a provocative test.

STEPHEN HADLEY, NATIONAL SECURITY ADVISER: We've seen some activity that is consistent with possible preparations for a nuclear test. We don't know for sure. As you know, North Korea is a very hard target.

BASH: U.S. envoy Joseph Tetrani (ph) led the talks, the first since December, as a good will gesture to North Korea, long demanding more direct American engagement and to remind them face to face Washington still has a proposal on the table to offer energy and security if Pyongyang halts all nuclear development.

(END VIDEOTAPE)

BASH: And this new diplomatic effort came almost simultaneously with the White House warning that, if talks don't resume soon and that situation deteriorates even further, that perhaps the administration may seek other options, like perhaps sanctions against North Korea at the United Nations -- Wolf.

BLITZER: Dana Bash at the White House. Thanks very much.

At the same time, the two Koreas wrapped up a meeting of their own today in a border town. It was their first face to face session in ten months. South Korea couldn't persuade the North to return to those six-nation nuclear negotiations. And a he joint statement made no mention of the nuclear standoff. But the two nations did agree to meet again next month.

In the meantime, the South agreed to ship 200,000 tons of fertilizer to help ease its neighbor's food shortages. And they are significant.

The PATRIOT Act was passed just 45 days after the 9/11 attacks in a bid to help battle terrorism. Critics complain it goes too far, but now there's a bid to make it even tougher. Our justice correspondent Kelli Arena is standing by. She has the story -- Kelli.

KELLI ARENA, CNN CORRESPONDENT: Wolf, Senate Republicans are set to introduce a bill that would give the FBI more power to subpoena certain records. Now the bill is not public. It's being written by the powerful head of the Senate Intelligence Committee and is expected to be considered next week in a closed session. (BEGIN VIDEOTAPE)

ARENA (voice-over): If the administration gets its way, FBI agents would be able to obtain a variety of personal records from businesses and other entities without an OK from a judge or a grand jury.

ROBERT MUELLER, FBI DIRECTOR: We may get information from the CIA or another agency that a person has come into the United States and is staying at a particular hotel in Washington D.C. with an intent to link up with somebody else to conduct a terrorist attack in New York City. We need the information from the hotel.

ARENA: The vehicle would be administrative subpoenas, which would clear the way in a hurry, because they can be approved by either the FBI director or agents in charge of local field offices.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Getting information quickly is really important. And I actually was around when the PATRIOT Act was passed. I think it has been a tremendous positive value added element of the war against terror.

ARENA: Federal agents for years have had the authority to issue administrative subpoenas when investigating crimes such as healthcare fraud or drug trafficking.

MUELLER: I think there are approximately 300 separate statutes that provide for the utility, or the use of administrative subpoenas. That makes very good sense for us to have that tool available when it comes to national security investigations.

ARENA: But civil rights advocates worry the proposed power is too broad and will be used in cases that have nothing to do with national security.

ANTHONY ROMERO, ACLU EXECUTIVE DIRECTOR: This would allow the government to essentially get access to people's medical records, personnel records, financial records, without any judicial oversight or any judicial review.

ARENA: The subpoenas can be challenged in court. And the bill is expected to require the administration to tell Congress twice a year specifically how the new power is being used. But Romero says congressional oversight is not enough.

ROMERO: Public reporting on how these powers are being used cannot be placed in change of judicial review.

ARENA: The proposal is part of a larger effort to renew parts of the PATRIOT Act, which expire at the end of the year.

(END VIDEOTAPE)

ARENA: Now it's not at all clear whether there's enough support to make those provisions permanent let alone expand powers even further, Wolf. BLITZER: Kelli, you know, when I interviewed Alberto Gonzales, the new attorney general, a few weeks ago, he seemed much more receptive to thinking about considering some changes in the PATRIOT Act than John Ashcroft appeared to be willing to do when he was the attorney general. You cover the Justice Department. Do you sense it's just a change in style, or is there a substantive difference between Ashcroft and Gonzales?

ARENA: There is not a difference. There is a change in style. At least this attorney general is willing to hear and talk, according to those on the Hill, but this administration supports every bit of the PATRIOT Act. They have endorsed some very minor changes in some provisions, but they want each of those eight provisions that sunset at the end of this year to be made permanent.

BLITZER: Kelli Arena, our Justice Correspondent. Thanks very much.

The House of Representatives, meanwhile, wants to change the system the government uses to issue security alerts. It's passed a bill that would make the current color code system optional, but instead require alerts to include detailed information about potential targets and possible responses.

Before it becomes law, the House plan would have to be approved by the Senate and signed into law by the president of the United States.

To our viewers, please stay tuned to CNN day and night for the most reliable news about your security.

They're written on your clothing labels. We're talking about the words made in China. now a new move by the United States government could make your next shopping trip a little bit more expensive. We'll explain what's going on.

Danger on duty: A frightening display of the threat to cops on patrol. Why officers need protection when they protect you.

And the future of plastic. A revolution taking place in the credit card industry. But will this new method of payment be secure? Stay with us.

(COMMERCIAL BREAK)

BLITZER: There's been a sharp increase in mortar and rock attacks on Jewish settlements in Gaza and inside Israel itself. Israel says the Palestinian Authority isn't handling the situation and warns it will use all necessary means to put an end to the shelling.

CNN's John Vause reports from Gaza.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): Palestinian against Palestinian. When Gaza Police tried to stop Hamas militants from firing mortar rounds at nearby Jewish settlements, they come under gun fire and faced an angry mob throwing stones. The police retreated despite Israeli demands that Palestinian Authority stopped the attacks.

And within 24 hours, Hamas had fired more than three dozen rockets and mortar shells at settlements and into Israel. The Israeli government now says it will stop the mortar attacks. On Wednesday, a missile strike left one Hamas militant dead. In Gaza, the three- month-old cease fire looks increasingly fragile. Palestinian Authority President Mahmoud Abbas had tried to woo the militants, even offering them jobs in his security forces.

MAHMOUD ABBAS, PRES. PALESTINIAN AUTHORITY (through translator): So we prefer this approach over another approach, which is trying to disarm by force, which would lead to a civil war.

VAUSE (on camera): Mahmoud Abbas has been trying to avoid a direct confrontation with Palestinian factions. Part of that has been his job as been more militant schemes. The more senior and better paying positions are being offered to those wounded by Israeli forces or spent time in an Israeli jail. But he's also demanding those who take the jobs hand in their illegal and unregistered weapons.

(voice-over): Hamas has refused outright.

UNIDENTIFIED MALE (through translator): Joining the Palestinian security forces is not negotiable now. We won't give up our weapons. Whoever is asking us to do so, he has to have an alternative to defend the Palestinian people.

VAUSE: Even the Al Aqsa Martyrs Brigrade, the military offshoot of Abbas' own Fatah political party says now is not the time to trade their weapons for a job directing traffic.

UNIDENTIFIED MALE (through translator): It is our right to protect our homes against Israeli aggression and they're right to keep their weapons.

VAUSE: And both militant groups admit they've been using the cease fire to rearm.

UNIDENTIFIED MALE (through translator): It is no secret what Hamas has been saying regarding weapons. It is our duty.

VAUSE: A direct challenge to both Mahmoud Abbas and to Israel as well.

John Vause, CNN, Gaza.

(END VIDEOTAPE)

BLITZER: Here at home, it began last week with cotton trousers, shirts, and underwear. And now the Bush administration has produced quotas on other types of clothing and textiles from China. This follows a huge increase on such imports. U.S. manufacturers are cheering, but retailers warn the American consumer will wind up paying more.

Let's go live to CNN's Mary Snow in New York. She has details -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, the tensions are between U.S. and China will be played out in the aisles of U.S. stores. Of all clothing imports into the U.S., the Commerce Department points out that only 20 percent of those imports come from China. However, those imports have been growing quickly.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Susan Gibbons spent $26 on sheets at Kmart, but she says she would spend more if she knew her products were made in the United States.

SUSAN GIBBONS, SHOPPER: If I were convinced -- see, part of this is depending on being able to be convinced that, when something we buy is made in America -- I would pay 20 percent more.

SNOW: From discounters to designers, there's no question that the made in China label cuts costs. The manager for designer Derek Lam had this $1,900 designer dress made in Italy.

JAN SCHLOTTMAN, DEREK LAM: You could sell it for $350 if you would produce it in China, but it wouldn't like that.

SNOW: Trade groups representing manufacturers say, with the savings comes a cost.

AUGUSTINE TANTILLO, PRES. AMTAC: The consumer is also paying an enormous price, such as the loss of millions of manufacturing jobs, frozen wages, lost health and pension benefits for these workers.

SNOW: The American Manufacturing Trade Action Coalition says 400,000 jobs have been lost since January of 2001. It supports quotas on clothing imports from China.

But demand is growing for that clothing with a made in China label. Imports have been soaring all year. A trade group representing retailers opposes the quotas, even though they were expected. But what does it mean for consumers?

JULIA HUGES, USA-ITA: Higher prices unfortunately. We hate to have that message, but it's going to definitely push prices up as companies are struggling to make sure that they have the product in the stores that consumers wants to buy.

SNOW: Consumers like Paul Maxine, who say people in this country should be looking forward, not back.

PAUL MAXON, CONSUMER: I think we're better suited, better educational based to do things a little bit higher up the food chain than making clothing.

SNOW: There is debate over how many jobs can be saved. While one economist says these quotas can reduce the number of jobs lost for now, it's not a long term solution.

PIETRA RIVOLI, GEORGETOWN UNIVERSITY: All bets are off as of 2008. So the U.S. and the EU have the right to impose these limits up through the year 2008. After that, no more quotas.

(END VIDEOTAPE)

SNOW: And for the immediate future, one trade group representing retailers predicts the prices for consumers could go up between 5 percent and 20 percent by the end of the year -- Wolf.

BLITZER: Mary Snow reporting from us from New York. Thanks, Mary, very much.

Won't other countries just simply make up the difference and sell more clothing to the U.S.? And will Americans benefit at all from these trade barriers? Joining us now from the North Lawn of the White House is president's economic adviser Allen Hubbard. Mr. Hubbard, thanks very much for joining us.

Let's talk a little bit about this trade off. Is it as simple as you lose American jobs in manufacturing, 400,000, Mary just said, over the past few years. But millions of consumers are not going to wind up spending more at Wal-Mart or Kmart or other stores around the country. How do you balance that tradeoff?

ALLEN HUBBARD, WHITE HOUSE ECONOMIC ADVISER: Well, obviously, we very much believe in a balance. We very much believe in free trade.

At the same time, we believe in a level playing field. And what the United States is doing is working through the World Trade Organization, the WTO agreement with China and enforcing those agreements. And making sure that American manufacturers are treated fairly, that there is a level playing field. And that both the American consumer as well as the American worker are protected while supporting free trade.

This president has an incredible record on free trade. We have 12 to 14 bilateral agreements during his 4 1/2 years in office. He continues to push for free trade agreements. CAFTA, the Central American Free Trade agreement, is now before Congress, which he very much supports. It's very important to get passed.

So, again, this president very much believes in free trade and believes it benefits all Americans.

BLITZER: If you curtail the imports from China, if China can't export as much to the United States, who's to say that other countries, Taiwan or Indonesia or Malaysia or India, other countries around the world won't pick up that slack? Who's going to guarantee that those jobs, that those imports will be translated into American factories? Is that your goal?

HUBBARD: Well, as you know, there have been limits on how much China could sell in terms of textiles up until the end of last year, and those limits were removed. And what we're doing is subscribing to the World Trade Organization agreements that allow us to limit the growth in that trade.

Now, where it will go, you know, as long as it's a level playing field, the president believes very strongly that the American worker will be competitive, American industry will be competitive, and the American consumer and the American worker will be well served.

BLITZER: Let's talk a little bit about Social Security while I have you. I don't know if you saw the statement issued by Robert Posen, an economist whose economic plan on Social Security the president seems to have endorsed. He has issued a statement, and I'll read it to you. He says, "the president should not insist on carving out these private savings accounts as part of the Social Security program if the Democrats support an overall legislative package for Social Security reform that is otherwise satisfactory to him."

Is the president ready to give up on those private accounts if everything else with the Democrats can be worked out? Because they say they don't even want to talk to you as long as you keep those private accounts on the table.

HUBBARD: The president is totally committed to voluntary personal retirement accounts. I just came back from Wisconsin with him today. He repeated it over and over again. He believes very strongly, people should have the option of taking a portion of their payroll taxes, investing them in a voluntary personal retirement account that will be their nest egg, that will grow over time, will grow faster than if they left it in the Social Security administration. It will be something they can count on when they retire, and in the unfortunate situation, if they die prior to -- pass away prior to retirement, it can be passed on to their heirs. The president is committed to personal retirement accounts.

BLITZER: So you're rejecting Pozen's recommendation?

HUBBARD: Again, the president's totally committed to voluntary personal retirement accounts. He thinks it's the only fair way to solve this problem for younger people in America.

BLITZER: Look at this latest NBC News/"Wall Street Journal" poll number on the president's handling of the economy: 43 percent approve of the way he's handling the economy, 51 percent disapprove. Why do you think a majority now disapproves of the way he's handling the economy?

HUBBARD: Well, obviously, gasoline and petroleum prices have gone up, which make everyone a little unhappy about the economy, and the president's particularly concerned about that, when it comes to lower-income people, when they fill up their tanks and it takes money away from their other needs and also for small business people. It robs them of the opportunity to grow their business, hire new workers, invest in new equipment.

At the same time, we're very proud of what's -- of how the economy's doing. We added 274,000 jobs last month. We've added almost 850,000 jobs since the beginning of the year. We're growing at over 3 percent a year. We grew over 4 percent last year. Inflation, core inflation, which was just reported yesterday, was actually at zero. Again, we're very positive on the future of the economy.

BLITZER: One final question, Mr. Hubbard. What is your assessment for the balance of this year? How will the economy grow?

HUBBARD: Our expectation is around 3.5 percent. Also, the Blue Chip Economist -- they're independent of this administration -- they currently estimate around 3.4 percent. Again, that's very, very healthy growth. Our unemployment rate is 5.2 percent. It's dropped from a peak of 6.3 percent. It's lower than it was on average during the '70s, '80s, or '90s, and, again, we feel very good about it.

At the same time, the president is committed to working, doing everything he can to get oil prices down so gasoline will be less expensive. That's why he has this energy bill on Capitol Hill and looks forward to Congress passing this bill.

BLITZER: Allen Hubbard is the director of the National Economic Counsel, special assistant to the president for economic policy. Mr. Hubbard, thanks very much for joining us. We hope you'll come back.

HUBBARD: Thank you for this opportunity.

BLITZER: We'll take a quick break. When we come back, Castro's foe in United States' custody right now. Charges brought against Luis Posada Carriles, the man who sparked major protests in Cuba earlier this week.

Nature's furry: a stunning discovery about the killer quake that triggered the deadly tsunami. You'll want to stick around for this information.

And King in court, how CNN's own Larry King got caught up in the Michael Jackson child molestation trial today. We'll tell you what happened.

(COMMERCIAL BREAK)

BLITZER: To put it mildly, it's an awkward situation for the Bush administration. A militant Cuban exile condemned by Fidel Castro's government as a terrorist was charged today with entering the United States illegally. That raises the possibility he might be deported back to Cuba, where he could face the death penalty.

Our national correspondent Susan Candiotti is standing by in Miami. She's been covering this story from the start. Susan?

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hello, Wolf.

Of course, the likelihood that the Bush administration would deport suspected terrorist Luis Posada Carriles to Cuba is slim to none, so says the Department of Homeland Security. Nor is it likely he would be sent to Venezuela, that has filed extradition papers on him because of the close relationship that country has with Fidel Castro.

So, where would he go if deported? Well, that has yet to be decided, but certainly it would have to be a country willing to take him in. For now, Posada's attorney says that he will fight to remain in the United States.

Now, on Tuesday at a news conference, Posada said he was withdrawing his asylum claim to stay here and was going to slip out of the country. A short time later, that's when federal agents took him into custody. Posada admitted that he crossed the border illegally from Mexico and today, that's what he was charged with.

(BEGIN VIDEO CLIP)

ALFREDO DURAN, CUBAN CMTE FOR DEMOCRACY: The charging document contains allegations of being unlawfully present in the United States, and that is it. There are no charges of anything else, whether it be terrorism or other allegations.

(END VIDEO CLIP)

CANDIOTTI: The subject of terrorism could come up if Posada wanted a bond hearing. Then the United States could bring up that kind of information. Now, he is suspected of helping to plan the bombing of a Cubana airliner in 1976 that killed 73 people. Posada denies it, but FBI documents suggested he played a role.

After hotel bombings in Havana in 1997 that killed an Italian tourist, Posada claimed responsibility, then later said he made it up. In 2000 he was convicted in a plot to assassinate Fidel Castro in Panama, and C-4 explosives were seized. Well, Cuba's president continues to accuse President Bush of hypocrisy for not turning Posada over for prosecution of his alleged crimes, and staged a huge demonstration in Havana on Tuesday.

But you know, in all of this, a key question remains: Why did Posada, who was living in Miami in hiding since March, suddenly come forward at the end instead of slipping away quietly without fanfare? Well, here's how one of his fellow exiles sees it.

(BEGIN VIDEO CLIP)

DURAN: He's saying that nobody's looking for him, that immigration and nobody's looking for him. I think that somehow he was provoking this action, and I think that the reason that he might be provoking this action is because he is a person who likes to go out with a bang.

(END VIDEOTAPE)

CANDIOTTI: Posada's attorney says that he will be refiling his asylum claim, based in part on his contention that he worked successfully for the CIA many, many years ago. He does have his hearing scheduled for June 13th in El Paso, Texas. His attorney says he will ask for a change of venue. Back to you, Wolf.

BLITZER: Susan, there's one suggestion i've heard that perhaps Italy might ask for his extradition because of that Italian tourist who was killed. Is that -- are you hearing that that's likely or even possible?

CANDIOTTI: Well, he would -- Italy would have the right to do that. We've been checking constantly with our sources in the Italian government. So far we are told that nothing is in the works in that regard. But we're told to continue checking.

So, I don't know if that's out of the picture or whether the United States behind the scenes would likely be working with some other country, might be willing to take him in probably in Central America.

BLITZER: It would be politically convenient to send him to Italy. There's no doubt about that.

All right. Susan Candiotti reporting. We'll check back with you. You check with them. We'll check with you. Susan Candiotti reporting.

Baghdad blood bank: The lengths many Iraqis have to do to give blood during the fight for Iraq.

And hazardous duty: Dramatic video showing exactly the kind of danger facing cops on America's streets.

Wiping out the swipe: There's new technology that will change the way all of us use our credit cards. We have details. Here's a question, though, is it secure?

(COMMERCIAL BREAK)

BLITZER: In Iraq, the unending bloodshed has caused a serious shortage at the blood back. That's left many Iraqis fending for themselves. CNN's Ryan Chilcote reports from Baghdad.

(BEGIN VIDEOTAPE)

RYAN CHILCOTE, CNN CORRESPONDENT (voice-over): These men are lending a helping hand to a growing number of their fellow Iraqis. At the Baghdad blood bank, the ebb and flow of violence is measured in pints of blood.

The explosion of car bombings is bleeding the bank's reserves dry. Violence accounts for 60 percent of demand. Under Saddam, the bank got by on 125 donors a day.

(on camera): The blood bank now processes 500 donors a day. Still, the doctors say that's only half the number of donors they need. Blood in Iraq is in demand like never before.

(voice-over): Hospitals will provide you with a blood transfusion, but only if you have a life-threatening emergency. And that's if they have the blood at all. Short of that, you need to either provide your own blood or have someone like a relative provide it for you.

UNIDENTIFIED MALE: He's giving because his ankle need the blood, because he infected by terrorists and he has a fracture in his leg and his arm and his shoulder.

CHILCOTE: Baghdad's young and old crowd the lobby to meet the need or look for others who can. If you don't have a donor with the right blood type, the blood bank allows you to trade, but that means waiting. It's the luck of the draw here.

Mohammed Halifa is AB positive, one of the rarest blood types. He's getting anxious.

MOHAMMED HALIFA, PATIENT: I came looking for a bottle of blood, and I haven't found anyone to donate. I was shot in the leg. Tomorrow, I'm going to have an operation on it. I've got my container with me for when I find it. I prayed maybe somebody would help me.

CHILCOTE: He's not the only one with a cooler.

People wait outside to help, but only for a price. These men will sell you half a pint of their blood from anywhere from $20 to $35, depending on the blood type. It's against the rules, yet tolerated.

But not everyone outside is as cold blooded as the merchants, Hidir Jafar is a taxi driver.

UNIDENTIFIED MALE (through translator): I'm here to give blood today. One of my passengers came here to get blood for his daughter. I told him I'd do it for free. He just had to pay me the taxi fare. I told him we're all wounded in today's Iraq.

CHILCOTE: Some of the hardest hit by the shortage of blood are those like 6-year-old Salam, who suffers from leukemia. He and his father spend much of their time visiting the blood bank. But there is hope, they found a donor today.

Ryan Chilcote, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: Let's take a look at some other stories making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): A 35-year-old electrician will be arraigned next week in connection with the 1998 car bomb attack that killed 29 people in Omagh, Northern Ireland. Prosecutors say the man, a suspected member of an Irish Republican Army splinter group, will face 29 counts of murder plus dozens of other charges.

New Zealand floods. A state of emergency is in effect in New Zealand's North Island where heavy rain has flooded part of the East Coast. One city received one quarter of its average annual rainfall in just 24 hours. Bridges have been washed away, and hundreds of people have been evacuated from their homes.

Singer's surgery. A spokes man for Kylie Minogue says the Australian pop star has checked into a Melbourne hospital for breast cancer surgery. The Grammy Award winning singer has sent a letter thanking fans for their support.

And that's a look around the world.

(END VIDEOTAPE)

BLITZER: Amazing video from a deputy's dashboard camera. He survives the accident, but many officers are not so lucky. Our Brian Todd standing by. He'll take a closer look at this unusual job danger.

And Larry King appearing in court. Why the CNN host was involved in the Michael Jackson trial. Today we'll tell you what happened.

And impacting every corner of the Earth. New information revealed about the massive earthquake that triggered last December's tsunami.

(COMMERCIAL BREAK)

BLITZER: Law enforcement is a very dangerous business. Everyone knows that. But it's not just the cops serving on S.W.A.T. teams or responding to armed robberies who put their lives on the line. CNN's Brian Todd is here with two stories that prove that point. Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, those stories illustrate a growing danger to police, the danger of a projectile weighing more than a ton flying right at an officer, often unseen until impact.

(BEGIN VIDEOTAPE)

(voice-over): Outside St. Paul, Minnesota, a sheriff's deputy is blasted off the interstate by a skidding pickup truck.

UNIDENTIFIED FEMALE: Officer down! Officer down!

TODD: Some 900 miles away, a car going much slower accidentally hits a reserve cop directing traffic at a busy Washington D.C. intersection. The deputy in Minnesota survives. The D.C. cop does not. Both incidents occurred over the past week. The Minnesota deputy recalls his moment of horror.

DEP. GLEN POTHEN, RAMSEY CO. SHERIFF'S DEPT.: I didn't realize what happened to me until I had a chance to review the film footage from the trooper's squad car, and I cannot believe that I am actually here.

TODD: This officer, now aware of just how dangerous the nation's roads are.

BRUCE MENDELSOHN, NAT'L LAW OFFICERS MEMORIAL: Any time a police officer is in the street, he or she is vulnerable, any time.

TODD: And the facts defy popular perception. According to the National Law Enforcement Officer's Memorial Fund, a group that has tracked the number of officers killed in the line of duty going back more than 200 years, 57 officers were shot and killed while on duty last year -- 73 were killed in vehicle accidents. Many more are injured every year.

On this wall, the names of some 17,000 American law enforcement officers killed in the line of duty since the late 1700s, about a third of them on the road, a problem that has only been getting worse.

MENDELSOHN: More officers are threatened by the increased traffic, the increased volume, and more erratic drivers, quite honestly.

TODD: Most officers die in high speed chases or other accidents, but many are struck while outside their vehicles at traffic stops, where experts say they're most vulnerable.

MENDELSOHN: All their attention is focused on that vehicle that they've stopped. They are not necessarily aware of what's going on around them because the threat is that vehicle in front of them.

TODD: So while an officer watches to see if a driver or passenger reaches for a weapon, their fate often is in the hands of an approaching driver who may be impaired or, so often these days, distracted.

(END VIDEOTAPE)

(on camera): Law enforcement groups are pushing for new laws to protect officers like the one now, ironically, on the books in Minnesota, where that deputy was hit. The law requires drivers to slow down to 10 miles an hour under the speed limit and give a lane's berth to an officer on the side of the road. Wolf?

BLITZER: All right, Brian Todd reporting. Thanks, Brian.

Today's news from the Michael Jackson child molestation trial involves a member of our own CNN family. Larry King, however, won't be testifying after he showed up earlier in court today.

CNN's Ted Rowlands is joining us now from outside the courthouse in Santa Maria, California. Ted, what happened?

TED ROWLANDS, CNN CORRESPONDENT: Well, Wolf, Larry King showed up bright and early today and was sworn in. He took the stand and testified in front of the judge only. The judge wanted to see exactly what Larry King was going to say before he would allow him to testify in front of the jury.

Larry King basically said that he had a conversation with attorney Larry Feldman, a Los Angeles-based attorney that represented the 1993 accuser against Jackson, and also had interacted with the current accuser and the current accuser's family. King says that Feldman told him that the mom in the case was a, quote, "wacko," possibly very good evidence for the defense. But in the end, after hearing Larry King, the judge said no, he would not allow Larry King's testimony in. So, within an hour of arriving here, Larry King left and presumably went home to get ready for his show on CNN tonight.

The other big news out of the -- out of Santa Maria this week is that the defense has articulated to the judge that they have significantly pared down their witness list, and it looks like they'll be wrapping up their case, as they said, sooner than later. Not in the next few weeks, but presumably in a week, week-and-a-half, they will be done. That will obviously affect the scheduling of it. We're not quite sure when they will finish, but it looks like sooner than later. Wolf?

BLITZER: So what does it look like in terms of how many more weeks this trial is going to continue on?

ROWLANDS: Let's assume that the defense finishes within two weeks. There will be probably a week of rebuttal from the prosecution, which is their right, and then you'll have closing arguments and other things that will be hashed out, in terms of jury instructions, which should only take a day or two. So, we're looking really at four weeks total before we can have a verdict in this case. That's assuming the defense finishes in the next two weeks.

BLITZER: Ted Rowlands reporting for us. Thanks, Ted, very much.

Coming up at the top of the hour, "LOU DOBBS TONIGHT." Lou is standing by in New York, now. He has a preview. Lou?

LOU DOBBS, HOST "LOU DOBBS TONIGHT": Wolf, yes, I am, now.

At 6:00 p.m. Eastern right here on CNN, we'll be reporting on the first head-to-head nuclear talks between the United States and North Korea in months. We'll have a special report.

Also, a massive highway spending bill stuffed with pork easily wins congressional support, as you might guess. But will President Bush veto that bill for the first time in his presidency? We'll have the report.

And has the conservative movement in this country passed into history? My guest tonight, Patrick Buchanan, who says American conservatives are at war with themselves. Also joining us will be Jesse Jackson, just returned from Mexico, with his meetings with President Vicente Fox. All of that and more in just minutes at the top of the hour. Please join us.

Now, back to Wolf Blitzer. Wolf?

BLITZER: Thanks very much, Lou. We'll be watching.

When we come back, the tsunami's stunning power. There's new information about the force behind these killer waves.

No swipe: new technology will make credit card purchases faster. But will it compromise our security? We'll have details.

(COMMERCIAL BREAK) BLITZER: Welcome back. More details are now emerging about last December's earthquake that triggered the deadly Asian tsunami. One example -- listen to this -- the power of that earthquake would be equivalent to 5 million Nagasaki atomic bombs. Let's get more now from CNN technology correspondent, Daniel Sieberg.

(BEGIN VIDEOTAPE)

DANIEL SIEBERG, CNN TECHNOLOGY CORRESPONDENT (voice-over): The human toll was staggering, hundreds of thousands of lives lost as tsunamis swept ashore across Asia in December. Now the scientific data on the quake that caused this disaster is being revealed. It is also stunning.

PROF. CHARLES AMMON, PENN STATE UNIVERSITY: Normally, a small earthquake might last less than a second. A moderate-sized earthquake might last a few seconds. This earthquake lasted between 500 to 600 seconds.

SIEBERG: The magnitude of this second largest earthquake on record has been raised from 9.0 to between 9.1 and 9.3, substantially more powerful than first thought. It released the same energy as a 100-gigaton bomb. That's as much as the entire United States uses in six months. And it ripped open the Earth's crust for a record 800 miles.

AMMON: That distance was traveled by the rupture in about or under 10 minutes.

SIEBERG: Information from many new technologies has left even veteran scientists in awe.

PROF. THORNE LAY, UNIVERSITY OF CALIFORNIA-SANTA CRUZ: The availability of this instrumentation was a real breakthrough for being able to see the complete rupture process of one of these truly monstrous events.

SIEBERG: Earth scientist Thorne Lay organized researchers worldwide to analyze quake data. Their findings are in this week's issue of the journal "Science."

(on camera): Near the quake's center, the earth shifted by up to 15 feet. Even 1,000 miles away in Sri Lanka, the movement was nearly four inches. And the big picture here, globally, this earthquake was large enough to basically vibrate the entire planet by as much as half an inch. Now, that's not enough for most of us to feel anything, but everywhere that seismic monitors existed on the Earth, they picked up vibrations.

(voice-over): Digital broadband seismometers picked up many of those vibrations. Other new tools added to scientists' understanding. Underwater cameras documented the huge crack in the ocean floor. Ocean buoys and sonar from the British navy helped the analysis. Two satellites in the right place at the right time also helped.

LAY: It's two hours after the earthquake has occurred, the wave is spreading out through the Bay of Bengal. Two satellites went over that saw the south going wave and the north going part of the wave. That was an amazing record. We've never seen such a record.

SIEBERG: It may be human nature to want to forget these disturbing images, but Mother Nature will do it again. And scientists hope all this new data will someday help tame the destruction with reliable tsunami warning systems.

AMMON: Technology has limits, but technology with education is probably the best bet.

SIEBERG: Daniel Sieberg, CNN, Atlanta.

(END VIDEOTAPE)

BLITZER: This footnote -- 170,000 people are confirmed dead in those tsunamis, and another 170,000, but probably a lot more, are still listed as missing.

When we come back, losing the swipe. Changes designed for your charging convenience. But could they also make it easier for thieves? We'll take a closer look.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE (voice-over): This week in history in 1881, Clara Barton founded the American Red Cross in Washington, D.C. She went on to head the organization for 23 years.

Amelia Earhart took to the sky on May 21st, 1932, to become the first woman to fly solo across the Atlantic Ocean.

And Oliver Brown led the fight in what is now known as a judiciary landmark. The 1954 U.S. Supreme Court decision in the Brown versus Board of Education case declared it was unconstitutional to separate educational facilities by race.

And that is this week in history.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: It's official. U.S. Airways and America West have agreed to merge and adopt the U.S. Airways name. Officials say the goal in combining the struggling seventh and eighth largest airlines is to create a stronger national carrier better able to compete against low-cost rivals.

Waving credit cards. That may be the future at checkout aisles and elsewhere. Our senior correspondent Allan Chernoff standing by in New York with more -- Allan.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Wolf, say goodbye to the swipe and hello to the wave. That's exactly what credit card companies have in mind for us as they use new technology to make it easier to charge.

(BEGIN VIDEOTAPE)

CHERNOFF (voice-over): Using your credit card will soon be that simple. A computer chip and tiny antenna embedded into the card make it possible for a scanner at the retail counter to quickly complete the transaction.

DAVID BONALLE, VICE PRESIDENT, AMERICAN EXPRESS: A consumer can simply take their Express card, wave it at a special reader at the point of sale. They don't have to sign. They simply take their receipt, and they're on their way.

CHERNOFF: American Express has been testing the new cards in Phoenix for two years. Next month, the company begins a nationwide rollout. Chase Bank also will unveil its version next month.

It's certainly faster than swiping and signing, but how secure is it?

PROF. AVI RUBIN, JOHNS HOPKINS UNIVERSITY: It's very, very easy to get the security wrong when you do something like this, because you're constrained by the low power in these battery-less devices. The devices -- the cards don't have batteries on them, so the circuits can only compute very simple functions. And so getting security with such a low power environment is quite difficult.

CHERNOFF: The card companies say they've addressed that issue. Every transaction creates a new digital signature for added security.

THOMAS O'DONNELL, CHASE CARD SERVICES: For the customer, what they need to recognize is that -- it is a safe and secure process from the minute they hold their card up to that reader.

(END VIDEOTAPE)

CHERNOFF: In a nation that simply hates to wait, the card companies believe those simple waves will have more Americans reaching for plastic instead of cash -- Wolf.

BLITZER: Allan Chernoff reporting. Thanks, Allan, very much.

That's it for me. "LOU DOBBS TONIGHT" starts right now, Lou standing by in New York -- Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Have a great evening, Wolf.

END

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