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CNN Live At Daybreak

Senate Showdown Averted; Stem Cell Debate; Property Taxes

Aired May 24, 2005 - 06:30   ET

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

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


(WEATHER REPORT)
CAROL COSTELLO, CNN ANCHOR: The Senate reaches a last-minute deal on President Bush's judicial nominees. We've been talking so much about the process. But why should you really care about the outcome? Well, courts and judges have the final say on some major issues, like abortion, gay rights, medical ethics and race relations. You see what I mean.

Live out to our congressional correspondent, Joe Johns.

Good morning -- Joe.

JOE JOHNS, CNN CONGRESSIONAL REPORTER: Good morning, Carol.

COSTELLO: So, tell us about this, this deal.

JOHNS: Right. Well, this was a deal that really took a lot of the Capitol by surprise, quite frankly. Some members of the Senate had already taken to pronouncing the chances for a deal dead. And then, all of a sudden, it came together.

The Senate Republican leader was saying last night that it was both good news and bad news, it was essentially mixed results, while the Senate Democratic leader, Harry Reid, was, quite frankly, declaring victory.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R-TN), MAJORITY LEADER: With this agreement, all options remain on the table, including the constitutional option. If it had been necessary to deploy the constitutional option, it would have been successful.

SEN. HARRY REID (D-NV), MINORITY LEADER: It's over with. And I feel so good. This will be the first night in at least six weeks that I will sleep peacefully.

(END VIDEO CLIP)

JOHNS: Now, quite frankly, seven Democrats and seven Republicans exchanged promises in this deal, allowing three judges who had been fiercely fought by Democrats to get through. Two other judges will not get through, apparently. This filibuster would only be allowed under extraordinary circumstances.

Still, as you heard from the Senate Republican leader there, there is a chance for all of this to come back. His office is saying this morning that this agreement will be tested in the future by the process -- Carol.

COSTELLO: But in the short term, Justice Priscilla Owen, who is nominated to the Fifth U.S. Circuit Court of Appeals, her nomination will probably go through because of this.

JOHNS: That's right, her nomination. Also another highly, highly-contested nomination, that of Janice Rogers Brown of California, also gets through. These are people that the Democrats had tried very hard to stop and had put up a lot of different justifications for stopping them. They're going to go on through, apparently.

The other thing, though, and probably the most important thing, the bottom line here, is that the filibuster on judicial nominations is preserved for Democrats to use in the event there is a highly- contested Supreme Court nomination. As you know, there is some talk that there might be a retirement on the Supreme Court as early as this summer.

COSTELLO: Oh, yes. Yes, Justice Rehnquist. Joe Johns reporting from Washington this morning.

"AMERICAN MORNING" will have much more on the last-minute filibuster deal. Let's head over to Bill Hemmer.

Good morning -- Bill.

BILL HEMMER, CNN ANCHOR: Hey, Carol, good morning to you.

I was listening to Joe report there, too, about the surprise at the 11th hour. We'll talk about that deal in the Senate, Carol. John McCain is our guest today. Ben Nelson is our guest today, helping to put that compromise together. They are two of the 14 that did the deal. We'll find out how close the Senate then came to facing that nuclear option this morning.

On a much lighter note, we're coming up on the summertime, part two of our "Surviving Family Vacations" today. I love this one, Carol. Tips on how you can survive a vacation with another family. They call it "togethering" in the travel industry.

COSTELLO: Togethering?

HEMMER: Yes, it's called a headache. We'll look at the pluses and the minuses in this. You can save some cash, we know that. But make sure you pick the other family very carefully.

COSTELLO: Oh, yes, because that togethering might be nasty.

HEMMER: You've got a week together.

COSTELLO: Yes.

HEMMER: See you later. COSTELLO: Thanks, Bill.

HEMMER: Bye-bye.

COSTELLO: Some heated debate is expected today on the House floor as well. At issue are two bills on stem cell research. If members of Congress want to know what people think, well, we've got some numbers.

A CNN/"USA Today"/Gallup poll shows that 53 percent of people want fewer restrictions on stem cell research.

For more on what they're talking about, we're joined by CNN Radio's Dick Uliano in Washington. And by "they," we mean Congress.

Good morning -- Dick.

DICK ULIANO, CNN RADIO: Good morning to you, Carol.

You know, all eyes seem to have been on the Senate recently and the judicial nominee fight. But the spotlight falls on the House today, where members are expected to vote later today on a human embryo stem cell research bill, which President Bush has threatened to veto.

And, Carol, this would be his first veto of his presidency. He vetoed no bills his first four years in office, but he threatens to veto this one, because he says this bill may, in his words, create life to destroy life.

COSTELLO: So, is there any wiggle room for him?

ULIANO: Well, there's another bill. There's an alternative bill that the House members will take up before they vote on this one, which has the backing of all members and President Bush also backs. It would fund -- provide federal funding for stem cell research for stem cells that are derived from umbilical cord blood. President Bush backs that one.

But the other one would derive stem cells from human embryos. And while most members of the House back this bill, it's going to be important to see how many votes it collects, because it would need a super majority to override any threatened presidential veto.

COSTELLO: Interesting. Dick Uliano from CNN Radio joining DAYBREAK this morning.

President Bush, by the way, plans to discuss his stem cell policy in an address later this afternoon. CNN will provide live coverage of the president's speech beginning at 2:10 p.m. Eastern -- 2:10 p.m. Eastern. That's a weird time. But we'll carry that live.

In other news across America now, a common virus associated with rodent waste is being blamed on the deaths of three organ transplant patients. The deaths have been tracked back to a single donor, who officials believe was exposed to the virus by a pet hamster. A fourth patient is recovering after receiving a kidney from the infected donor.

The attorney for a pair of former America West pilots says his clients were not drunk, even if they smelled like alcohol. There they are. The two face up to five years in prison for endangering the 124 passengers on the flight. The defense claims they should not be charged because the plane's engines were not on.

Convicted child killer Lionel Tate is back in jail this morning. Police in south Florida say the 18-year-old violated his probation when he tried to rob a pizza delivery man at gunpoint. Tate pled guilty to the 1999 beating death of a playmate when Tate was just 12 years old.

Still to come on DAYBREAK, imagine your credit card number changing every few seconds. Carrie Lee will be along to explain why that may be in the cards.

Plus, Bill Maher's latest mess. This one involves low-lying food and charges of treason. We'll explain.

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

(COMMERCIAL BREAK)

COSTELLO: It's time now for a little "Business Buzz." Burger King is getting some heat for its "Star Wars" promotion. One advocacy group is upset because the promotion is tied to a movie that's rated PG-13. Burger King says its "Star Wars" stuff is based on all of the movies. The other five were all rated PG.

A new report from salary.com says these five cities -- New London, Connecticut, Huntsville, Alabama, Baltimore, Maryland, Harrisburg, Pennsylvania, and Tulsa, Oklahoma -- are the best places to stretch your paycheck. The study focused on income versus the cost of living such as housing, food and taxes. Not considered are quality of life issues like local school systems and weather.

Credit cards are undergoing a makeover to protect you from fraud and to encourage you to spend more, of course.

Carrie Lee has more for us. Good morning.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Kill two birds with one stone. Why not?

Well, we've been talking a lot about fraud, personal identification theft. So, now credit card companies are trying to combat the problem. And what they're doing is working on credit cards that will offer a constantly changing number.

According to "The Wall Street Journal," a couple of companies, including leader Citigroup, are working on what's being called dynamic number cards. And this means that the cards will have thin batteries and liquid crystal displays, and they will basically generate new card numbers throughout the card. So, the number is always changing. That means if a thief steals your number, he won't be able to use it. Now, if he steals the actual card, he'll still be able to use the number. But they won't be able to get, say, just the number through the Internet or something like that.

No surprise credit card companies want to combat fraud. According to an industry publication, card issuers lost $800 million from credit card theft and fraud last year. That doesn't even include fraudulent phone or online transactions.

Also last week, remember we heard about Chase's blink card. American Express has a similar product. Instead of handing over the credit card, you simply hold it up. You wave it. It never leaves your hand, and so it's considered safer for that reason.

So, the companies are trying to do what they can. Of course, there are some studies also that show that -- one study showed that the contact list cards did generate higher revenues. That is the cards that have the numbers that always change. So...

COSTELLO: Do you know what would be easier? If you put a really low limit on your credit card, let's say, like $1,500, and then you don't use your credit cards.

LEE: Well, a lot of people use it for everyday expenses. They want to rack up as many frequent flier miles, get all of the perks, and a lot of people use it as a way to pay bills and other things. So, credit card companies are trying to do what they can. Of course, over time, these will probably be able to combat these systems as well. But they're doing what they can.

COSTELLO: Thank you, Carrie Lee.

Your news, money, weather and sports. It is 6:43 Eastern. Here's what's all new this morning.

A last-minute deal on Capitol Hill. Senators have reached a compromise on some of President Bush's stalled judicial nominees, averting a showdown. A vote on one of the nominees could happen today.

In money news, roughly 2,000 Coca-Cola employees are on strike for a second day. They're protesting the breakdown in contract talks. At issue? Health care benefits.

In culture, the man behind Tony the Tiger's signature line, they're greaaat, well, he's died. Thurl Ravenscroft was 91 years old. He was also known for singing the song, "You're a Mean One, Mr. Grinch." Of course, that's from the holiday classic, "How the Grinch Stole Christmas."

In sports, the Philadelphia 76ers have fired coach Jim O'Brien. O'Brien had the job for only a year with a 43-39 record. Former "Sisters" star Maurice Cheeks is the new bench boss.

To the forecast center. (WEATHER REPORT)

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

I'm looking at our e-mail box, which is absolutely full, because earlier we asked you about Bill Maher's comments that he made on his TV show. One lawmaker says Maher's statement is no joke.

On his HBO program, Maher poked fun at the military for missing its recruiting goals. He said -- and I quote: "We've done pick all of the low-lying Lynndie England fruit. Now, we need warm bodies."

England, as you know, is accused of abusing Iraqi prisoners. Alabama Congressman Spencer Bachus says, I think it borders on treason, what Maher said.

In treason, one definition is to undermine the effort or national security of our country.

For his part, Maher says anyone who knows anything about my views and has watched my show knows that I have nothing but the highest regard for the men and women serving this country and around the world.

We've received some 400 e-mails this morning on this topic. And I'd say 97 percent of them are on Bill Maher's side.

Oh, you'll hear more about this on "AMERICAN MORNING," I'm sure.

Still to come on DAYBREAK, they tell you buying a house is part of the American dream, but they don't tell you about the property taxes. Up next, a look at the dizzying numbers and what some states are doing to drive these taxes down.

This is DAYBREAK for a Tuesday.

(COMMERCIAL BREAK)

COSTELLO: Fresh pictures just in to CNN. You're going to see First Lady Laura Bush. She's wrapping up her Mideast tour. I believe she is in Alexandria, Egypt. She's visiting a girls' school there. The stop gives her a chance to focus on two of the issues she's promoting, which would be education and gender equality. As you can see, everything is very peaceful on this stop. We'll keep you posted as to the rest of the first lady's agenda.

It is now 6:49 Eastern. Here is what will be making news today.

Stem cell research, both President Bush and Congress take up that touchy issue today. The House will debate a bill aimed at boosting stem cell research, but the president is vowing to veto it. He'll make a speech on why the government should stick with his policy limiting such research.

Yet another day in court today for Army Private Lynndie England, who became the most recognizable figure in the Iraqi prisoner abuse scandal. The Army is restarting its case against England after a military judge declared a mistrial earlier this month.

And Jay Leno takes the stand today, not the stage. Sources tell CNN the "Tonight Show" host will testify for the defense in Michael Jackson's trial.

So, you finally buy your dream home, only to sit back and watch your property taxes skyrocket. So much for paying down your mortgage and retiring with no worries. Get this: in Lake Tahoe, Nevada, one man bought his house in 1990. Property taxes were $2,200. Today, they are in excess of $12,000.

So, what do you do? Bert Waisanen is a senior policy specialist for fiscal affairs at the National Conference of State Legislators.

And I'm sure I butchered your name. So, tell me how it's pronounced.

BERT L. WAISANEN, NATIONAL CONFERENCE OF STATE LEGISLATURES: Good morning. Waisanen.

COSTELLO: Oh, I didn't. Well, good morning. And thank you for joining us.

WAISANEN: Good morning.

COSTELLO: This example from Nevada is just astounding, $2,200 to 12,000, that's kind of scary. Why the steep increase there?

WAISANEN: Well, I think this is one of the things we're seeing in an area in a country where we have, you know, a really well- performing housing market. And particularly we're seeing in resort areas, where you have towns that are growing rapidly with -- you know, becoming boom towns with folks building vacation homes and people looking in for retirement. And what it does is it increases housing construction and drives up prices.

And so, for folks who have been living in the region for a period of time, their property taxes start to rise. And if they haven't been moving themselves or experiencing the benefit or appreciation themselves, they're not going to be too happy with what they find when their tax bill arrives.

COSTELLO: Oh, you're not kidding. A lot of people would say this is completely unfair; that the property taxes are rising faster than the value of your home.

WAISANEN: Well, that's one of the things that we're seeing is, you know, we've had great performance in the real estate market for the past three to five years. And one of the aspects of good performance over that time is that the rising home values translate into a rising property tax assessment, since property taxes are tied to home values. So, it's kind of the one aspect in a positive market that folks are least happy about. However, you know, state lawmakers understand this. And that's why states provide tax relief programs for property taxes to seniors and to families with limited incomes for those least able to bear a rising tax burden.

COSTELLO: Yes. And I also know some states like Nevada, they're trying to do just what you said. They've proposed this tax assessment cap of 3 percent annually. The problem is how do you make up for lost revenue?

WAISANEN: Well, that's the trick. That's the balancing act. In Nevada (AUDIO GAP) limit the increase, limit the shock, if you will, from strong rising property taxes by limiting assessments for the next couple of years. But, again, that's -- we're living in a time kind of just like the family budget, a time of limited budget.

So, there are costs pressures for state and local governments, you know, for education or health care. So, you're trying to -- here is the balancing act. You're trying to meet public spending priorities and limit taxes. And it's a delicate balance.

COSTELLO: Oh, you're not kidding. In Illinois, I know they're planning to raise income taxes instead. But that might put too much of a burden on people, too.

WAISANEN: Well, it's quite a challenge. And what states are doing is that, you know, property taxes are certainly not popular and providing property tax relief is. So, states are looking at, are there ways that we can reduce the property tax burden and replace that revenue from other sources? Could it be perhaps income tax changes, or can we make a replacement with perhaps a change in the sales tax? Or even other types of narrow taxes, such as taxes on cigarettes and alcohol.

COSTELLO: Well, you know, Pennsylvania has an idea. It wants to introduce gambling to the state, and that would lower property taxes.

WAISANEN: That's correct. A couple of states have looked at even the expansion of gaming. And Pennsylvania is one state that has actually enacted in 2004, they will be rolling out the effort here in the next year or two to expand gaming. And with those increased revenues from expanding gaming provide property tax relief to local governments.

COSTELLO: Well, Bert Waisanen, senior policy specialist for fiscal affairs from the National Conference of State Legislatures, thank you for joining DAYBREAK this morning, because I know it's really early out in Denver, Colorado.

WAISANEN: It's a beautiful daybreak here in Colorado.

COSTELLO: I bet it is.

Oh, Chad, I bet it would be.

CHAD MYERS, CNN METEOROLOGIST: Oh, yes. It was a stormy day in eastern Colorado yesterday. In Denver, the airport was almost shut down for a while as tornadoes were on the ground east of Denver, well east of Denver.

Do you know what time it is, Carol? It's time to give away a mug.

COSTELLO: It's time to talk about happy things.

MYERS: It's time to give away the mug. It's the best time of day for me.

Here we go, the questions from yesterday. What do Eddie Haskell, Archie Bunker and Newman have in common? They are all characters we love to hate. And what awards will be given out this Thursday? The answer is the Golden Trailer Awards.

And the winner, from Scottsdale, Arizona, what are you doing awake? Sally Casimir. Congratulations, Sally, from Scottsdale.

Now your questions for today. We showed you a GPS system that goes on what part of your body? There are a couple of them, but I only need one answer. And then, your paycheck goes furthest in what U.S. city?

Go to CNN.com/daybreak, and give us those answers. That was 45 minutes ago, Carol.

COSTELLO: The last one was tough.

MYERS: Yes.

COSTELLO: Let's take a break. We'll be back with more right after this.

(COMMERCIAL BREAK)

COSTELLO: "Now in the News."

A Senate vote could come as early as today on one of President Bush's judicial nominees; this, after senators reached a last-minute compromise on some of the stalled nominations.

Stem cell research takes center stage today in the House. Measures aimed at boosting the research will be debated. In the meantime, President Bush plans a speech on why the nation should stick with his policy, which limits stem cell research.

And Syria has put an end to military and intelligence cooperation with the United States, "The New York Times" reports. The move comes in response to Bush administration complaints. The White House says Syria is not doing enough to stop the flow of funds and fighters aiding the Iraqi insurgency.

A new study challenges the government's decision to keep Crestor on the shelves. The study says the risks of side effects from the cholesterol-lowering drug are higher than first thought. The FDA says Crestor is just as safe as other cholesterol drugs.

(WEATHER REPORT)

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

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 24, 2005 - 06:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(WEATHER REPORT)
CAROL COSTELLO, CNN ANCHOR: The Senate reaches a last-minute deal on President Bush's judicial nominees. We've been talking so much about the process. But why should you really care about the outcome? Well, courts and judges have the final say on some major issues, like abortion, gay rights, medical ethics and race relations. You see what I mean.

Live out to our congressional correspondent, Joe Johns.

Good morning -- Joe.

JOE JOHNS, CNN CONGRESSIONAL REPORTER: Good morning, Carol.

COSTELLO: So, tell us about this, this deal.

JOHNS: Right. Well, this was a deal that really took a lot of the Capitol by surprise, quite frankly. Some members of the Senate had already taken to pronouncing the chances for a deal dead. And then, all of a sudden, it came together.

The Senate Republican leader was saying last night that it was both good news and bad news, it was essentially mixed results, while the Senate Democratic leader, Harry Reid, was, quite frankly, declaring victory.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R-TN), MAJORITY LEADER: With this agreement, all options remain on the table, including the constitutional option. If it had been necessary to deploy the constitutional option, it would have been successful.

SEN. HARRY REID (D-NV), MINORITY LEADER: It's over with. And I feel so good. This will be the first night in at least six weeks that I will sleep peacefully.

(END VIDEO CLIP)

JOHNS: Now, quite frankly, seven Democrats and seven Republicans exchanged promises in this deal, allowing three judges who had been fiercely fought by Democrats to get through. Two other judges will not get through, apparently. This filibuster would only be allowed under extraordinary circumstances.

Still, as you heard from the Senate Republican leader there, there is a chance for all of this to come back. His office is saying this morning that this agreement will be tested in the future by the process -- Carol.

COSTELLO: But in the short term, Justice Priscilla Owen, who is nominated to the Fifth U.S. Circuit Court of Appeals, her nomination will probably go through because of this.

JOHNS: That's right, her nomination. Also another highly, highly-contested nomination, that of Janice Rogers Brown of California, also gets through. These are people that the Democrats had tried very hard to stop and had put up a lot of different justifications for stopping them. They're going to go on through, apparently.

The other thing, though, and probably the most important thing, the bottom line here, is that the filibuster on judicial nominations is preserved for Democrats to use in the event there is a highly- contested Supreme Court nomination. As you know, there is some talk that there might be a retirement on the Supreme Court as early as this summer.

COSTELLO: Oh, yes. Yes, Justice Rehnquist. Joe Johns reporting from Washington this morning.

"AMERICAN MORNING" will have much more on the last-minute filibuster deal. Let's head over to Bill Hemmer.

Good morning -- Bill.

BILL HEMMER, CNN ANCHOR: Hey, Carol, good morning to you.

I was listening to Joe report there, too, about the surprise at the 11th hour. We'll talk about that deal in the Senate, Carol. John McCain is our guest today. Ben Nelson is our guest today, helping to put that compromise together. They are two of the 14 that did the deal. We'll find out how close the Senate then came to facing that nuclear option this morning.

On a much lighter note, we're coming up on the summertime, part two of our "Surviving Family Vacations" today. I love this one, Carol. Tips on how you can survive a vacation with another family. They call it "togethering" in the travel industry.

COSTELLO: Togethering?

HEMMER: Yes, it's called a headache. We'll look at the pluses and the minuses in this. You can save some cash, we know that. But make sure you pick the other family very carefully.

COSTELLO: Oh, yes, because that togethering might be nasty.

HEMMER: You've got a week together.

COSTELLO: Yes.

HEMMER: See you later. COSTELLO: Thanks, Bill.

HEMMER: Bye-bye.

COSTELLO: Some heated debate is expected today on the House floor as well. At issue are two bills on stem cell research. If members of Congress want to know what people think, well, we've got some numbers.

A CNN/"USA Today"/Gallup poll shows that 53 percent of people want fewer restrictions on stem cell research.

For more on what they're talking about, we're joined by CNN Radio's Dick Uliano in Washington. And by "they," we mean Congress.

Good morning -- Dick.

DICK ULIANO, CNN RADIO: Good morning to you, Carol.

You know, all eyes seem to have been on the Senate recently and the judicial nominee fight. But the spotlight falls on the House today, where members are expected to vote later today on a human embryo stem cell research bill, which President Bush has threatened to veto.

And, Carol, this would be his first veto of his presidency. He vetoed no bills his first four years in office, but he threatens to veto this one, because he says this bill may, in his words, create life to destroy life.

COSTELLO: So, is there any wiggle room for him?

ULIANO: Well, there's another bill. There's an alternative bill that the House members will take up before they vote on this one, which has the backing of all members and President Bush also backs. It would fund -- provide federal funding for stem cell research for stem cells that are derived from umbilical cord blood. President Bush backs that one.

But the other one would derive stem cells from human embryos. And while most members of the House back this bill, it's going to be important to see how many votes it collects, because it would need a super majority to override any threatened presidential veto.

COSTELLO: Interesting. Dick Uliano from CNN Radio joining DAYBREAK this morning.

President Bush, by the way, plans to discuss his stem cell policy in an address later this afternoon. CNN will provide live coverage of the president's speech beginning at 2:10 p.m. Eastern -- 2:10 p.m. Eastern. That's a weird time. But we'll carry that live.

In other news across America now, a common virus associated with rodent waste is being blamed on the deaths of three organ transplant patients. The deaths have been tracked back to a single donor, who officials believe was exposed to the virus by a pet hamster. A fourth patient is recovering after receiving a kidney from the infected donor.

The attorney for a pair of former America West pilots says his clients were not drunk, even if they smelled like alcohol. There they are. The two face up to five years in prison for endangering the 124 passengers on the flight. The defense claims they should not be charged because the plane's engines were not on.

Convicted child killer Lionel Tate is back in jail this morning. Police in south Florida say the 18-year-old violated his probation when he tried to rob a pizza delivery man at gunpoint. Tate pled guilty to the 1999 beating death of a playmate when Tate was just 12 years old.

Still to come on DAYBREAK, imagine your credit card number changing every few seconds. Carrie Lee will be along to explain why that may be in the cards.

Plus, Bill Maher's latest mess. This one involves low-lying food and charges of treason. We'll explain.

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

(COMMERCIAL BREAK)

COSTELLO: It's time now for a little "Business Buzz." Burger King is getting some heat for its "Star Wars" promotion. One advocacy group is upset because the promotion is tied to a movie that's rated PG-13. Burger King says its "Star Wars" stuff is based on all of the movies. The other five were all rated PG.

A new report from salary.com says these five cities -- New London, Connecticut, Huntsville, Alabama, Baltimore, Maryland, Harrisburg, Pennsylvania, and Tulsa, Oklahoma -- are the best places to stretch your paycheck. The study focused on income versus the cost of living such as housing, food and taxes. Not considered are quality of life issues like local school systems and weather.

Credit cards are undergoing a makeover to protect you from fraud and to encourage you to spend more, of course.

Carrie Lee has more for us. Good morning.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Kill two birds with one stone. Why not?

Well, we've been talking a lot about fraud, personal identification theft. So, now credit card companies are trying to combat the problem. And what they're doing is working on credit cards that will offer a constantly changing number.

According to "The Wall Street Journal," a couple of companies, including leader Citigroup, are working on what's being called dynamic number cards. And this means that the cards will have thin batteries and liquid crystal displays, and they will basically generate new card numbers throughout the card. So, the number is always changing. That means if a thief steals your number, he won't be able to use it. Now, if he steals the actual card, he'll still be able to use the number. But they won't be able to get, say, just the number through the Internet or something like that.

No surprise credit card companies want to combat fraud. According to an industry publication, card issuers lost $800 million from credit card theft and fraud last year. That doesn't even include fraudulent phone or online transactions.

Also last week, remember we heard about Chase's blink card. American Express has a similar product. Instead of handing over the credit card, you simply hold it up. You wave it. It never leaves your hand, and so it's considered safer for that reason.

So, the companies are trying to do what they can. Of course, there are some studies also that show that -- one study showed that the contact list cards did generate higher revenues. That is the cards that have the numbers that always change. So...

COSTELLO: Do you know what would be easier? If you put a really low limit on your credit card, let's say, like $1,500, and then you don't use your credit cards.

LEE: Well, a lot of people use it for everyday expenses. They want to rack up as many frequent flier miles, get all of the perks, and a lot of people use it as a way to pay bills and other things. So, credit card companies are trying to do what they can. Of course, over time, these will probably be able to combat these systems as well. But they're doing what they can.

COSTELLO: Thank you, Carrie Lee.

Your news, money, weather and sports. It is 6:43 Eastern. Here's what's all new this morning.

A last-minute deal on Capitol Hill. Senators have reached a compromise on some of President Bush's stalled judicial nominees, averting a showdown. A vote on one of the nominees could happen today.

In money news, roughly 2,000 Coca-Cola employees are on strike for a second day. They're protesting the breakdown in contract talks. At issue? Health care benefits.

In culture, the man behind Tony the Tiger's signature line, they're greaaat, well, he's died. Thurl Ravenscroft was 91 years old. He was also known for singing the song, "You're a Mean One, Mr. Grinch." Of course, that's from the holiday classic, "How the Grinch Stole Christmas."

In sports, the Philadelphia 76ers have fired coach Jim O'Brien. O'Brien had the job for only a year with a 43-39 record. Former "Sisters" star Maurice Cheeks is the new bench boss.

To the forecast center. (WEATHER REPORT)

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

I'm looking at our e-mail box, which is absolutely full, because earlier we asked you about Bill Maher's comments that he made on his TV show. One lawmaker says Maher's statement is no joke.

On his HBO program, Maher poked fun at the military for missing its recruiting goals. He said -- and I quote: "We've done pick all of the low-lying Lynndie England fruit. Now, we need warm bodies."

England, as you know, is accused of abusing Iraqi prisoners. Alabama Congressman Spencer Bachus says, I think it borders on treason, what Maher said.

In treason, one definition is to undermine the effort or national security of our country.

For his part, Maher says anyone who knows anything about my views and has watched my show knows that I have nothing but the highest regard for the men and women serving this country and around the world.

We've received some 400 e-mails this morning on this topic. And I'd say 97 percent of them are on Bill Maher's side.

Oh, you'll hear more about this on "AMERICAN MORNING," I'm sure.

Still to come on DAYBREAK, they tell you buying a house is part of the American dream, but they don't tell you about the property taxes. Up next, a look at the dizzying numbers and what some states are doing to drive these taxes down.

This is DAYBREAK for a Tuesday.

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COSTELLO: Fresh pictures just in to CNN. You're going to see First Lady Laura Bush. She's wrapping up her Mideast tour. I believe she is in Alexandria, Egypt. She's visiting a girls' school there. The stop gives her a chance to focus on two of the issues she's promoting, which would be education and gender equality. As you can see, everything is very peaceful on this stop. We'll keep you posted as to the rest of the first lady's agenda.

It is now 6:49 Eastern. Here is what will be making news today.

Stem cell research, both President Bush and Congress take up that touchy issue today. The House will debate a bill aimed at boosting stem cell research, but the president is vowing to veto it. He'll make a speech on why the government should stick with his policy limiting such research.

Yet another day in court today for Army Private Lynndie England, who became the most recognizable figure in the Iraqi prisoner abuse scandal. The Army is restarting its case against England after a military judge declared a mistrial earlier this month.

And Jay Leno takes the stand today, not the stage. Sources tell CNN the "Tonight Show" host will testify for the defense in Michael Jackson's trial.

So, you finally buy your dream home, only to sit back and watch your property taxes skyrocket. So much for paying down your mortgage and retiring with no worries. Get this: in Lake Tahoe, Nevada, one man bought his house in 1990. Property taxes were $2,200. Today, they are in excess of $12,000.

So, what do you do? Bert Waisanen is a senior policy specialist for fiscal affairs at the National Conference of State Legislators.

And I'm sure I butchered your name. So, tell me how it's pronounced.

BERT L. WAISANEN, NATIONAL CONFERENCE OF STATE LEGISLATURES: Good morning. Waisanen.

COSTELLO: Oh, I didn't. Well, good morning. And thank you for joining us.

WAISANEN: Good morning.

COSTELLO: This example from Nevada is just astounding, $2,200 to 12,000, that's kind of scary. Why the steep increase there?

WAISANEN: Well, I think this is one of the things we're seeing in an area in a country where we have, you know, a really well- performing housing market. And particularly we're seeing in resort areas, where you have towns that are growing rapidly with -- you know, becoming boom towns with folks building vacation homes and people looking in for retirement. And what it does is it increases housing construction and drives up prices.

And so, for folks who have been living in the region for a period of time, their property taxes start to rise. And if they haven't been moving themselves or experiencing the benefit or appreciation themselves, they're not going to be too happy with what they find when their tax bill arrives.

COSTELLO: Oh, you're not kidding. A lot of people would say this is completely unfair; that the property taxes are rising faster than the value of your home.

WAISANEN: Well, that's one of the things that we're seeing is, you know, we've had great performance in the real estate market for the past three to five years. And one of the aspects of good performance over that time is that the rising home values translate into a rising property tax assessment, since property taxes are tied to home values. So, it's kind of the one aspect in a positive market that folks are least happy about. However, you know, state lawmakers understand this. And that's why states provide tax relief programs for property taxes to seniors and to families with limited incomes for those least able to bear a rising tax burden.

COSTELLO: Yes. And I also know some states like Nevada, they're trying to do just what you said. They've proposed this tax assessment cap of 3 percent annually. The problem is how do you make up for lost revenue?

WAISANEN: Well, that's the trick. That's the balancing act. In Nevada (AUDIO GAP) limit the increase, limit the shock, if you will, from strong rising property taxes by limiting assessments for the next couple of years. But, again, that's -- we're living in a time kind of just like the family budget, a time of limited budget.

So, there are costs pressures for state and local governments, you know, for education or health care. So, you're trying to -- here is the balancing act. You're trying to meet public spending priorities and limit taxes. And it's a delicate balance.

COSTELLO: Oh, you're not kidding. In Illinois, I know they're planning to raise income taxes instead. But that might put too much of a burden on people, too.

WAISANEN: Well, it's quite a challenge. And what states are doing is that, you know, property taxes are certainly not popular and providing property tax relief is. So, states are looking at, are there ways that we can reduce the property tax burden and replace that revenue from other sources? Could it be perhaps income tax changes, or can we make a replacement with perhaps a change in the sales tax? Or even other types of narrow taxes, such as taxes on cigarettes and alcohol.

COSTELLO: Well, you know, Pennsylvania has an idea. It wants to introduce gambling to the state, and that would lower property taxes.

WAISANEN: That's correct. A couple of states have looked at even the expansion of gaming. And Pennsylvania is one state that has actually enacted in 2004, they will be rolling out the effort here in the next year or two to expand gaming. And with those increased revenues from expanding gaming provide property tax relief to local governments.

COSTELLO: Well, Bert Waisanen, senior policy specialist for fiscal affairs from the National Conference of State Legislatures, thank you for joining DAYBREAK this morning, because I know it's really early out in Denver, Colorado.

WAISANEN: It's a beautiful daybreak here in Colorado.

COSTELLO: I bet it is.

Oh, Chad, I bet it would be.

CHAD MYERS, CNN METEOROLOGIST: Oh, yes. It was a stormy day in eastern Colorado yesterday. In Denver, the airport was almost shut down for a while as tornadoes were on the ground east of Denver, well east of Denver.

Do you know what time it is, Carol? It's time to give away a mug.

COSTELLO: It's time to talk about happy things.

MYERS: It's time to give away the mug. It's the best time of day for me.

Here we go, the questions from yesterday. What do Eddie Haskell, Archie Bunker and Newman have in common? They are all characters we love to hate. And what awards will be given out this Thursday? The answer is the Golden Trailer Awards.

And the winner, from Scottsdale, Arizona, what are you doing awake? Sally Casimir. Congratulations, Sally, from Scottsdale.

Now your questions for today. We showed you a GPS system that goes on what part of your body? There are a couple of them, but I only need one answer. And then, your paycheck goes furthest in what U.S. city?

Go to CNN.com/daybreak, and give us those answers. That was 45 minutes ago, Carol.

COSTELLO: The last one was tough.

MYERS: Yes.

COSTELLO: Let's take a break. We'll be back with more right after this.

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COSTELLO: "Now in the News."

A Senate vote could come as early as today on one of President Bush's judicial nominees; this, after senators reached a last-minute compromise on some of the stalled nominations.

Stem cell research takes center stage today in the House. Measures aimed at boosting the research will be debated. In the meantime, President Bush plans a speech on why the nation should stick with his policy, which limits stem cell research.

And Syria has put an end to military and intelligence cooperation with the United States, "The New York Times" reports. The move comes in response to Bush administration complaints. The White House says Syria is not doing enough to stop the flow of funds and fighters aiding the Iraqi insurgency.

A new study challenges the government's decision to keep Crestor on the shelves. The study says the risks of side effects from the cholesterol-lowering drug are higher than first thought. The FDA says Crestor is just as safe as other cholesterol drugs.

(WEATHER REPORT)

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

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