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American Morning

Troubling News for President Bush; Iraqi Lawmakers Trying to Come to Agreement on Constitution

Aired August 24, 2005 - 07:00   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: I'm Soledad O'Brien. Troubling news for President Bush. A new polls gives him some of the lowest approval ratings of his presidency, Iraq a major reason. And the pressure is not letting up. Anti-war mom Cindy Sheehan vows she's going return to her protests in Crawford, Texas today.
MILES O'BRIEN, CNN ANCHOR: I'm Miles O'Brien. An unwelcome surprise for South, Florida, waking up under a tropical storm watch, the storm that could be named Katrina could hit Florida tomorrow. While in the southwest, severe storms roll through Arizona, bringing some of the worst floods of memory.

We are live with a forecast ahead.

S. O'BRIEN: And across America, gas prices are putting the squeeze on many businesses. How soon before you start to feel their pain? We're looking at the big picture, on this AMERICAN MORNING.

Good morning. Welcome, everybody.

M. O'BRIEN: Good morning to you.

Let's get right to the news this morning, the president's non- vacation vacation. President Bush in Idaho today speaking to military personnel and relatives of those killed in Iraq and Afghanistan. This as a new poll from "The Wall Street Journal" online shows the president's approval rating continuing to decline. Only 40 percent of Americans have a positive opinion of his job performance now; 58 percent with a negative view.

Let's go to Bob Franken now at the White House.

And, Bob, that information isn't good news, clearly, for the administration.

BOB FRANKEN, CNN ANCHOR: No, certainly not. And the president is clearly aware of that. We're seeing that on a variety of fronts, including the speech he's making today. And the audience will be family members of people who have been lost in Iraq and Afghanistan. The president will be meeting with a group of them afterwards. Of course the one he's already met with who he has heeded the call for another meeting, Cindy Sheehan. She's coming back to Crawford, Texas today. As the president arrives. She is sort of the symbol of a growing unrest in the United States, as reflected in that poll. Unrest in the U.S. that is showing dissatisfaction with the Iraq policy the president is now assertively defending. And when it comes to talking about Cindy Sheehan, he has to walk a very fine line between sensitivity and an aggressive defense.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: She expressed her opinion. I disagree with it. I think immediate withdrawal from Iraq would be a mistake. I think those who advocate immediate withdrawal from not only Iraq, but the Middle East would be -- are advocating a policy that would weaken the United States.

(END VIDEO CLIP)

FRANKEN: And the dilemma for the president and the administration is although firm resolve is what the message of the day, the week, the month is, there is still the problem of support that seems to be dwindling in a country. The Vietnam history shows when that occurs, there can be problems for continuing that firm resolve -- Miles.

M. O'BRIEN: And, Bob, the president did not indicate he would meet with Cindy Sheehan, did he?

FRANKEN: He has not. The claim from the administration is that he has already met with her. He is sympathetic for her cause and her feelings as he said, but it's really a no-win situation for the president. If there was any sort of meeting, it could turn into, frankly, a rather ugly confrontation.

M. O'BRIEN: I guess if it had happened earlier, it might have been a different story.

Bob Franken at the White House, thank you -- Soledad.

S. O'BRIEN: To Baghdad now. Iraqi lawmakers are, again, trying to come to an agreement on the constitution. The next deadline is midnight Thursday.

Aneesh Raman is live with us in Baghdad this morning. Anybody budging in the debate so far?

ANEESH RAMAN, CNN CORRESPONDENT: Soledad, good morning.

No sign of anyone really starting to compromise yet. Closed-door meetings still under way as the Shia-Kurd try to gain the approval of the Sunnis on this draft constitution, specifically that sticking point of federalism. They're trying to do that by midnight tomorrow. At that point, this entire process ends and the document stands as the draft constitution that will go forward to the Iraqi people.

Yesterday, I sat down with Iraq's Prime Minister Al Jaafari with an extensive interview, but really pinpointed what's going on right now, and asked him whether he thought tomorrow we would see the Sunnis come on board.

(BEGIN VIDEO CLIP)

IBRAHIM AL JAAFARI, IRAQI PRIME MINISTER: I agree that a few political forces from (INAUDIBLE) they differ, but first of all, I hope they are going to change their opinion (INAUDIBLE). And at the same time, under (ph) the political forces (INAUDIBLE) agree, so I don't think this is going to be difficult for us to reach -- to compromise.

(END VIDEO CLIP)

RAMAN: Now, it would be a small political miracle for them to find compromise at this late hour. They haven't been able to do it for the past several months. But they are still trying. Tomorrow, we're not quite sure what will happen, a sign of Iraqi law. No one knows whether a vote is required from the prime minister's office to the speaker's office. They're having their lawyers look at that now. But at midnight tomorrow, this process ends and it goes forward to the Iraqi people to debate -- Soledad.

S. O'BRIEN: Aneesh, Prime Minister Jaafari was also talking about the role of religion in Iraq, and talking about what the government could really eventually look like. What do you say about that?

RAMAN: Yes, I asked him point blank, could we see an Iran-style government in Iraq? He said, no, that there are differences, that Iraq would be more like Afghanistan. But I asked him, would there be a role for religious clerics in deciding law? And he said there would. It would be sort of above the fray, looking generally at the constitution, but that is what concerns specifically women's rights group and secular politicians, how do you draw that line when clerics are stepping too far in the legal proceedings of Iraq, and that is what will be decided as this law takes shape -- Soledad.

S. O'BRIEN: Decided and debated.

Aneesh Raman for us this morning in Baghdad. Aneesh, thanks.

M. O'BRIEN: Much of South Florida under a tropical storm watch this morning. All eyes are on Tropical Depression Number 12, as it's called now. The storm is moving to the Bahamas with maximum sustained winds right about 35 miles an hour, just short of tropical storm status.

(WEATHER REPORT)

M. O'BRIEN: They're drying out in Southern Arizona this morning. Heavy rainstorms covered this desert region with raging floods Tuesday. Forty-six were forced to evacuate their homes in the Tucson area, mobile homes especially at risk. Dozens of roads had to be closed. Some cars, as you can see, were pretty much swept away. Rescue crews were plenty busy. They formed a human chain to rescue a man trapped on his car, and carried a disabled child from a mobile home. County officials declared a state of emergency.

S. O'BRIEN: What a tough time there.

Rescue-and-recovery efforts are expected this morning at that site of the deadly plane crash in the Peruvian jungle. The plane took off from Lima. It was carrying a hundred people, including 11 Americans. It went down just short of its destination in Pucallpa, which is about 300 miles northeast of Lima. At least 37 people were killed, at least 50 passengers, and two crew members, though, survived. There's no word on the fate of the other passengers.

Claudia Cisneros is a journalist in Lima. She joins us by phone.

Claudia, good morning to you.

The weather, we know, was pretty terrible. Have they concluded that that is the cause of this crash?

CLAUDIA CISNEROS, JOURNALIST: Well, Soledad, investigation is under way, but the (INAUDIBLE) spokesman are pointing out trouble causes the accident, what they call wind shear. They described it as strong crosswinds, and said that in such cases, it doesn't matter how an expert, a pilot is, that the plane will go out of control. They believe that due to this condition, the pilot attempted an emergency landing that, obviously, went wrong.

The spokesman added that only two miles, approximately two miles before approaching the runway, the pilot talked to the control tower and he did not report any engine or aircraft failure, so they are looking into this weather condition as the possible cause of the accident.

O'BRIEN: The pictures -- and we're looking at them now, Claudia -- just devastating. You wouldn't know this was a plane if you didn't know it was a plane. There was a family that walked away from this crash, is that right?

CISNEROS: Well, yes. (INAUDIBLE) officials have confirmed that on board the plane, there were 11 Americans, one Colombian, one Spanish national, two Italians, one Australian. From the 11 Americans that were listed on board, the (INAUDIBLE) official has confirmed that at least six of them are alive. They're injured. Wouldn't know yet the extent of the injuries, but they are six members of one family, the Viavs (ph) family, and they're looking into the rest of them. (INAUDIBLE) officials are being very cautious. They don't want to say that all of the unaccounted for are deceased just yet, because all of the injuries have been injured have been translated to different hospitals and some they believe could have gone to, like, private hospitals. Then they want to make sure that all of the unaccounted for they can -- are not in these private hospitals, then release death toll official list.

S. O'BRIEN: Yes, just devastating, and obviously a little bit confusing on the ground there as well.

Claudia Cisneros for us this morning. Claudia, thank you very much -- Miles.

M. O'BRIEN: Still to come, a CNN Security Watch. New York City lays out its plan to improve mass-transit security. It's a multimillion dollar system in the works. But will it really help prevent a terror attack? S. O'BRIEN: Also the very latest on Pat Robertson's call to assassinate Venezuela's president. We'll take a look at whether it spells trouble for the White House.

M. O'BRIEN: And the ripple effect of record-high gas prices. How businesses both big and small are dealing with pain at the pump. That's next on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Record-setting gasoline and diesel prices taking a toll on businesses large and small. This morning we check in with three cities around the country to see how businesses are handling the soaring cost. The average costs for a gallon of gas in Chicago, about $2.81. New York, $2.75. Washington, $2.69. Joining us from those three cities, in Chicago, Matt Callopy, he runs a Shoreline Sightseeing. It's a tour boat and water taxi service. In New York, David Donen, residential sales manager for Oz Moving Company. And from Washington, Jim Quirk from the United States Postal Service.

Good to have you all here, gentlemen.

Let's begin with you, Matt, in Chicago. Just want to quickly get a sense from you, how much more does it cost to fill up one of your big ships these days than a while ago.

MATT CALLOPY, V.P., SHORELINE SIGHTSEEING: Well, our diesel fuel prices have doubled since last year, and they've gone up by about 50 cents since the spring. Our pretax bulk price is about $2.30. So that's added about $500 to $700 per fill-up to each of the larger vessels.

M. O'BRIEN: Per fill-up.

CALLOPY: Per fill-up.

M. O'BRIEN: And so is that something that is being borne, the ticket price has gone up?

CALLOPY: No, actually, we've just absorbed that cost to date, and we'll hope to do that as long as we can.

M. O'BRIEN: All right, we'll see how long that last.

David Donen, moving company, how much are fuel prices impacting you on a daily basis? What do you have, a couple of dozen trucks, right?

DAVID DONEN, OZ MOVING AND STORAGE: Average $490, $550 a day more.

M. O'BRIEN: OK, you were slightly cut out at the beginning. About $500 more per day is your increased cost because of fuel?

DONEN: Absolutely.

M. O'BRIEN: That's a big number. That affects the bottom line. Have you passed that along to your clients and consumers.

DONEN: Oz Moving tries to keep it to our own costs. We have not raised at all, or surcharged to the customer at all. We keep the price the same.

M. O'BRIEN: But is that coming, do you think?

DONEN: Not really. A lot of moving companies are adding a surcharge for gasoline now since it's doubled since last year.

M. O'BRIEN: OK, Jim Quirk, U.S. Postal Service, let's about obviously a lot of fuel involved in getting letters to and from. There's an interesting statistic I read, that a penny a gallon increase in gas impacts your cost nationwide over the course of the year by big numbers, right?

JIM QUIRK, POSTAL SERVICE SPOKESMAN: Yes, sir. That's $8 million for every penny, and we anticipate...

M. O'BRIEN: Say that again. Just so people absorb that? A penny increase...

QUIRK: Yes, sir.

M. O'BRIEN: Is an $8 million a year increase in fuel cost to you?

QUIRK: Yes, sir. And by the end of our fiscal year, September 30th, we anticipate that we're going to exceed our transportation cost by $300 million.

M. O'BRIEN: Really? So presumably, we're going to see increase in postage rates you think? Is that coming down the pike?

QUIRK: We've been able to absorb that increase, because of a positive net income. We're in the fourth year of no rate increase, so people are coming to us. We're the best business, the best buy right now.

M. O'BRIEN: All right, I just want to go through the three of you quickly as we button up, and we're going to be coming back and talking a little bit more about this impact with you.

Matt, you first. How long can you hold out before you start raising prices?

CALLOPY: Well, we can definitely can hold out through this season. It is a seasonal business. Possibly over the winter we might have to adjust prices. Our water taxi business is probably the one that uses the most fuel and, if anything, that would be the first business that would probably feel the bite.

M. O'BRIEN: David, how about you? Where is the tipping point?

DONEN: Right now, it doesn't look like we're going to change for the next season pricewise. To give you an idea, paper has gone up, and we've kept our box prices the same over the last five years, and that has increased. So we're keeping our prices the same for as long as we can.

M. O'BRIEN: And Jim, at what point -- you say the Postal Service is doing well and is otherwise absorbing it. At what point does it become critical?

QUIRK: Well this year, people during the holiday season, are really going to get a good deal, so we expect a great increase in business, but I suspect by next year sometime, we're going to have to raise our rates.

M. O'BRIEN: All right, Matt, David and Jim, we will check back with you a little bit later in the morning as we sort of continue our gas price theme for this morning. Interesting that you're absorbing the cost so far. It'll be interesting to see what happens when the other shoe drops for consumers. Appreciate your time -- Soledad.

S. O'BRIEN: Still to come this morning, there's a new plan to keep commuters safe on New York City's subways. It costs $220 million. Will it prevent terror attacks? We'll look at that, up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Is the housing boom going bust? Ali Velshi is "Minding Your Business." He's in for Andy Serwer, who's on a little vaca.

Good morning.

ALI VELSHI, CNN CORRESPONDENT: Good to see you.

S. O'BRIEN: Is the answer yes or no?

VELSHI: No. I think the answer is no. And for guys like me who like to talk about business news all the time, we follow all sorts of numbers, but the one number a lot of people follow is the housing numbers, related to housing. So the July home sales numbers came in, and they're a little lower than some people expected, but July was still the strongest housing sales month in history. The average house sold for $267,000. The median price of a house is $218,000. And the issue here there were 691,000 homes sold in July -- these existing homes, not new homes -- versus 682,000 last year. It's slowing a little bit, but these with the price of oil going up, and all sorts of things competing for the consumers dollars, this has an impact on consumers.

S. O'BRIEN: And what's the impact on the marketplace?

VELSHI: Well, the impact on the marketplace, is that the -- a lot of investors felt that if the consumer who's been spending and spending and spending because the home value goes up, sees the home value perhaps being threatened, then the price of oil increasing, the price of gas increasing, all of that means you might start to spend less. And as a result, the stock market went down yesterday. Oil prices are a little higher. And if most of the value we think we have is in our homes now, so this is having an impact on spending.

The bottom line here is that gas price increases haven't had a resulting effect on how people spend their money, but when home prices start to sink, if they do, that will make you spend less.

S. O'BRIEN: Interesting. Ali Velshi, thanks -- Miles.

M. O'BRIEN: After the attacks on London's mass transit system, the safety of public transport in the U.S. has been closely scrutinized, of course. Now officials in charge of New York City's transportation system have announced a major security upgrade, but does the plan go far enough?

CNN's Deborah Feyerick has a Security Watch for us.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): It moves more people underground, over water, and through the streets of New York than any other transit system in the country. It's the largest and the most vulnerable.

Half a billion dollars set aside after 9/11 just waiting to be spent. Now the Metropolitan Transportation Authority, or MTA, is unveiling a sweeping security upgrade.

UNIDENTIFIED FEMALE: What I have here is a subterranean view of this particular station. The more information is available to me, the more that I zoom into the systems.

FEYERICK: The plan? Install 1,00 closed-circuit surveillance cameras and 3,000 motion sensors in subways, bus stops, and commuter rails. The question is: Can it really prevent an attack or just detect when something's not quite right?

UNIDENTIFIED MALE: This object has been left. And it's flashing red. That's what issued our alert.

FEYERICK: Here is how it works. If someone leave packages or enters a restricted zone, alarms are triggered right away.

UNIDENTIFIED FEMALE: The system is designed to find the closest officer to that particular incident and dispatch them immediately.

FEYERICK: There are drawbacks. The cameras cannot detect anything out of frame or hidden in garbage cans.

MARK BONATUCCI, LOCKHEED MARTIN PROGRAM DIRECTOR: It has to be pixels that are visible to the camera. So once that object goes into the garbage it's occluded by what's already in the background.

FEYERICK: Also, it will take up to three years to build and install. No cameras would be located inside subway cars or buses, the very areas where terrorists detonated bombings in London and Madrid. Still the head of the transit agency feels it's the right way to go. KATHERINE LAPP, MTA EXECUTIVE DIRECTOR: We were working very hard. Very expeditiously. We wanted to make sure that we did it right.

FEYERICK: Lockheed Martin, a defense contractor known for building planes, will be building the $212 million system.

LAPP: It's one that doesn't exist anywhere else in the world in any other transit agency in the world. And we will be on the cutting edge of this technology in order to protect our system against terrorist attack.

FEYERICK: Protect. Though it's any one's guess as to just how well. Deborah Feyerick, CNN, New York.

(END VIDEOTAPE)

M. O'BRIEN: MTA officials say they're considering ways to install security cameras inside buses and subway cars as well. Stay tuned to CNN day and night for the most reliable news about your security.

Still to come on the program, is Pat Robertson's controversial call to assassinate the president of Venezuela causing problems for President Bush? We'll get into that, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

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