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CNN Live At Daybreak

Holdouts Face Forcible Removal; Finger-Pointing

Aired September 07, 2005 - 06:30   ET

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

ANNOUNCER: From the Time Warner center in New York, this is DAYBREAK with Carol Costello and Chad Myers.
CAROL COSTELLO, CNN ANCHOR: And good morning to you. Thank you for waking up with us.

Coming up this half-hour, should President Bush clean out his cabinet in the wake of Hurricane Katrina? Some say he should. We're going to take a closer look at the fallout.

And rising floodwaters could lead to rising insurance rates as insurers get swamped by claims. Should you help foot part of the bill? We're going to talk to an expert.

But first, "Now in the News."

A confession from Saddam Hussein. The deposed leader has admitted giving orders to execute thousands of Kurds in the 1980s. That's according to Iraq's current president, Jalal Talabani. The government says Saddam's first trial will begin next month.

Chief Justice William Rehnquist will be buried today at Arlington National Cemetery. President Bush will speak at his funeral at St. Matthews Cathedral in Washington. Rehnquist's body now lies in repose at the Supreme Court.

Some tough questions are in store for the man President Bush has picked to replace Rehnquist. Senate confirmation hearings start Monday for Judge John Roberts. Democrats vow to take as long as they need to grill him.

To the forecast center.

(WEATHER REPORT)

COSTELLO: The order has gone out to remove all remaining residents in New Orleans, and that tops our look at the latest from the hurricane zone.

Mayor Ray Nagin has ordered the police and the National Guard to compel people to leave the city whether they want to go or not. Nagin says those who stay could fall victims to illness or fire.

A Mexican army convey is on the way to Texas with some much- needed equipment. They're brining water treatment plants and mobile kitchens to help feed people sheltered in Houston. The Centers for Disease Control says five hurricane victims have died after being infected with a bacteria similar to the one that causes cholera. Four of them died in Mississippi, one in Texas.

People displaced by Katrina should not be referred to as "refugees." President Bush has now made that assertion. Several civic leaders have said the word is inappropriate.

And CNN has learned that the Superdome may be torn down. An official in the governor's office says the damage from Katrina was more significant than originally thought. That damage includes what was left behind when the toilets stopped working. But the dome's operator says no decision has been made on the building's future.

And the draining of New Orleans is well under way. The Army Corps of Engineers says it could take between three weeks and three months to get the water out.

New Orleans seems to have started on the road to recovery, but it's going to be a long and difficult one.

CNN's Karl Penhaul joins us now from New Orleans with the latest.

Good morning -- Karl.

KARL PENHAUL, CNN CORRESPONDENT: Good morning, Carol.

As you mentioned there, Mayor Ray Nagin has ordered that all people still left in New Orleans will be forcibly evacuated, whether they like it or not, and whether, in fact, they're on their own private property or not.

But so far, talking to the law enforcement forces, the police and the National Guard, they say it's not yet clear how and exactly when that forced evacuation program will be carried out. The National Guard and also paratroopers of the 82nd Airborne that we talked to yesterday said that they've got no specific instructions. They said what they imagine they would do would probably go around door to door where they know that residents are still staying and suggest to them they've got 24 hours or 48 hours to leave voluntarily. And after that they'll be pulled out.

But, of course, a variety of reasons why people have chosen not to leave. Some of them simply say that they didn't have the money to leave, don't have the money to survive anywhere else. Others are worried about their own property being looted. And, of course, there's a group there also who don't want to leave, because they can't bring themselves to abandon their pets.

But also, as you mentioned, yes, some of the water is receding. The pumping operations are under way to get rid of some of that water from the bowl in New Orleans, and also repairs on the levee system.

But there is a lot of standing water still around. And in that standing water, raw sewage has been mixed in. Of course, we know there are corpses in that water as well. What the Centers for Disease Control is saying is that the risks of diseases are primarily associated with sewage being in that water, things such as possibly hepatitis. That could bring in also diarrhea, also risk of the bacteria E. coli.

But the Centers for Disease Control says the risk of more serious things like cholera, typhoid, malaria are much lower. And they say that there is no real health risk associated with decaying bodies -- Carol.

COSTELLO: Karl Penhaul live in New Orleans this morning. Thank you.

There is no shortage of opinion about this crisis. But your voice is really what counts. So, we put the questions to you. A CNN/"USA Today"/Gallup poll asked: Who is most responsible for the problems in New Orleans? Twenty-five percent blamed local officials. Eighteen percent of those polled say federal officials. And 13 percent say President Bush.

Asked if any top federal official should be fired, most of you say no -- 63 percent.

And when asked how President Bush has handled the Hurricane Katrina crisis, 35 percent say he's done a great or good job, 21 percent are neutral, and 42 percent say the president has done a bad or terrible job.

It does seem like everyone is getting into the "what went wrong" game.

Senators Joe Lieberman and Susan Collins will hold hearings. President Bush will spearhead an investigation of his own.

Joining us now is CNN political editor John Mercurio.

Good morning -- John.

JOHN MERCURIO, CNN POLITICAL EDITOR: Good morning, Carol.

COSTELLO: Let's take a look back at that poll before we begin to talk about other things.

MERCURIO: Sure.

COSTELLO: Do any of these numbers surprise you? Only 18 percent of those polled say federal officials are to blame for what happened in the aftermath of this hurricane.

MERCURIO: Well, you know, I think what you're seeing in these polls is similar to what were seeing in the 9/11 polls, the polls taken right after the September 11 terrorist attacks.

People don't want to focus on the blame game. People have a human instinct to just focus on the human recovery and the life-saving efforts, I think. I think you'll see the blame game play out over the next weeks and months. But right now that's not what people's heads are.

COSTELLO: No. And it's probably a good thing. You know how long it took for the 9/11 hearings to get going and to wrap up. Can we expect the same?

MERCURIO: Well, that's a very good question. I mean, I think you're already seeing major disagreements between Democrats and Republicans over the speed and the scope of those investigations. We're talking about you've got Democrats like Nancy Pelosi, who wanted to start immediately. And Republicans are urging sort of, as I said, a continued focus on recovery and stuff.

Just last night, I think Tom DeLay abruptly canceled hearings in the House that his own party had scheduled, saying, you know, we don't really need 100 hearings to go on at this stage.

But I think it's safe to say, though, that there will be an investigation. It probably won't be concluded any time soon. But given the attention that this heartbreaking, you know, disaster has rightly brought, I think, over the past week, I think it's safe to say that all sides are committed to try to find out what went wrong eventually.

COSTELLO: You know, I know several Democrats -- Nancy Pelosi and Harry Reid issued tough press releases. They had some tough words to say. But I didn't see any Democrats taking a real leadership role. Did I miss something?

MERCURIO: Well, I mean, a few Democrats, I think, have stood out. Hillary Clinton in the Senate was down in Houston this week with her husband, the former president. And I know that Congressman John Dingell in the House has been pretty active. Both of them have been targeting FEMA and trying to remove the agency from the Homeland Security Department, try to re-establish its cabinet-level status.

You know, but you've got to remember obviously also the local officials in Louisiana and state officials. But, you know, you've got to remember, these are Democrats in a town controlled by Republicans. There's really not a lot that they can do other than either partner with Republicans, like Joe Lieberman did with Susan Collins, or, you know, issue those tough press releases. A lot of this really is up to Republicans.

COSTELLO: A lot of columnists and reporters have been asking, where has Dick Cheney been? And lo and behold, the president has asked the vice president to visit the Gulf region. What will his role be?

MERCURIO: Well, Bush said yesterday he's going to go down there tomorrow to help -- I think it was -- quote -- "cut through the bureaucracy" that everyone has pretty much acknowledged, you know, has been the biggest obstacle to the recovery.

I think that's a pretty appropriate role for him. You know, Cheney is not someone, frankly, that you send to a devastated region to try to console heartbroken victims. But he is someone who knows government bureaucracy and can work with state and local officials, and federal officials, to make sure that the services are getting delivered. I think that's going to be his role.

COSTELLO: John Mercurio, political editor for CNN. Thanks for joining us this morning.

Still to come on DAYBREAK, caught in the crossfire of finger- pointing? Now it's the mayor of New Orleans, Ray Nagin. What's he up against? After the break.

And later, the insurance industry braces for the financial drain from Katrina.

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

(COMMERCIAL BREAK)

COSTELLO: Now a look at how the international markets are faring. Tokyo's Nikkei is up 8 points, the London FTSE up 5, the German DAX up 14 points.

A political blame storm is now blowing full force in the wake of Hurricane Katrina. House Majority leader Tom DeLay is trying to deflect criticism of the federal response to the disaster by pointing the finger at state and local officials.

(BEGIN VIDEO CLIP)

REP. TOM DELAY (R-TX), MAJORITY LEADER: I remind you that the emergency response system was set up to work from the bottom up. And it's the local officials trying to handle the problem. When they can't handle the problem, they go the state. And the state does what they can do. And if they need assistance from FEMA and the federal government, they ask for it, and it's delivered.

(END VIDEO CLIP)

COSTELLO: DeLay says House hearings examining that response have been canceled, and a joint House-Senate panel will now conduct a congressional review.

As I just said, local and state officials also will be scrutinized by federal committees, and the long finger of blame will undoubtedly point at them, too. It's already started.

Bob Williams, a former state legislator during the eruption of Mount St. Helens write in "The Wall Street Journal": "The plain fact is lives were needlessly lost in New Orleans due to the failure of Louisiana's governor, Kathleen Blanco, and the city's mayor, Ray Nagin."

"Miami Herald" reporter Erika Bolstadt has been in New Orleans since the hurricane struck. She's staying at the Hyatt, which is also the command center for Mayor Ray Nagin.

Good morning, Ericka.

ERIKA BOLSTADT, "MAIMI HERALD": Good morning. Thanks for having me.

COSTELLO: We're glad you're on. You know, Mayor Nagin has become somewhat of a national hero, a folk hero. How is he being greeted on the streets of New Orleans by Guardsmen and federal officials?

BOLSTADT: Well, I think he's -- you know, I think he's drawn sort of mixed reviews. I think that he's become a folk hero for being such a straight talker and for really kind of saying last week, look at my city, look at what is happening, I need help, where is the cavalry -- that kind of thing.

But I also think that, you know, he probably deserves some of the criticism that's been thrown his way, too, because there's no question his city was woefully unprepared for a disaster of this magnitude.

COSTELLO: Well, you know, I just read a bit of "The Wall Street Journal's" op-ed piece, saying it was Mayor Nagin's job to enforce the evacuation plans as a first responder. You know, but he's been blaming the governor. He's been blaming the feds. He's been doing that on CNN, on "60 Minutes," on "Oprah." Is he open to such criticism?

BOLSTADT: He is. He's a pretty straight shooter. He definitely will sit back and take a look at some of the things he's done wrong. He's very open to that kind of thing. He's got a business background, and he has always sort of been one of those people who will take a look at, you know, kind of the things he could do better as this goes forward.

COSTELLO: So, from where you're sitting now, how will he fare when he undoubtedly will be called before a federal panel, at some point?

BOLSTADT: Well, like I said, he's a very straight shooter. And he's the kind of guy who will tell it like it is and will probably be pretty open to constructive criticism and to pointing out some of the flaws in not only his own city, but in...

(CROSSTALK)

COSTELLO: I guess I'm speaking as far his constituents are concerned.

BOLSTADT: You know, I think he's probably ready to take that kind of heat. But, you know, there's just -- he doesn't have a city right now. I mean, his constituents are all over the United States. New Orleans is a city in name only right now.

COSTELLO: I know he's refusing to leave that city, despite that. What is his role now?

BOLSTADT: Well, he is very much in charge, although the military command is really where, I think, most of the power is right now. But, you know, he's got his hands on a lot of the things that are going on. He's very well aware of, you know, some of the issues in the city, especially the issue with his police and fire and getting them rotated out of here and getting some rest.

COSTELLO: Erika Bolstadt, you stay safe. She's from the "Miami Herald" joining DAYBREAK this morning.

Still to come, the insurance industry is straining to cover monumental payouts from Hurricane Katrina and struggling to prepare for future catastrophes. How much will it cost you? We'll be back.

(COMMERCIAL BREAK)

COSTELLO: When it comes time to rebuild along the Gulf Coast, a considerable amount of that financial burden will fall on insurance companies. Katrina is expected to cost insurers an estimated $35 billion.

Last year's storms in Florida cost them almost $23 billion. And when adjusted for inflation, the 1992 Hurricane Andrew disaster cost the industry nearly $21 billion.

One idea to ease the burden is to establish a national catastrophe fund. It was actually the topic of our e-mail question of the day to you yesterday, and we were literally slammed with responses.

So, we thought we'd invite Joe Annotti from the Property Casualty Insurers Association of America. He joins us live from Chicago.

Good morning, Joe.

JOE ANNOTTI, PROPERTY CASUALTY INSURERS: Good morning, Carol.

COSTELLO: I've got to tell you, most people weren't so happy with this idea.

ANNOTTI: Well, it's an interesting concept. And we think, frankly, one of the long-term effects of Katrina will be to have a broad national debate on what the need for this -- what the need for such a catastrophe fund would be, how it work, what's the appropriate role for government, what's the appropriate role for private industry, what the...

COSTELLO: Well, let's talk about some scenarios of this national catastrophe fund. How much would it cost each person who has an insurance policy?

ANNOTTI: Impossible to say right now, because you don't know what would be covered by that fund. Would it be limited to strictly hurricanes, earthquakes and tornadoes? Would you include terrorism in that? You'd have to offset that with how much people would save as far as their insurance premiums. Would their insurance premiums go down? It's a very complex issue. There are no simple solutions. And it's a debate that's going to have to be played out over the long term.

COSTELLO: But it's safe to say...

ANNOTTI: It's not something...

COSTELLO: It's safe to say that all of us would contribute to this national pool, right? And the thing that most people were upset about is, let's say some millionaire decides to build a beautiful mansion in a hurricane zone, and the mansion is wiped out. And we're all going to pay to rebuild that. That really is what is making people upset.

ANNOTTI: And very understandable, particularly for those of us who live in the Midwest, who consider ourselves less at risk for catastrophes.

However, it's more than just a national catastrophe fund. I think you have to rethink the way you prepare for and recover from national disasters, and not just natural disasters, but terrorism losses, as well as earthquakes and hurricanes. And that means looking at land-use issues and building codes. And all of those things you can do beforehand to reduce the losses before you just set up a fund to have, you know, an unbroken pipeline to pay for the losses without regard to risk.

COSTELLO: Other people wrote in and said, isn't that what our tax dollars are for? I mean, why not use our taxes? Because we're already doing that to repair some of this damage, right?

ANNOTTI: Well, see, and that's the issue. Is it more prudent for people to pay premiums and have insurance companies hold those reserves, which they have to pay taxes on? We don't think that's quite the most prudent idea, because it's not the best use of those funds. Or is it more prudent for insurers to assume part of the risk and the government to assume part of the risk and pay for that through government funds?

Because there are certain things -- hurricanes potentially, certainly earthquakes, terrorism losses -- that are unpredictable. And insurance is not about unpredictability. It's about predictability. When you can't predict something, it's very difficult to insure.

COSTELLO: OK. I need a short answer from you now. Because of Katrina, how much are all of our insurance premiums likely to go up?

ANNOTTI: Not likely to see rate increases across the board across the United States. You know, you saw after Florida last year, there was no national rate increase. It was limited to the areas affected by the storm.

So, the Gulf Coast will be affected by it, but I don't see nationally rates going up. COSTELLO: Yes, I know in Florida some people's insurance premiums went up something like 15 percent. Thank you, Joe, for taking the heat this morning.

ANNOTTI: Thank you.

COSTELLO: We appreciate it.

We're going to take a short break. We'll be back with more.

(COMMERCIAL BREAK)

COSTELLO: We have time for a quick travel forecast.

(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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