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American Morning

State of Emergency; Cutting Back on Gas

Aired September 09, 2005 - 07:00   ET

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

CAROL COSTELLO, CNN ANCHOR: And that will do it for us. From the Time Warner Center in New York, I'm Carol Costello, along with Chad Myers.
"AMERICAN MORNING" starts right now.

S. O'BRIEN, CNN ANCHOR: Carol, thank you, and good morning. We're coming to you live from New Orleans. In fact, we're at the police command and control center in downtown.

Thousands of residents still are refusing to leave the city. They are angry. They are defiant. And police are getting ready to take them out by force -- Miles.

MILES O'BRIEN, CNN ANCHOR: I'm Miles O'Brien in New York.

Congress and the president working late into the night and writing a huge check for Katrina relief, nearly $52 billion. That's on top of $10 billion from last week. A live report from Washington straight ahead.

And sorting through who gets what and when when it comes to emergency aid. Some, not all, hurricane survivors in Houston first in line for those $2,000 debit cards on this AMERICAN MORNING.

S. O'BRIEN: Good morning, and welcome, everybody. We're at the foot of Canal Street this morning. And it is, as you can see, a little bit of life down here.

The lights are on at the Hilton Hotel. It's one of a handful of hotels that they are bringing back on-line. No guests and visitors in there, excuse me, unless of course you count all the FEMA people and all the construction people, some media people, too, who have come in, are being housed at that Hilton Hotel where they have cleaned up a little bit and put the generators on.

Over here, the Harrah's New Orleans now the site of police command and control. That's where they've been holding most of the police press conference, conferences, excuse me.

And then out there in the pitch black is the aquarium, the Aquarium of the Americas. And, unfortunately, while some of the animals were saved there, the marine life saved there due to the really truly heroic efforts of the staff, the bulk of the marine life died. Some 6,000 aquatic animals were killed because they lost their life support system.

And finally, the river walk. You really can only make out the neon sign. Of course, the neon is still working.

We told you the story a little bit earlier in the week of the tourists, about 80 of them, who all holed up there while below them civil unrest had broken out. Below them, people were looting all through the night. They tell the story how they camped out there until they were finally able to get a ride out of the city.

So that's where we are this morning, Miles, reporting to you live.

M. O'BRIEN: All right, back with you in just a second, Soledad.

We begin with our look at "Mission Critical" news.

Washington sending more emergency relief money to help Hurricane Katrina victims. Late last night, the president signed a $51.8 billion spending bill. Some of that money set aside for the FEMA debit cards up to $2,000 per family. On Thursday FEMA officials said the debit card program would only continue in the Houston Astrodome, however. Other victims would need to receive their money as a check or electronic funds transfer.

And in Mississippi, about 200,000 homes and businesses without power this morning, still. Mississippi Power says it plans to restore electricity to all customers by Sunday.

The final death toll in the region still largely unknown. At last check, the number of confirmed dead was, in Louisiana was 118, in Mississippi 204. Both numbers expected to rise -- Soledad.

S. O'BRIEN: All right, Miles, thanks.

Another note we have for you. It is the 40th anniversary of Hurricane Betsy, and we got some videotape. Of course, this is old black and white film of the aftermath of Hurricane Betsy. You can see people were wading through waist-high water then as well.

That hurricane, which had its devastating consequences, is really the one that triggered the Army Corps of Engineers just two years later to start work on a floodwall, which everyone knew would only be able to sustain up to a Category 3 hurricane. And, of course, it was the failure in that floodwall that led to the massive flooding that we've seen here in the wake of Hurricane Katrina.

Let's get right to Dan Simon. He's not too far from where I am this morning, just a couple of blocks down. He's going to tell us a little bit about those what sometimes are being called the voluntary forced evacuations, which, of course, Dan, is completely contradictory. Are they voluntary or are they forced?

DAN SIMON, CNN CORRESPONDENT: Well, good morning, Soledad.

That is the real question facing the authorities as they have to make these, you know, forced evacuations, if you want to call them that, today. Really a twofold mission facing the investigators and the authorities. Number one is continuing to find survivors. Kind of a bleak task, given the fact that the hurricane made landfall early last week.

And second, as you mentioned, it's trying to get these remaining residents out of town. It's estimated there are somewhere between 5,000 and 10,000 remaining residents in the city. I've talked to a number of them, and getting them to leave is really going to be a tall order for the cops. These people absolutely do not want to leave their homes. They feel like they're able to get by. They have plenty of food and water and that they are really more comfortable here in New Orleans versus leaving the city and going to a shelter.

And, really, to talk about, you know how dramatic things have gotten, there was an example yesterday of an elderly woman being tackled by police, a real dramatic situation. This is a woman who is very frail, obviously exhausted. And authorities took her down because, and this is amazing, she had a handgun and she was allegedly pointing that gun at the cops when they went into her home -- Soledad.

S. O'BRIEN: Well, you know, Dan, I think that we're going to see a lot more of that. There's no question that there are people who do not want to leave and who are, frankly, willing to defend their homes, even little old ladies. We've interviewed a few ourselves, and they are very, very angry. We're going to have to see how that plays out over the next several days.

Dan Simon for us.

Thanks, Dan.

Let's get right back to Miles in New York.

M. O'BRIEN: Thanks, Soledad.

Late Thursday night, last night, President Bush signed a $51.8 billion aid package for the hurricane victims. FEMA will get most of that money.

Bob Franken is live at the White House.

Bob, break down those numbers for us, please.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well they are almost mind boggling, Miles, but of course so is this disaster. In the next five weeks, we can expect an allocation of about $1.4 billion a day. Fifty billion dollars has been allocated for the Federal Emergency Management Agency, amid some criticism from those who are critics now who say that it could be some of it squandered if there is not tight control.

A billion and a half, close to $1.5 billion, will go to the Department of Defense.

Of course we've seen so many military units, so many military operations on the ground. And then the Army Corps of Engineers is expected to get $400 million of this. The Corps of Engineers, of course, in the forefront of the recovery efforts. They're going to have to happen (ph), particularly the ones involving the levees. A tremendous, a tremendous amount of money.

And what is so notable, Miles, is that nobody thinks that this is even going to scratch the surface. There are predictions that $100 billion, $150 billion are going to be needed, and others who say that that underestimates the problem -- Miles.

M. O'BRIEN: Pretty soon we are talking about some real money here, Bob Franken. What about paying the bills here?

FRANKEN: Well...

M. O'BRIEN: Tax hikes. I mean what are we talking about? There is a deficit already.

FRANKEN: Well, they're going to skip lunch, I guess, but in a metaphorical way I suppose that's true.

Vice President Cheney said yesterday he did not contemplate any tax hikes. That, of course, is something that is such an athament (ph) to this administration. And there is also the argument that if you're going to spend this kind of money without breaking the bank, the bank of the United States, which you have to do, is come up with what in Washington is called offsets, that means cutbacks. Politically, that is so hard to do -- Miles.

M. O'BRIEN: Bob Franken at the White House, thanks so much.

At the Houston Astrodome today FEMA will be distributing debit cards worth up to $2,000 to help evacuees cover urgent living expenses.

Betty Nguyen is live at the Astrodome.

Betty, yesterday we were talking about this distribution. Still hasn't quite happened. Who is eligible? Who is going to receive them? Will we see them today?

BETTY NGUYEN, CNN CORRESPONDENT: Well, we've been told that after a lot of discussion, and as we were talking to you yesterday, some hesitation, FEMA, indeed, will distribute those $2,000 debit cards to evacuees here at the Reliant Park area. It's only going to start here today. It will be available to folks from other shelters here in the Houston area tomorrow. But, today, it starts right here at the Reliant Park area. And I have to tell you, you have to register first in order to get these. They are made available to the evacuees from, of course, Hurricane Katrina.

But yesterday, when the Red Cross was handing out its debit cards, the lines were so long. In fact, at this hour, they were already starting. Right now, you don't see hardly any folks standing in line for these debit cards. So apparently they are in the system. Many of the folks are in this system for these FEMA cards. And we hope it goes a lot smoother today than it did yesterday, because it was a bit chaotic. And we were even under a temporary lockdown because of all the crowd control that was needed here -- Miles.

M. O'BRIEN: Yes, it seemed like the Red Cross did a better job getting their debit card program together. You know what's interesting to me and further confusion on this is that not all victims in all locations are going to get these debit cards. What is going on with that?

NGUYEN: Well, see that -- there is two confusions here. One was yesterday with the Red Cross and the debit cards, because folks from the other shelters here in the Houston area were flooding into the Reliant Park area to get those Red Cross debit cards while they were only just available to the evacuees here in Reliant Park. Well that has been sorted out. People are in the system.

Now, today with the FEMA debit cards, they are only available to the Reliant Park area. Tomorrow they will be available to all the shelters here in the Houston area. So that's a very important note that people need to make as they are thinking about coming up and signing up and getting their hands on those debit cards.

M. O'BRIEN: All right, still a lot of confusion there. Keep it sorted out for us, Betty, we appreciate that.

Chad Myers is at the CNN Center with the latest weather update for us.

Good morning -- Chad.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Miles.

Talking about Ophelia again. Downgraded overnight. It was a hurricane yesterday, now it's a tropical storm, 65 miles per hour, although the hurricane hunter aircraft just flew in it and all I could find was about 60 to 62 miles per hour.

And then the good news is it's 115 miles from shore now. Yesterday at this time, it was about 70 miles from shore. So it's pulled a little bit away. And that means that those outer bands can't really get to Florida, like they were doing yesterday, from Daytona, all the way down even to the south, all the way to Melbourne and as far north and St. Augustine.

Here is what the storm has done so far, a loop already. And we're even forecasting another one. Here's Friday, Saturday, Sunday, stopping, turning right, turning right and then possibly even coming back toward the shore again.

Now how big that loop happens to be is a big question. That tells you if it's a big loop it goes all the way back down to Melbourne. And if it's a small loop, it may go all the way north into the northeast and actually miss North Carolina. But the areas you see behind me all under the threat of at least something. Big waves for sure even today -- Miles.

M. O'BRIEN: Chad Myers watching a wobbly storm.

MYERS: Sure is.

M. O'BRIEN: Thank you very much.

MYERS: You're welcome.

M. O'BRIEN: Still to come, a "TIME" magazine investigation into the background of FEMA Chief Mike Brown. Is he qualified for his job -- Soledad?

S. O'BRIEN: Miles, this morning we're going to follow-up on a story that you wanted to hear more about yesterday. Remember Delia Labarre, she invited us over to her home to show us how she lives. She is refusing to leave. She's very angry about the mandatory evacuation order. We're going to talk to her a little bit later today.

We're back in just a moment on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

M. O'BRIEN: Welcome back.

There are even more questions this morning being asked about FEMA Director Michael Brown and his qualifications, or perhaps lack thereof, for his job.

Carolina Miranda is a reporter for "TIME" magazine, part of an investigation looking at Brown's resume. She joins us now.

Good to have you with us -- Carolina.

CAROLINA MIRANDA, "TIME" MAGAZINE: Thanks for having me.

M. O'BRIEN: Let's go through a couple of discrepancies, or apparent discrepancies, between his FEMA bio and what you were able to discover. We've got a full screen here. We'll put it up there. According to his FEMA bio, he was the assistant city manager, with emergency services oversight, in Edmond, Oklahoma.

MIRANDA: Yes.

M. O'BRIEN: The city of Edmond, Oklahoma says assistant to the city manager, a very important distinction there, no authority over employees. And we'll go through to the next one, too. You went to a Web site called Findlaw, which is kind of a search engine for people who are involved in the legal profession.

MIRANDA: Yes.

M. O'BRIEN: His bio there, which would have been supplied by him, right?

MIRANDA: It's supplied by him or somebody in his office.

M. O'BRIEN: Right. Says outstanding political science professor Central State University. Central State University says wasn't a professor here, was only a student here. Possibility maybe he was adjunct instructor or whatever the case may be?

MIRANDA: Perhaps. Yes.

M. O'BRIEN: So what you're finding here I think might be resume embellishment, which perhaps many of us might be guilty of, or is it something more sinister than that?

MIRANDA: Well it's really hard to tell at this point. I mean what we are looking at are White House press releases, his own FEMA bio, the Findlaw bio and there are little discrepancies that on their own could amount to typos or mistakes. But that when put together, especially in conjunction with the "Newsday" report that came out this morning that talked about the fact that this electrical contractors organization where he was supposedly the head of, he was only a regional chapter head of, and it was only for a couple of months. You start putting all those little pieces together and you start to see a troubling picture.

M. O'BRIEN: Well here's what's interesting to me, though, even if you took everything at face value and everything was valid on his resume, he still seems to have pretty thin qualifications to be head of FEMA.

MIRANDA: Well, and this is something that has been covered for the last two weeks. One of the things that has come to light in all of this is that a lot of the FEMA, the top FEMA folks, at this point -- in "The Washington Post" is a great report about this this morning -- are political contacts of the Bush administration, that they don't have emergency management experience, Michael Brown in particular. He was the college roommate of Joe Alba who was Bush's campaign manager and didn't have emergency experience before taking on this position.

M. O'BRIEN: Well, and if you look at Homeland Security, you've got a lawyer at the top and a lawyer in charge of FEMA. And not to cast dispersions towards lawyers, but these are not operational people who are in charge here. And that can be significant, can it not?

MIRANDA: Well, and I think that's what we're seeing. And we're going to see as this independent commission, if it ever gets off the ground, starts to investigate with what happened to the response is what happened, were there not enough operational people in charge? Has there been a bit of a FEMA brain drain since 2003 when Michael Brown came on?

M. O'BRIEN: Well, and that is the allegation from inside FEMA, that essentially the agency has been gutted. Do you have a sense right now how much of this has to do with Mr. Brown and how much of it has to do with just taking an agency and making it a shell?

MIRANDA: Well, I think it's an agency certainly in transition. I think once it became part of the Department of Homeland Security things changed for the agency. It's not clear to me. I haven't done a lot of the reporting on what's been going on inside the agency, so I don't want to speak out of turn. But I think that there's a lot of things that are still up in the air and that aren't going to be figured out for some time. M. O'BRIEN: All right. FEMA spokesperson had a response to your article. Let's listen briefly.

(BEGIN VIDEO CLIP)

NATALIE RULE, FEMA SPOKESMAN: Mr. Brown has always stated that he was an assistant to the city manager in Edmond, Oklahoma, where he did everything from assisting the city manager in contingency planning to overseeing fire and police negotiations and certainly has never made any claim for it to be more than that, but has also picked up fantastic experience in that way that has helped him now in his leadership role at FEMA.

(END VIDEO CLIP)

M. O'BRIEN: All right. So put this all together, what do you come to -- what's your conclusion?

MIRANDA: Well, it's interesting, because she said Mr. Brown has always said that he was assistant to the city manager. That's what our story says. His bio says assistant city manager, completely different position.

M. O'BRIEN: Carolina Miranda, "TIME" magazine, thanks very much.

MIRANDA: Thank you for having me.

M. O'BRIEN: Still to come on the program, Americans bought less gasoline because after Katrina, but it may not be because of high prices. Andy Serwer is here with that.

Stay with us for more AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: All right, class, a little Economics 101 now. Andy Serwer here to explain why people are buying less gas.

ANDY SERWER, "FORTUNE" MAGAZINE: Well, it's not hard to figure out, a real tangible effect of higher gas prices, Miles, people simply bought less. A new report out this morning saying that Americans used 4 percent less gasoline last week than they did the week previous to Hurricane Katrina. We usually use about 9.4 million barrels a day of gas and they were down to 9 million barrels a day.

Some of that, no doubt, is because people simply could not buy gasoline in places like Louisiana, Mississippi and Alabama. But experts say that doesn't account for all of it. When you see gasoline at $3.50 a gallon, some people were simply staying home and not filling up their tanks.

Meanwhile, the price of gasoline continues to inch downward. We're now at $3.01 a gallon for regular unleaded. Wouldn't it be nice to see that go below $3?

Shell is reporting that its Mars platform, you may remember seeing a picture of this, heavily damaged in the hurricane. Will not be operational until next year. This takes a lot of manpower and a lot of dollars to get these babies up and running, Miles. And I think it points to the fact that energy prices are going to remain high over the next months and well into next year, no question.

M. O'BRIEN: And that one platform is responsible for quite a bit of production?

SERWER: Hundreds of thousands of barrels of oil a day.

M. O'BRIEN: And there are several others not as badly damaged but out of commission still?

SERWER: Absolutely.

M. O'BRIEN: Yes.

SERWER: All across the Gulf.

M. O'BRIEN: Andy Serwer, thank you very much.

SERWER: Thank you.

M. O'BRIEN: Soledad.

S. O'BRIEN: All right, Miles, thanks.

Well Hurricane Katrina may be a disaster like no other. But 40 years ago today, another storm flooded New Orleans.

And as John Zarrella reports, to a large degree, New Orleans has never recovered from that storm, too.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): The images out of New Orleans today are in color. Forty years ago they were in black and white. Otherwise, they look the same. In September 1965, Hurricane Betsy slammed south Florida, flooding neighborhoods, downing trees and smashing storefronts.

UNIDENTIFIED MALE: Betsy struck at the worst possible time, high tide at night.

ZARRELLA: Just like Katrina, Betsy strengthened in the Gulf and hit Louisiana as a Category 4 storm. Unlike Katrina, which went east of the city, Betsy made landfall and moved just to the west of New Orleans.

JASON DUNION, NOAA METEOROLOGIST: New Orleans did catch that portion of the hurricane eyewall is what we call it. And what that did was bring a lot of flooding up the Mississippi River.

ZARRELLA: The Mississippi River poured into the city, 75 people were killed. And for days, the city's inhabitants sloshed through waist-deep water. In the wake of Betsy, Congress authorized the Army Corps of Engineers to build better flood protection. Construction began in 1967 and was still under way 38 years later when Katrina hit. And over the years, it became increasingly obvious that the flood protection system under construction wasn't going to be high enough. Project Storm, as the Army Corps called it, would protect the city from a Category 3, considered the most likely to hit the city.

AL NAOMI, ARMY CORPS OF ENGINEERS: And it was well before Hurricane Camille, or any of the big storms, that they realized could possibly hit. If we would ask them for Project Storm today, it's likely it wouldn't give us the same Project Storm.

ZARRELLA: With the city sinking, wetlands eroding and the wall too small, the Army Corps began a study five years ago to see how much it would cost to raise the levees to protect against bigger storms. The study isn't done.

In 2001, Naomi told us it would take at least 15 years and lots of money to upgrade the system once the project was approved.

NAOMI: I think it's going to be in the billions, billions of dollars. I don't know how much, depends on the plans we come up with, but it's going to be very expensive.

ZARRELLA: That seemed like a lot of money four years ago. But today, it's only a fraction of what it's likely going to cost now to rebuild New Orleans and the wall that protects it.

John Zarrella, CNN, Miami.

(END VIDEOTAPE)

S. O'BRIEN: According to the Army Corps of Engineers, the water here is receding at a rate of between four to six inches every day -- Miles.

M. O'BRIEN: Thank you, Soledad.

Still to come in the program, red tape slowed down early relief efforts. How can we make sure that doesn't happen again? One Louisiana lawmaker offers his ideas ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Get the latest news every morning in your e-mail. Sign for up AMERICAN MORNING quick news, cnn.com/am is the place.

Still to come, moving forward in Mississippi. We'll get the latest on progress made in the recovery there. Stay with us for more AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Good morning, and welcome back. We're coming to you live from downtown New Orleans. And in fact, we'll give you a little tour of where we are this morning. The police command and control center at the foot of Canal is pretty much where we've set up.

If we get a shot here of the aquarium, now that the light is up, you can get a better sense of how it looks today. Who would of thought that one day tanks would be parked right out in front of the aquarium. They suffered a massive loss there, 6,000 of their marine animals perished. And that happened because, of course, when they lost the power, the life support systems also failed, and so they had some very massive problems.

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