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American Morning

Defense Spending; War Of Words; California Wildfire; 'Minding Your Business'; Fashion Week Designer Tory Burch

Aired February 07, 2006 - 07:30   ET

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

MILES O'BRIEN, CNN ANCHOR: But before we get to that, let's get to Kelly Wallace in the newsroom.
Hello, Kelly.

KELLY WALLACE, CNN CORRESPONDENT: Hello there, Miles.

And hello, everyone.

A final farewell today for civil rights leader Coretta Scott King. Tens of thousands of mourners have been paying their respects over the last several days. President Bush among those expected to attend today's funeral ceremony. And he'll be joined by his father, the former President George Bush, and two other former presidents, Bill Clinton and Jimmy Carter. CNN will have live coverage starting at noon Eastern today.

New protests against cartoons depicting the Prophet Muhammad. And this was a scene in Kabul, Afghanistan today. Police using batons to try and hold back stone- throwing protesters outside the Danish diplomatic mission. There are reports of injuries. The United Nations is evacuating its staff. We're also hearing reports of protests in other parts of Afghanistan. We will be keeping an eye on this story throughout the morning and, of course, bringing you any developments as we get them.

Turning now to Iraq. There has been a double bombing at a central Baghdad marketplace. The explosions coming just minutes apart today. At least three people were killed. Some 20 others are wounded.

A tough job for prosecutors and attorneys trying to pick a jury in the trial of Zacarias Moussaoui. Plenty of fireworks on Monday. Moussaoui was kicked out four times for interrupting proceedings. During one outburst, Moussaoui announced he was al Qaeda, then called the court a circus. The jury will decide whether Moussaoui should be put to death or spend his life in prison.

U.S. Attorney General Alberto Gonzales could be called again to testify about the domestic spying program. On Monday, he defended the program calling it an early warning system. But Senate Judiciary Chairman Arlen Specter says he may call for more hearings on the issue. In addition to Gonzales, former Attorney General John Ashcroft may be called in to testify.

And Louisiana Governor Kathleen Blanco says it's time to play hardball. She says many Washington officials think of hurricane recovery as, "yesterday's problem." Governor Blanco led a bus tour through some of the devastated areas Monday. She spoke at the opening of a special legislative session for hurricane recovery.

(BEGIN VIDEO CLIP)

GOV. KATHLEEN BLANCO, LOUISIANA: I'm holding their feet to the fire in Washington and this is not about party politics. It's about our people. To all of our people who are still displaced, I want to assure you that our number one priority is to bring you home.

(END VIDEO CLIP)

WALLACE: And Louisiana lawmakers resume their meeting later this morning. Finding more housing and rebuilding the levees are topping their agenda.

That gets you caught up on some of the headlines. Now to Miles.

MILES O'BRIEN: Thank you very much, Kelly.

Defense Secretary Donald Rumsfeld headed to Capitol Hill today. He will be there to help sell the president's new budget plan for the Defense Department or about $440 billion. None of it is earmarked for Iraq. So what is in it? AMERICAN MORNING's Bob Franken is in Washington and he's one of those guys that considers a budget interesting reading. And so we give him the budget, we tell us, Bob, please tell us what's inside.

Bob, what do we know?

BOB FRANKEN, CNN CORRESPONDENT: Already people are reaching to change to the Cartoon Network.

MILES O'BRIEN: I know you can make it sing. Go.

FRANKEN: We are talking about $2.77 trillion. Trillion is a million million. So what we're talking about here, we're talking about 13 digits, unless, of course, you include the dollars and cents to come up with a figure here. That, as you pointed out, well over $400 billion is designated for defense. That does not include $120 billion that is already been asked for for the war in Iraq.

Now that means, with all that money and with other considerations, that many programs are going to take hits. As a matter of fact, 141 agencies are expecting to take hits. They include Medicare, education, health programs, the pension benefit guarantees corporation, child support, food stamp eligibility, farm supports. That list goes on and on. So we're talking here about real big controversy and, Miles, real big bucks.

MILES O'BRIEN: All right, I'm having my -- a hard time getting my head around this numbers, $2.77 trillion. Help me get it. Help me get it. I need an analogy -- a Franken analogy here.

FRANKEN: Let's do it this way. A Franken analogy. And this is one that only you will like. In, Miles, it is the distance between the planet Earth and the planet Neptune.

MILES O'BRIEN: It depends what time of year, of course, but, no, that's . . .

FRANKEN: That's, of course -- yes, and only you would say that, Miles.

MILES O'BRIEN: I'm sorry. That's a long way. OK. So, you know, it takes you back to the old Everett Derkson (ph) in saying, you know, a billion here, a billion there, pretty soon you're talking about some real money. What are we talking about now?

FRANKEN: Well, Everett Derkson also said that if you take a million in a million seconds covers three years. So we'll do the math for you, 2.77 trillion seconds is about 8 million years.

MILES O'BRIEN: Wow.

FRANKEN: Wow.

MILES O'BRIEN: All right. The man -- did you do that on an abacus or did -- what did you do?

FRANKEN: Actually, I did it all in my head.

MILES O'BRIEN: Very well done, Bob Franken. You're our man. Zain.

ZAIN VERJEE, CNN ANCHOR: Thanks, Miles.

Angry words between two possible presidential candidates. Republican Senator John McCain fields Democratic Senator Barack Obama have backed out of a bipartisan bill on lobbying reform. In a letter to Obama, McCain writes this. "I understand how important the opportunity to lead your party's effort to exploit this issue must seem to a freshman senator, and I hold no hard feelings over your disingenuousness. Again, I have been around long enough to appreciate that in politics the public interest isn't always a priority for every one of us." CNN's Senior Political Analyst Bill Schneider joins us now live in Washington.

Bill, why is Senator McCain so ticked off here? It's sort of a surprising tone in this letter. A little bit harsh, don't you think?

WILLIAM SCHNEIDER, CNN CORRESPONDENT: Harsh? I'd say this letter is an alarming amount of seething sarcasm towards Senator Obama, his freshman colleague from Illinois, the Democrat, and McCain, of course, is a Republican. McCain had a meeting, a bipartisan meeting, to try to create a task force to study the issue of lobbying and ethics reform. He thought, he says in his letter, that Barack Obama was with him in that effort. It's led by Senator McCain and Senator Joe Lieberman, a Democrat. But then he found that Senator Obama had joined forces with the Democratic leader in the Senate, Harry Reid, to work on a different bill and that that bill would go through the regular committee process.

This is all inside baseball. It's all procedure in the Senate. The bottom line is Senator McCain felt betrayed by Senator Obama and he felt that Senator Obama was pursuing a partisan path and he wrote this letter with really scathing sarcasm and sarcasm.

VERJEE: Senator Obama fired back. His response basically said that he was really puzzled by the whole letter by McCain. And he also added, "the fact that you have now questioned my sincerity and my desire to put aside politics for the public interest is regrettable but does not in any way diminish my deep respect for you, nor my willingness to find a bipartisan solution to this problem."

Can Barack Obama, Bill, be accused of playing partisan politics by supporting a fellow Democrat? SCHNEIDER: Well, of course, that is partisan by definition, that he's choosing to work with his Democratic allies and the Democratic caucus to come up with a bill which he says in the end he expects to be a bipartisan bill. So I suppose you can make the charge that he's decided to play with the Democrats. He says that he made that clear to Senator McCain and the others at that committee meeting early on. We don't really know what went on privately between Senator Obama and Senator McCain. All we know is that Senator McCain feels deeply betrayed and aggrieved and his criticism of Senator Obama is extremely harsh.

VERJEE: McCain's popular with the Democrats. Is a letter like this going to hurt his reputation among them?

SCHNEIDER: He's one of the few politicians -- in fact, he may be the only politician that I know of who's popular in both parties. He's got about equal support from Republicans and Democrats. These days, that's rare.

What his letter to Obama does is really endanger his esteem, his respect among Democrats, because Barack Obama is a star among Democrats. He's seen as the future of the Democratic Party. And for McCain to write a letter with these words and this tone, accusing him of a personal betrayal, I think the results is going to be that a lot of Democrats are going to say, how dare he write a letter like that to one of our most esteemed colleagues.

VERJEE: So, would it hurt Obama that Obama responded in this way in any way?

SCHNEIDER: I think Obama's response was more conciliatory. I mean he said he was puzzled by it, but in the end he said he'll continue to respect Senator McCain. He really chose to back down from a fight and his answer to McCain's charges was, well, I told you at our meeting that I intended to work with the Democratic caucus and to support Senator Reid's bill.

So a lot of this is kind of puzzling. And again, we don't know what went on privately between McCain and Obama but something clearly set off Senator McCain into a very, very bitter response.

VERJEE: Our Senior Political Analyst Bill Schneider putting it all into perspective for us. Thanks, Bill. Miles.

MILES O'BRIEN: An inferno this morning in the hills of Orange County, California. More than 1,500 acres already charred, 2,000 homes evacuated. Schools are closed. No relief in sight as those Santa Ana winds continue to blow. Joining us now is Captain Steve Miller. He's with the Orange County Fire Authority. He's got a busy night -- morning on his hands.

Captain, thanks for taking some time out for us.

Just bring us up-to-date right now. How many acres have been charred by these fires?

CAPT. STEPHEN MILLER, ORANGE CO. FIRE AUTHORITY: Well, right now, your estimate that you have, the 1,500, that could increase tremendously here this morning. We have not -- until the sun comes up right now, we have to get our helicopters up and do an exact GPS mapping. So right now it's just kind of a best guesstimate. But throughout the evening so far, they've been very successful in their backfiring operation, so expect the acreage to increase significantly.

MILES O'BRIEN: Tell us about that. We're looking at some video footage as you speak of those back-fire efforts. That could be a dicey proposition with such gusty winds. You say it's been successful thus far. Are you concerned?

MILLER: Well, right now I would call it cautiously optimistic. The fire there that you see, we have a bunch of boundaries throughout that we've identified as our goals. And the 241 has been our main area of focus. Reason being is if the fire crosses over the 241, that's where we have our residential areas that will be threatened, that have been evacuated. And that's our primary area of concern. It's (INAUDIBLE) that area procured.

MILES O'BRIEN: Just for people who are not too familiar with the area, the 241 is a major highway which offers a natural fire break for you, right?

MILLER: Right. And I'm sorry about that. And, yes, it's basically a kind of a divider between a bunch of wild vegetation, if you will. If it gets across that main highway there, then the fire is within about anywhere from a half a mile to three-quarters of a mile to a residences and it's uphill and nothing but natural vegetation to carry the fire up to those homes. MILES O'BRIEN: That's not good.

MILLER: So we've really been concentrating on that area.

MILES O'BRIEN: Tell us about -- you've evacuated about 2,000 homes now. Is that correct, first of all?

MILLER: Yes. You know, again, that's an estimate.

MILES O'BRIEN: Right.

MILLER: We've looked at the area. And, you know, there's a tremendous amount of homes being impacted right now, along with traffic that uses the 241 for commuting.

MILES O'BRIEN: Do you expect that evacuation number is going to go up today?

MILLER: You know, I sure hope not. Like I say, cautiously optimistic. Right now the weather's in our favor. We've been taking advantage of that through the evening and we'll continue to do so until it starts to warm up a little bit here. Weather predictions are that the winds will carry on in through Wednesday and that's going to be our biggest enemy if they do kick up again. Thus far we've been just working very diligently to control that.

MILES O'BRIEN: And just, you know, once again for folks who are not quite as familiar with the south land, those Santa Ana winds, those are not just your garden variety type winds?

MILLER: No. You know, when we first had the fire hit, we were gusting anywhere from 35 onwards up to about 50 miles per hour. And they are heated winds, so they kind of -- the humidity goes way down, it heats up the vegetation. Kind of pre-warms it, if you will. And so when the fire races through there, it literally races through and there's just no outrunning it and getting ahead of it.

MILES O'BRIEN: Captain Stephen Miller, who is with the Orange County Fire Authority, thanks for taking some time out for us. We wish you and your teams well as you try to battle those blazes today.

MILLER: Thank you.

MILES O'BRIEN: Let's get to Chad in the weather center.

(WEATHER REPORT)

VERJEE: Rocking the biz every morning on our program, Andy Serwer.

ANDY SERWER, CNN CORRESPONDENT: I like that, Zain, thank you.

VERJEE: I try. I try.

SERWER: Emotions are afraid at the Enron trial.

Plus, Rock The Vote is rocked by financial crisis. Stay tuned to AMERICAN MORNING coming up.

(COMMERCIAL BREAK)

MILES O'BRIEN: Who knew that Joey Bells (ph) was a Bon Jovi guy? Yes, there he is. He's rocking.

SERWER: You go.

MILES O'BRIEN: Who knew? Who knew? Ted (INAUDIBLE) in the control room. He's taking up that . . .

SERWER: Important role, maybe, in turning it up?

MILES O'BRIEN: The white guy who can't dance in the control room's job, which is an important job.

VERJEE: But can (INAUDIBLE) up.

MILES O'BRIEN: It's an important -- we need one in every control room.

Rocking the Vote. Not so rocking, right?

VERJEE: Rock by death.

SERWER: Rock by death. That's the word. A couple of stories to tell you about.

First of all, Houston, the Enron trial. Emotions frayed down there. Three days on the witness stand, Mark Koenig, 50 years old, former head of investor relations at Enron, Dan Petrocelli, defense attorney, trying to make Koenig look bad because Koenig copped a plea and is testifying against his clients. Petrocelli asking Koenig how old he was or how old his three kids were when he pled guilty and Koenig started to choke up, trying to discredit Koenig, but this may backfire because it may make Koenig appear sympathetic, at least I think so, to the jurors. A lot of other witnesses coming up. Ken Rice, Terry West, but none of the big guns on tap like Andy Fastow yet.

Now let's talk about this Rock the Vote crisis.

MILES O'BRIEN: Well, let's settle could we settle one thing?

SERWER: Yes, let's settle one thing.

MILES O'BRIEN: Puff Diddy, Puff Daddy . . .

VERJEE: Diddy. Diddy.

MILES O'BRIEN: Sean Comb, the artist formerly known as . . .

VERJEE: We've been through this.

SERWER: We've been here.

MILES O'BRIEN: All right. I'm sorry. Diddy.

SERWER: P. Diddy.

MILES O'BRIEN: It's Diddy. Just Diddy, thank you.

VERJEE: It's just Diddy.

SERWER: It is. It's Miles O'Brien.

VERJEE: The anchor formerly known as Miles O'Brien.

MILES O'BRIEN: Could be happening.

SERWER: Could be.

All right. Let's talk about this Rock the Vote crisis here. Rock the Vote started in L.A. in 1990 and it helped register millions of young people to vote. It also became a cause celeb. It was linked with MTV. These were some Rock the Vote benefits. And also raised millions of dollars.

But a story in the "L.A. Times" today says there are big problems at Rock the Vote, this organization. It is $700,000 in debt. They've had to reduce the number of people working in the company from 20 to two. The president has resigned. Hasn't been replaced. And they've been sued by various entities, including Los Angeles County, sued by vendors because they don't think they're going to get their money.

Now what's going on here is probably mismanagement. And I hate to say this, folks, but the record business, long known for mismanagement and people not actually figuring out where the numbers are going here. MILES O'BRIEN: Ergo the big picture. However, this could all be solved by a stroke of the pen of one Diddy, right, 700k?

SERWER: Yes, 700 Diddy's -- 700,000 Diddy's, I should say.

MILES O'BRIEN: Feels strongly about Rocking the Vote . . .

SERWER: Right.

MILES O'BRIEN: Write the check.

VERJEE: Why doesn't he do that?

SERWER: Coming at you.

MILES O'BRIEN: We'll see.

VERJEE: All right. Andy, thanks.

SERWER: You're welcome.

MILES O'BRIEN: Coming up, we have important advice for you if you're looking for a house there. All those hidden closing costs can really add up if you don't pay attention. So we'll tell you how to make sure . . .

SERWER: So do so. So pay attention.

MILES O'BRIEN: So pay attention. Listen up, folks. We're going to save you money. Now what other program can offer you that?

Plus, a special look at New York City's fashion week today. We'll meet the designer Oprah once called the next big thing in fashion. That's next on AMERICAN MORNING.

(COMMERCIAL BREAK)

VERJEE: It's fashion week in New York and today we want to introduce you to a woman very well known among fashion insiders, but who's only now becoming popular with the public. Her name is Tory Burch and she's worked on the fringes of fashion for years, but never as a designer. Well, at least until now. AMERICAN MORNING's Alina Cho has the story.

(BEGIN VIDEOTAPE)

ALINA CHO, CNN CORRESPONDENT, (voice over): She's 5'4" and 100 pounds, but Tory Birch is a force in fashion.

TORY BURCH, FASHION DESIGNER: I love the colors of this.

CHO: Inspired by her stylish parents, Birch created Tory Burch, a line of clothing and accessories.

BURCH: I've always loved designer clothing, but I got to a point where I didn't want to spend the price of designer clothing all the time.

CHO: Cheap clothes that don't break the bank. Not that money was ever an issue. Burch has three homes, including this 9,000 square-foot apartment in a glittery New York hotel.

BURCH: This is where it all happened.

CHO: She's a front row regular at the fashion shows and also a regular in the society column. She doesn't have to work but says not working was never an option. Burch launched her line two years ago with her husband's money and no design background.

So you were scared?

BURCH: I was a little nervous. I was definitely scared. People came expecting a t-shirt line or something that, you know, they could sort of roll their eyes in a way. And I think that I sort of had to prove myself a little bit.

CHO: She has. It doesn't hurt that Burch is a walking billboard. Mariah Carey wore one of her signature tunics in a recent video. And the list of celebrities wearing Tory Burch is only growing.

BURCH: Reese Witherspoon and Debra Messing and Oprah.

CHO: In fact, Oprah likes Tory's clothes so much she invited her to be a guest on her show.

BURCH: I was not sure it was really Oprah's people when they called. I thought it was more of a joke that one of my friends were playing on me.

CHO: It wasn't. Oprah called Tory "the next big thing in fashion." The next day, her website got an unprecedented seven million hits. She juggles it all on five hours of sleep. She says she wants to set a good example for her children and to make a difference for the women who wear her clothes.

BURCH: I hear a lot that it makes them happy to wear it. They get stopped on the street and, you know, they feel good in it. And I think that's sort of what's exciting for me. (COMMERCIAL BREAK)

VERJEE: AMERICAN MORNING's Alina Cho covering fashion week for us all week long. She'll bring us another report from the catwalk tomorrow.

Miles.

MILES O'BRIEN: Not a bad assignment Alina gets, I should say.

Coming up, are you buying a new house? All those closing fees may not seem like that much, but then start adding them up. We'll tell you how to make sure you don't get overcharged and you don't get surprised with that HUD statement at closing.

Plus, our special health series for folks in their 30s, 40s and 50s. We're covering the age spectrum here, folks. Today, tips for men on what tests they should ask for when they go to the doctor. Yes, that test too.

Stay with us for more AMERICAN MORNING.

(COMMERCIAL BREAK)

MILES O'BRIEN: Good morning. I'm Miles O'Brien.

VERJEE: And I'm Zain Verjee in for Soledad.

MILES O'BRIEN: Seeing orange in Orange County. Two hundred homes evacuated near L.A. as a wildfire spreads by high winds. We're live with the latest.

Coretta Scott King being laid to rest today. Four American presidents among the thousands expected to attend in Atlanta. We have the latest on her funeral.

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