Return to Transcripts main page

American Morning

Touting The Economy; Kennedy Crash; Sleeping On The Job; Softer Edge

Aired May 05, 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: Checking our top stories.
Secretary of Defense Donald Rumsfeld on the defensive. Rumsfeld got an earful from a former CIA analyst during a Q&A session in Atlanta. Ray McGovern accused Rumsfeld of lying about pre-war intelligence on Iraq. He was haggled as well.

The price tag for 9/11 memorial in New York is on the rise. Construction could top a billion dollars. That's double what was originally estimated.

The main rebel group in Sudan's Darfur region has agreed to sign a peace agreement. The two remaining rebel leaders rejected the deal casting doubt on whether the plan will work.

Good morning to you. I'm Miles O'Brien.

SOLEDAD O'BRIEN, CNN ANCHOR: And I'm Soledad O'Brien.

We are expecting to see April's unemployment numbers in just about an hour. Let's get right to Andy Serwer with that.

Good morning.

ANDY SERWER, CNN CORRESPONDENT: Good morning.

Fifty-eight minutes from now, roughly, we will hear about the economy in terms of jobs for the month of April. Yes, it is the first Friday of the month and that's when the jobs report comes out.

Here's what economists are looking for. They expect 200,000 jobs to be added to the economy for the month, which is a pretty good number. There were 211,000 jobs added in the previous month. And that exceeds the average in 2005 which is 171,000 jobs.

The economy is growing nicely. The fastest in two years in the first quarter. Unemployment rate at 4.7%, which is a four-year low. So clicking on all cylinders I think you could make the argument.

MILES O'BRIEN: What kinds of jobs? Are these Mc jobs?

SERWER: It should be across the board. You know, the big question is manufacturing, Miles, because that has been the one weak part of the economy. And if we see some strength there, that really would be a very good sign. Some other economic news to tell you about here quickly. Productivity in the first quarter up 3.2 percent and wages, this is very important, up 5.7 percent, which is very, very strong. That's good news. It's almost too much good news because it starts to get a little bit inflationary. Economists worrying about that. April retail sales also strong. So we're really seeing strength and it flies in the face of high gas prices. $3 a gallon apparently not enough to slow this economy down.

SOLEDAD O'BRIEN: Right. Which some people say is a big problem.

SERWER: That's right.

SOLEDAD O'BRIEN: It should be, right?

SERWER: Yes.

SOLEDAD O'BRIEN: It should be enough to get people to think about ways to conserve.

SERWER: Right. But it does not seem to be doing that.

SOLEDAD O'BRIEN: All right. Well, you know, the good news, though as you point out is good news for the White House, and all of this is expected to bring a flurry of activity from the Bush administration. Let's get right to CNN's Kathleen Koch live for us at the White House.

Hey, Kathleen, good morning.

KATHLEEN KOCH, CNN CORRESPONDENT: Good morning, Soledad.

And, of course, for pretty much any administration, it is standard practice that when good numbers come out on the economy, you quickly stand up and take credit for them. And so it will be no surprise to anyone here if President Bush at some point this morning comes out and does just that. Though there is no such appearance right now on his schedule.

The Bush administration has in the past, after these good job numbers come out, and touted the fact that the administration has -- the economy's added jobs for the last 31 months in a row. Adding some 5.1 million new jobs to the U.S. economy. Creating them for American workers and employment rate down to some 4.7 percent. The bush administration coming out regularly and pointing out that that's below the average rate for the '60s, '70s, '80s and '90s.

Of course the news is not good for the entire country across the board, in particular the very hard hit Gulf Coast region ravaged by Hurricane Katrina. Down there in some of the various cities that President Bush visited last week, unemployment is still hanging between 15 and 20 percent. So, again, we are looking for perhaps the president to come out and take credit for some of those good numbers later today.

SOLEDAD O'BRIEN: Kathleen Koch, we'll watch and see, thanks. KOCH: You bet.

SOLEDAD O'BRIEN: Despite the rosy economic picture, some recent poll numbers not translating well for Republicans. A new Associated Press Ipsus (ph) poll shows that 51 percent of people asked said that Democrats should be in control of Congress. Thirty-four percent said they wanted Republicans to be in power. Midterm elections, as you know, are six months away. Miles.

MILES O'BRIEN: A wee hours car crash. A Kennedy reportedly staggering and incoherent and a whiff of preferential treatment. It has all the ingredients of a Capital Hill pot boiler. The time, the spotlight is on Senator Ted Kennedy's son, Patrick. A congressman from Rhode Island. CNN's Brian Todd with our story.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT, (voice over): Reporters catch up to Representative Patrick Kennedy at the end of a traumatic day.

REP. PATRICK KENNEDY, (D) RHODE ISLAND: I'm sorry to keep you up so late.

TODD: Congressional and law enforcement sources tell CNN, early Thursday morning, Capitol Hill Police observed a car, driven by Congressman Kennedy, crash into a barricade at this intersection on Capitol Hill. These sources say Patrick Kennedy was the only person in the vehicle and was not injured.

CNN sources in contact with police officials who had spoken to officers on the scene says the officers observed that Kennedy's car was swerving before the crash. A police union official says, according to officers on the scene, Kennedy's car almost hit a police vehicle.

CNN sources say the officers believed Kennedy appeared to be intoxicated. The head of the D.C. Chapter of the Fraternal Order of Police, who got information from police officials, gave this account to Wolf Blitzer.

LOU CANNON, DC FRATERNAL ORDER OF POLICE: The officers believed they detected an odor of alcohol about him based on his appearance, based on their experience.

TODD: Late Thursday, Kennedy issued a statement saying he'd earlier gotten a prescription for an anti-nausea medication, Phenergan, which can cause drowsiness. Kennedy's statement reads in part, "following the last series of votes on Wednesday evening, I returned to my home on Capitol Hill and took the prescribed amount of Phenergan and Ambien, which was also prescribed by the attending physician some time ago and I occasionally take to fall asleep. Some time around 2:45 a.m., I drove the few blocks to the Capitol Complex believing I needed to vote. Apparently I was disoriented from the medication. At no time before the incident did I consume any alcohol." There are also questions about the handling of the incident by the Capitol Hill police. A letter from a top Capitol Hill Police union official to the acting chief, a document seen by a CNN producer, say the responding patrol officers were ordered to leave the scene by superior officers and were not allowed to give Kennedy a sobriety test. In his statement, Kennedy says the officers drove him home.

The letter from Officer Greg Baird reads in part, "these circumstances call the integrity of our organization into question, creating the appearance of special favor for someone perceived as privileged and powerful."

Late Thursday night, Kennedy said this to reporters as he left his office.

KENNEDY: I never asked for any preferential treatment.

QUESTION: Did you receive it, do you think?

KENNEDY: That's up for the police to decide. And I'm going to cooperate fully with them.

TODD: A senior congressional official tells CNN there will be two investigations connected to this affair. A basic police investigation of Kennedy's crash and an internal Capitol Hill Police probe of how they handled it.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

MILES O'BRIEN: Coming up in our next hour, we'll talk with the roll call reporter who first broke this story.

Soledad.

SOLEDAD O'BRIEN: Elizabeth Smart's first live interview since she was abducted and then held captive for nine months. The self proclaimed profit, you'll recall, kidnapped Elizabeth from her home back in 2002. Allegedly wanted to make her his second wife. Well, Elizabeth is now 18 years old and she tells CNN's Larry King she's been able to leave that episode behind her.

(BEGIN VIDEO CLIP)

ELIZABETH SMART, RESCUED AFTER ABDUCTION FROM HOME: It seemed very unreal. I don't know. I couldn't believe it because my family has always been safe. My mom's always, you know, call me when you get to your friend's house. You know, you need to be home by this time. You know, I -- we've always been like a safe family. So I didn't know what was going on.

LARRY KING, CNN ANCHOR: Did you ever think during this time, Elizabeth, that you would be killed?

SMART: You know, when I first -- when -- yes. Yes, I did. KING: When you were first taken?

SMART: Yes.

KING: After a while, though, did that not enter your thoughts?

SMART: No. I was -- it was always a possibility. One day my mom sat me down and she said, you know, Elizabeth, you can either, you know, forgive them and move on and just forget that it ever happened to you and just, you know, continue on in your life. Or, you know, you can just -- I mean, yes, what they did to you was horrible and no one -- you didn't deserve that and no one should deserve that. And, you know, you can just sit there and be mad at them but really then your just -- your whole life is going to be wrapped up in it and you won't be able to move on.

(END VIDEO CLIP)

SOLEDAD O'BRIEN: You can watch "Larry King Live" every night at 9:00 p.m. Eastern.

Miles.

MILES O'BRIEN: Let's check the weather now. Chad Myers at the CNN Center with that.

Hello, Chad.

(WEATHER REPORT)

MILES O'BRIEN: Coming up in the program, great work if you can get it, I guess. We'll meet a woman who's been lying around since February to help NASA fly astronauts to Mars. You heard me right. We'll connect those dots for you.

And the final word on how much money the oil companies raked in while you were emptying your wallet at the pump. Stay with us.

(COMMERCIAL BREAK)

MILES O'BRIEN: In Cleveland this morning, some intrepid mattress-nauts are facing day 75 in bed. They are boldly laying down where no one has before so that NASA can ensures future Mars explorers will have the right stuff when they get to the red planet.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, (voice over): Buzz lightyear meets Sleeping Beauty. Erin Peterson is pushing the final frontier by lying around in bed. She hit the sheets here in Cleveland on February 20th and she hasn't gotten up since. No standing, no sitting allowed.

Well, there is this. The high point of her day. Suspension. It's all part of a NASA study to see what might happen some day should astronauts go to Mars, a minimum two-year round trip with little or no gravity. ERIN PETERSON, NASA BED REST VOLUNTEER: I've always been really interested in astronomy and space travel and all that kind of stuff. And when I found out that it was for NASA, I was like, I don't see any reason why I shouldn't. That's for a really good cause.

MILES O'BRIEN: As it turns out, lying down closely mimics the effects of weightlessness. Erin is one of two dozen guinea pigs in the study. She's part of the group that is doing absolutely nothing while another group gets some exercise.

Patty Lupeka (ph) runs on a treadmill similar to one used by astronauts in orbit. At the end of their horizontal days, these bed bound volunteers might give researchers new insights into how effective exercise in space can be. The issue is, without gravity, your bones weaken. And researchers believe astronauts on a long Mars mission might develop a case of space osteoporosis.

DR. PETER CAVANAGH, CLEVELAND CLINIC: If somebody experiences a fracture, they may not be able to heal that fracture. And, of course, if they're on the surface of Mars and not able to return for 18 months, this could be a very significant problem indeed.

MILES O'BRIEN: Doing the study was no problem for Erin. The money is better than her jobs as a temp and a cashier. She did have to sell the idea to her boyfriend, Mike, though. The pair are in a band together.

PETERSON: They all thought I was completely crazy. That was -- that was their first thing. It's like, are you nuts?

MILES O'BRIEN: But she was determined to take all that lying down. She passes her time visiting with friends, knitting and blogging.

PETERSON: As soon as I heard that I had passed the first sets of tests, I was like, I should start blogging about this. I should, you know, just record this for my own sake. I wasn't really even thinking about people seeing and I was just -- I want to keep a record of this for me just because these days are going to start blurring together really fast and it just kind of got huge after a while.

MILES O'BRIEN: As a matter of fact her site, Star Dust Holiday, has clocked 20,000 hits and thousands of new visitors drop in every day to see how the bed blogger is doing. And while she says she's looking forward to going home, she's a little leery at the prospect of going vertical again.

PETERSON: It's amazing what the body will adjust to because I'm so used to this that sitting up and eating, standing up, walking around, that sounds, ugh, kind of scary.

(END VIDEOTAPE)

MILES O'BRIEN: Now, coming up in the 9:00 Eastern hour, a little more than an hour from now, we will talk to Erin live in the midst of her daily suspension as they hoist her up. SOLEDAD O'BRIEN: And you'll give us the blog URL so we can check in with her?

MILES O'BRIEN: Oh, yes, Star Dust. We'll check -- we'll give you the blog site and all that stuff.

SOLEDAD O'BRIEN: That's great.

MILES O'BRIEN: And we'll answer every question that you have about the -- what's the number one question you have?

SOLEDAD O'BRIEN: How long did it take her before she felt very disoriented? I mean when I was on bed rest when I was pregnant, I just always felt like out of it and I wasn't even vertical the whole time.

MILES O'BRIEN: Oh, that's a good one. All right. I don't know.

SOLEDAD O'BRIEN: (INAUDIBLE) horizontal.

MILES O'BRIEN: I know what you meant.

SERWER: I have no question. It's just not a business story. Yes, really. I just can't handle this one.

SOLEDAD O'BRIEN: To much business. Absolutely.

MILES O'BRIEN: Just stick to your core competency there.

SERWER: I try.

SOLEDAD O'BRIEN: I've got a hundred questions. I've got a hundred questions for her.

MILES O'BRIEN: OK. Good.

SERWER: You do that.

SOLEDAD O'BRIEN: All right. Good. Good.

SERWER: Some business news coming up, you guys.

SOLEDAD O'BRIEN: Sure.

SERWER: The final numbers are in. Just how much money did the big oil companies make in the first quarter?

Plus, why can't we import ethanol into this country? Interesting question. Coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN: Oil profits on hand. The last of the big oil companies finally on the record with their numbers and they are . . .

SERWER: Huge. But you knew that. MILES O'BRIEN: In a word, huge.

SOLEDAD O'BRIEN: Here's the number, ready?

MILES O'BRIEN: Thank you. Drive safely.

SOLEDAD O'BRIEN: Congratulations big oil.

MILES O'BRIEN: Thank you.

SERWER: Yes. You did it. You made it.

SOLEDAD O'BRIEN: For a successful quarter.

SERWER: Congrats.

The big six oil companies, that would be Exxon BP, Total -- which is a French company --Chevron, ConocoPhillips and Shell reported all their numbers now, $32.8 billion in the first quarter.

MILES O'BRIEN: One quarter. One quarter.

SERWER: In one quarter. That's up . . .

MILES O'BRIEN: That's three months. Three months.

SERWER: But you know what's interesting, it's only up 6.5 percent. And, Miles, that's because they're passing along the costs . . .

MILES O'BRIEN: We've been down this road.

SERWER: We're going to start where the slippery slope. But it could be -- you know there's two things going on. One, they can -- if they were passing on all those savings, the higher costs to consumers, which they may or may not be doing, they could be making more money by efficiencies. That's true.

Also, what really happens though, they sell a lot of these oil contracts in advance. So they're probably selling at lower prices. So they might make more money later would be a good way to put it. OK.

MILES O'BRIEN: Yes.

SERWER: Shell is still having problems. And so is Total in Nigeria. It's not simple business. Shell profits up only 3 percent. So, as I said, it's not a risk free business, although sort of looks like one right now.

Meanwhile, the price of oil continues to fall. It's down $5 this week. So much emotion in this market. So many traders, so many hedge funds trying to make money here. It's not all about supply demand. We're now down hovering around $70 a barrel. We were at $75 earlier in the week. Now let's talk about ethanol because this is a fuel that is produced from corn. It's added to gasoline. And, obviously, it's a renewable resource that we do not get from the Middle East, et cetera.

MILES O'BRIEN: We've got corn, too.

SERWER: We produce a lot of it here. However, there is a lot more produced overseas and other countries, particularly Brazil. There is a tariff, however, on ethanol coming into this country, 54 cents a gallon. And there is now a move afoot to reduce that tariff. However, there is resistance from lawmakers coming from Midwestern states, corn producing states. So it's battle shaken (ph).

SOLEDAD O'BRIEN: So their constituents are protected by the tariffs?

SERWER: That's correct. And so there's a battle shaping up here. It's a big tariff. And it would make fuel cheaper if we could bring in inexpensive Brazilian ethanol. Bottom line.

SOLEDAD O'BRIEN: Does it look like it's going to happen or do you think that . . .

SERWER: It's 50/50 right now.

SOLEDAD O'BRIEN: All right, Andy, thank you.

SERWER: You're welcome.

MILES O'BRIEN: All right, Andy Serwer with a kernel of business news. Thank you very much.

Now it's time to get a little edgy. U2's number two guy, a guy named The Edge (ph). Is that his real name, The Edge?

SERWER: He was not born with that name.

SOLEDAD O'BRIEN: It's not what his mother named him, but it's his name now.

MILES O'BRIEN: OK. That's (INAUDIBLE).

SERWER: We call him that.

MILES O'BRIEN: We're going out on a limb on that one. He's focused on helping New Orleans get back on its feet. Sean Callebs sat down for a rare interview with him. He joins us now with a preview.

Hello, Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Hey, Miles.

Think about it, Bono, The Edge. It's kind of like Penn and Teller. You hear from one all the time and you don't hear from one. Well, The Edge is talking to CNN at length and explains why he believes it is so important to help musicians in this area. (BEGIN VIDEO CLIP)

THE EDGE, MUSICIAN: I really feel strongly that anyone who earns their living from rock and roll ultimately has a stake in this city and this region and has a debt to this city and this region because this is where it all started.

(END VIDEO CLIP)

CALLEBS: Fascinating guy. And we'll hear more from him in the next hour, Miles.

MILES O'BRIEN: All right, Sean Callebs, thank you very much.

And we'll be back with more in just a moment.

(COMMERCIAL BREAK)

DANA BASH, CNN CORRESPONDENT: I'm Dana Bash on Capitol Hill where questions are swirling about what caused Congressman Patrick Kennedy's car accident and whether he got special treatment. That story coming up.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com