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Senate Panel Holds Confirmation Hearing For Defense Secretary Nominee; Do Iraqis Want U.S. Troops to Leave?; Robert Gates Says All Options On The Table For Iraq; Audrey Hepburn's Famous Dress Sold at Auction
Aired December 05, 2006 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DON LEMON, CNN ANCHOR: Hello, everyone. I'm Don Lemon, live at the CNN World Headquarters in Atlanta.
KYRA PHILLIPS, CNN ANCHOR: And I'm Kyra Phillips.
Ahead this hour: So, is the U.S. winning or losing? Nominee Robert Gates aims to clarify what he thinks is going on in Iraq -- a live report from the Pentagon.
LEMON: Plus, we're live in Oregon, as the search continues for James Kim. His wife and daughters turned up safe. Now family and friends cling to hope he will, too.
PHILLIPS: Santa wasn't the only one who was airborne at the South Carolina Christmas parade -- a float captain that police say should have looked for a designated driver.
You're live in the CNN NEWSROOM.
We're not winning in Iraq, but we're not losing either -- the words of defense secretary nominee Robert Gates. He is now trying to clarify some comments he made on his ongoing Senate confirmation hearing.
Let's bring in senior Pentagon correspondent Jamie McIntyre.
Hey, Jamie.
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, good afternoon, Kyra.
Robert Gates has been getting plaudits from members of the Senate Armed Services Committee for his candor. But one of those candid statements apparently caused some concern. Robert Gates said, in response to questioning from two different senators, that the United States is not winning in Iraq, but, as you noted, he also said they're not necessarily losing either.
Those comments created a storm of controversy. The White House began to get hammered about them. And, by the time Robert Gates came back for his afternoon session, which is going on now, he wanted to make a clarification, something he said that wasn't the result of any pressure from the White House, but simply after he saw how his comments were being played in the news. (BEGIN VIDEO CLIP)
ROBERT GATES, DEFENSE SECRETARY NOMINEE: Only because I'm concerned that the troops in the field might have misunderstood something I said. While I was having lunch, and eating my sandwich, I was watching the news.
And I certainly stand by my statement this morning that I agreed with General Pace that we are not winning, but we are not losing. And -- but I want to make clear that that pertains to the situation in Iraq as a whole. Our military forces win the battles that they fight. Our soldiers have done an incredible job in Iraq. And I'm not aware of a single battle that they have lost. And I didn't want my comments to be interpreted as suggesting that they weren't -- that they weren't being successful in their endeavors.
(END VIDEO CLIP)
MCINTYRE: Gates appears to be headed for a quick confirmation, both a vote in the Senate committee today, and perhaps by the full Senate later this week.
He's doing that basically by telling the senators what they want to hear, and also avoid taking any issue -- specific positions on the options available for Iraq, but insisting that he will be an independent voice. He said he didn't take the job as defense secretary, at considerable financial sacrifice, to be a bump on the log -- his words -- in Washington.
And he said -- asked why he thought President Bush would listen to him, he said: Because he offered me the job -- Kyra.
(LAUGHTER)
PHILLIPS: And he didn't want to touch the issue of a timetable at this point either, right?
MCINTYRE: Timetables, he said, no. Benchmarks, he said he thought that might be appropriate. Could there be more troops sent into Iraq? He said perhaps. He wouldn't rule that out. Could they have a phased withdrawal? He said that might also be an option. He did say, the first thing he wanted to do, if confirmed, was go to Iraq and talk firsthand with commanders.
And he suggested that, maybe, they might be a little more candid with him, as defense secretary, than they were when he met with them as a member of the bipartisan, independent Iraq Study Group.
PHILLIPS: Jamie McIntyre live from the Pentagon -- thanks, Jamie.
LEMON: From clarification to confirmation, that is the next step for Robert Gates. His Senate hearing continues as we speak.
Let's go straight to Capitol Hill and CNN's Dana Bash -- Dana.
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Don.
Well, as Jamie was just talking about, this confirmation hearing is certainly not contentious at all. Nobody expected it to be, but, also, nobody expected it to be, frankly, the kind of love-fest that it has turned into.
Gates has really been making quite an impression, especially among some of the biggest skeptics when it comes to Iraq, of course, the most divisive issue on the political table right now.
Senator Carl Levin, the incoming chairman of the Senate Armed Services Committee, told reporters during the break this afternoon that Gates is a breath of honest, candid realism about the situation in Iraq.
And, you know, what Senators are listening for, first of all, is, of course, the issue of tactics, what Jamie was talking about, when it comes to Iraq. But it's also the question of approach, how he will approach his job, when it comes to talking inside the administration, talking, as Senator Levin says, truth to power to the president.
But, most importantly, from the perspective of these senators, Republicans and Democrats alike, it's how he will approach Congress, because there is a lot of animosity, anger, toward the current secretary of defense, Donald Rumsfeld, because they -- many people up here simply have felt shut out, when it comes to having an input on Iraq policy and approach.
And that, as Jamie was just mentioning earlier, is something that senators heard from Robert Gates today, very specifically, saying that he is not going to come here and simply be a wallflower when he is talking to the president or Congress.
(BEGIN VIDEO CLIP)
GATES: Senator, I am not giving up the president -- the presidency of Texas A&M, the job that I have probably enjoyed more than I have ever had, making considerable personal financial sacrifice, and, frankly, going through this process, to come back to Washington to be a bump on a log, and not to say exactly what I think, and to speak candidly and, frankly, boldly, to people, both -- at both ends of Pennsylvania Avenue about what I believe and what I think needs to be done.
(END VIDEO CLIP)
BASH: Now -- now, Robert Gates was asked some specific questions, many specific questions, about tactics when it comes to Iraq, about some perhaps mistakes that the administration may have made.
When it comes to one big issue for one senator who has eyes on the White House for 2008, Senator John McCain, the question of troops, whether or not enough troops were sent in from the get-go -- that has been something that Senator McCain talks over and over again, that more troops needed to be sent, and should be sent right now -- he had a friend, if you will, in Robert Gates, who said that he agrees, that more troops could have made a difference at the early stages of the mission in Iraq -- Don.
LEMON: Let's talk about something else, presidential candidates, 2008. How much of this is political theater?
(LAUGHTER)
BASH: Well, you know what? I was talking to somebody, a veteran of the Senate, last night about what is going on here today, and what will go on here from here on out, until 2008.
And it's like every one of these forums is kind of going to be like a straw poll for 2008. About one in 10 senators, Don, are making waves, or at least thinking seriously, about running for president. On this panel, in the Senate, three senators, Senator Hillary Clinton of New York, of course, Senator Evan Bayh, the Democrat from Indiana, they have not formally said that they're going to run, but are certainly getting very close -- and Senator John McCain, the Republican, of course, is another -- they are all on this panel.
They are very -- it's very clear that that is a subplot in this hearing today, that they want to make their mark on the issue that, of course, was huge in the 2006 election, and will not go away when it comes to 2008. They understand that they have to make impressions, and they have to sort of pave the way for where their platform and their agenda is going to be when it comes to Iraq.
I mentioned John McCain talking about the need for more troops. Hillary Clinton has been a little bit shaky, when it comes to the Democrat base, because she supported the war. And now she is trying to sort of find her way, in terms of where she is going to go where -- when it comes to anti-war advocates, if you will, in the Democratic Party, and where she is going to go, and really make her mark when it comes to Iraq policy.
She was very tough on the Bush administration in this hearing just now, and making it clear that she does not think that the Bush administration, the president and the vice president, have listened to any kind of advice from people who don't agree with them.
LEMON: Yes, that is the back-story. That is what happening behind the scenes.
Thank you very much for that, Dana Bash.
BASH: Thank you.
PHILLIPS: Would Iraq be better off without the U.S. presence? A lot of Iraqis seem to think so.
Let's get to our senior international correspondent, Nic Robertson. He is in Baghdad.
Hey, Nic.
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hey, Kyra.
Well, what is shaping people's opinions here, events like today, 65 people killed, 65 wounded in Baghdad. The police have turned up some 60 bodies throughout the city today, they say strewn throughout the city, hands tied, many of them shot at close range, showing signs of torture -- some of the worst killings today, 15 people on a bus killed by a car bomb, nine wounded. Gunmen opened up on fire after that particular attack, a triple bombing at a gas station, 25 wounded, 15 killed there.
A police station, a training ground attack, six killed, 10 dead, in that particular car bombing -- mortars fired on a Sunni market, three people killed -- also news today that three U.S. servicemen lost their lives yesterday, two in combat with insurgents, one in a vehicle accident. But all these deaths and injuries here are really shaping people's opinions in quite a surprising way -- a lot of Iraqis now saying they would like to see U.S. troops leave to make them feel safer.
(BEGIN VIDEOTAPE)
ROBERTSON (voice-over): This weekend, a triple bombing in the heart of Baghdad, 51 dead, and more than 90 injured, horrific, and attacks like this more common than ever before.
A new survey conducted by Iraqi pollsters shows, the daily violence is escalating Iraqi demands that U.S. troops leave. More than half the 2,000 Iraqis surveyed said they want all U.S. troops out now. And almost half the remainder want a withdrawal to begin immediately.
UNIDENTIFIED MALE (through translator): The percentage of who oppose the presence of U.S. forces is increasing. And you know that is not good for the U.S. military.
ROBERTSON: Members of the independent survey team, trained by the U.S. State Department, fear insurgent or militia attack, and agreed to talk only if we hide their identity. They have been conducting surveys here for three years. Even they are surprised so many want U.S. troops out.
(on camera): That the situation will improve if the U.S. troops withdraw immediately?
UNIDENTIFIED MALE: Yes, immediately.
ROBERTSON (voice-over): But that's not all. In this poll of Sunnis and Shias, in both mixed and divided communities, 19 out of every 20 people say security was better under Saddam Hussein.
Nine in 10 people say they feel danger whenever they see American soldiers. And two-thirds say they will feel safer when U.S. troops have left the country.
The big-picture response, according to the pollsters: U.S. troops are part of the problem, not the solution, and they want a change in U.S. policy.
UNIDENTIFIED MALE (through translator): Most of the people in our survey hope for a new policy in Iraq.
ROBERTSON: Although this survey was commissioned by Iraq's government, the results have also been sent to the State Department, and reveal what many U.S. officials have long believed: Fixing the economy could help stop the violence.
The best way to disarm insurgents, the Iraqis said, was to offer them jobs. Perhaps less surprising, given the worsening security, Iraqis are beginning to question their own democratic choices. Half say they wouldn't vote for the same party again. And two of every three say they have no confidence in the current government. Survey officials say the poll has a margin of error of just over 3 percentage points.
(END VIDEOTAPE)
ROBERTSON: And one of the big messages that pollsters are saying they are hearing from the people here is that the Iraqis are saying, in these midterm elections, Democrats got a much stronger voice. They did well. And the people here are saying: Let's see the Democrats use that stronger political influence in the United States now to help change the policy here -- Kyra.
PHILLIPS: Nic Robertson, live from Baghdad, thanks.
Want to take you live now to some pictures of the USS Intrepid. After nearly a quarter-century at dock, well, and a month or so stuck in the mud, the Intrepid is making its move now. This is the first time we have really seen it pretty much in full speed...
(LAUGHTER)
PHILLIPS: ... for its capability at this point -- 36,000 tons of steel finally moving down the Hudson River, fighter jets on board, pretty excited crew on board. It's about a -- I guess it's been a month after -- or a month since that failed attempt to move the aircraft carrier from its home of 24 years on a dock on Manhattan's West Side.
Now this warship-turned-museum has finally been yanked from the muddy sludge that it was trapped in. Its propellers actually got stuck there. And it was pulled in to the currents of the Hudson River for a trip to Bayonne, New Jersey, now, where it will be restored over the next two years.
LEMON: Ah, it looks like a beautiful day in New York City -- not so much around much of the country.
Let's check in with our Jacqui Jeras, charting all the highs and lows right from the CNN Weather Center.
JACQUI JERAS, CNN METEOROLOGIST: Hey, guys. Yes, beautiful blue skies, just a couple of clouds out there -- gorgeous weather all across the Northeast, a little on the cool side. You can't complain too much, though. It's 36 degrees in New York City and 34 in Boston. But we have got a big blast of cold air that's going to be spreading across about the eastern two-thirds of the country.
You're getting a little taste of it already across parts of the Upper Midwest, 12 above in Duluth. We have got 10 in Thunder Bay. Twenty-seven degrees is your temperature in Minneapolis -- in the teens here for Green Bay, down towards Milwaukee.
Arctic air, piled up there in Canada right now, it's going to be spilling on down. We're starting with a clipper-type system. And that is what is bringing in the scattered snow showers at this hour. Could pick up a good quick maybe two to three inches around Duluth. Minneapolis, it's pulling out for you -- but, along I-94, down towards Milwaukee, picking up a nice dusting of snow here.
But it's really the cold air that is going to be the big impact with this system. Here you can see the arctic blast starting today across the Upper Midwest. This is going to be advancing down to the south and the east, and actually affecting everybody, all the way down through the Gulf Coast.
It will be at its coldest, we think, on Wednesday night, into Thursday morning, across the Midwest and into the Plain states -- and, keep in mind, all those people still across east central parts of Missouri, around Saint Louis, extending up towards Peoria, Illinois, still hundreds of thousands without power here.
And look at the wind-chill, between 20 below -- or 20 above to 40 below -- the coldest, of course, right up there in Minnesota and into the Great Lakes -- that cold air then spilling into parts of the East, will be feeling more like 20, rather than the 20 below, but, still, definitely the coldest air we have seen so far this season.
LEMON: Jacqui...
JERAS: Back to you guys.
LEMON: ... 40 below? Whew.
PHILLIPS: Brrr.
LEMON: Oh, my goodness.
JERAS: Too cold to be cute, as my mom always said.
(LAUGHTER)
PHILLIPS: Yes, really.
JERAS: Bundle up.
(LAUGHTER) PHILLIPS: It's like being in Green Bay, Wisconsin, or maybe Antarctica.
(LAUGHTER)
JERAS: There you go.
PHILLIPS: Thanks, Jacqui.
Also ahead: three miles -- or three miracles down. A San Francisco family prays for just one more. A mother and her two tiny daughters are rescued, after nine days in the Oregon wilderness. But what has happened to the father and husband, James Kim? We will update you.
LEMON: An honest mistake or child abuse? A Colorado mother says she filled her baby's bottle with vodka by accident. The infant is out of the hospital, but her mother has sure got some explaining to do -- details ahead in the CNN NEWSROOM.
(COMMERCIAL BREAK)
LEMON: Temperatures are chilly, and the terrain is rough, but search crews in Oregon are doggedly trying to track a missing husband and father. James Kim hasn't been seen since Saturday, when he left his stranded family, and tried to walk out, through the snow, to get help. His wife and two young daughters were rescued yesterday, after nine days in the snowbound car. They are in good condition, and recovering at a hospital.
For the latest on the search, here is KATU reporter Derek Sciba.
(BEGIN VIDEOTAPE)
UNDERSHERIFF BRIAN ANDERSON, JOSEPHINE COUNTY, OREGON, POLICE: This is a Bear Camp Road, right here in red.
DEREK SCIBA, KATU REPORTER (voice-over): Undersheriff Brian Anderson shows the area where the three members of the Kim family were found. Today, 100 searchers are focusing on the Big Windy Creek drainage to find the dad.
ANDERSON: It is very rugged, remote area. The teams are having some difficulty, due to the terrain and the conditions up there.
SCIBA: In the foggy morning air, two men look at a map. It's above freezing here, but it likely dipped into the 20s last night where authorities believe James Kim has walked. Undersheriff Anderson says he set out with two lighters, and may have started a fire.
ANDERSON: You know, they're pretty resourceful. They survived nine days out there.
SCIBA: Three privately chartered helicopters will assist one chopper from the sheriff's office again today.
Kim's footprints were first spotted by air, and then tracked last night out of the snow and down into the drainage.
ANDERSON: They were able to find it pretty good in the snow. Then, when they got into the rocks and the dirt, they were following scuff marks.
SCIBA: Eleven searchers working overnight camped, instead of searched. The conditions were too treacherous -- now another day of searching for a man the undersheriff believes is still alive.
ANDERSON: So, we're continuing to work it today. If we do not find him today, we will continue to search tonight, and we will do it again tomorrow.
(END VIDEOTAPE)
SCIBA: Well, last night, a National Guard helicopter with a heat-seeking camera picked up a couple of spots that were hopeful. Today, crews on the ground are checking those spots out. It could be, though, that those spots are just animals -- Don.
LEMON: All right, Derek Sciba, we certainly hope for the best. Thanks for your report.
PHILLIPS: A baby is out of a Colorado hospital, after being admitted with a blood alcohol level of .364. That's four times the legal limit for an adult driver.
It was a formula for disaster, as McKenzie Martin reports from affiliate KKTV.
(BEGIN VIDEOTAPE)
SARAH SMITH, MOTHER: It was a mistake. It was an honest mistake. I had no idea that there was alcohol in the water bottle.
MCKENZIE MARTIN, KKTV REPORTER (voice-over): Sarah Smith says she never meant to harm her 2-month-old daughter, Kristina.
SMITH: I love my daughter to death. I would never do anything to harm her in any kind of way.
MARTIN: But, early Sunday morning, Kristina showed up at the hospital with a blood alcohol level of .364. Sarah says that, Saturday night, she and her boyfriend, Ryan, went to get a hotel room. While Ryan was inside, Kristina got fussy. And, so, Sarah made her a bottle, like she always does.
SMITH: Water, formula. You know, I didn't think to smell it. I never do.
MARTIN: She says she grabbed Ryan's water bottle, which was actually full of vodka, and mixed it with formula. Kristina drank it all.
SMITH: I didn't know it was in there.
RYAN DELAROCHE, FATHER: It was a mistake.
MARTIN: Twenty minutes later, they realized something was terribly wrong.
SMITH: She wouldn't respond. She was just moving her arms and her legs, you know. And her eyes were, like, droopy. I don't know. Just -- she just wasn't right.
MARTIN: Kristina had alcohol poisoning. Her parents say they are still in disbelief over what happened.
SMITH: I don't know what I would have done if I would have lost her.
DELAROCHE: Just like blaming myself. This is all my fault.
MARTIN: Baby Kristina is now in foster care, but her parents say they hope not for long.
DELAROCHE: We're going to do whatever we need to, to get her back. She's a wonderful mother, wonderful. I wouldn't have anybody else be the mother of my kids.
(END VIDEOTAPE)
PHILLIPS: That was McKenzie Martin from CNN affiliate KKTV reporting.
LEMON: Well, it might be time now for a show called "When Parade Floats Go Wild."
David Allen Rodgers was in court in Anderson, South Carolina, today, facing more than 40 charges. Sunday, the float he was driving in the town's Christmas parade started passing other floats at up to 60 miles an hour.
Innocent children from the Stepping Out dance studio had to hold on tight. Someone on the float had to call 911. And police say the 42-year-old Rodgers had an open container of alcohol in his truck. He is charged with assault, kidnapping, and DUI, among other things.
Here is what he told the judge: "Poor judgment on my part, Your Honor."
PHILLIPS: No dagger, but plenty of cloak in that Russian spy story. The Kremlin claims -- or clams up, rather, as Scotland Yard comes to town to investigate the death of Alexander Litvinenko.
Espionage junkies, stay tuned. The twists keep coming. We will keep bringing them to you.
(COMMERCIAL BREAK)
PHILLIPS: Helping out just because -- from teens to senior citizens, more Americans are giving freely of their time. In fact, a new study shows that volunteerism is at a 30-year high, with more than one in four of adults lending their communities a hand. The biggest jump was among teenagers ages 16 to 19. More than 28 percent volunteer.
LEMON: Well, the nation's housing market has been in a serious slump lately. But one industry executive says he sees a break in the clouds. It may be some good news.
Susan Lisovicz is at the New York Stock Exchange with the details for us.
Hey, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hey, Don.
Well, you know, we have had evidence now for more than a year that the housing market is slowing down, although Toll Brothers, I guess, in some ways, was an improvement of what we saw. Its quarterly earnings fell more than 40 percent from a year ago. Still, those numbers came in slightly better than what Wall Street was expecting -- the luxury homebuilder's earnings also expected to fall pretty sharply next year as well.
Still, the CEO of Toll Brothers says that he expects things to possibly improve, because he sees a floor in some key markets, including suburban Virginia, which is the first area where Toll Brothers first saw a slowdown -- Don.
LEMON: And a big reason -- and I hope I have this right, Susan -- that we have seen a slowdown is because mortgage rates have gone up a little bit, right, and that -- is that why we a seeing an increase in delinquencies on mortgages?
LISOVICZ: There are a lot of reasons why, Don. That is one of the reasons. And a lot of people were predicting this, because so many people stretched their finances to buy a house or buy a second house.
Late payments on sub-prime mortgages are surging. In fact, according to "The Wall Street Journal," this year is on track to be one of the worst ever for sub-prime loans -- 80,000 borrowers reportedly behind on payments -- a lot of Americans stretching themselves to buy a home or refinance a mortgage. Until the past year or so, delinquency rates were low by historical standards, thanks to low interest rates and rising home prices.
That made it easy for borrowers to refinance or sell their homes, if they ran into trouble. But, as the housing market peaked and loans volume leveled off, some lenders responded by relaxing their lending standards. And you have seen it taking effect now -- housing stocks, by the way, such as Toll Brothers, D.R. Horton, Hovnanian, and Lennar, solidly higher today.
And so is the market overall -- positive news on growth in the services sector, which is the largest part of the economy, and a tame read on labor costs boosting sentiment today. So, we're seeing some follow-through, after yesterday's big rally. Let's take a look at the Big Board -- the Dow Jones industrials right now up 38 points, or about a third-of-a-percent. The NASDAQ, meanwhile, is up just three points.
And that's the latest from Wall Street. I will be back in about 30 minutes with a wrap-up of the trading day -- more CNN NEWSROOM in just a moment.
(COMMERCIAL BREAK)
LEMON: This just into the CNN NEWSROOM. You're looking at pictures from Torrance, California. This is an Exxon Oil refinery. Wildfire there and you can see it's happening right near some tankers there on a train track, but it's burning and we've seen them loading some horses into trailers trying to get them out of the area.
Firefighters of course on the scene battling those fires. This is coming to us from KTTV in Los Angeles. Apparently this is just south of Los Angeles and as you know, those winds in California, we've been following over the last couple of days, winds in California, in Moorpark specifically, winds just fueling all those flames. There are the horses I was telling you about there. We will stay on top of the story to see what is going on. This coming to us from Torrance, California near an Exxon Oil refinery. A wildfire -- we will let you know if it warrants it.
PHILLIPS: Free from the muck and on the move. The USS Intrepid heads down the Hudson River to an overhaul mission. Let's get to our Heidi Collins who hitched a ride. Hey, Heidi.
HEIDI COLLINS, CNN ANCHOR: Hi there, Kyra. That's right, we are -- you're catching this right at the very end of a historic journey for the Intrepid. As you know, she's not been on the water for 24 years and we are just now getting ready to pull into Bayone where the ship will be wet-docked and worked on for quite sometime before March 1st, moving over to the dry dock where they will do more renovations.
As you know, $60 million project in total. And boy, it was a slow start this morning for take two of this mission, if you will. About ten minutes or so, those tugs, five tugs in all, were pulling with all their might to try and get this old gray lady off of Pier 86 and finally, as we stood on the flight deck, there was movement, very slow at first, and then she just took off and she was traveling faster than I think they expected and we ended up just sitting off of the Bayone wet dock for about three hours waiting for what they call slack to decrease or lower tide to come in so the ship could be controlled better and brought right into this dock that we are obviously just now moving into.
So, as the sun sets and we stand on the flight deck, we're about to have a happy ending to the story that started off not so very good, Kyra
PHILLIPS: Well tell our viewers why they'd want to come to come see the museum. Tell them a little bit about the USS Intrepid, its history, and what they will see there on deck. COLLINS: It's going to be pretty phenomenal. As I said, it's a $60 million renovation and onboard, we're standing right in front of all kinds of aircraft from back in the World War II, Vietnam. And this is a ship that was involved in pretty much every major conflict in the history of war here in America, defending our country, I should say.
It's also survived five kamikaze attacks and I've had the opportunity to talk with some former crew members that were here standing on this flight deck when it a couple of those different kamikazes came crashing into this aircraft carrier. Their feelings and their emotions are pretty strong and pretty high today.
There's already been a hundred million visitors that have come to the USS Intrepid Air, Sea, and Space Museum over the time that its been open. They expect many, many more once they completely renovate the entire thing and the displays are expected to be amazing and the aircraft I'm looking at right now is an SR-71 Blackbird. There is a couple of helicopters.
I mean, you can see now, as we sort of pan around a little bit, and take a look for you, this is what is sitting up here now. There has been a little bit of damage over the time that she's been sitting at Pier 86. About $500,000 is going to go directly to restoration of some of these aircraft, old fighter jets, if you will, from the wind damage they have sustained of sitting up on this flight deck for all those years but it will be pretty phenomenal for folks to see.
PHILLIPS: All right. I can't wait to see it for the first time. Heidi Collins, thanks so much.
LEMON: Changes at the Pentagon could mean big changes in Iraq. Robert Gates says all options are on the table and those options may grow tomorrow when Iraq Study Group releases its report. President Bush is already getting a preview.
Our Suzanne Malveaux is at the White House --Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Don, the head of that commission, the Iraq Study Group, James Baker was here at the White House earlier today. He had lunch with the president we're told. The president got a sense of the direction of the report but not the details.
Also was explained the process, how they came about their consensus. We are told really that this was general trend lines. Now, whether or not this is something that the president welcomed, we asked Tony Snow, White House press secretary. One reporter asking was this the cushion before the blow? And Snow said, look, if you're looking for some sort of battle royale, you're going to be deeply disappointed, in his words saying this is not the Baker/Hamilton get out of Iraq report or commission.
Clearly, the White House is trying to downplay of the significance of this. It is going to be early tomorrow and the president is going to be briefed by all ten members of the Iraq Study Group, given those 100 pages, they are going to go over it for an hour or so, and then the president will come forward before the cameras, thank the commission for doing their work, but Don, do not expect any kind of commitments, any kind of revelations or dropping bombs tomorrow.
(BEGIN VIDEO CLIP)
TONY SNOW, WHITE HOUSE PRESS SECRETARY: I don't know that there is some sort of magic change in direction. I think what you have is the president's soliciting the best views on how to move forward within the parameters of working with the Iraqis.
(END VIDEO CLIP)
MALVEAUX: And Don, a very delicate balancing act the White House officials are engaged in right now. On the one hand they want to give a sense they are taking this commission, the report very seriously but on the other hand, as one official put it, they don't want to seem like their outsourcing foreign policy to an independent group -- Don.
LEMON: Suzanne, it's certainly as much anticipated that Iraq Study Group, that report. They're presenting that to the president tomorrow but are they also reaching out to other international players on this?
MALVEAUX: Well, absolutely. What you're going to see is British Prime Minister Tony Blair is going to be here at the White House on Thursday. He and the president will go over this report together. But tomorrow, the Iraq Study Group, will actually -- they're setting up a teleconference with the Iraqi Prime Minister Nuri al-Maliki to talk about their findings and the recommendations. The one thing that this group has done is try to be taken seriously so they have gone beyond President Bush reaching out to Blair and many others as part of their research -- Don.
LEMON: Suzanne Malveaux at the White House. And again, happy birthday to you.
MALVEAUX: Thanks, Don.
LEMON: James Baker was picked as co-chairman of the Iraq Study Group for his vast political and international experience. He also has a unique bond with the first President Bush. Here is a CNN fact check on that relationship.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (voice-over): James Baker's ties with the Bush family go back a long way. Many regard him as the fixer. The man the family turns to when in trouble. He is quick to dismiss that notion as nonsense but his record speaks for itself.
George W. Bush dispatched Baker to Florida in 2000 to handle the crisis over the hanging chad vote count. But the elder statesman's tightest bonds are with George H.W. Bush. He served as President Bush's secretary of state. With the president's reelection bid sinking, Baker resigned to take on the job of managing the campaign. It was a job he knew well, because he managed Bush's first presidential run in 1980.
From there, he went on to serve as President Reagan's chief of staff and treasury secretary. In 1988, Baker was at the helm of Bush's victorious White House campaign. Baker also played a key role in building the American European and Arab coalition in the 1991 Gulf War.
It's an open Washington secret that Baker isn't a big fan of Donald Rumsfeld's performance. Baker has written of the costly mistakes of the Iraq war, citing an insufficient number of troops and dismantling of the Iraqi army. But he says the source of those mishaps are found in the defense department, not the White House.
Baker is a graduate of Princeton University and earned a law degree from the University of Texas. He's also a veteran. Serving as a lieutenant in the Marine Corps.
(END VIDEO CLIP)
LEMON: And we have this reminder for you. The blue ribbon Iraq Study Group issues its recommendations on Iraq tomorrow and CNN, of course, plans full coverage.
PHILLIPS: A bump year is expected in the sale of U.S. weapons. That's the word from the Pentagon which is forecasting in the $20 billion range for fiscal 2007. That's about on par to last year's record total. The boost is attributed to regional security concerns tied to Iran and North Korea. Those expected to place big orders including Iraq, Afghanistan, Saudi Arabia, the United Arab Emirates, Japan and South Korea.
LEMON: Putting a cloak over the cloak and dagger death of a former Russian spy. Russian investigators aren't fully cooperating with British detectives who have arrived in Moscow to examine the poisoning of Alexander Litvinenko. Russia's top prosecutors says possible suspects will not be extradited. He also says Russian investigators will do all the questioning. The Brits -- well they can watch.
Litvinenko died last month in London. Polonium-210, a rare radioactive substance was found in his body. Before he died, Litvinenko blamed Russian President Vladimir Putin. Russian officials have strongly denied the accusations.
Here's what Litvinenko's father said in an interview with CNN.
(BEGIN VIDEO CLIP)
WALTER LITVINENKO, ALEXANDER LITVINENKO'S FATHER (translated): This black strike on him, they did it on my birthday. All my kids called me on that day, but Sasha didn't. And I immediately felt that there was trouble. I called him. Sasha was in the hospital. He told me with a cheerful voice, dad, don't worry, I'm fine. I didn't ask him why he didn't call me. I figured if the guy was in the hospital, it was something serious. But my soul felt there was trouble.
UNIDENTIFIED MALE: Did your son believe he was safe here in London?
LITVINENKO: I think he put his guard down, especially after he got his citizenship. He was sure of the might of this country, that he was protected by Her Majesty the Queen, and that they wouldn't touch him. But they killed him.
(END VIDEO CLIP)
PHILLIPS: Well, the military has done it again. In the South Pacific nation of Fiji, for the fourth time in 19 years, the military today seized control of the islands in a coup. Fiji's armed forces chief assumed some powers of the president and dismissed the elected prime minister. The main causes apparently were ethnic divisions and allegations of government corruption.
The U.S. has suspended more than $2.5 million in a assistance to Fiji. Britain, New Zealand and other countries and international groups with ties to Fiji have denounced the coup.
LEMON: A tough year for Katrina victims, a good one for the insurance industry.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: If they're making a record profits right now, I hope they sleep well at night.
(END VIDEO CLIP)
LEMON: How one couple's golden years have become a time to start over.
That's ahead in the CNN NEWSROOM.
(COMMERCIAL BREAK)
PHILLIPS: Well, it's a simple formula. Higher premiums plus zero hurricane damage equals record insurance profits. But for thousands of homeowners, it doesn't add up.
CNN's Sean Callebs reports on one couple's plight in Mississippi.
(BEGIN VIDEOTAPE)
SEAN CALLEBS, CNN CORRESPONDENT: Donald and Sue Williams' golden years were washed away in an instant by Hurricane Katrina. They lost their Mississippi home, their savings, and with it, the will to live.
SUSAN WILLIAMS, HOMEOWNER: He told me when I go to bed I pray I don't wake up. He said I've got nothing to live for anymore. DONALD WILLIAMS, HOMEOWNER: I was hurting then.
CALLEBS: Their insurance company had even more crushing news.
D. WILLIAMS: We've been with them for 20 years.
S. WILLIAMS: They didn't even give us wind damage for our roof.
D. WILLIAMS: And I had faith in them.
CALLEBS: The insurance company ruled all the damage was flood- related. They didn't have flood insurance. They say their agent originally told them they didn't need it. State Farm says because of privacy issues it doesn't comment on individual claims. The Williams say they found out they were getting nothing about the same time the insurance industry was predicting record profits for 2006.
S. WILLIAMS: If they're making record profits right now, I hope they sleep well at night.
ROBERT HARTWIG, INSURANCE INFORMATION INSTITUTE: I feel proud to be associated with an industry that has paid over the past two years over $80 billion dollars. And we have a very high degree of customer satisfaction.
CALLEBS: Industry officials say profits could reach $60 billion this year. One reason, despite dire predictions, there were no hurricanes this year. Even so, people along the Gulf getting socked by higher premiums should not expect their bills to go down. Here's how the industry explains it.
HARTWIG: Louisiana cannot receive subsidies from homeowners, for example, in the state of Ohio. In the same way, people in Louisiana should not be expected to pay for outsized winter storm losses in the state of Minnesota.
CALLEBS: And he says 95 percent of Katrina's 1.2 million claims have been settled. That still leaves some 60,000 policy holders, like the Williams' in the lurch.
S. WILLIAMS: How do you start over at 76 years old and 62?
CALLEBS: Their home had been paid off. Now the retirees on a fixed-income have built a new home with a low-interest government loan. It also got them a brand new 30-year mortgage, which Donald Williams says should be paid off when he's 106.
Sean Callebs, CNN, D'Iberville, Mississippi.
(END VIDEOTAPE)
LEMON: We're going to take you live to Washington to what was the hearings -- the confirmation hearings for Robert Gates. The public portion of those hearings, over now and they're going to meet in a closed-door session without the media, without the public there. Always planned, nothing unusual. And when there's live coverage, which will continue tomorrow, we will bring it to you, of course, live here right here on CNN.
It's usually one of the last places you'd want to pay attention to aroma, but these brave souls at a San Francisco bus stop took a deep whiff when asked.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: What do you smell?
UNIDENTIFIED FEMALE: Chocolate chip.
UNIDENTIFIED FEMALE: Fresh baked cookies that smell delicious.
UNIDENTIFIED FEMALE: I think I'll go get some milk.
(END VIDEO CLIP)
LEMON: At a bus stop?
Stick around. We're whipping up an extra batch of stories right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
PHILLIPS: An E. coli threat linked to Taco Bell restaurants in the New York metro area may be over. New Jersey's top health official says the outbreak was serious but it appears to have passed. The company is preparing to reopen nine restaurants. Nearly 40 people in North Jersey and Long Island became sick after eating the restaurant's fast food. Health officials still don't know which ingredient was contaminated. Earlier this year, E. coli infections linked to spinach killed at least three people.
LEMON: Ah, the smell of baking cookies. Kind of reminds you of your mom's kitchen or if you're in San Francisco, maybe the bus shelter? Ross Palumbo of affiliate KGO explains.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: We've gotten complaints about smells at the bus stop. This is the first time we hear of a supposedly pleasant smell.
ROSS PALUMBO, KGO CORRESPONDENT: At bus shelters across San Francisco, there is definitely something different in the air.
(on camera): What do you smell?
UNIDENTIFIED FEMALE: Chocolate chip.
UNIDENTIFIED FEMALE: Fresh baked cookies that smell delicious.
UNIDENTIFIED FEMALE: I think I'll go get some milk.
PALUMBO (voice-over): Advertisers thirsting for business have gone to great lengths to create that reaction, all of it scientifically engineered and stirred up with these, plastic strips to stick to and cook up a cookie smell at five bus stops.
All of it to simply get riders to stop and answer the advertising question, got milk?
UNIDENTIFIED MALE: That's the moment where we have that good connect.
PALUMBO: Developers say the connection comes from commonly used food ingredients with no unusual chemicals, only national properties, pungent enough to rise above bus fumes, pigeon droppings, even trash.
UNIDENTIFIED MALE: The same oils that are in most of products that we use every day.
UNIDENTIFIED MALE: I don't think anyone should be alarmed.
PALUMBO: But despite assurances from the health department, some are alarmed that people will be sensitive to the smell, even alarmed that the homeless will be affected.
UNIDENTIFIED FEMALE: Oh, I know, people are saying that people that can't afford cookies will feel bad.
PALUMBO: But homeless advocates disagree.
UNIDENTIFIED MALE: No problems with the ads.
PALUMBO: And even parents, who will likely pay the price for how this smell seduces their kids, don't seem concerned.
UNIDENTIFIED FEMALE: It's OK, it's cookies and milk, it's not like it's beer.
PALUMBO (on camera): This isn't the first time the public has gotten a whiff of this sort of technique. It was tried once before in London and, of course, magazines have been using scent to sell products for decades. This is the first time however this specific technique has been tried in America. San Franciscans will be giving it the sniff test for at least 30 days. In San Francisco, I'm Ross Palumbo, ABC 7 News.
(END VIDEOTAPE)
LEMON: I could use some cookies and milk right now.
PHILLIPS: Actually, I can't drink milk, but I'd love to eat the dough. That's what I would want. Let's go buy the dough. Closing bell and a wrap of the action on Wall Street straight ahead.
(COMMERCIAL BREAK)
PHILLIPS: Well if you're looking for the perfect black dress to wear to Breakfast at Tiffany's, perhaps you'll have to keep looking. An anonymous buyer plunked down $800,000 today for the dress that Audrey Hepburn wore in the opening scene of "Breakfast at Tiffany's." The dress was sold at Christie's London auction house after a tense bidding session. The new owner called her bid in by phone. Money from the auction goes to help underprivileged children in India.
LEMON: Oh, that's good, $800,000. A very good cause. Time now to check in with CNN's Wolf Blitzer.
WOLF BLITZER, CNN ANCHOR: It's a lovely dress, Kyra, you would have looked lovely in that dress, too.
PHILLIPS: Are you still going to shop at Tiffany's for me this holiday?
BLITZER: No.
PHILLIPS: I love you, too, Wolf.
BLITZER: Thank you. Coming up at the top of the hour, the United States is not winning the war in Iraq. So says the man who wants to be the new secretary of defense. Why does it sound like he is at odds with the president? We're going to take a closer look at this story.
Also is Fidel Castro near death? He's a no-show at his birthday party, fueling speculation about his health. We're going to look at U.S. plans for Cuba, the day Castro dies.
Plus, Big Brother is watching what you eat in New York City. Now bans transfats in restaurants, will this change the way the rest of the country eats?
Also, a former president's tears. You might have seen this already but we're going to look at the relationship between President Bush and his father. All that, guys, coming up right here in "THE SITUATION ROOM."
PHILLIPS: Thanks, Wolf. Well, the closing bell is about to ring on Wall Street.
LEMON: Susan Lisovicz standing by with a final look at the trading day. Susan, you'd look great in that dress, too.
(MARKET REPORT)
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