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Bush to Hold Press Conference; New Defense Secretary in Iraq; Cheney to Testify in Perjury Trial; Still No Luck Finding Missing Climbers; Medical Tests on Inmates Could Resume; Thieves Stealing Gift Card Numbers

Aired December 20, 2006 - 08:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: On the ground in Iraq. America's new defense secretary getting an in-person briefing this morning, while President Bush gets ready to brief the press.
JOHN ROBERTS, CNN ANCHOR: Winter warning. A blizzard blast about to slam a good portion of the United States today.

O'BRIEN: And buyer beware, a gift card scam that could make for some very unhappy holidays.

Those stories, much more ahead on this AMERICAN MORNING.

Welcome back, everybody, Wednesday, December 20. I'm Soledad O'Brien.

ROBERTS: And I'm John Roberts, in today for Miles O'Brien, all this week, in fact. Thanks very much for joining us.

O'BRIEN: And thank you for joining us. We appreciate that.

We're getting word about President Bush's news conference this morning. He's planning to speak with reporters at a 10 a.m. Eastern conference.

Elaine Quijano live at the White House for us.

Good morning, Elaine.

ELAINE QUIJANO, CNN CORRESPONDENT: Good morning to you, Soledad.

Well, we had expected some sort of end-of-the-year news conference by President Bush, and now we know it will take place today at 10 a.m., as you said.

We are told by an administration official that the president is going to make remarks, first of all, for about 10 minutes or so, and he's going to talk about the consultative process that is underway, looking at a new strategy for Iraq.

Now we expect the president, according to this official, to discuss what he told the "Washington Post" about a desire to increase the size of both the Army and the Marines, something looking at that for the long term. Now also the president will talk about the economy, we are told, talking about how it is strong, he believes, and growing. He'll talk about his commitment to work in a bipartisan way, with of course, Democrats poised to take control of Congress next month.

He'll also mention that Secretary Gates, of course, his new defense secretary, is in Iraq. But we're only expecting him to talk very broadly about how those deliberations and those consultations, not only with Secretary Gates, but other top officials, are going.

And we are told by this official not to expect any announcements, Soledad, on when the president himself might be ready to make an announcement on a change from his Iraq policy -- Soledad.

O'BRIEN: Elaine Quijano. We're going to carry that, of course, live right here on CNN -- John.

ROBERTS: As we have been reporting this morning, the president's new defense secretary, Robert Gates, is in Iraq right now, arriving there within the past few hours, with the chairman of the joint chiefs of staff and getting an in-person briefing from the top U.S. commander, General John Abizaid.

Senior Pentagon correspondent, Jamie McIntyre, the only network correspondent traveling with Secretary Gates, spoke earlier on AMERICAN MORNING.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT: Good morning, Soledad.

Well, Robert Gates said the first thing he would do when he was sworn in was go to Iraq, meet with U.S. commanders, look them in the eye and ask them about what they really think ought to be done in Iraq.

He didn't waste any time doing that. He was sworn in on Monday, got on a plane on Tuesday, arrived early Wednesday morning here in Iraq. And he's already been in meetings now with General Abizaid, the top commander for the Central Command, and general Casey, the top commander on the ground here in Iraq, to talk to them about possible changes in strategy.

Of course, a lot of speculation about this proposal that's getting serious consideration from the White House to surge tens of thousands of additional troops to Iraq. The idea would be to essentially get the violence under control and give the government of Nuri al-Maliki a chance to try to make some progress on national reconciliation, which commanders believe is the key to solving the problem here.

Gates will meet with Nuri al-Maliki tomorrow. He's going to continue to meet with commanders today.

And of course, part of that speculation is fueled by the fact that President Bush has said, yes, he agrees the size of the U.S. military does need to be increased. And while that is a separate issue from providing troops to Iraq, clearly looking at this in the long view, why does the U.S. need a bigger military? Well, because it's going to have a continued demand for troops, either in Iraq or someplace else.

So Gates is not yet giving us any idea which way he thinks the strategy ought to go. But clearly a lot of consideration being given to this option to send more troops to Iraq, not fewer.

(END VIDEOTAPE)

O'BRIEN: That was Jamie McIntyre reporting for us just a little while ago.

New message from al Qaeda to the Palestinians this morning. Ayman al-Zawahiri, Osama bin Laden's right hand man, telling Palestinians to reject elections, a call for elections, in favor of holy war. This tape was played on Al Jazeera this morning, and just a short time ago, I asked the Palestinian legislator, Hanan Ashrawi, if the message would carry any weight among Palestinians.

(BEGIN VIDEO CLIP)

HANAN ASHRAWI, PALESTINIAN LEGISLATOR: Nobody asked him his opinion, frankly speaking, and nobody wants to listen to his opinion. Palestine has nothing to do with al Qaeda, not in Palestine certainly, and not al-Zawahiri. Palestinians, including Hamas, including the Islamic parties, do not claim any affiliation with or allegiance to al-Zawahiri.

(END VIDEO CLIP)

O'BRIEN: Hamas and Fatah so far honoring a new cease-fire, sort of, this morning. Ten Palestinians, though, have been killed in factional fighting since Saturday, when the Palestinian president, Mahmoud Abbas, called for new elections.

And it's going to be Vice President Dick Cheney for the defense. His former chief of staff on trial. A closer look this morning as lawyers for Scooter Libby say they plan to call the vice president as a witness in Libby's perjury trial.

The trial is related to the leak that exposed the identity of a CIA operative, Valerie Plame.

Joining us this morning from Washington, D.C., chief national correspondent, John King.

Good morning, John.

JOHN KING, CNN CORRESPONDENT: Good morning, Soledad.

This decision guarantees a remarkable legal and political drama when Libby's trial gets under way in the middle of next month.

Now presidents have testified in criminal proceedings before. Gerald Ford and Bill Clinton, to name two. But historians say this will be the first time a sitting vice president is called as a witness.

And remember, this vice president is someone who has vigorously defended the administration's right to keep high-level discussions secret. And yet in this case, sources tell us he is more than willing to try to help his former chief of staff, a man Mr. Cheney praised when I tried just a few months ago to get him to talk about a few months his role in the case.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: I'm not going to comment on the case. It's -- I may be called as a witness. Scooter Libby, obviously, one of the finest men I've ever known. He's entitled to the presumption of innocence. And I have not made any comments on the case up to now, and I won't.

(END VIDEO CLIP)

KING: Some in Washington put it this way: Scooter Libby was to Dick Cheney what Karl Rove is to President Bush. And the defense is hoping that Mr. Cheney supports Libby's main defense theme: the false and inaccurate statements he made to the CIA leak prosecutors were not deliberate lies but instead faulty memory, because he was so overwhelmed at work.

But Cheney as a witness also gives the prosecutors an opportunity to get what would be an unprecedented account, under oath, of how top White House officials responded back in 2003 when Ambassador Joseph Wilson started all this with a "New York Times" essay accusing the president of hyping the case for war.

Those are notes Mr. Cheney scribbled on that article. They're part of the court record now, and they show that he knew Wilson's wife worked at the CIA, though both the president and the vice president insist there was no calculated plan to get revenge by disclosing Valerie Plame Wilson's identity.

But Soledad, high courtroom drama coming up in just a few weeks.

O'BRIEN: Sure to be. John King for us this morning. Thanks, John.

KING: Thank you.

O'BRIEN: John.

ROBERTS: A new poll of troops who served in Iraq and Afghanistan shows some changing opinions on gays in the military.

Seventy-three percent of military personnel questioned said they are comfortable serving with gays and lesbians. That's a big change from a 1993 poll where only 13 percent said they were OK with gay colleagues. The poll also found nearly 1 in 4, 23 percent of service members, knew for sure that someone in their unit was lesbian or gay, including 21 percent in combat units. Among those who did know a gay colleague, few said their presence undermined morale.

Blizzard warnings for a big chunk of America this morning. Heavy snows coming to the plains and parts of the Rocky Mountains. Up to 20 inches expected in Denver by tomorrow.

Chad Myers in the CNN Weather Center, tracking the storms.

Morning, Chad.

(WEATHER REPORT)

ROBERTS: Chad, was that my son who e-mailed you from Boulder, because he's traveling out of there today?

CHAD MYERS, CNN METEOROLOGIST: No, it was -- it was an e-mail I get. His name is Bill. And he also said, "Good thing I stocked up on beer yesterday." So -- but I don't think your son is named Bill.

ROBERTS: No, but I expect he probably stocked up on beer, too. Thanks, Chad.

MYERS: All right.

ROBERTS: In Oregon, the search on Mt. Hood for two missing climbers is already scaled back and might even be halted because of the weather today. The sheriff says photos found in a camera near Kelly James' body show that the men were not well prepared to survive this long in the extremes.

CNN's Chris Lawrence reports from Hood River, Oregon.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): For more than 100 hours they scoured this mountain with Black Hawks, a Chinook and a C-130.

SHERIFF JOE WAMPLER, HOOD RIVER COUNTY, OREGON: Now, the big search probably is over.

LAWRENCE: Dozens of rescue climbers have been ordered to stand down, and the helicopters grounded. Search teams recovered the body of Kelly James, but there's still no sign of his two climbing partners.

ANGELA HALL, MISSING CLIMBER'S SISTER: And we also ask those many thousands of people around the world who have so graciously and passionately offered their prayers to Brian and Nikko to continue to pray for them, now more than ever.

LAWRENCE: Through letters they left behind and evidence in the ice, this story emerges. James, Brian Hall and Nikko Cooke climbed the more challenging north side of Mt. Hood, packing lightly for a quick climb. They summitted the mountain about 11 days ago, but at some point James dislocated his shoulder.

WAMPLER: I think an injury threw that schedule all off and left them in a position of now what are we going to do in desperation?

LAWRENCE: Search teams found evidence they dug a snow cave and huddled together and then, maybe the next morning, Hall and Cooke grabbed ice axes and left the cave to get help.

WAMPLER: Where did they go?

LAWRENCE: It's a question they can't answer. There are places to hide in a crevasse that drops 2,500 feet. Already covered by new snow, the footprints just disappear.

(on camera) That doesn't mean they're giving up. An avalanche team will still investigate. Fixed wing aircraft will still fly by. But even the sheriff is asking the question, how long can anyone last in this environment?

Chris Lawrence, CNN, Hood River, Oregon.

(END VIDEOTAPE)

O'BRIEN: Well, the Discovery crew is ready to head home. Weather, though, might not cooperate. The shuttle is now unhooked from the International Space Station. The forecast, though, looking very iffy for a landing at Kennedy Space Center in Florida. They only have one extra day to spare. Discovery has got to return by Saturday because they're running low on fuel.

Coming up, banning transfats from French fries and other treats. An entire state might be ready now to follow New York City's footsteps.

And the man accused of trying to blackmail Yoko Ono enters a plea in the case and makes some accusations of his own. More on that straight ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Happening in America, jury deliberations resume this morning in the case of an Ohio couple accused of keeping their 11 adopted children in cages. Attorneys for Sharon and Michael Gravelle say there is no evidence that any of the kids were hurt, even though they were kept in cages.

Taco John's is offering to pay the medial bills of its customers infected with E. coli. More than 75 people got sick after eating at the chain's restaurants in Minnesota and Iowa. Tainted lettuce is believed to be the cause. Taco John's is facing two lawsuits over the outbreak.

In Michigan, Jack's Barber Shop won't be open for holiday hair cuts. A delivery van rear-ended a car, sending the car crashing through the store front. Seven people were hurt. Nobody seriously, though. The driver of the van got a ticket.

O'BRIEN: Here in New York City, the man accused of trying to blackmail Yoko Ono for $2 million pleading not guilty. Koral Karsan is denied bail on Tuesday on two counts of attempted grand larceny.

Police say he threatened to release embarrassing photos and recordings of Yoko Ono. Carson's attorney says that Ono, in fact, abused his client; required him, they say, to tuck her into bed every night.

Massachusetts might follow New York City, banning transfats from restaurants. Health officials say transfats clogs arteries while it does, some people say, make things taste a little bit better. Massachusetts assembly passed a bill banning transfats, and critics say they don't need laws telling folks what they can and cannot eat.

New York's Times Square getting ready for New Year's Eve. Crews already hoisted that giant crystal ball in place 380 feet above the street on top of that flag pole right there, 77 feet long -- tall.

Everybody is going to be watching as we all count down 2006 into 2007. And, of course, they've got that big 2007 sign right at the foot of the pole.

Can't make it to Times Square? Then CNN is the place to be. Once again, Anderson Cooper is going to have live coverage of the ball dropping. That starts at 11 p.m. Eastern Time on New Year's Eve.

Just after quarter past the hour. If you're heading out the door, let's get a quick check of the traveler's forecast for you.

Do you watch the ball drop every year, Chad?

MYERS: I do if it falls on a Friday night or a Saturday night. And if it falls any other night, no, I go to sleep, because I have to be awake at 3 a.m. the next morning.

O'BRIEN: OK. I'm following you. I hear you. I get it.

(WEATHER REPORT)

ROBERTS: Chad, thanks very much.

A closer look this morning at some medical studies that were once common place but then banned. During the 1960s and '70s, some prisoners say they were used as guinea pigs. And even though officials long ago stopped the tests, there is talk of bringing them back.

CNN's Jason Carroll has the details.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Oh, man, come on. Not again. No.

JASON CARROLL, CNN CORRESPONDENT (voice-over): These men say they still bear the marks from one of the darkest moments in medical history.

EDWARD ANTHONY, FORMER INMATE: Right now my fingernails are deformed, and these are scars left from the remains of that test.

CARROLL: Edward Anthony and other former inmates from Holmesburg Prison in Philadelphia say they were used as medical test subjects during their incarceration in the 1960s, a time when critics say prison inmates were treated like human guinea pigs in the name of science.

UNIDENTIFIED MALE: I had no idea that these studies would cost me what it's costing me now.

CARROLL: Medical experiments on inmates largely ended in the United States in 1978 after strict regulations were passed to protect prisoners from abuse.

But the government is considering easing those restrictions and allowing testing to begin inside prisons once again.

UNIDENTIFIED MALE: After all this came out...

CARROLL: Leotus Jones (ph) was one of hundreds of inmates at Holmesburg Prison paid to participate in studies, mostly dealing with dermatological tests. He says they were told the medical experiments would not hurt them. The experiments ended at Holmesburg Prison in 1974, after revelations that some doctors have exposed inmates to dangerous hallucinogenics and toxic chemicals, like dioxin.

UNIDENTIFIED MALE: I think there has to be scrutiny of what the evidence is and lessons learned from it so that this kind of thing is not done in the future.

CARROLL: Doctor Bernard Ackerman was in his second year of residency at Holmesburg in 1966 and says he deeply regrets experimenting on prisoners, a population that he feels could easily be taken advantage of again.

UNIDENTIFIED MALE: There are families of each of those people who would advocate using prisoners. What about them? Until they're prepared to use those populations, I think we should not pick on prisoners once again.

CARROLL: The Department of Health and Human Services declined CNN's request for an interview, saying in a statement they're considering easing restrictions because a growing number of prisoners suffer from communicable diseases with inadequate health care.

Pharmaceutical industry analysts also say there simply aren't enough willing human test subjects to go around.

But former inmates like Edward Anthony are highly skeptical.

ANTHONY: I don't believe it's going to work. It's going to fail. It's going to go right back into crookedness and right back into the money. UNIDENTIFIED MALE: That's all they can say.

ANTHONY: That's all they -- and they have no human concern.

CARROLL: The government says it will give careful consideration before making any decisions. To these former inmates from Holmesburg, that's little comfort.

They say they'll suffer for the rest of their lives psychologically and physically and don't want another generation of prisoners going through the same pain.

Jason Carroll, CNN, Philadelphia.

(END VIDEOTAPE)

O'BRIEN: Some of the stories we're following for you this morning: there's a Christmas Grinch out there targeting those popular gift cards. We'll tell you what you need to watch for. That story and much more ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: As we come up on the second anniversary of the tsunami that ravaged Southeast Asia, there's some news that some of the relief money is still sitting in the bank.

Billions of dollars poured in from around the globe to help rebuild Thailand and Indonesia and Sri Lanka, $6.7 billion, according to the BBC. Of that, only $3.4 billion has been spent.

Another big problem is that some of the countries that promised big bucks actually haven't delivered. For example, the study says that the U.S. has only given 38 percent of what they promised. Other countries have followed suit, as well.

ROBERTS: Holiday gift cards are an increasingly popular gift this year. No wrapping needed, no returns. Not surprisingly, criminals are finding a way to get Grinchy with the gift card system.

Dawn Pellas of our Tampa affiliate, WFTS, has more on that.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Here you go, ma'am.

DAWN PELLAS, WFTS CORRESPONDENT (voice-over): One of the most popular gifts is now the target of one of the season's biggest scams.

CORPORAL KEVIN BODIE, HILLSBOROUGH SHERIFF'S DEPARTMENT: They take the gift card off the rack, they get the number off of the gift card and then they place the gift card back on the rack.

PELLAS: Gift cards are attached to cardboard with glue that's easy to remove. The card numbers are on the back, and according to Corporal Kevin Bodie with the Hillsborough County Sheriff's Office, thieves are using those numbers to drain the card's value. The most vulnerable cards are the ones that are out in the open.

BODIE: Once you pull that off, you can't stick it back on, so the bad guys are very being cautious in the way that they bend the cardboard away from the card.

PELLAS: Authorities say that thieves wait a couple days, then call the number on the back of the card to see if it's been purchased.

BODIE: If the card is active, then they go on the Internet and they start spending the money that's on the gift card.

PELLAS: The goods are shipped to post office boxes or vacant homes. Then when the gift card holder goes to use the card, it isn't worth the plastic it's printed on.

(on camera) But there are ways to protect yourself. First, get the card from customer service, not from an aisle or from behind the cash register.

Second, check to make sure the card is securely fastened to the cardboard and not bent in any way. Keep your receipt. And finally, call the number on the card yourself and make sure it's active and all the money is there.

(voice-over) If you think your card has been tampered with, Corporal Bodie says report it right away, because the thieves are likely shopping online, and they may be leaving a paper trail that law enforcement can trace.

BODIE: At that point we should be able to have a tracking mechanism to find out where it was used and where the merchandise was shipped.

(END VIDEOTAPE)

ROBERTS: That's Dawn Pellas of our affiliate, WTFS, with that report -- Soledad.

O'BRIEN: Let's talk business, shall we? Now is a good time to be running something on Wall Street. It is 26 minutes past the hour, and Ali Velshi is "Minding Your Business".

Good morning.

ALI VELSHI, CNN CORRESPONDENT: It's bonus time.

O'BRIEN: Bonus time.

VELSHI: It's bonus time.

O'BRIEN: Ka-ching.

VELSHI: So if you're buying a flat panel TV, you're fine because the prices are going down. If you're buying a fancy sports car in Manhattan, you're in a lot of trouble, because bonuses are coming down. It's been a record year on Wall Street. We heard from Morgan Stanley last week. Now it's Goldman Sachs. Lloyd Blankfein, the new CEO. Now he was only -- became the CEO sort of midyear, because Henry Paulson who was the CEO went over to become the treasury secretary. Blankfein was the president and COO.

Last year his total pay package was $38 million. This year, $54 million. Of that, $600,000 is his salary. And that's typical on Wall Street. That the salaries are -- that's large, but it's...

ROBERTS: Who needs a salary when you get that kind of a bonus?

VELSHI: Yes. All the money's in the stocks and the options. Now, in the case of Goldman Sachs, which is really -- it's the world's largest investment bank, and it's very much the gold standard in what they do.

Remember that this has been a year where we've got record stock market numbers. We've had a record number of mergers, and that's where the money comes from for these folks.

O'BRIEN: That $54 million, is that the whole enchilada?

VELSHI: That's the whole package. That's his salary, his cash bonus, which was 27 million bucks. Cash money.

O'BRIEN: OK. Twenty-seven million and a half.

VELSHI: And then -- and then he's got options that he can exercise. Some of them are immediate.

O'BRIEN: That's a lot of money.

VELSHI: But you know, Goldman's profits have been up 70 percent, to $9.4 billion with a "B". And the stock's up 59 percent.

Now where we complain is when we see these CEOs getting paid a lot of money, the stock is not up. The company's not running well. At least these guys are making money for somebody.

ROBERTS: Some people would argue well deserved this year, based on the performance.

VELSHI: Yes. And they know how to spend it.

ROBERTS: I'm sure they do. Ali, thanks very much.

Some of the stories we're following right now, just how bad is it to swear on television? Two networks find out today at an FCC hearing.

And Mount St. Helen's showing signs of life again. Stay with us on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: Secretary Gates on the ground in Iraq getting an in- person briefing this morning, while President Bush prepares to brief the press back home.

ROBERTS: And blizzard warnings. Some states could see two, maybe even three feet of snow. The whiteout forecast ahead on this AMERICAN MORNING.

O'BRIEN: Good morning. Welcome back everybody. It's Wednesday, December 20th. I'm Soledad O'Brien.

ROBERTS: And I'm John Roberts in today for Miles O'Brien. Thanks for joining us. Not much happening initially today but suddenly becoming a very busy day.

O'BRIEN: Absolutely.

ROBERTS: Happening this morning, President Bush for the first time, agreed with his top commander that the U.S. is quote, not winning in Iraq, but, nor does he say it's losing either. And he is asking Defense Secretary Robert Gates to drop a plan for a bigger military. In an interview with the "Washington Post", the president says he agrees with generals who say forces are stretched too thin.

A new warning in a new videotape from Ayman al-Zawahiri -- Osama bin Laden's number two man. He's weighing in on the conflict in Gaza, saying holy war is the only path to freedom, not elections. Palestinian President Mahmoud Abbas has called for new elections, prompting clashes with Hamas. The Zawahiri tape has not been authenticated, though it does look like him.

Mt. Hood rescue workers scaling back search efforts for those two missing climbers today. An avalanche team and small planes will be out this morning trying to beat another storm that's moving in. The sheriff says if the men are alive, it's not likely that they'll survive that incoming storm.

FOX and CBS attend a hearing with the FCC today in New York. The television networks maintain that the new tightened indecency rules are unconstitutional. The case involves two instances where the FCC found that unscripted swearing during two awards programs were found to be, quote, indecent or profane.

And the space shuttle Discovery now unhooked from the international space station and preparing to head home. It's supposed to land on Friday in Florida, but weather could change that plan -- Soledad.

O'BRIEN: Well Defense Secretary Roberts Gates is on the ground in Iraq this morning getting a first-hand briefing. President Bush is directing him to draw up some plans to expand the military. It will be a huge challenge for recruiters who are already struggling to fill out the ranks.

CNN's Dan Lothian joins us for more on this. Good morning.

DAN LOTHIAN, CNN CORRESPONDENT: Well, good morning Soledad. It really has been a tough challenge, in part because of the war in Iraq. One recruiter told me he confronts that issue head on and tells potential recruits the truth about where they could end up and often has to answer some difficult questions. Now comes more pressure to find the next soldier.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): President Bush is saying out loud what some generals and others have been arguing for months, America needs a bigger military.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES (voice-over): I'm inclined to believe that we do need to increase our troops -- the Army and the Marines.

LOTHIAN: Hitting the mark will fall on the shoulders of recruiters like Sergeant Mark Wood.

MARK WOOD, SGT., U.S. ARMY: Hey, Matt. My name is Sergeant Wood. I'm with the Army.

LOTHIAN: He tracks down college student Matt Ozwood in a suburb south of Boston.

WOOD: See if you'd like to sit down and learn about it.

MATT OZWOOD, STUDENT: I can't right now. I'm packing for a trip.

LOTHIAN: The 18-year-old says he respects the Army but he doesn't appear ready to make a move. Sergeant Wood promises to stay in touch.

WOOD: Matt, I'm going to give you a call soon.

LOTHIAN: He spreads his message on the street and on the phone.

WOOD: United States Army Sergeant Wood. How you doing?

LOTHIAN: But his pitch isn't always welcomed.

WOOD: It's challenging because you talk to so many people, and you do get told no a lot.

LOTHIAN: Recruiters also face another challenge, convincing parents, who are reminded on almost a daily basis about the grim reality of war.

WOOD: Obviously parents are protective of their child, their children, and there is a sense of hesitation.

LOTHIAN: 23-year-old Argenis Mendez just signed up for the Army, undeterred by the prospect of going to war.

ARGENIS MENDEZ, NEW ARMY RECRUIT: We don't hope for it, but that's the way it goes. So, backing down -- if I would have been afraid of the war, I wouldn't have been signing up for it. LOTHIAN: To help convince young men and women to enlist, Wood and other Army recruiters offer incentives, bonuses of up to $40,000 and more cash for college.

(END VIDEOTAPE)

LOTHIAN: So who is the ideal candidate? Sergeant Wood told me he targets anyone who looks healthy, physically fit, and is over the age of 18, but as we know, the military has not backed away from signing up people who, well Soledad we should say, haven't seen 18 in a long time.

O'BRIEN: Like you and me.

LOTHIAN: That's right.

O'BRIEN: Haven't seen 18 in a long time. There are taking older people too. Dan Lothian for us -- thanks Dan -- John.

ROBERTS: Thanks, Soledad. President Bush is going to take questions from reporters in less than two hours, 10:00 Eastern time. We'll carry it live here live on CNN, don't worry about that. He's sure to be asked about new positions that he's taking in an interview with the "Washington Post" published today.

Chief national correspondent John King joins us now from Washington. John, it's an interesting construct the president is using in describing the situation in Iraq -- agreeing now with his chairman of the joint chiefs, Peter Pace, saying we're not winning in Iraq, but we're not losing either. Big difference from what he said back on October the 25th.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Back in October the president was saying we are winning absolutely. But, John, the date you mentioned is the key point -- that was before the midterm elections. and the president obviously saw his party suffer and his own credibility suffer in those midterm elections.

You and I have been through a number of the year-end news conferences. Essentially what the president is trying to do today is wipe the slate clean. He knows the Democrats will take power in Congress just two weeks from now. He knows he's going to be working in a very different political environment here in Washington.

And he also knows that he has lost even more support and more credibility with the American people when it comes to the issue of his commander in chief status and the war in Iraq. So, the president trying to end the year, essentially by trying to re-juggle the political environment a bit. Hoping next year is a little more favorable to him.

ROBERTS: Yes, let's take a quick look at some numbers to back up that assertion. His approval rating still hovering 36 percent, about where it has been for the last couple of months. But take a look at these numbers on Iraq. December 15th to 17th, CNN poll from Opinion Research Corporation. Look at the way these numbers are dropping. 40 percent in September; 34 for October; November 31, no 33 in November, now 31 percent. John, the bottom is dropping out of support here, and the president will take these holidays to try to come up with some new plan for Iraq that could try to bring some sense of security, some sense of new direction there. Is his legacy really riding on what he decides in the next couple of weeks?

KING: Absolutely, without a doubt. This is a president who many will say now is a lame duck because you're after the midterm elections, his last midterm elections. The Democrats are taking charge in Congress. The '08 campaign is already well under way.

The president has some monumental decisions to make over the next week or so about will he surge troop levels in Iraq or will he back away from that, which would be a very politically dicey decision, should he decide to surge troop levels in the short term.

Obviously Secretary Gates is in Iraq this morning, the administration changing its tone, the president himself saying we're not winning, but we're not losing. John, it's hard to underestimate the challenge -- overestimate, excuse me, the challenge for the president here.

Many are questioning his leadership capabilities. He needs to come up with a new plan on Iraq. And what's different this time in any other past adjustment, is when he comes up with this new plan, Democrats have the power now in Congress to call the new defense secretary, to call other top officials up, including the generals, and say we want to you explain this. The Republicans didn't do that, the Democrats will.

ROBERTS: So why is he undertaking these steps or at least this study to increase the size of the military? Is it because Rumsfeld is gone now that he can do that?

KING: That's an issue that the administration has said no to calls from both Republicans and Democrats in Congress for the past several years saying we need more people in the Army, we need a bigger Marine Corps. The administration has said no.

And, yes, you are exactly right, Secretary Rumsfeld liked the leaner, meaner approach. He believed that U.S. troops could be retasked from other places around the world into combat deployments for the war on terror for other future deployments perhaps.

Secretary Rumsfeld had a transformational view of the military. And while those discussions will continue, the president is now, as soon as Rumsfeld was out the door, conceding the point that many in Congress said he should have accepted two or three years ago. You need more boots on the ground so you don't have the remarkable stress and strain that we see, not only in active duty forces, but on the Guard and Reserves as well.

ROBERTS: It's odd to think though that the secretary of defense could say no to something that the president might want. John, thanks very much. You can watch the president's news conference 10:00 Eastern time here on CNN, coming from the Eisenhower Executive Office Building, part of the White House complex -- Soledad.

O'BRIEN: Wiping out transfats in Mass. The commonwealth in fact of Massachusetts looking to join New York City on the transfat bandwagon. The very latest in our health news coming up

And what's the word? The annual list of the most popular words typed into Google. We'll take a look straight ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Happening in America today, Denver is getting the salt trucks and the snowplows ready. There is a blizzard warning out for the entire metro area. Some places could get as much as two feet of snow today.

In Washington State, Mount St. Helens letting off some steam. Scientists say the giant plume visible on Tuesday was caused by the mix of boiling water in the volcano and freezing air outside that. It wasn't a new eruption though, just a steam cloud.

In Washington, D.C., Senator Tim Johnson still in critical condition, in intensive care nearly a week after emergency brain surgery. His son Brendan says his father's recovery is, quote, exceeding expectations. And Johnson's wife Barbara says she plans a bedside celebration for the senator's 60th birthday on December 28th.

O'BRIEN: In Chicago, Mayor Richard Daley is roasting a proposal requiring restaurants to post detailed nutritional information. The plan would affect restaurant chains that make at least $10 million a year in national sales. Daley says individuals, not the city council should decide what people eat.

O'BRIEN: In Idelton (ph), California, owners remodeling the old Hotel Del Rio found quite a surprise behind some old wood paneling -- I love stories like this. A hand painted mural, ten feet by 60 feet running along a wall at the hotel bar.

The hotel opened back in 1949. The owner suspected the mural was painted some time after that. They're still trying to go figure out just who the artist was and why it was covered up in the first place.

ROBERTS: It's always better if it's a Da Vinci that's underneath.

O'BRIEN: Yes, that would be nice.

Rap star Eminem getting divorced again from the same woman he remarried less than a year ago. Follow along, it gets a little complicated. Eminem, whose real name is Marshall Mathers and Kim Mathers got married in January of this year. Three months later it was over. They filed for divorce in April. The first time around back in 1999, the marriage lasted about two years. They've got a ten- year-old daughter. This time they told the judge this divorce is final.

ROBERTS: As final as something like that can be.

How well do you know your way around the world wide web? Google's annual top ten list of the hottest search words and phrases for 2006 is out. Here's the top five: Bebo is number one, it's an online social network that's popular in Britain. Myspace, number two; the World Cup came in third; Metacafe and Radioblog were fourth and fifth. And if you don't know what some of those are, may I suggest Googling.

O'BRIEN: I was surprised Bebo first.

ROBERTS: Yes.

O'BRIEN: (INAUDIBLE)

ROBERTS: I think Tara Conner is going to be number one, next year.

O'BRIEN: She's moved up the list, that's for sure.

ROBERTS: Very quickly.

O'BRIEN: Here's an interesting memo you wouldn't necessarily expect for people who are in charge of Legal Aid program for the poor. It's called Legal Service Corporation. They're telling their top officials now, no more $70 lunches and no more $14 death by chocolate desserts. It's over. Expensive hotels, $400 plus limo rides, no, no, no.

Legal Services is financed with tax dollars, but its given the special status as an independent nonprofit corporation, so they weren't quite required to follow government expense guidelines. I guess people thought it was in bad taste to be doing it.

(WEATHER REPORT)

O'BRIEN: CNN NEWSROOM is just a couple minutes away. Tony Harris is at the CNN Center. he's got a look at what's ahead this morning. Good morning Tony.

TONY HARRIS, CNN ANCHOR: Soledad, good morning. We have got these stories on the NEWSROOM rundown for you this morning. Baghdad visit, the new defense secretary lands in Iraq looking for advice from his war commanders.

President Bush considering a long-term buildup for the Army and the Marines. He talks with reporters 10:00 Eastern. We will carry it for you live here in the NEWSROOM.

And the Montgomery Bus boycott. 50 years after it ended, the dean of the civil rights movement, we love this man, the Reverend Joseph Lowry, on its impact. He stops by the NEWSROOM.

Fredricka Whitfield in this morning for Heidi Collins. We get started at the top of the hour right here on CNN -- Soledad.

O'BRIEN; All right. Thank you Tony -- John.

ROBERTS: A teary Tara keeps her tiara. Miss USA gets a second chance, but her wild ways will cost her. We're talking about the controversy with someone who knows the pageant biz better than anyone when AMERICAN MORNING returns.

(COMMERCIAL BREAK)

O'BRIEN: A teary Tara, the beauty queen many people thought would lose her crown, gets to keep it as long as she enters rehab. Miss USA Tara Conner did not get the axe from the pageant co-owner Donald Trump for her recent trouble with underage drinking and all the other drama we've been telling you about. Instead she actually got a rare second chance. Listen.

(BEGIN VIDEO CLIP)

TARA CONNER, MISS USA: I'm willing to do whatever it takes, not only given a chance to have time to better myself, but to better me as a Miss USA, and I plan on walking out of this, the best Miss USA that you've ever seen.

(END VIDEO CLIP)

O'BRIEN: Paula Shugart is the president of the Miss Universe organization. She joins us. Nice to see you.

Boy, that was a riveting press conference to watch.

PAULA SHUGART, PRESIDENT MISS UNIVERSE ORGANIZATION: Wasn't it?

O'BRIEN: Not just the Donald, though, but also Tara. But I've got to tell you, at the same time, as much as she's a mess, there was a lot of questions that went unanswered. You met with her before 10:00, when many people thought was the meeting where she was going to get the axe from the Donald. What did she say that made you think, let me give her a second chance?

SHUGART: Well, I think really, I mean obviously, we would have loved to have kept this out of the media, and it certainly played out. So, there were so many allegations, and a lot of which were unfounded.

And I think from Mr. Trump, he wanted to give her a fair chance and wanted to hear what she had to say. He hadn't had a chance to talk with her to separate fact from fiction. One of the things we heard is that she had been missing events, which she actually hadn't. The only event she had missed, she had bronchitis. So, but, once people started getting into these stories, it really was getting out of control.

O'BRIEN: Some people would say why not fire her? Maybe not for missing events, but there's a lot of other stuff outside of the missing events. And that the job itself is a role model job. I mean, when you're Miss USA, that's the job, to be a role model. And here's a woman who admitted to underage drinking. Here's a young woman who seems very lovely, but the allegations of taking a drug test and how that turned out. The allegations of making out with the Miss Teen USA, et cetera.

SHUGART: Which ...

O'BRIEN: Why not say, you know what, even drinking under age, when she was only 20 years old, that's enough to yank her.

SHUGART: Absolutely. Drinking under age is very serious, and certainly with Mr. Trump, you know that's a very serious issue. The fact he has a lot of compassion, and I think he wanted to hear her side of the story, and I think -- I know it's not just the holidays. It's a time he really believes in second chances. I know people who watch "The Apprentice" had a hard time imagining that.

O'BRIEN: People were shocked, really.

SHUGART: And that's why I think everybody thought -- you're fired. Being a role model is key. But nobody is perfect. As he said yesterday, everybody deserves a second chance. I think he actually said it to a reporter. If she can get through this and we can give her the help she needs and not turn our back on her, she can be a better role model, I think, down the road.

O'BRIEN: Listen to what she said though when she was asked about the drug thing and this is in the middle of the press conference.

(BEGIN VIDEO CLIP)

CONNER: Yes, I went out, I had a couple of nights where, yes, I did drink. And that was stupid. It was under age. It's strictly prohibited. That's why coming into this I thought there's no way that I'm going to be allowed a second chance for this. But anything, like with the drug issue and things of that nature, I don't have a comment on anything like that.

(END VIDEO CLIP)

O'BRIEN: Like with the drug issue, I don't have a comment. If that were my daughter, if that were your daughter, that's not the answer you want to hear to a question. You want to hear, why, never, I don't know what you're talking about and I'm offended. So, some people would say well, that's a nonanswer to kind of a straight- forward question.

SHUGART: Well, it's a nonanswer and I think you'll get a non- answer. None of us are really going to be talking about the drug issue. I can't talk about the drug issue and I'm not going to. Obviously there are privacy issues here.

Tara, absolutely, we want to get her -- I think she definitely just needs to get the help to look and see exactly who she is. She definitely got thrust into a spotlight, and I do think there's a lot to the fact, as you can imagine, being from never having left Kentucky and being from this town of 2,300 and thrown into this.

Right or wrong, I think as an organization, we do need to give her the help she needs and Mr. Trump wanted to give her the second chance. I didn't know how it was going to go. I feel confident we're going to be able to work with her.

O'BRIEN: She's got four months left, we'll see how she does.

SHUGART: Two months left.

O'BRIEN: Oh, two months left. All right. Paula Shugart, nice to see you. Thanks for coming in to talk with us. We appreciate it -- John.

ROBERTS: Here's a quick look at what "CNN NEWSROOM" is working on for the top of the hour.

HARRIS: See these stories in the NEWSROOM.

New Defense Secretary Robert Gates in Iraq. A first-hand assessment of the war and what comes next.

Painkillers, everything from aspirin to ibuprofen could get stronger warning labels.

And Chicago's Christmas caper. Who is stealing Baby Jesus from nativity scenes. Dozens of figures end up in one backyard.

You're in the NEWSROOM, 9:00 Eastern, 6:00 Pacific.

(COMMERCIAL BREAK)

O'BRIEN: As we wrap up here on AMERICAN MORNING, we're waiting for President Bush to hold his news conference. We're expecting that at 10:00 a.m. Eastern time. We're obviously going to carry that live for you right here on CNN.

ROBERTS: You know, I had a statistic here that I lost. I think it's his 29th, former solo press conference of his presidency.

O'BRIEN: And probably the last of the year.

ROBES: Yes, absolutely the last of the year before he takes off. Good to be with you again today.

O'BRIEN: All right. Thank you very much. We'll see you tomorrow. And let's get right to "CNN NEWSROOM" with Tony Harris and Fredricka Whitfield. It begins right now.

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