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Arnold Schwarzenegger Swears in for Second Term; Tornadoes Threaten Southeast; A Battle Plan For The Hefty Vet; Rising Foreclosures Threat To Entire Housing Market

Aired January 05, 2007 - 15:00   ET

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


KYRA PHILLIPS, CNN ANCHOR: Hello again, everyone. I'm Kyra Phillips at the CNN World Headquarters in Atlanta.
DON LEMON, CNN ANCHOR: And I'm Don Lemon.

Who put the Southeast on the spin cycle? Tornado watches and warnings popping up all over the place -- our Severe Weather Center has got the latest.

PHILLIPS: Technology, tenacity, and a boatload of Chilean fisherman -- a rescued sailor can thank all of the above, as well as his lucky stars.

You're live in the CNN NEWSROOM.

Stormy day across the South -- several counties in the Atlanta area, rather, under tornado warnings this morning. Strong winds brought down trees and power lines just south of the city. Some people think it was a tornado -- no word of anyone seriously injured.

Atlanta's Hartsfield-Jackson Airport, the world's busiest, was on alert for just a short time -- delays, but no damage.

LEMON: States of emergency in four Louisiana parishes, after tornadoes that killed at least two people and injured 15 others. Trees are uprooted, roofs torn off, mobile homes knocked off their foundations.

(BEGIN VIDEO CLIP)

BRETT RAMSEY, TORNADO VICTIM: Me and my little cousin, when we heard the thunderstorm, we ran under the table with my sister and her friend, and her mama. And we just heard a big old thunderstorm. So, we went out. They had all kind of trees everywhere, and ambulances and fire trucks.

STEVEN BRUNO, TORNADO VICTIM: I was in my mobile home when -- when the tornado hit. And it flipped a couple times. And we was just lucky to get out -- get out alive.

(END VIDEO CLIP)

LEMON: Very serious weather going on, and a very busy day for our Rob Marciano, who is check it all out in the Severe Weather Center -- Rob. ROB MARCIANO, CNN METEOROLOGIST: Hi, Don.

We have a new tornado warning that was just issued by the National Weather Service across western parts -- or upstate parts of South Carolina, and another tornado watch box out that has now been issued for parts of northern Florida and also southeastern Georgia -- so, a couple of areas of concern, certainly.

And, any time you see that watch, it tells you that the conditions are favorable to see tornadoes pop -- none reported, or no warnings, as of yet, of this line that's heading in towards Tallahassee and will be heading towards Daytona Beach overt the next couple of hours, but it's heading into very warm, very moist air.

Here is the spot where we have a tornado warning issued for northern Greenville County. You see it there until 3:30 this afternoon. And this whole watch we will expire at 9:00. So, we have got a long way to go before we're -- the severe weather is over and done with.

A little farther up the road, we have a fair amount of rain from Erie, PA, to Pittsburgh, across the Allegheny in through New York and up through Boston as well. And, with this rainfall, we have a tremendous amount of warm air. And that is really one of the reasons that we have such an active weather pattern happening across the South -- this warm air that's in place really triggering these thunderstorms, and making them strong, and, in some cases, damaging.

Sixty-three, the current temperature in Boston, that's a record -- very close to a record in New York. And they probably will bust a record tomorrow afternoon -- 60 with rain and with cloud cover today, to give you an idea of just how moist -- or how warm that air mass is.

Tomorrow, again, could see 70 in New York, could see 70 in D.C. And those -- that -- that would break out some records. Behind this is some cooler weather, but it's not tremendously cold. I mean, 41 degrees for a high temperature in Chicago, that's still above average for this time of year.

This week and next week would typically be the coldest part of the winter. And, certainly, the East Coast has not seen that. It's been an El Nino type of year, which creates a fairly strong southern branch of the jet, and keeps most of this cold air locked up in Canada.

A piece of that, Don, is coming down across the Pacific Northwest for some valley rain and mountain snow, but that's fairly typical -- very atypical across the East Coast. I mean, if it hits 70 tomorrow in New York, it's certainly going to be a day where -- we will be talking about for quite some time.

LEMON: Yes, certainly. And a lot of people will be wearing shorts and hitting Central Park for all the fun.

MARCIANO: Probably.

LEMON: All right, Rob...

(CROSSTALK)

LEMON: ... thank you so much.

PHILLIPS: Live pictures out of Sacramento right now -- these are the -- what is it? What's -- I'm look -- trying to read the writing.

These are the schoolchildren from...

(LAUGHTER)

PHILLIPS: I'm trying to read your writing.

Yes, schoolchildren from California, they are actually doing the Pledge of Allegiance. They're getting ready to perform, because Arnold Schwarzenegger is going to be celebrating his second term in office.

This is a special inaugural celebration taking place right now, entering into his second term. We are told that his wife, Maria Shriver, will be speaking.

Let's go ahead and listen in for a minute.

(DRUM ROLL)

PHILLIPS: This is the headline, Don. Donna Summer and Paul Anka...

(LAUGHTER)

PHILLIPS: ... they are going to be headlining the evening event, which is expected to host about 2,000 people.

LEMON: I know. He was a no-show last night for the first part of the inaugural. And you know why. Because he broke his leg in a skiing accident about a month ago.

But, tonight, we're told, he's going to show up. And -- and, then his wife, Maria, will help him along in that. But she actually showed up in his place last night.

So, we're looking at live shot from there. And that is the former -- the former mayor of Los Angeles, I believe, who is speaking now.

PHILLIPS: And he came in and took over as governor in a time where things were really heated, not only in the Los Angeles Police Department, but also with immigration issues.

And he really came forward and got highly involved, talking about immigration and illegal immigration, and talking about his background, and when he came to the United States. And that became a big part of his platform.

But let's go ahead and listen in...

LEMON: That's Willie Brown...

PHILLIPS: ... to Willie Brown...

LEMON: ... speaking...

PHILLIPS: ... as he is speaking right now, getting ready and waiting for Maria Shriver to step up as one of the keynote speakers at this inaugural event.

LEMON: Yes.

(LAUGHTER)

(APPLAUSE)

WILLIE BROWN (D), FORMER MAYOR OF SAN FRANCISCO: I'm talking about the first lady of California, Maria Shriver.

(APPLAUSE)

MARIA SHRIVER, CALIFORNIA FIRST LADY: Thank you. Sit down.

(LAUGHTER)

SHRIVER: Thank you. Thank you. Sit down. Sit down, please, please.

I can go home now. Foxy and sexy, I waited a long time for that...

(LAUGHTER)

SHRIVER: ... Willie Brown.

How about Willie Brown?

Thank you so much.

(APPLAUSE)

SHRIVER: I won't talk about our stories when I interviewed him as a journalist in San Francisco. That will stay between us. But that's why he called me foxy-sexy.

(LAUGHTER)

SHRIVER: Anyway, I want to thank you so much for being here.

Governor Wilson, Mrs. Wilson, Governor Davis, Sharon Davis, thank you both, all of you, for being here, and for your support and your friendship over the years.

And everybody else up here on this stage, I want to thank each and every one of you, really, from the bottom of the hearts of all of our family, for taking time to be here, when you could have been someplace else, and for showing you up in support of Arnold. So, I want to thank you all so much.

(APPLAUSE)

SHRIVER: And, of course, to the people of California. Those of you who are here this morning, those of you who are outside watching this on a Jumbotron those of you who may be watching it on the Web, those of you who may be watching on the television, I want to thank all of you for joining us here today on this really extraordinary day.

And I say extraordinary, I use that word, because, today, I think really is extraordinary, because people of different parties, different political persuasions have all come together to celebrate one man, whose vision is for one California, a California that unites us all, that emphasizes our common ground and our common goals and our common dreams of becoming one community.

On this extraordinary morning, I wanted to share with all of you a poem that I read while reading Alice Walker's new book. And it spoke to me on so many different levels. It's a Hopi prayer. And it's rooted, really, in the -- the feelings of peace and unity and reconciliation.

It goes by many different names over the ages, but the name that speaks to me the most and the one that I like, and it's called, "We Are the Ones We Have Been Waiting For."

And it goes like this.

"We have been telling people that this is the 11th hour. Now we must go back and tell people that this is the hour. Here are the things that must be considered. Where are you living? What are you doing? What are your relationships? Are you in right relation? Where is your water? Know your garden. It is time to speak your truth. Create your community. Be good to one another. And do not look outside yourself for the leader.

"This could be a good time. There is a river flowing now very fast. It is so great and swift that there will be those who will be afraid. They will try to hold on to the shore. They will feel like they're being torn apart, and they will suffer greatly. Know the river has its destination.

"The elders say we must let go of the shore, push off towards the middle of the river, keep our eyes open, and our heads above the water. See who is in there with you and celebrate.

"At this time in history, we are to take nothing personally, least of all ourselves, for, the moment we do, our spiritual growth and our spiritual journey comes to a halt.

"The time of the lonely wolf is over. Gather yourselves. Banish the word struggle from your attitude and your vocabulary. All that you do now must be done in a sacred manner and in celebration, because we are the ones we have been waiting for." Thank you.

And, ladies and gentlemen, I now bring you the one you have been waiting for, my husband, your governor of the great state of California, Arnold Schwarzenegger.

(APPLAUSE)

("FANFARE FOR THE COMMON MAN" PLAYS)

UNIDENTIFIED MALE: And now to administer the oath of office, please welcome the Most Honorable Ronald M. George, chief justice of the California State Supreme Court.

(APPLAUSE)

CHIEF JUSTICE RONALD M. GEORGE, CALIFORNIA SUPREME COURT: Governor, it gives me great pleasure to administer the oath of office to you, upon your assuming your second term of office, and to thank you for all that you have done to improve the administration of justice for all Californians.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: Thank you.

GEORGE: I will ask you now to raise your right hand and repeat the oath of office after me.

I, Arnold Schwarzenegger...

SCHWARZENEGGER: I, Arnold Schwarzenegger...

GEORGE: ... do solemnly swear...

SCHWARZENEGGER: ... do solemnly swear...

GEORGE: ... that I will support and defend...

SCHWARZENEGGER: ... that I will support and defend...

GEORGE: ... the Constitution of the United States...

SCHWARZENEGGER: ... the Constitution of the United States...

GEORGE: ... and the Constitution of the state of California...

SCHWARZENEGGER: ... and the Constitution of the state of California...

GEORGE: ... against all enemies...

SCHWARZENEGGER: ... against all enemies...

GEORGE: ... foreign and domestic...

SCHWARZENEGGER: ... foreign and domestic...

GEORGE: ... that I will bear true faith and allegiance...

SCHWARZENEGGER: ... that I will bear true faith and allegiance...

GEORGE: ... to the Constitution of the United States...

SCHWARZENEGGER: ... to the Constitution of the United States...

GEORGE: ... and the Constitution of the state of California...

SCHWARZENEGGER: ... and the Constitution of the state of California...

GEORGE: ... that I take this obligation freely...

SCHWARZENEGGER: ... that I take this obligation freely...

GEORGE: ... without any mental reservation...

SCHWARZENEGGER: ... without any mental reservation...

GEORGE: ... or purpose of evasion...

SCHWARZENEGGER: ... or purpose of evasion...

GEORGE: ... and that I will well and faithfully discharge...

SCHWARZENEGGER: ... and I will well and faithfully discharge...

GEORGE: ... the duties upon which I am about to enter.

SCHWARZENEGGER: ... the duties upon which I am about to enter..

GEORGE: Congratulations, Governor.

SCHWARZENEGGER: Thank you very much.

(APPLAUSE)

SCHWARZENEGGER: Thank you.

GEORGE: Thank you.

(APPLAUSE)

SCHWARZENEGGER: Thank you.

(APPLAUSE)

SCHWARZENEGGER: Yes.

(APPLAUSE)

(MUSIC)

LEMON: My gosh. Amazing, huh? (LAUGHTER)

PHILLIPS: That's what you call a highly produced...

(LAUGHTER)

PHILLIPS: ... inaugural celebration, "Fanfare For a Common Man." He hobbles out on the crutches, standing -- now we're get the hallelujah.

(LAUGHTER)

PHILLIPS: Let it just -- I mean, you -- say no more. Let it lead right to him.

(LAUGHTER)

SCHWARZENEGGER: Thank you very much. Thank you.

Wow.

(LAUGHTER)

SCHWARZENEGGER: This feels good.

(LAUGHTER)

SCHWARZENEGGER: Thank you. Thank you very much. Thank you.

First of all, I want to say thank you very much to Willie Brown for his great that he is doing, entertaining all of you here.

(APPLAUSE)

SCHWARZENEGGER: Give him a big hand.

(APPLAUSE)

SCHWARZENEGGER: Willie, fantastic. Thank you.

(APPLAUSE)

SCHWARZENEGGER: And, also, I want to thank my wife, Maria Shriver, for doing such a spectacular job, and organizing all of this here.

(APPLAUSE)

SCHWARZENEGGER: Thank you very much.

(APPLAUSE)

SCHWARZENEGGER: And I will never forget my mother-in-law.

(LAUGHTER)

SCHWARZENEGGER: Never forget the mother-in-law.

So, Eunice, thank you so much for all your love and for your support.

(APPLAUSE)

SCHWARZENEGGER: Thank you for coming out here all the way from Washington. Thank you.

(APPLAUSE)

SCHWARZENEGGER: Now, there is a whole bunch of people that you should thank. But I will get right into my speech. Otherwise, I will get into trouble.

(LAUGHTER)

SCHWARZENEGGER: First of all, let me just say, thank you very much, Mr. Chief Justice, my fellow Californians.

Three years ago, you elected me as your governor. These three years have been the most fulfilling of my life. Every day has been an adventure. As a matter of fact, my escapes have been more hair- raising than anything I have ever done in the movies.

(LAUGHTER)

SCHWARZENEGGER: And, throughout it all, it has been an absolute joy to serve you, the people of California.

(APPLAUSE)

SCHWARZENEGGER: Thank you.

And I'm grateful, beyond words, for your continued faith and hope. Now, faith and hope are two qualities that are in short supply in the world right now. When I was a boy in history class in Austria, I learned about the Fertile Crescent, that region of the Near and Middle East where agriculture first flourished. Today, that region is fertile with bloodshed and hate.

And further south in Africa is a place of genocide called Darfur. Imagine the terror of running for your life, but not knowing where to turn to, to escape the killing, the disease, and the hunger.

There are such deep divisions in our human family. And, yet, here, in this nation state of California, people from all over the world live in harmony. Now, I call California a nation state because of the diversity of our people, the power of our economy, and the reach of our dream.

Every race, every culture, every religion has been drawn to California. The commerce and the trade of the nations of the Earth pass through our ports. The world knows our name. We are a good and global commonwealth. Yes, we have problems that must be solved, but it remains true, what a prosperous, peaceful Golden State in which we live, work, and raise our families.

(APPLAUSE)

SCHWARZENEGGER: We should never forget these joys and blessings of being Californians.

As governor, I feel a responsibility to conduct the public business in the way that furthers these blessings, so that our people continue to live in harmony and prosperity.

Now, how do we do that is what I would like to talk to you about today. Three years ago, when I was sworn in, I said that the recall election was not about replacing one man or one party. It was about changing the entire political climate of our state.

LEMON: And that's Governor Arnold Schwarzenegger, talking about the first time that he became governor, defeating Gray Davis, when there was a recall election in California. And, then, this time, he handily defeated one of the representatives there, Representative Phil Angelides, a Democrat, Phil Angelides, who is the outgoing, rather, state treasurer. That was back on November 7, during the midterm elections.

Amazing just to watch that -- what fanfare. And, as Kyra said earlier, you couldn't have produced this any better in Hollywood.

Let's take a listen to when his wife, a former anchor, Maria Shriver, introduced him.

(BEGIN VIDEO CLIP)

SHRIVER: Ladies and gentlemen, I now bring you the one you have been waiting for, my husband, your governor of the great state of California, Arnold Schwarzenegger.

(APPLAUSE)

("FANFARE FOR THE COMMON MAN" PLAYS)

(END VIDEO CLIP)

(LAUGHTER)

LEMON: The governor -- "Fanfare For a Common Man" is the name of the song there that -- that was just played.

(LAUGHTER)

LEMON: I see our Bill Schneider. He is laughing, just as we all -- I mean, Bill, you know, this was quite a show, "Fanfare for the Common Man," and then he hobbles out on The crutches. As you know, he broke his leg, a skiing accident...

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Right.

LEMON: ... back on, I think it was, what, December 23, if I -- yes.

SCHNEIDER: Yes. It was about then.

LEMON: Yes.

SCHNEIDER: thank Exactly.

LEMON: What do you -- what do you make of all this?

(LAUGHTER)

SCHNEIDER: He's had several accidents in the past few months. He had a motorcycle accident, where he said, memorably, when someone said, "What happened?" he said, "I fell down."

(LAUGHTER)

SCHNEIDER: Well, he fell down again. And he came out hobbling on crutches, but, still, all the grandeur of a Hollywood spectacle right there in Sacramento, California.

LEMON: Yes.

And, you know, Maria Shriver introducing her husband -- last night, I think there was like a benefit for him; $1.3 million, backers raised last night. But he was not there, because he had fallen down and hurt himself. But then he comes hobbling in. And she spoke last night. And, then, now she is speaking today, and, also, the former governor of San Francisco, Willie Brown, introducing the mayor.

SCHNEIDER: Mayor, yes.

LEMON: The former mayor -- sorry -- of San Francisco. Thank you, Bill, for -- what do you make -- again, what do you make of such a huge fanfare? Do we see this everywhere? Is it because he is Arnold Schwarzenegger?

SCHNEIDER: Well, a lot is because he is Arnold Schwarzenegger.

You know, he is above party. When you ask people in California, how did a Republican get elected so handily in a very Democratic state, in a very Democratic year, and the answer I keep getting is, Republican-Schmublican. He's Arnold. Everybody knows who Arnold is. It has very little to do with party.

But the fact is, he is a Republican, and he's one of the few Republicans this year who thrived, in a very Democratic year. What did he do? He did two things that you wouldn't say you have seen in Washington. Number one, having gotten into serious trouble in 2005, he apologized for his mistakes.

Remember, he had that press conference...

LEMON: Right. Yes.

SCHNEIDER: ... after the special election?

LEMON: I remember that.

SCHNEIDER: And he said, my wife told me not to do this.

(LAUGHTER)

SCHNEIDER: Well, he apologized. And then he changed course. He moved right back to the center. Some people say he is, more or less, becoming a Democrat now. He adopted a global warming program, the most ambitious of any state. And, this year, he is going to talk about a very bold care health care initiative.

LEMON: Oh. Well, thank you. You know what? We always appreciate your insight.

Thank you, Bill Schneider.

SCHNEIDER: OK.

LEMON: And, as we look at the governor of California, Arnold Schwarzenegger, with wife Maria Shriver, we are going to take a break.

And we will be right back. You're in the CNN NEWSROOM.

(BEGIN VIDEO CLIP)

(APPLAUSE)

("FANFARE FOR THE COMMON MAN" PLAYS)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: Rob Marciano, a lot of severe weather turning up across the country, specifically in Georgia.

MARCIANO: Yes, Georgia, Florida, and now South Carolina, Kyra.

We're getting confirmed reports now. We showed you a line about an hour ago that had the capability of producing some severe weather and potentially a tornado -- 15 injuries in Liberty -- near Liberty, South Carolina. That's in Pickens County -- reports of a small tornado touching down, and eight cars piled up on top of each other near Liberty Elementary School -- so, two people transported -- at least two people transported to the hospital.

And, when you look at this on -- on the radar, Liberty back down Highway 85 -- now the most current radar is showing this warning out, which is near -- includes Spartanburg. And this is heading off towards the northeast, very slim margin here of precipitation. So, don't be fooled by that. This is showing a fairly strong signature in the other modes that we look at -- a little bit more confusing, but they do highlight that there is some rotation with that system.

so, if you live in and around Spartanburg, do be aware of that. We have a tornado warning out until 4:00 p.m. And this thing is moving at about 50 miles an hour to the north and east.

Also, down to the south, this is the Panhandle of Florida, just south of Tallahassee. Saint Marks, which got flooded by Hurricane Dennis a couple of years ago, there is a tornado warning out for this country. This is a line that has not had a history of producing tornadoes, but now, as it begins to get involved with some very warm, humid air, a little bit of rotation starting to show up here.

This is all part of a bigger picture, which is showing tornado watches that are out for this part of Florida, and then also extending in through parts of South Carolina, until 9:00 tonight. So, this watch is out until 9:00 -- this watch also out for a similar time frame. So, it's going to be ongoing, Kyra, as we go on through the afternoon.

But the most concern that we are right now is the tornado warning that is out around Spartanburg. That has produced damage. That has produced a tornado to the south and west. And it's moving rapidly north and east. So, folks who live around Spartanburg, South Carolina, certainly want to take cover -- Kyra.

PHILLIPS: We will keep checking in. Thanks, Rob.

MARCIANO: You bet.

LEMON: All right.

And, yesterday, we saw the start of the 110th Congress yesterday, and, of course, Democrats saying that they would signal to the president that they would push back on any troop increases in Iraq.

And, today, Democrats and some Republicans meeting just a short time ago at the White House with the president, Specifically Mary Landrieu, senator from Louisiana, and Barack Obama -- Obama asked the president about troop levels in Iraq. And he responds to the president's -- the president's plan to send more troops.

Let's take a listen to what he said just a short time ago.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), ILLINOIS: And what I also indicated to him at the end was that one of the problems I have with a escalation of troop level is lack of clarity of mission, but also that there are no apparent consequences when the Iraqi government does not step up and deal with some of the sectarian violence.

And, in the absence of consequences, we can set benchmarks; we can call for different approaches from the Iraqi government. If they don't feel like there are any consequences to it, then, we end up having problems. And I think that sending more troops in, rather than initiating some sort of phased withdrawal, makes them feel as if we will be there to prop them up in perpetuity. And that's a mistake.

(CROSSTALK)

QUESTION: What other issues...

(END VIDEO CLIP)

LEMON: And that is Senator Barack Obama at the White House just a short time ago -- and, of course, Barack Obama always, in recent months, at least, been calling for some sort of phased withdrawal -- the president saying we need more troop levels.

And, at least, that's what we expect will come from a speech on Wednesday night -- more troop levels, to increase those troop levels, to secure Baghdad, and also to curb sectarian violence in Iraq -- so, again, Senator Barack Obama, Senator Mary Landrieu, other Democratic leaders, and Republican leaders, as well, meeting with the president face to face at the White House just a short time ago to talk about the plan for Iraq -- Kyra.

("FANFARE FOR THE COMMON MAN" PLAYS)

(LAUGHTER)

PHILLIPS: Hey, if Arnold Schwarzenegger can get "Fanfare for a Common Man," Rick Sanchez is going to be taking over the anchor desk on Saturday and Sunday nights starting this weekend. Joining us, a look now at a few of the stories he'll have tomorrow night.

You're not hobbling out on crutches, though. You're just kind of...

RICK SANCHEZ, CNN ANCHOR: Does that man know how to make an entrance? Does that man know how to -- you know, I called him and told him to use that technique. I didn't think he would do it though.

PHILLIPS: Highly produced as you always are. You salsaed your way right in here, Rick Sanchez!

SANCHEZ: Love you for that and everything else.

Hey, let me ask you a question, and I know would you incapable of doing this, by the way. I just know you. It's our friendship over the years has taught me this much about you.

PHILLIPS: All right, let's see.

SANCHEZ: Could you go a whole year without spending any money on anything except for like, bare essentials, you know, what you eat and maybe a pair of shoes?

PHILLIPS: If I were in Antarctica, sure.

SANCHEZ: But otherwise you couldn't, right?

PHILLIPS: Probably not. It's hard. Sure.

SANCHEZ: It's tough to do. I mean, we live in a consumer society. This is what we're going to be talking about.

PHILLIPS: We have needs.

SANCHEZ: We have needs. Well put. Could you do it? A group of friends since September of 2006 have not spent anything. They've tried to see what it would be like to live in a consumer society without consuming, and we're going to look at how they fared. This is an interesting topic. I mean, there's a very serious part of this that we're going to be getting into as well.

And then there's this story that we have been following up on as well. It's the parents of a severely disabled 9-year-old girl and they've OK'd a medical procedure that will keep her in a state of permanent childhood so she won't grow up. They just want to be able to take care of her.

Are they being selfish, some would ask. It's a debate and we're going to enter that debate because we think it's is that kind of story that a lot of people would want to know about.

PHILLIPS: Well, the doctors approved doing it, right?

SANCHEZ: So far.

PHILLIPS: OK, so far.

SANCHEZ: Yes.

PHILLIPS: But because of the controversy, it's possible they might say, oops, well, maybe we made a mistake, this isn't very ethical?

SANCHEZ: You and I have been around the block enough to know that this is the kind of story that doesn't only have one leg but actually many. So there is appeals courts and there's all kinds of questions and there's family members that are probably going to argue it as well. So we're going to be looking into all of that as well.

PHILLIPS: Interesting stuff.

SANCHEZ: Thanks again for the entrance, by the way.

PHILLIPS: No problem.

SANCHEZ: Can we get the trumpets one more time, by the way?

PHILLIPS: Little fanfare out. A little fanfare out. There we go. We got picture and the fanfare.

SANCHEZ: You guys are just too good. Keep it up.

PHILLIPS: We have it, folks.

LEMON: I just got an e-mail from a friend -- I won't say her name -- she goes, I love Rick Sanchez! And you know what I remember about you?

SANCHEZ: What was she drinking?

LEMON: I don't know. We were working at the same news organization I remember, and you had to toss to me and I said, you know what? I get to work with Rick Sanchez. And I said, if Rick Sanchez does this, I'm going to lose it. And I almost said -- you go, let's check in with the top stories of the day. Here is Don Lemon. Don, take it away! And I said, oh my gosh, there. He did it.

SANCHEZ: He did it. He did it.

LEMON: He did it, he did it!

SANCHEZ: Well, I like the fanfare.

PHILLIPS: And you still do it.

SANCHEZ: I look forward to seeing you guys.

PHILLIPS: Thanks, Rick.

LEMON: Thank you, Rick. Thank you, sir.

Is military service a risk factor for diabetes? Not by itself, but seven out of 10 military veterans are said to be overweight and too many pounds puts anybody at risk of all sorts of problems. Now comes a battle plan for the hefty vet.

CNN's Dr. Sanjay Gupta explains in today's "Fit Nation" report.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN SR. MEDICAL CORRESPONDENT (voice-over): Fine is not a word Earl Ward often heard when he went to the doctor.

EARL WARD, VIETNAM VET: You should of seen me a few years ago because I was -- I had a big gut!

GUPTA: Because of that gut he became a diabetic and he suffered from sleep apnea.

WARD: I wasn't doing much. I used to be very active.

UNIDENTIFIED MALE: Ready, exercise.

GUPTA: He is one of thousands of veterans across the country signing up for a new fitness and nutrition program at the V.A. called Move.

UNIDENTIFIED MALE: You're a cool man. PHYLLIS GATEWOOD, MOVE COORDINATOR: The overall goal is to get our veterans to start eating healthier, become more physically active and start focusing on those behaviors so that we can help them manage their weight.

GUPTA: Each vet who visits a doctor at the V.A. and is overweight gets referred to Move. Far from a boot camp, it treats each veteran individually.

WARD: They don't beat me down, as they say, but they do educate and advise and counsel. And so I participate in any program that they offer.

GUPTA: And the program is paying off.

DR. YVETTE WILLIAMS, V.A. DOCTOR: Very nice, 118 over 65. Great. That's doing very well.

WARD: Yes.

GUPTA: Ward's sleep apnea is gone, his cholesterol are better and he has even been able to cut back his diabetes medications.

WILLIAMS: Changing your diet has made a lot of things better, even though we've not had as much weight loss as we'd want.

GUPTA: But if he keeps Move up, a healthy weight should come eventually.

WILLIAMS: I'm looking for sustained weight loss over a long period of time that can fit into your regular routine and you're doing very well.

WARD: Well, thank you.

GUPTA: Dr. Sanjay Gupta, CNN, reporting.

(END VIDEOTAPE)

PHILLIPS: Coming up, a side effect coming up of the real estate slowdown. One couple's story of losing their home to foreclosure. Stay with us.

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PHILLIPS: We keep tracking that severe weather with our Rob Marciano. Damage in Mississippi, just pictures coming in, but it's all over the place, isn't it, Rob?

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LEMON: Coming up, a side effect of the real estate slowdown. One couple's story of losing their home to foreclosure. Stay with us, you're in the NEWSROOM.

(COMMERCIAL BREAK) LEMON: Well, you've heard of a real estate slowdown or slump or soft landing, but for thousands of former homeowners who make up a spike in mortgage foreclosures, there is nothing slow or soft about it.

CNN's personal finance editor Gerri Willis is here to tell us more about that -- Gerri.

GERRI WILLIS, CNN PERSONAL FINANCE CORRESPONDENT: Hi there, Don. Well, rising foreclosures are a threat to the entire housing market. When the homes are sold at auction they generally go for low prices and that brings down everyone's home values.

Of course, no one is more affected than the individuals who actually lose their homes. Like one couple who never saw it coming.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): Tara and Jason Parrish thought they had the American Dream, a beautiful new home for themselves and their two- year-old son. That was three years ago. Today they're celebrating Christmas in this small rental house after a terrible ordeal.

TARA PARRISH, LOST HOME: We had a minivan, and he had a Grand Am, and the cars just were constantly breaking down, and we had to keep paying to have those fixed which, in turn, made our credit card bills go up, and we decided to file Chapter 7 bankruptcy to get rid of the debt that was just weighing down on us.

WILLIS: They thought the bankruptcy would let them keep their house, though in most states Chapter 7 offers limited protection to homeowners. They kept making their monthly payments.

PARRISH: About four or five months down the road, we kept getting hounding phone calls, you're not paying your mortgage, you know, we're going to put you in foreclosure.

WILLIS: Those calls were coming from a second mortgage company, which unknown to the Parrishes, had bought their loan. They tried to give that company proof of payments.

PARRISH: They would tell me to fax it, I would fax it. I would call them back, and they said, oh, we didn't get the fax. Oh, we'll transfer you to this service or this department, or, oh, you can talk to the foreclosure department. It was just a nightmare.

WILLIS: For some reason, their payments weren't being credited, though the mortgage company would not comment why. Frustrated, they skipped two payments.

That was a big mistake. By now a third mortgage company had bought the loan. It told the Parishes they owed $15,000 -- money they didn't have.

After nearly three years of back and forth with three different companies, the lender turned the parishes out of their home. The bank then sold it in a foreclosure sale, and the family moved into a small rental house. They say they lost more than just their home.

JOHN PARRISH, LOST HOME: Thousands upon thousands of dollars between payments we were making to them that went nowhere, lump sums we gave to them to try to put our loan back on track, thousands of dollars.

T. PARRISH: About between $35,000 and $40,000 worth of equity.

(END VIDEOTAPE)

LEMON: Wow. Gerri, unbelievable. What should people do if they find themselves in, God forbid, in this horrible situation.

WILLIS: It is a horrible situation but the good news is you can fight back. You have to be aggressive and you have to talk to your lender. You can't put your head in the sand.

And Don, of course, this problem is affecting more and more people. Not just low income poor people, but more and more people in the middle class are getting his hit with this.

We will take a closer look at the rise in foreclosures on a special edition of "Open House, Mortgage Meltdown," Saturday at 2:00 p.m. Eastern and Sunday at 4:00 Eastern, right here on CNN.

LEMON: We'll be watching. Of course, you know we just did that thing, everybody is one or two paychecks, a lot of people, away from you know something like this. So it will be very interesting to watch, Gerri.

WILLIS: Thank you, Don.

PHILLIPS: It's Friday. Time to take a look at "Life After Work." In 1985, Steve Case co-finded, co-founded rather, America Online. Less than two decades later at its peak the company boasted 27 million subscribers. This week's "Life After Work" finds case turning his entrepreneurial spirit towards a new challenge -- tackling the problems of America's health-care industry.

(BEGIN VIDEOTAPE)

ANNOUNCER: You've got mail.

STEVE CASE, AOL CO-FOUNDER: I just love building businesses that can change the world.

VALERIE MORRIS, CNN CORRESPONDENT (voice over): Steve Case co- founded America Online and eventually spearheaded the mega-merger of AOL with Time Warner, CNN's parent company.

But no matter how large his companies become, it is the creative process which drives Steve Case.

CASE: AOL was a 20-year journey and the first 10 years it started with dozens of people and when we merged with Time Warner, suddenly it was tens of thousands of people. So, it was a whole different scale. I just think I work better and am more effective in that earlier stage, kind of pioneering phase.

MORRIS: Amidst the bursting of the dotcom bubble, AOL-Time Warner share price plummeted. Under pressure, Case resigned as chairman of the company nearly four years ago. Still defending the merger despite its disastrous consequences for stockholders and the bottom line.

CASE: There is no question that strategically the merger was a good idea for both companies. I think the execution was difficult, particularly in the first few years.

MORRIS: Today, Case is focusing his zest for innovation on a new challenge, hoping to revamp the health care industry

CASE: It took 20 years for AOL, and other companies to really make the Internet more of a mainstream phenomena. It will probably take 20 years to revolutionize health care and make it more consumer- centric.

MORRIS: Case is the principal investor in RediClinics, a string of small health care facilities set up at high-traffic areas like drug stores.

They're staffed by nurse practitioners who provide preventive care, and treat common medical conditions in sessions averaging 15 minutes. There are no appointments and fees are moderate.

CASE: It's a way to provide a higher level of convenience and a higher level of affordability than presently exists.

MORRIS: And as Case demonstrated, he is not afraid to taste his own medicine.

CASE: Didn't hurt at all!

MORRIS: Valerie Morris, CNN, New York.

(END VIDEOTAPE)

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