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British Terror Arrests; Watching Castro; President Bush Addresses Wall Street on State of the Economy
Aired January 31, 2007 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And good morning, everyone. You're with CNN. You're informed.
I'm Tony Harris.
HEIDI COLLINS, CNN ANCHOR: And I'm Heidi Collins.
Developments keep coming in to the NEWSROOM on this Wednesday, January 31st.
Here's what's on the rundown.
President Bush live from Wall Street this hour. He's shifting the focus briefly from Iraq to the American economic machine.
HARRIS: U.K. police foiling plans they say to kidnap and torture a British soldier. Nine suspects in custody now after overnight raids in Birmingham.
COLLINS: Students graded on spelling, math, and now their weight, bringing home an "F" for fat.
Health concerns in the NEWSROOM.
Terror at a chilling new level. British police arresting nine suspects now in what's called a major counterterrorism operation. Those arrests in central England. Grisly details in the alleged plot are still coming out.
CNN's Jim Boulden joining us now live from Birmingham, England.
And Jim, this latest arrest just happened moments ago we're told.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: That's right, Heidi. We did just hear about another arrest, but we're being told by security sources is just an amazing, alleged plot to kidnap an active British Muslim soldier. And that kidnapping would then be televised, they would be taping this man as they held him hostage.
They were going to demand the release of British and American soldiers -- actually, the withdrawal of British and American soldiers from Afghanistan and Iraq. The chilling part of this plot was that they were also going to videotape the beheading of this Muslim soldier and that they would release that tape to the internet.
Now, British police came to locations like this and others around Birmingham at 4:00 this morning, raiding all these addresses. They've arrested eight men this morning. We just heard a few minutes ago that a ninth man has been arrested.
Let's listen to Assistant Chief Constable David Shaw give that information to media.
(BEGIN VIDEO CLIP)
ASST. CHIEF CONSTABLE DAVID SHAW, WEST MIDLANDS POLICE: And I can confirm that just in the very last few minutes, we have arrested a ninth suspect on the motorway in the Birmingham area. I think that illustrates to you that this remains a dynamic, fluid operation and it is by no means finished. I think it's important for you to understand the context in which we're operating.
(END VIDEO CLIP)
BOULDEN: Now, this would be very different from what we've seen in other previous terrorist arrests in this country. Other arrests, of course, alleged bomb plots and poison scares. And the police have cordoned off large areas and evacuated areas. Nothing like that this time.
This was the idea of kidnapping one individual, the idea of terrorizing the Muslim community itself from within by showing that they could get to a Muslim soldier in a way -- if this was what the plot was -- to tell Muslims not to actually join up -- and not to join the British army. So it's a very chilling thought.
We talked to some of the people in the area, and they're very worried, indeed, of course, not only about British police arresting lots of Muslims, but also what this plot might have entailed -- Heidi.
COLLINS: Well, yes, that was just what I was going to ask you, Jim, is it sounds pretty intimidating, like a very forced intimidation of the people in that community. How are they responding?
BOULDEN: Well, first, people told us they were very shocked. The families, they've known some of the families. They know some of the young men who were arrested.
We talked to people who said they were small businessmen. The families, you know, they have owned corner shops, they own convenient stores. And so they're shocked, number one, that people in their neighborhood, usually a very quiet neighborhood, would be arrested.
And number two, of course, we're telling them some -- some of them the stories we're hearing about the plot and that's very, very worrying for them because, of course, we have not seen anything like this. It would be quite a significant change in the way that some of the alleged terrorists would operate in this country.
So people are very confused about this. And the police have said they're actually going to hand out leaflets over the next 24 hours, some 5,000 leaflets, to try to explain to the local population what this operation actually entails. COLLINS: Well, hopefully that will be at least a little bit comforting to them.
Jim Boulden, thanks so much, live from Birmingham today.
HARRIS: President Bush in a New York state of mind. He is about to address Wall Street on the state of the economy.
Let's go now to White House Correspondent Elaine Quijano in our New York bureau.
And Elaine, the President essentially is going to lay out his economic agenda here.
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: He certainly is. Good morning to you, Tony.
That's right, amid low public approval ratings, as well as staunch opposition on Capitol Hill to his new Iraq strategy, President Bush is hoping to highlight a topic the White House feels he has not received enough credit for in the past, the economy.
Now, the president arrived here in New York a short time ago. He's set to deliver a speech the White House is calling a "State of the Economy Address," coming, of course, on the heels of the State of the Union Address last week.
But, of course, his visit here comes at time when his domestic and economic agenda has been overshadowed by Iraq. The president is facing deep skepticism from both Democrats and even fellow Republicans over his plan to send some 21,000 additional U.S. troops to pacify Baghdad and the Al Anbar Province. Yet, despite the doubts from members of his own party, in recent days President Bush has made clear his view that as commander in chief, he feels the decision about a new Iraq strategy is his to make.
Meantime, here in New York, the president has chosen Federal Hall on Wall Street as his backdrop, an historic site, the site, although not the original building, where George Washington was inaugurated and the first Congress met. The president, as he looks to a Democratic-led Congress, promoting his economic agenda today, pushing for, among other things, free trade, making his tax cuts permanent, and also touting some low unemployment numbers -- Tony.
HARRIS: OK, Elaine. And if I'm correct, we had a bit of a preview of this speech yesterday when the president was in Illinois. He talked about lower inflation, interest rates, and a low national unemployment rate.
So, I'm suspecting we'll hear more of that in just a couple of minutes.
QUIJANO: That's absolutely right. The president yesterday visited Peoria, Illinois, in the Midwest, visiting the headquarters of Caterpillar, which makes earth-moving equipment. And the president was essentially saying that this was an example of a company that has benefited under his watch, under his economic ideas, and primarily pushing this initiative of free trade. Certainly, that's something we've heard the president talk about quite a bit.
So, today you'll likely hear some of that as well. The president and the White House, though, really looking at this as a more formal sort of address, if you will. And you can tell by the very venue there, a more formal setting, as the president tries to push an economic message that privately his aides concede has been drowned out largely by Iraq -- Tony.
HARRIS: Our White House correspondent, Elaine Quijano, in New York City this morning.
Well, Americans may see the state of the economy as good, but most folks aren't giving President Bush credit for it. CNN-Opinion Research Corporation polls this month show 63 percent, almost two- thirds of Americans, say economic conditions are good, but only 43 percent, fewer than half, approve of how President Bush is handling the economy.
And of course we will take you back to Federal Hall in New York City when the president begins his address.
COLLINS: New questions about Iran's possible involvement in Iraq and whether Tehran had a role in an attack on U.S. troops. A U.S. official says military investigators are looking into whether Iranians were involved in a daring ambush in Karbala. Five U.S. soldiers were killed.
An official from another government agency says possible Iranian involvement is a leading theory in the investigation. But both officials stress this is a preliminary view and there has been no final conclusion. Concerns about possible Iranian involvement stem from the level of sophistication and coordination behind the attack.
A country in crisis, a leader possibly in peril. Iraqi prime minister Nuri al-Maliki sat down with an exclusive interview with CNN's Michael Ware. The Iraqi leader concedes his country is reeling from violence and volatility, but he insists with Washington's help, it can be pulled back from the precipice.
(BEGIN VIDEO CLIP)
NURI AL-MALIKI, IRAQI PRIME MINISTER (through translator): One of the major issues for President Bush's plan, which we consider support to our Baghdad security plan, is the extent to which there is a need for additional troops, American and multinational, to support the operations. And we agree this will be assessed by those in the field, the military commanders. And if their assessment is for more, we will ask for these troops.
But we believe that the existing number, with a slight addition, will do the job. But if there seems to be more need, we will ask for more troops.
We don't want to rule a (ph) force. And we have announced that future operations will not only be military, but will also have political efforts on its side, national reconciliation efforts and the containment efforts.
We do not want to kill the people and drown the country in blood. And we welcome every step that brings a setback for the militias or terrorists and a desire to join the political process so we can minimize the losses and blood. But, this all has to happen under the umbrella of national will, the government, and the law.
(END VIDEO CLIP)
COLLINS: Al-Maliki, who's been accused of showing favoritism toward a radical Muslim cleric, vows to apply that law equally to everyone.
HARRIS: Miami planning to party after the death of Fidel Castro. The Cuban leader apparently saying not so fast. There are new pictures of the ailing president, the first we've seen in months.
CNN's Morgan Neill has more.
(BEGIN VIDEOTAPE)
MORGAN NEILL, CNN INTERNATIONAL CORRESPONDENT (voice over): Three months after disappearing from sight, Fidel Castro is back.
In this new video, the ailing 80-year-old Cuban leader is on his feet greeting Venezuelan President Hugo Chavez. His voice is weak, but the message is clear. This is far from a lost battle, he says. The video lasting some 10 minutes shows Castro and Chavez discussing everything from climate change to what the Venezuelan leader called the threats from the empire, a reference to the United States.
Chavez says the video was shot during an unannounced visit Monday afternoon. Wednesday marks six months since intestinal surgery forced Castro to transfer power to his 75-year-old brother Raul. With or without the new images, many Cubans say they have more pressing things to worry about than politics.
"I have so many things on my mind," she says. "I haven't been able to think whether there are changes or not."
Both inside and outside Cuba, the president's health is a constant source of speculation. Most recently the Spanish newspaper, "El Pais" reported he had three failed operations to deal with diverticulitis, inflammation of a pouch in the intestinal wall. This has not been confirmed.
The latest video will do little to clear up uncertainty about just who is making the decisions. Acting President Raul Castro, or Fidel Castro, from his bedside? Raul is officially in charge, but analysts say at this point he is not likely to make decision that is would directly contradict those of his brother.
While Miami erupted with celebrations when Castro transferred power in July, the streets of Havana have remained calm. Analyst Hal Klepak says there's good reason for that. HAL KLEPAK, ROYAL MILITARY COLLEGE: Cuban s are not surprised by whatever, Miami or Washington or capitals thinks. They see more stability not less in the sense of here is what was said was going to be happening. It is happening, but without the absence of this 47 years ruler.
NEILL (on camera): And so, six months after President Fidel Castro was forced to hand over power, it's a sense of continuity, not of change, that's most striking. And it's likely to say that way as long as new videos like the most recent ensure that he remains in the picture.
Morgan Neill, CNN, Havana.
(END VIDEOTAPE)
HARRIS: And still to come, trouble with tourism. Long lines and delays all part of the post-9/11 world. The cost of security in tourist dollars, that's ahead in the NEWSROOM.
COLLINS: A deadly propane blast in West Virginia. The search for clues and more victims coming up here in the NEWSROOM.
We want to go live now to President Bush, speaking from Federal Hall in New York City on his economics.
Let's listen in.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Ladies and gentlemen, the state of our economy is strong.
(APPLAUSE)
And with the hard work of the American people and the right policies in Washington we're going to make it even stronger.
Mr. Mayor, thanks for being here. I appreciate you coming. You're -- you're doing what the people want you to do, and that is to lead this city.
I appreciate, Bill Ruden (ph) -- thanks for having me, Bill. Good to see you again.
I want to thank members of the Congress who have joined us -- Peter King, Vito Fossella, Carolyn Malone, and Tom Reynolds.
Thanks for flying down with me today. Want a ride back?
(LAUGHTER)
Mr. Mayor, David Dinkins, thank you for being here. Proud you're here.
And it's good to see my buddy, Mayor Ed Koch.
Mr. Mayor, thank you for coming. Appreciate you being here. (APPLAUSE)
I thank the members of -- for the Association of a Better New York who have joined us.
I appreciate all the state and local officials who are here.
Bill mentioned that I was here in October, 2001. I recognized then that our economy had been hit hard and there was great uncertainty about the future. It was tough times for country. Many people were out of work and by mid-December, nearly a million jobs had been lost. The collapse of the twin towers had left dangerous cracks in this building's foundations.
I said that day that I was optimistic that our economy would recover from these attacks. But if I had told you we'd also make the recession one of shortest on record, that we'd have confronted corporate scandals, absorb a tripling in the price of oil, fight a global war, and help a whole region of our country recover from a hurricane, you might have been a little skeptical.
Yet, America's economy has overcome all these things. Federal Hall has been fully restored. It's on solid ground. And so is the New York economy. As the mayor mentioned, it's booming, with bond rating at an all-time high and unemployment at an all-time low.
Across our nation, small businesses and entrepreneurs are creating millions of new jobs. Retail sales are up, consumer spending is strong, exports of goods and services have jumped by nearly 35 percent. The Dow Jones has set new records 26 times in the last four months the.
Productivity is strong, and that's translating into higher wages. When people across the world look at America's economy, what they see is low inflation, low unemployment, and the fastest growth of any major industrialized nation.
The entrepreneurial spirit is alive and well in the United States. There is one undisputed leader in the world in terms of economy, and that's the United States of America.
(APPLAUSE)
On Wall Street, you know that America's economic leadership rests on strong and flexible capital markets. Capital markets connect entrepreneurs with the investment they need to turn their ideas into new businesses.
America's capital markets are the deepest, the broadest, and the most efficient in the world. Yet, excessive litigation and overregulation threaten to make our financial markets less attractive to investors, especially in the face of rising competition from capital markets abroad. To keep America's economic leadership, America must be the best place in the world to invest capital and to do business.
One important step we've taken in Washington is to pass litigation reform like the Class Action Fairness Act. It's important for people in Congress to understand that excessive lawsuits will make it hard for America to remain the economic leader that we want to be.
Another important step we've taken is to strengthen our business institutions by passing the Sarbanes-Oxley Act in 2002. This law helped boost investor confidence by establishing high standards for transparency and corporate governance.
The principles of Sarbanes-Oxley are as important today as when they were passed, yet complying with certain aspects of the law, such as Section 404, has been costly for businesses and may be discouraging companies from listing on our stock exchanges. We don't need to change the law. We need to change the way the law is implemented.
America needs a regulatory environment that promotes high standards of integrity in our capital markets and encourages growth and innovation. And I'm pleased at the progress that Hank Paulson and Chairman Christopher Cox are making to make sure the regulatory burden is not oppressive and fair and helps us meet a great national objective to keep the United States the economic leader in the world.
Our economic leadership also depends on sensible pro-growth tax policies. To help bring our economy out of a recession and recover from September the 11th, we cut taxes on the American people.
We cut taxes on everybody who pays income taxes. We doubled the child tax credit. We reduced the marriage penalty. We cut taxes on small businesses. And we cut taxes on dividends and capital gains.
There was a lot of political debate about these tax cuts. But here are some of the facts.
Since we enacted major tax relief into law in 2003, our economy has created nearly 7.2 million new jobs. Our economy has expanded by more than 13 percent. That expansion is roughly the size of the entire Canadian economy. This economic growth has led to record tax revenues which has helped us cut the deficit in half three years ahead of schedule.
One fact should be clear when you look at the statistics. The fastest way to kill a recovery would be to raise taxes on the people who created it. Now is not the time for the federal government to be raising taxes on the American people.
(APPLAUSE)
We must ensure that the money you spend in Washington is spent wisely.
Next Monday I'm going to submit to Congress a budget that will eliminate the deficit by 2012. In order to do so, we need to set priorities in Washington. You can't try to be all things to all people when it comes to spending your money if you want to keep taxes low, keep the economy growing and balance the budget.
And my number one priority is to protect this country. And we're going to make sure our troops have all the equipment they need to do the job we sent them to do...
(APPLAUSE)
... and make sure our citizens have what it takes to defend this homeland.
That means we've got to be careful about how we spend money in other areas.
One thing we can do to show the American people that we're going to be smart about how we spend their money is to do something about earmarks. It's that system of appropriations where things end up being spent even though nobody's voted on them. And I'm going to work with Congress to reduce the amount of earmarks and the number of dollars spent by earmarks in a significant way to earn the trust of the taxpayers of this country and at the same time be wise about how we spend their money.
I believe I need a line-item veto to help Congress spend money wisely, so I put forth a plan that says the legislative branch and the executive branch will work together to eliminate wasteful and unnecessary spending. We're about to pass a farm bill that provides a strong safety net while tightening spending and cutting subsidies.
We can manage the short-term deficit, and I look forward to working with Congress to do so. But it's important for Congress to understand there are unfunded liabilities inherent in Social Security and Medicare that we need to do something about now. And I understand it's tough work. It requires political will from both the president and the Congress to come together and solve this problem.
I'm hopeful that we can set aside needless politics and address the issues with entitlements in a constructive way. That way, people will say they came to Washington and they did the job we expect them to do.
Our growing economy is also a changing economy. The rise in new technologies, new competition, and new markets abroad is bringing changes, and these changes are coming faster than ever.
There was a time that most people expected they'd keep a job for life. Now the average American has 10 jobs before the age of 40. It used to be that a company's name would stay the same for decades. New companies are now -- now companies are merging and splitting and creating new names and new stock symbols.
Some of us can still remember when cell phones were the size of bricks and considered a luxury. Now they fit in your pocket, they take photos, they play music, and every teenager in America has one, it seems like.
By and large, our dynamic and innovative economies helped Americans live better and more comfortable lives, yet the same dynamism that is driving economic growth is also -- can be unsettling for people. For many Americans, change means having to find a new job or to deal with a new boss after a merger, or to go back to school to learn new skills for a new career. And the question for America is whether we treat the changes in our economy as opportunities to help improve people's lives or as an excuse to retreat into protectionism.
I believe that the changes present us with historic opportunities. America's growing economy allows us to approach them from a position of strength. And so today I'm going to discuss actions we should take to make America's economy more flexible and dynamic in four areas: trade, health, energy, and education.
First, we can make our economy more flexible and dynamic by expanding trade. America is about five percent of the world's population. And that means 95 percent of our potential customers are abroad.
Every time we break down barriers to trade and investment, we open up new markets for our businesses and our farmers. As we improve free trade, consumers get lower prices. There are better American jobs. You see increased productivity. Jobs supported by exports of goods pay wages that are 13 percent to 18 percent higher than the average.
So one of our top priorities has been to remove obstacles to trade everywhere we can. When I took office, America had free trade agreements with three countries. We have free trade agreements in force now with 13 countries and we have more on the way. These agreements are leading to direct benefits for America's businesses and, equally importantly, America's workers.
Yesterday I went to the Caterpillar plant in Peoria, Illinois. That's where they make big bulldozers. Folks there told me that Caterpillar now exports more than one-half of the products they make.
COLLINS: We are listening to President Bush talk about the economy here at Federal Hall on Wall Street. Interesting that this was the location or venue, if you will, that he choose, because if you do remember, he made mention of visiting Federal Hall and giving a speech shortly after September 11th and trying to assure business leaders that the economy would bounce back.
He returns today to talk a little bit about that, lowering taxes and decreasing dependence on foreign oil, the unemployment rate, gross domestic product, all sorts of things that we would like to talk more about in just a moment. So stick around for that.
HARRIS: And Heidi, we're getting some reaction already to the speech, reaction from New York senator Chuck Schumer to a speech he couldn't have heard.
Chuck Schumer is the chairman of the Joint Economic Committee. He is out with a comment this morning on the president's economy speech. Here's what he had to say a short time ago.
(BEGIN VIDEO CLIP)
SEN. CHARLES SCHUMER (D), NEW YORK: No one is happier than we are that we had a nice quarter. But if you spend time out in middle class America, if you descend from the 30,000-foot level to the communities of Main Street, you know that all is not well with the middle class. The basic successes and aspirations of middle class life -- raising a family, buying a home, paying for college, saving for retirement and healthcare -- are becoming intimidating hurdles for average, ordinary people.
(END VIDEO CLIP)
COLLINS: Now a little more on President Bush's speech and the state of the economy.
Let's go ahead and bring in CNN's Ali Velshi, live from New York.
Hey, Ali, you know, it is kind of interesting that just last week the president gave the State of the Union but didn't really talk a whole lot about the economy.
ALI VELSHI, CNN CORRESPONDENT: No. NO, absolutely right.
And last year's State of the Union was a lot of talk about energy. But the interesting thing is the economy has been chugging along nicely.
President Bush actually cited a number of figures about job creation and growth and things like that that are helping him along. In fact, it's often been a thought that the president might emphasize more about the economy. It's one of the areas where his approval rating is actually increasing.
COLLINS: Right.
VELSHI: He did cite the things that we know about -- growth; record unemployment, 4.5 percent; 7.2 million jobs created since 2003. What he didn't mention is about three million manufacturing jobs have been lost to overseas.
Interesting comment that he made. First of all, he talked about wanting a line-item veto for budgets. Presidents, as you know, always ask for a line-item veto.
COLLINS: Yes. He's been asking for that for a long time.
VELSHI: That's kind of stock. But one thing he mentioned, a provision in the Sarbanes-Oxley bill.
You'll remember Sarbanes-Oxley came up as a result of the scandals, the accounting scandals, Enron, WorldCom, all of those. And he mentioned Provision 404 of Sarbanes-Oxley and why that might need to be changed.
Here's what this is about. As U.S. companies are competing in the world, a number of companies have complained that Sarbanes-Oxley, this bill that was brought in to make companies more accountable for their accounting and make the accounting more transparent to the investors, is onerous. It's expensive and it's hard to keep up with.
And President Bush specifically making reference to one clause having to do with accounting in Sarbanes-Oxley that he thinks needs to be changed so that American companies aren't sort of held down by accounting laws. Now, that's subject to various opinions. But basically, President Bush saying the economy is really good. You'll remember on -- just after September 11th, President Bush went to Federal Hall to talk about the fact that the economy was going to be OK. This is kind of full circle. He's coming back all these years later saying it really is OK.
COLLINS: Yes. And so we heard him talk a lot about the gross domestic product, the unemployment rates, wages going up.
What about consumer confidence? Do all of those things that are supposed to be positive, are people noticing enough so that they're going out and buying more and feeling confident in their -- I guess their own personal finances?
VELSHI: You know, Heidi, to trip up the American consumer, to stop them from spending, you have to punch them in the nose, tie them up, and, you know, put security guards them. Americans don't stop spending.
However, this past holiday season was unusual in that all of this -- these interest rate increases, housing price decreases and gasoline price increases that Americans have suffered actually did show up in how people spent. They spent less over this Christmas holiday than they were expected to spend.
So, you know, fundamentally, it's about interest rates, it's about jobs, and it's about house prices. And two of those three are a little uncertain right now. The jobs picture is good, but the housing -- you know, the housing price situation is muddling along. And as you know, 2:15 today Eastern Time we've got the Fed decision.
COLLINS: Right.
TONY HARRIS, CNN ANCHOR: And good morning, everyone. You're with CNN. You're informed. I'm Tony Harris.
HEIDI COLLINS, CNN ANCHOR: And I'm Heidi Collins.
Developments keep coming in to the NEWSROOM on this Wednesday, January 31st.
Here's what's on the rundown.
President Bush live from Wall Street this hour. He's shifting the focus briefly from Iraq to the American economic machine.
HARRIS: U.K. police foiling plans they say to kidnap and torture a British soldier. Nine suspects in custody now after overnight raids in Birmingham.
COLLINS: Students graded on spelling, math, and now their weight, bringing home an "F" for fat.
Health concerns in the NEWSROOM.
Terror at a chilling new level. British police arresting nine suspects now in what's called a major counterterrorism operation. Those arrests in central England. Grisly details in the alleged plot are still coming out.
CNN's Jim Boulden joining us now live from Birmingham, England.
And Jim, this latest arrest just happened moments ago we're told.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: That's right, Heidi. We did just hear about another arrest, but we're being told by security sources is just an amazing, alleged plot to kidnap an active British Muslim soldier. And that kidnapping would then be televised, they would be taping this man as they held him hostage.
They were going to demand the release of British and American soldiers -- actually, the withdrawal of British and American soldiers from Afghanistan and Iraq. The chilling part of this plot was that they were also going to videotape the beheading of this Muslim soldier and that they would release that tape to the internet.
Now, British police came to locations like this and others around Birmingham at 4:00 this morning, raiding all these addresses. They've arrested eight men this morning. We just heard a few minutes ago that a ninth man has been arrested.
Let's listen to Assistant Chief Constable David Shaw give that information to media.
(BEGIN VIDEO CLIP)
ASST. CHIEF CONSTABLE DAVID SHAW, WEST MIDLANDS POLICE: And I can confirm that just in the very last few minutes, we have arrested a ninth suspect on the motorway in the Birmingham area. I think that illustrates to you that this remains a dynamic, fluid operation and it is by no means finished. I think it's important for you to understand the context in which we're operating.
(END VIDEO CLIP)
BOULDEN: Now, this would be very different from what we've seen in other previous terrorist arrests in this country. Other arrests, of course, alleged bomb plots and poison scares. And the police have cordoned off large areas and evacuated areas. Nothing like that this time.
This was the idea of kidnapping one individual, the idea of terrorizing the Muslim community itself from within by showing that they could get to a Muslim soldier in a way -- if this was what the plot was -- to tell Muslims not to actually join up -- and not to join the British army. So it's a very chilling thought.
We talked to some of the people in the area, and they're very worried, indeed, of course, not only about British police arresting lots of Muslims, but also what this plot might have entailed -- Heidi.
COLLINS: Well, yes, that was just what I was going to ask you, Jim, is it sounds pretty intimidating, like a very forced intimidation of the people in that community. How are they responding?
BOULDEN: Well, first, people told us they were very shocked. The families, they've known some of the families. They know some of the young men who were arrested.
We talked to people who said they were small businessmen. The families, you know, they have owned corner shops, they own convenient stores. And so they're shocked, number one, that people in their neighborhood, usually a very quiet neighborhood, would be arrested.
And number two, of course, we're telling them some -- some of them the stories we're hearing about the plot and that's very, very worrying for them because, of course, we have not seen anything like this. It would be quite a significant change in the way that some of the alleged terrorists would operate in this country.
So people are very confused about this. And the police have said they're actually going to hand out leaflets over the next 24 hours, some 5,000 leaflets, to try to explain to the local population what this operation actually entails.
COLLINS: Well, hopefully that will be at least a little bit comforting to them.
Jim Boulden, thanks so much, live from Birmingham today.
HARRIS: President Bush in a New York state of mind. He is about to address Wall Street on the state of the economy.
Let's go now to White House Correspondent Elaine Quijano in our New York bureau.
And Elaine, the President essentially is going to lay out his economic agenda here. ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: He certainly is. Good morning to you, Tony.
That's right, amid low public approval ratings, as well as staunch opposition on Capitol Hill to his new Iraq strategy, President Bush is hoping to highlight a topic the White House feels he has not received enough credit for in the past, the economy.
Now, the president arrived here in New York a short time ago. He's set to deliver a speech the White House is calling a "State of the Economy Address," coming, of course, on the heels of the State of the Union Address last week.
But, of course, his visit here comes at time when his domestic and economic agenda has been overshadowed by Iraq. The president is facing deep skepticism from both Democrats and even fellow Republicans over his plan to send some 21,000 additional U.S. troops to pacify Baghdad and the Al Anbar Province. Yet, despite the doubts from members of his own party, in recent days President Bush has made clear his view that as commander in chief, he feels the decision about a new Iraq strategy is his to make.
Meantime, here in New York, the president has chosen Federal Hall on Wall Street as his backdrop, an historic site, the site, although not the original building, where George Washington was inaugurated and the first Congress met. The president, as he looks to a Democratic-led Congress, promoting his economic agenda today, pushing for, among other things, free trade, making his tax cuts permanent, and also touting some low unemployment numbers -- Tony.
HARRIS: OK, Elaine. And if I'm correct, we had a bit of a preview of this speech yesterday when the president was in Illinois. He talked about lower inflation, interest rates, and a low national unemployment rate.
So, I'm suspecting we'll hear more of that in just a couple of minutes.
QUIJANO: That's absolutely right. The president yesterday visited Peoria, Illinois, in the Midwest, visiting the headquarters of Caterpillar, which makes earth-moving equipment. And the president was essentially saying that this was an example of a company that has benefited under his watch, under his economic ideas, and primarily pushing this initiative of free trade. Certainly, that's something we've heard the president talk about quite a bit.
So, today you'll likely hear some of that as well. The president and the White House, though, really looking at this as a more formal sort of address, if you will. And you can tell by the very venue there, a more formal setting, as the president tries to push an economic message that privately his aides concede has been drowned out largely by Iraq -- Tony.
HARRIS: Our White House correspondent, Elaine Quijano, in New York City this morning. Well, Americans may see the state of the economy as good, but most folks aren't giving President Bush credit for it. CNN-Opinion Research Corporation polls this month show 63 percent, almost two- thirds of Americans, say economic conditions are good, but only 43 percent, fewer than half, approve of how President Bush is handling the economy.
And of course we will take you back to Federal Hall in New York City when the president begins his address.
COLLINS: New questions about Iran's possible involvement in Iraq and whether Tehran had a role in an attack on U.S. troops. A U.S. official says military investigators are looking into whether Iranians were involved in a daring ambush in Karbala. Five U.S. soldiers were killed.
An official from another government agency says possible Iranian involvement is a leading theory in the investigation. But both officials stress this is a preliminary view and there has been no final conclusion. Concerns about possible Iranian involvement stem from the level of sophistication and coordination behind the attack.
A country in crisis, a leader possibly in peril. Iraqi prime minister Nuri al-Maliki sat down with an exclusive interview with CNN's Michael Ware. The Iraqi leader concedes his country is reeling from violence and volatility, but he insists with Washington's help, it can be pulled back from the precipice.
(BEGIN VIDEO CLIP)
NURI AL-MALIKI, IRAQI PRIME MINISTER (through translator): One of the major issues for President Bush's plan, which we consider support to our Baghdad security plan, is the extent to which there is a need for additional troops, American and multinational, to support the operations. And we agree this will be assessed by those in the field, the military commanders. And if their assessment is for more, we will ask for these troops.
But we believe that the existing number, with a slight addition, will do the job. But if there seems to be more need, we will ask for more troops.
We don't want to rule a (ph) force. And we have announced that future operations will not only be military, but will also have political efforts on its side, national reconciliation efforts and the containment efforts.
We do not want to kill the people and drown the country in blood. And we welcome every step that brings a setback for the militias or terrorists and a desire to join the political process so we can minimize the losses and blood. But, this all has to happen under the umbrella of national will, the government, and the law.
(END VIDEO CLIP)
COLLINS: Al-Maliki, who's been accused of showing favoritism toward a radical Muslim cleric, vows to apply that law equally to everyone.
HARRIS: Miami planning to party after the death of Fidel Castro. The Cuban leader apparently saying not so fast. There are new pictures of the ailing president, the first we've seen in months.
CNN's Morgan Neill has more.
(BEGIN VIDEOTAPE)
MORGAN NEILL, CNN INTERNATIONAL CORRESPONDENT (voice over): Three months after disappearing from sight, Fidel Castro is back.
In this new video, the ailing 80-year-old Cuban leader is on his feet greeting Venezuelan President Hugo Chavez. His voice is weak, but the message is clear. This is far from a lost battle, he says. The video lasting some 10 minutes shows Castro and Chavez discussing everything from climate change to what the Venezuelan leader called the threats from the empire, a reference to the United States.
Chavez says the video was shot during an unannounced visit Monday afternoon. Wednesday marks six months since intestinal surgery forced Castro to transfer power to his 75-year-old brother Raul. With or without the new images, many Cubans say they have more pressing things to worry about than politics.
"I have so many things on my mind," she says. "I haven't been able to think whether there are changes or not."
Both inside and outside Cuba, the president's health is a constant source of speculation. Most recently the Spanish newspaper, "El Pais" reported he had three failed operations to deal with diverticulitis, inflammation of a pouch in the intestinal wall. This has not been confirmed.
The latest video will do little to clear up uncertainty about just who is making the decisions. Acting President Raul Castro, or Fidel Castro, from his bedside? Raul is officially in charge, but analysts say at this point he is not likely to make decision that is would directly contradict those of his brother.
While Miami erupted with celebrations when Castro transferred power in July, the streets of Havana have remained calm. Analyst Hal Klepak says there's good reason for that.
HAL KLEPAK, ROYAL MILITARY COLLEGE: Cuban s are not surprised by whatever, Miami or Washington or capitals thinks. They see more stability not less in the sense of here is what was said was going to be happening. It is happening, but without the absence of this 47 years ruler.
NEILL (on camera): And so, six months after President Fidel Castro was forced to hand over power, it's a sense of continuity, not of change, that's most striking. And it's likely to say that way as long as new videos like the most recent ensure that he remains in the picture.
Morgan Neill, CNN, Havana.
(END VIDEOTAPE)
HARRIS: And still to come, trouble with tourism. Long lines and delays all part of the post-9/11 world. The cost of security in tourist dollars, that's ahead in the NEWSROOM.
COLLINS: A deadly propane blast in West Virginia. The search for clues and more victims coming up here in the NEWSROOM.
We want to go live now to President Bush, speaking from Federal Hall in New York City on his economics.
Let's listen in.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Ladies and gentlemen, the state of our economy is strong.
(APPLAUSE)
And with the hard work of the American people and the right policies in Washington we're going to make it even stronger.
Mr. Mayor, thanks for being here. I appreciate you coming. You're -- you're doing what the people want you to do, and that is to lead this city.
I appreciate, Bill Ruden (ph) -- thanks for having me, Bill. Good to see you again.
I want to thank members of the Congress who have joined us -- Peter King, Vito Fossella, Carolyn Malone, and Tom Reynolds.
Thanks for flying down with me today. Want a ride back?
(LAUGHTER)
Mr. Mayor, David Dinkins, thank you for being here. Proud you're here.
And it's good to see my buddy, Mayor Ed Koch.
Mr. Mayor, thank you for coming. Appreciate you being here.
(APPLAUSE)
I thank the members of -- for the Association of a Better New York who have joined us.
I appreciate all the state and local officials who are here.
Bill mentioned that I was here in October, 2001. I recognized then that our economy had been hit hard and there was great uncertainty about the future. It was tough times for country. Many people were out of work and by mid-December, nearly a million jobs had been lost. The collapse of the twin towers had left dangerous cracks in this building's foundations.
I said that day that I was optimistic that our economy would recover from these attacks. But if I had told you we'd also make the recession one of shortest on record, that we'd have confronted corporate scandals, absorb a tripling in the price of oil, fight a global war, and help a whole region of our country recover from a hurricane, you might have been a little skeptical.
Yet, America's economy has overcome all these things. Federal Hall has been fully restored. It's on solid ground. And so is the New York economy. As the mayor mentioned, it's booming, with bond rating at an all-time high and unemployment at an all-time low.
Across our nation, small businesses and entrepreneurs are creating millions of new jobs. Retail sales are up, consumer spending is strong, exports of goods and services have jumped by nearly 35 percent. The Dow Jones has set new records 26 times in the last four months the.
Productivity is strong, and that's translating into higher wages. When people across the world look at America's economy, what they see is low inflation, low unemployment, and the fastest growth of any major industrialized nation.
The entrepreneurial spirit is alive and well in the United States. There is one undisputed leader in the world in terms of economy, and that's the United States of America.
(APPLAUSE)
On Wall Street, you know that America's economic leadership rests on strong and flexible capital markets. Capital markets connect entrepreneurs with the investment they need to turn their ideas into new businesses.
America's capital markets are the deepest, the broadest, and the most efficient in the world. Yet, excessive litigation and overregulation threaten to make our financial markets less attractive to investors, especially in the face of rising competition from capital markets abroad. To keep America's economic leadership, America must be the best place in the world to invest capital and to do business.
One important step we've taken in Washington is to pass litigation reform like the Class Action Fairness Act. It's important for people in Congress to understand that excessive lawsuits will make it hard for America to remain the economic leader that we want to be.
Another important step we've taken is to strengthen our business institutions by passing the Sarbanes-Oxley Act in 2002. This law helped boost investor confidence by establishing high standards for transparency and corporate governance.
The principles of Sarbanes-Oxley are as important today as when they were passed, yet complying with certain aspects of the law, such as Section 404, has been costly for businesses and may be discouraging companies from listing on our stock exchanges. We don't need to change the law. We need to change the way the law is implemented.
America needs a regulatory environment that promotes high standards of integrity in our capital markets and encourages growth and innovation. And I'm pleased at the progress that Hank Paulson and Chairman Christopher Cox are making to make sure the regulatory burden is not oppressive and fair and helps us meet a great national objective to keep the United States the economic leader in the world.
Our economic leadership also depends on sensible pro-growth tax policies. To help bring our economy out of a recession and recover from September the 11th, we cut taxes on the American people.
We cut taxes on everybody who pays income taxes. We doubled the child tax credit. We reduced the marriage penalty. We cut taxes on small businesses. And we cut taxes on dividends and capital gains.
There was a lot of political debate about these tax cuts. But here are some of the facts.
Since we enacted major tax relief into law in 2003, our economy has created nearly 7.2 million new jobs. Our economy has expanded by more than 13 percent. That expansion is roughly the size of the entire Canadian economy. This economic growth has led to record tax revenues which has helped us cut the deficit in half three years ahead of schedule.
One fact should be clear when you look at the statistics. The fastest way to kill a recovery would be to raise taxes on the people who created it. Now is not the time for the federal government to be raising taxes on the American people.
(APPLAUSE)
We must ensure that the money you spend in Washington is spent wisely.
Next Monday I'm going to submit to Congress a budget that will eliminate the deficit by 2012. In order to do so, we need to set priorities in Washington. You can't try to be all things to all people when it comes to spending your money if you want to keep taxes low, keep the economy growing and balance the budget.
And my number one priority is to protect this country. And we're going to make sure our troops have all the equipment they need to do the job we sent them to do...
(APPLAUSE)
... and make sure our citizens have what it takes to defend this homeland.
That means we've got to be careful about how we spend money in other areas.
One thing we can do to show the American people that we're going to be smart about how we spend their money is to do something about earmarks. It's that system of appropriations where things end up being spent even though nobody's voted on them. And I'm going to work with Congress to reduce the amount of earmarks and the number of dollars spent by earmarks in a significant way to earn the trust of the taxpayers of this country and at the same time be wise about how we spend their money.
I believe I need a line-item veto to help Congress spend money wisely, so I put forth a plan that says the legislative branch and the executive branch will work together to eliminate wasteful and unnecessary spending. We're about to pass a farm bill that provides a strong safety net while tightening spending and cutting subsidies.
We can manage the short-term deficit, and I look forward to working with Congress to do so. But it's important for Congress to understand there are unfunded liabilities inherent in Social Security and Medicare that we need to do something about now. And I understand it's tough work. It requires political will from both the president and the Congress to come together and solve this problem.
I'm hopeful that we can set aside needless politics and address the issues with entitlements in a constructive way. That way, people will say they came to Washington and they did the job we expect them to do.
Our growing economy is also a changing economy. The rise in new technologies, new competition, and new markets abroad is bringing changes, and these changes are coming faster than ever.
There was a time that most people expected they'd keep a job for life. Now the average American has 10 jobs before the age of 40. It used to be that a company's name would stay the same for decades. New companies are now -- now companies are merging and splitting and creating new names and new stock symbols.
Some of us can still remember when cell phones were the size of bricks and considered a luxury. Now they fit in your pocket, they take photos, they play music, and every teenager in America has one, it seems like.
By and large, our dynamic and innovative economies helped Americans live better and more comfortable lives, yet the same dynamism that is driving economic growth is also -- can be unsettling for people. For many Americans, change means having to find a new job or to deal with a new boss after a merger, or to go back to school to learn new skills for a new career. And the question for America is whether we treat the changes in our economy as opportunities to help improve people's lives or as an excuse to retreat into protectionism.
I believe that the changes present us with historic opportunities. America's growing economy allows us to approach them from a position of strength. And so today I'm going to discuss actions we should take to make America's economy more flexible and dynamic in four areas: trade, health, energy, and education.
First, we can make our economy more flexible and dynamic by expanding trade. America is about five percent of the world's population. And that means 95 percent of our potential customers are abroad. Every time we break down barriers to trade and investment, we open up new markets for our businesses and our farmers. As we improve free trade, consumers get lower prices. There are better American jobs. You see increased productivity. Jobs supported by exports of goods pay wages that are 13 percent to 18 percent higher than the average.
So one of our top priorities has been to remove obstacles to trade everywhere we can. When I took office, America had free trade agreements with three countries. We have free trade agreements in force now with 13 countries and we have more on the way. These agreements are leading to direct benefits for America's businesses and, equally importantly, America's workers.
Yesterday I went to the Caterpillar plant in Peoria, Illinois. That's where they make big bulldozers. Folks there told me that Caterpillar now exports more than one-half of the products they make.
COLLINS: We are listening to President Bush talk about the economy here at Federal Hall on Wall Street. Interesting that this was the location or venue, if you will, that he choose, because if you do remember, he made mention of visiting Federal Hall and giving a speech shortly after September 11th and trying to assure business leaders that the economy would bounce back.
He returns today to talk a little bit about that, lowering taxes and decreasing dependence on foreign oil, the unemployment rate, gross domestic product, all sorts of things that we would like to talk more about in just a moment. So stick around for that.
HARRIS: And Heidi, we're getting some reaction already to the speech, reaction from New York senator Chuck Schumer to a speech he couldn't have heard.
Chuck Schumer is the chairman of the Joint Economic Committee. He is out with a comment this morning on the president's economy speech. Here's what he had to say a short time ago.
(BEGIN VIDEO CLIP)
SEN. CHARLES SCHUMER (D), NEW YORK: No one is happier than we are that we had a nice quarter. But if you spend time out in middle class America, if you descend from the 30,000-foot level to the communities of Main Street, you know that all is not well with the middle class. The basic successes and aspirations of middle class life -- raising a family, buying a home, paying for college, saving for retirement and healthcare -- are becoming intimidating hurdles for average, ordinary people.
(END VIDEO CLIP)
COLLINS: Now a little more on President Bush's speech and the state of the economy.
Let's go ahead and bring in CNN's Ali Velshi, live from New York.
Hey, Ali, you know, it is kind of interesting that just last week the president gave the State of the Union but didn't really talk a whole lot about the economy.
ALI VELSHI, CNN CORRESPONDENT: No. NO, absolutely right.
And last year's State of the Union was a lot of talk about energy. But the interesting thing is the economy has been chugging along nicely.
President Bush actually cited a number of figures about job creation and growth and things like that that are helping him along. In fact, it's often been a thought that the president might emphasize more about the economy. It's one of the areas where his approval rating is actually increasing.
COLLINS: Right.
VELSHI: He did cite the things that we know about -- growth; record unemployment, 4.5 percent; 7.2 million jobs created since 2003. What he didn't mention is about three million manufacturing jobs have been lost to overseas.
Interesting comment that he made. First of all, he talked about wanting a line-item veto for budgets. Presidents, as you know, always ask for a line-item veto.
COLLINS: Yes. He's been asking for that for a long time.
VELSHI: That's kind of stock. But one thing he mentioned, a provision in the Sarbanes-Oxley bill.
You'll remember Sarbanes-Oxley came up as a result of the scandals, the accounting scandals, Enron, WorldCom, all of those. And he mentioned Provision 404 of Sarbanes-Oxley and why that might need to be changed.
Here's what this is about. As U.S. companies are competing in the world, a number of companies have complained that Sarbanes-Oxley, this bill that was brought in to make companies more accountable for their accounting and make the accounting more transparent to the investors, is onerous. It's expensive and it's hard to keep up with.
And President Bush specifically making reference to one clause having to do with accounting in Sarbanes-Oxley that he thinks needs to be changed so that American companies aren't sort of held down by accounting laws. Now, that's subject to various opinions.
But basically, President Bush saying the economy is really good. You'll remember on -- just after September 11th, President Bush went to Federal Hall to talk about the fact that the economy was going to be OK. This is kind of full circle. He's coming back all these years later saying it really is OK.
COLLINS: Yes. And so we heard him talk a lot about the gross domestic product, the unemployment rates, wages going up.
What about consumer confidence? Do all of those things that are supposed to be positive, are people noticing enough so that they're going out and buying more and feeling confident in their -- I guess their own personal finances?
VELSHI: You know, Heidi, to trip up the American consumer, to stop them from spending, you have to punch them in the nose, tie them up, and, you know, put security guards them. Americans don't stop spending.
However, this past holiday season was unusual in that all of this -- these interest rate increases, housing price decreases and gasoline price increases that Americans have suffered actually did show up in how people spent. They spent less over this Christmas holiday than they were expected to spend.
So, you know, fundamentally, it's about interest rates, it's about jobs, and it's about house prices. And two of those three are a little uncertain right now. The jobs picture is good, but the housing -- you know, the housing price situation is muddling along. And as you know, 2:15 today Eastern Time we've got the Fed decision.
COLLINS: Right.
VELSHI: So you know, it's not entirely clear that the American consumer can keep on going if interest rates are high, if house prices are low, and if energy prices continue to go up.
We saw a spike this week in oil prices. That's going to make its way to the gas station. So, consumer confidence is not as strong as it could be. Fundamentally, the American consumer believes what President Bush is saying, that the economy is strong.
He started his speech by saying the state of our economy is strong. They believe that. And they actually give him credit for having something to do with that. But they're not as certain about it. The first few months of the year will tell us more.
COLLINS: What about the tax cuts, Ali? I mean, Bush's tax cuts in the beginning really met with some people criticizing that as to really not the way to make the economy stronger.
VELSHI: Yes.
COLLINS: And now is today sort of hey, I told you so?
VELSHI: Yes. He gets to say that. And that's the interesting thing. President Bush has been touting these tax cuts that he introduced and they were some of the biggest tax cuts in history.
He's sort of saying that a lot of that is why we are where we are today. That may be true, may not be true. Economists disagree on what that is. Right now, we've got record levels on stock markets. It's unclear as to why Americans feel rich.
Fundamentally, whether it's tax cuts, doing better in the stock market, your house price going up, or inflation staying under control, if you think you have more money to spend and you're going to have a job, you will spend. So, tax cuts might well be a big part of that. Some economists believe it's the best thing that can ever happen. President Bush at least for now saying now I did it and we have a good economy as a result.
COLLINS: Fed not expected to raise rates today, are they?
VELSHI: Not at all. That will be a surprise. I'm going to be here for that and let the producers know. If they you raise rates at the Fed, you can put one of those fancy breaking news thing on.
COLLINS: We don't have enough of that here on this show.
VELSHI: I want my own breaking news.
COLLINS: We'll try to do that. Ali Velshi, thanks for that.
HARRIS: Hey and Heidi, very quickly, we want to update a situation we've been telling you about at least for the last hour or so. We told you about Boston police shutting down a portion -- the state police there in Massachusetts shutting down the northbound lanes of Route 93 there because of a suspicious package.
Here's a look at some of the pictures from earlier. That package was found hanging from one of the support beams of the road and it was called in as having wires and tubes attached to it.
Here's the update. The package, of course, was detonated. I guess you'll see that in a second. The package was detonated a short time ago. Here's the update. The package, having been analyzed, contained an electronic circuit board with components that were consistent with an improvised explosive device. But no explosives were found. And since that time, Route 93 northbound has been reopened. But an interesting late development on this story out of Boston that we've been following for you this morning.
COLLINS: Raid in Birmingham, England. Scotland Yard says terrorists targeted a British soldier. The torture plot and live police briefing coming up next in the NEWSROOM.
HARRIS: Making the most of melting ice.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I was going to say, we could stand here and watch the ice melt, but that's going to take a while, isn't it?
UNIDENTIFIED MALE: How much time do you have?
(END VIDEO CLIP)
HARRIS: A state's loss may be a park's gain and a money saver. How about that for taxpayers? That story ahead in the NEWSROOM.
(COMMERCIAL BREAK) HARRIS: A terrifying potential crime broken up in a counterterrorism raid today. That's how British police are characterizing the arrests of nine suspects captured in raids in Birmingham, England. A security source tells CNN the plot, if carried out, would have involved a chilling new tactic. The source says the suspects planned to kidnap a British Muslim soldier serving in Afghanistan. He was to be tortured and beheaded with the grisly scene playing out on the Internet.
(BEGIN VIDEO CLIP)
DAVID SHAW, ASSISTANT CHIEF CONSTABLE, WEST MIDLANDS POLICE: Today's operation is a combination of many months of activities and the work of many officers and people from other agencies. But that meticulous planning, which I think we have seen today, has given us the confidence to ensure that we've taken the right action. This confidence includes a very thorough briefing of all our offices to ensure that we fully recognize the sensitivities of what we're trying to do across all our communities, and that includes the suspects and their families.
(END VIDEO CLIP)
COLLINS: Security and scrutiny. The U.S. losing billions of dollars because of post 9/11 travel rules. More now from CNN homeland security correspondent Jeanne Meserve.
(BEGIN VIDEOTAPE)
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice over): This Kuwaiti man vacationing in Dubai wouldn't consider traveling to the U.S. because getting a visa is such a hassle.
UNIDENTIFIED MALE: It's too tough, there, the arrangements.
MESERVE: He is not alone. According it a new survey by a U.S. travel industry coalition, obtained by CNN, tourists and business travel to the U.S. from countries other than Mexico and Canada has plummeted 17 percent since 9/11. The cost to the U.S. economy, an estimate $94 billion in sales, and more than 200,000 new jobs.
GEOFF FREEMAN, DISCOVER AMERICA PARTNERSHIP: This is a competition, and we're losing.
MESERVE: The travel coalition claims immigration checkpoints at U.S. airports are understaffed, resulting in long waits and rude service, and then there's security.
FREEMAN: Those international travelers will tell you that they find that they're treated like criminals. That they're barked at by U.S. officials. They simply feel unwelcome.
MESERVE: In Brazil it can take as long as 79 days to get an interview for a visa to the U.S., according to the State Department. To shorten long waits like that, the head of the Marriott Hotel chain wants more money spent on technology and staff for consular offices and immigration checkpoints.
J.W. MARRIOTT JR., MARRIOTT INTERNATIONAL: We need to be able to balance things out. We just cannot become an isolated country that closes its doors to people that want to come here.
MESERVE: The industry also wants more countries admitted to the visa waiver program, which allows travel to the U.S. without a visa.
MICHAEL CUTLER, CENTER FOR IMMIGRATION STUDIES: The bottom line is they're motivated by greed, but I think they're being very short- sighted.
MESERVE: Cutler and others believe the visa waiver program should be abolished, because it has been exploited by terrorists like British shoe bomber Richard Reid. The travel industry response? It wants security, but it wants more business, too. Jeanne Meserve, CNN, Washington.
(END VIDEOTAPE)
COLLINS: CNN Security Watch keeps you up to date on safety. Stay tuned day and night for the most reliable news about your security.
HARRIS: A new, though not unexpected face in the race, Democratic Senator Joe Biden of Delaware has filed papers with the Federal Election Commission, opening his presidential campaign. Here's where he stands on the issues. Biden supports abortion rights, he opposes a constitutional amendment banning same-sex marriage, and he opposes President Bush's plan to divert some payroll taxes into private accounts.
On the critical issue of Iraq, the six-term senator voted for the use of military force there, but now supports a more limited mission. He also opposes the president's plan to send more troops.
(BEGIN VIDEO CLIP)
SEN. JOSEPH BIDEN (D), PRESIDENTIAL CANDIDATE: What I'm trying to do is stop an escalation of a war that everyone acknowledges can only be settled by a political settlement among Iraqis. More American forces, more American forces will not be able to change the Iraqi mentality. They need to get together for a political solution.
(END VIDEO CLIP)
HARRIS: Biden says his plan will allow most U.S. troops to withdraw from Iraq by the end of the year.
(WEATHER REPORT)
(NEWSBREAK)
(COMMERCIAL BREAK)
HARRIS: A search at sea for a pioneering computer scientist. Sixty-three-year-old Jim Gray was last seen boarding hit yacht on Sunday. Gray is a mayor player for Microsoft. He's credited with devising the computer technology behind ATM's and online shopping. The Coast Guard is searching a 16,000 square mile area between San Francisco and the Faralan (ph) Islands. Gray had reportedly set sail to the islands to scatter his mother's ashes.
(BUSINESS HEADLINES)
HARRIS: And still ahead, making the most of melting ice. A state's loss may be taxpayers' gains. That story straight ahead in the NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Soon as you know you're back in the NEWSROOM, 1:00 p.m. Eastern time this afternoon, Kyra Phillips here with a preview.
KYRA PHILLIPS, CNN ANCHOR: He always has so much energy. It scares me sometimes. He's so excited. I'm glad that I excite you like this, Tony.
HARRIS: Welcome to Heidi's world here.
COLLINS: You have no idea.
PHILLIPS: All right. Well, a number of stories actually on a much more serious note. Marked for death? Well a Florida sheriff's wife calls to report intruders moments before she's fatally shot. Then three others are also dead in what's being called a targeted attack. We're following up to find out more on who done it and why. It's an interesting investigation.
Also, waiting to exhale on Wall Street, a Fed announcement due on interest rates, 2:15 Eastern time. We'll going to take it all live. Ali Velshi, who's always tons of fun on sometimes very boring issues, he brings them to life. Well he joins us with the fine print on what it means for your bottom line.
All that and the day's top news stories in the NEWSROOM. And I'll get started at 1:00 Eastern, as you know, because the two of you are always watching until 4:00 p.m. and Wolf Blitzer.
COLLINS: We are.
HARRIS: You better know it.
PHILLIPS: I know, continuation, love you both.
COLLINS: Thanks, Kyra.
HARRIS: All right, Kyra.
Hey, the state of Florida losing cold cash to store ice. So it's giving it away? As our John Zarrella reports, this deal is going fast.
(BEGIN VIDEOTAPE)
JOHN ZARRELLA, CNN CORRESPONDENT (voice over): The folks in the town of Minneola, not far from Orlando, don't have to buy ice.
UNIDENTIFIED MALE: I don't want to take anything extra that's going to go to waste. I just want to take what I can use. And I can use ten bags in the freezer.
ZARRELLA: It's free. At least until it melts.
UNIDENTIFIED MALE: Hey, (INAUDIBLE), you like playing with ice when you were a kid?
ZARRELLA: Minneola's mayor, David Yeager, is being charitable, while also helping out Florida taxpayers. That's because for the last year they've been paying $90,000 a month to store ice.
The state has some 200 truck loads of ice to get rid of. On each truck there are 22 pallets of ice. And on each pallet, some 360 bags.
After two brutal hurricane seasons that saw even the president and his brother, then Florida's governor, handing out ice . . .
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Can I give you some ice?
ZARRELLA: This past hurricane season, state officials were determined to have plenty on hand. It sounded like a great idea. Only one problem -- no hurricanes hit. So now, before the ice goes bad, the state is giving it away to any municipality for non-profit that wants it.
CRAIG FUGATE, FLORIDA DIVISION OF EMERGENCY MANAGEMENT: We're reaching the point where if we don't get people to take it, and we've had a few, not a lot, but a few people that had some use for that, then what we'll do is let it go ahead and melt.
ZARRELLA: Which is exactly what's happening back in Minneola. The mayor ordered 15 truck load. Some went to the residents, but most came here, to a park.
I was going to say, we could stand here and watch the ice melt, but that's going to take a while, isn't it?
MAYOR DAVID YEAGER, MINNEOLA, FLORIDA: How much time do you have?
ZARRELLA: Drought has left the area bone dry, the water table low. The mayor's idea wasn't based on any science, just a thought.
YEAGER: I thought it was a great opportunity to let it seep into the aquifer and, in the big scheme of things, will 70,000 gallons do anything? Not truly, but it's my little helping hand.
ZARRELLA: As for the state, it's out of the ice business. Bottled water will be stockpiled instead. John Zarrella, CNN, Minneola, Florida.
(END VIDEOTAPE)
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