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Iraq Report Card; Debate Over U.S. Troop Presence in Iraq Rages Also in Baghdad

Aired July 12, 2007 - 14:00   ET

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

DON LEMON, CNN ANCHOR: It's a snapshot, a yardstick, a sword and a shield. A progress report from the Bush administration on 18 benchmarks for Iraq. Is eight out of 18 progress?
FREDRICKA WHITFIELD, CNN ANCHOR: Another report concludes al Qaeda is just as big and bad as it was before the wars in Afghanistan and Iraq. The Bush administration defends the war on terror.

LEMON: Hello, everyone. I'm Don Lemon, live at the CNN world headquarters in Atlanta.

WHITFIELD: And I'm Fredricka Whitfield, in for Kyra Phillips.

You are in the CNN NEWSROOM.

LEMON: President Bush says progress toward meeting several so- called benchmarks in Iraq is cause for optimism. But opponents of the war are seizing on the failures of Iraq's embattled government. Mr. Bush says he needs until September to fully evaluate his strategy. He's calling on Congress not to play commander in chief.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I don't think Congress ought to be running the war. I think they ought to be funding our troops. I certainly am interested in their opinion, but trying to run a war through resolution is a prescription for failure as far as I'm concerned, and we can't afford to fail.

I'll work with Congress. I'm listen to Congress. Congress has got all the right to appropriate money, but the idea of telling our military how to conduct operations, for example, or how to, you know, deal with troop strength, it's -- I don't think it makes sense. I don't think it makes sense today, nor do I think it's a good precedent for the future.

(END VIDEO CLIP)

LEMON: Reaction from Capitol Hill. Senate Majority Leader Harry Reid not impressed with claims of progress on the security front. Senate Republicans saying the troop surge, what they call the troop surge, is turning things around.

More from Washington now and CNN's Brianna Keilar.

Hi, Brianna. BRIANNA KEILAR, CNN CORRESPONDENT: Hi there, Don.

Well, this is the report put out by the White House. Everyone is reading the same report, but, you know, judging by the responses to it, you might wonder.

The White House, glass half full. Democrats, their glass half empty. Republican leaders admit they are not happy with the progress, but we heard Mitch McConnell, Republican leader in the Senate, as well as Senator Lindsey Graham, urging their colleagues to wait for the final report from General David Petraeus in September.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: We have made mistakes, but the worst mistake is yet to come. The worst mistake would be to change strategy at a time when it is beginning to show dividends.

(END VIDEO CLIP)

KEILAR: But the Democratic leadership says it's time to take action now and not wait until September.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), ILLINOIS: The president says we need to be patient and we need to wait. Every day that we wait, every week that goes by, another month means more American soldiers who will be killed and injured in this war that has gone downhill for so long. It is time for us to start bringing these troops home.

(END VIDEO CLIP)

KEILAR: The White House says, yes, the Iraqi government is lagging on political accomplishments, but political progress will follow military progress. And it's the military benchmarks where the Iraqis have made some strides.

But we heard from Democratic senator Patty Murray. She responded saying that violence won't end until Iraqis take control of the country. So it's the proverbial question of which came first, the chicken or the egg -- Don.

LEMON: And what about Republicans, Brianna, who are breaking ranks with the president's Iraq strategy? How are they reacting to this report?

KEILAR: And that's really the question. That's the major question at this point that is still unanswered, these growing ranks of Republicans who are breaking with the president's Iraq strategy, but maybe they aren't walking right in line with Democrats and what they call a precipitous withdrawal. What do they think about this report? We're just going to have to stay tuned, because at this point we haven't heard from them.

LEMON: All right. CNN's Brianna Keilar. Thank you for your report, Brianna.

WHITFIELD: Well, depending on who is speaking, the benchmark report fills the argument that the current Iraq strategy is showing signs of progress, or that it's failing. That division is equally evident in the heart of the war zone.

CNN's Hala Gorani is in Baghdad.

(BEGIN VIDEOTAPE)

HALA GORANI, CNN INTERNATIONAL CORRESPONDENT, (voice over): Should the Americans stay or go? The debate rages on in Washington and across America and also here on the streets of Iraq, where the effects of a pullout would be most felt.

In a block of apartments in central Baghdad, a mixed Sunni-Shiite couple at war in Iraq's bloody sectarian conflict here, a family. Monged Alnaieb, a Sunni, his wife, Shiite. They agree, U.S. troops should stay to fix the chaos, they say, the occupation has created.

MONGED ALNAIEB, BAGHDAD RESIDENT: If they leave today, you know, the militias now take control of the country. There is no -- neither the American or the Iraqi soldiers or the police.

GORANI: Their three sons can't walk freely in a Shiite neighborhood anymore. Their son had a typically Sunni name, so they changed it to Ahmed (ph) so that his I.D. card would not give him away.

Elsewhere on the streets of Baghdad, though, there is no shortage of people who say American troops should leave and leave now. "Well, because they did not provide us security," this passerby says. "They came and destroyed the country, nothing less, nothing more. It was them who started sectarianism."

This man says he's grateful the U.S. removed Saddam Hussein, but that everything they've done sense has hurt his country.

"It is true, when they first came, they got rid of the Baathists. They got rid of them, but they didn't provide us with the security and stability in Iraq. They destroyed the Iraqi economy."

Back at the apartment complex, one floor down, I visit a Shiite family. Munthar Nader used to be a cabdriver, but he was shot on the road between Baghdad and Mosul and his car was stolen. Despite the violence his family has suffered, he says the Americans should stay.

MUNTHAR NADER, BAGHDAD RESIDENT: If I don't see U.S. forces in front of me, I feel scared. Honestly, I feel scared because the terrorists are afraid from U.S. forces, along with Iraqi forces. So I would prefer for them to stay.

GORANI: Munthar's brother was killed last year and he now takes care of his orphaned nephew and niece, including young Hidar (ph), sitting quietly on his knees. For Munthar's mother, whether the U.S. military stays or goes it matters little today.

"My dearest son to me was killed and he is my son. Now I do not care about anything. His children have become orphans."

Above the television, a picture of a dead son, and the hopeless realization no political benchmarks or military strategy will ever bring him back.

(END VIDEOTAPE)

WHITFIELD: And now Hala joins us leave.

Hala, we've been talking about the Iraqi assessment report here in the states coming out. How aware are the people in Iraq of these benchmarks?

GORANI: Well, if you're asking specifically about the benchmarks included in the report, those 18 points that are designed to measure progress as far as the Iraqi government is concerned, not so much. Really what is on the minds of people on the streets of Baghdad, as you heard there in that story, is whether the U.S. military should stay or go, whether or not they feel secure, whether or not they feel like they can go back to the neighborhoods they felt they need to abandon because they were being targeted for being either Shia, Sunni, Kurd, Christian or what have you.

Before the war, these divisions didn't necessarily exist. Today, they're highlighted and they're creating very, very bitter sectarian battles -- Fredricka.

WHITFIELD: And so, Hala, meantime, the president says he's waiting for the full assessment report in September before even revisiting U.S. policy in Iraq, whether it's working or not or needs some rejiggering (ph). So based on what you are seeing there and what people are saying, how likely is it that conditions there would be any different then as opposed to now?

GORANI: Well, if you look at the major benchmarks, those that really matter, including legislation designed to unify and reconcile the Iraqi population, it is not looking likely. The parliament has extended its session until the end of July, but major, major draft legislation text hasn't even made it to the parliament floor.

So in August they're off. So you know these laws won't be passed.

As far as militia disarmament and the like, this isn't just over the summer that it's unlikely to happen. It's over the next few years that military analysts are saying that militias will continue to control local security in this country -- Fredricka.

WHITFIELD: All right.

Hala Gorani, thanks so much, from Baghdad.

And if you'd like to know more about the passing and failing grades assigned to those Iraq benchmarks, just visit CNN.com. We've got the administration's complete report on our Web site.

LEMON: Let's go live now to Michigan. This is Livonia, Michigan, these images you see courtesy of our affiliate there, WDIV in Detroit.

Look at that. Those cars stuck in water there. This is all due to a ruptured water main.

It was a massive water main break. It shut down the eastbound lanes of this interstate. This is interstate 96 in Livonia. Swamped at least five cars.

Several people had to be rescued from their cars. They were stranded there as the water rose close to the tops of their cars. They stood there and waited for rescue workers to get them.

Four feet deep in some places. The rupture occurred shortly after noon Detroit time. A 48-inch main on the freeway's service drive, which is above the sunken freeway, we are told, broke. The water supply has been shut off.

And just background here. The same rupture -- the same main ruptured back in 2003. occurred shortly after noon Detroit time. So you see all the problems it's causing there. Again, several people having to be rescued from a ruptured water main in Livonia, Michigan, near Detroit.

WHITFIELD: Meantime, it is a classified document just five pages long prepared for U.S. policymakers. The conclusion: al Qaeda is the strongest it has been at any time since the 9/11 terror attacks.

A senior government official who has seen the document tells CNN it focus it's on al Qaeda's use of remote areas of Pakistan as a safe haven. Homeland Security Secretary Michael Chertoff tells CNN the U.S. is working every day to counter al Qaeda's every move.

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: I think the real lesson here, and it's something we saw, for example, during the Cold War, is that we can never rest on our laurels. We have done a lot to secure this country over the last five years, and we've been fortunate, but also we've reaped the harvest of that in that we have not had a successful attack here.

But the enemy is continuing to change and adapt, and we cannot be static. And that's why as we go forward into this next year, I'm really urging people to take a close look at some of the additional security measures we're trying to put into place here.

(END VIDEO CLIP)

WHITFIELD: The new al Qaeda report remains classified. It was not issued in response to any specific threat, however.

LEMON: Flight crew suspicions about a passenger on an L.A. to London red-eye caused a jet to divert to New York. Passengers were taken off and federal agents questioned the man for hours. But apparently it was all a false alarm.

Flight 136 landed at JFK around 3:00 this morning. A flight attendant raised concerns that a passenger on the plane had bypassed security checks and might have used an employee entrance. Well, a short while ago, feds who questioned the man declared no laws had been broken. Several passengers talked about that scare.

(BEGIN VIDEO CLIP)

ALINA CHO, CNN CORRESPONDENT: So you didn't get the sense that people on board that flight were scared, concerned?

JENNI BAINBRIDGE, PASSENGER: No.

ROGER BAINBRIDGE, PASSENGER: No, no.

CHO: Maybe relieved that actually whatever it was, was discovered and caught.

R. BAINBRIDGE: Yes. I mean, it kind of -- it kind of makes you feel a little bit better about flying knowing that these things can get caught rather than more apprehensive, I would say.

J. BAINBRIDGE: I think also the fact that there were 12 police. You know, the fact that surround (ph) it. It made people feel safer. I certainly know that when you said "hijacker," I felt scared, and when all these police came on you felt protected.

(END VIDEO CLIP)

LEMON: Well, agents released the man who was questioned. The rest of the passengers had been booked on to other flights throughout the day.

WHITFIELD: Not guilty, that's what Kenneth Barnes stated this morning at his first court appearance in Erie, Pennsylvania. The 53- year-old says he had nothing to do with the bank robbery plot fours years ago that ended up killing his friend Brian Wells.

Before the bomb fastened around his neck exploded, around Wells' neck, Wells told police he was forced to take part in the robbery. But investigators now say Wells was in on it. A co-defendant, Marjorie Diehl-Armstrong, is due in federal court tomorrow. She is already in state prison for killing her boyfriend.

It's Iraq's report card, but it's a State Department concern. How can they bring up some of those unsatisfactory grades?

WHITFIELD: A Georgia woman's toddler got a little too talkative, apparently, and they both were grounded. Wait until you hear what the flight attendant said in between.

LEMON: Harry Potter, well, he doesn't even need an airplane. His latest movie is already soaring at the box office. You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

(NEWSBREAK)

(WEATHER REPORT)

LEMON: Mixed marks on Iraq's report card. Satisfactory on military benchmarks, but unsatisfactory for most of the political benchmarks. What will it take to bring up those grades? We'll ask one of the administration's senior advisers on Iraq straight ahead in the CNN NEWSROOM.

(COMMERCIAL BREAK)

WHITFIELD: I think it's time to head to Wall Street, where investors are having a big old party, and it's not even Friday yet.

Stephanie Elam is at the New York Stock Exchange with the numbers.

(STOCK MARKET REPORT)

LEMON: A talkative tot, well, gets a flight attendant's goat.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: As soon as we started taxiing he started saying, "Bye-bye, plane." She leaned over the gentleman beside me and said, "It's not funny anymore. You need to shut your baby up."

(END VIDEO CLIP)

LEMON: This mom still stewing over what happened next. Details straight ahead.

(COMMERCIAL BREAK)

LEMON: Hello, everyone. I'm Don Lemon live at the CNN World Headquarters in Atlanta.

WHITFIELD: And I'm Fredricka Whitfield in today for Kyra Phillips.

Eight satisfactories, eight unsatisfactories, and two incompletes. Would you be happy with that report card?

LEMON: Well, we'll get reaction from a top State Department official and find out where there's the most room for improvement.

You are in the CNN NEWSROOM.

WHITFIELD: The Bush administration's interim report on benchmarks for Iraq, like Iraq itself, it's promising in spots, discouraging in others. Here's some of the highlights. Of 18 goals set by Congress, the report calls progress on eight military benchmarks mostly satisfactory. On the political side, the assessment's not so rosy.

Who's to blame for the continued lack of security? The report says Iran and Syria both foster instability in Iraq with leaky borders and financial support for extremists. A White House spokesman describes the report with two words, "balanced and sober."

LEMON: Almost six years after 9/11, almost six years into the war in Afghanistan, and more than four years into the war in Iraq, what's the state of al Qaeda? Well, a U.S. government assessment concludes it's strong and it's getting stronger.

CNN's Justice Department Correspondent Kelli Arena reports.

(BEGIN VIDEOTAPE)

KELLI ARENA, JUSTICE DEPARTMENT CORRESPONDENT (voice-over): Despite bombing al Qaeda's strongholds in counterterrorism operations around the world, al Qaeda is regrouping, and is at it's strongest since the war on terror began. U.S. officials say that's the conclusion of a classified government report. It certainly seems to back up what Homeland Security Secretary Michael Chertoff has been saying.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: We do see some general trends that are concerning. We see the fact that they are training in certain parts of Pakistan, we see the fact that they have now reached into north Africa and they've got an affiliate in north Africa. We've seen over the last year increased activity in Europe.

ARENA: The secretary took a great deal of heat for saying it was his gut feeling that the U.S. was in a particularly vulnerable period.

SEN. JIM WEBB, (D) VIRGINIA: I would hope that someone who's the director of homeland security would have something else to offer us if he's going to be talking like that.

ARENA: So Chertoff had to spend time explaining what he meant.

CHERTOFF: We don't currently have specific, credible information about a particular threat against the homeland in the near future.

ARENA: Intelligence experts say al Qaeda has been able to find safe haven in the tribal areas of Pakistan.

JOHN KRINGEN, CIA DIR. FOR INTELLIGENCE: We see more training, we see more money, we see more communications, so we see that activity rising.

ARENA: What's more, the volume of messages from al Qaeda leaders has sharply increased.

DANIEL BENJAMIN, BROOKINGS INSTITUTION: But what it does tell us is that al Qaeda feels that it's -- it's in a pretty safe place for recording messages and distributing them. They certainly don't look like they're on the run.

ARENA (on camera): The FBI has put together a special group of agents and analysts to comb through current threat information and any leads to supplement work that's already being done in the field. That's just to be sure that nothing is missed.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

LEMON: All right Kelli, let's talk about al Qaeda and today's report on political and military progress in Iraq. Well, it's a mixed bag. The White House sees a half-filled glass and urges patience. Senate Democrats say waiting only costs American lives.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN, (D-IL) MAJORITY WHIP: The problem is that while we're waiting for the Republican senators to build up their political courage, the casualties are building up in Iraq. We've lost 3,611 American soldiers. The president says we need to be patient and we need to wait. Every day that we wait, every week that goes by, another month means more American soldiers who will be killed and injured in this war that has gone downhill for so long. It is time for us to start bringing these troops home.

(END VIDEO CLIP)

LEMON: David Satterfield joins us from Washington. He is the senior adviser on Iraq to the secretary of state. And Mr. Satterfield, how do you argue with that when you hear that the longer this goes on, the more American lives are lost and Iraqi lives as well?

DAVID SATTERFIELD, SR. ADVISER TO SECY. OF STATE: There's no question that the price that has been paid by Americans, by our brave men and women in the armed services, by our civilians serving in Iraq and of course by the Iraqi people themselves has been enormous.

But the price of success and the consequences of failure in Iraq for the United States, for our long-term interests, for the interests of our friends and allies, is considerable as well. We have not sugar-coated the situation in Iraq. The report that was submitted today is a frank, is an honest account of the challenges confronting Iraq and the challenges confronting the United States and our allies now and in the time ahead.

LEMON: But -- as we've been saying though, it seems like Republicans are seeing it as glass half-full. Democrats are saying it's glass half-empty. When you look at that report, what the report shows about the sectarian violence and about militias in Iraq, that there needs to be much more progress there, how do you argue with that? What do you say to that?

SATTERFIELD: We don't argue with the point. It is essential that there be more and more comprehensive progress made on fundamental political reconciliation in Iraq. Look, security measures alone, however successfully conducted, are not going to bring security or stability over the long term to Iraq. Only a political reconciliation will.

We're trying to provide the time and the space for Iraq's political leaders to do just that. We are asking for more time.

LEMON: OK, is this what you expected from this report or did you expect a better assessment at this time, Mr. Satterfield?

SATTERFIELD: We follow the situation in Iraq, we assess the situation in Iraq on a constant basis. The report reflects an accurate assessment of where we are.

LEMON: So this is -- this is not a disappointment to you?

SATTERFIELD: We would have obviously liked to have been able to report greater progress, particularly on political reconciliation. But we see the challenges facing Iraqis, we see the challenges facing the mission in Iraq. We've been frank about this with the American people and with the Congress, but we do believe there is the possibility for further progress if the time and space, the military surge has created, is actively pursued by Iraq's leaders. That's where we're focused.

LEMON: If you -- if you look at this report, it shows that the Iraqi forces seem to do well when we train them or when the Americans train them and buttress them, but once -- but left to their own or on their own, they don't do so well. What do we do about that with the number of forces who are already over there? How many more people can we send to back up the Iraqi forces?

SATTERFIELD: It's not a question of sending more Americans. It's a question of being given the time to continue the training missions already under way so that more Iraqi forces in more places are able to conduct operations, are able to conduct themselves as national forces without U.S. presence.

LEMON: OK, I want to get to this, too, because also Harry Reid, the Senate majority leader, spoke today talking about Iraq, talking about Osama bin Laden and talking about -- and calling this situation in Iraq an open-ended civil war. Let's take a listen.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, (D-NV), MAJORITY LEADER: al Qaeda is going stronger, but while Osama bin Laden is operating freely, we understand in the Afghan/Pakistan border, the president wants to keep our troops in an open-ended war, a civil war in Iraq.

It's really a travesty that Osama bin Laden is still at large, almost six years after 9/11, but it's not surprising that al Qaeda has been able to reorganize and rebuild because the administration has taken its eye off the ball when it comes to fighting terrorism.

(END VIDEO CLIP) LEMON: That's a Democratic response, and also the new report shows that -- a new intelligence report shows that al Qaeda is as strong as ever, yet the president today in a press conference said that it's not. How do you respond to that? Which way is it? Is al Qaeda as strong as ever according to the intelligence or is it not, according to the president? Which one is this?

SATTERFIELD: There -- there is no question that al Qaeda in Iraq has suffered significant setbacks over the course of the past six months as tribal elements, as elements formerly associated with the insurgency in Iraq have moved from targeting us, the coalition, to targeting al Qaeda. al Qaeda is on the run. They still remain formidable. I don't want to understate the case.

They are a challenge and a significant one, but they are diminished from the position they occupied just a few months ago. Anyone who travels to Anbar province can see for themselves the stark difference between the situation on the ground in cities like Fallujah and Ramadi and the situation a few months ago.

LEMON: OK, quickly, just -- the next report that's due, what do you expect to see from that in September? Hopefully, a better report than this one?

SATTERFIELD: We will be providing another frank, another honest appraisal based on the assessment of the 18 benchmarks Congress has set, but more importantly, based upon our own agregate sense of how our mission is going, what Iraqis are doing, what the path ahead should be.

LEMON: David Satterfield, thank you for joining us today in the CNN NEWSROOM.

SATTERFIELD: Thank you.

WHITFIELD: A one-time U.S. Supreme Court nominee may find herself on the other side of the law. Harriet Miers was a no-show today at a House Judiciary hearing where she had been subpoenaed to testify about last year's purge of federal prosecutors.

Sighting executive privilege, President Bush ordered his former White House counsel not to appear. The panel then voted 7-5 to move forward toward a possible House vote holding Miers in contempt of Congress.

LEMON: A denial today from President Bush's nominee for Surgeon General. Speaking at his Senate confirmation hearing, Dr. James Holsinger tried to rebut claims he's anti-gay. The charges stem from a paper 1991 paper Holsinger wrote declaring that the sexual practices of gay men caused an expansion of sexuality transmitted disease. Sexually transmitted disease I should say. He says that no longer represents his views.

(BEGIN VIDEO CLIP)

DR. JAMES HOLSINGER, SURGEON GENERAL NOMINEE: My point simply is is that I don't believe there's a place in my life as a physician to do anything that would be amicable to the health care of anyone regardless of their personal characteristics. The AMA has taken a strong position on this issue. As a AMA member I am proud of what we've done in trying to say that for physicians it is make no difference what a person's personal characteristics are. We want to take care of them.

(END VIDEO CLIP)

LEMON: Earlier this week, three former Surgeons General Richard Carmona, David Satcher and C. Everett Koop warned the Surgeon General's office has become increasingly politicized. Holsinger says he'd resign before he lets politics push aside science.

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WHITFIELD: Security threat or talkative toddler? A little boy's chatter leads to an unscheduled landing for a plane that had just left Houston for Oklahoma City. We get the story now from Rachel Kim, a CNN affiliate WSB in Atlanta.

RACHEL KIM, CNN WSB AFFILIATE: Kate Penland thinks her 19-month- old son Garen (ph) has a bubbly personality, but Kate says when they were aboard a Continental Express plane, heading to Oklahoma City from Houston, a flight attendant became annoyed by Garen's personality when he kept saying three words.

(BEGIN VIDEO CLIP)

KATE PENLAND, MOM, TODDLER KICKED OFF PLANE: As soon as we started taxing, he started saying bye-bye plane, and at the end of her speech she leaned over the gentleman beside me and said, it's not funny anymore. You need to shut your baby up.

(END VIDEO CLIP)

KIM: In disbelief Kate asked the woman if she was kidding. It was then Kate says the flight attendant went too far.

(BEGIN VIDEO CLIP)

PENLAND: She then said it's called baby Benadryl, and did the little -- and I said, well, I'm not going to drug my child, so you have a pleasant flight.

(END VIDEO CLIP)

KIM: Kate says when the other passengers began speaking up on her behalf, the flight attendant got angrier and soon announced that they were turning around, and that Kate and Garen were being taken off the plane.

(BEGIN VIDEO CLIP)

PENLAND: I was crying. I was upset. I kept thinking what am I going to do? I don't have anything with me, you know. I don't have any more diapers for the baby, no juice, no milk.

(END VIDEO CLIP)

KIM: The young mother said she later learned the flight attendant had told the pilot that she had threatened her, which Kate says never happened. ExpressJet Airlines released this statement to us regarding Kate's complaints. Quote, "We received Ms. Penland's letter expressing her concerns and intend to investigate its contents."

WHITFIELD: Yikes. Well, reporter Rachel Kim spoke to another passenger on that plane. That woman was quoted as saying, none of the passengers felt the boy was a problem and the mother never actually threatened the flight attendant, according to one of the other passengers on board. Ouch.

(COMMERCIAL BREAK)

LEMON: Stocks, look at that, they are soaring. The big board, what is that, 13,773. Well, this morning that was a record. The last record was set on June 4th, 13,676.32. We'll see where it closes, in a little over an hour from now, the closing bell. Of course, we'll get a wrap of all the action from our Stephanie Elam who is live at the New York Stock Exchange for us.

But first, two former rivals will soon join forces in Chicago putting pork bellies and government bonds under the same roof. We mention it because this particular merger will create one of the largest financial exchanges in the world.

Here is CNN's Kyung Lah.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): Welcome to Chicago's pit. Where futures are king and the traders have their own language, literally. Buy. Done. And thousands instantly change hands.

Today many, many more trades will take place here. That's because the Mercantile Exchange has charged with the Chicago Board of Trade. It's now the largest futures trading floor in the world, trading everything from gasoline to pork bellies.

PHILIP FLYNN, ALARON FUTURES AND OPTIONS: Everything that you buy or touch, eat, or sleep in or drive at some point, was traded on either the Merc or the Board of Trade. Just about everything.

LAH: Alan Matthew and his sequined jacket have been in the pit for 25 years.

Did you ever predict this when you started 25 years ago?

ALAN MATTHEW, CBOT TRADER: Never ever, ever, ever.

LAH: The merger of these two exchanges is a very big deal. CBOT and Merc have been cross-town rivals for generations. As unthinkable as the Cubs and White Sox as one team. The new exchange is also good for the economy. With thousands of high-tech financial jobs on the line. Analysts say because of the size of the new mega exchange, brokerages will stay here, attract more competition, employing more traders and support staff.

Plus, the prices of products you buy will still be set right here, in the U.S.

FLYNN: This is huge. I think it's going to be a big boom for the U.S. economy.

LAH (on camera): Officially these votes still have to be tallied, but for all intents and purposes, this is a done deal. A lot of these traders here they believe it's a good deal.

Kyung Lah, CNN, Chicago.

(END VIDEOTAPE)

WHITFIELD: The president's assessment of progress in Iraq. Successes, failures and the political fallout, straight ahead, in the NEWSROOM.

UNIDENTIFIED MALE (voice-over): Across the United States this week people were feeling the heat as temperatures in many cities reached the triple digits. I-reporter Scott Shreki (ph) reported a 118 degree temperature in his Las Vegas backyard, during what he said was not even the hottest part of the day. Other Vegas residents like Ted Lanes (ph) and his daughter, Jackie say, well, the only way to keep cool is to get in the pool.

Sharon Dunton (ph) caught this camper emptying a water bottle on his head to keep cool in Indianapolis.

And i-Reporter Alayna Benjoseph (ph) sent these images of her daughter trying to beat the heat at a water park in Sterling, Massachusetts.

You can show us how you are battling the heat by sending us your pictures. Just point your browser to CNN.com.

(COMMERCIAL BREAK)

WHITFIELD: Nicole Ritchie's DUI trial has been postponed. It is now set for August 16th. That's when a key witness for the defense is available to testify.

Police arrested Ritchie in December for driving the wrong way down a freeway. They say, at the time, Ritchie told them she had been smoking pot and taking pain pills. We're hearing a plea deal could be in the works.

LEMON: At the stroke of 12:00 they were ready and they were waiting. In New York City just as in Austin, Texas, devout Harry Potter fans lined up for the midnight screening of the boy wizard's latest installment, the "Order of the Phoenix." Using their own brand of magic, industry experts say overnight ticket sales were a record $12 million. Wow. The most ever for a Wednesday at midnight opening.

Harry liked it too. Listen in as he tells our Larry King what he liked best.

(BEGIN VIDEO CLIP)

DANIEL RADCLIFFE, "HARRY POTTER": I think my favorite scenes to film are all the ones with Gary Oldman. Because we get on so well, it's sort of very easy to act caring about somebody when you really do.

And also I think, in this film, the scene when I'm sort of in the atrium of the ministry of magic right at the end of the movie, and the whole thing is certainly being blown apart in this massive fight. That was really fun to film because it was this beautiful set, and suddenly it was all exploding.

And so that was really good fun to be in the middle of. And the best thing about playing Harry Potter -- I don't know. I suppose getting to work with all these amazing actors. There are a lot of fantastic opportunities these films have given me, but working with all these amazing actors, such as Gary and Elta (ph) and Ella Stanton (ph) and Alan Rickman, working with all those guys and learning from them has been an amazing opportunity.

LARRY KING, HOST "LARRY KING LIVE": What was it like for that first screen kiss for Harry?

RADCLIFFE: It was fine. You know, the kiss is, I think, something that because Harry is, you know -- he is in -- everybody's first kiss is such a big deal. And because Harry is like someone who is in the collective consciousness of a generation of people, their -- his first kiss means a lot to them, as well, if you know what I mean? And so, I think people have got a bit wrapped up in it. It was great. It was fine to shoot, but I think it was a really sweet, tender moment in the film. But it wasn't as big a deal as perhaps everybody thought it might be.

(END VIDEO CLIP)

LEMON: I'm still thinking of that $12 million to J.K. Rolling.

WHITFIELD: Big.

LEMON: Well, you can watch Larry's entire interview with Daniel Radcliffe, Sunday night at 9:00 Eastern, here on CNN. The next hour of the CNN NEWSROOM starts right now.

Iraqi security might seem a contradiction in terms, but the White House says Iraqi politics is in even worse shape. We will break down the benchmarks, this hour.

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