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State of the Economy: Bernanke and Paulson to Testify; What's Next: Preparing for Next Week's Races; Impact of Government Eavesdropping on Average Americans; Millionaire University: Getting Rich off You

Aired February 14, 2008 - 07:00   ET


JOHN ROBERTS, CNN ANCHOR: Hope that you have, too. Hey, taking a look this morning at your "Financial Security Watch" right now as we continue to take care of you here on CNN.
European markets mostly trading up at this hour. Stocks in Asia closed sharply lower. Tokyo's Nikkei closed up over four percent. Hong Kong's Hang Seng index is up over 3.5 percent. That's thanks to reports of economic growth in Japan.

And the state of the American economy is going to be the focus on Capitol Hill today. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke will testify in just a few hours on the economy and the strength of the financial markets. Bernanke's words will be of special interest because there may be hints of another interest rate cut in them.

Senior business correspondent Ali Velshi is watching it all for us this morning, here with a preview of what we might hear today. Ali, people are looking at this idea of yet another rate cut and saying how low can it go?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Well, you've got the two guys there who you need to hear from. Ben Bernanke can talk about rate cuts and monetary policy, and Henry Paulson can talk about tax policy. Since we've last heard from these two gentlemen in that sort of a setting, we've had the Fed cut 0.75 percent and then it cut another 0.5 percent. Then we had the $170 billion stimulus package go through and get signed by President Bush yesterday, then we had the announcement of Project Lifeline. So what more can they do? That's what Congress is going to want to know from them. What more can you do?

Are more interest rate cuts on the horizon? Are more tax cuts on the horizon? What's the plan and how do they see the economy as it's going? Because of this speech and because of how important this testimony will be, you probably won't see markets do too much before that testimony begins. That testimony is set to start at 10:00 Eastern, and we'll keep an eye on it -- John.

ROBERTS: All right. Ali Velshi, looking forward to your coverage on that as we go throughout the day. Thanks very much.



KIRAN CHETRY, CNN ANCHOR: Now to the race for president. The Obama and McCain camps are starting to turn the focus on each other, and the Clinton camp turns up the heat in what could be a last-ditch effort to save the nomination. Hillary Clinton's campaign has already lost two top staffers. Now, her husband's '92 campaign manager is endorsing Barack Obama. David Wilhelm, a former Democratic National Committee chairman, he's a superdelegate in the key battleground state of Ohio. And, in fact, we're going to be talking to him. We're going to ask him why he made the switch to Barack Obama. That's coming up in our 8:00 hour.

Also, the next big contest is less than three weeks away. Democrats in Texas and Ohio will vote March 4th. Hillary Clinton, herself, is calling that date a turning point.


SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: There is a very important choice and a big difference between the candidates in this race. I am in the solutions business. My opponent is in the promises business. I think we need answers, not questions about what we're going to do going forward.


CHETRY: The next primary, though, is in Wisconsin. That's on Tuesday. And the Clinton camp also rolled out a new ad there which is aimed at Barack Obama.


ANNOUNCER: Hillary Clinton said yes. Barack Obama hasn't. Maybe he prefers to give speeches than have to answer questions, like why Hillary Clinton has the only health care plan that covers every American and the only economic plan that freezes foreclosures. Wisconsin deserves to hear both campaigns debate the issues that matter. And that's not debatable.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I'm Hillary Clinton and I approve this message.


CHETRY: Well, late last night on "LARRY KING LIVE," another Clinton guy, James Carville, said that if Clinton doesn't win Texas and/or Ohio, it's over. So it's five days now until the next presidential showdown. What is next for the candidates, particularly as things heat up on the Democratic side?

Chief national correspondent John King joins us to now help us put the race in perspective this morning. Thanks for being with us.


CHETRY: Is it a turning point that Hillary Clinton has gone negative in this ad?

KING: It tells you quite a bit. A, that the tone has gone negative both in her speech and he's the candidate of promises, I'm the candidate of solutions. That's relatively polite but it's still a sharper contrast. An ad saying he won't debate. Campaigns that are winning or even campaigns that are behind but confident, don't spend money on television ads saying we want to have more debates. That is a sign that they know they're in trouble when they're trying to draw him into the environment where she feels most confident.

Now there are two debates on the books, including one with CNN next week in Austin, Texas. But she wants more because she believes she can outdebate him on the substance. Let's talk health care, let's talk the economy, let's talk pick your issue. But so far, the Obama camp says we'll do two. That's just fine. Thank you very much. That's a sign of their confidence.

CHETRY: It's also interesting, though, how quickly, you know, fortunes can turn it seems. You page through the paper today, and it's all but over for Hillary Clinton according to, you know, many analysts. Are they underestimating her ability to stage a comeback if you will?

KING: Well, and if we learned anything in this campaign, let's not make predictions or at least let's not bet the ranch on any predictions. But you now have the first time a constant in the Democratic race, and that is eight wins in a row by Barack Obama. Usually, they have been trading victories back and forth until this point. He has eight in a row. He's expected to win in Hawaii and Wisconsin coming up.

If he can carry that momentum and win Ohio and Texas, mathematically, it's a hard time for him to get the nomination if she stays in. Even if he gets 70 percent of the remaining delegates, he would still be just short of clinching the nomination. But he clearly has the momentum now in the race. There is a sense if not panic, huge concern within the Clinton campaign and all her supporters. James Carville says they have to win Ohio and Texas. Well, guess what? Inside the Clinton campaign, they say that too. And so, if she doesn't win Ohio and Texas, she is at a crossroads looking at the edge of a cliff.

CHETRY: It's also interesting that we're hearing Barack Obama start to target and aim some of his criticism at John McCain, not Hillary Clinton anymore. What does that tell you?

KING: It tells you he's confident. He tells you that he wants to project himself, to Democratic voters as, watch, I am capable. Because as he gets closer to the point where he could be the nominee, Democratic voters will step back and say do we really want to do this? Do we want to take a chance on the new guy? She's at least a familiar face.

And so, what he's trying to do now is say, look at me, I'm ready. And he is saying in his speeches, I run tougher in the polls than John McCain which is true at the moment. They've gone up and down, but he is the stronger candidate now. And he's essentially trying to get Democratic voters in these critical states to come, to reach a comfort level, that this guy not only can frame the debate against John McCain. He had a big economic speech yesterday. It was about running against John McCain saying he would take him on in taxes, take him on on jobs. He wants Democratic voters to say, yes, I can see this. I can see him as my nominee.

CHETRY: And he's also using, you know, the key phrase that Democrats like to hear, which is that John McCain means four more years of a Bush administration, pretty much, and he's already starting with that.

KING: He is starting to frame the race, although it is remarkable for all the advantages Democrats have had in turnout in the primary campaigns. If you look at the national polls, John McCain runs even with Hillary Clinton, runs just a few points behind Barack Obama. Republicans, though, they have a lot of work to do to shore up his conservative base and do other things. But if you look at the national polls today, given everything we see in the primaries, the Republicans say that's fine. We can work with that.

CHETRY: John King, good to see you as always. Thank you.

KING: Thank you.

CHETRY: Well, tonight on "LARRY KING LIVE," an interview with Senator John McCain. He's going to be joining Larry for the entire hour. And you can watch, Larry, by the way, every night, 9:00 p.m. Eastern Time.

Still ahead, Senators Barack Obama and Hillary Clinton will face off in a debate next week. It's going to be hosted by CNN as well as Univision and the Texas Democratic Party next Thursday, February 21st, at the LBJ Auditorium at the University of Texas in Austin. Watch it live. It all gets underway 8:00 p.m. Eastern Time right here on CNN -- John.

ROBERTS: Seven minutes now after the hour, Kiran. Flood warnings are in effect from New England to upstate New York this morning as the region deals with heavy rain and melting snow. Homeowners are being warned that the weight of the heavy snow could collapse their roofs if they don't get it off of there in time. And thunderstorms in New Orleans cause small pieces of this building's facade to fall onto the sidewalk. Fire crews and police cordoned off the area. They say the building is very old and could collapse.

Our Rob Marciano in Ormond Beach, Florida, this morning. He's tracking the extreme weather. A little sliver of sunrise coming up behind you there, Rob, but it doesn't look like the weather is exactly warm.

ROB MARCIANO, CNN METEOROLOGIST: It's chilly. Yes. That's about as extreme as it gets. Other than that, it's just picture perfect. Happy Valentine's Day, everybody. The sun coming up here in Ormond Beach. You see a couple down there? You see a preacher? Can you see that? Drove down from South Carolina. Getting married as the sun comes up here on Ormond Beach. How about that for a little Valentine's Day surprise. Completely unplanned. We just ran into them walking down the beach just a few minutes ago.

By the way, there's steam coming off that water. We've got a warm motion and cold temperatures here. So that's the extreme part of this equation. Good stuff.

All right. Let's show you the rainfall totals that have occurred across the northeast. We've had them two, three, four inches of rain for the past -- the storm that came through. A lot of snow well north but this has caused some flooding problems across much of the rivers in Connecticut, Jersey and southern New York as well.

Boston, tell you what? Let's show you Boston's tower camera. We might -- we got some delays. Probably they're going to pop up over Logan. There you see some rain on the radar, and that's going to scoot past Logan. So be just aware of that. WCVB, that's our affiliate down there. And then fog in Miami, all the way down I-95, the Boston Post Road, if you will, and the sun coming up over Miami, WSVN. A little bit of fog and spots, but that certainly looks to be even more pretty at sunrise than here in Ormond Beach.

We do have some snow that's coming across Wisconsin. The forecast for the Daytona 500, the great American race, the 50th running, which is going to happen this coming Sunday, just a slight chance for showers with temperatures pretty warm in the lower 80s. How hot that air gets will determine how much your car grips on the track. All sorts of weather variables will contribute to game time decisions or race time decisions.

We've been investigating that yesterday. We'll do it again today and we'll bring you a full story tomorrow. That's the latest from Ormond Beach, just north of Daytona, where they have been racing cars on this beach. Well, they started it almost 100 years ago. John and Kiran, back over to you.

ROBERTS: And this morning they're getting married on the beach. Rob, thanks very much -- Kiran.

CHETRY: All right. Well, our Alina Cho is here with some other stories new this morning, including breaking news. We talked about an earthquake yesterday in Mexico. Today, Greece.

ALINA CHO, CNN CORRESPONDENT: Yes. You talked about it at the top of the show, I know. Kiran, John, good morning. Good morning again, everybody.

We start with that breaking news. A strong earthquake has hit southern Greece. It happened about two hours ago. The 6.7 magnitude quake struck off shore about 12 miles and about 150 miles from the capital of Athens. The quake was felt there and as far south as Crete. No words yet of any damage.

Also breaking right now, al-Qaeda threatening to seize Jerusalem. A Web posting this morning from al-Qaeda in Iraq says Iraq could be used as a launching pad for assaulting Israel. A lot of the message threatens the Palestinians, especially Hamas, for not doing enough to free the Palestinians. U.S. National Intelligence Director Mike McConnell warned this week that al-Qaeda in Iraq would try to make its mark elsewhere in the region. We're going to talk to McConnell in our next half hour.

Incredible pictures coming in from Lebanon this morning. Huge gatherings in the streets of Beirut right now. Some are remembering the assassination of Prime Minister Rafik Hariri three years ago today. Others mourning the death of a Hezbollah leader killed by a car bomb attack in Syria earlier this week. Imad Mughniyeh was one of the world's most wanted terrorists, nicknamed the FOX, because he couldn't be caught. Mughniyeh was linked to the bombing of the U.S. Embassy in Beirut as well as the hijacking of a TWA flight back in 1985. He's the bearded man seen holding a gun near the pilot's head there. Hezbollah blames Israel for the assassination. Israel denies any involvement.

A Halloween-like warning for parents on this Valentine's Day. Listen to this one. Polk County, Florida, police are asking people who bought a pack of Pokemon Valentine Cards and pops to check them very carefully. That's because a woman claims she found a razor blade inside the candy. The Dollar Store that sold it has pulled the rest of the candy off the shelves.

And water cooler story today. This morning, a radio station in Charleston, West Virginia, is celebrating Valentine's Day in the most unusual way. Listen to this. WKLC-FM, better knows as Rock 105, is accepting applications for a free divorce on its Web site -- -- if you're interested, you can apply through 4:00 p.m. Eastern today. The winning name drawn at 5:00 p.m. The station's program director says this is a real divorce. Only those serious should apply. Also, this is only for people with relatively uncomplicated legal proceedings.


CHO: If you have complications, apparently, you are being urged to hire a lawyer.

CHETRY: If you're calling in to get divorce on a radio show, you have complicated problems, OK.

CHO: Yes.

CHETRY: There's obviously something going on there.

CHO: You can apply on the Web site. But, you know, the program director said sure, we can give away concert tickets but here is an opportunity to make somebody happy for the rest of their lives. So there you have it. Creative way to get attention.


CHETRY: We should call the billboard lady.

CHO: I know but -- ROBERTS: In keeping with the spirit of the day.

CHETRY: Because Alina and I were -- both said to our producers, can you find one happy funny Valentine's Day story? No, there's razor blades in lollipops and you can get a divorce from a radio station.


CHO: Interesting. Interesting.

CHETRY: Happy Valentine's Day.

CHO: Attention getting. Attention getting. And you're right. Right in the spirit of Valentine's Day, John.

ROBERTS: Just what we want to hear.

CHETRY: Thanks, Alina.

ROBERTS: Well, it sounds appealing. Take a few courses. Learn how to become a millionaire. What you need to know before you sign up straight ahead.

And the House under pressure from the president to pass a new law expanding the government's power to eavesdrop on private conversations? Does it violate your constitutional rights? We'll ask our legal analyst, Sunny Hostin, ahead on AMERICAN MORNING.


ROBERTS: Pass new rules for government eavesdropping. The Senate approved a permanent extension of the FISA law which gives retroactive immunity to phone companies who help with warrantless wiretapping after 9/11. The House so far is refusing to follow along, doesn't want to give that permission. The current law expires on Saturday, and President Bush says Americans will not be safe without it.

AMERICAN MORNING's legal analyst Sunny Hostin will talk more about this. So, you and I were chatting yesterday after the president came out to tell the House we got to do this, we got to make this immunity retroactive for these telecom companies, and you had a particularly interesting point about that. What was it?

SUNNY HOSTIN, AMERICAN MORNING LEGAL ANALYST: Well, what I would -- what we were discussing is why now? Why now? It's interesting to me because FISA has been around for a long time. It was passed and born after the Watergate scandal.


HOSTIN: And what FISA typically allows, current law allowed, was foreign to foreign communications without a warrant. Because if you're going to wiretap American cell phones, e-mails, that sort of thing, you've got to show probable cause. So my thought was, why give this blanket immunity to telecom companies, which is highly unprecedented, highly unusual. Why?

It's been reported and people are sort of thinking about it and saying it's because the White House doesn't want to be scrutinized, doesn't want this wiretapping program, warrantless wiretapping program scrutinized, and the way it gets scrutinized is lawsuits. There are 40, over 40 pending lawsuits in California.

ROBERTS: So here's the position that the White House is taking, saying we got to have retroactive immunity because these telecommunications companies won't want to participate in this program. And therefore, we won't be able to get the information that we need. I mean, obviously, part of that is true. But you think that there's a broader implication here that the White House doesn't want attorneys going through the discovery process and these lawsuits, snooping around this program.

HOSTIN: And that's what lawsuits do. It sort of shines the spotlight on the program. We don't know much about the program. The Senate Judiciary Committee has asked about the program over and over and over again. Approximately nine times. They have been stonewalled. And so with lawsuits pending, we get subpoena power. Right? Judges have subpoena power. Lawyers get to ask a lot of questions.

What this bill now proposes is retroactive immunity, lawsuits get dismissed and future immunity. So Americans, while the constitution usually protects you, that protection won't be there for Americans making phone calls and that sort of thing, e-mails.

ROBERTS: So just really quickly. The White House could claim, I imagine, executive privilege, as it has in the past to try to knock back the subpoenas. But is it just that there'll be so many of these coming over the transit that it will take up all the time and therefore, they want to get them all off the deck?

HOSTIN: That's -- yes. And that's possible. And so the Senate already passed it. The House is saying no, no blanket immunity. No blanket immunity. And it's just a fascinating, fascinating topic.

ROBERTS: Well, let's put that question to the director of national intelligence, Mike McConnell, when he comes up in about 10 minutes' time. Sunny, thanks very much.

HOSTIN: Thank you.

ROBERTS: And we're going to hear more about the fight over the surveillance act. As we said, the director of National Intelligence, Mike McConnell, will be our guest coming up at 7:30 Eastern Time -- Kiran.

CHETRY: Well, right now, we're going get a check of this morning's "Quick Vote" question. And we're talking about when the Democratic nominee will be decided. Many saying that the races in Ohio and Texas will be make or break, especially for Hillary Clinton. So will it be decided March 4th when those big races take place? Or will it go all the way to the convention in August? Right now, 52 percent of you say it's those big races that will be make or break for the candidate. And 48 percent of you say it may come down all the way to the convention. Cast your vote, We're going to continue to tally your votes through the morning.

Bringing home the bacon. One of these candidates spent a lot of your money on pet projects. The other didn't spend a dime. The answer is in a new report coming up.

ROBERTS: Coming up on AMERICAN MORNING, down and out at Millionaire U.


SUSAN NOE, UNEMPLOYED: You will make $30,000 to $50,000. How's that, Susan? I go, that's great.

GREG HUNTER, CNN CORRESPONDENT: Is that what you made?

NOE: No.


ROBERTS: She wanted to learn how to make millions, but learned a life lesson instead.


NOE: I was being taken.


ROBERTS: Behind the fine print. What really happens to folks who bite on late night infomercials ahead on AMERICAN MORNING.


CHETRY: Well, unfortunately, if you're looking to sell your house now, it's probably not the best time. The real estate market in many places of the country in dire strait. And you may have seen those infomercials saying that you can make millions with a career in real estate. Is it really that easy? Greg Hunter is looking out for you, and he's investigating whether or not you're being sold a bill of goods that may not be accurate. Hey, Greg.

GREG HUNTER, CNN CORRESPONDENT: Good morning, Kiran. Well, you may have seen Russ Whitney infomercials talking about getting rich through real estate. But some say the only people getting rich are the ones selling you the courses.


SUSAN NOE, UNEMPLOYED: Yes, it's mommy.

HUNTER (voice-over): Susan Noe, an unemployed Las Vegas flight attendant, thought a career in real estate could get her back on her feet.


ANNOUNCER: Imagine having all your bills paid off with extra money and credit to buy a new car. A home.


HUNTER: Dazzled by an infomercial like this one --


ANNOUNCER: Find out how it can happen for you.


HUNTER: Noe signed up for a free real estate seminar with the Whitney Information Network. Once there, they sold her a $1,000 three-day course. Then the Whitney Millionaire University Foreclosure Course for another $16,000. Noe says Whitney representatives promised her she'd see results in three months.

NOE: You will make $30,000 to $50,000. How is that, Susan? And I go, that's great.

HUNTER: Is that what you made?

NOE: No. Three months, I was so excited, I went home --

HUNTER: What did you make?

NOE: Nothing.

HUNTER: Noe later filed a consumer complaint in Florida, one of hundreds against the company. State Attorney General Bill McCollum says Whitney engaged in deceptive advertising.

BILL MCCOLLUM, FLA. ATTNY. GEN.: Oh, they ripped them off by giving them the impression that they could go to a free course for a few hours in a single day and that they could get rich.

HUNTER: McCollum says the group lured customers with ads for free seminars, then aggressively pushed more expensive advance courses. Customers, like Susan Noe.

HUNTER (on camera): Does she have a legitimate complaint?

MCCOLLUM: She was the typical person who bought into the infomercial. She went to a one-day seminar for free. She got high pressured sales at that, to go to a three-day seminar and then to the full nine yards.

NOE: That's a nice one.

HUNTER (voice-over): Noe says she worked 15 hours a day, seven days a week for eight months trying to make money buying foreclosures with no money down. Just the way she says Whitney taught her, but couldn't make a deal.

Noe says when she called Whitney for advice, she got conflicting answers and pitched on more courses for more money.

NOE: By then I was just starting to shake, just shaking, because I realized what was happening here.

HUNTER (on camera): What was happening?

NOE: You know, and I was going down, down.

HUNTER: What was happening?

NOE: I was being taken.

HUNTER (voice-over): We asked the Whitney Company for a response. We didn't get one. Florida's attorney general got Whitney to change its advertising in the state of Florida. He says Whitney's courses do have merit. But that the company falsely claimed anybody could make it rich quick in real estate.

MCCOLLUM: The reality is that was very misleading. That's the rare exception that somebody was able to do that, not the norm.

HUNTER: Even the company's four-second hard to read disclaimer says successful results are highly unusual, exceptional or atypical.

UNIDENTIFIED FEMALE: Make it look nice.

HUNTER: Susan Noe learned that the hard way.

NOW: This is what was killing me. I mean, I went through my mother's life savings. I think this is the guilt part, and I can never repay her. Now she's had a stroke. You know, but the role -- it's a role reversal. And I'm sorry. You know, I work part time.

HUNTER (on camera): Did they hurt you?

NOE: Yes, they did.


HUNTER: In its agreement with the Florida attorney general, the Whitney Information Network did not admit any wrongdoing. It denied allegations of deceptive advertising but agreed to pay a million dollars towards customer refunds and to leave those disclaimers up longer on infomercials. We contacted the Whitney Information Network for comment, they did not.


How about disagreement? It was in Florida. What about places outside of Florida?

HUNTER: Well, this agreement does handle the people in Florida because the company is based in Florida. But some people will get some refunds outside. The attorney general told me that or like Susan Noe may get some of her money back. But this company is still doing the seminars all across the country.

I just went to one three or four weeks ago down in New Jersey, and basically they were telling people there's no risk in real estate. And told people they should be ashamed of themselves for not investing in their future by signing up for an $800 course, all at the free seminar.

CHETRY: So you didn't get the impression that the results of success were atypical?

HUNTER: Yes. You know, yes. No, they are. That's what they say. The company says they're atypical.

CHETRY: All right. Greg Hunter, thanks. Good work.



ROBERTS: Twenty-seven minutes now after the hour. You're watching the "Most News in the Morning." The death of a suspected terrorist sparking huge crowds in the streets of Beirut this morning. Thousands of troops on guard. We'll take you there.

And if you're looking for a new ride, the car companies have got something new for you. Is it a longer -- does a longer term loan worth it, or are you just going to end up paying more?

And on the town with numero Uno, the top dog at Westminster is living it up and coming live to our studios straight ahead on AMERICAN MORNING.


JOHN ROBERTS, CNN ANCHOR: Pictures this morning from Orman Beach, Florida, where it's sunny but not exactly Florida-like. 36 degrees there today. Rob Marciano was showing us a picture a few minutes ago. The couple preparing to tie the knot there on Valentine's Day on the beach. Of course, Orman Beach, just north of Daytona Beach, 50th running of the Daytona 500 coming up this Saturday.

KIRAN CHETRY, CNN ANCHOR: It's going to be exciting, probably nice though. At a high of 65 degrees. Not super hot like it sometimes can be but that's about the best the weather is going to get, at least if you live in the eastern part of the country.

ROBERTS: It's supposed to be much nicer for the Daytona which is good. Welcome back to AMERICAN MORNING.

CHETRY: New this morning. If you want to know how some potential presidents are spending your money, there is a new report out it's about pork or you know, the so-called earmarks. Budget watchdog says Congress spent $18 billion on these pet projects last year. At the top of the list, Republican Ted Stevens, $345 million. Hillary Clinton also cracked the senate top ten with $340 million in earmarks going to her state of New York. Almost four times as much money as Barack Obama had sent to Illinois at $91 million. Republican John McCain, zero. He's one of five senators who rejected earmarks entirely as needless pork barrel spending.

The Clinton camp though responded this morning by saying "Senator Clinton is very proud to have helped New York-based projects that train nurses, improve our hospitals, help those suffering from 9/11- related health ailments, bolster our national and Homeland Security and provide our brave men and women in uniform with the resources they need to achieve their mission while keeping them safe."

ROBERTS: We are on your financial security watch this morning. Congress is getting an update on the state of the economy today. Treasury Secretary Henry Paulson and federal reserve chairman Ben Bernanke will testify before the senate banking committee. Bernanke's words will be closely watched. Investors were look for clues if interest rates could be cut yet again.

Security forces in the Philippines say they have broken up an Al Qaeda assassination plot. They say that terrorists were planning a series of bombings to kill Philippine President Gloria Macapagal- Arroyo and others, possibly U.S. diplomats and attack foreign embassies. Troops are now on high alert a day before a planned protest by Arroyo's political opponents.

CHETRY: In Lebanon, thousands are in the streets of Beirut this morning and the troops are on alert. Two rallies, one for the funeral of a slain hezbollah leader and the other is to mark the anniversary of an assassinated prime minister. CNN's Brent Sadler is in Beirut for us.


BRENT SADLER, CNN, CORRESPONDENT: Hundreds of thousands of Lebanese have taken to the streets of central and south Beirut amid escalating tension here. Downtown Beirut jammed by huge numbers of flag-waving loyalists, of Lebanon's anti-Syrian government which the U.S. supports. They are commemorating the assassination three years ago of former Prime Minister Rafik Hariri targeted many claim here, by Syria. Organizers say it's the largest gathering in Lebanon since a million people turned out in the wake of the Hariri murder during the Cedar Revolution that pressured Syria to withdraw its troops.

A few miles away, mass supporters of the militant pro-Syrian group, hezbollah, a sworn enemy of the U.S. and Israel, were burying one of the world's most wanted fugitive terror suspects, Imad Mugniyeh, killed by a car bomb, eulogized by Hezbollah, backed by Syria and Iran as two dangerously divided Lebanese camps flex their muscles in a critical showdown. Brent Sadler, CNN, Beirut.


ROBERTS: Well, President Bush and House Democrats are arguing over a bill that expands the government's eavesdropping powers. Democrats do not want to give phone companies retroactive immunity from prosecution. A temporary version of the law expires tomorrow and the president says the country is not safe without it.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: At this moment, somewhere in the world terrorists are planning attacks on our country. Their goal is to bring destruction to our shores that will make September 11th pale by comparison.


ROBERTS: The director of National Intelligence Mike McConnell is calling on the president to veto any measure that would give lawmakers more time to consider the bill and the director of National Intelligence joins us now from our Washington bureau.

Mr. McConnell, first of all, why the urgent need for retroactive immunity for these telecommunications companies?

MIKE MCCONNELL, DIRECTOR, NATIONAL INTELLIGENCE: Good morning, John. The primary reason for retroactive immunity or liability protection from the carriers is to obtain their assistance. Quite frankly we cannot do the job we have to do without the cooperation of the private sector. So the situation we're in now with private sector companies being subjected to huge suits, they're not inclined to give us assistance. So there is varying arguments about having the bill expire, extending it or continuing it in its current form. In either case, all three of those, we are losing and will continue to lose significant amounts of information because we can't do this mission without the cooperation and participation of the private sector.

ROBERTS: So you say it is important to protect these telecommunications companies from liability so that they continue to help in the program. But is it also important from your perspective to keep the prying eyes of attorneys who are launching these lawsuits away from uncovering information about the program as they go through the discovery process?

MCCONNELL: Well, certainly, John. That's a part of it. This is a classified program. We are engaged in tracking foreign terrorists in a variety of ways around the world. So more and more of this is discussed in the public, revealed in the public and so on. Those that we are tracking are smart and they're adaptable. And so what is revealed to them through whatever process they can change their techniques and makes it more difficult for us. Now, remember, these are terrorists who operate with the context of suicide that have sworn to commit mass casualties inside the United States greater than 9/11. So, these are very dangerous men that we're attempting to track.

ROBERTS: I want to shift gears here just a little bit. On February 5th, before the Senate Intelligence Committee, you issued some stark warnings about Al Qaeda saying they're gaining strength in Pakistan and that they're improving "the last key aspect of its ability to attack the United States." And that's militants that can blend in to the western population, who wouldn't ordinarily stand out if you will. If that's the case, Director McConnell what is the United States doing about it?

MCCONNELL: Well, for one thing, we're attempting to get this FISA legislation, which has been passed in the senate with two-thirds of the senate in favor after having looked at all of this program to get it passed into new law because that's our significant advantage. When I mention Al Qaeda, in my testimony, they have a place to operate de facto safe haven in Pakistan. They have leadership. They have middle level lieutenants. What they're attempting to do is to recruit those that can be trained and then infiltrated into this country. Those are the very people that we're attempting to track down.

ROBERTS: Right but if they have the safe haven in Pakistan, is there anything that the United States could do other than to try to encourage President Musharraf there to go after them? Is it time for the U.S. to act if you think that they are, I don't want to say on the edge of an attack, but certainly gaining strength in the ability to launch one?

MCCONNELL: Well, there are many aspects of what could be done about it. One is to work with the Pakistanis and we are in fact doing that, very closely, very much engaged working with the Pakistanis to try to eliminate the problem there in the de facto safe haven areas. However, those that have been trained that have been repositioned in Europe or wherever, those are the ones we have to identify and prevent from getting into this country. And we have been quite successful. There are many planned operations and individuals that have been arrested or cells broken up because of some of these tools and techniques. So the dilemma I have as a director of National Intelligence is I have a classified program that is being successful, and it is being subjected to somewhat political debate. The bill passed by the senate and provides warranted protection for U.S. persons anywhere on the globe. It also gives us the authority to conduct surveillance against the foreign person in a foreign country without a probable cause requirement to get a warrant. So that's very important for us to have that capability.

ROBERTS: All right. Well, we'll see if you get that from the House as the negotiations continue. Director of National Intelligence, Mike McConnell joining us this morning. Mr. McConnell, thanks.

MCCONNELL: Thank you very much.

CHETRY: He won over the judges and the New York City crowd.


UNIDENTIFIED MALE: We have never had a reaction like this in the garden. Standing ovation for the beagle. Best in show.


CHETRY: Here he is, Uno, the champion beagle. He's going to be joining us in the studio, coming up in just a couple of minutes.

Also a new concern about an outbreak of measles. This was on a flight to Hawaii. We're paging Dr. Gupta this morning. Hey, Sanjay.

DR. SANJAY GUPTA, CNN, CHIEF MEDICAL CORRESPONDENT: Officials say they're very concerned about a potential outbreak here. It does involve an 11-month-old child, an airplane and as you mentioned a trip to Hawaii. I'll tell you what's going on. That's coming up on AMERICAN MORNING.


CHETRY: Well, it's not TB. It is the measles that has health officials looking for passengers who were on a flight from San Diego to Hawaii with an infected baby. We're paging Dr. Gupta right now about it. Chief medical correspondent Sanjay Gupta in Atlanta this morning. How unusual is this? You know, a lot of people get vaccinated for the measles?

GUPTA: That's right and because of those vaccinations, which have been around really since the early '60s, it is pretty unusual. And you'll remember, Kiran, that we talked a lot about tuberculosis in planes last year. But this time measles. You know, a lot of people just don't see cases of measles anymore. So, take a lack at what it looks like in case you've forgotten. Often times, high fever, runny nose, kids are miserable when they have this as you can tell there. They get red, watery eyes and that tell-tale rash that you see there Kiran. Those are some of the signs of the measles.

That 11-month-old child was on an airplane and this has officials very concerned about a potential widespread outbreak for a couple of reasons. One is that this is a very contagious thing. About 90 percent of people who are susceptible when they come in contact with someone who has the measles, they may actually get it themselves. This has officials very concerned, specifically about it. And also there was an incubation period. Kiran, we've talked about this in the past. B But basically what that means is that for 7 to 18 days after you've been exposed, you may not know you have been exposed and you have it and then suddenly you start to develop symptoms. So, there's a long sort of a lag period there. Really, before the end of the month, before we know how many people really were affected by this.

CHETRY: And then how can you tell who is most vulnerable to possibly contracting it?

GUPTA: There a few groups that are the most vulnerable, certainly children under the age of 5. Also adults older than 20 who have not been vaccinated in the past. Again, as you pointed out Kiran, that's an increasingly small population because of the MMR, the measles, mumps, rubella shot. Pregnant women - they are at risk as well as the immunocompromised. Out of all the people, children under 12 months are particularly vulnerable to this. We know that on this airplane ride that you were talking about, there were some infants. We don't know the details of how they're doing now but we know they were particularly at risk here.

CHETRY: All right. Sanjay Gupta, thanks for the information. If you have a question by the way for Sanjay, e-mail us at Sanjay's going to be opening up his mailbag for us coming up in the next hour, he does it every Thursday. Some good questions on board today for you to answer as well, Sanjay. So, we'll see you coming up.

GUPTA: Looking forward to it. Thanks.

ROBERTS: An auto industry in trouble, doing more to entice you to buy a car. But just how long is it reasonable and cost effective to pay for one? Seven years? Is that too much? We'll find out coming up on AMERICAN MORNING.

CHETRY: Coming up on AMERICAN MORNING, beagle mania. Uno takes Manhattan. Will hitting the town with a new taught dog, Uno, joins us here in our studio ahead on AMERICAN MORNING.


UNIDENTIFIED MALE: May I have the beagle?

CHETRY: It was a big moment and a star is born. Uno, the first beagle to win the best in show at the Westminster Kennel Club Dog Show. The crowd went wild. So, how does this hot dog celebrate? Uno joins us with his handler Aaron Wilkerson as well as the host of the Westminster Dog Show, David Frei. All joining me now. Thank you for being with us.


CHETRY: And thanks, buddy. You've been making your rounds on national television. I've seen you all over the place. Congratulations.

AARON WILKERSON, UNO'S HANDLER: Thank you very much.

CHETRY: A first time for a beagle. About time, right?

Yes, ma'am. I agree.

CHETRY: What made Uno so special?

WILKERSON: Last Tuesday night, he just owned the ring. He was walking around and just he had a great time in there and the crowd loved him. He's a people's dog. You know, he really is. He absolutely is a great show dog and any one of the seven in there are just beautiful. And Tuesday night he just owned the ring.

CHETRY: He is such a sweetheart. And David, first time that here was a standing ovation.

FREI: It was unbelievable. I've done the television for 19 years and when he came in the ring, the noise level was amazing. And when the judge pointed to him, I thought they would come out of the stands and storm the floor. The reaction was so great.

CHETRY: There are what, 169 different breeds that take part. And so is it rare to say so that one certain breed has never won or was the beagle discriminated against all these years?

FREI: I don't think so. You know, 169 breeds and varieties and we have given the award 100 times. So, somebody is going to be left out. I'm glad we waited this long to find the perfect beagle because he certainly is. He loves everybody. He's a great representative for the sport, for our show and everything else.

CHETRY: He certainly is beautifully marked. Just a real sweet dog. We also had to laugh because he really was vocal when he won. Let's hear from Uno again because he started howling, jumping up. He knew something was going on when he won.

WILKERSON: Good boy.

CHETRY: Okay, he was of course, just doing it before the commercial break. Now looking at all of us like we're crazy.

Dogs have a way of doing that. Tell us about him. What is he like?

CHETRY: Are you sort of a diva already. You've just wont he show. Tell us a little bit about him. What does he like? What are some of his favorite food?

WILKERSON: Well, he's on proplan. He's sponsored by Purina. And that's what he gets fed on a regular basis. But, of course, yesterday he had the privilege to eat a great steak on a silver platter at Sardy's yesterday. He likes that. He likes that a little bit better than his Pro plan.

CHETRY: Oh, I'm sure he does. He's probably spoiled for life. You guys are heading to the Nasdaq after this.

WILKERSON: Opening the market tomorrow morning.

CHETRY: It's tomorrow morning, he'll be doing the opening bell. How does exactly a dog ring the opening bell?

WILKERSON: Oh, well, I'm not exactly sure. I've never --

FREI: Not sure it ever happened before. We'll find out tomorrow. But I'm sure he'll do a good job.

CHETRY: You know, millions of people love watching the Westminster Dog Show. It's a real thrill. Televised every single year. What is it that makes people bond so much with dogs?

FREI: Well, I think the main thing is we have this great emotional connection to our dogs and members of our family. When you see a dog like this go best in show, you can imagine yourself sitting on the couch next to this dog and hugging it and having a good time.

WILKERSON: Good boy.

CHETRY: Well, he has officially ousted Snoopy as now the top beagle ever. Aaron, congratulations again. And Uno, congratulations, buddy. Thanks for coming out and saying hi to us this morning. He's very interested in what you have in your pocket. We thought -- there he goes. WILKERSON: There you go.

CHETRY: There he goes. Congratulations, Uno. By the way, Aaron Wilkerson, David Frei, and of course, Uno, thanks so much for being with us. You can view more clips, by the way, with the 132nd Westminster Kennel Club Dog Show at Have fun. Have fun ringing the bell.

WILKERSON: Thank you.

FREI: Thank you, Kiran.


ROBERTS: Thank goodness you made him bark.

So you're getting that tax refund in the mail soon. Thinking about putting it towards a new car. Then there's something you should know about a new long-term loan, why it could double the price you pay in the long run. And still looking to land a Valentine? Our Dr. Sanjay Gupta looking at the secrets of attraction ahead on AMERICAN MORNING.


ROBERTS: Five minutes now to the top of the hour there. There is a new report that says cars and trucks are being repossessed at one of the highest rates in past decade. Many cars are being snatched from owners who stop making payments. The repo men say their lots are overflowing. But at the same time, car companies are starting to offer new loans to entice people to buy new cars. CNN's personal financial editor Gerri Willis is here with your financial security watch. I thought that the five-year car loan was about as far out as you could get. Now, this could take it even further.

GERRI WILLIS, CNN, PERSONAL FINANCE EDITOR: It takes it even further. I'm going to tell you there is even talk of eight-year car loans, John. Yes, exactly. Well, here's what's going on. GMAC and Toyota will be offering seven-year car loans. Yes, seven-year car loans so you pay for that thing forever and ever and ever. Here's what the automakers are thinking. They want to lower incentives that they have to pay out for people to buy cars and make more money by getting you to buy a more expensive car. Consumers, of course, want to buy a whole lot of car and they're not thinking about the loan. You go into buy a car, you do all this work on what price to pay. But you probably don't think a whole lot about the loan itself. And at the end of the day, remember, when you drive the car off the lot, it is losing 20 percent of its value. You're paying for value that is going up in smoke.

ROBERTS: I tell you we bought a car for our daughter and we bought a slightly used car and got an amazing deal on it and still got a five-year warranty.

WILLIS: That's great.

ROBERTS: But the seven-year loans are definitely out there. We got it for half of what the car was worth. It was terrific.

WILLLIS: That's awesome. I love those deals.

ROBERTS: They're few and far between but great when you can get them. But taking it out there seven years, and the interest rate payments that you're paying. I mean, it's got to be close to doubling the price of the car for it.

WILLIS: Well, it's just not a place you want to go. You don't want to pay all that interest. It is a ridiculous thing to do because at the end of the day, most folks don't even hold on to their car for seven years. The average is something like 4.5. So, guess what, you're going to owe money on that car after you've already turned it back in. You're probably going to have to roll that debt into a new loan and who wants to be paying for something they don't even own anymore.

ROBERTS: So, could this cause more defaults?

WILLIS: Absolutely. I mean, just getting people into more and more trouble, getting in over their heads with debt. We have seen the credit card delinquencies rise. Now auto loans. Obviously, people having trouble with their cars and we know what is going on with mortgage loans right now. People struggling with adjustable rate loan resets. It is tough out there. But you can do yourself a favor by not taking out a seven-year loan.

ROBERTS: When you really have to do the math here as well. It looks very attractive. You can say I get either that much more car for the same price or that I can get a car for that much less. If you keep those interest payments up over the life of seven years and interest is the first thing to come up as well, isn't it?

WILLIS: Exactly. From what we hear, the best places to go for loans is go to the automaker themselves. They will give you a good deal. But you got to be smart about the term of the loan and not extend it too far so you're paying so much in interest.

ROBERTS: All right. Gerri Willis, as always, it's good information.

WILLIS: My pleasure.

ROBERTS: Good advise. Thank you.

CHETRY: We want to take a check of our "Quick Vote" before we leave you for this hour. We talk a lot about the Democratic nominee. As we know, almost neck and neck for Hillary Clinton and Barack Obama in terms of the delegate counts that they have racked up so far. A lot of people saying for Hillary Clinton, it's going to be make or break in these next two contests. Those will be the big races in Ohio and Texas. When we asked, when will the Democratic nominee be decided? During those two races, March 4th, or will it go all the way to the convention? 49 percent of you think the big races in Texas and Ohio that will be make or break. And then about 51 percent, so really split evenly, think it's going to head all the way to the convention before we know who the Democratic nominee will be.

Cast your vote, by the way, at We'll get a tally throughout the morning and the next hour of AMERICAN MORNING starts right now.

Jumping ship. A Clinton insider trade camps as Hillary tries to hang on.

Plus a battle-tested love. Meet the husband and wife war correspondents on this AMERICAN MORNING.

And welcome. Thanks so much for being with us this morning. I still can't get over how cute Uno was, the beagle.

ROBERTS: It's just the most perfect looking dog I've ever seen.

CHETRY: I really think so.

ROBERTS: Everything about him. He doesn't even look like a really dog because the coloring is perfect. The proportion is perfect.

CHETRY: Right.

ROBERTS: The happy face there. The little bushy tail.

CHETRY: His owner said he knew even at six months old his dog is going to be a winner.

ROBERTS: This is a dog and it's been showing all his life too. Amazing.

CHETRY: Happy Valentine's Day. Thanks so much for being with us this morning on AMERICAN MORNING.

ROBERTS: First, for the race for president this morning. The Obama and the McCain camps have started to turn focus on each other. While the Clinton camp turns up the heat in what could be the last ditch effort to save the nomination. Another troubling sign, her husband's 1992 campaign manager is endorsing Barack Obama. David Wilhelm is a former Democratic national committee chairman and a superdelegate in the battleground state of Ohio. We will ask him why he made the switch to Obama. Coming up at 8:30 Eastern.

The next big contest, this is a big contest, it's not the next contest less than three weeks away. Democrats in Texas and Ohio voting on March 4th. Hillary Clinton herself is calling that day a "turning point."