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AMERICAN MORNING

Green Zone Lockdown: Diplomats Ordered Inside; Secretary Gates Orders Nuclear Inventory Count; Treasury Secretary Speaks Out; Coalition Forces Bomb Militia Position in Basra

Aired March 28, 2008 - 07:00   ET

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


JOHN ROBERTS, CNN ANCHOR: Lots ahead, and the next hour of AMERICAN MORNING starts right now.
Financial security.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Seems like if the phone were ringing, he would just let it ring.

(END VIDEO CLIP)

ROBERTS: Clinton and Obama blast McCain on the economy. The "Most Politics and Money in the Morning." Henry Paulson and Howard Dean live this hour.

Security watch. North Korea test-fires missiles. The Pentagon checks for loose nukes.

And escape from Iraq.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Paw and foot on American soil.

(END VIDEO CLIP)

ROBERTS: Puppies rescued from war find new families on this AMERICAN MORNING.

That is really a heartwarming story, and one that you don't want to miss.

KIRAN CHETRY, CNN ANCHOR: It is. And we're going to be talking to the soldier and the dog that sort of started this whole mission.

ROBERTS: Wait a minute.

CHETRY: Yes. We're going to be talking to the dog as well. He has his own chair.

ROBERTS: All right.

CHETRY: So you know. ROBERTS: As long as we got that straight. It's the 28th of March. It's a Friday, thanks very much for being with us on this AMERICAN MORNING.

CHETRY: We've got some news to talk about this morning as it relates to our nuclear arsenal. Defense Chief Robert Gates ordering now an inventory check of all nuclear warheads and related materials. It comes after that embarrassing disclosure that the U.S. accidentally shipped parts for nuclear missiles to Taiwan. That on the heels of the dramatic breach of nuclear security that happened last August.

CNN's Barbara Starr watching the developments at the Pentagon for us this morning.

Hi, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning to you, Kiran.

By all accounts, Defense Secretary Robert Gates could not be more furious about all of this. Now, the formal order has gone out to the military. Listen to some of the blunt words that the secretary has ordered the military to undertake. He has said to them now, "You are directed to undertake a comprehensive review and physical inventory by serial number of all nuclear weapons and nuclear weapons-related materials."

Kiran, that is thousands of items, and the secretary wants everything checked now. Just the other day, the undersecretary of Defense, Ryan Henry, made clear to reporters how serious this entire matter is.

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RYAN HENRY, DEP. UNDERSECRETARY OF DEFENSE: I cannot emphasize forcefully enough how strong the secretary feels about this matter and how disconcerting it is to him. In an organization as large as DOD, the largest and most complex in the world, there will be mistakes. But they cannot be tolerated in the arena of strategic systems.

(END VIDEO CLIP)

STARR: And, of course, this is the second mess-up in six months or so. Back in August, six missiles with nuclear warheads flown across the country accidentally. The president has now had to call the Chinese leader and apologize for this shipment to Taiwan. The only questions here at the Pentagon now are, will heads roll? And when they do this inventory, Kiran, are they going to find anything else in the wrong place? Kiran?

CHETRY: Let's hope not. Barbara Starr, thanks so much.

And speaking of nuclear arsenals and missiles, North Korea test- firing several short-range missiles off of its western coast overnight. South Korean news agency says that three ship to ship missiles were launched. North Korea is blaming the United States for a stall in nuclear talks saying America's demand for full disclosure of its nuclear program is unjust. State Department saying that until North Korea comes clean it will remain on the list of countries that support terrorism.

ROBERTS: Three minutes after the hour now. Rising tensions and breaking news this morning to report from Iraq. Coalition war planes bombed Shiites militia positions overnight in Basra. It is the first time coalition forces have been drawn into the battles in Basra since intense fighting broke out four days ago. Iraqi Prime Minister Nouri al-Maliki and Iraqi troops are facing off against followers of fellow Shia and anti-American cleric Muqtada al-Sadr. Al-Sadr has called for an end to the bloodshed, urging all groups to adopt a political solution.

Iraq's parliament convenes a special session this morning to address the days of fighting between government groups and Shiite militias. U.S. diplomats in Baghdad are being warned, meantime, to stay under hard cover until further notice after repeated rocket and mortar attacks on the Green Zone. Two U.S. government workers have been killed this week. Iraqi authorities have imposed a city-wide curfew in Baghdad until Sunday.

CNN's State Department correspondent Zain Verjee is in Washington for us this morning to tell us more about this. Zain, I've been inside that embassy when it's come under fire. Typically, the danger lasts for 10 or 15 minutes and then the all-clear is given. But this would appear to be much more serious case than we've seen in the past.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Yes, that's right. A lot more serious. But the State Department does remind us that it does put out advisories like this from time to time when incoming fire there is heavy.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Insurgent firepower steps up. The target -- the U.S. Embassy in Baghdad.

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: We've seen rocket attacks on March 23rd, March 25th, March 26th and March 27th.

VERJEE: Those attacks in the International Zone, U.S. officials say, are becoming more sophisticated, more accurate. The State Department is instructing all embassy employees to stay and sleep in hardened structures, buildings like Saddam Hussein's old palace, or the new U.S. Embassy compound.

In an advisory to U.S. employees, the State Department says, "Personnel should only move outside of hard cover for essential reasons. And essential outdoor movements should be sharply limited." If U.S. employees are outside, they must wear protective body armor like flak jackets and helmets.

(END VIDEOTAPE)

VERJEE: The State Department says how long the advisory will actually stay in place really depends on the volume of incoming fire over the next few days -- John.

ROBERTS: All right. Zain Verjee for us this morning from Washington. Zain, thanks -- Kiran.

CHETRY: The most politics in the morning right now. And a big endorsement from inside the Pennsylvania politics for Senator Barack Obama today. "Philadelphia Inquirer" is reporting that Democratic Senator Bob Casey will announce that he is backing Obama today, and then will join him on a six-day bus tour across the state.

Meanwhile, Governor Ed Rendell as well as Congressman John Murtha and Philadelphia Mayor Michael Nutter are all backing Hillary Clinton. Pennsylvania holds its primary April 22nd. There are 158 delegates at stake for the Democrats.

And for the first time, Barack Obama says he would have left his church in Chicago had his controversial former pastor not stepped down. He talked about it with the ladies of ABC's "The View" in an interview that is going to air today.

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SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Had the reverend not retired and had he not acknowledged that what he had said had deeply offended people and were inappropriate and mischaracterized, what I believe is the greatness of this country for all its flaws, then I wouldn't have felt comfortable staying there at the church.

(END VIDEO CLIP)

CHETRY: Reverend Jeremiah's Wright's comments on race and U.S. foreign policy have sparked anger after they were circulated on YouTube. Wright has been out of sight since the controversy erupted.

Also, a lot of buzz this morning in political circles about potential vice presidential candidates, perhaps dream candidates, if you will. New York Mayor Michael Bloomberg introduced Barack Obama in New York yesterday, and it's the second time they've appeared together in recent months. Now, Bloomberg has not endorsed anyone yet, but both he and Obama had very nice things to say about each other.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (I), NEW YORK: In this great hall, 148 years ago, a presidential candidate from Illinois gave a speech in the way only he could. He offered a brilliant and beautiful defense of his position on slavery. That man, of course, was Abraham Lincoln. This morning, it is my honor to welcome another man from Illinois who is also running for president.

OBAMA: At a time when Washington is divided and old ideological battles, he shows us what can be achieved when we bring people together to seek pragmatic solutions.

(END VIDEO CLIP) CHETRY: On the Republican side, despite going at it quite a bit at the primary debates, Mitt Romney helped John McCain raise money in Utah and Colorado. The two appeared together there and sparked talks of a possible McCain/Romney ticket.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: It's an honor to be here with Senator McCain. He is a man who is proven and tested, an individual who is without question the right person to be the next president of the United States.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We are united as a party. Where Governor Romney can play such a key role is that we have to really energize our party.

(END VIDEO CLIP)

CHETRY: McCain picked up around $400,000 at that Utah fund- raiser.

ROBERTS: Senator Bill Nelson of Florida is calling for a complete overhaul of the country's presidential election laws. Nelson wants to eliminate state primaries and caucuses and instead have six rotating inter-regional primaries to choose the party's nominee. Democrats in his state are being punished for moving their primary up. In the last hour, he told me how frustrating it has been to try to work things out.

(BEGIN VIDEO CLIP)

SEN. BILL NELSON (D), FLORIDA: I've been trying since last summer to get the DNC to work it out so that they would not be denying the vote to almost two million Florida Democrats that came out and voted. And yet, we are where we are because we can't get agreement between the candidates because each of the candidates feel that this offer of compromise is to their advantage or disadvantage, and the other one feels the other way. So we can't get agreement.

(END VIDEO CLIP)

ROBERTS: Nelson isn't stopping of wanting to revamp the primaries. He also wants to replace the electoral college system with the nationwide popular vote to elect the president. That would require a constitutional amendment. Past efforts to eliminate the electoral college have failed to gain widespread support.

And we're going to be putting a lot of this to Democratic National Committee Chairman Howard Dean. He's coming up at 7:30 Eastern time. He is the man at the center of this controversy. We'll find out how he's feeling about it as well as the heated rhetoric going on between the Barack Obama and Hillary Clinton campaigns.

Fixing the mortgage meltdown, the diving dollar and eye-popping gas prices, all on his to-do list. The treasury secretary joins us live. Does he have answers for your issue number one? And new concerns this morning about one of America's most popular prescription drugs. Our Dr. Sanjay Gupta is following the investigation into Singulair. He'll break it down for us when AMERICAN MORNING returns.

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ROBERTS: Thirteen minutes after the hour. There are new concerns this morning about Singulair, the wildly popular asthma medication. Nearly 30 million prescriptions were written for it last year, many of them for children. But now, the Food and Drug Administration is looking into whether there's a link between Merck's number one selling drug and suicide.

CNN's chief medical correspondent Dr. Sanjay Gupta is at the medical update desk for us this morning. Why the investigation into this, Sanjay?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: It's interesting, John. The medication has been around for about 10 years. There were four suicides that we could find that they were concerned about, which isn't a large number if you consider overall about 32,000 suicides per year. But it was enough of a red flag, John, where they start looking at trends among these people who committed suicide to figure out what they had in common. And Singulair seems to have emerged as a possible concern.

Again, no definitive link here. No one is saying that at all. In fact, they're going to start an investigation which could take months into children, as you pointed out, and adults. Children as young as six months can take this medication. So that seems to be the sort of genesis of what's going on here.

You know, Singulair is a medication used for asthma. It's used for allergies. It is what's known as leukotriene antagonist. The name is not that important. But the way the drug works basically, it blocks the cells, the inflammatory cells, that sometimes come out and cause the sniffling and the coughing and the chest tightness. And that's how it works. It's pretty effective for a lot of people.

It had been studied quite a bit before it was ever released, as you know, pre-marketing studies. What Merck has said, the company that makes this particular medication, is that out of the many trials they did, 11,000 patients, 40 clinical trials, they had no reported suicides. So that is -- they're saying this is a well-studied drug.

Having said that, John, as often happens with medications, after it was released, there were some updates that we found to the labeling overall in the medication. In fact, under less common side effects, if you look closely at some of the labeling, which people often don't read there. We did. This is what it says. Behavioral and mood related changes, aggressive behavior, bad/vivid dreams, -- keep reading -- suicidal thoughts and actions at the bottom of that labeling already, John.

Again, it's going to be months before we know anything for sure, but this is something that was just announced yesterday.

ROBERTS: So what should people who are taking Singulair or at least have it at home do in the meantime? And are there any other drugs in general that can lead to these suicidal tendencies as well?

GUPTA: Well, I think the message is going to certainly be, don't stop taking the medication. As you know, I mean, a significant asthma attack can be a very dangerous thing as well. The message I think from anybody is don't stop taking this.

On the other hand, if you are somebody who has taken Singulair and any of this -- what I'm talking about this morning rings true for you -- some depression, some mood changes, it's maybe something you want to talk about with your doctor.

There have been other medications sort of counter intuitive medications that have been subsequently found to have suicide-related risks, a couple of them that we've put up there, Chantix was one of them, for example. That's a medication that's used to stop smoking.

Again, no definitive link there, but concerns about anxiety, concerns about suicidal thoughts -- Accutane, as well, a dermatological medication and anti-depressants. We've talked a lot about that and the black box warnings that are associated with these medications, possibly increasing suicidal thoughts.

ROBERTS: All right. Some good advice for us this morning from the doctor. And you can catch Dr. Gupta this weekend on his show "HOUSE CALL." It airs Saturday and Sunday mornings at 8:30 a.m. Eastern right here on CNN. And Sanjay will be back a little bit later on with some more information for you that you want to know about.

CHETRY: He hasn't quite gotten to the point of inviting people to his house.

ROBERTS: Not yet. He calls in on our house every morning, and we appreciate it.

CHETRY: Exactly.

Well, Delta Airlines is expected to fly its regular schedule today after another round of cancellations ended up stranding thousands of passengers yesterday. Canceled, that's certainly you don't want to see when you arrive at the airport to check on your flight.

Well, yesterday, the airline scrubbed 275 flights, all MD-88 planes. And we talked about this yesterday with Miles O'Brien. Mechanics were checking whether wiring was properly covered near a fuel pump in the planes' wheel wells. American Airlines also expected to be on a normal schedule today. They also canceled 450 MD-80 flights earlier in the week.

Right now, Reynolds Wolf is at our weather update desk tracking more expected travel delays today, not wiring but Mother Nature. REYNOLD WOLF, CNN METEOROLOGIST: Yes, Mother Nature, pretty much the same old culprit. We're going to be dealing with some issues in a couple of spots, mainly all of your New York area airports, you're going to have some delays. Not overwhelming, but still at least about a 15 to 30-minute wait. Let's go and show you, though, the weather computer.

As we do say, you'll see a few other spots that remain some issues. Boston, due to the rain, Atlanta, low clouds and fog, about 15 to 30 minutes of delay for you there.

Meanwhile, here's what we're seeing in parts of the northeast. We've got the potential of a decent snowfall event, especially for springtime, anywhere from four to eight inches of snowfall through Concord back towards Keene (ph) and Winchester, as far north as Plymouth. We're expecting that to last through the midday and evening hours.

However, in places like Boston, southward to New York, temperatures will be above the freezing point so we're not expecting much in terms of snowfall, mainly some light to scattered showers. However, in the Ohio Valley and back into the Tennessee Valley, we are seeing some rather intense thunderstorms. Nothing severe at this point, but from Louisville back over to Charleston, there will be the potential for some flash flooding.

Hey, don't know if John is headed back to Washington, D.C., this weekend, but if he is, expect plenty of sunshine. Great conditions for the National Cherry Blossom Festival in Washington, D.C. Fifty- one degrees, the expected high. Should be absolutely beautiful. It always is. Let's send it back to you in the studio.

ROBERTS: I am heading back. I'm heading back this morning.

(CROSSTALK)

WOLF: There you go.

ROBERTS: Looking forward to it.

CHETRY: Check out the cherry blossoms when you're there. Really nice.

ROBERTS: Yes. Well, our Bryan Bell, who's producing our 8:00 a.m. Eastern hour this morning is also coming back because he wants to go to the Cherry Blossom Festival.

CHETRY: All right. Take some pictures. File some I-Reports.

ROBERTS: Yes. Maybe we'll see some of that next week.

CHETRY: All right. Sounds good.

Working overtime to get you your refund check, what do you have to do to get paid? The treasury secretary talks about issue number one. He joins us live next on AMERICAN MORNING. (COMMERCIAL BREAK)

ROBERTS: Twenty-one minutes after the hour. Breaking news right now.

CNN has just learned that coalition war planes have bombed Shiite positions in Basra overnight. It is the first time that coalition forces have been drawn into the battles there since intense fighting broke out four days ago.

Joining us now on the telephone from Basra is the British military spokesman Major Tom Holloway. Major Holloway, thanks for being with us. What can you tell us about the operations going on there in the Basra area?

VOICE OF MAJOR TOM HOLLOWAY, U.K. MILITARY SPOKESMAN: Good morning, John. Well, the set up from here is that for the last four days, the Iraqi Security Forces have been conducting operations in Basra in view of the security situation. The emphasis on this through the highest level for the government of Iraq is emphasize on the fact that the prime minister himself, Prime Minister Maliki, is in the city.

British and other coalition elements are playing a supporting part in this, providing capability, military capability that the Iraqi armed forces don't have. And a prime example of that is we've had air over the top of the city for the past four days. That's been providing surveillance which we've been feeding into the Iraqi operation center in Basra. And as you suggest that, last night we released ordinance on two separate occasions on to possibly identify militia groupings on the ground.

ROBERTS: Can you tell us, Major Holloway, what the target of those ordinance releases were?

HOLLOWAY: The first one was a building which was the -- had a large amount of militia troops inside and on it and around it, and the second strike was on an enemy mortar team which was shelling one of the Iraqi army positions and what we've done in neutral (ph) especially as target.

ROBERTS: Now, of course, it's well known that British troops which were engaged in operations in the Basra area pulled back to the Basra Airport. Do you have any forces on the ground in the area now, Major, or is it all just air support?

HOLLOWAY: Well, John, we don't have combat forces on the ground. We do have a limited amount of liaison working with the Iraqi (INAUDIBLE) among levels inside the city. As you might expect to know, they've been assisting with the coordination of firepower and linking with surveillance.

ROBERTS: All right. Major Tom Holloway at the British military force this morning. Major, thanks very much. Appreciate the update from you this morning -- Kiran. CHETRY: All right. Well, it is issue number one, money trouble hitting families from every angle, from trying to keep their homes to filling up their cars to keeping their jobs. And the IRS will be trying to help in a small way. It will be open for business this weekend. It's being called Super Saturday, and it's to help make sure that you get your economic stimulus check.

Here now live from Washington, Treasury Secretary Henry Paulson joins us this morning. Secretary Paulson, great to have you with us. Welcome.

HENRY PAULSON, TREASURY SECRETARY: Good morning, Kiran.

CHETRY: Let's explain this Super Saturday first to our viewers. The IRS making a big push to try to get the tax rebate message out there. It will be open on Saturday. And these are for people who normally aren't required to file their returns. They're now eligible for these rebate checks. So what do they need to know?

PAULSON: Well, Kiran, first of all, you've got it. You need to file a tax return to get the rebate check. Twenty million Americans normally don't file a tax return. They're going to need to do so. We're doing everything we can to help them, and many of them have already received letters.

As you said, the IRS is going to be opening up all of their regional offices on Saturday. We've got a good number of partners opening up their offices, AARP, United Way of America. What I would say to people, if you need help, you might want to go online, www.irs.gov or call the IRS hot line, 800-908-9887. So -- but people are there to help you, and I think it's very important to take advantage of this Saturday.

CHETRY: Absolutely. You know, on the subject of these rebate checks, there has been some debate over how significant they'll be in helping to lift the sagging economy, especially when you ask people, are you going to spend it or are you going to use it to pay off debt? And there are some who really feel that they may need to pay off debt as opposed to going out and spending their money. How much of an impact are you hoping and do you expect these rebate checks will make?

PAULSON: We know they're going to be helpful, Kiran. These checks should be a big part of adding 500,000 to 600,000 additional jobs this year. They're going to help people put money in the pocket of those who need it. And the checks, as you said, are going to begin going out in early May, and they'll be largely out into the economy by end of June or early July.

CHETRY: All right. I want to ask you about the housing crisis. It was center stage on the campaign trail and has been this week. Both presidential candidates weighing in. Let's listen to what Barack Obama said when he talked about direct federal intervention.

(BEGIN VIDEO CLIP)

OBAMA: If we can extend a hand to banks on Wall Street when they get into trouble, we can extend a hand to Americans who are struggling often through no fault of their own.

(END VIDEO CLIP)

CHETRY: A question out there, why aren't we doing more to help the average homeowner going into foreclosure, but we are rescuing banks that are facing similar money problems?

PAULSON: Well, Kiran, we've been doing a lot to reach out to the average homeowner, and we have a huge effort under way there. But let me begin by saying that 92 percent of Americans are making their mortgage payment every month right on time. Two percent of the American homeowners are in foreclosure. So ...

CHETRY: But is there doubt that that's not dragging down the economy nonetheless?

PAULSON: No, Kiran. That is the biggest downside to the economy. No doubt about it. We're focused on it. We have an effort to help all those who can avoid foreclosure do so. Those who can afford to stay in a home, we have an alliance where we've got the services, the private sectors representing 90 percent of the subprime mortgages, reaching out and attempting to help them.

And over a million people have been helped so far. President Bush this morning is going to be visiting a neighborhood counseling center in New Jersey. We have a big effort under way.

CHETRY: All right. Well, you know, there has been talk as well about whether or not we need to rethink how much regulation there are on these independent banks, how much the federal government is involved in making sure that they're not transferring debt and making their books look healthier than they are, as we've seen in some of these situations. How is that going right now in terms of making some of these smaller investment banks fall under the same regulation that you see with the big commercial ones?

PAULSON: Well, Kiran, as you said, it's -- the banks are very important to our overall economy. It's very important that they continue to play the role they need to play and make credit available for businesses to create jobs, for consumers to buy a home or make a college loan. And, again, the effort here is, first of all, to encourage them to raise capital so they continue to play the role they need rather than shrinking their balance sheet. And so stable, orderly markets are very important and regulators are focused on that.

CHETRY: All right. Irs.gov, by the way, is the Web site.

PAULSON: Yes.

CHETRY: If you don't usually file a return but you want to this year for the rebate check, that's where you go. Secretary Paulson, great to see you. Thanks for being with us.

PAULSON: Kiran, thank you.

CHETRY: And the economy is voters' number one issue of concern, as we've seen in poll after poll. Later today, you can join Ali Velshi, Gerri Willis and the rest of the CNN money team. Issue number one, noon Eastern, right here on CNN.

ROBERTS: Twenty-nine minutes after the hour. New plans are out to try to resolve the crisis in the Democratic Party. Howard Dean, chairman of the party, is the man who makes the call. We're going to talk to him next. That story and today's headlines when AMERICAN MORNING returns.

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CHETRY: Welcome back to AMERICAN MORNING. It's 7:30 right now on a Friday morning.

ROBERTS: Good morning to you. Thanks for being with us as we head into another weekend. This one should be pretty good I think down there Washington if you want to go down for the Cherry Blossom Festival. A lot of folks should be heading down there.

Barack Obama and Hillary Clinton cranking up their campaigns heading into the critical Pennsylvania primary. Still a little more than three weeks away, though. And there is no sign of any let-up in the bitter attacks flying back and forth.

The latest poll show Democratic voters are getting angry about the state of the campaign and some of them may not vote in November, depending on who becomes the candidate. Some leading Democrats are calling for a plan to choose a candidate within weeks or risk losing the race for the White House outright.

Joining me now to talk about this is the Democratic National Committee chairman Howard Dean who is in Washington this morning. Chairman Dean, good to talk to you. Thanks very for being with us again.

HOWARD DEAN, DEMOCRATIC NATIONAL COMMITTEE CHAIRMAN: Thanks.

ROBERTS: Are you concerned that the party is at risk of imploding here if this thing goes on much longer?

DEAN: Well, I don't think the party is going to implode. I think we ought to take into consideration 30 million people who have voted, it's a huge record and another record is we're heading for in Pennsylvania. But I do think that personal attacks demoralize the base. People are not going to vote for John McCain in the fall. They're going to know that he's going to put some more right-wingers on the Supreme Court. And that's the big difference between him and Hillary Clinton and Barack Obama.

But we need to focus on Iraq. We need to focus on gas prices, on mortgages. We need to focus on the economy. Those are the things that people care about. They don't care about bickering over pastors and who said what in Bosnia.

ROBERTS: Let me just, let me just challenge you, if I could, on that point that people are not going to vote for John McCain in the fall. In fact, some polling has been done on this. A Gallup poll that was out just recently found that if Barack Obama were to become the Democratic nominee, 28 percent of Hillary Clinton's supporters would vote for John McCain.

If Hillary Clinton becomes the nominee, 19 percent of Barack Obama's supporters would vote for John McCain. And 16 percent of Americans on both sides, either Barack Obama or Hillary Clinton supporter say they're going to sit this one out. So it looks like you've got a real problem there.

DEAN: Well, look, that's what people may say now, but the fact of the matter is, John McCain believes that our troops ought to stay in Iraq for up to 100 years. Because we think, both our candidates think then they ought to get out.

John McCain thought it was great that George Bush vetoed health care for our kids. That's were the American people are. John McCain gave a speech the other day saying that we shouldn't do much to help the mortgage holders because it was their fault they got in trouble. That's -- you know, the Republicans, George Bush and John McCain, have been completely out of touch with where the American people are for the last eight years.

We don't want another four years of George Bush, which is what John McCain is offering us. So they're not going to do that at the end. Here's the issue, it's not so much that they're going to vote for John McCain, we got two great candidates. We need to focus on the issues here.

ROBERTS: Right.

DEAN: We need our supporters to stop taking positions that are unreasonable. Somebody is going to win this race and somebody is going to lose this race with a 49.8 percent of the Democratic votes.

ROBERTS: Well, let me put that...

DEAN: This is not about John McCain and Hillary Clinton. This is about our country. We need change in our country. Either Hillary Clinton or excuse me, John, or Barack Obama will give us that change. John McCain will not, and we need to stay on the positive road talking about our strengths.

ROBERTS: Right.

DEAN: And the Republican weakness.

ROBERTS: Now, to that point, a couple of times ago that you were on this broadcast, it wasn't that long ago, you told me that you weren't worried about the level of rhetoric going back and forth but now you're concerned about it. Are you concerned about it to the point where you are going to tell these two campaigns to cool it?

DEAN: We've had had extensive discussions with both campaigns and others, senior party leaders, mostly unaligned between the two campaigns. I don't think you tell presidential candidates what to do. But I think they have certainly gotten the message from the electorate that what the electorate wants is a positive, strong campaign and a clear differentiation between the Democrats on the one side and the Republican record for the last eight years and the threat of another four years of that kind of behavior.

ROBERTS: We had Senator Bill Nelson on just a little more than an hour ago, he was talking about his new plan not only for choosing a president, to get rid of the electoral college, but also a new plan of six inter-regional primaries to replace the current system. Here's what he said. Take a listen.

(BEGIN VIDEO CLIP)

NELSON: If ever we've had an example of a mess, it's this one, and I don't think there's anybody in America that is satisfied with this presidential nominating process.

(END VIDEO CLIP)

ROBERTS: Chairman Dean, is the current system a mess and does it need replacing?

DEAN: No, it's not a mess. It is actually doing much better than we have in the past. Look, people are so excited in places like Texas and Ohio and Pennsylvania and North Carolina where they've never had a chance in 30 years to say who they want for president. We've had African-Americans, Hispanics, native Americans, Asian- Americans, for the first time, participate in an early presidential state that mattered. So.

ROBERTS: Right. But yet you've got two states where the delegates aren't going to count. You're probably going to make the decision as to who the nominee through superdelegates, the same as happened in 1984 when Walter Mondale went on to lose 49 states. Does that not speak to problems in the system?

DEAN: Fist of all, I think the delegates are eventually going to be seated in Florida and Michigan, as soon as we get an agreement among the candidates how to do that. You know, I think the press always takes a gloomy view of everything. And the truth is, we've got a great campaign season. Yes, it's tough between these two great candidates, but one of them is going to end up being president of the United States and take America in a new and better direction.

And the fact is you'll always going to get people complaining about the system. The system can always be improved but we have rules. We're going to play by them and they're going to be applied fairly to both candidates. And that's what I want people to know in the Democratic party.

ROBERTS: Governor Dean, it's always great to have you on. Thanks for coming on this morning.

DEAN: Thanks for having me on.

ROBERTS: See you again soon. DEAN: Thank you.

ROBERTS: Kiran.

CHETRY: Still ahead, "ISSUE #1," prime time tonight on CNN with an in-depth look at the mortgage crisis and how homeowners are being squeezed. Gerri Willis, part of the CNN special investigation. She is in preview when AMERICAN MORNING returns.

(COMMERCIAL BREAK)

ROBERTS: President Bush travels to New Jersey today to try to highlight the government's role in helping homeowners struggling with mortgage payments. Our Gerri Willis has been on the mortgage meltdown from the very beginning. Tonight, she joins CNN "SPECIAL INVESTIGATIONS UNIT" for an in-depth look at the crisis. Gerri joins us now from Atlanta with a preview.

Good morning, Gerri.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi, there, John.

Well, one of the major mortgage lenders involved in the mortgage crisis was Ameriquest. Last year, the lender settled a lawsuit filed by 49 states for $325 million. Now, that settlement meant the end for Ameriquest but for many former customers, the nightmare continues.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): If you've ever bought a house, you know the dizzying process to seal the deal. Dozens and dozens of signatures, countless scribbling of initials. It all goes by very fast. How many of us actually read what we signed? The case against Ameriquest started in Des Moines, Iowa. State Attorney General Tom Miller led the charge.

ROM MILLER, IOWA ATTORNEY GENERAL: A number of things come together here that made fraud so tempting. One is it's so complex so you combine complexity, a vulnerable population, a lot of money to be made, and you have the formula for disaster.

WILLIS: Mark Bomchill handles loans for Ameriquest in Minneapolis.

MARK BOMCHILL, FMR. AMERIQUEST EMPLOYEE: One of the things that we had to do is constantly role-play our cold calling skills.

WILLIS: Let's do a couple of those, then. I'll give you the objection and you tell me what they told you to say.

BOMCHILL: OK.

WILLIS: So I just refinanced. Why would I refinance again?

BOMCHILL: Well, Ms. Willis, oftentimes when people refinance they're not able to get all their needs met. Were you able to get all of your debts consolidated that you needed consolidated?

WILLIS: I'm not interested.

BOMCHILL: What if I was able to show you how I could save you $60,000 to $70,000, would you be interested then?

WILLIS: That's a compelling argument. Is it true?

BOMCHILL: Of course not, it's not true. Those people that fell for it are probably in foreclosure right now.

WILLIS: Do you ever feel guilty about having been there and having worked there? Did you put some of these people in these loans?

BOMCHILL: I don't think that anybody that could seriously look back at their employment at Ameriquest, no matter what level, can honestly say or feel good about what they did to the customers.

(END VIDEOTAPE)

WILLIS: We should tell you that Ameriquest no longer exists. It was bought out by Citigroup and Ameriquest former CEO Roland Arnall passed away earlier this month -- John.

ROBERTS: As you mentioned, this settlement was huge, the dollar amount was about $325 million. As you mentioned, is it really helping people though who were hurt by this Ameriquest?

WILLIS: Well, not really. It won't really ease much of the pain. Almost half of the money will go towards administrative costs. It's up to each state to decide how exactly the remaining funds will be distributed. That process is going on right now in most states. But considering the hundreds of thousands of Ameriquest victims, each one is expected to receive only $300 to $1,000 in disbursements. Now, that won't help much when your home is getting foreclosed.

ROBERTS: All right. A lot more on this coming up tonight. Gerri, thanks for being with. Be sure to catch Gerri and the CNN "SPECIAL INVESTIGATIONS UNIT" tonight for "Busted! Mortgage Meltdown." CNN teams up with "Fortune Magazine" to look at how the housing boom went bust. That's tonight at 8:00 Eastern right here on CNN.

CHETRY: Meanwhile, Ali Velshi joins us now. He's minding your business. You can call it the upside of the down dollar. We've talked a little bit about this, making this country actually cheaper to do business in and how American workers and companies could benefit.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: I'm trying to be a little bit good news this week where I can.

CHETRY: We appreciate it.

VELSHI: Yes. And this is one part of the good news. With the dollar being lower, we've actually seen the trend toward companies in other countries thinking about outsourcing to the United States. A few weeks ago, I reported to you about BMW announcing that it is going to increase its production in a plant in Tennessee because it's actually becoming cheaper to employ U.S. workers because of the low U.S. dollar. We also have a good trained workforce, lots of facilities, great infrastructure.

Take a look at the list put out by KPMG, of the most cost- competitive places to do business. The United States has moved into number three. Mexico ranks first, Canada number two. Canada, obviously because you're not paying health care costs to your workers in many cases although you pay it through taxes. The United States moving into three because of the dollar, the way the dollar has decreased in price.

So, that is actually a piece of good news for workers. It doesn't actually affect the dollar amount you get paid even though the dollar you get paid if it's weaker affects you in terms of inflation. It means that there are potentially more jobs coming to the United States. Now, for those of you who are workers, we're trying to give you extra good news.

And on the weekend show that I do, "YOUR MONEY" which airs on Saturdays and Sundays, we have been concentrating on issues that are helpful to the employee. So, what we're going to concentrate on is how to fix an unfair job review. If you get a job review that contains hidden bias in it, something that's not made clear. There are things in there that you can't really fix, you can't really address, we're going to speak exactly how you can take an issue with that.

So supervisors, beware, we are coming after you. We are going to get to the bottom of what you do if you get an unfair job review and the kind of consequences and penalties your supervisor can actually face for doing that.

ROBERTS: So this should be a warning to your supervisor?

VELSHI: This should be a warning to supervisors. All you supervisors out there, listen to what, beware.

ROBERTS: Your supervisor.

VELSHI: Mine and anybody else's who wants to listen to this. We are coming after you, supervisors. Saturday at 1:00 Eastern, Sunday at 3:00 Eastern.

ROBERTS: Don't give Ali a negative review, ever. It will be your nightmare that won't go away.

VELSHI: That's kind of what it's supposed to be.

ROBERTS: Ali, thanks.

CHETRY: Meanwhile, Ali Velshi and Gerri Willis and the rest of the CNN money team will be on at noon today. It's "ISSUE #1" right here on CNN. ROBERTS: Rescued from the war zone. How one group is helping to reunite soldiers with the four-legged friends that they left behind. We're going to meet the man who help inspire the program and his best friend. That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Ten minutes to the top of the hour. One of the stories we've been talking about all morning is this idea that Florida Senator Bill Nelson thinks that the process to pick a president in this country is horribly broken and needs to be completely revamped. What he wants to do is he wants to get rid of the current system of primaries and replace it with a system where there would be six rotating inter-regional primaries.

So, Iowa and New Hampshire would no longer go first. A variety of states would have an opportunity to go first. It would run from March until June. He also wants to get rid of the system of the electoral college for picking a president.

You know, currently it's not the popular vote in America, nationwide popular vote that chooses the president. It's the series of electoral college elections in each of the states. He wants it to become the popular vote.

So what do you think? It brings us to our "Quick Vote" question this morning. Should the Electoral College be scrapped and president is elected by a nationwide vote. Cast your vote at cnn.com/am.

Let's take a look. Right now, 88 percent of you agreeing with Senator Bill Nelson of Florida, saying, "Yes, get rid of it, throw it overboard, scrap it." Twelve percent like the idea so they want to hang on to that Electoral College. Keep those votes coming. We'll be checking check the results throughout the morning.

And now, let's go over to Kiran.

CHETRY: All right. We have a special treat with us today. You know, troops stationed in Iraq and Afghanistan often find themselves very lonely. They're in a country that they don't know a lot about, and sometimes the love of four-legged friend can really make all the difference in making it feel eye a little bit like home. You can see from the pictures the love of an animal and soldier, something that is a deep bond. But many of them have to leave their new friends behind when their tour ends.

Now though, there is a program that goes that extra mile, helping bring U.S. troops and reuniting them with the dogs that they've grown to love.

Former navy reservist Mark Feffer helped inspire this program. He joins us now with his dog Cinnamon. Also, Cinnamon's journey to America was the inspiration behind the book, "44 Days Out Kandahar." The amazing journey of a missing military puppy and the desperate search to find her. That was actually written by Mark's sister, Christine, right? Mark, thanks for being with us. So, tell us how, when you guys were over there, you were training Afghan ...

MARK FEFFER, OPERATION BAGHDAD PUPS: Yes. We were monitoring the Afghan army.

CHETRY: How did these dogs even come into your life?

FEFFER: Well, she was on the camp when I arrived. She popped out from under a building while I was there, and you know, it's very, very -- it provides a great distraction for the men to be able to take a five-minute break, men and women there, from their, you know, their daily mission, what their daily mission is, and that break is very, very important for serving over there because it really gives you a distraction.

CHETRY: So, these are just strays that...

FEFFER: Well, they're strays when they come to the camp, but she was very well taken care. She was fed everything from the chow hall, we also had water, you know, bowls all over for her and dog food folks would send from home, lots of toy and a collar and all those sort of things.

CHETRY: Now, although it is against military policy to take animals home and to have pets and mascots, they do provide these exceptions because I think they realized just how much of a difference it makes. How were you able to even begin the process of trying to take her back home?

FEFFER: Well, we knew we had to use, you know, civilian agencies to bring her home. The unfortunate thing in her case was that the gentleman that had volunteered to take her home gave her away, abandoned her, in mid-transit.

CHETRY: Couldn't get her on a flight.

FEFFER: He had a problem with a flight and he gave her to the baggage handlers. At that point, after he abandoned her, she went missing and we looked for her for 44 days. My sister at that point got involved, launched the international search to find Cinnamon. We were able to find her, get her back to a military base, and then start all over again with trying to get the transport done.

CHETRY: That story in and of itself is pretty miraculous, that you were able to find her in a world this big and how had many people helped which is what inspired the book. But then it also helped launch this Operation Baghdad Pups.

FEFFER: Yes.

CHETRY: What, how is that organization working to help people who want to bring these animals home from the war zone?

FEFFER: Operation Baghdad Pups is an organization, a resource for a soldier or a service member to contact, to help when they have bonded with an animal that they want to return to the states. It's a program that provides some coordination of medical care, testing, things like that, as well as transportation.

CHETRY: It's a long and expensive and arduous journey.

FEFFER: It is. And that's one of the things that we are so thrilled to be doing with "44 Days Out of Kandahar," is donating a portion of our profits to the International SPCA to support Operation Baghdad Pups.

CHETRY: It's more than just getting a new pet. What is that bond like, when you're facing life and death, you're in a foreign land, and you're able, as you said, just to sort of get away from that by falling in love with an animal?

FEFFER: All right. It's almost indescribable to tell you what that means, to take five minutes and just to cuddle or to sit down and read a book with the dog by your side and petting the dog. I mean, that's been very well documented the effect these dogs can have on people in general, but in the war zone especially.

CHETRY: How do the dogs adjust, by the way? I mean, it's a huge difference, not only from where they came from but then the support and then coming a life in the U.S.

FEFFER: Well, she's very laid-back. The transport was no problem for her, as you can tell but...

CHETRY: This is how she was in the cargo hold.

FEFFER: Some of the dogs have adjustments to make because they don't have a traditional pet frame of mind.

CHETRY: Right.

FEFFER: They are cared for by a hundred men and women. They have nobody that they answer to in particular. So they don't know commands. They don't know -- they're basically strays. Or they're borderline of a stray dog. But most of them adjust really well. You know, otherwise, the men wouldn't have bonded with them to try and bring them home.

CHETRY: What about you? Is this a constant reminder of your time there?

FEFFER: It is. It's a mixture of disbelief and joy and elation every time, when there's a quiet moment that I have with her that she's even made it 7,000 miles from home after being missing for 44 days.

CHETRY: Well, who knew what she was able to inspire, little Cinnamon over here? She certainly doesn't but former navy reservist, Mark Feffer, thanks so much for joining us this morning. By the way -- I think she's getting a little attached to me.

For more information on how you can help Operation Baghdad Pups. The Society for the prevention of cruelty to animals Web site, spca.com, you can also go visit our Web site cnn.com/am. We're linked to it.

FEFFER: Or our Web site, 44-days.com.

CHETRY: All right, all of it. Thanks so much for joining us and thanks for bringing Cinnamon with you today -- John?

ROBERTS: Four minutes now to the top of the hour. Two embarrassing nuclear blunders has Defense Secretary Robert Gates putting his foot down. What he is asking military leaders to do to safeguard the country's nuclear arsenal. That's coming up.

Flashpoint. North Korea fires missiles overnight. The nuclear stalemate hits a critical level.

It's the economy.

(BEGIN VIDEO CLIP)

OBAMA: there is no dividing line between Main Street and Wall Street.

(END VIDEO CLIP)

ROBERTS: The candidates' solution.

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