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Iran Test-Fires Missiles; Thousands Evacuated in California Fire; FEMA Trailer Manufacturers Grilled by Congress; Details Emerge of Colombia Hostage Rescue; Medicare Patients Face a Real Mess; Newborn in Texas Dies After Overdose Given at Hospital; Convicted Polygamous Sect Leader Warren Jeffs is Hospitalized

Aired July 09, 2008 - 13:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: They say their finger's on the trigger, and they mean it. Fighting words and explosive action from Iran.
DON LEMON, CNN ANCHOR: Plus, a Colombia hostage rescue mission. It's been called daring and ingenious, but was it just smoke and mirrors?

PHILLIPS: And that's a whole lot of lava. Forget what you saw on the Fourth of July. We've got a real fireworks show.

Hello, everyone. I'm Kyra Phillips live in New York.

LEMON: And I'm Don Lemon live here at the CNN world headquarters in Atlanta. You are in the CNN NEWSROOM.

Fighting words, deadly threats, tensions soaring this hour between the U.S. and Iran. Iran test-fired at least seven long- and medium-ranged missiles today in what officials say is a warning to the U.S. and Israel. A commander of Iran's revolutionary guard says Iran is ready and willing to retaliate against any U.S. or Israeli attacks.

(BEGIN VIDEO CLIP)

GEN. HOSSEIN SALAMI, COMMANDER, REVOLUTIONARY GUARD (through translator): We want to tell the world that those who conduct their foreign policy by using the language of threats against Iran have to know that our finger is always on the trigger. And we have hundreds, even thousands, of missiles ready to be fired against pre-determined targets.

We will chase the enemies on the ground and in the sky. And we are able to react strongly to enemy threats in the shortest possible time.

(END VIDEO CLIP)

LEMON: The missile test comes as Iran conducts war games in the Strait of Hormuz, a strategic waterway at the mouth of the Persian Gulf. About 40 percent of the world's oil passes through that strait. Iran has threatened to shut down traffic in the strait if attacked.

Let's take a closer look at the long-range missile reportedly fired. It is a new version of the Shahab, which means "meteor" or "shooting star," in the Iranian language of Farsi.

Now take a close look at this map. The missile has a range of more than 1,200 miles and can carry a one-ton conventional warhead. That would put Israel, Turkey and the Arabian Peninsula, Afghanistan and Pakistan within striking distance.

The missile's believed to have been updated with Russian and Chinese help.

PHILLIPS: We have team coverage on this story. Let's go ahead and start with Zain Verjee at the State Department.

Zain, a briefing underway right now, I understand. What's the reaction been like from there so far?

ZAIN VERJEE, CNN CORRESPONDENT: Well, the U.S., Kyra, really swiftly condemned Iran. State Department spokesman Sean McCormack says that the tests really underline the threat that the world faces in trying to deal with Iran.

The top diplomat on Iran is telling lawmakers right now that Iran is a serious problem but that the U.S. shouldn't over-estimate the threat that Iran poses.

(BEGIN VIDEO CLIP)

WILLIAM BURNS, UNDERSECRETARY FOR POLITICAL AFFAIRS: To be sure, the Iranian regime is a potent regional adversary, tactically cunning and opportunistic and good at asymmetric conflict. But it is not 10 feet tall. It often substitutes assertiveness and self-aggrandizing announcements for enduring power, promoting the illusion of Iran as a real counterweight to the United States.

(END VIDEO CLIP)

VERJEE: Now, the U.S.'s game plan, Kyra, is really to use a two- track approach with Iran, on the one hand squeezing it with sanctions, and on the other hand offering some incentives to get it to get rid of its nuclear program.

But that's not really gotten anywhere. And lawmakers today are criticizing the U.S. for failing to deal with Iran effectively -- Kyra.

PHILLIPS: Zain, you know what's interesting? You know, the U.S. military will put carriers out there in the waterways to send a message to Iran. Now Iran, with these missile tests, trying to send a message to the U.S. So there is that tension there. Is there any hope that they could have diplomatic talks with Iran?

VERJEE: Well, that is the hope. But the U.S. is saying that we're not going to have any diplomatic talks with Iran unless Iran suspends enriching uranium. The reason we care about that is because you need uranium to build a nuclear bomb.

So the Iranians have an offer on the table, a package of incentives the U.S. has put out there. And they're hoping that the Iranians say OK. But Iran has always said, "That's our red line. We have a right to enrich uranium." They say for peaceful purposes.

PHILLIPS: Zain Verjee, thanks so much.

And from the White House, more strong reaction. A National Security Council spokesperson says, quote, "Iran's development of ballistic missiles is a violation of United Nations Security Council resolutions and completely inconsistent with Iran's obligations to the world."

LEMON: John McCain and Barack Obama are calling the Iranian missile test a dangerous situation, but they differ on how they would handle the threat from Iran. To Washington now and CNN's senior political analyst Bill Schneider.

Bill, what are the candidates saying about this?

BILL SCHNEIDER, CNN POLITICAL ANALYST: Well, they're both talking pretty tough.

In a statement released this morning, Senator Obama said, quote, "Iran now poses the greatest strategic challenge to the United States in the region in a generation." And he adds, "As president I will do everything in my power to eliminate that threat. And that must begin with direct, aggressive, and sustained diplomacy."

Now, John McCain, having responded to that tough talk, talked a little bit tougher. He said action is what is necessary now. Lines of communication are fine. An apparent criticism of Obama's reliance on diplomacy and one-on-one contact between the United States and the leader of Iran.

He says we need to go beyond diplomacy and talk about action, which he defined as significant, meaningful, and impactful sanctions against Iran.

LEMON: And Bill, you mentioned tough talk. Is it just me or does it seem like the candidates are -- are talking tougher on this Iranian issue? And if so, why is that?

SCHNEIDER: Yes. Well, they both want to demonstrate that they're capable of dealing with national security. This is an issue in which John McCain claims that he has greater experience. So Obama is trying to -- trying to make the point that he can be tough; he can be strong; he can be steadfast.

Both candidates favor diplomacy, but Obama talks about what he calls, quote, "aggressive diplomacy." In fact, both candidates support sanctions, but McCain talks about, quote, "significant, meaningful, and impactful sanctions."

What I think we're seeing is Obama's talking tough; McCain is trying to talk tougher, but short of military action. Because that would really spook a lot of American voters if they thought, my God, we're going -- we're on the brink of war and this could have disastrous consequences for the world's oil supply.

LEMON: Our senior political analyst, Mr. Bill Schneider. Thank you very much for that -- Kyra.

SCHNEIDER: Sure.

PHILLIPS: Homes burned to the ground and hundreds of more in danger right now. A fast-moving fire has residents on the run in Paradise, California. That's just north of Sacramento. The fire there has doubled in size now.

And despite the best efforts of firefighters, rubble and ash are all that's left of around two dozen homes in Big Sur. That fire's now 27 percent contained.

And then farther south, firefighters gain more on that Gap Fire near Goleta, California. Two hundred and fifty homes are still in the fire's path.

Chad Myers tracking the conditions for us across California, all of Southern California there.

Hi, Chad.

CHAD MYERS, CNN METEOROLOGIST: Hi, Kyra.

It is just so hot out there today. No real break for you tomorrow from Goleta, to Big Sur, to the bayou area, up to the north, fire just ongoing. And then a bit of containment because of the lack of wind. That's some good news.

But these heat -- and just excessive heat warnings, advisories even through Sacramento. Temperatures today over 100 degrees all the way through. You get away from the ocean a little bit, and you're well up above 100 degrees, L.A. You get close to the ocean, you're 79. You get to the inland empire, you're going to be pushing 110 maybe 115. Vegas today 112, Phoenix 109.

Here's where the fire stands. Still some big-time numbers here: 630,000 acres. You look at the last few years, which have been big years. Now that's not even coming close, just way over that now. The biggest year, 1936. But you have to realize in 1936, they didn't have air tankers and all of these helicopter drops. They were just fire -- there were just fighting those guys on the ground. And that's what's going to go on again for today and tomorrow.

Not a chance of any showers out there in the west. Couple of rain showers in the east and across the southeast. We're still kind of watching Bertha out here in the middle of the Atlantic ocean, but it's just spinning basically doing nothing. The surfers are happy. Surf's going to be up here pretty soon. All those waves are going to be hitting the East Coast.

Watch out if you're not a surfer and you're not experienced, because there will be some rip currents, as well. That water goes over the sand bars and wants to go back out very fast again. And you will see a lot of those rip currents. You don't want to be caught out in that. But if you're a surfer, you're smiling today -- Kyra.

PHILLIPS: All right. Are you a surfer, Chad?

MYERS: I've done it a little bit when I used to live up in New Jersey. But I can't say after the -- my added few pounds of getting married, I'm going to get on a board anymore. It's not even going to be a long board; it's going to be a fat board.

PHILLIPS: Well, mine's pretty long and pretty fat, so you can always borrow that one. OK. I've had it since, like, the sixth grade.

MYERS: OK.

PHILLIPS: OK, Chad. We'll be talking. Thanks.

MYERS: OK.

LEMON: All right. Now we go from water to fire out on the West Coast. Joining us now is a director of emergency operations center. We're talking about those fires, the Paradise fires in Butte County.

Joining us on the phone now is the director there, Chuck Rough.

Chuck, tell me what's going on. Last we heard 3,200 people had been driven from their homes.

CHUCK ROUGH, DIRECTOR, EMERGENCY OPERATIONS CENTER IN PARADISE, CALIFORNIA: Well, we actually now have evacuated from Paradise almost 14,000 people. And our total population's about 27,000.

LEMON: Fourteen-thousand people. So this is what we've had.

ROUGH: Fourteen-thousand.

LEMON: What do you have on containment now?

ROUGH: Well, there's not much contained. What we have is a fire that now runs parallel to the eastern boundary of our community. They are hoping today to see westerly winds that would drive that away and also create some visibility. They could not get any air support into this area at all yesterday because of the inversion layer in the dense smoke.

LEMON: OK, so we've gone from 3,200, you said, almost to 14,000 people, which is really unbelievable. And I was listening to our Chad Myers, who was talking about the heat and the conditions out there. The heat, I'm sure, not helping the fire-fighting effort. What about the winds, as well?

ROUGH: Well, last night, we were holding our fingers, because we thought the wind would come up and bring those fires into Paradise. It didn't happen. They didn't cross the Feather River. So we had a very, very good outcome for the evening. But today we're sort of holding our breath, literally and figuratively speaking. LEMON: Yes, and I'm going to turn -- I don't know if, Chad, if you're listening, Chad Myers, right behind me. I don't know if you have a Google Earth or something that you can show me on this fire.

MYERS: I do and I have a question with that great news you had about the wind yesterday. Were you able to build any backfires to keep it away from your community?

ROUGH: Well, what we did was, they actually had set a backfire on Monday that as I understand it backfired on them and crossed over some defense lines.

MYERS: Oh, is that right?

ROUGH: That's what started this problem -- aggravated the problem. But that was -- that was a legitimate effort on their part.

We have created, on our own initiative, a dozer line about six blades wide. We worked on it all last night on the northeast section of our community. As further protection. And of course, they've got about -- they've got about 60 fire-fighting engines on our ridge alone right now. They're all in staged areas.

LEMON: All right. Chad Myers, thank you very much for helping me out with that, Chad.

And Chuck Rough, who's the director of emergency operations there. We're talking about the fires in Paradise. We've gone from 3,200 homes evacuated now to about 14,000. And we wish you guys the very -- the very best out there. Thanks again for joining us, sir.

ROUGH: Thank you so much.

LEMON: Let's go now to Reynolds Wolf. He is in Big Sur, and we understand some folks are being allowed back in their homes, Reynolds, just to check on their property.

REYNOLDS WOLF, CNN METEOROLOGIST: Yes, and what a terrifying prospect that's going to be, people going back today, having no idea what they're going to find when they pull up into the driveway.

But the reason why they're able to go back today is because the hard work of the men and women in places like here. This is fire camp. Now, three weeks ago, this place was known as Goleta State Park, but since then, it's turned into a virtual city. You see the buildings popping up here. It's kind of the epicenter, where guys come back to get a shower, get something to eat. The men and women working hard. Some 2,300 people have been battling this huge fire.

And speaking of this fire, take a look at this, Don. You'll notice in a couple of places -- this map covers much of the central coast. You see the places that are highlighted by the yellows here and there. Those are the places where the fire is in some places going up to 1,400 degrees Fahrenheit, popping up in a few places.

The fire not really just a widespread event but kind of pulsates across the landscape.

Something else to show you on the other end of the map, just the southeastern corner. You've got two fires. You've got part, of course, the fire here, basic complex. But then over here in the far corner of this map, this is the Indians fire.

You've got two trails that cut into the landscape, two bulldozed trails. What they're trying to do is actually encourage this blaze to go eastward. When it goes eastward through this vegetation that's been bordered on both sides by bulldozer trails, it's going to go right here into this area and then it's going to run out of the vegetation. What they hope, what that's going to do is actually cause the fire to burn out.

Very quickly, though, they do have other work cut out for them. They have a lot of this dry vegetation up in the hill, but at the same time, you've got very low humidity. With that the breeze is going to be very strong this afternoon. Those red flag warnings are going to remain in effect for a good part of the week. It's going to be a tough time, but they're up to the task.

Back to you.

LEMON: Reynolds, that dryness, that's the issue out there. We'll be checking back with Reynolds Wolf in a bit. Reynolds, thank you very much for that -- Kyra.

PHILLIPS: Well, we've talked a lot about this: FEMA foul-ups post-Katrina. And there have been quite a few. We've heard a lot about them, especially those trailers tainted by formaldehyde.

Members of Congress right now asking even more questions today, and our Sean Callebs is monitoring developments from New Orleans.

Sean, what's happened so far?

SEAN CALLEBS, CNN CORRESPONDENT: Well, Congress today has the manufacturers on the hot seat. We can dip into that live picture there. The four manufacturers of the trailers in question here, Gulf Stream Coach, Pilgrim, Keystone and Forest River.

Now the manufacturers have been defending themselves for the past hour saying, "Look, when we delivered these trailers, and even up until now, there's no set standard for how much is too much when it comes to exposure for formaldehyde."

The CDC says that 80 parts per billion, that can hurt people. And if you have a sensitivity toward formaldehyde, then it can make things like breathing even more different.

Now the reason this was even cropping up, formaldehyde is something that's used in processing wood, plastics, basically everything that goes into build a trailer.

Yesterday we spent some time with Carolyn Selez (ph). Like so many trailers down here in the Gulf Coast area, hers is on her property, and it's there while she renovates her home.

Well, her formaldehyde level was so high that she moved into her house long before the renovation was anywhere near ready for somebody to move in. But she chose to do that because, Kyra, FEMA came to her several months ago and said, "You know what? You have an elevated level of formaldehyde." And that can, among other breathing difficulties, it can also cause cancer.

So today we're hearing from the manufacturers. They're defending themselves. But Congress not letting up. A lot of people say, "Look, was there pollution? Was this greed? Is that what led to rushing these trailers here?

But the manufacturers say, "No. You asked for 50,000 trailers two days before the storm. We did what we could to get them down to you" -- Kyra.

PHILLIPS: All right. We'll continue to monitor. Sean Callebs there, live in New Orleans. Thanks, Sean.

LEMON: A big decision from the Pentagon today involving a huge military contract worth tens of billions of dollars. Billions with a "B."

The Defense Department has decided to reopen the bidding for a $35 billion contract to build Air Force tanker planes. That's according to Robert Gates. Government auditors have said that serious errors were made when the original bid was awarded to Northrop Grumman.

Boeing was the big loser in the original deal, and many members of Congress were also critical of that decision.

PHILLIPS: We've got some intriguing new information to tell you about involving the Colombian military's mission that freed 15 hostages, including three Americans. We're going live to Bogota.

LEMON: And it seems straight out of a science-fiction movie: killing machines doing their work from the air. But their pilots are thousands of miles away. We'll go live to Nevada for details.

And the Medicare mess. Will Congress reverse some cuts in the huge program. We'll check in with medical correspondent Judy Fortin.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: You're in the CNN NEWSROOM. I'm Kyra Phillips. Comic book controversy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is a disgrace. Look at how they portray his mother, with these huge ethnic lips, darker skin, making her -- making her look like the big gorilla and the child looking like the little monkey.

(END VIDEO CLIP)

PHILLIPS: African-Americans are angry, but Mexicans say something's been lost in translation.

(COMMERCIAL BREAK)

LEMON: A gun battle erupted outside the U.S. consulate in Istanbul, Turkey, today. At least six people were killed, including three police officers and three attackers. The Turkish government and the U.S. ambassador to Turkey called the attack an act of terrorism. No one has claimed responsibility.

A deadly attack in Sudan's Darfur region today. The U.N. says dozens of gunmen in SUVs ambushed U.N. and African Union peacekeepers, killing at least seven and wounding 22. A U.N. spokeswoman denounced the attack as outrageous and unjustified.

It is the latest in a series of attacks since the joint U.N.- African Union force took over peacekeeping duties in December. Darfur conflict -- the Darfur conflict has claimed up to 300,000 lives and uprooted 2 1/2 million people since 2003.

A string of bombing attacks killed at least 11 people in Iraq today. Five civilians died in a suicide car bomb attack against an Iraqi army convoy in the northern city of Mosul. In Fallujah, back- to-back bombings killed six people and wounded more than a dozen others. Four police officers are among the dead.

PHILLIPS: Well, the dramatic rescue of those hostages held by FARC rebels in Colombia, was it really a rescue operation? Or did something else go down?

Our Karl Penhaul is in Bogota with new information.

Karl, you've been actually working your sources. We were able to talk earlier. And it caught my attention that it seems a little fishy here. There are a couple of question marks on how this really went down.

KARL PENHAUL, CNN CORRESPONDENT: I think there are many question marks, Kyra. As you know from your own experience, a lot of times when we see these kind of covert operations, these covert ops, we never will get the full truth. The military authorities will keep something back from us. And there's certainly a sense here that, although we're not being spun any lies, we're certainly not being -- getting told the full truth.

Former Colombian military intelligence officer said to me only yesterday, he said, "Hey, Karl, this all sounds too good to be true, doesn't it?"

I think what we're seeing here is that there's been a mixture of electronic intelligence gathering and human intelligence gathering. And as much of a rescue operation, this wasn't a kind of classic rescue operation where it's loads of smoke and bang up the middle. This is what the Colombian military are terming an infiltration and penetration operation.

You've got electronic intelligence gathering, in which the Americans may have been involved. Certainly, the Colombians were. You've got human intelligence gathering, which seems to have been solely a Colombian army operation. There may be elements there where they got FARC guerrillas to switch sides. Money may have changed hands there, according to sources close to military intelligence.

And then after that, you've got this big deception. Like I say, we're likely never to know the full details of this operation, but of course, the good news is that 15 hostages are now home free, Kyra.

PHILLIPS: But you bring up a good point, that while this is being hailed an incredible commando operation by Colombian forces, and also the fact that U.S. Special Forces sort of helped in the teaching of how to take down this type of operation, what you're saying, it's possible that money played a bigger role, that millions of dollars could have been paid to FARC guerrillas to simply switch sides.

PENHAUL: Right. What the Colombian government has said on that point is that it's categorically denied that any ransom had been paid and that also categorically denied is that money was specifically paid for the rescue operation.

Now according to sources that I say are best categorized as close to military intelligence, they say none of that is a lie. That the point that the money may have changed hands is getting some human couriers used by the FARC to switch sides. They may been paid up to $4 million, according to my sources. And then they became an integral part, ferrying messages back and forth from Colombian military, posing as guerrilla commanders, down to the guerrilla units on the ground who were holding these hostages.

And all this along, with the intelligence -- the electronic intelligence, an interception of communications, then created such a situation that the FARC effectively lost control and command. Command and control. They didn't know who they were talking to, and they assumed that the orders they were getting -- in fact, were bogus orders, but they assumed that they were real orders, Kyra.

PHILLIPS: Interesting investigating, Karl Penhaul. Great job out of Bogota, Colombia. Thanks so much.

And for more on this story, be sure to catch Larry King's exclusive interview with former hostage Ingrid Betancourt. That's tonight on "LARRY KING LIVE," starting at 9 Eastern only here on CNN.

LEMON: Iran's missile testing. Just how serious is it? We'll speak with an Iranian expert.

And you've seen the tragic video. A woman dies on the floor of a hospital. Now her family's taking action.

(COMMERCIAL BREAK) LEMON: OK, here we go again. Try to keep a good attitude about this. It'll be over soon.

Hundreds of airline employees scheduled to be grounded by layoffs. Comair is just the latest carrier to announce cuts. The Delta subsidiary expects to lose about 300 pilots and 220 flight attendants starting this fall. Now, Comair had already announced it would take up to 14 small jets out of service as part of Delta's overall cost reductions.

The effects of the slowing economy are spreading, hitting the retail sector hard. Susan Lisovicz on the floor of the New York Stock Exchange, looking very dapper, I might add -- I should say, beautiful -- in yellow. But we're not just talking clothing here. You're looking nice. We're talking everywhere. Mattresses, everything, linens.

SUSAN LISOVICZ, CNN CORRESPONDENT: That's right, apparel, you name it because, you know, retail -- let's face it -- depends on consumer spending. And consumers are not spending.

So you mentioned mattresses, Sealy's reporting a 26 percent decline in second-quarter earnings. What's interesting here, Don, is that it has fewer furniture outlets to distribute its mattresses because a whole bunch of them have closed, like Levitz and Wickes. It's also hit, like all of us, by higher costs.

Sealy's will raise prices but expects its consumer spending to slow.

"Wall Street Journal" says bankrupt Linen 'N' Things will close an additional 87 stores. It's already closed more than 100 stores.

And then listen to this, Don, Steve & Barry's, which was so popular, really caught on like wildfire. It has just filed for bankruptcy. It's got 276 stores, was not able to raise emergency funding, Don.

LEMON: Oh, boy. OK, so I thought everything at Steve & Barry's had ultra-low prices. I would think they would be popular right now.

And just as I say that, I've got to tell you. I was in New York, and you know Century 21, another low pricing, got a bunch of neckties. That store was full. But I thought Steve & Barry's -- I didn't think they'd be affected.

LISOVICZ: Well, Century 21 is just a couple of blocks from Wall Street.

LEMON: Yes.

LISOVICZ: And believe me I'm there frequently. And there are a lot of international tourists there with the cheap dollars.

LEMON: Right.

LISOVICZ: They all go there, and they pay in cash.

But Steve & Barry's is suffering because what are we buying? We're buying gas. You know, we're spending on non discretionary items.

And you're right. Steve & Barry's, many of its items cost less than $10. It also became real popular because a lot of celebrities have done lines, including Venus Williams, Sarah Jessica Parker, Amanda Bynes. But cheap -- ultra-cheap clothes mean razor-thin profit margins. And yes, it was designed to thrive in a tough environment. But between the slowing sales and the razor-thin profit margins, it's in trouble.

And guess what? Slow spending, no spending today on Wall Street. The Dow right now is down 62 points. The NASDAQ is down 20. And oil is up 75 cents -- Don.

LEMON: All right, Susan. We'll check back with you.

And I want you to listen to this, because we just got this in. This is just coming in. CNN confirms. I just want to tell you, we told you about Comair and their layoffs. Well, CNN is now confirming that Northwest Airlines will cut 2,500 jobs due to capacity reductions taken to address the high oil prices.

Northwest also says that it will begin charging $15 for a passenger's first checked bag and service fees for frequent flier tickets. It also will boost fees for ticket changes. So, there you go. Northwest also cutting back, as well. And charging customers more.

The next half hour of the CNN NEWSROOM starts right now.

Hard to smile when you hear all that bad news. But hello, everyone. I'm Don Lemon, live here at the CNN world headquarters in Atlanta.

PHILLIPS: And I'm Kyra Phillips, live in New York. You're live in the CNN NEWSROOM.

I want to take you straight to Pontiac, Michigan. Michelle Obama, the wife of the presidential nominee Barack Obama, speaking to a group.

Let's listen in.

(JOINED IN PROGRESS)

MICHELLE OBAMA, WIFE OF SEN. BARACK OBAMA: ... sitting on this stage, all of whom we are grateful to for being willing to share their stories. For being bold, to even talk about some of the problems and the challenges that we face. We will open it up to all of you for questions.

But please remember, these conversations are just the beginning. I have been doing these conversations for a year and a half. We will keep doing them through the general election and if Barack has the honor of becoming the next president of the United States...

(APPLAUSE)

... we will continue these conversations and work on solutions in the years to come. Thank you so much.

PHILLIPS: Well, Michelle Obama, visiting Michigan today. She was discussing the challenges facing women and families. John McCain, we are told, will be speaking in the same type of town hall format tomorrow, in Michigan. We'll continue to monitor this. And as she takes questions and answers from the crowd there, we'll let you know what they talk about.

Well, it sounds like some kind of video game. But this is reality and it's deadly serious. U.S. pilots inside a military base thousands of miles from the field of battle. They orchestrate air attacks on enemy targets. It's an exclusive report you won't want to miss.

LEMON: And he was supposed to be his parents' caretaker. But he allegedly left them in a sweltering car for hours. We'll tell you what happened.

PHILLIPS: And how sweet? a Texas teen accused of trying to drug local cops. We'll tell you how the cookie crumbles.

(COMMERCIAL BREAK)

LEMON: OK, we have certainly been hearing lately a lot about this. And it seems like the talk has been ratcheting. As we have mentioned, Iran's flexing its military muscle today. Test firing several missiles and sending a direct warning to the U.S. and to Israel -- not to even consider an attack.

(BEGIN VIDEO CLIP)

GEN HOUSSEIN SALAMI, CMDR., REVOLUTIONARY GUARD (through translator): We want to tell the world that those who conduct their foreign policy by using the language of threats against Iran, have to know that our finger is always on the trigger. And we have hundreds, even thousands of missiles ready to be fired against predetermined targets. We will chase the enemies on the ground and in the sky. And we are able to react strongly to enemy threats in the shortest possible time.

(END VIDEO CLIP)

LEMON: Joining us now in our Washington studio with his take on this, is Trita Parsi, of the National Iranian American Council.

Trita of course, thank you for joining us.

TRITA PARSI, NAT'L IRANIAN AMERICAN COUNCIL: Thank you for having me.

LEMON: Is it fair to say -- is this a fair threat or is it more of a deterrent?

PARSI: I would say this is more of a deterrent, but it's nevertheless, not a helpful statement to make in this situation. Because there is almost no mechanisms to diffuse tensions between these countries because they're not talking to each other and United States and Iran aren't talking to each other. So, if a mistake were to occur, it could spark a wider conflict because there's no way to diffuse those tensions.

LEMON: OK. You heard what they said just before us. I want to play for you what Admiral Mike Mullen had to say. And this is a really strong statement last week, which many people may not have grasped just how serious it is. OK, we don't have it. But I'll tell you what he said.

Basically he said that the U.S. could not afford to get into a war that was sparked by Israel. Because we are stressed in Iran and Iraq. And we don't need a third war.

PARSI: Correct. I think this was a rather strong statement by Mullen. Basically making it clear that if Israel were to attack Iran, America would get sucked into that war and America currently cannot afford a third front. So, it's kind of a signal to the Israelis, cool it down a little bit because America cannot step in and finish whatever you would try to start.

LEMON: And Trita, also, Secretary Gates -- Robert Gates said today, saying, the Defense Secretary -- and I'm sure you heard what he had to say. Everybody recognizes the consequence of any kind of conflict. And basically saying that the government -- our government was doing everything it could to avoid that.

Why is that important that he's speaking out about that?

PARSI: I think it's very important because, in the last couple of weeks, the Pentagon has been conducting a campaign, trying to convince the Israelis not to do anything that the Pentagon clearly thinks would be a stupid thing to do because America cannot start -- have a third front in this war.

And Gates' comment is signalling exactly that. America is not interested in getting into another war. And what the Iranians are doing is not helping. Because this type of a test, this type of a thing that will be perceived as a provocation in Israel, is only going to help raise the temperature when America wants to lower it.

LEMON: OK, last question. And this is really the meat of it. Everybody wants to know, how is this going to affect me? Both Iran and Israel are paying close attention to the election here and also to Barack Obama's upcoming trip to the Middle East.

How is this factoring into that? You said that this is -- we should be paying attention to this. And they are paying attention to this, why?

PARSI: Well, everyone is paying attention to whether it will be Barack or whether it will be McCain because they represent two starkly different approaches in foreign policy towards the Middle East.

Obama has made it very clear he wants to pursue more diplomacy. He believes that diplomacy has not been exhausted in any way, shape or form. McCain has been much more in line with the current Bush policy in which diplomacy is not necessarily at the center of the policy. And every country in the region right now is actually looking more towards what's going to happen in '09 than what the Bush administration is going to do in the next six months.

LEMON: Right, but if Iran makes a deal between the U.S., Israel is saying that it's not going to be good for them, at least security wise.

PARSI: There's a concern in Israel that if Iran and the United States negotiate, they will come to a deal that will be good for the United States but may come at the risk of Israeli security interest.

LEMON: Trita Parsi, we appreciate it. Thank you, sir.

PARSI: Thank you for having me.

LEMON: Kyra.

PHILLIPS: A remote control squadron patrolling the skies over Afghanistan. The pilots 7,000 miles away. CNN is the first news network allowed inside the command center.

Our senior Pentagon correspondent Jamie McIntyre, live at Creech Air Force Base, outside Las Vegas.

Jamie, I know you've been working this for a while. Great job.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, thank you Kyra.

Well, you know the really interesting thing about this base is that the air crews commute here to work just like you commute to work at CNN headquarters in Atlanta. Except when they get here, they step inside a room and are effectively inside the cockpit of a fighter plane, controlling it from here while they're over a battlefield, either in Iraq or Afghanistan.

Right now the newest, best weapon they have is the Reaper, which is only being flown in Afghanistan. It is described by some people here as a predator on steroids. It carries a much greater pay load. About the size of an F-16. And while I was here, I got a first hand tour of the Reaper from the wing commander, Colonel Chris Chambliss.

(BEGIN VIDEOTAPE)

(on camera): So this is the Reaper?

COL. CHRIS CHAMBLISS, U.S. AIR FORCE: Sure is.

MCINTYRE: : And I take it that's its unblinking eye. CHAMBLISS: That is the unblinking eye. So, that's the sensor that we use similar to Predator, only more capable, bigger, better and more capable than Predator.

MCINTYRE: How big is this?

CHAMBLISS: You know, the airplane is about a 68-foot wingspan. About the size of an A-10.

MCINTYRE: Wow. And these are actual strikes that have taken place?

CHAMBLISS: They sure have. This is the squadron flag ship. And so these are the strikes that the squadron has taken.

MCINTYRE: Bombs or missile dropped in Iraq or Afghanistan?

CHAMBLISS: Both.

MCINTYRE: It's an attack plane.

CHAMBLISS: Absolutely.

MCINTYRE: And this is where the weapons would go?

CHAMBLISS: Yes. The 500-pound laser guided bomb hangs right from here. And then over here would be two hellfire missiles that we mount here.

MCINTYRE: And as a former F-16 pilot, how does that compare to what you took up?

CHAMBLISS: Well, in essence you know, this airplane can carry the same bomb load that I carried into the flight. So, it's pretty impressive capability.

MCINTYRE: Can you do the same thing an F-16 could do?

CHAMBLISS: Yes, everything except pull Gs and go fast.

MCINTYRE: And put the pilot at risk.

CHAMBLISS: That's exactly right.

(END VIDEOTAPE)

MCINTYRE: Now, as you said Kyra, CNN is the first news organization to actually be allowed to sit in the control room while actual Predator and Reaper missions were underway.

We're going to bring you a little bit more about that later this afternoon in the "SITUATION ROOM" with Wolf Blitzer. But, suffice it to say that it's very interesting to just sit there and watch as these live feeds come in and watch how the air crews here, coordinate with the people on the ground, on the front lines, on the wars in both Iraq and Afghanistan -- Kyra. PHILLIPS: You lessen the risk of losing a life and you've got more air power. Doesn't get more better than that.

Jamie McIntyre, thanks.

LEMON: Medicare patients face a real mess. And time's running out for help from Capitol Hill. Will you or your parents be shut out of your doctor's office? We've got a live update for you.

PHILLIPS: Are your wheels hot with car thieves? Well, check out the latest list to see if they're pinching your ride.

(COMMERCIAL BREAK)

LEMON: A Senate Medicare bill looks to be in critical condition. Time is running out for lawmakers to reverse cuts to what doctors are reimbursed. Now, the Senate is set to take up the matter in just a few hours.

And for a look at the possible impact, joining us now is our medical correspondent Judy Fortin.

Judy, this affects just about every working person in the U.S.

JUDY FORTIN, CNN MEDICAL CORRESPONDENT: You know, Don, a huge impact. Just how huge? Let me show you some numbers.

There were over 42 million seniors on Medicare and another 9 million members of the military and their families have their supplemental health insurance, which is tied to Medicare rates. Well, their doctors will get a 10.6 percent pay cut starting this Monday, unless Congress acts this week.

And to bring you up to speed on the matter, at the end of last month, the House of Representatives voted overwhelmingly to support a bill which would reverse the cuts for physicians who treat Medicare patients. The Senate effort fell one vote short of even taking up the bill, failing to act before the July 1st deadline. Because many senators disagreed with the House-passed solution to replace money that would be saved by the cuts.

Now the Department of Health and Human Services stepped in and put a ten day freeze on the cuts. That expires at the end of this week. And if the cuts aren't reversed, some say they'll be permanent. Many doctors we've spoken with are calling this a Medicare crisis.

(BEGIN VIDEO CLIP)

DR. WILLIAM RICH, OPHTHALMOLOGIST: I'm angry. And I'm sad. I'm sad because my practice is probably going to -- has voted for those of us to do general ophthalmology to close our practice to new Medicare beneficiaries. We've decided to hold off a week implementing this practice to see if the Republic administration or the Republican senators can get their act together. But we're -- if the cuts are implemented, we just really have no other choice.

(END VIDEO CLIP)

FORTIN: And just to show the further impact, one health care system in Topeka, Kansas, has closed all of its primary care clinics to new Medicare patients. It's a huge impact.

LEMON: Yes, I have to ask you this. So, why are these cute being made? And why is an 11 percent cut for doctors, so hard to accept?

FORTIN: Well, there are a couple of parts to that answer, actually.

The cuts are automatic when Medicare gets too high. But in the past several years, Congress has always swooped in at the last minute to stop the cuts before they actually went into effect. But now budgets are tighter than ever and Medicare cuts are part of a federal program to actually reign in escalating health care costs. Doctors are saying their payments are frozen at 2001, 2002 levels. While their expenses continue to rise.

(BEGIN VIDEO CLIP)

DR. WILLIAM HAZEL, JR., TRUSTEE, AMERICAN MEDICAL ASSN.: Our costs have gone up. Medicare physician payments have not kept pace with the cost of providing care for seven years. Our employees costs of living have gone up. Our rent has gone up. Our insurance has gone up. It becomes very difficult to maintain a viable practice and to plan for the future when you're looking at cuts every year that don't reflect the cost of providing care.

(END VIDEO CLIP)

FORTIN: Now, the AMA, the American Medical Association, along with the AARP and many other advocacy groups, have been putting a lot of pressure on lawmakers to act today.

Don, we'll see what happens in just a couple of hours.

LEMON: Oh, man. A conundrum. We'll see, yes, if there's a solution.

Thank you, Judy.

FORTIN: You're welcome.

LEMON: Kyra.

PHILLIPS: Well, a Texas hospital says that an autopsy will be done on an newborn who died in intensive care. That baby and at least 16 others were accidentally overdosed with the blood thinner Heparin, last week. The hospital says that it's unclear if that was a factor in the death yesterday. Since the infant was already seriously ill. Two hospital pharmacy staff have taken voluntary leave, pending an investigation.

And new developments in a case that shocked the nation. The family of Esmin Green says that they're filing a $25 million lawsuit against New York City and the company in charge of Kings County Hospital, for her death last month. You may remember this surveillance video that showed the 49-year-old woman went unattended and untreated for a considerable amount of time after collapsing right there on the floor of the waiting room hospital. The hospital says that they've fired six employees since then.

(BEGIN VIDEO CLIP)

TECIA HARRISON, DAUGHTER OF ESMIN GREEN: Firing them is not enough. Firing them is not enough for me. It's not enough for my brothers. They don't know this wonderful woman that they took her away from us. They don't know. We know, we want them to pay for it.

(END VIDEO CLIP)

PHILLIPS: No criminal charges have yet been filed in Esmin Green's death.

LEMON: In upstate New York, a 48-year-old man is charged with leaving his elderly parents in a hot car with the windows rolled up, while he drove his three-hour bus route. Reckless endangerment charges could be upgraded to homicide against Theodore Pressman. His 85-year-old father, died but his mother survived, but needed treatment for heat exposure. A detective says, he's seen kids and pets but this is the first case he's seen of parents left in a sweltering vehicle.

Iranian missile tests and warnings to the U.S. and Israel. Live reports from the State Department and Israel in our next hour.

You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Yes, there's nudity and alcohol involved. Still, this one's weird, even for Vegas. In broad daylight, north of the strip, a naked guy allegedly lifts some beer from a 7-11. He wanders into traffic, flexing, posing, hitting stuff. And then, car jacks a bus. This is how the witnesses saw it all go down.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He actually jumped through the back window. And then got to the front of the bus. I guess the guy jumped out. And then he took off with the bus and then they pulled him over about a half block down the street.

(END VIDEO CLIP)

PHILLIPS: Well, after his arrest, the guy was given his clothes back and a mental evaluation and taken to jail without a Slurpee.

LEMON: You can't do that to me and expect me not to laugh. OK. All right, this is very serious, Kyra.

Because we're talking about feeling the heat. You heard her yesterday. Riding along as an official with California's forestry division. Checked out the raging Butte County fire.

We're talking about KOVR reporter, Courtney Dempsey. She'll join us here, right in the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Convicted polygamous sect leader Warren Jeffs, have been hospitalized in Las Vegas. Jeffs' was taken from an Arizona jail with what sheriff describes as a serious medical problem.

CNN's Chris Lawrence is in Vegas with an update -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Kyra, the doctors inside aren't talking about how they're specifically treating Warren Jeffs. But, our sources tell us it is a quote, "serious situation."

And we know he was in such poor health, that they took him out of his jail cell in Arizona and airlifted him about 100 miles to the hospital here behind me. We also know that Jeffs has had some health problems over the past couple of years while he's been in jail. Court documents show that at one point he stopped eating and drinking for enough time that he had to be taken to an infirmary. At another point, he attempted to kill himself while he was in jail. And while he was placed under suicide watch, guards observed Warren Jeffs repeatedly banging his head against the wall and throwing himself violently against that wall.

Now, Jeffs was convicted of using his religious influence to coerce his religious influences over his followers, to coerce a 14- year-old girl to marry her 19-year-old cousin. We also spoke with Warren Jeffs' attorney and he said Jeffs was in that Arizona jail awaiting trial on four charges of being an accomplice to sexual conduct with a minor. He said that all the other charges against Warren Jeffs had been dismissed. So, that is a significant reduction from what he was originally facing. He had already been convicted in Utah and was serving 10 years to life on those convictions -- Kyra.

PHILLIPS: Chris Lawrence, live from Las Vegas. Thanks, Chris.

LEMON: Missiles fired, warnings sent. Iran's finger on the trigger. The eyes of the world of course, on Iran.

PHILLIPS: Plus, this (INAUDIBLE) boom town. A once sleepy Canadian community, strikes gold. Black gold.

LEMON: And they're hot cars, really hot. We'll tell you if these want to pinch your ride.