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CNN NEWSROOM

Hillary Clinton Back in the Spotlight; Gas Down More Than a Penny and a Half This Morning; What you Breathe Can Affect How You Breathe Later in Life; President Bush Gives a 91-year-old Woman the Surprise of Her Life

Aired July 31, 2008 - 09:00   ET

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


TONY HARRIS, CNN ANCHOR: And good morning, everyone. You are in the CNN NEWSROOM. I'm Tony Harris.
HEIDI COLLINS, CNN ANCHOR: Hi there, everybody. I'm Heidi Collins.

See events come into the NEWSROOM live on this Thursday, July 31st.

Here's what's on the rundown.

President Bush, last hour, hailing security progress in Iraq. It's expected to lead to troop reductions and shorter tours of duty.

HARRIS: Angry flyers at American Airlines, a software glitch backing up bags and canceling flights at one major airport.

COLLINS: Health experts say they found the primary source of a nationwide salmonella outbreak. The serrano pepper did it, in the NEWSROOM.

COLLINS: Good morning once again, everybody. I'm Heidi Collins.

HARRIS: And I'm Tony Harris.

COLLINS: Want to get over to Rob right now where there's a tornado warning. I guess this is just outside of Minneapolis, Minnesota?

ROB MARCIANO, CNN METEOROLOGIST: Yes, your stomping grounds there, west central parts of Minnesota. It's out until 8:15 local time. You see the Doppler imagery behind me and a bit of a circulation with what was a strong complex, producing winds in excess of 60 and 70 miles an hour, west of Minnesota, but now it's all driving east towards Minneapolis.

I'll stop this and highlight the counties that are in this tornado warning, and that's the pink polygon there -- Kandiyohi County is one of them, Meeker County, as well, and this is all heading to the east at about 44 miles an hour.

Storm spotters did report a funnel cloud. No word on whether that touched the ground but some rotation being seen in this Mesoscale Convective Complex, basically strong thunderstorms moving through west-central Minneapolis.

And there's a live shot for you from our affiliate KARE, showing darkening and ominous clouds west of Minneapolis.

We'll keep you posted here throughout the CNN NEWSROOM in the next few minutes.

COLLINS: OK. Very good, Rob, thank you.

MARCIANO: You got it.

COLLINS: Terrorists on the run in Iraq -- those words from the president just a short time ago. He says progress on the warfront may allow some troops to come home soon.

We are covering all of the angles. Our Elaine Quijano is at the White House and Jamie McIntyre is at his post at the Pentagon.

Let's go ahead and begin with you, Elaine.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, Heidi, apologies for the helicopter flying overhead. President Bush is departing out of town here shortly.

But the natural question on this Iraq update is why now, why today?

Well, July 31st had been the self-imposed White House deadline of sorts. President Bush had hoped to reach an agreement with Baghdad over the long-term presence of U.S. troops in that country.

Negotiations are continuing on that, so the White House, of course, not at all happy, disappointed that they were not able to reach that deadline.

Nevertheless, we heard President Bush today talk about positive news, what he called encouraging news out of Iraq in the past month -- the president noting that in his brief statement today -- but also warning that some of the progress that's been made could change.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Violence is down to its lowest levels since the spring of 2004, and we're now in our third consecutive month with reduced violence levels holding steady.

General Petraeus and Ambassador Crocker caution that the progress is still reversible. They report that there now appears to be a degree of durability to the gains that we have made.

(END VIDEO CLIP)

QUIJANO: Now President Bush, as expected, touted the success of the surge and also had words of praise for the Iraqi forces, noting that they are taking on more of their own security responsibilities, but Heidi, still, Baghdad and Washington have not been able to come together just yet on that agreement for the long-term U.S. troop presence in Iraq -- Heidi?

COLLINS: All right. We'll continue to watch this one.

Thanks so much, Elaine Quijano from the White House this morning.

HARRIS: And the U.S. general calling the shots in Iraq expected to call for troop cuts and soon.

Live to CNN senior Pentagon correspondent, Jamie McIntyre.

Jamie, good morning to you. How will all of this impact the U.S. military?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, you know, with the president of the United States declaring the surge a success, noting that violence is down -- U.S. troop deaths in Iraq, by the way, a record low this month for July. Nine U.S. troops died in Iraq. That's the lowest of any month since the war began.

The question is how fast and how soon can the U.S. bring troops home, or perhaps more importantly, how fast can they shift those troops to Afghanistan.

General David Petraeus is going to make that recommendation of how many troops don't need to be sent to Iraq to replace troops already there -- sometime late next month or early September, according to aides. That would be just before he leaves Iraq and turns over responsibility to the incoming commander, General Raymond Odierno.

General Petraeus will take over U.S. CENTCOM commander -- the central commander -- and he'll be responsible for Afghanistan, where, as I said, there is really a desperate need for reinforcement there, at least 10,000 more troops needed.

The U.S. hopes to send a couple of brigades there next year but it's all contingent on those troops coming out of Iraq.

You know one early sign, Tony, that General Petraeus will recommend troop cuts when he makes that decision in about six weeks or so, and that is that some small units that were packed up to, were getting ready to go to Iraq, have already been told to stand down, don't pack your stuff, don't come, because we don't think we're going to need you.

You have to make some of those decisions pretty far ahead. Otherwise the troops could end up showing up there and not be needed.

HARRIS: That's right.

MCINTYRE: So that's already an indication of where Petraeus is going.

HARRIS: And Jamie, the president also announcing the reduction in tour lengths for U.S. troops from 12 months to -- from 15 months to 12 months. Was that anticipated? MCINTYRE: Well, yes. He really was noting something that had already been decided. In fact, you may recall that when Secretary Gates -- the last time he met with the press -- was talking about trying to find troops for Afghanistan.

HARRIS: That's right.

MCINTYRE: One of the things he ruled out was going back to those longer 15-month tours and Secretary Gates, by the way, will be briefing reporters again here at the Pentagon today so we may get some more insight on that.

HARRIS: Senior Pentagon correspondent Jamie McIntyre for us -- Jamie, thank you.

COLLINS: President Bush points to the Diyala offensive as proof of Iraqi forces taking over the fight. U.S. troops are backing some 15,000 Iraqi military and police forces in Diyala province. They're targeting al Qaeda insurgents. Iraqi officials say Diyala is one of the last major al Qaeda strongholds near the capital.

HARRIS: Your money, your concerns, "ISSUE #1" here at CNN.

Just minutes ago, we've got new numbers on the health of the economy.

CNN personal finance editor Gerri Willis is "Minding Your Business" this morning.

Gerri...

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey there, Tony.

HARRIS: Boy, I guess we can talk about jobs.

WILLIS: Well, we've got jobs, we've got GDP. Well, let's start with GDP.

HARRIS: OK.

WILLIS: The broadest measure of the economy's growth in the second quarter, it was up 1.9 percent, so positive growth there. As you know, there were expectations on Wall Street that the growth would be even stronger. The thought here, it's mostly about the $140 billion in stimulus checks that went out.

And if you drilled down into the press release you find out the consumer spending was up 1.5 percent in the quarter. So it does look like the stimulus checks had a very, very big impact so we want to say that.

Important news, though, in this report, that may not come as a surprise to some. The fourth quarter GDP estimate -- that's the growth estimate -- revised down from a positive number...

HARRIS: Yes. WILLIS: ... to a negative one down 0.2 percent. This is going to reignite the conversation over whether it's recession or not.

You mentioned jobless claims. Weekly applications for jobless claims, some 448,000 the previous month. That is up 44,000, the biggest gain, that's the highest in five years. So some negative news...

HARRIS: Yes.

WILLIS: ... on the jobs front there, Tony.

HARRIS: And do you want to touch on these profits from oil giant Exxon Mobil?

WILLIS: Right, right, exactly.

HARRIS: Yes.

WILLIS: Yes, let's talk a little bit about that. You know why? These are the biggest profits ever reported by a U.S. company, apparently, is what we were talking about this morning.

HARRIS: Yes.

WILLIS: 11.68 billion by Exxon, the largest in their history, the largest in U.S. history.

HARRIS: Wow.

WILLIS: They came closest to that in the fourth quarter of '07. You've seen those gas prices go up.

HARRIS: Yes, yes.

WILLIS: You know what's going on there.

HARRIS: Sure.

WILLIS: Exxon is the world's largest publicly traded oil company. Do the math, they were making $90,000 a minute.

HARRIS: Oh, man. Can I get in any kind of line of work that will -- oh, what a number. What a number.

All right, Gerri, great to see you. See you a little later this morning.

WILLIS: Thank you.

HARRIS: Thank you.

COLLINS: A baggage breakdown at one of the nation's busiest airports this morning. American Airlines says it's solved the computer glitch at New York's JFK Airport. The fallout separated thousands of pieces of luggage from their owners. Dozens of flights were canceled including six this morning.

(BEGIN VIDEO CLIP)

NORMAN ROBINSON, PASSENGER: I'm frustrated because I was concerned over whether or not the bags are going to disappear, and you know -- that's why I took my -- I didn't put my bags in. I'm not -- there's other people right now, I'm sure, are frustrated because they don't have their stuff.

(END VIDEO CLIP)

COLLINS: American Airlines says it cannot estimate how many passengers were affected. It says the bags are being sent to their destinations today.

HARRIS: Putting out fires. Crews in California reportedly have contained about 40 percent of a wildfire near Yosemite National Park. Several residents being allowed back into their homes that are near the park.

Still evacuation orders remain in effect for about 100 homes near Midpines. That's about a dozen miles from the park. The fire has burned more than 32,000 acres and destroyed 21 homes.

COLLINS: Rob Marciano joining us one more time now to talk a little bit more about the rest of the weather situation across the country, including this tornado warning we just spoke about in Minnesota...

MARCIANO: Yes.

COLLINS: ... and then, of course, the latest on the fire, too.

MARCIANO: Hey, Heidi. Still on effect this tornado warning west of Minneapolis, with this complex that produced winds in excess of 60 and up to 70 miles an hour earlier this morning in Bismarck and just motored east-southeast.

I mean this thing has been humming along at 50 to 60 miles an hour and whenever you see this kind of bow in the echo there, it kind of bulges out, that's where you typically see strong, straight line winds, but now we've seen a little bit of a circulation in the top part of this complex.

And we have had storm reporters on the ground that have indicated that there has been a rotation in the form of a funnel with this part of the system here, as it heads towards Minneapolis.

So I'm curious to see -- it does look a little bit weaker on the radar scope but this isn't your typical super cell type of structure, so we really have to report a little bit more on what's going on, on the ground.

This, the polygon, that has a tornado warning in effect for the next five minutes and a very well could be extended eastward toward Minneapolis. And we'll certainly know that as the National Weather Service continues to analyze that radar imagery and have taken reports potentially of it touching the ground.

(WEATHER REPORT)

MARCIANO: We'll keep you posted on what's going on in Minneapolis. Everybody else, try to stay cool.

HARRIS: Absolutely.

COLLINS: Yes, absolutely.

OK, Rob, thanks.

MARCIANO: You got it.

HARRIS: You know a new culprit in the salmonella scare. Dr. Sanjay Gupta on what you shouldn't be eating.

(COMMERCIAL BREAK)

HARRIS: California facing a major budget crisis. Its employees facing a crisis of their own.

Governor Arnold Schwarzenegger is threatening to lay off 22,000 government workers today. That includes temporary, part-time and contract workers. For Californians, that could mean longer lines and fewer services at government offices.

Schwarzenegger is also expected to order thousands of workers under his control be paid the minimum wage until a state budge is passed.

COLLINS: The FDA now says it knows for sure what caused the salmonella outbreak that sickened at least 1,300 people. The smoking gun, the serrano peppers. The agency tracing the outbreak to a farm in Nuevo Leon, Mexico.

CNN chief medical correspondent Dr. Sanjay Gupta on this latest culprit. And I don't mean to make fun, because there have been so many who've gotten sick. But, boy, it was like the clue game. You know we start with the tomatoes and then we went to the other kind of peppers, the jalapenos, and now we're on to the serranos.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes.

COLLINS: Those are the bad guys.

GUPTA: These are the bad guys. I brought some for you, not to eat, but to look at but...

COLLINS: Thank you.

GUPTA: You know this is -- they call it the smoking gun and it's interesting, because this has been a very long investigation. But it can, probably definitely, be called a smoking gun because they actually genetic fingerprint these particular peppers.

COLLINS: Cool.

GUPTA: They look for the salmonella strain that got people sick. They take a genetic fingerprint of that and they match it now to the same thing on the peppers, so they can call that the problem without question.

Here's part of the issue. What the recommendation is from the FDA is don't eat any raw of these peppers, serrano peppers, that have come from Mexico.

The peppers we're looking out, we actually went out and bought yesterday, It's not labeled in any way. We asked the store owners and they can't tell you exactly from where these peppers came.

COLLINS: Really?

GUPTA: So we have these peppers but in no way can I vouch for their safety. That's part of the problem. So let this be a challenge for people to be able to label these things so people know whether or not they're safe.

COLLINS: Yes. Yes. Wow, that's incredible.

And what about the tomatoes? Back to the tomatoes. I mean are they all OK now or what's the ...

GUPTA: They're technically on the safe list. So they have a list...

COLLINS: That doesn't feel so safe to me...

GUPTA: It doesn't.

COLLINS: ... when you use your fingers like that.

GUPTA: I know. Well, you know, Dr. Acheson -- David Acheson with the FDA is saying, look, we're not 100 percent sure that it's just the tomatoes yet. We know it's the peppers but could it be the peppers and something else at the same time.

That's sort of the question they're asking, but it really looks like the serrano peppers are probably the culprit here.

COLLINS: OK. So what about the water in all of this? I guess when we're talking about irrigation and so forth, water can, kind of, be a culprit in these cases. I mean we're talking agriculture.

GUPTA: I think that that is -- most likely culprit here. And when you look at farms overall -- we did a lot of reporting on this around the salmonella and -- I'm sorry, the E. coli in spinach outbreak.

COLLINS: Yes.

GUPTA: Look at those farms. I mean it's impossible to put a fence around that. So you're going to have animals and crops mixing up together all the time. And a lot -- and a crazy looking hat I have on.

COLLINS: I was just going to say, but I didn't want to embarrass you.

GUPTA: Yes, I know.

The -- but there's also irrigation water around the -- these areas and animals can get into that area, contaminate the water. That water is then used to irrigate the crops, and that's probably...

COLLINS: Yes.

GUPTA: ... what's happened here as well. Maybe chickens -- who knows what the source of that salmonella?

COLLINS: Is there anything they can do? I mean that's just kind of the way it works, right?

GUPTA: It's really hard to do. It's even -- it's hard to do in Mexico, it's hard to do in the United States. You got to test the crops several times before it actually goes from the farm to the fork.

COLLINS: Yes.

GUPTA: And I think that's the critical step in trying to keep the animals out as much as possible.

COLLINS: Boy. And know where your food comes from.

GUPTA: If you can.

COLLINS: Yes.

GUPTA: I mean that's -- again, we don't know where these came from.

COLLINS: Don't eat it. Yes.

GUPTA: We bought these yesterday. We don't know where they came from.

COLLINS: We're not eating them either.

All right, Dr. Sanjay Gupta...

GUPTA: All right.

COLLINS: ... thank you.

GUPTA: See you.

HARRIS: President Bush points to progress in Iraq and announces combat tours being cut for U.S. troops.

CNN military analyst David Grange weighs in next.

(COMMERCIAL BREAK)

HARRIS: Next hour the man accused of some of the most heinous atrocities in the Bosnian war makes his first court appearance.

Former Bosnian Serb leader Radovan Karadzic is at The Hague. He'll represent himself before a tribunal judge. He'll be asked to enter pleas on genocide and other war crimes charges.

Karadzic was arrested last week, almost 13 years after almost 13 years on the run. Among other things, he's accused of masterminding the Srebrenica massacre and the siege of Sarajevo.

COLLINS: New rules for spying. President Bush signs a new executive order. It rewrites guidelines for U.S. intelligence agencies at home and abroad.

The order also strengthens the authority of the National Intelligence director. It's an offer to force various intelligence agencies to share information. The order also maintains long standing prohibitions on assassination.

The document has been under revision for more than a year.

HARRIS: Gas prices and you in the driver's seat. New habits and new directions at the pump.

(COMMERCIAL BREAK)

HARRIS: President Bush, just the last hour, giving a cautiously upbeat assessment of security gains in Iraq.

(BEGIN VIDEO CLIP)

BUSH: Violence is down to its lowest levels since the spring of 2004, and we're now in our third consecutive month with reduced violence levels holding steady.

General Petraeus and Ambassador Crocker caution that the progress is still reversible. They report that there now appears to be a degree of durability to the gains that we have made.

(END VIDEO CLIP)

HARRIS: The president says troop reductions this year could continue its security holds and he announced combat tours are being cut immediately.

Joining me live, from Chicago, retired Brigadier General David Grange. He is an unpaid board member of a securities firm with some Pentagon contracts.

General Grange, good to see you. It's been awhile.

While the progress remains fragile and reversible, the president did say this morning there is a -- and here's the quote -- "a degree of durability to current successes." OK, General, if the surge is really a success story here, then it needs to be acknowledged. Is it?

BRIG. GEN. DAVID GRANGE (RET.), MILITARY ANALYST: Well, I think it is being acknowledged but with caution. Remember, it's conflict and conflicts are unpredictable.

HARRIS: Yes.

GRANGE: And what you want to maintain when you do have some level of victory, in other words, positional advantage over your adversary, you want to maintain a momentum. You don't want the enemy to have a chance to breathe, to regroup, to reinforce, and so the caution is prudent.

HARRIS: Yes.

GRANGE: And it's normal for the military planners.

HARRIS: So tell me why, in your estimation, aside from just sheer numbers of troops, tell me why you believe, to this point, the surge has been mostly a success.

GRANGE: Mostly a success as on the military element of national power, not as much economically, diplomatically or informationally, which are the other...

HARRIS: Yes.

GRANGE: ... three elements of national power, and you want those things to be worked in unity of effort to get the mass that you need to have the most effect.

HARRIS: Yes.

GRANGE: So though progress has been made in those other elements, not in the sense of the surge.

HARRIS: Got you.

President Bush announcing a reduction in tour lengths for U.S. troops from 15 months to 12 months.

Isn't that essentially what the commanders have been asking for?

GRANGE: The commanders have been asking for it. I think the people of the United States, the families, especially military families, would love it. Political candidates are calling for it.

The main reason, though, is the responsibilities of the services, the Army and Marine Corps, in particular. They need to be ready for other conflicts and be ready to cycle units in, in a predictable manner to maintain readiness, to refit, to rearm, provide new vehicles and rest for the troops.

So it works for better cycle of its 12 months than 15, so that the services really push it hard.

HARRIS: You know early September sort of ends this 45-day post- surge reassessment period that General David Petraeus asked for.

What do you expect? Is there any way to know at this point what he is likely to recommend in terms of additional troop reductions at that time?

GRANGE: No, I think that General Petraeus will recommend the troop withdrawals unless we have a downturn, and I don't think he'll pull any punches. I mean he will not take the political pressure to shape his decision. He'll make the decision as he sees the situation on the ground.

I'm very comfortable with his decision process on that.

HARRIS: Retired Brigadier General David Grange, CNN military analyst, with us this morning.

General Grange, good to see you. Thank you.

GRANGE: Same thing.

ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins and Tony Harris.

HARRIS: And welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris.

COLLINS: Hi there, everybody. I'm Heidi Collins.

Boy, we are watching a lot of things this morning and certainly one of them, these numbers. Well, we don't see them yet because the stock exchange isn't quite open yet, but we're going to bring you the live opening bell when it does happen and, of course, a lot of numbers there to look at.

Hopefully we'll be to the positive today, which would be a terrific (INAUDIBLE), as usual.

Susan Lisovicz is standing by at the New York Stock Exchange with details.

Susan, we have more reports coming out today?

SUSAN LISOVICZ CNN CORRESPONDENT: Oh, yes, a couple big reports that came out an hour ago, and, you know, we had two steps forward, you know, back-to-back triple-digit gains. We are expecting one big step backward, a big drop at the open.

Why?

Well, an hour ago we got initial weekly jobless claims, highest level in five years, over four weeks, close to 400,000. That is the level considered of recession flags. Also we got the first look at second quarter GDP. That's the mother of all economic reports, measures all goods and services. It grew about twice as much as the first quarter but worse than expected.

Remember stimulus checks went out in the second quart so that was a big help. The fourth quarter, by the way, revised to show a contraction, the first time that the U.S. economy has contracted since the last recession in '01.

There's the opening bell.

Two stocks to keep in mind, Exxon Mobil, once again, beating its own record, the largest quarterly profit in U.S. history. And also Starbucks posting its first quarterly loss since going public. It's lowered its outlook for the year and will open fewer new locations.

We're seeing a decline at the open. Not triple digits yet, but that's what the indications were. We're only 15 seconds into it and there's a lot of information to digest.

Heidi?

COLLINS: Yes. And plus, we're a little impatient, you know. We want to know what the deal is right out of the gate here because...

(CROSSTALK)

LISOVICZ: Well, we're down.

COLLINS: ...It was exciting to the positive, you know, a few days in a row.

LISOVICZ: Well, we've got the three major averages down at least half a percent in the first 30 seconds of trading.

COLLINS: You know what it is? It's because they can't get their coffee because all of those Starbucks closed. You know, they closed like 1,000 stores, right?

LISOVICZ: That's right. And that wasn't good enough.

COLLINS: Problems. Yes, I know. They're still posting those losses. All right, Susan, we'll check back a little later on. Thank you.

LISOVICZ: You're welcome.

HARRIS: OK. The economy and the energy driving the presidential candidates. Both candidates turning to "ISSUE #1" today. Barack Obama preparing for a town hall meeting in Cedar Rapids, Iowa, today. He will focus on the effects of the summer's record flooding. John McCain holds a town hall meeting in Racine, Wisconsin, this afternoon and then heads to Milwaukee.

COLLINS: As part of our on going effort to help you make an informed choice in the election, we're going to play more of what the candidates are saying in their own words on the campaign trail. Here's John McCain yesterday in Colorado promising supporters he will not raise taxes.

(BEGIN VIDEOTAPE)

SEN. JOHN MCCAIN (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: I know that you know Senator Obama is an impressive speaker and the beauty of his words has attracted many people especially among the young to his campaign. I applaud his talent and his success. And Americans, all Americans, should be proud of his accomplishment.

My concern with Senator Obama is that on issues big and small, when he says what he says and what he does are often two different things. And he doesn't seem to understand that the policies he offers would make our problems worse and not better.

Senator Obama says he's going to change Washington, but his solution is to simply make government bigger and raise your taxes to pay for it. And I want to look you in the eye, I will not raise your taxes nor support a tax increase. I will not do it.

(APPLAUSE)

He wants to raise your taxes to pay for bigger government. We've been doing that for years, and it hasn't worked. In the few years that he's been in the Senate, he's requested nearly $1 billion in pork-barrel spending. That's about $1 million for every day that he's been in office. I've never asked for a single pork-barrel project or earmark for my state, and I'm proud of it. And I promise you I will veto every pork-barrel bill that comes across my desk. You will know their names, and I will make them famous.

We will stop this corrupt practice in Washington, D.C., which has caused former members of Congress to reside in federal prison. It's wrong, and I'll fix it, my friends, and I know how to fix it. We'll stop wasting your tax dollars. You will not any longer spend $3 million to study the DNA of bears in Montana. I don't know if that was a paternity issue or a criminal issue, but we're not going to do it anymore, my friends. We're going to stop it.

You know, Ronald Reagan used to say, "Congress spends money like a drunken sailor, only I never knew a sailor, drunk or sober, with the imagination of Congress." And that's kind of a funny line, and I use it fairly often.

I'm not making this up when I tell you I got an e-mail from a guy that said, "As a former drunken sailor I resent being compared to members of Congress." Can't blame him.

Senator Obama says he'll only raise taxes on the rich. But in the Senate, he voted for tax hikes that would have impacted those making just $32,000 per year. He's proposed tax increases on income taxes, capital gains taxes. By the way, capital gains taxes, that's 100 million Americans. Dividend taxes, pretty much anything you can tax, he wants to tax more. On Social Security, he wants to raise Social Security taxes. I am opposed to raising taxes on Social Security. I want to fix the system without raising taxes.

(END VIDEOTAPE)

COLLINS: John McCain in his own words. Barack Obama, deflecting criticism and accusing McCain of running a negative campaign. Here's Obama at yesterday's rally in Missouri.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D), PRESUMPTIVE PRESIDENTIAL NOMINEE: John McCain and the Republicans, they don't have any new ideas. That's why they're spending all their time talking about me.

(APPLAUSE)

I mean, you haven't heard a positive thing out of that campaign in a month. All they do is try to run me down. And you know, you know this in your own life, right? If somebody doesn't have anything nice to say about anybody, that means they got some problems of their own.

So, they know they've got no new ideas. They know they're dredging up all the stale, old stuff they've been peddling for the last eight, 10 years. But since they don't have any new ideas, the only strategy they've got in this election is to try to scare you about me.

They're going to try to say that I'm a risky guy. They're going to try to say -- well, you know, he's got a funny name. And he doesn't look like all the presidents on the dollar bills and the five- dollar bills, and they're going to send out nasty e-mails. And, you know, the latest what they got me in an ad with Paris Hilton, you know. Never met the woman.

But you know, what they're going to try to argue is that somehow, I'm too risky. Basically, what they're saying to you is we know we didn't do a real good job, but he's too risky. Well, let me tell you something.

When we are in such dire straits economically, when our foreign policy has gotten so messed up, what's a bigger risk? Choosing change or choosing to do the same things that got us into this mess in the first place?

(APPLAUSE)

We -- that union, union, that is the real risk -- is that we miss this moment, that we miss this time, that we decide we're not going to go ahead and do what is needed because we're afraid.

That can't be what we do this time because that's not what's built America. That's not what has made this country great. We've never shied away. We've never been fearful of the future. We've always reach out to the future. And so, when people are looking into the past, we say, no, we're going forward. We are going to create a better America.

(END VIDEOTAPE)

COLLINS: And that's some of what they're saying. Part of our commitment to help you make an informed choice on Election Day.

HARRIS: Hillary Clinton back in the spotlight. Sources close to the senator say she will take center stage at the Democratic National Convention, a prime time speech on Tuesday, August 26th, the day marks the 88th anniversary of the 19th Amendment, which gave women the right to vote.

JOSH LEVS, CNN CORRESPONDENT: More troops may be needed in Iraq? Well, how many could that ultimately mean, and will it be fewer than before the surge?

(COMMERCIAL BREAK)

HARRIS: The nation's gas prices. How you drive may help determine what you spend. Gas is down more than a penny and a half this morning. Today's national average about $3.91 a gallon. 20 cents less than the record set just what -- two weeks ago. One big reason, Americans are driving less. Yes, but if prices continue to fall, will we return to old habits?

Gregg Laskoski is the managing director of public relations for AAA south. He is Tampa, Florida.

Gregg, good to see.

GREGG LASKOSKI, FMR. REPORTER, HERALD STATESMAN YONKERS, N.Y.: Good morning.

HARRIS: All right. Let's tackle this. Do you believe the consumer is having a real impact on gas prices by driving less and changing out the gas guzzlers for more fuel-efficient vehicles?

LASKOSKI: No question about it. We know that any time that we can get into a more fuel-efficient vehicle, as well as doing some of the things on the road that can help improve the fuel efficiency of whatever we're driving collectively across the country, that's having an impact on the nation's fuel supply, and all of these things are going to be factors that can help bring the price of gasoline down.

HARRIS: And the markets respond? The traders? The speculators? OPEC? Do markets respond?

LASKOSKI: They respond really to a variety of factors. And one of the things we saw this year is that supply and demand fundamentals were not the only things that were influencing the price of gasoline.

HARRIS: Yes. Yes.

LASKOSKI: It was the weakness of the dollar that drove an awful lot of what we saw this year, but no question about it. Supply and demand remains a very important component.

HARRIS: OK, Gregg, do you believe that if consumers continue to improve their energy use in their lives, we could see further, maybe steeper reductions in oil and gas prices. Could we get to, I don't know, maybe $3.30 a gallon, $3 a gallon?

LASKOSKI: I don't know if we're going to see those numbers any time soon.

HARRIS: Oh, come on, Gregg!

LASKOSKI: I'm sorry to tell you that. But we have to do everything we can to conserve gasoline. And I think, as we see these figures -- you know, the Department of Energy is reporting that fuel consumption is down by about 2.5 percent. Some people say it's down by even much more than that.

Those numbers are helping to drive our fuel inventories up. And collectively, again, all of these things are going to help us conserve fuel and bring those prices down.

HARRIS: OK. Do you believe there is a gas price tipping point where combined with the crazy reduction in prices that we're seeing on SUVs now, America could actually decide to start buying these larger vehicles again?

LASKOSKI: I don't think we're going to see that happen. I think we --

HARRIS: Do you think this is structural now?

LASKOSKI: Definitely. We've seen a paradigm shift. And I don't see us going back to those big gas guzzlers any time soon.

HARRIS: OK. Let's talk about the smart driving tips, the energy-efficient tips that will help us continue to enjoy these gains. What do you think of the idea of simply just slowing down, that's got to help.

LASKOSKI: Absolutely. Slowing down is always going to help, because the faster a car goes, the more fuel it burns to overcome the air resistance. Slowing down is going to save you gas.

HARRIS: Check the tire pressure, check your air filter.

LASKOSKI: Absolutely. Tire pressure is -- it doesn't cost you anything and that's one of the most important things that you can do, not only for your own safety, but it will improve your gas mileage. We say that for every pound of pressure, you may be underinflated. You can be losing as much as two percent of your fuel economy.

HARRIS: Nice. Gregg, should we continue to think about downsizing? How much car do you really need?

LASKOSKI: That's always a good idea. You know, especially if people are just doing local driving, you know, the errands, grocery shopping or whatever. You don't need the big SUV to do that.

HARRIS: How about this, if you don't have to drive, don't drive. Carpool, take the train where available, plan your trips.

LASKOSKI: Everybody is looking at all of those different options, and it makes a lot of sense.

HARRIS: How about, I guess I wanted to ask one more question. This debate about whether you use the AC or you leave your windows down. Where do you stand on that?

LASKOSKI: We know that's been debated. We try to tell people, you know, instead of having that knee-jerk reaction when you're going to work in the morning and putting on the AC, leave the AC off, open the window a crack and you'll be fine.

HARRIS: And clean out the car if you've got a whole bunch of unnecessary. So, don't drive around with the golf clubs and that sort of thing, right? I mean, come on.

LASKOSKI: Exactly. If you lighten the load that the vehicle is carrying, it's going to help your fuel economy.

HARRIS: So, the consumer deserves some credit for what's happening with gas prices. Can we say that flatly, Gregg?

LASKOSKI: Well, I think, again, the biggest factor isn't necessarily the reduction in our consumption, but it's really in the weakness of the dollar. What we've seen in recent weeks, the dollar has strengthened, and with the dollar strengthening, crude oil is no longer as attractive as it had been. So, with crude oil prices coming down, retail prices follow.

HARRIS: I certainly want to factor in, you know, the choices of the American public in that equation. Gregg, thanks for helping me do that.

LASKOSKI: Thank you.

HARRIS: Gregg Laskoski with the AAA.

COLLINS: What do you say when the president of the United States drops by for your birthday?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I'm here. Here I am. Oh, I was just happy. The biggest thrill of my life.

(END VIDEO CLIP)

COLLINS: 43 surprises, 91. Meet the birthday girl.

(COMMERCIAL BREAK)

COLLINS: At the top of the hour, the man accused of some of the most heinous atrocities in the Bosnian war makes his first court appearance. Former Bosnian-Serb leader Radovan Karadzic is at The Hague. He will represent himself before a tribunal judge. He will be asked to enter pleas on genocide and other war charges.

Karadzic was arrested last week after almost 13 years on the run. Among other things, he is accused of masterminding the Srebrenica massacre in the Siege of Sarajevo. We want to let you know we have two correspondents in the area.

Our Nic Robertson is actually inside the hearing. He'll be reporting to us just as soon as he can get out. And also our Alessio Vinci is in Sarajevo, Bosnia. We will be talking with both of them.

HARRIS: President Bush says improving security in Iraq means some U.S. troops may come home sooner rather than later. What that means in overall numbers. Well, to get that answer, we turn to our Josh Levs. He has been taking a closer look at troop levels since the war began.

Josh, good morning.

LEVS: Tony, I wish I could give you one simple number, and tell you how much it's going to be. You know me. I love those concrete.

HARRIS: Yes.

LEVS: I'll tell you what we do now. I mean, obviously, we, here at CNN, keep a really close eye on how many troops U.S. has in Iraq at any given moment. And it's not always easy, but we get numbers from the Pentagon.

I want to show you something here. Really powerful list that there's no way you'll be able to follow. It's this massive PDF from the Brookings Institution where they follow it every month and break it down like crazy. We made it pretty graphic to help you be able to see these numbers.

Let's take a look at this. This goes all the way back to May 2003. So not that long after the war began. About 150,000 U.S. troops at that point. Now, at some points it went down after that. We're skipping ahead to 2005 where you see it hit 160,000. Then I bring you to the third one. This is important.

January 2007, 132,000. That is right before what the U.S. called the surge. And I looked at the numbers after that. It reached a height in October of 171,000. And now it's already gone back down to 145,000.

So, Tony, basically, what we don't know now is will enough U.S. troops believe that it will be the lowest ever of the war? There were plenty of months when it was around 130 in this list. So that's something we need to see, but it gives you a sense of where we are right now.

HARRIS: Hey, can you give us that same kind of sense? Have you worked up the number on the troop levels in Afghanistan? LEVS: Yes. Actually, we do. Thankfully we have this now from the U.S. military directly. Let's take a look at this because this was a little complicated. We have a graphic here. You have basically two different groups that compile the U.S.

You don't have that? OK, I'll break it down for you. 36,000 total of U.S. troops that are inside Afghanistan. About half of them are part of the NATO-led force and the other half are with the U.S.- led coalition. So, total, 36 -- there you go. I told you we have a graphic. 36,000 total U.S. troops there right now.

HARRIS: Hey, I got to ask you. We were talking about this a little earlier, and we were just trying to figure out how much all of this is costing the wars in Iraq and Afghanistan, and what it means to the federal budget deficit. And you have come up with an interesting way to view that.

LEVS: Yes. I like to hit this often because it's something important to keep in mind when people talk about saving money by not having the war in Iraq. Technically that's true. But as our folks at CNN Money put it right here, we're basically -- can we close in on this quote from CNN Money?

We're basically paying for this through our national credit card right now. It's not like it's our tax money that's paying for it. It's all contributing to our national debt. So, it's money we don't actually have right now.

And the size of the national debt, this is from the government right here, Let's close in on it. A whopping $9.5 trillion as of today. Obviously, I want to emphasize, I'm not saying all the Iraq war but the Iraq war contributes toward it. Our debt is now at $9.5 trillion.

HARRIS: That's good stuff. Josh, appreciate it. Good to see you. We'll see you again a little later in the program. Thanks.

COLLINS: In medical news now. What you breathe can affect how you breathe later in life. Here's Judy Fortin with today's 30, 40, 50.

(BEGIN VIDEOTAPE)

JUDY FORTIN, CNN MEDICAL CORRESPONDENT (voice-over): Pollution, smoke, dust and dirt can forever change the way you breathe. Just ask Heath Dudley. For over 20 years, he smoked cigarettes. And to make matters worse, he was surrounded by exhaust and fumes while working as a security guard for a trucking company, and he was asthmatic. The result? His lungs began to shut down.

HEATH DUDLEY, COPD PATIENT: I couldn't breathe. And the humidity, I couldn't stand it. If I was to poke my head out the door, it would take my breath away.

UNIDENTIFIED FEMALE: A big breathe right in. FORTIN: Diagnosed with COPD or Chronic Obstructive Pulmonary Disease, he eventually required a double lung transplant. He was only in his 40s. Although his case is extreme, doctors say his condition is very common as we age.

DR. GERARD CRINER, TEMPLE LUNG CANCER: It's the fourth leading cause of death in the United States. In most patients it's a smoking- induced lung disease.

FORTIN: Experts say smoking is the number one cause of lung damage. So if you're in your 30s and you smoke, quit now. The benefits begin almost immediately. In just two weeks your circulation improves as well as your blood pressure.

CRINER: Those patients have an improvement in lung function and their risk of lung cancer dissipates.

FORTIN: No matter your age, get exercise. Activity can clear out the system, helping the lungs stay healthy. And drink plenty of fluids. Keeping the lungs hydrated thins the excess congestion in your lungs making it easier to breathe.

In your 40s and 50s, COPD becomes a major pulmonary problem. Airway tube which carry oxygen in and out of your lungs are partly obstructed making it difficult to breathe. The lungs become so damaged that many people can no longer breathe on their own. Some go on medication. Others, on oxygen. Some patients, like Heath Dudley, need surgery.

Although smoking is the most common cause of COPD, bad air like pollution or chemicals, even second-hand smoke over a long period of time can contribute to the disease. Then, there's genetics.

CRINER: There are about two percent of the patient population, mainly Caucasians of Northern European decent, can be due to a genetic abnormality.

FORTIN: Keeping lungs healthy as you get older is critical. Experts say so is a flu shot. Flu can turn into pneumonia, which is a serious lung infection.

Judy Fortin, CNN, Atlanta.

(END VIDEOTAPE)

HARRIS: She partied with President Bush.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I'm here. Here I am. Oh, I was just happy. The biggest thrill of my life.

(END VIDEO CLIP)

HARRIS: That's pretty good, isn't it? 91 years old and life is still throwing a few surprises her way. (COMMERCIAL BREAK)

HARRIS: He is talking about the country's energy crisis. President Bush live from Coal Country, 10:30 a.m. Eastern Time right here on CNN.

COLLINS: On a win. President Bush gives a 91-year-old woman the surprise of her life. Here's Marielle Lue with affiliate WEWS in Cleveland, Ohio.

(BEGIN VIDEOTAPE)

MARIELLE LUE, WEWS CORRESPONDENT: When Kathy Harris found out the president would be riding by her mother-in-law's house, she decided she would do anything to give Ruth Harris the birthday gift of a lifetime.

KATHY HARRIS, DAUGHTER-IN-LAW: If he will just stop and roll down his window, I will pick her up and carry her over there and get her picture, OK?

LUE: Fortunately, she didn't have to do that. She said the president stepped out of the car and asked for the birthday girl, and Ruth said --

RUTH HARRIS, 91-YEAR-OLD ENTERTAINS SURPRISE GUEST: I'm here. Here I am. Oh, I was just happy. Just happy. And he came right up and sat down and held my hand. It's the biggest thrill of my life.

LUE: Can you believe everyone is making all this fuss over you?

R. HARRIS: No. Nobody ever did before. I'm nobody.

LUE: But to her family she is somebody. Ruth survived breast cancer and an accident on the (INAUDIBLE) River Bridge. She says she was trapped in the car for nearly two days before anyone found her. And that she survived by wrapping herself in the car's floor mat and by eating snow. A survivor indeed with a lot of living left to do.

But at 91, you're still making great memories.

R. HARRIS: Yes, I sure am. Sure I am.

(END VIDEOTAPE)