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American Morning

Russia Invades Georgia, Russia Imposes an Ultimatum to Georgia; Isaac Hayes Dies at 65; Oil Drops and Dollar Gains Boosting Markets; Michael Phelps Going for the Record; Illegal Immigrants Asked by the Government to Turn Themselves for Deportation

Aired August 11, 2008 - 06:00   ET

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


JOHN ROBERTS, CNN ANCHOR: Hot spots --
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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I expressed my grave concern about the disproportionate response of Russia.

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ROBERTS: Signs of a resurgent cold war, fears that the oil supply could take another hit as Russia expands its assault on a U.S. ally.

Plus, money that really does grow on trees.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: These are chock full of oil.

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ROBERTS: The fruit that has enough fuel to power a 747 on this AMERICAN MORNING.

And good morning. Thanks very much for being with us. We begin a Monday, a new week. It's the 11th of August. Good morning to you.

KIRAN CHETRY, CNN ANCHOR: That's right. It's going by fast. Welcome back.

ROBERTS: Thanks.

CHETRY: A well-deserved little break.

ROBERTS: I had to tour some colleges in the south with my daughter.

(CROSSTALK)

CHETRY: I'm not sure if that's a break.

ROBERTS: Yes.

CHETRY: Poor dad. All right. Well, breaking news now. Russia mounting new air attacks in the fight over the breakaway territories South Ossetia in Georgia. Warplanes now targeting the area near the president's palace. This comes as Moscow demands Georgia lay down its weapons or face a reported 9,000 troops in another breakaway province.

Georgian officials rebuffed this ultimatum but Georgia's president says that he has signed a ceasefire proposed by E.U. officials. Also this morning, Russia saying it is now in control of the capital of South Ossetia. That is the breakaway region of Georgia at the center of this latest conflict. Russia also reportedly taking out radar sites, cutting off postal routes and ship traffic in the black sea. Days of fighting have left hundreds of civilians dead.

Pakistan President Pervez Musharraf's spokesman says the embattled president will not step down despite mounting calls he do so to spare Pakistan the bitter impeachment process. The ruling coalition says it intends to begin the proceedings alleging that Musharraf violated the country's constitution and "eroded the trust of the nation."

Well, the Olympic dream is still alive. American swimmer Michael Phelps' quest for a record eight gold medals continues after the Team USA's dramatic victory in the 400-meter freestyle relay. Teammate Jason Lezak swam the anchor leg coming from behind to beat France by just a fingertip. The race erased the two world records. It's the second gold medal for Michael Phelps. Up next is the 200-meter freestyle.

ROBERTS: Well, back to our breaking news this morning in the growing international concern over fighting between Russian forces and troops of the Republic of Georgia in South Ossetia.

This morning Georgia rejecting an ultimatum by Moscow. That demand Georgia must lay down its weapons or face an onslaught of Russian tanks and bombers in another breakaway province. And as world leaders desperately try to find a peaceful way out, President Bush, who was in Beijing for the Olympics, is calling on both sides to stand down.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I expressed my grave concern about the disproportionate response of Russia and that we strongly condemn bombing outside of South Ossetia. It was just interesting to me that here we are, you know, trying to promote peace and harmony and we're witnessing a conflict take place.

(END VIDEO CLIP)

ROBERTS: CNN's Frederick Pleitgen is live in Tbilisi, Georgia, for us this morning. Frederick, reports in the last few minutes that President Mikheil (ph) Saakashvili has signed an E.U.-sponsored ceasefire agreement. What do we know about that?

FREDERICK PLEITGEN, CNN BERLIN CORRESPONDENT: Absolutely, John. The president met early this morning with envoys from the European Union from France and from Finland. And he later told a teleconference with journalists that he had, in fact, unilaterally signed a peace agreement.

Now, on the other side of the equation, the Russian president says that his forces are now in control of most, if not all, of Southern Ossetia. Nevertheless, Georgian forces tell us that in that region, there is ongoing fighting. They say that Russian forces tried to make an advance outside of Southern Ossetia into regular Georgian territory to take an important administrative town in that area. They say the Georgian troops were able to withheld those attacks, but they also say that there are air raids ongoing in that area, John.

ROBERTS: And, Fred, you just got off a conference call with Georgia's president. What's he saying about the direction of the fighting and particularly there in the capital city of Tbilisi?

PLEITGEN: Well, he's saying that the fighting is ongoing and there aren't air raids ongoing. And interestingly enough, he had to end that conference call apparently, we were told later, because there were Russian warplanes buzzing around his presidential palace.

Now I can tell you indeed there have been a bunch of Russian air attacks here on the city of Tbilisi. I was actually at one site that was bombed. We were about 600 yards away from where a Russian warplane dropped a bomb on that site.

And now on the other hand, they're saying that some of the fighting is now moving to another breakaway province, that of Abkhazia. There we said earlier that the Georgians have been delivered an ultimatum by the Russian side to disarm and retreat. The Georgians say they will not do that.

They say they are seeing an influx of Russian tanks and also of Russian soldiers into that area. They say they see about 9,000 Russian soldiers in that area who they believe will attack Georgian forces together with Abkhazian separatists -- John.

ROBERTS: All right. Frederick Pleitgen for us this morning with the latest from the Tbilisi. Fred, stay safe, would you?

Georgia about the size of South Carolina, home to less than five million people. Here's more on the region in an "AM EXTRA."

It's also home to a crucial pipeline that carries oil from the Caspian Sea region, much of it headed to Western Europe. The United States has sent more than $1 billion in aid since Georgia gained its independence. That was back in 1991. Current President Mikheil Saakashvili is a western ally and is pushing to join NATO.

CHETRY: The "Most Politics in the Morning" now. Hillary Clinton will be a headliner at the Democratic Convention in Denver later in the month. The Obama campaign announcing the convention's prime time player Sunday. Clinton will address the delegates on the second night, and Michelle Obama speaks on the first night. Bill Clinton and Obama's vice presidential nominee to be announced will speak on the third night.

CNN deputy political director Paul Steinhauser joins us now from Washington with a look at the campaign week ahead. Good to see you, Paul.

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Well, good morning. You know, you're just talking about Georgia a second ago. Both candidates John and McCain and Barack Obama getting briefed on the situation over there in Georgia. But it is August. It's the dog days of August and for one of the candidates, it's time for a little summer vacation.

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SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: It's great to be back in Hawaii. I am really looking forward to spending time with my family, having a chance to see my grandma.

STEINHAUSER: That's Barack Obama's plan for the week, some R&R in Hawaii where he grew up. But with the Democrat Convention just two weeks away and the clock ticking on his pick for a running mate, it's a safe bet this could be a working vacation for him.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We are facing an energy crisis in America who is suffering the most from $120 a barrel of oil and $4 a gallon gas at the gas station, and that's the lowest income Americans who are driving the oldest automobiles. We must achieve energy independence.

STEINHAUSER: Expect to hear more talk about energy and the economy from John McCain this week. With Obama in Hawaii, McCain should have the spotlight to himself. He starts the week in Pennsylvania, the state both candidates are fighting hard to win.

(END VIDEOTAPE)

CHETRY: And, Paul, any other insight about any possible VP pick for McCain?

STEINHAUSER: Well, he spends today in Pennsylvania with Tom Ridge. He's the former governor there, very popular. Also, a former Homeland Security secretary. So this is going to have people talking that Tom Ridge could be one of his running mates. He's considered to be on the short list so that's got people talking this week.

CHETRY: All right. Paul Steinhauser for us this morning, thanks.

STEINHAUSER: Thank you.

ROBERTS: Six and a half minutes after the hour. Here's what else is new this morning.

The music industry loses a legend. Isaac Hayes died Sunday after being found unconscious in his home in Memphis, Tennessee. Hayes music legacy is enormous but he is perhaps best known for a hit from 1971. It was the theme from the movie "Shaft" that won Hayes an Oscar and a Grammy award. From "Shaft" to chef, Isaac Hayes gained a different kind of stardom in the late 1990s as "Southpark's" coolest grown-up, Chef. Isaac Hayes was 65.

Treasury Secretary Henry Paulson this morning downplaying the need for a second economic stimulus package, one that could likely include another round of rebate checks for taxpayers. He said that he would prefer to wait and see how the $168 billion measure passed in February affects the economy. House Speaker Nancy Pelosi says the president's tax rebates were a plus but were not enough.

And no strike at Verizon, a last-minute deal with two unions preventing a walkout by some 65,000 workers. Verizon says the contracts include a pay increase totaling 10.5 percent over three years. One union official calls it a breakthrough agreement. Those contracts subject to union ratification -- Kiran.

CHETRY: Stocks rally on Wall Street posting some of the biggest gains we've seen in months. Oil's cheaper. The dollar's stronger. Can it last? Ali Velshi is ahead.

The new immigration plan -- turn yourself in and schedule your own deportation.

(BEGIN VIDEO CLIP)

KELLY MANTEL, IMMIGRATION AND CUSTOMS ENFORCEMENT: These are individuals who have had their day in court.

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CHETRY: But what's the incentive? You're watching the "Most News in the Morning."

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CHETRY: Welcome back, it's a Monday, and our own personal money honey. Well, someone might already have that money.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Right. Yes.

CHETRY: It's Ali Velshi.

VELSHI: And I'm not really objecting to that. It's not one of those names "I didn't get that one." We'll find something else for me.

Hey, I got the barrel. We got John and we got the barrel. Those two things haven't been together in a long time.

ROBERTS: And typically when we are it's bad news.

VELSHI: Typically when we are it's bad news. But Look at that, $115.20. Oil is a little higher than that. That's where it settled on Friday. It's a little higher than that right now. But really the issue here to discuss is that we seem to be in a different range than we've been in the past. We've been at $135 to $140, $130 to $135. We were way down from that and that is very, very encouraging to stock markets. We've seen investors invest in stocks because they're thinking if oil is down people will have a little bit more money to spend.

Gas is $3.81 a gallon. Still high but a lot lower than it's been. $4.11 is what the high was. Take a look what stocks did on Friday.

A very powerful day across the board. 2.7 percent higher on the Dow. 2.5 percent on the Nasdaq. Almost that much on the S&P 500. And this is what we're looking at now.

Now while oil goes down, we also see an increase in the value of the U.S. dollar against other currencies. Boy, did I waste that trip not going to a euro country. Look at this.

You only need $1.51 now to get a euro. It was up to $1.61, $1.92 to get a pound. And if you go north of the border, 94 cents will buy you a Canadian dollar.

ROBERTS: What is the currency in Croatia?

VELSHI: It's a kuna.

ROBERTS: A kuna.

VELSHI: They're not a euro nation. You know, the many prices are sort of, you know --

ROBERTS: Sounds like a Disney song "Hakuna Matata."

VELSHI: Hakuna. It says the kuna -- kuna.

But here's what we're looking at. We are now in this -- we have to remind you. For those of you looking at your 401(k)s and things like that, we're in this range. I wouldn't say that these are trends. But when oil stays, you know, between $115 and $120 for a while, and if it starts to go down, you'll start to see people paying more attention to their investments.

So I would say to you, if you are looking at your 401(k)s and your investments, just follow them a little more closely than you generally would and we'll keep you posted on the trend --

ROBERTS: Because we're not depressed enough, we want to see the daily drops.

VELSHI: We might be seeing daily gains. We'll keep you there. I'm happy to be here for a little good news and to have you back.

ROBERTS: Hey, it's great to have you back, too, buddy. Thanks.

It's a golf ball size truth that can fuel cars, trucks, even airplanes. We take a look at the clean green power of jatropha.

Plus, Rob Marciano is watching the extreme weather for us this morning.

What do you got, Rob?

ROB MARCIANO, AMS METEOROLOGIST: Hi, John, Kiran, Ali, it's not even a storm that we're looking at. We are looking at a couple of storms in the Atlantic. There are also severe weather across the northeast. We've got video of that. AMERICAN MORNING will be right back.

(COMMERCIAL BREAK)

ROBERTS: It's coming up on 16 minutes after the hour. A live look at the Capitol this morning which looks awfully nice, and it's a very, very comfortable day there in Washington today. 68 degrees you're waking up to and partly cloudy with a high going up to just 79 degrees. A big change from the way it was last week.

You know, we were down in Charleston and Columbia, South Carolina, last week. It was 102 degrees without the humidity. It was dang hot.

CHETRY: And you said the humidity was 95 percent on top of that.

ROBERTS: It was unbelievable. It was like being in a sauna bath.

CHETRY: Yes, 16 past the hour now. Rob Marciano joins us with more about the sticky weather. I mean, it's August. It's the south. But boy, yesterday seemed like a mess in many parts of the country.

MARCIANO: Yes. Well, you know, when you have that buildup of heat and humidity and then you've got the strong, cold air, that clash just certainly makes for some action. They're breaking out apart. It's now across parts of the northeast, but yesterday was a big-time rumble and tumble.

I'll show you some video out of Jersey. This is an I-report that was sent in. Check this out.

Big-time hail out there in Manahawkin, New Jersey. David Goldstein saying, hey, it looks like a winter wonderland. Hail accumulating on his porch, back deck and backyard probably doing a little bit of damage to the foliage as well.

Upstate New York hail also, but also some flooding in and around the buffalo area. We saw a lot of rain there so just outside of Buffalo. Flooding across parts of the roadways there and now things are beginning to dry out. But the storm itself or the cold air, the cold pool of air, is still kind of sitting across parts of upstate New York. Because of that we're looking for more on the way. Just a couple of sprinkles and instability showers shouldn't be all that bad.

I think the main point today is that it's markedly cooler than it was this time last week so enjoy a little bit of September and August. It doesn't come all that often. So there's your cool flow driving down all the way into the Tennessee Valley. Heavy rain expected across parts of the mid south and parts of the southern plains. And we're watching several disturbances now as we start to get -- starting to get into prime time of the tropical hurricane season.

One, two, actually three disturbances rolling across the central and southern Atlantic, one getting very close to the Leeward Islands. We're keeping an eye on that very closely. It could very well develop over the next day or two and head in the vicinity of the United States.

John and Kiran, enjoy the cool video.

CHETRY: Well, that I-report video of the hail -- that shows you why, and I guess if you were trying to go north to south yesterday you were basically stopped on the tarmac in many of these airports because of that crazy weather.

MARCIANO: Yes. Some of the delays at the LaGuardia and JFK were like three, four and five hours. So hopefully today it will be a little bit more smooth sailing.

ROBERTS: That's why they make trains. Rob, thanks very much.

MARCIANO: See you guys.

ROBERTS: Most Americans are grim about the economy, unimpressed with Iraq and unhappy with the Republican in the White House. So why is Barack Obama holding on to just a narrow advantage in the polls? A look at what is preventing an Obama surge.

CHETRY: Also ahead, America's top swimmer, Michael Phelps, still on pace for Olympic history in Beijing. We're going to see why Phelps needed a little help from his friends to get the second of a possible eight gold medal.

(COMMERCIAL BREAK)

ROBERTS: American swimmers getting their Olympic gold medals after a remarkable come-from-behind victory in the 400-meter freestyle relay, the third gold medal for the United States at the Beijing games. The U.S. leads the overall medal count with 12 -- well, actually tied because host China also has 12 followed by South Korea and Russia with six.

Two down, six to go for U.S. swimmer Michael Phelps in his bid for a record eight gold medals. CNN's Larry Smith has more. He joins us now live from Beijing. He's outside the "Bird's Nest" and the "Water Cube" there. What an unbelievable 4 x 100-meter relay last night. Just incredible stuff.

LARRY SMITH, CNN SPORTS CORRESPONDENT: John, this was incredible, you're right. And the schedule Michael Phelps has set for himself to try to get these eight gold medals is near impossible. Seventeen races in eight days, he'll race three times today alone, Monday, in the Water Cube. None better, though, than that relay race that took place last night East Coast time this morning here in Beijing.

The top five teams all broke the world record that was set just Sunday night by the U.S. without Michael Phelps. The great celebration afterwards, in fact, calling Jones -- remember that relay team -- almost fell in the pool. Had he done so, the team would have been disqualified so imagine Michael Phelps failing to get the eighth gold because of a disqualification. So -- but, anyway, they got the eighth and Michael Phelps rolls on. They got the gold, I should say.

Michael Phelps, as you said, now has two vying for that record eight golds. Now we're closing in on the third day of competition here in Beijing, but here is how we got here. Some highlights from the weekend.

(BEGIN VIDEOTAPE)

SMITH (voice-over): American powerhouse swimmer Michael Phelps lived up to his hype as the games got under way winning gold in the 400-meter individual medley and shattering his own world record in 4:384 seconds. Fencer Mariel Zagunis got the winning start for the U.S. over the weekend, taking gold in the individual sabre, a sport that saw the Americans sweep all three medals.

The Redeem Team had a strong start in its quest to bring back the gold. The U.S. men's basketball squad hit the road to Olympic redemption with a 101-70 win over host China. The match-up saw some of the NBA's best go against a familiar opponent, Chinese icon and NBA star Yao Ming.

And proving age isn't everything, 41-year-old Dara Torres anchored the United States 4x100 meter relay team to the silver medal, her 10th career Olympic medal, and she becomes the oldest swimmer in Olympic history.

The games also featured a moment of solidarity with their countries on the brink of war, sharpshooters and medal winners, Natalia Paderina from Russia, and Georgia's Nino Salukvadze, shared a podium and an embrace.

(END VIDEOTAPE)

SMITH: Well, Georgia and Russia will meet again in women's beach volleyball on Wednesday. Meanwhile, John, you know China already has eight golds in these games. That is twice more than any other country. Let's go back to you.

ROBERTS: It was great to see that demonstration of sportsmanship, too, between the competitors from Russia and Georgia considering what's going on between their two countries. Hey, we were watching all weekend, Larry, and the question we had it looks either smoggy or foggy or something behind you. What is the quality of the air like? What's it like to breathe?

SMITH: It's very thick. I haven't had any problems breathing but sweating, perspiring is something. It's very -- the humidity here is very thick. I don't know what the long-range effect is going to be on these athletes especially when we get to the track and field events to start later on this week, but you can't stand outside for more than three or four minutes without sweating. So really staying hydrated is going to be a real challenge for these athletes here.

ROBERTS: All right. Larry, thanks very much. We look forward to your next report. Appreciate it.

CHETRY: It's called self-deportation, illegal immigrants being asked to turn themselves in. Find out why a new program is finding few takers.

Plus, breaking news. Swarms of Russian jets on a bombing campaign inside Georgia. We'll have the latest on the conflict between the two neighbors. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Welcome back to the "Most News in the Morning." An American tourist attacked at the Olympics has now been upgraded from serious to stable condition. Barbara Bachman stabbed multiple times in front of a popular tourist site in Beijing. Her husband, Todd, was killed in that attack.

The two are relatives of the U.S. men's volleyball coach. The suspect later committed suicide. Chinese police say it was a random act of violence.

Iraq's foreign minister insisting a security deal with the U.S. must have "a very clear time line for U.S. troops to leave the country." Iraqi negotiators are said to be close to a long-term security agreement. It would set the rules for U.S. troops in Iraq after the U.N. mandate expires at the end of the year. Those comments from Iraqi foreign minister are the strongest public sign yet that Iraq's demanding a timetable for U.S. withdrawal.

And Immigration and Customs Enforcement officials have launched the so-called self-deportation program for illegal immigrants in America. Now under the program called "scheduled departure," people living in this country illegally can turn themselves in rather than risk being caught and detained by immigration officials. Here's CNN's Chris Lawrence.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): A brutal highway crash kills nine people and injures ten, all in the same SUV. Police say 19 people were crammed inside the suburban Thursday, suspecting illegal immigrants being smuggled into Arizona.

The accident is just part of a larger issue. What to do with an estimated 12 million immigrants illegally living in the country. The government's offering a new deal to some fugitives with no criminal record -- give up, turn yourself in, and we'll schedule your departure.

KELLY MANTEL, IMMIGRATION AND CUSTOMS ENFORCEMENT: These are individuals who have had their day in court and they've been ordered removed by an immigration judge and they have defied that order.

LAWRENCE: But why would anyone risk their life to get in the U.S. and then just hand themselves over? Immigration agents have been raiding homes and businesses, nabbing tens of thousands of fugitives. They were also criticized for breaking up families. But volunteer for "Operation Scheduled Departure," you get up to 90 days to get your affairs in order without worrying that agents are about to come through the door.

CLAUDE PILLER, IMMIGRATION ATTORNEY: Well, I guess if you have two months to say goodbye to your children as opposed to a couple of hours, that's more humane. But at the end of the day you're still saying goodbye to your children.

LAWRENCE: Imitation Attorney Claude Piller says the real reason for the government's offer is overcrowding. He says even with expansion, officials don't have the money or manpower to detain so many immigrants.

PILLER: So if you (INAUDIBLE) momentarily, they don't have to arrest you. That means they don't have to find a place to where to put you.

LAWRENCE: The program's being offered in San Diego, Santa Ana, Phoenix, Chicago and Charlotte. About a half million immigrants are eligible but since it started Tuesday only three people have volunteered.

LAWRENCE (on camera): The offer, so to speak, stands until August 22nd. But after that, Immigration Enforcement agents say all bets are off.

Chris Lawrence, CNN, Eloy, Arizona.

(END VIDEOTAPE)

ROBERTS: A few minutes past the hour. Russia on a bombing blitz right now inside Georgia. Meantime, Georgia's president has signed an E.U.-sponsored ceasefire agreement in a fight over the breakaway territory of South Ossetia.

He says Russian warplanes are now bombing near his palace. Russian officials say they have taken out several radar sites, shut down postal routes and halted ship traffic in the Black Sea. Russia is demanding troops and the Republic of Georgia lay down their weapons or face attacks in the breakaway territory of Abkhazia.

Some residents given the OK to return home this morning after a huge explosion ripped through a propane facility in Toronto. A ball of fire yesterday forced thousands of people out of their homes, killed a firefighter and injured a plant worker. At least five homes were damaged. The gas prices getting cheaper by the day. According to AAA, it will now cost you, oh, a paltry $3.81 on average for a gallon of regular gasoline. Down less than a penny overnight, extending declines for the 25th day in a row. Still very expensive but at least below the $4 mark.

This morning, President Bush is on his way home from China after cheering on the U.S. Olympic team. Mr. Bush says attending the Summer Games was a, quote, "very uplifting experience and exceeded his expectations." While in Beijing, though, the President had to deal with the growing crisis involving Russia and Georgia.

CNN's Elaine Quijano tells us the trip for the President was a real mixed bag.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: John and Kiran, President Bush's trip here to attend the Beijing Olympics was about much more than sports.

(BEGIN VIDEOTAPE)

QUIJANO (voice-over): At the U.S.-China practice baseball game, President Bush posed with both teams, wrapping up a visit that combines sports and diplomacy at every turn.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I was very firm with Vladimir Putin. He and I have a good relationship. Just like I was firm with the Russian President.

QUIJANO: In an interview with Bob Costas on NBC's "OLYMPICS," Mr. Bush described a conversation with Russian Prime Minister Vladimir Putin about the fighting in the former Soviet Republic of Georgia.

BUSH: I expressed my grave concern about the disproportionate response of Russia.

QUIJANO: The President also showed his support for America's Olympic athletes, cheering on the men's basketball team, rooting for and congratulating gold medal winner swimmer Michael Phelps and hitting the beach volleyball court.

But even in this informal setting, the President mixed business and pleasure. At the men's basketball game, he chatted with China's foreign minister. During a break in the action, consulted with Henry Kissinger and, more formally, met with Chinese President Hu Jintao.

HU JINTAO, PRESIDENT OF CHINA: (INAUDIBLE). And I would like to offer you my sincere congratulations on an excellent performance of Mr. Phelps.

BUSH: Thank you.

QUIJANO: President Bush complimented the Chinese leader on the Games and prodded him on religious freedom.

BUSH: As you know, I feel very strongly about religion and I am so appreciative of the chance to go to Church here.

(END VIDEOTAPE)

QUIJANO: The President's Olympic diplomacy was also meant to send a message to his successor that while relations are complex, the U.S. must remain engaged with China in the long term -- John, Kiran.

CHETRY: Elaine Quijano for us. Thanks so much.

Well, it's the "Most Politics in the Morning" and the extremely tight race right now for the White House between Senators John McCain and Barack Obama. And many voters side with Barack Obama on a wide margin on the issues, but there isn't a wide margin when it comes to their choice for president. Why not?

Well, race may be playing a part according to some analysts. John Heilemann writes for "New York" magazine and he's just written a piece called "The Color-Coded Campaign" and joins me now.

Now, why do you think that race is the main reason why Barack Obama isn't doing better in the polls? You're not seeing this breakaway lead over John McCain?

JOHN HEILEMANN, NEW YORK MAGAZINE: Well, I don't know that it necessarily is the main reason, but I think it's actually the most under-explored reason. I mean, it's -- on some level, it's kind of surprising that people don't talk about this more.

And we've had this question for the last couple of weeks -- why is it that Obama is not leading by 10 or 15 points when the Democratic Party is ahead by 10 or 15 points over the Republican Party generically. And Obama is running a very good campaign. He's agreed with on the issues by much more so than McCain.

He should have, you know, much more substantial lead. And it's funny to me at least that this question isn't asked more often. He's the first major African-American candidate in the history of the country. He has a background that is very alien to a large part of America, you know, the Indonesian childhood, a Kenyan father.

If you thought about it from a historical perspective, the idea that the first major African-American candidate would be even, you know, this close would be surprising. And so I think one of the purposes of this piece and the whole cover package is to try to kind of have this kind of difficult conversation. To what extent is Obama's race factoring right now? How much does it make some important segment of white voters? At this point, are they holding back because this is just so much change for them?

CHETRY: And it's exactly how the pollsters try to find this out when they ask you, are you voting for Obama as a Democrat. You're saying yes. Are your friends -- but how are your friends voting? Well, they're not. And so, and so, that's how they try to figure out whether or not there's something people don't want to cop to, an underlying feeling. HEILEMANN: Right. Right. It's a very difficult thing to poll and it's part of the thing. If you ask most pollsters, most of them will tell that we have no way of polling this and we won't really know how much of a factor race was until after the election is actually over. But there are two things.

As you say, that's one question that people ask, although no one's really talking about the fact. There are a couple of pollsters who told me that there's -- if you ask people who they're voting for, a lot of them will say Obama and then they'll say that their friends and neighbors are not.

And if you look at the differences between those two, it's a 10- to 15-point swing. That's a very encouraging number for McCain; a very discouraging number for Obama.

The second thing is that during the Democratic primaries, in the exit polls, we would ask people, the exit pollsters would ask people, whether race was an important factor for them. And somewhere in places like New Jersey and Ohio and Pennsylvania, you know, 10 or 12 percent of the vote said that race was an important factor and voted for Hillary Clinton.

And that's, for many people, a reasonable proxy to tell you about what the numbers were like for people who voted for Hillary because she was white, didn't vote for Barack because he's black and that number will be larger in the general election because general election is a more conservative electorate than the Democratic primary electorate was.

CHETRY: And so many factors play into this. You know, the argument could be made that Barack Obama -- that more African- Americans are going to register and go to the polls because of him, that more young people may do that.

But the other interesting this is, how can John McCain capitalize on this? I mean, there are some people who may not be voting for Barack Obama for various reasons, but does that mean they're going to cross over and vote for McCain or sit it out?

HEILEMANN: Yes. I mean, it's very interesting. I mean, if you actually -- if you talk to some of the pollsters who have actually tried to model this thing out and said, OK, so Obama expands the electorate. Let's say he gets 25 percent more African-Americans to turn out than have ever turned out before.

And let's also assume that he gets a higher percentage like a five or six or seven-point increase in young voters. Even if you factor all that out and even if you get him -- have him getting more votes among Hispanic-Americans than John Kerry did in 2004, he still needs to get 40 percent of the white vote, which is only a point or two less than Kerry got and a point or two less than Gore got.

So, he still needs to get roughly the same number of white votes as any white presidential candidate on the Democratic side ever has. White voters are obviously always a weakness for Democrats. Democrats never win the white vote. But it's surprising how much, even if he increases turnout in those key voting blocks he's aiming to turn them out in, how he still has to do very well among whites.

I mean, the question about McCain is, you know, look, this is a very furious debate going on right now about whether the McCain campaign is playing the -- playing with racial elements in a lot of their ads. I think there are -- there's a pretty good case to be made that they are doing that in very subtle and kind of careful ways.

And, you know, it's not -- the Republican Party does not have a history of using very kind of ingeniously coded racial appeals to try to scare white voters away from the Democratic Party generally. That would also come into play with Obama. It seems, you know, logical to conclude and I think there are some pretty good cases to be made that they're starting to do that.

We're going to see that throughout the rest of the campaign even if it's not as blatant as it was back in the days of Lee Atwater and the Willie Horton ads.

CHETRY: All right. It will be interesting to see. The article is fascinating. And the author is John Heilemann. Thanks so much for joining us this morning.

HEILEMANN: Thank you for having me.

ROBERTS: 38 minutes now after the hour. A potentially dangerous situation unfolding right now in the Atlantic Ocean. We are tracking three storms at present.

CNN's Rob Marciano is standing by in the extreme weather center. He's got the latest forecast for us.

The fuel that grows on trees.

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UNIDENTIFIED MALE: These are chunk full of oil.

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ROBERTS: It's not fantasy land. It's Florida. Susan Candiotti introduces us to Jatropha. You're watching the "Most News in the Morning."

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ROBERTS: Well, is it a fruit or a fuel? How about both? It comes from the Jatropha tree and some people are banking on it as a cure for our dependence on diesel fuel.

CNN's Susan Candiotti says Florida farmers used to growing oranges are now seeing green in more ways than one.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: John, Kiran, in the shadow of this citrus grove are trees whose fruit could power a 747. The fruit's the size of golf balls and grows on trees some 25 feet tall, but the prize is what's inside the shell and you don't want to eat it.

These are chalk full of oil.

CANDIOTTI: Black seeds the size of garlic cloves contain oil that could run diesel engines without any refining, Jatropha can power diesel cars and trucks, and tractors either straight or a 20 percent blend stretching regular diesel. University of Florida researcher Roy Beckford is looking for the best strain of Jatropha. On average, a tree yields only a gallon of oil each year.

ROY BECKFORD, UNIVERSITY OF FLORIDA: The next four or five years, I think we're going to get to the point where we're not only going to increase the number of fruits per Jatropha tree, but will also increase the amount of oil in each of those seeds.

CANDIOTTI: China and parts of Africa all are heavily investing in Jatropha as an alternative biodiesel fuel. In the United States, researchers and farmers have only just begun testing it. In Florida, Jatropha stands up to insect attacks, drought, frost and lousy soil.

BRYAN BEER, CITRUS FARMER: We were always so dependent on oil.

CANDIOTTI: Citrus farmer Bryan Beer also wants in. Driven by exploding diesel prices, Beer is growing 75,000 plants on 30 acres. The oil could help power his tractors that each inhale 120 gallons a day during peak orange harvest.

BEER: Any kind of relief or help that we can get from a cheaper source of oil could impact the agricultural industry tremendously throughout the country, throughout the world.

CANDIOTTI: Planes could be next. Air New Zealand is planning a test flight this fall powering one of 747 engines on Jatropha.

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CANDIOTTI: The question is will Jatropha be the alternative biodiesel fuel that will help the U.S. back off its dependence on old- fashioned crude?

John?

Kiran?

CHETRY: Susan Candiotti for us. Interesting. Thanks.

Well, picking the right running mate, it could mean winning one swing state that John McCain is in today. Why right wing voters are saying Mitt Romney could seal the deal.

ROBERTS: Help wanted --

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UNIDENTIFIED FEMALE: A dirty, physical job.

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ROBERTS: A shortage of veterinarians has farmers worried about their future.

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UNIDENTIFIED MALE: They're our life line.

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ROBERTS: What it could mean for the food supply and you. You're watching the "Most News in the Morning."

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ROBERTS: Six and a half minutes after the hour now. And a time to fast forward what's going to be making news later on today.

Atlanta squares off against gun rights advocates over allowing concealed weapons inside public spaces of its airport. Last month, the State of Georgia passed the law that allows people with permits to carry guns and state parks, restaurants and on public transportation. The city argues that the law does not apply to airports.

In about one hour's time, the Hubble telescope orbits the earth for the 100,000th time. And at that moment, just in case you happen to be viewing us from there, the 18-year-old telescope will be soaring over the mid-Pacific toward the Mexican Coast.

And vacations interrupted. House Republicans continue protesting against Democrats who left for summer recess without holding the vote on offshore oil drilling. Republican leader John Boehner says he'd like to keep the energy protests going until the Democratic National Convention this month. That's what we're fast forwarding to this morning.

Kiran?

CHETRY: All right, 47 minutes past the hour. Rob Marciano watching three potential trouble spots for us in the Atlanta.

Hey, Rob.

(WEATHER REPORT)

CHETRY: Thanks a lot, Rob.

ROBERTS: Rob, just as long as it doesn't last too long because summer is short enough as it is.

ROB MARCIANO, CNN METEOROLOGIST: Right. I'll try to please you.

ROBERTS: Thanks, Rob.

MARCIANO: See you, guys.

ROBERTS: New problem looping for farmers in America's livestock. There is a shortage of veterinarians who treat farm animals. Find out how Congress is getting involved before it's too late.

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CHETRY: Well, trouble down on the farm. The veterinary profession is facing a huge shortfall that could put America's livestock in danger. Now Congress is trying to help. Here's CNN's Brianna Keilar.

BRIANNA KEILAR, CNN CORRESPONDENT: John and Kiran, by 2025 the American Veterinary Medical Association expects the vet shortage to grow to 15,000, most of them large animal doctors.

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KEILAR (voice-over): This is the classroom for Suzanne Gregory, a fourth year veterinary medicine student at Virginia Tech. She's helping Dr. John Curran (ph) do ultrasound on dairy cows.

UNIDENTIFIED MALE: Right there is the baby.

SUZANNE GREGORY, VETERINARY MEDICINE STUDENT: Practicing as a veterinarian is a dirty, physical job, and it takes dedication because you have clients that are relying on you to be available 24 hours a day, seven days a week.

KEILAR: It was a natural choice for Suzanne. She comes from a family of farmers in Southern Virginia. But her fellow students are increasingly choosing to care for household pets instead, deterred by long hours, the rural location of jobs and modest pay.

A vet shortage could leave farmers like Marion Phillips without a central care for their livestock.

MARION PHILLIPS, FARMER: In most cases, they're our life line. If we do not have these vets out here, we would lose a lot of money to death of cows for different problems.

KEILAR: Congress has taken note as experts warn a vet shortage could also weaken the security of the nation's food supply against threats like foot and mouth disease or even cripple the nation's defenses against bioterrorism.

SEN. WAYNE ALLARD (R), COLORADO: Anthrax has been a long time disease that's been around for a long time and veterinarians are the ones that primarily had to deal with it. So, veterinarians are very familiar with these types of diseases.

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KEILAR: Colorado Senator Wayne Allard, a vet himself, sponsored legislation that gives grants to schools preparing large animal vet students for jobs in the public health sector. It passed recently and so did the farm bill, which includes legislation that kick starts the program to forgive school loan debt for new vets who go to work in undeserved rural areas. Many in the profession tell me these are steps in the right direction, but they say much more needs to be done.

John and Kiran?

ROBERTS: Under siege -- Russia expands its blitz. A U.S. ally falls back. The President responds.

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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We strongly condemn the bombing outside of South Ossetia.

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ROBERTS: Plus, the four-day workweek.

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UNIDENTIFIED MALE: It's a challenge but the savings and the improvement in overall morale is certainly worth the investment.

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ROBERTS: A day to recharge the batteries, yours and planet Earth's. You're watching the "Most News in the Morning."

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ROBERTS: It's four minutes to the top of the hour. And checking on the Olympic Games now. Here's the latest medal count. The U.S. and China tied with 12 medals overall, but China has eight golds compared to only three for the United States. South Korea and Russia both have six medals apiece.

Michael Phelps kept his dream for eight gold medals alive with a little help from his friends. With the U.S. trailing on the final leg of the 400-meter freestyle relay, Jason Lezak passed French swimmer Alain Bernard to win the race by 0.08 of a second, earning Phelps his second gold in these Games.

U.S. men's basketball team started their quest to bring the gold medal back to the U.S. by trouncing the home team. And it's looking much better than it did four years ago. President Bush looked on as the U.S. beat China 101-70.

And proving that age is not everything, 41-year-old swimmer Dara Torres anchored the United States 4 x 100 meter relay team to the silver medal. It was her 10th career Olympic medal.

CHETRY: Well, President Bush attended several Olympic events including the U.S.-China basketball game. He also met with Chinese President Hu Jintao and asked -- and he said that no matter who wins the presidential election here, the new president must remain engaged with China.

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BUSH: In the long run, America better remain engaged with China and understands that we can have a cooperative and constructive yet candid relationship. It's really important for future presidents to understand the relationship between China and the region and it's important to make sure that America is engaged with China, even though we may have some disagreements.

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CHETRY: President Bush stopped by one more event, a basketball game, before he headed back to the U.S. this morning.

Well, the mother-in-law of the U.S. men's volleyball's coach is still in the hospital this morning after a horrific attack in Beijing. Barbara Bachman stabbed eight times. Her husband stabbed to death Saturday at a popular Beijing tourist attraction. Our Emily Chang has more.

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EMILY CHANG, CNN CORRESPONDENT (voice-over): Beijing's famous Drum Tower is rain-soaked and closed on a day when it's normally alive with tourists. Foreign media anxiously camped out at the locked doors. A man wielding a knife attacked an American couple, Todd and Barbara Bachman and their Chinese guide.

The Bachmans were sightseeing with their daughter Elizabeth, a former Olympic volleyball player and wife of the U.S. men's volleyball coach.

DALE BACHMAN, VICTIM'S RELATIVE: I was told that Todd was a few steps behind Barbara and Elizabeth. And when the attack happened, Barbara heard Todd. She turned, went back toward Todd, and that's when she was attacked.

CHANG: Elizabeth wasn't harmed but was by her mother's side as she went into surgery with multiple stab wounds.

DR. WANG YIPENG, PEKING UNION MEDICAL COLLEGE HOSPITAL (through translator): Now the surgery is finished. The patient is under further medical care.

CHANG (on camera): The attacker leapt to his death from a balcony of the Drum Tower to the ground. Chinese officials have identified him as 47-year-old Tang Yongming, a retired factory worker with no criminal record. They say he left his home in southeast China a week and a half ago, then turns up in Beijing.

(voice-over): His body was carried away in a wooden box. His motive unknown. A troubling start to the Olympic Games. President Bush was in town for the competition.

BUSH: Our thoughts and prayers are with the victims and their families, and the United States government has offered to provide any assistance the family needs.

CHANG: China has made every effort to ensure the safety of foreign visitors during the Olympics. Though Beijing has a relatively low crime rate compared to other international cities and assaults on foreigners are rare.

The Drum Tower was used to tell time in ancient China. The drums beat to mark the hours. But for now, this colorful landmark will be known for the time it witnessed this crime.

Emily Chang, CNN, Beijing.

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ROBERTS: It's coming up now on the top of the hour and here are this morning's top stories. Breaking this morning, out-of-control riots in the streets of Montreal. You can hear gunshots in this tape just in to CNN as police try to restore calm.

Dozens of people went on a rampage burning cars, blowing up propane tanks and looting after a deadly police shooting there. When firefighters showed up, rioters threw rocks at them. Two police officers were hurt. One was reportedly shot in the leg.

Some good news on the economy to bring you this morning.