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American Morning
Bin Laden Makes Audiotape on Gaza; Clinton Would Use "Principles and Pragmatism" as Secretary of State; Obama Will Expand White House Basketball Court; Runaway Pilot Found Alive
Aired January 14, 2009 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Updating our breaking news this morning. Osama Bin Laden now speaking out about the war in Gaza, President Bush and Barack Obama. The Al Qaeda leader is calling for jihad or holy war against Israel in a just-released audiotape. CNN experts believe that the voice on the tape is that of Osama Bin Laden.
Let's bring in our CNN national security analyst Peter Bergen, who is in New Orleans this morning. Peter, it's been a long time since we heard from Osama Bin Laden, back in May of last year. What do you think is responsible for that period of time?
PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Well, every time, John, you know, he releases an audiotape, there's a chain of custody of these tapes. You can trace that chain back. He has been keeping a pretty low profile. We can only speculate why that is the case. But I think one pretty compelling reason is there have been something like 30 hellfire missile strikes by the United States into the Pakistan tribal areas. Compare that to 2007 when there were only four.
So, and those strikes have taken out a number of Al Qaeda leaders. They're putting quite a lot of pressure on the network. So, on the other hand, you know, the Gaza -- what's going on in Gaza is something that Bin Laden would want to comment on, something that -- a cause that he holds dear. So he has to balance if I release a tape, I may be detected. If I say nothing, I become irrelevant.
ROBERTS: And speaking of that, a lot of people at home might be wondering just how relevant he is and on that point of the Palestinian cause being something near and dear to him. After September 11th he tried to embrace the Palestinian cause and many people in the Middle East said you never cared about it before, why do you care now?
BERGEN: Well, I actually think that, John, my -- if you really go back and look at what he said, it's a cause he's embraced for a very long time. His father, after all, and his father's company, actually rebuilt the mosque in Jerusalem, the third holiest site in Islam when it was burned down by a deranged Australian tourist.
His family has had a long connection to Jerusalem. He himself has said that the Israeli incursion into Lebanon in 1982 is why he turned against the United States, because the United States supports Israel.
So, this is a cause that is pretty near and dear to his heart. And I -- you know, he's now commented on it. If he hadn't commented at all, it would have been very surprising. I was expecting, like many others, that he would comment on the presidential election, as he did four years ago. He didn't.
And so in a way, this is also a proof of life, I'm still out here.
ROBERTS: Right. And back to the relevance question again, just how relevant is he, and does he still have operational capacity? And hiding out, if he is in the tribal areas of Pakistan, what kind of technology would he need to remain operational?
BERGEN: I don't think he's operational, John, as you say. But in the U.S. military we talk about something called commander's intent. If you go in to a battle, you basically know what the commander's intent is, which is to kill the enemy.
Bin Laden has made it very clear who the enemy is, the United States and its allies, Israel and other countries. And occasionally he'll release a tape which has more specific instructions to people in his movement or organization, attack Danish targets because of the cartoon controversy we saw back just last year, an attack on the Danish Embassy in Pakistan by Al Qaeda as a result of Bin Laden's calls for attacks on Danish government targets.
So, you know, this tape is going to get coverage around the world and by every media organization. He doesn't need to make -- call people on the phone. He releases tapes. That's the way he stays relevant, and sometimes there are operational details in these tapes, John.
ROBERT: Right, Peter Bergen for us this morning from New Orleans. Peter, thanks so much.
BERGEN: Thank you.
KIRAN CHETRY, CNN ANCHOR: And just last night President Bush sat down with our own Larry King and Larry asked the President about whether or not he thinks the U.S. will ever find Osama bin Laden.
(BEGIN VIDEO CLIP)
LARRY KING, "LARRY KING LIVE" HOST: Are we ever, ever going to find Bin Laden?
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Yes, of course, absolutely.
KING: You're confident, based on?
BUSH: Because we got a lot of people looking for him. A lot of assets out there and you can't run forever. Just like the people who are allegedly were involved in the east African bombings. A couple of them, you know, were brought to justice just recently.
KING: Did we ever come close?
BUSH: I don't know. I can't answer that.
KING: You don't know or --
BUSH: I really don't know. I'm not trying to hide anything.
(END VIDEO CLIP)
CHETRY: Well, coming up in about 30 minutes, we've got a panel of security experts standing by. And we're going to ask them about this new Bin Laden audiotape and also about some of the top challenges that Barack Obama is going to be facing when he takes office just six days from now.
ROBERTS: Well, yes, as we said, just six days until the inauguration, and Senator Hillary Clinton no doubt the biggest star in his Cabinet. She is expected to be confirmed as secretary of state by next week.
The Foreign Relations Committee gave her a pretty warm welcome Tuesday on Capitol Hill. And although the questions had more to do with her husband than her, Clinton spoke about the muscle that she expects to bring to the State Department.
(BEGIN VIDEO CLIP)
SEN. HILLARY CLINTON, (D), SECRETARY OF STATE NOMINEE: The President-elect and I believe that foreign policy must be based on a marriage of principles and pragmatism, not rigid ideology; on facts and evidence, not emotions or prejudice. Our security, our vitality, and our ability to lead in today's world oblige us to recognize the overwhelming fact of our interdependence.
I believe that American leadership has been wanting, but is still wanted. We must use what has been called smart power, the full range of tools at our disposal, diplomatic, economic, military, political, legal, and cultural; picking the right tool or combination of tools for each situation.
(END VIDEO CLIP)
ROBERTS: CNN's Suzanne Malveaux is live at the White House for us this morning. And, Suzanne, some pointed questions from Republicans yesterday, not about Senator Clinton, but about the former President, Bill Clinton, his fund-raising activities for the Global Initiative.
Any concerns from the incoming administration that lingering questions about his activities could bog this administration down on foreign policy?
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well John, you know, about six weeks ago the Obama transition team sat down with the former President, Bill Clinton, as well as Hillary Clinton to come up with an agreement here to try to figure all of this out.
It was a five-page memo essentially requiring that they release those 200,000 names of the donors to the Clinton Foundation and if there were any problems or questions, that it would go through the State's Ethics Committee as well as possibly the White House Council. They do feel satisfied that they have this framework, so that if there are any questions or any possibilities of a conflict of interest, they can flag it before it actually happens.
There was the Global Initiative that's an offshoot of the foundation. That's been incorporated. It's separate. Bill Clinton can no longer hold those meetings outside of this country, so there's all kinds of mechanisms and rules that are in place that they believe will head this off.
But, once again, they believe it's a case-by-case basis. They think they've got at least some transparency, some things that are in place that'll make this all work -- John.
ROBERTS: The incoming President-elect also has -- he's pretty adamant that he wants the second tranche (ph) of money from that $700 billion bailout package, the $350 billion. And he's telling Democrats in Congress that if he doesn't get it, that he may issue a veto, a disapproval resolution about that whole package.
And how serious is he about that veto threat, it's pretty unusual isn't that an incoming President would issue a veto threat before he even takes the oath of office?
MALVEAUX: It's very unusual but really a kind of a calculus here, the political calculus is that he's not going to have to use that veto, the veto power, because that's the whole point of trying to really tap into the rapport, the trust that he has with his fellow lawmakers.
And what happened yesterday, according to those in the meeting, they were saying that, look, you know, he is serious about the veto threat, but it was more of an approach, like look, I need you guys here to get on board. I need these tools. I need this money. I think it's going to work. So, trust me on this.
And they want more than trust. They want some written commitments here that they're going to follow the money, track the money, that this administration is going to be held accountable. Barack Obama seems very much willing to do that.
So this is really kind of a give and take, they're trying to avoid that political messiness of actually having to issue that veto -- John.
ROBERTS: All right, Suzanne Malveaux for us in the White House this morning. Suzanne, thanks.
MALVEAUX: Thanks, John.
CHETRY: We're following other breaking news this morning as well. Police confirming the pilot accused of faking his own death was found alive at a campsite in Florida. Officers took Marcus Schrenker to a hospital in Tallahassee after an apparent suicide attempt. Brooke Baldwin is live outside of the hospital this morning with the latest on how all this went down. Good morning Brooke.
BROOKE BALDWIN, CNN CORRESPONDENT: What a story, Kiran. Good morning once again.
Yes, U.S. Marshals tells CNN that they were able to track down Marcus Schrenker last night at that campsite all thanks to a tip. And we're also learning that when they found him, he was bleeding profusely, suffering from a self-inflicted gash in one of his wrists in an apparent suicide attempt.
(BEGIN VIDEOTAPE)
BALDWIN: A pilot whose personal and financial world was in tatters, allegedly performed his own bailout above the skies of Alabama. The stunt, which police say was supposed to fake his death, came to an end at a Florida campsite.
JOHN BEEMAN, U.S. MARSHAL SUPERVISORY DEPUTY: We believe that the plane crash was just part of his plan to make it look like -- that he had died in the crash.
BALDWIN: Police say Marcus Schrenker's story started Sunday, during a flight from Indiana to Florida, when he radioed that his plane was in trouble and that he was bleeding.
After being trailed by military jets, his single-engine plane crashed in Florida but Schrenker, nowhere to be found. Police believe Schrenker parachuted to the ground just outside of Birmingham, Alabama.
JIM ATTERHOLT, INDIANA DEPARTMENT OF INSURANCE: If these allegations are true, he is clearly a crud ball, because anyone that would do this to their friends and neighbors and be so brash about it deserves the full penalty that's coming to them.
BALDWIN: After telling police in Alabama he was involved in a canoeing accident, authorities say Schrenker quickly disappeared, using a motorcycle he apparently stashed the day before.
According to Indiana's secretary of state, Schrenker, a financial manager, was the subject of a securities investigation in Indiana. He's accused of stealing potentially millions of dollars from investors.
One former investor of Schrenker's says he felt he got the run- around by the missing pilot.
MIKE KINNEY, SCHRENKER INVESTOR: I've never in my life seen anybody that could tell dishonest untruths that he told over and over again and expect you to believe them.
BALDWIN: A former attorney for Schrenker isn't buying it.
TOM BRITT, FRIEND OF SCHRENKER: But there is absolutely nothing that I ever observed in him that would make me think that any of these allegations are true.
BALDWIN: Court filings show Schrenker's wife recently filed for divorce. A friend of Marcus Schrenker says he received a disturbing e-mail from someone who identified himself as Schrenker shortly after the news broke of the plane crash.
UNIDENTIFIED MALE: He said he was -- he panicked. He blacked out. He was disoriented when he landed. So, he was -- he was trying to explain to me his side of the story. You know, he also wanted to talk about his securities -- the fraud allegations that the warrant was served on, and basically that he had no wrong doing in that.
And then at the end of the e-mail the most disturbing part was he said, "By the time you read this, I'll be gone." And I interpreted that as a suicide note.
(END VIDEOTAPE)
BALDWIN: Because of his self-inflicted gashes, Kiran, he is here in Tallahassee Memorial Hospital, listed in fair condition, and so far, the only charges he faces are those stemming from the securities fraud in Indiana. An Indiana judge posted his bail yesterday for $4 million, cash only.
CHETRY: Brooke Baldwin for us in Tallahassee this morning. Thanks.
ROBERTS: Still ahead, a laundry list of challenges facing Barack Obama. And we are looking at the top five.
Our panel of security experts talks about the challenges of preventing a terrorist attack on the heels of a new message from Osama Bin Laden. You'll want to hear what they have to say.
It's 11 minutes now after the hour.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
CLINTON: I believe that American leadership has been wanting, but is still wanted. We must use what has been called smart power: the full range of tools at our disposal, diplomatic, economic, military, political, legal, and cultural; picking the right tool, or combination of tools, for each situation.
(END VIDEO CLIP)
CHETRY: That's Senator Hillary Clinton vowing to bring, quote, "smart power" when dealing with crises throughout the globe. During a full day of testimony before the senate, the would-be secretary of state promised to redefine the role of America's top diplomat.
James Rubin was the assistant secretary of state during the Clinton administration. He's a long time supporter of Hillary Clinton and he joins me this morning. Thanks for being with us. JAMES RUBIN, FORMER ASSISTANT SECRETARY OF STATE: Good morning.
CHETRY: So, she did talk a lot about this notion of smart power, also calling for increased funding and really a new era, if you will, in how diplomacy works. What do you think is going to changed most with Hillary Clinton helming state?
RUBIN: Well, in terms of changes between the Bush administration and the new Obama administration, I think the big difference is that the secretary of state is going to be authorized, by the president, to engage with countries that are our adversaries. Too often under the Bush administration, we basically decided we couldn't talk to this country or we couldn't talk to that country.
Hillary Clinton, particularly in the case of Iran, has made clear that she is prepared to engage with Iran. We'll have to see you how that unfolds but the point is the top diplomat is going to be doing diplomacy and I think we're in for an era of very, very effective and strong American diplomacy.
CHETRY: Interesting though, you speak about Iran now, because on the campaign trail she did use some her strongest words, she called, if Iran attacked Israel, that we could obliterate -- was the term she used in talking about Iran. Has she changed and refined some of her positions as well coming into the Obama administration?
RUBIN: I think clearly Hillary Clinton and Barack Obama have gotten together, sorted through what I think were basically minor differences between them during the campaign. And I think what we're going to see, as Barack Obama, president-elect, said over the weekend, a new policy on Iran. And what that means is that direct dialogue with Iran, negotiations, finding out if there is a way to resolve our differences through diplomacy is going to be involved.
And I think you saw an indication of that yesterday when Hillary Clinton offered to Iran to become a constructive, regional actor. That means a country in the region that we can do business with that is playing a positive role. That's not the kind of language you heard from the previous administration.
CHETRY: Right. It does come at an interesting time, though, when there are many, including those military leaders, who are accusing Iran of helping fund what's going on in Gaza right now, helping provide help to Hezbollah and Hamas to fight these proxy wars, if you will. So that's a challenge.
And on top of that, today we're hearing this audiotape from Osama bin Laden purportedly -- from Osama bin Laden. What do you think the biggest challenge is going to be moving forward in terms of foreign policy?
RUBIN: I think the overall challenge is going to be going after that place where Afghanistan and Pakistan control doesn't exist in those middle areas, where Osama bin Laden, Al Qaeda, the Taliban, anti-American extremists have had the opportunity to run free. And, clearly, that is the most dangerous place in the world right now, and efforts are going to be made to deal with it.
But meanwhile, in the Middle East, you have a situation where Iran clearly has gained from the fact that Iraq, it has an ally in the Iraqi government, the Taliban are gone from Afghanistan's leadership. And Iran has more and more influence, through Hezbollah, through Hamas. The question is -- and this is the biggest challenge of them all -- will the United States be able to develop some modus vivendi, some working relationship with Iran that avoids these conflicts of blowing up in that part of the world.
CHETRY: And you were assistant secretary of state under Madeleine Albright, a female. Is there a difference in terms of how female secretaries of states are received, and also the fact that she's the wife of a former president?
RUBIN: Well, it is somewhat unusual, and I think pretty terrific. We've now had three out of four female secretaries of state and Madeleine Albright was there. Look, she's the American secretary of state first, she's a woman second to most of the world.
And I think in Hillary Clinton's case, she's got enormous star power. And although Bill Clinton and Hillary Clinton may not be popular in some small circles here in the United States, around the world, these are enormously popular people. So, she's got probably more star power than any secretary of state in a long time. That will give her some oomph, some influence at the negotiating table that I think should do America well.
CHETRY: James Rubin, great to talk to you. Thanks for being with us this morning.
RUBIN: Thank you.
ROBERTS: Homeowners underwater. They owe more on their home than it's worth, so what can they do about it? Gerri Willis has some important advice in her "Housing Survival Guide."
It's eighteen and a half minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Twenty-one minutes after the hour. Welcome back to the most news in the morning.
Take a look at this. A deep freeze is rolling through the Midwest dropping wind chills into the minus 50s in northwestern Minnesota. Now it's headed toward the northeast and sending temperatures into single digits and snarling traffic at several airports.
Meteorologist Rob Marciano tracking it all for us this morning from Atlanta, where it's relatively mild in comparison. I was looking just a second ago online, the temperature in International Falls, Minnesota, right now, without the wind chill, minus 33. Unbelievable.
(WEATHER REPORT) CHETRY: The voice of terrorists speaks again. Osama bin Laden's new call for jihad, still ahead as we count down the top five challenges facing Barack Obama. We're going to talk to our panel of experts about preventing a terrorist attack.
It's twenty-three and a half minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Well, it's a problem that too many American home owners are now facing; owing more than their house is worth. It's called being underwater. So, if you are, how do you bail yourself out? CNN's personal finance editor, Gerri Willis has some tips in her "Housing Survival Guide."
You know, we're seeing interest rates go down, but many, many homeowners who took out these home equity loans are now owing more on their homes.
GERRI WILLIS, CNN CORRESPONDENT: Or toxic mortgages, they're all in trouble. Let me tell you a little bit about the numbers first, some 11.7 million Americans are at risk here because they owe more on their house than it's worth. $2 trillion worth of value lost in this market last year. And as you can see, 8.4 percent loss in homeowner value overall.
What do you do?
Well, first off, you want to get the facts. A lot of people are operating off of gut. They really don't know what's happened to their house value. You need to get the facts. Hire an assessor, go to a real estate agent that you trust. Ask them to come up with a number that represents your home's value, understanding that those things can change quickly in this environment.
What they will do is look at homes that have sold in your area recently that are similar to yours. They'll drill down, they'll take the price, they'll divide by square footage and they'll come up with a price per square foot, and that allows you to come up with a number for your house. Once you have that, you're in the driver's seat. You know what's going on.
Next thing to evaluate, what kind of neighborhood do you live in? The neighborhoods that have lost the most value in this market, they're the markets where new homes have been built. Great, big suburban tracts, those homes are at risk. If you live in an urban renewal area, those homes are at risk.
But if you live in an older neighborhood where the values are fairly consistent, this is something you don't really have to worry about, particularly if you're not moving anytime soon. If you have a job, you're holding on to that job, I say, sit tight, wait it out, at some point this market will recover, or at least bottom. And you won't be forced to take a loss because you have to sell at a low.
And, finally, the people really at risk, of course, are those folks who maybe they lose a job. These are the people that have to get out of the house. Or maybe even people who get a new job and have to move. If that happens to you, best-case scenario here, you can rent the house out, that means you don't have to sell it, realize the loss. Find somebody who will take that property over, give you money in return.
Or even sometimes a bank will give you a loan that will include the value of the money that you've lost into your new loan, so you get a new mortgage on a new house because you're taking a new job, that new mortgage includes what you owed on the old house. It's not a perfect solution, but it is a solution for folks out there who are really struggling right now.
CHETRY: So, if you still do have your job and if you are able to sit tight, is that the best bet?
WILLIS: That's the best bet. A lot of people don't have that possibility.
CHETRY: Right.
WILLIS: Maybe they have to move on, can't make -- can't make the payments, but if you can sit tight at this point, the recovery will come at some point, at least housing prices will stabilize. If you've been there a long time, you enjoyed the run-up in prices. So, you've probably already seen some gain over time.
I don't want to be a Pollyanna here, but I also don't want people to realize these losses if they don't have to.
CHETRY: Gerri Willis for us, good advice. Thanks.
WILLIS: My pleasure.
ROBERTS: It's 29 minutes down after the hour. And breaking news this morning: Osama bin Laden speaking out about the war in Gaza. The Al Qaeda leader is calling for Jihad, holy war, against Israel in a just-released audiotape. He also speaks about the end of President Bush's term and the beginning of President-elect Barack Obama's.
It could be the first time we've heard from bin Laden since May of last year.
The Supreme Court welcoming the new president, Barack Obama and Joe Biden are heading there today. They'll meet with Chief Justice John Roberts and the associate justices and get a tour of the courtroom. The last visit by a president and vice president-elect was made by Bill Clinton and Al Gore; that was in December of 1992.
An ex-transit officer now under arrest accused of shooting and killing an unarmed man in a San Francisco subway station on New Year's Day. Video surfaced earlier this month showing the victim face down on the ground when the gun went off; some protesters calling the shooting a quote, "modern-day lynching." The department is investigating. Well, all this week we're tracking the top five challenges facing the incoming administration. Today, we're looking at number three, preventing a terrorist attack; national security.
Joining me now is a former member of the 9-11 Commission, Tim Roemer; CNN national security contributor and former Homeland Security adviser to President Bush, Fran Townsend; and terrorism analyst Ken Robinson.
Guys, I'd like to throw out a topic and get you to kick this around a little bit. Last night on "LARRY KING LIVE," President Bush said that the number one job of the president is to protect the American people from another terrorist attack. And Fran, why don't you kick us off here, where do you think the next attack will emanate from?
FRAN TOWNSEND, FMR. BUSH HOMELAND SECURITY ADVISER: You know, John, I think most analyst on this issue agree, the greatest threat to our security is in the tribally administrated areas of Pakistan. That's the ungoverned space between Pakistan and Afghanistan. And we worry because there's large populations in western Europe, in Great Britain, they've been very public about it. People traveling back to that region, getting radicalized, getting trained, coming back in to western Europe.
And then once you're in western Europe, you are, you know, a very easy plane ride into the United States. And so we really do worry about the threat emanating from that area.
ROBERTS: Ken Robinson, you agree?
KEN ROBINSON, TERRORISM ANALYST: Yes. It's the farm team, if you use the baseball analogy. They go there. They have sanctuary, they train, they plan. And then they move back in to about affiliated groups. It's not a hierarchical organization like a corporate structure, but they get with like-minded people who also have an angst and they potentially are ready then to carry out some type of an attack.
ROBERTS: Tim Roemer, do you believe if there is another attack on the homeland, it's going to be Al Qaeda or could it be a homegrown group? You know, we remember what happened in Oklahoma City back in 1995, so the threats come from a number of different places.
TIM ROEMER, FMR. 9-11 COMMISSION MEMBER: Well, that's the point, I think, John. We hear the Bin Laden tape today, and it certainly reminds me of something he said right after 9/11. That it wasn't 19 Arab armies, it wasn't 19 Arab states that attacked America, it was 19 postgraduate students.
This can come from Al Qaeda radiating out of the tribal areas in Pakistan. It can come from Al Qaeda teaming up with another group, like Lashkar-e-Taiba. They did that into Mumbai. It can come from trans-national threats. It can come from cyber security and hit our electrical grid. It can come to hit our troops in Afghanistan and Iraq. We need to think about this unconventionally and think outside the box just as Al Qaeda does.
ROBERTS: According to an ABC translation of the new Bin Laden tapes, he questions whether or not Barack Obama is capable to keep fighting us Al Qaeda for more years. Fran, you were Homeland Security adviser for a number of years, you were in the Bush administration longer than that. The Bush administration couldn't get Bin Laden, can Barack Obama?
TOWNSEND: Look, I don't think there's any question that capturing or killing Bin Laden will continue to be a top priority for the Obama administration just as it was for the Bush administration. You know I don't put a lot of weight in this most recent tape. This is sort of a desperate attempt for him to try to remain relevant and signal the Obama administration that they're going to have to may attention to him.
We hear from him less often. He's got to do it frankly to prove that he's alive anymore because there are rumors that he's dead and he's got to do it also to inspire, you know, his own followers, to believe that they need to continue to launch these attacks.
ROBERTS: Do you agree, Ken, somewhat of a toothless tiger?
ROBINSON: He's irrelevant other than he's a symbol. What's dangerous about Bin Laden is his ideology. Because it's now been embraced by about 60 jihadist groups in 60 countries. And those affiliated groups that Tim was speaking of, that's kind of where the threat is going to come from. It's coming out of sanctuary. It's the Arab streak. A lot of times it's an educated -- it's an educated, disenfranchised youth. It's not necessarily someone who is -- who is very poor and undereducated.
Sometimes it's a suicide bomber attacking our interests on a supply line, just as often it could be an educated student in a university somewhere. And eventually it will come to the United States.
ROEMER: John, I'd just like to jump in and say, I think the tape is important. It's over hyped, I think, a little bit. It will be played all day all over the world. But I think it's important. Bin Laden is reaching out to be relevant. He is competing with Hamas and Hezbollah and the Israeli-Palestinian conflict.
He is probably not operational, but he is motivational. He does attract young people by these tapes and he is somebody that can recruit through these tapes. It's very important to get him and to pay attention to him. It's also important to counter his message.
We have not done a good enough job over the past eight years defining Al Qaeda. They go out and they kill Muslims in Pakistan and Islamabad when they blew up the hotel there.
ROBERTS: Right.
ROEMER: This was not a U.S. versus Muslim or Islam battle. This is Muslims killing Muslims and Al Qaeda depriving children of opportunities. Bin Laden doesn't have a message of jobs or health care or hope. And we need to define Al Qaeda in a more effective way.
ROBERTS: Folks, stay right where you are, because there's a lot more to discuss. Port security, what's going on in Mexico, narco- terrorism among them. So, we'll be back with you just after a short break here. And remember for those of you watching at home, all this week we're looking at the top challenges Barack Obama will face as president. So if you've got a question that you want to ask, go to CNN.com/am and send it to us. We'll be right back. It's 35 and a half after the hour.
(COMMERCIAL BREAK)
CHETRY: Well it's right about this time that we get those new economic numbers. And today we have new retail sales numbers just in. Much worse, unfortunately, than expected. Christine Romans is here now with details for us.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: We knew, Kiran, they were going to be bad. I mean there's no surprise there. But they are much worse than people expected. Retail sales in December down 2.7 percent when you strip out autos, it was even worse, down more than three percent.
The sixth month in a row now, the American consumer has been spending less, pulling back. That's a record. That does not happen in the American economy. And for one reason or another, we know what those reasons are, American consumers are chastened. They are pulling back. They are more thrifty, or they are under stress and can't pay more.
They can't go out there and buy more things. So, for six months in a row we got retail sales down, 2.7 percent, 2.6 million jobs lost, a couple million foreclosures expected. No surprise there. Their job and their home, a big concern. The economy a big concern. So, American consumers are doing what is quite honestly a few years ago, the unthinkable. They are spending less every month than they did the month before. Kiran.
CHETRY: All right. Christine, thanks. John.
ROBERTS: All right. Talking more about Homeland Security, national security, we're back with our panel, looking at the challenge of preventing another terror attack on U.S. soil. We're back with Tim Roemer, Fran Townsend and Ken Robinson.
We got a question that came in to us via the Internet. This is from Mary. She asks, when will this country start closing all the security loopholes in our nation's ports? How can we possibly accomplish this in a so-called free country? Fran, you were recently at the White House, you want to start us off on that topic?
TOWNSEND: Well you know, John, you are aware, there is now legislation that requires 100 percent of cargo screening by 2012. Right now, we'll be lucky in 2009 to hit six percent. So, imagine, with all the money that is currently being spent what it would take. I think it's time for the country to take a step back and say, does it make sense. What's the threat emanating from the supply chain, and does it make sense to try to get to 100 percent just because if we spent enough money, we can.
You know, the big threat here is, would Al Qaeda, or an organization, put a nuclear weapon in the supply chain and send it in through a container? My view of that is, that threat is unlikely. If they got their hands on such a weapon, would they release it into the supply chain to get it here? And so I think when you're talking about how do you spend your next dollar in a tight economy, whether or not this really makes sense when you should be building redundancy and resiliency in your critical infrastructure, it might make more sense.
ROBERTS: Tim, Ken, what do you think about that?
ROEMER: Well I agree with what Fran has said. I think one of the most important things is risk assessment. What is Al Qaeda likely to do based on intelligence and actionable intelligence. What's the costs? And if Sun Tzu's said if you try to protect everything, you protect nothing.
What are our priorities? How do you develop the right kind of technology in our ports to detect that radiation? We can do a better job there. But, also, how do we do that without disrupting the economic chain of events...
ROBERTS: Right.
ROEMER: ... and flow and hurting our economy further in these very difficult times? And how do we rely on our partners overseas to do some of these things in ports overseas and not put all the burdens on the taxpayer.
ROBERTS: Ken, let's hear from you.
ROBINSON: That projecting the power that Tim is mentioning is one of the things that has been put efforted(ph) in the last eight years, is trying to find things that can be done at the port of departure before it comes in to one of our ports.
I'm here in Los Angeles where we have a very active port, taking care of all of our issues in Asia. And an enormous amount has been done here in terms of federal, state, and local integration and communications. There's much more preparedness after 9/11. The issue that Fran brought up was terrorists get to pick their choice of their target. And it's typically going to be the soft target, protecting everything is not the way forward. We have to make smart choices, based on their capabilities.
ROBERTS: I want to throw one more topic out there. You know, Ken, you were involved in operations, counter terrorism, special ops. We had a person here that was involved in similar exercises with the CIA, Gary Berntsen in a couple of days ago, said one of the biggest threats facing the United States in the coming years is the threat of narco-terrorism emanating from Mexico. What do you think about that?
ROBINSON: The threat on our southern border has been a huge problem and a growing problem for about 15 years in the area of narcotics. It's driven by our consumption in the United States and the fact of their economy and it's very hard to push people away from gravitating toward that life. They're starting to mirror image the behavior of terrorists. They're doing a lot of beheadings. There's an enormous amount of graft and infrastructure corruption, by the police, by the military along our southern border and we've simply been distracted by so many other international events that it's hurting us.
ROBERTS: Let me let Fran get in the last word. What do you do about that?
TOWNSEND: This is a real problem, John. People don't realize 3,000 to 5,000 has been killed in northern Mexico, police officials, military. I mean, it's tremendous the losses Mexico is suffering. We're sharing intelligence with them, it's very difficult because we worry about corruption. And if we share intelligence, will that get to the bad guys? But we have to do a better job.
We're going to have to strengthen our relationship. We need Mexico to be successful. And I suspect that when President Calderon met with President Bush this week, this was a topic of conversation. Because I know it's a priority for the current administration.
ROBERTS: He --
ROEMER: John, can I jump in on this too?
ROBERTS: Sure.
ROEMER: I think there are two important points here too. One is, we noted on the 9-11 Commission that Al Qaeda pays attention to the borders. One of the publications they actually noted the number of cars and trucks coming across our southern border. There are virtual things we can do, physical things and manpower things that we can do on our border to better secure it.
But also as President-elect Obama has talked about and I would give a compliment to former president, soon-to-be former President Bush, we need to change the spirit of things in Washington, D.C.. We know how to do immigration reform in a bipartisan way. The far right took that on and defeated the president when he tried that effort. We have to get back to that and bring people together to do the right thing on immigration.
ROBERTS: All right. No question. A lot of challenges for the incoming president. Tim Roemer, Fran Townsend, Ken Robinson, thanks for being with us this morning.
TOWNSEND: Thanks, John.
ROBERTS: Good to have you sharing your expertise. I really appreciate it.
And don't forget that you can follow along. Tomorrow's topic is our number two topic on challenges facing the president -- health care, with a new panel of experts. You are going to ask them your own question, just go to cnn.com/am and send it in.
CHETRY: Well, still ahead, controlling the crowds at next week's inauguration. An inside look at plans to keep tens of thousands, hundreds of thousands, of people safe. It's 44 and a half minutes after the hour.
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CHETRY: Well, it doesn't take much for a crowd to turn into a mob, so how is Washington getting ready to handle the record amount of people that are planning to come for the inauguration? CNN's Jeanne Meserve is taking a look at the final prep.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: John, Kiran, there is no way to reliably predict just how many people will come to the inauguration, though estimates range from one million to two million. It may be the largest crowd in the capital's history, and that poses an enormous challenge.
(BEGIN VIDEOTAPE)
MESERVE (voice-over): Port-a-potties, side by side, row upon row on the National Mall, in preparation for a very big inaugural crowd. A poorly managed crowd can be destructive, even deadly. Just a few weeks ago, a Wal-Mart security guard was trampled by shoppers on the hunt for a bargain. Inaugural officials have consulted a crowd- management expert who has studied events like the Hajj, the annual pilgrimage to Mecca.
UNIDENTIFIED MALE: People have learned by the mistakes that have been made in terms of massing very large numbers of people there, in terms of having hard starts, where you simply open the floodgates and then you get the stampedes through.
MESERVE: Washington is used to big gatherings like fourth of July celebrations and the police know how to handle a crowd. But the challenges on inauguration day could be unprecedented.
CHIEF CATHY LANIER, D.C. METROPOLITAN POLICE: Information is my best friend.
MESERVE: Text messages, jumbotrons and loud speakers will all be used to communicate with the crowd in an emergency. If long waits lead to frustration and anger, officials have plans to defuse it.
LANIER: We actually have customer service folks that will be walking up and down lines, giving people maps and telling them where to go and you know kind of being ambassadors to make people feel, you know, a little bit more comfortable with what they want to do.
MESERVE: Officials are already publicizing the basics. Screening checkpoints will open at 7:00 to let the first 300,000 or so people onto the parade route. Backpacks, coolers, strollers, large umbrellas will all be banned. Restrictions will be looser on the Mall where the overflow will be sent. Spectators who choose can stake out a mall spot early, though camping is prohibited. Officials deny they are trying to discourage people from attending.
MALCOLM WILEY, SECRET SERVICE: It's quite to the contrary. Our efforts are to make sure that people are safe. We would like as many people to come as want to come.
(END VIDEOTAPE)
MESERVE: Some experts say the number of portable toilets is estimated to be about 5,000 is grossly inadequate for the crowd. Others are worried about food and drink. Planners believe they are about as ready as can be. But warn this will not be your average day out. People should plan carefully and dress appropriately. John, Kiran, back to you.
CHETRY: All right.
Well, you can watch the inauguration with your laptop at hand. Cnn.com is teaming up with Facebook for special, in-depth coverage. Be a part of history by logging on to facebook.com/cnn.
ROBERTS: From the runway to the Beltway, it's the biggest question, who will be dressing Michelle Obama on Inauguration Day? We've got the latest scoop for you. It's 10 minutes now before the top of the hour.
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CHETRY: Well, less than a week to go until the inauguration. Michelle Obama's dress of course remains one of the best kept secret in Washington. This morning, rumor has it that an American designer is working on at least maybe one of her gowns and one designer is the former protege or actually worked for my next guest, Kate Betts. She is the editor of "Time" Style and Design. That's "Time's" magazine, Kate, great to talk to you. You are talking about Thakoon who you worked with "Harper's Bazaar" when you were an editor there. Tell us about his designs and why Michelle Obama might pick him and this would be for her daytime outfit on inauguration day.
KATE BETTS, EDITOR, "TIME" STYLE & DESIGN: Well, she's worn him before. She wore him at the convention and she loves color and print and he is very good with that and he has a very feminine but easy feel. And he does dresses beautifully. And so I think she really likes the dresses that he does for her.
CHETRY: As you observed her outfit choices and selections over the course of the campaign, what do you think defines her style?
BETTS: Well, she's very confident. So, she has great use of color. She has great use of print. She's not afraid to mix high and low. I think people really appreciate that now, especially in this economy, wearing J. Crew, on "Jay Leno" was a big hit. And I think, you know, she knows what she likes. You can tell.
CHETRY: All right. We want to show a couple of the designs that she had chosen before. You mentioned J. Crew and she famously wore that for her appearance was it on one of the late shows - BETTS: Yes.
CHETRY: I think, she said, this is J. Crew and that outfit, I think it was a yellow ensemble, sold out on their Web site. There it is. So tell us a little bit about some of the other designers that are being floated, and we've heard Diane von Furstenberg, and we've also heard about her own Chicago based designer Maria Pinto. Why are they appealing to Michelle?
BETTS: Well, first of all, I think she's been very supportive of American designers for obvious reasons and I think she's been very supportive of young American designers like Thakoon and Jason Woo. I think Maria Pinto is somebody that she's worn a lot before on the campaign trail and also at the convention. So she probably feels very comfortable in that and she's somebody she knows. And Maria Pinto designs very flattering, very feminine dresses.
CHETRY: There's one of them.
BETTS: Yes, the purple one. She really knows how to use color. And I think that, you know, I think Michelle Obama's style really telegraphs somebody who knows what works for her and what she feels good in and she knows how to make it work.
CHETRY: The other interesting thing is the weather. I mean, obviously, a lot of these inaugural balls are really taking place indoors. But does that factor in some of the selections and just how cold it's going to be in January and how long you're going to be in these various places?
BETTS: Well traditionally the inaugural ceremony, they has always been you know they always wear a coat. And then you think of Jackie Kennedy in the cloak coat with the fur-trimmed collar and the matching pillbox hat and everybody around her was wearing fur coats and she sort of stood out because she was wearing a cloth coat. So it will be interesting to see how she fights off the cold. Because it is supposed to be very cold.
CHETRY: Right. The design of the coat may matter at least as much for the earlier part of the day. Well, it was great to talk to you, Kate Betts, editor of "Time's" Style and Design. Thanks for being with us this morning.
BETTS: Thank you.
ROBERTS: One-on-one with Barack Obama. He is bringing his game to the White House. A look at his plans to expand the presidential court. It's 56 minutes after the hour.
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ROBERTS: When Barack Obama moves into the White House next week, he's going to have his work cut out for him. We're not talking about a fix for the economy, we're talking about satisfying his basketball jones. CNN's Erica Hill has got more on Obama's hoop dreams.
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ERICA HILL, CNN CORRESPONDENT (voice-over): Barack Obama's love of basketball is almost as famous as the president-elect himself. From his high school days in (INAUDIBLE) in Hawaii, to shooting hoops with soldiers in Kuwait last summer. It's clear the President-elect is at home on the hardwood. But a game of pick-up at 1600 Pennsylvania Avenue will be a little harder to come by. The only court is outside, and it isn't even half the regulation size. Not that Obama doesn't have plans.
BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: We are going to take the bowling alley out of the White House. We are going to be putting in a basketball court.
HILL: The NBA has offered to help, while the owner of the Washington Wizards said the president-elect is free to use the Verizon Center anytime. There's been much written about the president-elect's style on the court, and what it says about his style as a leader. It isn't the first time some would look to his game for insight.
CRAIG ROBINSON, OBAMA'S BROTHER-IN-LAW: My sister had heard my dad and I talking about how you can tell a guy's true character when you take him out on the basketball court. I told my sister, this guy's terrific.
HILL: Pennsylvania Senator Bob Casey played basketball with Barack Obama on the morning of the election. He offers this take on the incoming president's game.
SEN. BOB CASEY (D), PENNSYLVANIA: When he plays, he plays very seriously. He has a sense of command about the way he plays. And he always picks a good team.
HILL: Obama has joked about his new team in Washington. With more than one known for their time on the basketball court with the president-elect, including newly appointed education Secretary Arne Duncan.
OBAMA: I will say I think we are putting together the best basketball-playing Cabinet in American history.
HILL: The only issue where that Cabinet will play.
OBAMA: He's clutch.
HILL: Erica Hill, CNN, New York.
(END VIDEOTAPE)
ROBERTS: You know, after seeing the then-candidate Barack Obama's attempts to bowl, I think he's better off to get rid of the bowling alley and put in the court.
CHETRY: That's right, take care of the cardio aspect as well, right? ROBERTS: Exactly. Thanks so much for joining us on this AMERICAN MORNING. We'll see you back here bright and early again tomorrow.
CHETRY: Now here's CNN NEWSROOM with Heidi Collins.
