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American Morning

North Korea Conducts Nuclear Test; Colin Powell Fires Back on Dick Cheney's Comments; Embarrassing Security Breach at Buckingham Palace; Obama's Supreme Court Choice; North Korea: Isolated Economy; Pakistan Taking on the Taliban

Aired May 25, 2009 - 06:00   ET

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

ANNOUNCER: This is CNN breaking news.

KIRAN CHETRY, CNN ANCHOR: Welcome. Thanks for being with us on this AMERICAN MORNING. It's Monday, May 25th. It's Memorial Day. I'm Kiran Chetry along with T.J. Holmes and we start the morning off with some breaking news.

T.J. HOLMES, CNN ANCHOR: A breaking news almost as all this is going to be a big talker (ph) for our coming days.

A lot of big stories that we're going to be breaking down this morning. But the big one, North Korea conducting a nuclear test late last night and reportedly test firing several -- several short-range missiles as well.

This morning, that's raising new security questions and setting off a political firestorm around the world. We'll take you live in Tokyo and the Pentagon for the very latest.

Also this morning, the White House assessing the threat and blasting back at North Korea, calling its test a matter of grave concern to all nations. We will take you live to Washington for the administration's diplomatic options.

Also, General Colin Powell responding to Republicans who are challenging his party loyalty. The former secretary of state appearing on CBS's "Face the Nation" yesterday, issuing a challenge to Dick Cheney and Rush Limbaugh, also a warning to fellow Republicans.

CHETRY: We begin though with breaking news.

The White House now condemning North Korea after it says it successfully conducted an underground nuclear test. This morning, South Korea's official news agency is reporting that the North also test fired three short-range missiles.

Last night's nuclear blast was reportedly more powerful than the country's first test that was back in 2006. In fact, Russia comparing the size of the latest explosion to the U.S. atomic bombs that hit Hiroshima and Nagasaki in World War II. At this hour, neighbors and enemies all firing a barrage of criticism at the North over this test.

We're tapping into the global resources of CNN. We have Barbara Starr live at the Pentagon. Morgan Neill is live in Tokyo, and Jill Dougherty is live in Washington with reaction from the White House.

We start though with Barbara Starr. What is the latest word from the Pentagon this morning as to how much of a threat this nuclear test is, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kiran, we've been talking to our sources throughout the night.

And let's be clear, the first question still to be answered by the Obama administration is, are they absolutely sure it was a nuclear test? A senior U.S. administration official says they are still analyzing all of the seismic data, all of the atmospheric data, and it may be Wednesday before they can come to a final conclusion about exactly what happened.

The U.S. intelligence community keeps sensors in that region all the time. They are collecting the data, looking at it. You see a lot of conflicting reports about the size of the test, what exactly transpired. That's going to be the first job they have, trying to determine what happened and telling President Obama.

As for any U.S. military reaction, there won't be any by all accounts. The U.S. military maintains ground forces in South Korea and both Naval and Air Force is in the region. But make no mistake, this is going to be a diplomatic initiative once again between all the countries in the region and the United States to try and get North Korea to move away from its nuclear ambition.

So short-range missile tests you talked about -- talked about very concerning, not unexpected. That's what North Korea does, but it certainly unsettles Japan and South Korea neighbors -- Kiran.

CHETRY: In the meantime, we have these tests coming as Defense Chief Robert Gates is getting ready to head into the region. Any word on whether or not this changes plans or adds to his agenda?

STARR: Well, I think it certainly does add, in fact, as you say, to his agenda. This was a scheduled meeting. He is on his way to Singapore. He will also travel to other countries in the region on a six-day swing through the pacific. He will go to South Korea.

All of this was planned, but this just underscores the importance that the U.S. places on the region. He will talk to leaders throughout the pacific about all of this.

Again, it's a diplomatic initiative and it is something that is very concerning to the U.S. And it will certainly shed light, I think, on the Obama administration's policy of engagement. There'll be a lot of talk about that, Kiran.

CHETRY: All right. Barbara Starr following the developments from the Pentagon. We'll check in with you throughout the morning. Thanks, Barbara.

HOLMES: I want to turn to Jill Dougherty now covering this as well from Washington, and wanting to hear what the Obama administration has to say.

Jill, we just heard Barbara Starr report that it might be a few days before the U.S. can at least confirm what exactly happened over there. So how much is the administration saying right now?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, they issued a statement. And if you look at it carefully, they say today North Korea said that it had conducted a nuclear test. They're not saying that they did but that said, the administration is very concerned and you can hear their frustration.

Let's listen to this. They say, "These actions, while not a surprise given its statements and actions to date, are a matter of grave concern to all nations."

And then they go on. "By acting in blatant defiance of the United Nations Security Council, North Korea is directly and recklessly challenging the international community."

And you know, up until this point, the United States has been pretty moderate in the way it's reacted. It has not tried to ratchet up the emotion on all of these, but you can really hear that frustration coming out.

What can they do? That's the question. Of course, they can go to the United Nations. Of course, they could try to talk with the allies and exert some type of pressure, but that is already being done.

And just a few weeks ago, we heard from Hillary Clinton. She seems very skeptical. Of course, the secretary of state very skeptical that North Korea would come back to the talks.

There's another factor in this and I think it's important is that there's an internal political situation right now in North Korea. The succession -- Kim Jong-Il, the leader of North Korea suffered a stroke last year and there is a very serious succession crisis ongoing. So there may be internal factors that are affecting this and what the outside world is doing or saying may not have as much of an effect.

HOLMES: All right. Jill Dougherty, like you said, more blatant defiance. Not a lot of options it seems right now for the U.S. We will see.

Jill Dougherty, thank you so much.

CHETRY: It certainly has Japan quite worried as a neighboring nation. They're calling for an emergency United Nations Security Council meeting this morning after North Korea carried out a new nuclear test as we said.

A top government spokesman calling North Korea's actions "unacceptable" and a clear violation of U.N. resolutions. We're going to tap into the global resources of CNN and head live to Tokyo. That's where our Morgan Neil is this morning.

What is the reaction from your end?

All right. We're having a little bit of trouble hearing Morgan Neill. We're going to get this audio issues worked out and again go back to him.

Meanwhile, a little bit more now on what we've been following for you so far this morning. This latest test that took place last night is not North Korea's first act of defiance. Here's more on an "AM Extra" now.

The country actually conducted its first nuclear test back in 2006. A year later it bowed to global pressure agreeing to close its main nuclear reactor in exchange for international aid. Last year, the North also destroyed a cooling tower. That played a big role in its nuclear program and was considered a symbolic move toward trying to come to some diplomatic agreement with the rest of the world.

But then just last month, however, the country revived international concern going ahead with a rocket launch. The North said it was simply trying to put a satellite into space. Critics though say it was actually testing long-range missile capabilities. So again, we'll be following North Korea's story with our experts and correspondents all morning long. And if there's something that you'd like to ask, then let us know. Head to our Web site, CNN.com/amFIX. You can just send us an e-mail there, or you can go to twitter.com/amFIX as well.

HOLMES: Well, new this morning, a major shift in policy at the State Department. Secretary of State Hillary Clinton expected to announce plans to give equal benefits to same-sex partners of U.S. diplomats. The benefits will include diplomatic passports, pay travel and moving expenses for overseas posts. Also, medical evacuation from posts abroad.

Also this morning, we're learning of an air space violation near Camp David. Three small planes entered the restricted air space yesterday where the president and his family were spending the holiday weekend. The incident occurred at 9:30 a.m., 1:00 in the afternoon, and then at 3:00 in the afternoon. Each of the planes intercepted by F-15 fighter jets. The violations are being called minor.

And, of course, the story -- a big story, breaking story we're following this morning. North Korea testing the world's patience and pushing the limits claiming it's tested a second nuclear bomb.

And as we speak, Washington assessing its diplomatic options. In a moment, we'll be speaking with Jim Walsh, an international security analyst who spent more than a decade dealing with the communist regime.

It's eight minutes past the hour.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

HOLMES: We will continue to follow our breaking story this morning.

Japan now calling for an emergency U.N. Security Council meeting after North Korea carried out a new nuclear test. The top government spokesman calling North Korea's actions unacceptable and a clear violation of U.N. resolutions.

Let head back to our Morgan Neill live for us in Tokyo.

Morgan, we hear some of what Japan is saying. What is the reaction there like?

MORGAN NEILL, CNN HAVANA BUREAU CHIEF AND CORRESPONDENT: Well, Japan's government to this point has said that test is unacceptable, that it won't be tolerated and that it will take decisive steps in reaction. But it's not entirely clear just what steps Japan could take that could be decisive.

This after all isn't the first time this has happened. We saw a nuclear, an underground nuclear test in 2006 as well when current Japanese Prime Minister Taro Aso was foreign minister. So he's seen this process from up close in 2000.

How did Japan react? They imposed economic sanctions, sanctions that they have extended every six months since then. Obviously, that hasn't stopped this sort of brinksmanship behavior from North Korea and the strategy that Japan seems to be pursuing this time is to rely on its close allies in the Six-party talks, South Korea and the United States to help bring pressure to bear through the U.N. Security Council. So it's the diplomatic path at this point and Japan really doesn't have too many options it hasn't already tried.

HOLMES: And, Morgan, you talk there about the government used to dealing with this, unfortunately, seen as over the years from North Korea, but the people of Japan as well. Are they a bit anxious this time? Are they pretty much -- are they getting more and more fed up, even if you will?

NEILL: Well, we talked to people out here in the streets today in Tokyo about what their reaction is to this. They've seen this kind of brinksmanship so much, most recently in early April when North Korea launched a missile that flew over Japanese territory before landing in the sea. The country was put on high alert. People heard about it through the Japanese media 24/7, got very anxious about it. And here we go again.

So what we heard from people generally today was a mix of frustration, frustration because they don't feel that there's much in their power they can do about this. And that it's the sort of same old push it to the brink, looking for concessions behavior that they've seen before and yet anxiety because the threat is real. The proximity is very close and we're talking about very destructive weapons here. So that's kind of the reaction we've seen to this point.

HOLMES: All right. Like you said, here we go again. Morgan Neill for us in Tokyo. Thank you so much. CHETRY: All right. So a lot of questions this morning about what this signals for diplomatic relations with Cuba and how concerned the world should be militarily.

Joining us now outside of Boston in Newton, Massachusetts is Jim Walsh, an international security analyst at the Massachusetts Institute of Technology.

Jim, thanks for being with us this morning. We know you've been to North Korea. You've spent more than 20 hours with the North Korean head of the delegation to the Six-party talks. Put this in perspective for us this morning. What does this claim from North Korea about both the nuclear test and the short-range missiles mean?

JIM WALSH, INTERNATIONAL SECURITY ANALYST: Well, if you're just waking up on Memorial Day and you look at the headline, you say, my gosh, North Korea has had a nuclear test, does this mean war? Does this mean military conflict? The answer is no.

As was just said in the last report, we've had a previous North Korea nuclear test. It did not result in military conflict, and I don't think that's what's going to happen this time either.

What we're really talking about are not military consequences but political consequences both inside North Korea which is undergoing some sort of transition and regionally with Japan, with China, with South Korea. So it is an unwelcome event, I have to underline that, but there's no reason for panic or fear.

CHETRY: Explain what, you know, if we're trying to understand what's going on with that nation, what does North Korea want? What does North Korea want to prove with these tests?

WALSH: Well, if I could answer the question, what precisely does North Korea want, I would be a wealthy man and I'd be on an island somewhere not in this studio right now. Because at the end of the day, we don't know that much about North Korea.

Anyone who says they're 100 percent sure, you know, I wouldn't trust what they say. But we can have some guesses.

One theory, a popular theory for some time has been North Korea does this sort of thing in order to improve its bargaining position. By taking a provocative action, suddenly people sort of scamper and want to do something to ratchet back the tension. And it also has the effect of dividing the countries in the Six-party talks.

Japan tends to get quite upset about these sorts of things. China, less so. That divides the parties, improves North Korea's leverage. That's the traditional theory.

There are some and I'm starting to move from the traditional theory to this alternative notion, which is this is less driven by external events and bargaining and more by internal concerns. Again, Kim Jong-Il had a stroke. There is no clear line of succession. They are now in the process of trying to establish some sort of order for a new leader in North Korea at some point and when that sort of thing happens, governments often have shows of strength and that's not unusual for North Korea in particular to do that sort of thing when there's domestic change at home.

CHETRY: North Korea has ignored U.S. warnings against conducting a nuclear test in the past. The White House releasing this statement this morning about it.

"By acting in blatant defiance of the United Nations Security Council, North Korea is directly and recklessly challenging the international community. Such provocations will only serve to deepen North Korea's isolation. It will not find international acceptance unless it abandons its pursuit of weapons of mass destruction and their means of delivery."

So that is a pretty strongly worded statement from our White House this morning, but ultimately how much power does America have in reining in North Korea's nuclear ambitions?

WALSH: Right now, I would say the answer is all the countries involved have limited leverage. Again, if it is the fact, again, we don't know. If it's a fact that what is driving this right now are issues internal to North Korea, then it really doesn't matter what the outside world is doing. And it certainly doesn't matter if we're going to slap on some more sanctions, you know.

This is a poor country that's already is sanctioned as any country in the world. It's sort of tweaking the sanctions. Is it going to matter, you know, at all?

I think what the U.S. is going do in the short term, is you're going to see it's going to reach out to Japan, its ally, its treaty ally, and try to reassure the Japanese public that we've got your back, that we're on your side. That's probably the most important thing the president and the secretary of Defense will be doing over the next week.

CHETRY: All right. Certainly another challenge has fallen in the lap of this administration today. Jim Walsh, international security analyst at MIT, thanks for joining us this morning.

WALSH: Thank you.

HOLMES: Two weeks after his allegiance to the Republican Party was called into question, Colin Powell is firing back. We'll tell you what the former secretary of state had to say specifically to Dick Cheney and Rush Limbaugh.

Plus, we are remembering America's fallen troops this Memorial Day. Our iReporters sharing stories about their friends and family members who fought and died for this country.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (via telephone): Matthew is my son. His job is to look for IEDs. And he found 22 including the last one, you know, that ended up taking his life.

I am amazed. I'm proud when I think of all the people that are alive today because of this one amazing young man. He will always be my hero.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: According to a new poll, Dick Cheney's approval rating is up eight points since leaving office. I can't believe Cheney's approval rating is eight percent. That's amazing.

(END VIDEO CLIP)

HOLMES: Yes. Welcome back to the Most News in the Morning. The former secretary of state, Colin Powell, has a message for Dick Cheney as well. Also for Rush Limbaugh. He's still a Republican.

Powell appeared on CBS's "Face the Nation" yesterday, and he had a lot to say two weeks after his allegiance to the party was called into question.

Jim Acosta is following Powell's Republican rebuttal live in Washington.

Well, Jim, he says hey, I'm still a Republican.

JIM ACOSTA, CNN CORRESPONDENT: That's right, T.J. And this is one aspect of the Bush administration that has not ended yet.

Dick Cheney and Colin Powell are still going at to this day. And on this Memorial Day weekend, the man who is arguably America's most popular living general fired back, breaking his silence to take on former Vice President Dick Cheney on closing down Guantanamo and opening up the Republican Party.

(BEGIN VIDEOTAPE)

GEN. COLIN POWELL (RET.) U.S. ARMY, FORMER SECRETARY OF STATE: I'm what people call, oh, heavens, a moderate Republican.

ACOSTA (voice-over): Colin Powell insists he's still a Republican no matter what Dick Cheney says.

DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES: My take on it was Colin had already left the party. I didn't know he was still a Republican.

POWELL: Neither he nor Rush Limbaugh are members of the membership committee of the Republican Party. I get to make my decision on that.

ACOSTA: The former secretary of state sounded moderate to the core, noting he had voted for Reagan and both Bushes, as well as Kennedy, Johnson, Carter and Obama. Powell says it's the GOP that should do some soul searching not him.

POWELL: The Republican Party is losing. North, south, east, west, men, women, whites, blacks, Hispanics, and I think the Republican Party has to take a hard look at itself and decide what kind of party are we.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The Guantanamo will be closed.

ACOSTA: Powell revealed he has consulted with President Obama on Guantanamo.

POWELL: So I felt Guantanamo should be closed for the past six years.

ACOSTA: But he also criticized the president's move to shut down the detention camp without telling Congress how he'd do it?

POWELL: I think President Obama didn't handle it very well by going up to the Congress and asking for $80 million without a plan.

ACOSTA: On the Bush administration's use of harsh interrogation methods, Powell insisted their primary purpose was to prevent terrorist attacks.

POWELL: If we had another attack like 9/11, say on 9/11 a year later, nobody would have forgiven us.

ACOSTA: One of Powell's closest confidants says the retired general is still reluctant to speak out on his years in the Bush administration and is still haunted by his flawed presentation to the United Nations on the war in Iraq.

LAWRENCE WILKERSON, FORMER CHIEF OF STAFF FOR POWELL: It's difficult to say, on a personal basis that you were a part of such an episode.

ACOSTA: But Powell is gaining allies in the GOP's war of words. Former Homeland Security Secretary Tom Ridge rejected a key Cheney talking point.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Do you believe we are less safe today because of steps taken by President Obama?

TOM RIDGE, FORMER HOMELAND SECURITY SECRETARY: I do not.

KING: You disagree with Dick Cheney then?

RIDGE: I disagree with Dick Cheney.

(END VIDEOTAPE)

ACOSTA: Colin Powell's model for the Republican Party? The late former Congressman and vice president candidate Jack Kemp, a principal conservative Powell noted who also reached out to minority voters.

And, T.J., it's interesting to note that yesterday Karl Rove was asked who he would choose between Colin Powell and Rush Limbaugh. And Karl Rove chose Rush Limbaugh, T.J.

HOLMES: I guess a lot of people might not be surprised to hear that. Jim Acosta for us. Thanks so much.

ACOSTA: You bet.

CHETRY: We're still following our breaking news this morning about North Korea claiming it test fired a nuclear bomb. Questions and condemnation swirling this morning after North Korea says it carried out a powerful underground nuclear test, also claiming to have fired off three short-range missiles

We're going to be live in London for insight. The prime minister weighing in this morning there.

Also ahead, an embarrassing security breach at Buckingham Palace. How two men found their way into the back seat of the queen's Bentley.

It's 25 minutes past the hour.

(COMMERCIAL BREAK)

HOLMES: Welcome back to the Most News in the Morning. Right now, Buckingham Palace officials are taking a very hard look at their security procedures. They're dealing with an embarrassing breach. Two people, easily penetrating the palace walls and getting a little too close to the queen.

Tim Lister with the story.

(BEGIN VIDEOTAPE)

TIM LISTER, CNN CORRESPONDENT (voice-over): Another embarrassing security lapse at Buckingham Palace. A chauffeur allows two men into the palace garages after allegedly being promise 1,000 pounds, about $1,500. They got in despite palace security measures and posed as businessmen. But they were actually reporters for the "News of the World" and shot these videos of their tour of Her Majesty's limousines.

One was even invited to sit inside the queen's burgundy-colored Bentley.

UNIDENTIFIED MALE: This is where Her Majesty sits.

UNIDENTIFIED MALE: That's where she sits.

LISTER: The same car regularly used by the queen on official engagements. The paper alleges it set up the tour through the chauffeur's girlfriend and that its reporters went unchallenged throughout their tour. UNIDENTIFIED MALE: What it actually exposes is a serious lapse of security at Buckingham Palace. We've had so many breaches of security over the years, but this one is really appalling. Our investigator is sitting where the queen sits in the royal limo. Our investigator could easily have been an Al Qaeda terrorist with a bomb to be planted inside the queen's car.

LISTER: Buckingham Palace says, "An individual has been suspended pending an investigation." Scotland Yard expressed its concern about the issues raised by the "News of the World" story and said it was liaising with the palace on security arrangements.

This lapse is not the first and certainly not as dramatic as the one in 1982, when the queen woke up to find a homeless delusional man sitting at the end of her bed asking for a cigarette. It scaled a wall and a drain pipe evading alarms and guards.

More recently, the footman circled here was an undercover reporter who used fake references to get a job at the palace and who allegedly had access to rooms due to be occupied by President George W. Bush during a state visit. But this lapse comes after security was supposedly tightened.

DICKIE ARBITER, FORMER PALACE SPOKESMAN: You've got to look at the people that are manning the gates and asking why did they let this person in? Why did they let the people in on the say-so of the chauffeur?

LISTER: That's a question both the police and the royal household will want answered.

Tim Lister, CNN, Atlanta.

(END VIDEOTAPE)

ANNOUNCER: This is CNN breaking news.

CHETRY: Thirty minutes past the hour now. We're following breaking news for you.

The Obama administration accusing North Korea of threatening global security by conducting a powerful underground nuclear test late last night. South Korea's news agency is also reporting the North test fired three short-range missiles.

In just a few hours here in New York, the United Nations Security Council is set to take up the issue at an emergency meeting.

And a second New Yorker has now died after contracting swine flu. City officials described the victim as a woman in her 50s who had underlying health issues. An assistant principal at a Queens's public school also died last week. The Center for Disease Control and Prevention confirming nine other swine flu deaths in six states.

And this morning, authorities have zeroed in on southern California and Mexico in the search for a mother on the run with her 13-year-old son who has cancer. The two skipped a court hearing Tuesday in Minnesota, where a judge was ordering Daniel Hauser to undergo chemotherapy treatments against the family's wishes. Doctors say further delay could cause Daniel his life.

And returning now to our top story. North Korea's powerful underground nuclear test estimated to be 20 times more powerful than the first one it conducted back in 2006. Right now, there are calls around the world for a tough response.

CNN's Zain Verjee is live in London.

You're getting reaction as well from the prime minister there, Zain.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: The reaction around the world, Kiran, has been surprise to some extent at how quickly North Korea has managed to pull this off, but complete and utter condemnation.

Prime Minister Gordon Brown had this to say. "I condemn North Korea's nuclear test in the strongest terms. This act will undermine prospects for peace on the Korean peninsula, and will do something for North Korea's security. The International Community will treat North Korea as a partner if it behaves responsibly. If it does not, then it can only expect renewed isolation - Kiran.

CHETRY: I mean, the problem is -- when there were some other violations on the part of the north, the Security Council couldn't even get a consensus. I mean, there are some nations who are not prepared to take any type of action against North Korea. So what do you do then?

VERJEE: Well, the issue and the question a lot of people are raising is why now? Why is this happening? And then, there may not be a lot that people can actually do to get a behavior change from North Korea. Many are saying -- number one, you need to look at the internal situation as far as we know it in North Korea.

There appears to be some sort of jockeying for power, a succession struggle. And that could be one of the reasons we're seeing North Korea do a second nuclear test.

Also, Kiran, this is classic North Korea -- brinksmanship, saber rattling, up the ante a little bit. The goal usually is to get attention and to get concessions - Kiran.

CHETRY: And so, what are the options for the Obama administration at this point?

VERJEE: Well, it's a tough one. I mean, gosh, this really does make it a lot harder for the Obama administration to reach out. There have been a lot of tensions after the missile test in April with the United Nations condemning North Korea. The U.S. pushing for more sanctions. You've got two American journalists that are being held for, quote, "illegal activity in North Korea," and they're going to be put on trial. I believe it's the 4th of June. What many experts are saying that the Obama administration can only really use diplomacy, because if you try and punish North Korea, that doesn't really get anywhere and it really doesn't change its behavior. So the trick is keep the channels of communication open with North Korea without making the U.S. look weak or that it's giving in.

One expert told me, one thing to do immediately is to dispatch a high level of official from the U.S. to the region, reassure the allies and convene a regional summit to figure out what to do.

CHETRY: All right. Zain Verjee as you said, classic North Korea. You've covered the State Department for years, and we've talked about very similar situations in the past. But we'll see what happens with this latest threat by North Korea.

Zain Verjee for us in London this morning. Thanks so much.

T.J. HOLMES, CNN ANCHOR: Well, President Obama set to make his Supreme Court pick to replace Justice David Souter. And this morning, new details about when to expect the announcement and who it might be.

Also, you remember the singing sensation? Susan Boyle takes the stage. She's singing again. How did she do? We have the tape of her performance. We'll play it for you right here.

It's 34 minutes past the hour.

(COMMERCIAL BREAK)

HOLMES: All right. This morning, word out of Washington -- President Obama is close to naming his first Supreme Court pick. The announcement could come as soon as tomorrow.

In an interview with "C-Span," the president said he's looking for someone to look after the interests of the American people.

(BEGIN VIDEO CLIP)

OBAMA: I want somebody who has the intellectual firepower, but also a little bit of a common touch and has a practical sense of how the world works.

(END VIDEO CLIP)

HOLMES: So, who is on that short list to replace outgoing Justice David Souter?

Well, Joan Biskupic is the Supreme Court correspondent for "USA Today." Also working on a forthcoming biography on Justice Antonin Scalia, it's called "American Original: The Life and Constitution of Supreme Court Justice Antonin Scalia." It's going to be out this fall. She joins us now from Washington.

Good morning to you.

I want you to explain something with people out here. We hear names. Who comes up with these unofficial lists?

JOAN BISKUPIC, SUPREME COURT CORRESPONDENT, "USA TODAY": Well, it's a process that mostly driven by the White House, of course. But the women whose names are on this list that you have heard so much about, T.J., are people who happen to be highly credentialed, who are connected to the White House. So it's speculative, but it's also informed speculation, so to speak.

HOLMES: Is it also fair to say that men need not apply for this job?

BISKUPIC: The White House has flipped out a couple of words of men it might be looking at. But I think at this point when you have a nine-member court with only one woman on it, I think this is one of those picks that's going to go to a woman.

HOLMES: All right. Let's talk about these women now. Let's talk -- a couple of Appeals Court judges here to talk about. Let's start with Sonia Sotomayor, of course.

It sounds like her chances are pretty good.

BISKUPIC: Yes, on paper, T.J., she'd be exactly what you think the president would be looking for. [The original transcription for the previous line included a transcription error that was brought to our attention but has since been corrected.] She was put on a trial court by the first President Bush. Then she was elevated by President Clinton. She grew up in the Bronx. She's a Puerto Rican descent. She went to Princeton and Yale law school then. So she's got quite the resume and quite the diverse background that I think this president could be looking for.

But as you know, these things don't take place only on paper. So there has to be some chemistry with the president and some other connections, too.

HOLMES: Is it fair to say she's the favorite?

BISKUPIC: I think she's one of the favorite. I wouldn't say that she was the exact frontrunner right now, but I think that she could end up breaking from the others. But I think right now another federal Appeals Court judge might be a little bit more out in front.

HOLMES: OK. And who was that? I assume you're talking about Diane Wood.

(CROSSTALK)

BISKUPIC: I think it's going -- yes, exactly, (INAUDIBLE) Diane Wood, who's on the Seventh Circuit. She was put there in 1995 by President Bill Clinton. Had work in the Clinton Justice Department. Taught for a while with President Obama at the University of Chicago, was a law clerk to Harry Blackman at the Supreme Court in 1976-1977.

HOLMES: Do you think something like that Chicago connection could put her over the top? BISKUPIC: I think it is perfect Chicago connection, part her background, part her judicial temperament that could help her. I think that in the past, as you know, Democratic presidents will often say they want someone who might be outside the cloistered world of the court, of the judiciary.

But President Clinton said that and ended up with two highly credentialed federal Appeals Court judges in Justice Ruth Bader Ginsberg and Justice Stephen Breyer. And I think we might end up with that again this time around, too.

HOLMES: Well, I've got less than a minute here. And I want to get two more two things in. One, Elena Kagan.

We'll go through her real quick.

BISKUPIC: Yes. In March, she became the nation's first female solicitor general. She was Harvard law dean. Again, a highly credentialed person, but not with any judicial experience. She's very connected to -- she worked at the same law firm that White House counsel Greg Craig did. She's a little bit younger than the others, but she's right there in the running.

HOLMES: And last thing here, I want to let you get in, a name that he could announce in your opinion that might surprise a lot of people, but maybe not a surprise to you.

Who would you say is the dark horse?

BISKUPIC: Well, if he goes with either -- the governors who might be on the list, former Arizona governor Janet Napolitano could be a dark horse. She doesn't have the judicial experience, but she certainly has the kind of experience that Earl Warren had when President Eisenhower put him on the court in 1953, and he contributed significantly to Brown versus Board of Education and many other rulings of the '60s.

HOLMES: All right. And I will let you go without us talking about any men this morning.

Joan Biskupic -- again, "USA Today," Supreme Court correspondent.

Ma'am, thank you so much this morning. You have a good one.

BISKUPIC: You, too. Thanks.

HOLMES: All right.

CHETRY: Well, a Memorial Day holiday is here today. It could be a rainout in some spots. We're going to check in with Reynolds Wolf to see where the cookouts and the drives home may be a little bit soggy.

We also have some breaking news out of Pakistan. The military is saying they have the Taliban on the run, but more than two million people have been driven from their homes due to the fighting. We're live in Islamabad with the latest on the battle and the refugee crisis.

It's 42 minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning.

A shot of the Vietnam Veterans Memorial Wall in Washington, D.C. That wall dedicated to honoring those who died in the Vietnam War. And those who never came home and are still missing in action. This is Memorial Day. A day meant to honor those who made the ultimate sacrifice for the nation.

It's also time now to fast forward through some of the stories that will be making news on this Memorial Day. At 9:05 Eastern Time, President Obama will be hosting a breakfast at the White House for families who have lost loved ones in military service. He'll then participate in a wreath laying ceremony at the Tomb of the Unknown Soldier at Arlington National Cemetery. Also at 3:00 p.m., the White House is asking everyone to pause for a moment and honor the nation's fallen heroes.

In just about 15 minutes, Iranian President Mahmoud Ahmadinejad is expected to deliver a speech. We're not exactly sure of the topic, but we will be monitoring it for you. Ahmadinejad just kicked off his re-election campaign and met this weekend with the presidents of Pakistan and Afghanistan saying he wants to develop a strategy to battle terrorism and drugs in the region.

Well, it's a story that we'll be watching throughout the day. Right now, firefighters are working to stomp out a wildfire that's damaged three homes in southern California. The flames broke out yesterday in San Diego County. Right now, officials say that fire is about 50 percent contained. And, of course, as we know, T.J., this time of year, tough in southern California especially during fire season.

HOLMES: Those dry conditions out there. Then those winds get whipped up and you can't stop those things sometimes. A lot of people have their eyes on the weather, out west, of course, because of those fires. But all over, everybody is getting together -- family and friends, and all that good stuff today.

Reynolds Wolf, my man, down in Atlanta in the weather center.

(WEATHER REPORT)

CHETRY: Singing sensation Susan Boyle took the world by storm and Simon Cowell by surprise. And then last night - you remember Susan Boyle, right? Well, she returned to the popular show "Britain's Got Talent." She wowed the audience again. She also wowed the judges with her rendition of "Memory" from T.J.'s favorite musical, "Cats."

HOLMES: How did you know?

CHETRY: Check it out. (VIDEO CLIP, "BRITAIN'S GOT TALENT")

CHETRY: She's still got it, huh? Well, she was voted the best of the eight performers, which means she'll do it again, Saturday, for the grand finale.

T.J., is this bringing back memories of your time?

HOLMES: Look, OK.

CHETRY: Your time on stage.

HOLMES: My time no stage -- no. She -- obviously, she has gotten a bit of a makeover.

CHETRY: Slight.

HOLMES: Slight?

CHETRY: Slightly. They colored her air, I think.

HOLMES: OK. She looks good down the dress and the whole thing. But yes, she had a makeover. And that was so much of the draw. Everybody looked at her and said no way she's a good singer. They judged her when they saw her.

CHETRY: Right.

HOLMES: So, now we've gotten used to her now.

CHETRY: She's still -- you know what she said, she said that she's never going to change. We interviewed her on the show. And she's -- she's the same person, but, you know, maybe she got polished up a tiny bit.

HOLMES: Polished up. All right.

CHETRY: You know, we all do, right? You can see her hair and makeup.

HOLMES: Speak for yourself, Kiran. Just kidding.

We're going to continue to follow a lot of stories this morning. Of course, the breaking one we have out of North Korea. Announcing it to stage another nuclear test, but where is the communist country getting the money to fund all of this?

Christine Romans looking at that angle for us.

It's 10 to the top of the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning.

North Korea conducting another powerful nuclear test. President Obama now calling it a threat to international peace and security. The global community also sounding off. There's an emergency meeting of the United Nations Security Council that's set for later this morning.

The test is also raising a new question, and that's where is this communist nation, suffering with the extreme poverty, where there's food shortages, getting the money to conduct these expensive tests?

Christine Romans joins us now with a closer look at North Korea's incredibly isolated economy and also where they choose to put their money.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Right. This is a government that has pulled itself basically out of the international community, incredibly isolated. The country the size of Mississippi, 23.5 million people there. The per capita GDP $1800. So a lot of people there living on very, very small amount of money.

It does have an official export of minerals and some other things. It has trading partners with China, South Korea, Thailand, Russia and India, but overall, the size of this economy is about $26 billion, compared that with South Korea which has $1.2 trillion. You can see a big difference there.

Also according to the State Department, this country is also thought to earn hundreds of millions of dollars in unreported sales of missiles, narcotics, counterfeit cigarettes and other illicit activities. Among those illicit activities, many foreign policy watchers have long been concern about is counterfeited U.S. currency. $100 bills in circulation, anywhere estimates from $20 million to $65 million of these counterfeit currencies. Our money afloat in the global economy.

Now, North Korea has one of the largest armies in the world. 20 percent of men age 17 to 54 are in the armed services. It's got a Coastal Navy according to the State Department that's antiquated. But, seriously, when this country is testing nuclear -- doing nuclear test, it's something that a very small country with a very small economy can concern so many different people.

I want to real quickly tell you about the leader of this country. A diminutive person Kim Jong-Il. We've been talking about him a lot. Gerald Post who wrote the book "Leaders and their Followers in a Dangerous World" says Kim Jong-Il fancies Hennessey cognac -- you guys, with an annual budget of $800,000.

After 2006, the U.N. tried to kind of put a lid on some of the luxury goods that were coming in to this country. But the leadership of North Korea imports a lot of -- tries to import a lot of luxury goods even as so many of the people there are so desperately poor. Think of that, $800,000 a year in cognac for the leader of this country.

CHETRY: He also likes Western movies.

ROMANS: That's right. Huge selection of DVDs. Some biographers saying maybe 20,000 DVDs. So even as he is rankling the West and rankling the rest of the world, he is seen as an avid consumer of pop culture and luxury items made by the rest of the world.

HOLMES: I'm still blown away by that cognac budget.

ROMANS: Yes. Very interesting stuff.

CHETRY: Thanks, Christine.

HOLMES: All right. Christine Romans, thank you so much this morning.

Another breaking story we are following as well.

Pakistan's army says Taliban militants are, quote, "staring defeat in the face." The army says they've retaken several crossings in one key city. We are live in Pakistan.

It's four minutes to the top of the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning.

We're tracking breaking news out of Pakistan this morning. Military leaders say they've retaken several strategic crossings from Taliban militants. It's all part of a bloody street-to-street battle in the Swat Valley region's biggest city. The Army says the militants are, quote, "staring defeat in the face."

Nearly 2.4 million people have been forced from their homes as well due to the fighting. That's according to the United Nations.

Right now, we tap into the global resources of CNN, and bring in Dan Rivers. He's live in Islamabad for us.

Is the fighting underway this morning as well, Dan?

DAN RIVERS, CNN BANGKOK CORRESPONDENT: It is, I'm afraid. This battle for the strategically important town of Mingora is continuing. We understand, the Pakistan army has taken several key points in that city, but it is not fully secure yet. And there is stiff resistance by the sounds of things from the Taliban fighters there.

The army is telling us, that about 10 percent to 15 percent of the Taliban, they estimate are foreign fighters. Committed hard-core Jihadists basically who have been trying to establish Sharia law in this area of northern Pakistan.

The other key development is the number of refugees that are slowing out of this area. It's increased massively over the weekend. It's now at 2.38 million people estimated. That number going up all the time, day by day. This is the biggest movement of people in the history of Pakistan since its creation in 1947. And it's putting a huge strain on the government here. They're doing their best to cope with the massive exodus of people from this area. CHETRY: What a terrible humanitarian crisis as well as the threat right now from those militants.

Dan Rivers for us, following all the latest from Islamabad this morning.

Thanks so much.