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Fury in Cairo; Apple "Flash Crash"; Sparks Fly at CPAC; White House Pushes for Egypt's "Genuine Transition

Aired February 11, 2011 - 07:00   ET

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


(BEGIN VIDEO CLIP)

T.J. HOLMES, CNN ANCHOR (voice-over): Good morning. You are seeing what's happening right now in Cairo. A day that was supposed to be about celebration is another day of frustration for protesters. Now, how will they, how will the world, how will the U.S. react to what Mubarak did yesterday? It's all on this AMERICAN MORNING.

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HOLMES: February 11th, 11th day of February here, Friday, 7:00 a.m. here on the East Coast. 2:00 p.m. in Cairo right now. Glad you could be here with us. I'm T.J. Holmes.

KIRAN CHETRY, CNN ANCHOR: And I'm Kiran Chetry.

We want to take right now you to the live pictures of a critical day in Cairo. This is Tahrir Square packed with people as far as the eye can see. Our Frederik Pleitgen who is there said this was the largest demonstration he has seen yet. And protesters are very angry because there was a lot of hope yesterday that President Mubarak would finally cede power. They learned that, in fact, he is refusing to step down. Marching outside of the presidential palace overnight chanting down Mubarak.

HOLMES: Meanwhile, a major development this morning. The army, the military, which is so critical in this whole situation, has now come out with a statement that many are interpreting as supporting Mubarak's decision to stay in power until elections in September. They released a statement within the last hour calling for an end to the country's emergency rule, but only when the current crisis passes.

That emergency rule is critical there. It's been in place for some 30 years and gives the government pretty strong powers to hold people indefinitely and arrest people without warrant. And also the army wants to ensure that justice and court cases on disputed parliamentary elections, they also want to ensure free presidential elections.

Also, just hours ago protestors converged on the offices of Egypt's state run television. This is what we saw overnight. This has just been one more flash point in this whole story.

CHETRY: Let's bring in CNN's Frederik Pleitgen live in Cairo. Is it safe to say protesters don't buy that anything is changing regardless of whether or not Mubarak has ceded much of the power to Vice President Suleiman?

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: That's absolutely safe to say. That's what people were telling me last night after Mubarak's speech. You can see how many people are already in Tahrir square. It's jam packed.

They told me that they believe that Hosni Mubarak and Omar Suleiman are just so much on the same page that nothing will really change. And you can see from the crowd here there's already a lot of people in there. If we pan back to the checkpoint, which is a place where people actually get into Tahrir Square, you can see that there's masses going into Tahrir Square as well. That's getting fuller and fuller and it's quite early in the day.

If you pan now to the bottom of the building we're in, you can see people going in different direction as well. Those are protesters who are going to a second venue, which is the information ministry which also has thousands of people going to it.

Right now from what I can see the demonstration is getting so big that it's actually threatening to shut down traffic here on one of the main thoroughfares through central Cairo here. And so clearly people did not buy the message that Hosni Mubarak gave them yesterday and they are still very, very angry, and they are coming out in greater numbers than ever before, Kiran.

CHETRY: Frederik Pleitgen there as we continue to look at those pictures. And you can hear the crowds from these pictures right now live in Tahrir Square. Frederik, thanks so much.

HOLMES: We are also hearing this morning from an opposition leader Mohamed ElBaradei. He's been one of the most prominent opposition leaders. He's talking about what's on the ground there. He's been sending out a lot of tweets. In one of the latest he says "The entire nation is on the streets. The only way out is for the regime to go. The people's power can't be crushed. We shall prevail. We still hope army can join."

CHETRY: And now to put all this information into context, we're joined by two experts, James Rubin, a former assistant secretary of state, and now the executive editor of Bloomberg view. Also Mona Eltahawy, a columnist on Arab and Muslim issues born in Egypt and lived there on and off. She's been supporting the protests and has been in constant contact with protesters throughout this entire 18-day uprising.

Jim, I want to start with you. As we just heard via the tweet, he wants them to cede power. Is that unrealistic at this point?

JAMES RUBIN, FORMER U.S. ASSISTANT SECRETARY OF STATE: That's the funny part. Mubarak has ceded pretty much all the powers he could cede if you want to see these democratic reforms go forward. But Mubarak is insisting on his dignity and his status, and he's now in many ways a figurehead president.

Had he done this a week ago it would have been enough. I think Mubarak's problem, in fact everybody's except the people on the ground, is they are taking these steps a week late or ten days late. And so I fear that the protesters may get to a point where they don't know when to take yes for an answer.

If they get these democratic reforms and I acknowledge that this is an if, that allow for free and fair elections, if they get emergency rule lifted once the protests stop, if they achieved all that with Mubarak having only a figurehead's power, if you would ask them before they started that they could get these things would be they be happy, they would have been thrilled.

But now anger, the resentment, the seesawing of power and decisions and confusion and the grand communications problem yesterday has created a situation where I think Mubarak and the military now may have dug into their final position.

And meanwhile the people on the ground that represent such a big chunk of Egyptian society and population may be so frustrated and so angry that they won't accept that. And that's why people are worried.

HOLMES: Is the U.S. worried now that the U.S. may have lost any bit of influence it did have in the first place, how little it may have been? How can they influence events now if Mubarak and his speech -- he said that foreigners will not dictate what happens here. It seems like the U.S. has lost whatever power it did have.

RUBIN: Well, there is a tradition, a culture of fear of outsiders that goes back centuries that Mubarak was reflecting. And clearly the administration -- let's face it, this has been a tough one. But they have struggled to balance their desire for a stable, friendly ally in Mubarak versus support for democratic values the United States has long had. I do think we have influence, real influence.

HOLMES: Still?

RUBIN: We provide an enormous assistance to the Egyptian military directly over $1 billion dollars a year for many, many years. There are people who know each other well in our military and their military. These channels haven't been activated as well as they might have over recent years, but now is the time to really make sure that people who know each other in the military who respect each other, understand each other, and ensure that we don't see the big fear that the military finally breaks its vow and uses force against the protesters and turns them victory into a tragedy.

CHETRY: Let's bring in Mona on this issue, because, as Jamie said, perhaps this would have been acceptable a week ago but is not now. One of the things that an activist just told us is that now people on the street feel 300 plus people have died for this, and now we can't -- there is no going back.

MONA ELTAHAWY, COLUMNIST ON ARAB AND MUSLIM ISSUES: A main demand all along has been that Mubarak step down, and not just Mubarak step down, the entire regime step down so people don't feel that Mubarak has ceded all his power and nothing has been achieved. They are very upset that not only did he not step down yesterday but he said I have give some powers to the vice president so in Tahrir Square people said we wanted to get rid of Mubarak, now we have two Mubaraks. Now we want to get rid of two Mubaraks. So they feel the regime is very much there.

CHETRY: So if Mubarak left the country they would be in the street chanting get rid of Suleiman?

ELTAHAWY: Mubarak doesn't have to leave the country. He has to step down. This is a main demand all along. And I think where the United States comes in now is the moral standing of the United States.

As Jamie mentioned, a third of the armed forces budget in Egypt comes from United States, but just as importantly on the Hill you have lobbyists who get tremendous amounts of money from the Mubarak regime that end up opposing any kind of bill that Congress tries to pass to push for democratic reform in Egypt.

So you have something here in the U.S. that we can actively do and talk to lobbyists say whose interest do you represent? Clearly they represent the Mubarak regime interest because they get so much money from them.

But if the United States wants to have any kind of moral standing in the Arab world where remember we're seeing a generation of young people who are choosing peaceful, nonviolent resistance and who are saying we're not going to be violent. This is a turning point for the region. This is a message to young Arabs across the region that peacefully you can have freedom and dignity. Surely this is a message the administration wants to support.

HOLMES: Mona and Jamie, you all don't go too far. Mona, before you take off, on this live picture, can you help us? You know Cairo. You know it well. We're trying to make out and get a good point of reference of where this is. We've been talking so much about the square and talking so much about that that we have used the museum down there as a point of reference. But can you give us a good idea of exactly what we're looking at here?

ELTAHAWY: This is just Tahrir Square. People have taken it over. The pro-democracy demonstrators call it the liberated zone of Tahrir Square. This is kind of the revolutionary language they use.

And when I was there as a university student at the University of Cairo, this square was the most intimidating trying to cross because it was so full of cars and people. And to see it like this where your screen is full of people is just breathtaking. It's one of the busiest squares in Cairo and it's been totally overtaken by pro- democracy demonstrators.

CHETRY: You see makeshift camps and tents, latrines. It seems to me that this would be very, very difficult to disrupt if the police or the army were trying to in some way disrupt this.

ELTAHAWY: It's like a small nation. You have a field hospital. You have people who are the security who protect people against any outsiders. I have friends thrown in from Denmark, Egyptians, to Tahrir Square to tend to wounded in these tents.

So you have this amazing picture of what these people want Egypt to be. It's like civil society in Tahrir Square and it's telling Mubarak, sending a very positive message, look at what we're doing here. Very peacefully this is the Egypt we want, but you're standing in our way.

HOLMES: Mona and Jamie, you're not going too far. We continue to follow developments there. Thank you both so much.

We'll turn right to Ben Wedeman in Cairo for us as well. Ben, we've been keeping a close eye on what's happening and word has gotten out that people will make sure these protests stay peaceful. That appears to be what we're seeing today.

BEN WEDEMAN, CNN INTERNATIONAL CORRESPONDENT: What you see here, T.J., is that Tahrir is overflowing. It's too packed with people, so thousands of demonstrators have come here. Just up the street behind those army tanks and that barrier on the left are state TV and the ministry of information, which of course is surrounded by tanks, surrounded by soldiers, surrounded by barbed wire.

Of course state TV really is one of the principle symbols of the Mubarak regime. People look at it as the source of so much propaganda over the years and of course what we saw in the evening of January 28th when those huge demonstrations broke out and protesters took over downtown Cairo was that they did target state TV. They were able to get inside briefly before the army repelled them.

But it does appear that the focus may now be shifting outside of Tahrir Square to state television, and also a smaller protest is taking place near the presidential palace which is about seven miles from here. T.J.?

HOLMES: All right. Our Ben Wedeman keeping a close eye on things for us there. We'll continue to keep a close eye here as well.

The Obama administration just like the rest of us it seems thought President Mubarak was going to step down. What happened? What does the White House think -- who does the White House think may be in control in Egypt at this moment? We'll check in in just a few minutes with our Kate Bolduan who is live for us at the White House as well as our State Department correspondent Jill Dougherty.

CHETRY: All right, we'll continue to monitor the ongoing situation on the ground in Cairo and bring you those developments as they happen.

In the meantime still to come on "AMERICAN MORNING," taking a bite out of apple. It's stock went into a brief free fall yesterday. Did rumors about Steve Jobs' health cause the so-called mini flash crash? Christine Romans is joining us.

HOLMES: Also, Donald Trump, he keeps teasing us about a possible presidential run. You won't believe what he told a crowd at one of the largest conservative activist gatherings in the country. Stick around for that. It's 12 minutes past the hour on this "AMERICAN MORNING."

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CHETRY: It's 15 minutes past the hour. Welcome back to "AMERICAN MORNING."

We're continuing to monitor a quickly developing situation in Egypt this morning. Live pictures from Cairo's Tahrir Square. There's a bit of a closer look. We have the wide shot where you can see how it's packed with protesters on the 18th day.

But what you can see there are big tent cities set up as we just heard, medics. I mean, literally a mini city as protesters settle in for the long haul. The largest demonstrations yet are expected across Egypt today.

And why? Well, this follows President Mubarak's refusal to step down. Protesters say they will go on after Mubarak widely thought to have been willing yesterday to cede his control, deciding instead to stay as ostensibly as leader of the country and pass on some of the duties to his vice president, Suleiman. We will continue to monitor the ongoing situation on the ground in Cairo -- T.J.

HOLMES: We're going to turn to Washington now, Kiran, where the Obama administration is still trying to make sense of President Mubarak's decision to cling onto power. Everybody seems to be trying to figure that out.

Our Kate Bolduan live for us at the White House.

Kate, good morning to you.

And our Jill Dougherty live for us at our Washington bureau.

Jill, hello. And let me start with you. Was the State Department and Obama administration depending on media reports like the rest of us that said Mubarak was going to step down? Or did they have it on pretty good authority, maybe behind the scenes that he would?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, T.J., you know, I can tell you they were watching TV and making sure what exactly President Mubarak said, but also behind the scenes and directly with talks with other officials in Egypt they were trying to find out and assess what was going on. And they say that they had serious indications that President Mubarak was going to step down.

You know, you had the head of the party who was talking about that. That's the ruling party. You had statements from military that they were going to intervene to save Egypt and there were other indications.

So, I think you would have to say that they fully thought that he was going to step down. And I think the devil is in details because President Mubarak may think, in effect, he did step down by transferring those some of those powers. But technically, he's still there.

HOLMES: So, let me bring you in, Kate, now. If they were starting to piece this together -- maybe the president himself -- did they have a lot of hope and optimism at some point yesterday? And you were traveling with the president, did you see them almost deflated and get to a point of anger and confusion and frustration there at the White House over what transpired last night?

KATE BOLDUAN, CNN CORRESPONDENT: It was interesting kind of getting a rare window into watching it unfold for the president. I mean, when he came out and spoke to the group, he was not, of course, originally supposed to be mentioning Egypt in his speech on National Wireless Initiative to a group in Marquette, Michigan. He came out and did speak about it.

And you got the sense from his words calling -- saying that we're watching history unfold, that change was imminent. You could -- you got that sense from the president himself and then a markedly shift in tone by the evening when the president, we know, watched President Mubarak's speak aboard Air Force One on return from -- to Washington when they were returning to Washington and went directly into meetings with his national security team.

So, you can see that there was a markedly different tone from the afternoon to the evening and also from days prior that cautious approach I know you and I have talked about, T.J., and I know Jill has talked about from the administration -- different in the statement that we got, an unusually lengthy statement from the president last night. I can read just a part of it and it really kind of lays out what the president is trying --

HOLMES: OK.

BOLDUAN: -- just trying to say to Mubarak, really kind of throwing it back at him. He said in part, "Too many Egyptians remain convinced that the government is serious about a genuine transition to democracy, and it is the responsibility of the government to speak clearly to the Egyptian people and the world. The Egyptian government must put forward a credible, concrete and unequivocal path toward genuine democracy, and they have not yet seized that opportunity."

I think Jill would agree and you too, T.J., that's really putting it back on President Mubarak saying, you need to spell out clearly what you are going to do, not only to the Egyptian people but also explain this to the world.

HOLMES: Yes, Jill, and to that point -- and to that point, I mean, what influence does the U.S. have left now? They've been pushing publicly very carefully but now, Mubarak seems to come out and maybe shot at -- salvo right at the U.S. saying we're not going to be listening to foreign, anybody outside of this country telling us how we should operate.

JILL: Exactly. I mean, President Mubarak is doing what he wants to do. And it's quite obvious that no matter what the United States says, he's going to do what he thinks he should do and he's also going to criticize any interference. So, in other words, he's saying, leave us alone, I'm going to do it.

Also, what could the U.S. do? Well, one thing they could do is stop the aid. You know, we give Egypt about $1.5 billion per year. A lot of it goes to the military. There's some other aid.

But the trigger, we understand, for ending that aid has to be if a military -- if the military were to take over a civilian government, that could trigger it. But that's not what happened in this case. This is apparently, a -- you know, a peaceful transfer to a vice president.

So, even if they did pull aid, the United States, other countries, friends of Egypt, like Saudi Arabia, could come in and say, you know, we'll fill in the blanks. Here's the money.

HOLMES: Yes, peaceful transfer, like you say, now to a guy that many of the protesters now say is no better than Mubarak. So, we'll see moving forward.

Kate and Jill, I appreciate you both. Always good to see you. We'll be talking to you both and checking in throughout the morning and throughout the day. Thanks so much.

CHETRY: And we're not leaving this story for long this morning. We're going to continue to monitor the ongoing situation on the ground in Cairo, bringing you developments as they happen.

And in the meantime, still to come on AMERICAN MORNING, we are talking Apple flash crash that sent stock plummeting yesterday on worries and rumors about Steve Jobs' health. Christine Romans is joining us with that story up next.

It's 21 minutes past the hour.

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HOLMES: Twenty-three minutes past the hour on this AMERICAN MORNING, keeping a close eye on what's happening in Cairo today, a day that things have changed.

We are seeing large protests once again, but from some of our correspondents on the ground saying the protesters -- this is as angry as they have seen them and now, these three weeks of protests after President Mubarak teased the protesters, a lot of people, with classified ads. Many people thought he would step down yesterday, indications and reports were that he would, but made a speech that said he was just transferring some power to his vice president. He still remains the president of that country even if he doesn't retain a lot of power.

CHETRY: Right.

HOLMES: We'll keep a close eye on what's happening there.

CHETRY: And then also the news this morning that the army and the military is in support of Mubarak for that move. So, yes.

Meantime, investigators scratching their heads this morning after suddenly and without warning, Apple stock took a big dive. It's a so-called "flash crash."

Our Christine Romans is "Minding Your Business" this morning with more on that.

And this was -- was this based on rumors about Steve Jobs?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, it's really unclear. Good morning you guys.

I mean, investors are trying to figure out exactly what happened with Apple shares. It kind of cruising around at $360 a share, very close to there, the all-time high and highest of the past year.

And then our friends at "Fortune" magazine pointing out it looks like a mini-flash crash hit the stock just before 2:00 Eastern Time, a flash crash.

Remember last May when stocks just fell of a cliff for what seemed to be no reason overall and still trying to figure out what happened there -- well, Apple had something similar happening yesterday and it shaved about $10 billion off the value of the company. And no one exactly knows why.

A couple reasons that "Fortune" and others are speculating about this morning, maybe it was the short iPhone lines at the Verizon stores. Remember we were telling you how Verizon stores and Apple were gearing up for this monumental impact of Verizon finally selling the iPhone and lines were short and it didn't seem as frenzies as many had thought.

And there was also rumors that Steve Jobs was back in the hospital. But as "Fortune" points out, there were also a couple tweets yesterday from different people who said they saw him having lunch at an Indian restaurant in Mountain View and there were reports a few days ago that he was seen happy with (INAUDIBLE) at the Apple headquarters.

So, no one really knows what the situation is there. But I can tell that you that Steve Jobs is on a leave of absence and people very concerned about his health, of course. It's a health related leave of absence. And so, you are likely to get these kinds of rumors. But to have it impact stock so much is kind of interesting.

So, quickly, a little morning market check for you about the rest of the market today. A lot of uncertainty about what's going on in -- obviously in Egypt. The Dow yesterday closed down 10 points. The NASDAQ up one point. S&P up just a little bit. We have futures down this morning, watching oil up a little bit. We'll see if uncertainty in Egypt, some days markets don't care about it. Some days like today it was just kind of a pivotal day yesterday. It really was.

CHETRY: Do they care more because it's Friday. So, then, there are two days off as well in terms of that.

ROMANS: Yes, that's a good point, too. And there's also -- well, there's some -- a University of Michigan consumer sentiment number that comes out after opening bell. There's a little bit of concern about that stock that's been up a lot. But they want to watch oil, they want to watch the dollar, they want to watch gold and see if that's going to show this uncertainty in Egypt and whether that's something that's going to affect stocks as well.

HOLMES: All right. Christine, as always, we appreciate you. Thanks so much.

CHETRY: Thanks, Christine.

HOLMES: And coming up here on this AMERICAN MORNING -- as you know, we are keeping a close eye on the developments in Cairo. The anger on the streets may be as angry as we have seen protesters in quite some time, once again demanding that President Mubarak go.

CHETRY: And Donald Trump making a big political statement at the conservative CPAC conference. Is he planning a run for the Republican nomination in 2012? He's pretty blunt about why he feels there's not that much out there, there's not many people that are up to snuff. He doesn't want to do it, but he may be forced to. Jim Acosta following all that for us when we come back.

Twenty-seven minutes past the hour.

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HOLMES: Bottom of the hour here on this AMERICAN MORNING. Welcome back. Thank you for being here. I'm T.J. Holmes.

CHETRY: I'm Kiran Chetry.

We're following a lot today when it comes to Egypt. New developments by the moment as protesters pack into Cairo's Tahrir Square, expected to be the biggest show of protests yet over this 18- day uprising. And we have the latest headlines from reporters on the ground.

Egypt's military now weighing in on the crisis. They issued a statement this morning calling for an end to emergency rule, but only when the current crisis passes. They also talk about ensuring justice in court cases and in disputed parliamentary seats, as well as free and fair presidential elections.

HOLMES: Also, this morning, take a look, protesters are marching on the presidential palace. This was happening overnight. The palace this morning, in Cairo, surrounded by soldiers, police cars, military tanks and how close some of these protesters got to the roads leading up to the palace are shut down right now and the army set up a barricade.

CHETRY: As the unrest spreads to Iran, we may not be able to actually see it. But BBC says Iran is jamming its Persian language TV broadcasts following their rolling coverage of the anti-government protests in Egypt. Meantime, another report is claiming that Iranian authorities are blocking reformist web sites and detaining opposition supporters ahead of a planned rally in Tehran on Monday.

So we want to bring you the latest developments out of Egypt. Nicholas Burns is a former undersecretary of state and now a professor of diplomacy and international politics at Harvard's Kennedy School. He's met with Mubarak several times dating back to 1984. That's when Ambassador Burns worked at the American embassy in Cairo and Nicholas Burns is in Providence this morning.

Good to se you. Thanks so much for being with us.

NICHOLAS BURNS, HARVARD'S KENNEDY SCHOOL: Thank you.

CHETRY: Let me ask you, first of all, about the news this morning. The seeming confusion but now we understand that Mubarak is not stepping down at this point ceding some key powers to his vice president but secondly, this show of support of Mubarak on the part of the military.

BURNS: Right. Well, Kiran, I think this could be a highly significant development. The situation is much less predictable and much less stable now than it was even 24 hours ago. The army's statement this morning seems to indicate that they are backing President Mubarak and vice president Suleiman and that they've called for the people to end the protests, go back to work and then they'll lift the emergency laws that have been in place for a number of decades.

So it's going to be very important for the government of Egypt to understand that these people in the streets are not going to go away, in my judgment, the protests will continue to grow and it may be now unchartered territory with the protests moving out from Tahrir Square towards Heliopolis, the presidential palace, towards the parliament and the TV buildings.

This is a dangerous situation. And the government needs to get it under control. I think by reforming and opening up to protesters and letting them be part of this transition process.

CHETRY: Well, there is some question now of what will be enough when it comes to the minds of the protestors. We heard from (INAUDIBLE) earlier, a very strong activist who said that this may have worked two weeks ago before protesters were shot dead. It won't work now because they feel that Suleiman is as tainted as Mubarak by the blood of the protestors. So short of both of them agreeing to cede power, how does this get resolved?

BURNS: Well, I think that's probably accurate but the people of Egypt, the people in the streets want to see a genuine process. One that opens up some avenues for them to say what they want for their future in a reform process and Mubarak's speech last night shut down all possibility of real change. And it was a speech of denial that he hadn't seen that the country wanted something much more than he was giving them.

So I do think the government of Egypt is going to have to move forward and you see that in the statement by President Obama last night, a good deal of disappointment and frustration with this situation and a hope that the government of Egypt will become much more realistic about the situation and the challenges that they are facing.

CHETRY: Did the White House mess up in any way or was this something that could have happened with any administration given Egyptian politics, in terms of seeming to give mixed messages and some confusion yesterday as to whether or not Hosni Mubarak was stepping down.

BURNS: No, I think the administration has done what it can do and should have done. I think the president has been very skillful, frankly, in reaching out to the protesters from day one and saying that the United States, this country, our country, a democratic country will support reform and democracy and at the same time the president and secretary of State have been trying to use their influence behind the scenes.

I think they have done what they can do. But you know, this is not about Americans. It's about Egyptians. They're going to control their destiny and we are a very influential country but we can't direct events there. And I think the president has been quick to say that. And I would think now, Kiran, that the president and the secretary of state, the administration will have to come out even more forcefully and call for change and reform and push behind the scenes, President Mubarak and vice president Suleiman to make this a real transition and to change.

CHETRY: You mentioned that the White House doesn't have much control over this situation. But in terms of the purse strings, $2 billion in aid from America to Egypt, a pretty strong relationship over the years. A key U.S. ally. I mean, is all of that in play here as we try to nudge or at least it appears that the administration is trying to nudge Egypt toward free and fair elections?

BURNS: That's the real leverage that the United States has. The more than $1 billion in annual military and economic assistance to Egypt. The Egyptian government knows that. And until now the Army, of course, has acted to protect the people in Tahrir Square. Today's announcement by the army could change things. And I think the Egyptians know, the Egyptian government knows that they can only go so far without incurring a huge disappointment in the United States and the Congress and in the administration in Washington.

I don't think it's time to play that card right now to withdraw American aid but that is a possibility for the future should this situation descend into further chaos and even to violence. CHETRY: All right. Nicholas Burns, former undersecretary of state, now a professor at Harvard Kennedy School. Thanks so much for being with us this morning.

BURNS: Thank you very much.

HOLMES: Well, turn to some politics now. Today is day two of CPAC, the Conservative Political Action Conference, an annual gathering of conservatives. It opened yesterday with a late add, surprise guest, Donald Trump. And you knew he did not disappoint.

(BEGIN VIDEO CLIP)

DONALD TRUMP, CEO, TRUMP ORGANIZATION: Frankly, I wish there was a candidate that I saw that would be fantastic because I love what I'm doing. In fact, I have a great club that's 15 minutes away. By the way, Ron Paul cannot get elected. I'm sorry to tell you. Sorry.

(END VIDEO CLIP)

HOLMES: Some would say "the Donald" was just keeping it real right there.

CNN's Jim Acosta joining us now this morning. Making the rounds at CPAC. If you can, remind our viewers - I say what it is, Conservative Political Action Conference, it's a gathering of political activists. But this is a big deal.

JIM ACOSTA, CNN CORRESPONDENT: This is a very big deal. This is sort of the "American Idol" for Republican presidential candidates this time around, T.J., and organizers of the Conservative Political Action Conference also known as CPAC say Donald Trump's people reached out to them about a potential speech at this event.

The conference was an opportunity for Trump to meet with a conservative group of gays and lesbians called Go Proud. And as you just pointed out, the real estate mogul did not fail to rile up that crowd. It is a sign that the race for president at least on the Republican side is wide open.

(BEGIN VIDEOTAPE)

ACOSTA (on camera): Are you here essentially to be here on behalf of the group, Go Proud, or are you here for Donald Trump, or you're here because you're running for president?

TRUMP: I'm here because I'm Donald Trump and I was asked to be here and I have a lot of respect for the group and I'm a Republican. Let's see what happens.

ACOSTA: This is sort of the "American Idol" of presidential politics right now.

UNIDENTIFIED MALE: Well, it really is. You know, as somebody who has been going to CPAC since my college days this is truly a place for candidates to come to get exposure. Many presidential campaigns kick off during the CPAC conference.

UNIDENTIFIED MALE: I'm in the process of testing the waters. I am in that process.

ACOSTA: Would you like to see Sarah Palin run for president?

UNIDENTIFIED FEMALE: You know, I believe in the American dream. Anyone can grow up to be president.

ACOSTA: Organizers say there are 11,000 people registered at this event so for the potential Republican candidates, that means a lot of face time with the faithful but not necessarily the press.

UNIDENTIFIED MALE: I'm not talking.

ACOSTA: What's the situation with Mr. Mubarak in Egypt right now?

(END VIDEOTAPE)

ACOSTA: We never did get an answer from Newt Gingrich. He didn't stop to talk to us. But the speakers on the schedule today are the who's who of possible contenders - Mitt Romney, John Thune, Tim Pawlenty and Ron Paul and after the big splash made by the Donald, they have a tough act to follow, T.J..

HOLMES: OK. Did we reconcile he was asked to come or his people asked for him to come? Which was which?

ACOSTA: Organizers at CPAC say that the Donald's people reached out to them. But there was -

HOLMES: He said he was invited.

ACOSTA: That's right. There was a little bit of back and forth going on over this and honestly, Trump also wanted to be there for this conservative gay and lesbian group called Go Proud, which did not go over well with a lot of religious conservatives at this event. This is going to be a source of tension over the next couple of days.

HOLMES: Jim, we appreciate you, as always. Thanks so much.

ACOSTA: You bet.

CHETRY: All right. Well, we're going to continue to monitor that situation right now in Cairo, on the ground, as the largest crowds that they've seen since this uprising started 18 days ago are being reported this morning. And we have the pictures for you. We're going to help you put it in perspective as well as we get new information.

Also to come on AMERICAN MORNING, Bible class in public school. The legislative push in one state that could put religion on the curriculum.

HOLMES: Also, we're told that a big warm-up is coming next week. But given the winter we've had, a warm-up could mean 21 degrees. Rob will be along with the forecast in just a minute.

It's 39 minutes past the hour.

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HOLMES: Well, 42 minutes past the hour now. We're seeing what could be the biggest anti-government demonstrations yet in Egypt. Some were saying the protesters are as angry as they have ever been today because so many of them just like so many people in the world were expecting the Egyptian president Hosni Mubarak to step down yesterday.

Maybe some at the White House were looking for that to happen yesterday but everybody it seems caught off guard when he defied the world once again and refused to resign.

Joining me now, Peter Brookes, former deputy assistant secretary of defense and former CIA officer, this morning. Sir, thank you for being here with us. How could we have been all duped so badly yesterday?

PETER BROOKES, FMR. DEPUTY ASST. SEC. OF DEFENSE: Well, we all bought into the conventional wisdom. But the fact of the matter is things turned out very different than we expected. We need to re- evaluate and see where we should go from here but in many ways, T.J., we're back at square one. The crowd has not got what it wanted. We still have Mubarak, Mubarak in power. We'll have to see if these promises he made about moving forward with the transition and reforms to allow free and fair elections at some point in the future come to pass.

HOLMES: Look, Peter, you said back in square one. In some ways, have we actually taken a step backwards because it seems now protesters are starting to directly align Mubarak with Suleiman so where maybe Suleiman could have taken power and had some good will from the people, it seems they are viewing them both, one and the same.

BROOKES: Yes, I think when you talk about Mubarak and Suleiman, I think there's a distinction without a difference in many ways. And they were not the crowds -- I'm not sure who the leader of that opposition is at this point. I think those crowds did not want to see Suleiman take control because they do see them as one and the same person essentially with the same interest.

But it is what it is. We're going to see what happens in the coming days. Hopefully both sides will exercise restraint. We certainly don't want to see a turn towards violence in any sort of way. But of course that is a possibility as the crowd becomes more and more anxious about their future.

HOLMES: And any relationship now between Obama and Mubarak, is it now done?

BROOKES: Well, it would seem considering what the Egyptian president said last night that, he certainly took a slap at the administration. I don't think the administration looks very good at all. I think its influence is waning quickly in Egypt and perhaps in that part of the world.

But, right now, you can't tell what the future is going to hold. And I hope that the administration is still going to reach out to the Egyptians, either through the American military or through political context and special envoy to try to make sure that the income does protect and advance America's interest, you know, first and foremost.

HOLMES: OK. And from what you have been able to discern, the Obama administration -- the White House, the State Department, then you throw in Leon Panetta over at the CIA and then you throw in James Clapper yesterday as well, it seems like -- you know, quite frankly they are just as confused as the rest of us in this case.

BROOKES: Yes.

HOLMES: What is happening here? Are there just some public flubs or, you know, behind the scenes in intelligence is not really giving them a clear picture either?

BROOKES: Well, T.J., I think they got caught flatfooted at the beginning. And then when you get into a crisis situation and events tend to take place very, very quickly. And there's very few good option when you get to a crisis.

And I think that the administration is playing catch up here. They are reactive. They should have been pro-active away head of this. They knew elections were coming up in the fall. They should have been trying to influence Mubarak much sooner than this to, you know, talk about a succession plan other than his own son.

So, I think that they are in a very tough situation. We had both two senior intelligence officials clarifying their remarks yesterday --

HOLMES: Yes.

BROOKES: -- after testifying on Capitol Hill. Now, I'm not saying it's not a tough job. Intelligence is very, very tough. The fact of the matter is that the government, I think, is behind the power curve at this point.

HOLMES: One last thing here for me quickly. People here in this country are used to a commander in chief, the president. He's in charge of the military. They do what he says do.

But over here in Egypt and other places as well, the military seems to be another party in this. How significant is it now that the government or -- excuse me -- the military has come out and said, or appears to be saying that we support Mubarak staying there at least until September?

BROOKES: Very good point. And this is critically important for the American people to understand. The military plays a very important role in Egypt, not just national security. They also have a political and commercial role and they have a lot at stake at who runs that country.

Mubarak is an ally. Suleiman is an ally. And I'm not surprised that they back them because they could have a major change in their position in Egyptian society should another government come in.

Our American people are used to a military that's under civilian control, but Egyptians have a lot more at stake here. The Egyptian military has more at stake in the outcome of this than perhaps the American military does in an American presidential election, and people need to understand that. That's probably why they came out and supported Mubarak because he has their best interest at heart.

HOLMES: Peter Brookes, good conversation. Good insight from you this morning. Always good to see you.

BROOKES: Thank you, T.J.

HOLMES: Thank you so much and enjoy your weekend.

BROOKES: You, too.

HOLMES: All right -- Kiran.

CHETRY: We'll continue to monitor the ongoing situation on the ground in Cairo, bringing you all the developments.

In the meantime, still to come on AMERICAN MORNING, if you've used a credit card lately, you know that, often, stores ask for your zip code. Well, now, it's to do just that in one state. We'll explain, coming up.

(COMMERCIAL BREAK)

CHETRY: All right. Fifty minutes past the hour. We deserve a break weather-wise and dealt with a pretty tough winter so far.

HOLMES: So far, yes.

CHETRY: Rob Marciano has a look at the map of the U.S. -- and I love how there's really not another storm rolling through somewhere.

ROB MARCIANO, AMS METEOROLOGIST: No. Fair amount of sun as well and the big blue H's, those are always nice. There's a couple of a little disturbances that roll across the northern tier, but a little front across parts of Florida. But that is about, as a matter of fact, the radar looks eerily quiet this morning, we're happy to say on this Friday.

But it is still very, very chilly, and in some spots, below freezing. From Houston back over to New Orleans, below freezing. So, frozen gators across the Chapewaya (ph) swamp. That's chilly for sure. Twelve degrees in Memphis and 14 degrees right now in Nashville.

Well, let's talk about the impending warm-up. We'll see a little bit warmer temperatures today: 48 in Dallas, 36 degrees in Memphis. Believe it or not, that is warmer than what we have seen. But the overall trend is much, much warmer one.

Let's take some of the cities that got hammered with winter weather the past two weeks, including some record snows and record low temperatures. Dallas, 48 today, you're going up to 67 by the time Monday rolls around. Oklahoma City, 46 today, you're going up to 64 degrees by the time Monday rolls around. In Memphis, you get up to 56.

In parts of Oklahoma where, yesterday, it was 31 degrees below zero, you'll get up to about 70 degrees come Thursday. That's a 100 degrees swing in temperatures. Thanks to this changing weather pattern, which is bringing warm air a little bit further to the east. You'll get warm air next week in New York.

St. Paul, Minnesota, they are celebrating this warming trend by crushing the snow sculptures that have been built over the past couple of weeks for their winter carnival. It's sad to see, I know, but temperatures yesterday were well below zero and artistic snowy angels being pummeled to the ground.

That's a quick check on the weather. AMERICAN MORNING is coming right back.

(COMMERCIAL BREAK)

HOLMES: About five minutes to the top of the hour. We continue to monitor what's coming to us out of Cairo today. Some of the largest and angriest protests we have seen after President Mubarak there once again defied the protesters and refused to step down yesterday. He did hand over some powers to his vice president.

Also development this morning: the military has decided they will back Mubarak in a way, at least saying they will guarantee some of the reforms get into place, but also they're saying that they support him staying in power until September during the elections when they come up. We'll continue to keep a close eye there.

CHETRY: And another senator is saying he's calling it quits in 2012. Arizona Senator Jon Kyl will not seek reelection for a fourth term next year. He is the second ranking Republican in the Senate. And his decision leaves an important post available. Kyl is also the fifth senator to announce he will not be seeking re-election, joining two Democrats and two other Republicans.

HOLMES: Also, the state of Arizona is suing the federal government, countersuing them, claiming the feds have failed to protect their citizens by enforcing current immigration law. You may remember that the Obama administration was the one that first sued Arizona this last summer over its controversial immigration law.

Governor Jan Brewer, that you're seeing there, says they will not use taxpayer in this countersuit. Instead, they'll try to raise money from private donors.

CHETRY: Also, you no longer can be asked for your zip code when using a credit card in California. The state supreme court ruled that it violates a cardholder's right to protect their personal information because the zip codes, which are then recorded, can be used to track people down for marketing purpose. The head of the retailers association is quite unhappy with the decision, calling it, quote, "a terrible decision."

HOLMES: And Bible class maybe not just for Sunday school anymore. It could soon be a part of the curriculum in Kentucky public schools. The state senate there voted 34 to one to approve this measure that would allow Bible courses to be offered as electives.

(BEGIN VDIDEO CLIP)

JOE BOWEN (R), KENTUCKY STATE SENATOR: No doubt about it, the most important book ever written. And, obviously, it's had so much influence on our society and all of western civilization. What this bill provides for is a social studies course. You know, it's education. It's not indoctrination.

(END VIDEO CLIP)

HOLMES: Social studies. The opponents of the measure say the bill is unnecessary because nothing currently prohibits Kentucky public schools from teaching about the Bible any way. The proposal still needs approval in Kentucky's House of Representatives where a similar bill was not given a pretty good greeting last year.

CHETRY: All right. Well, we're going to continue developments out of Egypt this morning as more and more protesters gather in Tahrir Square. Very unhappy with the news that Hosni Mubarak is not ceding power as president of that country. We're going to take you there live, give you latest details this morning when we come right back.

Two minutes to the top of the hour.

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