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Republican s Battle in Florida; Countrywide CEO gives back; Giuliani Losses Favor; Hostage Situation in Pakistan; Ballot Bowl Coverage Continues; Violence Erupts in Kenya; New Details on Hussein's WMD's

Aired January 28, 2008 - 10:00   ET


FREDRICKA WHITFIELD, CNN ANCHOR: All right. Good morning, everyone. I'm Fredricka Whitfield.
I'm still thinking about that shark story. He's both lucky and unlucky.

ROB MARCIANO, CNN ANCHOR: Yes. Biting down your leg and watching the shark's head get cut off.

Anyway, hope you're enjoying your coffee. I'm Rob Marciano. Heidi and Tony have the day off.

Stay informed in the CNN NEWSROOM. Here's what's on the rundown this hour. The fight for Florida. The primary tomorrow is key for the GOP. This hour, live reports on the McCain-Romney battle.

WHITFIELD: Also, unfolding horror in Kenya. Women and children among the victims of violence. Why the hatred runs deeper than tribal ties.

MARCIANO: And tough times for the economy. We're making sure they don't get tougher for you. Tips on protecting your job. It's Monday, January 28th. And you are in the CNN NEWSROOM.

Unfolding this hour. The road to the White House and a southern leg to that journey. For Republican s, it's sun, surf and stumping. They're in the final full day of campaigning in Florida. The state carries a windfall of delegates. It can also deliver a fatal blow to Rudy Giuliani's presidential campaign. He focused most of his effort on the state and his bid seems to be faltering.

Right now, polls show him running third. Meanwhile, Democrats have no delegates at stake in Florida so they're looking ahead to the super Tuesday contest on February 5th. Barack Obama has momentum from the big win in South Carolina over the weekend. He routed Hillary Clinton with a two-to-one margin of victory.

WHITFIELD: Hillary Clinton facing a lot of ground to cover both in miles and momentum. Her chief rival has scored a big primary win and a couple of prominent endorsements. Today, she's looking for wins of her own. CNN's Jim Acosta is following her in Springfield, Massachusetts.

Tell us about the day today, Jim. JIM ACOSTA, CNN, CORRESPONDENT: Well, good morning, Fredricka.

That's right. And it won't be lost on a Hillary Clinton campaign today that while she is up here campaigning in Massachusetts, much of this state's political power will be down in Washington this morning endorsing her rival Barack Obama. As we've been reporting this morning, the lion of Democratic politics and especially of this state, Ted Kennedy will be in Washington later this morning to endorse Barack Obama. He will be standing on the stage with the daughter of the late president John Kennedy. That's Caroline Kennedy. Each of them endorsing Barack Obama in this race for the White House.

And all of this has a back story behind it. And that it has been reported in previous days leading up to the South Carolina primary that Senator Ted Kennedy was growing uneasy with the way that the Clinton campaign, especially the former President Bill Clinton, was campaigning in South Carolina and what he had to say about rival Barack Obama. But all of that is now water under the bridge and the South Carolina primary is over.

It appears that Barack Obama has won what you might call the Kennedy primary, although the Clinton campaign yesterday was quick to send out a press release saying that the very least they are splitting the delegates in the Kennedy primary, pointing out that they do have the support of former Lieutenant Governor Marilyn Kathleen Kennedy Townsend and the son of the former senator from New York, that would be Robert Kennedy, Jr. Both of those Kennedys are now squarely in the Clinton camp -- Fredricka.

WHITFIELD: Interesting stuff. All right. Meantime, let's talk about these candidates looking forward, particularly Hillary Clinton, while you know, so many delegates will be earned on super Tuesday. She's also focusing on Florida even though for a while there was a pact, right, among the democrats that there would be no campaigning in Florida. Now suddenly Florida matters?

ACOSTA: So much for pacts and politics, right, Fredricka? We're up in Massachusetts because Massachusetts is a key state in super Tuesday. And Hillary Clinton, according to some polls that were released before the South Carolina primary, you sort of have to take them with a grain of salt, they were showing her doing quite well in this state.

All of that now will be recalibrated to take into consideration the support of the Kennedy clan. But, yes, you're right, she was down in Florida at a fund-raiser -- a couple of fund-raisers yesterday in the sunshine state. Careful to say that she wasn't campaigning in Florida. But for all intents and purposes, you know, the TV cameras were rolling when she was getting off the plane in the sunshine state. So for all intents and purposes she was campaigning in Florida.

And the reason why she is down there, she is saying that despite the fact that the national Democratic party has decided to invalidate the delegates in Florida because that state moved up its primary, she would like to see those delegates seated on her column as the convention, you know, draws closer later on this summer. Whether that is going to happen, that remains to be seen. She plans on being in Florida tomorrow night to watch those returns come in. And she's hoping for some TV juice, PR juice out of that headline if she wins those ballots in Florida because at the very least, perhaps blunt the momentum that Barack Obama has right now, which is taking on the shape of a runaway freight train at this point -- Fredricka.

WHITFIELD: All right. Jim Acosta in Springfield, Massachusetts. Thanks so much.

MARCIANO: All right. Let's get the latest now from the Republican battleground of Florida. CNN's Dana Bash is live in Orlando.

Dana, let's get started with Mitt and John. McCain and Romney, well, they're going at it. What's the buzz?

DANA BASH, CNN CORRESPONDENT: They are going at it, because it is really unclear at this point which one of them has the upper hand. In fact, neither if you look at the polls has the upper hand. It is neck and neck ahead of tomorrow's primary here in Florida. And it just fascinating to see what a different approach each man is taking to try to sell themselves to the voters here. Mitt Romney is saying, I am somebody who has experience outside of Washington, in the private sector so I'm the best to handle the bad economy. John McCain saying, no, I have national security experience, so I'm best to handle the issue of the war and national security. Very different approaches.

Let's start with Mitt Romney. Even before the sun came up this morning, Rob, he was going after John McCain on the issue of the economy, touting his own experience and really making clear he does not think John McCain, while he was in Washington, did anything good for the economy.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Senator McCain, as I said, is a terrific person, but as he has pointed out several times, he doesn't understand the economy terribly well. And I frankly can't imagine how you can have a president of the United States who doesn't understand how the economy works. I think it's time, once again, to make sure that you have a president who has actually had a job in the private sector and knows how the private sector works.


BASH: And Mitt Romney actually singling out three pieces of legislation that John McCain is known for, immigration, campaign finance reform, and climate change, saying that all of those are, liberal policies. Now, on the other hand, John McCain just wrapped up an event in Jacksonville, Florida, talking about the military, surrounding himself with people who are endorsing him with national security experience. He said, about Mitt Romney, I did not manage for profit, I led for patriotism. That in a nut shell is how John McCain is describing his experience versus John McCain's. Listen to him. (BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: And yes, the economy is important and we've been talking about the economy. And I have led in managing this economy, this country, and I'm proud to have been part of the Reagan revolution that began the most - the longest period of prosperity in American history. And I led and I didn't manage. But the point is that our nation's security is our foremost obligation to our people. We all know that.


BASH: So, you basically have two scenes here in this race for the finish, race for the top slot here, Rob. You have the economy versus national security. Which one of these candidates is best to handle that and which one do the voters actually care most about. But also the subtext here that you are hearing already this morning from these two candidates in trying to appeal to the Republican electorate here. Of course, Republican s only can vote in the Republican primary here. Is which one is more conservative? John McCain has had to battle some of the so-called establishment Republican s and try to prove that he is conservative.

Mitt Romney has had a hard time as well because he has admittedly changed positions on some social issues. So each man is trying to get at the other's sweet spot or weak spot on the issue of who is really conservative or perhaps do they have more liberal positions.

MARCIANO: Regardless, Romney, McCain, let's not forget Huckabee, they all want Florida bad but probably none as bad as Rudy Giuliani who has spent all his time down there. What's the word on the ground. How is he doing?

BASH: You know, if you look at our poll of polls, a combination of all the polls done here in Florida, Rudy Giuliani is right now running a distant third, a distant third. And it is quite stunning, Rob, given the fact that Giuliani, I think today is his 56th or 57th day campaigning here. For a long time he had the stage to himself. He was really focused on Florida, hoping that Florida would be the first place that he would actually have a win.

But at this point, as I said, it looks like he is trailing big time behind John McCain and Mitt Romney. He's trying to kind of wedge himself into the narrative here saying, you know John McCain says he's somebody who's good on national security. Mitt Romney says he's good on the economy. He said, well, I'm good on both so you should vote for me. So, it will be interesting to see if he can gain any traction in these last 24 hours as we head towards tomorrow's primary.

MARCIANO: Well, see if he can pull out the comeback like his New York Giants did. Dana Bash, live for us in Orlando. Thanks again.

BASH: And of course, this week CNN is bringing you the special coverage of the presidential candidates as they crisscross the country, ahead of super Tuesday. It is the CNN "Ballot Bowl," from noon to 1:00 Eastern, beginning today, join us for live coverage of the candidates as they make their pitches to the voters. Remember, CNN equals politics.

MARCIANO: Developing this hour. Conflicting reports coming out of Pakistan. A school hostage standoff apparently is not over. Pakistani police telling us that hostage takers are still holding at least 25 students inside a school. Now, earlier Pakistan's interior ministry had said the gunman released all the students and the teachers. Local police also say previous reports of 200 hostages were wrong. Earlier, even Pakistan's president said the incident had ended.


PRES. PERVEZ MUSHARRAF, PRESIDENT, PAKISTAN: They have been released. These have been confirmed just now. These were extremists who have been (INAUDIBLE) took the students in the school. They didn't go really to take the children as hostage. It was incidental that they entered the school to hide themselves. But in the process then to hide, they took the students hostage. But finally, it has been resolved peacefully. The children are free.


MARCIANO: Clearly this story is changing by the minute and we'll update you as needed.

WHITFIELD: And here at home, Countrywide financial, mortgage melt down casualty. And now CEO Angelo Mozilo says he forfeited some $37.5 million in severance and other perks. Despite the gesture, Mozilo will still be a pretty rich man. He is keeping retirement benefits and deferred compensation worth more than $40 million. Countrywide, once America's largest mortgage lender, ran into trouble with bad sub prime loans. Mozilo was criticized over the lucrative payout he was due after the sale of Countrywide to Bank of America.

Let's talk weather now, a soggy mess from central to southern California. Forecasters say the storm is beginning to move out but the risk of mudslides is especially high because of last year's wildfires. The storm has knocked down trees like dominoes. Check out this video from San Diego. A giant hole in the roof. Right there. The rain made the roads pretty slick in Los Angeles.

A car swerved off a freeway into a canal. Two people had to be rescued from the rushing waters. You see right there. And in the higher elevation, they got lots of snow. And you can see some pretty strong winds as well. Winds are also responsible for knocking out power to about 7,000 customers in half of the state. Not only cold, but really cold. You don't have power.That picture looks like it was at the top of ski resort there.

When it gets that windy, Reynolds, they shut it down, too much of a good thing.

REYNOLDS WOLF, AMS METEOROLOGIST: Oh, yes, you can't take the risk of people going up on those lifts. They're expecting strong winds in Colorado and wind gusts topping 100 miles an hour. That is beyond hurricane force so it could be certainly a rough time for you. In California though as you guys mentioned, we've got plenty of things to talk about, starting off in the bay area. Some scattered showers, it will be across the bay from San Francisco into Oakland. Let's see.

In Montiablo, we're seeing a little bit of snowfall there just to the east of San Jose. 289, a bad drive for you this morning although we're going to have some spots of the freeway that will be awfully wet. Farther to the south, Yellow Basin we go, rain is beginning to move out. But in the high spots, in the San Gabriel, still a touch of light snowfall. For all you skiers, you may be thinking about going up to big bear. You're going to have additional snow up there.

Certainly, great news for you. Meanwhile, the farther off to the east, we're dealing with something entirely different. In Phoenix this morning, we had some high-water rescues. We had some issues with a lot of rain coming down right in the Phoenix area, just a trailing effect, one shower after another. Some heavier thunderstorms dumping all that rain. Right now things do look better in Phoenix.

Here's a shot for you. KTVK, looks pretty good there. You see the mountains in the background. You see the buildings and the blue sky. Looks fairly nice for you. But just to the north of Phoenix, in the high elevations and into the central Rockies, what is the story going to be? We're expecting snow, and as I mentioned, a lot of it. Anywhere from one to three feet for much of the central and northern Rockies and back out to the Cascades, one to two, covered with the snow, we could see those whiteout conditions once again on parts of I- 70. That's the latest. We'll send it back to you.

MARCIANO: Big things happening in Phoenix, Reynolds this weekend. They certainly don't want ...

WOLF: Some king of a game or something?

MARCIANO: Yes. Some event of some kind, yes. All right. Work on that. Thanks, Reynolds.

Meanwhile, an American spy satellite out of control. It's coming back down to earth, but when isn't exactly known. This is what it looked like when Sky Lab reentered the atmosphere back in 1979. He wrote a song about it. The uncontrolled 80-ton hunk of metal broke into many pieces. Now the National Reconnaissance Office has lost the ability to guide its spy satellite. Government officials say they expect the satellite to come down sometime in the next two months, but because it's a spy satellite, many details are classified.

But our space correspondent Miles O'Brien reminds us that 60,000 tons of debris fall down every year but no one has ever been hit.

WHITFIELD: Thank goodness.

Well, straight ahead on the trails of insurgents still ahead in Iraq. U.S. troops acting with a new sense of urgency making major finds in the outskirts of Iraq. And update straight ahead in the NEWSROOM.

(COMMERCIAL BREAK) WHITFIELD: Well, new this morning. A roadside bomb killed five U.S. soldiers in Iraq. Word coming in just moments ago. It happened in northern Baghdad. The area commanders say is one of the last Al Qaeda stronghold in Iraq. Right now, the military is moving in for a planned offensive.

MARCIANO: President Bush will deliver his last state of the union address tonight. The White House says he'll zero in on fixing the struggling economy. Live now to CNN's Kathleen Koch at the White House.

Kathleen, I understand the president still putting the final touches on this last speech.

KATHLEEN KOCH, CNN CORRESPONDENT: That he is, Rob. In fact, the president, we're told, will be having his final run through at 10:30 this morning. The press secretary Dana Perino says the speech on the whole is locked down. She says the president feels pretty comfortable with it. It's going to run about 40 minutes. And she says the president won't spend a lot of time, she put it, rehashing the last seven years. It's going to be forward looking.

So, when you're looking forward, the big issue right now on Americans' minds is the economy. So, Perino says first and foremost the president will be sending a very strong message to the Senate, take quick action on that $150 billion economic stimulus package that the administration reached agreement on last week with the House.


DANA PERINO, PRESS SECRETARY: I think the president is going to say that the American people expect that we should be able to follow through on a bipartisan agreement that we reached last week and that the Senate should not do anything that would slow that down or blow it up. So, the president is going to call them to push forward and get this thing done so that we make sure we have an insurance policy against a possible economic downturn.


KOCH: When it comes to long term ways to help the economy, Perino says the president will push for making his tax cuts that expire in 2010 permanent. The president will also be pushing Congress to reauthorize his domestic surveillance measure. That program is due to expire just a couple of days. Congress was considering renewing it just for a month.

Really not debating it until February but the White House sends a veto threat to the Hill yesterday saying the President would not approve such a measure. That program is due to expire just a couple of days. Congress was considering renewing it just for a month, really not debating it until February but the White House sent a veto throughout to the hill saying the president would not approve such a measure.

Now, the president also will take a very unusual steps. He's going to be promising in his speech. To veto any future spending bills that have too many earmarks. Then there are those special spending projects that aren't voted on by all of Congress but are slipped in at the last minute. The president will say that Congress does not cut them in half in every single bill he gets over the next year, he'll veto that bill and in fact, he's going to send an executive order to federal agencies tomorrow, not to pay for any of those earmarks that come across their desks -- Rob.

MARCIANO: Great preview. I thought you were giving us the cliff notes. I don't have to watch. You gave me all the good talking points. We definitely want to watch tonight. Kathleen Koch, thanks, live for us at the White House. Our coverage of the president's state of the union address gets under way tonight at 8:00 Eastern. You don't want to miss it.

What does it mean to you and the race for the White House? And you know what if you can't watch it on TV, catch it online at

WHITFIELD: The economy stutters, that you know. Your worries mount as well. How to protect your job in these tense times?


WHITFIELD: An update now on the story we've been reporting this morning. A hostage situation in Pakistan. 25 students and teachers being held against their will by gunmen. Now, we understand that CNN has confirmed that that hostage crisis is over. Still unclear, however, who the gunmen were or exactly what the motive was.

MARCIANO: An economic downturn usually means layoffs and cutbacks. But you can protect yourself. Gerri Willis is here with strategies and how to stay ahead of the threat.

Gerri, you know, you hear all about these kind of recession- proof stocks. But is there such thing as a recession-proof job?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, Rob, the truth is there is no real job security out there. But there are some careers that weather economic slow downs better than others. Healthcare is at the top of the list. No matter how poorly the economy is doing, people are still going to go to the hospital and get medical care. And considering the aging baby boomer generation, this industry will grow even more.

Another hot spot is education and security. Security is another area insulated from hard economic times. After all, crime doesn't stop during a recession. And finally, lawyers do well during a recession. And don't forget about all those back office positions like accountants and administrative assistants who really make businesses go.

MARCIANO: Shocking, the lawyers do well.

WILLIS: I know. They always do well, right? MARCIANO: That's right. Well, what about what if you're going to lose your job? What kind of advice can you give people to either hold on to it or maybe plan ahead?

WILLIS: Well, Rob, one of the best things you can do to protect your job is to specialize. Employers want people who are the best fit, specializing to market you more effectively even within your own company. You may not know how much of an expert you already are. The best bet for you is to hire someone to reframe and rewrite your resume. Most folks send out a resume that's way too general but specialists are the ones who get and keep their jobs. To help market your specialty, make sure you get on projects that allow you to really showcase your skills.

MARCIANO: Housing market? Let's say I bought a house, I have, and let's say the market goes down, it has. So, I have less money now. And I can't sell it but I have a new job and I don't want to say no to that new job, that forces me to relocate. What is a person to do?

WILLIS: Well, I'm hearing more and more about this. A lot of people in very depressed areas of the country who are offered jobs but they can't move because they're not able to sell their house. Now, while this may not be possible in most cases, if you're a sought-after job candidate there may be wiggle room.

If employers want you enough and you can't sell your home, they may agree to have you rent your home and pay you the difference. In some cases employers will even buy your home from you. I've heard about that, too. The more you matter to the company, the more likely you are to get out of the situation and get some help. Another option your employer may consider is even telecommuting.

MARCIANO: Telecommuting. That's working in your PJs.

WILLIS: Work in your PJs. It works for me.

MARCIANO: Say I'm looking for a job. I don't have one and I'm looking for a job in this sort of environment, what kind of advice you can give me?

WILLIS: Bottom line, as an employee, you don't have as much leverage today as you did when companies are adding jobs. You really need to be clear about what you will and won't accept. Make sure that if you've moved for a job that you're reimbursed relocation costs which can run to the thousands. If you've not offered a bonus, try to increase your annual paycheck. You need to know your own bottom line.

And for some health benefits may be the most important part of the employee package. You're also willing to negotiate on title, that will position you even better inside your new company. And if you have a question send it to us at We answer those questions right here every Friday. And we love to hear from you.

MARCIANO: All right. Gerri Willis, great advice as always. Thanks, Gerri. WILLIS: Good to see you, Rob.

MARCIANO: Likewise.

WHITFIELD: Straight ahead, we're taking you overseas. Disturbing violence in Kenya. Women and children rounded up as tribal fighting escalates to unthinkable levels. An update straight ahead.


MARCIANO: 10:30 Eastern time, 7:30 out West. Good morning, everybody, I'm Rob Marciano in for Tony Harris.

WHITFIELD: I'm Fredricka Whitfield in for Heidi Collins.

Among the top stories this morning attempts at peace, networking in Kenya, instead, unthinkable acts of violence are happening across the country and those attacks are spreading as we speak. CNN's Zain Verjee is in the capital of Nairobi this morning.

And so, for the last few days, Zain, you've been traveling across the country. While Nairobi seems peaceful at least in recent days the next few days, the outskirts are an entirely different story.

ZAIN VERJEE, CNN CORRESPONDENT: That's right, Fredricka. Imagine being at home with your family, you're having dinner and all of a sudden your neighbor that you've known for years just bursts in, hurts you, attacks your family, takes everything you own and burns your house down.

That is exactly what is happening with the tribe on tribe violence in the Rift Valley, in that particular area in Kenya. We went to one town called Naivasha, and this is what we saw.


VERJEE: The latest town in western Kenya to boil over, Naivasha, in the Rift Valley. The Red Cross says as many as 30 people were herded into a house and burned alive, all from ethnic minority groups in the area. Several more people killed and injured, hacked up by people wielding machetes. The highway to Naivasha is a no man's zone, filled with danger, gangs harassing motorists.

There are boulders on the streets, we weaved our way through all of that, through the burning tires. We've seen a lot of military trucks passing us to try and break up some protesters and crowds that have gathered on to the streets. Security forces fire tear gas and live ammunition to break them up.

The violence in Naivasha pits the majority Kikiyu there, Mwai Kibaki's tribe, against the Luo, Luhya and Kalenjin tribes, most of who voted for opposition leader Raila Odinga in last month's disputed election. A gang here in the heart of Naivasha Town checking our car for their tribal enemies. One tribe needed police protection just to walk down the street. Many in Naivasha are fleeing. The Kenyan Red Cross is setting up camps for all sides. Further up the highway, Nakuru Town, local reports say at least 60 are dead on Thursday with hundreds wounded, hacked by what machetes, clubbed or shot by poison arrows. We met Pius who is trying to save his terrified sisters. Have you been in touch with your sisters?


VERJEE: Are they OK?

THUKU: They are OK, but they are telling me it is getting worse.

VERJEE: How are you going to pick them from Nakuru? How? Even getting inside town is a nightmare.

THUKU: I will. I have to. What else do you do? Do they die, and then you live with it knowing that they called you?

VERJEE: The tribal fight in the Rift Valley is not just about who is president, it's becoming about settling old tribal scores.


VERJEE: Fredricka, the real issue here at stake is land. You see, we won independence back in 1963. And at the time, one particular tribe got loads of land in the Rift Valley through political patronage. So, a lot of the other tribes in the area have really been angry about that, and this is what the dispute is all about. So it goes much deeper and there are real old grievances and bitterness at stake there -- Fredricka.

WHITFIELD: And so, now Zain, too, the Kenyan government is threatening to make arrests involving those who are part of the opposition. How might that go about? Is that even realistic, and is that the answer?

VERJEE: They are threatening to do that. It's definitely not the answer, because all that's going to do is to fuel the situation and send Kenya down an even worse path. The problem is, is that both sides have bad blood. They don't trust each other. It's very difficult for them to make a deal, because they're so bitter about the election.

But it's also become more than just the elections. This has become about tribal dispute and that's the problem. A lot of Kenyans are saying if they could also put their big egos aside and think of the country, that's always been a beacon of stability for decades, then we could get somewhere. Kofi Annan's here, he's trying, but it's going to be very tough to navigate the tribal issues, the personal issues, and the diplomatic and cultural nuances.

WHITFIELD: All right. Zain Verjee, thanks so much. It's hard to see how this is going to end. So far, more than 750 people have been killed just since mid December since all of this began. Thanks so much, Zain -- Rob. MARCIANO: Fed (ph) insurgents chased the outskirts of Iraq. A new mission for U.S. troops in the hot spot. CNN's Michael Holmes has more on this story.


MICHAEL HOLMES, CNN CORRESPONDENT: Operation Fulton Two (ph) is under way. It feels like we're in the middle of nowhere and it's taken us all night to get here. In fact, we're in a part of northern Iraq that U.S. troops have never been in before. That's because, according to military commanders, this is where the fight in Iraq has moved.

The surge may have quieted Baghdad, but the insurgents, foreign and local, have fled north and south of the capital, mainly north.

MAJ. GEN. MARK HERTLING, U.S. ARMY: You've seen these extremist organizations adjust and move to the places where forces were not and attempt to settle themselves. Now we have an opportunity to go after them.

HOLMES: Support choppers overhead spot a car hidden amid mounds of earth. Not your normal parking place. It's a car bomb, packed with homemade explosives, ready for its deadly task. One of 16 these soldiers have found in the past two weeks. It's destroyed where it sits. Incredibly, some of the explosives survive. Another detonation, this time no chance anything will remain.

CAPT. JONWAYNE LINDSAY: These UV IEDs pose the biggest threat to our checkpoints -- the concern was the checkpoints. I think we're saving their lives. I think we're securing the population even out here.

HOLMES: A few miles away Iraqi soldiers in the lead, approaching then searching an isolated farm house. The Americans follow.

UNIDENTIFIED MALE: He's in custody right now, and we're continuing to explore the house and the area.

HOLMES: Timers and a CD are found, suspicious but not enough to detain the man of the house. There's a sense of urgency to Fulton Two and other missions under way outside Baghdad. Thirty thousand of those surge troops are due to head home in the months ahead.

The race is on to chase down as many al Qaeda and other insurgents as possible before that happens. And more and more, even in these remote areas, locals are turning on insurgents, giving Iraqi and American soldiers crucial information.

COL. SCOTT MCBRIDE, U.S. ARMY: And every single successful find that we've had in the last three weeks has been the result of an Iraqi man who has come forward and took us to a place on the ground. There is no substitute for that.

HOLMES: Over a vast area of barren terrain the units spread out. Bulldozers look for buried weapons, none found here. But, another car bomb in the making is being prepared for the final stage of the loading of explosives. It's parked next to a mud brick house. The car is destroyed. The house, vanishes.

There's little doubt the area is popular with car bomb makers driven from urban areas. Here, they've been able to hide, as they work, near the trolls out here. Not until now. A third car is found, again in the final stages of preparation. From several hundred meters away the shock wave rolls over us. Debris rains down. What's left of the car burns fiercely. And then word of a significant find.

CAPT. JIM HOUSTON, U.S. ARMY: We found video evidence of attacks against Americans -- planned future attacks against Americans. It's a lot of document evidence that's going to have to get translated.

HOLMES: Officers say it's an insurgent command center, weapons, ammunition, bomb making materials and tapes showing the final statements of suicide bombers about to embark on their mission. Even army-issued clothing is here. And in the fields an informant point soldiers to a buried cache of mortar tubes. No sign of the insurgents, but commanders say no matter, they've been forced to move again.

HERTLING: Our mission is to pursue them, to continue to pursue them, not allow them to get any kind of base, not allow them to get entrenched in a community and keep them on the run.

HOLMES: Michael Holmes, CNN, near Samara, northern Iraq.


MARCIANO: We are nearly five years into the Iraq War. Now new details on why Saddam Hussein didn't come clean about his weapons of mass destruction program. The FBI agent who spent months interrogating the Iraqi dictator, says Hussein told him he was bluffing about having WMDs, suggesting he feared Iran more than he feared the U.S. The agent made those comments in a CBS interview.


UNIDENTIFIED MALE: Why keep the secret? Why put your nation at risk? Why put your own life at risk to maintain this charade?

GEORGE PIRO, FBI SPECIAL AGENT: It was very important for him to project that because that was what kept him, in his mind, in power. That capability kept the Iranians away, it kept them from reinvading Iraq.


MARCIANO: Agent George Piro also says Hussein told him he underestimated President Bush's intentions and didn't think the U.S. would invade Iraq -- Fred.

WHITFIELD: On to the campaign trail now. Presidential candidates seeking southern exposure and, of course, all important votes. Republican s are stumping in Florida, the site of tomorrow's big primary. Over the weekend, John McCain won the endorsement of that state's governor. They're in their final full day of campaigning in Florida. The state carries a windfall of delegates, and it could mark the final stand for Rudy Giuliani.

His presidential campaign has to focused most of its efforts on this state and that bid seems to be faltering. Right now, polls show him running third. Democrats have no delegates at stake in Florida, so they're focusing, instead, on next Tuesday's Super Tuesday contest. Barack Obama has momentum from a weekend win in South Carolina. He routed Hillary Clinton with a two-to-one margin of victory. And Obama boasts endorsements from two Kennedys. Yesterday, JFK's daughter, Caroline, and today, Senator Ted Kennedy.

Well all this week CNN is bringing you special coverage of the presidential candidates as they crisscross the country ahead of Super Tuesday. It's the CNN "Ballot Bowl" from noon to 1:00 Eastern today. Join us for live coverage of the candidates as they make their pitches to the voters. Remember, CNN equals politics.

MARCIANO: I remember. President Bush will push for quick congressional action on a tax rebate during his State of the Union address tonight. But just who benefits from the rebates?

Here's CNN's senior correspondent, Allan Chernoff.


ALLAN CHERNOFF, CNN CORRESPONDENT: Judy Ruggiero is already thinking of where she would spend the extra few hundred dollars from a tax rebate.

(on-camera): What do you think you would buy?

JUDY RUGGIERO, SHOPPER: Oh, well, I have three grandchildren. I might spend it on them.


RUGGIERO: Yes, toys, clothes.

CHERNOFF (voice-over): Marie Gartshore plans to buy more toys for her grandson, like the pet giraffe she just purchased.

(on-camera): Where do you think it's made?

MARIE GARTSHORE, SHOPPER: I don't know. I didn't even look. In China. They're all made in China, especially if they're inexpensive.

CHERNOFF (voice-over): Discount retailers that offer great value like Wal-Mart, Target and Dollar General, stand to be big winners from the rebate program, because the tax rebates are aimed at their customers, middle and lower-income consumers. But the manufacturers who are likely to benefit most are generally not American.

(on-camera): Walk into almost any store that sells toys or apparel and you know where the products are made, Thailand, Cambodia, China. It's almost all imported.

(voice-over): Nearly one-third of what U.S. consumers spend on manufactured products comes from abroad, according to the National Association of Manufacturers. That doesn't even include imported crude oil used for gasoline. And drivers will spend some of the rebate money at the pump.

SONIA TOBAR, DRIVER: I'll have my tank filled up and I'll be able to go places. And I won't think about it twice.

RAE HEDERMAN, HERITAGE FOUNDATION: People who go out who, for example, you know, spend money on gasoline, fill the car up, that money will go to our trading partners here, people who provide us with oil, Saudi Arabia, Venezuela, Norway, Nigeria, for example. And that will actually help stimulate their economy.

CHERNOFF: Tax rebates should help the U.S. economy, but they won't provide the spark they would have generated decades ago when the country wasn't nearly as dependent on cheap foreign imports.

Allan Chernoff, CNN, Pearl River, New York.


MARCIANO: You can expect President Bush to talk more about the economy tonight during his State of the Union address. CNN's coverage begins tonight at 8:00 Eastern. Among other things, we'll look at what it means to you and for the race for the White House. Remember, if you can't watch it on TV, well, you can watch it online at

WHITFIELD: That's right. We're everywhere.

MARCIANO: Everywhere.

WHITFIELD: You can't escape.

Straight ahead, a heavenly place to stay in Super Bowl city, just leave your partying outside.


UNIDENTIFIED FEMALE: I would think that God's got to be excited about the Super Bowl as well. He wants people to enjoy life.


WHITFIELD: So that's why Sister Linda has rooms to rent, in the NEWSROOM.


MARCIANO: CNN equals politics. We also equal business. And mark it down, 2007 was the worst year for new home sales since the government started keeping track of the housing market. Susan Lisovicz is on the floor of the New York Stock Exchange with details. Susan, we knew it was bad, but this says it was pretty darn bad.

SUSAN LISOVICZ, CNN CORRESPONDENT: That's right. It just puts it in perspective that this is the worst we've seen in decades, Rob. And this was really foreshadowed last week because we were talking about last week when existing home sales came out. This is simply the other aspect of that very big report. This is new home sales, worse than expected for December and for all of the year. We saw a drop of more than 40 percent in home sales from December '07 compared to December '06.

The weakest showing for home prices in 26 years. Where is the bright spot in this? Well there actually is, Rob, in that the inventory of unsold homes fell. And obviously, you want to work down that glut if you want to start raising home prices and for this market to recover. So you want that glut to be worked down and the inventory shrunk a little bit.

MARCIANO: Well, we need that to happen for sure. What's going on with Countrywide Credit there and their CEO, giving back some money?

LISOVICZ: Yes, that's a headline, isn't it? That's like, sort of, like "Man Bites Dog" kind of headline, because Countrywide, one of the biggest players in mortgages, obviously -- certainly a lot of people would say that part of this problem is that lenders made loans to people who really would never be able to afford to pay their mortgages when the terms changed.

Countrywide CEO, Angelo Mozilo, widely criticized for an excessive compensation package. He will be leaving when Bank of America acquires Countrywide. He says he will give back now $37.5 million in retirement pay. This was so widely criticized that Congress has actually asked him to appear, as well as others, to explain how this could be justified. But before you shed a tear, just keep this in mind, that Mozilo will still take away in excess of $40 million in deferred compensation and other retirement pay. So he is going to be well off and well off -- than almost anyone I know.

MARCIANO: So we don't feel bad for him at this point. What are the markets doing?

LISOVICZ: Well, you know, Countrywide shares, by the way, are down about 1.5 percent. And the market, well, it's topsy-turvy. That's not a complete surprise. It was topsy-turvy last week, to say the least. But the Dow, right now, is on the plus side. The Nasdaq is also making a little bit of a bounce. And this is good news, Rob. Because we had another huge sell-off globally. Shanghai, the Shanghai Composite was down seven percent.


LISOVICZ: Hong Kong, Japan's main index, down four percent. European markets are down about two percent. So this is pretty good news. And of course, why am I mentioning this? They're down on fears that the world's biggest economy will go into a recession. So the numbers don't look too bad. Now you were talking about, before you talked to me, Rob, about the "Ballot Bowl." Hey we've got a business bowl this week.


LISOVICZ: Yes. Because we have the State of the Union address tonight. You know the economy is going to be front and center. We have the Federal Reserve this week, going to make another decision on interest rates. We got the first look at fourth quarter GDP. That is the broadest look at the U.S. economy. And that will give us an indication of just how much the economy is contracting.

We have the jobs report for January on Friday, plus lots and lots of earnings. McDonald's, by the way, shares are down about seven percent because -- worldwide sales doing all right, guess what, here, sales a little soft. So, we've got a lot going on. And you can -- you can expect that the market will react to it. Which is my way of saying, expect another volatile week here, Rob.

MARCIANO: When you say the business bowl, I think it's your way of saying you're looking for your own show. OK. I'm not sure this is the forum for that. The sixth floor is just beyond this camera, make a trip to Atlanta and pitch your show.

LISOVICZ: No, I am tethered here. I'm embedded on Wall Street. I feel like I have my own show. I'm doing play by play every half hour.

MARCIANO: You're doing a great job. Always good to see you. Susan Lisovicz.

LISOVICZ: Thanks, Rob. I'll be back.

MARCIANO: All right. We'll see you in a bit.

WHITFIELD: Well Susan's got my endorsement.

Well speaking of business, how about paying 500 bucks a night for a hotel at the Super Bowl? Well, when you can actually pay $250? Some might still find that to be a bargain. We'll explain.


MARCIANO: Time now to check on some of the most clicked on videos on The $150 billion economic stimulus package, well, there it is. How much impact will it really have? Discount retailers like Wal-Mart, Target and Dollar General stand to be the big winners, but manufacturers who are likely to benefit are generally not American. Check it out on

Paper or plastic? Well that's a question you will no longer be asked when you shop one grocery store chain. It's pulling the plug on plastic in an effort to save the environment. Good for you.

And, there she is, Miss America. Look who's with her? Hello, Robin. It's Robin Meade from "Headline News." Check out Robin's behind the scene look at this year's pageant and her interview with winner, Miss Michigan, Kirsten Haglund at

WHITFIELD: All right. Something tells me you will not be checking into this next hotel that I'm going to mention.


WHITFIELD: So perhaps you can't find a hotel for the Super Bowl. Well try a monastery.

So what do you think?


WHITFIELD: Maybe not.

MARCIANO: I was just joking.

WHITFIELD: All right. Well, there are plenty of open beds there and at just half the price.


WHITFIELD: But you have to behave, Rob.

MARCIANO: All right.

WHITFIELD: Jason Barry of affiliate, KPHO, has the story.


JASON BARRY, KPHO REPORTER: The big game is just days away and hotel rooms are hard to find. There are, however, plenty of beds available here. There's just one little catch...

UNIDENTIFIED FEMALE: Learning to hear what God wants in any given --

BARRY: ... you'll be staying with Sister Linda and friends at Our Lady of Guadalupe Monastery.

SISTER LINDA, BENEDICTINE SISTERS OF PHOENIX: It's a different twist for us in the sense that we've never opened the monastery for an event like the Super Bowl. It's just a different clientele than we're accustomed to. We have four rooms up here.

BARRY: The Benedictine Sisters of Phoenix are offering up rooms the week of the Super Bowl. Only $250 a night and $50 extra for each additional person. Not exactly unreasonable, considering a nearby Motel 8 is charging $500 a night.

(on-camera): There are a few rules you have to follow if you stay here for the Super Bowl. No rowdy behavior, no smoking and, most importantly, no alcohol, which means fans will have to have their crazy fun someplace else. But think of it this way, confession couldn't be more conveniently located.

SISTER LINDA: I would think that God's got to be excited about the Super Bowl as well. He wants people to enjoy life.


WHITFIELD: And of course it's a great location as well. Just three and a half miles away from the stadium. It's a bargain.

MARCIANO: I would consider that.

WHITFIELD: And convenient.

MARCIANO: I'm going but I'm staying at my friend's place and that's free.

WHITFIELD: Well, hey, that's all right.

MARCIANO: You don't have a sister looking over your shoulder. Mom would be very proud.

California dripping wet, a storm comes crashing through. Damage assessment coming up next in the NEWSROOM.