Return to Transcripts main page

CNN Newsroom

John Edwards Withdraws from Presidential Race; Michael Mukasey faces Questions about Waterboarding; Giuliani Drops Out After Florida Results; Snow in China Continues; Follow Up Cut from Federal Reserve Expected

Aired January 30, 2008 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins.
TONY HARRIS, CNN ANCHOR: And I'm Tony Harris.

Stay informed all day in the CNN NEWSROOM. Here's what's on the rundown. Florida fall out. Two won't make it to Super Tuesday. The Democrat and the Republican are expected to call it a campaign today.

COLLINS: Attorney General Michael Mukasey, this hour, his first Senate appearance for confirmation. Look for hostile Democrats and questions about torture.

HARRIS: The cost of borrowing may get cheaper within hours. Waiting on a Fed cut today, Wednesday, January 30th. You are in the CNN NEWSROOM.

COLLINS: Breaking news in the race for the White House. Democrat John Edwards is calling it quits. Two sources inside his campaign tell CNN he will make the formal announcement today in New Orleans at 1:00 p.m. Eastern. Edwards has not won a primary or a caucus, but his sudden withdrawal is catching many people by surprise. It's not clear if Edwards will offer his endorsement of another Democrat.

The best legal team on television is covering all of the angles for us this morning of the breaking news. Jessica Yellin is standing by in Los Angeles. But first, I want to get to Suzanne Malveaux. She is joining us now by phone.

Suzanne, you had just reported moments ago that it was interesting that John Edwards did, in fact, call his two competitors.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Yes, he did that. I've been speaking with his aides throughout the morning, and I just spoke with one of them who said that Edwards reached out to both senators, Clinton and Obama, yesterday, calling them on the phone to tell them that he was considering dropping out today and that he asked both of them to make a pledge that fighting poverty, the central theme in his campaign, be a theme that either one of them would take on in the general election, and if the democrats won in their administration. I'm told that both of them agreed that, in fact, they would do that, so both of the candidates getting pretty much a heads-up on what was coming here. Now, we've also been told that as of this point he has no plans to endorse anyone, but we're also told that this could certainly change, and it will depend on how things unfold on super Tuesday and moving forward. But his aides said this was a decision, a tough decision, but he made it over the course of the last 24 hours. They huddled together in a conference call about 9:30 this morning to really kind of figure out how to announce this officially.

But they did feel that there might have been an opportunity to continue, that this has been a very unpredictable race despite the fact that he hasn't won any of the contests. They said there are a lot of things that have been unexpected, and he's performed well in debates and he has seen his candidates take each other on, that there might be an opportunity to take a second look at the viability, but obviously they realized, according to one aide, that the path was very, very narrow and one aide said they might as well just let his opponents duke it out.

COLLINS: Let them duke it out. All right. CNN's Suzanne Malveaux on her way to New Orleans right now for this announcement by John Edwards. Suzanne, thank you.

HARRIS: And let's get you to CNN's Jessica Yellin. She joins us from Los Angeles. And I should mention that Jessica broke this story for us is morning. Appreciate that.

Good reporting, Jessica. Let me throw, because this is what I do, let me throw a little cold water on all of this. John Edwards dropping out. Why are we treating this like this is such a big surprise? My goodness, as Heidi just mentioned, and as Suzanne Malveaux just mentioned, as I'm sure you're going to mention, he hasn't won anything, and I'm not clear as to how much money he had to move forward. So, perhaps it's a surprise because he had sort of pounded his fists and suggested that he was going all the way to the end. But is this really a surprise that he's dropping out?

JESSICA YELLIN, CNN CORRESPONDENT: I would say it is in a sense that he was so adamant that he was staying in, that it seemed he could stick it out through super Tuesday. But as you point out, he had not won, and the reason it's such big news is because both he has made such a difference in the tone of this race and the topics they talk about just by consistently hitting these issues, these poverty issues. He really has helped shaped the form of this race even though he hasn't had as much money or media attention as the other two candidates.

And then, of course, there's the fact that his absence creates a much tenser and more taut contest between Senators Clinton and Obama going forward into February 5th. And you have to wonder whether the factor that played into his decision making. The idea here is that voters can now really have a decisive choice between Clinton and Obama, to see them isolated next to each other, to see them in the debate tomorrow night, just the two of them, to have this very stark choice who they want to be their nominee for this party.

HARRIS: I'm sorry. Go ahead, Jessica. YELLIN: No, no. I'm saying conventional wisdom is he had to drop out sooner or later. But it is a tectonic shift in the shape of this race.

HARRIS: That's interesting. So, I'm wondering now that one of the things that you are able to do in a campaign when you run for president, as you know, is you hope to raise your issues and put them on the national agenda. And I'm curious now as to when you talk his issues -- fighting for poor folks, whites, blacks, Hispanics, who naturally takes up those issues of the two remaining candidates?

YELLIN: It's interesting, Tony. They both do in a sense. I mean, there's more of a natural affinity between Edwards and Obama in terms of both their youth and their approach to politics. They both take this position that they're fighting the interests, the entrenched interests in Washington. And there's been a lot of talk that if Edwards were to drop out, he would endorse Obama, although certainly no one in his camp has said that is the case. But on the other hand, Edwards' issues are democrat-based issues.

HARRIS: Yes.

YELLIN: They are about the people. And that's Hillary Clinton's main base of support. So, it seems likely that his supporters could divide evenly between both of them and they'll really have to fight hard for his supporters and for his endorsement.

HARRIS: Wow. Jessica Yellin broke the news of John Edwards pulling out of the race for the democratic nomination for president. Jessica, appreciate it. Good work this morning. Thank you.

COLLINS: Well, I want to get now to Jennifer Palmieri. She is an adviser to the John Edwards' campaign and is joining us by telephone from Washington, D.C., this morning.

Jennifer, how hard a decision was this for John Edwards?

VOICE OF JENNIFER PALMIERI, EDWARDS' ADVISER: It was a very difficult and personal decision for him and Elizabeth to make.

COLLINS: I'm sorry. I think we missed the beginning of your answer there.

PALMIERI: I said it was a very difficult decision for John and Elizabeth both to make. I mean, obviously, they've been very committed to this campaign as Jessica was discussing before. They -- there are particular issues -- poverty, health care, some economic issues -- that John really led on in this race, and it's hard for them to walk away. But the mass just was not there, and I think that in terms of, you know, in terms of votes racking up. But I think what is significant about him getting out and might not be such a surprise, but I do think that it will have a tremendous impact on the eventual nominee, and I do think that those voters are very much up for grabs.

COLLINS: I think you're absolutely right about that. I mean, to hear, obviously, the bit of deflation and disappointment in your voice as well. Jessica also said something that kind of stuck out to me. I'd love your opinion. Is it true that he knew that he was going to have to drop out and it was just a matter of when he was going to do so?

PALMIERI: This is Jennifer. I don't - I don't think that he knew this. I think that he really did consider staying in until the election if that was possible to do, staying in until the convention and then, you know, having perhaps a brokered convention and playing a significant role in deciding who the nominee was there. So, he could have -- actually, money was coming in pretty well. I know that the campaign raised over $4 million this month alone.

COLLINS: Right.

PALMIERI: But I think that they decided it was just going to be too hard and perhaps has more of an impact in shaping the issues that the race -- you know, that they focus on from here on out by getting out.

COLLINS: And forgive me. It was Jessica who said that he had to drop out sooner or later. And you are Jennifer, just want to make sure that our viewers are understanding what we're talking about and who we're talking to here. And you know, it is an interesting conversation that must have taken place when he phoned Senators Clinton and Obama and talked to them specifically about this issue of poverty that is, indeed, so important to him.

PALMIERI: Right. I think that it's - I think he made one of the biggest marks in this race. I hope that he was one of the first candidates on the national stage to bring this up again after it being, you know, pretty much ignored for about -- for the last couple of decades. And I think it's a big mark and he's quite proud of it and I think he'll continue to try to convince the democratic candidates, both of whom are inclined to be very supportive of anti- poverty measures, to continue to focus on that throughout the election.

COLLINS: So, Jennifer, who will he endorse?

PALMIERI: Oh, I have no idea.

COLLINS: Come on.

PALMIERI: I don't know. And I don't know --

COLLINS: I just threw that out there. Come on.

PALMIERI: I don't know if he's going to endorse anybody or certainly whom it would be. I do think that his -- you know, his - I think that the people that supported him are - I think it will split. I think some will be inclined to support Senator Clinton and some will be inclined to support Senator Obama. This is the real question, are the people undecided in the February 5th -- 22 states? I think the people who might have been inclined to be supportive of him there, I think that, you know, those are even the more interesting group of folks, the undecided folks that might have gone to him or Clinton. COLLINS: Yes. They're going to have to decide. They're running out of candidates here.

PALMIERI: Yes. Yes.

COLLINS: All right. We appreciate your expertise on all of this coming to us from the John Edwards campaign. Jennifer Palmieri, thank you so much, Jennifer.

HARRIS: And CNN contributor Roland Martin is up next with us to talk about this decision by John Edwards.

Roland, I'm throwing cold water all over this. I don't think this is a big surprise or shocking news. But I am interested to know, he hadn't won anything, but I am interested to know from you who does this benefit? Which of the two remaining candidates -- which candidate has eyes wide open at this point at the possibility?

VOICE OF ROLAND MARTIN, CNN CONTRIBUTOR: Well, Tony, I think you've got to separate several different things. I think in one way, both campaigns have been trying to go after John Edwards donors. They were pretty much poaching his folks, sort of the soft sell the last couple of months, really in the last two weeks, the hard sell thing, look, your guy is out of this thing. You need to back somebody else. And so, a number of trial attorneys have been backing John Edwards. They give big money, and so, therefore, they're now up for grabs. Both campaigns, Obama and Clinton, have been going after them.

On the supporter side, it's a whole different ballgame. It's very interesting. If you analyze the numbers in South Carolina, obviously Edwards did extremely well. He took the lion's share of white voters there. White males chose Obama over Clinton, and so the question is where do various voters go. That's a really big issue. But I think more important than really where do the voters go, this now sets up a major, major debate on Thursday.

HARRIS: Yes.

MARTIN: And so, we were already talking about this was going to be a big debate anyway. What we see, frankly, has been Edwards, Obama, Clinton, all sparring with one another. Obama and Clinton going after each other in the last debate in South Carolina. It was sort of saying hey, I'm the grown-up part of the party. Now you're going to see these top two candidates really go after one another. You're not going to have John Edwards attacking Obama, helping Clinton. You're not going to have John Edwards attacking Clinton, and helping Obama. They now have to duke it out, so the stakes are much really much larger for Thursday.

HARRIS: You know what, Rowland, as I've followed the debates and watched reaction to the debates, you know, there seems to be something of a consensus of opinion forming that Hillary Clinton performs perhaps even better than Barack Obama in the debate, and I want your thoughts on that, and if you're talking about Thursday being a potentially huge event, I think you're absolutely right about that. You would think if that consensus, that conventional wisdom is true, this perhaps plays into a Hillary Clinton strength. But I toss that to you.

MARTIN: No, it does. Because primarily, Obama has been on the record saying he does not particularly like the debates because they are not forums where you truly are able to expound on your issues. What you've seen is a change in how we've done these things. When the Charlie Gibson debate on ABC, he said, look I want you out of the way, talk between you candidates. The same thing with Wolf Blitzer in the last meeting, the exact same thing. I think you're going to see a lot more conversation back and forth between those two. So, you're not going to have the 30 seconds, 20 seconds, 15 seconds, red light, blue light, green light, all that kind of nonsense. So, you have that.

And so again, I would say out of the two, the person who has to have an awesome performance come Thursday is Senator Barack Obama. He has not done well. He has not been strong in the debates. I think the last one, second half, I thought he was much better than the first half than the other candidates, but, again, he has to come out huge. Because this is likely to be the most viewed debate, based upon the numbers, how they've been trending, the most viewed debate in cable history on Thursday. OK. That's first.

And so, more people are going to be watching this. Now with February 5th, 22 states, it's even larger. For Clinton, she is looking for the knockout. She wants to go for the knockout on Thursday. If she's able to dominate Thursday's debate, she dominates the headlines Friday, Saturday, and Sunday, makes it even more difficult for Obama to gain attraction. So, again that's why John Edwards dropping out raises the stakes significantly in terms of what happens on Thursday.

HARRIS: Boy, you really teed that up. I wish it were happening now. All right. Roland Martin, CNN contributor, with us. Rowland, appreciate it. Thank you, sir.

COLLINS: The Republican primary in Florida, a potential springboard for John McCain, an apparent graveyard for Rudy Giuliani's campaign. Republican insiders tells CNN Giuliani will endorse McCain later today when he formally drops out of the race. The breathtaking finish to a race that saw him far ahead one year ago.

(BEGIN VIDEO CLIP)

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: The responsibility of leadership doesn't end with a single campaign. If you believe in a cause, it goes on and you continue to fight for it, and we will.

(END VIDEO CLIP)

COLLINS: McCain now emerges as the front-runner for his party's nomination. That means he rides crucial momentum to super Tuesday, next week's all-important contest, in more than 20 states. The heat is now on. McCain's main rival, Mitt Romney.

(BEGIN VIDEO CLIP) MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I think I can stop him, but, you know, no sure thing at this stage. I think Rudy Giuliani's endorsement will help somewhat. I think it's kind of hard at this stage to say just how it's going to work, but, you know, in a two- person race with myself and Senator McCain, I like my chances.

(END VIDEO CLIP)

COLLINS: The democrats, as you know, had no delegates in the Florida primary. Nonetheless, Hillary Clinton did her best to tout her first-place finish. Barack Obama finished second, John Edwards a distant third.

HARRIS: John Edwards not the only candidate calling it quits today. Rudy Giuliani drew a line in the sand in Florida but got that sand kicked in his face. What caused his stunning collapse? We take a closer look straight ahead.

COLLINS: And beginning tonight, the candidates face off in California for the last debates before super Tuesday. Tonight, it's the republicans and tomorrow, the democrats. You can see both here, 8:00 p.m. Eastern only on CNN, your home for politics.

(COMMERCIAL BREAK)

HARRIS: OK. Your wallet and the slumping economy, the topic of the fed today. Will the bankers come through with another interest rate cut. Senior business correspondent Ali Velshi is following developments from the Chicago Board of Trade.

Whoa, where are you there, Ali? Raise your hand or something. There you are.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: I've on stripes and some polka dots so you can see me in the crowd. Traders, I got to tell you. I heard you talking to Jessica and Rowland about John Edwards and how unimpressed you were by the surprise, not being much of a surprise. So, I got to tell you, in four hours from now, at 2:15 Eastern, I hope you're going to be impressed because we won't really be surprised if the Fed decides to cut rates.

HARRIS: That's right.

VELSHI: We're expecting a cut as today's GDP numbers this morning were much weaker than we expected. You know GDP, Tony, is the measure of all economic activity, and, you know, that's the goods and services that are created. It was much lower in the last three months of 2007 than we expected. So, what happens here is the traders here trade the bonds that determines what your fixed mortgage rate is. When the Fed cuts rates, it affects the prime rate which affects your variable rate.

So they sort of do move together, but everybody here is thinking there's going to be a cut. The question is the cut a quarter of a percentage point or a half a percentage point, which is what more people seem to believe, or is it even going to be more. You remember, it's been eight days since the Fed cut rates last time, Tony.

HARRIS: Hey, you know, it's good to see you there off the bus. But it was great seeing you on the bus. I have to ask you, Ali, you know, can we get -- you think there was a chance with the cut today that we might start to get some of that 4.5 to maybe some of that 5.0 money for a 30-year fixed?

VELSHI: Very enthusiastic, because while I was on the bus across the country, when I was on the CNN "Election Express," people don't talk Fed rates.

HARRIS: Absolutely.

VELSHI: They talk about their loans. They talk about their mortgages. Now, take a look. I've got a chart there that shows you the 30-year fixed mortgage rate over a course of about five years compared to the Fed rate. You'll notice for most of that time they haven't moved together. The Fed rate went down, mortgages still stayed where they are. But look at right at the end of that chart as the Fed started cutting rates in the last few months, you started to see those mortgage rates go down.

This morning, a 30-year fixed is going for 5.6 percent. If you've got good credit, you're not getting a jumbo loan, I've heard of people who can do better than that, maybe 5.2 percent. But I would say, yes, probably what will happen is as the Fed cut, if they cut today, you'll see a little lower on the 30-year fixed. For those people who are stuck in adjustable-rate mortgages, much higher than expected. Gerri Willis has told you a number of times, it's a very good time to think about locking into a fix.

HARRIS: That's what we're looking for. We're looking for that break. We're looking for some of that 5.0 money on our 30-year fixed. That will get housing moving again. Great to see you, Ali. Thanks, Ali.

VELSHI: I'll see you in a bit.

COLLINS: Is your wallet feeling wimpy? Well, Help may be a mouse click away. We'll show you the best on-line tour to make the most of your money.

(COMMERCIAL BREAK)

HARRIS: We want to get you to the New York stock exchange now for another peek at the big board. As you can see, the Dow is down 26 points. All right, so that's off the lows of the session so far so we're bouncing back a bit. The Nasdaq is pretty much flat, actually up to the good two to three points so far. We are following, of course, all the business news today, waiting for the impact of the expected Fed rate cut, maybe 25 basis points. Financial term. Financial term. Maybe 50 basis points? We're following all those developments with Susan Lisovicz from the floor of the New York Stock Exchange.

COLLINS: Just because the stock market is in a little bit of turmoil, your personal finances don't have to be. There are Web sites to help you make the most of your money. Gerri Willis is here to sort it all out for us.

Good morning, Gerri.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi, Heidi.

COLLINS: You know, it seems like obviously it doesn't matter if you're young or old, but you should have your eyes on your retirement.

WILLIS: Yes, well, absolutely. They need to see the big picture. There are great opportunities in the market now, but you need to feel the overall picture. Check out cnn.com's money retirement planner, to ensure that you're on track for your retirement, enter your income, your savings info and other investments you have.

The Web site will show you how likely it is you'll be able to reach your goals. And you show also check our Fidelity.com. There you get tips on picking the right investments to help you generate income and for info on how to make your money last in retirement, go to AARP.com. There are lots of web tools for this -- Heidi.

COLLINS: You know there's this ominous word out there, I've bee hearing it for years, even back when I was in college from my dad. Budget.

WILLIS: Well, it's a dirty word for a lot of people, but it's a good thing to do. Check out some of budget calculators. Wesabe.com for example let's you download budgeting software. There's also Mint.com is a free Web site that will automatically pull your bank and credit data to give you a bigger picture of your financial health. You'll be able to see exactly what your spending trends are, and that could be tough news to take, but it could also help you save.

COLLINS: And speaking of college, obviously, you know, that is a very big expense and it's getting bigger every day as time goes on for people who plan to send their kids to college. Any advice on that front?

WILLIS: Well, look, families will pay more than $1,400 more for college this year than last, and that's according to the college board. There are a lot of great Web sites for this. Youngmoney.com offers one version of a college savings calculator. You will be ale to fine-tune your savings plan, view expenses by year, along with the total cost expected for each child you have.

Now, if you're interested in setting up a 529 savings plan, check out savingsforcollege.com. They have a lot of great info there. And of course, if you want info on scholarships or financial aid, the Web site is finaid.org.

COLLINS: OK. There's still a lot of people though I think out there, Gerri, that when they put all their personal information like this on the computer, they get a little nervous. Is it really safe now? I mean, just black and white pickle WILLIS: Yes you can't blame people for being nervous about that. Whenever you're putting financial information on your computer, you want to make sure your computer is updated with the most recent versions of anti-virus and anti-spy ware program. Keep your passwords in a safe place, and be sure you know how to cancel the service once you've signed up. That's always tricky. And of course, if you have questions, send them to us at toptips@cnn.com. We answer those questions right here every Friday. And we love to hear from you.

COLLINS: Yes, we do. All right, we'd love to see you. Thank you, Gerri. CNN's personal finance editor, Gerri Willis.

Good morning, everybody. 10:30 Eastern time now. I'm Heidi Collins.

HARRIS: I'm Tony Harris. Welcome back everyone to the CNN NEWSROOM.

Breaking news, changing landscape in the presidential race. John Edwards is calling it quits, and he is not alone. Republican Rudy Giuliani will announce the same grim conclusion. So, what now? Joining us is reporter Ken Vogel. He works with politico.com.

Well, it is good to talk to you this morning, Kim. First of all, you know, Rudy is expected to drop out today. And yet you look at our coverage over the last hour, and we have been talking almost exclusively about John Edwards, so-called surprise announcement that he's dropping out today. Is this further evidence, perhaps, to you, that at least the media energy right now is looking at the Democratic side of this election process right now in '08?

KEN VOGEL, REPORTER, POLITICO.COM: That's right. And also, Edwards was a little bit more of a surprise than Giuliani. Giuliani had really made it known that Florida was his last, best chance. He almost ignored the early states that traditionally get a lot of focus like New Hampshire, Iowa, South Carolina, Nevada, and really said if I don't win Florida, I'm in big trouble. Edwards, on the other hand, said he would go straight through February 5th. And so, I think it caught us a little bit more off guard. His message just didn't catch on with the big personalities in the race.

HARRIS: Where was John Edwards going to go? I mean, I don't know where he was fixed for money, but he certainly hadn't won anything. Where was he going to go? One of the things you hope for is that you run a campaign like this and you raise the issues that are of real concern to you to the national level, and you would have to say he did that.

VOGEL: He certainly did. His message was a lot about poverty, a lot about how the middle class and lower middle class was being squeezed by sort of corporate America. That caught on to some extent. There's certainly a part of the democratic base that likes to hear that message that it's important. We saw him finish second in Iowa but I think what the two big personalities in the race this year with Clinton and Obama, there just wasn't much sort of much sort of room in the bandwidth for Edwards' message. HARRIS: Hey, so, Ken, What was the problem with the Giuliani strategy, Florida or bust?

VOGEL: It was really all math. What he did is he looked at these early states, and he said, you know what, they're smaller, and also my message, my sort of position as a moderate Republican is not going to play well there; I'm focus on the bigger states, starting with Florida, that have more delegates to allocate for the Republican National Convention, and where they're perhaps more accepting of a moderate. However, this ignores the momentum that comes from wins in these earlier states and also the fund-raising that comes with that.

So, he was really running on fumes in Florida, spending $1 million a week on ads and without a win, he was just going to be unable to air a lot of advertisements in the February 5th states.

HARRIS: I'm going to dare to be a little more cynical, because I think that's just the mood I'm in this morning. He made a decision somewhere around New Hampshire, I'm going to invest a little bit of time and energy in New Hampshire. The numbers didn't respond. So, at that point he made a decision that, you know what, this presidential bid isn't going to work out so much, but you know what, I'm going to stay in a little longer, through Florida at least, because there is a huge upside to all of the free media I'm getting and a huge benefit to my company.

VOGEL: Well, that certainly is a cynical way to look at it. He was criticized a lot, if you remember, coming into the race because of his ties to this company, which he refused to fully disclose and also did not fully sever. So, there's a possibility that even if he were to have gained traction, this would have kind of come back.

But with him bowing out, I think it really helps McCain. He was kind of competing with McCain to some extent for the moderate Republican vote. McCain has it all to himself. Whereas his chief competitor, Mitt Romney, still has Mike Huckabee who's competing with him for the conservative social vote.

HARRIS: And just because I'm just a salty peanut this morning, if your strategy is to run a national campaign, Florida and then Super Tuesday, you don't perform well in Florida and you don't even stay in through Super Tuesday, what's that all about?

VOGEL: Well, I think it would have looked really bad for Giuliani if he would have lost New York, where, of course, he was mayor of New York City for two terms. So, perhaps it was kind of a pride thing where he didn't want to do that, and also I think he could, if he endorses McCain, as, you know, seems likely now, he could really establish his position, sort of burnish his bona fide, so it doesn't look all bad for him this presidential run.

HARRIS: All right. Ken Vogel, politico.com. And, forgive me, I'm just in a mood this morning. All right, Ken, good to see you. Thank you.

VOGEL: Thank you. HARRIS: And still to come, a growing disaster in China, millions trapped by winter storms, running out of food and getting desperate. We will take you there for an update, next.

(COMMERCIAL BREAK)

COLLINS: Ethnic cleansing. That's how the top U.S. diplomat for Africa characterizes the vicious cycle of killings under way in Kenya. Police and military troops are on the streets today. The police dispute reports of a shoot-to-kill order. Tribal violence has left some 800 people dead and 200,000 displaced in the past month. The attacks sparked by the president's disputed election. Washington is now considering sanctions against both government and opposition figures.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECT. OF STATE: There needs to be a political resolution of this conflict of the election. It was not one that inspired confidence in the Kenyan people, and, therefore, there needs to be a political arrangement, a political solution between the major opposition candidate and the presidents.

(END VIDEO CLIP)

COLLINS: Former U.N. Chief, Kofi Annan, is holding crisis talks between the two political leaders, but he says it could take a year to work through.

HARRIS: The growing desperation in China, winter storms trapping millions in a travel nightmare. But right now, some people stuck in a train station may be getting some help.

CNN's Hugh Riminton has been following this story from Guangzhou in Southern China.

(BEGIN VIDEOTAPE)

HUGH RIMINTON, CNN CORRESPONDENT: There can be no question now that this weather emergency that continues to grip China has the total attention of the senior-most ranks of the government in Beijing. One effect has been for them to deploy 1.5 million troops, and soldiers and police across the country to try to restore order, to try to open up lines of communication. They're working hard at that, but they have had some successes.

At the Guangzhou train station, roughly half a million people have crowded in at various times in the course of the past week, often in a fairly disorderly state. There have been a number of quite deliberate police moves in the last few hours in which they have cleared many of these people away, cleared them into the train station where they have an expectation that trains will be there to carry them on elsewhere.

They still have huge challenges, however, ahead of them. The weather is not expected to improve, and the real crowds that are leaving their factory jobs to try to get home for the lunar new year are only really now coming through. Big tasks ahead, but plainly an attempt to get on top of it by the authorities here.

Hugh Riminton, Guangzhou, China.

(END VIDEOTAPE)

(WEATHER REPORT)

COLLINS: Health care crisis. Your insurance may not cover you when you need it most. Dr. Sanjay Gupta investigates.

(COMMERCIAL BREAK)

(BUSINESS HEADLINES)

COLLINS: I don't want to start a fight or anything, but it's a half a percentage point and it's a surprise that John Edwards is out of the race. There you have it. John Edwards over and out. He will announce he is ending his presidential campaign. We'll have live coverage on CNN.

(COMMERCIAL BREAK)

COLLINS: Focusing on your health. Almost 50 million of you have no health insurance. But if you think having insurance will solve all of your problems, well, wait until you see what happened to this family. Here's CNN's chief medical correspondent, Dr. Sanjay Gupta.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Are you OK, mommy?

UNIDENTIFIED FEMALE: I'm OK. Are you OK?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Dawn and William Zeigler were living the quintessential American dream as real estate brokers in Las Vegas. Plenty of money, nice houses, fancy cars. And then Dawn got pregnant with twin girls.

WILLIAM ZEIGLER, FATHER: I was excited. I was excited, until we found out it was twins. Then I was nervous.

GUPTA: But Brooke and Alexa arrived early, too early, and little baby Brooke was in serious trouble.

UNIDENTIFIED FEMALE: When she came out, she was blue.

W. ZEIGLER: And they had to resuscitate her. We didn't know that we'd have to have surgery with -- you know, within ten hours.

GUPTA: And then another surgery. And then another. Over the next 18 months, she had nine operations, including two open-heart surgeries. She was airlifted to hospitals in California and Indiana. The Zeiglers never thought about the cost because they had insurance, excellent health insurance.

(on-camera): Did you worry about it at all?

UNIDENTIFIED FEMALE: Not at all.

GUPTA (voice-over): And yet today, this well-to-do couple is now broke and filing for bankruptcy. Insurance paid for a while. But there was a lifetime limit of $2 million for Brooke's expenses. That may sound like a lot, but it was nowhere near enough.

W. ZEIGLER: Especially when some days it was $30,000 to $40,000 a day to keep her in the ICU. You know, the days of the operations, they were $100,000 days. In the end it ended up costing us everything. We're lucky to still have our house and our cars, but that's about it.

GUPTA: But that wasn't the worst of it. After months of intensive care, Brooke's heart finally gave out. Brooke Zeigler was just 18-months-old when she died. A year later, a bill arrived in the form of a legal judgment.

(on-camera): You owe Riley Hospital $700,000?

W. ZEIGLER: $708,000. They just sued us for unpaid medical expense.

(END VIDEOTAPE)

COLLINS: Boy, oh, boy.

Dr. Sanjay Gupta is joining us now and first of all, you just can't imagine anything worse than having a sick infant and then ultimately losing the child. Now, they're having to deal with this legally. Boy, it's just -- it seems like too much.

GUPTA: Right. And, you know, because she was sick almost since the moment she was born, they really had no other options in terms of getting additional insurance, because even literally at two days of age, Brooke already had a pre-existing condition. The cost, and they will tell you this, because I spent a lot of time with them, will say the cost of this pales in comparison to what you just -- to the losing of their daughter. But now they're going to lose a lot of the other aspects of their life, as well, as a result of these medical costs.

COLLINS: Boy, it's just unbelievable. It's a terribly sad story but one that really needs to be talked about because their biggest assumption, the fact they had health insurance and they thought they were covered.

GUPTA: Yes and they were, to a certain extent. But this is where it gets interesting, right, because we talk a lot about things in sort of the black and white, uninsured versus insured. There are people who are underinsured and then there are people who actually think they have good insurance but it's simply not enough if you read the fine print. As it stands right now, you know, medical bills are the Number 1 cause of bankruptcy in this country. And about a million people filed for bankruptcy in 2006. So, you get an idea that besides -- even if you have insurance, you can still end up in financial dire straits.

COLLINS: Boy, it's unbelievable. You know, we've just announced today, here, that John Edwards will be pulling out of the presidential race. Healthcare certainly something that he was talking about.

GUPTA: Right.

COLLINS: Does this change the race now among Democrats or --

GUPTA: I don't think so really. I think -- I think Senator Edwards' plan and Senator Clinton's plan are very similar and Senator Obama's plan as well, to some extent. They all talk about universal healthcare so that everyone would be ensured. The big difference I would say, between Senator Clinton and Senator Obama's plan, is that Senator Clinton says look, if you can afford to buy it, you should buy it. And if you don't, we're going to penalize you. There's mandates.

Senator Obama says, look, I mean, I don't believe that people aren't buying health insurance. They can't afford it, is what he says. We know from the investigating that we did for the documentary that about 18 percent of people who don't have healthcare insurance in this country right now make over $75,000 a year. You know, it is what it is. They make that much money. Whether they can or cannot afford it, it's hard to say. But some would say, look, if you can afford to be buying it, you should be buying it. We need to make sure everyone in this country is insured.

COLLINS: Maybe state by state.

GUPTA: Maybe, maybe.

COLLINS: Not that I'm running or anything, but possibly that would be a better route.

GUPTA: It is so complicated. It took us months to put this together, and I hope that people will be able to learn something from it.

COLLINS: Well, they will, I am sure, especially if they remember to watch -- want to give you the details on this so you don't miss it. Make sure you catch Dr. Sanjay Gupta's investigation, the crisis in healthcare and insurance. It is the latest edition of CNN's "Broken Government" series called "Healthcare: Critical Condition," tomorrow night, 11:00 Eastern, right after the CNN political debates.

HARRIS: And still ahead, fearing the worst, an officer watches a fiery collision on the train tracks.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It goes through your mind, you know, how many people were in that car? (END VIDEO CLIP)

HARRIS: Question answered and a life saved by a good summartitan.

(COMMERCIAL BREAK)

COLLINS: The Middle East hit by a rare winter storm and unusually chilly temperatures. In Israel, bad weather shut down schools, businesses and public transportation. But it didn't necessarily keep people inside. They usually only see one or two snowstorms a year, but the snow rarely sticks. It is the same story across other parts of the Middle East. And most cities aren't prepared to handle the weather. Forecasters say up to eight inches of snow fell in Jerusalem.

HARRIS: Wow. And good morning again, everyone. You're with CNN, you're informed.

I'm Tony Harris.

COLLINS: Hi there, everybody. I'm Heidi Collins.

Developments keep coming into the CNN NEWSROOM on Wednesday, the 30th of January. Here's what's on the rundown.

Democrat John Edwards, Republican Rudy Giuliani, both presidential candidates about to add former to their titles.

HARRIS: Anticipation building for another interest rate cut today. The Fed's decision and what it means for your wallet.

COLLINS: Has one of Africa's most stable democracies descended into ethnic cleansing? Kenya, on the brink, in the NEWSROOM.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxantshop.com