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Terror Arrests in France; Student Protests in London; "Thrill Kill" Murder Conviction; London Protest Turns Violent; Plans to Slash Trillions From Deficit; Elizabeth Smart Ends Testimony; Royal Wedding Rumors

Aired November 10, 2010 - 16:00   ET

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

BROOKE BALDWIN, CNN ANCHOR: And top of the hour, here we go. I want to welcome in the men and the women watching us now on American Forces Network all around the world.

First up: a frightening disclosure today for us here in the U.S. That package bomb sent from Yemen last month, it was timed to explode in a plane over the East Coast of the United States -- this revelation coming in today from the Scotland Yard.

The bomb was discovered in England and the timer indicated it would have detonated in six hours. That plane would have put the -- would have put the plane over the Eastern Seaboard.

Next, we're also following some developing news out of France, the French government reporting that officials there have arrested five people suspected of plotting terror attacks, specifically suicide attacks. We're told they were planning to strike Paris and one was -- quote -- "prepared to die." We're following it closely, updates as soon as we get them.

Next, the lockdown of that Broward County school system today in Florida finally over. Here's what we know. A woman called into a radio station, warned that her husband planned to shoot up a school. Police say they then got an e-mail warning -- quote -- "Something big will happen at a government building" -- end quote.

So that sparked, as you can imagine, a massive full-scale lockdown of hundreds of schools. But now we are hearing that lockdown is officially over. The threat is -- quote -- "diminished," but police are still trying to figure this one out. They're investigating. But kids are being let out at normal times.

Next: promising job numbers from the Labor Department today. Take a look at these numbers with me. New jobless benefits claims, they are down to the lowest point since July 10 -- 435,000 people filed first- time claims last week. That's down 24,000 over the previous week.

Next, remember the bill to raise that retirement age that drove hundreds of thousands of protesters into the streets of France? You remember that? That just became law. French President Nicolas Sarkozy signed the pension reform bill today. It raises the minimum retirement age in France all the way from 60 to 62. The French public, they hate it. President Sarkozy admits it is a difficult step, yes, but he says it is necessary in order to cut France's deficit.

Next, Secretary of State Hillary Clinton today said that the United States is deeply disappointed with Israel's decision to build new housing units in sensitive areas of East Jerusalem.

In fact, Clinton went on to say that Israel's announcement to build new homes is -- quote -- "counterproductive to getting the two sides to resume peace negotiations."

Next, Boeing has canceled test flights of its 787 Dreamliner for now after one made an emergency landing in South Texas. The pilot reported some smoke way back in the back of the cabin during a test flight. Fortunately, no one was hurt. The company trying to track down the problem now. Several dozen Boeing employees did escape after the plane landed. The fuel-efficient next-generation plane has been plagued by production delays and design modifications.

Next, check out this driver in North Carolina. You see what she's doing? Wait for it. You see her left hand? That's a phone, folks. Texting while driving a school bus, and she was caught on camera doing it three times in one day. In one case, it appears she's texting during the afternoon bus run with some 20 children on board. See the black? We're blacking out the kids' faces. School officials in Rockingham County say they're not sure if she was writing a text or reading one.

Folks, does it matter? Either way, she's been banned for bus drive -- for bus drivers since 2007. The driver has been charged with a misdemeanor and resigned as a bus driver, but she is keeping her part- time school nutrition job. There is no law against texting there.

Let's take a look at this. Fire, graffiti, breaking glass here, massive protests (INAUDIBLE) violence and chaos. That is London. This is all over college tuition. Some of them even broke into the headquarters of one of the political parties there. We will take you ahead to the scene in London. That's ahead.

And what would you do? Imagine, you're on a cruise. You are thinking you're headed to a seven-day vacation along the Mexican Riviera, and you're stuck. Apparently, you're eating Pop Tarts and Spam right about now. But that is not all. Coming up next, I talk to a passenger stuck on that ship. Wait until you hear what he and his girlfriend told me.

Be right back.

(COMMERCIAL BREAK)

BALDWIN: So, we still have this crippled cruise ship. It is stranded off the coast of Mexico, you know, the one with nearly 4,500 people on board. Well, at least the good news here is it is on its way back to the United States.

In fact, according to the U.S. Coast Guard, tugboats have been joining the ship here to tow it to San Diego, expected to arrive some time tomorrow. And, as the ship is getting closer to the coast, passengers are increasingly able to receive intermittent cell service.

So, earlier today, I was able to talk to, key word, intermittently a couple on board the ship. Here is just a piece of our conversation.

(BEGIN VIDEOTAPE)

BALDWIN: How far out at sea were you when suddenly the power went out?

DAVID ZAMBRAND, PASSENGER: We had been traveling for at least 12 to 14 hours overnight. We had left, I believe, the port in Long Beach some time around 6:00 p.m. on Sunday night. We had traveled all night long. And around 6:00 a.m. on Monday morning is when we started smelling the smoke.

BALDWIN: So you did smell smoke?

ZAMBRAND: Smell it and we saw it. It actually was towards the rear of the ship and we were able to see it coming out of the sides, kind of billowing out of the sides. It was very, very strong.

BALDWIN: Were you frightened that the point in time? Was the crews communicating with the passengers what was going on? Were you in the loop?

ZAMBRAND: Actually, they came on the air, on the public address system quite quickly in the morning, woke everybody up and said, you know, there is an issue. They said there was an electrical fire, but there were no flames, is what they reported to us, that there were no flames. It was just smoke.

And they had stopped the ship in order to find out what the problem was. And it took them most of the day to get rid of the smoke from the engine room. The supplies were delivered yesterday from the USS Ronald Reagan. They (INAUDIBLE) in 20 pallets full of supplies on to the ship.

And they were distributed throughout the ship and they are giving them out as they needed, but it was just water and (INAUDIBLE) and things like that.

BALDWIN: So you said for the most part it seemed organized. But just tell me, what's the sense been? I'm sure the passengers have been talking. Everyone has, I imagine, been mulling about. Has there been a sense of panic? Have people been angry? Give me the flavor on the ship.

ZAMBRAND: People have mostly been disappointed, angry. A lot of first-time cruisers were on the ship. A lot of people who have never been on a cruise before came on the ship. And they were upset at the fact that they -- this is their experience.

So a lot of them are just frustrated, frustrated with the whole process, just how they're going to get off the ship, what is going to happen now. A lot of times, they go to the information desk, but the information desk doesn't have the information that they need. They have to get that directly from the captain and from the cruise director.

So, everyone is always waiting for the announcements, which come usually every hour or so, and that fill us in.

BALDWIN: And, David, what about you personally? I guess, what was your -- if you can cite one moment or one thought you had that was kind of like your most frustrating or your lowest moment, what would that be?

ZAMBRAND: That was actually at the point when I first smelled the smoke early in the morning on Monday morning. And I thought to myself, OK, I smell smoke. That's not good. The ship has stopped.

I started grabbing a backpack that I had brought with me and started packing the essentials in that backpack, because I thought, if we had to go to the muster station to board the lifeboats, then I wanted to be ready to do that.

My girlfriend and I were both kind of waiting, wondering what the smoke was coming from. And so I told her, I said, you have to get all your things, get whatever is important to you ready. And so we started getting ready, but we didn't hear any general alarms, so we didn't -- we thought we would wait until they came on the public address system, which they did, actually.

They came on the public address system in about 20 minutes after the smoke started coming out, and they started announcing and said there is nothing to worry about, there's nothing to be alarmed about. There's no fire.

None of the doors closed automatically, which they normally do, like they're supposed to do, whenever there is a fire on this ship. And actually the Coast Guard was here today testing all the doors.

BALDWIN: What was worst part?

LENORA CHAVEZ, PASSENGER: I think the stench.

BALDWIN: The stench?

CHAVEZ: I think the smell, yes. And it is worse today than it was yesterday. And the people are throwing up, kids. Uh-huh.

(CROSSTALK)

BALDWIN: All over the smell, because the toilets couldn't flush?

CHAVEZ: Yes. This whole boat really stinks.

(END VIDEOTAPE)

BALDWIN: Can you imagine, the whole boat really stinks because for a while they couldn't flush the toilets? Imagine having one of the rooms. You don't really have a window. You just have to keep your door open. She told me that is the worst part of it right now. Final note on this couple. And they were so good to join me with that intermittent cell phone service. I also asked if they were going to be taking advantage of Carnival's offer, not only, of course, getting the refund for this would-be seven -- trip along the Mexican Riviera, but also taking another cruise. And they said, yes, they definitely will.

The Pentagon is now weighing in on the missile mystery. But it doesn't really clear anything up -- coming up next, the latest on what didn't cause the plume and perhaps a clue about what did.

There aren't any engraved invitations yet, but there are signs from Buckingham Palace that a royal wedding this way comes, perhaps. We will tell you what Prince William and Kate Middleton have been up to. Stay there.

(COMMERCIAL BREAK)

BALDWIN: Welcome back to the NEWSROOM.

Is it a missile? Is it a plane? Two days after the mysterious contrail appeared over the skies of Southern California -- here it is -- the Pentagon says this is coming from a plane.

But people are still asking, what is it? What is it?

Let's ask Chris Lawrence. He is at the Pentagon for us with the latest explanation.

So, Chris, what is it? Do we have a definitive answer?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: I was afraid you were going to ask me that question, Brooke.

(LAUGHTER)

LAWRENCE: I have been staring at this thing now for two days straight, like a lot of people here at the Pentagon.

And, you know, what really kicked all this off was the fact that no one -- you know, up until just a few hours ago, no one could definitively give any answer as to what this was.

You know, some very respected people, professors of science and space exploration at MIT, thought for sure this was some sort of rocket or missile. Looked at the weigh the contrail twisted and curved and said, well, that's very consistent with a missile. The Pentagon now is saying, no, it is just a condensation trail from a plane.

Now, one of the people who caught this sort of early on with a very good initial guess was John Pike, he's an analyst at Global Security. Listen to what he said yesterday.

(BEGIN VIDEO CLIP)

JOHN PIKE, GLOBALSECURITY.ORG: It is clearly an airplane contrail. It is an optical illusion that it looks like it is going up, whereas in reality, it's going towards the camera. The vehicle at the tip of the contrail is moving far too slowly to be a rocket. Since the contrail is eliminated by the sunset, you're able to see hundreds of miles of it all the way to the horizon.

(END VIDEO CLIP)

LAWRENCE: But, again, a lot of people with, you know, just as good of a qualification thought for sure that this was some sort of rocket missile -- something launched inadvertently perhaps from a sub.

Another theory even said that it was the U.S. military launching something as sort of a show of force to, say, North Korea, while President Obama travels in the region.

BALDWIN: Huh! So, I guess the long answer is we don't fully know for sure yet. And then I think one of the criticisms including from John Pike himself, as you know, is he said, look, some of the criticism has been very much so directed at the Pentagon saying, how in the world we're paying all these guys so much money, they're the government, they're the experts, how can they not readily identify what the thing was in the sky? Is the Pentagon at all responding to any of that criticism?

LAWRENCE: Yes, Brooke. You know, we take things to Pentagon officials all the time. You know, hey, I heard this about Afghanistan, or we heard Secretary Gates is going to decide this, and when they want to shoot something down, they do so very forcefully. And a lot of people said, look, they could have just come right out and said, look, that's a plane, you idiot. You know, stop making such a big deal about this.

But they didn't. They really left the door open for a lot of interpretations because they couldn't exactly pinpoint what it was.

You know, the FAA had to go back and do radar replays. NORAD had to check with a lot of systems to make sure no missile was actually fired. They eventually did that. But, again, you're talking almost, you know, 48 hours later.

BALDWIN: Right. So, finally, Chris, we may never know definitively what that thing was.

LAWRENCE: We've got a better chance of knowing what it was not --

BALDWIN: Got it.

LAWRENCE: -- more so than ever really exactly figuring out what it was.

BALDWIN: There you go.

LAWRENCE: Does that make sense?

BALDWIN: Kind of, sort of. Kind of, sort of.

LAWRENCE: Yes.

BALDWIN: Chris Lawrence, good to se you. Thank you.

Coming up next: a crime so senseless, police called it a "pure thrill kill." The bizarre story, it involved a machete and a survivor who saved herself by playing dead.

We'll be right back.

(COMMERCIAL BREAK)

BALDWIN: It was a brutal home invasion that shattered the sense of security in a New England community last year. It's not the one you're thinking of in Connecticut. This is a separate one. This is a mother who was hacked to death with a machete while her daughter survived a brutal stabbing. Now, a 19-year-old man will spend the rest of his life in prison for murder.

CNN correspondent Deborah Feyerick has the story of a senseless crime that officials called a thrill kill.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): The judge did not mince words, sentencing Steven Spader to life in prison with no parole, for a horrific senseless murder that shocked a small New England town.

JUDGE: I could go on for days and days and days about the depth of your depravity, but it is sufficient to say that you belong in a cage.

FEYERICK: It happened October 2009, on a dirt road as the leaves were changing. A "thrill kill" prosecutors called it for 18-year-old high school dropout Steve Spader and three friends, Christopher Gribble, Quinn Glover and William Marks, who allegedly wanted to kill to see what it felt like.

Prosecutors described the teens as followers of the hardcore horror rap group Insane Clown Posse and claimed they formed their own brotherhood, the Disciples of Destruction. Court documents show they took a loyalty oath, methodically gathering knives, a machete, ax and gloves to commit the crime.

(on camera): The accused attackers made their way up this dirt road in the dead of night, choosing a home that happened to belong to the Cates family. It took them more than 30 minutes to find a way to break in. Once inside, they made their way searching through the home, until they got to the last room where Kimberly Cates and her daughter Jamie were sleeping.

(voice-over): Husband David was away on business. And the alarm system was broken. Spader allegedly laid out the events of the grizzly night himself, in a handwritten note, prosecutors say he called a bed time story to impress fellow inmate Chad Landry. Landry read it aloud in court. CHAD LANDRY, PRISON INMATE: Swinging the machete down on the mom, she screamed, then kind of gargled, then made some other weird noises. I told Gribble to stab her, just to be sure. He did.

FEYERICK: He refers to Gribble, this man, Chris, a co-defendant who was 19 at the time.

QUINN, DEFENDANT: They were all covered in blood.

FEYERICK: Spader's two other accomplices cut deals testifying what they saw and heard as they stood outside the bedroom door.

WILLIAM MARKS, DEFENDANT: Steve Spader walked up to her and hit her in the head with the machete.

QUINN GLOVER, DEFENDANT: I heard cries for help, begging, no, no.

FEYERICK: Kimberly Cates died in her bed; 11-year-old Jamie stabbed 15 times fell near the sliding glass doors and lay still, pretending to be dead.

GLOVER: She was on the floor, tangled in the curtains.

FEYERICK: After the attackers left, Jamie crawled to the kitchen and called 911.

(BEGIN AUDIO CLIP)

911 DISPATCHER: What's your emergency?

JAMIE CATES, VICTIM: Hello? Somebody robbed my -- somebody robbed our house.

(END AUDIO CLIP)

FEYERICK: What makes this crime even more difficult to comprehend is how normal the accused teenagers appeared to behave in the hours following. Prosecutors say Gribble spent some time doing homework before leaving with Spader to meet up with other friends at a nearby mall.

The two accused thrill seekers seen here just hours after the murder selling jewelry taken from the Cates' home.

Prosecutors say the crime was never about money, it was about the thrill. Spader not only bragging to friends, but also writing about it, calling it, quote, "such an adrenaline rush."

The verdict: little consolation for David Cates and his daughter.

DAVID CATES, VICTIM'S HUSBAND: Kim and I had dreams, hopes and aspirations like any family, and all of those are now shattered.

FEYERICK: Deborah Feyerick, CNN, Nashua, New Hampshire.

(END VIDEOTAPE) BALDWIN: Awful.

Nine months of hell, that is how Elizabeth Smart described her kidnapping in court today. Her testimony, it's been tough, defiant. Today, day three for her on the stand -- the most emotional day yet. We're going to hear more from that and what she had to say coming up next half hour.

Meantime, Jessica Yellin has been tracking the political news from Washington, all the way to her home state of the West Coast in California. We'll get the latest from Jessica when we come right back.

(COMMERCIAL BREAK)

BALDWIN: CNN has all your latest political news with the best political team on television -- easy for me to say.

Jessica Yellin is out in Los Angeles.

Jess, good to see you. What's crossing right now?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: The big news today, Brooke, is that the deficit commission that President Obama convened has come out with its recommendations and they are leaping on to the third rail of politics, suggesting the usually unthinkable, which is helping to reduce the deficit by reducing the growth of Social Security. It's one of those things politicians rarely like to take on.

One of the proposals is to bring down the growth of Social Security both by reducing the increase in the cost of living adjustment every year -- that's when they adjust it for inflation -- and also gradually increasing the retirement age to 69. They also suggest about $200 billion in cut to defense and domestic spending and some changes to the tax code.

As you might guess, this is all being received with praise and criticism and it is a long way from this proposal to any kind of reality. So, we'll see where that one goes.

One of the big new changes, Brooke, you know, when the Republicans take over control of the House next year, Speaker Boehner says he's going to do one big thing differently, he says he will fly home to his district commercial. OK. Why does this matter? It's because the Republicans were very outspoken critics of Nancy Pelosi, who flew -- who has flown from D.C. to her district in San Francisco using military aircraft.

Now, Pelosi has explained she does that because the speaker of the House is second in line to the presidency in a crisis and security has demanded private military planes, and you have to fly in the military, you know, fleet of planes to get that kind of protection. Even the sergeant-of-arms defended her, a neutral person in Congress, and Speaker Hastert a Republican before her, did the same thing. But Boehner says no, he's going to be different, he'll find a way to fly commercial and his security guys are OK with that. We'll see how that one goes.

And then, of course, Sarah Palin spoke again last night, Brooke, and she has been out and about commenting on so many things. And last night, she once again flirted with the idea of running for president.

Here's how it came up -- we always, you know, wonder about this one. She was introduced by a strong by one of the students. And after the song, she said to student, "Hey, how would you like to sing at an inauguration?" And she goes, "Well, not necessarily mine."

And then the speaker asked her if she's going to run and she said she'll give it prayerful consideration, but if she does -- listen to this -- she says, "I'll be in it to win it."

You know why that's meaningful, because that's how Hillary Clinton introduced her bid for presidency when she said she's running, she said, "I'm in it to win it." So, she's borrowing that line from Hillary Clinton, we can only read the tea leaves and guess what that means.

BALDWIN: I like how you put that.

YELLIN: We'll follow this one. Yes, we'll follow this one for many months.

BALDWIN: Flirting with it. Of course, we will. I guess, if she doesn't, she would be first to have her own reality TV show, yes?

YELLIN: Yes, I think you're right.

BALDWIN: I think I'm right.

YELLIN: Yes.

BALDWIN: Jessica Yellin, we'll be following it right along with you. Thank you. We'll get another political update next half hour, of course, here on CNN.

And then finally, I know, this is kind of dorky. This is an ambition. I woke up this morning and this is the first thing I thought about, this big interview that I have coming up about this possible impending royal wedding. Is Prince William close to popping the question? Might a royal wedding be on the horizon? We get a royal watcher talking to me live with all the scoop. That is next.

(COMMERCIAL BREAK)

BALDWIN: Before we talk about that royal wedding, I want to show you these pictures. This is just in here to CNN. You're looking at, obviously, a whole lot of smoke, a lot of firefighters fighting this one. This is Rankin, Pennsylvania, just outside of Pittsburgh. And as you can see, it's a bunch of homes. It's what they call kind of row homes. This was taped from earlier.

So, you can see how fiery really this thing was. Now, what we know there are actually ten units as part of this whole row, six of them on fire right now. One person has been taken to the hospital for some minor burns. Two firefighters also treated on the scene, and as you can tell here, this fire is a multiple alarm fire. Pictures out of Pennsylvania.

Now to this, a secret pact, an invitation to join the queen for her annual Christmas family lunch, a new wardrobe, royal watchers say add all these pieces up and that smells like a royal engagement, very soon, for Britain's Prince William and his long-time girlfriend, Kate Middleton. I want to bring in Katy Nicholls. He's been following the royal family for a decade. She is a royal correspondent for the mail (ph) on Sunday and author.

We have the book cover, but I also got it yesterday and was flipping through it all last night. This is "William and Harry: Behind Palace Walls." Kate, great to have you on. Let's just get right to it out of the gate. What are you hearing? Will they or won't they?

KATE NICHOLL, AUTHOR, "BEHIND THE PALACE WALLS": Well, look, Brooke, they are definitely going to get married, these two. All the signs that you said earlier are that it is going to happen. We've seen her at Balmoral with her parents. We know that she's probably going to be going to Sandringham at Christmas. She is having a (INAUDIBLE) trade made for her. All of these things are just saying engagement is imminent. So, it's either going to be just in time for Christmas or I'm thinking maybe New Year, but it certainly looks like it's coming.

BALDWIN: Really?

NICHOLL: That's the way it is looking to all of us.

BALDWIN: She's looking at all of us, and quickly, that's amazing. We played the if game, and we say if and when they get married. What kind of wedding, Kate, would we expect to see? Will this be a subdued thing like I think they want or are we going to see this massive wedding like we saw with Diana?

NICHOLL: Well, I mean, it's just inevitable, isn't it? But that's going to be all of that comparison with Diana and Charles back in 1981. But William and Kate is very different. You look at how they live their lives now. They like to be below the radar. They're very private. They go to such extreme lengths to keep away from the cameras.

So, they certainly want a low key wedding. And I think we'll see a compromise. So, I don't think it will be some host (ph), but it might well be from Georges chapel in Windsor which I think would keep them happy. So, I know they'd like to get married in Scotland, but whether or not, they'll be able to, I'm not so sure. I think England would be too happy about that.

BALDWIN: I don't think so. And we are looking at pictures. We all remember sitting and watching the big wedding, Diana and Charles' wedding. And I'm just curious if Kate if and when this happens would wear any of Diana's jewels or her tiara. Do we know?

NICHOLL: Well, there has been a lost speculation on that. And of course, Princess Diana would have left heirlooms behind for Prince William. There has been speculation that possibly she will have Diana's wedding ring. Again, you mentioned the tiara as well. So, it's suddenly (ph) not unheard of for the royal family to pass things down. I think she will certainly wear something, and whatever she wears, she's going to look fantastic on her big day.

BALDWIN: Let's look back, though, because in your book, you talk, you know -- obviously, the relationship went up and down. And in fact, you write about in November of 2006, just before William graduated from Sandhurst, Kate was invited to Sandringham for the royal family's traditional Christmas lunch. The first time a girlfriend had received such an invitation.

So, that was obviously a huge deal and a huge sign for her, but then he in turn, last minute, pulled out from going to her home to celebrate Christmas with her family. So, this is, obviously, not entirely a fairy tale.

NICHOLL: No, and you're right. It has been ups and downs. But listen, who's been in a nine-year relationship, and it hasn't had ups and downs. I think there were times that you're referring to my book is when Prince William, I think, was just feeling very claustrophobic. He just thought that his focus needed to be on his military career and they ended up splitting up shortly after that. But they got back together, and I think they're going to be very, very strong together.

BALDWIN: Let's talk about how they got back together. And you also wrote about they're in the Seychelles. This was August of 2007, they've broken up. They got back together and they made this pact.

NICHOLL: Yes.

BALDWIN: Tell me about the pact you write about under the moonlight.

NICHOLL: Well, you're absolutely right. It was in the Seychelles. You remember that we saw Kate at the Diana concert. She was standing, dancing and just after that, William whisked her away. They were on a private island, and that's where he basically promised her that she was going to be a part of his future. That she hadn't waited for nothing. That it was all going to end in a wedding, but he just needed time.

At that stage, of course, he hadn't finished his military training. So, it was a case of waity Kate, but she's waited, and I think she's played the waiting game so very well. I take my hats off to her. And it all looks like it's going to work out for her.

BALDWIN: The waiting game, being patient, will he, won't he pop the question. And then also both of them, also, sort of tend to shy away from the spotlight. I imagine, you know, it must be difficult to a degree to be so public, so out there. In fact, you write in your book about how William actually has been seeking advice from Queen Elizabeth.

NICHOLL: Yes, absolutely. I mean, Prince William, this is something that I talk about a lot in the book, has a really close relationship with his grandmother. And he takes her counsel, her advice in so many different aspects of his life. And he does, you're right, he does like to keep a low profile. I mean, they're currently living pretty much as man and wife on an island in Anglesey just off of Wales. And they enjoy absolute peace and privacy.

They can do their own thing. And they're really, really very happy. And people really say to me why has it taken this long? Why has he made her wait for so long? And the reality is that they would never have this level of freedom that they enjoy now if they were engaged. As soon as this announcement happens to both of them, their lives are going to change forever.

BALDWIN: And really, just final question, Kate. How might we be waiting if we follow the royal family just as you do for this big announcement? We know Queen Elizabeth now has a Facebook page. Tell me the world won't find out on Facebook.

NICHOLL: Well, wouldn't that be a wonderful way of announcing it. I somehow don't think that's going to happen, but let's just hope that, you know, the New Year brings with it a great announcement. And I guess I'm putting my bets on a July wedding. So, watch this phase (ph).

BALDWIN: July, we'll be watching and waiting along with you. Your book again, "William and Harry: Behind The Palace Walls." Kate Nicholl, thank you.

NICHOLL: You're welcome.

BALDWIN: Take a look at this. Just like Americans, politicians, British leaders grappling with budget cuts. And this is how students are responding. You see them all chanting, protesting, vandalizing. They actually stormed a building today. It has been quite frankly chaos in London. We'll bring you the highlights. Some may say the low lights, next.

(COMMERCIAL BREAK)

BALDWIN: Thousands of students taking to the streets. They're marching, they're chanting, all of this over proposed tuition hikes. Sound familiar? Not talking about American students this time. This story, these pictures developing in London today. Folks, this is all a show of resentment at the government's austerity plan. There are essentially measures that would triple tuition fees and cut education funding.

Today, one group actually smashed glass. They lit flares. There they go. And wrote graffiti. All of this, this is the headquarters of the conservative party in London. And just last hour, I spoke with CNN's Atika Shubert who in the thick of things in London.

(BEGIN VIDEOTAPE)

ATIKA SHUBERT, CNN CORRESPONDENT: It started earlier this morning with a massive protest, about 40,000 student demonstrators is the estimate. And what they're protesting, of course, is that hike in tuition fees. Tuition fees are due to triple. And a lot of students say they simply can't afford it. So, there was a lot of anger on the streets, but nobody expected it to turn as violent as it did.

BALDWIN: Atika, answer me this because I know we've been talking, and we've seen these pictures where they crash through the conservative part headquarters. But correct me if not, it was the liberal Democrats, you know, led by Nick Clegg who signed the pledges not to raise the fees if elected. So, my question is why are the students attacking conservative party headquarters?

SHUBERT: Well, I mean, this was basically on the root for the protest. So, it's one of the reasons why the protest was organized around here, went past the prime minister's office, went past to conservative party headquarters. So, the point was to make a statement. But nobody anticipated that it would turn as violent as it did. And you make a good point. The anger wasn't directed just at the conservative party. A lot of it was at the liberal democrats.

They campaigned not to raise tuition fees during the elections and a lot of the students feel betrayed by that. So, there is an equal amount of anger directed at the liberal Democrats, but it just so happens that this conservative party headquarters, right on their route, and they simply smashed their way in to make a violent statement.

BALDWIN: They smashed through. They made a violent statement. It looks for now, looking over your shoulder, looks pretty clear. So, I'm assuming the students are out of there for now. Really, Atika, final question, where do we go from here? They've left a lot of destruction in their wake here through the protesting over these proposed tuition hikes.

So when do we know if the proposal actually might go into effect and what about, you know, what about the students? What about the government here? How do they respond?

SHUBERT: Well this is the question -- how is the government going to respond to this? I mean, the government has essentially said that it just cannot afford the kind of funding that it had in the past, that it's inevitable that these kind of tuition hikes are going to happen. They slashed university budgets by as much as 40 percent.

It's a recession. This is a result of it. That's what they say.

But what the students say is that there is a better way to do that. They understand that these cuts need to be made eventually, but it just can't happen as suddenly and as quickly as it did. That's what the students are saying.

Now, how will the government respond to this? We'll have to wait and see.

Actually, David Cameron, the prime minister, is actually away on a trip to China at the moment. So he's missed all of this excitement from the students back home.

(END VIDEO CLIP)

BALDWIN: Sorry. I'm laughing because of a guest who is about to walk in. We're very excited.

Here in Atlanta, a huge megastar gracing our own set. It is the Wolf Blitzer in the house.

So why is Wolf making a trip down South?

WOLF BLITZER, CNN ANCHOR: Nice couch you've got here.

BALDWIN: Please, take a seat.

BLITZER: Beautiful.

BALDWIN: Mi casa es su casa.

BLITZER: Beautiful stuff you've got here.

BALDWIN: Good to see you.

BLITZER: Hey.

BALDWIN: Hey, we'll be right back with this guy, next.

(COMMERCIAL BREAK)

BALDWIN: In a surprise move today we got a look at a new proposal, one designed to curb growth in U.S. debt. The report recommends spending cuts, as well as tax reforms, among other things. You know, all as a way of reducing the deficit by $4 trillion over the next decade.

Wolf Blitzer has moved "THE SITUATION ROOM" from D.C. to Atlanta.

How are we doing?

BLITZER: This is lovely. This is the first time I've been in your studio.

BALDWIN: We've got pretty good digs. The digs are nice.

BLITZER: This is great. This is fabulous. It's really good.

I remember the old -- I've been with CNN for 20 years-plus.

BALDWIN: A little while. This is a far cry from that desk, huh?

BLITZER: Yes, this is a lot better than it used to be.

BALDWIN: So welcome to Atlanta.

BLITZER: Thank you.

BALDWIN: Welcome to our new set.

And before we explain to everyone why you're here, we'll talk politics first.

Talk to me. Is this thing, this proposal that we got a look at today, is it DOA? Is it dead on arrival?

BLITZER: You know, there are 18 members of this commission, and you need 14 for them to get what they call a supermajority so that they can send it as a piece of legislation to the House and the Senate and pass it, assuming they can pass it. Right now, it doesn't look like they're going to get those 14. But they still have a few weeks to go, and the two commissioners, the chief commissioners, they think they can negotiate something.

Look, to deal with the debt, the national debt of $14 trillion --

BALDWIN: Huge.

BLITZER: -- you've got to deal -- you can't just go around the edges and talk about earmarks. You've got to talk about entitlements, which is Social Security and Medicare, and nobody wants to cut that. You've got to talk about national security, the Pentagon. A lot of people don't want to cut defense spending.

You've got to maybe, potentially, increase some taxes. A lot of people don't want to increase any taxes. So everybody wants to deal with the debt, the budget deficits, but they don't want to make the painful decisions.

BALDWIN: It's tough to ask them how and what will you cut?

(CROSSTALK)

BLITZER: Yes. They're talking about waste, fraud and abuse, but that's going to be a minor part if you're going to really deal with $14 trillion of a national debt, or a $1-trillion-a-year annual budget deficit.

I mean, so you need some political courage right now. I'm not sure there is a whole lot of political courage out there.

BALDWIN: Big number, hard to wrap your head around that.

Also, lame-duck Congress about to return to Washington. What is, you know, priority number one for the president? What does he need to try to do while they're there?

BLITZER: Right now people forget, the defeated members and the members who are retiring, they're still coming back. They have a few more weeks of work to do before the new Congress, all the new members, are sworn in early January.

BALDWIN: So what do they do while they're --

BLITZER: They have got to deal with what to do with the Bush tax cuts that expire -- if they do nothing, we go back to the tax rates that existed during the Clinton administration, which are higher. So that's the first thing they have to do. And everybody wants to continue the Bush tax rates for the middle class, for people earning under $250,000 a year.

The fight is, what do you do with the richer people? And there is a big fight over that, will there be a compromise? That's one issue.

Unemployment benefits are going to expire for two million workers if they don't deal with that. And that's another $30 or $40 billion. So they've got to deal with that.

And I know a lot of people want to deal with the "don't ask, don't tell." Do you deal with getting rid of the policy that bans openly gay people from serving openly in the United States military? And I don't know if that's going to come -- if they're going to be able to deal with it. But if they don't deal with it now, it's going to probably be more difficult in the new House and Senate to deal with it.

BALDWIN: Right. Right.

So you mentioned three things. Maybe one. We'll have to wait and see.

BLITZER: They've got to deal with the Bush tax cuts.

BALDWIN: They do.

BLITZER: And the unemployment benefits, I think they'll figure out something.

BALDWIN: OK.

And then, finally, let's reveal to everyone why you're here in Atlanta. And it's so funny, because I came in your office today and you said to me, "You look at me and you think, Soul Train, right?"

BLITZER: Of course. That's why I'm here.

BALDWIN: Of course, obviously.

BLITZER: The Soul Train Awards tonight at the Cobb Energy Center, outside -- right here in Atlanta.

BALDWIN: How did you get involved in this?

BLITZER: It's not going to air until November 28th on BET.

BALDWIN: OK.

BLITZER: A very good friend of mine, Paxton Baker in Washington, he's a big executive at CENTRIC. And BET, Debra Lee, who's the head of BET, is a good friend.

BALDWIN: OK.

BLITZER: About a year or so ago, Paxton said to me, "We're going to go do the Soul Train." This was before last year's. I said, "Look, I love Soul Train. I grew up in Buffalo watching Soul Train" -- Don Cornelius and all the dancers and the stars and everything. He said to me, "Would you ever consider coming to the Soul Train Awards" and make a presentation?"

BALDWIN: And you said?

BLITZER: I said, of course. Is there any doubt?

And so we did a rehearsal, because I'm going to be doing something special tonight.

BALDWIN: That's where you've been this morning, rehearsing.

BLITZER: Yes, I was rehearsing. And I think you're going to like it. I think our viewers will like it. The people who are there tonight will see it.

BALDWIN: So we have to wait.

BLITZER: The others, November 28th, they'll see it on BET and CENTRIC.

BALDWIN: OK. We have to wait.

BLITZER: But it's going to be a lot of fun. I had a really great time.

BALDWIN: I cannot wait. It is so good to see you in person.

BLITZER: When you think of Soul Train, you think of --

BALDWIN: Wolf Blitzer.

BLITZER: That is the correct answer.

BALDWIN: And on that, we'll be right back.

(COMMERCIAL BREAK)

BALDWIN: All right. We have just gotten some new pictures just in here of this cruise ship. This is the cruise ship Carnival Cruise Lines. It was supposed to be going on that seven-day Mexican Riviera trip.

We have just gotten new pictures of it, ,exclusive to us here at CNN. So let's just take a look at some of these.

No other network here has actually gotten this close. This video that we've just turned around for you, this just came in from our CNN producer who is on board the USS Ronald Reagan. In fact, that's the perspective that we have of the cruise ship.

And, you know, thousands of passengers, it's like 3,300 passengers, 1,100 crew members, so they're all on board. In fact, I talked to one of the guys on board. Somehow, amazingly, his cell phone was able to work for me to talk to him, and he said the worst part of the whole thing, the stench.

Imagine, they couldn't flush toilets for a while. So they're having to try to air this thing out and people are getting sick over the stench.

But at least the good news, that ship is expected to arrive back to San Diego at some point tomorrow.

Also what we're watching today, Elizabeth Smart. She has taken the witness stand for the third and final day today, testifying against the street preacher who allegedly kidnapped her at knife point from her bedroom eight years ago.

And she was one very, very intelligent young woman. She testified today that her alleged kidnapper, he used religion to get what he wanted, and that he claimed his revelations were divine. And Smart told us -- or I should told the jury how she used his ideas to turn things around to her own advantage.

Jean Casarez following the trial for us, "In Session," on our sister network, truTV.

And Jean, talk to me about what Elizabeth Smart said outlining her kidnapper, Mitchell, the fact that he was allegedly of the divine, yet that wasn't exactly his priority.

JEAN CASAREZ, CORRESPONDENT, "IN SESSION," TRUTV: Right. The prosecution really went into this. And, Brooke, it was like they're anticipating what the defense is going to be, and they want to show this jury that Brian David Mitchell knew every step of the way, exactly what he was doing.

That's a train behind me.

BALDWIN: We can hear you. We can hear you. Keep going.

CASAREZ: All right.

What she testified to was -- there was a question, "Did Brian David Mitchell tell you he was the prophet called from God?" "Yes." "Did he tell you he was the Davidic king?" "Yes."

"Did he tell you that he was brought on Earth to marry you and to have plural wives?" "Yes." "Did he tell people in public this or just you?" Her response, "It was just me," thus to show the manipulation.

And then she was asked the question, was he -- hypothetical, "Give us your lay opinion. Was he hypothetical in his religious views?" Let me tell you what she said.

She said that, "God is a great God, but God would not have delivered him to abduct me from my bedroom at knife point with my little sister sleeping right next to me, and to put my parents through what they went through for nine months. A God would not do that and would not direct him to do that, and did not direct the defendant to do those things to me." BALDWIN: Jean, I have more questions about what she said on the stand today, ,and also into yesterday, but I just wanted to pause and just ask you -- I mean, I know this happened many years ago, and this is the kind of thing, obviously, that affects her for the rest of her life, but she is now very much so a young woman, and everything that I've read, she is really kept her composure on the stand.

CASAREZ: She is so eloquent. She is so eloquent.

And Brooke, I went up to her after she completed her testimony, and I told her what our networks are saying about her today, that she is an image, that she is a symbol of a victim coming forward with the strength and the courage, and can be just examples to other victims in this entire country. She was so humble, Brooke.

She acted like nobody ever said that to her in the world before, and that I was the first one. Obviously, people have told her that. But there was a humbleness about her.

And I asked her -- I said, "Are you glad this is finished?" She said, "Yes." And then she walked away with her parents, not that she can't be recalled, because she could hypothetically be recalled by the defense.

BALDWIN: Right. Quickly, Jean, 15 seconds, have we seen Mitchell in court? I know he had been singing and taken out of the courtroom. Has he made another appearance?

CASAREZ: He was singing this morning, taken out of the courtroom. When I went in the courtroom, he was coming out, six plainclothes agents around him, handcuffs behind his back. He was taken into a nearby room -- I watched it -- and he is watching the trial on a monitor.

BALDWIN: How about that?

Jean Casarez for us, watching this Elizabeth Smart trial unfold in Salt Lake City.

Jean, thank you.

And now I have the pleasure of introducing Wolf Blitzer here in Atlanta, in "THE SITUATION ROOM."

Wolf, take it away.