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CNN Live At Daybreak

America's New War: Latest Developments in Washington

Aired September 27, 2001 - 07:02   ET

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

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Right now it's time to go back to my colleague John King in Washington for the latest from there -- hi, John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Good morning again to you, Paula.

Mr. Bush, the president, will leave Washington today, the first time he takes a domestic trip since the tragedy of 16 days ago. One urgent focus, airline security. The reason for that quite obvious, profound questions about passenger safety, airport and airline security raised by those hijackings of 16 days ago. But that focus all the more urgent now because of mounting evidence that the problems in the airline industry are having a ripple effect, and a devastating one, on the overall U.S. economy.

(BEGIN VIDEOTAPE)

(voice-over): More layoffs in the airline industry have the president in an urgent mood. Sources tell CNN the White House is asking Congress to pass new airport and airline security measures by the end of next week.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This terrible incident has said to many Americans, convinced many Americans to stay at home. And one of the keys to economic recovery is going to be the vitality of the airline industry.

KING: Administration and congressional sources say the president wants action in three major areas. Airport security screening -- the president opposes a full federal takeover of airport security checkpoints, but favors federal standards, training and testing for security workers and an increased federal law enforcement presence at those checkpoints.

Air marshals -- Mr. Bush wants marshals on most, if not all, flights for now and will borrow agents from the FBI, the Drug Enforcement Administration and the Immigration and Naturalization Service while full-time marshals are hired and trained.

Cockpit security -- the president firmly opposes a proposal to allow pilots to carry handguns, but he backs security bars and other immediate cockpit security measures until new fortified cockpit doors can be installed. Sources say installing cockpit cameras with a live feedback to ground controllers is another administration recommendation. And airport workers with access to planes and baggage will face new background checks and new security tests, perhaps a fingerprint scan.

CHARLES SLEPIAN, AVIATION SECURITY EXPERT: We need to know the people who service the airplane, the people who supply the airplane, the people who have access to it. We need to put in place the kind of technology which now exists.

KING: Training of sky marshals is under way at an urgent pace and a role for the National Guard is on the table too. Many in Congress believe a strong uniformed security presence will help calm passenger jitters.

(END VIDEOTAPE)

KING: I wanted to bring into the conversation now my colleague over at the White House, Kelly Wallace -- Kelly, as the president travels today and lays out specific safety proposals, some psychology at work here as well?

KELLY WALLACE, CNN CORRESPONDENT: Definitely some psychological moves here, John. You know, Transportation Secretary Norman Mineta could easily fly aboard Air Force One with the president to Chicago. Instead, he is flying commercially from the Washington area. You see him at Baltimore-Washington International Airport flying from there to Chicago. The message, John, that it is safe to fly. More and more cabinet secretaries are doing this. White House Press Secretary Ari Fleischer even announcing yesterday he flew home via a commercial airliner for the Yom Kippur holiday. So that is the message -- John.

KING: Special guests aboard Air Force One today, though, do include John Sweeney, the president of the AFL-CIO, Dick Gephardt, the House Democratic leader. They are pushing for a multi-billion, $3 billion to $5 billion in aid and assistance to workers dislocated by these terrorist strikes. Is their presence on Air Force One an indication the president is moving their way?

WALLACE: Well, there's still a big debate, John, just over the size and scope of this package. As you know, the president saying he will work with law makers, work with labor unions to try and come up with a deal. There is pressure in the White House with tens of thousands of airline workers out of a job.

But the big question is how big should such a package be. Democrats pushing, like you said, about a $3 billion to $5 billion unemployment benefits, job training. Republicans may favor a more modest proposal. So, no deal yet, but the president likely to get an earful, you could say, on Air Force One -- John.

KING: Kelly Wallace at the White House, thank you very much.

We want to turn now to someone who might have the answers to some of these questions about just what will the president do not only to help airline workers, but the overall U.S. economy. Joining us here this morning is the Treasury Secretary Paul O'Neill. Sir, thank you for joining us so early in the morning.

What is the president willing to do? In Congress they want about $3 billion, extend health insurance, extend unemployment benefits, worker training, dislocation benefits. There's been a debate in the Congress about how far to go. Some Republicans say just health insurance. Where is the administration?

PAUL O'NEILL, TREASURY SECRETARY: We had a very good meeting yesterday afternoon with the president and we're looking at everything. We're trying to make sure that we match interventions to the real problems that we have and when you look at how our economy is different today from where it was on September the 10th, the airline industry has clearly been impacted with 40 percent of what it was formerly flying and it's having a consequential effect in the hotel industry, in the restaurant industry, in the lack of rental cars being rented.

And so if you look at what's the direct effect and impact of September 11, it starts with the airline industry and ripples through the economy. And so we're looking at what kind of things can be done. And at the very top of the list, and part of the reason for the president going to Chicago today, is to clearly articulate and begin to act on the things that will assure people when you get on an airplane, you're going to end up where you intended to go safely without fear.

And so we've clearly got to do something about airport and aircraft security. We've got to do everything to assure people that they're going to get to their destination. And it begins with that. And then I think if we can quickly bring the airline industry back these other problems that people are now talking about will disappear because people who are on layoff will quickly go back to work, people in the hotel industry and the restaurants will be busy again.

And so we need to deal with the real problem and not get too confused about what's happening in our economy.

KING: Well, you say not get too confused about what's happening in our economy. Even before this tragedy, there was a debate about whether or not we were in the recession. I spoke to one of your colleagues, a senior administration official, last night who said I don't think that's a maybe anymore, I think we're in a recession. Are we?

O'NEILL: Well, I think we've certainly postponed the recovery that was under way by a quarter or so. You know, I think, speaking for myself and from my conversations with my friend Alan Greenspan, we both thought that before the 11th of September, our economy was beginning its recovery phase. It's a debatable proposition.

As we look at this quarter, there's no doubt that the impact of shutting down the airways for five days, that we've really taken a blow to the economy. But so far it's isolated. We need to keep it isolated and we need to get going because while we're dealing with these terrorists and going after them in every way we can imagine, we don't need the pressure of a slowing economy.

KING: Let me turn to another point in which you are a critical player. The president announced this crackdown, or attempt to crackdown on the finances of the bin Laden organization and other terrorist groups.

O'NEILL: Right.

KING: The morning after you were on the phone to the G7 nations, the world's richest countries, telling them you must join us in this fight. Explain to us the reaction to so far and any evidence so far that outside of the United States a significant amount of bin Laden or other terrorists' money has been found and frozen.

O'NEILL: Money has been found and frozen. The response from the G7 finance ministers was like what I've had from finance ministers and presidents and prime ministers all over the world. Without exception, they've all said we'll do everything that we can to help the United States to go after and secure these terrorists in one way or another. And serious money is being blocked now. And we've taken off the wraps. We're going to go after the financial flows that these people have had access to and we will shut down everything that we can find.

KING: You say serious money, quickly, any number you can put on that yet?

O'NEILL: I'm not going to tell you numbers and I'm not sure we'll ever tell you exact numbers because an important part of this is connecting parts of the spider web and it's more important that we block their financial assets than we have a scoreboard.

KING: Treasury Secretary Paul O'Neill, we thank you for your thoughts this morning on both questions, the U.S. economy and this effort to crack down on the bin Laden organization's financial network. And for now, let's go back to Paula Zahn in New York.

ZAHN: Thanks, John.

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