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Madeleine Albright, Colin Powell Defend Their Administrations' Records Before 9/11 Commission; Hamas Names New Leader; Iraqis Protest Hamas Leader Assassination; Medicare Needs to Dip Into Savings

Aired March 23, 2004 - 13:00   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.


(BEGIN VIDEO CLIP)
MADELEINE ALBRIGHT, FORMER SECRETARY OF STATE: We can't turn back the clock to before September 11, but we must do everything we can to prevent similar tragedies.

(END VIDEO CLIP)

KYRA PHILLIPS, ANCHOR: Could September 11 have been prevented? A federal commission investigates the attacks.

MILES O'BRIEN, ANCHOR: Show of defiance in Iraq: demonstrations and violence in reaction to Israel's killing of a Hamas leader.

(BEGIN VIDEO CLIP)

RUBY CALAD, PLAINTIFF: This is not right. They are treating you like a piece of meat.

(END VIDEO CLIP)

PHILLIPS: Fighting an HMO nightmare. Should you have the right to sue?

O'BRIEN: And show and tell goes over the edge. A preschooler's bag of goodies had has his teacher calling the cops.

From the CNN Center in Atlanta, I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips. It's Tuesday, March 23. CNN's LIVE FROM starts right now.

O'BRIEN: And we begin this hour with finger-pointing, foot- dragging, hindsight, deaf ears and tunnel vision, all of this surrounding the terror attacks of September 11 and what two administrations did or did not know beforehand, and what they did or did not do with what they knew.

Day one of a two-day hearing convened by the independent 9/11 commission includes an all-star lineup of witnesses, beginning with President Clinton's secretary of state, Madeleine Albright, and the incumbent, Colin Powell.

PHILLIPS: Going in, the commission faulted both administrations for inaction or ineffective action toward thwarting al Qaeda's intentions. But Albright maintains the Clinton team, quote, "did everything we could think of based on the knowledge we had."

Specifically she pointed to a 1998 Cruise missile strike on an al Qaeda training camp in Afghanistan.

(BEGIN VIDEO CLIP)

ALBRIGHT: The timing of the strikes was prompted by credible, predictive intelligence that terrorist leaders, possibly including bin Laden, would be gathering at one of the camps.

The day after the strikes, the White House convened a meeting to study further military option. Our primary target, bin Laden, had not been hit, so we were determined to try again.

In subsequent weeks, the president specifically authorized the use of force. And there should have been no confusion that our personnel were authorized to kill bin Laden. We did not, after all, launch Cruise missiles for the purpose of serving legal papers.

(END VIDEO CLIP)

PHILLIPS: Joining us now with more on the hearing, CNN's Pentagon correspondent Barbara Starr -- Barbara.

BARBARA STARR, CNN CORRESPONDENT: Well, Kyra, as you say, the finger pointing went on much of the morning. Because after that, the secretary of -- the former secretary of the state Madeleine Albright then took her shot at the Pentagon under former Defense Secretary William Cohen, who will testify after the lunch break, saying that the Pentagon did not come up with the military options that were required.

But then the testimony went on to Secretary of State Colin Powell, who said the Bush administration took the counter terrorism issue very seriously, that when they came into office, they had a plan that they wanted to go after al Qaeda.

Here's a bit of what he had to say.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: At no time during the early months of our administration were we presented with a vetted, viable operational proposal which would have led to an Opportunity to kill, capture, or otherwise neutralize Osama bin Laden. Never received any targetable information.

(END VIDEO CLIP)

STARR: Now, what the secretary is saying there, of course, is that it was very tough to get the right kind of information needed to target bin Laden, but that indeed, he says, the Bush administration wanted to go beyond the so-called pinprick attacks and go beyond simply trying to contain al Qaeda to actually trying to defeat al Qaeda.

More on this is expected after the lunch break today. Again, when former Defense Secretary Cohen testifies, the day will wrap up with Defense Secretary Donald Rumsfeld -- Kyra.

PHILLIPS: Barbara Starr, live from the Pentagon, thank you.

And in less than an hour, panelists will question Clinton era Secretary of Defense William Cohen. Later today, the current defense secretary, Donald Rumsfeld, will testify. CNN will, of course, bring it all to you live.

And before that I'll talk with a woman who lost her mother in the 9/11 attack on the World Trade Center. Carie LeMack has since become an outspoken advocate for 9/11 families, and she'll be up at the half hour right here on LIVE FROM.

O'BRIEN: The name Richard Clarke came up today, he whose brand- new memoir allege the Bush administration pre-9/11 essentially ignored al Qaeda while obsessing about Iraq.

Clarke was a top U.S. counter terrorism official under three presidents. And while the White House claims he's rewriting history, the 9/11 commission says his warnings, in fact, fell on largely deaf ears.

Clarke was a guest today on CNN's "AMERICAN MORNING," where Bill Hemmer asked about the timing of his explosive recollections.

(BEGIN VIDEO CLIP)

RICHARD CLARKE, FORMER BUSH ADVISOR: I wrote the book as soon as I retired from government. It was finished last fall. And it sat in the White House for months, because as a former White House official, my book has to be reviewed by the White House for security purposes. This book could have come out a long time ago, months and months ago, if the White House hadn't sat on it.

BILL HEMMER, "AMERICAN MORNING" HOST: The White House is saying they only check the facts when it comes to the book itself, on whether or not it was sacrificing national security...

CLARKES: They took months and months and months to do it. They're saying why is the book coming out in the beginning of the election? I didn't want it to come out at the beginning of the election. I wanted it to come out last year. They're the reason, because they took so long to clear it.

(END VIDEO CLIP)

O'BRIEN: NASA's poised to make a big announcement from the surface of Mars. The rovers Opportunity and Spirit still up there, doing all kinds of scientific work.

And if you follow the announcements very closely since March 2, since scientists first announced they had proof positive that Mars was once wet, or at least the spot where the Opportunity and Spirit rovers were. You get a sense they're closing to making an announcement of more significant amounts of water. Let's take a look at that Opportunity landing site, which you've seen so many times before. As you pan along there, the Opportunity rover has been delving into this exposed rock there you see in the upper right-hand portion of your screen. That is bedrock. And it's very possible that this site was very wet and very warm many billions of years ago.

The announcement coming at the top of the hour. We'll bring you that, as well as an interview with the lead Mars scientist for NASA in about 45 minutes time. Stay with us for that -- Kyra.

PHILLIPS: All right, Miles. Well, straight ahead, imagine how the emergency operator felt when she got this call about a gorilla.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: I'm serious. I swear to God. I am not joking. There's people yelling. It's going after people.

(END AUDIO CLIP)

PHILLIPS: More on the eventful day at the zoo right here on LIVE FROM.

And later, you're looking at a mom who lost her life -- well, you're not looking at it -- here it is. She lost her life on September 11, and now her daughter is watching the 9/11 hearings very closely. You're going to hear from her, later on LIVE FROM.

(COMMERCIAL BREAK)

O'BRIEN: From the Middle East this hour, word of a new man at the helm of Hamas, in Gaza. He's Abdel Aziz Rantissi. And Israelis warn he's a marked man, as well.

Yesterday's assassination of Hamas founder and spiritual leader Sheikh Ahmed Yassin is still emitting shockwaves.

And CNN's Ben Wedeman brings us the latest from Gaza City -- Ben.

BEN WEDEMAN, CNN CORRESPONDENT: Yes, Miles. Well, Palestinians today paid their respects, or final respects, to Sheikh Ahmed Yassin. Hamas basically set up an operation in the local stadium. And we saw thousands of Palestinians, including Palestinian Prime Minister Ahmed Qorei, member of the security force, officials from the Palestinian authority, going there to pay their respects.

Ahmed Qorei, the Palestinian prime minister, saying that in his death, Sheikh Ahmed Yassin had united the Palestinians now.

Hamas hasn't taken very long to, as you said, choose a new leader, at least for the Gaza and the West Bank. Abdel Aziz Rantissi was named this evening. He's only the interim leader. In fact, they will be holding elections at some point down the line for a permanent leader. But as we know, Mr. Rantissi is something of a hard-liner. I've met him, interviewed him many times. Very uncompromising. He has consistently said that Hamas is willing to engage in any sort of negotiations that would lead to a peace agreement.

Hamas, of course, taking a very maximalist line regarding any peace agreements with Israel. They also have a very touch and go relationship with the Palestinian authority itself. And Mr. Rantissi, by and large, has been something of an opponent to any cooperation that would foster in any way the peace process moving forward -- Miles.

O'BRIEN: CNN's Ben Wedeman in Gaza -- Kyra.

PHILLIPS: Israeli troops are nowhere near Iraq, of course, so U.S. troops are standing in as the targets of Iraqi anger over Sheikh Yassin's assassination.

Our coverage continues now with CNN's Walter Rodgers.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN CORRESONDENT (voice-over): Young Iraqis took to the streets in the town of Ramadi, west of Baghdad, taking up stones against American soldiers and Iraqi police, reminiscent of scenes in which Palestinians have stoned Israeli soldiers for years.

It was, in fact, Israel's assassination of Sheikh Ahmed Yassin in Gaza which brought these young Iraqis to the streets. The protest was relatively small but sharp. A large concrete slab blast wall kept the furious Iraqis at stone-throwing distance.

A popular Shiite cleric in Iraq, Mufkata Suter (ph), earlier issued a statement saying, quote, "All our hearts are full of anger against the enemies of our religion. We as Muslims stand hand-in-hand with our brethren in Palestine."

Unable to get any closer to these U.S. troops now bearing the brunt of Arab wrath for Israel's killing of Sheikh Yassin, these Iraqis vented their wrath on a small pickup truck parked in the area. They could not smash U.S. soldiers, so they smashed a police truck. And then they set it on fire.

At least two Iraqis were reportedly shot in Ramadi. There are also reports that both Iraqi police and U.S. soldiers opened fire. This protest was 110 kilometers, 68 miles west of Baghdad.

Walter Rodgers, CNN, Baghdad.

(END VIDEOTAPE)

PHILLIPS: A big bombshell today over the financial health of Medicare. Medicare trustees say the health care program will have to dip into its savings to keep up with expenditure this year and will go broke if big changes aren't put in place.

Joining us from Washington with more, CNN's Sean Callebs -- Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Kyra, it's not good news. And if you're a Baby Boomer counting on Medicare 15 years from now, pay attention.

According to the administration, the Medicare fund will go broke in 2019, unless changes are made and soon. A key issue: the program is simply overburdened by rising health care costs. That's coming from Medicare trustees.

Also this word about the Social Security trust fund: without changes there, that program, too is expected to be exhausted, this one by the year 2042.

Now if -- if there is good news, the U.S. treasury secretary says the program can be salvaged, but the longer lawmakers wait to overhaul Medicare, the more painful the remedy.

(BEGIN VIDEO CLIP)

JOHN SNOW, TREASURY SECRETARY: While we have some time, given these dates, to fix the problem, inaction is not a responsible course. And the longer we wait, the more difficult the ultimate solution will be.

(END VIDEO CLIP)

CALLEBS: Medicare and Social Security are financed by dedicated payroll taxes that we all pay every week two weeks. The report blames Medicare's fiscal woes on lower than expected tax revenue and higher spending on inpatient hospital care.

This downwards spiraling financial picture is apparently due in part to costs for older Americans and the recently approved Medicare prescription drug law that could swell the costs to more than $500 billion over ten years.

And that's leading Democratic lawmakers to say it may be time to readdress the contentious issue of prescription meds.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: (NO AUDIO) This legislation has, not for the next year or so, but for the next couple of...

(END VIDEO CLIP)

CALLEBS: Regardless of what happens in the immediate future, authorities say Medicare will have to dip into its trust fund right now to keep up with rising costs.

Kyra, back to you.

PHILLIPS: Sean, thank you -- Miles.

O'BRIEN: News across America now.

Newly released 9/11 tapes reveal the chaos that erupted after a 340-pound gorilla escaped from the Dallas Zoo.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: It's on the loose and going after people.

UNIDENTIFIED FEMALE: What part of the zoo is it in?

UNIDENTIFIED MALE: It's at the wildlife (UNINTELLIGIBLE)

(END AUDIO CLIP)

O'BRIEN: Of course, I meant 911 tapes. Confusing when I say it that way. The gorilla went on a 40-minute rampage Thursday. It snatched a toddler and attacked three other people before being shot and killed by police.

Busted. Indiana police are looking for the parents of a preschooler who brought crack cocaine to show and tell. We kid you not. The 4-year-old boy told the kids in his class it was flour. He and his sister are now in protective custody.

The Queen of Soul is in the hospital, suffering from an undisclosed illness. Aretha Franklin was hospitalized Saturday. As of yesterday, her publicist says she was in stable condition but declined to give details. Franklin turns 62 on Thursday.

PHILLIPS: Well, we've all heard HMO horror stories. Today, the Supreme Court is taking up one of the most divisive issues, whether patients can sue their HMOs for malpractice in state court.

CNN's Ed Lavandera takes a close look at one of two cases going before the court.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice-over): Ruby Calad says her hysterectomy operation five years ago was a nightmare.

CALAD: I couldn't walk. They had to lift me from the bed to a wheelchair.

LAVANDERA: Two days after the surgery, her doctor said she needed more time in the hospital to recover. But a Cigna Health Care employee told Calad to go home.

CALAD: That person, without the knowledge, without the experience, overrode my doctor's decision for me to stay in the hospital.

LAVANDERA: A day later, Calad was rushed to the emergency room because of complications from the operation.

CALAD: This is wrong. This unethical. This is not right. They are treating you like a piece of meat.

LAVANDERA: Cigna Health Care refused on-camera interviews for this report but in a statement, Cigna said, "Calad chose not to use the existing avenues to appeal the coverage."

Calad's story is one of two cases before the U.S. Supreme Court, which could determine if health insurance providers can be sued in state court or if those cases must remain of federal court.

(on camera) A majority of Americans get health insurance from their employers, but as it stands now, those people, like Ruby Calad, aren't allow to sue their HMOs in state court.

Recently ten states have passed laws allowing that to happen, but those laws apply only to people who bought their own insurance or work in state government.

(voice-over) Insurance providers want medical malpractice lawsuits kept in federal court, because you can only sue for the amounts of the coverage. In Ruby Calad's case that would have been for an extra night's stay in the hospital, about $1,500.

In state court, however, juries could award damages for pain and suffering and lost wages, a much more expensive reality for insurance companies.

SUSAN PISANO, AMERIC'A HEALTH INSURANCE PLANS: If what happens is there's a threat of going to state court every time there's a question about the scope of coverage for an individual, then health care could very well become unaffordable for many more employers and many more consumers.

GEORGE PARKER YOUNG, CALAD'S ATTORNEY: Right after the federal HMO act passed...

LAVANDERA: George Parker Young is Ruby Calad's attorney. He says it's an issue of accountability.

YOUNG: Really what they're saying is "We should be immune. We should be able to make these medical decisions, second-guess the doctors and have absolutely no accountability if things turn out bad."

LAVANDERA: The Supreme Court could finally decide how much legal protection HMOs should get from patients.

CALAD: A pretty tree...

LAVANDERA: Ruby Calad says sometimes a lawsuit is the only way a powerless person gets the attention of a giant insurance company.

Ed Lavandera, CNN, Dallas.

(END VIDEOTAPE)

PHILLIPS: More conflict in the Magic Kingdom. The scoop on Disney in our business report, straight ahead. And more from the September 11 commission hearings. Yet to speak, Defense Secretary Donald Rumsfeld. That's later on LIVE FROM.

(COMMERCIAL BREAK)

(STOCK REPORT)

(COMMERCIAL BREAK)

O'BRIEN: Checking news we're watching at this hour. Gas prices have reached a record high at the pump. Of course, you probably already know that.

AAA says the national average of a gallon of self-serve regular is nearly $1.74. Among the reasons cited by the AAA, duh, higher crude oil prices, low inventories, complicated clean fuel regulations and rising consumption.

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


Aired March 23, 2004 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
MADELEINE ALBRIGHT, FORMER SECRETARY OF STATE: We can't turn back the clock to before September 11, but we must do everything we can to prevent similar tragedies.

(END VIDEO CLIP)

KYRA PHILLIPS, ANCHOR: Could September 11 have been prevented? A federal commission investigates the attacks.

MILES O'BRIEN, ANCHOR: Show of defiance in Iraq: demonstrations and violence in reaction to Israel's killing of a Hamas leader.

(BEGIN VIDEO CLIP)

RUBY CALAD, PLAINTIFF: This is not right. They are treating you like a piece of meat.

(END VIDEO CLIP)

PHILLIPS: Fighting an HMO nightmare. Should you have the right to sue?

O'BRIEN: And show and tell goes over the edge. A preschooler's bag of goodies had has his teacher calling the cops.

From the CNN Center in Atlanta, I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips. It's Tuesday, March 23. CNN's LIVE FROM starts right now.

O'BRIEN: And we begin this hour with finger-pointing, foot- dragging, hindsight, deaf ears and tunnel vision, all of this surrounding the terror attacks of September 11 and what two administrations did or did not know beforehand, and what they did or did not do with what they knew.

Day one of a two-day hearing convened by the independent 9/11 commission includes an all-star lineup of witnesses, beginning with President Clinton's secretary of state, Madeleine Albright, and the incumbent, Colin Powell.

PHILLIPS: Going in, the commission faulted both administrations for inaction or ineffective action toward thwarting al Qaeda's intentions. But Albright maintains the Clinton team, quote, "did everything we could think of based on the knowledge we had."

Specifically she pointed to a 1998 Cruise missile strike on an al Qaeda training camp in Afghanistan.

(BEGIN VIDEO CLIP)

ALBRIGHT: The timing of the strikes was prompted by credible, predictive intelligence that terrorist leaders, possibly including bin Laden, would be gathering at one of the camps.

The day after the strikes, the White House convened a meeting to study further military option. Our primary target, bin Laden, had not been hit, so we were determined to try again.

In subsequent weeks, the president specifically authorized the use of force. And there should have been no confusion that our personnel were authorized to kill bin Laden. We did not, after all, launch Cruise missiles for the purpose of serving legal papers.

(END VIDEO CLIP)

PHILLIPS: Joining us now with more on the hearing, CNN's Pentagon correspondent Barbara Starr -- Barbara.

BARBARA STARR, CNN CORRESPONDENT: Well, Kyra, as you say, the finger pointing went on much of the morning. Because after that, the secretary of -- the former secretary of the state Madeleine Albright then took her shot at the Pentagon under former Defense Secretary William Cohen, who will testify after the lunch break, saying that the Pentagon did not come up with the military options that were required.

But then the testimony went on to Secretary of State Colin Powell, who said the Bush administration took the counter terrorism issue very seriously, that when they came into office, they had a plan that they wanted to go after al Qaeda.

Here's a bit of what he had to say.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: At no time during the early months of our administration were we presented with a vetted, viable operational proposal which would have led to an Opportunity to kill, capture, or otherwise neutralize Osama bin Laden. Never received any targetable information.

(END VIDEO CLIP)

STARR: Now, what the secretary is saying there, of course, is that it was very tough to get the right kind of information needed to target bin Laden, but that indeed, he says, the Bush administration wanted to go beyond the so-called pinprick attacks and go beyond simply trying to contain al Qaeda to actually trying to defeat al Qaeda.

More on this is expected after the lunch break today. Again, when former Defense Secretary Cohen testifies, the day will wrap up with Defense Secretary Donald Rumsfeld -- Kyra.

PHILLIPS: Barbara Starr, live from the Pentagon, thank you.

And in less than an hour, panelists will question Clinton era Secretary of Defense William Cohen. Later today, the current defense secretary, Donald Rumsfeld, will testify. CNN will, of course, bring it all to you live.

And before that I'll talk with a woman who lost her mother in the 9/11 attack on the World Trade Center. Carie LeMack has since become an outspoken advocate for 9/11 families, and she'll be up at the half hour right here on LIVE FROM.

O'BRIEN: The name Richard Clarke came up today, he whose brand- new memoir allege the Bush administration pre-9/11 essentially ignored al Qaeda while obsessing about Iraq.

Clarke was a top U.S. counter terrorism official under three presidents. And while the White House claims he's rewriting history, the 9/11 commission says his warnings, in fact, fell on largely deaf ears.

Clarke was a guest today on CNN's "AMERICAN MORNING," where Bill Hemmer asked about the timing of his explosive recollections.

(BEGIN VIDEO CLIP)

RICHARD CLARKE, FORMER BUSH ADVISOR: I wrote the book as soon as I retired from government. It was finished last fall. And it sat in the White House for months, because as a former White House official, my book has to be reviewed by the White House for security purposes. This book could have come out a long time ago, months and months ago, if the White House hadn't sat on it.

BILL HEMMER, "AMERICAN MORNING" HOST: The White House is saying they only check the facts when it comes to the book itself, on whether or not it was sacrificing national security...

CLARKES: They took months and months and months to do it. They're saying why is the book coming out in the beginning of the election? I didn't want it to come out at the beginning of the election. I wanted it to come out last year. They're the reason, because they took so long to clear it.

(END VIDEO CLIP)

O'BRIEN: NASA's poised to make a big announcement from the surface of Mars. The rovers Opportunity and Spirit still up there, doing all kinds of scientific work.

And if you follow the announcements very closely since March 2, since scientists first announced they had proof positive that Mars was once wet, or at least the spot where the Opportunity and Spirit rovers were. You get a sense they're closing to making an announcement of more significant amounts of water. Let's take a look at that Opportunity landing site, which you've seen so many times before. As you pan along there, the Opportunity rover has been delving into this exposed rock there you see in the upper right-hand portion of your screen. That is bedrock. And it's very possible that this site was very wet and very warm many billions of years ago.

The announcement coming at the top of the hour. We'll bring you that, as well as an interview with the lead Mars scientist for NASA in about 45 minutes time. Stay with us for that -- Kyra.

PHILLIPS: All right, Miles. Well, straight ahead, imagine how the emergency operator felt when she got this call about a gorilla.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: I'm serious. I swear to God. I am not joking. There's people yelling. It's going after people.

(END AUDIO CLIP)

PHILLIPS: More on the eventful day at the zoo right here on LIVE FROM.

And later, you're looking at a mom who lost her life -- well, you're not looking at it -- here it is. She lost her life on September 11, and now her daughter is watching the 9/11 hearings very closely. You're going to hear from her, later on LIVE FROM.

(COMMERCIAL BREAK)

O'BRIEN: From the Middle East this hour, word of a new man at the helm of Hamas, in Gaza. He's Abdel Aziz Rantissi. And Israelis warn he's a marked man, as well.

Yesterday's assassination of Hamas founder and spiritual leader Sheikh Ahmed Yassin is still emitting shockwaves.

And CNN's Ben Wedeman brings us the latest from Gaza City -- Ben.

BEN WEDEMAN, CNN CORRESPONDENT: Yes, Miles. Well, Palestinians today paid their respects, or final respects, to Sheikh Ahmed Yassin. Hamas basically set up an operation in the local stadium. And we saw thousands of Palestinians, including Palestinian Prime Minister Ahmed Qorei, member of the security force, officials from the Palestinian authority, going there to pay their respects.

Ahmed Qorei, the Palestinian prime minister, saying that in his death, Sheikh Ahmed Yassin had united the Palestinians now.

Hamas hasn't taken very long to, as you said, choose a new leader, at least for the Gaza and the West Bank. Abdel Aziz Rantissi was named this evening. He's only the interim leader. In fact, they will be holding elections at some point down the line for a permanent leader. But as we know, Mr. Rantissi is something of a hard-liner. I've met him, interviewed him many times. Very uncompromising. He has consistently said that Hamas is willing to engage in any sort of negotiations that would lead to a peace agreement.

Hamas, of course, taking a very maximalist line regarding any peace agreements with Israel. They also have a very touch and go relationship with the Palestinian authority itself. And Mr. Rantissi, by and large, has been something of an opponent to any cooperation that would foster in any way the peace process moving forward -- Miles.

O'BRIEN: CNN's Ben Wedeman in Gaza -- Kyra.

PHILLIPS: Israeli troops are nowhere near Iraq, of course, so U.S. troops are standing in as the targets of Iraqi anger over Sheikh Yassin's assassination.

Our coverage continues now with CNN's Walter Rodgers.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN CORRESONDENT (voice-over): Young Iraqis took to the streets in the town of Ramadi, west of Baghdad, taking up stones against American soldiers and Iraqi police, reminiscent of scenes in which Palestinians have stoned Israeli soldiers for years.

It was, in fact, Israel's assassination of Sheikh Ahmed Yassin in Gaza which brought these young Iraqis to the streets. The protest was relatively small but sharp. A large concrete slab blast wall kept the furious Iraqis at stone-throwing distance.

A popular Shiite cleric in Iraq, Mufkata Suter (ph), earlier issued a statement saying, quote, "All our hearts are full of anger against the enemies of our religion. We as Muslims stand hand-in-hand with our brethren in Palestine."

Unable to get any closer to these U.S. troops now bearing the brunt of Arab wrath for Israel's killing of Sheikh Yassin, these Iraqis vented their wrath on a small pickup truck parked in the area. They could not smash U.S. soldiers, so they smashed a police truck. And then they set it on fire.

At least two Iraqis were reportedly shot in Ramadi. There are also reports that both Iraqi police and U.S. soldiers opened fire. This protest was 110 kilometers, 68 miles west of Baghdad.

Walter Rodgers, CNN, Baghdad.

(END VIDEOTAPE)

PHILLIPS: A big bombshell today over the financial health of Medicare. Medicare trustees say the health care program will have to dip into its savings to keep up with expenditure this year and will go broke if big changes aren't put in place.

Joining us from Washington with more, CNN's Sean Callebs -- Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Kyra, it's not good news. And if you're a Baby Boomer counting on Medicare 15 years from now, pay attention.

According to the administration, the Medicare fund will go broke in 2019, unless changes are made and soon. A key issue: the program is simply overburdened by rising health care costs. That's coming from Medicare trustees.

Also this word about the Social Security trust fund: without changes there, that program, too is expected to be exhausted, this one by the year 2042.

Now if -- if there is good news, the U.S. treasury secretary says the program can be salvaged, but the longer lawmakers wait to overhaul Medicare, the more painful the remedy.

(BEGIN VIDEO CLIP)

JOHN SNOW, TREASURY SECRETARY: While we have some time, given these dates, to fix the problem, inaction is not a responsible course. And the longer we wait, the more difficult the ultimate solution will be.

(END VIDEO CLIP)

CALLEBS: Medicare and Social Security are financed by dedicated payroll taxes that we all pay every week two weeks. The report blames Medicare's fiscal woes on lower than expected tax revenue and higher spending on inpatient hospital care.

This downwards spiraling financial picture is apparently due in part to costs for older Americans and the recently approved Medicare prescription drug law that could swell the costs to more than $500 billion over ten years.

And that's leading Democratic lawmakers to say it may be time to readdress the contentious issue of prescription meds.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: (NO AUDIO) This legislation has, not for the next year or so, but for the next couple of...

(END VIDEO CLIP)

CALLEBS: Regardless of what happens in the immediate future, authorities say Medicare will have to dip into its trust fund right now to keep up with rising costs.

Kyra, back to you.

PHILLIPS: Sean, thank you -- Miles.

O'BRIEN: News across America now.

Newly released 9/11 tapes reveal the chaos that erupted after a 340-pound gorilla escaped from the Dallas Zoo.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: It's on the loose and going after people.

UNIDENTIFIED FEMALE: What part of the zoo is it in?

UNIDENTIFIED MALE: It's at the wildlife (UNINTELLIGIBLE)

(END AUDIO CLIP)

O'BRIEN: Of course, I meant 911 tapes. Confusing when I say it that way. The gorilla went on a 40-minute rampage Thursday. It snatched a toddler and attacked three other people before being shot and killed by police.

Busted. Indiana police are looking for the parents of a preschooler who brought crack cocaine to show and tell. We kid you not. The 4-year-old boy told the kids in his class it was flour. He and his sister are now in protective custody.

The Queen of Soul is in the hospital, suffering from an undisclosed illness. Aretha Franklin was hospitalized Saturday. As of yesterday, her publicist says she was in stable condition but declined to give details. Franklin turns 62 on Thursday.

PHILLIPS: Well, we've all heard HMO horror stories. Today, the Supreme Court is taking up one of the most divisive issues, whether patients can sue their HMOs for malpractice in state court.

CNN's Ed Lavandera takes a close look at one of two cases going before the court.

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ED LAVANDERA, CNN CORRESPONDENT (voice-over): Ruby Calad says her hysterectomy operation five years ago was a nightmare.

CALAD: I couldn't walk. They had to lift me from the bed to a wheelchair.

LAVANDERA: Two days after the surgery, her doctor said she needed more time in the hospital to recover. But a Cigna Health Care employee told Calad to go home.

CALAD: That person, without the knowledge, without the experience, overrode my doctor's decision for me to stay in the hospital.

LAVANDERA: A day later, Calad was rushed to the emergency room because of complications from the operation.

CALAD: This is wrong. This unethical. This is not right. They are treating you like a piece of meat.

LAVANDERA: Cigna Health Care refused on-camera interviews for this report but in a statement, Cigna said, "Calad chose not to use the existing avenues to appeal the coverage."

Calad's story is one of two cases before the U.S. Supreme Court, which could determine if health insurance providers can be sued in state court or if those cases must remain of federal court.

(on camera) A majority of Americans get health insurance from their employers, but as it stands now, those people, like Ruby Calad, aren't allow to sue their HMOs in state court.

Recently ten states have passed laws allowing that to happen, but those laws apply only to people who bought their own insurance or work in state government.

(voice-over) Insurance providers want medical malpractice lawsuits kept in federal court, because you can only sue for the amounts of the coverage. In Ruby Calad's case that would have been for an extra night's stay in the hospital, about $1,500.

In state court, however, juries could award damages for pain and suffering and lost wages, a much more expensive reality for insurance companies.

SUSAN PISANO, AMERIC'A HEALTH INSURANCE PLANS: If what happens is there's a threat of going to state court every time there's a question about the scope of coverage for an individual, then health care could very well become unaffordable for many more employers and many more consumers.

GEORGE PARKER YOUNG, CALAD'S ATTORNEY: Right after the federal HMO act passed...

LAVANDERA: George Parker Young is Ruby Calad's attorney. He says it's an issue of accountability.

YOUNG: Really what they're saying is "We should be immune. We should be able to make these medical decisions, second-guess the doctors and have absolutely no accountability if things turn out bad."

LAVANDERA: The Supreme Court could finally decide how much legal protection HMOs should get from patients.

CALAD: A pretty tree...

LAVANDERA: Ruby Calad says sometimes a lawsuit is the only way a powerless person gets the attention of a giant insurance company.

Ed Lavandera, CNN, Dallas.

(END VIDEOTAPE)

PHILLIPS: More conflict in the Magic Kingdom. The scoop on Disney in our business report, straight ahead. And more from the September 11 commission hearings. Yet to speak, Defense Secretary Donald Rumsfeld. That's later on LIVE FROM.

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O'BRIEN: Checking news we're watching at this hour. Gas prices have reached a record high at the pump. Of course, you probably already know that.

AAA says the national average of a gallon of self-serve regular is nearly $1.74. Among the reasons cited by the AAA, duh, higher crude oil prices, low inventories, complicated clean fuel regulations and rising consumption.

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