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U.S. Preparing to Handover Former Iraqi Dictator Saddam Hussein

Aired June 28, 2004 - 14:30   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.


KYRA PHILLIPS, CNN ANCHOR: President Bush calls today a day of hope for Iraqis and a day that terrorists enemies hoped never to see. Mr. Bush and Prime Minister Tony Blair spoke to reporters at the NATO Summit in Istanbul after the early transfer of sovereignty to Iraq. Here's what Vice President Dick Cheney had to say just a short time ago.
(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: We still face serious challenges in those liberated countries as we saw last week in the bombings in Iraq. The killers who strike police stations and government buildings are not fighting foreigners, they are fighting the Iraqi people themselves. They are enemies of democracy and hope and a peaceful future for Iraq. They will not succeed.

Earlier today, two days ahead of schedule, the world witnessed the arrival of a free and sovereign Iraq and an emerging democracy with the United States to be able to call a friend.

(END VIDEO CLIP)

PHILLIPS: America's new ambassador to Iraq is on the job in Baghdad early. John Negroponte had planned to go to Baghdad at the end of the week. Along with arrival the State Department takes the lead in U.S. relations in Iraq.

The Supreme Court sides with detainees held by the Bush administration without charges. The court ruled today that U.S. citizen and terror suspect Yasser Hamdi has the right to challenge his decision and so do two foreign-born prisoners held at Guantanamo. The high court ruled that alleged dirty bomber Jose Padilla must refile his challenge in federal court.

The government is warning law enforcement and emergency responders to brace for possible terrorism over the 4th of July holiday weekend. In the new wrinkle on terrorism advisories, the FBI warns authorities to be on the look-out for booby-trapped beer coolers.

More of the day's top story, the handover of power in Iraq. It came two days earlier than expected. Now the U.S. is preparing to make its own hand-over, that of former Iraqi dictator Saddam Hussein. CNN's Kathleen Koch is at the Pentagon with more -- Kathleen. KATHLEEN KOCH, CNN CORRESPONDENT: Kyra, it was just hours after taking power that the new Iraqi government announced its intention to take custody of Saddam Hussein and 11 senior members of his regime. Now this was announced by the head of the Iraqi special tribunal that -- who said it would take place over the next few days, though a coalition military official sells CNN the transfer may not actually happen until next week.

Both White House and Pentagon officials have said that as a result of talks ongoing for the last several weeks, that the plan is for the new government to simply take legal custody of Saddam Hussein. And as the defense secretary explained today, in Turkey, the Iraqi leader will remain in the physical custody of the military coalition.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: They obviously as a sovereign government have asked us to retain physical custody but they have the responsibility for him as of today.

QUESTION: Are they in the process of preparing to take physical custody of Saddam? Is that something...

RUMSFELD: I don't know. I think they have a lot of things they are doing. As long as they know he's well kept and treated properly and will be available for trial. I don't know that that would be highest thing on their priority list.

(END VIDEO CLIP)

KOCH: Topping that priority list for the new government does remain stopping the insurgency. The U.S.-led military coalition still has responsibility for maintaining law and order in Iraq and will be working with Iraqi forces in that fight.

The new Iraqi government is offering amnesty to insurgents without blood on their hands who will offer information on more hardcore fighters. But those that don't turn themselves in could face quite harsh punishment. Iraq's defense minister telling "Newsweek" in an interview published today, quote, "We have different laws than you do. We will cut off their hands and behead them" -- Kyra.

PHILLIPS: Kathleen Koch, Live from the Pentagon, thank you.

Iraqis are united in new freedom. That's the assessment of Paul Bremer in his farewell address after transferring power today. The ex-administrator boarded plane and left Baghdad behind, not without a tear or two. But for 13 months Bremer managed the transition from dictatorship to democracy.

Our Anderson Cooper spent some time with him just before the hand-over.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, CNN ANCHOR (voice-over): In his final days in Iraq Ambassador Paul Bremer is still on the move, still trying to remain positive about what the U.S. has accomplished here.

L. PAUL BREMER, FRM. CIVIL ADMINISTRATOR, IRAQ: I think the most important thing that's happened over the last year is change in the political and economic structure of Iraq. There's a lot more to do, obviously, but they basically have got a path before them now which if they can carry it out takes them to democracy.

COOPER: Working 18-hour days, he's traveling the country, hoping to shore up support for the new Iraqi government.

BREMER: I think my biggest regret is that we're not able to mobilize a lot of the heavy-duty reconstruction work more quickly.

COOPER: Critics say Bremer was either too political or simply naive, failing to understand the culture and politics of Iraq, underestimating the economic and security needs.

BREMER: I think we focused too much on building up numbers in the security forces without focusing enough on the quality. It was particularly true in the police where I think we've got a long way to go before we get a professional police force.

COOPER: Bremer has served for 13 months now. He'll soon be heading home. Tired but proud.

BREMER: I think the American people can be proud of what we've done here. I think the people -- the families who have lost sons and daughters here, they have been involved in a noble enterprise, freeing this country from a terrible tyranny, and putting them on the path to success. And I think we can feel good about that.

COOPER: Anderson Cooper, CNN, Baghdad.

(END VIDEOTAPE)

PHILLIPS: Well self-government probably won't end the violence in Iraq. In fact, some predict it could get worse from the run-up to elections planned for next year.

Joining me now to talk about the hand-over and future of Iraq, CNN military analyst retired Major General Don Shepperd. Good to see you, General.

MAJ. GEN. DON SHEPPERD (RET.), CNN MILITARY ANALYST: Hello, Kyra.

PHILLIPS: Well let's first of all talk about the responsibility of troop. I thin we all know that attacks and insurgents attacks will happen. The extremists are not going to go away overnight. So how is it going to be tackled? What's the role of U.S. troops? Who will they report to? Who will they get their assignments from?

SHEPPERD: You bet. Well, Kyra, everything is changed and nothing has changed. The command and control of U.S. troops still is with U.S. commanders. The difference now is that Iraqis really do own Iraq. And just like if someone wanted to do something in this country's military, they have to -- we have to coordinate with the new Iraqi government to do anything, particularly offensive operations.

We can defend ourselves anywhere. We're still going to be in the same locations. We're going to be doing the same type of things. If anything tough has to be done. They will have to turn to us because they are simply not ready to do it with the new Iraqi government -- Kyra.

PHILLIPS: So does that mean the Iraqis will be involved in all U.S. military operations? I mean, even special forces? Special operations, the covert stuff?

SHEPPERD: No, it doesn't. In fact, they will be areas assigned to us where we will essentially have free reign to plan and do what we want. But other areas will be coordinated operations in which we will do coordination with and sometimes in conjunction with the Iraqi police and the new Iraqi military as they become more capable.

Right now they're not trained, they're not ready, they're not equipped. They simply cannot defend their nation. And they're going to depend on us for a considerable time to come.

PHILLIPS: Well a lot of people asking too, when does this mean the troops can start coming home?

SHEPPERD: Well, that's two things there. One, we will come home when the new government asks us to leave. So if they ask us to leave soon we'll leave soon.

On the other hand, it is my guess that we will be there for many years and right now the military authorities are planning to continue troops there at about the same level through 2007. My guess is that's a pretty guess, 2006, 2007, we'll still have considerable numbers of soldiers there.

PHILLIPS: General, I've got to ask you two quick questions about this Marine from the 1st Expeditionary Unit that has been allegedly taken captive by these terrorists. A lot of talk out there. Sympathizer, defected, abducted. What is your take from an intel perspective?

SHEPPERD: Yes, real simple. I don't know, but this is perplexing. As I look at the pictures of this gentleman, first of all, he's well clothed. He's not roughed up. His mustache is trimmed. He's not been treated like we have seen other hostages that have obviously been beat up.

The other thing is he's been missing for about a week with no announcement from the U.S. coalition forces about him being a hostage. All that's a little mysterious. He has an Arabic name, supposedly relatives in Lebanon. Lebanese or Pakistani. He's a Muslim.

But he is a Marine. He's an American. And we wish him and his family well. And we pray for his safe return. PHILLIPS: If indeed this ends up being an abduction, looking back at the situation with Nicholas Berg and Paul Johnson, there was no negotiating with these extremists. The same request on behalf of these extremists also. Let the Iraqi prisoners go, we'll let the Marine go.

But now have you the Iraqi government in charge. How does this change the dynamics?

SHEPPERD: Everything is complicated by the fact that now we have to coordinate everything we do with this new Iraqi government. If the Iraqi government wants to do something different than we want, they have the right to do that as sovereign in their country.

But of course there's going to be a lot of talk back and forth. A lot of planning back and forth. And there's going so be some rough bumps in the road. So that type of thing is going to come up probably time and time again.

And as they become more independent and better they'll exercise more responsibility for their own future. Early on it's going to be pick and choose here and there. And there are going to be some rough spots.

PHILLIPS: CNN military analyst retired Major General Don Shepperd, thanks so much.

SHEPPERD: You bet.

PHILLIPS: Well even though the hand-over is official, many families with loved ones in Iraq are still on edge. We'll take you live to Utah just ahead where the family of that missing Marine is waiting for any word on his where abouts.

(COMMERCIAL BREAK)

PHILLIPS: Checking other news across America. In Redwood City, California the defense in the Scott Peterson murder trial has resumed cross examining a police detective whose confession on the stand appeared to damage the prosecution's case. The defense contends authorities charged Peterson with killing his pregnant wife after a shoddy investigation.

Select travelers at Minneapolis-St. Paul Airport are standing in deep lines today in hopes that they won't have to later. The airport is the first in the nation to launch a pilot program letting carefully pre-screened frequent business travelers use a special lane at security checkpoints.

A Cuban-born New York Yankee player's joy in having his family back is having a striking effect on his pitching arm. Jose Contreras made his first start yesterday since his wife and children defected from Cuba last week. As his proud family looked on, Contresas pitched six shut-out innings, struck out a career high ten and led the Yanks to an 8-1 win over the Mets. Friends and admirers have said good buy to a 13-year-old boy who inspired countless people by showing how a remarkable mind could triumph over a tortured body. Mattie Stepanek suffered a metabolic muscle disease from birth. He began writing poetry at the age of three. He had muscular dystrophy.

His 2001 best seller "Heart Songs" was one of five published volumes. Mattie was the MD Association's national goodwill ambassador. He died of complications from his disease last week. Former president carter delivered the eulogy at his funeral today in Wheaton, Maryland.

More on today's historic hand-over in Iraq. Coming up next, the Iraqis are in charge but America still has a long commitment ahead. How much will it all cost?

And good news for all of you summer travelers. Your road trip just got cheaper. We'll focus on your wallet when LIVE FROM... continues.

(COMMERCIAL BREAK)

PHILLIPS: Well which is the bigger issue for you in the presidential election campaign? The economy or the conflict in Iraq? You may not need to choose. As CNN's Drew Griffin reports, the two issues are becoming deeply intertwined.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): Just over a year ago, the 101st Airborne, the Screaming Eagles, captured Najaf. The Army's 3rd Infantry Division took down Baghdad's airport. And the 3rd Battalion 4th Marine pulled down the statue. Mission accomplished. Their work was done, or so it seemed.

The Pentagon planned that by this summer troop levels would be coming down. But today the Screaming Eagles, the 3rd I.D., the 34 Marines and others expect to go back.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Some are preparing to head out...

(BOOS)

BUSH: ... for a second tour.'

(BOOS)

GRIFFIN: For the foreseeable future, 138,000 troops will stay in Iraq. And for the foreseeable future, taxpayers will foot the bill, $30,000 a month for each soldier.

(on camera): The White House says the war in Iraq has cost nearly $120 billion so far and is asking Congress for 25 billion more. Even in federal terms, and here on Wall Street, that's starting to sound like real money. The question is, can we afford it? Can the U.S. taxpayer continue to support a mission with a monthly bill of $4 billion?

DAVID WYSS, CHIEF ECONOMIST, STANDARD AND POOR: I'm not saying it's a drop in the bucket but we can do it.

GRIFFIN (voice-over): David Wyss, chief economist at standard and poor's.

WYSS: But if this war continues for another four of five years, if we're still having military actions, then it does start to become an issue.

In the long term, he says, raising the deficit to pay for the war can increase inflation and pull money from other government programs. In the short term, Iraq is already affecting the U.S. economy. Instability in the Persian Gulf raises the cost of oil.

WYSS: Basically money you spend filling up the gas tank is money you don't have to spend at the shopping mall. It's hard to get job growth in the United States.

GRIFFIN: Many people expected lower oil prices because the Bush administration forecast abundant oil from the new Iraq. Although there was evidence before the war that Iraq's oil infrastructure was badly neglected, the administration talked as though production would soon double.

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: The oil revenues of that country could bring between $50 and $100 billion over the course of the next two or three years. We're dealing with a country that can really finance its own reconstruction and relatively soon.

GRIFFIN: This year Iraq's oil exports are on target to hit $15 billion, not $50.

ED CHOW, FORMER EXECUTIVE, CHEVRON: It was wishful thinking. A lot of wishful thinking.

GRIFFIN: Ed Chow is a former oil company executive who's worked on international deals. He says Iraq has the second largest oil reserves in the world, but that billions of additional dollars are needed to explore, drill and pump it.

CHOW: In the most optimistic scenario, you may be able to achieve doubling of production in ten years. That would be a remarkable achievement.

GRIFFIN: Remarkable under ideal conditions. But in Iraq, pipelines and ports are prime targets of saboteurs. There have been more than 130 attacks in the last seven months.

WOLFOWITZ: When we can get security in Iraq and we are not there yet, I would -- I think people who want to invest in the Arab world are going to see Iraq as a base to operate because Iraq has huge resources. We are talking about an international basket case, we're talking about a country with rich natural resources, by which, of course, we mean mostly oil. GRIFFIN: The administration talks long-term, predicting Iraqi forces will bear more of the burden but vowing to send as many American troops as necessary.

Can the U.S. afford this mission? The president says the country and the world cannot afford to lose.

BUSH: America and all the world will be safer when hope has returned to the Middle East.

(END VIDEOTAPE)

PHILLIPS: Well the meter for U.S. taxpayers keeps ticking, but Iraqis have sovereignty two days early? Why now? Log on to cnn.com for analysis of the early turnover of Iraq.

(MARKET UPDATE)

PHILLIPS: A secret note at the NATO Summit this morning. That's right. Our Frank Buckley actually got a copy of it. It's the news that would make headlines around the world. We're live from Baghdad and Istanbul.

Plus, the strange disappearance of a U.S. Marine in Iraq. Is Corporal Hussoun the latest hostage?

An emotional good-bye to Mattie Stepanek, 13-year-old poet who became an American celebrity.

(COMMERCIAL BREAK)

PHILLIPS: Having the hiccups can be quite annoying. But what if you have them for nine months straight? In our "Daily Dose" of health news, CNN senior medical correspondent Dr. Sanjay Gupta has one man's story and his unique cure.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT (voice-over): When most of us get hiccups it's because we swallowed air or ate too much too fast or got excited. Hiccups cause the diaphragm to spasm.

But in Shane Shafer's case he had a stroke two years ago that damaged his brain stem causing his brain to send a signal to hiccup over and over again. He'd had the hiccups for nine months straight. He hiccupped every four seconds whether he was awake or asleep.

He tried everything. The regular cures and then the drugs normally prescribed for chronic hiccups. Nothing worked. Shane was reduced to gagging himself to vomit which brought him about an hour and a half of relief.

He would also give himself injections of a narcotic called Stadol. But the drug would wear off in about an hour so he had to inject himself again up to 10 to 12 times a day at a cost of $10 an injection. At 100-plus dollars a day and with insurance not covering it, he had to find a better answer.

Finally, he went to see Dr. Brian Paine, a neurosurgeon at the LSU Health Science Center. He brainstormed with other doctors and they decided to try attaching a stimulator to the Vegas nerve, which is the nerve that carries the impulse that tells the diaphragm to spasm.

The battery for the stimulator is implanted in the chest and a stimulator wire is wrapped around the Vegas nerve in the neck. The stimulator sends an impulse to break the hiccup signal from the brain and the spasms stop.

This is the first time the stimulator has ever been used to treat chronic hiccups. But in his case it seemed to do the trick. After surgery, Shane is feeling great. No hiccups.

SHANE SHAFER, CHRONIC HICCUP PATIENT: A hundred percent different. The hiccups are gone. A little raspy in the throat, but I can deal with that.

GUPTA: He went home Friday. Doctors will leave the implant in until the battery wears out. It will take five or six years. If the hiccups come back, it will be easy to fix. Just get the battery replaced.

Dr. Sanjay Gupta, CNN, Atlanta.

(END VIDEOTAPE)

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Aired June 28, 2004 - 14:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: President Bush calls today a day of hope for Iraqis and a day that terrorists enemies hoped never to see. Mr. Bush and Prime Minister Tony Blair spoke to reporters at the NATO Summit in Istanbul after the early transfer of sovereignty to Iraq. Here's what Vice President Dick Cheney had to say just a short time ago.
(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: We still face serious challenges in those liberated countries as we saw last week in the bombings in Iraq. The killers who strike police stations and government buildings are not fighting foreigners, they are fighting the Iraqi people themselves. They are enemies of democracy and hope and a peaceful future for Iraq. They will not succeed.

Earlier today, two days ahead of schedule, the world witnessed the arrival of a free and sovereign Iraq and an emerging democracy with the United States to be able to call a friend.

(END VIDEO CLIP)

PHILLIPS: America's new ambassador to Iraq is on the job in Baghdad early. John Negroponte had planned to go to Baghdad at the end of the week. Along with arrival the State Department takes the lead in U.S. relations in Iraq.

The Supreme Court sides with detainees held by the Bush administration without charges. The court ruled today that U.S. citizen and terror suspect Yasser Hamdi has the right to challenge his decision and so do two foreign-born prisoners held at Guantanamo. The high court ruled that alleged dirty bomber Jose Padilla must refile his challenge in federal court.

The government is warning law enforcement and emergency responders to brace for possible terrorism over the 4th of July holiday weekend. In the new wrinkle on terrorism advisories, the FBI warns authorities to be on the look-out for booby-trapped beer coolers.

More of the day's top story, the handover of power in Iraq. It came two days earlier than expected. Now the U.S. is preparing to make its own hand-over, that of former Iraqi dictator Saddam Hussein. CNN's Kathleen Koch is at the Pentagon with more -- Kathleen. KATHLEEN KOCH, CNN CORRESPONDENT: Kyra, it was just hours after taking power that the new Iraqi government announced its intention to take custody of Saddam Hussein and 11 senior members of his regime. Now this was announced by the head of the Iraqi special tribunal that -- who said it would take place over the next few days, though a coalition military official sells CNN the transfer may not actually happen until next week.

Both White House and Pentagon officials have said that as a result of talks ongoing for the last several weeks, that the plan is for the new government to simply take legal custody of Saddam Hussein. And as the defense secretary explained today, in Turkey, the Iraqi leader will remain in the physical custody of the military coalition.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: They obviously as a sovereign government have asked us to retain physical custody but they have the responsibility for him as of today.

QUESTION: Are they in the process of preparing to take physical custody of Saddam? Is that something...

RUMSFELD: I don't know. I think they have a lot of things they are doing. As long as they know he's well kept and treated properly and will be available for trial. I don't know that that would be highest thing on their priority list.

(END VIDEO CLIP)

KOCH: Topping that priority list for the new government does remain stopping the insurgency. The U.S.-led military coalition still has responsibility for maintaining law and order in Iraq and will be working with Iraqi forces in that fight.

The new Iraqi government is offering amnesty to insurgents without blood on their hands who will offer information on more hardcore fighters. But those that don't turn themselves in could face quite harsh punishment. Iraq's defense minister telling "Newsweek" in an interview published today, quote, "We have different laws than you do. We will cut off their hands and behead them" -- Kyra.

PHILLIPS: Kathleen Koch, Live from the Pentagon, thank you.

Iraqis are united in new freedom. That's the assessment of Paul Bremer in his farewell address after transferring power today. The ex-administrator boarded plane and left Baghdad behind, not without a tear or two. But for 13 months Bremer managed the transition from dictatorship to democracy.

Our Anderson Cooper spent some time with him just before the hand-over.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, CNN ANCHOR (voice-over): In his final days in Iraq Ambassador Paul Bremer is still on the move, still trying to remain positive about what the U.S. has accomplished here.

L. PAUL BREMER, FRM. CIVIL ADMINISTRATOR, IRAQ: I think the most important thing that's happened over the last year is change in the political and economic structure of Iraq. There's a lot more to do, obviously, but they basically have got a path before them now which if they can carry it out takes them to democracy.

COOPER: Working 18-hour days, he's traveling the country, hoping to shore up support for the new Iraqi government.

BREMER: I think my biggest regret is that we're not able to mobilize a lot of the heavy-duty reconstruction work more quickly.

COOPER: Critics say Bremer was either too political or simply naive, failing to understand the culture and politics of Iraq, underestimating the economic and security needs.

BREMER: I think we focused too much on building up numbers in the security forces without focusing enough on the quality. It was particularly true in the police where I think we've got a long way to go before we get a professional police force.

COOPER: Bremer has served for 13 months now. He'll soon be heading home. Tired but proud.

BREMER: I think the American people can be proud of what we've done here. I think the people -- the families who have lost sons and daughters here, they have been involved in a noble enterprise, freeing this country from a terrible tyranny, and putting them on the path to success. And I think we can feel good about that.

COOPER: Anderson Cooper, CNN, Baghdad.

(END VIDEOTAPE)

PHILLIPS: Well self-government probably won't end the violence in Iraq. In fact, some predict it could get worse from the run-up to elections planned for next year.

Joining me now to talk about the hand-over and future of Iraq, CNN military analyst retired Major General Don Shepperd. Good to see you, General.

MAJ. GEN. DON SHEPPERD (RET.), CNN MILITARY ANALYST: Hello, Kyra.

PHILLIPS: Well let's first of all talk about the responsibility of troop. I thin we all know that attacks and insurgents attacks will happen. The extremists are not going to go away overnight. So how is it going to be tackled? What's the role of U.S. troops? Who will they report to? Who will they get their assignments from?

SHEPPERD: You bet. Well, Kyra, everything is changed and nothing has changed. The command and control of U.S. troops still is with U.S. commanders. The difference now is that Iraqis really do own Iraq. And just like if someone wanted to do something in this country's military, they have to -- we have to coordinate with the new Iraqi government to do anything, particularly offensive operations.

We can defend ourselves anywhere. We're still going to be in the same locations. We're going to be doing the same type of things. If anything tough has to be done. They will have to turn to us because they are simply not ready to do it with the new Iraqi government -- Kyra.

PHILLIPS: So does that mean the Iraqis will be involved in all U.S. military operations? I mean, even special forces? Special operations, the covert stuff?

SHEPPERD: No, it doesn't. In fact, they will be areas assigned to us where we will essentially have free reign to plan and do what we want. But other areas will be coordinated operations in which we will do coordination with and sometimes in conjunction with the Iraqi police and the new Iraqi military as they become more capable.

Right now they're not trained, they're not ready, they're not equipped. They simply cannot defend their nation. And they're going to depend on us for a considerable time to come.

PHILLIPS: Well a lot of people asking too, when does this mean the troops can start coming home?

SHEPPERD: Well, that's two things there. One, we will come home when the new government asks us to leave. So if they ask us to leave soon we'll leave soon.

On the other hand, it is my guess that we will be there for many years and right now the military authorities are planning to continue troops there at about the same level through 2007. My guess is that's a pretty guess, 2006, 2007, we'll still have considerable numbers of soldiers there.

PHILLIPS: General, I've got to ask you two quick questions about this Marine from the 1st Expeditionary Unit that has been allegedly taken captive by these terrorists. A lot of talk out there. Sympathizer, defected, abducted. What is your take from an intel perspective?

SHEPPERD: Yes, real simple. I don't know, but this is perplexing. As I look at the pictures of this gentleman, first of all, he's well clothed. He's not roughed up. His mustache is trimmed. He's not been treated like we have seen other hostages that have obviously been beat up.

The other thing is he's been missing for about a week with no announcement from the U.S. coalition forces about him being a hostage. All that's a little mysterious. He has an Arabic name, supposedly relatives in Lebanon. Lebanese or Pakistani. He's a Muslim.

But he is a Marine. He's an American. And we wish him and his family well. And we pray for his safe return. PHILLIPS: If indeed this ends up being an abduction, looking back at the situation with Nicholas Berg and Paul Johnson, there was no negotiating with these extremists. The same request on behalf of these extremists also. Let the Iraqi prisoners go, we'll let the Marine go.

But now have you the Iraqi government in charge. How does this change the dynamics?

SHEPPERD: Everything is complicated by the fact that now we have to coordinate everything we do with this new Iraqi government. If the Iraqi government wants to do something different than we want, they have the right to do that as sovereign in their country.

But of course there's going to be a lot of talk back and forth. A lot of planning back and forth. And there's going so be some rough bumps in the road. So that type of thing is going to come up probably time and time again.

And as they become more independent and better they'll exercise more responsibility for their own future. Early on it's going to be pick and choose here and there. And there are going to be some rough spots.

PHILLIPS: CNN military analyst retired Major General Don Shepperd, thanks so much.

SHEPPERD: You bet.

PHILLIPS: Well even though the hand-over is official, many families with loved ones in Iraq are still on edge. We'll take you live to Utah just ahead where the family of that missing Marine is waiting for any word on his where abouts.

(COMMERCIAL BREAK)

PHILLIPS: Checking other news across America. In Redwood City, California the defense in the Scott Peterson murder trial has resumed cross examining a police detective whose confession on the stand appeared to damage the prosecution's case. The defense contends authorities charged Peterson with killing his pregnant wife after a shoddy investigation.

Select travelers at Minneapolis-St. Paul Airport are standing in deep lines today in hopes that they won't have to later. The airport is the first in the nation to launch a pilot program letting carefully pre-screened frequent business travelers use a special lane at security checkpoints.

A Cuban-born New York Yankee player's joy in having his family back is having a striking effect on his pitching arm. Jose Contreras made his first start yesterday since his wife and children defected from Cuba last week. As his proud family looked on, Contresas pitched six shut-out innings, struck out a career high ten and led the Yanks to an 8-1 win over the Mets. Friends and admirers have said good buy to a 13-year-old boy who inspired countless people by showing how a remarkable mind could triumph over a tortured body. Mattie Stepanek suffered a metabolic muscle disease from birth. He began writing poetry at the age of three. He had muscular dystrophy.

His 2001 best seller "Heart Songs" was one of five published volumes. Mattie was the MD Association's national goodwill ambassador. He died of complications from his disease last week. Former president carter delivered the eulogy at his funeral today in Wheaton, Maryland.

More on today's historic hand-over in Iraq. Coming up next, the Iraqis are in charge but America still has a long commitment ahead. How much will it all cost?

And good news for all of you summer travelers. Your road trip just got cheaper. We'll focus on your wallet when LIVE FROM... continues.

(COMMERCIAL BREAK)

PHILLIPS: Well which is the bigger issue for you in the presidential election campaign? The economy or the conflict in Iraq? You may not need to choose. As CNN's Drew Griffin reports, the two issues are becoming deeply intertwined.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): Just over a year ago, the 101st Airborne, the Screaming Eagles, captured Najaf. The Army's 3rd Infantry Division took down Baghdad's airport. And the 3rd Battalion 4th Marine pulled down the statue. Mission accomplished. Their work was done, or so it seemed.

The Pentagon planned that by this summer troop levels would be coming down. But today the Screaming Eagles, the 3rd I.D., the 34 Marines and others expect to go back.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Some are preparing to head out...

(BOOS)

BUSH: ... for a second tour.'

(BOOS)

GRIFFIN: For the foreseeable future, 138,000 troops will stay in Iraq. And for the foreseeable future, taxpayers will foot the bill, $30,000 a month for each soldier.

(on camera): The White House says the war in Iraq has cost nearly $120 billion so far and is asking Congress for 25 billion more. Even in federal terms, and here on Wall Street, that's starting to sound like real money. The question is, can we afford it? Can the U.S. taxpayer continue to support a mission with a monthly bill of $4 billion?

DAVID WYSS, CHIEF ECONOMIST, STANDARD AND POOR: I'm not saying it's a drop in the bucket but we can do it.

GRIFFIN (voice-over): David Wyss, chief economist at standard and poor's.

WYSS: But if this war continues for another four of five years, if we're still having military actions, then it does start to become an issue.

In the long term, he says, raising the deficit to pay for the war can increase inflation and pull money from other government programs. In the short term, Iraq is already affecting the U.S. economy. Instability in the Persian Gulf raises the cost of oil.

WYSS: Basically money you spend filling up the gas tank is money you don't have to spend at the shopping mall. It's hard to get job growth in the United States.

GRIFFIN: Many people expected lower oil prices because the Bush administration forecast abundant oil from the new Iraq. Although there was evidence before the war that Iraq's oil infrastructure was badly neglected, the administration talked as though production would soon double.

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: The oil revenues of that country could bring between $50 and $100 billion over the course of the next two or three years. We're dealing with a country that can really finance its own reconstruction and relatively soon.

GRIFFIN: This year Iraq's oil exports are on target to hit $15 billion, not $50.

ED CHOW, FORMER EXECUTIVE, CHEVRON: It was wishful thinking. A lot of wishful thinking.

GRIFFIN: Ed Chow is a former oil company executive who's worked on international deals. He says Iraq has the second largest oil reserves in the world, but that billions of additional dollars are needed to explore, drill and pump it.

CHOW: In the most optimistic scenario, you may be able to achieve doubling of production in ten years. That would be a remarkable achievement.

GRIFFIN: Remarkable under ideal conditions. But in Iraq, pipelines and ports are prime targets of saboteurs. There have been more than 130 attacks in the last seven months.

WOLFOWITZ: When we can get security in Iraq and we are not there yet, I would -- I think people who want to invest in the Arab world are going to see Iraq as a base to operate because Iraq has huge resources. We are talking about an international basket case, we're talking about a country with rich natural resources, by which, of course, we mean mostly oil. GRIFFIN: The administration talks long-term, predicting Iraqi forces will bear more of the burden but vowing to send as many American troops as necessary.

Can the U.S. afford this mission? The president says the country and the world cannot afford to lose.

BUSH: America and all the world will be safer when hope has returned to the Middle East.

(END VIDEOTAPE)

PHILLIPS: Well the meter for U.S. taxpayers keeps ticking, but Iraqis have sovereignty two days early? Why now? Log on to cnn.com for analysis of the early turnover of Iraq.

(MARKET UPDATE)

PHILLIPS: A secret note at the NATO Summit this morning. That's right. Our Frank Buckley actually got a copy of it. It's the news that would make headlines around the world. We're live from Baghdad and Istanbul.

Plus, the strange disappearance of a U.S. Marine in Iraq. Is Corporal Hussoun the latest hostage?

An emotional good-bye to Mattie Stepanek, 13-year-old poet who became an American celebrity.

(COMMERCIAL BREAK)

PHILLIPS: Having the hiccups can be quite annoying. But what if you have them for nine months straight? In our "Daily Dose" of health news, CNN senior medical correspondent Dr. Sanjay Gupta has one man's story and his unique cure.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT (voice-over): When most of us get hiccups it's because we swallowed air or ate too much too fast or got excited. Hiccups cause the diaphragm to spasm.

But in Shane Shafer's case he had a stroke two years ago that damaged his brain stem causing his brain to send a signal to hiccup over and over again. He'd had the hiccups for nine months straight. He hiccupped every four seconds whether he was awake or asleep.

He tried everything. The regular cures and then the drugs normally prescribed for chronic hiccups. Nothing worked. Shane was reduced to gagging himself to vomit which brought him about an hour and a half of relief.

He would also give himself injections of a narcotic called Stadol. But the drug would wear off in about an hour so he had to inject himself again up to 10 to 12 times a day at a cost of $10 an injection. At 100-plus dollars a day and with insurance not covering it, he had to find a better answer.

Finally, he went to see Dr. Brian Paine, a neurosurgeon at the LSU Health Science Center. He brainstormed with other doctors and they decided to try attaching a stimulator to the Vegas nerve, which is the nerve that carries the impulse that tells the diaphragm to spasm.

The battery for the stimulator is implanted in the chest and a stimulator wire is wrapped around the Vegas nerve in the neck. The stimulator sends an impulse to break the hiccup signal from the brain and the spasms stop.

This is the first time the stimulator has ever been used to treat chronic hiccups. But in his case it seemed to do the trick. After surgery, Shane is feeling great. No hiccups.

SHANE SHAFER, CHRONIC HICCUP PATIENT: A hundred percent different. The hiccups are gone. A little raspy in the throat, but I can deal with that.

GUPTA: He went home Friday. Doctors will leave the implant in until the battery wears out. It will take five or six years. If the hiccups come back, it will be easy to fix. Just get the battery replaced.

Dr. Sanjay Gupta, CNN, Atlanta.

(END VIDEOTAPE)

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