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Iran: Risk vs. Benefits; Ward Churchill Remains Defiant; Asked and Answered

Aired February 09, 2005 - 14:00   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.


KYRA PHILLIPS, CNN ANCHOR: Inspections conducted, weapons suspected, sanctions suggested. Anxieties heightened once again over a Middle Eastern country the U.S. sends runs afoul of U.N. protocols. This time it's Iran, and Secretary of State Condoleezza Rice making the case for a hard line on nuclear research that Tehran insists is peaceful.
At NATO headquarters in Brussels today, Rice said that the next steps are in the offing should Iran play cat and mouse with the U.N. nuclear watchdogs. But those steps are sanctions, Rice says, not military action. At least not yet. The later prospect is on Donald Rumsfeld's agenda, with lots of other issues, as he prepares to meet with NATO counterparts in the south of France.

Back at the White House, meanwhile, President Bush laid out the big picture in a meeting with the president of Poland.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The Iranians just need to know that the free world is working together to send a very clear message. You know, don't develop a nuclear weapon. And the reason we're sending that message is because Iran, with a nuclear weapon, would be a very destabilizing force in the world.

(END VIDEO CLIP)

PHILLIPS: Possible, yes, effective, maybe. A long-term solution, that's the very open question as officials and observers mull the risks versus benefits of even a limited military strike on Iran.

Here's CNN Pentagon correspondent Barbara Starr.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): One hundred and fifty miles southwest of Tehran, the Iraq heavy water plant, a facility international inspectors believe is critical to Iran's nuclear weapons program, one of many suspected nuclear sites the U.S. says are well hidden around the country.

Finding all of the sites would be just one problem in launching any so-called limited strike to take them out. To avoid Iranian military on the ground, the U.S. would likely fire from long distance, using Tomahawk cruise muscles from ships in the Persian Gulf and precision bombs from the long range B-2 stealth bomber.

But military and security experts agree Iran's religious leaders would strike back hard.

KEN POLLACK, BROOKINGS INSTITUTION: There's no reason to believe that the Iranians would see them limited. In fact, Iranians might choose to retaliate in a far less limited fashion, in particular, they're likely to try to employ terrorist attacks.

STARR: Iran's longstanding support for Hezbollah and its ability to marshal terrorist attacks in retaliation is a major concern. But there is more. Experts say Iran could retaliate with a missile strike. With a range of 1,500 kilometers, its Shahab 3 (ph) and other missiles could hit U.S. troops in Iraq and Kuwait, strike Israel, and even reach Turkey. Iran's mobile launchers would be difficult to preemptively destroy.

Former Defense Secretary William Cohen is an ardent supporter of diplomacy with Iran, and he knows the limits of the limited-strike option.

In 1998, the U.S. conducted air strikes against Saddam Hussein's missile facilities, hoping to halt his missile production for two years.

RICHARD COHEN, FMR. SECY. OF DEFENSE: You can reconstitute facilities that are destroyed, and so unless you're talking about all- out devastation and an occupation of a country with widespread destruction, limited attacks are good on a temporary basis. But again, the downside is you may end up causing a national -- a rise in nationalism and a revolution of a different sort against the United States.

STARR (on camera): Could the U.S. military launch a strike against Iran? The answer is, of course, yes. But the Bush administration is making it clear diplomacy is the preferred option. No military action against Iran is anticipated.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

PHILLIPS: Iraq is reeling from a fresh wave of post-election violence. A government official was kidnapped in Baghdad. The man is a senior member of the Interior Ministry. Witnesses say the gunman in another vehicle fired at his car on the highway, pulled over and then put him in the trunk and drove away.

An Iraqi journalist working for a U.S.-funded TV network has been killed in southern Iraq. The Al-Hurrah correspondent was shot dead while standing by his car just outside his home. His 3-year-old son also was killed.

Meantime, Iraqi officials now say it will be several more days until they have results of the January 30 election. They're recounting ballots from about 300 boxes that weren't properly sealed. He compared World Trade Center victims to Nazis and he outraged Americans. Now he's getting a standing ovation. Ward Churchill, the University of Colorado professor who came under fire for his essay, has gotten a big boost from his students. And as reporter Cheryl Preheim of CNN affiliate KUSA reports, the ethnic studies professor remains defiant.

(BEGIN VIDEOTAPE)

CHERYL PREHEIM, REPORTER, KUSA (voice-over): Professor Ward Churchill says he came here to stand behind his words, words he says have been misunderstood and taken out of context.

PROF. WARD CHURCHILL, UNIV. OF COLORADO: I'm not backing up an inch. I owe no one an apology, clarification.

PREHEIM: He told the crowd his essay was an expression about the U.S. government's treatment of many other countries around the world.

CHURCHILL: And what I said was when you treat people this way, when you devalue, demean and degrade others to this point, naturally and inevitably what you're putting out will blow back on you, and that's what happened.

PREHEIM: To questions about whether he feels sorrow for the victims of 9/11...

CHURCHILL: And the answer is yes, of course. And it's not one wit more proportionately significant than the mourning, the sorrow I experience for every single one of those Iraqi children.

PREHEIM: Every one of the 1,100 seats was full. Hundreds of others stood in the back, and a few hundred more listened outside. Most here were Churchill's supporters. Some critics came, too, to listen. Others confronted the professor.

UNIDENTIFIED MALE: Where do you get the gall to call the people who died in 9/11 technocrats when you sit around and get a $90,000 paycheck from the government you purport to hate?

PREHEIM: Professor Ward Churchill says he will never back down from the teaching the opinions he has a right as an American to have and share publicly.

CHURCHILL: I do not work for the taxpayers of the state of Colorado. I do not work for Bill Owens. I work for you.

(APPLAUSE)

(END VIDEOTAPE)

PHILLIPS: That report, once again, from Cheryl Preheim of CNN affiliate KUSA in Boulder. Colorado Governor Bill Owens has called for Churchill to be fired. School officials are deciding if they'll do just that. Moving on to a word problem for you. Take 250 potential jurors times seven pages, and then multiply by billable hours for lawyers to read through all of the completed questionnaires. Oh, and forget the math.

CNN's Ted Rowlands has a hot-off-the-presses copy of the answers given by prospective members of the Michael Jackson jury. He joins us from our L.A. bureau.

Hi, Ted.

TED ROWLANDS, CNN ANCHOR: Hi, Kyra.

Yes, we have -- well, eventually we'll have 250 of these. We're processing them right now. And one thing we can conclude is that the attorneys on both sides have been very busy.

These questionnaires are eight pages a piece. And with 250 potential jurors, as you said, that means 200 -- or 2,000 pages to go through to try to weed out the jurors, potential jurors in the Michael Jackson case.

We were given a copy of this questionnaire last week as to the questions being asked of the jurors. Now we are seeing what those answers are. And the questions vary.

There's -- one of the questions on here, "Have you or any relative or close friend ever been accused of inappropriate sexual behavior?" Another, "Have you or any relative or close friend been the victim of any inappropriate sexual behavior?"

We have been able to look through some of these documents, about 60 of them. And really, you can't tell much from what we've looked at so far. We've seen people from the ages of 18 all the way to 73.

At this point, the jury selection process in the Jackson case stands at sort of a recess right now. All week it has been dark because Jackson's lead attorney, Tom Mesereau, lost a family member. His sister died, and the court has allowed him to grieve and has given everybody a week off.

Both sides are poring over these jury questionnaires. On Monday, they will be able to ask specific questions from these questionnaires of these jurors as they come in. In the end, the 250 will be pared down to 12 jurors and eight alternates in this case.

It is a monumental task and a very important one. Legal experts, many of them, believe that a case can be won or lost in the jury selection process. So it is safe to say that the stakes a very high at this point -- at this part of the case. And both sides have jury consultants, both sides poring over these documents and have been for the better part of a week.

They'll have their chance to get more information starting Monday. And Michael Jackson is expected to be in court in Santa Maria on Monday when these questions are posed to these potential jurors one by one -- Kyra.

PHILLIPS: All right. Ted Rowlands, thanks so much.

A Marine wounded in Iraq war gets a second wound.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It kind of seems like I've told a lie almost.

(END VIDEO CLIP)

PHILLIPS: The military takes back his Purple Heart. Find out why just ahead on LIVE FROM.

And check out your pocket change. Some of your quarters could be worth a whole lot more than the face value.

The world's tiniest baby reaches a new milestone. We'll show you what it is later on LIVE FROM.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

PHILLIPS: Well, amid the hoopla over the president's new budget, there's one aspect of it you might be missing. It won't really be a budget until Congress takes a look at. And that process, according to our Bruce Morton, will transform it entirely.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): The first thing you need to know about the president's budget is that it doesn't exist. Sure, there's a book and all those briefings. But likely nothing close to what he's asking for will ever happen because it all has to go through Congress.

Last year Mr. Bush asked Congress to eliminate 65 government programs for a savings of $4.9 billion. Congress eliminated just four of the 65, saving less than $300 million.

This year he's asking Congress to cut or eliminate 150 programs. How well do you think he'll do?

(on camera): For every government program there's probably an industry that gives money to politicians that wants the program kept alive. There may be a trade union that gives money that wants to keep those jobs. There will be a congressional subcommittee that supervises the program. And if it dies, what will they be in charge of?

(voice-over): When Ronald Reagan said the closest thing to eternal life on this Earth was a government program he wasn't kidding. And it isn't just the programs. It's the little goodies, a park for your district, a research program for the college in my district that congressman stick into spending bills. Earmarks they're called.

The watchdog group Citizens Against Government Waste estimates that in fiscal 2005 there were 13,900 earmarks worth just under $26.5 billion. A record.

The president can veto appropriations bills, of course. The whole bill. He doesn't have a line item veto. But this president has never done that.

In fact, the whole issue has changed. Deficit hawks used to be Republicans. The constitutional amendment to balance the budget was part of Newt Gingrich's contract with America back in the 1990s when the Republicans won control of the House. But it was Democrat Bill Clinton who actually ended deficits and ran surpluses. And so the issue has switched sides.

KEATING HOLLAND, CNN POLITICAL DIRECTOR: Now Democrats are almost twice as likely as Republicans to say that the federal deficit is a very important issue the Congress and the president have to deal with in the coming year.

MORTON: It's way too early to know what the budget Congress actually passes will look like. What we know is it won't look much like the one the president sent them this week. It never does.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: One of the president's pet projects, the Medicare prescription drug plan, is now expected to take a bigger bite out of the hand that feeds it. Administration officials are offering a sharply higher estimate of how much the plan will cost. The increase is blamed on rising prices for drugs and the growing number of retirees.

The original tag was expected to be $400 billion through 2013. Now administration officials estimate it will be in the neighborhood of $720 billion over the 10-year period ending 2015. The plan kicks in, in January.

Another contentious issue on Capitol Hill, overhauling Social Security. Some of the president's pointmen on money matters are testifying before the House Budget Committee today. Treasury Secretary John Snow and others are pitching Mr. Bush's plan to partially privatize Social Security. But as expected, it's a hard sale, especially among Democrats.

Well, they're some of the most emotional gut-wrenching phone calls ever made, emergency calls during the September 11 attacks from inside the World Trade Center. So far, they've remained sealed, but at this hour relatives of the victims are fighting for the right to hear them.

Our Deborah Feyerick has their story.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): When the second plane hit the World Trade Center, insurance broker Richard Gabrielle was blown back into a marble wall, pinning his legs. Any chance of escape crushed.

MONICA GABRIELLE, WIFE OF 9/11 VICTIM: He had no choice but to wait for someone to help him out. He couldn't walk. He was pinned.

FEYERICK: His widow, Monica, learned what happened days later from co-workers who made it out. But Sally and Al Regenhard, whose son Christian was a firefighter, say they've never been told the haunting details of his final minutes.

SALLY REGENHARD, MOTHER OF 9/11 VICTIM: When I look at the picture, I realize what happened and I realize that he has disappeared.

FEYERICK: The two families feel there's more to know. They're fighting to unseal thousands of emergency 911 calls many of them made from inside the towers.

NORMAL SIEGEL, ATTORNEY FOR 9/11 FAMILIES: What we're talking about history, making sure that history is told to my grandchildren and their grandchildren what actually happened that horrific morning.

FEYERICK: New York City sealed those 911 calls, along with interviews from 500 firefighter made soon after the tragedy. In court papers, the city says the tapes would be grist for sensational exploitation and that if there were any practical information to be gleaned from those records it would already have been harvested.

The September 11th Commission did get to hear those 9/11 calls and examine the firefighter interviews. Among their findings, that emergency operators did not have information vital to getting people out. The city says that problem has been fixed, with ranking officers giving greater guidance to operators during emergencies.

But for widow Monica Gabrielle, those changes are just the start of the campaign to make skyscrapers safer.

GABRIELLE: That would essentially be the dead speaking back to the living about what went wrong, what deadly mistakes were made that prevented these people from getting out. And we can only learn from that information.

AL REGENHARD, FATHER OF 9/11 VICTIM: If this happens in the future we can deal with it better. I owe my son that. That's his legacy.

FEYERICK: A legacy and a search for truth. The painful truth of final moments and final words.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE) PHILLIPS: Straight ahead, the U.S. Marines want the medal they awarded back. The injured Marine is shocked to find out he can't keep his Purple Heart. Find out why straight ahead.

And the dancer becomes the dance. The director of the legendary Alvin Ailey American Dance Theater joins us to talk about her latest moves just ahead on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: And did the year of the monkey fly by or what? It's New Year's Day according to the ancient Chinese lunar calendar, and observed by hundreds of millions of people around the world. And look, giant dancing chickens. This all segues together, I promise.

A children's group in Beijing right here welcoming the year of the rooster with song and pageantry and really cute faces. And across Asia today, China, Japan and the Koreas, the South Pacific and Asian communities, and nearly every country, prayer, gift-giving, fortune telling, best wishes for the new year. Legend holds that people born in the year of the rooster are confident, flamboyant and obstinate. Well, where's Miles O'Brien when you need him?

All right. Leading business headlines, a human resources shuffle at the top tier of the Hewlett-Packard -- of Hewlett-Packard, rather. The struggling company computer makers controversial CEO is out. That's a lot of words you got there.

Good for the company, bad for the company? It remains to be seen. Let's talk about it with CNN's Allan Chernoff in New York.

(STOCK MARKET REPORT)

PHILLIPS: Straight ahead on LIVE FROM, a Marine corporal home from Iraq finds himself in an uncomfortable position. Uncle Sam awarded him a Purple Heart and then took it back. Find out why.

Plus, doctors think she's the smallest baby ever born. She's a fighter and she's reached a major milestone.

(COMMERCIAL BREAK)

PHILLIPS: Checking stories "Now in the News."

The Iraqi recount. Officials say about 300 ballot boxes were not properly sealed during the landmark elections last month. So they're counting the votes for a second time. This means no election results until the weekend at the earliest.

An earthquakes sparked panic today in Indonesia's Aceh province. Buildings shook and people ran screaming into the streets. It was a powerful reminder of the December 26 earthquake and tsunamis which killed more than 100,000 Indonesians.

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 February 9, 2005 - 14:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Inspections conducted, weapons suspected, sanctions suggested. Anxieties heightened once again over a Middle Eastern country the U.S. sends runs afoul of U.N. protocols. This time it's Iran, and Secretary of State Condoleezza Rice making the case for a hard line on nuclear research that Tehran insists is peaceful.
At NATO headquarters in Brussels today, Rice said that the next steps are in the offing should Iran play cat and mouse with the U.N. nuclear watchdogs. But those steps are sanctions, Rice says, not military action. At least not yet. The later prospect is on Donald Rumsfeld's agenda, with lots of other issues, as he prepares to meet with NATO counterparts in the south of France.

Back at the White House, meanwhile, President Bush laid out the big picture in a meeting with the president of Poland.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The Iranians just need to know that the free world is working together to send a very clear message. You know, don't develop a nuclear weapon. And the reason we're sending that message is because Iran, with a nuclear weapon, would be a very destabilizing force in the world.

(END VIDEO CLIP)

PHILLIPS: Possible, yes, effective, maybe. A long-term solution, that's the very open question as officials and observers mull the risks versus benefits of even a limited military strike on Iran.

Here's CNN Pentagon correspondent Barbara Starr.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): One hundred and fifty miles southwest of Tehran, the Iraq heavy water plant, a facility international inspectors believe is critical to Iran's nuclear weapons program, one of many suspected nuclear sites the U.S. says are well hidden around the country.

Finding all of the sites would be just one problem in launching any so-called limited strike to take them out. To avoid Iranian military on the ground, the U.S. would likely fire from long distance, using Tomahawk cruise muscles from ships in the Persian Gulf and precision bombs from the long range B-2 stealth bomber.

But military and security experts agree Iran's religious leaders would strike back hard.

KEN POLLACK, BROOKINGS INSTITUTION: There's no reason to believe that the Iranians would see them limited. In fact, Iranians might choose to retaliate in a far less limited fashion, in particular, they're likely to try to employ terrorist attacks.

STARR: Iran's longstanding support for Hezbollah and its ability to marshal terrorist attacks in retaliation is a major concern. But there is more. Experts say Iran could retaliate with a missile strike. With a range of 1,500 kilometers, its Shahab 3 (ph) and other missiles could hit U.S. troops in Iraq and Kuwait, strike Israel, and even reach Turkey. Iran's mobile launchers would be difficult to preemptively destroy.

Former Defense Secretary William Cohen is an ardent supporter of diplomacy with Iran, and he knows the limits of the limited-strike option.

In 1998, the U.S. conducted air strikes against Saddam Hussein's missile facilities, hoping to halt his missile production for two years.

RICHARD COHEN, FMR. SECY. OF DEFENSE: You can reconstitute facilities that are destroyed, and so unless you're talking about all- out devastation and an occupation of a country with widespread destruction, limited attacks are good on a temporary basis. But again, the downside is you may end up causing a national -- a rise in nationalism and a revolution of a different sort against the United States.

STARR (on camera): Could the U.S. military launch a strike against Iran? The answer is, of course, yes. But the Bush administration is making it clear diplomacy is the preferred option. No military action against Iran is anticipated.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

PHILLIPS: Iraq is reeling from a fresh wave of post-election violence. A government official was kidnapped in Baghdad. The man is a senior member of the Interior Ministry. Witnesses say the gunman in another vehicle fired at his car on the highway, pulled over and then put him in the trunk and drove away.

An Iraqi journalist working for a U.S.-funded TV network has been killed in southern Iraq. The Al-Hurrah correspondent was shot dead while standing by his car just outside his home. His 3-year-old son also was killed.

Meantime, Iraqi officials now say it will be several more days until they have results of the January 30 election. They're recounting ballots from about 300 boxes that weren't properly sealed. He compared World Trade Center victims to Nazis and he outraged Americans. Now he's getting a standing ovation. Ward Churchill, the University of Colorado professor who came under fire for his essay, has gotten a big boost from his students. And as reporter Cheryl Preheim of CNN affiliate KUSA reports, the ethnic studies professor remains defiant.

(BEGIN VIDEOTAPE)

CHERYL PREHEIM, REPORTER, KUSA (voice-over): Professor Ward Churchill says he came here to stand behind his words, words he says have been misunderstood and taken out of context.

PROF. WARD CHURCHILL, UNIV. OF COLORADO: I'm not backing up an inch. I owe no one an apology, clarification.

PREHEIM: He told the crowd his essay was an expression about the U.S. government's treatment of many other countries around the world.

CHURCHILL: And what I said was when you treat people this way, when you devalue, demean and degrade others to this point, naturally and inevitably what you're putting out will blow back on you, and that's what happened.

PREHEIM: To questions about whether he feels sorrow for the victims of 9/11...

CHURCHILL: And the answer is yes, of course. And it's not one wit more proportionately significant than the mourning, the sorrow I experience for every single one of those Iraqi children.

PREHEIM: Every one of the 1,100 seats was full. Hundreds of others stood in the back, and a few hundred more listened outside. Most here were Churchill's supporters. Some critics came, too, to listen. Others confronted the professor.

UNIDENTIFIED MALE: Where do you get the gall to call the people who died in 9/11 technocrats when you sit around and get a $90,000 paycheck from the government you purport to hate?

PREHEIM: Professor Ward Churchill says he will never back down from the teaching the opinions he has a right as an American to have and share publicly.

CHURCHILL: I do not work for the taxpayers of the state of Colorado. I do not work for Bill Owens. I work for you.

(APPLAUSE)

(END VIDEOTAPE)

PHILLIPS: That report, once again, from Cheryl Preheim of CNN affiliate KUSA in Boulder. Colorado Governor Bill Owens has called for Churchill to be fired. School officials are deciding if they'll do just that. Moving on to a word problem for you. Take 250 potential jurors times seven pages, and then multiply by billable hours for lawyers to read through all of the completed questionnaires. Oh, and forget the math.

CNN's Ted Rowlands has a hot-off-the-presses copy of the answers given by prospective members of the Michael Jackson jury. He joins us from our L.A. bureau.

Hi, Ted.

TED ROWLANDS, CNN ANCHOR: Hi, Kyra.

Yes, we have -- well, eventually we'll have 250 of these. We're processing them right now. And one thing we can conclude is that the attorneys on both sides have been very busy.

These questionnaires are eight pages a piece. And with 250 potential jurors, as you said, that means 200 -- or 2,000 pages to go through to try to weed out the jurors, potential jurors in the Michael Jackson case.

We were given a copy of this questionnaire last week as to the questions being asked of the jurors. Now we are seeing what those answers are. And the questions vary.

There's -- one of the questions on here, "Have you or any relative or close friend ever been accused of inappropriate sexual behavior?" Another, "Have you or any relative or close friend been the victim of any inappropriate sexual behavior?"

We have been able to look through some of these documents, about 60 of them. And really, you can't tell much from what we've looked at so far. We've seen people from the ages of 18 all the way to 73.

At this point, the jury selection process in the Jackson case stands at sort of a recess right now. All week it has been dark because Jackson's lead attorney, Tom Mesereau, lost a family member. His sister died, and the court has allowed him to grieve and has given everybody a week off.

Both sides are poring over these jury questionnaires. On Monday, they will be able to ask specific questions from these questionnaires of these jurors as they come in. In the end, the 250 will be pared down to 12 jurors and eight alternates in this case.

It is a monumental task and a very important one. Legal experts, many of them, believe that a case can be won or lost in the jury selection process. So it is safe to say that the stakes a very high at this point -- at this part of the case. And both sides have jury consultants, both sides poring over these documents and have been for the better part of a week.

They'll have their chance to get more information starting Monday. And Michael Jackson is expected to be in court in Santa Maria on Monday when these questions are posed to these potential jurors one by one -- Kyra.

PHILLIPS: All right. Ted Rowlands, thanks so much.

A Marine wounded in Iraq war gets a second wound.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It kind of seems like I've told a lie almost.

(END VIDEO CLIP)

PHILLIPS: The military takes back his Purple Heart. Find out why just ahead on LIVE FROM.

And check out your pocket change. Some of your quarters could be worth a whole lot more than the face value.

The world's tiniest baby reaches a new milestone. We'll show you what it is later on LIVE FROM.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

PHILLIPS: Well, amid the hoopla over the president's new budget, there's one aspect of it you might be missing. It won't really be a budget until Congress takes a look at. And that process, according to our Bruce Morton, will transform it entirely.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): The first thing you need to know about the president's budget is that it doesn't exist. Sure, there's a book and all those briefings. But likely nothing close to what he's asking for will ever happen because it all has to go through Congress.

Last year Mr. Bush asked Congress to eliminate 65 government programs for a savings of $4.9 billion. Congress eliminated just four of the 65, saving less than $300 million.

This year he's asking Congress to cut or eliminate 150 programs. How well do you think he'll do?

(on camera): For every government program there's probably an industry that gives money to politicians that wants the program kept alive. There may be a trade union that gives money that wants to keep those jobs. There will be a congressional subcommittee that supervises the program. And if it dies, what will they be in charge of?

(voice-over): When Ronald Reagan said the closest thing to eternal life on this Earth was a government program he wasn't kidding. And it isn't just the programs. It's the little goodies, a park for your district, a research program for the college in my district that congressman stick into spending bills. Earmarks they're called.

The watchdog group Citizens Against Government Waste estimates that in fiscal 2005 there were 13,900 earmarks worth just under $26.5 billion. A record.

The president can veto appropriations bills, of course. The whole bill. He doesn't have a line item veto. But this president has never done that.

In fact, the whole issue has changed. Deficit hawks used to be Republicans. The constitutional amendment to balance the budget was part of Newt Gingrich's contract with America back in the 1990s when the Republicans won control of the House. But it was Democrat Bill Clinton who actually ended deficits and ran surpluses. And so the issue has switched sides.

KEATING HOLLAND, CNN POLITICAL DIRECTOR: Now Democrats are almost twice as likely as Republicans to say that the federal deficit is a very important issue the Congress and the president have to deal with in the coming year.

MORTON: It's way too early to know what the budget Congress actually passes will look like. What we know is it won't look much like the one the president sent them this week. It never does.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: One of the president's pet projects, the Medicare prescription drug plan, is now expected to take a bigger bite out of the hand that feeds it. Administration officials are offering a sharply higher estimate of how much the plan will cost. The increase is blamed on rising prices for drugs and the growing number of retirees.

The original tag was expected to be $400 billion through 2013. Now administration officials estimate it will be in the neighborhood of $720 billion over the 10-year period ending 2015. The plan kicks in, in January.

Another contentious issue on Capitol Hill, overhauling Social Security. Some of the president's pointmen on money matters are testifying before the House Budget Committee today. Treasury Secretary John Snow and others are pitching Mr. Bush's plan to partially privatize Social Security. But as expected, it's a hard sale, especially among Democrats.

Well, they're some of the most emotional gut-wrenching phone calls ever made, emergency calls during the September 11 attacks from inside the World Trade Center. So far, they've remained sealed, but at this hour relatives of the victims are fighting for the right to hear them.

Our Deborah Feyerick has their story.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): When the second plane hit the World Trade Center, insurance broker Richard Gabrielle was blown back into a marble wall, pinning his legs. Any chance of escape crushed.

MONICA GABRIELLE, WIFE OF 9/11 VICTIM: He had no choice but to wait for someone to help him out. He couldn't walk. He was pinned.

FEYERICK: His widow, Monica, learned what happened days later from co-workers who made it out. But Sally and Al Regenhard, whose son Christian was a firefighter, say they've never been told the haunting details of his final minutes.

SALLY REGENHARD, MOTHER OF 9/11 VICTIM: When I look at the picture, I realize what happened and I realize that he has disappeared.

FEYERICK: The two families feel there's more to know. They're fighting to unseal thousands of emergency 911 calls many of them made from inside the towers.

NORMAL SIEGEL, ATTORNEY FOR 9/11 FAMILIES: What we're talking about history, making sure that history is told to my grandchildren and their grandchildren what actually happened that horrific morning.

FEYERICK: New York City sealed those 911 calls, along with interviews from 500 firefighter made soon after the tragedy. In court papers, the city says the tapes would be grist for sensational exploitation and that if there were any practical information to be gleaned from those records it would already have been harvested.

The September 11th Commission did get to hear those 9/11 calls and examine the firefighter interviews. Among their findings, that emergency operators did not have information vital to getting people out. The city says that problem has been fixed, with ranking officers giving greater guidance to operators during emergencies.

But for widow Monica Gabrielle, those changes are just the start of the campaign to make skyscrapers safer.

GABRIELLE: That would essentially be the dead speaking back to the living about what went wrong, what deadly mistakes were made that prevented these people from getting out. And we can only learn from that information.

AL REGENHARD, FATHER OF 9/11 VICTIM: If this happens in the future we can deal with it better. I owe my son that. That's his legacy.

FEYERICK: A legacy and a search for truth. The painful truth of final moments and final words.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE) PHILLIPS: Straight ahead, the U.S. Marines want the medal they awarded back. The injured Marine is shocked to find out he can't keep his Purple Heart. Find out why straight ahead.

And the dancer becomes the dance. The director of the legendary Alvin Ailey American Dance Theater joins us to talk about her latest moves just ahead on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: And did the year of the monkey fly by or what? It's New Year's Day according to the ancient Chinese lunar calendar, and observed by hundreds of millions of people around the world. And look, giant dancing chickens. This all segues together, I promise.

A children's group in Beijing right here welcoming the year of the rooster with song and pageantry and really cute faces. And across Asia today, China, Japan and the Koreas, the South Pacific and Asian communities, and nearly every country, prayer, gift-giving, fortune telling, best wishes for the new year. Legend holds that people born in the year of the rooster are confident, flamboyant and obstinate. Well, where's Miles O'Brien when you need him?

All right. Leading business headlines, a human resources shuffle at the top tier of the Hewlett-Packard -- of Hewlett-Packard, rather. The struggling company computer makers controversial CEO is out. That's a lot of words you got there.

Good for the company, bad for the company? It remains to be seen. Let's talk about it with CNN's Allan Chernoff in New York.

(STOCK MARKET REPORT)

PHILLIPS: Straight ahead on LIVE FROM, a Marine corporal home from Iraq finds himself in an uncomfortable position. Uncle Sam awarded him a Purple Heart and then took it back. Find out why.

Plus, doctors think she's the smallest baby ever born. She's a fighter and she's reached a major milestone.

(COMMERCIAL BREAK)

PHILLIPS: Checking stories "Now in the News."

The Iraqi recount. Officials say about 300 ballot boxes were not properly sealed during the landmark elections last month. So they're counting the votes for a second time. This means no election results until the weekend at the earliest.

An earthquakes sparked panic today in Indonesia's Aceh province. Buildings shook and people ran screaming into the streets. It was a powerful reminder of the December 26 earthquake and tsunamis which killed more than 100,000 Indonesians.

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