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Grand Jury Discusses CIA Leak Investigation; Bush Speech Addresses Economic Issues
Aired October 26, 2005 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, HOST: Stories we're watching this hour: President Bush talks live about the economy. Go behind the numbers and the politics with him in just a moment.
A marketplace attack leaves dozens of people killed and wounded. Islamic Jihad says they're behind it. We're live with the latest.
A rescue mission, now under way. Americans stranded after Hurricane Wilma could be on the way home soon.
From the CNN center in Atlanta, I'm Kyra Phillips. CNN's LIVE FROM starts right now.
It's a name game, a blame game, a secret investigation about secrets, legal technicalities that could set off political shockwaves. It's the two-year grand jury probe of the naming of a CIA operative, an undercover CIA operative whose husband sought to poke holes in the White House rationale for war in Iraq.
The grand jury is meeting in Washington with only two days remaining to hand up indictments or close up shop. CNN's Bob Franken is outside the White House.
What do you think, Bob, indictments or not today?
BOB FRANKEN, CNN CORRESPONDENT: Well, don't expect any announcement today actually. That is the word that we've gotten from somebody closely involved in this investigation. That does not mean that I can clearly answer your question. That raises the possibility that a secret indictment that would be announced later or the possibility that the grand jury is going to meet on Friday, its last day of official business, to decide what it's going to do. And also, the possibility that there will be no indictments.
But certainly, the people from the White House are on pins and needles. That would include the deputy White House chief of staff, Karl Rove, who left his house this morning, as he has the last several days, under harsh television light, heading into uncertainty a little bit, as he's trying to find out whether he's going to be named, whether his dealings with reporters revealed the information illegally that disclosed publicly the identity of Valerie Plame as an undercover CIA operative. That was in 2003. Her husband, Joe Wilson, had been a harsh critic of the administration.
The other one who has been widely named is Scooter Libby, who is the vice president's chief of staff. Same treatment at his house this morning. He, too, heads into this unknown, at least as far as we know, whether he's going to be indicted. The special prosecutor has indicated a strong interest in his conversations with reporters.
Others could be named. There could be charges that go beyond the underlying law, which is the one that makes it a crime to knowingly identify somebody as an undercover operative.
There are also other possibilities that have been developed as the grand jury has proceeded, questions that could raise whether there was some effort to lie before the grand jury, make false statements, perjury, that type of thing. And questions about whether there have been violations of the conspiracy law.
What you're getting from all this, of course, is that nobody really knows yet. Or at least if anybody does know, he is bound by secrecy and is not telling us anything yet -- Kyra.
PHILLIPS: All right. Bob Franken, we'll continue, of course, to check in with you every couple of minutes. Bob Franken, thank you so much.
Now, forget -- he laughs but we're doing that. Forget for now, though, the CIA and WMD. President Bush is all about the GDP today. Live pictures now. Just two days after naming a successor to the long-standing outgoing Fed chief Alan Greenspan, Mr. Bush is holding court at the Economic Club of Washington.
Is he -- is he thanking people at the moment right now or do we want to listen in, live?
OK. Let's go ahead and bring in Ali Velshi, our CNN financial correspondent. Also our senior political analyst Bill Schneider, as we stand by. Of course, we're monitoring what the president, gentlemen, is saying right now. He's saying his thank-you's, et cetera.
But let's look at the economics first and then the politics of this speech. Ali, first of all, what do we know about the Economic Club of Washington? That's where he is.
ALI VELSHI, CNN CORRESPONDENT: It's a business organization. It's like a lot of the economic clubs in various major cities in the world. It's a place where people get together and exchange views and, in many cases, listen to people like the president or other cabinet minister -- cabinet secretaries who have things to say on the economy. It's sort of an exchange ground for that sort of discussion.
Right now, this is great for the president, because he want to put a message out there about stability in this economy. We have a lot of mixed signals in the economy right now, Kyra, after the hurricane with job numbers and things like that. The president wants to send the signal out there that it's solid. We're on track, and what that track is.
PHILLIPS: All right, Ali. Stand by. Bill Schneider stand by. Let's go straight to the president, listen in, then we'll talk about it.
(JOINED IN PROGRESS)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Ben Bernanke. Perhaps some of you know him.
He's a decent man. He brings impeccable credentials and sound policy judgment and sound character to this vital post. And he will continue the superb leadership that Alan Greenspan has provided at the Fed.
(APPLAUSE)
We've got a resilient and strong economy. If you think about what this economy's been through, I think you'll agree with me it's been resilient and strong.
In the past five year -- and that happens to be the amount of time I've been here...
(LAUGHTER)
... this economy has been through a stock market bubble, it's been through a recession, we had the attacks of September the 11th, we had corporate scandals, we've had the rising price of energy and we've had natural disasters.
And these were shocks to our system and required action to make sure America was a good place to risk capital. They forced us to make choices here in Washington.
We could have tried to solve problems by raising taxes and dictating solutions from the nation's capital. That's not the route I decided to go.
BUSH: We gave Americans an opportunity to keep more of what they earned and let them decide the best way to save and spend and invest their money.
To get our economy moving again, this administration has followed a clear principle: We put our trust in the hard work and good sense of the American people.
And so that's why we cut the taxes. We cut taxes on families by lowering the rates. We cut taxes on the child credit. We reduced the marriage penalty. We cut taxes on dividends and capital gains to encourage investment.
We cut taxes on small-business owners, who often pay their business taxes at the individual income tax rate. We created incentives for small businesses to invest in new equipment, expand and create jobs.
And to help our families and our farmers and entrepreneurs pass on the results a lifetime of hard work to their loved ones, we put the death tax on the road to extinction. Pro-growth policies have worked. Real disposable personal income has grown by nearly $1,900 per capita. Homeownership has reached an all-time high. More minorities own a home today in America than ever before in our nation's history. Productivity is growing at the fastest rate in nearly 40 years.
Over the past 28 months, America's entrepreneurs have created more than 4.2 million new jobs. The unemployment rate is 5.1 percent. That's lower than the average rate of the 1970s, 1980s and 1990s.
These policies have helped achieve a growth rate of 3.6 percent over the past year: more than three times that of Europe and nearly twice that of Japan.
The unemployment rate is roughly half of the unemployment rate in Germany and France; I might remind you, countries where workers and businesses face higher taxes, a lot of regulation and big government.
When people in these countries look for a place to invest their savings, by the way, they look right here to the United States of America.
BUSH: Our economic policies have helped create jobs, growth and opportunity. Yet every day brings new and stiff competition for our nation's workers and businesses.
In the coming decades, there's going to be a time of great opportunity if we make the right decisions, if government doesn't foul it up. So we're moving forward with an agenda to ensure that America's entrepreneurial heaven, a place where people can realize their dreams.
It generally starts with keeping taxes low and restraining the spending appetite of the federal government.
Tax relief left more money in the pockets of the people and that's been a vital part of the growth of our economy.
Yet tax relief is set to expire in the years ahead. We need certainty in the tax code. We need to say to our risk-takers, "Here's the way the tax code's going to look in the years ahead," therefore, I think it's important that we make the tax relief permanent.
As we provide more incentives for people to work and invest, tax relief has led to faster economic growth which has translated into faster revenue for the federal treasury.
This year, thanks to rising revenues and wise fiscal policy, the deficit was $108 billion less than expected. To continue reducing the deficit we need to keep the taxes low and we've got to redouble our efforts to be wise about how we spend your money.
Earlier this year I submitted the most disciplined proposal for nonsecurity discretionary spending since Ronald Reagan was in the White House. My budget proposed an actual cut in spending on nonsecurity discretionary spending. Congress needs to make that cut real. And I'm open to a further across-the-board spending cut as well.
My budget has proposed vital reforms in mandatory spending that will save the taxpayers $187 billion over the next decade, part of our plan to cut our deficit in half by 2009.
Some have said that the unprecedented destruction caused by the recent hurricanes means that we've got to put our plans to cut the deficit on hold. I disagree. We don't have to do that.
BUSH: We can help the people of the Gulf Coast region recover and rebuild and we can be good stewards of the taxpayers' dollars at the same time, which means we're going have to reduce unnecessary spending elsewhere in the budget.
My administration is working with Congress to identify offsets and spending recisions so we can provide for emergency relief in a fiscally responsible way.
I met with the leader of the House and the Senate today, and we're working on plan for pushing significant reductions in mandatory and discretionary spending. Both houses are making progress toward cuts that will show the American people we're capable of being wise about the money and at the same time meet our priorities.
I encourage Congress to push the envelope when it comes to cutting spending.
See, believe it or not, up here in Washington, there's a lot of programs that simply don't deliver results.
(LAUGHTER)
And if it doesn't deliver results, we ought to get rid of them.
That will help us meet priorities: winning the war on terror and helping the people down there in Katrina and making sure kids get educated.
If we keep taxes low and restrain spending, we also have got some other long-term challenges to the economy. This economy of ours, as I mentioned, has shown resilience because it's flexible and responsive. But there are three broad challenges we've got to confront.
First is we all must be concerned about our growing dependence on foreign sources of energy. Our families and businesses are hurting because of higher gasoline prices.
BUSH: It's like a hidden tax on the American people. Gasoline prices strain the budgets of our families. They run up the cost on the small-business owners.
And the damage inflicted by Hurricanes Katrina and Rita pushed the prices even higher, disrupting oil and natural gas and gasoline production along the Gulf Coast.
These natural disasters have highlighted a problem that Congress needs to pay attention to. It's a problem I've been talking about since I first came to Washington.
Our energy supplies are not keeping up with consumption. And that's why people's prices are going up.
I appreciate the work of Congress. I signed a good energy bill this summer. The bill makes an unprecedented commitment to energy conservation and efficiency by promoting new technologies and giving consumers incentives to use energy-saving products. And that was an important title, the energy bill, the conservation title.
The bill helps America make cleaner and more productive use of our existing energy resources like coal and oil and natural gas.
And for the sake of energy independence, I know that we can build safe and efficient nuclear power plants. And this country needs to get after it.
(LAUGHTER)
This bill helps diversify our supply by promoting alternative and renewable energy sources, such as ethanol and biodiesel. We're making progress in developing the technologies that will be able to use corn or soybeans to be the feed stock for energy.
I mean, it makes sense, doesn't it? We grow a lot of corn and we grow a lot of soybeans. And I hope one day the president is sitting in the Oval Office and somebody walks in and says, "Hey, the crops are strong this year. It means we're less dependent on foreign sources of energy."
The bill also helps promote needed investment in our energy infrastructure. It's a good piece of legislation but it's only a first step.
Congress needs to take more steps. We've got to allow environmentally responsible oil exploration in the Arctic National Wildlife Refuge if we want to become less dependent on foreign sources of energy.
We need to build and expand our refineries. Do you realize we have not built a new refinery since the early 1970s in America? People wonder why the gasoline price goes up. It's because we don't have enough supply.
BUSH: People are conserving more, and that's good. But we need more supply of gasoline for the sake of consumers and for the sake of our economy.
And so I'm going to work with Congress to pass a bill that makes it easier for current refineries to expand, that encourages the construction of new refineries, so that we've got more affordable fuel for the American people.
In the long term, reducing our dependence on foreign oil requires looking beyond fossil fuels. So we're making investments necessary to move from a hydrocarbon economy to a hydrogen economy. In other words, what I'm telling you is is that investments in technologies are going to allow us to diversify away from the era of oil and gas.
In 2003, we launched an aggressive program called the Hydrogen Fuel Initiative. When hydrogen's used in a fuel cell, it can power consumer products from computers to cell phones to cars that emit pure water instead of exhaust fumes. I appreciate the Congress dedicating $1.2 billion into hydrogen fuel research.
Here's the dream -- and I think it's going to happen -- that your children -- your grandchildren, for some of you...
(LAUGHTER)
... children for the younger -- will be able to take their driver's test in an automobile powered by hydrogen.
Secondly, we've got to ensure that we have an education system that prepares the new generation of American workers to fill the jobs of the 21st century. And that starts with making sure we get it right at the elementary schools.
I want to thank members Congress for working with me on the No Child Left Behind Act.
BUSH: Let me tell you the philosophy behind that.
I don't believe you can solve problems unless you measure. If you're running a business, it's hard to solve problems if you don't measure. And so inherent in the No Child Left Behind Act is the following philosophy: one, every child can learn. And we want to know if they are learning.
You see, a system that doesn't hold people accountable basically assumes certain children can't learn and it's OK just to shuffle them through the school. That's unacceptable in America, as far as I'm concerned.
The No Child Left Behind Act challenges what I've called the soft bigotry of low expectations by raising standards and raising accountability. And it says to the school district, "We'll get you money for taking your Title I students, but you measure. You measure in the early grades to show us whether or not a child can read and write and add and subtract. And if not, do something about it. Change."
And we're beginning to see results.
On this year's NAEP test, fourth grade reading scores were six points higher than in the year 2000. That's progress. Fourth grade math scores were the highest in the history of the test. Minority students made progress toward closing an achievement gap in America, a gap which, by the way, is unacceptable in this country.
And there's more work to be done. I think we ought to extend the same high standards and accountability to our high schools so that when somebody graduates from high school, the diploma means something.
Most of the jobs in the 21st century will demand advanced training and technical expertise as well as retraining over the course of a lifetime. That's why I'm such a strong believer in the community college system. They've got programs out of the Labor Department that simplifies the job training programs, that diversifies them, that streamlines them from their inadequate bureaucracies.
It's unbelievable what the strings attached to job training money here in Washington, D.C. So we're trying to eliminate those strings so the money goes to places that are actually providing a result.
I've travelled this country. And I've been to community colleges all over that are doing a fantastic job by giving people the skills for the jobs which actually exist.
And so we're going to continue pursuing a strong job training program and institutions that work and that are capable, that have got curriculum that are flexible and schools that are affordable and people that are being trained for jobs which are actually existing.
And finally, we got to make sure more Americans can go to four- year colleges, and so we provide more assistance in the form of Pell Grants.
To make sure that the economic environment in this country is conducive to growth, we've got to make sure our work force is educated.
Thirdly, we must have a health care system that puts patients in charge of decisions, that offers greater choice and allows workers to own their own health care.
As I understand, the rising cost of health care has imposed large costs on your businesses and on your families. But we've begun to make changes here in Washington.
I was pleased to sign a bill that confronts costs and creates choice by giving Americans the option of health savings accounts. It's a really innovative product that gives you affordable coverage for major illnesses and allows the worker to save money tax-free for routine medical expenses.
It puts the consumer in charge of making health care decisions.
BUSH: Once you have your HSA, by the way, you can roll over money on a tax-free basis year to year and you can take it with you from job to job.
I strongly urge you to look into HSAs if you're running a business here.
Many Americans are already benefiting from the security of HSAs. I propose tax relief for individuals and employers and low-income families to use HSAs, and I hope the Congress responds.
As we make health care more accessible and affordable, we're strengthening the safety net.
When I came to office, I pledged to open or expand 1,200 community health centers to serve an additional 6.1 million people in need for health care. So far, we've opened or expanded more than 800 community health centers.
These are cost-effective, smart facilities. It helps the poor and the indigent get much-needed primary care.
The budget for 2006 provides funding to open or expand more than 500 more community health centers.
We also renewed the promise of Medicare. Medicare's a really important program, obviously. It needed to be reformed. If you're going to have a health care system for the elderly, it seemed like to me the health care system ought to be modern.
Do you realize prior to the reforms that the Congress passed, and I proudly signed, Medicare would pay $100,000 for a heart surgery but not a dime for the prescription drug that would prevent the heart surgery from being needed in the first place?
The system was outdated and it didn't make sense. So I worked with Congress for the most significant reform since Medicare was established.
Inherent in that bill is not only modernizing the medicine that people get, but it also gives seniors choices. I believe if consumers have more choices it helps to control costs and enhances the quality of a product someone is able to get.
I also believe that we ought to have what's called association health plans, which will allow small business to pool across jurisdictional boundaries to be able to afford insurance at the same discounts that big businesses get.
BUSH: It's a common-sense way to help small businesses insure people.
The bill got out of the House; it's stuck in the Senate. The Senate, if they are concerned about the cost of health care for our small businesses, needs to pass association health plans.
Finally, we're working to expand information technology in the field of medicine. If you've ever looked at the I.T. part of medicine, you'll be amazed at how backwards it is. I mean, it's easier to get information on buying a car than it is on health care items. And that doesn't make any sense.
So we've got a goal, to computerize medical records that will help make America's health care more transparent and more efficient, which will help patients make rational choices and help doctors save lives.
To reduce the cost of health care, we've got to do something about medical liability. We've got a problem in America. I've been to states where they have trouble finding an OB/GYN because these good docs are getting sued out of business. It just doesn't make any sense to have a medical liability system that's out of control.
When I first came up here, as former governors will be please to hear, I thought that medical liability was mainly a state issue until I realized that there's tremendous costs to federal medicine. I mean, after all, we're paying for Medicaid and Medicare and veteran's benefits.
And when the docs who are getting reimbursed by the federal government practice defensive medicine, it runs up the cost to the taxpayers. And when the premiums on their policies go up as a result of these junk lawsuits, it runs up the cost to the taxpayers.
I've come to the conclusion that medical liability is a national issue that requires a national response.
BUSH: I got a good bill out of the House. The Senate need to pass medical reliability reform so medicine is available and affordable for the American citizens.
And speaking about tort reform, part of making sure America's competitive in the world and this is a good place to risk capital, we need more tort reform out of the Congress.
We took an important step when we passed class-action reform and bankruptcy reform. I signed a bill today that said, "If you manufacture a legal product, you shouldn't get sued for it."
Now the House and the Senate need meaningful asbestos reform, and they need to get it to my desk as soon as possible.
We also need to confront the long-term problems confronting our entitlements. If this country wants to stay competitive throughout the 21st century, we have got to do something about Social Security and Medicare.
As you know, I brought up the...
(APPLAUSE)
They told me not to talk about it when I first got up here.
(LAUGHTER)
But I've been talking about it ever since I've been running for president and since I've been the president, because I believe the job of a president is to confront problems and not pass them on to future presidents and future congresses.
(APPLAUSE)
And we got a problem. It starts with the fact that baby boomers like me are getting ready to retire. Just so happens I turn 62 in the year 2008, which is quite convenient.
(LAUGHTER)
And there's a lot of me...
(LAUGHTER)
... a lot of people like me.
(LAUGHTER)
BUSH: I mean, there are millions and millions of baby boomers relative to the folks that are going to be paying for my retirement and your retirement.
The system is going broke.
You know, I give a lot of speeches and look out in the audience and see people working hard to pay their payroll taxes. And they're paying payroll taxes into a system that's just not going to be around unless we do something about it.
And so I've made some proposals to the Congress, proposals that work with how fast benefits would go up, proposals that said, "If you're a poor American nothing's going to change for you. If you're a wealthy American, your benefits will grow but at a slower rate."
We also have a fantastic opportunity as we strengthen and modernize Social Security to allow younger workers, if they so choose, to put apart some of their own money in a personal savings account so they can take advantage of the compound rate of interest; a personal savings account they get to call their own; asset base the government can't take away; an asset base that somebody can pass on to whomever he or she chooses.
Part of our mission has got to be to encourage ownership in America. And one way to spread ownership throughout our society, into neighborhoods where some may not own anything, is to allow them to save some of their own money -- their choice -- in a personal savings account as part of Social Security reform.
(APPLAUSE)
I'm going to continue to talk to the American people on this issue and insist that Congress do the right thing and work together to save Social Security.
And finally, we've all got to remember we live in a global economy. This country is home to about 5 percent of the world's population, which means 95 percent of potential customers live abroad.
BUSH: Millions of Americans -- at least their jobs -- depend on exports. So to keep this growing and creating jobs we've got to continue to open up markets for American products.
When I came to office, I asked Congress to grant trade promotion authority. My administration has put that authority to go use. We've completed free trade agreements with 12 nations on five continents. We've opened a combined market of 124 million consumers for American products.
Earlier this year, we completed a free trade agreement with Central American nations that gives our goods and services the same access in Central America that their goods already get here. In other words, we leveled the playing field.
My attitude is that our producers and farmers and workers can compete with anybody, anytime, anywhere so long as the playing field is level.
To continue to open up new markets for goods and services and farm products, we have got to work for a free and fair global trading system. The United States has taken a leadership role in working toward a successful conclusion to the Doha trade negotiations at the World Trade Organization.
A successful Doha round will reduce and then eliminate tariffs and other barriers on farm and industrial goods, will phase out unfair agricultural subsidies, and open up global markets for products, and leave all nations better off.
The Doha negotiations are now at a critical point. Recently, the United States has come forward with a bold proposal in the critical area of agricultural to reenergize the talks.
BUSH: Now other nations must come forward with similarly ambitious proposals. Together, we have a historic opportunity to knock down trade barriers and create economic growth and reduce poverty throughout the world.
Presidents from John Kennedy to Ronald Reagan to Bill Clinton have recognized trade is the most certain path to lasting prosperity for people not only here but around the world.
So I'm going to continue to pursue trade agreements on a bilateral, regional and global level, to open up markets and to maintain our position as a strong economy in the world.
It's important that people in Washington not use trade as a political issue. The objective is to have strong support from Republicans and independents and discerning Democrats like Vernon Jordan.
(LAUGHTER)
I've been disappointed with how the trade debates have gone in Washington. In the 1990s, many Democrats supported important trade agreements such as NAFTA. Fewer and fewer Democrats today are willing to stand by that position and support trade bills that are good for American workers.
It's time to get politics out of trade policy and focus on what's best for the United States of America. (APPLAUSE)
I appreciate you giving me a chance to come by and visit with you about the economy. We'll keep making the decisions necessary to ensure that the entrepreneurial spirit is strong, that the small- business sector can grow and that people have got a chance to realize their dreams.
BUSH: We've got a remarkable country, when you think about it.
I mean, think about a land where a person can come here from anywhere or grow up in a neighborhood maybe where there's no hope. And they have a dream of starting their own business and creating wealth and raising a family and owning the home.
It's possible in this country. It's not only possible; it's likely if you work hard.
That's the greatest thing about our country. You know, it's such an honor to travel the world. And it always strikes me about how bright the American future is for people.
And our job in Washington is to keep it bright and to keep it hopeful and keep making decisions that end up encouraging people to work hard and realize their dreams.
This economy's strong. It's going to stay strong. And I appreciate your working to keep it that way.
Thanks for having me.
Mr. President, I appreciate the invitation.
May God bless you all.
(APPLAUSE)
KYRA PHILLIPS, CNN ANCHOR: President of the United States there, speaking before the Economic Club of Washington. Let's get a little post-script to the president's remarks from CNN financial correspondent Ali Velshi. He's in New York. And in Washington, our senior political analyst Bill Schneider.
We started off with Ali. And I want to talk about economics in just a second, Ali. But, Bill, of course, many critics in Washington saying, perfect way for the president to move away from the CIA leak investigation and the talk of possible indictments coming down today, with his administration, and give this positive speech on the economy. What's your take?
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, changing the subject is a time-honored Washington tradition for presidents and other members of Congress who get in trouble.
Remember Bill Clinton during the Monica Lewinsky scandal when it first broke? He gave a dramatic State of the Union speech at the end of January, 1998, and didn't say a word about scandals. We talked about all the terrific things that were happening in the country and about the good economy, and his ratings soared.
The problem with this speech is Americans aren't convinced the economy is terrific, although there are mixed signals, as Ali said earlier about the economy. But Americans are kind of skeptical, with those high gas prices, hurricane recovery and other problems.
PHILLIPS: All right, so Ali, give us the reality check. How bad is the U.S. economy or is it as good as the president says?
VELSHI: The best part about being a journalist is my esteemed producer described that as a wide-ranging speech. It wasn't about changing the subject just from potential indictments, it was -- there must have been about 10 or 15 different things the president commented on...
PHILLIPS: He even brought up No Child Left Behind. I guess we'll get to that in a moment, too.
VELSHI: No Child Left Behind and healthcare reform and all sorts of things. Here's the reality. Americans see jobs being lost. Even though there's been a net gain of jobs. Between the gas prices, the higher energy prices and the jobs that have been lost as a result of layoffs and the hurricanes in the last few months. Consumer confidence has plummeted.
I want to show you something very quickly. This here, age-old trick. It's like, you know, changing the topic. This is the size of the U.S. economy, OK?
PHILLIPS: Wait, there's too many -- there's so many, many zeros.
VELSHI: This is 11 -- it's too many -- this $11 trillion, $750 billion. That's the size of the U.S. economy. This is everything that goes on in the U.S. economy. That is one-fifth of all the economic activity in the world. Two-thirds of this $11 trillion is what we buy. It's consumer stuff. It's your taxes, it's your healthcare, it's everything we buy. The consumer has to believe -- as Bill said, the consumer has to believe, the American taxpayer has to believe the economy is strong. It's not enough just to hear it.
PHILLIPS: And Bill, I don't know if you've got any props with you, Bill Schneider.
SCHNEIDER: No, I don't.
PHILLIPS: You know, taking a look at the polls and Ali here talking about it's so much about the image and you have to make people believe everything is OK. But it's so hard to do that when there are so many other distractions going on, whether it's hurricane relief and responding to national disasters. But did I notice that the president got right to, I guess his list of positives. It took him what, about three minutes to get right into, I'm cutting taxes, I'm cutting taxes, I'm cutting taxes. SCHNEIDER: That's right. And we're cutting spending, spending and spending, and that is what Republicans in Congress and the House particularly are in revolt about. The deficit doesn't seem to be under control, although it did go down. And he talked about that. But a lot -- there's a lot of pressure to cut spending. Cut what spending? That's where the controversy begins.
You know, the president is talking about the good economy. There's an interesting disjuncture. Americans are out there spending money, but they're not believing the economy is good, because of all the news that you talked about. The gas prices, of course, does hit them in the pocketbook. Hurricane problems, recovery in the Gulf. General Motors cutting pension benefits. They hear all this news and they simply don't believe it. And that has real consequences, as Ali said.
PHILLIPS: Well, Ali, did you notice, too, that while he started talking about the budget -- because there's been so much talk...
VELSHI: Yes.
PHILLIPS: Among those in Washington -- oh, we are so in the red, all this money we're spending on rebuilding the Gulf Coast, we're in so much trouble. He really hit home on, look, we can handle the budget, we can balance the budget and we can create, he said, emergency relief response and teams. We can do it, we can balance it.
VELSHI: It's -- the Apple doesn't fall far from the tree. The American people do exactly what the American government does. The American government has a big deficit. American people, after you finish paying bill, the average American has a negative savings rate at the end of the month. And what Bill said is absolutely true.
This is the miracle of American people. We will continue to spend until the last nail is in the coffin about the fact that the economy may be turning down. Americans continue to hold this economy up by spending. So the president is walking a fine line here, convincing people that the economy is strong, while outlining that we do have some, you know -- some people use the word headwinds. We've got crosswinds in the economy right now. We've got some things that make it look very strong and there are some things that really challenge us.
This energy price business is very big -- is a very big problem, Kyra. And one of the things that I thought was very interesting that the present president talked about in his list of about 15 things, the hydrogen economy. The idea of pushing us toward an economy that doesn't work on gasoline and fuel oil, it works on hydrogen. That's a big deal and that's many years away, but that's interesting, because that's a major change in the direction that we're in.
PHILLIPS: Just real quickly, Bill, I want to give you a final word. Vernon Jordan, by his side. Very interesting, brought up trade debates. Even a shout-out to Vernon Jordan, you know, Washington power broker. What do you make of that? SCHNEIDER: Well, that's interesting, because he was very close to Bill Clinton. He's head of the Washington Economic Club. This was a Clinton man. He was allied with Clinton in the whole Monica Lewinsky controversy, a key Democrat in Washington.
Bush described him, President Bush described him as a discerning Democrat who apparently disagrees with the president on trade. Important thing here to remember, that a good economy helped Ronald Reagan recover from the Iran contra scandal. A good economy got Bill Clinton through the Monica Lewinsky scandal.
PHILLIPS: Good point.
SCHNEIDER: Bush is hoping by talking up the economy, it might help him get through the troubles he's now facing.
PHILLIPS: Point very well-made. Bill Schneider, Ali Velshi, thanks, guys.
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UNIDENTIFIED MALE: Some of the files are sort of like almost page six on steroids.
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PHILLIPS: FBI files got pretty hot during the Cold War. Find out what the G-men found out about some of the biggest celebrities of all time.
Also ahead, the threat of impending indictments. The melee over Miers, the continuing controversy over the war. How can the White House get back on track? Our guest has some suggestions.
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UNIDENTIFIED MALE: No, no, that's all no.
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PHILLIPS: Oh, no, we wouldn't want crazy grapes. That's why this winemaker spins only the classics for his vineyard. But is it the sound of success?
LIVE FROM has the vintage stuff for you later.
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PHILLIPS: Well, back here live in B control, we're talking about things. Well, they seem to be a little better today, especially for 20 percent of the Florida homes and businesses that lost power when Wilma blew through. Those twenty percent are back on, although it may be weeks before all of the rest are reconnected.
CNN's Allan Chernoff plugged into the post-Wilma goings on in Oakland Park.
What's the status, Allan?
ALLAN CHERNOFF, CNN CORRESPONDENT: Kyra, as you can see, FEMA is delivering here in Oakland Park. They've got ice and they've got water, but they've got only so much of it. Lots of people have been lining up. They're in their cars, and you can see the line extending way down. They've been given water and ice out since 8:30 in the morning.
And these few pallets, before which we're standing are all that remain. It's been a huge logistical challenge for FEMA, and a perfect example of how tough things are. Some trucks started out in Maine, went down to Jacksonville, from there to West Palm, and this morning to Oakland Park, eight major trucks, 18 wheelers, showed up here. The city had asked for only two to come. They sent six trucks over to sunrise, 20 miles to the west of here.
Still, things have been far smoother here today than they were yesterday. Yesterday, folks were waiting for five hours and they only got some ice. Lots of people got nothing. And tempers really were flaring.
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LOUIS KENDRIK, OAKLAND PARK RESIDENT: It was really bad. It was to the point where people were losing their tempers, and people was very patient and being told where to go, and next thing they tell you one hour, two hours, and next minute they didn't know, you know, people get aggravated because nobody knows what's going on. They was confused what's -- and today is a little organized.
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CHERNOFF: But some people still pretty frustrated this afternoon, because there also had been a lot, until a few minutes ago to walk up, to pick up ice and water, and that line was cut off because there's still so many people waiting in their cars. So still some people trying to walk up. They're being sent away, and those people frustrated, very hard to satisfy everybody when there's no water, no potable water out from the tap, and the power is still out here -- Kyra.
PHILLIPS: Allan Chernoff, we'll keep reporting on it. Thanks, Allan.
Meanwhile, in Washington, it's already a bad week for Republicans. And adding to the anxiety, a special counsel's investigation with a couple of high-level figures at the center. One man holds lots of potential fallout for the Bush administration. Joining me from Washington, CNN contributor with some insight into such an investigation. He's a former U.S. attorney and Republican Congressman, Bob Barr.
Hi, Bob.
BOB BARR, CNN CONTRIBUTOR: Hello, Kyra.
Great to be here in Washington where this city is absolutely abuzz with who's going to be indicted by Mr. Fitzgerald.
PHILLIPS: Well, no doubt. We've been talking about this for weeks now. I can imagine what it's like being in Washington and hearing the buzz. What are you hearing? I mean, Karl Rove, then it's Scooter Libby, now they're talk of Dick Cheney. Somebody's flipping on someone.
BARR: Well, let me throw another name into the mix that I've heard just the last couple hours here, and that is George Tenet's name is now cropping up as part of this mix. Their apparently were a lot of phone conversations from the vice president's office, Scooter Libby, to George Tenet and so forth.
So the focus right now seems to be, at least at this stage, on a very likely indictment of Scooter Libby, with possibly more later, depending on who else they can get to, as we say in the prosecutorial business, flip on people.
PHILLIPS: Well, and you've been in that business. Tell me about the political pressure on Patrick Fitzgerald right now, through your own experience. I mean, you've gotten threats, you've been harassed, you've been told that you would never be in politics again. I mean, give us a feel for what Fitzgerald is going through now.
BARR: And those were my friends who were telling me that at the time. So you can see what it's like up here in Washington, where you don't have any friends, except for your mom and your dog. That's pretty much it.
The pressure on a special prosecutor is even more intense Kyra than it was on me during the time I served as a U.S. attorney conducting political-type or investigations of political figures, because the special counsel or special prosecutor has one goal and one case only. So the scrutiny is intense, and it makes it very, very difficult not to try and come up with something to justify all that time and expense.
PHILLIPS: Well, with all this talk about indictments, obviously, Fitzgerald has got to have something solid, right?
BARR: I believe he does, because the cases that we're looking at here, the possible charges, that is obstruction of justice, as well as the charge of deliberately or intentionally outing a known intelligence person under cover, both of those are very difficult cases, difficult charges, to make stick. So Mr. Fitzgerald is a very good prosecutor, that I know he is, he's going to make sure he has an airtight case before he seeks that indictment or those indictments, and that's why, for example, we heard earlier today that it would be such and such a time today, and now that's slipped a little bit. He's crossing the t's and dotting the i's to make sure he has a good case.
PHILLIPS: All right, Bob Barr, bringing one more name into the mix, George Tenet, Karl Rove, Scooter Libby, Dick Cheney. We're watching it all as we wait to see if indeed indictments do come down in that CIA leak probe.
Bob Barr, thank you so much.
Stay with us straight ahead right after the break, we're going to talk more about that suicide bombing in Israel.
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PHILLIPS: A crowded marketplace in Israel, a suicide bomber bent on destruction. Now at least five people are dead and 21 more wounded.
CNN's Guy Raz join us live from Hadera, Israel, the scene of that blast. He has more on the deadly attack and who's claiming responsibility -- Guy.
GUY RAZ, CNN CORRESPONDENT: Kyra, sadly, Israeli rescue teams are experts in clearing up broken glass and cleaning up blood-drenched streets after these kinds of suicide bombing. Just about four hours ago we understand a 20-year-old male from the West Bank town of Kabitiya (ph), came into this Israeli city, Hadera, walked just behind me into that crowded marketplace at the time and detonated a suicide bomb, killing five people and wounding at least 26 others. At least six of those people are now in critical condition.
Now, the militant Palestinian group Islamic Jihad has claimed responsibility for this suicide bomb blast, and said it was carried out in retaliation for an Israeli assassination of one of their top leaders on Monday morning.
Now there is no word so far as to whether the Israeli government plans to carry out retaliation, but we have had condemnations from the Palestinian Authority, who is calling the attack an attack counter to Palestinian objections -- Kyra.
PHILLIPS: Guy Raz, just looking at everything happening behind you, from a live perspective, in addition to looking at the videotape that we have, describe what is happening behind you. Describe what the conversation is and are they working on victims as we speak? What's happening?
RAZ: Right now, it's a recovery effort, Kyra. All of the bodies have been remove and all of the wounded have been taken to nearby and local hospitals. What we see now are rescue teams and recovery teams clearing up the debris, particularly the religious Orthodox Jewish recovery teams know as Zaca (ph). They are literally combing this area for any bits of flesh, any body parts, because under Jewish law, the entire body has to be buried together for any ultimately when the funeral is held -- Kyra.
PHILLIPS: So in no way there could be any survivors beneath that rubble behind you?
RAZ: No, there won't be any survivors at this point. As I say, sadly, Israeli rescue teams are experts in these kinds of rescue and recovery efforts. And usually within about two, sometimes three hours after these attacks, we have a pretty good sense of how many people are killed, we have a pretty good sense of how many people are injured. And in fact, who was ultimately behind this attack. The fifth suicide bombing inside Israel this year and the fourth deadly suicide bombing in the country this year -- Kyra.
PHILLIPS: Guy Raz live from Hadera, Israel, we'll continue to follow the story.
We'll take a quick break. More LIVE FROM right after this.
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Coming up in the second hour of LIVE FROM, more woes over Wilma. We're going to hear from the family of American tourists stranded in Mexico after the devastating hurricane.
Also, playing the race card over a football loss. Straight ahead, the story of one football coach who believes a lack of black athletes led to his team's loss over the weekend. We'll debate it.
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