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NYC Transit Workers to Return to Job as Negotiotians Resume; Rumsfeld Hints at Troop Reduction Early Next Year; Iraq Veterans Wins New House

Aired December 22, 2005 - 14:01   ET

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

KYRA PHILLIPS, CNN ANCHOR: Well, there's a lot of light at the subway tunnel. A push from the leaders at the New York Transit Workers' Union to get their striking members back into buses and trains. Even though a breakthrough agreement with the city doesn't seem to be just around the corner, we do have good information.
CNN's Allan Chernoff brings us up to speed.

Hey, Allan.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Hello, Kyra.

The executive board of the Transport Workers' Union is still meeting. They are voting on a framework that would get the transit workers back on the job and get the negotiators back to the bargaining table. What's happened today is that a mediator has gotten both sides to step back from the brink.

The key issue here had been pensions, and the Metropolitan Transportation Authority has agreed for the moment to pull the key issue of pensions off the table and to see if it can find some cost savings from the employees' health insurance plans. This still allows the union to maintain that it is protecting the pensions, a very critical issue for the membership.

In fact, there were about two dozen transit workers picketing here in downtown Brooklyn in front of transit station, and we stopped them, told them the news, and they were quite pleased.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This has been a long, hard haul for us, as well. It hasn't been easy at all. But the pension is a main and important issue for all of us involved, and as well as the new people who are coming in later on.

UNIDENTIFIED MALE: I feel terrible. I mean, I'm a New Yorker. We're all New Yorkers. This is just -- you know, let's just get back to work, let's get things done, let's move in the right direction.

(END VIDEO CLIP)

CHERNOFF: So if the union leadership does vote in favor of this framework, the subways and the buses hopefully will be back tomorrow -- Kyra. PHILLIPS: What do you think, Allan? How unified is the union?

CHERNOFF: I'm sorry, Kyra, say that again?

PHILLIPS: That's all right. How unified do you think the union is?

CHERNOFF: Kyra, that actually is a very good question. This union is not all that unified, although we would expect them to vote in favor of this framework.

The vote to strike was divided. Typically a union has a unanimous vote in favor of a strike. That did not happen here.

There are dissidents on the board who don't happen to like Roger Toussaint. He is considered to be a very aggressive leader, yet, there are some members on the board who are even more aggress aggressive and feel Toussaint hasn't been tough enough.

In addition to all of that, the parent of the local here, the international union, has actually come out against this the strike. So, tremendous dissension over here within the Transport Workers' Union.

PHILLIPS: All right, Allan Chernoff. Thank you so much.

We're expecting -- actually, I've just been told New York Mayor Michael Bloomberg to speak live this hour. We're going to bring you his remarks.

And then at 3:00 p.m. Eastern, New York Governor George Pataki will join me live.

Well, if your holiday spirit is sagging after three days of walking or carpooling or cab-hopping in New York, you may want to stay out of London on New Year's. Tube workers are now planning a 24-hour walkout starting at noon London time December 31, just in time to derail the city's plans for free underground train service for New Year's Eve revelers.

The issue there is staff reassignments, though negotiations continue and a walkout may be averted.

For the second time in a week, a leading member of the Bush administration pays a surprise visit to Iraq. And before he even shook one U.S. service member's hand, Defense Secretary Donald Rumsfeld was hinting at cutting the troop strength, and soon. Back in Washington, though, no one saying for sure when that could happen.

(BEGIN VIDEO CLIP)

LARRY DI RITA, PENTAGON SPOKESMAN: I know this strong desire to want to get in between assessments and recommendations and decisions and announcements, but we are where we are, which is there's nothing to announce. There is -- it is true that we had previously acknowledged that when we did the '06 to '08 rotation that some of these -- a couple brigades, we had some potential decisions pending on those. And so we're working through all of that, and as we -- as we do that and we've been able -- and we're able to make firm conclusions, we will announce those conclusions.

(END VIDEO CLIP)

PHILLIPS: So, what's the deal, Barbara Starr?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kyra, as one Pentagon reporter said today, covering the news around here some days is like reading "Pravda" in the old days of the communist party in the Soviet Union, trying to figure out what Pentagon officials are really saying.

Behind the scenes, here's what's really going on. Some time by the end of the year, by the new year, the Pentagon is set to announce troop reductions for Iraq.

How are they going to do it? Basically, they're going to announce that two brigades, two Army brigades, somewhere between 7,000 and 10,000 troops that were slated to go to Iraq in early '06, now won't have to go. They will be held back. But held back in a fashion.

One brigade will be in Kuwait on standby, ready to move into Iraq if there are any security problems that are unexpected. The other brigade at Fort Riley, Kansas, will stay home, except some small numbers of those troops are likely to go to Iraq to work as trainers and to help the new Iraqi security forces.

What we're really looking at in 2006, Kyra, is a draw-down, but a shift in strategy. The kinds of U.S. military forces we're going to see in Iraq will be much less on the heavy combat side, much more on the trainers and the support troops for the Iraqi security forces -- Kyra.

PHILLIPS: Barbara Starr live from the Pentagon.

Thank you.

And the post-election politicking is heating up in Iraq. Various groups are now rejecting the early results of last week's vote, citing fraud. They include Sunni Arabs, Kurds, and Shiite Arabs led by former interim prime minister Iyad Allawi and Ahmed Chalabi.

They want new elections, and the independent Electoral Commission, which oversaw last week's vote, disbanded. Otherwise, they warn, expect nationwide protests. Partial results show the UIA with a commanding lead. It includes the largest Shiite parties in Iraq.

Well, they are as young as 12 years old, and all they want to do is rebuild their own town. As a matter of fact, most of them are tagging along with their older brothers, insisting that they be given a hardhat and a tool set, just like the other boys. We told you about the construction apprentice program in Iraq last year. Now you're going to see how much it has grown and inspired dozens of young Iraqis to work.

Retired Navy Rear Admiral Chuck Kubic used to command the C.B.s (ph) under which the program started. Now he's heading back to Iraq, working for a private company that's helping keep the apprentice program going.

Chuck joins us live from Boston.

Good to see you, Chuck.

REAR ADM. CHUCK KUBIC, U.S. NAVY (RET.): Good to talk with you again, Kyra. A little chilly up here in Boston today.

PHILLIPS: Yes, it is, but you don't have a transit strike to worry about. So that's good. We got you to the bureau, we can talk about the program.

You sent me some of these recent pictures of the graduation, and I think what surprised me the most from a year ago when we talked, how young these kids are. Twelve years old the youngest graduate.

Now, to me, I'm thinking, why isn't that 12-year-old in school? But, at the same time, I think it's fantastic they they want to get out and work and be a part of this program.

KUBIC: Well, Kyra, it surprised us a bit last year, as well. Last year, when we started the program, we were still targeting ages 16 to 22. And it seemed like we got people as old as 30 because they were looking for the skills, looking for the stipend that the school paid and didn't have any other work.

When we came this year as a civilian contractor sponsored by the Air Force Center for Environmental Excellence on a contract that we were working on, we tried to target the same age group, and we do have a lot of kids that are 16 to 20, but we had some younger ones. At first, I was a little bit concerned, but they were so motivated that we did let them join the class.

And I think what we're seeing is that the older men all have jobs now, and that they're getting paid more than the stipend. And yet, the young kids really want to learn.

So we went ahead and let them come into the class. They really don't have good local options for school, and many of them have lost fathers or mothers or both, and they do have to do something to support their family. And again, they were as energetic and as eager to learn as their older classmates.

PHILLIPS: Now, you think about the typical 12-year-old, right? And probably right now they're talking about how they want the Xbox 360. And here's these young kids showing up, extremely professional, saying, hey, I want to learn how to do this, I want to work. You know, what is it? Why -- I mean, I think it's obvious because it's a war-torn area, but what is it these kids have or have learned that has given them such a strong work ethic and a desire to want to do this?

KUBIC: Well, you know, we actually looked early on, on what to name the program, and we found that the word "apprentice" resonates well in Arabic. And the kids, of course they're getting a stipend, they're learning, but they're also earning new respect, respect among their parents, respect with their brothers, and they really like being a part of the team and coming to school every day.

In fact, as we have to clear the workers through the gate into the base, they were always lined up in the right order, the first ones in to work. And I think it's just the fact that they're doing something, doing it productive, and they're very, very eager and very well disciplined for young kids.

I was surprised when we went in for the graduation ceremony. They all stood up together, and when I started talking to them about how many of them had been to class every day and had not missed a single class, I would say probably 90 percent of the hands went up.

PHILLIPS: Wow.

KUBIC: So, they're very, very committed to this. They like to learn.

PHILLIPS: And right now, these kids, and even young adults, they're actually -- we won't give the exact area away because you've had a lot of issues with security. We'll talk about that in a minute.

They're coming to work still, even when they're dealing with attacks. But tell me about this interesting former Saddam military base that all of you are turning into a facility for the new Iraqi army.

KUBIC: Well, it's a key part of the transition from our U.S. forces to the Iraqi forces as the battalions, as the brigades are trained, they need to be properly positioned around the country. So, we've been building both new bases and also renovating older bases to receive these -- these new troops.

And so, it's a very critical part of the transition strategy to have the facilities available, properly position them. And the work that these kids are doing as on-the-job training is actually contributing to the completion of these bases, which then will bring the Iraqi troops in, which is a direct requirement for our own troops to go home.

So, in some respects, they are helping to build their own country and they're also helping the transition to the Iraqi army, replacing our own troops.

PHILLIPS: And I think that's what a lot of people want to hear, is they want to hear that U.S. troops will be able to come home and the Iraqi army will be up and running. And you're helping to create that.

The security situation, you've had a number of attacks. I know you don't want to talk about the lives lost and the injuries, but it's been -- I mean, one is plenty, but there have been a number of those.

Why do you think they keep coming back to work?

KUBIC: Well, it's inspiring, Kyra. This is one of the toughest areas in Iraq, and we won't specifically cite where the -- where the base is. But early on we had problems even getting workers to come because they were afraid to come to work. But it kind of builds on itself.

They get in, they begin to take ownership, you know, of the construction. They want to see it through. And the kids got into the same spirit.

And there have been some threats. In fact, we had one mortar attack that had a round land about five meters from where their classroom was. Fortunately, no one was hurt. And we did relax the school attendance for a couple days, but then they were all back.

And as you see them, you can see them looking towards the future. And they know that this is not the Iraq that they want. And they're willing, both for the ability to learn and also for the stipend. They have a responsibility it to support their families, and so they come back.

And they're coming back into the base each day in the hundreds, workers. And these kids are part of them.

So, again, it's very, very inspiring. They're very, very courageous, and they are making a difference. And every day they're helping to complete this base and to support the transition to their own army.

PHILLIPS: Retired Rear Admiral Chuck Kubic. We'll continue to follow the construction apprentice program.

Thanks so much for your time, once again.

KUBIC: Thank you, Kyra, and Merry Christmas.

PHILLIPS: Same to you, Chuck.

Well, straight ahead, a push to get transit workers back on the job in New York City. We expect to hear from two of the key players, Mayor Michael Bloomberg. Also, in the next hour, the governor of New York. He'll be joining us live.

We'll bring you both as soon as they happen, the news conference and the live interview.

(COMMERCIAL BREAK)

PHILLIPS: Right now waiting for New York City Mayor Michael Bloomberg to step up to the mic to talk about this transit strike. Hopefully an agreement that will be made soon and we'll see workers back on the job. We'll bring it to you live as soon as it happens.

Happening right now, also, at the major airports, new screening procedures at passenger security checkpoints. Federal officials say that random searches of about two minutes will occur more frequently in an effort to keep terrorists guessing.

And as screeners shift their focus toward detecting explosives, several carry-on items forbidden in the wake of September 11 are being allowed on board again. They include short scissors of up to four inches long, plus tweezers and nail clippers.

Among items that are still banned: box cutters, lighters and non- disposable raisers.

If you're traveling this season with holiday gifts, authorities suggest you leave them unwrapped to avoid potential delays.

With those new regulations taking effect, here's a quick look at what screeners have found in the last few years.

(BEGIN VIDEOTAPE)

DARYN KAGAN, CNN CORRESPONDENT (voice over): Airport screeners have confiscated about 30 million items since the TSA took over screening nationwide in February of 2002. The most popular confiscated item is the lighter. But scissors and tools make up about 25 percent of the items confiscated this year.

A spokesman for the TSA says they still catch two guns a day on average at airport security checkpoints nationwide. You might recall one of the most disturbing examples.

In July of 2003, screeners in Orlando found a handgun hidden inside a 10-year-old's teddy bear. Apparently a stranger had given the bear to the boy only a few days earlier. He and his family were released by the FBI after it became clear they had no idea the gun was there.

(END VIDEOTAPE)

PHILLIPS: Well, it was down to the wire, but Senate leaders agreed to give the Patriot Act a new lease on life. Key provisions of the anti-terror law have been extended for six months. They were due to expire December 31.

CNN's Andrea Koppel following developments on the Hill.

Andrea, what are we -- well, what are we waiting for with regard to the House to reconvene this afternoon, right? And are you expecting any surprises on the Patriot Act extension?

ANDREA KOPPEL, CNN STATE DEPT. CORRESPONDENT: Kyra, probably not. No real surprises expected for a couple of reasons. One, as you said, the Patriot Act expires December 31. Both sides, Republicans and Democrats, have really agreed that this is a national security issue and you shouldn't let it expire.

And secondly, it would be hard to imagine considering that not just the Senate Republican leadership, but President Bush also reversed course and green-lighted that six-month extension. So the fact that you'd have a Republican-dominated House vote against it would be very difficult to see.

I just have to add one caveat. The Senate did leave open the door to the possibility they'd come back later tonight if the House didn't pass it, but nobody expects that.

PHILLIPS: Well, let's not forget the defense spending bill, Alaska oil drilling provision. That got things stirred up, no doubt.

KOPPEL: Yes, it sure does. Right now, the way things stand, just like with the Patriot Act, you've got the House coming back. They're supposed to give their stamp of approval before it goes on to the president for his signature.

It would be unimaginable that you would have a defense spending bill, $435 billion, with the middle of a war, when you've got funding for both Afghanistan and Iraq, that they wouldn't move this forward. But then, again, it was also hard to imagine that you would have something like what Ted Stevens did -- that's the Republican senator from Alaska -- where he really threw senators a curveball and attached that oil drilling legislation to open up the Arctic National Wildlife Refuge.

He attached it really at the 11th hour. And despite the fact that he was wearing his Incredible Hulk tie -- it's his lucky tie -- they ended up stripping it from the bill -- Kyra.

PHILLIPS: You know, when it comes down to it, here we are at the end of the year, obviously very busy, a lot of political infighting.

KOPPEL: Absolutely. And I think we can expect more of it next year, early next year. That's because the Senate Judiciary Committee is supposed to take up the Judge Samuel Alito nomination. That's President Bush's nomination to go to the Supreme Court.

And then, of course, you've got all kind of talk on both sides of the aisle. Republican Senator Arlen Specter is the chairman of the Judiciary Committee, among them, saying that there may need to be some congressional investigations into the fact that President Bush admitted that he had signed off on secret NSA wiretaps of American citizens -- Kyra.

PHILLIPS: Andrea Koppel working the Hill for us today.

Thanks, Andrea.

KOPPEL: Sure. PHILLIPS: New York transit workers could soon be back on the job. We expect to hear from Mayor Michael Bloomberg live this hour. We're going to bring you his remarks.

We'll be back after a quick break.

(COMMERCIAL BREAK)

PHILLIPS: The president of the United States leaving the White House, getting ready to head to Camp David for the Christmas weekend. He's coming out to speak with reporters.

We're just going to listen in and see what he has to say before he takes off.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Hope you all have happy holidays.

This has been a year of strong progress toward a freer, more peaceful world, and a prosperous America. We had three sets of elections in Iraq, which were -- it's an amazing moment in the history of liberty. A new parliament has been seated in Afghanistan.

Our economy is strong and getting stronger. People are working. We've added 4 .5 million new jobs since April of 2003.

Productivity is up, small businesses are flourishing, home ownership is high. It's been a good year for the American people.

And we've got a lot of work to do.

Yesterday and during this past week, the Congress acted in a -- in a wise way with the taxpayers' money. It's a fiscally responsible set of appropriations bills that were passed that funded important priorities, key priorities to make sure our troops have what they need to do their job. The DOD bill did just that.

Another key priority is to make sure the people on the Gulf Coast of our country get the help they need to help rebuild New Orleans and the Mississippi Gulf Coast. And there was a good deal of money available for the -- for those who suffered from Katrina and Rita.

The -- it appears to me that the Congress understands we've got to keep the Patriot Act in place, that we're still under -- under threat. There's still an enemy that wants to harm us, and they understand the Patriot Act is an important tool for those of us here in the executive branch to use to protect our fellow citizens. And so the Senate extended the Patriot Act by six months.

As we head into the holiday season, I do want to say to the families of those who have got a loved one deployed overseas, we stand with you and we pray with you for the safety of your loved one. We want to send our greetings to your loved one overseas and tell them how much we appreciate you serving for the cause of freedom and peace.

Anyway, hope you all have a great holiday. Thank you very much. See you.

PHILLIPS: The president of the United States with his final remarks as he gets ready to get on to Marine One there and head to Camp David for the Christmas -- for the Christmas weekend.

We're also, as we monitor the president, we'll bring Elaine Quijano here in just a moment. We're also expecting to hear from Michael Bloomberg, mayor of New York City, on the latest in the transit strike. Hoping to hear if workers are coming back to work there in New York.

Elaine Quijano, were you there in the crowd, or are you planted there in the front lawn of the White House as the president gets ready to leave for Christmas?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Listening from the north lawn, Kyra, not there in the crowd.

PHILLIPS: OK.

QUIJANO: But you heard President Bush there just giving some brief remarks as he wraps up the final weeks of 2005, looks ahead to 2006.

You heard him talk about the priorities looking forward. Of course, on that agenda is the rebuilding of those areas so hard hit by Hurricane Rita. The president there outlining that he -- or Hurricane Katrina -- the president outlining there that certainly this is a major priority for him.

Also, though, the president looking back, thanking Congress, as well. Notably, the Patriot Act.

Now, that has been a point of contention with members of Congress, some of whom feel that the existing version, the one that the Congress was looking at, did not go far enough in ensuring civil liberties were adequately protected. At the same time, though, the president and Republicans coming together on an agreement for a six- month extension.

Now, that's not what the White House wanted originally. They were not looking for a temporary extension. Instead, they wanted to keep those provisions in place much longer, for four years or so.

Nevertheless, the president trying to claim victory on that, as well, saying that the Patriot Act is a vital tool in the war on terrorism. But you can bet in about six months or so, when the Patriot Act is up for renewal once again, we'll likely be hearing more debate on that issue -- Kyra.

PHILLIPS: All right. Elaine Quijano there at the north lawn as the president gets ready to leave for the Christmas weekend. He's heading to Camp David.

Elaine Quijano, thank you so much. Well, in Florida, a number of voting officials are still trying to get it right when it comes to problem-free elections. Leon County officials say that they're dropping Diebold optical scan voting machines; that's after a test last week to see whether machines' results could be hacked using a rigged memory card. The test got the machine to give misleading results. Well, the computer science professor who helped come up with the test says he thinks that other types of electronic machines are also vulnerable to hacking.

(MARKET UPDATE)

(COMMERCIAL BREAK)

PHILLIPS: Well, there could be some good news for New Yorkers. We're being told two board members saying there has been a vote to get transit workers back to work.

Allan Chernoff, are you hearing the same thing?

CHERNOFF: Yes, Kyra.

We do have the vote and the Transport Workers Union Executive Council has voted in favor of this framework that will put the transit workers back on the job and, also, get negotiators back to work.

The vote was not unanimous, though. There were five members of this board opposing it, two abstaining, more than 30 voting yes. But that just shows you that there really is dissension within the Transport Workers Union.

The vote to strike also had not been unanimous. But nonetheless, the transit workers now voting to go back to work and also to begin negotiating, once again, with the Metropolitan Transportation Authority.

Keep in mind, this does not resolve the contract issues, but at least it will end the strike.

So New Yorkers can at least look forward to the buses and subways going back online, hopefully before tomorrow's rush hour -- Kyra?

PHILLIPS: So what do you think? We've heard it could happen within a couple hours or, obviously, not until tomorrow morning. Do you think it could be as soon as today?

CHERNOFF: Well, Kyra, it's quite simple to get buses back on the road, but to get the subways rolling again is far more complicated. You have to make sure that the switches are all working, you have to make sure that the signals are working.

And also, the New York City subway system -- lots of it is quite old. Some very old infrastructure there.

So we've heard reports between 12 hours up to 24 hours to get the whole system up and running again. I don't know the exact number, but the reports have been all over the place. PHILLIPS: Allan Chernoff, thanks so much.

And we are waiting, of course, for Mayor Michael Bloomberg to step to the mike and hold a live news conference now that we know that the TWU has voted in favor of getting workers back into the job while trying to negotiate a contract.

We're assuming we'll probably hear from the mayor pretty soon. Well bring it to you live when it happens.

Take a quick break. More LIVE FROM after this.

(COMMERCIAL BREAK)

PHILLIPS: All right. We're going to take you straight to that news conference we expected to have. Of course, OK -- we're sorry it hasn't started yet. I apologize. We are waiting for Mayor Michael Bloomberg to step up to the mike and talk about the news that we just brought you.

We got word the TWU has voted in favor to put its workers back on the job there in New York and to keep the negotiating going. Of course, this doesn't mean that they have resolved the dispute about contracts, but the good news is they have made a deal that the workers will go back to work. Who knows when that could happen? By the end of the day, hopefully by early morning rush hour. Meanwhile, the talks will continue, the negotiations are going to continue to get a contract link very soon. As soon as the mayor steps to the mike, we'll take it live.

Well, an American soldier is getting a pretty amazing Christmas gift. When he gets back from Iraq, he'll be moving into a brand-new free home.

Cindy McGrath of CNN affiliate WPGH has the story from McKeesport, Pennsylvania, just outside of Pittsburgh.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Oh, my goodness!

CINDY MCGRATH, WPGH REPORTER: Rosalind Martin couldn't believe her eyes -- a four-bedroom home wrapped in a big red bow, a Christmas present for her baby brother, with no strings attached.

UNIDENTIFIED MALE: You've got to cut the ribbon first.

MCGRATH: Forty-year-old Sergeant Kevin Martin is a transportation specialist. He drives supplies from Kuwait to Baghdad, a dangerous job, and Martin's teenaged sons know it.

DEVIN MARTIN, SON OF SOLDIER: I can't get it out of my mind, because like he just -- he got two friends over there, they just got killed.

MCGRATH: When Rosalynn learned about the home giveaway, she wrote a letter nominating her brother, a father of five, who was having a hard time supporting his family.

UNIDENTIFIED FEMALE: With finances so scarce, he resorted to the only thing that he had ever known, and as a National Guardsman he volunteered for active duty.

MCGRATH: The letter clinched it. When Rosalynn found out her brother won, she called him on the phone. It was midnight in Iraq.

UNIDENTIFIED FEMALE: And it sounded like he had to get up and turn on the light. He's like, am I dreaming? And I said, no, you won, and he just went to screaming and hollering. I probably woke up half the troops.

MCGRATH: The home giveaway was the brainchild of Jim Toner, a real estate investor with close friends serving in the military.

JIM TONER, DONATED HOUSE: I wanted to make a big impact on somebody. I wanted to change the life. I wanted it to be something that we'll remember forever, and maybe they'll take that and they'll do it for somebody else.

UNIDENTIFIED FEMALE: This house will be the best home homecoming gift for this family and bring them together.

MCGRATH: A holiday homecoming with only one thing missing, Sergeant Martin's tour of duty isn't over yet, but well-wishers will gather again next month to say two long-awaited words.

UNIDENTIFIED MALE: Welcome home.

(END VIDEOTAPE)

PHILLIPS: And in just a second, we are going to talk with Sergeant Kevin Martin and his sister Rosalind and also Jim Toner, who started the Hope Lives Foundation, that got that home to the young sergeant.

But, first, we want to go back to Allan Chernoff in New York as we're waiting for the mayor of New York to step up to the mikes. Allan, you were the first to bring us the news. The TWU voted in favor to put its workers back on the job. Good news, negotiations will continue. Still doesn't mean a deal will be reached, but at least workers are getting back on the job.

CHERNOFF: That's right. This deal was brokered by a state mediator, a group of state mediators. They essentially were able to get both sides to step back from the brink. Remember, the key issue here had been pensions. The Metropolitan Transportation Authority had been insisting on changes to the pension plan for new hires to the Transit Authority, which runs the subways and buses. The union had said no changes whatsoever to the pension.

So, the deal that was brokered is that the MTA, for now, is going to set aside the issue of pensions and try to find some cost savings from the health insurance plans. This allows the union to say it is still protecting those pensions, ever so important to the employees, to the union members.

And that's exactly how the deal was brokered. So, both sides sort of stepping back, cooling off. And this, at least, will get service back for New Yorkers. That's the most important thing. The mayor has said throughout this entire ordeal that he has, quote, butted heads with many unions here in New York City. But he said those unions have not walked out, they have not struck. He said, go ahead, take your time, negotiate a deal, but don't strike. Keep serving New York.

PHILLIPS: Now, a couple questions for you, Allan. When the workers did go on strike, there was first talk -- you and I talked about this, that the fines per worker could be about $25,000 a day, that they were on strike, maybe even more. Then there was a court order that the union would have to pay $1 million a day because they were striking illegally.

What happens with all those fines while they were striking? Will those fines still have to be paid or will that now go away since some sort of deal was come to today?

CHERNOFF: Well, these fines were ordered by a judge. It would seem that these fines would stick. And specifically, we're talking about the million dollars per day for the union. And three days, the union said it had about $3.5 million in its treasury. So this would pretty much clear out the union.

And the workers, they are supposed to be fined two days pay for every day on strike. Remember, the strike is illegal here in New York state. The Taylor Law forbids public employees from going on strike. So, I would be shocked if these fines were wiped away suddenly because the workers here, the union, they did violate the law.

Now, that charge of $25,000 per day against the strikers. That actually never was imposed. The city threatened that, they said that they would seek that redressed in court, but that actually was never, never actually pursued by the city. They only threatened it.

PHILLIPS: All right. Allan Chernoff, we're going to come back to you. Of course, we're waiting for the mayor to step up to the mike and talk about this deal that has been reached so workers will go back on the job. Still not a deal with regard to the contract, but the mediators were able to bring everybody to a peaceful resolution about getting workers back on the job.

We're also, next hour, going to talk with the governor of New York. He has agreed to talk to us about this deal that is made. Once again, the TWU voting in favor to put workers back on the job while keeping negotiations on the table.

Now back to that story we were telling you about. This American soldier getting a pretty amazing Christmas gift.

We're going to meet all the people involved now, the ones we just Jim Toner of the Hope Lives Foundation. He joins us from Pittsburgh. Here with me in Atlanta, Rosalind Martin, who persuaded Mr. Toner's foundation to give the house to her brother, Kevin. And live from Kuwait, the winner of this home, Sergeant Kevin Martin of the Army National Guard.

Welcome to all of you, merry Christmas. It's a great story to talk about.

Sergeant, when you got the news, how did you react? Was it like 3:00 in the morning when you got the call from your sister?

SGT. KEVIN MARTIN, ARMY NATIONAL GUARD: No, it was more like -- it was about midnight and we were all asleep, but everybody got up when they heard me start hollering. And I couldn't believe it. I ain't won nothing in my life, so it was hard for me to -- I mean, some people just say that, but I really haven't won anything in my life. And I just didn't know how to react, so I hollered.

PHILLIPS: Did know what your sister was up to?

K. MARTIN: Yes, I pretty much, she was -- my other sister, they can't keep a secret. So, it got out what they were up to.

PHILLIPS: So, Ros, let me -- no doubt, I can just imagine. My gosh, midnight, getting that call. Ros, you know your brother so well. You love your brother so much. You were so excited to see him pop up on the screen. He's got five kids, he's never won anything in his life, like you said. He's never even owned his own home.

ROSALIND MARTIN, SISTER OF KEVIN: Exactly.

PHILLIPS: He laughs. He's got a good spirit about that. I got to tell you, Kevin, I'm impressed. When you found out about this contest for a free home, what did you do? You wrote a letter, right?

R. MARTIN: Exactly. When I found out about the contest, I had kind of went online and looked in the daily news that comes online and found out about the contest and I said, this is the break my brother needs. I mean, first of all, he's in love with the city of McKeesport, anyway.

And, so, being that we're from McKeesport and everything, I just thought it would be a great opportunity to enter him, with my fingers crossed and praying and that this would be the break that he needed and I am so grateful that it happened for him.

PHILLIPS: Well, you wrote this beautiful letter. Matter of fact, there's a part here in the letter -- it says "Sergeant Kevin Martin does so much for his children, siblings, nieces, nephews and yet, when he comes home, he doesn't have a place to call his own." What's so special and unique about your brother that compelled you to do this?

R. MARTIN: Well first of all, my brother, although he's my baby brother, he is the one that kind of keeps the family together. He always -- he's very family-oriented and, come on, let's do family activities and all of that. And any way that he can help you, he'll do that. And he never turns anybody away -- from myself if I needed anything. He would give it. If my sister needed anything, he would give it.

Nieces and nephews all know that if they can get -- if they need something, they can get it from Uncle Kevin. So he is just very family-oriented and he really deserves a real break in life. And so I was just really happy to write this letter and I was just really happy to just share with the world now what a great brother I have. And he's sharing. And, you know, what you make happen for others, God makes happen good for you.

PHILLIPS: Well, Kevin, I'm hearing about how wonderful you are. How about your sister? What an amazing woman. What was it like growing up with her? And just the love you have for your family -- I mean, you sound like an absolute angel.

K. MARTIN: Well, my sister is actually the strength of the family. She's very -- she gives lots of good advice to us, you know, and she keeps us together. She also works hard at keeping the family together and she keep us in (INAUDIBLE), you know, with God. She's a pastor and I go to her for a lot of advice. A lot of things that I was going through in life, I would go to her. I mean, who else would I go -- why else would I to anyone else when I have a sister that's a pastor?

PHILLIPS: Well, Jim, I can't think of two better people to be involved with you and your organization. Tell me why you decided to do this contest? And how did you find the home? Did you build it? I mean, give me the background.

TONER: Well, I think part of it was just plain insanity, just deciding to, you know, stick my neck out and say, hey, I'm going to give my house away. But I'm a real estate investor and we -- my company, Real Estates Riches -- teaches people how to invest in real estate. And every week my daughters watch "Extreme Home Makeover" and it's their favorite show.

And I watch the program and think, you know, I could do that. So I decided to take it from there, but the catch is, well, who do we give it to? And when we talked about it with my board members from the Hope Lives, we couldn't think of anybody else than a returning veteran that would be more deserving for a home. We just wanted to give somebody a fresh start.

PHILLIPS: Was there anything in the letter that really just tugged at your heart or people on the board, Ros' letter?

TONER: His letter stood out. It was hands and above the rest. It -- the second you read it. I'll never forget, when my wife read it the first time at our kitchen table, she just started crying right away. And I said, what are you reading? and she showed me the letter and it was the same one that I had read. Just everything about it. We were looking for a selfless individual, someone that was in -- who was in the most need. And somebody that really could use not a hand up -- not a hand-out I should say, but just a hand up. And he certainly fit the bill for that.

PHILLIPS: Kevin, you sound like an amazing father. Five kids. How do you do it? And how do you stay in Iraq and stay in that fight while thinking about those kids every day?

K. MARTIN: I try to spend time with them as much as I can. You know, and living in different cities right now. But when they do come to stay with me or whatever -- now we have a home to stay in, and they're looking forward to it and I'm looking forward it and I just can't wait. I just can't wait to get my kids up under the, you know, one roof and, hey, show my love for them.

PHILLIPS: Well, it seems like you deserve it, Ros. I can't think a better person to write a letter about. Pretty awesome.

R. MARTIN: It really is. But I also wanted to say, too, that although I wrote the letter, it was the composition of it was part of both me and my sister.

And so, I was just glad that we just kind of got together and put our thoughts together and pour out our love on paper. So it was a great -- it was a great thing to do and I'm just happy that he won.

PHILLIPS: It's an awesome payoff. All right, Sergeant Kevin Martin you have to come home safely to those five children and this wonderful sister and the rest of your family. And tell us how the home is when you come home, all right? We can't wait to see you enter it for the first time.

K. MARTIN: Definitely. I can't wait to see you guys either. When I get home, I really want to meet Jim. I definitely want to meet Jim. That's a great guy and I really want to meet this guy. This is unbelievable. You made a dream come true for me.

PHILLIPS: You're going to meet him. Well, we lost him on the satellite, I apologize for that. But I promise I'll let him know exactly what you said and we will have all three of you back. Thank you so much, Kevin, Jim Toner as well. Thanks, Ros.

R. MARTIN: Thank you, love you.

K. MARTIN: I love you, too.

PHILLIPS: There we go. Got to share the love. Merry Christmas, Kevin.

K. MARTIN: All right, merry Christmas to you guys, too.

PHILLIPS: Thanks Rosalind, very much.

We're continuing to follow, of course, the good news coming out of New York City. The TWU voting in favor of putting its workers back on the job. We're waiting for the mayor of New York, Michael Bloomberg, to step to the mic's.

We're going to take that as soon as he steps up. Of course, it doesn't resolve the dispute. They still need to work out a contract. But the good news is, workers back in the force, maybe by the end of the day, possibly tomorrow morning. We don't know. Hopefully the mayor will be able to tell us. We'll take you live to New York right after a quick break.

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PHILLIPS: Once again, we're monitoring a live event that we're waiting for. The mayor of New York to step up to the podium and talk about this deal that was reached during mediation. A state mediator actually helped the TWU come to voting in favor of putting its workers back into the job while continuing to negotiate a contract.

As you know, this doesn't resolve the dispute that will continue now. That conversation, that negotiating for a good contract in the eyes of TWU, of course in the state. But, the good news is, we're told, workers will be heading back to the job. Not quite sure when that will be.

But we have a live picture there outside of the union headquarters in addition to waiting for the mayor. Also coming up in the next hour, 3:00 Eastern time, the governor of New York, George Pataki will be joining us to talk live about this, as well.

We're following all the developments in New York transit strike. We're bring you all the angles. Take a quick break, we'll be right back.

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