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Defending Against Enemy Missiles; State Department News Briefing; Ken Lay's Life and Career; Immigration Battle Rages On; Bush Meets with President of Georgia

Aired July 05, 2006 - 14:00   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: Poised for weeks and launched on the Fourth of July. So, what else do we know about North Korea's missiles?
A total of seven were test-fired in a span of about 14 hours. The tests began shortly after 2:30 p.m. yesterday and just about at the same time the space shuttle Discovery launched at the Kennedy Space Center. One of the missiles was long range, and the other six were short-range scud-type missiles. The long-range missile failed less than a minute after firing.

U.S. officials say none of the missiles posed a threat to any American interests.

And again, we are waiting for comments from the White House, as well as from the State Department. It would be the first time we're hearing from the president directly out of the White House after the test-firing of those missiles out of North Korea.

The words, "provocative," "unwise," "irresponsible" and "reckless." The speakers, world leaders firing condemnation back at North Korea. And here in the U.S., the test-firings refocus debate on how, if at all, to defend against enemy missiles.

Our senior Pentagon correspondent, Jamie McIntyre, joins me now -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Fredricka, the United States only has a limited missile defense at this time, but it says that the show put on by North Korea yesterday gave it a chance to take a look at what it might have done if it had been in a scenario that we're facing actual threat.

As you said, seven missiles fired altogether. Six of them were short or medium-range missiles, either Scuds or what's called Nodong missiles. That includes about three Scuds and three Nodong missiles, according to Pentagon sources.

The missiles -- two of them were fired before the long-range Taepodong test took place. The other four were fired after them in a period of hours. They were monitored both by satellites in the sky and by U.S. ships that were in the Sea of Japan, including a special ship called the USNS Observation Island, a high-tech radar monitoring ship that was specifically watching all of the launches of North Korean missiles. Now, had there been an actual launch of the Taepodong, which basically blew up less than a minute after it took off, but had it continued on and been on a trajectory toward the United States, that would have provided more of a test for the ground-based interceptor system that is now in place with a series of nine interceptor missiles at Fort Greely, Alaska, and two in Vandenberg Air Force Base in California.

But a statement from the U.S. Northern Command, which is in charge of the U.S. missile defense, says, "While the ground-based Midcourse Defense System interceptors at Fort Greely and Vandenberg Air Force Base were operational during the flight, top officials from the command were able to determine quickly that the launch posed no threat to the United States and its territories."

Therefore, no action was required on the part of the missile defense system.

Still, it was a workout for the radars and monitoring system. And the U.S. military insists that even though the U.S. missile defense system is in its infancy, it does have a limited capability. And were there an actual threat, well, it might not be guaranteed. At least they would have a shot at shooting down an incoming missile -- Fredricka.

WHITFIELD: Jamie McIntyre, thanks so much, from the Pentagon.

We're told the U.S. military was expecting North Korea's test launches and activated a couple of interceptor missiles just in case.

CNN's Kareen Wynter is at one of the West Coast missile defense bases today, Vandenberg Air Force Base, in California.

And Kareen, were these pretty tense, nervous moments there?

KAREEN WYNTER, CNN CORRESPONDENT: Well, not really, according to officials. And definitely not from the community. We've been able to sample some of the reaction here, and people are really treating it, Fred, as if it's just another day.

It is quite quiet right now. It's been quiet all morning. In fact, the media isn't even allowed on the base. We've been right outside, and, in fact, any official comment, we've been told, must come out of Washington.

But we did hear from an official yesterday confirming that two interceptor missiles were activated here. They are ready to go. They have not been launched, but that they are ready to go, and that they're being remotely operated by Northern Command.

Also, Fred, I know Jamie went over this in quite a lot of details, but I wanted to touch on what would happen if the situation right now were facing were more serious in terms of activating a launch from this site. Their sophisticated systems, satellite systems set up by the U.S. that can track intercontinental missiles, anything that may be seen as a threat, and there are systems in place that cannot only detect the location, but they can also tell what type of launch it is. And from there, Fred, a decision would be made as to whether or not to activate those inter-connector missiles from this -- interceptor missiles form this location or another location in Alaska.

So, that gives you just a brief overview as to what to expect, again, if the situation was a lot more dire right now.

WHITFIELD: And so, Kareen, how confident are they in this missile defense system?

WYNTER: What's interesting, Fred, is that in 2002 there were a few tests that were done, one in October, and it was a success when those missiles were tested here. That they did, indeed, we're told, hit their intended mock target. But that when this was done just a few months later in December, that the tests failed.

I had a chance to speak with a missile defense analyst earlier today who describes the current system that we have right now as quite rudimentary, that it's unproven and that there's still a lot of work to be done. I also asked him, Fred, "What if we were facing an immediate threat right now? How quickly could we respond?" And he said, "Well, it wouldn't be immediate because there are so many channels, so much authority that we would have to see in terms of different levels of command."

Signing off on this, it would actually take several minutes -- Fred.

WHITFIELD: All right. Kareen Wynter, thanks so much.

The name Ken Lay, it will always be connected to the massive collapse of the company he helped build. The Enron founder and former CEO was convicted in May of conspiracy and fraud and was due to be sentenced in October.

Overnight, at his home in Colorado, Lay died, reportedly of a heart attack. He was 64.

CNN senior correspondent Allan Chernoff looks back at his life and career.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SR. CORRESPONDENT (voice-over): Before Ken Lay became the face of corporate scandal, he turned Enron from a sleepy utility to the hottest energy company the nation had ever seen. At its height, Enron was number seven on the Fortune 500.

Lay, who grew up in a working class family, became one of Houston's biggest philanthropists. He was friends with President Bush, who called him "Kenny Boy."

In early 2001, Lay had already given up day-to-day oversight of Enron, but when his successor Jeff Skilling abruptly resigned, Lay returned as the company's leader, just as Enron was about to collapse.

By January of 2002, Enron had unraveled and Lay resigned as chairman and CEO.

KEN LAY, FMR. ENRON CEO: I have, however, been instructed by my counsel not to testify based on my Fifth Amendment constitutional rights.

CHERNOFF: He invoked the Fifth Amendment at a congressional hearing, but for several years Lay was untouched as lower-level Enron officials pled guilty or were convicted. But after former chief financial officer Andrew Fastow agreed to testify for the government, Ken Lay was finally indicted.

LAY: The Enron collapse was an enormous tragedy, but failure does not equate to a crime.

CHERNOFF: Several days later, Lay said he took it hard that so many Enron employees had lost their life savings when the company's stock became worthless.

LAY: I'm incredibly sorry. I mean, I grieve for them. I honestly still grieve for them and probably will unit the day I die.

CHERNOFF: Lay also told CNN's Larry King if there was criminal conduct at Enron, it had been occurring without his knowledge.

LAY: I cannot take responsibility for criminal conduct that I was unaware of.

CHERNOFF: Lay was a churchgoing man. And it was at church the Sunday before his trial that he expressed optimism to CNN.

LAY: I have a long trial and a tough trial, but we're going to be fine.

CHERNOFF: But on May 25th, just six weeks ago, Lay was convicted of fraud and conspiracy.

LAY: Certainly this was not the outcome we expected. I firmly believe I'm innocent of the charges against me, as I have said from day one. I still firmly believe that as of this day. But, despite what happened today, I am still a very blessed man.

CHERNOFF: Lay had also been convicted of bank fraud in a separate trial. Legal experts said Lay could have been sentenced to decades in prison, where he might have spent his final days.

Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

WHITFIELD: And now CNN's Susan Lisovicz joins us now from New York with more.

And Susan, you had an opportunity to interview him. How shocked, overall, is the business community?

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: It is shocking. And you know, Fred, I mean, he was a nice guy when I interviewed him. And I think that's one of the -- one of the aspects of this story that make it so dramatic.

He was a very humble guy, by all accounts. He was very likable. And -- but he was accused and then convicted of a crime, a white collar crime in which thousands of people got hurt and billions of dollars were lost. So, it's a shocking end to one of the most spectacular falls from grace in corporate history.

Ken Lay's minister today said that his heart just gave out. There were no indications that the founder of Enron was in poor health, but there was no question he was under enormous stress.

The one-time management icon was convicted on all counts in May of fraud and conspiracy charges. He was found guilty on all charges in a separate case of making false statements to financial institutions.

And then there was the tens of billions of dollars in lost shareholder value, the thousands of jobs lost, the pensions that were erased. The accounting giant Arthur Andersen also went out of business as a result of the Enron debacle.

On the day he was convicted, his lawyer said that, "Enron was his creation. He nursed it like a child, and the death of Enron was like the death of a child." He also said Lay will feel the loss of the pain caused to others until the day he dies.

Lay faced the likelihood of spending the rest of his life in prison. Prior to his conviction, he spoke to our Larry King about the difficulty of redemption.

(BEGIN VIDEO CLIP)

LAY: There's no place to go when this is all over to get your reputation back. The only way you get it back is to rebuild it.

And I hope on the other side of this, the good lord willing, I will have enough years and enough health that I can, in fact, do some very meaningful things still in business. I have got some things going on now that could become very significant over time and make a very meaningful difference to energy efficiency and the environment and education and some other things.

(END VIDEO CLIP)

LISOVICZ: Ken Lay died at his vacation home in Aspen today. He was 64. That was one of the few places Lay was able to travel to after conviction and prior to his sentencing later this year -- Fred.

WHITFIELD: All right. Susan Lisovicz, thanks so much.

The other big story we continue to follow, North Korea test- firing its short and long-range missiles. From the White House, we're expecting to hear comments from President Bush momentarily, and also comments coming from the State Department. When they happen, we'll bring them to you as soon as possible.

Meantime, two words that get many Americans fired up: illegal immigration. And today, the U.S. lawmakers take their concerns on the road. We'll go live to San Diego, where one of those hearings is taking place.

More LIVE FROM next.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

WHITFIELD: As promised, want to take you straight to the State Department now, where Sean McCormack, the spokesperson there, is addressing questions about the North Korea test-firing.

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: ... that will begin this afternoon concerning a statement and a resolution regarding North Korea's behavior.

So I think, again, we are in the first day of this happening, and we'll see where the diplomacy takes us.

But I would expect that what you're going to see is a strong, universal, international response to this. You've already seen it. And I would expect the international community is going to act on the diplomatic front to address North Korea's behavior, which is unacceptable. And it's also provocative to the entire world.

QUESTION: As a practical matter, though, is there anything that the United States can do individually or in concert with either of the other members of the six-party talks or through the U.N. that really would put the screws to North Korea to change? I mean, is there some economic measure you can apply, or political?

I mean, you and Secretary Rice have often said, you know, already a very isolated regime that seems not to mind its own isolation. So what can you really do?

MCCORMACK: Well, again, the point here is that this is not solely a U.S.-North Korea issue. Certainly, the United States is going to be talking to friends and allies around the world about what we might do together.

You point out that North Korea is isolated. Indeed, it is. And at times they seem to revel in their isolation. But they do have connections to the outside world. There are, for example, connections with Japan. The Japanese have taken some actions that began as early as this morning. And they are considering other actions. There are other states that have kinds of relationships with North Korea.

So what we're going to be doing in the days ahead is going to be talking to friends and allies around the world who are outraged by this action, which contravenes North Korea's own promises not to launch such missiles. And we're going to be talking in the international community about how to address this and what specific actions the international community might take.

At this point, I'm not going to detail them. I'm not going to go down the laundry list of what is possible, what is not possible, what will be agreed upon.

But what I think you sense among the members of the international community is the need to address this issue and to act and to act in a coordinated manner.

I would just point out that Ambassador Bolton, in the meeting up at the Security Council in New York, talked about the fact that within the Security Council, there's not one voice that spoke up for North Korea in taking this action.

And I think that's just one small indicator of the kind of universal condemnation that their action has met with.

I don't know what sort of reaction they expected to get from the rest of the world, but certainly we are going to see it play out in the days ahead some intensive diplomatic activity that the international community will engage in to talk about how to address this.

QUESTION: Are you satisfied with the reaction of China so far? Do you think they've been firm enough toward North Korea?

MCCORMACK: Well, I think that, again, what you have seen is a number of different actions, but they're all within, certainly, a standard deviation of one another; everybody's not going to use the same words.

But certainly China understands that this was a provocative, unacceptable action. I'm not going to speak on behalf of them. But certainly they know that there is a need to address this. They know that this kind of behavior serves only to isolate North Korea and that the international community, including those other members of the six- party talks, minus North Korea, have to discuss this.

I would point out the fact that, if you just look at the list of countries that Secretary Rice called and that Assistant Secretary Hill is going to be visiting, look at that list, that's the six-party talk list minus the North Koreans. So I think, in fact, the six-party diplomatic infrastructure has demonstrated its worth.

I think, if you go back to the mid- to late '90s, you probably would have found a completely different situation in which it might have been the U.S. and maybe Japan standing together. It's not the case today.

North Korea finds itself increasingly isolated and they find themselves increasingly isolated by their own actions. And certainly we would expect them to desist in this kind of behavior, any further provocative actions, and then reverse course... WHITFIELD: The State Department promising a strong, universal response which Sean McCormack is saying has already been demonstrated by the world community. Trying to address what he is calling unacceptable behavior. He won't detail what possible actions might be considered, but just that many talks are now under way.

Meantime, we are awaiting a response from the White House, momentarily. When the president emerges from the White House, we'll be able to take his comments live.

Also, we'll hear from our General Don Shepperd, who will help us understand what options militarily and otherwise intelligence the U.S. has in its missile defense capabilities.

House and Senate committees have scheduled immigration hearings this week around the country. A House subcommittee is meeting today at a border patrol station near San Diego.

That's where our Chris Lawrence is standing by.

And how's it going, Chris?

CHRIS LAWRENCE, CNN CORRESPONDENT: Well, Fredricka, it's been testy, combative, confrontational. The head of the Border Patrol here just took a pretty good grilling from several congressmen.

Normally these hearings are held to try to explore issues, find solutions. That's not the case with this hearing, or really the one in Pennsylvania, as well, sponsored by the Senate.

They're negotiating ploys. Both the House and the Senate members trying to position public opinion ahead of the time when they actually have to come together and hammer out some kind of agreement between their two bills.

The House version more of an enforcement-only provision that would criminalize a lot of the other people here illegally. The Senate version more favoring a guest worker program.

Here's a little bit of what we heard today, the difference between Republicans and Democrats talking about these hearings today, starting with a Democrat criticizing his Republican colleagues who have controlled the House and the Senate.

(BEGIN VIDEO CLIP)

REP. BOB FILNER (D), CALIFORNIA: They haven't protected our borders. This is -- this is an incredible failure, and they're going around the country to try to cover that up.

UNIDENTIFIED MALE: Both this administration, as well as our Democrats on the other side of the aisle, bear responsibility on this, as we do. Let's get going, let's do our job so that these people down at the border can do their job and stop this invasion of the United States, which is hurting the American people.

(END VIDEO CLIP)

LAWRENCE: Again, that's just some of what we heard today. The hearing expected to wrap up in the next 30 minutes, and we'll bring you more as more comes out of this hearing later in the day -- Fredricka.

WHITFIELD: And Chris, potentially what concrete could come from these hearings, especially since there are critics who are calling these hearings a charade?

LAWRENCE: That's right. The Republican governor of California said this was just a road show. There's been several critics of these hearings. But we did hear a little bit today even from the Border Patrol, who talked about what they need in terms of funding.

They said they need to be able to monitor the border electronically. There aren't enough agents to do it physically. And they need technology that will allow them to detect tunnels that are being tunneled underground almost every day.

WHITFIELD: All right. Chris Lawrence, in San Diego, thanks so much.

The other big story we're following today, those North Korean missiles we're talking about. At least one type supposedly can reach American soil. Scuds, we've seen those before, but Nodong, Taepodong? What about that? What's next?

You're about to get some answers. Our military analyst, retired Major General Don Shepperd, is coming up next on LIVE FROM.

(COMMERCIAL BREAK)

WHITFIELD: Well, you're looking at a pretty soggy view of the nation's capital. We're awaiting comments from the president today from the White House on the North Korean test-firing of those missiles within the past 24 hours. When those happen, we'll bring those to you.

Missiles fired from North Korea, they didn't hit anything. Most landed harmlessly in the sea. But the purpose of a test and what everyone is talking about today is potential, potential range, potential payload, potential threat of a government willing to use them. These weapons the North Koreans want the world to see are not the missiles of the Cold War or even the first Gulf War.

We turn to CNN military analyst retired Major General Don Shepperd for some basic missile understanding.

General Shepperd, good to see you.

MAJ. GEN. DON SHEPPERD (RET.), CNN MILITARY ANALYST: Good to see you, Fredricka.

WHITFIELD: Well, if these North Korean long-range missiles were heading for the U.S., how soon, how immediately would the U.S. know? And how quickly, or what kind of time would have to elapse before the U.S. could actually do something to perhaps intercept them?

SHEPPERD: Yes, these are really three separate questions.

First of all, when a missile is launched toward the United States, there is a lot that goes into assessing that missile. There are aircraft airborne, there are ships in the vicinity, there are space assets. All of those inputs are fed into, if you will, Cheyenne Mountain, the NORAD, North American Aerospace Defense Command, who, through their computers, make an assessment of whether or not a missile is a threat to the United States.

They compute an impact time, an impact point. And in the case of a North Korean missile launched against the U.S., we would probably have in the neighborhood of 20 to 30 minutes to decide is this or is this not a threat. That gives the president time to decide whether to launch a retaliatory attack if -- if that would be necessary.

On the other hand, our ability to intercept that missile is very minimal. During the ascent phase, we have some capability through the Aegis cruisers, but it's very short. And on the catcher's mitt side, if it's incoming, our national missile defense is in a very early stage, Fredricka. So it's a complicated question.

WHITFIELD: All right. So let's go back to those retaliatory attack potentials. When we talk about these Navy cruisers, how many are we talking about, and what is their potential for being able to intercept? Would they have to intercept on the missile's actual ascent, meaning just seconds in the air?

SHEPPERD: Yes. The Aegis missile cruiser is not designed for intercontinental ballistic missiles. It's designed for fleet defense, for cruise missiles, intermediate range ballistic missiles, if you will. And it has to be fairly close to the launch site.

So, you have to move these cruisers in fairly close. There has to be a rapid assessment of where it's going and a rapid decision to hit it so it hits it on the way up.

If you let it go into midcourse, it has very little capability. And on the incoming phase, an Aegis cruiser has very, very little capability, as do our other missile systems right now.

WHITFIELD: So, do you feel confident about the accuracy given that we're talking a matter of seconds in which it would have to respond?

SHEPPERD: No, I don't think that you would probably shoot a missile on ascent coming out of North Korea. It would be considered as an act of war. If you were that serious, you would very likely have watched several shots and their tests, have warned them several times. And it would be a lot easier to take the missile out on the pad rather than let it launch and try to get it on the way up.

We're at the very early stages of being able to conduct missile defense against intercontinental ballistic missiles. The system is extremely expensive, we're in the early test phase. Even though it's been declared operational, we'd be lucky right now to intercept a missile coming in.

WHITFIELD: So a moment ago, General, we were looking at animation of another interceptor-type system; that being their sites in Alaska, as well as California. How does that work?

SHEPPERD: Yes, this is a national missile defense system. Again, we're the early stages of this. The previous administration slowed down funding of this because it's exorbitantly expensive. This administration continued to put money in at a slow rate. My guess is it will probably be stepped up now.

The whole idea of the national defense -- national missile defense system was to provide a early defense against a rogue nation launching a very few missiles against the United States. It wasn't meant to protect the whole United States, but a rogue mission with few missiles. It was designed for a North Korean scenario, if you will. We've tested it, there have been some failures in the testing.

Again, we'd be lucky to hit a missile right now. And, by the way, North Korea would be lucky to get one here as a result of the last test. The problem is, you can expect them to do more tests to improve their system. And we also need more tests to improve our missile defense system.

WHITFIELD: And, of course, the determination would have to be made, is this a test, is this, you know, a dress rehearsal again or is it the real thing?

SHEPPERD: Yes, not only that, but missile launches can be for all sorts of things. They can be for putting satellites into orbit. And so those assessments are made as you make the assessment of the trajectory of the missile and watch it being a symbol on the pad and what have you. All these are serious decisions. Then you have the ability to decide to either retaliate before, during or after the launch.

WHITFIELD: General Don Shepperd, thanks so much.

SHEPPERD: Pleasure.

(MARKET REPORT)

(COMMERCIAL BREAK)

WHITFIELD: As promised, U.S. President Bush at the White House. He's been meeting with Georgian President Mikhail Saakashvili. It's expected that the president will be saying that North Korea has further isolated itself after those seven test-firings of missiles.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Laura and I will never forget your hospitality. We will never forget the food, for which Georgia is quite famous. We will never forget the fantastic folk-dancing we saw. And then, I'll never forget our visits and the speech to the Georgian people. It was a fantastic trip. It was made fantastic because my friend not only was a good host, but he is a man who shares the same values I share. He believes in the universality of freedom. He believes that democracy is the best way to yield the peace. The Georgian government and the people of Georgia have acted on those beliefs.

I want to thank you for your contribution in Iraq to help the Iraqi people realize the great benefits of democracy. It's hard work, but it's necessary work.

We had a very good discussion about a variety of topics. I shared with the president that Georgia is our friend and that we care deeply about the people of Georgia. It's a remarkable experience that's taken place.

I congratulate the president and his government on creating a economic climate that fosters growth and opportunity. I love the stories about the entrepreneurial spirit that's beginning to flourish.

And one of the interesting stories that captured my imagination is when the president first came into office and he cleaned out the police forces in order to rid the country of corruption in the law enforcement, understanding full well that the people must trust security in order for a society to flourish.

And so, Mr. President, you've got hard work ahead of you. You've tackled the problems with vigor and enthusiasm. But, most importantly, you've stayed true to a philosophy that I admire.

So welcome back to the Oval Office. And please give your good wife all my very best.

MIKHEIL SAAKASHVILI, PRESIDENT OF GEORGIA: I will certainly tell Sandra.

And, Mr. President, it was an incredible honor for me to stand next to you in the Freedom Square in Tbilisi. And I felt like it was, you know, after -- it was vindication for all those Georgians, including my family members who perished in gulag, who died fighting for their freedom, their liberty, their independence.

And basically this was an incredible occasion, because I'm also -- I've studied diplomacy for many years, and I can tell you, it was brilliant exercise of self-diplomacy, the way you appreciated, you know, our culture, our openness, our warmth. And we will certainly never forget it.

Georgia is indeed performing. It is very -- I mean, it has strong economic growth. This is a very beautiful country that attracts a lot of investment now. We have low tax rates, but we dramatically increased our tax collection, which means that low taxes and less government is a very good thing to have, as you well know.

So basically we are getting there. And one thing, you know, we discussed with President Bush, the upcoming G-8 summit. And certainly there are lots of issues that are at stake there, and we believe very strongly in the same values, in the same principles.

And we are talking to the president and to the country which is the -- for Georgians, I mean for generations of Georgians, America and freedom are synonyms. They have been synonyms for me all my life, when I lived under Soviets, and after that, and it still stays very much that way, because all freedom-loving people today, whenever they have something to share with somebody, come to America. And this is a very strong thing.

And one thing I can tell you, Mr. President, your freedom agenda does really work. I mean, you can see it in Georgia. We are seeing it in Iraq. And please stay there till -- please fight there till the end.

We will stay with you there whatever it takes, because your success in Iraq is a success for countries like Georgia; it's a success for every individual that loves freedom, every individual that wants security, to live in a more secure world for himself, herself or their children.

And, you know, whatever it takes to help you -- we are not a big country. We are a beautiful, small country with lots of attractions. I know I invited you to come -- had mountain biking here yesterday night -- invited you to come over and have mountain biking in Georgia.

But one thing is important: that, you know, we really cherish the same things. And I'm so honored to be here on the Independence Day -- and I watched yesterday fireworks -- and around the time of your birthday.

So happy birthday. I'm honored to be invited now.

(LAUGHTER)

And God bless you, America, Georgia and the whole world.

Thank you very much.

BUSH: Mr. President, thank you.

QUESTION: Mr. President, on North Korea, how is it possible to punish a country that is one of the poorest and most isolated in the world? And, secondly, have you been hoping for a stronger response from China?

BUSH: The North Korean government can join the community of nations and prove its lot by acting in concert with those who -- with those of us who believe that she shouldn't possess nuclear weapons and by those of us who believe that there's a positive way forward for the North Korean government and her people.

This is a choice they make. Yesterday, as you know, they fired off a series of rockets. The world, and particularly those of us in the six-party talks, had asked for that not to happen. It's a matter of good faith. The government made a different decision. And so it's their choice to make. What these firing of the rockets have done is they've isolated themselves further. And that's sad for the people of North Korea.

I am deeply concerned about the plight of the people of North Korea. I would hope that the government would agree to verifiably abandon its weapons programs.

I would hope that there would be a better opportunity for that government and its people to move forward. The Chinese have played and will continued to play a very important role in the six- party talks.

It's my view that the best way to solve this problem diplomatically is for there to be more than one nation speaking to North Korea; more than America voicing our opinions.

And therefore, the five of us -- Russia, South Korea, Japan, China and the United States -- spoke with one voice about the rocket launches. And we will work together to continue to remind the leader of North Korea that there is a better way forward for his people.

SAAKASHVILI: Regarding -- I mean, I'm not intervening with the agenda, but one thing I have to tell you, in Georgia, that I just sent over to President Bush the letter that Georgian freedom fighters sent him (INAUDIBLE) years ago. And it never made it to the White House.

It was intercepted by KGB and all the people who wrote it were shot. I'm sure lots of people out there in Korea are writing similar letters today.

And I'm sure that North Korean missiles will never reach the United States, but those letters will eventually, very soon, because that's the part of the freedom agenda that President Bush has and that we strongly believe.

QUESTION: (INAUDIBLE)

(LAUGHTER)

BUSH: Listen, I believe that NATO would benefit with Georgia being a member of NATO and I think Georgia would benefit.

BUSH: And there's a way forward through the membership action plan. And we will work with our partners in NATO to see if we can't make the path a little smoother for Georgia. Georgia has got work to do, and the president understand that. But I'm a believer in the expansion of NATO. I think it's in the world's interest that we expand NATO.

QUESTION: On the North Korean missiles, what have you learned about their intentions or their capabilities? And what threat level do you think they still possess, given that their intercontinental missile failed? BUSH: I spoke with Secretary Rumsfeld yesterday. He called me right after the launch, and he said they had preliminary information that they were going to analyze about the trajectory of the larger rocket.

The other five rockets that were fired, the scuds, were, you know, their performance was pretty predictable. That's kind of a routine weapon that some of these nations have.

I asked him this morning again when I met with him about the information. They're still analyzing, trying to figure out the intention of the North Korean leader as to why he would have fired the rocket and what they were trying to learn from it.

One thing we have learned is that the rocket didn't stay up very long; it tumbled into the sea, which doesn't, frankly, diminish my desire to solve this problem.

So the first part of your question is: We're still analyzing what the intentions were. We're trying to analyze the data to determine flight path, for example.

I view this as an opportunity to remind the international community that we must work together to continue to work hard to convince the North Korean leader to give up any weapons programs.

They've agreed to do that in the past. And we will hold them to account. And I also strongly believe that it is much more effective to have more than one nation dealing with North Korea. It's more effective for them to hear from a group of nations rather than one nation.

And so, today, the secretary of state -- starting last night, the secretary of state has been in touch with counterparts. I, of course, will be on the phone as well. We want to send -- to continue to send -- a clear message: that there is a better way forward for the leader of North Korea.

It's hard to understand his intentions. It's hard to understand why he would not only fire one missile that failed but five others. So we're talking with our friends and allies on the subject.

QUESTION: (INAUDIBLE)

BUSH: Freedom -- I believe freedom is universal. And I believe the spread of liberty is important for peace. And, therefore, the freedom agenda will be at the heart of everything I do. The freedom agenda's ingrained in my -- it's not only ingrained in my policy, it's ingrained in my soul. I believe it strongly.

And I believe the United States has an obligation to work with others to help them secure their liberty.

I understand that elections are only the beginning of the freedom agenda, and that there's work needed to be done around the world, and including our own country, to continue to build strong institutions and build the organizations necessary for a civil society to develop.

Remember, ours was a country that wrote a great constitution but enslaved people for 100 years. It takes time. And so I understand that I'm -- and I want to work with our friends and ask -- Georgia's a sovereign government, and when governments say, "Will you help?," America must always listen to requests for help, and specifically to Georgia.

One of the signature pieces of policy in my administration has been the Millennium Challenge Account. It's a foreign funding mechanism that recognizes countries that fight corruption, support rule of law, invest in the health and education of their people, and adopt open markets.

And one of the most robust Millennium Challenge Account projects is with Georgia. It's a sign -- should be a sign -- to the people of Georgia and people in the neighborhood that the United States respects the decisions this government has made and wants to work closely with the people of Georgia to help Georgia succeed, to help create the conditions for success.

And so, to answer your question, yes, I got a lot that comes to my desk here, absolutely. I got a lot to think about.

But my friend, the president, wouldn't be sitting here if I didn't have Georgia on my mind.

(LAUGHTER)

Thank you all very much.

(END VIDEOTAPE)

WHITFIELD: President Bush there while meeting with the Georgian president, Mikheil Saakashvili, there saying that there needs to be more than one nation talking to North Korea, underscoring the need for the six-party talks.

Our Suzanne Malveaux is at the White House. However, Suzanne, the president being very delicate in his language about North Korea.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And Fred, what's most interesting about this is really that he was obviously understated about this potential crisis with North Korea, very much in line with the administration's strategy to play this down, play down the capabilities of the missile launch of North Korea, look, assess, of course. Emphasize the fact that that long-range missile never made it to its target.

Still, some confusion over even the intention of North Korea's leadership. At the same time, play up the allies here, the other members of those six-party talks and their commitment to holding North Korea to account to try to get it to abandon its nuclear ambitions and come back to the six-party talks. The role of Japan, China, of course, still uncertain, Russia still uncertain. So they are emphasizing here, this is diplomacy at work. This is something that they are going push neighbors and allies, essentially, to do that tough negotiations.

Fred, should let you know, however, that critics point to this administration, say, look, it was four years ago this president called out North Korea as a member of the access of evil. Since then, we have seen an increase of their nuclear arsenal, an abandonment of the six-party talks and now these missile launches. That this is simply a failed policy, that that is why the administration is focusing, again, on the allies here.

But this administration says, look, we are not going to be playing into the hands of Kim Jong-Il and make this some sort of standoff between the United States and North Korea.

WHITFIELD: All right, Suzanne Malveaux, not at all melting in the rain there. Get inside! Thanks so much.

More LIVE FROM after this.

(COMMERCIAL BREAK)

WHITFIELD: The House and Senate are holding hearings outside Washington today. The issue, immigration. A House hearing near San Diego is focused on improving border security, the priority of House Republicans. But the Senate is exploring the benefits offered by foreign workers. New York Mayor Michael Bloomberg says sending illegal immigrants back is simply not an option.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG, NEW YORK: Our immigration laws are broken. It is as if we expect Border Patrol agents to do what a century of communism could not: defeat the natural forces of supply and demand, and defeat the natural human instinct for freedom and opportunity. You might as well sit on the beach and tell the tide not to come in.

(END VIDEO CLIP)

WHITFIELD: The immigration debate has divided the House and the Senate and the Republican party itself. But our senior political analyst Bill Schneider reports some of those divisions are beginning to disappear.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): The House of Representatives starts hearings in San Diego, and Senate hearings open in Philadelphia. The House and Senate are far apart on immigration reform. The Senate bill includes a path to citizenship for illegal immigrants.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We need to have the ability for the earned legalization for those individuals that can add and contribute to the United States of America.

SCHNEIDER: The House bill has no provision for what critics call amnesty.

REP. DENNIS HASTERT (R), HOUSE SPEAKER: We want to make sure that there is border enforcement.

SCHNEIDER: Is there a chance for compromise? Yes, for the usual reason: fear. Democrats are making gains on the immigration issue. In April, Democrats were four points ahead of Republicans on immigration. In June, they were 11 points ahead. Democrats are also making threats.

REP. NANCY PELOSI (D), MINORITY: We will be there to say you had the opportunity to protect our borders, and you failed. You had the opportunity to protect American workers, and you failed.

SCHNEIDER: By 10-1, people say they would be disappointed, not pleased, if Congress fails to pass an immigration bill this year. We're beginning to hear the sounds of compromise, senators moving towards the House position.

REP. JOHN BOEHNER (R), MAJORITY LEADER: And it's been interesting to note over the last several days the movement amongst senators to a position closer to where the House is.

SCHNEIDER: And the House is beginning to consider the Senate's position.

UNIDENTIFIED MALE: We're willing to look at other perspectives.

(END VIDEOTAPE)

SCHNEIDER: What are they afraid of? The political consequences of doing nothing -- Fredricka.

WHITFIELD: And Bill, is there a way to know what public opinion is on all this?

SCHNEIDER: Well, there's been some polling. And the most recent polls from the "Los Angeles Times" and Bloomberg asked people do you favor tougher enforcement only -- that's the House version -- or do you favor a comprehensive approach that includes tougher enforcement and a guest worker program? By 58-32, people favored the combined program, including a guest worker program.

But, keep in mind, the people who want the House bill, namely tougher enforcement only, are angry and they're intense. And in politics, intensity matters just as much as numbers.

WHITFIELD: And, Bill, what about the president? Is he showing a willingness to compromise these days?

SCHNEIDER: Well, he met with a Republican congressman from Indiana, Mike Pence, who presented him with a plan. The plan said we'll have border enforcement first; not only, but first. And then once that's certified, then it will trigger comprehensive reform, including a guest worker plan or possibly a path to citizenship. The president's response? He said he found it, quote, "pretty intriguing."

WHITFIELD: That is a change. All right, Bill Schneider, thanks so much.

SCHNEIDER: Sure.

WHITFIELD: The leader of a company, a defendant in court, but what was Ken Lay really like as a friend, as a family man? We'll hear from one of his long-time friends as we mark the life of this beleaguered businessman in the next hour of LIVE FROM.

(COMMERCIAL BREAK)

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