Return to Transcripts main page

CNN Live Today

The New Martha Stewart; Social Insecurity; Legal News

Aired March 04, 2005 - 10:59   ET

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


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


RICK SANCHEZ, CNN ANCHOR: And here we go. In the news right now, we expect a major development this hour in a brutal, brutal triple homicide in rural Virginia. The 2002 murders of 9-year-old Jennifer Short and her parents remain unsolved. Federal prosecutors are expected to announce indictments in this case.
They may be indirect indictments, though. And we'll be explaining all of this to you. We'll let you know as soon as we get the information on this story. It could happen any moment.

Also, let's take you now to Lake City, Florida. That's a giant sinkhole that we've been telling you about. And you know what? It's getting bigger.

The size is threatening a nearby home. Wells in the area are now contaminated by water from a nearby pond that's flowed into the hole. It's a big problem in Florida because of the aquifers that go under the ground there. Residents are being told to boil their drinking water.

Also, in the Robert Blake murder trial jurors could get the case as early as today. The defense will conclude its closing arguments, followed by prosecution rebuttal, as usual. The actors is charged with shooting his wife to death in 2001 after they dined at a restaurant. Blake says he's innocent.

If you think gasoline is expensive right now, as many of you do, just wait. Prices could possibly rise with the mercury. AAA says gas at the pump could hit new records this spring and summer. Market experts now say crude oil prices will hit $60 a barrel.

It now is 11:00 a.m. out on the East Coast, 8:00 a.m. on the West. And from the CNN Center here in Atlanta, I'm Rick Sanchez.

DARYN KAGAN, CNN ANCHOR: Good morning, once again. I'm Daryn Kagan.

Martha Stewart, she walked out of prison today and stepped into her new life. She was whisked from a West Virginia prison to a private jet in a splashy made-for-TV moment there. Gone was the glum, dour Martha of her days on trial. Stewart appeared trim and happy in blue jeans and a poncho. In a statement on here Web site, Stewart says, "Certainly there is no place like home."

And a homebody is what Martha Stewart will be for the next five months. The domestic icon is confined to her snow-covered estate in the horse country north of New York City. Senior correspondent Allan Chernoff is near Stewart's mansion in Bedford, New York.

Good morning.

ALLAN CHERNOFF, CNN FINANCIAL CORRESPONDENT: Good morning, Daryn.

And Martha Stewart, in fact, is getting reacquainted with her home this morning. She was out early this morning actually petting her horses and walking her dogs. She even stopped to chat with photographers.

She mentioned that her cappuccino machine is broken. And said she had missed the idea of cappuccino during her five-month stay in prison. As you mentioned, she will be confined to the home for five months, but she'll be permitted out to do work. And you can expect she'll be doing plenty of that because her company, Martha Stewart Living Omnimedia, has big plans.

(BEGIN VIDEOTAPE)

CHERNOFF (voice-over): Martha Stewart's company is looking to expand where it has never ventured, into the freezer case with frozen foods, into home improvement with cabinets, perhaps windows and doors.

GAEL TOWEY, MARTHA STEWART OMNIMEDIA: I think home improvement is a wonderful direction for us because we really -- Martha has renovated a lot of houses herself, so I think we'll see a lot of activity in this area.

CHERNOFF: The company that turned crafts and food into an art form is hoping for a big expansion, says chief executive Susan Lime.

SUSAN LYNE, CEO, MARTHA STEWART OMNIMEDIA: I believe this is our biggest single asset at this company, is that brand and that brand equity. And we will -- we will build with it.

CHERNOFF: Until now, Martha Stewart has been calling attention to Kmart shoppers, where her line of everyday products are sold. With Kmart buying Sears, there should be new outlets for Stewart. The company's plans, though, are bigger: a homemaker's invasion of china.

But the first brand extension will use the TV archive for how-to videos. Also in the works, delivering content online. Easter basket tips, for example, downloaded to your computer or wireless device.

LYNE: We are doing a lot of -- a lot of thinking, a lot of developing, a lot of exploring of many different options in every area we work in.

CHERNOFF: Martha Stewart will have clout, but she's not returning as an executive of the company. Her most important role, persuade America to once again embrace the marketing of Martha Stewart. She'll host a new version of "The Apprentice," though it won't generate revenue for Martha Stewart Living Omnimedia. The company does plan to profit from its new daytime Martha Stewart lifestyle show to premiere this fall.

The biggest challenge, the company desperately needs to revive its trademark magazine, "Martha Stewart Living." Since 2002, when Stewart's legal problems were just beginning, circulation has dropped 20 percent to an average of 1.9 million last year. Advertising has plummeted nearly 70 percent, down to $72 million last year.

Ad executives predict a rebound. The question is how high.

UNIDENTIFIED MALE: In the short term, any content with Martha Stewart has to be examined as an opportunity. The more worrying thing is whether that opportunity disappears after a very short time.

(END VIDEOTAPE)

CHERNOFF: Five months in prison has done much to rehabilitate Martha Stewart's image, and that's given her company a jump-start. But a full rehab of the company's financials could take a bit longer -- Daryn.

KAGAN: Allan, what about some of the other players that got wrapped up in the story, like Peter Bacanovic and Sam Waksal? Where are they today?

CHERNOFF: They are still in prison. Peter Bacanovic, you'll recall, the former stockbroker for Martha Stewart who also was convicted along with her of obstruction of justice, and also lying about that stock trade, he decided to go ahead and serve his prison term. He made that decision several months after Martha Stewart. Both of them are still appealing their criminal conviction.

Sam Waksal, you'll recall, the former chief executive of ImClone systems, a friend of Martha Stewart's -- and that was the company whose stock Martha Stewart had sold -- Mr. Waksal actually was convicted of stock fraud, and he had a sentence of more than seven years. So he will be in jail for a long time in prison.

KAGAN: Allan Chernoff, live from Bedford, New York. Thank you.

Question for you. How does Martha Stewart stack up with Americans now that her prison days are behind her? Well, it depends on whom you ask.

A little over a third of men say they're sympathetic to Stewart's troubles, but that number jumps to 57 percent among women in the CNN- "USA Today"-Gallup poll. There's a similar pattern when asked whether Stewart was treated unfairly because she's a successful woman. Almost three-quarters of men say no, but four out of five women say yes.

And finally, "Do you want Martha Stewart to succeed as she returns to her business?" Americans are evenly split on this one between "yes" and "I really don't care." Tonight on CNN prime time, "PEOPLE IN THE NEWS" takes an exclusive look at Martha Stewart's as an inmate. There's never- before-seen footage of the domestic icon inside the prison, and interviews with high-profile friends who visited her in prison. You'll see it tonight at 8:00 Eastern.

SANCHEZ: President Bush, as we've been mentioning is in Westfield, New Jersey, at this hour. He's trying to drum up support for overhauling Social Security. Mr. Bush left Washington this morning to kick off a major P.R. blitz by the White House on that issue.

There we see the president speaking. As a matter of fact, let's pick up some of this sound and see what the president is saying about his program.

(INTERRUPTED BY LIVE EVENT)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... if you're getting your check, nothing will change. No matter what the talk is about reform, nothing will change. I don't care what the ads say, I don't care what the scare tactics say, you're going to get your check, just like the government said.

Problem isn't for the seniors, problem is for the youngsters coming up. The question is will you get your check? Will we be able to keep the promise? A lot of people saying well, you know, Mr. President, you're talking about Social Security, it's called the third rail of American politics. That means if you touch it, you get a huge electric shock. Now why you talking about it?

Well, you're going to hear me describe the problem. I think we have a duty in elected office to confront problems and not pass them on to future presidents, future Congresses and future generations.

(APPLAUSE)

I didn't run for office to dodge problems. And I don't the American people -- I don't care what your political party is, I think the American people expect us to all to confront problems and deal with them in a fair, open way. That's what I think.

Now let me tell you why I think we got a problem. And me and Rodney (ph) are part the problem. We're Baby Boomers and we're fixing to retire. As a matter of fact, a lot of us turn 62 in 2008. That's the time you start to retire and there's a whole lot of us. Yet we're living longer. We're living longer than the previous generations of Americans. So you got more people retiring who are living longer, plus we have been promised greater benefits than the previous generation. So we got more people living longer, getting bigger benefits.

And the problem is that the number of people paying into the system is shrinking. You look over here, in the '50s, 16 people were paying into the system to pay for one retiree. So if that person was to get $14,200, they'd be $900 a pair. The system now is 3.3 people paying into the system. In a decade it's going to be two people paying in the system. Now this is a pay-as-you-go system. In other words, it says when you retire, somebody's going to have to pay for your benefits. There's not a savings account.

One of the myths of Social Security is that your money is going in to -- and the government's holding it and saving it for you. That's not the way it works. Your money's going into the system and it's getting spent, some of it on retirement benefits, other parts on just general government. And there's an IOU, a paper IOU, accumulating. But it's not just sitting there. There's not an account with your name that's saying on behalf of you, the government's now got your money. That's not the way it works. So it's a pay-as-you-go. It goes in and goes out.

Now -- let me give you some numbers about the consequences of what we're talking. And this chart says it pretty good. Right now there are more people paying in -- the money coming in on payroll taxes is greater than the money going out. And that's the black part of chart. But very soon, in a very quick period of time, as a matter of fact, in 2018, the money going out exceeds the money coming in in Social Security. In other words, Baby Boomers like me, who will be living longer and have been promised greater benefits, are going to start saying send me my check.

SANCHEZ: The president finishing what is a very important speech for him. It's one of many that he's going to be giving all over the country. This one happens to be taking place in New Jersey. The president pushing his plan for partial privatization of Social Security.

Democrats, of course, many of them disagree vehemently with him. For example, Senate Minority Leader Harry Reid, is quoted as saying, "Privatization will not help the stability of Social Security."

So you may ask, what do the American people think about this? We have a report on that as well. In fact, our senior political analyst, Bill Schneider, reports that this plan, according to some of the polls, could end up being a tough sell.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): In February, President Bush began his big push for changes in Social Security. So what happened? The public pushed back, according to the latest CNN-"USA Today"-Gallup poll.

In early February, just after he spelled out his ideas in his State of the Union speech, 43 percent of the public approved of the way President Bush was handling Social Security. Now only 35 percent approve. A majority disapprove. The president is losing ground.

Republicans argue Social Security has to be rescued from an impending crisis.

SEN. JOHN SUNUNU (R), NEW HAMPSHIRE: What we need to do is put together a plan that gets us to a strong, sustainable, solvent Social Security system.

SCHNEIDER: But the sense of urgency has actually diminished. In January, nearly half the public thought the government should make major changes in Social Security in the next year or two. That number has dropped to 38 percent. The number who say no major changes are needed within the next 10 years has been going up.

Democrats think they understand what people want and Republicans don't.

SEN. JON CORZINE (D), NEW JERSEY: They don't seem to be listening with regard to the desire of the public to maintain guaranteed benefits.

SCHNEIDER: Democrats have not really presented a plan to do that, but the public still trusts Democrats more than Republicans on the issue. Conservatives see the AARP, which claims 35 million members over the age of 50, as a major obstacle to the president's Social Security plans. The AARP has enormous credibility.

Three-quarters of Americans have a favorable opinion of the organization. Even two-thirds of Republicans have a positive view of the AARP. Democrats sound confident, even cocky...

SEN. BARBARA BOXER (D), CALIFORNIA: This privatization plan is sinking like a rock.

SCHNEIDER: While Republicans are sounding nervous about the prospects for change.

SEN. RICK SANTORUM (R), PENNSYLVANIA: The chances of that are probably not as high as I'd like to believe.

SCHNEIDER: Bill Schneider, CNN Los Angeles.

(END VIDEOTAPE)

KAGAN: It is Martha Stewart's first day of relative freedom. She's enjoying it by spending some time outdoors. What was it really like for her behind bars? We have exclusive video of her time in prison.

SANCHEZ: And while Martha Stewart's legal problems are easing, Michael Jackson's are being aired. We're going to have a live report from L.A. on his case, and a look at the Robert Blake murder trial as well.

KAGAN: And chimpanzees -- chimpanzees -- I don't know why I'm having a problem with that word today -- chimps can be dangerous. Something triggered an attack in southern California. The story coming up.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

KAGAN: Live pictures from Santa Maria, California. If you looked quickly, you saw Michael Jackson walking into the courtroom.

His child molestation case continues. It's possible his accuser, the 15-year-old former cancer patient, will appear on the witness stand today.

Lots of celebrity news in legal news today. That's when we call Harvey Levin, executive producer of "Celebrity Justice," joining us from southern California.

Hi, Harvey.

HARVEY LEVIN, PRODUCER, "CELEBRITY JUSTICE": Hey, Daryn.

KAGAN: Let's start with Michael Jackson. Does this case -- does it or does not hinge on the credibility of the 15-year-old accuser?

LEVIN: I mean, it has to. The -- this is the boy who is alleging it, and there really isn't a lot of physical evidence in this case. This is a credibility call.

I think the two people who are most important, frankly, are the boy and his mother. And I know that the defense is going to make the mother really the centerpiece of this case, saying that she was pulling the strings, getting her kids to lie. That's their position. So those are the two star witnesses.

KAGAN: I'll move on to another southern California courtroom. Robert Blake, this murder trial getting ready to go to the jury. This one is not an open and shut case against the actor.

LEVIN: You know, Daryn, I don't think so. I mean, the theory of the prosecutor is, on the one hand, that he solicited stuntmen to kill his wife. On the other hand, they're indicating that he's the trigger man. And they don't really have a link between him and the gun.

There are no eyewitnesses in this case. And I have to tell you, I would not be surprised if Robert Blake walks out of that courtroom a free man. I don't know if it's going to happen. It wouldn't surprise me.

KAGAN: All right. We'll be covering that.

And then, finally, it's all about Martha Stewart today. Is the hot word in Hollywood you want to do prison time because it makes you a hot commodity?

LEVIN: Well, you know what? We talked about this. You and I talked about this right when she went in.

And I was listening to everybody say this is the end of Martha Stewart, what a terrible day. And I'm thinking, wow, what a great opportunity for a television producer to step in there. Mark Burnett did it, and I really think Martha Stewart is going to soar in her popularity. I think it's going to be an amazing star turn for her. And, I guess, you know, maybe she will recommend prison. It's certainly working for her.

KAGAN: Well, people like to tear down people on top, but they also like to build you back up.

LEVIN: Absolutely. Absolutely.

KAGAN: We'll be tracking. Harvey Levin from "Celebrity Justice." Harvey, thank you. Always good to have you.

LEVIN: Good talking to you, Daryn.

SANCHEZ: Well, she's out now, but a question a lot of people would ask is what it was actually like when she was inside that prison.

KAGAN: It could not have been fun.

SANCHEZ: We're going to have an inside look at her five-month stay in "Camp Cupcake." That's coming up.

KAGAN: And allegations of parents abusing, raping and pimping their own children. That story's ahead as well.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

KAGAN: It is Friday, March 4. I have to say happy birthday to my dad.

SANCHEZ: Hey, dad, Happy Birthday!

KAGAN: Yes. I'm Daryn Kagan.

SANCHEZ: Mr. Kagan, I'm Mr. Sanchez. And here's what's happening in the news right now.

President Bush is speaking this hour in New Jersey, as we've been showing you throughout the last hour, cutting in from time to time. His focus is health care, but he's also talking an awful lot about other things, like Social Security and the current tense situation in the Middle East, demanding Syria's complete withdrawal from Lebanon. Here, in fact, is the president just moments ago.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is a democracy. Lebanon is a democracy, and we strongly support that democracy. I was pleased that Crown Prince Abdullah of Saudi Arabia sent the very same message. The world is beginning to speak with one voice. We want that democracy in Lebanon to succeed. And we know it cannot succeed so long as she is occupied by a foreign power.

And that power is Syria. There's no half-measures involved. When the United States and France and others say...

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired March 4, 2005 - 10:59   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICK SANCHEZ, CNN ANCHOR: And here we go. In the news right now, we expect a major development this hour in a brutal, brutal triple homicide in rural Virginia. The 2002 murders of 9-year-old Jennifer Short and her parents remain unsolved. Federal prosecutors are expected to announce indictments in this case.
They may be indirect indictments, though. And we'll be explaining all of this to you. We'll let you know as soon as we get the information on this story. It could happen any moment.

Also, let's take you now to Lake City, Florida. That's a giant sinkhole that we've been telling you about. And you know what? It's getting bigger.

The size is threatening a nearby home. Wells in the area are now contaminated by water from a nearby pond that's flowed into the hole. It's a big problem in Florida because of the aquifers that go under the ground there. Residents are being told to boil their drinking water.

Also, in the Robert Blake murder trial jurors could get the case as early as today. The defense will conclude its closing arguments, followed by prosecution rebuttal, as usual. The actors is charged with shooting his wife to death in 2001 after they dined at a restaurant. Blake says he's innocent.

If you think gasoline is expensive right now, as many of you do, just wait. Prices could possibly rise with the mercury. AAA says gas at the pump could hit new records this spring and summer. Market experts now say crude oil prices will hit $60 a barrel.

It now is 11:00 a.m. out on the East Coast, 8:00 a.m. on the West. And from the CNN Center here in Atlanta, I'm Rick Sanchez.

DARYN KAGAN, CNN ANCHOR: Good morning, once again. I'm Daryn Kagan.

Martha Stewart, she walked out of prison today and stepped into her new life. She was whisked from a West Virginia prison to a private jet in a splashy made-for-TV moment there. Gone was the glum, dour Martha of her days on trial. Stewart appeared trim and happy in blue jeans and a poncho. In a statement on here Web site, Stewart says, "Certainly there is no place like home."

And a homebody is what Martha Stewart will be for the next five months. The domestic icon is confined to her snow-covered estate in the horse country north of New York City. Senior correspondent Allan Chernoff is near Stewart's mansion in Bedford, New York.

Good morning.

ALLAN CHERNOFF, CNN FINANCIAL CORRESPONDENT: Good morning, Daryn.

And Martha Stewart, in fact, is getting reacquainted with her home this morning. She was out early this morning actually petting her horses and walking her dogs. She even stopped to chat with photographers.

She mentioned that her cappuccino machine is broken. And said she had missed the idea of cappuccino during her five-month stay in prison. As you mentioned, she will be confined to the home for five months, but she'll be permitted out to do work. And you can expect she'll be doing plenty of that because her company, Martha Stewart Living Omnimedia, has big plans.

(BEGIN VIDEOTAPE)

CHERNOFF (voice-over): Martha Stewart's company is looking to expand where it has never ventured, into the freezer case with frozen foods, into home improvement with cabinets, perhaps windows and doors.

GAEL TOWEY, MARTHA STEWART OMNIMEDIA: I think home improvement is a wonderful direction for us because we really -- Martha has renovated a lot of houses herself, so I think we'll see a lot of activity in this area.

CHERNOFF: The company that turned crafts and food into an art form is hoping for a big expansion, says chief executive Susan Lime.

SUSAN LYNE, CEO, MARTHA STEWART OMNIMEDIA: I believe this is our biggest single asset at this company, is that brand and that brand equity. And we will -- we will build with it.

CHERNOFF: Until now, Martha Stewart has been calling attention to Kmart shoppers, where her line of everyday products are sold. With Kmart buying Sears, there should be new outlets for Stewart. The company's plans, though, are bigger: a homemaker's invasion of china.

But the first brand extension will use the TV archive for how-to videos. Also in the works, delivering content online. Easter basket tips, for example, downloaded to your computer or wireless device.

LYNE: We are doing a lot of -- a lot of thinking, a lot of developing, a lot of exploring of many different options in every area we work in.

CHERNOFF: Martha Stewart will have clout, but she's not returning as an executive of the company. Her most important role, persuade America to once again embrace the marketing of Martha Stewart. She'll host a new version of "The Apprentice," though it won't generate revenue for Martha Stewart Living Omnimedia. The company does plan to profit from its new daytime Martha Stewart lifestyle show to premiere this fall.

The biggest challenge, the company desperately needs to revive its trademark magazine, "Martha Stewart Living." Since 2002, when Stewart's legal problems were just beginning, circulation has dropped 20 percent to an average of 1.9 million last year. Advertising has plummeted nearly 70 percent, down to $72 million last year.

Ad executives predict a rebound. The question is how high.

UNIDENTIFIED MALE: In the short term, any content with Martha Stewart has to be examined as an opportunity. The more worrying thing is whether that opportunity disappears after a very short time.

(END VIDEOTAPE)

CHERNOFF: Five months in prison has done much to rehabilitate Martha Stewart's image, and that's given her company a jump-start. But a full rehab of the company's financials could take a bit longer -- Daryn.

KAGAN: Allan, what about some of the other players that got wrapped up in the story, like Peter Bacanovic and Sam Waksal? Where are they today?

CHERNOFF: They are still in prison. Peter Bacanovic, you'll recall, the former stockbroker for Martha Stewart who also was convicted along with her of obstruction of justice, and also lying about that stock trade, he decided to go ahead and serve his prison term. He made that decision several months after Martha Stewart. Both of them are still appealing their criminal conviction.

Sam Waksal, you'll recall, the former chief executive of ImClone systems, a friend of Martha Stewart's -- and that was the company whose stock Martha Stewart had sold -- Mr. Waksal actually was convicted of stock fraud, and he had a sentence of more than seven years. So he will be in jail for a long time in prison.

KAGAN: Allan Chernoff, live from Bedford, New York. Thank you.

Question for you. How does Martha Stewart stack up with Americans now that her prison days are behind her? Well, it depends on whom you ask.

A little over a third of men say they're sympathetic to Stewart's troubles, but that number jumps to 57 percent among women in the CNN- "USA Today"-Gallup poll. There's a similar pattern when asked whether Stewart was treated unfairly because she's a successful woman. Almost three-quarters of men say no, but four out of five women say yes.

And finally, "Do you want Martha Stewart to succeed as she returns to her business?" Americans are evenly split on this one between "yes" and "I really don't care." Tonight on CNN prime time, "PEOPLE IN THE NEWS" takes an exclusive look at Martha Stewart's as an inmate. There's never- before-seen footage of the domestic icon inside the prison, and interviews with high-profile friends who visited her in prison. You'll see it tonight at 8:00 Eastern.

SANCHEZ: President Bush, as we've been mentioning is in Westfield, New Jersey, at this hour. He's trying to drum up support for overhauling Social Security. Mr. Bush left Washington this morning to kick off a major P.R. blitz by the White House on that issue.

There we see the president speaking. As a matter of fact, let's pick up some of this sound and see what the president is saying about his program.

(INTERRUPTED BY LIVE EVENT)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... if you're getting your check, nothing will change. No matter what the talk is about reform, nothing will change. I don't care what the ads say, I don't care what the scare tactics say, you're going to get your check, just like the government said.

Problem isn't for the seniors, problem is for the youngsters coming up. The question is will you get your check? Will we be able to keep the promise? A lot of people saying well, you know, Mr. President, you're talking about Social Security, it's called the third rail of American politics. That means if you touch it, you get a huge electric shock. Now why you talking about it?

Well, you're going to hear me describe the problem. I think we have a duty in elected office to confront problems and not pass them on to future presidents, future Congresses and future generations.

(APPLAUSE)

I didn't run for office to dodge problems. And I don't the American people -- I don't care what your political party is, I think the American people expect us to all to confront problems and deal with them in a fair, open way. That's what I think.

Now let me tell you why I think we got a problem. And me and Rodney (ph) are part the problem. We're Baby Boomers and we're fixing to retire. As a matter of fact, a lot of us turn 62 in 2008. That's the time you start to retire and there's a whole lot of us. Yet we're living longer. We're living longer than the previous generations of Americans. So you got more people retiring who are living longer, plus we have been promised greater benefits than the previous generation. So we got more people living longer, getting bigger benefits.

And the problem is that the number of people paying into the system is shrinking. You look over here, in the '50s, 16 people were paying into the system to pay for one retiree. So if that person was to get $14,200, they'd be $900 a pair. The system now is 3.3 people paying into the system. In a decade it's going to be two people paying in the system. Now this is a pay-as-you-go system. In other words, it says when you retire, somebody's going to have to pay for your benefits. There's not a savings account.

One of the myths of Social Security is that your money is going in to -- and the government's holding it and saving it for you. That's not the way it works. Your money's going into the system and it's getting spent, some of it on retirement benefits, other parts on just general government. And there's an IOU, a paper IOU, accumulating. But it's not just sitting there. There's not an account with your name that's saying on behalf of you, the government's now got your money. That's not the way it works. So it's a pay-as-you-go. It goes in and goes out.

Now -- let me give you some numbers about the consequences of what we're talking. And this chart says it pretty good. Right now there are more people paying in -- the money coming in on payroll taxes is greater than the money going out. And that's the black part of chart. But very soon, in a very quick period of time, as a matter of fact, in 2018, the money going out exceeds the money coming in in Social Security. In other words, Baby Boomers like me, who will be living longer and have been promised greater benefits, are going to start saying send me my check.

SANCHEZ: The president finishing what is a very important speech for him. It's one of many that he's going to be giving all over the country. This one happens to be taking place in New Jersey. The president pushing his plan for partial privatization of Social Security.

Democrats, of course, many of them disagree vehemently with him. For example, Senate Minority Leader Harry Reid, is quoted as saying, "Privatization will not help the stability of Social Security."

So you may ask, what do the American people think about this? We have a report on that as well. In fact, our senior political analyst, Bill Schneider, reports that this plan, according to some of the polls, could end up being a tough sell.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): In February, President Bush began his big push for changes in Social Security. So what happened? The public pushed back, according to the latest CNN-"USA Today"-Gallup poll.

In early February, just after he spelled out his ideas in his State of the Union speech, 43 percent of the public approved of the way President Bush was handling Social Security. Now only 35 percent approve. A majority disapprove. The president is losing ground.

Republicans argue Social Security has to be rescued from an impending crisis.

SEN. JOHN SUNUNU (R), NEW HAMPSHIRE: What we need to do is put together a plan that gets us to a strong, sustainable, solvent Social Security system.

SCHNEIDER: But the sense of urgency has actually diminished. In January, nearly half the public thought the government should make major changes in Social Security in the next year or two. That number has dropped to 38 percent. The number who say no major changes are needed within the next 10 years has been going up.

Democrats think they understand what people want and Republicans don't.

SEN. JON CORZINE (D), NEW JERSEY: They don't seem to be listening with regard to the desire of the public to maintain guaranteed benefits.

SCHNEIDER: Democrats have not really presented a plan to do that, but the public still trusts Democrats more than Republicans on the issue. Conservatives see the AARP, which claims 35 million members over the age of 50, as a major obstacle to the president's Social Security plans. The AARP has enormous credibility.

Three-quarters of Americans have a favorable opinion of the organization. Even two-thirds of Republicans have a positive view of the AARP. Democrats sound confident, even cocky...

SEN. BARBARA BOXER (D), CALIFORNIA: This privatization plan is sinking like a rock.

SCHNEIDER: While Republicans are sounding nervous about the prospects for change.

SEN. RICK SANTORUM (R), PENNSYLVANIA: The chances of that are probably not as high as I'd like to believe.

SCHNEIDER: Bill Schneider, CNN Los Angeles.

(END VIDEOTAPE)

KAGAN: It is Martha Stewart's first day of relative freedom. She's enjoying it by spending some time outdoors. What was it really like for her behind bars? We have exclusive video of her time in prison.

SANCHEZ: And while Martha Stewart's legal problems are easing, Michael Jackson's are being aired. We're going to have a live report from L.A. on his case, and a look at the Robert Blake murder trial as well.

KAGAN: And chimpanzees -- chimpanzees -- I don't know why I'm having a problem with that word today -- chimps can be dangerous. Something triggered an attack in southern California. The story coming up.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

(COMMERCIAL BREAK)

KAGAN: Live pictures from Santa Maria, California. If you looked quickly, you saw Michael Jackson walking into the courtroom.

His child molestation case continues. It's possible his accuser, the 15-year-old former cancer patient, will appear on the witness stand today.

Lots of celebrity news in legal news today. That's when we call Harvey Levin, executive producer of "Celebrity Justice," joining us from southern California.

Hi, Harvey.

HARVEY LEVIN, PRODUCER, "CELEBRITY JUSTICE": Hey, Daryn.

KAGAN: Let's start with Michael Jackson. Does this case -- does it or does not hinge on the credibility of the 15-year-old accuser?

LEVIN: I mean, it has to. The -- this is the boy who is alleging it, and there really isn't a lot of physical evidence in this case. This is a credibility call.

I think the two people who are most important, frankly, are the boy and his mother. And I know that the defense is going to make the mother really the centerpiece of this case, saying that she was pulling the strings, getting her kids to lie. That's their position. So those are the two star witnesses.

KAGAN: I'll move on to another southern California courtroom. Robert Blake, this murder trial getting ready to go to the jury. This one is not an open and shut case against the actor.

LEVIN: You know, Daryn, I don't think so. I mean, the theory of the prosecutor is, on the one hand, that he solicited stuntmen to kill his wife. On the other hand, they're indicating that he's the trigger man. And they don't really have a link between him and the gun.

There are no eyewitnesses in this case. And I have to tell you, I would not be surprised if Robert Blake walks out of that courtroom a free man. I don't know if it's going to happen. It wouldn't surprise me.

KAGAN: All right. We'll be covering that.

And then, finally, it's all about Martha Stewart today. Is the hot word in Hollywood you want to do prison time because it makes you a hot commodity?

LEVIN: Well, you know what? We talked about this. You and I talked about this right when she went in.

And I was listening to everybody say this is the end of Martha Stewart, what a terrible day. And I'm thinking, wow, what a great opportunity for a television producer to step in there. Mark Burnett did it, and I really think Martha Stewart is going to soar in her popularity. I think it's going to be an amazing star turn for her. And, I guess, you know, maybe she will recommend prison. It's certainly working for her.

KAGAN: Well, people like to tear down people on top, but they also like to build you back up.

LEVIN: Absolutely. Absolutely.

KAGAN: We'll be tracking. Harvey Levin from "Celebrity Justice." Harvey, thank you. Always good to have you.

LEVIN: Good talking to you, Daryn.

SANCHEZ: Well, she's out now, but a question a lot of people would ask is what it was actually like when she was inside that prison.

KAGAN: It could not have been fun.

SANCHEZ: We're going to have an inside look at her five-month stay in "Camp Cupcake." That's coming up.

KAGAN: And allegations of parents abusing, raping and pimping their own children. That story's ahead as well.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

KAGAN: It is Friday, March 4. I have to say happy birthday to my dad.

SANCHEZ: Hey, dad, Happy Birthday!

KAGAN: Yes. I'm Daryn Kagan.

SANCHEZ: Mr. Kagan, I'm Mr. Sanchez. And here's what's happening in the news right now.

President Bush is speaking this hour in New Jersey, as we've been showing you throughout the last hour, cutting in from time to time. His focus is health care, but he's also talking an awful lot about other things, like Social Security and the current tense situation in the Middle East, demanding Syria's complete withdrawal from Lebanon. Here, in fact, is the president just moments ago.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is a democracy. Lebanon is a democracy, and we strongly support that democracy. I was pleased that Crown Prince Abdullah of Saudi Arabia sent the very same message. The world is beginning to speak with one voice. We want that democracy in Lebanon to succeed. And we know it cannot succeed so long as she is occupied by a foreign power.

And that power is Syria. There's no half-measures involved. When the United States and France and others say...

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com