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Hurricane Watch Up For Southeastern Florida Coast; Final Version of Iraq's Constitution Agreed Upon; Panel Votes to Close Walter Reed Hospital

Aired August 25, 2005 - 10:00   ET

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

UNIDENTIFIED FEMALE: Powdered sugar and they have a gazillion calories. But, boy, are they good.
SOLEDAD O'BRIEN, CNN ANCHOR: Oh, I like it already.

DARYN KAGAN: If you tie it all in, they taste lake butta.

SOLEDAD O'BRIEN: Mmm.

KAGAN: Yes. You ladies have a great day in New York City.

SOLEDAD O'BRIEN: Thanks, Daryn.

KAGAN: We have a lot to get to. We are the hurricane headquarters here at CNN. Let's start by taking a look at what's happening "Now in the News."

As many as five million people in Southeast Florida are being warned to prepare for the arrival of Katrina, a tropical storm that may reach hurricane strength before landfall. Effects of the storm are already being felt in parts of Florida and it's expected to dump heavy rains over much of the state for several days. Stay tuned to CNN. We are your hurricane headquarters.

A midnight deadline looms in Iraq and there are conflicting reports on what progress, if any, is being made. One lawmaker says the group will not meet before next week to discuss the matter. But some media outlets are reporting that a final version has been completed. We're awaiting further word from Baghdad on the status of the constitution.

Just about a half hour ago a federal panel voted to approve the closure of Walter Reed Army Medical Center in Bethesda, Maryland. That facility has treated many of the nation's war wounded, including troop whose have served in Iraq and Afghanistan. Walter Reed's operations will be moved to the Bethesda Naval Hospital a couple of miles away.

For the third day in a row, U.S. gas prices have fallen but you're probably not going notice it. AAA Motor Club says that today's natural average for unleaded self-serve regular dropped 4/100 of a penny overnight. Prices have dropped about a penny less since Monday's record high.

And good morning to you on this Thursday morning. I'm Daryn Kagan at CNN Center in Atlanta.

Folk in South Florida prepare for the arrival of an unwelcome guests. Tropical storm Katrina is heading for a possible landfall tonight but the storm is already making its presence known. It could strengthen into a hurricane before it hits Florida.

Voluntary evacuations began a couple hours ago in some areas but even residents staying put are taking precautions. Our Susan Candiotti is in Hollywood, Florida, with the story.

Already bundled up in her rain gear ready to go. We like to see that. Susan, good morning.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Good morning, Daryn.

Although the hood's down now because we have escaped the latest feeder ban from the outer edges of the storm that we felt a little while ago and now it's subsided. Again, balmy, overcast. It's going to be raining off and on throughout the day as the storm gets closer and closer.

And this boardwalk is normally a busy place with people strolling up and down, riding their bicycles. We've seen some of that today but, for example, that outdoor cafe not getting much business, not surprising of this day. Not weather conducive to sitting out and having a cup of coffee, as an example.

People are out and about, for example, at gas stations, filling up, topping off their tanks, just in case there is a power outage, to make sure they have enough fuel for their car for quite some time. Also filling up the propane tanks, again, in case there is a power loss. And people are also going out to the stores to buy essential items that they might not have already had, although they should have because we are in the heart of hurricane season now, making sure people have enough bottled water, batteries, flashlights, peanut butter and jelly, you name it.

Now, authorities are trying to prepare people as best they can, reminding them not to take chances and go out once the storm gets closer and closer, to take extra care if they have to venture outside.

(BEGIN VIDEO CLIP)

SHERIFF KEN JENNE, BROWARD COUNTY, FLORIDA: If you have to go out because of an emergency, we're going to ask you to be extremely, extremely careful. You know South Florida, you know Broward County and you know that certain streets are going to be flooded. If your car stalls out, that means that you could be there for a very, very long time.

(END VIDEO CLIP)

CANDIOTTI: They're also reminding people that once the storm passes, be careful of standing water. It could be filled with and contaminate with bacteria, broken glass, even hidden power lines. There have been tragedies in the past with people not being aware of that and being electrocuted.

Daryn.

KAGAN: Susan, Katrina is showing up in a season where you already have made great use of your rain gear. This is a very soggy summer for Florida.

CANDIOTTI: They're expecting a lot of rain. Anywhere from six to up to 20 inches at maximum. So, at the very least, there's going to be street flooding. You can be sure of that. Hopefully not too much wind damage. But again, too early to say.

KAGAN: All right. We have you out there. Hopefully someone as light as you will be holding on to a big pole. Thank you, Susan.

Let's check and see what the radar and what story that's telling Chad Myers, who's in our weather center with more on that.

Hey, Chad.

(WEATHER REPORT)

KAGAN: Topping the latest developments from Iraq. Muslim Cleric Muqtada al-Sadr is calling for calm after five people were killed and 10 wounded in internal sectarian violence. Followers of al-Sadr clashed with supporters of another Shiite leader in Najaf. Fighting broke out after al-Sadr's office was opened near the Imam Ali masque.

Time is rung out for agreement on the Iraq's draft constitution. A final agreement on the draft has been reached but a short time ago it was announced that the national assembly would not meet today to discuss it. Iraqis are scheduled to vote on the new constitution on October 15th.

And there will be more U.S. force in Iraq to provide security for that vote. The Pentagon announcing yesterday that 1,500 additional troop will be deployed. The troops are from two battalions of the 82nd airborne division.

And for more on what's happening in Iraq, let's go ahead and check in with Aneesh Raman who's live in Baghdad.

ANEESH RAMAN, CNN CORRESPONDENT: Daryn, good morning.

Another day perhaps of political confusion that is coming to define Iraqi politics. The national assembly not meeting today. But, we're told, the deadline for compromise still very much in place. Meetings are adjourning and a draft constitution is all but complete.

It remains unclear, Daryn, though, if the Sunnis are on board. All indications are that they will not be on board with the constitution that we expect to include reference to federalism, to autonomous regional governments. That raises a very real concern that this draft constitution could be rejected by the Iraqi public in a referendum to calm this fall. You need two-thirds vote in three provinces. The Sunnis have that. So what we expect starting tomorrow is a very fierce public debate to begin as both of these sides, the Shia/Kurd coalition and the Sunnis, engage the Iraqi public in a debate about federalism. Whether it is something that should be part of the new Iraq. But again, no meeting set today for the national assembly.

They weren't required to vote on this document by their self- imposed deadline. They essentially had the political option to do that or not. It seems they've chosen not to vote. Instead, to allow this deadline to pass and the drafting of this constitution to be complete.

Daryn.

KAGAN: Aneesh Raman live in Baghdad. We'll have more from you in the next hour. Thank you.

The U.S. Army and Navy posts have heard their fate. Today, the military base closing commission turned its attention to the Air Force, to those bases and to those support services. Our David Ensor is at the Pentagon with word of one big name now slated to close.

David, good morning.

DAVID ENSOR, CNN CORRESPONDENT: Good morning, Daryn.

Well as you say, it's the end of an era here in Washington, D.C. where the commission voted a few minutes ago to close the venerable Walter Reed Army Hospital. This is a facility that has been a key part of the medical care for soldiers coming back from Iraq and Afghanistan. But the commission decided it was time to move much of the care that's been given by that facility to the Bethesda Naval Hospital and to downsize in the process.

This is a hospital that was built in 1909. About 5,630 personnel are affected by this move. It is the Army's largest health care facility and it is the hub of the regional medical command for the Northeastern United States. Here is the chairman of the base closing commission talking about the move.

(BEGIN VIDEO CLIP)

ANTHONY PRINCIPI, BRAC CHAIRMAN: I strongly support this proposal. You know, the kids coming back from Iraq and Afghanistan, all of them in harm's way, deserve to come back to 21st century medical care. The care that's being provided at Walter Reed is extraordinary. It's not just bricks and mortar, it's the people who bring those facilities to life and I think we can be very proud of the care that these young men and women are getting at Walter Read. But the facility, as Secretary Skinner said, is old. It needs to be modernized.

(END VIDEO CLIP)

ENSOR: So it will be closed and new facilities will be built at Bethesda Naval Hospital and also in a nearby Virginia base, replacing Walter Reed. You've seen those pictures on television, Daryn, over the last few months since the war of young men being fitted with advanced prosthetic devices, new arms, new legs. Most of that was at Walter Reed.

KAGAN: All right. We will be tracking the committee as it continues to meet. David Ensor at the Pentagon, thank you.

That list of recommended military base closures has several communities concerned for their economic future. Thousands of jobs, millions of dollars are at stake. But closing the local base doesn't always mean hard times. Case in point, let's look at what happened in San Antonio. Hear now, the facts.

San Antonio's Kelly Air Force Base was selected for closure in 1995. That meant the loss of about 20,000 jobs. And a dent of as much as $2.5 billion in the local economy.

As soon as the decision was final, though, local officials started drawing up plans to re-purpose the facilities. Kelly Air Force Base became Kelly USA, a military industrial complex that has about 60 tenants and employs about 13,000 people in the community. Boeing is the largest tenant. Ironically servicing planes for the U.S. Air Force.

In fact, San Antonio has become a hub for private defense contractors. And with the war going on, business is good. Last year, local contractors won about $2.5 billion in contracts from defense- related agencies.

Cindy Sheehan and President Bush both now back in Crawford, Texas. Both sticking to their message. Will the two ever see eye to eye? We'll take you live to Crawford coming up.

Plus, horrifying details from survivors of a Peru plane crash. Hear from one of the youngest survivors.

And are high gas prices forcing some folks off the road? Find out how one family man has turned that into a good thing.

(COMMERCIAL BREAK)

KAGAN: The woman who launched an anti-war vigil outside of President Bush's ranch is back at that camp. Cindy Sheehan took a week off so she could be with her ailing mother in California. Sheehan will soon have some company in Crawford, but they won't share her views. Here now is CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT, (voice over): The cheering and jeering says it all. Cindy Sheehan left Crawford last week as the central figure in the protests that have taken over Crawford, Texas. She returned, part hero, part villain. After a six-day absence because of her mother's illness, Sheehan says she's back to accomplish her mission, meet with President Bush and demand that American troops be brought home. CINDY SHEEHAN, WAR PROTESTER: This is where I belong. So for until August 31st like I told the president.

LAVANDERA: The friction in Crawford is sizzling. President Bush supporters have set up competing camps. They line the country road leading to the president's ranch reminding Sheehan as she drove by, this is Bush country.

For several days, Cindy Sheehan's protest sites were quiet but her return has re-energized fellow anti-war activists. Under the big tent, supporters put up a banner-size painting of Sheehan's son. And for a moment, politics and protests seemed to vanish. This was about a mother grieving the loss of her son.

Sheehan has only met a few of the people who have camped here for days to support her cause. Some take her picture, others try to make her laugh.

UNIDENTIFIED MALE: You know what this is here? This is the Jedi camp because if that ain't the evil empire, I don't know what is.

LAVANDERA: The debate has escalated, each side seeing the other as evil and anti-American.

CROWD: Shame on Cindy. Shame on Cindy.

LAVANDERA: Supporters of President Bush are caravanning from California to Texas. They clashed with anti-war protesters along the way in Phoenix Wednesday. They're coming to Crawford because they say Cindy Sheehan does not speak for them.

UNIDENTIFIED MALE: It's outrageous that a mother would protest her son's death like she is doing. She's completely off base.

(END VIDEOTAPE)

LAVANDERA: :Now those pro-Bush supporters are making their way from California to Texas. They're expected to be here by this weekend. And Cindy Sheehan is also expected she only spoke briefly yesterday when she arrived back here in Crawford, but she's expected to talk here publicly at length in about an hour and a half or so.

Daryn.

KAGAN: Ed Lavandera live from Texas.

Ed, thank you.

President Bush is back in Crawford after a three-day trip. The president indirectly responded to Cindy Sheehan in speeches rallying support for the war. Our Dana Bash covered Mr. Bush's visit to Nampa, Idaho.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT, (voice over): Knowing full well the anti-war movement is gaining attention with the leadership of one military mother, the president introduced the country to another.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And here in Idaho, a mom named Tammy Pruett . . .

BASH: Tammy's husband and one son are just back from Iraq. Four other sons are still serving. The White House invited the Pruetts and choreographed this moment with a family CNN first profiled more than a year ago. The president's goal, show support among military families, appeal to patriotism.

BUSH: America lives in freedom because of families like the Pruetts.

BASH: Setting aside past concerns about privacy or looking too political, the White House led reporters to Tammy Pruett. She said this of Cindy Sheehan.

TAMMY PRUETT, MOTHER OF U.S. SOLDIERS IN IRAQ: And this is the way that she's chosen to mourn. It wouldn't be the way that we would do it. But we respect her right.

BASH: In an arena packed with nearly 10,000 servicemen and families, the president once again took on critics demanding to pull out of Iraq now and said retreat would embolden the terrorists.

BUSH: So long as I'm the president, we will stay, we will fight, and we will win the war on terror.

BASH: The president's challenge goes well beyond the anti-war protesters following him around the country. The latest CNN/"USA Today"/Gallup Poll shows an all-time high, 57 percent of Americans feel less safe because of the war in Iraq.

BUSH: We could hunker down, retreating behind a false sense of security, or we could bring a war to the terrorists, striking them before they could kill more of our people.

BASH: Following the speech, Mr. Bush met privately with families of 19 troops killed in Iraq and Afghanistan. Among them was Dawn Raow (ph), whose husband was killed in Iraq nearly a year ago.

DAWN RAOW: I think my husband would want to say thank you very much, sir, for the opportunity to serve your country.

BASH: A Bush supporter, this was her second meeting with him, something denied Cindy Sheehan. Raow says the Idaho governor invited her because her husband was born here.

The large and supportive crowd here was reminiscent of the Bush re-election campaign. Perhaps appropriate as he finds himself in an urgent fight to stop sliding support for the war and his performance as president.

Dana Bash, CNN, Nampa, Idaho.

(END VIDEOTAPE) KAGAN: So are you looking to fix up your home or make a major purchase? If you're not sure where you should get the cash, it might be right in your own back yard. Coming up, we've got some tips to help you get that extra money you might need.

(COMMERCIAL BREAK)

KAGAN: Let's go ahead and check the markets. They've been open 54 minutes. Things kind of holding steady. Oil prices backing off their highs. And the Dow up just a little bit. Up three points. The Nasdaq also up a couple of points.

For most of us, our homes are our biggest investment. So that means they can also be a great source of emergency money. But there are some things to be aware of before you resort to a home loan to tap into its equity. Filling in for vacationing Gerri Willis is "Money" Magazine's Assistant Managing Editor Ellen Stark.

Ellen, hello.

ELLEN STARK, ASST. MANAGING EDITOR, "MONEY" MAGAZINE: Hi.

KAGAN: Let's talk about being responsible here . . .

STARK: Right.

KAGAN: With these home equity loans. When you're paying back, you've got to pay back kind of a nice chunk every month.

STARK: Well, it's a good idea to pay more than the minimum. If you have a home equity line of credit, your minimum payments are really low because in the first 10 years or so you're only paying interest. So that you don't end up in 10 years still having the same size loan you had in the beginning, put a little bit extra toward it every month.

KAGAN: Look at that, a fixed home equity loan. That might be a better idea.

STARK: Well it may be depending on how long it's going to take you to pay down the debt because interest rates have been rising and home equity lines of credit are generally variable and tied to the prime rate which has been going up. So nowadays you can get a fixed rate home equity loan, which has a fixed term, and for just about a quarter point more then the line of credit. And if you have a big project that's going to take you many years to pay off, it might be a good idea to lock in that interest rate now.

KAGAN: This next tip is true with all loans. Look at the fees before you borrow.

STARK: Right. Well, what's happening with home equity lines, because borrowers like to jump around so much to get teaser rates and a better deal, lenders have been putting early termination fees on their loans. More than half have them. So, I mean, you may want to be fine with accepting it because you may feel you can stay with that line. But know what you're getting into beforehand.

KAGAN: Don't borrow more than 80 percent of the home's value.

STARK: Yes, Well that's because a lot of people have been borrowing the full amount of equity they have with the assumption that their home value is just going to keep going up and that there's nothing dangerous about that. But let's say there's even a small dip where you live, maybe 5 percent, 10 percent, and you have to sell and you have to pay a broker's commission and other fees, you could end up owing more than what you get in the sale.

KAGAN: And then use the home equity loan only for important purposes.

STARK: Right. It's a good idea to use it for something with lasting value, like a renovation to your home is perfect because you're adding value to that very thing behind the loan. And a college education is also something that is worth considering. But you don't want to use it for just like a spending spree and vacations and buying things for yourself because then if you run into spending problems and you can't pay your loan, you're putting your house at risk for something that has no tangible lasting value.

KAGAN: How about for filling up your gas tank if you're . . .

STARK: Well, you may need to nowadays.

KAGAN: Coming to that, yeah.

STARK: Right.

KAGAN: Ellen, thank you.

STARK: Thanks.

KAGAN: Ellen Stark from "Money" magazine.

Well, speaking of gas prices, they are changing and so are people's lifestyles. From the car to the bike, how this father's taking it all in stride.

Plus this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: At least I came through it. And if this present gave me like a lot of bravery now, a lot, to me like to worship actually to God.

(END VIDEO CLIP)

KAGAN: Even the youngest survivors recognize how lucky they are. Hear the horrifying details from those who walked away from a deadly plane crash in Peru.

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