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Patriot Act Extended for Six Months; New Yorkers Deal with Transit Strike for Third Day

Aired December 22, 2005 - 08:00   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. I'm Soledad O'Brien.
Commuter chaos day three -- seven million New Yorkers are hoping for an end to the transit strike.

We're live on the strike watch this morning.

RICK SANCHEZ, CNN CORRESPONDENT: I'm Rick Sanchez in for Miles O'Brien.

Katrina wiped out their homes. Not acute accusations that some evacuees are being denied housing because of their race. It's a disturbing story. It's ahead.

O'BRIEN: And you might think it's a little bit too early to talk about income tax, but what you do now could save you a bundle come April. We've got some tax tips just ahead on this AMERICAN MORNING.

Welcome, everybody.

Good morning.

As we've mentioned, day three of the transit strike. And, actually, I thought day two was worse than day one. I thought there was more gridlock in the streets and people's tempers much shorter than I saw the day before. And things were a bigger mess, if you ask me.

SANCHEZ: And I think a lot of New Yorkers want to know is there any hope on the horizon? Is this thing coming to an end? Are they talking? Are they not talking?

O'BRIEN: Let's right to that, then.

It's day three and, of course, we're looking for a break. The city turned up the heat on the union. They're going to take them to court later this morning, in fact. We're expecting that at 11:00 this morning. And we know that a mediator has been talking to both sides this morning. They're in the same hotel. But both sides have not been talking to each other.

We've been watching for any movement on this story.

Let's get right to Allan Chernoff.

He is at the Brooklyn Bridge, which is one of the ways you get into Manhattan -- hey, Allan, good morning.

ALLAN CHERNOFF, CNN CORRESPONDENT: Good morning to you, Soledad.

And this is where a lot of the intrepid New Yorkers are walking past. You can see a few people gradually moving. And some of these folks have been walking for some time from central Brooklyn all the way over here and then back over the bridge.

We've also got the cars lined up here. Some of the vehicles here have the necessary four occupants, but others are looking to pick up riders along Adams Street, which is the main thoroughfare that goes toward the Brooklyn Bridge.

People certainly hoping that there is some development here between the two sides.

But as you said, overnight, just talks separately with a state mediator. And the idea here is that the mediator would try to bring the two sides back together. Or, if he can't do that, then perhaps call for an impasse. And that would send this into arbitration, although the union has said it's not willing to go to arbitration.

But let's talk with one New Yorker who already has been walking quite a while.

Steven O'Donnell (ph), good morning to you.

STEVEN O'DONNELL: Yes, how are you doing?

CHERNOFF: OK.

O'DONNELL: Good morning to you.

CHERNOFF: Now, how long have you been walking, Steven?

O'DONNELL: About 45 minutes from like Eighth Avenue and 8th Street.

CHERNOFF: Forty-five minutes? Not all that cold this morning compared to yesterday.

Did you walk yesterday, also?

O'DONNELL: No, actually, I rode. I just lost all my riding companions. They decided to stay home. So I got lucky, found a parking spot and I said well, I'll just walk.

CHERNOFF: Have you had enough of this strike already?

O'DONNELL: Yes, I think enough is enough. I mean I think the point was made and I think they should just get back to work.

CHERNOFF: OK. I think just about all New Yorkers agree with that. Certainly people getting a little bit tired of this strike. And, Soledad, let's see if today perhaps we can have some type of breakthrough here -- back to you. O'BRIEN: Well, you know, you've got seven million people with their fingers crossed, hoping for that, too.

Allan Chernoff for us this morning.

Thanks, Allan.

We'll check back in with you.

Other stories making news.

Kelly Wallace has that -- good morning.

KELLY WALLACE, CNN CORRESPONDENT: Good morning, Soledad.

And hello, everyone.

Well, if you are airport bound, you'd better be prepared for some changes when you get to the security line. That's because new screening procedures take effect today. You'll be able to carry the once banned small scissors with you on the plane, plus some small tools. But there will be more random searches and the patdown procedures will be more thorough. Officials are hoping the changes will give screeners more time to look for explosives, which, of course, can be a bigger threat.

In Iraq now, more drama and name calling today at the trial of Saddam Hussein. The former Iraqi leader says: "The White House lies once more." That coming after the White House denied his complaint -- claims, excuse me -- that he and other defendants have been beaten and tortured while in American custody. He added: "The Bush administration also lied when it claimed Iraq had weapons of mass destruction."

A disturbing development to tell you about coming out of Vietnam involving bird flu. Two people have died after becoming resistant to the drug Tamiflu. Tamiflu is considered key in the event of any large scale outbreak. The deaths suggest the doses believed to be sufficient to fight the flu just may not be enough.

And in New Orleans now, two police officers have been fired for an arrest in the French Quarter, all caught on videotape. And you probably remember seeing this video -- 64-year-old Robert Davis being beaten by officers. That incident taking place back in October. Police said Davis was drunk. He has denied that.

The two fired officers and a third were charged with battery in the incident and are now awaiting trial. The officers are white. Davis is black. And a federal civil rights investigation has been launched into that incident.

That gets you caught up.

Now back over to Rick.

SANCHEZ: All right, thanks a lot, Kelly. A flurry of activity on the floor of the Senate late last night leading to a budget bill. The senators agreed to extend the Patriot Act for another six months. Parts of it would have explored at the end of the year.

Vice President Dick Cheney cast the tie breaking vote on $40 billion worth of spending cuts and Democrats were successfully able to fight off drilling in the Arctic National Wildlife Refuge, something that was attached to a defense bill.

Jennifer Duffy from the "Cook Political Report" is joining us now from Capitol Hill.

Jennifer, what happens to the Patriot Act now?

JENNIFER DUFFY, "COOK POLITICAL REPORT": Well, the Patriot Act was supposed to expire at the end of this year. The Senate reached a compromise late last night to extend it for six months to work out some of the details.

The House now has to agree to that, which they may do this morning when they're meeting in pro forma session. It will give them six more months to work out their problems with the civil liberties issues and then try and pass it in about June.

SANCHEZ: There was a pretty substantial victory for Democrats, wouldn't you say, being able to block the idea of drilling in Alaska, something that was attached to a defense bill.

How significant is this?

DUFFY: This is a very big defeat for Senator Stevens of Alaska. He's worked on this issue for more than 20 years. This is as close as he's ever come to getting it through. Democrats were successful at stopping the bill, but they got some help from some moderate Republicans who also oppose drilling in ANWR.

SANCHEZ: There were also some budget cuts that really barely passed, with the final tie breaking vote by Vice President Cheney.

Would this be considered a defeat for the Dems?

DUFFY: Well, I think it's a two-edged sword for the Democrats. One the one hand, they don't want to see these cuts happen. On the other hand, they've been handed a tremendous issue for next year's election.

Meanwhile, Republicans are claiming victory, even though they have made some cuts to social programs, because they feel that they have returned to the principles of the Republican Party as deficit cutters. So they are claiming victory this morning, as well.

SANCHEZ: Do we see a trend here? Do we see a change in the way things have been going in Washington? If you were to sum it up, what would you say? DUFFY: Well, I'd say that unfortunately what we saw in the last 24 hours has been what the Hill has been like in the last year or so -- very partisan, very contentious. And I don't see any end to that in sight.

SANCHEZ: Jennifer Duffy from the "Cook Political Report."

DUFFY: Thanks, Rick.

SANCHEZ: We thank you for being with us -- Soledad.

O'BRIEN: Time to get another look at the weather.

It's seven minutes past the hour and Bonnie has got that -- hey, Bonnie, good morning.

BONNIE SCHNEIDER, ATS METEOROLOGIST: Good morning, Soledad.

(WEATHER REPORT)

SANCHEZ: Still to come, there's a massive manhunt underway. It's taking place in South Florida this morning for an accused serial rapist. He's accused of escaping from jail and is considered armed and dangerous. What police are doing to catch him.

O'BRIEN: Then, former homeland security chief Tom Ridge joins us. It's been just about a year since he left his post. We're going to get his thoughts on the state of homeland security today.

SANCHEZ: Also, make the most of your 2005 tax return. We've got some tips on things that you can do for yourself to save yourself some money come April. That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: The Patriot Act is still breathing for now. Parts of the bill were set to expire next week, but senators extended those provisions for six months.

President Bush has said America would be in danger if the Patriot Act is not renewed.

Former Homeland Security Secretary Tom Ridge is in Washington, D.C. this morning.

It's been nearly a year since he left office.

It's nice to see you, Secretary.

Thanks for talking with us.

TOM RIDGE, FORMER SECRETARY, HOMELAND SECURITY: Soledad, nice to join you again.

Thanks.

O'BRIEN: Or former Secretary.

It's been about a year since we've spoken.

RIDGE: Right.

O'BRIEN: Let's first talk about the Patriot Act.

RIDGE: Sure.

O'BRIEN: We've got a lot of ground to cover this morning. The president says we're more at risk if these 16 provisions are not renewed.

Do you agree with that?

RIDGE: Well, yes, I do. I mean it's proven to be a very effective tool that tore down the wall between law enforcement and intelligence gathering so there would be a lawful sharing of information. It gave great tools to immigration and customs enforcement and the FBI to go after terrorist financing. And I think during the course of the debate there was a legitimate concern again about trading liberty for security.

And I think the Senate did a very wise, and, I think, very appropriate thing when they said look, we've agreed on about 80 or 90 percent of this bill. Those provisions are enacted. They're in law. They're permanent. Let's come back in the next six months and try to work out some of the knotty, thornier provisions on two or three of these items. And I think it's a good way to proceed.

O'BRIEN: You're talking about these revelations, of course, about these secret wiretaps.

Do you think, as some have said, that these revelations have actually made us less safe?

RIDGE: Oh, not at all. I do regret the notion that we should be talking about the mechanism to secure intelligence information in a public forum. I mean think of the irony of the call for public hearings about secret intelligence gathering procedures.

But I do think it's a legitimate concern of all citizens that the notion that we don't trade liberty for security or when we make some kind of adjustment, that there has to be some general understanding of why we're doing it.

And I think it's pretty clear, the president, as commander-in- chief, is entitled when we are combating this Islamic insurgency, one of the theaters of war is the United States. He is committed to doing absolutely everything he can with the plenary of powers he has to make sure he does everything, and the administration does everything they can, on a day in and day out basis, to protect America.

Clearly, that's the motivation. And clearly, given the technical nature of how they gather information, the question is truly legitimate whether or not the Foreign Intelligence Surveillance Act is -- and the requirements there -- can be effectively used when you're gathering virtually thousands and thousands and thousands of bits and pieces of information literally every hour.

So I think, again, a legitimate concern that Americans have, but they need to know that this is a -- we've been a battleground. September 11 reminds us we are a battleground. We are the primary target. And we're just going to have to work these issues out -- liberty, security.

Ben Franklin reminded us back in the 18th century to be careful about giving up liberty for security. And that admonition, all of us, Republicans and Democrats, take very seriously.

O'BRIEN: Yes, I think it's come back home in the last couple of weeks.

RIDGE: Right.

O'BRIEN: Let's talk a little bit about this article in the "Washington Post." It's a riveting article about the Department of Homeland Security. And they quote the man who now has your job, Michael Chertoff, as saying that when he arrived, there was sort of an insufficient focus on the outcome and the mission of DHS. And somebody else is quoted as saying turmoil and a lack of direction in the department.

Do you think these are apt descriptions of the department you left just a year ago?

RIDGE: I looked at that quickly as I drove in to do this interview today and what I'd simply say to those, and even to my successor, clearly there were many, many accomplishments from an extraordinary group, not just within the leadership team, but also the 180,000 people that I worked with for nearly three years. And there were plenty of workarounds. It was a gigantic undertaking from the get go. Nobody claimed we did everything in the two-and-a-half years that needed to be done and nobody claimed that we did everything perfectly.

But there was a substantial change in how we are prepared to protect ourselves and I'm very proud of the work that those people did during the -- my tenure there as secretary.

O'BRIEN: There are some people who would say if you look at DHS after you've left, the first big test, which would be hurricane Katrina -- I mean, you know, a really big test...

RIDGE: Yes.

O'BRIEN: ... could be rated as a failure.

Would you say that today we're safer today with the department?

RIDGE: Oh, clearly.

O'BRIEN: Really? RIDGE: There is absolutely no doubt in my mind that we are far, far safer, far better prepared today than we ever were before. And I think it is an illusion for those, for anyone to take a look at the response to Katrina to say that the good men and women of the department, with a supportive administration, by and large along the way, didn't do rather substantial things in that period of time to make us safer. And I would bet that if you had a closed door session with the people who made decisions before, during and right after Katrina, the whole matrix of decision-making would have been different.

Clearly, there was no coordination among the levels of government. That could have been improved. And there's ways that could have been avoided.

There was a national response plan that was finally put into effect. Many would say it should have been put into effect earlier.

Thad Allen was put in as principle federal officer. Many would have preferred that he had been put in earlier.

So, clearly, there's a lot of finger pointing after Katrina. There are a lot of lessons learned. But I would think anyone should construe that lack of coordination and some of the challenges associated with responding to Katrina is any way indicative of the tremendous work that customs and border protection did, immigrations and custom enforcement did. From the curb to the cockpit, commercial aviation is safer. We began working with our international allies. We had agreements with our friends in Canada and Mexico. Law enforcement is working more closely today. Information sharing with the state and locals is far better than it is before.

Look, that article raised some very serious issues. So be it. You continue to improve the Department of Homeland Security and continue to protect America. But I don't think you should be looking at Katrina and the one issue of preparedness suggests that that somehow reflects the quality work and the significant success that people were able to achieve in that two-and-a-half year period.

O'BRIEN: Tom Ridge is a former homeland security secretary.

It's nice to see you, as always.

RIDGE: Thank you, Soledad.

O'BRIEN: Thanks for talking with us.

RIDGE: Nice being with you, too.

O'BRIEN: Thanks.

RIDGE: Thanks.

O'BRIEN: Rick.

SANCHEZ: Hey, still to come, you'd better think twice about pocketing your holiday bonus. Gerri Willis explains what you can do before the end of the year to make sure you can breeze through the tax season.

Stay with us on AMERICAN MORNING.

(COMMERCIAL BREAK)

SANCHEZ: And we welcome you back.

While the deadline to file your taxes is still three-and-a-half months away, now is the time to get your finances lined up. That's right, before the end of the year.

Here's some help on tax tips now from CNN's personal finance editor, Gerri Willis -- Gerri, how are you?

GERRI WILLIS, CNN CORRESPONDENT: Rick, good to see you.

SANCHEZ: The first thing you say is make sure you don't miss any deductions.

WILLIS: That's right. You know, all tax advice seems to boil down to just one simple idea, and that's cut your -- reduce your taxable income. It's that simple. Deductions are the best way to do it.

Let's talk a little bit about what deductions to think about right now. It's the end of the year. If you typically do some charitable giving, it's the time to think about getting that done before December 31st so you can deduct it next year. And I want to tell you, Rick, there are a couple of special things this year that people should think about.

If you housed Katrina victims for two months or more, you're getting a deduction.

SANCHEZ: Wow!

WILLIS: And if you had losses that were not insured -- and a lot of people did -- after the hurricanes, you can deduct that from your taxes, as well.

One other thing I want to add here. It's important to do all the charitable giving, but you might think about charitable giving as a gift, Rick. I think a lot of people, they think well, this is the typical thing I do every year. But, you know, does Uncle Joe really need a new sweater? Why not make a donation in their name?

And don't forget about retirement. It's important to get all that money in your retirement accounts. You've got to do it by December 31st.

SANCHEZ: Yes, your holiday presents would be working as something that you're also being able yourself off on your taxes.

You know, some -- speaking of presents, you know there are some employers out there that give employees bonuses still.

WILLIS: I've heard of this.

SANCHEZ: Yes. If you were to get one of those, you'd think what you'd want to do is give me the money right now, right? But you say oh, no.

WILLIS: No, no, no, no. Remember, we're trying to cut your taxable income, right?

SANCHEZ: Um-hmm.

WILLIS: So who cares if you get that bonus a week later, next week, or two weeks from now, after the first of the year? Then you pay those taxes a little bit later. It's all about delaying the taxes as much as you can.

One other thing you might want to delay. There is an energy efficient tax break for people this year. If you're putting in some energy efficient windows or doing anything to improve the efficiency of your house in terms of energy, you get a break. But not until you do -- unless you do it next year. So wait for that just a week or two before you buy what you need.

SANCHEZ: You're also talking about selling your losers.

That means get rid of the bad stuff?

WILLIS: Well, OK, not all of us bought Google, OK? So if you bought the bad stock this year, you might as well sell it. Take the loss against your income. Again, you're cutting your income.

SANCHEZ: By taking the loss you'll actually be able to collect later.

Then there's something else, something that I last year had an experience with. It's called AMT. And you're saying avoid AMT at all costs.

Would you tell viewers what that is and how to avoid it?

WILLIS: Sure, alternative minimum tax. This is a very scary thing. It's a second tax system. This is completely separate from the IRS. And under its terms, you pay more than you would pay to the IRS. This is the scary thing. There's not a ton you can do to keep yourself out of AMT. But you should run the calculation before the end of the year, because you may have to save more money.

SANCHEZ: Is there a Web site you can go to to find out what that calculation is or get the information on how to avoid it?

WILLIS: Irs.gov. And you're looking for the tax form 6251. Do the calculation, have your accountant do the calculation. It really hits people who are in high tax states, have a lot of kids, have a lot of deductions. You are the people who are going to get killed by this thing. And my -- I'm sorry that you had to pay that. SANCHEZ: I've got a lot of kids.

Gerri Willis, thanks so much for helping out, CNN's personal finance editor.

Thanks for the tips -- Soledad, who also has a lot of kids, back to you.

O'BRIEN: Yes, thanks for the tips.

Appreciate that.

Still to come this morning, there are some reports that Katrina victims are being denied new homes because they're black. We've got that disturbing report just ahead on AMERICAN MORNING.

Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: He was once called the fastest, richest Texan by "Fortune" magazine.

Well, Ross Perot, known for his personality and his business savvy, made his mark on the country's political landscape, as well.

As part of CNN's 25th anniversary series, "THEN AND NOW," Paula Zahn takes a look at Perot's story and just where he is today.

(BEGIN VIDEO TAPE)

ROSS PEROT: Thank you so much.

When I go to Washington...

PAULA ZAHN, CNN ANCHOR (voice-over): H. Ross Perot, a Texas billionaire with an eye on the bottom line, a nose for shaking up politics and an ear for a catchy phrase.

PEROT: I don't mean subsidized business. I don't mean burping them and diapering them. But I mean let's stop breaking their legs the first thing every morning.

ZAHN: Perot appeared on "LARRY KING LIVE" in 1992 and announced he would run for president if the people wanted him.

PEROT: I will not run as either a Democrat or a Republican because I will not sell out to anybody but to the American people.

ZAHN: Millions responded by signing petitions to get him on the ballot.

(VIDEO CLIP OF PEROT SUPPORTERS)

PEROT: Thank you very much. ZAHN: Perot became the candidate and leader of the Reform Party. Using $57 million of his own money, Perot captured 19 percent of the popular vote in the '92 election.

UNIDENTIFIED MALE: Do you swear to tell the truth...

ZAHN: Nearly a decade after his last run for president in 1996, Perot champions the cause of veterans and POWs, something he's worked on since the Vietnam War.

PEROT: We need to be sure we can protect our men and treat our men in future wars.

ZAHN: Perot received the Eisenhower Award in honor of his work with veterans.

(END VIDEO TAPE)

O'BRIEN: Still to come this morning on AMERICAN MORNING, a man suspected of raping seven women and children has broken out of prison. He's now on the loose. We've got the very latest on what police are doing to try to track him down.

That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: Take a look at our quadruple box. We've been showing you this all morning, and things are actually moving this morning. Maybe people got a clue over yesterday, where we saw so much gridlock it was just impossible to make your way through the city. But it looks, overall, not so bad.

Welcome back, everybody.

Of course, one of our top stories is the New York transit strike. We know there's some movement, but not a whole heck of a lot.

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