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American Morning

State of the Union; West Bank Riots

Aired February 01, 2006 - 06:00   ET

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

MILES O'BRIEN, CNN ANCHOR: Good morning. Welcome to a split edition of AMERICAN MORNING. I'm Miles O'Brien in New York.
SOLEDAD O'BRIEN, CNN ANCHOR: And I'm Soledad O'Brien in Washington, D.C. this morning.

The president begins the sixth year of his presidency with an upbeat message to the nation.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Tonight, the state of our union is strong. And together we will make it stronger.

(END VIDEO CLIP)

S. O'BRIEN: Doesn't really set the tone for what comes next. We've got reaction from both sides of the aisles just ahead.

Very little mention of Hurricane Katrina in the president's speech. So what do people on the Gulf Coast think? We're live in New Orleans this morning.

Anti-war protester Cindy Sheehan missed her chance to watch the president in person. Instead, she spent the night at a police station. We're going to tell you why this morning -- Miles.

M. O'BRIEN: A battle in the West Bank. This time it's Israeli security forces squaring off against Jewish settlers. We're live there with more on this developing story.

And an Iraq War vet gunned down by police in California. It's all caught on camera. An investigation is under way.

S. O'BRIEN: President Bush is back on the road today. He's out selling proposals on alternative energy and healthcare and education. Last night's State of the Union was far less sweeping than what he has said in the past, like lashing out at the axis of evil or overhauling Social Security.

Immediate reaction positive, but the poll, limited only to those who watched the speech, 48 percent say they had a positive, a very positive reaction. Twenty-seven percent said somewhat positive. Twenty-three percent said negative reaction.

Let's get right to Suzanne Malveaux. She's live in Washington this morning at the White House. Good morning -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Soledad.

Of course the president's message was all about trying to convince Americans to stay engaged, whether or not for the economy or the global war on terror. Now the big question of course, Soledad, is whether or not the American people are going to buy it.

S. O'BRIEN: Suzanne, give me a sense, we've talked a little bit about the polls already with a very positive coming in just under 50 percent and then another positive rating at about 25 percent. Overall you'd say great numbers, but of course we're talking about people who watched the speech, which self-selects out people who probably would be supporters of the president anyway.

MALVEAUX: Well certainly that's absolutely right. And one of the things that we saw last night is the president was pushing for, and really very aggressively, his international agenda. He was talking about the need for Americans to back him when it comes on the war and terror, his Iraq policy, also, of course, defending his domestic spy program.

All of this really couched on the umbrella of national security. That is something that the president, at least in the polls show, has the greatest strength and continues to have those kind of strong poll numbers.

On the other issues, however, domestic issues, that is where the president does not perform as well. The president talking about some of those domestic initiatives, but also certainly not as ambitious as last year.

S. O'BRIEN: Suzanne Malveaux for us this morning.

Suzanne, thanks for the update.

Anti-war protester Cindy Sheehan took her own message to the State of the Union. Got her kicked out of the Capitol though. Sheehan was arrested, led away in handcuffs, her wearing an anti-war T-shirt. She had been warned about making any displays before taking her seat in the gallery. Sheehan was asked to cover up the shirt. She refused.

Demonstrators who had been with her outside the White House earlier in the day took up her cause. Sheehan was charged with unlawful conduct and then released -- Miles.

M. O'BRIEN: A wild scene in the West Bank, Israeli security forces pelted with rocks as Jewish settlers stand firm. Take a look at these pictures, it's all unfolding in Amona. That's an illegal settlement. Troops in riot gear swept in after a Supreme Court ruling cleared the way for demolition of the settlers' homes.

CNN's Guy Raz on the scene. He joins us on the line right now. Guy, what are you seeing?

GUY RAZ, CNN INTERNATIONAL CORRESPONDENT: Miles, it's just started to quiet down during the past 45 minutes. According to Israeli police and military spokespeople, some of the fiercest fighting and clashes that they have encountered with Israeli settlers and hard line opponents of the Israeli government's decision to abandon these kinds of outposts.

Now, as you mentioned, this comes as a result of an Israeli court order to demolish nine homes on what the Israeli government considers to be an illegal outpost. They were built, these homes, on Palestinian land.

Now, as I mentioned, the clashes between the settlers and the police were very fierce indeed. At least 50 police were injured and 1 of them is in very serious condition as we speak. Some 100 protesters were also injured.

Miles, clearly this is a major test for the very new interim government now in Israel led by acting Prime Minister Ehud Olmert.

M. O'BRIEN: And I'm sure, Guy, those pictures will resonate all throughout Israel. How many illegal outposts are there like this one?

RAZ: To give you a sense, Miles, this is 1 of 101 outposts that the Israeli government considers illegal. Now, under the U.S.-backed road map for peace, the plan that lays out a path towards a two-state solution, Israel is required to dismantle these outposts. Now that doesn't include the some 121 Jewish settlements scattered across the West Bank.

So to give you a sense of how complicated this will be over the coming months and years, if in fact this continues, you just look at the pictures today, these are only nine homes in one outpost. There are 100 other outposts yet to be dismantled.

M. O'BRIEN: Guy Raz, who is in the midst of all that you see there right now, quite a wild scene in Amona on the West Bank.

Thank you, Guy, we'll be back with you in a little bit as that story unfolds.

Let's get some more headlines in right now.

Carol Costello in the newsroom.

Good morning -- Carol.

CAROL COSTELLO, CNN ANCHOR: Good morning, Miles, and good morning to all of you.

The FBI is now taking a closer look at a videotape that appears to show a California police officer shooting an unarmed man. The incident began when a corvette led the deputy on a high-speed chase. Authorities say the man in the video was a passenger in that car. We're going to show you the pictures now; but we must warn you, they're kind of disturbing.

These clips show the man and the officer talking. You'll see them in a second. There it is. Someone then tells the man to get up. After that, he is shot multiple times. You can see the gun firing there. The man is said to be in good condition this morning. He did suffer wounds to the chest, ribs and leg. The man is an Air Force security officer just home from Iraq.

We were wondering if the trial of Saddam Hussein would pick up again as scheduled today. Well it has, without Saddam Hussein and his defense team. Today's trial got started after a boycott from the defense. Hussein's lawyers said they would not take part in the sessions unless the new chief judge resigned. They claim he's biased against Saddam Hussein.

The two American journalists wounded in Iraq are now back home in the United States and they are getting treatment. ABC News anchor Bob Woodruff and cameraman Doug Vogt left Germany on Tuesday and are now at the National Naval Medical Center in Bethesda, Maryland. A spokeswoman says their chances for total recovery are good, but it will take a long time. Woodruff and Vogt are being treated for head and shrapnel wounds after a roadside bombing in Iraq.

Samuel Alito takes his place on the Supreme Court. The Senate confirmed him 58 to 42. The vote largely along party lines. He was sworn in about an hour later in a private ceremony. Alito replaces retiring Justice Sandra Day O'Connor, often seen as a swing vote on cases involving religion or abortion, and the first woman appointed to the High Court.

United Airlines now emerging from that dark cloud. The airline is getting out of Chapter 11 bankruptcy this morning. The company has cut thousands of jobs and eliminated dozens of daily domestic flights. United's new stock will begin trading on the Nasdaq tomorrow. Andy Serwer will have much more about the new United later on on AMERICAN MORNING.

And you can't stop the music in New Orleans. No, you cannot. That fabulous Jazz Festival that happens every year will indeed take place this year, despite Hurricanes Katrina and Rita. Shell Oil Company has agreed to sponsor this year's event. The lineup will be announced later this month. But ain't no shame in this, New Orleans native Fats Domino will be in that lineup. After all, he's on this year's Jazz Fest posters. The festival begins at the end of April. So book your tickets now -- Miles.

M. O'BRIEN: All right. Thank you very much, Carol.

Let's get a check of the forecast now.

Chad Myers is at the CNN Center.

Chad, good morning.

CHAD MYERS, CNN METEOROLOGIST: Miles, you can bet anybody who is somebody would want to play that party there.

M. O'BRIEN: Yes.

MYERS: What an amazing thing. I just -- when I saw that entire festival area, the fairgrounds be flooded on the Google maps, it's like, wow, how long is that going to take to come back? But obviously they're ready to do it this year.

M. O'BRIEN: Absolutely.

MYERS: And that's really good for them, good for the city.

(WEATHER REPORT)

Soledad, back to you.

S. O'BRIEN: Thanks.

Coming up this morning, President Bush's poll numbers. Low before the State of the Union Address, will last night's speech give him any kind of boost? We'll take a look at that this morning.

Also, the devastation from Hurricane Katrina didn't get much time in the president's speech, just a passing reference that's pretty much at the end. We're going to take a look at how that is playing this morning along the Gulf Coast.

M. O'BRIEN: Plus, the Enron trial is under way, the jury hearing two starkly different pictures of the two men at the top of that failed company. Are they villainous or virtuous?

That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Welcome back, everybody.

We're reporting to you this morning from Washington, D.C. We're at the Cannon House Office Building, and we're talking about the president's State of the Union speech last night. This is the oldest House office building, built in 1908, named in 1962 for the former Speaker of the House, Joseph Cannon. It's a beautiful building, connected to the Capitol through underground tunnels, as well.

It's a great place to talk about the president's message to Congress and to America. Last night, Mr. Bush said he's going to need the cooperation of Congress for America to be a leader in the world. And there was lots of talk about cooperation. Didn't, though, keep the president from taking a little bit of a shot at his critics.

(BEGIN VIDEO CLIP)

BUSH: In the coming year, I will continue to reach out and seek your good advice. Yet there is a difference between responsible criticism that aims for success and defeatism that refuses to acknowledge anything but failure. (END VIDEO CLIP)

"L.A. Times" columnist, CNN political analyst Ron Brownstein is with us this morning.

Nice to see you. Good morning. Nice to see you in person.

RON BROWNSTEIN, CNN POLITICAL ANALYST: Good morning, Soledad, welcome to Washington.

S. O'BRIEN: Thank you. Give me a grade for the speech last night, what do you think?

BROWNSTEIN: I think it was solid, probably a B. It was much more modest in its ambition than many of his earlier State of the Union Addresses.

S. O'BRIEN: Interesting tone, too, I thought.

BROWNSTEIN: Well you know it had a split-level tone. The first half of the speech on foreign policy was the resolute, confident Bush we have seen on other occasions. He was making a sweeping defense of his belief that democratization is the key to long-term security and not changing an inch on Iraq.

But on domestic policy, it was a chastened president. After the failure of Social Security in 2005, he was clearly lowering his sights somewhat and trying to produce an agenda of what one Republican called to me bite-sized legislative accomplishments that they might actually get through Congress and run on this fall. Very telling.

Last year he wanted to remake Social Security. Last night he wanted to restudy it. I mean that was pretty much the trajectory of what we saw.

S. O'BRIEN: Exactly. It was about meetings...

BROWNSTEIN: Yes.

S. O'BRIEN: ... and getting together in a bipartisan way.

Let's talk a little bit about foreign policy, specifically Iraq. It took up half the speech. Here's what he had to say about Iraq, a little piece.

(BEGIN VIDEO CLIP)

BUSH: I am confident in our plan for victory. I am confident in the will of the Iraqi people. I am confident in the skill and spirit of our military fellow citizens. We are in this fight to win. And we are winning.

(END VIDEO CLIP)

S. O'BRIEN: To some degree it's a bit more of this stay the course sort of school that he's been going through. Is that going to be enough for the American people who are watching this?

BROWNSTEIN: Well, I think it's going to be driven by events more than what he said you know. Again, the tone was very interesting on the domestic policy. In some of the areas, like energy, he made efforts to reach out to where Democrats have been, talking about renewables and breaking our -- quote -- "addiction to oil."

But on foreign policy and on security, he was very confident, drawing bright lines of distinction, not only on Iraq, but also on his domestic surveillance program through the National Security Agency, on the Patriot Act. On that whole complex of issues, it was still the resolute Bush, I'm here, you're there, here's the sharp difference. On domestic policy, the tone was very different though.

S. O'BRIEN: An interesting moment happened when he was talking about Social Security. Let's play a little bit of what the president said about Social Security.

(BEGIN VIDEO CLIP)

BUSH: Congress did not act last year on my proposal to save Social Security. Yet the rising cost of entitlements is not -- is a problem that is not going away.

(END VIDEO CLIP)

S. O'BRIEN: Edited a little bit.

BROWNSTEIN: Yes.

S. O'BRIEN: Because the Democrats stood...

BROWNSTEIN: Democrats cheered...

S. O'BRIEN: ... and cheered for quite a while.

BROWNSTEIN: ... when he said they didn't. You know both ends of that were revealing. Of course the failure of Social Security in 2005 was one of the major setbacks that pushed President Bush's approval rating down to the lowest levels of his presidency and sets him off in 2006 on a much weaker position than when he began the second term in the State of the Union a year ago.

But the other point that he made is absolutely true. And in the end there are even many Democrats who believe that if there isn't a way to control the growth of cost of entitlement spending, there won't be money left for any of the things that Democrats want to do, much less what Republicans want.

S. O'BRIEN: So the Democrats might be cheering at that moment; but if this is not some kind of long-term solution, they may be left holding the bag as much as everybody else?

BROWNSTEIN: We did have a commission 10 years ago that President Clinton appointed with Bob Kerrey and John Danforth looked at the same thing. The options are known. What's missing is the bipartisan willingness to do things together. What President Bush and Republicans learned last year is on something like Social Security, very difficult to do on a party line basis. This is something that really pushed the issue down, I think, to the next president.

S. O'BRIEN: Let's talk, for a moment, about Hurricane Katrina and the mention in the speech. And maybe a moment is appropriate, because it was like this.

BROWNSTEIN: It was...

S. O'BRIEN: It was a 52-minute speech, it was 51 seconds long.

BROWNSTEIN: It was right at the end. It wasn't quite an afterthought, but it was approaching that direction, you know.

S. O'BRIEN: As close as he could get to an (ph) afterthought.

BROWNSTEIN: I mean of competitiveness, energy, healthcare, lobbying reform, these were areas the president went into in more depth than he has in the past. Hurricane Katrina was at the other end of the spectrum.

S. O'BRIEN: Surprised by that?

BROWNSTEIN: A little bit. I think, especially given how much it affected his standing with the public last fall. But I do think it was -- he was trying to look forward to new ideas that Republicans can run on in '06, even if they are more modest in size.

S. O'BRIEN: All right. Ron Brownstein, as always, nice to see you. Thanks for talking with us this morning.

BROWNSTEIN: Nice to see you. Thank you.

S. O'BRIEN: We certainly appreciate it.

Coming up, Hurricane Katrina, one of the worst natural disasters in United States' history, so why did it get only a passing reference in the speech last night? Talk about the reaction along the Gulf Coast this morning.

Then business news, bad news if you've got Google stock. Why it looks like the party might be over on Wall Street.

Those stories are all ahead on AMERICAN MORNING. We're back in just a moment.

(COMMERCIAL BREAK)

M. O'BRIEN: Carrie Lee is here. Yesterday you were positively wistful about the Greenspan years.

CARRIE LEE, CNN CORRESPONDENT: I know.

M. O'BRIEN: You have a fondness. LEE: Well, 18-and-a-half years at the helm. And what's going to be interesting -- of course we're talking about Fed Chief Alan Greenspan no longer head of the Federal Reserve. Ben Bernanke has officially taken the post, and going to be interesting to see how his style differs from Greenspan.

Quick recap on yesterday, the Fed, as expected, raised short-term interest rates by a quarter point to 4.5 percent. That's the federal funds rate. Close to a five-year high, you can see the chart there, 14th increase in a row since June of 2004. And the Fed says they may have to raise rates further, but they took out the word measured. So no guarantee here. A lot of people on Wall Street thinking Ben Bernanke may have to do one more rate hike and then he can put the brakes on.

M. O'BRIEN: How much huddling do you think he did with Greenspan before he got in there?

LEE: You know that's a good question.

M. O'BRIEN: Yes.

LEE: I would think probably not that much.

M. O'BRIEN: Not that much.

LEE: I think maybe he's kind of observing, and it's going to be interesting to see how his style differs and how his language differs. He has a reputation for being more of a straight talker than Greenspan, who, as you know, was kind of cryptic.

M. O'BRIEN: Delfick (ph). Yes.

LEE: What's going to be interesting, also talking about Greenspan, among other things, writing a book now. We'll see if his language when he writes is different from his speaking. And now that the reins are off, we'll see how it differs as well.

M. O'BRIEN: Otherwise it would be like reading, what, Stephen Hawking book or something, what did he say?

LEE: Exactly.

M. O'BRIEN: Let's talk about Google.

LEE: Google.

M. O'BRIEN: You know, for most companies, those would be great earnings reports, but it's Google.

LEE: This is what happens...

M. O'BRIEN: Right.

LEE: ... with tech companies sometimes,...

M. O'BRIEN: Yes.

LEE: ... especially a high flier like Google. Wall Street gets used to them shooting the lights out when it comes to beating expectations and then they simply meet or they miss a little bit and the stock tanks. That is exactly what happened to shares of Google yesterday.

The stock fell as much as 19 percent after hours last night. Finished down 12 percent. That's 53 bucks a share off of the stock price. Closing at $432. The action wiped out nearly $16 billion in market cap value. That's more than General Motors is worth altogether.

M. O'BRIEN: Wow!

LEE: So really putting things in perspective here.

M. O'BRIEN: Right.

LEE: Google met on sales, but they missed on profits. And Wall Street isn't used to that with this company, so tech futures looking very weak this morning as a result.

M. O'BRIEN: So maybe it's now time to get in on Google?

LEE: I don't know. I don't know. See, I would see what happens over at least the next few days over the short term.

M. O'BRIEN: Yes.

LEE: But, anyway, a lot of money off the table there.

M. O'BRIEN: All right. Thanks -- Carrie Lee.

LEE: OK.

M. O'BRIEN: Coming up, the prosecution starts building its case against the two men who ran Enron. Are Ken Lay and Jeff Skilling crooks or just clueless? We'll go live to Houston for the latest on the case.

Plus, diagnosis breast cancer, modern medicine offering new hope for women facing that battle. It's news every woman needs to know.

Stay with us.

(COMMERCIAL BREAK)

M. O'BRIEN: Not long ago when a doctor told a patient she had breast cancer, her choices for treatment were very limited and mostly grim. But all that is changing. "Welcome to the Future."

(BEGIN VIDEOTAPE)

MARY BRYANT, BREAST CANCER PATIENT: It seems like a lifetime ago. But before I was diagnosed, I was in my big modeling career and you really feel invincible. I had a mastectomy. I had 28 lymph nodes removed. I was in my 30s. You know no family history.

Why is it that so many women are still afraid to take care of it? To test, you have to go in, and the technique of doing mammograms. It would be so great if it could be something that they can tell if you're susceptible to cancer, if it's maybe just a DNA testing. You know come in with a saliva swab or maybe just do a blood test. If they could just identify it, deal with it and not take away your quality of life.

M. O'BRIEN (on camera): Mary's message is supported by this sobering fact, every two minutes a woman is diagnosed with breast cancer. But there's some encouraging news from medical research, better ways to predict it, detect it and treat it. In the fight against breast cancer, the future is now.

DR. CLIFFORD HUDIS, CHIEF OF BREAST CANCER MEDICINE SERVICE, MEMORIAL SLOAN-KETTERING CANCER CENTER: It's never been better to have breast cancer than now.

M. O'BRIEN (voice-over): That startling statement is also backed by fact. The survival rates for breast cancer have never been higher. And new therapies to fight the disease are unfolding every year.

Dr. Clifford Hudis is Chief of the Breast Cancer Medicine Service at Memorial Sloan-Kettering Cancer Center in New York. He says we should think of breast cancer not as one, but as a collection of diseases, each with different causes requiring different types of treatment.

The most exciting breakthrough, a drug called Herceptin. It targets a particularly aggressive form of cancer that affects one in five breast cancer patients. When added to chemotherapy in the early stages of the disease, it cuts the chance of a relapse by half.

HUDIS: And the question for us all is how many other targets are there like that? How many other drugs could we develop like that? How many subtypes of breast cancer will there be?

M. O'BRIEN: Also on the horizon, blood tests that better predict which families carry genes that could trigger some types of the disease. Add to that better understanding of the affect of diet and exercise, advanced imaging techniques that can discover small cancers sooner, less invasive procedures to treat them and in the next 10 years...

HUDIS: Maybe you have an imaging test that makes a diagnosis of cancer and you actually can deal with it that day and be done with it. And I really think by 2016 we'll be able to say to patients this is the kind of breast cancer you have and this is the most effective therapy for it. And I am confident that the outcomes that we offer patients in 2016 will be even better than they are today.

BRYANT: I am still here, so my work isn't done, got a way to go, but we're getting there. Just keep turning on the lights.

(END VIDEOTAPE) M. O'BRIEN: Just ahead on the program, which state of the union will the president visit on the big first day after his speech? We'll tell you why he volunteered to head to Tennessee.

Also, did New Orleans get short shrift in the speech, less than a minute and near the end? We'll talk to one congressman and ask him what he thinks about that ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

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