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American Morning
Trapped on a Tram; Rumsfeld Staying Put; Sticker Shock
Aired April 19, 2006 - 06:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Top stories for you now.
A high wire drama in New York City is finally over. Police rescued dozens of commuters from two tramcars stuck dangling over the East River last night. They had to use rescue baskets to get those passengers down. Not for folks who are scared of heights.
No injuries reported. We're live on the scene in 30 seconds.
In the Zacarias Moussaoui trial, relatives of 9/11 victims expect to testify for the defense today. One mother has said she hopes Moussaoui is shown more mercy than the terrorists showed the 9/11 victims.
And today is the 13th anniversary of the Waco standoff. That 51- day siege at the Branch Davidian Compound ended with the scene you see there, explosions and flames after tanks rolled toward the complex. Dozens were killed.
Good morning to you. I'm Miles O'Brien.
BETTY NGUYEN, CNN ANCHOR: Good morning. I'm Betty Nguyen, in for Soledad this week.
Well, high drama in the sky over New York City overnight. Rescuers scrambled to get to passengers stuck in two tramcars 300 feet above the East River.
Chris King is live in Manhattan.
Good morning, Chris.
CHRIS KING, CNN CORRESPONDENT: Good morning, Betty.
That tram headed back to Roosevelt Island is back at the station now. It just got moving finally about a half an hour ago. This, of course, is after all the passengers are safely on the ground.
(BEGIN VIDEOTAPE)
KING (voice over): High drama some 25 stories above New York City's East River. About 5:00 Tuesday afternoon, a mechanical problem triggers a series of power failures. The cars at the Roosevelt Island tram stall.
The tram operates alongside the 59th Street Bridge, shuttling passengers back and forth between Roosevelt Island and Manhattan. It's normally a four-minute ride. But this was no normal ride.
Sixty-nine people were on board the gondolas, 12 children. The hours drag on. The tramcars and passengers dangling, 6:00, 8:00, 10:00.
MAYOR MICHAEL BLOOMBERG (R), NEW YORK CITY: We got supplies to people in both of the gondolas. That's done with a very small car that goes up over the cable and drops some supplies down. And then the operators mount the rescue vehicle, which they can only do one side at a time.
KING: Finally, at 10:52 p.m., rescue teams start transferring people from the tram into a rescue basket. A short time later, at 11:18 p.m., the cage docks at Roosevelt Island, carrying the first of the stranded passengers, seven children and five adults, to safety.
UNIDENTIFIED MALE: We were happy to be down. And a lot of people cheered us up when we were up there. They were making us laugh. They were dancing a little bit. They were --- they were nice people. And sometimes you can find great people in New York.
(END VIDEOTAPE)
KING: Now, once again, all the passengers have been rescued, 68 in all. Two of the passengers were infants about a year old. It took five trips to rescue -- five trips in that basket to bring down the passengers who were headed to Roosevelt Island. And, of course, it took a large industrial crane to take down those passengers who were headed to Manhattan -- Betty.
NGUYEN: Christopher King.
Thank you, Christopher.
And we're going to talk to the 12-year-old boy and his baby- sitter about that midair rescue and the long hours stuck on the tram and the anxious parents who waited on the ground watching it all. That's coming up in our 8:00 hour.
O'BRIEN: Quite a story to tell.
Defense Secretary Donald Rumsfeld refusing to retreat yesterday. In a flurry of public and private briefings, Mr. Rumsfeld, and, for that matter, his boss, showed not the slightest inkling that they would bow to pressure from retired generals who say it is time for Rumsfeld to go.
AMERICAN MORNING'S Bob Franken live now in Washington.
Bob, what's the political fallout of all this on the day after?
BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, the significance is that here you have generals who do not make their careers by marching to a different drum are doing just that. But then you have the president, in effect, saying, don't mess with my man, Don, and reminding people that he is, after all, the commander in chief. (BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I have strong confidence in Don Rumsfeld. I hear the voices and I read the front page. And I know the speculation. But I'm the decider. And I decide what is best, and what's best is for Don Rumsfeld to remain as the secretary of defense.
(END VIDEO CLIP)
FRANKEN: But there's a huge amount of political fallout. After all, Donald Rumsfeld is the symbol of the Iraq war, and many people believe that if he was to resign, that would be considered an admission that Iraq was a mistake. But there are Democrats who really, really want to push this issue.
(BEGIN VIDEO CLIP)
SEN. RICHARD DURBIN (D-IL), MINORITY WHIP: It's time for Donald Rumsfeld to go. I think if you look at what's happened now, we're in a war that's lasted longer than World War II. We've lost over 2,240 of our best and bravest young men and women. There's no end in sight.
(END VIDEO CLIP)
FRANKEN: So, the senator from Illinois, a Democrat, is going to be pushing a resolution of no confidence in the Senate next week against Donald Rumsfeld. Of course, the whole idea is to keep this controversy alive -- Miles.
O'BRIEN: All right, Bob. Take us for a moment inside that parallel universe we call "inside the beltway." What is the conventional wisdom in Washington now? What are people saying about Rumsfeld, what he should do?
FRANKEN: Well, it depends on the person you speak to. There are those who say that he really does need to go, that he is so much of a lightning rod, that anybody else might be somebody who would be less controversial. On the other side, of course, is the feeling that if he does go, it is a suggestion that the Iraq war is a mistake at a time when most of the people in the United States, according to the polls, believe that anyway.
O'BRIEN: Bob Franken, thank you very much.
China's President Hu Jintao is heading today from Washington to Washington. That's state to the district.
President Hu kicked off his first official U.S. visit in the Seattle area yesterday. He's visiting Microsoft's headquarters and the Boeing plants there as well. The Chinese leader had dinner at the home of Microsoft's Bill Gates. President Hu has promised to crack down on China's black market and piracy of Microsoft Windows software.
Tomorrow, he will meet with President Bush. Topping the agenda, trade and China's growing dependence on oil -- Betty. NGUYEN: Happening "In America" right now, police in St. Louis not sure what led to a deadly shooting spree. An employee killed two women at a catering company. One of them was the owner.
Police say the shooting came shortly after Herbert Chalmers (ph) killed the mother of his child at her apartment. He allegedly bragged to people about his plans earlier in the day. Chalmers (ph) later turned the gun on himself.
Health officials in Los Angeles are confirming a case of the bubonic plague. They say an unidentified woman contracted the disease but is now doing OK. It is the first case in L.A. in more than 20 years. The flea-borne bubonic plague is not considered contagious.
Well, dozens of families are homeless this morning following this massive apartment fire in Atlanta. Check it out.
The four-alarm fire burned well into the overnight hours. At least two buildings were destroyed. Obviously, you can see the damage it can do. It's not yet known what caused that fire.
And firefighters working through the night on a growing brush fire in Naples, Florida. Residents there are being told to be ready to evacuate at a moment's notice. The fire has already charred more than a thousand acres. Students at an area college were evacuated last night when the fire came within 75 yards of the campus.
O'BRIEN: Time for a check of the forecast now. Chad Myers at the CNN Center.
Hello, Chad.
CHAD MYERS, CNN METEOROLOGIST: And good morning, Miles.
(WEATHER REPORT)
O'BRIEN: Rack 'em, stack 'em -- what is it, rack 'em, stack 'em and knock 'em down?
MYERS: It's kind of like that RockEm SockEm Robots game.
O'BRIEN: I remember that game, yes. Yes.
NGUYEN: Ah, nice.
O'BRIEN: Which takes us right to the mumps very well. Kind of -- of that era, right?
(CROSSTALK)
O'BRIEN: The mumps are still raging. Nine states are dealing with this thing right now. This is something we thought went the way of the rabbit ears and the RockEm SockEm Robots, but now we're dealing with it -- Carol.
CAROL COSTELLO, CNN ANCHOR: Oh, well, you know gas prices are high. But what if the big oil companies really are to blame, really are gouging us? Would the federal government really investigate? We'll ask Andy next.
NGUYEN: Thousands of people fleeing the Danube River as it sees its highest level in more than a century.
But first, here's a look at what else is making news this Wednesday morning.
(COMMERCIAL BREAK)
O'BRIEN: Around the world this morning.
High stakes in Nepal as protesters take to the streets there.
Israel's reaction to the latest suicide bombing.
A report from the battle zone in Iraq.
We begin, though, with those floods in the Balkans.
CHRIS BURNS, CNN CORRESPONDENT: No, this is not a lake. This is the River Danube.
I'm Chris Burns, in Vidin, Bulgaria, where the river has hit historic highs, broken century-old records. More than 30 feet deep.
There's a cold, stiff wind blowing. It's been raining much of the night as many villages here are threatened. The wind is blowing against these sandbags and could break some of the dikes.
They've been working around the clock, all hands on deck. The military, civilians, horse-drawn carts, police and any rescue crews have been working to try to prevent these dikes from breaking through.
We'll be watching for that today with you to see if there are thousands more who might have to be evacuated.
SATINDER BINDRA, CNN CORRESPONDENT: Hello. I'm Satinder Bindra in Katmandu, Nepal.
Hospital workers, doctors, and nurses are just one of the many groups joining Nepal's growing protests against the king. These demonstrations are now in their second week.
On Thursday, the country's political parties which are organizing these demonstrations say they will be staging their largest-ever rally to try to convince King Gyanendra to hand over full political powers he seized last year.
In the meantime, neighbor India is sending a senior envoy to Katmandu to try to diffuse Nepal's escalating crisis.
PAULA HANCOCKS, CNN CORRESPONDENT: I'm Paula Hancocks, reporting from Jerusalem. Israel has laid responsibility for Monday's deadly suicide bombing in Tel Aviv directly at the door of the Hamas-led Palestinian government. But Israel has decided not to carry out a large-scale military operation for the time being. It will just beef up security along the borders. And despite international criticism, Hamas is refusing to take back its support for Monday's bombing.
ARWA DAMON, CNN CORRESPONDENT: Hi. I'm Arwa Damon at the governor's compound in central Ramadi. This is a location that is attacked so frequently, that even just to step into the courtyard, we need to wear our body armor. If you look to the walls of the buildings, you can see the various scars and holes that have been left by the multiple attacks that have happened here.
Now, the governor of Al Anbar province does come and work here every day, although he is the only part of the government of the province that exists. Civilians, though, also arriving here, despite the violence, despite the risk of attack, to lodge their complaints, and contractors come through to make bids on any number of projects.
O'BRIEN: For more on these stories and all the other top stories, for that matter, we invite you to visit CNN.com -- Betty.
NGUYEN: And speaking of those top stories, they're still ahead, including stuck on a tram. We will tell you more about that high sky rescue in New York City.
Also, who hasn't been there? You're running late, waiting forever for the traffic light to change. Well, a guy in Colorado found a state-of-the-art solution to this traffic problem. We're going to tell you about it and how it could possibly get you into some trouble, too, as AMERICAN MORNING continues.
(COMMERCIAL BREAK)
O'BRIEN: Good morning, Savannah, Georgia. Looking for the Flock of Seagulls there. Thank you, WTOC, for that wonderful shot on this beautiful morning there.
NGUYEN: Pretty.
O'BRIEN: We hope you have a good day there.
Now, if you have an empty gas tank there in Savannah or anywhere else this morning, you're in for a rude awakening. Gas prices now averaging $2.79 a gallon. Collectively, we pay $212 million more per day for the gas that we are buying than we did a year ago.
NGUYEN: Ouch. Ooh, that's high.
O'BRIEN: But Andy Serwer is going to pony up the money for us.
Carol Costello is in the newsroom with more on this grim news.
Hello, Carol.
COSTELLO: I'm going to pony it up right now.
Think back to the president's State of the Union Address. Remember he said we're addicted to oil, we must change how we power our automobiles? Well, in large part, it hasn't happened yet.
What has happened is the political rhetoric is red hot once again. The Democratic senator from New York, Chuck Schumer, calling for a federal investigation to see if oil companies are ripping us off.
(BEGIN VIDEO CLIP)
SEN. CHARLES SCHUMER (D), NEW YORK: The bottom line is, it's not hurricane season, but the oil companies are just raising the price up and up and up. And the question is, are they doing this dictated by the laws of supply and demand, or is something else at work?
(END VIDEO CLIP)
COSTELLO: Remember, he said that the last time gas prices went through the roof.
President Bush also weighing in again, saying the market is driving gas prices up, yet assuring Americans the feds are watching big oil.
(BEGIN VIDEO CLIP)
BUSH: And I'm also mindful that the government has the responsibility to make sure that we watch very carefully and investigate possible price gouging. And we'll do just that.
(END VIDEO CLIP)
COSTELLO: Hmm. I'm going to come back to that in a minute. In fact, we're going to ask Andy that very question. But first, the obligatory tips to help you save on gas.
If you cannot drive 55, you will pay for every five miles per hour over that speed. It will cost 21 cents per mile.
Take the load out. If you remove that extra 100 pounds you carry in your vehicle, it will reduce your fuel intake by 2 percent.
Do not sit in your car with the engine running at the 7-Eleven waiting for your husband to come out with a diet soda. Idling costs money.
Use cruise control. Speeding up, slowing down, bad.
OK. Let's get back to the gouging question.
So, Andy, Andy Serwer...
ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Carol? COSTELLO: ... I'm expected to believe that the Federal Trade Commission, the arm of the federal government, is going to look into big oil to see if big oil is really ripping us off. Will that really happen?
SERWER: You know, it's hard to see it right now. Obviously, big oil has tremendous influence on Capitol Hill, Carol. But at some point, if prices get too high, there will be the political will power.
I think you have to hearken back to the late 1970s, when Congress did impose a windfall profits tax on oil companies that lasted eight years from 1980 to 1988. So, it is possible. I don't think we're there quite yet, though. So...
COSTELLO: When will we get there?
SERWER: Well, maybe when the price of gasoline is at $3.50 a gallon for a year or so and we really start to feel the pinch.
COSTELLO: So, it has to be very high over an extended period of time?
SERWER: Yes. I think that's probably correct. And we're not there quite yet. And when we see, you know, gas prices...
COSTELLO: Some people would disagree with you.
SERWER: Yes, well, it's just, you know, a reality at this point I think.
COSTELLO: OK. I think you've answered my question.
SERWER: OK.
COSTELLO: But there's just no way I believe that the Federal Trade Commission will look into big oil.
SERWER: Probably not right now.
COSTELLO: OK. Thanks, Andy.
SERWER: You're welcome.
O'BRIEN: What's Exxon's profits right now?
SERWER: Billions.
O'BRIEN: Billions.
SERWER: Many billions of dollars.
O'BRIEN: I guess it's how you define windfall, right?
SERWER: Yes. That's right. That's right.
O'BRIEN: Andy, what you got coming up besides oil? SERWER: A couple business stories we're following this morning.
Should you feel sorry for big tobacco companies? They think so.
Plus, that housing market, is it finally, finally slowing down? We'll tell you coming up next on AMERICAN MORNING.
(COMMERCIAL BREAK)
O'BRIEN: A look at some top stories now that we're working on.
Prosecutors say they're seeking a third suspect now in that Duke rape investigation.
Secretary of Defense Donald Rumsfeld says he's staying put at the Pentagon.
More changes could be brewing in the West Wing. We're live at the White House with that.
And President Bush calls rising gas prices a major problem for the country.
Plus, a high wire rescue. Early this morning in New York City, dozens of passengers stuck dangling for hours above the East River.
Those story ahead. But first, some business news.
NGUYEN: Yes. Big tobacco is facing the heat from several states. Andy Serwer is here "Minding Your Business" on that.
Hi.
SERWER: Good morning, Betty, to you.
Before we talk about that, I've got to eat a little crow here, because we've been talking about higher oil prices, of course. And I said that higher oil prices would put a damper on the stock market. Wrong.
NGUYEN: Yes, big wrong.
SERWER: At least yesterday, stocks soared.
O'BRIEN: Next.
SERWER: And I'm ready to eat a little crow here. So, just a note.
Yes, this is a very interesting tobacco story. Of course, litigation in this business has been going on and on and on forever.
There was the landmark settlement between states and big tobacco in 1998. Well, guess what? More litigation.
The states are suing big tobacco again. This time over $1.2 billion. They say the states, including California, Massachusetts, New Jersey, and Ohio, they say that the tobacco companies owes them.
The tobacco companies, the big three Lorillard, R.J. Reynolds, and Philip Morris, had set aside $1.2 billion, saying they would pay it only if their market share didn't drop. They said the settlement might make their market share drop because they would be unable to advertise in market anymore.
Well, guess what? They say their market share dropped from 99 percent to 92 percent. Oh, isn't that too bad?
NGUYEN: Yes.
SERWER: So, now they're saying we can't pay you the $1.2 billion, that's our money, because our business has been hurt by the settlement because we can't advertise anymore.
NGUYEN: Oh, really?
O'BRIEN: Boy, there's something wrong with that logic.
(CROSSTALK)
SERWER: Remember this word I used a couple weeks ago, pretzelly (ph)?
NGUYEN: Pretzelly (ph).
SERWER: It's a pretzelly (ph) logic.
O'BRIEN: Pretzel logic.
SERWER: Harking back to Steely Dan, right?
O'BRIEN: Yes. Yes.
SERWER: I really think it is. Not a good situation there.
Let's talk about the housing market here. And this could be the little business anchor who cried wolf. I'm eating a lot of crow here.
NGUYEN: Yes, you are.
SERWER: When is the housing bubble going to end? Well, maybe, maybe it finally is showing signs of slowing.
O'BRIEN: Oh, stop that.
NGUYEN: Are you sure about this, Andy?
(CROSSTALK)
SERWER: Housing starts in March dropped 8 percent, which is big.
O'BRIEN: You're almost gleeful about this.
SERWER: No, I'm not. I don't like it. No one likes this. The second slowest month in the year. Why? There was a lot of building in January when the weather was warm.
But here's the real rub here. Interest rates are really finally starting to get higher. The 30-year rate now at 6.49 percent. That's the highest since the summer of 2002.
And when money gets more expensive, it makes houses more expensive. And people buy less homes, period. That's unassailable.
NGUYEN: It all makes sense, yes.
O'BRIEN: It's still historically low numbers.
SERWER: Uh-oh, coming back at me.
O'BRIEN: It's still a great investment. And now is the time to buy.
NGUYEN: We've got a...
SERWER: I think we have a vested interest here. Yes, we'll have a point, counterpoint.
NGUYEN: A little roundtable.
SERWER: Yes.
O'BRIEN: That's right.
SERWER: You can moderate.
NGUYEN: I'll try my best. It's difficult between you two, though.
SERWER: All right.
O'BRIEN: All right. Thank you, Andy.
NGUYEN: Thank you, Andy.
SERWER: You're welcome.
O'BRIEN: As we approach the top of the hour, let's check on the forecast.
Chad Myers in the weather center.
Hello, Chad.
MYERS: I'm on Andy's side of this one, though.
O'BRIEN: Oh, you are? Oh, you're a bubble burster, huh?
MYERS: No, I'm not a bubble burster, but if the interest rates go higher, then your payment is going to be higher. NGUYEN: More. Yes, exactly.
MYERS: And so you've got to buy a cheaper house.
NGUYEN: I'm with you, Chad. I'm right there with you.
O'BRIEN: Think of it as a buying opportunity. As interest rates go up, people will rush out to purchase.
NGUYEN: Oh, I don't know about that.
MYERS: With money they don't have.
O'BRIEN: Well, that's the American way, Andy -- I mean Chad, or whoever the heck you are.
NGUYEN: Chad.
SERWER: We're all on the same side. That's why. You got us confused.
(WEATHER REPORT)
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