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American Morning

Farewell to FEMA?; CIA Leak Probe Case; Coalition Casualties

Aired April 27, 2006 - 06:29   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. Welcome back, everybody. I'm Soledad O'Brien.
MILES O'BRIEN, CNN ANCHOR: And I'm Miles O'Brien.

A big headline this morning. With hurricane season bearing down on us, lawmakers say they have the solution to what ails FEMA: get rid of it. Really?

Carol Costello has more on this from the newsroom.

It seems like an odd time to be bringing this up.

CAROL COSTELLO, CNN ANCHOR: Distinctly. It does. But is this really a surprise?

The Senate committee says scrap FEMA, get rid of it. The once proud agency so dysfunctional, it could get the ax.

A Senate bipartisan committee has heard testimony for seven months now, and even though, as you say, Miles, hurricane season is weeks away, they say creating another agency is the only answer. The Senate committee blames mistakes made during Katrina at the feet of pretty much everyone, even the man who fills the big shoes, and that would be the president.

This is a quote from Democrat Joe Lieberman, the lead Democratic chair on the committee. He says, "For Hurricane Katrina, the president failed to provide critical leadership when it was most needed, and that contributed a grossly ineffective federal response."

As for the White House, reporters peppered the president's spokesman about the proposal to scrap FEMA.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: House Republicans are debating whether to keep FEMA under Homeland Security or return it to an independent status. What's the administration's current thinking.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Our view hasn't changed, and we support it being where it is. And there's a number of steps I think that you will want to go back to the Department of Homeland Security has taken to strengthen FEMA and improve its response efforts.

(END VIDEO CLIP) COSTELLO: Keep it where it is. That's not quite what the Senate subcommittee wants.

Let's be specific. If you scrap FEMA, well, what do you do? FEMA would be replaced by a new "National Preparedness and Response Authority." And here's the thing: it would still work inside the Department of Homeland Security, but its director would have a direct line to the president. In other words, he or she could bypass the Homeland Security Director altogether, and, of course, right now it's Michael Chertoff.

The committee's report, by the way -- and it's 800 pages long -- is scheduled for release to the full Senate today. And you can get it and read it for yourself next week.

M. O'BRIEN: Carol Costello, thank you very much.

CNN planning live coverage of the FEMA report announcement, 10:00 a.m. Eastern, right after this program -- Soledad.

S. O'BRIEN: Deputy White House Chief of Staff Karl Rove back on the stand in the CIA leak investigation. It's the fifth time he's appeared before a grand jury in this case.

AMERICAN MORNING'S Bob Franken is live for us in Washington, D.C., with the story.

Hey, Bob. Good morning.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Good morning.

Well, he is -- he was -- outlasted this grand jury. This is a new grand jury. So, Rove had to come buy and say, hello, I'm one of the regulars here.

In fact, it is his fifth time. And what has happened is that he was needed for testimony, the special prosecutor decided, since his fourth time and developments, developments specifically involving former "TIME" magazine reporter Viveca Novak, who had raised questions about Rove's earlier testimony about conversations he had had with reporters.

So, he had some explaining to do when he went before the committee today. And when he left, he was being told that he is still being considered -- not -- doesn't know yet whether he's being considered for an indictment.

Of course, a former White House colleague, the vice president's chief of staff, Scooter Libby, is already being indicted. Both of them facing the same kind of questioning, whether they lied to investigators about leaks that disclosed the identity of CIA operative Valerie Plame, she the wife of harsh administration critic Joseph Wilson.

In any case, all of this is being sorted out. The special prosecutor still deciding whether to indict Karl Rove and add to the woes at the White House -- Soledad.

S. O'BRIEN: And if that were to happen, would it happen anytime soon? Is there any indication Bob?

FRANKEN: Well, I wish we could find out. This has been going on now for nearly three years, and the questions still remain about whether Rove had a role that would possibly bring a criminal indictment. We're told something should happen soon, but we've been told that for a long time.

S. O'BRIEN: Yes, we have, Bob. Bob Franken for us this morning in Washington, D.C.

Thanks, Bob -- Miles.

M. O'BRIEN: In Iraq, an attack that could lead to further dwindling of the U.S.-led coalition there. Three Italians and one Romanian serving in the coalition forces killed in a roadside bomb earlier today. So, will Italian troops possibly be withdrawn? Italy's incoming prime minister, Romano Prodi, says as soon as the new government takes office, a decision will be made.

CNN's Rome bureau chief, Alessio Vinci, with more.

Hello, Alessio.

ALESSIO VINCI, CNN ROME BUREAU CHIEF: Hello, Miles.

Well, according to Italian military officials, it was, indeed, a roadside bomb that hit a four-vehicle -- armored vehicle military convoy, killing the three soldiers and one Romanian in the second vehicle. This attack, as you mentioned, comes at a politically sensitive time here in Italy.

Prime Minister Silvio Berlusconi, who just lost an election, and most analysts would agree not because of his foreign policy or because of his deployment of Italian troops in Iraq, which most people in this country oppose, his -- has issued his own statement saying he was deeply saddened by the attack. Romano Prodi, who is expected to take over for Mr. -- for Berlusconi in about a few weeks' time, has issued his own statement, saying basically that this is an attack that hits all of Italy.

Clearly, trying not to turn this tragedy into a political squabble. But obviously, the issue of troop withdrawal will be back on the front burner here in Italy as the new parliament convenes tomorrow for the first time and, of course, the new government then puts -- is put together in a few weeks' time -- Miles.

M. O'BRIEN: Well, Alessio, there will undoubtedly be calls for immediate withdrawal of troops. How will that all shake out?

VINCI: Well, it's important to understand that Italy has already begun a troop withdrawal under the prime minister, Silvio Berlusconi, the current prime minister. About 600 troops out of the 3,200 that were initially deployed have already returned. A thousand more will return by June. And all of the troops should be back home by the end of this year.

Romano Prodi, the prime minister -- the next prime minister, has already said that during the political campaign that he will withdrawal also all the troops by the end of this year. So, there isn't much difference between the current prime minister, Berlusconi, and the incoming one, Romano Prodi.

The difference perhaps is more in style, what will happen afterwards. Prime Minister Berlusconi would have left behind a small contingent of troops to protect Italian civil engineers who are working there for the reconstruction. On the left side, Romano Prodi says that perhaps could happen, but his -- his coalition leaders are saying no way, all troops should be returning home by the end of this year.

M. O'BRIEN: Alessio Vinci in Rome.

Thank you very much.

And while we're on the subject of troops coming home, when will U.S. troops be allowed to come home? The progress of Iraq's government or lack thereof has a lot to do with that timetable. This is according to General George Casey, the top U.S. commander in Iraq. Right now, there are about 100,000 American troops in Iraq, but plans being considered right now could potentially drop that number by more than a third.

Our senior Pentagon correspondent, Jamie McIntyre, with more.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: As of this morning, U.S. commanders are not yet willing to sign off on a plan that would reduce the U.S. troop presence in Iraq by 30,000 by the end of this year. It's an optimistic scenario that assumes the new Iraqi government will enjoy popular support and the new Iraqi army will continue to improve.

An even more optimistic option would cut the number of U.S. troops by 55,000, leaving only 75,000 American troops in Iraq by the beginning of next year. But the Pentagon insists whatever decisions are made, they will be made based on the advice of military commanders in Iraq, and not driven by political considerations at home.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

S. O'BRIEN: Happening "In America" this morning, a couple of strange reports to share with you.

A coyote hunt that's under way near Seattle -- an 18-month-old child was bitten on the ear while playing at an elementary school. Now, the coyote also bit a 4-year-old and might have been trying to drag that kid off. Neither was seriously injured, though the 18-month-old is now undergoing painful rabies treatments. Wildlife officials are trying to hunt down that coyote now.

A teenager in the Houston area fighting for his life after what police say is a hate crime. The 16-year-old was brutally attacked and then left to die in his own back yard. Police are charging two 17- year-olds with the crime. They're going to stand trial as adults. The suspects expected to appear in court later today.

In Houston, a swarm of bees have forced a woman right out of her apartment. They've taken over, set up a colony inside a wall, leaving honey everywhere inside her apartment, dripping down the blinds. The woman says she noticed the bees about a week and a half ago and then finally got out once they began buzzing all over the apartment.

How weird is that?

And then there was quite a scare for a woman in Orlando, Florida. While she was raking leaves in her back yard, she found that there that the bomb squad guy is carrying, an unexploded World War II grenade. Well, the evacuation of her neighborhood then ensued, two blocks around her house.

The bomb squad took it away. They're not sure if it was live. They also had absolutely no idea how it got into her back yard in the first place.

A little bit of wrap-up of the odd today, huh?

M. O'BRIEN: Wow. I sure am glad it came out that way for her.

S. O'BRIEN: Wow. Oh, yes.

M. O'BRIEN: Yes.

S. O'BRIEN: That would be a horrible thing to discover. Unclear if it's even working at all, but scary.

M. O'BRIEN: Yes.

S. O'BRIEN: Let's get right to the forecast. Reynolds Wolf's got that. He's at the CNN Center, filling in for Chad, who's apparently at the start of a not so great vacation.

Hey, Reynolds.

REYNOLDS WOLF, CNN METEOROLOGIST: Oh, it's going to get better for Chad. He had some rain earlier this morning.

S. O'BRIEN: Often rain not so good.

WOLF: Yes, I know. I know.

M. O'BRIEN: It's already better. He's asleep right now. Put it that way, right? WOLF: You bet. You know he is. You know he's in snooze city right now.

(WEATHER REPORT)

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

WOLF: You bet.

M. O'BRIEN: Coming up in just a little bit, holy tax break. Should a theme park get a free pass because it's all about religion? We've got that story for you.

S. O'BRIEN: Then, some new figures on just how many people are now using the Internet.

M. O'BRIEN: Billions and billions. Billions.

S. O'BRIEN: Well, we'll have that number for you coming up in just a moment.

First, though, here's a look at some of the other stories making news on this Thursday morning.

(COMMERCIAL BREAK)

M. O'BRIEN: Some of the stories we're following around the world.

You want cheap gas? How about 40 cents a gallon? Well, that's what they pay in Iran.

Meanwhile, the energy-hungry Chinese, they want to drill for oil in Nigeria.

And the U.S. defense secretary burning some fossil fuels, winging his way home from Iraq.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT: I'm Aneesh Raman in Tehran.

Amid rising tenses between Iran and the West, there are concerns that Iran could use its oil as a weapon, cutting its supply to increase gas prices back in the U.S.

Well, we went to a gas station here if Tehran and asked Iranians what they thought. By and large, they felt that if Iran is pushed into a corner for maintaining a civilian nuclear program, it is Iran's right to use its oil as a leverage. Gas, by the way, here is just about 40 cents a gallon, in part because of subsidies as well, because Iran is one of the world's largest oil reserves.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE) JAMIE FLORCRUZ, CNN CORRESPONDENT: This is Jamie Florcruz in Beijing, where the headlines are about the Chinese president's visit to Africa and the Middle East.

After visiting Washington last week, Chinese President Hu Jintao went straight to oil-rich countries like Saudi Arabia and Nigeria, part of China's relentless search for oil. China is now the world's number two consumer of oil. That's why Chinese leaders are trying to get oil wherever they can find it, even in countries like Sudan and Iran, countries which the U.S. regards as rogue states.

China's willing to ignore human rights and now there are concerns just to sign oil deals. That puts China at odds with the U.S.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT: I'm Arwa Damon at Camp Anaconda in Balad, Iraq, north of the capital.

U.S. Defense Secretary Donald Rumsfeld and U.S. Secretary of State Condoleezza Rice's visits to Iraq had little impact on troops operating out here. For them, the mission went on as it does every day. Some were aware of the visit and some were not. But all said that it didn't really matter, that it didn't affect what they were doing here on a day-to-day basis.

Now, many here are hesitant to speak about U.S. senior administration officials. It could potentially get them into a lot of trouble. But for most, in fact, for all, the bottom line is, the most important thing is the mission, and for them, that is getting themselves and their fellow troops home alive.

(END VIDEOTAPE)

M. O'BRIEN: For more on these or any other of our top stories, head to our Web site, CNN.com.

Still to come on AMERICAN MORNING, if you work during retirement, is it really retirement? Hmm. There's a little conundrum for you. Andy is "Minding Your Business" with a look at the future of retirement.

Then there's this...

(BEGIN VIDEO CLIP)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: We're about to enter this 1,100-foot tunnel and descend 130 feet underground.

(END VIDEO CLIP)

M. O'BRIEN: That's our Pentagon correspondent, Barbara Starr, underneath that hard hat. We'll find out what she found when she went underground to a new Army blast site. It's one of the largest non- nuclear tests ever.

That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Top stories time.

Lawmakers investigating the Katrina response now say get rid of FEMA. The panel says the agency mishandled things and needs to be replaced with a new emergency management organization.

Former Enron founder Ken Lay returns to the witness stand about two hours from now. During cross-examination yesterday, Lay admitted he tried to get in touch with potential witnesses during his fraud trial.

Palestinian security sources say an Israeli air strike today killed a Palestinian militant and wounded two others. The Israeli army says it attacked militants planning a rocket attack.

A president with numbers in the 30s. Big challenges overseas, a serious energy crunch. It sounds familiar, doesn't it?

We're not talking about President Bush. Think a few decades back to Jimmy Carter. The former president shared hits thoughts on what's going on at the White House right now with our Larry King.

(BEGIN VIDEO CLIP)

JAMES CARTER, FMR. PRESIDENT OF THE UNITED STATES: I think the shake-up has come about because of the rapid decrease in the president's popularity. And I think the general pressure not only from the general public, but from Republican leaders on the White House to make some changes is appropriate because of the lost popularity in the polls.

Part of it obviously is for that reason. Perhaps part of it is to change some of the policies in the White House.

I think the recent choice apparently of a new press secretary is interesting. He's coming from FOX News. As you know, and several comments that I've heard today about teaching at Emory was -- from the students -- was why should they pay him at the White House? He's been getting his full support for the White House without pay. Let FOX pay him.

So I think it's an interesting change. And I think a breath of fresh air is probably going to be helpful to President Bush and possibly helpful to the country.

(END VIDEO CLIP)

M. O'BRIEN: And you can catch "LARRY KING LIVE" every night, 9:00 p.m. Eastern right here on CNN.

Andy Serwer is here. Good morning to you, sir. How are you?

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Good morning to you. CNN.

M. O'BRIEN: CNN.

SERWER: OK. Never heard that.

Some business news coming up, Miles.

How close is the United States to being 100 percent Internet savvy?

And why do folks work after they're retired? Is it for the love? We'll find out coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: A look now at some of the stories we're working on this morning.

A Senate report suggests doing away with FEMA just five weeks before hurricane season begins.

Congress gets down to business on high gas prices.

The Pentagon considers withdrawing troops from Iraq. The question now, of course, is when and how many?

And President Bush travels to the Gulf Coast to highlight National Volunteer Week.

Plus, a magic moment for hoop star Jason McElwain. Basketball legend Magic Johnson is going to make a movie about J-Mac. Remember J-Mac, our boyfriend?

Those stories all ahead this morning.

Not a surprise that more and more Americans are using the Internet. Also, working in their retirement. Andy Serwer's got a look at those stories this morning as he minds your business.

Good morning.

SERWER: Good morning, Soledad.

Well, Internet usage spreading across the nation. Almost 100 percent, not quite.

Three out of four Americans now use the Internet regularly. My question is, what's the other guy doing, right?

Come on. You know, what are you doing?

Let's look here at the numbers -- 73 percent of all U.S. adults...

S. O'BRIEN: Reading books.

SERWER: Yes. Eighty-eight percent of adults under 30. And here you go -- of course, not a big surprise -- elderly folks not as Internet savvy as younger people.

M. O'BRIEN: You know, remember in the early days of the Internet we were all concerned about the great digital divide.

S. O'BRIEN: Right.

M. O'BRIEN: It really hasn't happened that way, has it?

SERWER: You know what's really -- and, you know, I've got a story about that, Miles.

Yesterday, I was at an elementary school in the Bronx in a low- income neighborhood working on a story, and I was in the library, where there were beautiful new computers and Internet. And I said, "This must be great for the kids because they probably don't have this at home." And the librarian said, "Actually, most of them do. Most of these children do have Internet and computers at home."

M. O'BRIEN: Interesting. Wow.

SERWER: So, even in neighbors like that.

Now, let's talk a little bit about working in retirement. It doesn't sound so attractive or appealing.

S. O'BRIEN: That's kind of an oxymoron.

SERWER: It does. It does.

M. O'BRIEN: Get a hobby now, right?

SERWER: Yes. Well, actually, a lot of folks work when they're retired. And it's not for the money. A new study out showing that people are doing it, well, sort of for the love, I guess, is what you could say.

Sixty-seven percent of people continue to work in retirement, but only 25 percent say they do it for the money. And, you know, most of the people do it because they want to stay active, they want to stay connected, they want to do something with their time other than play shuffle board. And I know older people hate that cliche and that image.

There are people that I work with who are in their 70s and don't have to, and they just love what they do. And so, that's really fortunate if you're doing something that you love. And I'm sure you guys are going to be working well into your 80s and 90s at this job, if the suits will have us.

S. O'BRIEN: When I retire, I'll still be here just hanging out with you.

M. O'BRIEN: Hello, coming in with the walker.

SERWER: There you go.

M. O'BRIEN: All right. Thank you, Andy.

SERWER: You're welcome.

M. O'BRIEN: Is a theme park with a religious bent being holier than thou? Lawmakers in Florida trying to decide if a place called The Holy Land Experience should or should pay county taxes.

They park is in the land of the mouse, Orlando. But it's not a Disney operation.

Check it out. They've got Herod's Temple, Jesus' Tomb. You can grab a communion cracker at the concession stand.

S. O'BRIEN: Really?

M. O'BRIEN: For real. For real.

SERWER: Wow.

M. O'BRIEN: Yes. I don't think it's really...

SERWER: What's that?

M. O'BRIEN: Yes. And the Orange County Tax Office says that none of that exempts it from paying local taxes. The tax exemption has passed the House in Tallahassee, though, and now the park operators are, shall we say, praying it gets by the Senate.

SERWER: A lot of prayer.

M. O'BRIEN: You decide. You decide.

As we approach the top of the hour, let's check the forecast. Reynolds Wolf is at the CNN weather center with that.

Hello, Reynolds.

WOLF: Hello.

(WEATHER REPORT)

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