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American Morning

Cold War Redux?; Australia Miners; Gas Gauge

Aired May 05, 2006 - 06:00   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: Congressman Patrick Kennedy involved in an accident on Capitol Hill. He says he wasn't drinking, he was medicated. Did he get special treatment from the cops?
MILES O'BRIEN, CNN ANCHOR: The defense secretary on the defensive again, this time it's not retired generals, just some well- informed and angry citizens.

And shades of the Cold War, the vice president with some strong criticism of Russia.

S. O'BRIEN: And those trapped miners. Well, they're still stuck, but they're getting a hot meal and some encouraging words from their favorite rock star. We'll tell you just how close they are to getting out.

Good morning. Welcome, everybody. I'm Soledad O'Brien.

M. O'BRIEN: And I'm Miles O'Brien.

S. O'BRIEN: Let's get right to our top story, a quick look at some of the events that are happening this morning.

On this 5th of May, Cinco DeMio, major immigration rallies are expected today in Montgomery, Alabama; in Richmond, Virginia; in Richmond, Indiana, too; and in Santa Clara, California.

British Prime Minister Tony Blair is reshuffling his Cabinet this morning. The move is coming after Blair's Labor Party lost more than 250 seats in Thursday's local elections. The poor showing could also hasten his resignation as party leader and prime minister, some are saying.

Another deadline for peace in Darfur has passed. There are still some signs, though, that talks are moving forward. CNN has learned that a main rebel group has agreed to a peace deal based on some changes to an earlier proposal. The Sudanese government, though, has not yet agreed to those same changes.

And Lewis "Scooter" Libby goes back to court for a pre-trial hearing today. Attorneys for the vice president's former chief of staff want prosecutors to reveal all the evidence they plan to use in the case. Libby's trial on charges that he lied to a grand jury is set for January.

In Rockville, Maryland, John Muhammad says he is innocent. He's going to use, he says, "quantum physics" to prove it. Muhammad is acting as his own attorney for his second trial in the D.C. area sniper shootings. He's facing charges linked to six killings in Montgomery County. He was already sentenced to death in Virginia for another killing in the 2002 shooting spree.

Let's get a check of the forecast this morning with Chad Myers. He's at the CNN Center.

Good morning to you, -- Chad.

CHAD MYERS, CNN METEOROLOGIST: Hi, Soledad.

(WEATHER REPORT)

M. O'BRIEN: Thank you, Chad.

Congressman Patrick Kennedy says he was driving under the influence, not of alcohol, but of some prescription medications. The Rhode Island Democrat, son of Senator Ted Kennedy, crashed his car into a Capitol Hill security barricade about 3:00 a.m. Thursday. Kennedy claims he was taking Phenergan for some stomach problems, along with the sleep drug Ambien. Kennedy reportedly staggered as he got out of the car and told officers he was late for a vote.

Two investigations now under way, one into the accident itself, the other into the Capitol Police response. Officers on the scene did not give Kennedy a field sobriety test. The congressman denies he asked for any preferential treatment.

Defense Secretary Donald Rumsfeld, already fighting off calls for his resignation, facing an attack on another flank. Rumsfeld, in Atlanta for a speech, heckled by some in the audience who oppose the war in Iraq. One person saying he needs to be in prison for war crimes.

Then a former CIA analyst and war critic, Ray McGovern, stepped up to the microphone and asked him about his previous claims of weapons of mass destruction in Iraq.

(BEGIN VIDEO CLIP)

RAY MCGOVERN, FORMER CIA ANALYST: Why did you lie to get us into a war that was not necessary and that has caused these kinds of casualties? Why?

DONALD RUMSFELD, DEFENSE SECRETARY: Well, first of all, I haven't lied. I did not lie then.

(APPLAUSE)

RUMSFELD: I'm not in the intelligence business. They gave the world their honest opinion. It appears that there were not weapons of mass destruction there.

MCGOVERN: You said you knew where they were.

RUMSFELD: I did not. I said I knew where suspect sites were, and we were...

MCGOVERN: You said...

RUMSFELD: Just...

MCGOVERN: You said you knew where they were, near Tikrit, near Baghdad and north, east, south and west of there. Those are your words.

RUMSFELD: My words -- my words were that -- no, no, no, wait a minute, wait a minute. Let him stay one second. Just a second.

MCGOVERN: This is America, huh?

(APPLAUSE)

RUMSFELD: You're getting plenty of play, sir.

MCGOVERN: I'd just like an honest answer.

RUMSFELD: I'm giving it to you.

(END VIDEO CLIP)

M. O'BRIEN: So what did he really say? The date was March 30, 2003, early days of the war. Rumsfeld appeared on the ABC News program "This Week." He was asked where the weapons were.

(BEGIN VIDEO CLIP)

RUMSFELD: We know where they are, they are in the area around Tikrit and Baghdad and east, west, south and north somewhat.

(END VIDEO CLIP)

M. O'BRIEN: Of course in the run-up to the war, members of the Bush administration repeatedly cited evidence Saddam Hussein possessed nuclear, chemical and biological weapons as a justification for the invasion. No such weapons have been found in Iraq.

Meanwhile, more ominous predictions for Iraq, one retired general predicting a serious crisis there for another two years. And General Barry McCaffrey says U.S. combat troops will be needed there for at least five more years. McCaffrey out with a memo that concludes U.S. strategy is painfully but gradually succeeding. He says success in Iraq will take 10 years and require more money and -- for reconstruction and security. McCaffrey led the 24th Infantry Division in the '91 Gulf War.

S. O'BRIEN: A pretty pointed swipe at Moscow from Vice President Dick Cheney spurring now what some people say could be a new Cold War. During a summit in Lithuania, Vice President Cheney accused Russia of using energy as a weapon to interfere with democracy.

(BEGIN VIDEO CLIP) DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Other actions by the Russian government have been counterproductive and begin -- could begin to affect relations with other countries. No legitimate interest is served when oil and gas become tools of intimidation for blackmail.

(END VIDEO CLIP)

Senior international correspondent Matthew Chance live for us in Moscow this morning.

Strong speech, tough speech, what's the reaction there this morning?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Very strong, very tough and it's provoked a very angry reaction, not just amongst the Russian media, but by Russian politicians, past and present, as well.

Most notably perhaps, former President Mikhail Gorbachev, the former president of the Soviet Union, of course. He issued a statement saying that "Cheney's speech looks like a provocation and interference in Russia's internal affairs in terms of its content, form and place."

The Russian media has also been outraged as well with these comments from the U.S. Vice President Dick Cheney. Russian State Television carrying commentators saying that they believe that the remarks were perhaps intended to put more pressure on Russia to follow the U.S. position.

But when it comes to its negotiations in Iran, certainly there are big obstacles, big differences between the position of Russia and the United States when it comes to dealing with Iran. Both have very different relations with this country.

Whether or not these comments are intended to pressure Russia to comply more with the U.S. position remains to be seen. But certainly Dick Cheney's remarks among the strongest we've heard from U.S. officials about Russia to date.

S. O'BRIEN: The relationship, Matthew, as you well know between Russia and the U.S. has often relied on sort of ignoring the glaring differences. Has that gotten worse over time?

CHANCE: It certainly seems to have been the case over the past several years. Since 2000, of course, when President Bush first met with Vladimir Putin, the Russian President, said he looked into his eyes and saw a straightforward man, said he caught a sense of his soul back then. The two seemed to be very close allies when it came to fighting the war on terror.

Since then, all sorts of differences have emerged between the two countries over supporting various undemocratic regimes in the region. Just recently, of course, Russia invited Hamas to talks in Moscow, something that put further relations under strain. S. O'BRIEN: Matthew Chance for us this morning.

Obviously everybody is going to be watching this to see what the next step is.

Thanks, Matthew -- Miles.

M. O'BRIEN: This just in to CNN, the British Foreign Secretary who helped Prime Minister Tony Blair make the case for the invasion of Iraq is out. Jack Straw gone and Mr. Blair on the political ropes. He has picked a new foreign secretary after major losses for his Labor Party in yesterday's local elections. Margaret Beckett will replace Mr. Straw.

Two Australian miners have been trapped for more than a week now about a half-mile underground. Rescuers are carefully working to widen a tunnel to free them.

Jeremy Pudney back with us now. He's with our Australian affiliate Channel 10 live outside the mine in Beaconsfield, Australia.

Jeremy, how long will it be before they get to the surface?

JEREMY PUDNEY, AUSTRALIA'S CHANNEL 10 REPORTER: Well, Miles, it's still difficult to say and officials aren't giving much away. But what we do know is that drilling of a one meter rescue tunnel is well under way now.

And the educated guessing that's going on around here is Friday night local time, and we believe that it could be some time during the day or evening on Saturday when these miners are finally brought to the surface. Of course they've been a half-mile underground now for almost 11 days.

M. O'BRIEN: Jeremy, tell me about their spirits, what's being done, how much communication back and forth with the ground?

PUDNEY: Well, for the first two or three days, they had absolutely no communication with rescue crews and there was absolutely no idea, no indication that they were still alive. But that was established several days ago. And since then, the men have been in regular contact with their rescuers, in particular, with medical people, paramedics and also doctors.

There's also been some psychological assessment of them going on. One of the key outcomes from that is that they haven't been allowed direct contact with their family because it was believed it would be better in terms of their frame of mind that they have something to strive for, and being reunited with their family is that thing.

M. O'BRIEN: Interesting. So they are not communicating with their families. That's an interesting decision.

PUDNEY: Well that's right. They're being given indirect communication with their families only. They haven't been able to speak with them, even though a communication's line has been established. And it was perceived, as I said, that it would be better for them psychologically to not have that and to keep something to look forward to. The line is being kept open, really, only for rescue crews and medical staff to speak with the men.

M. O'BRIEN: And they've got some music, too, right?

PUDNEY: That's right, some iPod music players were sent through to them a few days ago and they even got to choose the type of music that was downloaded onto that. They chose the Foo Fighters, or one of them did. And in fact, they have received a message today from the lead singer, Dave Grohl, a message wishing them well.

M. O'BRIEN: All right. We all wish them well. Keep us posted.

Jeremy Pudney with our Australian affiliate Channel 10 in Beaconsfield, Australia -- Soledad.

S. O'BRIEN: Still to come this morning, you heard yesterday, Masha Allen, that little girl, 13 years old, talking about her terribly painful story, how she was abused by her adoptive father. Well now lawmakers are trying to do more to protect children. We're going to take a closer look at what they are proposing coming up next.

M. O'BRIEN: And then high gas prices hitting consumers at the pump, but it pinches in other ways as well. Carol Costello will explain in about five minutes.

S. O'BRIEN: And then there is that other round of severe storms hitting parts of Texas and the Midwest. We'll take a look at that, or Chad will. That's coming up at 24 minutes past the hour.

First though, a look at what else is making news on this Friday morning.

(COMMERCIAL BREAK)

M. O'BRIEN: Checking the top stories.

The cost of a World Trade Center memorial in New York skyrocketing, there's word the price tag has doubled to nearly a billion dollars.

A possible breakthrough in peace talks in the troubled Darfur region of Sudan. The main rebel group has agreed to sign the latest version of a peace deal. Question now, will it force the other two rebel leaders to be more flexible?

And the U.S. Senate is cracking down on sex offenders. Lawmakers have approved a bill creating a national sex offender registry. It replaces the state-by-state system currently in place -- Soledad.

S. O'BRIEN: Checking the CNN gas gauge this morning, the national average, $2.92 a gallon for regular unleaded. A month ago, it was $2.59. Last year, $2.21.

You'll recall that last week we visited a gas station in Brooklyn, New York. Remember the prices were some of the highest around.

David Goldsmith is the owner of that gas station. He's back with us this morning.

You're holding up a chart and my eyes aren't good enough to see it, David. What are -- what's -- you're down a little bit, right?

DAVID GOLDSMITH, GAS STATION OWNER: We went down a little bit this morning. And my customers will feel a little bit of relief. But as you can see at this tiny station, it's still pretty high and it's really brought our sales down considerably. I mean all the retailers are hurting. As a...

S. O'BRIEN: Because the prices are high, not because you dropped it a penny?

GOLDSMITH: Yes. No, I mean, because prices in general are high and the retailers are selling less volume and our customers are hurting. A lot of small businesses, you know their people are talking. I mean, a lot of -- the anger and the hurt isn't directed at guys like me. People understand the position that we're in, but nevertheless, people are in trouble.

S. O'BRIEN: Yes, I think that -- you know I think you've sort of summed it up in a nutshell. Listen, David, we're going to check in with you throughout the morning because we've got lots of questions to talk about.

GOLDSMITH: OK.

S. O'BRIEN: But in particular, you know where do you -- how do you account for that penny? I mean, why is it going down a penny? Nothing seems to ever...

GOLDSMITH: Well...

S. O'BRIEN: But you know we're not going to get to it now, we're going to talk about that in a little bit and throughout the morning, -- David.

GOLDSMITH: OK.

S. O'BRIEN: David Goldsmith, again, as we check in with him from Brooklyn all morning.

GOLDSMITH: Right.

S. O'BRIEN: And you know of course the gas pump isn't the only place you're taking a hit, many companies, especially those that have delivery service, are now tacking on gas surcharges.

Let's get right to Carol Costello. She's in the newsroom with more this morning.

Hey, Carol, good morning. CAROL COSTELLO, CNN CORRESPONDENT: I'm still getting over the look of those prices, more than $4 a gallon. It just makes my heart start beating faster.

Anyway, if you've been wondering why that pizza costs you so much money these days, if it takes gas to deliver your goods, you're going to pay more.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): You know you're paying more at the pump, but you may not know that it's also costing you elsewhere. For example, if you order a pizza from Michael's Pizzeria in West Caldwell, New Jersey, a pie that used to cost $11.55 will now cost you $13.55. Why the increase? To pay for fuel.

MICHAEL STANZIONE, PIZZA SHOP OWNER: It's an additional $2. We usually charge $1. Now from $1 we raise it to $3.

COSTELLO: Michael raised his delivery charge about six weeks ago and says all the money goes to his drivers.

STANZIONE: The delivery guys, they use their own gas. And you know they always come back to me, we need to get a few extra dollars, you know, to make them happy.

COSTELLO: Pizza places, florists, even plumbers, anyone who delivers things is passing along the high price of gas.

Richard Fertel runs a plumbing business. He added a fuel surcharge last fall.

RICHARD FERTEL, PLUMBING COMPANY MANAGER: We tacked on, it was $5 at that time.

COSTELLO: Recently he had been thinking about lowering that surcharge, but now...

FERTEL: We are thinking possibly of raising it as gas prices are going to start to go up.

COSTELLO: Richard says he's not just feeling the burden of filling up his nine vans, he's paying more for supplies, too.

FERTEL: Plumbing suppliers, heating suppliers, the gentleman who does the landscaping in my house.

COSTELLO: Michael tells the same story.

STANZIONE: My food suppliers and my produce people and then I have my bright (ph) guy, too, they charge me extra fuel.

COSTELLO: Both say their customers have questioned them about the surcharges, but understand their explanations. While Richard says he may raise his surcharge again, Michael has some encouraging news. STANZIONE: I don't think that we'll go higher. You can't charge what you know five potential dollars for fuel on a warm pizza that it costs -- it has $10 down (ph).

COSTELLO: And he says this is temporary. When gasoline prices drop, his delivered pizzas will cost you less dough.

(END VIDEOTAPE)

You know, though, I'm a cynic, because some companies are very, very slow to rescind those surcharges, because if they find that customers are willing to pay the price, why rescind the charges? Isn't that good business in the long run?

S. O'BRIEN: Yes, but it's no longer a surcharge, it's a price hike, which is a totally different category.

COSTELLO: Exactly. But if customers are willing to pay it, why not keep it?

S. O'BRIEN: Yes, I'm totally following you.

Thanks, Carol -- Miles.

M. O'BRIEN: Why is it always a surcharge, not a man-charge, you notice that? Anyway. All right.

A new jobs report is coming out today.

Andy Serwer is here with a preview.

Hello, -- Andy.

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning to you guys.

It is the first Friday of the month and that means it's jobs report time for the previous month. So of course we're talking about April. Economists looking for a number of 200,000 jobs-plus to be added in the last month.

March, you may remember, we added 211,000 jobs. And this is well above the average clip of 2005 where we had 171 jobs added on average.

First quarter, we had the strongest growth in two years, so that's why we're looking for strong job growth. Unemployment rate expected to hold steady at 4.7 percent. And we'll be telling you about this shortly after the report comes out at 8:30 Eastern.

Related story, the federal budget deficit is expected to be less than previously forecast. That's mostly because of taxes paid by wealthy Americans. And a lot of that would have to do with the economy improving.

Previously, we were looking at a deficit of as much as $423 billion for this year. Now we're looking at a lot less, maybe $350 billion, maybe $300 billion, this according to the Office of Management Budget and the Congressional Budget Office. In 2005, we had a budget deficit of $318 billion. Still a lot of red ink, but maybe not quite as bad as anticipated previously.

S. O'BRIEN: That's a good spin. We'll take it.

SERWER: Yes.

S. O'BRIEN: All right. Andy, thank you.

SERWER: We try harder.

S. O'BRIEN: Yes.

M. O'BRIEN: Andy, see you little bit later. Thank you.

SERWER: See you later.

M. O'BRIEN: Coming up on the program, Congressman Patrick Kennedy in a car accident on Capitol Hill. He blames prescription drugs, but police never did a sobriety check. Did he get special treatment?

Plus, nasty weather across the Midwest and the South, severe flooding in some parts. Chad has the forecast for you next on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: More stormy weather and flooding in the Midwest to tell you about. This is Broken Arrow, Oklahoma, where up to five inches of rain came down in just a few hours. Some drivers had to be rescued. Water trapping them in their cars.

In central Arkansas, up to four inches of rain already have fallen in the area. Rivers overflowing, creating a road mess, as you can see. Flood warnings in four counties in effect until 5:00 this evening.

In Texas, severe storm warnings expiring right now. Residents in Houston and other parts of the state saw hail up to two inches in diameter.

And whenever we talk about big hail, we bring in Chad Myers -- Chad Myers.

MYERS: Yes, the hail as big as your head. There were some four inch numbers out there. Some softball-sized hail again. I mean I haven't seen a year where there has been so many reports and there have been so many reports of softball-sized hail one day after another after another.

I mean maybe there are just more storm chasers out there finding these hailstones. And they've been falling in the middle of nowhere, although you can't say that if you live there. Middle of nowhere back out in west Texas somewhere. Maybe we now know about these storms because people are driving under them looking for this hail. I hate to look at the car.

(WEATHER REPORT)

S. O'BRIEN: All right, Chad, thanks.

MYERS: You're welcome.

S. O'BRIEN: Thanks for watching them.

The morning's top stories are straight ahead this morning, including the investigation into Congressman Patrick Kennedy's car crash. He says he wasn't drunk, he was medicated, but did the cops give him special treatment? We'll take a look at that.

And Vice President Dick Cheney criticizing Russia's energy policies. Could this be the beginning of a new Cold War?

Those stories ahead on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

M. O'BRIEN: Checking our top stories.

Iran's Ambassador to the United Nations charging the U.S., Britain and France are the ones creating an atmosphere of tension. He says their calls for Tehran to stop uranium enrichment is what is provoking confrontation.

Working towards a deal in Darfur. The largest of three rebel groups has accepted a peace agreement. Two other groups, though, have turned it down. The talks go on, nevertheless, despite a missed deadline.

In England, meet a 63-year-old mom-to-be and her husband. Patricia Rashbrook already has two grown children. She had fertility treatments and she's due in two months. The woman is defender her

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