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On the Story

New Warnings of Hijack Plane Attempts Open Questions of Governments ability to Defend against them; Saddam Hussein's Daughters Give Different Prospective on Saddam Hussein

Aired August 02, 2003 - 10:00   ET

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

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


CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week. I'm Candy Crowley on the story of high political drama playing out in California, the recall election, and the unknown final act for the governor and his challengers.
JEANNE MESERVE, CNN CORRESPONDENT: I'm Jeanne Meserve on the story of new warnings that terrorists might try again to hijack jetliners and whether the government and the rest of us are prepared.

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: I'm Jane Arraf on the story of our interview with Saddam Hussein's daughters, their escape from Iraq, and their description of a loving father with a big heart.

JOSIE BURKE, CNN CORRESPONDENT: I'm Josie Burke in Eagle, Colorado, on the story of the Kobe Bryant sexual assault case and the small town that's preparing for a court appearance by the NBA superstar in just a few days.

MARIA HINOJOSA, CNN URBAN AFFAIRS CORRESPONDENT: I'm Maria Hinojosa on the story of 25 years since the environmental cleanup began at Love Canal and how some people now call it home.

KATHLEEN HAYS, CNN FINANCIAL CORRESPONDENT: And I'm Kathleen Hays on the story of how the Bush economic team used a two-day bus tour through the heartland to say the plan for recovery and new jobs is working just fine.

Also coming up, is Howard Dean really the front-runner, and if so, so what? Will gay marriage become the domestic issue of campaign 2004?

And we'll listen to the president's weekly radio address at the end of the hour.

We want you comments, so e-mail us at onthestory@cnn.com.

Lot's ahead. And we start with Jane Arraf and the dictator's daughters.

ARRAF: In an interview with Saddam's daughters, Raghad and Rana Saddam Hussein, 35 and 32, not exactly what we expected. In fact, nothing at all like what we expected. They described a loving father. They said that he had a big heart. And asked if they had a message for him, they said that they wanted him to know they loved him and missed him. Now they likely don't know where he is, but they did describe a very different man from the man whose picture we're normally used to hearing about -- Candy.

CROWLEY: You know, Jane, I'm willing to take that even a brutal dictator can have love for his family. But this is a man who killed their husbands. How much of this do you think was fear, how much of it was genuine? What was your feel for it?

ARRAF: I thought a lot of it was really quite genuine in that sense that human emotion is incredibly tangled. When I asked them about the discrepancy between this man they were describing, this loving father who put them on the road to the right path, who taught them things, who always listened, and the man who was widely believed to have been directly responsible for killing their husbands, they said, well, yes, that was an issue. But essentially, the older daughter, particularly, was quite eloquent.

She said, "Our father is in a very difficult situation." Now, clearly, they are worried that he is going to end up the same way their brothers ended up, shot somewhere. And they said he is in a difficult situation and he would not like his daughters to be at war with him at this point. Clearly, they do not want this to become an issue of them attacking their father.

But that emotion, where they were telling us that they loved him and they missed him, you can't really fake. These are not women who are practiced at interviews. This was -- they gave only two interviews, they're believed to have given only two interviews in their entire life, and that part of it...

BURKE: Jane, I want to follow up on that. Have you ever interviewed them before in years past?

ARRAF: No one has. They have been a complete mystery, all of these women, including the mother. The mother and the daughters, you occasionally saw photographs of them, very stiff family photos. And now that these videos are coming out from the looted palaces, you see family videos, but nothing that would really give you a sense of them.

They were very, very protected to the point we don't know how many times Saddam has been married. I asked the daughters, was your father really married three or four times? And they said, "Well, we know he was married twice. As for the rest, we don't ask. He had a very private life."

HINOJOSA: Jane, I'm wondering about the issue of honor. And one of our terror analysts was saying that when you have a family like this, and the daughters separating like this, that this really is a question of how this impacts the honor of the family. Is that another one of the reasons why they're being so kind of supportive of their dad and saying that they loved him so much? And, really, is there that possibility as well that somehow they really worry that they could, in fact, be killed for leaving? ARRAF: Certainly, that issue of honor is very important in any Arab family, any Middle Eastern family. But it's not really something that would compel them to speak out in that way. They could have, as they did with their brothers, for instance. Their brothers was a very different story.

Uday and Qusay really were responsible, it's believed, for killing their husbands. Their father signed off on it; their brothers were directly implicated. Now when asked about them -- because this must be a tangle of emotion. These women were wearing mourning clothing.

Although, at some point, they must have -- presumably hated their brothers, they were still their brothers. And when asked about them, how they felt about hearing they were dead, they said it was too painful to talk about, the wounds were still too raw. They could very well have said the same thing about their father, but clearly they saw a side of their father and only that side which was as simple as a loving father who treated them very, very well.

Now the issue of honor is wider in Jordan. Essentially, they asked the royal family for protection and they're women and children and they couldn't say no here. So they have a much brighter future ahead of them.

HAYS: Jane, give us a sense of what prospects now these women have for their lives. Their ruling family is gone. They're in Jordan, they're staying with the royal family. Do they have money from the old regime? What kind of life can women like this lead now?

ARRAF: I think these women are really extraordinarily lucky. I mean, they've had a terrible time. They have had lives that none of us would envy. They've been widows.

They were married at 15, by the way. Married at 15 and they have nine children between them. They're 35 and 32.

Their husbands were widowed at the hands of their own families. They were widowed, their husbands killed. Their brothers killed in a shootout. But now they've come here.

They are under the protection of a very gracious and apparently loving ruling family here who has welcomed them as family, the same way they did in 1995 when they fled here with their husbands. They could not have found a better place to seek refuge. They are well protected, they're taken care of.

Interesting question, do they have money. Presumably, their husbands have a lot of money. It's not clear they have access to it. They do not seem to have a lot of money in recent times and they didn't come with a large (UNINTELLIGIBLE). But here, certainly they're certainly they're cared for, protected, and even loved, it seems.

MESERVE: Jane, you mentioned that they hadn't given interviews before. Why did they give these interviews? ARRAF: Part of it was that they knew, and the people protecting them, the royal family here, knew that until they gave interviews, until the world saw them, they would be hounded. People would want to know what they felt about their father, whether they knew where their father was, what kind of women these were.

Now they were really apprehensive at first. These are well- educated women, very well spoken. But in mourning, and not used to giving interviews. They really were reluctant to speak until they spoke about something like their father that was so near and dear to their hearts.

Now, as for the other side of it, it's probably a good thing that the world has seen them. One would have imagined, as I did, without having spoken to them, that these would be really quite strange and unappealing people, the daughters of Saddam Hussein. In fact, it's the very opposite. They evoke sympathy. And certainly, there's much more sympathy now for the Jordanians, even among the people who hated Saddam, having seen these women and seeing that they really appeared to be innocent victims in a sense.

CROWLEY: Jane, let me ask you -- and you may just have answered it -- but what surprised you -- I mean, you cover that region all the time, you're so familiar with it. What surprised you about these women as Iraqi women?

ARRAF: I suppose the thing that surprised me, which is not peculiar to Iraq perhaps, but peculiar to that kind of system they had in Iraq, that dictatorship, very closed, where they were kept out of sight, they were given any material thing they could ever want, but they had a really very strange life. It was that they described their lives as normal. Before their husbands were killed, they said they had normal lives, they had loving families.

They were all very close, the brothers and sisters. They said they were happy in that sense. And what surprised me as well is they managed to emerge from this with a lot of their strength intact, if you will. I mean, these are very tough women. Perhaps they get that from their father, perhaps they get it from their mother, who's still out there. But the character of them was surprising and fascinating.

BURKE: Jane, how intensely are these women going to be interrogated over the next couple of weeks?

ARRAF: If the Jordanians have anything to do with it, not at all. They make clear that they are here under their protection, this is a refuge for them. I asked them whether they would answer questions from the Americans, and they made clear that they didn't know where their father was, where their mother was. They hadn't seen any of them since just before the war, in a very dramatic meeting.

They will likely be questioned at some point, because they could provide fascinating insights into the father and other members of the family. But probably no more than that. They are seen pretty well as victims, the women and their nine children.

MESERVE: Jane, thanks. And what's on the story for you in the coming days?

ARRAF: Well, I'm headed back to Baghdad. This was a brief diversion, Saddam's daughters. And I'm going back to that story of the hunt for Saddam Hussein himself, as well as trying to repair that very shattered country -- Candy.

CROWLEY: Jane, thanks.

And from the aftermath of the war in Iraq to the continuing war on terrorism in the U.S. and around the world, I'm on the story of new terrorism warnings this week. And we'll be back in 90 seconds.

ANNOUNCER: Jeanne Meserve is a correspondent in CNN's Washington bureau. She joined CNN in 1993 and covers homeland security for the network. She's a former correspondent for ABC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY DIRECTOR: After Flight 93, it is doubtful that any group of passengers would let any would-be hijacker take over their plane.

(END VIDEO CLIP)

MESERVE: Homeland Security Director Tom Ridge this week, just one of many talking again about the risk of suicide hijackers. And in a very bad case of mixed signals, the federal government found itself talking about possible cuts to the air marshal program at the same time it was warning about this new hijacking threat. In the end, the uproar was so intense, that they started talking about ways to beef up the program, rather than cutting it.

HINOJOSA: Jeanne, can you just -- I know that you're in this all the time, but some of us who are not in it all the time just don't get how we can be getting this contradictory message, where they were going to be cut funding for the air marshal's program? What are they thinking? I mean, what's the broader picture? Are they saying, two years later, we're making progress, therefore we can actually some of these programs?

MESERVE: No. What they're facing in the Transportation Security Administration, which runs the air marshal program, is an incredible financial crunch. This was an organization that was started up from scratch. They didn't have any real way of estimating how much money it was going to take, what kind of personnel they'd really need. And they find themselves with a $900 million budget deficit. And they are scrambling to move money around within that organization to try and bridge the gap.

They did propose -- there was a letter that went to Congress on Friday, last Friday, which is after this threat information had been developed, asking to reprogram $104 million from air marshals. Now they claim that money would not have effected how many air marshals were deployed. That it would have effected things like training. However, they are now acknowledging that there was indeed some sort of memo that went out during the week last week indicating that schedules were going to be changed and it was going to be because of financial constraints. So they're in a tough situation. Clearly, what they're saying now is that the person who made that comment about switching around schedules wasn't aware of the threat information. Had they been that never would have happened.

CROWLEY: Speaking of mixed signals, I remember when you got this story and came in and aired it during "INSIDE POLITICS". And it was frightening, you now? People and they may -- and they may pretend. And I got to thinking, oh, my gosh, and yet they didn't raise the threat signal. I don't get that.

MESERVE: Well, it is a little bit confusing, but here's their explanation for why they aren't doing it. First of all, they don't like to raise it, they don't like to monkey with it because it cost a lot of money and it causes a lot of anxiety on the part of the American people. But secondly, they say this was fairly specific threat information relating to one industry, an industry which we all know is effectively on a different threat level than anybody else and everybody else anyway.

So they felt that by sending out this advisory, and some specific directives about what airlines should do to beef up security, they were addressing the issue. And this advisory did go out. We know now that they're particularly concerned about transit passengers, that is people who are flying in and through the U.S., just making a connection here.

They've asked that organizations and airlines overseas give those people scrutiny, look particularly at the insoles of their shoes, even remove the insoles to look inside, look more carefully at the electronics and their garments. Part of that because that advisory did contain information that hijackers might try to take commonly carried objects and modify them, weaponize them.

BURKE: Jeanne, how close is that transit passenger program to ending? And what effect will that have on the industry, the airline industry?

MESERVE: It's very close, we believe. They've been talking about it for some time. They were talking about it a lot more this week. We think it is very imminent, indeed.

As for the impact, it is going to be felt. You know that the airline industry's already on the rope (ph). Several carriers already talking about potentially going out of business. The one that will be most impacted by this is American Airlines. But this isn't huge numbers of travelers we're talking about it.

Last year was an exception because one of the programs was suspended for a little while. The year before that, it was close to a million and a half people transitting the U.S. And if they make the change, when they make the change, what's going to be really interesting to watch is what is going to happen at airports around the world. You know, what kind of advance notice there is going to be, because people are going to have to be rerouted.

They're going to have to be rerouted. All travel plans that you may have made...

(CROSSTALK)

HAYS: (UNINTELLIGIBLE) as it at the airports.

MESERVE: That's right.

HAYS: One of the other big stories you covered this week, though, was the computer glitches, the student visas, trying to keep track. But you have pointed out that they're looking at a very tiny portion of the immigrant visas here. There's lots of people. Who's keeping track of them?

MESERVE: Well, they're trying to keep better track of all of them. But it's true, the student visas account for only two percent of the temporary visas issued in this country. It is a small proportion.

They are trying to beef up visas for the other 98 percent. Eventually, they say there is going to be a comprehensive entry and exit system so they can keep track of everybody who comes in and when they leave. However, you still don't know what they're doing when they get here, do you?

I mean, someone can comply with the terms of their visa. They can say, for instance, "I am a student." They can go to a university, they can attend classes, and who knows what they're doing in their off hours. So we should never believe that even an entry and exit system, although certainly a big improvement over the situation we have now, is going to be anything like a foolproof system.

HINOJOSA: You know, Jeanne, I'm thinking this whole story kind of brings me back to the city hall shooting that happened here in New York City just a couple of weeks ago in the sense that we're supposed to have all of this high-security in place, and yet there are these things that happen. And I have to say, I was on a plane this week after this information had been given. I didn't see anyone checking cameras at all in any particular sense. So do you kind of say, well, yet again, this is just a situation where we don't really know and we just can't really be that prepared at anytime, really?

MESERVE: Well, in the case of the advisories that went out this week, it pertained principally to those transit passengers originating at destination overseas. So you would not necessarily have seen it, although they do say that domestic passengers who come up for random screenings or who set off metal detectors, they, too, will undergo a little bit more scrutiny now than they would have a week ago.

As to whether we're ever prepared, no. I mean, we just can't be. There are too many potential target.

Everywhere I look, someone now who is immersed in this new subject, every time I go to the new city I look around and say, oh my gosh, they could do A, B, C, D, E, and F. And we all know it probably wouldn't be that hard to do it.

It's impossible to protect every one of those targets, be it aviation, or bridges and tunnels. You just can't do it. The real solution to this, people tell me, is intelligence. That's how we have to get a handle on this. We have to know exactly what people are doing, and the United States probably has to do more to win some hearts and minds overseas.

BURKE: We're going to turn our attention now away from that to Eagle, Colorado, right here in the courtroom drama that's already unfolded and the one that will unfold when Kobe Bryant comes to town in just a few days. All of the details on this case when ON THE STORY comes right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Everybody within our community knows the real accuser, so they knew that it was the wrong girl being posted on the Internet.

(END VIDEO CLIP)

BURKE: That's Kate Lovell (ph), the young woman whose picture was posted on the Internet, even though she is not the alleged accuser, not the 19-year-old woman in the small community who is accusing Kobe Bryant of sexual assault. And what she went through, just an indication of how overwhelming this case has become.

And I want to share with you, ladies, one thing that was interesting. In a case like this, and looking over legal documents, you don't often get a chance to chuckle a little bit. But that's what happened this week.

The district attorney filed a motion for a continuance of the hearing about whether to unseal the court file in this case. And part of his argument was that the media lawyers looking to unseal that court file sent so many pages to his fax machine that the fax machine broke, a repairman had to be called, and therefore, that was one of the reasons he gave for why they wouldn't be prepared. That hearing, though, did go on as scheduled, and it didn't look like the fax machine breaking down real inhibited them from making their arguments.

HAYS: So, Josie what is the significance of things like unsealing the documents, the significance of the fact that the prosecution's gotten a much bigger budget now to fight this case?

BURKE: Well, let's talk about unsealing the documents first. The one thing that would come out of that is, we've heard Kobe Bryant's version of what he thinks went on that night in that hotel room. Contained in the court file would be interviews that the alleged victim did with investigators, and that would contain her version of what she believes went on that evening.

And then to get back to the fact that the prosecution did go after (ph) two things this week. They got their budget increase; they have $2 million a year. They got an extra $150,000. And they did go out and add one deputy district attorney from a different county who's an expert in domestic violence and sex crime.

She's coming on board, and it just shows they're really beefing up, they're taking this seriously. They know that originally they probably weren't prepared to handle a case of this size, but they're doing everything they can so they can keep it here and that they can compete.

HINOJOSA: Josie, I know you are focused on all of the details and the intricacies being there, but there are a lot of people -- interestingly, a lot of women -- who say that they are feminists and interested in women rights, who just say that they are zoning out on this case entirely, that it feels yet again like another three ring circus. And I'm wondering whether or not there's an understanding of these cases kind of numbing pro-victim rights, because it's just like, oh my god, here we go again and again and again. Is there any talk about that while you're in that central place there?

BURKE: Well we're here, Maria, and there's so much focus on the atmosphere and everything that's going around. You feel like it's the center of the universe, that people are really focused on what's happening. If you look at search engines, the way they count, how people are looking things up, it shows there, that people are really interested. But I think there is a sense that, why is there so much interest?

And clearly, the answer, there is so much interest in this case because it involves Kobe Bryant. The people who are interested in victims' rights probably have a very legitimate gripe there, that we're focusing maybe on the wrong issues and maybe this isn't the case that is going to forward women's rights.

CROWLEY: Josie, let me ask you, I've looked on the Internet and there's some vicious stuff out there about the alleged victim. And we just heard in that sound bite about how everybody in town knows who the accuser is. What is life like for her?

BURKE: Well, from what we're hearing, it's very, very difficult. We've been able to speak with some people who are close to the young woman. They tell us that just this week reality seemed to be setting in. The reality of what she's gone through physically and what she's now going through mentally what her life is like. And the greatest detail we can get into from the people we've talked to is that she's spending some time away from her home here in Eagle.

But one thing that's interesting, and you wonder how this is going to work, we've heard she is planning definitely to go back to school. She's going to be a sophomore at the University of Northern Colorado. And you have to wonder what her life is going to be like, because it is true, if you don't know who she is yet you will know in a couple of weeks.

It's a very small town here. She's become very well known. Kobe Bryant's planning on playing basketball. She's planning on going to school. It will be very interesting to see how both of the major players in this drama are treated when they go back to their home court, so to speak.

CROWLEY: Josie, now talk that there was a 911 call from Kobe Bryant's house while all this was playing out. Tell us about that.

BURKE: Well, this is interesting for two reasons. One, because there's been a lot of focus on 911 calls made from the alleged victim's home in the past 12 months. There's actually a motion before the court to get those documents unsealed. And just in the past day, we learned that there were a couple of 911 calls made from Kobe Bryant's home in New Port Beach, California.

The most interesting one -- and it's interesting not because we know all of the details, but because of the time -- it occurred in the wee hours on July 3rd. That's interesting because on July 2nd, Kobe Bryant was here in Colorado, submitting to DNA testing. And on July 4th, he came back to be formally arrested and post bond.

So he was in his home on July 3rd when all this was going on. The details are, a call was made to 911 from his home. It was a hang- up; they called back.

Bryant said that he'd made the call. The officers were dispatched, medical personnel. A woman lying in a bed was treated, but not transported to a hospital.

We don't know yet who that woman was. And we don't know if there's any connection. All we can say for certain is it's interesting because of the timing.

HINOJOSA: Hey, Josie, I'm just wondering again, kind of pulling back from the intricate details, is there any talk at all within your sports circles about, well, you know, this is what happens, or these kinds of things can happen when you're getting these 17, 16, 17, 18- year-old guys signed up to the NBA so quickly, that maybe there's some rethinking. Or am I just thinking that, you know, that's entirely impossible?

BURKE: Well, I think there's not as much talk about the young guys. There's a lot of talk about the culture and what it means to be not just an NBA superstar, but to be a professional athlete, what's available to you and what your lifestyle is like. And not to get into too much details, but there are a lot of things offered to these young men that are not offered to the community at large, a lot of temptation and things like that out there. And that's certainly a topic of conversation.

CROWLEY: Josie Burke, we're going to be hearing a lot from you, I suspect, on this story. Thanks, Josie.

From basketball and courtroom drama to one of the other big spectator sports, politics. The California craziness and the latest from the pack of Democratic presidential wannabes. I'm back on the story in a moment. ANNOUNCER: Candy Crowley is CNN's senior political correspondent. She's been with the network since 1987. The National Press Foundation honored her with the 1998 Dirksen Award for distinguished reporting on Congress. She received the 1997 Joan Shorenstein Barone Award for excellence in journalism for coverage of the Bob Dole presidential campaign.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. GRAY DAVIS, (D), CALIFORNIA: At the end of the day, I think people are going to say to themselves, is it really fair that we the taxpayers have to spend $60 million to have a special election this fall?

(END VIDEO CLIP)

CROWLEY: Governor Gray Davis says this is not the way we run democratic institutions in this country. His political foes, and maybe even some of his fellow Democrats, say, just watch us.

Welcome back. We're ON THE STORY.

What a great story this is. I mean, here we have a presidential election, you know, not around the corner, but we're really into high presidential season. But California is where it's at, you know, on the cutting edge of recalling governors.

I'll tell you, what's interesting out there is there really is this circus atmosphere around the people who are pushing for this recall. And, yet, we're talking about a state in huge trouble. I mean, it's $32 billion in debt and -- so it's this real serious thing taking place in this kind of sitcom. It's amazing.

(CROSSTALK)

BURKE: Candy, is it just a California circus, or are there some national political implications that we should be aware of?

CROWLEY: Well, there probably are implications. Right now there are very few national footprints at this point on California. The last time the White House got into California is when they backed Richard Riordan, who used be to the mayor of L.A., to be -- to run against Gray Davis last time and he lost.

So the White House sort of got burned on it and doesn't really want to get into this. Nationally, as Democrat, it's tough, because this is a very high-profile, sort of failing administration. On the other hand, you don't want to give up the seat. So Democrats have been stuck in this sort of game of chicken with Republicans.

They started out saying, we're not going to put anybody on the ballot. It's just going to be Gray Davis. Well now, this past week, we saw people going, well, maybe we ought to put a Democrat on the ticket just in case Gray Davis doesn't make it. So it's been really interesting.

It will have national political implications at some point. Like what is George Bush going to do when he goes out there? That's all he'll get asked about.

What are the '04 candidates going to do from the Democratic side when they go out there -- and they have to, because that's where the money is -- what are they going to do when they go out there? Are they going to stand next to Gray Davis? I mean, he's the most unpopular politician that California has had in quite a while. So it will be really fun to watch.

HINOJOSA: Hey, Candy, I'm just wondering, do you see this -- because you've covered politics for so long -- as a real exercise in the democratic process, or is this more of a Republican Party that's a minority in California using very wealthy Republicans like Congressman Isa (ph), from San Diego and conservative talk show hosts who are just basically creating their own agenda and using money to do it?

CROWLEY: Well, certainly that's the argument of the Democrats, saying, look, this is yet another one of those Republican power grabs. They can't win the old-fashioned way, and they using this.

Now, California has a recall law, as do about a dozen other states certainly in there. And recalls have been called on Ronald Reagan, on Pete Wilson. So there have been recall drives before. None has ever gotten this far.

Look, Republicans are in the minority here. And, certainly, this was started by a very wealthy Republican., Congressman Isa (ph). But the fact of the matter is that you had to collect an enormous amount of signatures, and they weren't all from Republicans.

Right now, some -- I think the latest poll I saw, Maria, was 52 percent say they'd vote to recall him. He's got to pick up a couple percentages in there. So there's more than just Republicans. But there's no doubt it started, absolutely, from a well-funded Republican base, that then spread out as the economy got worse.

HAYS: Well, of course we're already focused on the presidential election. Howard Dean, Candy, is he a blessing or a curse for the Democratic Party?

CROWLEY: You know, my cup runneth over. California, we have Howard Dean. You know, it depends on who you talk to.

I mean, the fact of the matter is that Howard Dean has touched a very raw nerve in the Democratic Party. They just want someone to tell George Bush to stick it. And they feel that all of the other Democrats have been wishy-washy, most of them voted for the resolution on Iraq.

Howard Dean was quite easy because he was never asked to vote. So he can say, well, had I been asked to vote, I would have said no. So he appeals, clearly, to a base that, A, really is upset with George Bush -- that is, the very -- the gung-ho Democrats. And, B, a lot of people who haven't voted before who just like his schtick.

So he, in one way, is really rousing the Democratic Party. Now, the conservatives or the middle of the road Democratic Leadership Council, says, look, we're going too far to the left and that's going to kill us. So the argument is, great, he's really popular in the primary, where the more liberal Democrats vote, but he's going to get creamed in the general.

Now, Howard Dean has proven every single prediction that we've ever had wrong. You know you have to call him the front-runner, and you have to give him props for that.

MESERVE: Now he's the former government of Vermont, home, of course, of civil unions for gays. Huge issue this week. Is that an issue that's going to last, and what does it say about the gay political movement?

CROWLEY: I think it says that the gay political movement is here. And we've had a lot of things that have brought gay marriage into the headlines. The Massachusetts case, the Supreme Court has nullified the Texas sodomy laws. So there are a lot of things that brought this up.

But the fact of the matter is that the Human Rights Commission, which is the largest gay lobbying organization, had a cattle call here in Washington, and they all came. And that says something to you about the power of the gay voter. I mean, not only do they tend to be financially secure, what that means is they've got a lot of disposable income here. They pretty much got Howard Dean off the ground. However, then you saw the president being asked this.

My prediction is that everybody's going to walk this very fine line, because only a couple -- and I know Carol Moseley-Braun was one. They were only two, and they were lower tier candidates, who said that they were for gay marriage. The rest of them talked about civil unions. Even Howard Dean will say to you, "I'm not for gay marriage." That word is very, very explosive, and that's where we're going to see the battle.

HINOJOSA: Well, thanks, Candy, for that.

From the world of politics to a world that was turned upside down 25 years ago. I went back to the New York community of Love Canal this week and found that the so-called cleanup is over, but the arguments are still fresh. I'm back on the story in one minute.

ANNOUNCER: Maria Hinojosa is CNN's urban affairs correspondent. She was born in Mexico and raised in Chicago. And she is host of National Public Radio's "Latino USA".

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We have the technology that proves that it's safe to be around the canal, you know, because we definitely have nothing to gain to tell people that they can't live a very prosperous life on this canal.

(END VIDEO CLIP)

HINOJOSA: Michael Basil (ph) of the U.S. Environmental Protection Agency saying that after 25 years it's safe for people to once again call Love Canal home. Welcome back. We're ON THE STORY.

And I have to say, I had never been to Love Canal. And I kind of expected that when we got near there might be some kind of sign that said, you're approaching love canal, or warning, toxic waste dump here. Nothing. No signs.

What was the actual toxic waste dump, 16 acres, is just cordoned off by a 10-foot high chain link fence and just one 6-inch sign that says, "Warning, stay off." But nothing else that says what happened here 25 years ago. So a lot of activists are very worried that there's a question of memory here, and trying to basically get rid of what happened here 25 years ago. A very, very strange, strange place to be.

MESERVE: Question of memory, indeed, Maria. I mean, who is buying these houses, and why are they buying them?

HINOJOSA: Well, what happened is, is that -- for people who don't quite remember -- and that's interesting as well, Jeanne. Actually, there are a lot of people who I would say -- just on the street or people that I know -- "I just got back from Love Canal." And they'd say, "Where?" So people didn't even remember.

You have to remember there were 240 homes that were built on top of this Love Canal area, along with a grammar school. All of that was evacuated 25 years ago when President Carter declared it an environmental catastrophe. Now they -- 10 years ago, they brought in an organization and they revamped all of these homes that had been abandoned and evacuated and they started selling them at rates that were, well, considered to be pretty good deals -- 20 percent off market price. There were some incentives that were given, lower mortgage rates.

So people that are buying them are people who need to buy inexpensive homes. Also, they believe profoundly that they are safe. So for them, when I asked them, what's it like to be living here, they said, "We love it, and we look out at that fence and we never think of Love Canal. We feel like we're living in a park."

BURKE: What are they doing, Maria, to monitor that site, to make sure it is safe?

HINOJOSA: Well, it is being monitored. The big news is that Love Canal is being taken off this super fund emergency environmental cleanup list. That means that basically the amount of attention and money that was placed there for the past 25 years is going to essentially be minimal. But they will continue to monitor at a rate of every five years. They go back.

And that's what the people there say. They say, we feel safe because we know that this is an area that's being tested. Now this area of New York, up by Buffalo and Niagara Falls, actually has a very high concentration of waste dumps. So a lot of people say, well, you know, we feel safer here because we know there are dumps down the road that are never getting tested. So the fact that we're getting tested all the time says we're going to be OK.

CROWLEY: So what happens, Maria, to these people? Let's say 20 years down the line we start getting another sort of Love Canal thing with children being sick and all that? What's their recourse?

HINOJOSA: Well, that's what one of the activists -- the key activist here Lois Gibbs (ph), who basically was the whistle blower in all this, this is what she says. She says the problem is, is that these people, if something were to happen -- and let's make it very clear, the 22,000 tons of toxic waste that were dumped in Love Canal in the 1950s by Hooker Chemical Corporation are not gone. They are still there.

What the EPA has done is basically sealed it, contained it. So the activists say we don't know what's going to happen in another 25 years from now. And they say the problem is, is that the people who live here now will have no recourse, according to the activists, because the government will say, you knowingly bought into these homes that you knew were near a toxic waste dump. So they worry that, while people got some reparations from the government before, if it happens again, it's basically, you signed on to this, you bought it, it's not our problem anymore.

HAYS: OK, we'll see. And of course if it doesn't happen again, they sure got good homes cheap.

Well, environmental disaster and recovery, hmm, some say the U.S. economy disaster is finally staging a recovery. I'm back on the story in just a moment.

ANNOUNCER: Kathleen Hays is a business correspondent for CNN. She hosts "THE FLIP SIDE" on CNNFN 11:00 a.m. to 12:30 p.m. She has a bachelor and masters degree in economics from Stanford University.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN SNOW, TREASURY SECRETARY: We're going to see very good results for '04 with growth rates over four percent and unemployment coming down.

(END VIDEO CLIP)

HAYS: Is it just a snow job from Treasury Secretary John Snow, with optimistic talk about what he thinks lies ahead: an expanding economy and fewer people hunting a paycheck?

Welcome back. We're ON THE STORY.

And I was on a bus this week for two days with a gaggle of reporters, following these three secretaries of the economy around. It was John Snow from Treasury, Don Evans from Commerce, Elaine Chao from Labor, trying to tell the world that we're getting better, everything's going to work, and getting some feedback from people.

The Harley Davidson plant is where this tour started out. And I swear, I've never seen seasoned reporters ask tougher questions than that audience did. I really think the team might have been a little bit surprised by the toughness of the questions they got.

CROWLEY: I have got a question for you, Kathleen. But I want to tell our viewers first that CNN has learned that Charles Taylor, the Liberian president who is under pressure from rebels, as well as the U.S. government, to get out of Liberia, has told CNN that he in fact will leave on August 11. The proof is in the pudding, of course. But that's the latest, again. Liberian President Charles Taylor says he will leave August 11th.

So, back to the economy. You know, I just got the feeling talking to these three, as you did, for the -- you know, all those days, that they still haven't glommed on to the unrest out there, the unease, unease out there.

HAYS: Well, you know, there was an instance -- Michael Retzer (ph), who runs a tool and die company out in that area of Wisconsin -- because there were a lot of suppliers. It wasn't just Harley Davidson and their workers -- who are unionized. And it's a great -- Harley Davidson is a success story.

So here's somebody who is listening and says, hey, I don't get it. We have this trade relation with China. They are selling $100 billion worth of stuff to us. We're only selling $20 billion back to them.

You're going to send tax checks out. How is that going to help the economy if people take those tax checks and go to stores that are filled with imported goods from China? And the answer was kind of a dodge answer. Well, it's going to work, things are going to pick up, people are going to take vacations, they're going to go to hotels and motels and restaurants. That's going to drive things ahead.

After that was over, I spoke to one of the workers there and he and a lot of people said, you know, I just don't feel like they answered my questions.

HINOJOSA: Hey, I'm wondering here, Kathleen, you know we just -- I got some statistics here from an organization called the National Employment Law Project, and they're saying that African-Americans are especially hard hit by unemployment. In fact, African-Americans are saying 11.8 percent unemployment, compared to whites at 5.5 percent. Was there any discussion at all about how different groups across the country are being hit differently by the issue of unemployment?

HAYS: You know, not really. But I will say, Elaine Chao at one of the stops did mention that she thought that in terms of job retraining and making sure that people go from jobs that are disappearing to jobs that are growing, how important it is to pay attention to various kinds of diversity. And it's not just racial diversity.

You know men have been particularly hard hit by this in many cases. We've lost nearly three million manufacturing jobs in the past three years. Those are disproportionately male; they're disproportionately highly-paid jobs with benefits, and that's the concern for a lot of people. Whatever your race, that if you lose those jobs and replace them with lower-paying jobs in the services sector, maybe you've got employment, but is it the kind of employment people really need and want?

BURKE: Kathleen two questions. One, certainly there was an agenda behind picking the two states they picked to stop in. Can you explain that a little bit more?

HAYS: Thank you for pointing that out, yes.

BURKE: And the other thing is, how big a presence did demonstrators make themselves feel?

HAYS: OK, first of all, Wisconsin and Minnesota are two states that Bush nearly lost in the last election. So obviously there was no mistake that they chose those two states. There was a group of demonstrators that followed around. And they said, hey, if the economy's doing so well and they're so confident, why don't they invite us into these forums? Because these work groups that were handpicked, they weren't open to the public.

Now, granted, security's an issue. And we had plenty of Secret Service guys around. There's one guy, John Forjon (ph), who actually managed to get Treasury Secretary Snow's attention at the Colver (ph) ice cream parlor, where the demonstrators were outside and the group had to move inside to hold the event. And he said that Snow told him, hey, look, things are going to work, it's going to be OK.

You know, to Snow's credit, he did speak to this man. But then later, John Andrews said, I'll call the bank up. I'll call Citigroup and say, can you just wait until things pick up for me to send my mortgage payment and my credit card check?

So a little bit of disconnect. But again, I give the secretaries credit for going out. I do think they heard some things maybe they weren't ready for, but it really remains to be seen if this has any impact on policy.

Now, they do seem very convinced, and maybe rightfully so. The economy's starting to pick up. Now there are some good signs out there, but it's still a little bit up in the air.

CROWLEY: And with that, time's up, I'm afraid. Thank to all of my colleagues, and thank you for watching ON THE STORY. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS". Focusing this week on Ben Affleck and Jennifer Lopez and a special tribute to Bob Hope. At 12:00 noon Eastern, 9:00 a.m. Pacific, "CNN LIVE SATURDAY". And at 1:00 p.m. Eastern, 10:00 a.m. Pacific, CNN's "IN THE MONEY". Coming up at the top of the hour a NEWS ALERT. But first, the president's weekly radio address.

(BEGIN AUDIO TAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Good morning.

This week, we received some encouraging news on the economy. The nation's economy grew faster than expected in the second quarter. Manufacturers are receiving more orders and their inventories need to be replenished. Home builders are busy meeting near-record demand, and retailers report that consumers are buying more goods.

Many economists expect that growth will accelerate in the coming months. Yet this week's employment report also shows that many Americans who want to work are still having trouble finding a job.

My administration is acting to promote faster growth to encourage the creation of new jobs. The key to job growth is higher demand for goods and services. With higher demand, businesses are more likely to hire new employees.

The best way to promote growth in job creation is to leave more money in the pockets of households and small businesses instead of taxing it away. So we lowered income tax rates, cut taxes on dividends and capital gains, reduced the marriage penalty, and increased the child tax credit. This week, the checks for up to $400 per child started arriving in the mailboxes of American families. That money will help American families move the economy forward.

We've also taken action to help small businesses who are the job creators of America. We increased tax incentives for equipment purchases, giving small businesses an additional reason to invest. More orders for machinery and equipment means more jobs, and more business investment can lead to greater worker productivity, which helps raise worker wages.

We're starting to see results from our actions. My administration's economists believe that if we had not passed tax relief, our unemployment rate would have been nearly one percentage point higher. And as many as 1.5 million Americans would not have the jobs they have today.

This week, three members of my cabinet, Treasury Secretary John Snow, Commerce Secretary Don Evans, and Labor Secretary Elaine Chao, visited business owners and their workers in the Midwest. They received reports the economy is picking up. Last month, I met with Mike Jendick (ph), who owns a part making company in Michigan called Metal Mike (ph).

Mike's customers are keeping him busier than he has been in three years, giving him reason to hire three new workers. Tax relief has given him reason to invest in new equipment to keep those workers productive. In Mike's words, "Tax relief can be the difference between making an investment or not." When small business owners like Mike make new investments, that can also be the difference between someone finding work or not. Tax relief is one part of my aggressive pro-growth agenda for America's economy.

When negotiating free trade agreements with countries to create new markets for products made in America, Congress need to pass a sound energy bill to ensure our nation has reliable, affordable supplies of energy, and Congress needs to let small businesses join together to purchase affordable health insurance for their employees.

We need legal reform to stop the frivolous lawsuits that are a drag on our economy. We have pushed Congress to make the child credit refundable for lower income families. And we're working to control spending in Washington, D.C. so that government spending does not rise any faster than the average household budget is expected to grow this year.

America's economy has challenges, and I will not be satisfied until every American looking for work can find a job. By steady, persistent action, we are preparing the way for vigorous growth and more jobs. I have confidence in our economic future, because I have confidence in the people whose effort and creativity make this economy run: the workers and the entrepreneurs of America.

Thank you for listening.

(END VIDEO TAPE)

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Governments ability to Defend against them; Saddam Hussein's Daughters Give Different Prospective on Saddam Hussein>


Aired August 2, 2003 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week. I'm Candy Crowley on the story of high political drama playing out in California, the recall election, and the unknown final act for the governor and his challengers.
JEANNE MESERVE, CNN CORRESPONDENT: I'm Jeanne Meserve on the story of new warnings that terrorists might try again to hijack jetliners and whether the government and the rest of us are prepared.

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: I'm Jane Arraf on the story of our interview with Saddam Hussein's daughters, their escape from Iraq, and their description of a loving father with a big heart.

JOSIE BURKE, CNN CORRESPONDENT: I'm Josie Burke in Eagle, Colorado, on the story of the Kobe Bryant sexual assault case and the small town that's preparing for a court appearance by the NBA superstar in just a few days.

MARIA HINOJOSA, CNN URBAN AFFAIRS CORRESPONDENT: I'm Maria Hinojosa on the story of 25 years since the environmental cleanup began at Love Canal and how some people now call it home.

KATHLEEN HAYS, CNN FINANCIAL CORRESPONDENT: And I'm Kathleen Hays on the story of how the Bush economic team used a two-day bus tour through the heartland to say the plan for recovery and new jobs is working just fine.

Also coming up, is Howard Dean really the front-runner, and if so, so what? Will gay marriage become the domestic issue of campaign 2004?

And we'll listen to the president's weekly radio address at the end of the hour.

We want you comments, so e-mail us at onthestory@cnn.com.

Lot's ahead. And we start with Jane Arraf and the dictator's daughters.

ARRAF: In an interview with Saddam's daughters, Raghad and Rana Saddam Hussein, 35 and 32, not exactly what we expected. In fact, nothing at all like what we expected. They described a loving father. They said that he had a big heart. And asked if they had a message for him, they said that they wanted him to know they loved him and missed him. Now they likely don't know where he is, but they did describe a very different man from the man whose picture we're normally used to hearing about -- Candy.

CROWLEY: You know, Jane, I'm willing to take that even a brutal dictator can have love for his family. But this is a man who killed their husbands. How much of this do you think was fear, how much of it was genuine? What was your feel for it?

ARRAF: I thought a lot of it was really quite genuine in that sense that human emotion is incredibly tangled. When I asked them about the discrepancy between this man they were describing, this loving father who put them on the road to the right path, who taught them things, who always listened, and the man who was widely believed to have been directly responsible for killing their husbands, they said, well, yes, that was an issue. But essentially, the older daughter, particularly, was quite eloquent.

She said, "Our father is in a very difficult situation." Now, clearly, they are worried that he is going to end up the same way their brothers ended up, shot somewhere. And they said he is in a difficult situation and he would not like his daughters to be at war with him at this point. Clearly, they do not want this to become an issue of them attacking their father.

But that emotion, where they were telling us that they loved him and they missed him, you can't really fake. These are not women who are practiced at interviews. This was -- they gave only two interviews, they're believed to have given only two interviews in their entire life, and that part of it...

BURKE: Jane, I want to follow up on that. Have you ever interviewed them before in years past?

ARRAF: No one has. They have been a complete mystery, all of these women, including the mother. The mother and the daughters, you occasionally saw photographs of them, very stiff family photos. And now that these videos are coming out from the looted palaces, you see family videos, but nothing that would really give you a sense of them.

They were very, very protected to the point we don't know how many times Saddam has been married. I asked the daughters, was your father really married three or four times? And they said, "Well, we know he was married twice. As for the rest, we don't ask. He had a very private life."

HINOJOSA: Jane, I'm wondering about the issue of honor. And one of our terror analysts was saying that when you have a family like this, and the daughters separating like this, that this really is a question of how this impacts the honor of the family. Is that another one of the reasons why they're being so kind of supportive of their dad and saying that they loved him so much? And, really, is there that possibility as well that somehow they really worry that they could, in fact, be killed for leaving? ARRAF: Certainly, that issue of honor is very important in any Arab family, any Middle Eastern family. But it's not really something that would compel them to speak out in that way. They could have, as they did with their brothers, for instance. Their brothers was a very different story.

Uday and Qusay really were responsible, it's believed, for killing their husbands. Their father signed off on it; their brothers were directly implicated. Now when asked about them -- because this must be a tangle of emotion. These women were wearing mourning clothing.

Although, at some point, they must have -- presumably hated their brothers, they were still their brothers. And when asked about them, how they felt about hearing they were dead, they said it was too painful to talk about, the wounds were still too raw. They could very well have said the same thing about their father, but clearly they saw a side of their father and only that side which was as simple as a loving father who treated them very, very well.

Now the issue of honor is wider in Jordan. Essentially, they asked the royal family for protection and they're women and children and they couldn't say no here. So they have a much brighter future ahead of them.

HAYS: Jane, give us a sense of what prospects now these women have for their lives. Their ruling family is gone. They're in Jordan, they're staying with the royal family. Do they have money from the old regime? What kind of life can women like this lead now?

ARRAF: I think these women are really extraordinarily lucky. I mean, they've had a terrible time. They have had lives that none of us would envy. They've been widows.

They were married at 15, by the way. Married at 15 and they have nine children between them. They're 35 and 32.

Their husbands were widowed at the hands of their own families. They were widowed, their husbands killed. Their brothers killed in a shootout. But now they've come here.

They are under the protection of a very gracious and apparently loving ruling family here who has welcomed them as family, the same way they did in 1995 when they fled here with their husbands. They could not have found a better place to seek refuge. They are well protected, they're taken care of.

Interesting question, do they have money. Presumably, their husbands have a lot of money. It's not clear they have access to it. They do not seem to have a lot of money in recent times and they didn't come with a large (UNINTELLIGIBLE). But here, certainly they're certainly they're cared for, protected, and even loved, it seems.

MESERVE: Jane, you mentioned that they hadn't given interviews before. Why did they give these interviews? ARRAF: Part of it was that they knew, and the people protecting them, the royal family here, knew that until they gave interviews, until the world saw them, they would be hounded. People would want to know what they felt about their father, whether they knew where their father was, what kind of women these were.

Now they were really apprehensive at first. These are well- educated women, very well spoken. But in mourning, and not used to giving interviews. They really were reluctant to speak until they spoke about something like their father that was so near and dear to their hearts.

Now, as for the other side of it, it's probably a good thing that the world has seen them. One would have imagined, as I did, without having spoken to them, that these would be really quite strange and unappealing people, the daughters of Saddam Hussein. In fact, it's the very opposite. They evoke sympathy. And certainly, there's much more sympathy now for the Jordanians, even among the people who hated Saddam, having seen these women and seeing that they really appeared to be innocent victims in a sense.

CROWLEY: Jane, let me ask you -- and you may just have answered it -- but what surprised you -- I mean, you cover that region all the time, you're so familiar with it. What surprised you about these women as Iraqi women?

ARRAF: I suppose the thing that surprised me, which is not peculiar to Iraq perhaps, but peculiar to that kind of system they had in Iraq, that dictatorship, very closed, where they were kept out of sight, they were given any material thing they could ever want, but they had a really very strange life. It was that they described their lives as normal. Before their husbands were killed, they said they had normal lives, they had loving families.

They were all very close, the brothers and sisters. They said they were happy in that sense. And what surprised me as well is they managed to emerge from this with a lot of their strength intact, if you will. I mean, these are very tough women. Perhaps they get that from their father, perhaps they get it from their mother, who's still out there. But the character of them was surprising and fascinating.

BURKE: Jane, how intensely are these women going to be interrogated over the next couple of weeks?

ARRAF: If the Jordanians have anything to do with it, not at all. They make clear that they are here under their protection, this is a refuge for them. I asked them whether they would answer questions from the Americans, and they made clear that they didn't know where their father was, where their mother was. They hadn't seen any of them since just before the war, in a very dramatic meeting.

They will likely be questioned at some point, because they could provide fascinating insights into the father and other members of the family. But probably no more than that. They are seen pretty well as victims, the women and their nine children.

MESERVE: Jane, thanks. And what's on the story for you in the coming days?

ARRAF: Well, I'm headed back to Baghdad. This was a brief diversion, Saddam's daughters. And I'm going back to that story of the hunt for Saddam Hussein himself, as well as trying to repair that very shattered country -- Candy.

CROWLEY: Jane, thanks.

And from the aftermath of the war in Iraq to the continuing war on terrorism in the U.S. and around the world, I'm on the story of new terrorism warnings this week. And we'll be back in 90 seconds.

ANNOUNCER: Jeanne Meserve is a correspondent in CNN's Washington bureau. She joined CNN in 1993 and covers homeland security for the network. She's a former correspondent for ABC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY DIRECTOR: After Flight 93, it is doubtful that any group of passengers would let any would-be hijacker take over their plane.

(END VIDEO CLIP)

MESERVE: Homeland Security Director Tom Ridge this week, just one of many talking again about the risk of suicide hijackers. And in a very bad case of mixed signals, the federal government found itself talking about possible cuts to the air marshal program at the same time it was warning about this new hijacking threat. In the end, the uproar was so intense, that they started talking about ways to beef up the program, rather than cutting it.

HINOJOSA: Jeanne, can you just -- I know that you're in this all the time, but some of us who are not in it all the time just don't get how we can be getting this contradictory message, where they were going to be cut funding for the air marshal's program? What are they thinking? I mean, what's the broader picture? Are they saying, two years later, we're making progress, therefore we can actually some of these programs?

MESERVE: No. What they're facing in the Transportation Security Administration, which runs the air marshal program, is an incredible financial crunch. This was an organization that was started up from scratch. They didn't have any real way of estimating how much money it was going to take, what kind of personnel they'd really need. And they find themselves with a $900 million budget deficit. And they are scrambling to move money around within that organization to try and bridge the gap.

They did propose -- there was a letter that went to Congress on Friday, last Friday, which is after this threat information had been developed, asking to reprogram $104 million from air marshals. Now they claim that money would not have effected how many air marshals were deployed. That it would have effected things like training. However, they are now acknowledging that there was indeed some sort of memo that went out during the week last week indicating that schedules were going to be changed and it was going to be because of financial constraints. So they're in a tough situation. Clearly, what they're saying now is that the person who made that comment about switching around schedules wasn't aware of the threat information. Had they been that never would have happened.

CROWLEY: Speaking of mixed signals, I remember when you got this story and came in and aired it during "INSIDE POLITICS". And it was frightening, you now? People and they may -- and they may pretend. And I got to thinking, oh, my gosh, and yet they didn't raise the threat signal. I don't get that.

MESERVE: Well, it is a little bit confusing, but here's their explanation for why they aren't doing it. First of all, they don't like to raise it, they don't like to monkey with it because it cost a lot of money and it causes a lot of anxiety on the part of the American people. But secondly, they say this was fairly specific threat information relating to one industry, an industry which we all know is effectively on a different threat level than anybody else and everybody else anyway.

So they felt that by sending out this advisory, and some specific directives about what airlines should do to beef up security, they were addressing the issue. And this advisory did go out. We know now that they're particularly concerned about transit passengers, that is people who are flying in and through the U.S., just making a connection here.

They've asked that organizations and airlines overseas give those people scrutiny, look particularly at the insoles of their shoes, even remove the insoles to look inside, look more carefully at the electronics and their garments. Part of that because that advisory did contain information that hijackers might try to take commonly carried objects and modify them, weaponize them.

BURKE: Jeanne, how close is that transit passenger program to ending? And what effect will that have on the industry, the airline industry?

MESERVE: It's very close, we believe. They've been talking about it for some time. They were talking about it a lot more this week. We think it is very imminent, indeed.

As for the impact, it is going to be felt. You know that the airline industry's already on the rope (ph). Several carriers already talking about potentially going out of business. The one that will be most impacted by this is American Airlines. But this isn't huge numbers of travelers we're talking about it.

Last year was an exception because one of the programs was suspended for a little while. The year before that, it was close to a million and a half people transitting the U.S. And if they make the change, when they make the change, what's going to be really interesting to watch is what is going to happen at airports around the world. You know, what kind of advance notice there is going to be, because people are going to have to be rerouted.

They're going to have to be rerouted. All travel plans that you may have made...

(CROSSTALK)

HAYS: (UNINTELLIGIBLE) as it at the airports.

MESERVE: That's right.

HAYS: One of the other big stories you covered this week, though, was the computer glitches, the student visas, trying to keep track. But you have pointed out that they're looking at a very tiny portion of the immigrant visas here. There's lots of people. Who's keeping track of them?

MESERVE: Well, they're trying to keep better track of all of them. But it's true, the student visas account for only two percent of the temporary visas issued in this country. It is a small proportion.

They are trying to beef up visas for the other 98 percent. Eventually, they say there is going to be a comprehensive entry and exit system so they can keep track of everybody who comes in and when they leave. However, you still don't know what they're doing when they get here, do you?

I mean, someone can comply with the terms of their visa. They can say, for instance, "I am a student." They can go to a university, they can attend classes, and who knows what they're doing in their off hours. So we should never believe that even an entry and exit system, although certainly a big improvement over the situation we have now, is going to be anything like a foolproof system.

HINOJOSA: You know, Jeanne, I'm thinking this whole story kind of brings me back to the city hall shooting that happened here in New York City just a couple of weeks ago in the sense that we're supposed to have all of this high-security in place, and yet there are these things that happen. And I have to say, I was on a plane this week after this information had been given. I didn't see anyone checking cameras at all in any particular sense. So do you kind of say, well, yet again, this is just a situation where we don't really know and we just can't really be that prepared at anytime, really?

MESERVE: Well, in the case of the advisories that went out this week, it pertained principally to those transit passengers originating at destination overseas. So you would not necessarily have seen it, although they do say that domestic passengers who come up for random screenings or who set off metal detectors, they, too, will undergo a little bit more scrutiny now than they would have a week ago.

As to whether we're ever prepared, no. I mean, we just can't be. There are too many potential target.

Everywhere I look, someone now who is immersed in this new subject, every time I go to the new city I look around and say, oh my gosh, they could do A, B, C, D, E, and F. And we all know it probably wouldn't be that hard to do it.

It's impossible to protect every one of those targets, be it aviation, or bridges and tunnels. You just can't do it. The real solution to this, people tell me, is intelligence. That's how we have to get a handle on this. We have to know exactly what people are doing, and the United States probably has to do more to win some hearts and minds overseas.

BURKE: We're going to turn our attention now away from that to Eagle, Colorado, right here in the courtroom drama that's already unfolded and the one that will unfold when Kobe Bryant comes to town in just a few days. All of the details on this case when ON THE STORY comes right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Everybody within our community knows the real accuser, so they knew that it was the wrong girl being posted on the Internet.

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BURKE: That's Kate Lovell (ph), the young woman whose picture was posted on the Internet, even though she is not the alleged accuser, not the 19-year-old woman in the small community who is accusing Kobe Bryant of sexual assault. And what she went through, just an indication of how overwhelming this case has become.

And I want to share with you, ladies, one thing that was interesting. In a case like this, and looking over legal documents, you don't often get a chance to chuckle a little bit. But that's what happened this week.

The district attorney filed a motion for a continuance of the hearing about whether to unseal the court file in this case. And part of his argument was that the media lawyers looking to unseal that court file sent so many pages to his fax machine that the fax machine broke, a repairman had to be called, and therefore, that was one of the reasons he gave for why they wouldn't be prepared. That hearing, though, did go on as scheduled, and it didn't look like the fax machine breaking down real inhibited them from making their arguments.

HAYS: So, Josie what is the significance of things like unsealing the documents, the significance of the fact that the prosecution's gotten a much bigger budget now to fight this case?

BURKE: Well, let's talk about unsealing the documents first. The one thing that would come out of that is, we've heard Kobe Bryant's version of what he thinks went on that night in that hotel room. Contained in the court file would be interviews that the alleged victim did with investigators, and that would contain her version of what she believes went on that evening.

And then to get back to the fact that the prosecution did go after (ph) two things this week. They got their budget increase; they have $2 million a year. They got an extra $150,000. And they did go out and add one deputy district attorney from a different county who's an expert in domestic violence and sex crime.

She's coming on board, and it just shows they're really beefing up, they're taking this seriously. They know that originally they probably weren't prepared to handle a case of this size, but they're doing everything they can so they can keep it here and that they can compete.

HINOJOSA: Josie, I know you are focused on all of the details and the intricacies being there, but there are a lot of people -- interestingly, a lot of women -- who say that they are feminists and interested in women rights, who just say that they are zoning out on this case entirely, that it feels yet again like another three ring circus. And I'm wondering whether or not there's an understanding of these cases kind of numbing pro-victim rights, because it's just like, oh my god, here we go again and again and again. Is there any talk about that while you're in that central place there?

BURKE: Well we're here, Maria, and there's so much focus on the atmosphere and everything that's going around. You feel like it's the center of the universe, that people are really focused on what's happening. If you look at search engines, the way they count, how people are looking things up, it shows there, that people are really interested. But I think there is a sense that, why is there so much interest?

And clearly, the answer, there is so much interest in this case because it involves Kobe Bryant. The people who are interested in victims' rights probably have a very legitimate gripe there, that we're focusing maybe on the wrong issues and maybe this isn't the case that is going to forward women's rights.

CROWLEY: Josie, let me ask you, I've looked on the Internet and there's some vicious stuff out there about the alleged victim. And we just heard in that sound bite about how everybody in town knows who the accuser is. What is life like for her?

BURKE: Well, from what we're hearing, it's very, very difficult. We've been able to speak with some people who are close to the young woman. They tell us that just this week reality seemed to be setting in. The reality of what she's gone through physically and what she's now going through mentally what her life is like. And the greatest detail we can get into from the people we've talked to is that she's spending some time away from her home here in Eagle.

But one thing that's interesting, and you wonder how this is going to work, we've heard she is planning definitely to go back to school. She's going to be a sophomore at the University of Northern Colorado. And you have to wonder what her life is going to be like, because it is true, if you don't know who she is yet you will know in a couple of weeks.

It's a very small town here. She's become very well known. Kobe Bryant's planning on playing basketball. She's planning on going to school. It will be very interesting to see how both of the major players in this drama are treated when they go back to their home court, so to speak.

CROWLEY: Josie, now talk that there was a 911 call from Kobe Bryant's house while all this was playing out. Tell us about that.

BURKE: Well, this is interesting for two reasons. One, because there's been a lot of focus on 911 calls made from the alleged victim's home in the past 12 months. There's actually a motion before the court to get those documents unsealed. And just in the past day, we learned that there were a couple of 911 calls made from Kobe Bryant's home in New Port Beach, California.

The most interesting one -- and it's interesting not because we know all of the details, but because of the time -- it occurred in the wee hours on July 3rd. That's interesting because on July 2nd, Kobe Bryant was here in Colorado, submitting to DNA testing. And on July 4th, he came back to be formally arrested and post bond.

So he was in his home on July 3rd when all this was going on. The details are, a call was made to 911 from his home. It was a hang- up; they called back.

Bryant said that he'd made the call. The officers were dispatched, medical personnel. A woman lying in a bed was treated, but not transported to a hospital.

We don't know yet who that woman was. And we don't know if there's any connection. All we can say for certain is it's interesting because of the timing.

HINOJOSA: Hey, Josie, I'm just wondering again, kind of pulling back from the intricate details, is there any talk at all within your sports circles about, well, you know, this is what happens, or these kinds of things can happen when you're getting these 17, 16, 17, 18- year-old guys signed up to the NBA so quickly, that maybe there's some rethinking. Or am I just thinking that, you know, that's entirely impossible?

BURKE: Well, I think there's not as much talk about the young guys. There's a lot of talk about the culture and what it means to be not just an NBA superstar, but to be a professional athlete, what's available to you and what your lifestyle is like. And not to get into too much details, but there are a lot of things offered to these young men that are not offered to the community at large, a lot of temptation and things like that out there. And that's certainly a topic of conversation.

CROWLEY: Josie Burke, we're going to be hearing a lot from you, I suspect, on this story. Thanks, Josie.

From basketball and courtroom drama to one of the other big spectator sports, politics. The California craziness and the latest from the pack of Democratic presidential wannabes. I'm back on the story in a moment. ANNOUNCER: Candy Crowley is CNN's senior political correspondent. She's been with the network since 1987. The National Press Foundation honored her with the 1998 Dirksen Award for distinguished reporting on Congress. She received the 1997 Joan Shorenstein Barone Award for excellence in journalism for coverage of the Bob Dole presidential campaign.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. GRAY DAVIS, (D), CALIFORNIA: At the end of the day, I think people are going to say to themselves, is it really fair that we the taxpayers have to spend $60 million to have a special election this fall?

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CROWLEY: Governor Gray Davis says this is not the way we run democratic institutions in this country. His political foes, and maybe even some of his fellow Democrats, say, just watch us.

Welcome back. We're ON THE STORY.

What a great story this is. I mean, here we have a presidential election, you know, not around the corner, but we're really into high presidential season. But California is where it's at, you know, on the cutting edge of recalling governors.

I'll tell you, what's interesting out there is there really is this circus atmosphere around the people who are pushing for this recall. And, yet, we're talking about a state in huge trouble. I mean, it's $32 billion in debt and -- so it's this real serious thing taking place in this kind of sitcom. It's amazing.

(CROSSTALK)

BURKE: Candy, is it just a California circus, or are there some national political implications that we should be aware of?

CROWLEY: Well, there probably are implications. Right now there are very few national footprints at this point on California. The last time the White House got into California is when they backed Richard Riordan, who used be to the mayor of L.A., to be -- to run against Gray Davis last time and he lost.

So the White House sort of got burned on it and doesn't really want to get into this. Nationally, as Democrat, it's tough, because this is a very high-profile, sort of failing administration. On the other hand, you don't want to give up the seat. So Democrats have been stuck in this sort of game of chicken with Republicans.

They started out saying, we're not going to put anybody on the ballot. It's just going to be Gray Davis. Well now, this past week, we saw people going, well, maybe we ought to put a Democrat on the ticket just in case Gray Davis doesn't make it. So it's been really interesting.

It will have national political implications at some point. Like what is George Bush going to do when he goes out there? That's all he'll get asked about.

What are the '04 candidates going to do from the Democratic side when they go out there -- and they have to, because that's where the money is -- what are they going to do when they go out there? Are they going to stand next to Gray Davis? I mean, he's the most unpopular politician that California has had in quite a while. So it will be really fun to watch.

HINOJOSA: Hey, Candy, I'm just wondering, do you see this -- because you've covered politics for so long -- as a real exercise in the democratic process, or is this more of a Republican Party that's a minority in California using very wealthy Republicans like Congressman Isa (ph), from San Diego and conservative talk show hosts who are just basically creating their own agenda and using money to do it?

CROWLEY: Well, certainly that's the argument of the Democrats, saying, look, this is yet another one of those Republican power grabs. They can't win the old-fashioned way, and they using this.

Now, California has a recall law, as do about a dozen other states certainly in there. And recalls have been called on Ronald Reagan, on Pete Wilson. So there have been recall drives before. None has ever gotten this far.

Look, Republicans are in the minority here. And, certainly, this was started by a very wealthy Republican., Congressman Isa (ph). But the fact of the matter is that you had to collect an enormous amount of signatures, and they weren't all from Republicans.

Right now, some -- I think the latest poll I saw, Maria, was 52 percent say they'd vote to recall him. He's got to pick up a couple percentages in there. So there's more than just Republicans. But there's no doubt it started, absolutely, from a well-funded Republican base, that then spread out as the economy got worse.

HAYS: Well, of course we're already focused on the presidential election. Howard Dean, Candy, is he a blessing or a curse for the Democratic Party?

CROWLEY: You know, my cup runneth over. California, we have Howard Dean. You know, it depends on who you talk to.

I mean, the fact of the matter is that Howard Dean has touched a very raw nerve in the Democratic Party. They just want someone to tell George Bush to stick it. And they feel that all of the other Democrats have been wishy-washy, most of them voted for the resolution on Iraq.

Howard Dean was quite easy because he was never asked to vote. So he can say, well, had I been asked to vote, I would have said no. So he appeals, clearly, to a base that, A, really is upset with George Bush -- that is, the very -- the gung-ho Democrats. And, B, a lot of people who haven't voted before who just like his schtick.

So he, in one way, is really rousing the Democratic Party. Now, the conservatives or the middle of the road Democratic Leadership Council, says, look, we're going too far to the left and that's going to kill us. So the argument is, great, he's really popular in the primary, where the more liberal Democrats vote, but he's going to get creamed in the general.

Now, Howard Dean has proven every single prediction that we've ever had wrong. You know you have to call him the front-runner, and you have to give him props for that.

MESERVE: Now he's the former government of Vermont, home, of course, of civil unions for gays. Huge issue this week. Is that an issue that's going to last, and what does it say about the gay political movement?

CROWLEY: I think it says that the gay political movement is here. And we've had a lot of things that have brought gay marriage into the headlines. The Massachusetts case, the Supreme Court has nullified the Texas sodomy laws. So there are a lot of things that brought this up.

But the fact of the matter is that the Human Rights Commission, which is the largest gay lobbying organization, had a cattle call here in Washington, and they all came. And that says something to you about the power of the gay voter. I mean, not only do they tend to be financially secure, what that means is they've got a lot of disposable income here. They pretty much got Howard Dean off the ground. However, then you saw the president being asked this.

My prediction is that everybody's going to walk this very fine line, because only a couple -- and I know Carol Moseley-Braun was one. They were only two, and they were lower tier candidates, who said that they were for gay marriage. The rest of them talked about civil unions. Even Howard Dean will say to you, "I'm not for gay marriage." That word is very, very explosive, and that's where we're going to see the battle.

HINOJOSA: Well, thanks, Candy, for that.

From the world of politics to a world that was turned upside down 25 years ago. I went back to the New York community of Love Canal this week and found that the so-called cleanup is over, but the arguments are still fresh. I'm back on the story in one minute.

ANNOUNCER: Maria Hinojosa is CNN's urban affairs correspondent. She was born in Mexico and raised in Chicago. And she is host of National Public Radio's "Latino USA".

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We have the technology that proves that it's safe to be around the canal, you know, because we definitely have nothing to gain to tell people that they can't live a very prosperous life on this canal.

(END VIDEO CLIP)

HINOJOSA: Michael Basil (ph) of the U.S. Environmental Protection Agency saying that after 25 years it's safe for people to once again call Love Canal home. Welcome back. We're ON THE STORY.

And I have to say, I had never been to Love Canal. And I kind of expected that when we got near there might be some kind of sign that said, you're approaching love canal, or warning, toxic waste dump here. Nothing. No signs.

What was the actual toxic waste dump, 16 acres, is just cordoned off by a 10-foot high chain link fence and just one 6-inch sign that says, "Warning, stay off." But nothing else that says what happened here 25 years ago. So a lot of activists are very worried that there's a question of memory here, and trying to basically get rid of what happened here 25 years ago. A very, very strange, strange place to be.

MESERVE: Question of memory, indeed, Maria. I mean, who is buying these houses, and why are they buying them?

HINOJOSA: Well, what happened is, is that -- for people who don't quite remember -- and that's interesting as well, Jeanne. Actually, there are a lot of people who I would say -- just on the street or people that I know -- "I just got back from Love Canal." And they'd say, "Where?" So people didn't even remember.

You have to remember there were 240 homes that were built on top of this Love Canal area, along with a grammar school. All of that was evacuated 25 years ago when President Carter declared it an environmental catastrophe. Now they -- 10 years ago, they brought in an organization and they revamped all of these homes that had been abandoned and evacuated and they started selling them at rates that were, well, considered to be pretty good deals -- 20 percent off market price. There were some incentives that were given, lower mortgage rates.

So people that are buying them are people who need to buy inexpensive homes. Also, they believe profoundly that they are safe. So for them, when I asked them, what's it like to be living here, they said, "We love it, and we look out at that fence and we never think of Love Canal. We feel like we're living in a park."

BURKE: What are they doing, Maria, to monitor that site, to make sure it is safe?

HINOJOSA: Well, it is being monitored. The big news is that Love Canal is being taken off this super fund emergency environmental cleanup list. That means that basically the amount of attention and money that was placed there for the past 25 years is going to essentially be minimal. But they will continue to monitor at a rate of every five years. They go back.

And that's what the people there say. They say, we feel safe because we know that this is an area that's being tested. Now this area of New York, up by Buffalo and Niagara Falls, actually has a very high concentration of waste dumps. So a lot of people say, well, you know, we feel safer here because we know there are dumps down the road that are never getting tested. So the fact that we're getting tested all the time says we're going to be OK.

CROWLEY: So what happens, Maria, to these people? Let's say 20 years down the line we start getting another sort of Love Canal thing with children being sick and all that? What's their recourse?

HINOJOSA: Well, that's what one of the activists -- the key activist here Lois Gibbs (ph), who basically was the whistle blower in all this, this is what she says. She says the problem is, is that these people, if something were to happen -- and let's make it very clear, the 22,000 tons of toxic waste that were dumped in Love Canal in the 1950s by Hooker Chemical Corporation are not gone. They are still there.

What the EPA has done is basically sealed it, contained it. So the activists say we don't know what's going to happen in another 25 years from now. And they say the problem is, is that the people who live here now will have no recourse, according to the activists, because the government will say, you knowingly bought into these homes that you knew were near a toxic waste dump. So they worry that, while people got some reparations from the government before, if it happens again, it's basically, you signed on to this, you bought it, it's not our problem anymore.

HAYS: OK, we'll see. And of course if it doesn't happen again, they sure got good homes cheap.

Well, environmental disaster and recovery, hmm, some say the U.S. economy disaster is finally staging a recovery. I'm back on the story in just a moment.

ANNOUNCER: Kathleen Hays is a business correspondent for CNN. She hosts "THE FLIP SIDE" on CNNFN 11:00 a.m. to 12:30 p.m. She has a bachelor and masters degree in economics from Stanford University.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN SNOW, TREASURY SECRETARY: We're going to see very good results for '04 with growth rates over four percent and unemployment coming down.

(END VIDEO CLIP)

HAYS: Is it just a snow job from Treasury Secretary John Snow, with optimistic talk about what he thinks lies ahead: an expanding economy and fewer people hunting a paycheck?

Welcome back. We're ON THE STORY.

And I was on a bus this week for two days with a gaggle of reporters, following these three secretaries of the economy around. It was John Snow from Treasury, Don Evans from Commerce, Elaine Chao from Labor, trying to tell the world that we're getting better, everything's going to work, and getting some feedback from people.

The Harley Davidson plant is where this tour started out. And I swear, I've never seen seasoned reporters ask tougher questions than that audience did. I really think the team might have been a little bit surprised by the toughness of the questions they got.

CROWLEY: I have got a question for you, Kathleen. But I want to tell our viewers first that CNN has learned that Charles Taylor, the Liberian president who is under pressure from rebels, as well as the U.S. government, to get out of Liberia, has told CNN that he in fact will leave on August 11. The proof is in the pudding, of course. But that's the latest, again. Liberian President Charles Taylor says he will leave August 11th.

So, back to the economy. You know, I just got the feeling talking to these three, as you did, for the -- you know, all those days, that they still haven't glommed on to the unrest out there, the unease, unease out there.

HAYS: Well, you know, there was an instance -- Michael Retzer (ph), who runs a tool and die company out in that area of Wisconsin -- because there were a lot of suppliers. It wasn't just Harley Davidson and their workers -- who are unionized. And it's a great -- Harley Davidson is a success story.

So here's somebody who is listening and says, hey, I don't get it. We have this trade relation with China. They are selling $100 billion worth of stuff to us. We're only selling $20 billion back to them.

You're going to send tax checks out. How is that going to help the economy if people take those tax checks and go to stores that are filled with imported goods from China? And the answer was kind of a dodge answer. Well, it's going to work, things are going to pick up, people are going to take vacations, they're going to go to hotels and motels and restaurants. That's going to drive things ahead.

After that was over, I spoke to one of the workers there and he and a lot of people said, you know, I just don't feel like they answered my questions.

HINOJOSA: Hey, I'm wondering here, Kathleen, you know we just -- I got some statistics here from an organization called the National Employment Law Project, and they're saying that African-Americans are especially hard hit by unemployment. In fact, African-Americans are saying 11.8 percent unemployment, compared to whites at 5.5 percent. Was there any discussion at all about how different groups across the country are being hit differently by the issue of unemployment?

HAYS: You know, not really. But I will say, Elaine Chao at one of the stops did mention that she thought that in terms of job retraining and making sure that people go from jobs that are disappearing to jobs that are growing, how important it is to pay attention to various kinds of diversity. And it's not just racial diversity.

You know men have been particularly hard hit by this in many cases. We've lost nearly three million manufacturing jobs in the past three years. Those are disproportionately male; they're disproportionately highly-paid jobs with benefits, and that's the concern for a lot of people. Whatever your race, that if you lose those jobs and replace them with lower-paying jobs in the services sector, maybe you've got employment, but is it the kind of employment people really need and want?

BURKE: Kathleen two questions. One, certainly there was an agenda behind picking the two states they picked to stop in. Can you explain that a little bit more?

HAYS: Thank you for pointing that out, yes.

BURKE: And the other thing is, how big a presence did demonstrators make themselves feel?

HAYS: OK, first of all, Wisconsin and Minnesota are two states that Bush nearly lost in the last election. So obviously there was no mistake that they chose those two states. There was a group of demonstrators that followed around. And they said, hey, if the economy's doing so well and they're so confident, why don't they invite us into these forums? Because these work groups that were handpicked, they weren't open to the public.

Now, granted, security's an issue. And we had plenty of Secret Service guys around. There's one guy, John Forjon (ph), who actually managed to get Treasury Secretary Snow's attention at the Colver (ph) ice cream parlor, where the demonstrators were outside and the group had to move inside to hold the event. And he said that Snow told him, hey, look, things are going to work, it's going to be OK.

You know, to Snow's credit, he did speak to this man. But then later, John Andrews said, I'll call the bank up. I'll call Citigroup and say, can you just wait until things pick up for me to send my mortgage payment and my credit card check?

So a little bit of disconnect. But again, I give the secretaries credit for going out. I do think they heard some things maybe they weren't ready for, but it really remains to be seen if this has any impact on policy.

Now, they do seem very convinced, and maybe rightfully so. The economy's starting to pick up. Now there are some good signs out there, but it's still a little bit up in the air.

CROWLEY: And with that, time's up, I'm afraid. Thank to all of my colleagues, and thank you for watching ON THE STORY. We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS". Focusing this week on Ben Affleck and Jennifer Lopez and a special tribute to Bob Hope. At 12:00 noon Eastern, 9:00 a.m. Pacific, "CNN LIVE SATURDAY". And at 1:00 p.m. Eastern, 10:00 a.m. Pacific, CNN's "IN THE MONEY". Coming up at the top of the hour a NEWS ALERT. But first, the president's weekly radio address.

(BEGIN AUDIO TAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Good morning.

This week, we received some encouraging news on the economy. The nation's economy grew faster than expected in the second quarter. Manufacturers are receiving more orders and their inventories need to be replenished. Home builders are busy meeting near-record demand, and retailers report that consumers are buying more goods.

Many economists expect that growth will accelerate in the coming months. Yet this week's employment report also shows that many Americans who want to work are still having trouble finding a job.

My administration is acting to promote faster growth to encourage the creation of new jobs. The key to job growth is higher demand for goods and services. With higher demand, businesses are more likely to hire new employees.

The best way to promote growth in job creation is to leave more money in the pockets of households and small businesses instead of taxing it away. So we lowered income tax rates, cut taxes on dividends and capital gains, reduced the marriage penalty, and increased the child tax credit. This week, the checks for up to $400 per child started arriving in the mailboxes of American families. That money will help American families move the economy forward.

We've also taken action to help small businesses who are the job creators of America. We increased tax incentives for equipment purchases, giving small businesses an additional reason to invest. More orders for machinery and equipment means more jobs, and more business investment can lead to greater worker productivity, which helps raise worker wages.

We're starting to see results from our actions. My administration's economists believe that if we had not passed tax relief, our unemployment rate would have been nearly one percentage point higher. And as many as 1.5 million Americans would not have the jobs they have today.

This week, three members of my cabinet, Treasury Secretary John Snow, Commerce Secretary Don Evans, and Labor Secretary Elaine Chao, visited business owners and their workers in the Midwest. They received reports the economy is picking up. Last month, I met with Mike Jendick (ph), who owns a part making company in Michigan called Metal Mike (ph).

Mike's customers are keeping him busier than he has been in three years, giving him reason to hire three new workers. Tax relief has given him reason to invest in new equipment to keep those workers productive. In Mike's words, "Tax relief can be the difference between making an investment or not." When small business owners like Mike make new investments, that can also be the difference between someone finding work or not. Tax relief is one part of my aggressive pro-growth agenda for America's economy.

When negotiating free trade agreements with countries to create new markets for products made in America, Congress need to pass a sound energy bill to ensure our nation has reliable, affordable supplies of energy, and Congress needs to let small businesses join together to purchase affordable health insurance for their employees.

We need legal reform to stop the frivolous lawsuits that are a drag on our economy. We have pushed Congress to make the child credit refundable for lower income families. And we're working to control spending in Washington, D.C. so that government spending does not rise any faster than the average household budget is expected to grow this year.

America's economy has challenges, and I will not be satisfied until every American looking for work can find a job. By steady, persistent action, we are preparing the way for vigorous growth and more jobs. I have confidence in our economic future, because I have confidence in the people whose effort and creativity make this economy run: the workers and the entrepreneurs of America.

Thank you for listening.

(END VIDEO TAPE)

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