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On the Story

Bush Calls for Social Security Benefits Cuts; Hollywood Blockbuster Shot at the U.N.

Aired May 01, 2005 - 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.


KELLY WALLACE, CNN CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week, from that runaway bride to the presidential news conference.
I'm Kelly Wallace in New York, on the story of a message to some reservists fighting in Iraq. Better check if your job is still waiting.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: I'm Dana Bash, on the story of President Bush calling for cuts in Social Security benefits for many Americans.

LIZ NEISLOSS, CNN CORRESPONDENT: I'm Liz Neisloss in New York on the story of how Hollywood interpreted the United Nations.

KATHLEEN HAYS, CNN CORRESPONDENT: And I'm Kathleen Hays, on the story of big oil taking a big bite out of the economy this week, but not stopping the world's biggest airliner from lifting off.

Also coming up, we'll go to California and talk to Jane Velez- Mitchell about Michael Jackson's former wife on the witness stand this week. We'll ask Dana about her travels with Laura this week and her interview with the first lady. And at the end of the hour, our "What's Her Story?" segment on an explorer leading her team to the North Pole. E-mail us onthestory@cnn.com. But, first, the runaway bride.

(BEGIN VIDEO CLIP)

RANDY BELCHER, DULUTH, GA POLICE CHIEF: It turns out that Ms. Wilbanks basically felt the pressure of this large wedding and could not handle it.

(END VIDEO CLIP)

BASH: That's Randy Belcher, police chief of Duluth, Georgia, breaking the news that the missing bride-to-be, Jennifer Wilbanks, who had broken her family and her fiance's hearts and fired up a national search and a criminal investigation, is alive. Now, helping us on that story is freelance journalist and special correspondent to "The Washington Post," Melanie Lasoff Levs, and she's joining us from Atlanta.

Melanie, you have been covering this story from the beginning. Knowing what you know now, were there hints at the beginning that this is the way it was going to turn out?

MELANIE LASOFF LEVS, FREELANCE JOURNALIST: You know, it's interesting. I think the community really immediately felt that this was going to end badly, because, with all of the missing children that we've seen, Laci Peterson, I think automatically there was just a sense of dread, which was another reason, I believe, that a lot of people started searching for her, even if they didn't know her. And it really captured the nation's attention because of that, because I think people just immediately felt a sense of dread, and, oh, my God, this woman is about to be married and what can we do to help this end in a better way?

HAYS: But as the week progressed, though, and then when people found out that she is alive and that she just got cold feet, how did their feelings start to change? Did they feel that maybe all the media attention on TV 24 hours, kind of added to an hysteria that didn't need to be there?

LEVS: Well, I think the fact is she had no -- she says she had no inkling that there was any of this media attention, and I think the reason that there was the media attention was that this was just a few days before the wedding, and people -- it was kind of almost a worst nightmare situation. I mean, people felt, like oh my God, you know, I got married a couple years ago, what if that had been my situation?

So, I really do believe that because of that, that's why so many people were interested in this story, and that really I think fueled the fire for it.

WALLACE: Melanie, you, of course, were on the scene in the early stages talking to the family, including the family of John Mason, Jennifer Wilbanks' fiance. A lot of attention was on him, the fact that he took a polygraph with private investigators, but that he was negotiating with the Georgia authorities in terms of having a videotaped polygraph. What were you picking up from the family in terms of the concerns that all the suspicion was surrounding John Mason?

LEVS: Well, I think that in any investigation, it pretty much becomes the person closest to the victim, the alleged victim. So I think that, again, people were sort of just following it as a regular missing person, and let's look at the people around her. And I imagine that he and his family, you know, especially since it turned out as it did, and we know how it turned out now, that, you know, they were trying to cooperate, but that they were just devastated by the fact that she was missing.

NEISLOSS: You know, you hear a lot of things about cases like this usually with men, and I think early in this case, correct me if I'm wrong, but detectives were kind of hinting things like, you know, you hear all the time a guy goes out for a pack of cigarettes and he just doesn't return. Were they leaving the door open, were they throwing out strong hints that it was just cold feet?

LEVS: Well, I think initially the family was very adamant that it was not cold feet, that she left behind so much -- all of her stuff, her keys, her cell phone, her money I believe was all left behind, and everybody was saying, as a lot of people in the community were saying, if it was cold feet, wouldn't she have told a friend? I mean, she had 14 bridesmaids, were these close friends of hers, wouldn't she have told one of them? So I think immediately people really just suspected foul play. You sort of expect the worst in some of these situations because of what we hear a lot, that these don't really end, other than Elizabeth Smart, a lot of times they don't really end happily.

BASH: Knowing what you know, Melanie, about the investigation, could it have been carried out a little bit more perhaps differently, essentially, to figure this out more quickly?

LEVS: Well, I think, you know, it sounded like they were on the right track with the hair, that, you know, they found the hair and were analyzing it, and I don't know if it's known that it definitely was her hair. They were just scratching their heads. I mean, you could see driving by when I was there, and traffic was just inching by, and people were looking at the family, looking at the home, and people were just standing out on the lawn looking lost and looking concerned, and just not having any sense of what was going to be going on. And I think that the law enforcement did their best with the information that they had.

HAYS: So, what do the people are seeing now over the course of the week? It's the cautionary tale, hey, don't thrust this huge 600- person wedding with 14 grooms and 14 bridesmaids on your kids, or this could happen to you. I mean, I don't want to make light of it, but I just wonder, you probably heard a lot of gossip this week.

LEVS: Yes, I think that people are, I think the overwhelming sense is relief that she's OK, that she's not been hurt, that she wasn't, in fact, kidnapped. It really turned out, when you think about it, the best that it could. She's OK.

But there is that sort of underlying rumbling of, you know, we are a small community. Atlanta, in general, and also Duluth, Georgia, which is a suburb of Atlanta, and people really cared about this woman and are feeling a bit betrayed and a big angry, but I think also there is a lot of confusion and concern, and they want the family to be able to work this out.

BASH: Melanie, thank you very much. We hope you come back to ON THE STORY soon, and we'll certainly be following this story, you can bet on that.

An we are going to be back shortly. We're going to go from a missing bride to two very visible people this week: The president and a remarkable show from his wife, the first lady, last night. We'll be right back on that right after this.

(BEGIN VIDEO CLIP)

LAURA BUSH, FIRST LADY: It's always very interesting to see how the ranch air invigorates people when they come down from Washington. Recently, when Vice President Cheney was down, he got up early one morning, he put on his hiking boots and he went on a brisk, 20 to 30- foot walk.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I believe a reformed system should protect those who depend on Social Security the most. So I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off.

(END VIDEO CLIP)

BASH: President Bush Thursday night wanted to attract attention with a rare prime-time news conference, and he certainly whipped up some headlines with his call to cut Social Security benefits for higher-income workers, and they would take the biggest hit, according to what he wants to do.

WALLACE: And, Dana, we all saw the headlines Friday morning. "The New York Times" saying Bush cites plan that would cut Social Security. Definitely headlines that might concern Americans around the country. Certainly a controversial move, and a politically risky one. Why? Take us behind the scenes. Why did the president feel he needed to come out with this right now?

BASH: Big risk, Kelly, as you know. Look, what we have known about the president's plan is essentially one thing, and that's that he wants to create personal accounts. And as you also know, that has not gone over very well. The more people have learned, the less they liked about it.

So, what the White House felt like they needed to do was really shake up the debate, put something new in there. And as you talked about with the headlines, the president certainly did do that by proposing this, but the president has made clear all along that these personal accounts would not do anything for the solvency of the program. So, this is his plan, essentially, his proposed plan to do that.

It certainly is bold, it certainly is very risky, because this cutting benefits has been a death knell for any politician in the past. But he certainly, for those of us following him around a little bit, he has been hinting at this, that this is the way he might go. And look, the White House did not do this without consulting people on Capitol Hill about the best way when they go forward with Social Security reform to actually address the solvency issue. So, the sense was that this is the best idea so far, but it's just the beginning. See what happens on Capitol Hill.

NEISLOSS: So, what happens next, Dana? Is this, you know, you know the Washington chess game. Is it next move, Democrats? What are you hearing? BASH: Well, the Democrats, interestingly, were -- what the White House wanted to do was essentially force the Democrats' hand, to say, you haven't come up with a plan, you sort of have been the party of no on this issue all along, and they wanted to see if perhaps this would lure them to the table.

So far, the Democratic leaders have said this plan cuts Social Security benefits for the middle class and we're not buying it. Behind the scenes talking to Democrats, they say we still feel like we have no reason to do anything, because this has been a winning argument, a winning political issue for us, the Democrats, and a bad one for Republicans and certainly for the president.

So, at this point, they're sort of going to wait and see, but the White House is definitely banking on getting some moderate Democrats in the Senate. That's where this is right now, to see if they can pull them over.

HAYS: Still hard to believe that promising to take benefits away from any part of the country is going to help this plan move forward.

BASH: And keep it -- and keep benefits the same for low-income workers. And that's where they hope it will all...

(CROSSTALK)

HAYS: You had a very interesting idea this week, because you interviewed the fist lady, and you pointed out her high, high popularity rating.

BASH: Eighty-five percent approval.

HAYS: That's incredible. So Dana very cleverly put that idea together with helping, getting on the road, helping with the Social Security, help the president get this thing through. Let's listen to that part of your interview with the first lady, Dana.

(BEGIN VIDEO CLIP)

L. BUSH: Am I going to go on the road for Social Security?

BASH: Yeah, I mean, why not take on issues that -- to use your popularity, for example, to help your husband, like you did during the campaign, on an issue like Social Security?

L. BUSH: Well, that's a very good question. Maybe I'll do that. But I'm having a really great time pointing out the programs that I've visited for the last three days, while we've been traveling here on the West Coast. And I think that's really where my expertise is, and I think it's really a better use of my time, really.

BASH: You're well into your fifth year in office, and although we think we know you, there are a lot of sort of issues in terms of the personal you that we don't know about. Surprise me. Tell me, is there something that the public simply doesn't know about that perhaps would surprise them about Laura Bush? L. BUSH: Well, let's see. What would that be? They may not know that I love music and that I like to listen to rock 'n' roll and that sort of music a lot. I have a very large record collection from my youth. Let's see what else they might not know? I know they know I love to read. That's something that's really...

BASH: Any guilty pleasures?

L. BUSH: ... very important for me and -- not really. You know...

BASH: "Desperate Housewives" maybe?

L. BUSH: No, not really. I don't watch "Desperate Housewives." But I have a stack of the DVDs of the first series, which I keep saying I am going to watch. But so far, I haven't.

BASH: Recommended by your daughters, I assume.

L. BUSH: Recommended by my daughters, exactly.

(END VIDEO CLIP)

BASH: So Kathleen, there you see the first lady despite her incredibly high approval rating, the highest really of any U.S. politician, she still seemed very cautious. Don't you think? Really not wanting to go out there and necessarily shake it up on Social Security, where her husband certainly could use some help. Not necessarily wanting to shake it up on her...

HAYS: Personal life.

BASH: (INAUDIBLE) personally, saying she doesn't watch "Desperate Housewives." I was planning on writing a piece today talking about the first lady, as somebody who is still incredibly cautious. Then we went to the White House correspondents dinner last night, and she certainly showed us a different side.

HAYS: She did.

BASH: Let's take a listen to that.

(BEGIN VIDEO CLIP)

L. BUSH: I said to him the other day, George, if you really want to end tyranny in the world, you're going to have to stay up later. 9:00. Mr. Excitement here is sound asleep, and I'm watching "Desperate Housewives" with Lynne Cheney.

(END VIDEO CLIP)

BASH: There you can see the first lady certainly lightening it up a bit talking about Lynne Cheney. They're saying she does watch "Desperate Housewives," though. She probably didn't...

HAYS: A little discrepancy there. BASH: ... comparing her mother-in-law to Don Corleone, talking about going to Chippendales with Lynne Cheney, really trying to show the lighter side. And this is what a lot of people frankly in the White House certainly saw as a possibility during the campaign, when they put her out there, as somebody who could really help the president, and that's what we saw last night. Using humor.

WALLACE: Dana, I must admit, nerd, at home watching C-SPAN, watching it live, watching her come up, tap the president on the shoulder and say, move out, I'm taking over. And I don't recall -- has any first lady ever done that before in recent years at the White House correspondents dinner? I don't think so.

BASH: I definitely don't think so. They've made some tapes beforehand, videotapes and things where perhaps some first ladies were in that, but nothing like this.

And listen, after spending three days with her, as I said, and really watching her and being struck by how she was going to schools, like she has done over the past four years, talking about reading, talking about education, even stepping out on topics. You know, the president during the State of the Union said that she was going to be the person who was going to go and deal with the problem with gangs. She went there. You see her going in for the first time in Los Angeles to talk face to face with gang members who are trying to be reformed. But even in those situations, she was still -- she still seemed a little bit careful, and then you saw her out last night, and she really seemed to be trying to take on and take advantage of her popularity, and, perhaps, try to use that to help the president.

NEISLOSS: But she's still following. I mean, it sounded very funny, but it's still scripted. So, you have a different window than we do. Isn't she fairly heavily stage-managed? What do you see?

BASH: Well, look, she's in politics, and she's, you know, going around and doing things that are certainly very pre-advanced, let's say. But that's typical for any politician.

But the interesting thing about traveling with her this week, and Kelly, you'll know because you traveled so much with the president, is that it's not like these huge entourages where you really don't have a lot of time and a lot of access to these events. There were just four news organizations with her. So we really got to watch her interact. Certainly they knew exactly what they were going to talk about, but to watch her interact with the students, the teachers, with these former gang members, and then sort of get her -- sort of thoughts afterwards.

She seemed to warm up, as -- it was a three-day swing to the West Coast -- seemed to warm up as it went along, but she still was pretty close to script, and was a little bit reluctant, it seemed, to sort of go out on a limb even when talking about gangs, even when talking about her personal view. Very different from last night.

WALLACE: Yeah. All aside, though, Dana, she's definitely taking on a somewhat different role in the second term than the first term.

BASH: They certainly want her to.

WALLACE: Yeah.

From first ladies to presidents and all things political, to a California courthouse. Coming up, very dramatic testimony in the Michael Jackson trial this week, as the mother of his children takes the stand. We're back on that story in a moment. Don't go away.

(COMMERCIAL BREAK)

WALLACE: Michael Jackson arriving at court Friday, giving a small wave to some fans across the street.

It was a week when Jackson's former wife, the mother of two of his children, was in the witness chair. Bringing us up to date is Jane Velez-Mitchell of the syndicated show "Celebrity Justice."

Jane, thanks so much for being with us on the story. Our first question is this: So you have Jackson's former wife, Debbie Rowe, brought by the prosecution, but she appears to be saying glowing things about Michael Jackson. Did this move backfire on prosecutors?

JANE VELEZ-MITCHELL, CELEBRITY JUSTICE: It totally backfired. It was devastating for the prosecution. And we were in the courtroom listening to this testimony. This woman gets on the stand and says the exact opposite of what prosecutors promised she would say. We reporters started looking at each other in shock, literally writing the note "not scripted" to each other because we were so shocked by what we were hearing.

HAYS: Jane, I don't get it. This is a woman who has spent almost no time with Michael Jackson ever, let alone in the last few years. This is a woman who he has not allowed to see her own children, hardly at all. Are we surprised she would say nice things about Michael to try and get back in his good graces? I really don't see why this was such a surprise or so devastating.

VELEZ-MITCHELL: Well, I think this is a woman who is clearly still obsessed with Michael Jackson. You have to remember, she has known him for 20 years. Originally back in the '80s, she was his nurse for his dermatologist. She became his confidante. She was there for him during the '93 accusations, on the phone for hours.

So, they have a history. She, I think, is still in love with him.

The other interesting note, Thursday, the second day of her testimony, "Celebrity Justice" learned that Jackson's lawyers filed a very interesting document in her custody battle in Los Angeles. They refiled her old 2001 termination of parental rights, an order that was later ruled invalid. But it was an odd filing. Was it to intimidate her? Did it rattle or spook her? We don't know. But the timing is very, very odd.

NEISLOSS: Jane, she was a very bizarre witness to begin with, because of the custody battle, one would think she was an impeachable witness. Because the defense could say, look, she had motives on that. So, did the prosecution interview this woman? What do we know how about how prepared they were?

VELEZ-MITCHELL: Well, our sources tell us that the prosecution insists they were completely surprised by her testimony. They insist that she told them something else when they initially met. But they did not impeach her. They didn't get on the stand and then say, look, back in whenever you told us X, Y, Z. Why are you changing your story? Now, sources close to the prosecution tell me they decided not to throw good money after bad. They decided that the jury liked this woman, that she came off as likable, and to do that would just make a bad situation even worse. So they kind of let it go and decided to cut their losses.

BASH: Jane, those of us in Washington and around the country, not in Los Angeles, really want to see what's happening in the courtroom and do not necessarily want to watch it be reenacted on E!. We have to rely on -- get to rely on people like you to tell us. So it seems like it's pretty tense in there, in terms of the way the prosecution is handling itself, the defense. Tell us about that.

VELEZ-MITCHELL: It is incredibly tense inside the courtroom. First of all, in the media, you have reporters that are so emotionally invested in this case, taking sides literally. And it is very unusual, but they're really passionate. Some reporters can't even talk to each other or sit next to each other because they have such differing feelings on this case.

Then you have the defense team, explosions erupting. Just the other day, there was an argument in the parking lot outside court in front of all the media between defense attorney Tom Mesereau and Brian Oxman, who was fired from the defense team.

And then you have the prosecutors who walk in looking like they haven't slept in weeks. They literally have bags under their bags. It's just a wild scene.

Now, the jury seems above sort of it all. They kind of float in and seem very relaxed and chatty. They don't seem very emotionally invested in any of this. So that is very interesting. Who knows what is going on in their minds.

WALLACE: Exactly, impossible of course to know. Jane, bring us forward. Look ahead to this week. Will the prosecution wrap, and are prosecutors planning any last-minute, big surprises to kind of bring their case to a conclusion?

VELEZ-MITCHELL: They are, I believe. They are going to bring in somebody that "Celebrity Justice" has been talking about for more than a month. Rudy Provencio could be their star witness. He should take the stand Monday or Tuesday. He is a friend of one of the alleged unindicted co-conspirators -- or a former friend at this point -- Mark Schaffel. He was brought into this whole group of alleged unindicted co-conspirators because he is very expert in the music industry. He began listening to their phone conversations, their conference calls, taking journal notes, and we believe he is going to try to tie these alleged unindicted co-conspirators to Michael Jackson himself. Did he hear Jackson on these conference calls talking about this alleged conspiracy to get rid of the family and send them to Brazil?

We also understand that the defense is going to claim that he didn't hear Michael Jackson; he heard one of the alleged unindicted co-conspirators, Frank Tyson, imitating Michael Jackson's falsetto voice.

This is such a bizarre case. You could have a team of Hollywood scriptwriters trying to think up developments like this for months, and they couldn't come up with the things that are actually just emerging in this courtroom.

BASH: Jane, thank you very much. And before we go on to the next topic, we have some breaking news this morning.

And we have confirmation that North Korea did, in fact, fire a short-range missile. That confirmation coming from White House Chief of Staff Andy Card. He spoke just moments ago in a taping with Wolf Blitzer for "LATE EDITION." Let's listen to Andy Card.

(BEGIN VIDEO CLIP)

ANDREW CARD, WHITE HOUSE CHIEF OF STAFF: It appears that there was a test of a short-range missile by North Koreans, and it landed in the Sea of Japan.

We're not surprised by this. The North Koreans have tested their missiles before. They have had some failures, and we have to work together with our allies around the world, especially the Japanese, the South Koreans, the Russians and the Chinese, to demonstrate that North Korea's actions are inappropriate. We don't want them to have any nuclear weapons. We don't want the Korean Peninsula to have any nuclear weapons on it.

(END VIDEO CLIP)

BASH: So there you hear Andy Card confirming this, but also seeming to downplay the significance, saying it has happened before. Btu certainly, Kathleen, this is a White House that is really trying to get these so-called six-party talks back on track with North Korea. They are used to perhaps North Korea trying to remind us that they're there. This might be what's happening, but it will certainly be a topic coming up, and we can hear more about Andy -- from Andy Card on "LATE EDITION."

HAYS: And you can bet Wall Street is paying attention. A week ago Friday, they slammed the stock market, this whole question of tensions in the Middle East, what is going on with North Korea, what is going on with China is really playing into a lot of angst in the stock market lately, along with this: From Wall Street to the White House. You can hear the grumbling about oil prices and how it's hurting the economy. I'm back on that story and a lot more in just a minute.

Still coming up, did the stars give a fair interpretation of the United Nations?

Also, can reservists coming home from Iraq count on getting their civilian jobs back?

And our "What's Her Story?" segment. Why was Matty McNair at the top of the world?

Plus, a check on what's making news right now. And that's straight ahead.

(COMMERCIAL BREAK)

(NEWSBREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: By historical standards, gasoline prices are still cheap. What we pay today, adjusted for inflation, is much lower than what we paid in 1981.

(END VIDEO CLIP)

HAYS: That's professor Antha Haji (ph) of Ohio Northern University, helping us put gas prices in some perspective. But you know, from the local gas station to the president's news conference, to consumer and investor confidence, gas prices are still casting a very big shadow.

Welcome back. I'm Kathleen Hays. We're ON THE STORY.

NEISLOSS: So, Kathleen, oil, oil, oil. But oil prices ended down slightly last week. So, what are we looking at for next week?

HAYS: It was -- well, let's look at last week first, because last week was a really big week. All kinds of things going on. We started off the week with President Bush and Crown Prince Abdullah down in Texas holding hands, Bush putting our case on the table for the United States, but the president admitting throughout the week, look, we cannot just solve the oil and gas problem overnight. The Saudis have said they'll pump the gas they can; they're pumping near full capacity.

That's why many people say the Democrats' criticism of the president is politics. Everybody knows that there is a lot being done now to boost up the supply.

At mid-week in these very important inventory numbers that are released by the government, we saw the supplies are building, we saw a surge in imports. Therefore, by the end of the week, we did see prices below $50 a barrel. One point professor Haji (ph) has made though, there's been a lot of news that could have and should have pushed prices even lower, lower below that $50 a barrel level. And the fact that it has only fallen from 58 to just below 50, he would argue, is a sign that these pressures of building demand in the United States and around the world compared to supplies, especially ahead of the summer driving season, are still a very important factor in the oil market, and they're having a big impact on the U.S. and the global economy.

WALLACE: Kathleen, talk to us a little bit about the ripple effect of these higher gas prices. AAA saying we're expecting to see these higher prices throughout the summer. What happens? How does it sort of ripple through the economy from the pump to every aspect of the economy that we know of?

HAYS: Pretty simple. If you're a consumer, and especially a low-income consumer, this takes a big chunk of your household income. If you're a business, it adds to your costs. It puts pressures on the economy.

And what we saw last week and what hit the stock market and Wall Street was, first quarter GDP, that's the economy's growth weight. Not as strong as expected, and some signs maybe that business' inventories are too strong, like they're overestimating the consumer. And that's going to be a problem ahead. Durable goods orders, it's a leading indicator for manufacturing -- fell sharply. Another drop in consumer confidence. It's hard not to put two and two together. These high and rising gas prices, an economy that is slowing down, worries about the economy, and, for the president, a dropping approval rating.

BASH: Kathleen, just to sort of give you a sense of how much an impact this is having, politically, or maybe on the president, how much he hears about it, last night at the White House correspondents dinner, even the entertainment, Cedric the comedian, was sort of on the president for his high gas prices. So he's certainly hearing a lot about it.

I want to switch a little bit to something that happened this week. Airbus has a brand new big plane. You called it what?

HAYS: The SUV of the sky. This is an amazing airplane. I mean, it is going to carry, for normal loads, maybe 550 people. It's bigger than the 747 that Boeing built. It can hold, though, up to 850 people. Two decks, 16 exits. What has it got? A dozen engines. It is a huge, huge airplane. Airbus is betting on a world where people are going to be flying into congested airports, and they're going to need to do these international flights. That's the market they're in.

Boeing of course has a totally different bet, with its Dreamliner 787, which, by the way, it just sold a bunch of last week. A smaller plane, more hubs, trying to help the discounters in their efforts. But this Airbus is really something. It's not going to be able to fly commercially for another year. They have a lot of tests, including seeing if you can get more than 800 people off a plane in 90 seconds or less. Quite a challenge.

BASH: Yes.

NEISLOSS: So, Kathleen, what is coming up next week? What are the big indicators we should be looking for?

HAYS: Next week is going to be a very interesting week. The Federal Reserve meets on Tuesday. They are expected to raise interest rates. But are they going to tell us? Maybe they're a little more worried about the economy? Wall Street, the bulls think the Fed's had something to do with the stock market being very volatile lately.

At the end of the week, we have the employment report. We get inventory numbers on oil. Something, though, I think, Dana, that you know is on the White House's radar screen, though, is China. On Friday, it didn't get a lot of attention outside of the currency market, but a report in a Chinese trade journal said that the conditions are right for China to make this big move on their currency. Bush has pushed for this. The treasury secretary has pushed for this. Everyone has pushed for China, because they say this gives them an unfair advantage against U.S. exporters.

So, Wall Street is watching to see when and if that happens. But that's another thing. This week could really, really be rocking and socking on Wall Street.

WALLACE: And you will be watching it all, we know, of course. Kathleen, you could say some veterans of the war in Iraq are getting a cold economics lesson. Reservists expecting to return to civilian jobs getting pink slips instead. I'm back on that story right after this. Don't go away.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It could be a while. And the information I've gotten back from several attorneys is that I should -- need to be prepared for a long process.

(END VIDEO CLIP)

WALLACE: That is Lieutenant Colonel Steve Duwarty (ph), a reservist who lives in Colorado. We talked to him last week. He was fired by the technology company he worked for, after his second deployment since the September 11th terrorist attacks. As he says, the fight goes on in the courts.

Welcome back to ON THE STORY. I'm Kelly Wallace.

BASH: Kelly, help us explain this. Aren't there or at least shouldn't there be laws, rules protecting reservists coming home, protecting their jobs?

WALLACE: There are. There is a federal law on the books protecting reservists after deployments. In essence, a reservist is supposed to be able to go back to his or her civilian job, and get the same pay, status and seniority that he or she would have had if they hadn't been deployed.

Also, depends on your length of deployment, but a company is barred from firing reservists from a minimum of six months to a year after their deployments.

What happened in Lieutenant Colonel Duwarty's (ph) case, he was assigned to a special project, as opposed to his previous job. He was also fired four months after his deployment. Those two reasons why this went to court and a federal judge ruled in his favor, awarding him nearly $400,000 in back pay and loss of pay in the future. The message here is to get the word out to reservists and to employers that there is this federal law that should be protecting these reservists.

HAYS: Indeed, because you know, knowing the law is a big part of it. Kelly, I know this is also part of a series that you're helping to work on for "AMERICAN MORNING" this week. What else are you taking a look at? Because I would think seeing a story like this makes it very hard for anybody to be signed up in the reserves anymore. Who'd go?

WALLACE: Exactly, Kathleen, a good point, because there could be some ripple effects. In essence, they are having some difficulties recruiting new men and women. It is a week-long series on "AMERICAN MORNING." It starts Monday. It's called "Battle Fatigue." And what I tried to do is take a look at some of the home town costs from these repeated and lengthy deployments in Iraq and Afghanistan.

I have a couple of pieces talking about reservists getting pink slips. Our own Barbara Starr talks to recruiters. They're having a very difficult time getting men and women to sign up. They are now targeting the parents, who are pretty concerned about letting their sons or daughters enlist. So they're going after the parents.

And I'm going to talk about counter-recruiting. Students on some campuses who are trying to counter the military recruiters and get the message out that there are other options for students other than going into the military. And then it wraps up with Adaora Udoji talking about military marriage counseling, a reservist and his wife going through marriage counseling. Again, it talks about you're seeing these reservists, men and women, lengthy deployments, repeated deployments, called up for these pop-up missions, short missions. It is having an effect on their jobs, on their relationships, on recruiting more men and women. So it is an important series, and we'll take a look at it all week long.

NEISLOSS: And Kelly, you're also working on a very different story. The Plaza Hotel in New York, which is part of all New Yorkers kind of urban mythology. But there is, apparently, a little cold reality behind the changing of the hotel. What did you find out?

WALLACE: Well, you know, Liz, the Plaza closing its doors yesterday, the first time in its 98-year history. It's going to be renovated and reopened some time in 2006, early 2007.

There was a big question, would the new owners be demolishing this hotel, turning it into all condos? A lot of preservationists, hotel workers say, no, you can't do that. Ultimately, a deal was struck saving some jobs, saving some rooms, fewer condos.

But there was a big question. What would happen to a little girl named Eloise, a fictional 6-year-old who lived at the Plaza? We tried to find out. (BEGIN VIDEOTAPE)

WALLACE (voice-over): What will happen once the Plaza closes its doors and the precocious Eloise will no longer be able to order room service, dash through the halls and keep those doormen on their toes? Four-year-old Morgan Killam, who was visiting the Plaza, thinks she knows.

MORGAN KILLAM, 4-YEAR-OLD "ELOISE" FAN: She's going to live in Paris.

WALLACE: Maybe for a while, but then she'll be back when the new Plaza opens its doors, because there couldn't be a Plaza without her.

HILARY KNIGHT, ILLUSTRATOR OF "ELOISE" BOOKS: She's legendary. She's part of it. She is a legend now. There aren't too many people that can make that claim.

WALLACE: Kelly Wallace.

(END VIDEOTAPE)

WALLACE: And it was announced on Thursday, Eloise will definitely have a place. She is getting her own suite at the new hotel when it reopens. So she is going to have lots of space and she will stay in the new hotel.

BASH: And Kelly, one other thing that you have been working on for a while and certainly are part of this week is a mentoring program. Tell us about that.

WALLACE: Yeah, Oxygen. We know this network, the only network employed and run by women. It started a walk, a mentoring walk. Women mentoring other women, as we all walk through Central Park. They called it creating the news girls' network, and they talked about the importance of getting women in various industries to mentor other women. And the woman you see there next to me, Linda Kaplan Thaler, she is a fabulous advertising executive. She's also the star of this new show on Oxygen called "Making It Big." And part of the theme here is trying to mentor people, work together. And get this, Linda Kaplan Thaler says one of the keys to success, to be nice. She says being nice is the new cool. So, important words for all you women out there.

NEISLOSS: Well, Kelly, from the stars of journalism such as yourself, to the movie stars and the United Nations. And some serious diplomatic business, as well. I'm back on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

NICOLE KIDMAN, ACTRESS: I don't care for him.

SEAN PENN, ACTOR: Wouldn't mind if he were dead.

KIDMAN: I wouldn't mind if he were gone.

PENN: Same thing.

KIDMAN: No, it isn't. If I interpreted "gone" as "dead," I'd be out of a job. If dead and gone were the same thing, there would be no U.N.

PENN: Your profession is playing with words, Ms. Broome.

KIDMAN: I don't play with words.

PENN: You're doing it right now.

KIDMAN: No, you are.

(END VIDEO CLIP)

NEISLOSS: Star power comes to the United Nations. "The Interpreter," a thriller set in the corridors and meeting halls that until now have been off-limits to Hollywood. And it took some special diplomacy to gain access.

Welcome back, I'm Liz Neisloss. We're ON THE STORY.

HAYS: Liz, star power. Sean Penn, Nicole Kidman, legendary director Sydney Pollack. So far, the reviews aren't great, and one of the criticisms is a unique setting, unique entree, not exploiting it, not using the U.N. as a character in the movie.

NEISLOSS: Well, you know, it really is interesting. Even to the jaded eye, the United Nations has some fabulous spaces, and Sydney Pollack himself described it as though he had never been into the U.N. before, and he said it was like an atheist going into one of these great, great cathedrals in Europe. The sense of the place, the history, the promise, it's just dripping off the walls.

So no matter what you think of the place, it really does have some awesome spaces. He described his director of photography coming in and saying he was just going to faint he was so excited about the space. And then they found out that they weren't going to be able to use it.

But it is a little bit disappointing. I really think they could have exploited the space even better, made it more of a character in the movie.

BASH: So you were up there while they were filming. What was that like? Did you get any kind of sense of what they were doing, how they were doing it, any access at all to the set?

NEISLOSS: Absolutely not. No access. Super closed -- and believe me, we all tried. This was a super closed set. They shot only on weekends, which was actually fairly fast they were able to do that. But, really, no one was able to get in there. There were a lot of ambassadors I know who were just bursting at the seams to get into this movie. For work permit reasons, apparently, they were not able to do that.

But you know, Sydney Pollack really had to do a lot of convincing to get the U.N. to let him shoot. You know, even Hitchcock, for "North by Northwest," he had tried to get permission to shoot his famous scenes inside the U.N., and that just didn't happen.

So, let's hear a little bit about what Sydney Pollack said about the kind of movie he wanted to make.

(BEGIN VIDEO CLIP)

SYDNEY POLLACK, DIRECTOR: I just told them the truth, really, which is I am trying to make a Hollywood thriller, not a political message for the U.N., but that I felt there was nothing in the picture that would embarrass the U.N. And that I had a central character who I felt was really sympathetic with the U.N. values and virtues, and I wanted it to be as accurate and authentic as possible.

KOFI ANNAN, U.N. SECRETARY-GENERAL: I've always wanted to bring the U.N. closer to people, and I think this is a wonderful way to do it.

(END VIDEO CLIP)

NEISLOSS: So Kofi Annan I think really realized that this is a moment -- or he was convinced this is a moment when the U.N. really could use a little pop culture jolt. This was something the U.N. never did before. It is a house of diplomacy. You got a lot of cultures. You have to worry about offending people. But this really was the right time. It was the right moment, and as Sydney Pollack put it, he felt a little weird. He didn't want to be a used car salesman going up to Kofi Annan, but the U.N. really did have a final say. They could have X'd any scene that they found improper.

WALLACE: Liz, of course we're going to leave it there, but we have to see if Nicole Kidman, Sean Penn can help the U.N. Definitely an institution taking some criticism or getting some criticism in the U.S. We'll follow that...

NEISLOSS: If they could put Nicole back on the Security Council, maybe...

WALLACE: Yeah, that might help. That might help.

All right. We're back on the story right after this. Don't go away.

UNIDENTIFIED FEMALE: An American women leads a team of explorers to the North Pole in record time. What's her story? More when we return.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE (voice-over): Matty McNair, what's her story? The 53-year-old grandmother guided a team to the North Pole in less than 37 days, beating a century-old record by famed explorer Robert Perry.

MATTY MCNAIR: I like cold. I don't like to be cold, don't get me confused there, but I love the cold, I love the Arctic. I love the light. It's like being on a different planet. There is a very softness to the light.

UNIDENTIFIED FEMALE: McNair and her four team members made the grueling journey not to beat Perry but to vindicate him. Many historians didn't believe Perry could have made the treacherous journey in just 37 days. But McNair and her team used the same route and similar equipment to prove the U.S. Naval officer could have done what he said.

McNair has now reached the North Pole twice and has been to the South Pole three times.

(END VIDEOTAPE)

WALLACE: And thanks to my fabulous colleagues, and thank you for watching ON THE STORY. We'll be back next week. Coming up on CNN, at noon Eastern, 9:00 a.m. Pacific, "LATE EDITION" with Wolf Blitzer. Among Wolf's guests, White House Chief of Staff Andrew Card. Straight ahead, a check on what's making news right now on "CNN LIVE SUNDAY." Have a great day.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired May 1, 2005 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KELLY WALLACE, CNN CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week, from that runaway bride to the presidential news conference.
I'm Kelly Wallace in New York, on the story of a message to some reservists fighting in Iraq. Better check if your job is still waiting.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: I'm Dana Bash, on the story of President Bush calling for cuts in Social Security benefits for many Americans.

LIZ NEISLOSS, CNN CORRESPONDENT: I'm Liz Neisloss in New York on the story of how Hollywood interpreted the United Nations.

KATHLEEN HAYS, CNN CORRESPONDENT: And I'm Kathleen Hays, on the story of big oil taking a big bite out of the economy this week, but not stopping the world's biggest airliner from lifting off.

Also coming up, we'll go to California and talk to Jane Velez- Mitchell about Michael Jackson's former wife on the witness stand this week. We'll ask Dana about her travels with Laura this week and her interview with the first lady. And at the end of the hour, our "What's Her Story?" segment on an explorer leading her team to the North Pole. E-mail us onthestory@cnn.com. But, first, the runaway bride.

(BEGIN VIDEO CLIP)

RANDY BELCHER, DULUTH, GA POLICE CHIEF: It turns out that Ms. Wilbanks basically felt the pressure of this large wedding and could not handle it.

(END VIDEO CLIP)

BASH: That's Randy Belcher, police chief of Duluth, Georgia, breaking the news that the missing bride-to-be, Jennifer Wilbanks, who had broken her family and her fiance's hearts and fired up a national search and a criminal investigation, is alive. Now, helping us on that story is freelance journalist and special correspondent to "The Washington Post," Melanie Lasoff Levs, and she's joining us from Atlanta.

Melanie, you have been covering this story from the beginning. Knowing what you know now, were there hints at the beginning that this is the way it was going to turn out?

MELANIE LASOFF LEVS, FREELANCE JOURNALIST: You know, it's interesting. I think the community really immediately felt that this was going to end badly, because, with all of the missing children that we've seen, Laci Peterson, I think automatically there was just a sense of dread, which was another reason, I believe, that a lot of people started searching for her, even if they didn't know her. And it really captured the nation's attention because of that, because I think people just immediately felt a sense of dread, and, oh, my God, this woman is about to be married and what can we do to help this end in a better way?

HAYS: But as the week progressed, though, and then when people found out that she is alive and that she just got cold feet, how did their feelings start to change? Did they feel that maybe all the media attention on TV 24 hours, kind of added to an hysteria that didn't need to be there?

LEVS: Well, I think the fact is she had no -- she says she had no inkling that there was any of this media attention, and I think the reason that there was the media attention was that this was just a few days before the wedding, and people -- it was kind of almost a worst nightmare situation. I mean, people felt, like oh my God, you know, I got married a couple years ago, what if that had been my situation?

So, I really do believe that because of that, that's why so many people were interested in this story, and that really I think fueled the fire for it.

WALLACE: Melanie, you, of course, were on the scene in the early stages talking to the family, including the family of John Mason, Jennifer Wilbanks' fiance. A lot of attention was on him, the fact that he took a polygraph with private investigators, but that he was negotiating with the Georgia authorities in terms of having a videotaped polygraph. What were you picking up from the family in terms of the concerns that all the suspicion was surrounding John Mason?

LEVS: Well, I think that in any investigation, it pretty much becomes the person closest to the victim, the alleged victim. So I think that, again, people were sort of just following it as a regular missing person, and let's look at the people around her. And I imagine that he and his family, you know, especially since it turned out as it did, and we know how it turned out now, that, you know, they were trying to cooperate, but that they were just devastated by the fact that she was missing.

NEISLOSS: You know, you hear a lot of things about cases like this usually with men, and I think early in this case, correct me if I'm wrong, but detectives were kind of hinting things like, you know, you hear all the time a guy goes out for a pack of cigarettes and he just doesn't return. Were they leaving the door open, were they throwing out strong hints that it was just cold feet?

LEVS: Well, I think initially the family was very adamant that it was not cold feet, that she left behind so much -- all of her stuff, her keys, her cell phone, her money I believe was all left behind, and everybody was saying, as a lot of people in the community were saying, if it was cold feet, wouldn't she have told a friend? I mean, she had 14 bridesmaids, were these close friends of hers, wouldn't she have told one of them? So I think immediately people really just suspected foul play. You sort of expect the worst in some of these situations because of what we hear a lot, that these don't really end, other than Elizabeth Smart, a lot of times they don't really end happily.

BASH: Knowing what you know, Melanie, about the investigation, could it have been carried out a little bit more perhaps differently, essentially, to figure this out more quickly?

LEVS: Well, I think, you know, it sounded like they were on the right track with the hair, that, you know, they found the hair and were analyzing it, and I don't know if it's known that it definitely was her hair. They were just scratching their heads. I mean, you could see driving by when I was there, and traffic was just inching by, and people were looking at the family, looking at the home, and people were just standing out on the lawn looking lost and looking concerned, and just not having any sense of what was going to be going on. And I think that the law enforcement did their best with the information that they had.

HAYS: So, what do the people are seeing now over the course of the week? It's the cautionary tale, hey, don't thrust this huge 600- person wedding with 14 grooms and 14 bridesmaids on your kids, or this could happen to you. I mean, I don't want to make light of it, but I just wonder, you probably heard a lot of gossip this week.

LEVS: Yes, I think that people are, I think the overwhelming sense is relief that she's OK, that she's not been hurt, that she wasn't, in fact, kidnapped. It really turned out, when you think about it, the best that it could. She's OK.

But there is that sort of underlying rumbling of, you know, we are a small community. Atlanta, in general, and also Duluth, Georgia, which is a suburb of Atlanta, and people really cared about this woman and are feeling a bit betrayed and a big angry, but I think also there is a lot of confusion and concern, and they want the family to be able to work this out.

BASH: Melanie, thank you very much. We hope you come back to ON THE STORY soon, and we'll certainly be following this story, you can bet on that.

An we are going to be back shortly. We're going to go from a missing bride to two very visible people this week: The president and a remarkable show from his wife, the first lady, last night. We'll be right back on that right after this.

(BEGIN VIDEO CLIP)

LAURA BUSH, FIRST LADY: It's always very interesting to see how the ranch air invigorates people when they come down from Washington. Recently, when Vice President Cheney was down, he got up early one morning, he put on his hiking boots and he went on a brisk, 20 to 30- foot walk.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I believe a reformed system should protect those who depend on Social Security the most. So I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off.

(END VIDEO CLIP)

BASH: President Bush Thursday night wanted to attract attention with a rare prime-time news conference, and he certainly whipped up some headlines with his call to cut Social Security benefits for higher-income workers, and they would take the biggest hit, according to what he wants to do.

WALLACE: And, Dana, we all saw the headlines Friday morning. "The New York Times" saying Bush cites plan that would cut Social Security. Definitely headlines that might concern Americans around the country. Certainly a controversial move, and a politically risky one. Why? Take us behind the scenes. Why did the president feel he needed to come out with this right now?

BASH: Big risk, Kelly, as you know. Look, what we have known about the president's plan is essentially one thing, and that's that he wants to create personal accounts. And as you also know, that has not gone over very well. The more people have learned, the less they liked about it.

So, what the White House felt like they needed to do was really shake up the debate, put something new in there. And as you talked about with the headlines, the president certainly did do that by proposing this, but the president has made clear all along that these personal accounts would not do anything for the solvency of the program. So, this is his plan, essentially, his proposed plan to do that.

It certainly is bold, it certainly is very risky, because this cutting benefits has been a death knell for any politician in the past. But he certainly, for those of us following him around a little bit, he has been hinting at this, that this is the way he might go. And look, the White House did not do this without consulting people on Capitol Hill about the best way when they go forward with Social Security reform to actually address the solvency issue. So, the sense was that this is the best idea so far, but it's just the beginning. See what happens on Capitol Hill.

NEISLOSS: So, what happens next, Dana? Is this, you know, you know the Washington chess game. Is it next move, Democrats? What are you hearing? BASH: Well, the Democrats, interestingly, were -- what the White House wanted to do was essentially force the Democrats' hand, to say, you haven't come up with a plan, you sort of have been the party of no on this issue all along, and they wanted to see if perhaps this would lure them to the table.

So far, the Democratic leaders have said this plan cuts Social Security benefits for the middle class and we're not buying it. Behind the scenes talking to Democrats, they say we still feel like we have no reason to do anything, because this has been a winning argument, a winning political issue for us, the Democrats, and a bad one for Republicans and certainly for the president.

So, at this point, they're sort of going to wait and see, but the White House is definitely banking on getting some moderate Democrats in the Senate. That's where this is right now, to see if they can pull them over.

HAYS: Still hard to believe that promising to take benefits away from any part of the country is going to help this plan move forward.

BASH: And keep it -- and keep benefits the same for low-income workers. And that's where they hope it will all...

(CROSSTALK)

HAYS: You had a very interesting idea this week, because you interviewed the fist lady, and you pointed out her high, high popularity rating.

BASH: Eighty-five percent approval.

HAYS: That's incredible. So Dana very cleverly put that idea together with helping, getting on the road, helping with the Social Security, help the president get this thing through. Let's listen to that part of your interview with the first lady, Dana.

(BEGIN VIDEO CLIP)

L. BUSH: Am I going to go on the road for Social Security?

BASH: Yeah, I mean, why not take on issues that -- to use your popularity, for example, to help your husband, like you did during the campaign, on an issue like Social Security?

L. BUSH: Well, that's a very good question. Maybe I'll do that. But I'm having a really great time pointing out the programs that I've visited for the last three days, while we've been traveling here on the West Coast. And I think that's really where my expertise is, and I think it's really a better use of my time, really.

BASH: You're well into your fifth year in office, and although we think we know you, there are a lot of sort of issues in terms of the personal you that we don't know about. Surprise me. Tell me, is there something that the public simply doesn't know about that perhaps would surprise them about Laura Bush? L. BUSH: Well, let's see. What would that be? They may not know that I love music and that I like to listen to rock 'n' roll and that sort of music a lot. I have a very large record collection from my youth. Let's see what else they might not know? I know they know I love to read. That's something that's really...

BASH: Any guilty pleasures?

L. BUSH: ... very important for me and -- not really. You know...

BASH: "Desperate Housewives" maybe?

L. BUSH: No, not really. I don't watch "Desperate Housewives." But I have a stack of the DVDs of the first series, which I keep saying I am going to watch. But so far, I haven't.

BASH: Recommended by your daughters, I assume.

L. BUSH: Recommended by my daughters, exactly.

(END VIDEO CLIP)

BASH: So Kathleen, there you see the first lady despite her incredibly high approval rating, the highest really of any U.S. politician, she still seemed very cautious. Don't you think? Really not wanting to go out there and necessarily shake it up on Social Security, where her husband certainly could use some help. Not necessarily wanting to shake it up on her...

HAYS: Personal life.

BASH: (INAUDIBLE) personally, saying she doesn't watch "Desperate Housewives." I was planning on writing a piece today talking about the first lady, as somebody who is still incredibly cautious. Then we went to the White House correspondents dinner last night, and she certainly showed us a different side.

HAYS: She did.

BASH: Let's take a listen to that.

(BEGIN VIDEO CLIP)

L. BUSH: I said to him the other day, George, if you really want to end tyranny in the world, you're going to have to stay up later. 9:00. Mr. Excitement here is sound asleep, and I'm watching "Desperate Housewives" with Lynne Cheney.

(END VIDEO CLIP)

BASH: There you can see the first lady certainly lightening it up a bit talking about Lynne Cheney. They're saying she does watch "Desperate Housewives," though. She probably didn't...

HAYS: A little discrepancy there. BASH: ... comparing her mother-in-law to Don Corleone, talking about going to Chippendales with Lynne Cheney, really trying to show the lighter side. And this is what a lot of people frankly in the White House certainly saw as a possibility during the campaign, when they put her out there, as somebody who could really help the president, and that's what we saw last night. Using humor.

WALLACE: Dana, I must admit, nerd, at home watching C-SPAN, watching it live, watching her come up, tap the president on the shoulder and say, move out, I'm taking over. And I don't recall -- has any first lady ever done that before in recent years at the White House correspondents dinner? I don't think so.

BASH: I definitely don't think so. They've made some tapes beforehand, videotapes and things where perhaps some first ladies were in that, but nothing like this.

And listen, after spending three days with her, as I said, and really watching her and being struck by how she was going to schools, like she has done over the past four years, talking about reading, talking about education, even stepping out on topics. You know, the president during the State of the Union said that she was going to be the person who was going to go and deal with the problem with gangs. She went there. You see her going in for the first time in Los Angeles to talk face to face with gang members who are trying to be reformed. But even in those situations, she was still -- she still seemed a little bit careful, and then you saw her out last night, and she really seemed to be trying to take on and take advantage of her popularity, and, perhaps, try to use that to help the president.

NEISLOSS: But she's still following. I mean, it sounded very funny, but it's still scripted. So, you have a different window than we do. Isn't she fairly heavily stage-managed? What do you see?

BASH: Well, look, she's in politics, and she's, you know, going around and doing things that are certainly very pre-advanced, let's say. But that's typical for any politician.

But the interesting thing about traveling with her this week, and Kelly, you'll know because you traveled so much with the president, is that it's not like these huge entourages where you really don't have a lot of time and a lot of access to these events. There were just four news organizations with her. So we really got to watch her interact. Certainly they knew exactly what they were going to talk about, but to watch her interact with the students, the teachers, with these former gang members, and then sort of get her -- sort of thoughts afterwards.

She seemed to warm up, as -- it was a three-day swing to the West Coast -- seemed to warm up as it went along, but she still was pretty close to script, and was a little bit reluctant, it seemed, to sort of go out on a limb even when talking about gangs, even when talking about her personal view. Very different from last night.

WALLACE: Yeah. All aside, though, Dana, she's definitely taking on a somewhat different role in the second term than the first term.

BASH: They certainly want her to.

WALLACE: Yeah.

From first ladies to presidents and all things political, to a California courthouse. Coming up, very dramatic testimony in the Michael Jackson trial this week, as the mother of his children takes the stand. We're back on that story in a moment. Don't go away.

(COMMERCIAL BREAK)

WALLACE: Michael Jackson arriving at court Friday, giving a small wave to some fans across the street.

It was a week when Jackson's former wife, the mother of two of his children, was in the witness chair. Bringing us up to date is Jane Velez-Mitchell of the syndicated show "Celebrity Justice."

Jane, thanks so much for being with us on the story. Our first question is this: So you have Jackson's former wife, Debbie Rowe, brought by the prosecution, but she appears to be saying glowing things about Michael Jackson. Did this move backfire on prosecutors?

JANE VELEZ-MITCHELL, CELEBRITY JUSTICE: It totally backfired. It was devastating for the prosecution. And we were in the courtroom listening to this testimony. This woman gets on the stand and says the exact opposite of what prosecutors promised she would say. We reporters started looking at each other in shock, literally writing the note "not scripted" to each other because we were so shocked by what we were hearing.

HAYS: Jane, I don't get it. This is a woman who has spent almost no time with Michael Jackson ever, let alone in the last few years. This is a woman who he has not allowed to see her own children, hardly at all. Are we surprised she would say nice things about Michael to try and get back in his good graces? I really don't see why this was such a surprise or so devastating.

VELEZ-MITCHELL: Well, I think this is a woman who is clearly still obsessed with Michael Jackson. You have to remember, she has known him for 20 years. Originally back in the '80s, she was his nurse for his dermatologist. She became his confidante. She was there for him during the '93 accusations, on the phone for hours.

So, they have a history. She, I think, is still in love with him.

The other interesting note, Thursday, the second day of her testimony, "Celebrity Justice" learned that Jackson's lawyers filed a very interesting document in her custody battle in Los Angeles. They refiled her old 2001 termination of parental rights, an order that was later ruled invalid. But it was an odd filing. Was it to intimidate her? Did it rattle or spook her? We don't know. But the timing is very, very odd.

NEISLOSS: Jane, she was a very bizarre witness to begin with, because of the custody battle, one would think she was an impeachable witness. Because the defense could say, look, she had motives on that. So, did the prosecution interview this woman? What do we know how about how prepared they were?

VELEZ-MITCHELL: Well, our sources tell us that the prosecution insists they were completely surprised by her testimony. They insist that she told them something else when they initially met. But they did not impeach her. They didn't get on the stand and then say, look, back in whenever you told us X, Y, Z. Why are you changing your story? Now, sources close to the prosecution tell me they decided not to throw good money after bad. They decided that the jury liked this woman, that she came off as likable, and to do that would just make a bad situation even worse. So they kind of let it go and decided to cut their losses.

BASH: Jane, those of us in Washington and around the country, not in Los Angeles, really want to see what's happening in the courtroom and do not necessarily want to watch it be reenacted on E!. We have to rely on -- get to rely on people like you to tell us. So it seems like it's pretty tense in there, in terms of the way the prosecution is handling itself, the defense. Tell us about that.

VELEZ-MITCHELL: It is incredibly tense inside the courtroom. First of all, in the media, you have reporters that are so emotionally invested in this case, taking sides literally. And it is very unusual, but they're really passionate. Some reporters can't even talk to each other or sit next to each other because they have such differing feelings on this case.

Then you have the defense team, explosions erupting. Just the other day, there was an argument in the parking lot outside court in front of all the media between defense attorney Tom Mesereau and Brian Oxman, who was fired from the defense team.

And then you have the prosecutors who walk in looking like they haven't slept in weeks. They literally have bags under their bags. It's just a wild scene.

Now, the jury seems above sort of it all. They kind of float in and seem very relaxed and chatty. They don't seem very emotionally invested in any of this. So that is very interesting. Who knows what is going on in their minds.

WALLACE: Exactly, impossible of course to know. Jane, bring us forward. Look ahead to this week. Will the prosecution wrap, and are prosecutors planning any last-minute, big surprises to kind of bring their case to a conclusion?

VELEZ-MITCHELL: They are, I believe. They are going to bring in somebody that "Celebrity Justice" has been talking about for more than a month. Rudy Provencio could be their star witness. He should take the stand Monday or Tuesday. He is a friend of one of the alleged unindicted co-conspirators -- or a former friend at this point -- Mark Schaffel. He was brought into this whole group of alleged unindicted co-conspirators because he is very expert in the music industry. He began listening to their phone conversations, their conference calls, taking journal notes, and we believe he is going to try to tie these alleged unindicted co-conspirators to Michael Jackson himself. Did he hear Jackson on these conference calls talking about this alleged conspiracy to get rid of the family and send them to Brazil?

We also understand that the defense is going to claim that he didn't hear Michael Jackson; he heard one of the alleged unindicted co-conspirators, Frank Tyson, imitating Michael Jackson's falsetto voice.

This is such a bizarre case. You could have a team of Hollywood scriptwriters trying to think up developments like this for months, and they couldn't come up with the things that are actually just emerging in this courtroom.

BASH: Jane, thank you very much. And before we go on to the next topic, we have some breaking news this morning.

And we have confirmation that North Korea did, in fact, fire a short-range missile. That confirmation coming from White House Chief of Staff Andy Card. He spoke just moments ago in a taping with Wolf Blitzer for "LATE EDITION." Let's listen to Andy Card.

(BEGIN VIDEO CLIP)

ANDREW CARD, WHITE HOUSE CHIEF OF STAFF: It appears that there was a test of a short-range missile by North Koreans, and it landed in the Sea of Japan.

We're not surprised by this. The North Koreans have tested their missiles before. They have had some failures, and we have to work together with our allies around the world, especially the Japanese, the South Koreans, the Russians and the Chinese, to demonstrate that North Korea's actions are inappropriate. We don't want them to have any nuclear weapons. We don't want the Korean Peninsula to have any nuclear weapons on it.

(END VIDEO CLIP)

BASH: So there you hear Andy Card confirming this, but also seeming to downplay the significance, saying it has happened before. Btu certainly, Kathleen, this is a White House that is really trying to get these so-called six-party talks back on track with North Korea. They are used to perhaps North Korea trying to remind us that they're there. This might be what's happening, but it will certainly be a topic coming up, and we can hear more about Andy -- from Andy Card on "LATE EDITION."

HAYS: And you can bet Wall Street is paying attention. A week ago Friday, they slammed the stock market, this whole question of tensions in the Middle East, what is going on with North Korea, what is going on with China is really playing into a lot of angst in the stock market lately, along with this: From Wall Street to the White House. You can hear the grumbling about oil prices and how it's hurting the economy. I'm back on that story and a lot more in just a minute.

Still coming up, did the stars give a fair interpretation of the United Nations?

Also, can reservists coming home from Iraq count on getting their civilian jobs back?

And our "What's Her Story?" segment. Why was Matty McNair at the top of the world?

Plus, a check on what's making news right now. And that's straight ahead.

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(NEWSBREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: By historical standards, gasoline prices are still cheap. What we pay today, adjusted for inflation, is much lower than what we paid in 1981.

(END VIDEO CLIP)

HAYS: That's professor Antha Haji (ph) of Ohio Northern University, helping us put gas prices in some perspective. But you know, from the local gas station to the president's news conference, to consumer and investor confidence, gas prices are still casting a very big shadow.

Welcome back. I'm Kathleen Hays. We're ON THE STORY.

NEISLOSS: So, Kathleen, oil, oil, oil. But oil prices ended down slightly last week. So, what are we looking at for next week?

HAYS: It was -- well, let's look at last week first, because last week was a really big week. All kinds of things going on. We started off the week with President Bush and Crown Prince Abdullah down in Texas holding hands, Bush putting our case on the table for the United States, but the president admitting throughout the week, look, we cannot just solve the oil and gas problem overnight. The Saudis have said they'll pump the gas they can; they're pumping near full capacity.

That's why many people say the Democrats' criticism of the president is politics. Everybody knows that there is a lot being done now to boost up the supply.

At mid-week in these very important inventory numbers that are released by the government, we saw the supplies are building, we saw a surge in imports. Therefore, by the end of the week, we did see prices below $50 a barrel. One point professor Haji (ph) has made though, there's been a lot of news that could have and should have pushed prices even lower, lower below that $50 a barrel level. And the fact that it has only fallen from 58 to just below 50, he would argue, is a sign that these pressures of building demand in the United States and around the world compared to supplies, especially ahead of the summer driving season, are still a very important factor in the oil market, and they're having a big impact on the U.S. and the global economy.

WALLACE: Kathleen, talk to us a little bit about the ripple effect of these higher gas prices. AAA saying we're expecting to see these higher prices throughout the summer. What happens? How does it sort of ripple through the economy from the pump to every aspect of the economy that we know of?

HAYS: Pretty simple. If you're a consumer, and especially a low-income consumer, this takes a big chunk of your household income. If you're a business, it adds to your costs. It puts pressures on the economy.

And what we saw last week and what hit the stock market and Wall Street was, first quarter GDP, that's the economy's growth weight. Not as strong as expected, and some signs maybe that business' inventories are too strong, like they're overestimating the consumer. And that's going to be a problem ahead. Durable goods orders, it's a leading indicator for manufacturing -- fell sharply. Another drop in consumer confidence. It's hard not to put two and two together. These high and rising gas prices, an economy that is slowing down, worries about the economy, and, for the president, a dropping approval rating.

BASH: Kathleen, just to sort of give you a sense of how much an impact this is having, politically, or maybe on the president, how much he hears about it, last night at the White House correspondents dinner, even the entertainment, Cedric the comedian, was sort of on the president for his high gas prices. So he's certainly hearing a lot about it.

I want to switch a little bit to something that happened this week. Airbus has a brand new big plane. You called it what?

HAYS: The SUV of the sky. This is an amazing airplane. I mean, it is going to carry, for normal loads, maybe 550 people. It's bigger than the 747 that Boeing built. It can hold, though, up to 850 people. Two decks, 16 exits. What has it got? A dozen engines. It is a huge, huge airplane. Airbus is betting on a world where people are going to be flying into congested airports, and they're going to need to do these international flights. That's the market they're in.

Boeing of course has a totally different bet, with its Dreamliner 787, which, by the way, it just sold a bunch of last week. A smaller plane, more hubs, trying to help the discounters in their efforts. But this Airbus is really something. It's not going to be able to fly commercially for another year. They have a lot of tests, including seeing if you can get more than 800 people off a plane in 90 seconds or less. Quite a challenge.

BASH: Yes.

NEISLOSS: So, Kathleen, what is coming up next week? What are the big indicators we should be looking for?

HAYS: Next week is going to be a very interesting week. The Federal Reserve meets on Tuesday. They are expected to raise interest rates. But are they going to tell us? Maybe they're a little more worried about the economy? Wall Street, the bulls think the Fed's had something to do with the stock market being very volatile lately.

At the end of the week, we have the employment report. We get inventory numbers on oil. Something, though, I think, Dana, that you know is on the White House's radar screen, though, is China. On Friday, it didn't get a lot of attention outside of the currency market, but a report in a Chinese trade journal said that the conditions are right for China to make this big move on their currency. Bush has pushed for this. The treasury secretary has pushed for this. Everyone has pushed for China, because they say this gives them an unfair advantage against U.S. exporters.

So, Wall Street is watching to see when and if that happens. But that's another thing. This week could really, really be rocking and socking on Wall Street.

WALLACE: And you will be watching it all, we know, of course. Kathleen, you could say some veterans of the war in Iraq are getting a cold economics lesson. Reservists expecting to return to civilian jobs getting pink slips instead. I'm back on that story right after this. Don't go away.

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(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It could be a while. And the information I've gotten back from several attorneys is that I should -- need to be prepared for a long process.

(END VIDEO CLIP)

WALLACE: That is Lieutenant Colonel Steve Duwarty (ph), a reservist who lives in Colorado. We talked to him last week. He was fired by the technology company he worked for, after his second deployment since the September 11th terrorist attacks. As he says, the fight goes on in the courts.

Welcome back to ON THE STORY. I'm Kelly Wallace.

BASH: Kelly, help us explain this. Aren't there or at least shouldn't there be laws, rules protecting reservists coming home, protecting their jobs?

WALLACE: There are. There is a federal law on the books protecting reservists after deployments. In essence, a reservist is supposed to be able to go back to his or her civilian job, and get the same pay, status and seniority that he or she would have had if they hadn't been deployed.

Also, depends on your length of deployment, but a company is barred from firing reservists from a minimum of six months to a year after their deployments.

What happened in Lieutenant Colonel Duwarty's (ph) case, he was assigned to a special project, as opposed to his previous job. He was also fired four months after his deployment. Those two reasons why this went to court and a federal judge ruled in his favor, awarding him nearly $400,000 in back pay and loss of pay in the future. The message here is to get the word out to reservists and to employers that there is this federal law that should be protecting these reservists.

HAYS: Indeed, because you know, knowing the law is a big part of it. Kelly, I know this is also part of a series that you're helping to work on for "AMERICAN MORNING" this week. What else are you taking a look at? Because I would think seeing a story like this makes it very hard for anybody to be signed up in the reserves anymore. Who'd go?

WALLACE: Exactly, Kathleen, a good point, because there could be some ripple effects. In essence, they are having some difficulties recruiting new men and women. It is a week-long series on "AMERICAN MORNING." It starts Monday. It's called "Battle Fatigue." And what I tried to do is take a look at some of the home town costs from these repeated and lengthy deployments in Iraq and Afghanistan.

I have a couple of pieces talking about reservists getting pink slips. Our own Barbara Starr talks to recruiters. They're having a very difficult time getting men and women to sign up. They are now targeting the parents, who are pretty concerned about letting their sons or daughters enlist. So they're going after the parents.

And I'm going to talk about counter-recruiting. Students on some campuses who are trying to counter the military recruiters and get the message out that there are other options for students other than going into the military. And then it wraps up with Adaora Udoji talking about military marriage counseling, a reservist and his wife going through marriage counseling. Again, it talks about you're seeing these reservists, men and women, lengthy deployments, repeated deployments, called up for these pop-up missions, short missions. It is having an effect on their jobs, on their relationships, on recruiting more men and women. So it is an important series, and we'll take a look at it all week long.

NEISLOSS: And Kelly, you're also working on a very different story. The Plaza Hotel in New York, which is part of all New Yorkers kind of urban mythology. But there is, apparently, a little cold reality behind the changing of the hotel. What did you find out?

WALLACE: Well, you know, Liz, the Plaza closing its doors yesterday, the first time in its 98-year history. It's going to be renovated and reopened some time in 2006, early 2007.

There was a big question, would the new owners be demolishing this hotel, turning it into all condos? A lot of preservationists, hotel workers say, no, you can't do that. Ultimately, a deal was struck saving some jobs, saving some rooms, fewer condos.

But there was a big question. What would happen to a little girl named Eloise, a fictional 6-year-old who lived at the Plaza? We tried to find out. (BEGIN VIDEOTAPE)

WALLACE (voice-over): What will happen once the Plaza closes its doors and the precocious Eloise will no longer be able to order room service, dash through the halls and keep those doormen on their toes? Four-year-old Morgan Killam, who was visiting the Plaza, thinks she knows.

MORGAN KILLAM, 4-YEAR-OLD "ELOISE" FAN: She's going to live in Paris.

WALLACE: Maybe for a while, but then she'll be back when the new Plaza opens its doors, because there couldn't be a Plaza without her.

HILARY KNIGHT, ILLUSTRATOR OF "ELOISE" BOOKS: She's legendary. She's part of it. She is a legend now. There aren't too many people that can make that claim.

WALLACE: Kelly Wallace.

(END VIDEOTAPE)

WALLACE: And it was announced on Thursday, Eloise will definitely have a place. She is getting her own suite at the new hotel when it reopens. So she is going to have lots of space and she will stay in the new hotel.

BASH: And Kelly, one other thing that you have been working on for a while and certainly are part of this week is a mentoring program. Tell us about that.

WALLACE: Yeah, Oxygen. We know this network, the only network employed and run by women. It started a walk, a mentoring walk. Women mentoring other women, as we all walk through Central Park. They called it creating the news girls' network, and they talked about the importance of getting women in various industries to mentor other women. And the woman you see there next to me, Linda Kaplan Thaler, she is a fabulous advertising executive. She's also the star of this new show on Oxygen called "Making It Big." And part of the theme here is trying to mentor people, work together. And get this, Linda Kaplan Thaler says one of the keys to success, to be nice. She says being nice is the new cool. So, important words for all you women out there.

NEISLOSS: Well, Kelly, from the stars of journalism such as yourself, to the movie stars and the United Nations. And some serious diplomatic business, as well. I'm back on that story after this.

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(BEGIN VIDEO CLIP)

NICOLE KIDMAN, ACTRESS: I don't care for him.

SEAN PENN, ACTOR: Wouldn't mind if he were dead.

KIDMAN: I wouldn't mind if he were gone.

PENN: Same thing.

KIDMAN: No, it isn't. If I interpreted "gone" as "dead," I'd be out of a job. If dead and gone were the same thing, there would be no U.N.

PENN: Your profession is playing with words, Ms. Broome.

KIDMAN: I don't play with words.

PENN: You're doing it right now.

KIDMAN: No, you are.

(END VIDEO CLIP)

NEISLOSS: Star power comes to the United Nations. "The Interpreter," a thriller set in the corridors and meeting halls that until now have been off-limits to Hollywood. And it took some special diplomacy to gain access.

Welcome back, I'm Liz Neisloss. We're ON THE STORY.

HAYS: Liz, star power. Sean Penn, Nicole Kidman, legendary director Sydney Pollack. So far, the reviews aren't great, and one of the criticisms is a unique setting, unique entree, not exploiting it, not using the U.N. as a character in the movie.

NEISLOSS: Well, you know, it really is interesting. Even to the jaded eye, the United Nations has some fabulous spaces, and Sydney Pollack himself described it as though he had never been into the U.N. before, and he said it was like an atheist going into one of these great, great cathedrals in Europe. The sense of the place, the history, the promise, it's just dripping off the walls.

So no matter what you think of the place, it really does have some awesome spaces. He described his director of photography coming in and saying he was just going to faint he was so excited about the space. And then they found out that they weren't going to be able to use it.

But it is a little bit disappointing. I really think they could have exploited the space even better, made it more of a character in the movie.

BASH: So you were up there while they were filming. What was that like? Did you get any kind of sense of what they were doing, how they were doing it, any access at all to the set?

NEISLOSS: Absolutely not. No access. Super closed -- and believe me, we all tried. This was a super closed set. They shot only on weekends, which was actually fairly fast they were able to do that. But, really, no one was able to get in there. There were a lot of ambassadors I know who were just bursting at the seams to get into this movie. For work permit reasons, apparently, they were not able to do that.

But you know, Sydney Pollack really had to do a lot of convincing to get the U.N. to let him shoot. You know, even Hitchcock, for "North by Northwest," he had tried to get permission to shoot his famous scenes inside the U.N., and that just didn't happen.

So, let's hear a little bit about what Sydney Pollack said about the kind of movie he wanted to make.

(BEGIN VIDEO CLIP)

SYDNEY POLLACK, DIRECTOR: I just told them the truth, really, which is I am trying to make a Hollywood thriller, not a political message for the U.N., but that I felt there was nothing in the picture that would embarrass the U.N. And that I had a central character who I felt was really sympathetic with the U.N. values and virtues, and I wanted it to be as accurate and authentic as possible.

KOFI ANNAN, U.N. SECRETARY-GENERAL: I've always wanted to bring the U.N. closer to people, and I think this is a wonderful way to do it.

(END VIDEO CLIP)

NEISLOSS: So Kofi Annan I think really realized that this is a moment -- or he was convinced this is a moment when the U.N. really could use a little pop culture jolt. This was something the U.N. never did before. It is a house of diplomacy. You got a lot of cultures. You have to worry about offending people. But this really was the right time. It was the right moment, and as Sydney Pollack put it, he felt a little weird. He didn't want to be a used car salesman going up to Kofi Annan, but the U.N. really did have a final say. They could have X'd any scene that they found improper.

WALLACE: Liz, of course we're going to leave it there, but we have to see if Nicole Kidman, Sean Penn can help the U.N. Definitely an institution taking some criticism or getting some criticism in the U.S. We'll follow that...

NEISLOSS: If they could put Nicole back on the Security Council, maybe...

WALLACE: Yeah, that might help. That might help.

All right. We're back on the story right after this. Don't go away.

UNIDENTIFIED FEMALE: An American women leads a team of explorers to the North Pole in record time. What's her story? More when we return.

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(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE (voice-over): Matty McNair, what's her story? The 53-year-old grandmother guided a team to the North Pole in less than 37 days, beating a century-old record by famed explorer Robert Perry.

MATTY MCNAIR: I like cold. I don't like to be cold, don't get me confused there, but I love the cold, I love the Arctic. I love the light. It's like being on a different planet. There is a very softness to the light.

UNIDENTIFIED FEMALE: McNair and her four team members made the grueling journey not to beat Perry but to vindicate him. Many historians didn't believe Perry could have made the treacherous journey in just 37 days. But McNair and her team used the same route and similar equipment to prove the U.S. Naval officer could have done what he said.

McNair has now reached the North Pole twice and has been to the South Pole three times.

(END VIDEOTAPE)

WALLACE: And thanks to my fabulous colleagues, and thank you for watching ON THE STORY. We'll be back next week. Coming up on CNN, at noon Eastern, 9:00 a.m. Pacific, "LATE EDITION" with Wolf Blitzer. Among Wolf's guests, White House Chief of Staff Andrew Card. Straight ahead, a check on what's making news right now on "CNN LIVE SUNDAY." Have a great day.

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