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CNN Wolf Blitzer Reports
U.S. Turns Blind Eye While Jordan, Turkey Profit From Iraqi Oil; Corporate Jet Fails Take-off, Crashes Near Teterboro Airport; Interview with Scott McClellan
Aired February 02, 2005 - 17:00 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.
WOLF BLITZER, CNN ANCHOR: Happening now. The president is about to put on the bargaining table several controversial proposals to reform Social Security. We're now beginning to get some of those details.
Stand by for hard news on WOLF BLITZER REPORTS.
(BEGIN VIDEOTAPE)
BLITZER (voice-over): The president's plans, the State of the Union sets the agenda. At the heart of it, a controversial overhaul of your retirement system.
Privatizing Social Security, a tough sell. He lost his shirt in the stock market.
UNIDENTIFIED MALE: If it wasn't for our children we would have been in trouble a long time ago.
BLITZER: Now he's unretired.
Prayers for the pope. Millions worry about his health. We'll get an update from the hospital in Rome.
Off the runway, across a busy highway and into a building. We'll show you what happened as investigators figure out why.
ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, February 2nd, 2005.
BLITZER: Thanks very much for joining us. At his inauguration, President Bush told the nation where he wants to go in his second term. Tonight he tells the U.S. Congress how to get there, but many Democrats are already serving notice they won't follow the course the president is charting.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Mr. Speaker, the president of the United States.
BLITZER (voice-over): It's one of those opportunities the president has every year to set the nation's agenda. And by all accounts, he will do so tonight. The centerpiece of his State of the Union address, reforming Social Security. DAN BARTLETT, COUNSELOR TO THE PRESIDENT: What the president will do is show that the map speaks for itself. The bottom line is that the Social Security system in 13 years will be taking in less money than it's paying out. We're going to go into the red.
BLITZER: Aides say the president will lay out a wide range of options for overhauling the current system and will push hard for his long standing, but controversial proposal to let younger workers use some Social Security funds to create private retirement accounts.
Under his plan, workers currently over 55 will not be affected by the proposed changes. But given uncertainty of the stock and bond markets, Democrats say that would be a disaster.
SEN. CHARLES SCHUMER (D), NEW YORK: The president needs to decide whether he wants to take the lead in fixing Social Security or whether he wants to take the lead in effect destroying the most successful social program in history.
BLITZER: Beyond his domestic agenda the president will lay out his foreign policy priorities beginning with Iraq. He's been strongly encouraged by last Sunday's elections there, but will insist declaring a specific timetable for a U.S. military withdrawal would be a huge mistake.
Aides say the president is likely to have some strong words for two of Iraq's neighbors, Iran and Syria, both of whom have been accused by U.S. officials of interfering in the Iraqi government's efforts toward achieving democracy. Iran also is suspected of trying to clandestinely build a nuclear bomb.
On a more hopeful note, expect the president to praise the most recent moves by Israeli Prime Minister Ariel Sharon and the new Palestinian Authority president, Mahmoud Abbas, to revive the peace process.
(END VIDEOTAPE)
BLITZER: The president knows exactly what he wants to say and has been practicing his pitch to Congress. Let's check in with our senior White House correspondent John King.
John, on Social Security, the president will lay out his vision. How much detail, though, will he get into tonight?
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Wolf, you touched on it in your piece. The president will say he wants to draw that line at 55. If you're 55 or above you would not be eligible for those new personal accounts. The president hopes that Congress will approve.
He also will say that everything else should be on the table. The president will not get into great detail tonight. But everything should be on the table, he will say, in a debate that will touch the politically sensitive issues of the cost of living increases for Social Security, whether the retirement age for Social Security should be increased again.
So the president will begin this debate tonight, quite interesting. He will then travel to five states with Democratic senators, the Senate Democratic leader saying no Democrats are ready to vote for those personal accounts right now.
So the president will lay it out tonight. And, Wolf, this is the beginning of a debate, I think the most interesting question when we look at polling down the road will be does the president win the American people over in this speech, at least begin to win them over on the issue of these private accounts, because if he does not the Democrats will continue to stay entrenched on this issue.
BLITZER: When it comes to the situation in Iraq, clearly he's been encouraged by the elections there, the elections in Afghanistan, but why not come up with some sort of new statement, if you will, on a withdrawal, at least give the American public some sort of notion of his exit strategy?
KING: Because of the history. The administration had hoped to be further along than it is right now in terms of training and getting ready on the front lines. Iraqi security forces, Iraqi national guard, Iraqi police forces, so the president does not want to lay out a clear timetable even as he urges the military to accelerate that training, even as the administration believes at least there perhaps was a potential turning point the way the Iraqi forces performed this past Sunday in the elections.
The president will say that he will accelerate that, that the mission in Iraq is now in a new phase, but he will also say that it would be foolish right now to start setting a timetable because to set a timetable, as the White House has been saying all week, in this administration's view, would encourage the terrorists to perhaps just lay low until the U.S. troops leave.
BLITZER: John King at the White House. John, thanks very much.
The man picked by President Bush to be the next secretary of homeland security is vowing to strike what he calls a proper balance between liberty and security. Michael Chertoff testified today at the Senate committee confirmation hearing. He said, you can't live in liberty without security and you wouldn't want to live in security without liberty.
The former Justice Department official defended his role giving advice on interrogating terrorism suspects, but he said he made it clear that torture is and was illegal. The committee is expected to approve his nomination and send it to the full Senate.
Stay tuned to CNN day and night for the most reliable news about your security.
Back to the State of the Union Address before the U.S. Congress tonight. Let's go back to the White House for a preview of what the president will say tonight. Let's turn to the White House press secretary, Scott McClellan. Scott, thanks very much for joining us.
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECY.: You bet, Wolf. Glad to be with you today.
BLITZER: Does the president have an idea how much this is going to cost, let's say, over the next 10 years, this transition to these private accounts as part of the Social Security system?
MCCLELLAN: Yes. Social Security, first of all, is one of the most important challenges facing the American people and you're going to hear the president tonight talk about it in greater detail than he has previously. And one area that he's going to spend a good bit of time talking about is personal retirement accounts.
Social Security for today's seniors is not going to change. Those at or near retirement are not going to see any changes. But Social Security faces a serious problem for our younger workers because by 2018 it is going to start experiencing shortfalls that get worse over time.
You're going to have fewer people paying into the system to support the benefits going out of the system. And so shortfalls will start in 2018. And what the president wants to do is allow younger workers a new benefit, to have the voluntary option investing a portion of their payroll taxes in personal retirement accounts. And he's going to talk about that in detail tonight about how he would structure it.
BLITZER: The Democrats, Scott, say that is going to cost $2 trillion over the next 10 years. You've done your own estimate. What is your bottom line? How much it will cost it make this transition?
MCCLELLAN: Well, I want to wait for the president to talk about it tonight because he's going to get into some of that detail in his remarks. And then we will be talking about how you would go about creating those personal retirement accounts.
But I think that you'll see that they need to wait and look at our plan before they start criticizing it because those numbers are not accurate. We look forward to working in a bipartisan way to solve this problem. It's going to take all of us working together to look at ways we can solve this problem. And the president is reaching out to members of Congress and he's reaching out to the American people saying now is the time to act to strengthen Social Security because it only gets worse over time.
BLITZER: Is the president open to the idea of raising the caps, the limits on how much of your income goes for Social Security? In other words, right now it's about the first 90,000. Is he willing to let it go higher to bring in some more revenue to the Social Security system?
MCCLELLAN: The president's going to continue to provide leadership on this issue. He is going to continue to talk about the problem facing Social Security. But he also believes it's important to be open to other ideas and listen to ideas. He's laid out some very clear principles. A couple of those principles I want to mention right now.
One of those is no changes for those at or near retirement. A second principle is no increase in payroll taxes. The president has made it very clear. The idea of raising the wage cap, as you talk about, doesn't address the fiscal problem facing Social -- I mean, doesn't solve the fiscal problem facing Social Security. It only pushes the insolvency date out a few more years. So we need to keep that in mind when we're talking about it. But that's one of many ideas being expressed by members of Congress.
The president doesn't believe now is the time to get into ruling things in or ruling things out. He believes it's time to talk about ideas that he's willing to put on the table and to talk about the principles that should guide us for solving this problem.
BLITZER: We don't have a lot of time left. But let's switch to foreign policy for a second. Specifically the Israeli-Palestinian conflict. Lots of anticipation, speculation. There's a moment right now, there's an opportunity to do something. Is the president going to lay out some specific details of what he wants to do, specifically perhaps about providing an aid package to the Palestinians?
MCCLELLAN: I'll tell you, Wolf. Freedom is on the march in the Middle East. We saw it this Sunday in Iraq with the elections and the great images of the Iraqi people holding up their ink-stained fingers, showing their desire to be free.
It is also a hopeful period in the Palestinian territories. And we have a very unique opportunity before us. The president is going to be talking about it in more detail tonight and he believes that America should do all we can to assist the Palestinian leaders as they move forward to put the institutions in place for a Democratic state to emerge, a state that's living in side by side in peace with Israel.
BLITZER: Scott McClellan, the White House press secretary, thanks very much for previewing the president's remarks. We'll all be watching tonight. I appreciate it.
MCCLELLAN: Thank you, Wolf.
BLITZER: And we'll have more on the president's State of the Union Address, that's coming up, including what the Democrats would like to hear. Coming up later this hour, I'll speak live with Democratic Congresswoman Jane Harman. Also we'll take a closer look at Social Security reform, an issue that is the centerpiece of the president's domestic agenda.
To our viewers, our Web question of the day is simple: "Do you plan to watch President Bush's State of the Union Address?" You can vote right now. Go to cnn.com/wolf. We'll have the results for you later in this broadcast.
In other news around the world, the Vatican says the condition of Pope John Paul II has now stabilized following some urgent treatment for severe breathing problems. The pope was rushed to a Rome hospital yesterday. CNN's Jim Bittermann is there. He is joining us now live with details.
Jim, what's the latest on the pope's condition?
JIM BITTERMANN, CNN CORRESPONDENT: Well, Wolf, the latest we're hearing is from the No. 2 at the Vatican, the secretary of state, Angelo Soldano, who, in a very rare appearance, appeared on Italian television tonight to add his voice to those who are saying that the pope is recovering well from his coughing spasms about 24 hours ago.
And, Soldano was saying, that the pope could have been treated back home at the Vatican but because there are so many good hospitals in Rome like this one, the Vatican decided to take advantage of them.
Now that's just one in a series of very positive comments we've heard all day today, including one from the Italian prime minister, Silvio Berlusconi, who said he thought that the pope could be out of the hospital in two or three days although he was not here at the hospital visiting today.
His health minister was here and as he left here's what he had to say to journalists.
(BEGIN VIDEO CLIP)
DR. GIROLAMO SIRCHIA, ITALIAN HEALTH MINISTER (through translator): He is improving. The doctors are optimistic. The medical bulletin that has been released is absolutely truthful.
(END VIDEO CLIP)
BITTERMANN: One note of caution in all of this, and we've had now positive comments from the Vatican, from the hospital and from the government. The one note of caution to all of this is contained in a medical bulletin earlier this morning in which it was said that the pope was still suffering from a respiratory infection.
And now doctors outside of the Vatican realm tell us that a respiratory infection in someone with Parkinsons can be very serious indeed. Also the longer the pope stays in the hospital in a horizontal position, it is also possible he could come down with pneumonia or something else.
So while in fact, things may be going well, I think there's also a very strong note of caution here at the hospital tonight -- Wolf.
BLITZER: All right. Jim Bittermann, thanks very much. He's watching the condition of the pope in Rome for us, Jim, thank you.
BLITZER: When we come back it's a United Nations scandal. Now both the Clinton and Bush administrations are being implicated. We'll have some new information on the Oil-for-Food investigation.
Also, why did this private jet careen off the runway in a busy New York area airport? We'll have the latest on that. And this...
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There was nowhere else that Nicole (ph) should have been. You know, she took on New York like it was nothing.
(END VIDEO CLIP)
BLITZER: But this a entiring actress had her life cut short in the city she loved. Now new arrests in the case. Our Mary Snow is looking into this story. She'll join us live with the latest.
(COMMERCIAL BREAK)
BLITZER: Welcome back. Hundreds of college students spending a semester at sea were counting on the trip of a lifetime and that's exactly what they got, but not in the way they expected. Their dream voyage turned into an ocean odyssey when a giant wave damaged their ship and left them floundering in stormy seas.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: This is crazy! Scary!
UNIDENTIFIED FEMALE: This is not what I signed up for!
BLITZER (voice-over): But this is what they got when their semester at sea hit rough water. Almost 700 college students are taking part in the current term of the sea-based study abroad program which offers University of Pittsburgh courses.
They were less than two weeks into their three-month voyage when their ship, The Explorer, encountered a surprise storm off the coast of Alaska. Early on the morning of January 26th, the boat was rocked by a 50-foot freak wave.
TIM CLEMENT, STUDENT: I woke up and my bed was sliding across the floor and I hit my head on the other door. So I grabbed my life preserver and I put my gear on to go down.
BRITTNEY SHIPP, STUDENT: Tried to put my bed back and then I just flew into the ground and (UNINTELLIGIBLE) was like on top of me and (UNINTELLIGIBLE) table.
BLITZER: As students donned life jackets and fled their rooms, the captain explained over the intercom that the giant wave had crippled the ship.
UNIDENTIFIED MALE: This was just a big one. It was out of cycle with everybody else, came in and punched out the big center window in the bridge and brought in a lot of water. In fact the wave was higher than the bridge so we had a lot of water and shorted out all of our equipment up there and we are working now to get it back.
BLITZER: With at least two of the four engines knocked out the 24,000-ton ship was battered by gale-force winds and high seas as it struggled to reach calmer waters.
UNIDENTIFIED MALE: That's a 60-footer there.
BLITZER: The Coast Guard was dispatched, but in the end didn't have to intervene. The Explorer, under its own power, finally limped into port on Honolulu on Monday, much to the relief of anxious parents.
PAM DOWNING, PARENT: It was just frightening to think that these kids went through that.
(END VIDEOTAPE)
BLITZER: Right now the ship is undergoing repairs in Honolulu. Depending on how long that takes, students may resume their sea voyage or fly ahead to their next stop which would be in Asia.
A failed takeoff and a fiery crash, at least 19 people on this jet are now on the ground and they are hurt. What went wrong?
Plus, one ad you won't see during the Super Bowl on sunday. Why a beer commercial was pulled preemptively.
(COMMERCIAL BREAK)
BLITZER: For months, U.N. Secretary-General Kofi Annan has been struggling to deal with a huge controversy over the now defunct U.N. oil for food program for Iraq. An independent committee set up by Annan and headed by the former U.S. federal reserve chairman Paul Volcker will present an interim report on his investigation into the scandal tomorrow. But Saddam Hussein made billions of dollars more through illegal oil sales. And now CNN has obtained documents showing that the U.S. government was not only aware of what was happening, but even condoned it. Here's CNN's State Department correspondent Andrea Koppel.
(BEGIN VIDEOTAPE)
ANDREA KOPPEL, CNN CORRESPONDENT (voice-over): Secretary of State Condoleezza Rice did not mince words last month when asked about allegations of corruption within the United Nations aid program for Iraq.
CONDOLEEZZA RICE, SECRETARY OF STATE: I think it is a scandal at what happened with oil for food.
KOPPEL: What Rice did not say that was for years, according to documents obtained by CNN, the Bush and Clinton administrations turned a blind eye to oil smuggling as allies Jordan and Turkey provided Saddam Hussein with billions more in illegal revenue than he's alleged to have earned by cheating the oil for food program monitored by the U.N. Security Council.
Ned Walker was a senior State Department official for both administrations. NED WALKER, FRM. ASST. SECRETARY OF STATE: It was almost a don't ask, don't tell kind of policy. It was accepted in the security council, nobody challenged it.
KOPPEL: According to those documents, for years the State Department waved restrictions on providing U.S. aid to sanction violators like Jordan and Turkey. In 1998, for example, Clinton's deputy secretary of state Strobe Talbot acknowledged Jordan was violating U.S. sanctions by continuing to import oil from Iraq outside oil for food. Bush deputy secretary of state Richard Armitage made a similar pronouncement in October 2002 about Turkey.
Estimates are Iraq netted $206 $8 billion from smuggling oil to Jordan, Turkey and neighboring Syria. Compare that to the estimated additional $2 to $4 1/2 billion Iraq may have pocketed through illegal surcharges and kickbacks under oil for food.
WALKER: None of this was monitored by the U.N. Security Council and the oil for food program. It was off the books, so to speak.
KOPPEL: So why did the U.S. allow it to continue? The memos cite, national security interests. In the case of Jordan, Armitage said prospects for an Israeli-Palestinian peace deal.
As for Turkey, Talbot cited military containment of Iraq.
Congress has already launched multiple investigations into oil for food. And some legislators now say the U.S. shares the blame for enriching Saddam.
REP. ROBERT MENENDEZ, (D-NJ) INTERNATIONAL RELATIONS COMMITTEE: How is it that you stand on a moral footing to go after the U.N. when they're responsible for 15 percent, maybe, of the ill-gotten gains and we were part and complicit of helping him get 85 percent of the money?
KOPPEL (on camera): But State Department spokesman Adam Ereli justified U.S. policy, telling CNN Iraq-smuggled oil helped sustain two key U.S. allies during difficult times, while the money Saddam made from oil sales to Turkey and Jordan was never used to buy weapons. Andrea Koppel, CNN, at the State Department.
(END VIDEOTAPE)
BLITZER: There was a horrifying scene at an airport outside New York City. A corporate jet hurdling down the runway, but failing to gain altitude, smashing through a fence and slamming into a building.
CNN's Jason Carroll is joining us now live from Teterboro in New Jersey with the latest on this story -- Jason.
JASON CARROLL, CNN CORRESPONDENT: And, Wolf, a 16-member team from the National Transportation Safety Board has been out here now for several hours. They have recovered the cockpit voice recorder. They've also started conducting interviews to try to determine the cause of the crash. (BEGIN VIDEOTAPE)
CARROLL (voice-over): Trouble for the CO-600 corporate jet began when the pilot tried and failed to take off from Teterboro Airport. The jet careened down the runway, plowed through a fence, skidded across route 46, a local highway, crashed into the strawberry clothing warehouse and burst into flames. The jet clipped two cars on the highway, Lloyd Foster's son was driving one of them.
LLOYD FOSTER, DRIVER'S FATHER: His friend said watch out, the plane is coming and it took the car top off.
CARROLL: Eleven people were on the plane: 8 passengers, 3 crew members. Despite the flames and smoke there were no immediate fatalities. The most severely injured a motorist who is in critical condition with head injuries and a co-pilot who is in serious condition with a broken leg. Several others were treated for minor injuries.
DR. JOSEPH FELDMAN, HACKENSACK UNIV. MEDICAL CENTER: Basically, they were, what we call walking wounded. They didn't apparently have any injuries. I think that any plane crash that people walk away from is a very good thing and unusual.
CARROLL: The question now, what happened?
GOV. RICHARD CODEY, NEW JERSEY: The accident was a failed takeoff. And we want to make it clear the plane never took off.
CARROLL: A team from the National Transportation Safety Board is on site walking the runway and looking at several possible causes.
DEBBIE HERSMAN, NTSB: We're going to be looking at a number of issues, at human factors, at systems, at aircraft structures. We'll be looking at the engines and all of the equipment on the airplane.
CARROLL: In December, a similar plane, a Canadair CO-601 crashed in Colorado during takeoff. That accident killed the son of an NBC executive. Following the crash, the NTSB warned pilots of smaller planes to double check for ice on the wings, one of several possible causes for this crash.
(END VIDEOTAPE)
CARROLL: Again, the NTSB says it's too early at this point to come up with an exact cause of the crash, but they say that that could take anywhere up to several weeks, even several months -- Wolf.
BLITZER: Jason Carroll reporting for us from Teterboro in New Jersey. Jason, thanks very much.
The president of the United States about to layout his plan for overhauling Social Security in tonight's State of the Union Address, but will the Democrats buy it? I'll speak with Democratic Congresswoman Jane Harmon of California. She's standing by to join us live. Also this. (BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: And all throughout, I always wanted to retire, everybody looks forward to that, but I didn't plan well enough.
(END VIDEO CLIP)
BLITZER: The golden years lost: Why this man is opposed to the president's ideas for Social Security reform.
And later,
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I hope he wakes up feeling the same dark sorrow and despair and regret about what he did.
(END VIDEO CLIP)
BLITZER: An American dream ends in a Manhattan nightmare. And the fiance of the murder victim has a message for the suspects. CNN's Mary Snow is live in New York with dramatic details. We'll go to her soon. Stay with us.
(COMMERCIAL BREAK)
BLITZER: In just a few hours, President Bush will lay out his second-term agenda in his State of the Union address before a joint meeting of the U.S. Congress. At the core of the address, a call to privatize the Social Security system right here in the United States, at least partially.
There's more support for that among younger Americans than there is among older Americans, who generally like Social Security just the way it is.
That's what CNN's senior correspondent Allan Chernoff found out on a recent trip to the Midwest. Allan's back in New York now. He's joining us live -- Allan.
ALLAN CHERNOFF, CNN CORRESPONDENT: Wolf, we traveled to Cary, Illinois, a suburb of Chicago, where we met a family that's facing tough times and they want the president to back off.
(BEGIN VIDEOTAPE)
DON KUTHE, FORMER ELECTRICAL CONTRACTOR: Let me see what size it is first.
CHERNOFF (voice-over): Don Kuthe never thought he'd have to work at age 70, never thought he'd be helping in a hardware store to make ends meet, but that was before his stock investments collapsed five years ago.
D. KUTHE: The way the stocks were going up at that time, it was great. So, I felt secure at that particular point -- false security, unfortunately.
CHERNOFF: Kuthe, a former electrical contractor, calculates he and his wife, Joan, lost more than one-third of their nest egg. And it wasn't much to begin with. Their savings was down to about $30,000.
(on camera): The Kuthes couldn't afford to lose money in the stock market because they'd failed to save much for retirement. They depend upon Social Security and some help from their kids, one of whom bought this house for them.
JOAN KUTHE, SENIOR CITIZEN: We're very reliant on Social Security. We couldn't manage without -- Don gets a decent Social Security.
CHERNOFF: Given their experience, the Kuthes oppose the president's plan to let younger Americans invest some Social Security money in stocks.
D. KUTHE: It is working fine. Why do you want to fix something that's not broken? I don't understand it.
CHERNOFF: The Kuthes say they understand there's no danger to their Social Security benefits, $27,000 a year, and they've heard the system may be facing serious financial strain. Even so, for the sake of their children and grandchildren, they want to send a message to President Bush. Social Security is no place to let people risk their money.
D. KUTHE: If he were sensitive, he wouldn't monkey around with everybody's livelihood. He doesn't live in the real world.
CHERNOFF: Stability of Social Security is even more important for the Kuthes because of health problems that have come with advancing age. Don takes pills for high blood pressure and a bad back and insulin for diabetes. Joan has had minor strokes, four operations on her right shoulder and, this week, one on the left.
D. KUTHE: The golden years for not for sissies. It's tough.
CHERNOFF: The golden years have been anything but for the Kuthes, which is why they warn, you never know just how much you may need Social Security.
(END VIDEOTAPE)
CHERNOFF: Of course, many Americans do favor putting Social Security money to work in the stock market, but people who have been burned in the market, like the Kuthes, believe that stocks could cut the safety net that is Social Security -- Wolf.
BLITZER: Allan Chernoff reporting for us from New York -- Allan, thanks very much.
CNN's Judy Woodruff is joining us now live from Capitol Hill to talk a little bit more about what the president's expected to say tonight.
Judy, thanks very much. Let's talk a little bit about Social Security. Give us some perspective. How big of a deal is this, this reform initiative that the president is about to put on the table?
JUDY WOODRUFF, CNN ANCHOR: Well, it is an enormous deal, Wolf.
The White House is making it clear this is priority No. 1 domestically. And I think, if the president could talk to that family that Allan Chernoff talked to in the Chicago suburbs, he would say, it may not be broken right now, but it's going to be broken in just a matter of years and we need to act now to do something about it.
So, Wolf, you and I were at the White House today. We were part of a group of television news anchors who were invited to have lunch with the president to hear more about this plan. We can't talk about specifics until the address, but essentially the president is determined to leave as part of his legacy a reform of Social Security. He thinks it is a system in -- he was using the word in crisis. He's not saying that anymore.
He's saying it's a problem, but he's saying we need to move aggressively and part of it has to be those personal retirement accounts, which will do exactly what you've just been discussing.
BLITZER: The president first has to convince the American public that there is a problem right now. That in and of itself won't necessarily be all that easy.
WOODRUFF: No, it won't, because people -- many people look at the returns they're getting now and they're saying, look, it may not make me rich, but at least it gets me through. It gives me security.
But the president and the economic advisers who he listens to have looked at the numbers. They've looked at the statistical tables. They see revenues not meeting demand by the end of the next decade. And they say the time is now to act. They say there's a way to do it, so that people who are nearing retirement now will not be in any jeopardy, but in a way that younger Americans can begin to have some options.
So, we're going to hear a lot more about that tonight.
BLITZER: All right, Judy Woodruff reporting for us from Capitol Hill -- thank you, Judy.
WOODRUFF: Thanks, Wolf.
BLITZER: So what do the Democrats want to hear tonight in the president's State of the Union address? Let's get some Democratic anticipation from Congresswoman Jane Harman of California.
Congresswoman, thanks very much for joining us.
REP. JANE HARMAN (D), CALIFORNIA: Thank you, Wolf. BLITZER: There is a problem long term that Social Security -- it has to be addressed. Even Bill Clinton in 1998 said you have to deal with it sooner rather than later.
HARMAN: Well, I agree with that. But the president said he wanted to be a uniter, not a divider in his second term. So he picks as his first issue probably the most divisive issue in Congress.
I would suggest to him that he put the problem on the table, have all the potential solutions be there, and we'll have a conversation for the next year or so.
BLITZER: But that's what he's planning on doing.
HARMAN: Well, I don't think so. I think he is going to put a controversial program on the table and say this is what I plan to do and you are going to do it my way, which is not the way to start a friendly conversation.
(CROSSTALK)
BLITZER: I think what he wants to do -- and I could be wrong. I think what he wants to do is say, look, these are various options. You can raise the caps, raise the retirement age. You can change the benefits. I'm willing to listen to all these various options. Let's negotiate. Let's start a dialogue to deal with it.
HARMAN: Well, I'm for starting a dialogue, including the fact that at least these personal accounts will add $2 trillion to the deficit if you make everybody over 55. That gets my attention whole. And our deficit debt are our huge problems. And the entitlement program that's broken is Medicare and Medicaid, health care costs. That's the one we should tackle first.
And, again, if the president wants to unite us, there is a way to forge a bipartisan solution that will work for health care. And I would say that let's follow the example of the intelligence reform bill, which we passed last fall. That was a bipartisan bill. It took a lot of work, but we did something very meaningful. And that should be the way we move forward.
BLITZER: Are you among those Democrats, like Senator Kennedy, who says there has to be a timetable to start withdrawing U.S. troops from Iraq?
HARMAN: No. I respectfully disagree with that.
I think the election on Sunday was a triumph of the human spirit. And we should celebrate it. And the administration does get some of the credit for very good planning. I wish that we'd had that planning two years ago, but, nonetheless, this was well planned. And the Iraqis get the lion's share of the credit.
But now the U.S. role should be to train an excellent Iraqi security force. And when that's done, we should remove ourselves, but let's focus not just on fighting the war on terror. Let's focus on winning the war. We have many more tools we need to use. And I applaud Condoleezza Rice in her first days in office for taking a tour of Europe to soothe European feelings and then for going to the Middle East, where I hope not only she, but the president personally will become engaged.
BLITZER: Will you support a large aid package, U.S. aid package for the Palestinians right now?
HARMAN: I support two things -- three things, the leadership in the region. I think Abu Musab al-Zarqawi, democratically elected, will be an excellent leader for the Palestinians. Ariel Sharon is proving very adroit at engaging with the Palestinians. I'm exciting about their meeting face-to-face next week in Egypt.
Yes, I'll support aid, but I also think that goes with the message that the terror has to stop. And I am very impressed, a little bit weary, but very impressed that most of the terror organizations inside the Palestinian Authority have ceased their terror tactics for the moment.
BLITZER: What posture do you want the president personally to take in trying to bring the Israelis and the Palestinians together?
HARMAN: Well, I think the president can help deliver that message that the terror attacks have to stop first. And, hopefully, he can make Abu Musab al-Zarqawi -- give him the strength he needs to bring all the terrorist organizations in the tent. Hamas is still outside the tent in the Palestinian region. And that's a problem.
But he can help that leadership and be stronger with an aid package. He also has to deliver a message to the Israelis that staying engaged and working on the withdrawal of Gaza in coordination with the Palestinians is a good thing. I am pleased to see that meetings in Egypt -- Egypt has played a constructive role and should continue to do that.
And I am also pleased that King Abdullah of Jordan, who is a real hero in the region, will attend that meeting. This is very good news. And that's something, again, that I would cite if I were the president tonight.
BLITZER: I suspect he is going to voice some optimism tonight, at least some hope on that Israeli-Palestinian front.
Jane Harman, thanks very much.
HARMAN: Thank you, Wolf.
BLITZER: Murder in Manhattan. The dream of becoming a big star abruptly ends for one aspiring actress after being gunned down in a robbery. This is a heartbreaking story. The police now have three suspects in custody.
And later, Anheuser-Busch pulls a commercial slated to run during the Super Bowl to avoid a face-off potentially with the FCC. We'll have details of that. (COMMERCIAL BREAK)
BLITZER: In New York, pictures of a murder suspect in a police car. Two other suspects are also under arrest. The victim, an aspiring actress.
CNN's Mary Snow is joining us now live from New York with the latest on this heartbreaking story -- Mary.
MARY SNOW, CNN CORRESPONDENT: Wolf, police say it started out as a purse-snatching. And today came the latest arrest. And now two teenage girls and a 19-year-old man stand accused of murdering a 28- year-old woman. During the robbery, the victim reportedly asked the group, what are you going to do, shoot me? Shortly after that, she died of a gunshot wound to the chest.
(BEGIN VIDEOTAPE)
SNOW (voice-over): Christmas, 2004, the last pictures Jeffrey Sparks has of his fiance, Nicole duFresne.
JEFFREY SPARKS, FIANCEE OF NICOLE DUFRESNE: The pictures look good. She took a good picture, but she was so much more beautiful in real life. I mean, her eyes just, you know, really had the spark of her soul. And that was the beautiful part.
SNOW: Wounds from last Thursday's attack are still visible on Jeffrey Sparks' eye, an attack he says that started while they were out with friends, a man and woman, when a group of teens approached them. Police released a surveillance tape that they say captured a green of teens at about the time of the murder. And the tape helped them arrest five teenagers. All were charged with robbery, three of them also charged with second-degree murder.
A 19-year-old also got first-degree murder charges for allegedly firing a .357-caliber gun at duFresne. Sparks says, if the suspect is convicted, he hopes they will share something in common.
SPARKS: I hope he wakes up feeling the same dark sorrow and despair and regret about what he did that I do for the rest of his life, because I will. And he made that decision for both of us.
SNOW: A makeshift memorial now marks the site where duFresne was killed in Manhattan, a city where she, like so many others, came to realize her dream of being an actress and a writer. In the big city, her fiancee says, she was not afraid.
SPARKS: There was nowhere else that Nicole should have been. You know, she took on New York like it was nothing.
SNOW: DuFresne's murder took place on the Lower East Side, a neighborhood that's been transformed over the years and attracts many young people, prompting a question to the city's police commissioner about its safety.
RAYMOND KELLY, NYPD COMMISSIONER: The neighborhood is very safe, as are most neighborhoods in New York City.
SNOW: Nicole's fiance says Nicole impacted the lives of many people here and now he hopes others will live her legacy.
SPARKS: It really is the best plan to live life to its fullest. It really is the best plan to love to its fullest, love honestly, love purely, and don't be afraid to love. She wasn't.
(END VIDEOTAPE)
SNOW: The Manhattan district attorney's office says that the suspects have not yet been arraigned on an indictment, so they have not yet entered a plea.
Tomorrow, here in New York, there will be a memorial for the victim. And a scholarship has been set up in her name at Emory College, where she went to school -- Wolf.
BLITZER: So sad, so sad, indeed. These young people, they come to New York. They're looking for a career. They're looking for excitement, and this happens. What a heartbreaking moment.
Mary Snow, thanks very much.
Super Bowl advertisers are vying for commercial spots on Sunday's game, but find out why you won't be seeing a certain beer commercial on TV this weekend. Brian Todd has details.
And are you ready for six more weeks of winter? We'll tell you if the groundhog saw his shadow.
We'll be right back.
(COMMERCIAL BREAK)
BLITZER: Remember the infamous wardrobe malfunction during last year's halftime show at the Super Bowl? One advertiser has a new commercial that pokes fun at that incident, but you won't be seeing it during Sunday's Super Bowl broadcast.
CNN's Brian Todd is joining us now with an explanation.
What's going on, Brian?
BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, lots of questions over why Anheuser-Busch has decided to not run this, because the ad is creative, funny and decidedly tame.
(BEGIN VIDEOTAPE)
TODD (voice-over): The setting, backstage before last year's halftime show. The dilemma, a stagehand can't find an opener for his Bud Light. The solution? Janet Jackson's outfit. The outfit rips in the now infamous place after his feeble attempt at repairing it.
(BEGIN VIDEO CLIP, AD) UNIDENTIFIED ACTOR: Whoa, that's something you don't see every day.
(END VIDEO CLIP)
TODD: And you won't see it on TV this Sunday. Anheuser-Busch tells CNN it decided to not run this ad in its Super Bowl lineup after what a company official called discussions with Fox Sports and the NFL. This spot entitled "Wardrobe Malfunction" doesn't even approach nudity, has no racy language, hardly any dialogue at all. Janet Jackson appears nowhere.
STUART ELLIOTT, "THE NEW YORK TIMES": I think that the consensus was reached that it -- they didn't want to reopen the can of worms that the halftime show was last year.
TODD: A statement from Anheuser-Busch reads in part: "In consumer research, beer drinkers told us they loved the spot. However, some said that they didn't want to be reminded of the incident."
Anheuser-Busch says there was no pressure from anyone to nix the commercial. A Fox sports official tells us this is more about not wanting to make light of the situation last year that offended a lot of people. An NFL spokesman says league officials simply stated their opinion that the ad is inappropriate. The FCC won't comment on a commercial that hasn't aired. Last year, the FCC fined CBS and its owned and operated stations more than a half a million dollars for the halftime show where Jackson's breast was exposed.
Are we now at the stage where a company preemptively self-censors even a benign ad to avoid the wrath of the FCC?
ELLIOTT: I think the whole issue of what happened last year during the halftime show was not only a question of the FCC. I think it was also a question of hundreds of thousands of viewers of the Super Bowl, rightly or wrongly, being offended.
TODD: But are we all being played for publicity? Anheuser-Busch says this spot won't air on TV, but look at how it's featured on their Web site.
UNIDENTIFIED FEMALE: We have some huge surprises for you during the big game, and I'm not talking about wardrobe malfunctions.
(END VIDEOTAPE)
TODD: And more than one ad critic told us this could have been a very clever ploy from the start from Anheuser-Busch to generate buzz for this ad. An official with Anheuser-Busch flatly denies that. And critics point out, advertisers across the board are very conscious of possible FCC backlash and that will be reflected in the Super Bowl ads this year, Wolf.
BLITZER: All right, very interesting. Brian Todd, thanks very much. We'll all be watching those commercials during the Super Bowl. TODD: That's right.
BLITZER: I'll mostly be watching the game, though. That's what interests me.
We'll take a quick break. We'll have the results of our web question of the day. That's coming up next.
(COMMERCIAL BREAK)
BLITZER: Here are the results of our Web question of the day. Remember, this is not a scientific poll.
I'll be back later tonight to anchor our coverage around the president's State of the Union address. Our special coverage begins with Paula Zahn at 8:00 p.m. Eastern.
"LOU DOBBS TONIGHT" starts right now.
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Aired February 2, 2005 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Happening now. The president is about to put on the bargaining table several controversial proposals to reform Social Security. We're now beginning to get some of those details.
Stand by for hard news on WOLF BLITZER REPORTS.
(BEGIN VIDEOTAPE)
BLITZER (voice-over): The president's plans, the State of the Union sets the agenda. At the heart of it, a controversial overhaul of your retirement system.
Privatizing Social Security, a tough sell. He lost his shirt in the stock market.
UNIDENTIFIED MALE: If it wasn't for our children we would have been in trouble a long time ago.
BLITZER: Now he's unretired.
Prayers for the pope. Millions worry about his health. We'll get an update from the hospital in Rome.
Off the runway, across a busy highway and into a building. We'll show you what happened as investigators figure out why.
ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, February 2nd, 2005.
BLITZER: Thanks very much for joining us. At his inauguration, President Bush told the nation where he wants to go in his second term. Tonight he tells the U.S. Congress how to get there, but many Democrats are already serving notice they won't follow the course the president is charting.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Mr. Speaker, the president of the United States.
BLITZER (voice-over): It's one of those opportunities the president has every year to set the nation's agenda. And by all accounts, he will do so tonight. The centerpiece of his State of the Union address, reforming Social Security. DAN BARTLETT, COUNSELOR TO THE PRESIDENT: What the president will do is show that the map speaks for itself. The bottom line is that the Social Security system in 13 years will be taking in less money than it's paying out. We're going to go into the red.
BLITZER: Aides say the president will lay out a wide range of options for overhauling the current system and will push hard for his long standing, but controversial proposal to let younger workers use some Social Security funds to create private retirement accounts.
Under his plan, workers currently over 55 will not be affected by the proposed changes. But given uncertainty of the stock and bond markets, Democrats say that would be a disaster.
SEN. CHARLES SCHUMER (D), NEW YORK: The president needs to decide whether he wants to take the lead in fixing Social Security or whether he wants to take the lead in effect destroying the most successful social program in history.
BLITZER: Beyond his domestic agenda the president will lay out his foreign policy priorities beginning with Iraq. He's been strongly encouraged by last Sunday's elections there, but will insist declaring a specific timetable for a U.S. military withdrawal would be a huge mistake.
Aides say the president is likely to have some strong words for two of Iraq's neighbors, Iran and Syria, both of whom have been accused by U.S. officials of interfering in the Iraqi government's efforts toward achieving democracy. Iran also is suspected of trying to clandestinely build a nuclear bomb.
On a more hopeful note, expect the president to praise the most recent moves by Israeli Prime Minister Ariel Sharon and the new Palestinian Authority president, Mahmoud Abbas, to revive the peace process.
(END VIDEOTAPE)
BLITZER: The president knows exactly what he wants to say and has been practicing his pitch to Congress. Let's check in with our senior White House correspondent John King.
John, on Social Security, the president will lay out his vision. How much detail, though, will he get into tonight?
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Wolf, you touched on it in your piece. The president will say he wants to draw that line at 55. If you're 55 or above you would not be eligible for those new personal accounts. The president hopes that Congress will approve.
He also will say that everything else should be on the table. The president will not get into great detail tonight. But everything should be on the table, he will say, in a debate that will touch the politically sensitive issues of the cost of living increases for Social Security, whether the retirement age for Social Security should be increased again.
So the president will begin this debate tonight, quite interesting. He will then travel to five states with Democratic senators, the Senate Democratic leader saying no Democrats are ready to vote for those personal accounts right now.
So the president will lay it out tonight. And, Wolf, this is the beginning of a debate, I think the most interesting question when we look at polling down the road will be does the president win the American people over in this speech, at least begin to win them over on the issue of these private accounts, because if he does not the Democrats will continue to stay entrenched on this issue.
BLITZER: When it comes to the situation in Iraq, clearly he's been encouraged by the elections there, the elections in Afghanistan, but why not come up with some sort of new statement, if you will, on a withdrawal, at least give the American public some sort of notion of his exit strategy?
KING: Because of the history. The administration had hoped to be further along than it is right now in terms of training and getting ready on the front lines. Iraqi security forces, Iraqi national guard, Iraqi police forces, so the president does not want to lay out a clear timetable even as he urges the military to accelerate that training, even as the administration believes at least there perhaps was a potential turning point the way the Iraqi forces performed this past Sunday in the elections.
The president will say that he will accelerate that, that the mission in Iraq is now in a new phase, but he will also say that it would be foolish right now to start setting a timetable because to set a timetable, as the White House has been saying all week, in this administration's view, would encourage the terrorists to perhaps just lay low until the U.S. troops leave.
BLITZER: John King at the White House. John, thanks very much.
The man picked by President Bush to be the next secretary of homeland security is vowing to strike what he calls a proper balance between liberty and security. Michael Chertoff testified today at the Senate committee confirmation hearing. He said, you can't live in liberty without security and you wouldn't want to live in security without liberty.
The former Justice Department official defended his role giving advice on interrogating terrorism suspects, but he said he made it clear that torture is and was illegal. The committee is expected to approve his nomination and send it to the full Senate.
Stay tuned to CNN day and night for the most reliable news about your security.
Back to the State of the Union Address before the U.S. Congress tonight. Let's go back to the White House for a preview of what the president will say tonight. Let's turn to the White House press secretary, Scott McClellan. Scott, thanks very much for joining us.
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECY.: You bet, Wolf. Glad to be with you today.
BLITZER: Does the president have an idea how much this is going to cost, let's say, over the next 10 years, this transition to these private accounts as part of the Social Security system?
MCCLELLAN: Yes. Social Security, first of all, is one of the most important challenges facing the American people and you're going to hear the president tonight talk about it in greater detail than he has previously. And one area that he's going to spend a good bit of time talking about is personal retirement accounts.
Social Security for today's seniors is not going to change. Those at or near retirement are not going to see any changes. But Social Security faces a serious problem for our younger workers because by 2018 it is going to start experiencing shortfalls that get worse over time.
You're going to have fewer people paying into the system to support the benefits going out of the system. And so shortfalls will start in 2018. And what the president wants to do is allow younger workers a new benefit, to have the voluntary option investing a portion of their payroll taxes in personal retirement accounts. And he's going to talk about that in detail tonight about how he would structure it.
BLITZER: The Democrats, Scott, say that is going to cost $2 trillion over the next 10 years. You've done your own estimate. What is your bottom line? How much it will cost it make this transition?
MCCLELLAN: Well, I want to wait for the president to talk about it tonight because he's going to get into some of that detail in his remarks. And then we will be talking about how you would go about creating those personal retirement accounts.
But I think that you'll see that they need to wait and look at our plan before they start criticizing it because those numbers are not accurate. We look forward to working in a bipartisan way to solve this problem. It's going to take all of us working together to look at ways we can solve this problem. And the president is reaching out to members of Congress and he's reaching out to the American people saying now is the time to act to strengthen Social Security because it only gets worse over time.
BLITZER: Is the president open to the idea of raising the caps, the limits on how much of your income goes for Social Security? In other words, right now it's about the first 90,000. Is he willing to let it go higher to bring in some more revenue to the Social Security system?
MCCLELLAN: The president's going to continue to provide leadership on this issue. He is going to continue to talk about the problem facing Social Security. But he also believes it's important to be open to other ideas and listen to ideas. He's laid out some very clear principles. A couple of those principles I want to mention right now.
One of those is no changes for those at or near retirement. A second principle is no increase in payroll taxes. The president has made it very clear. The idea of raising the wage cap, as you talk about, doesn't address the fiscal problem facing Social -- I mean, doesn't solve the fiscal problem facing Social Security. It only pushes the insolvency date out a few more years. So we need to keep that in mind when we're talking about it. But that's one of many ideas being expressed by members of Congress.
The president doesn't believe now is the time to get into ruling things in or ruling things out. He believes it's time to talk about ideas that he's willing to put on the table and to talk about the principles that should guide us for solving this problem.
BLITZER: We don't have a lot of time left. But let's switch to foreign policy for a second. Specifically the Israeli-Palestinian conflict. Lots of anticipation, speculation. There's a moment right now, there's an opportunity to do something. Is the president going to lay out some specific details of what he wants to do, specifically perhaps about providing an aid package to the Palestinians?
MCCLELLAN: I'll tell you, Wolf. Freedom is on the march in the Middle East. We saw it this Sunday in Iraq with the elections and the great images of the Iraqi people holding up their ink-stained fingers, showing their desire to be free.
It is also a hopeful period in the Palestinian territories. And we have a very unique opportunity before us. The president is going to be talking about it in more detail tonight and he believes that America should do all we can to assist the Palestinian leaders as they move forward to put the institutions in place for a Democratic state to emerge, a state that's living in side by side in peace with Israel.
BLITZER: Scott McClellan, the White House press secretary, thanks very much for previewing the president's remarks. We'll all be watching tonight. I appreciate it.
MCCLELLAN: Thank you, Wolf.
BLITZER: And we'll have more on the president's State of the Union Address, that's coming up, including what the Democrats would like to hear. Coming up later this hour, I'll speak live with Democratic Congresswoman Jane Harman. Also we'll take a closer look at Social Security reform, an issue that is the centerpiece of the president's domestic agenda.
To our viewers, our Web question of the day is simple: "Do you plan to watch President Bush's State of the Union Address?" You can vote right now. Go to cnn.com/wolf. We'll have the results for you later in this broadcast.
In other news around the world, the Vatican says the condition of Pope John Paul II has now stabilized following some urgent treatment for severe breathing problems. The pope was rushed to a Rome hospital yesterday. CNN's Jim Bittermann is there. He is joining us now live with details.
Jim, what's the latest on the pope's condition?
JIM BITTERMANN, CNN CORRESPONDENT: Well, Wolf, the latest we're hearing is from the No. 2 at the Vatican, the secretary of state, Angelo Soldano, who, in a very rare appearance, appeared on Italian television tonight to add his voice to those who are saying that the pope is recovering well from his coughing spasms about 24 hours ago.
And, Soldano was saying, that the pope could have been treated back home at the Vatican but because there are so many good hospitals in Rome like this one, the Vatican decided to take advantage of them.
Now that's just one in a series of very positive comments we've heard all day today, including one from the Italian prime minister, Silvio Berlusconi, who said he thought that the pope could be out of the hospital in two or three days although he was not here at the hospital visiting today.
His health minister was here and as he left here's what he had to say to journalists.
(BEGIN VIDEO CLIP)
DR. GIROLAMO SIRCHIA, ITALIAN HEALTH MINISTER (through translator): He is improving. The doctors are optimistic. The medical bulletin that has been released is absolutely truthful.
(END VIDEO CLIP)
BITTERMANN: One note of caution in all of this, and we've had now positive comments from the Vatican, from the hospital and from the government. The one note of caution to all of this is contained in a medical bulletin earlier this morning in which it was said that the pope was still suffering from a respiratory infection.
And now doctors outside of the Vatican realm tell us that a respiratory infection in someone with Parkinsons can be very serious indeed. Also the longer the pope stays in the hospital in a horizontal position, it is also possible he could come down with pneumonia or something else.
So while in fact, things may be going well, I think there's also a very strong note of caution here at the hospital tonight -- Wolf.
BLITZER: All right. Jim Bittermann, thanks very much. He's watching the condition of the pope in Rome for us, Jim, thank you.
BLITZER: When we come back it's a United Nations scandal. Now both the Clinton and Bush administrations are being implicated. We'll have some new information on the Oil-for-Food investigation.
Also, why did this private jet careen off the runway in a busy New York area airport? We'll have the latest on that. And this...
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There was nowhere else that Nicole (ph) should have been. You know, she took on New York like it was nothing.
(END VIDEO CLIP)
BLITZER: But this a entiring actress had her life cut short in the city she loved. Now new arrests in the case. Our Mary Snow is looking into this story. She'll join us live with the latest.
(COMMERCIAL BREAK)
BLITZER: Welcome back. Hundreds of college students spending a semester at sea were counting on the trip of a lifetime and that's exactly what they got, but not in the way they expected. Their dream voyage turned into an ocean odyssey when a giant wave damaged their ship and left them floundering in stormy seas.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: This is crazy! Scary!
UNIDENTIFIED FEMALE: This is not what I signed up for!
BLITZER (voice-over): But this is what they got when their semester at sea hit rough water. Almost 700 college students are taking part in the current term of the sea-based study abroad program which offers University of Pittsburgh courses.
They were less than two weeks into their three-month voyage when their ship, The Explorer, encountered a surprise storm off the coast of Alaska. Early on the morning of January 26th, the boat was rocked by a 50-foot freak wave.
TIM CLEMENT, STUDENT: I woke up and my bed was sliding across the floor and I hit my head on the other door. So I grabbed my life preserver and I put my gear on to go down.
BRITTNEY SHIPP, STUDENT: Tried to put my bed back and then I just flew into the ground and (UNINTELLIGIBLE) was like on top of me and (UNINTELLIGIBLE) table.
BLITZER: As students donned life jackets and fled their rooms, the captain explained over the intercom that the giant wave had crippled the ship.
UNIDENTIFIED MALE: This was just a big one. It was out of cycle with everybody else, came in and punched out the big center window in the bridge and brought in a lot of water. In fact the wave was higher than the bridge so we had a lot of water and shorted out all of our equipment up there and we are working now to get it back.
BLITZER: With at least two of the four engines knocked out the 24,000-ton ship was battered by gale-force winds and high seas as it struggled to reach calmer waters.
UNIDENTIFIED MALE: That's a 60-footer there.
BLITZER: The Coast Guard was dispatched, but in the end didn't have to intervene. The Explorer, under its own power, finally limped into port on Honolulu on Monday, much to the relief of anxious parents.
PAM DOWNING, PARENT: It was just frightening to think that these kids went through that.
(END VIDEOTAPE)
BLITZER: Right now the ship is undergoing repairs in Honolulu. Depending on how long that takes, students may resume their sea voyage or fly ahead to their next stop which would be in Asia.
A failed takeoff and a fiery crash, at least 19 people on this jet are now on the ground and they are hurt. What went wrong?
Plus, one ad you won't see during the Super Bowl on sunday. Why a beer commercial was pulled preemptively.
(COMMERCIAL BREAK)
BLITZER: For months, U.N. Secretary-General Kofi Annan has been struggling to deal with a huge controversy over the now defunct U.N. oil for food program for Iraq. An independent committee set up by Annan and headed by the former U.S. federal reserve chairman Paul Volcker will present an interim report on his investigation into the scandal tomorrow. But Saddam Hussein made billions of dollars more through illegal oil sales. And now CNN has obtained documents showing that the U.S. government was not only aware of what was happening, but even condoned it. Here's CNN's State Department correspondent Andrea Koppel.
(BEGIN VIDEOTAPE)
ANDREA KOPPEL, CNN CORRESPONDENT (voice-over): Secretary of State Condoleezza Rice did not mince words last month when asked about allegations of corruption within the United Nations aid program for Iraq.
CONDOLEEZZA RICE, SECRETARY OF STATE: I think it is a scandal at what happened with oil for food.
KOPPEL: What Rice did not say that was for years, according to documents obtained by CNN, the Bush and Clinton administrations turned a blind eye to oil smuggling as allies Jordan and Turkey provided Saddam Hussein with billions more in illegal revenue than he's alleged to have earned by cheating the oil for food program monitored by the U.N. Security Council.
Ned Walker was a senior State Department official for both administrations. NED WALKER, FRM. ASST. SECRETARY OF STATE: It was almost a don't ask, don't tell kind of policy. It was accepted in the security council, nobody challenged it.
KOPPEL: According to those documents, for years the State Department waved restrictions on providing U.S. aid to sanction violators like Jordan and Turkey. In 1998, for example, Clinton's deputy secretary of state Strobe Talbot acknowledged Jordan was violating U.S. sanctions by continuing to import oil from Iraq outside oil for food. Bush deputy secretary of state Richard Armitage made a similar pronouncement in October 2002 about Turkey.
Estimates are Iraq netted $206 $8 billion from smuggling oil to Jordan, Turkey and neighboring Syria. Compare that to the estimated additional $2 to $4 1/2 billion Iraq may have pocketed through illegal surcharges and kickbacks under oil for food.
WALKER: None of this was monitored by the U.N. Security Council and the oil for food program. It was off the books, so to speak.
KOPPEL: So why did the U.S. allow it to continue? The memos cite, national security interests. In the case of Jordan, Armitage said prospects for an Israeli-Palestinian peace deal.
As for Turkey, Talbot cited military containment of Iraq.
Congress has already launched multiple investigations into oil for food. And some legislators now say the U.S. shares the blame for enriching Saddam.
REP. ROBERT MENENDEZ, (D-NJ) INTERNATIONAL RELATIONS COMMITTEE: How is it that you stand on a moral footing to go after the U.N. when they're responsible for 15 percent, maybe, of the ill-gotten gains and we were part and complicit of helping him get 85 percent of the money?
KOPPEL (on camera): But State Department spokesman Adam Ereli justified U.S. policy, telling CNN Iraq-smuggled oil helped sustain two key U.S. allies during difficult times, while the money Saddam made from oil sales to Turkey and Jordan was never used to buy weapons. Andrea Koppel, CNN, at the State Department.
(END VIDEOTAPE)
BLITZER: There was a horrifying scene at an airport outside New York City. A corporate jet hurdling down the runway, but failing to gain altitude, smashing through a fence and slamming into a building.
CNN's Jason Carroll is joining us now live from Teterboro in New Jersey with the latest on this story -- Jason.
JASON CARROLL, CNN CORRESPONDENT: And, Wolf, a 16-member team from the National Transportation Safety Board has been out here now for several hours. They have recovered the cockpit voice recorder. They've also started conducting interviews to try to determine the cause of the crash. (BEGIN VIDEOTAPE)
CARROLL (voice-over): Trouble for the CO-600 corporate jet began when the pilot tried and failed to take off from Teterboro Airport. The jet careened down the runway, plowed through a fence, skidded across route 46, a local highway, crashed into the strawberry clothing warehouse and burst into flames. The jet clipped two cars on the highway, Lloyd Foster's son was driving one of them.
LLOYD FOSTER, DRIVER'S FATHER: His friend said watch out, the plane is coming and it took the car top off.
CARROLL: Eleven people were on the plane: 8 passengers, 3 crew members. Despite the flames and smoke there were no immediate fatalities. The most severely injured a motorist who is in critical condition with head injuries and a co-pilot who is in serious condition with a broken leg. Several others were treated for minor injuries.
DR. JOSEPH FELDMAN, HACKENSACK UNIV. MEDICAL CENTER: Basically, they were, what we call walking wounded. They didn't apparently have any injuries. I think that any plane crash that people walk away from is a very good thing and unusual.
CARROLL: The question now, what happened?
GOV. RICHARD CODEY, NEW JERSEY: The accident was a failed takeoff. And we want to make it clear the plane never took off.
CARROLL: A team from the National Transportation Safety Board is on site walking the runway and looking at several possible causes.
DEBBIE HERSMAN, NTSB: We're going to be looking at a number of issues, at human factors, at systems, at aircraft structures. We'll be looking at the engines and all of the equipment on the airplane.
CARROLL: In December, a similar plane, a Canadair CO-601 crashed in Colorado during takeoff. That accident killed the son of an NBC executive. Following the crash, the NTSB warned pilots of smaller planes to double check for ice on the wings, one of several possible causes for this crash.
(END VIDEOTAPE)
CARROLL: Again, the NTSB says it's too early at this point to come up with an exact cause of the crash, but they say that that could take anywhere up to several weeks, even several months -- Wolf.
BLITZER: Jason Carroll reporting for us from Teterboro in New Jersey. Jason, thanks very much.
The president of the United States about to layout his plan for overhauling Social Security in tonight's State of the Union Address, but will the Democrats buy it? I'll speak with Democratic Congresswoman Jane Harmon of California. She's standing by to join us live. Also this. (BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: And all throughout, I always wanted to retire, everybody looks forward to that, but I didn't plan well enough.
(END VIDEO CLIP)
BLITZER: The golden years lost: Why this man is opposed to the president's ideas for Social Security reform.
And later,
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I hope he wakes up feeling the same dark sorrow and despair and regret about what he did.
(END VIDEO CLIP)
BLITZER: An American dream ends in a Manhattan nightmare. And the fiance of the murder victim has a message for the suspects. CNN's Mary Snow is live in New York with dramatic details. We'll go to her soon. Stay with us.
(COMMERCIAL BREAK)
BLITZER: In just a few hours, President Bush will lay out his second-term agenda in his State of the Union address before a joint meeting of the U.S. Congress. At the core of the address, a call to privatize the Social Security system right here in the United States, at least partially.
There's more support for that among younger Americans than there is among older Americans, who generally like Social Security just the way it is.
That's what CNN's senior correspondent Allan Chernoff found out on a recent trip to the Midwest. Allan's back in New York now. He's joining us live -- Allan.
ALLAN CHERNOFF, CNN CORRESPONDENT: Wolf, we traveled to Cary, Illinois, a suburb of Chicago, where we met a family that's facing tough times and they want the president to back off.
(BEGIN VIDEOTAPE)
DON KUTHE, FORMER ELECTRICAL CONTRACTOR: Let me see what size it is first.
CHERNOFF (voice-over): Don Kuthe never thought he'd have to work at age 70, never thought he'd be helping in a hardware store to make ends meet, but that was before his stock investments collapsed five years ago.
D. KUTHE: The way the stocks were going up at that time, it was great. So, I felt secure at that particular point -- false security, unfortunately.
CHERNOFF: Kuthe, a former electrical contractor, calculates he and his wife, Joan, lost more than one-third of their nest egg. And it wasn't much to begin with. Their savings was down to about $30,000.
(on camera): The Kuthes couldn't afford to lose money in the stock market because they'd failed to save much for retirement. They depend upon Social Security and some help from their kids, one of whom bought this house for them.
JOAN KUTHE, SENIOR CITIZEN: We're very reliant on Social Security. We couldn't manage without -- Don gets a decent Social Security.
CHERNOFF: Given their experience, the Kuthes oppose the president's plan to let younger Americans invest some Social Security money in stocks.
D. KUTHE: It is working fine. Why do you want to fix something that's not broken? I don't understand it.
CHERNOFF: The Kuthes say they understand there's no danger to their Social Security benefits, $27,000 a year, and they've heard the system may be facing serious financial strain. Even so, for the sake of their children and grandchildren, they want to send a message to President Bush. Social Security is no place to let people risk their money.
D. KUTHE: If he were sensitive, he wouldn't monkey around with everybody's livelihood. He doesn't live in the real world.
CHERNOFF: Stability of Social Security is even more important for the Kuthes because of health problems that have come with advancing age. Don takes pills for high blood pressure and a bad back and insulin for diabetes. Joan has had minor strokes, four operations on her right shoulder and, this week, one on the left.
D. KUTHE: The golden years for not for sissies. It's tough.
CHERNOFF: The golden years have been anything but for the Kuthes, which is why they warn, you never know just how much you may need Social Security.
(END VIDEOTAPE)
CHERNOFF: Of course, many Americans do favor putting Social Security money to work in the stock market, but people who have been burned in the market, like the Kuthes, believe that stocks could cut the safety net that is Social Security -- Wolf.
BLITZER: Allan Chernoff reporting for us from New York -- Allan, thanks very much.
CNN's Judy Woodruff is joining us now live from Capitol Hill to talk a little bit more about what the president's expected to say tonight.
Judy, thanks very much. Let's talk a little bit about Social Security. Give us some perspective. How big of a deal is this, this reform initiative that the president is about to put on the table?
JUDY WOODRUFF, CNN ANCHOR: Well, it is an enormous deal, Wolf.
The White House is making it clear this is priority No. 1 domestically. And I think, if the president could talk to that family that Allan Chernoff talked to in the Chicago suburbs, he would say, it may not be broken right now, but it's going to be broken in just a matter of years and we need to act now to do something about it.
So, Wolf, you and I were at the White House today. We were part of a group of television news anchors who were invited to have lunch with the president to hear more about this plan. We can't talk about specifics until the address, but essentially the president is determined to leave as part of his legacy a reform of Social Security. He thinks it is a system in -- he was using the word in crisis. He's not saying that anymore.
He's saying it's a problem, but he's saying we need to move aggressively and part of it has to be those personal retirement accounts, which will do exactly what you've just been discussing.
BLITZER: The president first has to convince the American public that there is a problem right now. That in and of itself won't necessarily be all that easy.
WOODRUFF: No, it won't, because people -- many people look at the returns they're getting now and they're saying, look, it may not make me rich, but at least it gets me through. It gives me security.
But the president and the economic advisers who he listens to have looked at the numbers. They've looked at the statistical tables. They see revenues not meeting demand by the end of the next decade. And they say the time is now to act. They say there's a way to do it, so that people who are nearing retirement now will not be in any jeopardy, but in a way that younger Americans can begin to have some options.
So, we're going to hear a lot more about that tonight.
BLITZER: All right, Judy Woodruff reporting for us from Capitol Hill -- thank you, Judy.
WOODRUFF: Thanks, Wolf.
BLITZER: So what do the Democrats want to hear tonight in the president's State of the Union address? Let's get some Democratic anticipation from Congresswoman Jane Harman of California.
Congresswoman, thanks very much for joining us.
REP. JANE HARMAN (D), CALIFORNIA: Thank you, Wolf. BLITZER: There is a problem long term that Social Security -- it has to be addressed. Even Bill Clinton in 1998 said you have to deal with it sooner rather than later.
HARMAN: Well, I agree with that. But the president said he wanted to be a uniter, not a divider in his second term. So he picks as his first issue probably the most divisive issue in Congress.
I would suggest to him that he put the problem on the table, have all the potential solutions be there, and we'll have a conversation for the next year or so.
BLITZER: But that's what he's planning on doing.
HARMAN: Well, I don't think so. I think he is going to put a controversial program on the table and say this is what I plan to do and you are going to do it my way, which is not the way to start a friendly conversation.
(CROSSTALK)
BLITZER: I think what he wants to do -- and I could be wrong. I think what he wants to do is say, look, these are various options. You can raise the caps, raise the retirement age. You can change the benefits. I'm willing to listen to all these various options. Let's negotiate. Let's start a dialogue to deal with it.
HARMAN: Well, I'm for starting a dialogue, including the fact that at least these personal accounts will add $2 trillion to the deficit if you make everybody over 55. That gets my attention whole. And our deficit debt are our huge problems. And the entitlement program that's broken is Medicare and Medicaid, health care costs. That's the one we should tackle first.
And, again, if the president wants to unite us, there is a way to forge a bipartisan solution that will work for health care. And I would say that let's follow the example of the intelligence reform bill, which we passed last fall. That was a bipartisan bill. It took a lot of work, but we did something very meaningful. And that should be the way we move forward.
BLITZER: Are you among those Democrats, like Senator Kennedy, who says there has to be a timetable to start withdrawing U.S. troops from Iraq?
HARMAN: No. I respectfully disagree with that.
I think the election on Sunday was a triumph of the human spirit. And we should celebrate it. And the administration does get some of the credit for very good planning. I wish that we'd had that planning two years ago, but, nonetheless, this was well planned. And the Iraqis get the lion's share of the credit.
But now the U.S. role should be to train an excellent Iraqi security force. And when that's done, we should remove ourselves, but let's focus not just on fighting the war on terror. Let's focus on winning the war. We have many more tools we need to use. And I applaud Condoleezza Rice in her first days in office for taking a tour of Europe to soothe European feelings and then for going to the Middle East, where I hope not only she, but the president personally will become engaged.
BLITZER: Will you support a large aid package, U.S. aid package for the Palestinians right now?
HARMAN: I support two things -- three things, the leadership in the region. I think Abu Musab al-Zarqawi, democratically elected, will be an excellent leader for the Palestinians. Ariel Sharon is proving very adroit at engaging with the Palestinians. I'm exciting about their meeting face-to-face next week in Egypt.
Yes, I'll support aid, but I also think that goes with the message that the terror has to stop. And I am very impressed, a little bit weary, but very impressed that most of the terror organizations inside the Palestinian Authority have ceased their terror tactics for the moment.
BLITZER: What posture do you want the president personally to take in trying to bring the Israelis and the Palestinians together?
HARMAN: Well, I think the president can help deliver that message that the terror attacks have to stop first. And, hopefully, he can make Abu Musab al-Zarqawi -- give him the strength he needs to bring all the terrorist organizations in the tent. Hamas is still outside the tent in the Palestinian region. And that's a problem.
But he can help that leadership and be stronger with an aid package. He also has to deliver a message to the Israelis that staying engaged and working on the withdrawal of Gaza in coordination with the Palestinians is a good thing. I am pleased to see that meetings in Egypt -- Egypt has played a constructive role and should continue to do that.
And I am also pleased that King Abdullah of Jordan, who is a real hero in the region, will attend that meeting. This is very good news. And that's something, again, that I would cite if I were the president tonight.
BLITZER: I suspect he is going to voice some optimism tonight, at least some hope on that Israeli-Palestinian front.
Jane Harman, thanks very much.
HARMAN: Thank you, Wolf.
BLITZER: Murder in Manhattan. The dream of becoming a big star abruptly ends for one aspiring actress after being gunned down in a robbery. This is a heartbreaking story. The police now have three suspects in custody.
And later, Anheuser-Busch pulls a commercial slated to run during the Super Bowl to avoid a face-off potentially with the FCC. We'll have details of that. (COMMERCIAL BREAK)
BLITZER: In New York, pictures of a murder suspect in a police car. Two other suspects are also under arrest. The victim, an aspiring actress.
CNN's Mary Snow is joining us now live from New York with the latest on this heartbreaking story -- Mary.
MARY SNOW, CNN CORRESPONDENT: Wolf, police say it started out as a purse-snatching. And today came the latest arrest. And now two teenage girls and a 19-year-old man stand accused of murdering a 28- year-old woman. During the robbery, the victim reportedly asked the group, what are you going to do, shoot me? Shortly after that, she died of a gunshot wound to the chest.
(BEGIN VIDEOTAPE)
SNOW (voice-over): Christmas, 2004, the last pictures Jeffrey Sparks has of his fiance, Nicole duFresne.
JEFFREY SPARKS, FIANCEE OF NICOLE DUFRESNE: The pictures look good. She took a good picture, but she was so much more beautiful in real life. I mean, her eyes just, you know, really had the spark of her soul. And that was the beautiful part.
SNOW: Wounds from last Thursday's attack are still visible on Jeffrey Sparks' eye, an attack he says that started while they were out with friends, a man and woman, when a group of teens approached them. Police released a surveillance tape that they say captured a green of teens at about the time of the murder. And the tape helped them arrest five teenagers. All were charged with robbery, three of them also charged with second-degree murder.
A 19-year-old also got first-degree murder charges for allegedly firing a .357-caliber gun at duFresne. Sparks says, if the suspect is convicted, he hopes they will share something in common.
SPARKS: I hope he wakes up feeling the same dark sorrow and despair and regret about what he did that I do for the rest of his life, because I will. And he made that decision for both of us.
SNOW: A makeshift memorial now marks the site where duFresne was killed in Manhattan, a city where she, like so many others, came to realize her dream of being an actress and a writer. In the big city, her fiancee says, she was not afraid.
SPARKS: There was nowhere else that Nicole should have been. You know, she took on New York like it was nothing.
SNOW: DuFresne's murder took place on the Lower East Side, a neighborhood that's been transformed over the years and attracts many young people, prompting a question to the city's police commissioner about its safety.
RAYMOND KELLY, NYPD COMMISSIONER: The neighborhood is very safe, as are most neighborhoods in New York City.
SNOW: Nicole's fiance says Nicole impacted the lives of many people here and now he hopes others will live her legacy.
SPARKS: It really is the best plan to live life to its fullest. It really is the best plan to love to its fullest, love honestly, love purely, and don't be afraid to love. She wasn't.
(END VIDEOTAPE)
SNOW: The Manhattan district attorney's office says that the suspects have not yet been arraigned on an indictment, so they have not yet entered a plea.
Tomorrow, here in New York, there will be a memorial for the victim. And a scholarship has been set up in her name at Emory College, where she went to school -- Wolf.
BLITZER: So sad, so sad, indeed. These young people, they come to New York. They're looking for a career. They're looking for excitement, and this happens. What a heartbreaking moment.
Mary Snow, thanks very much.
Super Bowl advertisers are vying for commercial spots on Sunday's game, but find out why you won't be seeing a certain beer commercial on TV this weekend. Brian Todd has details.
And are you ready for six more weeks of winter? We'll tell you if the groundhog saw his shadow.
We'll be right back.
(COMMERCIAL BREAK)
BLITZER: Remember the infamous wardrobe malfunction during last year's halftime show at the Super Bowl? One advertiser has a new commercial that pokes fun at that incident, but you won't be seeing it during Sunday's Super Bowl broadcast.
CNN's Brian Todd is joining us now with an explanation.
What's going on, Brian?
BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, lots of questions over why Anheuser-Busch has decided to not run this, because the ad is creative, funny and decidedly tame.
(BEGIN VIDEOTAPE)
TODD (voice-over): The setting, backstage before last year's halftime show. The dilemma, a stagehand can't find an opener for his Bud Light. The solution? Janet Jackson's outfit. The outfit rips in the now infamous place after his feeble attempt at repairing it.
(BEGIN VIDEO CLIP, AD) UNIDENTIFIED ACTOR: Whoa, that's something you don't see every day.
(END VIDEO CLIP)
TODD: And you won't see it on TV this Sunday. Anheuser-Busch tells CNN it decided to not run this ad in its Super Bowl lineup after what a company official called discussions with Fox Sports and the NFL. This spot entitled "Wardrobe Malfunction" doesn't even approach nudity, has no racy language, hardly any dialogue at all. Janet Jackson appears nowhere.
STUART ELLIOTT, "THE NEW YORK TIMES": I think that the consensus was reached that it -- they didn't want to reopen the can of worms that the halftime show was last year.
TODD: A statement from Anheuser-Busch reads in part: "In consumer research, beer drinkers told us they loved the spot. However, some said that they didn't want to be reminded of the incident."
Anheuser-Busch says there was no pressure from anyone to nix the commercial. A Fox sports official tells us this is more about not wanting to make light of the situation last year that offended a lot of people. An NFL spokesman says league officials simply stated their opinion that the ad is inappropriate. The FCC won't comment on a commercial that hasn't aired. Last year, the FCC fined CBS and its owned and operated stations more than a half a million dollars for the halftime show where Jackson's breast was exposed.
Are we now at the stage where a company preemptively self-censors even a benign ad to avoid the wrath of the FCC?
ELLIOTT: I think the whole issue of what happened last year during the halftime show was not only a question of the FCC. I think it was also a question of hundreds of thousands of viewers of the Super Bowl, rightly or wrongly, being offended.
TODD: But are we all being played for publicity? Anheuser-Busch says this spot won't air on TV, but look at how it's featured on their Web site.
UNIDENTIFIED FEMALE: We have some huge surprises for you during the big game, and I'm not talking about wardrobe malfunctions.
(END VIDEOTAPE)
TODD: And more than one ad critic told us this could have been a very clever ploy from the start from Anheuser-Busch to generate buzz for this ad. An official with Anheuser-Busch flatly denies that. And critics point out, advertisers across the board are very conscious of possible FCC backlash and that will be reflected in the Super Bowl ads this year, Wolf.
BLITZER: All right, very interesting. Brian Todd, thanks very much. We'll all be watching those commercials during the Super Bowl. TODD: That's right.
BLITZER: I'll mostly be watching the game, though. That's what interests me.
We'll take a quick break. We'll have the results of our web question of the day. That's coming up next.
(COMMERCIAL BREAK)
BLITZER: Here are the results of our Web question of the day. Remember, this is not a scientific poll.
I'll be back later tonight to anchor our coverage around the president's State of the Union address. Our special coverage begins with Paula Zahn at 8:00 p.m. Eastern.
"LOU DOBBS TONIGHT" starts right now.
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