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CNN Wolf Blitzer Reports

Bush's Approval Ratings Go Up; Dean Widely Expected to Head DNC

Aired February 07, 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, HOST: Happening now. We're getting new poll numbers in on President Bush's job approval rating. There has been a significant shift.
Our new CNN/"USA Today"/Gallup poll also rates the Democrats and Howard Dean who's now widely expected to become his party's next chairman.

Stand by for hard news on WOLF BLITZER REPORT.

(BEGIN VIDEOTAPE)

(voice-over): Your tax dollars at work.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's a budget that is a lean budget.

BLITZER: Credited also a mean budget?

Facing the acts, some programs meant to help the poor.

Will it be a cease-fire summit?

CONDOLEEZZA RICE, SECRETARY OF STATE: This is a time of hope.

BLITZER: Mid-East leaders plan big announcement...

(AUDIO GAP)

BLITZER: We apologize for that technical problem but let's begin our news with what's happening in the Middle East right now. The Israeli and Palestinian leaders will hold their first summit meeting tomorrow in the Egyptian resort town of Sharm el-Sheikh and they plan a huge announcement. This follows a visit from the Secretary of State Condoleezza Rice who promised that the United States will do what it can to help breath new life into the peace process. CNN's Guy Raz reports from the West Bank city of Ramallah.

(BEGIN VIDEOTAPE)

GUY RAZ, CNN CORRESPONDENT (voice-over): Flooding in the West Bank that seems to have washed away the violence for now. Heavy rains to coincide with an imminent mutual cease-fire declaration set to be delivered on Tuesday. An end, perhaps, to the bloodshed that's left 4,000 Palestinians and Israelis dead over the past four years. RA'ANAN GISSIN, SR. SHARON ADVISER: This resolution really is, I should say, a combination of unilateral cease-fire on both sides with, I would say, bilateral results. In other words, it will be quiet on the ground. I think for the first time after 4 1/2 years, there is real hope on both sides and real determination, which is more important, to make it work.

RAZ: For Secretary of State Rice, a time of optimism as well.

RICE: This is a time of hope, a time when we can hope for a better day for the Palestinian and the Israeli people both.

RAZ: This was the first high level U.S. convoy to roll into Ramallah in nearly three years, a signal of the Bush administration's confidence in the new Palestinian leadership. And the message the U.S. is back in the game.

RICE: The United States will do its part. We will be active in this process with our partners.

RAZ: Palestinian President Mahmoud Abbas, pleased with the high level visit, spoke about the upcoming meeting in Egypt with his Israeli counterpart.

PRESIDENT MAHMOUD ABBAS, PALESTINIAN AUTHORITY (through translator): We hope that the outcome of this summit will be positive so we can build on it and so that there will be other meetings between us and the Israeli prime minister.

RAZ: With the mutual truce announcement, that meeting is likely to be as substantive as it will be symbolic.

Condoleezza Rice pledged to take an active role in helping to revive the peace process. She joins a long list of U.S. envoys who have tried to do the same. But with the new Palestinian government and an Israeli commitment to withdraw from Gaza the prospects for peace appear closer than they have in the past four years. Guy Raz, CNN, Ramallah.

(END VIDEOTAPE)

BLITZER: Before leaving the Middle East, Secretary Rice announced that U.S. Army Lieutenant General William ward will arrive in the weeks ahead to serve as a security coordinator dealing with the Palestinians. Rice is now in Rome where she's to meet tomorrow with Italian and Vatican officials. After that, she goes to France where she's expected to deliver what's being billed a major foreign policy address.

Syria today announced it will buy apples from Arab farmers on the Golan Heights, territory captured by Israel in 1967 and later annexed. Syria still one of Israel's bitter foes made clear that the fruit -- and I'm quoting now is grown on Syrian land and owned by Syrians. but the move is still unprecedented. And Israel responded positively saying it hopes such trade will become common in the region as the region moves toward peace. Secretary of State Rice calls it a time of hope in the Middle East. But hopes have been dashed before. Is this time any different? Joining us now our world affairs analyst and former defense secretary William Cohen. Mr. Secretary, thanks very much. Is this time any different?

WILLIAM COHEN, FMR. DEFENSE SECRETARY: I think it is different. The mood is different right now. You have a new leader for the Palestinians. You have an indication on the part of the Israelis that they're prepared to work with him. We have seen the proposal for the unilateral withdrawal from Gaza and a commitment on the part of Mahmoud Abbas to do whatever he can to quell the violence.

So all of this is very positive. Now with the upcoming summit, I think with Egypt getting involved, the king of Jordan, King Abdullah getting involved, that's all very positive. But as your piece pointed out, hopes have been dashed in the past. So we tend to oscillate between unbridled optimism and unbridled pessimism on the other side.

BLITZER: It seems like the Bush administration has a strategy though. In the State of the Union address, the president announced $350 million in aid to the Palestinians. Condoleezza Rice goes there and meets with Ariel Sharon, Mahmoud Abbas, announces Lieutenant General William Ward is now going to be the security coordinator. There seems to be a strategy at least that the administration is developing.

COHEN: The one thing that has to be done very quickly and that is to empower Mahmoud Abbas. He has to demonstrate to the Palestinians that by virtue of his leadership and by virtue of calling upon them to lay down their arms or have a cease-fire or period of calm, as he might describe it, that there's something in it for them, that there is hope for them, economic opportunity, rebuilding the infrastructure. The first step in a long process but nonetheless, an important one. So all of this is very well laid out, step by step, but it can't take too long. Because otherwise whenever any kind of a lag in time, those who are uncommitted to this process, who are determined to destroy it move in and start exploding their bombs.

BLITZER: What do you make of this decision to ask a lieutenant general in the U.S. army to leave the European command and take on this new portfolio, this new mission?

COHEN: Well, he's very capable. He enjoys strong support from the administration. I know I talked earlier with the former chairman of the joint chiefs Hugh Shelton who worked very closely with him when he was a J-3 in the intelligence -- in the joint staff. Very highly regarded and will do a great job in that position.

BLITZER: I know for a fact that top administration officials didn't want a CIA person to have this responsibility. The last time around George Tenet, the CIA director and others in the CIA served as this sort of security liaison to the Palestinians. This time they deliberately didn't want someone from the CIA. You understand their thinking? COHEN: But he has a background in intelligence, he also has a background in public affairs. So he'll look at it from a political and intelligence point of view. He brings that combination of skills together. I think it's a very important delegation to him.

BLITZER: Secretary Cohen, thanks very much.

COHEN: Good to be here.

BLITZER: Let's hope that this does lead to something positive. We'll be having extensive coverage tomorrow of that Israeli/Palestinian summit in Sharm el-Sheikh.

President Bush and his party got a boost today, a new poll shows a surprising swing in his job approval rating. Our senior political analyst Bill Schneider will have details all of the poll numbers. That's coming up just a little bit later.

First, the Bush administration delivered its budget to the doorstep of Congress today and it landed with a bit of a thud. The four volume plan calls for spending $2.5 trillion during the next fiscal year. The budget would kill or cut 150 programs, among them, some social services for needy Americans. The plan does not include the costs of the wars in Iraq and Afghanistan or of overhauling Social Security or of making earlier enacted tax cuts permanent. Still, the president insists his budget is aimed at reducing the deficit.

(BEGIN VIDEO CLIP)

BUSH: The important question that needs to be asked for all constituencies is whether or not the programs achieve a certain result. Have we set goals and are those goals being met? And the poor and disadvantaged absolutely ought to be asking that question, too. In other words, what is the goal of a particular program? And if that goal isn't being met the question ought to be asked, why isn't the goal being met. And that's the questions we've been asking.

(END VIDEO CLIP)

BLITZER: The president is calling on Congress to treat his budget responsibly. But Democrats are already calling it a hoax but the budget battle to come is going to be intense. Let's go live to our Capitol Hill correspondent Ed Henry. He's joining us now live. Ed, what's the sort of immediate reaction from the Hill?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: A lot of attacks from Democrats saying that those cuts to social services go way too deep and they need to be stopped. In fact, as you know in the corridors of the Capitol it has long been said that the president proposes, Congress disposes. Key lawmakers on both sides saying that major parts of this budget will in fact be disposed, will be tossed aside. They feel that some of the cuts go too far. It is not a surprise obviously that Democrats are pouncing on the details saying that they believe cuts in education, health care, veterans programs as well as environmental programs as well as Amtrak go too far and need to be stopped. Now, Republican lawmakers are also saying they have concerns about some of the cuts as well. They feel now is a time of sacrifice. Everything needs to be on the table. Among the Democrats leading the charge today, Kent Conrad who said his biggest problem with this budget is that a lot of the details are left out.

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD (D), NORTH DAKOTA: This is a hide and seek budget, because you've got to look very carefully to find out what's going on. And if you pull back the curtain you find something quite different than what the president wants you to see. This is all the president wants you to see with respect to his tax cuts. He just wants you to look at the first five years. He doesn't want you to look beyond that.

(END VIDEO CLIP)

HENRY: Democrats saying that the budget does not include the $80 billion for the ongoing war in Iraq as well as Afghanistan, that the president has talked about proposing soon. That's not included as well as making the tax cuts permanent. Also Social Security costs not included here. Republican budget chairman in the Senate Judd Gregg though today said that while some of these programs undoubtedly will get some Republican support, there will be some pushback. He said that it is time for the government to tighten its belt.

(BEGIN VIDEO CLIP)

SEN. JUDD GREGG (R), NEW HAMPSHIRE: When you're at war, you got to make some difficult decisions. The first decision you have to make, which isn't very difficult, is you support the people in the field, you make sure they have what they need, you make sure we have as a nation, and we are doing what is necessary to protect ourselves.

(END VIDEO CLIP)

HENRY: And the biggest battle on the domestic front, of course, will be Social Security. Democrats today saying given all this talk about budget cuts, about deficits, it will be very hard for the president to sell his Social Security plan with transition costs ranging from $2 trillion to $4.5 trillion.

BLITZER: Ed Henry on the Hill for us. Thanks very much, Ed.

Remember, the government reaches into a different pocket to pay for the wars in Iraq and Afghanistan, but the new budget still sets plenty aside for the Pentagon. For details, let's turn to our senior Pentagon correspondent Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Wolf, that Pentagon budget comes in at $419 billion. That's up 5 percent over last year, almost. That's unless you count the cost of the war in Iraq and Afghanistan. That pushes the total defense spending up to nearly $500 billion.

(BEGIN VIDEOTAPE)

(voice-over): The centerpiece of the Pentagon's spending plan is Defense Secretary Donald Rumsfeld's pet project to transform the military into a lighter, more mobile force.

DONALD RUMSFELD, DEFENSE SECRETARY: I know that people have thought that when someone uses the words agile, lethal, expeditionary, they think that means smaller. It doesn't. It isn't the size of the force that was wrong. It's the shape of the force. And the capability of the force.

(END VIDEO CLIP)

MCINTYRE: Rumsfeld has already increased the size of the army by some 30,000 troops, using his emergency authority. And the army is hinting it may want that change to be permanent as it reorganizes from 10 divisions into 43 independently deployable brigades. The budget puts $4 billion more into counterterrorism and special operations, while slashing some big ticket weapons systems, like the expensive F- 22 Raptor fighter plane. A $10.5 billion cut in the F-22 acquisition program will reduce the number of planes bought from 277 to about 180.

Ending production of the J model of the venerable C-130 cargo plane will save another $5 billion. Both planes are built by Lockheed Martin which says it may have to lay off workers at its Marietta, Georgia plant if Congress approves the cuts.

Missile defense will take a $1 billion hit as spending drops to about $9 billion. And the Navy is cutting one carrier from its fleet of 12 aircraft carriers, but insists its new deployment plan will actually make the smaller fleet more able to respond to world crises.

(END VIDEOTAPE)

(on camera): And Wolf, you know one of the hottest button issues in this budget is the $1.9 billion for another round of base closings. That is very politically sensitive.

BLITZER: Sensitive indeed, especially for those communities, those states where those bases are slated to be shut down. Thanks very much.

Is it a tarnished tour of duty? Up next, what got one female American soldier in muddy water?

Plus a car bombing in Baqubah, a suicide bombing in Mosul. Once again, Iraqi police and would-be police are the targets and the victims. We'll have a report. That's coming up from Baghdad.

And later...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I saw the pilots pulling on that yoke trying to lift the plane, but it wouldn't lift. The next thing I saw that fence. That's when I knew that it was my life in the line. (END VIDEO CLIP)

BLITZER: A survivor's story. Her plane failed to take off and crashed into a warehouse, bursting into flames. How one flight attendant made it out alive. She'll join us and tell her incredible story.

(COMMERCIAL BREAK)

BLITZER: In Massachusetts, a jury has found defrocked Roman Catholic priest Paul Shanley guilty of raping and fondling a boy two decades ago. The verdict handed down in Cambridge just a short time ago came -- came in Cambridge. The case had hinged on a now 27-year- old firefighter who said Shanley repeatedly raped and molested him at a Boston area church. The man said he'd forgotten about the abuse. But he claims the memories came flooding back three years ago as the pedophile priest scandal rocked the archdiocese of Boston. Shanley could face up to life in prison. Sentencing is a week from tomorrow.

There's an unusual twist to a deadly crime spree in the New York City area. Two of the people charged are a mother and her son. CNN's Mary Snow joining us now live from New York with more -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, police in Nassau County, New York, say it is one of the most intense manhunts they can remember in recent history. It involved officers from three states over a two- month time span. Over the weekend, a suspected fugitive was taken into custody and now his mother is also under arrest.

(BEGIN VIDEOTAPE)

(voice-over): He was the target of a nationwide manhunt, accused of a deadly robbery spree in two states. One day after Christopher Demayo (ph) surrendered to SWAT teams in New Jersey, police arrested his mother and charged her with being his accomplice.

LT. DENNIS FARRELL, NASSAU COUNTY POLICE: She was in the car when they were scouting potential sites. There's no question that she knew what was going on.

SNOW: 40-year-old Maryann Taylor-Casey (ph) pleaded not guilty to charges of second degree murder and first degree robbery, but police say she told them she helped her son to get cash for heroin. She was arrested at a boarding home. Neighbors don't know much about her.

UNIDENTIFIED MALE: To be honest with you, the cops come all hours of the night, all hours of the day.

SNOW: Police accuse Taylor-Casey of driving a getaway car for her son from the scene of a December jewelry store robbery, a store manager was killed. Police don't know if she played a role in any of the other three robberies linked to her son. The latest one was last week in Fairfield, Connecticut. The husband and wife jewelry store owners were shot to death. UNIDENTIFIED MALE: His M.O. is to enter the store, gain the confidence of the employees and/or owners under the pretense of wanting to buy jewelry or other items.

SNOW: But police say Demayo's reputation as a gambler helped officers track him down in Atlantic City where he surrendered after a five-hour standoff. His girlfriend Nicole Pierce (ph), also was taken into custody. Both are expected to be extradited to New York Tuesday to face charges. Police say Demayo, his girlfriend and his mother have one thing in common, a heroin habit.

(END VIDEOTAPE)

SNOW: Now, the suspect and his girlfriend were both in court in New Jersey today. They are expected to be taken to New York where they face murder and robbery charges -- Wolf.

BLITZER: Mary Snow in New York with that story. Thanks, Mary, very much.

In a moment, the big unveiling with a few surprises for the nation's citizens. Who gains, who loses under the new Bush budget? Joining me live from the White House, the White House Budget Director Joshua Bolton.

Plus a survivor of this corporate jet crash shares her terrifying ordeal with us.

And a million dollar mess. Take a look at this. California mansions literally on the brink of destruction. The culprit? Nature.

(COMMERCIAL BREAK)

BLITZER: There are some major shifts in a new CNN/USA Today/Gallup poll, a poll just out in the past couple hours. Our senior political analyst Bill Schneider has been looking at the numbers and the story behind them.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST CORRESPONDENT (voice-over): President Bush's job approval is up, 57 percent. Higher than the 51 percent who voted to re-elect him three months ago. Well, sure, you say, he just delivered his State of the Union.

But the main topic of that speech was Social Security, and the president's approval rating on Social Security did not change much. What did change? Iraq. Up 8 points. What happened? The January 30th election.

RUMSFELD: To the people who put their names on the ballots showed a great deal of courage. And that has to be inspirational for the people of Iraq, to see that movement forward politically.

SCHNEIDER: It was also encouraging for Americans who didn't expect too much from the Iraqi election. SEN. JOHN KERRY (D), MASSACHUSETTS: Well, the early indications are pretty much what I think we expected.

SCHNEIDER: Actually, more than 60 percent of Americans say the Iraqi election went better than they expected. And there's been a turnaround of opinion about whether the war in Iraq was a mistake. Last month, most Americans said it was a mistake to send U.S. troops to Iraq. Now most say Iraq was not a mistake.

The public is not so sure about the president's Social Security plan. They disapprove of it by 50 to 44 percent. In his State of the Union speech, President Bush aimed his pitch at younger workers.

BUSH: Your money will grow over time at a greater rate than anything the current system can deliver.

SCHNEIDER: But Americans under 55 are not showing much enthusiasm for the president's proposal. They're divided, 45 percent like it, 48 percent don't. President Bush reassured older workers that for them, Social Security would not change in any way. Didn't matter. Older Americans are solidly opposed to the president's plan.

(END VIDEOTAPE)

SCHNEIDER: What's giving the president a boost isn't the news from Washington, it's the news from Baghdad.

BLITZER: It's very interesting. But as good as these numbers are for the president, bad numbers for the Democrats. Talk about what the American public is saying in this poll as far as their attitude towards Democrats are concerned.

SCHNEIDER: Not very good at all. The public in fact has a 47 percent unfavorable view of the Democratic Party. That is the least favorable view of the Democrats in at least 13 years. You'll notice that the favorable view of the Republicans is 56, the Democrats 46. That's a very negative view.

Now this is not unusual right after a president's inauguration that the opposition party does poorly. But these are very bad numbers right now.

BLITZER: The Democratic Party is about to get a new chairman, Howard Dean. What does the American public think of him?

SCHNEIDER: Not much. We asked people what do you think of Howard Dean? Favorable, unfavorable? And the answer was only 31 percent have a favorable view of former Governor Dean, 38 percent unfavorable and about a third unsure. That's a negative view of a man who is just about to take over the Democratic Party. It doesn't look like he is going to lift the party very much, although he may be able to raise some money.

BLITZER: I'm sure he'll be able to do that. They have their work cut out for them, the Democrats.

SCHNEIDER: They certainly do.

BLITZER: Bill Schneider, thanks very much. There are new attacks right now in Iraq. Dozens are killed in separate bombings. We'll show you where, what's going on.

And the new Bush budget. Under fire already from some critics, likely and unlikely. The White House Budget Director Josh Bolton standing by at the White House. He'll join us live.

And a survivor of a corporate jet crash shares her amazing story with us. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

A deadly day in Iraq, and U.S. troops aren't the only targets. We'll have a report from Baghdad. That's coming up.

First, what's happening in the news right now.

There are new hopes today for the troubled Middle East peace process. The Israeli prime minister, Ariel Sharon, and the Palestinian Authority president, Mahmoud Abbas, plan to announce a cease-fire at tomorrow's summit in Egypt. Officials say Palestinians will declare an end to violence, terrorism and incitement against Israel. In return, Israel will refrain from military action to the extent that the Palestinians fulfill their pledges and commitments. We'll have extensive coverage tomorrow.

The man who once led the search for weapons of mass destruction in Iraq has some words of warning for the Bush administration as it confronts Iran over its nuclear ambitions. In an opinion piece in "The Washington Post," David Kay says the hunt for banned weapons in Iraq was a failure driven by faulty intelligence. And he says the U.S. should not repeat the same mistakes as it deals now with Iran.

United Nations Secretary-General Kofi Annan has suspended two employees connected to the scandal-tainted oil-for-food program in Iraq, that decision after an independent investigation accused both men of misconduct. The suspended employees include the former head of the program and a senior official that dealt with contracts. The now defunct program allowed Iraq to sell oil in exchange for humanitarian supplies.

Dozens of people have died in Iraq today in the latest round of attacks by insurgents. Violence has escalated since last week's election.

Our senior international correspondent, Nic Robertson, has this report from Baghdad.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: The two attacks came within an hour of each other, the first in the northern town of Mosul about 10:30 a.m. in the morning. A suicide bomber walked into a police recruitment center, detonated his explosives. At least 12 people killed there and at least four wounded in that particular attack.

Already, a jihadi organization has claimed on its Web site, claimed responsibility for that particular attack. Also, in Mosul, three mortar rounds fired at a government building, one of those rounds falling close to a cafe. One person killed, three wounded, we're told. Coalition officials in Mosul say they've had some success in the last 24 hours. People have told them about two roadside bombs.

They've been able to send out explosives teams who have been able to detonate those bombs without them going off, without them being able to target military or civilian vehicles traveling up and down the roads. But the second targeting of young police recruits came in the town of Baquba, that about 11:00 in the morning, about 50 kilometers northeast of Baghdad.

The recruits were standing outside the police station, we've been told. A saloon car packed full of explosives pulled up. The vehicle detonated, at least 14 people killed, 16 wounded, one of the largest explosions in Baquba for some time, we've been told. Chunks of neighboring buildings were blown off the buildings.

We've also been told that that, at that time, there were some 200 police recruits already inside the police station. Most of these escaped unharmed.

Nic Robertson, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: More now on President Bush's 2006 budget. It comes in at just over $2.5 trillion, targeting 150 domestic programs for either cutbacks or elimination, while projecting a record $427 billion deficit this year.

Joining us now from the White House, the point man for the president's budget, the budget director, Joshua Bolten.

Mr. Bolten, thanks very much for joining us.

JOSHUA BOLTEN, WHITE HOUSE BUDGET DIRECTOR: Thanks for having me.

BLITZER: The president has submitted budgets every year since becoming president. These are recommendations for the Congress. The Congress almost always does what it wants and almost always forgets about the recommendations for budget cuts from the president, goes ahead and approves new plans, and the president signs those bills into law. He has not yet once used his veto pen.

Will he use his veto pen if they decide these cuts that you're proposing now are not worth it?

BOLTEN: Well, Wolf, the record is actually pretty good on working with this Congress.

Last year is a good example. When we introduced the budget, the president called for 4 percent overall growth in discretionary spending, no more, and only 1 percent growth in the nondefense elements of discretionary spending. That was declared dead on arrival by a lot of Democrats. And what did the Congress deliver? Exactly what the president asked for in those overall spending limits. So the argument that the president hasn't gotten what he wanted is incorrect.

(CROSSTALK)

BLITZER: I'm talking about specific recommendations for programs that he wanted eliminated last time. What, there were about 60 such plans. And 20 of them were eliminated. Forty of them remain on the books.

BOLTEN: Yes, on the specifics, especially some of the smaller specifics, it is very hard to get rid of individual programs. But the president's veto pen is -- it ought to be used for whether they hit the spending targets or not, not whether individual programs were in or not.

But we're going to be fighting hard for those. And I think this year, there's a new spirit that I sense on Capitol Hill, at least in the Republican caucus. And I'm pretty optimistic that we are not going to get all of the cuts and reductions that we're asking for, but I'm pretty optimistic that we'll have stronger support than we've had in the past.

BLITZER: The president wants to cut in half the budget deficit. But the numbers he introduced today, that you introduced today, don't include the cost for Social Security reform, do they?

BOLTEN: We didn't include in the prepared budget anything about Social Security, in part because we put the budget to bed about two or three weeks ago. And the president's proposals have only just now started to come out.

BLITZER: How much do you estimate it will cost for these Social Security reforms over the next 10 years?

BOLTEN: All we show is the five-year budget picture up through 2010. And what we showed in our original budget documents is the deficit being reduced from about 3.6 percent of GDP today to about 1.5 percent of GDP by 2009.

What those Social Security transition financing elements would do is add about 0.2 of 1 percent.

BLITZER: It would add over 10 years, you believe, $800 billion. The Democrats say closer to $2 trillion. That would do devastation to the cutting in half the budget deficit, wouldn't it, either way?

BOLTEN: No.

As I was saying, what it would do in 2009 and 2010 is raise us to about 1.7 percent of GDP, which is way below the historic average of 2.3 percent of GDP. So, the president's plans don't threaten that.

The other thing to keep in mind about these transition financing expenses is that that's not new debt to the government. That's bringing forward obligations we already owe and we are going to have to pay later in the form of benefits. We're letting people keep that money earlier. So the claim that it is fiscally reckless in some fashion to make room for those personal accounts is just flat wrong.

BLITZER: What about making permanent the tax cuts that have been approved during the first term, making those permanent? Are those numbers in that budget, what that would cost?

BOLTEN: Yes, they are included in the budget.

BLITZER: Only for the first five years, though.

BOLTEN: Well, we only do five years worth of budgeting. So, we can't include stuff where we're not doing the budgeting.

But even beyond that five-year window, which takes us out to 2010, our rough estimates show that, with the permanence of the president's tax cuts, we still see the percent of GDP that revenues are taking rising up to the historic average of 18 percent. And we still see declining deficits. So, the president's tax cuts aren't threatening our budget picture.

In fact, the president's tax cuts get a lot of the credit for our renewed economic growth. And that's really what's bringing us back in terms of our budget picture. Our best fiscal tool is a growing economy.

BLITZER: Josh Bolten, the White House budget director, the director of office and management and budget, to be specific, thanks very much for joining us.

BOLTEN: Thank you, Wolf.

BLITZER: A failed takeoff and a horrifying crash. We'll hear from the flight attendant who survived this frightening ordeal.

Plus, on the brink, a multimillion dollar home. Take a look at this, a beautiful home, but it's sliding, literally, toward destruction. We'll explain what's going on.

(COMMERCIAL BREAK)

BLITZER: A wrecked corporate jet has been moved to a warehouse, where experts will continue their investigation into last week's failed takeoff in Teterboro, New Jersey. Twenty people were injured when the jet crashed through a fence, shot across a road and through the wall of a building on the other side of the street.

Angelica Calad-Gomez was a flight attendant aboard that plane. I spoke with her just a short time ago.

(BEGIN VIDEOTAPE) BLITZER: Angelica, thanks very much for joining us. Thank God you're OK. Thank God everyone is all right.

It was a pretty harrowing experience. Tell our viewers what exactly happened that morning as you were getting ready to leave Teterboro.

ANGELICA CALAD-GOMEZ, FLIGHT ATTENDANT: Everything was actually very normal, waking up early, getting the plane ready, getting my catering and just waiting for the passengers to come on board.

BLITZER: You were sitting where when the plane was taking off?

CALAD-GOMEZ: I'm between the pilot and the co-pilot on the jump seat, just looking at exactly what they're doing and what they're looking at.

BLITZER: And the passengers are all in the back in the cabin?

CALAD-GOMEZ: They're all in the back in the cabin, yes.

BLITZER: All right, so everything is going normal.

CALAD-GOMEZ: Everything is going normal.

BLITZER: What was the first indication that there was a problem?

CALAD-GOMEZ: I think the first indication was literally in the middle of the runway, when I knew that when we're supposed to rotate and lift, it didn't go.

BLITZER: What happened?

CALAD-GOMEZ: It didn't lift.

BLITZER: What did they say? What did the pilots say?

CALAD-GOMEZ: I don't remember them talking. I honestly -- it's such a routine for us, you know, especially myself as a cabin aide. I'm so used to, you know, lifting off at a certain point on the runway. And then that's when I realized that, now, we weren't taking off and there was something wrong.

I saw the pilots pulling on that yoke, trying to lift the plane, but it wouldn't lift. And the next thing, I saw that fence. And then that's when I knew that it was my life on line, in the line.

BLITZER: That's when the plane just went on and you went through the fence, over a highway and literally crashed into that building. Did you realize what was going on then?

CALAD-GOMEZ: I don't remember the highway. I really don't. I remember the fence. I think, at that moment, is when I closed my eyes and just prayed to God that we wouldn't die, because all I can see is that building. That building is like my worst nightmare right now.

BLITZER: When you crashed into the building, do you remember the second, that split-second when you made impact with that building?

CALAD-GOMEZ: Yes, I do. I remember it so well. It's like a roller coaster.

And you know when the roller coaster is having a kind of problem, kind of going down, that's what it feels like. You feel every little bump, every little -- I mean, every single wall we were going through on that building.

BLITZER: And so then what happened? What did the pilots say? You realized you were OK, although I assume you probably feared the worst.

CALAD-GOMEZ: I looked at them. I thought they were kind of stuck. I saw them struggling kind of to get out. But it was so quick. I knew that I had to get out.

I unbuckled my seat belt, looked back. The passengers were screaming. They were not up yet. I saw smoke coming out of the back of the airplane. And I went straight to that front entrance door, the emergency door, tried to lift up the lever. And that's when three or four passengers got up and started pushing that door. So let me say that, if it wasn't for them, I wouldn't be here, because they got that door open. The door was stuck.

BLITZER: And how long before you saw the smoke actually come into the cabin? Because there was a lot of fuel on that plane. That plane was fully fueled.

CALAD-GOMEZ: We were fully fueled, yes. That's correct. I had fuel from head to toe.

BLITZER: What do you mean? The fuel came in...

CALAD-GOMEZ: I was covered in fuel.

BLITZER: The fuel came into the cabin?

CALAD-GOMEZ: I don't know how it got in the cabin. I just know I was covered in fuel.

BLITZER: And so, obviously, you were clearly afraid of a fire. Fires did erupt.

CALAD-GOMEZ: I thought we were going to blow up. I really did. That's the first thought. I was just going to blow up. I can smell it. That smell will never go away.

BLITZER: And so then you started to help passengers get out, out of the plane?

CALAD-GOMEZ: You know what? They got the door open, because the door was stuck. They finally got the door open, and I let all eight passengers out of the plane. And then that's when I looked back at the cabin -- I mean not the cabin. I'm sorry. The co-pilot and the pilot to make sure if they were OK. And that's when I saw they weren't OK.

And they were just telling me to get out of the plane because it was ready to blow up.

BLITZER: How did the pilot and co-pilot get out?

CALAD-GOMEZ: I don't know. When I got out of the airplane, the passengers weren't even around. They had already escaped. I got out.

And that's -- I don't know what happened to the co-pilot and the pilot. I know that the pilot got up from sources telling me from the pilots that he got up and -- to make sure that every passenger was out of that plane crawled with a broken leg, crawled to every single chair and just made sure that they were out because he couldn't see anything. He was just trying to feel every chair and making sure that nobody was still on the plane.

Then he got the co-pilot out, who was more injured than the pilot. He had two broken legs. And, you know, they both crawled out of the plane.

BLITZER: And all 11 of you are fine, relatively speaking, right now?

CALAD-GOMEZ: I'm sorry?

BLITZER: Everybody, all the passengers and the pilots and the co-pilot, everybody is fine right now?

CALAD-GOMEZ: Yes. And thank God for that.

BLITZER: So what do you do next? What are you going to do next, Angelica? Are you going to go back to work? Are you going to at least retire from flying for a while?

(CROSSTALK)

CALAD-GOMEZ: No, I'm not retiring at all. I am definitely continuing. If anything -- I got on the plane yesterday with my company, with Platinum Jet, and I came back to Fort Lauderdale. I'm coming back to work as soon as possible.

BLITZER: Angelica Calad-Gomez, thanks so much for telling your story. It's a harrowing story.

CALAD-GOMEZ: Thank you so much for having me.

BLITZER: And thank God it didn't turn out worse. We're happy you're fine.

CALAD-GOMEZ: Thank you so much. Thank you.

(END VIDEOTAPE)

BLITZER: A courageous young woman, indeed. There's more trouble in storm-saturated Southern California. An expensive house is sliding downhill. And it could take some other homes along with it.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): It's a slow-motion landslide. In the latest fallout from California's rainy winter, this $2.5 million home in Anaheim Hills is sliding slowly off its foundation.

Authorities ordered the owners to evacuate in mid-January, when the home was sliding down the hill at a rate of an inch a day.

JOHN NICOLETTI, ANAHEIM OFFICIAL: Obviously, the homes continue to slide, we think because of the amount of moisture that we had in the air. The soil continues to move. And, at this point, really, it's watch and wait.

BLITZER: On Saturday, the downhill slide got faster, two feet a day, accompanied by the sounds of groaning wood and shattering glass. That's when two neighboring houses also were evacuated.

Winter storms have caused problems over much of the West. Some 50 homes were washed away or condemned after floods in southern Utah.

(END VIDEOTAPE)

BLITZER: Last month alone, 10 people were killed and more than a dozen homes were destroyed by mudslides in La Conchita, California.

It started out as a celebration, but turned into a mud wrestling mess. Now some U.S. soldiers in Iraq are facing some serious consequences. Our Brian Todd standing by with details. We'll show you what happened.

(COMMERCIAL BREAK)

BLITZER: A mud wrestling match among female soldiers in Iraq turned out to be a lot messier than anyone anticipated, with an investigation now under way and several soldiers getting discipline.

CNN's Brian Todd joining us with details -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, U.S. military officials say they're embarrassed by the situation. The investigation is ongoing. And it's another instance where someone took pictures of a controversial incident in Iraq and the pictures were leaked to the media.

(BEGIN VIDEOTAPE)

TODD (voice-over): U.S. military officials tell CNN the incident depicted in these photos is the subject of an ongoing investigation involving two military police units and that 10 people have already been disciplined. October 30 of last year at Camp Bucca, a facility in southern Iraq housing more than 5,000 Iraqi detainees, officials say one unit, the 160th Military Police Battalion, was rotating out the next day. Members of the unit replacing it, the 105th Battalion, were also there that night.

LT. COL. BARRY JOHNSON, U.S. ARMY: A group of soldiers decided to celebrate their last night there in an area isolated from other parts of the camp by having this mud wrestling competition.

TODD: The spokesman for detainee operations in Iraq tells CNN four female soldiers are known to have taken part. One of them, who is with the unit still serving there, was reduced in rank. Three other women were from the unit deploying out, and they're still under investigation.

Officials say nine other soldiers identified as observers who didn't step in to stop it were given counseling and verbal reprimands. Officials tell CNN it's unclear exactly how many people were present. They say they're looking into whether any unit leaders had knowledge of this party. No names have been released.

JOHNSON: Of course, it's embarrassing for the units that are there. It's embarrassing for the individuals that were a part of it. Everybody recognizes that this was inappropriate and foolish.

TODD: These photos were obtained by "The New York Daily News." Military officials tell CNN the detainees were at least half a mile away and could not have observed the incident. They say investigators have found no indication of alcohol use. Officials confirm one witness told investigators that sergeants involved lent their rooms to soldiers for sex parties.

But they say the investigation has found no evidence of that or any evidence of other sexual misconduct.

(END VIDEOTAPE)

TODD: We asked U.S. military officials who instigated the mud wrestling contest. One official would only say there are indications that sergeants from the 160th Military Police Battalion were, as he said, involved in this. An official with the U.S. Army Reserve command overseeing that unit said officers from the 160th are investigating -- Wolf.

BLITZER: All right, Brian Todd reporting for us -- Brian, thanks very much.

Up next, extra, extra large. Why would anyone make a 120-foot- long pizza? The answer might surprise you. That's coming up in our picture of the day.

(COMMERCIAL BREAK)

BLITZER: Our picture of the day is a big pizza for a good cause. Take a look at this. Some chefs in India got together to make a huge pizza to raise money for tsunami relief. What does it take to make a 120-foot-long pizza? Well, 551 pounds of flour, 265 pounds of cheese, 132 pounds of toppings, 32 gallons of ketchup, we assume a really big oven as well.

Reminder: We're on weekdays 5:00 p.m. Eastern, also noon Eastern. Tomorrow at this time, I'll speak with the star of the film "Hotel Rwanda," the Academy Award nominee Don Cheadle. He's just back from Sudan. He'll join me also tomorrow here on CNN.

Until then, thanks for joining us. "LOU DOBBS TONIGHT" starts right now.

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 February 7, 2005 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Happening now. We're getting new poll numbers in on President Bush's job approval rating. There has been a significant shift.
Our new CNN/"USA Today"/Gallup poll also rates the Democrats and Howard Dean who's now widely expected to become his party's next chairman.

Stand by for hard news on WOLF BLITZER REPORT.

(BEGIN VIDEOTAPE)

(voice-over): Your tax dollars at work.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's a budget that is a lean budget.

BLITZER: Credited also a mean budget?

Facing the acts, some programs meant to help the poor.

Will it be a cease-fire summit?

CONDOLEEZZA RICE, SECRETARY OF STATE: This is a time of hope.

BLITZER: Mid-East leaders plan big announcement...

(AUDIO GAP)

BLITZER: We apologize for that technical problem but let's begin our news with what's happening in the Middle East right now. The Israeli and Palestinian leaders will hold their first summit meeting tomorrow in the Egyptian resort town of Sharm el-Sheikh and they plan a huge announcement. This follows a visit from the Secretary of State Condoleezza Rice who promised that the United States will do what it can to help breath new life into the peace process. CNN's Guy Raz reports from the West Bank city of Ramallah.

(BEGIN VIDEOTAPE)

GUY RAZ, CNN CORRESPONDENT (voice-over): Flooding in the West Bank that seems to have washed away the violence for now. Heavy rains to coincide with an imminent mutual cease-fire declaration set to be delivered on Tuesday. An end, perhaps, to the bloodshed that's left 4,000 Palestinians and Israelis dead over the past four years. RA'ANAN GISSIN, SR. SHARON ADVISER: This resolution really is, I should say, a combination of unilateral cease-fire on both sides with, I would say, bilateral results. In other words, it will be quiet on the ground. I think for the first time after 4 1/2 years, there is real hope on both sides and real determination, which is more important, to make it work.

RAZ: For Secretary of State Rice, a time of optimism as well.

RICE: This is a time of hope, a time when we can hope for a better day for the Palestinian and the Israeli people both.

RAZ: This was the first high level U.S. convoy to roll into Ramallah in nearly three years, a signal of the Bush administration's confidence in the new Palestinian leadership. And the message the U.S. is back in the game.

RICE: The United States will do its part. We will be active in this process with our partners.

RAZ: Palestinian President Mahmoud Abbas, pleased with the high level visit, spoke about the upcoming meeting in Egypt with his Israeli counterpart.

PRESIDENT MAHMOUD ABBAS, PALESTINIAN AUTHORITY (through translator): We hope that the outcome of this summit will be positive so we can build on it and so that there will be other meetings between us and the Israeli prime minister.

RAZ: With the mutual truce announcement, that meeting is likely to be as substantive as it will be symbolic.

Condoleezza Rice pledged to take an active role in helping to revive the peace process. She joins a long list of U.S. envoys who have tried to do the same. But with the new Palestinian government and an Israeli commitment to withdraw from Gaza the prospects for peace appear closer than they have in the past four years. Guy Raz, CNN, Ramallah.

(END VIDEOTAPE)

BLITZER: Before leaving the Middle East, Secretary Rice announced that U.S. Army Lieutenant General William ward will arrive in the weeks ahead to serve as a security coordinator dealing with the Palestinians. Rice is now in Rome where she's to meet tomorrow with Italian and Vatican officials. After that, she goes to France where she's expected to deliver what's being billed a major foreign policy address.

Syria today announced it will buy apples from Arab farmers on the Golan Heights, territory captured by Israel in 1967 and later annexed. Syria still one of Israel's bitter foes made clear that the fruit -- and I'm quoting now is grown on Syrian land and owned by Syrians. but the move is still unprecedented. And Israel responded positively saying it hopes such trade will become common in the region as the region moves toward peace. Secretary of State Rice calls it a time of hope in the Middle East. But hopes have been dashed before. Is this time any different? Joining us now our world affairs analyst and former defense secretary William Cohen. Mr. Secretary, thanks very much. Is this time any different?

WILLIAM COHEN, FMR. DEFENSE SECRETARY: I think it is different. The mood is different right now. You have a new leader for the Palestinians. You have an indication on the part of the Israelis that they're prepared to work with him. We have seen the proposal for the unilateral withdrawal from Gaza and a commitment on the part of Mahmoud Abbas to do whatever he can to quell the violence.

So all of this is very positive. Now with the upcoming summit, I think with Egypt getting involved, the king of Jordan, King Abdullah getting involved, that's all very positive. But as your piece pointed out, hopes have been dashed in the past. So we tend to oscillate between unbridled optimism and unbridled pessimism on the other side.

BLITZER: It seems like the Bush administration has a strategy though. In the State of the Union address, the president announced $350 million in aid to the Palestinians. Condoleezza Rice goes there and meets with Ariel Sharon, Mahmoud Abbas, announces Lieutenant General William Ward is now going to be the security coordinator. There seems to be a strategy at least that the administration is developing.

COHEN: The one thing that has to be done very quickly and that is to empower Mahmoud Abbas. He has to demonstrate to the Palestinians that by virtue of his leadership and by virtue of calling upon them to lay down their arms or have a cease-fire or period of calm, as he might describe it, that there's something in it for them, that there is hope for them, economic opportunity, rebuilding the infrastructure. The first step in a long process but nonetheless, an important one. So all of this is very well laid out, step by step, but it can't take too long. Because otherwise whenever any kind of a lag in time, those who are uncommitted to this process, who are determined to destroy it move in and start exploding their bombs.

BLITZER: What do you make of this decision to ask a lieutenant general in the U.S. army to leave the European command and take on this new portfolio, this new mission?

COHEN: Well, he's very capable. He enjoys strong support from the administration. I know I talked earlier with the former chairman of the joint chiefs Hugh Shelton who worked very closely with him when he was a J-3 in the intelligence -- in the joint staff. Very highly regarded and will do a great job in that position.

BLITZER: I know for a fact that top administration officials didn't want a CIA person to have this responsibility. The last time around George Tenet, the CIA director and others in the CIA served as this sort of security liaison to the Palestinians. This time they deliberately didn't want someone from the CIA. You understand their thinking? COHEN: But he has a background in intelligence, he also has a background in public affairs. So he'll look at it from a political and intelligence point of view. He brings that combination of skills together. I think it's a very important delegation to him.

BLITZER: Secretary Cohen, thanks very much.

COHEN: Good to be here.

BLITZER: Let's hope that this does lead to something positive. We'll be having extensive coverage tomorrow of that Israeli/Palestinian summit in Sharm el-Sheikh.

President Bush and his party got a boost today, a new poll shows a surprising swing in his job approval rating. Our senior political analyst Bill Schneider will have details all of the poll numbers. That's coming up just a little bit later.

First, the Bush administration delivered its budget to the doorstep of Congress today and it landed with a bit of a thud. The four volume plan calls for spending $2.5 trillion during the next fiscal year. The budget would kill or cut 150 programs, among them, some social services for needy Americans. The plan does not include the costs of the wars in Iraq and Afghanistan or of overhauling Social Security or of making earlier enacted tax cuts permanent. Still, the president insists his budget is aimed at reducing the deficit.

(BEGIN VIDEO CLIP)

BUSH: The important question that needs to be asked for all constituencies is whether or not the programs achieve a certain result. Have we set goals and are those goals being met? And the poor and disadvantaged absolutely ought to be asking that question, too. In other words, what is the goal of a particular program? And if that goal isn't being met the question ought to be asked, why isn't the goal being met. And that's the questions we've been asking.

(END VIDEO CLIP)

BLITZER: The president is calling on Congress to treat his budget responsibly. But Democrats are already calling it a hoax but the budget battle to come is going to be intense. Let's go live to our Capitol Hill correspondent Ed Henry. He's joining us now live. Ed, what's the sort of immediate reaction from the Hill?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: A lot of attacks from Democrats saying that those cuts to social services go way too deep and they need to be stopped. In fact, as you know in the corridors of the Capitol it has long been said that the president proposes, Congress disposes. Key lawmakers on both sides saying that major parts of this budget will in fact be disposed, will be tossed aside. They feel that some of the cuts go too far. It is not a surprise obviously that Democrats are pouncing on the details saying that they believe cuts in education, health care, veterans programs as well as environmental programs as well as Amtrak go too far and need to be stopped. Now, Republican lawmakers are also saying they have concerns about some of the cuts as well. They feel now is a time of sacrifice. Everything needs to be on the table. Among the Democrats leading the charge today, Kent Conrad who said his biggest problem with this budget is that a lot of the details are left out.

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD (D), NORTH DAKOTA: This is a hide and seek budget, because you've got to look very carefully to find out what's going on. And if you pull back the curtain you find something quite different than what the president wants you to see. This is all the president wants you to see with respect to his tax cuts. He just wants you to look at the first five years. He doesn't want you to look beyond that.

(END VIDEO CLIP)

HENRY: Democrats saying that the budget does not include the $80 billion for the ongoing war in Iraq as well as Afghanistan, that the president has talked about proposing soon. That's not included as well as making the tax cuts permanent. Also Social Security costs not included here. Republican budget chairman in the Senate Judd Gregg though today said that while some of these programs undoubtedly will get some Republican support, there will be some pushback. He said that it is time for the government to tighten its belt.

(BEGIN VIDEO CLIP)

SEN. JUDD GREGG (R), NEW HAMPSHIRE: When you're at war, you got to make some difficult decisions. The first decision you have to make, which isn't very difficult, is you support the people in the field, you make sure they have what they need, you make sure we have as a nation, and we are doing what is necessary to protect ourselves.

(END VIDEO CLIP)

HENRY: And the biggest battle on the domestic front, of course, will be Social Security. Democrats today saying given all this talk about budget cuts, about deficits, it will be very hard for the president to sell his Social Security plan with transition costs ranging from $2 trillion to $4.5 trillion.

BLITZER: Ed Henry on the Hill for us. Thanks very much, Ed.

Remember, the government reaches into a different pocket to pay for the wars in Iraq and Afghanistan, but the new budget still sets plenty aside for the Pentagon. For details, let's turn to our senior Pentagon correspondent Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Wolf, that Pentagon budget comes in at $419 billion. That's up 5 percent over last year, almost. That's unless you count the cost of the war in Iraq and Afghanistan. That pushes the total defense spending up to nearly $500 billion.

(BEGIN VIDEOTAPE)

(voice-over): The centerpiece of the Pentagon's spending plan is Defense Secretary Donald Rumsfeld's pet project to transform the military into a lighter, more mobile force.

DONALD RUMSFELD, DEFENSE SECRETARY: I know that people have thought that when someone uses the words agile, lethal, expeditionary, they think that means smaller. It doesn't. It isn't the size of the force that was wrong. It's the shape of the force. And the capability of the force.

(END VIDEO CLIP)

MCINTYRE: Rumsfeld has already increased the size of the army by some 30,000 troops, using his emergency authority. And the army is hinting it may want that change to be permanent as it reorganizes from 10 divisions into 43 independently deployable brigades. The budget puts $4 billion more into counterterrorism and special operations, while slashing some big ticket weapons systems, like the expensive F- 22 Raptor fighter plane. A $10.5 billion cut in the F-22 acquisition program will reduce the number of planes bought from 277 to about 180.

Ending production of the J model of the venerable C-130 cargo plane will save another $5 billion. Both planes are built by Lockheed Martin which says it may have to lay off workers at its Marietta, Georgia plant if Congress approves the cuts.

Missile defense will take a $1 billion hit as spending drops to about $9 billion. And the Navy is cutting one carrier from its fleet of 12 aircraft carriers, but insists its new deployment plan will actually make the smaller fleet more able to respond to world crises.

(END VIDEOTAPE)

(on camera): And Wolf, you know one of the hottest button issues in this budget is the $1.9 billion for another round of base closings. That is very politically sensitive.

BLITZER: Sensitive indeed, especially for those communities, those states where those bases are slated to be shut down. Thanks very much.

Is it a tarnished tour of duty? Up next, what got one female American soldier in muddy water?

Plus a car bombing in Baqubah, a suicide bombing in Mosul. Once again, Iraqi police and would-be police are the targets and the victims. We'll have a report. That's coming up from Baghdad.

And later...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I saw the pilots pulling on that yoke trying to lift the plane, but it wouldn't lift. The next thing I saw that fence. That's when I knew that it was my life in the line. (END VIDEO CLIP)

BLITZER: A survivor's story. Her plane failed to take off and crashed into a warehouse, bursting into flames. How one flight attendant made it out alive. She'll join us and tell her incredible story.

(COMMERCIAL BREAK)

BLITZER: In Massachusetts, a jury has found defrocked Roman Catholic priest Paul Shanley guilty of raping and fondling a boy two decades ago. The verdict handed down in Cambridge just a short time ago came -- came in Cambridge. The case had hinged on a now 27-year- old firefighter who said Shanley repeatedly raped and molested him at a Boston area church. The man said he'd forgotten about the abuse. But he claims the memories came flooding back three years ago as the pedophile priest scandal rocked the archdiocese of Boston. Shanley could face up to life in prison. Sentencing is a week from tomorrow.

There's an unusual twist to a deadly crime spree in the New York City area. Two of the people charged are a mother and her son. CNN's Mary Snow joining us now live from New York with more -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, police in Nassau County, New York, say it is one of the most intense manhunts they can remember in recent history. It involved officers from three states over a two- month time span. Over the weekend, a suspected fugitive was taken into custody and now his mother is also under arrest.

(BEGIN VIDEOTAPE)

(voice-over): He was the target of a nationwide manhunt, accused of a deadly robbery spree in two states. One day after Christopher Demayo (ph) surrendered to SWAT teams in New Jersey, police arrested his mother and charged her with being his accomplice.

LT. DENNIS FARRELL, NASSAU COUNTY POLICE: She was in the car when they were scouting potential sites. There's no question that she knew what was going on.

SNOW: 40-year-old Maryann Taylor-Casey (ph) pleaded not guilty to charges of second degree murder and first degree robbery, but police say she told them she helped her son to get cash for heroin. She was arrested at a boarding home. Neighbors don't know much about her.

UNIDENTIFIED MALE: To be honest with you, the cops come all hours of the night, all hours of the day.

SNOW: Police accuse Taylor-Casey of driving a getaway car for her son from the scene of a December jewelry store robbery, a store manager was killed. Police don't know if she played a role in any of the other three robberies linked to her son. The latest one was last week in Fairfield, Connecticut. The husband and wife jewelry store owners were shot to death. UNIDENTIFIED MALE: His M.O. is to enter the store, gain the confidence of the employees and/or owners under the pretense of wanting to buy jewelry or other items.

SNOW: But police say Demayo's reputation as a gambler helped officers track him down in Atlantic City where he surrendered after a five-hour standoff. His girlfriend Nicole Pierce (ph), also was taken into custody. Both are expected to be extradited to New York Tuesday to face charges. Police say Demayo, his girlfriend and his mother have one thing in common, a heroin habit.

(END VIDEOTAPE)

SNOW: Now, the suspect and his girlfriend were both in court in New Jersey today. They are expected to be taken to New York where they face murder and robbery charges -- Wolf.

BLITZER: Mary Snow in New York with that story. Thanks, Mary, very much.

In a moment, the big unveiling with a few surprises for the nation's citizens. Who gains, who loses under the new Bush budget? Joining me live from the White House, the White House Budget Director Joshua Bolton.

Plus a survivor of this corporate jet crash shares her terrifying ordeal with us.

And a million dollar mess. Take a look at this. California mansions literally on the brink of destruction. The culprit? Nature.

(COMMERCIAL BREAK)

BLITZER: There are some major shifts in a new CNN/USA Today/Gallup poll, a poll just out in the past couple hours. Our senior political analyst Bill Schneider has been looking at the numbers and the story behind them.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST CORRESPONDENT (voice-over): President Bush's job approval is up, 57 percent. Higher than the 51 percent who voted to re-elect him three months ago. Well, sure, you say, he just delivered his State of the Union.

But the main topic of that speech was Social Security, and the president's approval rating on Social Security did not change much. What did change? Iraq. Up 8 points. What happened? The January 30th election.

RUMSFELD: To the people who put their names on the ballots showed a great deal of courage. And that has to be inspirational for the people of Iraq, to see that movement forward politically.

SCHNEIDER: It was also encouraging for Americans who didn't expect too much from the Iraqi election. SEN. JOHN KERRY (D), MASSACHUSETTS: Well, the early indications are pretty much what I think we expected.

SCHNEIDER: Actually, more than 60 percent of Americans say the Iraqi election went better than they expected. And there's been a turnaround of opinion about whether the war in Iraq was a mistake. Last month, most Americans said it was a mistake to send U.S. troops to Iraq. Now most say Iraq was not a mistake.

The public is not so sure about the president's Social Security plan. They disapprove of it by 50 to 44 percent. In his State of the Union speech, President Bush aimed his pitch at younger workers.

BUSH: Your money will grow over time at a greater rate than anything the current system can deliver.

SCHNEIDER: But Americans under 55 are not showing much enthusiasm for the president's proposal. They're divided, 45 percent like it, 48 percent don't. President Bush reassured older workers that for them, Social Security would not change in any way. Didn't matter. Older Americans are solidly opposed to the president's plan.

(END VIDEOTAPE)

SCHNEIDER: What's giving the president a boost isn't the news from Washington, it's the news from Baghdad.

BLITZER: It's very interesting. But as good as these numbers are for the president, bad numbers for the Democrats. Talk about what the American public is saying in this poll as far as their attitude towards Democrats are concerned.

SCHNEIDER: Not very good at all. The public in fact has a 47 percent unfavorable view of the Democratic Party. That is the least favorable view of the Democrats in at least 13 years. You'll notice that the favorable view of the Republicans is 56, the Democrats 46. That's a very negative view.

Now this is not unusual right after a president's inauguration that the opposition party does poorly. But these are very bad numbers right now.

BLITZER: The Democratic Party is about to get a new chairman, Howard Dean. What does the American public think of him?

SCHNEIDER: Not much. We asked people what do you think of Howard Dean? Favorable, unfavorable? And the answer was only 31 percent have a favorable view of former Governor Dean, 38 percent unfavorable and about a third unsure. That's a negative view of a man who is just about to take over the Democratic Party. It doesn't look like he is going to lift the party very much, although he may be able to raise some money.

BLITZER: I'm sure he'll be able to do that. They have their work cut out for them, the Democrats.

SCHNEIDER: They certainly do.

BLITZER: Bill Schneider, thanks very much. There are new attacks right now in Iraq. Dozens are killed in separate bombings. We'll show you where, what's going on.

And the new Bush budget. Under fire already from some critics, likely and unlikely. The White House Budget Director Josh Bolton standing by at the White House. He'll join us live.

And a survivor of a corporate jet crash shares her amazing story with us. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

A deadly day in Iraq, and U.S. troops aren't the only targets. We'll have a report from Baghdad. That's coming up.

First, what's happening in the news right now.

There are new hopes today for the troubled Middle East peace process. The Israeli prime minister, Ariel Sharon, and the Palestinian Authority president, Mahmoud Abbas, plan to announce a cease-fire at tomorrow's summit in Egypt. Officials say Palestinians will declare an end to violence, terrorism and incitement against Israel. In return, Israel will refrain from military action to the extent that the Palestinians fulfill their pledges and commitments. We'll have extensive coverage tomorrow.

The man who once led the search for weapons of mass destruction in Iraq has some words of warning for the Bush administration as it confronts Iran over its nuclear ambitions. In an opinion piece in "The Washington Post," David Kay says the hunt for banned weapons in Iraq was a failure driven by faulty intelligence. And he says the U.S. should not repeat the same mistakes as it deals now with Iran.

United Nations Secretary-General Kofi Annan has suspended two employees connected to the scandal-tainted oil-for-food program in Iraq, that decision after an independent investigation accused both men of misconduct. The suspended employees include the former head of the program and a senior official that dealt with contracts. The now defunct program allowed Iraq to sell oil in exchange for humanitarian supplies.

Dozens of people have died in Iraq today in the latest round of attacks by insurgents. Violence has escalated since last week's election.

Our senior international correspondent, Nic Robertson, has this report from Baghdad.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: The two attacks came within an hour of each other, the first in the northern town of Mosul about 10:30 a.m. in the morning. A suicide bomber walked into a police recruitment center, detonated his explosives. At least 12 people killed there and at least four wounded in that particular attack.

Already, a jihadi organization has claimed on its Web site, claimed responsibility for that particular attack. Also, in Mosul, three mortar rounds fired at a government building, one of those rounds falling close to a cafe. One person killed, three wounded, we're told. Coalition officials in Mosul say they've had some success in the last 24 hours. People have told them about two roadside bombs.

They've been able to send out explosives teams who have been able to detonate those bombs without them going off, without them being able to target military or civilian vehicles traveling up and down the roads. But the second targeting of young police recruits came in the town of Baquba, that about 11:00 in the morning, about 50 kilometers northeast of Baghdad.

The recruits were standing outside the police station, we've been told. A saloon car packed full of explosives pulled up. The vehicle detonated, at least 14 people killed, 16 wounded, one of the largest explosions in Baquba for some time, we've been told. Chunks of neighboring buildings were blown off the buildings.

We've also been told that that, at that time, there were some 200 police recruits already inside the police station. Most of these escaped unharmed.

Nic Robertson, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: More now on President Bush's 2006 budget. It comes in at just over $2.5 trillion, targeting 150 domestic programs for either cutbacks or elimination, while projecting a record $427 billion deficit this year.

Joining us now from the White House, the point man for the president's budget, the budget director, Joshua Bolten.

Mr. Bolten, thanks very much for joining us.

JOSHUA BOLTEN, WHITE HOUSE BUDGET DIRECTOR: Thanks for having me.

BLITZER: The president has submitted budgets every year since becoming president. These are recommendations for the Congress. The Congress almost always does what it wants and almost always forgets about the recommendations for budget cuts from the president, goes ahead and approves new plans, and the president signs those bills into law. He has not yet once used his veto pen.

Will he use his veto pen if they decide these cuts that you're proposing now are not worth it?

BOLTEN: Well, Wolf, the record is actually pretty good on working with this Congress.

Last year is a good example. When we introduced the budget, the president called for 4 percent overall growth in discretionary spending, no more, and only 1 percent growth in the nondefense elements of discretionary spending. That was declared dead on arrival by a lot of Democrats. And what did the Congress deliver? Exactly what the president asked for in those overall spending limits. So the argument that the president hasn't gotten what he wanted is incorrect.

(CROSSTALK)

BLITZER: I'm talking about specific recommendations for programs that he wanted eliminated last time. What, there were about 60 such plans. And 20 of them were eliminated. Forty of them remain on the books.

BOLTEN: Yes, on the specifics, especially some of the smaller specifics, it is very hard to get rid of individual programs. But the president's veto pen is -- it ought to be used for whether they hit the spending targets or not, not whether individual programs were in or not.

But we're going to be fighting hard for those. And I think this year, there's a new spirit that I sense on Capitol Hill, at least in the Republican caucus. And I'm pretty optimistic that we are not going to get all of the cuts and reductions that we're asking for, but I'm pretty optimistic that we'll have stronger support than we've had in the past.

BLITZER: The president wants to cut in half the budget deficit. But the numbers he introduced today, that you introduced today, don't include the cost for Social Security reform, do they?

BOLTEN: We didn't include in the prepared budget anything about Social Security, in part because we put the budget to bed about two or three weeks ago. And the president's proposals have only just now started to come out.

BLITZER: How much do you estimate it will cost for these Social Security reforms over the next 10 years?

BOLTEN: All we show is the five-year budget picture up through 2010. And what we showed in our original budget documents is the deficit being reduced from about 3.6 percent of GDP today to about 1.5 percent of GDP by 2009.

What those Social Security transition financing elements would do is add about 0.2 of 1 percent.

BLITZER: It would add over 10 years, you believe, $800 billion. The Democrats say closer to $2 trillion. That would do devastation to the cutting in half the budget deficit, wouldn't it, either way?

BOLTEN: No.

As I was saying, what it would do in 2009 and 2010 is raise us to about 1.7 percent of GDP, which is way below the historic average of 2.3 percent of GDP. So, the president's plans don't threaten that.

The other thing to keep in mind about these transition financing expenses is that that's not new debt to the government. That's bringing forward obligations we already owe and we are going to have to pay later in the form of benefits. We're letting people keep that money earlier. So the claim that it is fiscally reckless in some fashion to make room for those personal accounts is just flat wrong.

BLITZER: What about making permanent the tax cuts that have been approved during the first term, making those permanent? Are those numbers in that budget, what that would cost?

BOLTEN: Yes, they are included in the budget.

BLITZER: Only for the first five years, though.

BOLTEN: Well, we only do five years worth of budgeting. So, we can't include stuff where we're not doing the budgeting.

But even beyond that five-year window, which takes us out to 2010, our rough estimates show that, with the permanence of the president's tax cuts, we still see the percent of GDP that revenues are taking rising up to the historic average of 18 percent. And we still see declining deficits. So, the president's tax cuts aren't threatening our budget picture.

In fact, the president's tax cuts get a lot of the credit for our renewed economic growth. And that's really what's bringing us back in terms of our budget picture. Our best fiscal tool is a growing economy.

BLITZER: Josh Bolten, the White House budget director, the director of office and management and budget, to be specific, thanks very much for joining us.

BOLTEN: Thank you, Wolf.

BLITZER: A failed takeoff and a horrifying crash. We'll hear from the flight attendant who survived this frightening ordeal.

Plus, on the brink, a multimillion dollar home. Take a look at this, a beautiful home, but it's sliding, literally, toward destruction. We'll explain what's going on.

(COMMERCIAL BREAK)

BLITZER: A wrecked corporate jet has been moved to a warehouse, where experts will continue their investigation into last week's failed takeoff in Teterboro, New Jersey. Twenty people were injured when the jet crashed through a fence, shot across a road and through the wall of a building on the other side of the street.

Angelica Calad-Gomez was a flight attendant aboard that plane. I spoke with her just a short time ago.

(BEGIN VIDEOTAPE) BLITZER: Angelica, thanks very much for joining us. Thank God you're OK. Thank God everyone is all right.

It was a pretty harrowing experience. Tell our viewers what exactly happened that morning as you were getting ready to leave Teterboro.

ANGELICA CALAD-GOMEZ, FLIGHT ATTENDANT: Everything was actually very normal, waking up early, getting the plane ready, getting my catering and just waiting for the passengers to come on board.

BLITZER: You were sitting where when the plane was taking off?

CALAD-GOMEZ: I'm between the pilot and the co-pilot on the jump seat, just looking at exactly what they're doing and what they're looking at.

BLITZER: And the passengers are all in the back in the cabin?

CALAD-GOMEZ: They're all in the back in the cabin, yes.

BLITZER: All right, so everything is going normal.

CALAD-GOMEZ: Everything is going normal.

BLITZER: What was the first indication that there was a problem?

CALAD-GOMEZ: I think the first indication was literally in the middle of the runway, when I knew that when we're supposed to rotate and lift, it didn't go.

BLITZER: What happened?

CALAD-GOMEZ: It didn't lift.

BLITZER: What did they say? What did the pilots say?

CALAD-GOMEZ: I don't remember them talking. I honestly -- it's such a routine for us, you know, especially myself as a cabin aide. I'm so used to, you know, lifting off at a certain point on the runway. And then that's when I realized that, now, we weren't taking off and there was something wrong.

I saw the pilots pulling on that yoke, trying to lift the plane, but it wouldn't lift. And the next thing, I saw that fence. And then that's when I knew that it was my life on line, in the line.

BLITZER: That's when the plane just went on and you went through the fence, over a highway and literally crashed into that building. Did you realize what was going on then?

CALAD-GOMEZ: I don't remember the highway. I really don't. I remember the fence. I think, at that moment, is when I closed my eyes and just prayed to God that we wouldn't die, because all I can see is that building. That building is like my worst nightmare right now.

BLITZER: When you crashed into the building, do you remember the second, that split-second when you made impact with that building?

CALAD-GOMEZ: Yes, I do. I remember it so well. It's like a roller coaster.

And you know when the roller coaster is having a kind of problem, kind of going down, that's what it feels like. You feel every little bump, every little -- I mean, every single wall we were going through on that building.

BLITZER: And so then what happened? What did the pilots say? You realized you were OK, although I assume you probably feared the worst.

CALAD-GOMEZ: I looked at them. I thought they were kind of stuck. I saw them struggling kind of to get out. But it was so quick. I knew that I had to get out.

I unbuckled my seat belt, looked back. The passengers were screaming. They were not up yet. I saw smoke coming out of the back of the airplane. And I went straight to that front entrance door, the emergency door, tried to lift up the lever. And that's when three or four passengers got up and started pushing that door. So let me say that, if it wasn't for them, I wouldn't be here, because they got that door open. The door was stuck.

BLITZER: And how long before you saw the smoke actually come into the cabin? Because there was a lot of fuel on that plane. That plane was fully fueled.

CALAD-GOMEZ: We were fully fueled, yes. That's correct. I had fuel from head to toe.

BLITZER: What do you mean? The fuel came in...

CALAD-GOMEZ: I was covered in fuel.

BLITZER: The fuel came into the cabin?

CALAD-GOMEZ: I don't know how it got in the cabin. I just know I was covered in fuel.

BLITZER: And so, obviously, you were clearly afraid of a fire. Fires did erupt.

CALAD-GOMEZ: I thought we were going to blow up. I really did. That's the first thought. I was just going to blow up. I can smell it. That smell will never go away.

BLITZER: And so then you started to help passengers get out, out of the plane?

CALAD-GOMEZ: You know what? They got the door open, because the door was stuck. They finally got the door open, and I let all eight passengers out of the plane. And then that's when I looked back at the cabin -- I mean not the cabin. I'm sorry. The co-pilot and the pilot to make sure if they were OK. And that's when I saw they weren't OK.

And they were just telling me to get out of the plane because it was ready to blow up.

BLITZER: How did the pilot and co-pilot get out?

CALAD-GOMEZ: I don't know. When I got out of the airplane, the passengers weren't even around. They had already escaped. I got out.

And that's -- I don't know what happened to the co-pilot and the pilot. I know that the pilot got up from sources telling me from the pilots that he got up and -- to make sure that every passenger was out of that plane crawled with a broken leg, crawled to every single chair and just made sure that they were out because he couldn't see anything. He was just trying to feel every chair and making sure that nobody was still on the plane.

Then he got the co-pilot out, who was more injured than the pilot. He had two broken legs. And, you know, they both crawled out of the plane.

BLITZER: And all 11 of you are fine, relatively speaking, right now?

CALAD-GOMEZ: I'm sorry?

BLITZER: Everybody, all the passengers and the pilots and the co-pilot, everybody is fine right now?

CALAD-GOMEZ: Yes. And thank God for that.

BLITZER: So what do you do next? What are you going to do next, Angelica? Are you going to go back to work? Are you going to at least retire from flying for a while?

(CROSSTALK)

CALAD-GOMEZ: No, I'm not retiring at all. I am definitely continuing. If anything -- I got on the plane yesterday with my company, with Platinum Jet, and I came back to Fort Lauderdale. I'm coming back to work as soon as possible.

BLITZER: Angelica Calad-Gomez, thanks so much for telling your story. It's a harrowing story.

CALAD-GOMEZ: Thank you so much for having me.

BLITZER: And thank God it didn't turn out worse. We're happy you're fine.

CALAD-GOMEZ: Thank you so much. Thank you.

(END VIDEOTAPE)

BLITZER: A courageous young woman, indeed. There's more trouble in storm-saturated Southern California. An expensive house is sliding downhill. And it could take some other homes along with it.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): It's a slow-motion landslide. In the latest fallout from California's rainy winter, this $2.5 million home in Anaheim Hills is sliding slowly off its foundation.

Authorities ordered the owners to evacuate in mid-January, when the home was sliding down the hill at a rate of an inch a day.

JOHN NICOLETTI, ANAHEIM OFFICIAL: Obviously, the homes continue to slide, we think because of the amount of moisture that we had in the air. The soil continues to move. And, at this point, really, it's watch and wait.

BLITZER: On Saturday, the downhill slide got faster, two feet a day, accompanied by the sounds of groaning wood and shattering glass. That's when two neighboring houses also were evacuated.

Winter storms have caused problems over much of the West. Some 50 homes were washed away or condemned after floods in southern Utah.

(END VIDEOTAPE)

BLITZER: Last month alone, 10 people were killed and more than a dozen homes were destroyed by mudslides in La Conchita, California.

It started out as a celebration, but turned into a mud wrestling mess. Now some U.S. soldiers in Iraq are facing some serious consequences. Our Brian Todd standing by with details. We'll show you what happened.

(COMMERCIAL BREAK)

BLITZER: A mud wrestling match among female soldiers in Iraq turned out to be a lot messier than anyone anticipated, with an investigation now under way and several soldiers getting discipline.

CNN's Brian Todd joining us with details -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, U.S. military officials say they're embarrassed by the situation. The investigation is ongoing. And it's another instance where someone took pictures of a controversial incident in Iraq and the pictures were leaked to the media.

(BEGIN VIDEOTAPE)

TODD (voice-over): U.S. military officials tell CNN the incident depicted in these photos is the subject of an ongoing investigation involving two military police units and that 10 people have already been disciplined. October 30 of last year at Camp Bucca, a facility in southern Iraq housing more than 5,000 Iraqi detainees, officials say one unit, the 160th Military Police Battalion, was rotating out the next day. Members of the unit replacing it, the 105th Battalion, were also there that night.

LT. COL. BARRY JOHNSON, U.S. ARMY: A group of soldiers decided to celebrate their last night there in an area isolated from other parts of the camp by having this mud wrestling competition.

TODD: The spokesman for detainee operations in Iraq tells CNN four female soldiers are known to have taken part. One of them, who is with the unit still serving there, was reduced in rank. Three other women were from the unit deploying out, and they're still under investigation.

Officials say nine other soldiers identified as observers who didn't step in to stop it were given counseling and verbal reprimands. Officials tell CNN it's unclear exactly how many people were present. They say they're looking into whether any unit leaders had knowledge of this party. No names have been released.

JOHNSON: Of course, it's embarrassing for the units that are there. It's embarrassing for the individuals that were a part of it. Everybody recognizes that this was inappropriate and foolish.

TODD: These photos were obtained by "The New York Daily News." Military officials tell CNN the detainees were at least half a mile away and could not have observed the incident. They say investigators have found no indication of alcohol use. Officials confirm one witness told investigators that sergeants involved lent their rooms to soldiers for sex parties.

But they say the investigation has found no evidence of that or any evidence of other sexual misconduct.

(END VIDEOTAPE)

TODD: We asked U.S. military officials who instigated the mud wrestling contest. One official would only say there are indications that sergeants from the 160th Military Police Battalion were, as he said, involved in this. An official with the U.S. Army Reserve command overseeing that unit said officers from the 160th are investigating -- Wolf.

BLITZER: All right, Brian Todd reporting for us -- Brian, thanks very much.

Up next, extra, extra large. Why would anyone make a 120-foot- long pizza? The answer might surprise you. That's coming up in our picture of the day.

(COMMERCIAL BREAK)

BLITZER: Our picture of the day is a big pizza for a good cause. Take a look at this. Some chefs in India got together to make a huge pizza to raise money for tsunami relief. What does it take to make a 120-foot-long pizza? Well, 551 pounds of flour, 265 pounds of cheese, 132 pounds of toppings, 32 gallons of ketchup, we assume a really big oven as well.

Reminder: We're on weekdays 5:00 p.m. Eastern, also noon Eastern. Tomorrow at this time, I'll speak with the star of the film "Hotel Rwanda," the Academy Award nominee Don Cheadle. He's just back from Sudan. He'll join me also tomorrow here on CNN.

Until then, thanks for joining us. "LOU DOBBS TONIGHT" starts right now.

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