Return to Transcripts main page


Iraq Status: What's Happening on the Ground?; Climate Change: Behind the G8 Statement; Barack Obama Speaks in Powder Springs, Georgia

Aired July 8, 2008 - 09:00   ET


TONY HARRIS, CNN ANCHOR: And good morning everyone, you are in the CNN NEWSROOM. I'm Tony Harris.
HEIDI COLLINS, CNN ANCHOR: Hi everybody, I'm Heidi Collins.

You'll see events come into the NEWSROOM, live on Tuesday morning, July 8th. Here's what's on the rundown:

A new California wildfire chasing thousands of people from their homes this morning. The thermometer, also burning up, heading toward 115.

HARRIS: And many Democrats want one, now so does Iraq's own leader. He is suggesting a timetable to withdraw U.S. forces.

COLLINS: A spike went through his brain and he didn't even know it. He lived to tell about it too, in the NEWSROOM.

New fire warnings and immediate evacuations in California. It's happening right now in a couple of communities in Butte County. Officers are going door to door. As many as 5,000 people may be forced to leave their homes.

We are keeping an eye on this developing situation. Of course, we will bring you the very latest just as soon as we get it.

The fire near Concow and Paradise, California is only one of the hot spots. There are 330 active fires in the state right now. The most destructive are in Big Sur and Goleta. We've been talking about them for days.

In Big Sur, crews are beefing up fire lines now. Cooler temperatures have been helping firefighting efforts, but warmer weather could turn the tide again.

All residents in Big Sur are under mandatory evacuation orders, but some homeowners are expected to be allowed to return home a little bit later today.

That fire now 18 percent contained. Compare that to the gap fire in Santa Barbara County near Goleta -- that fire now 35 percent contained. The fire there is burning through brush in the mountains.

Two thousand residents were allowed back home, but others are still being warned to be ready to go at a moment's notice. Urgent evacuation orders in northern California, communities being cleared out as wildfires move closer.

We are joined now on the telephone by Julie Hutchinson from Chico, California.

Julie, tell us the latest there.

JULIE HUTCHINSON, CAL FIRE PUBLIC INFO. OFFICER: Sure, overnight we had some significant winds. We've had very hot temperatures and very dry weather with several fires still actively burning.

We did have a fire that has made a run towards some of our communities and is threatening them. It's moving in a southeasterly -- or westerly direction towards the developments. It's bumping up against some of the fires we had earlier, two weeks ago.

COLLINS: All right. What exactly does that mean for people who live there? They're going to have to go? Some of them have obviously gone. You know, and, obviously, they kind of want to know just as soon as they leave when they can go back.

HUTCHINSON: You bet. That's very hard on these people. A lot of these residents were just taken off a precautionary evacuation several days ago. So for about 10 days, they've been under evacuation and a precautionary.

They're very well versed at this. They're doing a great job getting out of there. We've got some firefighters in there rescuing people right now, trying to get them out of areas where they have been kind of trapped by the fire and they're doing an outstanding job.

But as you can imagine, at night, getting woke up by that phone call and having to react...


HUTCHINSON: ... it's good that they've been to a plan.

COLLINS: Yes. And what about that heat? Boy, we were just talking about. You can see the sun there. It looks like it's scorching already. But -- excuse me, according to some of our reports here, it could be about 115 degrees there today.

HUTCHINSON: Yes, it could, accompanied with very low humidity. We're talking in the single digits, possibly. At 11:00 last night, they were about 17 percent and that's in Timber. So we've got a pretty serious condition here with the red flag warning due to the wind and the humidity as well.

So definitely a firefight still going on here and firefighters are still hunkering in to keep doing the best they can for these communities.

COLLINS: Yes. Well, we certainly hope for the best. We know that they're tired. They were tired well before today. So, Julie Hutchinson, appreciate your time this morning, from Cal Fire, public information officer there.

Firefighting resources also being stretched thin and that includes, as we said, firefighters themselves. Right now there are more than 20,000 people helping fight the fires. They've committed more than 1,400 fire engines, 97 helicopters, and that doesn't include some of the aircraft sent in from other states.

Forty homes have been destroyed in the fires. Firefighters are trying to save the 7,600 more that are threatened.

HARRIS: Hurricane Bertha is a major storm this morning -- maybe not for long. It is now a Category 3 with winds around 120 miles an hour. Bertha is shifting north and isn't expected to come close to the East Coast. Bermuda could get hit by the storm, actually, this weekend.

But the National Hurricane Center expects it to start losing strength over the next few days as it moves over cooler waters.

Bertha isn't a threat, but what about Cristobal, Dally and Edward? Those are the next three storms we'll be talking about.

CNN's John Zarrella is in Southwest Ranches, Florida this morning.

John, good to see you. I've got to ask you, are folks there in south Florida ready -- getting ready for hurricane season?

JOHN ZARRELLA, CNN CORRESPONDENT: Well, you know, you would hope because certainly, Tony, we're going to be talking about those other storms. There's no doubt about that, and probably several others after that.

We're here at a Lowe's home improvement store here out here in Western Broward County. And you know, one of the problems is that the studies year after year show that 50 percent of the people that live in the hurricane-prone states aren't prepared, which is kind of a shocking number.

Well, this is a wake-up call day. Bertha's out there. It's not likely to affect us, but it's time to get ready. We've got all of our stuff here that we've been -- things you need to have, your weather radio, your flashlights, your batteries. Make sure you've got your emergency first aid kit with you, rope, extension cords, you've got to have -- this is a tarp just in case you get some leaks.

But you know, what do we see every year? The image that sticks in our head, every year, if you don't have aluminum or steel panels covering your windows, people racing to the stores to get plywood.

Well, we went to a testing center. And what you're going to see is pretty eye-opening on what works and what doesn't.

(BEGIN VIDEOTAPE) ZARRELLA (voice over): Thirty up, a 2-by-4 impaled in a palm tree. This is one of the most telling images of Hurricane Andrew's power. When you look at this, it's pretty clear why Andrew's winds blew through thousands of homes, even many protected by shutters or plywood.


ZARRELLA: The Fenestration Laboratory tests products to see if they meet the requirements of the Miami-Dade building code, the toughest hurricane code in the nation.

For one test, we brought plywood.

(On camera): Today we've got a half inch plywood panel up here. Tell me what we're going to do.

JOSE SANCHEZ, FENESTRATION LABORATORY: Right now what we're going to do a large missile test where we propel a 2-by-4 cannon -- out of a cannon at 50 feet per second.

ZARRELLA: And what does that simulate?

SANCHEZ: That is simulating flying debris impacting the protective device protecting your opening of your house.

ZARRELLA (voice over): The technician loads the cannon with the 2-by-4. The impact spot has been marked at the center of the plywood sheet.


ZARRELLA: The 2-by-4 has blown a hole clear through the half- inch thick plywood. You need at least 5/8 inch plywood to stop the projectile. In slow motion, you can see just how easily our simulated flying debris penetrates the plywood.

Next, we tested a half-inch thick sheet of shipboard or particle board. It's no match for the 2-by-4. Keep in mind, during a hurricane event, it's not a concrete wall that's behind that piece of plywood.

(On camera): In other words, we've got to realize that this is covering a window.

SANCHEZ: Correct.

ZARRELLA: And that 2-by-4 would have gone through there, right through here and...

SANCHEZ: It would have broken the glass and then you would have had wind flying through your house.

ZARRELLA: And then once you get wind in your house then...

SANCHEZ: Then, you will fly a negative pressure and that's when you start having winds blowing out.

ZARRELLA: And your roof comes off and that's when you got a real mess on your hands at that point, right?

SANCHEZ: Yes, you do.

ZARRELLA (voice over): This animation from the Federal Alliance for Safe Homes shows how it can happen when flying debris breaks a window and allows the wind into your home, creating uplift on your roof.

Finally, we tested steel panels. We are pretty comfortable they would do the trick.


ZARRELLA (on camera): We finally found something that actually stopped the projectile -- the steel shutters.

(Voice over): But steel or aluminum panels are not something you can install at the last minute.


ZARRELLA: Now I don't think there's anything that leaves a stronger image in my mind than that 2-by-4 in that palm tree, Tony, from Hurricane Andrew. And you know, next hour I'm going to give you a price...

HARRIS: Good. Good. Good.

ZARRELLA: ... on how much all this stuff costs to keep yourself safe -- Tony?

HARRIS: That 2-by-4 in that palm tree -- for that to be a lasting image for you, as many of these storms as you have weathered, that's saying something.

All right, John, see you next hour. Thank you.


COLLINS: Rob Marciano is standing by now.

And Rob, you know, you have been out and covering a lot of these hurricanes. And boy, when you see the power -- and again, you've been there sort of firsthand -- it is really amazing.

Today we need to talk about Hurricane Bertha, too.


COLLINS: Hopefully they'll get some sleep, too. We've been talking about that whole issue for a while now.

All right, Rob, thank you. MARCIANO: You got it.

COLLINS: Buckle up for a white-knuckled ride on Wall Street today. Just minutes from the opening bell, here are some things rattling nerves.

Overnight, Japan's Nikkei index slid nearly 2.5 percent. That pushes it to the lowest level in nearly three months. In the U.S., worries deepen over the health of mortgage lenders, Fannie Mae and Freddie Mac may have to raise additional cash now to weather the housing crisis.

And a new CNN Opinion Research poll shows three out of four Americans believe we are now in a recession.

And gas holds steady at yesterday's record high. High -- here is a startling measure, though -- each day Americans pay $1 billion more for gas than they did just five years ago.

HARRIS: A day?


HARRIS: OK. Let's take a closer look at these issues really impacting your wallets.

CNN's senior business correspondent Ali Velshi, keeping watch on all of this for us in New York.

Ali, Doctor, good to see you. Boy...


HARRIS: You know we can talk about the futures -- the futures markets.


HARRIS: You want to start there?

VELSHI: Yes. It turned around quite a bit.


VELSHI: Heidi was just talking about those Asian markets. You know yesterday we had a rough day on U.S. market and that spread into Asia.


VELSHI: And then this morning when I got up, sort of in the middle of the night, Asian markets were down all more than 3 percent. European markets were looking rough, but they sort of turned around partially because the price of oil has dropped so dramatically in the last two days.

HARRIS: That's right.

VELSHI: We're down in the $138, $139 range.

Let's take a look at the Dow over the last year just to get a picture of this and really, so that when you're looking at your investment, you have some sense of it.

HARRIS: That's right.

VELSHI: You can see there's been quite a drop-off in the last few months. Now that has some people saying, boy, this is really bad, it has other people saying, boy, this might be a buying opportunity.

HARRIS: Right.

VELSHI: In fact, there was one guy who said yesterday -- from UBS, the chief equities spread -- he says he thinks this market is going to be up 25 to 30 percent by the end of the year.

HARRIS: Oh come on.

VELSHI: That's a bit of an outlier in terms of the opinions that we've been hearing.


VELSHI: But funny that we're actually getting some people thinking that there are enough things out there that suggest this economy is getting better toward the end of the year.

HARRIS: I really would love to know what some of those factors might be. I mean I don't know if we have time to do it now, but -- because you've got some poll information.

VELSHI: Yes. Well, let me tell you the biggest factor is going to be how people spend their money because this is an economy that's based on consumers. And according to a new CNN Opinion Research poll, that money is not going to be spent too quickly.


VELSHI: Take a look this, 75 percent of people we surveyed say that we're in a recession right now. The bright spot there, though, Tony, look at this, in April it was 79 percent, January, 61, October, 46.

So, in fact, it does seem that the people -- Americans generally -- might be softening on their view of a recession. We also asked them how long that recession would last, just 2 percent said less than six months, 18 percent said six months to a year, 30 percent said one to two years, 23 percent said longer than that, and, of course, 25 percent say we're not in a recession.


VELSHI: You know, recessions, Tony, latest recessions have lasted eight to 10 months. So even if we are in one or we're getting into one, it probably won't be as long as two years.

HARRIS: That's interesting. So these recessions can go sort of long and deep where they can be...

VELSHI: Yes. Short or shallow.

HARRIS: ... short and shallow.

VELSHI: Hard to know. I mean we really are one of those -- in all the time I've reported business news, I haven't had so many different opinions in so many different directions. So that's kind of where we are right now.

HARRIS: Hey, look, are you releasing some of those oil -- I know you're on the big "AMERICAN MORNING" program. Are you releasing some of those oil sands pieces...


HARRIS: ... so we can run them here in the NEWSROOM?

VELSHI: We will absolutely have them, "ENERGY HUNT." I've been looking around the world and we're going to keep on looking around the world. I went to the oil sands of northern Alberta and I will get that for you.

HARRIS: Literally, share the wealth, OK?

VELSHI: I will.

HARRIS: All right, Ali. Appreciate it, thank you.

VELSHI: Anytime.

COLLINS: Happy to be home. Americans held hostage speaking out for the first time with tough words for their Colombian captors.


HARRIS: You know, he had a headache and now he knows why.


UNIDENTIFIED MALE: The blunt part of the pin actually hit me first and it hit me right next to the nose and it came back. It traveled all the way to the back of my head and ended up back here. It stopped by hitting the back of my skull.


HARRIS: Uhh! Metal migraine in the NEWSROOM.


ANNOUNCER: Covering the angles, uncovering the details, see for yourself in the CNN NEWSROOM. HARRIS: The Americans held captive by Colombian rebels are now speaking publicly for the first time since the daring rescue. It happened at Brooke Army Medical Center in San Antonio. The men say they're happy to be home, but they can't forget the other hostages still trapped in a jungle nightmare.


MARC GONSALVES, FORMER HOSTAGE: The FARC are not a revolutionary group. They are not a revolutionary group. They are terrorists. Terrorists with a capital "T."

I want you guys to imagine that right now, right now, they're wearing chains around their necks. They're going to get up early tomorrow morning, they're going to put a heavy backpacks on their backs, and they're going to be forced to march with that chain on their neck while a guerrilla with an automatic weapon is holding the other end of his chain, like a dog.

THOMAS HOWES, FORMER HOSTAGE: Almost 5 1/2 years ago we fell off the edge of the earth. My companions helped me cope with difficult positions. During these years, our companies took extraordinary care of our families. Heroes carried out a spectacular rescue.

KEITH STANSELL, FORMER HOSTAGE: They are -- these people here -- the reason that I'm alive and standing right here with all of you today. Their consistent dedication and unwavering love never failed. It kept me alive. Believe that, it kept me alive.

And to Governor Crist of the great state of Florida, sir, I don't have a driver's license, how am I going to get home?


HARRIS: That's good stuff. OK. All three men lost about 30 pounds during their ordeal. Northrop Grumman, the company they had been working for, is now helping them adjust to life as free men and maybe working on that driver's license.


COLLINS: Yes, (INAUDIBLE) the first order of business.


COLLINS: Well, it's the economy, you know it, and the presidential candidates know it. Both of them are pitching their plans today.

Senator John McCain began right here on CNN's "AMERICAN MORNING."


SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: The fact is that there's a whole lot of economists, including Nobel laureates, who agree with my plan. We're going to reach restraint spending we're going to have the economy grow again and increase revenues.

It's not -- it's not the -- the problem is that spending got completely out of control. We grew government by some 40 percent since the great society. The spending got out of control, we restrained spending, we keep people's taxes low, we create jobs, 700,000 jobs by building new nuclear power plants, 20,000 new jobs by coal gasification, so that we have clean coal technologies, new automotive technologies, and we'll balance the budget.


COLLINS: McCain's plan is to balance the budget by 2012. He'll court Latinos this afternoon at the League of United Latin American Citizens convention.

HARRIS: Right now, Democrat Barack Obama is here in Georgia. He is hosting a town hall meeting on the economy this hour, just outside of Atlanta.

Obama testing the waters in a state that's been solidly Republican in the last three presidential elections. Like McCain, he'll be in Washington later today to address the convention of Latino American voters.

Obama had to postpone yesterday's stop in North Carolina. Breaking news right here in the NEWSROOM, Heidi. The NTSB says it will investigate the problem that forced his plane to land in St. Louis.

COLLINS: Kids with high cholesterol. Pediatricians say they should be on drugs, but what about the risks and side effects? Dr. Sanjay Gupta weighs in.


ANNOUNCER: This is CNN, the most trusted name in news. Now back to the CNN NEWSROOM.

COLLINS: Should your 8-year-old take cholesterol-lowering drugs? We talked about this yesterday afternoon. The American Academy of Pediatrics has set some new guidelines and a lot of people are asking questions now about it. So let's go more in depth with chief medical correspondent, Dr. Sanjay Gupta.

All right, so what do parents need to know here? I mean nobody really wants to put their child on drugs.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: No, they don't. A couple of things they need to know, though. One is that heart disease -- the process of heart disease starts very early in life even as a child. That's something to keep in mind.

And two is that more and more children than ever before are getting or at risk for heart disease as they become adults. And that's why the American Academy of Pediatrics sort of widening their net -- that's the way I sort of think about it -- for testing, for screening, and possibly even treating.

You get your family history, ask about your blood pressure, heart rate, things like that, but also cholesterol. Take a look at specifically what they're going to ask about and possibly even treat. If the number is 160 or above, that's the LDL cholesterol level, and the child has two risk factors, that may warrant medications. 190 with no risk factors, that may also warrant medications.

And keep in mind we are talking about children here as young as 8 years old.

COLLINS: Yes. Yes.

Some of the side effects, we should probably talk about too, because these are some big-time drugs, statins.

GUPTA: Yes. And you know, as parents, both of us -- that was the first question I asked as well. And here's -- here's the actually -- the right answer, I think, and that is that we don't know, because there haven't been too many kids who have been on these types of medications their entire lives.

So we don't really know the answer. There's some ten-year studies now. It shows that it's as safe as it is for adults. You know they're still at risk for liver problems, for muscle pains, for nausea, but they're also going to be needed to be on this medication for the rest of their lives.

So this is a big decision, as you pointed out, Heidi.

COLLINS: Yes. And a lot of this goes back to, does it not sort of -- the obesity for kids. In fact, some of the doctors now, the American Academy of Pediatrics is saying, you know, maybe you shouldn't give them that really thick, fattening milk when they're little.

GUPTA: Right. Yes, and, you know, it's funny, because I was, you know, with my girls this past week, and, you know, they drink whole milk still. But the American Academy of -- and there's a reason for that. They say, you know, the whole milk has plenty of fat in there, which is good for brain developments.

COLLINS: Brain, yes.

GUPTA: But now they're saying past the age of 12 months, especially if your kid is at risk for -- being overweight or being obese, or have some strong family history, going to the 2 percent is OK after the age of 12 months.

Skim milk, probably still avoid that, but 2 percent OK, and again, after the age of 12 months. So lots of things changing here. We're starting to see the ramifications, if you will, of the obesity epidemic that we've talked so much about.

COLLINS: Yes, absolutely. All right. No skim milk, though, because that's just like water. GUPTA: Yes.

COLLINS: Isn't it?

GUPTA: Doesn't taste good, doesn't do anything. Yes.

COLLINS: Yes, all right. Dr. Sanjay Gupta, thank you.

GUPTA: All right. Thanks.

HARRIS: Fighting fire with fire in California. One man gaining praise from firefighters and a possible jail term for his brother.


ANNOUNCER: Live in the CNN NEWSROOM, Tony Harris and Heidi Collins.

HARRIS: All right. Let's get you to the New York Stock Exchange, now moments away. Pause. Let everyone enjoy the ringing of the...

COLLINS: "Sensuous" ringing of the bell.

HARRIS: Whoa, Estee Lauder? Those folks -- those cosmetic folks. Is that...

COLLINS: Yes, that's a new perfume, apparently.

HARRIS: OK. And there you go. The ringing of the bell there in New York Stock Exchange...

Let's get the business day started.

You know, Monday was a pretty volatile day thanks to new credit concerns.

Susan Lisovicz at the New York Stock Exchange for a look at how things are shaping up today.

Look into your crystal ball just a little bit, with the benefit of, you know, the futures markets and what they were telling us, and give us a sense of where we might go today, Susan.

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Well, the futures tell us it's a quiet open, Tony, but what we've seen ahead of that is anything but. A global sell-off.

Japan's benchmark Nikkei slid to its lowest level in three months. And we are seeing a sharp sell-off in Europe as well. But concern overseas, the same issue that has been pressuring the market here, that we'll see more distress in second quarter earnings, particularly in the financial sector.

Right now we're in a painful period. We don't hear from big banks until next week. But we saw the sector slammed yesterday, Tony. That's where the volatility came in.

And huge losses for the nation's largest mortgage lenders, Fannie Mae and Freddie Mac. They plummeted to their lowest levels in more than 14 years. A dramatic loss of confidence in the government- sponsored lenders, considered crucial to restoring the health of the housing market.

There you see the numbers right now.

HARRIS: Yes. Yes.

LISOVICZ: We've got plenty of time. Plenty of time.

The S&P 500 could become the last of the three major averages to enter a bear market. It did so yesterday. It's just a hair away right now.


LISOVICZ: Futures improved, Tony. In the last hour, during a speech by Ben Bernanke, who said the Central Bank is considering giving Wall Street firms more time to draw emergency loans directly from the Federal Reserve, essentially becoming a banker of last resort.

Also, finally, Tony, working in the bull's favor today, oil is down sharply again, well below $140 a barrel. In fact, close to $138 a barrel.

The only economic report is due in less than 30 minutes. It is pending home sales. And we expect a decline there.

HARRIS: Well, glad you're with us and, you know, to follow these market changes for us. Glad to hear that oil is at least down. Maybe that will provide a bit of a boost. Who knows?

Susan Lisovicz at the New York Stock Exchange for us.

Thanks, Susan.

LISOVICZ: Thanks, Tony.


COLLINS: Just a reminder, quickly for you, Barack Obama about to speak in Powder Springs, Georgia, sort of a town hall that he has set up there. Of course we're going to bring that to you live. Live pictures.

When he comes to that podium -- you can see it there. People starting to gather and are going to be talking about the economy, as we mentioned earlier this morning. Of course, we'll bring to it you live when it happens. Want to get back to the fires that we've been talking about. Surrounded by flames in Big Sur, one man goes to the extreme to save his home, landing him in trouble with the law.

CNN's Dan Simon has the story.


DAN SIMON, CNN CORRESPONDENT (voice over): With flames bearing down on Big Sur, Micah Curtis had few options to save his family's 55- acre fire. Firefighters were fighting other fires, so Curtis did what he thought was right. He set a backfire, something that usually only professionals do to burn the brush that fuels a fire path.

MICAH CURTIS, BIG SUR RESIDENT (on camera): How did you actually start the backfire?

With highway flares?

SIMON: You used a highway flare?

CURTIS: Which is why we got busted, because they were two miles away with binoculars watching us, and they saw a highway flare.

SIMON (voice over): Busted is right. Starting your own backfires is illegal because so much can go wrong. A backfire can spark other unintended fires and cause massive damage.

(on camera): Curtis doesn't exactly have a ton of experience. He was a firefighter 30 years ago during his college summers. But he says he knew what he was doing and credits his backfire with saving as many eight house on this mountain ridge, including this one.

CURTIS: Our backfire saved us. If we hadn't had those backfires, we would have been meat in a sandwich between two flames coming up at 2:00 in the afternoon in 40-mile-an-hour winds.

SIMON: Curtis says the backfire was textbook perfect, burning brush and then dying out. He claims some fire crews even praised his work.

CURTIS: Every fireman that comes up here that's a captain or anything like that has just said we did incredible work.

SIMON: But authorities say the outcome is irrelevant.

MIKE DIETRICH, BIG SUR COMMANDER: What if this was a bad process with a bad outcome, possibly a fatality or a burn-over of firefighters or other citizens? He was fortunate, but that's not something we subscribe to.

SIMON: Fire crews say they warned Curtis to stop his backfires, but he continued. Curtis disputes that. He claims he stopped when he was told. What is not in dispute is the sheriff's office made an arrest. But instead of arresting Micah Curtis, they took his brother into custody. CURTIS: And my brother, Ross, says, "If somebody's going to be the fall guy here, it's going to be me."

ROSS CURTIS, MICAH'S BROTHER: Me and my cousin were talking and I said, "Well, we need a sacrificial lamb to go down there because they're not going to leave until they have what they want."

SIMON: By taking the fall, he says it allowed Micah to continue saving the family property. Ross Curtis could face up to a year in prison and a $10,000 fine.

What is it all worth it?

M. CURTIS: Ninety-nine percent of the people should not do what we did, and I'm not even saying it's a good idea we did it. But we did it, we saved our place. The proof is in the pudding.


COLLINS: Well, backfires are legal if you can prove it was absolutely necessary. So the Curtis brothers may have a legal leg to stand on. For now, though, it's up to prosecutors to decide the next step.

HARRIS: A top military man painting a positive picture of Iraq. Joint Chiefs of Staff Chairman Admiral Michael Mullen is on a four-day tour of Iraq. Mullen says security there has improved with the level of violence dropping to four-year lows.


ADM. MICHAEL MULLEN, JOINT CHIEFS CHAIRMAN: The local commanders on the ground that I spoke with today are confident in the Iraqi security forces, they've seen progress, and they see a level of violence, I think I was told, we're down to three to five attacks a day in Baghdad. And that's a dramatic, dramatic drop from where it used to be.


HARRIS: That's for sure. Mullen says if the security situation remains stable, a decision could come later this year on reducing the number of non-surge troops.

The economy may have replaced Iraq as the top issue for many voters, but what's happening on the ground there still is of critical importance.

Our correspondent Frederik Pleitgen joins us from Baghdad, as we sort of talk through some of these issues.

Frederik, good to see you.

Kind of a lengthy question to get us going here, but it gets at the heart of where we are right now. Iraqi Prime Minister Nuri al- Maliki says that he wants a timetable to get U.S. forces out of his country as part of the security deal, the SOFA, that is being negotiated now between Iraq and the United States.

Does he mean it when he says he wants a timetable, or is this for domestic consumption?

FREDERIK PLEITGEN, CNN CORRESPONDENT: Well, this is clearly something that he's saying for domestic consumption. And I don't even think that it's mainly for the Iraqi public. I think he's saying this mainly to appease a lot of the people in the Shia political factions here in Iraqi parliament, and also in the Iraqi government.

Look, the fact of the matter is that the Iraqi government and the U.S. government have been talking about the Status of Forces Agreement for a very, very long time, and both sides are very frustrated. And of course, the Iraqi side, and especially the Shia in the Iraqi side, are very frustrated at the way these talks are going on.

There are several issues that are very important to this side that they say they will not budge on. Should American troops be able to conduct operations within Iraq without consulting the Iraqi government? Of course the Iraqi government says absolutely not.

Should contractors have immunity from Iraqi law? Iraqi government says absolutely not.

And those are points where the negotiations seem to be very, very difficult. And this is one thing where Nuri al-Maliki is making a clear statement to the people within his own government, especially the Shia faction, saying, I'm being very, very tough on this issue. I'm being tough against the Americans.

Of course, one of the main things that he's also doing at the same time is he's sending a very clear message to Washington, pressuring Washington, pressuring the American side in all of this and saying, listen, if these negotiations don't go forward, if we don't come to an agreement that we, the Iraqis, like, then we just won't have a Status of Forces Agreement. Then we'll try to reach some kind of short-term agreement. But what he is saying is that, what is absolutely essential is that there be a timetable for U.S. forces to withdraw, and of course that's something that many people in Washington and many American commanders here in Iraq are not very happy with.

HARRIS: Hey, Frederik, the U.S. Embassy is reporting that 15 of the 18 congressional benchmarks have been met by the Iraqis. I wonder how you would describe -- boy, I lose track of how many times you've been to Iraq right now, but I wonder how you would describe, first of all, the security situation there.

PLEITGEN: Well, it's my fourth time actually in a year, and I've really seen the security situation here in Baghdad and also in other parts of Iraq improve significantly within that time frame. But, of course, there's several things that you do have to keep in mind here.

Of course, when you look at a city like Baghdad, which was a very mixed city for a very long time -- Sunni, Shia, and also Christians there -- very much mixed amongst each other, right now that's basically a segregated city. You see blast walls everywhere. So these factions are really being kept apart here in the city. Nevertheless, if you look at the Iraqi security forces from a year ago and you look at the Iraqi security forces today, their numbers, their training, and also the sort of operations that they are able to conduct themselves, there has been a significant improvement.

Now, we were listening to Michael Mullen earlier before this live shot, and he was saying that he's seeing significant increase in progress as well. But one of the things he also said, he said even with that increase, he doesn't believe American forces should be leaving Iraq anytime soon -- Tony.


Our Frederik Pleitgen for us in Baghdad.

Frederik, good to see you. Thanks.

COLLINS: Barack Obama on stage now, about to speak in Powder Springs, Georgia. Actually, there he is, sitting on the right-hand side there. I believe he's being introduced here shortly. So when he gets to the podium and begins speaking, we're going to bring it to you live.

Meanwhile, pointing the finger at Pakistan. An Afghan government official is tying yesterday's suicide car bombing to the Pakistani intelligence service. The bombing outside the Indian Embassy killed more than 40 people. No immediate comment from the Pakistani government to that charge.

Pakistan has previously denied links to similar attacks in Afghanistan. Pakistan's intelligence service once had strong ties with the Taliban.

Making a statement, but lacking a commitment. CNN's Kyung Lah reports on what leaders of the G8 summit pledged today on climate change.


KYUNG LAH, CNN CORRESPONDENT: A lot of discussion here out of the G8, but not many quick fixes. And there have been declarations, but no real, hard commitments as far as climate change.

Now, the White House says that it is very pleased, calling it substantial progress, the G8 declaration on climate change. Now, the declaration does state that the world economies all have to work together to agree that there should be some sort of global approach as far as climate change. And the world economy should agree to a six percent cut in emissions by the year 2050.

But here's what the declaration does not say. What it doesn't say is that the White House itself, the U.S., one of the world's biggest polluters, is agreeing that it needs to slash its own emissions by 50 percent by 2050. Now, the U.N., Japan, and the EU all believe that the U.S. must lead the charge, that the U.S. should agree to cut its own admissions. U.N. Secretary-General Ban Ki-moon spoke CNN today, saying that he does not believe that there will be any true substantial climate change progress until President Bush leaves office.

Do you see an agreement while President Bush is in office?

BAN KI-MOON, U.N. SECRETARY-GENERAL: Practically speaking, we may have to expect the next president of the United States, whoever it may be, will have to exercise and demonstrate the political leadership as soon as one is sworn in as the president. In fact, before that, President Bush and his administration should pave the way for that smooth transition to the next administration.

LAH: As far as the economy, there was a declaration on that as well out of the G8, saying that there is general global optimism as far as the long term, but in the short term, that there are some concerns about commodities, like food and oil, and that those need to be addressed in the short term, immediately, if there is to be any sort of stability in the short term.

Kyung Lah, CNN, Japan.


COLLINS: Quickly want to take you back to the stage, Powder Springs, Georgia, Senator Barack Obama.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: ... civil rights leader and a great friend of mind, Reverend Dr. Joseph Flowers (ph). Please give Joseph Flowers (ph) a big round of applause.


Where is he? He's around here somewhere. He's around here somewhere. He may be sneaking up in the back.

I also think that -- I've got some members of the congressional delegation who are here. Am I correct about that? OK. So let me go through them.

First of all, a great supporter, Congressman Sanford Bishop.


Congressman Hank Johnson.


I don't know if Congressman John Lewis is here, but I'm proud of him.

Congressman John Barrow. Congressman David Scott. There he is back there.

And we imported one of the finest congressmen in the country, the chairman of the Judiciary Committee, Congressman John Conyers from Detroit.


To all the other elected officials and dignitaries who are here, thank you so much for your attendance.

I'm going to speak just for about 10 minutes, and then what -- no, no, hold on.


And then what I'm going to do is we're going to open it up and we're going to have a town hall meeting, because I want to spend some time...


I want to spend some time answering your questions and hearing from you.

But I want to talk a little bit about the economy this morning. I've often said that I'm running for president to put...

HARRIS: OK. Here's what we're going to do. We're going to work our way through the thank yous, take -- all right, let's listen in.

OBAMA: You'll be able to build a better life not just for yourself, but for your children and your grandchild. And then after a lifetime of work, you'll be able to retire with some dignity and some respect.

But folks here in Powder Springs know all too well that that dream feels like it's slipping out of reach for too many Americans. More and more Americans are losing their job each month. We've had 436,000 jobs lost here in the United States since January.

Those who haven't lost their jobs who are still working feel like you're working harder for less. Families have seen their incomes on average fall nearly $1,000 since George Bush took office.

Meanwhile, the cost of everything from a gallon of milk to a gallon of gas has skyrocketed. College tuition, going up. Health care costs, going up.

I've met Americans all across the country who are facing financial hardship. And in some cases, bankruptcy, because like Lawrence (ph), their medical bills have driven them to financial ruin. Or because they were tricked into buying a home that they could not afford.

It's known as the middle class sweeps (ph), and it's pushing families deeper and deeper into debt. The typical household now has over $9,600 in debt. Along with this rise in debt, we're seeing a sharp rise in bankruptcies.

In the first six months of this year alone, we saw nearly half a million people, 500,000 people, file for bankruptcy. That's a 30 percent increase from what it was the same time last year.

Studies show that half of those filing for bankruptcy are probably families with children at home, and three-quarters are declaring bankruptcy after losing a job or suffering a serious illness. Now, these bankruptcies aren't happening on their own. They reflect an underlying economy that is weak.

To address the rising bankruptcy rate at its source, we have to make long-term investments to strengthen our economy. And that's why I proposed plans to create millions of new jobs, investing in American infrastructure, to get energy costs under control by making America energy-independent, to make health care affordable for families and businesses, to put a college degree in the reach for anyone who wants to so that Americans can have the skills to compete in our global economy.

That's how we're going to solve the long-term problems that we face in our economy. But Americans are also looking to Washington for some immediate relief, some short-term relief. So let's take the bankruptcy problem as an example.

Now, let me be clear. The American people aren't looking for government to solve all their problems. You believe in hard work. You believe in personal responsibility. You believe in paying your bills.

But you also believe that if you fall on hard times, Washington should be there for you. And yet, instead of standing up for you, Washington's been standing up for big banks, for credit card companies, for mortgage company companies.


For too long, our bankruptcy laws have protected the special interests, the big banks and credit card companies, instead of struggling families. And while John McCain is an honorable man, and I respect and admire his service to our country, the fact is, when it comes to strengthening the safety net for hard-working families, John McCain has been part of the problem, not part of the solution.


Like George Bush, Senator McCain does not believe the government has a real role to play in protecting Americans from unscrupulous lending practices. While I opposed the credit card industry's bankruptcy bill that made it harder for families to climb out of debt, John McCain was supporting it. He even opposed helping families who are only in bankruptcy because of medical bills they couldn't pay.

He sided with the big banks, again, when it came to protecting the most valuable possession that older Americans have, and that's their home. And again, when it came to protecting families who are suffering in the wake of the storms that hit New Orleans, Katrina and Rita.

Senator McCain would continue the economic policies that have hobbled families and our entire economy. He would continue to allow the banks and credit card companies to tilt the playing field in their favor at the expense of hard-working Americans.

Well, I'm running for president because I don't believe we can afford four more years of George Bush policies.


I don't think we can afford four more years to favor Wall Street over Main Street.


I intend to reform our bankruptcy laws to give Americans who find themselves trapped in debt a second chance. Because while Americans should pay what they owe, and we should be fair to those creditors who are fair to their borrowers, we also have to do more for the struggling families who need help the most.

And that starts with ending the outrage of Americans going bankrupt just because they get sick. Half of all personal bankruptcies arise because somebody has a serious illness.

That will change when I'm president. If you can...


First of all, I'm going to give you a health care plan that works for every American. If you've got health care, we're going to lower your premiums by $2,500 per family per year.


If you don't have health care, you're going to be able to buy into a plan similar to the one I have as a member of Congress and John Conyers as a member of Congress. We're going to -- so that every single person will be able to get health care, and we're going to crack down on insurers who won't pay the claims despite the fact that you've been paying the premiums. We're going to put an end to that.


But for those who have gotten caught up in their medical expenses, if you can demonstrate that you went bankrupt because of medical expenses, under my plan you will be able to relieve that debt and get back on your feet.


We're also going to update -- we're also going to help struggling homeowners by updating our bankruptcy laws to ensure you that can renegotiate your mortgage and stay in your home. Let me explain the way the bankruptcy laws work right now. If you have a second home, if you've got a vacation home, then the court in bankruptcy is allowed to work that out so that you can keep it. But if it's your first home, you can't do that.

Now, think about that. If you're rich and you've got a vacation home, then you can work that out in bankruptcy. If you're a working family and it's the only home you have, you can't work that out in bankruptcy.

That makes no sense and it's going to change when I'm president of the United States of America.


And today I also want to announce a few additional steps that I'll take as president to restore fairness to our bankruptcy laws.

First of all, we're going to help those service members and military families who are being stretched thin because of repeated moves, long deployments.


They're being affected by repeated moves, long deployments. They're being preyed on by predatory lenders that see them as an easy target. Let me tell you something -- if you are protecting America, America should be protecting you from unfair bankruptcy laws.


And that's why I'll create a fast-track bankruptcy process for military families. We're going to exempt them from the harsh means test that makes it harder for debt to be forgiven.

We're going to cut unnecessary paperwork. We're going to let them keep a greater share of the value of their home. And we're going to change the rules to say that service members and their families can only use those exemptions if their laws in the state allow it.

We're not going to -- we're not going to just have it subject to what your state law is. My attitude is, if you are serving this country, then you deserve to be protected under federal law. You should be protected no matter where you live.


The second proposal I'm announcing will help older Americans. You know, our seniors have actually seen their bankruptcy rates rise 150 percent over the last 15 years. Our parents and grandparents are declaring bankruptcy at a faster rate than any other American. But unlike younger families, they don't have future earnings to count on to help them climb out of debt. Often they don't have much in their savings account either.

What they do have is their homes. And for older couples, that's the most valuable thing that they have. And that's why as president I'm going to help make sure that if you are older than 62 years old and you're facing bankruptcy, that you have a better chance of keeping your home. Because if we're serious about protecting retirement security, we need to protect the homes that are the cornerstone of a secure retirement.


So we're going to have a larger homestead exemption so that seniors are less threatened, particularly if they've gotten involved in some sort of predatory loan. And a lot of seniors are being tricked all across the country, having their equity drained from them and leaving them insecure.

The same thing is true when it comes to families who are recovering from natural disasters. We're going to streamline the bankruptcy process for them and enact a temporary moratorium so that those families don't have to worry about collectors at a time where they're just having to rebuild their lives.

Now, this is all part of a larger plan that I have to restore balance and fairness to our economy. In November, I proposed a plan to help families who are mired in debt since so many who are struggling to keep up with their mortgages are now shifting their debt to credit cards.

We have to make sure the credit cards don't become the next stage of the housing crisis. To make sure that Americans know what they're signing up for, I'm going to institute a five-star rating system to inform consumers about the level of risk involved in every of credit card. We're going to establish -- we're going to establish a credit card bill of rights that will ban unilateral charges on credit card agreements so they can't just change up on you after you've already gotten your credit card.


COLLINS: All right. There you have just a bit of Senator Barack Obama's speech that he is giving today, a town hall meeting, actually. So I believe there will be questions later on. Powder Springs, Georgia, talking about the economy today.