Attorney General Announcement Could Come Soon; Second Term Proposal Analysis
FREDRICKA WHITFIELD, CNN ANCHOR: Coming up on the half hour now. I'm Fredricka Whitfield, in for Rick Sanchez.</s>DARYN KAGAN, CNN ANCHOR: And I'm Daryn Kagan. Let's look at what's happening now in the news. The military says U.S. troops control 70 percent of Falluja today. The offensive to retake the city from insurgents is now three days old. Thirteen coalition deaths are reported. And a developing story we're following -- Iraqi troops have discovered what they call "hostage slaughterhouses" in Falluja. We'll bring you more information as it comes in. A cleric was summoned to Yasser Arafat's bedside today as the Palestinian leader lay near death in the Paris hospital. Officials say Arafat is in his final hours. We're told that a funeral is being planned, with burial in the West Bank. The government says oil prices will likely remain in the mid to high $40 range through the end of 2005. That dashes any hopes of a significant drop in gas prices in the coming months. Oil is trading at $47 a barrel this morning in New York. And the Federal Reserve is expected to bump up interest rates by a quarter point today. It would be the fourth increase this year. Keeping you informed, CNN is the most trusted name in news.</s>WHITFIELD: Among the top stories, President Bush is getting ready to pick a new attorney general. An announcement could come soon. Let's talk with White House correspondent Suzanne Malveaux about the second term turnover. Hello, Suzanne.</s>SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, hello, Fred. You're absolutely right. That announcement could come as early as today. We are learning now, as well as Congressional as well as administration sources are telling us that the president's pick for the successor of Attorney General John Ashcroft is, in fact, his White House Counsel Alberto Gonzales. This is someone that senior aides say that the president inherently trusts. That they came together four years ago. He served under President Bush on the Supreme Court of Texas, as well as secretary of state and general counsel. It would make him the first Hispanic to actually own that post. Now, we're told, of course, that this is going to be perhaps a change -- perhaps a change in direction. As you saw just yesterday, it was Attorney General John Ashcroft who said that he was resigning. He sent over this five-page, hand-written letter to the president, actually on Election Night. But we're told that the president thought it over at Camp David over the weekend and didn't accept his resignation until much later in the week. But of course, Ashcroft has become someone who is somewhat controversial. He has, of course, made some efforts in terms of state, as well as criminal matters. But of course, also anti- terrorism issues. Those are the things -- the Patriot Act -- that many critics have said have rolled back some of the civil liberties. It is expected, however, that Alberto Gonzales, this pick is going to be one that likely will pass through the Senate. It is something that moderates believe he will be able to succeed -- Fred?</s>WHITFIELD: And because you're saying that moderates are likely to accept him, the White House is feeling fairly confident that this is a shoo-in appointment?</s>MALVEAUX: Well, they don't believe it's a shoo-in, but it says a lot, his appointment. Because essentially, this was something -- there was some talk about him actually being nominated as a Supreme Court justice if, in fact, there's an opening there. What this indicates, however, is they're going to leave that seat open, perhaps for a social conservative. They do believe it's much more likely that he'll be able to be confirmed as attorney general through the Senate. There are some Republicans who believe that he, in fact, is too moderate on social issues, that he would not actually -- that they would not accept that nomination on the Supreme Court.</s>WHITFIELD: All right. From the White House, Suzanne Malveaux, thanks so much -- Daryn?</s>KAGAN: President Bush has outlined an ambitious domestic agenda for his second term. We want to take a closer look now at some of his proposals and how they might affect you. We're going to start with Social Security.</s>JOHN KING, CNN CORRESPONDENT (voice-over): This is John King at the White House. It was a staple of the president's campaign stump speech.</s>GEORGE W. BUSH (R), PRESIDENT OF THE UNITED STATES: I believe younger workers ought to be allowed to take some of their payroll taxes and put it into a personal savings account.</s>KING: But Mr. Bush's controversial Social Security proposal is much more an idea than a plan. The president has not, for example, set a percentage of Social Security taxes he thinks younger Americans should be allowed to divert to private accounts, or offered an estimate of how much such a dramatic change would cost. The White House won't say when, or even if, Mr. Bush will propose specific legislation.</s>UNIDENTIFIED MALE: I think it's a little premature to speculate right now.</s>KING: Some studies suggest the transition could cost as much as $2 trillion. The president opposes raising Social Security payroll taxes, and says those nearing retirement age won't face benefit cuts. But many other key questions are left for the debate to come, including whether to raise the Social Security retirement age, to change how cost of living increases are calculated, and to reduce benefits for younger Americans. Mr. Bush says it is irresponsible to do nothing. Fifty years ago, there were 16 workers for every person receiving Social Security. Forty years from now, that ratio is projected to be just two to one. John King, CNN, the White House.</s>SEAN CALLEBS, CNN CORRESPONDENT (voice-over): Part of President Bush's energy plan for his second term calls for exploratory drilling in Alaska's Arctic National Wildlife Refuge, to reduce dependence on overseas oil. He says the untapped area will produce a million barrels a day for 20 years. The U.S. uses about 18 million barrels a day now.</s>ADRIANA RAUDZENS, SIERRA CLUB: It wouldn't provide oil until about 10 years from now. It would take that long to come online. So, it's certainly not a solution for our short-term gas prices or energy prices.</s>CALLEBS: Bush's 2003 energy measure was scuttled by Democrats and some Republicans, saying the president relied too much on advice from big oil, coal, and gas companies. And there's a huge divide between Bush and environmentalists. While he touts the Clear Skies Initiative, critics say it won't improve air quality from burning fossil fuels. And although the president continues to push his Healthy Forest Restoration Act, it calls for thinning and logging national forests.</s>GOV. BILL OWENS (R), COLORADO: By removing some of that undergrowth, we actually preserve the forest from the forest fire, which is otherwise almost inevitable.</s>CALLEBS: Environmental groups say it's simply a plan that rewards timber companies. Sean Callebs, CNN, Denver.</s>ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): President Bush wants to make the tax system flatter and more fair.</s>BUSH: We must reform our complicated and outdated tax code.</s>HENRY: Some conservatives want President Bush to abolish the IRS and replace the income tax altogether. But key allies predict the president will not get radical change in his second term.</s>GROVER NORQUIST, AMERICANS FOR TAX REFORM: We are several years away from fundamental tax reform. What we're going to have over the next four years are some baby steps in that direction.</s>HENRY: Republicans say look for an end to the estate tax, more cuts in capital gains and corporate taxes, and an expansion of IRAs and 401(k)s. But the president is expected to appoint a commission to weigh major reforms, like a flat tax, which some conservatives will make the system simpler and more fair. Democrats say they favor simplicity, but warn another proposal, a national sales tax, would be unfair.</s>REP. CHARLES RANGEL (D-NY), WAYS & MEANS COMMITTEE: I just don't see how the American people are prepared to have their taxes increased 20, 30, 50 percent, and to give further relief to the richest people we have in the United States of America.</s>HENRY: Another problem -- every tax loophole the president wants to close has a constituency that doesn't want to see it shut.</s>KAGAN: And we have our Congressional correspondent Ed Henry with us from Capitol Hill with more on President Bush's second term agenda. Ed, good morning.</s>HENRY (on camera): Good morning, Daryn.</s>KAGAN: You're ready for the Ed Henry Questions of the Day?</s>HENRY: I am.</s>KAGAN: I want to start with the big overview here. You look at the gains that were made in Congress for the Republicans, but is this going to be a free ride for President Bush, or it's going to have to take more interesting politicking to get things done over the next four years?</s>HENRY: It will clearly not be a free ride. The White House knows that, and Republican leaders on the Hill understand that, as well. The key is that there are now 55 Republicans in the Senate. That will really help the president move his second term agenda forward. But he has some moderates -- like Arlen Specter, who is now getting into a little hot water, people like Lincoln Chafee of Rhode Island -- who are not always going to be on board for some of these initiatives, whether it's Social Security reform, whether it's judges, whether it's environmental policy. So, the president is constantly going to have to be looking at his own Republican conference up here in the Senate. And he's also going to have to try, as he himself has said, to reach out to some of the new Democratic leaders in the Senate, like Harry Reid of Nevada. And the Democrats are still trying to pick up the peaces from the election and figure out whether or not they want to work with the president or whether or not they want to fight him. So far, Democrats are saying they'll do a little bit of both, but they haven't quite figure out that balance just yet. There's obviously time to do that. And the president is saying he wants to spend his political capital. One area where he will have to spend a lot of capital is tax reform. A major tax reform has not been done by Congress since 1986. And there's a reason for that -- every loophole in the system has a lobbyist, and they want to fight to keep it.</s>KAGAN: You bring up Arlen Specter. I think it would be interesting to talk about him -- not specifically because of what he said in terms of the Senate Judiciary Committee and a future Supreme Court nominee -- but he brought up an important point, and that is numbers in the Senate. The Republicans gaining on the majority, but they don't have a key number, and that is to break a filibuster.</s>HENRY: That's right, you need 60 votes to break a filibuster in the Senate. That's why it's significant that Republicans have 55 Republicans in the Senate now, because it's more than they had before. They had 51. So they're closer to 60, but they're still five short. And as I mentioned, if people like Arlen Specter peel off on some key judicial nominations, the president is going to have to reach across the aisle and find some conservative Democrats try to get up to that 60 number, that magic number, and break filibusters, whether it's on nominations or policy. But I can tell You, The White House and Republicans up on the Hill, they know that there are a lot of conservative Democrats up for re-election in 2006, somebody like a Ben Nelson, a Democrat from Nebraska, who realizes he has to work with the president, help break filibusters, otherwise, they may end up becoming like Tom Daschle, somebody who is fighting the president, and ending up going down in defeat in 2004 -- Daryn.</s>KAGAN:: If it can happen to the Senate minority leader, it can happen to anybody on Capitol Hill. Ed Henry, excellent job on the Ed Henry questions, as always. Thank you.</s>HENRY: Thank you.</s>WHITFIELD: Well, Daryn, I want to show you some new pictures just now coming in out of San Antonio. This is the result of a runaway train crashing into a cold-storage warehouse. One person is dead, another injured, and those two people were inside that warehouse. You're looking at the live pictures right now, just now coming in, of this tragedy taking place involving a runaway train. More information as we get it. And we are just hopping with breaking news today. Getting word out of the White House that President Bush, indeed, will nominate Alberto Gonzales to become the next attorney general. We'd gotten word yesterday that John Ashcroft will be stepping down, that he has offered his resignation, so much more on that ahead. Here you can see, right now, he is White House counsel. When he was born, comes from Texas, a longtime Bush adviser, somebody who had been bandied about for a long time as a possible supreme Court nominee. The job that's open now is attorney general, and it looks like that will be President Bush's pick to become...</s>WHITFIELD: His name will be taken off that short list for a possible Supreme Court justice. However, he still has to go through confirmation hearings, and it still may not be that easy, as we heard from our own Suzanne Malveaux, reporting earlier.</s>KAGAN: And lead back to Capitol Hill and Ed Henry and all of our correspondents out there. Much more on that ahead. But once again, the breaking news, that President Bush will nominate Alberto Gonzales to be the next attorney general of the U.S. We'll take a break, and we're back after this.