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LOU DOBBS TONIGHT

Rescuers Search for Survivors From South Asian Earthquake

Aired October 11, 2005 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KITTY PILGRIM, CNN ANCHOR: Good evening, everybody.
We begin tonight with a major new challenge for survivors in the earthquake in South Asia. Heavy rains, mudslides, freezing weather now threatening millions of people. Medical officials are warning of a possible measles epidemic. Cholera and pneumonia also a major threat.

The death toll in Pakistan and India now estimated to be more than 42,000. The United Nations is appealing for more than $270 million in aid. The United States is using unmanned aircraft to survey the damage.

Our first report tonight is from Bill Neely in Balakot, which was one of the worst affected cities. Now a warning, this report contains graphic images.

(BEGIN VIDEOTAPE)

BILL NEELY, REPORTER, ITV NEWS (voice over): In the ruins of Balakot's school, they break through the collapsed floors. But what they bring out is a sight beyond sadness.

It's a little girl in a green dress, all broken. She and nearly 200 other boys and girls have already been pulled out and lifted away. Their bags and books useless now. And then the work begins again.

And the work has paid off. A French rescue team using cameras to probe deep down into the schools saw a face three-and-a-half days after he was trapped in his classroom, a scared little boy.

He's about 15 feet down. Now it's critical the roof doesn't collapse. Slowly, astonishingly, the boy's limp body is pulled from the hole and handed to his father. No one could quite believe it.

Four other children were rescued like this. Four-year-old Fraz (ph) was too bewildered to eat or drink. Out of 400 children, he is one of the very few who survived.

(on camera): The conditions here for rescuing anyone are getting worse. They think there are still the bodies of 150 children in this school. The last two little girls they pulled out alive, that was 18 hours ago. And even that seems amazing.

But the weather is getting much worse now. (voice over): The rain lashed down on the bodies of children who had not yet been claimed by their parents. Perhaps because their parents, too, are gone.

Bill Neely, ITV News, Balakot, Pakistan.

(END VIDEOTAPE)

PILGRIM: The United States has launched a major relief effort for victims of the earthquake. Eight U.S. military helicopters are already in Pakistan, and dozens more are on the way. Those helicopters are flying relief supplies to the town of Muzaffrabad, which is the capital of Pakistan-controlled Kashmir. Every building in that town was destroyed or damaged.

Satinder Bindra reports.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN SR. INTERNATIONAL CORRESPONDENT (voice over): They've come from the war in Afghanistan, eight U.S. helicopters here at Rawalpindi's Chaklala air base near Pakistan's capital to help the country with its largest-ever relief operation.

Captain Brendon McCray is a 26-year-old Black Hawk pilot from Fort Worth, Texas. On Tuesday, Captain McCray loads up his Black Hawk and takes off to a 40-minute flight to one of the worst-affected areas in the mountains of Kashmir.

CAPT. BRENDON MCCRAY, U.S. ARMY: However, you know, we can help out, I pray that we can do that and help these people out tremendously.

BINDRA: When Captain McCray's helicopter and the others land in the mountain city of Muzaffrabad, Pakistani soldiers are waiting for them.

(on camera): It's absolutely critical to get these tents and bags of flour to hundreds of thousands of survivors in Pakistan's remote areas. Many people there have been complaining they haven't eaten a proper meal in days, and at this rate they say they may not be able to hold on for too long.

(voice over): Rias Acon (ph) has broken both his legs. The Americans will take him back to the Pakistani capital for treatment. His family will remain here.

"Three of my daughters are injured," he says. "They're in hospital. My wife is also injured."

Many of the wounded are young children. Most were hurt when their schools collapsed on them.

The critical element in these missions is the weather. Many sorties have had to be canceled because of heavy winds and rain. Rias Acon (ph) gets out just before the weather turns nasty. "Allah, bless the Americans," he says. "They've been very kind. I want to thank them for that."

Less than an hour after we began our journey, it's time to turn back. A lightning-fast mission that will have to be repeated for many days and weeks to come.

Satinder Bindra, CNN, Muzaffrabad, Pakistan-controlled Kashmir.

(END VIDEOTAPE)

PILGRIM: The number of people killed in Indian Kashmir has now risen to 1,300. Nearly 5,000 others were injured. Indian officials say more than 30,000 houses were damaged or destroyed by the quake. Military aircraft and helicopters have been dropping food, medicine and tents to remote mountain villages.

Well, as the world watches scenes of devastation in India, Pakistan and Kashmir, U.S. scientists have new concerns about a massive earthquake hitting right here in this country. Thirty-eight states across our nation are at risk for an earthquake. Some parts of the country sit on significant fault lines.

Brian Todd reports.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice over): Images from South Asia bring sobering caution from experts: don't think this couldn't happen close to you.

WILLIAM LEITH, U.S. GEOLOGICAL SURVEY: What we really want to get across to people is that the hazard is present all the time.

TODD: William Leith and Michael Blanpied are part of a team of seismologists at the U.S. Geological Survey. They record earthquakes every day around the world. They say larger quakes like the one in Pakistan, with a magnitude of 7.6, are rare in the United States.

But their earthquake hazard maps are an eye-opener, showing no fewer than 26 U.S. cities where significant seismic activity has occurred in the past and where it can happen again. Not just in California, but cities that you might not think of, like Charleston, South Carolina; Knoxville, Tennessee; and nearby Memphis.

MICHAEL BLANPIED, U.S. GEOLOGICAL SURVEY: Some of these cities such as Memphis, Tennessee, they actually feel earthquakes on a fairly regular basis. And people there are very aware that earthquakes are nearby.

TODD: Memphis and Charleston each experienced massive and deadly earthquakes above 7.0 in the 1800s. The likelihood of it happening again is high enough that experts at USGS are working with city leaders in these regions to improve building codes and warning systems.

(END VIDEOTAPE)

TODD: But earthquake warnings are still an inexact science. Seismologists can say where future quakes will likely occur, but they cannot predict when. And they're telling city leaders, get your building codes up to date and be ready -- Kitty.

PILGRIM: Brian, what are these cities doing to get ready?

TODD: Well, some of the cities we talked about are being proactive in try to get ready for a possible earthquake. Officials here tell us that Memphis, Tennessee; Evansville, Indiana; and St. Louis, leaders there are being proactive. They are retrofitting buildings, beginning to retrofit bridges and other facilities for a possible earthquake, and holding constant discussions with officials here at USGS just for all the different possibilities that may lie ahead.

PILGRIM: Thanks very much, Brian Todd.

Brian in Reston, Virginia.

Thanks, Brian.

Now, California residents know all too well that a major destructive earthquake could hit their state at any time. New research tonight says the likelihood of a major quick hitting California is increasing by the day.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice over): San Francisco, April 1906, a magnitude 7.9 earthquake rips through the bay area. It's felt from Oregon to central Nevada to Los Angeles. Three thousand people die. San Francisco's mayor issues a shoot-to-kill order to stop looters.

Newly-published research found there's a good chance another 7- plus magnitude quake will occur along the northern San Andreas Fault within the lifetime of most current residents.

JOHN RUNDLE, UNIV. OF CALIFORNIA, DAVIS: Our present simulations indicate that there's about a one in four chance of a magnitude bigger than 7 event in the next 20 years, about a one in two chance of such an event in 45 years, and about a three in four chance of such an event within 75 to 80 years.

WIAN: Rundle's team created this computer simulation of a thousand years of California quakes using advanced physics and geology.

RUNDLE: The butterfly things that you see are actually the big earthquakes. And the bigger the butterfly, the bigger the earthquake. The butterflies are actually what would be observed by a radar satellite. This kind of technology is available. We know it can work. And the U.S. is currently trying to put up such a satellite so that we can do real-time monitoring of these fault zones.

WIAN: That could lead to accurate quake forecasting similar to what's used to predict weather in the path of hurricanes. For now, though, seismologists rely mostly on historical patterns, reaching the conclusion that the southern part of the San Andreas Fault, east of Los Angeles, is even more overdue for a big quake than San Francisco.

DR. KATE HUTTON, CALIF. INST. OF TECHNOLOGY: All of our aqueducts and a lot of the power grid, high-pressure gas mains, you know, all that stuff crosses the San Andreas. And there's going to be a big disruption in Los Angeles because of that.

WIAN: California has done much to prepare for the dreaded big one, including implementing strict building codes to make structures safer. That could help prevent the massive loss of life suffered during Saturday's South Asia quake.

(END VIDEOTAPE)

WIAN: Earthquake forecasting is still in its infancy, but as one scientist put it, you wouldn't want to live within 20 miles of a fault in California -- Kitty.

PILGRIM: That's scary stuff. Thanks very much. Casey Wian. Thanks, Casey.

And later in the program, I'll talk with two of the country's leading authorities on earthquakes for a closer look at our country's earthquake risk. You'll want to stick around for that.

Also, in New Hampshire tonight, flood damage remains a big concern for residents. Officials continue their search for four missing people. That's after the worst flooding to hit that state in a quarter-century.

Flood watches still in effect for many New England states tonight. Ten people died on the East Coast this weekend after torrential rain.

Out West tonight, Colorado residents digging out after a massive early season snowfall. Nearly 20 inches of snow fell in parts of the state. Three people died, 80,000 homes lost power out there.

In the meantime, new evidence that heating your home this winter will be extremely expensive. The Natural Gas Industry says heating bills will rise at least 50 percent. Industry officials say there will be no shortage of fuel. However, they say heating bills for some homes this winter could hit $1,600.

Well, still to come, a new twist tonight in the police beating controversy in New Orleans. We'll have a live report on that.

Plus, how close is a global bird flu pandemic? One of this country's leading authorities is my bird -- on bird flu is my guest.

CHRISTINE ROMANS, CNN CORRESPONDENT: And I'll be reporting on our illegal immigration crisis. Failed federal border policies mean broken borders have come to Main Street, dumping a major issue in the laps of police officers, school board members and mayors.

(COMMERCIAL BREAK)

PILGRIM: President Bush wrapped up hits eighth trip to the Gulf Coast disaster region today with visits to a New Orleans suburb and a hard-hit town in Mississippi. Now, the president's first stop was in Covington, Louisiana, where Habitat for Humanity is building housing for the homeless victims of the hurricane. Now, president -- the president put on a hard hat and helped the volunteers.

Mr. Bush then went to Pass Christian, Mississippi, where an elementary school reopened this week for the first time after Katrina. He praised the hard work of the residents who are rebuilding their lives and their communities.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In spite of the fact that a lot of equipment was damaged and homes destroyed and teachers without places to live, this school district is strong. And it's coming back. And it's a sign that out of the rubble here on the Gulf Coast of Mississippi is a rebuilding, is a spirit of rebuilding.

(END VIDEO CLIP)

PILGRIM: And President Bush wrapped up his two-day trip to the Gulf, arriving back in Washington this afternoon.

In New Orleans tonight, the victim of a brutal police beating caught on videotape says he does not believe the attack was racially motivated. But the FBI continues its civil rights probe into the incident, and the Justice Department could file federal civil rights charges.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): Sixty-four-year- old retired schoolteacher Robert Davis is the man being pummeled by police officers. He says he was out buying a pack of cigarettes in the French Quarter when he stopped an officer to ask him a question.

ROBERT DAVIS, BEATING VICTIM: The basic question I asked him, I was concerned about the curfew, because I had heard several different things about the curfew. And it was one person told me 8:00, another told me 10:00, another told me 12:00. You know? That's all.

UNIDENTIFIED FEMALE: And then what happened?

DAVIS: Then when I asked -- when I walked across the street, the next thing I know is somebody slugged me.

SYLVESTER: Davis doesn't remember much else except a witness saying he didn't do anything. Today, Davis returned to the block on Bourbon Street where he was savagely beaten. But he says he's not angry with the police department as a whole.

DAVIS: It ain't about every policeman being bad. I'll say that again, and I'll say it 100 times. This guy had a vendetta. He must have woke up and took the wrong thing that morning.

SYLVESTER: The two officers who beat up Davis, and a third officer who man handled an AP television producer, have been suspended without pay and face battery charges. Their fellow officers are holding off from judging them.

LT. DAVID BENELLI, POLICE ASSOC. OF NEW ORLEANS: I do know they want to get their side of the stories out because the video paints them as some thugs. And they want to be able to explain their actions so they're not considered, you know, thug-like.

SYLVESTER: Davis has not seen the video.

DAVIS: I didn't know there was a tape.

UNIDENTIFIED FEMALE: Have you seen the tape?

DAVIS: No, I haven't. Don't want to see it at this point in time. When I see it, I want to sit down with my family. And we're going to look at it. I haven't seen anything.

SYLVESTER: But Davis' daughter has. She is deeply troubled but does not believe race played a role.

KEESHA DAVIS, BEATING VICTIM'S DAUGHTER: I just don't think it had anything to do with race, because there were other cops -- you know, there were black and white cops in the area, and no one tried to stop what was going on. No one asked any questions. And I have a problem with that.

(END VIDEOTAPE)

SYLVESTER: Of course, there are two sides to every story. Now, the three officers involved have not been talking to the media, at least not yet. But I spoke to their attorney just a short while ago, and the officers say that Robert Davis was quite intoxicated that night.

It's a charge that he denies. But the officers say, in fact, that he was so drunk that he stumbled into a police horse, and at time the officers were trying to subdue him for his own safety, and then he then put up quite a fight -- Kitty.

PILGRIM: Lisa Sylvester, in New Orleans. Thanks, Lisa.

Still ahead, the illegal alien crisis is now hitting small-town America. Towns across the country are witnessing a flood of illegal alien workers. We'll have a special report coming up.

And the latest on the mystery jet, a $7 million plane that just popped up at an airport in Georgia. We'll explain next.

(COMMERCIAL BREAK)

PILGRIM: Tonight, police in Georgia are trying to solve the mystery of the $7 million jet. Now, this plane was stolen in Florida, landed at Georgia's Gwinnett County Airport, apparently without anybody noticing. It was reported missing in St. Augustine, Florida, on Monday morning, more than a day after it disappeared.

Now, police believe the suspect is an experienced pilot. And there is no indication of any terrorist link.

The terrorist alert in New York City last week was a false alarm. Government officials now say that warning that terrorists were planning to attack the subway system was a hoax. The New York Police Department sharply increased security on the subway system last Thursday, but yesterday officials said those measures were being scaled back. It turns out an informant in Iraq gave intelligent officers false information.

In Iraq today, a deadly bomb attack in a market crowded with shoppers. The suicide attack in Tal Afar killed at least 30 people. Forty-five others were wounded.

And in Baghdad, another suicide bomber killed at least four people. The bomb exploded as an Iraqi army patrol drove by a gas station.

The attack on the Iraqi army convoy shows just how dangerous Iraq's busy highways are for drivers. Some of the most treacherous roads are in Baghdad. U.S. military convoys and civilian contractors are frequently attacked by insurgents.

Aneesh Raman reports from Baghdad.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT (voice over): It's called the world's most dangerous road. A private security company coming under insurgent gunfire earlier this year as they drove from the capital to the airport. A persistent threat on a road many fear and no one can avoid.

But for Sergeant Major Taylor, Route Irish, as it's called, is a daily destination, patrolling for potential bombs. In recent months, Taylor's soldiers significantly brought down the number of attacks, ridding the road of its infamy by befriending the community.

SGT. MAJOR ROBERT TAYLOR, U.S. ARMY: If we don't own these neighborhoods, we don't own that road out here. And we've got to own the neighborhoods.

RAMAN: But nearby, on Route Pluto, it's about showing force. This is the road, according to the U.S. military, that sees the most roadside bombs in Baghdad.

The U.N. headquarters bombed here in 2003. A car bomb killed dozens of children this summer. Humvees alone can't stop the attacks here.

(on camera): These tanks provide more than protection. They also send a very important message. The Abrams tanks are huge. They take about 500 gallons of fuel away, over 68 tons. They are a sign of force against the insurgency.

(voice over): The biggest threat, IEDs. Minutes into a patrol, heavy moments of uncertainty.

UNIDENTIFIED MALE: They just wired a tail (ph) that looks like it's going into the drain.

UNIDENTIFIED MALE: It's very hard to determine. I'm telling you. Something about this ain't right.

RAMAN: In the end, it was only a carcass. But the patrol stays vigilant. Complacency kept at bay.

SGT. FRANK MEZO, U.S. ARMY: Because the minute you let your guard down, then one day you'll go out and, you know, there's everything happening.

RAMAN: And anything can happen. The threats vary. On Route Irish, Taylor says there's now a new danger for Iraqis: private security details.

TAYLOR: They're the biggest threat on the road. If they're in a hurry, they just start firing up in the air. If there's innocent bystanders around that get hit, they're not worried about it.

RAMAN: A view shared privately by others in the U.S. military, as well as some contracting companies operating in Iraq.

Every day U.S. troops are out patrolling these roads. The threat is always real, but so is the hope that securing things here will go a long way to securing the country.

Aneesh Raman, CNN, Baghdad.

(END VIDEOTAPE)

PILGRIM: New developments tonight in the escalating U.N. scandal over Iraq's oil-for-food program. Police in France have arrested a former French U.N. ambassador, Jean-Bernard Merimee, for questioning about possible corruption. He's one of 11 prominent Frenchman, including a former interior minister, who's under investigation.

Now, France, of course, had close ties with the Saddam Hussein regime. It was also a strong opponent of the war with Iraq.

Coming up, "Broken Borders." Communities around the country are dealing with the same problem, illegal aliens. Our special report is next.

And bird flu fright. How prepared is our government for a possible outbreak of deadly bird flu? A former public health adviser to the government is our guest.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Tonight, our nation's immigration crisis has reached into communities across America. Mayors, city council officials, even school board members now find themselves dealing with the invasion of millions of illegal aliens into this country.

Christine Romans reports.

(BEGIN VIDEOTAPE)

ROMANS (voice over): Local politics used to be about potholes and 4th of July fireworks. But today, city councils, school boards and town police have a much bigger problem on their hands: an immigration crisis.

AUDREY SINGER, IMMIGRATION FELLOW, BROOKINGS INSTITUTE: It does get played out at the local level. The federal government is responsible for a lot of things, but local governments are left having to see how this plays out.

ROMANS: This is the spread of illegal immigration. In 1990, nearly 80 percent of the illegal aliens in this country were in just five states. Today, it's spread to every state in America.

STEVEN CAMAROTA, CENTER FOR IMMIGRATION STUDIES: Given widespread public dissatisfaction with illegal immigration and a desire to see the law enforced, politicians, who until now have taken a very soft line towards illegal immigration and say it's the federal government's responsibility, not ours here in this city or state, be warned.

ROMANS: In Herndon, Virginia, a public uproar over plans to use taxpayer money to build a day labor center for these men.

In New Haven, Connecticut, backlash as the mayor considers legal identification cards for illegal aliens.

On Long Island, a bitter Republican primary for town supervisor. Both contenders on anti-illegal immigration platforms.

In Dallas, a sharply divided school board vote to require some principals learn Spanish to accommodate the parents of the estimated 30 percent of Dallas students here illegally.

Hoover, Alabama, numerous complaints over day laborers openly negotiating for illegal jobs.

A complaint from Danbury, Connecticut, to Freehold, New Jersey, to Austin, Texas, and Jupiter, Florida, where politicians and police grapple with long lines of people here illegally, looking for work.

(END VIDEOTAPE)

ROMANS: Now, the day labor controversy is becoming the public face of these local battles over immigration, illegal immigration.

But schools and police departments are also under pressure for the growing demand for local services with no corresponding increase in the tax base. This is why, far away from our international borders, illegal immigration is the rising issue for voters on Main Street. There are now more illegal aliens in the suburbs than in the city centers -- Kitty.

PILGRIM: Such a tough situation. Thanks very much, Christine Romans.

Well, we'd like to know what you believe are the most critical issues facing this country. In tonight's poll, "What do you think is the most important issue for your community? Illegal immigration, the economy, energy prices or the threat of terror?" Cast your vote at LouDobbs.com. We'll bring you the results a little bit later in the broadcast.

We reported last night on the large number of Mexican workers taking jobs to rebuild the Gulf Coast. My next guest made it his mission to ensure those rebuilding jobs go to people from the Gulf Coast.

The Reverend Jesse Jackson today arrived in New Orleans delivering busloads of people who fled the city weeks ago. Now, they have returned to New Orleans in the hope of finding jobs. The caravan picked up evacuees from St. Louis, Memphis and elsewhere.

Jesse Jackson joins us now from New Orleans.

And Reverend Jackson, have you -- how have you been received by the local government in New Orleans? Also Mayor Nagin? How have they taken this?

REV. JESSE JACKSON, RAINBOW/PUSH COALITION: Well, they've been very positive. He came to the reception today.

The fact is that that was a crisis and rescue. A crisis en masse, dislocation, but no plan for the return of those displaced persons.

And so when Mr. Bush put forth a federal bailout on the state's terms and gave no bid contracts and suspended the building wages, they began to recruit workers from Central America. They didn't just like invade us, workers from Honduras, Nicaragua, Guatemala, Maquiladora. Those workers were recruited because they could make them -- let them work on the prevailing wages without health insurance.

PILGRIM: Reverend Jackson, how many people have you brought with you? Will you bring more? And have they been placed in jobs yet? JACKSON: We'll bring more, and all of them have been placed. For example, there is a crying need for jobs. Burger King is hiring workers at $6, $7 an hour as a bonus if they'll commit for a year. And Piccadillo's and McDonald's and KFC are doing similar deals.

Hotels are looking for workers. A surplus of jobs here, but there is not a connection between the jobs that exist and those in these -- in these camps around the country. There is no active recruitment to bring those back who, in fact, have been back here five and six weeks ago. And those who are in these camps have a right to return and must have the right to reconstruction and rehabilitation.

PILGRIM: What are you doing for housing, sir?

JACKSON: Well, No. 1, we have adequate housing for those who we brought with us today. But then a much greater need for the use of housing. There is unused hotel rooms that FEMA workers are staying in for example. The cruise liners that police and firemen are staying in. There are unused military basis like Algiers base, English Air Force base.

And so if they use available lands within 90 miles, you have the real recruitment of those who have been displaced. Because when people saw people dying in New Orleans, face down, and on rooftops, they gave money, the Bush/Clinton fund. The President Bush bailout plan was for people who were displaced.

The displaced people have been displaced again. They can't get no bid contracts and can't get, often, basic access to jobs.

PILGRIM: I do have to switch topics on you for just a second and ask what does the police brutality case in New Orleans suggest to you? What's your reaction to that?

JACKSON: Well, it shows a certain rotten -- it might not just be an apple. It might be an orchard. You know, in the midst of this storm, this flood and hurricane, over 20 police officers went AWOL. That seemed like it was, like, an organized move by a body of policemen.

Another case of police, 12 of them were looting people's homes. Another group of them drove Cadillacs off of a parking lot.

And so when the focus is on black youth looting here and kind of painting the city in that way, it seems a very profound and deep police problem exists here. And of course, district attorney has his hands full.

What happened last night was Rodney King-like. It was ugly. Those who have gone and beaten people that way, must face the full weight of the law. Because it's illegal, it's immoral, it's unacceptable.

PILGRIM: Reverend Jesse Jackson. Thank you very much for being with us tonight sir. Thank you.

JACKSON: Thank you.

Turning now to China, where Treasury Secretary John Snow is scheduled to arrive tomorrow. His visit comes as China, which is the world's fastest growing military and economic power, continues to finance the massive U.S. deficit.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): The U.S. deficit is financed by borrowing, from whom? Increasingly, China, now the United States' second largest lender after Japan. Is that a problem? The director of the Congressional Budget Office says no.

DOUGLAS HOLTZ-EAKIN, DIRECTOR, CONGRESSIONAL BUDGET OFFICE: Dollars all look the same. Their ultimate source doesn't matter.

SCHNEIDER: Many economists agree.

ALBERT KEIDEL, CARNEGIE ENDOWMENT: It's not a problem.

SCHNEIDER: Why not?

KEIDEL: They're becoming increasingly reasonable members of the world financial community. And they don't want to be seen as irresponsible or sort of vindictive or anything like that.

SCHNEIDER: Moreover it's not in China's economic self-interests.

DOMINIC WILSON, GOLDMAN SACHS: They have no great interest in destabilizing either the U.S. bull market or the U.S. economy. Obviously, this is a major export market for most of them. For China it's the largest export market.

SCHNEIDER: Isn't there something worrisome about communist China financing the U.S. government?

WILSON: It also is a situation which makes the U.S. more vulnerable, both to decisions of overseas governments, but also to the decisions of overseas investors, generally. That's not a situation that, over the long run, you want to be in.

SCHNEIDER: It's the Chinese government that's lending the money. If they decide to cut back their investment, it could drive U.S. interest rates up. Couldn't it?

KEIDEL: U.S. Federal Reserve has enormous resources. What the Chinese might do can't really compete with what the fed would do.

SCHNEIDER: Here's somebody who is worried.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: That means every single day of the year, our government goes into the market and borrows money from other countries to finance Iraq, Afghanistan, Katrina, and our tax cuts. We have never done this before. SCHNEIDER: Well, we have, economists say, but not on this scale.

KEIDEL: I would say the real issue is not where the money is coming from, but is this size deficit healthy for the United States?

SCHNEIDER: They say the problem is not the lender; it's the borrower.

WILSON: In terms of the dependence on foreign borrowing, the simple solution is the U.S. needs to save more.

SCHNEIDER: If Americans save more, they can borrow the money from themselves, not from the Chinese.

(END VIDEOTAPE)

SCHNEIDER: Goldman Sachs report 2040 China will be the largest economy in the world. The U.S. will be No. 2. And you know what the old Avis car rental ads used to say, when you're No. 2, you have to try harder -- Kitty.

PILGRIM: Thanks for pointing that out to us, Bill Schneider. Thanks a lot, Bill.

SCHNEIDER: Sure.

PILGRIM: Well, still ahead, one of our nation's leading authorities on avian flu joins me. How much should we worry about the deadly disease?

Also as Pakistan, India and Kashmir mourn their dead, two leading earthquake scientists discuss this nation's rising earthquake risk. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Well, the United States is giving Cambodia almost $2 million to help fight the bird flu. Health and Human Services Secretary Michael Leavitt says the money will help prevent the spread of the mysterious disease around the globe. Secretary Leavitt has been traveling around Southeast Asia. He's meeting with health officials working to contain the disease, and today he inspected biosecurity measures at a chicken farm in Thailand.

Now, the bird flu has been reported in birds in 15 countries, as far west as Romania. The disease has spread to humans in four countries including Vietnam, Cambodia, Thailand and Indonesia. In all, at least 60 people have died.

My next guest says a deadly bird flu pandemic could spread around the world like a slow-moving tsunami. Michael Osterholm has advised the government on its bird flu response plan. He's the director of the Center For Infectious Disease Research and Policy. He joins us from Minneapolis. Now, do you believe that the government is ready for an outbreak of bird flu in this country, sir? MICHAEL OSTERHOLM, CTR. FOR INFECTIOUS DISEASE RESEARCH: Well, first of all, nobody is ready, not our government, not any government, not in the private sector area -- no one is ready.

PILGRIM: You know, you have said -- I've read a lot of your research. You said every CEO in this country should make it a top priority. You're talking to the private sector. What can they do?

OSTERHOLM: Well, first of all, most of the private sector has never thought through the kind of emergency plans that would need to go into place if a pandemic of influenza were to hit. Unlike the kind of disruption that we think of with a single earthquake or hurricane or a tsunami or even a blizzard, what would happen here is, is that we would shut down the global economy for 12 to 18 months.

As you heard already, trade and travel would be restricted between countries. And people, often, have no idea of the supply chains that are critical to their products of to their services, where they come from, how long they are, where they go, and they need to understand because it's very possible that overnight they could be without a product or without a service to offer.

PILGRIM: You know, reading your research, you say every continent is going to be an island, basically. It sounds like the plot for a horrific movie, and yet, you have Health and Human Services Secretary Michael Leavitt doing a trip through Southeast Asia hoping for coordination. You almost paint a picture that that might be futile.

OSTERHOLM: Well, I wouldn't say it's futile. First of all, I can't begin to compliment sufficiently the efforts that Secretary Leavitt has put forward over recent months to, first of all, alert the world to our lack of preparedness, and second of all to try to spearhead a need to be prepared if it should happen tonight or next week, next month, next year, next decade.

Pandemics are going to continue to occur. There have been 10 of them in the last 300 years. Just like tsunamis and earthquakes and hurricanes, they will continue to occur. But I think the point is that once a pandemic of influenza begins, once have you human to human transmission, the animals almost become inconsequential. They will not be the source of that virus in any measurable way to humans. We'll take it ourselves around the world.

And then that comment about every continent being, in a sense, on its own, every town, every hamlet, every county, every state, every country will be on their own because no one else will be there to bail each of us out because we'll all be dealing with it at the same time. That's what we have to start planning for today and that's what we have to understand is going to be the inevitable outcome.

PILGRIM: If you're watching this broadcast as a viewer, and you hear this, what can you possibly do?

OSTERHOLM: First of all, that's another problem from the standpoint of who you are as the viewer. If you're an individual citizen, there isn't a lot you can do. There's still a debate about will Tamiflu, the drug work. If it does, how does it work? Can you stockpile it? Of course not, There's never going to be enough drug. That might be one thing.

But what we have to do, is We have to say to our communities, OK, if we can't provide health care in the hospitals, as we won't be able to do -- they'll be flooded quickly -- how are we going to plan in our community to handle the number of people who are ill? How are we going to handle the dead? How are we going to make sure there is food to our citizens every day.

Remember that even under the worst scenario we're still talking about 98 or more out of 100 people surviving, getting through it. But for that year or 18 months that they're actually affected by a pandemic, we have to make certain that we can provide the basic support services that you, as all of the rest of the media so well documented, didn't happen in the immediate days after the Hurricane Katrina. This has all the hallmarks of doing many of those same things.

PILGRIM: Thank you very much, Michael Osterholm. Thanks for being with us this evening.

OSTERHOLM: Thank you very much.

PILGRIM: Well, as our nation prepares for the possibility of a bird flu pandemic, there are new concerns tonight about getting regular flu vaccinations to Americans this year. A new survey says local health departments in many parts of the country are still waiting for the vaccine shipments.

Some health departments say they may have to cancel vaccination clinics and some fear they'll not get enough vaccine until late next month. That's when interest in getting a flu shot drops off. Well, this survey was conducted by the National Association of County and City Health Officials.

Here's a reminder now to vote in tonight's poll. What do you think is the most important issue for your community? Illegal immigration, the economy, energy prices, or threat of terror. Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.

Coming up, devastation in south Asia. Experts say it's only a matter of time before another deadly earthquake hits this country. Two leading earthquake authorities join me next.

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PILGRIM: Earthquake experts around the world are assessing risk factors for their countries after the disaster in south Asia. Now, the existence of several fault lines has worried experts about what could happen here has happened in Pakistan.

(BEGIN VIDEOTAPE) PILGRIM: The massive earthquake in Pakistan, more than a seven. In March, northern Sumatra, 8.7. A thousand people were killed. Honshu, Japan, a 7.2 earthquake in August. It may seem as if seismic activity is increasing, but since the earthquake that triggered the tsunami last December, earthquake activity has been normal.

The world has had ten major earthquakes and the annual average is between five and 15 earthquakes of 7.5 or higher. For the United States, California is the most worrisome.

PROF. THOMAS JORDAN, S. CA. EARTHQUAKE CTR., USC: We can definitely have an earthquake of this magnitude in the United States. In fact, I live in Los Angeles, and right beneath my feet, here on the campus of the University of Southern California, is a very large fault capable of producing an earthquake of up to magnitude 7.5 of the same type that just damaged Pakistan.

PILGRIM: This simulation shows what would happen if a major earthquake were to take place just outside of Los Angeles along the fault line. Such an event could destroy the Port of Los Angeles, large portions of the city, and cause up to $250 billion in damage. Anywhere from 3,000 to 18,000 people could be killed.

Throughout the country, 26 cities are at risk. There are fault lines in southern Alaska. The New Madrid fault in southeastern Missouri, which could affect the city of St. Louis.

Seismologists and engineers worry that cities like New York and Boston are at risk.

ANDRE FILIATRAULT, CENTER FOR EARTHQUAKE RESEARCH: The problem we're facing is existing construction, existing buildings, which have been built, designed, way before the knowledge that is needed to properly design structure to resist such an earthquake has been implemented.

Joining me with insight into the earthquake risk, both to the United States and the rest of the world are two leading earthquake authorities. Professor William Menke and William Leith and both join me this evening. Dr. Leith, 26 U.S. cities, how much should we worry?

WILLIAM LEITH, U.S. GEOLOGICAL SURVEY: Well, earthquakes, Kitty, occur every day, little ones, I get about half a dozen per day, I get text messages on my phone.

And yet the risk to people across the country is real in 39 different states. The USGS estimates that we have moderate to high earthquake hazard in 39 different states, and those 26 cities are the cities that are most at risk for damage.

PILGRIM: Are we doing enough?

PROF. WILLIAM MENKE, COLUMBIA UNIVERSITY: No, we're not.

Education, particularly of building practices is important. Going out and look at things and retrofitting buildings that were built 50 or 100 years ago and are at serious risk for earthquakes is very important, too.

PILGRIM: Professor, we were looking at the subject today. We were looking at many cities, and New York and Boston, many old historical buildings. It is worrisome that they're not going to be able to withstand anything.

MENKE: And there will another New York earthquake. It will not be as big as the earthquake we saw in Pakistan, probably. Probably only a magnitude five, but it will be a shock to New York and a shock we had better prepare for.

PILGRIM: Dr. Leith, what can be done now in your view? Now that we have all this advanced warning and we also have the luxury of being able to observe earthquakes all over the world via media and satellites, what are we learning and what can we apply to this?

LEITH: I think the take home message from the Sumatra disaster, from Hurricane Katrina, is a dollar that's spent in prevention, I dollar that's spent for mitigating the hazard, for preparing plans for earthquake response, for education as Bill Menke said, that the dollars pay off in the long run. They pay off maybe 10 to a hundred times the investment.

We just commissioned a study of the National Research Council to look into that question, and they concluded that in fact, the benefits from improving our seismic monitoring hazard assessment and preparedness outweigh those costs by about a factor of ten.

PILGRIM: You know, in also looking through the data, I guess we get about five to 15 major earthquakes every year, around the world. We've had about 10. Does this mean that we're due for one? I mean, when you look at numbers like this, it comes up in your mind that perhaps we're due?

MENKE: Well, there's always the next earthquake. What we don't know is where, and we don't know when. But we know it's coming. The best we can do is to be prepared for it.

It's entirely outrageous when I see pictures of buildings that have crumbled down into heaps of concrete almost like pancakes stacked up at a diner. It's outrageous that these things happen, because they could be prevented by, you know, applying skills that we've known ion construction for 30 years.

PILGRIM: Should there be pressure put on world governments to better prepare, do you think, Dr. Leith?

LEITH: Oh, I think it's absolutely essential that -- that governments, you know, from the local level to the state level to national governments, do what they can in advance to prepare.

The disaster scenarios for earthquakes that are quite possible in the U.S. are really horrific. And a recent earthquake scenario built for Los Angeles indicates that perhaps as many as 18,000 people would lose their lives, and that damage, direct losses might be in the area of a quarter of a trillion dollars. And both -- and outside the U.S. there are cities across the globe that are very highly vulnerable to large earthquakes. Particularly those, for example, in India through the Middle East, and for example, Tehran, and these are cities that have populations in excess of 10 million and still have a very high earthquake risk.

PILGRIM: You know, the level of frustration of both of you gentlemen must be very high when you see pictures that like -- that have been coming out of Pakistan.

It strikes me that, as a broadcast journalist, we're seeing these pictures. During the tsunami, we saw the pictures of the tsunami efforts, and there was considerable progress made to predicting tsunamis. Can we make a similar stride ahead now?

Dr. Leith, I'll turn to you.

LEITH: What we can do well is we can say where the earthquakes will be. We can indicate what earthquake probabilities are. But that Holy Grail goal of prediction is a way off. It's not even clear what earthquakes are in the short-term.

But much can be done by recognizing the hazard and preparing for it. Doing what can be done to improve building practices, upgrade building codes in earthquake-vulnerable areas, and as Bill Menke said, educate people.

PILGRIM: Professor Menke and Doctor Leith, thank you very much for being with us this evening to discuss this.

LEITH: My pleasure.

PILGRIM: And we wish you every success in your efforts.

Still ahead, the results of our poll question tonight, and a preview of tomorrow. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Here are the results of tonight's poll. Fifty-one percent of you said illegal immigration is the most important issue for your community. Twenty-six percent of you said the economy. Twenty-three percent said energy prices. One percent said the threat of terror.

Well, thanks for being with us tonight. Please join us tomorrow. Our guests will include Lawrence O'Donnell, who's the executive producer and writer of "West Wing." Plus New Jersey homeowners fight a city government that wants to seize their property for development. It's an important eminent domain case. So please join us.

For all of us here, good night from New York, and "ANDERSON COOPER 360" starts right now -- Anderson.

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