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American Morning

Sources: Craig Resignation Could Come Today; Princess Diana Memorial; Newspaper Reports on Senator Craig

Aired August 31, 2007 - 07:59   ET

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

JOHN ROBERTS, CNN ANCHOR: And good morning to you. Welcome back. Thanks for joining us.
It's Friday, the 31st of August.

I'm John Roberts.

KIRAN CHETRY, CNN ANCHOR: And I'm Kiran Chetry.

Glad you're with us.

We begin with growing pressure on Senator Larry Craig within his own party to step down for his actions in a Minneapolis airport bathroom. Republican sources are now telling CNN they believe that Craig is preparing to resign soon, maybe as soon as today.

And then there is the tape that's been made public now, a nine- minute-long interrogation between Senator Craig and the arresting officer. And at times, it gets testy.

(BEGIN AUDIO CLIP)

SGT. DAVE KARSNIA, ARRESTING OFFICER: I just, I just, I guess, I guess I'm going to say I'm just disappointed in you sir. I'm just really am. I expect this from the guy that we get out of the hood. I mean, people vote for you.

SEN. LARRY CRAIG (R), IDAHO: Yes, they do. (INAUDIBLE)

KARSNIA: Unbelievable. Unbelievable.

CRAIG: I'm a respectable person and I don't do these kinds of...

KARSNIA: Where's your respect right now though?

(END AUDIO CLIP)

CHETRY: Dana Bash is live in Boise, Idaho, with more today on the reaction.

And, you know, I mean, there are some who say maybe the release of this tape could help Larry Craig in terms of trying to fight -- he wants to try to fight those -- the guilty plea and say that, you know, he wants to retract it. But others are saying that it just keeps -- every day it just keeps getting worse for the senator. DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right. And it looks more and more like the political writing is on the wall for the senator.

In fact, we have a fresh indication -- just a few minutes ago we got it -- that the senator is likely to step down. CNN is told that the Republican National Committee, Kiran, was poised to take the extraordinary step of calling on Senator Craig to step down. But we are told party leaders decided to hold off because they got indications that the senator himself is going to announce that he is going to resign. And we're told there were high-level meetings on this that took place here in Idaho yesterday.

Now, as you can imagine, these are highly-sensitive discussions and, for that reason, our sources are reluctant to give us very many details of these conversations. But we are told by well-placed sources here in Idaho and back in Washington that that is likely what we are going to see, Senator Craig resigning, perhaps, perhaps, as early as today.

Now, I caught up with somebody, one of the few people we have actually found to speak with Senator Craig about his crisis. That is the governor of Idaho, Butch Otter. And when I spoke to him, he was very careful with his words. But the message was pretty clear.

(BEGIN VIDEO CLIP)

GOV. BUTCH OTTER (R), IDAHO: Nobody likes these kinds of problems, because these kinds of problems you just can't get rid of. And you can't get rid of with simple explanations, and it takes a long time, and then you never really unring the bell. And the bell has been rung.

And so, as we go forward, I suspect there's going to have to be additional consideration by Larry and his family on where exactly they're going.

(END VIDEO CLIP)

BASH: Now, if Senator Craig does, in fact, take that step and decides to resign, it would, of course, be the governor who would have to replace Senator Craig in the U.S. Senate. I asked him if he was quietly trying to figure out who would -- he would choose for that position, and he said, "I don't have to think about it." He said, "I'm already getting their phone calls" -- Kiran.

CHETRY: Wow. That's interesting. As you said at the begin of your report, the writing may be on the wall politically speaking for Senator Craig.

Dana Bash, thank you.

(NEWSBREAK)

(WEATHER REPORT) CHETRY: Actually, we're talking a little bit more about another story. A memorial service is just wrapping up today in London to honor Princess Diana. She died 10 years ago today. Very moving words from both of her sons, Prince William and Prince Harry. You can see them gathered outside.

Monita Rajpal is outside of Buckingham Palace, and she has more about some of the more touching moments of that ceremony today.

Hi, Monita.

MONITA RAJPAL, CNN CORRESPONDENT: Hi there, Kiran.

Yes, the princes William and harry standing outside the guard's chapel thanking and greeting their guests to attending the service they organized for the life of their mother. It was to be celebration and upbeat service to remember the mother they loved so dearly. The guests were treated to Diana's favorite hymns and prayers and the music she so dearly loved. In addressing the congregation, the bishop of London had said still 10 years after her tragic death there are regular reports (INAUDIBLE) of that incident and the princess memory of used to scoring points and let the service be to let we let her rest in piece. William and Harry only 15 and 12 when she died. She paid tribute to their mother with the memories that they remember of her from when they were little. But perhaps the most poignant moment was when prince harry said she was just the best mother.

(BEGIN VIDEO CLIP)

PRINCE HARRY: When she was alive, we completely took for granted her unrivaled love of life -- laughter, fun and folly. She was our guardian, friend and protector. She never once allowed her unfaltering love for us to go unspoken or undemonstrated.

She will always be remembered for her amazing public work. But behind the media glare, to us, just two loving children, she was quite simply the best mother in the world.

(END VIDEO CLIP)

RAJPAL: Heartfelt and loving words from her youngest son, Prince Harry, there. Just after, also, speaking was Prince William. He spoke just before Prince Harry. Again, relaying memories of the mother that they so loved dearly.

There were some 500 guests who were invited to attend this celebration, this thanksgiving service. They were invited by Prince William and Prince Harry. Among them were celebrities like Sir Elton John, as well as the famed photographer Mario Testino, as well as members of the charities that Princess Diana supported.

And just moments ago, we did see here the queen and her entourage just leave Buckingham Palace -- leave the chapel and then Buckingham Palace -- Kiran.

CHETRY: Wow. But those words by Prince Harry really touching, actually. It brought tears to my eyes to hear him talk about his mom like that.

Monita Rajpal, thank you -- John.

ROBERTS: Ten minutes after the hour.

After before the bathroom incident in Idaho, a newspaper was investigating Senator Larry Craig. We'll talk to that newspaper's editor about what they dug up on Craig ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

(NEWSBREAK)

ROBERTS: Idaho Senator Larry Craig may be forced to resign over his actions in an airport bathroom in Minneapolis. When the story first broke, Craig lashed out to "The Idaho Statesman" newspaper, accusing them of engaging in a witch hunt against him.

Joining us now from Boise is The Statesman's editor, Kevin Richert.

Kevin, I'll get to that idea of a witch hunt in just a couple of seconds. But first of all, yesterday in an editorial, the newspaper called for Senator Craig to resign. On Tuesday, the newspaper had said, don't rush to judgment.

Why the change of opinion?

KEVIN RICHERT, EDITOR, "THE IDAHO STATESMAN": Well, that's a good question. Basically, it came down to two things.

It's come down to the level of defection within Senator Craig's own party, prominent Republicans who are criticizing him, who are calling on him to resign or calling on him not to run again. There has just been this ground swell within his own party and we just don't think he can effectively serve Idaho or Idaho's interest on Capitol Hill.

But there is also -- excuse me?

ROBERTS: Go ahead.

RICHERT: And there's also -- he really has not answered many questions about -- about the incident in Minnesota. We did call for him to do a full public accounting and he's just fallen far short of that to this point.

ROBERTS: We should point out, too, that the decision by the editorial board was not unanimous. But this interrogation tape that came out yesterday, did it affect your opinion at all, either firm it up or maybe cast some doubt?

RICHERT: You know, listening to it -- and I've listened to it a couple of times -- it reconfirms some of the questions that we've had all week. You have to wonder, why did he plead guilty if he is so insistent that he did nothing wrong? And he sounds pretty insistent on the tape. You really have to wonder why he didn't lawyer up.

I mean, he is in this fairly contentious interview with the officer and didn't ask for an attorney.

ROBERTS: Let me come back to the statement that Senator Craig made at his press conference on Tuesday in which he singled out your newspaper for criticism, saying that it had been dogging him for months, if not years.

Let's take a quick listen to what he said and I'll ask you about it.

(BEGIN VIDEO CLIP)

CRAIG: The Statesmen has engaged in this witch hunt. In pleading guilty, I overreacted in Minneapolis because of the stress "The Idaho Statesmen" investigation and the rumors it has fueled all around Idaho.

(END VIDEO CLIP)

ROBERTS: So, his claim is that The Statesmen was engaged in a witch hunt to out him. Is there anything to that? Why were you investigating his sexual orientation?

RICHERT: We were investigating it because rumors about his sexual orientation have followed Senator Craig throughout almost his entire career in Congress. But as a newspaper, we wanted to make sure that we have the best information we could get.

If you remember last fall, there was a blogger who wrote and suggested that, you know, he had some information on Senator Craig. We didn't run with that story. Some papers in Idaho did. We did not.

We put a very experienced and very seasoned reporter on this for several months. He talked to 300 people. We wanted to make sure we had the best information we could.

ROBERTS: This whole idea about him resigning, is this about criminal behavior or is it about homosexuality? And I ask this question because he didn't plead guilty to a lewd act. He pled guilty to disorderly conduct, and certainly there are other members in the history of Congress who have pled guilty to at least that, if not greater crimes.

RICHERT: You know, I can just speak for us as an editorial board. It is not about homosexuality.

It is about pleading guilty. It is about not disclosing the arrest and the guilty plea until the story came out 11 weeks later. It's about, in his own words, trying to make the whole issue go away.

It's also about credibility. We just don't think he can conserve effectively in the Senate when he has got people in his own party saying he ought to go.

ROBERTS: All right.

Well, Kevin Richert, on the editorial board of "The Idaho Statesmen".

Kevin, thanks very much for being with us this morning. I know it's early. We appreciate you getting up and joining us.

RICHERT: Thank you.

ROBERTS: Kiran.

(NEWSBREAK)

(COMMERCIAL BREAK)

CHETRY: Well, both Fed chairmen Ben Bernanke and President Bush speaking out today. The president is getting ready to take on the mortgage crisis.

Gerri Willis is here now with more about what exactly the president will be saying in his plan and how it will help.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, this is the suggestion today, what the president will say. Two ideas.

First of all, the Federal Housing Administration, which is sort of an obscure agency that insures low and middle income loans, that it will start to ensure more expensive loans. And that means people could get loans for less money, lower rates. It could be a real help to a lot of people out there. And I've got to tell you, a lot of people support this. A lot of people are also suggesting that.

Also, the president is expected to suggest temporarily suspending a rule that penalizes people in foreclosure and those who want to refinance for less than the house is worth.

ROBERTS: So what about Bernanke's upcoming speech? Why are people so anxious about this?

WILLIS: Well, as you know, because I know Ali's reported this a lot on the show, people on Wall Street want Bernanke to cut rates. And they're looking for any sign, any signal at all that he might do that.

So, today, every word is going to be scrutinized. And I have to say, people are seeing this as a very big test of Bernanke. Will he be able to step up and reassure the markets and tell people that he's got this credit crisis in hand?

Lots of questions. We're going to follow this today to make sure there are answers.

CHETRY: And there are lots of analysts who say the rates should have been cut and are clinging to the Fed's reaction...

(CROSSTALK) WILLIS: Wall street traders, Wall Street investors, mutual funds.

CHETRY: So what's going on?

WILLIS: Well, Bernanke doesn't want to be shoved around. You know, there is always a tension, a fight between the Federal Reserve and the administrative branch and Congress, because Congress can't tell Bernanke what to do. His solution is something different than what Wall Street wants.

ROBERTS: Sorry.

He also doesn't want to be seen as manipulating the markets either. I mean, his view of the Fed is, take care of inflation.

WILLIS: Fair enough.

ROBERTS: I was surprised that they cut the discount rate a few weeks ago.

WILLIS: Well, I think, you know, that was his big step in this whole crisis to try to solve it, is to give an outlet for banks that are really having problems. It doesn't do much for homeowners out there. And I guess the big question, too, is, would a rate cut really do all that much for homeowners who are way in over their heads?

CHETRY: All right.

Well, Gerri, you've been following this, I know, on your show on the weekends as well.

Gerri does "OPEN HOUSE". It's this weekend. She's going to have more on the mortgage meltdown. She's also going to have some mortgage solutions for your problems. And a crash course, by the way, in finances for your college kids.

Saturday, 9:30 Eastern, right here on CNN.

We will be watching. Thanks, Gerri.

WILLIS: Join us then.

ROBERTS: Thanks, Gerri.

"ANDERSON COOPER 360" airs weeknights at 10:00 Eastern.

Soledad O'Brien here now with a look at what's on tap tonight.

Hi, Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: John, tonight on our program, inside the toughest battle of the war in Iraq. Street by street, house by house, up against several thousand insurgent fighters. How a company of Marines survived and how some never made it home, and how each was changed forever by their time in what's become known as the Anvil of God.

That's on "360" tonight at 10:00 p.m. Eastern -- John.

ROBERTS: Soledad, thanks. We'll see you then.

CHETRY: All right.

Well, here's a look at a story coming up that you can't miss. Well, there's many stories we have making it official.

This is our ballot jackpot, by the way.

We have the Craig crisis, fund-raising flap, hating Hillary, Iowa boost. A lot of questions that we'll be possibly picking out of our ballot box to ask our pundits.

ROBERTS: You know, I'm impressed. I go away on vacation and you get a new ballot box.

CHETRY: You know how long it took me to fashion this thing up?

ROBERTS: This is not a cheesy thing with the wrapping paper that was falling off of it when I went away. This is great.

CHETRY: No, this one's real. This one...

ROBERTS: This is actually solid.

CHETRY: This could withstand I think a Category 2 hurricane. That's about it.

ROBERTS: Fantastic.

We're going to have all of that coming up ahead on AMERICAN MORNING.

Stay with us.

(COMMERCIAL BREAK)

CHETRY: Wow. It looks pretty hazy out there, doesn't it?

There's a shot of New York City this morning -- 71 degrees right new. And it is shaping up to be 85 degrees.

Boy, that's down right chilly compared to what Phoenix is going through. Today is shaping up to be day 31 of triple-digit heat for Phoenix.

ROBERTS: Amazing.

CHETRY: And welcome once again. It's Friday. It's the last day of August, August 31st.

Glad you're with us.

I'm Kiran Chetry.

ROBERTS: Good morning to you.

I'm John Roberts.

Republican sources in both Washington and the state of Idaho are now telling CNN they expect Senator Larry Craig to resign soon. Perhaps as early as today.

Dana Bash told us just a few minutes ago that the Republican National Committee is holding off on calling for Craig to step down because he may be ready to make the decision himself. Calls for his resignation grew louder and stronger after Minneapolis airport police released the audiotape of Craig's interview with the arresting officer.

Here is a quick exchange from that tape.

(BEGIN AUDIO CLIP)

KARSNIA: I don't care about sexual preference.

CRAIG: I know you don't. You're out to enforce the law.

KARSNIA: Right.

CRAIG: But you shouldn't be out to entrap people either.

KARSNIA: This isn't entrapment. All right?

(END AUDIO CLIP)

ROBERTS: Craig pleaded guilty to disorderly conduct after that interview on the 8th of this month.

And Dina McGreevey, the estranged wife of former New Jersey Governor Jim McGreevey offered some advice to Craig's wife last night on "Larry King Live." Take a listen.

(BEGIN VIDEO CLIP)

DINA MCGREEVY, WIFE OF GOV. JIM MCGREEVEY: What I would say to his wife is, first of all, to, you know, be true to herself and do what's right for her, and for her family, not what is politically expedient, or what, you know, she thinks her husband wants her to do.

(END VIDEO CLIP)

ROBERTS: The McGreevey's separated three years ago when he admitted to an extramarital affair with a male aide.

CHETRY: Well, it's taken years to build a 26,000 member Iraqi police force. Now "The New York Times" is reporting that a commission set up by Congress will recommend the military start all over again. Barbara Starr is watching this from her post at the Pentagon.

What is the reaction and what have you been able to find out, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Kiran, the Pentagon, so far, is not disputing the reports in both "The New York Times" and "L.A. Times", that say this independent commission's report has come to the finding that there needs to be a major overhaul of the 26,000- man national Iraqi police organization.

The Pentagon says they're pretty well aware that that is what the report does say. What they say is they've already been working on the problems for some time with that national police force. That there is a broad recognition, the national police still are wracked by sectarianism, corruption and other problems and it has been a public statement for some months now about all of that. It's acknowledged they have taken units off the line, they have replaced commanders.

The Pentagon official that we spoke to that is familiar with the panel's report says it wouldn't do any good to start all over. They want to keep working away at overhauling what they have in place -- Kiran.

CHETRY: It seems either way they decide to go with that, where do they find people that can end up being trustworthy to do the job?

STARR: Well, that's the big problem in Iraq and that is fundamentally what I suppose really overhangs the whole situation with Iraqi security forces. The continuing sectarianism, the influence of Shia militias in the police, in the army. The influence of the Sunnis in the areas where they're operating.

That's why the U.S. is so adamant that there needs to be political reconciliation in Iraq, on a national level, by the government there, that that perhaps is the most fundamental step, Kiran.

CHETRY: Also today, President Bush is going to be meeting with Joint Chiefs at the Pentagon to discuss the state of the war. What do we expect to hear from that?

STARR: What the chiefs are going to talk to the president about, we are told, is the state of the military. More or less how are the troops doing? How are they doing with that 15-month tour of duty? How are the families doing? What is the morale of the force? Are they getting the training and equipment they need?

The chiefs are going to tell the president, by all accounts, that everything is going well, that morale is high, but they are cautious. The chiefs well know that the troops are very concerned about that 15- month tour of duty. They don't want it to go on forever. They want to come home to their families, Kiran.

CHETRY: Understandably for sure. Barbara Starr at the Pentagon for us, thank you.

ROBERTS: Well, the stalling is over. Fred Thompson, apparently, is ready to run. Thompson says he is going to officially launch his candidacy on September the 6th but, he is already scheduling an appearance on "The Tonight Show with Jay Leno". This ends a long, long, long, long, long, long flirtation with the idea of seeking the Republican nomination.

The Democratic front-runner, Senator Hillary Clinton read "The Top Ten" list on "The David Letterman Show" last night. Here are some of the top campaign promises that she made.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: No. 10! Bring stability and long-term security to "The View".

DAVID LETTERMAN, HOST, "THE DAVID LETTERMAN SHOW": Yeah.

CLINTON: No. 9! Each year on my birthday, every American gets a cupcake.

LETTERMAN: Whoa! Look out!

CLINTON: No. 8! You'll have the option of rolling dice against the IRS for double or nothing on your taxes.

(APPLAUSE)

(END VIDEO CLIP)

ROBERTS: No. 8, that's my favorite.

CHETRY: How about that?

ROBERTS: Never been a gambling man, though, so I might lose. She also joked that her husband Bill Clinton can't be her vice president but she said, believe me, he looked into it.

CHETRY: Got to be fine print around here.

ROBERTS: Constitutional amendment coming up.

ROBERTS: Same sex marriage now legal in one of Iowa's 99 counties. A judge in Polk County, which includes part of the capital city of Des Moines, just struck down the state's same-sex marriage ban. The ruling allows gay couples to apply for a marriage license but maybe not for long, because an appeal is pending.

Sounds like something out of a sci-fi movie. California state senate has passed a bill barring employers from forcing workers to get I.D. implants. The devices are being marketed now by several companies. Smaller than a grain of rice, can be read by a scanner. They're implanted in pets all the time. State legislators were worried about an invasion of privacy when employers started asking about that.

And quick draw politics CNN style, a bunch of hot political topics inside our Ballot Box from the Senator Craig scandal to Fred Thompson's big announcement. We'll pick out a few of them and have our analysts go at it, next on AMERICAN MORNING.

(COMMERCIAL BREAK)

CHETRY: From the finish line to the emergency room, your "Quick Hits" now. Skip Storch, he was the one who was trying to break a record swimming around Manhattan. Well, he did it. He swam successfully around Manhattan three times. It took him 32 hours and 52 minutes and 30 seconds. He beat the previous record by 37 minutes and 30 seconds.

He was supposed to come on the show, actually, today to tell us about it, but he was admitted to the hospital last night. We did talk to him, though. Our producer spoke to him. He says that he is being treated for hypothermia. His muscles were used to the point of exhaustion, he is in a lot of pain. But he is doing OK, and he wants to thank everybody for their support. So maybe if he's feeling better, he'll talk to us next week.

Quite a feat, by the way, swimming all the way around Manhattan, three times.

The odds against this are 64 million to one, but it happened for one couple in Cincinnati, Ohio. This week they welcomed their second set of triplets, all natural, no fertility drugs. Victoria and Tim Lasita said that they wanted to have one more. She says, "I guess should have been more specific and I meant one more child, and not one more set of triplets. Casey, Caden, and Carson, join their siblings Jessica, Jillian, and Brian; they, by the way, turn four in December.

God bless them. They like change 300 diapers. I can't imagine, a month.

ROBERTS: They need to buy a lottery ticket.

CHETRY: Yeah. Also, how about this one for another amazing birth story? A baby boy was born on a shrimp boat in the Gulf of Mexico 30 miles from shore. His mom is the boat's cook and her captain sprang into action when she unexpectedly went into labor.

Ed Kiesel, he grabbed a roll of paper towels, he grabbed a first aid book, and he actually did a quick read and then delivered the baby. It was not an easy birth. The baby was feet first, and he still managed to figure out what to do. Ended up administering CPR. The baby wasn't breathing for 20, 25 minutes. Got him breathing, again, on his own and then was able to used a sterilized wire to cut the umbilical cord. The little guy has been named Brian Edward, after his father, Brian, and the captain, Ed. And the baby is in the hospital today, but expected to do all right.

Congratulations. What a way to come into the world!

ROBERTS: Quick thinking on the part of the captain.

CHETRY: Yeah, sure was.

ROBERTS: It's 40 minutes after the hour. Rob Marciano, checking into the extreme weather today.

(WEATHER REPORT)

CHETRY: It's not tonight's $330 Mega Millions drawing but it's the next best thing. OK, maybe it's not even that, but we're doing it anyway!

ROBERTS: Sell it, sell it!

CHETRY: It's our AMERICAN MORNING "Ballot Jackpot".

ROBERTS: We put one hot political topic on each ballot stuffed into the box. We're going to draw one card at a time and have our guests weigh in on that.

And joining us now ...

CHETRY: Yeah, GOP strategist Jim McLaughlin, and on the other side of aisle, Jenny Backus, in Washington.

Thanks to both of you for being with us today.

ROBERTS: All set for the drawing?

JENNY BACKUS, DEMOCRATIC STRATEGIST: Oh, yeah.

ROBERTS: Here we go.

CHETRY: I'm not looking. Hating Hillary. Let's talk about this one. There has been a lot of talk that Hillary, if she gets the nomination, will end up energizing the GOP base. Jim, in fact, Elizabeth Edwards eluded to that recently this week. What do you think, Jim? True or not?

JIM MCLAUGHLIN, REPUBLICAN STRATEGIST: I don't think it's about hatred towards Hillary Clinton. I think it's most Americans just think she is wrong on the issues. She tried to give us socialized medicine, they raised taxes time and time again. And not to mention all the corruption and scandal problems. It's not they dislike her as a person, it's really they disagree with her on the issues, and that's why her negatives are so high.

ROBERTS: Jenny what do you make of the idea that Elizabeth Edwards seemed to really have a bone to pick with Hillary Clinton over a number of different issues. It is almost like there's two women running for president.

BACKUS: I think there's a lot of competition happening on the Democratic side but I think, actually, Hillary Clinton is helped by this. Sort of like how George Bush, people had low expectations for him. A lot of people think they know Hillary Clinton but when they meet her, they are going to be really pleasantly surprised. She is very smart. She's funny. She's personable.

Every time the Republicans try to demonize her I think it helps her, and in one way it helps her it makes her look tough. And I think looking tough as a woman candidate is really important in a post-9/11 world. ROBERTS: She was very comfortable in "The Letterman Show" last night. Really playing along. She has done that before, too, when it comes to that Top Ten List.

Topic number two, Craig Crisis, it is what we've been talking about all week. Let's go to Jim, first of all, is it over for Larry Craig?

MCLAUGHLIN: I'd much rather talk about Hillary Clinton.

(LAUGHTER)

CHETRY: It's the luck of the draw, Jim.

ROBERTS: That's why we call it a lottery, Jim. You get some good ones and you get some bad ones.

MCLAUGHLIN: But to be perfectly honest, look how the Republicans have reacted to this. I think it's one of those things where you have Republicans and they are saying, it's most Republicans that are saying he's the one that should get out on this.

It's interesting, by the way, how silent Democrats have been on this. Again, this goes back to Hillary Clinton because you have their leading nominee who is running for the democratic nomination, who has had their own problems with sex scandals in her family --

BACKUS: Oh, come on!

MCLAUGHLIN: That's why the Democrats don't want to talk about it.

BACKUS: That is ridiculous. Look, the big problem with the Larry Craig situation is hypocrisy. And it is a big problem for the Republicans because every time Republicans praise their rapid response in dealing with the Craig situation the name David Vitter comes up. They are not being consistent in their outrage, and I think that looks political. And I think voters are going to reject that.

CHETRY: But, Jenny, I mean, just to be fair, there have been other situations, not necessarily senators, but let's say congressman in Patrick Kennedy charged with a crime after that incident crashing his car into the capital police. We didn't hear a big call.

BACKUS: Patrick Kennedy stood up and took responsibility, and checked himself in ...

CHETRY: But he plead to a crime ...

ROBERTS: To a crime ...

CHETRY: And that's why people are saying is why Larry Craig should step down.

BACKUS: It's not the same as Larry Craig. Larry Craig has denied the basis of what that crime was. Larry Craig's stories are not consistent. The problem is consistency and hypocrisy.

MCLAUGHLIN: It's a problem for Larry Craig, it's not a problem for the Republican Party, because Idaho is still a conservative state, a lot of Republicans there. You'll still have a conservative there.

BACKUS: Exactly. And you're making my point. The Republicans are not outraged by David Vitter who hired a prostitute and potentially used taxpayer resources to do it, and he's a senator in a state with a Democratic governor. It's not consistent outrage.

MCLAUGHLIN: Jenny, the Democrats are not talking -- William Jefferson to resign, they found $90,000 in a refrigerator.

BACKUS: The Democrats are following through on the ethics procedure.

MCLAUGHLIN: Com one.

BACKUS: There's no comparison, you guys.

MCLAUGHLIN: The Democrats don't want to talk about hypocrisy when it comes to the issues when it comes to the issue of corruption.

BACKUS: The Democrats aren't being hypocritical, the Republicans are.

CHETRY: All right, let's grab one more. Real quick. Making it official. And this, of course, is of Fred Thompson finally, finally, Fred Thompson is going to become an official candidate next week. Quickly, both of you weigh in on how you think his chances are. What kind of candidate do you think he is going to be.

Jenny, go ahead.

BACKUS: I think Fred Thompson is kind of like the guy in high school that you were waiting to ask you to the prom, and you waited, and you waited, and you waited, and by the time he finally asked you, you didn't want to go with him anymore.

(LAUGHTER)

BACKUS: I think that's Fred Thompson. He's a textbook case of a guy how not to run for president. I think he's waited too late with the way the primary calendar is going. He may be announcing for president in 2012, because he may wait so long that the calendar will go right by him.

ROBERTS: Jim, isn't it true, though, with him waiting this long that reporting rules mean he doesn't need to report any campaign cash actually until the end of the year in.

BACKUS: January.

ROBERTS: Which would then put him in a place where he doesn't have those head-to-head comparisons with how much money Mitt Romney, Rudy Giuliani and others have gotten. MCLAUGHLIN: You know what? Republicans and independents, and even some Democrats, across the country are saying right now, Hurray! Because Fred Thompson is the one they wanted to get into this race in a lot of ways.

And I'll tell you, he's the Democrats worst nightmare. That's why the Democratic National Committee, before he has even announced as a candidate, they're attacking him. Because he's the one guy that can unite the Republican base, and he's also his history as a Tennessee senator, has the ability to not just coalesce and get Republicans and conservatives to rally around him, but get a lot of independents, a lot of Democrats to vote for him.

CHETRY: So, Jim, he's your guy, right? You're working on his campaign?

MCLAUGHLIN: That's correct. I was approached by several of the other Republican campaigns, but he's the guy, he's inspired me just like he has inspired a lot of other Republicans. Like I said, I think he's the Democrat's worst nightmare and it's going to be a lot of up.

BACKUS: Jim, I'm glad you still have your job because he seems to be firing a lot of his staff. So congratulations.

(LAUGHTER)

MCLAUGHLIN: You know what? It's funny. A lot of the Washington insiders, all they care about is process. But you know what matters? Especially to Republican primary voters, issues. Candidates still matter.

CHETRY: I think that was a subtle hint by our video department that we're out of time. But you guys were both great. Thanks for playing our "Ballot Jackpot".

Jim McLaughlin and Jenny Backus, thanks.

MCLAUGHLIN: Thank you.

ROBERTS: It will be interesting to see how Fred does after he announces.

MCLAUGHLIN: It's going to be great.

ROBERTS: Yeah.

CHETRY: All right well, CNN "Newsroom" is just minutes away now. Tony Harris is at the CNN Center with a look what is ahead.

Good morning, Tony.

TONY HARRIS, CNN ANHOR: Hey, Kiran.

That was loud! I'm sorry. Hey, Kiran, good morning to you!

Help for homeowners on the "Newsroom" rundown for you this morning. President Bush's plan for people with risky mortgages. The announcement live in the "Newsroom" this morning.

Sources telling CNN Senator Larry Craig is likely to throw in the towel. A resignation prompted by his bathroom bust could come today.

British royals, minus Camilla, honoring Princess Diana. She died 10 years ago today in a Paris car crash.

Breaking news when it happens. You're in the "NEWSROOM" just minutes away at the top of the hour, on CNN.

Kiran, my apologies.

CHETRY: No, it's all right. I love your energy. Gets me revved up for the 9:00 a.m. show. Tony, thanks.

HARRIS: OK.

CHETRY: Still ahead, an all hands fight against obesity. We will be heading up to Massachusetts to show you how an entire city is pulling together to help kids slim down. That's next on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Nine minutes before the top of the hour. New numbers just in, a jump in consumer spending. The big question now, how long will it last?

ALI VELSHI, CNN FINANCIAL CORRESPONDENT: Stop that!

ROBERTS: Ali Velshi here "Minding Your Business".

VELSHI: That is not the -- the big question is, look, we got good news for once! Kill joy?

Consumer spending for July and consumer incomes are both up. Now, the spending number is right where analysts expected it to be. Not a big surprise but spending is really important because two-thirds of this economy is driven by people spending. This is the spending-est economy in the entire world. Americans spend money even when things are tough.

So, in July they knew things were tough, those markets were rickety. And they still spent money.

The interesting thing is incomes are up. Some of this is because we saw those wage increases, minimum wage increases, they kicked up in July. But there are wage increases, that is helping people feel better about their financial situation. It's helping them spend a little bit more money and they are keeping money in this economy.

So, despite what John tells you -- I came here especially for you. I don't normally show up in this hour. It is because this is good news. You keep saying how I'm a bearer of bad news!

CHETRY: Right, we saw it and we wanted to bring a bright spot. VELSHI: I'm not saying this is the be all, end all, but it's a little piece of good news. We are going to hear from President Bush. We are going to hear from Ben Bernanke later today. Futures are up strongly right now.

CHETRY: I have a premonition, tomorrow, John wins the $330 million mega jackpot. And he goes -- I go, John, you won the lottery!? He says, Yeah, look at all of the taxes I have to pay now, millions.

VELSHI: Exactly, exactly.

ROBERTS: Ali, thank you.

VELSHI: All right.

CHETRY: Well, meantime there is all hands effort to fight back against obesity. In this case both the young and the old are getting on board, and they're seeing results. Dr. Sanjay Gupta has this "Fit Nation" report from just outside of Boston.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Somerville, Massachusetts. Population, 77,000. It's a modern-day town with modern day problems, including surging rates of obesity.

MAYOR JOE CURTATONE, SOMERVILLE, MASS.: A third of our population is foreign born so we have our challenge. Somerville is a very dynamic city and we don't have a lot of land area, so we have to be very strategic in how we encourage active living.

GUPTA: Four years ago, Tufts University nutritionists, along with city officials put the community on a diet, to help its citizens, especially children, keep their weight down. Restaurants offered healthier foods and smaller portions. Bike paths upgraded. And school menus added more fruits and vegetables. And people encouraged to walk or bike to work. Kids, like Jonathan Lentini were told to get out and play, and watch what they ate.

JONATHAN LENTINI, SOMERVILLE STUDENT: Like what do I think is really good? And if it's healthy or not.

GUPTA: And -- it worked. After studying almost 1700 Somerville elementary school kids over a year, researchers discovered children in this Boston burb gained weight at a healthy rate, while youngsters their age in two nearby towns gained more.

CHRISTINA ECONOMOS, PROF. OF NUTRITION, TUFTS UNIV.: All children are gaining weight as they grow. What we want to do to prevent childhood obesity is prevent excess weight gain.

GUPTA: Since the study ended the city has kept up it's healthy attitude. Researchers feel if other communities follow the same steps as Somerville they, too, could help their future generations avoid the obesity epidemic. Dr. Sanjay Gupta, CNN, reporting.

(END VIDEOTAPE)

CHETRY: You can join Sanjay on his show, "House Call". He explores whether your vote could determine the future of cancer research. "House Call", 8:30 a.m. Eastern, Saturday and Sunday mornings right here on CNN.

ROBERTS: Here's a quick look now on what CNN "Newsroom" is working on for the top of the hour.

(BEGIN VIDEO CLIP)

HARRIS: See these stories in the CNN "Newsroom". President Bush announcing a plan to help homeowners with risky mortgages.

Sources telling CNN sex sting Senator Larry Craig is likely to resign. That could happen today.

The royals honoring Princess Diana 10 years after her death in a Paris car crash.

And the five-year-old who drove his mom's car, police say, at mom's request. "Newsroom" just minutes away at the top of the hour on CNN.

(COMMERCIAL BREAK)

ROBERTS: An update now on something we told you about a little while ago on AMERICAN MORNING. Check this out. It's the creation of British artist Damien Hurst, a diamond encrusted, real human skull. It was on the auction block. It sold yesterday. Guess how much? $100 million; 8,061 diamonds here, topped off by a 52-caret pink diamond at its center. Critics said it was flamboyant in showing.

Duh!

CHETRY: Not to mention creepy. I wonder who bought it? $100 million, you got that much money to throw around, and that is your taste? Interesting.

How about this? Finally, this morning, a dream come true for a high school senior, pulling off the classic prank on a rival high school. And of course, the results were posted on YouTube. Take a look.

A kid in Ohio trick students and parents at a football game into holding up individual signs. All right, see what they spelled out.

ROBERTS: We suck.

(LAUGHTER)

CHETRY: He says it took him over 20 hours, over three days, to map it out and to prepare the signs. Then he simply handed out cards to the crowd and told them it would spell, "Go Darby", the name of their school. Turns out it was not actually his idea. The first time this was done, back in 2004. Of course, Yale students thought of it. They wanted to pull a prank on Harvard fans.

The kid was suspended for three days, by the way, and banned from extra-curricular activities. But I'm sure he'll certainly get over that.

ROBERTS: Ah, but Darby had the last word, though, because they beat that high school. You know? You tell them they suck, they are going to show you --

CHETRY: He still got to pull off the prank of all pranks, though.

ROBERTS: It was pretty good.

CHETRY: No bad. Well, thanks so much for joining us. I hope you have a wonderful weekend and we'll see you back here on Monday.

ROBERTS: All right. Labor Day Monday.

CNN NEWSROOM with Tony Harris and Heidi Collins begins right now.

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