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AMERICAN MORNING

Momentum Swing: Big Gains For McCain and Obama; Race About Race: Clinton/Obama Battle Escalates; Sinking Ship: Cargo Vessel Going Down in English Channel; Fight for Michigan: Huckabee's Economic Plan; Extreme Flextime: Workplace Revolution

Aired January 14, 2008 - 07:00   ET

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


KIRAN CHETRY, CNN ANCHOR: This person still remains at large. A little bit later, we're going to be speaking with the local sheriffs who are handling this case now. Thanks a lot.
SUNNY HOSTIN, LEGAL CONTRIBUTOR: They seem to be handling it pretty well.

CHETRY: Thanks, Sunny.

HOSTIN: Thank you.

JOHN ROBERTS, CNN ANCHOR: Next hour of AMERICAN MORNING starts right now."

Rush-hour snowstorm. A fast-moving nor'easter, up to a foot of snow in spots. We're tracking the extreme weather.

Where the housing crisis hits home, Michigan's primary battle. How to fix the one-state recession. Mike Huckabee joins us with his plan.

Plus, baby pictures -- a father's mission to capture the candidates cradling his kid. What it reveals about their campaign on this AMERICAN MORNING.

Babies are everywhere in politics. Good morning. Welcome back. Thanks for joining us on this Monday, the 14th of January. I'm John Roberts.

CHETRY: And I'm Kiran Chetry. That baby, in particular, is going to have a scrapbook and all scrapbooks to show her friends when she gets old. She met almost every major candidate.

ROBERTS: Incredible stuff.

CHETRY: We're going to talk to her parents coming up in a little while. But meanwhile, we start off with the news of two stunning shifts in two new presidential polls out this morning that show it is a wide-open race on both sides on a national level after Iowa and New Hampshire busted it wide open.

A new ABC/"Washington Post" survey has Senator Hillary Clinton still on top, but her dominance has disappeared. She lost 11 points since December's survey. Senator Barack Obama picked up 14 points, and that's total of a 25-foot sway in the polls on the Republican side. I mean, that says GOP, it should say Democratic side, since December.

Now, on the Republican side, all doubt is gone that Senator John McCain is for real and that his campaign is taking off. He's winning in New Hampshire, of course, and that helped him become the national frontrunner by eight point, and that's a big shift from what we saw back in December. He's followed then by Mike Huckabee and Mitt Romney, and Rudy Giuliani who was once the frontrunner in the national polls is now in fourth place. His decision to concentrate on Super Tuesday may have cost him 10 points in the polls.

There's also a "New York Times"-CBS poll shows a staggering shift in momentum in favor of McCain and Obama. On the Republican side, more than half of the voters have a favorable opinion of McCain. That went up 20 points since December. And for the Democrats, Barack Obama gaining fast. Thirty-five percent of voters now say he has the best chance of winning compared to just 14 percent last month. Senator Clinton lost 16 points from a whopping 63 percent to 47 percent right now.

ROBERTS: Well, the politics of race is dominating the Democratic campaign today. Attacks between the Clinton and Obama camps escalated all weekend. It began with Clinton's remark that Dr. Martin Luther King's dream wasn't realized until President Lyndon Johnson signed the Civil Rights Act. Critics say the comment diminishes the importance of Dr. King. Clinton charges that the criticism is coming from the Barack Obama campaign. He says that's just not true.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I am baffled by that statement, by the senator. And she made an ill-advised statement about Dr. King suggesting that Lyndon Johnson had more to do with the Civil Rights Act.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I was responding to a speech that Senator Obama gave in New Hampshire where he did compare himself to President Kennedy and to Dr. King.

(END VIDEO CLIP)

ROBERTS: And it got even hotter when Robert Johnson, he's the founder of Black Entertainment Television jumped to Clinton's defense.

(BEGIN VIDEO CLIP)

ROBERT JOHNSON, FOUNDER, BLACK ENTERTAINMENT TV: Hillary and Bill Clinton, who have been deeply and emotionally involved in black issues, when Barack Obama was doing something in the neighborhood that I won't say what he was doing, but he said it in his book --

(END VIDEO CLIP)

ROBERTS: A lot of people thought that Johnson was referring to Barack Obama's admitted past drug use. Johnson denies that he was referring to it, but the Obama campaign isn't buying that.

CHETRY: Well, the Republican candidates making a final push in Michigan on this last day before the Michigan primary. Mitt Romney campaigning in his native state and now running neck-and-neck with John McCain who won the Michigan primary back in 2000. The economy taking center stage with Michigan feeling the pain of lost jobs and lost homes in the foreclosure crisis.

CNN's Mary Snow is live in Southfield, Michigan. The candidates are clearly shaping their messages around the economy. What are some of the top specific issues that some of those voters in Michigan hope to hear about today?

MARY SNOW, CNN CORRESPONDENT: Well, Kiran, you know, the candidates really have been sparring over how best to restore these jobs that have been lost, and the massive job cuts have really forced the economy into the forefront. Senator John McCain says some of these old jobs are gone forever. The answer lies in new technology and new jobs. Mitt Romney is saying McCain is too pessimistic. He says he will continue to fight for the auto industry.

(BEGIN VIDEOTAPE)

SNOW (voice-over): He tells his Michigan roots and his father's popularity as governor here in the 1960s. Republican presidential hopeful Mitt Romney is hoping it will give him an edge in the state's Republican primary.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: This is a place where memories are very, very deep. And where, if you will, I recognize that Michigan is personal. When I grew up, Michigan was the pride of the nation, the envy of the world. We have to be that again.

SNOW: That was then, this is now. Detroit's automakers are suffering. Unemployment here is higher than the rest of the country. Republican Senator John McCain is hoping a different memory will boost his chances here.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We're back, and I'm happy to be here.

SNOW: McCain won the state's Republican primary here in 2000.

MCCAIN: I do know that we've been through very tough times. But I believe that Michigan can lead this nation in this new green technology economy.

SNOW: Mike Huckabee is hoping his newcomer status to Michigan will work to his benefit.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: A reporter asked me the other day -- just how do you expect to possibly win the election? You don't have the kind of resources. Well, I said, you know, I guess if I had all the polls and consultants and focus groups and all the television ads and the headquarters and everything that some of these other guys had, I might be as far behind as some of them are. (END VIDEOTAPE)

SNOW: And Mike Huckabee is also been courting the evangelical voters here, hoping that they will give him an edge. But clearly, the economy is the number one issue here and the auto industry and we have to underscore that point. All three of the presidential candidates are expected to stop by the Detroit Auto Show today -- Kiran.

CHETRY: Mary Snow in Southfield, Michigan, for us this morning. Thanks.

ROBERTS: So what is Mike Huckabee's plan to bring Michigan's economy back. And with America, according to many people about to tip in to recession, does he have any kind of an economic stimulus package that he's thinking about? We're going to ask him about all of that. Governor Huckabee joins us live in just a few minutes time here on AMERICAN MORNING.

AMERICAN MORNING is your home for politics in the morning. And tomorrow, we are hitting the road all the way through Super Tuesday beginning with the Michigan primary. We'll look at the issues driving votes there and across the country, especially the economy. Mitt Romney calls Michigan a, "one-state recession."

We'll be talking about what's important to your job, your health, your home, your vote. We have the team to help you decide as well. Dr. Sanjay Gupta, Gerri Willis, Ali Velshi and Chris Lawrence all out on the road.

So join me for. First stop, Michigan, for the most politics in the morning. From Michigan, AM is going on the road to all of the battleground states -- Nevada to South Carolina to Florida and then on to California for Super Tuesday. And join me tonight in primetime, by the way, live from Michigan along with Anderson Cooper here at CNN Election headquarters in New York, 8:00 Eastern, right here on CNN -- Kiran.

CHETRY: Well, from Philadelphia to New England, a nor'easter revving up right now. More than a foot of snow could fall before it's all over. That's a shot from Bedford Hills. They're getting a little bit of snow and rain mix in there in New York. Not the case though a little bit further north where snow is already falling in Providence, Rhode Island. Good news for the school kids in Providence. Many of the classes are canceled today.

And in Boston, snow and rain causing a lot of flight cancellations at Logan Airport. Our Rob Marciano is out in the snow for us today. He's tracking the storm from Hartford, Connecticut. I see it piling up on the fence a little bit behind you. You guys are getting some good dusting up there.

ROB MARCIANO, METEOROLOGIST: Yes, we are. It's been snowing rather heavily now for a good couple of hours. We got into town around 11:00 last night. That's when the snow slowly began to fall. Flights are canceled not only in Boston but in New York. Ahead of this storm, not a whole lot of snow in New York, but certainly enough snow to get the plows out and the bobcats out here in Hartford, Connecticut.

Heavy snow warning in effect until 1:00. All of the radar is showing in the back edge of the moisture is probably just an hour or two away before we start to see this thing head out to sea. It is winding up. It is getting stronger as these storms typically do this time of year. Nor'easter full on for the Boston area. They could see several inches of snow before this is done, and wind advisories in effect for parts of the cape.

You could see wind gust there over 50 miles an hour. Connecticut Light and Power reports some spotty outages, some hundreds as they say of some power outages. Some schools are closed as well. But here in New England, Kiran, folks still feeling good no matter how much snow falls over the Patriots win. And in New York and Jersey, you should feel good about the Giants win. They're heading to Green Bay where it could be near zero degrees over the weekend across the tundra of Green Bay. I don't know why I threw a little sports in there, but it's snowing out here in Hartford. Back over to you.

CHETRY: Well, no, I was going to ask you, were you watching that game? They literally had to shovel practically between every break in the action because so much snow is falling.

MARCIANO: Yes, that was fun to watch. You know, it'll be a different story come this weekend. More just bitterly, bitterly cold with wind chills below zero. It will be an interesting game to watch. No doubt about it -- Kiran.

CHETRY: All right. Rob, thanks.

I know they're tough guys, but I can't believe some of them just go short sleeves.

ROBERTS: You had to know that when the snow started falling like it did, the Green Bay was going to dominate.

CHETRY: There you have it. It's an omen.

ROBERTS: President Bush is aboard Air Force One right now on his way to Saudi Arabia. He plans to push the Saudis to play a greater role in standing up to Iran. President Bush is also urging all Middle East allies to respect human rights and to support Israeli-Palestinian peace. But in a speech in the United Arab Emirates on Sunday, he took aim directly at Iran, calling it the world's leading state sponsor of terrorism.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iran's actions threatened the security of nations everywhere. So the United States is strengthening our long-standing security commitments with our friends in the Gulf and rallying friends around the world to confront this danger before it is too late.

(END VIDEO CLIP)

ROBERTS: Iran said the president is trying to spread "Iranophobia."

CHETRY: Well, our Alina Cho is here with some other stories new this morning including some news just in right now about a ship --

ALINA CHO, CNN CORRESPONDENT: Yes, we're watching a developing story. John, Kiran, good morning. Good morning, everybody. We have this just in to CNN.

A cargo ship taking on water in the English Channel this morning. It happened in stormy weather and heavy seas. We have some new pictures. Hopefully we can get to them. All 20 crew members have been rescued from the Greek registered cargo ship. Weather in the area remains bad with 16-foot swells and gusty winds. We're still waiting for the pictures. We hope to get those in the next hour.

Princess Diana's former butler is due to testify today at the formal inquest to her death. Paul Burrell could give critical information about the final months of her life. He's expected to talk about a letter Diana sent to him in which he said, "my husband is planning an accident in my car." Burrell worked for Diana for more than 10 years and during that time, the two became close friends. The Princess of Wales was killed in a Paris car crash in 1997.

Some are calling it her most significant hearing to date. But there's no telling whether Britney Spears will actually appear in court. She is due to appear today in her child custody battle. She had some problems appearing in previous attempts to court appearances. A judge took away her visitation rights after a standoff a couple of weeks ago when she refused to return the boys to her ex-husband, Kevin Federline. Federline is expected to testify today about that incident that landed Spears in a mental hospital.

Meantime, TMZ.com is among those reporting that Spears was seen partying over the weekend with her new British photographer boyfriend, in the same white lace wedding dress she wore when she married Federline. British newspapers also reporting that Spears is considering marrying him to help her win back her children. Oh, what would we do without the ongoing saga of Britney Spears?

CHETRY: Just when you think it gets strange, it gets even stranger.

CHO: Exactly. You're absolutely Right.

CHETRY: Thanks, Alina.

CHO: You bet.

ROBERTS: Alina, thanks.

Sure you're getting ready for work now, but how would you like to go back to sleep and roll into work around, say noon? One company is letting its executives do exactly that. We kick off a look at workplace revolutions coming up this morning.

And what's Mike Huckabee's plan to bring Michigan back from the financial brink? He joins us live coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Fifteen minutes now after the hour. He is running third behind John McCain and Mitt Romney in Michigan, but Mike Huckabee still hopes for a strong showing in the Michigan primary tomorrow. Like his Republican rivals, Huckabee is addressing economic concerns while in Michigan. Governor Huckabee joins us now from Kalamazoo. Governor, good to see you again. Thanks for being on the show this morning.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Well, thank you very much, John. Great to be back.

ROBERTS: Governor, in terms of the overall economy, not just there in Michigan, a lot of people believe that we're either tipping toward a recession, or according to some people, we begin to enter a recession back there in December. Hillary Clinton and Barack Obama have both come out with what they would do in terms of economic stimulus packages. Rudy Giuliani said that he would rely on his pro growth policies to grow the economy.

If you were president right now, what would you do in terms of preventing the United States from tipping into a recession or at least softening the blow?

HUCKABEE: Well, several things we need to do, one of which is to make sure we don't raise taxes and if possible, cut the marginal tax rates so that people have a reason not only to invest but to have more of their money. We need to be looking at the long term solution, which is to get rid of the income tax and all of the taxes on productivity and go to a consumption tax, but short term. We also need to be looking at our oil reserves to try to do everything we can do to hold the price of fuel down. That's part of what's driving the recession.

A lot of times people forget that if your gasoline costs goes up, it's not just getting to and from work that cost more, everything you reach for on the shelf at the grocery store costs more because it costs more money to transport it to the marketplace.

ROBERTS: So what could you to do bring gas prices down?

HUCKABEE: Well, if you possibly look into using some of the oil reserves just as a temporary. But the main thing we got to do is accelerate our energy independence. We have literally fooled around for 35 years in this country talking about energy independence. We've not done it. And it's high time, and that's why I say as president, within 10 years we'll make this country energy independent with domestically produced energy sources that provide us the capacity to be free.

ROBERTS: Right.

HUCKABEE: We've got to restart manufacturing in this country, enforce both sides of our trade agreement. The reason Michigan is hurtling so badly is because they're trying to compete against countries that don't necessarily play by the rules.

ROBERTS: Governor, with the exception of releasing oil from the strategic petroleum reserve, all of those other ideas, valid as they may be, take time. Is there anything else you could do besides releasing oil from this crow (ph) to try to prevent the United States from dipping into a recession or at least softening the blow?

HUCKABEE: Well, I think what the president did regarding subprime mortgages, asking the players to sit down and try to referee this out and keep homes from going to foreclosure, that was a good step for the president. He didn't use taxpayer money to bail people out. That would have been a big mistake. But it was the right thing to do to try to extend the terms and get the resets going on those mortgages.

ROBERTS: Yes.

HUCKABEE: We can't afford not just the financial consequences but the emotional consequences of 2 million people going into foreclosure. There are other ways in which, maybe some even short term rebates. We need to look at any number of ways. But the main thing is to try to ensure to the American people that the government is going to start working for them, rather than against them. And I think the biggest concern, a lot of our policies, John, they work against the very working people that policies of our government ought to be working far, and the people hurting the most are small business owners.

ROBERTS: Let me zero in on Michigan, if I could. The 7.4 percent unemployment rate there. Full point above any other state, 50 percent above the national average. 72,000 jobs lost there. Mitt Romney believes he can bring those jobs back. John McCain says he doesn't think that's possible. He'd like to retrain for new jobs. Where do you come down?

HUCKABEE: Well, I think we can bring a lot of these jobs back. But part of it starts that our free trade agreements have to be fair trade agreements. They're not. The Chinese dump products on us that have lead in them. Some of the products they have aren't safe. We aren't enforcing our trade agreements in the matter in which we should. So there's an unfair competition. Add to that, the tax burden, the regulatory burden, the litigation burden that on American business. It's a miracle we're keeping as many jobs. The reason we are is the productivity of the American worker.

ROBERTS: Yes.

HUCKABEE: But the reason it's so critical to be able to manufacture is not just an economic issue, it's national security. If we can't produce our own armor and if we can't produce our own tanks and airplanes, then we really have outsourced not just our jobs. John, we've outsourced our freedom. There was a time when this country -- Franklin Roosevelt called it the arsenal of democracy. Well, the heartland of that arsenal is Michigan.

Michigan once saved the United States by being able to manufacture in a hurry our capacity to build up our army and win World War II. We owe Michigan something. They once saved us, and now it's time for us to look at trying to save them.

ROBERTS: How are you looking at doing tomorrow in the primary?

HUCKABEE: Hard to say. Polls are all over the place. You know, a lot of people didn't think we would even be within striking distance of being in play here. And clearly, we are. And it's been done largely just grassroots. There are a lot of people...

ROBERTS: Yes.

HUCKABEE: ... who kind of get maybe looked over in the political process. But these are working people who understand the struggle.

ROBERTS: Yes.

HUCKABEE: And frankly, I think they think I'm the only candidate who gets it when it comes to understanding the real economic issues that we do face in this country.

ROBERTS: You're running third. Would you be happy with a third place finish?

HUCKABEE: All the third place finish shows that we're, you know, we're very much contending in this race, but we'd like to do even better than that. I recognize John McCain won eight years ago. Mitt Romney is from here. If people vote for me, they're doing it because they're truly committed to the message that we really need to reset the Republican party.

We've lost our soul. It's time that we regain it, remind ourselves what made us a strong party, strong national defense, conservative fiscal policies, but is also a commitment to those issues of the family and the working class people of this country who are the bread and butter every day of this nation's economy.

ROBERTS: Governor Huckabee, it's always good to see you. Thanks for being on this morning. Good luck tomorrow, and hopefully we'll be able to catch up with you when we're actually in Michigan there tomorrow. Good to see you.

HUCKABEE: All right. Thanks a lot, John.

ROBERTS: Thanks -- Kiran.

CHETRY: Well, how about this one? Does this sound too good to be true? You make up your own hours. You show up at work when you feel like it. You could work at home, let's say. You don't really have to go to meetings or rack up face time.

Well, up next, we're going to take a look at a workplace revolution that could be the wave of the future. It's flextime, but to the extreme.

Also, Barack Obama and Hillary Clinton in their sharpest exchanges yet over race and their records. We're going to hear what Bill Clinton was planning ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Well, you're probably getting up for work right now or many of you might already be at work. But imagine this. Sleeping in, rolling into the office around noon and then clocking out at 3:00 to go be with your kids at home.

CHETRY: Well, this is what the executive track looks like at Best Buy. Polly Labarre is here to talk more about extreme flextime. It's the first of her series on reports about workplace revolution. Good to see you, Polly.

POLLY LABARRE, CNN CORRESPONDENT: Great to see you.

CHETRY: This sounds too good to be true. How is this new Rowe program working at Best Buy?

LABARRE: It could be mixed. There aren't many with flextime forever. It's probably the first thing you read in any recruitment brochure. Rowe takes it much further. Flextime does not go far enough. And the basic premise is you can work however you want, whenever you want, wherever you want, as long as the work gets done, period. There are no other rules. No other schedules.

Actually, let's look at some of the commandments behind the Rowe program. The 13 commandments. The first is that work isn't the place you go, it's something you do. And this is trying to smash that old idea that physical presence actually equals productivity. And in the second idea is that employees have the freedom to work any way they want to work. Again, it means you can show up at 2:00 p.m. on Wednesday. You can sneak out at 10:00 a.m. on Thursday to do your grocery shopping. You can leave at 3:00 to pick up your kid on Friday or do most or go on a fishing boat. Now, that doesn't apply to you guys, but in general.

ROBERTS: Yes. We're out of this program.

LABARRE: That's the idea there. So it's extreme freedom.

ROBERTS: So, until recently, this was a very traditional Fortune 100 company. People ate lunch at their desks. They had lots of meetings. What prompted the change, and how much resistance was there to that change?

LABARRE: Sue. You know, micromanaging face time kind of a culture where the last person to turn out the lights when --

ROBERTS: Yes.

LABARRE: As we all know that kind of work culture. You know, Best Buy is a company that has as much competition and need for growth and need for great employees as any other big company, and this was an answer to that. How do we change the way that work works to make it more pleasant and livable for everyone? Now, huge resistance to it. Managers thought they were going to lose control. Meetings are now optional. So imagine. You can't force anyone to come to a meeting. Co-workers couldn't stop themselves from judging each other around -- oh, came in at 11:00 today, I guess it's great to be you.

CHETRY: Right.

LABARRE: Taking another vacation. So there was a lot of resistance. They've rolled this out over four years. They didn't even tell the CEO about it until two years in because it was such a radical change.

CHETRY: Wow.

Bottom line, how has it affected productivity? Does it work?

LABARRE: Sure. It's been absolutely transformative in terms of the culture. Productivity has been up at an average of 35 percent where it's been implemented. And even more important, voluntary turnover has decrease dramatically from 52 percent to 90 percent. And what is this saying essentially is, if you want to win, you should find ways to unleash people rather than to control them.

ROBERTS: But the sales people still have to show up, right?

LABARRE: Everybody, you know, has a different job. So some people have to show up more often. But they're actually going so radical, the end of this -- the retailers -- the retail sales people will be experimenting with this this year.

ROBERTS: That's all very intriguing. Polly, thanks.

LABARRE: Thanks you. How soon do you want to try that?

CHETRY: All we need is a camera.

ROBERTS: There you go.

CHETRY: Maybe it's from our house.

ROBERTS: Researchers experimenting on rats have grown a beating heart in a laboratory. Can the same be done for humans? We'll tell you about that.

And can a big bank buyout homeowners hurting from a mortgage crisis. Ahead, Personal finance editor Gerri Willis is live in one of the hardest-hit areas by the meltdown. Is there some hope on the horizon? That's story and today's headlines when AMERICAN MORNING comes right back.

(COMMERCIAL BREAK)

KIRAN CHETRY, CNN, ANCHOR: Wow, a live shot this morning from Boston, Massachusetts. They're certainly getting the brunt of the nor'easter. This is coming to us from WCBB. 34 degrees, snowing, feels like 24 this morning in Boston.

JOHN ROBERTS, CNN, ANCHOR: It's coming down there. And what about here in New York?

CHETRY: Well, we were hoping that we would get some of the white stuff but there you see that's a shot of the Time-Warner Center. We're waving to you. You can't see us. You can't see us? Oh, we're gone now. That's Columbus Circle right there. 35 degrees right now. Cloudy, feels like 27. A high of 37 degrees and alas, I don't think we're going to get much snow on the ground. A little bit of snow and rain mixed today.

ROBERTS: A lot of those thousands of people traveling to and from New York, they'll be thankful for that.

CHETRY: Yes, a lot of flights canceled yesterday. Rob said, even though we didn't have a drop yet.

ROBERTS: Just in case.

CHETRY: Just in case, I guess. Well, welcome. It's Monday. Thanks for being with us. It's January 14th. I'm Kiran Chetry.

ROBERTS: Good morning to you. I'm John Roberts. New this morning. Police say they are closing in on a marine accused of murdering a pregnant colleague. Witnesses say they spotted Marine Corporal Cesar Laurean at a Louisiana bus station on Saturday night. Investigators are still working to confirm that. Laurean has been charged with first degree murder in the death of Lance Corporal Maria Lauterbach. Cops in North Carolina say they found a crime scene soaked in blood and the burned remains of a victim and her unborn child in a shallow grave in his backyard.

New this morning. Chances are you're paying more for gasoline at the pump this morning. Gas prices jumping nearly ten cents in the last three weeks, going back over the $3 mark. According to fuelgaugereport.com, the current national average is $3.07 a gallon. Hawaii has the highest average at $3.48. Missouri, the lowest, $2.88.

CHETRY: Well, it may sound like something from Dr. Frankenstein's laboratory. But it could actually be a significant medical breakthrough. Scientists are exploring new treatments for heart disease. And they've grown a rat heart in a jar and it started beating. The University of Minnesota researchers took the rat's dead heart. They stripped away all of its cells, then injected heart cells from newborn rats and within a week, the heart was beating and pumping again.

(BEGIN VIDEO CLIP)

DORIS TAYLOR, UNIV. OF MINN. RESEARCHER: What we've done is hopefully open a door to the idea that we can actually begin to build not just pieces of tissue and organs, but build organs. It's really been science fiction in the past and we'd like to think that we've helped make it science.

(END VIDEO CLIP)

CHETRY: The next step would be repeating that process but with a pig heart which researchers say looks and acts like a human heart. They also hope to one day create new organs that could save millions of lives.

Celebrities linked to steroid shipments. The "Albany New York Times Union" reports that rappers 50 Cent, Timbaland, Wyclef Jean as well as Mary J. Blige, all received steroids or human growth hormones. And none of the celebrities are accused of breaking any laws. The investigation is going after the anti-aging clinics and pharmacies that prescribe these drugs. The investigation has already exposed several major league baseball players as having received steroids or human growth hormones.

A senior advisor to Hillary Clinton facing drunk driving charges in New Hampshire. Police pulled over 59-year-old Sidney Blumenthal for speeding last Monday, the day before the New Hampshire primary. They arrested him when he failed sobriety test. He was also an aide to former President Bill Clinton.

ROBERTS: 34 minutes after the hour now. National polls out today have Barack Obama gaining on Hillary Clinton. And as the race tightens up, the political attacks are heating up. Now, each camp is accusing the other of crossing the line.

(BEGIN VIDEOTAPE)

ROBERTS (voice-over): Is it a question of race or of context? The war of words began a week ago in New Hampshire when former President Bill Clinton took on Barack Obama the day before the New Hampshire primary, invoking the term, fairy tale.

BILL CLINTON, FORMER PRESIDENT, UNITED STATES: You said in 2004, there was no difference between you and George Bush on the war and you took that speech you're now running on off of your website in 2004 and there is no difference in your voting record and Hillary's every since. Give me a break. This whole thing is the biggest fairy tale I've ever seen.

ROBERTS: But it was comments made last Monday by Hillary Clinton that really got the Obama camp riled up. Critics say she suggested President Lyndon Johnson had more to do with civil rights laws than Martin Luther King.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Dr. Martin Luther King, Jr. led a movement, he was gassed, he was beaten, and he then worked with President Johnson to get the civil rights laws passed. Because the dream couldn't be realized until finally it was legally permissible.

ROBERTS: It wasn't until the weekend that Barack Obama spoke out.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Yes. I am baffled by that statement by the senator. She made an ill-advised statement about Dr. King and suggested that Lyndon Johnson had more to do with the Civil Rights Act. For them, somehow, to suggest that we're interjecting race as a consequence of a statement she made that we haven't commented on is pretty hard to figure out.

ROBERTS: Whatever the merits of the criticisms, by Friday, the Clintons were in full damage-control mode. First, the former president did a radio interview with the Reverend Al Sharpton.

BILL CLINTON (audiotape): I stand by what I said, but the reports that I claimed his campaign that he personally or in any way was disrespectful and said they were a fairy tale, that's just not true.

Hillary Clinton defended herself on yesterday's "Meet the Press".

(BEGIN VIDEOCLIP)

SEN. HILLARY CLINTON: I was responding to a speech that Senator Obama gave in New Hampshire where he did compare himself to President Kennedy and to Dr. King. Dr. King had been on the front lines. He had been leading a movement.

(END VIDEO CLIP)

ROBERTS: The issues may be one of context. One context is undeniable - the all-important South Carolina primary on January 26 when half of the voters will be African-Americans.

(END VIDEOTAPE)

ROBERTS: And when you expect to hear the latest reaction of this flareup in the next hour of AMERICAN MORNING. CNN contributor Roland Martin is talking exclusively to former President Bill Clinton right now. And we'll find out what he has to say coming up in the next hour of AMERICAN MORNING.

And we have been asking what you think about all of this. Our quick vote question asks - did you find the Clinton's comments offensive to either Obama or Martin Luther King? Right now, 45 percent of you say yes. 55 percent of you say no. Cast your vote at cnn.com/am. We'll tally your votes throughout the morning. Kiran.

CHETRY: Well, the republicans are focusing their race for the presidency on the Michigan primary which is tomorrow. And Michigan as we've been talking about this morning has the highest unemployment rate in the nation, an extraordinarily high number of foreclosures as well. Many are now hoping for a turnaround with news that Bank of America is buying Countrywide. It's the nation's largest mortgage lender. And we sent CNN's personal finance editor Gerri Willis out to Michigan to check it out. She joins us in Shelby town, just north of Detroit.

Hi, Gerri. What are you hearing from homeowners out there this morning?

GERRI WILLIS, CNN, PERSONAL FINANCE EDITOR: Hey, good morning, Kiran. You know, you said we're in Shelby Township here. This is very upscale neighborhood as you can see, but there are eight foreclosures on this street alone. Check out the house over my shoulder here. Now, the owners paid $650,000 for that house. It's now on the market for sale for $420,000, a 30 percent hair cut. You can imagine the fear and the anxiety that people have here because their homes are losing so much value. I spoke to a corporate relocation agent yesterday who said she was having a heck of a time getting people out of their mortgages, people who wanted to move for better jobs elsewhere. Kiran.

CHETRY: You know that Bank of America is bailing out, I guess in a sense, Countrywide Financial. What does it mean if you - if you have a mortgage currently with Countrywide.

WILLIS: Well, this is good news for you if you have a Countrywide mortgage. I know folks had a heck of a time getting through Countrywide to get any kind of loan modification. If they had an exotic loan or any other kind of loan information. If they have an exotic loan or any other kind of loan, this may be a good news. You may have a better chance getting through. They paid a fire sale - they paid a low, low price for countrywide. They devalued the assets already. So they're in the position now to forgive some of this debt, maybe, to write some of it down, to change interest rates. They have a lot more flexibility than Countrywide ever did. So if you have a Countrywide home loan today and you were struggling with an adjustable rate mortgage reset, you should call Bank of America and tell them and try to start negotiating with them right now.

CHETRY: That might be a good chance for you. Also, people should keep in mind that we could be seeing more of this, more mortgages changing hands. What do homeowners need to keep in mind there?

WILLIS: Well, you know, look, there are probably more mergers and acquisitions in this industry. There's going to be some consolidations going on. That's what the experts expect. Here's what you need to know. That means your mortgage could change hands. You need to keep an eye on your mailbox. Look for any letters to see whether your mortgage is changing hands. They're obligated to tell you within 15 days, give you an address to send your new mortgage payment to. You have a 60-day grace period in which you get the mortgage payment to the right place when your mortgage changes hands and the very good news here, your the terms can't change. So if you locked in a great rate two years ago, maybe 5 percent, maybe you got a fabulous loan and you don't want to see those terms change, they won't change by law. So, there are protections out there for consumers but you got to be alert and make sure you watch your mailbox. Kiran.

CHETRY: Good advice from Gerri. All right. Thanks so much. And Gerri, by the way, is going to be joining us tomorrow when AMERICAN MORNING hits the road. Keep it right here for the most politics in the morning starting tomorrow through super Tuesday. We'll be visiting battlegrounds beginning with the Michigan primary. Taking a look at the issues, driving votes there and across the country, especially economic issues. And we'll be talking about what's important for your job, your health, your home, and your vote. And we have the team to help you decide, Dr. Sanjay Gupta, Gerri Willis, Ali Velshi, and Chris Lawrence. All of them joining John Roberts on the road, the first stop in Michigan for the most politics in the morning. It all begins at 6:00 a.m. Eastern.

ROBERTS: It just wasn't the same without all of the stars walking on the red carpet but there were awards to be given out. Will show you what the Golden Globes looked like without all the glitz and the glamour. That's coming up.

And a new twist on an old favorite. Presidential candidates and babies. Meet the baby who is after the candidates, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: 44 minutes after the hour. No red carpet, no glitz, and no glamour. The writer's strike turned the glitzy Golden Globe ceremony into a quick news conference. Hollywood's foreign address voted "Atonement" as the best drama. And "Sweeney Todd: The demon barber of Fleet Street" won for the best comedy or musical. Daniel Day Lewis won the award for best actor in a drama for "There will be blood" and Julia Christie won best actress in a drama for "Away from Her".

A nor'easter moving across New England this morning. Still already falling this morning, in many place, including Providence, Rhode Island affecting travel up and down the eastern seaboard. Before the storm moves our this afternoon, some areas could get as much as 14 inches of snow. Our Rob Marciano outside of the snow in Hartford, Connecticut this morning. Rob, I just discovered that my 10:45 flight to Michigan was canceled.

ROB MARCIANO, CNN, METEOROLOGIST: Oh! Out of New York. Well, I tell you what, they were canceling flights into New York last night. So, It doesn't surprise me considering the planes aren't there to get going this morning. Anyway, the storm is definitely affecting New England, more than New York City. Although you folks may get a pulse there. We continue to get pulses of heavy wet snow here in the Hartford area. Heavy snow warnings are in effect until 1:00.

Let's take a look at the radar. Show you what we've been experiencing. The back edge of this moisture about to head through central Connecticut and all towards Boston where a lot of the heaviest snow has been. There's also been heavy snow into Springfield, Massachusetts where there's reports of trees down, due to that heavy wet snow, six inches there. So, that the moisture continues to spin, the storm continues to gain intensity as it heads out to sea.

We've seen not only a winter storm warning in from Boston. We got heavy snow warning for Connecticut. And we've already seen accumulations not only in Connecticut up to Vermont and through parts of western Massachusetts, upwards of five to six inches of snow so far with more on the way. As you mentioned, 10, 12, and in some cases, higher elevations will see up to 14 inches of snow. The bobcats are out here in Hartford, Connecticut. We're out here through the old state house, built in 1796. Nothing like a New England history for you. John, I hope you get to Michigan. The snow shouldn't be so bad in New York City. So at some point, maybe you'll get out there and cover the politics like we know you love to do.

ROBERTS: Got to get out there early as well. Rob, I got an interview going. All right. Rob Marciano for us this morning at Hartford. Rob, thanks. And now, let's take it over to Kiran.

CHETRY: Well, their daughter will probably have a picture with the next president of the United States, no matter who wins in November. The Garnick family set out to get 5-month-old Dahlia in a picture with every candidate. Their first rule, no politician kissing babies. Joining us now, the Garnick family. It's Darren, Stacy, baby Dahlia on Darren's lap and 5-year-old Ari. Thanks for being with us.

DARREN GARNICK: Thank you.

CHETRY: Now, you did this also back when Ari was a baby as well. Why did you decide, I know you're with slate.com. You're a reporter as well. Why did you want you wanted to get the babies in the pics?

DARREN GARNICK: Well, back when I took pictures of our 2-year- old - Ari was 2 years old at the last election, I was going to be working on a documentary for PBS about the election. Once the documentary started, I couldn't be going around taking goofball pictures of my kids. I had to, you know, act professional. So, this time around, I'm not covering the election and we timed the pregnancy just right. I'm kidding. You know, the baby was born, and I'm a political junkie and I thought it might be cool to get her picture taken with the president.

CHETRY: And you pretty much have a shot because we're going to go through some of the pictures and you can see you have almost all of the candidates. Let's show the first one? You have a picture of Hillary Clinton. There you go. We have Barack Obama, how old was Dahlia in this picture?

STACY GARNICK: She was just a couple, she's seven weeks and two months.

CHETRY: And what was the scene like out there.

STACY GARNICK: I wasn't there actually but I remember when Darren first showed me this picture, I said I would vote for him just for that, just the way he's looking at her so lovingly and so warmly.

CHETRY: And you weren't nervous because you know he had experience. He has two young daughters himself.

DARREN GARNICK: Right, when I - this was at the Labor Day parade in Milford, New Hampshire. You know, great Americana scene. And when I went up to Barack Obama, I originally was going to hand Dahlia in the baby seat to Barack Obama because candidates are shaking everybody's hand. People are coughing on them, they have lots of germs. And nothing against Barak, they're all filled with germs - every republicans, democrats, independents, they're all germ-covered politicians. And so, but Barack Obama stretched out his arms and it just seemed natural to hand her to him without the plastic seat and...

CHETRY: Let's look at a couple more. We have Rudy Giuliani and he looks like he's a little bit surprised by her reaction. What happened here?

DARREN GARNICK: Rudy wasn't happy. Dahlia smiled for the first few seconds and then started crying and Rudy was a little panicky. He was very panicky. He didn't want to be photographed with a screaming baby.

CHETRY: He handed her right back to you.

DARREN GARNICK: He tossed her right back to me like a football.

CHETRY: Let's take a look at Senator Hillary Clinton. She's also holding Dahlia. How about this one?

DARREN GARNICK: Oh, Hillary is a natural. I mean, she gets a bad wrap for being robotic or cold. But I felt like she was holding little baby Chelsea there. I mean she was very warm and natural.

CHETRY: Stacy, do you agree?

STACY GARNICK: I agree and I also like how their outfits match.

CHETRY: They do, they make a cute picture there. All right. Let's show John McCain. Do we have John McCain? John McCain also was laughing. He was joking around. At first, she was looking at him adoringly and then everything changed.

DARREN GARNICK: Yes. I mean I think if you want to - I don't believe that you can look at these pictures and say who's going to be a good president and who's not going to be a good president. But I do think it's significant to compare the personalities with McCain and Giuliani. When the baby started to cry with Giuliani, Giuliani basically shoved the baby back in my face. When the baby cried with McCain, McCain was like, OK, I got a crying baby. And he made a joke that there goes another vote. He just lost a vote because of the crying baby.

CHETRY: How about it? Did she have any -- do you think she's partisan yet or was she just as happy and pleasant with all of the candidates?

DARREN GARNICK: Well, you know, again, I don't think you can - I think you can tell a lot about candidates' personalities by how they hold the baby, but I don't think you can't say whether they're going to be a good president, whether she cries or not. But she did tend to cry more with the republicans than with the democrats.

CHETRY: No, let's see when she gets older.

DARREN GARNICK: Sure. Well, hang on. CHETRY: She's used to getting tossed around like a football and handed out like a football.

DARREN GARNICK: My wife would be very upset. Stacy would be very upset if I drop her here. So, we're going to be very careful.

CHETRY: We won't drop her on international television. Hi, sweetie. What a cutie. What a good sport.

DARREN GARNICK: She's very comfortable in your arms. She'd vote for you.

ARI GARNICK: She is. She definitely is.

CHETRY: She is adorable. Hey, sweetie. Very cute. And the youngest one on the campaign trail. How about it. Thanks so much for joining us. And Ari, thanks for being a great big brother, giving your little sister a chance to do what you did years ago. See you, guys.

DARREN GARNICK: Thank you very much.

CHETRY: I'm keeping her by the way. John.

ROBERTS: You would obviously be a remarkable political candidate.

New wheels, cleaner and greener engines. A look at the future at the big Detroit auto show. Plus, which ride has been named car and truck of the year. That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Some real horsepower at the Detroit auto show this year. In fact, so much so, that there was a roundup. A herd of 120 cattle on the streets of Motown as Chrysler debuted the new Dodge Ram pickup. Inside, green is the theme. Car companies showed off their latest hybrids. One startup company unveiled what they called an extreme hybrid, a plugged in SUV. The promise is 50 miles on battery and 620 miles a tank for an $80,000 price tag.

CHETRY: Time now, 53 past the hour. Stephanie Elam in for Ali Velshi "Minding your Business." You know, a lot of talk about manufacturing, candidates in Detroit and in Michigan for the primary and you have some auto world news for us.

STEPHANIE ELAM, CNN, "MINDING YOUR BUSINESS": Yes, I'm going to tie it all in. You know, you guys will have Ali tomorrow to talk about it more. So, if you take a look at what's coming out, Chevy Malibu getting the car of the year. That came out yesterday. This is the big win, obviously, for General Motors, second year in a row - wow, too early for me apparently and were my tongue -- that they won this award. So this is good news for them. The cars have to be all new or substantially redesign so this car got a major facelift.

So, that's why it's eligible for the award. It was chosen out of 13 cars and has the twin cockpit design of like the Corvette. It's similar to that and it actually helped it out. In case you're wondering, the Malibu wants to take on the Honda Accord and the Toyota Camry which have been the top selling cars in the country for a long time. And for truck of the year, that went to Mazda CX-9. That's Ford's car sporty crossover. There you go there. And also G.M. won truck of the year last year. So, this one going to Ford but still got some American cars there for you.

CHETRY: How about it. All right. Thanks, Stephanie.

Still ahead, you're watching the most news in the morning and there's a key witness testifying today in the inquest of the death of Princess Diana. We're going to tell you he's saying coming up.

And the search is on for the marine accused of murdering a fellow marine who was pregnant. Conflicting reports now over a sighting over the weekend. And we're going to get a live report coming up on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Damage control. Bill Clinton speaking out this morning. The fight over race and records and the escalating battle between the Clintons and the Obamas.

Extreme weather. Heavy snow warnings in effect. We're tracking a nor'easter on the move.

Plus, no glitz, no glamour, no gold.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: And the Golden Globe goes to -

ROBERTS: What happens when you throw an awards party and nobody shows on this AMERICAN MORNING.

That's a most unusual award ceremony we'd probably seen out of Hollywood.

CHETRY: Yes, now the big question is what's it going to be like for the typical start of the award season, the Oscars and every thing else, not to mention next year.

ROBERTS: What does it mean for the Academy Awards?

CHETRY: Right, when they have no shows to even nominate because of the writers' strike.

ROBERTS: Hey, welcome back. It's Monday, the 14th of January. Thanks for being with us. I'm John Roberts.

CHETRY: And I'm Kiran Chetry. We begin with a race for the White House. And a growing controversy, race the dominating campaign issue on the democratic side right now. As attacks between the Clinton and Obama camps escalated all weekend. It began with Clinton's remark that Dr. Martin Luther King's dream was not realized until President Lyndon Johnson signed the Civil Rights Act. Critics say the comment diminishes the importance of Dr. King. Clinton charges that the criticism is coming from the Barack Obama camp, which he says is not true.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I am baffled by that statement by the senator. She made an ill-advised statement about Dr. King and suggesting that Lyndon Johnson had more to do with the Civil Rights Act.

(END VIDEO CLIP)

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