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Jumbo Jet Short in Landing at Heathrow; Is it Too Late to Keep Out of a Recession?; Search Continues for Missing Marine

Aired January 17, 2008 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins.
TONY HARRIS, CNN ANCHOR: And I'm Tony Harris.

Stay informed all day in the CNN NEWSROOM. Here's what's on the rundown. Washington dials 911 on the economy is it too late to keep you out of recession. The Fed chairman's remarks live in minutes.

COLLINS: The American Defense Secretary, what did he say to make NATO so angry. Our CNN military analyst live.

HARRIS: A jumbo jet comes up short while landing. We will take you to the scene this Thursday, January 17th. You are in the CNN NEWSROOM.

And let's get you to Fredricka Whitfield in the CNN NEWSROOM. Fred is following breaking developments out of Jacksonville, North Carolina. The murder of marine Maria Lauterbach.

Good morning, Fred.

FREDRICKA WHITFIELD, CNN ANCHOR: Right, good morning to you, Tony.

Investigators are now trying to get a closer look at an item that was seized. An item that they believe just might be the weapon used in the death of Lance Corporal Maria Lauterbach. It's unclear right now -- that's why they want to take this item to a North Carolina crime lab to see if indeed it may have had something to do with the death of Lauterbach.

Meantime, the search continues for 21-year-old Corporal Cesar Laurean He is the primary suspect. It is believed that perhaps he may have fled across the borders to Mexico. And authorities believe that, or at least their investigating that belief because they recall talking to a number of people who know Laurean who said, that if in any way he was found guilty of the crime that he was accused of rape, accused of raping Lauterbach, that he would flee to Mexico. He does have some family there even though he is a naturalized U.S. citizen.

In the meantime, the headline here is that this item has been seized. It's unclear whether it is indeed the weapon that was used in the death of Lauterbach but it is now being sent to a crime lab to determine that exactly -- Tony.

HARRIS: Fred, appreciate it. Thanks for the updates.

COLLINS: Sectarian violence in Pakistan today. A meeting hall for religious ceremonies was attacked by a suspected suicide bomber. Eyewitnesses tell television that four people were killed, several others injured. Police have not confirmed any casualties. The attack in Poshawar today marks the seventh day of a holy month for Shiite Muslims. We, of course, will keep you posted on this breaking story.

HARRIS: And also developing this hour, the scare for the passengers and crew of a British Airways jet. The plane landed short of the runway, wow, at London's Heathrow Airport.

CNN's Phil Black is there. Good to see you. Do we know exactly what happened here?

PHIL BLACK, CNN CORRESPONDENT: Hello, Tony.

Yes, from where we're standing at the perimeter of Heathrow Airport looking across there you can see the aircraft in question. That is British Airways flight 38 that came in this afternoon at around 12:42. British Airways tells us that it performed an emergency landing, coming in hard just short of the southern runway. It has come to a stop. Its emergency shoots have been deployed. And some 136 passengers have been evacuated. We are told that has taken place rather safely.

Now, this has affected operations across the airport. There are two runways here. The northern one continues to operate. That southern runway was shut for a time but we are told it is now operating again safely. The aircraft that are to make short takeoffs, Tony.

HARRIS: Phil Black, I'm just curious. I think we heard a couple of reports that the Prime Minister Gordon Brown may have been on another plane on an adjacent runway. Is that true?

BLACK: That is correct, Tony. Yes, this is the world's busiest airport. Lots of aircraft movement. Among them today was scheduled to be the British Prime Minister Gordon Brown. He was going to China, his first official visit since recently becoming the British prime minister. His aircraft along with so many others here have suffered serious delays this afternoon -- Tony.

HARRIS: OK. Phil Black for us at Heathrow International Airport. Phil, appreciate it. Thank you.

COLLINS: Well, if this were up north or at least in this area of the country, like I don't know, Chicago, Philadelphia, you would probably say no problem. But snow in the south, in fact, humongous flakes falling from the Carolinas and southward. Winter storm warnings still in effect now for North Carolina. Greenville, South Carolina, became white overnight. The snow turned to sleet and freezing rain making for a very slushy commute this morning.

The northeast Georgia mountains got up to three inches overnight. A lot of kids got the day off from school. Authorities do say though that slick roads contributed to a wreck that killed three people. Dozens of flights out of Atlanta were also cancelled.

We always have a lot of fun with this, talk about the snow and what we do with it in the south. But obviously it can be very, very dangerous for people on the roads at times.

ROB MARCIANO, AMS METEOROLOGIST: It can be. They're getting some of that dangerous type of snow up in Virginia. Check it out. Roanoke, WSLS, our affiliate out that way. A live shot for you. Snow falling there and covering the roads and the cars. So, it didn't pile up to much at least on the main roads in north Georgia but certainly in Virginia, and then in the Carolinas, we've had significant accumulations there. And it continues to come down.

Here's our weather maker, low pressure across the Carolinas throwing moisture up and over some cold air. This isn't the bitterly cold air like we're going to see this weekend. I mean if it was, at this time a little bit differently, we may have been -- as it stands now looks like we might see some winter weather towards the weekend.

Nonetheless, right now, the here and now, eastern Tennessee, western Carolinas, smoky mountains of Blue Ridge, the Appalachians, they're in it right now. Most of the moisture out of north Georgia. You see the whites there. You saw it on the Roanoke live camera there. Snow falling in that area. Trying to get into Richmond. But Richmond up towards I-95 towards D.C., it will be kind of a wet, slushy snow. It shouldn't amount to a whole lot. What we might see is four to eight inches of snow in places from Iowa and through Wisconsin.

Mentioned the Green Bay game there expected after the snow. Really, really cold air -- mixed that order up. The really cold air coming into Wisconsin on Sunday, Saturday into Saturday night. Quick check on some of the Santa Ana winds. 100-mile-an-hour wind gusts in Laguna Pak, California. We haven't mentioned this much because it's not really hot wind this time of year.

And they have seen enough moisture where the fire threat isn't as bad as it would have been a couple of months ago. But nonetheless, we have a wind threat today. High wind warnings are posted again for SoCal. We could see winds gusting up close to 100 miles an hour. That is hurricane force winds there.

HARRIS: Yes.

COLLINS: No question. Rob, thank you. We'll check back a little later on.

Defense Secretary Robert Gates taking fire from key U.S. allies this morning. They are outraged by his apparent criticism of NATO. Minutes from now we are expecting to hear from Secretary Gates. But first, let's talk to CNN's senior Pentagon correspondent Jamie McIntyre on this.

So, Jamie, what are they saying? Is there any validity to it?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, you know, Secretary Gates will have some explaining to do when he meets with reporters at the Pentagon in just a few minutes. NATO allies are still smarting about the criticism published in yesterday's "Los Angeles Times," which said that Gates called, said that NATO forces currently deployed in southern Afghanistan do not have a combat, a guerrilla insurgency.

Here's the offending quote. "I'm worried we're deploying military advisers that are not properly trained and I'm worried we have some military forces that don't know how to do counter insurgency operations." Quick to take offense to that were the three NATO countries doing some of the heavy lifting and heavy fighting in the south, including the Dutch, the British, and the Canadian forces down there.

A British lawmaker, Patrick Mercer, a conservative former member of Parliament, called the comments by Gates bloody, outrageous. The Dutch summoned the U.S. ambassador for an explanation. Gates himself talked to the Canadians yesterday.

The Pentagon is saying to anyone who will listen that the Secretary was not singling out those countries in the south but repeating a long-standing criticism of the way NATO, the alliance of 26 nations, is organized for still a cold war kind of scenario in which Soviet forces would come through to fold the gap in Germany and was not criticizing these individual countries. He's going to make a point of that today and see if he can smooth over some of the ruffled feathers -- Heidi.

COLLINS: Is there likely to be more fallout from this or changes with the way NATO does things, or is it just going to be a major sticking point?

MCINTYRE: Well, there is some truth to the fact that a lot of the European allies do not have the training. And that's why for instance they're not able to provide the troops that NATO needs in the south and why the U.S. has had to cough up an additional 3,200 marines. But the criticism probably doesn't apply to allies like for instance, Great Britain who has a long history of developing counter insurgency doctrine. In fact, you might recall it was a British general that roundly criticized the U.S. for how it operated in Iraq at the beginning of the war in there.

COLLINS: Yes. All right. Some great context. Appreciate that. Jamie McIntyre from the Pentagon this morning. Thanks, Jamie.

MCINTYRE: Thank you.

HARRIS: Putting more money in your pocket, will it help rescue the country from recession? Fed chairman Ben Bernanke testifying before a house committee this hour. Live pictures. Great. Lawmakers say Bernanke supports temporary tax cuts or spending to stimulate the economy. The fed is also expected to cut a key interest rate in the coming days. We are watching, listening to Bernanke's comments. An update coming up for you soon.

Tax cuts for you, tax breaks for businesses. Some of the ideas President Bush and lawmakers are considering to rescue the economy from the recession. Live from the White House now, with CNN's Brianna Keilar. Brianna, good to see you. We get to say a couple of things we don't get to say often around here, Washington is moving quickly in bipartisan support.

BRIANNA KEILAR, CNN CORRESPONDENT: That is what everyone is talking about. The president, Republicans and Democrats in Congress. And this morning here at the White House, Tony, the first indication from the White House that President Bush will back an economic stimulus package.

White House spokesman Tony Fratto saying that a boost in the short term, that an economic boost in the short term is necessary to get through what the White House is characterizing as a soft patch in the economy. Now, the President, fresh off his trip from the Middle East, is going to be meeting this afternoon with Democratic and Republican leaders in Congress. This is going to be a conference call, not a physical meeting because the Senate is out of session. So senate leaders are out of town.

But no word from the White House on exactly what's on the table. But they are characterizing this as more of a consultation than a negotiation. As far as congress goes, the option of tax rebates, basically cutting checks to taxpayers to pump money into the economy, this is -- appears to be the one option that Democrats and Republicans seem to be overlapping on.

Democratic leaders on the Hill saying they want to roll out an economic stimulus package within the month. And next Tuesday, President Bush is going to be having another meeting with these leaders. As I said, all of them talking bipartisanship and House Speaker Nancy Pelosi with a very ambitious time line that she is drawing out. And that is to come to terms with the meeting and by the time that meeting is over to have a legislative proposal -- Tony.

HARRIS: Quick action, indeed. All right. At the white house, Brianna Keilar. Brianna, thank you.

COLLINS: The Pentagon's top man under fire from some of Washington's most critical allies. The mission in Afghanistan drawing outrage overseas and a career military man weighs in. We'll have that for you ahead. Right now, I want to take one more look for a moment to Fed Chairman Ben Bernanke. Let's listen in.

BEN BERNANKE, FED CHAIRMAN: ... jumbled mortgage loans have further reduced the demand for housing while foreclosures are adding to the already elevated inventory of unsold homes. New home sales and housing starts have both fallen by about half from their respective peaks. The number of homes in inventory has begun to edge down, but at the current sales pace the month supply of new homes has continued to decline and home prices are falling in many parts of the country.

The slowing in residential construction which subtracted about 1 percentage point of growth from the growth rate to real gross domestic product in the third quarter of 2007 likely curtailed growth even more in the fourth quarter and it may continue to be a drag on growth for a good part of this year as well.

Recently, incoming information has suggested that the baseline outlook for real activity in 2008 has worsened and that the downside risk to growth have become more pronounced. In particular, a number of factors including continuing increases in energy prices, lower equity prices and softening home values seem likely to weigh on consumer spending as we move into 2008.

Consumer spending also depends importantly on the state of the labor market as wages and salaries are the primary source of income for most households. Labor market conditions in December were disappointing. The unemployment rate increase by .3 to 5.0 percent and from 4.7 percent in November and private payroll employment declined.

Employment and residential construction posted another substantial reduction in employment and manufacturing and retail trade has also decreased significantly. Employment and services continue to grow but at a slower pace in December than in earlier months. It would be a mistake to read too much into one month's data.

However, developments in the labor market will bear close attention. In the business sector, investment and equipment in software appears to have been sluggish in the fourth quarter, while nonresidential construction grew briskly. In light of the softening in economic activity and the adverse developments in credit markets growth in both type of investment spending seem likely to slow in coming months.

Outside the United States however, economic activity in our major trading partners have continued to expand vigorously. U.S. exports will likely continue to grow at a healthy pace in coming quarters providing some impetus to the domestic economy. Financial conditions continue to pose a downside risk to the outlook. Market participants still express considerable uncertainty about the appropriate valuation of complex financial assets and about the extent of additional losses that may be disclosed in the future.

On the whole, despite improvements in some areas, the financial situation remains fragile and many funding markets remain impaired. Adverse economic or financial news thus have the potential to increase financial strains and to lead to further constraints in the supply of credit to households and businesses. Even as the outlook for real activity has weakened, some important developments have occurred in the inflation front. Most notably the same increase in oil prices that may be a negative influence on growth s also lifting overall consumer prices.

Last year food prices also increased exceptionally rapidly by recent standards further boosting overall consumer price inflation. The most recent reading on overall personal consumption expenditure and inflation show the prices in November were 3.6 percent higher than they were a year earlier. Core price inflation which excludes prices of food and energy has stepped up recently as well with November prices up almost the .25 percent from a year earlier. Part of this rise may reflect pass through of energy costs to the prices of core consumer goods services as well as the effects of the depreciation of the dollar on import prices although some other prices such as those for some medical and financial services have also accelerated lately. Thus far the public's expectations of future inflation appear to remain recently well anchored. And pressures on resource utilization have diminished a bit. Further, futures markets suggest that food and energy prices will decelerate over the coming year.

Given these factors, overall and core inflation should moderate this year and next, so long as the public's confidence in the Federal Reserve's commitment to the price stability is unshaken. However, any tendency of inflation expectations to become unmoored or if the Feds' inflation fighting credibility to be eroded could greatly complicate the task of sustaining price stability and would reduce the Central Bank's policy flexibility to counter shortfalls and growth in the future.

Accordingly, in the months ahead we will be closely monitoring the inflation situation, particularly inflation expectations. The Federal Reserve has taken a number of steps to help markets return to more orderly functioning and to foster its economic objective of maximum sustainable employment and price stability. Broadly, the Federal Reserve's responses followed two tracks. Efforts to improve market liquidity and functioning and the pursuit of our macroeconomic objectives through monetary policy. To help address the significance ...

COLLINS: All right. Some of the comments on the opening testimony for Fed chairman Ben Bernanke before the House Budget Committed, saying earlier even before his testimony that he has become open to some type of rescue package in order to avoid a recession.

Today, saying specifically though that the financial situation is, "remains fragile." And as we got those new home construction numbers, down 25 percent this morning, also saying that obviously he would be closely monitoring the inflation situation and inflation expectation. So very interesting. We will continue to watch the markets to see if there's any reaction from some of the comments that he made on Capitol Hill so far today.

Meanwhile, how worried should you be about the economy and what should you do with your money? That's the big question, right? We're going to talk with financial adviser in just a moment.

(COMMERCIAL BREAK)

HARRIS: OK. Outrage over Afghanistan. U.S. allies are furious with Defense Secretary Robert Gates. He has apparently criticized NATO troops taking part in that dangerous mission. Let's go in-depth here with Retired Brigadier General David Grange. He is now a CNN military analyst. General Grange, good to talk with you. It's been a while.

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Yes, thank you.

HARRIS: Let's start with the quote in the "L.A. Times" and then, your view of it. "I'm worried we're deploying military advisers that are not properly trained and I'm worried that we have some military forces that don't know how to do counter insurgency operations." What do you think of the critique? Is it valid?

GRANGE: Well, part of it is valid. I mean, there are countries, to include our own, that sent some advisers that should be better trained to do this particular mission. Training foreign militaries and police force is a difficult task. I thought it was much more difficult when I was in Vietnam. It was easy to do combat operation than it was to advise and train a foreign military.

HARRIS: Yes. Talk to us about the real frustration that we're going to hear probably in the Q&A with the defense secretary. What ultimately is the underlying frustration here, that you just don't have enough troops, you don't have the right military, maybe not the right types of troops on the ground? Well, what do you think it is?

GRANGE: Well, NATO was established after World War II really to defend western Europe and other countries to include the United States and some north of the English channel. The issue is that threat is not what it was after the Wall came down in 1989. The threat now is out of (theater) operations that affect these other countries to include European NATO member countries with economics, information, or the spread of troops.

HARRIS: If I could, let me jump in for just a second because the defense secretary is talking about this very issue we're discussing right now. Let's listen in.

(JOINED IN PROGRESS)

ROBERT GATES, DEFENSE SECRETARY: ...Conditions imaginable. As a result of the valor and sacrifice of these allies the Taliban has suffered significant losses and no longer holds real estate of any consequence. Indeed the resort to suicide bombers and other terrorist acts are the actions of those who have suffered consistent and repeated defeat in regular military actions throughout 2007.

In the past I have noted that NATO is an institution still has shortcomings as it transitions from its cold war orientation to a more global expeditionary posture. I've also said public that the U.S. military and U.S. government as a whole have had a difficult time adapting to protracted counter insurgency campaigns in Afghanistan and Iraq. We have to acknowledge the reality that the alliance as a whole has not trained for counter-insurgency operations even though individual countries have considerable expertise at and success in this arena.

A coalition at war always faces stresses and strains. Some of the sniping between Allied generals during World War II is the stuff of legend. And I can remember disputes even during the first Gulf War. But the trans-Atlantic alliance is in Afghanistan together. Our allies, including the Canadians, the British, the Dutch, the Australians and others, are suffering losses as they demonstrate valor and skill in combat. We must overcome in good faith and mutual respect the issues that provoke our alliance and keep focused on the mission that unites us, ensuring a free and secure Afghanistan. Thank you.

HARRIS: And General Grange, let me have you respond to what we just heard. It sounds like in part what we're hearing from the Defense Secretary is, look, these disagreements over practices, over mission are bound to happen. They've happened in the past and they're bound to happen again. Let's not make too much of a big deal about this.

GRANGE: Well, here's the thing. I think the American people ought to be grateful in this case, the Secretary of Defense has taken up this issue with our allies in the north Atlantic treaty organization. Everybody agrees that they want a safe and secure and free state of Afghanistan. The United States of America can't take the load itself.

HARRIS: Yes.

GRANGE: Now, granted, there are several Allies that are helping but many are not. They need to step up to the plate.

HARRIS: Yes. Can we be honest about and along the same lines of just how difficult a job this is going to be? And saying that, I wonder if you can characterize in your view how difficult and determined an enemy the Taliban is.

GRANGE: The Taliban is a very difficult enemy. They have the option, the host multiplier to have a sanctuary across the border in Pakistan which we're not going to be able to deploy troops there. So what has to happen is in a counter-insurgency operations, this is irregular warfare, nonconventional warfare, what we have to do is focus on the people and local government and not foreign enemies and the government.

In other words, most of your effort goes to the people. So, you have to set up zones of influence along this border areas and network of capability out of some type of transient irregular warfare support base structure in order to reach out to the people.

And then you have -- but you have a lethal capability to take care of the Taliban and those that you must do so. But, however, it has to focus on the people. An example is the poppy trade. It's worse than it was before. If nothing is done with that, you will never get rid of the Taliban. That's one example.

HARRIS: General David Grange. General, great to see you. Thanks for your time this morning.

GRANGE: My pleasure.

HARRIS: That was helpful. And still to come, the perils of plastic if you use a credit card, we will warn you about a double whammy that could be headed your way.

(COMMERCIAL BREAK)

HARRIS: OK. Coming up on the half hour. Welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris.

COLLINS: Hi, everybody. I'm Heidi Collins.

I want to go ahead and take a moment to look at the big board now. The Dow Jones industrial averages, because Fed Chairman Ben Bernanke began his testimony just a little while ago in front of the House Budget Committee. We want to see what sort of reaction there might be in the trading day so far.

And as you can see, Dow Jones industrial average is down about 74 points. Resting at 12,394. So, we will continue to watch that and see if there is any major reaction, if you will, to what he is saying there today. There you see the live picture there on Capitol Hill.

Meanwhile, as you well know, financial tough times are part of the discussion for many people in their homes. How worried should you be about the economy and what can you do? Ric Edelman is a financial adviser and best selling author. His latest book, "The Lies About Money." He is with us now from New York.

Ric, thanks for being with us, particularly on this day when the Fed chairman is before Capitol Hill talking about this possible rescue package that may be out there. Let's go ahead, in fact, and listen in to something that he said in his opening testimony and I'll get your reaction.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: To be useful, a fiscal stimulus package should be implemented quickly and structured so that effects on aggregate spending are felt as much as possible within the next 12 months, or so. Stimulus that comes too late will not help support economic activity in the near term, and it could be actively destabilizing if it comes at a time when growth is already improving.

(END VIDEO CLIP)

COLLINS: All right, we do add that, I made it through microeconomics, but I'm definitely no expert. He's basically saying that if there is a rescue package of some kind it needs to be fast, like right now, and it needs to be temporary?

RIC EDELMAN, FINANCIAL ADVISER AND AUTHOR: Yes. We need to act now, we need to act significantly. And acting too late can actually be worse than doing nothing at all.

COLLINS: All right. So, what does that mean for the average American? I mean, when you look at your wallet, when you look at your savings, what does it all mean?

EDELMAN: Well it really means that you need to pay real close attention to what's going on with your financials right now. It was pretty easy to be cavalier back in the early part of this century when everything was going great. The stock market was OK and the real estate prices were great and job growth was great. But, things are changed now. So you need to take a serious look at your financial planning, your investments, your goals and objectives. Are you still on track and is what's going on right now going to keep you on track.

COLLINS: You know, people always like to point fingers. Especially with something as large and as impacting as the economy. Whose fault is this? I think that I've heard some financial experts, if you will, talk about Alan Greenspan and the time that he was in charge.

EDELMAN: It's everybody's fault. It's Congress' fault. It's Greenspan's fault. It's the president's fault. It's the mortgage industry's fault. It's Wall Street's fault. Guess whose fault it really is? It's your fault. Because you're ultimately responsible for your own life.

You're the one who's going to pay the price of making mistakes and doing the wrong thing and falling victim to instant gratification and get rich quick schemes. So, ultimately, it doesn't matter whose fault it is. What matters is who is going to fix it. And we are ultimately responsible for our own fortunes and futures.

COLLINS: Great point. Great point. So, all right, that being said, if you do have a little bit of savings, what exactly do you do with it? Give us some advice here.

EDELMAN: What you need to do is pay attention to the long term. We don't know what's going to happen in the short term. We're not sure what Congress is going to do or the president. We're not sure what's going to happen in the election. We don't know what's going to happen in the economy in the next six to nine months. But I can tell you this, ten years from now the stock market will be higher than it is today.

So as long as your goals are long term, meaning you have a child whose college education you are working on, your own retirement in 10 or 20 years or longer, then you can ignore what is going on right now. Stay focussed on the long term. It's easy to make investment decisions if you have a long term. focus If you have a short-term horizon, meaning you're planning to buy a house in the next year or two, or you're retiring in the next year or two, well maybe you shouldn't have a lot of money in the stock market because things are so uncertain.

COLLINS: Yes, so uncertain and so darn scary. That's the bottom line. People get impatient and they start cutting back on their retirement funding and their saving. You're saying, no, don't do that.

EDELMAN: Don't do it.

COLLINS: In fact, if you were to do one thing today, or maybe perhaps this week, with your finances, what would it be? EDELMAN: It would be to make sure that I have a properly diversified financial portfolio. Make sure that your investments are not making heavy bets. In my book, "The Lies About Money," I show you exactly how to do this. The key right now is diversification -- 12 eggs in 12 baskets and it will get you through today's uncertainties.

COLLINS: Twelve eggs, in 12 baskets. All right. Ric Edelman, it's the quote of the day here on the NEWSROOM. We appreciate your time.

EDELMAN: My pleasure.

HARRIS: OK, so we go to credit cards. Credit cards, credit cards, credit cards. Gosh! Oh, boy, watch out. OK, you could be facing a real double whammy here. Higher interest rates and now bank fees that are hitting record highs. Gerri Willis is here to protect your plastic, your credit score, your wallet.

Gerri, great to see you.

GERRI WILLIS, CNN CORRESPONDENT: Good to see you, Tony.

HARRIS: All right. Let's sort of do a recap here, around the horn here. What are we seeing in terms of getting hit with these fees?

WILLIS: We're talking about bank fees here, really, is what we're talking about. It's not only overdraft fees, which I know you've heard about, but one of our sources tells us he was hit with fees just for using his debit card too often. We're not kidding. More on that later.

Let's start with bounced check fees. You know those. They're hitting new highs, that according to a survey by bankrate.com. These fees climbed three percent since last year, to a record high of over 28 percent. As we all know, ATM fees are out of control. The fee that ATMs charge non-account holders has hit record highs.

In fact, major banks, like Bank of America and Wachovia, have raised surcharge fees to $3 in some areas. If you have an interest- bearing checking account at a traditional bank, those fees are higher, too. You'll have to plunk down 60 percent more for a minimum deposit and service fees are on the rise. Believe us, that interest rate at about .3 percent is not getting you anywhere, Tony.

HARRIS: The reality is, we are paying for all of these write- downs. You just have to know that. So, maybe there's -- is there a good piece of advice, a couple of pieces of advice for consumers here?

WILLIS: To avoid high fees on your checking account, shop online for a new account. A lot of Internet banks are offering free interest-bearing checking accounts. You could earn as much as four percent, in some cases. And, consider non-interest bearing checking accounts. The average balance requirements and monthly service fee is much, much, much lower. In most cases, non-interest accounts don't even have any fees or balance requirements. Compare rates at bankrate.com.

HARRIS: There he is, Fed chief, Ben Bernanke, testifying now. You got any help there, buddy? I'm just wondering, what about those fees, those ATM fees? Any advice to help us avoid all of those fees?

WILLIS: It's getting harder and harder to avoid the fees. Rule number one, go to your own bank's ATM. If you live in a smaller community, ask whether the bank has other ATM alliances with other banks or credit unions. Check out All Point, this is a surcharge free ATM, a network of partners with credit unions and smaller community banks across the country.

See if your bank is part of the network. You may consider using a debit card and asking for cash back when you make a purchase. And of course, you want to plan ahead. ATMS in airports, casinos, restaurants, you know the deal there, higher surcharges.

HARRIS: How about your rights? What if you feel like you're being hijacked here. Is there anything you can do? Any recourse?

WILLIS: Well, let's get back to the source who was penalized for over using his debit card.

HARRIS: Yes, OK. Great.

WILLIS: He requested that the bank waive those fees, and it worked.

HARRIS: It did?

WILLIS: It did indeed. It can work for you, too. To avoid fees like these, you will need to get your bank's schedule of fees. It's on the bank Web site. If you can't find it, call the bank, find out, complain.

HARRIS: Great. We want to look ahead a little bit here, Gerri, with you to the big "OPEN HOUSE" show this coming up weekend.

WILLIS: Well we'll tell you how the presidential candidates will affect your bottom line. Also, the biggest mistakes people make with their money and how to avoid them.

HARRIS: Great. Gerri, great to see you. Thanks for your time.

WILLIS: Thank you, Tony.

COLLINS: Time to take a look at the numbers. The Fed chairman, Ben Bernanke, testifies before Capitol Hill, in fact, in front of the House Budget Committee. We are watching those numbers. We have seen a little bit of reaction. Again, I'm not going to attribute it to anything, but moments ago, when he began speaking, it was down about 11 points. And now we are down 104 points, as of this very moment.

Dow Jones Industrial averages resting at 12,361 now. In case you missed it, one of the things he did say off the top in his opening testimony is that the financial situation remains fragile and he will be closely monitoring the inflation situation. We are watching it all closely, right here in the CNN NEWSROOM.

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HARRIS: Two police officers dead, a suspect behind bars. They're still on the run. New developments on a breaking story out of the Atlanta area. Police in Dekalb County, Georgia arrested 32-year- old Herbie Deshawn Durham in the ambush deaths of two off-duty police officers early yesterday. A massive search under way for more suspects. A news conference scheduled this hour. We will of course keep you posted.

It may be the murder weapon. Authorities in North Carolina say they have an item that may have been used to kill Marine Corporal Maria Lauterbach. The item will be analyzed by a crime lab. The burned remains of the pregnant marine and her child were found last week in the yard of a fellow Marine. Corporal Cesar Laurean has been charged with the murder. The FBI believes the naturalized U.S. citizen may have fled to his native Mexico. U.S. and Mexican authorities are working together on this case.

She knew the murdered Marine and she knows the Marine accused in the killing. Now a friend is disputing what the officials said about the victim.

Randi Kaye keeping them honest in this exclusive report.

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RANDI KAYE, CNN CORRESPONDENT (voice-over): She doesn't want people to know who she is for fear of reprisal, but she has plenty to say, because she knew Lance Corporal Maria Lauterbach and the man charged with killing her, Corporal Cesar Laurean.

"LISA," LAUREAN' FRIEND: It's an incredibly surreal experience for me to see someone that I was personally acquainted with and was friends with on a wanted poster. I just can't wrap my mind around the fact that he would have brutally murdered someone.

KAYE: Laurean's friend, who we'll call Lisa, says Lauterbach and Laurean became romantically involved in December of 2006. Lisa remembers Lauterbach telling her they'd had consensual sex at least once before she accused him of raping her. Lauterbach never told Lisa whether she thought Laurean was her baby's father.

LISA: She said that she just did not want to be around him; she was scared of him.

KAYE: Why, then, just yesterday would the Marines tell us Lauterbach told them she didn't feel threatened? "Keeping Them Honest," we tried to ask but were told they're not discussing the case anymore.

They weren't the only ones to suggest this. Even Sheriff Ed Brown and naval investigators said the two had a friendly relationship. That's why, they said, Laurean wasn't considered a flight risk or a suspect. (on camera) Was she attempting to cut off a relationship with him?

LISA: She wanted nothing to do -- she wanted to be nowhere near him.

KAYE (voice-over): In fact, Lisa says Lauterbach was so afraid, she requested another protective order against Laurean when the first one expired.

LISA: She came in September when her original military protective order had expired, asking if she could have, A, a copy of the original one and, B, a second one put into place. I did the paperwork and routed it to the appropriate authorities to have it signed and then passed back down.

KAYE (on camera): So she did have a second military protective order in place when she disappeared?

LISA: Yes, she did.

KAYE: You had written it yourself?

LISA: Yes, I personally did it.

KAYE (voice-over): The sheriff had told me the protective order found in Lauterbach's car was expired. Why didn't he tell us Lauterbach had obtained that second order, still in effect when she was murdered? Because the Marines wouldn't confirm that until yesterday.

So how could investigators say the two were on friendly terms? The Marines won't say.

(on camera) Is there any doubt in your mind that she was afraid of him?

LISA: No.

KAYE (voice-over): Lisa doesn't want to believe her friend is a killer. She says Laurean is a friendly guy and a good father. They talked often about their toddlers.

(on camera) Hard to believe that somebody who's telling you about sippy-cups and whether or not your daughter is crawling could be capable of this.

LISA: And that's how I look at it. I'm going, like, you know, we had conversations about, you know, what size diapers to buy, you know, not like how to kill someone.

KAYE: Do you think that Corporal Cesar Laurean is capable of murder?

LISA: I guess everybody is capable of anything, depending upon how far they're pushed. KAYE: She says he has the skills to survive on the run. Like the TV star MacGyver she says he can rig anything. He can shoot an M- 16, and he's a fast runner.

The military teaches skills to adapt and overcome. No doubt, she said, he's banking on doing just that.

Randi Kaye, CNN, Pittsburgh.

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(BUSINESS HEADLINES)

COLLINS: A chill in the economy, higher prices and less spending. Washington with plans to pump up your pockets.

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HARRIS: This just in to CNN. Boy, the endorsements, Heidi, are certainly starting to roll in now. CNN has learned through Candy Crowley, our senior political correspondent Candy Crowley and her deep sources, that Vermont Senator Patrick Leahy, the chairman of the Senate Judiciary Committee, is set to endorse that man right there, Senator Barack Obama. That is to happen later today. What it all means, what the endorsement means, we can certainly discuss that later.

But here is the news right now, that Vermont Senator Patrick Leahy, chairman of the Senate powerful Senate Judiciary Committee is set at some point today to endorse Senator Barack Obama. More on this to come later in the CNN NEWSROOM.

And still to come, old friends reunite to save a life.

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UNIDENTIFIED MALE: His first reaction was, I can do that, I'll do that. It just all came together.

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HARRIS: A pair of preachers and the church organ.

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COLLINS: How far would you friends go to save your life? An Oregon man in need of a kidney can answer that today.

Here's Jack Penning (ph) with affiliate KGW.

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UNIDENTIFIED MALE: They've got blood pressure. They've got heart rate. JACK PENNING, KGW REPORTER (voice-over): Tubes and wires everywhere. Just two days after a transplant.

UNIDENTIFIED MALE: Almost an immediate improvement on how I felt.

PENNING: It was more than two years ago Rick Stafford found out his kidneys were failing.

UNIDENTIFIED MALE: On my days off I can sleep the whole day.

PENNING: So sick, it was difficult to go to work, as a pastor at a Damascus church.

UNIDENTIFIED MALE: I'm going to be facing a transplant.

PENNING: Each member of his family was tested. Not one match. A two-year search found no suitable donor anywhere. It was then an old friend...

UNIDENTIFIED MALE: Forty years.

PENNING: ... and fellow pastor Dwight Hires picked up the phone out of nowhere.

UNIDENTIFIED MALE: I just called him up. We were talking.

PENNING: They'd lost touch. They hadn't talked regularly in 20 years. But as Dwight found out his friend was in dire trouble, he also found his calling.

UNIDENTIFIED MALE: His first reaction was, I can do that, I'll do that it.

UNIDENTIFIED MALE: It just all came together.

PENNING: After four months of testing doctors were amazed.

UNIDENTIFIED MALE: Just so happened that Dwight was a match in all of those areas.

UNIDENTIFIED MALE: Yes, probably one in 100.

PENNING: So this past Monday in the O.R.

UNIDENTIFIED MALE: Just like, well, here we go.

PENNING: Dwight gave Rich life.

UNIDENTIFIED MALE: There's an incredible reward that we get inside.

REV. RICH STAFFORD, TRANSPLANT RECIPIENT: He knows I'm very appreciative, but how do you ever really repay somebody for giving you a kidney? I don't know how to do it really adequately.

REV. DWIGHT HIRES: It does do me some good. It does me some tremendous good emotionally.

PENNING: An unlikely reunion of two old friends, and an unlikely gift that will forever link these two men.

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HARRIS: Love the smiles, don't you? Isn't that great?

Make it go around in circles. Channeling a little Billy Preston here in the NEWSROOM. News about the man who helped put the hula in the hoop.

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