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American Morning

Obama's Speech: Race and Unifying America; Florida: No Revote; Show Me the Money: IRS Online Rebate Calculator; Affairs of the State: New York Governor in New Scandal

Aired March 18, 2008 - 06:00   ET

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


KIRAN CHETRY, CNN ANCHOR: Welcome to AMERICAN MORNING. It is Tuesday, March 18th. I'm Kiran Chetry along with Alina Cho and Ali Velshi. John Roberts has the week off.
And, boy, you look at the papers again today. Wait a minute. Didn't we already just go through this?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: I thought this was yesterday's paper or you know, last week.

CHETRY: Exactly. But apparently, there is another sex scandal involving a New York governor. Revelations coming out overnight about the new governor of New York, David Paterson. He and his wife giving an interview to the "New York Daily News" admitting that they had affairs some years back in their marriage. Also -- so we're going to talk a little bit about that today.

Also, some new numbers coming in at this hour affecting your money. There are some major concerns about Lehman brothers. Again, a big investment bank connected to the subprime mortgage crisis much like Bear Stearns, and Ali is tracking all of these numbers for us this morning.

We begin now with the race for the White House and a critical morning for Senator Barack Obama. He's in Philadelphia where he will deliver a speech on race and politic just a few hours from now. One that his campaign says will also talk about ways to unify the country. Obama will address the heated rhetoric from his former pastor, Jeremiah Wright.

Wright recently retired after 36 years as pastor of Obama's church in Chicago. Wright's sermons have recently made the rounds on YouTube, and it sparked a debate. Some of the sermons raging against racism, criticizing America. Obama has found himself now defending Wright and his own campaign promise to unite America.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The statements that were a source of controversy from Reverend Wright were wrong, and I strongly condemn them. I think the caricature that's being painted of him is not accurate. And so, part of what I'll do is to talk a little bit about how some of these issues are perceived from within the black church community, for example, which I think views this very differently. (END VIDEO CLIP)

CHETRY: In fact, Wright's church is defending his provocative rhetoric as part of the tradition of African-American churches to question social justice. Wright stepped down last week as Obama campaign's religious counselor.

And then, on to the issue of seating Democratic delegates in two states that could play a big part in eventually who gets the Democratic nomination. The Florida democrats feeling a blow to Senator Hillary Clinton's campaign and the state's 4.2 million democrats, because party leaders have now said they are pretty much giving up hope of being able to hold another primary. That would leave Florida's 210 delegates in limbo.

There is a plan on the table to figure out how or even if they will -- there is no plan actually on the table now to determine how they'll seat them at the national convention in August. Florida lost its delegates because it violated party rules by holding its primary early. Clinton did win that primary, though neither candidate really campaigned in the state.

Could be a different story though for Michigan. It looks like momentum is growing among democrats in that state for a June 3rd revote. It would require all voters to sign, sign a statement swearing that they didn't cast ballots in the state's Republican primary. The re-do would be called off if either Senator Barack Obama or Hillary Clinton drops out, or the $12 million needed is not raised. Clinton did win the January 15th contest in Michigan, but Obama, by his own choice, removed his name from the ballot.

Well, here is the delegate count as it stands now, and this will give you an idea of why those states and what they decide to do in terms of any revote is so crucial. Barack Obama with 1,618 delegates, and Hillary Clinton with 1,479. Again, 2,025 delegates needed to secure the democratic nomination. The next primary is five weeks from today, April 22nd. It's in Pennsylvania, and that's where 158 delegates are at stake.

And just out in the last couple of minutes. A new poll showing a virtual dead heat between John McCain and whichever Democrat wins the nomination. There's a look. Barack Obama with 47 percent to John McCain's 46 percent in the latest CNN/Opinion Research Corporation poll. And then, it looks like Hillary Clinton with 49 percent if she were the nominee, while 47 percent which is McCain. All of those, as we said, within the margin of error, plus or minus three points, which again, makes it a dead heat.

The Federal Reserve meeting today and it will probably cut interest rates again to try to save a sinking economy. We bring in senior business correspondent Ali Velshi with more. We talk about cutting rates. What exactly -- what rate are we talking about now?

VELSHI: Well, this is it. This is the real interest rate, the one that affects us all. What the Fed did on Sunday night was cutting the discount rate. That's where the banks borrow money from each other. That poll you were just talking about, we also polled people about the economy.

And, you know, we just started yesterday with this issue number one. A focus on your money and how it matters in the election, affects your money. And by such great fortune, the poll numbers came in and the economy it turns out is issue number one. In fact, by a long shot, by double as much as the second issue, which is Iraq.

Forty-two percent of respondents in the CNN/Opinion Research poll conducted over the weekend say that the economy is the number one issue. Iraq number two, health care, which kind of works itself into the economy as an issue is the third. Terrorism is number four, and immigration is number five.

So when you take health care and immigration, which both again work themselves into money issues, you really do have a majority of Americans concerned about the economy. However, a majority of Americans, an overwhelming and growing majority of Americans think that the recession, that the U.S. economy is, in fact, in a recession. Seventy-four percent of respondents think that we're in a recession.

And you know, Kiran, we've been tracking this month after month after month, and that number has just been growing. Increasingly, more and more experts are now talking about the fact that the economy is in recession. So it is 6:05 Eastern right now. At 2:15 Eastern this afternoon, the Federal Reserve almost certainly will cut rates again. And we're looking at anywhere from 50 basis point, that's half a percentage point and up. It will be very unlikely if the Fed didn't cut interest rates.

Take a look at what happens when the Fed cuts interest rates, what the prime rate immediately will drop, adjustable rate loans will cost less and the U.S. dollar, yes, unfortunately, will weaken again. We will have coverage on all of that today of the Fed cutting rates.

CHETRY: All right. Ali, sounds good. Thank you.

Meanwhile, we have Alina Cho as well. She's tracking other stories that have developed overnight including this, yet another bombshell out of all this.

ALINA CHO, CNN CORRESPONDENT: I mean, it's incredible. Right? Just when you thought all of this was over in New York, yet another story. Good morning, guys. Good morning, everybody.

New this morning. New York's newly-sworn governor facing questions about his own fidelity this morning. David Paterson told the "New York Daily News," he and his wife Michelle both had extramarital affairs during a rocky time in their marriage several years ago. They have since reconciled. "The Daily News" says Paterson carried out the affair at the Days Inn on New York's Upper West Side. There are the pictures of it. And that the Patersons agreed to talk about their marriage once rumors started circulating in Albany over the past few days.

Paterson was sworn in yesterday as the first African-American governor of New York State and the first legally blind governor in U.S. history. The "New York Post" reports that Paterson will hold a news conference later this morning to talk about these new revelations.

And former New Jersey Governor Jim McGreevey and his estranged wife Dina are both speaking out about allegations of a third person in their relationship. Dina Matos McGreevey is adamantly denying claims by McGreevey's one-time driver, Teddy Pedersen, that the three had sex in the late 1990s before the McGreeveys were married. But Jim McGreevey confirms the encounters.

The driver is standing by his story telling "The New York Post" today, "Dina is still in denial. It's time for her to face the truth." McGreevey resigned in 2004 after publicly calling himself a gay American. The McGreeveys are currently embroiled in a bitter divorce battle.

Tibet's exile spiritual leader, the Dalai Lama, is now threatening this morning to step down if violence in his homeland spirals out of control. Recent protests against Chinese rule have turned increasingly violent. The Dalai Lama has urged Tibetans to show some restraint. But with China now pointing the finger of blame at the Dalai Lama, he says his only option may be to "completely resign."

High-level meetings are going on in Russia this morning. U.S. Secretary of State Condoleezza Rice and Defense Secretary Robert Gates are trying to reassure the Russians that the U.S. missile defense shield is not a threat. Today, they meet directly with outgoing Russian President Vladimir Putin and president elect, Dmitri Medvedev. This comes just one day after Secretary Rice met with Kremlin opponents and criticized the Russian political system.

Well, a section of I-95, one of the busiest highways in the nation, will be closed in and around Philadelphia. Listen to this. The two-mile stretch has been shut down for emergency repairs. Inspectors found a four-foot crack in a concrete support pillar -- how scary is that? -- ranging from two inches to several inches wide.

Officials hope to have it repaired in two days or so, with smaller cracks, about a half inch wide was noticed last fall. That section of I-95 carries nearly 200,000 vehicles a day. Probably a good idea to close it while its getting fixed.

Also, new this morning. Harvard Law School is offering a tuition break for law school students who choose public service. Incredible. The university is offering free tuition in the third year of law school to anyone who commits to five years with either a nonprofit organization or the government. It amounts to $40,000 in savings, guys, so this is going to help people. Many students said they finished law school owing hundreds of thousands of dollars.

And eight lucky ladies have 276 million reasons to celebrate this morning. It looks like the eight co-workers who bought Saturday's winning powerball ticket at this West Virginia store, Paula's, matched all six numbers.

(CROSSTALK)

CHETRY: Living up to the name.

CHO: Right. They matched all six numbers. So far, the women have kept out of sight. But guess what? We could get a glimpse of them later today when West Virginia lottery officials hold a news conference. The $276 million. Ali knows this.

CHETRY: Although, I know, but after it's all settled down and they pay taxes, that's $12 mil a person. Not a bad (INAUDIBLE).

(CROSSTALK)

VELSHI: That's sick.

CHETRY: That's a far fall from $276 mil, right? I won.

CHO: All right.

VELSHI: What do we know about these women?

CHO: But the key -- nothing.

CHETRY: No. The one thing I found out, they work -- they work in a county tax office in West Virginia. How ironic. And so, they know firsthand all the --

VELSHI: Set the rules up. There we go.

CHO: They make take the lump sum, right?

VELSHI: Right.

CHETRY: They're taking the lump sum, but they all reported to work, by the way. Talk about dedication.

(CROSSTALK)

VELSHI: Oh, yes.

CHO: That's good.

CHETRY: So they're keeping a low profile.

VELSHI: I'm not going to do that. Just say no.

CHETRY: OK. Because you're not going to win.

VELSHI: I'll be working for a long time.

CHETRY: Thanks, guys.

CHO: You bet.

CHETRY: We're also tracking extreme weather this morning. It comes to us from our affiliate KTIN in El Paso, Texas. An interview about the weather gets interrupted by the weather. There it is. Strong winds ripping the roof, part of it, at least, off of a building like it was the top of a sardine can.

Our Rob Marciano is at our weather update desk tracking extreme weather for us. And, boy, there you see it again. Firsthand, caught on tape. And when you get a chance to see the wrath of mother nature caught on tape like that, it really is astounding.

ROB MARCIANO, CNN METEOROLOGIST: And never -- nothing ever surprises me, and it always humbles me, especially when one rips through downtown Atlanta over the weekend.

We have tornado watches in effect and one warning. I want to show it to you right now. The watch across central Texas and this is a very slow-moving system. So what was in El Paso central Texas yesterday is slowly moving eastward, but, you know, it's not even past Austin right now.

So we have this tornado watch. The red square there. That's in effect until 9:00 a.m. Local time, and a lot of active weather rumbling through that area right now. We have a tornado warning that's in effect from McCullough County until 6:30 or 5:30 Local time. There you see the pink polygon. This thing is moving to the northeast at about 50 miles an hour. So in that direction, not making a whole lot of easterly progress.

Linear Rochelle (ph) at 5:20 Local and there at U.S. I-190 at about 6:30. So keep an eye on that and definitely take cover if you're living in that area.

This tornado watch is shrinking and should be losing its steam here and expiring in the next hour. But certainly a lot of heavy rain across parts of Arkansas and across parts of north Texas and very heavy rain across parts of southern Missouri, Indiana, Illinois and in through the Ohio River.

This is a cause for concern for flooding as we go through today and tomorrow. As a matter of fact, much of northeast Texas, southern -- almost all of Arkansas and in through eastern parts of Oklahoma under flash flood watches and warning. A number of warnings out for parts of Missouri. Several inches of rain potentially out of this system as it pushes off towards the east and will include parts of Ohio as well.

And here's our estimate of rainfall. We could see in some cases, some extreme cases, maybe three, four, five, upwards of six inches of rain. And this is on top of areas that have, still, some snow pack, Kiran. So flooding in some of these rivers looks like it is imminent. We're carefully -- I'll be watching that situation.

CHETRY: All right, Rob, thank you.

MARCIANO: You got it.

CHETRY: Also, you're watching the "Most News in the Morning." And still ahead, Senator Barack Obama addressing the issue of race head-on. But will his comments end the outrage over some of the things that his former pastor has said? And could the divisive sermons from Obama's spiritual adviser turn off voters? We're talking to political analyst John Dickerson.

Also, the government rebate checks. The IRS releasing a payment schedule and also an online calculator to help you figure how much you're going to be getting back when you finally get the check. We're going to show you coming up on AMERICAN MORNING.

(COMMERCIAL BREAK)

CHETRY: Welcome back to AMERICAN MORNING. A bit later today Barack Obama is going to delivering a speech in Philadelphia that will focus on race and politics. Now, his campaign has previously steered clear from any talk of race, preferring to not make it a central issue. But then, of course, this controversy, which was sparked over some comments that were made public on YouTube, in fact by Obama's spiritual adviser and former preacher, Reverend Jeremiah Wright. Listen to a little bit of it.

(BEGIN VIDEO CLIP)

REV. DR. JEREMIAH A. WRIGHT, TRINITY UNITED CHURCH OF CHRIST: And then wants us to sing "God Bless America." No, no, no! Not "God Bless America." God damn America! That's in the bible. We're killing innocent people. God damn America.

(END VIDEO CLIP)

CHETRY: So what can we expect from Barack Obama's speech today, and how important is it to his campaign? Joining us now is CNN's political analyst John Dickerson. Good morning, John, great to see you.

JOHN DICKERSON, CNN POLITICAL ANALYST: Good morning.

CHETRY: Is he giving this speech because Reverend Wright's comments were put on YouTube?

DICKERSON: Yes. I think there are a couple of reasons Barack Obama is giving this speech. He's dealing with this crisis at hand, and it's been kind of lingering question for his campaign, something that keeps kind of coming up. And so, he's trying to use it as an opportunity to have a kind of presidential moment here addressing a big issue, dealing with this immediate crisis. But also reminding voters why they may have liked him in the first place, which is his promise to be a conciliator, to bring people together, and to have this kind of rhetorical power that a lot of people found so attractive in his candidacy.

CHETRY: So he's condemned to the remarks. He has denounced some of the comments that Reverend Wright has said. What do people want to hear from him in his speech today?

DICKERSON: Well, I think people want to hear exactly what his feelings are about these remarks. As you say, he's condemned them. I think they want to hear that again. I think it's a purely political matter, though.

I think his goal here is to try to, one, take advantage of this moment to show that he can deliver a kind of presidential address. But secondly, I think also to get very narrow here, he wants to find a way to talk to voters in Pennsylvania, the big next state in this primary contest, in some way that might connect with them. So that might move, maybe, beyond race and talk to people in a way that affects them in your lives so that it hits home to these voters he's trying to court.

CHETRY: And it's probably not something that the Obama campaign wants to be reading about, which are articles and interviews, where people say maybe I'm questioning or giving a second look at Hillary Clinton or maybe I'm second-guessing my decision for Barack Obama, because I'm made uncomfortable by what I'm hearing. Does that really have that type of impact, even though these words did not come out of Barack Obama's mouth?

DICKERSON: Well, they have an impact because for two reasons. One, Hillary Clinton has tried to press this notion that Obama is unknown. He's unvetted. And so, this is a surprise. Those, the clip you played, is also shocking to many people. So there are voters who, for whom this may give them pause.

On the other hand, there's a month until the next primary contest, which is an eternity in this race so far. And so, there's plenty of time for Obama to address these remarks, if he's able to, and then get back to talking about what people really care about which is the economy and the war in Iraq.

CHETRY: Yes. You know where time is running out, that's Florida. They've apparently said that it's going to be hard for them to try to hold any type of revote primary or mail-in. So they're -- it looks like they're jettisoning that plan. What is the next step, and will Florida voters just be totally ignored in this primary?

DICKERSON: Well, the next step is more sort of bickering, finger-pointing and recriminations about Florida. There's no solution. And now, Obama and the Obama and Clinton camps will have to figure what to do with those 200-plus delegates, and there is no real solution. There are a couple that have been floated, counting half the delegates or finding some way to have them sat at convention, but kind of split down the middle so neither side gets an advantage.

Of course, the Clinton campaign is not down with that plan. And so, this kind of bickering and this argument over what to do with them continues. And again, that has nothing to do with the way people live their lives and what they're looking for in a president.

CHETRY: Yes. All right. We'll look -- to be continued for Florida. Looks like Michigan's trying to find a way. So we'll keep our viewers posted on that. John Dickerson, great to see you this morning. Thanks.

DICKERSON: Thank you. CHETRY: Supreme Court hearing arguments today in a landmark case that involves the second amendment's right to bear arms. We got a live report from the Supreme Court coming up.

And also, we've heard so much about these rebate checks. Right? The stimulus checks coming from the IRS. Well, when are they coming? And do you know how much you're going to get?

Our Veronica De La Cruz is here. She's going to show us this cool online tool to find out how much you're getting back from Uncle Sam ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

CHETRY: How about this picture? Trying to quench a mammoth thirst in your "Hot Shot" now. This elephant needs a drink in Bangkok's summer heat. So a zoo worker obliges him with the hose. It can get high out there when you're carrying around five or six tons. And that is our "Hot Shot" this morning.

If you got one, send it to us. Head to our Web site CNN.com/am and follow the "Hot Shot" link.

Also, new this morning. The IRS says that the economic stimulus checks will start going out in early May. Veronica De La Cruz is here to show us how to use a nifty online calculator so you can figure out whether you're getting a check, how much and when you might get it. That's pretty cool.

VERONICA DE LA CRUZ, CNN INTERNET CORRESPONDENT: Yes. Yes, it is really cool. And those definitely are the questions. Listen here.

First of all, a couple things you want to remember here. You want to get your tax documents handy, because you're definitely going to need those. Then you want to jump online and head to, grab a pen because it's a pretty long URL. It's irs.gov/app/espc. That's a long one. It's on our Web site right now.

But that's why the government has set up an online calculator, and you're going to have to answer a series of questions about your filing status. Things like your salary, adjusted gross income, tax credits, et cetera, et cetera. And if you've already done your taxes, you've calculated all this, it's going to be really, really easy for you. Once you plug it all in, you can see how much you can expect to receive.

So, you know, it's all online right there for you. Again, if you've done the homework, you're going to be able to figure it out. If not, it's going to take some time.

CHETRY: And then, how do you figure out exactly when you're going to get the check in the mail?

DE LA CRUZ: Well, you know, it's really, really cool. The IRS is actually taking care of this. They've actually broken it all down for you. And here's the secret. If you file a 2007 return by April 15th, and you have the money direct deposited, then check this out. The IRS Web site has posted a tax rebate payment schedule. It goes by the last two digits of your Social Security number. And they're between 00 and 20. Payments should be sent to your bank account by May 2nd; 21 to 75, May 9th; 76- 99, May 16th.

And the reason you want to file electronically is because you get that rebate right away. The schedule for paper checks is much later, and those start going out on May 16th. The last batch hitting mailboxes, July 11th.

So don't fear. We put this online for you at CNN.com/AMERICANMORNING. You can find both the rebate calculator, also the payment calculator on our Web site. Again, that is CNN.com/Americanmoney. Show me the money. Show me the money, Kiran.

CHETRY: All right.

DE LA CRUZ: A lot of people are going to find out.

CHETRY: You're right. Thanks, Veronica.

DE LA CRUZ: Of course.

CHETRY: Well, we've been talking about revelations, about private behavior, and how it affects public officials and the job that they do. Newly sworn-in Governor David Paterson now admitting in an interview with the "New York Daily News" that he had an affair several years ago when he and his wife hit a rocky patch, and that they have since reconciled.

We're also hearing about a public battle of he said she said between former New Jersey Governor Jim McGreevey and his estranged wife Dina. She is denying claims by McGreevey's one-time driver that the three had a threesomes back in the late 1990s before the McGreeveys were married.

And, of course, there's then disgraced Eliot Spitzer accused of spending tens of thousands of dollars on prostitutes.

It brings us to this morning's "Quick Vote" question. If a politician is unfaithful in his or her private life, do you think that impacts their ability to be honest in public life? Cast your vote CNN.com/am. We'll have the first tally of votes coming up a little later in the hour.

And still ahead, you're watching the "Most News in the Morning." Another interest rate cut is likely to come this afternoon, but does that mean lower mortgage rates? Well, you may need to think again if you're hoping for that. We're going to talk to Ali Velshi about the impact on your wallet these rate cuts could have.

Also, the constitution guarantees the right to bear arms. But what does that really mean? The Supreme Court weighing in on the debate today with the case concerning Washington, D.C.'s longtime ban on handguns. We're live at the Supreme Court when AMERICAN MORNING comes right back.

(COMMERCIAL BREAK)

KIRAN CHETRY, CNN ANCHOR: Live picture this morning in Washington, D.C., of the United States Supreme Court. It's 45 degrees, cloudy this morning in the nation's capital. 53 degrees for a high today.

And the Federal Reserve will be meeting today expected to cut interest rates. So will that mean lower mortgage rates as well? Ali Velshi here "Minding Your Business" this morning.

Usually, you expect it, too, to sort of win concert. That hasn't been the case with the past few rate cuts.

ALI VELSHI, CNN CORRESPONDENT: And I'll tell you why. Mortgage rates, particularly the fixed mortgage rates, a 30-year or 15-year fix. Those are set in the bond market which is why usually on a day when the Fed is making an interest rate decision, I go to the Chicago Board of Trade. That's where those bonds are traded. The fed rate is set -- that's separate. That works along with the prime rates.

So right now, the fed rate is 3 percent. The prime rate is always three percentage points higher than that. So the prime rate is 6 percent. When the fed cuts rates this afternoon the prime rate will come down. So if you have any loans that are tied to prime including home equity line of credit, it might be tied to prime that will come down later today. You'll save some money.

But if you're in the fixed mortgage market, mortgage rates have actually been going up. Take a look right now at where mortgage rates stand in the United States. A 30-year fix, 6.37 percent. That's got to be about a percentage higher than it was maybe a month ago a month and a half. 15-year fixed is 5.72. But look at that one-year arm. An adjustable rate for 6.72. Makes you wonder, if you have good credit and the ability to get a fixed rate why you would go into an adjustable rate?

You would do that because you think rates are going to go down. I got to say, I wouldn't -- I'm not sure I'd be in the gambling mood, the way this economy has been going. So 6.37, it is higher than you've been able to pay in the last year for a mortgage -- for a 30- year fixed mortgage. But it is still well within the realm of a reasonable mortgage rate.

And I've been speaking to people over the course of the last week who said that they've done much better than 6 percent. You know, use a broker and see what you can do. When you see that fed rate go down this afternoon, what is going to happen? I'll tell you why the fed rate helps the economy.

What happens is when the fed cuts rates it makes money cheaper for businesses and for individuals to borrow. They borrow that money, they spend that money, they expand businesses. Business is higher people as a result of more people spending and as a result you just got more money floating around the economy. That's how a fed rate cut is supposed to help the economy.

ALINA CHO, CNN CORRESPONDENT: But you say don't take a chance and don't wait to refinance, because I'm sort of in that position right now.

VELSHI: I don't think it's worth taking a chance.

CHO: Really?

VELSHI: Mortgage rates have been trending upward in recent days, even though we think the fed might not be done cutting. So let say they cut interest rates today, they may cut again at the next meeting. But mortgage rates have been moving in the other direction. They have not moving along with fed rates. So, you know, it's one of those things, the rates pretty good right now. In the low 6s and high 5s is a good place historically for a mortgage.

And it doesn't matter -- the rate you pay on your mortgage over the long term has far more to do with the total amount that you pay for your house than the actual price. So you want a good rate more than you want a good price.

CHETRY: Very true. You don't think about it.

VELSHI: No, no. But that's a mortgage...

CHETRY: Actually, when you take a look at all the mortgage, you ultimately go, wait a minute. This is going to be...

VELSHI: I'm really buying a mortgage.

CHETRY: I'm going to end up paying this much money at the end?

VELSHI: Yes.

CHETRY: Not right.

CHO: Nothing to put a smile on your face, I bet.

CHETRY: Thanks, Ali.

CHETRY: Well, all this week, it's CNN "ISSUE #1" is the economy, your money. Tune in for "ISSUE #1" all this week. It's a special show at noon Eastern. Ali is there as well as Gerri Willis. They got some of the best business minds trying to help sort it all out for you.

Well, the Supreme Court this morning will hear arguments concerning the constitution's Second Amendment. Does it give individuals the right to own guns? Well, you would think, it would. But the issue centers on Washington, D.C.'s 32-year-old handgun ban.

Justice correspondent Kelli Arena joins us now from outside the Supreme Court. This is a case that's provoked a lot of anger and emotion, as always when you talk about gun issues, on both sides, Kelli? KELLI ARENA, CNN CORRESPONDENT: You're right, Kiran. You know, this debate over D.C.'s gun ban is a lot more than just an argument over the constitution. It really is about people's lives. And you know, I found that where you stand on this issue has a lot to do with your life experience.

(BEGIN VIDEOTAPE)

ARENA (voice-over): Drug dealers, gunshots at night, constant threats.

SHELLY PARKER, GUN RIGHT'S PLAINTIFF: I had my front window broken. I had the back window of my car broken in. I had a camera stolen off my house. It was routinely threatened as I was walking around the neighborhood with my dog.

ARENA: Shelly Parker wanted a gun for protection, to feel safe.

PARKER: I believe that the Second Amendment was written for the purpose of allowing individuals to have a gun.

ARENA: When Parker became too afraid, she moved to a safer neighborhood. But she doesn't want to live in fear again. And she still wants that gun. The problem is she lives in Washington, D.C., where handguns are banned.

Elilta Habtu lives just outside of the city and comes in often. The last thing she wants is more guns.

ELILTA HABTU, GUN CONTROL ADVOCATE: It's enough, it's more than enough. I mean, how many more lives to we have to wait before we take action?

ARENA: Habtu is a survivor of the Virginia Tech Massacre and still has a bullet lodged close to her brain. She says no one should ever have to live through what she did and is now an advocate for tighter gun laws.

HABTU: I'm still suffering in pain and mental torment from that day. I will always live with this, forever.

ARENA: Two women with a common goal, a safer city. And completely different ideas about how to get there.

(END VIDEOTAPE)

ARENA: You know, this is the first time that the Supreme Court is actually being asked to deal with the very fundamental constitutional question of whether individuals do have a right to bear arms, Kiran. We do expect a judgment by June, which should make it just in time for this issue to become a major campaign issue.

CHETRY: What do many legal experts expect the Supreme Court will do in this case?

ARENA: Well, you know, a lot of them think that they'll go somewhere right down the middle, Kiran. Where they'll say, yes, you do have an individual right to bear arms. But that reasonable amount of regulation is permissible. So in other words, still time.

CHETRY: All right. Well, we'll see what happens today. We'll certainly be watching as will many Americans. Kelli Arena, great to see you. Thanks.

ARENA: It's good to see you.

CHETRY: Alina Cho is here now with some other stories that developed overnight. We're also talking about the Supreme Court, but on a different case.

CHO: On a different case, yes. Lots of news out of the high court this morning. Kiran, good morning again. Good morning, everybody. Also new this morning, another case before the high court involves the Federal Communications Commission's ban on profanity. So interesting. 30 years ago the Supreme Court ruled that George Carlin's seven dirty word monologue was indecent. Bennett left the issue to the FCC. But Fox Broadcasting is challenging the FCC's policy after it was reprimanded when Cher and Nicole Richie both curse on it's air during award show. TV and radio stations across the country say the FCC's policy leaves them without any guidance.

New this morning in France, orders to free the traders accused of losing billions for one of France's biggest banks. Jerome Kerviel is his name. He's been held since February 8th. The bank claims he allegedly executed unauthorized trades that cost more than $7 billion. If convicted, he faces up to five years in prison plus fine.

The U.S. Secret Services investigating a security breach at a supermarket chain. The Hanford Brothers chain says more than 4 million credit and debit cards used at stores in the Northeast and Florida may be at risk. So far, 1,800 fraud cases related to the data breach have been reported. The company is advising customers to monitor their cards for any unusual transactions. Good advice.

And for the first time Olympic officials are agreeing that Beijing's dirty air could be a health risk to athletes. The International Olympic Committee will monitor the air during the games and might even postpone outdoor endurance events like the marathon and triathlon.

China has spent $17 billion since 2001 trying to clean up Beijing's polluted air. The games, by the way, begin on August 8th. And the Americans obviously, Kiran, very concerned about this. In fact, there is an article in the "New York Times" a while back saying the American athletes are going to actually wait until the last possible moment to go to Beijing.

They're going to stay in the American Complex, eat American food and they're even being advised by their trainers to wear face masks while they are there. So it's a big issue, big problem.

CHETRY: You know, your body is your instrument. You're trying to do everything you can. And you know, it's like you even trying to go for a run on a really smoggy or hot day.

CHO: That's right. And at this level, every like, fraction of a second counts. So any edge you can have. Right, you know?

CHETRY: That's why the swimmers shave their legs, even the men. Any fraction of advantage. Thanks, Alina.

CHO: You bet.

CHETRY: Well, caught on tape. A spooked horse takes off, snapping its fancy cab and galloping through the streets. Now, it was the Churchill downs. We're going to talk more about this video caught on tape. What that horse was running from as well.

Well, how about this one. Sex, lies and T.G.I. Fridays. How Dina McGreevey credibility could be crushed by allegations of threesomes with New Jersey's former governor, her ex-husband, Jim McGreevey and another man, ahead on AMERICAN MORNING.

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CHETRY: Welcome back to the most news in the morning. We have some incredible shots that caught our eye overnight that we want to show you now. One, an SUV wedge underneath a truck. This is in Sioux Falls, South Dakota. There you see, weather clearly a factor in that situation where a big rig spun out of control because the slick roads. And there was not enough time for the driver in the Chevy Blazer to do anything about it. But he was able to walk away with only a few minor injuries there. It looks a lot worse that it turn out to be.

Well, walking over tons of rubble to get to work. That's the scene in Atlanta. Bricks crushed a Lexus right in front of this man's office. It's estimated that last week's tornado may have cost more than $150 million in damage in the downtown and surrounding areas.

And this has to be some of the most amazing video of the day. This is security cameras at an America's Mart in Atlanta catching a horse sprinting down the street and we'll show it to you there so you can catch a look.

The terrified animal broke away from its fancy cab while it was trying to outrun a tornado. And there you see it galloping through the streets and the wind just whipping up everywhere. There were shattered glass, pieces of metal. The store though says that someone was able to corral that horse two blocks away after things calmed down and returned to the carriage driver. No worse for the ware. Thank goodness.

You feel bad, Rob, when you see -- you know, it's so terrifying for a person, but let alone for an animal with absolutely no idea what's going on. All's well that ends well, though.

(WEATHER REPORT)

CHETRY: Well, the high price of gas costing you more than just at the pump. At the store, at the restaurant, pretty much everywhere you're paying for the high price of gas.

We have Ed Lavandera. He is traveling on a big rig this morning to show us a little more about exactly how the costs are filtered back to you.

Hey, Ed.

ED LAVANDERA, CNN CORRESPONDENT: Hey, Kiran. Good morning. We are onboard in an 18 wheeler here taking a load from Atlanta, Georgia, to Fort Jackson, South Carolina. We had been invited onboard by Ted Kenneth (ph) here and he (OFF-MIKE) taken us along for the ride in very (OFF-MIKE) open with us and opened up the trailer.

He's going to talk to us about what life is like for you right now given the high cost of gas prices. If you think your gas prices are bad, consider having to pay $750 to fill up this tank. What's life for you now because of all that?

TED KENNETH: In combination with the weak economy, it's really -- it's very difficult because we're not able to compensate with increasing our rates to offset the higher fuel prices right now.

LAVANDERA: And essentially you're not able to charge more for the load that you would normally carry?

KENNETH: Right, (INAUDIBLE) independent truck drivers, it's called (INAUDIBLE).

LAVANDERA: We're going to keep going. We've got another couple of hours left on our trip here. We're going to slip on our trip here, Kiran, so we're going to keep pushing ahead and we'll check in with you here throughout the morning.

CHETRY: All right. Thanks a lot, Ed. Keep on tracking. We'll check in with you in a couple of minutes.

Meanwhile, a bombshell dropped at the Princess Diana inquest. A shocking accusation about Diana's butler and his actions after her death.

Also, skeletons in the closer and allegations of a third person in former New Jersey governor Jim McGreevey's marriage. Did his wife, his ex-wife now, Dina McGreevey know that her husband was a gay American? Ahead on AMERICAN MORNING.

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CHETRY: Welcome back to AMERICAN MORNING. Ten minutes before 7:00 here on the East Coast. And if you're just joining us, a look at what's making headlines this morning. A potential traffic nightmare along one of America's busiest roads. A two-mile stretch of Interstate 95 in Philadelphia is shut down this morning after inspectors found, and there you see it, a four-foot crack in a support pillar. Officials say they hope to have it repaired in two days.

A revelation this morning in the collapse of a crane here in New York that killed seven people. Investigators tell the "New York Times" it looks like a nylon strap snapped loose while the crane was lifting a six ton piece of steel that caused the entire crane to topple over. That strap cost about $50.

Tibet's exiled spiritual leader the Dalai Lama threatening this morning to step down if the violence against his followers spiral out of control. For its part, China is blaming the Dalai Lama for masterminding the protest. A deadline for protest to turn themselves in came and went yesterday. One human rights group reports that more than 600 Tibetans were rounded up by police.

And a shocker out of the Princess Diana inquest claim that Diana's butler Paul Burrell took a blood stained engagement ring off of the princess' body. Now this testimony comes from his bodyguard. He says that he never had the ring.

And new allegations this morning of marital infidelity involving New York's newly sworn in governor, David Paterson. In an interview with the "New York Daily News" admitting that he and his wife, Michelle, each had affairs when their marriage was in trouble several years ago.

The paper says the couple publicly agreed to talk about it publicly after rumors began circulating in Albany over the past few days. The New York post reports of governor will hold a news conference today also to discuss the revelations.

And the meantime, former New Jersey Governor Jim McGreevey and his estranged wife are speaking out about allegations of a third person in their sexual relationship. Dina Matos McGreevey has been commenting recently about the sex scandal that ended the career of New York governor Eliot Spitzer.

So do these new revelations cast new light on what she knew about her marriage? Well, our Alina Cho has been following this.

And boy, it takes some time to sort it all out, unfortunately.

CHO: Yes. It's a little complicated. But really at the end of the day, it involves a former driver for Jim McGreevey.

Kiran, good morning again. Good morning, everybody. You know, you couldn't turn on a TV last week literally without seeing Dina Matos McGreevey. She talked about how she could relate to what former New York governor Eliot Spitzer's wife, Silda, was going through in the wake of that scandal.

Since 2004, the McGreeveys had been in the middle of a bitter divorce battle. Dina said she never knew her husband was gay. Well, now, there are doubts.

(BEGIN VIDEOTAPE)

CHO (voice-over): Dina Matos McGreevey put herself into the media spotlight last week in the midst of the Eliot Spitzer scandal. She claimed a special understanding of the shocked wife, Silda Spitzer felt.

LARRY KING, HOST, LARRY KING LIVE: Did you see that side of your husband, Dina?

DINA MATOS MCGREEVEY, JIM MCGREEVEY'S EX-WIFE: No, I did not. Yes, I was as stunned as I believe Mrs. Spitzer was.

CHO: But was she? A former driver for ex-New Jersey governor James McGreevey gave details of what he claims was his sexual relationship with the couple. The driver, Teddy Pedersen, told the "New York Post" and "New York Star Ledger," he engaged in sexual relations with the McGreeveys from 1999 before they were married until 2001.

He said he's coming forward now because he saw Mrs. McGreevey, quote, "On television playing the victim, trying to make this a payday for herself." CNN has made repeated efforts to reach Peterson, but to no avail.

McGreevey's marriage became news in 2004 when he announced his resignation as New Jersey's governor.

JIM MCGREEVEY, FORMER NEW JERSEY GOVERNOR: My truth is that I am a gay American.

CHO: Like her husband, Mrs. McGreevey wrote a best-selling book, "Silent Partner: A Memoir of My Marriage." She issued a statement Monday saying Pedersen's sexual claims are completely false. Prompted by her estranged husband as a way to quote "Discredit me in the media."

The former governor also issued a statement saying quote, "This happened. This happened in the past." He said he had referenced the relationship in an early draft of his book, but then decided to remove it.

RAQUL FELDER, DIVORCE LAWYER: Whenever you represent a celebrity, these things do pop up.

CHO: High-profile divorce lawyer, Raqul Felder, told CNN such accusations and denials are not uncommon.

FELDER: Sometimes they're true. Sometimes somebody's smoking something funny. Sometimes people are crazy and they really believe it.

(END VIDEOTAPE)

CHO: Now, Mrs. McGreevey says her estranged husband is just trying to steal the spotlight from her. She says that just before her book was published, he issued a false claim that she knew he was gay before they were married.

So a lot of he said/she said about this one, Kiran and it won't be over for a while, because, remember, they're involved in this bitter divorce battle and in the middle of this is their 7-year-old daughter Jackie.

CHETRY: I know and that's the time when you start to feel bad about the situation.

CHO: That's right.

CHETRY: You know what I mean. It's squashed all over the papers. Everyone is talking about it. And their kids involved. And their kids involved in the situation with the Spitzer Family as well.

CHO: That's right.

CHETRY: Thanks a lot, Alina.

CHO: You bet.

CHETRY: Well, it brings us to this morning "Quick Vote" question. If a politician is unfaithful in his or her private life, do you think that impacts their ability to be honest in their public life?

Right now 62 percent of you say, yes. 38 percent say no. Cast your vote, cnn.com/am. We'll continue to tally your votes throughout the morning.

Well, you've heard a lot about performance-enhancing drug, the human growth hormone. A big one that's been talked about a lot lately. Here's a new study though showing that the athletic benefits are limited. Medical correspondent Elizabeth Cohen has a live report for us at the top of the hour.

Also, striking it rich. We'll tell you about a group of very lucky ladies in West Virginia this morning. They are a lot richer today, but still showed up to their jobs at the county tax office. A little bit more about the newest Powerball winners, still ahead.

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