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American Morning
Iran's Influence: Iran Helped Broker Iraq Cease-Fire; Fed Overnight Plan: Oversee Investment Houses; Beat the Traffic Using GPS From Other Cars
Aired March 31, 2008 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ED HENRY, CNN CORRESPONDENT: He did not mention what Treasury Secretary Henry Paulson will talk about in a couple of hours. Obviously, this massive reorganization that the Bush administration wants to see for financial regulators, give the Federal Reserve a lot more power, try to prevent another economic problem like we're seeing right now, a big economic calamity with troubled investments.
But I can tell you that Bush administration officials are already telling me they do not expect this regulation plan to pass this year. They don't think it's going to get through a Democratic Congress before Mr. Bush leaves office. So it's very unlikely that these reforms that are on the table are even going to pass, Kiran.
KIRAN CHETRY, CNN ANCHOR: Wow. All right. Ed Henry for us at the White House this morning. Thank you.
JOHN ROBERTS, CNN ANCHOR: We're also following other breaking news this morning. We are learning today that Iranian officials helped broker a cease-fire agreement between radical Shiite cleric Muqtada al-Sadr and Iraqi officials.
Joining me now is CNN senior international correspondent Nic Robertson is in Baghdad. First question, Nic, does the cease fire appear to be holding at this point?
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It does appear to be. The armed militia members that were on the streets of some of the suburbs of Baghdad and much of the city of Basra are no longer in evidence today. The curfew is gone. Some of the stores are opening in Basra.
It's the first indication of both sides here have pulled back from the brink. It's also an indication of how much pressure the Iranians have been able to put on Muqtada al-Sadr, along with the government of Prime Minister Nouri al-Maliki here, John.
ROBERTS: OK. To that point, Nic, what is this idea of Iran brokering a cease-fire between these two factions? Al-Maliki is the prime minister of Iraq. Shouldn't he be handling this?
ROBERTSON: Well, you know, there's a broad alliance of Shia (ph) parties here in Iraq that have been sort of struggling and struggling to hold themselves together more and more over the recent months. That alliance essentially broke down with this recent fighting that appears that Iran has wanted the Shias (ph) to remain united here, that they don't want massive violence right on their doorstep. And Iran has weighed in by bringing this alliance of political parties, the prime minister's political party, other Kashir (ph) party and Muqtada al-Sadr's party to Iran where Muqtada al-Sadr is believed to be at the moment to get them down around the table, to get a negotiated deal hammered out.
But it also shows how weak the prime minister is here. He went to war against Muqtada al-Sadr's militia, failed to defeat them concisively and decisively. And the Iranians have stepped in to help him save face as well. The Iranians here are in a very strong position influencing the government right now, John.
ROBERTS: So what does that mean for the long-term, Nic?
ROBERTSON: More of the same. Everyone knows that the Iranians have been arming the militias here, helping attack not just the government forces of Iraq, but also attacking the U.S. forces here as well. That military involvement is well documented by U.S. commanders here. The U.S. American politicians here very well aware of Iran's involvement in the politics here. This is the biggest manifestation we have seen so far.
The fighting over the last six days was a real, new dimension to the war here that we have this Shia parties fighting among themselves, was essentially what was happening. This is ahead of local elections coming up in October, and I think we can expect more of the same.
ROBERTS: Nic Robertson for us this morning in Baghdad. Nic, thanks very much -- Kiran.
CHETRY: We have some new developments this morning for your money. Overseas markets sinking this morning picking up where Wall Street left off Friday. Asia's major indexes down big. Tokyo's Nikkei plunging nearly two percent. Hong Kong's Hang Seng down about 1.9 percent, and the Shanghai composite also down three percent.
And on top of that, some gas prices to tell you about, hitting a new record overnight, slightly higher but still a new record. AAA saying the national average for a gallon of regular hit $3.29 a gallon. That's more than 62 cents higher than it was just a year ago.
And there's also word overnight of a high profile resignation happening today. Housing and Urban Development Secretary Alphonso Jackson expected to resign, according to this morning's "Wall Street Journal." Recently, he's been at the center of an investigation into allegations that he gave lucrative housing contracts to friends. The Democrats say Jackson is a distraction at the agency during a time when the housing crisis should be front and center.
So all of this framing the major business story of the morning, and that's the first overhaul of how banks are regulated since the Great Depression. Gerri Willis is here to explain what it means to you and me. Good morning, Gerri.
GERRI WILLIS, PERSONAL FINANCE EDITOR: Good morning, Kiran, great to see you. Yes, this would pull away a patchwork of regulation that we have dealt with really since the Great Depression and put in place something much more streamline. At the center of this, the Federal Reserve, which was so important in rescuing Bear Stearns, really a controversial action there.
What would happen is the Fed would have broad new powers to make sure that there were no systemic risks coming from investment banks which in the past have been largely unregulated. It would also consolidate many of these oversight agencies. Banks alone are regulated by as many as five federal agencies and then state agencies as well. It would create a national mortgage commission.
Now, this would go to the heart of the problem of mortgage brokers and require that they made some guidelines in their business. It would also iron out different lending rules nationwide so that all the banks would be responsible for meeting the same standards.
Of course, this is controversial. Many people will say today, I believe, it is not going far enough. Of course, Treasury Secretary Henry Paulson hasn't actually described it yet. That's coming later this morning. We did talk to him last Friday. Kiran, you talked to him, and he sort of hinted at what he might do. Here's what he had to say.
(BEGIN VIDEO CLIP)
HENRY PAULSON, TREASURY SECRETARY: Banks are very important to our overall economy. It's very important that they continue to play the role they need to play and make credit available for businesses to create jobs, for consumers to buy a home or make a college loan. And again, the effort here is first of all to encourage them to raise capital so they continue to play the role they need to be rather than shrinking their balance sheet. And so, stable, orderly markets are very important and regulators are focused on that.
(END VIDEO CLIP)
WILLIS: Stable, orderly markets are very important, Kiran, but I think this plan is going to be criticized for not doing enough to help individuals who were victims in this mortgage crisis. We had two million people last year going to foreclosure. Another nearly nine million are behind on their mortgages. They owe more than their house is worth. Lots of pain out there, and we'll see what the treasury secretary has to say later this morning.
CHETRY: Yes. It doesn't seem this is moving along very quickly either. As Ed Henry just said, even the White House acknowledging it probably will not pass by the time this administration is over.
WILLIS: Yes, it takes a long time to make big sweeping changes like this. The Democrats, though, will be making their own proposals later this week.
CHETRY: All right. Good thing it is front and center though, right? WILLIS: That's right. That's right.
CHETRY: Gerri, thank you.
WILLIS: My pleasure.
CHETRY: Well, you can watch Treasury Secretary Paulson deliver his plan this morning. It's 10:00 a.m. Eastern. It will be right here on CNN.
ROBERTS: Six minutes after the hour and turning now to the race for the White House, Barack Obama has his largest lead over Hillary Clinton for the first time this year. The Gallup tracking poll has Obama leading Clinton 52 to 42 percent now. It is the first time that either candidate has held a double-digit lead over the other since the beginning of February. Back then, Clinton led by 11 points.
And a new endorsement today for Barack Obama. Minnesota Senator Amy Klobuchar is expected to make the announcement sometime today. She is a superdelegate and the 64th superdelegate to endorse Obama since Super Tuesday. Party officials say she and Pennsylvania Senator Bob Casey had planned to stay neutral but made the endorsements after the race became more bitter.
Meanwhile, the pressure is on for Hillary Clinton to drop out of the race, but she told "The Washington Post" over the weekend she has no intention of stopping until she finishes what she started. And she told voters in Indianapolis that they need to be heard.
(BEGIN VIDEO CLIP)
SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: There are some folks saying, well, we ought to stop these elections. I didn't think we believed that in America. I thought we, of all people, knew how important it was to give everyone a chance to have their voices heard and their votes counted.
(END VIDEO CLIP)
ROBERTS: Indiana voters' voices will be heard on May 6th. Democratic Party Chairman Howard Dean agrees that Clinton should not quit. Obama also said she should stay in the race, but he did use his campaign stops in Pennsylvania to criticize his opponent.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I admire Senator Clinton. She is an intelligent and dedicated public servant. But in the debates over the last year, the major difference that I have with her is she thinks that it's OK how things work in Washington. Her basic argument is we just need to change political parties.
(END VIDEO CLIP)
ROBERTS: Meantime, two high profile Obama supporters, Senators Chris Dodd and Patrick Leahy, say Clinton is hurting the party by staying in the race.
Former President Bill Clinton was stumping for his wife in California. He told undecided superdelegates at the state convention in San Jose that they should stop worrying and just let the race play itself out.
(BEGIN VIDEO CLIP)
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: We are strengthening the Democratic Party. Chill out. We're going to win this election if we just chill out and let everybody have their say.
(END VIDEO CLIP)
ROBERTS: A third of the state's superdelegates are still undecided. Clinton met privately with more than a dozen of them before his speech.
On the Republican side, presumptive nominee, Senator John McCain, kicks off a week-long tour of America this morning. He's going to talk about his family's long military history in Meridian, Mississippi, before attending a $1,000 a plate dinner in Jackson.
McCain and his wife Cindy attended the "Wings Over Meridian" air show Sunday at McCain Field. The naval air station is named after his grandfather. McCain was once a flight instructor there. McCain's tour will swing through Virginia, Maryland, Florida and end in his home state of Arizona.
CHETRY: All right. Well, Alina Cho is here now with some more stories new this morning for us. Hey, there.
ALINA CHO, CNN CORRESPONDENT: Hey, there. Good morning, guys. Good morning, everybody.
New this morning. Emergency responders who were investigating what they thought was a wild car crash instead made a gruesome discovery. They found a man shot in the head. He later died.
It happened on a Los Angeles freeway yesterday, just hours after another driver was shot about 30 miles away. That victim survived. No word on a suspect or suspects. Investigators are looking into whether road rage may have played a role in the shootings.
Flames engulf a hardware store in Sydney, Australia. Take a look at these incredible pictures. Nearly a hundred firefighters battled that fire, sent a wall of black smoke into the sky. The store was empty at the time thankfully, and so far, no reports of serious injuries. Investigators say they have no idea what caused the fire, but there are no indications it was deliberately set.
There is new evidence this morning the cocaine industry is resurging in Peru. Take a look at that. Over the weekend, police there seized more than two tons of cocaine. They also arrested four people. That cocaine, by the way, has a street value of more than $100 million, and it was found hidden in king-sized mattresses that investigators say were headed for Europe.
A ruling from the coroner overseeing an inquest into the death of Princess Diana and her boyfriend Dodi Fayed. He says there's no evidence of a murder plot. He says there's nothing to substantiate claims by Fayed's father that British Royals or the secret intelligence service were behind the couple's death in a car crash in Paris in 1997.
Well, spring break is over for Congress and the week ahead is a busy one. Several bills already up for debate including one that would give mortgage lenders billions of dollars in loan backing, but it would also reduce those loans down to current market value that is key.
Tomorrow, Congress will also hear from the bosses of five big oil companies on why gas prices are continuing to skyrocket. Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke will also speak to Congress later this week.
And a first for the final four. Four number one seeds have made it to the last round of the NCAA men's basketball tournament. They are, drum roll, in case you don't remember, Kansas, North Carolina, UCLA, Memphis all in making this the first time since the NCAA started that seeding teams in all four number one seeds have made it to the final four in the same season.
CHETRY: It is?
CHO: It is interesting.
CHETRY: Take a look at the brackets. You know, there were underdog teams like Davidson yesterday who almost pulled out a win and then the number ones made it in the end.
ROBERTS: I haven't watched since the Duke died.
CHO: Yes. Coach K, I know. Kiran, let's hear it for Coach K.
(CROSSTALK)
CHETRY: Championship game --
CHO: What's that?
CHETRY: You did follow some of this?
CHO: I actually haven't since Coach K won with Duke, yes. But the final championship game, by the way, is next Sunday. So we can all start watching now.
CHETRY: Monday.
ROBERTS: It's Monday. CHO: Monday -- sorry, Monday.
CHETRY: All right. She's going to have it on Sunday night.
CHO: I'll be watching from Sunday all the way through Monday night.
CHETRY: Don't miss a minute. Thanks, Alina.
CHO: You bet.
CHETRY: Well, still ahead we're learning more about the role that Iran played in a possible cease fire ordered by anti-American cleric Muqtada al-Sadr. Just how much of an influence does Iran have on its neighbor? We'll try to sort that out as we talk to retired U.S. Army General George Joulwan coming up next.
(COMMERCIAL BREAK)
CHETRY: Welcome back. We have some breaking news this morning and a new sign of Iran's growing influence in Iraq. We're learning officials in Iran helped broker a cease-fire between radical Shiite cleric Muqtada al-Sadr and his militia, and Iraq's government.
Joining me to talk more about the situation in Iraq this morning, Retired U.S. Army General George Joulwan. Great to see you this morning, General.
GEORGE JOULWAN, RETIRED U.S. ARMY GENERAL: Good morning.
CHETRY: Live in Washington for us today. So we have just confirmed that indeed there was some hand at least by Iranian officials in brokering the cease fire, and we've talked before about Iran being accused by many in the military of helping fund some of these Shiite extremists in Iraq before. So what are the implications of Iran being involved in this cease-fire deal?
JOULWAN: Well, I think what is important to understand here is that what we're seeing is every bit political as it is military. I think Iran is trying to consolidate its political gains in the south and with the upcoming elections in October in Iraq, this is an opportunity to do so. And to do that, they have to consolidate all these different Shiite factions that are right now fighting one another.
CHETRY: Fighting one another and also fighting the government, right? How do you get together this government that's supposed to be inclusive and make sure that it's representative of the Iraqi people, and then you have an outside influence from another country that could be quite dangerous?
JOULWAN: Well, Iran has been that influence for many, many years, particularly in the Basra area. You have to remember that the British have greatly reduced their forces there. They're now hunkered down around the airport. And so, this is a wide open area for factions to try to gain dominance and Maliki is one Shiite faction trying to get al-Sadr which is another, and both trying to get influence in this region. And Iran, by the way, is supporting both factions.
CHETRY: Let's get back to anti-American cleric, Muqtada al-Sadr. He ordered the cease fire Sunday. How important is his cooperation for a lasting peace in Iraq?
JOULWAN: Very important. However, he has his own objectives of what he wants to see accomplished. He will talk and fight, fight and talk, and he'll still see fighting going on led by his forces, particularly --
(CROSSTALK)
CHETRY: He wants Islamic rule, right? I mean, his ultimate goal is in Iraq under Islamic rule?
JOULWAN: Yes, but under Sadr rule. I think -- I think, though, we need to be able to talk to both factions here, both the Maliki government and Sadr, in a way that tries to figure out how to get the best outcome here for our interests in the region. And in some cases, I think at some point, we need to begin discussing this with Iran and also with what President Bush is going to do in Bucharest, get our allies working with us to try to form a more comprehensive approach to this challenge we have in Iraq.
CHETRY: Yes. I mean, and that is a whole other ball of wax that's probably quite difficult to get a handle on, especially when you look at the differences in how many troops we have in Afghanistan, 31,000 plus. And the amount that everyone else has, the next highest would be about 8,000 from Britain and it just drops from there. Iraq even more unpopular in the world stage, so how do you get people to commit there?
JOULWAN: Well, you have to -- you have to figure out a way on our side to consult not just inform our allies. We've been too much just saying here is the strategy rather than having a comprehensive approach to that. And, by the way, they are in the aggregate, about 20,000 to 25,000 other than U.S. forces in Afghanistan, and there is promise of more. But we have got to develop a comprehensive strategy that links not only Afghanistan and Iraq, but what's happening in Pakistan, what's happening in southern Lebanon and between the Israelis and the Palestinians. All of that needs to be linked in a strategy if we're going to have success in the region.
CHETRY: All right. General George Joulwan, former supreme ally commander of NATO. Thanks for being with us this morning.
JOULWAN: Thank you.
ROBERTS: Coming up on 20 minutes after the hour. Also this morning, five former secretaries of state want the prison camp at Guantanamo Bay, Cuba, shut down. Madeleine Albright is one of them, and she is going to join us coming up live at our next hour. We'll also talk about Iran and Iraq with the former secretary of state. Getting through airport security check can certainly be a headache. But how about a security check that actually calms you down? What's that all about? Details of the Transportation Security Administration's new screening process just ahead on AMERICAN MORNING.
Coming up on AMERICAN MORNING, a commuter's dream. A new gadget that could help you skip the traffic.
(BEGIN VIDEO CLIP)
CHRIS LAWRENCE, CNN CORRESPONDENT: What this is telling me is that within about a mile or so, it's going to turn almost red which means I'm going to be sitting in just about gridlock.
(END VIDEO CLIP)
ROBERTS: Does it live up to the hype? Chris Lawrence takes it for a test drive ahead on AMERICAN MORNING.
(COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING. Former President Bill Clinton was stumping for his wife in California, and he told undecided superdelegates at the state convention in San Jose they should basically just stop worrying and let the race play itself out, effectively telling them to just chill out.
So it's our morning "Quick Vote" question, the ongoing battle for the Democratic nomination. Right now, 59 percent of you think it's bad for the party. Forty-one percent say it will work itself out soon.
You still have time to cast your vote, CNN.com/am. We'll tally your votes throughout the morning and read some of your e-mails on the subject as well. E-mail us CNN.com/am -- John.
ROBERTS: Twenty-four minutes after the hour, Kiran. Want to beat the traffic? Well, you may soon be able to. Thanks to your friends, your family, co-workers, even people you don't even know. A new navigation system is hitting the market that essentially uses someone else's GPS system to alert you about traffic jams ahead.
AMERICAN MORNING's Chris Lawrence tested it out. He's live along the 101 Freeway in Los Angeles this morning. So Chris, does it work?
CHRIS LAWRENCE, CNN CORRESPONDENT: Yes, it does. You know, easy to say that, John. You know, think of a social connector. You know, sort of a MySpace for my car. These GPS makers finally figured out that most of us don't need directions on a day-to-day basis. We go to the same places and we know where we're going. We just want to get there a little faster.
(BEGIN VIDEOTAPE)
LAWRENCE (voice-over): Alone in their cars, commuters are trapped in traffic. UNIDENTIFIED FEMALE: A very tough ride along. Another portion of the 405.
LAWRENCE: But a new GPS device may band them together to get through gridlock. The Dash is sort of a social network of cars, the first two-way GPS to promise realtime traffic information. Each device sends an anonymous signal back to the server, and that information is instantly shared with every other Dash on the road. What one sees, they all see.
We sent our producer out with one unit and followed about 15 minutes behind. At first, the roads are green. But as she cruises into a traffic crunch, our screen shows yellow and red lines ahead.
So even though we're driving along at 60 miles an hour right now, what this is telling me is that within about a mile or so, it's going to turn almost red which means I'm going to be sitting in just about gridlock.
That gives me time to exit and take another road. In the Dash marks surface streets just the same. It warned us about this jam 10 minutes before we got anywhere near it. Dash's Internet connection has other uses as well. Anyone online can send new addresses directly to the car. Type in a product like iPod, the search engine will find stores that sell it. And the device not only tells you where to find gas stations, it sorts them by today's cheapest price. And if someone steels the Dash --
PAUL LEGO, CEO DASH NAVIGATION: We can send the message to the device that basically turns it into a brick. And not only does it disable the software, but it also gets rid of all the addresses and everything that were on the device.
LAWRENCE: But to work perfectly, the company needs to sell a lot of units.
LEGO: It's kind of a viral thing. You know, the more people who are in the network, the better the traffic gets.
(END VIDEOTAPE)
LAWRENCE: And there's a rub. The company estimates that a few hundred units can completely cover a small town. Big cities like Atlanta, D.C. and L.A., a few thousands. Right now, the Dash is selling for 400 bucks on amazon.com, plus another $10 a month for the Internet connection -- John.
ROBERTS: Chris, that is a cool piece of technology. But let's make sure that this is a proprietary unit, right? It's not like you can get your Garmin unit or your TomTom unit and get it on the same --
LAWRENCE: No.
ROBERTS: So you've got to buy this particular unit?
LAWRENCE: No, no, no. Yes, you've got to buy the Dash and right now, it's the only one like it out there. But a lot of other companies are working on similar technologies so you expect within six to 12 months, you're going to see a lot more of these out there.
ROBERTS: That is pretty impressive. Chris Lawrence for us this morning along the 101.
LAWRENCE: Yes.
ROBERTS: Chris, thanks very much.
Wow! What do you think of that?
CHETRY: Now I know what to get you for Christmas.
ROBERTS: Absolutely. That is great.
CHETRY: I'll take your old one.
ROBERTS: You know what I need, though. I need one that shows the backup on the runway at La Guardia. That's what I need.
CHETRY: Yes, they haven't quite come up with that technology yet.
ROBERTS: Please.
CHETRY: No one's accurate.
ROBERTS: You're number 25 in line for takeoff this morning.
CHETRY: Exactly. And that's a good thing.
Well, you're watching the "Most News in the Morning," and we're following breaking news. Iran, the country the Bush administration accuses of supporting terror, playing a role in brokering a cease fire that was announced today with radical Shiite cleric Muqtada al-Sadr and the Iraqi government. The latest details coming up.
Also, Bill Clinton and Barack Obama both agree that Hillary Clinton should stay in the race. Does that mean the Democrats are headed for a convention battle? That story and today's headlines when AMERICAN MORNING returns.
(COMMERCIAL BREAK)
KIRAN CHETRY, CNN, ANCHOR: There it is this morning, a beautiful rite of spring, the cherry blossoms blooming along the tidal basin and right by the Jefferson Memorial.
JOHN ROBERTS, CNN, ANCHOR: I was at that tree yesterday.
CHETRY: That exact tree.
ROBERTS: That exact tree hanging over like that.
CHETRY: A little bit drizzly this morning, 44 degrees in Washington, D.C. in our nation's capital. More rain expected today. 55 degrees. But it's OK. There's about what, 13 more days left of the cherry blossom festival, so you'll get a chance to get out there even if today is not the most ideal day.
ROBERTS: And they're not quite yet at their peak either. But I tell you, busy day. Busy weekend actually in Washington. They had a marathon there Saturday, a kite festival, the cherry blossom festival and it was opening day for the nationals at the brand new stadium. So.
CHETRY: I'm sure traffic was one of those - one of those Chris Lawrence.
ROBERTS: Yes, you'll need one of those Chris Lawrence's devices. Absolutely.
CHETRY: Well, welcome back to AMERICAN MORNING. Glad you're with us on this Monday.
ROBERTS: Good to have you here.
New this morning, President Bush is on his way to the Ukraine as we speak. It's the first stop in a week-long visit to Eastern Europe that includes his final NATO summit. The president wants to expand the military alliance and also broaden NATO's combat role in Afghanistan. Before departing this morning, President Bush urged Congress to act on key economic measures as soon as possible.
(BEGIN VIDEO CLIP)
PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: Congress needs to pass legislation to modernize the Federal Housing Administration. Struggling homeowners are waiting on Congress to act so that the FHA can help more Americans refinance their mortgages and stay in their homes.
(END VIDEO CLIP)
ROBERTS: Congress returns today from a two-week long recess. We're also learning this morning that Iran had a hand in a ceasefire ordered by Shiite cleric Muqtada Al Sadr. An Iraqi official says a delegation of Shiite lawmakers traveled to Iran to pressure Al Sadr to order his fighters to stand down. And he did that yesterday, telling his militia members to put down their weapons, get off the streets and stop their attacks that had paralyze the capital over the last week. And this morning, after four days, Iraqi authorities have lifted a curfew that has had Baghdad on lockdown for the past four days.
The remains of a U.S. soldier listed as missing and captured in Iraq since 2004 had been found and identified. The Army says DNA tests have positively identified Staff Sergeant Keith Matt Maupin. Maupin's father says his heart sank when he heard the news. Maupin was 20 years old when his convoy was ambushed near Baghdad International Airport nearly four years ago. Maupin was seen in a hostage videotape a week after he was captured. Another tape surfaced a short time later allegedly showing a soldier being executed. The military has not confirmed the identity of the person on that tape.
CHETRY: Well, not since the great depression that we've seen such an ambitious blueprint to overhaul the way that Washington watches banks and investment firms. Treasury Secretary Henry Paulson will unveil the Bush's administration plan this morning. Paulson's proposal will rewrite the rules that have prevailed for decades. It would streamline financial regulators. Investments firms would fall under the kind of federal oversight that has long watched commercial banks and that makes the Fed kind of a super cop in charge of keeping the financial systems stable. It also irons out the different lending rules nationwide. Plan though, it's a big if, it has to pass Capitol Hill first.
So, what does it all mean for you. Well, joining me now Dean Baker, the co-director of the Center for Economic & Policy and Research. Thanks for being with us this morning, Dean.
DEAN BAKER, CTR. FOR ECONOMIC & POLICY RESEARCH: Thanks for having me on.
CHETRY: Tell us about some of the highlights and how they would be put into practice. What would we see that would change?
BAKER: Well, one of the things it does, it sets up a commission that will have oversight on the issuance of mortgages. So, presumably we went through the same sorts of problems we have been seeing over the last few years with many deceptive mortgages, which you know, to some extent is at the root of the subprime meltdown. So, that's certainly one of the positive things. There's also a merger of a number of oversight commission. So this, you know, gets rid of a lot of the duplication in the various bureaucracies that we've had dating back, you know, really since the Great Depression.
So, you know, most people don't necessarily see that but at least, you know, in principle that will allow for better oversight. So, those are some of the, you know, things that we will see. Now, one of the very big things here that we don't see is sort of a full regulation of the investment banks, the Bear Stearns, the Goldman- Sachs. That's really kind of the big issue lurking here. You know, the collapse of Bear Stearns was sort of a nuclear bomb in this picture that, you know, in principle the story with the investment banks was that these were big guys that they knew what they were doing and the markets would take care of themselves and basically we now know that's not true. The Federal Reserve Board had to step in because they said, you know, Bear Stearns failing was too big an issue. It would jeopardize the financial system, jeopardize the economy. And it's not clear if there's anything in this picture that would prevent another Bear Stearns from happening a few years down the road.
CHETRY: And meanwhile you have an industry that's fiercely opposed to any type of federal regulation saying well that's why we're not competitive on the world stage to begin with. So, there's a lot of pressure that way. And also doubtful, even the White House acknowledges that this probably won't pass during this administration. So, where does that leave the average American? BAKER: Well, this isn't going to address the current crisis. I mean, we have a real mess on our hands that stems first and foremost from the housing bubble and it's collapse and serious failures of regulation. This is not going to address that current situation. It's an opening gambit in a debate. And my best guess is we might see some very small reforms put in place this year, but this is something that's going to be dealt with by the next session of Congress and the next president.
CHETRY: I got you. And so this is looking ahead to the future. You said though that you think that even if this plan had been in effect, it wouldn't have prevented what happened with Bear Stearns. Explain why it is that some of these banks fall under regulation and some of these investment banks do not?
BAKER: Well, essentially we have this distinction between investment banks and commercial banks. Commercial banks are the ones that most of us do business with. You know, we have the savings account, a checking account, we take out a mortgage or a home equity loan. That's all business that some of the commercial bank. Those are highly regulated by the Federal Reserve Board. They have to show their books to the Fed regularly. They have to meet reserve requirements. So those are closely regulated. On the other hand, the investment banks are the ones that underwrite bond issues, stock issues. Those are largely unregulated. I won't say completely unregulated but largely unregulated. And they got themselves in a really big mess. And basically, people should understand what's happening here.
In effect what they were doing was selling insurance because one of the big issues here is credit defaults. They're a type of insurance and they sold way more than they could back and rather than let all their customers deal with the situation that they've gotten bad policies, the Feds said they would honor that. And that's, you know, basically they're selling the insurance and keeping the fees that taxpayers are the ones actually providing the insurance. So, that's a huge issue both from the stand point of economic stability and I think fairness because these are really the absolute richest people in the country and basically they're making money at the taxpayers expense.
CHETRY: All right. Something that we hear about all too often. And Dean baker, co-director for the Center of Economic & Policy Research. Thanks for being with us.
BAKER: Thanks for having me.
CHETRY: You can also watch Treasury Secretary Henry Paulson. He's going to be delivering his plan this afternoon, 10:00 a.m. Eastern, right here on CNN.
ROBERTS: Golf ball-sized hail creating a stormy mess in Oklahoma. Our Jacqui Jeras tracking extreme weather for us today. And Hillary Clinton says she is in the nomination fight until the bitter end. Is there a way that Barack Obama can deal her campaign a knockout blow well before the Democratic convention? We'll talk about that ahead on AMERICAN MORNING.
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CHETRY: Oklahoma getting pounded over the weekend with thunderstorms, heavy rain and hail across western and central Oklahoma. Officials say the storm line also spun off a tornado and funnel clouds could be seen rolling across northern Oklahoma as well. Some pretty amazing video there. Jackie Jeras is at our weather update desk tracking more extreme weather in our nation's mid section. Are they at least going to get a bit of a break today?
JACQUI JERAS, CNN, METEOROLOGIST: No, not at all. In fact, hail much larger than we just saw on that video in Pawnee, Oklahoma, the size of tennis balls. Just happened in the last hour or so. You can see the watch which remains in effect and hail is going to be the primary threat here. Our watch box starting to shave off but we might see a new one here for northeastern parts of Missouri and also into parts of Iowa.
A tornado warning still in effect for Osage in Washington County for this cell right here, that's the same one that dumped down all that hail into the Pawnee area. Now, severe weather is going to be ongoing through the day today, through the evening tonight. So be aware, greatest threat right down here into the Arklatex and we're likely going to see some tornadoes by late this afternoon as well getting in the mess. So, really widespread, the rainfall so heavy, we have been seeing as much as two inches per hour in some spots. We saw anywhere between six and ten inches of rain down here into southeastern parts of Texas, some high water rescues had to take place in San Augustine. And to just put the icing on the cake Kiran, we got heavy snow to deal with as well. This is all going to be moving into Minneapolis later on today. Six to nine inches expected. Spring may be here, but, you know, winter's still kind of hanging on.
CHETRY: Yes. Exactly. Well, tomorrow's April 1st. We'll see if we can hope for something better in the months to come. Thanks a lot, Jacqui.
ROBERTS: 43 minutes after the hour. With both candidates short of the number of delegates needed to clinch the nomination. Barack Obama and Hillary Clinton are hinting that the fight could go all the way to the convention.
(BEGIN VIDEO CLIP)
SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I thought we of all people knew how important it was to give everyone a chance to have their voices heard and their votes counted.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Senator Clinton can run as long ooze she wants. Her name is on the ballot and she is a fierce and more formidable competitor.
(END VIDEO CLIP)
ROBERTS: Senior political correspondent Candy Crowley joins me now from the crucial battleground state of Pennsylvania. She is live in the capital of Harrisburg this morning. So Candy, this idea that it's going to all the way to the convention, you know, Howard Dean was on a couple of months ago saying he doesn't want it to go all the way to the convention. Is that causing consternation in the Democratic party?
CANDY CROWLEY, CNN, SENIOR POLITICAL CORRESPONDENT: Certainly among some people, it is. We've seen the very public calls for Hillary Clinton to pack it in. You've seen Howard Dean sort of publicly wring his hands, but there are others who say, you know, let's move on with this, it's not going to be that bad. They note the record turnout, the record number of dollars that Democrats are collecting and say this will all kind of shake out in the end.
ROBERTS: Bill Clinton doesn't seem to be too worried about the length of time that this is going on. Let's listen to what he said at the California state Democratic convention over the weekend.
(BEGIN VIDEO CLIP)
BILL CLINTON, FORMER U.S. PRESIDENT: We are strengthening the Democratic party. Chill out, we're going to win this election, if we just chill out and let everybody have their say.
(END VIDEO CLIP)
ROBERTS: So he's saying chill out, which is fine because remember back in 1992, he didn't lock up the nomination until the New York primary. And that was the first week of April. But there are some other people who are saying this looks more like 1984 than it does 1992. And people remember back to 1984 when Walter Mondale lost 49 out of 50 states to Ronald Reagan.
CROWLEY: Well, and that's really one of the things the Clinton camp is hoping is their ace in the hole. That those superdelegates were put into place to make sure that people who aren't electable are not made the party nominee. So that's really where they're focusing their attention at this point. The argument of electability, what she's hoping for is that she can make a very good showing in these final ten states so that she has the momentum when you get to the end of the primary calendar.
ROBERTS: On this idea of her bowing out, Hillary Clinton or somebody from her campaign leaked some comments to the "New York Times" over the weekend that it's the big boys trying to bully her out of the race. Some people are suggesting that she's playing the gender card there and the last time she did that back in November, early December, it didn't work too well for her. Would it work this time?
CROWLEY: Well, we'll see. You know, it's interesting because her daughter Chelsea also made some remarks saying that she didn't really realize that there was still some resistance to a woman being president until someone at a crowd told her that he really couldn't see a woman being commander-in-chief. This is something that crops up from time to time in the Clinton campaign. We have done this before with various surrogates for Hillary Clinton saying, you know, they're picking on her because she's a girl, you know, that kind of thing. So, you know, they have to be very careful about playing this card because they're kind of called on a lot. And as you point out, it didn't work in December. So, but what they're looking at is these male figures coming out and saying she ought to get out of the race. Now, the senators will tell you that in fact it wouldn't matter whether she was male or female. But it is a card that as you say has been played before, John.
ROBERTS: Three weeks and one day until that critical Pennsylvania primary. And Candy Crowley for us this morning in Harrisburg. Candy, thanks as always.
CROWLEY: Absolutely.
ROBERTS: That brings us to this morning's "Quick Vote" question. Well, so what should the Democratic party do? Just chill? The ongoing battle for the Democratic nomination, we're asking you right now, 58% of you say that this prolonged primary season is bad for the party. But 42% say, hey, take a deep breath, it's all going to work itself out soon. Cast your vote at cnn.com/am. We'll continue to tally your votes throughout the morning.
CHETRY: You know, we've also been reading e-mails about our question today. And Kathleen from New Jersey writes "Obama's comment that Hillary could stay in the race is somewhat demeaning and patronizing and is not becoming of him. Hillary does not need his permission to complete the race."
ROBERTS: Alan from California says this morning, "I think that Hillary should swallow some pride and bow out for the sake of the party. I really don't want to see the Democratic party find another way to botch another election. If we screw this one up, I'm voting Republican next time."
CHETRY: Also Carl from Massachusetts writes, "if Hillary would quit now, it doesn't send a good message to the young people today. We teach our young that that when you hit a bump in the road, you don't quit. This would be a good example for them if she stay in."
ROBERTS: And to everybody who e-mailed us this morning, thanks very much. Keep those e-mails coming. We'll try to ready some a little bit later on this morning. It's always great to hear from people out there and there is no shortage of passions on both sides of this issue.
CHETRY: Exactly.
ROBERTS: That's for sure.
CHETRY: Keep writing in.
Well, the presumptive Republican nominee, Senator John McCain is kicking off his "Service to America" tour today. He will be in Mississippi this morning talking about his family's long military history before attending a $1,000 a plate dinner in Jackson. Here's a shot of him in Meridian, Mississippi yesterday, actually. The airfield named after his grandfather. McCain will travel to places in the country important to his life, including Virginia where he went to high school, Maryland where he attended the Naval Academy as well as Florida and Arizona.
Well, the Olympic torch, a symbol that usually unites the world, maybe not this year. The latest, live from Beijing as the torch arrives overnight, ahead of expected protests on China, ahead on AMERICAN MORNING.
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ROBERTS: 51 minutes after the hour. Al Gore is not running for office at this point. But he is starting a new campaign as of today. It's a $300 million ad campaign to raise awareness for global warming. The idea of the TV ads is to get the public to lean on their politicians to do something about climate change. Gore is kicking in the money that he won from his Nobel Peace Prize to help pay for the ads plus the profits from his book and movie, "An Inconvenient Truth." Kiran.
CHETRY: Well, a colorful celebration welcomed the Olympic flame to Beijing this morning. Summer's Olympic Games are a source of great pride to China, but the torch relay could actually become a source of embarrassment to China as it attracts human rights protests around the globe. CNN John Vause is live in Beijing. Sorry for the rude interruption a little earlier when the president came out, what's going on, John?
JOHN VAUSE, CNN, CORRESPONDENT: Well, today, Kiran, China did what China does really well. It was a heavily controlled carefully staged, managed ceremony for the stars of the torch relay.
(BEGIN VIDEOTAPE)
VAUSE: On Chinese soil, firmly under control, the Olympic flame was greeted at Beijing Airport by hundreds of hand-picked cheering students. Only smiling faces here, not a protester to be seen. At the same time, in Tiananmen Square, China's ever present security was working overtime. The largest public square in the world was off limits to everyone except the communist elite and a few thousand invited guests. All gathered in the same place where less than 20 years ago tanks and soldiers were sent to crush pro-democracy demonstrators.
Beijing now wants the world to see a very different China. Confident, proud and ready to take its place on the world stage.
"The flame brings the best wishes of the people of the world for a better future. And a vision of the modern Olympics movement that is peace, friendship and progress," says China's Vice-President. But after protests Tibet in recent weeks and allegations of a brutal Chinese crackdown, critics say little here has changed.
SOPHIE RICHARDSON, HUMAN RIGHTS WATCH: The events of the past two weeks look quite like they will go down in history as Tibetan's Tiananmen. VAUSE: President Hu Jintao handed the Olympic torch to Liu Xiang, a gold medalist from the last summer games and national hero for the start of a 130-day, 85,000-mile epic journey around the world and way beyond Beijing's control.
(END VIDEOTAPE)
VAUSE: Now this relay is the longest ever in Olympic history. And it seems that torch is said to become a beacon to protesters, already demonstrations are being planned by pro-Tibetan groups in London, Paris as well as San Francisco. Kiran.
CHETRY: Interestingly in San Francisco, I think the mayor said, we welcome it, we welcome people expressing their feelings about what's going on. So it will be interesting that there are some cities that may not exactly feel that way. John Vause for us in Beijing. Thank you.
ROBERTS: Police investigating a crash in Los Angeles make a surprising find. One of the drivers had been shot in the head. Who they think pulled the trigger coming up next. And five former secretaries of state, powerful voices in both parties calling for the prison camp at Guantanamo Bay to close. And to open up dialogue with Iran. We'll talk to one of them, former secretary of state Madeleine Albright joins us in our next half hour of AMERICAN MORNING. Stay with us.
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(BEGIN VIDEOTAPE)
ROBERTS (voice-over): Who's the boss? Al Sadr? Al Maliki? And a tenuous ceasefire in Iraq. Who's in charge and how real is the deal?
Ultimate sacrifice. A family hears word about their soldier son missing in action.
Caught on tape. A hostage crisis unfolds before his camera.
UNIDENTIFIED MALE: The guy started screaming. Help, help, help!
ROBERTS: This dramatic footage and the man who shot it live on this AMERICAN MORNING.
(END VIDEOTAPE)
CHETRY: Terrifying moments for that store manager.
ROBERTS: This is just an incredible scene over the weekend. Amazing, a hail of gunfire and, you know, we'll show you how that whole thing turned out.
CHETRY: Even more amazing that it was all caught on tape. And so we're going to talk to two journalists that were there actually in just a couple of minutes, but first we have some breaking news out of Iraq. CNN confirming now that Iranian officials helped negotiate a ceasefire agreement between the Iraqi government and radical Shiite cleric Muqtada Al Sadr. That deal could help bring an end to the violence that threatened to undo the recent security progress that's been made in the fledgling democracy but it may also be a sign that Iran's influence is growing.
In the last hour, I spoke with Retired U.S. Army General George Joulwan about the implications of Iran's involvement.
(BEGIN VIDEO CLIP)
GEORGE JOULWAN, RETIRED U.S. ARMY GENERAL: I think Iran is trying to consolidate its' political gains in the south and with the upcoming elections in October in Iraq, this is an opportunity to do so. And to do that, they have to consolidate all these different Shiite factions that are right now fighting one another.
(END VIDEO CLIP)
CHETRY: Let me get right to Baghdad and CNN's senior international correspondent Nic Robertson with the latest on what the scene is like there now. Hi, Nic.
NIC ROBERTSON, CNN, SENIOR INTERNATIONAL CORRESPONDENT: Hi there, Kiran. Well, there's no doubt that the last six days of fighting here has been something new. It's been fighting among these different Shia groups, Shia factions. Prime Minister Nuri Al Maliki pitting the government forces against Muqtada Al Sadr's militia on the streets of Basra and on the streets of Baghdad. Now, today, Muqtada Al Sadr's militia is nowhere to be seen. That appears to have been the result of intense pressure from Iran on Muqtada Al Sadr -- Kiran.
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