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Extreme Weather Blankets Country; GOP Blocks Windfall Profits Tax; Oklahoma Police Search for Killer of Two Girls; Soccer Moms Feeling Pinch at the Pump

Aired June 10, 2008 - 13:00   ET

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

VELSHI: Clearly we are committed to covering it for you. "ISSUE #1" will be back here tomorrow, same time, 12 Eastern, right here on CNN.
WILLIS: Time now to get you up to speed on other stories making headlines. CNN NEWSROOM with Don Lemon and Brianna Keilar starts right now.

BRIANNA KEILAR, CO-HOST: Hands off the windfall. The Senate takes up a tax on the historic profits pouring into big oil, but not for long. We'll see who's got whom over a barrel.

DON LEMON, CO-HOST: And since when does big-time flooding empty a lake? Well, that wasn't the usual deluge in the Wisconsin Dells. And the weather is pretty strange in a lot of other places, too, today. There he is, our Chad Myers, keeping on top of all of it for you.

Hello, everyone. I'm Don Lemon, live here at the CNN headquarters in Atlanta.

KEILAR: And I'm Brianna Keilar. You're live in the CNN NEWSROOM.

LEMON: Extreme weather. That is our big focus for you right here today in the CNN NEWSROOM. And we have got it all covered for you right behind me. Meteorologist Chad Myers working all the angles on the weather situation.

But first we want to tell you about this. We have crews in Wisconsin. We have more homes like these -- are in danger of washing away. And more people are getting out of the way as the rivers rise. Just look at all this video.

On the East Coast, the mercury is rising. Today is promising to be another scorcher. And if you need to cool off head for the Cascades, where it's more like winter. Snow in June, plus floods and heat waves.

Chad Myers, the big question: what is going on? It's a virtual smorgasbord of weather today.

CHAD MYERS, CNN METEOROLOGIST: You've got a cold front, cold air. You've got a big trough in the west and then you have this big ridge in the east. So -- and we've had this set up for a long time. It was a brutally cold spring. (AUDIO GAP) I went there, didn't catch a fish because the water was too cold. Didn't plan on that. But anyway, that trough has been out west a long time. And it's been a hot summer, hot spring on the eastern part of the country.

And that clash between the cold and the warm has made almost a record year so far for tornadoes, at a least up to this point a record. Now, if it stops and we don't have any more tornadoes, we won't break a record. But certainly there has been its share. And big tornadoes, too.

Now up here in upstate New York, we're talking -- there's Montreal right up there. We're talking upstate New York, all up into the Adirondacks, Whiteface Mountain and the like. That's where the area is that's picking up the severe weather today. Although I think we'll probably have some storms as far south as Georgia and Alabama and probably into Florida. Had a couple of water spouts already into Florida. Boca Chica, down by Fort -- by Key West had a water spout earlier.

This one here we had on the air quite a long time, WPLG. Water spout there. Over water, didn't ever get on land, thank goodness. And the one in Boca Chica down near Key West didn't get on land either. It was about a mile offshore.

Going to be a day where we could see 15 or 20 of these, I suppose, as the storms kind of pop up during the day and during the heat of the day. We will have, obviously, severe weather in the northeast. That's where the damaging winds and maybe a tornado or two. But not too much for that -- Don.

LEMON: Yes. Good that those water spouts stayed over water.

MYERS: They're kind of fun to look at. But other than that...

LEMON: I see what you're talking about. They happen every day. But you've got to be careful.

MYERS: Sure.

LEMON: Yes. Absolutely. All right, Chad Myers.

And we had these pictures yesterday, these amazing images of homes that were just washed away. And these images right here show you, really, just the destruction, how powerful and destructive flood waters can be.

When an earthen dam gave way in a resort town in Lake Delton, Wisconsin. It's called the Dells. That's what most people refer to it. Right into the Wisconsin River. That's exactly where these homes went. Take a look at that. And swept five homes right off of their foundations. All the floodwaters, all the homeowners could do, really, was just watch.

(BEGIN VIDEO CLIP) DON KUBENICK, HOUSE SWEPT AWAY: We came up on weekends. This was like our retirement home. And there was a pier that was cantilevered over the water. That's gone. The boat's gone, brand new boat. It's just hard to believe.

TOM PEKAR, HOUSE SWEPT AWAY: It was hanging over the cliff. Everything was washed out. And it just...

(END VIDEO CLIP)

LEMON: The first person you saw in that video was Don Kubenick. He is the homeowner there. That home right there. And we hope to speak to him to find out how he's doing and his neighbors a little bit later on right here in the CNN NEWSROOM.

KEILAR: We're keeping a close eye on Wall Street, Washington and your wallet today. Oil prices are up. Democrats are up in arms over oil profits. But the Federal Reserve chief remains upbeat about the economy. It's issue No. 1, and we're bringing you special coverage all day long. So let's get right to it right now.

New developments on Capitol Hill to tell you about. Republicans there have blocked a Senate move to slap a windfall tax on oil company profits. Our Kathleen Koch has the latest. She's there to break it all down for us -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Good afternoon, Brianna.

You know, honestly, with oil prices now -- gasoline prices averaging $4 a gallon, lawmakers have been getting an earful from voters, have been wanting to show that they're taking action.

But, however, today on the Senate floor, Senate -- Senate Democrats failed by a vote of 51 to 43 to over -- to get the 60 votes they needed to overcome a Republican filibuster and begin debate on an energy plan that Democrats were pushing.

Now, the most controversial measure in the plan would have imposed a 25 percent tax on what the bill calls the unreasonable profits of the five largest oil companies.

(BEGIN VIDEO CLIP)

SEN. CLAIRE MCCASKILL (D), MISSOURI: This is like the twilight zone. This can't be real. We can't honestly be standing here and saying to the American people it's a great idea for us to keep giving them your money when they're making 83 grand a minute.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Hitting the gas companies might make for good campaign literature or even in news clips, but it won't address the problem. This bill isn't a serious response to high gas prices. It's just a gimmick.

(END VIDEO CLIP)

KOCH: Now, senators heard in testimony in hearings last week that speculation by investment banks, by hedge funds, by institutional investors and others may be responsible for as much as half of the surging price of crude oil. So one thing that some are talking about is perhaps reintroducing, as a stand-alone bill, a bill -- a measure that was part of the failed Democratic plan that would try to curb the speculation in the oil futures markets -- Brianna.

KEILAR: Kathleen, what is the argument the Republicans are giving for why they don't want to slap this windfall tax on oil companies?

KOCH: Well, it's similar to an argument you've heard from the White House that -- that right now what you need to do is be giving them ever -- encouraging the oil industry in the United States, not penalizing it, encouraging it to do more domestic exploration.

Obviously, you hear Republicans talk a lot about drilling in ANWR, drilling offshore in the United States. One of many of the different ideas they have to improve the supply of energy, of oil in the United States. That's what they're looking for more.

KEILAR: Kathleen Koch for us on Capitol Hill. Thanks, Kathleen.

KOCH: You bet.

LEMON: Well, it's not rosy, but it's not as bad as we think. That's the Fed chief -- that's what Fed chief Ben Bernanke, his latest snapshot of the economy says.

He told a Fed conference last night that, despite a recent surge in the jobless rage, the danger of a, quote, "substantial downturn" seems to have faded. He says other factors are offsetting the jobs numbers, such as interest rates, interest rate cuts and reform efforts in the credit market.

But he cautions the economy will likely be weak in the current quarter.

The economy, of course, is issue No. 1. And we bring you all the latest financial news at noon eastern. It's information you need to know on the mortgage meltdown, the credit crunch and more. "ISSUE #1," 12 p.m. Eastern, weekdays right here on CNN.

KEILAR: The economy, it is issue No. 1 with voters. So it's getting a whole lot of attention this week as John McCain and Barack Obama take their general election battle across America.

In a speech in Washington, seen live on CNN this morning, McCain vowed to get the economy back up to full strength. And he painted Obama as a tax-and-spend Democrat.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: No matter which of us wins in November, there will be change in Washington. The question is what kind of change? We do go back to the policies of the '60s and '70s that failed? Or will we go forward? Will we enact the largest single tax increase since the Second World War, as my opponent proposes, or will we keep taxes low, low for families and employers? That's a question that will be asked. This election offers Americans a very distinct choice.

(END VIDEO CLIP)

KEILAR: Well, after his speech at the National Small Business Summit, McCain headed to New York to address the Greek Orthodox Archdiocese of America.

And Barack Obama, he is making the economy the central theme of his general election strategy, and he's calling McCain's plans a continuation of President Bush's failed policies. Right now, the presumptive Democratic nominee is campaigning in Missouri, where he's also pushing his health-care plan.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Senator McCain says he supports choice, but when your employer drops your coverage because they're no longer getting a tax deduction, and no one else is on your insurance, because the tax break that he's offering doesn't even cover half of the costs of health care for the average family, you will not have a choice.

My health-care plan isn't about taking away your coverage. It's about giving people more options and thus a real choice.

(END VIDEO CLIP)

KEILAR: As part of his health-care push, Obama is spending part of the day shadowing a nurse.

LEMON: the presidential hopefuls have very different views on the economy. Let's take a look at where they stand.

Senator Barack Obama wants to ends the administration's tax cuts for upper income earners and grant a $1,000 tax cut to most families. He also calls for an end to the Iraq war and wants to invest that money in the U.S.

Senator John McCain wants to extend the administration's tax cuts. He wants to make it harder to raise taxes. And McCain proposes a variety of tax breaks for entrepreneurs and corporations. He says that will generate more jobs.

All the latest campaign news is right at your fingertips. Just go at CNNpolitics.com. We also have analysis from the best political team on television. It's all there, CNNpolitics.com.

KEILAR: Shock and sadness in a small Oklahoma town where two girls were out for a walk when they were gunned down in cold blood. Today police are searching for their killer, and we've got the latest ahead. LEMON: Luscious red, ripe tomatoes, they're the source of a new salmonella outbreak that's spreading across the country. We'll tell you what you need to know about it.

(COMMERCIAL BREAK)

LEMON: Pay attention to this one. This is really quite a disturbing story. It's about two innocent girls and some of the innocence of their small town, well, it is lost.

An Oklahoma community is trying to make sense of a double killing: two best friends shot as they took a walk together. Well, today there's word authorities may have a suspect in mind.

And we get the very latest from Darrielle Snipes of our affiliate KOCO.

(BEGIN VIDEOTAPE)

DARRIELLE SNIPES, KOCO REPORTER (voice-over): This is where they say two girls just went for a walk and then someone murdered them. It happened just a half a mile away from one of the girls' homes.

CLAUDIA FARROW, SKYLA'S GRANDMOTHER: And how can you get away with it, shooting two girls? Two friends. They were best friends.

SNIPES: Eleven-year-old Skyla Whitaker and her best friend loved having sleepovers. They had one this weekend. And they were going for a walk before Skyla's mom came to pick her up. They never made it back to the house.

STAN FLORENCE, OKLAHOMA STATE BUREAU OF INVESTIGATIONS: This apparently is a common occurrence for them to take a walk down this road, and apparently, they didn't return. One of the relatives went down, found the girls, and discovered they had been killed on the side of the road.

FARROW: We always felt like we could be safe walking up and down our road. Now I don't think anybody is safe anywhere.

SNIPES: OSBI is working on several leads. This as Skyla's mom says her death hasn't hit her yet. But adds she will miss the daughter who loved playing in the rain and always said, "I know."

FARROW: I can still hear her saying it. It used to kind of perturb me the way she's say that. But now I'll miss her saying it. I'll miss her saying, "I know." She's a great loss. No doubt.

SNIPES (on camera): Investigators continue to gather evidence, evidence they hope will lead to the murder suspect.

In Okfuskee County, Darrielle Snipes, Eyewitness News 5.

(END VIDEOTAPE)

KEILAR: In South Carolina, a 4-year-old girl is in stable condition a day after she shot herself in the chest during a shopping trip. She'd been sitting in a shopping cart when she spotted a gun in her grandma's purse, and she grabbed it. Now, Grandma, who is a county magistrate with a permit to carry a concealed weapon. So far, no charges have been filed. She is scheduled to meet with police sometime today. And family members say she is just distraught over the incident.

LEMON: Oh, my goodness.

Well, for you soccer moms and dads, no gas means no goals. We'll see how some of you are coping with record prices at the pump.

KEILAR: Uproar in India. Some flight attendants are grounded because of their weight. A judge weighs in, next, in the NEWSROOM.

(COMMERCIAL BREAK)

KEILAR: Is the U.S. in the grips of an energy crisis? Most Americans apparently don't think so.

A CNN poll conducted by Opinion Research Corporation says 24 percent of people surveyed called the cost of gas a crisis, but 59 percent think of it more like a major problem. That might be because the nation is not facing a shortage of gasoline, like it did in the 1970s.

Fifty-five percent of respondents did say they're worried about rationing and long lines. More worried about those things, in fact, than they are about higher gas prices.

And an SUV full of kids and equipment, it seems like the last thing you'd want to drive with gas prices as high as they are. But for soccer moms and dads, guzzling gas is a way of life.

Our Rusty Dornin rides along.

(BEGIN VIDEOTAPE)

DANA SCOTT, SOCCER DAD: I could use somebody else's suitcase.

RUSTY DORNIN, CNN CORRESPONDENT (voice-over): For Dana Scott, this is the final trip of a very long gas-guzzling soccer season. He's carpooling with his daughter's team 100 miles south of Atlanta for the Georgia state cup tournament.

For Scott and other parents, the final whistle has come none too soon for their wallets.

UNIDENTIFIED FEMALE: Have a great time, girl.

DORNIN (on camera): Any idea how much you spent on gas this year?

LISA ARKIN, SOCCER MOM: Oh, gosh. On soccer? I would say probably on the weekend, $100, $120.

DORNIN: And how many weekends have you been doing this?

ARKIN: Oh, gosh, every other weekend.

DORNIN (voice-over): So we went along for the ride with Scott while he filled up for the trip.

SCOTT: Run up to about $70, $75.

DORNIN (on camera): Is this going to mean that some parents aren't going to be able to have their kids in sports?

SCOTT: Definitely. You know, we've had to think about what we do with our own expenses to be able to accommodate paying the fees for the sports as well as the gas.

DORNIN (voice-over): For parents like Marie Bledsoe, there was no turning back, despite the gas pain.

MARIE BLEDSOE, SOCCER MOM: We're already fully committed in sports, and it would be hard to back out because of that. Does it put a dent in your pocket? Absolutely. Is it crazy? Yes. Should we all be carpooling more? Yes.

DORNIN: So what's a parent to do to help trim their losses?

MARY LUTZENKIRCHEN, SOCCER MOM: Not all of us go to the games now. We chaperone, and sometimes parents don't come extra. And like my family. I'll go this weekend but nobody else will.

SHANNON MOORE, SOCCER MOM: I think because, you know, our kids are a priority for us. We'll make it work somehow, but it is a concern.

DORNIN: For some players, state tournaments like this can be a springboard to more prestigious teams and the possibility of college scholarships. So whatever the penalty, the goal that makes every penny spent on gas a smart investment.

Rusty Dornin, CNN, Atlanta.

(END VIDEOTAPE)

LEMON: All right. You know what? You might be hitting more pot holes this summer than you're used to. "USA Today" says some states are delaying roadwork projects because asphalt prices are up more than 25 percent from a year ago.

Asphalt contains crude oil. So as oil prices soar, so does the cost of asphalt. That's bursting road repair budgets in states, cities and counties around the country, I should say.

It is a sign that passengers have had it with higher airfares. American Airlines and some other major carriers have rolled back a fare hike just days after they imposed it. It is the first time since March that an industry-wide increase failed to take hold.

The airlines aren't saying if fears of losing customers prompted the rollback.

And rising gasoline prices, rising food prices, rising air fares, they're dominant themes in our issue No. 1 coverage. Let's get straight to Susan Lisovicz. She's got the latest for us, on the floor of the New York stock Exchange.

And again, I just -- I hate saying it. It seems like we're, you know -- we just repeat it over and over, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, we are definitely seeing a theme here. We've seen it for a long time. The economy is issue No. 1, but what's fast becoming public enemy No. 1 is inflation.

And the big concern about inflation is that it can feed upon itself. It zaps corporate profit; it robs the consumer of the purchasing power. Now we have the top economists, Ben Bernanke, the chairman of the Federal Reserve, saying, "Yes, that's his major concern, inflation," especially the huge jump we've seen in commodities such as oils, grains, raw materials.

He was speaking last night, and it is the strongest indication yet that the Fed is completely done now cutting interest rates to help reinvigorate the slowing economy and, in fact, may raise interest rates to help fight inflation -- Don.

LEMON: All right. Well, energy prices seem to be the root of all this evil these days when it comes to the economy. There were big factor in today's major economic report, too.

LISOVICZ: That's right, Don. I mean, with all the problems that the U.S. economy faces now -- whether it's the housing crisis, the credit crunch or inflation -- one of the bright spots has been our exports, our goods and services overseas, because the dollar is so cheap.

We just got April's trade deficit, and guess what? It went up. It widened 8 percent to just under $61 billion. Why is that? Because of all that foreign oil that we import.

The U.S. tab for crude oil imports rose 17 percent to more than $29 billion. The good news is that oil prices today are down $2.50.

And on Wall Street we've actually got a rally. So we've got the right direction: oil prices moving down, stock prices moving up. The blue chips up 62 points. It's been kind of a queasy session. You know, they've been all over the map.

The NASDAQ, meanwhile, had been under pressure most of the session so far, but right now is up a couple of points, as well.

And the next hour, Don, slicing tomatoes right off the menu. The food industry's response to the salmonella scare. We'll talk about that. Now that you're done with lunch. Now that you've digested. We'll talk about that in the next hour.

LEMON: I've still got -- I've still got a little bit right here. Here it is. I've got to -- I need to check -- there it is -- see if there's any tomatoes in there. And I don't. I've got some peppers. I've got a little mushrooms.

LISOVICZ: It's a common reflex these days.

LEMON: But no tomatoes. So I think we're in good shape here. But serious business. We can't wait to see what you have to say. Thanks, Susan.

LISOVICZ: You're welcome.

KEILAR: No American beef. That is the rallying cry of tens of thousands of South Koreans. That story is next in the NEWSROOM.

LEMON: And after surviving China's devastating earthquake, unimaginable fear and the shock of what it will cost to rebuild. Next in the NEWSROOM.

(COMMERCIAL BREAK)

LEMON: Hello, everyone. I'm Don Lemon, live here at the CNN world headquarters in Atlanta.

KEILAR: I'm Brianna Keilar. You're in the CNN NEWSROOM.

It's 29 after the hour. And here are three of the stories that we're working on for you in the CNN NEWSROOM.

Emergency officials in flood-ravaged Wisconsin, they are keeping a close and wary eye on dams across the state there. Some are leaking or in danger of bursting. An earlier dam burst nearly emptied one lake, washing away houses.

Gas prices are still rising. Oil prices higher, too. AAA says the national average for unleaded gas now tops $4.04 a gallon, up two cents from yesterday's record.

And Shuttle Discovery astronauts are packing up for their trip home. They are scheduled to shove off tomorrow morning, taking along astronaut Garrett Reisman, who's ending a three-month stay on the station.

LEMON: Tough talk from President Bush and European allies today on Iran's nuclear program. They threatened stronger sanctions squeezing Iran's finances unless Tehran suspends its nuclear enrichment. The suspicion that Iran is developing nuclear weapons is a major focus of Mr. Bush's summit with European leaders today in Slovenia.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iran with a nuclear weapon would be incredibly dangerous for world peace. And so we've got to continue to work together to make it clear, abundantly clear to them that it's their choice to make. They can either face isolation or they can have better relations with all of us if they verifiably suspend their enrichment program.

(END VIDEO CLIP)

LEMON: Well, Iran is in hot water with U.N. Security Council for defying Council sanctions and continuing to enrich uranium which can be used in making nuclear weapons. Iran insists its nuclear program is for peaceful services.

KEILAR: The Oval Office, you can't get there without winning the Electoral College, that quirky system that really decides who gets to be president. Well, today we are out with the first of many CNN electoral maps. And it takes 270 electoral votes to win the election.

As things stand now, those in John McCain's safe or leaning column would give him 194 electoral votes. Well, the blue states, those favoring or leaning toward Barack Obama would give him 190 electoral votes. Battleground states in yellow could tilt the election either way.

And this map, we should tell you, it's based on analysis from the CNN political unit. It takes into account a number of factors, including polling, state voting trends, ad spending, candidate visits, and also guidance from the campaign and political strategists. We're going to be updating this regularly as the campaign develops.

LEMON: Time now to look at our "Political Ticker," and leading the ticker today, the search for number two. A lot of names are being mentioned as Barack Obama looks for the right running mate. That word from House Majority Leader Steny Hoyer, who met yesterday with two members of Obama's vice presidential search team. The two members, James Johnson and Eric Holder, also met with other Democratic leaders on Capitol Hill, including Senate Majority Leader Harry Reid.

Caroline Kennedy is the third member of the Obama search team. Barack Obama appears to have gotten a bump from Hillary Clinton's exit from the Democratic race. The latest Gallup daily tracking poll shows Barack Obama leading John McCain 48 percent to 42 percent. That is Obama's biggest lead over his Republican rival to date.

Scott McClellan heads to Capitol Hill next week to testify in the CIA leak case. President Bush's former press secretary will appear before the House Judiciary Committee. At issue, whether Vice President Dick Cheney ordered him to make misleading public statements about CIA operative Valerie Plame Wilson's identity. In his new book, McClellan says he was misled about the role of Lewis "Scooter" Libby in the 2003 leak.

Well, check out our "Political Ticker" for all the latest campaign news, just log on to cnnpolitics.com, your source for all things politics.

KEILAR: We want to take you now to Pewaukee, Wisconsin. These pictures courtesy of our affiliate WTMJ. You are looking now at Pewaukee Lake, it is spilling onto a road in Wisconsin. This is something we were talking about yesterday, and the problem there continues today, massive flooding from rain over the weekend. Yesterday we saw a lake that actually broke its banks, went into the Wisconsin River. Well, this is Pewaukee, Wisconsin, this is sort of close to the western shore of Lake Michigan.

And here we can see -- is that right? Lake Michigan?

LEMON: Yes.

KEILAR: Here we are seeing the lake actually flow into a street. This is the kind of water that people there are dealing with. We told you a short time ago that there is so much concern about dams being perhaps compromised across the state, across the region. And here you just see the water is rising so high that it's just flooding this area of Pewaukee, Wisconsin.

We're going to keep an eye on this. You can see some people walking actually through the water. You can see someone entering one of the buildings there. But this water is continuing to rise as these people deal with the aftermath of all of that rain they got over the weekend. We'll keep an eye on this, we'll bring you any updates, any video, any pictures as we get it into the CNN NEWSROOM.

A collective sigh of relief for tens of thousands of Chinese threatened by massive flooding. Officials say that engineers were successful in lowering the water level in the lake that was created by the massive earthquake in May. There had been fears that water would breach the dam and that it would flood downstream communities. Well, the water was diverted. It now -- and it did flood a few towns but residents had already evacuated at that point.

Well, imagine one minute you have everything, the next, nothing. That is really what life is like right now for millions of Chinese survivors of that deadly earthquake as they are just facing the extraordinary task of rebuilding their lives.

CNN's Eunice Yoon reports.

(BEGIN VIDEOTAPE)

EUNICE YOON, CNN CORRESPONDENT (voice-over): Broken walls and a collapsed kitchen counter are nearly all that is left of Ma Yuanyou's once-thriving restaurant in the quake-ravaged Chinese town of Dujianyeng (ph). Ma served customers at this place for over 10 years until China's massive earthquake shattered it a month ago. He now estimates it will cost him $7,000 to build again.

"This is a natural disaster," Ma says. "We just have to rebuild." Millions of people in this part of China are trying to rebuild after the May 12th earthquake devastated homes, businesses and lives. Most survivors like Ma have no insurance and hope the government will help foot the bill any way it can.

"Taxes should be lowered and maybe even waived," Ma says. "The government could help us in this way." With so many people looking for compensation, the total reconstruction bill is set to be huge. Some economists expect costs to rise to over $100 billion. Part of that will be paid for by the state, which will dole out cash to survivors and fund repairs for severely damaged dams and roads. Authorities also plan to enforce higher safety standards for public buildings, like schools, many of which collapsed during the quake, killing hundreds of children.

"For the first three years, the main task is to rebuild the infrastructure, public facilities, and houses," this government official explains, "and bring things back to normal."

The government has a lot of cash on hand to do that.

(on camera): Still some economists fear the reconstruction cost and the damage the quake has caused could make it harder for China's policy-makers to control rampant inflation.

SUN MINGCHUN, SR. CHINA ECONOMIST, LEHMAN BROTHERS: In terms of inflation, we think the impact will be larger, mainly because of two reasons, one is because of its impact on food supply, because the Chinese are major producers of food and meat in China. And the other challenge may be because of an incredible (ph) amount for raw materials, capital goods when the reconstruction is started.

YOON (voice-over): Yet to Ma and other quake survivors, the reconstruction is worth the cost of the start, no matter what the cost.

Eunice Yoon, CNN, Beijing.

(END VIDEOTAPE)

LEMON: Well, tens of thousands of South Korean protesters in the streets of Seoul, they are irate over the government's plan to resume imports of American beef. Demonstrators say the government hasn't done enough to ensure the beef is safe. The government agreed in April to lift most restrictions on U.S. beef imports. Those restrictions came over fears of mad cow disease. The prime minister and entire cabinet offered today to resign in a bid to defuse the crisis. No word yet from the president if he'll accept the offer.

There is no doubting the Internet's impact on our lives. But it is having a big impact on death, too. In Japan, an average of two people per day are killing themselves and putting others in danger with a detergent recipe found online.

CNN's Kyung Lah reports.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): A 20-year-old woman dead in her apartment in suburban Tokyo. Another 47-year-old victim dead on the 10th floor of a luxury Tokyo hotel. A 14-year-old girl found dead in her school uniform in her family's bathroom. Just a few of the cases that are now a near nightly feature on Japan's evening news, people who all killed themselves by mixing ordinary detergents to create deadly fumes using a recipe found on the Internet. It is a mix so toxic, it forces mass evacuations of nearby neighbors. "My child is OK," says this evacuated neighbor, "but we were so scared and my body was totally shaking."

Media reports number the suicides at 60 in just the last month. Japan already has one of the highest suicide rates in the world but is now grappling with this deadly new phenomenon. The government is urging Internet providers to shut down any link to suicide chatrooms and Web sites.

While we blurred the images you see here...

LAH (on camera): ... one quick search on the net and you can easily find the dangerous recipe online, even print-it-yourself warning sign telling neighbors to steer clear.

What concerns authorities is that what is needed to make this recipe can then be purchased at the local drug store.

(voice-over): The surge in these detergent suicides led the Befrienders International Suicide Hotline to expand its hours and even forward calls to four mobile phone lines. Yuzou Katou and his volunteers answer these calls around the clock. Katou's caller heard about the detergent recipe online and says she wants to kill herself. By the end of the long call, Katou has convinced the caller to think about what she's doing.

Katou says what worries him about the rash of these detergent suicides is that they're almost always successful. "This is an extremely terrible situation," says Katou, "one click on the Internet and you see thousands lining up, the information is out there, indiscriminately."

Japan's government, alarmed by the number of suicides, set a goal of cutting cases by 20 percent. But Katou says suicide in Japan is a centuries-old phenomenon, societally accepted as a solution for personal problems.

"Japan accepts death and beautifies suicide like the kamikaze," says Katou, "Japanese society needs to understand human pain and weakness." It is a societal change that will take time, one that won't happen, fears social workers, without many more of these scenes to come.

Kyung Lah, CNN, Tokyo.

(END VIDEOTAPE)

LEMON: Uproar in India, some flight attendants are grounded because of their weight. A judge weighs in, next in the NEWSROOM.

KEILAR: And raw tomatoes linked to a growing salmonella outbreak. What you need to know before dinner.

(COMMERCIAL BREAK) LEMON: All right. We have some important health news to tell about today. It could affect your next meal. A salmonella outbreak linked to three types of tomatoes has spread to 17 states, leaving 167 people sick, and the death of a cancer patient in Texas may be connected. Stores and restaurants are yanking tomatoes from their shelves and their menus. And our medical correspondent Elizabeth Cohen is here with the very latest.

And, Elizabeth, you brought the tomatoes, can we eat those or no?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: These are the OK kind ones, yes, these are OK to eat. And we're going to get to those later. Because first, I know people want to know, when I go home tonight, what should I get out of my refrigerator? Because this pertains to everyone, not just people living in those 17 states. Because produce in this country is shipped all over.

So let's look at the kinds of tomatoes that we are not supposed to be eating. "Roma," which are also called "red plum" tomatoes, they're the same thing. They are those oval tomatoes that you see there. And also "red round" tomatoes, the FDA says to avoid them.

Now the FDA adds, look, if you are absolutely positively know where your tomatoes came from, those two kinds there, and they are on the FDA safe list, then you could eat them. But that would -- be absolutely sure where they came from and then comparing it to the list on FDA's Web site. Some people would say that is way too much work. You can also just not eat those two kinds of tomatoes.

LEMON: I was trying to move -- I got in your shot, move the remote out of your tomato shot, because I know you're going to tell me which ones are safe, is that correct?

COHEN: Right.

LEMON: These are the safe ones, right?

COHEN: Right. These are the OK kind, according to the FDA. So "cherry" tomatoes, these little red round tomatoes are OK to eat according to the FDA. And also these small oval ones, these are called "grape" tomatoes. And those are OK according to the FDA. And also home-grown tomatoes or any tomatoes that are sold with the vine on, the FDA says go ahead and eat.

And the other kind, the kind you're not supposed to eat, even washing isn't necessarily going to help them because salmonella might be inside.

LEMON: OK. I saw a label on one of those. Will they be labeled? Will it tell you -- which one had -- this one has a label. Will it tell you which -- no, that may be a bar code...

(CROSSTALK)

COHEN: No. Right, exactly, that won't tell you.

LEMON: OK. All right. So how exactly do tomatoes -- how do they get contaminated with salmonella?

COHEN: All right. Because usually we think of salmonella as being something in chicken, so how does that get into tomatoes? Well, in the past when salmonella has gotten into produce, it's from a bunch of different ways.

For example, imagine you have a tomato farm next to a cow pasture. And you can then have water run-off from the cow you feces into the tomatoes. Not pretty, but that is sometimes how it happens. Or you might have salmonella contaminating a processing plant where they are putting tomatoes on some kind of a conveyer belt or in a wash. So there is a variety of ways. But this is not the first time that salmonella has contaminated produce. It has definitely happened before.

LEMON: Yes, we've been talking -- I don't know if this salmonella or E. coli what have you, it was with greens not so long ago that...

(CROSSTALK)

COHEN: Right. And salmonella on melons and -- right, all sorts of things, yes.

LEMON: OK. Thank you, Elizabeth, valuable information there.

COHEN: OK. Thank you.

LEMON: And I'll take some of those tomatoes.

COHEN: There you go.

(LAUGHTER)

LEMON: Thanks a lot.

KEILAR: Well, it's their job to protect the nation's blood supply, but the Red Cross is being criticized for doing a poor job. According to The Washington Post, the Red Cross has been socked with a $1.7 million fine after several units of red blood cells were cleaned with the wrong kind of saline solution. The charity has been fined more than $21 million in the last five years for other safety lapses. Red Cross officials say they are working to address the problems, but insist the blood supply is safe.

Well, one reason why "sex in the city" may be a bit risky. A new study shows that one in four people in New York City is infected with the virus that cause genital herpes. That is a whopping 26 percent of New Yorkers. That is compared to only about 19 percent for the rest of the nation. Herpes is a life-long sexually-transmitted infection that can cause painful genital sores, but most people don't exhibit any symptoms. The New York City Health Department study shows that the herpes rate is highest among women, African-Americans, and gay men.

LEMON: Uproar in India. Some flight attendants are grounded because of their weight. A judge weighs in, next in the CNN NEWSROOM.

KEILAR: Nature unleashed, homes and businesses torn apart when flood waters burst through an embankment. What's next for Wisconsin?

(COMMERCIAL BREAK)

LEMON: Well, the skies over India aren't too friendly for some flight attendants. They've been grounded because their boss says they are overweight. Flight attendants have sued. A court has delivered its verdict.

And CNN's Sara Sidner reports on it.

(BEGIN VIDEOTAPE)

SARA SIDNER, CNN CORRESPONDENT (voice-over): Fifty-year-old Sheela Joshi is 5'4", 148 pounds. Her employer says she is too fat to fly.

(on camera): How much has this bothered you?

SHEELA JOSHI, AIR HOSTESS: A lot. It's very demoralizing. And moreover, it's quite humiliating.

SIDNER (voice-over): For 26 years, Joshi has been an air hostess, as they're still called in India. She works for government- run Indian Airlines. But now she is grounded because the company has done away with wiggle room on weight.

(on camera): How much has this chart affected your daily life over 26 years?

JOSHI: Weight is always on my mind. After a fortnight also they can tell you that you look overweight (INAUDIBLE).

SIDNER: Have you ever had someone say, you look overweight, please go?

JOSHI: Yes, many, many times.

SIDNER: So she had to get on a scale. There used to be a forgiveness policy of plus or minus three kilos. But two years ago that policy went away. Now if you don't fit into the parameters of these pages, you could be grounded. And if so, you are not getting paid until you measure up.

(voice-over): That prompted Joshi and 12 other grounded Indian Airline hostesses to sue the airline for discrimination. The airline fought back, saying the employees knew the job requirements when they signed up and had never had a problem before.

It also argued that appearance and physical fitness was a vital part of the job.

RUPINDER SINGH SURI, INDIAN AIRLINES ATTORNEY: Safety concern is also there. The need -- because it's a high action job. And in case of emergencies, the person has to accelerate and move at a very, very fast pace.

SIDNER: None of the hostesses have been declared medically unfit, just over the weight limit. Their attorney argues it's all about kicking out older, well-paid women for younger, cheaper ones.

ARVIND SHARMA, AIR HOSTESSES ATTORNEY: They spend their entire life working for Indian Airlines, they were small girls when they came in. Now they are all 45-plus and they feel bad, yes.

SIDNER: And now they feel worse, because the Delhi high court has sided with the airline. Joshi's attorney has vowed to appeal to the supreme court. But Sheela Joshi and some of her colleagues aren't taking any chances. They are going on diets to try to get airborne again.

Sara Sidner, CNN, New Delhi.

(END VIDEOTAPE)

LEMON: Flight attendants for U.S. carriers have had their share of fights over the weight issue, as well. Weight standards have been the subject of legal battles since the mid 1970s. That's when flight attendants began fighting back, saying that weight requirement as a condition of holding their jobs was a form sex discrimination.

Well, most, if not all, U.S. airlines have relaxed rules taking the steps often after being sued. Some have replaced weight charts with performance tests. Flight attendants must show that they can move easily down the aisle and fit quickly through the cabin emergency window of small jets.

KEILAR: Forget alpha hydroxy acids, we've got the latest thing in beauty, the scoop on bird poop, ahead.

LEMON: Oh, that is nasty.

KEILAR: It kind of is. That's ahead in the NEWSROOM.

Also, want to show you some new pictures. We're going to be talking more about this ahead. These pictures from Pewaukee, Wisconsin, where a lake is just spilling into a street there. We've been seeing in Wisconsin homes and businesses torn apart from these flood waters. We're going to continue to follow this ahead in the NEWSROOM.

(COMMERCIAL BREAK)

KEILAR: They say that beauty is in the eye of the beholder, but how far would you go to get it? A case in point is the new beauty treatment in New York. It's powdered nightingale droppings. Yes, sanitized bird poop used in a facial.

It's actually an old remedy used by Japanese geishas and kabuki actors to remove their heavy makeup and rejuvenate the skin. This bird poop facial costs about $200 but it looks like it does come with a side order of tea and cookies, if you can stomach that along with your facial.

The next hour of the CNN NEWSROOM starts right now.

LEMON: Just take a look at the devastation in flood-soaked Wisconsin. Another lake finds nowhere to go but out. The water still high, and so is the danger. And our Chad Myers, well, he has all the very latest for you.

KEILAR: The Pentagon does a 180 on plans to shrink the Air Force. Our Jamie McIntyre got the word straight from the defense secretary, Robert Gates. We're going to get the story this hour from him.

LEMON: Hello, everyone. I'm Don Lemon live here at the CNN World Headquarters in Atlanta.

KEILAR: And I'm Brianna Keilar. You're in the CNN NEWSROOM.