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Campaign Code of Ethics in Running an Ethical Race; Obama Bad for Business Says John McCain; Obama Tries to Appeal to Clinton Supporters; Ken Starr Helps Fight Paparazzi; GOP Blocks Oil Tax Bill
Aired June 11, 2008 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BRUCE WEINSTEIN, ETHICS COLUMNIST, BUSINESSWEEK.COM: They use the passive voice. I'm calling on them to take the active voice, "I made a mistake." Period, end of story.
The buck should stop with the president. That's what we mean by ethics. Taking responsibility for your actions, and both candidates ought to do that. And in the end, the one who is more ethical may in fact win.
KYRA PHILLIPS, CNN ANCHOR: All right.
WEINSTEIN: But that's not the reason to do it. The reason to do the right thing is simply because it's the right thing to do.
PHILLIPS: I tell you what. Let's follow it from this point to the presidential campaign. We'll come back a couple times within this time period, and let's monitor the code of ethics.
WEINSTEIN: You got it.
PHILLIPS: All right. It's a deal. Bruce Weinstein, great to see you.
WEINSTEIN: Thanks, Kyra.
PHILLIPS: All right -- John.
JOHN ROBERTS, CNN ANCHOR: Crossing the top of the hour now, and here are this morning's top stories.
Right now, tensions rising between the United States and Pakistan. Pakistan is blaming the U.S.-led coalition for an air strike that killed 11 of its soldiers along the border with Afghanistan. A statement called it a "unprovoked and cowardly act" and said the Pakistani army reserves the right to protect its citizens against aggression. The U.S. military has not said anything about the incident.
Watching the dams. Wisconsin this morning, keeping a close eye on the state's dams. This after days of catastrophic storms.
The flooding along the Mississippi could be the worst since 1993. The forecast something nobody wants to hear, more rain. We'll get more from Rob Marciano on that coming up in just a few minutes. Big oil gets a break. Republicans blocking an attempt in slapping the top five companies with a 25 percent tax on any "unreasonable profits." The bill also would have repealed big oil's tax breaks and allowed lawsuits against OPEC. A footnote, those companies made $36 billion in profits during the first three months of this year.
Dozens feared dead. Officials in Sudan trying to figure out what caused a plane carrying 200 plus people to burst into flames right after landing. Police say the plane crashed, split in two and then blew up. But the airport director claims that the plane landed safely and then one of the engines exploded causing the fire.
And Barack Obama trying to win the support of those Clinton Democrats by sounding like a man of the people saying John McCain's healthcare plan would only help wealthy Americans.
CNN's Jessica Yellin is following all of the twist and turns in campaign '08 live from Washington this morning. It sounds, Jessica, like he's taking a page out of John Edwards' playbook...
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Right.
ROBERTS: ... this idea of two Americans.
YELLIN: That's right. First, it was John Edwards. Then Senator Hillary Clinton picked up on that message with a lot of success. You remember Senator Clinton was the one who came off of a losing streak right before the Ohio primaries, when all of a sudden, she adopted a populous message and she started winning.
Well, now, Barack Obama has adopted a very similar populous message talking about reaching out to the little guy, the working person who's really struggling these days and feeling their pain, offering a slew of economic proposals to improve their conditions. Clearly trying to go after those blue collar and working women voters that did so well for Senator Clinton.
ROBERTS: Really, Jessica, illustrating this idea of the gap and the growing -- you got many people say between the rich and the not so well off in this country. Let's listen to how he put that yesterday.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESUMPTIVE PRES. CANDIDATE: You don't have to read the stock tickers or scan the headlines in the financial sections. You just have to go to Pennsylvania and listen to the man who lost his job but can't even afford the gas to drive around and look for a new one.
(END VIDEO CLIP)
ROBERTS: He's had a problem with white working class voters in the Appalachian region. He doesn't seem to have much of a problem with them out in the northwest. But is this a message that could appeal to those voters, those people who supported Hillary Clinton and independents who he needs in places like Macomb County in Michigan to come over to his side?
YELLIN: Well, that's exactly the challenge, John, is that this is a message especially if he takes it a step further to that kind of fiery populism we heard from John Edwards and from Senator Clinton toward the end. These are messages that really resonate with that base of voters in both Pennsylvania and Ohio, rust belt people as well. That he needs to win in the general election.
But he cannot get so fiery and so sort of angry sounding as John Edwards sometimes did because that risk alienating those independent voters and even some of the disaffected Republicans that he's tried to woo over to his side. So he's going to have to achieve a sort of tricky balancing act in the next few months as he tries to hit the notes that appeal to the blue collar voters without alienating those centrist, independents and Republicans.
ROBERTS: Fine line he has to walk. We'll continue to watch it. Jessica Yellin this morning. Thanks, Jessica.
PHILLIPS: And John McCain fired back at Obama saying he's bad for business and the economy. It all comes just a day after his Democratic rival took issue with him on issue number one. Dana Bash has more from Washington now. Dana?
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: John and Kyra, John McCain has been waiting for months to go head to head with the Democratic opponent. And it's probably not a surprise that the first issue he chose to draw a sharp contrast with Barack Obama on is the issue voters care most about, the economy.
BASH (voice-over): A new twist on a time-tested Republican attack line. John McCain declared Barack Obama's economic policy's change that voters can't afford.
SEN. JOHN MCCAIN (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: Under Senator Obama's tax plan, Americans of every background would see their taxes rise.
BASH: A day after suggesting Obama's presidency would be like Jimmy Carter's, McCain conjured up memories of that era's economic anxiety.
MCCAIN: Will we go back to the policies of the '60s and '70s that failed, or will we go forward?
BASH: And slammed Obama for wanting to repeal tax cuts for upper income Americans, tax cuts McCain initially opposed.
MCCAIN: 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? BASH: McCain may be selling himself as a different kind of Republican but not on the economy. Advisers want him to stick to what they insist is winning conservative credo, free trade, low regulation and low taxes.
In fact, McCain in the past has sparred with fellow Republicans over repealing the estate tax. Now, he is hitting Obama for wanting to raise it.
MCCAIN: The estate tax is one of the most unfair tax laws on the books.
BASH: From Obama, rapid response, calling McCain misleading.
SEN. BARACK OBAMA (D), PRESUMPTIVE PRESIDENTIAL NOMINEE: Let me be clear. My tax reform plan would cut taxes for 95 percent of workers.
BASH: McCain's speech to small business owners was interrupted three times by anti-war protesters.
You know, one of the --
BASH: He wove the heckles into his pitch for joint town hall meetings with Obama.
MCCAIN: So we need the town hall meeting. You just saw the example. Let's stop yelling at each other. Let's stop having sound bites and process questions and those things.
BASH: McCain suggested he and Obama should travel to these town hall meetings together in the same plane and promised that he wouldn't fly it. It was a self-deprecating joke referring to the fact that while flying in Vietnam he got shot down. But in all seriousness, McCain advisers say they haven't heard much from the Obama camp on this joint town hall idea since it was proposed last week -- John And Kyra.
PHILLIPS: Dana Bash, thanks.
Now, what might McCain's plan mean for your money? We're going to ask former Massachusetts governor and McCain supporter Mitt Romney. That's coming up later in this hour -- John.
ROBERTS: President Bush issuing a clear warning to Iran. He's in Germany this morning, the second stop of his farewell to Europe tour, and among other things, he is threatening new sanctions if Iran does not end this disputed nuclear program. Here's what he told reporters a little more than an hour ago.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We told the chancellor my first choice, of course, is to solve this diplomatically, all options are on the table. And the first choice is to solve this problem by working closely together by sending a dual message which has been the consistent policy of this administration. And if you verifiably suspend your enrichment programs you'll end your isolation.
(END VIDEO CLIP)
ROBERTS: And while aboard Air Force One overseas, President Bush talked candidly about his legacy. He told the British newspaper he regrets the language he used in the lead-up to the Iraq war saying, "I think that in retrospect I could have used a different tone, a different rhetoric. Phrases such as 'Bring them on or dead or alive' indicated to people that I was, you know, not a man of peace."
He went on to talk about the young men and women who sacrificed their lives serving the country saying, I tried to meet with as many of the families as I can. And I have an obligation to comfort and console as best as I possibly can. I also have an obligation to make sure that those lives were not lost in vain.
PHILLIPS: Now that that severe flooding in the Midwest and desperate efforts this morning to hold back rising rivers. A major dam collapsed nearly emptying Lake Delton in Wisconsin.
Floodwaters there washing away homes and a stretch of highway. Authorities are now keeping a close eye on some 1,000 dams that they fear could burst. The situation in the Midwest could get even worse. There's concern that flooding in Indiana, Illinois, Iowa, Wisconsin and Minnesota could continue for the next three weeks.
Now, officials say dams and levees will continue to fail one by one as those flooding waters move downstream and the Mississippi River floods could be the worst actually in 15 years.
And violent storms overnight in the New York area brought back the brutal four-day heat wave that we've been feeling. The lightning storms left almost 175,000 people without power in New Jersey. The weather in the northeast expected to break today, hopefully cooling off into the high 80s.
Rob Marciano tracking all the weather for us right now. What do you think, Rob?
ROB MARCIANO, AMS METEOROLOGIST: Well, you know, cooling off is 88 degrees for a high. You know, I guess you'll take it. It was 100 degrees yesterday, a record high set at LaGuardia Airport.
And meanwhile, the flooding continues. As you mentioned, big- time problems here. Some of which could be the worst since '93. In some cases, some of the smaller rivers in Iowa, Indiana and Illinois, a couple of them, the worst flooding that they've seen since 1913. So certainly a concern.
Obviously the lines turned upside down with this, and it's going to continue. It looks like we've got another batch of moisture that's about to head into this area. Some of these brighter colors, the yellows and the reds, two, three and four inches of more rain on top of very, very saturated ground.
Here's the start of it. A couple of watch boxes for severe thunderstorms across the eastern parts of South Dakota and western parts and southwestern parts of Minnesota. And these are in effect until noon and 8:00 a.m. local time just to give you an idea of what these folks can expects. Mostly gusty winds and some hail.
By the way, the storms that rolled through the northeast yesterday, there were over 200 reports of wind and hail, and some of those wind gusts did some damage. Upwards of upper 50s for wind gusts in New York, Upstate New York. And one place in Vermont had a wind gust of 70 miles an hour.
Check out some of these daytime highs yesterday. These are record-breakers. Richmond, 101. Raleigh, 101. 100 at LaGuardia. It was 96 at Central Park, 99 degrees in Newark. In Concord, New Hampshire, even up there, you think it would be cool there, 98 degrees.
So it was steamy yesterday. Today not so bad, 88 degrees. So you can turn off the air conditioner maybe.
MARCIANO: Or maybe.
PHILLIPS: You can't do that here, that's for sure. Talking about steamy. Sweating everything else. Thanks, Rob.
You're watching the "Most News in the Morning." Up next, billboards on your bronco. Well, the company logo plastered on your car? Extreme employee loyalty for a way to beat the gas hikes.
ROBERTS: And Starr struck. Why the man who made Monica Lewinsky's blue dress famous is now the man to squish the swarming paparazzi.
PHILLIPS: And later, backing big oil. A move to tax their billions and profits now dead. We're going to speak to GOP Senator Sam Brownback who opposed the bill and stood by the oil companies. Are politics getting in the way of doing something about rising gas prices?
You're watching the "Most News in the Morning."
PHILLIPS: Coming up on the "Most News in the Morning" -- free ride.
(BEGIN VIDEO CLIP)
MISHA DI BONO, JOBING.COM: I can't imagine spending an additional $500, $400 a month.
(END VIDEO CLIP) PHILLIPS: People getting paid to fill up.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We have a waiting list for the first time this year.
(END VIDEO CLIP)
PHILLIPS: How some companies are going the extra mile to ease the pain at the pump. Ahead on the "Most News in the Morning."
ROBERTS: Coming up on the "Most News in the Morning --
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I've already paid out $9,500 more, and that's only in the first three months.
(END VIDEO CLIP)
ROBERTS: From diesel fuel to feed. Costs are up, but the price is locked in.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: You can't pass it on.
(END VIDEO CLIP)
ROBERTS: Why all that money you're spending on milk isn't making it to the farmers. Ahead on the "Most News in the Morning."
Fifteen minutes after the hour. And if it's Wednesday, there must be a new record price for gas, right?
And there is. According to AAA, the national average now $4.05 a gallon. Twenty-five states now pay more than four bucks for a gallon of regular.
With gasoline prices so high some people will do anything to save money on gas. Our Chris Lawrence explains why some people are giving their cars an extreme makeover. He's got that story for us.
CHRIS LAWRENCE, CNN CORRESPONDENT: John and Kyra, gas is so expensive. A lot of people are telling their employers, you've got to help us out here. And this is just one way that some companies are trying to do just that.
LAWRENCE (voice-over): Every day, gas gets closer to $5 a gallon. But Misha Di Bono isn't bothered, even when commuting nearly 20 miles to work in her SUV.
MISHA DI BONO, JOBING.COM: I can't imagine spending an additional $500, $400 a month in gas.
LAWRENCE: Spend it? Di Bono gets $500 a month and free gas just for driving around. In exchange, she agreed to wrap her truck in ads, a temporary sticker that turns the SUV into a rolling billboard for jobing.com, the company she works for.
DI BONO: They offer you this benefit, and right now, I mean, you would be a fool not to take advantage of it.
LAWRENCE: Across the country, commuters are asking their companies for help with high gas prices. Some are giving gas gift cards to workers.
Yahoo organizes carpools. Rewards employees who ride bikes to work. It even has an employee transportation coordinator.
BARBARY BRUNNER, VICE PRESIDENT OF MARKETING, YAHOO!: His sole purpose is devoted to helping people find the best way to transport to work.
LAWRENCE: Jobing.com says its employees are scrambling to sign up for the wrap.
UNIDENTIFIED MALE: We have a waiting list for the first time this year.
LAWRENCE: Joe Cochran (ph) says eligible employees have to drive a newer vehicle and take a driving safety course.
LAWRENCE (on camera): So you get the $500 for the wrap.
UNIDENTIFIED MALE: Right.
LAWRENCE: That includes the gas?
UNIDENTIFIED MALE: What happens is you get an extra $500 on your pay check and all of your gas paid for.
LAWRENCE (voice-over): And all needs all. Even personal trips are included.
DI BONO: I pay nothing. Yes, it's great. And I figure I earn about $500, plus $400, $500 in gas. Almost $1,000 a month extra. So it's huge. It's huge.
LAWRENCE: And if gas prices just keep going up like they have been, cars like this could be the deciding factor on whether you keep an employee, or watch her jump ship to another job -- John, Kyra.
PHILLIPS: All right. Our Chris Lawrence, thanks so much. You're watching the "Most News in the Morning." Ahead, Obama overseas. How the Democratic presidential nominee is viewed by other countries. And find out what they're saying about John McCain's foreign policy.
Also, a graduation present he hopes to keep. A high school valedictorian and his long fight against being deported.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I'm just thinking about it nonstop. I mean, what can I do when they're deporting me out of the country that I've lived in for over 14 years?
UNIDENTIFIED MALE: But a phone call just an hour after receiving his diploma --
UNIDENTIFIED FEMALE: Oh, my god. That's the good news.
UNIDENTIFIED MALE: May have changed everything.
PHILLIPS: Coming up -- shuttering the shutter bugs.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Go away!
(END VIDEO CLIP)
PHILLIPS: Hollywood looks to kick the cameramen to the curb.
(BEGIN VIDEO CLIP)
DENNIS ZINE, LOS ANGELES CITY COUNCIL: We need to protect our celebrities.
(END VIDEO CLIP)
PHILLIPS: Meet the unlikely ally brought in to push back against the paparazzi. Ahead on the "Most News in the Morning."
PHILLIPS: Remember Ken Starr, the special counsel who introduced America to that intern named Monica Lewinsky? Well, he's back and in a very unlikely place, Hollywood. His mission now, kick the paparazzi to the curb.
CNN's Carol Costello has the story.
CAROL COSTELLO, CNN CORRESPONDENT (voice-over): The paparazzi have gone wild in Los Angeles. UNIDENTIFIED FEMALE: Hey!
COSTELLO: Hollywood TV captured this feeding frenzy when fashion model Kate Moss and her small daughter arrived at LAX. It's the kind of scene that California lawmakers say must stop.
DENNIS ZINE, LOS ANGELES CITY COUNCIL: You just imagine you're a motorist driving down the street and Britney Spears parks next to you. All of a sudden, you're swarmed by these people. They've got cameras, they're jumping on the hood of my car, what are they doing?
You do not know. You don't know if you're getting carjacked. You don't know what's happening.
COSTELLO: But how do you stop a photographer hot for tabloid dollars from taking pictures of Britney Spears, whose every move, every recorded bout with mental illness, shot not on her property, but on a public street, which is perfectly legal? Hmmm, if anyone can find a solution -- it would be Ken Starr.
Yes. That Ken Starr. A man who once bitterly complained about the press himself. The independent counsel who brought us Monica Lewinsky and the stained blue dress. He's dean at the law school at Pepperdine now, and the city of Malibu along with L.A. and West Hollywood have asked him to craft legislation to restrict these pap packs (ph).
DAVID MARK, POLITICO: You know, the irony is that he was so criticized, even vilified by Hollywood liberals, Democrats 10 years ago during the Monica Lewinsky impeachment saga. Now, he's kind of aligned themselves with a lot of Malibu residents who probably disagree with him politically.
COSTELLO: But Starr has already contacted Malibu's mayor, although he's not ready to publicly comment on whether they have a plan. L.A. Councilman Zine welcomes Starr's help.
ZINE: I have a lot of respect for Ken Starr. We don't want to violate any rules. We don't want to violate the constitution. We believe that the constitution needs to be upheld. At the same time, we need to protect our celebrities.
COSTELLO: One idea -- create a buffer zone around celebrities. The problem with that is, how do you define who a celebrity is and who is not? It's a tough problem to solve, but lawmakers are willing to try -- John, Kyra.
PHILLIPS: One L.A. lawmaker also said it's stretching police resources too thin, like the time the city shelled out 25 grand for Britney Spears' police escorts.
ROBERTS: You're watching the "Most News in the Morning." Kill bill. Big oil gets a break. Republicans block an attempt at slapping the oil companies for the tax on the billions that they pocket in profits? $36 billion so far this year. We'll speak with one senator who stood by the oil companies, coming up.
Coming up on the "Most News in the Morning." Death of the dairy farm.
(BEGIN VIDEO CLIP)
SEN. BOB CASEY (D), PENNSYLVANIA: We have at least 250 dairy farms going out of existence every year.
(END VIDEO CLIP)
PHILLIPS: Why the high prices you're paying at the store aren't making it back to the barn.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: It's not a perfect system. Everybody's got these higher costs.
(END VIDEO CLIP)
PHILLIPS: An inside look at how milk gets to the market. Ahead on the "Most News in the Morning."
ROBERTS: Twenty-six minutes after the hour. And today's average price at the pump, $4.05 for a gallon of gas.
And now, a Democratic proposal to tax big oil companies on their windfall profits has been blocked by GOP senators. Are politics getting in the way of efforts to bring down the price of gasoline?
Republican Senator Sam Brownback, an opponent of the bill, joins me now from our Washington bureau. Senator Brownback, good to see you. What was the reason for blocking this bill?
SEN. SAM BROWNBACK (R), KANSAS: Good to see you, John.
The reason for blocking this bill was this wasn't a bill that's going to reduce any sort of price of gas at all. I don't know who thinks that if you raise a tax on something it's going to be cheaper to you. This is going to make it more expensive.
I think what we need to do is work in a bipartisan fashion to increase oil supply and really go with this. This is a partisan shot at the oil companies that's going to raise the price of gasoline not cut it?
ROBERTS: Why do you say it would raise the price of gasoline and not cut it? BROWNBACK: Well, you're putting a tax on it. Whenever we put a tax on things, things go up in price. They don't get -- become more available. And we tried this before with Jimmy Carter.
ROBERTS: But you're putting a tax on their profits above a certain point, so the money has already been spent. This is just money that they're taking out of the system.
BROWNBACK: We tried this in Jimmy Carter's era. This is Carter economics. And it didn't work then, it won't work now. I'm reducing the price of gas. That's what we really got to get at.
ROBERTS: But Democrats are saying that the companies could avoid these taxes on what they call windfall profits if the oil companies put that money into alternative energy sources. Wouldn't that be a good idea?
BROWNBACK: I think that would be a great idea, but a better idea would be for us to start more production in the United States. Get more oil flowing in the United States for us to be able to reduce these prices and get supply up here.
ROBERTS: Now, critics say that's a typical Republican proposal just to drill your way out of the problem when really it needs to be attacked from many different levels.
BROWNBACK: I agree it needs to be attacked from many different levels. But if you raise a tax on something, it's not going to make it cheaper. Right now, the American public is struggling -- struggling mightily with these high prices of gasoline. We need to get them down, not raise them.
The way to do that is through more production, and what we need to do is work in a bipartisan fashion on this. This isn't working bipartisan. This is just trying to make cheap shots across the ballot (ph) oil companies on things that aren't going to happen when we need to work together.
ROBERTS: There were a couple of other provisions in this bill. One of them were to roll back the $17 billion in annual tax breaks so that these five biggest oil companies get. Together, they made $36 million in profits in the first quarter of this year -- sorry, $36 billion in profits in the first quarter this year. Why do they need $17 billion in tax breaks?
BROWNBACK: I don't know that they do. And that would be something I'd be willing for to us look at and say can we get that down, but as a way also of increasing production.
John, one of the things I think we ought to do is say that if prices of gasoline hits $4.50 on average, we're going to allow the governors of the states that have oil production capacity in their states that are being pulled off the limits, whether it's offshore whether it's in Anwar, to go to their people and decide whether to open that area up for production. That's the sort of compromise you could work back and forth to get at production, to get at what some people are concerned about these tax breaks, and you work it together. That's the way you get things done, not by some partisan bill.
ROBERTS: Senator, this bill also contain new provisions to go after speculation in the oil market, which many people believe is behind a good chunk of the price increase that we've seen over these last few months. Could you support that as a separate measure?
BROWNBACK: I could. But we've got to work on that on a global basis. I've been talking about that myself because there a lot of speculation in the price of these oils. But you can't just go at it in the United States. You're going to have to do that globally or else you would just drive that oil speculation overseas. You'll drive it to the London market; you'll drive it to Dubai or somewhere else. That is something we really do need to work on but you've got to work on it in a global basis.
ROBERTS: All right. We'll keep watching this because obviously, it's going to be a huge issue in the election campaign. Senator Sam Brownback, good to see you, sir.
BROWNBACK: Thank you, John. Good to see you.
KYRA PHILLIPS, CNN ANCHOR: Half past the hour now and here's the headlines on this Wednesday morning.
The worst in 15 years, that's what some are calling the floods that continue to swamp the Midwest this morning. Wisconsin keeping a close eye on 1,000 of the state's dams. The forecast, something nobody wants to hear, more rain.
And you've been warned if you go to the Olympics in Beijing, your laptop and email devices are at risk. National security agencies are saying that Chinese agents may try to steal secrets or plant bugs to try to infiltrate America's computer networks. Equipment left unsupervised just minutes in a hotel or during a security screening can be hacked, mined and bugged. China's embassy has no comment.
And the Ford Motor Company planning to change its lineup to deal with the high price of gas. Ford, which is dependent on sales of its trucks and SUVs reportedly will change entire truck plants to build cars instead, this is happening as consumers are opting for more fuel- efficient vehicles to deal with the gas prices.
ROBERTS: Back to our developing story this morning, Pakistan is blaming the U.S.-lead coalition for an air strike that killed 11 Pakistani soldiers along the Afghan border. Our Barbara Starr has been working her sources and joins us now.
Barbara, what have you been able to find out?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well John, a U.S. official says to the best of the U.S.'s knowledge, here is what happened. Yesterday, a group of militants after conducting am ambush inside Afghanistan fled back into the border into Pakistan. They were tracked by U.S. and Pakistani military authorities. Their location, that militant location inside of Pakistan was verified by a drone, a U.S. drone flying overhead. And then, indeed, the U.S. says it send two F-15 e-fighters into this location on the Pakistani side of the border, and they dropped four bombs. The U.S. estimates seven killed on the ground. The U.S. says it was going after a militant location, all of this now, of course, a very sensitive matter after the U.S. bombed a location inside Pakistan.
ROBERTS: All right, Barbara, we'll let you keep working your sources. We'll hear back from you. Thanks.
PHILLIPS: The U.S. presidential election is creating quite a buzz around the world and in Washington, it's all the talk of the embassies. Joining us now State Department correspondent Zain Verjee.
Zain, what are those European diplomats saying about the candidates?
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, Kyra, the ambassadors here are hungry to get every detail they can during this campaign season. They're used to dealing with predictable topics of trade and defense and international treaties. Now, the European countries want their men and women in Washington to be their ears and eyes on the ground and tell them about the horse race.
Diplomats are telling us whoever wins they don't think there's going to be a whole lot of a policy difference between Senators McCain and Obama, kind of like on the big issues like Iraq, Afghanistan or Iran. That's what they say.
In Europe, there's a fascination with Obama. Diplomats are saying it's because he represents something new and they think he could improve relations with Europe but Kyra, it's all consuming for ambassadors here. Many of them are telling us, they're off to conventions this summer and making plans for that too. They're really into it and excited about it.
PHILLIPS: Well, then you've got President Bush on his last official trip to Europe. His farewell tour as it's been dubbed. What are they saying about this visit?
VERJEE: European diplomats are saying they're really looking ahead to the next president. What they want is a change in tone, approach and image. Basically, they're saying look we want a new willingness to engage and to want to win friends. They say they can still work with President Bush but don't expect any new initiatives.
PHILLIPS: All right. What about the campaign for the presidency? What are European diplomats saying about that? You know we just had the ethics guy on last hour saying, with ethics, they need to play it clean to the general election, can it happen? VERJEE: Well, the thing that - you know they get that the candidates say pretty provocative things really depending on their audience. One example they gave was both Senators McCain and Obama spoke at a conference of a pro-Israel lobby in Washington recently. And diplomats are saying they were evaluating every single word. One thing they pointed to was Senator Obama's comment that Jerusalem should remain the undivided capital of Israel. That raised a lot of eyebrows because what you said really went a lot further than even the Israelis themselves have gone on that. And what they're saying is, whoever is president may have to go back and kind of tweak a little bit about what they say because of the reality on the ground. Sorry, I ate a lot of chocolate, Kyra.
PHILLIPS: You know, that's a problem. OK. It's 7:30 in the morning, Zain.
VERJEE: I know, I know.
PHILLIPS: You have a lot of energy, though, so it works. Good to see you, Zain.
ROBERTS: Who eats a lot of chocolate at 7:30 in the morning?
PHILLIPS: Zain Verjee.
ROBERTS: Alina Cho here with other stories.
ALINA CHO, CNN CORRESPONDENT: Floss and water. Floss and water may be the solution. Good morning, guys. Good morning, everybody.
New this morning, outrage over South Korea's decision to resume imports of U.S. beef. It's fueling one of the largest anti-government demonstrations in two decades. More than 100,000 people packed the streets of Seoul. South Korea's president is now promising a, quote, new beginning after his entire cabinet offered to resign yesterday. South Korea stopped importing U.S. beef back in 2003 amid concerns of mad cow disease.
Basketball star Yao Ming is giving back to his native China. The Houston Rockets star has created a foundation in his name and personally donated $2 million. That money will be used to help rebuild the 185 schools leveled by last month's earthquake. Yao's teammates are also helping. They're donating $100,000 to his foundation. The May 12th earthquake killed more than 99,000 people. More than 70,000 are still missing.
California's decision to allow same-sex marriage is a big boom to the economy. That's according to a study by UCLA. The UCLA study predicts more than half of the state's 100,000 same-sex couples will marry in the next three years. It's incredible. The wedding services are reporting a flurry of business. The wedding surge is expected to create 2200 jobs in the state and generate $64 million in tax revenue.
And saying so long to the International Space Station. You're looking live there. Pretty picture. Astronauts from the shuttle Discovery bidding farewell to their counterparts aboard the space station. Looks like we've got a freeze issue there on that live picture. There were hugs all around, we're told, and the ceremonial closing of the hatch. They're actually expected to undock at any moment now ending a nine-day mission that included delivering a Japanese space module. The shuttle will return to Florida on Saturday weather permitting of course. Bringing back an astronaut there for three months, he said, I managed not to break anything. Happy to be home.
PHILLIPS: You mentioned the Yao Ming story, and I was reading a profile on him one time, they had pictures of him just to show how tall he was, they had him in the grocery store reaching over the aisle into the other aisle. That gives you perspective.
CHO: Did you see the woman he married?
CHO: About half his size.
CHO: Moving on --
PHILLIPS: You're watching the most news in the morning. We talk about interesting pictures and height issues.
All right, not the cash cow as the price of milk soars; find out why dairy farmers are -- well, they're not seeing a drop right now.
ROBERTS: Also, cap and gown, pomp and circumstance, a graduation day gift from Dianne Feinstein, what? The graduation that almost wasn't for one high school valedictorian. You're watching the most news in the morning.
ROBERTS: Welcome back to the most news in the morning as we're going to take you on a trip down memory lane right now. You probably noticed that the price of almost everything we buy is going up.
PHILLIPS: We noticed -- this music is kind of throwing me -- we noticed we decided to take a trip down to do a little research to see how prices have changed over the last 30 years. Let's start with a dozen of eggs. 48 cents in 1978. $2.17 today.
ROBERTS: And remember, oh, remember when a movie ticket cost a little more than 2 bucks? The average price 30 years ago, $2.34. Now, $6.88, but in New York, 10 bucks.
PHILLIPS: How about a stamp which by the way goes higher and higher which the government tries to fight inflation. 30 years ago a stamp cost 15 cents. With the recent increase, now 42 cents.
ROBERTS: When I was young, we used to walk two miles in snow --
PHILLIPS: Uphill both ways. ROBERTS: You tell that to a young person these days, they won't believe you.
Another product is soaring in price but the high cost of a gallon of milk is not helping the small dairy farmer. Kathleen Koch joins us now with that story.
KATHLEEN KOCH, CNN CORRESPONDENT: John, Kyra, with the cost of a gallon of milk rivaling the cost of a gallon of gas these days, you might think dairy farming it's a lucrative business. But in reality, many small family dairy farms are barely making ends meet.
KOCH: Ty Long has been working his family's 170-acre Pennsylvania dairy farm since he was a boy. He runs it now and says everything this year is costing a lot more. Like diesel fuel. And animal feed.
TY LONG, DAIRY FARMER: I've already paid out $9500 more than and that's only the first three months.
KOCH: And he can't up his price. Since the depression, the wholesale price of milk has been regulated by the federal government. The idea was to keep the price of such a vital commodity affordable for consumers.
And you can't just charge more for the milk?
ELEANOR LONG, DAIRY FARMER: No.
KOCH: You can't recoup it?
LONG: You can't pass it along.
KOCH: Farmers say that's partly why the number of dairy farms nationwide has dropped from more than 131,000 in 1992, to just over 59,000 today.
SEN. ROBERT P. CASEY, JR. (D), PENNSYLVANIA: In Pennsylvania, we have at least 250 and by some estimates as much as 350 dairy farms going out of existence every year.
KOCH: Senator Casey pushed for a subsidy in the farm bill to help dairy farmers cover the higher cost of feed. A group that lobbies for dairy farmers says processors, those buying milk at wholesale are eating most of the profits and should pay farmers more.
KATHY OZER, NATIONAL FAMILY FARM COALITION: So the processors themselves, the purchasers of milk in this case, should be paying a fair price that reflects a farmer's cost of production.
KOCH: Wholesale milk buyers argue they don't set the price paid to farmers. CONNIE TIPTON, INTERNATIONAL DAIRY FOODS ASSOCIATION: It's not a perfect system. Everybody's got these higher costs. Our plants are all squeezed on the costs this year just as the farmers are.
KOCH: And consumers are ultimately being squeezed at the store. The average price of milk has gone from 3.07 in January of last year to $3.80 today. That's over 20 percent or 73 cents more per gallon. And very little of that money is winding up in the pockets of farmers like Ty Long. Long hopes he'll be able to stay in business.
LONG: I like being out, I like the animals but, you know, struggles that come along sometimes, you know, it makes you think.
KOCH: Congress has authorized a commission to find a fairer way to price milk. It's unclear who that will end up benefiting, the farmer, processor or the consumer, John, Kyra?
ROBERTS: Kathleen Koch for us this morning from Washington. Kathleen, thanks.
PHILLIPS: During the Republican primary he touted his credentials as a business leader, what does Mitt Romney think of John McCain's economic policies? We're going to ask him when he joins us live. You're watching the most news in the morning.
PHILLIPS: Rob, you're going to want to listen to me, will you stay with me?
PHILLIPS: What's in name?
ROBERTS: Could be a lot.
PHILLIPS: That's right, maybe even a machete wielding killer with a thirst for blood. According to a new study out of Canada -- Canada, you know that area quite well.
ROBERTS: I've been there once or twice.
PHILLIPS: It says that names more rare like Earnest, Ivan or Malcolm are more likely to lead to trouble compared to the most popular ones like Michael, Matthew or Christopher.
So here's how they figured this out. Researchers took every male born in one U.S. state between 1987 and 1991. They assigned each name a number based on its popularity. Then they cross reference them with a juvenile justice system database starting ten years later. We decided to put ours to the test. It looks like John David Roberts, well, that turned out okay. Maybe a bit of a dark future for yours truly, Kyra "Hide the Bodies" Phillips. And it could be bad times for weather guy Rob Marciano. His name, Rob "Blunt Object" Marciano. And Ali "Alibi," you can do the math.
You look comfortable behind bars. You look great, too.
I like being with bubba in the big house there. And I hide the bodies, you're the one that comes from the Italian family my friend.
Uncle Squeaky is proud of you.
Just the first name. Who knew, huh? You're watching the most news in the morning. Now that her mom's campaign is over, what is next for Chelsea Clinton? Could it be, dare say, a political career of her own?
ROBERTS: Eight minutes now to the top of the hour, a high school valedictorian facing deportation has just received one of the best graduation gifts that he ever could have hoped for. It came from Senator Dianne Feinstein, and now his whole family may get to stay. Here's CNN's Dan Simon.
DAN SIMON, CNN CORRESPONDENT: He graduated from high school yesterday, but Arthur Mkoyan could hardly celebrate. He and his family had been ordered out of the country, forced by the federal government to leave their home in Fresno, California in just ten days.
ARTHUR MKOYAN, HIGH SCHOOL GRADUATE: It's been hectic. It's been stressful. Just thinking about it nonstop. I mean, what can I do? Being forced out of the country that I've been living in for over 14 years.
SIMON: But a phone call just an hour after receiving his diploma --
UNIDENTIFIED FEMALE: Oh, my god, that's good news.
SIMON: -- may have changed everything.
MKOYAN: I'm excited. It's amazing they're going to do this.
SIMON: It is a bill from Senator Dianne Feinstein that would halt the deportation.
This is a family that has deep roots in the community and has worked hard, the senator from California said. If it passes, the legislation would overrule the court which have consistently said the family must return to Armenia, the country Arthur's parents fled in fear shortly after the breakup of the Soviet Union. His father now jailed in an immigration detention center says he was the victim of publicly politically motivated attacks. Efforts to obtain the asylum failed.
ASMIK KARAPETIAN, ARTHUR'S MOTHER: I don't wish for my enemy to go through what I went try.
SIMON: Arthur's mother says the stress is taking its toll. Arthur is graduating were a grade point average of just over 4.0. That makes him the valedictorian of his high school class. This fall he planned to enroll in college majoring in chemistry.
GLENN STARKWEATHER, ARTHUR'S PRINCIPAL: He's very well respected by the teachers. He's one of those kids that teachers love to have in classrooms because he's inquisitive.
SIMON: Still, the odds are against Arthur and his familiar. Private bills like Senator Feinstein's rarely pass. The good news, it buys them more time as they cannot be deported while the bill goes through congress.
MKOYAN: It's crazy because I never thought I'd get this much attention.
SIMON: Call it a graduation present, he hopes he can keep.
Dan Simon, CNN, Fresno, California.
ROBERTS: Buying your vote --
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Taxes --
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Taxes --
ROBERTS: Which candidate is promising change you can put in your pocket?
Plus, weather extremes. A water spout. Flames, floods and another tornado threat adding to the misery in the Midwest ahead on AMERICAN MORNING.
JON STEWART, DAILY SHOW: Have you pondered these difficult times of the energy crisis, you might recall this exchange from a scant three months ago.
UNIDENTIFIED MALE: What's your advice to the average American who is hurting now, facing the prospect of $4 a gallon gasoline, a lot of people facing --
PRES. GEORGE BUSH, UNITED STATES: What did you just say? You're predicting $4 a gallon gas?
UNIDENTIFIED MALE: A lot of analysts are predicting $4 a gallon gasoline when they reformulate.
BUSH: That's interesting, I hadn't heard that.
PHILLIPS: That was from Jon Stewart from the "Daily Show." Republicans keep hammering back Barack Obama on the economy but with gas prices now more than $4 a gallon, do Republicans have the best plan to fix the economy?
Joining me now to discuss this, one-time presidential candidate, now McCain supporter, former Massachusetts Governor Mitt Romney.
Good to see you, sir. I don't know if you stayed up late to see "The Daily Show" but bringing it back again of course Jon Stewart giving a hard time to the president there. And there is his perception out there that the president is not in touch with reality. Does he continue to be a liability for your man, McCain?
MITT ROMNEY (R), FMR. PRESIDENTIAL CANDIDATE: You know, the president has his own strengths and his own weaknesses and will settle on his own record. But Senator McCain is an independent person, a maverick. He has his own views. They're very different from the president on a number of issues. Of course, the economy and economics, those things have similar principles that have been around for a long time. Senator McCain has been in the U.S. senate for 25 years. He understands what works and what doesn't. What he understands is Barack Obama's suggestion that with tax natural gas and coal, that does not help our energy crisis.
PHILLIPS: But, governor, let's look at just the Republican administration. We're talking about eight years now and we're seeing at more than $4 a gallon. We've got Americans out of work. We got rising oil prices. We're dealing with issues of inflation, foreclosures plaguing our country. How can you convince Americans that the Republican Party is the way to go to solve these problems?
ROMNEY: Well I think people have to look at the policies that are being proposed by both people who are running for president. It's not Republican versus Democrat. It's John McCain versus Barack Obama. Barack Obama in the last several days has said he wants to raise