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American Morning
Hillary Clinton to Speak on Day Two of the Democratic National Convention; McCain Mocks Obama's Star Status; President Bush to Speak About Iraq's Progress; A Rare Look Inside Myanmar; EPA Chief Gets a Cold Shoulder From the White House
Aired July 31, 2008 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Let's raise fuel efficiency standards on car. Let's get plug in hybrids all across America. Let's finally free ourselves from dependence on foreign oil. That's the direction we need to go.
(END VIDEO CLIP)
JOHN ROBERTS, CNN ANCHOR: Senator Barack Obama on the campaign trail there talking about offshore drilling. And coming up in 40 minutes time, we're going to hear from Senator John McCain. He spoke about the war in Iraq during a campaign stop in Colorado.
KIRAN CHETRY, CNN ANCHOR: And it is 7:00 here on the East Coast. A look at the top stories this morning.
We now know Hillary Clinton, the senator's role at the Democratic National Convention. She'll be speaking on day two. That would be Tuesday, August 26th. It's already a landmark day for women. That night is the 88th anniversary of the ratification of the 19th Amendment which gave women the right to vote.
The FDA says it found the smoking gun in the nationwide salmonella outbreak. Investigators say that they've traced the salmonella strain to irrigation water in a batch of Serrano peppers at a Mexican farm. More than 1,300 people have been sickened since April. And you remember they originally thought tomatoes is the cause of that salmonella outbreak. It turns out it was the Serrano peppers.
Also breaking right now, an e-mail bomb threat warning of more explosions in India. This was sent to the Japanese embassy in New Delhi. Authorities say that the message warned of a bomb being planted at a popular market in the capital city. The e-mail warning comes just days after 43 people were killed in some 29 explosions that rocked two Indian cities. Police are still trying to determine if this latest threat is credible.
ROBERTS: Well, more on our top story now. Senator Hillary Clinton's night at the Democratic National Convention. Sources say that she's going to speak on Tuesday the 26th, and the vice presidential nominee will speak the night after. So does that mean that she's out as the running mate? Suzanne Malveaux joins us now live from Washington. And I guess they could always change the schedule, Suzanne. But for all intents and purposes, it looks like that it may be just her night, then the vice presidential running mate goes the next night.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, several Clinton sources tell me that Hillary Clinton will speak at the Democratic National Convention Tuesday night. She has been asked and she has accepted. She'll be on stage with all the Democratic female senators on stage with her.
They are not calling this the keynote address. It is the 88th anniversary of women's right to vote. But one supporter did tell me that Tuesday might is considered Hillary night. But those close to Hillary Clinton say that even she believes there is little chance that she's going to be picked as Obama's running mate.
(BEGIN VIDEOTAPE)
MALVEAUX (voice-over): So what happened to Hillary?
UNIDENTIFIED MALE: I see potentially a dream ticket. A dream ticket.
MALVEAUX: In Barack Obama's search for a running mate, talk of the Obama/Clinton dream team has all but disappeared.
UNIDENTIFIED MALE: Most presidential nominees don't want to be eclipsed by a running mate. And they don't want to have to worry about who really is the top of the ticket.
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: From what we can gather, she's not really on the short list.
SEN. HILLARY CLINTON (D), FORMER PRESIDENTIAL CANDIDATE: A lot of people are asking, what does Hillary want? What does she want?
MALVEAUX: Clinton's 18 million voters were once painted as the 18 million reasons Obama would want to pick Clinton for the number two spot. Clinton made it clear it was a job she'd take if asked. Her closest friends did her bidding.
UNIDENTIFIED MALE: She would certainly, as she said to some of the New York delegations, entertain the idea if it's offered.
MALVEAUX: Mindful not to disrespect Clinton or alienate her supporters, Obama insists she hasn't been ruled out.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: As I've said consistently, that I think Hillary Clinton would be on anybody's short list.
MALVEAUX: But as the short list gets shorter, the political calculations seem a little more clear.
BORGER: Hillary Clinton would be in the ticket if Barack Obama's campaign felt that they were in some trouble with the voters that she brings. The older women, those voters in rural America, battleground states. They don't think they're in trouble there. So they probably don't think they need her.
MALVEAUX: Perhaps not as a running mate, but certainly as an advocate in the battleground states like Pennsylvania and Ohio where Clinton triumphed.
UNIDENTIFIED MALE: Hillary Clinton can be perhaps Barack Obama's best advocate right now.
MALVEAUX: She is now fully engaged in talks with the Obama team to hit the campaign trail in the next several weeks.
BORGER: Hillary Clinton can't afford to do anything other than support Barack Obama 150 percent.
UNIDENTIFIED MALE: She does not want to be blamed if he loses.
MALVEAUX: At the same time, the buzz is intensifying over who could be a running mate capable of bringing in Clinton voters.
UNIDENTIFIED MALE: The person who's best positioned to attract these older, over 55 women who supported Hillary Clinton is Evan Bayh.
(END VIDEOTAPE)
ROBERTS: Senator Clinton is expected to be joined by all of her fellow female senators on stage at the convention. Again, that night, Tuesday, August 26th.
CHETRY: Well, the McCain campaign seems to be turning up the heat on Barack Obama. Several new attack ads try to paint Obama as out of touch with the public, even comparing him to Britney Spears and Paris Hilton in one ad.
Our Dana Bash reports on this new campaign strategy.
DANA BASH, WHITE HOUSE CORRESPONDENT: The McCain campaign is pursuing what some fellow Republicans call a risky strategy. They're using campaign cash to highlight and even embrace Barack Obama's broad appeal while trying to turn it into a negative trait.
(BEGIN VIDEOTAPE)
BASH (voice-over): On the stump, rapid fire attacks on Barack Obama's policies.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: He wants to raise your taxes to pay for bigger government. We've been doing that for years and it hasn't worked.
BASH: Yet on the air --
(BEGIN VIDEO CLIP, CAMPAIGN COMMERCIAL)
NARRATOR: He's the biggest celebrity in the world.
(END VIDEO CLIP)
BASH: John McCain is now comparing his rival to Britney Spears and Paris Hilton, mocking him as a vapid celebrity.
(BEGIN VIDEO CLIP, CAMPAIGN COMMERCIAL)
NARRATOR: But is he ready to lead?
(END VIDEO CLIP)
BASH: With this new ad, McCain strategists are trying to channel their frustration with the attention Obama gets into a hit on his readiness and seriousness.
VOICE OF RICK DAVIS, MCCAIN CAMPAIGN MANAGER: Is much more something you expect from someone releasing a new movie than running for president.
BASH: McCain advisers say they are convinced Obama comes across as arrogant and are trying to capitalize on that.
VOICE OF STEVE SCHMIDT, SENIOR MCCAIN ADVISER: This is a close election. We've seen much presumption from the Obama campaign.
BASH: But a new CNN/Opinion Research poll shows McCain advisers may be wrong on that. Only 37 percent say they view Obama as arrogant, pretty close to what they say about John McCain. The Obama campaign responded to McCain's new ad by accusing him of "a steady stream of false, negative attacks. Some might say, Oops, he did it again."
This is the latest in a series of McCain attack ads against Obama.
(BEGIN VIDEO CLIP, CAMPAIGN COMMERCIAL)
NARRATOR: He hadn't been to Iraq in years. He voted against funding our troops.
(END VIDEO CLIP)
BASH: And much sharper rhetoric.
MCCAIN: Bottom line is that Senator Obama's words for all their eloquence and passion don't mean all that much.
BASH: Even some of McCain's allies worry he's going too far.
CRAIG FULLER, REPUBLICAN STRATEGIST: I think people are sort of set back and maybe got back on their heel a little bit and said, gee, that's not exactly what we want to see, even those of us who are in the Republican Party.
BASH (on camera): But McCain campaign sources say they're pursuing their current strategy with a very specific target in mind. Blue collar and small town voters whom they think are turned off by what one senior McCain adviser called Obama's narcissism.
Dana Bash, CNN, Washington.
(END VIDEOTAPE)
CHETRY: The Obama campaign is out with a new ad in response. It compares McCain not to Britney Spears and Paris Hilton but to President Bush. Take a look.
(BEGIN VIDEO CLIP, CAMPAIGN AD)
NARRATOR: John McCain. His attacks on Barack Obama, not true. False. Baloney. The low road. Baseless. John McCain. Same old politics, same failed policies.
(END VIDEO CLIP)
CHETRY: At a campaign stop in Missouri, Obama explained what he thinks about the McCain campaign strategy.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: And so, the only way they figure they're going to win this election is if they make you scared of me. So what they're saying is, well, we know we're not very good but you can't risk electing Obama. You know, he's new. He doesn't look like the other presidents on the currency.
(END VIDEO CLIP)
CHETRY: Well, Obama continues to make his case to voters, holding a town hall meeting in Cedar Rapids, Iowa, later today.
ROBERTS: And less than an hour from now, President Bush is expected to make a statement on Iraq. The White House was hoping for an agreement on a long term U.S. troop presence in Iraq by today.
Our White House correspondent Elaine Quijano is standing by. Elaine, it doesn't look like they're going to get that agreement by today? Do we have any idea what the president will say?
ELAINE QUIJANO, WHITE HOUSE CORRESPONDENT: Yes. Well, you know, the White House had been really trying to lower expectations about meeting this self-imposed target date, really, for a long-term security agreement. A senior administration official this morning says that negotiations on that front are continuing. So we're not expecting any kind of breakthrough announcement by President Bush when he speaks in about an hour.
What we are expecting to hear from the president is an update on conditions on the ground, his view on current operations that are taking place, as well as his view on security and legislative progress that's taken place in Iraq. Now keep in mind, though, this is coming after the White House earlier this month gave Iraqi Prime Minister Nouri al-Maliki some political running room, if you will, for his own domestic audience. President Bush allowing for a shift in language for a general time horizon when it comes to withdrawing U.S. troops.
Now, again, we're going to hear the president likely talk about how security has improved enough in that country, how Iraqis themselves have stepped up to the plate in terms of their own security responsibilities, thus allowing the White House to even talk about a time horizon, something you know, John, the White House had been loathe to do until now.
ROBERTS: Right. Exactly, with Nouri al-Maliki saying maybe it's not a bad idea. We'll see if the president modifies that stance at all.
Elaine Quijano for us from the White House this morning. Elaine, thanks.
And we're going to carry the president's statement live at 8:05 Eastern right here on the "Most News in the Morning." So make sure that you stay with us.
CHETRY: And here's a look at what we're working on for you later this morning.
A thousand suitcases missing. Passengers going nowhere. A luggage glitch that ruined a lot of people's day at JFK Airport. We'll tell you what happened.
ROBERTS: And the head of the EPA is accused of ignoring science and taking his cues on global warming from the Bush administration. We'll talk with the man who is making those allegations.
(COMMERCIAL BREAK)
ROBERTS: Coming up now on 13 minutes after the hour. Welcome back to the "Most News in the Morning."
Today's business headlines now, a rally on Wall Street for the second day in a row. The Dow gained 186 points despite a jump in the price of oil. This morning's stock futures are pointing to a slightly lower open.
It's a coffee break for Starbucks. The coffee chain said it lost almost $7 million in the last quarter. Earlier this month Starbucks said it would close 600 stores in the United States and eliminate almost a thousand jobs.
And miles for cash. Airlines in the red are trying to get in the black by selling frequent flyer miles to credit card issuers. They will be awarded to credit card customers later. But you could be hurt because by the time you get those miles many airlines will have already cut the number of flights making those miles harder to redeem. CHETRY: Always a catch. Well, a sea of baggage. Passengers still sitting, waiting and seething at JFK Airport in New York City. American Airlines had to cancel at least five flights this morning because of a computer glitch that has crippled their baggage system.
It happened yesterday. Flights that have taken off have done so late and in many cases with just 10 to 20 percent of the luggage on board. Needless to say, passengers are furious.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Very frustrated. And it's unacceptable to me. There's nothing I can do about it. I can't fight them. They have you hung up to dry and the luggage (ph).
(END VIDEO CLIP)
CHETRY: The airline now sorting these bags by hand. That backup has left the terminal brimming with piles of unclaimed luggage.
An I-reporter named Norman Robinson sent this video of the mess at JFK. He says he was just trying to go home to see his wife and arrived to this after already missing his flight once and then being placed on standby twice in 24 hours. Doesn't it just make your blood pressure rise, John, just looking at that video? Wow.
ROBERTS: You know, anybody who's ever tried to get a bag out of an airline, oh, my goodness. It's just one of the most difficult things, the most frustrating things you could go through. All those people.
It's called red shirting. More and more parents deciding to wait an extra year to enroll their kids in kindergarten. Now a new study says it may not be such a good idea.
And building a bridge over troubled water. Rescue teams finally reach stranded flood victims. But first, Rob's watching the extreme weather for us this morning and we're talking hot, hot, hot. Hey, Rob.
ROB MARCIANO, AMS METEOROLOGIST: Hi, John. Yes, big time heat across the northeast down to the southern plains. And we've got some nasty thunderstorms with some damage heading to Minnesota. Complete weather coming up when AMERICAN MORNING comes right back.
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CHETRY: Well, there you see it, and there you don't. This is the end of the Spyglass Resort. This is in Clearwater, Florida. They used 500 sticks of dynamite to bring it down; 20,000 fans, by the way, showed up. Not just to watch an implosion but to watch illusionist Criss Angel escape from the rubble.
He's a magician, an illusionist, who called this the most challenging escape ever and the most dangerous thing he's ever attempted in his career. He said that he had to escape from 4,500 tons of concrete and that he was handcuffed to the seventh floor balcony. He made it out.
Well, wildfire threatening homes outside of Yosemite National Park is now 40 percent contained. Firefighters say they made critical gains and they hope that better weather in the coming days will make them, make even more gains. Hundreds of residents are now returning to their homes.
And building a bridge to save 70 stranded people. Rescue teams finally reaching the last remaining victims of weekend flooding sparked by Hurricane Dolly's remains in New Mexico. It damaged about 200 homes and washed out 13 bridges. Close to 900 residents and campers have been rescued.
And Rob Marciano is tracking all the weather for us from the weather center in Atlanta. We're looking at a heat wave. We can officially call it that, right, for the northwest this weekend.
MARCIANO: Parts of the country definitely going to get smoking hot. We've seen temperatures in like Dallas and Denver approach record streaks of seeing either 100 and 90 plus degree heat. We'll get close to 90 if not touch it across the northeast. Temperatures right now in the mid 70s and it's kind of just soupy out when you go outside right now.
You've got some thunderstorms rolled through last night, so a lot of moisture in the soil. And that is kind of emanating up into the lower parts of the atmosphere where we live. So it feels definitely muggy.
Louisville up towards Lexington, some showers and thunderstorms heading your way. But these are the strongest storms on the radar scope this morning. Look at this squall line just plowing east, southeast into western parts of Minneapolis.
This is a strong complex, has winds that have been reported around 70 miles an hour and Bismarck, it's motoring east southeast in about 60 miles an hour.
Right now, severe thunderstorm warning out for Cottonwood, Murray, Pipestone, also, Lincoln Counties, Tyler and Russell. You want to watch out because this thing is going definitely has some punch. Actually you might reach the southwest parts of the suburbs of Minneapolis later on today.
One hundred expected again in Dallas today. It'll be the 13th day of the last 14 that we've reached that number in the Big D. Try to stay cool. Kiran and John, back up to you.
ROBERTS: Rob, thanks so much.
Hey, it's 19 minutes after the hour and let's fast forward to some of the stories that are going to be making news a little bit later on today.
In the next hour, we're going to be hearing from President Bush. We'll cover his statement live from the White House. This will be on the Iraq war. He'll be talking about making progress there. We'll have that for you on air and online at CNN.com.
At 10:00 this morning, a congressional hearing into the nationwide salmonella outbreak and why it took the government so long to pinpoint the source. Look for live coverage of that hearing.
And at 10:15, the finger pointing continues on the energy crisis. Senator Chuck Schumer, Speaker Nancy Pelosi and Representative Ed Markey join forces to blast oil company profit numbers out today for Exxon Mobil and Royal Dutch Shell. They're also going to call for an end to oil company subsidies.
And that's what we're following for you. You're watching the "Most News in the Morning." We are back in 90 seconds.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the "Most News in the Morning." Next week marks the 20th anniversary of a brutal chapter in the history of Burma, also known as Myanmar. The military there cracked down on a democracy movement and arrested the democratically elected prime minister and Nobel Peace Laureate Aung San Suu Kyi. In her documentary, "Buddha's Warriors," CNN's chief international correspondent Christiane Amanpour takes a look inside the country.
(BEGIN VIDEOTAPE)
CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL CORRESPONDENT (voice- over): Because journalists are not welcome in Burma, we sent in an undercover team posing as tourists. We found a veil of secrecy had descended across the land. The same temples and monuments where the daily protests had begun are now shrouded in fear. None of the monks who had taken part would talk openly to us.
UNIDENTIFIED MALE (through translator): When evening came, so did the soldiers. And that's when many monks were brutally attacked. We have both young and old monks here and we're afraid for their safety.
AMANPOUR: Despite the heavy hand of repression, the monks avow to continue their peaceful fight against the regime.
UNIDENTIFIED MALE (through translator): The traditional ties between the people and the monks compel us to continue the struggle. We'll do it again. Soon, there'll be another eruption because the monks won't let their movement die. People are afraid of informers and arrests, but they'll protest again.
AMANPOUR: The regime maintains its state of fear by deploying these not so secret police agents. They record and photograph any unsanctioned political activity, like this rally by supporters of Aung San Suu Kyi. Protesters demand her release. Instead, they extended her detention and continued their iron grip.
(END VIDEOTAPE)
ROBERTS: The government of Myanmar did not respond to CNN's requests for an interview. You can watch Christiane's entire special this weekend, "Buddha's Warriors." Airs Saturday and Sunday night at 8:00 p.m. Eastern time. Be sure to tune in for that.
CHETRY: Late start. Beginning school a year behind their peers.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: When kids are older, they're able to handle more complicated situations more effectively.
(END VIDEO CLIP)
CHETRY: The debate on starting late.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We think it was a terrifically wise move.
(END VIDEO CLIP)
CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING. Five senators are calling on EPA Chief Stephen Johnson to resign. They say Johnson gave misleading testimony to Congress and folded under pressure from the White House on global warming. Now, this controversy erupted after Johnson rejected California's proposal to regulate greenhouse gas emissions from cars.
Jason Burnett served as the associate deputy administrator at the EPA until he resigned last month. And he joins me now. Jason, thanks for being with us.
A part of this is coming to light because of testimony that you gave to Congress. Now, Administrator Johnson says that he rejected California's proposal because he said it failed to meet criteria under the Clean Air Act and that he also went on to say it was solely based on my decision based upon the facts. You believe, though, that he was going to approve it until the White House stepped in. Explain why you think he was pressured.
JASON BURNETT, FMR. EPA ASSOCIATE DEPUTY ADMINISTRATOR: We were developing various options within the agency, within EPA. And we put forward a plan to the White House. And that plan was to partially grant the California waiver, provided that the Clean Air Act was not amended. And if Congress did amend the Clean Air Act, then we would look at those amendments and make a decision based on the new law.
Now, the president made it quite clear through a variety of (INAUDIBLE) that he preferred a single national standard. And a single national standard would be inconsistent with granting the California waiver.
CHETRY: Why do you think that Administrator Johnson was pressured, though, by the White House?
BURNETT: Well, what I have said is that it was the president's policy preference for a single national standard that led to the denial. And it was made clear to me and to the administrator that the -- that President Bush did have that policy preference. And denying the waiver was the way that the administrator found to meet the president's policy preference, even though that wasn't the best reading of the law, of the Clean Air Act and the facts of the case.
CHETRY: Do you believe that Johnson misled Congress in his testimony?
BURNETT: I'm not going to get into that. I've provided my testimony and I understand that others are looking at that question. But I am looking at what the steps are that the next administration will need to take to rectify the situation.
CHETRY: The EPA issued a statement in response to your testimony and to Senator Barbara Boxer's allegation saying that, "while Jason Burnett was a key architect of the EPA's climate policy the final decisions are made by administrator Johnson alone. And he stands by his decision. Senator Boxer's latest rant is simply a reflection of her inability to pursue responsible environmental policy in Congress."
How do you respond to that statement?
BURNETT: Well, I think that there is going to be a lot of back and forth over the next few months. But ultimately what this administration has decided to do is leave some of the most important policy questions for environmental policy and energy policy and climate policy to the next administration. And so I think that we should all be focusing on what happens January 20th of next year when either a McCain administration or an Obama administration gets to pick up the challenges that this administration has not confronted.
CHETRY: Jason Burnett, former EPA associate deputy administrator, thanks for joining us this morning.
BURNETT: Thank you.
ROBERTS: 31 minutes after the hour. And here are this morning's top stories and breaking news for you this morning. President Bush expected to make a statement on Iraq a half an hour from now. You can see it live on the most news in the morning at the top of our 8:00 a.m. hour. Today was the deadline set by the White House and Iraqi leaders for an agreement on troop extensions.
The TSA may fine airlines for wrongly telling passengers they're on the terror watch list. "USA Today" says it could cost them up to $25,000. The TSA has been under pressure to fix problems with the list after the ACLU reported that it hit a million names. CNN's own Drew Griffin found out that he was on the list after doing a story that was critical of the TSA.
And is it the smoking gun? Serrano peppers. The FDA says it may have finally found the source of the nationwide Salmonella outbreak that has sickened 1,300 people. Investigators traced it back to a farm in Mexico but they have still refused to completely clear tomatoes despite an lack of evidence that they caused the outbreak.
Our Dr. Sanjay Gupta joins us now from Atlanta. Is there compelling evidence that Serrano peppers, Sanjay, are the smoking gun here?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes. There is compelling evidence. This has been quite an investigation. First trying to figure out which foods might be the culprit. That involves asking people to remember what they ate over days and days if they got sick, which can be hard to do. After they did that they started to hone in specifically on various foods, including tomatoes, various kind of peppers as you mentioned. The reason that it's the smoking gun though here, John, is because there's a genetic fingerprint. They take a genetic fingerprint of particular peppers. They take a genetic fingerprint of the potential contamination source, in this case irrigation water. And they compared it to the Salmonella St. Paul that got people sick and it matches. So it is a smoking gun here.
Quite an investigation again, as I mentioned. What we are talking about here is Serrano peppers. In case you don't know they're a little skinnier. They are often much hotter than jalapeno peppers. What the FDA is saying, look, if it was grown in the United States, canned or pickled, don't worry about it. But if it comes from Mexico and is fresh or raw, then there is some reason to worry. Now these peppers you are looking over here, we went out and bought it yesterday.
And this is a challenge, I think, to the FDA and the people who are going to try to sort of control this outbreak. Now is that there's no way were these labeled as being from Mexico or not being from Mexico. When we talked to the store owners, they didn't know either. So the FDA is saying don't buy peppers from Mexico but even we couldn't tell for sure whether or not they are from Mexico. John.
ROBERTS: Is water always the culprit in these cases, Sanjay?
GUPTA: Not always. You know, what we have found with Salmonella, for example, We have done some investigations on this, it often can be. I did, you know, quite a bit of investigating around the E. coli outbreak a couple of years ago. What we found at that time is that you have lots of crops. Million of acres of crops. And you have a sort of blending, if you will, of the crops and the animals. You can't build fences around all these. And it's those animals that are typically the source of contamination. They often get into the irrigation water, they contaminate it somehow. And that contaminated irrigation water is used on the crops.
So that seems to be the most common mode of contamination here. And probably what happened in Mexico as well, maybe not with cow, but with chickens instead, who knows. But that's probably what happened, John.
ROBERTS: Our Dr. Sanjay Gupta getting to the bottom of the outbreak for us this morning. Sanjay, thanks. GUPTA: Thank you.
CHETRY: And Alina Cho joins us now with some other stories new this morning.
Good to see you, Alina.
ALINA CHO, CNN, CORRESPONDENT: Hey there, guys. Good morning again. Good morning, everybody. New this morning, for the first time the federal government may treat tobacco like a drug. The House has passed a bill to regulate the industry would give the Food and Drug Administration power to restrict tobacco advertising and sales to minors. The legislation is being looked at as a major victory for anti-tobacco advocates. But the Bush administration is against it.
One week to the opening of the Olympic games. And China is announcing tough new rules to fight pollution in Beijing. Take a look at what hundreds of world class athletes will be breathing in for more than two weeks. Our own cameras capture this shot just a couple of hours ago before sunset. Many athletes are planning to wear masks leading up to their events, including American athletes. The new rules will keep millions of cars off the road in Beijing and five other Chinese cities. And factories will also shut down in Beijing and nine neighboring cities.
An old Christian fraternity must be recognized. That's what a federal appeals court has decided in Florida. Judges actually issued an injunction in the Beta Epsilon Chi's case against the University of Florida. The Christian frat was locked out of the university because its rules ban religious discrimination. The fraternity requires all of its members to be Christian.
And finally, carded at 61 years of age? Well, that's exactly what happened to the Washington state governor, Christine Gregoire. What a compliment. She was trying to get into a bar in the capital of Olympia. And the governor was carded. Then she was turned way. It turns out she didn't have her wallet with her, so no I.D.. She said it was something of a compliment that the guy who was 23 years old, a third her age, bounced her. I thought she was 21 years old.
CHETRY: Isn't that a sign of the friendliest bar in town. Unless you're missing your I.D..
CHO: The owner says he has no idea why the bouncer would have done that. but anyway, lots of rules sometimes. Yes, when you reach a certain age it's always great to be carded. Kiran, you wouldn't know anything about that. John, you wouldn't either. But I do.
CHETRY: This lady in the dressing room called me young lady, and I said thank you. No, but the other thing too is that maybe they thought it was a sting. The governor, you know. So, maybe he knew. Trying to play by the rules.
ROBERTS: So she gets carded. We're talking about cards of a different sort this morning as well. Gerri Willis "Minding your Business. Credit cards on the menu, Gerri. GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: That's right. Are you struggling with that credit card bill? Congress may have answers for you coming up on AMERICAN MORNING. Next.
(COMMERCIAL BREAK)
CHETRY: Gerri Willis joins us now. She's "Minding your Business" this morning. We're talking a little bit about whether or not we're going to eventually see a credit card bill of rights.
WILLIS: You know, Congress not known for its quick action, right? Well, they've got a credit card bill of rights in front of the House Financial Services Committee this week proposed by Representative Carolyn Maloney. I want to show you some of the suggestions in this. Because if you have a credit card, I know you're probably frustrated with it. Some of these new ideas prevents retroactive rate hikes to old balances so you don't pay higher interest rates than you expected. It requires mailing bills 25 days before due dates so you don't have a compressed billing cycle. 45 days notice for rate changes. You want some notice so you can get out of the card if you want to. And bills sent out 25 days before due date. So lots of changes coming there.
CHETRY: All right. What about now for consumers? What's the advice?
WILLIS: We don't know really know if this is going to pass. You know, by September it could go to the house floor. We just don't know. You know, keep in mind a lot of folks out there have suggested bills have gone nowhere. I want to tell folks, one thing you should know right now, credit card companies are reducing your credit limit. You may not be even be aware of it. You've got to pay attention to your bill. Here's the problem with that. It could affect your credit rating if you continue to spend at limits you're spending right now.
That's what credit rating agencies look at, what proportion of your credit you're using. You need to use 30 percent or less. But something you might want to do if you've had it up to here and you can't take it anymore with your credit card company? Go to the Federal Reserve's web site. They are taking public comments on new rule changes that they're suggesting for credit card companies. And you can actually have a comment to the federal government. This isn't precisely the screen I'd hoped for. No, it is. OK. Great. And they have had 33,000 consumer comments.
CHETRY: Yes. And what do they do with all those suggestions?
WILLIS: Well, I think the sheer fact that they have so many people complaining is a very big deal. And it makes more likely that we get some kind of rule change here. You've got the federal reserve looking at it. You got Congress looking at it and at some point you would think there would be some changes.
ROBERTS: You think something might get done?
WILLIS: I don't know. It's a long shot. It involves government. But you know, anything can happen.
ROBERTS: Well, keep watching that for us.
WILLIS: I sure will.
ROBERTS: Gerri, thanks so much.
WILLIS: My pleasure.
ROBERTS: The decision to hold your child back in school could be a tough one for parents. But could it actually be the best thing for them? We'll take a look at the pros and cons of red shirting your education.
Foreclosures have more than doubled in the second quarter of this year. A new bill could put billions of dollars into the hands of struggling homeowners. We're talking with one expert to find out if all of that cash is a real fix or just a temporary one.
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CHETRY: A quick programming note for you. We are expecting the President to make a statement on Iraq. He's going to be speaking live from the White House. It's going to happen right after the top of the hour. So about 20 minutes from now, 8:05 Eastern time. We will have live coverage of the statement on air and online.
ROBERTS: As part of your continuing effort to bring you the best information you need to make your choice for president, we're going to let you hear from the candidates in their own words. Here's what John McCain is saying about the war in Iraq.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: On Iraq, Senator Obama says he wants peace. But even today he opposes the surge strategy that succeeded in Iraq and will succeed in Afghanistan. His policy of unconditional withdrawal, regardless of the facts on the ground, could result in renewed violence and a third Iraq war. And I want to say to you again, I believe that withdrawal has to be based on conditions on the ground no matter what that date is. And we have a strong difference of opinion. A strong difference.
I hate war, my friends. I know it costs better than many. I'm going to end this war. But when I bring our troops home, they'll come home with victory, leaving Iraq secure as a democratic ally in the Arab heartland. The bottom line - the bottom line is that Senator Obama's words, for all their eloquence and passion don't mean all that much. And that's the problem with Washington. It's not just the Bush administration, and it's not just the democratic Congress. It's that everyone in Washington says whatever it takes to get elected or score the political points of the day.
Senator Obama doesn't have the strength to speak openly and directly about how he will address the serious challenges confronting America. How will he be strong enough to really change Washington? We don't need another politician in Washington who puts self-interests and politically expediency ahead of problem solving. We need to start putting the country's interests first and come together to keep American families safe and help them realize their dreams for a better life.
My friends, in war and in peace, I've been an imperfect servant of my country. But I've been her servant first, last, and always. Whenever I face an important choice between my country's interest and my own interest, party politics or any special interests, I chose my country. Nothing has ever mattered more to me than the honor of serving America and nothing ever will.
If you elect me president, I will always put our country first. I will put its greatness, its prosperity and peace, and hopes and concerns of the people who make it great before any personal or partisan interest. We're going to start making this government work for you and not for the ambitions of the powerful. And I'll keep that promise every hour of every day I'm in office, so help me God.
(END VIDEO CLIP)
ROBERTS: And coming up in our next half hour here on the most news in the morning, we are going to be hearing from Barack Obama.
CHETRY: Well, she's a superstar, a model, an actress and now a children's author, Brooke Shields. She joins us to talk about her new children's book coming up.
CHETRY: Also, Cheech and Chong hitting the road again. The reunion tour called "what's that smell" rolls out 25 years after their last tour together.
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ROBERTS: Ten minutes now to the top of the hour. Sometimes it's hard to tell if your child is ready to start school or not and making the wrong decision could put them at a disadvantage years from now. Our Deb Feyerick is looking at a brand new study on this and she joins us now. Good morning, Deb.
DEBORAH FEYERICK, CNN CORRESPONDENT: Good morning, John. You know, in college sports it's called red shirting, holding players back so they can get stronger, bigger, more competitive. Well, guess what parents of young kids are increasingly doing the same. Delaying kindergarten to give their children the edge. A new study finds though a that there may be few long-term benefits.
(BEGIN VIDEOTAPE)
FEYERICK (voice-over): When twins, Chris and John Pelz were five, their parents decided not to put them in kindergarten, to wait an extra year.
SANFORD PELZ, FATHER OF "REDSHIRTED" TWINS: If they had gone to kindergarten, they would have been the youngest kids in the class. FEYERICK: Now 15 and away at camp, the boys thrive both academically and socially, attending a private Grace Church School in Manhattan.
SANFORD PELZ: Looking back on it, we think it was a terrifically wise move. They're confident kids, good students, popular. Much of that is attributed to their feeling good about themselves in their classroom setting.
FEYERICK: Yet, a new paper out of Harvard suggests enrolling kids in kindergarten when they're a year older has no long-term benefits instead the study says it creates an imbalance. Students graduate, marry and begin work a year later than other kids their age and if kids drop out, it means one year less school, putting them even farther behind, but George Davison, headmaster at Grace Church School disputes the finding.
GEORGE DAVISON, GRACE CHURCH SCHOOL: There are tons of studies that show that when kids are older, they're able to handle more complicated situations, more effectively.
FEYERICK: The debate when to start kindergarten is a big one and states are increasingly requiring kids born after September 1 to wait an extra year. In North Carolina, lawmakers unanimously agree to slide back their cutoff date six weeks, hoping to stem the 30 percent dropout rate.
DALE FOLWELL, N.C. STATE CONGRESSMAN: My goal in terms of high school dropout rate, is that these children do not get humiliated in the younger grades so that education is looked upon by them as something of a high value.
FEYERICK: At a time when so much emphasis is put on standardized testing, some people question the real motivation.
Critics will say, well, schools are doing this because the older the kid, the better they test.
DAVISON: Right, and so it's bad if kids test well and if a kid tests better because he or she is a little older, that's because the kid is feeling better about himself or herself.
(END VIDEOTAPE)
FEYERICK: Now a lot of academic insiders say that in kids who don't get a major benefit by waiting, but they're certainly not hurt by it. But the same can't be said about the children kids who fast track and skip ahead. That's really the bigger problem. John.
ROBERTS: So is this a trend and if it is, who is doing it?
FEYERICK: Well, it is. You end up seeing that boys are red shirted a lot more often than girls. It's more common among highly- educated, high-income parents and some critics say they're just trying to position their kids to get into better colleges. That's sort of the negative view. A lot of people think it's much better to put their kids in a grade that they can handle.
ROBERTS: Yes, you know, I can see for some kids who are maybe mildly learning disabled it may be a good idea to wait for a little while for that brain to develop just a little bit more.
FEYERICK: And even if they're not learning disabled if they just need some extra time and that happens.
ROBERTS: Interesting piece. Deb Feyerick, thanks so much. Good to see you this morning.
FEYERICK: You too.
(BEGIN VIDEOTAPE)
CHETRY (voice-over): Not going anywhere for awhile? An airline system meltdown backs up baggage and ticks off travelers.
UNIDENTIFIED MALE: Any one of their employees behind that customer service counter worked for me in my business, I'd have fired them.
CHETRY: Plus, model mom, Brooke Shields talks about her journey from child star to children's author, on the most news in the morning.
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ROBERTS: 56 minutes after the hour, "Issue #1," your money. Congress heading into a five-week vacation without resolving stumbling blocks on an energy bill. A House bill on oil speculation fell apart over a dispute on off-shore drilling. A similar Senate bill is being tied up by voting on other energy issues. Meantime, oil prices steady this morning after jumping more than $4 a barrel to cross the $126 mark yesterday.
And a new poll says that most Americans want offshore drilling according to a CNN opinion research corporation poll. Two-thirds of the country approve of drilling but half aren't sure if doing so would reduce gas prices in 2009. President Bush criticized Congress yesterday for refusing to vote on the issue.
Relief could be on the way for hundreds of thousands of homeowners paying their mortgage. President Bush's signature on the housing bill provides billions of dollars in relief. But is the money the answer to the current crisis? Joining me is Richard Bitner. He is the author of "Confessions of the Subprime Lender." He is also an associate publisher for 'housingwire.com' and he joins us live from Dallas this morning.
Richard, it's good to see you. You know, when you look at the housing market it's pretty much all bad news. Let's just put up some figures here. Foreclosure filings up 120 percent in the second quarter, that's 1 in 171 U.S. households. 1.4 million foreclosures so far. Sales of existing homes at a 10-year low. How is this bill going to help homeowners who are facing difficulty? RICHARD BITNER, AUTHOR, "CONFESSIONS OF THE SUBPRIME LENDER": Well, John, let's start with the big picture to begin with. I think probably the single most important piece of this legislation for my money, is the fact that we have actually created some confidence back again in Fannie Mae and Freddie Mac. One of the most critical parts about our system today, I think, as you know, the mortgage securitization market on Wall Street has largely been dead for the last nine to 10 months. Homeowners have been able to get a home primarily because these two institutions continue to function.
When the Wall Street analyst in late June issued a report saying that there was a chance that these two agencies could be potentially become insolvent at the beginning of the year that's what largely created the run on their stocks. So to be able for the Treasury Department to step up and say, hey look, we're willing to write $25 billion worth of checks, it's not really a great long-term solution but at least for the short term it keeps us moving.
ROBERTS: So we've got this huge pool of money out there, some $300 million as well. It's going to be made available to people who are having difficulty hanging on to their mortgage now. What's the process that people will have to go through to convert a loan that they can't pay for now into one that they may be able to handle?
BITNER: Great question. There's a couple of things that I think consumers need to know about. Number one, of course, it's going to be the process of going through to get approved with your lender for this new FHA program. That process isn't going to be really a whole lot different than what we typically go through. Outside of the fact that one of the real keys is we're going to have to, as a lender, identify what the current value of the property is. And the reason why that's important is the bill essentially said hey, if lenders are willing to participate in a write down, that the consumer can get no more than 90 percent of the current value of their home in their new mortgage.
So the real question is going to become not only, you know, can a consumer get approved with that piece but most importantly there's going to be a two-step process. They then have to get the lender to ultimately say yes, I'm willing to take whatever sort of write down I need to, to be able to get here.
ROBERTS: So what's the likelihood of that?
BITNER: Well, you know, this is where the rubber is really going to meet the road, John. Because what's going to happen is having been as a former lender I could tell you, it's really going to come down to looking at two situations. We're going to look at a scenario where we're going to be faced with a particular loss of a particular amount and the lender is going to have to ultimately then calculate that against what the scenario would look like if that borrower went to foreclosure. And that's kind of a tough pill for anybody to swallow to really get down to. But that's really the crux of how a business decision is going to be made. Because it's going to be difficult for lenders who, quite frankly are losing money by the wheelbarrowfull to ultimately want to necessarily help a consumer if it means they're going to lose a significantly greater amount of money. ROBERTS: So this bill was designed to help some 400,000 homeowners, which is really just a fraction of the number of people who are expected to be in trouble in the coming years, maybe 15 percent. Is this enough to turn the market around?
BITNER: Well, you know, I've been known amongst my circle of friends in the industry as being the eternal optimist but I got to say that I don't really feel that strong relative to the impact that this bill is going to have. You know, if you take a step back and you take a look at what it's going to take for this market to behave normally again, what we need to do, is we need to find our bottom and we need to find it as quickly as possible.
Investors need to believe that we've stabalized this market, we've gotten to a situation where quite frankly, they can come back in, buy the bonds again, get this market moving the way it needs to. And in some respects, what this bill has done is actually postponed the ability to do that.
Are we going to help some consumers who got duped? Absolutely. Does that mean it's going to take a little long to get out of this? I'm afraid so.
ROBERTS: All right. Is this going to happen soon enough to help people? Because some of these provisions don't kick in until October 1st.
BITNER: And you know, that's one area that frankly, I don't know that I share the pessimism of Senator Don, on this one. When they said, the other day, that they would absolutely be ready.
For those of us in the industry who've worked with the FHA, I mean, you've got to understand, FHA is very much a dinosaur. They're still using FORTRAN to program their systems. You know, I think quite frankly, you know, there is a chance that Elton John could be coming to be playing a concert at my house, tonight. Not very likely. Monkey's could also be flying down 5th Avenue. I think the probability that HUD's ready on October 1st, not very good.
ROBERTS: All right. Richard Bitner, author of "Confessions of a Subprime Lender," thanks for putting it in plain English for us this morning.
BITNER: Thanks.
ROBERTS: Good to see you -- Kiran.
