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American Morning
Dire Warning Issued for Bio Attacks Likely to Occur in Five Years; U.S. Officially in Recession; Formal Charges Expected on Hudson Murder Case; Axl Rose Feuds with Dr. Pepper; A Look at Obama's National Security Team
Aired December 02, 2008 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: And welcome to AMERICAN MORNING. Glad you're with us on this Tuesday, December 2nd. I'm Kiran Chetry along with Joe Johns.
JOE JOHNS, CNN CO-ANCHOR: And --
CHETRY: Good to see you again.
JOHNS: Absolutely. I'm in for John Roberts.
CHETRY: Yes.
JOHNS: And having a good morning bright and early. And we're both very chipper, I guess.
CHETRY: Of course. As always.
JOHNS: Yes. Sure. All right.
We begin this morning with breaking news. An urgent concern for the incoming administration.
Today Vice President-elect Joe Biden will be briefed by a bipartisan commission warning the U.S. can expect a nuclear or biological attack within the next five years. And while the panel acknowledges terrorists still lack the know-how to make these types of weapons, it warns that the gap can be easily overcome.
Today President-elect Barack Obama is turning his attention back to issue number one, the teetering economy. He'll meet with the nation's governors at an economic summit in Philadelphia, and there will be no shortage of demands for your tax dollars.
The governors are expected to press the incoming president for as much as $176 billion worth of infrastructure projects and health care assistance.
Secretary of State Condoleezza Rice is in Europe on her last official visit. And during a London news conference with her British counterpart, Rice praised the choice of Hillary Clinton as America's next top diplomat.
(BEGIN VIDEO CLIP) CONDOLEEZZA RICE, SECRETARY OF STATE: I know that she will bring enormous energy and intellect and skill to the position. And most importantly, I know her to be somebody who has what you need most in this job, which is the deep love for the United States of America, and for its values, respect for differences that we may have with friends and allies, but always recognizing that the core of who we are as Americans unites us with very many around the world.
(END VIDEO CLIP)
JOHNS: Secretary Rice also displayed her musical skills playing the piano for Britain's Queen Elizabeth at Buckingham Palace.
CHETRY: And turning now to breaking news about your money, the battered financial system taking another beating this week. Markets in Europe and Asia are down sharply, and they are reacting to a dismal day on Wall Street. Most of last week's gains wiped out in just a single day. Nearly 700 points gone. And that's $1 trillion evaporating from stock portfolios and 401(k) plans.
A full plate of sour economic news fueling that sell-off along with word that the country has been in a recession officially now for the past year.
CNN's Christine Romans is "Minding Your Business" this morning. Of course, it's something that many people have felt but now it's official that yes, we have been in a recession since I believe December of '07.
JOHNS: A whole year?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: A whole year.
JOHNS: That's a long time.
ROMANS: That is a long time. And our survey and our opinion polls have been showing this back in November 2007. You started to tell us that issue number one was the economy and that's even before, you know, our government was recognizing some of the problems that were in the economy and that people were feeling it.
I mean, we were still being told back then that the economy was fundamentally strong and that the labor market had had, you know, 52 months of job gains. Well, now we have seen the labor market lose jobs again and again -- 1.2 million jobs gone.
You know this. You're feeling this in your neighborhoods. You're seeing the foreclosure crisis. You saw high gas prices. And now, you're seeing gas prices get low again because of what we call demand destruction. The global economy is so weak that demand for oil and gas is going down.
Let's look at stocks yesterday because it was just the official confirmation of a recession along with a whole raft of more grim economic news that drove the Dow down 8.3 percent. The Nasdaq down nine percent. The S&P 500 down almost nine percent. It had been five days of gains before this and then quickly much of it came unraveled. The gloom spreading to the Asia and Pacific markets. Those stocks retreating. Japan down six percent. Hong Kong down five percent. Australia down 4.2 percent.
And I mention those energy prices. Gas, this is the silver lining of a recession. You see oil prices go down quite sharply, and they continue to do so. It has been a dramatic couple of months for this commodity.
Light sweet crude down another $5 to $49 a barrel. That brings gas prices down to $1.81. Lakshman Achuthan is an economist who we talked to a lot here, and he likes to say that we see plenty of gloom but we don't see doom. And that -- that is what I think defines what's going on here.
A lot of folks trying to figure out the depth and duration of this recession. That's why stocks have been so unraveled. We've already seen this thing last a year in terms of the recession. That's longer than your plain vanilla garden variety recession.
And in a garden variety recession, a lot of people get hurt. A lot of business go out of business. A lot of people lose their homes. They lose their jobs. So it's been tough.
We know it's been tough. Now, we're just trying to figure out how long it's going to last and how much point of pain will be wrought.
Until then, what you need to know is your job is the most important thing. Control your spending. Nothing is different today than it was yesterday for most people. It's just official now that we're in a recession.
JOHNS: It's still not quite good enough sense of "I feel your pain from the White House," though.
ROMANS: Not quite yet. I mean, they say, you know, we know that they say we know we're in a recession now. But the most important thing is to look ahead and how to get out of it, which, you know, someone says pretty healthy actually. We do have to figure out how to get out of it.
CHETRY: All right. Christine, thanks.
Well, today is the deadline, by the way, for Detroit's big three to submit a plan if they want a penny of that $25 billion bailout. The carmakers are expected to present very detailed reports on how they would restructure their businesses to become more competitive. And the executives won't be flying in on private jets. No, they're not going to make that same mistake when they return to Washington for hearings this week. In fact, the head of Ford, Alan Mulally, is making the two-day trip in a Ford hybrid.
And some good news this morning for anxious retailers. Deep discounts did draw bargain hunters online in big numbers yesterday, Cyber Monday, which breaks down the sales from nearly 600 retailers, a Web site cyberMonday.com. It says more than two million visitors hit the Web site. That's up more than a third from last year. And Target also reporting its sales on the web were up from last year.
JOHNS: Back to our other breaking story. And a dire warning that terrorists will most likely carry out a chemical, biological or nuclear attack in the United States within the next five years. That's according to a bipartisan panel that will brief Vice President- elect Joe Biden today.
CNN's Homeland Security correspondent Jeanne Meserve joins me on the phone from Washington.
Jeanne, this is an incredibly daunting report. How serious is the threat?
ON THE PHONE: JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: The commission says that there's more than a 50-50 chance that a weapon of mass destruction will be used in a terrorist attack somewhere around the globe by the end of 2013 and that an attack with a biological weapon is more likely than attack with a nuclear weapon.
The commission notes that biotechnology has spread globally giving scientists around the world a growing capability to create pathogens and genetically modified diseases to make them more lethal. The risk it says are revolving faster than our responses. The reports says the U.S. has placed too little emphasis on preventing such an attack and that our margin of safety in this area is shrinking, not growing -- Joe.
JOHNS: So as I follow it, most of these reports have come out in this way have some type of recommendations at the end. What does the panel say about what should be done about this threat?
MESERVE: Well, essentially, it should be a single individual in government who's coordinating our efforts all across the agencies and directing them. On the bio threat, it says specifically that security should be tightened around the labs dealing with dangerous pathogens. We should enhance our capability to detect biological attacks, improve our capability response, and it also emphasizes that there should be an international effort to better control the threat of bioterrorism.
It says this is not inevitable, that we can take action. They will be briefing not only the incoming Obama administration, but the outgoing administration and also members of Congress.
JOHNS: Jeanne Meserve, our Homeland Security correspondent, thanks so much. We'll be looking forward to your reports later in the day.
CHETRY: Also new this morning, Indian security officials confirming to CNN that they were warned by the U.S. about a possible terror attack in Mumbai, not once by twice actually.
The U.S. counterterrorism official says that the Indian government had detailed intelligence about a potential maritime assault, at least a month before last week's massacre in Mumbai. Indian officials are under fire for the security lapse that allowed the terror siege to occur. Nearly 180 people were killed including six Americans.
And this morning, President Bush has 49 days before he leaves office and in the final days he's reflecting on the eight years that he first took over the reigns of power. Last night in his first exit interview, so to speak, he spoke with ABC's Charlie Gibson about leading a nation through war.
(BEGIN VIDEO CLIP, FORM ABC WORLD NEWS)
CHARLIE GIBSON, ABC WORLD NEWS ANCHOR: What were you most unprepared for?
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I think I was unprepared for war. In other words, I didn't campaign and said please vote for me, I'll be able to handle an attack. In other words, I didn't anticipate war. Presidents -- one of the things about the modern presidency is that the unexpected will happen.
(END VIDEO CLIP)
CHETRY: The president also spoke about the economy, so we're going to get more on his answers to those questions coming up.
This morning nearly four years behind schedule hundreds of millions of dollar over budget. The massive visitor center at the capital finally opened. It's the biggest addition to the building ever, extending three levels below ground. And at 580,000 square feet, the new visitor center is part museum, part meeting hall, and it even includes a safe house in the event that the capital is attacked -- Joe.
JOHNS: Gas prices dropping again overnight. And the price of oil is down sharply from the summer. But if you think all those fuel-related airline surcharges are down too, think again. You're still not getting a break when you fly.
And breaking news overnight. An arrest in the killings that shattered actress Jennifer Hudson's family. We'll tell you who Chicago police are charging in the murders of her mother, brother and 7-year-old nephew.
It's nine minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: And welcome back to the "Most News in the Morning." A live look right now at the White House where it is 36 degrees. It feels like 30. It's clear there this morning, and right now, it's clear.
The sun is going to be shining a bit later today. And there you still front and center in honor of World AIDS Day the ribbon -- the red ribbon still in front of the White House.
Well, let's fast forward to some stories that are going to be making news later today.
Automakers right now bracing for news of yet another dismal month. One research group expects new sales -- sales of new vehicles in November to plunge 27 percent compared to the same time last year. But that would mark a slight improvement actually from October.
And a former UCLA Medical Center employee is waiting to be sentenced after pleading guilty yesterday to pedaling celebrities' medical histories to the "National Enquirer." Lawanda Jackson's sentence carries a maximum of 10 years in prison. Britney Spears and Farrah Fawcett are among the stars who reportedly had their files rifled through.
And police in Chicago making an arrest in the triple murders of Jennifer Hudson's mother, brother and 7-year-old nephew. That suspect was already behind bars. Our Alina Cho has been working the story overnight, and she joins now with the latest developments.
Hi, Alina.
ALINA CHO, CNN CORRESPONDENT: Hey there, Kiran. Just an awful story. Good morning, everybody.
You know, William Balfour has been in custody since October. On Monday, he was arrested and today he could be formally charged in the murders of Jennifer Hudson's relatives.
Now up until now, police had been calling Balfour a person of interest. He's 27 years old. You may recall he's also Jennifer Hudson's estranged brother-in-law, married to her sister Julia.
Now Balfour was picked up just hours after the killing back in October. Police have been holding him until now on a parole violation. He's reportedly refused to take a lie detector test and reports say he has also stopped cooperating with detectives.
The "Chicago Tribune" is reporting that that happened because police say Balfour allegedly confessed to his girlfriend and that that prompted him to go silent. "The Tribune" is also reporting that an ongoing domestic dispute was the motive.
Police say Balfour killed Jennifer Hudson's mother, Darnell Donerson, her brother Jason Hudson, and her 7-year-old nephew Julian King. All were shot to death. The bodies of Hudson's mother and brother were found in their home on Chicago's South Side. The body of her nephew was found three days later in an abandoned SUV, and police say they have recovered the murder weapon.
Yesterday, Balfour's mom came to her son's defense.
(BEGIN VIDEO CLIP)
MICHELLE DAVIS-BALFOUR, WILLIAM BALFOUR'S MOTHER: They tested him for gun residue. Nothing was found. Made my son take his hair down. No gunpowder. No blood was splattered. None on his shoes. So where's your evidence?
(END VIDEO CLIP) CHO: Well, that's the big question. His mom says his alibi is that he was with a girlfriend at the time of the murders. Balfour does have a record, we should mention. He served seven years on attempted murder and carjacking back in 1999. He was out on parole when the murders happened.
Jennifer Hudson so far has had no comment. As you might imagine, Kiran, she has been in seclusion since the murders back in October.
CHETRY: And you mention how he's been in jail on this parole violation for about a month. What took so long for these formal murder charges to come?
CHO: Well, authorities really have the luxury of time, if you think about it. I mean, he was in custody already. So as the "Chicago Tribune" is reporting, they were able to test carpet fibers, check for prints, really look at the murder weapon closely. And as we go forward, of course, the big question is, is the case going to be largely circumstantial or is there actually forensic evidence linking him to the murder weapon? That, of course, would be key.
CHETRY: All right. Alina Cho following this for us. Thanks so much.
CHO: You bet.
CHETRY: Joe?
JOHNS: Barack Obama names his high profile secretary of state and sets the ground rules for his new national security team. We'll look at how Obama's war cabinet will function.
And Dr. Pepper may have opened a nasty can of worms. Find out why Axl Rose is now taking a potshot at the company's free drink pledge.
It's 16 minutes past the hour.
(COMMERCIAL BREAK)
MUSIC: Live and let die.
JOHNS: Little air guitar action there. This morning Axl Rose is taking Dr. Pepper to task after the soft drink maker announced it would give everyone a free soda if the reclusive rocker finally pulled the trigger on his years in the making album. Well, Axl says he delivered but Dr. Pepper has not leaving some of its fans unserved. Here's Kareen Wynter.
KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: Joe, Kiran, it's not quite what the doctor ordered but a popular soft drink company is now feuding with the famous rock group.
(BEGIN VIDEOTAPE)
WYNTER (voice-over): It's a jungle out there, all right for Guns N Roses front man Axl Rose, now in the midst of a legal fight with soft drink giant Dr. Pepper. In March, the manufacturer rolled out a marketing campaign promising a free soda to everyone in America on one condition, Axl Rose had to finally release his 17 year in the making belabored masterpiece, "Chinese Democracy" in 2008. Axl and the band did that just last week.
Dr. Pepper fans then had 24 hours to go to its Web site to get a coupon for a can of soda, but heavy traffic caused the site to crash. The company extended the deadline another day, but Axl Rose's attorney say the damage was done.
LAURIE SORIANO, ATTORNEY FOR AXL ROSE: We've gone public with the fact that we were not involved but are trying to clean up the mess.
WYNTER: And Rose's attorney say they've gotten no response from a complaint letter they sent Dr. Pepper last week requesting that the company make good on their free soda promise.
SORIANO: When you go on the blog and you read the responses of the fans, they associate Axel with this promotion and blame him for the fact that they didn't get their free soda.
WYNTER: But Dr. Pepper told CNN they have kept up their end of the bargain. A company spokesman says they're disappointed that GNR's lawyers are turning a fun giveaway into a legal dispute, and say they're still offering free coupons to anyone who encountered difficulties. That may be the case, but Rose's camp still wants an apology.
(END VIDEOTAPE)
WYNTER: Axl Rose's attorneys say the door to a lawsuit being filed is always open until the fans are taken care of and Dr. Pepper does the right thing -- Joe, Kiran.
JOHNS: Yes. Dr. Pepper is just too wholesome for Axl Rose.
CHETRY: Yes. Exactly.
JOHNS: I mean, come on. I mean, isn't there something else we --
CHETRY: We thought of our own solution, as Kareen was doing this. It should be the drink rock star. You know, it's an energy drink called rock star.
JOHNS: Yes.
CHETRY: Is that a (INAUDIBLE).
JOHNS: Red Bull. There we go.
CHETRY: Finally. This thing better be a masterpiece. I mean, he hasn't released an album since 1999. This thing better be a masterpiece.
JOHNS: Unbelievable. That's right. Stevie Wonder of hard core rock and roll.
CHETRY: Well, still ahead, no shrinking violets on Barack Obama's national security team. That's for sure. So what role will all of these heavy hitters play under a president with a limited foreign policy resume? Two of our political experts have some answers for us at 21 minutes after the hour.
Left holding the bag.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's just a way for them to keep money in their pockets, but what are you going to do. We got to travel.
(END VIDEO CLIP)
CHETRY: Surcharges, fees for bags, all added on when the cost of jet fuel went up. So why are we still paying the price now that fuel is so much cheaper?
You're watching the "Most News in the Morning.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP, "THE TONIGHT SHOW WITH JAY LENO")
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": I am no political expert. I don't pretend I know much about international affairs. But speaking of strictly a late night talk show host, a Clinton back in office? Yes!
(END VIDEO CLIP)
CHETRY: Well, Christmas coming early for Jay Leno. The late night host will take on Hillary Clinton's nomination as secretary of state. Barack Obama putting together a team of heavy hitters, of course, to handle national security including his one time bitter rival.
Joining us now for a close look at the Obama team, John Avlon, senior fellow at the Manhattan Institute and contributor to thedailybeast.com. Also from Washington, Patricia Murphy, editor of citizenjanepolitics.com.
Good to see both of you this morning.
PATRICIA MURPHY, EDITOR, CITIZENJANEPOLITICS.COM: Let me ask you first, Patricia, are we making too much of this "team of rivals"? We've heard the phrase being used to describe this. I mean, are these really rivals?
MURPHY: Well, there's no way to say that Hillary Clinton and Barack Obama weren't rivals for the Democratic nomination. But certainly what we heard throughout the primary process was that their policies were almost identical. That the one place they did have differences really was on foreign policy. But I think this really is a time where there's a lot of speculation going on. There's actually not a whole lot else to talk about. When we start getting into the actual process of governing, I think we'll hear a lot less about the fact that they're rivals since they are on the same team.
CHETRY: Right. And as you point out, they weren't -- they didn't have vastly different stances on key issues. One, of course, though would be the Iraq war.
And, John, you wrote -- you wrote when you talk about the national security team that is taking shape, you call it a centrist dream team on CNN.com, saying it's a good thing. That this team really is, in your words, center right. Where does that leave the left who really campaigned and worked tirelessly to get Barack Obama elected, really with one of the top hopes being that he would end the war sooner than later.
JOHN AVLON, AUTHOR, "INDEPENDENT NATION": Sure. Well, a lot of the far left net groups are raising red flags about these nominations. But Barack Obama understands that the American people want common sense, smart government not ideology. The problem is what the activist, what the extremes on the far right and far left want is ideology. So there's a natural conflict here. But by building a strong centrist national security and economic team, Obama is showing that he understands the Democrats have a deficit of confidence in those areas in the past and from a centrist perspective. That's why he gets an A plus on his cabinet today.
CHETRY: It's interesting, Patricia, looking at one of these articles about exactly what John was talking about when it comes to the millions of left-leaning voters who worked tirelessly to get Obama elected. Moveon.org's executive director said, you know, we'll see if they turn out to all be disappointments, we'll have a good three years to storm the gates at the White House.
So I guess he is getting a bit of a grace period, if you will. How long, especially, when it comes to tactics in Iraq and where, what direction we're moving with the war until we start to hear a big outcry from those on the left?
MURPHY: Well, I think the biggest point we would start to hear an outcry would be who replaces Secretary Gates. What I hear on the left is that they're not thrilled with the fact that Gates is going to stay in that job, but they understand why from a political perspective he needs to.
This is -- this does raise a problem though for the left-leaning groups. What do they do now when they are dealing with an administration that they fought to put in place? These were all born out opposition to George W. Bush and his policies. What is their agenda going to look like going forward when they have a president who they worked very hard to get elected?
This is going to be I think a trying time for these groups and a soul- searching time to figure out what is their purpose, what are they going to do with this administration, and will be fascinating to watch.
CHETRY: Another interesting thing, John, that some are pointing out is the change you can believe in and what happened to that.
Mike Allen and Jim VandeHei in "Politico" write, "Obama isn't so disdainful of the Washington insiders after all. What's most surprising about them is how unsurprising they are. They are a roster of the Democratic establishment."
So what happened to change you can believe in?
AVLON: Well, I think the change he campaigned on to a large extent was putting the piper partisan politics of the past behind us. What's ironic is a lot of the far left activists wanted an equal and opposite reaction to the Bush administration on a liberal side. What Obama always campaigned on was centrist change, moving the country past the old left right, black-white divides. That's what he's delivering on. And that's why he's forming a broad coalition between the extremes.
CHETRY: All right. Very interesting stuff. And, Patricia, as you put it, it will be fascinating to watch.
Thanks to both of you, John Avlon and Patricia Murphy. Good to see you this morning.
MURPHY: Thank you.
CHETRY: Joe?
JOHNS: Kiran, it's almost half past the hour. A check of the top stories.
A new mental health study says one in five young adults in the U.S. suffers from some sort of personality disorder that affects their every day lives. And nearly a third suffer from abuse of alcohol or drugs.
Researchers studied some 5,000 people ages 19 to 25. The study also found fewer than 25 percent of young adults who have mental health problems actually get treatment.
Georgia voters return to the polls today for a runoff election between incumbent Republican Senator Saxby Chambliss and Democratic challenger Jim Martin. It's one of two Senate races still undecided.
In Minnesota, incumbent Norm Coleman is locked in a recount battle with Democrat Al Franken. If both Georgia and Minnesota go to the Democrats, it would give them a 6-seat filibuster-proof majority in the Senate.
The financial crisis in California. Governor Arnold Schwarzenegger declaring a fiscal state of emergency. And warning the state could run out of money to operate by February without an immediate budget fix. Schwarzenegger is calling for a special session of the state legislature to address California's $11 billion budget gap. Right now, overseas markets reacting to another massive selloff on Wall Street. The Dow shedding nearly 700 points after a rash of bad news, including holiday sales fading over the weekend, a drop in construction and production, and official word the U.S. is in a recession -- something President Bush talked about during an interview with ABC's Charlie Gibson.
(BEGIN VIDEO CLIP)
CHARLIE GIBSON, ANCHOR, ABC "WORLD NEWS": Do you feel in any way responsible for what's happening?
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm the president during this period of time. But I think when the history of this period is written, people will realize a lot of the decisions that were made on Wall Street took place over, you know, a decade or so, before I arrived as president, during I arrived as president. I'm sorry it's happening, of course. Obviously, I don't like the idea of people losing jobs or being worried about their 401(k)s. On the other hand, the American people got to know that we will safeguard the system.
(END VIDEO CLIP)
JOHNS: The president went on to say he believes the markets will recover.
But in the meantime, one economic bright spot continues to be found at the gas pump. The price of a gallon of gas now $1.81. That's less than one half of what it was over the summer when oil prices peaked and airlines slapped those fuel surcharges. But now, those prices are falling.
Don't expect a cheaper flight and those surcharges and fees for bags, pillows, peanuts seem to have stuck, you know. They charge you -- when are they going to start charging you, you know, for oxygen.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I think that's free. I think that's going to stay free. You know, you're right. This is a new business model, really, this unbundling of all of these different things. But what's really interesting is when you go and you fill up your car, when you fill up the tank of your car, you know, you have lower gas prices. It's the silver lining of the recession -- lower fuel prices. But you won't get a break if you fly.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Gas prices are down. They should turn it around.
ROMANS (voice-over): You'd think lower jet fuel prices would mean a break for passengers. Think again. Jet fuel is down 58 percent since record highs this summer and well below last year's price. But the airlines are quietly making their fuel surcharges permanent, folding them into their regular fares. Even ramping up checked bag fees.
SEN. ROBERT MENENDEZ (D), NEW JERSEY: Well, you know, it's just -- it's just really outrageous.
ROMANS: Senator Robert Menendez complained in a letter to the airlines' CEOs.
MENENDEZ: One of the things that they can do is lock in their prices now and be able to achieve all that savings. Now, is any of that savings going to get passed on to the consumer?
ROMANS: Not so far. Record high fuel costs earlier this year justified fuel surcharges and checked bag fees. $15 for the first checked bag, $25 for the second. The fees skyrocketed after that. The theory the more you carry, the more it cost to fly you. Not surprisingly, fuel surcharges are highest on international flight. According to farecompare.com, a flight from Denver to London carries a fuel surcharge of $366 plus tax.
Frankly, the struggling industry can't afford to lose the revenue. The industry says the airlines are trying to keep flying in a global recession. Besides, fuel prices just started coming down.
JOHN MEENAN, COO AND EXECUTIVE VP ATA: They didn't really compensate the carriers for the amount they were paying for fuel. The fact is that this year, we expect the airlines to lose between $4 and $6 billion.
ROMANS: As for those add-ons, industry analysts say customers may grumble but most only want to pay for what they use, whether it's a checked bag or a snack or a movie or a blanket and pillow. But it's paying for high fuel prices when fuel prices are falling that infuriates many travelers.
BRIAN, PASSENGER: It's just a way for them to keep money in their pockets. But what are you going to do? We got to travel and they got us.
(END VIDEOTAPE)
ROMANS: They got us, he says, and that they do. But the good news is the fares have been coming down. Believe it or not. Fares have been coming down. Those base fares, even though they have put the fuel surcharge in there. Those base fares have been coming down for the holidays. But when we go forward, though, you can expect to see them go back up again.
So, that's the real thing that has people so infuriated is that the airline industry can technically say, oh, no, we're getting rid of the airline -- the fuel surcharges, we're getting rid of them. Yes, they're getting rid of them by putting them into the base fare on international flights...
(CROSSTALK)
JOHNS: Well, that's exactly what I'm going to say. You know, you just can't win. And it's frustrating because, I mean, my gosh, if you fly a lot, come on.
KIRAN CHETRY, CNN ANCHOR: And it's not just the airlines. I mean, local taxicab services have been doing it.
ROMANS: Right.
CHETRY: Online grocery stores. I mean, these fuel surcharges, they came when prices are higher (INAUDIBLE).
(CROSSTALK)
ROMANS: And what say is that, you know, fuel prices are so erratic. And the bottom line is that they can't afford to give up the revenue. Anybody in any kind of transportation business can't afford to give up the revenue at this point because there's a global recession at this point.
JOHNS: $70 for oversized suitcase.
ROMANS: I know, I know.
JOHNS: I mean, come on.
ROMANS: Some of these checked bag fees...
CHETRY: Pack lighter.
(CROSSTALK)
JOHNS: You're right. And what if you stay in a week?
ROMANS: And if we travel, it's like a covered wagon because you've got kids and you've got packing place, you've got strollers and all those stuff.
CHETRY: That's why I don't go anywhere.
ROMANS: I know, I know.
JOHNS: Drive.
ROMANS: It's crazy. It's crazy.
CHETRY: Exactly. One note for Guns and Roses fans. I'm sorry. They didn't release an album since '99. It wasn't an album. It was just one song.
JOHNS: Oh yes, OK. I think you're on the right track here.
CHETRY: It was "Oh, My God" from the soundtrack to the film "End of Days." It was not an album.
JOHNS: No. OK. The switchboard is lighting up. No.
CHETRY: It is, because G&R fans base -- and some would argue the "Spaghetti" wasn't an album either, but (INAUDIBLE).
Christine, thank you.
ROMANS: You're welcome.
CHETRY: Well, the hope fades for strong holiday sales right now. Where retailers are hoping and they're looking for someone other than women to save the shopping season? We'll explain.
Also this morning, a bipartisan group sounding the alarm, warning that terrorists may unleash a nuclear, biological or even chemical attack possibly in your backyard. The breaking details on that. It's 36 minutes after the hour.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Can I show you something?
UNIDENTIFIED MALE: I was just looking, smelling -- smiling. I was just blousing -- browsing.
UNIDENTIFIED FEMALE: For your wife or your girlfriend?
UNIDENTIFIED MALE: What? What happened? Whoa.
(END VIDEO CLIP)
CHETRY: Clear Griswold, not the only men piling up presents and storming the sales clerks. In fact, retailers are counting on men to save the holiday season. CNN's Jason Carroll joins me.
You're quite a shopper yourself. The only thing you're missing today are collar stays, right?
JASON CARROLL, CNN NATIONAL CORRESPONDENT: Yes, I need some of those. They're going to hook me with that when this is over.
CHETRY: Now I know what to get you for Christmas.
CARROLL: All right. So, the common thought is that men don't like to -- men don't buy retail like women do. And in overall sales, women still outpace men. But for the past several years, the number of men buying retail has been growing.
(BEGIN VIDEOTAPE)
CARROLL (voice-over): In uncertain economic times, who could fault retailers for trying something new to boost holiday sales? Popular toy, new gadget. This year, they're betting on people like Christian Harmon.
CHRISTIAN HARMON, SHOPPER: I can't spend too much this holiday season.
CARROLL: And Mike Fiorvanti.
MIKE FIORVANTI, SHOPPER: I'll spend as much, if not a little more than last year. CARROLL: Male shoppers buying for themselves and others, and it's adding up. Figures show sales of men's apparel rose one percent to $4.3 billion during the first nine months this year, compared to sales of women's apparel which fell six percent to $15.1 billion during the same period.
DAVID FISHER, EXECUTIVE VP, BLOOMINGDALE'S: The suit business has been exceptionally well.
CARROLL: Stores like Bloomingdale's are tailoring their spaces
FISHER: We renovated this area and making more room for men's wear.
CARROLL: Oh, these look nice.
FISHER: This business in this flagship store, there are 16 point variances. So, yes, it's worth doing.
CARROLL: Others are joining in. J. Crew opened two mens only stores this year.
ERIC BEDER, BREAN MURRAY CARRET & CO. LLC: As men step up to the plate and really assert what they like, what they buy, that drives more business.
CARROLL: Even the luxury market has taken note. Louis Vuitton added a new line of men's luggage and accessories. This month, Versace unveiled suit carriers and briefcases. But some analyst say turning a profit in a troubled economy won't be easy.
JOSEPH FELDMAN, TELSEY ADVISORY GROUP: I think it's going to be a tough holiday season anyway you slice it.
CARROLL (on camera): Men can save this holiday shopping season.
FISHER: That could be a tall order. That could be a tall order. We did have a good weekend and there is no spin in that. We had a good weekend. We had a good Wednesday, we had a good Friday, and a good Saturday.
(END VIDEOTAPE)
CARROLL: And they are hoping for a good year, you know. Also, when consumers cutback on spending in October, the men's category did take a hit. But the 8.3 percent drop in sales for men didn't compare to women when you look at what happened with women's sales. They had an 18 percent dip in women's apparel.
CHETRY: Wow. So, why are men buying more?
CARROLL: Well, it's a couple of things. First of all, you've got a lot more young men who are buying into fashion they didn't see in years back. Also, when men buy, men tend to buy and keep whereas women tend to buy and sometimes return. So, I buy and keep, you buy and then sometimes you return.
CHETRY: I will. I'm going to be looking around for a lot more sharp dressed men, right? Because you got --
CARROLL: Well, you got one right here.
CHETRY: Besides you.
CARROLL: You got me, you got Joe.
CHETRY: That's right. You guys -- can I just tell their secret. This is hilarious. You guys both don't -- you left your collar stays.
CARROLL: Yes, (INAUDIBLE).
(CROSSTALK)
CHETRY: These are the things that you guys know. You put them in your collar, they keep them up. So today they are improvising.
CARROLL: So, I got to stick it back.
CHETRY: I love this two. They are using paper clips. The best kept secret. That's helping men all over the country. It was Joe John's idea.
CARROLL: It's a lot cheaper.
JOHNS: It was a rock and roll music day. Everywhere girls go crazy for a sharp dressed man.
CHETRY: That's right.
JOHNS: It's easy tap, all right.
CHETRY: That's right. With paper clips in their collars.
JOHNS: All right.
CHETRY: Jason, thank you.
JOHNS: If you're hitting the road or headed to the airport, stick around. There's bad weather across the country and that means travel delays. We'll tell you where. It's 43 minutes past the hour.
(COMMERCIAL BREAK)
JOHNS: Rob Marciano is off today, but we are not alone. Jacqui Jeras is at the weather center in Atlanta.
Good morning.
(WEATHER REPORT)
JOHNS: Thanks so much, Jacqui. It is now 46 minutes past the hour. We'll be back.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENT-ELECT: She's talking like she's Annie Oakley.
(END VIDEO CLIP)
JOHNS: That was then.
(BEGIN VIDEO CLIP)
OBAMA: And she has supposedly all this vast foreign policy experience.
(END VIDEO CLIP)
JOHNS: This is now.
(BEGIN VIDEO CLIP)
OBAMA: I am proud that she will be our next secretary of state.
(END VIDEO CLIP)
JOHNS: From talking trash to a team of rivals. Jeanne Moos breaks down the history of a most unusual alliance. You're watching the "Most News in the Morning."
(BEGIN VIDEO CLIP)
SEN. HILLARY CLINTON (D), NEW YORK: Thank you for this honor.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(SONG PLAYING)
CHETRY: This song makes me tear up a little for some reason. Brings back some good memories. Welcome back to the "Most News in the Morning."
Talk about change you can believe in. How about the relationship between Hillary Clinton and Barack Obama? It's gone from attitude to gratitude. And as Jeanne Moos tells us it's not just the president- elect who's thankful for the new madam secretary.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT (voice-over): Everybody keeps calling them --
UNIDENTIFIED FEMALE: Team of rivals.
MOOS: Yes. Well, their first rival was the microphone.
CLINTON: If confirmed...
MOOS: I kept over shadowing.
UNIDENTIFIED FEMALE: I am deeply honored.
MOOS: The shorter nominees...
UNIDENTIFIED FEMALE: With the American people...
MOOS: But nothing could overshadow the "that was then."
CLINTON: So, shame on you, Barack Obama.
MOOS: This is "now" angle.
CLINTON: Mr. President-elect, I am proud to join you.
MOOS: That was then.
OBAMA: She's talking like she's Annie Oakley.
MOOS: This is now.
OBAMA: My dear friend Hillary Clinton.
MOOS: Then.
OBAMA: And she has supposedly all this vast foreign policy experience.
MOOS: Now.
OBAMA: I am proud that she will be our next secretary of state.
MOOS: No more elephant rides as a mere tourist. And all those nay sayers from months back?
UNIDENTIFIED MALE: I dreamed of this. Yes, I've dreamed of this. Are you kidding? If I ever had a dream of this like this I'll run to a psychiatrist, I'll say, quick something's got to be done because I'm hallucinating.
MOOS: Well, hallucinate this.
ROSEMARY WATSON, ENTERTAINER: You can call me madam secretary.
MOOS: Wait a minute, that's an impostor.
WATSON: Hi, Jeanne. It's Hillary.
MOOS: Drinking wine and filing her feet in the tub, praying for God to please make Barack go away.
WATSON: He's too young. He's barely out of juice boxes.
MOOS: Hillary impersonators -- are the beneficiaries of Mrs. Clinton becoming secretary of state.
WATSON: (SINGING) MOOS: It means another few years of potential gigs to Rosemary Watson, a struggling San Diego performer, who discovered Hillary's voice.
WATSON: I had no idea that she was living in me.
MOOS (on camera): And then what happened?
WATSON: The flood gates opened.
CLINTON: The sky will open.
MOOS: Just like the real Hillary, Rosemary will have to change her tune about Barack Obama.
WATSON: Barack, I'm coming for you.
MOOS: Impersonators like Rosemary will have to learn a strange new language --
WATSON: (SINGING)
MOOS: Diplomatese.
WATSON: I have no idea where that came from.
MOOS: Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
CHETRY: A nuke attack on U.S. soil by 2013? The warning on weapons of mass murder and terrorists. And what the new president has to do in the next four years to stop them.
Plus, think he's a natural? So is she, and he. The genetic test that may be able to tell if your kid is the next Michael Phelps. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
JOHNS: Welcome back to the "Most News in the Morning." When President-elect Barack Obama takes office in just 49 days, he's promised to tackle issue number one, the economy. But where to start? "The Wall Street Journal" assembled the country's top 100 CEOs and members of Congress to answer that question.
Here now the moderator of that summit, my friend, Alan Murray, Deputy Managing Editor of "The Wall Street Journal."
I guess I can call you my friend.
ALAN MURRAY, DEPUTY MANAGING EDITOR, "THE WALL STREET JOURNAL": Oh, yes, absolutely.
JOHNS: From way back in the day.
MURRAY: Many years, many years.
JOHNS: That's right. So, tell me a little bit about this panel you assembled. Why you did it and how you got them all together in a room.
MURRAY: Well, we thought that there needed to be an opportunity for the CEOs of big companies in the U.S. and also overseas to weigh in on policy choices. Not that they ought to be running the country. Obviously, they shouldn't. But these are people who employ six million people. They have revenues of over $2 trillion. Obviously, how policies affect them and their ability to grow that six million is going to be very important to the country.
JOHNS: So, let's go through the list. I got it right here. And we'll just start at the top. Fiscal stimulus. Number two is educated workforce. Number three, economic vision. Number four, comprehensive energy and environment policy. Number five, tax policy.
MURRAY: So...
JOHNS: You want to say something?
MURRAY: Yes, Joe. Start with fiscal stimulus because I think that that was the overwhelming consensus of the group and it says something about the economic times we're in. They were talking about a fiscal stimulus bill and not a small one. Remember after the election, Nancy Pelosi said 50 to 100 billion. These CEOs who are conservative people said 300 billion plus. That's the minimum. So you're talking about a really big spending bill.
JOHNS: And they want this passed through to consumers, to the users of credit and so on or what?
MURRAY: Well, first of all, they want it done very quickly. They emphasize, you know, things that spend out quickly, infrastructure projects. They talked about energy projects, whether it's solar panels, wind mills. I think this is the kind of thing, frankly, that you're now going to see the administration focus on, taking a cue in part from these CEOs.
JOHNS: All right. So, tax policy. Now, this is one that we talk a lot about for Barack Obama, and I would imagine CEOs have a very different idea about what to do with this tax policy.
MURRAY: Well, yes, they do. No question, it's different. But there were some surprises there. I mean, obviously, these guys would like to see corporate taxes reduced. They think that's necessary in order to compete in the world. You can say that's in their own self interest.
But the other thing that there was a consensus on was raising gasoline taxes. We know we need more revenue down the road. There's no way to do this without some more revenue. Raising gas taxes has double benefits. You get the revenue and you encourage conservation. Why not go in that direction. They know it's not going to be politically popular, but they said we're not going to censor ourselves, this is what we think we should do.
JOHNS: So, when you think of CEOs, you think button-down corporate boardroom conservatives.
MURRAY: They're pretty buttoned there.
JOHNS: Right. Were there any surprising proposals?
MURRAY: Well, yes, it was pretty surprising. You know, we broke up into groups -- four different groups to tackle the main topics that the administration is going to face. The health care group came back and their number one priority was not controlled cost, not universal health care, it was fight obesity. They said the obesity epidemic has caused such expense to business, to the government, to the economy, that it really needs to be tackled with a national presidential level program.
JOHNS: Wow. That is surprising.
MURRAY: Yes. That surprised everyone including, I think, the people in the group. But it was their number one priority.
JOHNS: Headlines right now. We're talking so much about the automakers, Big 3 bailout rescue plan, what have you. Was there any talk about this at all?
MURRAY: Well, I should tell you, first of all, that none of the CEOs of the big three automakers were there. Rick Wagoner -- Rick Wagoner said he was going to come, but then had to pull out, which is not surprising. They have other things on their plate right now. Carlos Ghosn, the CEO of Nissan was there.
There was some talk about autos. Didn't come close to making it into the top priorities of this group. Bailing out the auto companies was not something they saw as essential to the future of the economy.
JOHNS: Wow. Alan Murray, thanks so much for coming in. Just fascinating.
MURRAY: Good to see you, Joe.
JOHNS: Wish I could have been in that room.
MURRAY: It was a pretty interesting conversation. Yes.
JOHNS: Thanks. We'll see you again soon.
MURRAY: Thanks.
JOHNS: Kiran?
CHETRY: Well, we're coming up on 7:00 here in New York. I'm Kiran Chetry. John Roberts is off today. Joe Johns filling in this morning. And we're following breaking news.
Well, the chances are higher than ever that America will be hit with biological or nuclear weapons by the year 2013. That's the opinion of a new bipartisan taskforce created by Congress. The main targets, aggressive rogue states, nuclear smuggling networks and the spread of weapons knowledge. Our homeland security correspondent Jeanne Meserve will have a report on that coming up in just a minute.
The arrows were red, unfortunately, for Asian markets during overnight trading after the Dow tanked 680 points yesterday on official word the U.S. is in a recession. Japan's benchmark Nikkei down over 6.33 percent. Stocks were also down almost 5 percent in Hong Kong.
Well, the CEOs of Ford, GM and Chrysler return to Capitol Hill today. They'll lay out plans for spending a possible $25 billion taxpayer- funded bailout. Their last plea, well, it was last month, failed. With the economy officially in a recession, U.S. car sales are plummeting and the Big 3 are hemorrhaging cash and jobs.
And again, the breaking news. Terrorists targeting America.
