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American Morning
Nuke or Bio Attack on U.S.?; Obama to Meet With Cash-Strapped Governors; Arrest in Hudson Murder Case Expected; U.S. Officially in Recession; President-elect Obama on Iraq Withdrawal Timetable; Hillary Clinton as Secretary of State
Aired December 02, 2008 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: 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 three are hemorrhaging cash and jobs.
And again, the breaking news. Terrorists targeting America. A new bipartisan report commissioned by Congress showing terror cells are actively plotting or any type of biological perhaps a nuclear attack on U.S. cities and that it is likely to happen in the next few years. Again, that's the opinion of this panel. We're getting the details before the report hits the desk of Vice President-elect Joe Biden today.
Our Homeland Security correspondent Jeanne Meserve joins us with today's "Memo to the President."
Hi, Jeanne.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Hi, Kiran. The report says there's a better than 50-50 chance that a weapon of mass destruction will be used somewhere around the globe before the end of 2013. And there is particular concern about one kind of weapon.
(BEGIN VIDEOTAPE)
MESERVE (voice-over): Mr. President, anthrax, small box, Ebola. A report being issued this week says the risk of an attack with a weapon like this is great and growing.
SEN. BOB GRAHAM (D), CHAIRMAN, WMD COMMISSION: We assess that it was more likely that the United States and the world will be attacked with a biological weapon than a nuclear weapon.
MESERVE: Almost 15,000 scientists in the U.S. work with dangerous pathogens to develop vaccines and other counter measures. There is security.
DR. BILL BENTLEY, CHAIR, UNIV. OF MARYLAND BIOENGINEERING PROG: We need to continually push the knowledge front but also recognize that we have a duty to society to make sure that we deal with the regulatory agencies.
MESERVE: But many experts are sounding an alarm. In 1918, a virulent strain of influenza killed an estimated 20-to-40 million people worldwide. That virus has been re-created from scratch in a laboratory, so has the polio virus.
The capability and technology to do this science is spreading across the globe to places like Indonesia, Pakistan and Iran, increasing the odds that a deadly virus or bacteria could fall into the wrong hands and be used as a weapon. It's already happened here with anthrax.
BRIAN FINDLAY, STIMPSON CENTER: We cannot -- we cannot in this world preclude a biological attack. It's simply impossible.
MESERVE: But the congressionally mandated Commission on the Prevention of Weapons of Mass Destruction in a report this week says there are steps that could make a biological attack less likely. Tighter security at U.S. labs handling dangerous pathogens, a strengthening of international treaties, enhance disease surveillance to detect an attack and better forensics to trap where it came from.
GRAHAM: Leadership of this country and the world will have to decide how much of a priority that they place on avoiding the worse weapons in the world getting in the hands of the worse people in the world.
(END VIDEOTAPE)
MESERVE: This panel had planned to travel to Pakistan to do some of their research. But just as they were about to board a plane, they heard that their hotel there had been bombed, the Marriott. And so they cancelled their trip but it reinforces the panel members that something must be done to stem all forms of terrorism.
Kiran, back to you.
CHETRY: And so, what was the consensus, if any, on whether or not we're prepared to fight against any type of attack like that?
MESERVE: Well, the consensus on the bio terrorism sphere is that our margin of safety is shrinking. The recommendation is that the incoming administration appoint one person, sort of WMD czar to marshal forces all across the federal government to better prepare this country for the possibility of a bioterrorist attack, which would be possibly cataclysmic.
CHETRY: All right. Jeanne Meserve at the White House for us this morning. Thank you.
JOE JOHNS, CNN CO-ANCHOR: Kiran, a shocking admission from President Bush. He sat down for a rare interview with ABC's Charles Gibson. Take a listen.
(BEGIN VIDEO CLIP, FROM 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)
JOHNS: The interview was billed as the first of many exit interviews the president is planning. The president also said he felt he would have been compromising his principles if he'd ordered a troop pull out.
The nation's governors are hitting up the next president this morning as the states try to stay afloat without raising taxes or slashing jobs. Barack Obama will be at the governor's meeting in Philadelphia today as reality sets in that the country is officially in a recession.
CNN's Suzanne Malveaux is live for us in Philadelphia. Suzanne, why this meeting? Why now?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Joe, Obama and the congressional Democrats have pledged this economic stimulus package to pass that when he takes office in January to the tune of some $500 billion. Simply the governors want a piece of the pie, about a third of it or so, $176 billion. And what they say is we'll use this money for what they're calling ready to go projects, whether it's water and sewer projects or building roads and bridges, things like that.
Pennsylvania Governor Ed Rendell, as a matter of fact, says that for every $1 billion that they get from the federal government, they believe they can create 40,000 jobs. And the situation here is as you mentioned, Joe, unlike the federal government, the states they actually have to balance their budgets and so they're faced with these terrible choices about raising taxes or actually cutting social services -- Joe.
JOHNS: Sort of an economic pie here and there's only a certain amount of money, I guess, the government can print. And the question is, are the governors likely to get what they are asking for in terms of more money from the federal government?
MALVEAUX: One of the things that they actually are asking for is federal dollars, more federal dollars for Medicaid, to help out poor people in their health cost. Now the last time there was an economic stimulus package that included an increase for that, it died. So that is the question. Are they going to get this kind of money? They're a little bit more hopeful this time around.
They believe in January they've got a better shot at it. But, really it is really uncertain just how much of the pie they're going to get, Joe.
JOHNS: Limited resources. Thanks so much, Suzanne Malveaux in Philadelphia today.
And don't miss Barack Obama's remarks at the National Governors Association meeting. See it live at 10:00 a.m. Eastern on CNN and CNN.com. CHETRY: There's some major developments this morning in the crime that shattered the world of "American Idol" star and Oscar winner Jennifer Hudson. Her ex-con brother-in-law now under arrest, accused of killing her mother, brother and 7-year-old nephew.
Alina Cho has been following the story. She has new details for us this morning.
Hi, Alina.
ALINA CHO, CNN CORRESPONDENT: Hey there, Kiran. 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 have 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 killings back in October. Police have been holding him until now on a parole violation. Now he has reportedly refused to take a lie detector test and reports say he has also stopped cooperating with detectives.
Why? Well, the "Chicago Tribune" is reporting that that happened because police say Balfour actually confessed to the murders to his girlfriend and that that prompted him to go silent. "The Tribune" is also reporting that an ongoing domestic dispute was the motive.
Now, 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 Chicago home. The body of her nephew was found three days later in an abandoned SUV, and police say they have recovered the murder weapon. Just 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: Of course that is the big question going forward. His mom says his alibi is that he was with a girlfriend at the time of the murders. Balfour, we should mention, does have a record. He served seven years on attempted murder back in 1999. He was out on parole when the murders happened.
Jennifer Hudson so far has had no comment to this, Kiran. She as you might imagine has been in seclusion since the murders.
CHETRY: Alina Cho for us. Thank you. Joe?
JOHNS: Obama, the hawk or the dove? His words and cabinet picks sending mixed messages to some anti-war supporters. What it could mean for thousands of troops and for the people waiting for them to come home.
Plus, gone is the private jet, in is the road trip. The CEOs of Ford, GM and Chrysler making some changes to their travel when they head to Washington asking for your money.
It's nine minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: Well, the CEOs of the three major automakers are heading back to Capitol Hill this week to talk about how they would spend a possible taxpayer bailout. This time though it's going to be pit stops and peanut packets. The trio were slammed for taking private jets on their last trip, so Ford boss, Alan Mulally, is driving actually. He is driving a Ford hybrid from Detroit to D.C. Both GM and Chrysler also say that their chiefs are going to travel on the cheap as well.
Twelve minutes after the hour. A lot of people doing a lot of things on the cheap because we're feeling the recession and actually yesterday they made it official.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: We're very careful about calling a recession around here because there's one group, the National Bureau of Economic Research, they're the arbiters of a recession and they said yesterday it began in December 2007, quite some time ago. So we know that this is longer than your average recession. It's longer than your sort of short, shallow recession.
There's some fears that this could be a prolonged affair that could hurt a lot of businesses and a lot of people. That's why the stock market had such a tough day yesterday. Stock market tumbling some eight percent for the Dow Jones Industrial Average. You know, the S&P 500, that's a broader gauge. That's 500 stocks. It's now posting a loss for the past 10 years.
We got to go back to 1997 for these kinds of levels for the S&P 500. That's something that hasn't happened, a 10-year loss for the S&P since the Great Depression. In 1974, both were very dismal times for Americans.
Now, the treasury secretary yesterday, Henry Paulson, talking to Fortune 500, Fortune conference, talking to business leaders and the media saying that the government is going to do everything that it possibly can to keep this economy and the financial system going. This is what he said about being officially in a recession.
(BEGIN VIDEO CLIP)
HENRY PAULSON, TREASURY SECRETARY: The thing that we've known and I've known is that we are in an economy that has slowed down significantly. The American people know that. And I think the American people have known that for some time.
(END VIDEO CLIP)
ROMANS: And you know, the American people, you guys, have known this for some time. Our surveys were showing way back last November, November 2007, that people are putting the economy as issue number one. I mean, the numbers are just telling us this. Now, we're officially saying that people know it. People feel it. It's happening in our neighborhoods.
JOHNS: Yes. And a lot of people sit around and wonder why aren't they calling it a recession. It looks like a recession. It feels a recession. It takes a whole year for them to call it a recession.
ROMANS: Yes. But you know, they have to look back at all the numbers and they have to look back at the data. And every recession is a little bit different. People are kind of scared to call it a recession because you don't want -- if it isn't, you don't want to feed on the anxiety and the confidence problems in the marketplace. And so, it's just one of those things that we're very, very careful about. And now, you know, now we know it's officially here.
The important thing now is how long is it going to last?
CHETRY: Right.
ROMANS: I mean, how long is it going to last? What is it going to take to turn it around? It's incredible what we have done, the kind of liquidity, the kind of technical measures that have been taken by the amount of your money that has been injected in this market and this economy to try to turn things around. When will that start to work? And how will it start to work? We don't really know. We just don't know.
CHETRY: Speaking of that (ph), do you think that driving in the hybrid to Washington is going to make a difference for the automakers?
ROMANS: No. I think it's a -- I think it's an incredible PR move and I think that it comes on a very tone deaf response the last time. So, I mean, they were really hammered for taking a private jet. Really hammered.
JOHNS: It's all about the way things look, isn't it?
ROMANS: It absolutely is.
JOHNS: For sure.
CHETRY: Christine, thanks.
JOHNS: Thanks.
Breaking news this morning. A bipartisan report showing a nuclear or bio-weapons attack on American soil could be looming. We'll look at Barack Obama's national security team and the job they have ahead keeping you safe.
Changing the way we deal with friends and foes. How Hillary Clinton could signal a shift in the way the U.S. uses its super power.
It's 15 minutes past the hour.
(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 as strictly a late night talk show host, a Clinton back in office? Yes!
(END VIDEO CLIP)
JOHNS: Maybe some news people are saying that too. Welcome back to the "Most Politics in the Morning."
President-elect Barack Obama says he's sticking to the 16-month timetable to have troops out of Iraq. But many long-time supporters who voted for his anti-war platform say his cabinet picks may say something else.
CNN's Jim Acosta joins us live from Washington. Good morning, Jim.
JIM ACOSTA, CNN CORRESPONDENT: Good morning, Joe. This is not the honeymoon Democrats expected. Some high-profile Republicans are praising Barack Obama's national security team. That has some of his biggest supporters wondering if the next commander in chief has gone rogue.
(BEGIN VIDEOTAPE)
ACOSTA (voice-over): Republican reaction to Barack Obama's national security team is being described as a love fest.
UNIDENTIFIED MALE: Boy, that's a change I can believe in.
SEN. HILLARY CLINTON (D), NEW YORK: God bless you.
ACOSTA: Hillary Clinton as secretary of state, a brilliant stroke says Rush Limbaugh. Ditto says President Bush's former media guru, Mark McKinnon, who applauds Robert Gates staying on at the Pentagon.
MARK MCKINNON, FORMER MEDIA ADVISER TO PRES. BUSH: The times are so serious that it's not even so much the first 100 days that are important. Now it's the first 100 minutes. And the early moves that Senator (ph)-elect Barack Obama has made are smart, pragmatic and non- ideological.
ACOSTA: But some on the left who flocked to then candidate Obama's anti-war stance say this is not the change they had in mind.
LESLIE CAGAN, UNITED FOR PEACE AND JUSTICE: We think that the breath of fresh air, the election of Barack Obama brings to the country should have spilled over into these departments.
BARACK OBAMA (D), PRESIDENT-ELECT: That's why Harry Truman said the buck will stop with me.
ACOSTA: The president-elect says he's still committed to a 16-month troop withdrawal from Iraq, a pledge that now belongs to his cabinet in waiting.
OBAMA: I expect them to implement that vision once decisions are made.
JIM MILLER, CENTER FOR A NEW AMERICAN SECURITY: I expect that an Obama foreign policy will recognize our situation in the world has declined over the last eight years. And part of the task is to rebuild that and to rebuild America's reputation.
ACOSTA: Jim Miller is with the centrist think tank that has a handful of officials now working with the transition, including Susan Rice, Mr. Obama's pick for United Nations ambassador. In the closing of Guantanamo to the Iraq War, Miller argues change is underway to pragmatism.
I suppose this means that Robert Gates will be carrying out a 16-month timetable for withdrawal if that's what President-elect Obama sees fit?
MILLER: I think that that's -- I think that's right, but at the same time, candidate Obama said that we have to be as careful getting out of Iraq as we were careless getting in.
(END VIDEOTAPE)
ACOSTA: As for all of this gushing from the right, it may have less to do with Mr. Obama's pragmatism and more to do with a bipartisan desire for the country to get on the right track. As one Republican strategist put it, enjoy it while it lasts -- Joe.
JOHNS: Jim Acosta in Washington. Thanks, Jim.
Kiran?
CHETRY: Well, is your kid out there picking daisies in Wright Field? Maybe. Maybe he's just not born with "it." Is there an it? A new test, a simple swab that can tell if your child has athletic ability in his or her genes. We'll talk more about that.
Also, one world class athlete trying to regain his title. Lance Armstrong's big announcement about his quest to wear yellow again.
It's 22 minutes after the hour.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP, FROM ABC)
RUSH LIMBAUGH, HOST, "THE RUSH LIMBAUGH SHOW": You know the old phrase you keep your friends close and your enemies closer. He puts her over at secretary of state. How can she run for president in 2012?
No matter how badly he does. I'm sure he's figuring that if she goes over there she's going to have to quit in 2010. Running for president is a two year job. Then she's got to run against the incumbent and be critical of him, the one who made her secretary of state?
(END VIDEO CLIP)
CHETRY: Well, there's some praise for Barack Obama's secretary of state choice, coming from of all people, Rush Limbaugh. Plenty of reaction from both sides of the aisle on Obama's national security team and in particular about Secretary of State Hillary Clinton.
There's also a new sense of urgency because of a congressional report saying that terrorists will likely hit America with a biological or nuclear attack before 2013.
Joining me now to talk about all of this is Democratic strategist Lisa Caputo, as well as Republican strategist and CNN contributor Ed Rollins.
Thanks to both of you for being with us.
ED ROLLINS, REPUBLICAN STRATEGIST: Good morning.
CHETRY: What do you make, Ed, of Rush Limbaugh's comments that this is really some Machiavellian (ph) plan by Obama to ensure and neutralize that Hillary won't be his rival in 2012?
ROLLINS: Rush talks for a living. And I'm glad he's joining in a lot of other Republicans that are praising this choice. I think at the end of the day, Obama picked the best team.
You know, he's not worried about 2012. He's worried about January of this year, coming up. I think that he picked the best team he could and I think, obviously, a lot of Republicans think the team is a good team. More important, a lot of Democrats think it's a great team. That's what really matters.
CHETRY: Why do you think people have a hard time believing or at least in some circles don't believe that Hillary Clinton's being secretary of state should help out, help out Barack Obama? Why is there still this undercurrent storyline of this rivalry, Lisa? I mean, do you think it's fictional?
LISA CAPUTO, DEMOCRATIC STRATEGIST: Oh, yes. It makes the press fodder, you know, and it keeps headlines blaring. The fact of the matter is she's such a team player, and she has an enormous sense of duty and rises to the call clearly when asked. And when the president asks, you know, you rise to the call.
And you can't discount her credentials here. I mean, she's visited 80 some-odd countries both as first lady and senator. She worked on the Senate Armed Services Committee. She knows how to effect change on both sides of the aisle. She has her experience from the White House as first lady.
CHETRY: Right.
CAPUTO: She's got her experience in the Senate. So --
CHETRY: But are you saying that she doesn't have other -- that her political ambitions are sort of left at the door for now?
CAPUTO: Yes, they are. Yes, they are.
CHETRY: Do you believe that, Ed?
ROLLINS: I believe that for the simple reason no one in the Democratic Party can challenge this guy seriously, no matter even if he's a terrible president, which I hope he's not. Even Jimmy Carter discovered as a terrible president he was, Kennedy tried to challenge him, a real significant Democrat at that point in time got clobbered. It's not a good place for an establishment person to take on the incumbent of your own party.
CAPUTO: You know the other thing too is that we're in a very unprecedented time in this country. Our international global stature has totally declined under this administration presently. We heard a report earlier about the threat of a biological attack in several years.
CHETRY: Right.
CAPUTO: And so, we've got real national security issues which are also linked to our economic problems at home. We're in a recession. So, it's an unprecedented time and people unite, particularly the Democratic Party unites in an unprecedented time like this.
ROLLINS: Historically, presidents spend about 60 percent of their time doing foreign affairs meeting with the leaders from other countries or whatever. This president is not going to have that luxury for the next year or two.
CHETRY: Because of the economic crisis, you're saying.
ROLLINS: He has to be devoted to that probably 90 percent of his time, at least 80 percent of his time. So having someone who represents him around the world, someone who obviously knows the White House very well, more so than anybody else in his team, I think is a great, great asset.
CHETRY: Just quickly before we go, where does that leave, you know, the agenda that a lot of millions of left-leaning voters voted for Barack Obama on the hopes that he would be able to see through things like universal health care, things like ending the Iraq war?
CAPUTO: I think that he's got a very clear agenda which is to tackle the economic crisis. You can't have health care unless you start to deal with your economic issues. Everything relates back to the economy. It affects the stature of our country globally. So he's got a very clear agenda going forward on the economic issues. I'm sure he'll be having this meeting where Paul Volcker is chairing this committee of people that will meet, I believe, in January around economic issues. He's meeting with the governors today about the economic stimulus. So --
CHETRY: Right. But is he worried of it that the liberal blogosphere is getting restless?
ROLLINS: The liberal blog is not relevant.
CAPUTO: Not right now.
ROLLINS: Sixteen million people just voted for this man. They're not going to withdraw those votes. The critical thing here is this is not a war team. This is a team to get us out of a war. And Bill Gates and those people will be extremely helpful to him.
CAPUTO: It's also a team to get us out of a recession.
ROLLINS: Right.
CHETRY: Which we're now officially in.
CAPUTO: Yes.
CHETRY: Thanks to both of you -- not for the recession. Thanks to both of you for being with us.
Lisa and Ed, great to see you as always.
ROLLINS: Thank you.
CHETRY: Joe?
JOHNS: Kiran, it's 29 minutes past the hour. Breaking news this morning.
Shocking new revelations about the Mumbai attacks. India officials confirm that the U.S. warned them twice starting at least a month in advance. India heightened security at hotels but it wasn't enough. Almost 180 people were killed including six Americans in ten coordinated attacks.
Tune in to "LARRY KING LIVE" tonight. Pakistan's president joins him for an exclusive interview to answer the tough questions about the attack on India.
The nation's biggest state economy is in a fiscal emergency. California governor Arnold Schwarzenegger said the state could run out of cash in two months. This comes as the nation's governors make the case for federal aid to President Barack Obama today.
The Giants wide receiver Plaxico Burress arraigned on gun charges in New York City. Police say he accidentally shot himself in the thigh with a gun he wasn't licensed to carry. A hospital worker was suspended for not reporting the incident. Burress who caught the game winning touchdown in last year's Super Bowl could face up to 15 years in prison.
The selection of Hillary Clinton as secretary of state could signal a major change in the way America deals with its friends and enemies. Here's the current secretary of state Condoleeza Rice talking about her successor yesterday from London.
(BEGIN VIDEO CLIP)
CONDOLEEZA RICE, SECRETARY OF STATE: I know that she will bring enormous energy and intellect and skill to the position is. And most importantly I know her to be somebody who has what you need most in this job which is a 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, particularly Great Britain.
(END VIDEO CLIP)
JOHNS: Will there now be a new reliance on diplomacy over power? State Department correspondent Zain Verjee joins us live from Washington now and Zain with so many issues to deal with in the world what is Hillary Clinton going to focus on first?
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well you know the former national security advisor once said that in Washington the urgent always take over the important. Hillary Clinton faces a real danger of just flinting from crisis to crisis to crisis and not being able to just focus and drill down on the policy priorities that she may pick out to do. One good example of this is Secretary Rice last week telling reporters that she was on track, planning to open a U.S. intersection in Iran which would be a huge deal for the crisis in Georgia and all the drama with Russia was a real distraction. And she has to focus on that crisis.
Now the Iran intersection is not going to happen. So what Hillary Clinton will need to do, as well as Barack Obama, is show some really speedy resolve and keep their eye on the importance and be really disciplined about that and not just get distracted by the new cycle of the day, the headline of the day, the crisis of the day.
JOHNS: Now, before Hillary Clinton finally takes that seat in the cabinet, she has to go through the Senate confirm. Any sense of how difficult or easy that's going to be?
VERJEE: Well, short of a major surprise, she'll be confirmed. But Hillary Clinton will likely face a lot of really tough questions from the Senate foreign relations committee, the top republican on the committee saying that there are still legitimate questions that need to be asked about Bill Clinton's financial dealings overseas that may pose a conflict of interest to her job as she goes around the world. One of the other immediate steps, Joe, that she needs to take is going to be filling out her team at the state department. She's been criticized in past, not managing a big operation, campaign, particularly well. So, she's really got pick people at the state department that can run the place smoothly and she also has to reach out to the professional foreign service officers, you know build trust with them, give them some top appointments. That would go a long way. Joe.
JOHNS: Zain Verjee in Washington, thanks so much.
KIRAN CHETRY, CNN, ANCHOR: All right. There's some new fallout to report from the biggest bank failure in U.S history. JPMorgan Chase is now cutting close to 10,000 jobs at Washington Mutual Bank. That's about a fifth of the workforce. You may remember that Chase took over Washington Mutual in September after Washington Mutual collapsed in the mortgage crisis.
Going for number eight. Seven times Tour de France winner Lance Armstrong has made it official now. A spokesman said he will ride in cycling's biggest race next year. The 37-year-old cancer survivor came out of retirement in September. In fact, he talked to us here on our show about training again. Armstrong won the tour for a record seven consecutive years from 1999 through 2005.
Well the Capitol Christmas tree comes to life. Tonight House Speaker Nancy Pelosi will flip the switch at 5:20 Eastern time. That tree made a 4,000 mile journey all the way from Montana. It's decorated with strands of environmentally-friendly LED lights that you can see each night through December 28th.
JOHNS: That is so unbelievable that the Christmas tree is here. Or at least there in Washington.
CHETRY: All the way from Montana. But they are taking it down just after three days. Ours stays up for three months -
JOHNS: Mine too.
CHETRY: Until every single needle falls off. And then you just have a branch.
JOHNS: Exactly. Unbelievable. Where did 2008 go?
CHETRY: I know. Gone in a flash.
JOHNS: Wow. Well, Sarah Palin and Barack Obama at the same conference. The president-elect will attend a national governor's meeting today in Philadelphia. We'll get a preview with Pennsylvania Govern Ed Rendell.
Outrage this morning after jet fuel plunges with the surcharges. Stick around. What's going on? And when can you expect to see ticket prices drop?
(COMMERCIAL BREAK)
JOHNS: Welcome back to the "the most news in the morning." Both Barack Obama and Joe Biden heading to Philadelphia today for the annual governor's conference. They will meet with state executives from both parties talking about ways to deal with the economy, now officially in a recession.
Joining me now is the man hosting the event in Philadelphia, Pennsylvania governor, Ed Rendell. Governor, thank you so much for coming in. So you're going to get a chance to sit down with Barack Obama before he takes office. What are your all going to be talking to him about? What would you like to see him push through on behalf of the governors?
GOV. ED RENDELL (D), PENNSYLVANIA: Well, first let me say how unusual this is. We didn't go to President-elect Obama. His transition team came to us and said he would like to meet with the governors. He would like to hear what your concerns and your needs are. We're going to tell him those. But we're also going to offer our help, help in implementing this plan, suggestions on how to design it. For example the infrastructure piece. We deal with infrastructure questions each and every year. So we have expertise to bring to that and then we're going to help go out and try to sell this to the American people. And that's not all republicans but a lot of republicans and almost all of the democrats are agreed upon that.
What we're going to ask for, Joe, is one a strong commitment to infrastructure repair. Our bridges, our roads, our highways, our water systems, our waste water systems, our schools. Those things are in disrepair all throughout America. We've seen the consequences with the bridge collapse in Minnesota and other places where bridges have fallen. We see the consequences of having inadequate levees in Cedar Rapids, in New Orleans. So number one, it's something we need for public safety, for quality of life and for economic competitiveness. But two, economists almost all agree that for every billion dollars of spending on infrastructure, we create 35 to 40,000 good paying jobs that can't be outsourced and we create a lot of orders for American businesses, for steel companies, concrete, asphalt, lumber and the like. So this is the best way to recharge the American economy.
JOHNS: So, as you - excuse me -
REDNELL: That's OK.
JOHSN: Let me jump in there right now because and excuse me for interrupting but of course, a couple of your republican colleagues are already taking issue with more rescue money from the government. Rick Perry of Texas and Mark Sanford of South Carolina have written in the "Wall Street Journal." We have a full screen.
"The federal government is not only burying future generations under mountains of debt, it is also taking our country in a very dangerous direction, towards a bailout mentality where we look to government rather than ourselves for solutions. We are asking other governors from both sides of the political aisle to join us in opposing any further bailout intervention."
So, I guess the question is, from your perspective where do you draw the line on this, and is this sort of a bailout mentality that's really catching fire around the country?
RENDELL: Right but again, this isn't a bailout. Investing in the country's infrastructure, investing in renewable energy those aren't bailout. These are things that actually produce jobs unlike the bailouts that we've seen of Wall Street and of the banks that don't produce one new job. These things produce economic momentum and we're not coming to the President-elect and saying help us without having taken steps to help ourselves. For example, in Pennsylvania we've already had round one of cuts. In this year's budget over $350 million. I'm going to Harrisburg tomorrow to announce round two of cuts. So we're not saying bail us out. We're saying we've got difficult financial situation like everyone does in the country.
Let's invest in growth, number one. Number two, in terms of the help we need on things like additional expenses for the Medicaid program. Sure we would like some help from the federal government but we're willing to take the problem of our financial deficits into our own hands first. So, we're not coming with our hat and handout. And by the way Governor Perry and Governor Sanford are going to will find themselves in a minority even in their own party. Governors like Governor Schwarzenegger of California and Governor Crist of Florida, leading republican governors are on board, 100 percent on infrastructure and on renewable energy and on things that can create movement for this economy.
JOHNS: Governor Ed Rendell from Pennsylvania, thanks so much. Looking forward to the meeting and we'll certainly be watching.
RENDELL: Thank you.
JOHNS: Kiran.
CHETRY: Born to run. There's a new simple test that can tell if your kid has what it takes to be a world class athlete. But is this really true or is it bogus? We're going to take a look. 42 minutes after the hour.
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CHETRY: Welcome back to AMERICAN MORNING. A live look this morning, Milwaukee right now is clear and a chilly 18 degrees. Mostly cloudy later. Going up to a balmy 34. It will feel that way after 18. Jacqui Jeras is in for Rob Marciano today. Are they expecting a little bit more of the white stuff in Milwaukee as well, Jacqui?
JACQUI JERAS, CNN METEOROLOGIST: In fact, they are, Kiran. About 6 1/2 inches of snow there in the last two days. Another clippers are going to be coming on through by late tonight. You can see a few of those flurries and maybe another three inches on top of what you already have throughout the day tomorrow. So get ready for that next round. We're already seeing snow showers still here across the Great Lakes. Most of this is just lake-effect snow showers. Heaviest in upstate New York, off Lakes Ontario and Lake Erie. We got some light snow showers here just kind of dusting the area across Detroit and up towards Lansing.
We've also got some light snow showers around (inaudible) so use a lot of caution if you're traveling today, especially those bridges and overpasses, really, really slick. Wet weather across parts of the southeast. That strong cold front still making its way through here bringing showers and thundershowers. Miami, you're just about to get hit with some of that heavy rain. So heads up on that.
Big weather story today outside of that is just the wind. It looks all right in Chicago this morning. Looks all right in New York City this morning. But we've got a lot of blustery conditions and that's enough to hold things up at the airports, unfortunately. So those delays we had them this weekend and we had them yesterday, you're going to see them today again because of the wind. But it should keep them down just a little bit.
Coolish across the country. Highs in the 30s across the midwest. We'll see 40s across the east. And very warm into the Rocky Mountain states but watch for a 10 to 23 drop between today and tomorrow. Kiran.
CHETRY: That and the wind. All right. Bring the hat and gloves. Jacqui, thanks so much. Joe.
JOHNS: Here's what we're working on for you this morning. With oil prices dropping, some airlines are lowering their fuel surcharges. But that doesn't mean you'll be paying less to fly. We'll explain why. Plus as a handful of terrorists lay siege to Mumbai the world watched for days but is that rolling coverage actually part of the problem? It's 47 minutes past the hour.
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UNIDENTIFIED MALE: If any of you want to run home to mama, now is your chance.
No? Don't just stand there and try to think. Come on, move it, move it.
(END VIDEO CLIP)
CHETRY: Well "Rudy" wasn't a natural. He had to grind it out with the big boys at Notre Dame. But now there's a test to see if your child has athletic ability in his or her gene. Medical correspondent Elizabeth Cohen joins us now from the CNN Center. Give us a reality check here. So there's a claim that you can actually tell just by doing a cheek swab right whether or not your kid is going to be the star quarterback?
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: That's right. We're talking about kids much younger than in that movie, Kiran. We're talking about kids ages one to eight. This company claims swab your kid's cheek, pay us $150 and we'll help predict the chances that your kid will be a star athlete. We ran this by several geneticists at major universities, Kiran, and they said this is snake oil. This is balderdash. That's what an English geneticists said to me. They said this simply doesn't work. That there are so many different genes that will predict whether or not your kid is going to be an athlete that knowing about just one of them they said doesn't really make a difference. Kiran.
CHETRY: That's interesting. What are their claims though, that they are able to figure this out just by looking at one or two certain genes?
COHEN: Right. Exactly. This is what the company claims. The company says, look, if you tell us, you know, if we get your kids' genes, this is what we can do. They say "people are misunderstanding" - this is the company that sells this test. They say "people are misunderstanding what this tool is. They say we already know that it takes 10 years at least to develop into an Olympian. Our testing will help start that process. In other words, this company is saying look we are not going to say for sure that your kid is going to be an athlete or not an athlete based on this gene, but we can give you some idea about whether it is worth investing time and money into your child."
CHETRY: So you said that a lot of the geneticists say it's bogus. But did they say that there is going to be ever be a time when we would be able to do a genetic test for things like athletic ability?
COHEN: I tell you Kiran, the geneticists that we talked to said no. They said there are so many different things that go into making an athlete. Your mental attitude, your body size. Your strength. So many different things. And they also said, look, you don't really need a genetic test for some things. If mom and dad are five feet tall, the chances that their son is going to be a center for the NBA are slim to none. So they said you sometimes you can just look and make predictions. But as far as actually going into the DNA and coming up with some kind of test, they said they think that will never happen.
CHETRY: Very interesting. All right. Save your $150 then, right.
COHEN: That's what they say. Right.
CHETRY: Thanks, Elizabeth.
COHEN: Thanks,
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CHETRY (voice-over): Googling the governor.
UNIDENTIFIED MALE: Why did you decide to come here today?
UNIDENTIFIED FEMALE: To see Sarah Palin. That's the only reason.
UNIDENTIFIED MALE: What is it about Sarah Palin that you - attracts you?
UNIDENTIFIED MALE: Sarah Palin. Well I mean, she's hot.
CHETRY: What's making the hockey mom one of the most searched women on the web?
And the tiny image that could change the world.
UNIDENTIFIED MALE: We both just went like this. In our mind I think we were saying wow.
CHETRY: In search of aliens. And finding a worm on Mars. You are watching the most news in the morning.
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CHETRY: Well if there is a silver lining into the tough economic times, it certainly has been the gas prices lately. Today gas prices down for the 76th straight day. Now averaging just $1.81. It is about half - in fact less than half of what we were paying over the summer. Now back in the summer we saw oil peak at $147 a barrel. And the airline started to nickel and dime us with these fuel surcharges, fees also for bags, for pillows even for food and drink in some cases. But now that jet fuel prices have dropped, why haven't we seen the costs of flying dropping as well? It has gotten a lot of people outraged. And this morning I'm joined by Kate Hanni from the Coalition for Airline Passengers bills of rights known as Flyer's Rights. Katie, thanks so much for being with us this morning.
KATE HANNI, FOUNDER AIRLINE PASSENGER COALITION: Thanks for having me.
CHETRY: So I take it that you are one of the many outraged by these fees. I mean, we saw oil as we said spike and we know how much jet fuel was costing. Now that we have seen these prices come down, why are we still seeing some of these higher fees tacked on?
HANNI: Well, it is all about money. It is all about the airlines increasing their profit margins. And I think what is deceptive for the traveling public is that the cost of oil has been going down since August. But the air fares were actually going up until a couple of weeks ago. So it has been almost like impossible for people. I feel like a forensic traveler now trying to find the best fares and all of the bundled fees or unbundled fees and what it is really going to cost to fly.
CHETRY: Yes. It has been difficult to try to figure that out. You know our Christine Romans spoke to a representative from the Air Transport Association. He told her basically that these fees don't really compensate carriers for the cost of fuel that the airlines are expected to lose between $4 billion and $6 billion this year alone. And that they are really not trying to turn a big profit but rather just survive in these tough times. Do you buy that argument?
HANNI: I don't buy that argument. They have added on so many fees for people when fuel costs are at an all-time low for the last year and a half. We are looking at a time of great economic distress for people and a time when people don't trust corporations and their executives who have been getting these enormous multimillion dollar bonuses and I think it is $42 million in stock options that the Legacy carriers have gotten in the last year, or just the CEOs of the Legacy carriers. So people are not being fooled by this anymore. And I think that they are shooting themselves in the feet with regard to these unbundled fees. It's kind of like going to a buffet and then being told everything is included. But by the way, you have to pay us for the salt. And we didn't salt your meat. So I think - I think people are disgusted and they are not buying it.
CHETRY: You know, you are going to be meeting with President-elect Barack Obama's transition team later today at the Department of Transportation. What are you going to talk to them about? Especially as it relates to these fees.
HANNI: I'm going to be talking about truth in advertising. I'm going to be talking about at the point of purchase, having all of the fees that a passenger has to pay right at the first page or when they call to book their ticket. However it is that they are booking their ticket. One should be informed of what the total fare is going to cost. And also, with regard to these fuel surcharges, you know, they took the - fuel surcharges out of many of the fares. But then they added them into the cost of the fare. And for several months, they told the flying public that they had actually removed them as if they were saving money but they weren't. So there is a real lack of authenticity and honesty in their advertising. So we want some truth, some integrity and honesty brought to their advertising.
And our hotline is always available for people if they can't figure out in the interim what those fares are. We are free. They can call. We will call them back and we'll answer all those questions within a few minutes of them placing a call to us.
CHETRY: You know and Kate, there are some who say I like this unbundled situation because I'm bare bones. I don't need to check three extra bags. I don't need to drink soda and eat on the flight. I want to pay the least amount possible just to get from point A to point B. What about those people that are happy with this a la carte it seems movement within the airline industry?
HANNI: I haven't heard from one of them so I can't answer that. I don't know if anyone that's particularly happy about it. I know that most of the people that I talk to are trying to shove as much as they can into their carry-on bags so that they don't have to pay those extra fees. They are having to pack for the possibility of being stuck for protracted amount of time on the tarmac. Because they have no idea how long they might be held. And the airlines are going to be paying for everything. I heard an interview with the president of an airline some time ago talking about the possibility of pay toilets on aircraft. So this unbundling can and effectively could go far too far for safety of passengers.
CHETRY: Wow. I hear you. All right. Very interesting. It will be interesting to see if you get anything out of them today when you go talk at the Department of Transportation. Kate Hanni, as always, great to talk to you. Fliersright.org is the website. Thanks.
HANNI: Thanks so much.
