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American Morning
Obama Transition Team to Release Internal Report of Blagojevich Contact; Sopranos Actor Acquitted; Travel Freeze in Midwest; Hillary Clinton's Role in the State Department
Aired December 23, 2008 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
JOHN ROBERTS, CNN ANCHOR (voice-over): From a vicious life of abuse to a loving home for the holidays.
UNIDENTIFIED FEMALE: He's grown a lot and learning a lot.
ROBERTS: How Michael Vick's dogs are slowly learning to trust people again.
UNIDENTIFIED FEMALE: What's she doing?
ROBERTS: Plus, daddy daycare.
UNIDENTIFIED FEMALE: He used to do the (INAUDIBLE).
UNIDENTIFIED FEMALE: OK.
ROBERTS: What to do with a husband who just hates to shop?
UNIDENTIFIED FEMALE: (INAUDIBLE).
UNIDENTIFIED MALE: Hi, guys.
ROBERTS: Just remember to pick him up at man parking.
UNIDENTIFIED MALE: Merry Christmas.
ROBERTS: On this AMERICAN MORNING.
(END VIDEO CLIP)
ROBERTS: The European innovation that may soon make its way over here. Frederik Pleitgen doesn't want to go shopping so they park him at the man park.
CAROL COSTELLO, CNN ANCHOR: I love it. What a great idea.
ROBERTS: Thanks for being with us. It's Tuesday, it's the 23rd of December.
Two more days to go until Christmas. What's it going to be like out there in the retail scene, Carol Costello? What do you think?
COSTELLO: I think it will be cold just like it is outside. ROBERTS: Yes. I'll tell you. I mean, there's certainly lots of people who are putting things on sale and not a whole lot of people in the stores these days.
Lots to cover for you today. Happening today, President-elect Barack Obama will reveal just how much contact his transition office had with Illinois Governor Rod Blagojevich. And CNN has learned the internal investigation will show that there was some contact between Obama's chief of staff, Rahm Emanuel, and the governor as well as the governor's former chief of staff. But the report is expected to conclude that there was no wrongdoing involved in any of those contacts.
Right now, Wall Street bracing for what is expected to be a slew of dismal economic reports. Among them experts forecast the sales of new and existing homes will have fallen in November. Investors also expect a drop in the gross domestic product, which is a measure of goods and services produced in this country. We're going to bring you the results of that report when it's released. That will be at about 8:30 a.m. Eastern time.
Senator Hillary Clinton reportedly laying the groundwork to expand the influence of the State Department. According to the "New York Times," Clinton wants a bigger budget and a more prominent role in dealing with global economic issues. To help Clinton secure a larger share of financial resources, she is said to be recruiting Jacob Lew, the budget director under former President Bill Clinton, the current chief operating officer for investment unit of Citigroup.
From coast to coast, winter roaring in with a vengeance. Heavy snow and bitter cold making holiday travel this morning before Christmas eve a real mess. Storms virtually shutting down the airport in Seattle. Snow blanketing much of New England. One town in Maine is waking up to -- you know how much snow? Three and a half feet, and it's nowhere near over. A major storm in the Midwest brewing right now.
And our Rob Marciano watching it all from the CNN weather center down there in Atlanta where they rarely get snow but this winter you never know about that.
Rob, a lot of people are saying global warming, what global warming?
ROB MARCIANO, AMS METEOROLOGIST: Yes. Well, I suppose you can argue that, you know, warmer air gives you a little bit more precipitation. That would include snow and we got plenty of that from Portland, Maine to Portland, Oregon and everywhere in between. Right now, the in between is what we're worried about because we've got snow that's falling in some big cities. And if you have to travel through Minneapolis, Chicago, Detroit, St. Louis, any of those cities here this morning or through this afternoon, we're looking at a fairly decent mess.
Right now, it's mostly snow north of Memphis in through St. Louis, Peoria and Chicago. You're probably going to see several inches of snow here before the day is done up to Milwaukee, Cheboygan, and in through Minneapolis as well. But the forecast gets a little bit tricky because we start to work some warm air into the mix as well.
So two to four inches of snow before it begins to change over to freezing rain tonight and then maybe briefly over to rain tomorrow and then back over to snow. So local forecasters certainly got their hands full here. Freezing rain an issue especially this morning through the early part of this afternoon through St. Louis and into through Indianapolis and then also changing over to rain. You might even see some thunderstorms tonight.
So the atmosphere really getting agitated here and we're going to see a mixture of just about everything before it's done. Thirty-one degrees in New York. By the way, New York, D.C., almost all the way up to Boston, I think you're going to see things warm up dramatically and for you mostly a rain event by the time this system gets to your area. Forty-three in Nashville. It will be 37 degrees in Kansas City.
So here's your mix and again, the timing of it is kind of all over the place. Just keep an eye on things because when you think it's one thing it will change back to another. And this storm ejects out of the Colorado Rockies where they'll see another couple of feet and snow. Avalanche warnings once again posted and in some cases in Portland and Seattle we saw snowfall amounts, John, upwards of 20 inches in an area much like Atlanta where they only see maybe one, two, three inches of snow for the entire winter.
ROBERTS: I was in Woodstock up in the Catskills over the weekend. They had a little more than a foot of snow, but it was just so pretty up there. Just a beautiful country to go when there's a snowfall.
MARCIANO: It is pretty as long as you don't have to drive through it.
ROBERTS: When you have a nice guy like Petey (ph), one of our floor managers who loaned me his four wheel drive, it made it very, very easy.
Rob, thanks. We'll check back with you soon -- Carol.
COSTELLO: You loaned him a car?
ROBERTS: Yes, he did.
COSTELLO: He is a nice man. In just a few --
ROBERTS: He's a good buddy.
COSTELLO: He is a good buddy.
In just a few hours, the president-elect's transition team will release the internal report into their dealings with disgraced Illinois Governor Rob Blagojevich. Here's CNN's Ed Henry who's traveling with Barack Obama while he's in Hawaii.
ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: John, Carol, today is the day that Team Obama plans to release its long-awaited internal investigation into what contact they had with Illinois Governor Rod Blagojevich and his staff. This matters, of course, because of lingering questions about what if any role Obama aides like Rahm Emanuel had in the so-called "pay to play" scandal in Illinois, specifically these allegations that the governor essentially tried to auction off the former U.S. Senate seat of Barack Obama.
You will not be surprised to learn that two Democratic officials tell me that this report will largely exonerate Team Obama, specifically one Democratic official saying about the whole controversy. "This is a lot about nothing." These two Democratic officials basically say the report will suggest that Rahm Emanuel maybe had limited contact with the Illinois governor, a little more contact with the governor's former chief of staff.
But bottom line, there was no wrongdoing in these conversations, certainly no criminal wrongdoing in the phone calls. What's interesting though is critics will raise questions about why if there was no wrongdoing did Team Obama wait until Christmas week when not a lot of people are paying attention to finally release this report.
I can tell you a Democratic official insisted the timing was only dictated by the prosecutor in this case, Patrick Fitzgerald. That he basically did not want an earlier release of this report to hamper his own ongoing criminal investigation -- John, Carol.
COSTELLO: Thanks, Ed.
Vice President-elect Joe Biden is talking about the changing role of the vice president and how he will differ from Vice President Dick Cheney. And last night on CNN's "LARRY KING LIVE," Biden detailed what his role will mean for America and for Barack Obama's administration.
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JOE BIDEN (D), VICE PRESIDENT-ELECT: I said I want to be there. When you make every critical decision you make, I want to be in the room. Because I have a significant amount of experience, I'd like to be able to give my input. You're the president. If you conclude my judgment is not the right judgment, I abide by that but I want an opportunity to have an input.
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COSTELLO: There you have it. And Biden has some serious work to do. Today he will meet with the incoming administrations' top economic advisers to work on the president-elect's recovery plan.
ROBERTS: New this morning, police in Dallas, Texas searching for a suspect they say opened fire on several vehicles during the afternoon rush on Monday killing two people and wounding another. They say the motorist shot at a car and three semi trailers. The alleged shooter described as balding, white, in his 40s, driving a tan Ford F-150 extended cab pickup truck.
The NTSB says early evidence indicates no problems with the tires, brakes or landing gear on a Continental Airlines jet that veered off a Denver runway and burst into flames over the weekend. Investigators listening to the flight data and cockpit voice recorder say they heard unusual sounds just moments before the plane crashed and burned. Thirty-eight people were injured including the pilot.
With California mired in a budget crisis, the state's controller warns that they could run out of money in about two months if no compromise is reached. Governor Arnold Schwarzenegger and state lawmakers are blaming each other for the budget impasse. It appears that no deal will be reached by the end of the year.
A former soprano's actor has been cleared of murder charges in the killing of an off-duty New York City police officer three years ago. A jury did find Lillo Brancato Jr. guilty of attempted burglary though. Reporter Jim Dolan with New York affiliate WABC has reaction to the verdict this morning.
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JIM DOLAN, NEW YORK AFFILIATE REPORTER, WABC (voice-over): As disappointed police officers filed out of court, Daniel Enchautegui's sister just couldn't believe what she had just heard.
YOLANDA ROSA NAZARIO, VICTIM'S SISTER: What message is this sending out to the New York City police officers today? It's wrong. Do I have to say it?
DOLAN: 32-year-old Lillo Brancato, a former small time actor and big time drug addict, was acquitted of the murder of off-duty police officer Daniel Enchautegui and found guilty instead of attempted burglary. Police officers were outraged.
PATRICK LYNCH, PBA PRESIDENT: A pact has been broken with the New York City Police Department. We pledge to put ourselves at risk, but the citizens pledge to back us up when we're hurt, maimed and injured.
DOLAN: Brancato and Steven Armento were trying to break into a home in December 2005 when Enchautegui who lived next door came out to see what was going on. Armento shot and killed the police officer and was later convicted. Brancato was acquitted.
JOE TACOPINA, BRANCATO'S DEFENSE ATTORNEY: Our reaction is relief, Jim. I mean, this is not, you know, we were asked before if this was a happy occasion, if it was, you know -- this is not a victory. This is not a case to celebrate no matter what the verdict was.
DOLAN: Brancato's mother did not talk. Her son was trying to get in the home that night to get drugs. LYNCH: Because this animal's drug habit, he wanted to get drugs to a point that he would kill a New York City police officer. This would not have happened if it was not for him.
(END VIDEOTAPE)
ROBERTS: That's Jim Dolan from affiliate WABC in New York. Lillo Brancato is facing three to 15 years in prison on that attempted burglary charge.
COSTELLO: And this morning, doctors say there is nothing serious behind the pain in President Bush's left shoulder. The president had an MRI while at Walter Reed Army Medical Center yesterday while he was visiting wounded troops. Mr. Bush also presented seven of them with purple hearts including U.S Army Private First Class Joseph Devon of Baltimore. And Lucas (INAUDIBLE), a staffer in Missouri, who was injured while serving in Iraq. The president also met with the family of Corporal Isaac Jensen (ph) of Utah. So congratulations to all of them.
When holidays roll around, it's spend, spend, spend. So how can you get your finances in shape for the New Year? We've got some great tips on how to manage your money.
ROBERTS: And what was Sarah Palin's biggest mistake during the presidential campaign? Hear what she's saying about where the mavericks went wrong.
It's now 10 minutes after the hour.
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ROBERTS: This Christmas the snow making it difficult to get just about anywhere. How can you even see out of the windshield here? Check out this video. It's from one of our i-Reporters in upstate New York. Near white out conditions as they drove through what amounted to 16 inches of snow on Sunday.
And this picture here from another one of our i-Reporters who says it's a holiday tradition to dress up the dog. Nobody asks the dog before they do it.
COSTELLO: It's so wrong.
ROBERTS: No, the dog is saying, God, I look so ridiculous.
(LAUGHTER)
Send us your i-Reports. Just go to CNN.com/am. We'll show the best ones every morning and declare our winner on Christmas morning.
COSTELLO: I can't wait for that.
ROBERTS: Poor puppy.
COSTELLO: It's wrong. Oh, this morning let's talk some more about the snow and the sleet and the ice and the extreme cold because it's making travel absolutely miserable. It's making travel hell for most of the country.
Right now, flight cancellations and delays on both coasts are rippling through the system. Oh, that looks bad, doesn't it? Matt Brock from our affiliate WJLA is live at Reagan National Airport in Washington.
I saw a lot of canceled signs there, Matt.
MATT BROCK, WJLA REPORTER: Well, there are a few this morning. A few delays mostly here. We have the cancellation signs yesterday pretty bad. Today things have improved a little bit. A lot of delays to cities like Seattle, Chicago, even Atlanta and Dallas this morning. So it's sort of that ripple effect.
The weather here in Washington has been cold but pretty dry. So we haven't had the problems here that they've had across the country. But we've been affected with that ripple effect where flights have been canceled. A few flights in New York and we're really stuck here at Reagan National. They get started slowly here at Reagan National. That's because there's noise restrictions here over the nation's capital. So they get started a little later than most airports.
And so, so far this morning, not so bad but then they're expecting that second round of weather across the country to hit west to east over the next couple of days so we expect, again, starting later this afternoon a few more delays and possibly some cancellations. So we had a rough, rough day here at Reagan National yesterday but the good news it's improved for today. Who knows for Christmas eve -- Carol.
COSTELLO: Yes, I know. Who knows?
There is a nice nail salon at Reagan National though. I always go there when my flight is delayed. Don't you go there, John?
ROBERTS: (INAUDIBLE) As often as I possibly can.
COSTELLO: Poor Matt. Thank you, Matt. We appreciate it.
ROBERTS: I've been taking the train more and more on the commute between Washington and New York.
COSTELLO: That's what I do to. I don't want to deal with airports anymore.
ROBERTS: Takes a little longer but it's very reliable.
Well, if your New Year's resolution is to get a handle on your money, you first need to know what you owe and what you own. Gerri Willis joins us with her guide to organizing your financial life.
I was telling you off camera, I need a patch kit just to patch it on the holes of my wallet because every time I put a dollar on the top it seems to somehow leak out the bottom.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Leak out the bottom. I think everybody complains about that. If you want to track your money more these days, it's no easier than turning on your laptop computer and plugging into Microsoft money or Quicken. Quicken currently has a free version of its budgeting software. And let me tell you this stuff is special. I did this the other day. Check it out.
It tells you where you're spending your money. See that pie chart. It breaks it down for you. You can load in all your information, all your data. You see everything on one page from your checking to your savings. Here's a page that shows you how much money you have left until your next paycheck. You can also figure out where you're money is going, as I said before, and how much you're spending in each category. Is it over or above? How much you want to budget for that area. Really easy peasy (ph).
It will give you alerts on your phone about --
COSTELLO: Did you say it's really easy peasy?
ROBERTS: She said easy peasy.
COSTELLO: I think that's a good description.
WILLIS: Anyway, I think it's fantastic and really a great tool and it's free. Did I mention free?
ROBERTS: You mentioned that. That's the best part.
WILLIS: There are no leaks in your wallet with the Quicken online software, so it's a great idea out there. And, of course, another thing that folks want to do is get rid of the clutter and it's a great time of year to do that. Throw away the things you don't need.
Let's take a look at the things you want to get rid of and the things you want to keep when it comes to your financial data. Of course, you want to keep the birth certificate, the marriage certificate. Tax returns for seven years then you can dump them.
In terms of the things that you definitely want to get rid of right away, 401(k) statements. Hold on to them for a year then throw them away. Same goes for the credit card statements. You can definitely get rid of those especially if you're online. The key now is online.
ROBERTS: And you mean I don't need my credit card statements from 1996?
WILLIS: You know, can I tell you, until recently how much stuff I had just cluttering up the house.
COSTELLO: No. Please, please, talk to my husband because he keeps every single record in detail in files and we have like three desks in our home.
WILLIS: You don't -- it's too much stuff. You're never go back to it. Just keep that in mind.
COSTELLO: Did you hear that, honey?
ROBERTS: Dump it.
WILLIS: This is for Carol's husband right here right now.
OK. Another thing you want to think about is obviously streamlining your bills. And can I just talk about online bill pay for just a second.
This makes your life so much easier. You don't have to deal with all the mail coming in, trying to find stamps. It just makes your life much more simple.
All you need to know essentially is the address of the person you're sending this regular bill to. You need your account number. You can do it online very quickly. And this thing will help you do the budgeting much more quickly too.
I'm telling you, you want to speed up your financial life, organize it and then we can get to talking about plugging the holes in your wallet.
ROBERTS: Online banking is a great way.
WILLIS: It totally is.
WILLIS: It's so much easier. I know a lot of people have a lot of concerns about is it safe. It's all about the kind of passwords you use on that Web site. Make sure they're not -- nobody can figure it out. Just make sure your passwords are excellent and then don't worry about it. Because at the end of the day all this stuff is moving electronically anyway.
ROBERTS: Got you.
COSTELLO: That's right. Then it's easy peasy.
ROBERTS: Gerri, thanks for those tips.
WILLIS: My pleasure.
ROBERTS: Hey, it's no secret that most men were not born to shop but retailers are not about to give up on half the population. See what some places are doing to make the stores more appealing for the guy.
COSTELLO: Oh, and Barack Obama like you have never seen him before. A paparazzi picture catches the president-elect in a rather unpresidential pose. We'll show you next.
ROBERTS: From a vicious life of abuse to a loving home for the holidays.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: He's grown a lot and learning a lot. He's doing a lot better.
(END VIDEO CLIP)
ROBERTS: How Michael Vick's dogs are slowly learning to trust people again.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: These dogs just need love.
(END VIDEO CLIP)
ROBERTS: You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
ROBERTS: It's coming up now on 22 minutes after the hour. Here's Tuesday's "Political Ticker."
Alaska Governor Sarah Palin says her biggest mistake of the presidential campaign was not talking to the media enough. In an interview with "Human Events" magazine, the former Republican vice presidential nominee says, "I could have called more shots on this." And Palin regrets opportunities that were missed to speak to more Americans through the media.
Is Dick Cheney the worst vice president ever? Twenty-three percent of those questioned in a new CNN/Opinion Research Corporation poll say yes. Forty-one percent rate Cheney's perform as poor. Thirty-four percent say he's been a good vice president, and just one percent think that he is the best vice president in American history.
COSTELLO: Well, that would be a big one.
Barack Obama is striking a pose while on vacation in Hawaii. Take a look. This picture on the front page of the "New York Post" this morning.
It captures a shirtless and may I say a rather buffed president- elect. A Los Angeles photo agency has released dozens of shots of the Obamas and their daughters taken at their beachfront home in Hawaii this past weekend right under the noses of the Secret Service.
And Barack Obama's transition team has been flooded with resumes since setting up shop. A spokesman says more than 300,000 people have expressed interest in working for the Obama White House. In contrast, President Bush's transition team had 44,000 applicants in the days before he took office in 2001.
And don't forget you can get all the updates from our "Political Ticker" any time even if you're away from your television set. Just go to CNN.com/ticker.
ROBERTS: Couldn't be easier, Carol.
COSTELLO: That's right.
ROBERTS: Team Obama takes office in just 28 days. The president-elect's cabinet is now all but complete. But as CNN's Jessica Yellin tells us now, not everyone is thrilled with Barack Obama's choices. We're going to have that for your in just a minute, Carol.
COSTELLO: And the "New York Times" having to wipe egg off its face after publishing a letter they thought was from the mayor of Paris but it turns out not to be. It was a fake. The letter criticized Caroline Kennedy's effort to replace Senator Hillary Clinton in the Senate. It read in part, "With all the respect and administration I have for Ms. Kennedy's late father, I find her bid in very poor taste. And after reading your news article about her, in my opinion she has no qualification whatsoever to bid for Senator Clinton's seat."
Now, after discovering the hoax, the "Times" issued an apology on its Web site saying, "This letter was a fake. It should not have been published. Doing so violated both our standards and our procedures in publishing signed letters from our readers. We have already expressed our regrets to Mr. Delanoe's office and we doing the same to you, our readers."
ROBERTS: Wow.
COSTELLO: Oops.
ROBERTS: It's amazing that a newspaper can get caught like that.
COSTELLO: Yes.
ROBERTS: Incredible.
Hey, also in today's "New York Times," some information about Hillary Clinton and what she's going to do when she takes over the State Department, reportedly making plans for a bigger and more powerful State Department. The "New York Times" says that Clinton wants a bigger budget, a more prominent role in dealing with global economic issues. And she's assembling the team to do that.
Joining us now from Washington to talk more about this, Mike Allen. He's the chief political correspondent for "Politico."
And it seems, Mike, that Senator Clinton when she becomes secretary of state if confirmed really wants to increase the power of the State Department, wants to sort of take away some of the role that the Treasury Department has been playing in the Bush administration, maybe even take -- try to take away a little bit of the power that the Pentagon has been exercising in foreign affairs as well. A real change. MIKE ALLEN, CHIEF POLITICAL CORRESPONDENT, "POLITICO": Well, John, it is. And it fits in with the larger view that President-elect Obama has for his government. And that is to be very muscular. Both he and Senator Clinton ran on the idea that America needed to reconnect with its allies that America had really problems around the world.
You'll remember that during the campaign her husband, Bill Clinton, suggested that he and the first President Bush go on an around the world tour to rebuild goodwill. So this is another sign that they are thinking big on the economic side. The stimulus package that she's talking about is bigger than the Vietnam and Iraq wars added together.
So this is the reason that Senator Clinton was chosen for this, that she has the stature to get more budget, to get more power, to get key experienced people to go around to world capitals and really show that America's back as they say.
ROBERTS: She recruited as one of her deputies, Jacob Lew, who was her president -- her husband rather, President Clinton's budget director. So he knows where all the money is hidden. But, you know, we're talking about an awful lot of cash. If you want to increase the budget of the State Department, at the same time you're increasing the budget of the Pentagon to deal with terrorist threats, you've got these stimulus packages out there. The new $700 billion package that he's talking about for building infrastructure, where does all these money going to come from?
ALLEN: Well, John, that's a great point. And behind the scenes of the Obama transition, that's a real problem they're having. Bush intentionally in some cases shrunk the government. They want the government to be bigger. So as these transition teams go in, they're discovering there's places especially on the White House staff that are smaller than it was under Clinton. And yet President-elect Obama wants to do more.
So it's a little dilemma. It's part of the problem that they're having trouble staffing up. It could be April to June before they have all their staff in place and yet they have this incredible stack of problems on their desk, the biggest inbox of any president since FDR. So that's one of the things that they're trying to -- trying to work out. And the fact that Senator Clinton personally can draw on her contacts, her family contacts to do a lot of this is one of the big reasons she's there.
I can tell you, even though they're a little concerned about some of the drama at first, you talk to the Obama people behind-the-scenes, they're happy to have soon to be secretary Clinton. They think that she's going to be a big help on the world stage at the same time that he's tied down with Congress, the economy and this unemployment rate that they fear is going to go up to eight percent.
ROBERTS: But, Mike --
ALLEN: This could be a real time of testing for our country. ROBERTS: What about potential interagency rivalries, though? We saw a lot of that in the first term of President Bush when Donald Rumsfeld and Colin Powell were really at odds with each other and Condoleezza Rice was trying to play referee as the national security adviser. Is there a chance that if Hillary Clinton as secretary of state amasses a bigger budget, greater power that she will run afoul of people at treasury and Pentagon who want to keep their fingers in that pie?
ALLEN: No. You put your finger on a very decent issue because, yes, that's a bureaucratic (ph) turf is definitely a problem.
ROBERTS: Yes.
ALLEN: Now this shows, this is another reflection of that confidence that we see by President-elect Obama, including the confidence to be shirtless on your air there. But he believes not just as he believes that he can bring this very powerful national security team together, he thinks he can keep the different planets of this government from colliding. And it's going to be tough.
She has soon to be Secretary Clinton has a good relationship with the Pentagon chief Robert Gates who stayed.
ROBERTS: Right.
ALLEN: She was on the Armed Services Committee. But those relationships are certainly going to be tested just for the reasons you're pointing to.
ROBERTS: Oh, we'll see what happens. It will be interesting to watch this going forward. And I'll tell you, if I had the incoming president-elect's physique, Mike, I would be absolutely comfortable on being on the air not just without a tie but without a shirt.
ALLEN: I'd be doing this shirtless. No question.
ROBERTS: All right. Mike, good to see you. Thanks for coming in this morning.
ALLEN: Merry Christmas, John.
ROBERTS: Carol?
COSTELLO: So when we come back, you'll both be shirtless and then we'll decide.
ROBERTS: I said if I had the president-elect's physique, I would be fully comfortable in doing that.
COSTELLO: Oh.
ROBERTS: Unfortunately, I do not.
COSTELLO: You're so modest. Drivers in Dallas on edge. And a killer on the loose -- let's get serious now -- after police say he opened fire during yesterday's rush hour traffic. Breaking developments on the manhunt.
And if you're looking for a little extra help shedding those holiday pounds, a warning. Some of those diet pills may be harmful to your health.
(COMMERCIAL BREAK)
ROBERTS: 32 minutes after the hour. Here are this morning's top stories on this Tuesday. Right now, police canvassing the Dallas area looking for a man who opened fire from a pickup truck during rush hour traffic yesterday. Police say he killed two drivers and injured another. A fourth driver was also shot at but not hit.
If you're planning on making a New Year's resolution to lose weight, you're going to want to keep your eyes pill for 28 weight loss products. The Food and Drug Administration warns that some have unlisted ingredients. Others contain drugs that are not approved for sale in the United States.
We'll have more on those pills involved coming up at 7:00 here on the Most News in the Morning.
The government unveiling new steps to ease congestion at one of the nation's busiest airports. Four flights an hour will now be eliminated from LaGuardia Airport in New York. That reduces the number of takeoffs and landings to 71 an hour. But the CAP is strictly voluntary. If the proposal is approved, the new flight quota will take effect a little while from now, not until April.
This morning California workers have been put on notice. The state is very close to running out of money. That's forcing Governor Arnold Schwarzenegger to take some painful steps. But the drastic measures could mean massive layoffs.
CNN's Dan Simon is watching it for us this morning.
(BEGIN VIDEOTAPE)
DAN SIMON, CNN CORRESPONDENT (voice-over): Diane and Ray Lovesee spend a combined 60 years work in California's state government.
RAY LOVESEE, STATE WORKER: And it feels like we're getting kicked.
SIMON: Getting kicked he says because of Governors Schwarzenegger's mandate that state workers, all 235,000 of them be required to take two days of unpaid leave each month starting in February.
The pay cuts are part of a belt tightening as California struggles to deal with its astronomical $42 billion deficit. The Lovesee say it will result in a combined $400 pay cut each month.
DIANA LOVESEE, STATE WORKER: It's going to totally destroy us. Probably lose our vehicle next.
R. LOVESEE: We might have to go down and apply for food stamps.
SIMON: That bad?
R. LOVESEE: That bad.
SIMON: About a dozen state workers voiced their displeasure towards the governor as he held a news conference in Los Angeles. Schwarzenegger's order also require state agencies to reduce their payrolls by 10 percent. A move that could lead to massive layoffs.
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: Now I hate to layoff any state employees, may I remind you, because these are hard-working people, and they all have to provide for their families. But we are running out of cash by February. So I have no other choice.
SIMON: The cash situation is so dire the state has pushed the pause button on nearly 2,000 public works projects. Many schools, roads, levees all on hold.
SCHWARZENEGGER: Now the crazy thing about this is that here is President-elect Obama who is talking about an infrastructure package to rebuild the whole United States. To put people to work, to stimulate the economy and we here at the same time are canceling infrastructure projects. Is that not ironic? Is that not crazy?
(END VIDEOTAPE)
SIMON: The Democrats which control both houses of the legislature have passed a budget. They want the governor to sign it. But Schwarzenegger has vowed to veto it, saying the budget plan does not do enough to cut spending or stimulate the economy.
John and Carol, back to you.
COSTELLO: New information this morning on the Bernard Madoff Ponzi scheme. And a lawsuit is being filed against the regulators for missing the whole thing. Ignoring the whole thing is more like it.
Christine Romans is here "Minding Your Business."
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Yes. Here's the thing. American consumers -- you know, people are just so irritated with the fact that so many regulators missed, first the credit crisis and the things leading up to it. And then this Bernie Madoff scandal, this well-respected guy on Wall Street who allegedly was pleasing rich people, charities, foundations, you can see him there. This huge Ponzi scheme is the allegation -- $50 billion. Well, now according to the "Wall Street Journal", one investor, a woman in New York State who lost $2 million is suing the S.E.C. saying this is negligence of the Security and Exchange Commission.
COSTELLO: Good for her.
ROMANS: This is where I think you're going to see an awful lot of these sorts of things. I think you're going to see a cottage industry in Bernie Madoff related lawsuits. Which brings me to our most recent CNN Opinion Research Poll, which shows that people in this country who we polled don't have a very high regard for American finance in Wall Street right now? And they think quite frankly that Bernie Madoff behavior is common in financial institutions.
Do you think so? Yes, 74 percent. No, 23 percent. Also in general, do you think there's too much, too little or about the right amount of government regulation of the stock market and financial institutions. Too little, 59 percent. Too much, 22 percent. Right amount, 18 percent.
There's plenty of regulation. I will be really honest with you. There's an awful lot of regulation. An awful lot of regulators. Guess what? They didn't regulate.
You know, can you write new laws and new rules? If there's no one enforcing them, then what good is it? So, here we are in this tough position where we have to figure out where to go from here. A lot of people talking about more regulation. But where were the regulators in the first place.
I think what this shows is that Wall Street always really having a hard time burnishing its reputation. Has a very, very bad reputation right now from the credit crisis to Bernie Madoff right now.
COSTELLO: Yes, but does it care? I mean, does it?
ROMANS: I don't know. Does it care? What is it to? There's an awful lot of people and egos, and you know, it's --
COSTELLO: It's money.
(CROSSTALK)
ROMANS: It's an engine -- the engine of the global economy. And boy, that engine has sputtered in a big way, hasn't it.
ROBERTS: It certainly has. Christine, thanks so much.
37-1/2 minutes now after the hour.
From a vicious life of abuse to a loving home for the holidays.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: He's grown a lot and learning a lot. He's doing a lot better.
(END VIDEO CLIP)
ROBERTS: How Michael Vick's dogs are slowly learning to trust people again.
(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: These dogs just need love.
(END VIDEO CLIP)
ROBERTS: You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
ROBERTS: They were the innocent victims in Michael Vick's dog fighting operation. 47 pit bulls. It's been almost a year and a half now since those dogs were rescued. And "Sports Illustrated" followed up on them to see how they are doing. That issue was out tomorrow. And after months of rehabilitation, many of the dogs now have new homes.
CNN's Erica Hill tell us where they are now.
(BEGIN VIDEOTAPE)
ERICA HILL, CNN CORRESPONDENT (voice-over): This is Huba (ph), a 2-year-old pit bull given a second chance in life.
UNIDENTIFIED FEMALE: He's grown a lot and learning a lot. He's doing a lot better.
HILL: Letty Doolittle (ph) is Uba's new owner. She's had him for nearly a year and says while he is a lovable pet, he's nervous around people and terrified of large groups.
This is Huba in August of 2007, inside a shelter, after Uba's former master Michael Vick was arrested for running a vicious dog fighting ring. The star quarterback for the Atlanta Falcons pleaded guilty in 2007 to a federal dog fighting conspiracy charge.
MICHAEL VICK, FMR. AMERICAN FOOTBALL PLAYER: Dog fighting is a terrible thing and I do regret it.
HILL: Huba and 50 other pit bulls were taken from Vick's 50 acre Virginia home. The former NFL star is now serving a 23-month sentence in a federal prison in Kansas. He was also ordered to pay nearly a million dollars to help rehabilitate these former pets.
Usually pit bulls rescued from dog fighting rings are considered too vicious and are euthanize. But the media attention surrounding this case lead to an outcry for help for these dogs.
JIM GORANT, SPORTS ILLUSTRATED: In this case what would helped in particular was Michael Vick. You know, at the beginning, he was sort of the dog's biggest problem. In the end, he might have save them.
HILL: Jim Gorant with "Sports Illustrated" met with 11 families that adopted Vick's dogs.
GORANT: And none of them seem dangerous at all. I mean, every dog in there was very friendly. There are a couple that seems scared. I mean, just sort intimated. You see their ears go down, their tails go down and they sort of hunch a little bit.
HILL: The dogs were evaluated after Vick's trial. Two were considered dangerous and put down. Two died of disease. The remaining 47 are thriving according to Gorant. Now thanks to various animal rescue groups, they are living happily with new families that are in shelters. Some even working with children as part of their rehabilitation.
But people for the Ethical Treatment of Animals said the pit bulls should have been euthanized. That the time and money spent treating 47 dogs would have been better spent helping millions of healthy dogs in shelters today.
DAPHNA NACHMINOVITCH, PETA: Euthanasia may be the kindest option for these dogs who have already suffered so much at the hands of cruel dogfighters. You know, the focus must be on moving ahead with the dogs who can be rehabilitated -- who don't need rehabilitation, who just needs love.
GORANT: It makes you aware of how far journey these dogs had, and how -- how much the odds were stacked against them. You know, people have said some (INAUDIBLE) thing. You know, the pinnacle of you know animal protection, and to say that they were actually in favor of these dogs being euthanize. That says a lot.
HILL: And it says a lot for Huba. He's now living happily. A positive legacy from a disturbing, vicious criminal act.
Erica Hill, CNN, New York.
(END VIDEOTAPE)
ROBERTS: And other 47 dogs, 12 have been formally adopted. 17 now said to be ready for adoption.
COSTELLO: Longing for a baby is not just for women any more. We'll show you how far some single man will go to get a child of their own. Today in our special series, "Baby Quest," making men into fathers at any cost. It's 44 minutes past the hour.
(COMMERCIAL BREAK)
COSTELLO: It's a delightful 17 degrees in New York Central Park this morning. In fact, as I walked to work this morning, things like a slap in the face. I'm talking about the cold. But it did wake me up.
Talk shopping now, shall we? Because you're going to be heading out into this hole to do that, you're going to hear from your husband about how much he hates shopping. So, as you know, the holidays present a real challenge for couples who want to shop together and make it a fun experience. But now one place is taking the sting out of gift buying, at least for men. It's giving women a place to park their man.
Here's CNN's Fred Pleitgen and Diana Magnay. (BEGIN VIDEOTAPE)
FREDERICK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): The little town of Celle in Germany is well-known for its lovely Christmas market.
(on camera): Christmas is drawing closer and it's time to get those presents.
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: I love Christmas shopping.
PLEITGEN: I despise Christmas shopping.
MAGNAY: but luckily this year --
PLEITGEN: We can have it both ways.
MAGNAY: That's because this Christmas market is offering something special. They call it Man Parking, as in parking your man.
Hello.
UNIDENTIFIED FEMALE: Hi.
MAGNAY: This is Fred.
UNIDENTIFIED FEMALE: Yes, hi. I'm (INAUDIBLE)
PLEITGEN: Hi, how are you doing?
UNIDENTIFIED FEMALE: Hi.
MAGNAY: Please could you look after him.
UNIDENTIFIED FEMALE: OK.
PLEITGEN: See you.
And that means I can relax with the boys.
UNIDENTIFIED FEMALE: This is Fred.
UNIDENTIFIED MALES: Hi.
PLEITGEN: Hi guys.
MAGNAY: While I hit the shops. Is this bees wax, too?
UNIDENTIFIED FEMALE: (SPEAKING FOREIGN LANGUAGE)
PLEITGEN: All right, thanks. I could end up losing more money here than going shopping.
MAGNAY: It's huge. Jesus. Who on earth wears one of these.
PLEITGEN: Merry Christmas.
The makers of Man Parking say it doesn't just offer a flurry of activities to pass the time, it can even save relationships.
PETER FEHLHABER, CHRISTMAS MARKET CELLE: Of course, there is a serious side to all of this. It can be so stressful when the lady goes, and went to another present here and there, and the man just doesn't feel like it. So we think this could help restore peace at home.
MAGNAY: Or peace in our CNN office. In the end I bought all my presents without Fred hassling me.
PLEITGEN: And I just didn't get hassled.
MAGNAY: Fred?
PLEITGEN: Bye, guys.
UNIDENTIFIED MALES: Bye, Fred.
MAGNAY: Bye. Have a good time?
PLEITGEN: No, what took you so long?
MAGNAY: Thank you.
PLEITGEN: Fred Pleitgen.
MAGNAY: Diana Magnay.
PLEITGEN: CNN, Celle, Germany.
(END VIDEOTAPE)
COSTELLO: Wait a minute.
ROBERTS: You see that?
COSTELLO: Just wait a minute.
ROBERTS: What? What?
COSTELLO: Let me get this straight. The woman goes on, does all the work of shopping, and the man gets to play foosball and drink beer.
ROBERTS: Well, was she shopping for him, too? Or was she just getting the gifts that she wanted to pick up?
COSTELLO: What about him shopping for her?
ROBERTS: Well, maybe he did that already.
COSTELLO: And seriously, if your --
(CROSSTALK)
ROBERTS: (INAUDIBLE), maybe he went in to Beer Stubine (ph) and bought her a nice stein, you know.
COSTELLO: Don't be making excuses for these men.
ROBERTS: I'm not making excuses at all.
COSTELLO: And if your marriage cannot survive a shopping trip --
ROBERTS: Don't even go there.
COSTELLO: OK.
ROBERTS: It's 10 minutes to the top of the hour.
COSTELLO: Yes.
ROBERTS: Think the investors defrauded by the biggest Wall Street scam in history were all fat cats. Meet Norma, widow, grandmother.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: He put his arm on my should, and he said I'll take care of your money.
(END VIDEO CLIP)
ROBERTS: Instantly destroyed by the swindle.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I am calm on the exterior, but I'm dying inside.
(END VIDEO CLIP)
ROBERTS: Plus, baby quest, not just for women.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There's some suspicion, a man wants to adopt a kid by himself.
(END VIDEO CLIP)
ROBERTS: How far some single men go to get a child.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I can't imagine not having him in my life.
(END VIDEO CLIP)
ROBERTS: Daddy Boo, you're watching the Most News in the Morning.
(COMMERCIAL BREAK)
ROBERTS: Well, forget a million dollars. What would you do if you had an extra $1,000? Brand new CNN poll numbers show your lack of confidence in the country's financial institutions. If someone gave you $1,000, and you couldn't spend it or pay off debt, 45 percent would put it in the bank and just 24 percent would invest it. Meanwhile, 29 percent of you say that you would keep it in a cookie jar or stuff it in the mattress.
And later on this morning we're going to get a snapshot on the housing market with the latest numbers on new and existing home sales are released. Meanwhile, mortgage rates are falling but is that enough to help homeowners weather the storm. Let's find out.
Joining me now is Mark Zandi. He's the chief economist and co- founder of moodyseconomy.com.
So, what are we expecting? What's you prognostication here, Mark, in terms of the housing numbers when they come out in about an hour and a little bits time.
MARK ZANDI, CHIEF ECONOMIST, MOODYSECONOMY.COM: Another bad number. The low mortgage rates are going to get trumped by the bad job market. We lost a half millions jobs in November, and I think that was too much to bear from those homebuyers. So, another down month.
ROBERTS: You know, I've read some economists predicting about 1.5 percent, 1.6 percent in existing homes. Down as much as three percent in terms of new homes. October was what, an 18-year low. And just more signs of this economy just continues to try to find a bottom and nobody knows where that is.
ZANDI: Yes. And of course the housing market is ground zero for the economy's problems. And you're right. I think home sales in November probably were at their low for this cycle. We have to go all the way back to the early 1990s for this kind of sales levels.
ROBERTS: So the Federal Reserve is lowering interest rates that are down to a range between zero and 0.5 percent, historic lows. They're trying to push mortgage rates down about 4.5 percent. Would make mortgages very affordable for people if they can qualify for the credit. But it still not kicks down starting the housing market. I mean, how bad are things, really, out there?
ZANDI: Well, this is probably the worse recession in the post- World War II period. You have to go all the way back to the Great Depression. It's not the depression but it's about as bad as it's been since then. We've lost almost two million jobs in 2008. Unemployment is up over 2.5 percent, points from its low. It's about as bad as it gets.
ROBERTS: And some people predicting that unemployment could hit nine percent. Certainly in some states it is. The incoming president-elect has got a robust economic plans, stimulus plan that he wants to enact very soon after taking office. About $700 billion or so. A lot of infrastructure spending on roads, bridges, other projects like that. Let's listen to what the incoming vice president- elect said about that on "LARRY KING LIVE" last night.
(BEGIN VIDEO CLIP)
BIDEN: By investing in, as I said, new technologies, by investing in infrastructure, building roads and bridges, all things, by the way, that add to the productivity of the country, that keep American businesses in America, that generate high paying jobs.
(END VIDEO CLIP)
ROBERTS: Mark, what do you think of the economic plan, and what about that number, $700 billion? You had forecast maybe $600 billion would be a good figure. But are you prepared to revise it upward?
ZANDI: Yes. I think that's not a -- I think it's a reasonable number. I mean, as the economic outlook darkens, which it has been consistently. You know, I think the size of the economic stimulus package needs to increase as well. And $700 billion is a reasonably good size number over a two year period -- 2009-2010. I think that's roughly what we need.
ROBERTS: What about in terms of, you know, where the retail market is right now. Two shopping days left to Christmas. We've seen stores have got things on 60-70 percent on sale, trying to get people in the front door. Is there any hope for them that in next 24 hours or 48 hours, and maybe you know the day after Christmas, the weekend after Christmas, that this retail season will be saved, or is it pretty much a write-off?
ZANDI: No. There's not much they can do. I mean, the only retailer that's doing reasonably well is Wal-Mart. Outside of Wal- Mart, sales are down pretty much across the board. And it's not just low-end retailers, it's high-end retailers. I mean, it's A to Z. Everyone is having a tough Christmas. And I don't know that there's anything they can do to turn that around. They're discounting and cutting prices. They are being aggressive, but I mean, consumers are shell shocked. They are very nervous in putting that money in the mattress.
ROBERTS: And you know, everybody was surprised to hear yesterday that Toyota, the Toyota car company may lose money for the first time in 70 years.
ZANDI: Right. It just highlights the severity of the downturn, because Toyota is the strongest car company, globally, and if it's losing money then that just, you know, gives you a clear sense of how bad things are.
ROBERTS: You know, its losses are sort of small potatoes compared to General Motors. But, you know, think at one point, $61.8 billion, but still you know real indication that things are not good globally. But what about your forecast for 2009 and beyond? I read a quote that you had in the "USA Today" newspaper today. It sounded a little bit dire. You said, quote, "The first six months will be very painful. The second six months of next year just painful, and 2010 will be uncomfortable."
I mean, try to put that into language that people can understand. What is it -- what is it going to mean for people at home on Main Street?
ZANDI: Yes, it's going to be a tough year. As I mentioned, we lost two million jobs in 2008. We'll lose at least that many in 2009. The unemployment rate, which is a good benchmark of the severity of all this is now 6.7 percent. As you mentioned nine percent is a likely peak. And that probably won't happen until early 2010. So 2009 is going to be a very difficult year, unfortunately, for most people. Christmas '09 is not going to be much better than Christmas '08.
ROBERTS: So when would you think we might see a recovery?
ZANDI: You know, I really think 2010 would be a year where we'll feel a bit more comfortable about things because of the fiscal stimulus package, because of what the Federal Reserve is doing to try to lower interest rates and pump out more money into the economy. I think those things will ultimately win the day. This is going to take six to 12 months for it to really work.
ROBERTS: All right. We'll keep a close eye. We'll get back to you on that, too.
Mark Zandi from moodyseconomy.com. Thanks for being with us this morning. Best of the holiday season to you.
ZANDI: You, too. Thank you, John.
COSTELLO: Just about the top of the hour now. Here's a look at your top stories this morning.
