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American Morning
Full Blown Humanitarian Crisis in Gaza; Roland Burris Makes His Case in Washington; Obama CIA Pick Questioned; Barack Obama Lays Groundwork for His Economic Stimulus Plan; A Look at Obama's New Neighborhood; Obama: $300 Billion Tax Cut; Steve Jobs' Health; Direct Hit on Gaza School; Rebuilding the GOP
Aired January 06, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
KIRAN CHETRY, CNN ANCHOR (voice-over): Breaking news, Israeli troops and tanks surround and pound Gaza city. The war to crush Hamas reaching a new critical stage right now.
Plus, showdown at the Senate.
ROLAND BURRIS (D), FMR. ILLINOIS ATTORNEY GENERAL: I am the junior senator according to every law book in the nation.
CHETRY: Roland Burris goes to Washington to claim Barack Obama's empty seat. Will he be allowed to seat?
BURRIS: End of it, close the book.
CHETRY: On this AMERICAN MORNING.
(END VIDEO CLIP)
CHETRY: It's not unusual in Washington. We're talking about whether Roland Burris and Al Franken will actually be seated as the Congress convenes this week.
JOHN ROBERTS, CNN ANCHOR: You know, there's a lot of drama in Washington. It's just this year's version of it, really.
CHETRY: Exactly. And good morning to you, it's Tuesday, January 6th. Welcome back.
ROBERTS: Thank you very much. I had a few nice days off, but it's good to be back. You know, you can't stay away too long particularly when all these news is going on.
Here's this morning's top stories at the top of the hour. Breaking news, fighting between Hamas and Israel escalating dramatically overnight. International Red Cross says Gaza is now in a "full-blown humanitarian crisis." The head of operation says the power grid could collapse at any moment leaving up to a half a million civilians without clean water.
And right now, Israeli troops have surrounded densely populated Gaza city. We are going to check in with Christiane Amanpour live in the region in just a moment.
Right now, President-elect Barack Obama laying the groundwork to offer $300 billion in tax cuts for individuals and businesses. It's part of a massive stimulus plan he wants ready for signing within two weeks of his inauguration.
Today, he is scheduled to meet with his economic team again on Capitol Hill. That comes after a flurry of urgent meetings yesterday where he issued a dire warning about the economy.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: The economy is badly damaged. It is very sick, and so we have to take whatever steps are required to make sure that it's stabilized.
(END VIDEO CLIP)
ROBERTS: In just a few hours, the new Congress will be gaveled to order and the scene could get interesting, even ugly when Roland Burris tries to claim the Senate seat once held by President-elect Barack Obama. Democrats do not want to give it to him, but the man appointed by the embattled Illinois Governor Rod Blagojevich says nothing will stop him from showing up for work.
(BEGIN VIDEO CLIP)
ROLAND BURRIS, FMR. ILLINOIS ATTORNEY GENERAL: This is all politics and theater, but I am the junior senator according to every law book in the nation.
(END VIDEO CLIP)
ROBERTS: And another Senate seat up in the air, Minnesota State certified results show that Al Franken beat Republican Norm Coleman by 225 votes. But Coleman has filed a lawsuit challenging the results and it looks like Franken will not be sworn in today.
CHETRY: Well back to our breaking news and the situation in Gaza growing more dangerous by the minute. Israeli troops and tanks surrounding Gaza city. That's not stopping Hamas from firing rockets deep into Israel still. And as the fighting intensifies, so does the suffering.
More than 500 Palestinians have been killed including at least 100 women and children. The International Red Cross says the situation for Palestinian civilians in Gaza is "extreme and traumatic." And Israeli human rights group says 75 percent of Gaza is without power. Diplomats are seeking a truce that any talk of a ceasefire is at this point just that, talk.
CNN's Christiane Amanpour is live in Jerusalem. So this is the 11th day now of strikes. What is the status of any possible cease- fire?
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, according to officials who I've been talking to, it is possible. We're not saying likely, it is possible that there could be one this week but it depends on many things.
Right now, the Israeli military action continues in Gaza. There is a huge amount of smoke coming from there after what the Israelis say have been dozens of air strikes this morning. Hamas itself, the Israelis report, have fired at least ten rockets from out there including one that has come the furthest into Israel itself. A 3- month-old Israeli baby was wounded.
This as many, many civilians in Gaza are also being hurt, wounded, killed. Doctors there are saying a significant portion of those people who they see coming into the hospitals are, in fact, children and women and elderly men. And then there's this humanitarian crisis, without fuel, without water, without electricity, that is really deepening the anxiety, and increasing the calls for a cease-fire.
I sat down with Tony Blair, the former British prime minister, to ask him about the possibility of a quick cease-fire.
(BEGIN VIDEO CLIP)
TONY BLAIR, QUARTET MIDEAST ENVOY: I think there are two alternatives, one of which, and I hope this happens, is that we get an immediate cease-fire. And I think that will really revolve around whether there can be clear and definitive action on the smuggling issue. That is the weapons and money coming through the tunnels from Egypt into Gaza.
I think if there is strong action on that front so that Israel feels that it has achieved something, namely the end of the smuggling of weapons and finance to Hamas, then I think it is possible to resolve this reasonably (ph) quickly. If that doesn't happen, if we're not in that position, then obviously it's going to go on.
(END VIDEO CLIP)
AMANPOUR: So here's the thing. Israel needs to point to some kind of achievement out of this military action and stopping and getting a definitive stop on those weapons being smuggled in would go a long way to convincing Israelis that there have been some tangible result from this action and that might be able to enable a cease-fire.
Reports the Israelis are also saying that they want to substantially cripple the Hamas military capability as well. At the same time that humanitarian corridors need to be opened and that also would be part of an eventual cease-fire -- Kiran.
CHETRY: And, Christiane, you're talking about that humanitarian situation. We're seeing some pretty dramatic pictures coming out of the hospitals in Gaza. What toll is this having on the civilian population?
AMANPOUR: Well, obviously creating an enormous amount of anxiety, trauma and fear. The thing is that these leaflets are being dropped, telling Gazans to move, to get out of where they are but they don't know where to go, because they say that leaflets are being dropped all over the place.
There's also the situation where more leaflets are being dropped saying the situation is in your hands. Why don't you call us or e- mail us, says the Israeli defense forces, with locations on the rocket launchers. So there's a lot of pressure on the actual civilians there, who basically are without leadership, without instruction, and don't know where to go -- Kiran.
CHETRY: Certainly terrifying situation for those innocents caught in the crossfire.
Christiane Amanpour for us in Jerusalem this morning. Thank you.
ROBERTS: In two weeks, President-elect Barack Obama will take office but he is already taking the reins of power pushing his economic plan and filling a key intelligence post.
Former Clinton White House chief of staff Leon Panetta has been tapped to head the CIA. The pick surprising a lot of people in Washington, and some top Democrats are questioning why Mr. Obama would nominate a candidate with no direct intelligence experience.
CNN's Kate Bolduan is live for us in Washington. As chief of staff, Leon Panetta was a consumer of intelligence but never been involved in the gathering side. And some very prominent Democrats are saying they're not sure this is the right pick, Kate.
KATE BOLDUAN, CNN CORRESPONDENT: Yes. They're definitely raising questions. Amid tackling the financial crisis, Obama, as you mentioned, is filling up his cabinet, announcing key intelligence nominations Monday. Retired Admiral Dennis Blair for director of national intelligence but it's his choice to head the nation's spy agency that's raising the most questions.
(BEGIN VIDEOTAPE)
BOLDUAN (voice-over): The president-elect ran into a rough spot Monday with a fellow Democrat over his pick of Leon Panetta, former Clinton White House chief of staff, to be CIA director. Dianne Feinstein, who will chair the Senate intelligence committee, issued a terse statement saying she "was not informed." She goes on to say, "My position has consistently been that I believe the agency is best served by having an intelligence professional in charge at this time."
Aside from that, though, Mr. Obama had relatively smooth-goings, trying to keep his promise to hit the ground running.
OBAMA: The inauguration's stand is being built in the background, but the reason we're here today is because the people's business can't wait.
BOLDUAN: Busy with courtesy calls and policy meetings on Capitol Hill, first with top Democrats.
REP. NANCY PELOSI (D), HOUSE SPEAKER: We pledge to work together in a bipartisan way with great civility.
BOLDUAN: And later with Democratic and Republican leaders.
SEN. MITCH MCCONNELL (R), KENTUCKY: We welcome the opportunity to be included in the discussion.
BOLDUAN: Obama and his economic team are starting a full court press to win support for his economic recovery plan. The president- elect planning an economic address Thursday to make his case to the public.
OBAMA: Right now, the most important task for us is to stabilize the patient. The economy is badly damaged. It is very sick, and so we have to take whatever steps are required to make sure that it's stabilized.
(END VIDEOTAPE)
BOLDUAN: Now the president-elect has made it a habit of saying there's only one president at a time. We've heard him say that a number of times, but he's definitely making a presidential-like entrance to Washington, today, focusing again on the economy with another meeting of his economic team.
And an interesting note, John, Vice President-elect Joe Biden will be sworn into his seventh term as a Delaware senator today. He'll soon be resigning that seat, of course, to his former chief of staff, Edward Kaufman.
ROBERTS: All right. Kate Bolduan for us this morning in Washington. Kate, thanks so much.
CHETRY: We want to take you back to the breaking news situation in the Mideast right now. And these are live pictures you're looking at of Gaza. These are shots from the Israeli side of the Israeli/Gaza border. And you can see smoke billowing out of various buildings there as we get a look at the Gaza city skyline.
Right now, the International Red Cross is calling this a full blown and major crisis in humanitarian terms. They're saying that for the people in Gaza it's been extreme and traumatic because of the ten days of uninterrupted fighting.
And some Red Cross staffers are describing last night as the most frightening to date. They said they were hunkered down in rooms, fear of being struck by bombardment. At the same time, rockets continue to be launched into Israel.
One of the problems and Christiane pointed this out as well, John, is even though there are some relief supplies getting in, it's actually not able to get to the victims because of the intensity of the fighting.
ROBERTS: Right. So declaring humanitarian crisis probably to put pressure on the Israeli government to back off on the bombardment, let some emergency workers get in there and try to distribute supplies. But if history is any guide, the Israeli government, the Israeli military not likely to do that, at least not in the forthcoming hours.
So obviously, that fire left over from a previous bombardment. There is a -- we are what? About eight hours ahead so about 2:00 in the afternoon there in Gaza and the situation still very intense there, obviously, and as we said, Red Cross humanitarian assistance workers saying it's now becoming extraordinarily dire for everyone in Gaza.
CHETRY: We'll continue to monitor this situation throughout the morning bringing you more live pictures.
Meantime, this morning, a family in California demanding criminal action against the San Francisco transit officer accused of shooting and killing an unarmed father new year's day.
Cell phone video shows Oscar Grant against the wall holding his hands up. Moments later, he's face first on the floor, and then that's when one of the officers appears to draw his gun. A shot is fired and the attorney for Grant's family says the officer's actions were not necessary. He plans to file, this attorney (ph), a $25 million lawsuit saying that witnesses say Grant was lying on his stomach with his back to officers when he was shot.
Now, officials say that police were called to the subway station to break up a fight. The city's transit police chief has urged patience while several agencies continue to investigate this incident.
ROBERTS: We're learning more about the death of John Travolta's 16-year-old son today. Officials at a funeral home in the Bahamas say Jett Travolta's body showed no sign of head trauma and according to the death certificate he died from a seizure. Jett's body has now been cremated. Travolta and his wife Kelly Preston are said to be bringing his remains back to Florida today where they will plan his funeral.
Prosecutors in New York City want accused Wall Street swindler Bernard Madoff behind bars until his trial on charges he scammed investors out of $50 billion. They claimed that Madoff violated his bail agreement by mailing about $1 million worth of jewelry and other assets to relatives.
Madoff was back in court on Monday. His attorneys claim the items were heirlooms, not significant assets and that Madoff is not a flight risk.
The union representing Alaska state troopers is backing off earlier allegations that a drug investigation of Sherry Johnston was delayed to shield Sarah Palin during the presidential campaign. The "Anchorage Daily News" reporting an investigation by union officials found no delays for political reasons in the drug case. Sherry Johnston, the mother of Bristol Palin's fiance, Levi Johnston, has pleaded not guilty to felony charges of selling OxyContin.
CHETRY: Well, Barack Obama, a restaurant critic? See the long- lost videotape of the president-elect reviewing a meal. How does he rate the peach cobbler?
It's 12 minutes after the hour.
Welcome to the neighborhood. Barack Obama's new neighbors can't wait for a peek at the first family.
(BEGIN VIDEO CLIP)
DANIELLE LATIMORE, LOCAL WORKER: Hoping that maybe when he comes, we'll just see a finger or a glance.
(END VIDEO CLIP)
CHETRY: We found the hot spots where the president-elect could do lunch, pray, or just hang out with his little girls.
(BEGIN VIDEO CLIP)
JIM ACOSTA, CNN CORRESPONDENT: Do you have any arugula at your restaurants?
ASHOK BAJAJ, OWNER, THE OVAL ROOM: We have arugula in all of my restaurants.
(END VIDEO CLIP)
CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Back in the saddle, that's John and Ali reunited.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: I love this. Good to see you.
ROBERTS: And you didn't bring your cowboy hat.
VELSHI: No. Don't start with me. You know I will.
ROBERTS: Come on.
CHETRY: Good to see you.
ROBERTS: It's only 15 minutes after the hour. We can start.
VELSHI: I know, I hear you.
ROBERTS: Get it going.
CHETRY: Well, Ali, you had a lot to pore over yesterday as Barack Obama's team talked a little bit about this $300 billion tax cut plan.
VELSHI: Yes.
CHETRY: Is it a good idea? Can we afford it? What do you think?
VELSHI: Well, we had always thought always -- we've thought for the last month that there'd be a stimulus plan that would be in the $750 billion range, so this is part of it. We thought a lot more of it would be stimulus in the way we traditionally think of it, the building of roads and bridges and things like that.
We didn't realize that a big chunk of it would be tax deductions and tax cuts that's meant to appeal to Republicans. But now, we're talking about things that we're not entirely sure what effect they will have on the economy. So we know that if you're building bridges and schools and roads and things like that, you're employing contractors. The contractors are employing people putting the work and you're getting better bridges as a result.
When it comes to tax cuts, what you're doing is you're stimulating people to spend or businesses to employ people, and you're doing it sort of a backhanded way but you're reducing revenues. The idea is that as these people do more business they will pay higher taxes not as a percentage but actually as a percentage of the dollars that they earned and that's how the economy recovers.
It may not be clear that this is what's needed right now. First of all, these tax cuts will phase in over a couple of years and that, you know, we need help immediately.
The second thing is, you know, people kept on saying, where's my bailout? Everybody else was getting a bailout. Well, this is the middle class bailout and this was exactly the problem. When you divide it over everybody who works, it will be $500 a person. If you're out of a job or you're losing your house, the $500 is not going to be helpful to you. If you didn't need the $500, it's nice but you may not spend it in a way that's going to stimulate the economy.
So the bottom line is, almost nobody in America needs $500. Lots of people need a lot more and some people don't need it at all but this is your way of spreading it through and that's where the problem comes in. It's politically effective. It may not be economically effective.
ROBERTS: A friend of mine had an interesting idea. He's in finance. He said eliminate personal income tax for a year. That will stimulate the economy.
VELSHI: Right. But that's a lot of money. That's more than $500. That's the difference.
ROBERTS: But it's not much more than $1 trillion.
VELSHI: Well, there you go. That's what we're thinking about.
ROBERTS: Yes.
VELSHI: You got to do something big that actually makes a difference. CHETRY: You know it's funny because everyone's giving their own theories. Someone else yesterday was saying wait a minute, what about the mortgage crisis?
VELSHI: Right.
CHETRY: Why don't you just pay off all the people that are, you know, going into foreclosure.
VELSHI: Mortgage and houses are more important if you can target those. You know, Lakshman, who's going to be on very shortly, says, you know, what you need is a job more than you need anything else. So if they can focus all their energies on job creation that would help.
ROBERTS: Good to have you back, my friend.
VELSHI: You, too.
CHETRY: We'll see throughout the show. Thanks, Ali.
Well, are you having trouble with your money? Are you taking unnecessary financial risk? Maybe you don't even know you are. Go to CNN.com/living and take a quiz. We're going to see how much of an investment risk taker you actually are. You can check out some tips from Ali's new book "Gimme My Money Back" as well.
There he is. Are you live blogging today, by the way?
VELSHI: I'm not but I'm still taking questions.
CHETRY: All right. Thanks, Ali.
VELSHI: All right.
ROBERTS: Just inundate him with e-mail, he'll be forced to answer you.
VELSHI: I will. Exactly.
ROBERTS: It's President-elect Barack Obama like you have never seen him before. A long lost video tape has surfaced showing Mr. Obama, then an Illinois state senator taking a turn as a restaurant critic for a Chicago television show called "Check, Please!" Have a look.
(BEGIN VIDEO CLIP, "CHECK, PLEASE!" FROM WTTW)
OBAMA: I do have to put in a plug for their peach cobbler, which --
UNIDENTIFIED FEMALE: Really?
OBAMA: ... people tend to gobble up pretty good.
UNIDENTIFIED FEMALE: See if I would lay off these corn (ph) cakes and set them on the table, maybe I'd have some room for some -- OBAMA: That's the problem. Those Danny (ph) cakes, you know, they'll get you early and then you won't have time -- you know, room for the peach cobbler.
(END VIDEO CLIP)
ROBERTS: The episode was taped in 2001 but shelved. It is now scheduled to air on January 16th, four days before Obama's inauguration as the program's 100th episode.
And how would you like to have the Obama family move to your block? We've had all the neighborhood hot spots and some excited neighbors already out Obama spotting.
And after Apple founder Steve Jobs' dramatic weight loss, our Dr. Sanjay Gupta is here to tell you what caused it and how Jobs' health is now.
It's 19 minutes after the hour.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
MUSIC: It's a beautiful day in this neighborhood, a beautiful day for a neighbor. Would you be mine? Could you be mine?
(END VIDEO CLIP)
CHETRY: Well, these are happy days for the Obamas. They're beginning a new life in Washington, also preparing for a historic inauguration two weeks from now. And as the president-elect and his family settle into their new D.C. neighborhood, our Jim Acosta looks at some of the neighborhood hot spots for the soon-to-be first family. He is live in Washington.
I guess you can show them the ropes, right, because you're there and you know -- you know the good places to eat...
JIM ACOSTA, CNN CORRESPONDENT: Sure.
CHETRY: ... and the good places to get coffee or a workout.
ACOSTA: Absolutely, Kiran. And can I just say it's not fair to follow Mister Rogers?
CHETRY: He's such a sweet -- he's such a sweet man.
ACOSTA: I would say it's a beautiful day in the neighborhood, but it's winter in Washington. So the weather is pretty lousy right now. But Barack Obama may have just moved into his new hometown but the president-elect does have options if he feels like stretching his legs and getting to know the neighborhood.
(BEGIN VIDEOTAPE)
ACOSTA (voice-over): The Kelly family just had to take a look.
UNIDENTIFIED MALE: You know you're on the cusp. It's coming. Whatever way it's going to turn out, it's just beginning.
ACOSTA: They're just a few of the Obama onlookers outside the temporary residence of the next first family, the Hay-Adams Hotel.
DANIELLE LATIMORE, LOCAL WORKER: Hoping that maybe when he comes, we'll just see a finger or a glance.
ACOSTA: That's enough for you.
LATIMORE: That's enough.
ACOSTA: While he's waiting to check into the Oval Office, Mr. Obama may want to check out The Oval Room, a D.C. power restaurant, one block from the White House. Owner Ashok Bajaj has welcomed Presidents Clinton and Bush senior.
ASHOK BAJAJ, OWNER, THE OVAL ROOM: Security arrived four, five hours before and, you know, they secured the (INAUDIBLE). They secured the entrances of the restaurants.
ACOSTA: It's a very simple thing.
BAJAJ: No. There's no simple thing but it's a lot of fun. You know, when the president comes to your restaurant, it's a great honor.
ACOSTA: He says he's ready for change. And apparently he's a big fan of arugula.
BAJAJ: Yes.
ACOSTA: Do you have any arugula at your restaurants?
BAJAJ: We have arugula in all of my restaurants.
ACOSTA: For a place to reflect on the nation's struggles, St. John's Episcopal Church is just steps away. Franklin Roosevelt prayed here before his first inauguration, and church leaders say Abraham Lincoln secretly worshipped in the sanctuary, ducking in and out during services. Like those presidents, Mr. Obama may not have much time on his social calendar.
OBAMA: Because the people's business can't wait.
ACOSTA: And unlike most presidents, he has little kids.
SALLY QUINN, "THE WASHINGTON POST": People have to realize that they have these two young children that they want to get them acclimated.
ACOSTA: When the Obamas do venture out, Washington writer and socialite Sally Quinn believes they will see a different side of the city. QUINN: One of the things that's interesting is that Washington is a largely black community, and no president I know of has ever actually gotten involved in that part of the community.
(END VIDEOTAPE)
ACOSTA: And the president's schedule is already filling up fast. Just this week, he has to push a big stimulus package here in Washington, and deliver a major speech on the economy. It's a good thing he's got room service -- Kiran.
CHETRY: Yes. Exactly. How about that? And, you know, it is interesting to see just how much pre-planning has to go into something as simple to us as a restaurant visit.
ACOSTA: That's right. And it is a fortress right now around the Hay-Adams Hotel. I can tell you that multiple streets around the area have been shut down to traffic and parking which is not such a good thing for Mr. Obama's neighbors. They're not thrilled about that right now, Kiran.
CHETRY: Yes, exactly. And boy, the millions that are going to be coming to town for the actual inauguration but hey, February will be a new day.
ACOSTA: Exactly.
CHETRY: Jim Acosta, thanks so much.
ACOSTA: You bet.
ROBERTS: Right now, President-elect Barack Obama with a laser light focus on one issue, the economy. But will his massive and costly power play to revive America's economy work?
And Israeli ground troops driving deeper into Gaza. Live pictures for you this morning along the Israel-Gaza border targeting what it says are Hamas weapons and supply lines. But will Israel's strategy work against a terrorist threat like Hamas? We'll find out.
It's 25 and a half minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Well, it's 30 minutes past the hour now, coming up on that. And we have some breaking news right now.
Heavy smoke rising over Gaza as the situation there shows no signs of letting up. U.N. officials say that Israeli air strikes have hit a school in Gaza reportedly killing three Palestinians who were taking cover from the offensive. Three Israeli soldiers were killed yesterday in a friendly-fire incident.
The conflict sparking calls for Israel to allow more humanitarian aid into Gaza. Right now, the International Red Cross says the situation there is a full-blown humanitarian crisis. What do Barack Obama, Britney Spears and CNN's Rick Sanchez have in common? Well, they're among the nearly three dozen celebrity accounts that were hacked on the twitter Web site. Twitter saying that the hackers accessed tools used by employees to target the celebrities, posting false and inappropriate messages on their accounts.
And First Lady Laura Bush has secured a book deal for her memoir. Mrs. Bush signed with Scribner after a bidding war among top publishers for the rights to the book. It promises to include intimate details about her eight years living in the White House, and the book will be out in 2010.
ROBERTS: President-elect Barack Obama has a stern warning, the economy can't wait until he's sworn in.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: The economy is badly damaged. It is very sick, and so we have to take whatever steps are required to make sure that it's stabilized.
(END VIDEO CLIP)
ROBERTS: Yesterday he made the rounds on Capitol Hill to push a historic spending spree that will offer $300 billion in tax cuts. It's aimed at creating or saving some three million jobs, but is it worth it and more importantly, will it work?
We're joined this morning by Leigh Gallagher. She's the senior editor at "Fortune" magazine and Lakshman Achuthan, managing director of the Economic Cycle Research Institute. Our old friend is back with us again.
Good to see you both. So what do you think, Leigh? Is this thing going to work? Barack Obama says it's important to break the momentum of this recession. Is this the right way to do it?
LEIGH GALLAGHER, FMR. SENIOR EDITOR, "SMART MONEY": Well, you know, it's interesting. This plan was a surprise in many ways. The tax cut portion of it was bigger than anyone anticipated and I think that that's clearly, you know the point here is to rally both sides. It's one of the biggest tenets of the Republican ideology is the tax cuts deliver bigger bucks than spending. So by doing this, he's really trying to bridge the gap, and he's got enactment on his mind. Whether, you know -- something has to be done. He sees this is the fastest, easiest way to bring everybody together, actually, get it passed.
ROBERTS: OK, so bringing people together is one thing, but having this thing actually work is quite another.
LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: Right.
ROBERTS: The last stimulus package didn't work very well, because many people took their tax rebate (INAUDIBLE) and they paid off debt.
ACHUTHAN: Sure.
ROBERTS: Has this one got the nuts and bolts? Is this the ingredients that start the economy cooking again?
ACHUTHAN: We don't know. We really don't know. And I think in between the lines of what President-elect Barack Obama said, you know, we're trying to break the momentum of the recession is an admission that we don't control the business cycle. Once this recession has begun, which is well over a year old now, that train has left the station. We're hanging on, trying to mitigate the downturn as best we can. And right now, given all of the objective evidence, not the guesses.
Some people are optimistic. This is the best buying opportunity ever. Some people are pessimistic. We're on the edge of the next depression. Those are all wild guesses. And somebody's going to randomly be right. But looking at objective data, forward-looking indicators, they're saying that the next couple of quarters, we're going to get worse for the American economy. Jobs will be weak. Profits will slow. Both confidence will remain under a lot of pressure. Therefore, what's going to change people's attitudes, right? I mean, and can you trust that now there's a plan that is going to work. That's the key here. It's a confidence game, too.
ROBERTS: When I was coming back from my brief vacation yesterday, I was talking with a financial guy who said, you know, what's really the problem here is that all of these risk assessment managers have no historical guidance for what lies ahead.
GALLAGHER: No, that's true. There's no playbook, absolutely, and things could get worse from here. I think there's a sentiment that with the new administration, the button is going to reset and everything is going to be better. That's far from true. I mean, definitely, we need something to be done. These tax cuts may help as long as they're a company with big spending plans that will create jobs. We're going to see that I'm sure, but you know there's no playbook right now. We're in unprecedented times, and you know, things are going to get probably worse from here before they gets better.
ROBERTS: So let's talk for a second about the size of all of this. As you said, Leigh, he's trying to get Republicans on board. They seem to be cautiously on board at this point. But yesterday the House Minority Leader John Boehner said, now, I'm a little worried about the size of all of this. Let's listen to how he put it.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R), OHIO: I'm a little concerned myself about the overall size of the package. This is not a package that's ever going to be paid for by the current generation. This will be paid for by our kids and grandkids.
(END VIDEO CLIP) ROBERTS: What do you know, Lakshman? It will be -- ultimate cost of this by the time it gets through Congress right now pegged at just slightly less than $800 billion. It could balloon to $1.2 trillion. Is that too big?
ACHUTHAN: Well, we don't know. I mean, again, we do not know. I mean, today's $1 trillion is the new $1 billion, right? (INAUDIBLE) $1 trillion is the new $1 billion. People are jumping and tripping over themselves to name a larger number so that's the solution? Part of it. And a big part of it that doesn't cost any money is really thinking about timing as opposed to how much money are we spending.
I'm not sure if it's $700 billion, $800 billion or $1 trillion that is necessary, but I do know that if we don't get the timing right on when this hits the economy, it's going to be wasted money again. The first $150 billion sank like a stone because it hit the economy way too late. They have to think better about the execution of the stimulus plan.
ROBERTS: So what happens if we don't get the stimulus plan until the middle of February? Is that going to be too late?
GALLAGHER: Well, I don't think a month is going to make a big difference here. I think that the American people want to hear something that's going to have incredible psychological impact. Just remember housing prices are still falling. People are still losing their jobs. They will be losing their jobs in January and February, and we're not -- this isn't September, when every single hour made a difference. I think, you know, OK, inauguration day it won't happen, that's OK as long as it happens pretty soon after that.
ROBERTS: And of course a lot of people are saying here we are back again asking the Chinese to finance our tax cuts.
(CROSSTALK)
ACHUTHAN: Well, that's not going to change. But the first one they passed in January and it didn't hit the economy until May. So it wasn't a month, it was a number of months.
ROBERTS: Lakshman Achuthan, Leigh Gallagher, thanks for being with us this morning.
ACHUTHAN: Thank you.
GALLAGHER: Thanks for having us.
ROBERTS: Appreciate your expertise.
Kiran --
CHETRY: Well, there is a stunning new report saying that data security breaches increased nearly 50 percent last year leaving the personal records of more than 35 million Americans at risk. A report in "The Washington Post" says the Identity Theft Resource Center found nearly 37 percent of these breaches occurred at businesses, while schools accounted for roughly 20 percent. The percentage of breaches attributed to data theft by current and former employees, also more than doubled between 2007 and 2008.
Steve Jobs, the co-founder of Apple, lost so much weight that some were concerned. Dr. Sanjay Gupta is live to tell us what his condition is now, and what might have caused his dramatic weight loss. It's 35 minutes after the hour.
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CHETRY: Well, the dead is alive again. The surviving members of the "Grateful Dead" will hit the road this summer for their first tour in five years. Guitarist Warren Haynes replaces the late Jerry Garcia on lead guitar and the group now simply goes by The Dead. They'll hit the road in April to play around 20 shows.
And how grateful are you for the return of the dead? Send us an iReport sharing your thoughts. We'd love to see your photos and video of any long, strange trip you might have had over the years, just head to cnn.com/ireport.
38 minutes after the hour. We head over to Rob Marciano. Any long strange trips you'd like to send us an iReport on?
(WEATHER REPORT)
CHETRY: Exactly. All right. Rob Marciano for us. Thanks. It's 40 minutes after the hour.
Sasha Obama's first day of school, kissed by the president-elect, whisked away in a motorcade and then there's the big guy with the earpiece.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Snack time.
UNIDENTIFIED FEMALE: Snack time.
UNIDENTIFIED MALE: I was petrified and I missed my mom.
(END VIDEO CLIP)
CHETRY: Jeanne Moos remembers -- first day traumas. You're watching the "Most News in the Morning."
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(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: That's iPod. I have one right here in my pocket. There it is, right there.
(APPLAUSE)
UNIDENTIFIED MALE: So, this amazing, little device holds 1,000 songs, and it goes right in my pocket.
(END VIDEO CLIP)
ROBERTS: Oh, what a difference seven years make. That same iPod now holds about 30,000 songs. That's Apple's CEO Steve Jobs unveiling the iPod. That was back in 2001.
This week at the annual Macworld Expo in San Francisco, the buzz is not about new product, it's about Steve Jobs' health. Jobs says that doctors may have discovered the cause of his dramatic weight loss.
Our chief medical correspondent Dr. Sanjay Gupta joins from us Atlanta this morning to talk about Jobs' condition.
He says he's got a hormonal imbalance that's causing all of this weight loss, that he can't metabolize proteins properly, can't get the nutrition he needs. What kind of a condition is this?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well -- welcome back, John. You know, the hormone imbalance itself can be a relatively common thing. The larger question, I think, that doctors and Steve Jobs probably trying to answer is what is causing that hormone imbalance. That can be a reflection of something much larger.
Typically, you think of hormone imbalance, you think of weight gain. What we're hearing here and what Steve Jobs is saying in a statement is that it causes weight loss and, specifically, he says the hormone imbalance has been robbing him of proteins necessary to keep him healthy.
You put up an image of him from 2001. Let's put up a split screen of what exactly we're talking about here in terms of the weight loss. That's him on the left now. Compare that to a few years prior. He clearly has lost a lot of weight.
There's a lot of hormones that do a lot of different things in the body. There are a few, John, that you might imagine that can cause significant weight loss. Glucagon, for example, is one of them, typically produced by the pancreas, can cause weight loss, can cause increased metabolism, can cause the sort of picture that you're seeing there.
What causes it -- again, that's the larger question. You have to think of all sorts of things. Cancer can cause it. Diabetes, liver problems, gastrointestinal problems. Nobody is saying that any of this is occurring, but I think that's what doctors have to be searching, John.
ROBERTS: So, he did have a bout of pancreatic cancer, which he says he was cured of it. It's the type of cancer which if caught early it's treatable. It's not the adenocarcinoma, which proves almost universally fatal after five years. Could that somehow have had an effect on his metabolization and hormonal aspect of his health? You mentioned Glucagon, created by the pancreas -- might there be a connection there. GUPTA: There certainly could be a connection. And I also think that any time you have a pancreatic cancer patient who comes back in to the hospital with weight loss, you do have to think about recurrence. You probably have to look at the pancreas -- image of the pancreas. Those sorts of things have to be done.
But again, you know, you have the same statement that we have. It does not mention cancer as a possibility. He had a islet cell neuroendocrine tumor, since you mentioned the types of tumors. That's the type of tumor he had back in October of 2003. He was operated in July of 2004. While they're not as deadly as adenocarcinoma, they do have a chance of recurrence. So, again, this is something that doctors I'm sure are looking into.
ROBERTS: All right. Interesting medical mystery going on here, Sanjay. We hope to hear more about it in the coming days. Sanjay Gupta for us this morning. Doc, it's always great to see you. Thanks for coming in.
GUPTA: Thanks, John.
CHETRY: Well, after little Sasha Obama gets a motorcade ride to school complete with Secret Service, our Jeanne Moos takes a look at some of the other unforgettable first day of school, and for some, memories can be traumatic.
And you've heard of a poker's face, right? How about a president's face? How the stress of being president can drastically age the commander-in-chief. We're flashing forward to the aging Obama. It's 47 minutes after the hour.
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CONAN O'BRIEN, HOST, "LATE NIGHT WITH CONAN O'BRIEN": Barack Obama's daughters started at their new school in Washington, D.C. They started school. That's nice. Yes, they're smart kids. Yes, their teachers are really impressed. They said that both girls are already reading well above President Bush level.
(END VIDEO CLIP)
CHETRY: Conan O'Brien poking some fun, but it is a new day for Sasha and Malia Obama. They have their number two pencils. They have their lunch money. But they also have their Secret Service detail. The press coverage of the Obama girls going to their new school in Washington evoking memories for CNN's Jeanne Moos and others of their first days at school.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT (voice-over): Saying goodbye to dad at a luxury hotel, hopping in the motorcade with mom for the ride to school. You know, that girl who belongs to this guy, sure they can try to make things seem... UNIDENTIFIED FEMALE: Normal, normal, normal.
UNIDENTIFIED FEMALE: Ah, the quest for a normal life.
UNIDENTIFIED MALE: It's not going to be normal at all.
MOOS: You'd think all the attention can turn a kid into a basket case. NBC made a public virtue of having its reporters vamos right before the Obama kids arrive at school.
TOM COSTELLO, NBC CORRESPONDENT: Matt, the last thing they need is for a camera crew to stand outside their school so we are leaving. Not a bad idea.
UNIDENTIFIED MALE: Tom Costello, thank you very much.
MOOS: But it was hard to resist replaying that motorcade footage say, oh, five times.
UNIDENTIFIED FEMALE: Can we roll it back and see it one more time, because you can see, I think you can see Sasha's little head.
UNIDENTIFIED MALE: Oh, that is an adorable shot.
UNIDENTIFIED MALE: But I would have liked to go to school in a motorcade.
MOOS: Watching the Obama daughters had us out dredging up memory of first days in school.
UNIDENTIFIED FEMALE: Name tags.
UNIDENTIFIED FEMALE: Nap time.
UNIDENTIFIED FEMALE: Snack time.
UNIDENTIFIED FEMALE: I remember being dropped off and finding out that my nickname was not my real name. I had always been called Bobby, and then I found out that my real name was Roberta.
UNIDENTIFIED FEMALE: I remember I was chewing gum and I had to take it out.
UNIDENTIFIED MALE: I was being out for wearing a blazer.
MOOS: That would have never happened to him if the guys with the earpieces accompanying Sasha Obama had been around. Back when Amy Carter was the kid under the microscope, "Saturday Night Live" parodied her secret service protectors.
UNIDENTIFIED ACTRESS: Amy is cheating?
UNIDENTIFIED ACTRESS: I am not.
UNIDENTIFIED ACTRESS: Yes, you are.
UNIDENTIFIED ACTRESS: I am not.
UNIDENTIFIED ACTRESS: You are, too! You are, too!
MOOS: But whether you arrived by motorcade or school bus --
UNIDENTIFIED MALE: I was scared. I was crying.
UNIDENTIFIED MALE: I was petrified, and I missed my mom.
MOOS: I missed my mom so badly that I threw up on my outfit and she had to come with a new dress for me.
UNIDENTIFIED MALE: See, I don't feel so alone now.
MOOS: Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
CHETRY: Man on the ground, with police all around. What happened next shocked everyone. An unarmed man shot and killed at close range, but why?
Plus, autopsy results on John Travolta's son.
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UNIDENTIFIED MALE: Subdural hematoma, which is a bleeding underneath the skull.
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CHETRY: Death by seizure. But did cleaning products really make him sick in the first place?
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JOHN TRAVOLTA, ACTOR: I was obsessive about cleaning so we constantly have the carpets cleaned.
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CHETRY: Dr. Sanjay Gupta's on the case. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING. After losing the White House and numerous congressional seats on election night, the Republican Party is looking for a leader. Later today a committee will review six candidates who all want to be RNC chairman. All six of them debated yesterday.
One man hoping to get the job is former Ohio Secretary of State Ken Blackwell. He joins us live from Washington this morning.
Good to see you again, Ken. KEN BLACKWELL (R), FMR. OHIO SECRETARY OF STATE: Good to be with you.
CHETRY: So Republicans are not only trying to figure out the next leader, but they're also trying to figure out the future of the party, what it stands for.
You know, a lot of Republicans believe that the party's gotten away from the conservative principles with the financial bailout, the auto bailout, you even yourself said that President Bush opened the door to big government. So how will the GOP get back to those fiscal conservative principles?
BLACKWELL: I think we are going to witness a shareholders revolt in the Republican Party. And the 168 members who make up the Republican National Committee are the directors, and they're going to demand a restructuring of the party, where we put less emphasis on the bureaucracy inside of the beltway and put more resources, responsibility and recruitment at the local level -- in the precinct, in our counties, townships, and states.
So I think we're going to see a restructuring of the party, a shift in power away from the executive branch here in Washington D.C. and back into our states. I want to lead that revolution and devolution of power back to our state parties.
CHETRY: You know, you're one of two African-Americans that are seeking the Republican Party chairmanship. But there are only actually three black members of the Republican National Committee.
How do you make the case to other people of color that the Republican Party is a party they should be with, that there's the tent big enough for them?
BLACKWELL: Well, one of the things that I've done is I've crisscrossed the country and I've spent a lot of time in the territories -- the Virgin Islands, the America Samoa, as well as Puerto Rico.
I think those three territories can help us with African- American, Latinos and Asians.
And when we stop looking at a cookie cutter approach here in Washington, D.C., and sort of tap the leadership of resources of the party at the grassroots level, that's when we can begin to develop solutions that respond to the legitimate needs and aspirations of people of all colors.
We don't have to adopt an approach that is color conscious. We can adopt an approach that has been consistent with Republican legacy, one of being the party for freedom, limited government, and the rule of law.
CHETRY: All right. Well, some say there's a perception problem. I mean, recently with Chip Saltsman, he is also vying for this position with the Republican National Committee. He had a lot of criticism aimed at him for this Christmas CD that he sent out to other members. Some parody songs that are of course, you know, "Barack the Magic Negro," one of them. I want you to hear what our Republican analyst, CNN contributor, Leslie Sanchez, said about the situation.
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LESLIE SANCHEZ, REPUBLICAN STRATEGIST: I think it continues to perpetuate an incorrect stereotype that Republicans have a tenure when it comes to being inclusive and building in communities of color.
(END VIDEO CLIP)
CHETRY: So to send that around even jokingly, do you think that was appropriate?
BLACKWELL: Well, look, what I know is that this is selective hypersensitivity. The reason I say that is because when Al Sharpton and others would come into Ohio and call me outside of my name, call Whitewell instead of Blackwell because I happen to be a conservative Republican, I didn't hear this hypersensitivity and concern about that approach.
It seems that it's OK to attack a conservative, and call them out of their names and use parody and humor to degrade them, but all of a sudden, Republicans get shot down for parody and humor that a lot of folks, even on CNN, get millions of dollars for.
CHETRY: Well, you called it a bit of hypersensitivity. Let's just say that you had an opportunity to send a gift to the RNC committee members. Would you have sent out this CD?
BLACKWELL: Oh no, I wouldn't. I wouldn't have. But, again, I'm not going to throw Chip under the bus because he sent a CD with 30-odd cuts on it, and one happened to be a parody that was actually geared towards criticizing Al Sharpton's concern for the fact that Barack Obama was liked by so many people.
CHETRY: All right. Well, I want to thank you for joining us this morning. As we said, you guys debated yesterday and you're hoping to get the job as the new RNC chair. Good luck to you, and thanks for being with us, Ken.
BLACKWELL: Good to be with you. Good morning.
ROBERTS: Coming up now to the top of the hour. Breaking now in the Middle East. The Red Cross says there is a full blown humanitarian crisis in Gaza. The United Nation says Israeli airstrikes have hit two schools in Gaza operated by the United Nations Relief and Works Agency. At least one said to be a direct hit. Those attacks killings at least five Palestinians.
The Israeli military has now surrounded Gaza City. It says it has killed 130 Hamas fighters since beginning a ground offensive over the weekend. Barack Obama meeting with his economic advisers today after pushing a $300 billion tax cut on Capitol Hill. It's part of his plan to rescue the United States from recession.
The president-elect saying the economy is bad and getting worse. He's also planning to deliver a major economic speech on Thursday.
The FBI wants you. The agency is said to be on its biggest hiring blitz since 9/11.
