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AMERICAN MORNING

"Slumdog" Scores Big at SAG Awards; Ill. Governor Considered Winfrey for Senate Seat; Obama Gives States OK to Set Environmental Standards; Security Alert in Yemen

Aired January 26, 2009 - 07:59   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JOHN ROBERTS, CNN ANCHOR: One minute now to the top of the hour, and we're following breaking news this morning. Just when you thought this story could not get any stranger, it does. Embattled Illinois Governor Rod Blagojevich telling ABC in an interview just minutes ago that he had considered appointing Oprah Winfrey to fill Barack Obama's vacant Senate seat. The governor says he reconsidered, though, because it might come across as a gimmick and the talk-show host was probably unlikely to accept. Blagojevich's impeachment trial begins today.

A controversial Bush administration environmental policy is about to go up in smoke. In just a couple of hours, President Barack Obama expected to give California and 13 other states a green light to set their own auto emission standards as well as fuel efficiency standards. The Bush administration had denied them permission to impose those tougher standards and then federal clear air regulations require.

Pfizer, the world's largest drugmaker, has agreed to buy rival Wyeth for some $68 billion. If the deal goes forward, it will be the largest merger in the pharmaceutical industry since Pfizer bought Warner-Lambert. That was back in the year 2000.

And actors honored their own last night at the Screen Actors Guild Awards in Hollywood. "Slumdog Millionaire" won the top SAG Award, as it's called, Outstanding Performance by a Cast. Other winners included Sean Penn for "Milk," Meryl Streep in "Doubt" and the late Heath Ledger for his role as The Joker in the "Dark Knight." On the television side, "30 Rock" swept the Comedy Awards winning for its ensemble cast and lead actors Alec Baldwin and Tina Fey.

(BEGIN VIDEO CLIP)

TINA FEY, "30 ROCK": I want to thank my daughter Alice for being the funniest person in my family, for coning phrases like "I want to go to there" and sometimes just putting on pretend makeup in the mirror and she will turn to me and say, "I look like Barack Obama," has somehow gotten it in her head that it's a good thing to resemble a famous politician. I don't know where she got that idea. But it kind of is a little stroke of luck that could happen.

(END VIDEO CLIP)

ROBERTS: And no, she can't see Alaska from her house. Hugh Laurie won Best Male Actor in a television drama series. That's a second time he has won that award for "House."

ERICA HILL, CNN CO-ANCHOR: We want to get you back now to that bit of breaking news we're following this morning. Illinois Governor Rod Blagojevich saying he considered appointing talk show host and media mogul Oprah Winfrey to the empty Senate seat left by President Obama. In fact, here's what he told ABC's "Good Morning America" just a short time ago.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: Who were you thinking, Governor, for Senate who wasn't in any of these telephone calls?

GOV. ROD BLAGOJEVICH (D), ILLINOIS: Well, there were a lot of different candidates that I explored. You know, there were -- and, again, the full story will come out at the appropriate time. Do you have any suggestions of who I might have been thinking about? What have you heard?

UNIDENTIFIED REPORTER: I heard Oprah.

BLAGOJEVICH: That is true.

UNIDENTIFIED REPORTER: Did you call Oprah? Were you talking to her? Was this something you were just thinking?

BLAGOJEVICH: No. The idea came to me from a friend, and then among the considerations we discussed whether or not it made any sense. She seemed to be someone who would help Barack Obama in a significant way to become president. She was obviously someone with much broader bully pulpit than other senators. She probably wouldn't take it. And then we talked about if you offered it to her how would you do it in a way that it didn't look like it was some gimmick and embarrass her.

(END VIDEO CLIP)

HILL: That could be the dilemma, not making it look like a gimmick. Blagojevich is skipping his impeachment trial, although it does begin today. Instead, he is hitting the TV talk show circuit. You could see there this morning. And then tonight, he will be joining CNN's Larry King at 9:00 Eastern.

ROBERTS: He is suggesting that the trial was fixed because he is not allowed to call witnesses.

HILL: Right. He feels that he is not getting a fair shake in it. Actually, had a very lengthy comparison of himself to a cowboy on Friday.

ROBERTS: Senator Winfrey, huh?

HILL: Yes. It's got an interesting ring to it. Somehow I'm thinking she might say no, but who knows. We have some calls out, as I understand it. So we'll see if we get any sort of a comment back. I'm expecting a no comment from the Oprah Winfrey folks. But who knows?

ROBERTS: Well, too late anyways, but interesting thing to consider. I mean, she was being talked about as a potential ambassador because of her political connections.

HILL: Right. Right. And a lot of people had mentioned wanted her to run for president, although she said, you know, that's not really something I'm interested in, but this is a different job.

ROBERTS: Strange story takes yet stranger twist.

HILL: It gets better by the minute, doesn't it?

ROBERTS: Forget the future. More breaking news this morning as President Barack Obama begins his second week in office, set to roll back a major Bush environmental policy by allowing California and more than a dozen other states to set their own standards for fuel efficiency and emissions.

But critics say letting states impose tougher auto emissions standard is a mistake. Earlier on AMERICAN MORNING, Republican Senator James Inhofe of Oklahoma called it, quote, "Environmental thuggery."

CNN's Suzanne Malveaux broke this story. She's live at the White House this morning.

This is a major reversal in Bush administration policy, and obviously one that not everyone is thrilled about, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: That will be interesting to see what President Obama's reaction to that environmental thuggery. That comment that was made. Obviously, he is trying to put a stamp on environmental policy. This is a process here. It's something that he talked about during the campaign.

As you may recall, it was Governor Arnold Schwarzenegger of California who went to former President Bush and asked simply for a waiver from the environmental protection agency saying, look, myself and this other group of states, we want to go beyond what is required by federal law when it comes to auto emissions standards, and President Bush said, no. That he did not think that that was a good idea, that it was not enforceable, that it was too confusing.

So what you're going to see President Obama do initially is simply put out this memo asking for the EPA to reconsider this waiver, take a look at this. Does this make sense? It will take a couple of months to accomplish, but if in fact that does happen, it really would be a very significant reversal.

We're also expecting, John, that he will call for tougher fuel efficiency standards, emission standards. These types of things that he is going to look to federal agencies, as well as departments for ways of saving energy. All of this a big part of the package that he is going to outline later today in the East Room -- John. ROBERTS: All right. Looking forward the coverage of that from Suzanne this morning. Suzanne Malveaux at White House. Thanks so much.

HILL: And some more breaking news that we are following this morning. A spokesman for the Saudi Interior Ministry confirms several Saudi nationals who had been released from Guantanamo Bay have now been rearrested.

CNN's Barbara Starr is following the story for us. She is live at the Pentagon.

Barbara, quite a development this morning.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: It is, indeed, Erica. Our own Nic Robertson has been in communication with the Saudi Ministry of Interior spokesman. And Nic says that spokesman is now confirming nine detainees who were released from Guantanamo Bay went back to Saudi Arabia, now rearrested over the weekend by the Saudi government. And, of course, this just underscores the growing controversy about President Obama's decision to close the facility at Guantanamo Bay. Just one element of his effort to really re-make the war on terror, make Afghanistan and Pakistan the central front.

What can we expect week two now of the Obama administration? Well, the president is very likely to come over here to the Pentagon, perhaps as early as Wednesday, to sit down with the Joint Chiefs of Staff and talk to them about where they can get more troops for the war in Afghanistan. Defense Secretary Robert Gates could sign deployment orders by the end of the week.

Erica?

HILL: All right, Barbara, thank you.

A tragic death at a high school football practice in the summer heat. But the coach is now being charged with homicide. Could this unprecedented case affect coaches across the country?

And Barack Obama is not only reaching across the aisle. He's actually been reaching out to a wide range of religious groups. We'll hear what Christian conservatives say about the new president. It is the Most News in the Morning. It is six minutes after the hour.

(COMMERCIAL BREAK)

HILL: Just in with some breaking news. Christine Romans actually here "Minding Your Business" with the latest. And this is a huge number. More layoffs coming, but this company, just say they posted a profit.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I know. This is Caterpillar earnings we're telling you about. We're getting you earnings report from a lot of these different companies, and it's how we really tell what's happening in the economy. And these company has have to tell their shareholders what's going on with their bottom line, what's going on with their -- with their labor situation.

Caterpillar says it's in the process now of firing 20,000 workers. We knew that they were tightening the belt. In the fourth quarter, we knew that they were cutting pay for management, that they were cutting pay actually all the way down the line, that they were going to be ending merit pay. Now, 20,000 job cuts. 5,000 new job cuts and global support, the company says in management, and 15,000 as they say layoffs and separations that have already in the process. That process started actually in the fourth quarter. So 20,000 altogether.

And you're right, Erica. It's so interesting. Of course, Caterpillar, the maker of bulldozers and excavators and this big heavy equipment, they've been doing well overseas, especially in emerging markets. The beginning of the year began like a blockbuster. I mean, 2008 was record earnings, record profit. And then everything fell off a clip.

And now Jim Owens, who ran that company, says they are working on their trough expectations, meaning because it's so unclear, they have to think the kind of the worst case scenario almost, and that is the way they are operating here. But things in just one year went from record great to tightening the belt, laying off 20,000 workers.

I mean, that's a lot of folks who -- these kinds of lay offs, when you see them are pretty much unheard of. And we've heard a couple of different -- Circuit City going out of business. 30,000 job cuts there. When you see job cuts that big and that spread out, that's a whole lot of pain across the spectrum. So mass layoffs at CAT, again 5,000 new ones, managers, also global support, 15,000 layoffs and separations as they say. Whether it's a separation or it's attrition or whatever it is --

HILL: When you're losing your job, you're losing your job.

ROMANS: Yes, you're losing your job. That's right.

ROBERTS: I was surprised at the Harley Davidson news late last week as well.

ROMANS: That's right. I mean, I really can't find any sectors that are not reporting these sorts of things. Although, the outplacement firms tell me that they are doing gang-buster work right now...

(CROSSTALK)

ROMANS: ... because people want to be retrained. So especially these firms that are specializing in retraining people, people taking your skills, your caterpillar skills and making those work maybe in health care, whether its job growth.

ROBERTS: OK. So a lot of people probably wondering why all of this is happening. Well, we may have some suggestions here. In China, you see, it is now the year of the Ox. Across Beijing, yes, fireworks and celebrations help bring in the New Year. The Ox is said to symbolize calm, hard workers, all then tenacity. However, traditionally, the year of the Ox has brought along economic doom. 1973, for example, was an Ox year. Remember the oil crisis?

HILL: We need that resolved -- tenacity.

ROBERTS: Yes. Fortune tellers say those born in an Ox year like President Barack Obama face tough times, but they can thrive if they stay patient and mentally strong.

HILL: So there you go. Note to the president, make sure you stay patient and mentally strong.

ROBERTS: Gird your loins, folks. It's the year of the Ox. Get ready; it's going to be bad. 12 minutes after the hour. We'll be back right after this.

(COMMERCIAL BREAK)

HILL: We want to get you now to another story that we are just learning of. Another 8,000 job cuts set to hit the economy, perhaps someone you know. Christine Romans standing by "Minding Your Business."

It really is earning season, I guess, at this point, because they are just coming -- it's like a flood, one after another.

ROMANS: Right. Well, we hope it's earnings. And in some cases, it's not earnings anymore for some of these companies. Hi, everybody. Good morning.

Sprint Nextel saying it's going to lay off some 8,000 positions during the first quarter. We just told you about Caterpillar with its quarterly profit work saying it could lay off about 20,000 workers. 15,000 separations and job cuts already under way at CAT. Another 5,000, they're announcing in management and global support.

Now Sprint Nextel plans to eliminate 8,000 positions during the first quarter. That according to A.P. We will get that right for you in just a moment. But just so you know, I mean, this is the way it is. These companies come out and give us their progress report and this is what it means.

HILL: So does that mean that we're going to continue to see more of this throughout the day and perhaps -- at least as long as it's reporting season continues?

ROMANS: Yes. I think it's going to be a tough week. I think you're going to be hearing about this every morning in a lot of different industries and a lot of different folks are going to find out that their job is up or they might even have to take a pay cut, or they might have to move down the ladder in their job. And what the experts tell me is that if your boss comes to you and says, look, we're going to cut 5,000 jobs, but we should be cutting 10,000 jobs, would you be willing to take a lower paid position or work in another part of the company? You should say yes. That's what the job placement people tell me. HILL: Also, because you can't guarantee there is something else out there.

ROMANS: That's right. That's right. Absolutely.

HILL: Well, all right. Christine, thanks.

ROMANS: Thanks.

HILL: John?

ROBERTS: Erica, thanks. Sixteen minutes after the hour.

And unprecedented legal case that we're following this morning. High school football coach David Stinson from Louisville, Kentucky will be arraigned today on charges of reckless homicide for the death of one of his players. 15-year-old Max Gilpin collapsed during practice last summer. He died three days later from complications of heat stroke. It's believed to be the first time ever that a coach could be criminally held responsible for the death of a player.

Our senior legal analyst, Jeff Toobin, is here with us now. There have been plenty of civil cases but this is the first time it's ever been in the criminal level.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: They have. Fortunately, we live in a world where players don't die that often in the course of practice or games. But it has happened. I know you discussed in the last half hour by Korey Stringer, the Minnesota Viking, who died under similar circumstances during training camp. But this does appear to be the first time a coach could go to jail for what he did or didn't do in a practice.

ROBERTS: So, he has to be found, what, criminally negligent?

TOOBIN: Yes. The technical charge is called reckless homicide. And what that means is that he took an action that fails to perceive a substantial or unjustifiable risk will occur. These are legal words that, you know, are hard to define. But you can see the point, that if you do something that it's reasonably foreseeable, that something terrible will happen, you can go to jail.

ROBERTS: So the issue is what the action was. Now, the local paper reported that the heat index at the time was 94 degrees. And that according to regulations in the High School Athletic Association, any time the index is below 95, coaches should, quote, "provide ample amounts of water." This means that water should always be available and athletes should be able to take in as much water as they desire. The same paper reported that people heard that the coach was denying his players water. So how much of a problem is that going to be?

TOOBIN: Well, I think you put your finger on the key issue in the case. Because if it is true that the coach denied access to water or limited access to water or really did anything that didn't allow this player or other players access to water, he could really go to prison. I mean, that is a serious enough defect in his behavior. But in fairness, we need to point out that the coach has said that there wasn't any sort of limitation on water. So that factual issue I think will be at the center of the case.

ROBERTS: I mean, there are plenty of coaches who had denied their players water as a former punishment. In his book, "The Last Lecture," Randy Pausch talked about a coach who gave a very formative experience, who thought that his players were playing terribly so he denied them water, but it was 95 degrees out there.

TOOBIN: Well, and Bear Bryant, the famous coach of Alabama was famous for denying access to water. This is an area where attitudes have really changed over the years. This used to be an aspect of toughness that, you know, don't take a break and get water. Because of situations like this, we know that this could be a life and death decision. So the fact that something was done this way in the old days is not going to be a defense in this case.

ROBERTS: And what do you think the ripple effect will be?

TOOBIN: Well, I think the ripple effect -- I mean, frankly, I think these kind of things have a positive ripple effect in the sense that it puts the word out that water is not something to be given or withheld based on punishment or how the team is doing. This is a matter of health. And I think it's a positive message out of a terrible situation that, you know, you just can't mess around with.

ROBERTS: We will keep following this case. I'm sure you'll be on top of it.

TOOBIN: Interesting case.

ROBERTS: Jeff Toobin, good to see you this morning.

TOOBIN: OK, John.

ROBERTS: Erica?

HILL: John, he has already reversed abortion-related restrictions on U.S. aid money that were in effect under President Bush. But President Barack Obama says he is reaching out to all sides of the abortion issue. Is he really? The head of the Family Research Council will join us with his take.

Plus, 20,000 women fighting to show their breasts online all in the name of motherhood. We'll tell you which Web site that is supposed to bring people together is stopping them. It is 19 minutes after the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: Who were you thinking, Governor, for Senate who wasn't in any of these telephone calls?

BLAGOJEVICH: Well, there were a lot of different candidates that I explored. You know, there were -- and, again, the full story will come out at the appropriate time. Do you have any suggestions of who I might have been thinking about? What have you heard?

UNIDENTIFIED REPORTER: I heard Oprah.

BLAGOJEVICH: That is true.

UNIDENTIFIED REPORTER: Did you call Oprah? Were you talking to her? Was this something you were just thinking?

BLAGOJEVICH: No. The idea came to me from a friend, and then among the considerations we discussed whether or not it made any sense. She seemed to be someone who would help Barack Obama in a significant way to become president. She was obviously someone with much broader bully pulpit than other senators. She probably wouldn't take it. And then we talked about if you offered it to her how would you do it in a way that it didn't look like it was some gimmick and embarrass her.

(END VIDEO CLIP)

HILL: Blagojevich's impeachment trial begins today. He, however, is skipping that trial, instead, doing a bunch of TV interviews including CNN's "LARRY KING LIVE." In fact, Larry has the first exclusive prime time interview with Governor Blagojevich. That's tonight at 9:00 Eastern, 6:00 Pacific. You don't want to miss it.

Senator John McCain looking back on his campaign and his choice of running mate, Governor Sarah Palin. And despite the outcome, he told Fox News Sunday he has no regrets.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: You know, I don't have a lot of regrets about it. I think we ran an honorable campaign. And I think the world of Sarah Palin. She energized our party. She has a bright future in our party. I'm pleased to have known her and her wonderful family.

(END VIDEO CLIP)

HILL: Sarah Palin, of course, recently has spoken fairly openly about her regrets with the campaign. John McCain, though, doesn't, of course, as you heard there, doesn't seem to feel the same way.

Speaker of the House Nancy Pelosi now defending a move to add birth control funding to the economic stimulus package. Republicans have criticized on the millions earmarked to expand family planning services. Pelosi, though, said contraception would actually help ease the burden of children on the state and federal system.

ROBERTS: Well, just as he is trying to bridge the partisan divide between Democrats and Republicans, President Barack Obama is also reaching out to a range of religious groups. Obama made inroads with the Christian right during the campaign. So, what do they think of the new president so far? Tony Perkins is president of Family Research Council and he joins us now.

I want to ask you about Nancy Pelosi's statement in just a couple of minutes. But first of all, let's focus on an action that the president took last week, where he rescinded the so-called Mexico City policy, or it's also known as the Abortion Gag Rule, prohibiting federal funding to foreign family planning clinics to talk about abortion.

He said, quote, "For too long, international family planning assistance has been used as a political wedge issue, the subject of a back and forth debate that has served only to divide us. I have no desire to continue this stale and fruitless debate."

Your response, Tony?

TONY PERKINS, PRESIDENT, FAMILY RESEARCH COUNCIL: Well, first, it's not a gag rule. What we're talking about here is taking taxpayer money to promote abortion overseas and to fund organizations that lobby to change the laws of certain countries.

I mean, I think it's kind of ironic that in a week that the president outlawed interrogation tactics that are called torture on terrorists that he also passed a measure, signed a measure, that will take taxpayer funds to promote abortion overseas.

I mean, there's a contradiction in that. And apparently he sees unborn children in places like Honduras or maybe even Kenya as more of a threat to this country than terrorists who kill Americans.

ROBERTS: This is an issue that is ping-ponged back and forth. Reagan signed it. Clinton unsigned it. Bush signed it. Obama unsigned it. We're just going to keep going back and forth --

(CROSSTALK)

PERKINS: Well, John, first you've got to realize that we're not talking about whether or not people have access to abortion. We're talking about taking taxpayer money to fund it and promote it. Now, promote it in this measure. But the president, in statements that he has made, would like to directly fund abortion in this country. He has said that he would like to pass the Freedom of Choice Act, and incrementally he's doing it. You mentioned Nancy Pelosi's comments.

I mean, family planning is really a buzz word for both birth control and abortion counseling. And in the stimulus package, there is a massive expansion and what's most onerous about it is that it goes directly to children. Children can sign up and receive these drugs and devices without parental consent.

ROBERTS: Let's drill down in the Nancy Pelosi part of this issue. She was on "This Week" with George Stephanopoulos yesterday. He asked her about this part of the economic stimulus plan which would fund family planning clinics. Let's listen how she described it.

(BEGIN VIDEO CLIP) NANCY PELOSI, SPEAKER OF THE HOUSE: Well, the family planning services reduce costs. It reduces costs. The states are in terrible fiscal budget crisis now. The contraception is -- will reduce costs to the state.

(END VIDEO CLIP)

ROBERTS: So she is saying that family planning is part of an economic stimulus package and some people are saying how is that economic stimulus?

PERKINS: Well, first, it's a short-term view of stimulating the economy because you want more workers. That's the problem we have. Demographically, we are losing the workers that are to support future retirees.

ROBERTS: Well, in Japan, they're actually telling people to go home and procreate.

PERKINS: Absolutely. I mean, a true economic stimulus package would do a couple of things. One, it would give -- it would continue taxpayer -- it would make these tax cuts that have gone toward families permanent, so that the families don't have to play tax charades every year. So that we're talking about the child tax credit. We're talking about the marriage penalty, and eliminating the AMT.

Also, I think we should also look at the corporate tax structure. You know, America -- corporations in America have the highest tax rate in the world, over 39 percent. If we want to create environment that creates jobs, we have to first create an environment that is attractive to business. That's what this package should be looking at.

But yet, what we're looking at is not a stimulus package to create jobs. Rather, it looks like a typical government pork on steroids. This is what is being proposed by the Obama administration.

ROBERTS: Certainly, there are a lot of provisions of this bill. A lot of people raising questions about it. Tony, it's great to see you this morning. Thanks for stopping by.

PERKINS: Thanks, John.

HILL: Want to get a look now on what is on President Obama's agenda for the day. This morning, he's meeting with his economic advisers and then at 10:30, just about two hours from now, out of that, remarks on be jobs, the climate change and energy independence. That's going to happen in the East Room. Moving along with his schedule throughout the day, at about 1:30, White House Spokesperson Robert Gibbs will give the daily White House briefing. That's going to happen for reporters in the briefing room.

And the man picked to help turn the troubled economy around is one step closer to getting the job. Today, the Senate expected to vote on Timothy Geithner's nomination as treasury secretary. Last week, the Senate Finance Committee voted 18-5 to recommend that Geithner be confirmed.

President Obama has also made it clear the U.S. will not torture. His signing of the executive order on interrogations and detainees, though, does raise some new questions. Just what do you do with an alleged terrorist? Jeanne Meserve is live in Washington for us this morning.

Good morning, Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Erica, with President Obama limiting how and where detainees can be interrogated, some analysts are asking if intelligence agencies will be able to get the information they need to keep the country safe.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): The man who planned the 9/11 attacks, Khalid Sheikh Mohammed, was water-boarded and, as a result, intelligence officials say he gave up valuable information about al Qaeda operatives and planning. Water-boarding, which simulates drowning and is considered torture by many, was allegedly stopped several years ago. But the Obama administration wants to end others so-called enhanced interrogation techniques.

DENNIS BLAIR, DIR. OF NATIONAL INTELLIGENCE NOMINEE: Torture is not moral. It's not legal. It's not effective. The U.S. government will have a clear and consistent standard for treatment of detainees.

MESERVE: That standard would be the Army's Field Manual, which spells out 19 noncoercive methods of interrogation. If Osama Bin Laden is taken into custody or if the nation is facing the prospect of another attack, will those softer techniques elicit critical information from detainees?

SEN. MITCH MCCONNELL (R), MINORITY LEADER: I do think that the Army Field Manual is too limiting in dealing with people who, you know, have the will and the capability to attack us again like they did on 9/11.

MESERVE: With the closing of Guantanamo Bay and secret overseas CIA prisons, future detainees may stay in foreign custody. Those countries might not have the same constraints on interrogations. They could share what they learn or let U.S. intelligence sit in.

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: While you're able to say that you don't have U.S. secret prisons, in effect, you may be able to get the benefit through your relationship with foreign intelligence services.

(END VIDEOTAPE)

MESERVE: The Obama administration has left open the possibility that in some circumstances, U.S. interrogators could use harsher techniques than those in the Army Field Manual, but we may never know what they are, because they are only effective if they are secret. Erica, back to you. HILL: Interesting point there, Jeanne. I know you've also been working on another story this morning, though, involving Barack Obama's aunt, who was within the United States illegally. What is the update there?

MESERVE: Yes, she was discovered to be in this country illegally by the media, at least, just a couple of days before the election. The Associated Press, through a Freedom Information Act request, got hold of a directive which was issued at that same time by immigration and customs enforcement, saying, hey, before you make any high-profile arrests, bring it to top leadership so we can vet this, so we can consider what adverse effects it might have with Congress or the media.

A spokesman for the immigration and customs enforcement tells me this morning that she can't say if there is any connection between that directive and Obama's aunt. She says this was a general directive issued at a very sensitive time -- Erica.

HILL: It's a general directive, not a political move here, Jeanne?

MESERVE: Well, clearly they were very sensitive to the political implications of anything that they were doing in terms of arrests. What she's refusing to say is whether the particular arrests that prompted this was the Obama aunt.

HILL: All right. Jeanne Meserve, thank you. John.

ROBERTS: Thirty-two minutes after the hour now, Erica, and time to fast-forward to see what stories will be making news later on today.

Today is the deadline for money manager Bernard Madoff to report all of his international assets. Madoff allegedly duped high profile investors out of as much as $50 billion in a large-scale Ponzi scheme. That's an understatement. A formal indictment expected within the next few weeks.

The Coatesville, Pennsylvania City Council meets tonight to deal with a rash of arson fires. The small city near Philadelphia declared a state of emergency after a seven-alarm fire caused millions of dollars in damages. It was the 14th suspected arson fire this month.

And then at 4:30 Eastern, former presidents Bill Clinton and George H.W. Bush will speak at the National Auto Dealers Conference. It's the first time since the bailout that car dealers can meet face- to-face with auto industry leaders. That is what's making news, which we will following later on today.

HILL: Indeed, well a busy day ahead.

Imitation may be the highest form of flattery, but the first lady not too happy about two dolls seemingly named after her daughters. Is that really the case? Well, we'll find out. We'll also tell you why she's not too happy about it. Plus, cover-up. Find out why 20,000 women are saying a Web site is stopping them from teaching new moms how to nurse. It is 33 minutes after the hour.

(COMMERCIAL BREAK)

ROBERTS: Thirty-six minutes after the hour. This just in to CNN. Heightened security alert in San'a, the capital of Yemen. This comes after a threat was allegedly phoned in to the U.S. embassy there. You'll remember back in September of 2008, there was an incident outside the U.S. embassy where gunmen with explosives tried to get through the perimeter barricades. They didn't manage to get through but a number of people were killed in that attack. Now the security ministry in Yemen is saying that they have received evidence of new threats against the United States embassy and the Russian embassy.

Apparently these were to take place, quote, "within a number of hours." Ryan Gleeha, who is a spokesman with the U.S. embassy, confirmed that there was a threat. It as telephoned into the U.S. embassy and that, of course, the U.S. embassy personnel and the state department taking all appropriate precautions. But again, Yemen's interior ministry heightening security measures around the U.S. embassy in San'a as well as the Russian embassy. Our Jill Dougherty at the State Department is looking into this. We'll have more information on it as soon as it becomes -- Erica.

HILL: All right, John. One of the number of breaking stories just coming in to us this morning. We are going to continue to follow. This may not be breaking right now, but it is an important bit of news that really has a lot of women and families riled up.

Facebook used to be just for kids in high school and college, but now pretty much every age group has someone with a page on Facebook and there are certain nudity rules that usually apply and typically it's for things like spring break, girls gone wide wild but nursing moms? Well they too were using the dossier coming under fire to taking down some pictures of mothers breast-feeding.

Facebook says hey look, we have one policy. We have to make it work across the board and we're just protecting members. Kara Finstrom talked to one mom who is leading and on-line protest and we do want to know here, we have blurred some of the pictures for this story.

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KARA FINSTROM, CNN CORRESPONDENT (voice-over): So show me this pictures at issue here. All right, issue here. Photographs of women breast-feeding. Natural or obscene? The answer depends on who you ask. The question is putting Facebook, the social networking Web site, in an uncomfortable place.

DMITRI WILLIAMS, USC PROFESSOR: If they are playing the role of community police, they have to respect the will of the majority while protecting the minority and that is a tough line to walk. FINSTROM: USC professor Dmitri Williams is talking about Facebook's ban and removal of certain breast-feeding pictures. Is it hard keeping up with this?

Yes, it is.

FINSTROM: Young mom Kelly Roman is leading an online protest, asking other mothers to post their breast-feeding pictures.

KELLI ROMAN, BREAST-FEEDING ACTIVIST: Facebook group called Hey, Facebook, breast-feeding is not obscene. When we first started we only had a few hundred members, but within a couple of weeks, we had like 20,000.

FINSTROM: For Roman, it's about changing the cultural norm.

ROMAN: As long as pictures of women breast-feeding are still being classified as obscene, there is still going to be a small percentage of people who think it's nasty and obscene and going to send people dirty looks and messages.

FINSTROM: Breast-feeding group La Lache says it's used Facebook as an educational tool.

LORETTA MCCALLISTER, LA LACHE LEAGUE: We actually have had to have photos specifically to show positioning. That kind of picture, what helps a mother who maybe lives out in a rural area, has Internet connection but doesn't have mothers in her community to go and talk to. How am I going to show that with being all covered?

ROBERTS: The professor Williams says Facebook actions aren't so much about censorship as a new commercialism.

WILLIAMS: The content of Facebook isn't made by a Hollywood studio or by a production crew. It's made by the users of Facebook itself. In essence, the company makes money by selling the people to each other and if the people don't behave to each other the way that everyone would like to, the company can lose money.

FINSTROM: Facebook's management refused CNN's request for an interview. But did offer a statement saying, in part, "We agree that breast-feeding is natural and beautiful and we take no action on the vast majority of breast-feeding photos because they follow the site's terms of use. Photos containing a fully exposed breast do violate those terms."

Facebook also says almost all photos banned were flagged by complaining users. Roman just wants to promote breast-feeding but she is also testing the boundaries of Internet authority and a growingly Web-connected world. Kara Finstrom for CNN, Los Angeles.

(END VIDEOTAPE)

ROBERTS: Well, the Oscar favorite is "Slumdog Millionaire." The rags to riches love story scored big again at the SAG Awards last night. We'll have a wrap-up of the latest Oscar warm up. Forty-one minutes now after the hour.

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ROBERTS: President Obama has popped up on everything from pins and hats to nail clippers. But now the president's two young daughters have entered the spotlight and the first lady is not amused. Alina Cho has been looking into this one, and she joins us. Good morning to you.

ALINA CHO, CNN CORRESPONDENT: Good morning. Not amused is right. The big question, did it cross the line, John? Good morning, everybody. You know we're talking about Malia and Sasha dolls. The first daughters are so famous you already know them by their first names. And these dolls are also called Malia and Sasha. Coincidence? Maybe not.

(BEGIN VIDEOTAPE)

CHO (voice-over): Meet Marvelous Malia and Sweet Sasha. Name sound familiar? They're the latest dolls by toy company, Ty Inc. and bear a passing resemblance to first daughters Malia and Sasha Obama.

ALLAN LICHTMAN, PRESIDENTIAL HISTORIAN: They're really cute, really wonderful and you know, by virtue of being so wonderful, they're marketable.

CHO: But does that make it right? The first lady doesn't think so. Through her spokeswoman, Michelle Obama tells CNN --

"We believe it is inappropriate to use young, private citizens for marketing purposes.

CHARLES FIGLEY, CLINICAL PSYCHOLOGIST: This is sickening and a horrible thing. As a country, we're all prepared for a terrorist attack. Well, this, in many ways, is a greed attack.

CHO: Others argue why not? Everything the Obama girls touch turns to gold.

LICHTMAN: And there really isn't much of anything that the Obamas can do about it. The president is not going to go sue private companies.

CHO: If history is any guide, children in the White House, especially the young ones, are generally off-limits. In the Obama White House, the first couple makes it clear they want their daughters to live as normally as possible.

These dolls, some say, leave the first daughters exposed.

DR. JUDY KURIANSKY, CLINICAL PSYCHIATRIST: They should not be sold and feel like that they can be bought. This is not healthy for them psychologically. Ty Inc. tells CNN information about the development of its products is proprietary. A Ty executive adds, we did not make the dolls to physically resemble either of the Obama girls.

LICHTMAN: It's not surprising that in our consumer culture and in these hard times economy, that people are going to try to take advantage of the Obama image and even Obama's wonderful two little girls.

CHO: They're not the first. In the '60s, Caroline Kennedy had a doll, too. And some say from a marketing standpoint, it's a genius idea.

LICHTMAN: We live in the land of the free and the home of the dollar. Barack Obama is kind of a unique figure. He is our political leader. He's a rock star. He's an icon.

(END VIDEOTAPE)

CHO: And now so are so are his daughters apparently. Now, according to psychologists, the big problem is having a doll that's just like you leaves you the child exposed. They say it can make children narcissistic or very shy. Both ways to protect themselves from the fact that everybody has a little piece of them. Now Ty Inc. did speak to CNN. A spokeswoman says it's just a coincidence the dolls are named Malia and Sasha.

Ty spokesman says they're just beautiful names and worked well with the dolls we were making. John, somehow I don't think you believe that but -

ROBERTS: I just got something caught in my throat. I mean, it's for people at home to believe or not believe.

CHO: Listen. Some argue this is the ultimate marketing opportunity. There is a precedent, of course. I mentioned earlier you know the girls wore J. Crew coats to the inauguration. Web site crashed and the stock jumped 10 percent the day after the inauguration. I mean it has happened before. Anything Obama right now is selling like hot cakes. So you know there is that argument as well. Of course, the first lady not happy about it. She has said many times she wants the kids to live as normal a life as possible. Even though they are living in the White House.

ROBERTS: This requires something of a suspension of disbelief to not think that these are not tied in together. But as Allan Lichtman say "it's the land of the free and the home of the dollar."

CHO: Land of the free and home of the dollar.

ROBERTS: All right.

CHO: That's right.

ROBERTS: Thanks, Alina.

CHO: You bet.

ROBERTS: Erica? HILL: We want to get you now to some more breaking news just coming in to us. Christine Romans is "Minding your Business." And if I'm looking at the timetable for my e-mails is right, in less than an hour, in about 45 minutes, this is now the third report that we're getting of more layoffs?

ROMANS: And that's because the opening bell on Wall Street is going to open at 9:30 Eastern time. So some of these companies are reporting their profit reports. They're also letting people know what is happening before the stock market bell opens, and that's typical. And then after the closing bell this afternoon, we'll likely hear from more.

The latest company to confirm that it is cutting jobs is Deere and Company, the Moline-based agricultural company, 700 job cuts in Brazil and in Iowa. Seven hundred job cuts for Deere. This comes just an hour after its competitor Caterpillar released an earnings report that showed that it would have 20,000 job cuts. Some 15,000 job cuts have been under way beginning in the fourth quarter there.

At Caterpillar, 5,000 new job cuts for management and support, global support positions. Also Sprint Nextel in just a few moments ago reported 8,000 job cuts there. Sprint Nextel is trying to save about $1.2 billion and to do that it's going to eliminate 8,000 positions.

What we are seeing here, Erica, we are seeing companies that are trying to, as I said, the last time I spoke with you, tighten the belt and actually that is exactly what it is. Families are tightening the belt. They can't get credit. They can't make these big purchases that they used to make. They are concerned. They are kind of holding back and these companies are doing the same thing.

A survey released this morning of business economists, the economists who work for these companies in these industries, found that most of them expect the recession to continue and to actually worsen into this year. They are expecting companies to hoard catch cash. If they are hoarding cash and kind of hunkering down that means they are not hiring workers certainly and, in some cases, they are firing them.

HILL: And as you just mentioned too, many of these coming out before the bell and then after the bell. We're going to continue more. This is earnings season but you said to me it's not going to be limited to just one company issue their report cards?

ROMANS: Right. I think we're going to be hearing from a lot of different companies and I think it's quite clear that companies now, this is a good environment for them frankly to say what they are going to do. It's the beginning of the year, they've tried to weather the first few weeks. They are seeing what their fourth quarters look like, looking ahead to this year. They are starting to make assumptions and many of those assumptions mean fewer workers.

HILL: Wow. I wish the news was better. ROMANS: I know. I do, too. And I wish and I hope that this is the worst case scenario and I hope that they are, you know this is where we're seeing the ugly part of it and we'll move through it from here.

HILL: All right. Christine, thanks,

ROMANS: Sure.

HILL: CNN NEWSROOM is just minutes away. Heidi Collins is standing by at the CNN Center with a look what is coming up this morning. Hi, Heidi.

HEIDI COLLINS, CNN ANCHOR: Hey there, Erica. That's right. We're going to be talking a whole lot more about those job reports and what they could indicate as far as the overall economy goes.

Also, energy and the environment. President Obama tackles both today. Details on new plans to reverse Bush administration policy.

And governor on trial. But he's not showing up. The impeachment trial of Rod Blagojevich begins.

Plus, a town terrified by fire. More than a dozen arsons just this month. We'll have an update for you from there. We get started at the top of the hour. A busy, busy day already right here in the CNN NEWSROOM. Erica.

HILL: All right. Heidi, looking forward to it. Thanks.

"Slumdog" is top dog at the Screen Actors' Guild Awards. The little movie that could, now clearly an Oscar front-runner, in case you have any doubt. We have the full story on Hollywood's big night coming up for you right here with the Most News in the Morning. It is 50 minutes now after the hour.

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ROBERTS: Coming up on 54 minutes after the hour.

Hollywood's finest in movies and television was honored last night by its own at the Screen Actor Gild Award. CNN's Brooke Anderson hit the red carpet last night.

BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT: John and Erica, it was a star-studded night as actors put aside their differences regarding a potential strike to honor their own at this year's Screen Actors Guild Awards. "30 Rock" rocked the show and the late Heath Ledger was given a fitting farewell.

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ANDERSON (voice-over): Hollywood's acting community put infighting aside long enough to host the 15th Annual Screen Actors Guild Award where members traded stabbing each other in the back or patting each other on the back. ANTHONY HOPKINS, ACTOR: "Slumdog Millionaire."

ANDERSON: On the motion picture front, there was a happy ending for the gritty Cinderella story "Slumdog Millionaire" which earned outstanding performance by a cast for its Mumbai-based actors.

FREIDA PINTO, "SLUMDOG MILLIONAIRE" STAR: Everybody wants to rise out of adversity and to achieve what they really want in life.

ANDERSON: Meryl Streep, lead actress win for her role as a crusading nun in "Doubt," led her to doubt her wardrobe choice.

MERYL STREEP, ACTRESS: Well, I didn't even buy a dress.

ANDERSON: And when "Milk" star Sean Penn picked up his prize for playing gay rights activist Harvey Milk he admired the anatomically correct statuette.

SEAN PENN, "MILK": I noticed that the two statues have rather healthy packages. As actors, we don't play gay, straight. This is a story about equal rights for all human beings.

ANDERSON: I didn't see Sean Penn at all. I saw Harvey Milk.

PENN: It always goes back to the writing, and Harvey Milk in this case wrote himself a sensational life.

ANDERSON: Supporting trophies went to Kate Winslet for "The Reader" and to the late Heath Ledger for "The Dark Knight."

GARY OLDMAN, ACCEPTED HEATH LEDGER'S AWARD: He was an extraordinary young man with an extraordinary talent. I thank you, Heath.

ANDERSON: In the TV category.

ERIC MCCORMACK, ACTOR: The cast of "Madmen."

ANDERSON: The show won outstanding performance by an ensemble in a drama series.

UNIDENTIFIED FEMALE: We are really an ensemble show.

ANDERSON: For comedy series, it was the cast of "30 Rock" which tallied three wins including nods for Alec Baldwin and Tina Fey. Of course, Fey couldn't resist taking a jab at SAG stalled so-called contract negotiations with industry producers.

TINA FEY, ACTRESS: What, do you mean you don't get residuals for this?

(END VIDEOTAPE)

ANDERSON: John and Erica, the Screen Actors Guild Awards are considered a harbinger for the Academy Awards. So this could be a bit of a crystal ball in terms of who will take home an Oscar on February 22nd. Back to you.

HILL: And we will be watching for that.

I want to get you now, let you know there is some more breaking news to be had this morning. Yet another announcement. Thousands of layoffs coming from yet another company. Christine Romans is "Minding your Business." We will have the latest on that for you coming up after the short break. Stay with us, right on the Most News in the Morning.

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HILL: We want to get you straight now to the losses we told you about just before the break. Christine Romans is "Minding your Business." We're doing some quick math there during the break. Almost 36,000 job losses in the past hour.

ROMANS: That's right. And this, unfortunately, is going to be the way it's going to feel and we're going to hear for the rest of the week. We're hearing companies report their earnings. They're reporting what happened in the fourth quarter and looking ahead to the first quarter and they are saying they're going to have to lay off workers to keep going here.

The most recent, Home Depot. Home Depot will lay off 7,000 workers over the next two months. It is closing 34 of those expo design centers, five yard bird stores, two design center stores and a bathroom modeling business that it called HD-bath. So altogether, there will be 7,000 positions that will be gone. The company says this will not be any customer facing positions at the Orange Big Box Home Depot store. So the friendly guy and gal who wears the apron, they are going to be OK. It's a lot of other jobs surrounding this business that are gone.

ROBERTS: Those expo centers never did very well.

ROMANS: No, they did not. You're right, John. They didn't.

ROBERTS: A lot of pain for a lot of people, Christine.

ROMANS: That's right.

ROBERTS: Thanks so much. That's going to wrap it up for us. Thanks for joining us on this AMERICAN MORNING. And thank you very much for sitting in with us.

HILL: Thanks for letting me sit in. My pleasure.

ROBERTS: Great to see you.

HILL: Have a great day, everyone.

ROBERTS: We'll be back again tomorrow. Yes, right now, here's CNN NEWSROOM with Heidi Collins.