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AMERICAN MORNING

Pres. Obama on Financial Rescue Package; Oklahoma's Deadly Tornadoes; Get Out of Jail Free; Parting Gifts for Obama Officials Leaving More Lucrative Jobs; Supporting the Stimulus; Pot Shots at Phelps; Bottoms Up in Down Economy; Born to be Rich

Aired February 11, 2009 - 08:02   ET

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


KIRAN CHETRY, CNN ANCHOR: Well, we're coming up on two minutes after the hour. We're following breaking news. The battered financial sector taking another beating as we speak. Overseas, Hong Kong markets closing down more than two percent. Japan's Nikkei also closing a negative territory, and most of Europe's markets are down as well right now.

This morning Washington attacking the economic crisis from every angle. In just a few hours, House and Senate lawmakers are going to be returning to Capitol Hill to try to hammer out the final language of a stimulus plan.

Treasury Secretary Timothy Geithner will also go before the Senate Budget Committee to speak about the troubled economy. His testimony comes a day after he unveiled a revamp financial bailout that many say they wanted to see more detail in.

Last night on ABC's "Nightline," President Obama would not say how much it will cost you, the taxpayer.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I can't say what the ballpark figure. What I can say is --

UNIDENTIFIED MALE: Why not?

OBAMA: Well, because ultimately what happens is going to depend on how the markets respond over the long term, not today or the next day, but a month from now or two months from now. How effective we are in actually cleaning out some of these bad assets out of these banks.

(END VIDEO CLIP)

CHETRY: The president went on to say that if it works, we'll end up seeing private capital coming back into the marketplace.

You'll soon have to dig a little deeper next time you want to mail a letter. The cost for a first-class stamp is going to be going up. We'll increase 2 cents to 44 cents starting May 11th. The U.S. postal service says the increase is necessary because of the rising production costs. But you still can mail letters after the May increase for the same price if you purchase forever stamps, which are at the current price of 42 cents.

And a live look outside the apartment of Bernard Madoff. He's the man accused of masterminding one of the greatest rip-offs in history. Today is the deadline for U.S. prosecutors to either indict Madoff, cut a deal with him, or seek another delay. Madoff accused of running a $50 billion Ponzi scam at the expense of thousands of clients.

We're also following breaking news this morning. Search and rescue operations beginning at first light in Lone Grove, Oklahoma. The town leveled by a tornado that took 8 lives. In all at least three tornadoes ripped across the state.

A tornado warning has now been lifted. Tens of thousands of people, though, are still without power and they expect that the number of dead and injured in Lone Grove to rise as crews comb through the debris. Houses and businesses were flattened and residents of the small town say they will never forget what they witnessed.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It never last (INAUDIBLE) the best way to describe it right before I guess the equivalent of -- the best way to put it was a shock wave hit and just blew out everything. There's no longer -- really steel on the buildings. There are a lot of windows missing.

(END VIDEO CLIP)

CHETRY: CNN's Samantha Hayes is on the ground in Lone Grove, Oklahoma. Rob Marciano also tracking the storm system at the CNN weather system. We're going to go first to Samantha, and again, they're going to be combing through some of the wreckage again this morning, and unfortunately they may find more fatalities because of this system.

SAMANTHA HAYES, CNN NATIONAL CORRESPONDENT: Kiran, that's what they're worried about. And you mentioned homes and businesses flattened. You know, if I had been speaking you to from this location yesterday morning, I would have been inside the chamber of commerce, right off the main highway here in Lone Grove. A tornado came through yesterday afternoon and blew that building completely off its foundation. You can see debris spreading all the way back to that home over there.

And off to my left, there is a furniture store. And sheets of metal hanging on downed power lines. You can see shards of wood and all sorts of other debris strewn around.

And, you know, early this morning, we spent some time driving around this town to try and get our best estimate of the damage. And it's as tornadoes tend to behave. You know, some homes looked fine. And then others were demolished. Cars flipped over on their side. You know, big pieces of metal that were just twisted. It was amazing to get a sense of the strength of the storm. And, yes, today, now that the sun is up, emergency crews are heading out. They are certainly hoping that they don't find anybody else who did not survive the storm, but they know that's a possibility. So, we're in touch with them. Keeping an eye on the developments here. It's just going to be a tough day.

Kiran, back to you.

CHETRY: All right. Samantha Hayes for us. Thank you.

Our Rob Marciano is also tracking the storm for us. He's at the CNN weather center in Atlanta.

So this storm system you are telling us earlier is moving east?

ROB MARCIANO, AMS METEOROLOGIST: It is, but it's weakening. The line of thunderstorms is weakening, Kiran. But what this storm is going to be doing over the next day or two will actually be strengthening. This is the radar from last night as it moved across Lone Grove. That super cell tornado. And just looking at some of the pictures behind Samantha. This certainly looks to be the very least an F-2, likely an F-3 or higher.

And that is incredibly strong and early in the season to have in February. There's only been two other deadly tornadoes in the month of February in Oklahoma in the last 50 years. So that gives you an idea just how rare this event is this time of year.

What's going to happen? This low will wind itself up. So, thunderstorms will be a threat today, yes. But they won't likely to have as the higher probability of seeing tornadoes like we saw yesterday. There will still be a risk as we go through the day today, but things will begin to change in that. I think most people will see a wind event and a bigger area.

So, high-wind warnings posted from Memphis all the way back to southern Michigan. You could see wind gusts 50, 60 miles an hour and this will move towards the northeast tomorrow as well. I think New York will be fairly breezy tomorrow afternoon and tomorrow night.

Kiran, back up to you.

CHETRY: All right. At least as you said it's weakening a little bit. Still expecting some thunderstorms, though. Rob, thanks.

MARCIANO: You got it.

ROBERTS: The deadly tornadoes underscore the importance of FEMA's ability to respond quickly to disaster. The agency still without a permanent leader and under intense scrutiny, still, after its miserable response to Hurricane Katrina back in 2005.

Jim Acosta is tracking that part of the story for us this morning.

JIM ACOSTA, CNN CORRESPONDENT: Good morning, John. You know, Barack Obama has to deal with the economy. He has to deal with foreign policy crisis, and he also has to deal with hurricanes and tornadoes. Responding to those kinds of disasters. And we all know that Katrina was more than a hurricane. It was a government fiasco.

And during the campaign, President Obama promised to dramatically change the way this country responds to disasters. But as of yet, the new president does not have his own appointee running FEMA.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): When the first disaster on President Obama's watch, an ice storm, hit parts of the South, it was a holdover from the Bush administration on the scene for FEMA. The agency got good marks from state officials.

NANCY WARD, ACTING FEMA ADMINISTRATOR: Eliminate the peanut butter portion of the meal.

ACOSTA: But in its response, FEMA may have mistakenly sent Salmonella-tainted peanut butter in its meal kids to evacuees. Nobody got sick, but it was a reminder.

UNIDENTIFIED MALE: FEMA is under a spotlight. It's under scrutiny.

ACOSTA: The Bush administration's bungled response to Hurricane Katrina was one of the Obama campaign's favorite targets.

OBAMA: We can talk about levees that couldn't hold. About a FEMA that seemed not just incompetent but paralyzed and powerless, about a president who only saw the people from the window of an airplane instead of down here on the ground.

ACOSTA: He promised to fix FEMA, saying as president the head of the agency would report to him and have real emergency experience.

GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: And Brownie, you're doing a heck of a job.

ACOSTA: Translation, no more brownies. Today, former FEMA chief Michael Brown says the one thing he learned from the Katrina debacle is that the agency should have a direct line to the president. Something Brown claims he did not have.

MICHAEL BROWN, FMR. FEMA ADMINISTRATOR: You simply cannot have that in a crisis situation. You can't have that on the battlefield. And a disaster is like a battlefield. Somebody has to be in charge.

ACOSTA: Another Katrina veteran argues leadership is what counts.

KATHLEEN BLANCO, FMR. LOUISIANA GOVERNOR: I would hope that the next FEMA administrator is someone who has had direct experience with managing a very large disaster.

ACOSTA: A Democratic official says the names being mentioned include Florida's emergency management director Craig Fugate.

PROF. RICHARD SYLVES, UNIVERSITY OF DELAWARE: You need a FEMA director that can go toe-to-toe with screaming governors, with governors who are saying we need help now.

(END VIDEOTAPE)

ACOSTA: And another name that is floated out is a former emergency manager in Iowa. You know, this is just the third week of the Obama administration. Officials there tell us they are making progress in their search.

And a Democratic official points out, the cabinet secretary in charge of FEMA, Homeland Security's Janet Napolitano, did make it to Kentucky just yesterday and is promising more help for storm victims there -- John?

ROBERTS: Any idea how long, Jim, before they get a permanent leader of FEMA?

ACOSTA: Well, we do know that the Associated Press has an item out this morning saying it could be within the next couple of days. When I talked to some Democratic officials about this, they didn't indicate it was going -- it was going to be that soon, but they do know that the pressure is on.

And these tornadoes in Oklahoma and the storm system moving east will be just another reminder that they're going to have to get on this course and pick somebody soon -- John?

ROBERTS: Boy, it seems we've been talking about FEMA going all the way back to Hurricane Andrew in 1992.

ACOSTA: That's right. And that's why Bill Clinton reached out to James Lee Witt to make that position Cabinet level. All of that changed during the Bush Administration, and the Obama Administration now looking again on what to do with FEMA. That question keeps coming back to haunt presidents.

ROBERTS: The wheel just keeps going around and around and around.

ACOSTA: That's right.

ROBERTS: Jim Acosta, this morning. Jim, thanks so much.

ACOSTA: You bet.

ROBERTS: The get-out-of-jail-free plan. Too many criminals? Just let them go -- one state's frightening solution.

And President Obama took his stimulus pitch straight to Fort Myers, Florida. The city has the highest foreclosure rate in the nation. So, what does the mayor of Fort Myers have to say about the president's plan today? He is speaking out right here on CNN.

It's 11 and a half minutes after the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HENRIETTA HUGHES, FLORIDA RESIDENT: I'm the first one to say, I respect you and I'm just grateful for you.

OBAMA: Thank you.

HUGHES: I've been praying for you but...

OBAMA: I believe in prayers. I appreciate that.

HUGHES: ... but I have an urgent need for employment and homelessness. A very small vehicle for my family and I did live in. We need urgent. And the housing authority has two years' waiting list, and we need something more than the vehicle and the parks to go to. We need our own kitchen and our own bathroom. Please help.

OBAMA: Well, I -- listen, what's your name? What's your name?

HUGHES: It's Henrietta Hughes.

OBAMA: OK, Miss Hughes, we're going to do everything we can to help you. But there are a lot of people like you. And we're going to do everything we can. All right? But the -- I'll have my staff talk to you after this -- after the town hall. All right?

(END VIDEO CLIP)

CHETRY: Well, she was just one voice in the crowd, but Henrietta Hughes' tearful housing tale moved the president.

Fort Myers, Florida has been hit especially hard by the recession. In fact, we take a look at the numbers right now. Unemployment in Fort Myers now 10 percent. Last year, it was only at six percent. And the foreclosure rate, 12 percent.

So, unemployment nearly doubling in the past year. And the most shocking statistic is the one that we showed you -- the foreclosure rate in Fort Myers at 12 percent right now. So, very tough times.

Mayor Jim Humphrey is the mayor of Fort Myers, and he joins me this morning.

Thanks so much for being with us. You guys have certainly quite a challenge on your hands as we were able to see first hand yesterday by some of your very eloquent residents, who actually told the president about their own troubles right now. What is the -- why are we seeing such a high foreclosure rate, first of all, in Fort Myers?

JIM HUMPHREY (R), MAYOR, FORT MYERS, FLA.: Well, first of all, we were, of course, so pleased to have the president here. And to -- and what Mrs. Hughes expressed was a sentiment throughout the southwest Florida area, in the sense we're seeing so many of our families that are having to move out of their homes because of the foreclosure.

So, what we have said is that we need that American recovery immediately. And I was so pleased to hear what the president told her and told others, that it is urgent. They're going to respond. And we, as a city as well as a region, are responding with finances, with foreclosure assistance. We've had several community foundations to assist us.

CHETRY: Very interesting, President Obama visiting Elkhart, Indiana and also Fort Myers, Florida. A Republican county, Lee County, voted overwhelming for John McCain in the election and there's a lot of fellow Republicans who have actually been quite critical of this stimulus plan. But you believe that it's going to work. How will this stimulus plan help your city?

HUMPHREY: As I've said, and first let me say our city supported President Obama, in fact, by 60 percent, and I was publicly in support of President Obama. I felt we needed a change. I felt frankly we need this stimulus package. And so, I have gone on record to support it and say that, please make sure, though, that it gets to the local governments, where -- because we're closer to the people.

CHETRY: Absolutely. I know Fort Myers voting for Barack Obama, but Lee County, the county that you guys are in, did go to John McCain, but you're saying it's not a partisan issue, that you're for this stimulus plan.

One thing, though, that did not make it through the Senate was this 4 percent rate, maybe 4.5 percent rate, 30-year mortgage, trying to get people into a fixed situation, so that their payments don't balloon over time. Is that something that would have helped your situation? Or are there other things in this stimulus bill that you think are going to make a bigger difference for your foreclosure rate?

HUMPHREY: That would have helped. But one thing I'd love to see them address is to address the lenders and provide some relaxing of the rules regarding the reserves that they have to set aside as the value of these homes decline, because we need those lenders lending money. And, yes, if we could have had it at 4 percent, that would have helped us significantly.

But it's still at a low enough percentage that if we can get the emergency housing and transportation part of that stimulus program, I'd feel that within 120 days we can start making a change. We're already doing it locally, but not to the magnitude and without the sufficient resources that we need.

CHETRY: I got you. And before I let you go, a lot of people were touched by Henrietta Hughes and her plea for Barack Obama.

HUMPHREY: Yes, yes.

CHETRY: Can you give us an update on her situation?

HUMPHREY: Well, frankly after that event, someone came forward and offered her a home. Three-bedroom, two-bath home that she could remain in there until we -- she was able to be stabilized and find another home and assist with her mortgage. So, yes, our community has responded. I even received a phone call from a lady in Ocala wanting to offer her $50 a month.

So, what we are seeing is this should be a nonpartisan issue. This should be one from all of us to say that even if we have an issue over 1 percent of the funding, let's please get together and acknowledge that we must do something now to get this country back on track, because we really are facing an economic crisis.

CHETRY: Well, it's good to know that the kindness of strangers was extended to someone in your community. As you said, you guys are all pulling together yourselves as well and hoping that the federal government's going to give you guys a hand as well. Mayor Jim Humphrey, Mayor of Fort Myers, thanks for joining us this morning.

HUMPHREY: Thanks so much for inviting me.

CHETRY: It's 20 minutes after the hour.

ROBERTS: When you have way too many crammed-in criminals, should they just get out of jail free?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You get sick real easy. It's not very sanitary.

(END VIDEO CLIP)

ROBERTS: One state's scary solution -- just let the prisoners go. You're watching the Most News in the Morning.

(COMMERCIAL BREAK)

ROBERTS: A developing story right now. Faced with the projected $42 billion deficit, California Governor Arnold Schwarzenegger is warning state lawmakers that 20,000 state workers will be let go if a budget deal is not reached by the end of the week. The governor's press secretary said the layoffs would save the state $750 million for the year.

Well, nobody wants criminals roaming the streets, but serious prison overcrowding in California just triggered a tentative ruling in that state that could actually make that happen. Tens of thousands of prisoners could simply get out of jail free.

Our Ted Rowlands went inside a famous California prison for the story.

TED ROWLANDS, CNN CORRESPONDENT: John and Kiran, we're inside San Quentin Prison. As you could see, this is an old gymnasium which has been converted to house about 300 inmates here. A lot of states have problems with overcrowding, but a federal ruling has decided that California's problems are so bad, they may have to release thousands of inmates. (BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This is my bed right here.

ROWLANDS (voice-over): Ivan Watson is one of about 300 inmates living in the gym at San Quentin Prison instead of a cell.

IVAN WATSON, INMATE: No human being is supposed to be living in a gymnasium. They have a lot of, like, diseases going around, the staph infections, and you get sick real easy. It's not very sanitary.

ROWLANDS: Right now, there are about 155,000 inmates in California's 33 prisons, nearly double the amount they were meant to hold. The tentative three-judge federal court ruling says the system is so bloated, the level of health care is unacceptable. The panel says the only way to fix the problem is to release between 37,000 and 57,000 prisoners.

MICHAEL BIEN, ATTORNEY: It's a significant moment of hope for California prisoners who have been deprived of their basic constitutional rights for adequate medical and mental health care for too many years.

ROWLANDS (on camera): Following the ruling, the state of California came out swinging, saying they'll take this case all the way to the Supreme Court before they release anybody.

UNIDENTIFIED MALE: The case isn't about overcrowding. The case is about providing constitutional care to our inmates at any level of overcrowding. If we can provide constitutional care, then the state of California has a right to keep these inmates in prison, and it's our position we're providing that level of care now.

ROWLANDS (voice-over): San Quentin inmate Mark Mallard disagrees.

MARK MALLARD, INMATE: I've never had staph in my life, and all of a sudden I come here and I get staph right here.

(END VIDEOTAPE)

ROWLANDS: Most of these inmates will be long gone before this program, if it withstands legal challenges, is implemented. It's expected to take years before anybody is actually released -- John, Kiran.

CHETRY: Ted Rowlands for us, thanks.

Well, some people joining the Obama administration took a big pay cut to take the job, but some got some fat parting checks from their previous jobs. Is it a double standard, complaining about golden parachutes? We'll tell you how much they made.

Also, three Republican senators signed on with the Democrats to pass the president's stimulus bill. Now, they're being targeted by a furious GOP. One of the three, Senator Arlen Specter, is going to be joining us live. It's 25 minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Well, some people joining the Obama administration are taking a serious pay cut to work for the government, but they're getting some nice parting gifts on the way out. So is that any different from the golden parachutes that this administration has railed against -- CEOs of failing companies? Is it a different standard? Carol Costello is live for us in Washington with more on this.

Hey, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Well, listen to this, Kiran. You know, Barack Obama has made a real point of shaming those Wall Street titans who've taken huge bonuses and golden parachutes. Listen to what he said just last week.

(BEGIN VIDEO CLIP)

OBAMA: We're putting a stop to these kinds of massive severance packages we've all read about with disgust. We're taking the air out of golden parachutes.

(END VIDEO CLIP)

COSTELLO: But it appears that some members of his own administration are leaving their old jobs with plenty of gold themselves. Take new SEC Chairman Mary Schapiro, who walks away from her $2.8 million salary with the Financial Industry Regulatory Authority with a $7.2 million severance package. Her new salary, by the way, under $163,000.

Treasury Secretary Timothy Geithner walks away from the Federal Reserve Bank of New York with over $500,000 in severance and other benefits. His new salary -- under half of what he was making before.

And Attorney General Eric Holder leaves a $3 million a year job with the law firm of Covington & Burling with a $1.3 million severance package. Of course, that might make his new salary of under $200,000 a little more palatable.

But is it really fair to compare these golden parachutes to the hefty pay packages that companies that are receiving taxpayer dollars? Maybe not.

(BEGIN VIDEO CLIP)

PROF. RAJEEV DHAWAN, GEORGIA STATE UNIVERSITY: They're not getting a payment to leave the job. They are just getting their due that was due to them legally for giving up a job, which is different from booted out from the private sector and getting a payment on the way out.

(END VIDEO CLIP) COSTELLO: And, Kiran, these people are giving up an awful lot of money to work in the public sector, where their new salaries may only be a fraction of what they were making. Still, might be hard for the average American to sympathize with that because most Americans don't even make what their making working for the government.

CHETRY: Well, when you take all of it on balance, Tim Geithner, the new Treasury secretary, he's worked, what, for about 25 years as a public servant in one way, shape or form. That's not -- does not add up at the realm as, you know, several million that some are getting.

COSTELLO: No. And most of his money is from retirement benefits that he's earned over the years, and it's not like these people were booted from their jobs and then they got this enormous golden parachute for leaving. They left to go serve the public.

CHETRY: I got you. But a definite difference in pay, right, when you leave the private sector, no doubt about that one?

COSTELLO: No, not many people make that kind of money.

CHETRY: Carol, thanks.

JOHN ROBERTS, CNN ANCHOR: Of course, what got us all interested in all of this was the $18 billion that Wall Street executives awarded themselves just before the financial bailout had to happen. And now we're learning that Merrill Lynch awarded its top brass hundreds of millions in bonuses.

Christine Romans "Minding Your Business." Wow, hundreds of millions of dollars.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: We know more about this now. Remember we told you that Merrill Lynch lost $15 billion in the fourth quarter and then quickly pushed through its bonuses for staff and then was acquired by Bank of America and then Bank of America had to take $20 billion in government money just so it could absorb that company.

Now we know that of those bonuses, four executives at Merrill Lynch got $121 million between them; $121 million for four executives of a company that lost $15 billion. And then the company that acquired it had to go to the government and get more money from taxpayers to survive. Four people got $121 million at a company that was by all accounts failing miserably.

CHETRY: They split it or they each got it?

ROMANS: They split it. About 10 -- 14 people at Merrill Lynch got bonuses of $10 million or more in a quarter when the company lost $15 billion and then, of course, the new parent company had to take more money from the federal government. It's remarkable. You're going to hear about it. The New York attorney general has done its own investigation, wrote a letter to Chairman Barney Frank, laying all this out. We're going to hear about it today. CHETRY: They can investigate it all they want, right, but they can't do anything about it. They didn't put any guidelines in place to stop this.

ROBERTS: Yes, how do you claw back any of that money?

ROMANS: It's remarkable, the New York attorney general, Andrew Cuomo, is really going after this. And he says it's a surprising fit of corporate irresponsibility and all kinds of fantastic language in here, but we'll hear a lot more.

Merrill Lynch had been saying frankly that some of these were guaranteed bonus, they didn't have a choice. What is a guaranteed -- I would really like a guaranteed bonus in case our ratings are terrible and I still get paid, come on.

ROBERTS: There you go. I should point out -- I should clarify that some of the $18 billion in bonuses occurred after the financial bailout as well.

ROMANS: That's right.

ROBERTS: Because there's some speculation that they took public money to pay off these guys.

CHETRY: So they're going to go talk, talk, talk, about it today and they can't do anything about it, right?

ROMANS: They'll talk about it. Well, we'll see. I wonder if they can claw it back. I bet they'll try.

ROBERTS: Something else to be outraged about.

Christine, thanks so much.

ROBERTS: After nine hours of closed-door meetings late last night, law makers on Capitol Hill will keep negotiating the stimulus bill today. They're trying to reconcile the House and Senate versions. The bill only cleared the senate because of the support of three Republicans who now face a rather, shall we say, angry Republican Party?

One of those three is Senator Arlen Specter of Pennsylvania. He joins us now from Capitol Hill. Senator, it's good to see you this morning. You said that you lost a lot of political skin supporting this stimulus bill, so why did you support it?

SEN. ARLEN SPECTER (R), PENNSYLVANIA: I supported it because of the urgent necessity in the public interest. You have a very severe economy downturn of more than three million jobs lost, millions of people being foreclosed from their houses, and it seemed to me that we had to take action.

And the economists tell us that if we didn't act, we could be right on the edge of a depression like 1929. And I think in that context, you have to put your own political interests aside and do what's required for the country.

ROBERTS: On the subject of political interest, what do you say about Republican complaints that the White House and Democrats in Congress bought your vote by approving your amendment for $10 billion in funding for the National Institutes of Health?

SPECTER: Well, I say it's ridiculous. The National Institutes of Health stand on their own. That money will create some 70,000 jobs. And in an era when medical costs are going up what better ways there are to cut medical costs than prevention. You're looking here at a $780 billion bill.

To suggest that I would make a deal for $10 billion or any one item, is ridiculous. You ought to hear the clamor back home in Pennsylvania. I had a very tough primary fight last time I was out, and I don't make deals.

ROBERTS: Yes, I mean, there was rather contentious moment the other when conservative talk-show host Laura Ingraham accused you of being wined and dined by the White House.

Let me just play that moment and get you to respond to it.

(BEGIN AUDIO CLIP)

LAURA INGRAHAM, HOST, "THE LAURA INGRAHAM SHOW": Is it nice to be wined and dined at the White House, and you're treated pretty well when you're a Republican bucking other Republicans?

SPECTER: Now, let's get off it, Laura. I'm not drinking any wine at the White House and I don't dine at the White House. If the president wants to talk to me, I talk to him and I make my own independent judgment.

(END AUDIO CLIP)

ROBERTS: Senator Specter, you really took exception to her charge.

SPECTER: Well, it's preposterous. You're dealing here with a gigantic sum of money. You're dealing with the economy on the edge of the ledge, perhaps going to a depression like 1929. And to make a suggestion that I would be influenced by being wined and dined at the White House is just absurd.

Listen, in my position, I'm prepared to take whatever bricks and bats come, whatever criticism there is. But don't expect me to take an absurd statement like that lying down. And I responded to her very forcefully.

Listen, Laura Ingraham's a tough cross-examiner. I know one when I see one, but I didn't lose any skin in that interview. I've lost some skin otherwise, not with Laura Ingraham. At least not on Monday.

ROBERTS: Talking about bricks and bats, Senator, I think you're going to be facing more than a few in 2010. You're going to run for reelection. You had a tough primary in 2004. This one's going to be even tougher.

You got the powerful national Republican trust threatening to pour millions of dollars into a challenger, whatever it takes to defeat you.

SPECTER: Well, I understand the peril, but I didn't run for the United States senate to further my own political interests. I think when you have a decision like the one that we're facing now, there's only one way to respond, and that's to respond with action.

And if somebody else in the Republican party had stepped up to do the negotiations and handle it, I would have been glad to step aside. But when they call the ballot and you face the situation that there could be an economic catastrophe, the only responsible thing to do is to support the package.

And bear in mind, the Republican moderates' program got $110 billion cut. We've got the backing of the United States Chamber of Commerce, which is a very conservative, Republican organization. They know the economy better than perhaps anybody, because they're in touch with so many thousands of businesses. And they say the economy requires it. And that it's a good plan, not a perfect plan, but a good plan. And I'll take my chances.

ROBERTS: Well, certainly, Senator, nobody could ever accuse you of not being up for a fight. It's good to talk to you this morning. Thank you for joining us.

SPECTER: Always glad to do it. Thank you John.

ROBERTS: All right. Take care.

CHETRY: There are marijuana activists that are boycotting Kellogg's now because of Michael Phelps. They say there's a double standards and that Phelps got a raw deal.

It's 38 minutes after the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, HOST, NBC'S "LATE NIGHT WITH CONAN O'BRIEN": A new interview of swimmer Michael Phelps says that ever since he was caught smoking marijuana, he's had trouble sleeping. Yes, however, Phelps says he's had no trouble eating cookie dough and discussing the final season of "Thunder Cats."

(END VIDEO CLIP)

CHETRY: What a blast from the past; "Thunder Cats." I love Conan. Lion-O, he was one of them. That was Conan O'Brien making light of Michael Phelps's incident, but police officials are taking it seriously. They've reportedly made eight arrests in connection with the bong hit seen around the world. The Olympian was not one of the men arrested but the reported owner of the bong was. He reportedly was trying to sell this thing for $100,000 on eBay and now some marijuana activists are saying that Phelps is getting a raw deal.

Jason Carroll joins us now with more. They say that he's a victim of a double standard here.

JASON CARROLL, CNN CORRESPONDENT: Yes, absolutely; everyone trying to make a buck off this. Can you believe it, 100 grand? It's just unbelievable.

What we're hearing as of late we've seen two prominent sports figures linked to illegal substances but since then a chorus of people are asking where's the balance in all of this? How does the punishment fit the crime?

Take Michael Phelps, for example. Caught in the now-infamous photo smoking from a bong. According to WIS, a TV station in Columbia, South Carolina, eight people have now been arrested in connection with that photo from that party. And the local sheriff's department is still considering pursuing charges against Phelps.

Kellogg's decided not to renew its contract with Phelps, saying his image was no longer consistent with the cereal giant. Now, listen to some of the reaction coming in to all of this, one from a marijuana advocacy group, the other from "Saturday Night Live."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's sad that this incredibly accomplished young man feels like he's -- he's in a position of having to apologize and act like he did something terrible for relaxing with something that's safer than beer.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Really, Kellogg's? Marijuana's not consistent with your image? Because I thought it was totally consistent. You know every one of your mascots is a wild-eyed cartoon character with uncontrollable munchies. Toucan Sam, a frog named Dig'em, Snap, Crackle and Pop? I knew some guys named snap, crackle and pop, and they were drug dealers.

(END VIDEO CLIP)

CARROLL: Humor aside, marijuana advocates are urging a boycott of Kellogg's. Some pointing to how Alex Rodriguez has been treated after the Yankees star admitted to using illegal steroids for three years. Rodriguez has not been punished by the Yankees, while Phelps was suspended by USA Swimming for three months.

Still no word on whether Rodriguez's endorsement deals are now in jeopardy. Both athletes apologized for what they did, but, again, to some the punishments here just don't seem to fit the crime.

ROBERTS: Just for interest's sake, I just Googled "smoking pot" and hit "images" and came up with 911,000 images. there's even an image of a chipmunk smoking pot and you would think --

CARROLL: They should prosecute a chipmunk?

ROBERTS: If they're going to prosecute all these guys based on a photograph, what about all of the --

CARROLL: I don't know if any animals were harmed in this.

CHETRY: I hope not. Poor thing. Thought he was getting an acorn --

CARROLL: A loaded acorn, yeah.

CHETRY: That is so mean. What are they going to do next?

ROBERTS: If there's all these photographs out there, why are they prosecuting the people who are associated with this particular photograph?

CARROLL: Because it's prominent, because it's Michael Phelps, exactly. And on the flip side, why are we not seeing more done about Alex Rodriguez, you know, taking these illegal steroids? You know, he still has his contracts; still has his endorsement deals. Yankees came out, no punishment there.

CHETRY: In 2003, were they banned?

ROBERTS: They weren't banned from Major League Baseball but they are a Schedule One controlled drug.

CARROLL: Correct.

ROBERTS: And they are illegal to use.

CARROLL: Correct.

ROBERTS: Or possess or whatever.

CARROLL: Yes.

ROBERTS: And there also the delineation between, is it illegal to possess pot or is it illegal to be seen smoking? Is it illegal to use anabolic steroids or possess them? Use and possession gets into a real gray area in the law.

CHETRY: One thing we do know is, you should not give marijuana to chipmunks under any circumstances.

CARROLL: Just give him the acorn.

ROBERTS: All right. Obviously sparking a lot of debate this morning. Lost your job? Don't cry in your beer. Pour one instead. The bad economy starting a bartending boom.

And could you be born to be rich or born to lose it all? Our Dr. Sanjay Gupta shows us how to predict who might make risky financial choices and who won't. It could be in your genes.

It's 45 1/2 minutes after the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JON STEWART, HOST, "THE DAILY SHOW": It was time for Barack Obama to work his sales magic.

OBAMA: The plan's not perfect. No plan is. We can't depend on government alone to create jobs or economic growth. Tax cuts alone can't solve all of our economic problems. Doing little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss of confidence.

STEWART: You had me at we're (EXPLETIVE DELETED).

(END VIDEO CLIP)

ROBERTS: Jon Stewart there making fun of President Obama's sobering comments about the economy. But while all of the bad financial news may cause some to drink, it's driving others to look behind the bar. In fact, bartender schools on both coasts are seeing a boom.

Here's CNN's Lola Ogunnaike with that.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The worse the economy gets, the more people drink.

ALEX BANCALARI, DIRECTOR, NATIONAL BARTENDER'S SCHOOL: You're actually going to make more as a bartender probably than a financial adviser.

UNIDENTIFIED MALE: I got 250 resumes in one day.

UNIDENTIFIED MALE: This was about the worst I've seen out there and about the best I've seen in here.

UNIDENTIFIED MALE: I go to my speed rack (ph) and pick up what? Whiskey.

OGUNNAIKE: So across the country, enrollment at bartenders' schools is up?

JOSEPH BRUNO, DIRECTOR, AMERICAN BARTENDERS SCHOOL: Yes.

OGUNNAIKE: Here, business is booming, too.

BRUNO: Yes. Things have picked up enormously. We're up a third in enrollment. We're very happy to be accommodating to people that need to go to work.

OGUNNAIKE: How much can a bartender make an hour?

BRUNO: There are club bartenders that make upwards of $500 a shift.

OGUNNAIKE: Five hundred dollars a shift?

BRUNO: Yes.

OGUNNAIKE: I'm in the wrong line of business.

Now, I don't mean to pry, but I am a journalist.

UNIDENTIFIED MALE: OK.

OGUNNAIKE: And can you give me a ballpark figure about how much you make a week or how much you make a year?

UNIDENTIFIED MALE: On a good week, I make about 16 to 17 a week.

OGUNNAIKE: So you got to show me how to make some drinks.

Shake it like a Polaroid picture. Back up.

Be honest, tell me what you think.

UNIDENTIFIED FEMALE: Delicious. Asian influences and a little Lola love in there. I can see that, I can taste that. I like it. Yes.

OGUNNAIKE: If times ever got really tough, would you ever consider being a bartender?

UNIDENTIFIED FEMALE: Absolutely.

OGUNNAIKE: So, is there a recession cocktail?

BRUNO: A recession cocktail, yes. Tap water.

(END VIDEOTAPE)

ROBERTS: So you really are, like, it's almost a recession-proof industry, isn't it?

OGUNNAIKE: It really is. And some of these bartenders are doing so well, so they don't call themselves bartenders anymore, they call themselves mixologists or cocktail architects.

CHETRY: That's right. They went to school to learn how to do 175 drinks?

OGUNNAIKE: Yes, in less than two weeks you can learn how to make 170 drinks; 12 drinks in seven minutes, they say.

ROBERTS: I'm a very simple guy. I don't need nor require a mixologist.

CHETRY: He's as simple as a chipmunk when it comes to what he likes to drink. In fact, we were joking around about the chipmunk with the pipe. We seem to have found, thanks to the lovely Internet, a chipmunk -- it appears to be a Canadian one. He's drinking a Molson.

What's going on with these chipmunks?

OGUNNAIKE: What's up with the chipmunk? They like to party, don't they?

CHETRY: I guess so.

ROBERTS: Lola, thanks so much.

OGUNNAIKE: Thank you.

CHETRY: And still ahead, could taking financial risks actually just be part of your genetic makeup? Dr. Sanjay Gupta looks at how your genes could be a warning for financial disaster.

It's 52 minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to AMERICAN MORNING.

Are we born to make bad financial decisions or even good ones? A new study says that some people are actually hardwired to be riskier when it comes to financial investments. In other words, it's in the genes. We're paging Dr. Gupta for some answers. Sanjay is in Atlanta.

It's an interesting theory. You often think that it's how your parents sort of teach you how to manage money and what type of ethic you grew up with, but part of it could be how you're wired.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes. You can be born to be wild so to speak, Kiran. And throughout history, throughout our evolution as human beings obviously there are certain genes that allow us to take risks which is why we evolve into the way that we evolve now.

But something more to the point is something known as a dopamine transporter gene. You don't need to remember the name, but basically people who have a variant in this type of gene researchers are now finding 25 percent more likely to be risk takers when it comes to finances.

What happens is that your body seems to release a little bit of dopamine which is a feel-good hormone, in response to some of these riskier investments. And that's sort of the crux of all this, it feels good a little bit when you take these risks.

There was something else that we looked at, something known as prediction addiction. You sort of have these predictions of how a stock is going to do or how a certain fund is going to do. And when it changes even slightly, let's say you've had several quarters of solid return, and it changes slightly, all of a sudden the stock market rebounds wildly because people are sort of addicted to making the predictions of how the stocks are going to do. And that may be hardwired into our brains as well.

Some of this just might be what we're born with and some of it obviously influenced by the culture and what's happening in a given time as well.

CHETRY: It's very interesting. And you can remember, boy, before we were in the middle of this mess, a lot of people were saying, you take out these interest-only loans, you know, you got to invest in this stock and this stock, it's sort of the pack mentality. But is this sort of an excuse for bad behavior or are they really able to find this genetic link?

GUPTA: I'm not sure that it's an excuse for bad behavior or even people who do the high -- engage in these high-risk investments would say it's bad behavior necessarily, but there does appear to be something that's maybe a little bit more hardwired as you say into us whether it is in our genes, whether it is in the prediction addiction, getting the scans of our brains to find those patterns, for example. It could be hormones as well, Kiran, which is interesting.

A couple years ago a study came out of Harvard saying women and older men, both who have lower testosterone, were less likely to make riskier investments. And it could be hormonal. It could be just a pattern. There are a lot of cultural influences as well. And, you know, people take all sorts of different risks.

In fact, your co-anchor over there, John, we've got some video of him riding a motorcycle; J.R. on a hog, for example. He was talking, by the way, the entire time which I find interesting. The guy never stops talking. But JR on a hog is a riskier thing as well.

ROBERTS: Only riding with one hand, too, what do you say about that?

GUPTA: You got your helmet on, so I'm proud of you for that, John.

CHETRY: I love it.

ROBERTS: I never go anywhere without my helmet, Sanjay.

CHETRY: Sanjay, that's so funny. John, by the way, that looks good. The only thing scary isn't that you are talking but that you're looking at the camera and not the road. There you go.

GUPTA: Did he just say he doesn't go anywhere without his helmet? CHETRY: Yes. He has one under the desk right now.

ROBERTS: I certainly don't go anywhere near you without it, Sanjay. With all the bricks and bats you're throwing at me I feel like Arlen Specter today.

All right, good deal, doc.

GUPTA: All right, guys.

ROBERTS: There is a new top dog in town. Who won at the Westminster dog show? We'll tell you.

It's 58 minutes after the hour.

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