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North Korea Missile on a Launch Pad; North Dakota Flood Disaster; Obama's Virtual Town Hall; Drug War Jumps Border; Counting Down Obama's First 100 Days

Aired March 26, 2009 - 08:00   ET


JOHN ROBERTS, CNN ANCHOR: Crossing the top of the hour now. And here is what is on the agenda this morning.

Stories that we'll be breaking down for you in the next 15 minutes. And breaking news involving North Korea to tell you about today. The U.S. military says new satellite images show that the country has placed a powerful long-range missile on its launch pad. And this morning North Korea reportedly making threats if its launch is criticized. Breaking details on that coming up in just a moment.

A dire station unfolding as we speak. Rising rivers in North Dakota threatening cities like never before. Right now, there's a Herculean effort to bag nearly two million sandbags to try to save Fargo from the Red River, which is expected to crest at 41 feet this weekend. We're live in North Dakota with a complete report.

And damaging weather right now rolling through Mississippi. Authorities say at least two tornadoes touched down in the southern part of the state, around the town of McGee, damaging a number of homes. That's about 40 miles southeast of Jackson. There's a tornado watch in effect for the next couple of hours.

And here is your chance to ask President Obama a question. In about three and a half hours, the president is going online and holding a virtual town hall meeting. So far, more than 80,000 people have submitted questions. We've got live details on that coming up as well.

But first, returning to our breaking news and growing tensions with North Korea. The U.S. military says North Korea has moved a new long-range missile to a launch pad and may be getting ready to test fire it. And this morning, Pyongyang threatening, quote, "strong steps" if the United Nations criticizes the launch of what it says is a satellite, not a missile.

In an interview with our Jill Dougherty, Secretary of State Hillary Clinton said a launch would have consequences.


HILLARY CLINTON, U.S. SECRETARY OF STATE: We are doing our best to dissuade the North Koreans from going forward, because it is a provocative action. It raises questions about their compliance with the security council resolution 1718, and if they persist and go forward, we will take it up in appropriate channels. (END VIDEO CLIP)

ROBERTS: And this morning, we are tapping into the global resources of CNN to get reaction from North Korea's neighbor, South Korea. Here's our Sohn Jie-Ae in Seoul.

SOHN JIE-AE, CNN SEOUL BUREAU CHIEF AND CORRESPONDENT: John and Kiran, North Korea seemingly taking the first step towards launching what it calls a communication satellite, but with the outside world believes is a long-range missile by mounting a rocket on to a launch pad.

Analysts say that once North Korea starts fueling the rocket, in three to four days, it will be ready to go. Both the United States and South Korea denounced the move saying that if North Korea launches the rocket, the issue will be brought before the U.N. Security Council. But North Korea said that if the U.N. poses sanctions, it will pull out of the six-party talks, talks that aimed to get North Korea to give up its nuclear weapons program. North Korea insists that its rocket launch is simply attempt to develop a peaceful space program - John, Kiran.

KIRAN CHETRY, CNN ANCHOR: All right. Well, breaking news now out of North Dakota, where folks in the flood zone are literally in a race against time, trying to save their towns and cities from rising rivers. In Fargo, thousands are sandbagging around the clock, really not a minute to spare.

The Red River is expected to crest this weekend at 41 feet above flood stage. Other swollen rivers also in the state showing their muscle bursting levees and swallowing homes. We've gotten some iReports from people who are bracing for the worst.


UNIDENTIFIED FEMALE: This is kind of what we're looking at. We have our sandbag dike that stretches basically from this neighbor's fence. It goes all through here. And you can see it kind of curves back there behind the trees. And people just bring in bag after bag after bag after bag.


CHETRY: And those bags are heavy. CNN's Susan Roesgen is live in Fargo, North Dakota, where they are trying to reach their goal of filling two millions sandbags to save the town.

You've been there all morning as people are working tirelessly. Are they taking breaks at all? Because that is hard labor.

SUSAN ROESGEN, CNN CORRESPONDENT: Yes, it is hard labor and these are heavy. They say the average is about 35 pounds each. And even just talking to just a few feet like that, it wears on you after awhile. What I've seen is that people will start maybe here, and they'll start filling the sandbags and do the shoveling, and when that gets too hard, they go to tying the sandbags. Then when (INAUDIBLE) a little bit, then they start throwing them again. I haven't seen many people taking a break at all, and you don't see many people talking. They are too tired to. It's really heavy, hard work.

We've got people here from all over the state, and people here in the Fargo Dome who normally come for the football games, and North Dakota State University or they come for the rodeo. They thought they were going to have this weekend. And they have never quit until a reporter comes and interrupts them.

Here's Mary Niehaus. Mary, you're from Fargo?


ROESGEN: And you're here because you can't do anything more to help your own home, right?

NIEHAUS: Right. We have there a sandbag around our neighborhood, but we're here to help the community and protect the community.

ROESGEN: So you've done everything you can where you are, and you still decided to come out here?


ROESGEN: What do you think of Fargo now?

NIEHAUS: I think it's a great place to be. It's awesome to see the community of Fargo (INAUDIBLE).

ROESGEN: OK. All right, thanks, Mary.

I know that they were having trouble hearing you. Basically, this is a community that's pulling together. If they get through this thing, Kiran, then they can say they made history. Not only because of the river is at a historic level, but because they chipped in, they filled 500,000 sandbags -- that's the goal 500, 000 sandbags, between this morning and Saturday. That's d-day. If they can do it, they can stop a disaster that would be worse than the Grand Forks flooding of 1997 -Kiran.

CHETRY: And, hopefully, all of their efforts will pay off. We've been following this story and we will continue to. Susan Roesgen for us in Fargo this morning. Thanks so much.

ROBERTS: During the election campaign, President Obama promised a high-tech and plugged-in White House. And today, we get a real first. The president is going to online to answer your questions with a virtual town hall meeting. Our Jim Acosta tracking the story from Washington this morning.

And Jim, they really unleashed the public sentiment here. They've just been overwhelmed with questions.

JIM ACOSTA, CNN CORRESPONDENT: They really have, John. And they are not going to have time to answer all these questions. I'll tell you that much.

But Mr. Obama has already promoted this event on his Twitter page, as he has one of those. And so far, the White House Web site has been flooded with tens of thousands of questions from Americans who are eager to chat with the president. It's a whole new way for the president to get plugged in.


ACOSTA (voice-over): Mr. President, you've got mail. Actually, thousands of questions screaming into the White House Web site for a virtual town hall meeting featuring the commander-in-chief.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is an experiment. But it's also an exciting opportunity for me to look at a computer and get a snapshot of what Americans across the country care about.

MACON PHILLIPS, WHITE HOUSE DIRECTOR OF NEW MEDIA: The exercise is to open up the White House, and see what happens.

ACOSTA: The administration's director of new media, Macon Phillips, says the president will answer the questions rated most popular by visitors to

UNIDENTIFIED MALE: I will give President Obama high marks for tonight's speech.

ACOSTA: Some questions will be on video, much like those iReports on CNN.

As you know, some people are going to ask, well, they're going to sort out the really tough ones they're going to sort out. They don't want any of those to get in there. Is that going to happen?

PHILLIPS: No. I think that the president is at his best for answering tough question.

ACOSTA: Take this one from Jerry in Texas. "Why can't the government break up large companies like AIG into smaller companies like the phone company was back in the '80s?"

Or Misty Lee from Rhode Island, "Why do I have to be to the point of foreclosure to get any help with my mortgage?"

OBAMA: Is Lourdes here from Univision?

ACOSTA: It's another example of the president going over the heads of the traditional media, as he did at this week's news conference when he bypassed the major newspapers in favor of niche media outlets like "Ebony" magazine and "Stars and Stripes."

HOWARD KURTZ, CNN'S RELIABLE SOURCES: There are some bruised egos there. President Obama declined to call on "The New York Times," "The Washington Post," "The Wall Street Journal," "The L.A. Times, a lot of people expected Obama to conduct a YouTube presidency. And he would be crazy not to take advantage of the big following that he has online.

UNIDENTIFIED MALE: Our next caller is Peter (INAUDIBLE).

ACOSTA: The concept isn't totally new. Back in the '70s, "Saturday Night Live" envisioned President Carter taking calls on talk radio.

UNIDENTIFIED MALE: OK. You did some orange sunshine, Peter.



UNIDENTIFIED MALE: Stay inside and listen to some music, OK? Do you have any Allman Brothers?


ACOSTA: A little Allman Brothers goes a long way.

Now members of the Bush administration took questions online, but President Bush never joined in on the discussion. As for Mr. Obama's Webinar, a small live audience inside the White House that, yes, will include the traditional news media will be standing by to witness what will be a bit of making in the history.

FDR's fire side chat has gone viral, John. And we joke about orange sunshine, but one of the more popular questions on the Web site right now legalizing marijuana. We'll have to see how the president handles that one.

ROBERTS: The marijuana lobby seems to have hijacked the Web site today. You can go...

ACOSTA: Just a little.

ROBERTS: ...five different categories and five questions about marijuana. Jim, thanks so much for that. Appreciate it.

ACOSTA: You bet.


CHETRY: Well, President Barack Obama compared to Alexander the Great. The Greek Orthodox churches leaders made the correlation at a White House reception marking Greek Independence Day yesterday.

Listen to this.


ARCHBISHOP DEMETRIOS, U.S. GREEK ORTHODOX CHURCH: Following the brilliant example of Alexander the Great, you will be able to...


ARCHBISHOP DEMETRIOS: ...that you will able to cut the guardian knot of this unresolved issues.

OBAMA: What a great honor. I will tell Michelle that I've been compared to Alexander the Great.


I will see whether that gets me a little more respect at home. She knows she's still the boss. Thank you.


ROBERTS: He doesn't look a thing like Collin Farrell to me, does it?

CHETRY: How about it? Honey, do the dishes. I can't. I'm like Alexander the Great.

Well, sure is saving is good for your wallet, of course. But experts say that spending may actually be better for your soul. Could shopping keep you sane during the recession?

And also still ahead, Americans addicted to drugs. Secretary of State Hillary Clinton says the U.S. shares the blame for the gang violence in Mexico. We're talking to one mayor in a border town who is being hit very hard by the problem.

It's 10 minutes after the hour.


ROBERTS: Twelve minutes after the hour now.

Let's fast forward to stories that will be making news later on today. At 1:00 p.m. Eastern, an AIG human resources executive will answer questions from Connecticut lawmakers about the $165 million in company bonuses.

Sentencing day for Houston Astro star Miguel Tejada. He pleaded guilty in a deal with federal prosecutors admitting that he lied to congressional investigators in 2005 when questioned about steroid use of Major League Baseball. Prosecutors have recommended how to get probation and avoid prison time.

And this afternoon, Vice President Joe Biden heads to Chile and Costa Rica. He'll be consulting with Latin America leaders. And the Summit of the Americans scheduled for mid-April in Trinidad and Tobago.

Now there is a summit that I would love to go on.

CHETRY: Exactly. The beaches of Tobago, right?


ROBERTS: I went to a -- I went to a Summit of the Americans just south of Buenos Areas a few years back and it was cold. (CROSSTALK)

You're in Argentina and it's cold. Trinidad and Tobago, you're pretty guaranteed of good weather.

CHETRY: Well, we have a story developing right now. Secretary of State Hillary Clinton is in Mexico, and the violence there threatening to rip the country apart. Sixty-five hundred people slaughtered last year as rivaled drug cartels battled each other and authorities. 800 killed so far this year. Many beheaded to send a message.

The misery is heading north along with the drugs. Phoenix is now America's kidnapping capital.

Joining me right now is Mayor Phil Gordon, who testified on border violence this week on Capitol Hill.

Thanks so much for being with us this morning, Mayor Gordon.


CHETRY: So CNN has been covering this story for a while. We're actually reporting from these border towns and on into Mexico. Explain for people watching today how the Mexican drug war has affected your city of Phoenix.

GORDON: Well, actually, it's affected almost every city in the U.S. The drug war is now the same as the human smuggling war. It's the same bad individuals, the same cartels that are smuggling drugs and people across the border.

Actually, the individuals are more lucrative and less punishment. And what's happened is in Phoenix, in particular, a transportation center where people are brought and drugs are bought, and then sent throughout the U.S., it's becoming a daily occurrence where people are being held for ransom and being tortured and sometimes being murdered.

Primarily innocent immigrants that have been smuggled in or bad guys against bad guys, but all too often now, there had been too many home invasions where the bad guys got the wrong address to go against another bad guy, or sometimes cross-fire where individuals can be killed or hurt.

So I went to the Congress and I said it's got to stop now. We've got to have more boots on the ground and in the cities. We need more technology. This is a real war, where our individuals, whether they are police officers, federal agents, or innocent residents are going to get hurt.

CHETRY: Yes. I mean, you talk about on most nights having more than 60 police officers and federal agents rushing around to try to rescue people that have been caught up in this. The quality of life seems to have really taken a hit. I know that you guys actually did have a crime rate drop. So how did that happen? That you had the crime rate drop. You're dealing with a more concentrated group of crimes that are taking place.

GORDON: Well, let me emphasize, the crime rate in Phoenix for the last year, year and a half, has gone down significantly in every category. Homicide is down 24 percent. Probably, the only fast major growing city with crime rates down, despite our proximity to the border and the economy.

That's because the federal law enforcement agents and Phoenix police have been integrated, going after the heads of the snakes, the syndications, the organizations and not wasting resources on, you know, nickel bag buyers or day laborers. You know, it's had a dramatic effect. But as I testified, we can't, as cities, in particular, Phoenix, continue to fund these resources. Our officers are getting burned out.

CHETRY: Right.

GORDON: They have the expertise, they're undercover, and Congress has got to do it.

CHETRY: Yes, you need to help. So the Obama administration has put out a border initiative. They want to double the number of task force teams at the border. They want to move federal agents equipment, resources to the border, and they also want to try to foster some better intelligence sharing with Mexico to crack down on the flow of guns and money that's going into Mexico. So what's your assessment on how big of a dent that initiative from the White House will have on this problem?

GORDON: Well, as I said yesterday, it was a first great step. A great step that have the intelligence and the new agents. But it was a first step only. We have to add a lot more agents, both at the border and at the city of Phoenix. Phoenix alone could use at least a hundred more ATF and DEA, and Phoenix officers focused on these violent kidnapping, torturing and drug smuggling and then guns and money back.

The second thing is, I'll tell you, President Calderon has staked his life and his career, literally his life. And it is a war. And we need to give him all the resources we can. And to me, that's the National Guard on the border like Arizona did under Governor Napolitano, and if need be, military intelligence and logistics support, because this is a war and it's got to stop.

CHETRY: Well, certainly. They are paying attention to that. And the president, himself, is going to go visit next month to take a look for himself. Mayor Phil Gordon of Arizona -- Phoenix, Arizona, good luck with everything. Thanks so much.

GORDON: Thank you.

ROBERTS: Well, we are following record flooding expected in the northern plains of North Dakota around Fargo. They are trying to save the town from the Red River, which may crested 41 feet in the next couple of days. We'll have live reports on that story for you coming up. And your money, your sanity. Saving may be good for your budget, but see what some doctors say being frugal does to your mental state. Is happiness really found at the mall? We'll find out. 18 minutes after the hour.


ROBERTS: Welcome back to the Most News in the Morning.

More and more Americans are saving their money instead of spending it. But what's this new frugality doing to our mental state? It's good for the budget, but is it good for the mind? Alina Cho joins us now with a look at -- if ever there were a story tailor-made for you.

ALINA CHO, CNN CORRESPONDENT: What do you mean? I have no idea what you're talking about.

I suffer from buyer's remorse very often, John, as you well know. You know, we've both heard about buyer's remorse. It's happened to all of us. But there is something new emerging in this new tough economy. It's called saver's remorse. It does exist. And take not, because it can be harmful to you health.


CHO (voice-over): The message is everywhere.

UNIDENTIFIED MALE: The bank suddenly seems like a brilliant idea.

CHO: Save, save, save. In these though times, that's the mantra. It's always been a good idea, but can we take frugality too far?

JUDY KURIANSKY, CLINICAL PSYCHOLOGIST: It is a very negative state of mind, physically and emotionally, for you to constantly be saying no to yourself.

CHO: Call it saver's remorse. More money in the bank, but are you any happier? Columbia Professor Ran Kivetz who co-author the study on this very subject says not indulging enough can hurt you emotionally.

PROF. RAN KIVETZ, COLUMBIA UNIVERSITY BUSINESS SCHOOL: This notion that we're missing out on life and missing out on presents, that we're missing some balance. That type of emotion or feeling actually persists over time and sometimes even builds up.

CHO: Personal savings jumped from 0.8 percent in August to five percent in January. And in some cases, we're saving when we don't have to. So focused on the future, we're not enjoying the here and now.

KURIANSKY: When you're restricting what you purchase and what you give yourself, you're living in a brain state of scarcity, and that makes people depressed.

CHO: So what's the answer? Continue to save, but don't forget to treat yourself. Even in a recession.

KURIANSKY: In this tough economy, people feel out of control. In a deeper level, buying and indulging in certain small pleasures gives you a sense of control.

CHO: And some people say life is too short to have saver's remorse.

UNIDENTIFIED MALE: Our future isn't that long

UNIDENTIFIED FEMALE: We're too old to do that!


CHO: Well, that's one way of looking at it. Now the bottom line, everything in moderation. Spend a little, save a little. Psychologists say balance your checkbook, but also balance your emotional checkbook. That, John, will keep you healthy.

And what's interesting is they say with buyer's remorse you have that immediate feeling of guilt, but they say over time, that guilt dissipates with saver's remorse. Psychologists say the guilt actually builds up over time, because you feel worse and worse about missing out on life's pleasures like vacation, maybe buying a car or TV, an iPod, something like that. Well, anyway.

ROBERTS: Let's save the money. What's the worst buyer's remorse you've ever heard?

CHO: I would have to say it's probably over shoes. That's the most common one for me, yes.

ROBERTS: I bought a garden tractor, and I always wanted a garden tractor.


CHO: I can't say I have any desire of that.

ROBERTS: And I woke up in the middle of night in a cold sweat at 2:00 a.m. for weeks, because...


CHO: Well, you can't take it back.

ROBERTS: Try to sell it on Craigslist.

CHO: I can take back the shoes. You can't take back a tractor.

ROBERTS: That's true - Kiran.

CHETRY: Mine is a leopard-print dress that I have yet to find an occasion to wear. I try to say, hey, how about the holiday party? And everyone said no.


CHO: I'll take it.

ROBERTS: I'll bring the garden tractor over and shred it for you.

CHETRY: That's not what I had in mind.

CHETRY: All right. Thanks, guys.

Well, President Obama asking for massive deficit spending to pay for his programs. We'll talk to one Democrat who is pushing back. 24 minutes after the hour.


CHETRY: Welcome back to the Most News in the Morning.

Sixty-six days and counting, and time is ticking down quickly on President Obama's 100-day honeymoon. Even with his poll numbers still high, there is a growing murmur of criticism.

Carol Costello is tracking the story from Washington this morning.

What did he say? He wanted to get out from the house of mirrors, right?

CAROL COSTELLO, CNN CORRESPONDENT: Well, the good thing for the president, Kiran, is that his approval ratings are still high. But many Americans are wary of his plans to fix the economy, and that could create problems for the president down the road.


OBAMA: Hello, everybody. Please have a seat.

COSTELLO (voice-over): President Obama's honeymoon period, 65 days into his term the "H" clock is ticking a tad louder now. Some AMERICAN MORNING viewers left voice mails, showing signs of impatience.

QUESTION: As I watched the presidential address, I want to know when and where can we the people expect some changes.

QUESTION: He is putting fiction on the plate and not really solving the problems.

COSTELLO: Still, the president's approval ratings are high. Sixty-three percent and the majority of AMERICAN MORNING's callers reflected that.

QUESTION: President Obama is doing a very good job. We need to give this man a chance. COSTELLO: But analysts do notice an undercurrent, an uneasiness with Mr. Obama's policies to get the economy rolling.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: People wonder how long is this going to take to work. They are patient, but they wonder when are we going to begin to see at least some indication that things are going to move up.

COSTELLO: The president's critics are aware of that. CNN analyst Alex Castellanos says Mr. Obama's impatience at a news conference over a question about AIG...

OBAMA: Because I like to know what I'm talking about before I speak.

COSTELLO: a sign Mr. Obama himself is on the defensive. And there are signs even Senate Democrats are beginning to wonder. Twelve of them who call themselves moderates sent a letter to the Senate Budget Committee chairman expressing concerns about Mr. Obama's $3.6 trillion budget.

DREW WESTEN, PROFESSOR, EMORY UNIVERSITY: I think he's not giving them any cover. I think by giving such a nonpartisan message, he's not giving them any reason. He's not giving them a way to go back home and say, look at what these other guys did. We're just cleaning up the mess.

COSTELLO: Westen, an Obama supporter, thinks the president has allowed Republicans to control the message. He says Obama needs to take a page from FDR's playbook and go on the attack.

UNIDENTIFIED MALE: FDR was not a preacher of bipartisanship.

FRANKLIN DELANO ROOSEVELT, 32ND PRESIDENT OF THE UNITED STATES: These Republican leaders have not been content with attacks on me. They now include my little dog, Fala.

WESTEN: He basically said, I welcome your attacks because you guys are the guys that messed this thing up. Bring it on.


COSTELLO: I don't know if President Obama will do that, though. You know, he's often said he inherited this economic mess from the Republicans. But if he comes on much stronger than that, that campaign message he had of reaching across the aisle will start to seem quite hollow.

On the subject of popularity, though, Kiran, you know, you can be as popular as you want, but if your policies don't work, people are going to turn on you.

CHETRY: All right. Carol Costello for us this morning, thanks so much.


ROBERTS: It's now crossing the half hour, 8:30 Eastern. And here's what's on our agenda right now. Stories that we'll be breaking down for you in the next 15 minutes on the Most News in the Morning.

Our CNN Money Team standing by at any moment. The Commerce Department will release figures on fourth quarter GDP, and the Labor Department will release its weekly job claims. We'll bring them to you and tell you what they signal about the economy just as soon as we get them in.

We're also learning about a blow to the tech sector this morning. Computer giant IBM planning a new round of layoffs. The report first surfacing in "The Wall Street Journal" says about 5,000 U.S. workers will be cut with many of those jobs outsourced to India.

Right now, U.S. and Pakistani intelligence officials are reportedly drafting a new list of terror targets for U.S. drones along the Pakistan-Afghanistan border. "The Wall Street Journal" reports it is part of a new U.S. strategy for the region that includes targeting extremists who have carried out attacks against Pakistanis.

President Obama tried to drum up support for his $3.6 trillion budget. In just a few hours he'll hold a virtual town hall to take your questions. He is also meeting with members of his own party to try to convince them it's a great idea. Here is what he told a democratic party fund-raiser last night.


OBAMA: It's not just a budget, it's a blueprint for our economic future. It finally tackles those things that we have been putting off for far too long.


ROBERTS: Senator Kent Conrad is the chairman of the Senate budget committee. He has met with President Obama to discuss the budget. Senator Conrad joins me now from Washington.

Senator, good to see you. Thanks for coming in this morning, particularly with the troubles there in North Dakota and all the flooding.

You met with the president yesterday on this budget. He wants to spend $3.6 trillion taxpayer dollars. Did he sell you?

SEN. KENT CONRAD (D), NORTH DAKOTA: Look, the president is exactly right in terms of his priorities for the country. Reducing our dependence on foreign energy, focus on excellence in education, and health care reform. Those are the key priorities for the country as well as dramatically reducing the deficit.

But, look, we've had a new forecast come out that said we've lost $2.3 trillion of revenue in the next 10 years. So obviously we've got to make adjustments to his budget.

ROBERTS: So that would put the overall deficit adding to the debt in the next 10 years at $9.3 trillion, according to the Congressional Budget Office. So you want to take a little bit - you want to take your scalp of this and take a little bit out of it. How much of what he wants is he going to get?

CONRAD: Well, certainly his key priorities are going to be maintained. But, look. In the first five years alone, we've had to take $600 billion out. Over 10 years, if those policies were continued, that would be $2.4 trillion. Reduced in terms of what his earlier proposal provided. And I think the American people would expect us to do that, given the fact the revenue forecast has changed so dramatically and in such an adverse way.

So we've tried to respond in a responsible way and we've tried to do it in a balanced and fair way.

ROBERTS: So you're proposing a number of cuts, as you just mentioned there. You're reducing budget projections in your budget from 10 years down to five years. You're also assuming in your budget projections that middle income earners will pay billions of dollars in alternative minimum tax in the final two years of your plan. But Congress keeps getting...

CONRAD: No, that's not the assumption. John, let me just say this...


CONRAD: I know there is a lot of confusion about this. That is not our assumption on the alternative minimum tax. The alternative minimum tax we are providing for the next three years so there is no revenue increase at a time of economic slowdown. But after that we're saying to fix the alternative minimum tax, it's got to be offset either through spending reductions or additional revenue. We're not assuming that the alternative minimum tax will come back on.

ROBERTS: OK. But basically, though, all of those items were included in "The New York Times" editorial that was out today that suggested that you're resorting to budget gimmickry here in your plan to save money.

CONRAD: I don't think there is any budget gimmickry in saying we expect things to be paid for and the budget resolution requires them to be paid for. I know that's sometimes not the way Washington works. But we're going to have to work that way if we're going to deal with these problems for the future. We simply have to cut spending, which is done in this budget.

There's no gimmick there. Talk to my colleagues who have argued with me strenuously that I've cut too much spending. And we've also adjusted the mandatory spending, as well as these revenue items saying, look, if additional tax cuts are going to be put in place beyond those from 2001 and 2003, which we have included in this budget, if there are additional tax reductions, they're going to have to be offset.

ROBERTS: Let me ask you, if I could, before we have to go here about the flooding there in your home state. It looks like the city of Fargo, in particular, and Bismarck as well in potentially in dire straits with the rising waters. What are you prepared to do here if those sandbagging levees that they are building don't hold?

CONRAD: First of all, this is the headline from my hometown newspaper talking about fighting this flood in the midst of a blizzard. We had a massive blizzard the last days several days, 10 to 18 inches of snow adding to the problem. We had demolition teams in Bismarck blowing up the ice dikes and now the river has dropped two feet. That's very good news.

In Fargo, the biggest city in the state, we are expecting a crest that is the highest ever in recorded history, and so as the sheriff said there, lives are at risk. We have got all of our effort put into trying to win this flood fight. That's the key.

ROBERTS: All right. Senator Kent Conrad of North Dakota, good to talk to you this morning. Thanks so much for coming in.

CONRAD: Yes, sir.

CHETRY: And we're following breaking news this morning. There's two key numbers just out that will tell us whether the economy may be improving. WE have Christine Romans crunching them for us. She's going to join us in a moment. It's 35 minutes after the hour.


CHETRY: And just in to CNN, the latest numbers on the state of the nation's economy as well as the job markets. Christine Romans is here "Minding your Business" this morning. So while we're talking about a shrinking economy yet again for the quarter?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's right. We're talking about the fourth quarter. We're getting more and more information all the time about what the fourth quarter looks like. And now gross domestic product for the fourth quarter looks like it shrank 6.3 percent. That means the economy is shrinking and a little bit worse than people had thought as we get this new information, we get a better picture of just how bad it was in October, November and December. And we know it was worse than we thought.

When I look through these numbers, Kiran and John, I see that there is only one section of the economy that is growing and that is government spending. That's the only part of the economy that is growing. Everything else is a detractor and everything else here is something that is subtracting away from economic growth whether it's exports, whether it's your house, whether it's personal spending, whether it's equipment, software purchases, all of these things.

The GDP is the report that best measures what's happening with the overall economy. It's got a lot of stuff in there and really only government spending is increasing. So this makes it the worst, I think, gosh, -- since the 1980s and that's no real surprise there. I mean, a lot of the things that we were talking at the end of last year you got to go back to the recession of the '80s to compare how it feels and these numbers are bearing it out.

CHETRY: How about the weekly jobless numbers?

ROMANS: And the weekly jobless numbers are what we've seen again a little worse than what people thought. I think 652,000 people lined up for unemployment benefits. I say lined up. You can also dial in and call for those, too. This is the modern way that we file for unemployment benefits, 652,000 people and the continuing claims, the number of people who are continuing to get jobless benefits is now a record.

More than 5.3, maybe 5.6 million. I don't have the number in front me but let me look again. But 5.6 million people, that's a lot of folks who are surviving on unemployment checks.

CHETRY: Right. I think it's slightly higher than the projections. They were projecting 5.48 million.

ROMANS: Right. And that's a lot of folks. These are numbers that we're going - this is the new normal for the labor market. And UCLA Anderson's School did a study yesterday about the job situation and said, look, you're going to see the jobless situation peak at 10.5 percent and even into 2011, UCLA Anderson say you could see 9.5 percent.

So this is the new normal but it's still dynamic, the labor market. A lot of things are happening in there. You're talking about small business creation. That's very interesting. Big businesses, important businesses have been started in a recession. So we'll see, you know what kind of - how we all adapt to this new normal.

ROBERTS: It seems like it's going to linger for a while. Christine, thanks so much.

It's 41 minutes after the hour. Let's fast forward to the stories that will be making news a little bit later on today. At 11:30 a.m. Eastern President Obama goes one line in a web town hall meeting to answer your questions about his budget and the economy. Nearly 85,000 questions have been submitted to the White House website at this point. You still have until 9:30 Eastern to post one at

One more safety inspection before the Space Shuttle Discovery is clear to return home this morning. The astronauts will use a laser tip inspection boon to give the shuttle's wings a final once over. A standard procedure since the 2003 Columbia disaster. Discovery is expected to land at the Kennedy Space Center in Florida on Saturday.

And the first ever U.S. coin with readable Braille characters makes its debut today. The commemorative silver dollar coin features a portrait of Louie Braille on one side and a picture of a child reading a Braille book on the other. It marks the 200th anniversary of the birth of Louie Braille who created the alphabet for the blind. CHETRY: All right. Could it be a good time to fly?

We're going to show you where the best fares are and how to guarantee that you'll get the lowest possible price.

Also, it's a race against time as thousands of people in North Dakota try to fill millions of sandbags and stop the local river from swallowing the entire town. We're going to have the latest on their efforts there.

Forty-two minutes after the hour.


ANNOUNCER: This is CNN. Breaking news.

ROBERTS: And we're following breakings out of Fargo, North Dakota for you this morning. Residents there desperately trying to avoid disaster. Thousands of people working to stack two million sandbags around the Red River. The rising waters could reach 41 feet by Saturday, that's a record.

Rob Marciano is following it all from the extreme weather center in Atlanta and he is here now.

Hey, Rob.


Remarkable stuff happening up there. And on top of that, the elements that they are battling right now in the form of heavy snow and definitely really, really cold air there. And that creates a whole other bunch of issues.

All right. Let's zoom in to this area. The Red River which flows to the north, every one of these river gauges in purple is a moderate to heavy flooding there. Where they are stacking those bags is where we expect the river to crest at about 41 feet over the weekend. That would be an all-time record.

They are hustling there at the Fargo Dome. Bagging sand by the thousands and, in some cases, over a couple of million. So that's where we have that particular issue and it's not going away any time soon. And we might even see a little bit more rain by the time next week comes around.

Temperatures in the teens and snowfall still a problem today. Tornado watch out for parts of the southeast. I want you to be aware of that until 2:00 today. And there will be some travel issues in Atlanta to New York to Denver where that city is under a blizzard watch with the next system about to roll into town.

Mississippi saw some heavy damage overnight with potential tornado rolling through McGee there. Lots of action weather wise and our hearts certainly go out to the folks in Fargo. A hardy bunch up there battling the elements as the rivers continue to swell ROBERTS: They are a hardy group up there. Rob, thanks so much for that. Appreciate it.

MARCIANO: You got it.


CHETRY: We have some breaking news out of North Korea. With a missile on the launch pad, Secretary of State Hillary Clinton sends the country a strong warning. We're live at the Pentagon.

And despite tough economic times, it may be the perfect time to fly. Airline ticket prices plummeting. We'll tell you where to find the lowest air fares and the best time to buy.


ROBERTS: New video just in to CNN. Liftoff. A Russian space capsule carrying space tourist Charles Simony has lifted off from the International Space Station from Kazakhstan. It's the software billionaire's second trip to the ISS. He loved it so much the first time, Kiran, he just had to go back.

CHETRY: And there you go.

Well, if you're looking for a silver lining in these tough economy, air fare is dirt cheap right now. Personal finance editor Gerri Willis is here with some of the best deals. We're not talking about of course launching ourselves into space but hey you want to take a trip somewhere, now is the time...

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: You want to go see the grandparents, I'll get you there. OK. The airlines, they are desperate for travelers and you are benefiting. If you make comparisons to this time last year, with oil what at $130 a barrel, ticket prices on the whole are down 30 percent to 40 percent.

Europe down 45 percent. OK. Let's look at deals. Most discounted fares, these prices are from and it's for upcoming travel on various airlines. Take a look at this. Charlotte to San Francisco, $218, that's down 44 percent from last year. Phoenix to Orlando, 160 bucks, that's down 42 percent. Hartford to Vegas, that's a good trip, $180, down 37 percent. Ft. Lauderdale to Chicago, $139. Amazing.

And here are some of the most discounted international cities. Take a look at those. If you're going to Moscow from Washington, that's down 54 percent and Chicago to Dublin down almost 60 percent. Boston to Milan down 54 and Los Angeles to Sydney down 53 percent. Is that not a good deal? It's fantastic, right? Now, while ticket prices have gone down, airline fees are not going down. They are raking in too much money for the airlines to cancel them so I guess we have to keep paying.

CHETRY: What is the best strategy though to be able to snag one of these really low air fares? WILLIS: OK. Here is what you do if you want to get a cheaper than what we just showed you. Look. You don't necessarily have to book early. That's not the right strategy right now. Look at April and May for travel. That's when the best fares are. And if you're going to travel in the summertime, start shopping in two weeks because that's when fares are expected to fall further.

Bottom line here, if you are paying over 300 bucks for a domestic ticket this year, you're paying too much. You can get coast-to-coast flights for $199. And of course, if you really wanted to bring those prices down even further, fly on Tuesday, Wednesday, Thursday, Saturday. Shop Tuesday after lunch because that's when most airline sales come out. On Monday and airlines try to match the prices on Monday evening and Tuesday morning. A great strategy if you really want to save some dough on air fare.

CHETRY: That's not bad. So April and May, we think that because of the Easter break, a lot of families are trying to get away with the kids?

WILLIS: But in a couple of weeks though, there are going to be more - there is nor discounting coming. So if your real plan was to go in July or August and you really want to get started figuring out where are you going to go so that in two weeks you can sit down at the computer, fare compare.

CHETRY: After lunch on Tuesday. Roll up your sleeps, right?

WILLIS: I'll come to your office and we'll do it together.

CHETRY: Thanks, Gerri.

WILLIS: You're welcome.

CHETRY: All right. Well, if you have a question Gerri and for any of our reporters on any topic, give us a call at AMFIX hotline, it's 877-my-am-fix or 877-692-6349, John.

ROBERTS: North Korea ready to launch a ballistic missile. Officials there are now saying any discussion of sanctions would end nuclear talks. We're covering all the angles of this developing story for you.

Fifty-three minutes now after the hour.


ANNOUNCER: This is CNN. Breaking News.

ROBERTS: And we're following breaking news for you this morning. North Korea has moved a long-range ballistic missile onto a launch pad in the northeastern part of the country. And now North Korea says any U.N. discussion of sanctions as a result of the launch would be seen as a "hostile act."

CNN's Pentagon correspondent Barbara Starr is following all of the breaking developments. And Barbara, Hillary Clinton issuing a strong warning for the North Koreans this morning. But what could the U.S. do if they do launch?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, John, as you look at that missile picture what it tells you is North Korea is on a very interesting strategy here that may back the Obama administration into a corner with very few decisions that it can make. This can go two ways.

Either it is a missile with a warhead configuration on top. And that's a military problem. Or it is what North Korea says, which is a missile with a satellite on top and they simply want to launch a commercial satellite. If they go with a commercial satellite, what is the Obama administration do about it? The U.S. does not have a policy of shooting down commercial satellites out of the sky.

The Iranians launched one just a few weeks ago. The U.S. let it go. North Korea has issued international statements now saying it will be a commercial satellite. It will launch sometime between April 4th and April 8th. The Pentagon, the CIA, the intelligence community, they all believe that's what North Korea is going to do.

President Obama, when it happens, may have less than five minutes to actually make the decision. If North Korea launches, it will be over Japan within seven to eight minutes. It will force President Obama to have to make a very quick decision possibly. John.

ROBERTS: And certainly the repercussions of that decision could be far-ranging as well. What leads U.S. intelligence officials to be so certain that this is a ballistic missile as opposed to, as the North Koreans claim, a satellite?

STARR: Well, to be clear, what U.S. officials are saying across the administration is when they look at the imagery now, they see what they call a missile body, the Typo Dong II. That is a name to remember, that is North Korea's long-range intercontinental missile. That is what they see on the launch pad.

What concerns them is what would be the front end of that missile? Will it be a warhead configuration or will it simply be a commercial satellite as North Korea claims? Basically, they can go either way with either type of front-end configuration, if you will.

The problem, again, for the president is if it turns out to be a satellite, what do they do about it? Can they simply jaw-bone North Korea in the next several days to changing their mind and not doing anything, not launching anything? That's not very likely. So what is most interesting here is the North Koreans strategy now say that it's commercial and then wait and see what the Obama administration tries to do about it. John?

ROBERTS: So I don't want to get too technical here, Barbara, but if they do launch this missile, is there any difference in the trajectory between a satellite launch and a ballistic missile test that the Pentagon can detect quickly enough to order a shoot-down? STARR: You bet. That is what is going to be most interesting. Let's say this happens, indeed, April 4th. Everyone will be watching the clock. President Obama, if it is a missile configuration, again, would probably have experts say about five minutes from the time North Korea launches to really make the decision. They will watch the trajectory. They will see if it fails and goes into the sea very quickly, no problem. If it continues to fly, they have to make a decision, John.

ROBERTS: All right. Barbara Starr for us at the Pentagon with the very latest on that. Of course, Barbara will keep watching all of this developing news for us all day from the Pentagon. Barbara, thanks so much.

STARR: Sure.

CHETRY: Another breaking story we've been following all morning for you and that is the dire situation in North Dakota right now. Let's take a look right now at some live pictures. They are calling it the unchartered territory as the Red River continues to rise. They believe it's going to reach 41 feet by Saturday. That would be a record. And there are thousands of volunteers working tirelessly to stack two million sandbags around that Red River.

Volunteers coming out. They are also readying their evacuation plan and renewing their call for more volunteers. They want to build the dikes a foot higher in an effort to hold back the water. So again, our thoughts are with all of the people of North Dakota today as they struggle against mother nature to try to do the best to protect their cities and towns there.

And that is going to do it for us on this Thursday morning. Thanks so much for joining us. We'll see you back here tomorrow.

ROBERTS: And right now, here's CNN NEWSROOM with Heidi Collins.