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AMERICAN MORNING

Red Cross Shelters Filling Up as Wildfires Scorch Across Santa Barbara; Administration Announces $17B in Budget Cuts, Republicans Say, "Not Enough"; GM Announces $6B Loss in First Quarter, 47 Percent Drop in Revenue; Michael Savage, "I Want to Clear My Name"

Aired May 7, 2009 - 07:00   ET

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


KIRAN CHETRY, CNN ANCHOR: All right. Well, hello once again. It's 7:00 on the nose right here in New York. I'm Kiran Chetry.

Carol Costello is in today for John Roberts on this Thursday, May 7th. Good to have you with us.

CAROL COSTELLO, CNN ANCHOR: Yes, time is flying, isn't it?

CHETRY: It sure is. And we have a lot going on today.

The big stories we're breaking down in the next 15 minutes, a wildfire spreading out of control right now in Santa Barbara, California. Large, really expensive homes in this area reduced to ashes. Red Cross shelters are filling up. Weather conditions stacking the deck against firefighters with 100-degree temperatures, 60 mile-an-hour winds. Our Kara Finnstrom is just footsteps away from the flames. She's going to be joining us in a few moments.

The Obama administration announcing $17 billion in budget cuts today. A tiny fraction though of next year's almost $3.5 trillion spending plan. Those cuts would trim or end 121 government programs. Republican leaders say it's not enough. It's only half of what President Bush wanted last year. We're going to have more on what could be a tough sell on Capitol Hill ahead.

And Bristol Palin with advice for teens about sex - don't do it. Sarah Palin's daughter, a teen and now a new mom herself on a media blitz. So is she the right spokesperson for abstinence?

We want to hear from you today. Call 1-877-MY-AMFIX. You can also - go ahead and send us a tweet, twitter.com/amfix.

First, though, back to our breaking knew. And it's a state of emergency right now in the foothills of Southern California.

There are homes burning as wildfires spread out of control there. One firefighter seemed to get a break then it's the wind that kicks back up again. Two thousand homes have been evacuated.

Kara Finnstrom is live on the scene for us this morning in Santa Barbara.

And, Kara, as we heard from Rob Marciano, it doesn't look like these winds and the hot, dry conditions are going to let up today. KARA FINNSTROM, CNN CORRESPONDENT: No, and actually we've been starting to feel that wind pick up again this morning as we've been sitting here and watching this home behind us, just completely gutted by these flames.

If you take a look over here, you can see what used to be the door to this home and some of the windows, you can see the flames inside completely eating away and just leaving a shell here of this house.

No official estimates yet, Kiran, on exactly how many homes in this area had been completely destroyed like this one. But we can tell you that as we drove up here, you know, along some of these dark twisty canyon roads, we, ourselves, saw a number of homes that had been burned to the ground.

If you take a look over here, you can see that the roof - you can see the smoke being blown out. And if you take a look just down below into what used to be one of the rooms, you can see some of the hot embers blowing around down there.

Well, one of these big gusts of winds come up, those embers just blow right at us. And that is, you know, one of the big concerns of firefighters today. Those winds are expected to pick up again. Those embers get carried and this fire spreads. And within the last 24 hours, when those winds did pick up, they actually doubled, more than doubled the size of this fire. So, Kiran, a big fight still ahead for these firefighters today.

CHETRY: And what is the plan in terms of how long they want people to stay out?

FINNSTROM: Well, at this point, they really have upped the mandatory evacuations and the word to residents here is wait until you hear an all clear because they don't know what they're going to expect from those fires yet today.

They don't know exactly what they're going to expect from the winds, but there are strong winds forecast of up to 65 miles per hour, possibly. So that really just makes us this very unpredictable. So they're asking folks to stay tuned and to evacuate, you know, as soon as they get those orders.

CHETRY: All right. Keep safe out there. Kara Finnstrom for us this morning. Thanks.

COSTELLO: Bristol Palin is on a media blitz supporting a campaign to help stop teen pregnancy. Palin says she supports abstinence-only education, and the comment she made back in February telling teens abstinence is "not realistic at all" were actually taken out of contact.

Deb Feyerick is tracking the story for us. Is there any way to know if her message is resonating with teenagers?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, it's not. It's certainly resonating with members of the press. But, you know, this is one of those things that has lots of people questioning whether there are some political motive behind Bristol Palin's media tour telling teens do as I say, not as I do.

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): Swarmed by photographers, 18-year-old Bristol Palin walked the receiving line in her new role, "The Ambassador to Abstinence." Saying her message to teens is...

BRISTOL PALIN, TEEN AMBASSADOR, CANDIE'S FEN.: Teens should just wait to have sex.

FEYERICK: The Alaska governor's daughter, who gave birth to son, Tripp, in December, is taking part in a national campaign to prevent teen pregnancy.

PALIN: Girls now, they think that having a baby is like having an accessory on their hip. And they don't realize that it's such a huge responsibility and it's such just hard work.

FEYERICK: In February, during a FOX interview, Palin's message on abstinence didn't seem so clear cut.

PALIN: Everyone should be abstinent whatever, but it's not realistic at all.

FEYERICK: She now says her comment was taken out of context and that it's the only way to prevent pregnancy. Her ex-fiance, Levi Johnston, with whom she has a strained relationship, had this take speaking on a CBS early show.

LEVI JOHNSTON, FATHER OF BRISTOL'S BABY: I'm telling young kids you can't have sex it's not going to work. It's not realistic.

FEYERICK: In 2006, a total of 435,000 children were born to mothers 15 to 19 years old, slightly higher than the previous year. Thousands more teenage girls chose abortion.

ANN SHOKET, EDITOR-IN-CHIEF, "SEVENTEEN": Bristol gives a very public face to a real private struggle that 750,000 teenage girls go through every year. It is a tremendous turmoil in young lives.

(BEGIN VIDEO CLIP, ADVERTISEMENT)

UNIDENTIFIED FEMALE: There is nothing to worry about.

UNIDENTIFIED FEMALE: Nothing to worry about, huh?

(END VIDEO CLIP)

FEYERICK: The campaign sponsored by shoemaker Candie's debuted on what's being billed as National Teen Pregnancy Awareness Day.

(BEGIN VIDEO CLIP, ADVERTISEMENT)

UNIDENTIFIED FEMALE: Welcome to reality.

(END VIDEO CLIP)

FEYERICK: Sitting next to Palin at a panel in Manhattan was actress Hayden Panettiere with a somewhat different message about sex.

HAYDEN PANETTIERE, ACTRESS: There's nothing wrong with it. It's human nature. People do it. As long as you're educated, as long as you're safe and you are smart about it.

(END VIDEOTAPE)

FEYERICK: Now the Candie's Foundation says Bristol Palin is not a paid spokesperson, but the company does cover her expenses and compensates her for taking part in the campaign. And though she appears glamorous, she's trying to make the point, well, she's exhausted. Her choices about her own life now are very, very different.

COSTELLO: It's tough being a mom.

FEYERICK: It really is hard.

COSTELLO: And you know, Deb, this is all people can really talk about. I mean "The View's" Elisabeth Hasselbeck, who campaigned for the McCain-Palin ticket last fall, defended Bristol Palin on "LARRY KING LIVE."

And the story has our iReporter sounding off too.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

ELISABETH HASSELBECK, CO-HOST, "THE VIEW": I think she's the perfect choice. And truthfully...

LARRY KING, HOST, "LARRY KING LIVE": But she didn't do it.

HASSELBECK: Look, she has a tangible...

KING: Or she did it.

HASSELBECK: She has a tangible living example of what this new responsibility is in her life. And I believe that there is a sort of sadistic giddiness on the part of some true radical leftists who are laughing behind the scenes about Bristol Palin's situation. Why are they so obsessed with her being a spokesperson for this?

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

DAVID SEAMAN, CNN IREPORTER: Come on, I mean that's just ridiculous. Teaching abstinence education when you got knocked up? That doesn't make a lot of sense? That's like somebody who's out of work and in $200,000 of debt teaching something at the learning annex about how to become a millionaire. (END VIDEO CLIP)

CHETRY: All right.

COSTELLO: OK, you know, we should respond to David because, you know, alcoholics like often talked to recovering alcoholics because they've been there and they know. So why is that - so why is Bristol Palin's situation different than that?

FEYERICK: The Palin family tends to evoke a lot of emotion on both sides. And so people wonder is something more going on? Is she being used as some sort of political tool? Does she believe this?

She's telling teens don't do this now. But the truth is, well, maybe you need a plan. Maybe you need a plan. You know, she says the baby is not a mistake. The teen sex was a mistake. You need a plan. If you're in that situation, you got to know what you should be doing and not to be doing.

COSTELLO: Thanks, Deb.

FEYERICK: Yes, of course.

CHETRY: All right. Deb, thanks.

Well, this just in now to AMERICAN MORNING. Some bad news actually coming out of the auto industry, the U.S. auto industry.

General Motors Corporation saying that it lost $6 billion in the first quarter, and it spent $10 billion more cash than it took in. And this is all because of a slump in sales. They say their sales revenue was cut by $20 billion.

This is the nation's biggest domestic automaker. They're saying they lost $9.78 per share and that compared to the loss of $3.3 billion or $5.80 a share in the year-ago period. So, again, as we know, this is the company that received some $15.4 billion in federal loans and they also have this June 1st deadline that they have to restructure or go into bankruptcy.

So, again, General Motors saying their revenue dropped 47 percent and they have again less than a month now to figure out a plan to be viable, otherwise they have to go into bankruptcy protection.

We're going to have our business team on this and helping us sort through exactly what this means for the future of the U.S. auto industry.

COSTELLO: Forty-seven percent. How do you recover from that? Interesting.

Also new this morning, Maine is now the fifth state to allow same-sex marriage. The governor signed a bill that authorizes marriage between any two people, rather than between one man and one woman. New Hampshire may not be that far behind. Legislation already on the way to the governor's desk there, but it's not clear whether he'll sign it.

A rush to see friends and family in Cuba. Cuban tourism officials say visits from America are up 20 percent this year. President Obama signed an executive order last month lifting all restrictions on Cuban-Americans visiting relatives.

And he is banned from Britain. Outspoken talk show host Michael Savage is furious over being put on the "do not enter UK list" along with Nazi skinheads and Muslim extremists. And now he's speaking out exclusively on AMERICAN MORNING. He talked to Kiran.

It's 10 minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: A look at the nation's capital this morning at 12 minutes past the hour. It's rainy, 63 degrees there right now. A little later, it's going to be partly cloudy and 76.

Time now to fast forward through the stories that will be making news today.

At 10:30 a.m. Eastern Time, Secretary of State Hillary Clinton is going to be holding meetings with the Afghan and Pakistani foreign ministers at the State Department.

At 8:30 a.m. Eastern, the Labor Department releases its weekly job reports, the jobless claims. They will also be releasing the first quarter report on productivity rates for 2009. So we'll have those numbers for you as soon as they come out.

And President Obama today unveiling the details of his 2010 budget, plans to eliminate up to 121 government programs for $17 billion savings. The president speaks live at 10:35 a.m. Eastern - Carol.

COSTELLO: And news just in to CNN, GM is reporting big losses for the first quarter this year saying sales are down a whopping 21 percent.

Christine Romans "Minding Your Business" this morning.

Christine, GM lost $6 billion in the first quarter. How can you recover from something like that?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Carol, this is the state of the American auto industry. This is a company that is trying to figure out how it can recover from that with the help of American government loans. You know, it has about $15.4 billion in American government loans and a June 1st deadline to prove that it can continue to survive without going through bankruptcy like Chrysler has had to.

Here is the irony. That is a huge loss and you're right to point out what a big loss it is. That 21 percent decline in sales, a 47 percent decline in revenue, a global economic situation that's making it worse and industry-wide sales have been slumping, but it is slightly better than expected.

It's not as bad as it could have been. And that's what people have been watching in the auto industry, Carol, is the pace of these declines, you know, stabilizing or even less bad than people thought. And that's the normal, frankly, in the auto industry.

COSTELLO: The new normal, the new good news is it's not as bad as expected.

ROMANS: That's exactly right.

COSTELLO: OK.

ROMANS: There's going to be an economic textbook written on that one these days.

COSTELLO: I'm sure. And you should do it.

Christine Romans, thanks.

CHETRY: Elizabeth Edwards' explosive interview on Oprah has put her husband's affair back in the headlines. How John Edwards betrayed her and how he handled the scandal publicly is being scrutinized now all over again. And our Jason Carroll joins us now with the aftermath of the former senator's infidelity.

You know, you would think that, I mean, you wouldn't want to bring this back out into the light again if you were trying to, you know, deal with it privately. But she is writing a book about it and she's being very candid.

JASON CARROLL, CNN CORRESPONDENT: And of all people, your wife, right?

CHETRY: Right.

CARROLL: Your wife and talking to Oprah.

Well, that interview is going to be airing a little later on today. Crisis management experts say what we are seeing today with Edwards is the direct result of him mishandling the situation when it first happened.

(BEGIN VIDEOTAPE)

OPRAH WINFREY, TV TALK SHOW HOST, "THE OPRAH WINFREY SHOW": You asked your husband for just one gift when you got married. What was that?

ELIZABETH EDWARDS, JOHN EDWARDS' WIFE: I wanted him to be faithful to me.

CARROLL (voice-over): Elizabeth Edwards may have forgiven her husband, but some Democratic strategists say John Edwards' conduct in the wake of the scandal has been unforgivable in its own right.

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: I think it's gone from being mad to being disgusted, to just not wanting to think about it.

CARROLL: Crisis management experts say Elizabeth Edwards' tell- all book about her husband's affair is more a fallout from a story Edwards should have taken more responsibility for from the beginning.

MARIAN SALZMAN, PORTER NOVELLI: He left a dot, dot, dot. And with that dot, dot, dot, the story wasn't over.

And secondly, by her writing this book, I mean, she's really reopened this can of worms.

CARROLL: Political insiders question why Edwards didn't come clean early and withdraw from the presidential race. Instead, he kept up the image of family man, devoted husband to a wife diagnosed with cancer.

When Edwards did finally admit to the affair with Rielle Hunter, he issued a statement. "It is inadequate to say to the people who believed with me that I am sorry." Which left some wondering where was Edwards' public mea culpa like some noted ones now part of political history.

WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I am profoundly sorry.

ELIOT SPITZER, FORMER GOVERNOR OF NEW YORK: I apologize to the public.

JAMES MCGREEVEY, FORMER GOVERNOR OF NEW JERSEY: My truth is that I am a gay American.

CARROLL: Edwards told ABC News last August that being a young senator, running for president made him feel invincible.

JOHN EDWARDS, FORMER PRESIDENTIAL CANDIDATE: All of which fed a self-focus, an egotism, a narcissism that leads you to believe that you can do whatever you want.

CARROLL: Some strategists and crisis management specialists say that explanation, not enough.

ERIC DEZENHALL, CRISIS MANAGEMENT SPECIALIST: By explaining it and saying that he was arrogant and narcissistic, that's all well and good. But it doesn't neutralize the original sin.

ZIMMERMAN: John Edwards has demonstrated a lack of personal grace, a lack of dignity, a lack of true sense of remorse.

(END VIDEOTAPE)

CARROLL: And Edwards has denied he is the father of Rielle Hunter's 1-year-old daughter. Elizabeth Edwards told Oprah she is not sure. And on a separate issue, Edwards has acknowledged federal authorities are investigating whether payments made to Hunter's production company were improper. Edwards says he is confident no funds from his campaign were used improperly. You know, we were sort of talking while that story was running why she decided to give that interview to Oprah.

COSTELLO: A woman scorned. I just think she's so angry about it, that why not?

CARROLL: You don't think it was therapeutic? You think it is the scorn?

COSTELLO: Well, think about what he made her do.

CARROLL: Yes.

COSTELLO: I mean, she knew supposedly he was having this affair before he decided to run for president. Yet he supposedly goes to her and says, I'm running for president. Please, help me.

And so she does. And then she's publicly humiliated.

CARROLL: Right, after putting on a good face.

COSTELLO: She had cancer and children, so why not appear on Oprah and give your side of the story?

CARROLL: I'm going to defer to you guys on the story.

CHETRY: And the other question I have is Oprah hasn't released any clips of John Edwards. We've heard from Elizabeth Edwards. That's airing tonight, right?

CARROLL: Correct.

CHETRY: He - I mean, this afternoon, he is going to also be speaking about this situation. Do we know anything about what he's planning to say?

CARROLL: She is not releasing anything yet. I can't imagine what he would say. But if you listen to what the experts are saying, they're saying he better get up there and...

COSTELLO: And grovel.

CARROLL: Grovel is a good word. Apologize. Yes.

CHETRY: Jason, thanks.

CARROLL: And mean it.

CHETRY: Exactly.

Jason, thanks.

COSTELLO: There's so many things we want to say, but can't.

Conservative talk show host Michael Savage has no problem with that, though. He has been banned from Britain and he's furious about it. He talks exclusively with Kiran on AMERICAN MORNING. That's next. Hear why he ends the interview with, "God help us all."

And the Republicans regrouping after Senator Arlen Specter switches sides. We'll talk to the man who'll be now standing in front of President Obama's Supreme Court nominee.

It's 19 minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: Talk show host Michael Savage, somebody who said controversial things in the past - remember he caused an uproar when he said that autistic children are often brats who haven't "been told to cut the act out"? Well, now he's the one who's furious, because the British government just banned him from the UK. So what does a radio guy doing on a country's "Do Not Enter" list with Nazi skinheads, and in some cases murderers and Muslim extremists?

(BEGIN VIDEOTAPE)

CHETRY: I want to ask about this. British Home Secretary Jacqui Smith saying that you're on this list that we've been talking about because you were someone who, "has fallen in the category of fomenting hatred of such extreme views and expressing them in such a way that is actually likely to cause intercommunity tension or even violence if that person were allowed in the country."

What's your response to that?

MICHAEL SAVAGE, CONSERVATIVE RADIO TALK SHOW HOST: It is demented. That's a demented attitude. We are protected by the First Amendment, number one, they are not. And the First Amendment, as we all know, was written to protect offensive speech, not polite speech. Let's begin with the basics.

But more than that, she lumped me in with known murderers and terrorists, people who have been in prison for killing people. I am a talk show host and an author.

The fact of the matter is, I've been on the air for 15 years, three hours a day, five days a week. I have never ever promoted violence. There's never been one violent incident attached to my show.

CHETRY: And as you said, you're being grouped in with people including anti-gay preachers, radical Muslim clerics, the Ku Klux Klan. Of all of the talk radio hosts, why you?

SAVAGE: I was astounded when I saw this. I thought it was some bizarre joke. I said this can't be real. How in the world could she lump me in with people such as Russian skinheads who were imprisoned for killing people? It makes no sense.

CHETRY: Why waste your time? You know, you have a lot of things to do. You say you're probably not interested in even traveling to the UK, so why waste your time fighting this in court? SAVAGE: I'm not wasting my time. I spent my entire life building up a great reputation amongst millions of loyal followers and fans. I have a family, and when I leave the Earth, I want to leave my name in good standing, in the way it really is.

My Ph.D. is from Berkeley. I did great research. I've written great books. I'm a family man. I love my country, and I want to clear my name. I want my name off of that list and I want a letter of apology from this Jacqui Smith.

CHETRY: And since this came to light, have you heard anything from the British government about whether they're rethinking this?

SAVAGE: I have not, but I've heard from British attorneys who are salivating to set the record straight and win quite a large settlement should she not remove my name from the list.

CHETRY: There's a lot of British people that have never heard of you before. They didn't know Michael Savage. They didn't know your radio show before. Now, they're going to be logging on the Internet, clicking on, listening to you. So I mean, this has got to help ratings in some way.

SAVAGE: It's not about ratings. I'm in a point in my life where ratings don't matter to me one way or the other. I can leave radio tomorrow and I wouldn't have a different lifestyle than I do today.

People have to understand that I believe in what I say. Borders, language, culture is the real message of the "Savage Nation." Borders, language, culture. I'm a traditional American. I'm a patriotic American. And if that's a crime in England, God help us all.

(END VIDEOTAPE)

CHETRY: All right, that was part one. We're going to see what happens when I ask him about some of his controversial comments. You know, he says that he was being misrepresented. So where does he stand on the issues like autism, on homosexuality and Islam? He's going to talk to us in just a moment.

Well, she was prepped for surgery. She was wheeled into the operating room, and put under only to wake up and find out she never had surgery. The story of a woman abandoned in the OR just ahead.

It's 25 minutes past the hour.

(COMMERCIAL BREAK)

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

Talk show host Michael Savage is known for saying outrageous things. And now he's been banned from Britain for what its home secretary calls fomenting hatred. He's on a list with Russian gang members and Muslim extremists.

But we want to show you the rest of our exclusive interview. Michael Savage seems to be able to handle the heat.

(BEGIN VIDEOTAPE)

CHETRY: Why don't you clear up some of the misconceptions? I want to ask you about your views on some of the following things.

What are your views on homosexuality, for example?

SAVAGE: My religious training teaches me that it's something to shun. And when a society starts to embrace homosexuality and other behaviors, where does the society end up?

CHETRY: And what do you say to people who say, you know, I was born this way. I didn't ask to, you know, be attracted to one sex or the other and I shouldn't be treated differently?

SAVAGE: Well, you could be born many different ways. It doesn't mean this is - it doesn't mean that a person has to follow their - their urges. I mean, there are many urges that people have. And if a society starts to engage homosexuality on an equal footing with heterosexuality, you end up with no society.

Where is the reproduction supposed to come from? Have we lost all sense of father and mother, a family?

CHETRY: You once said about autism...

(BEGIN VIDEO CLIP)

SAVAGE: You know what autism is? I'll tell you what autism is. In 99 percent of the cases, it's a brat who hasn't been told to cut the act out. That's what autism is.

(END VIDEO CLIP)

SAVAGE: That's an absurd statement. That was said in jest. They understand that.

First of all, I come from a family who had a handicapped brother, which I don't want to go into. And I have given money. I have supported people. I've protected the defenseless all my life. There's no one in the media who's done more for the defenseless than Michael Savage, particularly children.

CHETRY: What are your views about immigrants and illegal immigration?

SAVAGE: Illegal immigration? It's in keeping with 80 percent of the American people. They want it stopped and they want it stopped now. This country is sinking and red ink. This country is broke. This country cannot afford the welfare. This country cannot afford the legal care. This country cannot afford the education of illegal immigrants. We can no longer live in the 1950s.

Moreover, there's a big difference between immigration and illegal immigration. I am the son of an immigrant. I'm a first generation American. My grandfather waited on line to become a citizen. You can't suddenly take people who run across the border and say presto, you're a citizen, can you?

CHETRY: And, finally, what are your views on Islam? You once said...

(BEGIN VIDEO CLIP)

SAVAGE: I don't want to hear anymore about Islam. I don't want to hear one more word about Islam. Take your religion and shove it up your behind.

(END VIDEO CLIP)

CHETRY: What do you think about Islam?

SAVAGE: What do I think about Islam? I think it's up to the individuals to make their own decision. It's true that most Muslims are not terrorists. That's clear. But it's also true that almost all terrorists on earth today are Muslim.

Let's not deny reality. 9/11 was committed by who? Nineteen Saudi Arabians? Or 19 Christians? Nineteen Saudi Arabians who happened to be Islamic or 19 Jews?

I mean, we can't deny reality. We're living in the world of reality or unreality.

(END VIDEO CLIP)

CHETRY: All right. There's Michael Savage, unapologetic for, you know, some of the controversial positions that he has. And he says that he's going to fight this. He says that he has been on the air for years, three hours a day and that there's never been a violent incident related to his shows. He wants off of this list.

COSTELLO: You know, the cynical part of me says he's loving this.

CHETRY: Well, he told me that I - he basically said, I mean, people in Britain call and say they never heard of him before. Now they're listening. He says it's not about ratings, he doesn't care at this point in his life. He wants to clear his name. COSTELLO: So he's not going to talk about it on his radio show?

CHETRY: I bet you, he is.

COSTELLO: I bet you, he is, too.

CHETRY: All right. Well, we think that he was happy that he had a chance to get on our show and at least give his side.

COSTELLO: It was fascinating.

Thirty-one minutes past the hour. Checking our top stories now. No plans for boots on the ground in Pakistan. That's the word for defense secretary Robert Gates. He was speaking to marines in Afghanistan yesterday. Gates assured them they would not be fighting over the border despite concerns about Taliban gains and security of Pakistan's nukes.

And the White House now flip-flopping on an embarrassing Air Force One photo-op over New York City. The administration now says he will see the pictures that cost you more than $300,000 to get and something - they assure us something like this will never happen again.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The report, I believe, will be considered at some point this week. We'll release its findings and release the photos.

(END VIDEO CLIP)

COSTELLO: That's right. They will release the photos. White House officials had said that there were no plans to release those pictures to the public. The botched photo-op terrified many New Yorkers who looked up and saw a fighter jet chasing a 747. And of course, it brought back those terrible day, that terrible day in 9/11.

Wal-Mart avoiding charges after a security guard was trampled to death on Black Friday. This was the scene at the store outside of New York City at a stampede of 2,000 shoppers rushed for post- Thanksgiving deals. The district attorney says Wal-Mart agreed to pay close to $2 million, including $400,000 to the victim's family and it also promised to improve crowd control.

The GOP shaking things up after Senator Arlen Specter switched to the democratic party. The 30-year veteran was stripped of his seniority on five key committees after his defection.

And now, the republicans have picked a key conservative voice to be their point man on the Judiciary Committee with President Obama's first Supreme Court pickup coming up. He is Senator Jeff Sessions from Alabama who himself went through a contentious confirmation hearing more than 20 years ago, and Arlen Specter voted against him.

Senator Sessions joins us now live from Capitol Hill this morning.

Thanks for joining us. We really appreciate it.

SEN. JEFF SESSIONS (R), ALABAMA: Good morning.

COSTELLO: So, let's talk about the Supreme Court pick, because there's a lot of pressure on President Obama to choose a woman. In fact, Ruth Bader Ginsburg weighed in on this saying, "women belong in all places where decisions are being made. I don't say the split should be 50-50. It could be 60 percent men, 40 percent women, or the other way around. It shouldn't be that women are the exception." How do you feel about that?

SESSIONS: I think women make great judges. And as a matter of fact, I was thinking recently that I had primary responsibility to recommend to President Bush two of those women that are now sitting on the federal bench. I believe in their ability and I think we can have a great woman nominee. They'll just have to be subjected to the same questions and inquiries that we would give to any nominee.

COSTELLO: So will you fight for a woman justice?

SESSIONS: Well I - the president gets to make this choice of who he will nominate. And once that's done, we will analyze their record and I hope to be able to support that nominee.

COSTELLO: Other people have suggested, perhaps, a minority justice should be chosen. How do you feel about that?

SESSIONS: I think that would be fine.

The fundamental question is, do they have the gifts and graces necessary to be a great judge? We need the very best that we can get on the U.S. Supreme Court. It's not a patronage position. It's not a political position. It's something that has great importance to the American people.

And I hope the president will think of it in that way. I think he can find a minority or a woman to meet those standards. But regardless, they should meet high standards.

COSTELLO: You said the Supreme Court justice should not be a political decision, and others have said that justices should be neutral umpires of the law. I don't think many American voters really believe that's why justices are chosen.

SESSIONS: Well, justices are chosen with some understanding of who they are and what backgrounds they have politically or otherwise. But I practiced law full time before federal judges for 15 years, and I'm going to tell you that a person puts on that robe, that robe symbolizes the removal of political influence, personal bias, any kind of affect other than the law and the facts of that case. That's the cornerstone of American law.

I think we are in danger, particularly from the left, of politicizing the courts. Using the courts to carry out political agendas that can't be effectuated at the ballot box. And I think that's what American people are most uneasy about.

COSTELLO: Well, but that...

SESSIONS: So I am worried about that.

COSTELLO: ... that could come from the other side, too. For example, if you're anti-affirmative action, would you consider a nominee who supported affirmative action programs? SESSIONS: Well, we'd have to analyze how they think about that and what their legal reasoning is. I think it's difficult when the Constitution requires equal protection that you are - that you have judges basically declared that they'll treat somebody differently simply because of the color of their skin. This is a serious issue legally, not how you would like to see it politically.

COSTELLO: Senator Sessions, thanks for joining us this morning. We appreciate it.

SESSIONS: Thank you.

CHETRY: Well, a look now to the stories new this morning.

The Senate wants to help stop the number of foreclosures. There's a new bill which pass 91 to 5, that makes it easier for homeowners with risky credit to get lower cost mortgages backed by the government. Many lawmakers also say the bill will help boost the economy.

There's news this morning of increased activity to North Korea and nuclear test site. Reuters sending a media report in Seoul, South Korea, saying that the activities suggest that North Korea is getting ready for nuclear test, possibly within weeks. The state last tested its nukes in 2006, which led to heavy sanctions from the United Nations.

And breaking news this morning: Santa Barbara on fire. Million dollar homes, as well as many other homes reduced to ashes. The fire moving so fast, authorities say it's really hard to tell how many are on fire right now. And we're just footsteps away from the flames.

(COMMERCIAL BREAK)

CHETRY: Welcome back to AMERICAN MORNING.

Well, first she took some heat for her comments about gay marriage. Now, Miss California is under fire again for posing topless. The pageant said she lied to them and now they want her crown back.

Here's Dan Simon with more on the beauty queen's troubles.

(BEGIN VIDEOTAPE)

ANNOUNCER: Carrie Prejean.

DAN SIMON, CNN CORRESPONDENT (voice-over): Miss California may soon be missing her title. It is not because of the interviews or the implants the pageant helped give her, it may be because of this. A photograph taken when Carrie Prejean said she was 17.

The picture was posted this week on the gossip site, the dirty.com. It shows Prejean posing at a modeling session wearing underwear and nothing else. SIMON (on camera): At first, Prejean told pageant officials there was just one photograph, but now she admits there were more of her taken at the same time. Either way, it could spell trouble.

HARVEY LEVIN, EXECUTIVE PRODUCER, TMZ: There are several things that Miss California pageant officials are concerned about. One is, she lied in her contract. She said that she never posed nude or seminude. Well, she did.

SIMON (voice-over): Some, including the Miss U.S.A. judge, are calling for her head - make that crown.

ALICIA JACOBS, JUDGE, MISS U.S.A. PAGEANT: She is in horrible breach of contract. She signed a morality contract, a morality clause within her contract that said she had never posed for nude, or seminude or inappropriate photos. That right there is my belief that she should lose the crown.

SIMON: Prejean calls it a witch hunt, telling CNN in a statement the pictures were part of a vicious and mean-spirited effort to silence her for defending traditional marriage.

And it was that position that first ignited the firestorm and earned her worldwide publicity.

CARRIE PREJEAN, MISS CALIFORNIA: I believe that a marriage should be between a man and a woman.

SIMON: Her traditional value stand hit the airwaves with Prejean appearing on cable programs to push her message.

ANNOUNCER: They are called liars and...

SIMON: She also joined an ad campaign against same-sex marriage.

PREJEAN: Marriage is good.

SIMON: Preaching morality, but posing nearly naked. Some think it speaks of hypocrisy. But there's a charge also being leveled at the pageant, which helped Prejean get the breast implants and paid for them, that the organizers are now considering disqualifying her. The co-executive director of Miss California U.S.A. plans to meet with the Miss California runner-up, Tammy Farrell, to discuss the possible next steps.

Whatever happens, Prejean has stolen the spotlight. And as they say there's only one worse thing than being talked about and that's not being talked about.

Dan Simon, CNN, San Francisco.

(END VIDEOTAPE)

COSTELLO: Bank stress tests, the results are out. Did your bank survive the treadmill? Did it survive? We'll tell you. Also, more and more parents are refusing to have their children vaccinated due to worries about their safety. Dr. Sanjay Gupta will tell us what the fallout could be. It's 43 minutes past the hour.

(COMMERCIAL BREAK)

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

When you go to the OR, you're putting your trust, of course, in the doctors, especially when you're put under. But sometimes what happens when you're unconscious or in this case what didn't happen can be truly shocking.

Alina Cho has the story for us.

ALINA CHO, CNN CORRESPONDENT: You really can't make it up.

Guys, good morning. Good morning, everybody.

It's just an incredible story. Just imagine, you are lying on the operating table ready for surgery. Then, you wake up and you find out it never happened.

Well, that's exactly what happened to a female patient at a hospital in New York. It turns out the doctors involved are facing some other big problems too.

(BEGIN VIDEOTAPE)

CHO (voice-over): April 10 - North Shore University Hospital on New York's Long Island. The female patient is on the operating table, Out cold, head shaven, fully prepped for neurosurgery. The only problem, the surgeon scheduled to operate, Dr. Paolo Bolognese is a no-show. Another surgeon, Dr. Thomas Milhorat refuses to fill in because the patient isn't his.

The woman wakes up only to learn the surgery never happened.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: What really happened here? Who was communicating with who? What did the surgeons know? When did they know it?

CHO: CNN's chief medical correspondent, Dr. Sanjay Gupta, says as outrageous as the story sounds, Milhorat's action is understandable.

GUPTA: As a neurosurgeon, I would be unlikely to go perform an elective operation on somebody without knowing anything about the patient.

CHO: In a statement to CNN, North Shore University Hospital said, "Immediately after learning of this incident, hospital officials began an investigation and took action."

Milhorat and Bolognese, two of North Shore's superstar surgeons were suspended for two weeks.

LEE GOLDSMITH, ATTORNEY FOR 11 PATIENTS TREATED: It's horrendous. It should have never happened. CHO: Attorney Lee Goldsmith called this case the tip of the iceberg. Goldsmith is representing 11 patients of the two doctors and in three lawsuits recently fired, Goldsmith is seeking millions for what he calls, "unnecessary spinal cord surgery." Operations, he says, were performed by Milhorat and Bolognese and caused some of his clients permanent disabilities.

CHO (on camera): Why do you think they're doing it?

GOLDSMITH: Money?

CHO: As simple as that?

GOLDSMITH: As simple as that.

CHO (voice-over): Milhorat is North Shore's chief neurosurgeon and he is New York's highest-paid doctor. In 2007, a Crane survey says he made more than $7 million. Bolognese made more than $2 million. A lawyer for the doctors calls Goldsmith's claims, "absolutely baseless."

As for the woman left on the operating table, the doctor's lawyers while he wouldn't comment on the case, says the whole mishap may have been the result of a scheduling issue.

(END VIDEOTAPE)

CHO: The New York State Health Department is investigating the matter. The two doctors Milhorat and Bolognese have not filed a response to the claims. But after that two-week suspicion that I talked about, they are back on the job.

Now, as Sanjay pointed out to me, it is possible that there was some sort of scheduling mix up. That does happen. Also, it is not uncommon for a backup doctor to say he or she does not want to operate on a patient they know nothing about. Now that makes sense as well.

What is surprising, Sanjay says, though, is that the patient was administered anesthesia. Usually, he says the surgeon is in the room, checks up on the patient and says, all right, let's put this patient under before the patient actually is given the anesthesia.

CHETRY: Right.

CHO: But I asked Sanjay, I said, have you ever heard of anything like this before? And he said, no. It does, however, remind me of a similar case in Boston when a surgeon was in surgery, realized he had to go to the bank, because the bank was about to close, went to the bank...

CHETRY: Oh, come on.

CHO: ... went out, came back and finished the surgery.

COSTELLO: Time to (INAUDIBLE), doctor. CHO: When you're completely helpless, because you're under anesthesia. Wow, unbelievable.

All right. Alina, thanks.

CHO: You bet.

CHETRY: Well, Bernard Madoff's long-time secretary is speaking to CNN and spilling secrets. We're going to hear secrets about the man behind the scandal and whether she had any idea that this Ponzi scheme was going on.

Also, the job market opening up for one incredibly lucky man. He is so lucky it's hard to describe. Just look at the picture. We're going to talk to the guy who beat out 35,000 others for the best job in the world.

It's 50 minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: There's a new concern, of course, about vaccine safety and that's led to a jump in vaccine refusals in the United States. Some parents are just scared and they are saying no to shots. We're "Paging Dr. Sanjay Gupta," CNN's chief medical correspondent in Atlanta this morning.

And you know, we've talked about this whole phenomenon. More and more people believe that autism and autism spectrum diseases or syndromes are linked to vaccines.

GUPTA: Yes. And as a result, a lot of people are opting out of vaccines more so than ever before.

The theoretical risk, obviously, is that more people will get the diseases against which they were vaccinated. That's the problem here. What researchers in this new study have decided to do, the "New England Journal of Medicine," say how much of a problem is this really? And the answer comes back, it is a problem.

First of all, it is a problem that these children aren't getting vaccinated. Now to just back up for a second. Take a look at the numbers in terms of who is not getting vaccinated, 1991 versus 2008. One versus 2.8 percent, almost a tripling. May not seem like large numbers, but potentially large numbers.

As things stand now, Kiran, in every state for medical reasons, you can opt out of vaccines. In 48 states, because of religious reasons, you can opt out of vaccines. In 21 states, really for any reason, based on personal belief, you can opt out of vaccines.

But what happens a lot of times, what they found is that sometimes you develop these clusters or areas where children have not been vaccinated. Parents talk to one other. They say, look, none of us are going to get vaccinated. And that can be one of the largest problems. If you take a look at, for example, recent measles outbreaks. Compare these across the map here, in 2005, remember some of these cases? Thirty-four cases in 2006. There were 18 cases just last yea; in San Diego, 12 cases.

This was a disease that we simply didn't hear about. And if you look sort of across the board, compare a decade - now this decade versus last decade. Overall, you are seeing sort of a doubling of the number of these sort of cases. You can see the numbers there, 131 cases in the United States. And most of these people are in unvaccinated children, Kiran.

So, again, it sort of takes it out of the realm of the theoretical problem to a real problem, not vaccinating your kids.

CHETRY: All right. Yes, it's a complicated issue still for many people. Sanjay, thanks so much.

GUPTA: Thank you.

COSTELLO: President Obama turning up the pressure on Pakistan to deal with the advancing Taliban, as many as 500,000 people are on the run. We'll take a look inside a refugee camp. Who were the people blaming for this?

And now that his wife, Elizabeth, has made his infidelity front news again, can John Edwards ever recover politically? Or has the scandal ruined him forever?

It's 54 minutes past the hour.

(COMMERCIAL BREAK)

COSTELLO: For years, Bernard Madoff robbed investors of billions of dollars. Now the secretary who worked beside him for decades is spilling the secrets in an interview with "Vanity Fair" magazine.

Allan Chernoff though spoke with Madoff's secretary. And it must have been a fascinating conversation.

ALLAN CHERNOFF, CNN CORRESPONDENT: Yes, absolutely, Carol.

Eleanor Squillari says she was as surprised as anyone to learn the truth about Bernie Madoff, even though she worked directly for him for two decades.

(BEGIN VIDEOTAPE)

CHERNOFF (voice-over): While Bernard Madoff was running the biggest investment fraud in history, his secretary says she had no clue.

ELEANOR SQUILLARI, BERNARD MADOFF'S SECRETARY: I'm pretty devastated.

CHERNOFF: Eleanor Squillari says she's angry, too and is cooperating with the FBI as investigators try to determine who helped her former boss perpetrate the fraud.

In "Vanity Fair" she writes Bernard Madoff orchestrated his arrest by having his sons Mark and Andrew who were executives of the company turn him in.

(on camera): Many people wonder, was that his way of protecting his sons.

SQUILLARI: Well, I think that it's natural for any parent to want to protect his sons. But I believe that he protected his sons because they weren't involved. I've always known them to be professional and just good very people, and I never saw anything that would indicate that they were involved in that side of the business.

CHERNOFF: Is that not the way, though, that you probably felt about Bernie Madoff himself?

SQUILLARI: That's a good question. That's a good question. It's true. Yes.

CHERNOFF (voice-over): Madoff's wife, Ruth, had her own office at company headquarters and for many years was deeply involved in the business.

SQUILLARI: They did everything together, and they talked about everything together. So, yes, she was very involved.

CHERNOFF (on camera): To most people, it's inconceivable that his wife could not have known.

SQUILLARI: It is. And I've heard that from a lot of people, but I would not be comfortable damning somebody without having absolute proof.

CHERNOFF (voice-over): Madoff, Squillari said, was flirtatious, writing "Bernie had a roving eye, and I knew he had a habit of getting frequent massages. One time I caught him scouring the escort pages."

(on camera): It's not illogical for one to have the idea that, did Bernie Madoff ever have affairs? Any sense of that?

SQUILLARI: I'd rather not say. It's between him and his wife.

CHERNOFF (voice-over): Squillari says, most painful of all is the knowledge that her boss of 20 years stole billions from clients who had trusted him with their life savings.

SQUILLARI: I didn't know I had that many tears in me.

(END VIDEOTAPE)

CHERNOFF: She herself had invested with her boss, but withdrew the money years ago when she needed it. Bernie Madoff is in jail right now in Lower Manhattan awaiting sentencing next month when it's almost certain that he will be sent to prison for the rest of his life - Carol. COSTELLO: Unbelievable.

Thank you, Allan.

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