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AMERICAN MORNING

Gunmen Targeting Police in Pakistan; Colleagues, Friends of Judge Sotomayor Provide Character Insight; Bankruptcy May Be the Way for GM; Parents Up in Arms About Smokeless Tobacco That Melts in Your Mouth; Scientology on Trial in France; False Eyelashes Making Comeback

Aired May 27, 2009 - 06:00   ET

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


ANNOUNCER: This is CNN Breaking News.

KIRAN CHETRY, CNN ANCHOR: And good morning. Thanks so much for being with us on this AMERICAN MORNING. It's Wednesday, May 27. I'm Kiran Chetry.

T.J. HOLMES, CNN ANCHOR: And good morning to you all, I'm T.J. Holmes sitting in today for John Roberts. We're going to begin this morning with breaking news in Pakistan.

Rescue crews in Lahore searching for survivors after a well- coordinated attack. Police say gunman fired shots and hurled a grenade at police building. And then, moments later, a van packed with explosives reduced a nearby building to rubble. At least 200 people were inside the building at the time of the blast. Authorities now saying at least 23 people are dead. However, that number is expected to rise as police and rescue workers continue to look through the rubble. Hundreds more have been injured in this attack. And this attack comes as Pakistan's second largest city and troops are actually starting to pound Taliban strongholds in the Swat Valley.

Also on our agenda in the next 15 minutes, a developing story in North Korea. Blunt warning aimed at the U.S. from North Korea. North saying any attempts to stop ships carrying suspected weapons material to the country would be equal to a, quote, "declaration of war." We'll go live to the Pentagon for the latest in just moments.

Also, President Obama wants quick Senate confirmation of his Supreme Court nominee, Federal Judge Sonya Sotomayor, to replace retiring Justice David Souter. However, Republicans not on the same timeline as the president. Conservative groups are building a case against Judge Sotomayor.

CHETRY: We begin, though, with major new developments out of North Korea, including a blistering warning to America. The North now threatening a military response if the U.S. Navy or its allies stop ships suspected of carrying weapons supplies to the country.

And that's not all. For the third straight day, the North has reportedly test fired a short-range missile. And media reports out of South Korea that spy satellites have observed steam coming from a disabled nuclear plant in the North, signs that it could be back online at this hour. CNN's Barbara Starr is the only reporter live at the Pentagon early.

You know, when we talk about this threat of war, how concerned is the U.S. military this morning?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kiran, certainly they are very aware that the rhetoric from North Korea is stepping up, it appears, day-by-day. But no one really believes North Korea is absolutely looking for a confrontation.

The goal by U.S. military officials is to try and avoid one. That's why, on the reliance by the Obama administration on the diplomatic route, working through the U.N., working through the Six- Party talks to talk to North Korea and try and figure out what it is they want now is really the top priority.

As for the nuclear plant, officials certainly are aware of the reports that satellites are showing steam coming out of that plant. But it was disabled several months ago. The North Korea had been talking about restarting it. One senior U.S. official, however, overnight tells us, so far, the U.S. does not see the evidence that that is underway. That it has been restarted as a plutonium reprocessing facility. Certainly, they're watching it very closely.

If we get more on that, we're going to bring it to you - Kiran.

CHETRY: Barbara Starr for us this morning, thanks.

HOLMES: The battle lines already being drawn over President Obama's choice to replace Justice David Souter on the Supreme Court. If confirmed, Federal Appeals Court Judge Sonia Sotomayor would be the first Hispanic and only the third woman to serve on the high court.

The president singing her praises at a Democratic fundraiser last night, saying he's confident Sotomayor will be confirmed.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: She graduated at the top of her class at Princeton, editor of the law journal at Yale, prosecutor at the Manhattan D.A.'s office, corporate litigator, six years a trial judge on the U.S. District Court, her 11th year on the U.S. Court of Appeals, the second highest court in the land. Nobody can say she's not qualified to be on the Supreme Court.

(APPLAUSE)

(END VIDEO CLIP)

HOLMES: Jim Acosta joins us now live from Washington.

Jim, as we heard there, the president making his case for his nominee; conservatives building their case against her.

JIM ACOSTA, CNN CORRESPONDENT: Yes, T.J. I think the president likes his pick. What do you think?

Judge Sotomayor is said to be a big fan of the classic legal drama "Perry Mason." It was that show, Sotomayor says, that turned her attention away from Nancy Drew books to a life of practicing law. That's a god thing, because conservatives are about to put her on trial.

(BEGIN VIDEOTAPE)

JUDGE SONIA SOTOMAYOR, SUPREME COURT NOMINEE: I strive never to forget the real world consequences of my decisions on individuals, businesses, and governments.

ACOSTA (voice-over): The case before the court of public opinion: Sonia Sotomayor, President Obama's pick for the Supreme Court. Conservatives are already preparing their briefs.

WENDY LONG, JUDICIAL CONFIRMATION NETWORK: What we've seen since she's gotten on the bench is that she is very much a liberal judicial activist.

ACOSTA: Exhibit A, according to conservatives, is this 2005 panel discussion at Duke University, where Judge Sotomayor was extolling the virtues of sitting on the appellate court.

SOTOMAYOR: The Court of Appeals is where policy is made. And I know, and I know this is on tape, and I should never say that, because we don't make law. I know.

ACOSTA: Sotomayor's critics say that's judicial activism, in other words, legislating from the bench.

For exhibit B, conservatives refer back to 2001, when Sotomayor told a symposium at Berkeley, "I wonder whether by ignoring our differences as women or men of color, we do a disservice both to the law and society."

Which takes conservatives to their exhibit C, Sotomayor sided with an appellate court decision against a group of mostly white firefighters who say the City of New Haven, Connecticut, discriminated against them when it came to promotions.

Add it all up, and it's case closed for Rush Limbaugh, who's sounding a familiar battle cry.

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Do I want her to fail? Yes. Do I want her to fail to get on the court? Yes. She'd be a disaster on the court.

ACOSTA: Objection, says the White House. Sotomayor's defenders say the judge has made other statements and rulings that show she is no ideologue.

SEN. CHARLES SCHUMER (D), NEW YORK: She is a rule of law person above all. And let me say, I think this nomination process is going to be more a test of the Republican Party than of Judge Sotomayor. ACOSTA: The president points to Sotomayor's ruling that ended a baseball strike in 1995.

OBAMA: Judge Sotomayor saved baseball.

(LAUGHTER)

(APPLAUSE)

TOM GOLDSTEIN, SCOTUS BLOG: It's a very balanced record. Conservatives are going to call her an activist just the way liberal groups called the last nominees activists. It's just what they do. But I think the record doesn't bear it out.

(END VIDEOTAPE)

ACOSTA: Republicans have had a chance to weigh in on Judge Sotomayor in the past. Back in 1998, several GOP senators voted in favor of elevating Sotomayor to the Court of Appeals. Her nomination had been held up for a year. The reason? Some conservatives fear she would one day make it to the Supreme Court.

And T.J., one thing we should mention - RNC chairman Michael Steele is already warning Republicans, be careful with this nomination. They could alienate Hispanic voters - T.J.

HOLMES: Yes, a lot of people saying she is going to be a tough one to attack, a constant force in Washington.

Thank you so much.

And Judge Sotomayor's Supreme Court nomination getting a lot of response from you on our show hotline, where the viewers mix on whether the president's historic choice was the right one.

(BEGIN AUDIO CLIP)

CALLER: I say she's a great pick. I'm for a female. We need some honesty in our country right now, because we have a lot of dishonesty, and I'm tired of it.

CALLER: The only reason Sotomayor was thought of is because she's a Hispanic woman, and that is wrong credentials for being on the high court.

CALLER: This is a proud day for Puerto Ricans and the United States. It's time to - time the stereotypes of Puerto Ricans are put to rest. And Sonia Sotomayor is leading the way.

(END AUDIO CLIP)

HOLMES: Well, thanks to all of you who have dialed in to us.

And also, we would love to hear from a lot more of you out there, of course, on this topic or anything else that's on your mind. You can call our show hotline 877-MY-AMFIX. We'll try to get some of your calls on the air.

CHETRY: Also new this morning, California's highest court upholding a ban on same-sex marriage. The fight though, appears to be far from over. Proposition 8 could soon head to federal court. Two of the nation's top litigators have filed a federal lawsuit. They coincidentally found themselves on the opposite sides of the Bush versus Gore recount lawsuit back in 2000. They say that the ban on same-sex marriage violates U.S. constitutional guarantees in equal protection and due process.

An FBI wiretap reveals that Illinois Senator Roland Burris promised to, quote, "personally do something for Rod Blagojevich's campaign." The taped discussion came while Blagojevich was still governor, but before Burris became senator. The transcript was released as part of ethics investigation into how Burris got President Obama's vacant Senate seat. It contradicts Burris' claim that he never discussed the Senate seat with then Governor Blagojevich or any of his representatives. Blagojevich is charged with scheming to sell that seat.

And this morning the confirmation battle begins over President Obama's first Supreme Court pick. Coming up, we're going to talk with a woman who's taught law classes with Judge Sonia Sotomayor. We'll also ask her if she thinks the judge is well-suited to serve the nation's highest court.

It's eight minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: All right, it's 11 minutes past the hour right now. Welcome back to the Most News in the Morning. A quick check of some of the other stories new this morning.

Two more New Yorkers infected with swine flu have died. One was a 42-year-old woman from Queens, the other a 34-year-old man from Brooklyn. The city's health department says both had other health problems, and it's still not clear if the H1N1 virus actually killed them. But it does bring the total number of deaths to four in New York since this outbreak began.

The 13-year-old cancer patient who fled with his mother to avoid medical treatment will begin court-ordered chemotherapy tomorrow. At a hearing in Minnesota, the judge said that Daniel Hauser can remain with his parents, but that his mother and father must comply with the doctor's treatment schedule. Doctors say Hauser's tumor has actually grown since he underwent an initial course of chemotherapy back in February. They say it's now pressing against his trachea and chest wall.

The Pentagon says 5 percent of detainees released from Guantanamo Bay have joined or rejoined the fight against the U.S. and its allies. The latest Defense Department data also shows another 9 percent are suspected of participating in terrorist activities since being freed of Gitmo. The Obama administration has been wrestling with the question of where to send detainees once Gitmo is closed - T.J. HOLMES: Well, Kiran, we are learning more about Judge Sonia Sotomayor, who IS hoping to be the first Hispanic to serve on the Supreme Court. President Obama touting her extraordinary legal career and impressive life story.

Joining us to talk about the person behind it, Sergio Sotolongo, who went to high school and college with Sonia Sotomayor, and also Ellen Chapnick, Dean of the Social Justice program at Columbia Law School and a colleague of Judge Sotomayor.

Thank you both for being here. Just greeted you when you came into the studio. You all had these big smiles on your face. There's so much pride here.

(LAUGHTER)

But Ellen, I will start with you. You know her personally, and she's a friend to you, but also as a colleague, and you know her professionally. What do you see of her professionally that you think makes her perfectly suited for this new possibly role?

ELLEN CHAPNICK, DEAN, SOCIAL JUSTICE PROGRAM, COLUMBIA LAW SCHOOL: That's right. We co-teached a class together, co-taught a class together, an appellate court externship where students work in chambers and took a seminar primarily taught by Judge Sotomayor. And it's just her passion for the law which she conveys to the students, and her great belief in the court as a problem solver.

And her giving of herself. She always had time for her students. She always listened to them with great care, reflected on what they had to say and then responded. I know she does that with students. You can see her doing that with litigants before the Supreme Court.

HOLMES: Well, Sergio, I'll ask you. There's much that's been made about her personal story. You can relate to it and you know it, because that's part of your story as well. You came from the some of those same humble begins.

So do you hope she will take some of the humble beginnings to the court with her if she is so confirmed? And is that a good thing?

SERGIO SOTOLONGO, HIGH SCHOOL/COLLEGE FRIEND OF JUDGE SOTOMAYOR: Absolutely. I think that she's going to be someone that brings all of those life expectations and lessons to her on the bench.

She's someone who is compassionate, humble, someone who really is empathetic. I remember her in high school really thinking about various causes.

She's also someone who is a mentor. And I think all of the newscasts yesterday really resonated that with respect to what people thought of her. And I think she's going to be terrific.

HOLMES: And Ellen, he kind of hit on a point you were making as well, how she has dealt with students and that passion for the students, and always had time for them. Do you think that is a direct result of where she's from and that is just who she is?

CHAPNICK: I think it is. I mean, I think she's very aware of the fact that education has played an important role in her life.

I mean, her mother, as everybody learned yesterday who didn't already know it - and if you know Sonia, you have heard a lot about her mother. Her mother is the role model of mentors of mentors. And I think, between learning about the role of education, seeing her mother's role in her own life, she has this deep desire to pass it on to other people.

HOLMES: And I'll ask you both this question. Knowing her the way you do, knowing her personally, knowing her from the beginning, also from professional life, does it worry you now?

And do you hate - because you know what's coming. You know those who do oppose her being nominated are going to be coming after her now. What do you think of having to see your friend and colleague having to go through what she's about to have to go through?

SOTOLONGO: Sure, I'll start.

There's no question that she is going to be vetted, as she should be, as anyone should be.

HOLMES: Vetting is one thing. The administration vetted her. This is something else that's coming.

SOTOLONGO: I take your point on that.

But I think that what gives me comfort is this is someone that has a tremendous resume. Intellectually, I think, she's more than capable of handling herself. And I don't think there's going to be a problem in that regard.

CHAPNICK: I think this is going to welcome it. I think a lot of people are saying a lot of things that haven't looked at her record, that haven't gotten to know her. My mama tiger comes out and I want them just to be nice to her.

But that's really misplaced, you know. She's going to stand her ground and she's going to welcome scrutiny, I think.

HOLMES: And I want to end on this. You want to tell us something we don't know about her. And the only thing kind of we heard personally was that she's a Yankees fan yesterday. Tell us something we don't know about her. What does she do? What does she like to do? In her off time, what does she do?

SOTOLONGO: Well, I mean, I remember her being a little bit reserved, quiet, and introspective, likes to read, and someone who really doesn't draw attention to her herself that much.

I will give you one anecdote. At Princeton, the greatest prize that is bestowed on an undergraduates is called the Palm (ph) prize, which is given to the undergraduate who achieves the highest GPA. As a friend, I didn't know that she had won the Palm (ph) prize until I read it in the school paper. So I think it says quite a lot about her as a person.

HOLMES: All right. Well, Sergio Sotolongo, Ellen Chapnick, friends from the neighborhood and colleagues, I appreciate you all coming this morning and letting us know a little something more about this Judge Sotomayor. Thank you both.

CHAPNICK: Thank you. It's been a pleasure.

HOLMES: All right - Kiran.

CHETRY: Well, Christine Romans is here. She's minding her business. And it's a big day for GM, possibly a turning point as this company struggles to stay afloat.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's right, Kiran. Every minute, GM gets closer to being run by the government on your tax money, potentially a lot more of your money at stake here. But what will this mean for your tax dollars, for your job, for your car, and for your investment?

And we also have "Roman's Numeral" this morning. The number is 92. We want you to venture a guess about what 92 - that 92 percent - has to do with General Motors.

CHETRY: Twitter.com/amfix. We'll be back in just a couple minutes.

(COMMERCIAL BREAK)

CHETRY: It's 20 minutes past the hour now. Christine Romans joins us.

And, boy, it looks like GM is unfortunately creeping closer and closer to the inevitable, which looks like bankruptcy.

ROMANS: It really is.

And a few people have coined this phrase, "Government Motors." It eventually made it into "The New York Times" that it used that some employees would call GM and said GM stood for "Generous Motors." But now it will be known as "Government Motors."

And "The New York Times" and other publications saying that, in the end, taxpayers could own 70 percent of this company. Think of that, the United States government essentially running General Motors if a bankruptcy happens, the company restructures, and it moves on after that.

What would a GM bankruptcy mean for you? The clock is ticking here.

Bondholders, people who own big stakes in this company have decided they don't want to take the government offer that is on the table. And so that's news as the company is moving ever closer to bankruptcy. It could mean more taxpayer money.

Some reports have $30 billion to $50 billion more of your money would be needed. More job losses - there have already been big cuts from the UAW and the Canadian Autoworkers. Still waiting to see which plants, which shifts, what kind of job cuts could be coming. Suppliers and dealers in distress, waiting to find out what the new GM would look like, and would there be money flowing in the supply lines?

And I want to be very clear about this. Investments in GM stock would be wiped out. so stop the emailing and Twittering, about, of, if I buy GM stock now, wow, that would be great when the company reemerges from bankruptcy.

No. The stock becomes worthless. The debt holders are supposed to be paid back first. That's why the debt holders have been holding out and would like to see something better than the government and the company are offering them at this point, because in bankruptcy, debt holders are supposed to be paid back first.

But stockholders get wiped out. So I want you to be very clear - if you have GM stock right now, a bankruptcy will mean zero for you on that front.

And you might be a debt holder and you don't even know it. It could be in your 401(k). GM bonds are things that pension funds and 401k, mutual funds all invested in. So there's a very big, diverse group of people who are owed $27 billion by this company. And that could be us.

And that's what's holding this up here, because that group of people would like to see more than just pennies on the dollar.

CHETRY: Can you explain to people when we say what a GM bankruptcy means more taxpayer money? Does the government have to get involved at this point, regardless of whether it's considered a bailout or not due to the very nature of it going bankrupt?

ROMANS: Yes. The government has said it is going to - it is going to support this industry, and it is going to try to move.

I mean, the government is directing everything that's happening here right now too with this management team. There is task force - the U.S. Auto Task Force. All of this is being done with the Obama administration, and we're moving closer and closer to a bankruptcy filing here.

CHETRY: All right, our "Roman's Numeral" goes along with GM today. It's a story, and it's the number behind a story about your money. So Christine Roman's numeral today is 92 percent.

We had a couple of good guesses from our Twitter people. Justin A. Reeve, "Ninety-two percent is how much of GM would be owned by the state or the government."

Horsefly 1013 guessed, "The percent of GM bondholders needed to accept stock for them to stay viable." But Lovell 22 seems to have gotten it, maybe?

ROMANS: Let's see. Yes. Lovell 22 says, "GMs stock lost 92 percent of its value."

That's true. GM stock is down 92 percent over the past year. So if you were a GM stockholder, you believed in this company, you believed in its products, you said, "I've known this company my whole life. No way can the company that was once the biggest industrial giant in the world go bankrupt," your stock is down 92 percent. So that's incredibly important to people who are stockholders in this company.

And just one final point on GM. GM is the company that invented auto financing. This is the company that said when the GIs were coming back from World War II, and then the baby-boomers were born and growing up, this is the company that reshaped how we buy things. It started out a financing - and that's why home financing got so popular, because they said, look, we can finance a car, we'll finance a home.

For much of the last 100 years, the last century, the way we live in this country is different because of this country, and this company is facing bankruptcy.

HOLMES: Some say they aren't being innovative enough, but they were in the beginning.

ROMANS: That's right, that's right.

HOLMES: They didn't change with the times.

ROMANS: That's right.

HOLMES: Christine Romans, thank you, as always.

ROMANS: You're welcome.

HOLMES: We'll see you again shortly.

And while the Obama administration has gone to extremes to try and fix this economy by borrowing more and more money, said really the best strategy for an economic turnaround. Texas Republican Ron Paul, guess what he says; no. The congressman, there he is, is going to join us live in just a moment.

Good morning to you, sir. We'll see you shortly.

Also, forget about the cigarettes. Today's "Marlboro Man" may instead opt for smokeless tobacco that melts in your mouth. And that has some parents right now raising some serious questions and concerns. We'll tell you about the latest.

It's 25 minutes past the hour.

(COMMERCIAL BREAK) HOLMES: That just ain't right. Fred Flintstone used to pitch cigarettes.

Welcome back here to the Most News in the Morning.

And yes, we have come a long way, haven't we, since your favorite cartoon characters were also cigarette pitchmen. But this morning, tobacco companies are facing new criticism, accused of targeting your kids, not necessarily with ads, but with the new types of tobacco products.

CNN's Carol Costello live for us in Washington.

I had no idea. I just used to watch Fred Flintstone. I didn't know he was out there pimping cigarette at some point.

CAROL COSTELLO, CNN CORRESPONDENT: Nobody is pimping cigarettes right now. Most cigarette advertising is illegal, right?

But R.J. Reynolds is testing three new products in Ohio, Oregon, and Indiana. Critics call them "tobacco lollipops," minty tobacco breath strips designed with one thing in mind, to get your kids hooked on nicotine.

R.J. Reynolds denies that, saying its new smokeless products are for adults, and they're catching on.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): This YouTuber is joking. He's actually demonstrating something called "Snus," tea bags filled with mint flavored tobacco. They fit neatly between your teeth and gums.

UNIDENTIFIED MALE: I can't smoke a pipe in class or at work, but, heck, I can throw in one of these at work. It's convenient.

COSTELLO: And no need to spit. The tobacco stays in the bag.

Tobacco companies say snooze has become so popular, they're taking the next step, totally dissolvable tobacco for traditional smokers that will solve all kinds of problems.

TOMMY PAYNE, R.J. REYNOLDS: They don't have second hand smoke. They won't have a liter problem. The product actually dissolves in your mouth as opposed to having to spit or extract something, a pouch from your mouth like other smokeless products.

COSTELLO: R.J. Reynolds will soon test three new products - Camel sticks that dissolve as you suck them, minty tobacco strips that look like breath strips, and orgs - flavored, dissolvable tablets that some say look and taste exactly like candy.

And there's the thing. Critics say R.J. Reynolds is up to its old tricks, doing what it did with Joe Camel, marketing not to adult smokers but to smoker wannabes. UNIDENTIFIED MALE: Really what you're doing with kids is, actually, it's kind of like a gateway drug. You're getting them addicted to nicotine, which then leads them to possibly wanting to do other things.

COSTELLO: And according to the Indiana Poison Control Center, just one camel dissolvable delivers up to 300 percent of the nicotine found in just one cigarette. Take too many, and nicotine poisoning might set in, and you could possibly develop oral cancer.

PAYNE: They're not candy. They're tobacco products.

COSTELLO: R.J. Reynolds says their new dissolvables have warning labels, and it's illegal for kids to buy them. And, yes, they're not completely safe. But they're for adults.

PAYNE: It's just when compared to smoking and the impact that it has on our society, these products at least should be made available for those who can't or won't quit.

(END VIDEOTAPE)

COSTELLO: But Oregon Senator Jeff Merkley and others are now pushing to bill, to regulate these dissolvable products. If passed, that bill would allow the FDA to regulate how dissolvables are marketed. The bill will likely pop up in the Senate in a few weeks. And, T.J., we'll keep an eye on it.

HOLMES: I know you will. Carol Costello for us this morning. Thank you so much - Kiran.

CHETRY: All right. Well, right now, it's 30 minutes past the hour.

We have breaking news that we're following this morning. Pakistan's biggest city is on alert this morning after an attack in Lahore killed at least 23 people. Early this morning, gunmen hurling grenades and a van packed with explosives blew through a - broke through a police barricade. Seconds later, that van exploded, bringing down building next to a police headquarters. At least, 200 hundred people were in that building when it collapsed. Emergency crews are still searching for survivors this morning. So far, no one has taken responsibility. The Taliban, though, has threatened revenge for Pakistan's crackdown on militant fighters in the Swat Valley.

Police in Phoenix are calling the death of Mike Tyson's 4-year- old daughter a tragic accident. Exodus Tyson died Tuesday, a day after her neck got tangled in a cable that was attached to a treadmill in the family's home. She was found unconscious and attempts to revive her failed.

Well, if you're feeling better about the economy, you're in good company. More than 90 percent of leading economists say they see the recession ending this year. They were surveyed by the National Association for Business Economics. These expert forecasters say they expect a moderate recovery, but unemployment, often known as a lagging indicator, continuing to rise.

And in a recent C-SPAN interview, President Obama was asked about $1.7 trillion debt the government has racked up and well within $11 trillion deficit. And he had this sobering response - we're out of money.

One member of Congress has been sounding the alarm on out of control spending. He is Texas Republican Ron Paul and he joins us this morning from Clute, Texas.

Congressman, as always, it's good to talk to you this morning.

REP. RON PAUL (R), TEXAS: Good morning. Nice to be with you.

CHETRY: So President Obama says that in the short term, the government needs to spend this money to salvage the overall system. Do you agree that short-term spending is OK, so long as it's not protracted and the end goal is to reduce our debt and deficit?

PAUL: But he contradicts himself. He wants to spend more money, but he admits we don't have any money. So, the question is, where does he get the money? Well, we can't tax the people anymore. They're overtaxed and the economy is weak.

The common sensible thing to do is to cut spending, but nobody wants to cut spending. Everybody gets everything that they want in Washington, whether it's overseas spending or any welfare spending, it's endless. Just this week, the president promised $100 billion to the IMF and he says we don't have any money? I mean, it makes no sense. It's just absurd.

The people are outraged over this. They can't figure out what we're doing in Washington. And I go there on a regular basis. I can't figure out what they're doing. They seem to live in a different world. They're not living with reality. To get out of bankruptcy when you don't have any money, the goal is to spend more money, run up more debt? Makes no sense whatsoever.

CHETRY: Does Congress have the ability and the will to try to put some strings on that? I mean, as you guys talk about these budgets, are there timelines in place so that it's not just rhetoric but that there is an actual process of showing how we're going to eventually try to make sure that pay this money back?

PAUL: Yes, they have the absolute responsibility. But they also ought to have realized what history shows that once you get a certain amount of debt run up by a government, it's never paid back. And we're past that point. Debt is always liquidated. The only question is how you liquidate debt.

Now, General Motors is going through a liquidation of debt. That's the way you should do it. Governments don't do it that way. They liquidate debt by devaluing the currency and paying back their debt with money that has no value. That's what they're working on. They want inflation. They want to be able to take this huge amount of debt. And if we owe $11 trillion and you have 50 percent inflation, right, you know, you're down to $5.5 trillion. That's what they're working on. They're begging and pleading for inflation.

CHETRY: The interesting thing, I mean, you've talked a lot about your concerns over the value of the dollar and the fact that the Fed just can print money and you call the whole notion absurd. Yesterday, we saw a little bit of a bounce in the dollar. People still want our debt across the world.

PAUL: Yes, that is true because everybody else has a fiat currency, too. So when the dollar goes down, it doesn't necessarily mean the yen and the euro is going to do well. It means that prices may go up and will likely go up in all currencies. But once they panic and get out of the dollar - so far, they're going to the dollar. That's right. The financial system has collapsed. The house of cards has come unglued. And that's why we're in such trouble.

So the dollar fiat standard has broken down. But, the dollar, people won't hold dollars, they will buy treasury bills. Even China is buying them. They're between a rock and a hard place because they don't want to destroy the dollar.

But, eventually, it has to happen, because you can't create $2 trillion in one year and run a deficit of that magnitude and not expect the value of the dollar go down. And it's coming soon. It's coming soon, maybe within a year or two or three, but it will come and it will be a lot worse than what we've just gone through. So this reprieve that we're having...

(CROSSTALK)

CHETRY: Right.

PAUL: OK.

CHETRY: No, I know what you're saying. But what about some of these assessments that we are seeing some signs of life in the economy as we just talked about before we brought you on. Some of the leading economists say that they see the end of this recession coming sometime in 2009. Perhaps does that support the notion that maybe some of this spending to get the economy back on track has been working?

PAUL: Well, I think a lot of people believe that. But I think they're totally dreaming about it. I mean, if you can look at spurts in the 1930s but it usually just led to bigger trouble down the road. By 1939, unemployment was like 18 percent. So it never improved with all this interference in the '30s. And we're doing the same thing again.

But I think it's a much bigger problem that we have this time. So, because you have these bleeps, people are always hopeful. But the conditions have not changed. We have not liquidated the debt. We have not liquidated the amount of investment. We still have 19 million uninhabited houses up for sale. And we're trying to prop up housing prices and we're trying to get people to build more houses. So, it makes no sense.

Even with bankruptcies. General Motors should have been bankrupt a year ago and it would have been cleaned up. But now we're involved in the bankruptcy. It has become politicized. Our government is dictating what the law should state. The court should deal with this. We shouldn't decide which bondholders get the benefits.

So it is a mess that we've created and we believe it's a lack of regulations that we need. But, believe me, free enterprise and sound money did not bring on this problem. Free enterprise. It was interventionism, corporatism and crony capitalism. This is what gave us our problem.

So we're going to remain in this mess until we realize what we need is more freedom, sounder money and get the government out of the way and let the debt be liquidated and get rid of the mal-investment. We don't need more of the same that created our problem.

CHETRY: All right. Well, Congressman Ron Paul, it's great to get your point of view and your take on things. Thanks for being with us this morning.

PAUL: Thank you.

HOLMES: He always know where he stands when he wraps up an interview.

We're coming up here. Something is making a comeback - the must- have beauty accessory. I did not pitch this story, folks. So, our Lola Ogunnaike taking a closer look at the growing trend of fake eyelashes.

It's 38 minutes past the hour.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): It starts with a single balloon. Then grows and grows and grows till eventually it looks like this. And this balloon sculpture to describe the so- real sea creatures or whimsical toys. But their meaning is in the eye of the beholder. And they all come from the creative mind of artist Jason Hackenwerth.

JASON HACKENWERTH, ARTIST: My job is to make interesting and fun things happen, and my life is, you know, about doing that. It's the most wonderful experience.

TUCHMAN: He started five years ago in the New York City subway.

HACKENWERTH: When people come around the corner and see that, they would just light up. It was so obvious I was on to something really beautiful.

TUCHMAN: And he's been doing it ever since, even when it meant sacrifice.

HACKENWERTH: Right after New Year's Eve, I was out in Times Square trying to earn 60 bucks for some grocery and laundry money. That's for sure. Times were tough. TUCHMAN: That didn't stop him taking simple balloons and turning them into something we've never seen before. Hackenwerth arts have been shown in galleries and museums all over the world.

HACKENWERTH: I would like to inspire young people to believe that anything is possible. Hopefully, you have to - you have to attempt the absurd to achieve the impossible. And that's part of what's happening here.

TUCHMAN: Gary Tuchman, CNN.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

CHETRY: Something is wrong with that picture. We just showed a control room shot.

HOLMES: Yes.

CHETRY: And one of our producers, Brian, this is his favorite song...

HOLMES: This is his jam.

CHETRY: He's sitting there stone faced.

HOLMES: Oh, I'm sure he loves that. You just told the world that this is his jam.

CHETRY: Girls love him.

HOLMES: Well, while we're playing it, we love it. Though, we should we going to video as well.

But when I first came to CNN, Kiran, and came to the makeup rooms, I was a little terrified, stupefied, by what I saw, which was these potpourri of eyelashes that were sitting out. You had an assortment to choose from.

CHETRY: That's right.

HOLMES: I haven't been exposed to this before.

CHETRY: You could go very, very subtle with just a short little couple of eyelashes placed on the side. Or you can go crazy - you know, woop, Betty Boop.

HOLMES: I had no idea about this. So for those of you who didn't know about this either, but apparently false eyelashes were a thing of the '60s, but not anymore. The look is enjoying a real renaissance these days.

Lola Ogunnaike with the story.

(BEGIN VIDEOTAPE) LINDA WELLS, EDITOR-IN-CHIEF, "ALLURE" MAGAZINE: Every woman wants her eyes to look bigger and eyelashes - false eyelashes is the way to get there.

UNIDENTIFIED FEMALE: I'm wearing false eyelashes and I'm wearing them because my best friend wears them, and I'm a little envious.

UNIDENTIFIED FEMALE: You just get very nice compliments. Sometimes, it can relax your mind.

LOLA OGUNNAIKE, CNN ENTERTAINMENT CORRESPONDENT (voice-over): The false eyelashes business has grown dramatically in recent years. To meet customer demand, Sephora, the makeup emporium, sold nearly 100 different types.

UNIDENTIFIED FEMALE: We have a different variety for every type of eye.

OGUNNAIKE: And MAC Cosmetics can't keep theirs in stores.

BIANCA ALEXANDER, DIRECTOR, GLOBAL MAKEUP ARTISTRY, MAC: In the past year alone, at MAC, we used to just have seven types of lashes. Today, we have 17. Just at MAC alone, we're up 8 percent, which is pretty unbelievable. And if you could believe it or not, every 15 seconds, a woman walks out of a MAC store with a pair of lashes.

OGUNNAIKE: Divas like Jennifer Lopez, Oprah Winfrey and Kim Kardashian all proudly sport with fake flutters. And everyday women looking for a little extra are scooping them up, too.

WELLS: Women feel more comfortable wearing false eyelashes because they look very natural. And they're also discovering that celebrities wear them on the red carpet.

OGUNNAIKE: Business is booming at Ebenezer, an eyelash extension salon in Manhattan, where customers go from short and sparse to long and lushes in less than an hour.

Here, individual lashes are glued on with surgical precision. Customers say $90 is a small price to pay for glamorous peepers.

UNIDENTIFIED FEMALE: Sure, it's expensive. So instead, I'll do my own nails, instead of getting a manicure and I'll get my lashes done.

OGUNNAIKE: I decided it was time to pump up my eye volume.

(on camera): Daytime - party time.

They're huge!

I feel like if you stand close enough, I can fan you with my eyelashes.

UNIDENTIFIED FEMALE: You probably could.

(END VIDEOTAPE)

CHETRY: Windshield wipers on a pinch, wow. I was just going to say a little secret, you know, for our viewers this morning. This is the eyelash of choice for AMERICAN MORNING. Lola has got them on. Everyone here has got them on. And these are all the various instruments it takes to put them on. This is why T.J. was terrified and went running.

OGUNNAIKE: And what's so unfair is that men are always born with great lashes.

CHETRY: Of course.

OGUNNAIKE: I mean, look at T.J. Those aren't eyelash extensions, are they?

CHETRY: Long - he's got beautiful, long eyelashes.

OGUNNAIKE: You know, the great thing, Kiran, all these new eyelash products, two coming out. There's that new one, Latisse, apparently if you apply it every evening, it's supposed to help your eyelashes grow in less than four weeks.

CHETRY: See that?

OGUNNAIKE: There's also this new battery-powered mascara that was all of the rave last year. And now it's coming to Target and CVS, and it's only going to be $14.99.

CHETRY: Tricks to the trade. Women are au naturale. Just know that, T.J.

HOLMES: Should I be here?

OGUNNAIKE: Give it a week, T.J.

HOLMES: I'm not giving up anything. Lola. Thank you.

CHETRY: Thanks, Lola.

OGUNNAIKE: You're welcome.

CHETRY: Still ahead, the Church of Scientology on trial this morning, facing millions of dollars in fines. We're going to tell you what the church is accused of and why it may be forced out of France.

It's 46 minutes past the hour.

(COMMERCIAL BREAK)

HOLMES: Ah, good morning to my hometown of Atlanta, Georgia where we are living the good life. Down there, it's going to be about 66 degrees right about now. Going to get to 81, thunderstorms. Though, hopefully, they'll off in time for me to land home safely today, Kiran.

CHETRY: You're leaving us?

HOLMES: Yes. You just scared me away with the whole eyelashes thing a minute ago.

CHETRY: Oh, you'll be back. You'll be back.

Well, it's 50 minutes past the hour.

We fast forward through the stories that will be making news later today.

President Obama will again be touting his choice for the next Supreme Court justice, Sonia Sotomayor. At 10:05 p.m. Eastern Time, he'll attend the Democratic - it is going to be - no, maybe it is p.m. because it's going to be in Los Angeles.

At 12:00 noon Eastern Time, Vice President Joe Biden will deliver the commencement address at the Air Force Academy in Colorado Springs. It's Biden's third commencement speech this season. He also spoke to graduates at Syracuse University as well as Wake Forest.

And at 1:15 p.m. Eastern, they'll be dusting off the dictionaries. It's the 2009 National Spelling Bee. It begins in Washington. There are nearly 300 spellers. They range in age from nine to 15, and they'll be competing for the spelling bee title and more than $40,000 in cash and prizes.

Good luck to them.

They spell some words.

HOLMES: Yes. And that is always a blast to see those kids' reactions to that - to that party. So, looking forward to seeing.

Also, coming up here, the Church of Scientology facing a murky future in France. This morning, the church and some of its members on trial. Details in the ground-breaking case that could lead to a ban on the church.

Also, cyber-bullying hits YouTube. The classmates of this little girl you see there using the Internet to show their video on how to kill Piper. But how did the school and the police react. Did they do enough? You'll hear from the little girl and her mother.

It is 51 minutes past the hour.

(COMMERCIAL BREAK)

HOLMES: This morning, the Church of Scientology under fire in France. Right now the church and several leaders are on trial accused of fraud. Well, Scientology is a recognized religion in the U.S. It's considered a sect in France.

And as Jim Bittermann now reports, this is not the first time it's faced strong opposition in France.

(BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN SENIOR EUROPEAN CORRESPONDENT (voice-over): For the second time in six years, Scientology was back in court at the Paris Palace of Justice. And just like the previous trial, during what's the organization was found not guilty of fraud, outside the courtroom, the halls were filled with its supporters and detractors, including a pair of comedians bent on mocking Scientology and its believers.

But no one is joking about the charges. The organization is once again charged with fraud and the misuse of pharmaceutical medications, charged specifically with pressuring two women to hand over tens of thousands of Euros in exchange of what was called purification treatments of intensive exercise and large doses of vitamins.

A lawyer for one of the alleged victims claim that there would have been more plaintiffs in the case, but that the organization paid them off and threatened them as they continue to press charges. And the lawyer called the atmosphere surrounding the trial menacing and disgraceful.

OLIVIER MORICE, PLAINTIFF'S LAWYER (through translator): No one will intimidate me, and no one will prevent me from denouncing the Scientology from saying that it's dangerous sect, from saying that it's methods are intolerable.

BITTERMANN: As in previous cases, Scientology supporters were out in force denying the charges as persecution and a violation of human rights and the French constitution.

Also pointing out that for the two people who brought the case to court, there are 45,000 believers in Scientology in France.

A defense lawyer said the first to the two alleged victims to testify clearly joined the organization and contributed to it of her own free will. And that his case would center on the fact that no one is being coerced in doing anything they don't want to do.

PATRICK MAISONNEUVE, SCIENTOLOGY LAWYER (through translator): During the period in question, this person was free, conscious and consenting when she in fact gave money to the Church of Scientology because it was her choice. Therefore, we are a long way from fraud.

BITTERMANN: A judge said it was not for the court to decide social questions, that it will concentrate only on whether Scientology's methods constituted organized fraud.

(on camera): The trial will continue here until June 17th. If the court should render a decision against Scientology, the organization could be shut down in France. But it's a decision that would almost certainly be appealed.

Jim Bittermann, CNN, Paris.

(END VIDEOTAPE) CHETRY: And still ahead, California Supreme Court upholds Proposition 8 as the state's ban on same-sex marriage. It's already probably going to go right to appeals. What the ruling means for thousands of gay couples who just got married, and also the next step in the fight to overturn that ban.

(COMMERCIAL BREAK)

CHETRY: Coming up on a minute before the top of the hour. Rob Marciano is keeping an eye on the forecast.

It certainly doesn't feel like almost June in many parts of the country.

(WEATHER REPORT)