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American Morning
U.S. Increases Alert Level on North Korea Threat; General Motors Nearing Bankruptcy; Burris Defends His Remarks on Audiotape; Gulf Stream Academy Under Fire for Pilot Training; Maryland Teacher and Students Quarantined in China
Aired May 28, 2009 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALINA CHO, CNN ANCHOR: Just crossing the top of the hour. Good morning, everybody. I'm Alina Cho along with Rob Marciano. John and Kiran have the morning off.
So glad you're with us on AMERICAN MORNING.
ROB MARCIANO, CNN ANCHOR: Here's a quick check of the stories that are topping our agenda that we're going to be breaking down for you in the next 15 minutes.
President Obama saying the country has come back from the brink of financial disaster. So, is it really safe to breathe a sigh of relief? The CNN money team is breaking down what this means for your bottom line.
And a senior White House officials now confirming there's been increased activity at North Korea's main nuclear plant, including the restarting of generators. Secretary of State Hillary Clinton is warning North Koreans, quote, "There are consequences to such actions."
We're live from the Pentagon straight ahead.
And under quarantine in China. Twenty-one students and three teachers from Maryland are being confined to their hotel rooms by Chinese officials over fears they were exposed to swine flu on their flight to China. CNN has reached out for Beijing for comment, but so far there has been no response.
And we begin this hour with news about issue number one -- the economy and your money this morning. President Obama saying the country has stepped back from the brink of disaster. His message falling in line with 45 of the country's top economic minds. Their new report predicting the recession will end this year. But the president's urging caution saying this is only the beginning of a real recovery.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When you look at the economy right now, I think it's safe to say that we have stepped back from the brink, that there is some calm that didn't exist before. Our challenge is not just to be satisfied with the status quo prior to this extraordinary crisis, but it's rather to move the country forward and to -- to bring back that sense of our ability to mobilize and accomplish big things. And to see if we can move this economy so it's not a function of bubble and bust.
It's not a matter of us maxing out on credit cards and overleveraging our banks and creating a new bubble to replace the housing bubble. But it's rather creating an environment in which we can have slow, steady progress and a foundation for economic growth that is sustainable.
(END VIDEO CLIP)
MARCIANO: So is the worst really behind us?
Christine Romans is here now with some of the answers. I mean, it's just getting the pompoms here and doing some cheerleading.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: He's been pretty consistent. The view from the White House is they're using this crisis to try to make some big important investments into health care, into green technology and the like to try to fix some of our problems so that when we get out of this, the economy will be better positioned.
And the view here, remember on April 10th when he talked about glimmers of hope, that the view here is that the dust has settled and people are starting to make real rational decisions again. They're not making decisions out of panic.
So that's the view from the White House and from many economists, frankly, and from consumers who just this week we got this consumer confidence number that showed that they were more confident now than they have been at any time since that big collapse of Lehman Brothers. Still a lot of work to go and frankly, they're not feeling better. They think they're going to feel better.
It's their expectation that things are going to turn around. But for some reason, and it could be rhetoric from the White House, it could be what we're hearing from economists. It could be we're just sick and tired of having an economy that's so weak, people are starting to calm down a little bit.
CHO: Yes. I mean, I talked to a lot of people who say, I'm just sick of it, you know? I'm going to just get out there.
MARCIANO: Yes. Optimism is great. But, you know, unemployment is expected to rise.
ROMANS: Right.
MARCIANO: We've got GM likely filing for bankruptcy.
ROMANS: That's right.
MARCIANO: I mean, you know, what do we really expect?
ROMANS: Well, the reality check for this White House, the risk is it's a false dawn. And then you look back and you say the president was talking about glimmers of hope.
We're stepping back from the brink, and we're on the brink again, or we've gone over the brink. You're going to have maybe two million at least more foreclosures over the next year. You're going to have millions more people lose their jobs.
You're going to have -- mortgage rates are rising, by the way. It's something that the fed has been very carefully trying to do, keep mortgage rates and borrowing costs down. But borrowing costs are going up? And why? Because the rest of the world is concerned about all this money we're spending that we don't have.
CHO: Right.
ROMANS: They're worried that we're digging a hole in debt. It's going to spike inflation and hurt our dollar eventually and that could be bad for the U.S. So there are risks out there.
And the president has been careful, I think, when he talks about, you know, stepping back from the brink. It's always prefaced by we have a lot of work to do. And he's right.
MARCIANO: And the need to be patient is certainly up there.
CHO: And he said from the beginning, you know, things might not get done in the first month, the first 100 days, the first term, for that matter. So, you know, it might take some time.
MARCIANO: This is America. We want it done now, yesterday. Let's get on it.
ROMANS: Exactly.
CHO: Christine, thank you.
From hopes to dire straits, General Motors is all but certain to file for Chapter 11 bankruptcy by Monday. GM's bondholders rejected a swap of 10 percent of the company's stock for $27 billion in unsecured debt, and that's likely the final nail in the coffin.
Meanwhile, Chrysler will continue to make its case to a bankruptcy judge that a merger with Italy's Fiat is the best way to avoid all-out liquidation.
Stay with us. Just ahead, we're going to be talking with Neal Boudette. He is an auto industry expert and the "Wall Street Journal's" Detroit bureau chief. That's the auto city, the motor city. We're going to be talking about what a new restructured GM means to you if you're going to go out there and buy a car. That's less than ten minutes away right here on the "Most News in the Morning."
New developments now in the tense standoff with North Korea. A top administration official confirms to CNN that there has been increased activity at the secretive Yongbyon nuclear facility. There are also unconfirmed reports that U.S. spy satellites detected activity coming from the plant.
Plus, American and South Korean troops just across the border are now on high alert. The North is threatening to attack any U.S. or South Korean ship that tries to intercept its vessels at sea.
Our Barbara Starr is tracking all these developments for us this morning. She joins us now live from the Pentagon.
I think, Barbara, we can't forget that there are 25,000 U.S. troops in South Korea. What does this all mean?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Alina, it means tensions continue to rise and that's the wrong direction in the view of the White House. Of course, they want tensions lowered.
In fact, in the last 48 hours, readiness levels for U.S. troops in South Korea have been raised. What does that mean? It means troops and equipment, more ready to go, ready to swing into action if heaven forbid, that was required.
Let's talk about the Yongbyon nuclear processing plant. Indeed, U.S. officials now acknowledging what they weren't willing to acknowledge which is that U.S. spy satellites have seen activity at that plant. They cannot come to a complete conclusion about what it all means, but U.S. officials saying it's the kind of activity that could put North Korea back in the business of reprocessing and making nuclear fuel capable of being used in weapons. We talked to an expert who had been inside the Yongbyon plant about what she had seen.
(BEGIN VIDEO CLIP)
EVELYN FARKAS, SENIOR FELLOW, AMERICAN SECURITY PROJECT: We didn't see any evidence of things having been crushed or demolished, if you will, but things had been disabled. And that's the term they used and I think it's an accurate term.
(END VIDEO CLIP)
STARR: Disabled. That's really the key there. Not a lot has been crushed. A lot has to be put back into action. What the U.S. thinks is going on, sources tell us, is that the North Koreans are now getting ready, unpacking equipment, unwrapping things, putting things back into place, taking the steps that could put them back in the reprocessing business.
It's a matter of weeks and months, we are told, that this could all be reactivated. Not years, so it's a fairly short time frame. It's something that is of great concern to the White House -- Alina.
CHO: Barbara Starr live at the Pentagon watching all of the developments for us.
Barbara, thank you -- Rob.
MARCIANO: Twenty-one high school students and three teachers are under quarantine in China this morning. Hours after they arrive in China from Maryland, officials confined them to their hotel room worried they were exposed to a man with swine flu on their flight. One of the students' parents insists she knows no one on the flight that had swine flu. And now they just want to see their kids released.
(BEGIN VIDEO CLIP)
MICHAEL KENNEDY, HEADMASTER: I just would like that now that it does not appear to be any reason the children need to be held, that they could be released and allowed to continue.
UNIDENTIFIED MALE: They're going to miss pretty much everything because they got off the plane last Friday and it's pretty much been in the hotel.
(END VIDEO CLIP)
MARCIANO: CNN has asked the Chinese government for a comment. So far, there has been no response. And why did China quarantine them with no proof? Later this hour, we're paging our Dr. Gupta for some answers.
And new this morning, the president's national security adviser challenging former Vice President Dick Cheney's claim that America is less safe under the Obama administration. Retired Marine General James Jones says the opposite is true. He points to increases in defense spending, steps to get out of Iraq, and a new strategy for Afghanistan.
Investigators, meanwhile, suspect arson is the cause of two brushfires that have now burned 500 acres in Riverside County, California. It's about 60 miles east of Los Angeles. A state recreation area had to be evacuated yesterday because of the flames. No one has been hurt.
And Illinois Senator Roland Burris is defending his comments about donating money to disgraced former Governor Rod Blagojevich in November. Burris' conversation with the governor's brother was secretly recorded by the FBI.
Ahead, why the senator's claims, his comments actually prove he did nothing wrong.
It's nine minutes after the hour.
(COMMERCIAL BREAK)
MARCIANO: Good morning, Pittsburgh. WPXI, our affiliate that way. And there she is. A little haze in the air. Overcast skies, 63. Still in the muck. Thunderstorms expected later on with a high maybe close to 80 -- Alina.
CHO: General Motors appears to be inching closer to bankruptcy this morning. The automaker has until June 1st to restructure or file, and that would make GM the fourth largest company in the United States history to fail. Here to weigh in on this is Neal Boudette. He's Detroit's bureau chief for the "Wall Street Journal" and an auto industry analyst. He joins us from Ann Arbor.
Neal, good morning to you. There are a couple of key clues that point to the fact that GM could very well file for bankruptcy maybe by the end of the week. We've got them paying their workers yesterday and today. Normally they get paid on Friday. They're even been asked to call an 800 number on Friday before they report to work.
Of course, we've got this June 1st deadline looming. So at this point, is there a way for GM to avoid bankruptcy or is it a done deal?
NEAL BOUDETTE, DETROIT BUREAU CHIEF, "WALL STREET JOURNAL": I think it's been a done deal for a while. They just the other day, the bondholders rejected GM's offer to reduce its debt in exchange for 10 percent of the company. And a week before that, GM told 1,100 of its dealers that they plan to no longer do business with those dealers. And really to break the dealer contracts, the only way you can do that quickly is through bankruptcy. So I think it's pretty much a done deal.
CHO: All right. Let's talk about if GM does in fact go bankrupt. The smart money is saying that they could emerge from bankruptcy in as little as 30 days, maybe 60 days. So tell me what is a restructured and overhauled GM look like from the standpoint of consumers? I mean, if you think about it, besides a home, a car is the biggest purchase that an American can make.
So what does it mean for the consumer?
BOUDETTE: Well, GM is going to be a much smaller company than it has been. We're all used to growing up with General Motors, the largest automaker in the world having eight different brand names, Buick, Saturn, Chevy, Pontiac, and so forth. Well, four of those are going to go away. Hummer, Saab, Saturn and Pontiac are going to either be sold or shut down.
So GM is going to be a much smaller company. There'll be a smaller selection of vehicles that you can buy from GM. And there will be a lot of dealers that are GM dealers today that will either shut their doors completely or will hook up with another automaker, perhaps Volkswagen or Hyundai or one of the foreign automakers that's growing in this country.
CHO: Neal, I want to jump in because the Obama administration, as you know, has made it clear that they do not want to run GM. But let's say they infuse $30 billion on top of the $20 billion that they've already done to help float this company.
You know, essentially, the federal government would then own 70 percent of GM. At the same time, they're trying to force higher emission standards and so forth. So how does an administration own a company and also oversee it.
Isn't there a conflict of interest here? BOUDETTE: Well, yes. There is somewhat of a conflict of interest. But, remember, that the government is stepping in to try to save the company and they're not going to put their own people on the GM board. There'll be a new board and there'll be a new CEO.
Fritz Henderson is the CEO now. He's going to remain. And once they get out of bankruptcy, GM will be on its own. They will have the U.S. government as a shareholder. But there is a team of officials from the Treasury Department in GM's headquarters today, but at some point fairly soon, I think, they'll leave and they'll leave the running of the company to GM.
CHO: Neal Boudette, Detroit bureau chief for the "Wall Street Journal."
Neal, thank you. Great to talk to you.
BOUDETTE: A pleasure as always.
CHO: Great, thank you.
And for more on how we got into the situation in the first place, don't miss CNN's Ali Velshi and Christine Romans tomorrow night on the CNN special "How the Wheels Came Off: The Rise and Fall of the American Auto Industry." That's tomorrow nigh right here on CNN, 8:00 p.m. Eastern -- Rob.
MARCIANO: Alina, conservatives are stepping up the scrutiny of Supreme Court nominee Sonia Sotomayor. And the claws are coming out. Ahead, the former high-ranking White House official is already calling for her to step down.
Plus, a Florida flight school under fire this morning accused of putting pilots in the cockpit too soon and putting your safety at risk. It's a story you'll only see here on CNN.
It's 15 minutes after the hour.
(COMMERCIAL BREAK)
MARCIANO: Nice shot of Chicago there. Good morning, Chicago. It's 6:18 your time. 7:18 on the East Coast. Fifty-eight currently in Chi town, going up to about 67. So cooler with some clouds.
Well, we're finally getting to hear some of the FBI audiotapes linked to the alleged quid pro quo deal for President Obama's old Senate seat. The scandal has already claimed the political career of former Illinois Governor Rod Blagojevich. Could the man Blagojevich put in that seat, Senator Roland Burris, be next?
Carol Costello is in Washington following this ever-developing story again this morning.
Hi, Carol.
CAROL COSTELLO, CNN CORRESPONDENT: Hi, Rob. You know the tapes aren't a smoking gun but they don't exactly clear up lingering questions about the transfer of the president's Senate seat either. They were released as part of an investigation by the Senate Ethics Committee.
On one end is Senator Roland Burris, then a former Illinois attorney general. On the other end is Rob Blagojevich, who is the brother of then-Illinois Governor Rod Blagojevich.
Burris is pressing for the Senate seat. Blagojevich is pressing for a campaign donation. Burris says he's in a dilemma.
(BEGIN VIDEO CLIP)
BURRIS: I'm trying to figure out how to deal with this and still be in the consideration for the appointment.
BLAGOJEVICH: I hear you. No, I hear you.
BURRIS: And, if I do that, I guarantee you that that will get out and people said, oh, Burris is doing a fundraiser and then Rod and I both are going to catch hell. And if I do get appointed, that means I bought it. If I don't get appointed, then my people who I'm trying to raise money from are going to look at me, you know, what was that all about, Roland? I mean, so, Rob, I'm in a, I'm in a dilemma right now wanting to help the governor.
(END VIDEO CLIP)
COSTELLO: So what to do? Well, Burris says he might be able to put a contribution in the name of his law partner because the partner is "not looking for an appointment" and end the conversation by promising to personally do something.
You might remember that Burris failed twice under oath to mention that he even discussed the seat with Blagojevich or his people. He eventually did admit to it. And late last night, Burris said the tape proves nothing.
(BEGIN VIDEO CLIP)
SEN. ROLAND BURRIS (D), ILLINOIS: My whole thing was seeking to placate the governor's vote. After I hung up that phone, after I said that, it dawned on me then that I couldn't give a check. It would not be right for me to do that. And guess what? I didn't.
(END VIDEO CLIP)
COSTELLO: Governor Blagojevich, of course, was removed from office earlier this year. He still faces up to 20 years in prison on corruption charges.
Burris has apparently made few friends in the Senate including the senior senator from Illinois, Dick Durbin. Durbin has actually asked Burris to resign in the past and says he will not support him if he runs for the seat next year. Burris says he'll make up his mind about that in the next month. And we'll be waiting. MARCIANO: We will. The hits just keep on coming. Carol Costello live for us in D.C. Thanks, Carol.
CHO: President Obama has been accused by his critics of depending too much on his teleprompter. Don't we all? Now, his second in command is making jokes about the same thing.
Vice President Joe Biden was giving the commencement speech at the U.S. Air Force Academy when a strong wind gust blew over his teleprompter. Take a look.
(BEGIN VIDEO CLIP)
JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: We'll also need a special brand of strategic thinking that are gained only in the thin air of Colorado Springs and the windy air of Colorado Springs. What am I going to tell the president when I tell him his teleprompter is broken? What will he do then?
(END VIDEO CLIP)
CHO: Ouch.
MARCIANO: My prompter says react (ph). What does that mean? What, oh, we talk about it. Oh --
CHO: Yes, we're going to talk about it.
I think it's pay back. You know, at the White House correspondence dinner, President Obama said, you know, he's warm, he's cuddly, but sometimes he gets himself into trouble but enough about Biden. You know, I think -- I think that's a little bit of pay back time.
MARCIANO: Well, they seem to have a good rapport. They eat hamburgers together.
CHO: Maybe.
MARCIANO: They tend to give each other a little bit of (INAUDIBLE). And we all know what it feels like when the teleprompter is blown over by the wind.
CHO: Yes, we do.
MARCIANO: It's not fun.
CHO: Not fun.
President Obama getting ready to appoint the nation's first cyber czar. All the recent problems with Facebook, Craigslist, a lot to do. We're going to tell you what may top the new czar's to-do list.
And the economy affecting the way people prepare their homes for hurricanes. From Maine to Texas, there are new concerns about unpreparedness. Twenty-three minutes after the hour.
(COMMERCIAL BREAK)
CHO: One of my favorite songs. Good morning. It is -- in Washington this morning, scattered clouds and 66. It looks pretty good there. But later, some troubled thunderstorms and 81 degrees. It's going to be hot.
Welcome back to the most news in the morning. A CNN exclusive, the pilots involved in a string of deadly plane crashes in recent months all have one thing in common -- they came out of the same Florida flight academy. And some critics are calling it a pilot mill.
Senior correspondent Allan Chernoff live in Miami this morning with a story you'll see only on CNN.
Allan, good morning.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Good morning, Alina. When you get onboard a commercial airplane, you'd like to believe that the people up in the cockpit have plenty of experience. But that's not always the case.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT (voice-over): Fifty dead near Buffalo when a Colgan Air crashed. The National Transportation Safety Board's preliminary findings indicate Captain Marvin Renslow responded incorrectly to a stall warning. Two pilots dead near Jefferson City, Missouri after taking a Pinnacle airplane on a joyride up to 41,000 feet. The NTSB blamed the pilot's unprofessional behavior and poor airmanship.
And five dead when an inexperienced private pilot crashed into another plane above Deerfield Beach, Florida. All these fatal crashes within the past six years share a common link -- the pilots all trained at the Gulf Stream Training Academy in Fort Lauderdale.
CAPTAIN JACK CASEY, CHIEF OPERATING OFFICER, SAFETY OPERATING SYSTEM: The one thing that ties them all together is poor airmanship. You cannot build sophisticated airline pilot skills on top of a soft foundation.
CHERNOFF: Gulf Stream Training Academy is widely criticized among veteran pilots as a pilot factory, a program that quickly trains students and then sends them out to work for commercial airlines including its affiliate, Gulf Stream International Airlines. It's a quick ticket into the cockpit.
Airline pilots who are not in the military typically gain experience over several years as flight instructors in small private planes. But for aspiring commercial pilots who have just 250 hours of experience and $30,000 tuition, Gulf Stream Training Academy speeds the process. Students study for three months and then serve as first officers on Continental connection flights in Florida and the Bahamas operated by Gulf Stream International Airlines. Students get 250 hours of on- the-job training. Compare that to the traditional minimum of 1,500 hours flight time most major airlines require.
PAT MOORE, COMMERCIAL PILOT: I don't know how they can justify that. When I get on an airplane, I expect a fully qualified crew.
CHERNOFF: Continental Airlines told CNN, "We expect our partners to adhere to the highest safety standards." Gulf Stream told CNN it was not prepared to appear on camera but said, "Gulf Stream does an outstanding job training commercial pilots and it has done so for nearly two decades. Every U.S. commercial carrier has pilots who've received their training here."
(on camera): As good as the training may be at Gulf Stream, veteran pilots say there is no substitute for experience. They say anyone stepping into the cockpit of a commercial plane should have significant flying time, far more than many students at Gulf Stream.
(voice-over): Even so, flight schools like Gulf Stream have been gaining popularity as more pilots try to accelerate their careers. But long-time pilots warn their career path is not one to be rushed because a speedy path to the cockpit may compromise safety.
MOORE: But we're talking about lives here. This is not, gee, I like flying airplanes. I think it's cool. This is, if I make a mistake and I'm not trained properly or my crew is not trained properly, people can be injured or die.
(END VIDEOTAPE)
CHERNOFF: Tragically, that has happened in a few cases and veteran pilots say they believe it's no coincidence that the people involved in those accidents had attended the academy -- Alina.
CHO: Allan Chernoff with that disturbing report out of Miami this morning. Allan, thank you.
Twenty-nine minutes after the hour. Here are this morning's top stories.
U.S. and South Korean troops on the border with North Korea on high alert this morning as the saber-rattling continues from Pyongyang. North Korea is vowing to attack any ship that tries to intercept one of its vessels at sea. There are also conflicting reports this morning over whether North Korea has restarted its Yongbyon nuclear plant.
The Taliban says it is responsible for a deadly suicide attack that killed at least 27 people in Pakistan. The well-planned attack in the northeastern city of Lahore reduced a police building to rubble. At least 250 people were injured. Most of the casualties were either police officers or staffers. And a powerful 7.1 earthquake rattled the Caribbean nation of Honduras this morning. That's according to the U.S. Geological Survey. So far, one death has been reported. Now, originally a tsunami warning was issued but that has since been lifted -- Rob.
MARCIANO: Alina, just how vulnerable is America to cyber terrorism? Well, tomorrow, President Obama will release a much- anticipated report that is expected to assess that threat. And he's also creating the first nation's cyber czar.
Joining us now from Washington, Retired Air Force Major General Dale Meyerrose. He was the first Senate confirmed chief information officer for the U.S. intelligence community under President Bush.
Good morning, General.
MAJ. GEN. DALE MEYERROSE (RET.), FORMER CHIEF INFORMATION OFFICER FOR U.S. INTEL COMMUNITY: Good morning, Rob. Thank you for having me.
MARCIANO: Well, thanks for being here. I'd love to have your insight on this. You've been -- you've been dealing with this for three decades I guess since the Internet even got started. In your opinion, just how susceptible, how vulnerable is the U.S. to a major cyber attack?
MEYERROSE: Well, it's more than just being vulnerable. We're being attacked today. The Pentagon absorbs two million attacks or probes a day. McAfee reported that the industry lost about $1 billion a year in revenue and sales and that millions of Americans endure fraud and I.D. theft.
MARCIANO: Two million attacks a day. Who are these people? And how are they doing this?
MEYERROSE: Well, anybody that wishes us well and sometimes they might even be cyber pedestrians. But make no mistake - folks who want to attack the United States are very tech savvy, sophisticated, and it's not limited to just nation states. It's extremists and criminal elements as well.
MARCIANO: You seem to have some backing in the Senate behind you. This is from Senator Olympia Snowe. She introduced some legislation that addresses this issue. She said "America's vulnerability to massive cyber crime, global cyber espionage and cyber attacks have emerged as one of the most urgent national security problems facing our country." I assume you kind of side with her but is it the most urgent national deal going on right now?
MEYERROSE: Absolutely. I think there's a lot of merit to that discussion. Cyber underpins virtually everything we do in our society, all the way from social networking to commerce to health care, et cetera. And it's not just the national security, national defense element, it's a national economic piece as well.
MARCIANO: Tell me what - what's your greatest fear? I mean, what do you go to bed at night and think, my goodness, this is the worst possible thing that could happen in the cyber watch?
MEYERROSE: Well, I think the fear is we've become more dependent. We've become more vulnerable. And we've become more vulnerable to a silent terrorist or criminal cell. And what you can't see can hurt you.
MARCIANO: Now this appointment - that's a scary thought in and of itself. When President Obama appoints the cyber czar, not so interested on who he is or her, what would be on the top of the to-do list.
MEYERROSE: Well, first thing is that I would hope that the president would appoint somebody of national stature. That would give them access not only to the president, for the cabinet, the American people, industry leaders and such. That's important because that access determines priority. Then the person needs to have the power of the pen. The ability to put out policy and enforce standards with 85 percent of critical infrastructure in the private sector, the power of the pen becomes very, very important.
And lastly, the person needs the power of the purse - the ability to influence government agencies and cabinets in how they spend money and how they support information sharing throughout the government.
MARCIANO: Money always helps. On a personal note, what kind of firewall do you use on your home computer there?
MEYERROSE: I use MacAfee firewall on my home computer.
MARCIANO: I suppose you got to have at least one. General Dale Meyerrose, thank you for that insight on cyber security -- Alina.
MEYERROSE: Thank you.
CHO: 34 minutes after the hour. New this morning, a proposal to legalize medical marijuana for seriously ill patients passed the Illinois Senate and is now headed to the state house. If approved, people with diseases like cancer and AIDS could legally grow and use marijuana when other treatments have failed. 13 states have already similar measures in place.
Play Powerball? Millions of you do. And only one ticket matched all the numbers in last night's power ball drawing. The ticket is worth more than $232 million and it was sold in South Dakota. A dozen other players came close matching five of the six winning numbers. Each of those tickets is worth at least $200,000. Not bad. The winning numbers by the way, 5-6-12-16-21 and the power ball, 7.
Plus, attacks from the right already starting against the president's Supreme Court nominee, Sonia Sotomayor. Former House Speaker Newt Gingrich says she should withdraw. Find out why. 35 minutes after the hour.
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(MUSIC PLAYING) MARCIANO: That one is running into the fog. WXYZ, our affiliate out there in Detroit. 66, foggy. Chance of thunderstorms, 72. Congrats, Red Wings taking the western conference. Yes, take on Pittsburgh there. That is going to be a match up. You know, what happened in the Lakers game last night, do you know?
CHO: I have no idea. Are you nuts?
MARCIANO: We'll have that information at the end of the show.
CHO: Wake up at 3:00. That's not what I'm -
MARCIANO: Weather and sports at 38 minutes after.
CHO: What I was going to say, just move on. Good stuff.
MARCIANO: Thanks.
CHO: For some conservatives, you know, it's open season on the president's Supreme Court nominee Sonia Sotomayor. Nearly two decades of court decisions under the microscope. But with Senate confirmation hearings still weeks away, the attacks aren't coming from Capitol Hill instead it's the airwaves, the blogosphere, and the radio dial.
Senior political correspondent Candy Crowley is looking at the fight ahead.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Outrage from familiar voices.
RUSH LIMBAUGH, HOST, "THE RUSH LIMBAUGH SHOW": Obama is the greatest living example of a reverse racist and now he's appointed one.
CROWLEY: At issue is a sentence in a 2001 speech by Judge Sotomayor about diversity on the bench. She says she tried to be aware of her own assumptions and conceded it's possible for someone of one background to understand the needs of someone from another. She also said "I would hope that a wise Latina woman with the richness of her experience would more often than not reach a better conclusion than a white male who hasn't lived that life."
Former House Speaker Newt Gingrich was tweeting this morning. "White man racist nominee would be forced to withdraw. Latina woman racist should also withdraw."
Unlikely but her words are being studied as our 17 years of decisions from the bench. A case now before the Supreme Court involves a city of New Haven which threw out a promotion test for firefighters after whites scored better than African-Americans. The whites sued but when the case got to Federal Appeals Court, Sotomayor joined colleagues ruling against the white firefighters. TOM GOLDSTEIN, SUPREME COURT ANALYST: Does she have the perspective of someone who is attentive to claims of discrimination or the possibility of police misconduct? Is she aware that that's a possibility? Yes. But she's not out there ruling for one side in all the cases by any means.
CROWLEY: In the case of a New York City cop, fired for making anonymous white racist remarks, Sotomayor dissented from the majority arguing that the first amendment was applicable and the fired officer should be allowed to take his case against the police department to trial. Tom Goldstein has argued 21 cases before the Supreme Court and studied her record.
GOLDSTEIN: Judge Sotomayor's on the moderate left. There's no question that she's a liberal. But she's not on the far left, she's not an ideologue.
CROWLEY: There are a few hints in the paper trail about how she would come down on the death penalty, abortion, gay rights. Ken Duberstein helped shepherd four Supreme Court justices to confirmation hearings. He advised each one to punt legal and social flash point issues with the following.
KEN DUBERSTEIN, REAGAN WHITE HOUSE CHIEF OF STAFF: As a judge, I must be impartial. I need to look at the facts of every case. I don't have a predestined personal view. My ideas don't matter, what matters is the law. I will judge it as it comes based on the facts of the case.
CROWLEY: Duberstein's best advice - don't embellish, don't shovel, tell the truth. Candy Crowley, CNN, Washington.
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CHO: Hurricane season is about to start after the devastation of Katrina and Rita, are we ready? You may be surprised at the answer. Ahead how the downturn in the economy is impacting the way we prepare.
MARCIANO: And student and teachers from Maryland quarantined in China. The government there concerned that they've come in contact with swine flu. We're "Paging Dr. Gupta" to evaluate those concerns. It's 41 minutes after the hour.
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MARCIANO: Salsa music planned. And the fact that this is our second tower cam on the road, that is sports specific, not playing. Good morning, Miami. The Magic taking on Cleveland tonight. We've got Cleveland's back against the wall for sure. It's currently 73-ish going up to about 90. And who knows? Orlando may salsa their way to the championship finals.
All right. Hurricane season - it's almost here. Certainly Miami is under the gun as always. So, with the destruction of Katrina and Rita, what they brought, are we ready for what could come this year? You might be surprised with the answer to that question.
John Zarrella is with us now from Miami. John, before we get your take on the basketball playoffs there, what can you tell me about what people are doing there in Florida and elsewhere?
JOHN ZARRELLA, CNN CORRESPONDENT: You know, Rob, 35 million Americans live in coastal areas most threatened by hurricanes. And you think with hurricane season just a few days away that most of them would be prepared. Well, a new survey to be released today sponsored by the National Hurricane Survival Initiative has found, you'd be wrong.
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ZARRELLA (voice-over): Rebuilding the sea wall continues after Hurricane Ike. New Orleans. The fortified levies are inspected. Alabama. Rehearsal for a massive coastal evacuation. Days before the start of hurricane season, pre-season drills and preparations are nearly complete. You've been paying attention, right? Surely you heard the chorus of warnings. The U.S. Commerce Secretary.
GARY LOCKE, COMMERCE SECRETARY: Public awareness and public preparedness are the best defenses against the hurricane and that defense is more important than ever.
ZARRELLA: The New Orleans mayor.
RAY NAGIN, NEW ORLEAN MAYOR: Each citizen must have a personal evacuation and recovery plan that accounts for your entire family.
ZARRELLA: The hurricane specialist.
UNIDENTIFIED MALE: Plan now, know what to do so you'll be ready when the storms threatens.
ZARRELLA: With so many drums beating, everyone living in hurricane-prone communities is ready, right? Well, no, not hardly. A new Mason-Dixon polls sponsored by the National Hurricane Survival Initiative found most people surveyed from Maine to Texas have done little to get ready.
Despite recent big ones, Katrina, Rita, and last year, Ike, 83 percent of the 1100 people surveyed have taken no steps to make their homes stronger. 66 percent have no hurricane survival kits, basics like food and water for three days. And 53 percent don't know if their insurance policy covers hurricane damage.
Every year surveys find hurricane apathy pretty much unchanged no matter how bad the season was. Sociologists chalk it up to human nature, to procrastinate. Emergency managers say the uh-oh factor will kick in when -
CHUCK LANZA, BROWARD COUNTY EMERGENCY MANAGER: I saw the people really do when the big ones are coming, they get prepared.
ZARRELLA: But this year, emergency managers fear because of the economy, many people can't afford to stock up.
LANZA: We like people to set aside a little bit of the money and buy a little bit of the supplies they need now and a little bit more every week as they get the money.
ZARRELLA: If they just can't, experts say now's the time to come up with a plan to evacuate.
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ZARRELLA: Now, there's another scary wrinkle here in Florida in particular was so many foreclosures and empty homes. Emergency managers fear that if there is a big hurricane, there's going to be a lot of property damage and potential home losses because there won't be anybody around to protect those places and put up the shutters. Rob, and I like Orlando in six.
MARCIANO: I'll put you down. I might take that although I'd like to see they go a little further. All right. We'll see what happens this hurricane season. It begins in just a few days. John Zarrella, live for us in Miami. Thanks.
ZARRELLA: Got it.
MARCIANO: Alina.
CHO: This morning, the U.S. is promising to take action for North Korea's latest saber rattling. Our Christiane Amanpour has been inside the secretive regime more than once. She's going to join us live with her insights in a few moments. 48 minutes after the hour.
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CHO: Welcome back to the most news in the morning. 21 high school students and three teachers from Maryland are under quarantine this morning in China. They've been confined to their hotel rooms. Officials there are worried tat they came into contact with swine flu on their flight over. For more, we're paging Dr. Sanjay Gupta in the house with us. Sanjay -
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Good morning.
CHO: Sanjay, is there any reason to believe that these kids have swine flu or what is going on here?
GUPTA: A slim to not. Mainly because the passengers that they thought had swine flu maybe in transmitting this subsequently tested negative. So that is sort of a big point here, because the person that you know, that they thought where this all emanated doesn't have it. What is sort of happening here is I guess the kids were in close proximity to a passenger who may have been sick and may have had cold- like symptoms again tested negative subsequently.
And we know that H1N1 can be transmitted through the air, through respiratory droplets. So you're on a long plane ride in close proximity. That would sort of how this was played out. Now, what we now know, Alina, is that typically it takes about one to four days for someone to start to develop symptoms after they've been exposed -
CHO: Right.
GUPTA: And that is where the sort of quarantine thinking comes into play. If you're healthy now but you're exposed, it could be four days before you start having symptoms. So quarantine him for that long. It's been five days now and again the person was - doesn't have it!
CHO: Yes.
GUPTA: So it's a little bit hard to piece this altogether.
CHO: I remember when you were in Mexico City, in fact, it was a self quarantine but you locked yourself into essentially a college dorm for three days before you came back, right?
GUPTA: That's right. What was interesting for me was I never had any symptoms. I was always healthy but I have a five-week-old then at home and so the best advice from my doctor, who is an infectious disease doctor, is to stay away from a child that young because if I did have it, I might transmit it.
CHO: Listen, I mean, listen, far from be it and try to get into the minds of the Chinese government but having said that, I mean, who could forget the SARS outbreak in 2003 -
GUPTA: Yes.
CHO: And potentially, I mean, perhaps that's why -
GUPTA: I think that's a really good point.
CHO: You're looking at the reaction, right?
GUPTA: And I think that is exactly and probably in some way what is dictating the reaction. You had thousands, I think around 8,000 people who had SARS at that point and over 700 died, close to 800 people died at that point. And remember China was accused at that point, at least initially of not being forthcoming enough in terms of talking about SARS and talking about these sort of infectious diseases.
So now I think this is guiding their thinking in so many ways, this idea, okay, let's put everyone in quarantine immediately and sort it out after the fact. You've had 22 cases of H1N1 in China and -
CHO: But far less than the United States -
GUPTA: Less than the United States but it's also in 48 countries around the world. I think what most doctors will say now who has been studying this is that H1N1 is here and it's going to find its way around the world. That is the bad news. The good news is it doesn't seem nearly as deadly as people thought it would be.
CHO: Right. Very quickly because we're running out of time but how close are we to seeing a vaccine, was it July?
GUPTA: Well, I think it probably might have been a little bit longer than that. You know, they usually say three to six months and they really just started working on it over the last month or so, end of summer, or early fall.
CHO: Dr. Sanjay Gupta, always nice to be sitting right next to you here.
GUPTA: Thanks (inaudible)
CHO: That's right.
GUPTA: I'm not giving you swine flu.
MARCIANO: Put your mask back on.
(LAUGHTER)
CHO: We should mention that CNN has asked Beijing for a comment and, so far, there has been no response. Of course, if you have any medical questions for Dr. Gupta, he is going to be answering them all morning long on twitter. You're so good that way. Just go to twitter.com/amfix.
MARCIANO: Even have time to tweet. Are you a twitter, Alina?
CHO: I -
MARCIANO: Come on, get on board. Everybody is doing it.
All right. Here's what we're working on this morning. General Motors apparently on the way to bankruptcy and, now, the classic American car company has set its sights on China. Why GM is vying to become the number one carmaker in a communist country?
And two lawyers formed an unlikely alliance, why are they joining forces to take on the state of California. It's 54 minutes after the hour.
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MARCIANO: Welcome back to the most news in the morning. 56 minutes after the hour.
GM on the fast track for bankruptcy here in the U.S. and it appears the once mighty American automaker sees a brighter future halfway around the world in communist China.
CNN's Jim Acosta is live in D.C. with a story you're seeing first here on AMERICAN MORNING. So, Jim, Congress asking questions about GM's plans and they may very well be going overseas.
JIM ACOSTA, CNN CORRESPONDENT: They are asking a lot of questions, Rob, and that's because GM has been bailed out to the tune of nearly $20 billion and there may be more coming. The auto giant has earned its nickname government motors but one of the nation's most well-known consumer watchdogs is warning GM could have a new nickname, General Mandarin.
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ACOSTA (voice-over): For all its problems, General Motors can speak Chinese. GM is now vying to become the number one carmaker in the communist country. Consumer advocate Ralph Nader warns GM is on its way of saying good-bye U.S.A. and ni-hao or hello China.
RALPH NADER, CONSUMER ADVOCATE: Where is our self respect as a nation?
ACOSTA: After taking billions in bailout money and announcing thousands of layoffs, GM has plans to ramp up production in China to build cars for U.S. consumers. This recently amended agreement between the United Auto Workers' Union and GM says "both parties discussed the company's plan to import certain vehicles from China."
Nader says GM in bankruptcy would allow the carmaker to shift its China plans into overdrive.
NADER: Do we really want to have the United States of America export its auto industry paid for by the taxpayer and unemployed workers to a dictatorship in a country like China?
ACOSTA: And the cars GM is building in China like the Chevy Spark are the very vehicles President Obama would like to see stay in the U.S.
PRES. BARACK OBAMA, UNITED STATES: The path I'm laying out today is our best chance to make sure that the cars of the future are built where they've always been built, in Detroit and across the Midwest.
ACOSTA: Industry analysts say GM is simply focusing on what's working.
CHRIS ISIDORE, CNNMONEY.COM: The main thing that GM plants in China are shipping to the U.S. are not cars, it's money, that there are profits being made in China by GM's operations which are being used to support the company here.
ACOSTA: Ohio democratic senator Sherrod Brown wants to slam on the brakes.
SEN. SHERROD BROWN (D), OHIO: That cannot be part of the restructuring of this company. Their business plan cannot include more outsourcing of jobs while taking U.S. tax dollars.
ANNOUNCER: The compact car that people could count on.
ACOSTA: After fighting for seat belts in GM products decades ago, Nader is concerned about the safety of Chinese cars.
NADER: It is very much of a concern. There has been contaminated fish and contaminated food.
ACOSTA: But he is more worried about the future of the American autoworker.
NADER: We'll look back on this bankruptcy as a death star that has emerged to empty out jobs in communities all over the country.
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ACOSTA: As a concession to its unions, GM has agreed to keep up in one U.S. plant it had slated to close to build some of the cars it's already making in China. Estimates vary as to how many cars GM wants to import from its Chinese factories. The company did not respond to our request for a comment and Rob, there are predictions that this could be a stealth political issue for the White House if something like this is allowed to happen. If GM is allowed to shift all these jobs or many of these jobs overseas to China and other countries, there are predictions that it's going to be a big problem for the White House.
MARCIANO: Yes. Politically damaging to say the least. Jim Acosta, live for us in D.C.. Thanks, Jim.
And tomorrow night, Christine Romans and Ali Velshi will have a special hour looking at the crisis in the America's auto industry. "How the wheels came off." It airs Friday at 8:00 p.m. Eastern time right here on CNN.
