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AMERICAN MORNING

Obama Extends Benefits for Gay Couples; Mass Rally Planned in Iran; Gangs Prey on Illegal Immigrants in Phoenix; Reporter Ban in Iran; Iran's Michelle Obama

Aired June 17, 2009 - 08:00   ET

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


JOHN ROBERTS, CNN ANCHOR: Crossing the top of the hour now, it's Wednesday, the 12th of June. Thanks for joining us on the most news in the morning. I'm John Roberts.

KIRAN CHETRY, CNN ANCHOR: And I'm Kiran Chetry. And a lot going on this morning.

Here's some of the top stories we're going to be breaking down for you in the next 15 minutes: President Obama is extending government benefits to same sex partners of federal employees. This decision comes at a time of growing criticism of the president from gay rights groups for not repealing the military's "don't ask, don't tell policies."

In just a few hours, the president is going to be laying out his plan for a new set of regulatory measures aimed at preventing another financial crisis. The president telling CNBC in an interview just how concerned he is about the country's fragile financial state.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, this is something that keeps me awake at night.

(END VIDEO CLIP)

CHETRY: The Obama administration calls this the biggest overhaul of government financial regulations since the Great Depression.

And we're following breaking news. Iran's opposition leader Mir Hossein Moussavi calling for a mass rally tomorrow to protest Friday's disputed election results. This morning, the government is trying to keep a lid on some of the images that have been coming in from the demonstrations. International journalists now confined to their hotel rooms.

Well, it's one of the ten most popular stories on cnn.com right now. In the face of growing frustration from gay and lesbian groups, President Obama will extend government benefits to the same-sex partners of federal employees. The official announcement comes later today.

Suzanne Malveaux is live at the White House with more on this decision that's being made from the White House.

Hey, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Kiran. It's far from certain whether or not this is really going to be enough to satisfy some gay activists. He is going to be signing this memo to extend benefits to same-sex partners for federal employees, pensions, maybe some health care but not full health care. And it's really comes at a time when there is a great deal of frustration from Obama supporters in the gay community who have been hoping that he would do more by now.

They cite examples, they say it was just last week the Justice Department filed a friendly motion in support of the defense of marriage act which opposes same-sex marriage. They also say they expected the Obama administration to repeal the "Don't ask, Don't tell" military policy that does not allow gays to openly serve. Candidate Obama said that, of course, he wanted to do that. That is not something that has been done yet.

So there is some frustration here. Privately in speaking with administration officials, they say he's very much in support of gay rights. Obviously, taking this at a slower pace than some would like.

Kiran?

CHETRY: And meantime, something else that's going to be big today in just a few hours. The president is going to talk about this overhaul of regulations for the financial world.

What should we be watching in all of this?

MALVEAUX: Oh, I had a chance as well as you did to talk to Christina Romer, the council of economic advisors. Clearly, there are some big things that are happening here. They're going to give the fed a greater role, more power and oversight when it comes to financial institutions, banks, as well as some insurance companies like AIG.

They're also going to ask Congress to give this administration more power when it comes to dismantling some of those troubled companies so that it doesn't end up being a total crisis if a company gets into some problems, financial problems.

And finally, they're going to create this whole new agency which is set up to protect consumers who have credit cards and mortgages to try to help them steer the right way so they don't end up getting in financial trouble in the first place.

All of this, Kiran, to be worked out, members of Congress going to be holding hearings soon to take a look at these very big changes, big ideas to see if any of them really look like they're going to do much good.

Kiran?

CHETRY: Suzanne Malveaux for us at the White House this morning.

Thanks so much. And as you've been talking about, it is going to be quite a busy day at the White House. We're covering it all for you, live. It's 12:50 Eastern Time that the president will spell out his plan, as Suzanne was just talking about, to overhaul the financial regulatory system. At 5:45 p.m. Eastern Time, he will be giving some brief remarks and sign that memo regarding federal benefits and nondiscrimination for same-sex partners of federal employees. And you can see both events live on CNN, as well as cnn.com.

ROBERTS: Dangerous new warning this morning from North Korea. The communist regime promising to retaliate 1,000 fold if provoked by the United States. The warning comes after President Obama declared North Korea a, quote, "Grave threat." He also promised to stop rewarding Pyongyang for repeatedly breaking its promise not to develop nuclear weapons.

And developing right now, a potential flash point in Iran. Iran's opposition leader Mir Hossein Moussavi now calling for a mass rally tomorrow. There are also demonstrations planned for today. Since Friday's disputed election, Iranians have been capturing the rallies and protests for the world to see against tough odds as well.

The government now confining reporters, that is foreign reporters, to their rooms. They're jamming cell phone lines and radio transmissions as well and trying to keep information off the blogs.

CNN's chief international correspondent Christiane Amanpour was in Tehran over the weekend. She is now in London this morning and joins us.

Christiane, where do you see all of this headed?

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, if this planned mass rally takes place on Thursday, I think it's still what they are sort of engaged in, which is allowing this democracy to play itself out on the streets. Because, as you know, there have been rallies from both sides. Obviously, the Ahmadinejad rallies being organized and permitted and covered by state press, but also the Moussavi rallies coming out. And by and large, not being interfered with.

In terms of what can be expected about the election, I think that informed sources would probably all say that it's not going to be overturned. That they might do recounts as they've said they will. And have publicly said they will not call another election, and nor will they overturn this one.

So it's possible that the situation is going to continue the way it is right now. And Mr. Ahmadinejad, as you saw, was sent immediately to Russia to take part in this Shanghai Corporation conference there. He's met with the president of China, the president of Russia. Both of them have congratulated him on his election, and this has been very deliberate to send him there and to have this happen.

ROBERTS: There's been a lot of talk, Christiane, about the response of the White House to what's going on there. It's been fairly muted. The president is being very cautious.

If the president were to strengthen the language, to really condemn what's going on there in Iran, what effect do you think that would have on the ground? Would it play into the hands of the supreme leader and people who are in opposition to Moussavi, or could it bolster the opposition?

AMANPOUR: Well, clearly, it would be something that the opposition would like to hear. However, the United States has a very delicate balancing act to walk right now. Given the fact that they have already publicly said they want to engage diplomatically with Iran.

Iran has said that it's closely watching outside governments for their reaction to the elections and will respond accordingly. So when Mr. Obama had a very careful response to the elections, that was seen as noninterference in Iran's internal affairs. And this is going to be particularly important if the idea of dialogue and reaching out is to continue.

ROBERTS: Christiane Amanpour for us from London this morning.

Christiane, thanks so much for that.

CHETRY: Well, a rising star in the Republican Party admits he had an extramarital affair with a married former staffer more than a year ago. Nevada Senator John Ensign called the woman and her husband close friends, and said that close relationship led to his inappropriate behavior.

(BEGIN VIDEO CLIP)

SEN. JOHN ENSIGN (R), NEVADA: Last year, I had an affair. I violated the vows of my marriage. It's absolutely the worst thing that I've ever done in my life. If there was ever anything that I could take back in my life, this would be it.

I will not be taking any questions. Thank you.

(END VIDEO CLIP)

CHETRY: Senator Ensign says that he and his wife have gone to counseling and have since reconciled. And there are reports the senator decided to come clean after the woman tried to blackmail him.

ROBERTS: Coming up in the next couple of minutes, Senator John McCain is going to join us. Of course during the election campaign, some of those presidential debates, he was very critical of then-Senator Obama's foreign policy experience. We'll see how he's feeling now particularly in light of what's going on in Iran.

We'll also ask him about Judge Sonia Sotomayor. He voted against her confirmation for the 2nd Circuit Court of Appeals. So what's he thinking about her now?

CHETRY: It would be very interesting. He's going to be joining us live in just a couple of minutes. We look forward to that. We'll be right back.

(COMMERCIAL BREAK)

ROBERTS: A little cloudy right now in Washington. 62 degrees later on today. Showers -- yes, it's going to rain in Washington again today. High of 68 degrees.

Iranians are standing their ground today planning a fifth day of protests. And tomorrow, the opposition leader Mir Hossein Moussavi has called for a mass rally in the streets of Tehran. At the White House, President Obama says he has deep concerns about what's happening inside Iran, but ultimately how this plays out, he said, is up to the Iranian people.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's not productive given the history of U.S.-Iranian relations to be seen as meddling, the U.S. president meddling in Iranian elections.

(END VIDEO CLIP)

ROBERTS: Republican Senator John McCain is the ranking member of the Senate Armed Services Committee. He joins us this morning from Washington.

Senator, you heard what the president had to say. He doesn't want it to be seen as meddling in Iranian affairs.

Is that the appropriate way to approach the crisis there in Iran right now?

SEN. JOHN MCCAIN (R), ARIZONA: Of course not, nor is it in keeping with the tradition dating back to Woodrow Wilson. What we call Wilsonian Principles. We're not meddling in any country's affairs when we call for free and fair elections. And the ability of people to exercise their human rights and when they disagree with a flawed or corrupt election, as the Iranian people have to be beaten and even killed in the streets. That's a fundamental principle, and the president obviously doesn't agree with that.

ROBERTS: If the U.S. were to take sides, senator, and support the opposition, could this potentially, in Iran, become about the United States as opposed to the political process in Iran?

Morehead Kennedy Jr. who is a former diplomat in Iran, was held hostage along with the other hostages back in 1979, said the best thing that the United States could do in this particular case is shut up. He said, quote, "It's very counterproductive to interfere in someone else's election. I think the best thing the U.S. can do is shut up."

MCCAIN: We're not interfering in taking the side of the opposition. We are seeking, as we have throughout the world, a free and fair election. This is obviously one that is corrupted. And it's obviously one that the majority of people in Iran, at least in my view, disagree with when you announce the results two hours after the polls close.

So it's not a matter of taking a side of the opposition. It is a matter of trying to help the Iranian people achieve what is a basic fundamental human right, and that is a right to choose their own leaders and choose their own government.

And to say there's not a bit of difference between the two candidates is beside the point. The Iranian people, obviously, think there's some difference, or tens or hundreds of thousands of them wouldn't be in the streets.

So I am, frankly, incredulous that anybody should say we should abandon our advocacy for free and fair elections anywhere in the world, much less Iran, which is ruled by Muslim clerics who are obviously extremists.

ROBERTS: So we all remember back during the election campaign, particularly during the presidential elections, you were quite critical of the then-Senator Obama's foreign policy credentials. During one debate you said, quote, "I honestly don't believe that Senator Obama has the knowledge or experience and has made the wrong judgments in a number of areas."

Do you still believe that or in the overall have you changed your opinion?

MCCAIN: On this issue I do not believe that the president is taking the leadership that is incumbent upon an American president, which we have throughout modern history, and that is to advocate for human rights and freedom, and free elections are one of those fundamentals.

Go ahead.

ROBERTS: I just want to say I just want to switch gears a little bit in the remaining time we have left here.

MCCAIN: Sure.

ROBERTS: We've got Judge Sonia Sotomayor's confirmation hearings coming up on the 13th of July. You voted against her confirmation to the 2nd Circuit Court of Appeals back during the Clinton administration.

Do you think she's qualified to be on the Supreme Court?

MCCAIN: We haven't even started her hearings yet. They're still examining her record. I'd like to wait and give her a chance to make her case and have the hearings before I make a decision on an appointment.

Of this nature, she certainly is a person who inspires many young Americans and particularly those who are Latino and Hispanic. But I'd like to wait and see what the hearings show before I make a decision. ROBERTS: Does it follow that if you were against her appointment to the 2nd Circuit Court of Appeals that you would then be against her appointment to the Supreme Court?

MCCAIN: No, because she has amassed a significant record of decisions in the court in that intervening time.

ROBERTS: Senator John McCain, it's always great to catch up with you. Thanks so much for spending the time with us today.

MCCAIN: Thanks, John.

ROBERTS: We really appreciate it.

MCCAIN: Thanks for having me in.

ROBERTS: Hope to see you again soon.

MCCAIN: Thank you.

ROBERTS: It's 16-1/2 minutes now after the hour.

Kiran?

(COMMERCIAL BREAK)

CHETRY: Live picture this morning of Phoenix, Arizona. And the violent drug war next door extending its reach to this major American city of Phoenix. It's seen a rash of kidnapping cases involving gangs who prey on illegal Mexican immigrants. And the city's suppressed housing market is actually helping them do business.

CNN's Ed Lavandera is following this story for us.

ED LAVANDERA, CNN CORRESPONDENT: John and Kiran, Phoenix has been dubbed the kidnapping capital of the United States. But what does a house like this and the real estate market in this area have to do with it?

(BEGIN VIDEOTAPE)

UNIDENTIFIED DISPATCHER: 911, what is your emergency?

UNIDENTIFIED CALLER: Help me. I'm in the house.

LAVANDERA (voice-over): The whispered plea for help came from a man inside this house, a home used to hide illegal immigrants.

UNIDENTIFIED DISPATCHER: I'm trying to get help to you. I've got officers in the area.

LAVANDERA: Inside, investigators discovered 35 illegal immigrants, half-naked, held hostage. Investigators say the man who smuggled them from Mexico into the United States were trying to extort more money than the immigrants had originally agreed to pay for crossing the border. Authorities say these cases are getting more violent. SGT. THOMAS THOMPSON, PHOENIX POLICE SPOKESMAN: They often wind up on one end of the telephone while they are being tortured.

LAVANDERA: In this house, investigators found boarded windows, a handgun, a knife and two baseball bats, allegedly used to beat the illegal immigrants. But in a unique twist, the real estate crash in Phoenix is providing the ideal backdrop to these smugglers turned kidnappers to operate.

As the housing bubble bursts, many homeowners have scrambled to rent out the home they can't sell. "For Rent" signs can be found all over the city. Phoenix police say kidnappers use fake clients, usually a couple posing as a family, to rent the home.

THOMPSON: Unbeknownst to the landlord, those people are just straw people. They are sent there to obtain that property, to rent that property so that it can be gotten for those that are involved in illegal enterprises.

LAVANDERA: Phoenix police say there were nearly 370 kidnapping cases last year. That translates to hundreds of people held inside roughly 80 drug houses. Average looking homes in every day middle-class neighborhoods. It's happened so often here, neighbors are unfazed.

TONY CORDEIRO, NEIGHBOR: it's all over. You have this stuff, it's all around. You know, the whole valley.

LAVANDERA: Behind the curtains of these houses, investigators say kidnappers have created fortresses, complete with surveillance systems and fortified locks installed by the smugglers. You might say these are unexpected upgrades to homes once at the heart of the real estate boom.

(END VIDEOTAPE)

LAVANDERA (on camera): Phoenix authorities believe drop houses in many other cities across the country are being used in kidnapping situations. But they say those cases are probably never reported.

John and Kiran?

ROBERTS: Ed Lavandera for us this morning.

Ed, thanks so much.

You know, we've been showing you pictures of the Iranian protests in the streets of Tehran. It's really interesting to see the number of women who are out there protesting the results of the election. And many of them are rallying around a woman named Zahra, who is Moussavi's wife.

Carol Costello coming up in the next couple of minutes. She's going to take a look at the rise of women in Iran in just the last few days, and what it might mean for the future.

Stay with us. (COMMERCIAL BREAK)

ROBERTS: More on our developing story. The uprising in Iran. It's a startling sight. Young Iranian woman in the streets openly and angrily protesting. One reason is their widespread affection for the wife of President Mahmoud Ahmadinejad's biggest rival.

Our Carol Costello live in Washington with more on the woman that they are calling Iran's Michelle Obama.

Good morning to you, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: She provides great inspiration to them, John. You know, there are no female cabinet ministers in Iran. And Iranian women remain second class citizens in criminal matters, divorce, child custody and inheritance cases. President Ahmadinejad has even tried to make it easier for men to take more than one wife. So for women activists living here in the United States, the sight of those Iranian women protesting is a great source of pride.

(BEGIN VIDEOTAPE)

(PROTESTERS CHANTING)

COSTELLO (voice over): Braving violence, even prison, Iranian women have proved to be fearless. For Iranian women living here in the United States, seeing women on the front lines of protest is striking. Ask them if they're proud --

AZAR NAFISI "READING LOLITA IN IRAN": Oh, you bet your life. Yes.

COSTELLO: Azar Nafisi is in awe of them. She wrote "Reading Lolita in Tehran," a bestselling book about in part the erosion of women's rights in Iran.

NAFISI: They proved not just their existence, but their right to exist the way they want to.

COSTELLO: Nafisi says of all of the protesters who feel cheated at the polls, Iranian women may feel it most. In Ahmadinejad's rival Hossein Moussavi and especially in his wife, feminists have finally found a powerful voice to help achieve their goals.

The love young women have for Rahnavard, apparent at a pre-election rally.

SAHKIBA SHAKER, MIR HOSSEIN MOUSSAVI SUPPORTER: We look at her and we see that we will be like her in the future.

COSTELLO: Iranian women call Zahra Rahnavard their Michelle Obama. She has a PhD, authored 15 books and like the American first lady, she's not shy about showing love for her husband. Except in Iran, this is a courageous act because it could get you a reprimand from Iran's morality police.

NAFISI: They see in her the potentials for what they want. COSTELLO: Under President Ahmadinejad's regime, dozens of women have been jailed for participating in a grassroots women's rights campaign called One Million Signatures. Some say their continued efforts coupled with Zahra Rahnavard's public strength intimidate hardliners. Apparent, some say, in a pre-election debate when Ahmadinejad took the unusual step of accusing his opponent's wife of not being qualified to teach.

PRESIDENT MAHMOUD AHMADINEHAD, IRAN (through translator): She got PhD without attending the university entrance exam and then she's now an assistant professor without any qualifications. She's now heading the faculty. This is lawlessness.

COSTELLO: But her record is legit. And thousands of Iranian women continue to rally for her husband's victory, no matter the cost.

(END VIDEOTAPE)

COSTELLO: Even if Ahmadinejad retains his presidency, women will consider their efforts a victory. The fact Iran is considering a partial recount at all means they forced the government to take them seriously.

ROBERTS: We'll see how far they take that recount as well. That's the important aspect to all of this.

Carol Costello for us this morning. Carol, thanks so much.

You can read more about Carol's report on Iran's Michelle Obama on her blog. You can get that at cnn.com/amfix.

Kiran?

CHETRY: All right. Well, 28 minutes past the hour right now. We check our top stories.

French investigators say that more than 400 pieces of Air France Flight 447 have now been retrieved from the ocean. They updated us on the search just a few hours ago. They say they are almost certain that the entire aircraft will not be found.

Meanwhile, Air France has finished replacing the air speed sensors on all of its airbus A-330 and A-340 planes. Faulty data from those sensors is considered to be a possible cause of the June 1st crash that killed 228 people. Again, they have not yet recovered the flight data recorder and the black boxes yet from this.

A second hydrogen leak forcing a second scrubbing of the space shuttle "Endeavour" launch. The mission has now been put off until July 11th at the earliest. "Endeavour" was scheduled to lift off early this morning. In fact, we were going to go on about 30 minutes early to cover that liftoff set for around 5:30 Eastern Time this morning. But NASA says that it was a hydrogen gas leak. It happened in the same place as the one on Saturday that was detected again today.

Well, it's no real surprise to Major League Baseball fans. Maybe it is a big surprise to Major League Baseball fans. Sammy Sosa reportedly tested positive for performance-enhancing drug in 2003. And "The New York Times" is saying that the Chicago Cubs star was one of the 104 players who tested positive that same year.

An urgent warning from the FDA about a popular over-the-counter cold remedy. Federal regulators say that consumers should immediately stop using Zicam cold remedy nasal gel and related products. These are the ones that you would spray up your nose or use a swab up your nose as opposed to the lozenges. Scientists say that they contain zinc, and that the zinc may damage nerves in your nose. There are 130 reports now of people losing their sense of smell.

ROBERTS: Don't stick a lozenge up your nose either. That would be bad.

(CROSSTALK)

CHETRY: That would be problematic for other ways.

ROBERTS: Yes, exactly.

CHETRY: Well, stay in your hotel rooms and stay off the streets. That's the order that's coming in this morning from all foreign journalists in Iran. The government there trying desperately to clamp down on reporting on the post-election protests that have led to beatings and blood shed over the past few days.

Our next guest just return from Iran, where he was covering last week's election.

Joe Klein, columnist for "Time" magazine, had a chance to interview Mir Hossein Moussavi, the candidate whose defeat set off these protests, as well as his wife, and as well as many advisors of Mahmoud Ahmadinejad, the current president.

Joe details all of it in the upcoming issue of "Time" that will hit newsstands on Friday. And he joins us now in New York.

Good morning, thanks for being with us.

JOE KLEIN, COLUMNIST, "TIME" MAGAZINE: Hey, good morning. It is morning, right?

CHETRY: Yes, I know. You're probably jet lagged from the trip.

How intense were the protest when you were there. And what do you make of the government response so far.

KLEIN: Well, they were pretty intense. And there are a lot of people. But they were a certain kind of people. They were mostly the upper middle class and also students, people in north Tehran. There weren't any protests in the south Tehran which is where the working class lives who are the people who really support Ahmadinejad. You know, this was a pretty closely - I think that the election was stolen. I don't even know that the votes were counted. But because I don't think that the government wanted to take any chances. But I think that if they had counted the votes it would have been very close.

CHETRY: There was a chance that Ahmadinejad probably still would have pulled out a victory, maybe it might have led to a run-off election.

KLEIN: I think they were really worried about having a run-off election. And the more I think about it and the more I read about it, the more I think that there was ballot box stuffing going on. A couple of, you know, election monitors told me that they didn't get to see the ballot boxes before the voting started, so they may have been stuffed with these paper ballots.

CHETRY: The other curious thing though is they claimed to have been able to count up millions of votes within hours after the voting.

KLEIN: Absolutely.

CHETRY: So what happens then? I mean, we're seeing these protests. There was the call from the Guardian Council that oversees all of that, that OK, we'll do a recount in certain areas. You submit your protest and your claim that something happened that was irregular and maybe we'll do it. Mousavi is saying, no, no, we want a whole new election. How likely would any of that be?

KLEIN: Well, I think what the Guardian Council and the Supreme Leader and Ahmadinejad are trying to do is kick the can down the road, hope that these protests abate over, you know, over the next few days, which they may well do. Mousavi is right, the only way we can have a really fair election in Iran is if it's a transparent election with, you know, international monitors. I mean the most important thing about this election I think in the end is that Jimmy Carter wasn't there, and he's kind of become the guy you go to in - to legitimize elections.

CHETRY: So is there likely to be a re-election or is that --

KLEIN: No.

CHETRY: - with international monitors?

KLEIN: No.

CHETRY: It's not going to happen. So what would the net result be of these protests that we've seen of the new harnessing of this social media, people using twitter, Facebook, recording it on cell phones, uploading it on computers, cell phones, what happens?

KLEIN: You have a gradual movement toward freedom in Iran. I was there in 2001, and now eight years later I've seen the changes. I mean women in 2001 wouldn't talk to a foreigner on the street. They certainly wouldn't shake your hand. Now they shake your hand, and even very conservative women wearing those black chadors will, you know, will talk about politics and anything else with someone like me. So because of the great information revolution that's going on, because of the gradual loosening, I think that the Supreme Leader is on the wrong side of history here. It's going to take some time though for the Iranian people to really get their rights. CHETRY: What does it mean for U.S.-Iranian relations as well? We were talking amongst us here on set about the interesting comments that President Obama made that are contested by many that perhaps there isn't really much of a difference between Ahmadinejad and Mousavi and perhaps we wouldn't see that much of a difference? What are your thoughts on that, especially as it relates to our relations with Iran?

KLEIN: Well, I interviewed Mousavi. And I think that there is a significant difference between him and Ahmadinejad. Even on U.S.-Iran relations. He said that if there was a program to weaponize their nuclear fuel, which he wasn't saying that there was -

CHETRY: Right.

KLEIN: That would be negotiable. He's the only leading figure in Iran, including most of the reformers, who's willing to say that. Ahmadinejad certainly isn't. But, it's always important to note that neither Ahmadinejad or Mousavi is the person who makes this decision. It is the Supreme Leader. He decides whether or not they talk to us, whether they negotiate, whether they open up.

CHETRY: Right. And you know, so also whether or not you even run.

KLEIN: Right?

CHETRY: They make those calls as well.

KLEIN: The Guardian Council makes that call.

CHETRY: Well, it's very fascinating how all of this is working and what we're seeing and what we're witnessing right now, possibly big changes ahead. And all of this is outlined in your cover story that going to be coming out in the upcoming issue of "Time." Joe Klein, great to see you as always. Thanks for being here.

KLEIN: Great to be back.

CHETRY: 36 minutes after the hour.

(COMMERCIAL BREAK)

ROBERTS: Just in to CNN, a new report on inflation came out minutes ago. Gerri Willis here to break down the numbers for us this morning. What are we looking at here?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi there, John. Yes, consumer price index for the month, up a mere 0.1 percent. Better than estimates. Very good news indeed. We like to see inflation low. Let me tell you the big headline number here though, year-to-date, for the first few months of this year, inflation is actually down, down 1.3 percent. This is the biggest decline since 1950. It just doesn't happen in our economy that prices actually go down over time. So big surprise there.

The move today due largely to a decline in food prices, food prices offset by higher energy costs which went up 1.2 percent. Tobacco prices down. Public transportation down. Apparel down just a little bit. But you can see that inflation fairly benign here. And if you actually look at what's going on year-to-date, prices are down. That's good news for consumers out there.

ROBERTS: But is that deflation?

WILLIS: Well, you know, this is so slight here. You know, we could head into deflation but we probably won't say it but we're at least we're hoping what we won't see Japan experienced when they had their real estate bubble burst so many years ago.

ROBERTS: Don't worry, prices are going up because gas is going up, too.

WILLIS: Yes. I'm just surprised it didn't go up more than it did because of those gas prices.

ROBERTS: Gerri, thanks so much.

WILLIS: My pleasure.

ROBERTS: Tomorrow night at 8:00, by the way, join CNN's Anderson Cooper and Ali Velshi for "Money summit, Money and Main Street." You can chat live with our experts for advice on how to beat the downturn. You can RSVP now at facebook.com/cnn.

39 1/2 minutes after the hour.

(COMMERCIAL BREAK)

(MUSIC PLAYING)

ROBERTS: If you've been watching this morning, you might get the idea that it is cloudy all over the United States. Certainly seems that way. You are looking at Atlanta this morning where it's cloudy and 73 degrees. Later on today, isolated thunderstorms and a high of 89.

The most popular videos right now on cnn.com. The F-bomb emblazoned across the cover of a high school year book. It happened in Shaker Heights, Ohio. The school managed to catch the prank and only some of the explicit covers actually made it to students. The student responsible, a senior graduated, before the obscenity was discovered.

Also take a look at this - caught on tape. A semi-truck veers out of control and slams into a pickup truck, sliding across the expressway in Wisconsin. The driver suffered only minor injuries

And an unlikely pairing. One of our i-reporters shot these pictures of a pet rottweiler who's adopted, yes, that's a wolf cub. The cub was rescued and brought to an animal preserve where the paternal rottweiler took her under his wings. That would actually be the maternal rottweiler because it is a her. Right?

CHETRY: I don't know. I mean, was it nursing? ROBERTS: Well, they said it's a woman - not a woman, it's a female. Took him under her wing. So don't worry, the appropriate people will be flogged for that.

CHETRY: All righty. Very cute.

So it's a decision that could cost them for the rest of their lives, the decision to drop out of school. And this morning as part of our special "Black in America" series, Soledad O'Brien shows us how one man, in one school in the deep south, is working to try to convince students to tough it out.

(BEGIN VIDEOTAPE)

Look on page 15. there you go.

SOLEDAD O'BRIEN, CNN CORRESPONDENT: Willie Thornton is a teacher.

Compassion is just like respect.

O'BRIEN: Who sounds like a preacher.

Could you please check on -

O'BRIEN: And sometimes acts like a cop.

He's not in school today.

O'BRIEN: Every morning Thornton, who was hired to help lower the drop-out rate, in Alabama's Greenville High School, checks absences for the 70 at-risk kids in his program. If they're not there, he'll go get them. 19-year-old Desmond Duncan.

I need for you to show up. OK?

O'BRIEN: A meeting and Desmond promises to return Monday morning.

DESMOND DUNKLIN, STUDENT, GREENVILLE H.S.: When I graduate, I'll go get a job. Just don't know if I'll graduate.

O'BRIEN: The day before Thornton, pursuing Desmond, he was attending a meeting of educators, business leaders, and grassroots groups, brainstorming ideas to crush the high school drop-out program. The featured speaker Alma Powell - chair woman of America's Promised Alliance.

ALMA POWELL, CHAIRWOMAN, AMERICAN PROMISE ALLIANCE: Every 26 seconds a child drops out of school.

O'BRIEN: The alliance hopes to raise awareness and find solutions with more than 100 of these drop-out summits across the country.

(on camera): What's keeping you up at night?

POWELL: We cannot afford to let one go.

O'BRIEN: You can't give up.

POWELL: You cannot give up.

O'BRIEN (voice-over): Giving up is something Willie Thornton never does.

On Monday morning, when Desmond doesn't make the bus - Thornton goes to get him. Two months later, Desmond's at graduation. It's not a diploma, it's a certificate. A real diploma requires more lasses and more tests. So what good is a certificate?

POWELL: The benefit is for a student to say that "I can" and that I've raised myself esteem enough because most of them are already in their heart have already quit. If there's hope, then there's much to be gained.

O'BRIEN: But Desmond says he's done with school. Mr. Thornton has lured him back before. Maybe, just maybe, he can do it again. Soledad O'Brien, CNN, Montgomery, Alabama.

(END VIDEOTAPE)

ROBERTS: And again, CNN will examine what it really means to be "Black in America." Watch stories of people stepping up, taking charge and creating solutions. The documentary "Black in America 2" premieres July 22nd and 23rd only on CNN.

It's 46 and a half minutes after the hour.

(COMMERCIAL BREAK)

(MUSIC PLAYING)

CHETRY: Good morning, Miami. Right now it is cloudy, it's 81 degrees, going up to 89. They have some scattered thunderstorms in the forecast for later today. Miami though is moving four notches down when it comes to angriest drivers. That's right the city that never sleeps - maybe it is being called that because of all the honking -- New York just got voted the city with the angriest, most aggressive drivers according to a road rage survey. New Yorkers were voted most likely to lay on their horns, to speed, to tailgate, to flip the bird. Drivers in Portland, Oregon and Cleveland were voted the most considerate. Miami, I guess, for the past few years has been number one but dropped down to number five.

ROBERTS: I tell you it's all part of the game here in New York City. You know, it's really interesting, for as many cars as there are, for as aggressive as the drivers are, you actually see very few accidents on the streets of New York.

CHETRY: I agree.

ROBERTS: It's really incredible.

CHETRY: It is. ROBERTS: And the things about Miami too is road rage in Miami often turns deadly because there are so many people who are carrying pistols in their cars, it can get out of hand quite fast.

CHETRY: Yikes.

ROBERTS: That doesn't happen the same degree here in New York.

It's 10 minutes now to the top of the hour. Let's fast forward through the stories that are going to be making news later on today. 12:50 Eastern, President Obama will propose new regulations to overhaul the nation's financial system. And at 5:45 he's going to make an announcement that will extend health care and other benefits to same-sex partners of federal employees.

Former President Bush is going to be keynote speaker at the annual Manufacturing and Business Association's gathering tonight. He's going to deliver remarks, and then taking questions. That will be at 7:30 p.m. Eastern.

And the cash-strapped city of Los Angeles is going to hold a parade for their NBA champion Lakers today. Private donors have agreed to cover nearly all of the city's $1 million costs for the event. That parade kicks off at 2:00 p.m. Eastern.

Let's get a check on the weather forecast now. Jacqui Jeras in for Rob Marciano this morning, she's down in Atlanta. And you know, you got that jet stream thing still kind of dipping down over the center of the country. We're still cool here in the northern tier, Jacqui. How long is this going to last?

JACQUI JERAS, CNN METEOROLOGIST: Well, another couple of days, at least, John. So get used to this cool and wet weather. Our weather pattern is kind of stuck at status quo. It doesn't want to budge a whole heck of a lot. So noting is moving. It's kind of what you see is what you get. That's going to last for another couple of days. Severe weather then in the red area across the midwest, down through the central Appalachians and into the deep south. Not really expecting severe weather here into the northeast.

You will get some rain showers. And those cool temperatures, there you can see a whole batch of showers moving across the mid-Atlantic right now, just shy of D.C. and Baltimore. So you guys can expect your sprinkles to be starting any time. That will likely hold things up at the airports. So delays anticipated at the D.C. metro, Baltimore, and Detroit as well. New York metros and Philly could have problems late in the day. And then San Francisco looking for some of those low clouds, temperatures about 5 to 15 degrees below normal there, but hot in the south. John?

ROBERTS: Jacqui, thanks so much. We could use a little of that heat you've got in the south up here in the north. My goodness, we still feel like we're still stuck back in April. Appreciate it. Thanks, Gerri.

CHETRY: Wow, the meteorologists are saying it could be the coldest June?

ROBERTS: Did I say Gerri?

CHETRY: You said Gerri.

ROBERTS: I have name problems all morning. I call Christiane, Christine.

CHETRY: That's all right. She knew you were talking to her.

But seriously, it could be one of the top ten coldest Junes in New York. I wore my down coat today.

ROBERTS: I refuse to admit that it is cold outside. I'm still doing shirt sleeves.

CHETRY: I don't know if you guys saw this piece of video. It's pretty funny. It happened when an annoying fly shows up to bug you. Well check out what happened when the pesky fly got in the face of the leader of the free world.

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA, UNITED STATES: ... characteristic of our - sorry. Sorry, I'm going to start over -- hey! Get out of here.

UNIDENTIFIED MALE: That's the most persistent fly I've ever seen. Nice.

OBAMA: Now, where were we? That was pretty impressive, wasn't it? I got the sucker. What do you think, Gibbs?

ROBERT GIBBS: That is very good. It's right there.

OBAMA: You want to film that? There it is.

(END VIDEO CLIP)

CHETRY: There you have it. That was a very, very good reaction. It reminded me of Mr. Miyagi in "Karate Kid." But he did it with chopsticks.

ROBERTS: So much for soft power, huh?

CHETRY: Yes.

(LAUGHTER)

CHETRY: The big horse flies, I can't bear to kill them, they're so huge. I trap them.

ROBERTS: When it is appropriate he carries the big stick.

CHETRY: He sure does. All right. Still ahead, Sanjay is going to talk about this whole notice. You know people who say I don't really smoke, I'm a social smoker, I only smoke when I drink. You hear people say that?

ROBERTS: Oh, yes. Absolutely.

CHETRY: Is that really - are you a smoker or are you not? And what are the long-term implications of -

ROBERTS: If you light up, you smoke.

CHETRY: Yes. I think so too.

ROBERTS: You know, you're just trying to fool yourself when you're saying I'm just an occasional smoker or a social smoker. You still smoke.

CHETRY: Well, that's how it all gets started. That's the problem. We're going to talk to Sanjay a little bit more about the notion of social smokers. Still ahead.

ROBERTS: There's nobody as annoying as a reformed smoker but you know, I'm going to be annoying.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, HOST, "THE TONIGHT SHOW WITH CONAN O'BRIEN": Dunkin Donuts has announced that they are changing their slogan America runs on Dunkin. They're going to change it, yes. Then changing it to runs on Dunkin then collapses after a massive heart attack.

(END VIDEO CLIP)

CHETRY: Well, one sure fire way to increase your odds of having heart problems is by smoking. But what about the so-called social smokers, millions of people who say you know, I just smoke when I drink. I just smoke at parties. I just smoke on weekends. We're "Paging Dr. Gupta" for the prognosis on them. And you know, I used to say this, too. I mean that's how you sort of get started I guess because it is a social habit at first, right? Before it becomes a full-blown addiction. Sp what classifies someone as a social smoker?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you know, it's interesting. There's millions of dollars of money that goes into targeting these so-called social smokers. Big legislation, as you know, this week, Kiran - last week we talked about tobacco legislation. The president himself, at least in the past has been a social smoker. So lots of people paying attention to this particular issue. What constitutes a social smoker?

Well, it's interesting, if you look at tobacco companies who probably know the most about this, they often target people in bars and clubs. They are younger people, oftentimes they give them cigarettes. These are people who say they typically don't smoke every day. They don't consider themselves smokers, if you were to ask them. And they prefer not to smoke alone. They're also very conscious of image. They're conscious of the brands that they might smoke. Part of the reason they smoke is to enhance their image in some ways as well. '

Also, just a general rule that younger, better educated, wealthier. About a quarter of smokers classify themselves as social smokers. And interestingly about half of college age students who smoke occasionally also classify themselves as social smokers. So you get an idea of who these people are most likely to be.

CHETRY: Typically if you were just to smoke, let's say two or three cigarettes a week, technically that wouldn't kill you. Right? But the problem is that often that doesn't happen. Right? That's sort of a gateway, social smoking, to becoming addictive.

GUPTA: Yes, I think that's one of the issues and it's a tough question to answer. To be honest, I mean, in part, you know, having one cheeseburger is not going to kill you either. Is it good for you? No. But you know, what we can say is that people who smoke occasionally, maybe every Saturday night or maybe a few cigarettes a week.

They are going to have a slightly increased risk of blood pressure problems, slightly increased risk of heart disease and stroke. Their cancer risk will be slightly elevated, to be honest nowhere near what a regular smoker but your point is a good one, this idea that these social smokers are more likely to become regular smokers. That's why the tobacco company spends so much time sort of targeting them.

Two quick points - warning labels don't work as well for social smokers because they don't consider themselves smokers. So what the warning labels that we might see really focus on second-hand smoke. Social smokers as a rule do care if they're hurting somebody else. Also message to doctors out of all of this is that simply asking a patient do you smoke is probably not the right question. The right question is have you smoked within the last month. And that gives you an idea of parsing out regular versus social smokers and who they really are.

CHETRY: Yes. All right. Lots to think about there. Sanjay, thanks so much. By the way, if you'd like to find out more, you can head to our blog, cnn.com/amfix.

ROBERTS: Well, thanks so much for joining us on this AMERICAN MORNING. We will see you back here again bright and early tomorrow.

CHETRY: Sure will. Meanwhile, here's CNN NEWSROOM with Heidi Collins.

HEIDI COLLINS, CNN ANCHOR: We are covering major stories in the CNN NEWSROOM today, check these out now. President Obama has a new policy for some federal workers and their same-sex partners. Our White House correspondent Suzanne Malveaux is going to be covering that for us. We'll get to her in just a moment.

Also, Tehran is burning. Opposition supporters continue to demonstrate both in the streets and online despite a government crackdown there. We'll get to that story as well. Plus, why the FDA is saying that you should stop using one popular cold remedy. Dr. Sanjay Gupta has that story.

It is Wednesday, June 17th. Hi, everybody. I'm Heidi Collins. You are in the CNN NEWSROOM.

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