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American Morning
President to Address Joint Congress on Health Care Reform; Battle Against California Wildfires is Being Won; NYC Bridge Guards Caught Sleeping on the Job; SEC Failed to Investigate Bernie Madoff; Dallas Going Dry
Aired September 03, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Welcome to AMERICAN MORNING. Glad you're with us on this Thursday, September 3rd. I'm Kiran Chetry.
JOHN ROBERTS, CNN ANCHOR: Good morning to you, I'm John Roberts. Thanks for being with us. We're following several big stories that we'll be breaking down for you in the next 15 minutes.
President Obama will use the biggest bully pulpit of them all to try to regain control of the health care debate addressing the joint session of Congress in prime time next week. Is he ready to abandon the public insurance option? We put the question directly to a senior White House adviser.
CHETRY: Also this morning, firefighters near Los Angeles gaining ground on the station fire. They still have a long way to go though. They've been dropping fire retardant and water from the air and that is helping slow the massive wildfire there. It is now considered 28 percent contained.
Yesterday they said it was 22 percent contained. There are still concerns though that flames could spread to communities like Pasadena and Arcadia as investigators are still trying to zero in on a cause.
ROBERTS: And New York's George Washington Bridge considered a prime terror target, so why were two security guards sleeping on the job? They've been punished and we catch up with the guy who caught them napping.
CHETRY: We begin though with President Obama raising the stakes in the make or break effort to salvage a health care reform bill. He'll deliver a prime time address to a joint session of Congress next Wednesday. The president is expected to get more specific about what he wants to see in a health care bill.
And a bit of history for you, it was 16 years ago this month that President Bill Clinton tried the same tactic in a last ditch effort to sell his health care overhaul which later died. The big question now, is President Obama ready to accept a scaled-back version of health care in order to get a bill passed? Sources tell CNN the president has been negotiating with moderate Senator Olympia Snowe, a Republican, on a compromised plan without a government-run public insurance option.
Last night, Ed Henry asked senior White House adviser David Axelrod if the centerpiece of the Obama plan is now dead in the water?
(BEGIN VIDEO CLIP)
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Where's the public option? Is it still on the table or is it off?
DAVID AXELROD, SENIOR WHITE HOUSE ADVISER: The president embraced the public option because he believes that we need to have competition and choice in the insurance system, in this pool that will be created for uninsured workers and small businesses who can't afford insurance. And he believes that would be a boom for consumers, help them get the best deal, keep the insurance companies honest. He still believes that competition and choice is important.
HENRY: But that does that mean a public option is still alive?
AXELROD: I'm not going to deal with the details of the president's speech. Otherwise, there'd be no point in giving it. But it's fair to say that he believes strongly in the notion of competition of choice to keep the insurance companies honest.
(END VIDEO CLIP)
CHETRY: All right. So we heard a little bit there. And Jill Dougherty has been following the developments this morning as well live from the White House. And we heard from David Axelrod, but we're also hearing about some of the negotiations going on behind the scenes perhaps with, you know, moderate Republican Olympia Snowe. What is happening leading up to the president's speech to Congress?
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, CNN has talked with two sources who are familiar with those behind-the-scenes negotiations. And what they're saying is that the White House is deep in conversation with Senator Olympia Snowe. She's one of the moderates and she is somebody that the White House feels that they can work with.
And essentially, the real question is what happens with this public option? The idea and it's actually Olympia Snowe's idea, would be that they wouldn't have it now but it might be down the road and it would work like this. Essentially they would have the insurance companies change regulations and get rid of things for instance like pre-existing conditions. If that happened, that would be fine. If it did not happen and there would be a period in which the insurance companies would have to introduce those changes, if they did not by a certain period, the trigger would start and the trigger would introduce that public option which the White House argues would really force the insurance companies to do what it wants on reform -- Kiran.
CHETRY: All right. Jill Dougherty with some of what's going on behind the scenes there. And, of course, we'll find out more -- even more on Wednesday. Thanks, Jill.
And, of course, you can follow all of the latest health care developments live on CNN as well as CNN.com/health care. ROBERTS: Also developing this morning, the wildfires in California. Thousands of firefighters right now are making important headway against the flames outside of Los Angeles that have so far burned an area about the size of Chicago. The fire is now 28 percent contained and more evacuees have been able to return home.
The measurable progress thanks in part to a steady stream of air attacks including the biggest gun in the firefighters arsenal. Look at that. It's a converted 747.
Our Rob Marciano is live in Sacramento, California. And, Rob, that's a pretty amazing flying fire truck, no question.
Well, we seem to be having a problem with Rob's audio there at least in the live portion. So let's take a look at what Rob found as he took a closer look at that 747 air tanker.
(BEGIN VIDEOTAPE)
ROB MARCIANO, AMS METEOROLOGIST (voice-over): Fighting the fire from the air, choppers. Turbo props, even jets. But this is the big Kahuna.
UNIDENTIFIED MALE: We have more excess horsepower than any tanker out there.
MARCIANO: Captain Cliff Hale (ph) hit the California wildfires hard this week flying this modified 747 supertanker right into the fire zone.
UNIDENTIFIED MALE: He arms it. And that gives me control up here or the other pilot as well. We got a drop button right here on the switch.
MARCIANO: Flying low at 300 feet, Captain Hale (ph) has to focus on his target.
(on camera): You've got to be a pilot and a bit of a marksman. How good a shot are you?
UNIDENTIFIED MALE: Pretty good at this point.
MARCIANO (voice-over): A touch of pilot bravado but at his core he's a firefighter.
UNIDENTIFIED MALE: To me it's, you know, all the pilots that are doing this are just like the regular firefighters that you see anywhere. And it's just we do it in the air.
MARCIANO: But nothing compares to this jumbo jet.
(on camera): If you were a passenger on a 747, this is where you'd be sitting. Instead on this plane, they've got ten tanks carrying 20,000 gallons of fire retardant and/or foam, 90 tons of firefighting artillery.
(voice-over): And these cannons also have control.
UNIDENTIFIED MALE: They can meter it to any distance and any thickness that the firefighters on the ground want.
MARCIANO: Adjustable power and precision which reduces wasted ammunition.
(on camera): This stuff is not cheap.
UNIDENTIFIED MALE: It's not. It will run anywhere from $2 to $3 a gallon.
MARCIANO (voice-over): All of this is unleashed in the back of the plane. Some fancy looking doors.
UNIDENTIFIED MALE: Well, these are the exhaust ports through the retardant and the flight engineer is going to choose the proper air pressure and the number of exhaust ports to vary the concentration depending on what the firefighters on the ground need.
MARCIANO: On the ground or in the air, it's one big team.
UNIDENTIFIED MALE: All the guys that do this to me are, I think, are the best and it's an honor to be a part of that group.
MARCIANO: No doubt this massive supertanker is a welcome weapon in the war against wildfires.
(END VIDEOTAPE)
MARCIANO: The under belly of this beast is where that fire retardant is released right here. Different from other tankers, it doesn't just use gravity. They actually use air pressures well that allows them to adjust the stream. It gives them even more precision.
But with that precision and this size of an aircraft, you need a good deal of visibility just to get into the fire safely. That's been the issue the last two days, visibility. They haven't been able to get this thing up. Later today they hope to be able to do that.
The first couple days of this fire, they hit it real hard and it was the inaugural mission for a U.S. attack with this particular plane and it was highly successful.
Amazing stuff here, John and Kiran. The other issue, of course, is cost. You go no go, it's pretty pricey. Thirty grand an hour that does not include the fuel or the fire retardant. So it's a pretty penny but in the end it all costs a lot and you got to save your pennies elsewhere I suppose.
ROBERTS: You know, Rob, one of the things that I was wondering about was the danger factor. That's an awfully big aircraft to be flying that close to the ground.
MARCIANO: Well, they fly a little bit higher than the smaller airplanes but, you know, they train just like any other military pilot or airline pilot in simulators. And we even talked with this pilot here, he's very, very confident. So they plan for all contingencies and he says this thing drives like a sports car. It's only at 80 percent. They fill this thing up with all that fire retardant and fuel, it's still at 80 percent capacity. Relative to it, it was full of passengers. So they can land this thing as well if they had to with a full tank of gas and fire retardant. It -- it clearly is remarkable.
CHETRY: You called it the big Kahuna. That's the only one right now that they have in their arsenal?
MARCIANO: It is. It's been a long time coming. So far this is the only one and we'll see how this year goes. So far, it's been a striking success.
CHETRY: Wow.
ROBERTS: Pretty impressive. No question. Rob, thanks so much for that great report.
CHETRY: Other stories new this morning. The FAA announcing plans for new flight rules in that heavily used airspace over New York's Hudson River. Now, of course, this follows last month's collision that tragedy that we all saw unfold where the small plane and a sightseeing helicopter clipped one another. Nine people killed.
Well, these new rules now will include separate altitude corridors for helicopters and small planes and also require pilots to announce their position on a specific radio frequency. Some New York lawmakers, though, say they do not think these FAA recommendations go far enough. Senator Chuck Schumer calls them insufficient. Congressman Jerrold Nadler calls them fundamentally inadequate.
ROBERTS: "The New York Times" is releasing portions of the late Senator Kennedy's memoirs. It's due out in 11 days. Kennedy writes that he was haunted every day of the 1969 car accident that killed Mary Jo Kopechne. He called his actions "inexcusable." He also writes that he agreed with the Warren Commission's findings about the assassination of his brother, President John F. Kennedy. Warren Commission, of course, found that Lee Harvey Oswald acted alone.
CHETRY: Well, former New York Governor Eliot Spitzer is teaching a political science class this fall at City College of New York. The class -- the school says the class filled up quickly after students learned that the lecturer would be former Governor Spitzer. He was forced to resign, you may remember, as governor last year for his involvement with a prostitute.
ROBERTS: Well, it is good to be the Dallas Cowboys. That's because they are the most valuable sports franchise in America right now. According to "Forbes" magazine, they are worth $1.65 billion. That's a $100 million more than the second place, Washington Redskins. The New England Patriots are in third place nearly $300 million behind. Around the world, only England's Manchester United soccer team is more valuable than the Cowboys, valued at $1.87 billion.
CHETRY: That's a lot of jerseys.
ROBERTS: Look, there is money in those helmets.
CHETRY: Oh, yes.
ROBERTS: No question.
CHETRY: Well, still ahead, we are going to show you some pictures that if you travel around the New York area every day, they'll probably make you shutter. These are people who were supposed to be there to protect and to catch terrorists if they're trying to perhaps blow up a bridge. This is at the G.W. Bridge. Instead, they're asleep on the job.
Ten minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: We're back with the Most News in the Morning. The whistle has been blown and the ax has fallen on two guards who were hired to protect New York's George Washington Bridge.
CHETRY: And this is a bridge that's considered a prime target for terrorists. Meantime, the guards were caught sleeping on the job. Not once, not twice, but several times by a bicyclist who commutes across the bridge.
CNN's Deb Feyerick joins us live now. And you had a chance to speak with the guy who caught them napping, and he really wasn't trying to get them in trouble at first.
DEBORAH FEYERICK, CNN CORRESPONDENT: This was not a "gotcha" situation. What this was was somebody who actually just felt he really needed to do something. You know, when it comes to potential terrorism, New York City has a saying. If you see something, say something. And that's exactly what a good Samaritan did going public with safety concerns at one of the busiest bridges in New York.
(BEGIN VIDEOTAPE)
FEYERICK (voice-over): Joey Lepore (ph) loves riding his bike from New Jersey over the George Washington Bridge into New York's Central Park.
(on camera): You take this path every day?
JOEY LEPORE, CAUGHT GUARDS SLEEPING IN GEORGE WASHINGTON BRIDGE: Well, pretty much every day.
FEYERICK (voice-over): It was on one of those rides across the bridge Lepore (ph) looked over the security booth and saw something that alarmed him.
LEPORE: I saw a guy sleeping. And I thought, this is crazy that the guy is sleeping on duty.
FEYERICK: And he says it happened not once but three times.
LEPORE: I got totally outraged. I said, you know what, I'm taking a picture of this.
FEYERICK: Which he did walking straight up to the security booth.
LEPORE: Imagine if I was a terrorist. Imagine if I had a gun in my hand. I could have opened up this door and blew his head right off. That's how close I was.
FEYERICK: Months before going public, Lepore (ph) says he reached out to the security guard.
LEPORE: I said, you know, I don't want to be a jerk and report this, but you got to promise me that you're not going to be sleeping while you're supposed to be guarding a bridge. He said. No, no, no. It won't ever happen again. Don't worry.
FEYERICK: But when it did with another guard, Lepore (ph) felt there was a bigger problem.
LEPORE: If this guy worked in a deli, and he was sleeping behind a counter, I wouldn't care. But when you're protecting us and it's your job to have an eye out for anything that's potentially hazardous for us and our safety, then I take that very seriously.
FEYERICK: The Port Authority which runs the bridges says both guards have been fired for sleeping on the job. In a statement to CNN, the agency says it welcomes public vigilance and that "The Port Authority takes the safety of its passengers and facilities very seriously and has spent more than $4 billion on security since 9/11."
Although he feels badly about the firings, Lepore (ph) still feels he did the right thing especially because a cousin and friend died on 9/11.
LEPORE: If I can do one thing to help one person stay alive, then I'll be very, very fulfilled today.
(END VIDEOTAPE)
FEYERICK: Now, neither The Port Authority nor the contractor that hired the security guards would release the names of the two men who were fired, so we were unable to reach them directly to find out what happened and why they were sleeping, whether this was just a one- time deal. But again, after he saw it not once but twice, it made him really uneasy. That's why he turned them in.
CHETRY: Yes. And again, we ask the same questions about, you know, safety and vigilance in the wake of 9/11. That was one of the bridges that was a key target of another terror plot that was foiled and, you know, a lot of concerns about how much traffic goes across that bridge.
FEYERICK: Absolutely. And there's also the issue of complacency. The mayor (ph) has gotten too complacent now that so many years have passed were nothing allegedly has happened. So that's the issue now.
ROBERTS: And it's not like he found them in the middle of the night sleeping. It was during the day.
FEYERICK: And he walked right up to the booth.
CHETRY: It was 7:00 in the morning, 10:00 in the morning. Yes, exactly.
FEYERICK: And we're all tired. But seriously, nobody dies if I don't do my job.
CHETRY: Except (INAUDIBLE) that you see.
FEYERICK: Thank you very much.
CHETRY: There you go.
FEYERICK: Exactly. Exactly.
ROBERTS: Great story and well told. Thanks, Deb.
FEYERICK: Thanks.
CHETRY: Well, 16 minutes after the hour right now. Coming up, what this incident may reveal about the quality of our security. We're going to be talking to Pat Demoral (ph). He is the former assistant director of the FBI here in New York.
ROBERTS: The inspector general of the Securities and Exchange Commission says, whoa, bad job, folks, in monitoring Bernie Madoff. Why didn't you find out that he was running a Ponzi scheme? He had plenty of opportunity. Our Christine Romans "Minding Your Business" this morning. She's right up.
Seventeen minutes now after the hour.
(COMMERCIAL BREAK)
ROBERTS: Twenty minutes now after the hour, and Christine Romans here "Minding Your Business" this morning.
The SEC inspector general's report pretty scathing assessment of where the SEC was on Bernie Madoff.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Where it wasn't on Bernie Madoff.
A news flash, the SEC missed Bernie Madoff's multibillion-dollar Ponzi scheme and now the inspector general of that organization has taken a very deep and serious look at what went wrong finding delays in investigations, finding inexperienced staff. Six complaints, two media reports. Basically this agency was asleep or just ignored Bernie Madoff. Here's what they found. No inappropriate connection between staff -- the staff and Madoff. There have been some concerns that a Bernie Madoff's niece had married someone who was on the staff there and maybe that had some influence. This inspector general found it did not. But six complaints raised significant red flags and this agency essentially did nothing or very, very little to try to follow up on it.
In fact, one part of the agency was investigating him at one point. This part of the agency, they were specialist in front running so making sure that Bernie Madoff wasn't putting his own trades in front of his clients. They weren't any trades, you know. So the whole thing was a sham. And what they were looking for didn't even make any sense.
Another time Bernie Madoff in 2006 sat down with the SEC. He thought this is it. This is over. They have found me.
On Monday, he went into the office. He sat there. Nothing happened. Tuesday. Nothing happened.
They didn't do the most basic, basic research or digging into all of these concerns about him. He gave them lies, implausible reasons why his trading volumes were so low and they did nothing.
CHETRY: Right. So what -- so what happens now? Will there be changes ahead? Will it ever be able to happen again?
ROMANS: You would certainly hope not. And the SEC has shut down more alleged Ponzi schemes in the last year than they have in a very long time. The SEC chairman, Mary Schapiro, said in a statement that her office has beefed up enforcement and they are "implementing lessons learned". But boy, it is a big lesson learned. I mean, they were handed a blueprint. It's just an embarrassing report. But I say again, news flash.
CHETRY: You're right.
ROMANS: We knew that they missed this.
CHETRY: Well, you were about to say as somebody said, within 20 minutes I could look at this and tell it was a Ponzi scheme and they handed that -- like that gentleman handed it to them and it still went undetected.
ROMANS: Yes.
CHETRY: People were telling them this is what he's doing.
ROMANS: At least two major newspaper articles laid it all out even. I mean, published in newspapers and nothing happened.
CHETRY: 1992 is Christine's "Romans' Numeral." This is a number driving a story about your money. Any guesses?
ROMANS: This is the year... CHETRY: Year.
ROMANS: Yes, it's a year. This is the very first complaint, specific complaint against Bernie Madoff was 1992. On December 11th, 2008, he was arrested. Think of that how long this fraud went on with the SEC. And he even used the SEC. He even said the SEC has looked at me and I'm clean. He used it to actually burnish his image by saying, oh, the SEC says I'm just clean as a whistle.
ROBERTS: Sixteen years. Not bad by government standards.
Christine Romans "Minding Your Business." Thanks, Christine.
CHETRY: All right. So, if that didn't make you outraged, this next story will. We're talking about the pay that CEOs at banks that received billions and billions of your money, how many millions they are raking in this year. We're going to talk about it.
Twenty-three minutes after the hour.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Game, set, match on this week's road warriors.
ANDY RODDICK, PROFESSIONAL TENNIS PLAYER: I'm Andy Roddick. Welcome to the road.
I'd probably guess I was on the road probably about nine months a year. In my line of work, you're going to miss the people you're close to. A lot of it just revolves around just communicating. I like to kind of know what's going on at home with my friends and what they're doing even if they just went out and had a fun night.
Everything changes and you try to kind of have your own little routine for each place. I have like a kind of a different rotation of two or three restaurants that you're comfortable with. Coffee is not optional for the day. I have to have coffee at some point.
We have kind of fun system when we're on the road. If you do something stupid you get fined and at the end of the year, you kind of put that towards having either a night out or a nice dinner with friends. I backed into a minivan last week. That was a big one.
I also like to finally got (INAUDIBLE). I was a little groggy when I woke up this morning and I tried to turn on the TV with the car keys. That was fun also.
I'm Andy Roddick. And thanks for following me around on the road today. And I'll see you at the next stop.
(END VIDEOTAPE)
(COMMERCIAL BREAK) ROBERTS: Welcome back to the Most News in the Morning. It is one of the world's most precious commodities, water. And one Texas city's thirst is pitting it against its more hydrated neighbors. CNN's John Zarrella (sic) is following that story for us.
ED LAVANDERA, CNN CORRESPONDENT: John and Kiran, it might sound hard to believe but few issues can trigger a political fight with nasty accusations, predictions of doom and gloom quite like water. In this case, a fight over where Dallas will get its water in the future.
(BEGIN VIDEOTAPE)
LAVANDERA (voice-over): It's an ominous warning. Dallas city officials say if new water resources aren't tapped into, the city will run dry in 25 years. But those dire predictions don't bring a tear to Michael's Banks' eyes. He thinks of Dallas as a water hog.
MICHAEL BANKS, JACKSONVILLE, TEXAS RESIDENT: It's not a necessity for them to have the water. They want the water, but it's not a matter of survival.
LAVANDERA: Banks lives in Jacksonville, Texas, about two hours southeast of Dallas. Jacksonville is where Dallas is fighting to build a new reservoir along the Neches River. Opponents say it will destroy their environment.
BANKS: They shouldn't take our natural resources here that we have so that they can have water to waste. That's not right.
LAVANDERA: Dallas has the highest daily per capita water use of the top five populated cities in Texas. But city officials stressed a water conservation program started eight years ago has saved 84 billion gallons of water and far from being water hogs, residents are using less than ever before.
CAROLE DAVIS, DALLAS WATER UTILITIES: I think that it's unfortunate that Dallas has that problem because we've made significant strides in saving water since we launched our water conservation program.
LAVANDERA: But Dallas has an image problem. Recent reports highlighted the water use of the city's rich and famous. The top ten water users alone which include billionaires Ross Perot and Tom Hicks use more than 55 million gallons of water last year. Their collective water bill totaled about $275,000. But Dallas officials say commercial and industrial growth is the bigger factor behind the city's growing thirst for water.
DAVIS: No doubt at some point we're going to need some new water supplies, but we have done a tremendous amount of work and Dallas residents deserve a lot of credit for making sure that the water we have now we're using it wisely.
(END VIDEOTAPE)
LAVANDERA: Right now, the city of Dallas is looking to build several reservoirs but it seems wherever Dallas goes looking, a fight erupts. Those reservoir proposals are tied up in lawsuits which could take years to resolve -- John and Kiran.
ROBERTS: Ed, thanks so much. Ed, thanks so much.
Just about half past the hour. Twenty-nine minutes after actually, and checking our top stories.
Pfizer, the world's largest drugmaker, has agreed to pay a record fine of $2.3 billion to settle charges that it illegally marketed prescription drugs. Authorities say Pfizer was promoting Bextra and other drugs for uses that had not been approved by federal regulators and was giving doctors free golf jackets and massages to push their products. Not a happy ending for Pfizer.
NASA is keeping a close eye on a large piece of space junk that is headed in the direction of the shuttle Discovery and the International Space Station. The debris from an old European Arian (ph) rocket is expected to pass within two miles of the outpost on Friday morning. NASA says a decision will be made today about whether to move the station after tonight's spacewalk. If they think it's in the way, then they'd hit the booster and take it to a different orbit.
Economists may be speculating that the recession is over but most Americans don't see it that way. In a CNN/Opinion Research Corporation poll just released this hour, nearly seven out of ten people believe things are going badly in the country today. As for the current economic conditions, 36 percent say we are still in a serious recession. Thirty-nine percent believe it's a moderate recession, and 12 percent describe it as a mild recession. Just 12 percent of people think the recession is over -- Kiran.
CHETRY: Well, speaking of the recession, banks needed a bailout. The CEOs definitely do not.
We first told you about the story yesterday. There's a new report. It comes from the Institute of Policy Study. They've done this report for 16 years about CEOs pay. Chief executives from the top 20 banks that got billions of dollars in taxpayer money were then paid on average nearly $14 million each last year.
So to help talk us back from the ledge, I guess you could say is Jill Schlesinger (ph). She's the editor-at large for CBS Money Watch.com. She talks about the bailout barons, and how all of this stuff works.
Good to see you this morning by the way.
JILL SCHLESINGER, EDITOR-AT-LARGE, CBSMONEYWATCH.COM: Good to see you.
CHETRY: So, I mean, you know, it's just -- it seems like an easy shot to say this is outrageous, but it sounds outrageous. These are the same banks that took billions again that many economists say brought our -- you know, brought the nation to its knees and almost caused us to go back into a Great Depression, and now they're sitting pretty. They're making millions.
SCHLESINGER: They are making millions not just in compensation, but many of these executives have stock or stock options in the companies. So what has happened is as we've recovered and as the share prices of their companies have recovered, they look like they bundled up about another $90 million that's not even accounted for in compensation.
Why does this drive us crazy?
Because just look at your CNN poll this morning. Seven out of ten Americans still think the economy is in the tank. And when you read this report, it makes all of us feel a little bit nauseous to see that there is still this compensation issue. We haven't learned any lessons.
CHETRY: No. But the other thing, too, is we're all wondering how it was allowed to happen. One of the ways the bailout was sold, you know, to people is that look it's because we need to give billions but we promise that at the end of this there's going to be some changes in place. They're not going to be able to do what they did to bring the financial, you know, institutions to the brink. There's going to be changes, but instead, boom, they outsmarted us once again, right? They paid back all the bailout money so they can pay whatever they want to their CEOs.
SCHLESINGER: And so, before I get in trouble with all the guys on Wall Street, they're going to tell you, and this is true, we paid back the money. Taxpayers made money on these investments. And it is true, if you go and you look at these reports, we did make money for the companies that have paid our money back.
There's also, of course, all those institutions that are still sitting on taxpayer money, and we're not accounting for the AIGs and the Fannies and the Freddies, which still look pretty sickly. But on the other hand, you know what, if they're going to pay the money back, then they're going to compensate however they want.
My question is, how are the boards and the shareholders letting this happen?
How is this possible?
How could you possibly say to your CEO, here you're worth it, because this year it's better off. We just went through this horrible, horrible crisis. I don't get why boards and compensation committees and shareholders themselves aren't just freaking out and saying, no, this is not going to happen again because the government cannot do it.
CHETRY: Right. So this is why, we have hired -- Obama administration has hired a new compensation czar. This is a person by the name of Kenneth Feinberg. And his role -- this was back in June. He was hired in the wake of all of this, and all the outrage over the AIG bonuses and on and on and on.
What control does he have, if any, over these CEO compensations?
SCHLESINGER: For those that have not paid back any money, that's including the car companies as well...
CHETRY: Right.
SCHLESINGER: So he gets to go in and say approve the bonuses and the compensation for the top 20 employees. Now if you wonder if financial innovation is dead, I'm sure that all those companies financial innovation is alive and well because they're going to figure out how to get around this.
Mark my word, I'm not happy to report this, but I am telling you people are going to get paid a lot of money at all of these companies, even the ones that have received taxpayer money and have not paid it back. They will figure out a way around this. It's really sort of sad.
CHETRY: OK. So that make -- you make it sound like compensations are pointless. It doesn't have any power.
SCHLESINGER: I think that he has power over some of those companies, but I really believe in my heart of hearts that it will go back to this, you know, listen, there's only two emotions. There's fear and there's greed. When they are no longer fearful, everyone gets greedy. And when people are greedy, they're going to pay lots of money.
It's also why shareholders and boards kind of let it go when times are good. And we expect more from that. The compensation issue is so big, but it's really a bigger issue about why are these companies feeling so good and paying so much when the rest of the country feels so bad. It is like a two tiered recovery.
CHETRY: And that's the other question I was going to ask you about. Ali Velshi has been on the road. He's been talking to every day folks on the CNN Express Bus. One of the places he stopped was like -- I believed it was in Evansville, Indiana, where he stopped and, there's a bunch of employees that worked for whirlpool that are now facing the very real possibility that their jobs are gone. That they're jobs are going to go overseas.
They say they took concessions. They agreed to get paid less to get less benefits. Anything to keep their jobs. These are, you know, average Americans who are losing their jobs and really feeling that we're in bad times. And then we hear stories like this.
What about the PR part of this?
What about the fact that, you know, how can it be that banks are making so much and the every day folks feel like, wait a minute, what's going on for me?
SCHLESINGER: One statistics in that survey that we're just talking about gave a big broad number which is sort of telling that the average CEO of an S&P 500 company makes 430 times more than an average employee.
CHETRY: Right.
SCHLESINGER: That's sort of a staggering number.
CHETRY: Right.
SCHLESINGER: And I think that what's hard is when you have people who are struggling -- and these are not, just to point out to everyone, these are not necessarily people who took bad loans and lived in debt.
CHETRY: Right.
SCHLESINGER: This is -- this is like the second generation of the recession. These are people who were hurt by downsizing, who have to take lower wages, and so, when you look at those people, you say, oh, gosh, how could they -- couldn't the company sort of have a little more grace in all of this? The answer is no. And I think they are willing to fight the PR battle, because they didn't make as much money last year, and by the way, the guys who did survive on Wall Street probably took a big hit to their income in the last year.
CHETRY: Right.
SCHLESINGER: I get that. This year they want their money back. And what they're doing is they're going to their bosses and they're saying if you don't pay me, I'm going out. I'm done. I'm going to go to a hedge fund. I'm going to go to a private equity fund. I'll get paid there so if you can't figure out a way to keep me, I'm out of here.
And for some reason, all of these guys at the companies think the ones they have are the only ones who can do the job. I can't believe that, but that is the culture.
CHETRY: Right.
SCHLESINGER: We got to pay to keep you.
CHETRY: And it's very interesting.
I just -- quickly before we leave, so you said they make -- what we found is they made 309 times, these top executives more than the average U.S. worker. Generation ago, they only made, only but 20 to 30 to 40 times more. So we have seen a huge exponential jump in that just in a generation.
SCHLESINGER: And that is a wage gap that is unlikely to close in the near term. Wage stagnation is with us. We're going to see that in all the jobs reports. And that's the sad truth. That's what breeds this contempt. That's why people gets so angry.
CHETRY: Jill Schlesinger, great to talk to you.
SCHLESINGER: Thank you. CHETRY: Thanks for being with us this morning -- John
ROBERTS: And then there were two.
ABC News sets a new anchor. We'll tell you all about the change, big change coming right up.
It's 37 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning.
It's 40 minutes past the hour right now. And there's going to be a new face now in the evening news.
Charlie Gibson retiring after more than three decades at ABC. And he'll be replaced as the anchor of "World News" by Diane Sawyer.
ROBERTS: The move creates a television first. Two of the three evening newscasts will now have a woman in the anchor chair.
Our Alina Cho here this morning taking a closer look at that.
Good to see you.
ALINA CHO, CNN CORRESPONDENT: You're outnumbered. You're going to be out.
ROBERTS: It's a good thing.
CHO: It's a good thing.
ROBERTS: I'm outnumbered this morning.
CHO: Yes, that's right. We all think it's a good thing.
Good morning, guys.
Good morning, everybody.
It is hard to believe that it's already been three years since Katie Couric took the helm of the "CBS Evening News." Well, now, it's Diane Sawyer's turn.
ABC has announced that Sawyer will soon replace Charlie Gibson as anchor of "World News." A huge accomplishment, not just for Sawyer, but for working women everywhere. It has been a bumpy ride to the top, and this could be a tough climb, too.
(BEGIN VIDEOTAPE)
CHO: When Diane Sawyer makes the switch from morning to evening news anchor at ABC this January, she'll make history. Two of the three network evening newscasts soon will be anchored by women.
UNIDENTIFIED FEMALE: We have been waiting a long time for this moment when it would no longer be tokenism to have a woman.
CHO: But if history is any guide, Sawyer will have to work for every viewer. Women have been in this role before, but never with great success.
HARRY REASONER, TV ANCHOR: Thank you, Barbara.
CHO: Barbara Walters and Harry Reasoner.
DAN RATHER, TV ANCHOR: Welcome, Connie.
CHO: Connie Chung and Dan Rather. Elizabeth Vargas and Bob Woodruff.
I think it hasn't worked out in the past, not because the women weren't qualified and ready for the job, but because they weren't given the support they needed.
CHO: Enter Katie Couric.
It's been three years since she became the first woman to solo anchor a network evening newscast. After a splashy debut on the "CBS Evening News" in 2006, Couric tinkered with the format and lost viewers. She's now firmly in third in the evening news race. Now with Sawyer about to become Couric's competitor again...
UNIDENTIFIED MALE: The chattering classes in the media always love the prospect of a cat fight.
CHO: Sawyer's more immediate pressure will be keeping viewers tuned into a broadcast that currently holds a solid second place in the ratings.
UNIDENTIFIED FEMALE: Everything she does will be looked at through a lens that probably isn't fair, yes, it's unfair, but it will happen.
UNIDENTIFIED FEMALE: I think one thing we can watch for is if we hear the same criticisms of both, it will be somewhat suspicious because they're very different women.
CHO: Which should make for a healthy three-way competition among the network news anchors no matter what their sex.
UNIDENTIFIED FEMALE: How can we even be asking the question? You know, can a woman do this job as well as a man, and can a woman lead any program to a successful decision. The answer has got to be yes, resoundedly yes.
(END VIDEOTAPE)
CHO: Now, Sawyer's competitors were quick to put out statements yesterday. Brian Williams called Sawyer a legendary name in the business, and said, "I would love to say that "ABC's loss is NBC's gain, but then they went and appointed Diane Sawyer to replace Charlie Gibson. That doesn't lesson the competition one bit." Katie Couric added, "As I did, I'm sure she will quickly find that she doesn't miss that early morning alarm clock."
Certainly, we can relate to that.
You know, John, I know you worked with Connie Chung over at CBS. It's been a long time on the phone with her last night. You know, she said she was thrilled. She said this is long overdue. Another breakthrough. She said, I only wish this would have happened at a time when the evening news was more of a dominant force, you know, maybe a decade ago or two decades ago.
But, you know, another person said, you know, maybe what the networks are finally doing is that they're recognizing that women are half the audience.
And how about this? Eighty-five percent of the purchasing power.
ROBERTS: Yes.
CHO: So, you know, it's a good thing.
ROBERTS: You know, they still draw a lot of eyes every night. And I think she's going to be terrific.
I have an amazing amount of respect for her. And if anybody can do it, Diane can do it.
CHO: Let's not forget...
ROBERTS: I think she'll be very successful.
CHO: She will be. You know, she's the first female correspondent of "60 Minutes," remember, back in the day. She's covered the State Department, presidents, dictators, you know, she's been through it all over her more than three decades in the business. So you're absolutely right.
CHETRY: She has.
And Charlie, he said he's taking a little bit of a break. He may come back.
(CROSSTALK)
CHO: I have a sneaking suspicion.
CHETRY: Right.
CHO: He may be back from time to time as Tom Brokaw is over at NBC.
ROBERTS: Let's see.
CHO: So we'll wait and see.
ROBERTS: So we got a lot of weather to talk about this morning. We got Jimena out there on the Baja and California. Tropical Storm Erika entering into zone of uncertainty there in the Caribbean. What's going to happen?
Our Jacqui Jeras got the forecast for you coming up next.
Stay with us. Forty-five minutes now after the hour.
(COMMERCIAL BREAK)
ROBERTS: The Capitol Dome this Thursday morning in Washington, where it's currently 62 degrees going up to a high of 80. Going to be mostly sunny there today. Absolutely beautiful day.
Same can't be said for everywhere, particularly if you're in the Leeward Antilles where you're watching for a tropical storm. And the big question is where is it go, and what sort of strength might it obtain?
Our Jacqui Jeras in the weather center in Atlanta with all of the data for us this morning.
Good morning, Jacqui.
(WEATHER REPORT)
ROBERTS: All right. Jacqui Jeras with the forecast for us this morning.
Thanks, Jacqui.
CHETRY: All right. Well, Sarah Palin's almost son-in-law, this is the father of her daughter, Bristol's baby.
ROBERTS: Can you imagine if that have gone through?
CHETRY: Yes. Well, he wouldn't be talking, that's for sure.
Levi Johnston is dishing yet again, and possibly posing nude.
When does it end?
Forty-nine minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Fifty-two minutes past the hour.
Welcome back to the Most News in the Morning.
Sarah Palin's almost son-in-law, Levi Johnston, is at it again. He's turned Palin bashing almost into a cottage industry. Well, now, Levi is dishing the dirt in "Vanity Fair" magazine, and he may soon be revealing even more than that.
Here's Jeanne Moos.
(BEGIN VIDEOTAPE) JEANNE MOOS, CNN CORRESPONDENT: (voice-over): Don't jump, Levi Johnston, not when you've just made it into "Vanity Fair." And to add to your vanity, now "Playgirl" tells CNN it's finalizing the details, that they're very close in negotiations to have Levi pose at least semi-nude.
Even at the "Vanity Fair" shoot, Levi and his manager were talking about "Playgirl".
(BEGIN VIDEO CLIP)
LEVI JOHNSTON: I'd do it. I'm guessing it's a dude posing for women.
UNIDENTIFIED MALE: Yo, you got to have some Johnson. You can't come in there lacking in the Johnson.
(END VIDEO CLIP)
MOOS: Hey, he's already posed half naked in "GQ" and his baby was totally nude. For "Vanity Fair," the clothes make the man.
(BEGIN VIDEO CLIP, COURTESY "VANITY FAIR")
UNIDENTIFIED MALE: What you see right here is Wasilla wear. We're going to show you "Vanity Fair" wear.
See?
(END VIDEO CLIP)
MOOS: And when he stepped outside to pose on a ledge, he was also wearing a harness that Levi explained back when he escorted comedian Kathy Griffin to the Teen Choice Awards.
(BEGIN VIDEO CLIP)
JOHNSTON: I was looking down about 25 stories. I was all harnessed up, but, you know, it was a little scary.
KATHY GRIFFIN, COMEDIAN: By the way, we're going to re-create that later tonight at my place.
UNIDENTIFIED FEMALE: OK. Sounds good.
GRIFFIN: I've got the harness, the camera. It's going to be great.
(END VIDEO CLIP)
MOOS: To think that it was just last summer that Levi Johnston was awkwardly holding Bristol Palin's hand on stage, getting patted by John McCain as he was welcomed into the political family. And now...
(VIDEO CLIP)
MOOS: ...he's in "Vanity Fair" video waving a mask of his almost, but not quite, mother-in-law.
He's spilling more beans, writing that Sarah Palin nagged him about a great idea she had: "We would keep it a secret. Nobody would know that Bristol was pregnant. She told me that once Bristol had the baby, she and Todd would adopt him."
No comment from Sarah Palin.
"Playgirl" isn't the only racy outfit out to get Levi. The gay magazine "Unzipped" has a standing offer, says its editor.
RICK ANDREOLI, EXECUTIVE EDITOR, UNZIPPED MEDIA (via telephone): He's a really handsome guy. He's rugged. He's a real guy's guy.
MALVEAUX (on camera): And who knew?
"Playgirl" magazine doesn't even exist anymore. All there is, is an online version.
(voice-over): "Playgirl" says it's hoping for a long-term relationship with Levi Johnston. Of course, so were the Palins. Reports are that he wants to keep his skivvies on, though everyone is trying to separate Levi from his Levis.
Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
CHETRY: I wonder what's going on at the Palin household when they hear about this.
ROBERTS: Can you imagine if the two of them have had gotten married?
Wow.
CHETRY: He wouldn't be...
ROBERTS: It would have been like a little nuclear explosion right there in Wasilla.
CHETRY: He probably would have had to keep a little more quiet as he's the son-in-law.
ROBERTS: And being the curious person that I am, kind of naturally inquisitive, I logged on to playgirl.com this morning just to see what's up.
CHETRY: That's not different than any other morning.
It was just for research purposes only. So if I.T. comes down here and confiscates our computers, it was because of this.
ROBERTS: I thought that I would, you know, full disclosure this morning just in case they find out.
(LAUGHTER)
Anyways, the tragedy over the Hudson River a couple of weeks ago -- remember the helicopter and the plane?
New regulations for that airspace some people saying doesn't even begin to go far enough. We'll tell you all about it.
Fifty-five minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning.
That dramatic turn of events over the Hudson River after last month's mid-air collision between a helicopter and a sightseeing plane killed nine people. The FAA just announced new safety rules for that small and overcrowded piece of airspace.
Our Allan Chernoff has broken several stories on danger in the skies, and he joins us now for the latest on this one.
Good morning, Allan.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Good morning to you.
And, you know, that really is just a very, very busy piece of highway in the air. And, of course, we have that tragic accident last month in which a helicopter and a small plane crashed into each other. Nine people were killed. The FAA wants to make sure that does not happen again.
So what they're going to do here is they're going to make mandatory rules. Right now, everything is voluntary pretty much. It's see and avoid. And that see and avoid approach will continue, but what the FAA is doing here is they're going to split up the airspace above the Hudson River. Now that's between New Jersey and Manhattan.
What they're going to do is, first of all, on the first level between the river and 1,000 feet, that's where the helicopters will be, the tour helicopters. Just above that is an airspace, a 1,000 feet to 1,300 feet, and that's where planes, small private planes that want to pass through the area, they will be in that corridor, and above 1,300, that's where the big planes will be and they will have to get approval from air traffic control to fly through.
So they're trying to make those rules very tight and very easy, because right now some of those numbers vary depending on where you are on the Hudson River.
There also are going to be a list of very simple mandatory rules. These are all recommended right now. First of all, when a plane does go into that corridor, it will have to announce on a radio frequency that it is entering. Anti-collision devices if a plane has them, if a helicopter has them. Those will have to be on. They will have to be on. Lights will have to be on. And the speed limit about 122 miles an hour. It's 140 knots. So that's the equivalent there or less, so they want to keep the speeds down. And, hopefully, all of this will prevent another tragedy from happening. The FAA says it expects to have these in place by mid-November. The rule making takes a little time.
ROBERTS: Politicians here from New York State, they're saying, it doesn't even come close.
(CROSSTALK)
CHERNOFF: They're not happy. And, you know, obviously -- look, you have a lot of constituents here. You have the helicopters that want to remain in business providing the sightseeing and FAA is trying to accommodate them as well. But, yes, a lot of the politicians are saying not enough. We've got to make it even tighter.
ROBERTS: Allan Chernoff for us this morning.
Allan, thanks so much.
