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Candidates agree to run-off election in Afghanistan; President Obama's poll ratings show mixed signs; experts criticize Obama administration's weak financial regulation policies; Reforms for Wall Street; What You Should Do With Your 401(k)

Aired October 21, 2009 - 07:00   ET


KIRAN CHETRY, CNN ANCHOR: And welcome once again. We're coming up on the top of the hour on this Wednesday, October 21st. Welcome to AMERICAN MORNING. I'm Kiran Chetry.

JOHN ROBERTS, CNN ANCHOR: And good morning to you. I'm John Roberts. Thanks for being with us today. And here are this morning's top stories. We'll be following them for you in the next 15 minutes.

A logistical nightmare in the country on edge. Right now, Afghanistan gearing up for a presidential runoff in just a little more than two weeks. We're live at the White House with what it means for the possibility of sending more U.S. troops to the region.

CHETRY: And the markets are up. We're back from the brink. And you've finally gotten the courage to look at your 401(k) again. So, what should you do now? Where should you invest? Christine Romans with new information this morning on getting your retirement plan in order again.

ROBERTS: And conservative voices dominate talk radio. Is it fair or should conservatives and liberals have the same amount of air time coming up in our special series talk radio. We'll show you why some are pushing for what they call fairness on the air.

This morning Afghan voters who risked their lives two months ago for a budding democracy are being asked to do it again. The November 7th presidential runoff getting the green light with the help of Massachusetts Senator John Kerry. And today, Senator Kerry is back in Washington to meet face to face with President Obama.

In the mean time, President Hamid Karzai's main challenger Abdullah Abdullah insisting the government must ensure a safe and fair race. Our Suzanne Malveaux is live at the White House for us this morning. And Suzanne, could this runoff lead to a decision on U.S. troop levels the White House has been looking for stability and legitimacy in the Afghan government?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: It certainly could John. One of the key things here is this was a full-court press. A senior administration official told me the reason why they involved Senator Kerry, Secretary Clinton, many other officials is they're trying to establish some legitimacy with the Afghan government here before they can commit to additional U.S. troops.


MALVEAUX: President Obama is trying to wrap up one war while stepping up another. In Iraq, it's about getting out, a pledge he reiterated to Iraq's prime minister.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: That we will have our combat troops out of Iraq by August of next year and all of our troops out of Iraq by 2011.

MALVEAUX: President Obama needs those troops for the war in Afghanistan, anywhere from 10,000 to 40,000, depending on who he's talking to from inside his war council.

But Mr. Obama is first trying to assess whether he has a legitimate partner in the Afghan government after international monitors concluded the election was a fraud.

OBAMA: This has been a very difficult time in Afghanistan.

MALVEAUX: Afghanistan's president, Hamid Karzai, has agreed to a do over on November 7th after urgings from a high level delegation including Senator John Kerry.

President Obama called and congratulated Karzai for his cooperation. But it's still uncertain who, if anyone, will provide a stable government that the U.S. and NATO allies could partner with to take on the Taliban and Al Qaeda.

OBAMA: We will continue to work with our ISAF partners as well as the Afghan government however this election turns out.


MALVEAUX: So John, on the one hand, this does buy some time for President Obama to make a decision about U.S. troop levels, but on the other hand, it really presents another challenge here, whether or not Afghanistan is capable of a democratic government, a democracy, and whether or not it's even worth it to send those U.S. soldiers -- John?

ROBERTS: Suzanne Malveaux for us at the White House for us this morning. Suzanne, thanks.

And stay with us, because coming up at 7:30 eastern on the most news in the morning, will the November 7th runoff actually happen, or could we see some kind of power sharing deal take place before then?

We'll speak with Zalmay Khalilzad. He's a former U.S. ambassador and special envoy to Afghanistan and just returned from the war zone - Kiran.

CHETRY: Well, it's crunch time for President Obama on some controversial issues from health care to Afghanistan to the economy.

And there's a new CNN research poll finding that for the first time since he took office a majority of Americans don't see eye to eye with the president. But it's not all bad news for the White House. Our senior political correspondent Candy Crowley is digging deeper for us.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Good morning, Kiran and John. This poll is a mixed bag for the president. He has been in office for nine months and he's still an overall pretty popular guy, but the wear and tear is starting to show.


OBAMA: What did I say during the campaign? I said change is hard. And big change is harder.

CROWLEY: And he's got the polls to prove it. As the president navigates his way through a series of issues as controversial as they are vital, he's getting a yellow flag from the American people.

New polling finds for the first time fewer than half of Americans agree with the president on issues important to them. A majority, 51 percent, disagree. That's a 10 point jump since April.

OBAMA: It's all -- I love you back.

CROWLEY: Despite the majority disagreement on issues, the CNN research corporation poll also found his approval rating remains in the healthy mid-50s, and two-thirds of Americans say he has the personal qualities a president should have.

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: It's awfully early yet, but this president might be shaping up to be a little like Ronald Reagan, where people actually didn't on which agree with Ronald Reagan's ideas, but they loved the guy.

CROWLEY: A popular president who is less popular on the issues. That's a way to work this.

KEATING HOLLAND, CNN POLLING DIRECTOR: They still like the messenger. That's important for Obama because he'll be able to look presidential and Americans may respond to that as he's right to go make a pitch for his health care plan, financial reform, whatever he decides to do in Afghanistan and Iran.

CROWLEY: And about that Nobel Prize even the president seemed stunned he got --

OBAMA: To be honest, I do not feel that I deserve to be in the company of so many of the transformative figures who have been honored by this prize.

CROWLEY: Americans agree. Only about a third believed the president deserved the price, 56 percent say they disapprove of the decision by the Nobel Prize Committee to give it to him.

Still, there's a hometown hero effect here, with almost 70 percent of the people saying they're proud an American won it. And then further proof of that old adage that Americans like their politicians most when they're not running for thinking, the most popular person in the Obama administration is not the still popular president.


CROWLEY: It's his secretary of state. You remember her, once seen as a sharply divisive politician, the also-ran of the 2008 primary season, Hillary Clinton is now viewed favorably by 65 percent of Americans outshining even Michelle Obama.


CROWLEY: And in those numbers for the secretary of state is the fundamental verity of public opinion. It changes. Most Democrats eyeing the 2010 election cycle believe that a health care reform bill signed, sealed, and delivered will turn around what has been steadily declining numbers on a variety of issues -- Kiran and John.

ROBERTS: Candy Crowley for us this morning. Candy, thanks so much.

As we come up on six minutes after the hour, also new this morning, federal safety officials issuing a wake-up call this morning about a sleep disorder they say is putting passengers on almost every form of transportation in danger.

The NTSB wants federal agencies to test commercial pilots, bus drivers, sailors, and engineers for sleep apnea after several deadly accidents and close calls over the past few years.

CHETRY: A U.S. Navy war ship trolling for pirates off the coast of Somalia seizing four tons of illegal drugs with a street value of $28 million. Officials say that the crew of the USS Enzio discovered the drugs last week after boarding a small boat that they suspected was carrying pirates. The navy says the drugs were then thrown overboard.

ROBERTS: And the Yankees win and are now one win away from going to the World Series. They beat the Los Angeles Angels 10-1 to take a commanding 3-1 lead in the American League championship series.

The Yanks were led by Alex Rodriguez, who homered for a third straight game and fifth time this postseason. The Yanks can clinch the series with a win in game five Thursday in Anaheim.

CHETRY: And if they take on the Phillies in the World Series that would be interesting.

ROBERTS: It would be a "turnpike series."

CHETRY: "The I-95 series."

ROBERTS: The "corridor series," "turnpike series." But it would be a good series. The Yankees, what a powerhouse team this year. More reason to hate them for a lot of people in this world. More reason to love them, too.

CHETRY: The Mets fans are nodding.

Well, the official White House Christmas tree has how been chosen, a beautiful Douglas fir, hand-selected from a tree farm. I can never hear that music soon enough. Thank you, Brian. It's from Shepherdstown, West Virginia.

ROBERTS: Take a look at this, the photos courtesy of "The Washington Post." Michelle Obama requested a tree at least 18.5 feet high for the White House blue room with very full branches to handle all the family ornaments.

Well, she can't get her 18 1/2-foot tree. She got a 20-footer. It will be delivered to the White House in late November.

CHETRY: There you go. It's a lot of ornaments.

Still ahead, he's called the sheriff of Wall Street. Former Governor Eliot Spitzer is here to talk about what's going on with the regulations. Are regulations going to be put into effect, are any laws going to be passed to change the ways Wall Street does business that got us in the mess in the first place? He joins us in just a minute.


CHETRY: Midterm elections are less than two weeks away and President Obama is busy helping raise millions of dollars for Democrats. In fact, he was in New York last night headlining a $30,000 a couple fundraiser scheduled to attend four more next week.

And with a lot of Wall Street executives in the audience last night, the president decide it make a pitch for regulating financial firms. Let's listen.


OBAMA: There are members of the financial industry in the audience today. I would ask that you join us in passing what are necessary reforms. Don't fight them. Join us on it. This is important for our country.



CHETRY: Joining us now, Eliot Spitzer, the former governor of New York, also known as the sheriff of Wall Street when he was the state's attorney general.

He has some strong views on the administration's reforms and the billions in bonuses banks and financial firms are preparing to pay their executives. Good to have you with us, this morning.

ELIOT SPITZER, (D) FORMER GOVERNOR OF NEW YORK: It's a pleasure to be back.

CHETRY: So let me ask you about this. It seems a little bit strange at the same time that you're commanding $15,000 a plate from people who can afford it, a lot of big business, at the same time you're saying "Rein yourself in." So is there a contradiction there?

SPITZER: There is, but it's worse than that, because the moment to impose the reform was when we gave the industry trillions of dollars. We gave them all the money and yet have not imposed upon the industry anything close to the necessary reforms that were appropriate.

Paul Volcker, you can read it in today's papers, is saying this administration is not going anywhere far enough. I've been saying, many other, even Alan Greenspan, that we have to restructure banking because they're making millions and millions of dollar, billions of dollars, using our tax dollars to play with it in the marketplace, and then taking those profits out in bonuses instead of lending it to the businesses that need the cash an capital to expand.

The industry is opposing the fundamental reforms that are necessary. Tim Geithner had all the negotiating power in the world. He didn't use it. Tim Geithner continues to be the voice of Wall Street, not Main Street. This administration has not gone anywhere close to far enough to reform the banking sector.

CHETRY: Let's take a few of those pieces and tease them out and talk about it.

First of all, former Fed Chair Paul Volcker. People say he's probably the most prominent economic adviser for the White House outside of the administration.

And I just want to tell you what he said. He said that the nation's banks need to be prohibited from owning and trading risky securities. That's what many people say caused all of our big problems.

SPITZER: True statement.

CHETRY: The administration is saying, no, they do not want to separate commercial banking from investment operations.

Why the leeriness to try to make that happen?

SPITZER: Because -- I will not justify this administration on this at all. They are wrong. They are defending a status quo that got us into this problem in the first instance.

They have embraced the same policies of the Bush administration had in terms of rebuilding the same edifice of banking that permits the Goldman Sachs and Citibanks and Morgan Stanleys of the world to use taxpayer dollars, trade in the market place with highly risky derivatives a and other stocks and other investments, make money when things go well and take it out as bonuses.

And when things go bad, taxpayers bail them out.

What Paul Volcker is say, everyone Alan Greenspan, over in Europe, they're saying the same thing. Some of us have been saying it for a long time, too big to fail is too big. The federal guarantee should not permit them to get involved in these risky transactions.

CHETRY: So didn't we see this coming, is what a lot of people are asking. There was a lot of talk about strings being attached to this bailout money. No one was watching this process and saying this needs to happen?

SPITZER: Well, look, again, I don't want to say go back and read the articles that many people including I were writing saying you're missing your opportunity, but when the banks were back on their heels begging for money, when AIG went bankrupt, when Goldman Sachs was teetering, even though they'll deny it, they got a check for $12.9 billion from the taxpayer. We asked of them nothing.

Tim Geithner missed the opportunity right then. You need to know when to negotiate. Now you have the president saying please join us.

CHETRY: Right.

SPITZER: And the banks are going to let the capital (ph) saying, hey, look at all the money we're making, look at all the contributions we're making, look at all the lobbyists we have pushing back, defeating the fundamental reforms and the administration has caved on everything from the ability of judges to reform mortgages to the obligation of banks, to give plain vanilla mortgages and credit card applications and deals. The administration has caved on the most important issues and now they come as a supplicant but it's too late.

CHETRY: But the bottom line is Congress could be writing laws right now calling for more regulation.

SPITZER: They could be, they should be, but right now unfortunately we missed the opportunity. We can still fight this battle and Paul Volcker to his credit is out there in today's "New York Times" article is right on, spot on. Paul Volcker is the voice they should be listening to. He has the wisdom, the experience, even Alan Greenspan, the Bank of England, everybody else out there other than Tim Geithner I don't get.

CHETRY: Right. All right. Well, let me ask you about this then, the argument that we're better off today than we were a year ago and the fact that these bonuses are important because of the tax base they provide for the cities and the states. And I mean, Mayor Giuliani when he was here said we relied on these bonuses.

SPITZER: I, as the former governor of New York, have been telling you those bonuses generate taxes for the state of the New York.

CHETRY: Right.

SPITZER: That is hardly a reason to (INAUDIBLE) an ill-formed (ph) and flawed banking structure.

We're better off because we took trillions of dollars of taxpayer money, gave it to the banks. And the banks, of course, are now solvent. Anybody will be solvent if you give him trillions of dollars. The question is what do they do with it? Do they then build an economy that's growing?

Unemployment is continuing to rise. Asian and European economies are growing because they are restructuring their economy. What we're doing here is just giving money away to the banks. It's not working because they're just playing with it like a casino.

CHETRY: And it is important to point out that the banks that are talking about this billion dollars in compensation are the ones that paid back the money with interest.

SPITZER: No, they didn't. They paid back the TARP money. No, no, no. The TARP money, but not -- the AIG bailout is a classic example. $80 billion, that was the first round, $180 billion total. Of the $80 billion that went to AIG, immediately went through to the counter parties from CDS transactions.

Goldman Sachs got $12.9 billion free and clear. They're never paying it back. That is just about identical to the amount they're paying out in bonuses. Tax dollars went to them to payout billions of dollars of bonuses, will never come back to the taxpayer. Nobody has explained why they got 100 tenths of a dollar or why they got anything. These are the issues that have to be answered.

CHETRY: And many say that the AIG money is never coming back.

SPITZER: It will not come. And Tim Geithner should have gotten stock in Goldman, not in AIG. Again, I don't think he has negotiated at all effectively on behalf of the taxpayer.

CHETRY: All right. We have to leave it there, but it was great to talk to you and to get your point of view. Eliot Spitzer, former governor of New York, thanks for being with us this morning.

SPITZER: Thank you.

ROBERTS: All right. So there is all this controversy over the investment houses and the amount of bonuses that they're paying out more than they did with taxpayer dollars or what not. But the bottom line here is that for many people, the value of their 401(k) is actually increasing because the stock market is going up. So what should you do with your 401(k) now that the stock market seems to be showing some signs of life?

Christine Romans is "Minding Your Business." She's got some good tips coming up for you.

Eighteen and a half minutes after the hour.

(COMMERCIAL BREAK) ROBERTS: Beautiful sunrise here over New York City. Supposed to be a nice day today, but unfortunately this weekend is not looking too good.

Checking what's new this morning, Hollywood actress Nicole Kidman is going to be on Capitol Hill today. She's going to testify to members of the House about domestic violence. Not only is it a problem here in the United States, but around the world. Kidman is a goodwill ambassador for the United Nations Development Fund for Women.

CHETRY: Check out this video. A robber breaking down and praying with his would-be victim. It happened at a loan office in Indianapolis. Police say that the woman started talking about God and said, you know, it's not too late for the gunman. And then next thing you know, he broke down. He reportedly even took the only bullet out of his gun as an act of good faith. He did leave with $20, but turned himself in after police say his mother saw him on TV.

ROBERTS: And next year is an experiment Bank of America says it will add annual fees to a small group of customers and that could include people that have never paid late or had a balance. Fees could hit nearly $100.


ROBERTS: Just another way for financial institutions to get more money out of your pocket.


Just be prepared. Even the way you've been using your credit card is going to change. Next year, I mean, I'm anticipating that I'm going to get a fee. I mean I pay on time every month, but I'm probably going to get an annual fee. They're going to charge you for the use of your money -- to borrow money.

CHETRY: The mattress is looking better and better. No, I'm kidding. You're here to tell us what we should do about, right, about retirement.

ROMANS: 401(k). You know, I wanted to do a gut check on your 401(k) because a lot of people have been asking me now what do I do. I was frozen for months and then I miss this big rally, or I bailed out in March and I miss this big rally. I've got ten years plus to retire and is it too late for me now to be making these changes?

So we talked to a lot of people yesterday and really wanted to get some specific advice for you about your 401(k). First of all, when the market crashed, what did you do? Where do you fit in these categories?

Almost six out of ten made no changes at all-- that would be Kiran Chetry -- made no changes at all to their 401(k).

They did nothing. A 21 percent reduced their stock market investments. They cut back on their stocks. Seventeen percent increased their stock investments.


ROMANS: And five percent bailed out. Now, most of those people who bailed out when you look at the characteristics of these different pieces of the pie, most of these people who bailed out were very close to retirement. Didn't have a lot of time to keep going, so they jumped out. And I thought it was interesting that people who increased their investments, their characteristics were male with a million dollars or more to invest and a very high education, graduate degree or higher.

CHETRY: Well, they're the ones that are making the most money, right?

ROMANS: So what should you do? What should you do right now?

You know who you are now. What should you do right now? If you bailed out, we asked Gary Ambrose from Personal Capital Management, he turned his people a few hundred bucks an hour for this advice, so we got it for you for free, OK?

If you bailed out, he says if you have ten years or more until retirement, get back in some right now. Be ready for another dip, he says, but get back in. If you did nothing, good for you, he says. You made the right decision. You didn't trade on your emotions. Just hang in there and keep going.

If you bought, that was also a good move. He said recheck your allocation, adjust it periodically, make sure that your allocation, meaning how many stocks, how many bonds, how much cash, is appropriate for you. That might mean taking a little bit off the table after this big rally, but adjusting to where you are.

CHETRY: Did you buy?

ROMANS: I bet he did.

ROBERTS: I just continue to invest. I just held my nose, closed my eyes, plugged my ears and just kept on doing what I was doing.

ROMANS: And both of you are smarter than everybody who bails out and got emotional and bailed out, you know.

ROBERTS: Dollar cost averaging.

ROMANS: But now the question is, is it too late to sort of take a look -- a good hard look at what you're doing? No, it's never too late. And you need to have a plan, even if you bailed on your plan the last few years.

ROBERTS: And the other thing, too, as you get older, you're supposed to rebalance anyway.

ROMANS: Absolutely.

CHETRY: It's supposed to be able to be hit with fluctuations in the stock market as much. It's supposed to reduce your exposure.

ROMANS: All of this advice is obviously for people with ten years or more until retirement. Which brings me to the "Romans' Numeral."

ROBERTS: Yes, and what is that?

ROMANS: It's 44. And it's an age -- 44 years old. Surprise me.

CHETRY: This is the age that people start worrying about retirement?

ROBERTS: No, no, no. The average age that people start investing in retirement.

ROMANS: It's the median age of a 401(k) investor. I was surprised. I was surprised, 44. That means that a lot of people close to retirement have been pulling their stuff out, or they're living on it if they're in retirement. And it means young people sometimes are maybe waiting too long to get in. But 44 is the median age.

If you're young, gosh -- if you're young right now --

ROBERTS: You know the time to get in is when you're 18.

ROMANS: Yes, it's true. Every $2,000 you invest from the age of like 20 or something, it's just incredible, exponentially increases your retirement.

ROBERTS: I remember years ago somebody showed me a prospectus from Templeton Fund. And if you've taken $10,000 and invested it in 1956, by the year 1986, it would have been worth $1.5 million.

ROMANS: That's a good memory.

ROBERTS: Yes. I remember because...

CHETRY: Because you didn't do it?

ROBERTS: No, because a month after I didn't go in, the market crashed. It was '87. A month after I didn't go in, the market went -- so that was one of my better decisions.

ROMANS: Oh, '87 was a good buying opportunity for investors.

ROBERTS: It was.

ROMANS: All right.

ROBERTS: Thanks.

So Carol Costello back again with her series on talk radio. This has created quite a little bit of buzz. Even put her in the sights of Rush Limbaugh who said some rather in-temperate things about her yesterday. Now Carol's got her latest installment coming right up. Twenty-seven minutes after the hour.


CHETRY: Welcome back to the Most News in the Morning. You know when you think of talk radio, you probably think of a conservative host, not a liberal one. It's because the conservative hosts are far more popular and there are many more of them.

Carol Costello is here with us now in her latest installment of talk radio. And we're talking about the fairness doctrine, right? People are saying it's not fair.

CAROL COSTELLO, CNN CORRESPONDENT: That's right. We're talking about the Fairness Doctrine and we're not. In 1987, the Federal Communications Commission, the FCC, rescinded something called the Fairness Doctrine. It required broadcast companies to present both sides of a controversial issue.

Well, since the fairness doctrine went away, was repealed, conservative talk boomed on a.m. radio and liberal talk faded. It's unlikely the fairness doctrine will return, but there is something else many liberal talkers are fighting for, localism.


COSTELLO (voice-over): Randi Rhodes is a progressive political talker.

RANDI RHODES, POLITICAL TALKER: There are literally at war with feeling, not a tactic - a feeling.

COSTELLO: On the air in Washington, D.C. where 93% of voters, voted Obama. Yet the majority of political talk on a.m. radio is conservative.

RUSH LIMBAUGH: The president is presiding over economic failure.

SEAN HANNITY: They just don't want to fight.

UNIDENTIFIED MALE: He owned that crowd.

RHODES: If you know that you live in a town where everybody votes democratic and all you have on your radio is conservative talk, then you can see how localism isn't part of the equation in media programming.

COSTELLO: Localism - simply put, it means radio stations will be forced to carry more local programming that appeals to local audiences. Right now, big broadcasting companies like ClearChannel Communications, CBS and others own hundreds of radio stations across the country. And much of what they broadcast aren't shows with local personality, but syndicated shows featuring Rush Limbaugh

RUSH LIMBAUGH: Economic rebound. . .

COSTELLO: And Sean Hannity.

SEAN HANNITY: Well, he's going to rise a little faster than he ever dreamed.

COSTELLO: Talkers Rhodes says do not reflect D.C.

RHODES: Diversity always gets a better result than just as one steady - you know, walk, step repetition of talking - same talking points, over and over.

COSTELLO: In November, the FCC will hold a media workshop as this is required every four years. Among the topics, the state of the current media marketplace.

BOB DURGIN: Men and women are dying over there.

COSTELLO: Bob Durgin, a conservative talker in Pennsylvania is weary of localism.

DURGIN: They want to program the radio station. They want to tell the people what they're going to hear. They don't want the people hearing what they want to hear. They want the people to hear what they want the people to hear. And they want people - they want people to hear more liberal radio, more diversity.

COSTELLO: Durgin says liberals want it all, even though they have plenty now. Not only on the radio and cable TV - but on commercial TV - and in Hollywood.

Camille Paglia, a social critic and Obama supporter.

CAMILLE PAGLIA, OBAMA SUPPORTER: I find the motivation for this, all this talk about the local show, is actually covert. It's actually a way to try to ambush right-wing radio, which has indeed risen up as a powerful force in response to the shutdown of conservative view points coming from the major media.

COSTELLO: Rhodes disagrees. She says millions of Americans get their political talk from AM radio, 91 percent of which is conservative.

RHODES: I do want to be on their stations. I want a crack at their audience. And let me live and die by the success or failure. But I don't have that - I don't have that access.


COSTELLO: The new federal communications chief is a fan of diversity in media ownership, and some of his hires have upset conservative radio talkers who feel the Obama administration is out to shut them down, even though Mr. Obama has pledged not to reinstate the fairness doctrine or anything that resembles it.

I asked Michael Harrison from "Talkers" Magazine if this idea of localism will be taken seriously by the FCC. He says yes it will be, but the issue is so politically charged right now, he'd be stunned if the FCC went forward with it in any serious way. Karin?

CHETRY: Very interesting. You know, as we said at the beginning of this, Rush was talking about you this week because of your stories. He claims that you're a stalker and that we have a reporter, you, assigned to only cover Rush Limbaugh.

COSTELLO: I know, he said other things that were not very flattering . . .

CHETRY: Yes...

COSTELLO: You know, I don't want to respond to Rush Limbaugh, but I will say this, that if you like at my blog many people have been critical of my reports, those on the right, those on the right, those in the middle, and many more have liked my reports. In my mind, that means I'm doing my job. So keep the comments coming. I welcome them,

CHETRY: Well, great job, Carol. We appreciate it for sure. And we also want to know with Carol loves to hear from you, what's your take on this? Do we need a new talk radio fairness doctrine localisim? Go to our blog, and sound off.

ROBERTS: It is kind of stunning that you can have all that money and all that power and still have skinny as thin as cellophane.

CHETRY: Thirty-five minutes past the hour. Checking our top stories. Are we ready for a swine flu outbreak? Well let Security Secretary Janet Napolitano is going be answering that question testifying to senators in about two hours. And you'll also hear from Health and Human Services Secretary Kathleen Sebelius and Education Secretary Arne Duncan. But before Secretary Napolitano heads to the hill, she'll be talking to us in just about an hour, right there on the Most News in the Morning.

ROBERTS: The American Cancer Society is reportedly working on a new warning about routine cancer screenings. The assumption has been that the scan save lives, but the New York Times reports - the group thinks those tests could miss the deadliest forms of breast and prostate cancer and in some cases lead to dangerous, unnecessary treatment. The report says that screenings can't tell which tumors are harmful and that doctors warn cancer screenings come with both risks and benefits.

CHETRY: A national baby food recall to tell you about this morning. Plum Organics warning about possible botulism contamination. The California company says that the recall cover is one batch of their apple and carrot portable pouches with the best by date of May 21, 2010.

They were sold at stores in Las Vegas, now the company says, for now they have not heard of any babies actually getting sick.

ROBERTS: New developments this morning in the first front of the war on terror. Afghan President Hamid Karzai and his leading rival Abdullah Abdullah now both agreeing to a runoff election on November 7th. And you can bet that American officials will be watching very closely.

Joining me now break it all down for us is Zalmay Khalilzad, a former U.S. Ambassador and Special Envoy to Afghanistan. He was also born and raised in Afghanistan and is currently a counselor at the Center Force Strategic and International Studies. Mr. Ambassador good to see you this morning. So as we said, both Hamid Karzai and Abdbdullah Abdullah have agreed to this run-off election. Do you think it's going to get that far or do you think that the two men could enter into some sort of mower sharing arrangement before that time some.

ZALMAY KHALILZAD, FORMER U.S. AMBASSADOR: I think it's a 50/50 at this stage. Initially the international community preferred that there be a deal between the two avoiding a runoff election, but I think realistically given President Karzai's resistance to that, they agreed to a second round vote, and I would not exclude the possibility that there could be a deal before the actual vote.

ROBERTS: Is that something that they could work -- could you effectively bring Abdullah Abdullah into the government and have him be -- I don't want to be an ally of Karzai, but could you have the two of them work effectively together? What sort of position might he taken in the government?

KHALILZAD It's going to be very difficult obviously to negotiate that deal about the structures of power, who will have what position, the program of the government as well as the structures in terms of the authorities for decision making, but I think it could be done. The danger is that the government would not have as much legitimacy as if it was elected on the second round and also that it could be very weak. So while it's perhaps easier than carrying out a vote, it is not without risk.

ROBERTS: Secretary General Ban Ki-moon said if it does go to a runoff election, that the huge challenges going to avoid the fraud of the first election. Afghan officials are trying to take some steps to reduce that risk, they're replacing the heads of district election offices in more than half of the country.

Do you think that that will effectively cut down on fraud or could we see in November a repeat of what happened in August?

KHALILZAD: We pointed out the problem with the unity issue. There are problems with the election with the vote, as well. The issues of security, a lot of lives were lost during the last vote. Even on the day of election, there was a lot of violence in southern and eastern Afghanistan.

So there could be violence. There is the issue of fraud. Lessons can be learned from what happened during the first round and also there is a danger that a lot of people might not participate in the actual vote. So while will be more legitimacy if there is a vote and perhaps a stronger government, but actually carrying out that vote is not going to be easy.

ROBERTS: So there may be more legitimacy if there is a runoff election, but what about this issue of rampant corruption in the Afghanistan government? Secretary of Defense Robert Gates said yes today that he doesn't see that a runoff election will do anything and have any effect on the corruption in the government particularly if it's Karzai because he's been criticized for having a corrupt government. What do you do about that?

KHALILZAD: Well Karzai and Abdullah are well part of the government for some time and that is sort of the issue, the key issue, after whether the unity government or the election. I think it will be the challenge for us and for the rest of the world to use our liberal to make sure that the government does pay attention to this because without dealing with that issue, whatever legitimacy has been gained, lets say by the vote will be lost. And Afghans will turn away from the government. I think we have been effective to get Karzai to agree to a second round. I think we need to be equally effective afterwards should he be elected that he pays attention to the issues such as corruption that confronts the country.

ROBERTS: And the white house officials have talked about the need for a legitimate partner in the Afghanistan government before considering whether or not to send more U.S. troops over there. Do you think they have the time to wait or do they need to act now if they're going to bump up the number of troops?

KHALILZAD: I think there is only an indirect relationship between the two. Even if a decision is made now to send troops, a different decision can be made even before the decision is implemented. So my judgment would be that we need to go forward with the decision because it will take some time to implement it, but the key thing would be not only to have a the legitimate government, but also to have an effective government. And I think would require very close coordination for one thing if Karzai is reelected, a new relationship of mutual confidence which has been damaged in recent time needs to be established.

ROBERTS: Former U.S. Ambassador Zalmay Khalilzad, it's good to talk to you this morning. Thanks for joining us. I really appreciate it.

KHALILZAD: Very nice to be with you, Robert.

ROBERTS: It is 41 1/2 minutes now after the hour.


ROBERTS: Welcome back to the Most News in the Morning. Here's what we're following for you right now. Two republican lawmakers who scheduled to appear with a fake pimp and prostitute behind the acorn stings later on today at Washington. Congressman Steve King, and Ted McCather are two of the biggest critics of the non-profit group ACORN employees were caught on hidden camera offering financial advice to the couple, James O'Keefe and Hannah Giles who said they wanted to open up a brothel with underage girls and wanted to know some advice on how to do it.

CHETRY: Well bagel and Fruit Loops is now the breakfast of champions but now the FDA is wondering why products like that have smart choices seals on them. It's a warning that food companies -- it's warning now food that it will crack down on inaccurate labeling. The FDA commissioner says there are products on store shelves that have gotten a Smart Choices check mark that are almost 50 percent sugar. Right now it's up to each company to decide on its own what's healthy.

ROBERTS: And how was your stroll into work today? Well take a look at this.


This is the video that everyone's going it be talking about. A man coming within inches of being pulverized by a run-away bus reportedly with no breaks in an intersection in Russia. Have a closer look here Witnesses say a passenger were jumping off the bus to try to save themselves as it ran down the hill, smashed in to about 20 cars before it plow in the back of this car in a light while the guy was crossing the street. Thank god for peripheral vision. Watch this.

CHETRY: Look out., He actually speed up.

ROBERTS: His scampered turned into a sprint just in time somehow, we're hearing only a few people were hurt, none of them seriously in the entire incident he got away.

CHETRY: The car, in front of him, they got rear-ended. That's I think are not good either. People jumping out of the bus, I mean, I'd take my chances staying inside.

ROBERTS: Well, when you're in a bus, I mean, what's the worst thing that could happen? Unless of course you're headed for a bridge or a cliff or something like that.

CHETRY: Right.

ROBERTS: You know, eventually the bus will stop, but, better - maybe...

CHETRY: If you saw "Speed" 1 and 2, eventually. Eventually. With the help of some very brave renegades, it will stop.

Hey, Rob Marciano is keeping track of the weather for us. How about that video, huh?

ROB MARCIANO, AMS METEOROLOGIST: Crazy (INAUDIBLE). You know, seatbelts on a bus, I guess that would help things out a little bit. But at one point you have to say, you know, just - just live a little.

Glad everybody made it out all right, or relatively speaking, especially they'd be (ph) crossing the street. Nice day to walk to work, walk to school, take the bus, ride the bike. You go east of the Mississippi, we're looking at a beautiful high pressure, return flow getting a southerly warmth into it - into things, but also feeding this storm which is winding up to be pretty decent across parts of the front range of the Colorado Rockies.

Denver going to see some snow, seeing it right now, so if you're flying through that airport, we may see a little bit of delays. Also Dallas, some light rain heading into your area and maybe some afternoon thunderstorms. The other next couple of hubs, be it Minneapolis, St. Paul and Chicago, these are areas that right now don't look terrible, but the rains will increase throughout the day today.

So Minneapolis, especially rain and low clouds. You might see some delays there. Dallas and Houston, showed you (INAUDIBLE) and also Denver, low clouds and morning rain and snow. Mostly snow in the morning. We might see a couple of inches pop up from this thing, but I think mostly on the side of the roads. It will be 39 degrees for a high temperature in Denver and 71 degrees in New York City.

Quickly on Rick, this has just been weakening, like a banshee (ph). Winds 55 miles an hour, so that's the latest from the National Hurricane Center and about to make landfall near Mazatlan (ph) Mexico. So winds are going to be light. Waves have been rather big and some of this moisture eventually will get into Texas. At least in South Central Texas, they still could use a little bit more so we'll wait for that to happen -- John and Kiran.

ROBERTS: Rob, thanks so much.

MARCIANO: I know (ph) you guys both take the bus to work, so you have a safe drive home.

ROBERTS: All right. And next time we hear of a runaway bus, Rob, we'll give you a call. Maybe you can jump on board and live a little.

MARCIANO: All right.

ROBERTS: Thanks, Rob.

So, you know, what's - what's on the desk, what's on your computer, what's on that - that pole that you hang on to in the subway, what's on the ATM machine, what's on the telephone?

CHETRY: I don't want to know.

ROBERTS: Well we're going to tell you anyways. We don't care if you don't want to know. Elizabeth Cohen with the first part of our series on germs in America, coming right up.

Forty-seven minutes after the hour.


ROBERTS: Ten minutes now to the top of the hour. Straight ahead on the most news in the morning, the man behind the money, the SIGTARP - he is the SIGTARP - Neil Barofsky and his new report on the banks that got bailed out. Are we really back from the brink? We'll ask him, 20 minutes' time here on AMERICAN MORNING. SIGTARP - it's like the - a new super hero.

CHETRY: That's right. Special Inspector General for TARP.

ROBERTS: For the Troubled Asset Relief Program.

CHETRY: Yes. Well, it'll be interesting to - as you heard (ph) what former Governor Spitzer said, that the time to put the strings on that money was way back when, but now it's going to be very hard.

ROBERTS: Yes. Horse is long gone from the barn now.

CHETRY: Yes, as they try to shut the door.

ROBERTS: Yes, but he's got some - he's got some - he says there's good news and bad news in his report. Bad news is that we're probably never going to get repaid all the money that we gave and stuff.

CHETRY: All right. Well, we look forward to hearing from him.

Meanwhile, do you think you're doing everything right, at least as best you can, to try to prevent getting not only the swine flu but seasonal flu and colds? You know, you try to wash your hands, you try to sneeze and cough into your sleeve.

ROBERTS: I've kind of perfected that in the last few days.

CHETRY: You're good at it now (ph).

ROBERTS: But you avoid sick people - but is it good enough? Our senior medical correspondent Elizabeth Cohen joins us now with the first part of our series "Germ Nation" to show you where H1N1 germs can hide and they're everywhere.

They're everywhere. They're like Chickenman.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: I'm not sure what Chickenman is, but they definitely are everywhere, John. There is no question.

And John and Kiran, as I look at the two of you, I see you're seated about 2 to 3 feet apart and, boy, I hope that neither of you is sick, because there's something called "the danger zone." If you're within six feet of someone, anyone who has an illness like H1N1 flu, you could get it from them when they cough and sneeze. So I spent some time with the commissioner of Public Health here in Georgia, asking her to tell us, how can we protect ourselves?


COHEN: Let's pretend that you and I are going to get on the subway. We stand in line at this kiosk, and let's say I'm sick. I go like this. I touch this. You're right behind me. Now it's your turn.


What happens is, and commonly it happens every single day, is that people who have different illnesses, different symptoms, coughing, sneezing, runny nose, sinus infections and whatever, do the same thing that you just did without even thinking about it. H1N1 virus can live on an inanimate object for 2 to 8 hours. This is a virus that our bodies have never seen before, so all those people who have touched it and even if (ph) they even have H1N1, they have no immunity and neither do you, and this is where the adventure actually starts.

COHEN: So we are now standing behind a whole bunch of people.


COHEN: If one of them were sick and sneezed, could we get sick?

MEDOWS: Yes, we can.

COHEN: Even at this distance?

MEDOWS: It's less than six feet, so that spray, the air droplet spray could actually come into your - your being. You're inhaling, you're breathing respiratory droplets.

COHEN: All right. So we're sitting down here on the subway, really, really close. Smooshed together.

MEDOWS: And obviously not...

COHEN: If I start sneezing, what are you going to do?

MEDOWS: I'm going to turn my face away and try to avoid the spray.

COHEN: OK. Let me see, what would you do?

MEDOWS: And I may go over and sit next to her.


MEDOWS: Because she's not sneezing. She looks a lot healthier.

COHEN: OK. But you would actually get up and leave if you sat on the subway next to someone who's sneezing?

MEDOWS: I want to avoid influenza that bad that I would get up and go sit over there.

COHEN: I hear constantly, wash your hands, wash your hands, but that's not enough.

MEDOWS: Actually, it's a lot.

COHEN: It is a lot, but it's not enough, because you're surrounded by people all the time. MEDOWS: That's right.

COHEN: I mean, you can wash your hands all day long, but if you're next to someone who sneezes.

MEDOWS: You can't - washing your hand is not going to do that. You can only do things that try to reduce the transmission.


COHEN: Now, what I learned from Dr. Medows is that when you're out and about, be aware of your surroundings, especially when we're in a flu outbreak like we are right now. Look around. If people are coughing and sneezing, get away from them as much as you can - John and Kiran.

ROBERTS: All right. Elizabeth Cohen for us.

CHETRY: Don't feel bad, by the way. No one here knew what Chickenman was either. It's a...

ROBERTS: It's a famous radio comedy serial from the 1960s. (INAUDIBLE). YouTube it. Look it up on YouTube. It's great.

COHEN: OK. I will.

ROBERTS: Thanks.

CHETRY: Thanks, Elizabeth. Well, have you ever gotten on a flight, ended up sitting near someone who was sneezing or coughing? What do you do about that? Are all the germs circulating around the plane? And is that even your biggest concern?

Elizabeth is going to be back tomorrow with another "Germ Nation" report.

ROBERTS: Or maybe there's some crazy guy sitting beside you talking about Chickenman - what do you do about that?

Janet Napolitano, the Homeland Security Secretary is going to be joining us, coming up in our next hour. A big swine flu meeting in Washington to tell you about, the national security implications of it and what do we do to try to contain the epidemic. We'll have that for you, coming right up.

It's 55 minutes after the hour.


ROBERTS: With a make or break push on health care reform, we're cutting through the politics and showing you real people on both sides of the issue. This morning, we want you to meet with Ian Pearl. He needs 24-hour care in his house and a ventilator to stay alive, but his insurance companies tried to yank his coverage for being one of the, quote, "few dogs." Yes, that's how they referred to him.

Our Jim Acosta live in Washington with this "AM Original," and Jim, what's he doing about it? Can he do anything here?

JIM ACOSTA, CNN CORRESPONDENT: He's trying to do something, John. And, you know, advocates of health care reform have a new Exhibit A in their case against the insurance companies. His name is Ian Pearl. He is disabled. He is about to lose his insurance, and he has a new battle cry in the fight for health care reform, "I am not a dog."


ACOSTA (voice-over): Ian Pearl lives with muscular dystrophy, but only because of the round the clock nursing care he gets in his home. Confined to a wheelchair, he needs a ventilator to survive, but it comes at a high price.

IAN PEARL, MUSCULAR DYSTROPHY PATIENT: My expenses are $1 million a year to keep me alive.

ACOSTA: Last year, his family got this letter from their insurance company, stating their policy was being discontinued. A new policy was available, but with limited in-home nursing care.

So when you got this letter from Guardian, you said what?

SUSAN PEARL, IAN PEARL'S MOTHER: We said immediately that this was related somehow to Ian's claims.

ACOSTA: Their insurance carrier, Guardian, which made $386 million in profits last year, wasn't just dropping Pearl's policy. Guardian was pulling some of its policies out of entire states - policies that included Ian's plan.

S. PEARL: The insurance industry has evolved from risk management to risk elimination.

ACOSTA: So they sued, claiming discrimination. Their lawyer discovered this e-mail from a Guardian employee, an e-mail that company acknowledges. In it, a Guardian employee brings up the line of policies covering the Pearl family and asks what the financial upside might be, quote, "if we eliminate this entire block to get rid of the few dogs."

I. PEARL: I want to know why myself and others like me who depended on this policy and are paying premiums, did nothing wrong, and we're suddenly targeted as dogs because we're disabled? Disabled people are not dogs.

ACOSTA: As for that e-mail, a Guardian spokesman tells CNN, "It's an unfortunate choice of words. We certainly don't condone it, and it certainly doesn't represent this company. In a statement, the company adds, "Guardian acted legally, appropriately and in full compliance of state laws."

The judge handling Pearl's case sided with Guardian, saying the law permits an insurer to terminate a particular type of coverage. This congresswoman wants the Obama administration to step in. REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: We're going to take this all the way to the top, because it's just outrageous and it's another example of why we need health care reform so badly.

ACOSTA (on camera): So, this is your study?

I. PEARL: Yes, this is it.

ACOSTA (voice-over): But Ian doesn't have much time. His policy is set to expire on December 1st.

PEARL: People may ask why -- why do I need this sort of coverage? Why do I need this sort of assistance? They do for me what I cannot do for myself, which is everything.


ACOSTA: Ian Pearl is worried. He worries he will be forced to move to a state nursing home, away from his nurses who he says have saved his life time and again. The Pearl family is now appealing the case in court and the Department of Health and Human Services says it is actively investigating what it calls very serious concerns, John.

ROBERTS: Is there -- is there any possibility that HHS could potentially intervene on his behalf here? I mean, under what basis could they do it?

ACOSTA: That's their best chance right now, John. That is what they're hoping for. Sometime between now and December 1st, which is only a month and a half from now, they need the federal government to step in and rule on their side. They're hoping that they'll look at this case and find that Guardian discriminated against this family, against Ian, but they do realize the odds are long. They're not in their favor at this point, John.

ROBERTS: Jim Acosta for us this morning -- heck of a story.