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American Morning

Clinton Questions Pakistan's Commitment against Terrorism; U.S. Economy Growing, but Unemployment Still High; Obama to Meet with Top Military Brass on Afghanistan; 1,990-Page Health Care Bill; Piracy on the High Seas; There's a Fee for That?; United vs. Guitar Guy; "Slumdog" Kids Could Lose Cash

Aired October 30, 2009 - 07:00   ET

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

JOHN ROBERTS, CNN ANCHOR: That brings us to the top of the hour. Thanks so much for joining us on the most news in the morning on this Friday, the 30th of October. The eve of Halloween. I'm John Roberts.

KIRAN CHETRY, CNN ANCHOR: It sure it. I'm Kiran Chetry. Glad you're with us this morning.

Here are the stories we'll break down in the next 15 minutes. First, Secretary of State Hillary Clinton raises some eyebrows with a not so diplomatic message to Pakistan, accusing them of missing opportunities to crack down on al Qaeda and saying it's "hard to believe they can't find Osama bin Laden."

Our Jill Dougherty sits down with Secretary Clinton. The interview is straight ahead.

ROBERTS: That $787 billion stimulus package may have ignited a rebound, the economy growing for the first time in a year. But what about jobs? Our CNN money team standing by with new estimates on how many jobs have been created because of your tax dollars.

CHETRY: It could be a frigid Halloween for some trick-or- treaters. Parts of Utah, Wyoming, and Colorado under three feet of snow this morning, and that storm is still moving across the Great Plains. Our Rob Marciano is tracking extreme weather for us this morning.

But we begin the hour with Secretary of State Hillary Clinton taking Pakistan to task for failing to crack down on al Qaeda. The secretary of state bluntly telling reporters she finds it difficult to believe that Pakistani government cannot locate Osama bin Laden.

Clinton is wrapping up a three-day trip to Pakistan before heading to the Middle East. And our foreign affairs correspondent Jill Dougherty is live in Islamabad this morning with more of her one- on-one interview.

What did the secretary say about those words that she said, as we said, not so diplomatic in terms of saying, hey, you should have been doing more to catch bin Laden?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Kiran, you know, it's raising eyebrows here, because after all what she was trying to do was improve the relationship. And she continues to say that she wants to do that.

But those were pretty overt and open comments. So I asked her to explain exactly what she meant about that, and we also got into the subject of Iran.

(BEGIN VIDEOTAPE)

DOUGHERTY: You were talking to some Pakistani journalists, and you made pretty strong comments about al Qaeda. "It is hard to believe that your government," the Pakistani government, "that nobody in that government knows where al Qaeda is. They could get them if they wanted."

Are you actually saying that the government or someone in the government is complicit or not following through on getting al Qaeda?

HILLARY CLINTON, U.S. SECRETARY OF STATE: No. No. What I was responding to is what I've been really doing on this trip, which is that there exists a trust deficit certainly on the part of the Pakistanis toward the United States, toward our intentions and our actions.

But trust is a two-way street. And I think it's important if we're going to have the kind of cooperative partnership that I think is in the best interest of both of our countries for me to express some of the questions that are on the minds of the American people.

And I'm not prejudging the answer. But I'm asking the question.

DOUGHERTY: But isn't that your own personal question?

CLINTON: I'm an American. And I think we have every reason to say, look, we are applauding the resolve you're showing in going after the Taliban extremists who threaten you. But let's not forget they are now part of a terrorist syndicate that in classic syndicate terms would be headed by al Qaeda.

DOUGHERTY: Iran -- we're in a very important moment because they're reneging on that draft agreement about shipping out most of their low enriched uranium. Is it time to stop talking and to go to sanctions?

CLINTON: Well, Jill, we are working with the IAEA, with France, Russia, the other members of the P5 plus 1 who are all united in showing resolve in responding to the Iranian response and seeking clarification.

So I'm going to let this process play out, but clearly we are working to determine what exactly they are willing to do, whether this was an initial response that is an end response, or whether it's the beginning of getting to where we expect them to end up.

(END VIDEOTAPE)

DOUGHERTY: So on another subject that we talked about is the Mideast. And that is where Secretary Clinton is headed. And she'll be spending the weekend trying to pull that process toward the peace agreement between Israel and the Palestinians back on track.

She'll be meeting with the Palestinian leader Mahmoud Abbas. She'll also be meeting with Prime Minister Netanyahu of Israel. And she also said it's not easy. She believes in perseverance, and she talked, Kiran, about Bill Clinton who a number of years ago tried the same thing. She said it didn't get to an ultimate peace agreement but it did make some progress, save lives, and made some economic developments.

So she is hoping that this perseverance is going to pay off -- Kiran?

CHETRY: Yes, absolutely. Jill Dougherty, thanks for being with us this morning.

ROBERTS: This just in to CNN, the economy finally growing after being dragged down for nearly two years by the great recession.

But where are the jobs? Our Christine Romans has got new estimates on just how many were created thanks to the $787 billion stimulus package. And the Associated Press out yesterday with a story that says in the initial estimates that the White House way overshot by thousands. So they're trying to come out with accurate numbers this time.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: The White House this morning is releasing a new estimate on how many jobs have been created by your taxpayer money, that $787 billion stimulus. And the White House this morning telling us that 650,000 jobs have been saved or created because of the stimulus because of the paperwork now that's coming in on $150 billion worth of contracts.

This is 650,000 jobs that a senior administration official says doesn't even count the impact of other areas like tax cuts, which are not counted in this figure, direct payments to people, and grants under 25,000.

So what this is is a new estimate, 650,000. This is coming from tens of thousands of recipient reports. Anyone who got stimulus money -- almost everyone that got stimulus money had to, according to Congress, file very detailed reports on how they're using that money.

All of those reports are coming in. They'll be on Recovery.gov this afternoon. I mean, tens of thousands of these reports to see how the money is being spent in your neighborhood.

Now, the White House says based on that they think 650,000 jobs have been created. Overall it's $787 billion. There were tax breaks in there, some $288 billion. Entitlements, like employment benefits and the like $224 billion, and then contracts and grants, that red pie right there, $275 billion. That's what we're trying to measure here. That's what the White House and the recovery trackers are trying to measure.

I want to put this in perspective, though. You might recall when the White House and the president were really pushing for stimulus back earlier this year they said without the stimulus the unemployment rate could rise above 8 percent. The unemployment rate is still above 8 percent.

ROBERTS: So 650,000 jobs created. How many lost in the course of the last year?

ROMANS: Oh, we've lost 6 million since the recession began. We've lost at least 3 million since the beginning of the year. It's all about counting these numbers.

I think a lot of this is still politics. People who support the stimulus want to count the numbers to show it's working. People who don't support the stimulus want to count the numbers and say, hey, it's nothing compared to what we lost.

We will never know exactly how many jobs were saved or created. But this is the White House's most recent estimate. You can go to Recovery.gov later this afternoon and see how the money is being spent where you live.

ROBERTS: Christine, thanks.

And stay with us, because coming up in less than ten minutes time we're going to ask Jared Bernstein, the chief economic policy adviser to Vice President Biden about whether we can sustain this growth without government programs like cash for clunkers and the first-time home buyers credit.

CHETRY: Also new this morning, a U.S. coast guard plane and a marine helicopter colliding in midair. It happened just before midnight eastern time about 15 miles off of San Clemente Island.

Right now they are using night vision goggles. Navy and coast guard are searching off of the southern California coast by sea and by air for nine missing people. The rescue mission has been going on all night.

(BEGIN VIDEO CLIP)

LT. JOSH NELSON, U.S. COAST GUARD: I can tell you there are four Navy ships, multiple Navy helicopters, like I said, multiple coast guard cutters and aircraft on scene. So we're throwing everything we can at this right now.

(END VIDEO CLIP)

CHETRY: The Coast Guard says debris has been spotted in the water.

ROBERTS: Workers in California hope to have the Bay Bridge between San Francisco and Oakland reopened today, maybe in time for this morning's rush hour.

But another state official says work probably will not be finished until later this afternoon. About 5,000 pounds of steel crashed down on the westbound lanes on Tuesday during rush hour. CHETRY: The New York Yankees tying up the World Series, a game a piece now. They beat Pedro Martinez and the Phillies 3-1 last night in game two at Yankee stadium. The Bronx bombers had two solo homers off of Pedro, and that's all they needed.

The series now goes to Philly for three games starting Saturday.

ROBERTS: Very heavy rain right from Chicago to Dallas, and further out west up to three feet of snow in parts of Utah, Wyoming, and Colorado. The storm is pushing across the Great Plains now heading east. A lot of flights have been canceled. Interstates shut down. Schools closed. Basically It's a mess out there in many places.

(WEATHER REPORT)

CHETRY: Still ahead, we're going to be speaking to Jared Bernstein. He is the chief economist and economic policy adviser for Joe Biden. We're going to talk about the new GDP numbers, a positive sign. Is the recession over? And what about jobs?

It's 11 minutes after the hour.

(COMMERCIAL BREAK)

ROBERTS: Straight ahead on the most news in the morning, why did that $90 hotel room you booked online end up cost you $175? Small, sneaky hidden fees becoming big business for the hotel industry.

But there's a way to stop being nickel and dimed if you know how to play the game. Coming up Gerri Willis will show you how to beat the house. The house doesn't always win in these cases -- Kiran?

CHETRY: All right. The economy is growing again. A key indicator of that, the gross domestic product grew 3.5 percent in the third quarter. And it's big because this is the first increase in more than a year.

And while the economy seems to be moving in the right direction, the jobless rate unfortunately is not. So is the worst recession since the Great Depression over?

Jared Bernstein is the economic adviser to Vice President Joe Biden and he joins us this morning. Jared, good to have you with us.

JARED BERNSTEIN, VICE PRESIDENT BIDEN'S CHIEF ECONOMIC POLICY ADVISER: My pleasure, Kiran.

CHETRY: From where you sit, how do you see it? Is the recession over?

BERNSTEIN: You know, from where we sit, the question of whether the recession is officially over is a technical call made by a bunch of august economic wonks up there in Cambridge. From the perspective of the White House, the president, the vice president, a recovery is incomplete unless it's delivering robust job and income growth to working American families. And I think you tee this up exactly right, Kiran, when you said we got the GDP growth that's really important. But now we have to map economic growth onto job growth. And that's brings us right to the recovery act where the independent Recovery Accountability and Transparency Board has a very important announcement it's going to make today about jobs.

CHETRY: All right. I want to get to jobs in one second. But first, I do want to talk about the GDP.

BERNSTEIN: Sure.

CHETRY: A lot of the analysts are saying that in the absence of the recovery act and the stimulus moves that the real GDP would have risen little if at all this past quarter. And so one of the questions that people are now asking is what happens now that programs like, for instance, the "Cash for Clunkers" program, the homebuyer tax credits, and other stimulus programs that are going to be phased out over the next year, how do we sustain that growth without all of that government intervention?

BERNSTEIN: It's a very important question. And the answer is that, first of all, remember this is a two-year program. It's a very important time release component of this recovery act. It keeps going until the end of next year when the private sector of our economy has to come in and fill that air pocket that you mentioned when the stimulus leaves the system. So the fact that this is a longer program than I think has typically been envisioned is very important.

Now, remember, just about half of the stimulus dollars are at work in the economy so far. Creating or saving about a million jobs so far with about 2.5 million more left to come. So there's a lot more ammunition in the recovery act.

CHETRY: Yes. And as Christine Romans, our business correspondent pointed out, we've lost some six million jobs since this recession started. And jobs still remains a major sore point as we've seen unemployment in 23 states rose, records in Nevada and Rhode Island and Florida, and those are really three very different parts of the country all of them now with above 10 percent unemployment. So what kind of a recovery is it without jobs?

BERNSTEIN: So that's the key question. And in fact, the job -- we're going to learn today later from, again, from the independent recovery board direct information from recipients of recovery act funds that they have created or saved 650,000 jobs so far. These are direct recipients across the nation. Every state you just mentioned telling us about jobs in private firms, contractors, construction workers, teachers, police men and women, these jobs cover about half of the expenditures thus far of the money put to work from the recovery act thus far.

So we're solidly on track to create or save 3.5 million jobs by the time this program winds down. Now, as you correctly noted, we're looking at the job impact of the deepest recession since the Great Depression. There is no conceivable stimulus package that could fully offset that, but the recovery act is absolutely working both in GDP terms and in terms of offsetting some of that labor market pain.

CHETRY: You know, and as we know, the administration before the stimulus package passed, seemed to predict that unemployment would peak at about eight percent and then start to abate. As we've seen those numbers have been a lot higher right now, teetering around double digits not quite there. But as you said, there are other indicators that perhaps things are going to get better.

One of the problems though seems to be in small business and whether or not they can get lending and free up credit so that they can hire more people. How is the administration trying to tackle that moving forward?

BERNSTEIN: By targeting that problem aggressively and directly. Yesterday, the president announced a set of programs both for our small business administration including, I think very important and generous loan guarantees, exemptions of fees, increasing loan limits and creating lines of credit for smaller banks through the TARP if those banks come forth with a plan to lend to small businesses.

So you're absolutely right. Thawing the credit freeze and getting credit lines to creditworthy small businesses is key to building this economic expansion of which small business has to play an important role.

CHETRY: Right.

BERNSTEIN: The president gets that and is taking aggressive action.

CHETRY: Small businesses create 67 percent of the jobs on average and as we know, we could certainly use them now.

Jared Bernstein, great to talk to you this morning and get your perspective on all of this. Appreciate it.

BERNSTEIN: My pleasure.

ROBERTS: So they're talking about jobs at the White House today but President Obama also meeting with the Joint Chiefs of Staff today on Afghanistan, whether to send more troops there.

Our Barbara Starr has got some of the inside scoop on what we can expect to hear. She'll be joining us in just a second.

Twenty minutes after the hour.

(COMMERCIAL BREAK)

ROBERTS: Good morning, Charlotte. Are those orange flashing lights and all of those things in honor of Halloween?

CHETRY: Do you think those lights are for Halloween? These cities are on point this morning.

ROBERTS: Cloudy and 58 degrees right now. Later on today, mostly honey with the sun mostly...

CHETRY: Mostly honey...

ROBERTS: Oh, what am I thinking about?

CHETRY: Hey -- (INAUDIBLE) this morning.

ROBERTS: It's Friday. What the heck.

CHETRY: Hi, honey.

ROBERTS: Hi, honey. A high of 68 degrees today.

CHETRY: Hi, honey. It's going to be mostly honey out today.

Welcome back to the Most News in the Morning, by the way. And we want to say hello to America's new top doctor. The Senate confirming Regina Benjamin to be the next surgeon general. The Alabama family physician best known for rebuilding her rural health clinic after Hurricane Katrina hit the gulf coast.

ROBERTS: Here's some at round two. Harvard scholar Henry Louis Gates Jr. and Cambridge police sergeant James Crowley made again at a local pub for about an hour without President Obama or Joe Biden today. Back in July, Crowley arrested Gates in his home after a neighbor thought he was a burglar. The president got in the mix when he said Cambridge police "acted stupidly."

CHETRY: Also an analysis by the auto expert at Edmunds.com showing that only 125,000 extra cars were sold earlier this year because of the "Cash for Clunkers" program so according to Edmunds, they say it comes out to $24,000 of your taxpayer dollars for each of those cars. The White House though firing back blasting that report saying that it doesn't withstand even basic scrutiny.

ROBERTS: And the president calling top military brass to the White House situation room today. He is meeting with the Joint Chiefs of Staff as he moves closer to deciding whether to send more troops to fight in Afghanistan.

We're approaching the end of the deadliest month there for U.S. troops in the entire eight-year long war. We're also finding out how much the cost of sending more troops could be financially.

Barbara Starr is live at the Pentagon for us this morning. Barbara, what are we hearing about today's meeting?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, John, it will be in the situation room. We won't be there, but we do know a fair amount about how the meeting may go.

This is the Joint Chiefs of Staff. Who are these men? These are the heads of the Army, Navy, Air Force and Marine Corps. They do not have any direct combat responsibility for the war, but they are responsible for providing trained and equipped troops to General McChrystal to fight in Afghanistan. And for thousands of military families sending their loved ones off to the war, trained and equipped means making sure that these troops have the right protective gear and enough of it as the situation in Afghanistan, of course, has deteriorated.

There will be discussion about that and there will be discussion about the strain on the force. The chiefs especially the Army and Marine Corps are most concerned that they give the troops enough time at home. Up to a year back at home with their families in between rotations to the war zone and if they have to send a substantial number of additional troops to Afghanistan. In particular, John, the Army and Marine Corps are worried that they may have to break that promise to the troops and that's going to be a point of discussion -- John.

ROBERTS: And how many more troops are we talking about here, Barbara? We've heard everything from a low of 10,000 to a high of 80,000.

STARR: Yes. You know, the joke around the Pentagon right now is anything from zero to 1.2 million and that's just a joke, mainly in the press corridor I have to say. But, you know, the betting money is that the basic discussion revolves around somewhere between 10,000 and the 40,000 that we believe General McChrystal wants. How would these troops be used?

If you look at the map, John, what sources are telling us is General McChrystal's plan is to send a substantial number of them back down south, back in the Helmand province, Kandahar province, the heartland of the insurgency right now. That's where the bulk of the troops would go. More troops, of course, for training the Afghan forces. But still, the final decision to be made -- John.

ROBERTS: Barbara Starr for us at the Pentagon. Barbara, thanks so much.

CHETRY: All right. And still ahead, the health care bill is out. It is 1,990 pages. This is the one coming from the House.

ROBERTS: We've got a slow weekend ahead days? Some good reading for you there.

CHETRY: There you go. Hopefully the lawmakers are reading it. Dana Bash certainly is. She's going to break it down for us. Not all of it.

Twenty-seven minutes past the hour.

(COMMERCIAL BREAK)

ROBERTS: We're running at the top of the half hour. It's exactly 7:30 Eastern and checking our top stories this morning.

New developments in the attack of a 15-year-old after a homecoming dance in Richmond, California.

Police arrested another teenager on rape charges. Six suspects are now in custody. They say as many as 20 people were involved or simply stood by and watched as the victim was sexually assaulted for over two hours and no one called 911.

CHETRY: New steps to fight swine flu. In New York, the governor declaring a state of emergency to deal with the spreading virus. The declaration expands a number of health care professionals that can give the vaccine will now include dentists, pharmacists even podiatrists. This comes after President Obama declared a national emergency last weekend.

ROBERTS: General Motors is extending its money back guarantee through the holiday season. You can now get a refund on a GM car or truck through January 4th of next year. GM launched it's "May the Best Car Win" campaign last month as a way of gaining back trust after filing for bankruptcy.

CHETRY: Well, if you're in the mood for some light reading, how about the House's new health care reform bill. It was just unveiled by the Democratic leaders there and it's 1,990 pages. Our friends at Politico point out that's longer than "War and Peace" and nearly five times as many words as the Torah. Republicans are saying bigger doesn't necessarily mean better.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: 1,990 pages.

UNIDENTIFIED MALE: 1,990 pages.

UNIDENTIFIED MALE: Nearly 2,000-page bill.

UNIDENTIFIED MALE: 1,990 pages.

UNIDENTIFIED MALE: One gigantic piece of legislation.

UNIDENTIFIED MALE: That's about four reams of paper. I would say that the people getting reamed are the American people.

(END VIDEO CLIP)

CHETRY: All right. Well, nearly 2,000 pages is a lot to digest. And we're breaking it down and giving you what you need to know. We bring in our senior congressional correspondent or our "Cliff Notes" today, Dana Bash. Hey there.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Hi there, Kiran. Longer than the Torah. That is actually a fun fact. Well, Democratic leaders not for that reason but just because of the substance of this Democratic leaders admit that they are actually still searching for votes to pass this sweeping health care bill in the House but it is a milestone for House Democrats and the president on this, of course, his top priority.

However, there is still a long and treacherous road ahead.

(BEGIN VIDEOTAPE) BASH (voice-over): A march to music down the Capitol steps. A ceremony staged to unveil a health care bill and signal momentum.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: We are about to deliver on the promise of making affordable quality health care available for all Americans.

BASH: After months of intense work with the divided caucus, House Democrats say their proposal would cost $894 billion for new health coverage but add Medicare changes and the price tops $1 trillion. It would require all Americans to get health coverage, expand Medicaid to help those who can't afford it and provide subsidies to small businesses to cover employees.

PELOSI: The bill will expand coverage including a public option to boost choice and competition.

BASH: But that is not the kind of government run insurance option the speaker wanted. It allows doctors and hospitals to negotiate what the government pays. That pleases moderate Democrats but may cost votes with liberals who prefer a public option that mandates lower rates.

UNIDENTIFIED MALE: I'm personally leaning no and others are as well.

BASH: But other progressives are more pragmatic.

UNIDENTIFIED MALE: They couldn't get 218 votes for that. And there's no point crying over spilled milk.

UNIDENTIFIED MALE: We have a week of public option. There's no disputing that. It's not what I would have liked. But I can tell you now we're going to have a sliver of competition.

BASH: How would all of this be paid for? In part with cuts in Medicare spending and a 5.4 percent tax on all individuals making $500,000 a year and couples making a million dollars. That income level was raised. A change aimed at calming concerns of vulnerable democrats like Jerry Connolly.

REP. JERRY CONNOLLY (D), VIRGINIA: It will affect fewer folks in my district than the previous version.

BASH: We spent time with Connolly this summer as town hall anger raged. Then he was undecided. Now...

CONNOLLY: I'm pretty close to that but I want to absolutely reserve the right to look at the bill carefully.

(END VIDEOTAPE)

BASH: Democrats are more undecided than that. In fact, very concerned about the trillion dollar-plus price tag and many of them told us that they also plan to read the bill and as we discussed, Kiran, that will take a while since it is nearly 2,000 pages. But House Democratic leaders, they promised that lawmakers will have 72 hours to read the final bill with any changes before they have to vote and those leaders in the House, they do want to start debate next week.

CHETRY: All right. Well, they better start reading over the weekend. Dana Bash for us this morning. Thanks.

ROBERTS: The British government is demanding the are release of a retired couple being held by Somali pirates. The couple was sailing from the Seychelles, Tanzania across the Indian Ocean last week when pirates boarded their 37-foot sail boat and hijacked them at gunpoint.

Our next guest has his own episode violent episode at sea. Captain Richard Phillips was a hostage for five days after pirates attacked his ship, the Maersk Alabama. He joins us this morning from Underhill, Vermont.

Captain, great to see you this morning. Thanks for taking the time to be with us. Really appreciate it.

CAPT. RICHARD PHILLIPS, MAERSK ALABAMA: Good morning, John. Good to be here.

ROBERTS: So this case of Paul and Rachel Chandler, as we said, piloted on board their 37-foot sailboat back on October 23rd. Now on the custody of pirates aboard a Singaporean container ship that they hijacked. I mean, we heard about this occurring in places like the South China Sea, in around Malaysia or Indonesia but is this a new development off the coast of Somalia that they are now going after these smaller boats, these private citizens who are out for a sailing trip?

PHILLIPS: They are going after anybody they see out there - ships, naval ships, yachts, boats, fishermen, tugs. There is no one who is outside their target area. It's a crime of opportunity and they're taking the opportunity.

ROBERTS: Wow. Piracy was up worldwide 11 percent in 2008. Now that the end of the monsoon season is upon us in that area, the Indian Ocean, what are you expecting for the next six months through the winter of 2009-2010?

PHILLIPS: As I and many people have said with monsoonal change, with the winds and sea conditions, it will increase. It is more advantageous the environment for the pirates so they will take advantage of it. They are evolving. You will see an increase in incidents and situations on ships and yachts and boats in the Indian Ocean.

ROBERTS: Right. You know, in your testimony to Congress earlier this year, you said that in the immediate future the United States government needs to step up their naval presence in the area. That does seem to have happened. There's even a drone up there watching over the seas but the Navy admits it doesn't have the resources to cover the whole area. Would you feel safe captaining a ship back into that area?

PHILLIPS: Well, I never said the Navy should have - it's too big of an area. It's too immense. When I was captain, I was 300 miles out. They are now going 700 miles out. The Navy doesn't have the resources, the support, the people to cover the entire area. And I hate for them to be blamed for anything. They're doing an excellent job, a great job. It's just the pirates are evolving and they're going further out and they're using the opportunities that they do have.

ROBERTS: So any move that the Navy makes you say the pirates are able to adapt to that and this idea of going 700 miles offshore, that is an immense area to have to patrol and an immense area that they're operating in.

PHILLIPS: Yes, it's like trying to find a needle in a haystack. The Navy just doesn't have the - we're not funding them enough and giving them support and enough people. We can't blame the Navy. They are there to help us when an incident starts but as far as them stopping it, no, the ships themselves have to be given the capability of stopping any incidents themselves on the ship. The Navy will get there to help.

ROBERTS: I have talked to the Admiral William Gordon, the commander of the Fifth Fleet. They're out of Bahrain a couple times, once dealing with the "Maersk Alabama." He suggested that shipping lines need to take some of their own security precautions and some of those could be quite simple.

Our Brian Todd earlier this week went down to Puerto Rico to see some countermeasures and security precautions that have been taken on board one commercial ship. Let's run a little bit of his report and then get your take on it.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): Getting into a blast-proof bridge. A sniper takes position on deck. Scans the perimeter. But there's another part of the system aimed at never letting it get that far.

(on camera): This is a crucial part of the deterrent. A wall of water that blast down to knock pirates off as they try to scale the ship. It can also flood the pirates' boat. They can mix in bleach, pepper oil, even soap to distract them even more.

(voice-over): I'm repeatedly blasted. When I try to look up alongside the hull, I can't see a thing.

(on camera): How confident are you that this wall of water, the blast proof bridge, the loud speakers, are going to really keep pirates from coming on the ship?

UNIDENTIFIED MALE: We're 99.99 percent sure we got the answer here.

(END VIDEOTAPE)

ROBERTS: So, on board this particular ship, you got security teams who are armed with M-16s, who got countermeasures like that blast proof bridge. It's almost like taking a page out of medieval times, you know, with the wall of water or oil or whatever you have, bleach being poured off the side of that ship. Do those look like effective countermeasures to you?

PHILLIPS: As I've always said, it's a multifaceted program to keep the pirates off. Never say never. The pirates do evolve. That's why I believe you have to have the armed security forces and you have to have the countermeasures and hardening of the ship. And as I said before, you need to have the crew helping and using arms today.

With two or three people aboard, they could be shot or injured in an attack and then you're left with the same situation. The crews need to be trained, I think to assist those security forces. Never say never.

ROBERTS: Yes, if you were to go back out there, Captain, would you insist on an armed security team?

PHILLIPS: I would insist on anything but I would feel with an armed security team I would feel much safer. Not 100 percent certainly not 99.9 but I would feel much safer. Things happen when you're out on the ocean. And you never know what could happen. But that would sure be a great step forward having the armed security team, yes.

ROBERTS: Captain Richard Phillips, great to catch up with you this morning. Thanks so much for joining us. We really appreciate it.

PHILLIPS: Thank you, John.

CHETRY: Gerri Willis continues her series this week "Nickel & Dime" taking a look at hidden fees that all of us maybe aren't realizing how much we're paying. She breaks down how much the average person gets charged a year. How much money is just going out the window that you don't know about.

41 minutes past the hour.

(COMMERCIAL BREAK)

(MUSIC PLAYING)

CHETRY: Forty-three minutes now after the hour. You got to read the fine print, you know, next time you say at a hotel. What's a resort fee? Well, they are becoming masters with cell phones and credit cards at nickel and diming you.

ROBERTS: Yes, absolutely. Gerri Willis now with a look at how much those little fees add up over the course of the year. And it's hundreds if not thousands of dollars. GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: It is thousands of dollars, unfortunately. Good morning, guys.

It's the gotcha fees, the hidden fees, the ones that you don't know about that come to your attention after you receive the service or product that hurt the most. They're everywhere and they're growing.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): From cell phones to cable service to credit cards and banks to airline travel and hotel stays. Experts say the average American is spending close to $1,000 a year extra on hidden fees and surcharges. A nickel here, a dime there.

BOB SULLIVAN, AUTHOR "RED TAPE CHONICLES": It's real money. Married couples are talking about $2,000. That's a nice chunk of change to stock a healthy retirement, pay for a nice vacation, get a head start on school costs.

WILLIS: Bob Sullivan is the author of "The Red Tape Chronicles."

SULLIVAN: With almost every transaction now, if you're buying a car, buying a house, getting a cell phone, the company knows far much more than you do, including they know what the real cost is. And when all of this confusion over what things cost, well consumers lose.

WILLIS: And they're losing in a big way. The average fee ranges from less than a dollar to $10. While that may not seem like a lot of money but it adds up. Cell phone fees average $9.40 per month, more than $116 a year. Cable and satellite fees on average run $9.52 a month totaling $114 a year. Every time you fly, $33.44 with a national average of 3 1/2 tickets a year, that totals $102 a year.

Credit card fees average $7.72 a month bringing the annual cost to $92. And the average fee incurred for a hotel stay is close to $25. Roughly $95 a year per person. Bjorn Hanson is a professor at NYU's Tisch Center for hospitality. Hanson says hotels are more creative in what he calls the surprise fee.

BJORN HANSON, PROFESSOR , NYU TISCH CENTER: The hotel industry in - in 2008 collected about $1.75 billion on fees and surcharges. Some of the fees that surprise guests the most would be an early departure fee, a cancellation fee, mini bar restocking charges, luggage or baggage holding fees.

WILLIS: Some hotels go as far as charging resort amenity fees for towels and, some urban hotels even charge a daily fee for receiving faxes.

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CHETRY: Man, if you sat there and looked at every single one of those things and read through your bills, it might drive you crazy. But is there anything you can really do about it short of just being annoyed? WILLIS: Oh, yes. You can do more than just be annoyed. Experts say that you can avoid being surprised by hidden fees or surcharges by asking up front, hey, what's my final price for this transaction and then negotiating from there. Remember, a lot of these companies are under financial pressure right now. They want to keep their customers.

ROBERTS: So, you know, I stayed in a hotel in Europe earlier this year and what was interesting was the price that they quote you is the whole price. Taxes, hotel fees, everything - no hidden - you know, there might be hidden fees, but at least when they give you the price, you know what you're going to pay. You're not surprised at the end of the stay.

WILLIS: Yes. That's the good news. That's what you like to see, right? But, you know, what we found out is that people that are most likely to actually do some negotiation with you, credit card operators and hotels.

CHETRY: Yes. You told me...

WILLIS: So there is room.

CHETRY: You told me your little secret. She says, "I don't want to pay that. What else have you got?"

WILLIS: That is my - that's my line. "I don't want to pay that."

CHETRY: It didn't work for me the last time I tried that.

WILLIS: My husband's line, "That's unacceptable."

CHETRY: Really?

WILLIS: (INAUDIBLE).

CHETRY: There you go. You guys - you - you're good at that, good at going back and forth and getting down...

ROBERTS: As long as you don't get a "Well, sorry," back across the counter, then maybe you do have a point of negotiation.

WILLIS: Then - then you go somewhere else.

ROBERTS: All right. Gerri, thanks so much.

WILLIS: My pleasure.

ROBERTS: Coming up next, Jeanne Moos. She's got the latest in the saga of United Airlines versus Guitar Guy. And if you don't know this story, stay tuned because you're going to want to hear about it.

Forty-seven minutes after the hour.

(COMMERCIAL BREAK) ROBERTS: Welcome back to the Most News in the Morning.

First, United Airlines broke his guitar, now United has lost his luggage.

CHETRY: Hey, he's not yelling, though. He's actually singing about it, which is, you know, he's a better man than us.

Jeanne Moos reports on one customer's musical revenge.

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JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): One thing we're all united on, when baggage handlers mess up a guy's guitar...

DAVE CARROLL, MUSICIAN: (SINGING).

MOOS: He writes a song about it. The airlines could try not to lose his luggage the next time.

CARROLL: (SINGING)

MOOS: Dave Carroll got famous for putting his complaint about United on YouTube this summer, but though he never got his $1,200 repair bill reimbursed, he did get offers to speak on improving customer service. And on his way to just such a speaking engagement...

CARROLL: United was the only way to get here, and they lost my bag.

MOOS: They lost his bag, took almost three days to return it.

MOOS (on camera): Dave couldn't wear the dress shoes he wanted to wear to the presentation and, he couldn't hand out CDs of "United Breaks Guitars" because they were all in the suitcase United lost.

MOOS (voice-over): When Dave mentioned his guitar video, United reps said they knew it and suggested that in his next song...

CARROLL: ... I write about how nice the customer reps were who were trying to find my bag in Denver (ph).

MOOS: He's already written two songs giving his version of events, a third song is on the way. The guitar saga has been great for the Canadian's performing career. He's even endorsed a line of hard shell instrument cases, he testified and sang at a Congressional hearing on passenger's rights.

MOOS (on camera): Boy, they really picked the wrong guy's luggage to lose, huh?

MOOS (voice-over): United says, "We apologized to Mr. Carroll for this inconvenience. It's unfortunate but it's also an anomaly. Ninety-nine point six percent of bags we carry arrive without incident." Unfortunately for United, this 0.4 percent sings.

But at least Dave's guitar was reparable. United didn't pull a John Belushi. A parody has even popped up suggesting Dave unite with United.

Jeanne Moos, CNN, New York.

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ROBERTS: Oh, those Canadians! They have such a rapier wit, don't they?

CHETRY: They do, but the funny thing is - I mean, how ironic. At least he has a sense of humor about, but they lost it again! They lost his bag again when he was going to testify.

ROBERTS: Yes.

CHETRY: Anyway...

ROBERTS: Testify in his own way.

CHETRY: Well, still ahead, you know, we followed the saga of the kids from "Slumdog Millionaire" from the, you know, slums of Mumbai to the promises that they were going to have money set aside for their education and their future. Well, now there is a new twist. Our Sara Sidner is going to be joining us with that.

It's 54 minutes past the hour.

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ROBERTS: Welcome back to the Most News in the Morning.

Another story in the saga of "Slumdog Millionaire." Two of the child actors who were discovered in an Indian slum in Mumbai and shot to stardom in the film could lose the money they were promised by producers. Instead of a paycheck, a trust was set up for the kids and they get paid every month and they'll also get a lump sum when they finish school. But the trust says the kids' families are not holding up their end of the bargain.

Our Sara Sidner is tracking the story. She's live in New Delhi for us this morning. So Sara, what's going on this time?

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT: Well, you know, there's been a lot of twists and turns in the lives of these children, more so than in the movie itself.

This time, the trustees that we spoke with said that two of the child actors from "Slumdog Millionaire" are simply not attending school very often. He told us that Rubina Ali, who is 9, and Azharuddin Ismail, who is 11, are missing school about 60 percent of the time. Now, the trustee told us he believes that the reason for this is that the families are trying to cash in on their children's success right now instead of giving them an education and letting them attend school, and one of the fallouts from all this is that the trust is set up specifically that these kids must go to school about 70 percent of the time in order to get the monthly stipend that they get every month to help with their living expenses and the lump sum of money that they are supposed to get, which is supposed to be sizable, after they graduate.

If those things don't happen, these families don't get this money and these kids also lose out - John.

ROBERTS: So what are the parents saying about all of this?

SIDNER: We talked to the parents and they're not denying that their children have not been in school. There have been a - a couple of different reasons why that they've given us. The father of the little Rubina Ali, they are still living in a slum because he cannot come up with an agreement with the trust on getting out of the slum and where to live.

He says that his daughter has hurt her foot, that they have - their slum's been knocked down and that it's simply been very difficult for them to get her to school. He also says that she's only been out about 45 days since April, which is still a lot of time.

As for the little boy's mother, Azharuddin's mom says that his father died in September, and we do know that that is true, and that he has simply been distraught and she's having a very difficult time getting him to feel better and getting him to go to school but that she will try harder - John.

ROBERTS: These kids have such a great opportunity and it's just, you know, bad things keep befalling them. You just wonder how this keeps happening.

Sara Sidner for us this morning. Sara, thanks so much for that.