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Spending Freeze; Training Replacements; The Stimulus Project; Theater of the Absurd?

Aired January 26, 2010 - 09:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Hey, good morning everyone. It's 9:00 a.m. here on the East Coast; 6:00 a.m. out West. We are glad that you are getting your day going with us here.

Here is what we have so far this hour.

Is he going too far or not far enough? Suzanne Malveaux at the White House where the president wants a spending freeze.

After eight-plus years, can the Afghans take the lead in this war? Our Atia Abawi in Kabul where the U.S. is training the troops, putting the guns, skills and hopefully the future in their hands.

And studying the sex habits of college women on your dime? Oh, dear. Poor T.J. Holmes probably had no idea our Stimulus Desk would be so interesting this morning.

(LAUGHTER)

I don't think he can hear me.

All right, we begin this morning now. Closing the government's checkbook. CNN has learned that President Obama has a plan to put the brakes on spending. A giant screeching sound out of D.C.

CNN White House correspondent Suzanne Malveaux at the White House.

So, Suzanne, what kind of spending are we talking about?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: A giant screeching sound. I think that's quite accurate, Kyra.

What we're talking about here is discretionary spending over a three year period. Now it doesn't include things like homeland security, defense or veterans affairs, but it does include those items that are discretionary. And they are thinking in the tune of $250 billion that the government could save.

It is a very controversial proposal, as you can imagine. It doesn't deal with the big entitlement programs like Medicare or Medicaid, those types of things, but there are all kinds of folks who are saying look, this is not a good idea. Republicans, Democrats, and even some economists. We heard from the former labor secretary under the Clinton administration, Robert Reich. He said, look, this just is not the right time for a spending freeze. And here's how he sees it.

(BEGIN VIDEO CLIP)

ROBERT REICH, FORMER LABOR SECRETARY: I don't think it makes much sense, Larry, and I'll tell you why. The government, under the circumstances we now face is the purchaser of last resort. Consumers are not buying. They're still scared for good reason.

Businesses are not investing very much. They don't want to invest if there are not consumers out there, so government is going to spend. You know this is something that a lot of people have difficulty understanding.

(END VIDEO CLIP)

MALVEAUX: So, Kyra, he's saying that in the short term the government should be spending money, should not be freezing the money.

Now Republicans -- there are some Republicans who've weighed in who've already said, you know, the spending freeze is not enough. It doesn't deal with those major entitlement programs, Medicare and Medicaid, Social Security, those types of things.

And there are Democrats who are saying look, we are really worried about our programs, whether it's health care, whether it's education, we don't want to see these kinds of cuts particularly after eight years of the Bush administration.

What does this do? What does it accomplish for the White House? Well, it moves it closer over to appealing to those more fiscally conservative Democrats, some of those independents that he's lost some support from, as well as some Republicans.

And, Kyra, the bottom line here is that the president and the administration acknowledged they need to do that, they need to move closer over to that middle ground if he is going to get anything done legislatively.

And the president said himself, in part, that is why health care reform failed in the form that it did. He said this to Diane Sawyer yesterday.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have to make so many decisions quickly in a very difficult set of circumstances that after a while we started worrying more about getting the policy right than getting the process right.

(END VIDEO CLIP)

MALVEAUX: So, Kyra, they need bipartisan support. That is what the president is going to be focused on. That's what he's emphasizing in the State of the Union address tomorrow, focusing on the middle class in some sort of middle ground when it comes to what Republicans and Democrats are looking for the American people -- Kyra.

PHILLIPS: All right, Suzanne, thanks so much.

And just to remind you, President Obama's first State of the Union speech coming up tomorrow night, 9:00 p.m. Eastern. But we're going to start early. CNN's special coverage starts actually at 8:00 p.m. Eastern, and stick around afterwards. We'll have all the analysis.

All right, let's talk about Afghanistan. Berlin sending another 500 soldiers there. The U.S. just committed 30,000 and the mission is very specific. Teach Afghans how to fight for themselves.

CNN's Atia Abawi has more.

(BEGIN VIDEOTAPE)

ATIA ABAWI, CNN CORRESPONDENT (voice-over): U.S. and Afghan troops storming a building, working together, not in battle, but in training.

This is where the first part of President Barack Obama's troop surge begins, training the Afghan National Army. A major challenge after years of lost time and resources as the U.S. focused on Iraq.

COL. GREGORY BREAZILE, U.S. MARINE CORPS: We, by far, under resourced this mission for years, OK? Afghanistan was an economy of force mission, versus Iraq where we had a large surge and it changed the dynamics in Iraq. Because of this economy of force mission, we didn't have enough boots on the ground to really change the dynamics here.

ABAWI: But that will soon change. By the end of January, they hope to have 850 U.S. trainers in 16 different locations throughout the country, including here at the Kabul Military Training Center where they are teaching Afghans hand-to-hand combat, how to monitor check points, and how to handle a rifle among other necessary skills.

(On camera): Prior to the surge, there is only about one American trainee for every 200 Afghan soldiers. The goal is to decrease that ratio to 1 in every 40 in hope of improving the quality of the Afghan National Security forces so in the end they can take the lead role in securing their own land.

(Voice-over): The Afghans have various reasons to sign up, usually starting with financial. To boost recruitment, salaries have recently been raised, but that's not the only reason people are joining.

"We are serving our country and defending our nation," Abdul (ph) says. "By defending our land, we also get a small salary, that's why we do it. We are able to serve our country and serve our parents by sending our salaries to our families." Abdul Fattal (ph) left his wife, parents and 2-year-old son in the north. He admits he won't be a life-long soldier, but for now he will serve and hopes that his son can live in a safer Afghanistan.

(END VIDEOTAPE)

PHILLIPS: All right, Atia Abawi on the phone with us now. Real quickly before the follow-up question, Atia, there has been a bombing there in Kabul, and of course, we're very sensitive about these bombings right now after losing some of our CIA agents.

ABAWI (via telephone): Absolutely, Kyra. It actually happened in the city of Kabul, the capital. It's at a place called Camp Phoenix. That's a U.S. military base.

The good news here is that we're hearing that there haven't been any deaths. But we are hearing that there have been injures. Six Afghans were injured and two Americans according to the Afghan police on the ground. We're still waiting to hear on just more details on what exactly (INAUDIBLE).

What we do know is that it was a car bomb in front of the base. It has been targeted in the past. And it's an area that has continuously been targeted. But again, in the end, these attackers tend to kill more Afghans than their intended targets. Kyra?

PHILLIPS: All right, we'll follow up with that. Now back to the Afghan troops. You know this new strategy calls for about 134,000 of them ready by October. Where do we stand now?

ABAWI: Right now we stand at 102,000 Afghan National Army soldiers. When I did go to that training facility that the story just aired on, it was promising. They did seem to be teaching these Afghan soldiers how to fight. They were six weeks into their training.

But I also have to say just a few weeks ago I went out with army recruiters, and it seemed to be more about quantity than quality, because they want to reach that number by October of this year.

And when I spoke to the Afghan trainers, they're at the center. They said that they are not making it quantity over quality. That they want these soldiers to be ready because in the end they do want the American soldiers to leave it to the Afghan soldiers themselves, but they say that they still have a pretty long way to go. Kyra?

PHILLIPS: Yes, we want our troops coming home. We want them to be ready as well. Atia Abawi, thanks so much.

So how is that economic stimulus bill working out for you? Everything hunky-dory now?

Well, new results from the CNN Opinion Research Corporation poll suggest that public is still pretty divided. Big picture first. Only about one in eight believes that the stimulus bill improved economic conditions. But nearly half say it stabilized the tanking economy. About one in five believes that the stimulus bill had no effect on the economy. About the same percentage say it actually made things worse.

Now as far as personal benefits go, most Americans are not even seeing them. Just 7 percent believe the stimulus bill has helped them. One in 4 says it stabilized their own financial situation, but nearly half say it's done nothing. And 20 percent of those polled say it's actually made their personal financial situation worse.

The government stimulus program, it's your money and you should know how it's spent. Don't you think? Well, this week at CNN we'll bring you the answers.

We're looking at where the $158 billion in stimulus funds -- nearly 57,000 projects, by the way -- have gone or are going. And our team is looking at projects that really stimulate the economy and those that might have you saying, why don't they just flush the money down the toilet instead?

Let's track some of your money right now. That means T. J. Holmes working the CNN Stimulus Desk.

T.J., right now you're looking at a taxpayer funded bridge for Microsoft?

T.J. HOLMES, CNN ANCHOR: Yes, let me explain, though.

PHILLIPS: You can't be serious. Are we talking about the same Microsoft that turned Bill Gates into the richest man...

HOLMES: Yes.

PHILLIPS: ... on earth?

HOLMES: Yes. Yes. But you got to dig into the details a little bit. And that's what we're doing. We -- you know that famous bridge to nowhere over in Alaska that got so much attention a few years back?

Well, we have another bridge, a bridge to Microsoft. At least it goes somewhere this time. But we're talking about out at their main campus, out in Washington, of course, in Redmond.

Now they have two main campuses there, East and the West. And there is a bridge that is being built to connect those two campuses. So it connects their employees on one side to the other. It goes over a highway.

Now other people will be able to use this bridge, if you will, but for the most part it's meant to benefit Microsoft and their employees. So it costs, of course, millions and millions of dollars to fix this thing. The city -- to build this thing.

The city of Redmond pitched in some money. Microsoft pitched in money as well, but now, you and me are pitching in money as well. I'm going to walk over, take a little trip over here to our Stimulus Desk because I need to ask Ines Ferre, one of our folks here on the Stimulus Desk that's been looking into this. Because I was even -- Ines, and I will admit to the viewers. I was trying to break this down and I was confused about the jobs created.

They say 1,200, but it's not that simple.

INES FERRE, CNN STIMULUS DESK PRODUCER: No, it's not. And actually I was on the phone with the person who manages the construction office up in Redmond, and he was explaining to me that basically every month they report how many people worked on this...

HOLMES: Hold on. They tell me the mike's not working there. We're just going to improvise. You talk into this microphone.

FERRE: All right. All right. So I was on the phone with the person that manages the construction for Redmond. And so they -- every month they report how many people worked on that project. So, for example, in August, 245 people worked on the project. In September, they had 151 people working on it.

So some of the people are the same, some people aren't the same. But that does not mean that everybody is continuously working on it. They just tally up all the months. So their tally is 1,200 from May 1st to December 31st, and that includes contractors and includes staff and includes consultants.

HOLMES: So it's a little deceptive in that one person could be counted the same, month after month after month?

FERRE: But -- right, but the numbers vary as far as how many people are working on the project each month. And they're tallying -- every month they report how many people have worked on this project.

HOLMES: And once again, how much of our money, taxpayer money, went to fund this particular bridge to Microsoft, if you will?

FERRE: $4,594,000 of stimulus money went to fund this. They've got money also coming from Microsoft and they've got also another previous federal grant that they had gotten earlier. But as far as stimulus is concerned, $4.5.

HOLMES: All right, Ines, thank you. And, Kyra, I hope you can see there exactly what I'm going about. I'm going to go back over to the board and we'll wrap it up. So I'm going to show this number one more that that we're keeping up with. But it --you know, when you hear it, like you said initially, this is the same company that made Bill Gates the richest man in the world.

Yes, that's the one we're talking about. They are getting stimulus money, the city in particular, but yes, they're getting stimulus money. You would think that Microsoft could just pull that money out of their pocket and pay for this bridge. You would think so, but still, you have to look into a little deeper. So this number is the tally of -- the amount of job or the amount of money we are -- actually right now actively investigating. You add to it what we have there with the Microsoft and the number jumps a little bit. But we're talking about one -- almost $2 billion now that we are keeping an eye on.

So, Kyra, that's what we're trying to do, of course, all week. Initially you have reactions when you hear, the money is going towards what? And how many jobs? But then when you break it down a little deeper, it's not really 1,200 jobs, like it sounds like. And you know what? The money is actually going to the city of Redmond. So we leave it to the viewer, to the taxpayer, to decide, but that's what we're trying to do, to dig a little deeper behind these numbers.

PHILLIPS: Got it. You're reaching into some deep pockets there, T.J.

HOLMES: There's some pretty deep pockets out there.

PHILLIPS: OK. I'll talk to you soon.

HOLMES: All right.

PHILLIPS: Here's a look at our continuing coverage from "THE STIMULUS PROJECT." Tomorrow on "AMERICAN MORNING," $5.5 million to fix up a resort town. You OK with that? Good use of your taxes? But one woman is grateful that the government is spending your money.

And tonight, on "CAMPBELL BROWN" 8:00 eastern, is the stimulus working for average Americans. An exclusive interview with Earl Devaney, the man, the watchdog that President Obama picked to oversee the stimulus plan.

Then at 10:00 Eastern, "AC 360" investigates why stimulus money is being wasted on unnecessary road signs.

"THE STIMULUS PROJECT", all this week, only on CNN and at CNN.com/stimulus.

Two weeks now since the quake and there are still desperate shortages of aid in Haiti. Food isn't the biggest need anymore.

JACQUI JERAS, CNN METEOROLOGIST: I'm CNN meteorologist, Jacqui Jeras. Near blizzard conditions still across parts of the upper Midwest. We'll show you some pictures of that as well as your travel forecast. That's coming up.

(COMMERCIAL BREAK)

PHILLIPS: Well, we're learning more about yesterday's plane crash in the Mediterranean Sea. Check out this video from a security camera. You actually see the Ethiopian airliner right there in the upper right. It's going, going, and then the subtle explosion right there.

The AP has reported that the pilot took the wrong path, ignoring directions from tower control. Lebanon's transportation minister says that the plane made a very fast and strange turn. There are 90 people onboard and so far no one's been found alive.

Haiti's president says he'll live in a tent. The quake damaged his palace and his house. He is trying to highlight the desperate need for tents in Haiti. The quake left about a million people with no place to stay and a lot of people are questioning, where has there president been?

$3 billion to rebuild. That's what Haiti wants from the international community. Representatives from the major donor nations heard the plea during a meeting in Montreal. More than $1 billion has already pledged.

Fifty-nine Americans died in that quake, but there are still 4,800 that are unaccounted for.

Winter weather taking a pretty deadly turn. Take a look at this from Dallas County, Iowa. You can barely see anything. This is what you call whiteout blizzard conditions. The Des Moines newspaper is reporting this right now.

More snow for the Midwest. Flood watches in the northeast, and the storm system, a menace for the west coast, right, Jacqui?

JERAS: Amazing pictures, Kyra. Wow. Doesn't make me miss Iowa.

(LAUGHTER)

PHILLIPS: That's right.

JERAS: Though I do most days.

PHILLIPS: That's your state there.

JERAS: Well, I'm not from there, but lived there for long time.

PHILLIPS: You worked there for a while.

JERAS: I did. And you know, even though, you know, as you look at the radar, things -- it looks like it's much, much better, but not so much actually.

(WEATHER REPORT)

PHILLIPS: OK, Jacqui, thanks.

Well, keep on trucking but lay off the texting. The government is cracking down on a major road hazard.

(COMMERCIAL BREAK)

PHILLIPS: All right, here are some of the other top stories that we're watching right now.

A laundry list of deadly weapons were found at this New Jersey hotel, including a grenade launcher. Police caught the guy who's staying there after he rents the wood. The score clerk had called police. He said that the guy was acting strange but didn't seem to notice the bullet proof vest and assault rifle under the guy's coat.

Police sat Lloyd Woodson had other guns, a lot of ammo, and a map of a military base in his room.

The top two members of the 9/11 Commission are weighing in on the failed Christmas day plane attack over Detroit. Lee Hamilton and Thomas Kean are at the Senate Homeland Security Committee hearing. It gets under way in about 30 minutes. Both blame a lack of communication in the intelligence community for letting the would-be bomber get on that plane in the first place.

So stop texting in your truck right now. It's banned starting today. This video actually shows what Transportation Secretary Ray LaHood is trying to avoid. He calls it a safety step for everyone on the road. Truckers and bus drivers caught texting could be fined up to $2,700.

How do you enforce the new rule? No word on that yet.

So how's this for a political theater? Washington pulls the strings, you shell out the money. Lots of it. $100,000 for puppets. We're tracking your stimulus money.

All week we are showing you how your tax money is being spent in the government stimulus program. Next up, a selection that may get star billing in the theater of the absurd. Are you siding down? $100,000 for puppets.

(COMMERCIAL BREAK)

PHILLIPS: All week we're showing you how your tax money is being spent in the government's stimulus program. And next up a selection that may get star billing in the theater of the absurd.

Are you sitting down? $100,000 for puppets. CNN's Chris Welch explains.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Did you see a beaver here?

CHILDREN: Behind you!

CHRIS WELCH, CNN ALL PLATFORM JOURNALIST (on camera): I am here in the Heart of the Beast Puppet and Mask Theater where this little guy and his closest friends were given a stimulus check for $25,000.

Now you might be thinking, my tax money for puppet shows and for the economy?

Well, the theater says that money went to preserve a vital job. It's for a person who essentially hires outside puppeteers throughout the year, brings them here and gives them jobs. Well, not everyone sees it that way. And in fact, critics say star of the beast.

DAVID STROM, CONSERVATIVE RADIO HOST: It's utterly insane.

WELCH: David Strom, a local conservative podcast host, says this kind of stuff has absolutely nothing to do with stimulating the economy. He says it's political favoritism and calls it pure pork.

STROM: The one benefit that came out of that $25,000 grant, really, was informing the rest of us that we have been subsidizing to one extent or another this perfectly ridiculous theater.

WELCH: And this is Phil Krinkie. He's the president of the Taxpayer's League of Minnesota, but he also runs a heating and cooling business. Now he says employed artists are not as in demand as people with more vital jobs.

PHIL KRINKIE, TAXPAYERS LEAGUE OF MINNESOTA: I guarantee you when it's 20 below in Minnesota, having somebody repair your furnace is going to be a lot more critical to you.

WELCH: But that's not the way this economics development professor sees it.

ANN MARKUSEN, UNIVERSITY OF MINNESOTA: There is probably no faster way that you can get money into the pockets of people and have it cycle through the community than spending it on arts and culture activity.

WELCH: She says that's because artists tend to spend their money more locally.

SHARI ARONSON, "Z PUPPETS ROSENSCHNOZ": I spend money. I call the plumber when I -- if I have the money. If I don't have the money, I'm not -- I can't call the plumber.

WELCH: But I think it's safe to say, if you were to ask the puppets, they were given a hand right where they needed it.

In Minneapolis, Chris Welch, CNN.

(END VIDEOTAPE)

PHILLIPS: All right, here's the bottom line breakdown of how your money was spent. The federal grant allocated $25,000 to the puppet theater. At least one job was created.

Remember, we want to hear your stimulus stories. The good, the bad, the wasteful? Call us at the stimulus tip line, 1-800-CNN-TIPS. That's 1-800-CNN-TIPS.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Kyra Phillips.

PHILLIPS: So what happens on Wall Street can affect financial markets around the world. It works the other way, too. Stocks overseas are lower. And we're expecting the same here, right, Susan Lisovicz?

SUSAN LISOVICZ, CNN CORRESPONDENT: All connected. We've seen that play out time and time again. And we are expecting stocks to be under some pressure, at least in the early going because of concerns about the global economic recovery.

Great Britain emerged from recession at the end of last year but its GDP growth much slower than expected. There are also fears about China because regulators are forcing banks to boost their cash reserves.

But an upbeat housing report could lift sentiment. Home prices in the 20 biggest cities unexpectedly inched higher in November.

Apple shares also, we're expecting them -- well, not to charge, be up sharply, up 2 percent in the pre-market. The company reported record-breaking quarterly sales because of strong iPhone and Mac sales and profit jumped by 50 percent. It's good to be Apple.

General Motors meanwhile speeding into the electric car business and that means job creation. GM intends to be the first major automaker to design and manufacture electric motors for cars in the U.S. Typically automakers get many of their parts from other companies. GM says, we'll add a couple of hundred jobs to make the engine.

Ford is harboring too. It will announce today. It's adding 1,200 jobs at its Chicago assembly plants, which makes the Explorer SUV. So we are seeing a little pressure in the early going.

But, Kyra, did you see who rang the opening bell? These are heroes.

PHILLIPS: Who was it?

LISOVICZ: New York Task Force One. These are people who arrived within hours of the devastation in Haiti and among their heroics, they rescued six people alive. They got a hero's welcome on the trading floor.

PHILLIPS: Well deserved. Amen. Susan, thanks so much.

LISOVICZ: You're welcome.

PHILLIPS: President Obama has a plan to control the deficit. Stop spending, but it's not that easy. The president's plan gives the pass for defense and national security.

So what are we really talking about here? CNN has learned that the president will announce a freeze on discretionary spending in tomorrow's spending during tomorrow's State of the Union speech. That means if you spend on one program, you have to cut another. Education and health care could face cuts, but not Medicare, that's an entitlement. Examples of discretionary spending are things like NASA's budget and the stimulus. And on that note to CNN's Stimulus Desk. Some of our colleagues are tracking how the government is spending your money. T.J. Holmes is our guy, he's breaking it all down.

Did I take a double take when I saw this one, where we are paying for studies of topics that maybe well, a little off beat?

HOLMES: Look, it's called a stimulus bill, right, Kyra, so naturally...

PHILLIPS: I guess it makes sense.

HOLMES: There would be something in there to check on how people are stimulating themselves these days. Kyra, listen to this now and stay with me.

Description says there appears to be a increase in hookups, defined as sexual encounters between adolescent partners who have no expectations of romantic commitment. That's what some of your tax dollars are funding, a project to check on exactly why young people hookup, essentially.

Now this comes -- in all seriousness here, this is a sex study coming out of Syracuse University. The National Institute of Health gets billions of dollars from the stimulus to actually hand out grants. One of the grants went to Syracuse for this particular study. Now the purpose of the study is to measure the prevalence of these hookups in the first year of college and explore the mental and physical health consequences of it.

Now yesterday we were talking about other grants that the NIH had handed out. So Dr. Francis Collins from the NIH, they were aware of our reporting. They saw it and sent me an e-mail almost immediately after I got off the air and so we arranged it. The director came on wanted to defend and explain why these studies are important.

Take a listen to Dr. Francis Collins now.

(BEGIN VIDEO CLIP)

DR. FRANCIS COLLINS, NIH: About half of the deaths in this country come about because of behavioral components of people who have trouble controlling their use of alcohol or drugs for instance or sexual behaviors. If we really are serious about public health, we need to understand that better in order to plan interventions that will work.

(END VIDEO CLIP)

HOLMES: So there you go. Dr. Collins there explaining and even thought -- and this was a $219,000 study. To think that taxpayer money is going towards a sex study, initially that might cause some concerns. And there was another study that involved risky drinking. That costs about a half million dollars.

Initially to some people you might think, wait a minute, is that what my tax money is going towards? You see there only one job created. Also Dr. Collins saying these grants, they're on average to get about seven jobs out of them on the smaller projects, maybe just about two to three jobs.

So that -- and again, initially it might sound odd and what not, but he defends it that you study the stuff and you learn more about it and you can improve public health and in the long run save this country money. Now is that exactly what the stimulus was intended for, when all we heard was we were going to create jobs and keep people in jobs. You know people can decide for themselves so that's why we're digging a little deeper over here.

PHILLIPS: T. J., it cost nothing to be a good parent and it cost nothing to sit down with your child and talk about sex and talking about hooking up and talking about alcohol and et cetera, et cetera, et cetera.

HOLMES: But for those that don't have that luxury of maybe those parents or maybe...

PHILLIPS: Take it to stimulus funds to make up for all that.

HOLMES: To study the stuff and maybe it will help us out in the long run. Hey, I am just reporting the facts here.

PHILLIPS: I'm with you. I'm not going to hammer you, I promise.

HOLMES: All right, thank you.

PHILLIPS: So I'll see you later.

HOLMES: All right.

PHILLIPS: Here's a look at our continuing coverage from the stimulus project. Tomorrow on "American Morning," $5.5 million to fix up a resort town. How can that be a good use of taxpayer dollars?

Well then tonight on "CAMPBELL BROWN" at 8:00 Eastern is the stimulus working for average Americans? And exclusive interview with Earl Devaney, the man that President Obama actually picked to oversee the stimulus plan.

Then at 10:00 Eastern, "AC 360" investigates why stimulus money is being wasted on on road signs that no one needs. The stimulus project, all this week only on CNN and at cnn.com/stimulus.

(WEATHER REPORT)

PHILLIPS: All right, it sounds good, Jacqui. Thanks.

Well, my writer, Phil Riley got us all laughing at our morning meeting at the crack of 6:00 a.m. You know how excited contestants get on "The Price is Right." Well, some are just pretty overwhelmed just the thought of the prices. Here we go.

(COMMERCIAL BREAK) PHILLIPS: Top stories now. The father of former Olympic ice skater, Nancy Kerrigan is dead. Police think that her 45-year-old brother had something to do with it. He denies responsibility for this, and is quite distraught about his father's death. He is grieving.

Yesterday, Mark Kerrigan pleaded not guilty to assault and battery. Whatever happened left his 70-year-old father, Daniel, dead at his family's home. Police say the elder Kerrigan died after he either fell or collapsed after a violent argument with his son.

This morning in Connecticut, in a courtroom, an Animal Research technician charged with killing a Yale grad student is expected to plead not guilty. Police accused Raymond Clark of strangling 24-year- old Anna Lee and then stuffing her body behind a wall.

And the last surviving member of the "Bonanza" boys has died. Actor Pernell Roberts passed away Sunday at his home in Malibu, California. Now depending on your age, you knew him as either Adam Cartwright from the famous Western, or as "Trapper John M.D." Roberts had been battling cancer. He was 81-years-old.

All right something else we will check in on CNN.com. It's called "News Polls." It's an icon that you can actually go to right on the web site. I'm going to take you there right now. If you go to CNN.com and go up to the top left corner and click on news polls, and it tells you the stories that you're paying attention to.

Maybe stories that were not covering here on the air in our newscast, but if you go to cnn.com, these are the ones that you are talking about. We will tell you more about the story later in the hour, but the first most popular story right now, a coach making an impossible shot. Basically this joke backfired on students after a coach made a basketball shot blindfolded from half-court, and you will see what the students promised him and now cannot deliver.

The second one comes from ccnmoney.com, talking about the four new asset bubbles. What are those? Check it out. It says beware, and that's why it's probably second most popular.

And then GM making electric motors in the U.S. that's story number three, and finally the fourth one there, justice is denied taunting a killer's appeal, and you can click on and see the details of that story. Go to cnn.com and click on news polls and get the details. The page is updated every 15 minutes by the way.

(COMMERCIAL BREAK)

PHILLIPS: The injuries you can't see; survivor stress, many people leaving in the quake zone still living in fear, afraid of the next tremor and they've been there at least 50 -- well, they've experienced at least 50 aftershocks since the 7.0 killer.

CNN's chief medical correspondent, Dr. Sanjay Gupta, joins us now live from Port-au-Prince. And I guess, Sanjay, as a doctor you probably saw this coming? DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you know, in many ways, you know the physical injuries are going to be the most demand, at least in the first couple weeks. But these emotional injuries that you are alluding to Kyra, you do see them coming.

You have seen natural disasters throughout history where you have significant problems of PTSD afterwards, anxiety, depression. Every time you have one of those aftershocks as well, more than 50 as you mention. They kind of re-open those emotional wounds as well.

Take a look.

(BEGIN VIDEOTAPE)

GUPTA (voice-over): Rumor of a big wave sends thousands running to higher ground, many of them leaving behind the only possessions they recovered after the quake. These injured survivors beg doctors to leave them outside, they're too frightened to be inside.

DAVID WALTON, PARTNERS IN HEALTH: The Army Corps of Engineers has been here three times and has cleared several of these buildings. And every time there's an aftershock every -- all of our sick patients will run outside. You know there is so much trauma both psychological and physical no one wants to stay -- both staff and patients refuse to go into any buildings.

GUPTA (on camera): And here's another good example of exactly what we're talking about. This is a standing house but there's nobody living inside.

It is hard to estimate the impact of all these aftershocks on someone's psyche. They are so frightened, they don't want to be in there. They are worried that their house could come tumbling down.

So instead, they live like this. They live in these tents, makeshift tents because they simply want to be outside where they think it's safe.

How scared were you?

KIMBERLY PIERRE, EARTHQUAKE SURVIVOR (through translator): Very scared.

GUPTA: It's been around two weeks now since the earthquake. Are you still scared?

PIERRE: Yes because from time to time they strike again I'm very stressed and my heart is beating.

GUPTA: She says there is no one to help and she has nightmares of another quake.

How many people like you are there? I mean, how many people in Port-au-Prince are going through what you are going through?

PIERRE: Lots of people. GUPTA: It is difficult to diagnose post traumatic stress disorder less than a month after the quake, but we do know a few things. First of all it is worst in some people who have some sort of pre-existing mental illness. People who have endured the most trauma or seen the most horrific images.

The best advice to them, try and be with family, and also turn to your faith if you can. But it is difficult when even the churches have been destroyed.

(voice-over): So what does work? Access to the basic necessities again, clean water, food. And even what might be considered perks, pillows, blankets, some sort of routine. No doubt all of this is tough, and it's dangerous to generalize, but there is also simple evidence that it can work.

Today this young boy built a kite out of a paper plate. Despite the odds, he gets it flying, bringing a smile to his face and ours for just a moment.

(END VIDEOTAPE)

GUPTA: We do have some -- some idea of how post traumatic stress, anxiety and depression sort of play out. Kyra, if you look at the tsunami, for example, about a year after the tsunami, roughly two- thirds of people had some sort of diagnosis like that, either anxiety, a depression or a post-traumatic stress.

So again, it's early to be sort of diagnosing that now, but you know in the weeks, months, even years ahead, that's going to be a huge issue here.

PHILLIPS: Yes, I know. No doubt we'll be talking about it for years to come. Sanjay Gupta thanks so much.

Straight ahead, if you're driving in Denver, don't be surprised if you see a Nazi on the side of the road. No need to worry, he is just helping keep Colorado beautiful.

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PHILLIPS: Cruising down the old Nazi Highway. The what? Well, that's what you could call one stretch of Route 85 in Denver. Members of the Colorado chapter of the National Socialist Party, all six of them, adopted one mile of road; I guess it's part of their community outreach program.

(BEGIN VIDEO CLIP)

NEAL LAND, COLORADO SOCIALIST PARTY SPOKESMAN: People are active in this state and most of all we're doing good things in this state. We're not a group that's out there selling drugs, running guns. We don't support any illegal activities of any sort.

(END VIDEO CLIP)

PHILLIPS: Sure, just racism.

However, the Transportation Department says they're giving them the benefit of the doubt and apparently suspending all belief. We don't advocate littering, but really, if you're looking for a place to dump your trash, you figure it out.

Open mouth, insert foot. Really, jam it down there. Andre Bauer may need a search team to get his shoe out of there. Why, you ask? Well, Bauer, South Carolina's Lieutenant Governor basically called poor people animals. Listen.

(BEGIN AUDIO CLIP)

ANDRE BAUER, LIEUTENANT GOVERNOR, SOUTH CAROLINA: The problem is there's so many folks now that don't have to do a thing. In government we continue to reward bad behavior. Any time we give somebody money, we're rewarding them. We're telling them to keep doing what they're doing.

My grandmother mother was not a highly educated woman but she told you as a small child to quit feeding stray animals. You know why? Because they breed. You're facilitating the problem. If you give an animal or a person ample food supply, they will reproduce, especially one that don't think too much further than that.

And so what you've got to do is you've got curtail that type of behavior, they don't know any better.

(END AUDIO CLIP)

PHILLIPS: Because they breed? Are you kidding me? Bauer says he stands by his message but would probably use a different metaphor now. No kidding, be proud, South Carolina, that this guy is running for Governor to replace family man Mark Sanford. We'll have much more on this teachable moment in our next hour.

And we want to know what you think of Lieutenant Governor's comments. Post your comments on my blog CNN.com/Kyra and I'll read them in the next hour. And we'll talk more about it with the CNN education contributor Steve Perry, also former CNN Washington Bureau Chief, Frank Sesno.

Now, there's a lot of news developing this morning and CNN crews are running down all the details. Let's go and check in with our correspondents beginning with Susan Lisovicz at the New York Stock Exchange -- Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Kyra, we all need an occasional indulgence, even in these tough times. Despite the recession, many Americans do have rooms in their budget for a few select luxuries. Kyra, I'll tell you what gadgets we can't live without in the next hour.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: And I'm Christine Romans in New York where I'm following your stimulus money from the Treasury to the food companies all the way to the food banks where your stimulus dollars are actually putting pork, real pork, not government pork, real pork on people's plates. I'll have that story at the top of the hour.

JACQUI JERAS, AMS METEOROLOGIST: And I'm CNN meteorologist Jacqui Jeras. Just because it's not technically a blizzard it doesn't mean it's a picnic across parts of the Midwest. Your travel forecast is coming up.

PHILLIPS: Also ahead, back from the disaster zone. Our Elizabeth Cohen looks at the life and death decisions that doctors faced and still face in Haiti.

(COMMERCIAL BREAK)

PHILLIPS: You may be glad to know that billions of dollars in stimulus money isn't reserved just for America's best, brightest and most deserving. Crooks can get their fair share too.

CNN's investigative correspondent, Drew Griffin actually went to Boston to find out why Massachusetts is giving millions of dollars in stimulus money to an asphalt firm, one that's been convicted of ripping off the government.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): As a money pit, the never-ending Big Dig project in Boston is notorious: $22 billion and still counting, to bury the interstate under downtown. It's been plagued by problems, leaks, cracks; mostly as a result of shoddy construction.

One company was even indicted for supplying the Big Dig with below-grade concrete that had been doctored to make it look ok.

(on camera): The name of that company is Aggregate Industries, and two years ago the state of Massachusetts announced this big fraud settlement against the company, basically saying that for years Aggregate was supplying defective concrete to the Big Dig project; concrete that was so bad it wouldn't set properly. It led to cracking, leaking, and other big defects.

So which company do you think is now getting your stimulus money here in Massachusetts? Aggregate Industries. We're going to go ask the highway department why.

(voice-over): Luisa Paiewonsky is the highway administrator.

(on camera): If I hired a plumber, and the plumber put in garbage pipes that leak, I wouldn't put the plumber on probation. I'd never hire that plumber again.

LUISA PAIEWONSKY, MASSACHUSETTS DEPARTMENT OF TRANSPORTATION: Well, if you're asking me did we have a visceral reaction? Yes, if I were the sheriff I would have -- I would have required that they not do any more public construction...

GRIFFIN: You're the commissioner of transportation.

PAIEWONSKY: I have to follow the law. I am a public official, and I have to go as far as the law will allow me to go. We punished them as far as we could. They're back.

GRIFFIN (voice-over): Back with the low bid on two jobs in Massachusetts' cut of the federal stimulus bill. And after paying a $50 million fine and agreeing to be overseen by a federal monitor, its plea bargain with the government allowed Aggregate to come back for more government work.

Aggregate hired Nancy Sterling to help with its public relations.

NANCY STERLING, SPOKESPERSON, AGGREGATE INDUSTRIES: The company took it extremely seriously. It's a very different company than it was prior to the Big Dig. There are new managers, new owners and a whole new corporate ethics and compliance policy in place.