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American Morning
Robert Byrd, Longtime Democratic Senator, Dies at 92; Elena Kagan Supreme Court Confirmation Hearings Begin; Payback for Drilling Ban: Affected Workers Can Now File Claims; Where Tropical Storm Alex is Headed; The Deficit Pledge; Teachers Pounding the Pavement; Elena Kagan: "Incredibly Bright -- Well Prepared"; Banking Bill; In Pursuit of Predators
Aired June 28, 2010 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Good Monday morning. Thanks very much for joining us on the Most News in the Morning on this 28th of June. I'm John Roberts.
KIRAN CHETRY, CNN ANCHOR: I'm Kiran Chetry. Glad you're with us this morning. We start with some news just in to us this morning.
Breaking news overnight. The nation's longest serving senator has died. Dana Bash will have more on the passing of West Virginia Senator Robert Byrd in a moment.
ROBERTS: No boats out, no trucks to load. The ban on deepwater oil drilling hurting people far away from the Gulf of Mexico. And the government says BP is now responsible for taking care of all of them, too. We're live in New Orleans with a look at the domino effect on jobs.
CHETRY: Tropical Storm Alex is in the Gulf of Mexico and gaining strength. CNN's weather team is forecasting that it will likely become a hurricane in the next 48 hours. We're going to get more on where Alex is headed.
ROBERTS: And the amFIX blog is up and running as it is every day. Join the conversation going on right now at www.CNN.com/amFIX.
CHETRY: And we begin with news just in to us this morning, sad news from the world of politics. West Virginia Senator Robert Byrd, the longest serving U.S. senator in U.S. history, has died. He was 92 years old.
ROBERTS: Senator Byrd's office says he died just a few hours ago at a Washington area hospital. Our senior congressional correspondent Dana Bash is following the story live from Washington. And he became ill quite suddenly but any way you look at it, 51 years in the Senate. What a record.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: What a record. And it is hard to overstate how important this man has been to the United States Senate. He really embodied the Senate. He was a lover of his tradition, the keeper -- unofficial keeper of the tradition and rules of the Senate. He served 13 presidents. If you can imagine that, 13 presidents and he always liked to remind people when he waved the constitution, John and Kiran, that he always kept in his breast pocket that it was the legislative branch that was mentioned first in the constitution before the executive branch, before the president of the United States.
I had a chance to sit down with Senator Byrd. He has been quite ill and frail for the past several years. But before then, in fact on the anniversary of becoming the longest serving senator, I had a chance to sit down with him and I asked him about the fact that he is the keeper of Senate tradition and asked him about what the chapter would look like on him.
(BEGIN VIDEO CLIP)
BASH: You are not only a student of the history of the Senate but you obviously wrote the history of the Senate. So given that, looking at this milestone, what will the paragraph or the chapter on Robert C. Byrd say? What should it say?
SEN. ROBERT BYRD (D), WEST VIRGINIA: The chapter isn't written yet, the last chapter. And there may be several chapters ahead. So we'll wait and see.
I love the Senate. So I've seen great changes in the Senate. But the Senate is still the premier spark of brilliance that the framers had in framing the constitution and in forming the government and in being founders of this republic.
(END VIDEO CLIP)
BASH: And there you heard him talking about the United States Senate. He was back with their back during the Civil Rights Act, the debate. In fact, John and Kiran, that was his longest filibuster. You want to know how long he waged that filibuster? 1964, it was 14 hours and 13 minutes, and it was against the Civil Rights Act.
And Senator Byrd told me and probably anybody who would listen over the past several years that he regretted that vote against the Civil Rights Act. He said it was because of the southern atmosphere in which he grew up and all of its "prejudices" and its feelings. Again, this was the titan of the Senate. His presence, although he was ailing in the past few years, his presence was felt every day and his lack -- absence will be missed.
CHETRY: He also had to spend some time trying to live down his short membership in the KKK as well.
BASH: He did. In fact, he has called that the albatross around his neck. In terms of the membership in the KKK, he said to me actually in that interview, "It will always be there. It will be in my obituary." He said he never hesitated to say that that membership as a very young man growing up in West Virginia, the son of coal miners, very, very poor at the time. He was, he said, the subject of his presence, of his -- of where he lived and he said he never hesitated to say it was the greatest mistake of my life. But one other thing talking about West Virginia, if either of you or anybody has driven through the state of West Virginia, you cannot help but notice you are driving on a Robert C. Byrd road, you are passing a Robert C. Byrd building. There is so much in the state of West Virginia that is named after him.
And why is that? It's because he sent so much federal money back to the state of West Virginia. He was known as the king of poor. He wore that very, very proudly. He said that is his role as the United States senator and he actually was the chairman of the Appropriations Committee which, of course, is the committee that sends -- that is in charge of the purse strings. And he used that to the greatest extent and he absolutely made no apologies for it. He said I'm a hillbilly and that is what I remember about West Virginia. And if I can help the people of West Virginia with every penny I can, I'm going to do it.
ROBERTS: Certainly nothing short of a remarkable career in the Senate.
There's also other big news there in the capitol today. Elena Kagan's nomination hearing for the Supreme Court begins today. What are we expecting?
BASH: Well, it's very interesting. We have not heard a lot compared to past nominees about this issue because the White House has been trying to keep it very low key. They have benefited ironically in some ways from other big news happening. But you can bet Republicans and they're already saying that they are going to try to make the case that they believe that Elena Kagan is somebody without judicial experience, which is true, that she is not somebody who even appeared before a jury, ever, in her legal term.
And they're going to point out the fact that in the 180,000 documents that they have gotten from her time serving as a political appointee for the Clinton administration, that she has a pretty high political antenna. And what they are going to say on the Republican side is that that's not necessarily appropriate for somebody who is going to serve on the highest court in the land. And you're going to hear Democrats saying, just because she has no judicial experience does not mean she is ready to serve and pointing out the fact that she does have support from some pretty prominent conservatives as well as liberals out there in the legal community.
ROBERTS: And certainly a lack of judicial experience didn't stop William Rehnquist from playing a fairly prominent role at the Supreme Court.
BASH: Great point.
ROBERTS: Dana Bash for us this morning. Dana, thanks so much.
And coming up at 7:40 Eastern, we're going to talk with Republican Senator Jeff Sessions of Alabama. He's going to be one of those who will be grilling Elena Kagan during the Judicial Committee hearings today. CHETRY: And CNN will, of course, have live coverage of the Kagan confirmation hearings. All of it starts at noon Eastern, right here on CNN.
ROBERTS: Well, more sad news to report this morning. Supreme Court Justice Ruth Bader Ginsburg loses her husband after a long battle with cancer. Martin Ginsburg was 78 years old, known as Marty, who is a Washington lawyer and Georgetown law professor. The couple had just celebrated their 56th wedding anniversary last week. Ruth Ginsburg who joined the high court in 1993 said she succeeded in large part because of her husband's support.
CHETRY: And former Vice President Dick Cheney is expected to be out of the hospital today. He was admitted to a Washington hospital on Friday for fluid retention related to his heart disease. Cheney has a long history of heart problems and suffered his fifth heart attack in February.
ROBERTS: Well, some major developments to tell you about in the gulf oil spill. A milestone of sorts today. It's now day 70 of this disaster. We're watching another potential problem going on.
Alex, the storm moving back into the gulf. It's a tropical storm again. Right now, not on track to hit the oil leak area directly but the last-minute shift, of course, could potentially shut down the containment effort for up to two weeks.
CHETRY: And right now without the storm getting in the way, BP says it is on target to finish the relief well by mid-August. The company says it's now spending $100 million a day on the response to the spill.
ROBERTS: The Obama administration now appealing a judge's ruling that overturned a six-month ban on deepwater drilling. While the tug- of-war plays out, people's livelihoods are on the line far away from the gulf. And it turns out that BP is going to be on the hook for them, too.
CHETRY: That's right. Well, Chris Lawrence is live for us in New Orleans with more on this. You know, we talked about the idling of course of the people who work on the drilling rigs with that moratorium. And it looks like BP is going to be responsible for their livelihoods as well?
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Yes, that's right, Kiran, John. You know, just last week right here on this show, we talked about how for the first time BP was coming out saying they wanted an end to the moratorium. Now we may know why, because it looks like they are going to be responsible for a lot more claims.
(BEGIN VIDEOTAPE)
LAWRENCE (voice-over): First the oil spill itself took out the fishermen and restaurant owners. But BP set up a $20 billion fund to cover their damages. President Obama's six-month ban shut down deepwater drilling and BP set aside another $100 million to pay the workers on those oil rigs. But the truckers, loaders, caterers and cleaners that supported those shutdown rigs, they had nothing except rising anger at Washington over what the ban has done to them. Take Anthony Thibodeaux.
(on camera): How's the moratorium affecting you?
ANTHONY THIBODEAUX, TRUCK LOADER: I basically have no job. I'm normally checking in eight, 10, 12 trucks a day, loading up two boats to go offshore to an oil rig. I did none. None. No boats out.
I feel like a dead man walking. I know I'm just waiting for the ax to fall because it's got to. That company cannot survive holding on to guys like me. They can't.
LAWRENCE: Is this just affecting people who live right along the Gulf Coast of Louisiana?
THIBODEAUX: No, no. I live in Atlanta. I drive to work every week. The riggers and the crane operators and stuff like that come from Mississippi. You know? There's some from Alabama.
LAWRENCE (voice-over): This weekend we took their concerns to Ken Feinberg.
UNIDENTIFIED FEMALE: How are we supposed to feed our families, pay our bills, get to work?
KEN FEINBERG, COMPENSATION ADMINISTRATOR: I understand that you only want what you're entitled to as an unfortunate victim of this spill.
LAWRENCE: The man President Obama appointed to take charge of the claims process to see if their damages can be covered.
(on camera): Will you be handling any claims at all for people whose businesses have been affected by the moratorium?
FEINBERG: Yes. I now have discovered -- I didn't realize this until yesterday -- but the moratorium claims will fall under my jurisdiction.
LAWRENCE: That's a huge development. And we didn't know that before because a --
FEINBERG: I didn't either. I just learned yesterday that the administration and BP have agreed that the moratorium claims will fall under my jurisdiction.
(END VIDEOTAPE)
LAWRENCE: Yes, again, this is something that BP did not initially agree to, possibly under the grounds that they were responsible for the oil spill but it was the Obama administration that imposed the moratorium. This doesn't solve all the problems for these folks, but now at least they have somewhere to go, file claims, possibly recover some damages that can keep them afloat -- John, Kiran.
ROBERTS: Pretty ironic though that the guy who's in charge of administering the escrow fund didn't even know. I mean, you have to forgive people along the Gulf Coast if they're confused about all of this.
LAWRENCE: No.
ROBERTS: Pretty amazing. Chris Lawrence this morning.
LAWRENCE: Yes. Sounds like it was a deal worked out between the government and BP, you know, somewhat recently.
ROBERTS: Yes. Well, they should tell the guy in charge, don't you think? Wow.
CHETRY: You want to tell the guy who's in charge of the claims.
LAWRENCE: Yes.
ROBERTS: Thanks, Chris.
The first major storm of the hurricane season as we said, Tropical Storm Alex back out in the Gulf of Mexico. It's gaining strength fast, so what does that potentially mean for the oil spill cleanup? It is going to create waves anywhere it goes. Reynolds Wolf with an update now. He's in our hurricane headquarters this morning.
Hey, Reynolds, how are you?
REYNOLDS WOLF, AMS METEOROLOGIST: Hey, guys, doing fine. And you know, John, you're really right. The number one this is going to cause for the oil spill it's going to enhance the wave action. No question about it. But for the time being, other than that, other than waves, doesn't appear that it's going to have any direct effect on the oil cleanup, although a lot can change.
This storm we've seen it weaken a little bit over the last couple of hours. Now it's been punching out into the Bay of Campeche in the Gulf of Mexico and as it's been interacting with that warm water it has been gaining strength. But the question is where's this thing headed next?
Let's stop over here and take a look at this. This is the latest forecast from the National Hurricane Center. As we put this in motion, you're going to notice that it is expected to continue on its northwesterly trajectory. And it's not only going through that but as it interacts with that very warm water and minimal shear aloft, it's going to gain strength. At least the forecast has winds at 100 miles per hour as we get into early Wednesday. Then by Thursday winds sustained at 110 miles per hour, some gusts up to 135, possibly making landfall by midday on Thursday, South of Brownsville, Texas, and then moving into Mexico as we get into Friday and Saturday.
But keep in mind, you have to look at that cone of uncertainty and it's pretty big. It goes a long direction southward into parts of Mexico, perhaps back into Texas. A lot of uncertainty. And I'll also remind you that back in 2005 with Hurricane Charley, all models had it going in one direction but the storm just went completely away from the cone of uncertainty and pulled across the Port of Peninsula. So what I mean to tell you is there's a lot that can change between now and the next 12 to 48 hours. But at this point, looks like it's headed for the Texas-Mexico border.
That's the latest. We'll send it back to you in New York.
CHETRY: All right. Reynolds, thanks. We're going to be watching that closely for sure.
WOLF: You bet.
CHETRY: Still ahead, he confessed to murder in Peru, and then Joran van der Sloot changed his mind claiming that Peruvian police forced that confession. Well, now, a judge has ruled on that case. At least the confession part of it. We'll have much more on this case coming up.
Thirteen minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: Sixteen minutes past the hour. We're continuing to cover breaking news this morning, learning of the death of West Virginia Senator Robert Byrd. We're going to have much more on the story throughout the morning, but first, a quick check of the other stories new this morning.
A judge in Peru ruling that Joran van der Sloot's confession is valid. Van der Sloot had confessed to murdering Stephany Flores last month, then he changed his mind, saying that police forced him into that confession, but the judge rejected his claim and upheld the confession.
Van der Sloot is now facing 35 years in a Peruvian prison. He's also still a suspect in Natalee Holloway's disappearance in 2005 in Aruba, although he's never been charged in that case.
ROBERTS: The weekend G-20 summit in Toronto played out with a backdrop of protests, some of which turned violent. Police made hundreds of arrests. They used tear gas and pepper spray to disperse some of the demonstrators who smashed windows and set several police cars on fire around the city.
CHETRY: Also, it's a kind of colorful language that you sometimes hear when Vice President Joe Biden is around an open mike. He was in Milwaukee Saturday. It was a campaign stop for Senator Russ Feingold and he stopped at a custard shop, and here's what happened when Biden tried to pay for his cone.
(BEGIN VIDEO CLIP)
JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: What do we owe you? KOPPS MANAGER: Don't worry. It's on us.
BIDEN: (INAUDIBLE).
KOPPS MANAGER: Lower our taxes and we'll call it even.
BIDEN: Why don't you say something nice instead of being a smartass? (INAUDIBLE).
(END VIDEO CLIP)
CHETRY: Well, the store manager told reporters that he enjoyed the banter with Biden and he also said that Biden later whispered to him, quote, "I'm just kidding."
ROBERTS: Yes. Prince Harry falling and bouncing off on his royal kiester at a polo match in New York. Check this out. He was about to take a swing when the horse kind of put on the brakes and down he goes on his rear -- the royal rear end. But the prince toughed it up, got back in the saddle, finished the match.
He was playing to raise money for children with AIDS in Africa. He got cheers from the crowd of A-listers in the audience for the tumble and getting right back again. But, you know, when --
CHETRY: It was a pretty good fall actually. He -- he kept himself, you know, (INAUDIBLE). He held on to the last second.
ROBERTS: Yes. Always hang on to the reins.
CHETRY: Yes. He did. There you go.
ROBERTS: It's what you do.
CHETRY: Well, coming up on the Most News in the Morning, the president pledging to slash the deficit in half by 2013.
Christine Romans is "Minding Your Business". Is it doable?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: A big deficit -- a big deficit, the president says he can do. He was at the G-20 where, frankly, they're terrified of deficits and debts and what that can do to your country and what that can do to the future of your country and future generations.
So what was the balance struck between continuing growth -- I mean, this government wants to continue spending -- but also cutting spending in the long term? It's a tough balancing act. I'll tell you right after the break.
(COMMERCIAL BREAK)
ROBERTS: Twenty-one minutes after the hour.
New this morning, a rise in gas prices that actually will not make you cringe. The price for a gallon is up a nickel in the past two weeks, but a Lundberg survey finds gas is not much likely -- not likely to swing much higher than that.
Experts say the market is flat right now giving refiners few opportunities to pass on increases to customers. But, don't forget, it is hurricane season and that could change pretty quickly.
CHETRY: And it's not exactly to infinity and beyond, but "Toy Story 3" was tops at the box office again this weekend, the 3D flick earning another $59, million holding on to the number one spot.
In second place was Adam Sandler's comedy "Grown Ups", and then "Knight and Day." This was Tom Cruise's big, you know, reemergence, and Cameron Diaz as well. That came in third.
ROBERTS: Yes. Christine Romans here with us this morning, "Minding Your Business. And the G-20 summit final communique was issued yesterday with a big nod toward both deficit reduction and continuing stimulus, and you got to wonder how do you have both.
ROMANS: Right. Exactly. How do you have both? And this group saying that they can do both in the very near term. They need to keep the stimulus going, but longer term they have to look to cutting deficits.
Look, if you're a European leader, you are scared to death of debts and deficits right now. If you're in the United States, our government has been pushing a continuation of spending. So they're trying to seek this balance between growth in the U.S. and continued spending in the U.S. And in Europe, the buzzwords are austerity, cutting back, paying for what they've already spent and trying to pull back some of their public benefits.
So these are two ideas that seem to be at odds, but they've managed in the way that they do at these -- at these events to make it sound like it's all -- all compatible. It really is a balancing act. Twenty different leaders who have very significant domestic priorities. I like to think of them as on a high-wire juggling, flaming chain saws and the rest of us are down here, you know, wanting to know what the rest of the -- what the rest of the economy's going to look like in the end.
They don't want a double-dip recession. They didn't say those words anywhere, but this is what they're all in fear of, a double-dip recession.
This is what the president said about his pledge to both keep the spending going in the near term but to have an eye to fiscal responsibility later on.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Months (ph) ahead. And because a durable recovery must also include fiscal responsibility, we agree to balance the need for continued growth in the short term and fiscal sustainability in the medium term.
In the United States, I've set a goal of cutting our deficit in half by 2013.
(END VIDEO CLIP)
ROMANS: So that's a nod to the deficit hawks. And he had said this before and this government has said that they will cut the deficit in half. The projection right now, 2010, from the CBO, Congressional Budget Office, is that we will have a deficit of $1.5 trillion.
How big is that? That's a tenth of our economy. It's huge! It's huge. You want something like 3 percent. We get down to, I think 3.9 percent is what the -- what the administration's pledges we'll get to by 2014. Still too big, but an improvement. That is, of course, assuming everything goes right and you don't have a double-dip recession.
There are some people who were watching all of this, saying all of these people -- all of these people around the table, those 20 people around the table, are all hoping for a miracle of growth that's going to let them have all of these promises.
CHETRY: That's (ph) the next thing, right? That's the thing (ph).
ROMANS: Right. But it's interesting because --
ROBERTS: They're all hoping -- hoping for a miracle.
ROMANS: Well -- and, look, and behind the scenes they're pressing our friends and allies, saying the United States and Western Europe, rich countries can't drive the world's growth by -- by going into debt to buy your consumer goods.
ROBERTS: Yes.
ROMANS: So this -- we have to rebalance how -- how the economy looks going forward. We haven't really done that yet.
ROBERTS: Hope and miracle are two troubling words to hear from finance leaders, though.
Thanks.
CHETRY: Well, it was supposed to be one of those recession-proof jobs, but with stimulus dollars running out in school districts across the nation, more and more teachers are finding themselves without a job. Is there a solution? We're going to talk about it, coming up.
Twenty-five minutes past the hour.
(COMMERCIAL BREAK)
ROBERTS: Coming up now, 28 minutes after the hour. Your top stories just a couple of minutes away. But first an "A.M. Original", something that you'll see only on AMERICAN MORNING. When the economy tanked, there were a few jobs that people considered to be recession-proof. One of those jobs, teachers. But as our Mary Snow reports for us this morning, with stimulus dollars running out in school districts across the nation, thousands of teachers are finding themselves now without a class to teach.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT: At this job fair for teachers in Austin, Texas, organizers report record turnout. One thousand prospective teachers attended but this year fewer school district representatives showed up with jobs to offer.
STEPHANIE PEARSON, JOB SEEKER: I know it's hard out there, but, you know, I'm here hoping that one of these school districts will see something in me they like.
SNOW: Organizers say many districts were there to collect resumes but had no open positions. It's a problem across the country. Andrea Miller Hamilton left her job in an embattled music industry in New York to get her teaching degree.
SNOW (on camera): Did you think it was a pretty safe career choice?
ANDREA MILLER HAMILTON, JOB SEEKER: I did. At the time, two years ago, the market was great and New York City needed teachers desperately. Everyone was recruiting. So, I thought, you know, I'll go to school, two years I'll have a job in five minutes. And that's not what happened.
SNOW: So Miller-Hamilton bartends to make money until she finds that job.
MILLER HAMILTON: (INAUDIBLE) Elmo.
SNOW: She and her family even moved to New Jersey recently in hopes of better hiring prospects, but the picture is grim. Fifteen thousand teachers in New York State face layoffs, in Illinois, it's 20,000, and in California, 26,000. Nationwide, 275,000 teaching jobs are on the line according to a national group of school administrators. A big reason why -- stimulus money is gone.
UNIDENTIFIED FEMALE: Those stimulus dollars were much needed and much, much appreciated, but it was one-time money and that money is running out.
THOMAS JAMES, DEAN, COLUMBIA TEACHERS COLLEGE: I would say this is the deepest dip that we've seen since World War II.
SNOW: Thomas James is the dean of Columbia Teachers College, who says some graduates are getting jobs.
JAMES: I think they're doing better in some fields, such as special education or in math and science. Also for English and language learners, that's another field. But I'd say the broad answer would be: it's tough. It's a tough summer for teachers.
SNOW: Mary Snow, CNN, New York.
(END VIDEOTAPE)
CHETRY: Mary, thanks.
Thirty minutes past the hour right now -- time to check our top stories this morning.
And some sad news out of Washington: Senator Robert Byrd, the nation's longest serving member of Congress, has passed away. The 92- year-old West Virginia Democrat was rushed to the hospital last weekend. And, initially, they thought it was just heat exhaustion and severe dehydration. But later, doctors say other conditions developed and he was listed as serious.
Byrd was elected to the House back in 1952, became a senator in 1958, and he is the only person elected to nine full terms in the Senate.
ROBERTS: Tropical storm Alex is in the Gulf of Mexico now, expected to become a hurricane, possibly some time today. The CNN weather team is forecasting that it will likely make landfall in Mexico's eastern coast, but the storm could head up north potentially, churning up waves that could affect clean-up efforts off of Louisiana for two weeks. Up to 2.5 million gallons of crude oil are spilling into the Gulf every day.
CHETRY: And in just a few hours, the Senate Judiciary Committee begins confirmation hearings for President Obama's choice to replace Justice John Paul Stevens on the high court. Republicans are questioning Elena Kagan's thin judicial record and her politics. Democrats expect that Kagan will be confirmed.
And CNN will have live coverage of the Kagan confirmation hearings. They start at noon Eastern today.
ROBERTS: Well, it will be interesting to see just how much information the senators can get out of Elena Kagan today. Her career path to solicitor general and her academic record, while impressive, do not offer a whole lot of insight into her political leanings.
CHETRY: So, this morning, we're digging deeper into the life the Manhattan-raised, Ivy League-educated Elena Kagan.
Our Jason Carroll joins us now.
You had a chance to talk to some of her close friends.
JASON CARROLL, CNN CORRESPONDENT: Yes, just recently did last Friday, up in Washington, D.C. You know, they tell us -- everyone tells us that she's modest, she's approachable, she's extremely intelligent -- just the kind of qualifications you'd look for in a nominee.
But, first, Kagan has to get through that confirmation hearing process. She says she finds fault with that exact process, saying it doesn't really help the public learn something significant about a nominee. Her friends are hoping the process shows she is the right person for the job.
(BEGIN VIDEOTAPE)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Solicitor general and my friend, Elena Kagan.
(APPLAUSE)
CARROLL (voice-over): The announcement not entirely unexpected. Elena Kagan had been on the short list for some time. But it still came as somewhat of a shock to her friends, like Kevin Lovecchio and Josh Gottheimer.
JOSH GOTTHEIMER, KAGAN'S FRIEND: Sort of had to listen few times to make sure I heard it right.
KEVIN LOVECCHIO, KAGAN'S FRIEND: It was very surreal seeing her standing next to the president.
CARROLL: And exciting moment for CNN legal analyst Jeffrey Toobin as well.
(on camera): Do you remember what your thoughts were when you heard that the president had chosen her?
JEFFREY TOOBIN, KAGAN'S CLOSE FRIEND: Holy (EXPLETIVE DELETED) -- oh, sorry. But then I thought like a peer of mine is going to be on the Supreme Court? It's like -- and you cover the Michael Jackson case?
(LAUGHTER)
TOOBIN: You know.
CARROLL (voice-over): Toobin first met Kagan at Harvard Law School back in the '80s.
TOOBIN: My early impressions of Elena were, even at Harvard Law School, which is full of people who are smart, and who think they're very smart, she was unusually intelligent -- but also unusually well-adjusted.
CARROLL: Harvard would play an important role in Kagan's career. High points include law clerk for Justice Thurgood Marshall, domestic policy director in the Clinton White House, the first woman dean of the Harvard Law School, and solicitor general in President Obama's administration.
These two remember Kagan back when they were Harvard law students and she was the dean.
(on camera): If someone, you know, were to ask you, what's she really like? What would you say?
LOVECCHIO: I would say she has an enormous appetite for information, in all capacities.
CARROLL (voice-over): Gottheimer also worked with Kagan when she was a speechwriter in the Clinton administration.
GOTTHEIMER: She is obviously incredibly bright and always well-prepared and you better know your stuff when you see her.
CARROLL: Kagan is not without critics who question her lack of judicial experience. If confirmed, she would be the first appointee in nearly 40 years who has not been a judge.
SEN. JEFFREY SESSION (R-AL), JUDICIARY COMMITTEE: So she does have a lack in that area.
CARROLL: Senator Jeffrey Sessions is the ranking Republican on the judiciary committee. He plans to question Kagan on a number of topics during the hearing, including gun control and abortion.
But will she answer?
In 1995, Kagan criticized the process calling it a "hollow charade," saying senators should insist a nominee reveal their "views on important legal issues."
(on camera): And I'm wondering if those words are going to come back to haunt her as she herself goes through the proceedings.
SESSIONS: Well, I think so, but --
CARROLL: You think so?
SESSIONS: Well, I think they'll - they'll be raised.
CARROLL: Jeffrey Toobin has a sense of how the hearings starting today will go.
TOOBIN: I think her critique of the hearings was dead-on. I expect she will not follow her own advice and will instead follow the advice of the people in the White House which is always: say as little as possible.
(END VIDEOTAPE)
CARROLL: Well, we'll be watching today to see if Toobin was right. During Kagan's confirmation hearing for solicitor general, she was asked about her lack of judicial experience. She said then the communication skills she developed that made her an excellent teacher would also help her argue. So, maybe we'll see if she ends up using that same argument today when she's questioned.
ROBERTS: You know, the big knock on her is that even though she's not a judge, that might be fine, but she doesn't have a lot of experience as, say, a trial attorney.
CARROLL: Exactly.
ROBERTS: But, you know, when you're the dean of Harvard Law School, I mean, that's got to count for something, you would think.
CARROLL: Well, we'll see. We'll see if it counts when Sessions questions her later on today. I don't know if he's going to buy that.
ROBERTS: Yes. We'll be questioning him this morning as well, about an hour from now.
CARROLL: Yes.
ROBERTS: So, looking forward to that. Thanks, Jason.
CHETRY: Thanks, Jason.
CARROLL: You bet.
CHETRY: You know, it is the most sweeping change of the U.S. financial system since the Great Depression and Congress still has to give its seal of approval. But will the bank overhaul bill actually help you or hurt you? We're going to be talking much more about what it means and whether or not it ends some of the problems that got us to the worst financial crisis since the Great Depression.
It's 36 minutes past the hour.
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CHETRY: Welcome back to the Most News in the Morning. Thirty- nine minutes past the hour right now.
And this week could bring the most extensive remapping of banking regulation we've seen since the Great Depression. After months of uncertainty, lawmakers this week are expected to pass an overhaul of the financial system. It would affect how the markets and the government interact for decades to come. And it also was designed to protect the consumer. So does it?
Well, "Minding Your Business" this morning, our own Christine Romans and senior editor at "Bloomberg BusinessWeek," Diane Brady.
Great to talk to both of you this morning.
DIANE BRADY, SENIOR EDITOR, BLOOMBERG BUSINESSWEEK: Nice to be here.
CHETRY: So, the first question to both of you -- we talk about the biggest collapse of the financial world literally being on the brink, the oxygen being sucked out of the room when the treasury secretary was talking to the big banks.
Does this bill prevent this from happening again? Christine?
ROMANS: It would -- well, what happened to us probably could never really happen again, it was such a series of once-in-a-lifetime things. What it does is it prevents what happened, it allows the government to go in and take apart a company, yes. It does regulate some derivatives, yes. It goes farther than we've gone in 70 years.
But many people say, Kiran, that the next crisis we have will be a different crisis completely and we won't -- we won't know how to prevent that really. It gives more banking supervision which I think is important here.
BRADY: I think it does. And I think the key is that there's still a lot of assumptions in place. Financial innovation is good, right? That got us here in the first place. I think there's an assumption that big banks are OK so there's not this sense of break them up. And I think there's also a sense that markets are efficient.
So, even though we have regulation, basically, you're leaving the infrastructure in place, they're just trying to put in more cautions.
CHETRY: And it's also been a year since the Treasury Department first talked about drafting a financial regulation bill. We've obviously had a lot of changes since then. But how tough is this package on the banks?
BRADY: I think they want a lot of concessions. You know, they still are allowed to do their own trading. They don't have quite the same freedom they had before. Yes, if they fail, they'll be liquidated.
But to be honest, if a company is too-big-to-fail, no government is going to go in and cause that kind of carnage with jobs. And the other thing that has gotten people very angry is executive pay -- in essence, even though some say, that remains in place as well.
So, they have to be more conservatives, but ultimately, it's really business as usual.
CHETRY: So, what does $600 million of lobbying get the banks?
ROMANS: Well, they got them still the ability to have their own proprietary trading desks, although smaller, got them the ability to invest in hedge funds and private equity -- and to such a degree that consumer advocates say it doesn't really change anything there.
You know, the bank stocks all rallied on Friday. And a lot of people were saying, well, that's because banks breathed a sigh of relief, it wasn't as bad as it could have been. It wasn't as helpful as they had hoped and their $600 million in lobbying had hoped for. But it was better than that.
But look, there were other things consumers in there that the consumers didn't get. They didn't get -- auto loans aren't in this. You know, there's a consumer protection agency that will not cover auto loans. That's still going to be allowed to be individual dealers -- individual companies are allowed to do that.
They didn't touch Fannie and Freddie. Fannie Mae and Freddie which are wards of the state and huge problems for the American taxpayer -- they didn't touch that at all.
CHETRY: What would have been recommended? I mean, when we talk about what Fannie and Freddie do, and a lot of talk about people getting loans that they knew they couldn't pay or that they were led to believe they could pay and couldn't pay, as sort of the beginning strings of unraveling all this, how is that being tackled? Or the fact that it's being left in place, as Christine says, what does that potentially do?
BRADY: There's still this belief that the burden is on the consumers. Even though there's consumer protection, they're talking about basically this "consumer beware" sort of situation where you've got plain English, where you've got -- I'm talking about the consumer protection agency.
ROMANS: Right.
BRADY: So, I think, in essence, all of the infrastructure, and Fannie and Freddie was really sort at the beginning of this whole mess, they've just left it in place. They've left everything that people potentially wanted to break up, wanted to change, none of that has really changed. So, we, in some cases, are around the margins.
Yes, it's very ambitious bill. It's a bill that goes from everything from consumers to the banks. But, in essence, it doesn't really change that much.
ROMANS: There are no caps on your credit card interest rates either. And that's something that consumer groups have been very angry about. You know, they wanted -- in the very beginning of this, they wanted to say 36 percent interest should be the cap for payday loans, for credit card -- I mean, 36 percent interest still sounds crazy, right? That there should be caps on how much interest and interest rate that you can -- but that's not in here, there are really no caps.
BRADY: What it does, too, I think, is -- and when you look at consumers, I think that ultimately you have to recognize that bad judgment is very profitable for the banks. So by and large --
ROMANS: Our bad judgment is very profitable.
BRADY: Yes. If you're somebody who runs a credit card bill and is not paying on time, that's been very lucrative. So, the more you take that away from the banks, there's going to be more of an incentive for them to spread those fees among everybody basically. The more you force banks to keep more of a capital cushion, the more conservative they have to be, the less likely they are to lend.
So, tighter regulation can lead to, you know, tighter credit. And that's been a problem. So that's one thing people worry about.
I think the other thing that's interesting is, we're in a global banking system and the last time we had major regulation, which was Sarbanes-Oxley, there was a fear that a lot of the business would go overseas, and in fact, that did turn out to be the case somewhat. So, I think one of the criticisms of this bill is very hard to regulate what's, in essence, a global system. And that's been one of the big key points for the banking lobby.
CHETRY: You mention Sarbanes-Oxley, which is what is interesting, because the Supreme Court is going to be taking this up, right? Possibly even throwing out this bill --
BRADY: Yes.
CHETRY: -- that was designed to reform corporate America. So, we'll see how this ends. But it's interesting stuff, and thanks to both of you for breaking it down for us.
UNIDENTIFIED FEMALE: Thank you.
CHETRY: Christine Romans and Diane Brady, it was great to you.
UNIDENTIFIED FEMALE: Nice to be here.
CHETRY: John?
ROBERTS: Thanks.
Some of the ocean's predators could become prey of an environmental disaster. We're taking a trip to the Gulf waters where shark experts are tagging sharks now to find out how the BP oil spill will affect sea life for years to come.
And we're also keeping a close eye on tropical storm, Alex. Reynolds Wolf in this morning. He's going to have an update on the storm's progress right after the break.
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ROBERTS: Good morning, New York City. A shot of the Empire State Building there, along with the MetLife Building and some others, all kind of peppered in there. It's 83 degrees and sunny right now. Later on today, 90 degrees and some afternoon thunderstorms. So, be aware that there is some bad weather coming your way.
CHETRY: Oh, yes. And right now, it's sticky already this morning. 48 minutes past the hour. We get a check of this morning's weather headlines. Reynolds Wolf, you could practically chew the air today in New York. That is how thick it is.
WOLF: I know. That high humidity in New York is going to be some of the fuel that you have for potential and strong storms from the nation's capital through New York towards Boston, even into the Southern Maine you may have some big thunder storms. But in speaking of big storms when the largest on the planet happens to be this monster right here. This is Alex which was weak about 24 hours ago as it was going across the Yucatan Peninsula away from the warm waters of the Caribbean, now moving into the Bay of Campeche and then eventually into the Gulf of Mexico.
Two things ahead of this, very warm water and minimal shear. Shea is some of the strong upper level wind that can sometimes rip the systems apart. For this one, the forecast from the National Hurricane Center shows that this storm is expected to gain some strength, and we're talking about winds going up to 100 miles per hour as we get into early Wednesday morning. Let's fast-forward if we can. As we do, you're going to see this big white shaded area, that's called the cone of uncertainty. Uncertain? Absolutely.
We're talking about a rotating storm on a spinning planet. There's a lot can that happen with this storm, but we do anticipate it getting stronger, possibly with winds sustained at 110 miles an hour. Gusts will always be stronger, some of these up to 135 by 2:00 a.m. Thursday. And the way it stands right now, the path would bring it in just south of the Texas and Mexico border. As we get into, I'd say about Friday afternoon, give or take a while, but remember, these storms are nearly 1,000 miles in width. You're going to feeling the effects in many places back where the oil recovery is going to be taking place. You can expect some enhanced wave action, no question about it.
We're going to watch this thing for you very carefully. This next storm is, I mentioned, very fickle. Fickle, too, chance of storms across parts of the northeast. This area from Maine all the way southward to the nation's capital, you can expect delays in all your major airports, all of the New York, Philadelphia, even down to Reagan and even Dulles for that matter. Look for some back-ups also in Atlanta, and of course, Dallas could have some waits on the tarmac also. That's a quick snapshot of your forecast. It's going to be a busy day and busy week weather wise. Let's send it back to you in the studio in New York.
ROBERTS: Glad to have you in the Seattle (ph) today. Reynolds, thank so much.
This morning's top stories just minutes away now including breaking news this morning, Senator Robert Byrd, the longest serving member of Congress in history, has died at the age of 92. 20,774 days on Capitol Hill. We'll take a look back at his life and his legacy.
ROBERTS: Also, sea legs that never rest as teen sailor Abby Sunderland heads home from her failed around-the-world attempt. I get a lesson in sailing, the dangers and demands of solo sailing, being out there alone.
And right after the break, to catch a predator. Scientists tagging and tracking sharks. Can they sense where the oil is going? Those stories and more coming your way at the top of the hour.
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CHETRY: Welcome back. It's 54 minutes past the hour. You may not think of sharks as vulnerable animals, but of course, the Gulf oil spill could change all that. The toxic oil in the water is threatening their ability to eat and to even breathe.
ROBERTS: John Zarrella followed a group of shark scientists from the University of Miami who are tagging and tracking sharks off of the Florida coast. Will these predators show them where the spill is headed?
JOHN ZARRELLA, CNN CORRESPONDENT: John, Kiran, I'm in the Gulf of Mexico with university researchers who are capturing, tagging, and studying sharks. The research may very well lead to a better understanding of how the oil spill is affecting these creatures at the top of the food chain.
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ZARRELLA (voice-over): A six-foot shark.
UNIDENTIFIED MALE: We got a nice lemon, guys.
ZARRELLA: The researchers work quickly, taking blood and tissue samples, measurements. University of Miami researcher, Neil Hammerschlag, is studying the migratory habits of sharks in Florida waters. The oil spill has given his work a new, more urgent dimension.
NEIL HAMMERSCHLAG, UNIV. OF MIAMI RESEARCHER: There is the possibility that these animals might be able to anticipate the oil or sense the oil and actually move away from it. It's really unknown right now.
ZARRELLA: This lemon shark will provide valuable data, but when it comes to what Hammerschlag is looking for, it's well, a lemon. He's after the great sharks -- tigers, hammerheads, bulls. They travel greater distances. If his team lands one, it will be tagged with a satellite transmitter. If the shark goes near or into the oil, Hammerschlag will know it.
ZARRELLA (on-camera): One shark Hammerschlag's team tagged transmitted nearly every day for three months. But two days after the deep horizon explosion, the transmissions suddenly stopped.
ZARRELLA (voice-over): Coincidence? Perhaps. Here's what the (INAUDIBLE) the hammerhead's track looked like the days before it disappeared.
HAMMERSCHLAG: The tag could have failed or it could have headed off somewhere else into deep water and just not come up in the last few months. But that's very unlike the shark's character.
ZARRELLA: On this day at sea, the lemons keep coming. Three blacktips, too. The blood and tissue from these guys will be tested for concentrations of hydrocarbons from oil. Scientists worry sharks could easily be contaminated, even if they never swim through the oil.
HAMMERSCHLAG: You know, the fishing areas have been closed in the Gulf of Mexico because they don't want people to catch any dead fish. But, you know, I don't know if the sharks got the memo. ZARRELLA: Because it's a natural predator, a reduced shark population impacts the balance of nature.
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ZARRELLA (on-camera): There will be enough work, scientists say, for researchers to be studying the effects of oil on the sharks for decades -- John, Kiran.
ROBERTS: John Zarrella for us this morning. I wouldn't want to get near the business of the sharks like those guys. Not with that some of those chain mail gloves that there are at least.
CHETRY: The fact that they're tracking that shark and he just sort of went off the radar. I mean, it could be the worst case scenario as well. He could have perished.
ROBERTS: Could be a number of different things. They're not sure about that yet. Who knows? Maybe he'll pop up, one of these days, too.
Top stories coming your way right after the break. Stay with us.
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