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Tough Choices in Libya; License Plates for Bikes; Possible Republican Contenders for 2012; Wall Street Rally

Aired March 3, 2011 - 10:00   ET

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


CAROL COSTELLO, CNN ANCHOR: It is now 10:00 a.m. on the East Coast, 7:00 in the West. Right now we're getting details about the man accused of killing two U.S. airmen in Germany. The suspect is 21 years old. He's from Kosovo. Authorities say he is a radical Muslim who was --

Gas prices went up about four cents while you were sleeping. AAA says the average price for a gallon of regular unleaded is now $3.43. Some places have already hit the dreaded $4 a gallon mark.

And some people apparently cannot get enough of Charlie Sheen. He picked up more than one million followers on Twitter in one day.

Now, we want to turn to the deepening crisis in Libya and the latest convulsions of an embattled dictatorship. Today, Moammar Gadhafi has unleashed new air strikes on the rebel strongholds. For the second day in a row, government planes bomb the eastern town of El Brega. It's a vital hub in Libya's oil and gas production.

And that makes the port a strategic piece of real estate that both sides want to control. This, by the way, is amateur video of yesterday's fighting. Opposition forces were able to beat back Gadhafi's military. And more civilians stream towards the border to escape the increasing violence. The United Nations say with each new refugee, the scales are tipping towards disaster.

CNN's Becky Anderson will have more for you on this in just a moment.

But first, Nic Robertson, he's on the phone. And Nic, I know you are traveling to western Libya today. What are you seeing along the way?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (ON THE PHONE): We traveled the main pathway from Tripoli all the way to the border and we're just arriving at the border on the Libyan side, across from where Becky is (INAUDIBLE) that it's taken three hours or so to drive here. What we're seeing, what's interesting is we've been diverted around two towns that rebel forces claim to control or at least part of them, and the diversions were taken through areas where multiple where people in civilian clothes were at checkpoints along the highway.

We have also been through the (INAUDIBLE) town of (INAUDIBLE), it's a tourist town that's still in the government control and we saw people in the middle of that town today painting over and cleaning up anti-Gadhafi graffiti that had been sprayed in the town. (INAUDIBLE) one of the smaller towns, we often see police stations that have been burned down, anti-Gadhafi graffiti painted over. The picture that emerges here, Carol, is that the government here controls the vast majority of the territory all the way to the border with a couple of small exceptions in a couple of towns along the way, Carol.

COSTELLO: Nic Robertson reporting live from Libya. Many thanks to you.

Now, we want to turn back to the men, women and children who are trying to flee the violence and finding only uncertainty and new dangers at the border. CNN's Becky Anderson is right on the board of Libya. So Becky, what are you seeing?

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: Yes, what we are witnessing here, Carol, is a humanitarian crisis that officials tell me could become a catastrophe. Now, given the fact that at the border here it was absolute chaos about 48 hours ago, we got relative calm today and relative sort of organization. But do not be deceived. Tens of thousands of young male migrants here, you can see behind me, hungry, they are poor, and they are still a very, very long way from home.

(BEGIN VIDEOTAPE)

ANDERSON (on camera): They may have gotten some food but as you can see, very few people have any accommodation. There are 100,000 people over this border since February the 20th, got some 20,000 here and as far as the eye can see, the U.N. have sent up a tented accommodation further down the road but these guys really have got very little at this point and they are still getting, they say, some 10,000 a day coming through.

It's more of a trickle at this point in the day than it has been in the past couple of days. But this is a logistical cries which the U.N. says could become an absolute catastrophe.

Here on the Tunisian border, it's going to be said, these guys are calm. I mean, things have gotten a lot more organized. But the question is this, how do we get all of these guys home? That is what the U.N. is struggling with at the moment and that's why they need more help.

Egypt sending 20 flights a day from the airport, about two and a half hours from here, but this is going to take an awful long time and meanwhile, the hope here, of course, these guys are going to stay calm.

(END VIDEOTAPE)

ANDERSON: Yes, all right. So that's the picture. They are the lucky ones, Carol. What they tell me, though, is that they are absolutely petrified for those friends who are still on the other side of the border. 100,000 people through this border and another one down the road. That leaves more than a million, a million, migrants still in Libya, and they just say, you know, they got no idea what's going to happen to those guys in the coming days.

COSTELLO: Becky Anderson live on the Tunisian-Libyan border. Many thanks.

The spiraling crisis has the U.S., its allies and much of the world agonizing over what to do next. One possible option is establishing a no fly zone. Supporters of that idea say that could prevent Gadhafi's warplanes from slaughtering peaceful protesters, but the Pentagon says it's a decision that should not be taken lightly.

(BEGIN VIDEO CLIP)

ROBERT GATES, U.S. DEFENSE SECRETARY: But the reality is, and there's a lot of, frankly loose talk about some of these military options, and let's just call a spade a spade. A no-fly zone begins with an attack on Libya.

(END VIDEO CLIP)

COSTELLO: The White House says all options are on the table, though, and for every option, there seems to be a passionate case for and against. Here's a sampling of the debate from CNN's "In the Arena."

(BEGIN VIDEOTAPE)

ELIOT SPITZER, CNN HOST: We don't know what will come after Gadhafi. Wait a second. But what we do know is it will be better than Gadhafi.

E.D. HILL: how do we know, since these guys are in disarray, they can't figure out whose leading the provisional coalition, provisional government whatever, how do we know that when they call something a democracy, and we agree to fight for it, that it's really a democracy that we envision?

SPITZER: Well, it can't be much worse than Gadhafi. Chaos is better than Gadhafi.

HILL: It can't be much better that it deserves our money and our men and women.

UNIDENTIFIED MALE: Look, if you were to be cold and cynical about this, it's tough to see how Libya turns out well. It's never really been a country, there's a bunch of tribes unified by the Italians. They have oil wells which means it's a curse. They're not going to develop a modern economy.

On the other hand, this guy is slaughtering his people.

(END VIDEOTAPE)

COSTELLO: In just about three hours from now, President Obama is expected to face questions about Libya. He's facing the media during a joint news conference with Mexico's President Felipe Calderon. That's scheduled for 1:00 p.m. Eastern, 10:00 a.m. Pacific. We'll carry it live right here on CNN.

And this morning, we're learning more about the suspect who opened fire on a shuttle bus full of U.S. military personnel at the Frankfurt Airport in Germany. Authorities say this man is a radical Muslim who killed two U.S. airmen. His goal, according to German officials, was to kill American troops.

CNN's terrorism analyst Paul Cruickshank is here with new information. So Paul, spill it. What do you have?

PAUL CRUICKSHANK, CNN TERRORISM ANALYST: Hey, Carol. I mean, there are emerging indications that this could be the first terrorist attack on German soil inspired by Al Qaeda's ideology. I just got off the phone from a German intelligence official, they're saying that he's confessed that he was probably part of an extremist network, pro Al Qaeda network in Germany but he says that he acted alone. They did not plan this operation with the help of this extremist network in Germany, Carol.

So this seems to be a lone gunman radicalized in Germany. Germany, a country which is seeing growing radicalization in recent years. They're watching around 200 people around the clock because they're viewed as a high risk in Germany right now. Carol.

COSTELLO: We've been hearing for the past month or two that Al Qaeda has been severely weakened of late. In Germany though, is that true?

CRUICKSHANK: Well, in Germany, there's been increased radicalization, you've seen social media, on-line Jihadists site, increasing radicalization in that country which has been a different story in some other countries, but in Germany, the problem seems to be getting greater. More and more Germans have traveled to Pakistan to get training there, around 200 since 9/11. Dozens have come back to Germany. They still have links to pro Al Qaeda groups in Pakistan. So there's a lot of concern right now in Germany, Carol, about Al Qaeda being able to mount attacks or homegrown jihadists with no concrete links to Al Qaeda launching attacks.

COSTELLO: Paul Cruickshank, many thanks to you.

The Fox News Channel has to (INAUDIBLE) two of its paid contributors because they appear close to making a run for president. Former House Speaker Newt Gingrich and former Pennsylvania Senator Rick Santorum will be off the air until they let network executives know they decided not to run for president.

Several other political Republican candidates also work for Fox. A network executive says if Sarah Palin or Mike Huckabee or John Bolton indicates they are close to forming an exploratory committee, the very same action will be taken.

Some people apparently cannot get enough of Charlie Sheen. He picked up more than one million new friends on Twitter in one day.

(COMMERCIAL BREAK) COSTELLO: Charlie Sheen is getting more popular by the day. He gained more than one million followers on twitter in 24 hours. "Showbiz Tonight's" host A.J. Hammer is live with the latest on the troubled actor. Good morning.

A.J. HAMMER, "SHOWBIZ TONIGHT," HOST: Good morning. Well, there is no denying that Charlie Sheen is the newest Twitter sensation. We can now report that Charlie has just set the Guinness World Record for gaining the most Twitter followers in one day. Didn't even know that record existed but I guess it does. He just joined Twitter on Tuesday and now has more than 1.1 million followers and in one of his latest tweets, he thanked the twitter community for what he called a warm reception and he thanks all the followers who helped him get to one million followers in less than 24 hours.

And of course, more people are still signing up to get their updates on Tiger Blood and winning from Sheen. Of course, this shouldn't detract from the other parts of the train wreck going on in his life. But Sheen, himself tweeted his first concern should be his kids right now. I know a lot of people are probably "sheened out" but as you can clearly see, there is a lot of interest in what is going on with Charlie Sheen. I call it Charlie Sheen, the home game.

Well, we go on now to Christina Aguilera. She was just arrested for public drunkenness but now she has taken on a new television gig. She's joining NBC's "The Voice" as a mentor. The "American Idol" style show is going to also feature Silo Green and Maroon Five's Adam Levine. And there's supposed to be even one more celebrity mentor added to the show. The concept of the show has professional performers a la Christina mentoring a team of singers, and the teams will then compete and people vote on which team they like best. The show is set to make its premiere on April 16. It will be hosted by Carson Daily, who of course you remember from MTV.

COSTELLO: He doesn't have an alcohol problem or nothing like that?

HAMMER: No, nothing like that at all. She's always refreshing. All right. Shall we move on to Justin Bieber now. He just got a hair cut. The shorn locks of the Bieb's hair were sold for a whole lot of money. I'm talking about more than $40,000 for a couple of locks of the Bieb's hair. Yes, that cut hair was auctioned off over the course of a week. The money is going to a charity called the Gentle Barn Foundation. It's a terrific non-profit organization that helps abused farm animals as well as at risk inner city and special needs kids. So that's a good thing.

Now, the idea for all of this, the auction, it came up when Bieber visited Ellen Degeneres on her talk show. The 16-year-old star gave her a lock of hair and she suggested a fund-raiser for a charity. Now, the winning bidder, not a 14-year-old girl using her parents' credit card. No, a place called golden palace.com, which is an online casino that does a pretty good job with guerilla marketing. They made the winning bid of $40,668. And Carol, I should point out, I believe shipping was included, so really in the end, a pretty good deal with some hair. COSTELLO: Rumor has it what one of our producers for CNN's American Morning Ethyl Bass actually bid on the Bieb's hair and she was crushed -

HAMMER: Oh really?

COSTELLO: She was crushed when she was overbid.

HAMMER: She didn't want to come up with 40 grand, I guess.

COSTELLO: No, that would have broken her but she's broken in spirit now.

HAMMER: But she should rest knowing it goes to a good cause.

COSTELLO: I'm sure she does. A.J. Hammer, many thanks. Want information on everything breaking in the entertainment world? A.J. has it at tonight on "Showbiz Tonight" at 5:00 p.m. Eastern and at 11:00 p.m. Eastern on HLN.

When you play a rock concert in Libya, does someone yell out "Free Bird"? The only band who has the answer to that question is coming up. They'll share their one of a kind perspective of Libya, and you'll only hear that here.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

COSTELLO: The stock market opening bell rang just about an hour ago so let's check the numbers. The numbers are doing good. The Dow is up about 165 points. That's a good thing. Another sign the job market is slowly recovering, the Labor Department says the number of people filing for first-time jobless benefits dropped to 368,000 last week. That's down 20,000 from the week before, and the lowest in three years. That's one indication the economy is getting better but there are some less obvious signs.

CNN's Stephanie Elam is here with those less obvious signs. What are they?

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Yes, Carol, we're breaking out the magnifying glass for this one and looking at other places in the economy that might just give us an indication that things are looking a little bit better. Let's start off by taking a look at leased cars. You may not think that's the number one sign, but guess what, more people are actually leasing cars, and more small businesses are doing the same thing, and what that means is that more people are actually having jobs obviously if they're doing that and it also means that they're commuting to do that.

So what lease companies are finding is that more miles are driven on the cars that are coming back in, and the Department of Transportation says Americans drove three trillion miles last year, and that's the most since 2007, and remember the recession began in December 2007. So that's back when things were a little bit more normal.

Now If you go from there to day care, and you think what does day care have to do with this? Well, guess what, day care has been hiring more workers across the nation we're seeing this. If they're hiring more workers that means there's more demand, which mean that people can't be with their babies. They're probably going back to work and that they can afford day care. So that's another good sign there when you see day cares filling up. It means things are getting back to normal.

Now, the third sign that you can look for that shows you that may not traditionally look at are social security disability claims. Well, guess what, they're actually down, and that's a sign that people who have conditions that perhaps would not keep them out of work during good economic times, you know, mild conditions, they're now finding jobs. So in bad economic conditions they may fall back on the disability but right now things are looking better. So this is a good sign and this is something that CNN Money put together. (INAUDIBLE) did really interesting if you want to see it. You can always find it on CNN Money.com.

COSTELLO: So what's the take-away? Do we trip to the life fantastic?

ELAM: Yes, maybe not so much, but at least you can know that somewhere out there is a light, Carol. Somewhere out there there is a light. The take away being you look at unemployment rate is still at nine percent. Tomorrow we get the numbers for February. We'll get fresh numbers on that, and it's expected to tick up. So while you look at these numbers, no recovery is going to be a straight line but what you can see by these other growth spurts that are out there shows you that things are starting to get better and like you said, there may be a little bit light of a light that you can trip that would be fantastic for you.

COSTELLO: Oh, I love that. Thank you for putting that into perspective.

Listen to this, Stephanie.

ELAM: Sure.

COSTELLO: Riding a bike in New York.

ELAM: OK.

COSTELLO: Could get very costly. Lawmakers are actually considering a bill that would require bicycles to have license plates and be registered.

ELAM: Oh, come on?

COSTELLO: No, I'm not kidding. And pass inspection just like cars. How much would the plate cost, you say, you ask? Well, it would cost bike owners 25 bucks initially and then five bucks a year for renewal fees. Some New Yorkers are saying what you did, Stephanie, this has got to be a joke.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't think it's right. I think it's wrong. It's bad enough we got to pay almost $4 for a gallon of gas.

UNIDENTIFIED FEMALE: For a bike?

UNIDENTIFIED MALE: If I'm riding a bike and it's not registered, I get pulled over? Hey, you got registration.

UNIDENTIFIED MALE: That's a possibility.

UNIDENTIFIED MALE: That's not cool.

(END VIDEOTAPE)

COSTELLO: Well, what about kids? Do you make kindergartners on their training wheels.

ELAM: $25 for a little bike that's out there, and Officer Crumbkie (ph) going to come along and saying, "hey, where is your registration for that?" It just sound ridiculous. And is this like New York state or New York City? New York City, I understand it's got issues with like space but I think it's already a liability enough to ride in a bike lane next to a bus. You saw how close they come together in New York City. That's scary enough. That's already a fee that you're paying.

COSTELLO: You save more than $25 bucks, you pay with your life sometimes. No this would generate like -

ELAM: Seriously, but the rest of the state, come on.

COSTELLO: It's the state, New York state, it would generate something like - let me check, nearly $2 million for the state, and 375,000 in fees every year.

ELAM: Most of the state is more rural. They have more space. To do this to them would just be craziness. It doesn't sound like the whole state is going to go for but we'll see what happens. Crazier things have been done, right?

COSTELLO: Right. Especially in New York state.

ELAM: That's true.

COSTELLO: Stephanie Elam, live from New York. Thank you.

Let's take a look at some stories we're watching for later today. At 1:00 p.m. Eastern, a giant set of Olympic rings will be unveiled at St. Pancras International Train Station in London. Rings celebrating the 2012 summer games will also be placed on the Tower Bridge and the London Eye ferris wheel.

At 4:00 p.m. Eastern, the Navy will announce the results of its investigation into those racy videos shown aboard the U.S.S. Enterprise. The ship's commander Capt. Owen Honors was removed because of the controversy in January.

And at 12:30 p.m. Eastern, Senators John McCain and Joe Lieberman will talk about the revolution in the Middle East and their recent trip to the region. That session will take place at the Brookings Institution.

In 2005, rock and roll band "The Heavenly States" embarked on an unheard of week-long tour of Libya.

(MUSIC PLAYING)

COSTELLO: And for many there, it was likely the first time they heard this kind of music. For the band, it was the first time they'd ever had a gig like this. Ted Nesseth and Genevieve Gagon are two thirds of the band and thanks for joining us today. We appreciate it.

TED NESSETH, "THE HEAVENLY STATES": Thank you.

COSTELLO: I mean, this is fascinating.

NESSETH: For having us.

COSTELLO: You (INAUDIBLE) a 30-year ban in Libya was lifted, and you performed there. So how did Libyans react to your music?

NESSETH: Gen?

GENEVIEVE GAGON, "THE HEAVENLY STATES": Well, once we actually got to play the music, it was a party for all, but the trick was getting to that point. It almost didn't happen.

COSTELLO: So what happened?

NESSETH: Yes, I think that - go ahead.

COSTELLO: I was just wondering. You said once you got to play. Who was preventing you from playing the music?

NESSETH: Well, there was a whole series of events that happened when we got to Tripoli. We went out and our drummer bought a drum, and we ended up in a situation where he was being coerced by a bunch of local people in the suke to play the drum, and so he strapped on the drum and started playing and in like 30 seconds there was an impromptu drum circle happens, and there were people bringing out tambourines and singing and playing with us. It was like this really, really random totally inspired musical moment.

COSTELLO: That sounds terrific, actually.

NESSETH: But I think that kind of caused some of the security around us to feel threatened by that, and so they actually cancelled one of the shows we were supposed to play at this restaurant, and it was at that moment that we kind of realized that we were being a little too cavalier about going to this place where we thought like, you know - we had a very American view of we're just going to go there and we're going to do what we want to do, and it was at that moment that we realized that - I don't know how else to saying it, but we started "s'ing " our pants.

COSTELLO: We get the picture.

(CROSSTALK)

COSTELLO: It would be frightening because you don't know what's going to happen. But Gen, the Libyan people embraced you, so as you watch what's happening in Libya right now, what goes through your mind?

GARGON: Oh, I'm terrified. It's heartbreaking. I'm cautiously optimistic. It's going to be a long, long road. We are really worried about the people that we met there. And we tried to get in contact with a couple of them through e-mail, and they haven't responded, so we're sending out messages of concern and hoping for the best. But, yes, it's really incredibly complex situation there.

COSTELLO: It certainly is. Thank you both for joining us. We really appreciate it. Ted Nesseth and Genevieve Gagon, many thanks to you.

NESSETH: Really, just so you know that we have had difficulty hearing you because they had to reamplify these earpieces because hearing loss is real, if you're in a band. Apparently, we just learned that.

COSTELLO: Being in a rock band does have adverse effects on your hearing. But thank you so much for joining us.

NESSETH: It can. Thank you.

COSTELLO: Thank you so much.

When President Obama meets with Mexico's President Felipe Calderon today, a big topic of conversation will be the drug war. We'll show you some of the astounding numbers related to the cost of that war just ahead.

(COMMERCIAL BREAK)

COSTELLO: Today, President Obama and Mexican president Calderon meet at the White House. A hot topic today, no question, will be the drug war and its effect escalating violence.

Here's some of the troubling numbers. In just four years, more than 34,000 were killed in Mexico because of the drug war. Within 100 miles of the border, there are thousands of U.S. gun dealers. Nearly all the weapons taken out of the hands of criminals there come from the United States. And fueling the war, Americans snort, eat, smoke and inject $60 billion worth of drugs every year. $40 billion go back to Mexico.

Ed Henry, you have seen those numbers. Is there anything these two men can say to each other today that will take care of those huge problems?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, I doubt any of the talk today, Carol, that we'll hear from these two leers will change the problem because it is so ingrained and such a desperate problem. But maybe some cooperation across the borders can put a dent in it.

You'll remember, there was this special agent Zapata who was just killed in mid-February, and President Obama reached out. As a U.S. agent, an immigration enforcement agent, who was killed across the border in Mexico. And President Obama called President Calderon after Mexican authorities helped bring the killers to justice. So, that was potentially a step forward that at least the Mexican government was cooperating in helping the U.S. bring those killers to justice, but that's obviously a drop in the bucket. As you lay out the problem, it's much more desperate and a much more complex problem.

So, they are going to try to chip away at that today, if you will. And let's not forget immigration reform as well. The last time President Calderon was here at the White House, hey were in the Rose Garden together, these two leaders. And President Obama used that occasion to talk about and criticize the Arizona state law cracking down on illegal immigration that became such a sore point in the United States. The controversy has sort of died down, but the very difficult issue of immigration reform still remains.

When you talk to White House officials, they say President Obama is still hopeful of getting some sort of a comprehensive immigration reform in place. But as you know, given the big budget problems on Capitol Hill, all the other issues they're dealing with right now, immigration reform is not at the top of the list. Seems like a long shot that he'll be able to get that done heading into the 2012 elections.

And then finally, Libya is bound to come up because these two leaders after their private talks are going to come out for a joint news conference at 1:00 p.m. Eastern time. And you can guarantee the White House press corps is going to want to ask this president about Libya. It's a subject he has not gotten any questions about. He has spoken very limited on the crisis on Libya, on a very limited basis. And you can bet reporters are going to be pressing him on that subject.

COSTELLO: Oh, yes, you are right about that! Ed Henry, live from the White House. Many thanks.

It is half past the hour now. Time to check some of our top stories. In the second straight day of military strikes in Libya, Moammar Gadhafi's war planes are targeting two rebel strongholds in the eastern part of the country. The international criminal court says it's looking into possible crimes against civilians.

The U.S. soldier at the center of the Wikileaks scandal is facing new charges today. The Army has filed 22 new counts against Private First Class Bradley Manning. He's accused of downloading secret information and handing it over to the whistle-blower Web site. The budget debate in Wisconsin may get expensive for absentee Democrats. Republicans have voted to fine the missing lawmakers $100 for each day they are away from the capital. Fourteen Democrats left the state to prevent a vote on curtailing the collective bargaining rights of public employees.

Democrats in Washington have been asking the White House to step in and help out if they battle Republicans over spending. Looks like this will happen in just a few hours. Let's go to Dana Bash in Washington. Dana, what about that?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, Democratic and Republican sources tell me that there will be a meeting this afternoon at 4:00 Eastern here in the Capitol in the vice president's office in the Senate. That is right, the vice president's office because he is going to be the one who is going to lead this very first meeting of an incredibly important issue. And that is, trying to at least begin to get the two sides to come together on differences, major differences, over spending cuts. So, we are going to see the vice president. We understand the chief of staff at the White House and also the budget director as well as the top house Republican, Senate Republican and Democrats as well, on both sides of the Capitol.

Unclear how far they will get. There is a huge gulf between them, Carol. House Republicans, of course, last month passed a spending bill with $61 billion in cuts. And Republicans have said, you know what, we can negotiate but we're not sure exactly where Democrats stand because there are differences between them. And, important to note, the Senate has not passed a spending bill to fund the government for the rest of the year. And that's what Mitch McConnell was talking about when he went to the Senate floor to talk about this upcoming meeting a short while ago.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: But putting a meeting on the schedule doesn't change the fact that neither the White House or a single Democrat in Congress has proposed a plan that would allow the government to remain open and respond to the voters by reining in spending. All we get is talk.

(END VIDEO CLIP)

BASH: Needless to say spending and cuts spending is dominating Washington and domestic politics, dominating Congress. This is going to be the very first time we will see a high-level meeting, at least to begin conversations to bridge the differences between the two sides on this. Very, very big differences on how to cut spending and more importantly, what to cut in their efforts to do that.

COSTELLO: Dana Bash, many thanks. Live in Washington today.

The NFL on the brink of a lockout or a deal or an extension of talks? We'll tell you the big issues on the table as that midnight deadline looms. (COMMERCIAL BREAK)

COSTELLO: Time now to travel "Cross Country" for news from our affiliates. A more extensive search is planned this morning in Palm Beach County, Florida, after remains of two children were found in a canal. Police say they first recovered the body of a girl believed to be between the ages of 6 and 10. Her body was found in a duffel bag. And later they found the body of an older boy stuffed in a suitcase.

Teachers in Springfield, Massachusetts, are negotiating with the school system as to how to pay back more than $1 million they have been overpaid this year. The superintendent says the accounting error involves more than 1,400 teachers.

In Carlisle, Illinois, a town paying tribute to the fighting men and women who call Carlisle home. They're doing it with signs, like you see here. They also honor soldiers who made the ultimate sacrifice to their country whether they're from Carlisle or not.

The clock is ticking down to a possible NFL lockout. Here's where we stand right now on a new contract between the owners and players. The collective bargaining agreement expires at midnight Eastern time. Talks are scheduled to go on today, and the owners could decide to extend the current CBA to give negotiators more time.

The three main issues on the table: the owners want a bigger piece of the NFL revenue pie, $1 billion more. $1 billion they want to go with another billion they already get. The owners also want an extra two regular season games a year. And they want to set a rookie wage scale. Earlier on CNN's "AMERICAN MORNING," sports attorney Richard Roth spoke about the talks with our Ali Velshi.

(BEGIN VIDEO CLIP)

VELSHI: Where are we now? I know there've been a flurry of meetings. They're meeting with these federal negotiators. I assume today is a very busy day that everybody is working, trying to work toward a settlement as opposed to a lockout?

RICHARD ROTH, SPORTS ATTORNEY: That's correct. It's really a high-stakes economic chess game. And you have two things going on. On one hand, in Washington, D.C., you have the mediator sitting down with the players' association and with the NFL, trying to work it out by before the clock strikes 12:00 tonight. On the other hand, you have, if you will, huddling. The owners in their own room as well as the players in their own room trying to figure out if the mediation is not successful, what's the next move? And they have a couple options.

VELSHI: OK. Tell me about those.

ROTH: OK. The NFL can lock out the players.

VELSHI: Right.

ROTH: And that is a very strong - a very draconian measure but they can actually lock out the players. VELSHI: It's a very strong bargaining position. It's also very risky in terms of the money they make and the fans they can alienate.

ROTH: Very risky. That's why I say it's high stakes.

VELSHI: Yes.

ROTH: Because the players as well can either strike, which they've announced they won't do, or they can decertify the union, which they very, very -

(CROSSTALK)

(END VIDEO CLIP)

COSTELLO: Is your head about to blow? As for a prediction, Roth believes the federal mediator will push back tonight's deadline for one week and he says a deal will be made, and the NFL season saved. We'll see.

The GOP race for the White House coming a little bit more into focus today. Just ahead, we'll tell you how a former House speaker, a former senator and a former governor fit into the picture.

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COSTELLO: State workers in Ohio won't be able to strike or negotiate their health benefits if a bill there becomes law. It's squeaked through the state Senate by just one vote. The house takes it up one week from today, and, of course, as you know, the governor supports it. Democrats and other opponents say the bill is a union buster. Same arguments we're hearing out of Wisconsin. Republicans and other bill supporters say they unions have too much influence.

And today in New Jersey's capital, up to 10,000 firefighters, police officers, and emergency workers could show up to protest job cuts and changes to their benefits. The cities of Patterson and Camden, New Jersey, have let hundreds of cops and firefighters go because of budget problems. Protesters say that puts the public safety at risk. Since Camden's layoffs in January, reported gun crimes are up 259 percent compared to 2010. Overall violent crime is up 19 percent, and burglaries are up 60 percent.

New today in the 2012 White House race, Newt Gingrich, the former House speaker, will likely announce he is entering the exploratory phase of a presidential campaign. Our deputy political director Paul Steinhauser has been looking Gingrich's poll numbers. And are they good?

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: They're okay. Carol, listen. Gingrich is a known commodity to Republicans, to all Americans. He's been around a long time. It'll be interesting whether his controversies in the 1990s will weigh in on Republican voters now, years later.

Check this out. This is from NBC/Wall Street Journal, a brand- new poll. They put it out last night. The battle for the Republican nomination, a hypothetical horse race. There's Newt Gingrich, check him out right there, in the low teens, 13 percent. That's kind of where he has been, Carol, in most poll numbers. He's in double digits but below Huckabee and Romney. Palin seems to be fading a little bit, at least in this poll, Carol.

COSTELLO: Interesting that Mike Huckabee is doing so well. I guess Mike Huckabee is doing very well in the South, as is Newt Gingrich.

STEINHAUSER: He is doing very well in the South. Huckabee, they all remember him from the last time around, his bid last time. A big question mark, will he run again, Carol?

COSTELLO: And he's not the only one making an announcement today, either, right?

STEINHAUSER: No, Gingrich is definitely not the only one today. There's a guy called Buddy Roemer. Used to be the governor of Louisiana. He's a Democrat turned Republican. And today, 2:30 Eastern, in Baton Rouge, Louisiana, he will announce he's setting up a exploratory committee. A first step, of course, toward maybe running for the White House.

Roemer's considered a long shot. He talked to Peter Hamby yesterday, Carol, and said issues the mounting national debt and tax code are one of the reasons he's jumping in. Carol?

COSTELLO: Got you. What about Rick Santorum? I mean, like Newt Gingrich, he was also dropped from Fox News. Will that speed up his jumping into the case?

STEINHAUSER: He tells our John King no. After Fox dropped him yesterday, he did his first interview, where? Right here on CNN, "JKUSA." And told John King it will not change his decision. He will make it later this summer. But, Carol, next week, he's a frequent flier, you could say. He's going to Iowa, South Carolina, New Hampshire. All three very important states. All within five days. Carol.

COSTELLO: OK, let's talk about Senate Democrats because another one is retiring. How does that affect the next battle for the Senate?

STEINHAUSER: Republicans excited about this. Daniel Akaka, he's been in the Senate for 20 years out in Hawaii. He announced yesterday he will not run for re-election next year. Republicans think, well, they only got to win three or four seats. They have a former governor out there on the Republican side who's popular. They think this helps them.

Democrats say, Carol, you know what? This is Hawaii, a state where Democrats dominate. Remember, Barack Obama, a man who's known and well-loved in Hawaii, he will be at the top of the ticket next year. They're confident they can keep the seat in Democratic hands.

COSTELLO: Wait, Barack Obama was born in Hawaii? (LAUGHTER)

STEINHAUSER: Don't go there with me, please, please!

COSTELLO: Just a joke! Thank you, Paul!

We'll have your next political update in one hour. And a reminder, for all the latest political news, go to our Web site, CNNpolitics.com.

House speaker John Boehner told the National Religious Broadcasters Convention he and other Republicans are working on a bill that ensures the fairness doctrine will not be revived, ever. Boehner says it's important because the fairness doctrine silences ideas and voices. The controversy over the fairness doctrin, or as some like to call it, localism, boiled over a few years ago as progressives fought for what they call a fighting chance to have their voices heard.

(BEGIN VIDEOTAPE)

RANDI RHODES, RADIO TALK SHOW HOST: You know, the right wing is going crazy.

COSTELLO: Randi Rhodes is a progressive political talker.

RANDI RHODES, PROGRESSIVE POLITICAL TALKER: They're literally at war with a feeling, not a tactic, a feeling. COSTELLO: On the air in Washington, D.C., where 93 percent of voters voted Obama. Yet the majority of political talk on a.m. radio is conservative.

The president is presiding over economic failure.

They just don't want to fight.

He owned that crowd.

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

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

RUSH LIMBAUGH: Giant economic rebound.

COSTELLO: And Sean Hannity.

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

COSTELLO: Talkers Rhodes says do not reflect D.C. RHODES: Diversity always gets a better result than just this one, steady, you know, lockstep repetition of talking, same talking points over and over.

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

BOB DURGIN, CONSERVATIVE TALKER: Men and women are dying over there --

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

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

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

UNIDENTIFIED MALE: Tonight's worst persons in the world.

COSTELLO: But on commercial TV, and in Hollywood.

Camille Paglia, a social critic and Obama supporter.

CAMILLE PAGLIA, THE UNIVERSITY OF THE ARTS: I find the motivation for all this talk of the local show is actually covert, a way to ambush right wing radio, which is indeed risen up as a powerful force in response to the shutdown of conservative viewpoints coming from the major media.

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

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

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COSTELLO: Localism or the fairness doctrine was killed more than 20 years ago. Both President Obama and the FCC chairman have expressed no interest in reviving it, but if Speaker Boehner gets his way, it will never be revived.

Coming up next, we'll show you a puppy that defied death. He was put to sleep, put in the trash, and then he came back alive.

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COSTELLO: I'm telling you, the markets are going crazy. So, what is going on? The woman who knows is Alison Kosik. Alison, why the rally?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes. It's a nice change of pace, right, Carol. Getting good signs of improvement.

For one, let's talk about jobs. We've got a really positive jobs report on weekly unemployment claims. They unexpectedly fell by 20,000 to 368,000. You know, we've been stuck at that 400,000 level for at least two years. Now, it looks like we are moving to the next threshold, to that 350,000 level. And if it can hold steady, it would show we are seeing fewer layoffs over time.

But the big question is are we going to see any hiring? Just want to show you, though. It's a big comparison from last year this time. We are down 100,000. Last year, those claims were up as much as 466,000. We are moving in the right direction.

And this is really bringing anticipation about tomorrow when we get the big government jobs report. It is expected we are going to see that 200,000 jobs were added to the economy. That's also why we're seeing the markets up strongly today. Carol?

COSTELLO: That's terrific news. Alison Kosik, many thanks.

Topping our "Daily Dose" this morning, you may find more bare shelves at your local pharmacy today after the FDA ordered more than 500 medicines for coughs, colds and allergies of the market, citing possible safety concerns. The issue? Many have not been evaluated by the agency. The FDA is giving companies making or selling unapproved products 90 days to stop manufacturing them and 180 days to stop shipping. Companies that have not listed their unapproved products with the FDA must remove them from the market, as in right now.

Tennis sensation Serena Williams is thanking her fans and well wishers after undergoing surgery Monday to remove a blood clot from her lung. The 29-year-old star hasn't played since last July, when she won her fourth title at Wimbledon. In a statement, Williams says she hopes to be back to playing tennis by early summer.

Nine military veterans in Ohio have tested positive for hepatitis. The vets all had dental work done at the Dayton VA medical center. A dentist there admitted he didn't wash his hands or change his gloves between patients. Ugh! Those kinds of unsanitary practices went on for 18 years. 375 veterans have been tested for hepatitis and HIV.

Yesterday, we told you about a Times Square billboard put up by the FBI to catch a serial rapist. We also mistakenly showed a picture of Juan Carlos Amaya. Amaya is not being sought in connection with the serial rape story. Amaya was arrested and charged for the rape of a 12-year-old. Amaya has pleaded not guilty. We apologize for the error. We'll be back after a break.

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COSTELLO: It just wasn't Wally's time. If there's such a thing as a miracle puppy, he is it. The little guy and several other sick puppies were put to sleep at a shelter in Oklahoma. They were pronounced dead and they put in trash. The next morning, a worker looked in the Dumpster, and there's is Wally looking right back at him! Apparently, the puppy was just put to sleep, literally.

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UNIDENTIFIED MALE: You might say he's an angel dog.

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COSTELLO: I'd say he's an amazing dog. Wally is doing pretty good, and people from all over the country, as you might expect, are offering him a home.

He doesn't look sick to me. Why did they do that in the first place?

SUZANNE MALVEAUX, CNN ANCHOR: I don't know. So glad to see him back though. Huh, Carol?

COSTELLO: Yes. Wally pulled through. It gives you hope, doesn't it?

MALVEAUX: Do you want a dog? Do you want a dog?

COSTELLO: I know. I would like to adopt Wally.

MALVEAUX: OK. Put your bid in. A lot of people want Wally now.

Thanks, Carol.

COSTELLO: Sure.

MALVEAUX: We'll see you.