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American Morning
How to Drive Down Gas Prices?; Budget Battle Over Big Ticket Items; Winning...; Airline Fares On the Rise; Discovery Heading Home; Memphis Gets its Groove Back
Aired March 07, 2011 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Well, late winter storm is hitting the eastern third of the country hard -- heavy snow, rain and flooding. Cities and towns under water on this AMERICAN MORNING.
(MUSIC PLAYING)
CHETRY: Good morning to you. It is Monday, March 7th.
That was interesting to say "late winter storm" because Rob says it's technically the beginning of meteorological spring. It certainly doesn't feel like that.
T.J. HOLMES, CNN ANCHOR: We had it official. It's still winter, that whole thing. Rob will be along here in just a second.
But hello to you. I'm T.J. Holmes, alongside Kiran Chetry.
Yes, winter is not done just yet. Evidence: let me present it to you now. New video of a nasty snowstorm in Minnesota. You see this here?
Unfortunately, cars overturned in some places on the interstate, the driving conditions are just horrid. So, some people not putting away the shovels just yet. Rob Marciano is up next to confirm for us in fact.
Let's not even start with the winter thing. Tell us what's going on right now, Rob.
ROB MARCIANO, AMS METEOROLOGIST: We've got rain. And flooding is an issue as well across parts of the Northeast. The problem with March is it's a month of extremes. The minute it starts to feel like spring, you get slammed back in the winter. And often, the March storm will have a little bit of both depending on where you live.
And today and yesterday and last night, we saw quite a bit of rainfall and gusty winds across the I-95 corridor. A little bit further to the north it's all in the form of snow. But we do have flooding across parts of the Hudson Valley and in through parts of Connecticut.
In some areas, we're seeing a fair amount of rainfall. Windsor Locks, just north of Hartford, over three inches of rain. Orange, Massachusetts, over three inches as well. And Hartford, Connecticut proper, 2.3 inches. So, decent amount of rain and a fairly short amount of time. On top of, still, a snow pack trying that's work its way through.
Pretty much north of the Pennsylvania-New York border, that's where you still have a snow pack. And by the way, it was added to over the past day and a half. Some areas are seeing 20 inches of snow with this system across parts of Upstate New York.
It will dry out a little bit today. It will be gusty. But we have another system, a couple of systems that's going to gather strength and head across the Central Plains and eventually into the Northeast.
So, it's going to be another stormy week, pretty much similar to what we saw over the weekend, the form of severe weather to the south, flooding rains across parts of midsection, and just to the north, we're going to see snow with this next system as well. But we'll try to get through today first, still a bit of a blustery and at times wet and cold day across the Northeast today.
T.J., Kiran, back up to you.
HOLMES: All right. Rob, we appreciate you as always. Talk to you again here shortly.
MARCIANO: Sounds good.
CHETRY: Gas prices on the rise. In fact, up 34 cents in just two weeks, according to AAA. The price for a gallon of regular is now $3.51 on average across the country.
President Obama is certainly feeling some of the pressure to do something about the spike in gas prices. But realistically what can he do?
Our Christine Romans joins us.
Some of the calls to lift more restrictions on drilling, to perhaps tap into our strategic oil reserves. I mean, how likely or helpful are these scenarios?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Timothy Geithner last week, the treasury secretary, he said if things got really disruptive for the global economy and economic recovery, they would consider it.
And Bill Daley, the president's new chief of staff, on Sunday said it's an option -- an option that's already -- always on the table.
What is the Strategic Petroleum Reserve? And how likely is it that they could tap it? Well, at 727 million barrels of crude oil in underground salt caverns along the Gulf Coast, we have reserve -- tapped this reserve twice: once during the First Gulf War and once during a couple of hurricanes in 2008.
Just talking about the option to stop rising gas prices by tapping this is a way the administration can try to tamp down oil prices and tamp down gas prices.
There are other options as well that are equally considered long shots. One of them maybe rolling back some of the gas tax -- that would put money back in your pocket.
Maybe government price controls, tried in the '70s, very unlikely especially in an economy where you have all these people crying about getting the government out of your life. And people also are crying about getting the government into the gas games so that it can lower gas prices.
Where does our gas come from? This is always a reminder when we see gas and oil prices moving higher? And again, they're up above $106 for a barrel of crude. Fifty-one percent of America's oil is imported. Forty-nine percent of it we make.
Well, where do we import it from? Well, the western hemisphere is more than half of what we import. That's like Venezuela, Canada, Mexico. Africa is 22 percent of what we import. That's like Libya, Nigeria, Algeria. Persian Gulf oil, this is the center of global oil production, 17 percent.
When you look at the scenario here, that the world is basically consuming every drop of oil that is produced every day, when you have in Libya, for example, a million barrels per day of Libyan crude off the market, that's why oil prices move higher. Also, the economy has been recovering. When the economy recovers, the world uses more oil to drive cars, to use its factories, to fire up its factories and the like, that's why oil prices move higher as well.
So, in terms of $4 gas, that's everyone is so concerned about. You will need to see, according to an analyst at Deutsch Bank, $125 crude to get $4 oil -- $4 gas. Sorry, there you go.
HOLMES: And we close, what was it?
ROMANS: One hundred six on Friday.
CHETRY: It's inching up, inching up.
ROMANS: Yes, it's hard.
CHETRY: It's just a vast swing. I mean, was it six months ago that you were talking about $40, $45 a barrel of oil?
ROMANS: And, you know, it wasn't very long ago when I was (INAUDIBLE) $12 per barrel crude, you know? I mean, it has been a vast -- some people say that this is what the new normal. This -- when you got big, fast-moving countries like China and like Brazil and like other countries, India, that are eating up so much of the world's resources, and the United States -- I mean, we're still the biggest consumer of oil -- makes it tough.
HOLMES: All right. Christine, we appreciate you, as always.
ROMANS: Sure.
HOLMES: Folks, we have another open mic situation. And this was a joke that was overheard about Libya. But it was between the Defense Secretary Robert Gates and the man in charge of the forces, U.S. NATO forces in Afghanistan. Now, you see here, Defense Secretary Gates, he arrived early this morning. He was greeted by David Petraeus, the top commander.
And, again, we have seen this time and time again. But I want you to listen now at the joke that was caught between the two men.
(VIDEO CLIP PLAYS)
HOLMES: You couldn't make that out. I will tell you what he did say. They made a little joke between the two. You heard Petraeus saying to Secretary Gates, "Hey, you got a bigger plane than normal." And then he jokes, "What are you going to be launching some attacks in Libya or something?" Now, we're not getting much of a comment. Again, a private moment, if you will.
Somebody scratched their heads about a joke like that at this time. But, still, just a little something caught between the two men. Of course, Secretary Gates to meet with U.S. troops and also meet with Hamid Karzai, the president there in Afghanistan.
Meanwhile, we're seeing these crowds in New York Times Square having a protest, where they're protesting congressional hearings coming up little this week on terrorism and the Muslim community. Some saying this is Islam on trial.
CHETRY: Also ahead, the government is up and running for now at least. Less than two weeks left, though, to agree on a spending plan for this year. Some of the top political minds debate how to solve the budget crisis. Next.
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HOLMES: Ten minutes past the hour on this AMERICAN MORNING.
We are seeing protests over hearings on radical Islam. You're seeing the protest took place here in New York, in Times Square. Critics are saying these hearings scheduled for this week would be -- essentially putting Islam on trial.
Congressman Peter King of New York telling our "STATE OF THE UNION" that American-Muslims are becoming more radical and identifying with terrorist. We heard from both sides of this argument a little earlier.
(BEGIN VIDEO CLIPS)
EBOO PATEL, PRESIDENT, INTERFAITH YOUTH CARE: We want to be united with our fellow Americans to make sure that this country is safe and secure for our children and your children. And I think Peter King, the way he's framing these hearings, is not asking us to be united. He's actually dividing us by religion.
DR. ZUHDI JASSER, TESTIFYING AT MUSLIM RADICALIZATION HEARING: This is an opportunity for American-Muslims to show we want to lead the fight to stop the radicalization. We failed as a country in defeating radical Islamists and we failed to find solutions. And it's time to have some hearings about this.
(END VIDEO CLIPS)
HOLMES: And Dr. Jasser you heard from just there, he will be testifying at those hearings, which are set for Thursday. The White House, meanwhile, already working to reassure the Muslim community that this is not an attack on them -- Kiran.
CHETRY: Thanks so much.
Well, bruising battle underway in Washington over cuts to what is really just a sliver of the government's budget. It's because no one wants to touch the big-ticket items. We've talked about them a lot.
But, again, a reminder -- Medicare, Medicaid and Social Security, by 2020, will make up about 92 cents of almost every dollar spent. And there are programs that the president's own deficit commission has said need to be addressed. Of course, adding on the interest on our debt as well, there you see in the middle.
The two chairman of that commission are with us this morning: Alan Simpson, former Republican senator from Wyoming, and Erskine Bowles, former White House chief of staff under President Clinton.
Great to see you both.
ALAN SIMPSON, CO-CHAIR, COMM. ON FISCAL RESPONSIBILITY AND REFORM: Thank you.
ERSKINE BOWLES, CO-CHAIR, COMM. ON FISCAL RESPONSIBILITY AND REFORM: Thank you.
CHETRY: I know you have been traveling around the country after presenting this and trying to sort of make the case. It's interesting. The lawmakers can't even agree on the current 2011 budget and in some ways, they can barely agree on how to proceed for two weeks.
How do you expect them to tackle something as big and potentially as politically difficult as something like tackling our deficit?
Let me start with you, Senator Simpson.
SIMPSON: Well, I'll tell you, Erskine and I, have -- this is a marvelous colleague to work with. This is a splendid man. And, at one point, we just decided we'd do a two-man report, if nobody else went along. That didn't happen and we have 60 percent of the group vote.
But I'll tell what I tell people. It's very simple -- forget the charts. Those are important.
If you spend more than you earn, you lose your butt. But the real one is, and everybody at their kitchen table is always talking about, a couple of the kitchen table, where it is -- for every buck we spend, we borrow 40 cents. If that isn't stupid, that's -- you got a country that is stupid, a government that is stupid to borrow 40 cents, not from your good old Uncle Henry, but from the world.
And, you know, they hear that. And we've got to get pumping that out. We got people who are helping us (ph).
CHETRY: Aren't there big differences, though, between our personal budgets, unfortunately, and what we expect from the federal government in terms of services and in terms o help to the point where it's nearly impossible for the federal government to operate by that same standard sitting at home and saying, we have to balance our budget?
BOWLES: Actually, I don't think so. I mean, every business, every university, every state, every individual, every municipality has stepped up to this big problem. The problem we have today is neither the administration nor Congress is really talking about solving this problem.
The administration is talking about cuts of $10.5 billion, you know? The House Republicans are talking about $61 billion. That's out of a $3.7 trillion budget. That's a 1.6 percent cut. I mean, that won't get us to the Promised Land.
As Al says, we've got to get serious. We have to talk about the entitlements -- Medicare, Medicaid, Social Security. We got to talk about the defense budget and we have to talk about the spending that's in the tax code. These tax earmarks called tax expenditures.
CHETRY: And you guys did put forth an interesting blueprint I guess you could call it. And there is a bipartisan group of six senators working on this debt commission bill trying to figure out ways to implement your ideas. And some of them, like when you say something like, OK, we have to change Social Security, current people who are retiring or relying on that get nervous. But you guys are talking about, what, to 2075 upping the retirement age and some things that will make a difference but aren't going to be -- the pain isn't going to be felt right now. Is that correct?
SIMPSON: Oh, yes, the word cut is not fair and is not true. And the word privatization is not true, which is a lie. When you have the energy of people who don't want to us to do anything and hope we fail, and one group, I'll name, is the AARP. They keep telling us they have two modest changes to suggest. They have suggested nothing. 38 million of them.
And I asked their leader. I said, any of you patriots or just marketers? They're out there beating the gong. Now, what we're doing with Social Security if we can't get done, then forget it. I mean, if we can't solve Social Security by making it solvent, seeing it solvent for 75 years, well then, if we can't get that done, boy, Medicare and Medicaid and defense hang by your thumbs, but it isn't about cutting.
It's about solvency so that young people and old people will have money because if they don't do anything in the year 2037, you waddle up to the window and your check will be 22 percent less and nobody challenges that figure.
CHETRY: And that's what I want to know, just to sort of bring it to the people, bring it home (ph) to the people. We talk a lot about we need to tackle this. We have a deficit commission. We need to really do something about our debt. We need to stop borrowing so much? What are some of the real life consequences that you can tell people right now, Mr. Bowles, would happen if we don't start taking this seriously?
BOWLES: We just take Social Security. A do-nothing plan, Social Security goes broke in 2037. And by law, benefits have to be reduced by 22 percent in 2037. You know, we're talking about raising the age. That's 100 percent true. We are. The age right now is not 65 when you're eligible. It's 66. And by current law, it goes to 67 in 2027.
CHETRY: Right.
BOWLES: And we take it to 68 forty years from now and to 69, 65 years from now, when our grandchildren will finally be eligible for it. I think that gives people plenty of chance to get ready. We also raise the minimum payment that people can get. Those that are less well-off to 125 percent of poverty. We give a bump up to the people between 81 and 86.
That made our job more difficult because that cost money, but we did it in order to really take care of the truly disadvantaged.
CHETRY: Do you think people hear you? Do you think there are people out there who can change these laws or can make these laws that hear you?
SIMPSON: If we can get through the fog of hysteria, we knew that we would be savaged royally on anything we did and, boy, we have. They'll never trick us. They're going to hear what -- we've got people who want to tell this story, especially young people now are hearing what we're saying. We also take care of the hardship people in this thing. The guy that still know -- the worker in the field who can't retire any earlier or later than now, and then, we bump it a little.
We get more from the people who have more and get it to people who have less, and that's what the president is talking about. I don't know how people can challenge what we're doing when the president and everybody is saying we have to be sure we take care of the little guy, and then, when you do it, they bring up some esoteric formula that we're not doing it right. I mean, what bubble?
BOWLES: But you're right. You know, if we don't do something, big consequences. Admiral Mullen, the head of the Joint Chiefs of Staff has already said this is the biggest single national security problem we have, bigger than terrorism. If you believe we got to invest in education and infrastructure and high value research like the president talked about in the State of the Union, and if you believe we need to do that to be competitive in a knowledge-based global economy, there's not going to be any money.
All of it will be consumed by these entitlements. And if you're a business guy and you're out there thinking, gosh, I've got to have capital to grow my business because small businesses can't grow, can't create jobs without money, they'll be crowded out of a marketplace, because by the year 2020, we'll be paying over $1 trillion in interest costs alone for this debt.
CHETRY: Right. Big issues. No easy answers, but hopefully, people are listening. Alan Simpson and Erskine Bowles, great to have both of you with us as always. Appreciate it.
SIMPSON: Thank you very much.
BOWLES: You betcha.
CHETRY: T.J.
HOLMES: Kiran, we knew "Saturday Night Live" was not going to pass up this opportunity doing a spoof of Charlie Sheen, and Charlie Sheen is responding. You know what he called it? Genius. That's coming up.
Also, a little later, he's a Republican presidential contender. Now, Mitt Romney is going on the attack. It is 19 minutes past the hour on this AMERICAN MORNING.
(COMMERCIAL BREAK)
CHETRY: Twenty-three minutes past the hour. "Morning Talker" time. Charlie Sheen has now shattered another Web record. He is the fastest to two million Twitter followers.
HOLMES: I'm not following him yet.
CHETRY: Oh.
HOLMES: Not yet.
CHETRY: It's fun. His internet show also had 100,000 viewers on Saturday night, and he declared himself a man genius warlock winner. He also went after medical experts who questioned his sanity saying he's not in denial and that he's not bipolar.
HOLMES: All right. And you know, "Saturday Night Live" was not going to miss this opportunity, went after Charlie Sheen, also went after Moammar Gadhafi and Lindsay Lohan and some skits, but check out the Sheen skit which was essentially him having his own talk show. Take a look.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I lost my job, too. Now, I can, you know, I can do whatever I want. You know, I can do Major League 3, Hot Shots part quatro. I'm really excited about this. Platoon 2. Electric platoonalu (ph).
(LAUGHTER)
UNIDENTIFIED MALE: Stay positive.
UNIDENTIFIED MALE: Duh. Winning. So are you. Give me three awesome things about you. Go.
UNIDENTIFIED MALE: OK. I have no ugly friends.
(LAUGHTER)
UNIDENTIFIED MALE: I dress like a messed out musketeer, and I've got a mustache that whispers I'm a bad person.
(LAUGHTER)
UNIDENTIFIED MALE: How does that make you feel?
UNIDENTIFIED MALE: Winning.
UNIDENTIFIED MALE: See. That's our lives. Deal with it. Sorry, Middle America. Losers. Winning. Bye-bye.
(LAUGHTER)
(END VIDEO CLIP)
CHETRY: He was actually interviewing John Galliano who, of course, went through his own troubles with that rant caught on cell phone camera. There you go. They always keep up with exactly what's going on, right?
Well, would you pay extra for an airline seat that reclines more?
HOLMES: Yes. Like a bed, too?
CHETRY: Right. Answer recline (ph) all the way.
HOLMES: Yes.
CHETRY: How about, would you pay extra to board the plane early?
HOLMES: Yes.
CHETRY: You would?
HOLMES: Absolutely.
CHETRY: Why do you want to jump in that capsule, like, early?
HOLMES: Capsule?
CHETRY: I'm just staying in the terminal as long as possible.
HOLMES: OK. I (INAUDIBLE), you go to the capsule.
CHETRY: All right. How about a special champagne breakfast? The airlines may have found a way to boost profits and get more of your money. Christine Romans is going to explain that coming up.
(COMMERCIAL BREAK)
HOLMES: All right. Half past the hour on this AMERICAN MORNING. Let's bring in Christine Romans here. The story endear (ph) to all of us and the airlines and the fees. We got some new ones here. Now, these fees or you just paying for services?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Both.
HOLMES: Both. All right.
ROMANS: Everything on the plane except for the recirculated air and the toilet is probably going to have a charge associated with it, and I'm not kidding.
CHETRY: Seat belts. Seat belts are free.
ROMANS: The seat belts are free. There you go. The third thing that's -- the actual plain ride itself is what you pay for when you get the ticket. So, Continental, for example, no more free pretzels. No more Biscoff, little, crumbly sugar cookie. No. They're expected to save $2.8 million every year. They're going to have snack packs available starting $3.95, but no more free pretzel. That as of March 1st on Continental.
So, the complimentary snack is over. And, think of these as all these potential new fees that you're going to see. A charge for reclining seats. First seat that goes back in a comfortable way. How about weather insurance? So, that you can take a little wager on whether that plane is even going to take off. How about high end meals? Delta is testing this this spring.
United already has champagne brunches available on some of its cross country flights. Wi-Fi, movies, pre-boarding, access to the little -- you know, like the admiral's club and all that on American. All of these things you can pay for now, these fees are now 5 percent of global airline revenue. Mark my words. They will find and our finding all kinds of new services to throw on there to try to get you to part with a little bit of your money, as well.
CHETRY: Are the actual baseline fares comfortably cheaper because of this? I mean, you had talked before about the a la carte versus things rolled in one that you don't necessarily want.
ROMANS: Baseline fares today versus three months ago are going up. I mean, this is what we know. They've tried six-fare increases over the past seven or eight or nine weeks, and there are some of them, the stuff, some haven't, but fares are going up. We told you earlier last week, I guess, that Tom Parson's Best Fares says he thinks that airline fares are going to may be double in some cases because of higher fuel costs.
So fares are going up and the fees are thrown in. Last year was the first profitable year for airlines in a long time, so they found the magic scenario.
HOLMES: They don't want to give it up.
ROMANS: They're not going to give it up, and they're going to find new ways. I think they're going to find lots and lots of new ways. And this goes way beyond paying for a pillow. Champagne brunches in first class, chances to upgrade, paying for the movie, paying for the Wi-Fi, paying to recline a little bit.
HOLMES: A guy a year ago said charge for the restroom.
ROMANS: That was a joke about Ryan Air.
HOLMES: Yes.
ROMANS: I think he said nothing is off the table. Nothing is off the table. That would be a little extreme. Even for United, last year they dropped the family pre-boarding. Since my family is a traveling circus, we haven't gone back because if I can't get on that plane first, no way I can get on that plane. So pre-boarding you have to pay for or use miles. All of these things are changing. It makes it hard to know how much you are spending for an actual ticket.
CHETRY: Someone like you who comes on with three children, I'm paying to move my seat away from you.
(LAUGHTER)
ROMANS: It is fun for me. It is not fun for anybody else.
HOLMES: Christine, thank you so much.
Let's take a look at the stories making headlines right now. The eastern third of the country right now, you can tell them, it is still winter in some places. Some snow. We are showing you rain here, heavy rain in Indiana. A lot of homes flooded, streets you can't get down. More rain expected this week.
CHETRY: You are feeling the pinch of gas prices. The national average is $3.51 for regular, up a penny from yesterday. The highest prices are in California where it is $3.90 a gallon on average.
Also, new fighting in two Libyan cities. Moammar Gadhafi launching counterattacks in Misurata. The opposition is celebrating, saying they fought off some of the airstrikes and tanks there. So a little debate about who exactly is in charge of the third largest city in Libya.
Meanwhile, the U.N. is warning more carnage could come as the battle gets closer to Tripoli.
CHETRY: For Republicans considering a challenge to President Obama, 2012 begins now. One of the potential runners Mitt Romney has an Achilles' heel, however, that could trip him up.
HOLMES: CNN's Jim Acosta following this for us. He join us live from Washington, D.C. Jim, good morning to you. What is this Achilles' heel?
JIM ACOSTA, CNN CORRESPONDENT: It is Romney-care, something that is named after the former Massachusetts governor. Hi, T.J. and Kiran. The race for 2012 is heating up this week. Potential candidates are hitting battleground states. It is very early to be talking about this, but the man expected to be a frontrunner for the GOP nomination, Mitt Romney, was in New Hampshire over the weekend. It was the first real attempt before GOP primary voters to ease tensions over the health care law he got passed as governor of Massachusetts.
This is a sore spot for Republicans. The president and even a few of Romney's potential rivals have dubbed Romney-care a model for Obama care, mainly because it involves an individual mandate. He says this law he passed was not perfect and designed only for Massachusetts, not the country.
(BEGIN VIDEO CLIP)
MITT ROMNEY, (R) FORMER MASSACHUSETTS GOVERNOR: Our experiment wasn't perfect. Some things worked, some things didn't. Some things I'd change. But one thing I would never do is usurp the constitutional power of states with a one size fits all federal takeover. I would repeal Obamacare.
(APPLAUSE)
(END VIDEO CLIP)
ACOSTA: Romney is not the only GOP contender on the trail there is a big GOP gathering where Newt Gingrich, Tim Pawlenty, Rick Santorum, Buddy Roemer are all expected to address religious conservatives. Tea Party favorite Ron Paul will be in a different part of the state, and an aide to Donald Trump is making a trip to Iowa as well. Former governor Mike Huckabee will be in South Carolina. He'll be asked about some of those comments last week he mistakenly said the president grew up in Kenya. So it's getting busy out there, guys.
CHETRY: Romney, has he been consistent on this issue been consistent?
ACOSTA: This didn't trip him up in 2008 because Obamacare didn't exist at that point. I interviewed Mitt Romney about the subject of health care reform and what he got passed in Massachusetts about a year and a half ago. In that interview he said that portions of the law were a model for the country and he defended the insurance mandate as a way to get everybody in his state into the system. Take a listen. (BEGIN VIDEOTAPE)
ACOSTA: Is this something you are still proud of as governor?
ROMNEY: I think people in Massachusetts like myself are very proud of the fact that we have a setting where everybody in Massachusetts has insurance. And if people worry about losing a job, they don't have to worry about losing their coverage. You keep coverage, you have insurance as long as you are in Massachusetts. It is a very positive plan.
(END VIDEO CLIP)
ACOSTA: So it will be interesting to see how this plays out over the coming months. There were Republicans at this gathering who don't think it is a fatal flaw, but do think it is an obstacle.
CHETRY: He has been careful to say it is not at all like what he refers to as Obamacare. And he also said the autonomy of the state is the most important thing.
ACOSTA: Exactly. He is saying that this was something that was only done for Massachusetts. But a lot of people across the country and even he was saying at the time when this law was passed there are portions of this law that could serve as a model for the country. So you're going to see some of that tape resurfacing.
HOLMES: Jim, we appreciate you. Good to see you this morning.
So what is having a great teacher worth? How about $400,000? We'll explain when I join my sparring partner here on "AMERICAN MORNING," Dr. Steve Perry. He is coming up next.
(COMMERCIAL BREAK)
HOLMES: It's 39 minutes past the hour on this "American Morning." we have a new study that points to what could be the real, tangible value of good teachers. It says that students learn so much more from better performing teachers and that adds hundreds of millions and billions and even trillions of dollars to the economy.
Let me bring in a good friend of our show, Dr. Steve Perry. He's joining me this morning from Hartford, Connecticut with this morning's, I don't know what to call it. I guess it's Perry's principles, but I like to say we are in the principal's office.
I want to start with this question -- what would happen to education in this country if the starting salary for every teacher was at least $100,000?
STEVE PERRY, CNN EDUCATION CONTRIBUTOR: Well, this study and many others tell us that the actual payment doesn't determine a person's effectiveness. So I don't know that $100,000 is a magic number.
HOLMES: It wouldn't bring in the best teachers or attract better talent, you are saying?
PERRY: I think what keeps teachers is making sure they work in an environment where they are valued and supported. Money becomes an issue later.
HOLMES: Let's turn to this study by the National Bureau of Economic research. They say students learn three times more from a "top teacher" than from a bottom performing teacher. What that translates into is with a good teacher a class of about 20 earns about $400,000 more over a lifetime. That is a group of 20 together.
Down the road what this means is the impact of a better teacher could add $100 trillion to the economy because of the effectiveness of the teacher, the impact on that student, and that student's ability to go down the road and be productive. Steve, you agree? The numbers are hard to estimate that far down the road. But do you think this is possible?
PERRY: Absolutely. Every teacher has a class load of up to 150 students each year. We believe if our children have access to quality teachers they, in fact, have a greater trajectory on their overall earnings throughout their life.
In addition to that, it is why we pay for good schools, because we believe in our core if we give our children access to quality instruction that they do better in life. But unfortunately we don't have enough measures to determine what specifically makes a good teacher. We think a great teacher is what they do in their off time. Do they coach, do they teach?
HOLMES: Steve, right there, how can we do that? How can we possibly measure? You have to look at a resume that can be incredibly impressive. But you are talking about a measure -- would you advocate a teacher who hasn't taught before that you just have a good feeling about?
PERRY: Degrees don't tell us. This study says if a teacher has been teaching five years is as effective as a teacher teaching 25 years. People don't get better over time. Some people are just good teachers. They know how to teach. There is something about them.
One of the ways I am able to tell is we look at what they do in their off time. If someone teaches, the barbecue who is organizing kids into a kickball game. Real teachers, they are teaching bible study on Sunday after teaching five days of school.
HOLMES: Steve, 15 seconds. Would a study like this change anything? We can solve the problems like this and not be in the situation we are if we can improve our instruction in the classroom?
PERRY: I hope it does. People have to start o realize this is not a game. We talk about investing in infrastructure. Infrastructure is how we learn and teach. Whether it is $100 trillion or $1 billion, whatever the amount, we can do better as a country if we have better quality instruction in our classroom.
HOLMES: Not so bad in the principal's office. I don't feel as bad as I usually do.
(LAUGHTER)
Dr. Steve Perry, good to see you as always, my man. You enjoy the rest of your day. See you soon.
PERRY: You too.
CHETRY: T.J., thanks. Still ahead, we're going to check in with Rob Marciano. He has the forecast for us. We're looking at more rain and unfortunately more snow and some severe weather on tap. It's 45 minutes past the hour. We'll be right back.
(COMMERCIAL BREAK)
CHETRY: Forty-seven 47 minutes past the hour. The shuttle "Discovery" is now on its long journey home. It was kind of bitter sweet.
HOLMES: The last --
CHETRY: It's the last mission. Yes they're coming back for the last time, at least "Discovery", as they undocked from the International Space Station a little over an hour ago. The crew got a real treat this morning. Their final wakeup call was courtesy of Captain James T. Kirk.
Listen.
(BEGIN AUDIO CLIP)
WILLIAM SHATNER, ACTOR: These have been the voyages of the space shuttle "Discovery." Her 30 year mission, to seek out new science, to build new outposts, to bring nations together on the final frontier. To boldly go and do what no spacecraft has done before.
(END VIDEO CLIP)
CHETRY: How cool is that? Well, a once in a life time wakeup call for a once in a lifetime end of the mission. "Discovery" is scheduled to land Wednesday and it's going to then be retired to the Smithsonian. That's pretty cool.
HOLMES: I hate to see it go then, two more missions I believe after this one.
(CROSS TALK)
CHETRY: Yes, the "Endeavour" --
HOLMES: And the "Atlantis".
CHETRY: -- and the "Atlantis."
HOLMES: Yes, that's the last couple. Rob Marciano, standing by. We give you one last look this morning at -- ROB MARCIANO, AMS METEOROLOGIST: Yes.
HOLMES: -- what could be a tricky travel forecast for some?
MARCIANO: Yes. I got to see that -- that puppy travel to the space about a week ago off the launch pad.
HOLMES: Oh.
MARCIANO: Put that on your bucket list. There's only two left guys.
CHETRY: I know.
MARCIANO: So if you haven't seen it, get on down there. Traffic by the way is going to be horrible for the next year.
All right, listen, I know you had trouble getting into LaGuardia last night, T.J., because of the wind. The wind is gusting over 50 miles an hour, we had heavy rain as well and some snow that was pretty intense.
Parts of our state seeing over 20 inches; Burlington seeing 19 inches; my alma mater in Ithaca, 15 inches of snow; in Stowe, Vermont, how about that, 14 inches of fresh pow in New England. A little bit farther to the south, in Hartford and parts of Orange, Massachusetts, seeing two and three inches of rainfall.
So this has -- a lot of rainfall with it. It's beginning to dry out now slowly. But still the backside including the Adirondacks, seeing a little bit of snow that continues to pile up in this area.
All right, it will be blustery today, that's for sure but it'll be dryer than yesterday. We've got another system that's coming into the plains that's going to kind of team up with yet another system that's coming into the West Coast. And this is going to be our next big weather maker I think as we go to the next couple of days.
This is the system out here. And as we get to tomorrow it injects into the plains; we'll have the threat for seeing severe weather across areas, unfortunately, that saw that severe weather yesterday, it could see it again as we go through tomorrow.
We have a delay right now with winds aloft at Bradley International at the Hartford. We'll probably see some delays at the New York Metro areas although not as intense delay-wise as it was yesterday. But you'll see probably 30 to 60 maybe over an hour delays at spots.
Fifty in St. Louis; it'll be 69 degrees in Dallas, 43 degrees in New York City.
Check out this video coming to us from Hawaii. Kilauea volcano going nutso over the weekend. A lot of going -- about 65 feet into the air, that part of the crater collapsed opening a new vent. So they had to close parts of the park. Nobody injured, but they are monitoring this closely. And of course those pictures never get old.
AMERICAN MORNING will be right back.
(COMMERCIAL BREAK)
CHETRY: I don't know what that first video was but --
HOLMES: Oh, I didn't see. I was just grooving over here.
CHETRY: Yes, it looked like a costume party in San Francisco but --
(CROSS TALK)
HOLMES: Oh well, ok.
CHETRY: -- but it clearly is not. Because we're talking about Memphis.
"Building up America" today, Memphis getting its groove back.
HOLMES: I love Memphis. Elvis Presley's hometown of course. I did some growing up there as well. Going back to its roots to try to revive the economy. Tom Foreman, joining us this morning from Memphis. Good morning to you kind sir. Have you got the bus on Beale --
TOM FOREMAN, CNN CORRESPONDENT: Hey, T.J.
Yes we have the bus on Beale so you know -- hey, T.J., you know, being born here in west Memphis as you were -- you know, that if you go from New Orleans up to the Mississippi Delta and you finally wind up here on world's famous on Beale Street in Memphis, you have covered some of the most important musical ground in this entire country.
You mentioned, Elvis, but Carl Perkins, B.B. King, Isaac Hayes, the Staple singers; all sorts of great, great names have come through here in all genres of music. This is the breeding ground for the great music of America. And yet the music industry, in the past couple of decades here not so much. It has gone everywhere else: Nashville, New York, Los Angeles.
But now some people here are trying to fix that.
(BEGIN VIDEOTAPE)
FOREMAN (voice-over): In the clubs, up and down Beale Street, everywhere the music industry here is rising fast.
UNIDENTIFIED MALE: Well, this is the Memphis Music Foundation.
FOREMAN: Two years ago local businesses opened this non-profit center to help artists with everything from copyright law to concert promotion. All for no charge, they pulled in pros like Al Bell, once head of the famous Stacks Records. AL BELL, CHAIRMAN, MEMPHIS MUSIC FOUNDATION: Without being the record company we are, in fact, the record company that provides those kinds of services --
FOREMAN: You are still in the same business you used to be in?
BELL: Yes. Yes, yes. We are just doing it as an institution now and we're doing it for free.
FOREMAN: For decades the business here languished. Steady crowds came to Graceland and Sun Studios, but new talent had to leave for successes. James Alexander is the founding member of the Memphis supergroup, the Bar Kings.
JAMES ALEXANDER, FOUNDING MEMBER, "THE BAR KINGS": Oh, it was devastating. It was devastating. In fact, when it first happened we said, wow, what are we going do?
FOREMAN: So when you see young people coming here today, how do you feel?
ALEXANDER: It is great.
FOREMAN: The foundation now connects 4,000 artists, promoters, agents and others with information, resources.
DEAN DEYD: They are absolutely today making more money. They're making money, they're spending money and they're spending that here in Memphis, Tennessee.
CAMERON SMITH, "SKEWBY", MUSICIAN: I was a (INAUDIBLE) and I have both now as well. It's a beautiful thing.
BELL: I love it. I love it. I love it. I love it. It is Memphis, Tennessee. I love it.
(END VIDEOTAPE)
FOREMAN: They know that they started this in the worst possible time with the recession, but this is the real deal. It is actually working here, restoring the music industry here to the prominence it rightfully deserves in Memphis. And that is meaning real jobs and real growth that they think they can bank on long into the future.
It is a very, very exciting story. I hope we see a whole lot more in coming years.
Next time I will do the follow-up though, Tom, when we go back to Memphis. All right Tom. Good to see you, as always, this morning.
We're just a few minutes to the top of the hour. Quick break, we're right back.
CHETRY: Field trip -- field trip for the whole show.
(COMMERCIAL BREAK) HOLMES: All right. We appreciate you spending time with us on this morning on this AMERICAN MORNING.
It's time for us to hand this thing over to Atlanta.
CHETRY: That's right. We'll see you back here, bright and early tomorrow morning. In the meantime "NEWSROOM" starts now with Randi Kaye. Good morning Randi.
HOLMES: Hey Randi.
