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President Reveals Debt Targets; Mubarak and Sons Investigated

Aired April 13, 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 10:00 a.m. on the East Coast, 7:00 a.m. on the West. I'm Carol Costello sitting in for Kyra Phillips.

This hour, all eyes on the White House and your money is the focus. President Obama meeting with congressional leaders to discuss cuts in budget spending and reducing the national debt. We will preview the president's plans.

In Egypt, authorities had detained former president Hosni Mubarak and two of his sons. They're being questioned about the killing of protesters in the uprising that toppled his government. Egypt state television says Mubarak has suffered a nervous breakdown, his condition described as not stable.

In New York, a woman drives her van into the Hudson River, killing herself and three of her children. Police say they're not sure if it was intentional, but there was a domestic argument just before the tragedy. Authorities plan to hold a news conference later this hour.

(MUSIC)

COSTELLO: The national debt, it's your debt, it's your children's future -- and in Washington, this is the day when the tough choices take the debate to a whole new level.

As you can see from our countdown clock on your TV screen, we're now 3 1/2 hours away from President Obama revealing how he wants to balance the nation's budget. His goals: keep domestic spending low, find new ways to trim the defense budget, reduce health care spending, and reform the tax code, especially for the wealthiest Americans. And that last idea of eliminating the Bush era tax cuts is sure to heat up at a meeting this hour with congressional leaders.

Dan Lothian at the White House.

And, Dan, I know most Republicans say those tax cuts, those Bush era tax cuts, should not end for anyone. Are they non- negotiable?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. And didn't we go down this road already last year? And here we are again.

The bottom line is that the White House believes that there needs to be some revenue generators in order to eat into the massive deficit. And so, a senior administration official is saying that the president does plan during his remarks to call for an end to those Bush era tax cuts for the wealthiest of Americans, those making over $250,000 a year.

The question is: will this be something that Republicans will be ale to embrace? And, right now, it's a resounding no. They're saying that this is just simply unacceptable. It's not even going to be on the table. So, it does appear that they'll be a difficult battle ahead --

COSTELLO: Well, you're right, Dan, because, Eric Cantor, Congressman Eric Cantor, just talked with AMERICAN MORNING a couple hours ago, and he made no bones about it.

Listen.

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: It's very ironic that a few days before tax day in this country, that the president would be coming out asking people to pay more taxes. I don't think many Americans believe that that's the answer to how we want to fix this economy and grow jobs. You know, and that's really the question. You can't fix the problem that we're facing by cuts alone. We know that.

(END VIDEO CLIP)

COSTELLO: So, Dan, it seems like the same old arguments. The Democrats are for keeping the entitlements. The Republicans are against raising taxes of any kind. I know that congressional leaders are meeting with President Obama in the White House right now.

Is there any wiggle room at all?

LOTHIAN: Well, you know, early in any debate, it always appears that there's no wiggle room at all. We saw in the recent debate over the budget. But in the end, right in the final hours, they were able to find some kind of compromise.

So, obviously, there is a hope that compromise can be found even in this difficult debate, but it will be very tough. And President Obama realizes that there will be criticism. So, that's why ahead of his remarks, he has invited this bipartisan group of congressional leaders here to the White House to sort of lay out what the White House is calling its vision.

But I'll tell you, even now up on the Hill, you're hearing from Republicans who are saying that they need to hear more than just a vision. They want specifics. It's unclear how specific the president will get.

COSTELLO: Dan Lothian, live at the White House. Many thanks. You have a busy day ahead, we know.

You can see the president's speech on the national debt live right here on CNN, scheduled to get under way at 1:35 Eastern, 10:35 Pacific Time.

Let's head overseas now.

Health and legal problems for former Egyptian President Hosni Mubarak. Prosecutors ordered he and two of his sons held for 15 days as they investigate claims of corruption. It comes the day after Mubarak was admitted to the hospital.

Ivan Watson reports from Cairo.

Hi, Ivan.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN CORRESPONDENT: A remarkable turn of events. Five days after tens of thousands of Egyptians gathered in Cairo's Tahrir Square demanding that their former president face a criminal court, an official with the Justice Ministry here confirms to CNN that Hosni Mubarak has been detained for 15 days in connection with the deaths of hundreds of protesters during the revolution of January and February, which led to his overthrow.

In addition to this, Justice Ministry officials telling CNN that the two sons of Hosni Mubarak, Gamal and Alaa, have also been detained for 15 days and transferred to Cairo's Tora Prison, where they will join a number of other former senior ranking officials in Hosni Mubarak's former government.

This is a dramatic change for many Egyptians. I spoke to one Egyptian woman who just said the word "nice" in English when I asked what she thought about this. She said, "I can't believe that the Mubarak family is now being brought to justice."

This is a man who ruled this country for nearly 30 years. Many Egyptians knew no other president, and there are widespread accusations that he and his family amassed great wealth during his time in office -- accusations of corruption, of mafia-style tactics to take over profitable businesses, to win partnerships and high-ranking positions profitable companies here in Egypt.

And this development is likely to win new breathing room before the ruling military council which took over after Hosni Mubarak stepped down on February 11th. The military has come under increasing pressure from human rights groups, from activists as well, amid widespread -- wide scale allegations of torture being carried out by military personnel of activists, amid reports of military tribunals and a violent crackdown on protesters in Tahrir Square, where the demonstrations took place that led to Hosni Mubarak being toppled from power in the first place.

This move likely to get a lot of support from Egyptian people and to win accolades for the military council here, which is supposed to rule the country for several months now until parliamentary and presidential elections scheduled to take place in the future.

Ivan Watson, CNN, Cairo.

(END VIDEOTAPE)

COSTELLO: So, how is the world reacting to new developments with Mubarak and his family? Let's head to London and check in with Zain Verjee.

Hi, Zain.

ZAIN VERJEE, CNN CORRESPONDENT: Hi, Carol.

Well, much of the opinion of the world is encapsulated in this particular headline from "The Guardian" newspaper. It's a left- leaning paper. And it's run an opinion piece under this headline, "Hosni Mubarak: from detention to where?" Referring to dictators in general, Carol, it basically says, "Allowing them to go with dignity may not be what they deserve but sometimes it may be the most practical solution." And then the piece goes on to say, "No tyrant is going to agree to leave if it means being hanged, drawn and quartered as soon as he steps down" -- Carol.

COSTELLO: Well, the interesting thing here is what's happening to Mubarak right now. I mean, is that sending a message to other dictators?

VERJEE: I think it is, you know? I mean, this is not a good time for autocrats and dictators around the world. The problem with dictators is they usually don't have a plan B for the sort of stuff. They expect to hang on for life and there's a lot of repression goes on and when they realize it's the end game, a lot of these guys just want to hang on and bring the country down with them.

And that's what's at stake as we saw, for example, with Laurent Gbagbo in the Ivory Coast. Now, there's a guy, you had to deal with a bloody civil war and the bloody fight before he was arrested.

Look at President Saleh of Yemen who is still hanging on, and now, there's this whole debate whether he should get immunity from prosecution or he should be held accountable.

And then, also, if you look at Tunisia, Ben Ali, same thing. You know, he's in Saudi Arabia. And the Tunisians are saying, come back here. They want him back in the country and they want him put on trial.

So, what we need to understand when we look at the situation with these dictators and what needs to happen with them, there are two ways to go, right? One is to say, OK, leave with dignity. Just go -- and hope that the violence in the country would be reduced and the tensions. Or hold them accountable. The victims would want that to happen, and stick to your principles.

So, it's going to be really important to see what happens, and Mubarak may send a signal to the rest.

COSTELLO: Zain Verjee -- live in London -- thanks.

It's an eerie reminder about the immense power of a tsunami. The body of a victim found more than 300 miles from where he was swept away. We'll have details

And we're keeping an eye on the White House. Congressional leaders are expected to meet with the president this hour.

(COMMERCIAL BREAK)

COSTELLO: When you start talking about budgets, your head can spin from all those zeros, and commas and those huge numbers.

So, we wanted to step back, take a breath and find out the most important of all. That is the bottom line how these measures that President Obama might talk about to balance the budget would actually affect your pocketbook.

CNN's Don Lemon is here.

So, Don, I leave it to you. Break it down for us.

DON LEMON, CNN CORRESPONDENT: You know, what we're really going to talk about, though, entitlement issues, Carol, because that's where people say the -- they can really make a mark by entitlement issues. But we want them. A lot of us are baby boomers and, you know, we rely on that. We rely on that money.

Here's what we're talking about over the next decade, really about 11 years, up until 2022 -- the federal budget is about $40 trillion -- $40 trillion. And the bulk of that, 40 percent of that, comes from entitlements, like Social Security here. You see, it makes up about 20.4 percent of budget, 12.8 percent is Medicare, and then we get Medicaid down here, 7.2 percent. Again, Social Security, 20.4 of the budget, Medicare, 12.8, and then, Medicaid, 7.2.

This is a place, as I told Carol, where changes can be made. But politicians are afraid to do that because people rely on it and they've paid into the system and they think that they are owed that. So, this is why those entitlements make up such a big part of the budget especially.

So, as we move here, this is -- this is what happens. Up until now, until about 2035, this issue is because of baby boomers. From now until 2035, the number of people who will depend on Social Security will jump from just over 30 million that you see here to over 50 million people who will rely on Social Security -- draw the bulk of their income from that.

So, for about the last 20 years or so, there have been -- at least three people for every retiree -- three people in the workforce. But then, when it gets to 2035, only two workers to support every retiree, that's because most of the people have retired, Carol.

So, the problem here is that there's less money going in per retiree. So, again, as we're talking here.

I just want to break it down for the average family. For a family making $40,000, in order to do what House Republicans want to do, you'd have to cut about $6,200 a year if you're bringing home $40,000 for the next 11 years. And then, you have to do -- that's $517 a month. And, remember, you're doing that for the next 11 years. So, that brings it home.

COSTELLO: And that's the Republican plan for cuts to Medicare and Medicaid?

LEMON: That's the Republican plan, the $6.2 trillion cut to the budget.

COSTELLO: Gotcha. The Paul Ryan plan, right.

LEMON: The Paul Ryan plan they want to do over the next 11 years. This is what would you have to do if you're makings $40,000. You have to that for a year, and this every single month for 11 years.

COSTELLO: Gotcha. Thank you, Don.

LEMON: A lot of dough.

COSTELLO: It helps a lot. We appreciate it.

LEMON: Thank you.

COSTELLO: Let's talk tax cuts now, or tax hikes I should say because it's guaranteed the parties will butt heads over those Bush era tax cuts, and that could make life even tougher for the so-called gang of six -- three Democratic senators: Conrad, Durbin and Warner, and three Republicans: Chambliss, Crapo and Coburn. They're trying to come up with a deficit-reducing plan that both sides can live with.

Senator Kent Conrad joins us now live. He's also the budget committee chairman.

Welcome. You have a tough job, we understand that.

You've been working with this gang of six, trying to come up with a plan to decrease the debt in the country. But you guys are having trouble, too. If moderate lawmakers can't agree on a way to reduce the debt, what hope do we have?

SEN. KENT CONRAD (D-ND), BUDGET COMMITTEE CHAIRMAN: I think moderate lawmakers can agree. We saw that on the president's commission where 11 of 18 of us did agree. That's 60 percent -- five Democrats, five Republicans, and one independent.

The group of six that is now working -- three Democrats, three Republicans, and working on a comprehensive plan, one with everything on the table, one that does reduce the debt $4 trillion over the next 10 years to get us back on track. So, I'm optimistic --

COSTELLO: So, do you have a plan -- do you have a plan in place right now?

CONRAD: You know -- and the group of six, we've agreed not to publicly comment on the status of negotiations, because then we're spending all of our time commenting instead of actually reaching a conclusion. But --

COSTELLO: Well, let me ask you this, then. Let me ask you this -- you personally. I mean, everybody agrees we must do something about entitlements -- Social Security, Medicare, Medicaid. And also, a lot of economists say you also have to raise taxes.

So, what are you willing to commit to in terms of entitlement cuts?

CONRAD: Well, I've already committed to it. I voted on the commission for $4 trillion of savings. I voted for reforming Social Security. Not to reduce the deficit. Every penning of savings in the commission plan in Social Security went to secure 75-year solvency for Social Security because as your previous guest indicated, Social Security is going to be insolvent in 27 years. At that point, it's going to be at 22 percent across the board cut.

COSTELLO: So, how we an reform Social Security?

CONRAD: Well, what the commission called for was raising the wage cap. That means simply raising the amount of income that's subject to Social Security tax. Number two, to extend over a long period of time the retirement age, because people are living much longer, and it's already been done once. We're going to have to do it again -- again, very gradually over an extended period of time. We also adjusted the inflation adjuster to make it more reflective of what actual inflation is.

COSTELLO: And what about --

CONRAD: So, those are all things that were done to secure 75- year solvency for Social Security. And I voted for that. I'm already on record.

COSTELLO: You're already on record. That's good.

So, what about letting these Bush tax cuts expire on the wealthiest Americans? Do you think that has a chance?

CONRAD: I do. But I think there's an alternative, one that would be just as progressive as that, and that would be what, again, what the commission recommended, which was to reduce tax expenditures. Remember, the tax expenditures go disproportionately to the wealthiest among us. Tax expenditures are now running $1.1 trillion a year -- deductions, exclusions, credits, special treatment, special preferences that are in the tax code. Again, they go disproportionately to the wealthiest among us.

We could reduce those, raise revenue, and have sufficient money to actually lower tax rates, both corporate and individual, that would make America more competitive. That would help us generate more jobs.

That's the approach that the commission adopted. Again, it raises more revenue --

COSTELLO: But I just want to ask you --

CONRAD: -- but it also allows us to lower rates.

COSTELLO: I just wanted to ask you -- there are so many plans out there. The president is going to unveil his plan. The Republicans have their own plan. Gang of six will have its plan. You might have your own personal plan.

How do you put all of those plans together, sit down and come up with some sort of compromise? Because we all saw what happened when negotiations began over the 2011 budget and it wasn't pretty.

CONRAD: At the end of the day, I believe there is going to have to be a summit -- or whatever one calls it -- that involves the president, the leaders of the House and the Senate, Republicans and Democrats, to sort through these various plans to come up with an agreement.

And I believe, at the end of the day, it's going to be something pretty close to what the commission recommended. That is, yes, new revenue, but more spending cuts, more reform of the entitlement programs because -- look, we are borrowing 40 cents of every dollar we spend a day. The revenue is the lowest it's been as a share of our economy in 60 years. Spending is the highest it's been as a share of our economy in 60 years.

So, it is going to take a comprehensive approach that involves spending cuts, involves entitlement reform, that involves revenue. And the sooner we do it, the less draconian the changes are going to have to be.

COSTELLO: Well, we'll see if you can get done and if there will be a summit.

Senator, thank you for joining us this morning. We appreciate it.

CONRAD: You bet.

COSTELLO: A bumpy time for pop star Justin Bieber who is on tour in Israel. He's s actually become a political football. The Bieb has ticked off Israel's prime minister. More details for you, next.

(COMMERCIAL BREAK)

COSTELLO: Justin Bieber reportedly just says no and he ticks off the prime minister of Israel.

"SHOWBIZ TONIGH" host A.J. Hammer has all that and more.

So, A.J., what's with the Bieb?

A.J. HAMMER, SHOWBIZ TONIGHT HOST: It's strange even to hear you say the Bieb and the prime minister of Israel in the same sentence, Carol. But he can't even seem to stay out of politics in the Middle East.

The biggest buzz over Justin Bieber in Israel right now is not about his haircut or he's upcoming concert. It's about meeting with Israeli Prime Minister Benjamin Netanyahu that never happened. A spokesman for the prime minister tells CNN Bieber's people approached them about a meeting between the two of them. Netanyahu's office says that they wanted to invite kids from southern Israel where they had been recent rocket attacks to this meeting but they told CNN that the meeting proved impossible. Local headlines are speculating Bieber backed out of because of the political nature of the event.

Bieber's concert promoter says he didn't even know that the meeting was in the works and as for the superstar himself, all he's been trying to do, aside from his concerts, is check out some of the spiritual sights in Israel without being hounded by the paparazzi. Well, that's not working out for him.

Here's what he tweeted about that, "I want to see the country and all the places I've dreamed of and whether it's the paps or being pulled into politics, it's been frustrating." So, it's unfortunate for Justin, Carol, but, of course, that is the price of fame. No matter where in the world you go.

COSTELLO: It certainly is. When people line up just to take a picture with your cut off hair, that's the price you pay.

Another political story involving Oprah Winfrey.

HAMMER: Yes. Oprah is going to have the Obamas on her show. Of course, we know Oprah's always been a big supporter of the president and first lady. And she's going to be taping an episode with them on April 27th. That is said to air on May 2nd, which is the last month of Oprah show.

Here last episode is going to air on May 25th. And if you want to buy a commercial on the show, you better be ready to pony up. I'm here to tell you that 30-second spot on the final "Oprah" episode will cost reportedly 1 million bucks.

But, I got to tell you, Carol, I do not think they'll have trouble selling that time out.

COSTELLO: I don't either. A.J., thank you, as always.

You want information on everything breaking in the entertainment world -- A.J.'s got it tonight on "SHOWBIZ TONIGHT" at 5:00 p.m. Eastern and 11:00 p.m. on HLN.

Ten bodies found in Long Island neighborhoods, still no arrests. The evidence has some looking at former police officers as suspects. But how do law enforcement hunt down one of their own? A former lawman is our guest, next.

(COMMERCIAL BREAK)

COSTELLO: The search for a serial killer suspect has now expanded into a second county on Long Island, New York, with at least eight sets of remain linked to the investigation. But the woman whose disappearance sparked off the search, she's still not been found.

CNN's Allan Chernoff brings us up-to-date.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT (voice-over): May 1st, 2010, 24-year-old prostitute Shannan Gilbert disappears after visiting a client in the tiny community of Oak Beach, New York.

December 11th, 2010, a canine officer training his dog uncovers skeletal remains several miles west of Oak Beach. A forensics examination determines they are not those of the missing prostitute.

Two days later, three more victims are discovered.

COMM. RICHARD DORMER, SUFFOLK COUNTY, N.Y. POLICE: They weren't all clustered, but they were within a quarter of a mile of each other.

CHERNOFF: Once the remains are positively identified, the link between the victims is clear. All four are prostitutes in their 20s who advertised on Craigslist as Gilbert did. Authorities are convinced they're dealing with a serial killer.

March 29th, 2011, another skeleton found nearby, another question mark. It's still not Gilbert.

April 4th, the search area expands and yields more bodies.

UNIDENTIFIED MALE: We found human remains. Three human remains so far.

CHERNOFF: Monday, April 11th, investigators start looking in Nassau County for the first time, resulting in yet another grisly discovery.

UNIDENTIFIED MALE: At about 3:30, officers discovered what appeared to be another human remain.

CHERNOFF: The death toll for the Long Island serial killer or killers rises again. Still, no sign of Shannan Gilbert, the woman for whom the search began.

(END VIDEOTAPE)

COSTELLO: Allan Chernoff now joins us from Jones Beach, New York.

Allan, is there anything new that investigators are sharing with you?

CHERNOFF: What's happening today, this morning, is that the dive team from the Suffolk County Police Department is in the waterways on the bay side, off of this very long barrier island. So, to my right, we've got way down, folks checking to see whether they can find any clues whatsoever. That might about murder weapon, maybe body parts, who knows? Perhaps nothing at all will be found. We'll try to find out later on today.

COSTELLO: Yes, they're going to have a news conference. I know you're awaiting that. Allan Chernoff, thanks so much. Reporting live from Jones Beach, New York.

As you probably have heard, there is speculation the serial killer suspect could be a law enforcement officer. That's floating around out there. Lou Palumbo is a retired Nassau County police officer and current head of the Elite Group, a security agency. Welcome, Lou.

LOU PALUMBO, HEAD, ELITE GROUP: Hi, Carol. How are you?

COSTELLO: So, they're finding these remains, all of them on this remote beach on Long Island, and we now hear they found the human remains of a child. What does that tell you?

PALUMBO: Well, you know, quite candidly, it might have been the offspring of a prostitute, which would account for why the child might not have been looked for. In other words, it's no secret a lot of these young ladies or even gentleman who engage in prostitution at times are disenfranchised from families. And what that subsequently lends itself to is nobody's looking for them. So, they first need to identify who the child and who the woman is.

But Carol, one thing I do want to mention to you, this isn't uncommon to find bodies along this strip of roadway between Jones Beach, for example, and the (INAUDIBLE) Causeway. This has been going on for decades, literally. And what we actually did here was open up Pandora's box, as you know now, looking for one person. They need to identify the remains --

COSTELLO: So, let's go back to what you said before. Bodies have been found on this remote stretch of beach before. So -- I mean, that kind of throws a wrench into if these sets of human remains are even connected, doesn't it?

PALUMBO: That's absolutely correct. That's why I'm listening to the term serial killer being thrown around, and I've not yet heard any law enforcement agency, not Suffolk County, not the state police, not the state park police and not Nassau County police use that term just yet.

The thing I will say to you is that once they identify who the individual is, they're going to further conduct tests to try to determine how long they've been deceased, and that's clearly relevant to this. They could have body parts that are there from ten years ago.

The thing that's also worth mentioning, Carol, is the forensics out there for the law enforcement agencies who are heading up this investigation are basically zero because of the harshness of the elements. I happen to have been a lifeguard at Jones Beach, and I'm very familiar with the impact of the wind, the storm surges, full moons, any number of dynamics that lends itself to deterioration of a crime scene.

I will say Nassau County Police Department, which is probably the most progressive law enforcement agency in the country right now -- and I say that because of the technology that they're implementing. And I'll bet you find it curious to know they were the first police department who utilized DNA in trying to solve crimes. They're way on top of this already. Pretty much what we're doing now is trying to identify --

COSTELLO: Yes, but what you said, Lou, if it's the harsh conditions out there and the bones are wiped clean of evidence, and there's not much evidence to find. I mean, how difficult will this be for them, even if they have the best technology?

PALUMBO: Well, I'm going to help you with that question. The first thing do you is identify the individual, and then try to create a time frame at which point they had disappeared. And based on that, we now go backtrack into who their relationships were prior to their disappearance. That's one of the avenues that you'll explore.

You're right. I made a statement and I stand by it, that the forensics there is a result of the harshness of this environment, basically gone. I could have dumped my brush which is loaded with your DNA, and I don't think at any point in time would it be in any form or tact would lend itself to finding me. That's part of this problem.

But let's first identify who they are, create a timeline of disappearance, how long they've been deceased and then start to connect some more dots as to who, for example, a prostitute's handler might have been. You know, earlier in the segment, we mentioned the first four young ladies found were prostitutes. We've not heard any further connection.

And I would only say this to you, Carol, we've had discussions about this since the '70s about bodies being found out along this strip. It's desolate, its not patrolled by law enforcement because there's not a significant density of population to warrant patrol. So, there are dynamics here that are going on.

COSTELLO: I understand. Tough dynamics, too. Maybe we'll find out more later on this afternoon when that news conference -- after that news conference, I should say -- in New York. Thank you so much, Lou, for joining us this morning.

PALUMBO: Thank you.

COSTELLO: It's just after 10:30 in the East. Here are some of the stories we're following.

New developments in a story out of Newburg, New York. A mother drove her minivan and her three young children into the Hudson River. It's a possible murder/suicide after a dispute with the children's father. A fourth child, a 10-year-old boy, apparently escaped. Here's what the police chief said moments ago.

(BEGIN VIDEO CLIP)

CHIEF MICHAEL FERRARA, NEWBURGH POLICE: The investigation revealed that all the children were inside the vehicle when it entered the water, but the 10-year-old child managed to escape. It appears that from the investigation he managed to hit the power windows and opened up one of the windows and climbed out of the vehicle before the vehicle sunk.

Information gathered thus far indicates LaChandra Armstrong intentionally drove the van into the river. The city Newburgh police are still investigating as we speak today.

(END VIDEO CLIP)

COSTELLO: The death toll is climbing in Libya's war-torn city of Misrata. A doctor there says at least ten killed in heavy shelling. More than 30 wounded. Rebels say the shelling began after their forces killed several government snipers.

And President Obama is meeting with congressional leaders right now to discuss cuts in budget spending and reducing the national debt. The president's speech on the national debt is coming up at 1:35 Eastern.

In just a few minutes, the president -- actually, he's meeting right now with the congressional leaders to talk about deficits and your money. It won't be an easy sell, as you know. We're about to talk to a political veteran and CNN host Eliot Spitzer. How would he approach the tough choices that divide the parties? We're going to get to Eliot right after the break.

(COMMERCIAL BREAK)

COSTELLO: President Obama is just about to sit down with congressional leaders at this hour to discuss your money and the nation's staggering debt. One idea in particular could be a dealbreaker. We've learned that President Obama will again call for an end to those Bush-era tax cuts, even though still some Republicans still say that is non-negotiable.

Let's turn to a political veteran and CNN host Eliot Spitzer. Eliot, welcome!

ELIOT SPITZER, CNN HOST, "IN THE ARENA": Welcome. Good to chat with you, Carol.

COSTELLO: Nice to chat with you, too. Can't wait to hear what you have to say.

So, the president is going to hold this -- will give a big speech at 1:35 Eastern. In just a short time he's going to sit down with congressional leaders and lay out his plan. So, if you were the president, what would you be saying to these congressional leaders who are going to look at you quite skeptically?

SPITZER: Carol, I think you hit on the very critical issue, the divide that's really going to drive this debate. But I would even preface is by saying this: is the president going to seize control of this issue? Until now the budget deficit issue has been run -- the parameters of the debate have been determined by the Republican party. Their agenda in Congress from Bush tax cuts to cutting domestic spending has driven this debate.

The political question and the imperative facing the president is, does he seize control of this by laying out his own blueprint and saying, "I'm the president. These are going to be the proposals, the guide, the debate."? Because once you do that --

COSTELLO: Ah. You said the blueprint word. And a lot of people say the president might lay out this plan with no specifics, and in that way, he loses the political battle.

SPITZER: Absolutely not. He needs to do more than -- by blueprint, I don't mean just a few generalities. Gauzy rhetoric is for the past. He needs to give number, details and say here are the numbers that will add up to confront the issue.

Platitudes will not cut it at this point. But the issue that you hammered on before is exactly right. The Republican party is saying, we will do this by cuts alone. No taxes. Forget the word revenue. Revenue is the way people like to describe it. We're talking tax increases. If the president says tax increases, he's being serious. It he says tax increases for the rich only, he probably isn't going to get there.

We are talking about a need for real revenue over the next 10 or 15 years to make up for the fact that tax cuts over the last 20 years deprived the government of the revenue it needs to pay for all the entitlements and defense spending in that have driven this enormous debt.

COSTELLO: Yes, but here's the thing about those Bush-era tax cuts. I mean, the time to do it isn't exactly right, is it? The Republicans now control the House of Representatives. The president agreed to that two-year extension to keep those Bush tax cuts in place for everyone.

Like, this isn't the time right now, is it? I mean, how can he win this battle?

SPITZER: Well, Carol, that's exactly right. That's why many of us were critical of him last year saying, wait a minute. You controlled both Houses of Congress. Now is the time to put your imprint on the budget. Because the moment you lose elections, which many people saw coming last November, you're going to lose the ability to actually drive through the agenda you want.

But put that aside. That's past. The question is right now if he wants to negotiate from strength, he has to be very clear with the American public what he wants, repeal part of the Bush tax cuts, especially the piece on the wealthy. Do much more dramatic cuts in defense spending than has been on the table. Do entitlement restructuring. Not the way Paul Ryan, the Republican did it, which falls in a way that fell entirely on the poor, but do it in a more broad-based methodology. And be serious about the numbers so the public understands where we're coming from.

Remember, Ezra Klein, a writer from "The Washington Post," came up with a brilliant description of the government. He said, we have an insurance company with an army. So, much of what the government does, Social Security, Medicare, Medicaid, is insurance. We're running a big insurance company, and then we have an army. Those are the only two areas where you can really cut if you're going to be serious. He's got to give details and explain how he's going to do it.

COSTELLO: We'll see in just a couple of hours if he does that. What's on your show tonight?

SPITZER: Absolutely.

You know, we're going to have -- well, look, a lot of critiquing of the president's budget address. You know, kind of odd he's doing it at 1:35 in the afternoon. You'd kind of expect it a primetime speech on an issue this central. But we'll be talking and taking apart his speech, contrasting his proposals with the proposals of the Republican party.

And also taking another look at what's going on over in Pakistan. We've forgotten Pakistan is the reason we're in Afghanistan, and the Pakistan government is saying to our CIA, get out. The whole reason we're in Afghanistan is to deal with the Taliban and al Qaeda in Pakistan, and their security apparatus is saying get out, makes you wonder, what are we doing there in the first place?

That is a thorny issue. We can't forget about that part of the world.

COSTELLO: No, we can't. Eliot Spitzer, thanks for joining us this morning. We'll be watching.

SPITZER: Always a pleasure to chat. Thank you.

COSTELLO: You can see the president's speech on the national debt, by the way, live right here on CNN. It's scheduled to get underway 1:35 Eastern, 10:35 Pacific time.

Could be a sign of the times literally. Look at this billboard. A hospital scorecard to track emergency room wait times. More on that, next.

(COMMERCIAL BREAK)

COSTELLO: Got the time to take care of your medical emergency? A hospital in Bayonne, New Jersey hopes to help you answer your own question by advertising its average wait times for medical treatment. Their hospitals unveiled two new billboards earlier this the week. Bayonne Medical says it's first in the area to alert potential patients of their wait times. But the advertising is part of a bigger trend, because I'm sure many of you in different parts of the country have seen billboards just like that one.

The body of a California man who was swept out to sea while trying to take pictures of last month's tsunami in California has been found. Dustin Webber's body was spotted earlier this month on a beach in Oregon near the Columbia River. That's about 380 miles away from the Del Norte County, California. That's where Webber was trying to take pictures of the tsunami's surge.

(BEGIN VIDEO CLIP)

LORI DAVIS, DUSTIN WEBBER'S MOTHER: I just felt the pain all over again. It was like reliving the minute I found out about the whole accident.

BLAISE BUTCHER, DUSTIN WEBBER'S FRIEND: To have the ocean bring him back to us is almost a godsend in a way.

(END VIDEO CLIP)

COSTELLO: Two friends who were with Webber and also carried out by the surge managed to return safely to the shore.

If Southwest Airlines had a twin brother, if would be Spring Airlines. Spring is a Chinese airline, and its CEO is hoping the no- frills flights and discount fares will fly into China just like they have in the United States with much success. CNN's Stan Grant has more.

(BEGIN VIDEOTAPE)

STAN GRANT, CNN CORRESPONDENT (voice-over): Wang Zhenguhua, knows all about being flexible. This master of tai chi is applying the secrets of the ancient Chinese art to the world of big business.

All the tai chi moves look very gentle, he says, but they contain a lot of inner strength. It's the same running an airline.

Six years ago, Wang launched Spring Airlines, a budget carrier in a booming market. No frills here. The cabin crew double as cleaners. Where else would you find an airline boss loading the luggage? He has no secretary, no mobile phone, a sort of maverick businessman.

(on camera): The Richard Branson of China!

(voice-over): But it's not Virgin, it's America's Southwest Airlines that Wang wants to immolate. Lean, ultra-competitive. Baggage weight limits are set low. Carry more, and it costs. Customers grab food before boarding. On the plane, it's user pays. On-flight sales are a big revenue. Spring Airlines crams 180 seats into their Airbus 30 percent more than its rivals.

(on camera): And you do get what you pay for. I'm over six feet tall, and as you can see, my feet here, my legs are crammed in. There is very little leg room.

(voice-over): But, hey, it's cheap. Fly from Shanghai to Congress ton Hong Kong, about 3 hours, can cost as little as 200 (INAUDIBLE), $30. And it is a winner. Most flights, 95 percent full.

This man certainly a fan. He was passenger number one and is still coming back. Their tickets are cheap, he says, and the service isn't bad.

Work hard, keep it tight. That's Wang's philosophy. He's never had a holiday, works seven day as week, 14 hours a day, 365 days year. Spring has 22 planes flying to 14 destinations, including a cut-price route to Japan. One day, Wang wants hundreds of flights.

It's not going to be easy, though, in a market heavily protected in favor of giants like Air China. I often tell my employees to be grateful, he says. The government has already allowed us into this once-monopolized industry. If they reject an application, we keep an open mind and move on.

Today, Wang's task got a little bit harder. These passengers have been onboard stuck on the tarmac for over two hours. The destination is fogged in; the plane can't get clearance for takeoff. It's beyond screaming airlines' control.

The flight is abandoned, leaving far from happy customers. The airlines offer a hotel and substitute flight. Another business lesson for the tai chi class. Yes, you must bend to stay standing.

Stan Grant, CNN, Shanghai.

(END VIDEOTAPE)

COSTELLO: Tea Party members have been calling for budget cuts, but where would they wield the ax? The answer's ahead in our political ticker.

(COMMERCIAL BREAK)

COSTELLO: We know the Tea Party wants budget cuts. But what exactly does it want? What does it want to take out of the budget? CNN political producer Shannon Travis has written a piece on this for CNN.com, and he's here to tell us. Hi, Shannon.

SHANNON TRAVIS, CNN POLITICAL PRODUCER: Hey there, Carol. That piece is going to be up on the politics page very shortly. I've been talking to a lot of Tea Party groups saying, hey, we've heard all the slogans about stopping spending and tax cuts. But what specifically do you want cut?

A lot of them talk about Medicare, reforming Medicare and Medicaid. But you might be surprised that some of them are talking about cuts to popular government functions, like the Energy Department. Doing away with commerce. Some other things. You'll want to take a read of that piece and look at their explanation for cutting some of those things. Moving on. First lady Michelle Obama and the wife of vice president Joe Biden, Jill Biden, they're going to be teaming up. They're going to four states in two days. The purpose is to draw attention to helping military families. You know, as some of our service members serving overseas, some of their families are stressed at home.

So, Michelle Obama and Jill Biden are going off to these different states. They're going to be in North Carolina and Texas, Colorado and Ohio to draw attention, again to helping military families and they'll be joined by some celebrities like Jessica Simpson, Nick Jonas and Martha Stewart.

One other thing, Carol. I don't know about you, but one of the last thing I want is for a comedian to start tweeting about something I say on TV.

COSTELLO: Oh --

TRAVIS: I know. It's probably -- both of our worst nightmare, but that's what Stephen Colbert is doing for Arizona senator Jon Kyl. Now, really quickly, Jon Kyl last week during the budget negotiations said, the fight over Planned Parenthood, said that Planned Parenthood, about 90 percent of its services are providing abortions. The reality is that only about three percent - that's only about three percent of Planned Parenthood's services. Jon Kyl later clarified in a statement, quote, "that was not intended to be a factual statement."

But a little bit too juicy for Stephen Colbert, who started tweeting last night. If I have a few minutes, I want to kind of read a few things. These are also supposed to be things not intended to be factual statements. "Jon Kyl is an accomplished nude hula dancer. He is not welcome in Hawaii." And one more, "Jon Kyl cheated on Sandra Bullock." So, there you go.

COSTELLO: I think if Stephen Colbert had said them, they'd be funnier. But I'm not dissing you or anything, Shannon.

TRAVIS: Yes, yes. I'm with you, Carol.

COSTELLO: Thank you so much. Appreciate it. 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.

Coming up in the next hour of CNN NEWSROOM with Suzanne Malveaux, are you being charged hidden fees by your bank? A new survey shows half of all branches researched did not reveal certain fees, even though it's now required by law. That and much more in the next hour of the CNN NEWSROOM.

(COMMERCIAL BREAK)

COSTELLO: All eyes are on President Obama this afternoon as he tells the nation how he wants to balance the budget and deal with our children's future. But we're keeping an eye on several other stories as well. Later this morning in Arizona, the judge overseeing the so-called sweat lodge manslaughter trial is expected to hold a hearing for a mistrial. James Arthur Ray's defense team says the state suppressed evidence that shows their client is not guilty.

At 1:00 Eastern in Washington, a House Appropriations subcommittee looks at problems plaguing Arlington National Cemetery, including mismanaged records and mislabeled graves.

And coming up soon, a House Intelligence Subcommittee on terrorism convenes for a relatively rare open hearing. The topic, the Muslim Brotherhood.

Now it's time for Suzanne Malveaux and a continuation of the NEWSROOM.

And I'll be with you shortly to talk about raising taxes on the rich.

SUZANNE MALVEAUX, CNN ANCHOR: OK. Well, I don't know if either one of us qualifies. I don't think so.

COSTELLO: I don't either.

MALVEAUX: All right. Thanks, Carol.

COSTELLO: Sure.