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Sequestration Looms; Hollywood Hosts its Biggest Night; Scandal in the Vatican; White House Turns Up Heat on Republican Lawmakers; Severe Winter Storms in the West; Crash Raises Safety Questions

Aired February 25, 2013 - 09:00   ET

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

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN ANCHOR (voice-over): Happening now in the NEWSROOM, the clock is ticking.

UNIDENTIFIED MALE: It's a terrible way to cut spending.

COSTELLO: Food safety inspectors, air traffic controllers, teachers all staring down cuts as the deadline to reach a budget looms.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Are they seriously prepared to inflict more pain on the middle class?

SEN. JOHN MCCAIN (R), ARIZONA: The president leads. The president should be calling us.

COSTELLO: Plus tires flying, an engine in flames, 28 fans injured, yet the Daytona 500 races on.

UNIDENTIFIED MALE: I just want to reiterate how important our fans are to us as we continue to keep them in our thoughts and prayers.

COSTELLO: Seven people still in the hospital, and track safety questions remain unanswered.

Also, emergency operations are activated as a life-threatening blizzard hits the plains again.

And "Argo" takes home the Oscar.

BEN AFFLECK, ACTOR/DIRECTOR: I think everyone in the movie, on the movie, worked on the movie, did anything with this movie, gets thanks.

COSTELLO: But it was the Oscar crasher that had everyone talking.

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: And the Oscar goes to -

COSTELLO: And Seth MacFarlane, the best or boob? The speeches, the dresses, even the fall.

JENNIFER LAWRENCE, ACTRESS: What went through my mind when I fell down? A bad word that I can't say. COSTELLO: You're live in the CNN NEWSROOM.

(END VIDEOTAPE)

(MUSIC)

COSTELLO (on-camera): Good morning. Thank you so much for being with me this Monday morning. I'm Carol Costello.

We begin this morning with new ripples of a sex scandal jolting the Vatican and the final days of Pope Benedict's rule. This morning, the Vatican says he has accepted the resignation of Scotland's archbishop. Cardinal Keith O'Brien has been dogged by accusations that he abused four men in the 1980s, all of those men studying to become priest.

Now, this news comes as Pope Benedict delivered his final public prayer ceremony and answered the speculation that a scandal may have prompted the first papal resignation in 600 years.

CNN's Ben Wedeman looks at the explosive claims thundering through the Vatican.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SENRIO INTERNATIONAL CORRESPONDENT (voice-over): Reports broken in two leading Italian publications, "La Republica" and "Panorama", suggest his reason for resigning was far more explosive: shock at the discovery of a network of gay priests at the Vatican blackmailed by a network of male prostitutes.

According to the reports, the results of an investigation by three cardinals assigned to look into wrongdoing at the Vatican were submitted to Pope Benedict on December 17th last year. The report say the dossier also suggests serious financial improprieties within the Vatican, amounting to violations of the sixth and seventh commandments, "Thou shalt not steal," and "Thou shalt not commit adultery."

Benedict was so shocked by the investigations findings, the publications alleged, he decided to resign. The Vatican has responded with uncharacteristically strong language, saying these, quote, "unverified, unverifiable, or completely false news stories caused serious damage to persons and institutions," and are an "attempt to use public opinion to influence the cardinals' free will" in the election of a new Pope.

Cardinal Velasio de Paolis will take part in that election, the conclave, and urges caution before credulity. "We cannot say that things that are only guesswork or imagination are true," he told me. There is no proof and these allegations only serve to create a climate of division that helps no one.

But CNN Vatican analyst John Allen sniffs some truth in the allegations.

JOHN ALLEN, CNN SENIOR VATICAN ANALYST: And to date, none of us have actually seen this secret report delivered by the three cardinals to Benedict XVI, so it's impossible to say precisely what it contains. On the other hand, the core claim of this story that the cardinals looked into the possibility that there might be a network of gay clergy inside the Vatican who were vulnerable to pressure, to me, that passes the smell test.

WEDEMAN (on-camera): There may indeed be something rotten in the state of the Vatican.

Ben Wedeman, CNN, Rome.

(VIDEOTAPE)

COSTELLO: OK, so let's bring in our senior Vatican analyst John Allen. Just so many ugly things coming out. How can they possibly choose someone who's untainted to be the new Pope?

ALLEN: Carol, I think you put your finger on it. Clearly, prior to these scandals erupting, the cardinals had a long checklist of things they were looking for in terms of the new Pope. -- I mean, somebody who could take the church's message to the world, somebody who could inspire faith among the 1.2 billion Catholics around the world. But in the wake of everything's that's happened in the last 72 hours or so, quite clearly a new item is on that list, which is they also want make sure they pick somebody who's got clean hands, that is, who is not carrying baggage with respect to the various scandals that are swirling in Rome in these days, Carol.

COSTELLO: I think the only answer is to choose a nun. And I'm kidding about that, John.

ALLEN: Yes, unfortunately, among the 115 people who are going to be in the Sistine Chapel, there aren't going to be any nuns, Carol. That's part of the problem.

COSTELLO: All right, John Allen reporting live from the Vatican this morning.

Now let's head to Washington, where the clock is ticking and the hopes of avoiding forced spending cuts are fading fast.

This morning, the White House turning up the heat on Republican lawmakers by showing everyday Americans how the impact would hit their state. Take Ohio, for instance. The White House says it will lose more than $25 million in funding for primary and secondary education. In Texas, defense cuts could force more than 50,000 civilian employees to be furloughed. And even victims of domestic violence won't be protected from the automatic slashing of federal spending. The White House says Pennsylvania, for example, would lose more than $250,000, costing domestic violence services to some 1,000 victims.

Jake Tapper is anchor is "THE LEAD" and CNN's chief Washington correspondent. He joins us now from D.C.

OK, Jake, so a lot of people even in our own newsroom are shrugging this off, saying oh this is standard operating procedure. It's brinksmanship. None of these cuts are going into effect because at the very last minute, as always, lawmakers will manage to come up with a deal or kick the can down the road.

JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDNET: I don't know if that's the case this time, Carol, I have to say. First of all, as we've had a few of these situations where these horrible deadlines are coming, and then we've seen what's happened is, as we've gone in time, we've actually now found that Congress is very good at hitting the deadlines and not making what needs to be done. We saw that with the sequester cuts and the Bush tax cuts of December 31st, January 1st. Remember, we did not make that deadline.

And for this one, I have to say, both sides seem relatively pessimistic that anything is going to be accomplished. That's not to say there's not some secret talk going on between the vice president's office and either Mitch McConnell or Eric Cantor in the House. But right now, people I speak to, informed sources, say they expect these cuts will, in fact, take effect on March 1st.

COSTELLO: Maybe Congress needs a nun too. I'm just kidding. We hear about these forced cuts, and I just enumerated some of them, but some Republicans say these cuts are exaggerated. Is there any way to really know?

TAPPER: Well, I think most of them are not exaggerated, but some of them seem to be. Most of them are just factual. These cuts, remember, were designed to never take effect. They were supposed to be a threat, so hey were created to be as draconian and unappealing as possible. So most of the threat is real.

On the other hand, for instance, when the defense -- I'm sorry, when the Transportation Secretary, Ray LaHood, was out there talking about all the long lines that were going to take effect and such and all the cutbacks to the Federal Aviation Administration, it is an inconvenient truth that, even with the cuts, the budget next year will be bigger than the budget next year.

So some of this seems designed to have a scare factor. But for the most part, I think the threats are very real.

COSTELLO: OK. I know you're on tap for a long, long week. Jake Tapper, thanks so much.

TAPPER: Thanks, Carol.

COSTELLO: A new winter storm bearing down on the plains could be worse than last week's storm. Blizzard warnings are now up in four states. Kansas already has activated its emergency operations center because some areas could see one to two feet of snow. Keep in mind, many people in the region are still digging out from a massive storm that hit them just four days ago.

This new storm has already left Colorado after dumping more than a foot of snow. CNN's Jim Spellman is live in Denver this morning. Good morning. JIM SPELLMAN, CNN CORRESPONDENT: Good morning, Carol. This was the storm that would not end. All day yesterday, hour after hour, the snow came down. They're digging out now. They've had crews out all night getting the roads clear. And they're doing pretty good. You can see some of the main arteries are flowing pretty well.

But it's a different story on a lot of the side streets. Take a look over here. They've already plowed this several times, and there's this layer of ice that's under a lot of this snow. We've seen cars coming down here, spinning out. That's the story we're hearing about a lot of the side streets.

It's very rare in Denver, even though we get a lot of snow, to plow the side streets. This year, because of this ice, they've got 120 pickup trucks with snow plows on the front trying to get these residential streets cleared out. Usually we get that powdery Colorado snow; this has that layer of ice that's making it really tough on some of the side streets, Carol.

COSTELLO: Oh, it sounds cold. Jim Spellman reporting live from Denver, Colorado, this morning.

It's nine minutes past the hour. Time to check our other top stories. Chuck Hagel could be confirmed as the next Defense Secretary this week. His nomination has been held up several weeks, as you know, as some GOP senators push the White House for more answers on the September 11 Benghazi attack. Senate's expected to vote tomorrow to end a GOP filibuster, or delaying tactic, on the nomination.

The Afghan government wants U.S. special forces out of a province west of Kabul within two weeks. It accuses member of the American elite military unit of torturing and killing innocent people. The U.S. military says it is investigating these accusations.

Former White House press secretary Robert Gibbs says he was told not to discuss or even to acknowledge the controversial drone program when he became the Obama administration's chief spokesperson. Here's what he told MSNBC.

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ROBERT GIBBS, FORMER WHITE HOUSE PRESS SECY.: I think in many ways, and I think what the president has seen, and I have not talked to him about this, I want to be careful - this is opinion. But I think what the president has seen is our denial of the existence of the program, when it's obviously happening, undermines the people's confidence overall in the decisions that their government makes.

(END VIDEO CLIP)

COSTELLO: The administration did not formally acknowledge the program that's targeted terrorists and countries like Pakistan and Yemen until last April.

OK, so everyone in the entertainment world and, of course, outside of the entertainment world are talking about "Argo" today. But the surprise was not that the film won an Oscar; it won three, including for Best Picture.

And what's a good movie without good music? For the first time, actors shared the spotlight with the Academy in celebrating music in the movies.

Here's Nischelle Turner with the highlights.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Hey Carol. Yes, the 85thd Oscars definitely had a little something for everyone. There was definitely music. There were some mishaps. There were lots of memorable moments.

(BEGIN VIDEOTAPE)

MICHELLE OBAMA: And now for moment we have all been waiting for.

TURNER (voice-over): First Lady Michelle Obama gave the Oscars a jolt of excitement and a huge surprise when she appeared from the White House to announce the night's biggest prize, Best Picture.

OBAMA: And the Oscar goes to "Argo."

TURNER: It was an especially sweet victory for Ben Affleck, who wasn't even nominated for directing the Iranian hostage thriller.

AFFLECK: I thank everyone in the movie, on the movie, worked on the movie, did anything with this movie.

TURNER: "Life of Pi", based on the best-selling novel about a boy adrift at sea with a tiger, won the most Oscars, four including Best Director for Ang Lee.

ANG LEE, DIRECTOR: Thank you, Academy. Xie-xie. Namaste.

TURNER: He played one of the greatest presidents in history, and Lincoln's leading man, Daniel Day Lewis, made history of his own becoming the first male actor to win three Oscars.

DANIEL DAY LEWIS, ACTOR: I'm so grateful to the academy for this beautiful honor.

TURNER: She took a tumble heading to the stage, but everyone else was on their feet when "Silver Linings Playbook's," Jennifer Lawrence won for Best Actress.

LAWRENCE: You guys are just standing up because you feel bad that I fell and that's really embarrassing.

SETH MACFARLANE, OSCARS HOST: And the quest to make Tommy Lee Jones laugh begins now.

TURNER: Host Seth MacFarlane struck a cheeky tone from the beginning, skewering stars and poking fun at himself during a visit from Captain Kirk.

MCFARLANE: Seth MacFarlane worst Oscar host. It's that bad? TURNER: Music though was the theme of the night and the show boasted full-throated performances from the cast of "Chicago," "Dream Girls" and "Les Miserables."

And music was the memorable part of Oscar's 50th anniversary tribute to James Bond. Shirley Bassey got a standing ovation after belting out "Goldfinger."

While chart topper Adele sang the latest 007 theme, "Skyfall," which won the Oscar for Best Song.

Barbara Streisand returned to the Oscar stage to sing "Memories" and indeed the night's biggest winner remembered his last time earning Oscar gold.

AFFLECK: I was here 15 years ago or something, and I went out and I never thought that I would be back here, and I am. And it doesn't matter how you get knocked down in life because that's going to happen. All that matters is that you got to get up.

(END VIDEOTAPE)

TURNER: Pretty good night for Oscar host Seth MacFarlane, seeing some mixed reviews this morning. A lot of people saying they felt he was even better than Billy Crystal last year, but there were also some people that felt like he landed on the sexist side, and I think that's because of that song that everyone will be talking about today.

Carol, back to you.

COSTELLO: She means the boob song. We're going to talk more about that a little later on in the NEWSROOM.

The Daytona 500 race is on, even as seven people lie in a hospital, injured by flying car parts and Saturday's huge horrific crash. Now new questions about what can be done to protect fans.

(COMMERICAL BREAK)

COSTELLO: Seventeen minutes past the hour. Time to check the top stories.

As Pope Benedict plans to retire on Thursday, CNN has learned he has accepted the resignation of Scotland's archbishop. Cardinal Keith O'Brien accused of abusing four men studying to be priests. A newspaper reports the allegations date back 30 years.

We're told O'Brien is contesting the claims. He's now seeking legal advice.

Also this morning, police in Vegas still searching for Ammar Harris. He's the man wanted in connection with Thursday's shooting and fiery crash that killed three people on the Las Vegas strip. Police say an aspiring rapper was shot as he drove along the Vegas Strip. His car crashed into a taxi, causing an explosion. The rapper, the cab driver, and a passenger in the taxi all killed. An Army of lawyers for oil giant BP and the federal government getting ready to battle it out. The trial is getting under way in this hour in New Orleans as BP tries to limit the civilian penalties it must pay out for the worst oil spill in U.S. history. The outcome could mean the difference of billions of dollars.

Now, let's go to Daytona Beach, Florida, where racing history is made and the future safety of the sport is under serious review.

First, the checkered flag. Jimmie Johnson fought back a crowded field and captured a thrilling win at the Daytona 500. It is the second time he's landed in victory lane here.

In the meantime, Danica Patrick finishes eighth, but she's getting her own time in the spotlight. It's the highest finish for a female driver in the history of the race.

But much of Sunday's focus was overshadowed by this spectacular crash the day before. We're going to see it in just a minute.

We're having tape problems. I'm sure you've seen it. There it is.

At least 28 fans were wounded by flying debris when a car went airborne and slammed into a safety fence. Today, there are questions whether more needs to be done to protect the crowds because two fans are still in the hospital in serious condition.

Let's turn to someone who knows the race world from the inside out. Lars Anderson is the main motor sports writer for "Sports Illustrated." He joins us via Skype from Orlando.

Good morning, Lars.

LARS ANDERSON, SENIOR WRITER, SPORTS ILLUSTRATED: Good morning.

COSTELLO: First of all, let's start with the coverage, because you wrote that NASCAR and its television partner ESPN did a poor job of handling this accident. Tell us why.

ANDERSON: Yes, I just thought, given the fact this is the most significant crash in the history of the nationwide series, that we certainly deserve to -- viewers deserve to see the crash itself more than just one replay, and I'm not talking about showing the carnage of the fans, but just trying to get an analysis of what happened in that crash. I think viewers deserve more than that.

COSTELLO: I actually think viewers deserved also to see the carnage in the stands so they could know exactly how serious this was.

ANDERSON: Yes, I talked to a bunch of fans who were sitting right there, and I talked to them about 18 hours after the incident, and they were still visibly shaking. One fan showed me -- he was shooting video of it, and his hands were trembling as he was showing me the video. But that fan also told me that he planned on going back and sitting there for the Daytona 500. But, still, like you said, that crash it was -- more fans were injured in that crash than any in the history of NASCAR, as far as I can tell from my research, and I know that NASCAR is going to have structural engineers come and look at the fence and analyze what could have happened.

But really, a fan assumes risk when they go to a NASCAR race, and especially when they sit so close to the fence.

COSTELLO: Yes, fans do assume a risk, but NASCAR also has the responsibility to protect the people coming to their race. It's not like this hasn't happened before.

2009, a last lap crash at Talladega sent Carl Edwards into a catch fence. In that wreck, eight people were injured. I mean, is it time -- you got into this a little bit. The structure of that fence should be examined.

But also this most recent accident happened when one car cut of a faster car to block it from winning. That's what caused the whole thing. Maybe that needs to be eliminated from the race as well.

ANDERSON: No, exactly. I talked to a bunch of people in the garage this weekend. And that is one thing that NASCAR should look at, when -- especially in the last restrictor plate races, where because of restrictor plates that are placed in the carburetors that keep all the speeds at 195 miles an hour. So that causes all the cars to travel in tight packs.

So when there's a car coming, a faster car coming, it's these blocks that are causing these massive last lap wrecks. So, if NASCAR really wants to legislate against this, they should suspend a driver for a week or two or three if he does, in fact, block something like that.

I think that is something that NASCAR will examine here in the near future.

COSTELLO: I just think it must because it's easy to say, oh, the fans go to the race. They're at their own risk. They choose to sit there. But what if someone died, and someone could have died on Saturday.

ANDERSON: Absolutely. What's really scary is the catch fence actually did its job for the most part. It kept the vehicle out of going into the stands. You have the rarity here where a tire flew over into the stands. If that tire -- if the tire got wedged in a seat, but if the tire had kept on bouncing, there's no telling how many people could have been injured or even killed.

And NASCAR is quite lucky that no one lost their life on Saturday.

COSTELLO: Lars Anderson from "Sports Illustrated" -- thanks so much for joining us this morning.

ANDERSON: Thank you.

COSTELLO: Talk back question today. Did Seth MacFarlane hit or miss at the Oscars.

Facebook.com/CarolCNN, or tweet @carolCNN.

(COMMERCIAL BREAK)

COSTELLO: Now is your chance to talk back on one of the stories of the day. The question for you this morning: Did Seth MacFarlane hit or miss at the Oscars?

The reviews are in, and some are not kind. As critic Tom Shales said of the Oscar audience, "Listen: a billion people are throwing up."

But then again, even in the moment, MacFarlane expected it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This a newspaper headline from tomorrow morning.

SETH MACFARLANE, OSCAR HOST: Seth MacFarlane, worst Oscar host ever. Is that bad?

UNIDENTIFIED MALE: Uh-huh, uh-uh, uh-huh.

(END VIDEO CLIP)

COSTELLO: If only Captain Kirk had beamed down, maybe we would have commanded -- maybe he would have commanded MacFarlane not to sing the boob song backed up by the L.A. gay male choir.

(VIDEO CLIP PLAYS)

COSTELLO: Hey, ABC's goal was to attract more young male viewers who were not remotely interested in red carpet fashion and Broadway-esque show numbers. But we heard jokes about boobs, domestic violence and bulimia. Kind of sad really because MacFarlane is really talented. He can sing, dance, dazzle, but his jokes meant to be edgy, left one critic crying, "Four hours of unfunny."

(BEGIN VIDEO CLIP)

MACFARLANE: The actor who really got inside Lincoln's head was John Wilkes Booth. A hundred and fifty years, and it's still too soon, huh? I've got some Napoleon jokes coming up.

(END VIDEO CLIP)

COSTELLO: Maybe Oscar should figure out what it wants to be before choosing its next host. Does it want to be an awards show, a comedy, a variety show, classy, edgy? For goodness sake, choose something. Then maybe a talented guy like Seth MacFarlane can be himself.

Talk back question for you, did Seth MacFarlane hit or miss at the Oscars? Facebook.com/CarolCNN, Facebook.com/CarolCNN, or tweet me @carolCNN.

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