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Three Days Before Budget Cuts; Restaurants Could Feel The Hit; Texas Drivers Stuck For Hours; Jimmie Johnson Talks Racing; Safety Concerns For NASCAR Fans; Hot Air Balloon Explodes, Killing 18; Reports: Census Drops Offensive Word; Home Prices Jumped 7.3 Percent In 2012

Aired February 26, 2013 - 10:00   ET

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

UNIDENTIFIED MALE: -- go to bleacherreport.com. You can to that kind of flip entering the studio, I know.

CAROL COSTELLO, CNN ANCHOR: Every day and you're always amazed that I can do that sort of thing.

UNIDENTIFIED MALE: Yes, always impressive.

COSTELLO: Thanks, Vince. The next hour of CNN NEWSROOM starts now.

Happening now in the NEWSROOM, from Capitol Hill to your local diner, how forced spending cuts in Washington could have a direct impact on the price you pay for groceries and your next meal out.

Plus a blizzard for the history books.

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UNIDENTIFIED MALE: This one could be much more treacherous to travel in.

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COSTELLO: Snow falling horizontally in Middle America this morning.

And fresh off his second Daytona 500 win, we're talking live to Jimmie Johnson about his NASCAR dominance, the accident that injured dozens of fans at the speedway, and Danica Patrick's star power.

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UNIDENTIFIED MALE: Domination of Danica being involved, an exciting Daytona 500. NASCAR is off to an amazing start this year. You're live in the NEWSROOM.

Good morning. I'm Carol Costello. Thank you so much for being with us. Three days and counting until the government's forced spending cuts are due to kick in. Right at this very moment, the House Speaker Republican John Boehner is giving some remarks and we assume it's about those budget cuts. Let's listen.

(BEGIN LIVE FEED) REPRESENTATIVE JOHN BOEHNER (R), HOUSE SPEAKER: -- traveling all over the country and today going down to Newport News in order to use our military men and women as a prop in yet another campaign rally to support his tax hikes.

Now the American people know the president gets more money, they are just going to spend it. The fact is that he's gotten his tax hikes. It's time to focus on the real problem here in Washington and that is spending.

The president has known for 16 months that this "Sequester" was looming out there when the "Super Committee" failed to an agreement. And so for 16 months, the president has been traveling all over the country holding rallies instead of sitting down with Senate leaders in order to try to forge an agreement in order to move the bill.

We have moved the bill in the House twice. We should not have to move a third bill before the Senate gets off their ass and begins to do something.

REPRESENTATIVE ERIC CANTOR, HOUSE MAJORITY LEADER: Good morning. As speaker said, the president will be it Newport News, Virginia and talking to families in the commonwealth. I'm concerned because their concern about their future and the uncertainty, which looms because of this sequester.

The president has said, well, he wants to compromise, but if you take a look at what's going on, there's been four years of spending increases and now the president says we can't have any progress on the sequester unless we get the second tax hike in eight weeks.

That's not compromise. Then he says your choice is going to be taking criminals -- letting criminals out of jails and on to the streets or give me a tax increase. That's not compromise. That's a false choice.

We have tried in the House as the speaker said, again, to bring forward measures that actually accomplish reform and cut spending. We've even taken things that the president had in his very own budget to say please join us and he won't accept those proposals unless we raise taxes.

Now it's time for the Senate to come together with us. Sit down with the president. Let's get this resolved for the American people.

(END LIVE FEED)

COSTELLO: All right, we're going to step away from this. Dana Bash is monitoring it. When this press conference is over, we'll go to Dana Bash live on Capitol Hill and she'll talk about that and parse things out. The Republicans are right. The president is in Virginia this morning.

He will be talking to people about how those forced budget cuts are going to be affecting the state of Virginia's economy as in furloughs and layoffs of defense workers and military personnel in the state of Virginia.

Also each day this week, we're going to go pass the politics and take a closer look at how those forced spending cuts will impact every day Americans. Today, we're focusing on the possible rise in food prices and the effect on small restaurant owners.

Agriculture Secretary Tom Vilsack is warning. It could amount to less food being available. A shortage of chicken, egg, pork, and beef, and he says prices for those items could increase.

Jennifer Levison owns two small restaurants here in Atlanta. Thank you so much for joining us. OK, so you heard some of what John Boehner and Eric Cantor were saying. As you were listening, what went through your mind?

JENNIFER LEVISON, OWNER, SOUPER JENNY: Nothing looks pretty. It's going to be bad either way. I think food prices -- it's not just chicken and beef as you said. It's across the board. Everything is on the rise and definitely people in small businesslike myself, I can see it right away. Even though they are saying it's not going to happen until the later in the year, I can see --

COSTELLO: When you hear politicians talking this way, calling the other side, you know, they are not doing anything and the other side -- doesn't it drive you insane?

LEVISON: It drives me totally insane. I don't want to -- I can't understand the budget cuts, but when you really start to look at what's going to be cut like food inspection services. That is a little scary.

COSTELLO: How will that affect your business as far as the pricing goes?

LEVISON: I'm hoping that, you know, we're going to hold steady on our prices for as long as we possibly can because that's my commitment, you know, to my customers. But it defends how far it goes. You might be forced to raise your prices, but I also have to say I think it's a great educational opportunity for people to learn about where their food comes from.

COSTELLO: Such a glass half full look.

LEVISON: That's right.

COSTELLO: So because there won't be like inspectors for beef might be furloughed, that means there might not be enough beef available to supply in your restaurant and eventually if that last long, you're going to have to pass the price on to consumers.

LEVISON: Absolutely and you're going to have to buy more expensive product and it is going to have to be passed on sooner or later.

COSTELLO: So when you hear politicians saying, you know, these forced spending cuts really won't have the impact that everybody is saying they will. Do you believe that? LEVISON: I want them to slap on an apron and start working with the people in the fields, seeing really what's happening, you know, in the communities.

COSTELLO: OK, so I'm going to talk to you as a voter because somebody votes these people into office, right? I mean --

LEVISON: Yes, but I think it's still everyone's responsibility. I think both sides did this. I can't believe I said that.

COSTELLO: So you blame the president and Republicans.

LEVISON: I blame everybody.

COSTELLO: That's probably a good way to go these days. Thank you so much, Jenny, for coming in this morning. And again, we'll get to Dana Bash as soon as that press conference winds up and she'll parse what John Boehner and Eric Cantor had to say about the president's trip to Virginia today.

Now let's turn to the weather in the central part of our nation and that ferocious storm the National Weather Service is calling a crippling, historic blizzard. How crippling? Well, this is the view of one truck driver trapped on Interstate 40 near Groom, Texas.

He was stranded for nine hours in what he calls the worst snowstorm he's ever seen up to 20 inches of snow from Texas to Illinois. In many places the misery is measured in feet. Winds are whipping up wicked snow drifts and even paralyzing emergency crews.

In Oklahoma, firefighters bogged down in a four foot drift and snow plow sent to free them got stuck, too.

Five-time NASCAR champ Jimmie Johnson notches another big victory. The guy in the 48 joins us to talk to us about his Daytona 500 win. Plus we'll ask him about the impact of Danica Patrick's star power and of course, fan safety. Jimmie coming your way next.

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COSTELLO: Our new talk show, "Talk Back" is just about 20 minutes away. We're discussing three hot stories making headlines. One of today's topic, Yahoo!'s decision to make telecommuting workers come to work.

Yes, the company's new CEO is revamping company culture telling employees they now have to physically come to the office. They can no longer work at home. "Talk Back," is Yahoo! wrong to end telecommuting? Join the conversation now, facebook.com/carolcnn or tweet me @carolcnn.

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COSTELLO: Danica Patrick may have gotten most of the pre-race publicity at the Daytona 500, but it was Jimmie Johnson who got the checkered flag. Johnson winning the race for the second time in his career and his 400th Sprint Cup start.

Jimmie Johnson is in New York. He joins us now. Congratulations.

JIMMIE JOHNSON, NASCAR DRIVER: Thank you.

COSTELLO: You're welcome. So how does Sunday's win rank against your other wins on the circuit?

JOHNSON: The Daytona 500 is unlike any other race and my win in 2006 was before I had a championship and gave me a title of Daytona 500 winner. And this win in general is like a championship and it's very special to me, a very big day for my sport.

I think we debuted this car in fine fashion. Big headlines for Danica in the race for doing such a great job and you know, just great racing all day long.

COSTELLO: Let's talk about Danica. Because I was watching the race and she was the first person to be interviewed and I kept thinking, I might be little miffed if I'm Jimmie Johnson.

JOHNSON: No, no reason to be miffed. We have a great sport and I'm happy she's chosen to race in NASCAR and she certainly showed on the race Sunday that she's very comfortable for this style of racing. I think there'll be some lad a legitimate shot to win and there are three more plate races through the year that I think she'll shine out.

COSTELLO: But you still want to beat her, right?

JOHNSON: I want to beat everybody. It doesn't matter.

COSTELLO: Exactly. I want to talk about the accident that happened. When you were driving in the race, were you aware that fans had been hurt in the stands?

JOHNSON: Well, that accident was actually on Saturday's race and I was sitting in my bus in the in-field and I heard the explosion. And then the television broadcast caught up to things and I saw what took place and what a frightening moment.

And there still are some people dealing with some serious injuries and I want to want them a speedy recovery, but our fans are very dedicated to our sport. They came and showed up for the Daytona 500 and still sat in those eats. And I do know that NASCAR and the tracks will do everything in their power to keep the fans safe.

COSTELLO: What do you think should be done?

JOHNSON: Well, I mean, to a certain degree, you have to be realistic about it here. Cars are traveling at 200 miles an hour and if they are thrown up into the catch fence, bad things can happen. There is a level of risk there.

The catch fence did its job. It kept the race car from going into the grand stands. NASCAR will learn from this and we will evolve that tent system and try to make it safer for the fans yet, but it is a freak accident. Fortunately, everybody is doing better and hopefully going to recover fully from it.

COSTELLO: The way the accident happened, one car blocked a faster car and that started a chain reaction accident. Should that type of blocking be banned from racing?

JOHNSON: No, the real truth of the matter is when we go to these big tracks, NASCAR as implemented a ton of safety measures to keep this from taking place. And the "Restricter" plate was put on to keep the speeds down so the cars would not fly in the air.

We have an accident with Bobby Alison that created the "Restricter" plate. The car went up in the fence and a very similar thing happened. There was other contact that took place that sent the car airborne.

But when we race on these "Restricter" plate tracks, we run in the big pack. It's what the fans want. The fans want to see the big crashes. Unfortunately, car was put up into the air and the fence and put fans in harm's way.

COSTELLO: Have you been able to talk to any injured fans?

JOHNSON: I personally haven't. I've reached out to NASCAR and asked how I could help support and you know, sent my thoughts out. Just talk about everybody. They are fans. They are watching -- some attended the race. I saw some of the injured were wearing my 48 attire. So I'm thankful that they're my fans and that they're all right.

COSTELLO: All right, well, congratulations again and thanks for talking with us this morning. Jimmie Johnson.

JOHNSON: Thank you.

COSTELLO: We'll be right back.

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COSTELLO: It's 18 minutes past the hour. Time to check our top stories, in Egypt, the death toll is climbing after a harrowing crash of a hot air balloon. In all 18 people died when the tourist ride crashed near Egyptian City of Luxor. Witnesses say the balloon somehow exploded and plunged nearly 1,000 feet to the ground.

Somehow three people aboard the balloon managed to survive. These are images from freelance photographer, Christopher Michael. He was in a nearby balloon when the tragedy unfolded. Last hour, he told us he heard the explosion and watched helplessly as it fell from the sky.

You're looking at live pictures of the Senate Finance Committee in Washington. In just about 15 minutes, they're expected to vote on the nomination of former White House Chief of Staff, Jack Lew for treasury secretary. Lew faced some tough questions during his confirmation hearing when Republicans focused on his experience at Citigroup during the 2008 financial collapse. The U.S. Census reportedly will stop using the word "Negro" in it surveys. Research shows most people no longer identify with that term and actually find it quite offensive. The bureau will now use black or African-American.

GM reportedly will begin selling 4G AT&T wireless connections next year on most of its 2015 models. GM hopes the high speed connection will offer drivers new services. The deal ends a long relationship GM had with Verizon.

Michelle Obama's toned arms were apparently a little too exposed during the Oscars for an Iranian news agency. So they Photoshopped some sleeves on the first lady when she presented the Oscar for best picture "Argo," a film about the covert operation to rescue six Americans during the Iranian hostage crisis.

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COSTELLO: We've got two new numbers out this morning on home prices and new home sales. So let's get right to our business correspondent, Christine Romans. I'm ready --

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: They are strong. New home sales, Carol, very, very strong, the month of January saw new home sales up a very strong, almost 29 percent compared with a year ago. That's a good number. That means at the beginning of the year, people want to shell out the big bucks for a new home were willing to do it.

And the pace of new home sales, Carol, the fastest we've seen since July 2008. Most of us live in existing homes. That's the bigger part of the market so what's happening with prices. Well, a Case-Shiller index report a little more than an hour ago found home prices, Carol, last year, end of the year up 7 percent compared with the last year.

I want to show you this chart, you know I love charts. The last three bars on that chart, really important. That shows the recovery in home prices. That means your biggest asset investment debt, whatever you want to call it, the prices are recovering.

It depends on where you live, in Atlanta, very, very good year for home prices. In Detroit, look at these places in the country, Minneapolis have 12 percent home prices, San Francisco up 14 percent, this is year over year.

Vegas, Phoenix, they had total collapses in home prices. Now they're coming back. Take a look at New York, Carol, where I'm sitting, basically stayed steady last year. But you're seeing improvement in sales, in prices around the country.

COSTELLO: And just quickly, that means good things for our economy, right?

ROMANS: Well, yes, it means money is moving and this is one thing Washington hasn't screwed up, I will say. They've had their hands off the housing market and the housing market starting to come back. Fed is keeping interest rates low. Mortgage rates are a real driver of this. Slowly recovering job markets, fewer foreclosures and fewer homes for sale in general mean that products coming on the market to use a very real estate term, product comes on the market and goes on off very quickly if it's priced well. So there you go, Carol, some good news on housing.

COSTELLO: Especially for those of us stuck with one that we couldn't sell like me.

ROMANS: Carol, this is going to be your year, my dear.

COSTELLO: I hope so. I want to get rid of that thing. Thanks, Christine. We appreciate it.

Coming up next, our special talk back show, hot topics, hot conversation and of course your comments, first question, who do you believe when it comes to forced spending cuts?

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COSTELLO: Welcome to our new half hour show, "Talk Back," three hot topics, great guests, your comments. First "Talk Back" question, who do you believe when it costs to forced budget cuts? Just minutes ago, House Speaker John Boehner held a news conference and he had some choice and quite colorful words for the Senate.

CNN's Dana bash was front and center. Tell us what he said, Dana.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You know, at this point, it is all about what they call here in Washington messaging. And that's why this card was handed out to members of the House Republican caucus, going through some of the bullet points they think is the most powerful.

Not if these forced spending cuts go into effect, but when. And when it comes to messaging, as you said, the speaker did have colorful words for the Senate.

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BOEHNER: For 16 months, the president's been traveling all over the country holding rallies instead of sitting down with Senate leaders in order to try to forge an agreement over there in order to move the bill. We have moved the bill in the House twice --