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Chuck Hagel Confirmed for Secretary of Defense Post; What Determines the Price of a Gallon of Gas?

Aired February 27, 2013 - 04:00:00   ET


CARL AZUZ, CNN ANCHOR: It`s Wednesday, I`m Carl Azuz. This is CNN STUDENT NEWS. Just a few minutes, we`re going to explain how musician can make money off of viral video. First of all, we are taking a look inside President Obama`s cabinet. These are the president`s top advisers who run different parts of the U.S government. Getting into the cabinet is a two step process. Step one, the president has to nominate you, step 2, the U.S. Senate has to confirm you. The Founding Fathers gave the Senate that power in the Constitution. It`s called advice and consent. Chuck Hagel has been on both sides of this process. He served two terms in the Senate, now he`s President Obama`s pick to be the new U.S. Secretary of Defense. Yesterday, he was approved by the Senate for that job. The vote was originally set for a couple of weeks ago, but there were some controversy around Hagel because of some of the things he`s said in the past. His confirmation vote was delayed by a filibuster. It`s a legislative tactic that`s used to block and delay action, and if you`ve studied up on this, it happens only in the Senate. The U.S. House of Representatives doesn`t have a filibuster.

And this is how it works: the Senate allows for unlimited debate. In order to filibuster something, a bill, a vote, whatever -- once the Senator is given the floor, he or she just keeps it. You don`t even have to talk about the issue that`s being delayed. Originally senators had to actually talk when they wanted to filibuster. The record for that belongs to former South Carolina Senator Strom Thurmond. In 1957, he went for more than 24 hours. Now, you don`t need to speak continuously in order to filibuster. What you need if you want to end one, is 60 votes. It takes three fifths of the Senate. To end that debate and the filibuster. Yesterday, the vote to end the debate on Chuck Hagel`s confirmation was 71 to 27. That`s stopped the filibuster, and opened the door for the vote on Hagel to be the new U.S. Secretary of Defense.


UNIDENTIFIED FEMALE: What`s the word: it`s an adjective that describes natural or raw oil before it goes to the refining process. Crude. That`s the word.


AZUZ: When gas prices make you want to scream, try not to deafen the guy in the convenience store. It`s not usually his fault. Store mark up barely adds to the price of gas. If you really want to blame someone, you could blame OPEC. The Organization of Petroleum Exporting Countries, a group of 12 nations, has a significant influence on the cost of crude oil.

For every dollar you spend on gas, crude takes the biggest chunk -- about 72 cents. The second largest factor in the price -- taxes. The U.S. federal government has a tax on every gallon bought. So do state and local governments whose taxes depend on where you live. They all add up to approximately 13 cents on every gas dollar. Unfortunately for drivers, we can`t just take oil from the ground, filter out the dirt and stick it into our gas tanks. We`ve got to pay for the cost of refining, the process of turning crude into actual gasoline. That covers about eight cents on our rapidly shrinking dollar. And then, actually getting gasoline to stations and maybe throwing in an advertisement here and there makes up seven cents on the buck. Now, all that adds up to a dollar, 100 percent of the cost of gas. So you can see how an actual filling station has practically no influence on the price. It does get a cent or two, but if you go inside and buy a drink and a donut, that helps keep their business fueled.

Thanks to the Oscar nominated movie "Lincoln" there has been some talk lately about the 13th Amendment, which abolished slavery.


DANIEL DAY-LEWIS, ACTOR: Settles the fate for all coming time, not only of the millions now in bondage, but of unborn millions to come.


AZUZ: The movie sent one man on a hunt for Mississippi`s role in the 13th Amendment. The amendment was ratified in 1865, but Mississippi didn`t officially sign on until this year. Except Mississippi lawmakers did ratify the 13th in 1995. The Mississippi`s Secretary of State`s office never sent the paperwork to Washington.


KEN SULLIVAN, UNIV. OF MISSISSIPPI MEDICAL CENTER: I don`t think there was any dark plot or any -- any kind of a plan to not get this done. I think it was just an error, and I`m just glad that it`s corrected.

AZUZ: 18 years later, Mississippi`s vote is officially on the books.

RANJAN BATRA, RESEARCHER, UNIV. OF MISSISSIPPI MEDICAL CENTER: What I`ve done or Ken has done is really just dotting an "i" or crossing a "t". But I think -- I think it`s an important "I` to dot and in important "t" to cross.


AZUZ: Over in Europe, scientists are testing food samples. They are looking for traces of horse meat and products that were labeled as beef. Officials are conducting investigations about this, companies are pulling products off the shelves. Some consumers are buying and eating less meat. A lot of people have been affected by this scandal, but farmers may turn out to benefit.


NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: The family`s focus -- quality food close to the customer. Husband Mike helps butcher the beef when it comes back from the abattoir.

MICHAEL BELCHER, FARMER: The supply chain is so small and we know everything about the animal, and there`s nothing that we don`t know about it.

ROBERTSON: They`ve been farming here for four generations. Nothing frustrates them more than the horse meat scandal.

They blame big food chains driving down costs to maximize profit. Supermarket greed that led them to take their own meat to market.

BELCHER: I can survive on what Mr. Supermarket charges the consumer. I can`t survive on what he wants to pay me as the producers.

ROBERTSON: And this is where the family meat ends up, on the table in the farmer`s market, 100 mile south in London. One of several farmer`s markets they sell their product to, and over the past few weeks, they tell us that business is up.

Customers like the direct access to the meat produced at Marshhouse (ph) farm.

UNIDENTIFIED MALE: I find the quality of the meat is very much better, and I know where it comes from. And I know that it has been raised humanely.

UNIDENTIFIED MALE: I would avoid processed, packaged stuff that`s, you know, all we see now at the moment. You don`t know what`s -- you don`t what`s in it. This here, you`ve talked to the farmers directly, they -- they prepare, they bring it in, and you can see exactly what it is and they can tell you exactly what it is. You can trust them.

ROBERTSON: It seems that people don`t want the processed meat that`s in the supermarkets. For Mike and his family and the customers that come here, this can only mean peace of mind. Nic Robertson, CNN, London.


AZUZ: All right, we`ve got another story for you about unexpected financial upside. It starts with the "Harlem Shake." Yes, the viral videos -- no we are not making one. Now, if you`ve seen you`re probably more focused on the dancing than the music. But someone did write the song, it`s his intellectual property, and every time someone clicks on the Harlem shake video, he`s getting paid.



AZUZ: The students at Colorado college broke every library code in the book with their version. "The Harlem Shake" even has this year`s Daytona 500 winner Jimmy Johnson dancing, and employees at San Antonio Sea World. Now, Baauer, the song`s creator, is poised to hit it big. He gets a piece of the ad revenue -- every time someone clicks on a Harlem Shake video.

BILL WERDE, EDITORIAL DIRECTOR, BILLBOARD MAGAZINE: This could be a meaning for revenue stream -- if you figure a couple of dollars per 1,000 streams -- and you multiply that by millions -- you start to see that this is real money.

AZUZ: Real money is right. As of last week 100,000 "Harlem Shake" videos have been viewed, some 400 million times on Youtube. And that`s boosting record sales. "The Harlem Shake" was the top song download on iTunes U.S. last week, and one of the top downloads on iTunes Europe. Baauer isn`t the only artist riding the viral video wave.


AZUZ: South Korean artist Psy hit pay dirt last year with Youtube phenomenon "Gangham Style" with more than a billion hits.

WERDE: "Billboard" has reported that Psy made upwards of $2 million just from the streams of "Gangham Style", that was without selling a single track.

AZUZ: But corporate America sees a financial opportunity in the viral video market. Pepsi is now promoting soda with its very own "Harlem Shake."


AZUZ: I asked about the "Harlem Shake" on Twitter yesterday. Most people were tweeting they love it. Tell us what you think. If you`re on Facebook, find us at and say whether you love or hate the "Harlem Shake."



UNIDENTIFIED FEMALE: Is this legit? In nature, penguins are found only in the Southern Hemisphere


AZUZ: The penguins` bodies are designed to move through the water. But getting them in the water -- that can be tricky. At least for this one. Walking down the board, he`s fine. Going off the board -- ah-ah. He takes another (pass coming up and chickens out again. This is some serious penguin trepidation. The bird is flightless, but he is frightful. One more chance, probably just going to turn around again, but this time, a little too close to the edge. It wasn`t exactly a swan dive, but sometimes when you need to get over your fear, you just got to wing it. Really, there was no pengoing (ph) off the board, he just had to get the courage to dive in with both feet, bird brain.

We`ll pull our resources and meet you back here for more CNN STUDENT NEWS tomorrow. One more thing, teachers -- don`t forget to hit our homepage and show your feedback on today show. Thanks for watching. Have a great day.