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Obama Seeks Spending Cuts Deal; Congress Flees As Deadline Looms; Space-X Launches Second Cargo Ship; Man Presumed Dead In Florida Sinkhole; 150 Acres Burned In California Wildfire; Courtside Seats For Rodman, Kim Jong Un; Paltry Severance For Groupon CEO; Spending Cuts Showdown At White House; Pope's Apartment Now Sealed; Report: GM To Boost Plug-In Car Output; Michigan Governor: Detroit In Financial Emergency

Aired March 01, 2013 - 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: -- over the motor city, an emergency manager to fix what the city cannot.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He or she could fire everybody quite frankly.

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COSTELLO: We're live in the NEWSROOM.

Good morning. Thank you so much for being with me. I'm Carol Costello. Let's head right to the White House because congressional leaders are now arriving to meet with President Obama. I know that's not a very good picture, but they're there.

Those congressional leaders searching for a way to stave off tonight's forced spending cuts. At least that's the hope. This is the reality, though. Only lawmakers have the power to overt the cut and they fled Washington for a long weekend. That's what you're looking at now.

Isn't this the Washington gridlock that disgusts so many Americans? We're covering all the angles for you. Jessica Yellin is at the White House. Dana Bash is on Capitol Hill. John King looks at the big picture of the political maneuvering and Florida Congresswoman Debbie Wasserman Schultz has the Democrats point of view.

Let's begin in the shadow of this hour's meeting with chief White House correspondent Jessica Yellin. She's there. So congressional leaders have arrived, they are going to chat with the president. Is anything going to happen?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, Carol, anything is possible, but I wouldn't bet your house on it. I wouldn't bet anything you value on it. This is really a photo-op for all the leaders to say that they tried to get something done.

They at least sat and talked before the midnight hour. What's going to happen tonight is before 11:59 p.m., the president is going to have to sign an order initiating these cuts. The Office of Management and Budget, which runs this budget, all these cuts, said something that looks like this, I don't know if you can see this.

But it's a huge long document all the way up to Capitol Hill explaining which cuts will go broadly in which agencies. This was one that was sent last year, very long and then the agencies have to begin trimming their accounts. It rolls out very gladly, though, and the president has himself even said that this is now sort of a slide rather than for example a government shutdown.

So you're not going to feel the effects instantly and politically that could be a problem for the Democrats because for them, it's going to be hard to make people at home really experience the feeling of this and understand just how much of an impact it could have on the economy, which could be a problem to make the case this should go away, which is what the Democrats want to happen fast -- Carol.

COSTELLO: Jessica Yellin at the White House. Now let's head over to Capitol Hill and chief congressional correspondent Dana Bash. Dana, I have to say I loved your story with the congressional leaders literally fleeing Washington, not sticking around to talk about the national debt or anything. What did they tell you as they left D.C.?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: You know, lots of lawmakers said different things. First of all, there are a number of Republicans who said that they were leaving and they weren't that upset about keeping these forced spending cuts in place making the argument that it's just 2 percent of the budget.

That a lot of people back in their districts have had to do the same in their own family budgets, businesses. Other members said that they would love to stay and try to find a solution, but of course I know will this will shock you, Carol, they blame the other party for not coming towards them to be a partner in finding a solution.

And then when you talk to Democrats at least on the House side, they said it was the Republicans who run the House, they chose to leave, what are they going to do but let's just give a little bit of a reality check here. Democrats run the Senate and they left just a few hours after the House did. They took a couple of political show votes nobody thought would pass to alleviate the cuts and of course they didn't.

COSTELLO: Yes, we just saw the vice president enter the White House now. So I don't know if Republicans have arrived yet, but we do know two Democratic congressional leaders have arrived. So I guess we'll sit here and wait to see the pretty pictures. Dana bash reporting live from Capitol Hill.

So blame and bluster and brinksmanship, yes, the killer bees are alive and well in Washington. Here to pull back the curtain on some of the behind the scenes maneuvering is chief national correspondent John King.

So 11:59:59 is I guess the very last moment that President Obama could put pen to paper and sign these forced spending cuts into law. I guess, we're pretty certain that's going to happen, right? JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Yes. You say pull back the curtain on the behind the scenes maneuvering. Unfortunately, if you pull back the curtain, there's nobody there, Carol, because there is no behind the scenes maneuvering.

Now this meeting at the White House is not open to the press. It would be nice if maybe we could hear all of the leaders, the Democrats and the Republicans and the president, he's a Democrat, of course, explain how we got to this point.

Because I think one of the big questions is why are we having this meeting just hours before these cuts take place? Why was the president out traveling the country trying to raise public support and not having this meeting on Monday?

That's one of the questions the Republicans asked and has just been noted, you know why -- the Republicans are passing their plans in the House. The Democrats have their ideas in the Senate. Why can't those guys get together, the Republican speaker and the Democratic Senate leader and try to figure out if they can do something in Congress?

So there has been all politics and no leadership has been the story of this week. And this whole thing came about because of an effort to reduce the budget deficit. Carol, the reason they can't have a big plan to do that and they keep having these mini crises is because of the trust deficit. The people about to be around that table at the White House don't trust each other.

COSTELLO: John King, thanks so much. Last hour in the NEWSROOM, we heard from the Republican Party on the decision by many lawmakers to head home as that deadline looms. This hour, we put the question to a Democrat.

Debbie Wasserman Schultz is a Florida congresswoman and chair of the Democratic National Committee. She joins us from Tampa. Good morning.

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: Thank you, Carol. Good morning.

COSTELLO: Good morning. So you're one of the lawmakers that decided to flee Washington. Why?

SCHULTZ: No, I am not. I'm a member of the Democratic caucus and we don't control the House of Representatives and when we are or are not in session. In fact, Democrats have repeatedly insisted that we stay in Washington. The last place I should be right now is Florida.

We should be in Washington sitting down at the table working together to hammer out a compromise so that we take a balance approach to replacing the sequester cuts, which no one should believe are not going to have an impact.

I just had a representative of "Meals on Wheels" from my district in my office in Washington this week who said that on Monday, they are cutting the seniors that they deliver meals to back by one meal a day because of the sequester cuts.

COSTELLO: Well, let me ask you this, another question about -- this is John Boehner, we see the House Speaker he going into the White House to meet with the president. We understand Harry Reid is also there and also Nancy Pelosi. We saw Vice President Joe Biden go into the White House.

And of course, they'll chat with the president, but no one expects very much to happen. So Congresswoman, I just want to ask you again, and I know the rules and all that stuff. But if lawmakers had stayed in Washington and pulled together and maybe forced the issue just in an effort at PR, wouldn't it have been better if lawmakers had stayed in Washington?

SCHULTZ: Yes, absolutely, 100 percent. And Democrats have been willing to stay in Washington for weeks. Why did we take a 10-day vacation? Why were we in recess for 10 days just the week before this one when we could have been in Washington sitting down and hammering out -- look, negotiations are hard.

But if you're not actually together, it is very difficult for them to happen. It is entirely within Congress' control. We don't need the president to solve this problem actually. It's entirely within the Congress' control to sit down and come together, pass compromised legislation and send it to the president.

This meeting today is an opportunity for the president to bring us together one last time because the Republican leadership is refusing to actually come together with the Democratic leadership to try to work this out.

COSTELLO: Well, the president hasn't exactly reached out either. Both sides are deeply entrenched. So they're going to sit in the White House and people are going to look at everybody, a great photo- op, but nothing is going to happen and the American people frankly most of them aren't even paying attention to this because they already know that nothing will get done.

SCHULTZ: Well, it's unfortunate that we have one side who has been willing to sit down, who understands that it can't be my way or the highway. Look, Carol, a year and a half ago when we had the debt ceiling deal in the summer of 2011, Democrats like me voted for $1.2 trillion in spending cuts, in cuts only.

Because we knew we couldn't jeopardize the full faith and credit of the United States. And Republicans refused to come to the table and put aside their insistence on a cuts only approach. We know if take you a cuts only approach, dramatic across the board cuts like "The Sequester" will be. It is going to haven impact on the economy.

The CBO, the Congressional Budget Office, has said that about 750,000 jobs at the least are going to be lost if you feel the full impact of the sequester cuts. It doesn't have to be this way. We each need to put aside our sacred cows, come to the table and work together.

Democrats know it can't be cuts only. Republicans need to know -- we know it can't be revenue only. Republicans need to know it can't be cuts only, very simple.

COSTELLO: Congresswoman, thank you so much for being with us this morning.

SCHULTZ: Thank you.

COSTELLO: OK, we want to take you to an event that's happening now live. This is going to happen the second time. This is a private cargo ship. It's heading toward the International Space Station. Spacex will launch the New Dragon ship in 36 seconds.

And it should arrive at the International Space Station and it should do that tomorrow. It has -- it actually includes a surprise for the crew up there and I think they'll have some new music.

It also includes a lot of needed supplies for the astronauts on board of International Space Station. Of course this is how NASA is fueling the International Space Station, hiring this private company. So let's listen.

UNIDENTIFIED MALE: T-minus 10, 9, 8, 7, 6, 5, 4, 3, 2, 1 and liftoff of the Falcon 9 Rocket and Dragon. Spacex continues America's mission to re-supply the International Space Station from U.S. soil. Falcon 9 just passing through maximum dynamic pressure.

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COSTELLO: A Florida man is presumed dead this morning after being swallowed by a sinkhole that opened up underneath his bedroom. Monitoring equipment found no signs of Jeff Bush alive in the 100-foot deep hole, which is still growing inside that house.

Area not safe right now, neighboring homes have been evacuated. When the sinkhole began last night, the victim's brother tried to save him but failed.

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JEREMY BUSH, VICTIM'S BROTHER: I heard a loud crash like a car coming through the house and I heard my brother screaming. So I ran back there and tried going inside his room, but all I seen was this real big hole and all I seen was his mattress and basically that was it. That's all I seen.

UNIDENTIFIED MALE: You tried jumping in after him?

BUSH: Yes, I jumped in the hole and was trying to dig him out. I couldn't find him. I thought I could hear him hollering for me to help him.

UNIDENTIFIED MALE: And that's the last you saw of him. Did you see any last part of him before you --

BUSH: I didn't see any part of him when I went in there. All I seen was his bed. And I told my brother-in-law to grab a shovel so I could start digging. And I started digging and digging and the cops showed up and pulled me out of the hole and told me the floor is still falling in.

UNIDENTIFIED MALE: So you were still at risk, as well. And now your entire family is out here. Why are you out here in support?

BUSH: Just to get closure, I guess, make sure he's not dead. See if he's alive. I know in my heart he's dead, but I just want to be here for him because I love him. He's my brother, man.

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COSTELLO: Sinkholes are common in floor where much of the state sits on top of limestone. This 1981 sinkhole in Winter Park was 320-feet wide and 90-feet deep. It swallowed a car dealership, a public pool and a two-story home.

Other stories we're covering this Friday morning at 17 minutes past the hour, this is what it looks like near Riverside, California where 150 acres of brush have already burned. Voluntary evacuations now in place. So far one structure has been damaged. No injuries reported. The cause still under investigation.

Dennis Rodman expected to leave North Korea later today, but the former NBA star did take time out to enjoy a little basketball with none other than the North Korean leader, Kim Jong-Un. The two sat together court side during a Harlem Globetrotters game. At one point, Rodman told Kim Jong-Un, you have a friend for life. Rodman is in North Korea. He is taping a documentary.

It's hardly what you'd call a golden parachute. Fired Groupon CEO Andrew Mason is leaving the company he founded with a check for just $378.36. Alison Kosik is at the New York Stock Exchange. Far from a golden parachute?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Definitely not a golden parachute, more like a led balloon, but you know what? This was all part of Andrew Mason's contract. The company is obligated to pay out half of his salary, and guess what, he cut his own salary to $756.72 after Groupon went public in 2011.

Go ahead and divide that by two, that's $378.36. Nice severance. But you know what? Before you cry any tears for him, Carol, he's going to be OK. He also gets to keep his 47 million shares of Groupon and even though the stock has been taking quite a beating, it's down 80 percent since it went public. It's still worth over $200 million.

And I know what you're thinking. Why would he go ahead and cut his salary like that? Well, you know what? It is common especially if you're in the tech industry for these CEOs to go ahead and drop their salary down to $1. Facebook's Mark Zuckerberg did it.

Google's Eric Schmidt did it. HP's Meg Whitman, all in the one buck club. Mason, though, as always been a little bit quirky. I want to show you some of his memo to his employees yesterday. He said, quote, "I've decided that I'd like to spend more time with my family, just kidding. I was fired today. If you're wondering why, you haven't been paying attention." And yes, it's very funny. He goes on to say he's OK with having failed as part of the journey, though no word yet, Carol, on what the significance is of that $756.72 salary or if there's any significant at all to that number. Just an interesting number he came to -- Carol.

COSTELLO: Interesting guy and refreshingly honest, right?

KOSIK: Yes. I love his honesty in that letter, love it.

COSTELLO: Alison Kosik, thanks so much. Talk back question for you today, what will you be doing at 11:59:59?

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COSTELLO: Now is your chance to talk back on one of the big stories of the day. The question for you this morning, what will you be doing at 11:59:59? Yes, at 11:59:59, we will usher in sequestration. That's when the meat cleaver likely comes down on the federal budget to the tune of $85 billion, confetti, champagne, depression, prayer?

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BARRY BLACK, SENATE CHAPLAIN: As we anticipate an across the board set of budget cuts becoming law in our land, we still expect to see your goodness prevail. Rise up, O God, and save us from ourselves.

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COSTELLO: We know who won't be saving us, Congress. Lawmakers got the hell out of dodge, leaving the hallowed halls of Congress to visit their families without any real debate over our nation's debt. Allegations of scare tactics aside, the non-partisan Congressional Budget Office says, 750,000 jobs will be lost and the economy is likely to slow.

Need more proof, in Florida, the National Guard will be slashed 1,000 jobs could be affected in St. Augustine alone. Indianapolis canceled its annual air show. In Southern California, 11 air traffic control towers could close.

Now, could I go on, but like you, I have forced budget cut sequestration fatigue. What more can I say? As Chaplain Black prayed on the Senate floor, O God, save us from ourselves. Talk back question for you today, what will you be doing at 11:59:59? Facebook.com/carolcnn or tweet me @carolcnn.

Like many American families, the city of Detroit has been struggling and like many families, the city of Detroit needs help. In less than two hours, residents will find out if the state of Michigan will take over their city.

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COSTELLO: Good morning. I'm Carol Costello. Thank you so much for joining me. Checking our top stories, at just about 30 minutes past the hour, right now Republican and Democratic leaders in Congress are behind closed doors at the White House.

President Obama summoning them for an 11th-hour meeting just before this much talked about forced spending cuts kick in and we understand the meeting has begun. It officially began at 10:18 Eastern Time.

In Vatican City, the pope's department now officially closed. The traditional seal covers the former home along with the elevator used to reach it. Tradition says the seal will not be broken until a new pope is chosen.

General Motors thinking green and hoping to make some green in the process. "Bloomberg News" reports GM will increase production of the Volt and other plug-in cars by 20 percent this year. The Chevy Volt had big sales gains last year while the new Cadillac ELR could also boost plug-in profits with its higher sticker price.

Governor of Michigan will soon announce Detroit is in a financial emergency and that means the state is one step closer -- actually it's a millimetre away to the state taking over the city's finances.

Detroit as you well know has fallen on hard times. It's at least $14 billion in debt according to a state report and residents are simply fleeing. Detroit has lost 25 percent of its population in just a decade.

What about crime? Last year, Detroit was one of the deadliest -- had one of the deadliest years in decades with more than 400 people the victim of homicide. CNN's Poppy Harlow has followed the sad story of Detroit. She joins us live now. Good morning, Poppy.

POPPY HARLOW, CNN CORRESPONDENT: Good morning, Carol. This announcement expected in about an hour and a half that Michigan's Republican Governor Rick Snyder will say that he agrees that Detroit is in a financial emergency is critical because I'm told by a source close to the governor that means he will install an emergency manager in Detroit.

That person will have sweeping powers within the city to override the mayor of Detroit, to override the city council, to break union contracts, throw them out if needed, to lay off more government workers if needed, whatever is needed to get this city back on sound financial footing.