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CNN SATURDAY MORNING NEWS

Obama Signs Order for Spending Cuts; Search to Resume for Body in Sinkhole; Outrage Over Keystone Report; Hugo Chavez Fighting for His Life; Obama: Overturn Prop 8; Sailing Back in Time

Aired March 2, 2013 - 07:00   ET

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


VICTOR BLACKWELL, CNN ANCHOR: Good morning, everyone.

BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar in today for Randi Kaye.

BLACKWELL: I'm Victor Blackwell.

It's 7:00 here in the East Coast and we're glad you're with us.

We're starting this morning in Washington with those forced spending cuts that were never supposed to happen. Well, they're happening.

KEILAR: Overnight, $85 billion in federal funding was slashed from the budget, affecting everything from education to the FBI to food safety, national parks even. The president signed the order after lawmakers failed to work out a deal.

BLACKWELL: CNN's national political correspondent Jim Acosta is at the White House. Jim, this isn't over yet, is it?

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: It's not over yet. It's never over these budget crises here in Washington or so it seems, Victor and Brianna. Good morning. That's right.

At about 8:30 last night, the president signed this order initiating these automatic budget cuts. They went into effect last night. They're going to be going into effect over the next several months as we've all been hearing.

And if you look at the letter that the Office of Management and Budget sent over to the House of Representatives and the Senate last night, it goes through a very long list of deep cuts to federal programs across the board from the Defense Department to nondefense domestic programs.

And just how deep are these cuts? Well, according to this OMB letter, because these $85 billion in cuts have to be compressed into a timetable of just seven months, that 13 percent of many defense programs will be reduced as a result of this notice and 9 percent of domestic programs.

Now, the president says that there's still time to work all of this out. He'd still like to cut a deal with Congress. And that was the subject of his weekly address to the nation. Here's what he had to say.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I still believe we can and must replace these cuts with a balanced approach. One that combines smart spending cuts with entitlement reform, and changes to our tax code that make it more fair for families and businesses without raising anyone's tax breaks. That's how we can reduce our deficit without laying off workers or forcing parents and students to pay the price. I don't think that's too much to ask.

(END VIDEO CLIP)

ACOSTA: Now, there's no sign that Republicans are willing to work with the president for those increases in revenues that he would like to see. They see those as tax increases and that was the subject of the Republican weekly address to the country. And so, both sides are still really at their battle stations at this point.

But, Victor and Brianna, if you go through this list of budget cuts, it is kind of extraordinary. I mean, they're talking about, just this year, $53 million in cuts to food inspectors with the Department of Agriculture. So, these cuts are starting to kick in.

KEILAR: And we're certainly going to see that in the weeks ahead. But, Jim, and you probably saw yesterday, there was this water cooler moment --

ACOSTA: Yes, yes.

KEILAR: -- during the president's remarks. I guess a "Star Wars" reference that people are poking fun at?

ACOSTA: Yes, it was sort of a mixed movie reference. Sort of "Star Wars" and "Star Trek" the president at one point when he was asked why not just lock the doors and keep all the congressional leaders inside the White House until you work out a deal. And he said that he couldn't put a Jedi mind meld on congressional leaders.

Well, of course, all of us geeks out there, and, hey, I'll consider myself one of them. I'm a big "Star Wars" geek and "Star Trek," as well. You know, obviously, the phrase is Jedi mind trick, or the Dr. Spock reference, Vulcan mind meld. And the president combined both of those.

And, of course, Twitter exploded and then the White House trying to have some fun with it last night, put out a tweet that showed, I guess, a graphic you might call it of the president saying that he'd like to bring balance to these forced budget cuts. And so, at least they're trying to have some fun with what was a water cooler moment. Probably wanted to beam himself up after he said that one, Brianna.

KEILAR: How dare he get that one wrong?

BLACKWELL: Really, Jim? That's we're doing now, beaming ourselves up? OK.

KEILAR: Jim Acosta, thanks so much.

ACOSTA: Beam us all up, yes.

BLACKWELL: And may the forced cuts be with you.

This hour, rescuers are expected to resume the search for the body of a Florida man swallowed by a sink hole. On Friday, the earth below Jeff Bush's bedroom just opened up and took everything with it.

John Zarrella takes us through the frightening sequence of events.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT: Victor and Brianna, hard to believe that 24 hours ago, family members were coming and going here. The house behind me totally unsuspecting that within hours the sink hole was going to open up beneath them, swallowing up the back two bedrooms. And in those bedrooms, one of the family members Jeff Bush laying in his bed when the sink hole opened and literally swallowing him up.

Other family members tried to come to his aid when they heard what they said was a loud locomotive noise. By the time they could get into his room, all they could see was a portion of the mattress sticking out from the hole. Their desperate attempts to try to pull him out of there failed. We talked to some of those family members earlier.

JEREMY BUSH, SINKHOLE VICTIM'S BROTHER: I heard my brother scream. So I ran to the bedroom. I went to open the door and run in, turned the light on and I seen there was no floor there. Everything was gone. Our brother's bed, brother's dresser, my brother's TV and my brother was gone. And this big hole, all I could see was barely see his bed. And I jumped in the hole to try and take him out and got a shovel and just started trying to dig him out.

ZARRELLA: All day Friday, engineers, fire department officials, police officials here. No one had been in the house since the time that the sink hole opened up because of fear that it could further collapse and the area behind it could collapse. Men that were working in the area throughout the afternoon on Friday wearing harnesses, attached to ropes so that they would not fall in if at some point in time the sink hole were to open up.

And they were doing ground measurements, radar measurements, trying to see the extent of the sink hole. They dropped a camera down into a sewer line to try and see how far the sinkhole extended. Now, they're analyzing all of that information to see if the ground is stable, because what they do not want to do now at this point in time is risk any further lives in their attempt to get inside that house.

Family members tell us that they're fortunate in one respect, a Good Samaritan in the neighborhood in the area here has given them a house to live in for the next couple of months. But the problem that they face, they say, is they can't get in the house either. And all of their belongings, everything what they have on their box is still inside there -- Brianna, Victor.

(END VIDEOTAPE)

BLACKWELL: Thank you, John.

Florida authorities are expected to speak in about an hour and we'll bring it to you live when it happens.

KEILAR: Well, some environmentalists are outraged following a State Department report in the controversial Keystone XL Pipeline. It says the pipeline would not have a significant impact on the environment. Remember the pipeline would run through the heartland of the U.S. from Canada's oil sands to the Gulf Coast and carry 830,000 barrels of oil a day.

The new report sets the stage for President Obama to decide how to proceed. Supporters of the pipeline say it will create 5,000 jobs and could reduce reliance on imports from other countries.

BLACKWELL: Venezuelan President Hugo Chavez is said to be fighting for his life. He's back in his country undergoing cancer treatment. That's according to his vice president who spoke to his supporters Friday night.

(BEGIN VIDEO CLIP)

NICOLAS MADURO, VENEZUELAN VICE PRESIDENT: President Hugo Chavez is in good spirits, but fighting for his life. We have to let him rest.

(END VIDEO CLIP)

BLACKWELL: Chavez had been in Cuba where he had his fourth cancer surgery. There's no word what type of cancer he's battling, but it kept him from his inauguration in January. And last night, his supporters attended a mass in the chapel of a military hospital where Chavez is receiving treatment.

KEILAR: A top Democratic congressman is slamming Supreme Court Justice Antonin Scalia's take on the Voting Rights Act. Representative Jim Clyburn of South Carolina told "The Huffington Post" he was absolutely shocked to hear Scalia say that a key piece protects racial entitlements. The high court heard oral arguments last week on striking down part of the act that requires the Justice Department to approve any voting changes in certain jurisdictions.

Clyburn says what Scalia was basically saying and I'm quoting him here, "The 15th Amendment of the Constitution ain't got no concerns for me because I'm white and proud."

BLACKWELL: New Jersey Governor Chris Christie was once the rising Republican star. Now, it seems he's getting the cold shoulder. Christie was not invited to the Conservative Political Action Conference set for later this month. The powerful group's leader says it's because Christie backed a temporary expansion of Medicaid and the $60 billion hurricane Sandy relief bill.

Well, Republican Congressman Peter King says the group is ignoring Christie's record.

(BEGIN VIDEO CLIP)

REP. PETER KING (R), NEW YORK: That's a suicidal death wish. CPAC to me loses all credibility. You have a governor who was conservative, balanced the budget, has taken on public employee unions, he's pro- life, and yet he's a 74 percent favorable rating in a Democratic blue state.

Chris Christie is doing the job but they say because he fought for the aid for New Jersey, which he was entitled to, same aid that every other state has always gotten, he won't be accepted. To me, that writes off CPAC as a serious force.

(END VIDEO CLIP)

BLACKWELL: Well, Christie seems unfazed. He says, "I wish them all the best. They don't want to invite me, that's their call, it's their organization, it's their business and they get to decide who they want to have come and not come."

KEILAR: Quite a party. I'd invite you, Victor, so you know.

BLACKWELL: And I would invite you.

KEILAR: Thank you.

We've got much more ahead this hour.

BLACKWELL: Here's a look at what's coming up.

(BEGIN VIDEOTAPE)

A.J. HAMMER, "SHOWBIZ TONIGHT": There are people who say you should apologize.

JOAN RIVERS, ACTRESS: For what?

KEILAR (voice-over): Did Joan Rivers take it too far this time? We'll tell you the joke that made her some enemies and why she's not apologizing.

It was the leak that sparked national outrage. What some are saying about the Mayer memo and how one CEO's home business model is grossing half a billion dollars.

If you thought that Carnival Cruise was bad, wait for the "Titanic 2." That's right. The most infamous ship in history is back. We'll talk to the man behind it.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

KEILAR: The Air Force Academy could soon have its first female superintendent. BLACKWELL: President Obama has nominated Major General Michelle Johnson for the post. She's currently NATO's deputy chief of staff for operations and intelligence. Johnson graduated from the academy where she was the first female cadet wing commander.

Now, the Senate still needs to confirm Johnson's appointment.

KEILAR: Come into work or quit. That's the new edict from Yahoo CEO Marissa Mayer whose decision to ban telecommuting has sparked outrage in homes of workers around the country.

Here's part of the leaked memo. Quote, "To become the absolute best place to work, communication and collaboration will be important. So we need to be working side by side. That is why it is critical that we are all present in our offices. And this discussion is about much more than just telecommuting. I should say. For one, it's a renewed discussion about the role of women in the workplace and whether they can, in fact, have it all.

So, joining me to talk about this, Betty Spence, the president of the National Association for Female Executives and Jessica Herrin, the CEO and founder of jewelry company Stella & Dot.

Betty, let's start with you. What did you think when you first heard about this memo, and do you think that Yahoo made the right decision here?

BETTY SPENCE, NATIONAL ASSOCIATION FOR FEMALE EXECUTIVES: When I first heard about the memo, I asked, is this a hoax? It just did not seem possible that someone could be going backwards. Most companies today are offering some kind of flexibility for people to work from home. And it's working very successfully.

But as I thought about it, I was realizing that the CEO, Marissa Mayer, has made a choice. She has chosen innovation over people. She's probably going to get her innovation, but at what cost? She's going to lose a lot of people.

And you just don't have to lose people when you are innovating. You figure out a way to get them in, but also to be able to have the time they need to take care of the things that they have to in their personal lives.

KEILAR: So, Jessica, let me ask you this, because you began your multimillion dollar company out of your living room. The idea using the model of women working from home. So is that just as productive as the face time you might have in the office? Do you think that this is sort of maybe wrong that she's pursuing this route?

JESSICA HERRIN, STELLA & DOT: Well, I began Stella and Dot as a flexible opportunity for women because I recognized that corporate America and traditional companies have some constraints that just aren't going to be fixed in that environment. So there needed to be an alternative. Now, I recognize that Marissa had to do something bold because there's been a string of CEOs at Yahoo trying to turn it around and it's not working. She had -- we've got to turn this ship, all hands on deck. But ultimately, I think that she's also going to realize that, of course you've got to give people flexibility so they can be happy, because happy employees are going to be the best. And they can still be innovative. It's just a matter of shades of gray and really working that out as she gets the company back on track.

KEILAR: So you think it'll backfire maybe?

HERRIN: Well, I think that in the short-term she's going to weed out a lot of people and she's going to lose some good ones and she's going to lose some of the people that aren't necessarily committed to being there and maybe that's time for that to happen.

But I can't imagine that long-term, Yahoo's not going to have flexible work. It's at Google. It's working out for them. It's really a matter of time and place for the company.

KEILAR: Well, and Betty --

SPENCE: It's working out --

KEILAR: -- is this something that affects women more than men because they take advantage of this when they have children and they're trying to juggle these priorities?

SPENCE: It's going to hit women very heavily, especially working mothers. Our "Working Mother" magazine, 100 best companies for working mothers, at top companies for executive women list show that very successful companies can use flex time and use it well. You have to monitor it and make sure your managers are trained in how to work with flexible employees.

KEILAR: Right.

SPENCE: And that may have slacked off in the last five years.

KEILAR: So, Betty --

HERRIN: It's a really good point.

KEILAR: Sorry, good on, Jessica.

HERRIN: I think it's really up to management to rise to the occasion because you can have innovation even when people aren't chained to their desks. It just means that management has to facilitate that, by making sure that people do come in sometimes and that may be for brainstorms and innovation and making sure that people have time to be together to get that good spontaneous idea. But that doesn't happen at 7:00 a.m. on a Monday morning or 6:00 p.m. when it should be dinner time.

KEILAR: Sure.

HERRIN: But I also do think this impacts men as well, because if women are ever going to have an opportunity, true equal opportunity in the workplace, it means that men need to play an equal parenting role at home. So, non-flexible work policies is bad for men and women.

KEILAR: And you mentioned -- you mentioned being chained to the desk. We're certainly all chained to our devices, as well, but betty, I think the big question here is, is this just going to be yahoo or is this something that may start a trend among other companies. What is your expectation?

SPENCE: Men and women alike want these policies. Seventy-eight of workers say that they need some kind of flexibility and we're finding companies like Cisco and Intel and IBM and Texas Instruments, all tech companies, all relying on innovation are using flex time really well. People are connected 24/7 now by all sorts of devices.

And so, will Marissa turn it around? I wouldn't be surprised if she does after she's got the company back on its feet. And I wouldn't be surprised if she gets the company back on its feet. She's very good.

KEILAR: Betty Spence with the National Association of Female Executives, and Jessica Herrin, CEO and founder of Stella & Dot, the jewelry company that many of us know so well -- thank you, guys for being with us.

SPENCE: Thank you.

HERRIN: Thank you.

BLACKWELL: You know, I wonder if we would care this much about this story if Marissa Mayer were Mitchell Mayer, if a man has made a decision, would we be talking about it?

KEILAR: No, I think that's what makes it more controversial, but she did come in or she is a new mother herself, sort of juggling some of the priorities of motherhood and being a professional. But, obviously, with many more resources than a lot of her employees.

BLACKWELL: That's true. That's true.

All right. Let's talk Girl Scouts. They have a beef with our Boo Boo. Yes, they have a beef with Honey Boo Boo and it's all over cookies. So, what did she do that's got them so peeved?

(COMMERCIAL BREAK)

BLACKWELL: An apology from the editor of "Bloomberg's BusinessWeek" after a cover triggered an angry backlash from readers.

KEILAR: It was supposed to warn everyone that a rebound in a housing market could lead to reckless lending practices again, but the cover illustration featured exaggerated caricatures of minorities holding fistfuls of cash and many people found it offensive.

The editor of "BusinessWeek" says, quote, "Our cover illustration last week got strong reactions which we regret. Our intention was not to incite or offend. If we had to do it over again, we'd do it differently."

BLACKWELL: Do you listen to the free internet radio?

KEILAR: I don't actually.

BLACKWELL: Oh, well, I do, and if you listen to it on your radio or the tablets, set a clock because Pandora is now capping free mobile music streaming at 40 hours per month. The Pandora says it doesn't have enough advertisers to keep up with the big hikes in music royalties.

KEILAR: More now on those forced spending cuts many investors are worried the cuts will negatively affect the market.

BLACKWELL: But it fared well on Friday. Alison Kosik wraps up the week in business.

(BEGIN VIDEOTAPE)

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hi, Victor and Brianna, it was quite the roller coaster week on Wall Street, but no new record high for the Dow. Still, the threat of forced spending cuts didn't really affect market movement this week. Investors have factored the cuts into their thinking for months.

And stocks remain attractive because the Federal Reserve continues to pour in the stimulus. Bernanke told Congress the Fed had no plans to rein in the spending on bonds. Bernanke said recent gains in the stock market are justified but he did warn that government spending cuts would put a significant burden on the economy.

JCPenney's CEO Ron Johnson says never mind about that revolutionary new strategy the retailer launched last year, JCPenney reported an almost 30 percent drop in sales for 2012. Profit margins, yes, they shrunk, as well. Reaction to the new strategy has been so bad Penney's had to sell so much more stuff on clearance that they're losing even more money than in the old days of sales and coupons.

So, guess what? Those weekly sales, they're coming back.

Barnes & Noble chairman and founder wants to separate the brick and mortar stores from the struggling Nook e-book unit. Leonard Riggio wants to protect the stores against sliding sales while the unit is still profitable. Barnes & Noble posted a net loss of $6.1 million in 2012, dragged down by a $190 million loss for the Nook.

A new report sheds more light on the headwinds brick and mortar retailers are facing. Analytics firm (INAUDIBLE) said Bed, Bath & Beyond is the retail chain most vulnerable to showrooming. That's when shoppers try out products in the store, but then buy them on Amazon.com for a lower price.

PetSmart was a close second.

JCPenney and Barnes & Noble both made the top 10.

One way many retailers trying to fight showrooming is by price matching. Of the 10 most at risk of showrooming, eight have some kind of price match policy. Another way, offer exclusive products.

So, to give you an example, Target is selling a line of swimwear featured in this year's "Sports Illustrated" swimsuit edition. And you can't get that on Amazon -- Victor and Brianna.

(END VIDEOTAPE)

KEILAR: Thanks, Alison.

BLACKWELL: Sure.

President Obama says I do support same sex marriage. Now, he's urging the Supreme Court to follow suit in a pretty big way. His message to them next.

(COMMERCIAL BREAK)

KEILAR: Mortgage rates dipped slightly this week. Have a look.

(COMMERCIAL BREAK)

KEILAR: Bottom of the hour now. Good morning, everyone. I'm Brianna Keilar in for Randi Kaye.

BLACKWELL: And it's good to have you.

KEILAR: Thank you. Good to be here.

BLACKWELL: I'm Victor Blackwell.

Five stories now we're watching this morning.

Number one, authorities in Florida still have not found the body of a man swallowed by a sink hole. Jeff Bush was in the bedroom of his Tampa home Thursday night when the room just collapsed into the ground. Bush's brother jumped in to try to save him, but he couldn't. Authorities say the hole is growing bigger and could take the house with it.

KEILAR: Detroit is just about broke. This is our number two story. Michigan's governor Rick Snyder is taking drastic action. Snyder announced he will appoint an emergency manager to run the city government.

That man will have the power to cut spending and go out city contracts if necessary. A state review found that Detroit's long-term debts exceed $14 billion.

At number three, Bruce Davis, a former follower of Charles Manson, is not getting parole. California Governor Jerry Brown reversed a parole board decision to let the 70-year-old out of jail, saying he still poses a danger to society. Davis is serving a life sentence for killing two men in 1969.

And number four, today kicks off the $85 billion in forced spending cuts. President Obama signed that order last night after the White House and congressional leaders failed to come up with an alternative. Defense spending will be impacted the most. Congress will take another stab at replacing the cuts with another plan later this month.

BLACKWELL: Number five: in just over three weeks, the Supreme Court will begin to hear oral arguments on California's Proposition 8, which banned same-sex marriage. Over the past week, dozens of Republican leaders have joined President Obama urging the court to overturn the ban.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Same-sex couples are a group, a class that deserves heightened scrutiny, that Supreme Court needs to ask the state why it's doing it and if the state doesn't have a good reason, it should be struck down. That's the core principle as applied to this case. If I were on the court, that'd probably be the view I'd put forward. But I'm not a judge, I'm the president.

(END VIDEO CLIP)

KEILAR: While he is the president, only nine people will get the final vote to reverse California's same-sex marriage ban, the Supreme Court justices.

BLACKWELL: Yes. Joe Johns, takes a look at how the views of President Obama and other politicians have evolved over the years -- Joe.

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Victor, Brianna, it's been clear for some time that the president supports gay rights, but until this week it was not clear whether the president's lawyer who argues cases at the Supreme Court would actually file a brief supporting marriage equality and the case involving California's Proposition 8.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): The administration waited until the last minute to say whether it was taking a stand on California's Proposition 8, which banned same-sex marriage. Even while prominent Republicans of all stripes were jumping on the bandwagon, calling on the court to rule the state's law unconstitutional.

Hollywood producer and actor Clint Eastwood, former Republican National Committee chairman Ken Mehlman, Florida Congresswoman Ileana Ros-Lehtinen, and Beth Myers who ran Mitt Romney's campaign in 2008 and served as a senior adviser to him in the last campaign. Former Arizona Congressman Jim Kolbe who is gay says his position on gay marriage has changed over time.

FORMER REP. JIM KOLBE (R), ARIZONA: Like others, I've evolved on it too. There was a time, as I mentioned, when I didn't believe that gay marriage was a possibility. And so I thought, well, you know, if we could have civil union or something, that would be great.

But I no longer believe that. I'm no longer willing to settle for that. JOHNS: It's an important moment in the law and also in politics because the administration's position on same-sex marriage could go a long way toward defining the Obama legacy. He's already made history on the issue becoming the first American president to mention it in an inaugural address.

OBAMA: Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law. For if we are truly created equal, then surely the love we commit to one another must be equal, as well.

JOHNS: The president's views have evolved and he himself has said he struggles with the gay marriage issue. This is what he said in 2004.

OBAMA: I believe that marriage is between a man and a woman. But I also detest the sort of bashing and vilifying of gays and lesbians, because I think it's unduly divisive.

JOHNS: In 2008, running for president, he refined his view.

OBAMA: I do not support gay marriage, but I support a very strong version of civil unions.

JOHNS: May of last year was the first time he took the step of supporting it.

OBAMA: For me personally, it is important for me to go ahead and affirm that I think same-sex couples should be able to get married.

(END VIDEOTAPE)

JOHNSA source told CNN that Mr. Obama had the final decision on whether to file a brief and what to say. California is one of eight states that gives gay couples all the benefits of marriage without marriage itself.

In the brief, the administration is saying if a state confers all these rights, it's already agreeing that gay relationships and straight relationships essentially deserve the same treatment -- Victor, Brianna.

KEILAR: Thanks, Joe.

BLACKWELL: If you're offered by Joan Rivers Holocaust joke about Heidi Klum, she doesn't care. Hear why, next.

(COMMERCIAL BREAK)

BLACKWELL: She is an Oscar winner who keeps it real. And that's why everybody loves Jennifer Lawrence.

You love her.

KEILAR: I adore her. I think she's so great.

And here's another reason why everyone loves her. The down to earth actress not only admitted that recent ads for Dior were PhotoShopped she said, "I love PhotoShop more than anything in the world. People don't look like that."

As you can see, most of the photos, like this one, barely resemble her.

BLACKWELL: And how is this for an odd couple. North Korean dictator Kim Jong Un and NBA Hall of Famer Dennis Rodman laughing it up, chucky-chuck-chuck, on the court side in Pyongyang. Just two dudes chilling, watching the game.

Photos of the summit were published by "VICE" magazine. Now, the magazine is producing a new show for HBO, our corporate cousin. After the game, Rodman gave a speech to the crowd in which he told, "Kim, you have a friend for life."

KEILAR: Very bizarre.

BLACKWELL: I wonder if they'll be writing notes and sending pictures.

KEILAR: I don't know.

BLACKWELL: One person who is not making any new friends, Joan Rivers. Yes, the comedian stirred up some drama during E!'s Fashion Police after she made this back-handed compliment about Heidi Klum's Oscar outfit.

(BEGIN VIDEO CLIP)

JOAN RIVERS, ACTRESS: Last time a German looked this hot is when they were pushing Jews in the oven.

(END VIDEO CLIP)

KEILAR: And, Victor, she's not apologizing for that either. This is what she said on HLN's "Showbiz Tonight" on Thursday.

(BEGIN VIDEO CLIP)

RIVERS: It's a joke, number one.

Number two, it was about the Holocaust. My -- I swear I remind people about the Holocaust, I do it through humor. My husband lost his entire family in the Holocaust. So, let's just start with that.

So people, your generation doesn't even know what I'm talking about. By my doing a joke gets them talking and thinking, and didn't bother Heidi, doesn't bother me.

(END VIDEO CLIP)

BLACKWELL: All right. Joining us now to talk about this, Kicks 101.1 radio host Jenn Hobbie, and Sirius XM host and comedian Pete Dominick.

Jen, lets' start with you because you're here in studio, what do you think about this joke? Offensive? Hybrid of both? JENN HOBBIE, RADIO HOST, KICKS 101.5: Well, first of all, it's not funny. It's reprehensible. And I think that Joan Rivers has built a brand on this, right? She said -- this is sort of her excuse to say whatever she wants to say. And just gain attention.

This is what it's about for Joan. It's not necessarily about comedy. It's just about her getting attention whether that's good attention or bad attention. And everybody's talking about it.

So it seems to work.

BLACKWELL: Yes, Pete, you know this brand. You've worked with her before. Are people too sensitive? This is just who Joan Rivers is.

PETE DOMINICK, COMEDIAN: Well, it's not for me to say somebody's too sensitive, it's not for me to say that somebody doesn't -- whether or not it's funny. I mean, I think it's funny personally. I also can see how it's offensive.

But that's not the question -- you know, Joan Rivers is an amazing, amazing comedienne. She's been relevant for 119 years, guys. She does this for a living.

I opened for her once, she did a joke about 9/11 about the people falling from the buildings. I have never heard a more offensive or, quote-unquote, "offensive" or edgy joke. That's her brand, that's what she does.

She also happens to be one of the most generous and thoughtful people I've ever met in this business. And the fact she's still relevant and the fact that she's still pushing the envelope, that's what we, many of us as comedians are supposed to do. I don't necessarily sell that on stage myself, but I see why others do. And the fact we get so outraged about this, it really is absurd.

My friend Dean Obeidallah, who is going to join you later has a great column at CNN.com about this. There's a lot more to be outraged right now than a joke made by Joan Rivers no matter what the material it is regarding.

KEILAR: Let's move on to Victor's favorite reality show star.

BLACKWELL: Now we're deflating this. Going too far.

KEILAR: Honey Boo Boo, aka 7-year-old Alana Thompson, the reality TV star, was just trying to help a friend out. She was trying to help her sell Girl Scout cookies. She put it up on her fan page.

But the Girl Scouts of America had her shut it down. They said yank that.

I mean, first off, Pete, do you care?

DOMINICK: Yes, I do. Now this I do care about. And if Victor really if you really are a fan of the show, you are the problem. BLACKWELL: Wait, wait --

DOMINICK: I will come after -- this is something to be outraged and offended about. This is the decay of Western civilization as Adam Levine of Maroon 5 commented on Honey Boo Boo. This is America in the drain.

The idea that: (a), some woman would do this with her daughter, this show; (b), a network would sell; and (c), if people like Victor is serious or anybody else would buy this stuff, this matters. We should -- it's fine to buy some of this.

But if you're not paying attention to some of the important things that Brianna generally covers, then that's the problem.

KEILAR: I don't know, Pete, I need a break sometimes from the serious stuff.

DOMINICK: We do.

BLACKWELL: We just identified the problem.

DOMINICK: We do, we do. But you know what? If this whole Honey Boo Boo selling Girl Scout cookies, if you want to buy them, buy them from my daughter @PeteDominick on Twitter not Honey Boo Boo who is the bane of America's existence.

BLACKWELL: Oh, come on! She's not --

HOBBIE: I disagree.

DOMINICK: She stinks, the show stinks, the mother stinks. She thinks.

HOBBIE: I totally disagree.

(CROSSTALK)

HOBBIE: I couldn't disagree with him more. This is a loving family. Yes, they live a different lifestyle. It is something -- it's a spectacle to watch on TV.

But they are a loving family to each other. And she was trying to help a friend. Which, by the way, the Girl Scouts give out badges for friendship, for business acumen, for finance, for learning how to sell cookies.

KEILAR: They do and I know because I have all of them. So, I'm wondering, do you think they went too far? Do you think they're sending the wrong message? Obviously they didn't want the association with the show because maybe it's controversial. Did they go too far?

HOBBIE: I think this was a marketing mistake by the girl scouts. I think they should have invited Alana, she's 7 years old. Invite her to become a Girl Scout with her friend and teach her your policies --

BLACKWELL: Yes. HOBBIE: -- of the way you want her to sell cookies if it's not on Facebook and your policy is against selling them online.

But look, this was a teachable moment they really missed out on. They could have said, hey, become our friend, become a Girl Scout. And instead said you're not a Girl Scout and this is against policy. I think it was really going against what some of their core values are.

BLACKWELL: I think they went too far. And in defense of people who watch the show, it's societal bubble gum. Is there nutritional value? No, is there any reason you chew it other than the flavor? No.

But every once in a while you want a piece of bubble gum.

(CROSSTALK)

DOMINICK: I hear you. I think Honey Boo Boo and her mom are eating all the girl scout cookies to be honest. I don't know if they're selling them.

KEILAR: Pete --

DOMINICK: Sorry, so early in the morning, those jokes offensive. But the idea that anybody cares about this Honey Boo Boo.

To be fair, I've never seen the show and I'm ranting on this. The idea -- the issue -- the girl Scout Cookies is interesting, but who cares about her? Why are we talking about her? Why would a mother subject her daughter to that? And why would people buy that stuff? Sorry, I've got two daughters.

BLACKWELL: All right. Check out an episode.

DOMINICK: And they're brownies. Please buy her cookies, everybody.

BLACKWELL: Jenn Hobbie, Pete Dominick, thank you.

HOBBIE: Thank you.

DOMINICK: Thanks, guys.

BLACKWELL: Hey, call it the Titanic sequel. An Australian billionaire, this story I love, recreating the world's most famous ship, literally. Wait until you hear how eerily similar this thing is going to be to the original. I'll talk to him next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: God Almighty.

(MUSIC)

(END VIDEO CLIP) BLACKWELL: We were singing along to the theme that was playing and you've got to love this. You got to love this movie "Titanic" 1997. Can you believe it's been more than 15 years? The true blockbuster, the first movie to reach $1 billion at the box office.

But for one man, the film was not enough to capture the true essence of "Titanic." So, he wants to recreate the ship and he's doing it down to every last detail, from the grand staircase to those four gold smokestacks.

So I had to talk to this guy. I ask, one, who are you? And then, second, what can passengers expect on this "Titanic 2"?

I spoke with the Australian mining tycoon, Clive Palmer.

(BEGIN VIDEOTAPE)

CLIVE PALMER, AUSTRALIAN MINING TYCOON: Victor, you book a ticket, you get a set of clothing cabin were for ladies that may not have put on a bustle before, they'll have the adventure of doing that, and it will be all dining, so you'll going back in time to an earlier time. It will be just lake stepping out of the movie, except it will be reality.

I think it will be really great. It's a six-day voyage across Southampton to New York, and the people will have the options of buying a ticket, either in first, second, or third class. I'll be in third class. It'll be a lot of fun there.

Or you can buy a ticket where you get two days in first, two days in second, and two days in third. But we have 40,000 people already that have registered for tickets. So, there's a strong desire to do it. We can't fit all the people in America on the ship. So, we know that everyone might want to come, but I think that we'll have enough people that will make it a great success.

BLACKWELL: Well, let's talk about the engineering, because we just watched for several days the "Carnival Triumph" and people without energy there. They sailed without A.C. Your ship will have air- conditioning, one big difference from the original.

PALMER: Sure.

BLACKWELL: Talk about the other technological advances.

PALMER: Well, first of all, the power plant. We're getting rid of coal, of course. It will be a diesel electric. And the bridge was originally too large to see over the bow.

So we're putting on another deck and on that deck will be safety lifeboats, running (ph) type lifeboats, with their own motors that could sail around the world. So we'll have 130 percent life-saving devices on the ship, which they didn't have last time.

And on that new safety deck, that will all be different than the Titanic, it will have a casino, it will all be a modern thing, so people can decide if they want to come back in time or stick with 1912.

BLACKWELL: You talk about the safety deck. Let's talk about the safety measures, because you're calling this the safest ship in the world. It will be when it's complete.

We've heard that about another Titanic. There are some people who just kind of question this and feel it's just a bit creepy. What's your response to those folks?

PALMER: Well, not really. Certainly, some people will have that view. We can't please all the people, all the time, but because we have satellite navigation, which is in the one of the funnels, as well as radar these days. Anything coming on a collision can be well followed by radar.

We've got 24-hour watch on all ships that happened after the Titanic and all these benefits, we've got a welded hull, and the Titanic was pop riveted and some of the rivets weren't up to it. We're in a different time, entirely.

So I think the technology is not really an issue. We're not going to the moon. We're not going down in space. It's 100 and so years when technology has moved forward and this ship will be tiptop.

It's being designed by people in Finland who have designed by some of the biggest cruise ships in the world. So, we've got the best technology, but we want the passenger experience to be exactly the same. So, people can fully love all over again.

BLACKWELL: How much is this going to cost? The project, building this ship?

PALMER: Well, it's going to cost -- as much as it costs, Victor. We haven't finalized the budget.

(CROSSTALK)

BLACKWELL: What's the budget? Come on, give me a number, Clive. Give me something.

PALMER: Well, various publications, they say my wealth is $3 billion to $5 billion, so it will cost a lot less than that, Victor.

So, when you reach my this stage in your life, there's few things left to do and you much better to spend your money, create jobs and create some sort of industry. And I think this is -- it's going to be a real good one. I wasn't looking at this originally at making a lot of money, but the demand for it has been overwhelming, really.

(END VIDEOTAPE)

BLACKWELL: All right. In case you're wondering, prices have not been set, but Palmer tells me 16 people from the U.S. and Europe have already offered him up to $1 million for a first class ticket.

KEILAR: Sometimes being out in the elements like this for hours can cause, well, an outburst. Yes, sort of been there, wanted to do it myself from time to time.

Jeanne Moos up next on reporters who say the darnedest things.

(COMMERCIAL BREAK)

BLACKWELL: OK. So here's a scary thought. You want to think about something scary, let's do it.

Have you ever wondered what it would be like if your car pedal actually jammed and you're like racing down the highway?

KEILAR: That's a terrible -- that would be a very horrible --

BLACKWELL: It's a terrible thought.

KEILAR: I've never thought about it, but thanks.

BLACKWELL: I'm sorry.

Well, now you've got to see this. Exactly what happened to a 16-year- old in Texas, whose car raced out of control, at speeds up to 120 miles per hour, and even faster than that. He even called the police, begging to find a solution. He eventually lost control, flipped almost five times. Look at this car.

The car's crushed, but thankfully, that teenager survived.

KEILAR: Unbelievable.

So, Victor, you and I have covered all kinds of stories.

BLACKWELL: We have.

KEILAR: All kinds of weather, you know, where your hands get numb and your feet get numb and your face gets numb.

BLACKWELL: Yes, and it's you have to enunciate. Yes, I've covered hurricanes and the blizzard and everything. Heat waves.

And now, Jeanne Moos has a story about a reporter who said exactly what we have wanted to say for years. Watch.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): Sometimes the television veil is momentarily lifted and the ever-pleasant, ever- present smiles come off.

UNIDENTIFIED MALE: We'll do it live! (EXPLETIVE DELETED) it!

MOOS: And TV people act like they're not on TV.

UNIDENTIFIED FEMALE: What the (EXPLETIVE DELETED) are you doing?

MOOS (on camera): But those outbursts were uttered by anchors who thought they were safely off the air. Those were bloopers. (voice-over): What happened in the middle of a Wisconsin snowstorm falls in the category of "blurted out truth".

OK, maybe it's not the profound kind of truth shouted by the anchorman in "Network."

PETER FINCH, "HOWARD BEALE", "NETWORK": I'm as mad as hell and I'm not going to take this anymore!

MOOS: Angelica Duria didn't mind taking it. The 26-year-old reporter for CNN affiliate WITI in Milwaukee had been standing out in a snowstorm for hours, doing live shot after live shot.

ANGELICA DURIA, WITI REPORTER: I have been here since 3:30 this morning, and it's now, I don't even know what time it is, 9:45? I'm exhausted. I've run out of things to say and it's snowing and it sucks here.

(APPLAUSE)

UNIDENTIFIED FEMALE: Angelica, welcome to (INAUDIBLE) Milwaukee.

MOOS: Most viewers loved it. The station's general manager loved it. Angelica's mother loved it.

A TV critic wrote that this apparently famous weather instrument, the WITI snow stick, probably blushed.

Maybe Angelica wasn't as posh as, say, Prince Charles, the time he did the weather.

PRINCE CHARLES, ENGLAND: Cold, wet, and windy across most of Scotland.

MOOS: But at least angelica is not getting teased like the "Today" show's Al Roker did when he had what he described as a brain freeze, to which some YouTuber added a soundtrack.

UNIDENTIFIED MALE: You unlock this door with the key of imagination.

MOOS: Angelica was in her own twilight zone of ambivalence when she tweeted, "Not sure if I should be proud or embarrassed of that moment, LOL."

Be proud, Angelica. They say the truth shall set you free, even if it doesn't free you from freezing your butt off doing live shots.

FINCH: I'm mad as hell --

DURIA: -- and it sucks here.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)