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$700 Billion Bailout; Gas Shortages in Southeast; Protecting Your Assets

Aired September 22, 2008 - 14:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Well, in case you missed the Emmys last night, Tina Fey is truly a "30 Rock" star. Her show won for best comedy. She also got Emmys for best comedy actress and for writing, and her co-star Alec Baldwin won for actor in a comedy.
"Mad Men" won best drama. And the Emmy for best cheesing up of the TV theme songs goes to Josh Groban. This is just part of the Robert Goulet, part TV Land and all Velveeta.

(MUSIC)

PHILLIPS: And his "Love Boat" theme was truly exciting and new.

The next hour of CNN NEWSROOM starts right now.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): Seven hundred billion dollars, no strings attached? No way say many in Congress. President Bush says the whole world is watching how the U.S. cleans up its banking mess, and how quickly.

It was issue #1 before. Now it's number one with a bullet. New ammunition for the men who say the buck has got to stop with them.

UNIDENTIFIED FEMALE: How many stations have you been to?

UNIDENTIFIED FEMALE: I've been to, like, four different stations and I haven't gotten any gas.

PHILLIPS: Atlanta is running on empty. And so is Nashville and much of the Southeast. What happened to the gas? The answer is in the pipeline.

(END VIDEOTAPE)

PHILLIPS: Hello, everyone. I'm Kyra Phillips, live at the CNN world headquarters in Atlanta, and you're live in the CNN NEWSROOM.

How fast could you write a check for $700 billion? The White House, Fed and Treasury are warning Congress there is no time to waste in purging bad debt from the U.S. financial system, but that debt isn't disappearing. If lawmakers agree, it will simply move from the big bank books to the government's. In exchange, Democrats want some independent oversight, along with help for struggling homeowners and a limit on pay or severance for the bosses of the firms that are getting bailed out.

In the background, the former investment bank Morgan Stanley is getting a mini bailout from Japan. The Japanese mega bank Mitsubishi UFJ is buying as much as a fifth of Morgan Stanley which, along with Goldman Sachs, is fundamentally changing. It will look and act a lot more like regular banks than the titans of Wall Street that they were.

And we're following the dollars this hour with CNN's Brianna Keilar on Capitol Hill. CNN's Allan Chernoff takes a look at what the mega bailout means to you. And Susan Lisovicz is watching the fallout on Wall Street, including a couple of major makeovers. And Gerri Willis has news you can't afford to miss, how to protect your assets in turbulent times.

Let's start with Congress. If anybody is used to spending astronomical amounts of money, it's lawmakers. But even they get queasy when the numbers get close to a trillion dollars.

Isn't that right, Brianna Keilar?

BRIANNA KEILAR, CNN CORRESPONDENT: They sure do. And progress, though, being made in terms of negotiations here on Capitol Hill. But Congress doesn't just want to rubber stamp the Bush administration's proposal for this rescue package.

Democrats and Republicans want more oversight. They're concerned the Treasury Department has too much unchecked freedom under this proposal, some unchecked freedom in how they decide to spend money on these corporations. And then Democrats also want to see the government getting more involved in refinancing individual homeowners, those homeowners who, as we speak, may be facing foreclosure.

Democrats also want to limit executive pay. It's not sitting well with them, the idea that hundreds of billions of dollars of taxpayer money could go to corporations, and those corporations could turn around and spend millions upon millions on severance packages and annual salaries for their CEOs.

Here's what Democrat and House Financial Services Committee Chairman Barney Frank said earlier today.

(BEGIN VIDEO CLIP)

REP. BARNEY FRANK (D), CHAIRMAN, FINANCIAL SERVICES COMMITTEE: If you're the CEOs and the top people who made these decisions that are requiring the taxpayers to put money at risk, and we don't think we're going to spend -- we're certainly not going to spend $700 billion ultimately, but we're putting it at risk before we know how much we'll recover. And you're telling us that having made those decisions that require this taxpayer money, we can't limit the outside compensation you're getting?

(END VIDEO CLIP)

KEILAR: But President Bush and Treasury Secretary Henry Paulson are urging Congress to pass a quick and clean bill here. Paulson, as well as Fed Chairman Ben Bernanke and the chief of the SEC, Christopher Cox, all of them will be here on Capitol Hill tomorrow testifying before the Senate Banking Committee -- Kyra.

PHILLIPS: All right. Well, how will some of the money get to the financial institutions overseas?

KEILAR: Well, there is discussion of that possibility, and that's a possibility that's not sitting very well with some people here on Capitol Hill. In fact, listen now to Congressman Cliff Stearns, Republican from Florida.

(BEGIN VIDEO CLIP)

REP. CLIFF STEARNS (R), FLORIDA: This plan increases our excessively high national debt to $11.3 trillion, while also allowing foreign banks which hold U.S. mortgage debt to benefit from the billions provided by this bailout. This plan constitutes the largest government bailout in history, yet it does nothing to protect the taxpayers.

(END VIDEO CLIP)

KEILAR: Now, Senate Banking Committee Chairman Christopher Dodd, though, he said it may be essential to use some of this money for corporations that are not American corporations, because if they do quite a bit of business in the U.S., he says the health of those corporations is related to the health of the U.S. economy -- Kyra.

PHILLIPS: All right. Brianna Keilar, we'll be talking about this obviously all afternoon and evening.

So what's in it for you, and if the consequences of doing nothing are dire, what are the benefits of making the big banks healthy again?

CNN's Allan Chernoff has looked into that for us.

Hey, Allan.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Kyra, the benefits here may be simply avoiding disaster. That's about as good as it gets for us, if you can believe it.

Basically, last week we had banks not lending to each other. Companies could not borrow money. And Secretary Paulson has basically laid out a financial abyss. That's why you see Congress basically getting on board over here.

Let's have a brief look at what potentially could happen if we didn't get this bailout.

First of all, certainly there would be pretty much of a lending freeze. A lot of loss of confidence. If you don't have confidence, bankers don't want to expose themselves to more losses.

A lending freeze means that banks themselves might not be able to fund their operations. And if the banks can't do that, certainly they're not lending money. Companies, consumers, all can't get loans.

I mean, this is essential to the economy functioning. You've got to be able to have companies and people borrowing in order to keep on doing what they do.

And this is a huge challenge for the U.S. economy right now. I mean, if companies can't expand, then we'll see losses as well. A lot of companies could really pile up billions and billions more than we've already had in losses. And there would be essentially a huge depressing effect not only on our economy, but on the global economy.

So, Kyra, the benefits essentially are what we are avoiding here. Hopefully avoiding.

Now, this is -- by no means should any of us be happy about this. In fact, I just spoke to Lee Cooperman. He is the chairman of Omega Advisers, one of the savviest investors on Wall Street, and he said to me, "I have no idea why I pay taxes as a consumer."

He's very angry that we got into this mess, that this whole problem developed, that there wasn't enough oversight of Fannie Mae and Freddie Mac. And here we are, $700 billion bailout.

PHILLIPS: Sure. We can talk about all the commissions and everybody looking into this and all of the investigations, but bottom line is, where was that oversight? There was an absence of it, clearly.

Allan Chernoff, thank you so much.

Now, in addition to the bailout, investors woke up today to find the landscape had changed dramatically for the only two remaining investment banks on Wall Street.

(BUSINESS REPORT)

PHILLIPS: And the big bailout plan tops the agenda of the presidential candidates today. Barack Obama in Green Bay, Wisconsin. John McCain in Scranton, Pennsylvania. And they were hundreds of miles apart, but shared some common ground, agreeing that the $700 billion plan needs much more scrutiny and more people to scrutinize it.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Never before in the history of our nation has so much power and money been concentrated in the hands of one person, a person I admire and respect a great deal, Secretary Paulson. This arrangement makes me deeply uncomfortable. And when we're talking about a trillion dollars of taxpayer money, "trust me" just isn't good enough.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP) SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We cannot give a blank check to Washington with no oversight and no accountability, when no oversight and accountability is exactly what got us into this mess in the first place.

(APPLAUSE)

Now -- so I'm working with anybody who's willing to get the job done to try to figure out how we get out of the immediate crisis of this week.

(END VIDEO CLIP)

PHILLIPS: And in the battleground state of Florida, the fight is over Social Security. Later, we have new attacks and counterattacks by the presidential candidates.

And our personal finance editor Gerri Willis looking out for you. How safe is your money? She's got answers for you, straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: Well, Texans who had to get out of Hurricane Ike's way are headed back home. More than 1,500 who had been staying around Fort Worth got a state-chartered bus and headed back to Houston, Beaumont and Baytown. Those areas all considered safe now. People may return to Galveston on Wednesday, we're told.

And some school bells are ringing again in the Houston area. That's music to parents' ears. Many kids headed back to school today after a week off.

So what could eventually turn into Tropical Storm Kyle is pounding Puerto Rico with wind and rain. Hurricane hunters will keep a close watch on this one and see how close the system is to Haiti and how much more that country can take.

Four storms already have hit Haiti within a month. They killed more than 400 people, wiped out more than half of the country's agriculture, and forced people to live in muddy squalor.

And if you'd like to help those affected by recent hurricanes, you can go to Impact Your World. That's our page at CNN.com where you'll find links to groups offering assistance. That's at CNN.com/impact.

(WEATHER REPORT)

(COMMERCIAL BREAK)

PHILLIPS: Ike is long gone, but drivers in some states are still feeling a hurricane hangover. In parts of the Southeast, you might have to go to two, three, maybe more gas stations to find a working pump.

CNN's Nicole Lapin has more on the shortages. (BEGIN VIDEOTAPE)

NICOLE LAPIN, CNN CORRESPONDENT (voice-over): The search for gas is on in the Southeast.

(on camera): How many stations have you been to?

UNIDENTIFIED FEMALE: I've been to, like, four different stations and I haven't gotten any gas.

LAPIN (voice-over): Out, out and out. And it's all because the Colonial Pipeline that runs from Gulf Coast refineries to dozens of states including Georgia, Tennessee, and South Carolina has been running low since Gustav and Ike.

STEVE BAKER, COLONIAL PIPELINE SPOKESMAN: Since the hurricanes both hit, we have been tapping the reserves of the stockpiles of the fuels that were made before the hurricanes hit, and we've been delivering those. And that caused us to operate at a reduced rate, less than we're capable of. So that's been part of the problem that we've faced and we're trying to overcome.

LAPIN: Until then, many Atlanta stations may be out of a certain grade, if they're not totally out of gas.

(on camera): How much would you pay for gas right now? If this station had gas, and it was $5 a gallon, would you pay that?

UNIDENTIFIED FEMALE: Sure, yes.

LAPIN: You'd pay anything?

UNIDENTIFIED FEMALE: Yes.

LAPIN (voice-over): Desperate drivers would pay anything.

UNIDENTIFIED FEMALE: All of these people are waiting on gas.

LAPIN: But in Nashville, some would do anything, too.

UNIDENTIFIED FEMALE: It's very scary. I've never seen anything like this.

LAPIN: When folks there heard there was a rumor that there was a gas shortage, they hoarded. And because of that, an estimated three- fourths of stations had no gas going into the weekend. Call it a self-fulfilling prophecy. Whatever you call it, people are taking anything they can get.

(on camera): Is it going slow?

UNIDENTIFIED MALE: It's -- yes. A lot slower than normal, I guess.

LAPIN: You're on empty?

UNIDENTIFIED MALE: No gas.

LAPIN: Fumes?

UNIDENTIFIED MALE: Yes.

LAPIN: So we have a little trickle. Every little bit helps, I guess.

UNIDENTIFIED MALE: Yes. I'll take what I can get, I guess. Right now I've got almost a gallon. So that will get me somewhere.

LAPIN (voice-over): Nicole Lapin, CNN, Atlanta.

(END VIDEOTAPE)

PHILLIPS: iReporter Scott Trent lives in suburban Atlanta and took these pictures for us. He said he went to more than 30 stations but only found two still pumping gas. And of course the lines were crazy. At one point, cars were following a tanker to a station and waiting for it to refill the pumps.

As for Scott, well, last we heard, he was down to about an eighth of a tank and was still looking to fill up so he could get to work this morning.

If you've got something to say or to show us, send us your iReport. It's super easy. Just log on to ireport.com and click "upload now."

He was convicted of gunning down a Georgia police officer, but now most of the witnesses, along with the former president, the pope, even a prominent preacher, are saying, hold on, don't kill this man.

We'll tell you why.

And the man who frightened an entire city with a deadly shooting rampage is back on trial in Atlanta.

(COMMERCIAL BREAK)

PHILLIPS: Hello, everyone. I'm Kyra Phillips at the CNN world headquarters in Atlanta, and you're live in the CNN NEWSROOM.

If all politics is local, all economics is personal, that means we all have a stake in the federal budget and national debt. But we're more concerned with our own. So we check the Big Board and sweat over our IRAs. And when CNN's Gerri Willis offers tips on protecting our assets, well, we all listen up.

What you got for us, Gerri?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, I have to tell you, I know this is concerning looking at these numbers in the stock market, but the thing you want to be doing right now is taking stock of your accounts. Figure out which -- figure out what you have in each of your accounts, including your savings accounts, checking accounts, CDs, joint accounts. That's because your money will be protected up to certain limits by the FDIC if the bank fails.

Now, here are the limits. The FDIC covers limits on individual accounts up to $100,000, joint accounts up to 200,000, retirement accounts up to 250,000.

Now, Kyra, you can have more money than this at one bank as long as you divide your funds up among various ownership categories. Credit unions are also insured up to the same limits. If you exceed these limits, hey, move the money around to another bank or credit union. And if you have a brokerage account, there are protections there, too. If the brokerage goes bankrupt, you're protected up to $500,000 for securities.

Now, you may want to think about your money market accounts. The Treasury said it was going to stand behind money market mutual funds last week, but the absolute safest money market funds -- you should know this today -- are the ones that invest in treasuries. So check out what your money market is invested in. And, of course, keep an eye on those mutual funds.

A lot of people want to be pulling that money out right now. In fact, we're on track right now for $30 billion to be taken out of mutual funds just this month. That's probably not what you want to do, because at the end of the day, if you take it out now, you're probably locking in significant losses.

Instead, get diversified. Make sure you own a good mix of stocks, bonds, international holdings for the best safety possible.

PHILLIPS: Yes. Gerri, we were talking about this morning, we don't even want to take a look at our money right now. We just want to let it ride.

WILLIS: Right.

PHILLIPS: Because it just stresses you out. You have got to -- you've just got to let it rest for a little bit.

WILLIS: That's right. That's right.

And you know, one other thing I want to mention here is that AIG, I know a lot of folks out there, they have life insurance policies annuities with AIG. They're really worried about them. Believe me, those monies are segregated away from the parent company.

You don't have to worry about your annuities, your life insurance. Just the way they are set up by law, there are protections for folks.

They're also protected by state guarantee funds in case the company actually goes out of business. So there are reassurances out there from the federal government right now. You should sit back, take a load off, and stop spending all your time looking at your 401(k).

PHILLIPS: Thanks, Gerri. WILLIS: My pleasure.

PHILLIPS: You can follow your fortunes or lack thereof at CNNMoney.com. We've got all the day's market news and numbers, expert analysis, and much more.

All right. We're getting word now that out of Las Vegas, Nevada, celebrity crime writer Dominick Dunne, apparently was taken to a Las Vegas hospital. He was monitoring the O.J. Simpson armed robbery kidnapping trial. You probably know or are familiar with the "Vanity Fair" writer.

Paul Vercammen, joining us on the phone right now.

What are you finding out, Paul, about his condition? Is he OK?

VOICE OF PAUL VERCAMMEN, CNN PRODUCER: He says he is OK. I talked to him over the phone a short while ago, Kyra. He's at Valley Hospital here. And he says he's going to be fine.

And then there was a tremendous sense of resignation in his voice. And he said, you know, I think they're probably going to make me fly back to New York in the next couple of days. What he's eluding to is, Dominick has been battling bladder cancer and he told me that against his doctor's wishes he came out to cover this trial.

Well, earlier today in court he said to me, I happened to be sitting next to him, I'm feeling a lot of pain, a lot of pain, and he motioned short of down toward his bladder. He said he wanted to go back to the hotel. But he was so ashen at that point that it seemed obvious that he couldn't stay. And one of the marshals came over and subsequently got him involved with the paramedics and he was taken over to Valley Hospital.

PHILLIPS: Well, this is someone that spent decades covering society and celebrity trials. I mean, he's 82 years old. He doesn't want to stop, he doesn't want to quit.

VERCAMMEN: No, he doesn't, Kyra. And I think you've run up against Dominick in stories in the past. And for all of us, he's short of the Godfather of celebrity and crime. And he's well liked in and around the courthouse. A woman the other day ran up to him and kissed him and she was subsequently thrown out of the courtroom after she also approached a witness. And Dominick had been so upbeat, he was glad to have sort of been back on his (INAUDIBLE). He was saying hello to everybody. And you could overhear him saying how great it was to be back and that this might be the last trial, he talked about it. But, it's obviously taken a sudden turn. And he does say he'll be OK, though.

PHILLIPS: Yes. Well, work is his oxygen. That's for sure. L.A. producer Paul Vercammen.

Paul, thanks for the update.

VERCAMMEN: You're welcome, Kyra. PHILLIPS: Well, a man known as the courthouse shooter is back in an Atlanta courtroom today after years of legal wrangling, costing taxpayers almost $2 million. The trial of Brian Nichols is finally under way. Nichols killed four people in that rampage that stunned the city.

Here's how it all unfolded.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): It should have been a day like any other at the Fulton County courthouse. Business as usual. It would be anything but.

VOICE OF UNIDENTIFIED MALE: Police are everywhere here. Sheriffs and deputies flying around. What we know is two people have been shot. One is a deputy, the other we believe may be a judge. This is just a chaotic scene with emergency vehicles flying everywhere.

PHILLIPS: March 11, 2005. 33-year-old Brian Nichols is transported from jail to the basement of the county courthouse. Nichols is on trial for a second time in as many weeks on charges of rape, burglary, false imprisonment.

ASH JOSHI, FORMER PROSECUTOR: I was quite confident Brian Nichols knew the trial was not going well. It was the fourth quarter and we were up by a few touchdowns and I think he was concerned.

PHILLIPS: Faced with the very real prospect of spending the rest of his life in prison, police say Nichols takes matters into his own hands. At 8:49 a.m., he's escorted up to the holding cells on the eighth floor of the new courthouse. There, he assaults and overpowers Deputy Cynthia Hall.

RICHARD MECCUM, U.S. MARSHAL: He knocked her out. She had a key on her that unlocked the gun box. And so he unlocked the gun box, which is in the holding cell and took her gun out. Also got her radio.

PHILLIPS: As Nichols makes his break, Judge Roland Barnes is presiding over a civil matter on the eighth floor of the old courthouse. Court reporter Julie Brandow is next to him.

(on camera): By now, Brian Nichols, armed with Cynthia Hall's handgun, is calmly walking away from the holding cell. But instead of easily escaping, he's making his way across this sky bridge to the old courthouse.

MECCUM: The judge was already on the bench with the court reporter and when Brian Nichols came through that door, he then shot the judge and the court reporter.

PHILLIPS (voice-over): Judge Barnes and Julie Brandow are killed instantly. Nichols then turns his attention to the prosecution table. But there were no prosecutors. Instead, he locks his eyes and his gun on attorney Richard Robbins.

VOICE OF RICHARD ROBBINS, ATTORNEY: A lot of thoughts went through my mind. He just killed the judge. Now he's going to kill the prosecutor, then he's going to kill everybody else. And I'm sitting at the prosecutor's table. So, I decided at that point that I needed to get out of that courtroom and I wasn't going to let him shoot me straight in the chest.

PHILLIPS: Judge Barnes' wife, Claudia, also works that courthouse and remembers all too vividly the chaos that followed the shootings.

CLAUDIA BARNES, WIDOW OF SLAIN JUDGE: One of my good friends came and got me. And at that point, I knew something was wrong with Roland. So, we went over to his courtroom and they had already taped it off.

PHILLIPS (on camera): They wouldn't even let you in the courtroom?

BARNES: Oh, no.

PHILLIPS (voice-over): In a matter of 12 short minutes, so many lives are changed forever at the Fulton County courthouse. And it's about to get worse. Brian Nichols is on the loose.

(END VIDEOTAPE)

PHILLIPS: And it was at that point, Sheriff's Deputy Hoyt Teasley was shot and killed just outside the courthouse. Then the fourth victim, David Wilhelm, a federal agent, he was killed at a home that he was renovating just outside of Atlanta.

Now Nichols' defense admits that he killed the four victims but says he's not guilty of murder since he didn't know right from wrong at this time. Will his insanity defense fly?

Former prosecutor B.J. Bernstein joins me now to talk about the case. OK. We've been talking about this for three years now. Almost $2 million later, it's pretty much blown out the defenders' fund. And here we are wondering if there's ever going to be progress.

B.J. BERNSTEIN, CRIMINAL DEFENSE ATTORNEY: But they are actually making at this moment, opening arguments now. The change in judge, this new judge, Judge Bodiford has said, I am going to get this trial done. I'm going to get it completed by the end of the year. And he -- that's finally happening.

PHILLIPS: And this is the new judge because the other judge had to recuse himself.

BERNSTEIN: Exactly. He had made some comments to CNN's Jeffrey Toobin, for the "New Yorker" magazine and then he realized that he shouldn't have commented on the case. So, he removed himself from the case and he was very controversial here locally. And that was another issue in the case. I think the words that you said at the end of that piece have really held true, that beyond those 26 hours of terror in Atlanta, this case has had effects on the judicial system throughout. You know, bankrupting the local public defender's system, conversations, discussions. In fact, I read an editorial about the judges and the media in this case, talking about issues of insanity.

PHILLIPS: Well, what --

BERNSTEIN: And then today, we've already lost a juror, which is another issue.

PHILLIPS: Why did -- why was there a lost juror? Why was the juror --

BERNSTEIN: One of the jurors came in this morning. These folks were selected and, granted, they weren't real excited about being told you'll be on trial until the end of the year. And he apparently talked about having emotional difficulties and maybe some tooth difficulties. Judge Bodiford is a no-nonsense Vietnam war veteran --

PHILLIPS: You've been in his courtroom before.

BERNSTEIN: I have tried a very contentious jury trial with him. He is no nonsense. And he said to that jury because I can't have you not be fair. But, you are going to sit here until the end of this trial, in the jury box watching it throughout the entire time.

PHILLIPS: Now, here's what's interesting. I mean, this is someone who committed murder inside a courtroom where he is supposed to stand trial. I mean, how do you get a fair -- there's not a lot of sympathy I got to say, for this guy.

But, how do you get a fair trial when you are sitting in a courtroom where you actually committed the crimes?

BERNSTEIN: Right. Well, Judge Bodiford finally got the city of Atlanta to agree to let them use the municipal courthouse down the street. So as of now, it is no longer in the Fulton County courthouse. Which I think would have been a serious issue for appeal. It is down the street.

This morning they blocked off the streets in front of this courtroom. The judge is being very restrictive as to who can go in and out of the courtroom. Because not only was it scary that day. You know, remember, we're talking about a defendant who busted out from the police that day to there have been accusations now that he tried to bust out of prison since he's been waiting.

PHILLIPS: Oh, and we've covered that. He tried a couple of times.

Now, Ashley Smith, the young woman that he ended up meeting later and that night and she read the "Purpose Driven Life," the spiritual book to him. Apparently got him to gave himself up to the S.W.A.T. Team. That was all a very fascinating dynamic that added to the whole story.

Will she testify?

BERNSTEIN: You know, I think so. And I actually think it's going to be a critical point in this case because what's happening now is, not whether -- and today the defense said definitively we are going for not guilty by reason of insanity. So they are not saying that Brian Nichols didn't do everything that's alleged. Rather, they're using an insanity defense.

Now, the state is going to say with each witness trying to show that they were deliberate decisions made by Nichols for these entire 26 hours. Ashley Smith's testimony may be interesting for the defense because they're going to try to show that all of some short of reality clicked by her reading the "Purpose Drive Life," by her getting him back in touch with the present reality of realizing what he had done. So, that actually is going to be a very key witness for both sides in dealing with the insanity defense down the road.

PHILLIPS: Well, it's going to be interesting to follow, no doubt. About time. That's what everybody is saying.

BERNSTEIN: It's about time. And as this morning shows, we've already lost one juror, I'm not sure what's going to happen next.

PHILLIPS: We'll be talking more.

B.J. Bernstein, great to see you.

Well now, another Georgia case that's gotten global attention. 17 years ago, Troy Anthony Davis was convicted of gunning down a police officer in Savannah. And tomorrow night, he's scheduled to die by lethal injection. A lot has changed since his conviction. 7 of 9 witnesses who testified against him, have recanted. Three new witnesses are pointing the finger at a new suspect. One of the men who testified against Davis. Former President Jimmy Carter, Pope Benedict, and the Reverend Al Sharpton are all those among urging clemency.

A dangerous game of chicken, or the latest sign that North Korea aims to restart its nuclear reactor. And Pakistan's deadly hotel bombing, were government leaders the targets? We've got the latest from Islamabad.

(COMMERCIAL BREAK)

PHILLIPS: Well, new concerns this hour over North Korea's nuclear program. The head of the U.N. Nuclear Agency says that Pyongyang is requesting that seals and surveillance equipment be removed from the Youngbyong nuclear reactor. Now, this comes as the U.N. General Assembly begins its annual session in New York.

CNN's Zain Verjee joins us now with the latest.

What's the reaction from the State Department on North Korea's request to have the seals removed and the surveillance equipment? ZAIN VERJEE, STATE DEPARTMENT CORRESPONDENT: I just spoke a short while ago, Kyra, to a senior State Department official who essentially said that from their point of view, North Korea is taking a newer, harder and tougher line. The official says that the request to remove these seals and the question of surveillances as well, is part of this new strategy they're approaching.

The official said to me, Kyra, that what the U.S. is trying to do is to right now is to figure out whether this tough, new approach by North Korea, is in any way related to Kim Jong-Il's health. You know he's reported to have suffered a stroke. So, what the U.S. is trying to do is to meet with its allies and just figure out the next course of action.

PHILLIPS: You bring up a good point. We still don't know where he is, Kim Jong-Il. He hasn't made public appearances. He's still M.I.A., right?

VERJEE: Right. Exactly. Nobody really knows. North Korea is one of the most secretive, most elusive states in the world. And the U.S. intelligence on it is just not very good.

The fact that he didn't show up is a clear indication that he's unwell. Something is up. Something is wrong. But it's something that's clearly factoring into U.S. policy-makers' decisions here, Kyra.

PHILLIPS: All right. You came racing back, of course, to do this segment for us. I know you were in the middle of traffic. And that was because you were there at the opening session of the U.N. General Assembly.

Let's talk about the challenges facing Condoleezza Rice.

VERJEE: Absolutely. She's got some pretty major ones, Kyra. What she's doing right now is holding court, at the luxurious Waldorf Astoria, meeting world leaders. She's going to be do that all week long. She's got some major issues though, facing her.

Let's take a look at Iran. What Secretary Rice is trying to do here is to shore up the allies and try it and get a new sanctions resolution against Iran, because of its nuclear program. That seems unlikely.

On North Korea, as we've just been talking about, this is supposed to be a big foreign policy success and now there are questions of whether or not this is actually going to unravel at the last moment. On the Israeli/Palestinian issue, it's unlikely that she's going to get a deal by the end of her term because they're so much in a turmoil on both sides.

And key here, Kyra, is Russia. Secretary Rice made a pretty tough critical speech against Russia, just a few days ago. I mean, she really ripped them. And she's coming here hat in hand, too, when it comes to Iran and North Korea, looking for the Russians to help.

So, it's going to be a very challenging and very interesting U.N. -- Kyra.

PHILLIPS: We'll follow it. State Department correspondent, Zain Verjee. Thanks, Zain.

VERJEE: Thanks, Kyra.

PHILLIPS: Well, now a dispute over the possible intended target of a hotel bombing in Pakistan. A government official says that the president and prime minister planned to dine at the hotel Saturday, but those plans changed at the last minute. Pakistani senator says that he was invited and the event was always to be at the prime minister's office. The bomb killed at least 57 people and wounded more than 260 others. No one has claimed responsibility but official suspect that al Qaeda or Taliban insurgents were involved.

The early birds are flocking to vote. Have you made up your mind in the presidential election? Thousands of people already have. And they've already proven it at the polls. When viewers start writing in all caps, you know they mean business. They're sounding off on the giant bailout and they're not happy about it.

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PHILLIPS: And here's what folks are telling CNNMoney.com about the giant bailout. Joe in Texas says, "Wall Street gets a bailout? Then the common man's credit scores should be increased, no questions asked, by 40 points across the board. How about that? It's not fair and equitable bailout for the common man."

And how about this from our good friend anonymous: "This is insane. Why are we rewarding idiots with bailouts? We can build an entirely new banking system for less than the $700 billion."

And Manoj says, "No financing by TAXPAYERS. All caps there, he's mad. The government should collect one trillion dollars from those who created the mess in the first place while government officials were sleeping and allowed it to happen."

Remember Social Security? Not so long ago that was the hot- button economic issue and it's still important and the presidential candidates are fighting over who can and can't be trusted to protect it.

CNN's Jim Acosta has the latest.

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JIM ACOSTA, CNN CORRESPONDENT (voice-over): In this key swing section of Florida, Sarah Palin told a sea of supporters, many of them senior citizens, that only John McCain can fix the mess on Wall Street.

GOV. SARAH PALIN (R), VICE PRESIDENTIAL NOMINEE: He told Congress -- he warned Congress that we needed to do something before these problems became a crisis. But Congress did nothing and now Americans are paying the price.

ACOSTA: But Palin had no response to a new line of attack from Barack Obama, who is trying to link the financial crisis to McCain's past support for changing Social Security. Changes the Democrats label as privatization.

SEN. BARACK OBAMA (D), PRESIDENTIAL NOMINEE: When I'm president, we are not going to gamble with Social Security. If my opponent had his way, millions would have watched as the market tumbles and their nest egg disappears before their eyes.

ACOSTA: For years, McCain has favored allowing young Americans to divert payroll contributions away from Social Security and into financial markets.

SEN. JOHN MCCAIN (R), PRESIDENTIAL NOMINEE: We have to go to the American people and say, we won't raise your taxes. We need personal savings accounts. But, we got to fix this system.

ACOSTA: Accusing Obama of entitlement fear mongering, the McCain campaign insists the Arizona senator is simply trying to keep the program solvent.

MCCAIN: I will not privatize Social Security.

ACOSTA: Democrats are also highlighting an article written by McCain in a trade magazine for actuaries, in which the Republican nominee calls for deregulating health care. Opening up the health insurance market to more vigorous nationwide competition, the senator wrote, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

OBAMA: So, let me get this straight. He wants to run health care like they've been running Wall Street. Folks, you cannot make this stuff up.

ACOSTA: Not so, says the McCain camp. But with Florida almost dead even, McCain supporters here want their candidate to steer clear of Social Security.

UNIDENTIFIED FEMALE: I don't think he's going to go through with it because he knows a lot of us are against it. I believe that anyhow.

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PHILLIPS: And as for that McCain magazine article, his campaign says that he was simply calling for greater competition in health care as a way to lower costs for consumers.

Six weeks to go until the election but some people aren't waiting. Early voted started today in Virginia, Kentucky and Georgia. And over the next few weeks, more than 30 states and Washington D.C., will allow early voting by mail or in person. Election officials are expecting a boom in early voting this year with more than 1/3 of retired registered voters expected to cast ballots. And of course, the votes won't be counted until election day.

The U.S. Mint gives a heads-up on four new penny design. But don't flip out, Abe's still on the front. Honest.

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PHILLIPS: Well, love them or hate them, pennies aren't going anywhere anytime soon. The U.S. Mint has just unveiled some special new designs for the one-cent piece. All four versions still feature Abraham Lincoln, don't worry. But instead of the usual Lincoln Memorial, the tails sides show different scenes from his life. The first one comes out February 12th, Abe's 200th birthday.

Oh, yes. The Joan Jetts still kick ass, or what? One of the original rocker chicks. Do you believe she's 50 today? Joan got her start in the '70s with The Runaways, an all-girl band by the way. But it was that song you just heard and you're still listening to, her cover of "I Love Rock and Roll," that smashed up the charts in 1982. This year she appeared in an episode of "Law and Order: Criminal Intent," playing a groupie queen. A happy 50th to Joan Jett.

Rick Sanchez. You think Joan's pretty sexy, right?

RICK SANCHEZ, CNN ANCHOR: Big fan. Big fan. Absolutely.

PHILLIPS: She can salsa.

SANCHEZ: She was in "The Jetsons," wasn't she? Wasn't she the dog? The one that went woof, woof, woof (ph), like that?

PHILLIPS: Oh, lord. Rick Sanchez, take it away. You're killing me. Crimson and clover. You know what? I'll bring my cassette, OK? That ages us.

SANCHEZ: Need some help.

PHILLIPS: See you tomorrow.