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Record Losses In Retail; Obama Threatens Veto If Democrats Try to Block TARP access; Marcus Schrenker found and arrested

Aired January 14, 2009 - 09:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Looking, not buying. New numbers so shoppers aren't shelling out. Record losses in retail sales.
And arctic express rolls out of the Midwest, east and southbound carrying a very frigid load.

It is Wednesday, January 14th. I'm Heidi Collins. You are in the CNN NEWSROOM.

This morning, we are watching your money from all angles. How the government is handling it, and what they plan to do next. This hour, an oversight committee plans to hear from experts on how to reform and revitalize America's financial system.

Part of that involves the $700 billion financial rescue program. President-elect Obama wants Congress to release the second half of that bailout now before he takes office next week. He says there is no time to waste.

Mr. Obama is actually threatening a veto if fellow Democrats try to block his access to that money.

And we just got a new measure of the economic situation right now. The latest retail numbers.

Let's go ahead and talk about those numbers now that came out about a half an hour ago or so. Our Christine Romans is live in New York with the very latest.

So, Christine, boy, we knew these numbers weren't going to be very good, especially when we looked at the Christmas shopping season and all of that. But put it in perspective for us. 2.7 percent. What exactly does it mean?

CHRISTINE ROMANS, CNN CORRESPONDENT: It means that people spent less than we thought they were going to spend, much less than we thought. We knew it was going to be a tough number. We know that the environment was tough for retailers and consumers but, in fact, it was worse, Heidi, than -- really anybody had thought.

Much worse than any of the estimates that I had heard. In fact, now for six months in a row, American consumers are spending less than they did the month before. That hasn't happened in 40 years of keeping these records.

This is the longest stretch of consumers pulling back that we have seen in modern times. And it tells you that the American consumer is strapped, either concerned about losing their job or has lost their job. Concerned about losing their home or concerned about mortgage payments or concerned about the economy so much that they are spending less.

2.7 percent is what the decline was for retail sales. I say this a lot, Heidi, these are the kind of numbers that we usually measure in just -- a little bit, a few percentage points, and they almost always go up. For six months in a row they've gone down.

I struggled to find a category, Heidi, where you saw people spend a little bit more. And you saw a slight increase in spending in health and personal care stores like drugstores and things like that, health stores.

I think what that's showing you is that people are pulling back on restaurants, on hotels, even spending less at the -- at the gas tank partly because gas prices are cheaper but partly because they're going fewer places and they're buying essentials. They're really just buying essentials.

COLLINS: Or maybe they're buying a lot of aspirin.

ROMANS: Yes. Aspirin, may be right. Alka-Seltzer, right?

COLLINS: Yes.

ROMANS: But it shows that the consumer is strapped, the consumer is nervous, and maybe chastened, maybe realizing that over the past few years there was a credit bubble and a bubble of -- a bubble of spending, and it popped, and now we're trying to figure out what's going to be more normal.

So, health and personal care, a little bit of an increase there, but really across the board, people are spending less. They are spending less money, pulling back. It's something that is very, very rare. Six months in a row.

The one bright spot here, a lot of the economists are saying they don't see any turnaround here either. They don't see any kinds of signs that maybe the worst is behind us. But one thing I will point out, mortgage rates are incredibly low. And...

COLLINS: Yes.

ROMANS: And I think every morning we go on and we keep saying, everybody, mortgage rates are really low. So some of the medicine that your government has been taking to try to lower mortgage rates, those have been low. So that is a bright spot for consumers who are, who are willing or able to refinance and if it's appropriate for them, or moving for a new job somewhere and they're -- going to be a first- time home buyer.

COLLINS: Right.

ROMANS: Very low mortgage rates, Heidi. COLLINS: OK. Well, yes, that's certainly a bright spot especially from where we were just a few months ago.

All right, Christine, thanks so much for watching those numbers. Appreciate that.

Getting back to Capitol Hill now. Here's the congressional oversight panel hearing on the financial bailout money. Some live pictures for you there.

President-elect Barack Obama wants it now. But he's getting some pushback from fellow Democrats.

CNN's congressional correspondent, Dana Bash, with the story.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice over): Barack Obama went behind closed doors and pleaded with skeptical fellow Democrats to give him what he needs to fix the economy -- authority to use the remaining $350 billion taxpayer dollars of the controversial Wall Street bailout fund.

SEN. BEN NELSON (D), NEBRASKA: I'm undecided. But I'm certainly not leaning in favor of doing it.

BASH: But it is a very tough sell, even though it's their popular fellow Democrat making the hard pitch.

NELSON: I understand that the -- president-elect wants to move forward, and I'd like to be supportive. But I'm not going to make -- I'm not going to be pushed into -- quick judgment on this, given all the circumstances.

People back home, generally, didn't want the first go-round and I'm not going to jump out and -- in front of a train on this second one.

BASH: Ben Nelson is one of nearly a dozen Senate Democrats CNN talked to who say the first $350 billion was so mismanaged and so unpopular they are extremely wary of approving more, even if Mr. Obama promises to handle it better.

SEN. DEBBIE STABENOW (D), MICHIGAN: It's not enough just to have someone that you trust. We have to have specific criteria as to what is going to be happening. Will there be accountability, transparency? Which I didn't get answers.

SEN. BLANCHE LINCOLN (D), ARKANSAS: There's a lot of us that need some reassurance.

BASH: Blanche Lincoln is one of many Democrats getting bombarded by outraged constituents warning against more money from Wall Street.

UNIDENTIFIED FEMALE: She's not taken an official stance on it, ma'am. But if you have an opinion, I'll be more than happy to pass it along to her.

BASH: Like many of her colleagues, Lincoln is torn between answering to the folks back home and her new Democratic president.

LINCOLN: We need to have a better understanding and a better idea of how those dollars are going to be spent and where they're going to go.

BASH (on camera) Several Democrats senators came out of their meeting with Mr. Obama and said they do feel more comfortable with the fact that he will make changes in this controversial program. Things like more transparency and more money for homeowners.

Still, many Democrats say they're just not sure they can back him on this first remarkable test of his clout and his power of persuasion.

Dana Bash, CNN, Capitol Hill.

(END VIDEOTAPE)

COLLINS: President-elect Barack Obama meeting with his number two today, getting a firsthand assessment on Iraq and Afghanistan. Vice president-elect Joe Biden is just back from the region.

CNN's White House correspondent, Suzanne Malveaux, is joining us now live this morning with more on that.

Good morning to you, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Heidi. Well, that's what we expect that Vice president-elect Joe Biden as well as Senator Lindsey Graham, who was with him in Baghdad and Afghanistan, both of them will be briefing President-elect Obama about their trip, about what they saw, in both those areas.

Obviously, Barack Obama making a point before that he is going to try to withdraw troops, U.S. troops, from Iraq as quickly as possible, perhaps in the next 18 months or so. Also, making it very clear that he plans to bolster U.S. forces inside of Afghanistan, as the situation there has deteriorated.

So it'll be very interesting to see what comes out of that meeting.

I should also let you know as well, Heidi, we're just getting some information here, reaction from the White House here from the Bush administration, NSC spokesperson Gordon Johndroe on the audiotape allegedly of Osama bin Laden, the message that he sent to President Bush, Barack Obama, calling for a jihad, a holy war, against Israel for the strikes that have taken place in Gaza recently.

Want to read this to you. Just getting on the BlackBerry here. It says, "While I won't speak to the authenticity of the audiotape, that is for others, it appears this tape demonstrates his isolation and continued attempts to remain relevant at a time when al Qaeda's ideology, mission and agenda are being questioned and challenged throughout the world. This also looks to be an effort to raise money as part of their ongoing propaganda campaign.

"The United States promotes an alternative, hopeful ideology while continuing to partner with over 90 countries to pursue terrorists wherever they are."

This from the White House just getting in, reacting to that audiotape that was released that we have been playing throughout the morning, purportedly from Osama bin Laden -- Heidi?

COLLINS: All right, Suzanne, yes, we didn't expect to have reaction quite so quickly on that.

Also out this morning is some news regarding a Don't Ask, Don't Tell policy. It's a 15-year-old policy now and President-elect Obama says that he is considering putting an end to that.

What's the very latest?

MALVEAUX: Well, during the campaign, he actually talked about that, how he felt that this was a policy that really wasn't relevant anymore, that he was against, and it was just on Friday, on the transition Web site, his spokesperson, Robert Gibbs, was asked quite directly, from someone who had logged in, asking questions of Obama and the campaign.

And he said, will he repeal this policy, and Robert Gibbs said that you rarely get a one-word answer from a politician. But he said in one word, "yes," and then Robert Gibbs weighed in this morning at CNN, talking to CNN saying, that look, you know, the number one priority, obviously, is going to be addressing, jump-starting the economy.

But he says Barack Obama will be true to his word, that he will repeal that policy, it will be interesting to see how he works with Congress in doing that. As you know, Congress has a role in this as well, Heidi?

COLLINS: Sure, of course. All right, CNN's White House correspondent, Suzanne Malveaux, on a variety of topics this morning.

Suzanne, thanks so much.

Capitol Hill, though, buzzing with more confirmation hearings today. Senate committees getting to question perspective members of President-elect Barack Obama's Cabinet. Three of those hearings starting next hour.

Former army chief of staff, General Shinseki, is nominated for secretary of Veterans Affairs. The retired four-star general has promised to modernize the system and provide more benefits for middle- income veterans.

Also, Tom Vilsack is the nominee for agriculture secretary. The former two-term Iowa governor was the first Democrat to declare the presidential election in 2008. He will be in charge of shepherding President Bush's $290 billion farm bill.

Also next hour, we're going to be hearing from Lisa Jackson. She is Obama's choice to head the Environmental Protection Agency. She's gained wide support on both sides of the aisle already. Jackson is a former EPA employee and head of New Jersey's Department of Environmental Protection.

So we'll be watching all of those for you.

ANNOUNCER: You're watching CNN, your severe weather headquarters.

COLLINS: Bone-chilling, brutally cold weather, and if you don't already have it, you should get ready for it. That blast of cold air to hit the middle of the country yesterday is actually heading east now today.

And look at that, blizzard-like conditions in Cleveland, Ohio. Then in Minnesota, dangerously cold temperatures and icy streets causing a whole lot of highway accidents. The wind chill made it feel like 50 -- yes, five zero -- below in some places.

And in Wisconsin, the severe cold is blamed for one death. More below-zero temperatures on tap for today.

It seems like a great time to get over to Rob Marciano to tell us a little bit more on about this.

Boy, Rob, I mean, cold is just such an understatement.

ROB MARCIANO, CNN METEOROLOGIST: Yes, this is some of the coldest air we've seen in years, certainly the coldest air of the season. It just keeps coming down. The pattern really has shifted to where everyone east of the -- Rockies are going to see some seriously cold air.

This is a striking number. Chicago O'Hare is seeing 4 1/2-hour delays.

COLLINS: Ooh.

MARCIANO: At last check.

COLLINS: Go home.

MARCIANO: Yes. So the cots may very well be out again. They probably didn't put them away from when they were using them the other night.

(WEATHER REPORT)

COLLINS: That's what we need to have a shot of so we can all just sort of pretend like we live there.

MARCIANO: We will. When the -- the sun's coming up there now so we'll get a live picture for you in the next couple of hours. COLLINS: Hey, what a great idea.

MARCIANO: All right.

(LAUGHTER)

COLLINS: Rob, all right, thanks very much, appreciate that.

MARCIANO: All right. You got it.

COLLINS: Shuttling across the Middle East, in search of a cease- fire. The latest on diplomatic efforts to end the fighting in Gaza.

(COMMERCIAL BREAK)

COLLINS: In the Middle East, cease-fire talks ramp up as rockets keep raining down. The United Nations secretary-general has gone to the region demanding an immediate cease-fire.

From Egypt Ban Ki-moon heads to Jordan and then Israel. He said he also wants to go to Hamas-controlled Gaza, but he's not sure that's possible with all the fighting.

The Israeli offensive is in its 19th day now and Palestinians say the death toll is nearing 1,000. About a third of them children.

In addition, there was more rocket fire on Israel as well, to the north and in the south.

CNN's Paula Hancocks is on the border with Gaza with the very latest now.

Paula, what's it like from your vantage point today now?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Heidi, today, I'm actually in Jerusalem, where we're watching the U.N. secretary- general, Ban Ki-moon, in Egypt. He was meeting with the Egyptian president, Hosni Mubarak, a little earlier on.

He also gave a press conference talking about how urgent the need for a cease-fire was. He has said this over the past couple of days.

There was a U.N. resolution last week, but it was ignored by both sides. So now he's here in person to try to hammer home the point.

(BEGIN VIDEO CLIP)

BAN KI-MOON, U.N. SECRETARY-GENERAL: I've been urging in the strongest possible calm. Both sides must stop fighting now. We don't have any time to lose. Then we can discuss and elaborate the cons and conditions as the Egyptian government will lead that initiative. How to make this truce last.

(END VIDEO CLIP)

HANCOCKS: The Israeli military says it is continuing to encounter clashes with Hamas fighters and other Palestinian fighters in and around Gaza City and, of course, as the troops head closer into the more populated areas, where they believe the militants are still firing rockets from, there is a serious worry that the already high civilian death toll will go even higher.

As you say, it's almost 1,000 now, a third of them children. The injuries of 4,400 at least, a third of them, again, children.

Now on the other side, we also know that at least 12 rockets have been fired into Israel, so still Israel has not managed to stop the rockets. Certainly it's nothing like what we were seeing 2 1/2 weeks ago.

There was about 70 rockets a day heading into Israel then, but they are still managing to hit Israel. No casualties as far as we know.

And of course, that three-hour lull happens once again between 1:00 and 4:00. 111 trucks, according to Israel, headed into Gaza. But, of course, the aid agencies say three hours is not enough to be able to give that aid to 1.5 million residents.

COLLINS: Wow, all right, Paula Hancocks following this story for us live from Jerusalem this morning.

Thanks so much, Paula.

Grounded. An amateur pilot captured after authorities say he faked his death in a plane crash. Now what we know about his other troubles with the law.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN, the most trusted name in news. Now back to the CNN NEWSROOM.

COLLINS: He was a financial manager who lived the high life, even soaring skyward as an amateur stunt pilot. But authorities now say Marcus Schrenker was defrauding clients and even faked his death in a plane crash.

Schrenker was captured last night and CNN's Brooke Baldwin is in Tallahassee, Florida now with the very latest.

All right, what happened last night, Brooke?

BROOKE BALDWIN, CNN CORRESPONDENT: Well, Heidi, we are learning more and more now about what went down at this rural campsite outside of Tallahassee when U.S. Marshals were able to capture 38-year-old Marcus Schrenker.

They found him in a tent, bleeding profusely, suffering from a self-inflicted gash on one of his wrists, they say, in an apparent suicide attempt. I want to first listen to one of the marshals describing that capture. He spoke earlier on "AMERICAN MORNING."

(BEGIN VIDEO CLIP)

JOHN BEEMAN, U.S. MARSHAL: My understanding is our investigation led us to this campground. Information that was developed at the Marshal Service Task Forces both in Alabama and Florida.

And they approached the campground. He was identified by the campground manager. And they made an approach on the tent that Mr. Schrenker was in, and then once they made contact, they quickly realized that he had been injured or -- a self-inflicted injury.

KIRAN CHETRY, CNN ANCHOR: So you...

BEEMAN: And they immediately started medical assistance to Mr. Schrenker, stopped the bleeding, and then got a medical flight in there to get him to a hospital.

(END VIDEO CLIP)

BALDWIN: Now I just got off the phone with one of the marshals who was there last night, Frank Shaminto, and he told me about 20 marshals surrounded -- surrounded Schrenker's tent right around 9:00 last night. They received -- he didn't want to call it a tip. But based upon some information they got out of the Birmingham -- the Birmingham branch of the marshals.

They were able to move in. It was there at the campsite, Heidi, that they found that red -- they found the red motorcycle that Schrenker apparently stashed away in Alabama about 218 miles away.

When they found him, he'd lost so much blood that he was incoherent. He was muttering some words that were just simply unintelligible. One of the words, though, it was very clear was "die."

Frank Shaminto told me, die, as in I want to die, leave me alone. Apparently, they could -- just looking around in his tent. He was alone. He had food. He had water. He had enough material to survive, they say, to be on the run for quite some time.

And so much blood, Heidi, that had the marshals not -- had not shown up within an hour, they're guessing he would have died.

COLLINS: Yes, I guess the ...

BALDWIN: Heidi?

COLLINS: ... the injury was so severe.

Quickly, Brooke, if -- they're commenting on this yet...

BALDWIN: Yes.

COLLINS: ... after he is medically stabilized, assuming that that may happen, what's the next step for authorities?

BALDWIN: Good question. I asked that question. They said, they're waiting to determine whether or not charges might be filed in Florida if that is the case. Pertaining to the plane crash in Santa Rosa County, if that's the chase, they may keep him in Florida, he'll face those charges and then be extradited back to Indiana where he's facing security fraud charges. So we just don't know yet.

COLLINS: Got it. All right, Brooke, we know you'll be following it. Thanks so much.

Brooke Baldwin from Tallahassee this morning.

More (INAUDIBLE) not against the law. Washington state does not bar teachers from having consensual sex with 18-year-old students. A state appeals court made that ruling yesterday dismissing a case against a former high school choir coach, accused of having sex with a graduating senior.

(BEGIN VIDEO CLIP)

ROB HILL, ATTORNEY FOR TEACHER: The consequence for violating that is the loss of a job and possibly a career. And I think that's a sufficient consequence, particularly when other professionals do not have any more consequence than that.

(END VIDEO CLIP)

COLLINS: The state's Code of Professional Conduct for Teachers still prohibits any sexual advances or contact with students of any age, and they can still get fired for it.

Gaza, struggling with a severe water shortage now, as Israel's military assault goes on. We'll tell you the price people are paying just to get drinking water.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.

COLLINS: On Wall Street, the Dow is riding a five-session losing streak. So, will that selling continue today?

Susan Lisovicz is at the New York Stock Exchange now with a preview of the trading day.

Do you have any bright spots for us today, Susan? We are looking.

SUSAN LISOVICZ, CNN CORRESPONDENT: I'm -- I'm thinking about that. I'm thinking hard, Heidi. You know, I think oil prices are -- are low. They're under $38 a barrel. We're going to get an inventory report in an hour, which probably will put more pressure on oil prices.

And, again, we, consumers, are the beneficiaries of that.

(BUSINESS REPORT) COLLINS: Other numbers, too, your money front and center this morning on Capitol Hill. Right now, an oversight committee plans to hear from experts on how to reform and revitalize America's financial system. Live pictures there for you. Part of that, of course, involves the $700 billion financial rescue plan.

President-elect Obama is personally lobbying senators to approve the release of the remaining half of that bill, $350 billion. He told them it is essential to help the ailing economy. And last hour, the government released retail sales numbers, we've talked about it here, which plunged 2.7 percent last month. Now, that is a record sixth straight decline.

An appeal being heard today in the Bernie Madoff case. Federal prosecutors are asking a judge to overturn the decision, allowing Madoff to stay under house arrest instead of going to prison. Madoff will be in the courtroom today, and on Monday a judge ruled prosecutors did not prove Madoff was a flight risk. The plea from prosecutors came after Madoff was accused of mailing millions of dollars worth of jewelry to family members. Madoff is accused of swindling billions of dollars from investors.

Potential trouble for one of President-elect Barack Obama's cabinet choices. Treasury Secretary nominee Tim Geithner failed to pay self-employment taxes while working at the International Monetary Fund. That was back in 2001 and 2003. The problem was discovered this past November. Geithner has paid back taxes with interest. President-elect Barack Obama is standing by his choice. The confirmation hearing is scheduled for Friday.

But coming up next hour, we're going to talk a little bit more about this with a reporter for The Wall Street Journal. Again, more about Tim Geithner's tax problems.

Meanwhile, what to do with the $350 billion left in the bailout program. President-elect Barack Obama wants to use that money now. His insistence causing some friction with members of his own party.

CNN's senior political correspondent, Candy Crowley, has more.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): A veto threat before taking office. History continues to be made as a not-yet president threatens a veto if fellow Democrats try to block his access to the remaining $350 billion in an emergency bailout fund.

Barack Obama pushing back in the face of vocal, significant objections.

SEN. BEN NELSON (D), NEBRASKA: People back home generally didn't want the first go-round. And I'm not going to jump out in front of a train on this second one.

CROWLEY: The incoming president played the veto card at a Democratic Party lunch in what's described as a spirited discussion. Furious with the way the Bush administration handled the first $350 billion, lawmakers are unwilling to repeat that kind of history.

SEN. DEBBIE STABENOW (D), MICHIGAN: It's not enough just to have someone that you trust. We have to have specific criteria as to what is going to be happening. Will there be accountability, transparency? We can't even get answers.

CROWLEY: This has the potential to be ugly and politically damaging. If Barack Obama has to veto a bill from the Democratic- controlled Congress as one of his first Oval Office acts, it would be interpreted as a major setback for a new president. Which is why most objections begin with, I'd like to be supportive but...

SEN. RON WYDEN (D), OREGON: But you have to examine this new piece of legislation through the filter of some very unfortunate history with respect to the original program.

CROWLEY: Despite the bruising once-over his request is getting, ultimately the Obama team believes the Senate will not block his access to the money. The Senate's top Democrat concurs.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I think we will get the necessary votes, yes. I feel very confident about that.

CROWLEY: But first, Democratic and Republican lawmakers want a little cover to calm angry tax-paying constituents who want to know what happened to the first $350 billion, money that does not seem to have done anything to help their lives.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

(WEATHER REPORT)

COLLINS: A man's home is supposed to be his castle, but one Minneapolis man celebrated his love for the cold by building a castle in his home. Check this out now. Roger Hanson (ph) sculpted this 30- foot-high, 100-foot-long ice castle in his backyard.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's supposed to be a dragon. It was supposed -- the original intent this year was supposed to be a dragon.

UNIDENTIFIED FEMALE: Do your neighbors think you're nuts?

UNIDENTIFIED MALE: Oh, I guess so. Yes.

(END VIDEO CLIP)

COLLINS: Not seeing the dragon. Hanson is a computer programmer, but his real love is science and the cold. So he forged the ice monument to pay homage to science, love, and creativity.

A third day in Gaza without running water, because of Israeli bombs. Getting it is costing the people of Gaza dearly. (COMMERCIAL BREAK)

COLLINS: A fresh call now for a cease-fire in Gaza. U.N. Secretary-General Ban Ki-moon, who is traveling in the region today, called for an immediate halt to the fighting. This as Israeli warplanes pound Gaza for the 19th day. And meanwhile, the constant bombardment has left a third of Gaza without running water.

CNN's Ben Wedeman reports.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): He has made a list, checking it twice. Kamal Matar's list of customers eager to buy his water is long and getting longer.

"People have been four days without water," he tells one of them on the phone. "Be patient. I don't think I can make it today. Three days ago I brought you 500 liters. You know how things are."

Since the Israeli offensive began on December 27th, Gaza has been hit by a severe water shortage. Electricity needed to pump water out of the ground and into the pipes is unreliable at best. Water mains have been damaged by Israel's bombardment.

The United Nations reports that 500,000 people, a third of the population of Gaza, have no access to running water. The price of 1,000 liters of water, about 250 gallons, has more than doubled from around $7 to as high as $15.

"My phone doesn't stop ringing," says this water vendor. "From 5:00 in the morning until I go to bed."

During the few hours of the day when hostilities ebb, it's a rush to restock, and that includes water.

UNIDENTIFIED MALE: So, I think this is a typical Palestinian home, since at least I would say the Israeli (INAUDIBLE) operation in the Gaza Strip.

WEDEMAN: Even Munzar Shablac (ph), the man who runs Gaza's water company, has to buy from vendors and store it where he can. But for Hassan Hasoun (ph), who owns a plumbing supply store, the chaos has brought opportunity. He's fitting faucets to plastic jerry cans, useful when nothing comes out of the tap. Gazans are accustomed to making due in hard times, come hell or no water.

Ben Wedeman, CNN, Jerusalem.

(END VIDEOTAPE)

COLLINS: The gas dispute between Russia and Ukraine continues to heat up. The E.U. leaders, frustrated by the bickering between the two companies, say both have shown they are unable to fulfill their obligations to the European consumers. They recommend suing the companies to get their gas turned back on if the issues are not resolved urgently. The two countries signed a deal Monday to resume shipments of Russian gas through Ukraine, but that has yet to take effect.

Setting prices too high, one major health care company accused of fraud now promising to change their charges.

(COMMERCIAL BREAK)

COLLINS: A former police officer accused of shooting an unarmed man at an Oakland train station has been arrested. Johannes Mehserle was picked up in Nevada on a fugitive warrant. Oscar Grant was killed on New Year's Day while lying facedown on a train station platform. Mehserle resigned his transit officer's job days after the shooting. The incident has led to protests, one of them turning violent in the Bay Area. Transit police officers are investigating the shooting.

A 25-year-old man has been charged with the killing of his girlfriend and her four young children. Summer Garas and her children were found dead in their Oklahoma home on Monday. Investigators have not given a motive for the killings. The suspect, Joshua Durcho, who you just saw, was released to a Texas state trooper at a hospital last night. He had been treated for injuries from a car accident.

Thousands of firefighters from the U.S. and Canada gathered to pay final respects to one of theirs who was killed on the job. A wake for Boston firefighter Kevin Kelley was held yesterday.

(BEGIN VIDEO CLIP)

SUSAN KELLEY, DAUGHTER OF KEVIN KELLEY: Our dad was a great guy. We loved him. He loved his family. He loved taking vacations, and we hope that he is going to be happy where he's going. And we are going to miss him.

ROBERT O'NEILL, DRIVER: I'm very proud of Lieutenant Kevin Kelley, he was a hero. And I listened to him, and he saved all our lives. I'm devastated by the loss. My thoughts and prayers are with the entire Kelley family each and every day.

(END VIDEO CLIP)

COLLINS: Kelley was killed when the ladder truck he was in swerved and careened down a hill and crashed into an apartment building.

Millions of patients may now pay less for their out-of-network health care as part of a settlement with UnitedHealthcare. The company is setting up a new payment database in response to accusations of price fixing.

CNN's Kitty Pilgrim has more.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Mary Jerome (ph), a cancer patient, sick and struggling with staggering medical bills her insurance company won't fully cover.

MARY JEROME, CANCER PATIENT: I felt like I was fighting two battles, one with my cancer, and trying to bring up courage enough to fight that, and then to be forced to face another battle was very difficult.

PILGRIM: She is one of an estimated 110 million people who were ripped off by her insurance company. New York Attorney General Andrew Cuomo's office, after looking at millions of medical bills for out-of- network care, discovered that some of the biggest insurers in the country were in an alleged scheme to defraud consumers, by setting reimbursement rates too low, and says, Cuomo's office, it went on for 10 years.

The company that set the reimbursement rates, Ingenix, was owned by insurance company UnitedHealthcare Group. And according to Cuomo, low-balled reimbursements by 10 to 28 percent.

ANDREW CUOMO, NEW YORK ATTORNEY GENERAL: In our opinion, the usual customary rates are controlled by the industry. It was a closed system. It was a closed loop.

PILGRIM: Nearly all the insurers in the country were using the same low reimbursement rates from Ingenix: Aetna, Cigna, UnitedHealthcare, and WellPoint, as well as smaller insurers.

Consumers complained they felt trapped.

CUOMO: Whatever insurance company you went to, they were all using the same source of data, they were going to reimburse you the same amount of money.

PILGRIM: UnitedHealthcare Group admitted the problem.

THOMAS STRICKLAND, UNITEDHEALTH GROUP: We regret that conflicts of interest were inherent in these Ingenix database products.

PILGRIM: But consumer advocates say it was an outrage.

ROB SCHNEIDER: Consumers have been paying increasing health care premiums for year after year. What they should be able to count on is that the insurance company, when they go out of network, is going to calculate what a fair price is.

PILGRIM: After 10 years, now insurance companies will have to.

Kitty Pilgrim, CNN.

(END VIDEOTAPE)

COLLINS: Health officials are urging nursing homes, hospitals, and restaurants to throw away certain containers of peanut butter after a salmonella outbreak. We talked about the story here yesterday. Peanut butter distributed by King Nut Companies is being recalled. Minnesota health officials said they found a link between a King Nut container and strains of salmonella that have spread across the country. The outbreak has affected more than 400 people now across 43 states. Three deaths have been reported. King Nut challenged the finding, saying it only distributes to food service providers in seven of those states.

Crowd control. A city used to hosting big events now may have to handle a couple of million people. How Washington is preparing for the Inauguration.

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COLLINS: There are estimates of from 1 million to 2 million people coming to the Inauguration, and that adds up to big challenges for crowd control.

Here now, more from CNN's Jeanne Meserve.

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JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): Porta-potties (ph) side by side, row upon row on the National Mall in preparation for a very big inaugural crowd. A poorly-managed crowd can be destructive, even deadly. Just a few weeks ago, a Wal-Mart security guard was trampled by shoppers on the hunt for a bargain.

Inaugural officials have consulted a crowd management expert, who has studied events like the Haj, the annual pilgrimage to Mecca.

HANI MAHMASSAN, NORTHWESTERN UNIVERSITY: People have learned from the mistakes that have been made in terms of massing very large numbers of people there, in terms of having hard starts, where you simply open the floodgates and then you get these stampedes through.

MESERVE: Washington is used to big gatherings like Fourth of July celebrations and the police know how to handle a crowd. But the challenges on Inauguration Day could be unprecedented.

CHIEF CATHY LANIR, D.C. METROPOLITAN POLICE: Information is my best friend.

MESERVE: Text messages, jumbotrons (ph), and loud speakers will all be used to communicate with a crowd in an emergency. If long waits lead to frustration and anger, officials have plans to diffuse it.

LANIR: We actually have customer service folks that will be walking up and down lines of people, giving them maps, and telling them where to go, and, you know, kind of being ambassadors to make people feel, you know, a little more comfortable with what they want to do.

MESERVE: Officials are already publicizing the basics, screening check points will open at 7:00 to let the first 300,000 or so people on to the parade route. Backpacks, coolers, strollers, large umbrellas will all be banned. Restrictions will be looser on the Mall, where the overflow will be sent. Spectators who choose can stake out a Mall spot early, though camping is prohibited.

Officials deny that they are trying to discourage people from attending.

UNIDENTIFIED MALE: It's quite to the contrary, our efforts are to make sure that people are safe. We would like for as many people to come as want to come.

MESERVE: Some experts say the number of portable toilets, estimated at 5,000, is grossly inadequate for the crowd. Others are worried about food and drink. Planners believe they're about as ready as can be, but warn this will not be your average day out. People should plan carefully, and dress for the weather.

Jeanne Meserve, CNN, Washington.

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COLLINS: Boy, that's for sure. Talk about a front row seat to history, a 90--year-old Chicago man who witnessed Martin Luther King's "I Have a Dream" speech 45 years ago, is now heading to Washington to witness Barack Obama sworn in as president. Timuel Black and his wife got the tickets to the Inauguration thanks to Illinois Senator Dick Durbin.

(BEGIN VIDEO CLIP)

TIMUEL BLACK, GOING TO INAUGURATION: I just felt that that was not going to happen to a guy like me, an ordinary guy. I knew him well enough in terms of his personality that the sky was the only limit.

(END VIDEO CLIP)

COLLINS: Black said he met Obama when he was a community organizer, working on the South Side of Chicago. Black is a former college professor who has written two books.

CNN's live Inauguration coverage kicks off Tuesday morning -- excuse me, January 20th at 5:00 a.m. Eastern. You can watch the Inauguration live, or on cnn.com. And share this historic event with your friends and family on Facebook. Let's take a look at comments and update your Facebook status, all in one place. Be a part of history. Go to facebook.com/cnn to RSVP.

One decade before he announced his run for the White House, even before he got into politics, Barack Obama was in the spotlight. CNN's Deborah Feyerick tells us about the lasting impression he and Michelle Obama left on one photographer.

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DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Long before they were America's first couple, some 12 years ago Barack and Michelle Obama posed for photographer Mariana Cook, who was on a quest to find out about relationships in America for her book, "Couples."

(on camera): This is the camera that you used to shoot the Obamas.

MARIANA COOK, PHOTOGRAPHER: It's a (INAUDIBLE), two-and-a- quarter.

FEYERICK (voice-over): Cook, who has shot the likes of playwright Lillian Hellman and former French President Francois Mitterrand, says she was struck by the low-key couple.

COOK: They talked easily together. There was no tension between them.

(on camera): (INAUDIBLE) -- his face is more open, she is a little bit more serious.

COOK: They're different people. They each have their own minds and feelings and they're very different. And yet from the body language, you can see how comfortable they are together. She is leaning into him. She is resting her hands on his knee. His hands are open, and entirely relaxed. They haven't changed, really.

FEYERICK (voice-over): Cook says she can't remember why she chose the Obamas, just that many of the couples were referred by word of mouth.

COOK: So at the time, he was a lawyer and a writer, and I guess if I had been told that he was going to be president of the United States one day, I would have paid more attention, but...

FEYERICK: In fact, the Obamas never made it into the book. Though a more controversial couple whose name surfaced during the 2008 campaign did.

FEYERICK (on camera): Oh, and Bill Ayers, look at that. Oh, isn't that a -- they made the book.

COOK: They made the book.

FEYERICK: The Ayers made the book.

(voice-over): The photo, which appears in this week's New Yorker magazine, was accompanied by interviews the photographer did with the couple married four years.

COOK: There is a strong possibility that Barack will pursue a political career, although it's unclear.

FEYERICK: Cook has shot more than 400 portraits since the Obama photo shoot, but says something in him stood out even then.

COOK: He really had a vision of what this country needed. There is a depth to him. You can see it in his eyes.

FEYERICK: Deborah Feyerick, CNN, New York. (END VIDEOTAPE)