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President Obama to Lobby Dems on Budget; Signs of Better Times?; Unemployed Respond to President; Drug Violence at the Border; Less Money Going to Mexico; Newspapers Going Extinct?; Dakotas Bracing For More Wet Weather; Obama, Scheffer Discuss NATO Summit

Aired March 25, 2009 - 10:59   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: Good morning, everyone. It is Wednesday, March 25, and here are the top stories in the CNN NEWSROOM.

President Obama heads to the Capitol today on a mission to keep Democrats in line with his budget blueprint.

Volunteers are filling sandbags, but it looks like a mission impossible. Ice jams could cause historic flooding in North Dakota.

And a bloody battle between drug cartels right in our back yard. Next hour, the U.S. secretary of state representatives in Mexico City to focus on the violence along the border.

Hello again, everyone. I'm Fredricka Whitfield, in for Tony Harris, and you're in the CNN NEWSROOM.

President Obama trying to sell his $3.6 trillion budget. The president heads to Capitol Hill next hour to lobby lawmakers. Not Republicans, fellow Democrats. In a prime-time news conference last night, the president said the budget is inseparable from the overall recovery effort.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we don't face another crisis like this 10 or 20 years from now. We invest in the renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil. We invest in our schools and our teachers; that our children have the skills they need to compete with any workers in the world. We invest in reform that will bring down the cost of health care for families, businesses and our government.

(END VIDEO CLIP)

WHITFIELD: Congressional Correspondent Brianna Keilar joins us live now from Capitol Hill.

So is his message to Democrats any different than the message to Republicans?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: It is different, and that's because he is getting a little pushback from some key Senate Democrats on his budget, and it has been pared down. In fact, at the hand -- by the hand of the Democratic chairman of the Senate Budget Committee.

So some of the things that you're not going to see in this proposal coming from Senate Democrats, President Obama's signature tax cut. This is a big thing.

After 2010, it is not in the plan, according to Senate Democrats on the Budget Committee at this point. That's that $400 tax cut for individuals, $800 for couples.

Also, that $250 billion that the Obama administration had put in their plan in case there needed to be more bank financial rescues, not in this plan coming from Senate Democrats. And also, there is no money to pay for increases in payments to doctors who see Medicare patients, and that one in particular getting some scorn from Republicans, who say it's just Democrats fudging the numbers, because that money is going to have to go out, and they're just not accounting for it.

But today, Fredricka, yes, our focus is on Senate Democrats that President Obama is meeting with, because they have some concerns about the spending, they have some concerns about the size of the budget. And that's going to be a big topic of discussion today when he meets with them.

WHITFIELD: And Brianna, you have to wonder, we know he is very familiar with Capitol Hill, he spent a little time there as a senator. But his meeting with the Democratic lawmakers, why is this meeting taking place on the Hill when he no longer really has home field advantage?

KEILAR: Well, it's important. It's sort of a sign for him to come to the Hill, first off, to come to their turf. But today is the day, because you have the budget committees in both the House and the Senate. They are meeting, and they're hashing out their proposals, their budget proposals, that would change what President Obama came up with.

You can see right here, this is the House Budget Committee already under way, and they're hashing out a process which we call a markup here on Capitol Hill. A lot of changes are going to be happening today, perhaps votes in this committee, Fredricka, as early as today. So this is really the day to be here for President Obama.

WHITFIELD: All right. Brianna Keilar, thanks so much. We'll keep checking back with you there on Capitol Hill.

The economy got a little bit of breathing room today. U.S. factories, in fact, turned out more household appliances, furniture and other big-ticket items than expected in February. The government says orders for durable goods rose 3.4 percent. Analysts had expected them to tumble again. This is the first increase since summer.

New home sales also did a surprising about-face in February. They're up 4.7 percent, spurred by falling prices and low mortgage rates. Still, new home sales were off 40 percent from February of 2008.

(STOCK MARKET REPORT)

WHITFIELD: All right. Well, it's a common sight these days, long lines at job fairs around the country. But one company was having a hard time attracting a crowd at a job fair in Santa Ana, California. The company? AIG.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: AIG has one person in line.

UNIDENTIFIED MALE: Exactly.

UNIDENTIFIED MALE: You don't want to go over to AIG and...

UNIDENTIFIED MALE: Not at all.

UNIDENTIFIED MALE: Well, I heard they give good bonuses.

UNIDENTIFIED MALE: In top management. So if I can get a top management job and get everybody fired, I'll probably get a job.

(END VIDEO CLIP)

WHITFIELD: Well, the AIG recruiter says jobs were actually available to qualified applicants.

President Obama says we're moving in the right direction on the economy. And as we mentioned, there are some signs that could be encouraging.

Let's bring in our Chief Business Correspondent Ali Velshi. He is in New York on the air with his radio show.

Good to see you.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Great to see you, too.

WHITFIELD: All right. Well, let's talk first about those -- I know you've been boasting of those durable goods, an increases there. How encouraging?

VELSHI: Well, look, there are a bunch of economic indicators right now for the last few weeks that we've seen do well. Now, I must start by saying that is not a trend. But let me tell you what we've got.

We've got durable goods orders, which is orders for things that last three years or more. So think washing machine, all the way to military equipment. Orders for those are up, and they have been down for six months in a row.

Then you have existing home sales. Most of the homes that we sell in America are existing homes. Let's call them used homes, OK? Those are up.

WHITFIELD: Pre-owned.

VELSHI: Then we've got new home sales -- right. And now we've got new home sales. That came out this morning. Those are up.

We've got mortgage rates, 4.86 percent, according to the Mortgage Bankers Association, for a 30-year fixed loan. That's the lowest it's been since they have been measured.

So there are things going on. But never mind all of that.

The bottom line is, the market is the forward indicator. That's the one that looks ahead to what's going on.

By Friday, we had finished two weeks back-to-back of market increases. We haven't seen two weeks back-to-back of a market up since May of 2008. And now we're in to this week -- a strong gain on Monday, yesterday a bit of a sell-off. We've made that up again today.

So there is some sense that investors are saying, maybe, maybe we might be starting to kind of sort of turn maybe a corner. Notice there are a few hedges in that.

WHITFIELD: Yes, but this incremental increase, or these notes of positive upswings, really taking place within the past month or two.

VELSHI: Yes.

WHITFIELD: So is there a direct connection with what we're hearing the president saying about stimulus money, et cetera, and why we're seeing a spike in these areas?

VELSHI: I think there are three things you're seeing particularly.

One is, when the stimulus bill came out, we're not seeing full effect of that money having gone into the system, because some of it hasn't gone in and won't go for 18 months or so. But what we're seeing is a sense that things are moving.

Then we saw the housing plan come out from the government, and that had a fairly immediate impact on making people feel better about housing, people who were going to buy. A lot of people started to close deals.

Then last Wednesday, the Federal Reserve made a decision to inject a trillion dollars into the U.S. economy, three-quarters of a billion going to Freddie Mac and Fannie Mae to buy loans from your bank. So giving the banks money to make mortgages to you.

Within hours of that announcement last week, we saw mortgage rates plummet within hours. Then you saw on Monday, Treasury Secretary Geithner's banking plan, and you saw a seven percent gain in the stock market on that, a sense that that might help us. So there is definitely a sense that this ship is starting to turn into the right direction. But as the president said last night, the economy is an ocean liner and not a speed boat, so we're still managing expectations about how quickly and effectively it can turn.

WHITFIELD: Yes. And you mentioned the 30-year fixed mortgage rate with an interest rate of now 4.63 percent? Is that what you said?

VELSHI: Unbelievable, yes.

WHITFIELD: Yes.

VELSHI: We have just never seen numbers like that. That is really low.

WHITFIELD: That is a bargain.

VELSHI: If you're thinking about buying a house even, even if you think your home value is going to go down -- and it could well over the next year -- if you're going to take a 30-year mortgage, the rate is going to affect you substantially more than the price of that house. So that is very interesting.

WHITFIELD: All right. Ali Velshi, you are everywhere. You're on the radio, you're taking calls on CNN.com, along with radio, and we see you on "YOUR $$$$$" as well. You're just everything to everybody.

VELSHI: We're keeping busy.

WHITFIELD: All right, Ali. Appreciate it.

VELSHI: But good to see you, Fred. Always good to talk to you.

WHITFIELD: Good to see you as well. Thanks so much. Appreciate it.

All right. So one of our CNN iReporters has a word of advice for President Obama. The advice is to stop using one word in particular.

(BEGIN VIDEO CLIP)

KAREN, CNN IREPORTER: I'm a little tired of hearing you say the word "inherited." By now, we all know that he has inherited a couple of things from President Bush. So he doesn't have to keep beginning his answer by saying, "Well, as you know, I inherited." When he said that word, I was, like, oh, here we go again. You know? Get rid of the word "inherited" and just give us an answer.

(END VIDEO CLIP)

WHITFIELD: Just a little advice from one of our iReporters.

So there's plenty of response to the presidential news conference last night. Hear what some of the nation's unemployed say right here on the CNN NEWSROOM. (COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

WHITFIELD: The president's taking the long-term view on many pressing problems. So, how do people who are out of work right now feel about all of that?

Our Jason Carroll actually talked with some people last night during that news conference.

(BEGIN VIDEOTAPE)

JOSH EICENSTEIN, UNEMPLOYED SINCE DECEMBER: He's way too honest. You know, I feel like our economy is built a lot on perception.

JASON CARROLL, CNN CORRESPONDENT (voice-over): Josh Eicenstein, he's 24, a former TV producer, out of work since December.

EICENSTEIN: It reminds me of a guy who knocked into a cabinet and he's like on the floor trying to catch everything that's falling. That's kind of what he's doing right now.

TRACEY FISHER, UNEMPLOYED SINCE APRIL: Exuded confidence. And so that made me feel a little better.

CARROLL: Tracey Fisher, 41, former booker at a modeling agency, out of work for a year.

FISHER: If he knew exactly what he could do, like, from point A to point B to point C, and what have you, we would all be working right now.

GRETCHEN DECHELLIS, UNEMPLOYED SINCE JANUARY: I think honesty is necessary at this point.

CARROLL: Gretchen DeChelliss, 33, worked as Sacs Fifth Avenue, unemployed since January.

DECHELLIS: I think honesty is important. And I think more people want to hear honesty, because we're dealing with reality, and this is our reality, and we're living it. We don't have a job.

DUSTIN D'ADDATO, UNEMPLOYED FOR A YEAR: I'm all for honesty and I'm all for him telling us, you know, the truth about situations. But I feel like he needed to inspire.

CARROLL: Dustin D'Addato, 32, former Web site producer, he has been looking for work for a year.

D'ADDATO: He went on hope and change, and now, OK, give me some of that hope, you know? I mean, if that's going to be your slogan, like, then sell me some hope. You know?

FISHER: OK, but what kind of hope are you looking for? What kind of change -- what is it you're looking for specifically?

D'ADDATO: OK. What I'm -- he came up with all these plans about, you know, well, four down the roads in education and all that, well, I don't have four years down the road. I have a few months down the road.

CARROLL: Adam Perlis, former marketing associate and TV producer, unemployed since last September. Perlis says the president should have done more to inspire the business community.

ADAM PERLIS, UNEMPLOYED SINCE SEPTEMBER: I feel like he needs to instill in the companies, not just in the American people, that the companies should have more faith.

CARROLL (on camera): The three men at the table wanted more inspiration. The two women at the table said basically he is speaking in realistic terms and I understand that.

D'ADDATO: Sell it to me a little bit more than you're doing it. Like, make me feel as though that you believe that we're all in this together, as opposed to we're all miserable together.

FISHER: I would love for him to be a cheerleader for me, and is say, hey, you know what? We can stick together, we can do it, rah, rah, rah, sis boom bah. The bottom line is, and as sad as it is to say, we're in a mess. Everybody knows it.

CARROLL: One point where everyone agreed? When I asked if they thought the president will ultimately put people back to work, despite the criticism, the group said yes.

Jason Carroll, CNN, New York.

(END VIDEOTAPE)

WHITFIELD: Finding ways to save more money and keep your home. Personal Finance Editor Gerri Willis has your top tips on mortgage rates.

(COMMERCIAL BREAK)

WHITFIELD: All right. The shabby economy means you can get a fixed rate mortgage under 5 percent. You'll need patience and extra change for higher mortgage fees.

Personal Finance Editor Gerri Willis is here.

So Gerri, before we get into the advice here, what have you been hearing from people?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Everybody is asking me how to secure these low, low mortgage rates, and many people are having a hard time even getting through that their lender on the phone. They're frustrated.

Last night, I spoke with a chief economist at Fannie Mae. He told me it will take as much as three months for the mortgage industry to start working at full capacity.

Now, the good news here, his full-year outlook for mortgage rates is 4.8 to five percent. The takeaway here, you definitely want to get involved, but you're going to have to be patient.

WHITFIELD: All right. So what does that mean for consumers, exactly?

WILLIS: Well, look, there is opportunity here. Thirty-year fixed rate mortgages are at 4.6 percent. Historically, that rate is eight percent. And that's significant.

Let's take a look. Thirty-year fixed rate mortgages are at 4.8 percent. Historically, that rate is eight percent. That's significant.

If you took out a 30-year, fixed rate loan of five percent, your monthly payments would be around $915. Looking at the historical average of 8 percent, you would pay $1,200. The savings, $335 a month, or $4,000 a year.

WHITFIELD: OK. So because the process takes longer, everyone is being asked to be patient. Does it also mean that it just might cost you more?

WILLIS: Well, we have been told it might take longer to get a refi right now, and that's something to be aware of. And according to bankrate.com, Fannie and Freddie have increased their fees. So you could be paying an extra one percent to two percent of the loan amount, and sometimes even more, on top of all of your other closing costs, and that is not negotiable.

WHITFIELD: OK. And then how do you actually get the best rate? Something is negotiable, I hope you're going to tell me.

WILLIS: Right. Well, having enough equity is one of the biggest obstacles to most people who want these great rates.

These days, you'll need at least 20 percent equity to get those rates. Make sure you keep your credit score as high as possible. Get copies of your credit report to make sure there are no errors at annualcreditreport.com.

And shop around to get the best rate. Get all of your paperwork together now. There is a list of what you'll need to start collecting.

Of course, you need your refinancing application, two years of tax returns, one month of pay stubs, three months of asset statements. That means your checking accounts, your savings accounts, your mutual funds. And your most recent mortgage statement. And, of course, a copy of your deed.

And, if you have any questions, send them to me at gerri@cnn.com. We love hearing from you. WHITFIELD: Wow. That looks like it's gotten more complicated in order to refinance. It looks like there's a couple extra things in that list that are required nowadays.

WILLIS: Well, you know, they are really checking everything, crossing the Ts, dotting the Is. So you've got to make sure you have got all your ducks in order.

WHITFIELD: Yes.

All right. Gerri Willis, thank you.

WILLIS: My pleasure.

WHITFIELD: Very constructive advice. We all need that.

All right. Well, looking for a new way to make money? Well, one man gets millions of dollars by recycling garbage. Click on the story at CNNMoney.com.

Spring break warnings. Daily shootouts and violence crossing the border. Just what is going on in Mexico? U.S. Secretary of State Hillary Clinton travels there to find out.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: As I said, President Calderon has been very courageous in taking on these drug cartels. We've got to also take some steps. Even as he is doing more to deal with the drug cartels sending drugs in the United States, we need to do more to make sure that illegal guns and cash aren't flowing back to these cartels. That's part of what is financing their operations, that is part of what's arming them. That's what makes them so dangerous.

(END VIDEO CLIP)

WHITFIELD: The bloody turf war between Mexico's drug cartels is getting fresh attention in Washington. That was President Obama last night.

Well, right now, senators are hearing about new tactics from homeland security chief Janet Napolitano. The administration is revamping the Bush approach to keep violence from spilling across the border. The plan commits $700 million. It includes hundreds of new federal agents, helicopters, high-tech cameras, and new x-ray scanners at border crossings to detect firearms.

(BEGIN VIDEO CLIP)

JANET NAPOLITANO, U.S. SECRETARY OF HOMELAND SECURITY: First, we know that the weaponry used in this war in Mexico comes primarily, although not exclusively, through the United States. Just a few weeks ago, March 7th through 13th, we seized 997 firearms going into Mexico.

(END VIDEO CLIP)

WHITFIELD: Secretary of State Hillary Clinton arrives in Mexico in just two hours, and drug violence tops her agenda.

Foreign Affairs Correspondent Jill Dougherty is live from Mexico City.

And so, Jill, who is going to be driving this conversation and who is the secretary of state actually meeting with?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, she will be meeting with the foreign secretary and then with President Calderon. But also, she'll be doing a lot of other things that try to bring the focus, let's say, more broadly than just the drug issue. But on the drug issue, there is some news, literally, as Secretary Clinton is in the plane on the way here. And that is Mexican authorities saying that they have apprehended one of 24 top drug traffickers in Mexico.

He was on the most wanted list that the government put out just two days ago, offering up to $2 million for any information that would lead to the arrest. He is Hector Huerta Rios, and he is from Monterrey. Apparently, he was in charge of the Monterrey cartel operation. So, some good news coming from Mexican authorities as the secretary arrives.

So drugs will be important. You've heard about the plan that Washington announced the day before the secretary arrived here. But they will also be talking about things like clean energy, the economic crisis, education, and trade. Very important -- Fred.

WHITFIELD: And, you know, while we're talking about the violence on the border, I wonder if the secretary is going to be asking a bit more from the government. Because there have been all kinds of conflicting reports coming from various sources, saying the government is actually complicit in some of the drug-dealing and violence that's been related to it, while others are saying that the government had simply lost control of the territory all together, and really is at a loss.

DOUGHERTY: I don't think you're going to hear that - the latter thing from the secretary. She is not going to say that they have lost control.

I think what she will say is that President Calderon is trying very hard to get this drug violence under control. But it has been sparked, the administration, the Obama administration would admit, by - you have weapons, and you also have drug laundering money coming back over the border from the United States. And it is also fueled by consumption. And that consumption is in the United States.

So what the Obama people are saying, really, and the secretary is saying, this is shared responsibility. That's the phrase they're using. And you're probably going to hear a call from both sides to do more. WHITFIELD: OK, meantime, the secretary has already made her rounds quite a bit around the world. And CNN has an opinion poll that's already indicating what some Americans think about the job that she is doing. So take a look here.

When asked how is Clinton handling her job, approval rating is 71 percent, disapproval 23 percent. So, I imagine she's embarking on this meeting with a high level of confidence, feeling like Americans feel like she is doing exactly what they expect of her, if not more so.

DOUGHERTY: Right. And that is quite significant when she has better ratings than the president does.

But, you know, you have to say, her role is different. What she's doing is repairing relations. It's kind of more a good-news message that she is getting out. With the president, it's dealing with problem that are affecting the pocketbooks and livelihoods of Americans, and that really hurts. It's very painful.

That said, she seems to be getting good marks from American citizens and also from abroad. She's been getting a very good reaction on the trip she has been on.

WHITFIELD: All right. Very good.

Jill Dougherty, thanks so much joining us from Mexico City. I know we'll be talking with you again throughout the day.

Again two, about hours before Secretary Clinton makes her way to Mexico City.

Meantime, another problem that we share with our neighbors to the south is the deepening recession. With work drying up here in the U.S., many Mexican workers can no longer afford to send money back home.

Our Thelma Gutierrez reports.

(BEGIN VIDEOTAPE)

THELMA GUTIERREZ, CNN CORRESPONDENT (voice-over): A waiter, a baker, a sliding glass door maker; three men who work in the United States and send money to Mexico.

Paul Baez waits on tables in Los Angeles to help support his mother who lives in the village outside of Mexico city. Jorge Salinas, a bread maker in Sun Valley, California, sends his parents in Guadalajara half of what he makes. And so does Eduardo Gutierrez (ph) of Orange County, so that his father, a goat farmer in Trejo (ph), Mexico can afford to buy medicine. But they're wiring much less cash today than they did a year ago.

When Gutierrez's (ph) paycheck took a hit this summer, the money he sent home each month went from $300 to $150. EDUARDO GUTIERREZ (ph), WIRES MONEY TO FAMILY IN MEXICO: I seen the recession back in the '90s, but this is worse as far as I can tell. This is really bad.

T. GUTIERREZ: The same for Salinas, who is now only working part time.

JORGE SALINAS, BAKER: Before, like 300. Right now, only like $150.

T. GUTIERREZ: Paul used to send more than $800 a month, until his hours were cut, along with his tips.

(on camera): This year, how much are you sending?

PAUL BAEZ, WAITER: Like 400, 500.

T. GUTIERREZ: So half.

BAEZ: Half.

T. GUTIERREZ (voice-over): According to Mexico's Central Bank, remittances to Mexico are down by $1 billion since last year.

Paul's mother, Juana (ph), says the money he used to send accounted for 70 percent of her income. Now, she's had cut back on food, utilities and everything else. She's not the only one. She says half of her town has been affected.

PAUL HINOJOSA, CHICANO STUDIES, UCLA: The drop-off in remittances for those villages and those households that depend on remittances represents an economic earthquake, much more than what their families are going to suffer in the United States. Because the role of remittances is a much bigger part of their ability to make ends meet on the Mexican side.

T. GUTIERREZ: Paul says when the money was flowing south, his town was booming with new business and homes. Now, it's come to a screeching halt.

(on camera): And immigration experts say that could impact us here, because if things get much worse in Mexico, they say resulting poverty could drive desperate people to cross into the United States illegally.

Thelma Gutierrez, CNN, Los Angeles.

(END VIDEOTAPE)

WHITFIELD: And, of course, we'll bring you more on the drug war at our back door. Next hour, I'll be joined by "Los Angeles Times" correspondent Richard Marosi right here in the NEWSROOM. Plus, CNN's Anderson Cooper is heading to the border. Be sure to catch the "AC 360" special "THE WAR NEXT DOOR" live from the Mexican border. That's tonight at 10:00 Eastern right here on CNN. For many of you, your morning ritual of coffee and the newspaper is changing as the financial crisis forces some newspapers to stop printing.

(COMMERCIAL BREAK)

WHITFIELD: More and more newspapers are going the way of the dinosaurs. And with so many of them folding or going online, sitting down to enjoy the morning paper and a cup of coffee is a dying trend.

Here is dotcom's iReport - oh, hey, look, you're live with us, Katie Hawkins-Gaar.

Hey! How are you, Katie.

KATIE HAWKINS-GAAR, CNN.COM PRODUCER: Hi.

WHITFIELD: This is so sad, cause I'm one of the people who likes the paper, I like the ritual of turning the pages and finding my favorite columns, et cetera.

HAWKINS-GAAR: Right, right. And a lot of iReporters are, too, apparently. We asked our iReporters if they still read newspapers and if they're sorry to see them go.

One of those iReporters is David White, he's a loyal newspaper describer. In fact, he reads the "Washington Post," "Washington Express" and "Washington Examiner" every day.

Let's listen as he describes his morning routine.

(BEGIN VIDEO CLIP)

DAVID J. WHITE, CNN IREPORTER: If you're anything like me, you like to get your news the way it's always been coming -- either on TV or via the newspaper. Now, I have three different newspapers here, maybe the network doesn't want me to recite or show their names. But nonetheless, I enjoy reading my newspapers every day. This is my morning fix. Before I get up and get dressed, drink that coffee, got to look on the front porch for my newspapers.

(END VIDEO CLIP)

WHITFIELD: Oh, he has really painted the picture, but I can totally relate.

HAWKINS-GAAR: Right, definitely. Of course, many people have stopped subscribing to newspapers all together. One of those people is Karen, an iReporter who lives in Harlem, and she thinks newspapers aren't worth the cost.

Let's take a look.

WHITFIELD: Whoa, that's harsh.

HAWKINS-GAAR: Yes. (BEGIN VIDEO CLIP)

KAREN, CNN IREPORTER: I do not read the newspapers, the physical newspapers, the hard copy, anymore. Because, I mean, what's the use? You can get it online. You can BlackBerry it up, get on line on your little laptop and read it.

(END VIDEO CLIP)

WHITFIELD: Oh, she makes it sound so simple.

HAWKINS-GAAR: I know. She sounds like she's made up her mind that she's going to get the news online.

And I've got one more photo I would like to share with you, Fredricka. This is from Marilynn Shcoinikr and it's the last issue of "The Seattle Post Intelligence" there which is moving to an online only format. And Marilynn said she loved to collect the headlines from all the major news events, so she's really sorry to see the newspaper close its doors. Yes.

WHITFIELD: So now she has got to find a new habit, so to speak.

HAWKINS-GAAR: Yes, which we hope is iReporting. That would be nice.

WHITFIELD: Well, at least we're glad that of the newspapers that are going more digital, it's not that they are folding all together. The way in which to stay on board is to be more online. We applaud that, as well.

But I'm still going to miss, you know, the paper. The tangible stuff, when it comes to the point where you're not going to be able to find that in circulation anymore.

HAWKINS-GAAR: Right. Definitely. And if other iReporters agree with you, then they should go to ireport.com/desk to share their thoughts.

WHITFIELD: All right, Katie, thanks so much.

HAWKINS-GAAR: Thank you.

WHITFIELD: All right, we're also getting a lot of iReports on the flooding in the Midwest. These pictures are from Jane Skinner in South Dakota. At least one county there has been asked to evacuate. The swollen rivers have also put two highways under water and washed out some roads all together.

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

WHITFIELD: Rob Marciano is in the Severe Weather Center.

And you've been warning we were going to see images like this, but really this is the tip of the iceberg, so to speak. ROB MARCIANO, AMS METEOROLOGIST: Yes, and I guess that's a fair analogy when you're talking about not only flooding, but we're talking about flooding that's coming from snow melts and now they've got a winter storm that's kind of adding insult to injury now.

So, the storm that brought the warm temperatures and the rain and the runoff is now moving into Canada, but the back side of that is bringing in some snow. So, that's not exactly what they're looking for.

So, 90 percent or so of North Dakota under a flood warning. Obviously, the Red River and the tributaries of the Missouri are probably the headlines there, but what's going on right now is a little bit disconcerting in the form of winter storm warnings that are posted for Fargo to Grand Forks. Five to eight inches of snow, they already several inches on the ground. And temperatures there that are easily well below freezing and into the 20s with wind chills in the teens and single numbers.

So, this is not a fun situation, to say the least, to be in. I shouldn't be so flip about it. And on top of that, when it's that cold, the sandbags don't quite work as well. They don't kind of, you know - seal each other as well as they would if they were not frozen.

But good news is, once we get the snow out of here, we will be seeing somewhat of a drying trend. A quick check on what's going on, Fredricka, with the flooding, and we'll want to get on the horn with one of our correspondents down there.

Shawn (ph), if we could zoom in a little wit, show you the Red River. Again, to give you an idea what's going on, Fargo to Grand Forks, this river runs this way. Major flood stage right now, a record flood stage would be another five feet, which they think will happen, cresting sometime on Friday or Saturday.

And then the tributaries, the Missouri, I should point out one other thing, and maybe Steve can confirm this. There was a warning - there was word that one of the ice jams - we've been talking about this for the past couple of days. Ice that gets lifted up by these rising rivers and floats downstream and gets jammed up other places and creates more secondary floods. That one of those ice jams was broken north of Bismarck, and that was worrying residential communities downstream, and they were told or thought they had to evacuate. Well, we're getting word from the local authorities there that that ice jam break did not happen.

WHITFIELD: Wow.

MARCIANO: And at least right now, there's no flash flood warning that's been issued.

WHITFIELD: It hasn't happened, but they are still well aware of the potential and that sometimes is just as frightening, isn't it?

MARCIANO: Yes, for sure. WHITFIELD: All right, Rob Marciano, appreciate it. You mentioned that we've got one of our correspondents in the area of Fargo, North Dakota, and that would be CNN Radio's Steve Kastenbaum. On the line with us now.

So, Steve, what are you seeing where you are in Fargo?

STEVE KASTENBAUM, CNN RADIO CORRESPONDENT (via telephone): Well, we woke up to a blanket of white here this morning in Fargo, which is quite odd considering when I arrived last night it was raining and everybody was thinking that the rain was not a good sign for the Red River here.

But the freezing temperatures and the snow, in the short term, is a good sign. Because it means that the melt that has been taking place that has been feeding the Red River is slowing. So they don't expect it to rise as fast in pace as it has been. But they still expect the Red River here to crest at around 41 feet or more on Friday or Saturday.

But the fact that it's slowed down a bit has enabled them to get the upper hand on the sandbagging operation here. And city officials told us this morning, they've got about 95 percent of the sandbagging on top of the dikes that are already in place completed. And they hope to complete the last five percent today, although that effort is being hampered by the weather.

WHITFIELD: Wow, that is incredibly impressive, isn't it? This community effort to get the sandbagging going. While they may have filled the majority of the sandbags, what about the distribution of those sandbags in the most vulnerable spots?

KASTENBAUM: That's a really good point. It is much harder to get the sandbags to where they need to go today, because of the snow. It's very slippery. They don't want to have too many people out on the dikes, because they're wet, the water froze, they're now icy, and they're concerned that people could slip and fall into the river. So, they have a limited number of people out on the dikes today. The majority of the volunteers in the city are in the sand bagging centers.

And by the way, an incredible army of volunteers responded to the call here. And they didn't think they were going to get enough bags done in time. They've completely exceeded their expectations, because of all these thousands of people who have come out to help.

WHITFIELD: Well, that's fantastic.

Rob, you may have a question, as well.

MARCIANO: Yes, Steve, you know, the last couple of days, we've been seeing the sandbagging efforts, we've been seeing surveyors go out there to kind of see how high the walls are being built. What's - you know, what's the point that you're hearing on the ground as far as, you know... WHITFIELD: OK - sorry, Steve and Rob, let me just interrupt you for a moment, because we have some new images coming now of President Obama meeting with the NATO secretary, General Jaap de Hoop Scheffer.

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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: He has been a strong leader of NATO, and we are very grateful for the service that he has provided. He's a great friend to the United States.

You know, we are about to celebrate the 60th anniversary of NATO at a summit in both France and Germany. It is a testimony to the strength of the Transatlantic Alliance, a testimony to the effectiveness of NATO in creating stability and peace and prosperity, laying the ground work for so much that has taken place over the last several years.

We have a set of challenges that require NATO to shift from the 20th century to the 21st century. Issues of terrorism, failed states, nuclear proliferation, a whole host of new challenges, as well as the traditional role that NATO has played in had preserving the territorial integrity of NATO members.

And at this summit, the secretary general and I have been discussing the agenda for the summit. We are confident that we can create a process whereby NATO, which is already strong, becomes stronger. Where we become even more effective in coordinating our efforts in Afghanistan.

As many of you know, we're in the process, this administration, of going through an evaluation, a strategic review of our approach to Afghanistan, and we expect to share that with our NATO counterparts. We have been in close consultation with them. And we believe that we are going to be able to ensure that the NATO members who made so many sacrifices and have been working so hard already are reinvigorated and the coordination that's going to be taking place will make it even more effective for us as we complete a successful NATO mission.

We've also discussed the role that NATO plays with respect to Russia, and how this administration, my administration, is seeking a reset of the relationship with Russia, but in a way that's consistent with NATO membership, and consistent with the need to send a clear signal throughout Europe that we are going to continue to abide by the central belief that countries who seek and aspire to join NATO are able to join NATO.

And finally, I thanked the secretary-general for his outstanding service. He is coming to the end of his tenure. I've told him that he's a young man so he's going to have to find something else to do, because he's an extraordinary talent. But he still has a lot of work in NATO to do just to get us through what is going to be a historic summit. And so I'm very grateful to him for taking the time to travel here.

JAAP DE HOOP SCHEFFER, NATO SECRETARY GENERAL: Many thanks, Mr. President. For me of course, it was a pleasure to meet the president of the United States, President Obama, for the first time here in the Oval Office.

In the run-up, indeed, to the NATO summit in the beginning of April, so less than two weeks ago, in Strasbourg and Kehl, in France and Germany. In the heart of Europe, by the way, which is an interesting place to celebrate NATO's 60th anniversary.

But as the president has already said, celebrating your 60th anniversary should not only be back to look at your successes but also look ahead. There are still major challenges. Many things are going right, but many things are not going right. We are, of course, waiting the results of the review going on in the United States of America. Very relevant for the other allies; very relevant for NATO. And that review will certainly be discussed at the summit, Afghanistan being NATO's most important operational priority.

NATO's future will be discussed as well. The question, is NATO going to have a new strategic concept, which brings to the surface a number of questions President Obama already spoke about. NATO's expeditionary capabilities, never forgetting NATO's core function, the integrity of the NATO territory.

NATO's relations with Russia. We have many things on which we disagree, but NATO needs Russia and Russia needs NATO. So let's work on the things we agree on and let's not hide our disagreements. And let us realize that also this relationship can, and in my opinion, should be strengthened.

So it's a full plate at the summit from Afghanistan to NATO- Russia to NATO's future. We'll greet, hopefully, two new members - NATO's door is open, Albania and Croatia - in the family of democratic nations. And as President Obama said a moment ago, NATO's door will stay open for new members if they perform, if they fulfill the criteria.

And I'm quite sure that President Obama's administration, as we discussed in the past 45 minutes, is and will be a staunch supporter of the North Atlantic Alliance because it was and is and will stay, Mr. President, a unique alliance bringing United States, Canada and the European allies together.

So it was a pleasure to talk to the president. Thank you very much, indeed, sir.

OBAMA: Thank you.

SCHEFFER: Thank you.

OBAMA: Thank you very much.

SCHEFFER: Thank you.

OBAMA: Thank you, guys. WHITFIELD: All right, a handshake there and brief statements coming from the NATO Secretary General Jaap de Hoop Scheffer alongside there of President Barack Obama. Talking about celebrating the 60th anniversary of the NATO alliance and then soon to be welcoming two new members, Albania and Croatia. And you heard them underscore the importance of their continued commitment toward Afghanistan.

All right, hundreds of people live in a tent city in Sacramento, but now they're being told they've got to move.

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WHITFIELD: All day long we're following the Dakota flooding story with reporters on the scene. We'll have the very latest for you on that situation and new pictures at the top of the hour.

Plus, Mexico's bloody drug war. Secretary of State Hillary Clinton heads to the front lines with a new plan. The details and what is will cost.