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Pres. Obama Meets with G-20 Leaders; Mass Protests at G-20; Gen. Petraeus Speaking Out; Suspected U.S. Missile Strike Kills 12; Europe's View of Michelle Obama; The Wages of Recession: Sin Tax; Who Are the G-20?; Chief Economic Adviser to the VP Answers Economic Question

Aired April 01, 2009 - 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: Not far from the protests that we showed you just a little while ago, but a good sight, more decorum at Buckingham Palace, where the President and Mrs. Obama met Queen Elizabeth II. The British monarch and her husband, Prince Phillip, had a private chat with the Obamas. No advisers or aides, thank you very much. Afterwards, the Queen hosted a reception for all the G-20 leaders.

Well, Michelle Obama has had a warm reception, and a pretty busy schedule as well. Earlier today, she met with Sarah Brown, wife of the British prime minister at 10 Downing Street. Mrs. Obama and Mrs. Brown went to visit a cancer center, where they talked with patients and left to a cheering crowd. And that's not likely to be the last. In about 20 minutes, Alina Cho looks at Europe's fascination with America's first lady.

And if you've been watching CNN, you know more than just the calm got shatter in London's financial district by thousands of protesters airing decades of grievances. CNN's Jim Boulden pushes forward on the pushing and shoving and shouting.

Jim, it's after 7:00 there now. Are things calming down?

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Well, actually, things are heating up a little bit, where we are, Kyra. Let me move off and show you that. The police have now moved in, and surrounded what's called the climate camp. Now, most of the day, the climate has been quite peaceful. People have been -- these youngsters have been in the road. And there's been a festive atmosphere here. While elsewhere, there was trouble brewing.

But in the last few minutes, the police have decided to sort of surround us. Not really sure what their intentions are, whether they're going to try to break up the climate camp. We thought that they're going to be allowed to spend the night here. And that's why many people have shown up with tents.

And until now, it had been quite, quite a nice atmosphere, best of here. While earlier we did see windows being broken at one of the Royal Bank of Scotland branches. So that branch had been closed for the day, because they were expecting some trouble. We also saw a fair amount of violence around the Bank of England. That's were some anti-capitalists were going against the police. But they really wanted to go to the Bank of England, which is the central bank. And they really wanted to show their displeasure with how the world leaders are dealing with this economic crisis.

And you can see some of that video now. There was on and off fighting with the police. The police have cordoned them off and held them there for a number of hours. But here it was very festive and people wanted to -- the world leaders to think about the climate. They wanted to talk about a low carbon economy. And that's why we've seen so many people here, thousands on the streets, in Bishopsgate, in the center of the city of London. And they wanted to have a peaceful message. And they were saying they were going to spend the night here and move off to where the summit is taking place in East London. But now the police are sort of surrounding the area. We're really not sure what the next step will be - Kyra.

PHILLIPS: All right. Well, hopefully, things will remain calm. Jim Boulden, thanks so much.

President Obama's Kenyan aunt has a bit more time to make a case for asylum in the U.S. today. She appeared before a Boston immigration judge who set a date early next year for her case to be heard. She will be allowed to stay at least until then. She was supposed to be deported in 2004. The president said he didn't know his aunt was even living here illegally.

Justice Department says it's dropping all corruption charges against former Senator Ted Stevens of Alaska. It says that prosecutors withheld evidence that led to Stevens' conviction for lying on Senate financial forums. The department today asked the judge to overturn last year's conviction. The 85-year-old Stevens lost his re-election bid in November and was awaiting sentencing. Stevens said that he always knew that he would be exonerated.

No winner yet in a special congressional election in New York. That race could be a referendum on President Obama's economic recovery efforts. Democrat Scott Murphy led Republican Jim Tedisco by just 65 votes. More than 150,000 votes were cast yesterday. More than 10,000 absentee ballots are not expected to be counted for two weeks. As you may remember, president Obama endorsed Murphy, who was attacked by Republicans for supporting the president's stimulus plan.

And the vice president and the Agriculture secretary are tag teaming the spotlight, putting a positive spin on the recovery act. Both Joe Biden and Tom Vilsack are in North Carolina today showing how the stimulus plan is helping rural America. Part of Mr. Biden's duties these days, overseeing the $787 billion program. And he's highlighting how the government will measure success.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: There was no question we'll recover.

But it's not sufficient the economy just recovers. Barack and I said during our respective campaigns and our joint campaign that the measure of whether or not our administration is a success is not merely whether the economy is growing again, but whether the living standard of the middle-class rises and those who aspire to the middle- class have access. That will be the measure.

The American people working class families have to share in the increased productivity. It's going to take us out of this recession.

(END VIDEO CLIP)

PHILLIPS: Both Biden and Vilsack are also touting the benefits of the stimulus program for creating affordable housing in rural America.

Top brass on Capitol Hill. General David Petraeus speaking out. We're going to tell you what he said about the war in Afghanistan and the insurgency in Pakistan.

(COMMERCIAL BREAK)

PHILLIPS: Well, the general credited with making the surge work in Iraq is speaking out now on another war. General David Petraeus today told the Senate Armed Services Committee that the situation in Afghanistan is dire. Progress, he says, will come only with time, more money, and sustained commitment.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Due to the success in Iraq, would you now consider Afghanistan the central front in the war on terror?

GEN. DAVID PETRAEUS, COMMANDER, U.S. CENTRAL COMMAND: Well, I think you'd have to take Afghanistan and Pakistan together.

GRAHAM: OK, those two together?

PETRAEUS: As a -- as a problem set, those two together -- yes, sir.

GRAHAM: And you would consider that now the central front?

PETRAEUS: In fact, our focus is truly shifting to that front.

(END VIDEO CLIP)

PHILLIPS: Some senators questioned the wisdom of the Obama administration's new policy of linking Afghanistan with the insurgency in Pakistan. Committee Chairman Carl Levin for one says that he's skeptical about Pakistan's ability to prevent Taliban and foreign fighters from crossing into Afghanistan from Pakistan.

One thing President Obama wants out of the G-20 Summit, but isn't likely to get is more NATO troops for Afghanistan. Here with her take on this, CNN's Candy Crowley. You know, we'll talk about, will he get the troops or not? But this is his first, as you were saying, foreign policy push, I guess you could say, going overseas, and talking about this with foreign leaders.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Right. And he's actually going to attend the 60th anniversary celebration of NATO later on this week. So that's where the foreign policy really comes to play. But this is -- you know, it's not just that we're watching. President Obama for the first time overseas. He obviously went to Canada. But this is his first time on the big old world stage with all these other leaders. So we're not just taking the measure of the president. The world's taking the measure of this president.

You know, he has -- he caused as much excitement overseas while the campaign was going on, so who is he? What's he about? Is he a multilateralist? As you know, many of these countries felt they were pushed around by the U.S., that they were not consulted, they were only informed. And what they're looking for from this president, whether it's the economy, or whether it's troops in Afghanistan, they are looking for whether this president is going to be a consulter. If he's going to, you know, bring them in on those decisions. And in fact, reach out across the board.

PHILLIPS: But don't these countries, these leaders, they want to see what's in it for them. We're still tied to this, because this is how 9/11 happened. So does he still need to convince other countries why to care so much about the threat in Afghanistan?

CROWLEY: I think what he needs to convince, and particularly the NATO countries, is there have been rumblings from NATO countries that they want to pull back from combat in Afghanistan. But there's also been some talk about the Americanization of the war in Afghanistan. So there's those two kind of counter railing theories.

So, yes, he has to -- there were two thoughts. When we first started talking about this trip, there was the thought that he was going to ask NATO to up the ante with more troops. Then, there was the feeling that NATO was pushing the other way, and that he in fact would not ask for it.

So, you know, again, it's tricky business. BUT NATO is, you know, a one-for-all, all-for-one organization that's been around for 60 years. A military organization. And it's a very important one for him to go to, so that they can see him up close and personal. Afghanistan clearly is on his agenda. The question is, how far will he push NATO to put more troops into Afghanistan.

PHILLIPS: Because you think about NATO, you think of heavy involvement. Every time I think NATO -- you think NATO, you think Kosovo, right? So is this really worth Obama's time? I mean, we talked yesterday about the face-to-face, and being with leaders and how much of an influence that can make. But really when it comes down to it, is this worth his time?

CROWLEY: It is. If only for the symbolism of it. He gets nothing else out of it. Again, this has been the premiere military alliance post-World War II. It has always been, if one is attacked, all are attacked. It obviously was, you know, when the Soviet Union was around, and that's what it was aimed at. But this is a very important, long-standing organization. And that he goes there, and he has to go there really. I mean, this was -- this was not a choice. He could not, not go to this NATO 60th anniversary. So, yes, it is important for the U.S. to be seen there. But there's no doubt NATO is changing.

You know, more members have come in, that kind of thing. And so it has to evolve into something else. But he had to go there. It remains very important to the U.S. and very important to the other countries that the U.S. be involved.

PHILLIPS: All right, we're going to see what happens. We'll talk after the meeting.

CROWLEY: It's a deal.

PHILLIPS: Thanks, Candy. All right.

Well, in Pakistan, an attack and a threat against the U.S. A local official says that a U.S. missile strike killed 12 people in northwest Pakistan. The U.S. military hasn't commented on that claim yet. The supposed target was a compound connected with the Taliban commander who has threatened attacks on the U.S. That Taliban leader says that the planned attack on the U.S. will amaze the world. So, is it idle talk, or legitimate concern?

CNN Homeland Security correspondent Jeanne Meserve takes a look.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): A Pakistani tribal leader is claiming responsibility for the shootout at a police academy in Lahore, Pakistan, Monday, and is threatening further violence in the U.S. In an interview with the Associated Press, Baitullah Mehsud says, "Soon, we will launch an attack in Washington and the White House that will amaze everyone in the world."

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: He has access to Al Qaeda and its -- its strategic resources, including those that could be deployed against the United States. And so when Mehsud talks about a threat to Washington, D.C. I can't imagine that anybody wouldn't take that seriously.

MESERVE: But current U.S. counterterrorism officials say it is unlikely Mehsud could carry out an attack in the U.S. One describes Mehsud chiefly "as a regional player, a dangerous one, who moves in the same circles as Al Qaeda, but he is not part of Al Qaeda."

The U.S. has put a $5 million price tag on Mehsud's head, saying he poses a clear threat to American persons and interests in the region. He is also viewed as a serious threat to Pakistan. The assassination of former Pakistani president, Benazir Bhutto, was pinned on Mehsud by former CIA director, Michael Hayden. Though officials are skeptical that anyone serious about staging a terrorist attack in the U.S. would advertise it so specifically and publicly, some experts are not.

STEVE COLL, PRESIDENT, NEW AMERICAN FOUNDATION: If he sees the United States as his enemy, American drones are trying to kill him, frankly.

MESERVE (on camera): The FBI says it is not aware of any imminent or specific threats to the U.S. The agency points out that Mehsud has posted before that he would hit the homeland, but no attacks have materialized.

Jeanne Meserve, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: Do you have a question for the White House about the G-20 Summit or the economy? E-mail us at mailtothechief@cnn.com. Late in the hour, the vice president's chief economic adviser Jared Bernstein joining me live to answer your questions.

(COMMERCIAL BREAK)

PHILLIPS: Blame it on the alcohol? Heck, the government's got cocktails and ciggies to thank for bringing in present tax revenue more on this so called "Sin Taxes" taking effect today. Susan Lisovicz -- don't worry, she's sober -- but she's got all the details.

(COMMERCIAL BREAK)

PHILLIPS: After days of life on the edge, it's starting to feel life is returning to normal for the Red River area of Minnesota, North Dakota. Businesses are reopening their doors on both sides of the swollen river. The Red River is still above flood stage, but it's dropped more than three feet in the last few days. And that puts it below top of the levee walls. So the fear that the sand bags could give away is certainly easing up now.

(WEATHER REPORT)

PHILLIPS: Europe's first look at our first lady. And you thought she was popular here. Alina Cho takes a look at Michelle mania.

(COMMERCIAL BREAK)

PHILLIPS: G-20 meet number 10. Right now, the group of 20 leaders are about to sit down for a working dinner at the British prime minister's home on Downing Street. The real work starts tomorrow. But President Obama got a diplomatic workout today. One of several one-on-one meetings led to plans for a new round of nuclear arms talks with Russia.

Elsewhere in London, in the financial district known as The City, a noisy, sometimes violent G-20 backlash winding down now. Protesters clogged the streets to hold world leaders to account for the economic crisis and a number of other issues.

Mrs. Obama's work has been really hard, too. And she's trying to live up to Europe's great expectations.

CNN's Alina Cho explains.

ALINA CHO, CNN GENERAL ASSIGNMENT CORRESPONDENT: Hey, Kyra. You know, there's no denying that Michelle Obama is a rock star in America. But how is her style and personality playing overseas? Well, the early reviews are very good. The apparent love affair with the U.S. first lady is flourishing in Europe.

(BEGIN VIDEOTAPE)

CHO (voice-over): America's fascination with the first lady has been well-documented. But across the pond, Michelle Obama is a brand- new star. The headlines say it all.

UNIDENTIFIED FEMALE: She's very stylist. And she's good for women to have for Barack Obama.

UNIDENTIFIED FEMALE: We think she looks very good.

UNIDENTIFIED FEMALE: Yes, for her age.

CHO: As America's first lady embarks upon her first trip to Europe, the world is watching the royal family of the United States.

ALLAN LICHTMAN, PRESIDENT HISTORIAN: How the royal family and not just the head of government is received is very important for perception back here at home.

CHO: Most of all, the first lady, what will she wear? How will she acts? On today's schedule, tea with the queen. And "Insiders" say the queen and America's queen bee will be fast friends.

TINA BROWN, EDITOR IN CHIEF, "THE DAILY BEAST": What the queen really likes is authentic women. She likes women who are strong, who are unpretentious, and who are into their family.

She will love the fact that Michelle Obama was filmed, you know, digging her vegetable garden. That is very queen-like.

CHO: When France's First Lady Carla Bruni-Sarkozy met the queen, she curtsied and London went mad for her. On this leg of the trip, Mrs. Sarkozy is a no-show.

BROWN: I think she recognizes that next to Michelle, she's going to be badly compared.

CHO: And don't forget the French first lady is a former supermodel. In 1961, Jacqueline Kennedy wowed French President Charles De Gaulle with her flawless French and impeccable style.

LICHTMAN: So much so, that Kennedy said at one point, I am the man who is accompanying Jacqueline Kennedy to Paris. CHO: So could this glamorous first lady do the same to her husband? Our own Wolf Blitzer says no.

WOLF BLITZER, CNN CORRESPONDENT: They're gaga over Michelle Obama, but they're also gaga over Barack Obama. So I don't think he has to worry at all about the first lady overshadowing him. In fact, knowing that their relationship is as strong as it is, he wouldn't be upset about that at all. He loves this woman very much.

(END VIDEOTAPE)

CHO: You know, that's for sure. President Obama often jokes that Michelle is the boss. And historians say as America tries to rebuild its image on the world stage, Mrs. Obama will be key, visiting schools and hospitals, showing off her style is the ultimate international soft sell - Kyra.

PHILLIPS: Thanks, Alina. Well, we keep hearing that Michelle Obama-Jackie Kennedy comparisons. But there's another iconic figure that Europeans, especially the Brits, may be reminded of.

Let's talk about that with journalist and commentary Lola Adesiove. She joins me now live from New York.

So, Lola, the talk is, OK, she's the Jackie O, she's the Princess Diana. What do you think? You were saying they were calling her the mighty Michelle. Maybe we've coined something else.

LOLA ADESIOVE, BRITISH JOURNALIST: Yes, everyone's calling her mighty Michelle. And I think she has that every woman kind of perception. But also she's still glamorous, she's elegant. And she makes her husband look very, very good. So everyone in London and in England is very, very excited to have Barack and have Michelle there, too. You know, she's a very good -- good figure for Barack.

PHILLIPS: OK, we're hearing elegant. We're hearing authentic. But let's talk about the diversity factor. Is this popularity stem from the fact that she is all those things, plus she's diverse?

ADESIOYE: Exactly. I mean, you know, we haven't seen an African-American president before. And not just that, but we haven't seen this kind of really strong, amazing, you know, African-American first lady either. So from - for the minority communities abroad, it's very important that we have her there, and as someone who can represent, you know, what a modern woman can be and should be.

PHILLIPS: Is she changing perceptions?

ADESIOYE: Ooh, yes, definitely. I think so. I think what's very important about her and about her husband as well, is that they're kind of introducing a normalization of a strong, happy, successful black couple. And she has a big role to play in that.

PHILLIPS: Well, I'm curious. Not only as a journalist, but as a black woman, what do you think? I mean, what's it been like to talk about her, to write about her, to see this dynamic overseas? ADESIOYE: Personally, I find her fascinating. I'm impressed. I'm, you know, I'm inspired by her. As somebody who can be a mother, a wife and successful in her career as well.

So, you know, it's really, really been a great thing. And you know, as someone who is a dark-skinned, black woman as well, that's also very inspirational.

PHILLIPS: Do you think she's changing perceptions?

ADESIOYE: Definitely. I mean, she's stylish. You know, and that's important, because she knows how to look good and it's natural.

And she's successful. She's very much the kind of epitome, I think, of what a lot of women aspire to be. A woman who has it all, and is still down to earth.

PHILLIPS: Lola, thanks so much. Appreciate your time.

ADESIOYE: Thank you very much.

PHILLIPS: Well, if you were going to buy some sin, you should have done it before midnight. Liquor, cigarettes, now officially more expensive in some places. No fooling.

(COMMERCIAL BREAK)

PHILLIPS: All right, taking a look at the Big Board now. Dow Industrials up 148 points.

Well, apparently one cost of recession is a sin tax. The new 62 cents federal tax on cigarettes takes effect today and some state lawmakers are looking to jack up taxes on alcohol as well as smokes. Harkens back to the old days during the Great Depression when people wanted their beer. Even President Roosevelt said it was a good time for a beer after prohibition was repealed.

Let's talk about these taxes with Susan Lisovicz.

You know, the president, Susan, said, in a time like this, people need to be able to drink, because it helps them get through it. He really came forward and said that.

SUSAN LISOVICZ, CNN CORRESPONDENT: No question about it, Kyra. I mean, as if wearing those ugly clothes then wasn't enough to make you angry. Then you have 25 percent unemployment, you had banks failing, and you could not have a beer legally unless you made it in your bathtub. So FDR was the man who, yes, who liked his drink, within reason, of course. And he also recognized the value in job creation and taxes. These are industries that could bring in revenue at a time when the government desperately need it.

PHILLIPS: So is booze recession proof?

LISOVICZ: The word I keep hearing, Kyra, from industry experts is that booze is recession resistant. So you're seeing these striking changes. So people are going out less. We know that. We've seen that time and time again, with all sorts of retail numbers, consumer spending down.

People are still drinking. They're drinking at home. So they're not spending on alcohol in bars and restaurants. So that's a big, big change.

But what states are seeing, because they're suffering from the fact that consumers are spending less, is that they are taxing more. Kentucky, for instance, which is famous for its bourbon, is raising the sales tax, starting today, six percent and doubling the sales tax on cigarettes.

And you have states all over the country considering this, because they need to make up for the shortfall. The deficit that they're seeing as a result of consumer spending so much less.

PHILLIPS: How much of an impact do these taxes really make on sales?

LISOVICZ: Well, you know what? Another trend that you're seeing, Kyra, is that not only people are trying to spend less by drinking at home, entertaining at home, is that they're picking different brands.

So if you're lucky enough to have a company that puts out a vodka, say, that is ultra premium brand, like say a Tanqueray or you know, Kettle One or something like that, you're going to see the decline in sales. But if you make something called value, then you are seeing a pickup in your sales.

But I can tell you that a couple of the giants in the business, Diageo, Brown-Foreman for instance, two of them, both lowering their guidance for this year because of the decline in consumer spending.

PHILLIPS: So did you bring any samples back from that visit you made to Jack Daniels in Louisville?

LISOVICZ: Well, actually, no, I didn't, but I happen to have, Kyra...

PHILLIPS: Yes?

LISOVICZ: ... exhibit "A," because it is a 75th anniversary of the repeal of prohibition. And Brown-Foreman, which makes Jack and Old Forester Whiskey, and there you saw the pictures of the production process left this bottle. We're supposed to break it in case of emergency. We have not had an emergency, I'm happy to say.

PHILLIPS: I think Sonya (ph) had a picture for us celebrating that moment.

Sonya (ph), do you still have that? Of all the women toasting the exact moment that Susan's talking about right now?

LISOVICZ: We want beer, right? PHILLIPS: There it is, right there. We want beer, baby. Look at all those women.

LISOVICZ: Women, we know what we want.

PHILLIPS: The beginning of the beer belly, right there, ladies and gentlemen.

LISOVICZ: That's why they wore corsets, I think.

PHILLIPS: There you go, had to suck it all in.

All right, Susan. Good to see you, thank you so much. Top of the morning.

LISOVICZ: Likewise.

PHILLIPS: Ford released its sales in the U.S. for March, and as expected, the he news is pretty bad. Ford says its sales plummeted 41 percent from a year ago.

Grim news for Honda, too. It says that its sales plunged 36 percent. Other automakers plan to report their March sales later today.

Atlantic Southeast Airlines voluntarily grounded nearly 40 percent of its fleet because of engine safety concerns. The airline is rechecking the engines of 60 of its Bombardier CRJ200 jets after an internal audit raised questions whether they had been properly inspected. It's expected to take up to 42 hours and travelers on ASA can expect some delays. A company spokeswoman says that the airline itself reported the problem to the FAA. ASA is a unit of Sky West and a regional carrier for Delta, by the way.

Well even the reporter gets stumped on this street quiz.

(BEGIN VIDEO CLIP)

RICHARD ROTH, CNN CORRESPONDENT: That man is the important international -- wait a minute.

You don't know Gordon Brown? Where you from?

(END VIDEO CLIP)

PHILLIPS: Just who are these G-20 guys? Richard Roth tries to find out.

(COMMERCIAL BREAK)

PHILLIPS: The people who run the world's economy and who hope to fix it are about to call it a day. For President Obama, a working dinner with his G-20 partners in London caps a day of nonstop meetings and courtesy calls with the Russian and Chinese presidents, the British prime minister, and Queen Elizabeth herself. Not far away, but well out of sight of the VIPs, a "G-20 Meltdown." That's what a coalition of protest groups is calling today's upheaval in London's financial district. You've seen it live on CNN - anarchists, capitalists, all around malcontents clashing with riot police and trashing at least one bank.

Well, the decisions that they make will likely impact the global recession, so just who are the G-20 leaders? CNN's Richard Roth gives and takes the quiz.

(BEGIN VIDEOTAPE)

ROTH (voice-over): The G-20 in London. The G-20.

(on camera): What is the G-20?

UNIDENTIFIED FEMALE: I have no idea.

UNIDENTIFIED FEMALE: The G-20? I don't know.

ROTH (voice-over): The G-20 wasn't gee whiz to some Americans.

UNIDENTIFIED MALE: G-20 is the summit of leaders...

UNIDENTIFIED FEMALE: ... that gather together to decide on economic and environmental issues.

ROTH: World visitors get to stay.

UNIDENTIFIED MALE: If the 20 industrial nations that meet and, I guess, basically decide our fate.

ROTH: But just who are these guys? And gals?

UNIDENTIFIED MALE: That's Angela Merkel.

UNIDENTIFIED MALE: Who is this man? You know, I always see on TV. I'm like, I can get these. I do not know this man is.

ROTH (on camera): Who is this?

UNIDENTIFIED FEMALE: Sylvester Stallone?

ROTH: No, that's not Sylvester Stallone. That's Sarkozy, the president of France. Maybe his wife calls him Rambo when we're not looking.

UNIDENTIFIED MALE: That is the prime minister of Great Britain.

ROTH (voice-over): So many leaders, hard to keep up.

(on camera): Whoa, that was the...

UNIDENTIFIED MALE: Medvedev.

ROTH: ... that was the Russian president who almost fell off down Fifth Avenue.

UNIDENTIFIED MALE: That is a dictator of Venezuela.

ROTH: No, it's the prime minister of Italy.

All right you got that cold. Where are you from?

UNIDENTIFIED MALE: I'm Indian. He's the Indian president.

ROTH: Oh, yes, wise guy, who is this?

UNIDENTIFIED MALE: He's the - he's the Japanese - the Chinese guy.

ROTH: Yes; no, Secretary-General Ban Ki-moon.

Next.

(voice-over): One leader was recognized by everyone.

UNIDENTIFIED FEMALE: Barack Obama.

ROTH (on camera): You don't know Gordon Brown? Where you from?

UNIDENTIFIED MALE: Gordon Brown?

ROTH: Where you from?

I'm not fighting with you. I'm not...

(voice-over): One man heatedly criticized the TV street quiz.

UNIDENTIFIED MALE: The assignment is go out and support the theory that Americans or people on the street are uninformed about world matters. OK. They're not informed, they're uninformed. But we already know that.

ROTH: Well, who is this?

UNIDENTIFIED MALE: Berlusconi.

ROTH: Very good. Who is this?

UNIDENTIFIED MALE: Very good? I don't think it's very good. I think -- keep going.

ROTH (voice-over): Your reporter wasn't perfect.

(on camera): That man is an important international - I didn't - wait - wait a minute. I...

(voice-over): There's always the cat-loving, prime minister of Canada, Steven Harper.

UNIDENTIFIED MALE: Good looking cat.

ROTH (on camera): Well, I think we've all learned something, haven't we?

UNIDENTIFIED FEMALE: Yes.

(LAUGHTER)

ROTH (voice-over): Richard Roth, CNN, New York.

(END VIDEOTAPE)

PHILLIPS: So, do you have a question for the White House about the G-20 summit or the economy? E-mail us at mailtothechief@CNN.com. Next, the vice president's chief economic adviser Jared Bernstein joining us live to answer your questions.

(COMMERCIAL BREAK)

PHILLIPS: Everybody's waiting for a glimpse. First it was a visit with Queen Elizabeth, then Prince Philip, now pretty soon the Obamas, along with members of the G-20 summit, will be arriving there at 10 Downing Street to meet and greet with the prime minister. We'll track it; we'll follow it.

Congressional republicans shoulder-to-shoulder in locked step against the president's budget. While most of the White House was in London, the GOP rolled out an alternative budget that would cut taxes and roll back the entire economic stimulus package. It would freeze non-defense spending for five years.

Joining me now to talk a little bit about the budget and answer your e-mails, Jared Bernstein, he's vice president Biden's chief economic adviser.

Jared, before we get to the e-mails, I've got a question about the republican budget plan. That probably could probably take up our whole entire interview.

GOP House members want to spend near $5 trillion less than what the president wants. So is this going to end up with the White House and democrats willing to compromise? What's your take?

JARED BERNSTEIN, CHIEF ECONOMIC ADVISER TO VICE PRESIDENT BIDEN: Not a compromise on this budget.

This republican budget, with due respect to our friends on the other side of the aisle, it has nothing to do with the reality of where we are in this economy today. Nothing to do with the economic priorities of the American people, whether it's energy, education, health care, all of which gets gutted in this budget compared to ours.

Those are the priorities of the electorate that sent us here to reform those issues. Not to kick the can down the road, not to once again engage in this age-old failed experiment of supply-side, trickledown economics. Cut taxes for those at the very top and gut the tax cuts, take off, repeal, rescind the tax cuts on the middle class that are at the heart of our budget.

That's what they do in this budget. It's as if it's a budget from another planet.

PHILLIPS: All right. Which planet?

(LAUGHTER)

All right, get back to me on that one, Jared.

BERNSTEIN: Yes, that's a great question.

PHILLIPS: All right, let's get right to the e-mails, we've got a lot of them. Rob in Florida wants to know, "Since they contributed to the mess that we're in, is it time to regulate hedge funds? Could this be done?"

BERNSTEIN: Not only could it be done, but it's one of the priorities that the Treasury secretary has set out in a regulatory reform agenda that is something being discussed at the G-20 in coming days by the president and other economic leaders.

Hedge funds have typically operated outside any oversight or purview of exchanges. And so we've had good discussions about bringing that kind of shadow part of the financial system into the light.

PHILLIPS: All right. This one coming from "Deeply Concerned," asking, "Why do we borrow money from China? Why can't some of the billionaires in our own country loan us the money?"

BERNSTEIN: Well, Deeply, we actually do borrow money from folks here as well as from those in China.

One of the, I think, very positive aspects of a global economy is that capital is able to flow to the most lucrative market where people feel they can get the best return.

And it's a timely question, because even with all the economic turmoil that's been going on, not just here, but in world economies, American treasuries are still one of the best investments in the world.

PHILLIPS: When you talk about the controversy surrounding China, whether it's human rights or competition, Jared, and also the president meeting with leaders in China, too, at the G-20, could there be a change in trade or policy or relations when you consider those two things?

BERNSTEIN: I don't think so. I think that, as the secretary of the Treasury noted the other day, the dollar remains the currency of note for world trade. China continues to invest in American bonds. And for the very reason I said earlier, one of the best investments on the planet in terms of its safety, reliability and continues even amidst the kind of turmoil we've seen, to hold that position. It's very impressive performance of the good old dollar.

PHILLIPS: Jared, final question. And this was something we actually wanted to know all throughout the afternoon, so I'm glad that a viewer has asked this. Patricia wants to know, "Does the Obama administration take the G-20 protests seriously and understand that they reflect the disdain for economic inequalities and policies?"

A lot of us wonder if the president or you or anybody within the staff really does pay attention to those protests. And, you know, does it change policy decisions?

BERNSTEIN: Let me put it this way, Patricia. It's been my privilege to meet with the president and the vice president daily to talk about the economy when we have our daily brief. And the thing that has incensed this president the most is precisely the kinds of reckless abuses, the kinds of excessive compensation practices, the speculation with no mindset to actual responsible financial kind of prudential practices. You know, that's -- that absolutely has this president's attention.

So you can hear that during the AIG discussion of a few weeks ago. He listens to that anger and understands it deeply. And is trying to craft a set of policy solutions that push back against those very forces that got us to where we. And it's one of the things that he's bringing to the G-20.

PHILLIPS: Jared Bernstein, always appreciate your time. Thanks.

BERNSTEIN: My pleasure.

PHILLIPS: Another international company slashing its work force because the global recession. 3M says it's eliminating another 1,200 jobs worldwide. Fewer than half will be in the U.S., but it will include several hundred in Minnesota where the company has its headquarters. 3M says the that the 1,200-figure includes cuts already made this quarter.

Also, who says you can't have a little fun in time of a recession? Not these folks in New York. They took part in a tongue- in-cheek "Unemployment Olympics" yesterday. Among the events? In a twist on the old game "Pin the Tail on the Donkey," well, participants pulled a hat over their eyes and spun around before using a pushpin to attempt to pin the blame on the boss.

As always, "Team Sanchez" in Atlanta working on the next hour of the CNN NEWSROOM.

What'cha got going, Rick?

RICK SANCHEZ, CNN ANCHOR: Well, in n our constant effort, Kyra, to try to be interactive, today we're going to try something new. We're actually going to have viewers having a conversation and you'll be able to see that when you watch our newscast. Viewers will be having a conversation amongst themselves, as they say on "Saturday Night Live" "talk amongst yourselves," while we are sharing opinions of some of the newsmakers out there.

So this is something we're going to unveil today. It's the first time we've tried this. And oh, what a day to do it on. I mean, my goodness. Look what's going on. This is possibly one of the most important days since Barack Obama has taken office. We've seen the protests that have been taking place all day long today in London.

And there were two really important meetings. I mean, the president of the United States meeting with President Hu of China, meeting with President Medvedev of Russia, where important policies are going to come up that are going to affect every single citizens of the United States. Nuclear missile treaties that could come out in future meetings with these guys. And obviously, the economic tit-for- tat that's been going on with the Chinese as well.

So, listen we're going to be all over this today. We're going to make sure that you see some of the protests.

And I'm going to bring in my old buddy from Miami. Remember when I was a cop-beat reporter in Miami, I was constantly covering disturbances and even some of the big riots we had down there. How are police supposed to deal with this? Well, Chief Timmeny of Miami is going to join us. He's going to be on the air taking us through some of this video as well.

PHILLIPS: You creating a little of your own protest as well.

Good to see you, Rick. We'll be watching.

A nasty April Fools' computer worm that's no joke. The latest on how hackers are trying to use your computer to help them commit crimes.

(COMMERCIAL BREAK)

PHILLIPS: We're going to take - apparently, the Obamas have arrived at 10 Downing Street. Getting ready to enjoy dinner with the prime minister of Britain.

Celebrity Chef Jamie Oliver, we're being told, plans to serve dinner. I think he's like 32 years old. I've seen his cooking show before. He's actually pretty amazing. He's that young British chef, and I guess he's coming in to do a little Scottish organic salmon, little welsh lamb and a traditional bake-well tart.

There he is right there. The show's pretty funny. He's got a great sense of humor. So my guess is he will be pretty entertaining as well as the food being pretty yummy.

All right, hackers created it, computer security experts are fighting it. What do you know about the Conficker worm computer virus? Well, our Josh Levs in Atlanta with some tips on protecting your PC.

Hey, Josh.

JOSH LEVS, CNN CORRESPONDENT: Hey, Kyra.

You know there are all these horror stories, and so far, it does not seem to be too bad, based on what we've been seeing. I'll show you the headline of the CNN.com story right here which is basically saying what I just told you, "No problems so far."

I had the chance to talk with one of the people who is part of the Conficker Cabal trying to protect the country.

Take a look.

(BEGIN VIDEO CLIP)

DON DEBOLT, CONFICKER CABAL: Right now, everybody must know that Conficker is live and out on the Internet. This latest variant, Conficker C, that was set to trigger on April 1st, is trying to call home but it hasn't been successful yet.

LEVS: OK. Yet, so you're saying it still could be?

DEBOLT: Yes. There is a potential. But through the efforts of the Conficker Cabal, otherwise known as Conficker Working Group, efforts are taken to share information worldwide about this variant and take necessary precautions to protect the Internet at large.

LEVS: Don, has the threat been overblown here? There was a lot of horror stories about this suddenly appearing on April Fool's day, taking over, potentially, millions of computers, using them in these zombie ways. Was the threat overblown? Did we hear too much about this?

DEBOLT: No, I don't think so. We're talking about a threat that infected estimated 10 million systems worldwide. That's the definition of a very successful Internet worm.

(END VIDEO CLIP)

LEVS: And, Kyra, you know what, Microsoft, check this out, $250,000 for anyone that can produce the people who created this thing.

So clearly, it's still serious. Just so far, has not had a massive impact in America. And maybe we'll escape this one, relatively.

PHILLIPS: Wow, 250 grand.

LEVS: Yes, that's something, huh? Especially in this economy.

PHILLIPS: All right, Josh, thanks so much. We'll see you tomorrow.

That does it for us here in Washington D.C. We'll be back in Atlanta joining my colleague, Rick Sanchez.