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President Obama Plans Speech on the Economy; White House Dog's Arrival Expected This Afternoon; Ship Captain to be Reunited with Crew in Kenya; Stormy Weather Knocks out Power in Georgia, Spawns Tornadoes in Florida; Americans Spend More on Taxes Than on Food, Clothing, Housing, Pay Less Tax Than Other Developed Nations; Alcohol Problems Located on a Continuum, Research Shows; Can Cuba Handle a Possible Tourist Onslaught?; IRS Has List of Internet Tax Scams to Avoid; Mini, Micro Cars Get Poor Crash Ratings

Aired April 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: Roadmap to recovery. President Obama speaks this morning on how to get the economy moving in the right direction. We've got a preview.

And your date with Uncle Sam tomorrow. We're focusing on taxes, the real deal today. This hour, who pays the biggest chunk and new deductions you should know about.

Plus, is your drinking pattern risky? Take an online quiz to see if you have a problem with alcohol and find strategies to cut back or quit.

It's Tuesday, April 14th. Hi, everybody. I'm Heidi Collins. You are in the CNN NEWSROOM.

Your money. President Obama's focus. Here is what we know about his appearance this morning at Georgetown University. The White House describes it as a major speech on the economy.

He is expected to add a cautionary tone, though, to recent signs of recovery. Specifically he'll warn that there may be more months of bad unemployment news ahead. The White House says the speech will make it clear that much more needs to be done for the economy to turn from recession to recovery.

We have CNN correspondents covering the different angles of this morning's speech. Suzanne Malveaux is at the White House this morning. And in New York, Christine Romans of the CNN money team.

Let's begin with Suzanne this morning, though. Suzanne, what do we expect to hear exactly in this speech?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Heidi, I know they're talking about this being a major speech here, but I've been talking with White House aides and he's not getting into a lot of specifics. There are not going to be any new policy initiatives that he is going to be talking about dealing with the economy.

This is really more like a progress report, if you will, to reach out to Americans and say here is what we think is working with this economic stimulus package, the $787 billion. We heard the president yesterday talking about more than 2,000 construction projects that are under way, that they are under budget and that they are ahead of schedule so expect to hear those kinds of things.

He'll also touch upon the fact that he got some concessions, some things from European leaders from last week, $100 million or so, to help developing countries get loans, things like that, that they're also going to crack down on their own financial institutions of abuse. That kind of thing.

But he is also going to mention as well that there is more work that needs to be done. That there's still thousands of people that are out of jobs. A lot of people who are not in their homes. So he's going to ask for patience from the American people.

And, Heidi, what's important about this speech is really the timing of all of this. He is going to be off again, another foreign trip, Mexico and Trinidad. He's really going to be trying to make the connection here to tell the American people, I'm paying attention to the problem, I am still on it, and we do believe that there's some signs in this economic stimulus package of things beginning to turn around -- Heidi?

COLLINS: All right. Well, we have a lot to talk about on that regard and we are going to be watching that speech very closely.

But, Suzanne, I can't let you go without asking about the dog. Yet again. A lot of people very interested in Bo and I understand there might be some news about when he could be moving into the White House?

MALVEAUX: Well, I have learned, because I have been asking about this, this is a big story.

COLLINS: I know you have.

MALVEAUX: As we know, when Bo is arriving. I understand -- I've been told that he's not yet here at the White House but that he's expected to come this afternoon. It makes sense. Sasha and Malia coming home from school that there would be a nice picture of all of them together.

Also I was told, too, it's been raining this morning so that the weather might have some impact on how it's all rolled out. But we do expect to see the first pooch later today, Heidi. So stay tuned.

COLLINS: Yes. Yes. Suzanne Malveaux, this is what you went to journalism school for. The...

MALVEAUX: Absolutely.

COLLINS: The dog detail. All right. We appreciate it. Thank you.

MALVEAUX: We're all over it. All right. Thanks. COLLINS: Now let's shift perspectives a bit from the political to the business side of the equation. For that, we turn to CNN's Christine Romans in New York.

Christine, last week, the president was talking about glimmers of hope in the economy. A lot of people, obviously, want to know what's going right when we are talking about the economy.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good morning, Heidi. That's right. The president glimmers of hope, the Fed chief Ben Bernanke text of a speech this morning released by the Fed. He says that there are tentative signs that the dramatic declines in the economy are slowing and we've had housing refinancings have absolutely percolated here, as have some mortgage interests.

There's been also a lot of talk about the fact that the small business administration aid and the consumer finance part of the government's efforts to get credit lending again, there has been some progress there.

And frankly, Heidi, a great deal -- a historic amount of money is being pushed and about to be pushed into this economy. Many economists think you're just now starting to see the signs of that begin to follow through.

COLLINS: Yes. But, Christine, it seems like it could be a little bit risky, though, for the president if he talks up the economy too much.

ROMANS: That's absolutely right. And this is the balance that they have to strike. They have to try to engender confidence that they're doing all the right things to eventually get the economy to recover and rebound.

But then they're faced with these head winds of all of this economic data. I mean, just this morning we got two economic reports that show, Heidi...

COLLINS: Right.

ROMANS: ... just how weak things are. Retail sales down 1.1 percent. You saw for the categories of auto sales, furniture, appliances, clothes demand plummeted for those sorts of items. And frankly, the consumer in the first three months of this year spent 8.8 percent less than they did at the same time last year on products.

I don't know about you, but if you've pulled back 8 or 9 percent then you're right around with the rest of the economy. And wholesale prices were down 1.2 percent. I mean that's a sign of -- that's an inflation number. It's not the inflation you pay but it's the inflation that the stage for products just before they get to you, down 1.2 percent, that shows weak demand and shows a weak economy.

COLLINS: Yes. Yes. Everybody is still really watching their pennies.

ROMANS: Absolutely.

COLLINS: All right. CNN's Christine Romans from our money team. Thank you, Christine.

We will have live coverage, of course, of the president's speech later this morning. It is scheduled for 11:30 Eastern, 8:30 Pacific.

Pirates off the coast of Somalia are making good on their threat of retaliation over the rescue of American captain Richard Phillips. They've hijacked three more ships in the past 24 hours all in the Gulf of Aden.

The largest a cargo ship managed by a Greek company. More than 20 crew members on board and pirates also captured two Egyptian fishing boats and their crews.

Captain Phillips is headed to Kenya right now, where he will be reunited with his crew from the Maersk Alabama.

CNN's David McKenzie is joining us now live this morning from Mombasa, Kenya where the crew has been resting up from their standoff with pirates.

So, David, tell us a bit more about the mood of the crew today. How are they feeling?

DAVID MCKENZIE, CNN CORRESPONDENT: Well, Heidi, they feel really good, as you can imagine. They are here at this resort in Mombasa. They're lounging by the pool. They're calling their families. They're just resting up a little bit after this harrowing ordeal that they had to go through with the pirates.

They left their ship, the Maersk Alabama, this morning from the Mombasa port and were relieved with another crew and now they are here resting up. And we spoke to one of those crew members.

(BEGIN VIDEO CLIP)

JOHN, MAERSK ALABAMA CREW MEMBER: Well, I just want to see him one more time and tell him that I owe him my life and that's it. I just want you to understand there's a lot of emotions involved in this.

(END VIDEO CLIP)

MCKENZIE: Well, Heidi, you know, obviously, very emotional here, the crew very much waiting for Richard Phillips, the captain, to come back. We've heard that he is coming to Mombasa to unite with the crew before they all head home to the states -- Heidi.

COLLINS: All right. CNN's David McKenzie, sure do appreciate the update on that. Thank you.

Less than 39 hours to go to finish your taxes. Think you paid too much? Well, you might be surprised.

And how much is too much? An online quiz checks your alcohol consumption and looks at ways you can cut back.

ROB MARCIANO, AMS METEOROLOGIST: I'm Rob Marciano in the CNN severe weather center. After a rough day across the Southeast yesterday, the storms have moved into Florida. Tornado watches and warnings right now.

Weather is coming up after the break.

(COMMERCIAL BREAK)

COLLINS: Chainsaws are buzzing a day after violent winds tore across Georgia. Trees are down in one neighborhood after another in the Atlanta area. Some smashed through houses. In fact, one fell on a car, killing the driver. The winds gusting to more than 55 miles per hour also brought down hundreds of power lines.

CNN's Rob Marciano standing by now at the weather center to tell us a little bit more about this.

Yes, I tried to drive home and I couldn't get past on the road because all the power trucks were out trying to restore power in a lot of different areas.

MARCIANO: It was quite a wind storm across the north Georgia area, Heidi. And it was even associated with thunderstorms. It was a unique weather phenomenon that can happen in the Southeast, especially after a strong line of thunderstorms roll through. A little rain behind it, and you get what is called a wake load.

It's fairly technical, but let's not bother ourselves with that right now. Let's talk about what's happening across Florida.

(WEATHER REPORT)

MARCIANO: All right. I want to roll this iReport for you. This was taken out of Destin, Florida yesterday. When a tornado warning was happening, pretty intense thunderstorm that was kind of rolling in there. Not only heavy rain but some rotation. Listen to her.

(BEGIN VIDEO CLIP)

JAN MOLL, CNN IREPORTER: Panhandle of Florida and having severe flooding on all of the roads. Reporting for CNN iReport.

(END VIDEO CLIP)

MARCIANO: How about that? IReport. Breaking out the signout there as we like to say in the business. Much calmer day today, Heidi, across Atlanta and metropolitan area, although there are a few showers and thunderstorms that rolled through earlier.

Those straight-line winds in excess of 50 and 60 miles an hour. After all the rain the southeast saw for the last couple of weeks, saturated ground and big old trees toppling and creating some havoc on the roadways and in people's homes in some cases.

COLLINS: Yes. No question.

MARCIANO: Back over to you.

COLLINS: I feel badly. It seems like the storm is following me everywhere I go. I was just in Destin, and now I'm here and here, too, so.

MARCIANO: Well, we don't want to kick you out of here but maybe your luck will change.

COLLINS: But move along. All right, Rob, we'll check back later on. Thank you.

MARCIANO: You bet. Sure.

COLLINS: Still working on your taxes? CNN is here to help. And we have everything you need to know from what you can do to deduct and who pays what. For that, let's bring in Christine Romans once again.

All right, Christine. Does anyone really get out of paying taxes?

ROMANS: No, not really. And especially the people who are working below me. I'm sure they're going to be filing an income tax.

COLLINS: Absolutely.

ROMANS: Can you hear that?

COLLINS: I can hear all of that. That's lovely.

ROMANS: Sorry about that. Talking through the file here quickly. You know, don't blame the IRS. They just collect the taxes. It's Congress that writes the laws that make up the 16,000 pages of tax code in this country. We thought you'd like to know who pays what. The answers might surprise you.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): Think of all you spend on food, clothing and housing. Americans, on average, spend more on taxes than all of that combined. And it's not just the dreaded federal income tax.

UNIDENTIFIED FEMALE: There's different pockets of state income tax. There's city income tax. There's sales tax and states, as we know, and localities get really creative with sales tax, and then real estate property taxes.

ROMANS: Americans love to hate the tax man, but consider this. Your taxes are low relative to other developed nations. Much less than in Japan, Australia, Canada, Germany, the U.K., France and Sweden, where taxes pay for socialized medicine and other benefits.

In the United States, it varies depending on where you live. Alaska leads the states with the lowest tax burden. These states, including New Jersey, Connecticut and California, have the highest. Rich investment bankers aren't so popular these days but...

LEN BURMAN, TAX POLICY CENTER: There is just 1 in 5 Americans pays 97 percent of the overall individual income tax.

ROMANS: And tax experts note the share paid by companies has been declining.

Who doesn't pay? Seniors living solely on Social Security and many low income families with children, thanks to refundable tax credit. But that's income tax.

BURMAN: There is nobody who escapes tax entirely, unless they are a hermit living far, far away where they don't have any cash transactions.

(END VIDEOTAPE)

COLLINS: Christine, just in time for more drilling there. I know we've seen the tax can be used in a lot of different ways other than to just raise revenue, right?

ROMANS: That's right. You know the tax code is sort of front and center in the current efforts to stimulate the ailing economy. You know your jobless benefits this year will be tax-free on next year's return and the IRS wants you to know that you can claim a credit for buying a new car or a new house.

Thanks to the economic stimulus passed by Congress and one of our colleagues said, you know, it's a good year to have a baby and buy a house for a lot of people in this economy. He said he was getting big refunds this year.

So, you know, we get revenue from our tax code, but then we also use our tax code to stimulate the economy like we are right now.

COLLINS: All right. CNN's Christine Romans, I have so many questions but I'm afraid we're going to hear more drilling and chainsaws.

ROMANS: I know. It's nice to see the economy at work right here, right?

COLLINS: Exactly right.

(CROSSTALK)

COLLINS: Christine Romans, thank you.

ROMANS: You're welcome.

COLLINS: Fears over possible engine fires now prompting General Motors to recall 1.5 million older cars. The cars are made between 1997 and 2003. The recall includes Chevy Impala, Luminas, and Monte Carlos, Buick Regals, Oldsmobile Intrigue and the Pontiac Grand Prix. GM says sparks could ignite oil on the engine. They'll make the repairs for free. Well, small cars, it may be great on gas. A new report says they don't fare so well in collisions with larger vehicles. The Insurance Institute for Highway Safety conducted crash tests on 2009 versions of the Smart 42 Honda Fit and Toyota Yaris.

The results found drivers could face significant leg and head injuries in severe front-end crashes with larger mid-sized vehicles. Automakers who manufacture the small cars say the test simulated a high-speed crash that rarely happens on the road.

Rethinking your drinking. An online quiz helps you learn if you have a problem with alcohol and, if so, how to solve it.

(COMMERCIAL BREAK)

ANNOUNCER: Live breaking news. Unfolding developments. See for yourself in the CNN NEWSROOM.

COLLINS: In fact, that's exactly what we have right now.

Rob Marciano, tornado on the ground in Florida?

MARCIANO: Yes. We have mentioned this radar indicated tornado warning just a few minutes back. And now it's just been sighted on the ground. A tornado sighted on the ground in Pasco County just north of Tampa. And now that has prompted the additional tornado warnings for Lake County and western parts of Orange County.

The red watch box, that's a tornado watch. That's in effect until 2:00. Let's concentrate more on the pink polygon there which indicates the tornado warning that's just been reissued and that's in effect until 10:00 Eastern Time.

These markers right here, these two markers is where the radar is where we're seeing some rotation. This one down here across southern parts of Lake County, that is where the tornado has been spotted. This one up here, it seems to be developing a little bit more intently.

So two spots. Northern Lake County and southern Lake County, both heading into western Orange County, have the potential of seeing a tornado there. Regardless of that, Heidi, strong winds in excess of 50, 60 miles an hour will do some damage into a highly populated area there...

COLLINS: Yes.

MARCIANO: ... just west of Orlando, Florida. So, dangerous situation there in central Florida. Certainly want to take cover.

COLLINS: OK. Very good. Rob, keep us posted. Thank you.

It's estimated that 23 million Americans struggle with some sort of chemical addiction. Alcohol, by far, the most common. But as with many addictions, people often don't realize they have a problem.

Joining us now is our chief medical correspondent Dr. Sanjay Gupta.

So, Sanjay, it's a good question. I mean how do you know if you or someone you know really does have a problem with addiction?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: You know, what was interesting as we started to research this is that people draw a bright line. A clear line between alcoholic or nonalcoholic.

And what we find, and what a lot of medical experts will say now, is that it's more of a continuum. You have sort of people who have -- real problem drinkers and people who are alcoholics. So in between is sort of very vague.

The bigger question they have is trying to find those people early. And the National Institute on Alcohol and Alcohol Abuse came up with a screening question that they think is very important in trying to identify people who could potentially have a problem.

Take a look there. This is after looking at 43,000 people. For men on any day in the past year have you had more than four standard drinks? That's for men. And for women, a very similar question. On any day in the past year, have you had more than three standard drinks?

And what they're saying is -- this doesn't mean you're an alcoholic. It doesn't necessarily mean that you're a problem drinker. What it means is you look at all these people you fall in the top fifth, the top 19 or 20 percent of people who are likely to develop a problem later on.

COLLINS: Later. I see.

GUPTA: So, comments? You got...

COLLINS: Well, no, no, no. I'm just saying, you know, it seems like three is not that much.

GUPTA: Not that much.

COLLINS: You go to a party, New Year's Eve.

GUPTA: That's right.

COLLINS: I mean you think of all of that, New Year's Eve happens every year. I mean, you know? Just trying to be realistic.

GUPTA: Yes, and it's not diagnosing alcoholism. But I think the problem was, and what a lot of people sort of figured out, is they were catching these problems too late. After addiction, it had already become full blown.

COLLINS: Sure.

GUPTA: So was there a way of finding these people earlier? Was there a screening test of some sort? So the NIAA, which is this institute that I was talking about, went so far as to create screening videos for primary care doctors. The first sort of line of defense against addiction and this is what they came up with in terms of what they showed to doctors.

Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Do you think I'm an alcoholic?

UNIDENTIFIED MALE: Based on what you said, you do have signs of alcohol dependence. You are depressed mood, insomnia and fatigue may well be caused by your heavy drinking.

(END VIDEO CLIP)

GUPTA: So that's not the most exciting video there.

COLLINS: No.

GUPTA: But the point is, you know, this was something that was typically relegated to a subspecialist or something. Could these be problems that are caught earlier?

COLLINS: Right. Right.

GUPTA: Again, even when in the primary care doctor's office.

COLLINS: Yes. All right. Well, so you've been researching all types of addictive sort of behaviors across the U.S. for this upcoming documentary that we're looking forward to.

GUPTA: Yes.

COLLINS: What did you learn that surprised you the most?

GUPTA: You know, I think this, first of all, did surprise me. This idea that we tend to stratify alcoholic or nonalcoholic. And it's really not that easy. I think in some ways maybe that's not a surprise because it always seem like there was a lot of people who sort of fell in the middle there.

But I think what also surprised me was that when people always say you fall off the wagon, you're back to the disease again, not necessarily. There are a lot of people who actually get better...

COLLINS: Really?

GUPTA: Stay better and never have a problem again in their lives. So, you know, they live in this constant paranoia that they are going to just fall off the wagon and again become an alcoholic. Not always the case. And treatment does seem to work.

This still comes down to the age-old question when it comes to alcoholism. Is this a weakness of willpower or is this a disease of the brain? And this was something I was absolutely fascinated by and we're going to try to answer. COLLINS: Yes. Very good. Remind us, the documentary?

GUPTA: Yep. This weekend, Saturday and Sunday, it's called "ADDICTION." It's 8:00 p.m. and 11:00 p.m. Eastern. We spend, you know, several months, just followed addicts and looking at the latest science of what works and doesn't work.

COLLINS: Well, yes, a mother, a writer and a student, all addicts.

GUPTA: Yes. And this mom's story, this is not someone you'd ever portray as an addict.

COLLINS: Really?

GUPTA: This is just remarkable to hear her story.

COLLINS: All right. Well, we are very much looking forward to it. Thank you.

GUPTA: Thank you.

COLLINS: Dr. Sanjay Gupta, appreciate that.

Well, if you haven't already filed your taxes, you are running out of time, that's for sure. It's tomorrow, right? CNN is here to help you, though. We are going to give you the real deal on deductions that can save you money.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.

COLLINS: Well, after the second time in less than a week, a major bank says it made a lot of money in the first quarter, but that's still might not be enough to give the market a boost.

Susan Lisovicz is at the New York Stock Exchange. That was a preview and there is the opening bell. See how well we timed that?

SUSAN LISOVICZ, CNN CORRESPONDENT: Oh, Heidi, you are a master of timing. And I'll tell you, we've got a busy day on Wall Street. A regular econorama.

COLLINS: Wow.

LISOVICZ: Let's start with Goldman Sachs. They wanted to get the news, the good news out early. The bank reporting first quarter earnings a day ahead of schedules, perhaps its bragging right. The company is reporting a $1.8 billion profit. Far better than expected.

Goldman is also selling $5 billion in stocks. That money will help it repay the $10 billion loan that Goldman got last year from the government. Wants to get out from under the government's thumb. Despite the solid results, we are seeing a sell-off at the open. Wall Street waiting to hear what President Obama will say about the economy. He is set to speak in about two hours. Fed Chairman Ben Bernanke meanwhile said in prepared comments that he sees tentative signs that the economy's decline is easing. You also want to see more stability in the financial sector.

The latest economic reports are pressuring stocks. Retail sales tumbled more than 1 percent last month as demand for cars dried up. Wall Street was expecting sales to increase. Meanwhile, wholesale prices a key inflation index fell more than 1 percent, much more than analysts were expecting and prices on Wall Street also falling in the first minute of trading. The Dow is down 57 points or about three- quarters of a percent. Ditto for the NASDAQ. Goldman Sachs shares are down five percent at $123 a share. It's had a remarkable run-up in the last few weeks, so there's a little bit of profit-taking at the open. Heidi?

COLLINS: All right, Susan Lisovicz, appreciate that. We'll check back with you a little later on.

Meanwhile, it's the issue that has consumed his presidency. And, today, President Obama is getting ready to make a speech on the economy. White House press secretary Robert Gibbs calls it an update on the steps toward recovery and the challenges ahead. Last week, the president spoke about glimmers of hope in the economy. But the White House is cautioning against too much optimism. Yesterday, Gibbs warned of more months of unemployment. The president will be speaking at 11:30 eastern this morning. We of course will bring it to you live.

A majority of people think President Obama is on the right track with the economy. 58 percent of those surveyed in a new CNN Opinion Research Corporation poll thinks he has a clear plan for recovery. But 42 percent say they have reason to doubt him. Republicans don't fare as well. Only 24 percent think the GOP has a clear plan to deal with the economy. 74 percent do not agree.

Tax deadline day is tomorrow. And some deductions could decide if you pay up or get paid. This tax filing season you want to be sure to get all of the breaks and credits you can get. Our personal finance editor Gerri Willis is here now to talk more about this. Gerri, what do we need to look for specifically here?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: All right, well you want to look for those deductions Heidi. You want to grab the biggest, most lushest tax credit this year, here is what one tax expert had to say.

(BEGIN VIDEO CLIP)

BOB MEIGHAN, VICE PRESIDENT OF TURBOTAX: The most valuable credit this year will be the first time home buyers credit which is worth up to $8,000. If you're buying a house for the first time, you get a credit. Plus you get the traditional deductions like your mortgage interest, your points, if you pay points, and your real estate taxes.

(END OF VIDEO CLIP) WILLIS: All right. So let's drill down just a little bit here. As mentioned, there is the $8,000 first-time homebuyer tax credit. You can claim the credit on your '08 or '09 tax return if you buy a house this year before December 1st, 2009. Now there are income limitations here. The credit phases out for joint filers with incomes more than $150,000 and single filers with income above $75,000.

OK. Let's say you already own the home but you don't itemize on your taxes. Guess what? You get a tax credit of up to 500 bucks for individuals, a thousand dollars for married couples filing jointly. In the past you got nothing unless you itemized.

Also there's a second chance at the stimulus payment. If you did receive your full economic stimulus payment last year, remember those 600 bucks for singles, 1,200 for married couples? If you didn't get that you may qualify for the remainder as a tax credit on your '08 returns. This could happen if your financial situation changed, say you lost a job, perhaps you had a baby or adopted a child last year. You could be in the money also. Flood victims can file later, victims of severe flooding in Minnesota and North Dakota have an extra 30 days to file until May 15th for those 2008 individual tax returns and pay any taxes due. A little window for those folks, a little break. Heidi?

COLLINS: OK, good for them. What do we have to look forward to then next year?

WILLIS: Lots of the benefits from the president's plans happen next year not this year. The energy-efficient home improvement tax credit will cover up to 30 percent of the cost of products installed this year. If you're planning improvements this year, you'll get the tax credit next year for siding, windows, doors. You can get up to $1,500. It's a lot of money and it's not a deduction it's a credit, it's a dollar-for-dollar reduction in your taxes. Also if you are getting unemployment this year, next year, you'll be able to write off 2,400 bucks of that.

If you have tax questions, please send them us at gerri@cnn.com. Love to hear from you. We're getting lots of tax questions and I want to know what you need to know.

COLLINS: OK, very good. Our personal finance editor, Gerri Willis. Thank you, Gerri.

WILLIS: My pleasure.

COLLINS: Tax deductions can bring in big returns, but there are some people out there who look for ways to cheat the system. There always are. We are exposing some of their scams, though, during the next half hour, so stick around for that.

North Korea pulling out of six-party nuclear talks. A defiant move after the U.N. Security Council made a statement demanding no more rocket launches from North Korea. The country sent one up as you know more than a week ago ignoring international pressure. The U.S. has been involved in six-party talks to end North Korea's nuclear program but the country is now promising to make its nuclear capabilities stronger.

A quieter day in Bangkok after violent clashes between protesters and riot police. A strong military offensive is forcing protesters to back off after weeks of demonstrations. Protesters believe the prime minister wasn't fairly elected and want him to step down. Some of their leaders turned themselves in others promised to regroup. Yesterday, more than 120 people were hurt when the protests turned violent.

A bit closer to home, Haiti is the poorest country in the Americas, and today, Secretary of State Hillary Clinton is looking for ways to help. She is attending a donors' conference for Haiti in Washington. And on Thursday, she's flying down there to meet with Haiti's president. Clinton is set to announce $50 million in aid for that country.

The Obama administration may go a step further than easing travel restrictions for just Cuban Americans. If so, Americans could be lining up for visas. But can Cuba handle the huge onslaught of American tourists? CNN's Havana bureau chief Morgan Neill checks it out.

(BEGIN VIDEOTAPE)

MORGAN NEILL, CNN HAVANA BUREAU CHIEF (voice-over): Not as if there's no tourism in Cuba. Every day buses ferry thousands of tourists between old Havana and the beaches of Varadero, with most coming from Canada and Europe like Alan Sainsbury.

ALAN SAINSBURY, TOURIST: The hotel areas they developed in some areas and the islands which are very good.

NEILL: Last year was a record year with more than 2.3 million tourists visiting. And now U.S. President Barack Obama is allowing Cuban Americans to visit whenever they want. But what if congress goes further and completely lifts the ban on Americans traveling to Cuba?

(on camera): Here in old Havana's colonial plaza, the flow of tourists is essentially never-ending but some experts say if Americans are allowed to come here, the number of visitors per year could more than double. Most of the people we've talked to say Cuba is not ready for that.

UNIDENTIFIED FEMALE: (INAUDIBLE) all-inclusive hotel, and it was four-star. Horrible.

SAINSBURY: Cuba is not ready for mass tourism. But you still have problems of servicing. Staff are not particularly friendly. Not smiling.

NEILL: John from Ontario says he's had a great time and he thinks Cuba would have no problem absorbing American tourists.

UNIDENTIFIED MALE: Its number one industry is tourism so, yes, they would adapt. Amazing people. Very adaptable. NEILL: When directly asked if Cuba had prepared for the possibility of a flood of American tourists, Cuba's vice minister of tourism was noncommittal.

MARIA ELENA LOPEZ, CUBAN VICE MINISTER OF TOURISM: We prepare ourselves for international tourism, she said. And, well, that's coming, we'll see.

NEILL: At just 90 miles away, the United States is easily the largest and closest potential source of tourists for Cuba and after nearly 50 years of economic embargo, most Americans have never set foot on these forbidden shores. Morgan Neill, CNN, Havana.

(END OF VIDEOTAPE)

COLLINS: Former Cuban President Fidel Castro applauded the moves being made by the Obama administration to renew old ties. Here is what he had to say about the change in the travel rules: "With these measures aimed at closing the gap between divided Cuban families and promoting the free flow of information and humanitarian assistance to the Cuban people, President Obama was making an effort to fulfill the objectives he set out during his campaign and after taking on his position."

Next hour, another view from inside Cuba. We'll talk about the lifting of those travel sanctions and a Cuba emerging from the shadow of Fidel Castro.

A little girl goes missing and the search ends in heartbreak. Today, a gruesome new twist in the case of Sandra Cantu and the Sunday school teacher who is accused of murdering her.

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COLLINS: Time now for headlines from the Hill. A three-judge panel says Al Franken should finally be declared the winner of Minnesota's Senate race. The Democrat leads Republican Norm Coleman on the right there by 312 votes but Coleman's camp has been arguing over absentee ballots. Coleman does have 10 days to appeal yesterday's ruling to the state supreme court.

They call it the pig book. But it's got nothing to do with the big bad wolf. Coming out next hour, it's the annual release by Citizens against Government Waste. It's a list of congressmen whom the group calls the worst offenders in pork projects. Last year the group said it counted $17.2 billion in projects like that.

CNN is giving you the real deal on your taxes. The deadline for filing is just a day away but the IRS is warning there are people out there looking to exploit the system or you for money. Our Josh Levs takes a look at the IRS's so-called list of dirty dozen scams and breaks them down, starting with something called, we know about this, phishing.

JOSH LEVS, CNN CORRESPONDENT: Phishing, yes. You've heard about this before, this kind of thing. What happened is Heidi, yesterday, they put out this list saying, hey, there are these big dozen scams to watch out for.

But number one on their list is the thing called phishing that is happening to you on the Internet. Let's go straight to a graphic because anyone who hasn't heard the term, I want you to understand what to watch out for here. People are sending these false e-mails that trick you into releasing personal information. These emails look like they're from the IRS. And I have two right here. I want you to see these because if you get anything like this do not fall for it.

It looks like it's coming from the Internal Revenue Service, it says that right there in the address line, it even says irs.gov. When you scroll down it starts to say hey, we've discovered you actually get a little bit more money just click here and you're going to submit some information. If you do that, the people who set up this fake e- mail get your personal info.

Same with this one, watch out for this one. The IRS says they've been seeing a lot of people receive this one right here. Again, it looks like it's from the IRS at the top and you can see what they've circled in red. It says down here, basically, we've found funds for you, you can unblock them by clicking a link. If you do that at any point you're going to be giving personal information to the bad guys out there who are creating this.

Now, how do you know if it's from the IRS or not? Next graphic, really easy. It won't be from the IRS because the IRS doesn't send any ever! The IRS does not send any unsolicited e-mails about this. You knew that, Heidi, obviously not everybody does so some people are falling for this unfortunately.

COLLINS: Yeah, that's OK though, good reminders. What about some of these other scams that are out there regarding your taxes?

LEVS: Yeah. You know it's interesting. Most of the ones on the dozen are actually things that they don't want you to scam them with. They're saying don't cheat on your taxes, don't fake anything. But last graphic here. I'm going to show you a few examples that they pointed to that were interesting. They say some people are hiding income offshore, filing false forms, abusing deductions.

But the last one here is something that could happen to you. They are saying there are these people out there, professional tax preparers who may cheat on your behalf, steal a portion of that refund and then sell themselves as great tax preparers because they say, you know what? I get everybody big refunds. Whereas in fact, they may be cheating on your behalf. It's ultimately your legal responsibility. Don't fall for that.

COLLINS: Yeah. No. If it sounds too good to be true, it is!

LEVS: That's the rule of thumb. And we just all have to internalize that. And more details at CNNmoney.com, can't miss it.

COLLINS: Excellent. All right Josh, thanks for that, appreciate it.

LEVS: Thanks, Heidi.

(WEATHER REPORT)

COLLINS: Smashing small cars for safety. New crash tests put them to the test hitting head-on with bigger cars. See if they survived.

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COLLINS: There's a gruesome new twist in the murder of an 8- year-old California girl. You may remember Sandra Cantu. More than a week after she disappeared, her body was found stuffed in a suitcase and submerged in a nearby pond. A neighbor in Sandra's mobile home park has been charged with her kidnapping and murder. Today at her scheduled arraignment, Melissa Huckaby will also face additional charges, including rape.

(BEGIN VIDEO CLIP)

SGT. TONY SHENEMAN, TRACY, CALIFORNIA POLICE: Inconsistent statements that she had made over the course of being spoken to during the initial canvass when we were looking for Sandra. And then later on, when she was interviewed prior to her interview with the "Tracy Press." And then again, when she was interviewed by the "Tracy Press," all of her statements were fairly inconsistent.

(END OF VIDEO CLIP)

COLLINS: Police say Huckaby's daughter was close friends with Sandra Cantu and the two played together frequently. Police say they have been baffled by a possible motive.

A jury has come back with a guilty verdict for Phil Spector. The legendary record producer was charged with second-degree murder in the death of former actress Lana Clarkston. She was found dead in Spector's home back in 2003. The first murder trial in 2007 ended in a mistrial. The 69-year-old Spector will be sentenced in late May. His attorneys plan to appeal.

Well, there is a lot going on this morning. And CNN crews are scrambling to bring you all of the latest. Let's begin this morning with Suzanne Malveaux at the White House.

MALVEAUX: Heidi, I'll have more details about the president's update, a progress report on the economy at the top of the hour.

LISOVICZ: I'm Susan Lisovicz at the New York Stock Exchange, we'll also be talking about the economy and where for the second time in one week, a big bank is talking about big profits. Yes, the stock market is tanking. I'll tell you why in the next hour. Heidi?

ROB MARCIANO, CNN METEOROLOGIST: And I'm Rob Marciano in the CNN severe weather center. For the second day in a row, the southeast under the gun for rough weather. Right now, there are tornado warnings out in and around the Orlando area. And a tornado spotted earlier this morning just north and east of Tampa. We'll run down the severe weather threat and where it's heading at the top of the hour.

COLLINS: All right, very good guys, thanks so much. We'll also look at what's being billed as a tax day tea party. And a hint, it's not only in Boston.

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COLLINS: Fuel efficiency versus brute force. A new type of crash test is now putting those so-called mini cars in the spotlight, smashing them head-on with midsized rides from the same manufacturer. CNN's Samantha Hayes takes a look now at how the little cars did.

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SAMANTHA HAYES, CNN CORRESPONDENT (voice-over): They may cause envy at the gas pump, or in those oh-so-small parking spaces. But check out what happens in a head-to-head crash between mini and micro cars against midsized cars.

RUSS RADER, INSURANCE INST. FOR HIGHWAY SAFETY: We crashed a Toyota Camry into a Toyota Yaris, a Honda Fit into a Honda Accord. And the smart car into a Mercedes C-class. And the results boil down to the laws of physics.

HAYES: The Insurance Institute of Highway Safety says colliding at 40 miles per hour, the mid-sized vehicles maintained a high level of protection. While the mini and micro cars all earned poor ratings.

RADER: The results of the car-to-car tests showed that there would be serious, even fatal injuries for a real-world driver in a crash like this.

HAYES: All three car makers objected. Toyota Motors says the speed of the crash tests was greater than 99.9 percent of real-world crashes. Honda calls the tests, unusual and extreme. And so does the president of Smart USA.

DAVE SCHEMBRI, PRESIDENT OF SMART USA: It's one thing, to test in parameters in a lab, in which all things are equal. And it's quite a different thing when you go out on to the highways where nothing is ever equal. That's where we think the safety systems take hold.

HAYES (on camera): The smallest of the small cars, the Smart 42 have been on the road for several years now. And the manufacturer objects to these recent crash tests. Saying that they don't take into consideration new technology.

(voice-over): But when it comes to collisions with other vehicles, in this case mid-sized cars, the IIHS says it's better to be big, and you can still save on gas.

RADER: We have ways to make vehicles get better fuel economy without downsizing and down weighting and forcing people into very small cars where the risks in crashes are higher.

HAYES: It's a debate unlikely to go away any time soon. Samantha Hayes, CNN, Washington.

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