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President Obama Orders $100 Million in Cuts; New Indication Economy is Improving; Hurricane Katrina Lawsuit

Aired April 20, 2009 - 11:59   ET

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

TONY HARRIS, CNN CORRESPONDENT: President Obama focuses on saving your tax dollars. He is challenging his Cabinet members to slash $100 million from their budgets over the next 90 days. That challenge coming as the president holds his first formal Cabinet meeting at the White House.

Let's go there live now to our Elaine Quijano. And Elaine, this cost-cutting at the top of the agenda, how do we think this will actually go over?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, you know, I can tell you, obviously this is all about President Obama trying to demonstrate, Tony, that he is serious about cutting back on government spending. But already, critics are saying, look, this $100 million is really just a drop in the bucket, if you will, because especially when you consider the fact that President Obama's 2010 budget is $3.5 trillion. That's trillion with a "t."

Now, there is outrage, as you know, already because of the spending issue. We saw those "Tea Party" protests last week. Critics say that the president is basically putting a crushing financial burden on future generations. Republican Senator Mitch McConnell, in fact, today said in a statement that, "Even as the president is looking for millions of dollars in savings, that his budget is calling for adding trillions to the debt over time."

And Tony, we're trying to crunch the numbers here for you, but just to kind of put this in perspective, $100 million is clearly less than one percent of that $3.5 trillion figure -- Tony.

HARRIS: Yes, it's low hanging fruit. Let's knock that off first, many might suggest.

And later today, Elaine, the president's heading to CIA headquarters for the first time since taking office. What can you tell us about that?

QUIJANO: Yes. You know, President Obama is going to be meeting privately with top CIA officials, including the current CIA director, Leon Panetta.

He's then going to be making some public comments before CIA employees. But you know, he's going over there at a very sensitive time, of course, in the midst of this uproar, really, over the fact that the president decided last week to release those secret interrogation memos that talked about waterboarding and other interrogation techniques. Critics argue that that release of those documents undermines the CIA's work because it basically tells al Qaeda what line the United States is not willing to cross.

Now, the White House says, look, this information was already out there, it was already public. Rahm Emanuel, the White House chief of staff, also says that, look, by the U.S. taking a step back and repudiating some of these techniques, that that actually will help make the U.S. safer, the White House argues, because it will basically boost, in the White House's opinion, its credibility and its moral standing around the world -- Tony.

HARRIS: Well, Elaine, just let me know if you need to elbow whoever that is with a mega phone next to you. What is going on in the briefing room today? It's insane.

QUIJANO: We're shoulder to shoulder. It's a busy time here. Our colleagues here, we're all playing nicely. It's just a little loud.

HARRIS: You are so kind. You are spoiled (ph).

All right, Elaine. Good to see you. Thank you.

New indications today the pace of the economic free-fall is slowing. For one thing, another bailed-out mega bank has turned a profit.

CNN Personal Finance Editor Gerri Willis joining us now from New York.

And Gerri, let's talk about -- because there's a couple of things I want to discuss with you, but let's talk about the profits, first of all, from Bank of America.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Yes. And Bank of America, as you know, Tony, this is the biggest bank in America by asset. So this is an important story.

The company, its first quarter, earned $2.4 billion. Now, consider this -- in Wall street lingo, the expectation is that the company would earn some five cents a share. They blew it away at 44 cents a share.

What was going on here? Well, a couple of things to know about.

The company added Merrill Lynch, bought Merrill Lynch last fall. We're starting to see that in earnings now. That's a very big help. And also, the mortgage business on fire.

As you know, interest rates at lows. We talk about this all the time. So that's an important change as well.

Now, I just want you to understand though how big a move this is.

HARRIS: Yes. WILLIS: I said up $4.2 billion. In the previous quarter, it was down $1.79 billion, the profit for the previous quarter. So that's a very big turn.

But I've got to tell you, Tony, it's not all flowers and roses here. The company said credit quality continues to deteriorate as housing prices fall and the economy continues to weaken.

So what did they do? They increased their loan loss provisions from $8.5 billion to $13.3 billion.

What does that mean? Well, they're just setting more money aside to cover any losses from loans. And you know what we've seen with mortgage loans out there. It's been a problem.

HARRIS: That's right. That's right.

WILLIS: What they're saying is that that part is not over yet. But I have some work numbers for you.

HARRIS: OK.

WILLIS: Have some Bank of America numbers which look good. Also a new report, a new business survey taking a look at some 109 businesses out there.

HARRIS: Is this the NABE survey?

WILLIS: Yes.

HARRIS: Yes.

WILLIS: They're showing that the recession may be abating...

HARRIS: Nice. Nice.

WILLIS: ... which is very good news. And we're starting to see the demand for products out there increasing. And I think that's interesting. Increased to 27 percent in the first quarter from an all-time low of 20 percent in January. The number of firms that increased capital spending last quarter rose to 15 percent from 12 percent.

What does that mean? Well, capital spending, that means just reinvesting in their own business; right? Maybe they're buying some systems, reinvesting what they already have, maybe expanding a little bit.

Of course, what you and I care a lot about are jobs; right? What are the plans for jobs, for adding people to the roster?

Thirty-three percent of companies in this survey plan to cut jobs over the next six months, 39 percent already reduced their payrolls in the first quarter. But look at these glimmers.

Sixteen percent plan to hire more workers. Fourteen percent already did in the first quarter. And six percent of firms expect to raise capital spending by more than 10 percent over the next 12 months.

In January, nobody could say that. So we're starting to see some spending. You've got to have a little spending out there by companies to start to get that economy moving, ultimately. That's one of the first things that happens. And then, months later, quarters later, then comes the hiring.

HARRIS: Yes.

WILLIS: You know, in broad perspective, that's the way a recovery would certainly happen. So we're starting to see these glimmers out there, Tony. And we'll keep watching them for you.

HARRIS: Well, Gerri, are we doing a good job of sort of balancing all of this out? We've got the glimmers of hope, the green shoots.

WILLIS: Green shoots.

HARRIS: Yes. And are we doing a good job of balancing that news off against the remaining challenges? Because I keep telling you, I'm hit all the time for more good news, if it's there to be reported. But are we doing a decent job of finding the balance?

WILLIS: I think we are because, you know, we're reporting the positives. We're also telling you the risks that continue to be out there as housing prices continue to come down a little bit. Still got to work to protect that job because you don't know what's going to happen there. But, you know, for people out there who are worried, rest assured there are some small steps to be taken right now.

HARRIS: Nice. Just want to keep us honest on this.

All right, Gerri. Appreciate it. Thank you.

WILLIS: My pleasure.

HARRIS: Wall Street is coming off of six straight weekly gains, but Bank of America's earnings report is slamming the breaks on that rally. Why?

(BUSINESS REPORT)

HARRIS: Is the Army Corps of Engineers liable for the catastrophic flooding of New Orleans after Hurricane katrina? After years of legal maneuvering, a four-week trial to answer that question begins today.

Joining me now, CNN's Sean Callebs here at CNN headquarters in Atlanta.

And Sean, first of all, good to see you.

I understand billions of dollars are at stake here. SEAN CALLEBS, CNN CORRESPONDENT: Yes. And what's interesting, Tony, is -- I've been down there the past three years, being able to kind of put this in perspective -- there have been a number of lawsuits, and they've all been tossed out because of a 1928 act called the Flood Recovery Act, basically saying you cannot sue the federal government if the government is trying to protect you from floods, no matter how bad the damage is. And people, boy, in New Orleans, we all remember this.

This is probably the Lower Ninth Ward, an area, you know, that just got inundated. Well, a lot of homes, families here sued. They basically got nowhere. OK?

Well, things are going to be a little bit different now because, really, what's at focus here is this little area out here. It's called the Mississippi River Gulf Outlet. And this is an area that has nothing to do with flood protection. And that is really the whole focus of this lawsuit.

Basically, what the five defendants say is, look, this was carved through about 60 mile of pristine wetland. This was done for commerce. This was done to allow ships to come back up through this area and come through the area in a lot smoother fashion.

Well, ,you know what? They simply didn't use it. It has been a disaster.

And what it really allowed -- this really gives you a great picture of it. This storm, when the counterclockwise winds came blowing from Katrina, it blew all the water from the Gulf of Mexico up here into the Lower Ninth Ward, St. Bernard Parish. This area simply got absolutely hammered.

And we all remember, too, that instantly, once -- here's the 17th Street Canal, the Industrial Canal, and when this area flooded, it brought in water from Lake Pontchartrain. And we all know that New Orleans is like a bowl. So it basically brought the level of the lake up to the city.

That's what caused all that flooding. But this, the defendants claim, is something entirely different. And so that's the whole basis of this lawsuit.

Only five people are listed as defendants. However, all these people in this area who lost homes, who lost so much, who lost loved ones, they all have a stake in this.

So this could be tens of millions of dollars. This thing is going to be big. It's going to be an important four weeks.

HARRIS: And you'll be watching it for us. Sean, appreciate it. Thank you.

You know, they jeered, protested and walked out. Wait until you see the pictures. What caused a chilling reception at the United Nations' anti-racism summit? (COMMERCIAL BREAK)

(WEATHER REPORT)

HARRIS: Here in Atlanta, some big-name companies are trying to clean up the environment by reducing the amount of trash they send to landfills. The ultimate goal is to create a city with no waste.

As part of Earth Week, photojournalist William Walker takes a look at what's being done.

All right. We'll work out the sound issues and get back to you on that report.

If you'd like to follow efforts to eliminate waste, you can visit our "Impact Your World" page. That's at CNN.com/impact.

A U.S. journalist convicted of spying in Iran. President Obama speaks up and Iran urges him to pipe down.

(COMMERCIAL BREAK)

HARRIS: Got to tell you, something of a circus atmosphere at today's U.N. conference on racism in Geneva. Take a look at this. Dozens of diplomats walked out during a speech by Iranian President Mahmoud Ahmadinejad. They left when Ahmadinejad accused Israel of racism and genocide.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You're a racist!

(END VIDEO CLIP)

HARRIS: So there you go. Protesters, in some cases wearing clown wigs, also jeered Iran's leader. They shouted "Shame! Shame!" and threw objects at the podium.

Israel recalled its ambassador to Switzerland today after he hosted a meeting with the Iranian president.

New violence in Iraq. A suicide bomber today killed at least three Iraqi policemen. Many others are wounded, including eight U.S. troops. The attack happened outside the mayor's office in Baquba just before a joint U.S./Iraqi foot patrol went into the building. Officials say the bomber was wearing an Iraqi security forces uniform.

A U.S. journalist is convicted of spying in Iran. President Obama calls for her release. Iran calls for his silence.

We bet details from CNN's Kate Bolduan.

(BEGIN VIDEOTAPE)

KATE BOLDUAN, CNN CORRESPONDENT (voice-over): Wrapping up a trip centered on the U.S. and its regional neighbors, President Obama turned his focus a world away, saying he's gravely concerned for Roxana Saberi's safety and well-being in Iran.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: I have complete confidence that she was not engaging in any sort of espionage. She's an Iranian-American who was interested in the country which her family came from.

BOLDUAN: The 31-year-old journalist's father says he's visited her in prison, says she's very frail and is begging for his daughter's freedom.

REZA SABERI, ROXANA SABERI'S FATHER: She is completely innocent and she should be freed. If there has been any suspicion, if there has been an misunderstanding, we will forgive them.

BOLDUAN: Iranian officials initially said Saberi was detained in January for buying a bottle of wine and later held for reporting without proper press credentials. Then Saturday, Saberi was convicted of espionage, the charge announced on state-run TV.

UNIDENTIFIED MALE (through translator): She collected classified information through some connections she had with the personnel of some of these centers and submitted to the American intelligence agencies.

BOLDUAN: This case is unfolding as at a critical time for U.S./Iranian relations. The Obama administration is working to repair ties with the country leaders, even signaling the possibility of direct diplomatic engagement. It's unclear what political fallout might result from Saberi's case. At least right now, the president and his administration are staying focused first on securing her release.

OBAMA: We are going to be in contact with -- through our Swiss intermediaries -- with the Iranian government, and I want to ensure that we end up seeing a proper disposition of this case.

BOLDUAN (on camera): Saberi's family is appealing the conviction. Iran's state-run news agency reports President Mahmoud Ahmadinejad sent a letter Sunday to the prosecutor saying Saberi should be allowed to offer a full defense in her appeal.

Kate Bolduan, CNN, the White House.

(END VIDEOTAPE)

HARRIS: Stephen Hawking, one of the world's most renowned physicists, is said to be very ill. Hawking, a professor at Cambridge University in England, has suffered from ALS, or Lou Gehrig's Disease, for much of his life. A statement from the university says the 67- year-old scientist was taken to a hospital in London today.

In addition to being a leading physicist, Hawking is also a noted astronomer, mathematician and author.

Still struggling to cope with the Columbine tragedy 10 years later. (BEGIN VIDEO CLIP)

DAWN ANNA, LAUREN TOWNSEND'S MOTHER: I know that people will probably say, it's been 10 years. How can you still be thinking of her every day? Or why are you not over it? Or, what, you still cry?

But you know, yes -- you know you still think of her every day. She's my daughter. You know, I love her.

(END VIDEO CLIP)

HARRIS: Parents of the victims open up about their loss and the immeasurable heartache.

(COMMERCIAL BREAK)

HARRIS: A decade ago, millions of Americans were transfixed by a terrifying scene playing out on television at Columbine High School. Two students armed with guns and bombs entered the school. By the time their shooting rampage ended, 12 students and one teacher at the Littleton, Colorado, school were dead, as well as student gunmen Eric Harris and Dylan Klebold, who committed suicide.

A prayer service was held this morning for victims of the Columbine shootings at a church in Littleton. Parents who lost children in the Columbine tragedy say it's as if time has stood still since that terrible day.

Reporter Adele Arakawa from CNN affiliate KUSA spoke with some of those families.

(BEGIN VIDEOTAPE)

ANNA: I mean, the emotions have been all over the place, but always, Lauren's there. Always.

I know that people will probably say, It's been 10 years. How can you still be thinking of her every day, or why are you not over it or why, or, what, you still cry or -- but, you know, yes, you still think of her every day. She's my daughter. You know, I love her.

Why would you ask me not to love her every day or think of her every day? But I likened it to if I had lost an arm, and if I would get up every day and try to go about my day without the use of an arm. You know, even if I had a prosthetic to strap on, I would still be having to function in a new normal. And I think that's what all of us have learned to do, and that's what all of us go about our lives doing -- always, always thinking of the one that we've lost.

ADELE ARAKAWA, REPORTER, KUSA (voice-over): That's the common thread among the families: When you think of Columbine, don't think of the ugly images. Think of those who died, with sadness but peace.

PHYLLIS VELASQUEZ, KYLE VELASQUEZ'S MOTHER: I want them to think of the names, but not just because they were names of victims. They were so much more than that. They were our loved ones. They were beautiful children, and a wonderful father and teacher. They had so much to offer, and their lives were cut short way too soon. I think that when we reflect back on that, we need to reflect on their lives and what they accomplished to that date, and the gifts that they left us here. Not just their families, but I think they touched the entire world.

ARAKAWA: The Columbine Memorial stands as a symbol of those lives lost. It also stands as a reminder of what's important in life.

AL VALASQUEZ, KYLE VALASQUEZ'S FATHER: I think what I would really like is for people to take this day and to show the love for their kids, just on this date, because it was such a tragedy, you know, to have your child go to school one day and not come back any more. But if it would be a day where they could, you know, spend time with them, set aside their busy day, whatever, but just spend time with their kids and know how lucky you are that you still have your kids.

BRUCE BECK, LAUREN TOWNSEND'S FATHER: The world lost 12 wonderful, you know, growing, expanding souls that were going to make a difference in so many live. That's the most disappointing thing.

DAWN BECK, LAUREN TOWNSEND'S MOTHER: But I will never forget too, coming back down the street after we'd seen Lauren for the first time. And it had been five days. It took us five days to be able to see her. But we came down the street and the flag was at half mast. And I grew up in the military. And the flag at half mast to me meant presidents had passed away. That's what -- when I was growing up, that's what a flag meant flying at half mast. And this is such a personal tragedy and it was such a personal loss.

I saw that flag at half mast and I turned to Vic (ph) and said, oh, my gosh, something horrible's has happened and we've been so wrapped up in our own lives that -- you know, we hadn't read papers. I turned to him and said, what's happened? And he said, Dawn, that's Columbine. I was shocked that it impacted the nation. To me it was our community. It was our house. It was our family. It was our community. And to see the flag that way and to realize it had struck not only our home, but the nation and the world, was just -- I couldn't speak.

ARAKAWA: They will never forget, and they hope you won't either.

P. VALASQUEZ: It's still a very beautiful world. It's still wondrous and a nice journey. And I think that if we can continue that journey with joy and hope, that we will come to the end of our days and look back and say, yes, it was peaceful, it was joyous, and we have hope.

(END VIDEOTAPE)

TONY HARRIS, CNN ANCHOR: Boy, I'm just taking a look at the big board. The New York Stock Exchange, as you can see, a pretty rough day, huh, so far. Three hours into the trading day. The Dow trading down steeply. Just checked out our page at cnnmoney.com and the banner headline there, stocks shifting into reverse. The stock rally hits road block. As you can see, the Dow is down 224 points and the Nasdaq down 57. We will be watching these numbers throughout the day with Susan Lisovicz, of course, for you right here in the CNN NEWSROOM.

You know, electric cars have been getting a lot of attention lately, but there are already electric vehicles on the market today -- motorcycles. Our road warrior cnnmoney.com's Poppy Harlow has our "Energy Fix" from New York.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNNMONEY.COM: Hey there.

Well, of course there are already electric motorcycles on the road. Some companies named Vetrix (ph), Bromo (ph), they have some. But today we're here with the folks from Zero Motorcycles talking to us about these U.S.-made new electric bikes. This off-roading one, this has been on the market for about a year. This one released today is a city version. We're going to bring in the chief technology officer of Zero Motorcycles, Neal Saiki, to talk to us about it.

A lot of question. What's the range? How fast can it go? How much does it cost? All of that?

NEAL SAIKI, CHIEF TECHNOLOGY OFFICER, ZERO MOTORCYCLES: This is our new super motorcycle (ph). One that we're really excited about, this one. It goes about 60 miles -- it goes 60 miles an hour. And it's about $10,000.

HARLOW: And you can charge it. It takes how long to charge? That's the big question.

SAIKI: Four hours to charge. You can plug it into any wall outlet. You can charge it when you ride to work and it will be ready by lunch time.

HARLOW: It's also silent. Let me turn it on for you here because it is absolutely silent. You don't have that typical sound you have with a bike.

Also, I want to show you, these are the lithium ion batteries. They're made in Canada. And they're assembled in California. So it is a U.S.-based company. Some foreign parts, but it is a U.S. company.

A lot of people have a question of, well, these might have been popular when gas was over $4 a gallon, but today in a midst of a deep recession, how hard is it to sell these and gas prices of half of where they were this summer?

SAIKI: Well, you can save a lot of money because it's a penny per mile to operate. So it's a fraction of the cost. And even if you don't want to save money, it's all about energy independence. You know, not relying on foreign oil and cleaning up the environment.

HARLOW: All right, Neal, we appreciate it. I know you're going to show us how it works. Drive it away for us.

SAIKI: Sure.

HARLOW: I don't have my motorcycle license. I can't do that. But one interesting fact that I'll leave you with here. If you were to have driven this with many stops along the way from New York to California or Los Angeles out to New York, it would cost about $30 in electricity. So a lot less than it would cost to drive a car, but you're going to have to stop and charge it many dimes along the way.

Thank you, Neal. Appreciate it.

SAIKI: Thank you.

(END VIDEOTAPE)

HARRIS: Here in Atlanta, some big name companies are trying to clean up the environment by reducing the amount of trash they send to landfills. A live tower cam shot of Atlanta. The ultimate goal here is to create a city with no waste. As part of Earth Week, photo journalist William Walker takes a look at what's being done.

(BEGIN VIDEOTAPE)

HOLLY ELMORE, GREEN FOODSERVICES ALLIANCE: We're in downtown Atlanta, the home of the Zero Waste Zone. The street service industry produces thousands of tons daily of product that goes to the landfills. Zero waste means taking all of the waste that's currently going to landfills and recycling it. We are focusing first on the food service industry.

RANDALL CHILDERS, HYATT REGENCY ATLANTA: We're here at the Hyatt Regency Atlanta in the main kitchen. Our wastes are paper, cardboard, aluminum, tin cans, glass, plastics and food waste. We've always done the basic. But lately we've been looking for ways to capture food waste and our oils.

UNIDENTIFIED MALE: I think there's a better solution towards helping people move to a fully 100 percent recyclable avenue versus just (INAUDIBLE). We are a food waste composting operation. We take food waste, blend it with wood waste and yard waste to make a high quality compost that we sell back to the agricultural market.

UNIDENTIFIED MALE: What are we planting?

UNIDENTIFIED FEMALE: These are San Marizano (ph) peas.

UNIDENTIFIED MALE: The more diversity you have in compost, the more beneficial bugs, bacterial fungi you will attract.

UNIDENTIFIED MALE: We're at our plant now. We're offloading the used cooking oil and we're sending it down into our plant.

ROB DEL BUENO, REFUEL BIODIESEL: This is our finished product. This is actually 100 percent biodiesel. And this is the stuff that can be used directly in a vehicle or blended with petroleum diesel to be used in a vehicle. So this is the finished product.

UNIDENTIFIED MALE: We have a retail pump in Atlanta and it is commercially available.

ELMORE: A realistic goal for the Zero Waste Zone in the near future is for it to expand across the nation. Landfills are going to be used less and less. Potato peelings can then turn into compost that then comes back in the form of food for you.

(END VIDEOTAPE)

HARRIS: How about that, huh? If you'd like to follow efforts to eliminate waste, visit our Impact Your World page. That's at cnn.com/impact.

You know what? Sometimes you actually do, in life, get a second chance to make a first impression. Here is a kid who made the most of it in front of the dreaded Simon Cowell.

(BEGIN VIDEO CLIP)

SIMON COWELL, "AMERICAN IDOL": You've got this really wrong. What do you sing apart from that?

UNIDENTIFIED MALE: "Who's Loving You" by Michael Jackson.

COWELL: You want to give that a go?

UNIDENTIFIED MALE: OK.

(END VIDEO CLIP)

HARRIS: That's what I'm talking about. So this little guy apparently had a false start with his first song on "Britain's Got Talent." Then, as you can see and hear for yourself, made a pretty spectacular comeback. Very nice.

All right. Decades after serving together in Vietnam, two war buddies make good on a promise.

(COMMERCIAL BREAK)

HARRIS: For a minute and enjoy this next story. It was more than 42 years in the making and it brings two Vietnam War buddies and two halves of the same dollar bill together again. Eric Shadiski (ph) of our Seattle affiliate KING has their story.

(BEGIN VIDEOTAPE)

GARY WATSON, VIETNAM VETERAN: What time is it?

UNIDENTIFIED FEMALE: 11:53.

WATSON: He should be getting here any time.

ERIC SHADISKI, CNN CORRESPONDENT (voice-over): A lifetime ago, Gary Watson served in Vietnam. He now scans the Seattle Center for the soldier, just a teenager then, who served by his side. His best buddy.

WATSON: I'm sure I'll probably recognize him when I see him.

SHADISKI: They made a simple promise when they parted.

WATSON: Let's tear this in two and we'll each sign it and when we get back to the states, some day we'll meet up and we'll put the dollar bill back together.

SHADISKI: Time slipped away. But not Gary's or his buddy's half of the dollar.

WATSON: I've had this in a billfold for 42 years and carried it and not spoken to one another for that length of time.

SHADISKI: Gary would marry and have a daughter. A daughter who would eventually move here to Washington state. The same state as Gary's buddy, Ron Bauer (ph).

UNIDENTIFIED FEMALE: And I think within maybe five minutes of us getting on the computer and putting his name in, we had a phone number.

SHADISKI: A phone call that brought them together.

WATSON: I see him. There he is. OK.

SHADISKI: Two American soldiers, separated in Vietnam in 1967, meet for the first time on American soil.

WATSON: How in the world are you? It's been years. Can you imagine that?

RON BAUER, VIETNAM VETERAN: You know, I got it hidden between some pictures to kind of preserved it.

SHADISKI: In seconds, a faded dollar and lost friendship are whole again.

WATSON: You haven't changed in (INAUDIBLE). You still look about like you did back (INAUDIBLE).

SHADISKI: The torn dollar goes back into separate wallets, but Gary and Ron say their friendship won't fade again.

WATSON: Maybe it will inspire somebody else to do it. Because he's a great friend. Always has and always will be.

SHADISKI: And it won't end here. There's one more torn dollar in Gary's wallet. One more lost friend to find.

(END VIDEOTAPE)

HARRIS: Pretty good, huh? Eric Shadiski of our Seattle affiliate KING.

So it is back to work on Capitol Hill after a two-week lull in what has been a very busy year so far. Our senior congressional correspondent, there she is, Dana Bash, joining us from Washington, D.C.

And, Dana, is the pace going to slow a bit on The Hill compared to all of the activity from January to April?

DANA BASH, CNN CORRESPONDENT: Well, certainly all of the work that we really watched in a frenzied kind of way to pass the president's quick fixes on the economy, or at least his attempting -- attempts to fix the economy quickly, that obviously is over. But I'll tell you, right now, the very tough work is just beginning on his centerpiece of what he ran on as a candidate, and that is healthcare and also climate change.

But let's just start with health care. Congressional Democrats, they have a self-imposed deadline. Number one, they want to have legislation, which (ph) is comprehensive healthcare reform, which is a monumental task. They have a deadline to get something at least crafted for the committee by the beginning of June. That's about six weeks from now. And not just that, Tony, they actually -- congressional Democrats in the House and the Senate -- want to pass healthcare reform by the time Congress goes home for recess in August. So that is going to be very tough. It's going to be -- it's going to kick into high gear, again, as we speak.

And lastly, there is work going on, on the other part of the president's agenda, and that is climate change. It's not that kind of quick time line, but certainly it is being worked on at a more rapid pace than we saw before.

HARRIS: Yes. And, Dana, there are also some holes to fill in the administration. One of them, ambassador to Iraq. The president wants Diplomat Chris Hill. But then I also understand some Republican senators are saying, not so fast.

BASH: That's right. There has been some Republican opposition to Chris Hill, primarily because although he's a lifelong diplomat, he doesn't have any experience in the Middle East, much less Iraq. So some Senate Republicans, namely John McCain and Lindsey Graham, they have said that, you know, why are you sending somebody like that to Iraq at a time where you really need somebody who understands the nuances of that region and of that country?

There's another reason why there is some opposition, and that is because of his experience in North Korea. In fact, Chris Hill led the U.S. in the six-party talks on those North Korean nuclear talks. Well, Sam Brownback, the senator from Kansas, he says that Chris Hill didn't do a good enough job. In fact, broke a promise in terms of dealing with human rights issues there. So that's another issue.

Having said all of that, there will be a vote today to try to overcome that opposition. We do believe, from multiple sources on both sides of the aisle, that that test (ph) vote will go through and that Chris Hill, despite that opposition, will probably be the next ambassador to Iraq in the next 24 to 48 hours.

HARRIS: OK. There she is, our senior congressional correspondent, Dana Bash.

Dana, good to see you. Thank you.

BASH: Thank you. You too.

HARRIS: A mystery from the world of polo. Fourteen horses from one team die just before they were to take the field for a match. Now seven more are dead.

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HARRIS: A horrible story here. At least four children dead and a Texas man faces charges of intoxication manslaughter after a terrible car accident. Police in Houston say the man failed a sobriety test after the weekend wreck. They charged Chanton Jenkins after his car veered off the roadway and plunged into a bayou. A fifth charge could be added later. A three year old girl remains missing and is believed to have drowned. Jenkins' brother and one of six children in the car escaped. Boy.

Twenty-one horses that were supposed to play in a championship polo tournament yesterday have suddenly died. Officials suspect possible poisoning. WPEC affiliate reporter Summer Knowles is at the polo club where this happened. It's in Wellington, Florida.

And, boy, where do you want to start with this story? If you would, 21 horses -- what do we know so far?

SUMMER KNOWLES, CNN CORRESPONDENT: Twenty-one horses are dead and that's almost all we know at this point. Right now they do not know exactly what caused these horses to die. Some veterinarians out here are suspecting food contamination, but right now they just don't know.

If you want to go ahead and take a look over here, we'll kind of run through everything.

HARRIS: OK.

KNOWLES: We are at the Palm Beach Equine Clinic. And none of the horses you see out here were affected. But one of the horses that was affected was taken here and was held in a stable very similar to this one until about 2:00 this morning when veterinarians eventually put that horse to sleep. And now that horse's death took the toll to 21. And right now a lot of tests are under way to determine what went wrong. Again, some vets are pointing to food contamination as a possible cause, but they're just not sure.

And all of these horses were a part of one team, called Lechuza Caracas. It all started yesterday afternoon at the U.S. Open Polo Championship and two horses collapsed while being prepped. So they weren't actually competing just yet. And then shortly after that, other horses started showing signs of dizziness and disorientation. So veterinarians immediately went out there to try and treat these horses, but, unfortunately, their efforts were unsuccessful.

HARRIS: Summer, and I'm imagining a full investigation, obviously, would be underway. And have they interviewed all of the team members? My understanding is, well, the team may be from Venezuela, but some of the riders are from Argentina?

KNOWLES: That's exactly correct. The owner is actually from Venezuela and the team members are Argentinean. And, I mean, of course, though, a full out investigation. It's been a tremendous emotional loss, but also a tremendous financial loss as well. I mean 21 horses. We're told each of them are worth or valued at anywhere from $100,000 to $200,000. They were 10 to 11 years old. So they were right in their prime. So, again, a very emotional and costly situation out here.

HARRIS: Boy, for sure.

All right, Summer Knowles for us.

Summer, appreciate it. Thank you.

KNOWLES: No problem.

HARRIS: Well, police say someone is targeting women who posed on Craigslist. Three women have been attacked in Massachusetts and Rhode Island. One of them murdered. CNN national correspondent Jason Carroll is following the investigation.

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JASON CARROLL, CNN CORRESPONDENT (voice-over): The search is on for an Internet predator who uses a popular online classified's website to find his victims.

CHIEF STEPHEN MCCARTNEY, WARWICK, R.I. POLICE: Preliminary investigation suggests that the assailant was responding to an advertisement that was posted by the victim on Craigslist.

CARROLL: Three women have been attacked in the past week and a half. One of which was murdered. Police say this man, captured by a surveillance camera, is their prime suspect. In the latest attack, a 26-year-old exotic dancer was contacted after she placed an ad on Craigslist offering private lap dances. According to Rhode Island police, she met the suspect in a hotel room where she was then tied up and held at gunpoint. The suspect demanded money but was unexpectedly interrupted.

MCCARTNEY: The victim's husband returned to the room and was confronted by the subject at gunpoint. The subject then fled on foot.

CARROLL: Investigators believe this incident is linked to two other similar attacks in Boston. Twenty-six-year-old Julissa Brisman was shot and killed in a boss Marriott last Tuesday, and a 29-year-old woman was robbed at gunpoint four days earlier at another hotel. Police say both victims had been contacted by their attacker after they placed personal ads on Craigslist. Police say the suspect was caught on surveillance tape in the Rhode Island attack, but have yet to release those images.

MCCARTNEY: There are strong similarities here based on the information that we have. You know, particularly the fact that there is an individual that seems to fit the description of the individual in Boston.

CARROLL: Craigslist CEO, Jim Buckmaster, declined a CNN interview request, but released this statement. "There appears to be a psychopath on the loose in the Boston area and we will, of course, do everything in our power to assist law enforcement. We are evaluating this incident to see if there are any additional things we could do to better protect Craigslist users."

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HARRIS: CNN's Jason Carroll reporting.

And CNN NEWSROOM continues right now with Kyra Phillips.