Return to Transcripts main page

CNN Newsroom

Afghanistan/Pakistan Summit in D.C.; Fighting a 'Shared Threat'; Living in Poverty in Afghanistan; Bustle is Back in Mexico City; Q&A With Ali Velshi; Creativity Secret Uncovered With Animoto; New Face, New Life

Aired May 06, 2009 - 10:59   ET

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

HEIDI COLLINS, CNN ANCHOR: Quickly, right now, we want to go ahead and get to Secretary of State Hillary Clinton at the State Department. We've been telling you about these meetings that she's been having with the leaders of Pakistan and Afghanistan. So, here you go.

(JOINED IN PROGRESS)

HILLARY CLINTON, U.S. SECRETARY OF STATE: ... our relationship. I was very moved when President Karzai came to Fort Drum in far upstate New York on one of his early trips to the United States to thank the men and women of the 10th Mountain Division, the most deployed division in the U.S. Army, for their service in Afghanistan during the war that has gone on.

So, it's going to be a great privilege and pleasure for me to work on behalf of our common cause. Now, presidents we have with us, a number of members of President Obama's cabinet and high-ranking officials in departments in the United States government. We will be hearing from them during the course of the morning, but let me introduce Ambassador Patterson, whom you know, the ambassador to Pakistan; Director Mueller, the leader of the FBI; of course you've met Director Panetta of the CIA, and Special Representative Holbrooke.

Secretary Vilsack may be a new face to you. He is the secretary of Agriculture. And it is an area that we intend to work on with each of you. We think that there are great opportunities to assist the farmers of both Pakistan and Afghanistan.

I was very pleased to learn, Secretary Vilsack, that one of the early decisions President Zardari made is paying off because they're back to being self-sufficient in wheat, maybe even selling some to their neighbors in the future. So we have a lot that we can bring to the table to work with you.

Jack Lew is the deputy secretary for resources and management in this department. He has been to both of your countries recently, and is working with your finance ministers and others on very specific planning.

Next is acting administrator of USAID, Alonzo Fulgham. And, of course, Michele Fournoy, who is undersecretary for planning policy, who is a very experienced expert in defense matters.

And then, of course, you all know General Petraeus.

Now, the presence of this distinguished group of U.S. officials from different federal agencies reflects President Obama's and my strong belief that promoting peace and stability in Afghanistan and Pakistan must be an all government effort. This is not just the State Department's responsibility or the Defense Department's, but it is all of us working together. And based on the delegations that are here, I think both the presidents agree with that, as well.

We have made this common cause because we face a common threat, and we have a common task and a common challenge. We know that each of your countries is struggling with the extremists who would destabilize and undermine democracy.

An ancient Afghan proverb says, "Patience is bitter, but its fruit is sweet." We know that this consultation is part of a continuing process.

It began with our first trilateral. It continued with the international conference in The Hague with the Tokyo Donors Conference. And now we are once again meeting here in Washington. Through these ongoing consultations, we believe we can strengthen our partnership and our cooperation.

Now, we are not perfect. Now human being is. We will make mistakes, but we need to have the kind of open dialogue where we express our concerns about those mistakes.

I'm very grateful for the excellent relationships I have with Minister Koreshi and Minister Spanta, and we want to create those relationships throughout our government so that we learn from each other, we listen to each other and then we do better, do better tomorrow.

On that note, I wish to express my personal regret and certainly the sympathy of our administration on the loss of civilian life in Afghanistan. We deeply regret it.

We don't know all of the circumstances or causes. And there will be a joint investigation by your government and ours. But any loss of life, any loss of innocent life is particularly painful.

And I want to convey to the people of both Afghanistan and Pakistan that, you know, we will work very hard with your governments and with your leaders to avoid the loss of innocent civilian life. And we deeply, deeply regret that loss.

We are working with Congress to provide additional support to augment security in both countries. We are deploying additional U.S. soldiers and military trainers to Afghanistan. But we know that success will not come from military means alone, that what we must do and what both Secretary Gates and I emphasized in congressional testimony, is the importance of diplomacy and development aid. And we reiterated our support for Congress' efforts to triple non-military spending for these democratically-elected governments. We believe you earned it and deserved to have that level of support. We will be increasing our civilian presence in cooperation with the ministries that are present here and other elements of both governments. And today's discussions will center on concrete initiatives.

I like to know specifically what we're going to try to do together. I like us to reach agreement on that, and then to specify the steps we will take together to achieve our common goals.

I think that helps to eliminate the confusion that comes with distance and misunderstanding, so we will start today to create the kind of work plans that will guide our efforts together. And we'll be talking today about the concrete initiatives to expand economic opportunities and trade; to bolster the agricultural sector as an essential source of revenue and jobs in both Afghanistan and Pakistan; to help build up the industrial sector in Pakistan again, so it is creating more jobs and opportunities for people; and to improve our joint cooperation on security.

I will also reinforce, as I have on many occasions, that this is not just me speaking, but this is the American government speaking. That we do not believe either Afghanistan or Pakistan can achieve lasting progress without the full participation of all of your citizens, including women and girls. The rights of women must be respected and protected.

This is a time for, as we say, all hands on deck. The entire population, the talents of everyone must be engaged.

I'm pleased to announce that Afghanistan and Pakistan have reached an important milestone in their efforts to generate foreign investment and stronger economic growth and trade opportunities. Before President Karzai and President Zardari meet with President Obama this morning, the two ministers, Minister Koreshi and Minister Spanta, will sign an memorandum of understanding, committing their countries to a trade agreement by the end of the year, which we believe will have great economic benefits for both people.

This is an historic event. This agreement has been under discussion for 43 years without resolution. But when I think about Afghanistan and Pakistan, and I look at the map of the world and see how strategically located both countries are, this is an agreement that will bring prosperity to both countries along the trade route and beyond.

Nothing opens up an area to economic development better than a good road with good transit rules, and an ability to transport goods and people effectively. So we think this will be enormously beneficial. And I congratulate both countries.

It will also help us bring more foreign direct investment into both countries, because that's always the first question, how do we get our goods to market? How do we get them to another economy in another country? This is a very concrete and positive step.

So we are encouraged by the progress that this agreement and this second trilateral meeting represent. And we see it as a harbinger for the productive consultations we anticipate over the next two days.

I would now like to introduce President Karzai to deliver brief remarks. He will be followed by President Zardari, to also deliver remarks -- President Karzai.

HAMID KARZAI, PRESIDENT OF AFGHANISTAN: Thank you very much.

Thank you very much, Madame Secretary.

It's a pleasure for us. And I can speak on behalf of both Afghanistan and Pakistan at this point to thank you and the president for giving us this unique opportunity of presence here in the United States to discuss the issues of terrorism and of combating terrorism, and stability and peace both in Afghanistan and Pakistan and, by consequence, in the region and beyond. This initiative, I'm certain, through the implementation of the strategy outlined earlier by President Obama, will bring us the needed relief towards better, more peaceful life in both of our countries.

Madame Secretary, thank you very much for showing concern and regrets for the civilian casualties that are caused, especially for the one that was caused yesterday. We appreciate that and we hope we can work together towards reducing and eventually completely removing the possibilities of civilian casualties as we move ahead in our war against terrorism or in our struggle against terrorism.

Madame Secretary, Afghanistan would like to assure the United States, its most valued strategic ally, and Pakistan, its neighbor, brother, friend, what I described yesterday is exactly true -- Pakistan and Afghanistan are conjoined twins. Our suffering is shared, our joys are always shared, the life that we live is affected by the opportunities that we have and the lack of opportunities that occurs because of the circumstances in which we live today.

Madame Secretary, I will be very brief in my remarks.

At this point, I would suffice that occasions like today Afghanistan will use to the best of its possibility and ability to deliver to the effectiveness of what we're doing together for stability and to do the right thing with regard to relations with Pakistan in bringing more confidence, more trust, and a working environment in which the two countries together can wage a more effective struggle against the menace of terrorism and the violence that radicalism causes both in Pakistan and in Afghanistan, and the danger that they pose to you in America and the rest of the world. I would request our brothers and sisters in Pakistan to count on us in the best possible manner that Afghanistan will go along in order to eventually provide a life of peace and prosperity to both countries. Now, as we move ahead, there will be areas of practical work and cooperation into Afghanistan will contribute.

Madame Secretary, do have full confidence in us as the two countries sit together that we'll be friends with you and colleagues with you, and the journey that we have together will take us where we intend to be. And the right environment, as it is created today, I hope it will continue to respond (ph) and have kept. Thank you.

ASIF ALI ZARDARI, PRESIDENT OF PAKISTAN: Madame Secretary, thank you for having us.

My dear brother, President Karzai, thank you for being here.

And thank you for giving us this opportunity.

Let me begin by thanking President Obama for his vision and, of course, my friend -- my wife's friend, my friend, and the hope for the world, Secretary Clinton, for her leadership in arranging this historic meeting of our three democracies. And today we sit here as three democratic states, conjoined together in the history of democracy, looking forward to working together.

Pakistan faces many challenges. Our democracy is trying to overcome these challenges.

We need the nurturing of democracy of the world, the oldest, most powerful democracy of the world, the extended democracies of the world. We need -- my democracy needs attention and needs nurturing. We thank the United States for its support for democracy, for security in Pakistan, and look forward to further support.

Afghanistan, Pakistan, and the United States are all victims of terror, as is, indeed, the entire world. Our threat is common and our responsibilities should be shared.

I am here to assure you that we should share this burden with you all, for no matter how long it takes and for what it takes, democracies will deliver. My democracy will deliver.

The people of Pakistan stand with the people of the United States and the people of Afghanistan. We stand with our brother Karzai and the people of Afghanistan against this common threat, this menace, which I have called cancer. This is a cancer, it needs to be done away with.

Pakistan carries a huge burden confronting al Qaeda and Taliban together. But we are up to the challenge, because we are the democracy, and democracy is the only cure to this challenge. Just as the United States is making progress after seven years of engagement in Iraq and Afghanistan, we, too, will make progress over time.

Democracy in Pakistan is only seven months old. And during this period, we have performed better than the dictatorships in the previous many years. I look forward to our discussions, especially our meetings with President Obama, with whom the whole world attaches a lot of hope, and especially our coming generations in Pakistan.

I thank the U.S. -- I thank the U.S. Congress for supporting the emergency economic and security assistance of Pakistan. I'm here to assure Americans, partners, that while we will need a high level of support in the days to come, we will also be far more transparent in our actions. Democracy will avenge the death of my wife and the thousands of other Pakistanis and citizens of the world. Pakistani democracy will deliver. The terrorists will be defeated by our joint struggle. And here, me, my friend, President Karzai, and the United States assure the world that we will stand shoulder to shoulder with the world to fight this cancer and this threat.

Thank you.

CLINTON: Thank you very much, Presidents.

And now I am pleased to witness the signing of this memorandum of understanding to commence the transit treaty negotiations.

DON LEMON, CNN ANCHOR: All right. Now you see there the signing of this transit treaty, and you saw the secretary of state, Hillary Rodham Clinton, there saying -- deeply apologizing for the civilian deaths recently in Afghanistan.

We're going to bring in our Suzanne Malveaux to -- who's joining us from the White House.

It's going to be a day of discussion, Suzanne, about Pakistan and about Afghanistan. And as we're witnessing the signing here, Secretary of State Hillary Clinton referenced it, saying that this road that they're building between Pakistan and Afghanistan will open up world trade and will be beneficial to both countries.

A lot of talk about this today, meeting the president a little bit later on.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And Don, it certainly is a good beginning for these leaders. You may recall it was under President Bush, when we covered this back in September 2006.

You had the Afghan leader, Hamid Karzai, with Pakistan's Pervez Musharraf. The two of them having a rather elaborate dinner here at the White House, ended up a lot of pomp and circumstance, but not much that actually came of it afterwards. A lot was made out of it, Don, that the two leaders didn't even shake hands when they were with President Bush, and that the two leaders essentially blaming themselves for the situation in both of their countries.

Now you see these two leaders, relatively new leadership on Pakistan's side, signing this document, obviously, a document of cooperation. This is a good start for them. But clearly, just a start.

We're going to see these two leaders here at the White House later this afternoon. Basically, the same kind of routine that is going to play out, the president meeting with each one of them individually for about 30 minutes or so. And then together, bringing them all together in the same room to discuss what is essential here, and that is really taking on the Taliban.

All three leaders agreeing here that there are sanctuaries now inside of Pakistan where the Taliban has really gained strength. And that is going to be a problem not only for Pakistan and Afghanistan, but certainly for the United States. We have heard President Obama say that this is a security matter when it comes to our own country because those individuals obviously protecting al Qaeda can possibly plot and plan in a very safe way, attacks against the United States -- Don.

LEMON: And Suzanne, stand by. I want to bring in our Stan Grant, who has been covering this. He's in Kabul, Afghanistan, to talk about that.

Stan, let's talk about these air strikes, because the secretary of state mentioned those, as well, apologizing for them. And both men, both presidents, mentioned them, as well, and saying -- let's see President Zardari said that it was a cancer on both countries. That was President Zardari saying there was cancer on both countries, and they're both joined at the hip. President Karzai said that, and both of these men, they said at this point, really want to stamp out terrorism in their country.

STAN GRANT, CNN CORRESPONDENT: Yes, Don. We also heard from Secretary Clinton there, saying that they face a common cause, a common threat, and a common challenge. And one of those challenges is removing the civilian casualties, bringing those numbers down, because any civilian casualties only stirs up more anti-American feeling in both Afghanistan and Pakistan, and undermines the U.S. efforts here.

We're talking about the latest incident now in western Afghanistan, in Farah Province. There's been strong fighting there between the Taliban and U.S. forces.

We heard that U.S. Marines had called in an air strike. Now, there have been varying reports about the number of civilians who have been killed as a result of those air strikes.

The Red Cross is saying they have seen dozens of bodies. We've spoken to the chief of police in the area. He has confirmed there have been civilian casualties, as well.

The U.S. forces are on the ground there now carrying out an investigation. That's a joint investigation with Afghan government, as well. And as we heard from there, Hamid Karzai particularly concerned about that and going to raise his concerns in his discussions with President Obama -- Don.

LEMON: And Stan, I would imagine that these casualties like this make it really much harder for the U.S. to turn back the Taliban.

GRANT: Yes, it certainly does. And in fact, in some ways, it acts as a recruitment for the Taliban, as well, because you're talking about tribal societies here, and they have a code of honor where they need to avenge the deaths of their relatives.

The Taliban then offer the wherewithal, the means to avenge those deaths, often offering money, as well, to tribal people to actually join the Taliban and to carry out the attacks against U.S. forces. In this part of the world, you don't have to be pro-Taliban, necessarily, to be anti-U.S. The two can sit side by side. And that creates two fronts for U.S. forces here in trying not just to quell the Taliban insurgency, but deal with the anti-American feeling.

If we look across the border into Pakistan, as well, we've seen the drone attacks there along the Pakistan/Afghanistan border targeting these militant safe havens. And again, we've seen civilian casualties as a result of those attacks. The Pakistan government has called for those attacks to end in the past because it makes it much more difficult for them, as well, to be able to deal with this militant threat when you have so much anti-American feeling, and that flows through to anti-Afghanistan and Pakistan feeling, as well -- Don.

LEMON: And Suzanne Malveaux at the White House.

Suzanne, this meeting with the president certainly comes at an interesting time when you see the civilian casualties there and the uptick in violence in that region.

MALVEAUX: And one of the things that's happened, Don, very interesting, is that we heard early on from President Obama, outlining this new strategy, saying that Afghanistan and Pakistan really are one in the same when it comes to the problem of extremists and dealing with these extremists. Since then, there has been a strategic review, 60 days or so, and they've come up with a conclusion that is somewhat different than what we heard just months ago. And that is the fact that the focus has now shifted more toward Pakistan, that there is more of an immediate problem when it comes to the insurgents, when it comes to the Taliban inside of Pakistan.

There is a real concern here, Don, at this White House that the Pakistani government, when it clears out some of those areas that the Taliban basically was controlling, that they don't have anything to replace it with. That there is a power vacuum there, and that there's going got to be some sort of way that the Pakistani government creates these civilian structures, whether it's a court system, whether it's schools, whether it's law enforcement, those type of things. That they are not able to do that for their own people now, and that means they are really at a disadvantage when it comes to dealing with these extremists.

So you're going to hear from President Obama later today saying that he definitely supports this democratic government inside of Pakistan, wants to do everything he can to bolster it, because that is the immediate need now, not so much Afghanistan, but now Pakistan -- Don.

LEMON: Suzanne Malveaux at the White House. Stan Grant in Kabul.

Thank you both very much for that.

Let's talk about the humanitarian situation in Afghanistan.

It is dire right now, with millions of people struggling. But there have also been some critical improvement, thanks in part to the efforts of the U.S. military.

Our Josh Levs is here with that.

What do you have for us, Josh? What's the military doing?

JOSH LEVS, CNN CORRESPONDENT: Yes, Don, I'll tell you, this is a good moment to look at that. Obviously, there's security concerns, but one thing we don't hear often are the specifics, including things that are getting better.

Check it out. A picture can sometimes tell a thousand words. This is great.

The UNHCR, the U.N. refugee agency, has a whole slideshow that talks you through some of the conditions in Afghanistan right now. You can learn a lot about it right there.

I have some graphics for you. I want to first paint a broad picture of what it's like in Afghanistan. You can see some of the really rough statistics there -- 70 percent of people living in poverty; 40 percent of children under 3 are underweight; more than 100,000 people in Afghanistan remain displaced, that doesn't include millions who have not yet come back to the country who were living there.

Now I'm going to show you a couple more.

You've got the security that's considered to be deteriorating. And these problems are compounded by what they're dealing with in the weather.

They've had snow, they've had flooding, and that's in addition to the drought. So dire circumstances.

But some things are getting better. Let me show you this last set of facts right here. And this is important stuff. These are key health indicators here.

Twenty-two percent have improved drinking water. Thirty percent of the country, improved sanitation. That's helping people survive. And most children in Afghanistan, Don, are now being immunized against all sorts of illnesses.

And all those activities, everything you're seeing that's improving there, has to do with the refugee agency that's working, the NGOs that are there, and U.S. troops, U.S. Americans who are both military or civilian, who are over there taking part in these activities, helping communities develop these basic needs, like facilities to clean water, helping people survive. There's key improvements there, and that's the important part of the big picture there -- Don.

LEMON: All right. CNN's Josh Levs.

Josh, thank you very much for that.

LEVS: You bet.

LEMON: And coming up in our next hour, what is the proper role the U.S. should take in Afghanistan and Pakistan? Coming up at 12:30, we'll talk with the former finance minister of Afghanistan and the former Pakistani ambassador to the U.K. We'll try to get an answer to that question for you.

Also, tracking severe storms across the Southeast. Our Rob Marciano joins us in a moment with the latest on that.

(COMMERCIAL BREAK)

(WEATHER REPORT)

LEMON: In the meantime, we have some developing news and this is just coming because they've just held a press conference, it's regarding swine flu. The World Health Organization is asking some countries to justify certain swine flu measures. We're working on that to see exactly what came out of this press conference when it comes to swine flu.

Also, we're hearing this from Geneva, Switzerland, this is into CNN. CNN has confirmed the cases of H1N1 now have reached 1,658 - 1,658. That's according to the WHO. The confirmed cases of the virus, also known as H1N1, are across 23 countries. Again, according to this press conference - teleconference, I should say, going on. Mexico has 946 confirmed cases, that's according to the WHO. That is the new information in here about swine flu or H1N1.

Let's go live now to Mexico City where our Karl Penhaul, he is joining us.

Karl, what is the biggest indicator you have seen that Mexico City has turned the corner here as we're getting the new numbers from the WHO?

KARL PENHAUL, CNN INTERNATIONAL CORRESPONDENT: Well, I think if you just look at this scene here, Don, you know there's that lot of people now in the streets, many more than we saw through most of last week. People are heading back into the subway to get to work. And this morning, although Mexico City isn't a city that wakes up early, we have already seen the build-up of traffic and people starting to head back to work.

Now, it is a phased return. So schools aren't back yet, and bars and discotheques won't be open for a while yet either. But already people are in the restaurants for breakfast, they'll be starting to go for lunch any time soon. So just a fact, the volume of people on the street does kind of indicate to us that Mexicans are breathing a bit easier today, Don.

LEMON: Karl, what about the restrictions that remain in place? And how are people reacting to them? (AUDIO GAP) they're coming out now and people are going to want their complete freedom, how they're reacting to the remaining restrictions. PENHAUL: Absolutely. I mean, schools, the secondary schools and universities go back tomorrow, primary schools won't go back until Monday. That again, an attempt by the authorities to phase this return so that you suddenly don't have crowds coming together.

But I think the big sticking point is going to be the bars and the discotheques and the soccer matches of the weekend as well. Soccer here is like a religion and so people are going to find it hard to understand a little bit that why can't they go back to their favorite bar or to their favorite soccer stadium when restaurants, for example, are being open and when schools are being opened.

So the local authorities will have to appeal a little bit to their common sense and to their patience. But even as people have been returning to work this morning, we have seen medics standing on the doors of office buildings, giving alcohol gel for people to clean their hands. And also, taking their temperatures as they are going into the office to make sure none of these returning workers have any of the symptoms of swine flu.

LEMON: CNN's Karl Penhaul in Mexico City. Karl, thank you very much for that.

Again, according to the World Health Organization, the latest numbers from a teleconference, 1,658 cases of confirmed cases of swine flu worldwide, 946 confirmed in Mexico. The latest numbers coming out.

Senior business correspondent Ali Velshi is on the air right now, live on CNN radio and CNN.com live. We'll be talking to him about the bank's stress test in just a few minutes.

(COMMERCIAL BREAK)

LEMON: OK, time now for our chief business correspondent. He is on CNN radio right now answering callers' money questions. Let's drop in on Mr. Ali Velshi.

Ali...

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Don, good to see you.

LEMON: Good to see you, good to hear you as well.

Let's talk about those stress test results. It happens tomorrow. Any thoughts on that? Explain what it means. I just want to make sure that these banks are not in stress, that they're strong.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Right. And if you're one of those people whose doctor is giving you a stress test, literally they make you run and they make you do things so they measure what - yes, what your strength, your endurance, what your heart will do under stressful conditions. And specifically, it's meant to be under stressful conditions. So stress tests are something that should be going on all the time inside a bank. But now the Federal Reserve is basically testing 19 of the country's biggest banks and saying, what would happen if unemployment were to go from 8.5 percent, where it is today, to above 10 percent? And home prices, which have already dropped 20 percent in this recession, would drop another 20 percent? The worst-case scenario as far as they're concerned, how would the banks fair? How much money would they need? And how much money would we have to put in? So that's the concept of the stress test, Don.

LEMON: OK, so let's talk about this turn around on Wall Street then. Because there has been a turn around, especially in March. I mean, everyone's like, whoo-hoo. Just today, a new report suggests that job losses are slowing all of this.

Is this the beginning of the end of a recession? I want to ask you another question about that, because maybe not, but go ahead.

VELSHI: Sure. Well, you've hit on the two important points. One is we've got signs of things being less worse. In fact, some things being a little bit better. We know people are buying homes. We know -- we know the interest rates remain low, but home prices aren't coming up because so many of the homes people are buying are low-interest -- are distressed homes, they're foreclosed homes so the price isn't coming up.

But we do know the stock market, which is a leading indicator, it recovers before other things, has been going up from March 9th. We've got about eight weeks back to back of improvements in the stock market.

But you also mentioned jobs. We got a report this morning, a private sector report that shows things are less worse, and I'm going to use the term less worse. Tomorrow morning, we'll get the weekly unemployment claims, hopefully they'll be less worse.

And on Friday, we'll get the unemployment numbers for March. Unfortunately, we can't expect that to be less worse. The unemployment rate will go up from 8.5 percent and hundreds of thousands of more people will have lost their jobs.

So, yes, there are a lot of people saying the recession ends in 2009, maybe as early as this summer, but that doesn't mean it's like a switch that goes on and all of a sudden everything feels better.

LEMON: Well, the second part of the question is, you touched on it a little bit, you talked about home sales are up. But then I saw a report, I think it was today or yesterday, that 20 percent of people, 20 percent of people who have mortgages, are underwater with their mortgages.

VELSHI: Yes.

LEMON: So, I mean, what gives here? And they're tearing down new homes that people have never lived in.

VELSHI: Yes. Yes.

LEMON: So , what gives? What do you know? How do you know?

VELSHI: Yes, and that's why - remember, construction of new homes was a very, very big employer of people. And while that doesn't go on, that affects construction workers.

But what you're seeing in home - people underwater, remember that if you think of your home as a place that you live and you have a 15 or 20-year or 30-year mortgage, then being underwater may not be a big deal for you. The issue is if you're underwater and can't make your payments, you can't refinance, and you can't sell your home. So that's the bigger issue.

The fact that 20 percent of everybody is underwater is not in and of itself the biggest problem. It's those who are underwater and missing they're payments or whose interest rates have gone up, because they have nowhere to go. If you're sitting in your house and it's underwater, but you don't plan to go anywhere and you can make your payments and you're still employed, fine. That home price will come back over time.

So that's the issue. You're right, it is worrisome, because potentially 20 percent of all homeowners could get themselves into trouble, but it doesn't necessarily mean that they will.

LEMON: All right. On the radio, there he is, our Ali Velshi. We appreciate you smarts.

VELSHI: Tell - folks can call us if they want to ask us the question you've got. Can I give them my number?

LEMON: I guess. Not your personal number again, Ali. Just the one for the radio station.

(LAUGHTER)

VELSHI: yes, no, this one's the CNN number: 877-266-4189. If you want the personal number, you've actually got to call that number first number and pass a test.

LEMON: Yes, you got in trouble last time with that. I won't tell any secrets.

VELSHI: That's right. No, no personal numbers.

It's good to see you, buddy.

LEMON: Thanks. Thank you. Good to see you, Ali.

Ford coming out with a new car. We're going to show it to you next.

(COMMERCIAL BREAK)

LEMON: Well, a bit earlier this hour, Ford announced it will build a battery-powered Focus subcompact for the 2011 model year. The Focus will roll off assembly lines at a plant in Wayne, Michigan that, until last November, built SUVs.

Joining us now from New York is Poppy Harlow with some questions - you might have some questions about what does it mean for the automaker overall.

Poppy, what does it mean for the automaker and for consumers? Electric car may be on the way.

POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Yes, no, it's interesting, Don, we actually already knew that Ford was planning to build an electric car. What we didn't know was where it was going to do it. So some welcome news for the folks in Michigan looking for an increase in terms of production.

So they're going to build it at that plant in Michigan. You saw just a little bit earlier in the hour. Ford says it's investing $550 million to transform what was a former auto plant into an assembly plant.

That plant had been closed on since November. It's a major transformation. That plant used to rollout SUVs like the Ford Expedition, the Lincoln Navigator. Big, big gas guzzlers. They've retooled the plant. It's going to build the new Ford Focus due out last year, very similar to the European model of the Focus. Also, a battery-electric Focus expected, as you said, Don, in 2011.

Ford said they're going to be able to support 3,200 jobs by retooling this plant. But we want to be clear that Ford tells us, this does not mean new jobs, this is all about retaining employees that may have been laid off.

This is one of three north American plants, Don, that is going to be retooled. But very interesting, and I'm sure it is welcome news for the people of Michigan - Don.

LEMON: Yes, for the people of Michigan. But what does this mean, though, Poppy, for Ford overall?

HARLOW: You know, it's a healthy sign, it's a proactive move. Ford is focusing with the Focus - pun intended - on these smaller fuel-efficient cars. The CEO, Alan Mulally, some interesting comments earlier this hour. Talking about how he doesn't accept the notion that you can't build these fuel-efficient cars profitably in the United States. That's been a concern.

We also want to mention that Ford took some proactive moves a few years ago, before the economy turned south. They sold off big brands and they also took out billions in loans when credit was more available. So the company now has about $21 billion of cash on hand versus the bankrupt Chrysler and GM, which is also really struggling. So it allows Ford to make these moves.

Ford has not taken TARP money, but we do want to say here, Michigan and local government has contributed $160 million to the retooling of this plant. And there's also that $25 billion in federal funding, Don, that has been approved by Congress. It's for energy- efficient vehicles. Ford saying they're still actively trying to tap that money - Don.

LEMON: All right, CNNMoney.com's Poppy Harlow. Appreciate it, Poppy.

HARLOW: Sure.

LEMON: Being the producer or a director of a fabulous film is a dream job for sure. Now with the help of the Internet, there's a way you can tap into your inner Spielberg right here at CNN.

(COMMERCIAL BREAK)

LEMON: If you're not a CNN iReporter, you're just not cool, and especially since our iReporters are really getting creative lately. A lot of them are tapping into their inner Spielberg with the help of a secret weapon. Katie Hawkins-Gaar, Katie Hawkins-Gaar, from CNN.com's iReport Desk uncovers the new tool here.

You're not the secret weapon. But I love that name - Katie Hawkins-Gaar. Sounds very upper crust.

KATIE HAWKINS-GAAR, CNN.COM PRODUCER: Oh, thank you, Don.

LEMON: What do you have for us, Katie?

HAWKINS-GAAR: Yes, there's this new program called Animoto. Have you heard of this?

LEMON: I haven't heard it, but I've seen some of it.

HAWKINS-GAAR: It's really cool. With the help of Animoto our iReporters can just unload their photos, pick a song and basically create a music video. And end result is really stunning.

I'd like to show you one from Lulis Leal. She visited the Antelope Canyon in Arizona. And just check it out.

(VIDEO SLIDE SHOW)

HAWKINS-GAAR: So, I don't know about you, I feel calmer looking at those photos and listening to the music. She did a really good job.

LEMON: Yes, she did. It's actually very nice. So this is like a slide show, where it, you know, just sorts of edits it -- does the editing for you, right? You don't have to do that or do you get to pick the transitions and all that?

HAWKINS-GAAR: Right, well - no, the really cool thing about this is that this program automatically based on music you choose will time the photos and do all of those transitions to go exactly with the music. It's really cool.

LEMON: As they say, foolproof, right? Foolproof.

HAWKINS-GAAR: So this is a good example from James Amerson. He's an amateur photographer and he put together some of his photos that have been used on CNN and let's watch a bit.

(VIDEO SLIDE SHOW)

HAWKINS-GAAR: So pretty cool, huh?

LEMON: It's cool, yes. It is cool. I'm just wondering, are we going to use that on the air?

HAWKINS-GAAR: I think we should. I think it's fantastic.

And it's really fun to play with. The iReport team has been making their own Animoto videos. You should try it too, Don.

LEMON: iReporters are now iEditors.

HAWKINS-GAAR: Yes.

LEMON: Wow, interesting. All right, Katie Hawkins-Gaar, thank you.

HAWKINS-GAAR: Thank you.

LEMON: Appreciate it.

America's first face transplant patient stepping in front of the cameras. We'll get the amazing story behind her surgery and see what she'll eventually look like in just moments.

(COMMERCIAL BREAK)

LEMON: A face in progress. The recipient of the most extensive facial transplant ever steps forward. And our chief medical correspondent, Dr. Sanjay Gupta takes us through this incredible procedure.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Don, I'll tell you, I've really never seen anything quite like this as a doctor even. What we're about to show you is the first face transplant done in the United States. And again, there's been transplants done around the world, but this is the most extensive facial transplant as well.

It's a remarkable story. Let's start at the beginning.

(BEGIN VIDEOTAPE)

GUPTA (voice-over): A shotgun blast five years ago blew this woman's face to pieces. A 46-year-old mother of two. In a moment, her identity gone.

This was the end result. Connie Culp no longer had a nose. Could not eat solids or drink from a cup. She had a hard time breathing. She lived in virtual seclusion. DR. FRANK PAPAY, CLEVELAND CLINIC: Little children would shy away from her and be scared of her.

GUPTA: Then, after years of waiting, Culp was matched with a donor - a face donor. Even as a doctor, I had never seen anything quite like it. The most extensive facial transplant ever.

Before, after.

It took 22 hours, eight surgeons. Eighty percent of Culp's face, her palate, upper lip, nose, eyelids, replaced with that of a donor.

CONNIE CULP, FACE TRANSPLANT RECIPIENT: I got me my nose.

GUPTA: And here's how she got it. First, graphed skin from the face of a donor who had just died. Doctors careful to preserve arteries, veins, nerves. The next hours are critical.

Using powerful microscope, doctors married the veins from donor to recipient and then grafted the donor's skin onto Culp's face.

The only indication it worked, the veins and arteries began to course with blood.

PAPAY: You have to wait and see if it clots or make sure that it continues to flush for that initial five minutes is you know you've done your job.

GUPTA: Face transplantation is new territory conferring tremendous risk, especially for a procedure that, unlike liver or heart transplantation, is not life saving. Add to that, face transplantations require high doses of immune-system suppressing drugs for life so that the body does not reject the new face.

I interviewed Dr. Maria who led Culp's operation before the transplant.

(on camera): You're talking about a long operation with a foreign tissue that's going to require a lifetime of anti-rejection medications and may not take and the person could actually -- their life could be threatened. How do you reconcile those two things?

DR. MARIA SIEMIONOW, CLEVELAND CLINIC: These people are not just coming with such a commitment because they want to be beautiful. They want to be normal. And they want to be just come back to the society as anybody else. And I think they have rights to decide about that.

CULP: You never know what might happen to you. You might get in a car wreck and think you're beautiful one day, so don't judge people that don't look the same as you do. You never know. One day it might be all taken away.

(END VIDEOTAPE)

GUPTA: And Don, when you look at her, one of the things that really struck me was how there's hardly any scarring that's visible. Think about the operations that she's had and now this face transplant, she looks pretty good.

And I think it's worth pointing out this image again, Don. Just went by quickly before, but take a look here. This is what doctors think she will look like a couple years from now when the swelling really goes away, when muscles start to work again, she'll get a much more normal contour to her face. This is what they project.

It's worth noting, she doesn't look like the donor face nor does she look like her own face before all of this happened, but something else entirely.

Don, back to you.

LEMON: All right. Thank you very much for that, Sanjay.