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Fast-Moving Wildfires Continue Assault on Southern California; Defense Secretary Gates: "No U.S. Ground Forces to Pakistan"; Specter Gets Subcommittee Chairmanship; Obama Announces $17B Budget Cut; Connecticut College Shooter Might be Targeting Students
Aired May 07, 2009 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
` DON LEMON, CNN ANCHOR: All right. There are some other stories that we're keeping an eye on for you right now. Students and faculty at Wesleyan College in Middletown, Connecticut, are being told to stay away from campus today. The warning went out on the school's Web site following a fatal shooting of a student. The suspect is still on the loose there.
Nine people are hospitalized in Elizabeth Town, Kentucky this morning after two tour buses were hit by a tractor trailer truck. Three of the injured are children. The tour buses are owned by the Morgan family, a Christian music group. They had parked on the side of the road after one of the buses broke down.
Radio talk show host Michael Savage wants to be allowed into Britain. He was included on a new list of 22 people banned by the UK. The government feels they are stirring up hatred there.
In an interview on CNN's "AMERICAN MORNING," Savage said he wants an apology and said England has a quote, "demented attitude."
More homes are in danger this morning from a fast-moving wildfire in Santa Barbara, California. At least a dozen homes are already destroyed. An evacuation order has gone out for more than 5,000 houses. Firefighters are trying to get ahead of the fire, in some cases, standing guard over individual houses. Right now, there are more than 900 firefighters manning the lines, and more crews from around the state are arriving this morning to try to help out there.
And our Kara Finnstrom has the latest from the lines this morning for you.
KARA FINNSTROM, CNN CORRESPONDENT: Well, the big worry out here today is once again the winds. Forecasts are for those winds to gust up to 65 miles per hour, possibly at points during the day. And that could pick up some of these hot embers and spread this fire even further. We have been watching this house behind us burn.
Just one example of the many homes here, that have been completely destroyed. We watched the top of this roof actually collapsing and it's now burning, as you see, through those doors on the ground below. No official estimates yet as to how many homes were completely destroyed. But as we've driven through some of these neighborhoods, we've seen 10 to 12 of these homes destroyed ourselves. More resources will be coming in today. Whereas yesterday they had three aircrafts up attacking this fire from the air. Today, there will be 16. So the hope is to get more forces in on the ground, more forces in the air, and to hopefully try and gain some control over this wildfire. Kara Finnstrom, for CNN, Santa Barbara.
LEMON: Thank you very much for that, Kara Finnstrom.
Now we want to go to our meteorologist. There he is. Rob Marciano in the CNN Severe Weather Center.
(WEATHER REPORT)
LEMON: And the nation's banking crisis, billions of your dollars help keep some of the biggest banks afloat. Did that investment pay off? Well, today we get the official results of the government's stress tests. So what will these results tell us?
We're going to break it down for you right now with CNN's Christine Romans, she's part of the CNN Money Team. She joins us now from our Washington bureau.
Did this help?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, listen, we won't have the official results until 5:00 this afternoon Eastern time, Don. But I mean, it's the worst kept secret in the world what this stress test have revealed for some of these banks, right? So we're not looking for any great revelations because there's been leaks and speculation for almost a week now.
So here's what we think we know according to widespread reports and leaks that Bank of America, Citigroup, some other banks are going to need to raise more money. They're going to have to up their capital to cushion them from the potential of future losses if the economy turns south. Bank of America whopping $34 billion, Wells Fargo, GMAC, and Citigroup, and a few others.
Now, there are some banks that are expected to get a clean bill of health later this afternoon after the market closes when federal regulators say that they don't need any more capital like JP Morgan Chase, Goldman Sachs, MetLife and others.
What does it mean if you bank at one of these places? Look, this is a so-called stress test on, you know, the capital structures of these banks. It's not going to matter for your own bank account
. And the Treasury secretary has been clear that of the 19 banks that were tested, none of these are considered insolvent. Some of them are just going to have to raise more money to make sure that they cushion any blows from any future losses in the economy, Don.
LEMON: Christine Romans. Thank you very much for that, Christine.
Now let's get the latest numbers on the economy. This morning we learned that the new applications for weekly jobless benefits have taken an unexpected drop. They're now at their lowest level in 14 weeks. But continuing claims that is all people receiving benefits has set a record for the 14th week.
Also this morning, more big losses for General Motors. The automaker says it lost $6 billion in the first quarter of the year. Revenue was cut nearly in half. Apparently because perspective buyers were scared off by the threat of bankruptcy.
I want to check out the Dow now. You can see that the Dow is down 17 almost 18 points. It's early on in trading. It's only been trading for a couple of minutes. Sp we will check back throughout the day. Hopefully that number will go up.
All right. Let's talk now about your money because - and how it's being saved or how it's being spent. Minutes from now, President Obama will discuss his $17 billion in planned cuts.
Earlier this morning, the White House delivered the 2010 spending plan to Capitol Hill. We'll carry his remarks live. It will happen at the bottom of the hour for you. 10:35 Eastern, 7:35 Pacific. At the bottom of the hour, the president live with his remarks on the 2010 budget cuts.
Now more money talk to talk to you about. Attorney General Eric Holder facing questions this hour. He is testifying at a Senate subcommittee hearing on funding and oversight for the Justice Department. You're looking at live pictures of where he will be testifying. They expect that he will take questions about Guantanamo Bay, torture memos, and prosecuting Bush lawyers. We will check in on that. If the attorney general makes any news out of that, we will bring it to you right here on CNN. You won't miss any other(ph).
Defense Secretary Robert Gates says no U.S. ground forces will be deployed to Pakistan. He offered that assurance today while visiting U.S. troops in Afghanistan. Gates also says that the Pentagon is working to get troops longer home visits between deployments to Afghan battle zones. 38,000 U.S. troops are now stationed in Afghanistan with another 30,000 heading there by this fall. Pakistan, planning to scrap a controversial peace deal as its forces ramp up operations against the Taliban.
And CNN's Ivan Watson is in the capital of Islamabad and he joins us now with the very latest on that.
What can you tell us, Ivan?
IVAN WATSON, CNN CORRESPONDENT: Well, senior military source for the Pakistani army tells CNN that this controversial peace deal will be scrapped, that there'll be some kind of a government statement issuing, declaring it null and void this evening. But that's really a formality.
Because the fighting has been raging, Don, across northwest Pakistan in the districts of Buner, lower Dir and now in the Swat Valley. And today the Pakistani army has deployed fighter jets for the first time over the course of these past two weeks, bombing suspected Taliban targets. That, of course, is resulting in some civilian casualties.
A hospital director in the Swat valley, that's a Taliban stronghold, telling us that he's received four dead bodies of civilians over the last 24 hours as well as at least 18 wounded civilians hit in what he said were helicopter strikes. But he said he can't get wounded people brought in to the hospital because Taliban militants are blocking the road to his hospital. Don?
LEMON: So, Ivan, tell us about these camps that have been set up for civilians fleeing the Swat region there. What can you tell us about them? You've seen them?
WATSON: Yes. We returned from one yesterday, from several of these camps. They're cropping up across northwest Pakistan. The Pakistani government is helping set them up along with the United Nations and other non-governmental organizations. They're providing tents. They're providing water and some food, and some medical care.
And the camps are growing by the hour. We watched 50 people arrive at one camp over the course of an hour. Five days ago that camp was an empty field. And then there were 1,400 people at that camp by day's end. And you talk to these people, you can just imagine what it's like to have to pick up and run when there is artillery coming into your town, coming into your village, when there are combatants fighting back and forth.
And we are talking about large families, Don. People with five, nine children having to jump in the back of trucks. We watched people carrying their kids on their backs, carrying their belongings on their backs and now setting up in these camps. And they don't know when they'll be able to go back home.
LEMON: Thank you, Ivan Watson. We appreciate your reporting.
Now, while all that's going on in Pakistan, top Pakistani and Afghan officials are in Washington for a second day of security talks. The leaders of the two nations met with President Obama, Vice President Joe Biden, and Secretary of State Hillary Clinton yesterday to coordinate strategy in fighting the Taliban and al Qaeda. There are meetings today at the State Department, the CIA, the FBI, and on Capitol Hill.
Our Wolf Blitzer has a one-on-one interview with Afghan President Hamid Karzai. One on one with Wolf Blitzer, watch that in "THE SITUATION ROOM." That's tomorrow, Friday night, 6:00 p.m. Eastern, right here on CNN.
Well, we told you about a small Texas town accused of shaking down minority motorists. We've got an update on one of those drivers for you.
(COMMERCIAL BREAK)
ANNOUNCER: This is CNN, the most trusted name in news. Now back to the CNN NEWSROOM.
LEMON: I want you to pay attention to this story, because it is a scene of despair. It is becoming all too familiar.
In the city of Chicago, candles like these, grieving loved ones, standing vigil, families gathering to cry over the violent death of another young person. Our David Mattingly reports on what's going on from Chicago.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Count how many lady bugs are there.
DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Kindergarten turned out to be a lot harder for Martrell Stevens than his mother could've ever imagined.
MARTRELL STEVENS, SHOOTING VICTIM: Fine.
UNIDENTIFIED FEMALE: Fine.
MARTRELL STEVENS: Fine.
MATTINGLY: A year ago, he was sleeping in the car as his mother prepared to pull out on to a Chicago street when he was shot and partially paralyzed.
LAKEESHA STEVENS, SON WAS SHOT: It can happen to anyone. You can be walking, you can be walking, you can be anywhere. It can happen to anyone.
MATTINGLY: Martrell easily could have died. In just this school year, more than 30 school-aged children are dead. Their faces are posted online by the "Chicago Tribune," silent reminders of the growing mountain of grief.
DIANE LATIKER, FOUNDER, "KIDS OFF THE BLOCK": They come by here, they do this. They come by here in cars and families come and cry. You can hear them in my house screaming.
MATTINGLY: Diane started this memorial in a vacant lot hoping to shock the city into action. She started with 30 stones marked with the names of 30 young victims. Today with 153 stones, she's the one who is shocked.
(on camera): Who is failing these kids?
LATIKER: We all are.
MATTINGLY: Is it the city? Is it the police? Is it the schools?
LATIKER: We all are.
MATTINGLY (voice-over): The youngest victim remembered here was only 10. Among them, 16-year-old Blair Holt, the aspiring song writer whose death sparked protest and demands for action.
(on camera): But two years later, the violence is getting worse, not better. We wanted to know why more young people are dying this year than last, and what is being done about it. But community activists tell us they're at a loss to find any simple explanation.
(voice-over): The recent discovery of a 15-year-old who was beaten, shot in the head, and burned took the out of control violence to a frightening level. Chicago's father Michael Pfleger thought it was time to put out an SOS.
(on camera): That's a pretty strong message, what are you trying to say?
REV. MICHAEL PFLEGER, ST. SABINA CHURCH: Well I think it is strong. I think it's a radical move, but I think it's a radical problem.
MATTINGLY (voice-over): He ordered the church's flag to be hung upside down, a symbol of distress.
PFLEGER: This is an epidemic.
MATTINGLY (on camera): If we had this many Chicago young people dying of swine flu, what kind of resources would you see coming to this city?
PFLEGER: There would be a great influx of resources to say let's stop this. Let's deal with this.
MATTINGLY: But because it's violence, what are we seeing happening?
PFLEGER: We're hiding it. We're ignoring it. We're denying the problems.
MARTRELL STEVENS, LAKEESHA STEVENS' SON: I can walk well (INAUDIBLE).
MATTINGLY (voice-over): But there's no denying the loss. Martrell Stevens is adjusting to his loss with youthful energy and optimism. In a city where dreams are disappearing he believes he will one day walk again.
(END VIDEOTAPE)
LEMON: That was David Mattingly. And just last night, Chicago police shot and killed an 18-year-old gunman after they say he opened fire inside a convenience store.
We have got an update for you on a story CNN's Gary Tuchman did about the town of Tenaha, Texas. As Gary reported, some of the town's police officers and the district attorney have been named in a class action lawsuit. They are accused of exploiting the state's forfeiture law by keeping money from suspects after questionable charges have been dropped. They are also accused of targeting minority drivers. One officer refused to discuss the case with Gary.
(BEGIN VIDEOTAPE)
GARY TUCHMAN, CNN CORRESPONDENT (on camera): My name's Gary Tuchman with CNN. I want to know if you recognize this guy. We're doing a story. About this guy, Roderick Daniels. He was pulled over here by you, a year and a half ago, and you took his money and his jewelry. Do you recognize him?
(END VIDEOTAPE)
LEMON: The man in the picture that you see there, Roderick Daniels, was on his way to buy a new car with $8,500. There's a video of him right there. Well, after Gary's visit to Tenaha, court papers signed by the district attorney said Daniels would be getting his money back 18 months after police took it.
(BEGIN VIDEO CLIP)
RODERICK DANIELS, MOTORIST GETTING HIS MONEY BACK: I just feel blessed. Actually just blessed and happy that everything's going good for right now. I'm very surprised. I mean, I kind of let it go because it was so long ago, but I'm glad that you helped me out a lot.
(END VIDEO CLIP)
LEMON: And now this. The Texas attorney general's office says it is investigating the conduct of the officials in Tenaha. The U.S. Justice Department is reviewing the allegations, and Texas state lawmakers are considering holding hearings. And that class action lawsuit filed more than a year ago, well, it finally goes to trial the week after next. Stay tuned.
What is next for swine flu? Questions you're asking about the H1N1 virus. We have the answers for you.
(COMMERCIAL BREAK)
LEMON: OK. Let's talk about the H1N1 virus. There are now more than 1,800 confirmed swine flu cases around the world, 642 of them right here in the United States. So what should we expect next from the swine flu virus?
CNN's senior medical correspondent Elizabeth Cohen joins us with this week's "Empowered Patient." OK. So I understand you have a series of these questions, right from this week's column.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: That's right. A column. Yes, column. It's the future of swine flu.
LEMON: OK. I want to start with one...
COHEN: OK. LEMON: About the outbreak and how it's winding down. OK. Here's what it says. It says if it comes back, the swine flu, when would it return?
COHEN: OK. Well, first let's go over is the outbreak in the U.S. winding down?
(CROSSTALK)
COHEN: Yes. OK. That's the first one.
LEMON: Right.
COHEN: And it isn't winding down quite yet, but it does appear to be winding down in Mexico.
LEMON: OK.
COHEN: And since everything happened in Mexico first, there's some expectations that it will wind down relatively soon here in the United States. And also, it's the end of flu season, so usually things start to wind down in general with the flu virus.
LEMON: So, but before we knew it was winding down. I mean they - because they were testing old cases, and so it was actually winding down and we thought maybe the numbers were going up. But it was actually coming down because they were testing the old cases and they were coming back positive.
COHEN: Right. Right.
LEMON: OK. So that question that I jumped ahead...
COHEN: OK.
LEMON: ... to your question. All right. So if it does come back, when would it come back? In the fall when it starts to -
COHEN: Yes, the thought would be is that the virus would come back in the fall if it does come back. And that's because flu viruses have seasons and they tend to suddenly go away in the summer and then come back in the fall. But it's not known, you know, will it come back with a vengeance, will it come back with a whimper. That part is not known yet.
LEMON: We don't know.
COHEN: We don't know, right.
LEMON: OK. The question is we've been talking about this, is the government prepared? You know having all these vaccines, will there be a vaccine if it does come back? Will we be protected?
COHEN: Now certainly the NIH and the CDC are working towards a vaccine. They say they have people right now in labs trying to grow seed stock of this so that they can get a vaccine going. Now, what's going to be interesting is who is going to get that vaccine. Are they going to offer it to everyone or they're just going to offer it -
LEMON: Who gets priority?
COHEN: Right. Who gets priority? Will everyone even want it? Will you want a vaccine when it's just a mild disease? Will you want to take a vaccine that's never been used before? Very interesting questions for the fall.
LEMON: Yes, who gets precedence here? Who gets priority here? Because we're hearing it's a disease of young people. So, I mean, do young people get it? You know what I mean?
COHEN: Because traditionally with the flu vaccine...
LEMON: Yes.
COHEN: ... you give it to the very old and you give it to people with chronic diseases. Those are two of the first groups that you give it to. But you're right, since the median age of people getting this is sort of often been around 16, 17, do you still target elderly people?
LEMON: Yes.
COHEN: It's going to be some interesting decisions.
LEMON: We shall see. We shall see. H1N1. Hopefully, it doesn't come back.
COHEN: That's right.
LEMON: If it does, we will have it for you right here on CNN. And Elizabeth Cohen will be following it.
Thank you, Elizabeth.
Let's talk now about challenges for the class of 2009. Can you imagine graduating this year?
The economy derailing the plans for some college seniors. It's part of our special series here on CNN.
(COMMERCIAL BREAK)
ANNOUNCER: Live in the CNN NEWSROOM, Don Lemon.
LEMON: All right. Well, just minutes from now, President Obama will talk about his $17 billion in planned budget cuts. Earlier this morning, the White House delivered the 2010 spending plan to Capitol Hill. We will carry his remarks for you live, 10:35. It should be 7:35 Pacific, 10:35 Eastern.
The president's cost cutting, drawing big yawns, and more than a little sarcasm from some Republicans. They point out that the cuts hardly make a dent in the government spending.
(BEGIN VIDEO CLIP)
SEN. JUDD GREGG (R), NEW HAMPSHIRE: It's as if you had a vast desert of sand. It's as if this was the Gobi Desert or the Sahara Desert, and you came along and you took a few pieces of sand off the desert. It literally will have virtually no impact on the deficit and the debt as we move forward into the out years because of the fact that while you're taking these few dollars out, which I congratulate the president for trying to do, they are adding back in massive amounts of spending. Massive amounts.
(END VIDEO CLIP)
LEMON: Well, Senator Judd Gregg says the proposed cuts account for a measly one half of one percent of the federal budget.
General Motors is running on empty. Losses at the nation's biggest automaker keep piling up, and the timing couldn't be worse because the company faces a June 1st deadline to restructure or file for bankruptcy.
Stephanie Elam at the New York Stock Exchange with the details of GM's first quarter results. And they are not good. Are they, Stephanie?
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Well, Don, you know, they did burn through $6 billion during the first quarter. But that's actually better than Wall Street was expecting. To give you some perspective of just how bad, it was expected to be here. This is also double what it loss the same time last year, the same quarter last year. This is double their losses of that period.
They did burn through more than $10 billion in cash through the period, as well. But they were going to cut billions of dollars in cost at this point. But it's not enough, really, to offset those weak sales we've been hearing so much about. And the CFO of the company is saying, you know what, all of this talk about a bankruptcy filing is just scaring away any potential buyers, and we really need that to just kind of go away.
But buyers on Wall Street, they're kind of scared right now, as well. We've seen a bit of a hesitation. We opened higher, but right now, you take a look at the markets, we're on the downside by 72 points on the Dow, 8440. Nasdaq off 32 points at 1726. So, it's off close to two percent right now. So, at this point now, Don, a lot of hesitation going into the results of the stress test and also the big jobs report on Friday.
LEMON: All right, let's talk about GM. We're hearing about more plants being closed. How many more facilities are we talking about here, Stephanie?
ELAM: Well, we have a bit here. We're talking about 23 engine, transmission and part plants that are going to be temporarily closed. Anywhere between one and nine weeks, they're talking about there. That's going to affect 18,000 workers. But of course, that's a trickle-down effect there. You know, GM recently announced plans to idle some of its assembly plants, and if GM isn't making cars, then obviously they don't need parts.
So, what they're trying to do is really control their inventory growth on this one. They don't want to have more than they actually need -- Don.
LEMON: How close is GM to a bankruptcy filing, Steph?
ELAM: That's the big question now. If you take a look at how much cash they have on hand, it's close to $12 billion here. But really, what they need for this kind of period where they had to have this cash on hand, they're really needing between $11 and $14 billion to continue with their normal operations. But it's prepared for both bankruptcy and also restructuring out of court. And the restructuring is really what they'd rather do. They want to stay out of bankruptcy court at this point. But it's really going to be a matter of about how much money they can get together -- Don.
LEMON: Stephanie Elam, thank you very much for that.
ELAM: Sure.
LEMON: Oh, boy. Young people. We have been taking a closer look this week at the challenges facing the Class of 2009. Today, we're talking to three college students about the economy and the effect it is having on them and their classmates. There they are all over the country, the South, the Southeast and out West.
Joining us first, there's Tristan Allen. He is an economics major at Morehouse College, right here in Atlanta. Leah Finnegan is a graduating senior at the University of Texas in Austin. And David Chung is an English major at UCLA. Hello to all of you. Bright, fresh, faces.
Tristan, I'm going to start with you. And my first question to you is, you're headed to Harvard for grad school. That's what I'm hearing. I asked you, I said, are you ready to work? You said no, going to grad school at Harvard. So, here's a question: What about you or your classmates? Have most of them found jobs or ways to pay for grad school here?
TRISTAN ALLEN, MOREHOUSE COLLEGE SENIOR: Well, I think there's been a delicate mix. I found that in general the students who have been most prepared and who have taken the grad school or professional search seriously are those who have been successful in the long run.
LEMON: So, are you optimistic?
ALLEN: Very much so. Very much so.
LEMON: OK. All right, Tristan. Let's move on to Leah now. Leah, you're headed to Columbia? You're going to get a master's degree in their master's program in journalism. Good luck, by the way... LEAH FINNEGAN, UNIVERSITY OF TEXAS SENIOR: Thank you.
LEMON: ... in that. Have you been equally fortunate here? And are you as optimistic as Tristan?
FINNEGAN: I am. I mean, we're holding pretty fast, and I think there's a great sense of hope. And it's kind of freeing, because there's not as much pressure to do so much right after college.
LEMON: I've got to ask you this. Because you see about, you know, the problems we're having with newspapers and all of this, does it worry you as a journalism...
FINNEGAN: Yes. It's definitely a double whammy graduating right now and going into journalism. But all the same, you know, this dealing with new technologies and having the sense that we can use these tools to kind of fix and further the industry brings a great sense of calm and excitement to the younger set.
LEMON: You may be the person that fixes the industry or revolutionizes it.
FINNEGAN: Maybe.
LEMON: OK. Let's hope so. OK. Hang on, Leah. David, junior, international student from Korea. Economic crisis, international students, you know, particularly hard here. So, what I'm wondering is, how are international students coping? Are you guys talking about that? The economic crisis?
DAVID CHUNG, UCLA STUDENT: Oh, yes, definitely, definitely. The economic crisis is definitely affecting us. Some people have to go back. Some people are barely staying. But most people like myself, we are coming here with a huge sacrifice that we make on part of our families. So, for me, there is no choice other than to stay here and try my best and do as best as I can. It's scary, definitely.
LEMON: Yes. And you know what, I asked Leah two questions I want to ask you. Because, you know, a lot of international students really help with the industry here and help us revolutionize things that are coming to the forefront. Do you think this will affect the country? Maybe we won't be number one anymore or further from the top because the international students are having to go back?
CHUNG: I don't think so, because more and more as time goes by, people are coming to America to study. And I think all the focus is going to be here still. Because people, a lot of people are actually deciding to stay. There's actually training programs at school international student services are offering that allows us to be trained here, and companies are in America to actually work in America in the future.
LEMON: All right. One more real quick question for all of you. Tristan, I think you're, what, are you an economics major?
ALLEN: Right. Economics. LEMON: Are people thinking about it because of the economy? Are people changing their major because of it? They figure, like, you know, a lot of these industries and jobs are going to go away?
ALLEN: Well, I don't know if people are changing their major, but people definitely have a more open outlook on prospective job opportunities. I think about one of my close friends, who's a chemistry major. He's going to work on Wall Street. I think people are just keeping a much more open mind about what it is they do post- graduation.
LEMON: OK. Real quick, Leah, I asked you about journalism, are people changing there?
FINNEGAN: No, not really. I think there's a feeling that you should do what you want now more than ever because you don't know if there's going to be a job after you graduate in anything.
LEMON: OK. Good. Right? No matter what you go in. David, same for you. Same question. Since, you know, international students are having trouble, are people changing majors and deciding to do other things?
CHUNG: Actually, most international students coming from backgrounds which a lot of sacrifices are made there. Very future- oriented majors. My major is a special case where I'm doing what I really like, but most majors are very science-based, very practical, practical-based. So, there's not much changing going on right now.
LEMON: Oh, that's good. Hey, do what you love, right? All of you, I'm sure all of you all can attest to that? Yes, a head nod would be good.
FINNEGAN: Yes.
ALLEN: Definitely.
LEMON: All right, guys. Wow, 2009, that means you were born in like the '80s, '86, something like that. Man, I'm getting old.
Thanks to our guests. Tristan Allen from Morehouse College. He's right here in Atlanta. Leah Finnegan from the University of Texas in Austin and David Chung from UCLA. Best of luck to all of you. And we certainly hope that you guys will help us out in the future. Be great kids and great people.
FINNEGAN: Thank you.
CHUNG: Thank you so much.
ALLEN: Thank you.
LEMON: Just minutes from now, I want to tell you as we look at these live pictures of the White House, President Barack Obama is going to talk about his $17 billion in planned budget cuts. It's important to these students and us, the students that you're watching right now. We'll bring those remarks to you live as they happen. They should Those remarks should get under way at any moment.
(COMMERCIAL BREAK)
LEMON: OK. We have been reporting on Senator Arlen Specter. You know he changed parties. He went from Republican to Democrat, and then that caused problems with his seniority in the Senate. He got put to the bottom of many lists, many committees, some of the committees that he was the head of. And so he got moved to the bottom.
We're hearing, though, that the Democrats are offering him some sort of -- I don't want to say it's a consolation prize, but they're offering him something in order to placate him or to help him out.
Here is our Dana Bash. Dana's joining us.
Dana, this is breaking news coming in. Glad you're ready to talk about it. You take it away, tell me what's going on.
DANA BASH, SENIOR CONGRESSIONAL CORRESPONDENT: That's right. Well, you laid it out perfectly, Don. And the fact of the matter is, we were reporting yesterday that Democrats had put Arlen Specter at the bottom of the rank when it comes to seniority. And this caused a huge problem here among Democrats between Arlen Specter and actually the Democratic leadership.
Well, the Democratic leadership has in essence reversed itself today. And what they have decided to do is give Arlen Specter a subcommittee chairmanship on the very important committee of judiciary, the Judiciary Committee. And what happened is that the number two Democrat in the Senate, Dick Durbin, he had a subcommittee chairmanship of crime and drugs in that Judiciary Committee. He decided to give it up and let Arlen Specter take that over. This is a subcommittee with a lot of power when it comes to the Judiciary Committee.
And the reason is really pretty simple. According to one source I talked to, they want Senator Specter to win, and another interesting reason is, this committee, of course, is going to be taking up...
LEMON: Dana?
BASH: ... the Supreme Court nomination, and he is somebody who they don't want to have problems with.
LEMON: Dana, I hate to interrupt you. Thank you very much for that breaking news on Arlen Specter. We want to get to the president, who is talking about his budget for 2010. Let's listen in.
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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I believe we can and must do exactly that. Over the course of our first hundred days in office, my administration has taken aggressive action to confront a historic economic crisis. We're doing everything that we can to create jobs and to get our economy moving, while building a new foundation for lasting prosperity -- a foundation that invests in quality education, lowers health care costs and develops new sources of energy powered by new jobs and industries.
But one of the pillars of this foundation is fiscal responsibility. We can no longer afford to spend as if deficits don't matter and waste is not our problem. We can no longer afford to leave the hard choices for the next budget, the next administration or the next generation.
That's why I've charged the Office of Management and Budget, led by Peter Orszag and Rob Nabors, who are standing behind me today, with going through the budget -- program by program, item by item, line by line -- looking for areas where we can save taxpayer dollars.
Today, the budget office is releasing the first report in this process: a list of more than 100 programs slated to be reduced or eliminated altogether. And the process is ongoing.
I want to be clear: There are many, many people doing valuable work for our government across the country and around the world, and it's important that we support these folks -- people who don't draw a big paycheck or earn a lot of praise, but who do tough, thankless jobs on our behalf in our government. So, this is not a criticism of them.
At the same time, we have to admit that there is a lot of money that's being spent inefficiently, ineffectively and, in some cases, in ways that are actually pretty stunning.
Some programs may have made sense in the past but are no longer needed in the present. Other programs never made any sense; the end result of a special interest's successful lobbying campaign. Still other programs perform functions that can be conducted more efficiently or are already carried out more effectively elsewhere in the government.
One example of a program we will cut is a long-range radio navigation system which costs taxpayers $35 million a year. Now, this system once made a lot of sense, before there were satellites to help us navigate. Now, there's GPS. And yet, year after year, this obsolete technology has continued to be funded even though it serves no government function and very few people are left who still actually use it.
Another example is the National Institute for Literacy. Now, I strongly support initiatives that promote literacy. It's critical. But I oppose programs that do it badly. Last year, nearly half of the funding in this program was spent on overhead. So, we've proposed cutting the $6 million for this program in favor of supporting literacy efforts within the Department of Education which use tax dollars more effectively and wisely.
We're also closing an office maintained by the Department of Education in Paris. This is an office that costs hundreds of thousands of dollars to employ one person as a representative to the United Nations Educational, Scientific and Cultural Organization, or UNESCO. Now, participation in UNESCO is very important. But we can save this money and still participate using e-mail and teleconferencing and a small travel budget.
In addition, we're going to save money by eliminating unnecessary defense programs that do nothing to keep us safe, but rather prevent us from spending money on what does keep us safe. One example is a $465 million program to build an alternate engine for the Joint Strike Fighter. The Defense Department is already pleased with the engine it has.
The engine it has works. The Pentagon does not want and does not plan to use the alternative version. That's why the Pentagon stopped requesting this funding two years ago, yet it's still being funded.
And these are just a few examples. But the point to remember is that there are consequences for this kind of spending.
It makes the development of new tools for our military, like the Joint Strike Fighter, more expensive, even prohibitively so, and crowds out money that we could be using, for example, to improve our troops' quality of life and their safety and security.
It makes government less effective. It makes our nation less resilient and less able to address immediate concerns and long-term challenges. And it leaves behind a massive burden for our children and grandchildren.
Now, some of the cuts we're putting forward today are more painful than others. Some are larger than others. In fact, a few of the programs we eliminate will produce less than a million dollars in savings. And in Washington, I guess that's considered trivial. Outside of Washington, that's still considered a lot of money.
But these savings, large and small, add up. The 121 budget cuts we are announcing today will save taxpayers nearly $17 billion next year alone. And even by Washington standards, that should be considered real money.
To put this in perspective, the $17 billion is more than enough savings to pay for a $2,500 tuition tax credit for millions of students, as well as a larger Pell grant, with enough money left over to pay for everything we do to pay for -- to protect the national parks. And this is just one aspect of the budget reforms and savings we're seeking.
I've signed a presidential memorandum to end unnecessary no-bid contracts and dramatically reform the way government contracts are awarded, reform that will save the American people up to $40 billion each year.
Secretary Gates has proposed the elimination of expensive weapons systems ill-suited for the threats of the 21st century, and a sweeping overhaul of a defense contracting system which has been riddled with hundreds of billions of dollars in waste and cost overruns. A proposal to accomplish these kinds of reforms, sponsored by senators John McCain and Carl Levin in the Senate and representatives Ike Skelton and John McHugh in the House, is advancing through Congress as we speak.
We're also going to eliminate the subsidies we provide to the health insurance companies through Medicare, saving roughly $22 billion each year, starting in 2012, as part of a broader effort to reduce health care costs, essential to putting our nation on a more secure fiscal footing.
All told, by the end my first term, we will cut the deficit in half. Over the next decade, we'll bring nondefense discretionary spending to its lowest level as a share of gross domestic product since 1962.
We will also continue to look for ways we can save taxpayer money. And I know there are many in both parties in Congress committed to cutting spending and eager to work with us.
One important step is restoring the pay-as-you-go rule. And I've called on Congress to do exactly that. This rule says, very simply, that Congress can only spend a dollar if it saves a dollar elsewhere. This is the principle that guides responsible families managing a budget. This is the principle that helped transform large deficits into surpluses in the 1990s.
I've also asked my Cabinet to continue to scour their budgets looking for savings and to report their findings back to me.
And I've proposed other creative ways to control spending. For example, we don't want agencies to protect bloated budgets, we want them to promote effective programs. So, we'll allow agencies that identify savings to keep a portion of those savings to invest in programs that work within their agencies. We're also making it possible for government employees to submit their ideas for how their agency can save money and perform better.
And we're going to reach beyond the halls of government. Many businesses have innovative ways of using technology to save money. Many experts have new ideas to make government work more efficiently. Government can and must learn from them.
Finally, while these steps will help us cut our deficit in half over the next four years, we recognize that there remain looming challenges to our fiscal health beyond that, challenges that will require us to make health care more affordable and to work on a bipartisan basis to address programs like Social Security. So, what we're proposing today does not replace the need for large changes in nondiscretionary spending.
It is important, though, for all of you, as you're writing up these stories, to recognize that $17 billion taken out of our discretionary, nondefense budget, as well as portions of our defense budget, are significant. They mean something. Now, none of this will be easy. For every dollar we seek to save, there will be those who have an interest in seeing it spent. That's how unnecessary programs survive year after year. That's how budgets swell. That's how the people's interest is slowly overtaken by the special interests.
But at this moment, at this difficult time for our nation, we can't accept business as usual. We can't accept anything less than a government ready to meet the challenges of our time.
We must build a government of the 21st century, a government that is more efficient and more effective; a government that does what we need to do it (sic) and nothing we don't; a government that invests in our future without leaving behind enormous financial burdens that put our future in jeopardy.
And today we've taken an important step, albeit just a first step, towards building this kind of government, not just for this generation of Americans, but for the sake of generations to come.
Thank you, everybody.
LEMON: All right, the president of the United States making an announcement about the 2010 budget there. Man, really making some tough choices, saying he's going to eliminate over 100 programs slated to be reduced or eliminated altogether. He says a lot of money spent inefficiently, he said, and some of it can be moved into other programs to help.
This was done -- the money that was spent inefficiently, he says, done as a result of lobbyists or special interests. So, some of these programs will be merged to other programs. But again, he said, some will be reduced or eliminated altogether. Closing UNESCO, an office in Paris, unnecessary defense programs, he says, and the National Institute for Literacy. Stay tuned. The president making announcement about his budget joint there by budget officers. Peter Orszag and Rob Nabors standing at his side there.
Breaking news to tell you about. We told you about that shooting at Wesleyan yesterday, Wesleyan College in Middletown, Connecticut. Well, here's what the guidance at the campus just moments ago released. The police in Middletown say there is new evidence about the suspect in yesterday's shooting here.
We know, we had been reporting that he had a direct link to the victim, but no other connection to the Wesleyan community. So, they are making their students aware of this, that he has made threats, they say, in personal journals toward other Wesleyan students and its Jewish students specifically. All students, they say, are urged to remain vigilant and to stay indoors. They are taking additional security precautions.
Students and faculty at Wesleyan are on alert now to be careful because this person may be targeting people, specifically. Fatal shooting there of a student there yesterday. We're back in a moment.
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LEMON: All right. Well, thousands of people forced out of neighborhoods in Santa Barbara, California. A devastating wildfire there has already destroyed at least a dozen homes. And right now, the fire is burning out of control despite efforts of some 900 firefighters.
In North Carolina, they are cleaning up after a round of storms hit the central part of the state on Tuesday. The National Weather Service says six tornadoes touched down in counties, including Wilson, Nash, Wake and Johnston. At least three people suffered minor injuries.
I want to send you now to our expert on all of this, Mr. Rob Marciano. Rob, break it down for us.
ROB MARCIANO, AMS METEOROLOGIST: All right, well, we had the severe thunderstorms, as you mentioned, out to the east. I want to talk about briefly what's going on out west. Satellite imagery not showing much in the way of moisture coming to California. We are in the dry season now, so there's not a whole lot of hope for seeing any sort of rainfall into the fire situation down there in Santa Barbara.
Winds right now to the north-northeast about 9 miles an hour. Not too bad. They'll pick up, I think, later this afternoon and more so tonight. And they're not going to get any weaker. The weather pattern isn't any different and won't be for the next two days, at least. So, firefighters not necessarily going to get any help from Mother Nature.
Montgomery south into parts of southern Alabama and Georgia, some thunderstorms which were severe earlier are not so severe now. And thunderstorms across the Carolinas, they're not that bad either at the moment.
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LEMON: I'm Don Lemon. That is Rob Marciano. Your tax dollars and the 2010 budget. It's now in the hands of Congress. And the CNN NEWSROOM continues right now with Tony Harris.
