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Hearing on Interrogation Techniques; Family of Army Shooting Suspect Speaks; Disturbing Details of Buffalo Crash; Executive Pay; Boomers Face Retirement Bust; Social Security Fast Facts; Detainee Photo Release Called Off; Shuttle Mission To Hubble
Aired May 13, 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 ANCHOR: The question of torture front and center right now on Capitol Hill. The Senate Judiciary Committee hearing testimony about the Bush administration's detention and interrogation policies which some call torture.
Let's get live now to our congressional correspondent Dana who is Bash monitoring the hearing for us.
And Dana, forgive me for being so pointed here, but what is the point of the hearings?
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It's a very good question. Well, what democrats, who are run these hearings say, is that the point is to get to the bottom of what happened in the past so that America's trust and respect can be restored around the world and so that they can figure out what to change, if anything, when it comes to the law in the future.
But you know, make no mistake about it, there are politics involved here. Tony, these are democrats who say that they have an interest in exposing and talking about some of these harsh interrogation methods during a Bush administration that they say flat out were illegal. In fact, the democrat chairing this committee said that they were a pack of lies that we got from the Bush administration.
HARRIS: And so, Dana, what are we learning so far from the witnesses? Let's start there.
BASH: Sure. I think the most interesting that we have heard from so far, and this hearing is still ongoing, is a former FBI interrogator. Somebody who says flat out that he believes that he believes that these harsh interrogation methods, like waterboarding, are slow, ineffective and unreliable. And he also says, they are harmful to investigating terrorist groups like al Qaeda.
He is testifying behind a screen so you can't see his identity because he did infiltrate al Qaeda and he is worried about his safety and future work in that world.
But what he said was he had an experience specifically interrogating Abu Zubaydah. He said he did not use these harsh interrogation methods and he got very actionable intelligence. That's something that they did not get when they got that kind of method. Listen to what he said.
(BEGIN VIDEO CLIP)
ALI SOUFAN, CEO, THE SOUFAN GROUP LLC: A major problem is that it is ineffective. Al Qaeda are trained to resist torture. As shocking as these techniques are to us, their training prepares them for much worse. The torture that they would receive if caught by dictatorships, for example.
In a democracy, however, there is a glass ceiling the interrogator cannot breach. And eventually, the detainee will call the interrogator's bluff. And waterboarding itself had to be used 83 times. An indication that Abu Zubaydah had already called his interrogator's bluff.
In contrast, when we interrogated him using intelligent interrogation methods, within the first hour we gained important actionable intelligence.
(END VIDEO CLIP)
BASH: Now, one interesting moment in this hearing, Tony, is that Republican Lindsey Graham, who, by the way, is a Republican who is outspoken against these torture methods, he got this former FBI interrogator to admit that he does not know if, in fact, these harsh interrogation methods were actually useful, as the former vice president has argued, because he says he only knows his firsthand experience. And again, he argues that his firsthand experience is that these harsh methods simply are not necessary and, in fact, counterproductive.
HARRIS: Yes. And Dana, maybe you hinted at it just a moment ago. Where will all this lead?
BASH: It's really unclear at this point. There have been a lot of turf battles, frankly, here on Capitol Hill about who to investigate, what to investigate, and there is still an open question, not so much here, but mostly at the Justice Department, as to who will be prosecuted, if anybody, when it comes to this.
So I think that these members of Congress want to use their authority, want to use their oversight and probably (ph) their power, the fact they're in the majority, the Democrats, to unveil some of these issues and to really probe some of these things that we heard about with regard to the interrogation memos that came out and, of course, caused such a splash, such a controversy last month.
HARRIS: Well, let me try this on you -- former Vice President Dick Cheney has been publicly defending these techniques. Was he invited to testify in open session, closed session?
BASH: You know, I asked that question. I was told he was not invited to testify at this particular hearing. They did not rule out the potential or the possibility for the former vice president to be invited in the future, but, you know, the reality is that what Democrats are trying to do here -- and it's pretty obvious from the kinds of witnesses that they asked, not just the former FBI agent, but also a former Bush official who raised objections internally, and even wrote a memo that was destroyed -- that this is the angle they're going on. And you know, I think Democrats feel that the vice president has had a lot of his opinions aired in the airwaves, not so much in the hearing room so far.
HARRIS: Dana Bash.
Dana, appreciate it. Thank you.
BASH: Thank you.
HARRIS: The military launched two separate investigations into why a U.S. sergeant allegedly gunned down five of his fellow soldiers. Forty-four-year-old Army Sergeant John Russell is now in the Camp Victory stockade in Iraq.
This morning, we heard from family members of one of those killed in Monday's shooting rampage. Army Private First Class Michael Yates, Jr., was just 19 years old. His grief-stricken family is trying to cope with their loss.
(BEGIN VIDEO CLIP)
RICHARD VAN BLARGAN, STEPFATHER OF PFC. MICHAEL EDWARD YATES, JR.: We're not sure as to what happened over there. We do know that he was at the stress clinic, just like quite a few other military people. They have all dealt with the stress the best way they could.
He was due to go back to his unit today until this unfortunate event. I don't know much about the guy that did this. He was probably under a lot of stress as well, quite a bit more, from my understanding.
SHAWNA MACHLINSKI, MOTHER OF PFC. MICHAEL EDWARDS YATES, JR.: Bring them home. They don't need this. Bring them home. That's always the case, bring them home.
BLARGAN: We -- personally, you can't fight a politically correct war. OK? And playing these games with these people -- and it's not a game -- don't get me wrong, it's not a game, but you cannot be politically correct and fight a war.
(END VIDEO CLIP)
HARRIS: The father of the shooting suspect says his son wasn't so much affected by the stress of combat, but by stress from his commanders.
Our Ed Lavandera spoke with Sergeant Russell's father and his young son.
(BEGIN VIDEOTAPE)
ED LAVANDERA, CNN CORRESPONDENT (voice-over): It started with a fight inside this combat stress clinic in Camp Liberty, Baghdad, between Sergeant John Russell and other Army officers. Russell was being escorted back to his barracks when he snapped.
His father talked about it for the first time today.
WILBURN RUSSELL, FATHER OF SERGEANT JOHN RUSSELL: He says they got away (ph) from the facility. He beat the crap out of the guy and took a gun away from him.
LAVANDERA: Military officials say Sergeant Russell then drove back to the clinic and killed five U.S. soldiers. But Russell's father says it wasn't combat stress that made him kill, but fellow soldiers who pushed him over the edge.
W. RUSSELL: His wife told us. He e-mailed her and said he had had the worst three days of his life, because some of the officers had threatened him.
LAVANDERA: John Russell's father and son spoke extensively with us about the Army sergeant's experience in Iraq.
W. RUSSELL: They overstressed him. They broke him. They ruined his life.
They told him: You're an idiot. You don't belong in here. We're going to break you. We're going to get you out of here.
LAVANDERA: Russell was on his third tour in Iraq. His family says the 21-year Army veteran never showed signs of post-traumatic stress, and, even if he did, he wouldn't have talked about it.
W. RUSSELL: He wouldn't have asked for help if would have had to, you know?
LAVANDERA (on camera): He would have?
W. RUSSELL: No, he would not have.
LAVANDERA: He would not have.
W. RUSSELL: No. He...
(CROSSTALK)
LAVANDERA: You think that's maybe why they forced him to...
(CROSSTALK)
W. RUSSELL: He's think he's a John Wayne, you know, a man's man. You know, he's -- you know, he's laid-back. He's real quiet.
JOHN RUSSELL, SON OF SERGEANT JOHN RUSSELL: Something in his mind just went off and he just had no control over it, is what I think.
LAVANDERA: Because you said earlier, he's not like a violent -- he's not a violent guy.
J. RUSSELL: No, not at all. Not at all.
LAVANDERA (voice-over): Military officials in Baghdad say Sergeant Russell was ordered to undergo counseling last week because of unspecified words and actions.
MAJOR GENERAL DAVID PERKINS, U.S. ARMY: We just know that his chain of command had concerns about him. He had been undergoing counseling within the command. Again, they had already taken the immediate measure of removing his weapon.
LAVANDERA: Wilburn Russell says his son feared some Army officers were trying to run him out of the military with a dishonorable discharge five years before he could retire.
(on camera): Sergeant Russell's son says he last heard from his father on April 25 in an e-mail wishing him a happy birthday and saying that he was looking forward to the end of his deployment, when he was supposed to come home here for a short visit, in less than two months.
Ed Lavandera, CNN, Sherman, Texas.
(END VIDEOTAPE)
HARRIS: Admiral Mike Mullen appeared before the House Armed Services Committee this morning. He commented on the stress troops face in Iraq and other war zones.
(BEGIN VIDEO CLIP)
ADM. MICHAEL MULLEN, CHAIRMAN, JOINT CHIEFS OF STAFF: I've long believed that the stress of multiple deployments and the institutional pressure, real or imagined, to bear this stress with a stiff upper lip is driving some people to either leave the service or leave this life. It can also drive them to hurt others, as this week's tragic shooting in Baghdad appears to confirm.
(END VIDEO CLIP)
HARRIS: Boy. Sergeant Russell was on his third tour of duty in Iraq. He previously served in Bosnia and Kosovo.
Disappointing economic numbers out today. Consumers kept their wallets closed last month.
The Commerce Department says retail sales fell .4 of a percent in April. The decline was worse than economists expected. And it is the second straight month of falling sales.
You might call it bailout recycling. The Obama administration says it will use bailout money repaid by large banks to help smaller banks. Treasury Secretary Timothy Geithner says the repayments will allow the government to expand its assistance to banks.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, U.S. SECRETARY OF TREASURY: Using proceeds of those repayments, we plan to reopen the application window for banks under the Capital Purchase Program with total assets under $500 million, and raise from three percent risk-rated assets to five percent the amount which qualified institutions can apply for.
(END VIDEO CLIP)
HARRIS: President Obama gets a promise from the House speaker on health care reform. The president met with Speaker Nancy Pelosi and other House Democrats this morning. Pelosi says a bill to overhaul health care will be on the floor by the end of July.
The president welcomed that announcement. He says fixing health care is a key part of fixing the economy.
(BEGIN VIDEO CLIP)
BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: Businesses are using money to pay their rising health care costs that could be going to innovation and growth and new hiring. Far too many small businesses are dropping health care all together. In fact, you've got small business owners who can't afford health care for themselves, much less for their employees. And as we learned yesterday, pressures on Medicare are growing, which only underscores the need for reform.
That's why we've got to get this done. We've got to get it done this year. We've got to get it done this year both in the House and in the Senate.
And we don't have any excuses. The stars are aligned.
(END VIDEO CLIP)
HARRIS: No details from either the president or Speaker Pelosi on what the legislation will include.
Do we have any live pictures from NASA TV?
Man, they're usually so good and so on it. OK.
The shuttle crew closing in on the Hubble telescope. We expect them to make contact within the hour.
Ooh, live in the control room. Very good.
We will take a look at the mission next in the NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: The space chase is in high gear. Atlantis astronauts are closing in on the Hubble Space Telescope even as we speak. Astronauts will park Atlantis 30 feet from Hubble.
Can you imagine this? They will use the shuttle's robotic arm to grab the school bus-sized telescope from orbit.
I mean, think about this for a second. You will see it on CNN 12:54 Eastern Time. That's amazing.
The astronauts will take five spacewalks to install a new camera and batteries on Hubble. That should extend the telescope's life until 2014.
Now, astronauts -- this story developed yesterday -- have discovered several nicks spread over 21 inches of Atlantis' right wing, and they were probably made by foam falling from the shuttle's fuel tanks during liftoff. Now, NASA says the gouges are shallow and shouldn't be a problem on reentry.
The National Transportation Safety Board is holding a third day of hearings right now into the crash of Continental connection Flight 3407 in Buffalo. Fifty people died. Today, investigators are looking at whether pilot fatigue played a role.
Disturbing details have been emerging from the hearings. Allan Chernoff reports.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN SR. CORRESPONDENT (voice-over): "Jesus Christ, we're down!" exclaimed pilot Marvin Renslow.
Then, First Officer Rebecca Shaw screamed as Flight 3407 crashed into a private home near Buffalo-Niagara International Airport.
Those are the final 20 seconds of the cockpit voice recorder. Only minutes before, Shaw told Renslow of her fear of crashing in icy conditions. That was a violation of cockpit rules requiring all discussion to focus on landing the aircraft.
Why couldn't Captain Renslow save the plane? The National Transportation Safety Board is examining Renslow's training at Colgan Air, the regional carrier that operated Flight 3407. Renslow never received hands-on experience with the safety system in the Bombardier Q400 aircraft, called a stick-pusher, and activate it to prevent the plane from stalling.
UNIDENTIFIED MALE: Do you know of any stick training or stick- pusher training that was done in the actual Q400 prior to the accident?
PAUL PRYOR, COLGAN AIR: In the simulator, no. In the grounds book portion, it is covered.
UNIDENTIFIED MALE: So it's information, it's not practical experience with handling anything, right?
PRYOR: Correct.
CHERNOFF: The airline doesn't have to provide that training, according to the FAA. TINA SINISCALCO, SISTER OF CRASH VICTIM: This should not have happened. No. These fifty people should be enjoying their life right now.
CHERNOFF: Captain Renslow was fully FAA certified, but he had failed five pilot tests, three of which occurred before he joined the airline. Colgan Air says Renslow revealed only one of those failures to the airline. Those facts led the safety board to ask an official from the aircraft's manufacturer if a more experienced pilot could have saved the plane.
UNIDENTIFIED MALE: Do you believe this was a recoverable stall?
WALLY WARNER, BOMBARDIER: My opinion is yes.
CHERNOFF (on camera): Pilot fatigue is another issue the NTSB is examining. Captain Renslow had 22 hours off before reporting to work at Newark Airport, where the flight began, but he was seen sleeping in the crew room there. And the first officer, Rebecca Shaw, she commuted through the night to get to work at Newark.
Allan Chernoff, CNN, New York.
(END VIDEOTAPE)
HARRIS: Let me show you this, and then I want to talk about it a bit with Chad Myers.
Scary moments for a Southwest Airlines flight. You see what's going on here?
One of the tires caught fire as the plane landed in Houston yesterday. Passengers, you'll see here in a second, yes, evacuating by sliding down the emergency chutes and getting the heck out of there.
A Southwest spokesman there says that there were 47 passengers and five crew members on board this jet. And no one was hurt. And the fire didn't spread beyond the tire.
And Chad, I'm just sort of curious -- you're in a situation like this, you're the pilot. What kind of challenges are you facing here?
CHAD MYERS, AMS METEOROLOGIST: Well, I don't know exactly why that tire came apart, or was that a tire fire or was it a brake fire? We don't have enough evidence behind this.
I would love to see this 10 seconds ago to figure out, was there something not working when it hit the ground? Did the tire literally come apart, explode, and then get so hot that it did catch on fire?
Hard to catch a piece of rubber on fire as soon as it lands. You've got to get a lot of heat generated.
Remember, these tires are cold when he had hit the ground. So there could have been something else in there. It almost, at a time, looked like it was more sparking, like maybe the metal, the rim itself was dragging along the tarmac.
Those sparks may have set the tire on fire. And once a tire catches on fire -- have you ever seen a tire fire?
HARRIS: Oh, it's nasty. Yes, it's nasty.
(CROSSTALK)
MYERS: Like in a junkyard? Oh, it takes months to put that thing out.
HARRIS: That's true. That's true.
MYERS: It takes forever to get it lit, but then once you get it lit, it takes forever to get it out of there. So we'll have to do a little bit more digging to figure out what exactly -- what that was caused by. And I'm sure the FAA will know that.
But there are plenty of redundancies on that main landing gear that I'm sure the pilot didn't even -- and probably other than a sound going -- people in the plane probably didn't even know it was happening.
(WEATHER REPORT)
HARRIS: We've got some exclusive breaking news from Christine Romans, information about the day banks were told to take TARP money.
And boy, you gave us a heads up on this, this morning, that you were working on this.
And what do you have, Christine?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, new documents released under the Freedom of Information Act and obtained by Judicial Watch, the conservative government watchdog, reveal, frankly, Tony, that these banks were summoned to Washington by the Bush administration, taken in afternoon meetings at the Treasury Department and, essentially, each CEO was given a sheet of paper with a very brief, sort of permission slip, if you will. They filled in the name of the firm, how much money they would be given by the taxpayer, and told to sign it, with very little choice whatsoever.
We have known and we've heard on background for months that the banks were sort of strong-armed into the whole TARP program. These details, these documents, confirm, really, what we had been hearing.
The Treasury Department summoning them with the Fed chief. Sheila Bair from the FDIC, Timothy Geithner was there, a lot of Treasury folks. There's e-mail traffic in these documents that shows some concerns about the cameras that had shown up at the front gate as these CEOs were coming in.
Other concerns that they had, about making sure that the banks were going to take it. The Treasury secretary given a list of talking points -- the then-Treasury Secretary Henry Paulson -- where he said to the banks, we don't believe it is tenable to opt out of this program, Tony, because doing so would leave you vulnerable and exposed. "If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance."
So these banks -- as we've talked about this bank bailout, Tony, which has really, really angered a lot of Americans -- they've been painted as these greedy banks that came and took taxpayer money and then just used it to shore up their own books and not really lend -- this shows what many on Wall Street and inside Washington have been saying for months, that it was a very chaotic and urgent moment there on that day, October 13th, last fall, when the Treasury secretary was changing gears from buying up toxic assets to directly injecting money into the banks.
And what all these e-mails really show is that this was a really amazing moment in American history, quite frankly, Tony, when the conditions were changing on the ground, quite frankly, very quickly and we were doing things we had never done before. And it's really interesting stuff.
HARRIS: Well, and I'm going to ask questions that we may not know the answers to right now, but it just -- let's sort of set the time frame here. We're talking about Treasury Secretary Paulson at the time, so this is the last days of the Bush administration.
ROMANS: That's right.
HARRIS: And I'm curious, what -- can we surmise what these documents suggest about the severity of the banking crisis that Treasury was trying to respond to?
ROMANS: There's a great line in here on the talking points, the CEO talking points for the Treasury secretary. It says, "Ben, Sheila, John, Tim and I..." You know, most of these people still involved -- Tim Geithner, Sheila Bair, Ben Bernanke. Most of these people top, top leaders in the financial crisis.
HARRIS: Yes.
ROMANS: "We've asked you here this afternoon because we are of the view that the United States needs to take strong and decisive action to arrest the stress in our financial system."
You know, this was an amazing few weeks after Lehman Brothers went down, after the Congress approved the Troubled Asset Relief Program, which was meant to buy up the toxic assets, not to directly inject money into the banks. And at some point, this Treasury secretary and his team decided the best thing to do was to get taxpayer money directly into those banks, and they were moving quite quickly, and they weren't giving the banks a choice.
Go ahead.
HARRIS: Well, Christine, hang on a second. Just that sentence alone, do you still have it there? Can you read it to us again?
ROMANS: Which one?
HARRIS: The one you just read.
ROMANS: Oh, the one I just read.
HARRIS: Yes.
ROMANS: "We've asked you here this afternoon because we are of the view that the United States needs to stake strong and decisive action to arrest the stress in our financial system."
HARRIS: OK. So this sounds like a situation where the Treasury secretary is telling the banks -- and maybe we're talking about the 19 biggest at this point, I don't know.
ROMANS: These are nine banks.
HARRIS: OK. These are the nine banks. All right.
So, it sounds, even in that sentence, where this is a situation where Treasury, the government, is telling these banks what they need and what they have to do.
ROMANS: That's absolutely right. And on this form, Tony, that these banks signed, this very brief form, is a line basically that says, "I promise to expand the flow of credit to U.S. consumers and businesses on competitive terms to promote the sustained growth and vitality of the U.S. economy."
We've been debating for some time about whether the banks ever really agreed to -- you know, did they really agree specifically to increase the flow of credit or, you know, was just buffering their books, was that going to help them?
HARRIS: Yes.
ROMANS: They specifically -- each of these CEOs specifically agreed to expand the flow of credit in the U.S. That's been a part of the big argument this whole time, too.
HARRIS: What was the government responding to? What was the data? What was the government seeing that led them to this extraordinary action?
ROMANS: Oh, an absolute crisis, Tony, and a shutting down of the American financial system.
(CROSSTALK)
HARRIS: Yes. The banks weren't saying -- and yet, the banks weren't saying give me this money.
ROMANS: The banks took the money, because I have all of the signed agreements. That's right. but they were not given a choice.
HARRIS: Exactly. ROMANS: I think the point here is that they were brought in, and this shows -- I mean, this shows a great deal of leadership from the administration, Paulson's team there coming in and saying, guys, this is the way it's going to be.
You know, he came from Wall Street, too, so he knows. They came in, and this was really directed by them, and fascinating.
Another interesting point here is that then-Secretary Paulson called -- and we knew this -- called both candidates on the campaign trail, McCain and Obama, both of them senators -- McCain still a senator, of course -- and explained that this was going to be happening. So before the American people knew, explained that the government was going to be taking this historic stake into the financial system, a big intervention in the financial system.
And there's some e-mail traffic talking about making sure -- the PR movement to make sure this wasn't played as a nationalization. Try to tamp down the fears about a nationalization, because this is a very big deal, and there was some talk about the PR effort on that end, too.
HARRIS: This is fascinating. This is absolutely fascinating.
Christine, appreciate it. Thank you for the breaking news.
ROMANS: You're welcome.
HARRIS: And later, we will hear from chairman of Citigroup, Richard Parsons, about the country's current financial situation.
(COMMERCIAL BREAK)
HARRIS: A new threat from the Taliban. Militants say they will target Pakistani politicians and their families in Swat Valley. The region is under attack by Pakistani government forces as they try to drive the Taliban from Swat.
The fighting has forced thousands to abandon their homes, leading to unintended consequences.
CNN Correspondent Reza Sayah has one child's story from Mardan, Pakistan.
(BEGIN VIDEOTAPE)
REZA SAYAH, CNN CORRESPONDENT (voice-over): At a hospital in northwestern Pakistan, the sounds of agony that come with war. Behind each cry, a story of pain and loss.
Doctors say no one here has lost more than Shaista, an 11-year- old girl who watched as an explosion instantly killed much of her family.
DR. SHAHID DURRANI, SHAISTA'S DOCTOR: When you see your parents before you laying in parts... SAYAH (on camera): My God.
DURRANI: ... it is terrible.
SAYAH (voice-over): Shaista and her family were among thousands who fled Pakistan's Swat Valley on the day the Army launched an all- out offensive against the Taliban. Doctors say she was walking along a road with her mother, her two sisters and brother when a mortar shell fell from the sky.
"We were coming," says Shaista. "Then my mother died, my brother died, and so did my two sisters."
Shaista says her father had left earlier and is still missing.
"She kept saying, 'It all happened in front of me,'" says Shaista's nurse, Salma Shaheen. "She said, 'Something fell on top of my mother and she got cut in half.' She said she ran in the street, but after that she doesn't remember anything."
(on camera): She says she's not crying.
UNIDENTIFIED MALE: She is not crying.
SAYAH (voice-over): Shaista woke up at this hospital, 90 kilometers from the battle zone, where doctors say, in three days, they've treated nearly 900 civilians caught in the crossfire between the Taliban and Pakistani troops.
(on camera): It is really overwhelming to see all of the victims coming into this hospital during the short time that we've been here. And like many hospitals in this region, this hospital doesn't have the modern equipment to treat all of these injuries, so they have to treat these injuries by any means necessary.
I mean, here's an example. This is a brick, a plastic shopping bag, and a rope. It's a makeshift traction to keep this victim's broken leg straight.
(voice-over): Doctors say Shaista will recover from her shattered foot.
UNIDENTIFIED MALE: Crushed completely.
SAYAH: The trauma of losing a family, they say, will last a lifetime.
For now, her guardian is her uncle, Mohammed Shir (ph), who found Shaista after searching area hospitals.
(on camera): So she's going to be your daughter? Your daughter?
(voice-over): A glimmer of hope for a little girl who, like hundreds of thousands of others, is paying an unimaginable price for a war she cannot possibly understand.
Reza Sayah, CNN, Mardan.
(END VIDEOTAPE)
HARRIS: Well, you know, he was the boss at Time Warner. Now he is the chairman of troubled Citigroup. We will hear what Dick Parsons is saying about the economy.
(COMMERCIAL BREAK)
HARRIS: Let's see here. Just go to CNN.com and there you -- oh, we're going to talk about this in just a moment.
You see Susan Lisovicz there. She had an exclusive interview just a -- I think it's exclusive. We'll find out in a second -- with former Time Warner Chairman and CEO Dick Parsons. We're going to share a bit of that with you in a moment.
But go to CNN.com if you want to find out where GM is number one right now in profitable. My guess would be overseas in China.
Let's take a look at the Big Board. New York Stock Exchange right now three hours into the trading day. As you can see, boy, this has been the trend all day. The Dow down in triple digits 155 points. Let me check, Nasdaq, last check town 34. And we are following the numbers throughout the day for you right here in the CNN NEWSROOM.
Executive pay is, once again, a big focus. AIG officials are on Capitol Hill today. Live pictures now. Ed Liddy of AIG, CEO, the boss there, testifying on compensation and other issues. The crippled insurance giant came under heavy criticism, you'll recall in March, after paying $165 million in bonuses to employees at the very unit that was blamed for the company's near collapse.
But the chairman of another company that received billions in bailout money says curbing Wall Street compensation would be a pretty big mistake. Susan Lisovicz is at the New York Stock Exchange with details of her -- good -- exclusive interview with the chairman of Citigroup.
A man we know well, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: We do know him well. I think a lot of people don't know that. Before Dick Parsons was running Time Warner, he started out in banking.
HARRIS: That's right.
LISOVICZ: He started out running one of the biggest companies at the time, Dime Savings Bank. So he is quite familiar with the financial industry and also with distress, like the S&L crisis, which was a big deal during that time.
HARRIS: That's right. Yes.
LISOVICZ: In any case, Tony, the hot button issue, executive compensation, as you indicated. Dick Parsons says that despite the infusion of $45 billion in TARP funds, the government has largely left the running of Citigroup to Citigroup. The big exception is executive compensation. He told me it would be a mistake to regulate Wall Street pay.
(BEGIN VIDEO CLIP)
RICHARD PARSONS, CHAIRMAN, CITIGROUP: Too much regulation in that space I think is going to be pernicious. I just don't see -- I can understand how people will feel better in the short-term about, well, we got those guys. But in the long-term, it's going to -- it is going to disadvantage our system on a global basis as against the rest of the world. Not a smart thing to do in my judgment.
(END VIDEO CLIP)
LISOVICZ: Tony, Parsons was a member of the Obama transition team. He told me he spent a fair amount of time on the phone with bank regulators since named non-executive chairman of Citi in February. He said that while the administration understands the importance of retaining top talent, he said Washington is sensitive to the populist outrage over Wall Street pay.
HARRIS: You know, I'm just curious on this. We're in a financial crisis. Everyone agrees. Where is this top talent going to go, Susan?
LISOVICZ: Well, it's a question he's been asked. I asked him.
HARRIS: Good.
LISOVICZ: I mean it's a legitimate question. It's like, you know, you're seeing all these losses. Billions of dollars in losses. And, yes, banks that either need TARP or are forced to take TARP, you know, the industry is in distress. And Parsons himself, of course, you know, having run Time Warner, is used to the debate over talent and big salaries, whether it was the music industry, the movie industry, the TV industry . . .
HARRIS: Yes, yes, yes, you're getting close to us.
LISOVICZ: I'll leave it at that. And he said restrictions on pay, even if there was, would still leave plenty of options for Wall Street talent, even during this crisis. For instance, Tony, think about all the international financial companies that operate just here in New York. Whether it's Deutsche Bank, Barclays, BNP Paribas, (INAUDIBLE), Sentendar (ph). Those are just a few of the European banks, to say nothing of the South American, the Asian operations that operate. They would not be reined in by this. Hedge funds, not that we know of yet. Startup companies.
You know, "The Wall Street Journal's" lead story today is about how the Obama administration is eyeing these big, big, broad revisions on Wall Street pay. But there's always a way around it. And, remember, we're in a global marketplace and there's always a way around it.
HARRIS: Yes, but this high priced talent didn't keep us out of this mess, did it? Hello. Hello.
LISOVICZ: No, it didn't. No, it didn't. And that is why it is such a hot button issue, Mr. Harris.
HARRIS: Thank you, Susan. See you a little later. Thank you.
You know the recession has taken a big bite out of your 401(k). Now the downturn is sinking its teeth into Social Security and Medicare. Here's White House correspondent Suzanne Malveaux.
(BEGIN VIDEOTAPE)
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): Brace yourself. More bad news.
GEITHNER: The longer we wait to address the long-term solvency of Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be.
MALVEAUX: Another casualty from the worst recession in decades, your Social Security.
GEITHNER: These reports underscore the urgency of action.
MALVEAUX: A report released by the trustees reveals the country's Social Security and Medicare trust funds will run out of money even sooner than expected. Social Security likely depleted by 2037. Four years earlier than projected. Medicare out of cash by 2017. Two years earlier.
KATHLEEN SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES: Today's report should trouble anyone who is concerned about the future of Medicare and health care in America.
MALVEAUX: The government partly blames the economic crisis. 5.7 million jobs lost since the recession began in December 2007. Unemployment now at a record 25-year high of 8.9 percent. Fewer people working and less tax revenue means less money going into the trust funds for both entitlement programs. President Obama says Social Security can be fixed, not by raising the retirement age or cutting benefits, but increasing taxes for the wealthy.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: For wealthier people, why don't we raise the cap? Make them pay a little more payroll tax.
MALVEAUX: The president says as health care costs skyrocket and the population gets older, the greater challenge will be funding Medicare and Medicaid.
OBAMA: Those are the things that are really breaking the bank.
MALVEAUX: That's why there is such a push in the Obama administration for health care reform. In the long-term it will be hard fought legislation that is meant to fix the problem. In the short-term, Republicans and Democrats agree that this economy needs to turn around to infuse some sort of cash into the system.
(END VIDEOTAPE)
HARRIS: OK. You just heard from Suzanne. Let's stay with this a bit longer here. Nicole Lapin is back with us with a look at some of the options for fixing Social Security.
We talked about this a little bit last hour but, you know, I don't know that we can talk about it enough.
NICOLE LAPIN, CNN.COM CORRESPONDENT: Because it was really hard for us to put this together.
HARRIS: Yes. Yes.
LAPIN: It's not all in one place. But we did. Reagan fixed it a little bit. Bush 43.
HARRIS: Took a look at it. Sure. Absolutely.
LAPIN: Tried but almost everyone can agree, Tony, that something needs to be done. So we put this all together. Some of the big proposals being thrown out there. First, to increase payroll taxes. We currently are at 6.2 percent for employer, 6.2 percent for employee. Some say, OK, just go ahead and increase that to 7 percent each.
Or reduce the benefits. So don't give the benefits to people other than the worker, like the spouse. This is how this system started, Tony.
HARRIS: That's right.
LAPIN: Or allow private savings accounts. There are different proposals out there. It gets pretty political. England and Chile have privatized systems. You can basically go to your bank. You go to your brokerage house with that money.
Or raise the retirement age. Some proposals suggest to raise it to 70. It's 67 now. Ali said people are working longer any way. Some worry, though, that we're never going to see that money if it happens.
Means testing. This gets a little wonky. Let me help you here. Right now even Warren Buffett qualifies for Social Security payments. So means testing would reduce or eliminate checks if your income or assets reach a certain level. So opponents say this would turn the system into a welfare system. Proponents say this would preserve Social Security as a safety net for the ones who need it most.
HARRIS: I see. I see.
LAPIN: Last one. One of the most frequently mentioned proposals is to switch from wage indexing to price indexing so it would be closer aligned to the Consumer Price Index. Tie the benefits basically to how much things cost, rather than how much you earn. So again, the higher income workers would see a reduction in benefits.
HARRIS: Wow. There's a lot here.
LAPIN: A lot going on there. A lot going on there. But we really thought it was important to flush it out because we're hearing a lot of these proposals out there anyway.
HARRIS: Well, again, why don't we do this. Over the coming days and weeks, I mean, look, we're going to have some time to talk about this. Let's sort of drill down on each of the proposals for fixing the system and sort of discuss the merits.
LAPIN: Can I give some props to Barbara?
HARRIS: Yes, yes, yes.
LAPIN: She has been helping me with this segment. She's found...
HARRIS: On our team, Barbara?
LAPIN: Yes, yes, she's amazing. She found a quote from a former commissioner of the Social Security system, Dorcas Hardy, who says, "the one with the primary responsibility to the individual's future is the individual."
HARRIS: Is the individual.
LAPIN: So that's what we're really drilling down to, no matter how old you are.
HARRIS: Good stuff. Thanks, Nicole.
LAPIN: You're welcome.
HARRIS: Thanks, Barb Vargas (ph).
We've got some breaking news. A developing story. We've got two of our team members who are going to help us sort through this. Jill Dougherty is at the White House and Barbara Starr is at the Pentagon for us.
And let's start with you, Jill. The issue here is, it sounds that we're getting a firmer line, some greater clarity from the White House now on its position on the potential release of photos of detainees. Is that essentially at the crux of what's going on now?
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Exactly, Tony.
You know, up until this time, we were led to believe that the White House actually was going along with those court ordered releases of the photos. They said it was a decision by the courts, we are going along with it.
Now, just a few minutes ago, we got some information from an administration official who says that actually last week the president met with his legal team and told them that he did not feel comfortable with the release of those photos by the Defense Department because he believed that the release would jeopardize U.S. troops and because he thought that national security implications had not been fully presented to the court.
And so we are also told that at the end of that meeting, he directed his counsel to object to the immediate release of those photos. And, again, raised the issue yesterday with General Odierno when he was here at the White House, saying that he was making the decision to argue against that release.
So that's different from what we were hearing. Yesterday there was a bit of pullback, Tony, when Robert Gibbs, the spokesman for the president, did not go ahead with the way they usually approach this subject by saying that there was concern by the president. And now we're hearing that last week he was concerned about that.
HARRIS: OK. Jill, if you would, stand by. Something tells me that after we talk to Barbara here, we'll have -- got that -- we'll have another question for you.
And, Barbara, let's bring you in. What has been -- because I'm gathering that the position may be changing here. What has been the position of the Defense Department on the release of these photos? And what are we talking about, 40 plus photos?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Tony, let's fill everybody in with a little bit of the back story here.
HARRIS: Right.
STARR: This is a lawsuit that has been going on for years under the Bush administration. The ACLU, the American Civil Liberty Union, had petitioned the court because they were trying to get the U.S. military to release dozens and perhaps hundreds of photos showing allegations of abusive of detainees at the hands of the U.S. military over the years in Iraq and Afghanistan. The court had continued to rule against the government trying to keep those photos secret.
In March, the Obama administration reached an agreement with the ACLU, informed the court, said we give up appealing this whole thing. We know we're not winning. This was something that was a leave behind from President Bush. We know we're not winning. OK. We agree. We're going to release these photos.
What we can now confirm to you is a senior U.S. military official confirms to CNN that in the last several days, in fact, General David Petraeus, the head of the U.S. Central Command, General Raymond Odierno, the head of operations in Iraq, and General David McKiernan, just fired as the head of military operations in Afghanistan, all went to the administration and said, we have concerns. Don't release these photos. The concerns that all three men expressed were that if these very explicit photos were released, it would put U.S. troops at risk, that there would be violent reactions in Iraq and Afghanistan by the people there seeing this being done at the hands of U.S. military personnel.
We need to add, these photos were taken and there were investigations, if you will, of allegations of abuse. Certainly some of them went through the military justice system. Some of them were proven to be unfounded, justice the very rough treatment that forces were found to be justified in using when they detained people. But this is very controversial. It was expected that there would be a huge reaction.
Here's what we don't know, Tony. When the Obama administration in March agreed to the agreement to let these photos come out, certainly Bob Gates and Admiral Michael Mullen, chairman of the Joint Chiefs, must have had an opinion and now three generals have expressed their opinion and told the president not a good idea.
HARRIS: So if the administration is now reversing its view of all of this, does this put this back in the hands of a judge to ultimately make a decision on this?
STARR: Great question. That's what we don't know exactly now. Now that the Obama administration is saying that the agreement they reached that they informed the court about, you know, forget it. We're no long abiding by this agreement. What will the legal proceedings be? It will be handled by the Justice Department. And right now it's not exactly clear whether they go back to the court, keep appealing this through the court proceedings, get turned down again and eventually have to put the photographs out or they just say to the court, forget it -- Tony.
HARRIS: Wow. All right, Barbara, appreciate that. What a story. Jill Dougherty at the White House.
Jill, did you want to make another point?
DOUGHERTY: Yes, Tony, I just want to point out, according to the statement by the administration official, the president has directed his counsel to object to the immediate release. So it looks as if they will go back and argue not necessarily on legal grounds. It appears that it's more a judgment call. That albeit these photos, according to the court, would have to be released, but the judgment would be -- it would be inflammatory to release them at this point. So it looks as if that's the way they are handling this. That it . . .
HARRIS: So the administration goes essentially to the court and says, look, we've got these photos. They're inflammatory. We understand we're losing the legal argument here but there is a tremendous downside to releasing these photos.
DOUGHERTY: Precisely. In fact, the statement by this administration official says that the president strongly believes that the release of these photos, particularly at this time, would only serve the purpose of inflaming the theaters of war, jeopardizing U.S. forces and making our job more difficult in places like Iraq and Afghanistan.
HARRIS: OK. Jill Dougherty at the White House and our Pentagon correspondent Barbara Starr. Ladies, thank you. Appreciate it.
We are following the shuttle as it closes in on the Hubble Telescope. A delicate operation under way. Live pics from NASA TV. We're back in a moment.
(COMMERCIAL BREAK)
HARRIS: Live from orbit. Do we have -- oh, we don't have live pictures. We'll get them back in a second. I think they're just sort of fluctuating between the mission control shot and the actual orbiter shot. We'll get back to it, I'm sure, in a moment.
Three hundred and fifty miles above the Indian Ocean is where the orbiter is right now. Atlantis is about to snare the Hubble Telescope and haul it into the shuttle's pay load bank. Astronauts will make five spacewalks to spruce up Hubble giving it a new eyeball -- thanks -- and batteries. The upgrades will let Hubble seem 10 times farther and faster and keep it on the job another five years.
This is the last mission to the telescope. The shuttle fleet will be retired next year.
Leroy Chiao is a veteran of three shuttle missions and spent six months aboard the International Space Station. Did you really? He retired from NASA in 2005 and he joins us now from Houston.
Good to see you, sir.
Hey, do me a favor.
LEROY CHIAO, FORMER ASTRONAUT: You bet.
HARRIS: Yes, separate what is routine in this operation, this docking operation, and what is tricky.
CHIAO: Well, you know, in any rendezvous and docking, it's not really a docking. It's really they're going to be flying in formation with the Hubble. It will be grappled). But it's always tricky when you have two objects, two spacecrafts flying at 17,500 miles an hour that are trying to get together and not hit each other. So that's the risk, of course. You don't want to have a collision.
But the crews have been very well trained. He's already, I believe, rendezvoused and so they're stationed, keeping and getting ready to use the robotic arm to grapple the satellite.
HARRIS: Well, Leroy, it says here as part of the description of what's going to happen here, is this docking involves the, what, the periodic firing of the shuttle's thrusters to align it with the space telescope.
CHIAO: Right. That's correct. They're basically flying in formation with the telescope. And so they're going to have to fire their control thrusters just to kind of adjust the, you know, the distance between the two spacecraft and to do what we call station keeping. HARRIS: I got you. So Hubble has some, help me here, some high gain antennas that have to be stowed before the docking takes place. Is that correct?
CHIAO: Right. What happens is, because we're firing jets on the shuttle, we don't want the exhaust from those jets to damage the instruments. So we've feather the arrays and also (INAUDIBLE).
HARRIS: You've feathered the arrays.
CHIAO: Right. You adjust the arrays so that they're kind of the edge on the shuttle so that you have minimum impacts of the exhaust from the thrusters.
HARRIS: What does this term grapple mean? Why are we using this instead of some -- what is this . . .
CHIAO: Well, I guess we could say grab, you know.
HARRIS: There you go.
CHIAO: But basically Megan McArthur is going to use the robotic arm and reach out there through -- you know, she's been very well trained for this, and to slowly bring the end of the arm in and actually use the capture mechanism to do the very technical what we call the grappling of the satellite.
HARRIS: Yes, I think of grappling these days as ultimate fighting stuff and the grappling isn't going to happen for another 10 minutes here.
What concerns you, looking forward here, the most about this entire repair mission? We've heard that there are concerns about space debris crashing into the shuttle and how difficult and minute the process is of unscrewing, what, nearly 100 screws to this thing.
CHIAO: Right. Right. Well, you know, the orbital debris is a concern on any space mission. And because of the orbit they're in, they're up a little bit higher than normal shuttle and station missions. There's a little bit more debris up there, but really the chances of a strike are still pretty small. It's the big sky theory and, of course, we have people and organizations tracking the larger objects and, you know, we've been predictably shown that they're not going to be a problem.
As far as the actual EVAs, they're very complex. As you look through the time line, they'll be removing very small screws. They've got a system to contain those screws and the crew is very well trained. And this has all been choreographed and I know them personally, of course, and so I know they'll do a great job.
HARRIS: Well, Leroy, we appreciate it. Thanks for your time and your expertise.
CHIAO: Thank you very much. Great to be on.
HARRIS: And we will continue to follow this mission. A grappling to take place in t-10 minutes. You're in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: NASA TV giving us a view of mission control. Shuttle Atlantis right now rendezvousing with the Hubble Telescope. The robotic arm will actually pull Hubble into the cargo bay for repairs. The shuttle will maneuver to within 35 feet of the telescope before capturing it, right, and pulling it into the cargo bay for repairs. It's set to happen in T-8 minutes. You can watch it happen in the next hour of CNN NEWSROOM with Kyra Phillips.
