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Gas Prices Jump 26 Cents; Two-State Solution for Israel and Palestinians?; The Next Supreme Court Justice; Buy My Movie, Please!
Aired May 18, 2009 - 10:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And good morning, everyone. It is Monday, May 18th, and here are the top stories for you in the CNN NEWSROOM.
Gas soars 26 cents a gallon during this month. We will look at the factors driving prices higher.
The president's short list seems to be getting shorter. My guests help us decode the search for the Supreme Court's next justice.
Live to Pakistan and Afghanistan. For the fight against the Taliban, the battle may soon turn into urban warfare.
Good morning, everyone. I'm Tony Harris. And you are in the CNN NEWSROOM.
A new week, a new measure of the American economy from the president's chief number cruncher. Budget Director Peter Orszag says the free-fall appears to have stopped. Yes, a parachute has opened and the economy is floating to a bottom. But we're not there yet.
Consumers remain cautious with cash and credit. Home prices are still falling. Unemployment lines are growing, but not at the breathtaking pace we saw in the first quarter.
Orszag calls those indicators glimmers of sun.
(BEGIN VIDEO CLIP)
PETER ORSZAG, WHITE HOUSE BUDGET DIRECTOR: We're on target with our initial projections for the Recovery Act. And I would note, also, the sense of free-fall as attenuated. So, while we're not out of the woods yet, the sense that was the case two, three months ago, that the economy was in free-fall I think has attenuated a bit.
(END VIDEO CLIP)
HARRIS: But there's this: Gas prices have jumped 26 cents in just the last few weeks. The national average right now for regular unleaded is $2.31. It's partly due to a changeover to the summer blend and the long weekend ahead, but it may have more to do with movement in the global economy.
CNN's Christine Romans is in New York.
Christine, good to see you. If you would, sort through all of this for us, please.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, you know, you're forgiven for being worried about a jump in gas prices, Tony, because the last time we saw something like that, it was last year. Remember what happened then?
HARRIS: Oh yes.
ROMANS: All the way above $4. So people are very, very concerned. It's costing them another $4.50 to fill up a tank of gas than it did a month ago, and so they're a little freaked out.
Here's what's going on.
Oil prices are rising. Why are oil prices rising? You named some of the reasons. Oil prices are rising because there's a feeling in the global market that the worst is behind us, that the economy, as Peter Orszag said, is no longer in free-fall.
I'm not saying it's healthy. It's just no longer in free-fall. And you can look out over the months and years ahead, and in the oil market they can see a day in the future when companies have to start using more oil, economies have to start using more oil, and that eventually people will start driving more.
But demand is not up, Tony. Demand for gasoline is not up right now.
HARRIS: Christine, does that suggest that the speculators are coming back to the market, to the oil markets?
ROMANS: Well, all of these commodities, Tony -- speculators is not a dirty word in every sense. You're talking to an old commodities reporter here, Tony. You're not going to get me to go too far on that.
No, these are how these markets work, by people looking ahead and investing their money and hedging what their expectations are going forward. So you still have oil prices and gas prices, Tony, well below where they were last year.
I mean, people are nervous because of the huge jump we saw last year. But remember, I mean, they are dramatically less. I mean, think of this: Compared with a year ago, you're spending about $27 less on a tank of gas...
HARRIS: Yes.
ROMANS: ... then you were last year.
HARRIS: I like that.
ROMANS: So we're worried about it, but look to this summer, because of the recession and what it's done to demand. You're looking at gas prices that are still dramatically below a year ago. Look at that. A year ago, they were $3.79. So I don't want to take the polish off the conspiracy theorists, but we are still dramatically less than we were last year.
HARRIS: Let me polish up the conspiracy theorists.
ROMANS: I knew you would.
HARRIS: I took the bait. Why are the folks at Lundburg Survey saying that gas prices will not go through the roof? Tell me why...
ROMANS: Because barring any kinds of big supply disruptions, there's just no reason to. You know?
HARRIS: ... i.e. a storm; right?
ROMANS: That's right. And it's not hurricane season right now. Hurricane season doesn't come -- for a few more months we won't see the beginning of that.
Are there any reasons to see a spike in demand for gasoline? No. The economy is still very, very weak.
So that's why the Department of Energy has, like, a $2.30 a gallon peak for the summer for gas prices. We're there right now. But many analysts, Tony, are telling me we've already seen the bulk of this move. You know, maybe a few more cents, but they're hoping we've seen the bulk of this move.
HARRIS: Well, let me polish it up one more time here.
ROMANS: Do it.
HARRIS: We mentioned the long weekend ahead. I'm wondering if that will -- is this a hedge against expected demand? We see that there's going to be a spike, right, for the weekend?
ROMANS: Sure.
HARRIS: We're talking about Memorial Day Weekend and more folks driving. And maybe this is an opportunity for a little profit taking by the companies. Is that a possibility here?
ROMANS: We usually see gas prices trend up this time of year, Tony, ahead of the expected increase in demand going forward. We know that AAA is saying they expect more people to take to the roads and drive this Memorial Day Weekend than they did last year.
So we're probably going to see a little bit more demand. It's absolutely economic supply and demand that you would see prices rise ahead of that.
HARRIS: That was good stuff.
All right, Christine. Appreciate it. Polish up all the theories. ROMANS: I'm going to get a lot of e-mail now.
HARRIS: There you go.
Staunch allies. Some thorny issues. President Obama meeting this morning with Israeli Prime Minister Benjamin Netanyahu. Among the issues that could pose some problems, Palestinian statehood and Israel's concerns about the U.S. reaching out to Iran.
Foreign Affairs Correspondent Jill Dougherty on duty at the White House for us. And she joins us live.
Jill, if you would, will the Israeli prime minister, Benjamin Netanyahu, endorse the proposal of a two-state solution for Israel and the Palestinians?
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Probably dubious, Tony, because after all, up to this point he has not done it. He may inch closer. He may say something that sounds kind of like it, but most analysts say that he will not do that.
He does not believe that that should happen at this point. He doesn't think the Palestinians are ready. He still thinks that it's a threat to Israel.
And so what he could do, though, he could say things like improve the economic climate, help them economically with developing, things like that. Maybe even dismantle some of those illegal outposts in the settlements. But nobody at this point really is saying that he will turn a new leaf and endorse that.
HARRIS: Yes. Jill, you know, I've read so much analysis on this meeting today, and much of it suggests the Israeli prime minister is bringing something of an ultimatum to the president: Stop Iran's nuclear program or I will.
Is he bringing that kind of an ultimatum?
DOUGHERTY: He's brought it before, actually. I mean, that has been the message that they've been giving to the United States, which is this -- Israel would argue that Iran is such a threat to the existence of Israel, that something has to be done.
What should be done? They say that maybe even military action, to destroy Iran's nuclear program.
The United States thinks that that is a very big mistake, would create enormous problems. But what the Israelis are saying, and Netanyahu is saying, is solve Iran first and then we can deal with Palestinian peace. The United States, you could simplistically say, is saying deal with peace and we'll deal with Iran at the same time.
HARRIS: OK. And what is the schedule today, if you would, Jill? I believe the president and the Israeli prime minister are meeting one-on-one first to begin a series of meetings, correct? DOUGHERTY: Yes. They were supposed to begin at 10:30, so they are in that meeting now, the one-on-one. Then they open that up to their aides. So they, in kind of a broader meeting, go for another hour. Then they have lunch.
And then, also, there will be a meeting this evening between Hillary Clinton, the secretary of state, and Netanyahu. And then tomorrow you're going to see more meetings with congressional leaders, et cetera. So it's a full court press by the Israeli prime minister.
HARRIS: Yes. All right.
Our Foreign Affairs Correspondent Jill Dougherty at the White House for us.
Jill, appreciate it. Thank you.
We learned overnight that an assistant principal in New York City has died from swine flu complications. The death of 55-year-old Mitchell Wiener is the first in New York to be linked to the virus and the sixth in the nation. Wiener got sick just about a week ago and had been hospitalized in critical condition. Late last week, officials closed the Queens Middle School where Mitchell Wiener worked.
His death comes as health officials are gathering in Geneva, Switzerland, for the World Health Organization annual meeting. This year's conference will likely be dominated by the swine flu virus. Experts are talking about transmission rates and how to stop it from spreading. More than 8,000 people all over the world have come down with H1N1 in the last month, 76 of them have died.
The search for a Supreme Court justice -- there may be a nominee by next week. Our panel of experts goes over the short list.
(COMMERCIAL BREAK)
(WEATHER REPORT)
(COMMERCIAL BREAK)
HARRIS: The search for a justice. Sources tell CNN President Obama hopes to announce a nominee for the Supreme Court in the next two weeks, perhaps before Memorial Day.
CNN's Kate Bolduan looks at the short list, getting shorter.
(BEGIN VIDEOTAPE)
KATE BOLDUAN, CNN CORRESPONDENT (voice-over): President Obama calls it among his most serious responsibilities.
BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: I will seek somebody with a sharp and independent mind, and a record of excellence and integrity. BOLDUAN: Sources close to the selection process tell CNN, the list of top candidates for Mr. Obama's Supreme Court nominee is down to about half a dozen, a majority of which are women. They include federal appeals court judges, Sonia Sotomayor and Diane Wood, Solicitor General Elena Kagan, and at least two candidates with political experience, Homeland Security Secretary Janet Napolitano and Michigan Governor Jennifer Granholm.
On his search, the president says he is looking beyond judicial record.
OBAMA: I view that quality of empathy, of understanding and identifying with people's hopes and struggles, as an essential ingredient for arriving at just decisions and outcomes.
BOLDUAN: That worries many conservatives who translate what Mr. Obama calls "empathy" to mean judicial activism. Conservative groups are gearing up for a fight.
GARY MARX, EXEC. DIR., JUDICIAL CONFIRMATION NETWORK: We want to see that lobby equally applied. And the empathy talk really -- you know, personal feelings getting in the mix, that is very troublesome.
BOLDUAN: The president is likely to announce his nominee by month's end, a lifetime appointment viewed as a key element of any presidential legacy.
THOMAS GOLDSTEIN, SUPREME COURT LEGAL ANALYST: It's impossible to overstate the importance of a Supreme Court appointment because of the justice's power, they decide things like abortion, affirmative action, gay rights, the meaning of all the laws involving the detainees at Guantanamo Bay and presidential powers, wiretapping -- the list goes on and on and on.
BOLDUAN (on camera): President Obama's pick will undoubtedly be left of center. And while replacing one left-leaning justice with another won't likely change the ideological balance of the conservative bench, liberals are hoping for a more forceful justice to take on the conservative majority of the high court.
Kate Bolduan, CNN, the White House.
(END VIDEOTAPE)
HARRIS: White House spokesman Robert Gibbs says other candidates are under review, people who fly under the political and media radar.
So let's talk to Sherrilyn Ifill. She's in Baltimore, a law professor at the University of Maryland.
Sherrilyn, good to see you. Thanks for being here.
PROF. SHERRILYN IFILL, UNIVERSITY OF MARYLAND: Good to see you. Thank you.
HARRIS: And in New York, David Lat, a former federal prosecutor and founder of the blogs "Above the Law" and "Underneath the Robes."
Wow. That's pretty provocative.
David, good to see you. Thank you.
DAVID LAT, EDITOR, ABOVETHELAW.COM: Thanks, Tony.
HARRIS: All right. Let's do this -- you both are familiar with the short list at this point, correct? I don't need to go through those names again, do I?
IFILL: No.
LAT: No.
HARRIS: All right. OK. So let's listen to what Alan Dershowitz said on "AMERICAN MORNING" recently about the list. And then let's talk about it.
(BEGIN VIDEO CLIP)
PROF. ALAN DERSHOWITZ, HARVARD LAW SCHOOL: My concern is this: The impression is being created -- perhaps it's a false impression -- that what President Obama has done is said, bring me a list of women, Latinos, and I'll pick from that the most qualified people. That can create a very bad starting point for any justice.
They're not on the court as representatives of a particular gender or ethnicity. They're there because they're supposed to be the greatest legal minds in the country capable of dealing with some of the most complex issues.
(END VIDEO CLIP)
HARRIS: So, David Lat, let me start with you. Do you think the impression is being created that the president wants a woman or Latino on the court?
LAT: I think it's certainly true that there is a lot of pressure on the president to appoint a woman or a Latino. Certainly, interest groups have been speaking out. But, on the other hand, it could be argued that there are a number of people who'd be qualified to sit on the court. And if that's the case, then why not appoint a woman or a Latino, considering that right now you have a court with no Latinos and only one woman who is in her 70s, Justice Ginsburg.
HARRIS: Yes.
Sherrilyn, do you think the president is about to make a -- what some are calling a representative pick? And if that were the case, would that be wrong?
IFILL: Not at all. In fact, I think it's important for the president to try and broaden the experience, the professional background, the racial diversity, the gender diversity on the Supreme Court. It's not mutually exclusive to have a great legal mind or one of the greatest legal minds, and to have a woman, to have a Latino, or even to have another African-American on the court, which I think is now off the table either. Those things are not mutually exclusive, but what is important, not only for the legitimacy of the court in the eyes of the public, but also for ensuring that the court's got diverse viewpoints and backgrounds and so forth that come into the conference, that President Obama uses this opportunity to reach out and really broaden diversity of the court.
And as I said, not just based on race and gender, but even based on professional background, maybe having a former state court judge in the mix. All of these things are important to, I think, creating a better Supreme Court.
HARRIS: Yes.
David, let me start with you.
And then, Sherrilyn, let me have you chime in on this as well.
David, talk with me off the limb here.
And Sherrilyn, you teed this up perfectly for me.
When I hear -- and let me be frank about it -- mostly white men arguing the best minds available argument, am I the only one hearing the argument from them that the best mind should be a white male?
David, help me here. Talk me off the ledge.
LAT: Well, maybe I'm not the best person to do that, Tony. I do see the implication in those statements, and I think that it is not the case that there is a list of people who are fit to serve on the Supreme Court who are ranked one through 20 by judicial ability or intellect. I think you have a lot of people -- not a lot, perhaps, but a fair number of people who are qualified to serve on the highest court. And if that's the case, a lot of considerations will come into play.
Another thing to keep in mind is that a lot of will depend on how President Obama interacts with the nominee or the potential nominee when he interviews them. The White House has said late last week they have not yet started interviewing nominees. And so if the nominee doesn't hit it off with the president, that could be the end of his or her chance.
HARRIS: Sherrilyn, talk me off the ledge here.
IFILL: I'm going to try. Tony, let me tell you, if you look back in history at nominations to the United States Supreme Court -- and here I'm not really talking about the current members of the Supreme Court -- the white men who, by and large, have been appointed to the United States Supreme Court have not always been the most brilliant legal minds in the country. Some of them have been. We all know of some of the most exceptional justices on the court who've gone down in history, Holmes and so forth. But the reality is that there have been many, shall we say, mediocre legal minds who've also been on the Supreme Court historically.
There are a lot of reasons why a president appoints someone to sit on the United States Supreme Court. We certainly want someone who's brilliant, and I have no question that we will have someone who's brilliant regardless of their race or gender. But the idea that somehow this has been the bastion of the most brilliant legal minds ever, and that that's who have been represented among the many, many white men who have sat on the United States Supreme Court is also a bit of an overstatement, and that kind of distresses me as well.
HARRIS: You know the short list. Will the person, will the pick come from the short list? There it is.
IFILL: Well, the short list that we've seen, Tony, I think the Obama spokespeople have been very clear to say, even anonymously, that the short list we've seen is only a part of the short list. I think none of us really know what the full short list looks like.
HARRIS: Yes.
IFILL: So I think, therefore, it's hard to say that based on media accounts, that the selection is going to come from that list. I think those names are all on the list, but I think there are other names as well that have not gotten as much play in the media.
HARRIS: David, what do you think? Will the name come from the media list?
LAT: I actually think it probably will. It is certainly true that the president might present us with an outside-of-the-box pick. But look at the nominations of Chief Justice Robert and Justice Alito. Those were both names that were on a lot of short lists. There was no crazy surprise.
HARRIS: Yes. OK. Thank you both. That was a great discussion.
IFILL: Thank you.
HARRIS: David, Sherrilyn, thank you both.
How about a new car, not just below the sticker or invoice price, but below dealer's cost? Our Gerri Willis is an expert haggler, as you know. She's next.
(COMMERCIAL BREAK)
HARRIS: So we all know money is tight, but if you can part with a little green right now, you might cut yourself a red-hot deal.
Gerri Willis, your personal finance editor, is going to lead us down the road to bargains.
And Gerri, if you would, what about driving there in a new car?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: I like that. OK, Tony, listen to this. Let's start with getting that new car, not just below the sticker or the invoice, but below dealer cost.
HARRIS: Yes. Love that.
WILLIS: All right. You may not have heard of that, but it can be done.
Transaction prices are down. Incentives, cash back figures are on the rise. And according to data from TrueCar.com, last year, dealers sold 21 percent of 2009 models for less than what they paid for them.
HARRIS: Wow.
WILLIS: This year, that number is expected to zoom to 25 percent.
Now, start by arming yourself with as much info as possible before you head to the lot. Edmunds.com can tell you the true value of the car you're interested in, what they call a fair price based on what other consumers are paying, plus vehicle inventory, dealer incentives, sales conditions, even current economic trends.
Knowing all this information before you go will put you in the driver's seat when it comes time for negotiation. But you have to be prepared, too, to walk away if you're still not seeing eye to eye with that salesman.
HARRIS: Whoa. All right. Gerri, what about cutting bank fees and recouping some of that stimulus cash?
WILLIS: Yes. Yes. They made away with a lot of our tax dollars now, didn't they?
Those large national banks got billions from TARP, but you don't have to give them a dime more. Here's what you do.
Cut your bank fees by avoiding all out of network ATMs. And watch out for overdraft fees. Tony, they can be as high as 40 bucks. This especially important now since so many more people are using debit cards. You can incur multiple overdraft fees in a single day if you don't stay on top of that balance.
Watch out, too, for account maintenance fees. Teller fees sometimes charged to folks who use human tellers instead of ATMs. You've got to watch that. And remember, you can always vote with your feet and move to a credit union if you don't like those fees.
HARRIS: OK, so, Gerri, let's try this scenario -- you're out shopping and you see that really special item that you want, but the price is just not right. What about haggling?
WILLIS: I love haggling. A new poll out this week is part of a special rebuild your finances issue of "Consumer Reports." It found that more than two-thirds of Americans have haggled to secure a better deal in the last six months.
So here are some tips for improving your haggling skills.
A, number one, be patient. Be nice. Demanding a discount, hey, it rarely works.
And avoid an audience. If everyone else is asking for a deal, chances are you won't get yours.
Time your haggle late in the month when salespeople are trying to meet quotas. Also use early morning hours, evening hours when the clerks have more time to talk.
Offer to pay cash. Merchants don't like to pay those transaction fees to credit card companies. They can be anywhere from two percent to eight percent of the value of the item you're buying. Now is a great time to negotiate, get the best deal you can.
And if you've got a question about your money, your house, your debt, your savings, your job, send it to me at gerri@cnn.com. We answer those questions right here very Friday morning.
HARRIS: Awesome, Gerri. Good to see you. Thank you.
WILLIS: Thank you.
HARRIS: And check out our special report, "America's Money Crisis," at CNNMoney.com. While you're there, get the latest financial news and analysis. It is available to you from our CNN Money team.
There you go. There's the page -- CNNMoney.com.
The fight to defeat the Taliban -- can Pakistan and Afghanistan work together against a common enemy? We will go live to the region. That is next.
(COMMERCIAL BREAK)
HARRIS: Pakistan's government now using political and religious strategy to help its military fight the Taliban. Meanwhile, a Taliban spokesman is vowing militants will fight to their last breath against advancing Pakistani troops.
We are staying on top of all of this escalation. Our Ivan Watson is in the Pakistani capital, Islamabad. And CNN's Stan Grant, across the border in the Afghan capital of Kabul.
Ivan, first to you.
Fareed Zakaria asked the former Pakistani president, why is Pakistan not succeeding in ridding itself of radical elements, extremists, movements, Taliban elements, elements of al Qaeda? He says, Pervez Musharraf says, it's because of Afghanistan. So my question to you is this, how much of that statement is true? How much of is it Musharraf, frankly, doing a bit of a Dick Cheney-turn and defending his administration?
STAN GRANT, CNN CORRESPONDENT: Well, Musharraf had some pretty bad relations with Afghanistan, and he was frequently accused of not doing enough to stop the flow of weapons and militants across his border to Afghanistan.
I think the answer, from what I'm hearing from people much better informed than me, Tony, here in Islamabad, is that there probably wasn't enough political will power, either on the part of the government or the military, to go after the militants who were seen by some as Pakistan's proxies in Afghanistan.
Also, the terrain they were trying to fight in. You know, really tough to try to beat a guerrilla insurgency in mountains where they have some local support - Tony.
HARRIS: Well, Stan, I'm wondering, part of what we're hearing now is that there are actually claims that Afghan fighters are moving into Pakistan to do fighting there?
GRANT: Tony, that certainly wouldn't be unusual. I think what you have to realize is that this border, Pakistan and Afghanistan, it doesn't really exist as far as the Taliban is concerned.
I've spoken to Pakistan generals on their side when I was up on the border before, and they've talked about this in terms of in every -- in every flour there is a pinch of salt. They say that they find Afghan Taliban, they say they find insurgents from Chechnya, from parts of China - Muslim insurgents from parts of China - Somalis as well. But it's become, really, a honey pot, if you like, drawing in various Islamic insurgents from different parts of the world. So, it certainly isn't surprising.
But this blame game is interesting as well. If you look at this, India and Pakistan blame each other for sending militants, terrorists across its borders as far as the Kashmir dispute is concerned. So it's not unusual to find those in Pakistan blaming Afghanistan, and in Afghanistan they blame Pakistan for sending the insurgents both ways. What they do share, though, is a common problem, Tony.
HARRIS: Yes, and Ivan, back to you. You know, at the start of the offensive in Swat Valley, I asked you to what extent the action was being launched at the insistence of the United States. Does the Pakistani military and the intelligence service there see the Taliban threat in the same way as the United States does?
IVAN WATSON, CNN CORRESPONDENT: No, they haven't traditionally, but now I think there's an understanding that's starting to set in here that the Taliban truly is a threat. Particularly as they approached within 60 miles of the Pakistani capital when they made their land grab into Buner.
And Stan, if I could just follow on to your comments, I'm hearing from refugees on this side of the border who are fleeing the combat zone that they have seen Afghans, they've heard Afghan dialects among Taliban militants who've been enforcing their very strict version of Islamic sharia law in their communities.
GRANT: Yes, Ivan. I might just pick up on that, too, Tony.
When you talk about Pakistan and Afghanistan, as we said, you have this very porous border, people moving back and forth, but you also have the issue of which militants can you talk too. Because ultimately, many people are saying that you have to be able to speak to the Taliban. The U.S. has even talked about trying to find moderate elements of the Taliban that they can negotiate with.
And if you look at the Swat Valley issue, in Pakistan, part of the strategy was to find moderate elements of the Taliban and try to drag them away from the some of the hardliners. That's blown up in their face and now you see the Pakistan military trying to go in there and force them out.
HARRIS: And Stan, one more, let me direct one more to you here. Fareed Zakaria asked the former Pakistani president if he found Afghanistan President Hamid Karzai to be an effective leader.
And here's his response.
(BEGIN VIDEO CLIP)
PERVEZ MUSHARRAF, FORMER PRESIDENT OF PAKISTAN: Let me not comment on him. Yes, indeed, when I was -- used to be at odds (ph) with him was because he was double dealing with us. And I don't like double dealing at all.
(END VIDEO CLIP)
HARRIS: So, Stan, here's the question, the United States is investing another - what? - 21,000 troops into Afghanistan and really what we want to know is whether we have a real partner in that government. What is the clearest evidence of a real partnership between the coalition and that government in Afghanistan?
GRANT: Well, for that answer, Tony, you really have to look at what the U.S. administration has been saying itself. We understand that despite the smiles when Hamid Karzai came to Washington just over a week or so ago now for meetings there, behind the scenes, we understand that there were very terse discussions. We know there's been a lot of skepticism expressed in the U.S. about Hamid Karzai, about his lack of ability to control corruption, about the lack of progress here, about the lack of a crackdown on the drug trade. We know that people here in Afghanistan have very little faith in Hamid Karzai as well.
But here's the issue, he is most likely to win at the next election. He is the man they're going to have to deal with. Many now in the administration of the U.S. saying, perhaps, they need to find alternate members in the cabinet, that they could work around him and try to build some support in the regions amongst the governors as well. It simply won't be able to deliver just going through Hamid Karzai.
HARRIS: And Ivan, I want to give you the last word on this segment.
WATSON: Well, I'd be really interested to know what Stan says whether or not he's seen a thawing of relations at all, especially with the latest efforts by the Obama administration to bring the Pakistanis and the Afghans together because there is so much mutual distrust, there is so much animosity. The question is really, can these two neighbors start to work together? Because otherwise, they're never going to be able to stop this threat that has just grown like a cancer across their mutual borders.
HARRIS: Stan?
GRANT: Just quickly on that. Of course, we know that Hamid Karzai and Zardari, the president of the Pakistan, are now saying that they can work much more closely together. They certainly have a better relationship than Karzai and Musharraf had.
But here's another thing, we're speaking with the people on the streets of Afghanistan, they are saying that these AFPAC strategy, as they call them, is actually once again diverting attention from Afghanistan, where they believe the real fighting is, to Pakistan. They say that is only going to cause more problems.
HARRIS: Our Stan Grant in the Afghan capital of Kabul and Ivan Watson in the Pakistani capital of Islamabad. Gentlemen, thank you very much.
Growing concerns in the United States about Pakistan expanding its nuclear arsenal. According to today's "New York Times," members of Congress have been told in confidential briefings Pakistan is rapidly adding more nuclear weapons. The paper says that is raising concerns and questions about whether U.S. military aid might be diverted to Pakistan's nuclear program. The Obama administration wants military aid to be used to battle insurgents.
Even filmmakers in Cannes, France are having a hard time in this economy. Is anyone buying their movies?
(COMMERCIAL BREAK)
HARRIS: About 14 million fewer people are expected to fly this summer, but that doesn't mean you'll have an empty middle seat. Susan Lisovicz is at the New York Stock Exchange with more on flying, recession style.
Good morning, Susan.
SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Good morning, Tony.
It's not going to feel like 14 million fewer people are going to fly. The reason why, of course, is the recession. We're all feeling it one way or another. The Air Transport Association estimates seven percent fewer passengers will travel between June and August. And obviously, that is a peak period, typically. But you still, Tony, won't be able to probably spread out your stuff in the next seat, because it's going to be occupied. Airlines have responded by cutting routes and replacing bigger planes with smaller ones.
The drop in the number of people flying this summer mostly due to the economy. A CareerBuilder survey found that many people are totally scrapping their vacation plans due to either financial restraints, guilt or anxiety about their future, their future financial situation.
HARRIS: Sure, sure.
LISOVICZ: More than a third of workers say they haven't taken and aren't planning to take a vacation this year. Nearly three quarters of that group say it's because they simply can't afford it.
Just quickly looking at the board here. Well, no proof of a recession today. We're seeing a nice increase in stock prices after the Nasdaq snapping its nine-week win streak. Check it out. Dow is up 159 points, that's about two percent. Nasdaq up 1.5 percent. S&P up about two percent. Nice way to start this week.
HARRIS: Yes. You know, back to the airlines for a second here. What about pricing here? The airlines, I mean, come on, Susan, they are nickel and diming us on everything.
LISOVICZ: They are nickel and diming us on - yes, on luggage, on food, on drinks, on entertainment.
HARRIS: You want a peanut? That'll be 50 cents.
LISOVICZ: That's right. But fares overall are starting to come down because of the lack of demand.
Typically, you know, we'd be telling you months ago to book your flights as soon as possible to prevent the increase in fares. But there are deals to be had and, you know, and that may be the case for some time. Because a lot of airline experts are saying the industry won't really recover till next year or even the following year, assuming that the economy will recover by then because, remember, the unemployment rate is rising.
HARRIS: That's right.
LISOVICZ: And a different type of behavior kicks in.
HARRIS: Thanks, Susan. See you next hour.
LISOVICZ: You're welcome. You got it.
HARRIS: You know, plenty of protesters greeted President Obama as he spoke at one of the nation's biggest Catholic universities. But what he said got him a standing ovation. (COMMERCIAL BREAK)
HARRIS: Well, we're just learning more details on this, but apparently West Virginia Senator Robert Byrd was hospitalized late Friday afternoon.
Again, we're just learning this news just this moment here in the CNN NEWSROOM. Hospitalized Friday afternoon with a spike in temperature that, according to his doctors, was caused by a minor infection. The release goes on to say he is being treated with antibiotics, responding well and is expected to be released from the hospital in a few days.
Once again, West Virginia Senator Robert Byrd is in the hospital right now being treated for an infection that led to a spike in his temperature. As we get more information on this, we will, of course, pass it along to you.
President Obama calls for common ground after delving into one of the most divisive issues in the country. We're talking about abortion.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Holy Mary, mother of God, pray for us sinners...
(END VIDEO CLIP)
HARRIS: Protests over the president's commencement speech at the University of Notre Dame led to 39 arrests yesterday. Authorities say 19 people were arrested Saturday, 21 on Friday.
For his part, the president urged both sides to try to find some shared purpose.
(BEGIN VIDEO CLIP)
OBAMA: So let us work together to reduce the number of women seeking abortions.
(APPLAUSE)
Let's reduce unintended pregnancy.
(APPLAUSE)
Let's make adoption more available.
(APPLAUSE)
Let's provide care and support for women who do carry their children to term.
(APPLAUSE)
(END VIDEO CLIP)
HARRIS: The president received a standing ovation from many in the crowd at the Catholic university. But some graduates boycotted the ceremony. They were upset over the university's decision to invite Mr. Obama because of his support for abortion rights.
Our iReporters are weighing in on the president's comments. CNN.com's iReport Desk producer Tyson Wheatley is with us now with their perspective.
My guess is you received a lot of traffic on this subject.
TYSON WHEATLEY, CNN.COM PRODUCER: Yes, big talker (ph), Tony.
And for those of our viewers who watched the speech, a lot of you know a demonstrator, a protester actually disrupted the speech at one point. But what you may not have seen is some video taken very close to that heckler. And I want to show some video fro you.
This is from a freshman, a Notre Dame freshman. His name is Doug Pernik. He was ushering the commencement when he captured this video.
Let's go ahead and watch it.
(BEGIN VIDEO CLIP)
OBAMA: ... of 2009 for all your accomplishments...
UNIDENTIFIED PROTESTOR: Abortion is murder! You're a...
AUDIENCE: Boo!
UNIDENTIFIED PROTESTOR: You're a baby killer! You're a murderer!
You have blood on your hands! You are a baby killer! You have blood on your hands!
(END VIDEO CLIP)
HARRIS: I'm trying to figure out what he was saying.
WHEATLEY: Well, he said abortion is murder. And then -- you know, what it's interesting about this video is that, obviously a lot of boos, but also a smattering of cheers.
Now the kid who shot this video, Doug, he says he was happy overall that his fellow students showed a lot of respect to the president.
Now, let's go ahead and talk about some of the actual opinions about the speech itself. I want to start here with Adriana Rosa from - I'm sorry, Adriana Maxwell from Marietta, Georgia. She is a Catholic who actually voted for Barack Obama. She says the biggest take away from the speech, however, is that it's OK to disagree.
Let's go ahead and listen to what she has to say.
(BEGIN VIDEO CLIP)
ADRIANA ROSAS, CNN IREPORTER: I really do believe that the reason why this invitation was extended and accepted by Obama and Notre Dame was because they actually wanted to teach us a lesson. I mean, the Catholic Church is forever trying to teach us that and they use any opportunity to do so.
And the first lesson is, treat others as you would want to be treated, with respect. By putting two polar opposite groups in the same room, it was a lesson in how to communicate effectively why you believe what you believe while at the same time, dialing down the rhetoric and the name calling and trying to find common ground that we can agree on.
(END VIDEO CLIP)
WHEATLEY: All right. So, Tony, a lot of calls for common ground. A lot of other people saying that this is a really important issue to go ahead and debate. So, we definitely want to hear what you think about this issue. Go to iReport.com and weigh in on this or many other things in the news to talk about.
HARRIS: OK, I see we've got another one cued up, but I guess we don't have time to hear from that gentleman.
WHEATLEY: Oh, no, we do have time.
HARRIS: We do?
WHEATLEY: I'm sorry. This is from Gerald Dimmitt. You know, what's interesting about Gerald is he's actually has been involved in -- he's been a Catholic educator for most of his life. And he says -- what's interesting here is he says -- he actually disagrees with Obama's stance on abortion, but he says it's time for students to stand on their own when they graduate. Even when their faith is attacked.
Let's listen.
(BEGIN VIDEO CLIP)
GERALD DIMMITT, CNN IREPORTER: It would be an honor for this university for him to have that honorary degree. It doesn't mean we accept his ideas on abortion. Not at all. Def (ph) laud en wrong. But it's what it's about, letting students go and hope that you've done a good job in educating them and their faith will be strong and they will be able to stand on their own.
(END VIDEO CLIP)
WHEATLEY: All right. Great topic for debate.
HARRIS: Yes. All right, Tyson, appreciate it. Thank you.
WHEATLEY: All right, thanks.
HARRIS: And the presentation was interesting, too.
Speaker of the House Nancy Pelosi in hot water. Hearing calls from conservatives to step down.
(COMMERCIAL BREAK)
HARRIS: You know, at the Cannes Film Festival, celebrities walk the red carpet while producers shop for a buyer. Natasha Curry shows us behind the scenes at the film festival.
(BEGIN VIDEOTAPE)
NATASHA CURRY, CNN CORRESPONDENT (voice-over): It's raining, not good for photographers. But for Michael Mendelsohn, it's perfect.
MICHAEL MENDELSOHN, CEO, PATRIOT PICTURES: My father always says, if you want to sell something, do it in the rain. People are focused on buying in the rain.
CURRY: Mendelsohn, an independent producer and financier, is in Cannes to sell movies. He's got three of them here, including the comedy, "All's Fair in Love." He and his partners are screening the film for buyers representing a wide range of markets.
MENDELSOHN: Taiwanese, Chinese, French, Latin American or British.
CURRY (on camera): Industry players like Mendelsohn come to Cannes for something called the film market, which runs at the same time as the festival. Films of every description right here are bought and sold.
(voice-over): Films from across the globe from high brow to low, with titles like, "Tandori Love," "Deathracers," and "Transmorphers" - not to be confused with "Transformers."
Deals can be consummated in the stalls of the film market or in loftier places, like the top of a hotel with the best view in Cannes. That's where I met up with Mendelsohn to check on his progress. The news on "All's fair in love," is positive.
MENDELSOHN: Close to closing $3 million worth of deals.
CURRY: For another of his films, negotiations are ongoing for even bigger figures.
MENDELSOHN: They're in negotiation on about six and a half million in deals.
CURRY: So while the stars grab all the attention, the real business of Cannes proceeds behind the scenes. And while celebrities walk the red carpet, Mendelsohn's shoes hit the pavement as he walks down another deal.
MENDELSOHN: Three movies in one market, that's a lot of walking up and down the clauset (ph).
CURRY: Natasha Curry, Cannes, France.
(END VIDEOTAPE)
HARRIS: And looking to the next hour of CNN NEWSROOM, bricks etched with the names of Chicago's young students, too many dying way too young. Thirty-six in the last school year and parents are asking why. A special report by our special investigative unit.
Plus, an American who fashioned swim fins out of cardboard and swam into an international controversy. Now he and Nobel Peace Prize laureate Unsung Soochi (ph) are in court.
And that Filly flirt, chased by the boys and leaving them in the dirt. But will Rachel Alexandra step up for the next round in the battle of the sexes, the Belmont Stakes?
(COMMERCIAL BREAK)
HARRIS: And we are getting this just in to the CNN NEWSROOM. Boy, listen to this, a student at the Larose-Cut Off Middle School in Lafourche Parish, of course we're talking about Louisiana here, has been hospitalized after trying to shoot a teacher and then, shooting himself in the head.
OK, the mapping will help us orient you here. Apparently, the student tried to shoot a teacher inside the school, but missed. The student then went behind a stairwell and shot himself in the head. This is according to Sergeant Lesley Peters. The school has been locked down and all the other students are accounted for. And no word on the condition of the shooter at this point.
But again, a student at the Larose-Cut Off Middle School, in Lafourche Parish, Louisiana hospitalized after trying to shoot a teacher and then shooting himself in the head. We will continue to follow developments on this story and see if we can learn more on the condition of the young student who was apparently the shooter in this case. And we will update the story for you.
House Minority Leader John Boehner among those republicans putting pressure on House Speaker Nancy Pelosi over the torture issue.
CNN's Jim Acosta has more.
JIM ACOSTA, CNN CORRESPONDENT: Tony, democrats in Washington now understand the dangers of investigating torture allegations during the Bush administration. Republicans have found a way to turn the issue against one of the most powerful democrats in the country, House Speaker Nancy Pelosi.
(BEGIN VIDEOTAPE)
REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: I'm only speaking from my own experience, and we were told that it was not being used. ACOSTA (voice-over): Ever since House Speaker Nancy Pelosi accused the CIA of lying to her about its use of harsh interrogation tactics during the Bush administration...
PELOSI: The CIA was misleading. They mislead us all the time.
ACOSTA: ... republicans have been all too eager to talk about torture.
SEN. MITCH MCCONNELL (R-KY), SENATE MINORITY LEADER: Well, we know there's a dispute about -- between the speaker and the CIA over what she knew and when she knew it.
NEWT GINGRICH, FORMER HOUSE SPEAKER: I don't see how she can serve as speaker if it turns out that she has lied about national security both to the House and to the country.
ACOSTA: Even some democrats worried the speaker misspoke.
JAMES CARVILLE, DEMOCRATIC STRATEGIST: I don't think that democrats really want to be at war with the CIA. I love the speaker. She's a great family lady and everything else. I probably wouldn't have done that.
ACOSTA: Pelosi's comments prompted the CIA to release this document showing she and other members of Congress were notified about the agency's use of extreme methods on suspected terrorists. But one democrat mentioned in the document, Bob Graham, says the CIA's records are wrong.
A leading Republican says Pelosi must prove her case.
REP. JOHN BOEHNER (R-OH), MINORITY LEADER: I think that she ought to either present the evidence or apologize, one or the other.
ACOSTA: But even as republicans are trying to turn the torture tables on democrats, liberals are reaching to turn them back.
KATRINA VANDEN HEUVEL, "THE NATION": The next big controversy is the mounting evidence showing that torture was used to extract evidence to create a link, a false link, between Saddam Hussein and al Qaeda.
ACOSTA: Bush administration critics point to Lawrence Wilkerson, chief of staff of former Secretary of State Colin Powell. On the Web site "The Washington Note," Wilkerson says, "In early 2002, harsh interrogation was not aimed at preempting another terrorist attack on the U.S., but discovering a smoking gun linking Iraq and al Qaeda," a charge Dick Cheney's daughter shot down.
LIZ CHENEY, FORMER DEPUTY ASSISTANT SECRETARY OF STATE FOR NEAR EASTERN AFFAIRS: I think that it's important for us to have all the facts out. This was an important program that saved American lives.
(END VIDEOTAPE) ACOSTA: As for Speaker Pelosi, Republicans acknowledge they don't have the votes to remove her. But all of the finger-pointing is renewing calls on Capitol Hill for an independent truth commission on torture, something the White House says it doesn't want -- Tony.
HARRIS: Boy.
Jim, appreciate it. Thank you.
