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More Mileage, Less Pollution; Home Building Hits New Low; Social Issues Back in Forefront Regarding Supreme Court Nominee; UN Declaring Palestinian Refugee Worse Than Rwanda; Senate Democrats Reject President's Bid For Money to Close Guantanamo; Is Peace in the Middle East on the Horizon?; New Vehicles for Marines in Afghanistan Could Save Lives; Good Bye Old Friend: Hubble to Be Released Today

Aired May 19, 2009 - 11:00   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 Tuesday, the 19th day of May, and here are the top stories for you in the CNN NEWSROOM.

New rules of the road. MPGs up, tailpipe grind down. The president announcing new fuel and pollution standards shortly.

Confirmed swine flu cases closing in on 10,000 worldwide. Doctors in New York try to determine if a toddler is the latest to die.

The U.N. says it may be the worst humanitarian crisis since the Rwandan genocide. More than a million Pakistanis flee the war against the Taliban.

Good morning, everyone. I'm Tony Harris, and you are in the CNN NEWSROOM.

Well, more miles per gallon, less pollution, and a higher sticker price. Next hour, President Obama announces new fuel economy standards for the cars and trucks you'll be driving down the road.

Christine Romans of the CNN Money Team joins us with details of the president's plan.

Christine, good morning to you.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good morning, Tony.

HARRIS: How does all of this shake out?

ROMANS: Well, all this shakes out as the president and his administration are getting tougher on fuel efficiency and doing this four years earlier than many had expected, ramping up the date that we'll have more fuel-efficient cars, and we will have emission one global emission standard for carbon emissions in this country. This is essentially fuel efficiency and tailpipe emissions, Tony, 35.5 miles per gallon by the year 2016. They hope to save 1.8 billion barrels of oil through the year 2016. That's about 86 days worth of supply in this country. It's going to add $600 to the cost of a car, Tony.

That is, by the way, on top of about $700 more to the cost of a car because of standards that have already been passed by Congress. So you're looking at $1,300 extra on the car.

But look at it this way -- eventually, they're hoping you'll recover that cost at the pump, especially if gas prices rise once the economy gets healthy. Frankly, you're looking at about $372 a year in a savings, in gas savings, because of these new standards.

HARRIS: Yes. Hey, Christine, is the auto industry in any position to push back on all this at all given that it's taking so much government help?

ROMANS: No, Tony. And frankly, they're talking with one voice on this.

I think you're going to see the auto industry and the White House together on this today, in part because the auto industry has long said it wants one standard. It doesn't want a bunch of different states and conflicting federal government standards. It wants one standard. So in a way, this gives a great deal of clarity to the auto industry at a time, Tony, frankly, where you know they need clarity to make their plans, to make their assumptions for what this industry is going to look like in the next 10, 20, 30 years in this country.

HARRIS: And isn't the simple truth here that more and more states were likely to go to this more strict standard?

ROMANS: Yes, that's absolutely right. This is ramping up on a little bit quicker pace than some had thought, a national standard for this.

We know California had been at the forefront of this. You're going to see Governor Arnold Schwarzenegger there at this event later today, because California had really been pushing for this. Now you're talking about a federal standard, and the idea here is the clarity of one standard.

And for the first time, tackling two things in one fell swoop. The coordination between all these different agencies is how they're really pushing it.

It's the tailpipe emissions and the fuel economy. It's going to change how much you're paying at the pump. You know, it's going to affect you.

It's going to affect the kind of cars you're driving, what the roads look like. It's going to affect what you're paying, the cost of your car, how much you're paying to drive. This is something that will affect your pocketbook.

HARRIS: Christine, appreciate it. Thank you. ROMANS: Sure.

HARRIS: The new fuel economy standards just the latest move by President Obama affecting the U.S. auto industry. Let's talk about the bigger picture here.

CNN's Jill Dougherty on duty at the White House for us.

And Jill, the president, you know, it occurs to me, is tackling an awful lot here with these proposals. Why does he think he can accomplish all of this now when no one has been able to make much of a dent on the auto industry before?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, I think there's a lot of back story to this. But, I mean, times have changed, because after all, California tried to do this back in 2004, but the prior administration wouldn't allow them to get a waiver to do it.

And the argument at that point was, you shouldn't be making up your own laws out there in California. We should have regulations that affect the entire United States. So, let's not do anything and just keep it the way it is. Now you have a different administration that's saying let's change it, and let's take what California is doing and apply it nationwide.

So, number one, I'd have to say change of administration makes a big difference. But you also have the economic crisis and the predicament that all of these auto companies are in right now, that they can't really dictate the rules anymore. They're being dictated to.

And then the other thing that I think Christine was referring to is, on the good side, the auto industry really does want some predictability, because you can't gear up to build cars just for California, even if it's a huge market. You want to build them for the United States. So you want predictability in the regulations.

HARRIS: Hey, Jill, gas prices are lower than they were last summer, and consumers are going back to bigger vehicles. That's the way it's trending, at least.

So how would these new regulations affect this trend?

DOUGHERTY: Well, the interesting thing about this is these new regulations would affect cars in both of those categories. It would be regular light cars and then light trucks, things like SUVs, et cetera.

So what the administration is arguing is that it would -- you would have efficiencies across the board with different types of cars. So if you wanted to get an SUV, at least it would be a more efficient and less polluting SUV.

HARRIS: All right. Jill Dougherty at the White House for us.

Jill, appreciate it. Thank you. And we will bring you President Obama's announcement on new vehicle mileage and emissions standards live in the NEWSROOM. The president speaks next hour around 12:15 Eastern. That's 9:15 a.m. Pacific.

New housing numbers out today raising fresh concerns that the market may not have hit bottom just yet. Initial construction of homes fell to a record low last month.

Personal Finance Editor Gerri Willis live now from New York.

And Gerri, if you would, run the numbers for us and put them in some kind of context.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: I sure will, Tony. Hi there.

Yes, April housing starts, look at these numbers. They are bad, down 12.8 percent from March of '09, so just the previous month. If you look year to year, it's even worse, down 54.2 percent from April '08.

So these are housing starts. Now let's take a look at the industry's forward-looking indicator.

Tony, you have a housing market, new housing market, that's going to be months from now. It is down 3.3 percent. So the outlook not good when you look at these numbers. These numbers all come from the Commerce Department.

But Tony, I want to drill down just a little bit, and really look at these numbers in detail. And when you do, the story is very, very different.

In fact, take a look at these new constructions. These are April housing starts when we look at the difference between single family homes and multifamily homes.

Single family homes, that's what we're used to talking about in this whole mortgage collapse. That's actually up 2.8 percent. But when it comes to new construction of, say, apartment buildings, multifamily units, that's what's down, and down dramatically.

And when we talk about the housing market on this network, what we're really talking about is single family homes.

HARRIS: Yes, that's true.

WILLIS: So that is a glimmer, Mister. Right there, up 2.8 percent.

Now let's talk briefly about building permits. The story is the same. Single family homes up 3.6 percent, multifamily, the permits for those down 21 percent.

So the real pain here is not necessarily in the individual market for family homes, it's really in multifamily homes.

HARRIS: Got you.

Well, let me follow up with this, Gerri. Really, what does it all mean? When you think about it, new home construction numbers are only just a piece of the big picture when it comes to the housing market.

WILLIS: Yes, you know, I think the thing that gets missed when we talk about these numbers is that new homes, construction, sales, building permits is a small fraction of the total real estate market, and especially even the residential home market. Listen to these numbers.

Some five million existing homes will be sold this year. How many does that compare for new homes? Just 320,000. So you can see very different-sized markets there.

New homes is always smaller, it's always more volatile. It goes way up when the market expands and crashes way down when it contracts. So, interesting to see that we're getting glimmers here in new home construction. I know the headlines haven't said that, but when you really drill down, Tony, that's what you see here.

HARRIS: OK, Gerri. Appreciate it. Thank you.

WILLIS: My pleasure.

HARRIS: CNN's Personal Finance Editor Gerri Willis for us.

You know, one announcement people are eager to hear from President Obama is his Supreme Court nominee. We don't know when that will happen, but a decision is expected sometime soon.

CNN Senior Political Correspondent Candy Crowley reports on the social issues reemerging as Washington awaits the president's pick.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): With a Supreme Court vacancy hanging out there, Washington went into overdrive with news that Michigan Governor Jennifer Granholm is coming to the White House.

UNIDENTIFIED FEMALE: When Governor Granholm comes tomorrow, would she be talking to the president at all about the Supreme Court vacancy?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I think the governor's primary objective in coming is an announcement we'll make tomorrow on a different topic.

UNIDENTIFIED FEMALE: It's going to be a secondary objective? Talking to the president about the Supreme Court?

GIBBS: I'm a -- I feel good about my first answer. CROWLEY: It's a closely watched story because the Supreme Court can and has changed the nation. Brown v. Board of Education set the stage for desegregation. Roe v. Wade legalized abortion.

Barack Obama was 12 when Roe was decided. It's a ruling that still inflames the passionate to protest the commencement address of a pro-abortion rights president at Notre Dame, a premier Catholic school.

Abortion may be settled law, but it remains an unsettling issue and one a president cannot avoid.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: So, let us work together to reduce the number of women seeking abortions. Let's reduce unintended pregnancies.

CROWLEY: Social issues have confounded presidents for decades. And in this new millennium, a new issue conservatives see as central to the Supreme Court.

JORDAN LORENCE, SENIOR COUNCIL, ALLIANCE DEFENSE FUND: I think same-sex marriage is very likely to be the big flash point issue.

CROWLEY: The president opposes same-sex marriage and says states should decide the issue. But many in the gay and lesbian community think eventually that has to change.

STEVE ELMENDORF, DEMOCRATIC STRATEGIST: The more states that approve it, the more the pressure will build on people in Congress and the president to do things to make federal law comply with all these state laws.

CROWLEY: Marriage is only one issue that has some in the gay and lesbian community worried that a campaigner they saw as sympathetic to their causes is less so as president in office. He has not lifted a ban barring HIV-positive foreigners from crossing U.S. borders. And many had hoped there would be a cabinet appointment.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

HARRIS: Rob Marciano has a real mixed bag he is watching for us in the -- we've got your back, Rob. What are you working -- oh, Magic Wall you're working?

ROB MARCIANO, CNN METEOROLOGIST: Yes. I'm not supposed to talk, so don't ask me questions. I'm supposed to play here.

We'll be back with the stuff. It's going to be good.

HARRIS: That's a little something, the back story.

OK. And still to come in the NEWSROOM, America's kidnapping capital. One city has had more than one reported kidnapping every day since 2007. We'll explain, up next, in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: The kidnapping capital of the United States. One city has had more than one reported kidnapping every day. Every day since 2007.

Think about that for a second. What is going on?

John Levs is here to show us.

Josh, what's the story here?

JOSH LEVS, CNN.COM CORRESPONDENT: It's incredible, Tony. It's unbelievable.

HARRIS: Yes. Every day since 2007?

LEVS: Yes, apparently. It's unbelievable.

And we were just talking about this brand new spread at CNN.com. You can see it up here behind me. It's amazing. And I'm about to tell you which city it is and how we learned this. And to do that, we're going to bring in our reporter who is following this for us down there in the CNN.com newsroom, Eliott McLaughlin.

Hey there, Eliott.

Hey. How you doing, pal?

LEVS: Good.

All right. Listen, what I want you to do is talk me through this spread. We're going to zoom in here.

It's fascinating what you show us here. You have several steps about how a kidnapping's happening and why in Phoenix. Talk to us. Why Phoenix and what's going on?

MCLAUGHLIN: Well, Phoenix is a transshipment point for drugs and as well as illegal aliens that have been smuggled over the border. And the drugs and illegal immigrants, they come into Phoenix and they just wait until they're shipped up the coast or back into the Midwest.

LEVS: Yes. And these numbers are astounding.

I want to zoom back in on the border. I want to show everyone the spread and how you can learn about it.

You start off here with this question: Who is kidnapped?

Eliott, who is kidnapped?

MCLAUGHLIN: Well, it appears it's mostly drug traffickers and human smugglers, or coyotes as they say. And it's mostly drug traffickers snatching rivals for retribution or ransom.

LEVS: And this is people believed to be connected in some way to the drug trade.

Now, you talk here about ransoms. You talk about reporting.

We're going to play a piece of sound that you have here under this violence section. And I just want to set this up right and make sure I'm getting this right for me.

You have sound of a telephone call in which some kidnappers have a hostage, and they do what we've seen on TV and movies, they're torturing him to some extent. Right?

MCLAUGHLIN: Right. And his wife's on the other end of the phone. She's listening in and they're making demands, and the police are tapping the phone call.

LEVS: OK. We're going to hear a 10-second sound bite. You're going to hear a scream. It's not blood-curdling. It may be disturbing, folks. If you don't want to hear it, hit mute for 12 seconds. As soon as the graphic goes away, you see us again, the sound's gone.

Let's take a look.

(BEGIN AUDIO CLIP)

UNIDENTIFIED FEMALE: (INAUDIBLE)

(END AUDIO CLIP)

LEVS: All right. There you go.

And Eliott, that was sound that you obtained from the police of what these kidnappers sometimes do.

MCLAUGHLIN: That's correct. And in that case, according to the police, they were actually slicing on his ear to get the cries out of him to convince his wife to send the ransom money.

LEVS: It's disturbing, but it's an important reality. This is going on in our country as a result of these drug cartels.

We also have sound now from an officer, I understand, who is talking about what a huge problem this is. Let's take a look at that.

(BEGIN VIDEO CLIP)

LT. LAURI BURGETT, PHOENIX POLICE: And there's so much money to be made in this that you can't stop it, but you can try to reveal it and then you can try to do something about it. And the problem that you have is, the victims aren't always willing to come forward.

(END VIDEO CLIP)

LEVS: And Eliott, are they coming forward? What are they doing? Is this getting any better?

MCLAUGHLIN: A lot of times, because the victims themselves are involved in some sort of illegal trade, they're not coming forward, and neither are their families, because they don't want to draw that attention to the illegal activity they're involved in.

LEVS: It's amazing.

All right. Really quickly, I think we still have the shot that's really close up here.

There's a chart that you'll see when you go to CNN.com. You can't miss this, it's the main story.

Just watch my finger. Watch me go like this and all the way up. This is the number of kidnappings they've been seeing inside Phoenix.

And you know what? What's really interesting is it's just on these normal streets. It's not what you expect to see.

Here's a clip of Eliott today. Take a look at him. This is part of his report right here.

(BEGIN VIDEO CLIP)

MCLAUGHLIN: He encouraged me to drive through this neighborhood. The reason, he said, is because he thought the recent kidnapping epitomized much of the drug violence that's been making its way over the Mexican border into U.S. cities. As you can see, this is just an average middle class neighborhood. It's quite picturesque, actually.

(END VIDEO CLIP)

LEVS: So Eliott, that looks like any suburb anywhere.

MCLAUGHLIN: That's right. And that was the point he was trying to make, that this wasn't happening in, like, the barrios, or anything. This was just happening in middle class America, right next to average people.

LEVS: And the "he" that we're talking about is a police officer who specifically said go to that corner that you were standing on because that's where there's been drug crime.

MCLAUGHLIN: That's right. Sergeant Tommy Thompson (ph) with the Phoenix Police Department. He has 16 years of drug experience in the city.

LEVS: Well, it's not just affecting people in Phoenix, it's affecting people all over the country. There's a great new map up at CNN.com. Let's go back to that zoom shot.

Check this out, folks. See everywhere there's a mark? Everywhere, whether it's white or red, we're talking about drug cartels affecting those cities. You can click on some of them. You can actually see video that we've gotten from some various cities and pictures that we have that show you some of what's been going on in these areas.

And while we're here, while we're taking a look, there's one more thing that I want to show you.

And Eliott, you can give our viewers a sense of what this is. All of these faces that people can click on, what are we seeing here?

MCLAUGHLIN: That's part of producer Anne O'Neil's (ph) story yesterday. She looks at the cartels and how there's infighting and fighting with the governments, and just how they've come to dominate the drug routes in the United States. And those are some of the most wanted people in Mexico and the United States.

LEVS: It's really -- it's amazing. You can filter it by wanted or by who's been killed, who's been captured.

I encourage everyone to check it out there, CNN.com/crime.

Eliott, thank you so much.

MCLAUGHLIN: Thank you, Josh.

LEVS: Tony.

HARRIS: That is fascinating.

LEVS: It's stunning. It's stunning.

HARRIS: All right. And, OK, so just to direct people, we're going to CNN.com, right?

LEVS: Yes. Now it's the main story. And if you ever want to see the rest, CNN.com/crime.

Right, Eliott?

MCLAUGHLIN: That's right.

LEVS: OK.

HARRIS: Eliott, that's terrific. Thank you.

LEVS: Amazing.

HARRIS: And Josh, appreciate it. Thank you.

LEVS: Thanks.

HARRIS: And we want to hear from you, your thoughts about the Mexican drug cartels infiltrating the United States. Yes, the United States.

Just go to my blog page and send us your thoughts, your concerns, your questions. That's CNN.com/newsroom and click on my big dome. It's there somewhere.

One thousand more people diagnosed in a single day. Swine flu numbers rising fast.

(COMMERCIAL BREAK)

HARRIS: Well, polls indicate the public swine flu fears are decreasing. Even those stats show H1N1 infections are on the rise.

The world's top health officials and the U.N. chief are in Geneva discussing how to deal with the outbreak. Numbers out just this morning confirm swine flu cases jumped more than 1,000 since just yesterday, 9,830 people are now infected in 40 countries, 79 have died.

A toddler in New York could be the latest victim. A hospital in Queens says a 16-month-old boy died suddenly last night with flu symptoms. The CDC must determine if the boy had the deadly H1N1 virus.

The outbreak prompting New York City officials to close four more schools, plus a private school also shutting down temporarily. That brings the total number of schools closed to 17. Officials say they will not reopen for at least a week because of unusually high and sustained numbers of cases of students with flu-like symptoms.

New York Mayor Michael Bloomberg just last hour tried to reassure his city.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (I), NEW YORK: We're New Yorkers, and we're going to pull through this together. But let me stress just once again, whether you have health insurance coverage or your immigration status is in question, it doesn't matter. We will not ask about that.

I don't know and don't care what the immigration status was of the child in question or his parents. The only question that matters is, are you severely ill? And if you are, our hospitals are there to take care of you.

(END VIDEO CLIP)

HARRIS: Well, don't expect a swine flu vaccine anytime soon. The World Health Organization says making one appears more difficult than experts first thought. Pharmaceutical companies now telling the WHO and U.N. that a vaccine will not be ready until mid-July at the earliest. That's because the virus isn't growing very fast in laboratories. Officials had thought production could start late this month.

(WEATHER REPORT)

HARRIS: Inside the war zone. A million people on the move. We will hear what Washington is doing about Pakistan's offensive against the Taliban.

(COMMERCIAL BREAK)

HARRIS: Another housing hit. Home construction plunged last month to a record low, but there are some signs of hope.

Susan Lisovicz is at the New York Stock Exchange with details.

Good to see you, Susan.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Good to see you, Tony.

The headline says, well, that, you know, maybe we should reconsider the euphoria that was experienced on Wall Street yesterday that had to do with signs of life in the housing sector. The headlines are that housing starts and building permits hit record lows in April when Wall Street expected both to rise.

The big problem, Tony, was multifamily construction, which plunged nearly 50 percent -- condos, apartments, there are a lot of them. And commercial real estate right now, as we've been talking about, really taking a hit.

But if you go beyond those headlines, on the upside, single family home construction rose by nearly three percent. And that is the core of the housing market when it comes to new construction. So that is a good thing.

And I suppose if you want to look at, like, really getting out of this mess, the cutback in home construction is helping to ease the inventory glut. We have too many homes on the market. In March, the latest read that we have is that there was a nearly 11 month supply of new homes available for sale.

That is big, that is bad, but it is better than what we saw in January when we had a 12 1/2 month supply. Really for a healthy market you need it to be half that. So we've got to work our way down, one way or another.

How is the market reacting? Kind of with a yawn right now. We opened slightly to the downside after the big rally we saw yesterday. The Nasdaq is flat, I mean, you know, not much going on. That is better than some of the alternatives we could see.

HARRIS: Hey, Susan, back to housing for a second. You know, homes have never been so affordable, at least in my memory. Mortgages have never been so inexpensive to come by. What will it -- that sounds like a good combination to me, but what will it take beyond that, I guess, to bring buyers to realtors' offices and get some homes sold?

LISOVICZ: Well, I mean, you know, we'll need jobs, I guess.

HARRIS: Yes. LISOVICZ: That will be one word. It's still tough if you want to buy a home, but you need to sell your home. And that's a position that most Americans have. I mean, they can't necessarily swing two mortgages. So, you know, you've got that.

Mortgages are cheap. You're right, 30-year fixed under five percent, that is sweet. But they're still not readily available. There were those days, you know, Tony, when all you had to do is breathe and you got a mortgage. Those days are gone.

So, you need this confidence. People are still losing their jobs or afraid they will.

And a case in point today, American Express cutting an additional 4,000 jobs or six percent of its workforce. Part of like many, many companies trying to cut costs and seeing problems with people paying -- not only customers, but also small businesses repaying their bills. A lot of customers are concentrated in California and Florida and that's where we see a lot of housing problems, Tony.

HARRIS: Yep, absolutely. All right, Susan, appreciate. Thank you.

LISOVICZ: You're welcome.

HARRIS: Inside the war zone now. The United Nations says it could be the worst humanitarian crisis since Rwanda. Right now, nearly one and half million Pakistani refugees are escaping that country's war zone. The flooding into sweltering relief camps or moving in with relatives.

To give you some idea of what that means, it would be like the entire population of Phoenix, Arizona, packing up and looking for a place to stay. That exodus is all about civilian survival as Pakistan tries to uproot Taliban militants bunkered inside the country's Swat district.

Let's check in once again with Ivan Watson in Islamabad.

And Ivan, the refugee crisis certainly continues to grow. Does this look like it could potentially be a potentially explosive problem for Pakistan?

IVAN WATSON, CNN CORRESPONDENT: Absolutely. I mean, you've got a million and a half people, Tony, displaced in just under three weeks. That's the worst refugee crisis in Pakistan's history, since it was created in 1947.

And I don't know if you can tell, there's a big rainstorm right now. So people who are living in camps with mud fields, you can just imagine what that's doing to the areas where they're living.

And these people, Tony, they will not have jobs. Many of them are farmers, they're far from their fields, it was the harvest season. No jobs, no homes, no future. They don't know when they get to go back home. It can be very destabilizing for this country. And the United Nations high commissioner for refugees, he said that that refugee crisis could be even more dangerous for Pakistan than the fighting itself, Tony.

HARRIS: But Ivan, we've got a situation where we have this huge humanitarian crisis on one hand, but I'm wondering about what kind of support the government is getting from the rest of the population in Pakistan for this fight against the Taliban.

WATSON: After being caught rather flat footed last month by the Taliban's land grabs to the northwest of here, Tony, now the Pakistani government is pushing hard to try to gather more support. They've been gathering opposition political parties and they've been gathering Muslim clerics together who have been making public statements denouncing the Taliban's tactic, denouncing suicide bombing, denouncing the beheading tactics that the Taliban often used against their opponents and critics.

HARRIS: CNN's Ivan Watson for us. Ivan, appreciate it. Thank you.

And across the Pakistan border, U.S. troops are engaged in similar battles taking place in the rugged regions of Afghanistan. Like in Iraq, roadside bombs are a deadly fact of life there.

Our Pentagon correspondent Barbara Starr reports the military is working on a solution.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): In southern Afghanistan's rough terrain, improvised explosive devices, IEDs, are the number one threats facing the Marines.

Marine Commandant General James Conway has a plan to make sure his troops can fight across this rugged region.

GEN. JAMES CONWAY, COMMANDANT, U.S. MARINE CORPS: We are upgrading our armored defensive capability in the country. We have recently, I think, had a breakthrough that I feel pretty good about.

STARR: Conway is taking bomb-resistant vehicles, called MRAPs, which worked on Iraq's paved roads and overhauling them so Marines here can go off road.

CONWAY: We have a couple of thousand MRAPs that were used in Iraq. Those vehicles weren't very able to go off road, but we have since put our engineers to work.

STARR: Here at the Aberdeen Proving Ground, the Marines are testing a new suspension system. The key? Coil springs allow the 50,000-pound vehicle to better absorb shock and bounce rather than hit rocks and break down.

(on camera): But the MRAPs with the independent suspension aren't the final word. The Pentagon's also developing a new generation of smaller, lighter armored vehicles to maneuver in Afghanistan's rugged terrain.

UNIDENTIFIED FEMALE: Unlike the weight of the MRAP in Afghanistan, it's a lighter version of it and more it's maneuverable, more protective. Can go over the IEDs.

STARR: Four manufacturers are vying for $2 billion in contracts to build this next generation of armored vehicles. Just one indicator that U.S. troops may be in that rough terrain for years to come.

(on camera): General Conway says his plan to overhaul the MRAPs from Iraq is really now the best way to keep Marines safe as they fight the Taliban in Afghanistan.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

HARRIS: And our senior congressional correspondent Dana Bash is joining us now with some news of a developing story on Capitol Hill.

Dana, what do you have for us?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, CNN has learned, Tony, that Senate democrats have decided that they are not going to give President Obama the $80 million that he has asked for to close Guantanamo Bay. And what this means is that Senate democrats are now doing what House democrats did last week, which is to say, you know what, Mr. President, if you want this money, this $80 million, you are going to have to present a plan, which he does not have yet, on what he will do with the detainees who are currently at Guantanamo Bay.

Now this was decided this morning by Senate democratic leaders who were going back and forth about whether to pass this money. But it was decided, because this has become a huge political hot potato, as you know, Tony. And democratic sources told us that they simply understand that republicans are trying to use this as a wedge against democrats. They don't want to let that happen.

But the other thing is that privately, apparently, there are some Senate democrats who are not very happy that the administration, you know, basically let this political story and political issue get out of hand by announcing that they are going to close Guantanamo Bay, ask Congress for this $80 million, and not have a specific plan on what to do with those detainees.

So that is an interesting development here. Bottom line is the president is not going to get the money he asked for to close Guantanamo Bay, not from democrats, not until he has a plan.

HARRIS: And Dana, when the question is asked what to do, what will be done with these detainees, it really comes down to a question of how will they be tried? Doesn't it?

BASH: It exactly comes down that. How they will be tried and where they will be tried. And that is something that republicans are stoking big time here, Tony.

I got an e-mail from the republican committee, the republican leadership here in the Senate. And the subject line was, "Do you want Khalid Sheikh Mohammed as your neighbor?" And this was specifically to reporters, putting out this idea that they are pushing over and over again. Basically stoking this around the country saying that most people, when they put it like that, are going to say, wait a minute, let's keep these detainees, these prisoners at Guantanamo. Why do we want people like that in our backyards?

So the whole question of where they're going to be detained, where they're going to be imprisoned, and as you said, much more importantly, where they're going to be tried has become a big issue. And it really has become a legitimate debate in many communities around the country.

HARRIS: Well, but Dana, the president announced just last week is that he is going to bring back the idea of the military commissions. And that's one part of the puzzle, isn't it?

BASH: It could be. It could be. I think the details of that are still to be worked out. We're waiting to hear from the White House. It could be part of the puzzle. But we just don't know because it is still a big question mark what is going to happen if and when they do -- I should say when they do decide to close Guantanamo Bay.

But politically, democrats have made that decision that this is not the fight that they want right now. Republicans are making hay and in many ways possibly or at least apparently, according to this decision, somewhat successfully. And one democratic source says republicans see this as an opportunity to use as a wedge against democrats, and we're not going to let that happen right now.

HARRIS: OK, our senior congressional correspondent Dana Bash for us.

Dana, appreciate it. Thank you.

BASH: Thanks, Tony.

We'll take a break. More CNN NEWSROOM in just a moment.

(COMMERCIAL BREAK)

HARRIS: The faces of the big story right now, President Obama and Israeli Prime Minister Benjamin Netanyahu. The two leaders tackling the thorny issue of Middle East peace. On the table, Israeli settlement building on Palestinian land, a two-state solution, and Iran, which Mr. Netanyahu views as the biggest threat to peace in the region.

Let's get right to the issues. Our Paula Hancocks joining me live from Jerusalem.

And Paula, why nothing from the prime minister on the president's call yesterday for an end to all settlement activity?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Tony, you know, that's the real sticking point over here. Mr. Netanyahu has consistently said that he wants natural growth in settlements. Which means if a family moves in or if a family had a baby, then they need another house, then that is natural growth.

But the fact is, the Palestinians say that is increasing on settlements. And consistently over the years, they have called for the settlements to be stopped cause this is land that the Palestinians are going to want for a future Palestinian state, which Mr. Obama is being very vocal for in his support for.

And an interesting thing, the day that day that Netanyahu went to meet Mr. Obama yesterday, there was actually work starting on a new settlement in the West Bank. It used to be a military outpost and the bulldozers rolled in as Mr. Netanyahu was sitting down with Mr. Obama.

HARRIS: Wow. Paula, what must Israel be thinking as it hears the president of the United States call for an end to settlement activity?

HANCOCKS: Well, there was one Israeli newspaper headline today, which really sums up what many Israelis think happened yesterday. And it was, "We Agreed to Disagree."

Certainly, we've heard Mr. Obama saying there has to be a freeze on settlements. This is not new. This has been coming from the previous administration as well. This is what was decided in the Annapolis Summit in November of 2007. And yet, these settlements are continuing to grow.

And it is a huge problem. This is one of the sticking points. But what Mr. Netanyahu was trying to do was say Iran was the number one issue, not only for Israel, not only for the Middle East, but for the whole world, trying to take attention away from this.

HARRIS: A couple of other quick ones here. Much has is being made here about the body language exhibited by the two men. No big smiles, no handshakes for the cameras, anyway. And the general sternness of those on camera moments. Is there the same kind of analysis going on in Israel?

HANCOCKS: Pretty much. There's a lot of columnists talking about how different this meeting was to the first meeting between the two. Of course, that was a year ago when neither one of them had the weight of solving the Middle East conflict on their shoulders and there was a lot of smiles and laughter in that meeting.

But also, they're making a lot out of the fact that this meeting went on longer than it was supposed to. So Israeli media's hoping that maybe that means something. That there is seriousness on both sides to actually try to crack this this time.

HARRIS: And Paula, one final one. What is the thinking in Israel? Will there be some kind of joint Israeli-U.S.-Palestinian statement outlining a plan? Maybe a timetable for the resumption of talks before the president heads to the Middle East next month?

HANCOCKS: Well, no one's holding their breath at this point. We know that the President Mahmoud Abbas, the Palestinian president, is heading to see Mr. Obama next week. And he's actually got a new government being sworn in at this moment. So all this has to happen before the three sides can decide when to start the negotiations again. Mr. Netanyahu has put provisos on agreeing to a two-state solution, agreeing to stop the settlements.

And so really the Palestinians were saying these are agreements made already in the Annapolis summit. They're going backwards. They really believe that Mr. Netanyahu's taken them a couple of steps backwards. So, until Mr. Abbas meets Mr. Obama, we really don't know.

HARRIS: OK, CNN's Paula Hancocks for us live from Jerusalem. Paula, appreciate it. Thank you.

We'll check in once again with Rob Marciano in the Severe Weather Center. You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: With GM and Chrysler closing 3,400 dealerships, here's the obvious question: Have showrooms become dinosaurs in this age of the Internet?

CNN's Jim Acosta takes a look.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN CORRESPONDENT (voice-over): Don't judge your car dealership by the sign on the side of the road.

DOTTIE FITZGERALD, FITZGERALD AUTO MALLS: That's a customer. That's a customer.

ACOSTA (on camera): And why would you put your customers' pictures?

D. FITZGERALD: Because they're family.

ACOSTA: Because they're like family.

D. FITZGERALD: They're like family. They've helped us build this business.

ACOSTA (voice-over): Dealership owner Jack Fitzgerald and his sister Dottie say judge them by the pictures lining the walls inside the showroom - generations of satisfied customers. Chrysler is pulling out of Fitzgerald's dealership as part of the carmaker's plans to shut down showrooms across the country.

Fitzgerald's response? Good riddance.

JACK FITZGERALD, FITZGERALD AUTO MALLS: We're not like Detroit. We don't live in an insulated world all by ourselves with the government taking care of us. We have to earn our way.

Government doesn't give me any money. It doesn't do anything for me, except it looks like they're trying to put me out of business with these insane people from Detroit.

ACOSTA: But some industry analysts wonder if the dealership model of doing business has become a lot like the cars out of Detroit, outdated. Contrast that with the array of online auto buying sites.

PETER VALDES-DAPENA, AUTO INDUSTRY WRITER, CNN MONEY: You suggest a price and the salesman says, wait, let me talk to my manager and he's gone for 20 minutes. You know, that whole haggling process, people hate it. And online interaction could be actually a very good way of getting around that.

CHIP PERRY, CEO, AUTOTRADER.COM: And I'd say about half the dealers in America are doing that pretty well and half are still kind of in the starting blocks really with a lot of improvement yet to go ahead of them.

ACOSTA: Autotrader.com CEO Chip Perry says dealers have to gear themselves toward online shoppers who find their price before entering the showroom. Still, he believes most car sales are too complicated to handle solely online.

PERRY: We don't think that it's going to be a "click-here-and- buy-now" phenomenon anytime soon.

J. FITZGERALD: People don't buy cars without seeing them and touching them and feeling them and driving them, and getting excited over them.

ACOSTA: After 43 years in the business, Jack Fitzgerald says it's about treating his customers right. A lesson he says Detroit hasn't learned.

(on camera): Three of the four brands that you sell at this dealership are foreign made.

J. FITZGERALD: Well, that's because that's what my customers want. I keep telling you that. I don't tell the customers what to do. The customers tell me what to do.

ACOSTA: Laws in most states prevent purchasers from buying cars from manufacturers online so dealers are still in the driver's seat, if they can ever get out of reverse.

Jim Acosta, CNN, Washington.

(END VIDEOTAPE)

HARRIS: A little fast forward now with Rob Marciano in the Severe Weather Center.

(WEATHER REPORT) HARRIS: New rules of the road. One of the top stories we're working on for the next hour of CNN NEWSROOM, President Obama set to announce stricter standards for vehicle emissions and mileage. We will have his announcement live and we will talk with our car industry panel about what it all means. Is this the end of the road for the SUV?

And students with special needs put in restraints or left in seclusion. A disturbing report says students are being abused in the nation's public schools. Abbie Boudreau of our Special Investigations Unit has one family's story.

(COMMERCIAL BREAK)

HARRIS: Well, good-bye old friend. The restored Hubble Telescope is on its own this morning on a brand new voyage of discovery. And our John Zarrella reports the Atlantis astronauts cleaning up now.

(BEGIN VIDEOTAPE)

JOHN GRUNSFELD, ASTRONAUT, ATLANTIS SPACE SHUTTLE: Can you bring me a little more forward, Megan?

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Astronaut John Grunsfeld pulled off some aluminum foil-like insulation from the Hubble telescope and stuck it in his space trash bag, replacing it with a hardened thermal shell.

ANDREW FEUSTEL, ASTRONAUT, ATLANTIS SPACE SHUTTLE: We're going right over Houston.

UNIDENTIFIED ASTRONAUT: That's right, Drew. Wave.

ZARRELLA: It was the last dance in an aerial ballet that played out over five days and five spacewalks some 350 miles above the Earth. Grunsfeld and fellow space mechanic Andrew Feustel changed out old Hubble batteries, replaced a sensor and peeled off crumbling insulation, some of it 19 years old and so deteriorated it simply fell apart and floated off.

GRUNSFELD: How's it look from the cabin?

UNIDENTIFIED MALE: Yes, we're just seeing a lot of pieces, John.

GRUNSFELD: Yes, OK, stop there, Megan.

ZARRELLA: During the five grueling spacewalks, the two two-man astronaut teams replaced and fixed telescope cameras, changed out gyroscopes, installed a new computer. Many of the parts were never intended to be replaced.

GRUNSFELD: Go straight on.

UNIDENTIFIED MALE: OK.

GRUNSFELD: (INAUDIBLE)

UNIDENTIFIED MALE: OK, standby.

ZARRELLA: On a couple of occasions, stuck bolts put the astronaut teams behind schedule, but by the end of this last repair day, they completed all the work. Grunsfeld took a few minutes to snap pictures for the Hubble scrapbook before packing up their tools. Then the astronauts, Grunsfeld went first, had some final thoughts.

GRUNSFELD: Hubble isn't just a satellite. It's about humanity's quest for knowledge.

ZARRELLA: For Grunsfeld, on his third mission to the telescope, Hubble is like an old friend.

GRUNSFELD: It's impossible not to give it human characteristics and feel sadness when we see it floating away.

ZARRELLA: That will happen Tuesday morning when Atlantis releases Hubble from the cargo bay.

John Zarrella, CNN, Miami.

(END VIDEOTAPE)