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Gas Prices Inching Higher; Obama Administration Likely Pushing GM Into Bankruptcy Next Week; President Obama to Sign Credit Card Protections Into Law; Rochester Rough Streets

Aired May 22, 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 Friday, May 22nd, and you're heading into the long Memorial Day Weekend.

Here are the top stories we're following for you in the CNN NEWSROOM.

Gas is up, sure it is, just in time for summer vacation. But, hey, a tank is a lot cheaper than it was this time last year.

Philadelphia, Mississippi, indelibly linked to notorious Klan killings of the civil rights era. Now the majority white city elects its first black mayor.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I cry because where I live. I am a (INAUDIBLE) who survived the streets of Rochester (ph).

UNIDENTIFIED MALE: I pretend to ride a motorcycle to get away.

(END VIDEO CLIP)

HARRIS: Boy, a fourth grade writing assignment, a revealing look at a child's life in a crime-ridden neighborhood.

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

Let's see here. From the credit cards in your wallet to the car you may be driving on your holiday getaway to the price of filling up your tank, we are covering several stories this hour affecting your finances and the nation's economy.

New credit card protections. And when will they actually take effect?

Will the next chapter in the GM saga be Chapter 11?

The latest government effort to help you get a car loan.

And gas prices, yes, inching higher. So, here we go.

The summer travel season revving up this Memorial Day Weekend, and Americans are on the go in greater numbers than last year. How about this painful flashback? Gas was closing in on $4 a gallon then.

AAA predicts 32 million Americans are hitting the road this weekend, up a bit from last year. AAA also says you're paying an average of $2.39 a gallon for regular unleaded. Gas up around 30 cents a gallon this month alone.

So let's get the bottom line with your personal finance editor, Gerri Willis.

Gerri, good to see you.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey there, Tony.

HARRIS: Let's start with this: Where is the cheapest gas on the road?

WILLIS: Well, great question. Hi there, Tony.

Prices usually go up over the holidays and during the summer. The question is, by how much? To find the averages in your area, go to FuelGaugeReport.com. Now, Tony, GasBuddy.com and GasMob.com will text message you with the lowest prices in your area so you can compare prices from the road -- Tony.

HARRIS: Well, Gerri, what about travel conditions? What do I do if I'm trying to avoid congestion and traffic jams?

WILLIS: Well, there are a lot of great Web sites that can help with that. First off, AAA.com will generate a free trip tip. Click on "Trip Tick Planner," which is to say, travel directions that show you the historic bottlenecks on your route. Now, you use its route modification tool, you can design a route around the mess.

Also, check out the Federal Highway Administration's Web site. That's FHWA.gov to find conditions along your routes, including commuter forecasts and where the tie-ups are.

Now, look at this site. You can also hook up to live traffic cams to see what's going on.

And finally, to get an estimate of your total gas costs on your trip, go to gasprices.mapquest.com. Click on the gas price calculator. You'll need to know your car's fuel efficiency to actually get the number, but it's pretty easy to do -- Tony.

HARRIS: Yes. And Gerri, what can I do overall to save money on the road?

WILLIS: A couple of easy things here.

Switch to synthetic motor oil, if you aren't already using it. It costs a little more than regular oil, but your engine will be more efficient and, therefore, use less gas.

Also, check your gas cap. About 17 percent of cars on the road have caps that are damaged or loose or even missing. That causes gas to vaporize. Some 147 million gallons of gas are estimated to be lost each year right into thin air.

Finally, if all of this is too much for you, book a train. Amtrak is reducing fares for Northeast Corridor travel for the summer. And they've got some good deals -- Tony.

HARRIS: Yes. All right, Gerri. Appreciate it. See you a little later this hour. Thank you.

WILLIS: My pleasure.

HARRIS: You know, it has looked almost certain for months now. Sources telling CNN the Obama administration is likely to push GM into bankruptcy next week.

Christine Romans, part of the CNN Money team, in New York for us.

Good Friday to you, Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Hi, Tony.

HARRIS: Let's see, Chapter 11, here's the question -- is it the quickest, maybe the easiest way to remake GM?

ROMANS: There is no quick, easy, or cheap way to remake GM. I think we all know that. This is something that some people have been calling for even a year ago.

HARRIS: That's right.

ROMANS: And there was such resistance to getting here. It would be catastrophic for the American labor market and for the auto industry if this happened. Now you already have Chrysler operating under Chapter 11, and it looks as though an imminent filing from GM is just, I mean, inescapable. I mean, I guess there's a chance that they could try to work something out outside of bankruptcy, but all of the people who cover this story and all of the people who have been watching this story, and the insiders, all are saying that all the work that's being done is to make bankruptcy a little bit easier.

You know, the president goes away on a trip to Cairo I think June 4th. The deadline for GM is June 1st. You know, ,if you had a bankruptcy filing in the beginning of June for GM, look, we used to say as goes GM, so goes the nation.

HARRIS: That's right.

ROMANS: I don't think you can have the president out of the country when something like that happens. I think that that's why you might see something as early as next week.

We've already seen a fresh bailout for the finance arm, GMAC, another $7.5 billion. The Treasury did that quite quickly. Now GM has reached a deal with its union. It has not reached a deal with its debt holders, those $27 billion in debt that are owned by investors who would like to see more than a few pennies on the dollar for their investment. There's still a lot to be worked out and it might have to happen in bankruptcy -- Tony.

HARRIS: When you boil this down, the real reasons for -- in this, sort of the 11th hour here, for this bankruptcy filing, if it comes to that, are we talking about no deal with the bondholders here? And are we also just talking about just this massive cash burn that GM goes through every month?

ROMANS: It's just incredible the cash burn they go through. Yes, I mean, I think it's all of the above.

And I think that you have people -- people aren't buying cars like they used to. I mean, there's a global economic crisis and there was an American automaker crisis even before this.

Look, there are almost 500,000 GM retirees in this country. All of us out there who are driving GM cars, I want you to know that your warranty is backed by the government. The government has said during this period of restructuring it would honor the warranties of these cars. So, if you're driving a GM car, don't worry about that.

That infusion of money into the GMAC is meant to help you to make sure there's the financing and the lending so you can buy one of these cars if you want to, even if it is in this period of restructuring and potential bankruptcy. So, if you want to buy a car, you don't have to worry about that.

If you're a retiree, you know, the UAW and the company, they're all trying to work out what kind of labor cuts to have, but we do guarantee pensions in this country. So that's something to -- I mean, there's just an awful lot out there to has to do with this. Then there's the dealers, the suppliers, the towns that these companies are in.

You know, I keep going back to this, Tony. When I first started covering business, every time a GM earnings report came out, the first thing you would say is, as goes GM, so goes the country. This was an example of the American industrial powerhouse. It built the American middle class, at least the symbolism of what's happening here really makes people stop and think.

HARRIS: It absolutely did build the American middle class in this country.

ROMANS: It did.

HARRIS: You're so -- I'm glad you remind folks of that.

Christine, good to see you. Thank you.

ROMANS: Have a good weekend, Tony.

HARRIS: Yes, you too. You too.

We will look at what a GM bankruptcy would mean for President Obama and for the automakers' 244,000 employees. That comes your way in just a couple of minutes, when we go live to CNN Senior White House Correspondent Ed Henry on his radio show. It is called "44 With Ed Henry."

The Obama administration is also trying to help GM's main lender, GMAC, as Christine just mentioned a moment ago. The Treasury Department is giving the company $7.5 billion. The plan is for GMAC to be the main source of car loans for GM and Chrysler buyers. Officials say it would help stabilize the auto financing market, which should help the economy.

Our Stephanie Elam joins me live at the bottom of the hour with more on that part of the story.

And just a few hours from now, President Obama signs new credit card protections into law. The rules won't take effect for several months, but they will make it harder for credit card companies to raise your interest rates.

Jill Dougherty live from the White House.

And Jill, if you would, break out this bill which becomes law in just a couple of hours.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Tony, you know, it's being done fast, the signing. The president wasting no time, because after all, there was a lot of bipartisan support and there was a lot of concern by consumers about, you know, rising interest rates, soaring interest rates, and hidden fees and things like that. So the political weight was, let's get this done.

So how does it work? Well, there are a number of different things that it will change, but here are the top three.

Credit card companies, for example, have to give a 45-day notice of changes in rates and contract changes. Also, credit card companies can't increase the APR, the rate, in the first 12 months after opening the account. And then, also, promotional rates, you know, the things that come in, like, one percent, and then immediately rise, those promotional rates would have to be in effect for at least six months.

Now, the only thing is that some consumer advocates are saying, well, those companies have to make their money some place. And it's likely that it will be harder to get credit, and that also they could raise the interest rates.

HARRIS: Hey, Jill, will the president make mention of the gun provision he'll be signing into law along with this credit card bill?

DOUGHERTY: You know, I would kind of doubt that, although we'll have to see. But that's something that a lot of people -- the gun control advocates are very angry about, although it had nothing to do with this credit card bill, it was put in there. And the senators and congressmen who wanted to get this consumer protection done very quickly were ready to accept it, even though some didn't agree with it. And it allows people who have permits to carry guns in national parks.

HARRIS: Yes. Our Foreign Affairs Correspondent Jill Dougherty doing a nice job for us from the White House.

Jill, appreciate it. Thank you.

Have you heard the dire warnings from the credit card companies about the reform bill the president signs today? They seem to be saying, oh, yes? Well, we're really going to get you now.

The companies say the changes could ultimately lead to higher rates and fees, even if you pay on time.

Those warnings were a hot topic of discussion on CNN's "Anderson Cooper 360."

(BEGIN VIDEO CLIP)

ANDERSON COOPER, HOST, "AC 360": I've heard that banks may start charging interest immediately on a purchase instead of allowing a grace period.

ED MIERZWINSKI, SENIOR FELLOW, CONSUMER PROGRAM: First of all, Anderson, everything thee banks are saying is based on the fact that they have been cheating their customers for the last five or 10 years. The Federal Reserve, the House, the Senate and the president have all said no longer can you cheat your customers.

I don't see the banks saying no more grace period on their best customers. People will stop using credit cards.

COOPER: So you think they're bluffing, basically?

MIERZWINSKI: Absolutely a bluff, and it's somewhat sour grapes. The banks have owned the Congress for 20 years. This is the first time we've won a bill.

It's because they brought it on themselves. And they didn't just raise the fees on high-risk customers, they tricked good customers into paying late. That's what's going to be illegal.

COOPER: Peter, do you agree with that? Do you think the banks are kind of, well, not telling the truth here?

PETER MORICI, ECONOMIST: Oh, I think that they are not telling the truth at all. The whole notion that they need to charge ordinary folks who pay on time more implies either that the -- they've been basically subsidizing ordinary folks with the very high rates and fees they charge, people who fall behind quite a bit, or they're just bluffing.

There may be something else going on here, actually. You know, the banks are really in a lot of trouble. They're looking for ways to raise money. All of them saying this at the same time in public. It looks a little bit like price fixing to me. It's like all the airlines discussing raising their rates at the same time. In the end of the day, though, I think what will happen is, if they try this, there are 8,000 banks in the country. A few will peel off and start offering the good customers a separate deal, and they'll kind of segregate the business so that different credit card companies will cover people with different levels of credit.

COOPER: It's interesting, Ed, though, because you hear from credit card companies saying, well, look, we don't make money on people with good credit. You know, that people are paying their bills, they're not paying any interest, they're paying on time. We're not making the money off of them and we've got to make our money somewhere.

MIERZWINSKI: Well, my answer to that, Anderson, is, if they weren't making money on them, why did they give them the biggest and the most rewards? They're making money every time somebody using a credit card or a debit card on fees from merchants. And when they make harder to pay your bill on time and they raise your interest rate for being one minute late, they're making money hand over fist.

They're making bad money instead of good money, and that's why the Credit Cardholders' Bill of Rights is going to become the law of the land. They'll be forced to change their business model into one that's based on fairness rather than "gotcha" fees.

(END VIDEO CLIP)

HARRIS: Love that bitter perspective on "AC 360," weeknights at 10:00 p.m. Eastern Time, right here on CNN.

The financial services industry, for its part, says the bill could worsen the nation's credit crisis.

Does a parent have the right to refuse what's considered the best treatment for their sick child? That is the debate centered around a Minnesota family's decision against chemotherapy for their 13-year-old son.

We want to hear from you. Does this amount to law enforcement and the courts mandating treatment? Do they have the right to do so?

Visit my blog, CNN.com/newsroom, and share your thoughts with us.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

HARRIS: You know, it is one of the top stories we're following for you this morning. Sources tell CNN GM bankruptcy could happen next week ahead of the government's June 1st deadline for the company to restructure.

How about this treat? Senior White House Correspondent Ed Henry is on CNN Radio today. There he is. Doctor, good to see you.

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Good morning, Dr. Harris.

HARRIS: Hey, Ed, let me ask you something. What are you hearing from your listeners? And remind me not to let you go before we give the numbers so folks can call you.

HENRY: Yes.

HARRIS: What are you hearing from the listeners about all of this talk today, a lot of it from your reporting that, you know, look, GM is likely to see bankruptcy, the filing coming next week, maybe?

HENRY: Folks calling in on two things, calling in on the Obama- Cheney showdown from yesterday, then also on General Motors, obviously.

What I'm hearing from senior Obama officials, what we reported last night, is they're saying it's likely there'll be a bankruptcy as early as next week for General Motors, but they're stressing that President Obama has not made a final decision yet. There are some reports out there suggesting this is a done deal. Being told by very senior Obama officials that's not true, the president is still weighing this.

This is a big deal. I mean, I think back to the White House Correspondents' Dinner where the president sort of joked about this whole situation by saying "'Car and Driver' magazine has just named me Auto Executive of the Year. I worked pretty hard at that."

He was trying to make light of what is obviously a very difficult, painful decision for him. And this is an agonizing one because, as "The Washington Post" is reporting this morning, this could be about another $30 billion in federal loans. That would put the total bailout tab to something like $45 billion of our viewers', our listeners' money is going to try to save this American icon. Add that to the Chrysler bankruptcy, two of the big three could be in bankruptcy within a week here -- Tony.

HARRIS: Hey, do you really get the sense from the folks you talk to within the White House walls there that the president really does not -- is not comfortable with this idea that he is so involved -- this government is so involved in a private sector industry in this way?

HENRY: They insist that he is uncomfortable with that prospect, but that he has essentially no other choice. That he wants to make sure these auto companies don't fail on their own. That if there's some way for the American taxpayer to save them, save some of those jobs, the health care benefits that people have, he wants to do everything in his power to try to save it.

Let's remember that the auto bailout started at the tail end of the Bush administration, certainly continued and accelerated during the Obama administration. But they consider this another part of the difficult challenges they inherited, and that there are no easy choices in this, just as the president said there's no easy choices yesterday in terms of dealing with the battle against terrorism.

People can join us at 1-877-266-4189. We're also getting a lot of response this morning on Twitter. My account is EdHenryCNN, all one word.

A lot of people writing in there, less on GM, more on the Obama/Cheney...

HARRIS: What are they saying?

(CROSSTALK)

HENRY: What's interesting is a couple folks were just telling me -- I'll sort of summarize it. Several people actually wrote in and say -- because I wrote a question on Twitter -- "Who won, Obama or Cheney?" Very simply, several people wrote in and said the media.

They say, look, you know, this is obviously fueling this debate across the country. Beyond just the back-and-forth in the media though, I think, there's very clearly some substantive issues here about which side can keep the country safer. And that's a good thing, that's a healthy thing for the country right now, obviously, to have this debate.

HARRIS: Wow. All right.

Our Senior White House Correspondent Ed Henry.

Ed, as always, come on. Whenever you do that radio program, just give us a shout-out. We want you on.

HENRY: Thanks a lot, Dr. Harris.

HARRIS: We want you on.

Have a great weekend.

HENRY: Thank you. Take care. Good weekend.

HARRIS: Yes, you too, man.

He was down on his luck, but he didn't give up. A little inspiration got him off the streets, and now he is helping others who served their country. We will introduce you to this Army veteran as a CNN Hero.

(COMMERCIAL BREAK)

HARRIS: You know, all Memorial Day Weekend, CNN is bringing you inspiring stories of veterans making a difference. Today's CNN Hero isn't just helping vets, he is fighting a statistic. Boy. One in three homeless adults in the United States is a veteran. Roy Foster used to be one of them. Today he is tackling that problem on the front line.

CNN's Casey Wian has his story.

(BEGIN VIDEOTAPE)

ROY FOSTER, COMMUNITY CRUSADER: I actually joined the Army right out of high school. I became introduced to alcohol once I was out. It was just simply drinking and drugging, and I would then stay in the streets.

I was looking for a safe haven. The places that I was introduced to were no better than on the streets. It was humiliating. That's when the commitment in my heart, it was born.

How can I turn my back and walk away and leave you right here?

UNIDENTIFIED MALE: You can't.

FOSTER: I can't.

Nationwide veterans are neglected, homeless, unacceptable.

Which branch of service?

UNIDENTIFIED MALE: Army.

FOSTER: Army. So was I.

We are still brothers in arms, so no man left behind.

My name is Roy Foster, and my mission is to help and empower homeless veterans.

If you're going to work for sobriety, you've got to change. Staten Island House provides services for veterans only, a safe, clean place to live, all the meals, mental health services. The comradery, it is that internal glue.

UNIDENTIFIED MALE: When I got back from Iraq, it was difficult for me until I met Mr. Foster, who helped me.

FOSTER: Tell him one of his brothers in arms came out looking for him. And let him know, yes, we will be back.

They are the best, and they deserve the best. What I do, I love. I love it.

ANNOUNCER (voice-over): Tell us about your hero at CNN.com/heroes.

(END VIDEOTAPE)

HARRIS: And if you want to learn more about Roy Foster or if you know someone doing something so extraordinary, they deserve to be a CNN Hero, here's what you do. Go to our Web site and tell us all about them. All of our heroes are chosen from people you nominate at CNN.com/heroes.

The first $6 billion wasn't enough. I don't know, maybe another $7.5 billion will help. We are talking about bailing out a troubled lender to kick-start auto sales.

We're back in a moment.

(COMMERCIAL BREAK)

HARRIS: A developing story we want to bring to you now. As you can see, this is an aerial view of the scene from our affiliate in New York City, WABC. So here's the story here.

As many as 17 children, we understand, were injured in a collapse. And we're talking about a grate, a grate collapse. And I don't know if that's what we're looking at right there to the left of the screen. But the New York Police Department are telling us they are absolutely on the scene of some kind of grate collapse. Just outside the Shaare Torah Girls' Elementary School. This is a parochial Jewish school in the Kensington section of Brooklyn.

All of the injuries appear to be minor, but a couple of young people have had to be transported to an area hospital, Lutheran Medical Center. So we'll keep an eye on this story and find out the extent of the injuries. But at least at this point, first indications are that the injuries are minor related to this grate collapse outside of an elementary school, a Jewish parochial school in Brooklyn, New York.

We'll continue to follow developments on this story for you.

To business news now. The ailing auto industry gets another government bailout to the tune of $7.5 billion.

Where is Stephanie Elam? There she is at the New York Stock Exchange.

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Present.

HARRIS: Hey, good to see you. Present and accounted for. Details on the new GMAC money.

Stephanie, good to see you.

ELAM: Yes, yes, tony. Well, if you take a look at the -- where things stand right now. GMAC already got $6 billion from the government, so now we've got this other $7.5 billion that we are looking at.

And so here's where the money's going to go. Let's take a look at it.

First, the money would help boost lending to Chrysler buyers. GMAC is the main source of financing for GM, and now for Chrysler vehicles. Second, the money will boost GMAC's capital levels. GMAC was one of the banks that failed the government's stress test and it's hurting on two fronts as financing company, weak auto sales, and a housing recession really playing in. GMAC is also a home mortgage lender, so that had something to do with it, as well.

Latest cash infusion means the government will now own 35 percent of GMAC, Tony.

HARRIS: Hey Stephanie, I'm sure a lot of our viewers are concerned. We were just talking about...

ELAM: Tony, can you hear me?

HARRIS: Yes. Can you hear me? Is our connection a little messed up here or something? Technically are we OK?

Can you hear me, Stephanie? All right, we are...

ELAM: I am not hearing you, Tony, if you are talking to me. And I'm sad.

HARRIS: I'm sorry, we'll try to work it out, Stephanie. The fact that I can't communicate with you...

ELAM: Oh, I hear you now. Do you hear me now?

HARRIS: OK, great.

ELAM: OK, good.

HARRIS: Hey, I've got to ask you. I know a lot of our viewers are concerned -- it's something that we took up with our senior White House correspondent Ed Henry just a moment ago - at the level of investment by the government in this sector.

ELAM: Yes, I know a lot of people are concerned about that. And you know, it does have a good side and a bad side about it. No doubt, government ownership does come with strings attached. GMAC really - they can't go ahead and run the company without checking in with the government, making sure that everything is copasetic on their end.

But analysts say government ownership could also give GMAC a leg up since the backing by the U.S. government could actually reassure people out there who are thinking about getting a car. Now they may go, OK, I can do this now because I know that there's funds behind this company. It could also offer better loans than rivals like Ford. So that could play a part as well.

Right now GM shares, they are down close to 8 percent. But keep in mind, yesterday, they were up more than 30 percent. So a little bit of a pullback, not too much of a surprise.

As far as the overall markets right now, we are doing a little bit better. We're up 62 points at 8354 on the Dow. Nasdaq better by 10 points at 1705. But you know, Tony, we got to keep in mind, three- day weekend, markets will be closed on Monday. So a lot of people have already taken off. So we're trading on very light volume around these parts today.

HARRIS: Look, I'm just happy we worked out the audio issues.

ELAM: Yes, me too.

HARRIS: I can't go a day without at least connecting with you.

Stephanie, appreciate it. Thank you.

ELAM: Have a good weekend.

HARRIS: Yes, you too.

America's unemployment rate - boy, I just saw this just a moment ago - is down in 21 states. Did you know that? At some point that will probably show up in the overall unemployment numbers. It is the top story at CNNMoney.com. Go there and get the latest financial news and analysis. Once again, CNNMoney.com.

Nancy Pelosi under fire. You recall a week ago, right here on live TV in the NEWSROOM, the House speaker charged the CIA misled Congress about the use of so-called enhanced interrogation techniques. Republicans are calling for an investigation and demanding she back up the charge.

So what's Pelosi saying today? Senior congressional correspondent Dana Bash live from Capitol Hill.

And what did the speaker have to say today, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: I think we could sum up the answer to that question up in one word - nothing.

HARRIS: Yes.

BASH: Nothing about that topic. And that was what she was absolutely determined to do today, to do nothing and say nothing.

Those of us who were in the room tried to ask some questions. One of my colleagues did get one question on this topic, specifically on the issue of republicans pushing for an investigation, trying to get her to back up or approve the idea that she really didn't know about these enhanced interrogation tactics.

Listen to how she answered that.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: I have made the statement that I'm going to make on this, I don't have anything more to say about it. I stand by my comment. And what we are doing is staying on our course and not be distracted from it in this distractive mode. We're going forward in a bipartisan way for jobs, health care, energy for our country. And on the subject that you asked, I've made the statement that I'm going to make. I won't have anything more to say about that.

(END VIDEO CLIP)

BASH: So there you heard it. Despite the attempts by some of us to ask her other questions, we didn't get very far.

But Tony, (AUDIO GAP) a little bit about the theater of this press conference. Now, it is fair to say that this is the end of the session before Congress goes into recess and it is quite typical for democratic leaders to come out and talk about their accomplishments. But Nancy Pelosi definitely used this opportunity to do that. And she, this is her own weekly press conference, but she brought three members of our leadership team in.

And these members of Congress spoke - in fact, our colleagues back at our bureau clocked this - for about 25 minutes. Twenty-five minutes about housing, about jobs, about health care. About very important issues, obviously, to the American people and what they're doing here. But when it came to Q&A for this news conference where we were supposed to be asking questions, just shy of five minutes. That's all we got. And you heard the one and only question that we got to her about this issue.

So there was the tactics that she was using to try to avoid this were so clearly blatantly on display as she brought her colleagues in and talked about the issues that they want to talk about, not what they don't want to talk about, which is this controversy.

HARRIS: Yes. Got to tell you, the speaker's from Baltimore, I'm from Baltimore, I know that tone. We were just scolded by the speaker. Yikes.

BASH: I know it too.

HARRIS: Yes, you do.

All right, our senior congressional correspondent Dana Bash for us. Dana, I appreciate it. Thank you.

BASH: Thanks, Tony.

HARRIS: President Obama getting a commander's welcome at the U.S. Naval Academy last hour. Live pictures now.

Let's have a listen.

So interesting thing here, among the parents watching cadets graduate, former republican presidential candidate, Senator John McCain, himself a Naval Academy grad, his son Jack graduates today.

President Obama brought a little gift for the grads. Have a listen.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know it's customary at graduation for guests to bring a gift. And I have. All midshipmen on restriction for minor conduct offenses are hereby officially absolved. I did say minor.

(END VIDEO CLIP)

HARRIS: Well, live pictures again now. What a scene. The commencement speech at Annapolis is the president's third speech to college graduates.

CNN tomorrow night, an "AC 360" special, two wars, a broken economy, and historic plans that the president says just can't wait. Anderson Cooper looks at just how the administration plans to tackle such extreme challenges. An encore presentation of "AC 360" CNN Saturday and Sunday night at 8:00 Eastern time.

Refusing to treat her child's cancer with chemotherapy, now mom and son are on the run from the law. We want you to weigh in on my blog. Who should decide your medical treatment? Go to CNN.com/newsroom and tell us what you think.

(COMMERCIAL BREAK)

HARRIS: OK. In the Sri Lankan capital of Colombo today, a celebration marking the end of a 25-year civil war with the Tamil Tiger rebels. But beyond the dancing and singing, the refugee problem. A United Nations official says conditions are critical in camps for more than 270,000 people displaced by the recent fighting. We will take you to Colombo live in our next hour.

Concern is also growing for civilians trapped by Pakistan's war against the Taliban. Hundreds of thousands of people stuck in Swat Valley as the fighting there intensifies.

Our Ivan Watson choppered into Swat Valley with Pakistan's military. He gives us a first on-site look.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN CORRESPONDENT: This crater is the result of either a Pakistani air strike or artillery strike after the Pakistani military moved to conquer this mountaintop from Taliban militants.

Now, we're told that the Taliban used this as a training camp. That they had a system of bunkers here from which they controlled supply lines through the Swat Valley.

Now, take a look at the incredible breathtaking view that the fighters would've had here. This was formally one of their machine gun nests. And from here, they could have controlled the entire area. Now Pakistani soldiers are occupying these same bunkers.

Now the battle for the Swat Valley is still far from over. We've heard some distant explosions, we've heard fighter jets flying in the distance. There are still Taliban militants operating in these very difficult mountains. The battle for the Swat Valley is still far from over.

Ivan Watson, CNN, reporting from the Swat Valley in Pakistan.

(END VIDEOTAPE)

HARRIS: Kids in the middle of street violence.

(BEGIN VIDEO CLIP)

UNIDENTIFIED GIRL: I cry because of where I live. I am a strong black girl who alive in the streets of Rochester.

UNIDENTIFIED BOY: I pretend to ride a motorcycle to get away.

UNIDENTIFIED BOY: I wonder if they will invade my house.

(END VIDEO CLIP)

HARRIS: Now their poems are offering a creative outlet for their pain.

(COMMERCIAL BREAK)

HARRIS: A 13-year-old Minnesota boy, Daniel Hauser, and his mother don't want chemo for his Hodgkin's lymphoma. Now last week, a judge ruled that Daniel's parents were medically neglecting him and ordered the boy to undergo a chest X-ray to assess his cancer. Before they went to court, the mother disappeared with her son. Now there is a felony warrant out for her arrest.

So this brings us to our blog question of the day. Does this amount to law enforcement and the courts mandating medical treatment? Does the government have the right to do so?

Nicole Lapin has been monitoring what you are saying about all of this at the blog and elsewhere.

NICOLE LAPIN, CNN.COM CORRESPONDENT: Right.

HARRIS: Right?

LAPIN: And there's a big conversation going on right now. People are wondering, does the government actually have a right to get involved? To tell you how to treat your child or, in some cases, treat yourself?

So the conversation is taking a couple of different forms right now, Tony. In the form of a political cartoon here on naturalnews.com. You see "Chemotherapy Stickup" and you see a big bully here that says "Chemo," "Hand over you immune system or I'll kill you." And then you have a woman on the other side of the needle.

So we put this up on the blog this afternoon, and we're asking that very question. Do you agree with that political cartoon or not?

Here is somebody who does saying, "The government shouldn't decide what kind of treatment your kids should get unless there's a disagreement between the parents. If the government does this what else will they decide for us?" That's coming from Marsh (ph), Tony.

And also Michael Williams (ph) chiming in on the flip side saying, "I believe the courts have the duty to step in where parents or guardians of the children cannot make appropriate and educated decisions about their children's health. It is one thing to subject themselves to inappropriate care, but children, especially younger ones, have the obligation and the right to have appropriate treatment."

So again, Tony, it is on the blog. We are inviting our viewers to chime in, of course, and answer that question. Does this amount to law enforcement and the courts mandating medical treatment? And the conversation definitely continues.

HARRIS: OK. So you go to CNN.com/newsroom. And then you can just click on Tony and you can get to our blog page, right?

LAPIN: Absolutely.

HARRIS: OK. Appreciate it so much. Thank you.

LAPIN: You're welcome.

HARRIS: Let's get back to Gerri Willis here. You know, it is Friday. Time for your personal finance editor Gerri Willis to tackle some of your financial questions. She is with us once again from New York to answer your e-mails.

You ready to dive in here, Gerri?

WILLIS: Let's go, Tony.

HARRIS: All right, the first question from Brian in Atlanta. He says, "I'm in the market for a financial planner. What sort of things should I look for when hiring one," - Gerri.

WILLIS: Well, Brian, great question. You first want to know what credentials, qualifications, and experience the planner has that are relevant to your situation. Then check with federal, state, and industry regulators to ensure you're getting the straight story. Jot down these websites: sec.gov., nsaaa.org, and finra.rog. Really great resources when it comes to doing your research online.

Next, ask how the adviser is paid, by commissions, fees, a combination and exactly how much are you paying? You may consider going to a fee-only planner since that can reduce potential conflicts of interest.

And finally, trust your intuition. If you think you're being sold a bill of goods and that the adviser isn't listening to you, you have speak up. Don't waste time. Move on - Tony.

HARRIS: That's a good question.

A viewer in Maryland, Gerri, wants to know, "Does my indebtness to the IRS in any way affect my credit or FICO scores?"

WILLIS: That's a good one, you know?

HARRIS: It is.

WILLIS: The reality is that debt owed to the IRS only affects credit and scores if and only if the IRS filed a lien against you and that lien shows up on your credit reports, which it almost always does.

OK, if you have a payment plan with the IRS, and a lot of people do this, they don't file a lean. Then it's not going impact your credit report or your scores, Tony.

HARRIS: All right. One more question. You got time for one more, Gerri?

WILLIS: Sure. Sure.

HARRIS: This question comes from Tom who writes, "I have read that individuals can transfer IRAs to Roth IRAs without any tax or other consequences. What are the rules for transferring funds from a traditional IRA to a Roth IRA," - Gerri?

WILLIS: Well, Tom, I wish you were right, you know? When you transfer assets from a traditional IRA to a Roth, you have to pay income tax on the transferred amount, and that's not a small dent in your wallet typically. The tax can be as much as 30 percent to 50 percent of the amount transferred and if you make more than 100,000 annually, you're prevented from converted to a Roth.

But if you can cover the tax hit entirely from your savings, converting to a Roth makes sense now, especially considering the market conditions. For example, if your IRA has dropped in value, the cost of converting would be minimal. And if those assets rise you'll reap the awards tax free.

There's some other benefits too. Roth IRAs have no withdrawal requirements as traditional IRAs do. Plus, Roth IRAs can be left to heirs without the tax consequences that come with traditional IRAs - Tony.

HARRIS: That is terrific.

And Gerri, I just don't want you to get away. I love your show on the weekends. One more time, "YOUR BOTTOM LINE," give us a bit tease about what's coming up.

WILLIS: Yes, right, well, join us for "YOUR BOTTOM LINE" Saturday morning at 9:30 right here on CNN. It's a summer money special. We're going to tell you how to negotiate, what you can do to save money when you're shopping, summer employment opportunities. Join us, we've got lots of great tips for the summer.

HARRIS: You have a great weekend. Thank you, Gerri.

WILLIS: My pleasure. You too, Tony.

HARRIS: Thanks, Gerri.

And next hour, we are tracking the bailout billions. The latest installment, 75.5 billion for GMAC. Nicole is adding is up. We will have the latest tally in the next hour.

Plus, we promised to follow the rising number of students being killed in Chicago. I will talk to two African-American leaders in our search for answers on what to do about the city's deadly youth violence.

And he calls himself a little country boy, but you can call him mayor. We will take you to a Mississippi town linked to notorious Klan killings for an emotional interview with the town's first black mayor.

(COMMERCIAL BREAK)

HARRIS: It started out as a fourth grade poetry writing assignment. What came out of it, words so powerful on a subject to troubling their story has to be told.

From Rochester New York, here's Maureen McGuire of CNN affiliate WROC-TV.

(BEGIN VIDEOTAPE)

UNIDENTIFIED STUDENT: I hear their (INAUDIBLE) to my door, bang, bang.

UNIDENTIFIED STUDENT: I wonder every day if I'm going to get shot.

UNIDENTIFIED STUDENT: I hear bullets telling me to run as fast as I can.

MAUREEN MCGUIRE, WROC- TV REPORTER (voice-over): They're the voice of children...

UNIDENTIFIED STUDENT: I cry because of where I live. I am a strong black girl whose alive on the streets of Rochester.

MCGUIRE: ... reading their own words.

UNIDENTIFIED STUDENT: I pretend to ride a motorcycle to get away.

UNIDENTIFIED STUDENT: I wonder if they will invade my house.

UNIDENTIFIED STUDENT: I try not to let it get to me.

MCGUIRE: Poetry from the heart of the city. This spring, something remarkable happened in Heather O'Reilly's fourth grade class at School Number Six. A routine lesson on writing poetry produced results that no one was expecting. These 9 and 10 year olds wrote about what it's like to live on the streets riddled with crime and poverty.

HEATHER O'REILLY, FOURTH GRADE TEACHER: It had a lot to do with the violence in the community, more so this year than in previous years. And the kids that weren't normally my best writers came out with some very moving pieces.

UNIDENTIFIED STUDENT: I am a man who survived the streets or the gangs. I wonder if I will live long enough.

MCGUIRE: Jahmeic Hunter and Tavon Phipps are just two of these extraordinary poets. Both live in the shadow of violence.

(on camera): Some of what you write in that poem is kind of scary stuff, do you know that? Why it did you write about that?

JAHMEIC HUNTER, FOURTH GRADER: It was scary. I used to live and walk in terrorists (ph).

MCGUIRE: Yes.

HUNTER: They shoot at each other.

TAVON PHIPPS, FOURTH GRADER: My uncle had got shot nine times. Then, after that, the male who shot him had came and was shooting at our doors.

MCGUIRE: What did you do?

PHIPPS: I had used my phone to call for help.

MCGUIRE: You called for help? Who did you call?

PHIPPS: The police.

MCGUIRE (voice-over): And no one is more moved by these kids than the police who patrol their neighborhoods. Not long after the poems were written, Officers Manny Ortiz and Angel Vasquez were invited to school to listen.

UNIDENTIFIED STUDENT: I worry that I won't see the life the way I want to. I cry because of where I live.

OFC. MANNY ORTIZ, ROCHESTER POLICE: That is the worst part of our job. To see kids, anyone, particular hard to see children and the way the violence affects them.

MCGUIRE: And so a poetry reading turns into a talk about dreams for the future.

OFC. ANGEL VASQUEZ, ROCHESTER POLICE: I think you may want to be a writer some day. End up writing news stories for them, for Channel 8 or for the newspapers. I mean, anything. You know, you continue to write the way you're doing now, there's nothing that can stop you.

O'REILLY: You know at the end of the day, everything that they've been through, they are just kids. I think they get the bad rap that the city district is school of kids, they don't know how to learn, they're not respectful. And they are.

MCGUIRE (on camera): So are you going to keep writing?

HUNTER: Yes.

MCGUIRE: I hope so.

UNIDENTIFIED STUDENT: I say my prayers to God. I dream that the violence will stop trying to get in.

UNIDENTIFIED STUDENT: I hope one day I can leave this place.

UNIDENTIFIED STUDENT: I try to stop people from fighting. I hope the fighting stops.

UNIDENTIFIED STUDENT: I hope that my dreams will come true.

UNIDENTIFIED STUDENT: I am a man that survived the streets of the gangs.

MCGUIRE: Maureen McGuire, News 8 Now.

(END VIDEOTAPE)

HARRIS: Boy, from a witness to violence in New York to victims of gang violence in Chicago, why are a record number of kids dying? And what can be done to stop it? It's what matters next hour in the CNN NEWSROOM.