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GM Deal Collapses; Pakistan Car Bombing; From the South Bronx to Supreme Court?; California Supreme Court Upholds Marriage Bans for Same-Sex Couples; The DMZ: The Line Between Two Koreas; Below the Ground Inside Gaza Smuggling Tunnels; Posse Program Promoting Leadership and Diversity

Aired May 27, 2009 - 10:58   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 Wednesday, May 27th, and here are the faces of the stories driving the news today in the CNN NEWSROOM.

First GM's workers, more than 200,000 worldwide, they get the news today that bankruptcy for their employer is now a near certainty.

Supreme Court choice Sonia Sotomayor, her unlikely journey from a poor Bronx neighborhood to the high bench.

And California's gays. I'll be talking live with one same-sex couple about the state's Supreme Court's ruling on Proposition 8's effects (ph), a new ban on gay marriages.

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

First this hour, it is a big day in bankruptcy court for Chrysler. The company's lawyers are there right now urging a judge to approve a plan for Chrysler to sell its core assets to Fiat. That would put Chrysler on pace to emerge from bankruptcy, close to the 30- day mark, perhaps next week. Incredibly swift given the size and complexity of the company.

Some Chrysler creditors could try to tie up the bankruptcy with appeals. That would not stop the new Chrysler, however, from doing business under Fiat's leadership.

We've got a CNNMoney.com producer in the courtroom right now, and we will update you when we get any word.

GM's chances of steering clear of bankruptcy aren't looking so good today. That's because creditors have rejected a debt for stock swap deal.

CNN's money team is on the story, of course -- Susan Lisovicz at the New York Stock Exchange, and Christine Romans.

Christine, first to you, what is your take? Christine, does a GM bankruptcy, does that feel like a certainty to you at this point?

All right, Christine. We're having some issues with your microphone. Until we get that fixed, let's get to the New York Stock Exchange and Susan Lisovicz.

And Susan, I'm sort of curious. I've been reading some analysis about market reaction to any GM bankruptcy filing, and some of the analysis suggests that if GM does file for bankruptcy protection, markets might actually surge upward with the certainty of some kind of decision for GM.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Well, Tony, I mean, watching GM shares over the past year has been a torturous thing. This is a stock that was trading at $90 at the beginning of the decade. At one time, General Motors was called Generous Motors. I mean, it set a standard for the middle class, and set a standard for the world for good pay, good jobs, good work, good product. And it's an entirely different story.

Right now, shares of GM are trading lower, by 12 percent, which amounts to 17 cents, Tony. The stock is trading at $1.27.

If it files for bankruptcy protection, Dow Jones tells us it will be delisted. It will be disqualified from the Dow 30.

And, you know, even if you don't directly own shares of GM, chances are that you're affected by this. Why is that? Because the Dow 30 is something that a lot of us have funds that track the Dow 30. More of us, many millions of us, own shares -- own mutual funds that track the S&P 500. So, it's something that we're all feeling.

You know, there are a lot of questions as to what will happen in bankruptcy protection. This is an unusual and a complex story with the government involved, but the basic tenet of bankruptcy, Tony, is quite simple. You're trying for an orderly and equitable distribution or resolution of its obligations. And for shareholders, unfortunately, who have suffered so much, they go at the end of a very long line.

If you have Christine, I know Christine wanted to talk about the bondholders, and many of us are all affected by that. But bondholders are the first in this line. And then other creditors, for instance, suppliers, for instance, who are owed money. And then preferred shareholders and then the common shareholder.

That stock is almost worthless now. It's guaranteed that they will get very, very little.

So, you know, it's a painful situation, but we're getting very close to finding out what will happen -- Tony.

HARRIS: Susan, appreciate it. Thank you.

We don't have Christine yet, but we will talk to her a little bit later in the hour.

Susan Lisovicz at the New York Stock Exchange for us.

One other quick note about issue number one. A survey of leading economists suggest light at the end of the long recession tunnel. Three-quarters see a rebound beginning in the third quarter of 2009, but the experts caution a turnaround won't be quick, but rather sluggish to moderate. That survey from the National Association for Business Economics.

And follow more on the auto industry bailout and possible bankruptcies by logging on to CNNMoney.com.

All right. Let's take you to Pakistan now.

Gunmen detonate a van packed with explosives, killing at least two dozen people, wounding more than 250 others. The brazen attack happened in Lahore, Pakistan's second largest city.

Our Reza Sayah is monitoring it from the capital, Islamabad, and he joins us live.

And Reza, was a particular group the target of this attack?

REZA SAYAH, CNN CORRESPONDENT: Tony, based on where this explosion happened, what we do know is that the target was the heart of Pakistan's security apparatus. This was a compound that housed some very sensitive government buildings.

You had the police headquarters; you had offices of the ISI, Pakistan's top intelligence agency; and you also had Pakistan's emergency response headquarters there. So these are all these groups that are charged with going after the militants here in Pakistan. And here you see the militants taking the fight to them. So, the target appears to be the heart of the security apparatus in this country -- Tony.

HARRIS: Reza, we're starting to see some of these pictures here to the right of our screen. Just how powerful was this blast? Is it true it actually brought down a two-story building?

SAYAH: Yes, Tony, this was a massive bomb. Police officials tell us the weapon was a large passenger van packed with 100 kilograms of explosives, and indeed, it did bring down a two-story building. That building was the emergency response headquarters.

And police officials say here is how they carried out the attack. They said the militants drove up the passenger van to the initial barrier, three men jumped out. Two of them started shooting. One of them lobbed a grenade.

In that confusion in that initial explosion, they penetrated the initial barrier, and then you had the massive explosion. And the death toll right now stands at about 24, with more than 250 injured -- Tony.

HARRIS: What's the analysis on this, Reza? Is this a clear retaliation for the ongoing fight against Taliban fighters in the Swat Valley?

SAYAH: That's what the speculation is at this point, but police say it's much too early to link this attack in Lahore today to the operation in Swat. Pakistan's interior minister, in a live interview today with local television, did say in recent weeks, Pakistani Taliban leader Baitullah Mehsud did issue a general threat saying if the Pakistani military doesn't stop its offensive in Swat, the militants will attack a major city, a large city. And certainly in Pakistan, with the exception of Karachi, no city bigger than Lahore -- Tony.

HARRIS: Well, and that leads me to my final question for you. Lahore has been so much in the sights of these terrorists recently. Can you tell us why?

SAYAH: Well, Lahore is considered the cultural capital of Pakistan, and to many it's considered the safest and most sacred city, off limits to militants. But with this attack, militants are saying no city is safe in Pakistan. No city is out of their reach.

And also, we should note that Lahore is the capital of Punjab province, which is a province that, according to officials, militant groups linked with Lashkar-e-Taiba are still operating. Lashkar-e- Taiba, of course, the banned militant group, suspect number one in the Mumbai attacks last year -- Tony.

HARRIS: All right. CNN's Reza Sayah for us in Islamabad, Pakistan.

Reza, appreciate it. Thank you.

Tough consequences for extreme actions. North Korea's nuclear program straining relations around the globe.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

HARRIS: President Obama pushing for quick confirmation of his Supreme Court nominee. Republicans are calling for a thorough review of Judge Sonia Sotomayor's record and judicial philosophy, but what about her personal story? Are there elements of her story in your story?

Senior Political Correspondent Candy Crowley reports it is one that could take her from the South Bronx to the Supreme Court.

(BEGIN VIDEOTAPE)

JUDGE SONIA SOTOMAYOR, SUPREME COURT NOMINEE: Those principles...

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): The first Hispanic Supreme Court nominee tapped by the first African- American president. History picks history.

SOTOMAYOR: ... that I am an ordinary person who has been blessed with extraordinary opportunities and experiences.

CROWLEY: Sonia Sotomayor's experience began in a housing project in the South Bronx, where dreams can be big but possibilities can seem small.

UNIDENTIFIED MALE: To find out that, you know, somebody's actually made it out here is exciting.

CROWLEY: Sotomayor read "Nancy Drew" and wanted to be a homicide detective, but she was diagnosed with diabetes when she was 8 and told that meant she could not be a cop. A year after the diagnosis, her father died.

Left alone to raise two children, Sotomayor's mother worked six days a week.

SOTOMAYOR: I have often said that I am all I am because of her.

CROWLEY: If police work was out, she found an alternative, watching Perry Mason.

RAYMOND BURR, ACTOR, "PERRY MASON": I'm sorry, Your Honor. I have no further questions.

CROWLEY: Sonia Sotomayor wanted to be a lawyer. She excelled in school, valedictorian in high school. On a scholarship to Princeton, she graduated summa cum laude and Phi Beta Kappa. And then Yale Law, followed by a fearsome career.

Prosecutor, corporate litigator, appointed by President George H. W. Bush to the U.S. District Court in New York, its youngest member. Then in 1998, the first Latina appointed to the U.S. Court of Appeals for the 2nd Circuit.

Jenny Rivera is a former law clerk.

JENNY RIVERA, FORMER LAW CLERK: She has very high expectations of herself and everyone around her, but she is very caring. She's funny.

CROWLEY: Sotomayor often stops by her local bakery for sturgeon toast, breadsticks, and a cup of decaf. Neighbors say they talk with her about the building's leaky roof, and she's big on holidays.

UNIDENTIFIED MALE: She does make quite an effort at Halloween and puts us all to shame at Christmas with her lights on the balcony.

SOTOMAYOR: Thank you again, sir.

CROWLEY: It's a long way from the projects of the South Bronx to the East Room of the White House, but not quite as long as it seemed yesterday.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE) HARRIS: Boy, what a personal story.

You know, a lot of interesting talk about the Sotomayor nomination.

Nicole Lapin is following your comments.

Nicole, good to see you. What are people saying?

NICOLE LAPIN, CNNMONEY.COM CORRESPONDENT: Good to see you.

A lot of people are talking about this almost immediately after the announcement, Tony. Somebody had something to say; right? Comments were coming in fast and furious from pundits, from viewers, and from people who actually know Sotomayor.

You saw this in Candy's piece. We're talking about professors, to her family, to the guys at her favorite bakery.

(BEGIN VIDEO CLIP)

MILCAR CRUZ, BLUE RIBBON BAKERY: She's a great lady. All the time likes to talk. She's always in a good mood. She likes -- always asks, "How you guys doing?" and things like that.

She's a funny -- not funny, but she's a great lady. The whole time good with all the people here.

SASHA ACOSTA-COHEN, MANAGER, BLUE RIBBON BAKER: I'm really proud of her. I'm really happy and proud of this country. We've come such a long way. And, you know, my dad is an immigrant from the Dominican Republic, and it's just so amazing to have a Latino person on the Supreme Court -- or hopefully.

(END VIDEO CLIP)

LAPIN: Yes, they love her there. Her favorite is smoked sturgeon on toast, Dijon mustard, onions, and some capers.

You don't have to know her culinary tastes or even know her personally to have an opinion. We are getting a lot of comments, Tony, on the blog. This is on the Internet, by the way.

HARRIS: On the Internet? OK.

LAPIN: Yes, in the World Wide Web.

This one from Martin, who says, "It's about time. America is changing. The bench should reflect society. The Hispanic voting bloc is who put President Obama in office. Hopefully more women and minorities will serve on the bench in the future."

The flip side, Tony, Owen says, "It's my personal opinion that this decision was almost solely based on a political decision to continue our president to gain more support from the Hispanic community." And some people just don't know. We have a comment in who says, "Who knows, Tony? They're waiting to see her record. They're waiting to see where she stands on the key issues."

HARRIS: Yes, that's smart.

LAPIN: For those folks like you, you like your morning paper, right?

HARRIS: Yes, yes, yes.

LAPIN: All right. This is not on the Internet, but you can find the front page, "New York Times." Let's just look at some of the headlines really quick.

HARRIS: Oh, great. Great. I love this.

LAPIN: "Obama Chooses Hispanic Judge for Supreme Court Seat."

And "New York Post"...

HARRIS: "Suprema."

LAPIN: "Suprema."

HARRIS: All right. OK.

LAPIN: "Washington Post," we have, "First Latina Picked for Supreme Court: GOP Faces Delicate Task in Opposition."

So there you go. Just a quick look at some of the headlines.

HARRIS: And the papers.

LAPIN: Yes.

HARRIS: All right. Nicole, see you next hour?

LAPIN: Sure.

HARRIS: Thank you.

Bear with me here for a second. I can't tell you how often I have lobbied to get a clip from one of my favorite movie, "Ferris Bueller's Day Off," into the program. But we have this thing in newsrooms where everything has to have a peg -- where is the news peg? Where is the peg?

Never mind that. The clip I really want to show you makes you feel so good.

Where is the news peg? I have a peg today.

Take a look at this scene from "Ferris Bueller's Day Off." You remember? This is where the friends are trying to rewind the odometer on the Ferrari. So where am I going with this? The house with the glass showroom, up for sale.

It is located in the Highland Park neighborhood of Chicago. Asking price, $2.3 million.

Now to the moment of the movie I really want to show you. Enjoy.

(MUSIC)

(COMMERCIAL BREAK)

HARRIS: A warning from the police chief in Columbus, Ohio. About 300 police officers will lose their jobs if voters don't approve an income tax increase in August.

(BEGIN VIDEO CLIP)

CHIEF WALTER DISTELZWEIG, COLUMBUS, OHIO, POLICE: We're going to do less with less. And so, therefore, it's not a matter of efficiency and traffic or some of these others areas. It's going to be efficiency in patrol and the priority one called for services. And as I said earlier, policing is going to change.

(END VIDEO CLIP)

HARRIS: Here's the story. Officials say the city is facing a growing deficit for 2010 that's already estimated to be more than $100 million. Among the possible police layoffs are 25 new recruits whose jobs were saved earlier this year by President Obama's stimulus package. You will remember it was touted as one of the success stories.

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: While this package is composed mostly of critical investments, it also includes aid to state and local governments to prevent layoffs of firefighters or police recruits.

(APPLAUSE)

Recruits like the ones in Columbus, Ohio, who were told that instead of being sworn in as officers, they were about to be let go.

(END VIDEO CLIP)

HARRIS: Well, the White House says those jobs were only guaranteed until the end of the year. We will be following this story and we'll let you know what happens.

It's a modern-day trading post. Big Native-American companies spreading their wealth with other tribes by doing business almost exclusively with them.

CNN's John Zarrella has the story. (BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): The relaxing sound of a poolside waterfall. Inside, a frenzied atmosphere. A waterfall of money flows in the Hard Rock Hotel and Casino in Hollywood, Florida. This and nearly every Hard Rock property in the world is owned by a now exceedingly wealthy Seminole Indian tribe of Florida.

UNIDENTIFIED MALE: Our ancestors sold Manhattan for trinkets. Today, with the acquisition of the Hard Rock Cafes, we're going to buy Manhattan back one hamburger at a time.

ZARRELLA: In fact, it's hamburger or, to be more exact, the beef it comes from that gave Seminole Indian Richard Bowers an idea.

RICHARD BOWERS JR., SEMINOLE TRIBE OF FLORIDA, INC.: What I started out doing is trying to develop a market for our people to sell their cattle.

ZARRELLA: Bowers found that on Native-American land, there are more than two million heads of cattle. Rather than buy from outside suppliers, he could help less fortunate tribes by buying their beef for his cafes. So the Seminoles and a handful of tribes formed a Native-American consortium.

ROBIN FLINT BALLENGER, CONSORTIUM MEMBER: I want to see this consortium bring Indian country into its full power, to regain what we should have had all along.

ZARRELLA: In a year, the group went from five to 100-member tribes, buying, selling and trading between each other.

In Durant, Oklahoma, a Native-American construction company, Flintco, is building a casino for the Choctaw Nation. And what does every casino need besides moneybags? Trash bags.

(on camera): And can you buy those Native-American, or is that something you go outside...

BOWERS: There's a Native-American company that does the trash bags.

ZARRELLA: So it's a win-win.

BOWERS: So it's a win-win. So the money doesn't go anywhere except within our system.

ZARRELLA (voice-over): The products they can't buy Native- American, the consortium tries to buy American. Bowers' time is spent working out how tribes can help each other. Gambling in sparsely populated Montana was not a viable option for the Crow Indians, but their land sits on nine billion tons of coal.

CEDRIC BLACK EAGLE, CHAIRMAN, CROW NATION: We now have a partner that is an Indian nation, and we will now have substantial capital to move forward with all our projects, energy projects, that are right there in the horizon.

ZARRELLA: For the first time in 200 years, the Native-Americans feel they are united. An idea about a casino and a hamburger helped bring them together.

John Zarrella, CNN, Hollywood, Florida.

(END VIDEOTAPE)

HARRIS: The pros and cons of Prop 8. Our iReporters share their views on the California gay marriage ban.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REV. MILES MCPHERSON, FOUNDER, ROCK CHURCH: Well, we're happy that the courts upheld the vote of the people. This is the second time we voted on this in California, and the courts did the right thing to uphold the law. Their job is not to create laws, but to interpret the law, and they did the right thing.

(END VIDEO CLIP)

HARRIS: Well, he is referring to the decision by the California Supreme Court yesterday upholding a voter-approved same-sex marriage ban. Now, of course, that ruling also set off protests across the state.

CNN's Ted Rowlands was in Los Angeles when the decision came down.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: What do we want?

UNIDENTIFIED CROWD: Equal rights!

UNIDENTIFIED FEMALE: When do we want it?

UNIDENTIFIED CROWD: Now!

TED ROWLANDS, CNN CORRESPONDENT (voice-over): Thousands of people in Los Angeles were still on the streets late into the night demanding that same-sex couples be allowed to marry.

UNIDENTIFIED MALE: In a state like California, where it's so diverse and such like an open area, it's a shame that we have these kind of rules.

ROWLANDS: Similar scenes played out across the state. In San Francisco, streets were blocked by protesters joining hands. People also gathered outside the Supreme Court, chanting their disapproval to the justices after the ruling.

UNIDENTIFIED CROWD: Shame on you! Shame on you! Shame on you! ROWLANDS: The court's decision is the latest change in California's seesaw stance on same-sex marriage. It was ruled legal in May of last year, but in November, voters supported Proposition 8, changing the state's constitution to define marriage as between a man and a woman.

This latest ruling upholds Proposition 8, but it also says the estimated 18,000 same-sex marriages already on the books will remain valid. Little consolation, says Cynthia Allen (ph) and Francis Nicholson (ph), who were married last year.

UNIDENTIFIED FEMALE: Is that something to be joyful about? Oh, you know, basically, you are normalish, but we won't let anybody else do it like that.

ROWLANDS: Fifty-two percent of the state voted for Prop 8 last November. Some of them were out applauding the court's decision to uphold what they say is the voters' will.

UNIDENTIFIED MALE: See, this is what a democracy is all about, preserving the vote.

ROWLANDS: Supporters of the same-sex marriage vow the fight will go on. Plans are being made to go back to the voters as early as 2010.

Ted Rowlands, CNN, Los Angeles.

(END VIDEOTAPE)

HARRIS: Next hour I'm going to speak with a married, same-sex couple who lives in California. That live interview is coming up right here in the next hour of CNN NEWSROOM.

You know, our CNN iReporters are also making their opinions known on Prop 8. CNN.com producer Tyson Wheatley joining us with some of their responses.

What are you getting, Tyson?

TYSON WHEATLEY, CNN.COM PRODUCER: Hey, Tony.

Well, after California's highest court upheld the voter-approved ban on same-sex marriages Tuesday, thousands of protesters basically took to the street, held rallies in cities across the state. I want to share some of those videos that we're getting.

Let's start in San Diego where superstar iReporter Chris Morrow captured some very raw emotion.

(BEGIN VIDEO CLIP, IREPORT FROM CHRIS MORROW)

UNIDENTIFIED MALE: We are prepared to go back to the ballot and earn the support of our fellow citizens so we can have full equality. We deserve nothing less. Anybody who thinks today is the end of this, they're exactly wrong. UNIDENTIFIED FEMALE: My gay friends, my gay and lesbian friends, should deserve the right that's so rightfully given to me. Cause I'm heterosexual, so I feel like everyone should get a chance to marry.

UNIDENTIFIED MALE: This decision was a disappointment. I really don't understand it, because the ruling was that the 18,000 folks that got married could stay married, but those people who weren't married can have all of the same rights as married people, but can't call themselves married. And clearly, that seems a violation of separate, but equal.

(END VIDEO CLIP)

WHEATLEY: OK. Check out this next video from Santa Ana, California, where iReporter Melissa Fazil takes us inside a rally outside this old courthouse yesterday evening. Demonstrators from opposing sides of the same-sex marriage debate showed up, and in this video there are just a few feet from each other.

And Melissa told CNN that, for the most part, the rally was peaceful, but just really, really loud. You can see one anti-gay protester with a bullhorn going up against what appears to be an entire gay men's choir just across the street.

We thank Melissa for sharing this video with CNN.

Let's move outside California for just a second. I want to share with you some photos from Salt Lake City from yet another Prop 8 rally. These are photos from iReporter Garrett Mockler. He captured images of the crowd where several hundred protesters gathered outside the Utah State Capital building and then marched to this Salt Lake City temple, the headquarters for the Mormon Church. The Mormon Church, of course, has been very vocal in the Prop 8 campaign encouraging California members to vote for Prop 8 and expressing support for yesterday's court ruling.

And as you might expect, Tony, we have got a lot of folks sharing opinions on Prop 8 and on same-sex marriage. Let's take a quick look from around the country what some iReporters are saying.

(BEGIN VIDEO CLIP)

JOHN BECKER, CNN IREPORTER: Aren't you people in California the people that caused this to begin with about 10 years ago? You voted for gay marriage. Now all of a sudden, ahhhh, we don't want it anymore.

Not that I believe in gay marriage because if gay marriage results in divorce and it just takes one divorce where we got to put people in a courtroom, it's already a losing situation. I don't believe in gay marriage, because it's just going to cause millions of more divorces and it's not worth it.

(END VIDEO CLIP)

WHEATLEY: All right. So, Tony, we want to remind our viewers that it's not too late to weigh in on this issue. It's a big talker. Just go to ireport.com. We hope to see you there.

HARRIS: All right, Tyson. Still reeling from that. Tyson, appreciate it. Thank you.

WHEATLEY: Thank you, Tony.

HARRIS: California's battle over same-sex marriage, you know, it may not be over. Governor Arnold Schwarzenegger answers your questions about the court decision and much more. Our Nicole Lapin will be hosting the conversation. Be sure to catch it live online at CNN.com/live today at 5:00 p.m. Eastern time.

Kindergarteners already behind in learning, it is how many of the nation's children start school. See how one community is turning this trend around right here in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: An innovative program in New York is making a huge difference in the lives of children from poor communities. As part of our second "BLACK IN AMERICA" special that premieres this summer, CNN's Soledad O'Brien takes us to Harlem's Children's Zone.

(BEGIN VIDEOTAPE)

UNIDENTIFIED TEACHER: What number?

UNIDENTIFIED STUDENTS: Fifteen.

SOLEDAD O'BRIEN, CNN CORRESPONDENT (voice-over): The children at this Harlem preschool are learning all the skills they'll need to be successful in kindergarten. Reversing a trend so common in poor communities.

GEOFFREY CANADA, FOUNDER AND CEO, HARLEM CHILDREN'S ZONE: Poor children gain language about half the rate of middle-class kids. By the time they're at the end of kindergarten they're already thousands of words behind, it appears.

O'BRIEN: Geoffrey Canada grew up one of those poor kids in the South Bronx. Now he's on a mission, to level the academic playing field for children in Harlem.

CANADA: We think part of the problem in poor communities is we come up with a great program and it work with kids for two years. Guess what? That's not going to be sufficient.

O'BRIEN: So Canada created the Harlem Children's Zone, where kids are surrounded with a series of programs, including baby classes, preschool, charter schools, after-school programs and tutoring for college students.

CANADA: What are you learning about?

UNIDENTIFIED STUDENTS: Worms.

O'BRIEN (on camera): Ew.

(voice-over): It was hands-on learning when we visited the Promise Academy Charter School in the Harlem Children's Zone.

(on camera): So these are our fourth graders.

(voice-over): These fourth graders had been in the Zone's pipeline since birth.

CANADA: This particular class is the smartest class, not only at Promise Academy, but probably in all of New York State.

O'BRIEN: And he's got the numbers to prove it. Math and English scores that beat the city and the state averages. And a Harvard study that concludes these students have closed the black-white achievement gap.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When I am president of the United States of America, the first part of my plan to combat urban poverty will be to replicate the Harlem's Children Zone in 20 cities across the country.

O'BRIEN: Canada says just creating just one program on the same scale as the Harlem Children's Zone will take at least $35 million. A tall order during a tough economy.

CANADA: We think, if you look at what the cost is not do this well, you know, these same communities, it's, you know, emergency room. It's special ed. It's jails and incarceration. It just doesn't make any sense.

O'BRIEN (on camera): You can either front end it or back end it.

CANADA: That's exactly right. You are going to pay one way or the other. At least you end up with people who give you back more money than you ever paid them.

O'BRIEN (voice-over): In Harlem, New York, Soledad O'Brien, CNN, reporting.

(END VIDEOTAPE) ` HARRIS: A conversation about solutions, huh? OK, you can catch the premiere of the second "BLACK IN AMERICA" special right here on CNN July 22nd and 23rd at 8:00 p.m. Eastern time.

North Korea and its nuclear threat. It is causing more tensions than usual, so we take you to where few people are allowed, inside the DMZ.

(COMMERCIAL BREAK)

HARRIS: Fighting words from North Korea. The communist nation now threatening military strikes on South Korea if Seoul stops North Korean ships to check for weapons of mass destruction. This comes just two days after Pyongyang announced it conducted a nuclear test sparking outrage around the world.

Our Zain Verjee reports from the Demilitarized Zone that separates the two Koreas.

(BEGIN VIDEOTAPE)

ZAIN VERJEE, CNN CORRESPONDENT (voice-over): A North Korean soldier trains his binoculars on us while another peeps through a window then abruptly withdraws.

(on camera): This is the North Korean People's Army building. And you can identify it by the filbastructure (ph). The blue ones over there are actually representative of the U.N. building.

But as we've been standing here, the North Koreans are actually going behind the curtains and every so often lifting them up and taking a look at us. And it's actually quite humorous. We're standing out here filming them and they're...

UNIDENTIFIED FEMALE: They're looking right now.

VERJEE: They're looking right now?

UNIDENTIFIED FEMALE: Yes, take a look.

VERJEE (voice-over): And the North Korean soldiers aren't the only ones watching. A Chinese group visits on the other side filming us as we film them.

While the hard stares and tough guy poses were apparent, what's also striking is a parallel atmosphere of casualness. Despite the standoff, the two sides do occasionally talk, and when they do it, it's in this building called T2.

(on camera): The most interesting thing in this room is actually this table. You can see a line sort of runs right through the middle of it, and the most fascinating and exciting thing about being here in this otherwise ordinary room is that this is the South, but when I step over this way across this line, I'm in North Korea.

And if I open this door right here, which I can't because South Korean and American troops are guarding it and protecting us, we'd go straight into the arms of the North Korean military on the other side.

(voice-over): North and South Korea are still officially at war. A peace treaty has never been signed. The troops here would be in the front line of fire if a battle were ever to break out again.

(END VIDEOTAPE)

HARRIS: North Korea now says it is abandoning the truce that ended the Korean war.

North Korea's nuclear activities, let's give you a bit of a timeline here. It dates back at least two decades.

1985, North Korea joins the Nuclear Nonproliferation Treaty after acknowledging it's nuclear reactor in YongPyong.

In 1994, amid suspicions it was developing nuclear weapons, North Korea agrees to stop the nuclear war. President Clinton eases sanctions, but weapons were continued in secret.

2002, President Bush brands North Korea part of the "Axis of Evil." Later that year, the North admits to a secret nuclear program after confronted with evidence from the United States.

2006 now, North Korea's first underground nuclear test followed by a promise to dismantle its nuclear program in 2007.

2008 now, six-party talks collapsed leading to this year's nuke test and missile launches.

Nobel prize-winning activist And San Suu Kyi was supposed to be a free woman today, according to her supporters. Instead, a court in Myanmar is hearing from an American man who illegally swam to her house. John Yettaw testified today that God sent him to Myanmar, also known as Burma, to protect Suu Kyi. He says he had a dream that a terrorist group would assassinate her. Yettaw's actions could cause the military hunta to extend Suu Kyi's house arrest. She has been detained for 19 years now, 13 of them confined to her home with rare access to visitors.

You know, we can't show you their faces, but we can show you how they're getting around Israel's blockade on Gaza - practically under everyone's feet. Paula Hancocks takes us down into one of Gaza's smuggling tunnels.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT: Under the border between Egypt and Gaza, there's a hive of activity. We head down more than 50 meters to see one of the smuggling tunnels that feeds a thriving black market in Gaza.

(on camera): This is one of the hundreds of tunnels that go from Rafa the Gaza side to Rafa the Egyptian side where they can smuggle goods through.

Now, this one is still in the process of being built, and it's incredibly dangerous work to build these, as you can imagine. As we understand it, children have to do the digging itself because they're so small because they can access these very small places. And they get around about $100 a meter to dig and to take the dirt away. That may sound like quite a lot in Gaza terms, but this is incredibly hard stuff for children to try and bury their way through.

Now, the sort of things that come through here are foods, drinks, cigarettes. Livestock have actually been brought through, live animals into Gaza. Petro, diesel, anything that normal Gazans find difficult to get because of the blockade that Israel has on Gaza itself.

Now, Israel often targets these tunnels. It says that some of these tunnels are used to smuggle weapons, which is probably true, but many of these tunnels are very commercial assets. The amount of money a tunnelmaker could get from this tunnel is incredible. It could cost $50,000 to $100,000 to build, but once it's built, to get goods from that side of the tunnel, Egypt, to here in Gaza, costs the one turn, $5,000. So there are a lot of people up there who are commissioning these tunnels that are making a lot of money out of this.

Paula Hancocks, CNN, under the border between Egypt and Gaza.

(END VIDEOTAPE)

HARRIS: OK, here's a look at some of the top stories we're working on for the next hour of CNN NEWSROOM.

A money and property seized along a Texas highway. We told you earlier about some of the questionable seizures. Now questions about where the money goes. Gary Tuchman has an update.

Las Vegas and lost tourism dollars. The Nevada governor blames President Obama. He wants an apology. What the president said and what the White House is saying about the spat.

The same-sex marriage battle. The laws have been changing in different states. There he is. Josh Levs is tracking all that for us and he'll show us where to find this and share what you're saying about the debate.

(COMMERCIAL BREAK)

HARRIS: The class of '09 and the journey to adulthood. Today, we look at a scholarship program built on the power of the posse. Here's how it works, diverse groups of scholars are chosen from public schools and sent off to college as a group.

CNN's Brooke Baldwin explains.

(BEGIN VIDEOTAPE)

BROOKE BALDWIN, CNN CORRESPONDENT (voice-over): Jasmine Verreen: actress, star student, class of '09 high school senior.

JASMINE VERREEN, HIGH SCHOOL SENIOR: This is my locker.

(on camera): Little Jasmine. How old are you?

VERREEN: I was - that was first grade.

BALDWIN: And look at you now. All grown up and ready to go to college.

VERREEN: Yup. Yup, that's me.

BALDWIN (voice-over): Jasmine is graduating from Atlanta's DeKalb School of the Arts before heading to Wooster College come fall.

(on camera): You had never heard of Wooster College. VERREEN: Ah, no.

(voice-over): If she didn't know before, she definitely knows now. Wooster is a predominately white school in a small Ohio town. Quite a change of scenery from this diverse public school. But Jasmine says, that is precisely the point.

VERREEN: I want to embrace their culture, who they are, as much as I want them to embrace me.

BALDWIN: Jasmine won't be going alone. She will have her posse by her side.

MICHAEL PERRY (PH), HIGH SCHOOL SENIOR: Michael Perry, the College of Wooster.

JULIAN RAINWATER (PH), HIGH SCHOOL SENIOR: Julian Rainwater, the College of Wooster.

JESSICA PRINGLE (PH), HIGH SCHOOL SENIOR: Jessica Pringle, the College of Wooster.

BALDWIN: These 11 students are "Posse" Scholars, nominated and then selected to be part of Posse Foundation, a leadership and diversity program created by education expert Deborah Bial in 1989.

DEBORAH BIAL, POSSE FOUNDATION: There was a student who said he never would have dropped out of college if he had his posse with him.

BALDWIN: Last week Posse celebrated the 20th anniversary in Manhattan. The purpose of Posse, according to Bial, is to identify public high school students from six cities with extraordinary leadership and academic potential and then send them to college with supportive multicultural teams or posses.

BIAL: Our top institutions have much too much a homogenous student body. Posse is helping them to diversify their student body, but also to get young people into their environments who are really dynamic leaders.

BALDWIN: Over the last 20 years, Posse partner colleges have awarded 2,650 scholars more than $265 million in four-year, full- tuition scholarships. And the students graduation rate? Ninety percent.

Alumna Tiffany Schiffner says Posse not only taught her leadership skills and self-confidence...

TIFFANY SCHIFFNER, POSSE ALUMNUS: It also, you know, taught us a lot about being sensitive and aware to diversity and multicultural issues. Just really embraces the notion of support.

BALDWIN: This high school senior already feels that support from every one of her Posse peers. But before she can think about college, Jasmine's focus right now? Graduation.

(on camera): You'll be a big high school grad.

VERREEN: Yes, I will be.

BALDWIN: Moving on to big Wooster College.

VERREEN: Oh, yes! Well, I don't know about "big," but it is big in the step I'm taking.

BALDWIN (voice-over): A big step toward a promising future.

Brooke Baldwin, CNN, Atlanta.

(END VIDEOTAPE)

NICOLE LAPIN, CNN.COM CORRESPONDENT: That's a great story. Let's take a closer look at some of the other stories you are clicking on on CNN.com right now.

The tragic accident involving boxer Mike Tyson's daughter is getting a lot of attention. Four-year-old Exodus Tyson died after she apparently was strangled by a cord on a treadmill.

And former New York Police Commissioner Bernard Kerik indicted. He's accused of lying to White House officials vetting him for homeland security secretary. Prosecutors say that Kerik concealed $250,000 in home renovations by contractors seeking business with the city of New York.

We haven't heard this name in awhile. O.J. Simpson appealing his conviction on armed robbery and kidnapping charges. A jury found Simpson guilty last October and sentenced him to 33 years in prison. He says he was just trying to retrieve some of that sports memorabilia that belonged to him in the first place. Now, the appeal alleges that Simpson did not get a fair trial.

Tony, those are big characters that are making news right now. We're talking Kerik, we're talking Simpson, we're talking Tyson online.

HARRIS: You know what, back to the Tyson story for just a moment. We're going to try to figure out, because a lot of folks are trying to understand how that could actually happen. The cord and...

LAPIN: Yes, freak accident.

HARRIS: Yes, we're going to try to figure that out.

LAPIN: Let's do that.

HARRIS: Nicole, see you in a couple minutes. Thank you.

You know, they still call it "The Saturn Plant," but nowadays they build GM trucks and SUVs. With GM bankruptcy looking like a certainly, the Spring Hill, Tennessee facility could be among the 16 closed in the company's restructuring.

WKRN reporter Jamie Tucker looks at a town on edge.

(BEGIN VIDEOTAPE)

JAMIE TUCKER, WKRN REPORTER (on camera): Even some of the optimists might be looking at this glass might be looking at this glass as half empty this week. They don't want to talk about what could happen this week with GM announcement on plant closings. It's too emotional, it's too personal, and it could be devastating.

UNIDENTIFIED FEMALE: Living just about two miles from the plant myself, I worry about property taxes, the value of my home going down.

TUCKER (voice-over): You can learn a lot about what's happening in Spring Hill at the Old School Cafe. It's where schoolteachers eat their lunches next to executives from GM. And where almost everyone is wondering about the plant down the street.

UNIDENTIFIED FEMALE: We think about somewhat, due to our kids and our parents. But as far as us, we really don't worry about it as much. It doesn't affect us personally.

UNIDENTIFIED FEMALE: Sure, I mean, it affects Spring Hill as a community in general. We have a great community here. It affects everything about our town.

TUCKER (on camera): Well, do you sense that there's a level of concern just sort of simmering under the surface as people go about their daily lives?

UNIDENTIFIED MALE: Yes. That's it. I think everybody is concerned with it.

TUCKER (voice-over): Galon Peirce (ph) is about as old school as the cafe he's having lunch at today. He thinks Spring Hill is poised to do well with or without the plant, but he hopes GM keeps it open.

UNIDENTIFIED MALE: You know, they have to do what they think they have to do. As we know from past experience over the last few years, they don't always know what's right.

TUCKER: Property values and impact on other businesses are the chief areas of concern, but Kara Myer can think of another.

UNIDENTIFIED FEMALE: We have a couple close friends that are employed there and it would be a loss, a huge loss for us, if they lost their jobs and had to leave the community.

TUCKER: That's a lot to worry about especially for people who don't even work at the GM plant.

(END VIDEOTAPE)

HARRIS: Well, the plant was Saturn's flagship facility when GM division began rolling out cars beginning in 1990.