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North Korean Nuclear Defiance; Cuban Spy Drama

Aired June 10, 2009 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

HEIDI COLLINS, CNN ANCHOR: Checking stories happening right now. The gas prices are going up at the pump. Well, apparently, they're going to keep going up. Oil prices hit a yearly high today on expectations the economy will improve. So, the average gas price today is about $2.63 a gallon. That's expected to be 7 cents higher by next month.

A suicide car bomber hit a crowded outdoor market in southern Iraq today. At least 28 people are dead; 45 others wounded. There's been an upswing in violence in Iraq ahead of a scheduled U.S. troop withdrawal from the cities in three weeks. We'll keep our eye on that for you.

And more help in the search of remains for the Air France plane crash. A French nuclear submarine is now patrolling the waters off Brazil. The sub, of course, is looking for the plane's voice and data recorders believed to be resting on the ocean floor.

North Korea and the high stakes of its nuclear defiance. The United Nations getting closer to handing out punishment and the communist nation fires back with bluster and belligerence. We'll get the very latest from Pentagon correspondent Barbara Starr now. Barbara, good morning.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Heidi. The rhetoric seems to be rising each day. The U.S. envoy for North Korea says the U.S. has no intention of going to war against this country, but there are certainly are preparations on both sides.

(BEGIN VIDEOTAPE)

STARR (voice-over): North Korea now threatening to use nuclear weapons in a merciless offensive if provoked, raising new worries about Pyongyang's rhetoric. Defense Secretary Robert Gates is reassuring Congress after visiting Ft. Greely, Alaska, where the U.S. has missiles aimed at trying to shoot down any incoming North Korean missiles.

ROBERT GATES, DEFENSE SECRETARY: I have confidence that if North Korea launched a long-range missile in the direction of the United States, we would have a high probability of being able to defend ourselves against it.

STARR: U.S. spy satellites have seen preparations for potential missile launches at several North Korean facilities. The Obama administration trying to send the message, it's not going to play again into North Korea's escalating tone. DENNIS BLAIR, NATIONAL INTELLIGENCE DIRECTOR: The character of the North Korean behavior that we're seeing is fairly familiar pattern of doing something outrageous and then expecting to be paid for stopping doing it.

STARR: Gates is now looking at military options if North Korea doesn't stop its nuclear program.

GEOFF MORRELL, PENTAGON PRESS SECRETARY: He has tasked passed his policy team with trying to figure out creative and prudent ways to bolster defenses.

(END VIDEOTAPE)

STARR: So, as we talked about for the last several days, Heidi, the question still remains, what is North Korea really up to and what is its motivation for all of this escalating rhetoric? U.S. intelligence officials continue to believe one thing going on behind the scenes is that succession struggle inside North Korea so that it is all creating a lot of uncertainty and a lot of worry. Heidi?

COLLINS: Oh, boy. No question about it. All right. Our Pentagon correspondent Barbara Starr. Thanks so much, Barbara. I want to talk more about this now, too.

North Korea has long rattled it's neighbors, but is this latest round of rhetoric more of a reason for concern. You may remember our next guest as CNN senior Asia correspondent and today Mike Chinoy is the author of "Meltdown the Inside Story of the North Korean Nuclear Crisis." He is also with the Pacific Council on International Policies. Joining us live from Hong Kong this morning.

Mike, nice to see you as always. Let's start with the bigger picture. Is there a confrontation that's coming and what is different about this ratcheting up, if you will, than other times we have seen sort of an ebb and flow with what North Korea may have in mind.

MIKE CHINOY, AUTHOR "MELTDOWN": Well, we've certainly seen a level of stridency, of truculence, of belligerence from North Korea. The kind of rhetoric and the threats that Pyongyang has been making are different and more extreme than we've seen before. But I think a lot of North Korean analysts are frankly confused and divided in trying to make sense of it. There's one school of thought that sees this as essentially an aggressive outward push, but there's another, which I think is a much more likely explanation is the north is very much preoccupied with this succession process.

COLLINS: Yes.

CHINOY: Kim Jong-Il had a stroke last year. He is trying to line his ducks up in a row for his youngest son to succeed him. And so part of this I think is a signal to the rest of the world, don't push us around while we do this, part of it is an attempt is to pressure the United Nations not to move ahead with sanctions and part of it is frustration that the Obama administration is not reacting in the way that the North Koreans expected in the sense that the administration keeps saying we'll talk to you but we're not going to come racing to your door just because you're rattling your saber here.

COLLINS: Yes, well, I'm really glad you brought up the succession and, obviously, Barbara Starr did, as well. I mean, I guess it's just about, and I certainly don't want to speculate, but them trying to sort of establish this hard line right out of the gate, if, in fact, Kim Jong-Il's son does take over for him. I mean, I guess they don't want any gap in what they perceive to be as their position of power. Their position of negotiation.

CHINOY: Well, there's another interesting element which is it does seem that in the last six or seven months there's been a kind of significant shift in the way the North Koreans define the whole nuclear issue. Previously they talk about being committed to denuclearizing the Korean peninsula but a lot of indications now that the north may have kind of made a fundamental shift and decided that for the time being, at least, it intends to retain nuclear weapons as part of its plan to make itself a strong country. And it may be important for Kim Jong-Il to bequeath his son a state which is a global nuclear weapons state. And, so, the North seems to be moving full speed ahead on that front and trying to send signals to the rest of the world that it's not, it's not going to back down to pressure to abandon its nuclear program.

COLLINS: Yes, in fact, if you would, Mike, I would love for you to listen with me, maybe you've already heard this. But Steven Bosworth is the U.S. special envoy to North Korea, said last night that the U.S. has, you know, no intention of invading North Korea, but he also said this, let's listen for a moment.

(BEGIN VIDEO CLIP)

STEPHEN BOSWORTH, U.S. SPECIAL ENVOY, NORTH KOREA: North Korea's recent actions to develop a nuclear capacity and intercontinental ballistic missile capacity will require that we expand our consideration of possible responses, including our forced posture and options for extended deterrence.

(END VIDEO CLIP)

COLLINS: All right. Mike, forgive me but it sounds a lot like State Department ease. Tell me exactly what is force posture and extended deterrence. What is he talking about here exactly?

CHINOY: Well, Bosworth is a very interesting figure. He is the North Korean policy coordinator and he has tried to consistently keep the door open to talks with North Korea and he did so in this speech that you just played a clip from but the State Department he referred to is a somewhat carefully phrased warning that the U.S. will keep its military deterrent posture and that the North Koreans shouldn't think that Washington is going to respond in a weak way.

But I think the big question for the United States is does the Obama administration decided that North Korea having nuclear weapons of any kind is so unacceptable that it has to take really aggressive actions to counter it or is it going to try and look for some way to get a high level dialogue, knowing in the hope of getting negotiations underway that might offer a chance to roll this back and that's a very tough question and we don't know frankly whether the North Koreans will be responsive to American overtures for high level dialogue and if not what is the administration going to do -

COLLINS: Yes.

CHINOY: And the signals are it's going to look at strengthening it's military posture in case things get out of hand.

COLLINS: Sure. Continuously planning. Obviously. All right. Mike Chinoy, or former colleague here at CNN, now with the Pacific Council in International Policy. Thanks so much, Mike.

At least 17 people are dead and 64 injured after a hotel in Pakistan is targeted by suicide bombers. Three attackers stormed into the Pearl Continental Hotel in northwest city of Peshawar last night and set off a car bomb. Investigators are sifting through the debris and rubble for clues. So far no one has claimed responsibility for the attack. But the blast can't come after Taliban threats to begin attacking Pakistan's large city.

Looking at some stories in our security watch now, a former Georgia Tech student has just been convicted of plotting to aid a terrorist group. Prosecutors based the case against Syed Haris Ahmed. On video he took of U.S. landmarks. Sentencing will be delayed and Ahmed Ghailani has pleaded not guilty to the Al Qaeda bombings of U.S embassies in Africa back in 1998. Ghailani made his plea in New York federal court. He is the first Guantanamo bay detainee headed for trial in the United States.

A husband and wife accused of spying for Cuba appear in a Washington courtroom at this hour. As CNN's Brian Todd reports, the elderly couple's arrest has shocked those who knew them.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): Tom Murray had no idea that the tall engaging professor with the bushy mustache was up to anything beyond his love of European politics and history. As for the allegation that Professor Kendall Myers was so-called agent 202 for Fidel Castro's communist regime.

TOM MURRAY, CONTRIBUTOR, THEDAILYBEAST.COM: UNIDENTIFIED MALE: It's a little chilling to find out that somebody may have led a double life.

TODD: In the spring of 1992, Murray was a graduate student at the John Hopkins School of Advanced International Studies in Washington. Myers, now charged along with his wife with spying for Cuba for three decades, taught Murray's class modern British politics. Murray says he never got an inkling that Myers is sympathetic to Cuba. But looking back through his notes, after Myers' indictment. Murray picked up what he calls a chilling passage about the professor's admiration for notorious Soviet double agent, Kim Philby, Donald McKlein and Guy Berges.

MURRAY: It indicated that they were turned towards being spies by the desire to help Europe and not necessarily self-driven.

TODD: Murray is now a contributor to the on-line news and current affairs journal, thedailybeast.com and has posted an entry on Myers on that website. He says looking back he's also struck by a request from Myers that students read Rudyard Kipling's book "Kim," about British espionage, against Russia in the late 1800s.

Equally shock at these allegations, Larry McDonald, a friend whose slew is in the same Maryland marina as the 38-footer owned by Kendall and Gwendolyn Myers.

LARRY MACDONALD, FRIEND OF KENDALL & GWENDOLYN MYERS: I could not have been more flabbergasted had I heard they are be more shocked than if I heard they arrested Santa Claus. It was just astounding to me.

(END VIDEOTAPE)

TODD: Both Kendall and Gwendolyn Myers have pleaded not guilty to the spying charges. Contacted by CNN, their attorneys said they would not comment on the recollection of Tom Murray. Brian Todd, CNN, Washington.

COLLINS: Automakers Chrysler and Fiat have just finalized a deal to create a new Chrysler that will begin operating immediately. Peter Valdes-Dapena from cnnmoney.com is joining us live with an update on this. All right. So it's official, right, Peter?

PETER VALDES DAPENA, CNNMONEY.COM: That's right. Sergio Marchionne. CEO of Fiat is now also the CEO of the new Fiat, rather the new Chrysler group here in the U.S. and that didn't take him very long. This is just right after the Supreme Court decided last night that they were not going to intervene so they went ahead and they pulled the trigger and we now have a new Chrysler group.

COLLINS: OK. And we were just also talking about the chairman and who the chairman would be because we got that name a little bit ago. Steven Robert Kidder, we talked about him a little bit. So we've got to Robert Kidder heading up things as chairman and Sergio Marchionne. Am I saying that correctly? As CEO. So also, Chrysler scored a victory, when bankruptcy judge actually approved this plan to close 789 dealerships. Of course, it's going to cost, you know, thousands of job, but some of these franchises have been opened for a very, very long time. So how is all of that going to weigh out?

VALDES-DAPENA: Well, a lot of these franchises have been open for a long time. It's unclear how many jobs are going to be affected because many of these dealers also operated as used car dealerships. And in some cases, they were primarily used car dealerships and also many to mostly did service work on Chrysler and other cars. So it's not clear how many jobs will be affected and many dealerships will have to close down. So, that's going to be happening and already happened in many cases across the country.

COLLINS: All right. Well, we are watching all of this. I guess we knew this was coming, but we were waiting for to be official. So once again, Chrysler and Fiat have made it official. We appreciate it. Peter Valdes-Dapena from CNNMoney.com. Thank you.

If you're getting ready to trade up from an older car to a newer one, you're going to want to hear this. The House has passed the so-called cash for clunkers bill. The program aims to boost new car sales and get old gas guzzling vehicles off the street. CNN's personal finance editor Gerri Willis is taking a closer look at it for us. Good morning to you, Gerri.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey, good morning, Heidi. Yes, this program would offer vouchers to allow consumers to save up to 4,500 bucks on a new car purchase. Now the devil is in the details here. Let's talk about this. Your old car that you're trading in must get 18 miles per gallon or less. City and highway combined and the new car you're buying has to get at least 22 miles per gallon again, city and highway combined. And now you can't get a junk yard dog and try to get this dough. The vehicle must be registered and insured under your name and have to be driving it for at least a year. The car has to cost less than $45,00. So there are a lot of details here, Heidi?

COLLINS: So what are some of the biggest criticisms then of the bill?

WILLIS: Well, look, not too many cars are actually going to qualify for this trade-in. I want to show you a list of the ones that will. Check this out. All American cars here, Cadillac Deville, Dodge Grand Caravan, Dodge Ramcharger and Chevy Tahoe. A lot of people out there saying, you know hey, this really isn't really a green bill, you know, because you're going to get a car that gets 22 miles per gallon. That's not exactly blowing people away in terms of gas mileage. They're really wondering, will a lot of people be able to take advantage of this? It's an open question.

Think about this, Heidi, the average car in this country costs $28,000, subtract 45,000 out of that and you're still financing to finance roughly $24,00. A lot of people with these old clunkers, you know, they're not paying a monthly bill for their car. It might have been tougher for them to actually have enough dough month to month to pay for this.

COLLINS: Yes. Sounds like it. Well, how exactly is the program going to work then?

WILLIS: Well, OK, so, if you want to take advantage of this program and see if you're eligible, first of all, you want to go to a website called fueleconomy.gov to figure out if your old clunker actually gets that 18 or less miles per gallon, right? You can find it out there. Then you have to go out and pick out your new car and make sure it gets the right gas mileage. Now, one thing to understand here, this $4,500 does not come to your pocket, it goes to the dealership. What's more you can't use it for a used car for a lease, you got to buy a new car out there. But again, devil in the details. You got to make sure you understand the whole program to make it work for you. Heidi?

COLLINS: All right. Our personal finance editor, Gerri Willis. Gerri, thank you. WILLIS: My pleasure.

COLLINS: An accused purse snatcher knocks down and drags a 76-year- old woman, but hold on, she's not letting go of that purse.

(COMMERCIAL BREAK)

COLLINS: Recovering bodies. Authorities say the body of one person killed in an explosion at a North Carolina food plant has now been recovered. Search teams will try to go into the Conagra plant near Raleigh today hoping to reach another body. A third person is still unaccounted for. The plant, which makes Slim Jim meat snacks was ripped apart in an explosion yesterday with 300 workers inside. Search operations were suspended overnight because of bad thunderstorms.

Also in North Carolina, police are looking for a man who tried to snap an elderly woman's purse. Look at these incredible pictures. The man in the red shirt, you see there, tried to grab the 76-year-old's purse as she walk on to a Wal-Mart Friday, knocked her down and dragged her through the doors back outside but she held on to the purse and he eventually ran away.

And on that note we'll head over to Karen Maginnis who is standing by the severe weather center to talk a little bit more about these horrible thunderstorms and rain that we're seeing almost everywhere, it seems like.

KAREN MAGINNIS, CNN METEOROLOGIST: It does seem like it encompasses a good portion of the U.S., but actually these isolated thunderstorms are the things that we're watching throughout the afternoon. Take a look at that. Pretty big thunderstorm cell right near Odessa and Lubbock. This particular cell right here. This is the one that we're watching moving off towards the northeast. Already some hail reported with this in Yokum, Texas, as it also caused, the national storm prediction center to issue a severe thunderstorm watch across this region, as well.

All right. Let's move on into the Ohio River Valley, another area of severe weather being reported there. Especially across southern Indiana into Ohio. Now, you may remember that the spring rainfall was exceptionally heavy over the past few months and they're still seeing this line of thunderstorms stretched along the frontal boundary that is just drifting a little bit to the south. So that's going to be the focus as the trigger mechanism for those thunderstorms and the heavy rainfall.

Another area that we're watching, extending all the way from south central Illinois into north central Missouri and portions of Kansas. Take a look at what we anticipated over the next 48 hours. Some of the rainfall here is going to be heavy, in between about three and six inches of rainfall anticipated. So, there could also be the chance that some localized flooding could occur.

All right. Here's that frontal system I was telling you about. It just kind of wag across this region. It's been here for the better part of the week. It will sink slowly towards the south and that is the reason why we're looking at the potential for some severe thunderstorms across this region. Now, delays later on. New York City, not looking great for the afternoon and also D.C. metro areas. Also for Dallas, but before we go, it disappeared. I was going to show you the beautiful tower cam out of Chicago. We were looking at the London Guarantee Building. It was built in 1922.

Heidi, you know, I'm interested in owls and in Chicago there was a little neighborhood there in the winter, had seven long-eared owls in a little tree in a neighborhood in Chicago.

COLLINS: Wow.

MAGINNIS: It was beautiful.

COLLINS: That's very cool. We'll have to get some shots of that if you can find them.

MAGINNIS: Thanks.

COLLINS: All right. Karen, thank you.

Turning to a story now we were covering and getting a lot of comments on our blog. The New Jersey father fighting to regain custody of his son. The Brazilian Supreme Court is expected to issue some sort of ruling later today. We don't actually know what that ruling will be, but the lower court had previously awarded nine-year-old Sean Goodman to his father, David.

David's wife had taken Sean to Brazil five years ago. She remarried and then died during child birth. Sean has since been living with his stepfather in Brazil. So we have been asking you to comment on this story on our blog. And we got a lot of great responses. We want to take a moment to read some of them to you.

Just a couple here we have gotten like I don't know, 165 of them or so. So we appreciate that very much. And I know you want to hear what people have been saying. So this one from Jay Jerkins says since the Brazilian courts seem to think money and power are more important than family, then let's hit them in the pocketbook. Boycott Brazil. That's one response.

Another one looks like this says from Naoma(ph) Foreman, has anyone asked the boy if he would rather stay in Brazil, which has been his home for a few years or go back with his father. The child is certainly able to say which he would prefer. So, obviously, a lot of issues out there with this story and we'll continue to follow it for you here in the CNN NEWSROOM.

Cancer-detecting robots join the fight against cancer. Is it fact or science fiction? We'll talk about it in just a moment.

(COMMERCIAL BREAK)

COLLINS: Israeli researchers are developing what they call a cancer fighting robot. It's a miniature device that could one day be used to alter how doctors treat cancer and other deadly diseases. Our chief medical correspondent Dr. Sanjay Gupta has been looking at this. So, this is really interesting. Tell us about the mini robot. What can it do?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: It is absolutely fascinating. Very early and very much still in development, but fascinating and a possible glimpse of the future from the Israel Institute of Technology. As you mentioned, this is it. This is the Vi-rob. Take a look at that. It's about one millimeter in diameter and 14 millimeters long. It's made of silicone and metal and it can travel by remote control to just about anywhere in the body through blood vessels, through the digestive track, into your lungs. It can deliver medicines, even perform tiny procedures. It is a pretty remarkable thing.

Let me just show you what it looks like in an animation, Heidi. I just find this so interesting. This is what it looks like going through tubing, very small tubing, a little robot got little whiskers on it almost that allow it to propel itself through the body. Think about that for a second. A stent that has become clogged. A shunt that has got some debris in it, delivering medicines. This is how it might work. We created this animation just to give you a little bit of idea.

Take all this chemo drug, for example, and attach it to the end of the robot. Take this really tiny robot and put it into someone's trachea here and then by remote control you're controlling this thing as it's going through the airways, finding its way all the way down to the bronchials, in to some area of the lung that has a tumor, which is right over here. Slow that down, bring that right into the tumor and start to release that chemotherapeutic agent. Fascinating stuff. Again, it's not here yet. It's still being developed but that is exactly how it might work. Heidi. Fascinating.

COLLINS: Yes, very cool. Any idea how soon we could actually see something like this being used?

GUPTA: Well, you know, everyone - people who are developing are usually overly ambitious and the clinics are underly(ph) ambitious.

COLLINS: Yes.

GUPTA: But I think, you know, five to 10 years is probably a safe bet. It's going to be expensive, probably about $10,000 for something like this. So after you put it in the body, you'd like to get it out of the body at some point as well. One of the hitches here, a reverse button. They don't know how to quite get it out yet. So even if they turn it around and bring it out of the body. Well, they figure out another way, you know, for $10,000 or so each time you want to bring these out. But you know again, when you talk about targeted therapy, you talk about minimally invasive therapies -

COLLINS: Sure.

GUPTA: This is what the future holds.

COLLINS: Yes. Wow, very cool. All right. Let us know what happens with that. Dr. Sanjay Gupta, thank you.

GUPTA: Thank you.

COLLINS: A small town lawyer beats out a White House insider and with half the cash. A look at who is running now and what issues could be swaying voters.

(COMMERCIAL BREAK)

HEIDI COLLINS, CNN ANCHOR: Safety in the skies. Federal officials say they will beef up inspections of pilot training programs for regional airlines. It's happening in response to safety concerns raised by the crash of a regional airliner near Buffalo back in February. Meanwhile, one inspector said he pointed out problems with the regional airline, but his warnings were ignored. The whistleblower spoke to our Allan Chernoff.

(BEGIN VIDEO TAPE)

CHERNOFF (voice-over): A year before the fatal Colgan Air crash near Buffalo that killed 50 people, an FAA inspector reported trouble as the airline tested its first Bombardier Q400 turboprop.

CHRISTOPHER MONTELEON, FAA WHISTLEBLOWER: I've observed the pilots flying too fast for the design of the aircraft.

CHERNOFF: In his report, Christopher Monteleon noted the aircraft exceeded air speed limitation three times, and the pilots failed to note those violations so the plane could be properly inspected.

MONTELEON: If you flew too fast, you could cause the flaps conceivably to fall off the airplane.

CHERNOFF: That did not cause the February crash. But other problems Monteleon alleged that Colgan nearer issues uncovered in the Buffalo crash -- conversation in the cockpit near landing that had nothing to do with flight operations and pilot fatigue. Yet Monteleon says his supervisor told him to back off. He was instructed in a memo from an FAA manager not to have any contact with Colgan employees regarding Colgan Air business.

MONTELEON: My supervisor called me into his office and said, "Stop your investigation." He said that this violation, these violations, never occurred and that you are to erase the fact that you began the investigation from the FAA database.

CHERNOFF: When Monteleon's union filed a grievance, an FAA manager denied the claim, arguing the agency should be assisting Colgan's business plans, an approach that required management to immediately respond to the operator's scheduling needs. That operator, Colgan Air, was about to begin regional service using for Continental Airlines using the new Q400 plane.

MONTELEON: And that's tragedy in the making. That's putting business interests ahead of safety. CHERNOFF: The FAA later did investigate Monteleon's claims. It made changes in its oversight of Colgan. There is now a new manager in charge of inspections at the airline. But the FAA says it found no violations of its safety regulations.

Colgan Air told CNN, "Mr. Monteleon's claims against us are baseless. We have no control over what the FAA chooses to do and applied no pressure whatsoever to create a situation where he was reassigned. Colgan Air met or exceeded every single FAA requirement necessary to add the Q400 to its fleet."

(END VIDEOTAPE)

CHERNOFF: A month after the Buffalo crash, Monteleon spoke out at a FAA town hall meeting, saying he issued warnings about Colgan air. Two weeks later, he says, the FAA put him on leave. He says the FAA blamed an argument he had had with the staff attorney. The FAA says the reassignment was not retaliatory, but will not comment further on the case, saying it's a personnel issue covered by privacy laws.

Allan Chernoff, CNN, Miami.

COLLINS: It's been called the miracle landing on the Hudson. Live pictures now of second day of NTSB hearings into the crash of US Airways Flight 1549. Yesterday some riveting testimony from the plane's captain and passengers, too.

(BEGIN VIDEO CLIP)

CAPTAIN CHELSEY SULLENBERGER, U.S. AIRWAYS: We didn't have time to consult all the written guidance. We didn't have time to complete the appropriate checklist. So we had to work almost intuitively in a very close-knit fashion without having a chance to verbalize every decision, every part of the situation. By observing each other's actions and hearing our transmissions and our words to others, we were able to quickly be on the same page, know what needed to be done and begin to do it.

BILLY CAMPBELL, PASSENGER ON FLIGHT 1549: When we did hit, I almost felt like I was on a cruise ship because as I looked out the window, the plane submerged and felt like almost looking out a porthole as we were under water.

When we finally came to a stop, you know, sort of feeling the miracle of, wow, survived this crash.

(END VIDEO CLIP)

COLLINS: Oh, I bet. All 155 people aboard flight 1549 survived.

We're keeping a close eye on oil prices today. Crude topped 70 bucks a barrel yesterday for the first time since November. Today prices are climbing even higher. Susan Lisovicz is on the floor of the New York Stock Exchange. Good morning to you, once again, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning to you, Heidi. We're watching oil prices once again. You know it's a lot better than -- $72 a barrel is lot better than $147 a barrel. That's what we had last summer, but the fact is in December, oil was trading under $33 a barrel. We've seen prices more than double.

Why is that? One of the reasons why is that when we see a weak dollar -- oil is priced in dollars and you automatically see a rally in oil prices. But the larger picture is that there is a sense that things aren't as bad as they once were, and things are actually improving and what would happen with the improving economy, there would be more of a demand on oil. So, you're seeing a big rise in oil.

Bottom line, what does it mean to you? AAA says the national average right now for a gallon of gas is $2.63, up 40 cents over the past month.

COLLINS: Yes.

LISOVICZ: You're noticing it. What we're seeing is a rally in oil stocks and not much of a rally for the blue chips. Check it out. But look at that level. Heidi, the Dow is now positive for the year. It closed 2008, 8776. It is the last of the three major averages that is actually up. (INAUDIBLE).

COLLINS: Wow.

LISOVICZ: The broader S&P 500 is up about 4.5 percent for the year. Don't have the cow bell, but, yes, hopefully it can inch a little bit higher than that, Heidi.

COLLINS: We have to get you a more portable cow bell so you can have when you need it.

LISOVICZ: I think so. I hope management is listening. I'll add that to the list.

COLLINS: Very good.

Back to the oil prices really quickly, is it true that a jump in oil and then, of course, gas prices could limit the economy's recovery or at least the speed of it?

LISOVICZ: It is kind of ironic, right? If it's responding to an improving economy, it could, in fact, retard it, and that's something analysts are saying. Peter Butel says a 10 cent increase in gas could mean $40 million less spent each day on other items. And Steven Chorkin (ph), who I just spoke to said, "This is a bubble, pure and simple. Get out of its way, and the market is screening higher. There's nothing, nothing you can do."

It's completely detached from reality because you said that supplies, global supplies are there. We just got the weekly inventory report which came in much weaker than expected. Bottom line, though, there is enough oil. This is speculative. That's according to Steven Chorkin (ph), and he has his newsletter is completely devoted to energy.

COLLINS: All right, Susan, we're watching closely. Thank you.

LISOVICZ: You're welcome.

COLLINS: Talking politics. The races, the issues, the controversy. CNN contributor Bill Bennett sits down in the NEWSROOM in just a moment.

(COMMERCIAL BREAK)

COLLINS: A surprising result in Virginia. State Senator Creigh Deeds is the Democrats' choice for governor. He won nearly 50 percent of the vote yesterday, beating out Terry McAuliffe, the former chairman of the Democratic National Committee, and former legislative colleague Brian Moran. His win sets up a rematch with Republican Bob McDonald. Deeds lost to McDonald four years ago in their race for attorney general.

In fact, a lot of races and issues to talk about today. Bill Bennett, our CNN political contributor and host of the national radio talk show "Morning in America" is joining us now from Southport, North Carolina. Bill, what do you think about this whole deal in Virginia? Terry McAuliffe being, you know, losing again in the primary. How is that going to heat up for November?

BILL BENNETT, CNN POLITICAL CONTRIBUTOR: We think it's pretty good. That is we being conservatives, Republicans, this is what we call glimmers in the night, Heidi. Fireflies in the darkness. But it actually is fairly encouraging. That result in Virginia, matching McDonald against Deeds, is a good match-up for us. It's not won by any stretch. But when they have gone head-to-head before, McDonald has won.

Second in that race, I think it's interesting. Second time Bill Clinton has been an active surrogate. He was for Terry McAuliffe, his campaign manager, and it didn't come through. He was obviously very active for Hillary Clinton, as well. That may tell us something about that political wattage of Bill Clinton. The other race we're looking at encouraged by is the the New Jersey governor race, Chris Christie -- very impressive. Running very strongly in polls against Jon Corzine.

COLLINS: Of course, just in case people aren't familiar with the landscape there, Corzine is the incumbent governor in the office right now. What do you think will come out of that? A lot of issues in New Jersey.

BENNETT: Well, there are a lot of issues in New Jersey, but Chris Christie is running on mainly economics and budget issues and taxes. And this is the interesting thing we're seeing. You saw in California on those ballot initiatives, Schwarzenegger was rejected. And I understand Schwarzenegger is a Republican, but we don't regard him as a conservative Republican.

But the business they've been doing in California, which is increasing taxes, spending more money, was thoroughly rejected by the voters in every single county, including every county in Los Angeles. And in New York, you had an interesting development. You had a Democrat from the Bronx and from Queens talk to us with the Republicans giving the Senate back to the Republicans in New York. These are blue states, these are good signs. I don't want to make too much out of it, but they are encouraging signs for our team.

COLLINS: That's what I want to ask you about because there has been some talk as of late getting ready for the next election to come up, sort of a way to reinvigorate the Republican party. A lot of analysts saying, party's really been in trouble for a while -- not ready to make that leap just yet, right?

BENNETT: Just -- yes. I think wait a bit and see. I was talking to a former member of the DLC, remember, the Democrat Leadership Council. This was the moderate group that formed and organized with Bill Clinton, around Bill Clinton, as a moderate centrist group around the moderate party. This gentleman was saying to me, you know, "Everything we fought for to establish that Democrat identity in the center is now at risk with the Obama budget proposals, some of the stuff in foreign policy.

We shall see. There's still no excuse for Republicans not to have ideas, and they do have ideas. We will see an energy proposal tomorrow, but right now there's a reaction, the antibodies are kicking in, a reaction around the country, particularly this General Motors deal, which the public doesn't like. Personal approval rating of Barack Obama, still sky high. No diminishing that. But public policy approval rating is going down.

COLLINS: All right, well, we want to turn to another issue because a lot of discussion about the abortion debate and the events that have happened in the news. The family of George Tiller, the late-term abortion doctor and abortion provider who was murdered, has said now that his clinic is not going to reopen. We also heard from Scott Roeder, his accused killer, who said this was a victory for all unborn children. What in this whole episode is done for the abortion debate in this country? Are your listeners talking about it?

BENNETT: Only, really the media coverage of it for the most part. My listeners -- pretty conservative, center right audience -- deplored this horrible act of violence. Everybody has been quoting professor George, Robby George, at Princeton University, who says you do not counter evil with evil and strong condemnation of this action.

Notice, though, however, the background, which is very interesting in terms of public opinion which is going more towards the pro-life position. For the first time, Gallup reported a majority of Americans are pro-life. This should not give any encouragement to people who want to do this kind of heinous action against the providers of abortion. It has to be roundly and thoroughly condemned.

The media point that my listeners are talking about, Heidi, is this. That there was a lot of coverage of this issue, obviously, a lot of condemnation of it, and a lot of the people that listen to my show don't feel there was sufficient coverage of the shooting at that recruiting station of two soldiers. Why didn't that get as much coverage? I think it's a fair question. Also, U.S. marshals were dispatched to protect people at some of these clinics, which is fine, but perhaps marshals should be dispatched on some of these other circumstances, as well. Question of fairness of coverage, but there isn't any ambiguity, especially among the leading pro-life organizations. Utter condemnation of this action by this man.

COLLINS: Understood. We had the recruiting story here on this program, I'll have you know.

BENNETT: Yes, you did. You sure did.

COLLINS: CNN contributor Bill Bennett, sure do appreciate that. We'll talk with you again, Bill. Love the new studio. Thanks.

COLLINS: A gun...

BENNETT: Thank you very much.

COLLINS: A gun battle on a Mexican street. Listen to this.

You might be surprised to know where this battlefield is. It's Acapulco, a tourist destination caught in the crossfire. Is this a sign of things to come?

(COMMERCIAL BREAK)

COLLINS: Mexico's drug wars. The death toll is rising, and the violence is spreading. Over the past several days, it has erupted into Acapulco. Experts warn tourists will increasingly get caught in the crossfire. CNN's Casey Wian takes a closer look.

(BEGIN VIDEO TAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): The body of one of three police Acapulco police officers killed Monday sits slumped in his vehicle. Shot by gunmen who targeted two police stations in near- simultaneous attacks in this popular resort city.

Less than 48 hours earlier, Mexican soldiers and police battled suspected drug cartel gunmen armed with military weapons and grenades. In that fight, two soldiers, two bystanders and 13 of the gunmen were killed.

DANIEL VELASCO, MEXICAN ARMY (through translator): They have connections with the Beltran labor organization. Also among the dead hit man was a civilian who commanded this cell and was known as Commander Magana.

WIAN: Two and a half years after Mexican President Felipe Calderon deployed tens of thousands of troops to fight drug traffickers, the body count continues to rise. Now approaching 11,000. Even so, some experts see some progress, particularly in the arrest two weeks ago of more than two dozen public officials accused of cooperating with drug cartels, including ten mayors.

GEORGE GRAYSON, COLLEGE OF WILLIAM AND MARY: Slowly, Mexico is getting its act together. Now, I'm certainly not one who believes that we have reached the millennium here, but there are some modest signs of progress, and they're driven in large measure by the upcoming elections, but also because Mexico's capability is gradually improving.

WIAN: George Grayson, who has studied and written extensively on Mexico, expects more government crackdowns on the run up to July 5th's midterm election. One reason, to shift focus away from Mexico's crumbling economy.

He also fears more violence as does the U.S. State Department. Since January, it has prohibited all nonessential travel by U.S. government employees in Mexico in the entire state of Durango and parts of the border state of Coahuila, citing, quote, "the recent increase in assaults, murders and kidnappings in those two states."

(on camera): A State Department spokeswoman would not say if there are discussions underway to expand those restrictions or modify its travel alert for all U.S. citizens in Mexico, given the recent violence in Acapulco. She did say the department is constantly reevaluating its travel alerts, given its situation on the ground.

Casey Wian, CNN, Los Angeles.

(END VIDEO TAPE)

COLLINS: All next week, an "AC 360" special. Can the U.S. afford to make marijuana legal? Can we afford not to? "360" is keeping them honest on both sides of the passionate argument. "America's High: The Case For and Against Pot." An "AC 360" special all next week, beginning Monday night at 10:00 Eastern.

Say it in five words. You may think the Webby Award winners' speeches have limits, but the possibilities are endless.

(COMMERCIAL BREAK)

COLLINS: It's the awards show where techies are greeted like rock stars. From flippant to intimate, the Webby Award winners' acceptance speeches run the gamut. Each in a sprint-like five words. Here's CNN's Jeanne Moos.

(BEGIN VIDEO TAPE)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): The Gettysburg Address it ain't.

UNIDENTIFIED MALE: When do we get dinner?

MOOS: At the Webbys, winners are limited to five-word acceptance speeches. Count them.

UNIDENTIFIED FEMALE: I'm not with these guys.

UNIDENTIFED MALE: Free all attractive political prisoners.

MOOS: Whether it was for fashion online, accepted by two models...

UNIDENTIFIED FEMALE: Victoria's Secret.

UNIDENTIFIED FEMALE: Sexy lingerie. Yes.

MOOS: ... or technology online.

UNIDENTIFIED MALE: A bedspring? Tough economic times.

MOOS: Like any award show, the Webbys had a red carpet and star presenters. Cameron Diaz, Martha Stewart, then star winners from Lisa Kudrow to Jimmy Fallon, who just took over Conan O'Brien's show...

JIMMY FALLON, HOST, LATE NIGHT WITH JIMMY FALLON: Thank God Conan got promoted.

MOOS: Being famous doesn't mean you get more than five words.

SARAH SILVERMAN, COMMEDIENNE: Holocaust. Did it happen? Yes.

MOOS (on camera): But if there were a Webby for best Webby speech, all five words of it, it would go to a complete unknown.

DICK BUSCHMAN, WEBBY AWARD WINNER: Yes, Dick Buschman (ph).

MOOS (voice-over): Dick accepted the award for best banner ad campaign For Volkswagen, but he didn't have cars on his mind...

BUSCHMAN: Fairna (ph). Will you marry me?

MOOS: Fairna (ph) needed only one word -- yes. Dick finalized his speech on the plane as he flew here from New York to the Netherlands.

UNIDENTIFIED FEMALE: He caught me off guard, totally.

MOOS: He meant to get down on bended knee to deliver his five words...

BUSCHMAN: I put down the awards, but the microphone was too high.

MOOS: Speaking of romance, Internet-style, Web Site Story debuted at the Webbys.

(MUSIC PLAYING)

MOOS: Not so romantic was the winner that stripped. Arianna Huffinton was more civilized accepting for her political blog.

ARIANNA HUFFINGTON, EDITOR IN CHIEF, THE HUFFINGTON POST: I didn't kill newspapers, okay..

MOOS: Computer scientists credited with inventing the World Wide Web got a standing ovation. But when you're counting words, these are the words that count. BUSCHMAN: Fairna, will you marry me?

MOOS: Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

COLLINS: That's an award show I could probably sit through.

Universal health care, is it really going to happen, and what would it mean to you? We're digging deeper next hour. For now, I'm Heidi Collins. CNN NEWSROOM continues right now with Tony Harris.