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New Protests in Iran; Testing the President; Hidden Airline Fees

Aired June 22, 2009 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: It is Monday, June 22nd, the first full day of summer.

Here are the top stories in the CNN NEWSROOM.

Angry protesters defy Iranian authorities after a violent weekend. New chaos on the streets.

Iran admits it -- some ballot boxes in the the presidential election ballot boxes were stuffed in 50 cities and airlines getting sly with fees. The charges taking off. Good morning, everyone. I'm Tony Harris and you are in the CNN NEWSROOM.

Hundreds of protesters return to the streets of Iran today despite a strong warning from the country's Revolutionary Guard. The guard says its forces are determined to return peace and tranquility and clean the country of plotters and hooligans.

CNN's Ivan Watson is following developments in the post-election turmoil from our International Desk.

And Ivan, bring us up to speed on what you're following this hour.

IVAN WATSON, CNN CORRESPONDENT: Well, Tony, activists and opposition Web sites promoted at 4:00 p.m. Tehran time a memorial for a woman who was gunned down on Saturday while participating in demonstrations that turned bloody. The woman who is known around the world now as Neda shot in the chest, and this memorial was to be held at Haft-e Tir Square in downtown Tehran.

And what eyewitnesses told us is that, sure enough, at 4:00 p.m., there was a huge, huge police presence in that area, uninformed militia as well, and that they used pepper spray and mace to disperse hundreds of people who were trying to converge on that area. That, in some cases, they pursued people, ran them into alleyways to try to break up people from gathering there to remember somebody killed while participating in what was supposed to be a peaceful protest on Saturday. In addition to that, we heard about helicopters flying overhead, a pretty robust security presence, and a stern warning from Iran's Revolutionary Guard Corps today saying that no protests would be permitted, that the Revolutionary Guard Corps would use force to crush any opposition.

And despite that, let's take a look at some of the video that we've gotten from outside of Tehran, Tony. This is coming from Tabriz. We don't know exactly when it was shot. It was during the course of this week, though, and it shows riot police fleeing from protesters not in Tehran, but in the northwestern city of Tabriz, an Azerbaijan province.

It's very difficult for us to know just what's going on in Tehran right now because of the media blackout. Outside of Tehran, in the provinces, we really have no idea. This is a clue to the turmoil that may be going on in some of these other key cities around the country.

Finally, I want to show you something very important. These are a series of photos taken that have emerged in the course of the past day of clerics. You see the white turbans there, three men, clerics with demonstrators, side by side with them, ,apparently trying to protect them from the security forces. And that's a very important sign for a country that calls itself the Islamic Republic of Iran -- Tony.

HARRIS: OK. Ivan Watson for us.

Ivan, appreciate it. Thank you. Check back with you again next hour.

You know, they're complaining about his approach -- is it too careful, too cautious, too timid? Republicans are demanding a more muscular response on the Iran crisis from President Obama.

We will talk live with our White House correspondent Suzanne Malveaux in just a moment. But first, CNN's Jim Acosta looks at the blistering criticism.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN CORRESPONDENT (voice-over): With Iran quickly becoming one of the biggest foreign policy tests of his administration, President Obama is feeling the heat in Washington, where key Republicans argue the White House is being too cautious at exactly the wrong time.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: There's a monumental event going on in Iraq and, you know, the president of the United States is supposed to lead the free world, not follow it.

SEN. JOHN MCCAIN (R), ARIZONA: And again, it's not so much about Iran, although it certainly is at the moment, but it's also about being on the right side of history.

ACOSTA: At first determined to keep the U.S. on the sidelines and avoid any appearance of meddling in Iranian affairs...

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is of concern to me and it's of concern to the American people. That is not how government should interact with its people.

ACOSTA: ... the president is now dialing up his rhetoric. On the violent backlash against protesters in Iran, Mr. Obama said in a statement over the weekend, "We call on the Iranian government to stop all violent and unjust actions against its own people."

He only had to look out his windows at the pro-democracy demonstrators gathered outside the White House to know how the issue has come home.

But President Obama has his defenders, ranging from conservatives Henry Kissinger and Pat Buchanan, to congressional Democrats who say an aggressive stance against the Iranian government would have tainted the protesters in the streets as American tools.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: It is very crucial, as I see, that we not have our fingerprints on this, that this really be truly inspired by the Iranian people. We don't know where this goes, and I sure wouldn't want to be responsible for thousands of people being killed, which is a distinct possibility.

ACOSTA: Even GOP elder statesman Richard Lugar warns the U.S. has no choice but to engage Iran diplomatically in the future, no matter how the current standoff is settled.

SEN. RICHARD LUGAR (R), INDIANA: We would sit down because our objective is to eliminate the nuclear program that is in Iran. This is...

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Even though they are shooting people in the streets and beating people in the streets and arresting political opponents?

LUGAR: Yes. In order to have any kind of a relationship, we need to be able to talk to people, hear from people, argue with people.

(END VIDEOTAPE)

ACOSTA: But other Republicans have noted, even leaders in Europe have taken a much tougher stance on Iran. Just over the weekend, French president Nicolas Sarkozy called the elections a fraud and described Iran's crackdown as brutal and inexcusable -- Tony.

HARRIS: OK. Jim Acosta for us.

Jim, appreciate it. Thank you.

ACOSTA: You bet.

HARRIS: Let's turn now to Suzanne Malveaux at the White House.

And Suzanne, look, let me start by saying I try not to pay a lot of attention to a lot of the noise that's in our business, and there has been a lot of free advice for this president on what he should do and say about the situation in Iran. Having said that, this weekend the Iranian government went after the West and the president, as you know, pretty hard for what it termed meddling.

Is the White House planning to respond even more directly and forcefully to that criticism? SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, I don't think they are really responding, and I don't think they are going to respond any forcefully to the criticism. We did hear some words from the president in that statement talking about international concern, concern about the violence. We do know that the president met with his foreign policy group in the Oval Office for about 30 minutes yesterday, and then also on Saturday, because he was concerned -- at least aides say he was concerned about the level of violence, what's taking place on the ground.

I want to kind of give you a sense of what the administration's thinking is here. This is four administration officials trying to lay this out essentially, and the first thing they said is that we have heard this before, this warning about, you know, tomorrow is going to be the big day, it's going to be even worse than the one before.

The administration doesn't want to react to warnings that the sky is falling. What they want to do is, every day, gather intelligence, see what's happening in Iran, and then make appropriate statements based on that.

The second thing is here -- and this is one point that they make -- is that the U.S. is not responding to Washington. They are not responding to members on the Hill, but they are talking directly to Iranian reformers. And what they are getting from Iranian reformers is that their stance is the right one, that they are striking the right balance, that they should not change their balance. That's who they are listening to.

And finally, on this point about Sarkozy, France's Sarkozy, other countries using more aggressive, direct language, they say the United States is not going to change its language because France and England and others have tougher words against the Iranian regime, because they say the United States has a completely different relationship with Iran to begin with here, that the United States has been used as a foil, that it has been used as kind of the example of an evil force. And so that if the United States weighed in with harsher language, it would produce a different kind of outcome.

So, those are the three points that the administration is trying to get across. They are not necessarily going to do this tit for tat, President Obama with the ayatollah, but they are, at the very least, trying to explain why it is that they've kind of tried to strike this balance. A lot of people who are frustrated saying not tough enough, but they say they're not listening to those folks, they're listening to the Iranian reformers who say this is the right approach.

HARRIS: And can I -- and just one more quick follow here. Do we have any knowledge of the president or anyone in this administration actually having a conversation with Mir Hossein Moussavi?

MALVEAUX: I am not aware that anybody has reached out directly to Moussavi. That might be something the State Department would be doing, but that's not happening. But that they do understand is that people who they speak with, these reformers, believe that this is the appropriate way to handle this at this time. HARRIS: All right. Suzanne Malveaux at the White House for us.

Suzanne, appreciate it. Thank you.

Along with the protests in Iran, there has been an outpouring of support, really, from Iranian exiles and sympathizers here in the United States.

This is just one of the rallies over the weekend. Demonstrators in front of the White House calling for President Obama to denounce Iran's presidential election.

A similar scene in Los Angeles. Many protesters wearing green, the color of Iranian opposition leader Mir Hossein Moussavi's presidential campaign. You can also hear an orchestra -- let me pipe down for a second here -- all the horns going in the background there in support of the protesters.

CNN's Kara Finnstrom is at a Persian market, a popular spot for many Iranians now living in Los Angeles.

Kara, great to see you. I would imagine the conversation at the market has been dominated by what is going on in Iran.

KARA FINNSTROM, CNN CORRESPONDENT: It really has, Tony. This is a large food market that has a lot of different international shops here. But as you can see from the food right here, different varieties of eggplant, some dates, some cucumbers. This is uniquely Persian.

This large truck just pulled up and is getting ready to load up and take some food back up to the Fresno area. There are more than a hundred different Persian merchants that come in and buy their produce from the owner here. He's been operating for nearly 30 years, and this is him, this is Mohammed.

Hi.

He has been gathering throughout the morning with some of the different Persian merchants here. And Tony, as you mentioned, they have been talking about what is going on in Iran.

A short while ago, there was a gentlemen who was able to get through by phone. He did not want to be on camera because he has family there, he's very concerned for his safety, as well as his own.

But what was he able to learn?

MOHAMMED, PRODUCE OWNER: Well, what he was telling me, he contacted one of his friends in Tehran and the guy told him that the market is -- I mean, the cities are very quiet since yesterday. And the same thing in other cities.

And I was kind of shocked.

FINNSTROM: And then he came back a short while later with a very different story. And explain that to us.

MOHAMMED: Exactly. He came back and said -- the same guy that was talking -- he mentioned his wife and said he was lying about it because he was afraid of his life. And that's why he lied over the phone. And it was a lie and there was a lot of bodies, dead bodies on the streets of Tehran. And that's all we learned from that conversation.

FINNSTROM: Well, we thank you for your time this morning.

Tony, lots of concern, lots of stories going around, people comparing information. One of the gentleman that we spoke with, a large distributor here, actually bought a satellite phone just this week so that while he's on the road he can continue to check updates. These folks looking for any information they can get about the situation over there.

HARRIS: Well, tell them to stay right here with CNN.

Kara Finnstrom for us in Los Angeles.

Kara, appreciate it. Thank you.

Among the hundreds of pictures and stories coming out of Iran, one is becoming a symbol of the protests, the violent death of a young woman on the streets of Tehran.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

HARRIS: Well, this week we will learn about the state of our economy and America's money crisis.

Tomorrow we get a report on existing home sales. Wednesday, durable goods orders, new home sales, and the Federal Reserve makes a decision on interest rates.

On Thursday, the final reading on first quarter gross domestic product comes out. That's the broadest measure of economic activity. It will tell us if the economy is still shrinking and if there are any signs of stabilization.

As we wait for those reports, we turn our focus to gas prices. Prices at the pump have risen steadily for 54 straight days, but finally there's some relief.

Oh really?

(BUSINESS REPORT)

HARRIS: Passengers resisted fare hikes. So what's an airline to do? We'll reveal where to find the hidden fees.

(COMMERCIAL BREAK)

HARRIS: You know, airlines are charging fees for bags, pillows and peanuts. One even considered a toilet toll. Sorry about that. Now they are getting sneakier with hidden fees.

CNN's Stephanie Elam in for Personal Finance Editor Gerri Willis and today's "Top Tips."

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Tony, airlines are nickel-and-diming people to their destinations, for sure. After fuel prices surged last summer, the airlines began looking for ways to charge flyers for things that just used to be basic services.

Back then, passengers resisted fare hikes, so the airlines had to get a bit creative. That's led to a la carte prices. And here are a few examples of the extra fees the airlines have implemented.

If you wish to book a flight online for Allegiant Air, which is a small regional carrier, you'll have to cough of $13.50. And do you like that exit row seat with all the extra legroom on AirTran? That will be an extra 20 bucks. And on many of the carriers, if you book your flight in person or on the phone, you can expect to hand over anywhere between $10 and $45.

And there really are a myriad of ways the airlines can make money off these fees. Let's take United, for example.

The carrier made $259 million in the first quarter just from these fees alone. Revenue fees per passenger rose 60 percent during that period, so that means passengers are paying about $14 in fees a flight. If these revenues continue at this pace, United can rack up about $1 billion in revenues just from fees alone this year.

Usually one airline launches a new fee and if flyers don't revolt the fee sticks and then other airlines follow their lead. But here are a couple of ideas if you want to avoid fees. Consider joining an airline's loyalty program if you fly them a lot. Fees often get waived after you reach a certain level. And another option, well, you can always fly first class or business class. Those levels of service are usually free of all those sneaky fees, but of course they are a lot more expensive to begin with -- Tony.

HARRIS: All right, Stephanie. Appreciate it.

Stephanie Elam, part of our terrific money team.

Let me remind you to check out our special report "America's Money Crisis." That's at CNNMoney.com.

NICOLE LAPIN, CNN.COM CORRESPONDENT: And we know you have questions on Iran. We are taking a step back here. We have a 101 on the government structure in Iran. What does the Guardian Council do anyway?

We have answers coming up on the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Protests against Iran's crackdown happening here in the United States. This is in Dallas yesterday. Dozens of protesters gathered outside the federal building for a candlelight vigil.

This was the scene at Buckingham Fountain on Chicago's lakefront. The demonstrators were giving the peace sign and holding signs urging an end to the violence in Iran.

More tension and turmoil in Iran today. Here's the latest.

Hundreds of protesters gathered in Tehran despite warnings of a stern response from the government. Militia and riot police were trying to disperse the crowd. Earlier today, Iran's Revolutionary Guard warned against more protests and said those who disturb the peace would be met with a strong response.

And Iran's election authority reportedly conceded ballot irregularities in 50 cities but said that did not effect the outcome of the election. The reported admission of ballot discrepancies is unlikely to satisfy opposition protesters.

CNN's Chief International Correspondent Christiane Amanpour has more from London on the Iran election fallout.

(BEGIN VIDEOTAPE)

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: And that admission of potential discrepancies with three million votes in 50 different cities in Iran from the Iranian Guardian Council comes just as an important think tank here in England, Chatham House, has put a lengthy paper describing potential irregularities in the election there on June 12th.

Iran also stepping up its criticism of foreign governments, including Britain, the United States, and other European governments, accusing them of interfering in internal affairs, but also of potentially leading some of the protests. Britain has issued a strong rebuke in rejection of that allegation.

Iran also -- the Foreign Ministry blaming CNN and other foreign media for being involved with the protests. Again, CNN strongly rejecting such an allegation. Iranian state media also carrying reports that Iran says it's arrested more than 400 people, including journalists since the protests began. The Iranian police chief also saying on state media that while its equipped to put down riots and it is equipped with riot gear, it is not been given permission to use any firearms.

There have been reports of at least a dozen deaths officially claimed -- perhaps many, many more according to eyewitnesss and many eyewitnesss have blamed that on the Basij militia -- the hardline revolutionary militia, the vigilantes who are officially unaccountable, but obviously accountable to the state.

HARRIS: You know, we have been talking a lot about Iran and we realize not everyone is up to speed with the government in Iran. Nicole Lapin is here with a little 101 for us. What do you have for us, Nicole? Walk us through this.

NICOLE LAPIN, CNN ANCHOR: Let's break it down, Tony. We've been talking about the supreme leader, about the Guardian Council, and about the president. So, the question is, who are they and how much power do they have? And the first thing is, that -- the question is, who actually has the most power in this government here? And it's the supreme leader with the final saying, of course, to all important matters in the government. We're talking about relations in the west, we are talking about diplomacy and Iran's nuclear ambition.

That all lies with Ayatollah Ali Khamenei, he is the one who supports and appoints those members to the Guardian Concil, which is the country's election authority. He also confirms the presidential election result, which is why he plays so much into this. He is almost 70 years old, Tony, and he was appointed in 1989 for life.

HARRIS: Well, let's talk about the Guardian Council. We talked a lot about this organization and this is the body that ultimately gets to call for a recount or revote -- whatever happens with this election.

AMANPPOUR: Exactly. It's actually the second most powerful entity of this government. It's made up of 12 people in the Guardian Council, the council approves all candidates for office and verifies election results. That's really, as you were saying, the context in which we are talking about it these days because the opposition leader, Mousavi, has of course taken his grievances to that council and they have been taking another look at some of the voting here.

HARRIS: And that brings us to, I guess one of the really important questions here is, who really holds the power? How much power does the president, Ahmadinejad, in this case, really hold?

AMANPOUR: And the honest answer there is, that it depends. It depends on how much he plays nice with the Guardian Council. That's the truth. He is responsible for economic policy and social reforms in the country government, but some of the larger decisions as we were mentioning are made by the supreme leader like the nuclear program we were mentioning. It's not the president, it is the Ayatollah.

So, in theory the president's power second to the supreme leader, but more often in practice, Tony, it's stifled by the Guardian Council. So, he's almost third in line in this Iranian power structure here. In the next hour, we're going to breakdown -- we looked at the government here, we're going to breakdown who we are seeing on the streets or why are there so many young people and who are those guys with the shields who are up against them.

HARRIS: Oh, good. Yes -- a couple different groups in play there. Nicole, appreciate it. Thank you.

AMANPOUR: You're welcome.

HARRIS: It's unclear what impact all of this political turmoil will have on Iran's business dealings with other nations. Just to give you an idea of those relations, Iran imports goods worth $8 billion from China. Germany ships in $5.7 billion, Italy, $3.2 billion, France, $2.6 billion and Japan, nearly $2 billion. All of this is according to an Associated Press analysis and figures from the World Strategic Economic Research group. And, in case you're wondering, the US exported $680 million in goods to Iran last year, despite trade penalties.

One woman has become the rallying cry of the protestors online. Who is Neda, and why has she become the face of the opposition?

(COMMERCIAL BREAK)

HARRIS: You know, social networking sites have helped spread images and video of the protest in Iran, but the story of one woman protestor in particular has deeply shocked Iran and the world. Octavia Nasr has that story, and this warining her report contains extremely graphic and disturbing video that may be inappropriate for children.

(BEGIN VIDEOTAPE)

OCTAVIA NASR, CNN SENIOR EDITOR, ARAB AFFAIRS: Her name is Neda. The facts surrounding her life and her death difficult to verify. She appears to have been a young student who joined thousands of her country men to voice her disapproval of Iran's election results. Eyewitnesses say Basij militia man hidding on a building rooftop shot her in her chest silencing her forever. A man who appears to be her father desperately calling on her to open her eyes.

A stranger begging her to stay awake. Don't be afraid. Don't be afraid, Neda, the man says, but Neda doesn't respond. She dies right there on the street and another protestor capturing her last moments on a cell phone camera. And just like that, Neda who came to the square thinking she's one voice among thousands turns into the voice of an entire opposition movement.

Neda which means the calling, is now on millions of clips across the globe, on the Internet in specially designed avatars -- a life cut down in its prime. One woman's griping story speaking volumes. A grim reminder of the price Iranians could pay for freedom.

(END VIDEOTAPE)

HARRIS: Octavia Nasr, our Senior Editor of the Mid-East Affairs is here. Octavia, this story, I watched it last night on our sister network, CNN International. This story is playing all over the world.

NASR: Really getting reaction from all over the world as well.

HARRIS: And the Iranian government, has it responded in any way to this story in particular, which, as we both mentioned, is being played -- getting wide distribution all over the world?

NASR: No reaction from the Iranian government. We do follow some official websites where we get all kinds of reaction about all kinds of things, not on this story, not on the demonstrators, except that they're are basically critical. They say that they made it clear that it is against the law to go and demonstrate, so anyone who demonstrates is going to face the consequences. This could be one of them.

So, that's the only explanation that they give. They say the people shouldn't be in the streets demonstrating.

HARRIS: It's a response that fails to acknowledge the power of those images and the anger that they can engender, but it's the regime's choice to respond how it sees fit. A huge story on Twitter, correct?

NASR: Yes. A huge story on Twitter. It's getting all kinds of reaction, as we said, from all over the world, from Europe, australia, the US, the Middle East, you name it. People are reacting. They have all kinds of things to say. Let's take a look at some examples that we picked up this morning.

One says more helicopters flying over Tehran today than any previous day. This is a tweet from inside Iran. Basically, people are sending out all kinds of information saying this is in reaction for people trying to go and bury Neda. So they are saying more helicopters flying overhead. Anohter one, Neda's day of mourning will be a day that all dictators around the world we will look at in awe and shock. One more, just saw the Neda sotry, completely speechless what a tragedy.

This is basically what most everybody is saying. And then the reaction towards the government, Khamenie must resign. Iranian Majlis must act now, your obligation is to represent the people of Iran. Really, an outpour of reaction from across the world to the story.

HARRIS: Well, will you please let me know if, in monitoring those sites, there is some kind of a response from the Iranian government to this story in particular?

NASR: I absolutely will.

HARRIS: We appreciate it. Thank you.

Our Ivan Watson joins us again from CNN's International Desk. And, Ivan, a lot of people in Iran are sending us their images of the crisis there. What are we getting in?

WATSON: This has been an indispensable tool I-report. I'm going to show you some video that an I-report contributor sent today. It's from Sunday. Let's take a listen to this nighttime video that he filmed and submitted, Tony.

Tony, that is people shouting from their rooftops, Allah-o Akbar, God is great. Tha is a phonomenon we've heard about night after night in Tehran. A show of defiance against the Iranian governemnt after those really controversial presidential elections earlier this month, which many Iranians have argued were fraudulent. You can see this and we've seen other videos like this in past days. Another piece of I-report footage I'd like to direct you to -- this is from the same contributor showing demonstrators trying to rally in the streets on Sunday. Several hundred people walking down the streets, as we'll see in a second here, chanting at some points, Allah-o Akbar as well. And, this is after authorities crack down -- held such a deadly crack down on Saturday that resulted in the death of that young woman, Neda, and several others.

HARRIS: Ivan, are you surprised, and I mention this because I know how much reporting you've done in the past from Iran. Are you surprised of the role that women are playing in this and seemingly just so courageous?

WATSON: It really is remarkable. I have seen women protesting for their own rights in the streets. They are very strong willed women -- Persian women, as anybody who knows them will tell you. One last contribution that I'd like to point out from I-report, this is from a 19-year-old who we talked to yesterday. Look at these photos here, Tony. 19 years old. She went right up to the security forces.

HARRIS: Yes.

WATSON: Look at this one here. She was up very close to these scary looking riot police on motorcycles who will drive into the demonstrators -- into the crowds of demonstrators and club them. And she was clubbed for taking these photos. She was at home wounded on Sunday when we talked to her. And she contributed these photos. 19 years old, not afraid, and she did do an interview with us live on the air.

HARRIS: It's just amazing courage being displayed by, in particular, the women in Iran. Ivan, appreciate it. Thank you.

Pulling out of Iraq as the violence going on.

(BEGIN VIDEO CLIP)

Reporter: This unit has heard another American convoy traveling elsewhere in the city has just been attacked. Two grenades hit one vehicle -- damaged but no casualties. The US military says attacks like this is still happening on average five times a day in Mosul.

(END VIDEO CLIP)

HARRIS: Is Iraq ready? What are the people saying about the Americans leaving?

(COMMERCIAL BREAK)

HARRIS: And this just in to CNN. Pretty much saw this coming, didn't you? President Obama to hold a rose garden news conference tomorrow, no doubt to respond to the post-election cris in Iran a point we took up with our White House Correspondent, Suzanne Malveaux just a short time ago.

But, in about 10 minutes, the President is going to announce a deal with the pharmaceutical industry, a deal the President calls a turning point toward health care reform. It is intended to help close a gap in prescription drug coverage under Medicare. That live announcement is scheduled for noon, we will of course bring it to you live right here right in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Well, some changes are in store for smokers and the tobacco industry. President Obama signs an anti-smoking bill this afternoon in the rose garden. The legislation gives the food and drug administration unprecedented authority to regulate tobacco. It can order a reduction in nicotine in production products, ban candy- flavored tobacco and block labels products such as low tar and light.

Tobacco companies will be required to put large graphic medical warnings on cigarette cartons. CNN will bring you live coverage of that signing at 2:00 p.m. Eastern time right here in the NEWSROOM.

ROB MARCIANO, AMS METEOROLOGIST: I'm Rob Marciano, check out this video coming in from Michigan. A number of tornadoes are touching down over the weekend. So, they are cleaning up power, getting back online in spots that are able to do that. But certainly, a rough weekend. They also had eight inches of rainfall in that part of the midwest. This is a tropical storm Andres in Mexico -- about 150 miles offshore, gaining strength will likely become a hurricane over the next few hours.

This is from our friends at stormpost.com -- pretty cool animation you can get online. It shows you where Andres is, and the forecast track which will scoot just off the Mexican coastline. As it will does that it will do it as hurricane strength. So it will be raking that coastline for sure. All right. Extreme heat across much of the midsection of the country, from Tulsa to Kansas City, St. Louis all the way down in Memphis, even right down to the Florida panhandle.

This has been the big story the past several days -- unusually warm for this time of year. Today, after all, really the first full day of summer, with summer arriving yesterday morning. It will be 100 degrees in Dallas, 100 degrees as well as in Memphis, and 84 degrees in DC -- 74 degrees expected in New York City, meanwhile it will be like 89 degrees in Atlanta, Georgia.

This other video coming to us from Jacksonville, Florida where they are trying to keep coo. Lifeguards were a lot busier than this guy. About 500 people were rescued yesterday across Volusia County because of the rip currents. So, that's one other thing you need to be wary of as you try to cool off from this heat wave. That's a quick check on weather. Tony, send it back to you.

HARRIS: I always think of that song, Smooth. You remeber that one from Carlos Santana and that Rob Thomas guy? It's a hot one, seven inches from the midday sun. Smoking hot, Mr. Marciano.

MARCIANO: I thought you were going to sing a few bars for us.

HARRIS: Come on, man. Don't make me, you know I will. See you next hour.

Looking ahead to our next hour of CNN NEWSROOM. In just minutes, President Obama will deliver a statement on lowering drug costs for older Americans. The White House is describing this as an historic agreement with drug companies. We will have that live for you.

Plus, her name is Neda. That's the same name as the young female protester seen dying on the street. But, this Neda lives in the US and she's angry at the Iranian government and fearing for her father who is taking part in those protests. We will hear from her and the TSA and its efforts to protect flyers.

Are some of those airport searches and detentions unlawful? We will tell you about a tape recording of TSA screeners that is at the center of a lawsuit. That and more in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: All right. Very quickly, we're just a couple of minutes away from President Obama. We want to get a quick market check with our Susan Lisovicz. And, Susan, as we do that, give us your thoughts on this week. We're getting a lot of financial reporting -- that, although we're talking about durable goods. We'll get a better look at the GDP from the first quarter that will give us a pretty good sense of where we are at least right now with this economy, correct?

SUSAN LISOVICZ, CNN WHITE HOUSE CORRESPONDENT: We'll be hearing from Ben Bernanke and the Federal Reserve, they begin -- policymakers begin a two-day meeting on interest rates. In the statement -- not that we expect any changes in that historic low between zero and a quarter percent, but what policymakers say they are seeing in the overall economy. I can tell you what we're seeing on Wall Street is the negative sentiment and something that we saw last week, too.

The three major averages had been up four weeks -- not last week. We're seeing follow-through today. Why is that? The World Bank, Tony, cut its global forecast to nearly three percent. Expect the global economy to shrink because of this@ recession. It is a sharp reduction from what it had issued earlier this year, 1.7 percent. So -- and it does expect the demand to increase later this year, but at a much tepid -- much more tepid pace. So, that's certainly weighing on stocks.

That's something that a lot of folks here have been talking about anyway. The stock market may have gotten ahead of itself. Yes, things aren't as bad as they used to be. But okay, we took a big leap so, where now? So, markets are given back a little bit. The other thing to watch for today is, of course, we talked about earlier this hour, Tony, that's in the oil pits.

HARRIS: Yes.

LISOVICZ: Crude dropping substantially. Right now, crude is down three bucks because of this report, and despite the fact that Tehran, the violence we've been seeing in Iran, which is a major oil producer, the second largest producer in OPEC, is telling. The fact is, there's a lot of oil sloshing around unused because even if things aren't as bad as they used to be, Tony, global demand is still -- especially on a commercial level, is very short of what it used to be.

HARRIS: Very nice. Susan, appreciate it.

LISOVICZ: Sure.

HARRIS: We see Charles Rangel there, and he has something to say and his hands are going a little bit. That's not Charlie Rangel? Ok. It looks like Charlie Rangel from this vantage point. It isn't. All right. Let's get to the President, who will be speaking shortly. This is a statement on on lowering drug costs for older Americans, and the White House describing this as an historic agreement. We will be talking about this in a few minutes with Elizabeth Cohen, our Senior Medical Correspondent.

The President says that this is a deal that is a turning point to getting health care reform. The pharmaceutical industry actually signing onto this agreement. So, let's take you to the announcement.

BARRY RAND, AARP CEO: Together we will complete the mission of comprehensive health care reform. We want to thank you, Mr. President, for your leadership on this issue. Thank you. I have an opportunity to introduce the leader of the free world, our President, our beloved President, President Barack Obama.

OBAMA: Thank you. Well, first of all, I want to thank Barry Rand for the introduction, but also AARP the organization he so ably represents for coming together with us on this critical issue today. Last week in my address to the American Medical Association, I spoke about the urgent need for health care reform and what will be required to achieve it. One of the things that will be required I said was that everyone in our health care community is going to have to come together and do their part.

In recent days, Chairman Max Baucus -- who has been doing an outstanding job leading the finance committee on this issue, as well as my administration have been in discussions with the pharmaceutical industry to find a way to bring down costs of prescription drugs for America's seniors. I'm pleased to report, that over the weekend we reached an understanding that will help close the notorious donut hole in Medicare Part D.

This is a significant breakthrough on the the road to healthcare reform, one that will make the difference in the lives of many older Americans. I think many of you in the press are familiar with the issue. The donut hole refers to a gap in prescription drug coverage that makes it harder for millions of Medicare beneficiaries to pay for the medication they need.

The way the program is structured, Medicare covers up to $2700 in yearly prescription costs and then stops. And the coverage starts back up when the costs exceed $6100. Which means between $2700 and $6100 folks are out of luck. This gap has been placing a crushing burden on many older Americans who live on fixed incomes and who can't afford thousands of dollars in out-of-pocket expenses. Chris Dodd, who has been an outstanding leader on a whole host of health care issues throughout his career and who is helping to lead the health committee, while Senator Kennedy is undergoing his treatment for his illness.