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Are Bank Bailout Funds Being Used Appropriately?; President Obama Fights Back Against Critics of Health Care Overhaul Plan; New Study Links Pollution to Lower IQ Scores; The Wealth Gap Between Blacks and Whites;

Aired July 21, 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: Here's some of the other stories we are watching right now.

A second inmate who escaped from the Indiana state prison is back in custody. The convicted rapist was found early this morning at his parents' home in Rockport, Indiana. It's about 250 miles away from the prison. This is surveillance tape, in fact, of the three inmates who escaped July 5.

Poker players are invading Washington this week trying to get the game legalized online. Right now, playing poker for money on the Internet is illegal in the United States. A new bill is being considered in order to change that. Supporters are holding a charity game in Washington today to raise money for the USO and Walter Reed Army Medical Center.

The landmark Watergate Hotel in Washington hits the auction block in about 15 minutes. It's in foreclosure. The Watergate was closed in 2007 for renovations that were never done. You'll remember it's where burglars broke into the Democratic Party headquarters setting off the scandal that led to President Nixon's resignation.

The bank bailout programs. $700 billion of your money. Is it being well-spent? This hour on Capitol Hill, we may get troubling answers from the man in charge. Neil Barofsky oversees TARP, the troubled asset relief program. He says the government isn't doing enough to prevent waste and stealing.

Let's get the latest now from Capitol Hill and CNN congressional correspondent Brianna Keilar. Brianna, good morning to you. What is the deal here? These are going to be words people aren't want to want to hear, I imagine.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: No, but a lot of people do want to hear it, as well, Heidi. Because they want to know where this money is going and they want to know what happened with this controversial program.

So, we're going to be hearing from Neil Barofsky. He is, for a lack of a better term, the top cop, the big watchdog when it comes to the bank bailout program and he's going to be talking about a couple things in particular, after filing two reports here in the last few months, we're expecting to hear some very critical words about the Department of Treasury, and we're expecting Barofsky to say that he thinks they should do a better job of getting information from these companies, whether it's auto companies or financial companies who have gotten money from the bank bailout. He says they should be telling the Department of Treasury where all of this money is going.

Now, we're also expecting though that he is going to be talking about how there are some people who have illegally benefited from their knowledge of this program through insider trading and he wants there to be some fire walls basically in place so that they can't happen any more. And the other thing, Heidi, this really dominated so much attention is, of course, that eye-popping number, the $23.7 trillion number. I think we're probably going to hear some about that, too.

COLLINS: Yes. Like what do you think we might hear? Can you tell us?

KEILAR: Well, I think that there is going to be some emphasis on it, of course. This is that big number which, you know, we talk about TARP, the bailout. $700 billion, which is a lot. But hey, you talk about $23.7 trillion. That is the amount that's in this report Neil Barofsky said the federal government and all of its programs do not just get financial, the financial industry through, but consumers through. That's how much money has been available just to move people and move companies through this economic meltdown.

We are expecting them to hit on that and to talk about that number and also, Heidi, I think what we are really going to be hearing is Republicans who are going to be most critical in this hearing talking about the issue of transparency. They see a political opening here. They say the Obama administration promised transparency with TARP and in their words have completely failed to deliver on it. So, look for some political points to be scored.

COLLINS: All right. Understood. Brianna, thanks so much for that.

And while we're at it, we want to bring in CNN.com's Poppy Harlow now with the breakdown on some other monies. Because Poppy, since October, the government has invested more than $200 billion in like 600 banks or so. Do we know what happened to that money?

POPPY HARLOW, CNNMONEY.COM: You know, we don't know a lot of specifics, Heidi. And that's what I think Brianna set it up perfectly. You're going to hear a lot of criticism from some lawmakers in terms of where's the oversight, where is our taxpayer money going? Because the Treasury Department doesn't require the banks to explicitly spell out how they're spending the money through the TARP program. They say it's sort of like pouring money into the ocean. It diffuses so quickly, in so many different places, you can't really track it.

The man in charge of all of this though, Neil Barofsky, he's not buying that, and the latest report just out, he asked, 360 banks to explain what they have done with the TARP funds that they have received. The report shows a few things. Let's take a look that 83 percent of those banks have used it for lending. That was, of course, the original purpose of this program. But the banks have also used the money, Heidi, for a number of purposes, including boosting their own capital base, also making investments, paying down their debt and even buying, acquiring other banks, not the purpose.

Now, Barofsky, he's not going to say this is good or this is bad, but he's pointing out if you ask these banks can account for where that money is and we should point out here, as well, though the banks did not give exact dollar figures. So, 83 percent are lending with TARP money, but we don't know by how much. And again, Barofsky is taking them at their word because he can't independently verify the findings. Heidi, he is relying on the banks to tell him the truth.

COLLINS: Yes. Well, as Brianna also mentioned, Barofsky warned that total taxpayer expenditure could reach something like almost $24 trillion. That is a crazy number. How does it get to that?

HARLOW: It is -- it's a crazy number, and it's a number that's getting a lot of criticism. The way that he gets to it -- it's hard for us to put our head around just $1 trillion let alone almost 24. The way he gets to it is, if he's talking about all of the government rescue efforts, as Brianna touched on. We're talking about not only lending to banks and automakers but also debt guarantees for financial institutions and from the Fed, from the FDIC, the Fannie Mae and Freddie Mac programs, the list goes on. He says add that all up, and you get $23.7 trillion.

Heidi, let's just end on this. That's a worse-case scenario. We'll all be listening closely to see what Barofsky has to say about that number. Because again, a lot of backlash, and the Treasury calling it an inflated figure, Heidi.

COLLINS: Yes, OK. We heard that, too. All right. Appreciate it. Poppy Harlow, thank you.

We have new details on the rescue plan for CIT, a company that is considered a lifeline for many small and mid-size businesses. Some of those companies had said that they may not be able to survive without the lender. Bondholders have struck a financing deal now that will keep CIT out of bankruptcy, at least for now. There are reports it will pay more than 10 percent interest on the loan. Plus, billions of dollars in maturing debt. So we will continue to follow that story for you, as well.

Turning now to Washington, the White House says it will not meet today's deadline of the terror prison at Guantanamo Bay. As you may remember, the Obama administration has vowed to close the facility by January, but that time frame may now be in doubt. The White House says it will need six more months before it can release its policy on dealing with terror suspects. Despite that delays, senior officials insist the prison will still be closed by January, as planned.

President Obama fighting back against critics of his health care overhaul plan. Saying they're putting politics ahead of policy. The president plans more remarks on health care reform today. CNN's Suzanne Malveaux is at the White House with more on this. Suzanne, the president spoke about health care on the "Today Show," in fact, this morning. Did he say anything different?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, he's really reiterating the same point that he has been making for the last of couple weeks. And what we expect to hear on the days to come. He said if you don't set a deadline, nothing's going to happen in Washington, that it's inertia and inaction. He also said that despite the fact that he is putting a lot of political capital, as you know, behind this issue, the weight of this issue, he says that this is not about Washington sport here. That this is about trying to address and solve an enormous problem with the American people.

He acknowledged the part of that enormity, the Congressional Budget Office and nonpartisan group that said, look, the plans that have been put forward so far do not lower the health care costs. They do not necessarily even lower the federal deficit, that it increases the federal deficit. The president was asked about that on the "Today Show" whether or not he felt that they were really ready and that they had a plan that was designed that would tackle these issues. He says they're not quite there yet, but they're working on the details. I want you to take a listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know exactly what they're saying. And what they're saying is that the cost savings that are in those bills right now, some of them may actually work, but they're not enough to offset the additional costs of bringing in 46 million new people.

(END VIDEO CLIP)

MALVEAUX: Heidi, really, it is the conundrum here. The problem if you try to increase the number of people who get health care insurance, how do you lower health care costs at the same time?

The president acknowledged that right now they're still negotiating and they have to find more ways to save money. He was pushed, pressed a little bit about whether or not he agreed at least on one house plan for those making more than $280,000 a year whether or not they would have a surtax, if you will. He said that he didn't believe that taxes should be beyond those who make $250,000 and last, but he kind of left the door open for that possible plan, that possibility and he says he doesn't believe that it's punishing the rich, per se. It is about living in a community and providing for those who cannot.

So, still negotiations going on and this president, Heidi, putting himself out there every single day. There has been a health care event and it will continue throughout the week, really trying to push this idea of getting this thing done by August or at least fairly soon.

COLLINS: All right. Our White House correspondent Suzanne Malveaux for us this morning. Thank you, Suzanne.

And of course, we will bring you live coverage of the president's remark on healthcare reform. It's happening this afternoon at 12:15 Eastern.

Health care is the hot topic on our blog this morning, as well. There's so much discussion out about taxing the rich to pay for tax care reform and we are asking, what is rich? Ponder that and then go to our blog at cnn.com/heidi and post your thoughts or you can call in your thoughts to the new "Hotline to Heidi" number right there on the screen. You can see it for yourself. 1-877-742-5760. And we will read or listen to some of your responses coming up a little bit later in the show.

There will not be a vote today on Supreme Court nominee Judge Sonia Sotomayor. Republicans successfully pushed for and got a delay of today's planned vote. They will now vote next Tuesday. Democrats wanted a quick vote following last week's four days of confirmation hearings. A full Senate vote is really expected before Congress goes on recess next month.

A hard sentiment for a shocking crime. A Chicago judge gives a teenager 100 years in prison for killing the son of two anti-violent activists. According to prosecutors, 18-year-old Michael Pace was looking out for rival gang members when he opened fire on a bus two years ago.

Witnesses say the victim pushed a friend down on her seat before getting hit. His mother says the sentence sends a clear message.

(BEGIN VIDEO CLIP)

ANNETTE NANCE-HOLT, VICTIM'S MOTHER/FIRE DEPARTMENT CAPTAIN: I just think this sends a message across the country, actually, not just here in the city of Chicago that if you kill a child and you're proved guilty that you're going to get a stiff penalty and you're going to go to jail, you're going to do time and you're going to do every day.

(END VIDEO CLIP)

COLLINS: Another boy was sentenced to 10 years in jail for providing the gun.

ROB MARCIANO, AMS METEOROLOGIST: I'm Rob Marciano. Hi, Heidi, how are you doing?

COLLINS: How are you? I was going to welcome you back, say hello once again, but you just take it away. You got some serious stuff to talk about here.

MARCIANO: Well, I always like chatting with you, but I'm like a Pavlovian dog, I see that animation, and it just means go.

All right. We're going to take a quick break, Heidi. When we come back, the back side of it when you talk about a record-breaking cool temperatures in some parts of the country. Meanwhile, record- breaking heat and it's all going to mix up a little bit and we'll talk about where all that hot and cold is going when the CNN NEWSROOM comes right back.

(COMMERCIAL BREAK)

COLLINS: The Pentagon says it's making every effort to get back a kidnapped soldier. Private Bowe Bergdahl went missing in Paktika province in June 30. These pictures are from a Taliban video of Private Bergdahl that surfaced on the internet. Defense secretary Robert Gates called the on-camera exploitation disgusting. Military officials say they believe he is still being held somewhere in Afghanistan. They are using search squads and unmanned drones to look for the missing soldier. We're watching that story for you closely.

Also, defense secretary Robert Gates wants a bigger army. He announced the planned addition of 22,000 soldiers to help fill gaps, caused by operations in Afghanistan and Iraq. Those extra troops would be added over the next three years through increased recruitment and re-enlistments. Right now the Army has 547,000 soldiers and there are close to 200,000 U.S. troops in Afghanistan and Iraq.

Seven people are dead and more than two dozen are wounded after two separate bombings in Baghdad. One bomb went off near an entrance to Baghdad's green zone, a high security area where the U.S. embassy and most Iraqi offices are located. And the other bomb detonated in an area where construction workers hang out in Baghdad's Sadr City. Baghdad officials believe the bombers may have targeted a convoy for one of their ministers.

Rob Marciano joining us now once again to talk a little bit more about summertime. But for some people it doesn't really feel like summertime over the last couple days.

MARCIANO: No. I mean places that would typically be pretty hot and pretty humid, and this includes, you know, maybe the entire eastern third of the country, especially near the Atlantic seaboard. You know, what I'm talking about. It's been comfortably cool in some places, maybe too comfortably cool. You'd like summer to come back at you.

Actually, what we had going across the Midwest yesterday and last night across the plains is some pretty rough and tumble weather. And we're seeing the convective system here that I left over from what went through Kansas and Oklahoma and brought winds and hail that you might see in April and May as opposed to July.

So, kind of a late-season deal. It's obviously all heading towards this way. There's some rough weather in it, some certainly some frequent lightning and some gusty winds. And there's probably some left over hail as well. Less violent variety of rain, something that the folks in the New York City Metropolitan area certainly have gotten used to the last few what weeks, months.

Moisture coming off the ocean and temperatures right now are certainly on the chilly side with temperatures about 64 degrees. There's a shot of Central Park. So, not the best day to go out there and do your thing around the reservoir.

Heavy rain right now, and that's going to continue, as you can see here on the radarscope. Tomorrow looks to be a little bit better of a day, but today 74 degrees New York City, 86 degrees in Atlanta and they're very, very cool. Temperatures in the 90s and over 100 in Texas. That's where the record-breaking heat has been.

We're going to start a bit of a shift and high pressure which typically would be out towards Bermuda this time of year. They call it Bermuda High. It's finally going to get there, and that will start this influx of humidity and heat for the folks who typically see it this time of the year. The southeast, the mid-Atlantic and parts of the Midwest and up through the Northeast, but that won't come until tomorrow and the next day.

In the meantime, for the folks who have been enjoying the comfortably cool air, Heidi, should continue to enjoy it, at least for today. A couple of airport delays, New York, Newark, San Francisco and Atlanta but nothing too major at this time.

COLLINS: Yes. I don't know, it's golfing weather to me.

MARCIANO: Just do it. I haven't played in, like, a month.

COLLINS: You still play?

MARCIANO: Yes, still poorly.

COLLINS: OK. Very good. We're going to talk about that off air. Thanks so much, Rob. Appreciate it.

MARCIANO: You got it.

COLLINS: Pregnancy and air pollution. Concerns about the IQs of children being born in urban areas.

(COMMERCIAL BREAK)

COLLINS: A new study links urban air pollution with lower childhood IQ scores. Children exposed to the most pollution in the womb had lower IQs compared to children with less exposures.

Our chief medical correspondent Dr. Sanjay Gupta here now to talk more about this. All right. So you know me, I always want to know who did the study, how many people did they talk to? What is the scoop here?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Right. So we're not ready to draw an absolute cause and effect here. But this is something I have been fascinated with for some time. I actually - I spent some time with the authors of the study. As the study was starting.

COLLINS: OK.

GUPTA: And see how it sort of all play out. It was fascinating the way the do it. They have 700 women, pregnant women walking around New York City with these backpacks. You can see the backpacks there. They're sort of like these lungs, these fake lungs that measure all these different toxins that a woman would likely breathe in while she's pregnant.

I'm trying to figure out is there a relationship between pollution, the amount she breathes in and the impact on your developing baby. And that was the real crux of the question the researchers are trying to figure out. What they found after they followed the pregnancy, they followed the delivery and the kids were five years out, and in fact, kids who had exposure to the highest pollution while in the womb had IQ points that were slightly lower than kids who didn't, about four to five points lower, which isn't a lot.

COLLINS: Yes.

GUPTA: It's not going to make a huge difference in school. But it sort of speaks to this issue, is there some relationship between pollution and your overall, and the development of the baby. They really focused on the substance called polycyclic aromatic hydrocarbons. You don't need to remember that, PCHS, but one thing about these substances, you can see them. That's what they are they come out of exhaust, come out of factories.

COLLINS: It makes you cough.

GUPTA: It also crosses the placenta, which is something that I think is important here. I spent time with the lead researcher Frederica Perera about the specific issue, and she points out again that, you know, we're not talking about huge differences but over time continued exposure to this pollution, are you starting to bend the curve downward in terms of intelligence levels as a result of these exposures.

COLLINS: Yes, and I don't have an answer to this but as we look at video like that, when we say exposure to pollution, we're just talking regular everyday life of New York City, for example, where some of that was shot. You're just walking down the street or are we talking about like people who work in a factory or I'm sure all of that was accounted for.

GUPTA: One thing I think that's worth pointing out is that you don't have to be living next to a factory that's belching out all sorts of different pollutants to get the exposure. That's one thing that came out of the study as well.

On the other hand, there are probably a lot of things you can do on any given day to try and mitigate your risk, mitigate the impact of this.

COLLINS: Like?

GUPTA: Well, I talked to her specifically about this. I'm hearing all these, and I got three kids and I'm thinking, "Well, tell me what you do." Here's what she said. (BEGIN VIDEO CLIP)

GUPTA (on camera): Since I spent the day with you here, it's a little bit scary to when you think about being outside and breathing in all this stuff and these assaults on our bodies. I mean, how do we know how to protect ourselves without overdoing it, with being sensible?

DR. FREDERICA PERERA, COLUMBIA UNIVERSITY: Well, I think that's the key is being sensible and not panic and doing things that are reasonable.

(END VIDEO CLIP)

GUPTA: Yes, went on to say, you know, shutting your windows during high pollution season and trying to plan your walking routes, for example, to avoid the most congested parts of the day. But I think it's not all on the individual, part of it is in the community and the city as well.

Idling law, for example. New York City, as you may know, not letting your car idle in front of buildings, it is starting to make a difference in air quality, but studies like this sort of remind us of why we need to do that.

COLLINS: Yes. Interesting to do studies like this around other parts of the world.

GUPTA: That's right.

COLLINS: Where they deal with a lot of pollution.

GUPTA: It's not just in a New York-centric issue.

COLLINS: All right. Dr. Sanjay Gupta, thanks so much. Very interesting. Appreciate that.

Also, we are watching this story today, it's a big gap and it's growing. Wealth disparities between black and white families. We're discussing ways to level the paying field.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.

COLLINS: Your money. It is front and center on Capitol Hill today. Right now, Federal Reserve chairman Ben Bernanke is discussing the economy. Is a recovery on the horizon?

And in another hearing, lawmakers are getting an update on the bank bailout and they'll hear some troubling warnings from Neil Barofsky seen there on the top box. The man overseeing the $700 billion program. He says the government isn't doing enough to prevent waste and stealing.

Also for more on what the Fed chief is saying, let's go to Susan Lisovicz now. She is at the New York Stock Exchange with details on this. So Susan, you probably have been listening in, any hope? By way of what Bernanke says about everything?

SUSAN LISOVICZ, CNN CORRESPONDENT: You know, it's, yes, I would say that there is hope, but we have to be patient and it's not easy to do so when we're in such a long recession and when so many millions of Americans are suffering.

I mean, this is basically what every Fed chairman does. He goes on Capitol Hill for two days and talks about the state of affairs. What the fed chief is saying in his prepared statement right now is that the recovery is likely to be a gradual one and it will begin next year.

Of course, he says the Fed, the Central Bank is focused on fostering economic recovery and that the Fed has an exit strategy. In fact, in a rare "Wall Street Journal" op-ed piece today, the Fed chairman said "economic conditions aren't likely to warrant tighter monetary policy for an extended period. We will calibrate the timing and pace of future tightening to best foster our dual objectives of maximum employment and price stability." That is a quote from the op- ed page.

The bottom line is, the Fed's not ready to use the exit strategy just yet. The economy, the recovery isn't there yet. Stabilization, yes, not recovery. Heidi?

COLLINS: Yes, no. Can you talk a little bit more about the exit strategy, and I would imagine in the middle of it all, you have to consider inflation.

LISOVICZ: Well, that's the bottom line. You know, you have to think of the economy as a very, very sick patient. The Federal Reserve has thrown all sorts of medicine at it. Some extraordinary therapies. The Fed knows that, yes, if the patient can recover from that, but there are all sorts of side effects from these therapies and it has to withdraw just when is the big question. If you withdrew too quickly of course, they can be a setback, in this case, the economy.

But on the other hand, that inflation. What can the Fed do? It can raise interest rates, but the Fed has said it will keep the interest rates near zero for extended periods. The other thing, of course, is all this extraordinary lending that has occurred, the balance sheet which has just become so much larger. The Fed lending, Bernanke said, is that lending the banks drop to $600 billion, that's huge, but it was $1.5 trillion at the end of last year.

So, you're seeing just sort of recovery there, and the Fed is keeping its eyes on the prize to withdraw this stimulus as soon as it can without setting the economy back.

Just quickly, what we're seeing here on Wall Street in the meantime, the Dow up for a seventh straight day and NASDAQ giving back a little bit. Heidi, back to you.

COLLINS: OK, very good. Susan Lisovicz watching all the numbers for us. Thank you.

LISOVICZ: You're welcome.

COLLINS: California now. The budget stalemate may be over, and the state may be able to issue checks once again. Of course, you remember, the state ran out of cash earlier this month and had to pay bills with IOUs. Well, yesterday, governor Arnold Schwarzenegger and legislative leaders finally hammered out a budget plan. They've been trying to balance the budget and close $26 billion shortfall without raising taxes. Until now, they haven't be able to compromise on where the cuts can be made.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZNEGGER, CALIFORNIA: We've accomplished a lot in this budget, and I wanted to thank the legislative leaders for hanging in there and negotiating all these weeks and especially the last few hours. It was like a suspense movie, but, like I said, we have accomplished a lot.

(END VIDEO CLIP)

COLLINS: The budget deal comes up for a vote on Thursday. It calls for deep cuts to programs and relies on borrowing from local governments.

Still talking about numbers, and we want to tell you about some startling ones now. Big wealth disparities between African-Americans and whites. Numbers from the Federal Reserve suggest the average black family only has about a tenth of the cash average white families have.

Some people are teaming up with advocacy groups to help shrink that gap, including George Fraser. He is the CEO of Fraser Net and the author of "Success Runs in Our Race." And he is with us today.

Nice to have you, George. We appreciate your time today. First off, when I give that statistic that the Federal Reserve has put out there, why the wealth gap? What is the deal with that?

GEORGE FRASER, CEO AND AUTHOR, "SUCCESS RUNS IN OUR RACE": Well, there are some significant reasons. First, there's a long history of oppression and institutionalized racism in America which has impacted our financial heritance -- our inheritance. We have lower home ownership in the black community. There's a lower marriage rate in the black community, we have mismanaged much of our money in the black community, and that is the result of poor education and thinking and networking and modeling and complacencies.

So, we have to fix that and that has resulted, quite frankly, in us being the baby boomer generation and the first generation of African-Americans to raise another generation of African-Americans that will not do better than us. Our ancestors must be rolling over in their graves.

COLLINS: And so, what you're saying is, that has to do mostly with racism.

FRASER: Not mostly with racism, but there's a long history of institutionalized racism and oppression. But we know that the past does not equal the future. And this is a land of opportunity and we're not poor people, we're just broke people, and we need to fix that in the 21st century. We're $900 billion consumer spending economy. If we were a nation, we'd be the thirteenth or fourteenth richest nation in the entire world. So, we have to manage our money much better than we have in the last 10 to 20 years.

COLLINS: Yes, it was interesting when we heard President Obama talking to the NAACP. I'm sure that you were aware of that speech in talking about, "Stop thinking of being black people as victims and focus more on education and money." What do you have to say about that?

FRASER: I think the president was spot on when he said that. And I think that's really sort of the macro vision for black America in the 21st century. That's what we teach at Fraser Net with the 51,000 black professionals in our network.

One, get beyond victim thinking and use new technology, use coaching, our black psychologists, our black personal coaches can help in getting beyond victim thinking, because the past does not equal the future. Yes, we must focus on education, no question about that. We must get involved with the education of our children, we must take responsibility for those children, we must add to the whole educational component, teaching entrepreneurship and networking and teaching African and black history so that we really know who we are and really what our strengths are.

So, the educational component is critically important, and that must not only be driven by our primary and secondary school and our colleges, but also driven into our historically black organizations and churches, as well as we have to deal with the issue of economics. And that is...

COLLINS: Well, exactly. You talked a lot about wealth building. Tell people what that is and what you mean. I think you mean something different than just saving. A lot more going on here when you talk about building wealth.

FRASER: No question about it. Wealth is critically important because wealth determine where you live. Where you live determines where you send your children to school. Where you send your children to school determines where they will get a higher education, and where they will get a higher education will determine their life-long earnings. And that will determine where your children live and where they live will determine where your grandchildren will go to school.

So, wealth is critically important, no question about it. Then in a market-based economy, in a democratic capital-based society, the only color that really matters is green. So, until our pile of green is as big and as high and as deep and as wide as any other cultural group's pile of green, we will never be considered an equal at the democratic table of capitalism, Heidi. Finally, on that point, when we finish pontificating ad nauseum about our issues, somebody's got to write a check. We have to put ourselves in a position to write a check, and economics is critically important. We have to recycle our dollars, we have to spend more money with our businesses, we have to go into business development because the wealth of this country is about equity and ownership.

COLLINS: Yes. I want to make sure we're able to get this in, because CNN's "Black in America 2" is premiering tomorrow and one of the groups in the documentary actually starts its own urban project. I'm just curious, and it's in order to build wealth in the community that we're talking about here. What do you think of that message. I mean, does wealth really need to be built in a community?

FRASER: Oh, absolutely. I think the two fundamental goals when it comes to economics, one, to help black people transfer their wealth into generation, to build wealth that can be transferred into generationally and to make black people number one employer of their own people. That's critically important.

And by creating working jobs for our people, recycling our dollars -- the Atlanta Business League has an interesting statistic. Blacks in Atlanta in the five-county area spend $21 billion a year, and less than $5 billion of those dollars are recycled into black businesses. If an additional five percent was recycled back into black businesses, that would create 40,000 new jobs in Atlanta in a single year.

So, recycling dollars, building businesses, creating working jobs for our people is the only way to raise up the poor, and we have to do that. That has to be the macro plan for black people in America. Get beyond victim thinking, focus on education with a caveat of emphasis on entrepreneurship, not just get a good education and get a good job, that's important. But get a good education and create a job. That's critically important. So, we have to have a macro and a micro strategy.

COLLINS: Got it. George Fraser, we sure do appreciate your time here. Thank you very much.

FRASER: Thank you.

COLLINS: In fact, some astonishing stories on "Black in America" are on CNN.com. Plus, you can share your views. Our Josh Levs standing by with a few examples of this. Pretty extensive Web site, Josh.

JOSH LEVS, CNN CORRESPONDENT: It is. He went all out on this. Let me just show you. We'll zoom in on this. You can't miss it. It's on your screen. CNN.com/BlackinAmerica. Easy to remember.

Let's zoom in. Check this out. When you get there, every time you see a green line, that's a different story. So we're packed with all sorts of different stories here. One of the most popular features, this is called Journeys. We have a little clip of a video. Take a look at this. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Action!

MALIK STANFORD, JOURNEYS DOCUMENTARY SUBMITTER: My name is Malik, and I'm 12 years old and this is my documentary.

(PEOPLE CHEERING AND CHANTING)

UNIDENTIFIED MALE: Are you doing the video journal thing?

(END VIDEO CLIP)

LEVS: Let me tell you what you're looking at here. This is a clip from someone for "Journey for Change." This is one of several young people who took part in this. Next, let's zoom in for a second. You can see a lot of young people, each was given a camera. And they brought this along with them. It's Journey for Change that was organized by activists (INAUDIBLE), very well-known to many people.

Well, CNN gave some of them cameras and they took them with them on their trips to South Africa, also to visit the United Nations and Washington, pushing for change. Very interesting to see their stories and couple other things I want to show you here.

This is one of the most popular stories. CNN.com/BlackInAmerica tracing Michelle Obama's slave roots. What you can do here is see a little bit about her ancestry, her African-American ancestry. This right here, a former slave house in which some of her ancestors live. She has roots there. And this is believed -- the first lady's great, great-grandfather lived in one of these slave homes. Tracing their story -- interesting.

Also, some other lighter stories. Like this one a celebration and story about black hair. This is about a white family that adopted a girl, wanted to take care of her hair, and what it signifies on a broader level -- culturally speaking -- and discussion about that. It says that whether it is long, short, natural, straight, weave, blah, blah, blah, it says hair is an important part of black identity and also a $9 billion industry.

Looking at business, looking at history, looking at culture, so many things all packed into this one Web site and adding more, Heidi, all the way up to the big show tomorrow night.

COLLINS: All right, very good. Thank you, Josh, appreciate it. And Josh is right, tomorrow night starting at 7:00. The countdown to an all new "Black in America 2" live from Times Square. At 8:00, President Obama's news conference, and then join us for the first two hours of a two-evening "Black in America" event.

Singer Chris Brown breaks his silence. What he has to say months later after pleading guilty to assaulting his girlfriend, Rihanna.

(COMMERCIAL BREAK) COLLINS: Right now, secretary of state Hillary Clinton is in Bangkok, Thailand, meeting with its president and talking about the growing concern over possible military links between Thailand's neighbor, Myanmar, and North Korea. She told reporters a relationship like that would be destabilizing and troubling. Clinton goes to the resort city of Phuket tomorrow for a regional summit.

Vice president Joe Biden also on the go today. He's in Kiev, Ukraine, reassuring its leaders the U.S. supports Ukraine's bid to join NATO. Russia opposes it, and polls show so do most Ukrainians. Tomorrow, Biden visits Georgia, another pro-Western former Soviet Republic.

CNN meteorologist Rob Marciano in the house. Do you speak German and Greek and all sorts of things?

ROB MARCIANO, AMS METEOROLOGIST: Yes. (SPEAKING IN DUTCH)

COLLINS: That's very good. Extremely impressive...

MARCIANO: (SPEAKING IN DUTCH)

COLLINS: Okay, that's pretty good.

MARCIANO: Means you're a beautiful woman with lice. I'm sure you don't have lice.

(LAUGHTER)

COLLINS: Okay, okay.

MARCIANO: You know, I don't speak well.

Hey, listen, as long as we're on the international thing. You mentioned our world leaders kind of poking around a little bit. Want to talk about what will happen tonight on the other side of the world...

COLLINS: On the other side of the moon?

MARCIANO: ... and that is a total eclipse of the sun. This is the path across parts of parts of Asia. India's going to see it, parts of China will see it. Weather will get in the way of it in some places, including Shanghai, China, where this is the most populated part of the world we'll be able to see this. But weather is not going to cooperate in spots. Shanghai, where a lot of people are flying to just to see it...

COLLINS: Oh, and they're not going to get to see it.

MARCIANO: They may not get a good look at it, and we won't either because we will be sleeping, and it will be dark. That is the latest on the...

COLLINS: That was great. Thanks, Rob.

MARCIANO: You know. Some of our viewers care about what's going on over there and they may have friends over there.

What is going on across parts of the Atlantic. Here we've got a couple spots that the National Hurricane Center is watching. One off the Bahamas and one in the eastern Caribbean for potential development of some sort for maybe a tropical depression or a storm. Problem is, we've got some pretty good winds that are cranking out of the West to the East and typically knocks these down. At this point, we don't expect to see a whole lot, but, nonetheless, the National Hurricane Center is certainly keeping a lookout for that.

Meanwhile, across the Lower 48, we have thunderstorms across the southern Plains, including Texas. There you go, Little Rock back towards Dallas -- this is where we saw lots of action this morning -- and last night, some heavy duty thunderstorms with big-time hail and a lot of wind, and the hits just keep on coming across New York metropolitan area with more rain on the way for today, some of which could be heavy at times.

A few temperatures, comfortably cool. Eighty-six degrees in Atlanta, and most folks who have been seeing these cool temperatures will start to see things warm up with more humidity, more typical summertime weather in the next couple days.

COLLINS: They'll like that. Going golfing. Today, before it all comes back.

MARCIANO: All right. Well, report back with your score. No cheating.

COLLINS: Oh, no, no, no, no. I don't cheat, but I don't keep score, either. All right, Rob, thank you.

MARCIANO: All right.

COLLINS: We are finally hearing from R&B singer Chris Brown. He publicly apologized after pleading guilty for assaulting his girlfriend Rihanna. Here's a bit of what he had to say in a video statement posted on his personal Web site.

(BEGIN VIDEO CLIP)

CHRIS BROWN, SINGER: I wish I had a chance to live those few moments again, but unfortunately, I can't. I can't go into what happened, and most importantly, I'm not going to sit here and make any excuses. I take great pride in me being able to exercise self- control, and what I did was inexcusable. I'm very sad and very ashamed of what I've done.

(END VIDEO CLIP)

COLLINS: That a teleprompter? A publicist for Rihanna has not responded to CNN requests for comments on the apology. Brown's sentencing requires him to go to domestic violence counseling. The judge said he cannot have contact with Rihanna again until that is complete.

Is health care reform becoming a modern-day Robin Hood story? We look at one example of how the rich could foot a big part of the bill.

(COMMERCIAL BREAK)

COLLINS: It's called Measure F, as in funding. And if voters pass it today, Oakland, California would become the first city in the country to tax medical marijuana. That could mean an extra million dollars a year for a city that is $80 million in a hole. A major backer of the tax? The businesses that dispense the medical marijuana. Owners say they want to help the city and hopefully improve their image.

New developments as lawmakers work to crack health care reform today. Here's what we know. Senate Finance Committee leaders meet today to try to work out a compromise plan. Committee chairman Max Baucus said there has been agreement on major significant issues, but he gave no details. An aide to Speaker Nancy Pelosi said she's open to a change in the House Democrats' bill. Pelosi is suggesting starting the surtax for individuals making up to $500,000 and families making $1 million. Conservative Democrats have raised concerns for small businesses facing lower surtax starting levels.

President Obama says the wealthiest Americans should pay more than others to help create a new health care system. CNN's Carol Costello looks at how big a bite that could be.

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN CORRESPONDENT (voice-over): On the subject of health care reform, President Obama is fighting back.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: One Republican senator said, and I'm quoting him now, "If we're able to stop Obama on this, it will be his Waterloo. It will break him."

COSTELLO: But Mr. Obama and the Democratic National Committee are not about to be broken, not even by their own party. The DNC launched this ad, aimed not at Napoleonic Republicans, but at conservative Democrats.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's time.

UNIDENTIFED FEMALE: It's time for health care reform.

(END VIDEO CLIP)

COSTELLO: Turns out some Democratic small business owners who make over $280,000 a year don't want to pay a surcharge on their income to pay for the president's trillion-dollar health care program.

So, Democratic House Speaker Nancy Pelosi has come up with an alternative plan. Instead of raising taxes on those who make more than $280,000 a year, she wants a proposed surcharge to apply to individuals making over 500 K a year and couples making more than $1 million. Pelosi figures, "... you hear $500,000 a year, and you think, 'My God, that's not me.'"

But "me" does apply to around 1 percent of taxpayers, and some of them aren't happy, either. According to the nonpartisan Tax Foundation, an self-employed couple making $1.5 million a year in Montgomery County, Maryland, now pays $583,863 in total taxes. After 2010, when the Bush tax cuts expire, their taxes will go up more than $62,000. Throw in a 5.4 percent surtax for health care reform, that's $9,000 more. Total estimated taxes on the year? $655,126.

And while that may sound like a fine way to raise revenue, economist Peter Morici says that won't begin to pay for the kind of health care reform the president wants.

PETER MORICI, ECONOMIST, UNIVERSITY OF MARYLAND: He is going to need that surcharge on the wealthy, and it's going to be bigger than anticipated or he's going to have to tax everybody.

COSTELLO (on camera): The Congressional Budget Office is weighing in, too. It says the House bill as it is now will increase the nation's deficit by $240 billion by 2019. And that's something the president doesn't want to see happen. He wants to combine cost savings with extra taxes on the rich. That way the deficit will not grow.

Carol Costello, CNN, Washington.

(END VIDEOTAPE)

COLLINS: We will be bringing you live coverage of the president's remarks on health care reform coming your way this afternoon at 12:15 Eastern.

Also, want to take a minute to bring you some of these pictures. We're bringing in Rob Marciano, too, to help (INAUDIBLE). We're looking at some pretty serious storm damage here. I guess, Rob, these are pictures coming in from the Denver area. As I said, our KOSA station there talking about 50,000 people without power, flooding and lightning, hail, all kinds of stuff. You tell me what you know.

MARCIANO: Yes, this is pretty much the remnants of what happened last night. All is quiet for the most part right now.

But last night, Colorado, including parts of Kansas and Nebraska, as well, saw a system and we mentioned this earlier, very similar to what you'd see in May or early June. More so when primetime severe weather season happens. In this time of year, in June, July and August, jet stream's a little farther to the north, and you don't get quite the punch in the atmosphere. But last night, these guys did.

A tornado warning that was out for about 30 minutes in Denver and Jefferson Adams and Arapaho County, for that matter. There was a tornado reportedly touched down, roped very thin tornado touched down in Arapaho County. For the most part, heavy winds, heavy rains as well, and in some cases over 70 miles an hour. You're seeing some of that damage, mostly from trees down. Not only done damage to the car and the roof, but also the power outages, which you mentioned. COLLINS: Yes. And looks like hail there on the ground. I'm reading in Arvada something like inches and inches of marble-sized hail.

MARCIANO: It will pile up, especially in places that are a little bit at altitude and Denver being the low spot of 5,000 feet.

COLLINS: Thank you, Rob, appreciate it. We're back in a moment in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: The bank bailout czar released an interesting report yesterday, and today he's answering questions on Capitol Hill. I'm Heidi Collins. CNN NEWSROOM continues with Tony Harris.