Return to Transcripts main page
CNN Newsroom
Judging Sonia Sotomayor; Delay on Health CareVote; Horrors of War Come Home; Global Outcry Over Raped Girl; City of Cambridge Hopes to Learn From Arrest of Professor; Some Towns Still Waiting on Stimulus Funds; Housing Market Shows Promising Signs of Revival; How Marines Try to Avoid IEDs
Aired July 27, 2009 - 13:58 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: We're pushing forward now to a pivotal day in American justice. Tomorrow, the Senate Judiciary Committee due to pass judgment on Sonia Sotomayor, President Obama's choice to replace David Souter on the U.S. Supreme Court. The outcome isn't in doubt but the party breakdown is.
At least three of Sotomayor's toughest Republican questioners are saying that they'll vote against her. Some other Republicans plan to join most, if not all, Democrats in supporting Sotomayor. So, it's just a matter of time before she joins the high court. The White House wants her in place by the start of the new term in October.
In the meantime, CNN's Candy Crowley joins me to handicap the voting. Candy, first off, you've got Orrin Hatch, John Cornyn, also Jeff Sessions still saying, nope, going to vote against her. What's their beef?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, they believe that from her writings and some of her court decisions that she has taken race and gender into account when she made rulings, and when she made these statements. We all remember the "Wise Latina" remark. So, they believe that's activist judicial activity, and they believe that that's how she would act on the court. So they're going to vote against her, knowing full well, of course, that she will be confirmed.
PHILLIPS: So, bottom line, just because they vote against her, is it just to make a statement? Because it's not going to blow her out of the running.
CROWLEY: No, but remember, these are people who believe what they're saying, who say listen, she's just an activist judge, and I can't go for this. And you do make a point, and you make points back home in saying look, this doesn't reflect my state, if that's how they feel. Certainly, Orrin Hatch doesn't have much to worry about in Utah. He keeps getting re-elected.
John Cornyn just got re-elected, he's from Texas. About a third of the population there is Hispanic, but he says, and he's a former judge himself, says, listen, this is just not the kind of judge that I want to put on the bench. So -- and you have this split between Republicans, really. You have someone like Lindsey Graham, who has said, I'm going to go ahead and vote for her. He believes that if the person is qualified, the president ought to get the nominee he wants, because that famous saying, elections have consequences.
There are others who believe that if you think this is an activist judge, or this is a judge that has ruled too liberally for your tastes, that you ought to go ahead and vote against her. So, you will see a split among Republicans.
I think the only mystery left to all of this is how many Republicans will end up voting for her. We do know of five, not all of them in the committee, obviously, but we do know of five Republicans who have said they are going to vote for her. You add that to the 60 senators who caucus with the Democrats, you've got 65 already. So, what we're looking for is whether or not she runs up that Republican vote.
PHILLIPS: So how soon for the Senate floor vote? What do you think?
CROWLEY: Next week.
PHILLIPS: Next week?
CROWLEY: I think you'll see a couple days, maybe three days, perhaps pushing into four, depending on how long Republicans want to talk and put their statements out there and on to the record. But you will -- barring something unexpected, you will get her nomination on the Senate floor, and probably by late week she will be confirmed.
PHILLIPS: And we'll talk again then. Hopefully more, though. I don't want to wait a week to see you again. OK?
CROWLEY: OK. It's a deal. Me, neither.
PHILLIPS: All right. Candy Crowley, thanks so much.
CROWLEY: Sure.
PHILLIPS: Well, now the battle over health care. A key Democrat senator says that reform can't be done without some Republican support, but the Speaker of the House says she'll have the votes to get a bill passed this year.
In an interview with CNN's John King, Nancy Pelosi brushed aside Republican complaints that the White House and its allies are moving too fast.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: It's not a question of rush, it's a question of the American people who have been waiting a very long time for health insurance that gives them confidence, that if they have a pre-existing condition, or if they lose their job or change their job, or start a business, that they will have health insurance.
JOHN KING, CNN SENIOR NATIONAL CORRESPONDENT: You have the votes?
PELOSI: When I take this bill to the floor, it will win. But we will move forward. This will happen.
(END VIDEO CLIP)
PHILLIPS: All right. Well, CNN's Brianna Keilar is on the Hill.
Brianna, so, when will the House vote on health care?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: That is the question, Kyra. You heard Speaker Pelosi say she's confident it will pass the House, but exactly when, we just don't know at this point. And the question is, is it going to pass before the House leaves for recess at the end of the week?
Well, at this point, we're hearing a lowering of the bar from a lot of Democrats here on Capitol Hill. Democratic aides telling us now that one of the real goals is just to get health care reform through the last of three House committees that it needs to pass through before it can go to a full vote on the House floor. That committee is the Energy and Commerce Committee, and it is in this committee where we saw the big hang-up on Friday, Democrats versus Democrats, really fiscally conservative Blue Dog Democrats who just are not on board yet.
Well, Kyra, guess what? They are still not on board. They still have major points of contention with the Democratic health care reform proposal that's being pushed through Congress. And so there's a meeting that's going to be going on here later today between the chairman of that committee, Henry Waxman, and the Blue Dogs, led by Mike Ross of Arkansas.
So, the goal here now, it seems, just to get it through this committee. And whether there's going to be a vote on the House floor, it is by no means definite. And there's a lot of work to get done just to get it through this committee -- Kyra.
PHILLIPS: And how about Senate action?
KEILAR: Yes. We know that there's not going to be a vote before the full Senate. So the goal now there is to see what the Senate Finance Committee is doing.
We've been watching them now for weeks, it seems, just staking outside of the rooms that they have been meeting in, these key members, Democrats and Republicans, six of them in particular. So they're trying to come to an agreement, but they just won't be pinned down as to whether they're going to come to an agreement and whether they're going to vote on it before they leave for recess a week after the House does here in a couple of weeks. One aide telling me, Kyra, we'll get there, but not being pinned down on when.
PHILLIPS: Yes, that's always the big question, when.
All right, Brianna. Thanks.
The United States and China, with the world mired in recession, it could be the most important relationship on the planet. Now the two are getting together to try to find a solution. Obviously no easy task.
President Obama, kicking off a two-day meeting in Washington, is thinking only in terms of making progress.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My confidence is rooted in the fact that the United States and China share mutual interests. If we advance those interests through cooperation, our people will benefit and the world will be better off, because our ability to partner with each other is a prerequisite for progress on many of the most pressing global challenges.
(END VIDEO CLIP)
PHILLIPS: In other related sensitive issues on the table, climate change, human rights, nuclear proliferation, and also terrorism.
Well, our soldiers are trained to protect, to fight on the battlefield and take out the enemy. When they come home, adjusting can be tough. And at Fort Carson, Colorado, some soldiers from the 4th Infantry Division, the 4th Brigade Combat Team, have been linked to beatings, rapes, DUIs, drug deals, kidnapping and murders.
Reporter Dave Philipps from the "Gazette of Colorado Springs" actually spent months interviewing soldiers and family members about the violence. I had a chance to speak with him just a few minutes ago about the case of Kenneth Eastridge, a former soldier now serving 10 years in prison for his part in the murder of a fellow soldier.
(BEGIN VIDEO CLIP)
DAVID PHILIPPS, "GAZETTE OF COLORADO SPRINGS": Each one of these soldier stories is different, but Kenneth Eastridge joined the Army at 19. During his first deployment, he got medals for good conduct and achievement, and had no discipline problems. After his first deployment, he started showing sort of the textbook symptoms of Post- Traumatic Stress Disorder, which include disobeying orders, abusing alcohol. He also picked up a felony charge for pointing a gun at his girlfriend's face.
Now, where I think the Army may have failed him is that Army rules say that anyone with a civilian pending felony charge cannot go back to Iraq. He had that charge for pointing the gun at his girlfriend and yet, they sent him back again to Baghdad. After his second tour is when he was arrested for murder.
(END VIDEO CLIP) PHILLIPS: So, right now, soldiers from Fort Carson are serving in the war zone in Afghanistan and are set to return next year. What's going to happen when they get home?
We're talking with the new man in command at Fort Carson, Major General David Perkins.
Sir, I understand five days on the job, you have quite a challenge here as you enter the new position. Probably did not expect that you were going to have to take this on.
MAJ. GEN. DAVID PERKINS, FORT CARSON: Well, Kyra, this is one of the many challenges that our Army faces, but as with all challenges, the Army spends a lot of effort at assessing problems, developing solutions to challenges, and then working very hard to overcome them. And Post-Traumatic Stress is one of those things we put a large amount of effort into diagnosing some of the challenges, as well as developing a lot of solutions to this specific problem.
PHILLIPS: And General, as you know, General Mark Graham came in there and, just like you, had a lot of challenges on his hands. But he took action quickly, made a lot of changes.
Just to point out a few, from colonels to platoon sergeants, all of them are now trained to help troops showing signs of emotional stress. Also, Fort Carson has doubled its number of behavioral health counselors and tightened hospital regulations to the point where if a soldier comes in to see an Army doctor, even for something as small as a sprained ankle, they cannot leave without a mental health evaluation.
Are you going to support those changes, and what more are you going to add to that, sir?
PERKINS: Well, as you said, great strides have been made here at Fort Carson, as well as throughout the entire Army, to address this both from a preventive point of view, as well as a diagnosis and treatment. And so, as you said, a lot of the diagnosis has become as commonplace as taking your blood pressure. We have extensive amount of screening that goes on prior to deployment, during deployment, and very importantly, after deployment.
Another area we're continuing to expand is work with the families. We find that many of the stressors for these young soldiers are not necessarily solely from the combat area, but come from family issues, finance issues. So we've increased dramatically the number of military family consultants.
We are looking at developing the resiliency. We have found that that is the key to those soldiers who can come and go from combat and make the transition fairly smoothly, that they have an amount of resiliency to deal with tough issues. We are traing soldiers on that, as well as family members, because as some of the cases you mentioned, there was a family component to it. So we're taking a very holistic approach to this very challenging problem. PHILLIPS: And General, a lot of these guys are pretty much scared to death to admit they have a problem. They're afraid it will kill their career. In many incidents, we have seen that happen, guys that have come forward, they have been seen as weak, and that they cannot -- they can no longer lead or be promoted within the military.
So, what are you going to do to change that stigma, to let men and women both know, look, we all face these challenges, you've got to seek help, you've got to speak up so you do have a longer and stronger career in the military?
PERKINS: You know, this is the key point that we're focusing on across the Army, is taking the stigma out of it. And you know, this is not just in the Army, but this is across our entire society, whether you're a member of first responders who deal with stress, corporate leaders, political leaders. Nobody in these positions generally come out and admit that they've had issues dealing with stress.
And the Army really has led the way. You have seen from four- star general on down personally come out and talk about their issues with Post-Traumatic Stress. And this alone has created a large momentum to taking the stigma away.
We have put together mobile behavioral teams that will go down to units so the soldier does not have to leave the unit, go to a hospital or a clinic, and feel that he's coming out of the unit. These teams are ever present in the unit, and so it's very easy to get access to them.
Many of our counseling that is done, especially with family members, there are no records kept. Again, so the stigma does not become part of their record, because again, these are great Americans, they volunteered to serve their country. They want to continue to serve their country and they want to do it while their challenges are being dealt with.
PHILLIPS: Sure. And you and I both know, you know, we see these homeless shelters, and so many of them are Vietnam vets because they were never taken care of and PTSD wasn't treated properly. We definitely don't want to see it with our men and women coming back from Afghanistan and Iraq.
Major General David Perkins, appreciate your time, sir. And we look forward to see what you do there at Fort Carson.
PERKINS: Thank you, Kyra. It was a pleasure talking to you today.
PHILLIPS: Likewise.
A bizarre end to what had been a nice vacation. A Seattle man arrested by Homeland Security and jailed at Fort Knox because the Army had him listed as a deserter. That's pretty interesting, because Chris Parks is a civilian. He spent two weeks behind bars, had his head shaved, the whole bit. So, how could this happen? Possibly a snafu 10 years ago when he almost enlisted but backed out.
Take a listen.
(BEGIN VIDEO CLIP)
CHRIS PARKS, CIVILIAN ACCUSED OF GOING AWOL: How paperwork could have gotten messed up enough to say that I was actually in the military and had made it there, and I was actually -- it says that I was in there for two years before they finally figured out that I wasn't and started counting me as a deserter.
(END VIDEO CLIP)
PHILLIPS: Well, so far, he says no real explanation from the military. Any updates, we'll be sure to let you know.
A shocking rape. Both the victim and her alleged attackers, children. We've been following this story out of Phoenix, Arizona, for you. And today, new insight into the prosecution's case from a former Arizona D.A.
(COMMERCIAL BREAK)
PHILLIPS: Well, as each new detail came out, the story just got worse. An 8-year-old girl gang-raped in a Phoenix apartment complex, allegedly lured into this shed and attacked by four young boys.
Like the victim, all of them are Liberian refugees resettled in the U.S. The oldest of the boys is 14, and authorities plan to try him as an adult. That's caught a lot of people's attention, but catching even more, word from police the girl's family disowned her out of shame.
With culture an issue here, Liberia's president decided to weigh in. Here's a snippet of my interview with Ellen Johnson Sirleaf on Friday.
(BEGIN VIDEO CLIP)
ELLEN JOHNSON SIRLEAF, LIBERIAN PRESIDENT: Those parents should know that things have changed in Liberia. No longer do we tolerate this. And this is not a question of shame on the family. It's a question of the assault on a young child, and that cannot be tolerated.
(END VIDEO CLIP)
PHILLIPS: Well, clearly, a global outcry here, and offers of help for the little girl have been pouring in. It's an emotional situation, and you've got to wonder if that could affect the case at all.
Joining us live from Phoenix, former Maricopa County attorney Rick Romley. I'm curious, Rick, just the fact -- I mean, it's not every day that a president of another country weighs in on a local case.
RICK ROMLEY, FORMER MARICOPA COUNTY ATTORNEY: Oh, it's quite unusual and -- but it's a shocking case. It's one that has touched a lot of people internationally. And here in Arizona, I can assure you, something on the story is revealed every day in the news media.
PHILLIPS: Well, what do you think as an attorney, and knowing Phoenix, Arizona, so well and the crime there and the influences that are taking place within this kind of battle between culture and crime? And we talked a lot about rape in Liberia used as a tool of war, and you've got these kids coming over here, many of them not seeing it as anything else.
You know, do you think that this 14-year-old, Steven Tuopeh, should be charged as an adult?
ROMLEY: Well, I don't have all of the facts, but considering that Arizona -- the laws in Arizona says that the juvenile justice system can only deal with that juvenile, the child, up until their 18th birthday, and then they must be let go, totally free, no supervision in any way, it's probably -- I support, at least on the surface, that he should be tried as an adult. I mean, it was a serious -- it's called a dangerous crime against a child, and the initial information is that I do believe he should be tried as an adult.
PHILLIPS: Tell me how you do process that, though. How do you decide if someone that young be tried as an adult? Is it because the crime is so atrocious? Kind of put me into the mindset here of how you make a decision like that.
ROMLEY: You know, there's a multitude of factors that a prosecutor goes through in deciding whether or not to try him as an adult.
You know, number one, of course, what kind of crime was committed? Was it a burglary? Was it a murder? Was it a dangerous crime against children? The more serious the charge, of course, the more likely that it is to be a transfer.
You want to look at the underlying facts of the case as well. I mean, how egregious were the facts involved in that particular criminal activity, the background of the child that you're dealing with, have they been through the juvenile system over and over again?
And I think one of the primary focuses here is, how much time do you have left in the juvenile justice system to deal with these children? Because at 18, they've got to be let go no matter what, while in the adult system you can keep them under supervision, you can keep them incarcerated if necessary, for a much longer period of time.
PHILLIPS: So, is the idea to try and change the -- I mean, I guess there's two ways to look at this. Looking at how awful this crime is, do you get him off the street and get him into a facility where he needs to learn this is not how you behave in the United States? Whether rape is used as a tool for war in Liberia or not, you're in the United States now, this is not how you view it?
OK, so you can see maybe from the point of view of some folks that he could be rehabilitated, he could be taught what you are supposed to do and not do, you will be held accountable for your actions. But at the same time, this is someone who could, I mean, put himself into a very dangerous position by being in jail. I mean, a lot of individuals who commit crimes against young children, they don't make it out alive.
ROMLEY: Look, this is a much more complicated case than your average case. There's no question at all.
You have a culture that's involved. You know, he's a child from Liberia, a different type of culture. But, with that said, I mean, the people that come to this country must abide by the laws of this country. I mean, there are some countries that permit that wives can be beaten, and even at times be murdered for certain types of offenses by their husband. That's not acceptable in this country.
Now, where you are right is exactly that you take into account those types of circumstances at the time of sentencing. The judge, I am absolutely confident, will consider those types of factors. But what's more complicated in Arizona is that if he goes to trial and is found guilty here, this is a mandatory prison term for a minimum of 14 years. So there's a lot of dynamics in play.
I mean, I don't think that the story has totally been told yet. I don't think that we know all of the facts here.
I don't know what the prosecutor is going to be doing, because he did file it directly into the adult court system. We don't even know if the prosecutor's going to try to get the 13-year-old or the others into the adult court system, because our laws are such that that requires the approval of the judge.
If you're under the age of 14, a judge must make the determination whether or not they should go to the adult system. Because he's 14, the prosecutor exercised his discretion and filed it directly. And we're going to have to be waiting to see if there's a plea bargain that's going to be offered and, of course, taking into account the culture that he comes from.
PHILLIPS: It's a heartbreaking story, every way you look at it.
ROMLEY: Yes.
PHILLIPS: Rick Romley, appreciate your insight. We're going to stay on top of it. Thank you.
ROMLEY: Bye, Kyra.
PHILLIPS: Well, if you would like more background on this case, or you want to see my full interview with the Liberian president, head over to our blog, CNN.com/Kyra. Remember the cemetery outside Chicago, the place where the dearly departed were disturbed? Well, it turns out this isn't the only graveyard in the land of Lincoln believed to be the haunt of crooks.
(COMMERCIAL BREAK)
(WEATHER REPORT)
PHILLIPS: President Obama says that he hopes the explosive arrest of a Harvard professor can be a teachable moment. Now the city of Cambridge plans to build on lessons learned.
(COMMERCIAL BREAK)
PHILLIPS: For a week now, it's been a he said/she said -- or he said/he said, rather -- scenario. Today, we hear what the tapes actually say.
The arrest of Harvard Professor Henry Gates sparking a huge controversy after he accused the arresting officer of racism. The police sergeant firing back in several interviews, defending his reputation and his decision to bring Gates in on a disorderly conduct charge.
Cambridge Police have released the 911 call that started it all. A Harvard employee, who mistakenly thought Gates was trying to break into his own home. Take a listen.
(BEGIN AUDIO CLIP)
UNIDENTIFIED FEMALE: I don't know if they had a key or not because I can't see from my angle, but when I looked a little closely, that's when I saw...
911 OPERATOR: ... Hispanic? Are they still in the house?
UNIDENTIFIED FEMALE: They're still in the house I believe, yes.
911 OPERATOR: Are they white, black or Hispanic?
UNIDENTIFIED FEMALE: Well, there were two larger men. One looked kind of Hispanic, but I'm not really sure. And the other one entered, and I didn't see what he looked like at all. I just saw from a distance, and this older woman was worried, thinking someone's breaking in someone's house, they have been barging in, and she interrupted me, and that's when I had noticed. Otherwise I probably wouldn't have noticed it at all, to be honest with you. I was just calling because she was a concerned neighbor. I guess.
911 OPERATOR: Okay. Are you standing outside?
UNIDENTIFIED FEMALE: I'm standing outside, yes.
911 OPERATOR: Police are on the way. You can meet them when you get there. What's your name?
UNIDENTIFIED FEMALE: My name's --
911 OPERATOR: We're on the way.
UNIDENTIFIED FEMALE: I guess I'll wait. Thanks.
(END AUDIO CLIP)
PHILLIPS: Working on audio from the police radio calls that day. We will bring that to you as soon as we have it.
Got to wonder if the cemetery is the new stomping ground for crooks after an easy buck. It's a question big enough for Congress now to hold hearings on it today. Two cemeteries in Illinois spotlighting the problem.
In the last few days, a human bone was found on the ground at Mount Glenwood Cemetery. A family has filed a lawsuit because they claim someone took a headstone from a relative's grave and tried to sell it.
Not far away, in Illinois, you may remember the four ex-employees of the Burr Oaks Cemetery are accused of digging' hundreds of graves, dumping the remains and reselling the plots. Relatives of people buried there are expected to testify at today's hearing.
The U.S. economy is coming back and stronger than ever. We can take that forecast to the bank. We hope. It comes from the chairman of the Fed, Ben Bernanke. He wasn't under oath on Capitol Hill, but talking to regular people at a town hall event in Kansas City. Bernanke says he, too, was frustrated having to spend tens of billions of taxpayer dollars on big bank bailouts, but the whole U.S. financial system was at risk. And he didn't want to be the guy who presided over the second Great Depression.
Mention President Obama's federal stimulus program, and some jump for joy. But others are on the warpath, upset over the lack of funds. CNN'S Jim Acosta is on the case of one Midwestern mayor.
JIM ACOSTA, CNN CORRESPONDENT (on camera): Earlier this year, Joe Biden visited St. Cloud, Minnesota, to tout the prospects of the stimulus. Now, the mayor of that city has become one of the stimulus program's toughest critics. His question: what's taking so long.
(BEGIN VIDEO CLIP)
JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Our best days are ahead of us. That's just not happy talk.
ACOSTA (voice-over): Back in March, vice president Joe Biden took a stimulus road trip to St. Cloud, Minnesota, where he toured the New Flyer Bus Company. He and Transportation Secretary Ray LaHood predicted the stimulus would create jobs.
(BEGIN VIDEO CLIP)
RAY LAHOOD, TRANSPORTATION SECRETARY: This recovery plan, I really believe, will put people back to work in good-paying jobs this spring, summer and fall.
(END VIDEO CLIP)
DAVE KLEIS, MAYOR, ST. CLOUD, MINNESOTA: We had a high expectation of these things ready to go right away.
ACOSTA: But four months later, St. Cloud's mayor says he's still waiting for those jobs. Still waiting for an answer on nearly a dozen stimulus requests. He blames stimulus red tape.
(off camera): So is it your feeling that the vice president and the transportation secretary overpromised and underdelivered?
KLEIS: I think it raised our expectations. It raised our expectations that we were going to see something quicker.
LAHOOD: What I said was accurate. Sure.
ACOSTA (voice-over): Transportation Secretary Ray LaHood points to the New Flyer Bus Factory. Thanks to the stimulus, it's seen a boost in sales and avoided layoffs.
LAHOOD: All you see all over America are orange cones, people working in good-paying jobs, building roads, building runways, building bus garages. So, the idea that our money isn't going out is just not accurate.
ACOSTA: We did find new stimulus jobs in St. Cloud at the Geyer Signal Company. They hired 25 new workers to make road signs. Stimulus projects across the state.
(on camera): Before the stimulus and after the stimulus, you've seen an effect?
CHRIS ALBERS, GEYER SIGNAL CO.: Absolutely. Compared to last year and this year, it's been resounding effect.
ACOSTA: Resounding effect.
ALBERS: Absolutely.
ACOSTA (voice-over): St. Cloud is weathering the recession well. City hall is surrounded by state road construction projects, which have driven down the local unemployment rate to 7.7 percent, far below the national average. That's without the stimulus.
(on camera): A lot of mayors would trade places with you to have that unemployment rate, would they not? Detroit, it's 15 percent there.
KLEIS: We have a diverse economy and again, we still have challenges.
ACOSTA: You feel like you're not getting your fair share?
KLEIS: Oh, absolutely not. I'm convinced of that. (END VIDEOTAPE)
ACOSTA: The Transportation Department cites a recent government report showing the stimulus is moving ahead of schedule. But don't tell that to the nation's mayors, who have their own studies showing cities, when compared to rural areas, are getting the short end of the stimulus stick. Kyra?
PHILLIPS: Jim Acosta, thanks so much.
Good news on the economic front, and can't we all use a little of that? If you're in the market for a new place to live, what the latest new home sales numbers mean for you. And more importantly, what it signals about the recession.
(COMMERCIAL BREAK)
PHILLIPS: Warren Buffett says bet on America to recover from this recession. CNNmoney.com's Poppy Harlow asked the legendary investor for his thoughts about the state of the economy and where he thinks we ought to be putting our money. Poppy, are you getting free advice from a very smart source?
POPPY HARLOW, CNNMONEY.COM: Getting real with the billionaire, Kyra. He knows how life is for all of us. Warren Buffett. We spoke to him one-on-one on Friday, and you know what? He's been making money in the market really since his father opened a savings account for him when he was six years old at the Omaha National Bank. He told us you got to have faith in this economy, even now when things look rough, because when you look back in history, America always, time and time again, emerges stronger from a crisis. Take a listen.
(BEGIN VIDEO CLIP)
WARREN BUFFETT, LEGENDARY INEVESTOR: From 1776, anybody that bet against this country has lived to regret it. We have a system that unleashes human potential and will continue to do so. But you won't see that tomorrow or the next day, necessarily. But I will guarantee that five years from now, 10 years from now, you and your kids and all of the people will be living better than today. That's the history of America.
(END VIDEO CLIP)
HARLOW: Of course, he acknowledges this is a major, major bump in the road, but I felt it was really interesting. He said ultimately, it's American ingenuity, our entrepreneurial spirit that helps us emerge from this, not necessarily government stimulus. That's an interesting comment at a time when so many people are asking do we need a second stimulus. When I asked that, he said it's on us, it's our ingenuity, and that's what's going to solve the problem, Kyra.
PHILLIPS: All right. So, along those lines, what did he have to say about how average Americans should be investing right now? A lot of people certainly right now worried about putting their money in the market after all this has happened.
HARLOW: Exactly right. A lot of folks have lost half their savings or more. I said is now the time, can we have some confidence, we can take our money from under the proverbial mattress, put it to work in the market, maybe slowly but should we have that confidence. Here's what he told me.
(BEGIN VIDEO CLIP)
BUFFETT: I think you can always have confidence in America. I think the time to have the most confidence is when other people have the least confidence. I mean, that's when things are cheap. You know, they -- people were buying these same businesses a couple of years ago when the Dow was 14,000, and the businesses have not gone away.
(END VIDEO CLIP)
HARLOW: This is something we have heard from Warren Buffett time and time again. He's known for that phrase, "be fearful when others are greedy, be greedy when others are fearful." This man jumped in the market with multi-billion dollar investments in Goldman Sachs and General Electric about a year ago, Kiran -- Kyra, so interesting talking points from him and his take on it all. You can see that full interview online on CNNmoney.
PHILLIPS: All right, Poppy. Thanks so much.
We have been hearing it for months. Experts saying the economy will rebound later this year. But today, well, we have had some hard numbers, I guess, that show at least one area is getting a little better, and it's where the whole mess started, the housing market. New home sales surged 11 percent last month.
Susan Lisovicz following this from the New York Stock Exchange. Susan, put this in perspective for us. An 11 percent jump, how big of a deal is that?
SUSAN LISOVICZ, CNN CORRESPONDENT: Pretty big, Kyra. When that news came across, I was sitting in this chair. My eyes popped, because it was nearly five times greater than the estimate. In fact, it's the biggest month-to-month jump since 2000.
Now, let's put it in perspective for you. Builders are building a lot fewer homes. The number of new homes on the market are at the lowest level in a decade, and we're buying fewer homes, no question about that.
The number of homes that sold in June, 384,000. It sounds like a lot, but compare that to 1.4 million four years ago. So the market is still weak, but the trend is undeniable. This is the third month in a row now that new home sales have risen, and the bigger part of the market, existing home sales, have also risen three months in a row. We got existing home sales for June last month.
It's also taking a while to sell these homes, no surprise there. It takes nearly 12 months. So you know, there's still resistance, the market is still weak, but I think that there is a growing chorus that the housing market, which was the root, many would say, or where this whole mess started, is showing signs of bottoming out. Kyra.
PHILLIPS: What's finally turning things around? Is it just that prices are so low?
LISOVICZ: Well, prices are a big deal. You just heard Warren Buffett saying that he buys stocks when things are cheap, and we consumers are pretty smart, too. Prices are down year over year for new home sales, 12 percent to $206,000. It's a median price.
Mortgages have come down as well. Part of the government's plan, stimulus plan, is to put a floor in the housing market. They have been buying all these securities that are tied to mortgages. The 30- year fixed ranged between 5.3 percent to 5.5 percent in June. And don't forget, there's a first-time homeowner tax credit of $8,000. It goes away at the end of the year. Consumers have been taking advantage of all of those things. Kyra.
PHILLIPS: Indeed they have. Thanks, Susan.
Home sales are up, so you think builders would be dancing on the ceiling, right? But that boost has yet to trickle down to them, and many are struggling just to stay above water.
Let's check out "Money & Main Street." CNN's Allan Chernoff has the story of one home builder in Manchester Township, New Jersey, whose strategy for survival depends on Uncle Sam.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Accountant Tom Critelli gave up a secure number crunching career for the nail banging of home building. His timing was perfect 18 years ago. Critelli rode the housing boom to build a thriving business. Employing a dozen full-time employees, putting up as many as 50 homes a year.
CRITELLI: People need places to live. That is the American dream.
CHERNOFF: But after nearly two decades of building the American dream, the housing bust has been a business nightmare for him.
CHERNOFF (on camera): Today, Tom Critelli is down to only two full-time employees, and he's building only three homes this year, two of which are unsold.
CRITELLI: Right now you're just, you know, living for a better time.
CHERNOFF (voice-over): Homebuilders are suffering in every state. The business is down by two-thirds nationwide since peaking in 2005. New Jersey is doing a little better than that, but you'd never know it talking to Critelli.
CRITELLI: It's been a crash. And most people will tell you that it's more of a depression.
CHERNOFF: To survive, Critelli is turning to Uncle Sam, not for a bailout, but for a piece of the stimulus pie. He's bidding for contracts to repair military recruiting centers, as well as other government business. And to improve his odds, Critelli is partnering with larger companies experienced in doing construction for the military.
CRITELLI: Well, people need to work and my company needs to work.
CHERNOFF: A lot is riding on Critelli's bid for new business. He has a son in college and a daughter about to enroll. The Critellis already have had to raid their 401(k) and tap other savings.
CHERNOFF (on camera): Do you regret having left accounting?
CRITELLI: No. There's no regrets. I mean...
CHERNOFF: Even now?
CRITELLI: Yes, sure.
CHERNOFF: Even now?
CRITELLI: Yes. You know, we could always -- I've always said to my wife, we can always go back to do that.
CHERNOFF: Tom Critelli is optimistic he'll win a contract from Uncle Sam. That would help him hang on through the recession and eventually rebuild his business.
Allan Chernoff, CNN, Manchester Township, New Jersey.
(END VIDEOTAPE)
PHILLIPS: For more of our "Money & Main Street" series, tune to CNN at 8:00 Eastern every Thursday night.
It was bound to happen. Alaska's best-known politician in the news again. The media frenzy as Sarah Palin officially steps away from the spotlight. Yep, don't you know, she had something to say about that.
(COMMERCIAL BREAK)
PHILLIPS: Well, today, Sarah Palin woke up as Sarah Palin, no governor in front of her name. With more than a year to go in her first term, she handed the reins to lieutenant governor Sean Parnell Sunday. In a farewell rally in Fairbanks, she said she had no interest in hanging around as a lame duck. The 2008 GOP nominee for vice president called her governor's stint a success, but says she doesn't need the title to speak out. And she singled out the media for a final parting shot.
(BEGIN VIDEO CLIP) SARAH PALIN, EX-GOVERNOR OF ALASKA: You represent what could and should be a respected, honest profession that could and should be a cornerstone of our democracy. Democracy depends on you, and that is why, that's why our troops are willing to die for you. So, how about in honor of the American soldier, you quit making things up.
(END VIDEO CLIP)
PHILLIPS: Palin leaves office with a pile of legal bills from a pile of ethics complaints. She isn't saying what she plans to do next.
As always, Team Sanchez back there working on the next hour of NEWSROOM but today, it's Team Holmes.
T.J. HOLMES: No, no..
PHILLIPS: Now, T.J...
HOLMES: It's still Team Sanchez.
PHILLIPS: Who you talking to, T.J.? Talking to yourself?
HOLMES: You're not hearing me?
PHILLIPS: Are you hearing me okay?
HOLMES: I'm hearing you just fine.
PHILLIPS: I got a little something for you.
HOLMES: What you got for me?
PHILLIPS: OK, Otis, let's cue it.
(MUSIC PLAYING)
HOLMES: Why, Kyra, why?
PHILLIPS: Because I'm going to test your knowledge of music here. Today is the twenty-fifth anniversary of what?
HOLMES: Oh, I don't know. "Purple Rain" the album?
PHILLIPS: Nope.
HOLMES: No. Twenty-fifth anniversary. What's today?
PHILLIPS: You were probably about eight, six. Wait, I'm counting right now. The anniversary of the movie.
HOLMES: Of the movie.
PHILLIPS: You remember the movie?
HOLMES: Of course I remember the movie. Appalonia 6, right? Of course I remember that movie.
PHILLIPS: How old was he, Val? Did we figure it out? Was he born yet?
HOLMES: Of course I was born at this time.
PHILLIPS: You were two. We just figured it out. You were two.
HOLMES: No, I would have been six at the time.
PHILLIPS: Oh, my God. Am I old. What else are you working on besides renting "Purple Rain" tonight?
HOLMES: Well, we did have some things to tell you, but I think we're going to blow out the show and do a twenty-fifth anniversary special of Prince and "Purple Rain."
PHILLIPS: Otis will like that. He'll spin the tunes, you can dance.
HOLMES: Oh, my goodness.
PHILLIPS: Reminisce about your days with the long Geri curl when that was hip.
HOLMES: Kyra, not everybody from Memphis had a Geri curl.
(LAUGHTER)
Look, I always get in trouble when I'm on TV with you, OK? Let me get through this, please. Please.
We are, of course, you were talking about it a little bit, we just got the 911 tape and also the audio from the police track from the incident, the police versus the professor. Well, we're trying to go through that tape a little more, and it's a bit revealing. We thought this would all be put behind us, but now these new tapes got new questions here. We will be getting into that.
And one other thing I'll tell you here. And we will have a strategist on. You were just talking about Sarah Palin there. We'll have a Republican strategist on to tell us if he would have told her to say what she said in her farewell speech. She took some shots at the media and whatnot, so we are going to look into that as well. Let me go ahead and get off TV with you now.
PHILLIPS: Sounds great. See you in a little bit, T.J..
OK. More from the CNN NEWSROOM straight ahead.
(COMMERCIAL BREAK)
PHILLIPS: This has been the deadliest month for international forces in Afghanistan. In Helmand province has seen some of the worst fighting. We go offroading with U.S. forces to see how they deal with the biggest threat to their lives. (BEGIN VIDEOTAPE)
IVAN WATSON, CNN CORRESPONDENT (voice-over): Marines blazing a trail in the desert and sometimes getting stuck in the sand. They are offroading to avoid improvised explosive devices, known as IEDs.
LANCE CPL. ALEX LYTCH, U.S. MARINE CORPS: The open desert's the best way to go. There are not too many main roads, but if there are, we try to stay off of them because they know it's the best place to catch us.
LT. JOSHUA SPENCER, U.S. MARINE CORPS: Over the course of the long war, both in Iraq and Afghanistan, IEDs have been the number one killer of coalition forces.
WATSON: Lieutenant Joshua Spencer is the 24-year-old leader of the counter-IED team for the Second Late Armored (ph) reconnaissance batallion. To protect his men, he tries to think like a Taliban bombmaker.
SPENCER: I'm curious about who they are after. Because they don't just try to take out any coalition force. They are smart as well. They try to take out key leaders, key assets.
WATSON: This photo shows an IED blowing up under a bomb hunting foot patrol earlier this month. Two Marines were killed in the blast. Cheap, easy-to-make roadside bombs have taken their toll on American and NATO forces. This has been the deadliest month yet of this eight- year war.
CORPORAL CHARLES HETTLE, U.S. MARINE CORPS: Like, you hear a pop, and then all of a sudden you hear boom -- the explosion and all you see is dust and your ears are ringing. Your body, your adrenaline is rushing. Body is so tense at the time. You, like, have no time, like, trying to react. You don't know what to do.
WATSON: Corporal Charles Hettle survived an IED strike against his armored vehicle on July 11. The bomb killed two Marines.
HETTLE: I have flashbacks as to what happened a week ago. And all I can do is snap myself back to reality.
WATSON: The threat of bombs has forced coalition forces to rely more on helicopters to move troops and supplies, but the Marines also have an arsenal for combating this deadly booby tracks.
UNIDENTIFIED MALE: This is an example of a mechanical solution. It's a mindroller (ph). And what you will see is the wheels here. They cover a path that is slightly wider than the track width of the vehicle, and what it's intended to do is set off a pressure plate line, or an IED.
WATSON: Sometimes all it takes to find a bomb is a good nose.
CORPORAL CHUCK MARION, U.S. MARINE FORCES: He's doing this side- to-side pattern and clearing both sides and we're out. WATSON: Corporal Chuck Marion and his 3-year-old Labrador, Cabella, are part of a canine bomb hunting team.
MARION: He's kind of our Savior. So, we're walking out there in front of the convoy on an uncleared route and he saves our lives. Not to mention the rest of the Marines on the convoy.
WATSON (on camera): Seven of the eight Marines killed during the first two weeks of this operation were hit by roadside bombs. Unlike Iraq, Afghanistan has few paved roads, making it easier for bombers to plant their explosives. These Marines make a deadly gamble every time they go out of the gates of their base.
Ivan Watson, CNN, Afghanistan.
(END VIDEOTAPE)
PHILLIPS: That does it for us. I'll be back tomorrow. Meanwhile, T.J. Holmes is filling in for Rick Sanchez today.
