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Continental Airlines Flight Diverted Due to Turbulence; Three Detained Americans Named; Possible Tax Hike for the Middle Class; Keeping Cash for Clunkers Alive; Katharine Jackson Fights for Control of Her Son's Estate; Stock Market Looking Up; Last Month Deadliest for Troops in Afghanistan, August Off to Bad Start; Possible Rift Between Iranian President and Supreme Leader; Church in Flordia Opts to Pay It Forward

Aired August 03, 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: Quickly, we want to get you some new information about the story that we've been telling you all morning long, in fact, about the Continental Airlines flight that was diverted. It was originally flying from Rio de Janeiro to Houston, had to divert to Miami, because of some severe turbulence that took place near the Dominican Republic. We're being told about 38,000 feet is when it all happened. We're also being told by the Miami-Dade Fire and Rescue team there that four serious injuries, 26 injuries in all. 168 passengers were on board that flight. It was a 767. Once again, Continental Airlines.

We also learned just a few minutes ago from a mother of a 13- year-old boy who was on the flight that apparently now -- because this was what we have been trying to get information on, that that plane is still in Miami and they are rebooking the passengers to get to their final destinations on completely separate flight. There had been some information that the flight was going to take off and continue on to Houston and that is apparently, according to Rosanna Nichols, not the case. They're trying to rebook everybody right now.

In the meantime, we have been able to get in some sounds, some people talking about their experience, some of the passengers on flight 128. Let's listen in for a moment.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: ... a couple of people who are bailing her from the plastic breaking on their faces from the lights.

UNIDENTIFIED FEMALE: But nobody was bleeding?

UNIDENTIFIED MALE: Oh, yes. There were people cut and bleeding. People trying to -- there were a few people unconscious. One of my friends was in the back, so he told me a lot about it.

UNIDENTIFIED FEMALE: My goodness. How did emergency crews handled it?

UNIDENTIFIED MALE: We were fine. We didn't really know there was a lot going on afterwards. But then they let us know were going to - about 20 or 30 minutes after it happened they let us know that we were going to fly into Miami for a while. And then we realized, we saw the ambulances and stuff and a lot of people were hurt in the back.

UNIDENTIFIED FEMALE: So what are you going to do now, stay at a hotel or what?

UNIDENTIFIED MALE: They got us headed to another gate, trying to get us on another plane to Houston.

(END VIDEOTAPE)

COLLINS: All right. Obviously, we will stay on top of this story for you get you new information just as soon as we get it here.

Meanwhile, we now know the names of the three hikers who are being held in Iran. They were arrested on Friday after apparently wandering from their chartered course in Iraq and drifting across the unmarked border into Iran. We get the details now from CNN national correspondent Susan Candiotti.

(BEGIN VIDEO CLIP)

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): Kurdish officials have identified the three Americans being detained as Joshua Fattal, seen her on his Facebook page as well as Shane Bauer and Sarah Shourd, both appearing on internet websites. They have been staying at a hotel before setting out to a scenic area for a hike in the mountains near Ahmed Awa in Iraq.

Despite warnings to be careful, they apparently strayed into Iranian territory across an unmarked natural border with northern Iraq. A friend had stayed behind at the hotel because he was ill said he last heard from them Friday. They called to tell him that they were surrounded by Iranian soldiers during their hike.

Fattal's mother who lives in Pennsylvania confirms their captivity but is declining requests for on-camera interviews. She spoke with CNN Radio by phone.

VOICE OF LAURA FATTAL, JOSHUA FATTAL'S MOTHER: My husband and I are eager for the best welfare and conditions for our son, Josh, and for the other two companions that he is with. And that is our only concern, his welfare and the best conditions for him.

CHRIS FORAKER, FRIEND OF JOSH FATTAL: Josh is a very curious person and he is interested in the world. He wants to eat the world whole.

CANDIOTTI: Friends say the three have spent time or have lived in western Europe and the Mideast and are seasoned travelers. Sarah Shourd appears on a website that mentions her travels. She's also named on Shane Bauer's website. He's a photographer. The American hiker Shaun Meckfessel who stayed behind because he was ill is now at the U.S. embassy in Baghdad, according to his grandmother.

Meckfessel is a graduate student at the University of Washington. The State Department said it has asked the Swiss consulate in Iran to try to make contact with the detained Americans because the U.S. itself has no diplomatic relations with Iran.

(on camera): It's a very sensitive situation, especially given the strange relations between the U.S. and Iran. Susan Candiotti, CNN, New York.

(END VIDEOTAPE)

COLLINS: And so the big question, what were those Americans doing in Iraq before they apparently wandered over the border into Iran? For that, let's go to Arwa Damon, joining us live in Baghdad. Arwa, good morning.

ARWA DAMON, CNN CORRESPONDENT: Good morning, Heidi. And I do realize just how strange it must seem to many of our viewers that you would find American tourists in a place like Iraq...

COLLINS: Yes.

DAMON: ...that is much better known as a war zone and a place of violence and sectarian bloodshed. But the area that they were in, Iraq's Kurdish north is completely different to the rest of the country. It is ruled by the Kurdistan regional government. It is fairly isolated in the sense that it has not been plagued by the violence or sectarian bloodshed that took place throughout the rest of the country. In fact, it is an area that is that thriving. It's great opportunity for businessmen and so you do get a fair amount of foreigners up in this area.

And so it's not entirely surprising that for Americans who do have this sort of wanderlust and curiosity would end up in this area, especially the spot where they decided to go hiking is known to be very beautiful, natural scenery, water falls, just that in this case they weren't paying attention to where they were going, it would seem.

COLLINS: Yes. Well, all right. Arwa Damon, putting in perspective for us a little bit. Thank you, Arwa. Live from Baghdad this morning.

Also in Iran now, a key endorsement for the disputed president there. Earlier today, Iran's supreme leader formally backed Mahmoud Ahmadinejad as he prepares for his second term. Two former presidents boycotted the ceremony, amid widespread claims the presidential election was fixed.

Remember President Obama's campaign pledge that there will be no new tax hikes for the middle class? Well, that was then and this is now. Over the weekend, the Obama White House said it can no longer guarantee that the middle class will be spared.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: We have to do what is necessary. The critical thing is people understand that when we have recovery established, led by the private sector, then we have to bring this down, the deficits down very dramatically. We have to bring it down to a level where that we're not borrowing from the world is stable and a reasonable level and that's going to require some very hard choices and we're going to have to do that in a way that does not add unfairly to the burdens that the average American already faces.

LAWRENCE SUMMERS, DIRECTOR, NATIONAL ECONOMIC COUNCIL: There's a lot that could happen over time. But the priority right now, it's never a good idea to absolutely rule things, rule things out no matter what.

(END VIDEO CLIP)

COLLINS: The comments came after a bit of good news on the economy. Last week key reading showed a signs that the recession may be easing a bit. In fact, let's go ahead and check out the Dow Jones industrial average. Right now, the Big Board for you. Look at that, up about 86 points or so, very early in the trading day. We knew the futures are up, we just don't know where that would go. Still more though and of course, either, but we're watching as always right here in the CNN NEWSROOM.

Keeping the Cash for Clunkers program alive. The Senate is expected to vote today on a $2 billion bill to keep it going. The program gives people as much as $4,500 to trade in gas guzzlers for a somewhat more fuel-efficient cars. In fact, you're looking at a live picture now of Capitol Hill. There's opposition from both sides to the program. Some Republicans are unhappy about using taxpayer money in order to fund it. Some Democrats don't think the fuel efficiency standards are high enough for the new cars.

CNN Money.com's Poppy Harlow will take a look at what happens once those clunkers leave the dealership and some of the rules the dealerships have to follow. That's coming up in just a few minutes.

And just about an hour from now, President Obama due to speak at an event celebrating the new G.I. bill. The measure went into effect over the weekend. We told you all about it on Friday. It offers powerful new benefits for Americans serving on the front lines. CNN's White House correspondent Ed Henry is joining us now with more on this.

Ed, we talked about it extensively here in a special show on Friday. And these benefits are much more extensive, not only for the actual veteran, if you will, or soldier but also for their families now.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Yes, absolutely. This is a big time benefit for veterans returning from the wars in Iraq and Afghanistan. Obviously they are coming home right now to a very uncertain jobs market here in the United States. This is the initiative of democratic senator Jim Webb of Virginia, who pushed this really hard - a military veteran himself. As we go through it real quickly, what it does is to make sure that every eligible returning veteran gets a full ride to at least a public school education. It covers books, expenses, as well as housing from four years. Obviously that's a big-time benefit beyond just tuition.

They are trying to make sure that the folks -- just as with the original G.I. bill, veterans returning from World War II that the current military veterans have the same kind of shot to get into the job market to succeed and excel into the future. The checks started going out on August 1st as you mentioned. That is why you were highlighting it on Friday. That's why the president is trying to highlight it today as well. Obviously, we've talked so much about the economy, people looking for jobs. But there's a special need right now, obviously for our military veterans, men and women, who are coming back to a very bleak jobs picture right now, obviously, Heidi.

COLLINS: Yes, the whole thing brought about by the Bush administration. And then obviously signed into law and put into effect as we said over the weekend. But the President is going to be joined by a pretty well known Republican today at George Mason. What is the significance there?

HENRY: Yes, well, former Republican senator John Warner, you'll remember, a military veteran himself, former secretary of Navy. He's going to be there as part of the festivities with President Obama. It really does signal, as you mentioned, the bipartisan nature of this. This was signed into law by President Bush last year after a push by a Democratic Senator Jim Webb, overwhelming support. I think it was 96 senators of both parties out of 100, obviously, supported this originally last year.

So it gives you an idea of one thing that we talk often -- about the times where they are sort of at each other's throats and not getting something done. This is an initiative where both parties actually did get together and are trying to help veterans coming back from Iraq and Afghanistan, Heidi.

COLLINS: All right. Ed Henry, very good, we sure do appreciate it. Live from the White House this morning.

HENRY: Sure.

COLLINS: And just about an hour from now, we expect to hear more from the president. He is due to make remarks on the nation's new G.I. bill. That event once again previously scheduled 11:05 Eastern. We will carry his comments live.

The financial crisis, the health care debate. Now talk of a middle class tax hike. President Obama has seen a steady erosion of his once lofty approval ratings. Here's CNN's poll of polls. A look at the various samplings of public opinion for you.

In late July, President Obama's approval rating stood at 54 percent. That's pretty good until you consider how much ground he lost in just one month. From late June to late July, the president's approval rating fell seven percentage points.

CNN's most recent poll of polls shows President Obama's overall approval rating has dropped. So we want to know what is your opinion of the president. You can always let us know on our blog, of course, cnn.com/heidi. Or just go ahead and call in, the new "Hotline to Heidi," that number 1-877-742-5760. We always love to hear from you.

Navy pilot Michael Speicher shot down on the very first night of the 1991 Gulf War. Now 18 years later we're finally getting some answers about his fate.

ROB MARCIANO, AMS METEOROLOGIST: I'm Rob Marciano in the CNN Severe Weather Center. We have some rough weather over the weekend and some damage across eastern Pennsylvania and Jersey. We got pictures and also highlight as to where the storms are going to fire up today. The CNN NEWSROOM with Heidi Collins is coming right back.

(COMMERCIAL BREAK)

COLLINS: For 18 years, the family of Michael Speicher have lived with uncertainty. Now Defense officials say his remains have finally been found in Iraq. Speicher was the first American lost in the 1991 Gulf War. After he was shot down, he was said to have been killed in action but was later listed as missing. A tip from an Iraqi led troop to his brutal spot in the Iraqi desert. Dental records have not led to positive identification.

Many friends of Captain Speicher never gave hoping of finding him alive. They even started a group call Friends Working to Free Scott Speicher. For them, the discovery of his remains brings mixed emotions.

(BEGIN VIDEO CLIP)

MIRRIAM NOVELLY, SPEICHER'S FRIEND: It's a bittersweet ending. I mean, it's great that we have finally accomplished an ending, but it is bittersweet. You know, you always hope that he's going to be found alive and yet, on that end, if he was found alive, look what he's missed. His children, you know, are in college now. And you know, what kind of life would he have led being a prisoner of war?

(END VIDEO CLIP)

COLLINS: Captain Speicher's family released this statement. "We thank the active duty men and women whose diligence has made this happen and hope that the process has prevented another of our servicemen and women from being left behind. We will miss him and we'll never forget."

We are learning more now about a Continental Airlines plane that was forced to land in Miami because of severe turbulence in the air. Officials say it was on it's way to Houston from Rio de Janeiro and Brazil. There were 168 passengers on board. The airlines says 28 passengers were treated at the scene and seven were taken to hospitals.

We talked to one of the passengers just a moment ago.

(BEGIN VIDEO CLIP)

CELI DFARIA, PASSENGER: All of a sudden, it came down. Everybody bumped their head twice because it came down again and it was very sharp and oh, it's -

UNIDENTIFIED FEMALE: Terror time?

DFARIA: In one section of a second.

UNIDENTIFIED FEMALE: Have you looked at your face yet?

DFARIA: Yes. I've seen it but (inaudible) I'm OK. I mean, I don't feel anything different.

UNIDENTIFIED FEMALE: What is your name, ma'am?

(END VIDEO CLIP)

COLLINS: Rob Marciano is standing by. Because, Rob, just to bring this story full circle here. We understand that there was quite a bit of turbulence, obviously. That's what caused some of these injuries, we're being told. There were - what was it 50 miles north of where were that -

MARCIANO: Well, just the lower Bahamas, Dominican -- very near the Turks and Caicos Islands. There wasn't any real storminess there. Not a huge amount of convection. Here you see on the satellite picture. This little flare-up right here is associated with a tropical wave that the National Hurricane Center is analyzing, kind of just cruising this way.

But there is a not a tremendous amount of convection with it but there is a disturbance in the atmosphere and these tropical waves certainly going to have a lot of vertical motion regardless of whether they have convections. So, that's problem what ticked that off but as you know, any sort of turbulence, especially clear air turbulence, is incredibly difficult to forecast and can come at those pilots rather suddenly and often pilots will tell pilots behind them. And if that route is not very well trafficked, then it's not going to be reported too often. So, wear your seatbelts obviously.

All right. We've got windy conditions across parts of the western great lakes. Rough weather yesterday across parts of eastern Pennsylvania, just outside of Philly, we've got some strong wind. No reports of tornadoes but there were tornado warnings out and enough wind damage certainly to tear up this residential area including some mobile homes. So they are picking up the pieces there this morning.

Rough weather potentially across parts of Chicago today. We got that highlighted on the map and here's the line of thunderstorms, well really showers, thunderstorms on their way to develop. And this will be solely moving over towards the east here at about, well 20 or so miles an hour. Right now though not looking too shabby along the Magnificent Mile there in Chicago. That's from the CNN office, looking partly sunny.

COLLINS: Is that what it looks like?

MARCIANO: Yes, that's what it looks like. Have you ever been out there? In the CNN bureau, in Chicago? COLLINS: (INAUDIBLE)

MARCIANO: Not a bad set up there in the building.

Springfield, Illinois into St. Louis, you may be looking at flight delays or at least St. Louis probably will be as this begins to fill up, looks like a little stronger there in St. Louis and Chicago at the moment. And some showers will develop along this front which came through most everybody on the East Coast and putting the breaks on as they typically does this time of year across parts of Florida. That will be the focal point for seeing some afternoon thunder boomer in Tampa or Miami, 91 to 92 degrees there. Typical summertime weather with the record breaking heat across the Pacific northeast, although still warm today, it won't be as earth or record shattering as it was this time last week. Heidi.

COLLINS: OK. I'm glad you used thunder boomers because I didn't realized that was a meteorological term, because that's what I use to explain to the little boy.

MARCIANO: Oh, OK. You know, sometimes when you and I are on I feel like I'm speaking -- no, I'm kidding. I should use it more often. It's very descriptive.

COLLINS: It's good.

MARCIANO: Theatrical.

COLLINS: All right, Rob. We'll check back later. Thank you.

MARCIANO: OK.

COLLINS: Michael Jackson's mother heads to court today. At stake, her son's estate. She will fight for control, Katherine Jackson is challenging the lawyer and former music executive who were named as executors in Jackson's will.

CNN's Ted Rowlands is joining us now live from Los Angeles with more on that. Anybody expect a fight from Katherine Jackson prior to this?

TED ROWLANDS, CNN CORRESPONDENT: Well, we expect Katherine Jackson, Heidi, to show up here in about half an hour from now, we've been told, at 8:00 local time. And you mentioned, what's going to go on inside the courtroom. It's really two-fold. You got the estate battle going on and then we're also expecting that this judge is going to rubber stamp basically, the legal guardianship of the children. That deal has already been hashed out outside of court between Debbie Rowe and Katherine Jackson And it is expected that the judge will go along with it. And basically what that deal is Katherine Jackson gets custody of the three children. Debbie Rowe will get visitation of her two children down the line when both appropriate, as deemed by a third party.

The other battle, the estate battle is the one that this judge is going to have to referee because it has not been amicable to this point. Katherine Jackson is asking for a seat at the table and a larger role in the estate. The executors wanted her to sign a confidentiality agreement so that she can see some documents. She refused. She's also asking for a stipend for the children and for herself. So that side of things are going as well as the guardianship stuff. So is going to be long day in court here. We do expect Katherine Jackson to be here for this - is expected to be a multi-hour hearing.

WHITFIELD: Multi-hour hearing. OK. All right. Ted Rowlands staying on top of it for us in L.A.. Thanks so much, Ed.

A new study suggests seven our of 10 American kids lack vitamin D. Our senior medical correspondent Elizabeth Cohen tells us what parents need to do to make sure kids get the protection they need.

(COMMERCIAL BREAK)

COLLINS: If you're like millions of parents, you rub sunscreen all over your kids before they head out the door. But experts are saying you might want to wait because a new study says millions of children and teens are not getting enough vitamin D. And there's more.

Our senior medical correspondent Elizabeth Cohen is joining us now with more on this new study that has been done, right? What's the biggest problem? I mean, we think vitamin D, milk and sun.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right. As well as other things. The problem is very big. It's not just like a few kids are vitamin D deficient of vitamin D. We're talking about a lot of kids being vitamin D deficient.

Take a look at these numbers. What this study found is that 7.6 million children are vitamin D deficient. That's about nine percent of the population of the kids up until the age 21. And in addition. 50.8 million children are insufficient in vitamin D. That's not quite as bad as being deficient but it's still not good. So we're taking for that second number about 61 kids fall in that category. And that's why the American Academy of Pediatrics is now telling parents, you need to supplement your child with vitamin D.

COLLINS: Weird. So, what is going on? Why is this happening? Is it the sunscreen?

COHEN: Part of it is the sunscreen and part of it is our diet. It's kind of double whammy. Kids are not spending as much time outdoors as they used to.

COLLINS: Right, exactly.

COHEN: Video games, television and computers, all of that. And when they do go, I hate (inaudible) well that's not true -- sometimes -- another topic for another day. So kids are not spending as much time outdoors and then when they do go outdoors, often they are slathered in sunscreen, which is a good and bad thing. We'll talk about that in a minute. And then also, kids diets often aren't great. Often they don't drink enough milk or they don't eat enough fish. So you got a couple of different trends happening all at one time. What is happening is that they are not seeing cases of rickets go on the rise. I mean, rickets, which is from vitamin D deficiency, and the reason why you're looking at me puzzled is it's like, it's an old disease, right? It's something we felt that's gone.

COLLINS: Right. I get rickets and scurvy.

COHEN: Well, your mom is pretty smart. Scurvy doesn't seem to be a problem but ricketts are sort of a little bit making a come back and that's disturbing.

COLLINS: Yes, that's very disturbing. Are certain kids more vulnerable?

COHEN: Certain kids are more vulnerable. There's a whole list of kids who are more likely to be vitamin D deficient. So let's go over those. Kids who are African-American and Mexican-American are likely to be vitamin D deficient and also girls are more likely, actually. Children who are obese and children who spends lots of time indoors, spend more than four hours a day on things like computers, and video games and things like that.

COLLINS: Yes, understood. That's wonderful. Thanks. It's a catch-22, though, for parents, because you're trying to protect them from the sun anyway and you put on the sunscreen out and then find out, well, maybe they should have a little bit. How much is too much?

COHEN: It's very tough. You know, even pediatricians don't even agree on it. When we made phone calls, they said very different things. So we're going to try to boil it down a bit. The sun helps your body produce vitamin D. So when you go out with a sunscreen, the sun can't get into your body and help you do that. But here's what one pediatrician said. Here's a way to think about it. If you're going to go to the beach from 10:00 until 4:00, you'll want to put sunscreen on your child because they can get burned to a crisp. But if it's just a 20-minute walk in the park, a 15-minute bike ride down the street, you don't need sunscreen.

COLLINS: OK.

COHEN: I mean, probably, you're just fine without it. So, think about doing it that way. That for small amounts of time, you're probably OK without sunscreen. I mean, obviously, you'll want to check with your doctor first but maybe you've gotten too hyper about the sunscreen.

COLLINS: We found out later it wasn't rickets or scurvy for me, it was gluten.

COHEN: There you go.

COLLINS: You know.

COHEN: Well, glad to hear the rickets and the scurvy weren't an issue.

COLLINS: Elizabeth Cohen, thanks so much.

COHEN: Thanks,

COLLINS: Great study. Thank you.

Presidential promises made and possibly broken. Now the White House says middle class Americans may be facing higher taxes after all.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.

(BEGIN VIDEO CLIP)

JOHN NORWOOD, CONTINENTAL FLIGHT 128 PASSENGER: Fighting, and where the masks come down and everything - people that weren't seatbelted in flew up and hit the ceiling. So, their faces, their heads hit the plastics and broke all the plastics up top.

UNIDENTIFIED FEMALE (off camera): Was there any warning, passengers buckle up...

NORWOOD: No, no. It happened like this.

(END VIDEO CLIP)

COLLINS: One of the passengers there reporting on his experience inside Continental Airlines Flight 128. We've been telling you about it all morning long coming out of Rio de Janerio. En route to Houston, it had to divert to Miami because of severe turbulence, we're told that at about 38,000 feet near the Dominican Republic.

We are understanding that there are 28 injuries actually of people treated at the scene. Twenty-six of them were injured and four which were serious. So, seven passengers also taken to the hospital. Obviously, a lot of people are being treated and really trying to figure out what exactly happened there. We see those pictures there from our affiliate WSDN there in Miami.

We'll continue to stay on top of it there. We are also understanding from someone who was on the line with us a little bit earlier, her son was on that flight. She has spoken to him. He says that everyone is being rebooked on different flights, either to continue on to Houston or whatever their final destination was. So, once again, we will stay on top of the story for you. Let you know if we get any new information.

The Obama White House sent a message to the middle class America. You may be facing a tax hike after all. The administration says despite all of the campaign promises, it can no longer rule out the middle class having to pay more.

Christine Romans, part of CNN Money Team with more on this right now. I guess we should try to figure out what the middle class is, first off. Right?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, that is true. And the other thing is, how careful this language is from the administration. You know, the president, on the campaign trail and since then said, look, if this is going to be a burden to the middle class -- for example, health care -- it's not going to be a possibility to him. He doesn't want the middle class to be burdened by paying for health care. They'll find other ways to pay for it.

And much more broadly, he has said that the middle class will not see a pay raise. He has said that people who make $250,000 or less will not see -- sorry, a tax increase. But this is the language on the weekend from his two top money men, and it very specifically did not rule out future tax increases for the middle class. Listen.

(BEGIN VIDEO CLIP)

LAWRENCE SUMMERS, DIRECTOR, NATIONAL ECONOMIC COUNCIL: There's a lot that can happen over time. But the priority, right now - so it's never a good idea to absolutely rule things out, no matter what.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: But we're going to have to look at - we're going to do what's necessary. Remember, the critical thing is people understand that when we have recovery established led by the private sector, we have to bring these deficits down very dramatically. What the country needs to do is understand, we're going to have to do what it takes. We're going to do what is necessary.

(END VIDEO CLIP)

ROMANS: And there are plain (ph) economists, Heidi, who've long said doing what it takes and doing what is necessary is going to mean either huge spending cuts or a very, very vigorous, vigorous recovery and some sort of raise in taxes on a lot of different types of people to pay for all of this rescue.

Now, remember, we were spending more money than we made even before the financial crisis, and the financial crisis really threw our finances for a loop. We have an $11.6 trillion national debt. Think of that. $11.6 trillion dollars. What matters so much is not the size of the debt as the size of the debt relative to the size of the economy. Thirteen percent of our economy is our debt. This is a situation when you look at all of the debts and deficits together that they are going to have to have tough choices down the road and very pointedly, Larry Summers and Timothy Geithner not ruling out some sort of tax increase down the road.

COLLINS: Well, all right. We're watching close. Thank you. Christine Romans, thanks.

The surprisingly popular Cash for Clunkers program could be done for unless the Senate acts quickly. CNNmoney.com's Poppy Harlow has her breakdown from New York about this.

Hi there, Poppy. This thing was incredibly popular after all.

POPPY HARLOW, CNNMONEY.COM: It was incredibly popular. Pretty much all of the money has run out. That's what most analysts are saying. The initial $1 billion in funding essentially exhausted during the first week of the program, but the Senate could vote today to add $2 billion to that program. That is after the House approved that. Very quickly in a vote on Friday.

What this is, folks, as you know by now, about the top level here, the $4,500 government credit. You trade in your gas guzzler for something that is more fuel efficient. But you know, the Senate outcome is really unclear because there are oppositions on both sides, not just from some Republicans. Some GOP senators arguing that this is yet another auto industry bailout, and some Democrats don't feel that the fuel economy standards are high enough. There is a lot of question about whether that extra $2 billion will even get through the Senate.

COLLINS: Let's talk about the program that hasn't gotten much attention. What happens to these clunkers after they're left at the dealership?

HARLOW: It's very interesting. We visited one dealership on Friday. The dealers have to destroy the engines, so you can't put the clunkers back on the road. And we went to a dealership -- a Nissan dealership -- in New York, and what you're seeing there is they are killing the engine on a 1996 Plymouth Voyager.

Here's how you do it. First, you drain out the oil. Then, you pour a few quarts of what you see there. That's water mixed sodium silicate. It's otherwise known as liquid glass. You pour that into the engine, you rev up the care, and essentially, the engine dies forever so you can't put those cares back on the road. And then they take them over to the scrap yard, they take off the doors, the hood, whatever they can use, and they crush them with that huge machine.

You know what? It's interesting because there's some uncertainty among dealers about the financing aspect because previously, the rules had required the dealers to destroy the trade-ins before they get that credit, before you apply for the rebate. Imagine that. You destroy something, and it doesn't apply. But that's all been reversed. You are not stuck with a car that you can't sell. That has all been reversed, so therefore, they've been changed. The dealers can wait until they get the money before they wreck the vehicle, Heidi.

COLLINS: All right. I like that you guys got a shot of the junkyard dog there. That's key to the story.

(LAUGHTER)

All right. Poppy Harlow, thank you.

HARLOW: You got it. COLLINS: The Cash for Clunkers program is turning out to be a huge boon for automakers. After years of decline, we could be seeing a bit of turn around in sales.

Susan Lisovicz at the New York Stock Exchange now with details on that and a look at the rally we're seeing on Wall Street, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: That's right. And if we can lead with that, Heidi...

COLLINS: I like it. A boon (INAUDIBLE) when I looked a minute ago.

LISOVICZ: That's right. And if you look at that rally, you look at that green. Green shoots, let's call it. This rally got some juice at the top of the hour. Why is that? We got two closely watched reports on the economy, Heidi. One of them is construction spending coming in with growth when a decline was expected. And then manufacturing, which has just been decimated in this recession. We did see a decline but much less than expected.

And you saw this rally take off. Right now, the S&P 500 is trading at 1,000. We haven't seen that since November. The NASDAQ is just a hair below 2,000, and we haven't seen that since October. So, there is real optimism. Maybe the worst is over, that a recovery could begin. That it's certainly much closer than it was this year.

You're talking about Ford. Ford is trading at a 52-week high. They are trading at $8 -- right above 850. This was a stock trading at a dollar earlier this year.

COLLINS: Yes.

LISOVICZ: Why is that? Because Ford is offering a preview of its sales. Ford executives telling CNN that its sales rose in July. The first year-over-year increase for any U.S. auto maker in nearly two years. We'll get the official numbers later this afternoon.

But what Ford is telling us is that sales started to improve in June, firmed up in July, and then what Poppy and you were talking about, the cash for clunkers kicked in. So, we don't know whether that's going to be continued. We do know that it's helped the automakers, including Ford. Ford has a bunch of fuel-efficient models, including the Fusion, the Escape, the redesigned Focus and other. And Ford shares are rallying ,and we're seeing a very nice rally overall one hour to trading, Heidi.

COLLINS: So, I don't want to over react or anything, but could this be the stimulus the auto sector and maybe even the broader economy needs?

LISOVICZ: You know, overall, Heidi, July is expected to be the best month for auto sales this year. This, according to the National Automobile Dealers association. Customers who never bought a car are doing so now. And new cars, that is. So, dealers in all segments, almost without exception are reporting significant sales. What is happening at Ford is also happening to its competitors.

I think what everyone needs to see is more than a one-hit wonder. We need more evidence. But what we've been hearing, all of this stuff, with a better-than-expected GDP, with the big July rally, with the existing and new home sales, with home prices, it's encouraging and it's welcome news for just about everyone.

COLLINS: OK. Well, we'll welcome a lot more of it. Susan Lisovicz, thanks so much.

LISOVICZ: You're welcome.

COLLINS: The Senate wading back into the health care debate today, but it may not reach any agreement (ph) on its reforms before its month-long recess begins on Friday. The House already left for its recess, as you know. They made some moves before the break, setting up a vote on its reform plan in September.

At least 75 coalition troops were killed in Afghanistan in July, making it the deadliest month of the eight-year long conflict. That's the latest series of attacks. August is not off to a good start, either.

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COLLINS: Nine coalition troops killed over the weekend in Afghanistan in a deadly attack on police this morning. All of this as the country prepares for elections in just a few weeks.

Ivan Watson is joining us now live from Kabul with more on this. Ivan, good morning to you once again.

IVAN WATSON, CNN CORRESPONDENT: Good morning, Heidi. There was a deadly attack targeting a police commander in the western Afghan city of Harat (ph) today. A roadside bomb which killed 12 people, 10 Afghan civilians and two police officers, as well.

You've got about 101,000 U.S. and NATO troops on the ground trying to make the country safe for elections to take place. In addition to the security challenges taking place here, you're in a country that is incredibly poor, impoverished and torn apart by decades of war. And we spoke with the election commission that's putting these elections together on August 20. It cost some $223 million, Heidi, and it's going to take until September for us to get the results of the August 20 presidential elections. Let's take a listen to the spokesman for the election commission.

(BEGIN VIDEO CLIP)

NOOR MOHAMMAD NOOR, INDEPENDENT ELECTION COMMISSION, AFGHANISTAN: It is so difficult to collect all the little paper from 29,000 (INAUDIBLE). It takes time. Here in Afghanistan, there is no electricity, no telephone system in (INAUDIBLE) Afghanistan. So, we have not able to collect all the little papers in a spot today.

(END VIDEO CLIP) WATSON: Heidi, there are 41 Afghan men and women running for president right now, and we've been talking to some of them as they go out and campaign. Of course, taking risks, possible assassination attempts, insurgent attacks. Let's listen to a conversation we had with Ashraf Ghani, a former finance minister who is running for president.

(BEGIN VIDEO CLIP)

WATSON (off camera): What do you think is the biggest issue of this election?

ASHRAF GHANI, AFGHAN PRESIDENTIAL CANDIDATE (through translator): A government that can enjoy the trust of the people. This government has lost it. There's no sense of trust. Not only in the current leadership, but in the (INAUDIBLE) class as such. And the capacity of the state or national community to improve the lot of our people. So, restoring trust, a bond, between the nation and the state is the most significant challenge that we face.

(END VIDEO CLIP)

WATSON: So, there we have Ashraf Ghani slamming the government of the incumbent president, Karzai, Heidi. And he's running for re-election after he won elections five years ago. Heidi.

COLLINS: All right. Very good. We're watching the run up to August 20. Thank so much. CNN's Ivan Watson from Kabul, Afghanistan. Thank you.

Iran's supreme leader has formally endorsed Mamoud Amadinejad for a second term now, but there was not a whole lot of back slapping at this ceremony. Could there actually be a rift between the two of them? Let's bring our Reza Sayah over at our Iran desk to talk more about the video that we're looking at right now. Reza?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Heidi, talk about this video, then we're going to update you. Actually, let's update you on the latest, just into the Iran desk. About 1,000 protestors and opposition supporters marching down the Valleas (ph) street. This is a major thoroughfare in downtown Tehran. There was a lot of talk that this could possibly happen to coincide with the ceremony that you were just looking at.

According to a source, you have about 1,000 protestors marching down this street and chanting "God is Great" and honking their horns. No clashes yet, but security forces are out there. Scores of more than 100, according to a source.

Let's talk about the ceremony that took place earlier today in Tehran. Iran's supreme leader officially endorsing President Ahmadinejad. There was a lot of talk about a rift between these two individuals that emerged a couple of weeks ago. So, we're eager to see how they would interact and there you can see the hesitation. Not quite sure what it was, but it certainly wasn't as smooth as it was four years ago. There you can see the president, little hesitation, then he leans in and kisses the supreme leader on his shoulders. In Arab culture, not Iranian culture, in Arab culture, kissing someone on a shoulder is a show of loyalty and allegiance.

If we can compare that to the same ceremony four years ago, see, a big difference. Now -- well...

COLLINS: No, I don't think that's it.

SAYAH: No. This is four years ago. Now, watch this difference. This was 2005. His first time he was elected. And there you can see he takes the document, the seal of approval. Then he goes in and kisses the supreme leader's hand, the first president ever to do that. And there you can see the exchange, a very warm embrace. Quite a contrast between what happened in 2005 and 2009 this morning.

Now, the president dismisses any kind of rift. Last Friday, he came out and said that the supreme leader is like my father, but you can be sure that a lot of people will be talking about the stark contrast. The ceremony coming a little under two months after that disputed vote. Many opposition leaders still say that the vote was rigged, and many of those leaders no shows at this particular ceremony.

COLLINS: Yeah. Understood. All right. Reza Sayah for us this morning over at our Iran desk. Very interesting video to watch. Thanks, Reza.

The White House flight that panicked New Yorkers, embarrassed the administration and became known as "Scare Force One." We have the new details and new photos to share.

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COLLINS: The Air Force has released a whole album of pictures from the so-called "Scare Force One" incident over New York in April. Take a look at this now. Another 145 pictures from the photo-op flyby that terrified New Yorkers. It also cost taxpayers $300,000. The photographs show the Boeing DC-25, the military version of 747, making three passes by the Statue of Liberty. Hundreds of terrified New Yorkers believed they were about to witness a terrorist attack, given the history from September 11.

One person is dead. More than 70 injured after an outdoor stage collapsed at a concern in Canada. About 15,000 people were attending a concert during a festival 50 miles south of Edmonton, Alberta. A violent storm packing high winds, hail and heavy rain slammed into the area during the show. Actor Kevin Costner and his band was scheduled to perform at the concern before the stage collapsed.

Rob Marciano is standing by in the Severe Weather Center with more on what's happening across the country. Hi there, Rob.

(WEATHER REPORT) COLLINS: All right, Rob. Thank you. Appreciate it.

MARCIANO: All right.

COLLINS: A church in Florida gives away money to its members, but there is a catch in how it should be spent.

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COLLINS: Instead of asking church members for donations, one congregation in Florida is giving money away. Affiliate reporter Iaksa (ph) Diaz from WESH tells us why members are paying it forward instead of pocketing cash.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: ...and it was kind of like, really? Are you serious? Are we really doing this?

IAKSA (ph) DIAZ, WESH-TV CORRESPONDENT (voice-over): Congregation members at First Baptist Obido (ph) were stunned when each member received an envelope with cash. Ten, twenty, even a hundred dollars inside.

UNIDENTIFIED MALE: And I have four children and a wife, and all of us kind of looked at each other, and they got a big laugh out of it.

DIAZ: The mission? Pay it forward. Pass on the cash to someone who needs it.

Dan Byrd gave his ten bucks to a waitress who seemed to be having a bad day. She surprised him back.

DAN BYRD, CHURCH MEMBER: I had started to explain what our church is doing, and before I could even get it out, she said, "Oh, is it the Baptist church in the middle of town?" I said, "Yes, that's right. How did you know?" She said, "I've already had two other people that have given me money because of what your church is doing."

DIAZ: A friendly cashier at a Winter Park Wendy's received Patty Villane's money.

PATTY VILLANE, CHURCH MEMBER: Her eyes just got very big, and she immediately just started smiling and she was trying to get her co-worker's attention.

DIAZ: A chance meeting with a homeless man outside of a church moved Don Jacobs to give him his $20. Others are still waiting for the right moment.

UNIDENTIFIED FEMALE: I'm still praying about what to do with mine.

DIAZ: The church hopes the random acts of kindness will blossom across Oviedo, central Florida and beyond.

BYRD: Hopefully, we'll inspire people to continue to bless people and see if that makes a difference.

(END VIDEOTAPE)

COLLINS: I'm Heidi Collins. CNN NEWSROOM continues now with T.J. Holmes.