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On the Fringe Line: Health Care Town Halls; 'Culture of Corruption' in Detroit; Holding Steady on Interest; Army Private Accused of Being Drug Cartel Hit Man; New Study Says More Than Half Of Health Care Spending Wasted; Horses Found Butchered and Sold For Food in South Florida
Aired August 12, 2009 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PHILLIPS: Crowds packing more town halls coast to coast. We are pushing forward on health care reform this hour. We are going to start with a story that grabbed our attention this morning. A tough lesson for parents and students in Detroit. Public school employees accused of embezzlement, stealing from a school system already broker than broke. We are going to actually talk to the investigator that found out about this corruption live in just a couple minutes.
We are nearly two weeks into this make-or-break month for health care reform. Feverish debate making the summer of '09 even hotter than normal. Lawmakers taking the issue out of D.C. and into the heart of America. A bunch of town hall meetings scheduled today from New Jersey to Florida to Montana. Some going on right now. We are following one in Hagerstown, Maryland. Senator Ben Cardin hosting that one. Also, already some heckling going on there.
Then in Englewood Cliffs, New Jersey, Congressman Steve Rothman is hosting one there. We are monitoring that as well. In Iowa, two down, two more to go for Republican senator Charles Grassley. Four town halls in one day. The president praised Grassley yesterday as a Republican that is trying to come up with health care reform that both parties can live with. Grassley is one of the bipartisan group of six senators heavily involved in the negotiations.
Our national political correspondent Jessica Yellin is monitoring the town hall meeting going on in Hagerstown, Maryland. As we mentioned, senator Ben Cardin is running the show.
Jessica, is he encountering the same type of fireworks that we've seen at a number of these other town hall sessions?
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: He is. No pushing and shoving, but he has sure taken fire. This time, Kyra, from both the right and the left.
We are hearing voices of mistrust, a lot of contempt for politicians, and a sense of fear, panic, loss of control. Folks really worried on both sides about whether the government, on the one hand, can handle taking any involvement in health coverage and handling it well. On the other side, members of the people who are allied with the president deeply concerned that they are not fighting back hard enough. Someone on the left said, "Why aren't you pushing back more aggressively against these critics of health care reform?" And folks are being shouted down on both sides.
Let's take a listen to what happened just a few minutes ago. The first sound bite you are going to hear is from someone who supports health care reform. And then the second is from somebody who is deeply critical of the plans being proposed.
Here you go.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We have 700,000 Marylanders uninsured -- 700,000 Marylanders uninsured, 47 million in the United States.
Excuse me. Please let this -- please let the individual speak.
UNIDENTIFIED MALE: How are you going to look at my children in their eyes and tell them they are going to have a better future with $99 trillion? Say it with me, $99 trillion that you did. And your cohorts up there on Capitol Hill, how are you going to look at my children?
(END VIDEO CLIP)
YELLIN: Now, Senator Cardin has stayed very calm. He has not gotten into a tussle with any of the members of the audience. And they really limited the questions, one minute and then a one-minute response.
Some of the topics that have come up, Kyra, whether there will be euthanasia, whether this is a movement to a single payer plan, how they will keep down costs. And an interesting question, how will you get the extra doctors and providers available if you do cover everyone in the United States? And it's still ongoing.
PHILLIPS: All right. We'll keep tracking all the town halls.
Thanks, Jessica.
And coming up in just a bit, Ali meets America. Our chief business correspondent is riding the CNN Express, getting some great feedback from Americans about health care reform. No politicians, no shouting. Just genuine concerns, questions, opinions.
We'll be checking in with him soon.
And fireworks, that's one way to sum up what's been happening at some of these town hall meetings. But it's important to remember there is no health care reform bill. Congress, in fact, is considering five competing bills right now. Perhaps that's helping fuel all this misinformation.
So, CNN's Carol Costello is trying to sift through it all for us.
(BEGIN VIDEOTAPE)
CAROL COSTELLO, CNN CORRESPONDENT: Kyra, the number one thing to keep in mind before we dive into this, there is no -- repeat, no -- health care reform bill ready to be voted on by both the House and Senate. A key House committee did pass a bill, and that's the 1,000 page bill you hear about, but that's not a final bill either. That's why lawmakers are holding these town hall meetings that aren't exactly answering questions.
UNIDENTIFIED FEMALE: We don't trust anyone (ph).
COSTELLO (voice-over): If you are looking for answers about health care reform, good luck. Politics, misinformation, noise is about all you seem to hear. Time to quiet the noise and bust the myths -- or not.
Let's start with this. Death panels: true or false? As Sarah Palin put it, seniors and even babies with disabilities "will have to stand in front of Obama's death panel so his bureaucrats can decide whether they are worthy of health care."
BILL ADAIR, POLITIFACT.COM: That one is so wrong it has gotten a pants on fire on our truth-o-meter.
COSTELLO: Phil Adair who runs politifact.com says false. Palin's allegation arose out of an idea to allow for Medicare to pay for counseling for people who want advice about end of life are.
OBAMA: If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.
COSTELLO: True or false? In theory, these things are true. but there are valid concerns.
ADAIR: Given that this is going to dramatically change the marketplace of health insurance, we don't know if any given health insurance will be offered the same way in a few years.
COSTELLO: Rationing -- true or false?
Arguably, private health insurance plans ration. They decide what is covered and what's not.
Politifact.com says there is nothing in the House bill that specially addresses rationing. But it is logical to assume that someone has to decide what and how much is covered.
ADAIR: If you like the post office and the department of motor vehicles and you think they're run well, just wait until you see Medicare, Medicaid, and health care done by the government.
COSTELLO: But government can't run big programs. True or false? Critics have even gone as far as drawing up a diagram of how dysfunctional the government health care plan will be, even though no such diagram actually exists.
ADAIR: If the government can run Medicare, what's to say it couldn't run this kind of a program?
COSTELLO (on camera): On the subject of abortion, according to PolitiCheck.com, no federal funds will pay for abortions. On the subject of how to pay for health care reform, that is the big unknown.
There are real fears increased taxes will spread to the middle class. Will they? The president says no, but there are plenty of others who say he will have no choice -- Kyra.
(END VIDEOTAPE)
PHILLIPS: Carol Costello, thanks so much.
Now back to our top story.
A tough lesson for parents and students in Detroit -- public school employees accused of embezzlement, stealing from a school system already broker than broke. And these aren't the first Detroit public school employees accused of corruption this year, by the way. And they definitely aren't the first folks that you'd suspect -- everyone from a teacher's aide to a cafeteria coordinator to a truck driver. Not big bucks administrators here, and not likely the last to face charges.
At the forefront of the ongoing investigation, DPS Financial Emergency Manager Robert Bobb, and also joining us is prosecutor from Wayne County, Kym Worthy.
Kym, we're going to talk to you in just a second.
But Robert, let's start with you. Did you get a tip, or how did you know you were on to something here?
ROBERT BOBB, FINANCIAL EMERGENCY MANAGER, DETROIT PUBLIC SCHOOLS: Well, we opened an Office of the Inspector General and we have our own confidential hotline for employees to report waste, theft or abuse. And so, the tip line does work very well.
PHILLIPS: And so, how did you take the investigation from that point, and what did the tip line tell you? Did they say, hey, we've got proof that so-and-so has this money, or has these goods somewhere? Kind of tell me the process.
BOBB: Well, the process is, all one needs to do is call our tip line, and it goes directly into the Office of the Inspector General. Our inspector general is a former retired FBI agent who was in charge of all investigations in the state of Michigan. And our office is populated by expert former FBI investigators, as well as investigators from the Detroit Police Department, retired, as well as two experts who are in charge of our school police.
And so, those individuals followed the investigations from the tip line, and based on their investigations, when they believe that a criminal act has occurred, then that information is turned over to Ms. Worthy's office, our county prosecutor, for prosecution. PHILLIPS: Well, and let's just talk about what these investigators found, Robert. I mean, a lot of unused equipment, outdated BlackBerrys, motorcycles, two-way phones, handheld radios. And then, also, there were dead people registered for health benefits. And you're even saying those benefits could save the district an immediate $2.1 million.
We can talk about the unused equipment, the goods that were purchased, but how did this happen, dead people who are registered for health benefits?
BOBB: Well, we are doing a very in-depth health care dependent audit. And we gave 13,000-plus of our employees two weeks to take ineligible dependents off of our health care plan. In that two-week period, 517 dependents who were ineligible came off of the plan at a saving of $2.8 million.
Now the moratorium is over. The phones are ringing off the hooks, unfortunately. And so, we will require employees with ineligible dependents to repay the health care benefit, as well as the benefits that we have paid for those persons. And then, that information will be turned over further to our inspector general's office for potential further prosecution, as it may.
PHILLIPS: And so, Kym, what's the strongest piece of evidence here? As a prosecutor, why do you feel so confident that you're going to be able to hold these people accountable?
KYM WORTHY, PROSECUTOR: Because not only is my office familiar with the investigators that have been involved in these investigations from working in the past, we have people in our office that are experienced in these kind of cases, in my public integrity unit, and we have gone back through this evidence and reprocessed it, and we are sure we can prove it beyond a reasonable doubt.
The investigation is solid, it's tight. What they have given us is something we can work with, and we're clear that we can go on and prove these charges beyond a reasonable doubt in court.
PHILLIPS: What about the folks, Kym, that apparently are still actively working in the school system? I understand there's some pending charges against these individuals. Is it possible that these folks that may be busted real soon will actually be going back to these schools and getting a paycheck?
WORTHY: Well, the ones that we have charged have already been dismissed by Mr. Bobb and his staff and the inspector general. And the ones that Mr. Bobb is talking about that have been on the rolls or dummy employees, so to speak, we're still awaiting the completion of their investigation, and then we will look at that and determine if we can issue charges in those cases. But I am sure that he and his staff will dismiss them if he determines that those charges should be then forwarded on to my office.
PHILLIPS: So, Robert, how do you make sure this doesn't happen again? I mean, it's great to catch these people and hold them accountable, and get them the heck out of that system, especially when you're in an area that is already struggling so much because of the economy.
How do you make sure this doesn't happen again? Are you going to be able to implement a better monitoring system?
BOBB: Oh, we've already implemented a very strong monitoring system not only through the audit at the general's office, but also through the office of our inspector general. And we have very tight procedures in place.
Now, individuals who are determined to bilk the system, they will. But once found...
PHILLIPS: At least you'll be watching them.
BOBB: Oh, absolutely.
PHILLIPS: Well, let me ask you this, too, before I let you go. Just looking at all the loot here, really -- I mean, 160 BlackBerrys, 11 motorcycles, 97 two-way phones, 50 handheld radios -- can you sell all this loot and put the money back into the school system?
BOBB: Well, we are going to sell all of those items that we found. That was just in one department. We still have a warehouse of equipment yet to be sold as well.
PHILLIPS: Wow. So it's just begun, I guess.
Well, I'll tell you what, great job, Robert Bobb, with this investigation.
And Kym Worthy, you definitely have a lot of work ahead of you, but it's nice to see how you are staying strong and you're going to hold these people accountable.
We already know how that school system has been suffering, even talking about bankruptcy. And this just broke our hearts to hear that now folks within the system have been acting on such criminal levels.
And we'll be following up definitely on your investigation.
WORTHY: Well, they keep us busy with everything else we have to do, but it's going to be for the greater good of the children in the end.
PHILLIPS: That's true. You're going to have a paycheck coming in, Kym, with all the work you have ahead of you.
Appreciate you both. Thank you so much.
WORTHY: You're welcome. Thank you.
BOBB: Thank you.
PHILLIPS: Well, unfortunately, Detroit's issues don't stop with the school system. The city's economy has just been devastated.
People in businesses have moved out and there aren't even any big supermarket chains left in town. So, folks have had to get pretty crafty, get a little old school, and literally plant the seeds for a solution themselves. Urban farming in Detroit -- we're going to have those details just ahead in a few minutes.
All right. And we are still monitoring the town halls across the country. This one in Hagerstown, Maryland. From what we understand, it has remained civil, but it has gotten heated. A lot of questions there to Senator Cardin.
We're following this and a number of other forums that are happening throughout the U.S. this afternoon, including this one as well in New Jersey.
(COMMERCIAL BREAK)
PHILLIPS: All right. Let's track down our roving chief business correspondent, shall we? Ali Velshi working his toward Iowa. All this week he's been out on his bus talking health care reform with real people from Georgia, Tennessee, Kentucky, moving his way northwest toward the Mississippi River now.
You got that CB radio working, Ali?
ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: We do, actually. We're just crossing the Mississippi as we speak right now. We're running a little behind schedule.
So, we thought we would be on the other side. We're crossing from southern Illinois into Missouri, right at St. Louis. But every time we stop, we stop to get gas, we stop to get a bite to eat, people come up and talk to us. And we're having a fantastic discussion with Americans about health care.
We had a bit of the discussion last night in Kentucky, in Paducah. Let's listen to a little bit of a real civil town hall meeting that we just had -- we just started up by chance.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Well, my husband and I are two of the 47- million-plus that don't have health care. And I'm not talking insurance. Of course we don't have insurance, but I want health care.
My husband has diabetes and he just had a bout with cancer. What insurance company is going to cover us? There aren't any.
If I get sick today, where do you think I'm going? I'm going to the emergency room. Who is that costing? That is costing us, the taxpayers.
So, if it's going to cost my bottom line, if they have to tax me more in order to get health care, tax me. Tax me. Tax me. Tax me. I am willing to pay. VELSHI: Let's talk about the 46, 47, 50, whatever million you want to use of the number of people who are not insured in this country. What's your thoughts on that?
UNIDENTIFIED MALE: I would really love to drive a Hummer. They're cool cars. I can't afford one, so I don't drive one. I drive what I can afford.
UNIDENTIFIED FEMALE: Oh, my God. I can't believe you're saying people don't deserve health care if they can't afford it.
UNIDENTIFIED MALE: Where did I say that?
UNIDENTIFIED FEMALE: That's what I hear you saying. Then you're not listening, Heather. I said...
VELSHI: Well, you did say that you'd like to buy a Hummer and you can't buy a Hummer because you can't afford it. So, if you can't afford the Hummer, you don't drive it. If you can't afford health care, you shouldn't get it?
UNIDENTIFIED MALE: No, no, no. I'm saying you have the basic stuff. You get a catastrophic illness, you're in a car crash, something like that happens, of course you get coverage for that.
(END VIDEO CLIP)
VELSHI: Kyra, we are hearing that sort of discussion everywhere we're going. It is civil. It is enlightened. It's not necessarily people who agree, but the response that we have had to that clip, which you can see more of on CNNMoney.com -- we've got an extended version -- just accounts we're getting there, on CNN.com, on Twitter, on Facebook, is that it felt more civil. And that's the kind of conversation that so many Americans are hungry for.
We're going to try and replicate that as much as we can, but clearly, that's going on across the country -- real discussions, people wanting real information about health care, getting a little bit tired, it seems, of what they see as political bickering and yelling and screaming. They want to know what's in it for them, what it's going to cost them, how it's going to affect the quality of their health care, and the options that they have for health care provision -- Kyra.
PHILLIPS: Well, Ali, quickly, one more thing. You know, we're hearing all these reports the recession is coming to an end. A lot of people still debate that.
What's the sense that you are gathering from the people that you've already spoken with?
VELSHI: Well, we've been asking that sort of question as well, talking to people about how they are feeling about the economy. We have had a few people. We had one restaurant owner saying business is great. We had a real estate agent in Tennessee saying he is definitely signing more people to contracts to buy houses, more foot traffic, looking for it.
But largely, we're still talking to people who are suffering in terms of the job market. Their home values are so much lower than they were before the recession. So, to a lot of people, it's an academic discussion.
They are happy that a bunch of economists are saying they think the recession is ending, and they don't disbelieve it. But the reality is going to be when jobs start to come back and housing prices start to come back. And neither of those are being felt very fully just yet -- Kyra.
PHILLIPS: OK. We'll keep checking in with you.
Have fun, Ali.
Well, getting word that the Federal Reserve has just issued it's latest assessment on the state of the economy, deciding to hold a key interest rate at a record low.
Stephanie Elam at the New York Stock Exchange.
So, I guess since the Fed is saying, OK, we're going to keep it where it is, what's that telling us now about the economy?
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Indeed, they are, Kyra. And that was widely expected, that the Fed would go ahead and leave things as they have been since December. That's the last time that they changed it, dropping the rate down to the range where we are now, near zero.
So, saying that the good sign here, that they're seeing economic activity start to level out. Those are the words that they have used in their statement here. And that conditions in the financial markets have begun to show signs of improving in recent weeks. And, obviously, we have seen a lot of that with the Dow being up about 1,000 points since June 24th, which is the last time that they met and had this decision day.
So, obviously, there, though, while they point out that things are starting to look better, they are still saying that it still remains constrained as far as the stabilization is concerned. Household spending, not going back out there as much as we would like consumers to get back out there, with that being two-thirds of the economic activity. That's not helping as much right now.
They said that stays weak. And because of that, economic activity will remain weak for the foreseeable future.
So, no hint at all at this point on when they will make any changes to the interest rate and start lifting it higher. But they did say that they are going to start slowing down the purchase of treasuries as part of their plan to help out the economy while it has been rather sickly. They are saying they are slowing that part of what they are doing down at this point, and that when they look at it over the extended time, they still think it's really important for them to not do anything with the rates and make sure that the economy can fully recover before they start making changes.
But this is in line, Kyra, with what we have been seeing with the economic data coming out. We have seen median home prices up four percent in the second quarter versus the first quarter. New home sales have been higher. Also, used homes are -- existing homes have also been on the upside.
So, we have started to see that things are starting to get better here. They are echoing that here, but not giving us any idea of when they think everything will be back on their feet. That's just important to point out after we have heard so much about, is the recession over? They are saying that we still have some work to do. Job losses are still high.
PHILLIPS: Stephanie Elam, thanks.
Some people have called Detroit a food desert where it's easier to buy liquor than lettuce. Could urban farming be the answer?
CNNMoney.com's Poppy Harlow has our breakdown now from New York.
OK, Poppy, I think we have covered everything within Detroit now. I was making a list -- the corruption in the Detroit public schools, the fact that it might have to file bankruptcy. You have been talking about all the foreclosures. You spent time there walking through the neighborhoods.
Now all the major grocery stores gone?
POPPY HARLOW, CNNMONEY.COM: They're gone, Kyra. It's an unbelievable thing that's happening.
The big chains not making a lot of money in Detroit, so they're pulling out. So, what are people going to do?
This is a story we stumbled on driving down the streets in Detroit. You're talking about a city that's 140 square miles, it's huge. The population has fallen from about two million in the 1950s to about 830,000 today.
You've got tons of abandoned land. What do you do with it? More and more people talking about this idea of urban farming. Essentially, these big community gardens, where folks grow their own food.
We spent time at this one. It's run by Earthworks. It's about two acres. They produce about 7,000 pounds of food a year, and that's because access to healthy food, local food, that's a major issue in Detroit.
As I said, no major chain grocery stores there anymore. Take a listen to just how dire the situation is.
(BEGIN VIDEO CLIP)
MOLLY MCCULLAGH, EARTHWORKS: Detroit has a huge public health issue in terms of healthy food access. It's affecting our communities in a lot of way -- higher rates of diabetes, higher rates of obesity, heart disease, things like that. And so, having healthy, fresh food access be more widespread in the city is really important.
(END VIDEO CLIP)
HARLOW: It is really important. But the recession is making things worse in Detroit, Kyra. The social services agencies, they're telling us they have seen a big spike recently in those food stamp allocations. No surprise there. More and more people going to those food banks. They are having a hard time supplying enough.
So, these urban farms might be the answer, yes -- Kyra.
PHILLIPS: Well, is urban farming enough to feed the whole city?
HARLOW: No. No way. But it could help, and there's positive signs. And we want to bring you the positive stories out of this city as well.
Earthworks, other urban farms donating to soup kitchens. They do that with a lot of their produce. And then these kids that we talked to, they take this food home and they cook these vegetables with their family for dinner, and they are learning at the same time.
Listen quickly to what they told us.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I have my own garden at home from what I learned here.
UNIDENTIFIED FEMALE: Once we had some beets, I think, and we made beet cakes. Beet pancakes.
(END VIDEO CLIP)
HARLOW: All right, Kyra. It was interesting, too. They were telling us they preferred that over the fast-food chains around.
They were learning -- they said, seriously, if you go to these fast-food chains, they said, "Poppy, there's too much salt. You should only eat it once a year."
I'm not kidding. It's a great lesson they are learning.
PHILLIPS: Do they have beet cakes? Do they really...
HARLOW: I've never had them.
PHILLIPS: Oh, my gosh. I don't know if I could -- I mean, I'm very impressed. I would rather them probably have the beet pancakes than the fast food, that's true. It's awesome to see them really into this. It's a great way to build your confidence and learn how to be innovative as well.
Thanks, Poppy.
HARLOW: Exactly right. You're welcome.
PHILLIPS: Well, if you're not feeling well right now, this news absolutely will turn your stomach. It's a study on just how much money is being wasted on health care. We're talking about a fortune that doesn't even need to be spent.
(COMMERCIAL BREAK)
PHILLIPS: Well, now watch closely. Those white specks streaking across your screen are actually part of the Perseid meteor shower. It actually happens every year as the Earth's orbit crosses paths with the comet Swift-Tuttle. The shower is hitting its peak this week, so you can see several dozen meteors in the hour in the skies. I guess an hour, rather, in the skies over the Northern Hemisphere.
And this year, Twitter is playing a role. Imagine that. Astronomers say that they have sent so many Perseid tweets, that they have displaced Disney's "Hannah Montana" star, Miley Cyrus, as the top trending topic on Twitter.
(WEATHER REPORT)
PHILLIPS: Old enough to die for his country. An 18-year-old in the U.S. Army now facing charges that he was the trigger man in a paid hit on a Mexican drug cartel member.
(COMMERCIAL BREAK)
PHILLIPS: A young soldier in the U.S. Army the latest example of the long and deadly reach of Mexico's drug war. He's now accused of being the triggerman in the murder of a drug cartel member. Here's CNN's Ed Lavandera.
(BEGIN VIDEOTAPE)
ED LAVANDERA, CNN CORRESPONDENT (voice-over): Eighteen-year-old Michael Jackson Apodaca, still wearing his military uniform, in handcuffs and charged with capital murder. El Paso police say Apodaca fired the shots that killed this man three months ago outside his home in an upscale El Paso neighborhood. The shooting victim was a midlevel member of the Juarez drug cartel, but also an informant for American federal agents.
CHIEF GREGORY ALLEN, EL PASO, TEXAS, POLICE: What we do feel is that this was retribution for the fact that the dead -- the deceased person had pretty much gotten the person in trouble in Jaurez who was arrested by the federal authorities over there. And so, consequently, this was the retribution for that arrest.
LAVANDERA: According to court documents, Apodaca was hired to carry out this hit and paid by Reuben Rodriguez Dorado (ph), a member of the Juarez cartel. Court documents say Dorado (ph) ordered the murder because the Juarez cartel discovered the victim was talking to American authorities. ALLEN: And I want to stress that this was a payback situation and not something that's an ongoing type of battle like you see in Mexico right now. So, a whole lot different. And even though this can be considered to some degree spillover, we don't look at it in the same way as it's occurring in Mexico.
LAVANDERA: According to officials at Fort Bliss in El Paso, Michael Apodaca joined the Army about a year ago. He worked as a crew member that launches Patriot missiles. But his family says they don't believe the charges against him.
DAVE JACKSON, MICHAEL JACKSON APODACA'S GRANDFATHER: He was in the top of his class. You talk to all his sergeants, he's a good soldier. Now, before he went in, he was in with a bad crowd.
(END VIDEOTAPE)
PHILLIPS: Once again, that's our Ed Lavandera reporting for us. And more time, I just want to take you over to our magic board over here. It was actually a map that was put together by "The New York Times." And we keep wanting -- we want to keep going back to it, because it really puts into perspective how the Mexican drug cartel has infiltrated the United States.
If you look at this map, "The New York Times" did a fabulous job of putting together -- see all these red dots from up in here to Port Angeles, Washington, Eugene, Oregon, Pocatello, Idaho, all the way. I mean, big cities, middle-size cities, small cities. Missouri, Illinois, Ohio, West Virginia, North Carolina. I mean, look at all these red dots. We're talking about marijuana, cocaine, methamphetamine, also heroin, talking about the growth of all those drugs across the United States.
I mean, just in 2007, the flow from Mexico with regard to marijuana has actually remained high despite the recent crackdown. Cartels are producing more marijuana here in the western United States than ever before. The same for cocaine. About 90 percent of the cocaine entering the U.S. from South America actually comes through mexico. Also, methamphetamine and also heroin, a huge production rise in Mexico. And that funneling into the United States.
So, if you want to take a look at this and actually see if your small town is affected, your medium-sized town, even the big cities -- you'd probably find that a little more obvious -- you can look at this map on "The New York Times" Web site, and you can see exactly where those drug cartels are active there across the U.S.
Well, quite a reception for the Supreme Court's newest member at a White House ceremony this morning. Escorted by President Obama, Justice Sonia Sotomayor entered to a long standing ovation. The president later calling her career an inspiration for future generations rooted in generations past.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Justice Sotomayor's rise from humble beginnings to the height of achievement is yet another symbol of that faith. Faith that the American dream still endures, faith that equal justice under the law is not just an inscription in marble but an animating ideal of our democracy. Faith that in this great nation, all things are still possible for all people.
JUSTICE SONIA SOTOMAYOR, U.S. SUPREME COURT: It is this nation's faith in a more perfect union that allows a Puerto Rican girl from the Bronx to stand here now.
(END VIDEO CLIP)
PHILLIPS: Justice Sotomayor asked all Americans to wish her divine guidance and wisdom as she starts her new job.
Now, in just a few minutes, 16 amazing people will get America's highest civilian honor. They range from a preacher to a physicist to an Oscar-winning actor. President Obama will be handing out the awards in a special ceremony. The White House says that the recipients were selected for their relentless breaking of barriers, and they set a standard for which we all should strive for.
Coming up at the 3:00 Eastern hour, Rick Sanchez will actually have live coverage from the White House as President Obama awards those 16 Medals of Freedom.
As town halls have shown, plenty of Americans are happy with their health care and oppose the government health insurance program. But there are those people faced with a system they just can't make work, like the family photojournalist Tim Hart found in Ramona, California. It's part of our series "Health Care in Focus."
(BEGIN VIDEOTAPE)
REY HERNANDEZ, FORMER INSURANCE AGENT: I started as an agent in 1967 at the age of 23. I was an insurance agent for 35 years. I loved the business because it rewarded you for the effort. Over the years of my career, I saw the coverage get more expensive, but you got less.
Here's my tax return from 2002. Our medical expense that year, a month, was $960. Now, I go to 2007, and the cost came out to $1,990 a month. That's almost $24,000 that year. Because we could no longer afford that kind of cost, we did the unthinkable. We dropped our insurance.
JANET HERNANDEZ, WIFE: It is a little scary not to go to the doctor when you think maybe, well, I should have this checked.
R. HERNANDEZ: We finally got her coverage. It was around $500 a month, not a very good plan.
J. HERNANDEZ: And still today, with changing my deductibles, higher deductibles every year, and still the cost keeps going up, up, up.
R. HERNANDEZ: It took a huge chunk of our income.
J. HERNANDEZ: We've cut way back on most of all our expenses. We just don't do the things we used to do. Not knowing and not knowing that you could lose everything if something happened, that's what was scary about it.
R. HERNANDEZ: I feel very nervous and uneasy about that. And I shouldn't be. I shouldn't have to feel that way. In my senior years, I should be able to feel secure.
J. HERNANDEZ: We had planned so many years for our retirement, and to be able to do things and travel and spend time with our grandchildren.
R. HERNANDEZ: As an American citizen, I know I have a right to an education. If I get in trouble with the law, I have a right to an attorney. But why don't I have a right to health insurance, affordable health insurance? There's something wrong with that picture.
(END VIDEOTAPE)
PHILLIPS: More than half of our health care spending in the U.S. wasted, unneeded. We're talking more than $1 trillion, flushed away, according to one study. How do we stop the bleeding, so to speak?
(COMMERCIAL BREAK)
PHILLIPS: Dog, cat, bunny or horse, a pet is a pet, and in many cases, a member of the family. So, just imagine the trauma if your pet disappeared one day and turned up butchered, sold for food. An incredibly disturbing report now from CNN's John Zarrella.
(BEGIN VIDEOTAPE)
JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): The dirt road leads away from the ten-acre pasture where Yvonne Rodriguez last saw her horse alive.
(on camera): Back in here nobody would ever have seen him. At the end of the road next to a palm tree is where Geronimo was found, what was left of him. Rodriguez got the call from her dad.
YVONNE RODRIGUEZ, HORSE OWNER: And he said, don't come, because it's not very nice.
ZARRELLA (voice-over): Geronimo had been slaughtered.
RODRIGUEZ: Not only was my horse stolen, he was butchered. Ok, he was tied up to a palm tree.
ZARRELLA (on camera): So all of these were blood stains here?
RODRIGUEZ: Yes and that from up here to down there, but Geronimo is the type of horse that my goodness, if he had an apple in your hand, he was your best friend. ZARRELLA: The meat had been carved from his bones.
This is part of Geronimo's mane?
RODRIGUEZ: Yes, it is.
ZARRELLA (voice-over): Animal rights organizations say Geronimo's death is part of an alarming growing black market for horse meat in south Florida.
Richard Couto examines the remains of another slaughtered horse. He's an investigator with the SPCA.
RICHARD COUTO, SPCA INVESTIGATOR: I found a puncture wound under the chin. The horse bled out; probably it took a while for this horse to die. In more cases than not, the horses are actually butchered alive.
ZARRELLA: Since the first of the year, 17 horses have been found butchered in Miami-Dade County, two more in Broward County. Police say they have seen cases of horses slaughtered for the meat in the past but nothing to this level.
While police can't confirm a black market exists they are pretty sure these horse killings were motivated by profit.
CAPT. SCOTT ANDRESS, MIAMI-DADE COUNTY POLICE: It appears as though the offenders' main goal was not the killing of the animal but that their main goal was whatever activity they were engaged in postmortem.
ZARRELLA: It's illegal in the United States to buy or sell horse meat, a delicacy in some Caribbean and Latin-American nation. Couto says it brings up to $40 a pound. But he says the buyers are paying a lot for meat that can make them sick.
COUTO: These animals, these horses see veterinarians on a monthly basis. They are being pumped with all types of drugs, antibiotics, steroids, tranquilizers.
ZARRELLA: The horse Couto examined had been led from its stall and killed a few feet away. Its foal in the next stall was left unharmed.
They are professionals Couto says in the way the horses are butchered and their remains hidden.
Yvonne Rodriguez can attest to that. This is part of the tarp they cover him with?
RODRIGUEZ: Yes. And God help them when they find them.
ZARRELLA: The illegal buying and selling of horse meat has apparently gone on for years in South Florida. But no one has figured out yet why the sudden up-tick. Couto calls it South Florida's dirty little secret. It's a secret no more.
John Zarrella, CNN, Miami.
(END VIDEOTAPE)
PHILLIPS: Well, as you know, my next guest is helping investigate Florida's dirty little secret. You saw him right there in the piece, Richard Couto. This is very personal for him. This is his pet horse, Freedom's Flight. Couto actually rescued the race horse with champion bloodlines, by the way, from a slaughterhouse. He is taking extra precautions to protect him now.
Richard Couto joins me live from Miami. So, Couto, what do you think is causing this uptick? Is it the bad economy?
COUTO: You know, Kyra, it is not. The black market horse meat issue in south Florida is alive and well. This horse meat is being sold for anywhere from $7 -- we're now getting reports of up to $40 per pound. I and anyone in America can go to their local grocery store and buy chicken or certain type of beef for a few bucks a pound. So, it's certainly not the economy. We believe it is culturally driven.
PHILLIPS: It's culturally driven. OK, but why the uptick, though? Why all of a sudden -- because I was reading that on average, maybe it would sell for $7 a pound, but now as much as $40 a pound. So, what has happened culturally that is driving this up?
COUTO: You know, what that's telling me in the south Florida SPCA, that the demand is increasing. Whether the population is increasing that eat horse meat in the south Florida area, I'm not sure. Over the past year, since January 1, there have been 19 horse slaughters. These are pets being stolen out of their barns, walked a few blocks away and being slaughtered in more rural areas. At times, they are being slaughtered right there in their stalls and pastures.
PHILLIPS: Explain to me the cultural aspect here. I know it's a delicacy in France. Are we talking about more French people moving to the area? I have read it is popular within the Asian culture. Is it a growing Asian community?
COUTO: You know, south Florida is a melting pot. We have everyone from certain countries in Europe, Asia, south Central America, some of the islands off the coast of Florida, Cuba, certain areas in the Caribbean that are used to eating horse meat. It is in their culture, part of their everyday lives and country.
PHILLIPS: Correct me if I'm wrong. Isn't there a belief that it actually cures ailments, like makes chemotherapy not as painful? I've even read that some people believe it cures AIDS?
COUTO: It's that -- it's really that third-world mentality, way of thinking. There are people with physical ailments that are eating this meat, whether they think it will cure their blood disorder, help with chemotherapy from cancer or AIDS patients, so on and so forth. There are people eating this meat for medical purposes, yes.
PHILLIPS: Wow. It is heartbreaking to hear how these animals are really being tortured, and for such a sad reason. I want to plug your Web site, helpthehorses.com. Basically, you are saying, anybody with information, jump on your Web site and let them know, right?
COUTO: They can go to our Web site at helpthehorses.com. We have a reward for anyone with information leading to an arrest of these butchers. They can get further information and make a donation on our Web site, correct.
PHILLIPS: Got it. Richard Cuoto. Sure do appreciate your time today.
COUTO: Thank you so much.
PHILLIPS: You bet.
Tired of the same old vacations? We know of one resort offering a very intense experience. The question is, can you survive the survivor package?
(COMMERCIAL BREAK)
PHILLIPS: Well, I can just hear the reservation agent right now. "Would you like a king, queen, or tent?" Forget the swanky upgrade. A ritzy California resort actually hopes to outlast the recession with a special survivor deal. The Rancho Bernardo Inn has created a new meaning to BYOB. B, as in beds. It is slashing prices and whatever other amenities guests think they can do without. $19 will get you a room and a tent. The whole promotion coming about in a staff brainstorming session.
(BEGIN VIDEO CLIP)
JOHN GATES, GENERAL MANAGER, RANCHO BERNARDO INN: It started, kind of easy stuff, towels and sheets and pillows. A little savings. We'd try to discount from there. And then we'd just get more and more carried away. Someone said, what about the air-conditioning and the water? And eventyally, we came down to, let's just take everything out, including the bed.
(END VIDEO CLIP)
PHILLIPS: If a bed non-negotiable, you are in luck. Some other stuff is. The Survivor Package is kind of like an a la carte scenario. If you sleep late, for example, and don't need break fast, that's $199. No breakfast and no air conditioning, $159. No food, AC, no lights, $89. Oh, that sounds like fun. You should book your honeymoon now. And that special starts on Sunday and goes through the end of the month.
And Rick Sanchez standing right here. He is all excited about the good deal.
RICK SANCHEZ, CNN ANCHOR: It's my kind of deal! PHILLIPS: Yeah! His kind of deal.
(COMMERCIAL BREAK)
PHILLIPS: Well, hope you're sitting down for this one. A new study puts a dollar amount on the money we waste on health care every year. The number of zeros might even make you a bit dizzy. Yes, the system is a big part of the problem, and so are we. Maybe some reform begins with us. Here is CNN's Tom Foreman.
(BEGIN VIDEOTAPE)
TOM FOREMAN, CNN CORRESPONDENT: This study by PricewaterhouseCoopers identifies what it calls three key areas of massive waste.
And the first is us. Medical problems related to obesity, such as heart disease and high blood pressure, cost our medical care system $200 billion a year. Problems related to smoking over here cost us $191 billion a year.
If we just took better care of ourselves, this study suggests we could save as much as a half-trillion dollars that our government and we are currently spending on our problems.
The second big area of waste is clinical problems. Doctors and nurses sometimes prescribe the wrong medicine. They overmedicate. They make other mistakes, too. Patients use emergency rooms for some problems like sore throats that ought to be handled by their regular doctors. The cost of all of that, more than $90 billion.
In addition, this study found that, sometimes, doctors overcharge because they can make more money from it, but also that they're sometimes so afraid of malpractice lawsuits, that they order many tests and procedures just to protect against possible accusations that they overlooked something -- the cost of that, $210 billion a year.
That's why senators in support of reform, like Maryland's Ben Cardin, are being confronted in town meetings by people demanding that legal reform be part of any health reform package.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Why isn't tort reform a part of any of these bills?
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
FOREMAN: Of course, this study also found, sometimes, doctors just overcharge, because they can make more money that way.
And, finally, this study found waste in operational costs. Just filing the papers to collect for insurance companies cost up to $210 billion a year. One case the researchers cite is Johns Hopkins in Baltimore. Seven hundred different health plans employers and other groups are involved in paying the bills there, each with its own rules and paperwork.
All of these combined areas could add up to $1.2 trillion in waste, or, as the study notes, more than half of our health spending.
(END VIDEOTAPE)
PHILLIPS: That does it for us. We'll be back here tomorrow. Rick Sanchez picks it up from here.
