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Toyota's Sales Hit the Skids; President Obama Speaks at National Prayer Breakfast; Is the Job Scene Getting Worse?;

Aired February 04, 2010 - 09:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Good morning, everyone. It's 9:00 a.m. in the east, 6:00 a.m. out west, let's get you going.

When is it going to end? If it isn't the gas pedals, it's the breaks. Toyota's prized Prius sales used to be unstoppable. Now it may be the car itself.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is a strange echo of Vietnam, 1969.

(END VIDEO CLIP)

PHILLIPS: So have you ever gotten busted for smoking weed in school? Well, here's a place where you can major in marijuana.

And anger management anyone? An unsatisfied customer drives his point home.

All right, right now. See this? The Prius? It's the next PR nightmare for Toyota. Our Deb Feyerick working the developing story.

And think the job scene couldn't get worse? Our Stephanie Elam has the jobless numbers released just minutes ago.

And saying no to big government and wasteful spending, our Jim Acosta with the tea parties movements' first big show.

When it rains it pours, folks. The Toyota tribulations. If you own one, you almost have to be wondering, what the heck is next? Crisis of confidence clouded by confusion. Now the Prius has a huge problem.

Toyota says that a glitch in the electronic brakes could cause a delay when you step on the pedal. They say it only affects 2010 models sold last year. And it's those very same cars that are being credited with Toyota's cash cow.

New numbers just out say they made $1.7 billion last quarter, but it won't last for long. For the first time, Toyota is admitting it's going to take a huge beating due to this gas pedal nightmare. $2 billion for repairs and lost sales.

But those are just numbers. What about the people who plunked down 30 grand of their hard-earned money for something that they're now afraid to drive?

(BEGIN VIDEO CLIP)

LAURA PAULSON, TOYOTA CUSTOMER: I felt it took off like a rocket, and I immediately hit the brakes hard, and I was laying out, stretched out on the breaks, which had no effect.

They're recalling the -- throttle and the accelerator mechanism but I -- and floor mats, but I don't believe that's the problem.

We feel it's an unsafe vehicle. It's a loaded gun. It can happen anytime. We just don't feel comfortable in it.

(END VIDEO CLIP)

PHILLIPS: Again, eight Toyota models recalled so far for sticky gas pedals. Millions of cars. It's unknown just how many accidents were caused by the pedal problem. Not surprisingly Toyota says they're still safe to drive.

Well, making things worse and adding to the confusion, Transportation Secretary Ray LaHood on Capitol Hill -- he was asked his advice for Toyota drivers.

(BEGIN VIDEO CLIP)

RAY LAHOOD, TRANSPORTATION SECRETARY: My advice is if anybody owns one of these vehicles, stop driving it, take it to a Toyota dealer, because they believe they have a fix for it.

(END VIDEO CLIP)

PHILLIPS: Did he really say that? Stop driving your Toyota right now? Basically telling millions of people to get right to your dealer because Toyota thinks they can fix it?

Well, with some time to ponder the point, would LaHood stand by his statement? No.

(BEGIN VIDEO CLIP)

LAHOOD: What I said in there was obviously a misstatement. I -- what I meant to say, and what I thought I said was, if you own one of these cars or if you're in doubt take it to the dealer, and they're going to fix it. OK? Is that good enough for everybody?

(END VIDEO CLIP)

PHILLIPS: Boy. Well, don't worry. We're not done with this. We're going to keep pushing for answers and try to clear things up for you.

Just minutes from now, we're going to look at the big questions, high stakes, facing the automaker, and a personal story from one woman who shares her grief as well as an attorney who lays out his grievance. At the bottom of the hour, we're going to hear from the former head of the National Highway Traffic Safety Administration.

Are Toyota owners being taken for a ride?

Then next hour, a Toyota owner speaks out. Personal story of surviving harrowing accidents, as well as the anxiety that seems to be growing every day with the story.

It's prayers and politics for President Obama this morning. He and the first lady attending the National Prayer Breakfast. It's an annual tradition for the president and members of Congress.

This year's Heisman trophy winner, Tim Tebow, is in the crowd. President Obama expected to speak any minute. When he's done with the breakfast, it's back to business. He's holding an oval office meeting with Democratic leaders in Congress.

Scott Brown, ready to take his seat. He was elected as the new Massachusetts senator two weeks ago. But he's been on the talk show circuit since then. That all ends in about 30 minutes. The election is supposed to be certified this morning meaning that Brown can be sworn in this afternoon.

Boy, just when you thought the job situation couldn't get any worse, just moments ago, word of an unexpected jump in first-time jobless claims. The Labor Department say new claims for unemployment insurance rose 8,000 to 480,000. That's the fourth increase in just the past five weeks.

And if you think that's bad, it gets even worse. Government info coming out tomorrow may show job losses in this horrible recession were under counted by close to a million jobs.

Stephanie Elam joining us from New York.

So, Stephanie, where is this under counting info coming from?

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Well, as -- it was coming from the government, Kyra. And it's for a lot of people out there, just people on main street, I'm sure they're going, yes, no doubt. We knew this. This was a way worse recession when it came to jobs than a lot of people were saying.

So what's going on here is that they're looking at a period that started in April 2008 going through March of 2009. And the Bureau of Labor Statistics usually does this. They go back and they re-jigger the number a bit to find out what it was so saying that another 824,000 jobs were lost during that period.

That's more than the current estimates and the government's current reading is that during that period we lost 4.8 million jobs. So this revision would actually put us at 5.6 million jobs that would be lost during that period. So the largest revision in some 30 years.

Now the reason why they had to do this is because, as the monthly data was coming out, they're saying some information just was not available. Maybe somebody started a job in the middle of the year, maybe a business went out of business during that period, and that all factors into those statistics.

So now they can take all that information and put it together and do this. Normally when they have to resize a number, it's a small change. But that 12-month period, Kyra, as you remember, was anything but normal. It was huge.

It was when we went to the brink of another depression. So obviously because of that, it was an unusual situation. And that's why you see the number popped up there so much, so that would take us to a new estimate of a loss of about eight million jobs since the recession began which was in December 2007, so obviously a lot more pain out there than we realized we were dealing with during the time.

PHILLIPS: We should talk a little bit more about what we expect from tomorrow's report.

ELAM: Yes, tomorrow is the big jobs report. We'll get the January numbers.

I can tell you that the unemployment rate is expected to stay at 10 percent. However, as far as jobs being lost or added, analysts expect that we should add 13,000 jobs, but I should point out that there's been a lot of discrepancy.

You've got one group saying that we actually should see -- slowing down in job losses. We have another report that says losses accelerated as far as jobs are concerned. So it's kind of all over the place when it comes to this jobs report. But the government will be out tomorrow morning and will actually get to see the numbers and see what things look like for January.

But keep in mind, January of last year, we lost 741,000. So the idea of adding, I will say that would be putting us back into the right directions. Still not enough but still going in the right direction.

PHILLIPS: Got it. I just thought of something. Did I say you were at the New York Stock Exchange or did I say you were in New York?

ELAM: I don't know, but I...

(LAUGHTER)

ELAM: I know it's confusing now. But I'm in New York.

PHILLIPS: Right. Exactly. I just want to make that point again. Because usually it's like that just quote rolls off my tongue. All right, Stephanie, appreciate it. We'll be talking again.

ELAM: Sure.

PHILLIPS: OK. A tough road ahead for Toyota. Is the world's number one carmaker on a collision course with its customers? We're actually going to talk with one attorney who's laying the groundwork for a possible court battle.

ROB MARCIANO, CNN METEOROLOGIST: I'm Rob Marciano in the CNN Severe Weather Center. A doozy of a storm taking shape across the Gulf of Mexico. Heavy rain across the southeast today and that's going to meet some colder air across the mid-Atlantic tomorrow.

Major snowstorm is on the way and weather is coming up.

(COMMERCIAL BREAK)

PHILLIPS: President Obama right now speaking at the National Prayer Breakfast. This has been going on for more than 50 years. And it's basically a networking event in D.C., and it brings the president and members of Congress, foreign diplomats, and thousands of religious types along with military leaders, to just incorporate not only discussions of faith, but obviously faith-based programs and whatever the president deems essential on his agenda.

But, you know, this year, for the -- usually this kind of goes unnoticed but ethics group -- a particular ethics group in Washington is asking that congressional leaders and the president move away from this breakfast due to religious and gay rights groups organizing competing protests --prayer events and also protests.

We've got our eye on that. We haven't seen any live pictures so far from D.C. to Boston to where, apparently, more than a dozen cities are supposed to carry in on these protests. But let's go ahead and let's listen in for a little bit and we'll let you know how we're going to follow the story.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The USNS Comfort, a woman asked Christopher, "Where do you come from? What country? After my operation," she said, "I will pray for that country."

And in Creole, Corpsman Brossard responded, "Etazini." The United States of America.

God's grace and the compassion and decency of the American people is expressed through the men and women like that Corpsmen Brossard. It's expressed through the efforts of our Armed Forces. Through the efforts of our entire government. Through similar efforts from Spain and other countries around the world.

It's also as Secretary Clinton said expressed through multiple faith-based efforts, by evangelicals at World Relief, by the American Jewish World Service, by Hindu temples and mainline Protestants, Catholic Relief Services, African American churches, the United Sikhs.

By Americans of every faith and no faith, uniting around a common purpose, a higher purpose. It's inspiring. This is what we do as Americans in times of trouble. We unite, recognizing that such crisis call on all of us to act, recognizing that there but for the grace of God go I, recognizing that life's most sacred responsibility, one affirmed, as Hillary said, by all of the world's great religions as to sacrifice something of ourselves for a person in need.

Sadly, though, that spirit is too often absent when tackling the long term, but no less profound issues facing our country and the world. Too often, that spirit is missing without the spectacular tragedy -- the 9/11 or the Katrina, the earthquake or the tsunami -- that can shake us out of complacency.

We become numb to the day-to-day crisis. The slow-moving tragedies of children without food and men without shelter, and families without health care, we become absorbed with our abstract arguments, our ideological disputes, our contests for power. And in this Tower of Babel, we lose the sound of God's voice.

And for those of us here in Washington, let's acknowledge that democracy has always been messy -- let's not be overly nostalgic. Divisions are hardly new in this country, arguments about the proper role of government, the relationship between liberty and equality, our obligations to our fellow citizens -- these things have been with us since our founding.

And I am profoundly mindful that a loyal opposition, a vigorous back and forth, a skepticism of power all of that is what makes our democracy work. And we've seen nationally some improvement in some circumstances. We haven't seen any canings on the floor of the Senate any time recently.

(LAUGHTER)

OBAMA: So we shouldn't over romanticize the past, but there is a sense that something is different now. That something is broken. But those of us in Washington are not serving the people as well as we should.

At times it seems like we are unable to listen to one another. To have at once a serious and civil debate. And this erosion of civility in the public square shows division and distrust among our citizens that poisons the well of public opinion, and leaves each side little room to negotiate with the other.

And makes politics an all-or-nothing sport where one side is either always right or always wrong when in reality neither side has a monopoly on truth.

And then we lose sight of the children without food and the men without shelter and the families without health care.

Empowered by faith, consistently, prayerfully, we need to find our way back to civility. That begins with stepping out of our comfort zones in an effort to bridge divisions.

We see that in many conservative pastors that are helping to lead the way to fix our broken immigration system. It's not what would be expected of them and yet they recognize in those immigrant families the face of God. We see that in the evangelical leaders rallying their congratulations to protect our planet. We see it in the increasing recognition of progressives that government can't solve all of our problems. And I'm not talking about values like responsible fatherhood and healthy marriage are integral to any anti-poverty agenda.

But stretching out of our dogmas, prescribed roles along the political spectrum. That can help us regain a sense of civility.

Civility also requires relearning how to disagree without being disagreeable. Understanding, as president said, that civility is not a sign of weakness.

Now I am the first to confess I'm not always right, Michelle will testify to that.

(LAUGHTER)

OBAMA: But surely you can question my policies without questioning my faith -- or for that matter, my citizenship.

(LAUGHTER)

(APPLAUSE)

OBAMA: Challenging each other's ideas can renew our democracy, but when we challenge each other's motives, it becomes harder to see what we hold in common.

We forget that we share at some deep level the same dreams, even when we don't share the same plans on how to fulfill it.

We may disagree about the best way to reform our health care system, but surely we can agree that no one ought to go broke when they get sick in the richest nation on earth.

We can take different approaches to ending inequality, but surely we can agree on the need to lift our children out of ignorance, to lift our neighbors from poverty.

We may disagree about gay marriage, but surely we can agree that it is unconscionable to target gays and lesbians for who they are, or whether it's here in the United States or, as Hillary mentioned more extremely in odious laws that are being proposed most recently in Uganda.

Clearly we can agree to find common ground when possible, parting ways when necessary. But in doing so, let us be guided by our faith. And by prayer.

For while prayer can buck us up when we are down, keep us calm in a storm, while prayer can stiffen our spines to surmount an obstacle, I assure you I'm praying a lot these days.

A prayer can also do something else. It can touch our hearts with humility. It can fill us with a spirit of brotherhood. It can remind us that each of us are children of an awesome and loving God.

Through faith but not through faith alone we can unite people to serve the common good. That's why my office of faith-based and neighborhood partnerships have been working so hard since I announced it here last year.

We slashed red tape and built effective partnerships on a range of uses, from promoting fatherhood here at home to spearheading inter- faith cooperation abroad.

Through that office we turned the faith-based initiative around to find a common ground among people of all beliefs, allowing them to make an impact in a way that's civil and respectful of difference and focus on what matters most.

It is the spirit of civility that we are called to take up when we leave here today. That's what I'm praying for.

I know in difficult times like this, when people are frustrated, and pundits start shouting and politicians start calling each other's names, it can seem like a return to civility is not possible. The very idea is a relic of some bygone air.

The word itself seems quaint. Civility. But let us remember those who came before us. Those who believed in the brotherhood of man even when such a faith was tested.

Remember Dr. Martin Luther King, not long after an explosion ripped through his front porch, and his wife and infant daughter inside, he rose to that pulpit in Montgomery and said, love is the only force capable of transforming an enemy into a friend. In the eyes of those who denied his humanity, he saw the face of God.

Remember Abraham Lincoln on the eve of the civil war. The states are ceding and forces gathering with a nation divided half slave and half free, he rose to deliver his first inaugural and said we are not enemies, but friends.

Though passion may have strained it must not break our bonds of affection. Even in the eyes of the confederate soldiers, he saw the face of God.

Remember William Wilbeforce whose Christian faith led him to seek slavery's abolition in Britain. He was vilified, derided, attacked. But he called for lessening prejudices and conciliating goodwill. And thereby making way for the less obstructive progress of truth. In the eyes of those who sought to silence a nation's conscious, he saw the face of God.

Yes, there are crimes of conscious that call us to action. Yes, there are causes that move our hearts and offenses that steer our souls, but progress doesn't come when we demonize opponents. It not born in righteous spite.

Progress comes when we open our hearts, when we extend our hands, when we recognize our common humanity. Progress comes when we look into the eyes of another and see the face of God.

That we might do so that we will do so, all the time, not just some of the time, is my pilgrim prayer for our nation and the world.

Thank you. God bless you. And God bless the United States of America.

(APPLAUSE)

PHILLIPS: President of the United States at the National Prayer Breakfast there in Washington, D.C. drawing a bit of controversy. It's focused on the sponsor of the this breakfast, an evangelical Christian network, called The Fellowship, also known as The Family, and these accusations that it has ties to :Legislation Uganda that calls for the imprisonment and execution of homosexuals.

There were reports that possibly more than a dozen cities would be hosting protests and also prayer events by competing religious and gay rights group. We're following that. So far we haven't been able to find any live pictures.

In the meantime, the president focusing on the power of prayer being empowered by faith, as thousands of religious, business, military leaders gather for breakfast there with him and there he goes.

A shot of Tim Tebow. Heisman trophy winner. My guess is, he's probably one of the guests of honors there at the main table because as you know, he's a very out spoken Christian. He's the football player that wears the various bible very boldly on his cheek when he plays ball.

We're going to take a quick break. More from CNN NEWSROOM straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: All right, stocks fell yesterday, halting a two-day rally, and Wednesday's weakness expected to continue today, unfortunately.

Alison Kosik in New York with a look at what's worrying investors as we wait -- or I guess we just got the opening bell, right? Do we hear it?

ALISON KOSIK, CNN CORRESPONDENT: The opening bell is on the -- right before the opening bell. Stock futures pointing about 80 points lower. That's because of what was happening the overseas market.

They tumbled, at least the European market. And then we got the weekly jobs report. That came out and pretty much solidify that we're going to start in the red at the open. And here is what that report said.

Listen to this, 487,000 Americans joined the unemployment line last week, and that's the fourth increase in five weeks. Wal-Mart, it's the latest company to cut jobs. The retailer is flashing 300 administrative positives at its Arkansas headquarters. This all comes just one day before the government releases its big monthly jobs report. Some analysts are expecting the report to show. Businesses did some hiring in January, but as we heard from Stephanie earlier in the hour, there is also going to be a huge downward revision to previous job numbers.

The government may have actually underestimated job losses between April 2008 and March 2009 by about 1 million. Let's look on the right side a bit for today. Upbeat earnings from Cisco systems could lift the tech sector today. The company reported quarterly profit and revenue that rose for the first time in more than a year. It's a sign that businesses are spending more on technology. Cisco is considered a bellwether indicator of what to expect from other tech companies, and that's why we look so closely at Cisco.

Right now, Cisco shares are up almost 2 percent, and we have to encouraging sales numbers from retail stores, but overall right now, we are starting lower. Take a look the Dow and just real found about 72 points, the NASDAQ up about 17. Happy Thursday. We'll see how the markets do all day -- Kyra

PHILLIPS: All right. Thanks, Alison.

Another day and another hit for the world's largest automaker. Earlier today, Toyota expanded its recall to include its flagship model, the Prius Hybrid. The recall came after Japan's transport ministry ordered the company to investigate complaints of break problems.

Meanwhile, safety experts in the U.S. say they are investigating a growing number of complaints that there may be problems with the vehicle's electronics. Toyota owners are worried and frustrated. They're demanding answers. Chief among them, what did the car maker know and when did it know it? Toyota executives may have to answer those questions under oath.

CNN's Deb Feyerick explains.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Driving this road in Flint Michigan. Lilia Alberto is haunted by her mother's last moments. The fear of the 76 year old woman must have felt desperately trying to control her 2005 Toyota Camry as it barreled down a quiet street at 80 miles per hour.

LILIA ALBERTO, DAUGHTER OF CRASH VICTIM: And the car went airborne and it was going 80 miles per hour and hit the tree on the top and it just went down. She died instantly.

FEYERICK: Guadelope Alberto, by all accounts was an extremely careful driver in good health.

ALBERTO: That was the first thing that I knew that something had to be wrong because my mother would never cross a street, because of the two-way traffic.

FEYERICK: Witnesses say the car seemed to speed out of control. Nobody knows why. But it fits the pattern of thousands of incidents of unintended acceleration involving Toyota vehicles. After recent state of high profile accidents, Toyota recalled millions of cars, not including the model driven by Guadelope Alberto. They blamed the floor mats and sticky gas pedals. Yet a growing number of automotive experts and class action lawyers like Richard McCune say that explanation just doesn't fit.

RICHARD MCCUNE, CLASS ACTION ATTORNEY: What I hear over and over and over again, I'm driving down the road and my car just takes off on me. I apply the brakes, sometimes it works and sometimes it doesn't. That's the pattern that we have seen.

FEYERICK (on camera): So unequivocally, that these recalls simply do not get to the core of the problems that Toyota has.

(voice-over): Safety analysts, Sean Kane did more than 2000 in acceleration incidents involving Toyota and believes the root of the problem lies in the electronic throttle system which controls the speed of the car.

SEAN KANE, SAFETY RESEARCH AND STRATEGIES: These are computer- guided systems, and we all know that electronics fail, they do fail and they will fail. And the problem with Toyota, is they have not built enough fail safe devices into the cars to ensure that the drivers get control of the vehicle when a failure happens.

FEYERICK: During a press conference in Japan this week a Toyota executive ruled out any software or electronic issue with the accelerator.

SHINICHI SASAKI, TOYOTA EXECUTIVE VICE PRESIDENT (translator): For the electronic control unit we cannot could not come across any case where we found that there was a misfunction in this control system.

FEYERICK: McCune says Toyota's recalls are disturbing in their limitations because they don't apply to all makes and models that have allegedly experienced the acceleration problem '05 Camry Guadelope Alberto was driving.

(on camera): Based on your evidence, you're suggesting that there are cars on the road that right now should be recalled?

MCCUNE: I think that the recalls cover less than half of the models and model years that need to be part of this recall.

FEYERICK (voice-over): Toyota says it basis its recalls on defects that have been identified and not solely on reports of unintended acceleration. Late Wednesday McCune filed a motion for a preliminary injunction demanding that Toyota recall all vehicle models allegedly affected. And also install a brake override system that would stop a car that's accelerating out of control. MCCUNE: While everybody tries to figure this out including Toyota, I presume, we need a system so the sudden accelerations do not become deadly accidents. And that's what the break override system does.

FEYERICK: A system that possibly could have saved the life of Guadalupe Alberto.

LILIA ALBERTO, DAUGHTER OF CRASH VICTIM: Once in a while, I come by this just to say a prayer, or just to come and look and remember the place where she died. But, it's very painful. It's still very vivid in my mind and my heart.

(END VIDEOTAPE)

FEYERICK: Toyota says that all new cars made next year will be programmed with the break override safety system. In fact, in November during that format recall, Toyota actually said it would install the break override system in what amounts to millions of Camrys, Avalons, and Lexus models. Toyota did not call it a safety measure. They said it was an extra measure of confidence for drivers -- Kyra.

PHILLIPS: A lot of cars have these data recorders similar to a black box on airplanes, right? so should not have those recorders have information to explain why this engine surge is happening?

FEYERICK: Absolutely. You would think so. We asked Toyota that very question, and the spokesman said the data recorders on their vehicles are not programmed specifically to detect unwanted acceleration. Even though, they know it's a problem, they are programmed only to record the last five to six seconds before the airbag is deployed, and one we interviewed believes that their program that way deliberately, especially since he said it could provide the car giant a lot of valuable information to find out why the sudden acceleration is occurring -- Kyra.

PHILLIPS: All right. Deb Feyerick. Thank you so much. We appreciate it.

We may just be seen the tip of the iceberg, not just for Toyota, but for the government as well.

Joan Claybrook is a former administrator with the National Highway Traffic Safety Administration, now president emeritus for public citizen and nonprofit consumer advocacy group.

And we're just getting word Joan. This just came across the wires, and apparently, the transportation department is now opening an investigation into break problems for the 2010 model of Toyota's Prius. Japanese automaker came forward and acknowledged some design problems with the breaks in this very popular Hybrid that has been out on the market. Now, it's opened up an additional investigation.

So, help me out here. Try and bring us some piece of mind, especially if we own a Toyota. We really don't know who to trust and what to believe at this moment. I mean, Toyota has known about this problem for a number of years, right?

JOAN CLAYBROOK, PRESIDENT EMERITUS, PUBLIC CITIZEN: Correct. They have known about it probably since 2004, at least, because that's when they were first sued, and when they are sued, they pay a lot of attention to that, and so I am very disappointed in Toyota for delaying, persuading the Department of Transportation to close the investigations that it opened when consumer complaints came in 2005, 2006, 2008, and delaying up to this point where now we have huge numbers of vehicles involved and enormous costs and people are really scared to death.

PHILLIPS: So, if they knew about it for as far back as 2004, then the government had to know about it, right? Where was the government in its investigations and trying to do something for the public?

CLAYBROOK: Well, I am not sure the government knew in 2004, but they probably did right about then or 2005, and the government was negligent in my view. They took some of a brief look, a casual look at these issues. They opened six investigations and closed them at Toyota's request.

They kept a lot of information secret, and I think that it's refreshing that we have in the new administration, Rey LaHood and new NHTSA administrator who are being very tough on the company and other companies as well, and pushing them to do a recall, but this is a case of a severe problem. If you have a breaking loss, sudden acceleration, or rollover, this on fire, those are the kinds of cases that the agency should jump on immediately and try and resolve as rapidly as possible, and instead they just let Toyota get away with delaying and giving lousy excuses like people put their foot on the accelerator instead of the break.

Even in November or October, when the Toyota submitted its papers on doing the November recall for the floor mat and also this break override, which I believe shows it's an electronic issue, they said it wasn't a safety related defect, but they were going to comply with the rules that it has.

PHILLIPS: So, you know, you were the former administrator of NHTSA and -- so what is happening here? Why wouldn't the job had been -- why wasn't the job done properly on behalf? I mean, we might understand the PR nightmare for Toyota, but it seems like the government truly failed us? I mean, is this about money? Is this about the economy? Is this about saving face? I mean, why wouldn't the public -- why wasn't the public more protected when this first became a serious problem?

CLAYBROOK: Well, you know, it's a very curious because when the Firestone Ford Explorer debacle occurred in 2000, the government was reprimanded by the Congress. They got more money, more staff, and more power, and yet they fell back into sort of an old bureaucratic habit of not really paying attention to the issues or doing so as an everyday routine, and not as a serious issue. They have subpoena power. They can get information, demand information or put people in jail if they don't get it from the company, from the suppliers, from the dealers.

They can hire consultants and other experts, whoever they want. They can put out consumer alerts and ask the public to let them know if they have this problem. They have enormous authority and yet they just did not do the job. And I think it's -- they were not the cop on the corporate beat, and I think it had to do with the philosophy of the Bush administration at least in part where they did not issue safety standards, and they didn't do much enforcement.

PHILLIPS: The public was definitely failed, and I got to ask you this before we go. You mentioned the Secretary of Transportation, Ray LaHood. Look, he didn't have too spectacular of a day yesterday. He comes out and says to the nation, don't drive your Toyota, and then oops a couple hours later, I didn't really mean that, you can drive your Toyota. Look, you were the head of NHTSA, you've been involved with these investigations. Should we drive our Toyota or not?

CLAYBROOK: I think the people should drive their car. They have to drive their car, but if they have any concern about it as the Secretary said very appropriately, they should take them to the dealer. The dealers are getting parts now, and they can, if anyone is really concerned that their car maybe dangerous, they can take it in there. All of these cars have to be fixed. It's going to take months for that to happen.

If anyone experienced any hint that they have a problem with the accelerator or with the breaking, they should take them in immediately. If they have not, they should be aware of the problem, the potential for the problem, and if it occurs, put it in neutral immediately, so that the vehicle cannot-- this is with the acceleration, so the vehicle engine doesn't race, and then bring the car to a stop and get it to a dealer -- call the dealer and have it towed to the dealer.

PHILLIPS: Joan Claybrook, we really appreciate your insight. Timing worked out perfectly as we got this breaking news about the investigation now into the Prius. Our Willy --

CLAYBROOK: I am glad they opened that one right away. At least they're Johnny on the spot right now under the new administration.

PHILLIPS: There is a little bit of good news there.

CLAYBROOK: That's right.

PHILLIPS: Thanks, Joan. We really appreciate it.

CLAYBROOK: Okay.

PHILLIPS: And next hour, a Toyota owner speaks out. A personal story of surviving harrowing accidents as well as the anxiety that seems to be growing every day. We're back in a moment.

(COMMERCIAL BREAK)

PHILLIPS: Top stories now. Florida living up to its reputation of being the shark bite capital of the world. This time, it's a kite surfer attacked by sharks off Stuart, Florida. A lifeguard to save this guy, Steven Howard Chayver (ph), but he was already in cardiac arrest. Friends say that he died at the hospital.

(BEGIN VIDEO CLIP)

TEAGUE TAYLOR, VICTIM'S FRIEND: I just can't picture, you know, anybody, let alone a friend being circled by sharks here in Stuart, Florida, doing something that he loves to do, doing something he's done most of his life.

(END VIDEO CLIP)

PHILLIPS: President Obama's aunt fighting to stay in the U.S. right now. A Kenyan native, Zeituni Onyango is in a Boston courtroom this hour. She's making her case before an immigration judge for a second time. She was ordered deported six years ago but never left.

President Obama said he didn't know his aunt was living in the U.S. illegally -- and guess what -- she won't be getting any favors from her nephew. The president says the law is the law.

We're still waiting for Michael Jackson's doctor to turn himself in; prosecutors plan to charge Conrad Murray with involuntary manslaughter. Murray admitted to giving Jackson a powerful sedative just hours before he died.

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PHILLIPS: Secretary of State, Hillary Clinton, playing hardball -- imagine that -- that doesn't surprise us. She's playing hardball with Iran concerning those three U.S. hikers that are held there. They have been detained for more than six months. Clinton shot down a proposal from Iran's president to swap them for Iranians held in the U.S. Here is why.

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HILLARY CLINTON, U.S. SECRETARY OF STATE: As we have said repeatedly, we call on Iran to release all the American citizens that they have currently detained. We believe they are being unjustly detained and they should be released without further delay. We also are very committed to, you know, making it clear to the Iranians that they should do so on humanitarian grounds, since the detentions of our citizens is baseless.

So there are no negotiations taking place.

(END VIDEO CLIP)

PHILLIPS: The families of the three Americans say they accidentally strayed across an unmarked border in Tehran. They are being held on espionage charges.

The mid-Atlantic states bracing for a storm; Rob Marciano tracking that for us in the Severe Weather Center. Hey, Rob. ROB MARCIANO, AMS METEOROLOGIST: Good morning Kyra, we're looking at the storm that has been developing over the past 12 hours and really gathering strength right now. It's pretty big and will get even bigger as we go through time.

The first onslaught of it is -- we're expecting the upper Texas coastline getting into Louisiana and then will be riding up towards the Atlantic area and then in through the mid-Atlantic with a lot of heavy rain.

This is tapping a lot of moisture in the Gulf of Mexico and with that a moisture shield or rain shield that stretches all the way from the Mexican border and then stretching into the Piedmont there. And this is pretty thick stuff as far as top to bottom moisture in the atmosphere.

So it's got a lot of water that has the potential to rain down and create some flooding issues. And you can see there's not a whole lot of breaks in the action as far as what the radar is showing here.

And through New Orleans, we're looking at some heavy rain especially as you go up the I-59 corridor and this is all going to be stretching north and eastward. It's hitting at a some dry air but eventually the rains will be coming down in the Atlanta area heavy and heavy at times and I suspect that the Atlanta Hartsfield will get some delays as we go through time.

A live shot of D.C. -- check out this picture, pretty tranquil and beautiful. Still some snow on the edges of the grass there but the snow will be piling up by around this time tomorrow with that sunshine going away relatively rapidly.

Winter storm warnings are posted for the Washington D.C. area. You're reading this right, my friends; 10 to 20 inches of snowfall expected in the D.C., Baltimore and Philadelphia area. Locally we could see some higher amounts and that doesn't include some of the sleet that will be falling as this thing mixes in just a little bit.

All right, let's go over this storm, it looks very similar to what came through about a month and change ago during the month of December. A lot of deep moisture and low pressure that's taking the same kind of path and intensifying as it does so running into cold air to the north.

So the rain snow line generally speaking is going to be right around D.C. and then northward. And where it snows is where it will come down heavy at times.

On a lighter note, Kyra, big game happening on Sunday.

PHILLIPS: Really, let's see what could that be?

MARCIANO: Here's your five day forecast for Miami, yes, they could, it's not the grand daddy of them all. I don't know what -- what the nickname is. They don't call it the big dance, it's a big game now. PHILLIPS: Is there something going on with the NCAA?

MARCIANO: Yes there is.

PHILLIPS: I didn't know that.

MARCIANO: It should be beautiful football weather, 66 degrees after some rainfall...

PHILLIPS: Rose Bowl, that's what it is.

MARCIANO: Yes, the Super Bowl. I know, well, I kind of threw you because there's no real Super Bowl graphic here. This is just your generic Miami forecast.

PHILLIPS: That's all right.

MARCIANO: We're a little bit busy here.

PHILLIPS: Hey, I'm just excited about the New Orleans Saints. What can I tell you?

MARCIANO: Yes.

PHILLIPS: First time ever. Yes, I'm hearing a couple of who dat's out there in the crowds.

MARCIANO: We've got a lot of who daddies here in Atlanta for sure.

PHILLIPS: Yes, my Indianapolis Colts friends are going to be very upset with me but you've got to go for the guys that you know never made it. You know what I'm saying?

MARCIANO: Well, you know, yes, I'm going for the Colts but God bless them both.

PHILLIPS: Ok, that was nice and diplomatic. All right, this tease right here is just for you, Rob.

MARCIANO: All right.

PHILLIPS: Ok, I don't know she looks good, but there's just something so fake about her and cold. She didn't say a word to police when they questioned her either.

MARCIANO: My kind of woman.

PHILLIPS: Oh, you're so bad.

All right and speaking of ladies, you know, you probably know these pretty well, I'm sure Rob does too. As a matter of fact we all grew up with them. I know I did. I'm not sure if Rob was playing with Barbie.

But ok, Snow White. Yes, she and her band of dwarfs debuted on this day in 1938. But can you name the seven dwarfs? I've got to tell you my writer Jill Farah (ph) gave me a quick pop quiz. I got Sleepy, Dopey and Grumpy maybe because I feel all three of those sometimes. But can you name the others? All right, Sneezy, Doc, Happy and Bashful. And who doesn't love Bashful, come on.

All right, just so you know, the original Snow White never named the dwarfs. They were named when Disney made the cartoon version.

And hey, that iconic beauty that's been the companion of so many little girls, Barbie. She has the zero-sized waist with no hint of aging lines or gray hairs, can you believe it. Barbie turns 50 today. Somewhere out there Ken is still looking for a new sweetheart, though.

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PHILLIPS: So you golf? Do you have trouble keeping your head down? Might be easier if an ex-porn star is staring back at you. Oh, yes, a guy in Canada has come up with a set of golf balls that I guess you could say is a little different. The Tale of the Tiger Mistress Collection is what it's called.

Yes, pics of Tiger's alleged ladies right there on the balls; makes a mulligan a much hotter proposition, doesn't it?

But hold on, one of the alleged dalliance dozen was upset enough to call Gloria Allred and threaten a lawsuit.

(BEGIN VIDEO CLIP)

VERONICA DANIELS, WOODS' ALLEGED MISTRESS: As a victim of violence myself, it bothered me to think that someone would be standing with a dangerous club in their hands and hitting a ball with my face on it.

(END VIDEO CLIP)

PHILLIPS: Ok. There you have it.

Well, you can't really ticket a mannequin for impersonating a passenger, but if you could, this Long Island dummy is in some pretty big trouble. Police say a real woman plopped it in the passenger seat so she could drive in the high occupancy lane.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I said you've got to be kidding. An absolute mannequin that looked pretty good.

(END VIDEO CLIP)

PHILLIPS: She does look pretty good. She's pleading the fifth, apparently. So what gave her away? The sunglasses. It was a very cloudy day.

Here's some good recession news. We found a place where you can actually get a free meal, the Heart Stopper Sports Grill in Delray Beach, Florida. Yes, you eat free if you weigh more than 350 pounds, so get busy. This place serves food that's pretty bad for you and celebrates it.

You've got to have a super computer to count the calories. They have a defibrillator on site, a dialysis machine, they serve chili cheese fries in a bedpan and basically have the whole hospital theme going on. You might want to have your cardiologist on speed dial before you go folks.

We have a lot of stuff going on today. Let's check in with our correspondents who are working several stories for us right now. Poppy Harlow, you've got the story of the day when it comes to teasing.

POPPY HARLOW, CNN CORRESPONDENT: That is true, that is true. You know what, Kyra, it's just like Michigan cannot get a break when it comes to the auto industry, the deteriorating economy there. But you know what? Reefer, that's right, pot might be the quick fix Detroit needs. We're going to tell you more at the top of the hour.

MARCIANO: And it might help you be hungry for chili fries served in a bedpan. Hi, everybody, I'm Rob Marciano at the CNN Severe Weather Center. We have a storm that's going to make a pretty good mess as well across parts of the mid-Atlantic. That's all coming up in the next hour.

PHILLIPS: And to make it clear, Rob is not smoking pot over there in the Severe Weather Center. That's another story.

Also ahead -- ok, a new law, bad consequences. An inmate released from prison just days ago under an early release program. Well, he's back behind bars, accused of attempted rape.

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