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Economic Recovery; Baldness: A Growth Industry; Athletes Versus Academics

Aired April 14, 2010 - 14:00   ET

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

ALI VELSHI, CNN ANCHOR: I'm talking with one of the president's money men. Austan Goolsbee is an economics professor at the University of Chicago. He's taken time off to serve on the White House's Council of Economic Advisers.

We've been talking about an overhaul of financial regulations. Regulations, Austan, that go back decades. It's kind of like a highway system that was built for cars that drive 25 miles an hour, and now cars go 80 miles an hour, so it needs an update. AUSTAN GOOLSBEE, COUNCIL OF ECONOMIC ADVISERS: I think it's a great analogy.

VELSHI: We're trying to get that done. But let me talk about a couple of other things. The president this morning came out and said the economy is recovering. Ben Bernanke said yesterday it's recovering, but jobs are going to lag. To get back to where we were before this recession, 5 percent unemployment roughly versus 10 percent roughly.

Let's talk about this. My viewers probably need three things to happen to make them feel prosperous. They need the value of their house to stabilize and go up, they need the value of their investments to go up, which has been happening the last year, but ultimately they need their income to be stable or go up.

Council of Economic Advisers, of which you are a part, has now come out and said that the stimulus bill, the Recovery Act, has saved or created or somehow responsible for between 2.2 and 2.8 million jobs, basically, since it came out a year ago. And you're slated to hit 3.5 million by the end of the year.

Tell me a little bit about how you arrive at that sort of number.

GOOLSBEE: Well, I'll refer anybody to the report. As you say, it came out today, and it comes out every quarter, where we gather all the best evidence that we can. But the basic idea is there would be 2.5 million less jobs than there are now had we not done this.

One style of evidence is to just go look at what private forecasters were saying and are saying now, what the Congressional Budget Office is saying now. They're all very much in the same range of what the impact of the stimulus was.

And I ask everybody who's interested in this, just roll the clock back to a year ago and remember that it was a widespread consensus in the spring of last year that we would not have any positive growth in all of 2009 of GDP. And obviously, you need some GDP growth before you can even hope to see any job growth.

We ended up having six months of growth rather than none, and that was the first beginning of evidence that the stimulus was having a positive impact, is that we were doing better than was forecast. Now, that's never going to correct when you're in the deepest hole since 1929. It's not going to fill the entire hole, nor should the government be doing 100 percent of the filling. But I think it's important that we stand up the private sector because, ultimately, the private sector's growth is going to be where the sustainable jobs come from.

VELSHI: Well, let me ask you this. A lot of people have enjoyed the low mortgage rates they've been getting the last year, 4.5 percent, up to a little over 5 percent, and that has been the government, or at least been the Federal Reserve that's been putting money in Fannie Mae and Freddie Mac. They announced a long time ago that that was going to stop in the spring.

It has stopped at the end of March, and guess what? Mortgage rates went up, 5.25 percent, 5.33 percent.

How far do you think they're going to go, and what effect is that going to on the recovery of the housing market?

GOOLSBEE: Well, you know, I would disagree a little bit to say that the Fed deciding to get out of buying those securities drove rates up by very much. Most people I talk to in the markets believe that since it was announced so far in advance, markets had already taken that into account.

There are going to be fluctuations in interest rates of a quarter of a point, a third of a point, here and there as we go along. And we're coming out of a period with really unprecedented low rates. There have never been rates this low.

I think as you look at the situation, the housing market, you've got to say that at least we appear to have reached some stabilized point where prices fell, you know, 10 percent, 15 percent, in some markets a great deal more than that, but in most of the housing data for most of the markets in the country, they stabilized and, in some cases, even gone back up a small amount. And I think you've got to think that that's pretty important.

VELSHI: Austan, good to talk to you, as always. Thanks for being with us.

GOOLSBEE: Great to see you again, Ali.

VELSHI: All right. Austan Goolsbee, Council of Economic Advisers, and economist, joining us from the White House.

It's just after 2:00 p.m. on the East Coast. Here's what we've got "On the Rundown." Space is not as far away as you think. I guarantee you, the business of space is very much in your state, maybe your community. We're going to explore the future of the space program and how you might be affected by it.

Plus, how often do you shop on the Internet? You might be doing it right now. Well, guess what? Some states want a piece of that action -- you know what I'm talking about -- taxes.

By the way, I happen to think bald is beautiful. No surprise there. But there is something surprising in the development of hair growth research, and it involves something that I suspect I might be missing, a gene.

All right, the future of the space program here in America is up for grabs. We've been talking about this for months.

As of next year, NASA will no longer be using the iconic space shuttle to get people into space. I think there are three space shuttles left. That's it.

It's all because of this -- the 2011 budget sent down by President Obama. The president is actually heading down to the Kennedy Space Center in Florida tomorrow to outline his vision for NASA. We're going to be covering that.

He's giving the agency $19 billion to work with. That's up from $13 billion in 2010, but there's no money in the budget for the space shuttle program.

Over the next five years, $100 billion will be used, mostly for deep space exploration and scientific development. And this is why -- the huge cost of sending astronauts into space.

Right now it costs $65 million per astronaut, per mission. Per astronaut for one mission, $65 million. Russia charges $50 million per astronaut. And according to the president of SpaceX, which is a private space flight company, he says he can do it for $20 million an astronaut.

Just this morning, astronaut Tracy Dyson spoke from space -- they had a press conference -- in support of using the Russian Soyuz space vehicle to get back and forth.

Listen.

(BEGIN VIDEO CLIP)

TRACY DYSON, ASTRONAUT: We have quite a bit of confidence in the Soyuz that brought us here. And there is enough room in each Soyuz to bring us home in case of an emergency.

So, I think the one thing that we'll miss the most about the shuttle is, of course, the magnificent vehicle that it is. But the payload power that it has to bring up necessary supplies and spares -- and that will be one of the most crucial things that we'll miss with having only Soyuz vehicles attached.

(END VIDEO CLIP)

VELSHI: Now, former astronaut Neil Armstrong and several others released a statement smacking down the president's plan. Listen to what he said. It's long. I'll read it for you.

He says, "While the president's plan envisages humans traveling away from Earth and perhaps towards Mars at some time in the future, the lack of developed rockets and spacecraft will assure that ability will not be available for many years. Without the skill and experience that actual spacecraft operation provides, the USA is far too likely to be on a long downhill slide to mediocrity. America must decide if it wishes to be a leader in space. If it does, we should institute a program which will give us the very best chance of achieving that goal."

Now, another option would be allowing those private companies that can do it for so much less to act as taxis for NASA, which is what the 2011 budget calls for. One of the people who could benefit from the privatization of space travel is Leroy Chiao. I spoke to him a little while ago. He's a former astronaut and he's the current vice president of Excalibur Almaz, which is a private manned space flight company.

I asked him what we stand to gain or lose by letting private enterprise compete in the game of transporting people to and from space. Here's what he told me.

(BEGIN VIDEO CLIP)

LEROY CHIAO, FMR. ASTRONAUT: Going forward, you know, I think it really is time to give the commercial guys a chance, because going into low-earth orbit, like I said, the technology has matured. So NASA's job really should be to focus on pushing outside of low-earth orbit, of either going to explore near-earth asteroids, going back to moon to test architecture and modules and hardware operations for an eventual visit to Mars.

So, NASA really should be thinking farther, pushing technology with new rocket engines such as electric propulsion, ion propulsion, things like that. We should be developing new-generation spacesuits, rovers, habitats, things like that, looking to go beyond low-earth orbit, kind of a taxi service, as you will, to the space station.

(END VIDEO CLIP)

VELSHI: If the space program is cut down, that could lead to thousands of jobs lost in a climate that's already hit hard by massive job losses.

Let's take a look at where the main space centers are located in the United States -- Kennedy Space Center in Cape Canaveral, Florida; Marshall Flight Center in Huntsville, Alabama; and Johnson Space Center in Houston, Texas. These are the main ones. NASA employs thousands in these cities and many other cities across the country. I want to show you a map. It shows -- these are dollar values of NASA investment in every state. Every single state has investment through the hiring of contractors, the purchasing of goods and services.

The states that make the most, California, about $3.25 billion; Texas, about $3.75 billion. Each of these are, of course, big states with big industry, which is perhaps why they get so much of it.

The contracting industry stands to lose a lot of money as well. Some 7,000 to 9,000 contract jobs could be lost when the shuttle and constellation programs end.

In the Cocoa Beach, Florida, area alone, an estimated 20,000 jobs could be impacted by NASA cuts. That has the mayor of Cocoa Beach, Skip Beeler, very concerned about his city and surrounding communities. Not only will his city lose jobs, it stands to lose a good deal of visitor revenue.

(BEGIN VIDEO CLIP)

MAYOR SKIP BEELER, COCOA BEACH, FLORIDA: It will affect tourism, because we get a phenomenal number of people here for shuttle launches and landings, and people coming to the Kennedy Space Center. Our fear is once that goes away, those people just aren't going to be coming back. And we have the beach. That's the part of Cocoa Beach.

We're always going to have that, but, you know, a big part, a good part of our local tourism is the Kennedy Space Center Visitor Center and the people who come to see the launches. And we could easily lose a good chunk there.

(END VIDEO CLIP)

VELSHI: One of the reasons we talk about this a lot on this show, but one of the reasons we're talking about it at such length today is tomorrow the president goes to the Kennedy Space Center to outline his plans for the space program. We'll be bringing you a lot more on that over the next 24 hours.

Another story I want to tell you about. Deep inside our DNA scientists have found a gene that may just beat baldness. The lead researcher, right there, joins us in a minute.

(COMMERCIAL BREAK)

VELSHI: OK. Full disclosure, I am entirely happy with this head that I have. I am not looking for some kind of inside track on how to grow hair. But we've been talking about identifying a gene that could play a big role in understanding baldness, so on this topic, I'm all ears.

OK, that didn't go over that well.

Seriously, this is actually pretty much how I've looked since I was 10 years old. But what if it had gone differently. What if we had actually solved this problem and that might have been how I looked if we had identified exactly what causes baldness? There might actually be something in that and I could have been that guy.

All right. I'm going to get Dr. Angela Christiano in here. She is the lead author of this exciting study that we've been talking about. We've sort of been talking about it tongue-in-cheek, but it's actually a very, very serious study.

She joins me now. She's a professor of dermatology and genetics and development at the Columbia University Medical Center. Joins me now.

Thank you for joining us on this. Tell me about why you're even researching this.

PROF. ANGELA CHRISTIANO, DERMATOLOGY & GENETICS, COLUMBIA UNIVERSITY MEDICAL CENTER: Thanks, Ali. Nice to be on the show. I appreciate it.

We do hair research in my lab, largely because I'm also a patient affected by hair loss. So I have a disease called alopecia areata, where the hair follicles come under attack from the immune system and causes the hair to fall out. So we started working on this in my lab about 10, 12 years ago just for that reason, because of my own self- interests.

VELSHI: All right. And so you sort of sound like you told me why you know you suffer from it. Is that generally why people suffer from hair loss? Is it the same trigger?

CHRISTIANO: So, alopecia areata is actually a fairly common form of hair loss that affects about four million people, but that's really a small fraction compared to what we think to as common male or female pattern hair loss, which can affect as much as half the population.

VELSHI: Wow.

CHRISTIANO: So these are large groups of people that care very much about their hair. So those are two examples of what we call polygenic diseases, diseases that are caused by more than one gene. But sometimes we take a different approach like we did in this paper to study families that are outliers, that have a rare form of hair loss, that can actually give us traction to understanding some of the most common forms.

VELSHI: And who did you look at? You specifically looked at people who experienced hair loss at a very young age. Is that what the starting point was?

CHRISTIANO: Yes. So, our studies often start using a classic genetic approach where we find a family somewhere in the world who has a very severe and easily identifiable form of hair loss. In this case, from one generation to the next.

And we basically take a needle in a haystack approach. We look across all the chromosomes for a place where we see that everyone shares the same gene. Then we go in, identify that gene, and find a mutation or a change in the gene that's responsible for their hair falling out.

In this case, what was very interesting to us was that the change that happens in the hair follicle of these rare patients is actually very, very similar to the shrinkage that occurs or miniaturization that occurs in common pattern hair loss. So there's clear connection there, and this change in the structure and the shape and size of the hair follicle is something that is a big part of male pattern hair loss and something that it would be great to understand at the gene level.

VELSHI: Now, tell me -- I was discussing this with our senior medical correspondent, Elizabeth Cohen, a little while ago. And she says when it comes to genes, understanding how it happens is the first step.

What does that lead to? Does that necessarily lead to a cure? Are we looking for a cure? What happens? What's the implication of this?

CHRISTIANO: So, in this case, we've identified a pathway called the wind (ph) pathway that we've known for years is important in male hair growth, but we didn't yet have a clear connection to the pathway in human hair growth. And so that's a big step right there.

Mice don't get male pattern baldness, and that's been a real limitation in our ability to study the process in the lab, or even to screen for drugs that might affect it. So, a gene gives us sort of a starting point, a jumping-off point for thinking about pathways and new ways to hit those pathways. So, up to now, most of the work done in pattern hair loss has been about hormonal pathways or DHT, testosterone-driven.

VELSHI: Right. Right.

CHRISTIANO: This gene gives us sort of a new way of looking at it and suggests that some of the developmental pathways that are responsible for growing hair in the first place are also playing a role in the shrinkage or miniaturization. So, any time we find a new gene that affects any part of hair growth, there's always new hope that eventually a therapy might come from targeting those different bits.

VELSHI: So basically --

CHRISTIANO: I did want to point out one distinction.

VELSHI: Yes. Go ahead. Go ahead.

CHRISTIANO: No, all of the genes that have been discovered for hair are actually terrific targets for the opposite problem of hair removal. So, believe it or not, there are as many people that are troubled by excessive hair growth as there are people who want to grow new hair. So I think that using these genes for targets for something like hair removal is actually closer at hand. And sure, all of them, I think, point us closer to therapies down the road.

VELSHI: Scientifically, I have to stop going around and telling people that the reason I'm bald is because I have excess testosterone, is what you're telling me.

CHRISTIANO: It's as good an explanation as any.

(LAUGHTER)

VELSHI: All right. What a great conversation. A serious topic, but a great conversation.

CHRISTIANO: Thank you.

VELSHI: Thank you so much.

Dr. Angela Christiano, a professor of dermatology and genetics and development at Columbia Medical Center.

CHRISTIANO: Thanks for having me.

VELSHI: All right. Coming up next, why athletes on your favorite college team may not get to play. It's all about making the grade when we come back.

(COMMERCIAL BREAK)

VELSHI: Secretary of Education Arne Duncan wants college athletes to emphasize academics as much as sports.

CNN's Gary Tuchman reports on Duncan's idea to have making the goal mean making the grade.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): The U.S. Secretary of Education has issued a first of its kind challenge to collegiate athletic teams.

ARNE DUNCAN, UNITED STATES SECRETARY OF EDUCATION: I think I have an obligation to challenge the status quo. I'm going to continue to do that.

TUCHMAN: Arne Duncan says if a college fails to graduate 40 percent of its athletes based on its teams for past years, the current team should be banned from postseason tournaments.

DUNCAN: If universities can't graduate two out of five of the student athletes, how serious are they about their core mission?

TUCHMAN: The NCAA would have to approve it, but if Secretary Duncan's proposal is enacted, 12 of the 65 teams in this year's NCAA Basketball Tournament would have been under that 40 percent level and therefore not allowed to play in the tournament.

But then there are schools like Butler University. UNIDENTIFIED FEMALE: We're actually going to head inside and see (INAUDIBLE) Hall right now. We actually had Madeleine Albright come.

TUCHMAN: The small Indianapolis campus was the proud home of a team that made it all the way to the NCAA championship game before losing to Duke, and like Duke has a very high graduation rate.

DR. BOBBY FONG, PRESIDENT, BUTLER UNIVERSITY: It confirms for me that it is possible to achieve athletic excellence and academic excellence at the same time.

TUCHMAN: Dr. Bobby Fong is the president of Butler.

FONG: The men's basketball team practices at 6:30 in the morning. That's the time when all of them have free from class.

TUCHMAN: We talked to one of the team's stars, Willie Veasley, as he got ready for Final Four weekend.

WILLIE VEASLEY, STUDENT ATHLETE, BUTLER UNIVERSITY: I know that we've got the whole Final Four stuff going on, but I think coach is more worried about our grades and making sure that we're taking care of that stuff with all this stuff going on.

TUCHMAN (on camera): So what does the NCAA think about Secretary Duncan's proposal. Will the organization jump through hoops to get this done? Doesn't look that way.

(voice-over): In a statement, the NCAA declared, "We share Secretary of Education Arne Duncan's concern. However, imposing a ban on teams for the academic performance who entered as freshmen 8 to 11 years ago, is probably not the best course of action. Basing post- season bans on graduation rates penalizes the wrong students."

The NCAA currently uses a complex point system to ban teens from post-season play. But it's much harder to get kicked out. Many colleges think it's the fairest system.

As for the president of Butler --

FONG: I didn't think the NCAA would go for it, but I would be in support of it.

TUCHMAN: He's all for the tougher system.

Gary Tuchman, CNN, Indianapolis.

(END VIDEOTAPE)

VELSHI: Let's take a look at some of the headlines this hour.

A 6.9 magnitude earthquake and a string of aftershocks in western China have killed an estimated 400 people and injured 10,000. Rescuers managed to pull 900 people out alive from the rubble of villages. This comes two years after another quake rocked China, killing 87,000 people, many of them children in shoddily-constructed schools.

In Poland, the remain of more than 30 victims have finally come home from Saturday's plane crash that killed Polish President Lech Kaczynski and other dignitaries. The president's planned burial alongside former kings has stressed big controversy, further fracturing a mourning nation.

A memorial for the 96 people killed in the crash will bed had on Saturday. President Obama will attend President Kaczynski's funeral on Sunday.

And Attorney General Eric Holder is testifying before the Senate Judiciary Committee today. He says even if the U.S. does capture Osama bin Laden, he probably won't ever get a trial. That's because reports suggest bin Laden's security guards have orders not to let him be captured alive. Holder is also getting grilled for his handling of terrorism issues, including Guantanamo Bay.

And a wall of water slams into a small town in Peru, and what triggered is going to amaze you. That's next when we go "Off the Radar" with Chad.

(COMMERCIAL BREAK)

(WEATHER REPORT)

VELSHI: Listen, there's nothing wrong. There's lots of people who don't have their taxes done. You break no laws unless you do not have it done if you owe them money by the end of the day tomorrow. And if you don't owe them money, by the way, if they owe you money, nobody cares whether you do your taxes or not.

But listen, if you are like me and you have not gotten it done, Roni Deutch is back with us. She is fantastic, and she's got some things that you need to know. This is important. This is actually going to save you a lot of money.

Stay with us.

(COMMERCIAL BREAK)

VELSHI: Can you guys go to commercial? Sorry, I got to finish my taxes here.

I'm just kidding.

It's deadline time for income tax paperwork. Uncle Sam wants your check and your tax return by tomorrow if you owe the government money. Have you ever wondered what your money is used for once it vanishes from your wallet or paycheck? Let me give you some answers on that.

The median household income about $52,000, that means the head of household is paying $7,895 in federal taxes. The amount's not relevant here, I'm going to find about how you can find out where your tax money goes. We plugged that number, in that case $7,985, into a tax chart from the National Priorities Project, and here's what happens. It generates this page that tells you how much you spend.

So of the $7,985 the particular person paid in federal taxes, you can see that the largest portion went to military spending, then health care spending, then government activities -- the actual running of government, then income security and labor, interest on nonmilitary debt, housing and community, interest on military debt, food, veterans' benefits, environment, energy and science, and all the way down.

Very interesting little thing. You take the amount you're paying in federal taxes and it'll tell you how it breaks down. I think that's kind of interesting.

Roni Deutch is with us, she's been with us a lot recently in tax season. She's the tax lady. She's the author of "The Tax Lady's Guide to Beating the IRS." She has a ten-item checklist to make sure you are squared away with the tax man.

Roni, good to see you again.

RONI DEUTCH, TAX EXPERT: Good to see you, Ali. Thank you.

VELSHI: Tell me about the things we have to do, as we -- as we head into the final day.

DEUTCH: First of all, I always say this, on those final days, please don't panic. Let's make sure that it's all there.

VELSHI: Yep.

DEUTCH: What I notice, Ali, the majority of taxpayers forget to send something to the IRS and fail to list their Social Security number.

VELSHI: Right.

DEUTCH: So, I always recommend that you get a checklist out and you make sure and include, what? Your W-2 or multiple W-2s if you've been fired from a job, rehired, fired, rehired, as well as 1099s if you're an independent contractor and, of course, those 1099Gs if you are unemployed.

VELSHI: Number two, you say check the IRS website. I did that, it was very interesting.

DEUTCH: Yes, I really recommend that taxpayers that are confused, and that includes millions of people, go to IRS.gov, type in up in the upper right-hand side what their question is or pick up the phone, Ali, and dial 1-800-829-1040 to have all of your tax questions answered.

VELSHI: You recommend people file electronically, e-file.

DEUTCH: Let's face it, we are addicted to the Internet and yet millions of people fail to e-file. Do you realize, Ali, if you e-file your tax return, it's the safest, fastest way to get your return to the IRS? And more importantly, the 70 percent of taxpayers who are lucky enough to get a refund, will get their refund in ten days.

VELSHI: Wow, that's incredible.

All right, one thing that you have said to me before which sticks out in my mind is that mistakes are OK, lying isn't.

DEUTCH: Let's face it, you and I know that math is not everyone's favorite subject. So, when you fill out your tax return, please do not allow desperation to sink in and affect the way you prepare your taxes.

If you make an honest mathematical mistake, which millions of taxpayers do, the IRS will not come down hard on you. However, if you are intentionally lying or committing fraud, now we're talking about criminal prosecution. So, please, be honest on that tax return and make sure in '09 that two plus two really does equal four.

VELSHI: Listen, married people, should they be filing jointly or separately? One thing I learned is that married people have to make that decision. If they're filing jointly, they have to do certain things and if they are filing separately, they also have to do certain things the same way. But which one's better?

DEUTCH: I think married filing jointly is better because you get the child and dependent tax credit and the earned income tax credit and you qualify for many tuition deductions.

But let's face it, many people are way too aggressive on their tax return and if you're married to someone like that who is ultimately going to owe the IRS, I absolutely recommend filing married filing separately. It will keep you out of trouble.

VELSHI: OK. Let's get through a couple more of these.

You say make copies of everything, that's fairly self-explanatory and smart. What about using IRS mailing materials, what's that about?

DEUTCH: Yes, can you imagine people who are sending information to the IRS and the IRS actually provides them with proper mailing addresses, whether it's labels or stickers, and we fail to use them? You would be shocked how much pieces of mail are lost to the IRS, and the last thing you want to do is delay that tax return getting to the IRS, and, more importantly, delay getting your money back from the IRS.

VELSHI: If you're not ready, which a lot of people are not, and you can file for an extension, but if you owe the government money, you got to pay them?

DEUTCH: Yes. You and I know that we're addicted to the extension. We know we're allowed legally for that automatic six-month extension, you file form 4868. But we know it doesn't give you an extension of time to actually pay the IRS.

Remember, if you cannot afford to pay the IRS, and millions of taxpayers are going to be in that desperate situation, pick up the phone, call them up, and work something out. But get that tax return in or that extension, so you'll delay and avoid very costly penalties.

VELSHI: All right, last two speak for themselves. If you have questions, get professional help and check the math.

Roni, good to see you as always. Thanks very much for your great advice through this whole process. You've made me feel a little less panicked.

Roni Deutch, tax expert and author.

DEUTCH: Thank you so much, Ali. Appreciate it.

VELSHI: Always a pleasure. Author of, "The Tax Lady's Guide to Beating the IRS."

Benjamin Franklin, by the way, once said, "Nothing is certain but death and taxes," but he forgot about tax days freebies and specials. Every April 15th, you can bet on getting a little something for nothing. Here are some of the deals that we dug up this year.

Tax-day freebies: Cinnabon -- I love those things, they're crazy -- two bite-sized cupcakes from 6:00 p.m. to 8:00 p.m. Maggie Moos, free slices of ice cream pizza from 3:00 p.m. to 7:00 p.m. A little suspicious. Starbucks free brewed coffee if you bring your own mug on Tax Day. McCormick and Schmick's $10.40 -- get it, tax humor -- $10.40 drink and dinner special. Whole Foods has tax-free shopping at some locations. IHOP a free kid's meal with the purchase of an adult meal, that actually runs all month long.

And the best part for all these, you don't have to file any paperwork.

Stay with us, we're coming right back.

(COMMERCIAL BREAK)

VELSHI: Checking some of the top stories we're covering here at CNN.

Good news on the economic front, retail sales rose for the third straight month in March. The government attributes that to better weather and automakers offering incentives to get you to buy their cars. The report is the latest sign that consumer spending is rising fast enough to support at least some modest economic recovery.

In western China, a series of strong earthquakes hit a remote and mountainous region near Tibet today. An estimated 589 people now believed to be killed, some 10,000 injured. Many towns and villages totally flattened. Rescuers are rushing to the area to search for survivors.

And this development, President Obama is expected to name his nominee to replace retiring Supreme Court Justice John Paul Stevens early next month. The government source close to the selection process tells us that things are progressing smoothly. We'll be keeping a close eye on the entire process. And where is he? Let's look -- there he is. There he is. Ed Henry back on terra firma. He is at the White House and we are going to pop in to him in just a few moments for "The Ed Henry Segment."

By the way, if you want to find out things that are coming up on the show, follow me on Twitter @AliVelshi.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Welcome back, Ali. Glad you showed up for work.

VELSHI: You can follow Ed, too, but I can't remember his Twitter address.

HENRY: EdHenryCNN.

(COMMERCIAL BREAK)

VELSHI: All right, there he is, Ed Henry. Sorry, I missed you for the last couple days. Everything OK? You held the fort well?

HENRY: Yes, things are well. Back from Prague and good to see you back as well, and congratulations on the good news about this scientific discovery on hair, it sounds like maybe one small step for the bald, one giant leap for the Ali Velshi show.

VELSHI: Yes, you and I can look the same.

HENRY: We should try it.

VELSHI: We might.

HENRY: If I start thinning out, we're going to be going opposite directions.

VELSHI: We can swap.

What you got for us today? Where are you, by the way? This is completely -- looks different.

HENRY: Yes, I'm going to tease what we're going to talk about in a minute about why I'm here in front of the parking lot that's just outside the West Wing. You don't normally see this. This is where they line up all the cars and SUVs.

A lot going on right now, tomorrow we start with where the president's heading. He's heading to NASA --

VELSHI: Yes.

HENRY: -- down in Cape Canaveral. And you've been talking about it today. Really controversial that he really wants to make some drastic changes to the space program, mothball some things. He's making compromise and giving in and giving some more money to NASA because the controversy from Neil Armstrong and other astronauts saying he's changing it too radically, privatizing some operations. Probably going to be several thousand jobs lost at Kennedy Space Center because of some of these changes. However, the president making some modifications now that the White House says will save about 2,500 jobs down there.

Bottom line from Robert Gibbs just a few moments ago in his briefing was, you know, we want to keep the space program going, but it's sort of tough times, tough budget choices have to be made and they just can't give all the money that the space program has been getting. A lot of cost overruns over the years. So he's going down into the sort of the eye of the storm tomorrow, because a lot of people down there in Florida very upset because of the jobs that will be lost because of the changes.

VELSHI: There's a lot of discussion about what part of the space program can be privatized. I'm going to be talking about a lot, we're going to be talking about that tomorrow.

Hey, Robert Gibbs was also talking a lot about financial regulation, becoming a big hot topic. I got to tell you, this one confuses me a little bit because there are some people digging in against it. I'm not sure, as a business guy, I fully understand the argument against regulation.

HENRY: The White House doesn't either, and what the house is saying this is sort of a straw-man argument. You heard republicans saying -- you know, Mitch McConnell, the senator, John Boehner, the House republican leader, were here at the White House with the president today. And they came out afterwards and were saying that this is going to lead to more bailouts and that the government will sort of have a blank check to bailout as many big banks as they want.

You heard Austan Goolsbee right here on the show a little while ago saying it's just the opposite. The White House believes that this sort of financial regulation reform will actually set up a consumer protection agency and a high-risk commission that basically will oversee these banks and make sure they're not too big to fail, make sure they don't get into the same pickle we saw almost two years ago.

And so, I think the battle lines are drawn. But what's sort of going on behind the scenes at the West Wing is the White House feels that a turning point in the health care reform effort was when the insurance companies started raising rates.

VELSHI: Yes.

HENRY: It was an unpopular boogie man for the president to go after. Now, they see the republicans looking at least like they're defending Wall Street. White House realizes Wall Street about as unpopular maybe as the media right now and they're more than happy to pick that fight and show the president standing up against Wall Street. The republicans, again, looking like they're standing up for Wall Street and the status quo. Republicans say, no, no, no, we're not for the status quo.

But we're back to sort where we were on the health care debate where the both sides are sort of at loggerheads and the White House is more than happy to paint it as republicans standing up for Wall Street.

VELSHI: Speaking of republicans, what is John Boehner up to?

HENRY: Well, this is why we tease that we're in sort of what's the parking lot outside the West Wing. This is where they park -- some White House staffers park, but then also the SUVs tend to be officials from the federal government, from Capitol Hill when they come over for meetings.

John Boehner came out of that meeting on financial regulatory reform and we caught this funny video where he was waiting for his SUV to pull up. It's almost like when you are at the valet at the restaurant and you're waiting for your car and it doesn't come and 20 other people ahead of you get their car. And so you can probably see the video playing out where John Boehner is sort of whistling, waiting for the car. This played out over a couple of minutes.

I don't suppose maybe that the White House parks the republican cars a little further away. Maybe Harry Reid and Nancy Pelosi get their car first? You know, I know when you pull that Nissan into a restaurant, you always get it first because --

VELSHI: I always want to be one of the guys, you know, where they always park a few cars up front, the fancy cars. I never get that.

HENRY: Well, if you throw them like -- you probably try to throw them like a five spot or a two spot or something --

VELSHI: Oh, maybe that's what it is. Maybe I'm not tipping properly.

HENRY: I think you got to tip a little bit better, Ali. That's the problem.

VELSHI: See, this is why we're have "The Ed Henry Segment." You see him on the rest of the network and you're getting, "Blah, blah, White House, blah, blah, president, blah, blah, news." You come in here and he tells how to get your car parked close to the entrance to the restaurant or the hotel.

HENRY: Yes, trying to help you.

VELSHI: Ed, I missed you, Ed. It was good to have you back. Good to have you back on the stateside.

HENRY: Good to finally be back.

VELSHI: Ed Henry, the senior White House correspondent here every day, same time, giving us the inside scoop.

All right, the Pig Book. Have you heard about the Pig Book? It's the release of the Annual Pig Book, hot off the presses. Josh Levs has read it and he's going to give you some of our favorite congressional pork projects. It's your money. We're going to talk about it when we come back. (COMMERCIAL BREAK)

JOSH LEVS, CNN CORRESPONDENT: Works for me.

VELSHI: How many months have I been here and we've been trying to figure out, we do this all the time and everybody always complains you and Josh look like you're sitting on top of each other. You sit in the chair, stand up. Look what happens -- stand up for a second, let's talk for a second when we stand up, it doesn't work.

LEVS: I don't mind it, but I know that you're not that happy about it.

VELSHI: It doesn't work out.

(CROSSTALK)

VELSHI: We're tight, we're close.

All right, tell me about the Pig Book.

LEVS: The Pig Book -- we've got the pictures of pigs.

So basically, every year, the pig comes out, right? Citizens Against Government Waste, this big group, and they go through all the appropriations. They go through all these earmarks and they say, hey, which ones are the craziest? Gets everyone paying attention.

They say there's a little bit good news. They say a little bit less money went to earmarks in the fiscal year 2010 than it did in 2009. It's still tons of money, though. I mean, I have the figures over here. They say it went down to $16.5 billion from about $20 billion.

VELSHI: These tend to be things that are in a bill that don't really have something to do with the bill.

LEVS: Right, exactly. So basically, we're talking about lawmakers who get their own pet projects often into it.

VELSHI: OK.

LEVS: And we have some examples for you that our graphics department had a lot of fun with it. The first one is this potato one you're seeing here. By the way, Citizens Against Government Waste calls this their "Do You Want Fries For With That Award" -- $2.6 million for potato research. There's another one, $693,000 for beef improvement research. Then $4.8 million for wood utilization research.

So these are just a few of the crazy ones that they are saying, look, on the outside it might be nice for some people out there, but we don't think this is an appropriate use of taxpayer funds.

VELSHI: I feel like we've been utilizing wood for a long time. I feel we're good at that. You can chop it, you can carve it, you can use it to build your house.

LEVS: Well, maybe there's things we haven't figured out yet.

VELSHI: Maybe?

LEVS: Yes, so I mean, the idea of a project is fine, but the idea is really more about the system, right?

VELSHI: You're right.

LEVS: They tag things on to --

(CROSSTALK)

LEVS: -- it doesn't go through the entire budget process. It's not --

VELSHI: It doesn't have the scrutiny that it otherwise would, that's often a lot of the issue. It gets put in the bag in exchange for somebody's vote sometimes.

LEVS: Right.

VELSHI: And it does have to do with a lot of wheeling and dealing, and I guess people don't like the taste of it.

LEVS: They don't. And, in fact, we have one response already. Let me show you this. Yes, they say the biggest pork getter, basically, this year was Senator Thad Cochran a Mississippi republican -- $490 million total they say went to his projects. But he has already responded, I want to give you his statement.

It says, "Throughout the appropriations process, Senator Cochran continued to advocate for meritorious programs that were omitted from the president's budget. Those requests were vetted to ensure that the funds were lawful and legitimate purposes and would serve the public interest."

The reason I like pointing that out is that not everyone responds, and that -- when we get a response -- it's usually like that, saying, look, I believe in these projects, they serve my community.

VELSHI: And nothing illegal.

LEVS: This is what people do, they go up there and get money and everyone tries to get all they can. And until we change the system, it's like that.

VELSHI: Good to see you. And maybe we can get seats for us.

LEVS: You can tweet us and tell you what you think about sitting this close together.

VELSHI: All right, in a minute I'm going to talk about the space exploration. It is not just about discovery, it's also about business. I'm going to, you know, have something to say about whether or not we should be letting businesses be taking over a very, very big part of our space program when I come back.

(COMMERCIAL BREAK)

VELSHI: Time for "The X-Y-Z of It."

For the last couple of hours, I've been telling you about a space program and the shift in how NASA is going to use billions of dollars in federal money. Tomorrow, President Obama will be on the space coast in Florida to talk to NASA workers about the future of American space travel and you'll, of course, be able to see him live here on CNN. We're expecting him to talk about how we're going to get astronauts into space after the shuttle fleet is retired this year.

And now to "The X-Y-Z of It." Why not give private industry a crack at this space taxi business? New, fresh minds can bring innovative ideas to the table, but there have got to be checks and balances.

First and foremost, it's got to be safe. The space industry needs to be heavily regulated. We've already had too many astronauts die in the space program. Second, if private companies can get folks into space for a third of the cost, why not do it? If it saves taxpayer money, I'm all for it.

And last, use the NASA workers. You're talking about men and women who have committed their lives to the space program. These aren't just workers, they're visionaries and experts in the field. Make sure we're utilizing the people who have the most experience. They have taken part in developing amazing technology. And we're not just talking about Tang or Teflon, we're talking about water filters, microwaves, smoke detectors, air purifiers, ear thermometers, memory foam, scratch-resistant lenses, life rafts that have saved the lives of hundreds of sailors -- the list goes on and on and on. It is technology we couldn't live without, but it's technology that needs to be spread out among private companies.

That's my "X-Y-Z of It." Time now for Rick and "RICK'S LIST."