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U.S. Born, Al Qaeda Bred; Eggs Fly in Ukraine Parliament; Israel and Iran; You Have a New Owner, Charlie Brown; Grilling Goldman Sachs; GM Upgrading Plants; 42,000-Gallon-a-Day Leak; President Obama on Financial Reform

Aired April 27, 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, "CNN NEWSROOM": Right here in Washington, D.C., lots to talk about for the next couple of hours.

You know what a real monster looks like. It looks just like this; incredible new pictures of the Mississippi tornado, every bit as powerful, vast and deadly as it looks.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: For years and years, the investment bank community in this country flourished without this kind of nonsense that was basically casino gambling on steroids.

(END OF VIDEO CLIP)

PHILLIPS: Casino gambling on steroids? The SEC in a coma. I don't know. You think there'll be some fireworks when Mr. Goldman Sachs puts his keyster in the hot seat? By the way, how did you make out in the recession?

And here's one of those parliament meetings where a hockey game breaks out. Should have held that big boat in an arena and sold tickets. Oh and it gets much more interesting.

We begin with the interesting Goldman Sachs. Live pictures right now. It's Wall Street's most powerful firm and its most valuable commodity is trust. So the question it faces this morning is critical. Did it betray the trust of investors like you?

At the core, the risky investments that led to fraud charges. Investors say Goldman Sachs advised its clients to invest in the housing market then raked in billions of dollars when those investments tanked. Goldman denies claims that it bet against its clients.

But the big question remains unanswered. Was this practice of conflict -- a practice of conflict of interest? And more importantly, how should Goldman and other banks be regulated to protect investors in the future?

We are going to keep a close eye on your money throughout the morning. Later this hour, President Obama looks at the soaring federal deficit and how it must be reigned in. He'll call for Democrats and Republicans to work together on that goal.

And next hour, a closer look at this morning's grilling of Goldman Sachs. We're going to talk to a special writer for the "Wall Street Journal." What does he expect to come out of today's hearings?

Well, new regulations for big banks hit a snag in the Senate. Not enough votes. Democrats failed to get any Republicans on board as they try to push a banking reform bill endorsed by President Obama.

Among things in the bill is a consumer protection agency for lending. Republicans agree that something needs to be done but they say the Democrats' bill just doesn't cut it. Both sides are continuing negotiations in an effort to find common ground.

All right, we'll take you now straight to Ali Velshi. He is actually here in Washington, D.C. He is right there inside the room where it's all going to go down.

Ali, let's just try and break it down beginning with --

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: OK.

PHILLIPS: -- why this matters for you, me and every investor whether we invested with Goldman Sachs or not?

VELSHI: Yes, right. And I think you -- forget everything that happened in the past. The only reason this is going to matter to most people who are watching us today is about what happens in the future.

Will something come out of the discussion that goes on today that is somehow going to protect us from another financial meltdown in the future? So you're going to have senators here from the subcommittee on investigations.

That's a subcommittee of the Homeland Security Committee. And then you're going to have this table here which is going to have three different panels of Goldman Sachs executives.

Two of them are going to be full panels, a third one is going to be Lloyd Blankfein, the CEO of Goldman Sachs.

Now this is unrelated to the charges that were laid against Goldman Sachs by the SEC. This is an ongoing investigation. The senators say that Goldman Sachs is basically a proxy. They're using it as a case study for what role these investment bankers had in the meltdown -- in the financial meltdown.

Now remember we're not saying that the investment bankers caused the recession. We were headed for a recession anyway. But did they make it that much worse by their activities that sort of weren't exposed as clearly to everybody around them?

That's where we're hoping to go today. We're hoping to learn whether there are reforms or changes that can be made that can prevent us from being in the mess that we were in, Kyra, in the fall of 2008. PHILLIPS: So I know we're going to be talking about this all morning, Ali. But, you know, let's think of the movie "Wall Street." Gordon Gekko, right? This whole idea that greed is good. That whole illusion, OK?

VELSHI: Yes.

PHILLIPS: So was this really sleazy banking here? Sleazy investigating, sleazy operators on Wall Street? Or was this just simply wise business of covering all the bases?

VELSHI: You have asked the several trillion dollar question. By the way, you know, there's a "Wall Street II" coming out in September. And I have a little tiny role in it.

But, Kyra, that's exactly the question. Is it moral? Is it sleazy? Is it unethical? And is it legal? Or was this the stuff that Wall Street was supposed to be doing, making money no matter what was going on?

I think you're going to get a lot of those kinds of questions from the senators to these folks at Goldman. And what you're going to hear from them is they didn't do anything wrong. They say they were doing exactly what they were paid to do and by the way, while the rest of us were losing money, they were making money because they were smarter investors than the rest of us.

So should we all be sitting here saying I want to pay attention to these guys and learn how they did it? Or should we be saying, they didn't deal squarely? They didn't deal fairly with their clients and with the public?

That's going to be the question I'm going to try to get to all day -- Kyra.

PHILLIPS: Well, and before I let you go, you've got pretty good access there, my friend. Are you going to reach over and just ask a few questions at the mike?

(LAUGHTER)

VELSHI: OK. I can reach over and touch folks. So here's the one that you want to look at here. Fabrice Tourre. He is the 31-year-old vice president at Goldman Sachs, who was the one who sent out those e- mails that the SEC quoted where he basically, and I'm paraphrasing, says the entire world is collapsing around me and me, Fabulous Fab -- is what he referred to himself as -- will be the last man standing.

So he's going to get some tough questions about whether he designed these investments to fail so that Fabulous Fab could be alive.

I'm waiting to meet him. I'm interested to meet him.

PHILLIPS: I bet you are. Well, the only fabulous person in that room right now is you, my friend. We'll be talking to you throughout the next couple of hours. Ali Velshi, thanks.

VELSHI: OK.

PHILLIPS: Stunned and left to pick up the pieces after a killer tornado. Check out these compelling pictures that storm chasers grabbed from Yazoo City in Mississippi. The latest numbers from that state is that 10 people have been killed, 49 injured, nearly 700 homes damaged.

Alabama also got hit pretty hard by severe storms over the weekend. They are now saying six different tornado tracks ripped through the northern part of that state. And now the town of Albertville has a lot of rebuilding to do.

Rob Marciano watching the severe weather today. We're going to join him in just a few minutes.

Mass murder charges are being brought against Kyrgyzstan's president on the run. President Kurmanbek Bakiyev is in Belarus right now. He left the capital and then the country following violent opposition protests.

He said that he's still president but opposition leaders say not to listen to him. They're going to ask that he be extradited back to Kyrgyzstan to stand trial.

And remember Manuel Noriega? The former Panamanian strong man? Well, he's been cooling his heels in a Miami prison for the past two decades. Now he's got a one-way ticket to Paris. No sightseeing for him, though. He's been extradited to stand trial on charges of laundering drug money.

Noriega's Miami attorneys are ticked off at the State Department. They say they were never told about that move.

And take a good look at this guy. He's on America's most wanted list of al Qaeda leaders. Anwar al-Awlaki is a Muslim cleric born in the U.S. now based in Yemen. In this just released video, he accuses the U.S. military of pitting Muslims against each other by blaming bombings on Islamic militants.

Al-Awlaki has also been linked to the suspect -- as a suspect rather with the suspect in the attempted Christmas day bombing of a Northwest Airlines plane.

CNN's international security correspondent Paula Newton joining us now live from London.

So, Paula, we haven't seen this American before, have we?

PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT: We have seen him before. In fact, in CNN we released exclusively an audio message just a few weeks ago.

What is different about this, Kyra, is the fact that it is with an al Qaeda logo that he is actually making this kind of speech. I'm told it runs about 40 minutes long in all.

There's been some controversy. Al-Awlaki, I'll remind you, is an American citizen and whether or not he shows up on an American hit list. Right now his taking shelter in southern Yemen is a point of controversy.

Also there is a lot of debate about his influence, his actual operational influence on any kind of terror activities. Most people believe that he is actually more inspirational.

The U.S. government to me, Kyra, has categorically denied that several times saying he is now operational, a key leader for al Qaeda in Yemen -- Kyra.

PHILLIPS: So, Paula, what does this mean for al Qaeda in the region overall?

NEWTON: Kyra, what's interesting here is that the U.S. is still trying to piece together a picture of the capability for those Yemeni operatives. Where do they have training bases? What kind of weapons do they have?

What kind of capability do they have in terms of recruiting western or people who don't need visas to get in to the United States in order to hit those targets?

It's these kinds of things that they're trying to piece together. A lot of -- with the help now of drones overhead in those regions. But it's a very tense situation in Yemen. And of course we do not have boots on the ground there right now. It's mainly with intelligence support.

Suffice it to say that a lot of U.S. security officials, Kyra, still believe that al Qaeda maintains key capabilities within Yemen.

PHILLIPS: It's frightening. And real quickly before I let you go, there's also a new video, right, of the Christmas day terror attack involving Umar Farouk Abdulmutallab?

NEWTON: Chilling video. The kind of stuff that we have seen before our first broadcast by ABC News. It's showing in fact him in military training. Doesn't add much to his case.

What it does do again, though, Kyra, is begins to piece together for the United States a visual picture of exactly what those training camps might look like, where they might be located.

The video, though, is most likely quite old now, probably upwards of six months. Still, key -- apparently Abdulmutallab told U.S. authorities after he was arrested that, quote, "There were more like him out there."

This may start to give them some clues of exactly if there are other terrorists in the pipeline training in Yemen.

PHILLIPS: We'll track it. Paula Newton, thanks so much. Well, it's nice to know that civility is alive and ell in politics that we can disagree without really being disagreeable, respect the opinion of others, blah, blah, blah.

Yes, right. We're watching Advil and Tylenol sales increasing in the Ukraine thinking they'll spike after parliament went all WWF.

ROB MARCIANO, CNN METEOROLOGIST: And I'm Rob Marciano in the CNN Severe Weather Center. The severe weather from the past week is pretty much done. But it's bringing us some cooler air for the northeast. Winter storm warnings posted. Can you believe that? We'll talk weather in just a few minutes. Stay right there.

(COMMERCIAL BREAK)

PHILLIPS: Things got pretty ugly in the Ukraine today. Their parliament approved a new military treaty with Russia basically letting Russia's Navy stay on the doorstep for an extra 25 years.

It made our health care debate look like a stroll in Central Park. Check this out. We've got the blow by blow for you. And we start with a few eggs for breakfast thrown up there. Lucky for those guys, they brought their umbrellas.

Bad luck to open them inside, though. Except when you're deflecting eggs. But really, who brings eggs to a parliament meeting? Well, this guy. You can see him on the left. Palming a couple of eggs to throw up there and did they forget the rotten tomatoes?

That's what we are wondering. But it did get worse. Here's where things got really physical. A little hair pulling among parliament members.

Now to top it all off. We need a grand finale, right? How about a smoke bomb? Hey, there you go. See the smoke bomb? Little smoke to really set the mood. And then check out the giant Ukrainian flag draped across the desks.

Well, the parliament bitterly divided over relations with Russia.

CNN senior international correspondent Matthew Chance joining us now from Moscow.

So, Matthew, what's going on here? And why is everybody so upset?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: I know. It's incredible to watch these scenes. And it's almost comical that the country's politicians would behave in this way.

And it is funny to watch. You saw the hair-pulling and punching and egg throwing. Not by protesters but by the -- you know the MPs themselves. But it does expose a very serious issue that's happening in Ukraine. That former Soviet Union country.

The country is deeply divided between those people who want to be much closer to the west, wants to join NATO, wants to join the European Union, be more close to the United States, in fact. And those people who are currently in power who want to take Ukraine back very much closer towards Russia, closer towards the sphere of influence of the Kremlin.

What's happened here is that the new governments, the pro-Russian government, has extended the lease on a Russian naval base on Ukrainian soil. And that has angered these nationalists, these pro- western politicians so much that these scenes of chaos have broken out.

And it's very much part of a trend in Ukraine now under this new government. The previous administration has, you know, supported Georgia in its war against Russia in 2008. Had -- you know, basically wanted to close this Russian naval base down.

But this new government has done a complete about-face and is even much closer to the Kremlin -- Kyra.

PHILLIPS: Now you can imagine if something like that happened here, people would be held accountable. I mean -- did anybody get in trouble for this?

CHANCE: You know, I don't think so. And this looks astounding and exceptional. But in fact, in Ukrainian politics, this kind of thing happens quite a lot. You know we've often seen sort of fisticuffs in --- on the floor of the House, something that is unheard of in countries like United States, obviously.

But it is something, because it is so chaotic, because passions run very high in that part of the world that (INAUDIBLE) issues, then you do see this quite often. I think not quite as serious as smoke bombs on the floor of the House of Parliament.

PHILLIPS: I just can't imagine members of our House or Senate doing it. Maybe not on camera but that's a whole another story.

Matthew Chance, appreciate it.

All right, let's check in with Rob Marciano in the Severe Weather Center. Some powerful storms on the west coast. Rob?

MARCIANO: Hey, you know, maybe some fisticuffs on Capitol Hill may solve some of the problems.

PHILLIPS: Can you imagine Nancy Pelosi throwing some eggs, you know, across the floor? I don't know.

MARCIANO: Well, or Harry Reid from the top row? Can you believe it?

(LAUGHTER)

PHILLIPS: Exactly.

MARCIANO: That is sweet.

(LAUGHTER) MARCIANO: All right, good morning, Kiran. Hope you're enjoying the weather in D.C. It's nicer today that yesterday, that's for sure.

(WEATHER REPORT)

MARCIANO: Guys, if they just want to meet up by the bike racks today, Kyra, that's not a bad call because it's nice weather in D.C. They can take out their differences on Capitol Hill.

(LAUGHTER)

PHILLIPS: Go on a friendly bike ride.

MARCIANO: Exactly.

PHILLIPS: Thank you, Rob.

MARCIANO: See you.

PHILLIPS: We'll have a check on our top stories in just 90 seconds.

(COMMERCIAL BREAK)

PHILLIPS: So will the top firm on Wall Street become the top fall guy on Capitol Hill? Next hour, senators are expected to grill the leading executives of Goldman Sachs. Lawmakers want to know if the company's zeal for profits contributed to the financial crisis.

Goldman Sachs faces fraud charges amid accusations that it invested clients in the housing market then bet its own money on a meltdown.

After 20 years in a Miami prison, Manuel Noriega gets a flight to Paris and a quick return to jail. The former Panamanian dictator was extradited to stand trial on charges that he laundered drug money.

U.S. troops seized Noriega after invading Panama in 1989. His U.S. drug sentenced ended three years ago but he's been held as a POW. Panama wanted Noriega back to stand trial on murder charges. The U.S. gave him to France instead.

Gauging Israel's patience over Iran. Important meeting today in Washington. The Pentagon and State Department getting involved, taking a look at where the military stands and the issue of a possible war.

A presidential pop in --

(COMMERCIAL BREAK)

PHILLIPS: Well, what we already know is Iran is a real sticking point and we have heard the rumblings. Rumblings of war. Either Israel or the U.S. trust that country's president and his nuclear capability.

So the question now is why are these high-level leaders meeting now and is Israel actually considering taking matters into their own hands. "AMERICAN MORNING's" John Roberts actually talked with Israel's ambassador this morning.

And boy, you asked him a number of times and he worked around it, saying we support sanctions, we support sanctions. However, when it came to that question about war, --

JOHN ROBERTS, CNN ANCHOR: What he said was that Israel reserves the right to defend itself. And that is a policy and a statement that Israel has long stuck by. And it's just -- it gives him an out.

It's the same as the United States. We'll say that we reserve the right to defend ourselves. We are not taking anything off the table. But there's a growing concern that is, as Iran gets closer to completing the nuclear cycle, and this is not to say that there's any hard evidence that they're building a bomb. And certainly they have lots of these nuclear facilities, that Israel is not going to stand by and watch it happen, particularly with American officials saying they don't know if they would be able to stop Iran from acquiring the full nuclear cycle in which Iranian potentially produces an alphabet to create a bomb.

So the United States is relying on sanctions and Israel is hoping that these sanctions will take place. But if they don't, here is what the ambassador said about that.

(BEGIN VIDEO CLIP)

MICHAEL OREN, ISRAEL AMBASSADOR TO THE U.S.: Israel, John, has a right to defend itself. And we have a particular memory of a time 65 years ago when Jews didn't have a right to defend themselves. And w remember what happened.

But the fact of the matter is, again, we are committed to these sanctions, seeing how they work, getting them up and running, and imposing them on this regime in order to deter Iran from making a nuclear weapon.

I think Iran poses a serious and mortal threat, not only against Israel but against many Middle Eastern nations and against world security in general. The people of this country. If Iran gets the bomb, a great number of countries in the world, many of them unstable, many of them failed regimes, terrorist groups will get access to military nuclear technology.

ROBERTS: But --

OREN: And Iran is provided missiles to terrorists.

(END OF VIDEO CLIP)

PHILLIPS: All right, now, he keeps reiterating the fact that they're supporting sanctions, sanctions, sanctions but he did not say no to war. And he made it perfectly clear, we do not want to coexist with a nuclear Iran. ROBERTS: There's always a backup plan, but at the same time that Ambassador Oren says that nuclear weapons in the hands of Iran certainly would be a grave threat to not only Israel but to the rest of the region and probably the world at-large.

American officials have suggested that Israel attacking Iran unilaterally to try to take out those nuclear facilities would have great consequences as well. Admiral Mike Mullen, chairman of the Joint Chief of Staffs, said that very recently.

But there's another problem here in the whole thing. It may not actually be a conflict between Israel and Iran, that's the problem. If you talk to Israeli officials -- they'll only say this quietly. They don't want to say this publicly.

The president of Israel contends that Syria has been shipping these scud missiles that we saw Iraq used against Israel during the first Gulf War into Lebanon giving them to Hezbollah, beefing up their arsenal with some very large weapons in addition to all of the smaller rockets that Hezbollah has in its possession.

And here's what Israeli officials say. They believe that if the sanctions regime is put in place and those sanctions begin to bite hard against Iran, potentially as early as sometime this summer or toward the end of this summer that Iran will give instructions to its proxy, Hezbollah, in Lebanon, to fire those rockets against Israel.

And if that happens, this -- again, these are Israeli officials painting this scenario. And they do it very quietly. And if that happens, if Hezbollah starts firing rockets into Israel at the behest of Iran, then it's going to be -- what one official described to me as an s, dot, dot, storm.

PHILLIPS: Wow. Well, we'll follow it for sure. And military sources telling me this is of extreme concern to them. And they're talking about it in classified circles.

ROBERTS: Very much so.

PHILLIPS: All right, John, thanks so much.

Grilling Goldman Sachs. The Wall Street giant faces some tough questions this morning. What will the top executives say to indignant lawmakers? We're going to get a preview.

(COMMERCIAL BREAK)

KYRA PHILLIPS, CNN ANCHOR: Executives from Wall Street giant, Goldman Sachs, are about to face some tough questioning on Capitol Hill. We're there, of course. We will take a look at how investors are likely to react. We will get straight to Stephanie Elam in New York. So, Stephanie, how's the open looking so far?

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: We are looking into the red right now, Kyra, but I got to say you're definitely in the hot spot in the country today. D.C. is where all the eyes are going to be. We're looking for a lower opening, although, right now, the loss is not too large. On one hand, we have strong earnings from UPS, 3M, and DuPont, but as you mentioned, Wall Street will be watching those hearings on Capitol Hill. Of course, Goldman Sachs is facing civil fraud charges from the SEC and depending on how things turn out, this could have large implications for other Wall Street firms.

After all, Goldman isn't the only company that has dealings in the mortgage market, but Goldman maintains that they were managing risk and actually lost money on its mortgage-backed securities. Goldman's shares, by the way, they are down 12 percent since beginning of the year. Today, they're down a little over 1 percent. Overall, take a look at the markets, the Dow up 45 points. You can see there, 11,159, Nasdaq off ten at 2,512.

And, Kyra, before I go, I got a little other news for you about some friends we know. Charlie Brown, he got a new home. E.W. Scripts is selling the unit that owns the rights to CB, Charlie Brown and the rest of the gang. Iconix Brand Group is buying $175 million. The Iconix Brand is a big moneymaker with annual sales of more than $2 billion. I know I still look for the little dance around Halloween.

PHILLIPS: As long as they're kept alive, I know, every holiday -- how about the Christmas special. Come on, we can't forget that, Steph?

ELAM: The Christmas special too, definitely. Now, I look for both of them every year. I'm like a little kid.

PHILLIPS: All right. So, when Simone is born, that will be your baby gift. I'll get her all the Peanuts episodes.

ELAM: And they will be watched not just by Simone, I tell you that.

PHILLIPS: Thanks, Steph.

From Wall Street to Main Street, it's been an ugly couple of years. We lost value in our homes, our investments, and maybe some trust in the financial industry. Some, that's putting it lightly. So this morning, lawmakers want to know, did Wall Street's number one firm help bring about the financial meltdown? Did Goldman Sachs betray the trust of its own investors? Did greed prevail over common sense? Top execs of Goldman Sachs will face Senate questions over its policies and the fraud charges file just 10 days ago.

Investigators say that the firm steered investors towards betting on the housing market then made millions of dollars by betting against it. If you have investment so or 401 (k), you definitely have a stake in this fight. Joining us now to break it all down, Christine Romans of our CNN Money team. So, Christine, the CEO is testifying. What's his defense?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: He's going to say they didn't do anything wrong, Kyra. He's going to say that, look, this is the company that was just hedging its risk and was just doing what it was supposed to do, stand in the middle of investors, some who want it to be long, meaning buying exposure to things, some who want to be short meaning selling exposure to things and making money on both ends. You can see that the people behind me are lining up to get into that at hearing room. It's already full of cameras, already full of some props in the like.

We were snooping around here a little bit earlier. We've also seen the testimony. This is what Lloyd Blankfein is going to say. He's going to say, we didn't have a massive short against the housing market and we certainly did not bet against our clients. He's going to launch a vigorous defense saying this company overall lost money. They had small involvement in the residential mortgage market. They lost money and mortgage investment in 2007 and 2008 even if they were making money overall.

And he said that their decisions were not based on some idea that the market is going to fall apart or some wish that the market was going to fall apart but fear of the unknown. That's what he is going to say. And he's also going to say that they did not specifically create products designed to fail. And Kyra, Fabrice Tourre, who's also named in the SEC case, he's also going to say according to his testimony, he did not design anything or sell anything that was designed to fail. He simply was standing between very sophisticated investors and doing the business that they wanted done -- Kyra.

PHILLIPS: There are questions surrounding is this fabulous fab character going to be the fall guy here?

ROMANS: That's a really good question too because there was one e- mail released from fabulous fab Tourre as he calls himself in an e- mail. That was released by the SEC, but there were other e-mails of him talking to a girlfriend, talking about, you know, how he created these monstrosities that he didn't even quite know what the implications were. Those e-mails were released by Goldman Sachs.

So far, it looks as though all the people related to Goldman Sachs are going to stand up here and defend this company, but a lot of people will be watching to see if Goldman stands with fabulous fab Tourre through all this or if perhaps he could be set up as a rogue example, we just don't know yet.

PHILLIPS: All right. We'll be tuning in. Keep us posted.

ROMANS: Sure.

PHILLIPS: Christine Romans, thanks so much. We're going to keep a close eye on your money throughout the morning.

Later this hour, President Obama looks at the soaring federal deficit and how it must be reigned in. He's going to call for Democrats and Republicans to work together on that goal.

And next hour, a closer look at this morning's grilling of Goldman Sachs. We're going to talk to a special writer for the Wall Street Journal. What does he expect to come out at today's hearing.

It's the federal government's fault. That's what Arizona senator, John McCain, is now saying anyway about the state's controversial new administration law. He says the Obama administration failed to secure the borders. Homeland security secretary, Janet Napolitano, will likely face some questions on this. She is testifying on Capitol Hill next hour. Not about this, but you know, there'll be questions. Napolitano is the former governor of Arizona.

Then, there's this, a swastika written in refried beans on the state capital. Investigators there right now taking a look into it. Protesters rather have likened the new law to something straight out of Nazi Germany.

Here come about 1600 new jobs riding in with General Motors. GM is going to pump nearly $900 million worth of upgrades into four plants in the U.S. and one in Ontario. These plants will work on smaller engines that fuel instead of guzzling it. One of them is working on key parts for the Chevy Volt, that's the electric car, by the way, coming out this fall. GM has already put $1.5 million in the factories in U.S. and Canada since it claimed out of bankruptcy last July.

So, have you noticed a few more Tauruses and Fusions on the road? Ford is reporting a net profit of $2.1 billion for the first quarter. Watch those Focuses and F-150s go. That's a far cry from a year ago when Ford lost nearly $1.5 billion. The company's sales have gone up in the U.S., Canada, South America, and Europe. Check on the top stories in two minutes.

(COMMERCIAL BREAK)

PHILLIPS: Born in the USA, now on America's most wanted list. The al Qaeda leaders, we just got this video in of Anwar al Awlaki accusing the U.S. of hitting (ph) Muslims against each other by blaming bombings on Islamic militant. We see them before, but this is the first time he's been on an official video by al Qaeda in the Arabian peninsula.

Remember, Manuel Noriega, the former Panamanian strong man has been cooling his heels in a Miami prison for the past two decades. Today, he got a one-way ticket to Paris. No size thing for him, though. He's been extra dieted to stand trial and charges on laundering drug money. Noriega's Miami attorneys are tick tock (ph) of the states department they say, they were never told about this.

Will a Wall Street giant get cut down to size? At the top of the hour, executives from Goldman Sachs will appear before a Senate hearing. Lawmakers want to know if the firm's practices contributed to the nation's financial crises. Goldman Sachs is accused of trying investors into the housing market then betting the firm's money that it was headed toward a meltdown.

So, did you know you were $42,000 in debt? Not for your house or your car, but for your share of the national debt. That will be the focus for President Obama when he speaks a special commission on the deficit in just a few minutes. He'll call for both parties to shelve their differences and unite against the sorry debt. That panel is expected to make recommendations such as higher taxes or fewer benefits for the end of the year, yes, after the mid-term elections are held, of course. Trying to stop the leak. Remote control subs taking a crack at an open line of oil, but too late to stop the slick, heading for the Gulf Coast.

And how often do you hear about people passing by when others are in need? Not Sylvester Wiggins, (ph) he put his life on the line to save strangers. Wiggins drove by the house when it was burning Saturday night. He used his body as a battering ram to break through the iron gate and he brought the family to safety. Later, Wiggins said that God just put him in the right place at the right time.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don't usually go that way. Like I said, God just, that was God. He just put me right there. You know, it wasn't our time to go.

(END VIDEO CLIP)

PHILLIPS: That was Wiggins with his horse, Tyson. He rides for relaxation, by the way, and he has earned it for sure.

And another shout out for you, this one for an eight-year-old boy who definitely went along for the ride. Dillon Earl's grandmother was driving them to church on Sunday when she suffered a seizure. The car was going close to 70 miles an hour, but Dillon moved even faster.

(BEGIN VIDEO CLIP)

DILLON EARL, TOOK THE WHEEL TO SAVE HIS GRANDMOTHER: I reached over and then I was steering the wheel and then when I got to the side of the road, I put on the brakes.

JUSTIN EARL, DILLON'S DAD: He's a great kid, super intelligent, but I don't even know if I in that situation would just think that quickly.

(END VIDEO CLIP)

PHILLIPS: Give dad an assist on the save. He taught Dillon how to steer and brake in case of an emergency.

(COMMERCIAL BREAK)

PHILLIPS: A massive oil slick just a few days away from reaching the Gulf Coast. It comes from the sunken oilrig in the Gulf of Mexico. Take a look at this underwater video, crews using remote controlled submarines to try and shut off the pipeline, around 42,000 gals are spilling out every day.

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DOUG SUTTLES, COO, BP EXPLORATION AND PRODUCTION: Very large pieces of metal. We can't see inside of it, but what we are doing is using the ROBs in the video here to try multiple attempts to try to activate that blowout preventer from the outside. And we'll continue to try that until it's either successful or we bring this well under complete control, either through those activities or a relief well.

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KYRA PHILLIPS, CNN ANCHOR: A massive oil slick just a few days away from reaching the Gulf Coast. It comes from the sunken oil rig in the Gulf of Mexico.

Take a look at this underwater video. Crews using remote controlled submarines to try and shut off the pipeline; around 42,000 gallons are spilling out every day.

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DOUG SUTTLES, COO, BP EXPLORATION AND PRODUCTION: A very large pieces of metal. We can't see inside of it. But what we are doing is using the ROVs (ph) that's in the video here to try multiple attempts to try to activate that blowout preventer from the outside. And we'll continue to try that until it's either successful or we bring this well under complete control, either through those activities or a relief well.

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PHILLIPS: They should know sometime today if they need to go to a plan "B". Digging a relief well could take up to two months to drill. Two months of oil leaking out of the pipe, that's more than 2.5 million gallons.

Well, there's some amazing images coming from NASA of this oil slick.

Rob Marciano has been tracking them for us -- Rob.

ROB MARCIANO, AMS METEOROLOGIST: Hey Kyra, yes, check this out. Some satellite images from NASA's MODIS high-res satellite. And you can see the slick itself. You would think it would -- it might look black. But actually if you think about water on a road or oil on a wet roadway, you got to have that sheen when the sun comes outs. It's actually fairly reflective.

So we'll zoom in and we've got another shot.

Here is the Mississippi Delta, by the way, the Mississippi River kind of comes out. And right now, the out flow of that river is keeping the oil slick offshore at least for now.

So why is actually the oil slick here? Because the sun is reflecting off that oil and giving it kind of a mirrored effect. And here's where the clean water is so to speak and the shores behind it.

All right, let's switch over to the maps and show you where we think this slick is going to go. And generally speaking, the flow out of the Mississippi Delta is away from the Florida beaches. And that's the reason that the beaches have that turquoise blue water across the Florida Panhandle while the water across southern Louisiana through Holly Beach and areas of the west, not quite as blue because you get a lot of the silt from the Mississippi River.

So that's where this slick would typically go. But right now, we've got a pretty strong north wind. So it's keeping this lake offshore. But as we go through it later in the day today and then tomorrow and maybe so over the weekend, obviously, things change in the weather situation. We may start to get more of a southerly flow and that will bring in that slick a little bit closer to shore out towards western parts of Louisiana and eastern parts of Texas.

So we're watching things very carefully. The overall current on a daily basis Kyra, wants to bring that slick at least to the west; to bring it all the way onshore, we would need somewhat of a change in the winds. And that will happen probably in the next 48-60 hours.

So hopefully, by then, we'll have a little bit more of a handle on it. But it's a big slick as you have been reporting on. And it's a tough one to surround and clean up that's for sure -- Kyra.

PHILLIPS: All right, thanks for helping us with the pictures, Rob.

MARCIANO: You bet.

PHILLIPS: Well, another scenario with deadly potential: lighter fluid, matches and two bullies. Another teen lucky he wasn't hurt a lot worse.

And remembering a general and a president: today in history, Ulysses S. Grant was born on this date in 1822. After leading the Union Army to victory in the Civil War, he was elected the 18th President of the United States. He served two terms.

"Good night and good luck," remember those words? April 27th, 1965, the voice of reason passed away. Edward R. Murrow, a hero to many of us, he was just 57 years old.

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EDWARD R. MURROW, BROADCASTING LEGEND: At that time, we said, if the senator believes we have done violence to his words --

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PHILLIPS: Well, back in your day, what made the school bully a bully? Let's say it was a guy. Did he shove kids into a locker? Try to pick fights all the time? Strong arm lunch money, hurl insults and challenge the insulted to do something about it?

All bad, yes, but when did bad bully behavior get so bad that death entered the picture? We'll talk about that coming up.

But first, the President of the United States hoping to crack down the nation's biggest money problems.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: -- speculation that threatened to choke off lending to families and to businesses. And this crisis in turn led to the deepest recession we've known in generations costing millions of Americans their jobs and their homes, closing thousands of businesses and devastating main streets across the country.

And over the past two years this downturn has aggravated an already severe fiscal crisis brought on by decades of bad habits in Washington. As a result, the day I walked into this door, the Oval Office, the deficit stood at $1.3 trillion with projected deficits of $8 trillion over the next ten years. Partly, this was caused by the recession which meant the government was taking in less while demanding -- while demand for assistance for those who'd lost their jobs was far greater.

Another contributor to our deficit has been the rising cost of health care. Each year more tax dollars are devoted to Medicare and Medicaid. But what also made these large deficits possible was that for years folks in Washington deferred politically difficult decisions and avoided telling hard truths about the nature of the problem.

The fact is it's always easier when you're in public life to share the good news, to tell people what they want to hear instead of what they need to know. And as the gentlemen behind me Allen Simpson, and Erskine Bowles can attest, this has been the norm around Washington for a very long time when it comes to our finances.

Over the past year we've had to take emergency measures to prevent the recession from becoming another depression. And at a time when millions of people are out of work, we'll continue to do what it takes to spur job creation while investing in a new foundation for lasting economic growth. But the emergency measures have added about $1 trillion to the deficit over the next ten years.

As a result, even as we take these necessary steps in the short term, we have an obligation to future generations to address our long-term structural deficit, which threaten to hobble our economy and leave our children and grandchildren with a mountain of debt.

That's why I asked Congress to restore the pay-as-you-go rule. This rule says Congress can't spend a dollar on a new tax cut or entitlement program unless it saves a dollar elsewhere. It's what helped lead to the balanced budgets of the 1990s. In fact, it was only by abandoning pay-as-you-go that record surpluses turned into record deficits during the course of a decade.

Next, we've been scouring the budget line by line, identifying more than $20 billion in savings this year alone. We've cut or eliminated scores of outmoded or ineffective programs and begun to reform our bloated contracting system.

We've also successfully challenged the custom in Congress of courting favored contractors by approving weapons systems the Pentagon itself said it doesn't want or need because in these hard times we have to save where we can afford so that we can pay for what we need the same way families do. Finally, I've proposed a freeze in government spending for three years. This won't affect benefits through Medicare, Medicaid or social security, and it will not affect national security including benefits for veterans, but it will affect all other discretionary spending.

My budget ends loopholes and tax giveaways for oil and tax companies and for the wealthiest 2 percent of Americans because we just can't afford them. And I kept my promise to pass a health reform bill without adding a dime to the deficit. In fact, by attacking waste and fraud and promoting better care, reform is expected to bring down our deficits by more than $1 trillion over the next two decades.

But all these steps, while significant, are simply not enough. For even as we rein in waste and ask the Congress to account for every dollar it spends, this alone will not make up for the years in which those in Washington refused to make hard choices and live within their means. And it will not make up for the chronic failure to level with the American people about the cost of the services that they value.

This is going to require people of both parties to come together and take a hard look at the growing gap between what the government spends and what the government raises in revenue, and it will require that we put politics aside, that we think more about the next generation than the next election.

There's simply no other way to do it. That's why I appointed the National Commission on Fiscal Responsibility and Reform, based on a proposal originally presented by a bipartisan group of senators. And today the commission will have its first official meeting.

I am grateful to all of its members, Democrats and Republicans, folks in government and folks from the private sector for participating. I especially want to thank Erskine Bowles and Allen Simpson for chairing the commission. These two men may have different political affiliations but they share a strength of character and the ability to work across party lines and a willingness to tell the hard truths even when it's hard. These qualities will be essential as will the courage they've already shown by taking on this assignment.

Now I've said that it's important that we not restrict the review or the recommendations that this commission comes up with in any way. Everything has to be on the table, and I just met briefly with the commission and said the same thing to them.

Of course, this means that all of you, our friends in the media, will ask me and others once a week or once a day about what we're willing to rule out or rule in when it comes to the recommendations of the commission. That's an old Washington game, and it's one that has made it all but impossible in the past for people to sit down and have an honest discussion about putting our country on a more secure, fiscal footing.

So I want to deliver this message today. We're not playing that game. I'm not going to say what's in. I'm not going to say what's out. I want this commission to be free to do its work. In theory, there are few issues on which there is more vigorous bipartisan agreement than fiscal responsibility. But in practice, this responsibility for the future is often overwhelmed by the politics of the moment. It falls prey to special interest pressures, to the poll of local concerns and to the reality familiar to every single American.

It's a lot easier to spend a dollar than to save one. That's what led to these exploding deficits and that is what will lead to a day of reckoning. But I believe with the help of these gentlemen and this commission we can begin to meet this challenge in a serious and thoughtful way, and I believe we must for the future of our country.

So Allen, Erskine, thank you for your participation. I want to thank all the members of the fiscal commission. We have a serious group in there of Democrats and Republicans, private sector and public sector, people who are sincere about this effort, and I told them that we are serious about it as well.

I think I've shown over the last year that I'm willing to do things even when they're not popular. A lot of the decisions in terms of getting our budget under control may not be popular, but I think the reason that Allen and Erskine took on this assignment is that they were convinced I was serious about it and I will stand with them as they come up with the recommendations.

So thank you very much, everybody.