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NYC Commission Denies Landmark Status; Ordering Your Designer Baby; Sarah Palin's Choice of Words; Future Tax Hikes Forecasted?; Increasingly Better Care for Wounded Soldiers

Aired August 03, 2010 - 10:01   ET


DON LEMON, CNN ANCHOR: All right. It is the top of the hour everyone, and we know it is hot. It is an August meltdown, and much of the nation baking in triple digit temperatures. When the sun beats down like this, it is not just uncomfortable. Really, it is downright dangerous. It is so stifling in the Memphis area today, one man actually died while mowing his lawn and the Tennessee Health Department says the high temperatures certainly played a role.


KEITH MCGOLDRICK, NEIGHBOR: I tried CPR, and I wasn't successful. The paramedics came within probably less than five minutes. I only got about 60 compressions in. He was a good man. He was a man of god.


LEMON: 66-year-old Stuart Evans is the ninth person to die of heat related complications in the area so far this summer.

We turn now to CNN's Rob Marciano, our meteorologist here, tracking the extreme temperatures for us.

Rob, and it's not over yet? More to go?

ROB MARCIANO, AMS METEOROLOGIST: As a matter of fact, today might even be hotter than it has been. I saw you throw some of these numbers up. And I just want to go over them one more time. These are the record highs from yesterday and some of these are just mind boggling, 108 degrees in Wichita. Keep in mind these are measured in the shade, and it don't take into account humidity.

You factor being out in the sun, you factor this humidity numbers, I feel a lot worse on this, for sure. Memphis, 100. Mobile, Alabama, 101. Monroe, Louisiana, everybody getting a piece of this, and we have heat indices and heat warnings that are up for a good chunk of this real estate as well. All these pink highlighted counties in several states, at least a half a dozen states under excessive heat warnings right now.

That means that it will feel like, at times, 110, 115, maybe 118. That is certainly warrants being dangerously hot. All right Where do we expect this stuff to go as far as the neck couple of days? Well, there's a little bit of relief in sight. But what's today? Tuesday? Yes, it's not going to come until probably Friday or even Saturday.

Some showers and thunderstorms rolling through the lower great lakes. But they're not going to spell too much in the way of relief. What is going to is a little bit of Canadian air, maybe just a little bit of dry air pushing some of this well above average temperatures, down into the Gulf Coast and back into the parts of the East Coast, and then we'll get into more average temperatures by Friday and into the weekend.

All right. Let's talk tropical storm, Colin, 40-mile-an-hour winds right now. It's tracking west northwesterly, about 23 miles an hour. So that would take it toward the U.S. but above the Caribbean around or about the weekend. A lot of computer models went to steer it north and that, of course, would be good news. Most of our computer models are keeping the intensities fairly low, maybe even below hurricane strength. That also would be good news but you know how this business of forecasting hurricanes go, Don, it's not always as cut and dry as we would like it to be. So we have to keep an eye on tropical storm Colin going forward.

LEMON: Rob, you spent a lot of time down south lately, in the Gulf of Mexico. You know this time of the year it is hot down there. Thank you, Rob.

It is day 106 of the Gulf oil disaster and that could mark a turning point in shutting down the ruptured well. BP plans to carry out a test that will decide whether it can move ahead with the static kill operation, that is the first phase of a two-step process to permanently seal the well. Let's get the latest now, the very latest from CNN's David Mattingly, joining us now live from New Orleans. David, what do you know?

DAVID MATTINGLY, CNN CORRESPONDENT: Well, Don, that test expected to happen today to tell them whether or not they can go forward with that so-called static kill where they would pump that well full of mud and essentially drown the oil, push it back down into the reservoir and essentially end the threat of this oil.

But right now, we are waiting to find out if they are going forward with that test. It was delayed a day after they found out that there was a leak in the hydraulic valve in the equipment that they have down there, at the bottom of the ocean. So that expected to be worked out and go forward with the test.

And at this point, they are thinking the test is going to come back and will tell them that everything is A-OK. That they can go ahead with this static kill and pump that well full of mud. But right now we're just waiting to hear from Admiral Thad Allen, expecting a press conference a little later this morning, to tell us exactly where we stand.

We know that the admiral is in Houston and he says that's the place he's going to be to oversee the static kill. So he's in position. We are just waiting to see if he's giving the green light. Don.

LEMON: All right. David Mattingly down in New Orleans. David, thank you very much. We'll be following that and we'll be following a developing story also out of New York City where our Allan Chernoff is.

We're going to update you in just a minute on what's happening with the proposed mosque down two blocks, near ground zero. They have taken a vote and Allan Chernoff is going to join us in a bit and tell us what's going on.

In the meantime, the military in Afghanistan, usually focused on fighting the Taliban, forced to change their mission. Thousands stranded because of heavy rain in the region are plucked to safety by remarkable helicopter rescues. We have amazing images for you and reaction from a U.S. military member aboard one of those choppers.

LEMON: Breaking news here on CNN. We have been following this story for you. In Manhattan, where they have proposed a controversial mosque in an Islamic center, a vote has just taken place with the - basically society will. Is it the with the historical society there. It is the buildings commissioner and land marks commission, and we are told by our Allan Chernoff that it was 9-0, this building will not be designated as an historical site, it won't be on the register. So basically, the developer can take the building and do what he wants, whatever he wants within city codes. Let's take a listen to that vote that happened moments ago.


UNIDENTIFIED MALE: Building in Manhattan, tax map, block 126, lot 9, in part be removed from the Landmarks Preservation Commission's calendar. Second?


UNIDENTIFIED MALE: Are all in favor?



I count that vote to be 9-0 in favor of removing this building from the landmarks preservation commission's calendar and conclude the meeting. Thank you all very much.


LEMON: The meeting is over, and, of course, there's been lots of consternation and lots of controversy here pro and con for and against this. Again, this is not over. There's going to be some protests, I'm sure because a lot of people don't want a mosque two blocks away from the former World Trade Center, from ground zero.

Again, the New York City landmarks preservation commission says this building does not have historic landmark status, and, therefore, the developer with the mosque and the Islamic center can do what he or she wants to with this building. Our Allan Chernoff, our senior correspondent, he is down there with the vote at this hearing. He is getting reaction.

It'll be live for you on CNN just moments away. So stay tuned.

Meantime, we're going to moving on now. We're going to talk about what's happening with this drug war. There is a new escalation in Mexico's drug war. Listen.


LEMON: Cartels are bringing more sophisticated weapons into this battle. Suspected drug traffickers, launched an explosive projectile at police in Juarez on Sunday night. This follows the first time use of a car bomb in the city. Last month's attack killed four people. Sunday's blast cause no damage. Hundreds of people have been killed this year in fights rival cartels or cartels and police.

How dangerous are those cartels? A senior FBI agent who works on the border says we think Al Qaeda is bad. But they got nothing on the cartels. The agency is downplaying the quote which appears on an FBI web page. An FBI spokesman says the quote is the opinion of one agent.

Monsoon flooding is hitting parts of Afghanistan, especially in a region where NATO and U.S. forces are heavily involved in a fight against the Taliban. But their safety took back seat to thousands of people who are in desperate need of being rescued from the rising floodwaters.

CNN's Josh Levs here with an incredible story of heroism.

JOSH LEVS, CNN CORRESPONDENT: It is. Amid the horrors that people are facing right there, it is amazing how the Afghan Air Force and some NATO troops pulled off this rescue mission. It took place in Kunar province. It was a very dangerous part of Afghanistan, heavily fortified by the Taliban.

We're going to do Google Earth here. Because I want you all to see where it is. This a region known for surface-to-air missile attacks. It's built with mountains, very mountainous. And what happens is there have been a lot of these surface-to-air attacks.

Now, the monsoon rains caused devastating floods inside this region, and the Afghan Air Force, which is relatively new, still undergoing training, decided to face the risks. They flew in to save people, which is two helicopters. The crew managed to save more than 2,000 people in 33 hours. The terrain is rugged. Very few landing options.

So what happened was, the pilots improvised. One pilot held a wheel on the side of a partially collapsed bridge while hovering to allow stranded Afghans to get on the chopper and another pilot performed a rescue by submerging his aircraft up to the fuselage so people could jump on board and now the story gets even better. U.S. Air Force Lieutenant Colonel Greg Roberts helps trained the Afghan Air Force was on the rescue flights. He says the Taliban were watching every move.

(BEGIN VIDEO CLIP) VOICE OF LT COL. GREG ROBERTS, M-17 ADVISORY SQUADRON CMDR. FOR AFGHAN AIR FORCES: I didn't note any hesitation at all. I was with the Afghans flying right up there. They were aware of the threat. They did not choose to ask for any assistance from the International Security Assistance Force. They knew that they could accomplish the mission, and, in fact, when we came into the area, and the Taliban made their presence known, they continued to do their mission and did it great.

You know, they picked up there 2,000 people who are definitely overcome by the floods, did it right there in full view of the Taliban and we continued on the mission and completed it.


LEVS: Now, the U.S. Army also says that once on board, the rescued Afghans started to give the chopper pilots details, exact locations of the Taliban on the ground which could help them maneuver more safely in and out of the region. And the next part, yes, maybe a little bit shocking offers more proof on just how dangerous this mission was.

Listen to what Colonel Roberts had to say about the possibility of the Afghan Air Force actually picking up Taliban on those rescue missions.


ROBERTS: There is not a doubt in my mind that some of the folks that we picked up were, in fact, Taliban, probably more along the lines of the folks that are looking for some form of employment, and they just can't necessarily find it.


LEVS: So they saved the enemy. They saved the enemy. The military officials say the bravery and determination on the part of the Afghan Air Force was an inspiration. They're also saying that it proves what the Afghan Air Force is capable of, and, in their view, what the Taliban is not capable of.

So, Don, amid all of the horror people are facing in that region with these monsoons, it is pretty amazing to see the risks that these people took to go in and save lives, including the lives, in some cases of the enemy, who would try to shoot them down.

LEMON: All right. Josh Levs, absolutely. We're going to take you across the border now. The Afghan border to Pakistan. Those monsoon rains have caused a crisis. Flooding is being blamed for as many as 1,500 deaths with more bodies expected to be found as the water recedes.

Rescuers are struggling to reach people in remote areas with roads, highways and bridges destroyed. The U.N. says nearly 980,000 people have lost their homes or have been displaced. Water borne disease are also a concern. Forecasters expect more rain to come this week. A U.N. panel is now looking into the deadly Israeli raid on a Turkish led flotilla bound for Gaza with humanitarian supplies. Who could forget these images? Commandoes dropping on to the deck of a boat as part of a raid that left nine people dead.

Activists say they were fired upon without cause, but Israel says its troops were under attack. The panel will review reports from both sides before issuing recommendations on how similar situations can be avoided.

Let's go back now to the breaking news, we're talking about the news that's happening in Manhattan, two blocks away from the proposed site of the New World Trade Center, two blocks away from Ground Zero.

Just moments ago, an important vote. Let's get now to CNN's Allan Chernoff who joins us with reactions. Allan, tell us what happened.

CHERNOFF: That's right. New York's landmarks, preservation commission has voted unanimously against granting landmark status to that building two blocks north of the World Trade Center site. That means the developer can go ahead and knock the building down and create an entirely new structure.

His plan calls for building an Islamic center that would contain a mosque, again, just two blocks north of ground zero. As you know, that has been a very, very contentious issue. The debate continues, right behind me. People pro and con speaking to the media right after the commission concluded its vote. The fact is, however, the commission really could do nothing to prevent an Islamic center, because, even if the commission had voted in favor of landmark status, the developer could still create an Islamic Center right at that site. It's just a matter of whether or not he would have been able to knock down the building.

So now plans can go forward for a structure that maybe 13 stories high or even higher. Nonetheless, another important point that many people have not been aware of, the fact is that building right now contains a prayer space even today. Muslims will be there praying, praying peacefully two blocks north of the World Trade Center site.

LEMON: Hey, Allan, I've got to ask you this. Because you have been gauging reaction there, you know, talking to people, has anyone talked about having a mosque near ground zero might make it less prone to terrorist attacks?

CHERNOFF: You know, that hasn't come up. The people behind this project, and it's called the Cordoba Initiative. They're on the web if people want to take a look. But the people behind it say this is an initiative designed to improve ties between the west and between Muslims. That's the whole idea, they're saying. They're basing this on the YMCA concept of having a community center open to dialogue, open to speakers of all faith. That is what they're saying would be the purpose of this mosque.

Of course, opponents have said this is something that really rankles them, really is something that is very hurtful to families of people lost their lives during the 9/11 attacks.

LEMON: All right. Allan Chernoff standing by with breaking news. Allan, we will get back to you so don't go far. We're going to stick with New York City though and we want to go down to Wall Street.

Take a look at your numbers there. There you see the Dow down with 54 points, behind me on the wall, still trading above 10,000, though. We're going to check on Wall Street. We'll see. By the end of the day, let's hope that it's in the plus territory. We're back in a moment. More news from the CNN NEWSROOM.


LEMON: Many would-be parents say they only have one request that their future child be born healthy, but others are willing to go to great lengths and great expense to choose their baby's gender.

CNN's Dan Rivers looks at the medical tourism of so-called designer babies.


DAN RIVERS, CNN CORRESPONDENT (voice-over): Meet the Maneerat family. The mom Jatuporn, dad (INAUDIBLE) and three beautiful daughters, and now a new baby boy, (INAUDIBLE). All normal except he's a so-called designer baby. His gender picked by his parents and their wish engineered by a fertility doctor. The practice is illegal in most of Europe, the U.K., Australia and China. And even in Thailand, while it's not illegal, it is not recommended by the Royal Tri-College of Obstetricians and Gynecologists.

JATUPORN MANEERAT, MOTHER: She says, we're a Chinese family and we have three girls, so I wanted to get one boy. This is the lab where (INAUDIBLE) was created. Dr. Suwajanakorn uses in-vitro fertilization or IVF techniques to select only male fetuses to implant. Between two and five couples a month come to him for the treatment, most of ethnic Chinese.

DR. SOMCHAI SUWAJANAKORN, FERTILITY DOCTOR: I think because of the law in China, to control the population, so they keep only one baby for the family, and usually by Chinese culture, they want a boy.

RIVERS: Unlike some doctors in Bangkok, Dr. Somchai is strict about who can select the gender of their baby.

SUWAJANAKORN: You have to have enough reason to select it, so we have to ask about the family, about the history, and to see that they have enough reason to have gender selection or not.

RIVERS: For ethnic Chinese families, the reasons for wanting a sun is often cultural.

CHITRA KONUNTAKIET, AUTHOR ON CHINESE CULTURE: We're looking for a son, for a nephew to continue the family name, the clan and maybe more money, more possibility, more fortune. RIVERS (on camera): Choosing the gender of your child is illegal in many countries but here in Thailand, it's not only permissible but it's also relatively cheap. It's becoming a new growth area of medical tourism. People are literally flying into Thailand to choose the sex of their unborn child.

(voice-over): It cost this child's parents around $9,000 and it is why gender selection is fast becoming a boom area of medical tourism. It's more expensive and illegal elsewhere. Couples flying in on baby holidays from China, Australia and Europe. Officially, some 4,000 test tube embryos are created each year in Thailand. Doctors estimate more than 30 percent are chosen for their gender to fulfill the couple's desire to override nature and select the sex of their baby.

Dan Rivers, CNN, Bangkok.


LEMON: All right. Don, the sizzle of summer. It can be more than uncomfortable. It can be downright unsafe. We'll tell you some of the warning signs of extreme heat.



LEMON: Concur, confess, I'm sure this one, too, attest. It is so hot here. You know, it's really sticky. I was sweating last night. I'm sweating now. You're freezing. I'm hot. It's been blistering record heat for millions of Americans and it can lead to some serious health problems. Here's what I want to know from our senior medical correspondent. How do you know when your health is in trouble? Like, maybe I need to drink more water because I am burning up.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT. Right. Water is always a good idea. Pretty much always a good idea. They're pretty much always a good idea, right?

You're support to drink every 15 to 20 minutes and you should even consider drinking a sports drink because all that sweat, there is salt in that sweat. And the sports drink - yes, that's great. Although we are not outside. I should make that point.

But when you are outside in the heat, water and sports drinks. The sports drinks can get rid of the salt that's in your sweat. So that's really important.

Another thing is try not to do anything too strenuous between 10:00 and 2:00. I took a walk at 6:00 in the morning this morning and I was sweating buckets the first three steps out. I mean, it's hot out, don't do anything stupid.

LEMON: How sick can you get?

STARR: You can get really sick. You can get really sick. So let me tell you the signs you need to look for because there are certain signs that are going to happen first that should be a warning sign. you need high tail it out of the heat.

First of all, if you experience muscle pains or spasms, nausea or headache, that's a sign you've had too much. Now if things get really bad, what happens is that heat stroke can occur, the body temperature goes up over 104, confusion, disorientation, and sometimes fainting and then you stop sweating which is even worse than sweating a lot and the skin becomes sort of cold. People make the mistake if they feel cold skin, they think this person is OK. That's not the case.

LEMON: Clammy is not good, either?

COHEN: None of it is good.

LEMON: Certain people, I'm sure vulnerable.

COHEN: Yes, there are some people who are more vulnerable? Infants and children, for example, and also the elderly and obese people and also people who are on certain medications, for example, diuretics, anti-histamines, all of those, you need to be especially with the heat.

LEMON: Stay cool, hydrate and - I can do that right now.

COHEN: Put your feet up. If you start to feel this glow inside, sit down, put your feet up and you know, what's not going to help you? Is a six pack of beer. People are hot. I'm going to get some beer. There's alcohol in there.

LEMON: What these guys are doing.

COHEN: (INAUDIBLE) Not a good idea.

LEMON: Not beer. Not even with the lime?

COHEN: No, not with the lime. No.

LEMON: Margarita?

COHEN: No. The salt won't compensate for the alcohol.

LEMON: This is serious stuff?

COHEN: It really is serious. People have died because of the heat and you need to be careful.

LEMON: Thank you, Elizabeth, appreciate it. Did you hear that? Good advice. Hydrate, hydrate, hydrate. Stay inside.

Wounded soldiers now surviving injuries that years ago may have killed them. When we come back an exclusive behind the scenes look at how U.S. service members are making the journey home.


LEMON: More breaking news now into the CNN NEWSROOM. It is out of Connecticut. Details are still cupping in from a shooting at a beer distribution company where several people have been hurt and at least one person killed. Early police report mentioned multiple fatalities at Hartford Distributors, but for now we know one of three people rushed to a nearby hospital has died, another is in serious condition. People aren't elaborating on any other possible victims or the nature of the shooting. Details to come here on CNN all day.

Remember the TV show M.A.S.H? And for today's American soldier, the prospect of meatball surgery a few miles from a battlefield is a far cry from the new reality. Huge strides in medicine and technology are saving the lives of injured soldiers who in previous wars may not have survived.

Here's CNN's Pentagon correspondent Barbara Starr in part one of her exclusive series, "The Journey Home."


BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): It's before dawn in the trauma bay at Bagram Airbase in Afghanistan. Another soldier wounded in the fighting down south, surgeons, nurses, doing everything they can.


STARR: The journey home starts here. In Vietnam, it could take weeks, but now, wounded can be home in days. CNN was granted exclusive access to see the medical care that makes it possible, and to injured troops, some hours off the front line. In the hospital hallway, army specialist, James Dennis, is being shipped home after being in three attacks in three weeks. He had already been here before. He survived two roadside bomb attacks in the same day and then a couple of days ago --

SPC. JAMES DENNIS, U.S. ARMY: There was indirect fire. I was hit by mortar.

STARR: But still smiling.

DENNIS: I'm good right now. They gave me some medicine.

STARR: In the latest attack, Dennis ordered junior troops under fire to run for safety. He couldn't get away in time.

DENNIS: I didn't even get started running. I guess it knocked me out because I remember pushing myself up off the ground and had all this blood all over me. And then they MEDEVAC me.

STARR: Dennis praises the doctors and nurses.

DENNIS: These people here are awesome. I mean they do their job. I respect these guys a lot.

STARR: Before Dennis is moved to the plane, a last emotional hug from the trauma doc, Captain Joshua Miller. CAPT. JOSHUA MILLER, AIR FORCE: I saw him over there in that wheelchair, and I just took another look at him. I said, man, what are you doing here again? You know, I'm not supposed to see you again, and sure enough, he'd suffered another explosion injury.

STARR (on-camera): The doors have just shut on this air medical evacuation flight here in Bagram, Afghanistan. The wounded have already been loaded. You can see that medical staff is already taking care of them even before we take off. We are about to go on an eight- hour flight back to Germany. These troops are going to Landstuhl Regional Medical Center for further treatment.

STARR (voice-over): Matthew Came, a medic, was on patrol helping our wounded when he was hit.

Your Kevlar didn't protest you? Your vest?

SPC. MATTHEW CAME, U.S. ARMY: It was about one inch right under it. It is right in the bladder (ph).

STARR: Badly wounded, he told his buddies what to do.

CAME: Right away, I just went on to just, you know, talk them through what we need to do and it all went really smoothly. Then a medic from the (INAUDIBLE) went here to help out, and he helped out him (ph) too.

STARR: Now, others are tending to him. He gets relief for his pain. Specialist Came finally under the watchful eye of his nurse. For air evacuation teams easing the pain and devastation can be tough.

CAPT. KATHERINE GARTNER, U.S. AIR FORCE: I've had a couple patients (ph) too were sleeping and just woke up, just couldn't remember what was going on, where they were. And for me, that was the best moment to be there for that patient, to hold their hand and calm them down and let them know I'm here, you're OK, you're going -- and just seeing them relax, OK, I'm good. It's all good.

STARR: For three-time purple heart specialist, Dennis, now on the plane to Germany, it is all good.

You were going from bleeding to hugging your wife and daughters. There's a smile.

DENNIS: It's going to be awesome, you know. When you're near death that close, I mean, I literally thought I was dead when that impact happened. I thought I was dead. But you really don't know what you got until it's almost gone.

UNIDENTIFIED MALE: Prepare to lift. Lift.

STARR: Tomorrow, the next stop -- Germany.


STARR: And Don, you can see the pain and exhaustion and the smiles on some of these very young Military faces. How bad is it right now? Well, last month in July, 572 U.S. troops wounded in action in Afghanistan. That's now running about double what it was just a few months ago. Medical care is saving an awful lot of lives but the violence clearly going up.

Part two, tonight on "THE SITUATION ROOM."

LEMON: I'm so glad you're doing this series, Barbara. Nice work. Thank you so much.

STARR: Thank you.

LEMON: If you pay taxes, which is probably everyone watching except the kiddies, listen up. Tax laws are changing and chances are they're going to affect your bottom line in some way. We'll tell you how to protect your money.


LEMON: The song is happy but there is probably nothing fun about paying taxes. A campaign promise by President Obama could get a big test soon. Federal tax cuts from the Bush era expire at the end of the year. President Obama promised if you earn less than $250,000 a year, you won't see a tax hike.

But our senior correspondent Allan Chernoff says middle class families face one of the largest tax increases in American history.


ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT (voice-over): The Chudyx of Ramsey, New Jersey, like to enjoy their money.

CHRIS CHUDYX, CERTIFIED PUBLIC ACCOUNTANT: We are definitely spenders. We like to have a good time, you know, like to enjoy life.

CHERNOFF: But even though Chris and his wife Dawn have stable jobs, they're preparing to tighten their belts. Chris, an accountant figures he'll soon need an extra $350 a month to pay more federal taxes.

CHUDYX: So where could that come from? Maybe not going out to eat as much. Maybe bringing lunch to work. Also reducing maybe the amount that we could save. Increasing what we save.

CHERNOFF: Brace yourself, there's a very good chance your family also may soon have to confront the same tough choices to find extra money to pay Uncle Sam. Tax rates are scheduled to rise once the year ends. That's because tax cuts that president George W. Bush championed in 2001 and 2003 were put in place only through the end of the decade.

SCOTT HODGE, PRESIDENT, TAX FOUNDATION: If Congress does nothing it could lead to a largest tax increases in American history.

CHERNOFF: President Obama pledged to let taxes rise only on families earning more than $250,000 per year. But as things stand right now, tens of thousands of Americans who earn less are about to get whacked by new higher tax rates.

ROBERT TRAPHAGEN, PARTNER, TRAPHAGEN FINANCIALEMON: If new tax legislation is not implemented there will be a dramatic effect to the middle class.

CHERNOFF: Middle tax rates are supposed to go up by 3 percent. For this Chudyxs who earn just over $175,000, the change will put them into the 31 percent marginal tax bracket, up from 28 percent today.

Also due to change, the tax credit that middle and lower income families get for each child would be cut in half, to a maximum of no more than $500 per child. And taxes would rise on dividends and capital gains, especially heartfelt to retired Americans.

In planning to let taxes rise, President Obama hopes to chop the budget deficit. But if families like the Chudyxs cut back spending by $350 per month, that may hurt the economy. It could derail the economy. And if that happens, some experts argue, it could mean lower overall tax revenues for the Treasury.

Allan Chernoff, CNN, New York.


LEMON: So how much more of your paycheck will be going directly to Uncle Sam? How is your bottom line going to change?

Shawn Tully, senior editor at large for "Fortune" magazine says small business owners, married people, and investors will suffer.

Shawn joins us from New York this morning, to break it down for us.

And Shawn, this is all a big if, right? This could ultimately be the largest tax hike in American history. But if these tax breaks expire in December, how much more will people end up paying in taxes?

SHAWN TULLY, COVERS WALL STREET, BANKING & HEALTHCARE: Well, we know that people will pay about half a trillion dollars more potentially, but the big question is whether these tax increases do hit the middle class because President Obama's pledge is that they only hit people who make over $200,000 if they single returns and $250,000 for families.

The offs are that these tax cuts that were put in place in 2001 and 2003 will be extended to the middle class and that they will apply probably -- although the Republicans are sort of playing hardball about this -- but eventually the smart money is betting that the Obama pledge that they will apply -- the increases will apply to high earners is by far the most likely outcome.

LEMON: OK. All right.

So on the flip side, Shawn, are there are any positives if the tax breaks are eliminated? TULLY: Well it's hard to see any positives here, because what's going happen is, first of all, there is this outside chance that even the middle class will be hit although it's improbable. But you look at upper class earners. Rates are going to go up from 35 percent to almost 40 percent, to 39.6 percent.

There are 750,000 small businesses. They are travel agencies, delis, et cetera, that file individual returns. And those businesses are going to get hit by very, very large tax increases. Now, these businesses today, Don, are very worried about their costs going up. They're facing much higher health care costs under the Obama bill. Now they're facing much higher taxes. And this is half of all business income that's reported is going to be hit by higher tax rates.

The number of businesses is relatively small but the number of -- in terms of dollars that they pay in taxes is literally 50 to 65 percent of the total. They're going to be hit by much higher taxes. We know that they're reluctant to hire people right now. And this will make it worse.

LEMON: So let me ask you this. How do you protect yourself? What about some of the tax shelters? Are there any with this?

TULLY: Well, there are two things that people are apt to do. The first one is that there are tax shelters that the high earners are very sensitive to. They will move a lot of their investments into municipal bonds, which are tax free.

Remember, it's really stunning what happens to the tax on dividends. The tax on dividends when most stocks do pay dividends go from 15 percent up to 39.5 percent. In other words, they're more than doubling. That's an enormous increase. That's going to drive a lot of a lot of this money into the bond market that's tax free. These are bonds that are issued by municipalities, school districts, power companies that are owned by the state, et cetera.

So those bonds are going to be very, very popular, and that's going to reduce taxable receipts. Unfortunately my fear is that tax receipts do not go up, that growth rates go down, small businesses are reluctant to hire, unemployment stays high, and all of these tax rate increases they don't collect more money, which is the whole point.

LEMON: Child tax credits, Shawn?

TULLY: Well the child tax credit is set to be cut from $1,000 to $500. This is really a middle class tax increase because high earners get no benefit from the child tax credit because it begins to be phased out at incomes over $110,000. So it's not really an issue.

But, one of the things I was going to mention - for high earners, at least. It's a big issue for the middle class.

One other issue is that a lot of families in which both spouses are working, husband and wife are both working, one spouse may stop working because of the very, very high taxes on the extra income. And when that happens, you lose a lot of tax revenues.

If both spouses are working, one's a teacher, one's a lawyer, they make $300,000 and they have to hire a nanny to take care of the kids. The teacher may stop working, stop paying taxes, cut the nanny's job, and take care of the kids, right? So you're cutting the labor force, which is one of the great sources of growth and of tax revenues.

LEMON: Shawn Tully. I hope you guys were taking notes. It was good information. A lot of information, but it was good.

Shawn Tully is a senior editor at large for "Fortune" magazine.

We appreciate your expertise, sir.

LEMON: You know, it's not surprising when Sarah Palin attacks President Obama, but eyebrows were lifted she used a certain slang term meant for men's private parts.


LEMON: Let's check your top stories right now on CNN. A major blow for New Yorkers opposed to a mosque being built near the Ground Zero site. The city's Landmark Preservation Commission voted paving the way for the controversial Islamic center.

BP is running a few more tests before executing it's static kill plan to help permanently seal that damaged oil well in the Gulf of Mexico. If it works, they'll follow up with a bottom kill maneuver.

Maricopa County Arizona Sheriff Joe Arpaio may want to watch its step. A Mexican drug cartel is reportedly offering a $1 million bounty for anyone who kills the headline grabbing lawman. Arpaio has been front is center in support Arizona's controversial crackdown on illegal immigrants.

We're back in a moment.


LEMON: That music means this is the time in our show where we lift up a service member who made the ultimate sacrifice in Iraq or Afghanistan. We call the tribute "Home and Away" and we'll tell you how you can be a part of the project.

First we want to tell you about specialist Eric Poelman. He's from Racine, Wisconsin. Eric was killed in a roadside bomb attack in Baghdad in June of 2005. A family friend Lenny Nelson (ph) had those say about Eric.

He was a man who loved his lord, his wife and family and his country. He was brave and proud to serve his country.

Lenny lost his son in Iraq, too, and says he is proud of all who serve our country.

And we are all proud.

If you have a loved one that you'd like us to honor, here's what you should do. Go to, type in your service member's name in the upper right hand search field, and pull up the profile. Sends us your thoughts and your pictures and we'll keep the memory of your hero alive.


LEMON: All right. This is going to be interesting. I saw this actually live. Sarah Palin has taken criticism of the president to locker room levels.

But, as our Jeanne Moos reports she's not the first to go there.


JEANNE MOOS, CNNCORRESPONDENT (voice-over): It takes cojones to do what Sarah Palin did. No, not write another note to herself on her palm on Fox News Sunday --

CHRIS WALLACE, HOST, "FOX NEWS SUNDAY": Can I just ask you, what you have written on your hand?

SARAH PALIN, FORMER GOV. OF ALASKA: $3.8 trillion, next 10 years.

MOOS: No, what took nerve was using that certain word against the president.

PALIN: Jan Brewer has the cojones that our president does not have.

MOOS: The what? Next thing you know, it's on everybody's lips.

UNIDENTIFIED MALE: And he ain't got the cojones to do it as Sarah Palin says.

MOOS: Linguists say it's not a dirty word, just vulgar one.

(on camera): To me, when I saw "cojones," it sounds nice.

(voice-over): And Sarah Palin is not the first to use it.

MADELINE ALBRIGHT, THEN-U.N. AMBASSADOR: This not cojones. This is cowardess.

MOOS: Then-U.N. Ambassador Madeleine Albright was mocking Cuban air force pilots who shot down a civilian plane, piloted by exiles.

ALBRIGHT: It's the only Spanish word I know.

MOOS: Not even amigo? Author Robert Dallek says JFK used cojones in a taped conversation about foreign service staff.

ROBERT DALLEK, PRESIDENTIAL HISTORIAN: They have no cojones. Now these guys in the Military, they have cojones. But they don't have any brains.

MOOS: And Bob Woodward writes that President George Bush used it to praise British Prime Minister Tony Blair.

UNIDENTIFIED MALE: You're a man that got cojones.

MOOS: So does PETA. Mickey Rourke is on a PETA poster saying, have the cojones to fix your dog.

In no time, what Sarah Palin to haul her cojones was on a T-shirt. A blogger suggested Palin can't spell the word. Print that on your T- shirt.

(on camera): Actually, the word is commonly misspelled, C-A, rather than C-O. This means drawers in Spanish, as in chest of drawers.

Linguist and author Geoffrey Nunberg says it's a brilliant word for Sarah Palin to use.

GEOFFREY NUNBERG, LINGUIST, UC BERKELEY: It reinforces the stereotypes about wimpy, wussy, feminine liberals. They take enormous delight in imagining how this sort of thing drives liberals up a wall.

MOOS: Unless it's a supporter praising Hillary Clinton.

UNIDENTIFIED MALE: It has testicular fortitude.

MOOS: And then there was James Carville's earthy analysis of who's tougher, Hillary or Barack Obama. If she gave him one of her cojones they'd both have two.

(on camera): OK, so let me get this straight. She has three, she gives him one, so he has two, right?

(voice-over): Talk about getting all balled up.

Jeanne Moos, CNN, New York.


LEMON: Oh, controversy is just nuts. I can't believe that.

OK. That's it for me. Thanks for watching. Kyra's back soon.

Randi Kaye, good to have you here in Atlanta. Have a great show.