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Housing Report Slams Stocks; Egg Recall Raises Concerns; At Least 33 Killed in Somalia; Big Bucks, Ugly Political Battles; $578 Million High School Opens in LA Amid Teacher Layoffs

Aired August 24, 2010 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: Live from Studio 7 at CNN world headquarters, the big stories for Tuesday, August 24th.

Fired for out-of-context remarks on race. Today Shirley Sherrod gets her one-on-one with the U.S. Agriculture secretary and says no to a new job.

Incumbent Republican senators fighting challengers. On the far right today, it is Primary Day for voters in Arizona, Alaska and three other states.

And a spark for the economy? Toyota is hiring in Mississippi. A new Corolla assembly plant is finally going on line after a two-year recession delay.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It couldn't have come at a better time, a better time for northeast Mississippi. In fact, for the whole state. As you heard, these are great jobs, but they lead to great careers.

(END VIDEO CLIP)

HARRIS: And good morning, everyone. I'm Tony Harris.

Those stories and your comments right here, right now in the CNN NEWSROOM.

On Wall Street, it is all about housing today. Stocks started the day lower in anticipation of the day's existing home sales report. Then at 10:00 a.m., the report came out and the selling on Wall Street accelerated.

Let's bring in Patricia Wu. She's at the New York Stock Exchange with details.

And Patricia, look, first of all, the number was expected to be bad. It turned out to be bad. And the markets are reacting predictably, correct?

PATRICIA WU, CNN BUSINESS CORRESPONDENT: Correct. What wasn't predictable was that the number was so bad. It was a drop of 27 percent. That's nearly double what the estimate was. Most had expected maybe a drop of about 14 percent, so that was the problem, that it was so much worse than expected.

And Tony, I was on the floor when that existing housing sales report came out, and I can tell you that the reaction was immediate. The traders were groaning and sighing. The Dow dropped below 10,000, hitting a session low of down 183 points immediately after that housing report came out.

Now, right now, it has battled its way back. It's down about 77 points, at 10,096.

So, the issue is that not only did it exceed even the worst prediction, it hit the lowest level since record keeping started in 1999. It was also the third straight decline, Tony. So it's a gloomy picture.

And while the National Association of Realtors blames the expiration of the first-time homebuyers tax credit for this, you have to look at the jobs markets as well. That uncertainty, if you don't have a job, your neighbor doesn't have a job, you're worried about keeping your job, all of that uncertainty is not going to make you run out and start looking at homes.

And the traders were telling me that, you know, housing led us out of seven of the last eight recessions. So you can't have a recovery without housing, but you can't have solid housing numbers without those jobs -- Tony.

HARRIS: Well, look, many people have been wondering what happens to housing when you pull some of the stimulus out of the system. And now we're seeing what might happen here.

I'm wondering, does this signal kind of a change in the tide of housing? Could things get worse?

WU: Well, that is a good question. I mean, a lot of the people that I talk to think that housing prices are going to continue to fall.

HARRIS: Yes. Yes.

WU: And while I was down there talking to the traders, if I had a dollar for every one of them that told me, oh, I have a daughter, or I have a niece, or I have a friend who was thinking of buying a house, and they're telling them to hold off. Not to mention realtors who said the same thing, that they think these housing prices have not yet bottomed.

And you have to look at the foreclosures. Those are driving down the prices. And when buyers think that prices are going to keep falling, it sort of becomes a vicious cycle. They're going to hold off, they're not going to buy because they think that the prices haven't bottomed. And then there's less demand and then you have this vicious cycle -- Tony.

HARRIS: Well, let's see where we are. We have got one measure here. Let's see where we are when we get new home sales numbers. That's tomorrow. Am I correct in that?

WU: That's tomorrow, exactly. They are expecting those to sort of be in line. They are not expecting any big surprises there.

HARRIS: OK.

WU: The number that the traders are really waiting for are those initial jobless numbers on Friday.

HARRIS: Yes. So let's keep this in perspective. And then, are you in a position to give us a quick market check? I can't make out the number there.

WU: Absolutely. Sure. The Dow is now down 85, at about 10,089. The Nasdaq down 25. And the S&P down 10, at 10,056.

HARRIS: So we're already bouncing back from session lows, correct?

WU: At 1,056. Yes, we are bouncing back from the lows, absolutely.

HARRIS: OK. So let's kind of keep this in perspective.

Patricia, good to see you. Thank you. See you a little later in the hour.

(NEWSBREAK)

(COMMERCIAL BREAK)

HARRIS: The FDA says -- Elizabeth, you've got a bunch of eggs here, but we're going to get to that in just a moment.

The FDA says it does not expect any more recall of eggs linked to that salmonella outbreak, but this morning the feds are still checking that nation's egg supply. More than half a billion eggs were pulled from store shelves, at least 17 states are affected.

So what should you be looking for to keep your family from getting sick?

Let's bring in Elizabeth Cohen, our senior medical correspondent, with all these eggs.

And you want to start with the eggs here?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Yes, let's start with the eggs, Tony, because I have been getting so many questions, people saying, "How do you know?" When you go buy them, does it help when it says --

HARRIS: Yes. Can we see these eggs? OK. That's a better shot, but I want to make sure that we can see them. All right.

COHEN: For example, this one here says "organic." OK? This one over here says "cage-free."

HARRIS: Right.

COHEN: OK. So the question is, does it help when it says "organic"? Does it help when is says -- that one over there says "cage-free"?

HARRIS: Cage-free.

COHEN: All right.

HARRIS: What does all this mean?

COHEN: Or free-range.

HARRIS: Free-range, exactly.

COHEN: Right. The experts that we've talked to and studies we've read say, no, it doesn't really matter.

HARRIS: It doesn't really matter?

COHEN: Right. What you want to look for is the brand of egg, and if you go on CNN.com, we have a list of all the brands you're not supposed to buy. The free-range, the organic, the vegetarian, that doesn't tell you really whether or not there's salmonella in it.

HARRIS: And these are just, what -- these are just --

COHEN: These are just regular eggs.

HARRIS: OK. These are regular eggs. All right.

Salmonella, how does salmonella get into eggs?

COHEN: All right. This is fascinating and only slightly disgusting.

So, salmonella lives inside hens. It's just there.

HARRIS: It's just there naturally.

COHEN: Yes. Not in all hens, but it some hens.

HARRIS: Naturally occur.

COHEN: Sometimes they're just born with it. And so the hen will just pass it on down to the egg that they lay. So it's not necessarily because they ate something they shouldn't have, or whatever. It is just there.

HARRIS: Yes. OK. So even as the egg looks OK, it may have salmonella?

COHEN: Absolutely. I mean, these eggs --

HARRIS: So these eggs could have --

COHEN: Well, I don't know so much these eggs, but any egg could have salmonella in it. It doesn't matter what it looks like. That's not really the point.

HARRIS: All right. So what do we do? What do we do to protect ourselves? What do we do to protect our families? What can you do?

COHEN: All right. What you do is you go to CNN.com and you look for the list of brands you shouldn't be buying. That's the number one thing you should do.

The number two thing you do is that you cook your eggs thoroughly. And the reason for that is that that will kill the salmonella. So, no runny yokes, no Hollandaise sauce made with raw eggs, none of that.

HARRIS: OK.

Can we switch gears to another story that's making news today?

COHEN: Yes. That has to do with embryos in a different ways.

HARRIS: Yes, exactly. And a federal judge's decision to block expansion of embryonic stem-cell research, as was part of an executive order from the administration last year.

COHEN: Right. The administration last year said the federal government will fund certain embryonic stem-cell research, and that was a huge boost to scientists who had been waiting for that moment for years and years.

Well, now this federal ruling has come down saying, no, you can't use federal money for embryonic stem cells, and scientists were stunned and say, what do we do now? We're making all these advances against blood cancers, against spinal cord industries, against all sorts of things, and now we have to stop doing it the way we're doing it.

HARRIS: Well, is that what it really means, in effect, that you have to stop -- if you're in the process of doing work, do you stop that work now?

COHEN: We are told that because of this federal ruling, that you can't use federally-funded dollars. You can't use federal dollars for your embryonic stem-cell research. You have to think of some other way to pay for it. It doesn't make it illegal. It just means you can't use federal funds on it.

HARRIS: And the administration has a couple of options, either rewrite the rules so it fits the guidelines, or, of course, just to appeal.

COHEN: Appeal that decision, right.

HARRIS: OK. COHEN: But it means more years, more time. Everyone thought this was relatively settled, and it turns out it wasn't.

HARRIS: Elizabeth, appreciate it. How did we do with the eggs? We sort of just figured it out as we were going along here, right? Did we do OK?

COHEN: I think so. I think you got it. I think you got it.

HARRIS: I did my best Carol Merrill here with the eggs and that sort of thing.

All right, Elizabeth. Good to see you.

COHEN: OK, thanks.

HARRIS: Thank you.

Voters have their say in primaries in five states today. We will tell you which incumbents might be out of a job.

We're back in a moment.

(COMMERCIAL BREAK)

HARRIS: An absolute massacre in Somalia. Suicide attackers stormed a hotel in Mogadishu, killing at least 33 people. Several lawmakers among the dead.

Our David McKenzie covering the escalating violence from neighboring Kenya.

And David, it sounds like such a brazen attack. It certainly points out how difficult it is for this government, such that it is, to provide security.

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: That's right, Tony.

I mean, this attack happened just right around the corner from the presidential palace where the president is based, and basically it was two gunmen dressed in government uniforms suspected to be al- Shabaab, the al Qaeda-linked militant group. Two gunmen storming this hotel near the presidential palace, shooting people indiscriminately outside the hotel in the reception area, and then targeting lawmakers who were meeting inside the hotel.

At least six members of parliament have been killed, 31 people murdered by these suspected militants. And two of those killed are the militants themselves. Based on many different reports we have been gathering, they had -- at least one of them had a suicide vest that they detonated when security forces surrounded that hotel.

So, a bloody day in Mogadishu, Tony, that was capping off two days of fighting against the transitional government -- Tony.

HARRIS: All right.

David McKenzie for us.

David, appreciate it. Thank you.

Thanks but no thanks. That is the word this morning from Shirley Sherrod. She is the Agriculture Department employee forced to resign after her comments on race were misconstrued.

As you saw live on CNN last hour with Kyra Phillips, Sherrod announced she has turned down an offer to return to the Agriculture Department.

(BEGIN VIDEO CLIP)

SHIRLEY SHERROD, FORMER GEORGIA DIRECTOR, RURAL DEVELOPMENT, USDA: I enjoyed my work at USDA. As most of you know, I didn't work in government prior to about a year ago now. I only lasted 11 months, but I did enjoy that work and would want to see that work continue. I just don't think at this point, with all that has happened, I can do that either in the new position that was offered or as state director for rural development in Georgia.

(END VIDEO CLIP)

HARRIS: All right. CNN's Brian Todd is following the Sherrod story, and he joins us from USDA headquarters in Washington.

And Brian, did Shirley explain why everything that has happened to her makes it difficult for her and would make it difficult for her to continue at the Agriculture Department?

BRIAN TODD, CNN CORRESPONDENT: Well, she did and she didn't, Tony. She gave that statement that you just aired, and saying that, I don't feel with all that's happened, I can really do that right now. But they didn't really get into the nitty-gritty of exactly why she is turning these two positions down that apparently were offered to her.

She did indicate she wants to take some time off, spend some time with her family, answer mail and kind of just get her thoughts together before possibly coming back maybe as a consultant, is something that they kind of mentioned, at a later date with the U.S. Department of Agriculture, possibly after a report that the department is doing on racism and discrimination involving the department is complete. That report should be out later this year.

So they have opened up the possibility of Shirley Sherrod coming back later this year, maybe in some kind of consultant role, maybe in some kind of role where she didn't have administrative responsibilities and she can maybe make more of a public impact. But it seems to leave some more questions open than they were answers to this whole thing. And there was no real clear answer given.

One of the most extraordinary moments of this very surprising news conference came when I asked Secretary Vilsack about any involvement from the White House in this situation. Shirley Sherrod had said early on that there was pressure from the White House for her to step down. The White House has vehemently denied that, saying they had no involvement in it.

I asked Secretary Vilsack if in the days right before her resignation, when this was all blowing up, if he had any discussion with anyone at the White House. Here's what he had to say.

(BEGIN VIDEO CLIP)

TOM VILSACK, AGRICULTURE SECRETARY: I didn't speak to anyone at the White House. As I said earlier, this was my responsibility, and I had to take full responsibility for it. And I continue to take full responsibility for it. I will take it for as long as I live.

This was -- you know, I pride myself on the work that I do, and I know that I disappointed the president. I disappointed this administration. I disappointed the country. I disappointed Shirley.

I have to live with that.

(END VIDEO CLIP)

TODD: So, the secretary getting somewhat emotional there in his response to the question about any possible White House involvement. Again, the White House has denied that there was any pressure from them for her to step down, but still, it just leaves kind of a lot of unanswered questions. And there are efforts by the Department of Agriculture to kind of move past this and do damage control, Tony. It doesn't look like that's going to be done anytime soon.

HARRIS: Yes. As you mentioned, a lot of questions.

Brian, appreciate it. Thank you.

And you know what? There are a lot of questions. So why don't we take those questions to the lady herself? We'll take a quick break, and when we come back we will talk to Shirley Sherrod.

You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: So, Shirley Sherrod says thanks, but no thanks. Sherrod is the Agriculture Department employee forced to resign after her comments on race were misconstrued. Last hour, she announced she would not return to work at the Agriculture Department.

Shirley Sherrod joining us from Washington .

Shirley, good to see you.

SHERROD: Hi. How are you?

HARRIS: It's been quite a ride for you since, you know, you sat down and you talked to us a couple of weeks ago. I want to know about your life since those early days. But, first of all, I suppose the most pressing question is why did you decide not to accept I guess one of two positions being offered to you with the Agriculture Department?

SHERROD: Well, initially the only position that was being offered was the deputy director for the Office of Outreach and Advocacy. The secretary made it clear today that I could also go back to the Georgia State Office of Rural Development.

When you look at everything that has happened over the last four or five weeks, it makes it very difficult to go back to the position. So I just felt at this time I could do more to try to help advance the issues not as a full-time employee of USDA.

HARRIS: Shirley, I understand why it may be difficult to go back to the old position, but why not take on the challenge of the new position? You would have to explain to all of us what that job would entail.

SHERROD: That's exactly it. It is a new position.

It's a position that was in the farm bill that hadn't been filled. There are still many, many, many questions around that position, and I just felt that taking that position at this time wouldn't exactly be where I should be at this point. It's kind of difficult, because everything that should have happened -- should happen with that position really had not been made very clear.

HARRIS: Yes. Was it a real position, or would you have been taking a job with no real responsibilities, no real voice, a job to be determined, to be defined later?

SHERROD: Oh, it's supposed to be a real position, but when you look at everything that's happened recently, I still had some question in my mind as to whether or not I would be able to really be effective in the position.

HARRIS: When you say, "When you look at what's happened recently," you wonder if you would be able to be effective in that new position, what do you mean by that?

SHERROD: Well, that's when you look at what's happened to me. What happened to me at USDA, I really had some question about whether or not I could be effective. I know that the secretary talked about putting things in place so that what happened to me would not happen to others in the future, but it happened.

HARRIS: OK. Now, Shirley, we've talked about this, and so there's no need to mince words with me. This sounds like it came down to faith, trust and confidence that this would be a real position.

Am I close here?

SHERROD: Well, let's just say that I'm sure the secretary was sincere with the offer. I believed the secretary would do all that he could to assist me in the position. But the secretary is not the only person you deal with, as we saw what happened to me.

HARRIS: What continues to happen to you? What do you think of the firestorm around, you know, all of the events that happened to you in the weeks since we had our first conversation? What's your 30,000- foot view of what's happened to you?

SHERROD: Well, I know that people were quick to judge. Hopefully that won't happen again with others in the future.

I'm hoping that because of all that I went through, all that I continue to deal with, at least in the future, people will think first, give some opportunity to look before quickly and hastily making a decision. A decision that had the impact that, you know, the decision about me. Had they looked, had they taken the time to at least do what I was asking, and that was look at the whole message, then we wouldn't be sitting here with this conversation today.

HARRIS: You know, there are still members of the media who continue to this day to paint you as a racist. What's your view of that?

SHERROD: You know, if I'm a racist, I'd really like to know what they call the others. I spent my whole life working against racism.

You know, all they have to do is look at what I've done. Look at what I stand for. Look at what I do, and if I'm a racist, someone please explain to me what a racist is.

HARRIS: Take us in the room for today's meeting. Set that scene for us with Secretary Vilsack. Who was in the room and how did the meeting get started? What was said?

SHERROD: Well when I initially went into the meeting with him, two USDA employees were there. They were African-American.

We discussed initially the lawsuit, the black farmers lawsuit and what is happening with that in terms of the fact that even to this day it's in the hands of the Senate. Black farmers, those farmers who were left out in what we call Pickford One (ph), have not still received justice, and still waiting to at least receive the compensation that has been promised them. We also talked about the other lawsuits briefly, with the Hispanics, with women, and with Native-Americans.

HARRIS: Can I stop you for a second there, Shirley? I've got to tell you that as I listen to that answer there, it seems to me that you could have in this new position, sure, not well formed or defined. It sounds to me as though in that position, you might have been a strong advocate to push for settlement of these lawsuits and to get the money into the hands of the farmers.

SHERROD: You know, that's a tall order for one person. And I do not think I would have had that kind of impact.

I can talk about it. I can -- if that's possible at all, I should be able to speak up about that as we move forward. But I don't think I had that kind of power to try to assure or try to deal with a Senate that stalled on it. So supposedly that's the only thing standing in the way of getting the money, getting the vote to move forward with it.

HARRIS: OK. So, I interrupted you. So walk me through the rest of the meeting. At one point, the secretary comes in. And pick it up from there.

SHERROD: We also talked about the work I was doing in Georgia. You know, it's interesting that in all of this, no one asked me about the work I was doing in Georgia with rural development.

We talked about that some. I actually talked to him about that about three weeks ago, and told him about an initiative that I had started targeting the nine poorest counties in the state and how I was also getting other federal and state agencies to work together to take out programs into those nine counties. I talked about other issues that minorities face working in the agency. We had a very good conversation about that.

HARRIS: Tone and tenor of the meeting. Did you get another apologies from the secretary?

SHERROD: Yes, he's done that over and over. And, you know, my message to him was, you know, we need to move forward. It happened. We can't take it back. The whole world knows that it happened. If we can make it work from this point, if we can work together on changes from this point, then that's what we need to do.

HARRIS: Have you had another conversation with the president?

SHERROD: No, I haven't.

HARRIS: Share with everyone watching us a little bit -- who may have missed that and the reporting on that conversation -- what the president said to you.

SHERROD: Well, the president assured me that the offer from Secretary Vilsack was genuine and I think he was hoping that I would seriously consider the offer. I assured him that he -- that I fully support him, that I consider him my president and want to do all that I can to help him during his administration.

I also told him that there are some things that I would love to have him come to southwest Georgia, let me help him to understand some of the issues that those of us on the ground face on a daily basis. And I -- you know, I definitely invited him to come. He didn't say he would come, but that invitation is definitely out there. Any time he's willing to come, I would like for him to sort of understand what people in the rural areas really deal with.

HARRIS: Yes. Hey, Shirley, did you get an opportunity today to talk to Cheryl Cook? As I recall, she was the Ag Department employee -- I know she's got a bigger the title than that - who was on the phone with you, asking for your resignation.

Did you get an opportunity to talk to her? Have you since all this happened?

SHERROD: No, I did not see Cheryl Cook today. And she has not called me and I have not attempted to call her again.

HARRIS: Is that a conversation you'd like to have or are you just moving on?

SHERROD: I just need to move on at this point. I don't see any good that would come from having a conversation with Cheryl.

HARRIS: How's your life been as kind of this media sensation?

SHERROD: Oh, my goodness. Well, I've been so happy about the outpouring of support that I've received from around the country. I get many cards and letters and e-mail messages on a daily basis.

I've also -- I'm encouraged that there are people who want to seriously talk about the racism that exists in this country to see if we can try to deal with it and move forward. If I can help promote that kind of discussion in the future it's something I would really like to do.

I would like to see us once and for all deal with racism. Deal with trying to see how we, as the many different ethnic groups in this country, how we can figure out how to live together here. It's a great country. Let's make it even greater. Let's figure out how to get along.

HARRIS: What are you going to do next? Are you going to have some kind of role, consultant's role with the Department of Agriculture?

SHERROD: I offered to be able to do that and there is a report that's being prepared by a group that the secretary hired earlier this year. They're looking for the results of that study to be released sometime soon. I'd like to look at what they have discovered and what they think can happen from the future. I'd definitely like to play a role in helping to implement whatever it is they have come up with.

HARRIS: OK. Two more questions. Beyond that, whatever that role is, however it develops, what do you want to do between now and then? Now and the next -- what do you want to do?

SHERROD: Well, I've had many, many people from around the country asking me to come and speak. I would love to be able to reach out to many of them.

I would also like to be able to find people in whatever -- wherever they live, who communities that are really seriously trying to deal with the issue of racism and highlight those. We hear the bad. I think we need to hear the good that's happening out there. Maybe it will inspire others to begin working together and if we could get that movement going, maybe changes will happen in this country.

HARRIS: You -- finally, are you angry, bitter, ticked off?

SHERROD: You know, I can't even get angry. I wish I was an individual who could get angry is stay angry for a while. I guess if you could, you would have seen a different Shirley Sherrod throughout this.

But I can't be angry. If you're angry, you can't think straight. You can't move forward. You're stuck at a point. I'm at a point where I feel we need to move on. Let's get out there and make some of the good changes we need to make in this country. We can't do it if we're angry.

HARRIS: Shirley, great to see you again. Great to talk to you again. We'll visit soon I'm sure.

Thanks, Shirley.

SHERROD: OK. Thank you.

HARRIS: And still to come. The Military meets President Obama's troop level target in Iraq a week early. We're back in a moment.

(COMMERCIAL BREAK)

HARRIS: A new chapter in Iraq today. The Military says the number of U.S. troops on the ground there is now below 50,000. Commanders reached President Obama's troop goal a full week before the deadline.

Here's word a few minutes ago from the White House briefing on Martha's Vineyard.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, DEPUTY NATIONAL SECURITY ADVISOR FOR COUNTERTERRORISM: We can anticipate that al Qaeda and Iraq will argue they have been successful but they are wrong. We are reducing our footprint in Iraq under our terms and through a transition to over 600,000 Iraqi security forces who have proven up to the task.

(END VIDEO CLIP)

CNN's Arwa Damon in Iraq now.

Arwa, great to see you. Talk about the new role for U.S. troops in Iraq.

ARWA DAMON, CNN CORRESPONDENT: Well, Tony, come September 1st, Operation Iraqi Freedom will have come to an end and Operation New Dawn is going to begin. It is officially being called a noncombat mission. It will involve U.S. troops in an advise and assist capacity.

However, this does not mean that the war in Iraq has somehow miraculously come to an end or someone has managed to push a button that is going to allow peace and prosperity to thrive here. Make no mistake. When those 50,000 U.S. troops leave their bases, in their advise and assist capacity, they still will be wearing their full military gear, their weapons will be on red and they will still very much be on high alert because at the end of the day this is still a very dangerous war zone. So no matter what you call them, they are still U.S. combat units, Tony.

HARRIS: And Arwa, I know it remains a concern as to when a new Iraqi government will take shape, take form.

Is there work being done on that front?

DAMON: There's a lot of work being done, Tony. There's a lot of talk amongst the various leaders. There's a political block, however there is still no conclusion.

And the issue is that politics here goes side on side with the violence. And the political leaders are not just trying to form a government that is going to be acceptable to the various Iraqi factions, some of whom are violent, some of whom are not. They also have to form a government that is going to be acceptable to Iraq's neighbors. Because at the end of the day countries like Iran, Syria, Saudi Arabia, do still play a significant role here.

So in trying to put this government together, the Iraqis have to be careful because it is going to directly impact how much influence Iraq's neighbors actually have here and how much internal strife there is. So there's a lot of concern amongst some senior Iraqi politicians and amongst some Iraqi civilians themselves, that the U.S. has drawn down to this number of 50,000 at a time there is so much political uncertainty that could potentially lead to more violence.

HARRIS: All right. CNN's Arwa Damon for us in Baghdad.

Arwa, great to see you. Thank you.

Quickly now, let's get to Rob Marciano in the Severe Weather Center. And Rob is talking Danielle intensifying.

ROB MARCIANO, AMS METEOROLOGIST: Was. Now it has stepped back a little bit. So that's good news.

A couple things of good news here. One, it has ratcheted down to a Category 1 storm, now at 80 miles an hour with sustained winds. You can see it here, we saw this the past couple of hours, the cloud canopy, the signature from satellite view, really starting to collapse just a little bit so that rapid intensification has really come to a quick halt, at least for now.

So newly updated forecast from the National Hurricane Center looking like this. Does not bring it a Category 3 strength like it did earlier today, but nonetheless keeps it at a Category 1 or 2 for the next four to five days, and has the recurvature out in the ocean making it an official storm (ph), probably won't even affect Bermuda. So, good news there.

Wish we had this kind of news back in 18 years ago when Hurricane Andrew slammed into south Florida, a Category 5 storm, a second to highest amount of losses as far as dollars and damages go for hurricanes. And we had 26 fatalities there. So that is a day to remember. Also on this day five years ago, tropical depression number 12 was named Tropical Storm Katrina, which the next day slammed into Florida, as well with a Category 1 status.

(WEATHER REPORT)

HARRIS: We are bringing you, of course, news from around the world, we're also watching what's hot online. Marie Ines Ferre is surfing the web.

Marie, good morning.

MARIE INES FERRE, CNN CORRESPONDENT: Good morning, Tony. Yes and this is some sad news. Actor/Comedian Martin Short's wife has died. The cause of her death isn't known yet or hasn't been revealed yet. Now the couple was married for 30 years.

You're watching CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Getting a bit of breaking news. Just into CNN, we're getting word that a plane carrying 96 passengers crashed in northeast China Tuesday night, and that news coming to us from an airline company source, and the state run news agency.

No additional information. We have no idea of fatales, casuals at this point. We don't even have a map to identify the location at this time. Just the news that a plane carrying 96 passengers has crashed in northeast China. We will get additional information and bring it to you as we get it.

A big days for voters today. Primaries across the country could have a huge impact on the fall election. Josh is here to talk us through it -- Josh.

JOSH LEVS, CNN CORRESPONDENT: Yes, Tony, some of these really are big. You know, we keep poking ahead to November for the big midterm elections, but the fact is there are some major changes happening in politics in the U.S. right now, and some of playing out pretty big time today. You have big money challenges to some veteran politicians who were once thought safe, including this guy right here, perhaps the best known republican in the entire Senate, Senator John McCain.

In Arizona, former Congressman J.D. Hayworth took on the former presidential candidate in the GOP primary there. Now McCain has been forced to spend -- and listen to this figure -- $20 million on this campaign. And part of what's interesting here, he was driven to the right on some issues. Hayworth calls him cynical and a shameless panderer to the left. McCain's camp then responds with that Hayworth is going down with little dignity. It is ugly.

It's not a lot prettier over here in Florida, where you have Representative Kendrick Meek who seemed to safely have the democratic nomination locked up until Jeff Greene, a billionaire real estate investor, he actually made a fortune betting against the housing market, decided to fund his own bid. Attacks have been flying in that race, and it's not the only hot race in Florida today.

There's a big primary there in the gubernatorial race between two figures, and it's Attorney General Bill McCollum and someone that viewers of our show, Tony, know pretty well, Rick Scott. You remember former health care executive, I spoke with him on this show about some of his assertions on health care reform. People watching that race.

And the other big rice to know about today is up in Alaska. This is Senator Lisa Murkowski, the incumbent republican Senator, she's been challenged by Joe Miller, an attorney who has the support of the Tea Party movement and former Alaska Governor Sarah Palin. So can the Tea Party and Sarah Palin help unseat this incumbent in Alaska? A lot of people, including us, Tony, watching that.

HARRIS: How can folks watching us keep track of all these races?

LEVS: Yes, it's a lot, isn't it? I'm going to explain it so they don't have to memorize everything I just told them. So check this out, this is really cool. This is from CNNpolitics.com and it's a map that talks you through all the races in had America.

In fact, there's a timeline in it, and I just clicked on today and it automatically highlights for you the races that are going on today on this date. And then anytime, you can just click on any of those and it will get you more information. That's not working for me right now.

I'll show you this, we also have a story that talks you through it. We're saying, "Big Bucks, Ugly Battles Dominate Tuesday's Primaries."

And one more thing I want to mention. Race today in Vermont, we actually link you to this from BurlingtonFreePress.com. This is an interesting story because you have a whole mess of democrats who are pushing to get that open slot in the primary there.

So a lot of races to follow, and all of it wrapped up for you -- CNNpolitics.com.

HARRIS: Thank you, Josh.

LEVS: You got it.

HARRIS: Thirty-three trapped miners belt out the Chilean national anthem from about half a mile underground. Isn't this amazing? It is their first verbal contact with the outside world in weeks. A live report from the scene next hour.

Plus, cell phones becoming a new teaching tool. Find out how schools are using your child's favorite pastime to their advantage. That is live next hour right here in the CNN NEWSROOM.

(COMMERCIAL BREAK) HARRIS: How about this? The nation's most expensive public school opens next month in Los Angeles. The $578 million facility is being called "The Taj Mahal of Schools." With plush carpeting, red velvet seats in the auditorium and state of the art swimming pool, officials say it was in the works before the economy tanked and was paid for with voter approved bonds, but it opens during a time of teacher layoffs and education cutbacks.

(BEGIN VIDEO CLIP)

BEN AUSTIN, BOARD OF EDUCATION: These kids are going to school in a Taj Mahal, but it's going to be run by the same people who brought us a 50 percent dropout rate.

RAMON CORTINES, SUPERINTENDENT: I don't look at this as a school for today. I look at this as a school for the next 150 years.

(END VIDEO CLIP)

HARRIS: OK, the school was built on the site of the Ambassador Hotel where Robert Kennedy was assassinated.

Tune in to CNN NEWSROOM all next week for a special series on education. "Fix On Our Schools" will focus on success.

And we want you to join the conversation, of course. Tell us about the small things that are making a big difference in your school. Parents and teachers, tell us what you think it will take to fix our schools. You can, of course, contact us through Facebook and Twitter, or on our blog page. And you know the address, right? CNN.com/Tony.

We're back in a moment.

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HARRIS: Got to tell you, the people of Blue Springs, Mississippi are pretty desperate. With unemployment at about 12 percent and the median income at $33,000, they are very excited about this next story.

Here it is, it is the moment countless Mississippians have been waiting for -- a Toyota plant in Blue Springs hiring 2,000 workers. The plant had been sitting idle for two years because of the weak economy, now the automaker is looking to fill production maintenance and white color positions. The plant is scheduled to open in the fall of 2011.

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GOV. HALEY BARBOUR (R), MISSISSIPPI: It couldn't have come at a better time, a better time for northeast Mississippi, in fact, for the whole state.

And as you heard, these are great jobs, but they lead to great careers. It's not a job for the next year or two, it's the opportunity for a career for life for you and then for future generations of Mississippians.

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