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Grand Jury Indicts John Edwards; Economic Recovery Stalling? May Jobs Reports Disappointing; Moody's Speculates on Lowering U.S. Credit Rating; Casey Anthony Trial Continues; Republican Presidential Hopefuls to Have Debate; Events of Home Invasion Caught on 911 Call

Aired June 03, 2011 - 15:00   ET

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

BROOKE BALDWIN, CNN ANCHOR: Have a nice weekend to you. Thank you, Randi.

And hello, everyone. I'm Brooke Baldwin.

Want to begin this hour here with dramatic developments against John Edwards, the former senator of North Carolina, who once had his sights set on the White House. He is still inside of this courthouse in Winston-Salem, North Carolina.

In fact, we are waiting. Let's show that live picture of the podium, if we can, guys. You can see it in the bottom right-hand corner of your screen. We are expecting John Edwards, along with his defense attorney, to walk in front of a crowd of reporters. And we will bring it to you live as soon as we see it.

But I do know my pal Joe Johns, he has been out there off and on this week covering this story. He has literally just walked outside of that courtroom.

And, Joe, first, just talk -- talk me through what you have just experienced inside the courtroom. You saw Edwards, himself, in front of that magistrate. How did he appear? What did he say? And did you see his daughter with him as well?

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: I didn't see his daughter. And it is funny.

You know, I have covered John Edwards for a long time and I have got to tell you it looked like the exact same John Edwards, not a hair out of place. And I know his lawyer, Greg Craig. I have known -- I have seen him around town for, what, 15 or so years. He looks like he has aged immensely, gray hair, but somehow or other, John Edwards looked like the guy who was running around in the 2008 campaign.

His lawyer, Greg Craig, basically entered a plea of not guilty on his behalf on all six of the charges. Edwards had to answer a few question from the court mostly about setting bail. And it appeared as I walked out of the courtroom to come down and call you, Brooke, that the judge was about to impose one sort of unique condition, I think, beyond the things like, you know, we are going to take your passport away for a while and tell you not the leave the country.

BALDWIN: Yes.

JOHNS: But there was one unique condition that he imposed. And that was that John Edwards should stay away from Rachel "Bunny" Mellon, who is the philanthropist from Virginia who had apparently allegedly or apparently on the record delivered, you know, hundreds of thousands of dollars to him and whose name is sort of tied up in this case.

She is one of the two donors who gave him money --

BALDWIN: Right.

JOHNS: -- that the Justice Department now says were campaign contributions, but which the Edwards' defense team disputes.

And the Edwards' defense team essentially is saying this was money given to him for personal reasons, those personal reasons being keeping information about his relationship with Rielle Hunter from public view, so that wife Elizabeth, who was dying of cancer, wouldn't learn of it. So, apparently, Edwards is being told to --

BALDWIN: Stay away from Rachel "Bunny" Mellon, by the way, is 100 years of age, and also the other donor here at the center of all this, Fred Baron, who is now deceased.

Did we just lose Joe, guys? Yes. That is a yes. OK. Hopefully, we will be able to get Joe back up. He can walk me through some of these counts.

Here is what I know. I have the indictment. I read the indictment today. He was indicted this morning by a grand jury in Raleigh, six counts Joe mentioned. Let me just be more specific with you, four involving illegal payments, one involving conspiracy, one involving false statements.

Also, just a reminder, stand by. We are expecting to see John Edwards any moment now in front of that -- in front of members of the media. They are camped out in Winston-Salem. So wait for that.

Meantime, this whole case hinges, as Joe was alluding to, on whether Edwards broke campaign finance laws to hide his relationship with his mistress/campaign videographer Rielle Hunter.

In fact, Joe, I understand we have you back on the line. We are looking at some of these pictures here of Rielle Hunter and this child that ultimately Edwards admitted to fathering.

Talk me -- talk to me a little bit more about specifically these counts. I had mentioned the six counts. What is it he is facing? And tell me more a little bit about his defense attorney, pretty high- power, high-profile guy.

JOHNS: Yes, very high-profile guy. Greg Craig was involved in defending President Clinton during the impeachment, and, actually, I think worked -- White House counsel for President Obama. So he is one of the most high-powered lawyers in Washington that you can get. Now, as to the counts, the first count is a conspiracy count. And that is, you know, conspiracy to break the law with regard to campaign finance funds. And then there are a number of counts in there having to do with illegal contributions. And then there's also a false statements count, all of this relating to the government's theory that Edwards disclosed or hid or tricked the government by not giving out information about the nature of these campaign contributions, because there are limits as to what you can -- that you -- as to what you can give a candidate who is running for president.

Just so you know, it appears to me that we are getting pretty close to the moment when John Edwards and his lawyer walk out of here, but they may still be in there for a minute or two. He has five lawyers.

(CROSSTALK)

JOHNS: Yes, go ahead.

BALDWIN: He has five lawyers.

Joe, just, if you can, describe the scene. I can only imagine the helicopters above the throngs of media covering the spectacle. Look at this. We're looking at live aerial pictures. Look at the cameras. I can't even count them here on television. It is a massive presence. Describe it for me. You are in the thick of it.

JOHNS: Yes. Yes. There's been a lot of the news media interest in frankly from all over the world.

And the other thing you have to realize is that there are a number of people like myself who actually started out in Raleigh, North Carolina, today, and then found out after the indictment was handed up that the docket had been set up right here in Winston-Salem. That's about an hour and 45 minutes away in the Middle District of North Carolina.

So, there are some people who actually started the day early, jumped on the road, and drove down here and sort of added to the throng, because, you know, you have to think about this. And why is that? It is because, number one, you have a story that has for so long been a tabloid sensation in the United States because of the sort of tawdry and sordid nature of the details.

Then you have a political story of really some import, because this was a man who ran for president of the United States and was also a United States senator. Then you have, you know, the legal implications of it. It is just not clear at all that the prosecution has a cut-and-dry case, if you will, to -- you know, to send John Edwards off to the pokey because there are a lot of people who say this is kind of a novel interpretation.

And you look at what Greg Craig said, you know, before he went into court. He called it an unprecedented prosecution by the United States government.

BALDWIN: Joe Johns, let me hop in here. Stand by for me.

Want to remind all of you as we have been tracking this whole live picture -- it's not there right now, but the bottom right-hand corner of your screen -- here we go again, live pictures -- we are expecting to hear from the former North Carolina Senator, former presidential hopeful John Edwards, so keep your eye to the screen.

But let me just continue and tell you this. Prosecutors have accused Edwards of using campaign donations to make payments to his videographer, mistress, Rielle Hunter. Now, Edwards has admitted to having an affair with her while his wife, Elizabeth Edwards, battled cancer. It was a battle she lost last December.

But during that affair, Edwards fathered father a child with Hunter. And at first he denied that he was father. And one of the rare appearances made on television was with Oprah. Watch.

(BEGIN VIDEO CLIP)

OPRAH WINFREY, HOST, "THE OPRAH WINFREY SHOW": Does he see Quinn regularly?

RIELLE HUNTER, FORMER MISTRESS OF JOHN EDWARDS: Yes. Yes.

WINFREY: Does he know you're doing this interview?

HUNTER: He does.

WINFREY: How does he feel about that?

HUNTER: He didn't think it was a great idea, but he supports me if I feel like in my heart I need to do it.

WINFREY: Do you still love him?

HUNTER: Oh, very much.

WINFREY: Does he still love you?

HUNTER: I believe he does. You would have to ask him, but in my experience of him, is yes.

WINFREY: Has he ever told you that he loved you?

HUNTER: Oh, yes. Yes. It's my experience and -- that he loves me.

WINFREY: Do you trust him?

HUNTER: Very much.

(END VIDEO CLIP)

BALDWIN: Edwards' attorney says the money given to Edwards to keep his affair a secret by two political backers was a gift and a private matter. Let me talk the legalities of this whole case. I want to bring in Sunny Hostin. She is live for me in New York.

And, Sunny, there is a little known statute that serves as the foundation of the government's case here. Explain to me what the Harvey statute is.

SUNNY HOSTIN, CNN LEGAL ANALYST: Yes, it is actually an advisory opinion done by the FEC, which is the Federal Election Commission.

And in that case, it was a June 2000 letter, an advisory opinion, and, interestingly enough, the founder of Adam & Eve, the sex product company, his name is Phillip Harvey -- and he wanted to give about $10,000 to federal candidates.

And so he asked for guidance, advice from the FEC. The FEC came back said, actually, you can give some personal gifts if you would have given them if the person wasn't a federal candidate.

Another thing that they said was it allows for gifts of a personal nature, but only if they are customary, only if you have given them to this person all the time. And so the government is saying, well, this is very different, what happened here with John Edwards.

Would Bunny Mellon have given him over $700,000 had he not been running for the presidency? And so that really is the ground that the government is standing on. The reason that the defense I think is saying this is unprecedented is because it is not a statute, because it's not black-letter law; it is just an advisory opinion.

And so, it is too soon, of course, to tell whether or not this opinion will play a large part in the government's case, but I suspect this is what they are hinging it on.

BALDWIN: Sunny, stand by, because I do have questions about plea discussions vs. ultimately going to trial and what could happen beyond that.

Stand by.

I do want to bring Joe Johns back in, because, Joe, as you were explaining, you know, he has, what, a team of five attorneys led by Greg Craig, who represented President Bill Clinton during the impeachment trial. And he spoke today. What did he say?

JOHNS: Well, he basically made clear to the media that John Edwards was going to plead not guilty, which he did.

And by the way, just found out through our people who stayed in the courtroom when I ran out to talk to you that John Edwards was released on his own recognizance. So they didn't have to set any bail or anything and he's free to leave.

(CROSSTALK)

BALDWIN: So, will he be speaking?

JOHNS: Yes. That's what we were told. We are told that he is going to come out and make a brief statement. We were told that he would be with his older daughter, Cate --

BALDWIN: Yes.

JOHNS: -- and that he would not take any questions, which would certainly be customary.

And, you know, and I guess there is always a couple of views on that on the people who are doing media strategy for big high-profile cases like this. One of them is you make sure your person doesn't look like he's afraid to step in front of the cameras. And there is always that hope that if, in a situation like this, the defendant comes out and talks, there won't be so many people beating around in his bushes trying to get an interview at a later stage.

BALDWIN: Well, Joe Johns, hold that thought for me, as we look at these live pictures, as really we are all waiting to see and hear from former Senator John Edwards. Hold that thought. I also want to hear from his lead defense attorney.

Got to take a quick break -- more live coverage right after this.

(COMMERCIAL BREAK)

BALDWIN: Want to take you back to live breaking news coverage here of John Edwards out of Winston-Salem, North Carolina. This whole thing started this morning in Raleigh, North Carolina, where a Raleigh grand jury indicted him this morning, six different counts here, six counts on charges he violated campaign finance laws when he was running for president back in 2008.

I have got Joe Johns, who is in the thick of this scene, again, live pictures right outside this court in Winston-Salem. Also have Sunny Hostin to talk the legal angle for me in New York.

But, Joe, let's go back to you. And, if you can, let's just pick up on you left off with his lead defense attorney, Greg Craig. What did he say today?

JOHNS: OK. Well, he came before the cameras just very briefly. It was another one of those situations where he gave us just a little taste of what he is thinking about the case.

So rather than just sort of try to shorthand it for you, why don't we just listen? Because we have the sound bite cued up, I think.

BALDWIN: Let's listen.

(CROSSTALK)

(BEGIN VIDEO CLIP) GREG CRAIG, ATTORNEY FOR JOHN EDWARDS: No one has ever been charged, either civilly or criminally, with the claims that have been brought against Senator Edwards today. This is an unprecedented prosecution, much less an unprecedented civil case.

No one would have known or should have known or could have been expected to know that these payments would be treated or should be considered as campaign contributions. And there is no way that Senator Edwards knew that fact either.

(END VIDEO CLIP)

JOHNS: So, you know the knowledge thing is just what is so very important, the idea that you really can't commit a crime without having knowledge of committing it.

So, I mean, basically, the contention seems to be if you read between the lines is, look, there was no crime, so there can be no conspiracy, because there was no knowledge. And -- and that's going to be their argument. And we will see how they refine it in the days and weeks to come.

BALDWIN: Joe, stand by.

Again, just a reminder to our viewers, we are staying on this live picture because we are waiting. We expect to hear from John Edwards, himself. As Joe was just reporting, there was no -- no bail set.

Essentially, the judge said he is free to leave. But let me read you a couple of conditions. And this is what I found interesting.

And, Sunny Hostin, pay attention because I want you to react to this. Here is what I have from CNN's Raelyn Johnson. She says Edwards has been released on his own recognizance, but he has to stay in the Lower 48, stay away from one of the donors here, Rachel "Bunny" Mellon, surrender his passport, Sunny Hostin, surrender his passport.

HOSTIN: Yes.

BALDWIN: Is he a flight risk?

HOSTIN: Well, they must think he is, if that is one of the conditions, certainly, of his release.

I think what is also really fascinating, Brooke, is that he cannot speak to Bunny Mellon. They are supposedly good friends, but apparently then they think that she is going to be a witness. Remember, she is 100 years old. So I wonder if they are going to try to preserve her potential testimony and try to depose her, audiotape, videotape that deposition, so that her story can be told to a jury.

A 100-year-old witness, let's, you know, think about it. That is sort of a difficult witness to get to and from North Carolina in and out of a courtroom. So, I think those two conditions are very, very interesting here. They certainly don't want John Edwards to speak to what it seems to be their star witness.

BALDWIN: Right. So you have the two donors here from which a lot of this money is stemming from. You have Mrs. Mellon, who, as you mentioned, 100 years of age, tough to even get testify -- to testify at that age, and also Fred Baron, who is no longer with us.

HOSTIN: That's right.

BALDWIN: So, how might those two donors or the information at least we know Mellon could provide, how might that help, how might that hinder Edwards' case?

HOSTIN: Well, it is all about those donors, because the government has to prove that these were in fact campaign contributions.

And in order to prove that, they have to prove that the contributions were made. They're personal expenses, of course, of Rielle Hunter. They have to prove that those contributions, Brooke, were meant to keep the campaign alive, not just meant to keep this a secret from Elizabeth Edwards, who we know was stricken with cancer at that time and who has died since.

And so those are fact issues. And if Bunny Mellon can get on the witness stand and say, well, no, John Edwards didn't know anything about it -- that is the second (INAUDIBLE). As Joe Johns just mentioned, they have to also prove that he knew these were campaign contributions and were being paid.

They really have to -- they have to have Bunny Mellon get on the witness stand and say that these were in fact contributions, so that his campaign, his 2008 presidential campaign, could be kept alive. If she gets on the witness stand, though, and says, well, no, John Edwards knew nothing about it and, in fact, they were just personal expenses and they were meant so that Elizabeth Edwards would not find out about it, that would be a very, very good thing for the defense.

BALDWIN: What about -- we know that the defense team and the federal prosecutors, they have held plea discussions, so far, obviously not reaching any kind of agreement.

I mean, at any moment now, they still could reach some kind of plea agreement, correct? And, number two, do you think ultimately this thing is going to go to trial?

HOSTIN: Well, certainly, they could reach a plea agreement.

And I have been speaking to a lot of my former federal prosecutor friends, some of my contacts in the Justice Department, who, of course, are not speaking much about this, but I think the consensus is, given the fact that we are going into an election year, Brooke, it is unlikely that a federal prosecutor, especially one from the Public Integrity Section of the Department of Justice -- those lawyers are actually working with the North Carolina federal prosecutors -- will send the message that it is OK to sort of do something like this and not get any jail time. And that is probably what the sticking point here. John Edwards would not want to lose his legal license. Remember, he is a lawyer, a very good lawyer good trial lawyer. And he won't want to go to jail. He won't want to serve prison time.

BALDWIN: And speaking of -- forgive for interrupting, Sunny Hostin.

You see all these cameras pointed one way? That means one thing --

HOSTIN: Yes.

BALDWIN: -- that John Edwards is headed toward the microphone.

In fact, here he is. Let's listen.

JOHN EDWARDS (D), FORMER U.S. SENATOR: There's no question that I have done wrong. And I take full responsibility for having done wrong.

And I will regret for the rest of my life the pain and the harm that I have caused to others. But I did not break the law. And I never, ever thought I was breaking the law.

Thank you all very much.

BALDWIN: Wow, short and sweet, less-than-20-second statement, not taking any questions.

Joe Johns, first to you on the scene there outside of that courtroom there in Winston-Salem, North Carolina.

I think I saw -- was that Cate, his oldest daughter, over his shoulder?

JOHNS: Hey. What did you say?

BALDWIN: Was that Cate, his oldest daughter, over his shoulder there?

JOHNS: Yes, that was Cate. That was Cate, yes, absolutely.

And they kept it short and sweet, not surprisingly (AUDIO GAP) people here in the new -- in the North Carolina media are. It would have been a lot rougher in New York City or somewhere.

Now, I don't know if you can see, but there is a little scrum following him as he walks off to the street.

BALDWIN: We see it. We are watching. We are watching. And there he was. He said, "There is no question I have done wrong," but he -- he says, "I did not break the law, and I never, ever thought I had broken the law."

JOHNS: Absolutely, yes. BALDWIN: Joe --

JOHNS: And, you know --

BALDWIN: Go ahead.

JOHNS: Oh, I was just to say, you know, while we are watching him go out -- and one of the points I really don't think we were able to get in that is kind of important, and it is about Bunny Mellon.

It was the last week or two that he paid her a visit. And there were a lot of concerns about that, a lot of heartburn, I think over at the Justice Department even. Well, what is this guy doing going and sitting down and having a conversation or tea or whatever it was?

It was apparently just a friendly meeting, not to discuss the case, we heard officially, but, you know, people are asking questions about. And so that may be why the prosecution actually went the extra step of asking the judge to impose that condition that he had to stay away from Bunny Mellon.

BALDWIN: Yes. That's a good point. He can only stay in the Lower 48. And he had to surrender his passport.

And there the car goes. It just shows what kind of story this is. I mean, he's being followed. I can't even imagine how many helicopters and news choppers there are in the sky. You saw the scrum, as Joe described, as he was leaving the courthouse.

As we go to break, because it happened so quickly, you might have missed it, let's listen once again to John Edwards.

(BEGIN VIDEO CLIP)

EDWARDS: There's no question that I have done wrong. And I take full responsibility for having done wrong.

And I will regret for the rest of my life the pain and the harm that I have caused to others. But I did not break the law. And I never, ever thought I was breaking the law.

Thank you all very much.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BALDWIN: If you can see a silver lining in the economic news, then congratulations. You are a capital-O optimist. Here's the latest. Have a look at the chart with me.

You see the little blue nub at the end of that row? That is the job growth for the month of May, anemic, 54,000 new jobs. That is it, only about a fourth as many new jobs as we saw the previous month in April. So, you have lousy jobs numbers, the unemployment rate rising just a smidge to 9.1 percent, manufacturing slowing down, consumer confidence jitters. And to top it all off, the decline in the housing prices seems to know no end.

Alison Kosik is on the floor of the New York Stock Exchange for us today.

Alison, to you.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, the jobs numbers definitely put that exclamation point on the fact that the economy seems to be slowing down even more.

Want to talk with one trader here, Joe Greco with Meridian Equity Partners. He's been processing this report all day.

Joe, what does this set up for us at this point?

JOE GRECO, MERIDIAN EQUITY PARTNERS: Well, right now, I think everyone is very concerned that what we thought was maybe a slowdown of the pace that we had, which was a nice recovery pace, is now maybe a halting of the recovery pace.

And I think people are concerned that the economy is actually going to go in reverse and perhaps we will have a double-dip recession. And that is a big concern for not only traders, but of course everyone. There is a lot of uncertainty as to what is going to happen going into next year with a presidential election.

And there are a lot of people in Washington who right now seem to be wavering on making a good decision that is in the best interest of the country.

KOSIK: But this is the first sort of really bad jobs report compared to what we have had let's say the past several months, where we have seen job additions of at least 200,000, 250,000 per month. Does one bad report really make a trend?

GRECO: I don't -- no, it definitely does not make a trend, but I think the concern here is that there's been a lot of talk, more than just whispers, a lot of actual talk for the last few weeks that the economy is not going to be able to sustain the pace.

And that, being that we have only really been on a good, strong recovery for the last three quarters, towards the end of last year, I think that is a little concerning. People are concerned that there really can't be any more growth to revenues for companies and that stocks are going to start to dwindle and give back some of those nice returns you have had for the last year-and-a-half.

KOSIK: All right, Joe Greco, thanks very much.

And, Brooke, that is why we do see the Dow right now down over 100 points on this dour jobs report -- Brooke, back to you.

BALDWIN: Alison, thank you so much.

President Obama was in Toledo, Ohio, today to salute the recovery of the big three automakers and also to congratulate Chrysler in particular for paying back the loan it got from the government -- government bailout.

On the overall economy, the president said it needs more time to mend.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Even though the economy is growing, even though it's created more than two million jobs over the past 15 months, we still face some tough times. We still face some challenges.

You know, this economy took a big hit. You know, it's just like, if -- if you had a bad illness, if you got hit by a -- by a truck, you know, it's going to take a while for you to mend. That is what has happened to the economy, it is taking a while to mend.

(END VIDEO CLIP)

BALDWIN: President Obama today refers to the week's-worth of dour economic reports as quote, unquote "a bump in the road."

And it sure does look like Uncle Sam has champagne taste and a beer salary just like your own household perhaps, and we had huge bills to pay down, but the funds to cover them are stretched or borrowed. So Moody's may decide to drop our country's sterling credit rating.

And that leads me to the next guest, a Republican congressman who knows just how pressure is on folks there in Washington to come up with a solution to the debt issue before time runs out on that crucial, crucial rating. We will talk, next.

(COMMERCIAL BREAK)

BALDWIN: Well, this morning when we woke up here, we woke up to troubling news economically, and as did our own lawmakers. America's sterling credit rating may be in jeopardy, and you have a credit rating and I know I have a credit rating, and so does America. The U.S. government is considered top notch, AAA, because it always, always pays the bills at least up until now.

But to keep paying the bills, we essentially now to open up a new line of credit something that Congress would have to approve by raising what they call the debt limit, the debt ceiling. And the deadline now is set for August 2nd. That is when the checks would start bouncing.

House Republicans are saying, folks, not going to do it. Not going to raise the debt limit again until we first agree to stop spending so much. Some folks thought they were bluffing, but here is what the credit rater Moody's said yesterday. "We fully expected political wrangling, but the political polarization has increased the odds of a short-lived default." So that will perhaps speed things up a bit.

Joining me now from is Representative Charles Boustany, Republican from the great state of Louisiana. And the congressman here is on the tax writing Ways and Means Committee. Congressman, thank you for coming on. Let me go through a series of questions to wrap our heads around what is happening. If we lose our AAA rating, what happens then?

REP. CHARLES BOUSTANY (R), LOUISIANA: Well, it is a serious problem, and if we see a downgrade in the rating, the problem is that we will see interest rates rise at a time when we have very sluggish job growth, high unemployment, very slow economic growth, and this is disastrous. But I will tell you this, serious economists as well as these bond rating agencies are saying that we have to get a handle on the debt.

BALDWIN: What is the interest rating that we are paying right now, congressman?

BOUSTANY: Well, the 10-year bond we are paying three percent on the ten-year treasury note which is a figure used by corporate debt and mortgage rates and all of these sorts of things. So we are right around 3 percent which is low, and historically low, but we have had flight of capital into the U.S. because of the situation in Europe. But that could change with a downgrading in the rating.

BALDWIN: So, if Moody's decides to lower the AAA rating, the borrowing cost would go up then?

BOUSTANY: That is exactly right.

BALDWIN: And that would add to the debt. But do we know how much it would add?

BOUSTANY: Well, it depends upon what happens with these interest rates. Last year we paid a total interest of $210 billion for the year of 2010. It is slated to go up even more and that is what these low interest rates, and that could go higher.

It affects every single man, woman, and child in the country, because the debt if you break it down is about $45,000 for every man, woman, child in the country. We have to live within our means, and so any increase in the debt ceiling has to be coupled with a substantive plan, a credible plan to reduce the debt and our deficit spending.

BALDWIN: But you know, Americans, we are all having a tough time sort of trying to live within our mean, and I'm curious about the message here. When it is OK not to pay the bills? Is it OK for families not the pay the bills?

BOUSTANY: Well, families are expected to pay their bills. I have a young daughter who just got married and she and her husband are going to be expected to pay their bills, and the United States has to keep its credibility, and meet its responsibilities in a financial markets, and so forth.

And so it is essential that we move forward with a credible plan to take care of this debt problem, and the deficit spending, because Admiral Mullen and General Petraeus says this is the biggest threat to the national security and clearly the biggest threat to the economic security.

BALDWIN: But would the government be willing not to pay the bills?

BOUSTANY: Well, I think it is unacceptable to default on the debt. We have to come up with a plan. But we also have to understand the grave threat posed by our debt, this level of debt I just outlined, and that is why we have to do both.

We may have to raise the debt ceiling, but we have to couple it with substantive spending cuts and a credible plan going forward to tackle the debt and deficit spending.

BALDWIN: We know that the treasury department treasurer Tim Geithner has given a prediction of a plan by August 2nd, and when do you think that we will have a plan?

BOUSTANY: Well, I know that Speaker Boehner has been working with the --

BALDWIN: Next month?

BOUSTANY: Well, it has to be done by August.

BALDWIN: Early next month?

BOUSTANY: I hope so. I hope in a few weeks we can get this done. But I don't know, because a lot of it depends on the negotiations. But it is critically important that we do this. This is Congress' responsibility.

Keep in mind that the House passed a budget to get us moving in the right direction. The Senate has just failed to follow suit. And the administration has not come forward with a budget that has been scored by the congressional budget office. So we need the administration and the Senate to work with us on this. Let's put a budget together that gets us on a path to prosperity and on the path to fiscal responsibility.

BALDWIN: Well, we will be watching for both of you to be working together so that you can compromise, and we will have to see what happens with all of the cuts and the spending and the debt ceiling. Congressman Charles Boustany out of Louisiana, thank you for being with me today.

BOUSTANY: Thank you, Brooke, great to be with you.

BALDWIN: Now this.

(BEGIN VIDEO CLIP) CINDY ANTHONY, CASEY ANTHONY MOTHER: Casey, hold on, sweetheart. Settle down, baby.

CASEY ANTHONY: Nobody is letting me speak. You want me to talk, and give me three seconds to say something.

CINDY ANTHONY: OK, sweetheart.

(END VIDEO CLIP)

BALDWIN: And it continues, the live pictures where you are seeing Casey Anthony inside of the courtroom. More tapes played of her talking to her own parents from inside of the jailhouse while everybody was out there searching for her little daughter. Wait until you hear what Casey Anthony said about the possibility that Caylee drowned. That is coming up.

(COMMERCIAL BREAK)

BALDWIN: All right, we have gone through this already and it has been a rough month for jobs for us in the United States. And 54,000 jobs created in the month of May, and it is really about a third of what is expected. So is there a recipe for job creation in the country? Coming up is a "Fareed Zakaria GPS" special about this innovation, and what Fareed says we need to create jobs. So why is the U.S. falling behind in this key area? Take a listen.

(BEGIN VIDEO CLIP)

FAREED ZAKARIA: Eric Schmidt of Google sees other countries, especially in Asia, eclipsing the U.S. with their intense focus on innovation, especially when it comes to funding new industries.

ERIC SCHMIDT, EXECUTIVE CHAIRMAN, GOOGLE: The fact of the matter is that other countries are putting more money in it than we are, and we won't win unless we do something like what they are doing.

ZAKARIA: When you travel to places like Singapore and China, does it worry you?

SCHMIDT: It worries me a lot. Who would have thought that South Korea would have become the major iron, steel, and shipbuilding country in the world? It makes no sense, not the right natural resources. But 30 years ago in the organized way they decided those are the industries they will go after and built a fine product.

So that the Asian model works very, very well from the standpoint of productivity for the country and innovation. We have to find a way to marry that with the cultural ideals and the democracy here in America.

ZAKARIA: Schmidt says that China has already started to challenge the U.S. as an innovator sooner than we might have imagined.

SCHMIDT: The evidence is that the Chinese companies are starting to do things innovative and much of the new networking ideas are coming out of a company that has a research campus as large as silicon valley in a far city in China. So it is perfectly possible that these people will begin to get into the spaces that America has historically dominated.

(END VIDEOTAPE)

And BALDWIN: I want to remind you that you can watch that "GPS" special called "Restoring the American dream, how to innovate." watch it Sunday night at 8:00 p.m. eastern and pacific right here on CNN.

Casey Anthony says that her daughter drowned, but wait until you hear what it was that she said to her parents about that theory while her toddler was missing. That's next.

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BALDWIN: More drama in the courtroom of the Casey Anthony murder trial. Here is what happened today. Jurors heard the woman charged with killing her own two-year-old daughter appears to scoff at a scenario that her defense is now based on. At one point her mother talks about speculation in the media. I want you to hear this.

(BEGIN VIDEO CLIP)

CINDY ANTHONY, CASEY ANTHONY'S MOTHER: We're not doing well, Casey, none of us. Lee has been sick. Dad's, dad has blown up at the media.

CASEY ANTHONY: Yes, I heard.

CINDY ANTHONY: Well, someone just said that Caylee was dead this morning and she drowned at the pool, and that is the newest story out there.

CASEY ANTHONY: Surprise, surprise.

(END VIDEO CLIP)

BALDWIN: Back in 2008 when the jailhouse videos that you saw were taken, Anthony claimed that her two-year-old Caylee had been kidnapped by a nanny who was never found. Police say that there is no evidence that such a person ever existed.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You are on the second level? Can you lock the door?

UNIDENTIFIED FEMALE: Yes. He is going to come through right now.

(END VIDEO CLIP)

BALDWIN: That was a whole other piece of sound. This is one of the more chilling 911 calls that some of us have heard in a while. You have a mother and son hiding out in the closet of the house. They are hiding because of an intruder and the mother begins to negotiate with the man, and you will hear how it unfolded next.

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BALDWIN: Just about every day we hear about some kind of home invasion where the owner is not home and returns to find their place cleaned out. And sometimes for the unfortunate few they are home when a burglar pops on by.

But to capture an actual conversation between a family and intruder on a 911 phone call is just about unheard of. That is precisely what happened to Tracy Middleton and her teenage son. Take a look at this picture here. This is the intruder, 23-year-old Benjamin Davis Staffell. He is accused of tearing through the Middleton home while mother and son hunker down in a bedroom for safety.

Meantime the mom, Teresa Middleton, was already on the phone with the 911 operator who recorded this whole exchange. Listen.

(BEGIN VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You are on the second level? Can you lock the door?

UNIDENTIFIED FEMALE: Yes. He is going to come through right now.

(END VIDEO CLIP)

BALDWIN: How about that? Police arrived two and a half minutes after she called 911 and arrested him. Middleton talked about the whole thing and gives this piece of advice to folks who might one day find themselves in the same situation.

(BEGIN VIDEO CLIP)

TERESA MIDDLETON: You never anticipate to have to call 911 to protect yourself, and unfortunately, I found myself in that situation. And without fail, the Westminster police force was there for me. If there's anything to learn from this situation, I'd like the public to know, don't ever hesitate to call 911. And when you do call them, give them any and all information you can and don't ever hang up until the situation is over.

(END VIDEO CLIP)

BALDWIN: Heaven forbid that happen to any of us. Staffell charged with burglary, assault, and criminal mischief.

More on our breaking news out of North Carolina. John Edwards indicted over this whole scandal involving his mistress. He just spoke to reporters. We're going to show you that video for you and tell you what happened inside the courtroom today.

Plus, Congressman Anthony Weiner has just canceled an appearance tonight, and all has to do with his personal life. Wolf Blitzer has the reason next.

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BALDWIN: Wolf Blitzer now with the latest news off the CNN Political Ticker. Why is Anthony Weiner canceling his appearance tonight?

WOLF BLITZER, HOST, "THE SITUATION ROOM": He says that he wants to spend some time, understandably so, with his wife. They have a lot of work to do, obviously. He'd rather spend time in New York with her given all of the controversy that erupted over this past week than go off and speak in Wisconsin. I'm sure the Democrats certainly appreciate what he's going through right now.

Other political news we're covering, Brooke, includes our own CNN Republican presidential debate a week from Monday in New Hampshire. We have a list of the finalists that are going to be up on the stage -- Mitt Romney, Newt Gingrich, Tim Pawlenty, Ron Paul, Michele Bachmann, Rick Santorum, and Herman Cain. I think our viewers will want to see it.

The first lady of the United States, Michelle Obama, has now scheduled a trip to South Africa. She's going to be going to Johannesburg and then Batswana. Have you been there?

BALDWIN: No. It's on the top of my list.

BLITZER: If you want to go on a safari, it's a great place. I was in Cape town last year. I've been to Johannesburg. Also some fabulous sightseeing. She's going to spend five or six days in Africa. She's going to take her mom and two girls. They will have a great time. We wish them a safe and very happy voyage.

BALDWIN: Before I let you go, I want your two cents on this John Edwards story. The media circus outside of this courtroom where he entered his plea, his not guilty plea, what did you make of the scene out there?

BLITZER: It shows you how the mighty has fallen. It wasn't that long ago I moderated a presidential debate near the end of the campaign and there were three Democrats left at the time, Barack Obama, Hillary Clinton, and John Edwards. Eventually he dropped out and endorsed Barack Obama.

And even early on there was talk that John Edwards, himself a lawyer, a former United States senator, the vice presidential nominee back in 2004, he could emerge as the attorney general of the United States. Now the Justice Department is going after him on these allegations of campaign finance irregularities.

Jeff Toobin has explained this to us and our viewers. It's by no means a slam dunk for federal prosecutors, but it does show the political mighty that have fallen and very, very quickly in a relatively short period of t time.

BALDWIN: Wolf Blitzer, it's an excellent point.