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President Obama Pushes 'Largest Possible Deal'; Betty Ford Remembered as Feminist Icon; Newspaper Hacking Scandal Widens; Panetta Accuses Iran of Arming Iraqi Insurgents; Company Pushes to Integrate People with Disabilities Into Workforce; U.S. Threatens To Withhold Military Aid From Pakistan
Aired July 11, 2011 - 13:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RANDI KAYE, CNN ANCHOR: We are watching the White House, where President Obama is about to sit down yet again with leaders of Congress over some sort of deficit-cutting measure that'll clear the way for an increase in America's ability to borrow. Washington can postpone, sidestep, or just plain fudge a lot of hard decisions, but the debt ceiling -- not one of them.
And where the Treasury sees a hard and fast deadline, August 2nd, to raise the ceiling or risk default, the president sees opportunity to take on spending, taxes, even entitlements, Medicare, Medicaid, Social Security. In a White House news conference you may have seen live right here on CNN, the president made his case for what he called the largest possible deal, worth maybe $4 trillion.
House Republicans are pushing a plan roughly half that size. You can see it right here, made up mainly of spending cuts on the Republican side.
We heard just minutes ago from the Republican House Speaker, who says his differences with the White House begin with the word "balance."
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R), HOUSE SPEAKER: Most Americans would say that a balanced approach is a simple one. The administration gets its debt limit increase and the American people get their spending cuts and their reforms. And adding tax increases to the equation doesn't balance anything.
(END VIDEO CLIP)
KAYE: The president says a deal will get done and it won't just be a stop-gap.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I will not sign a 30- day or a 60-day or a 90-day extension. That is just not an acceptable approach. And if we think it's going to be hard -- if we think it's hard now, imagine how these guys are going to be thinking six months from now, in the middle of an election season when they're all up.
It's not going to get easier, it's going to get harder. So, we might as well do it now, pull off the Band-Aid, eat our peas.
(END VIDEO CLIP)
KAYE: And now I want to bring in CNN White House Correspondent Brianna Keilar and Congressional Correspondent Kate Bolduan.
Brianna, what are the real obstacles here? I mean, is this all about taxes? Because we heard John Boehner just moments ago here on the show saying that this isn't political.
BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: And it certainly does have to do with tax increases, Randi. Democrats want to see some tax increases if they're going to give so much on spending cuts to priorities and programs that mean so much to them. They and the White House want to see something that they can say that they've also -- if they're squeezing all Americans, that they're squeezing corporations, that they're squeezing wealthy Americans. But it isn't just about tax increases.
It's also about entitlement reform, it's also about potentially tax reform. It's about spending cuttings. And it is, at a very base level, also about the debt ceiling, which has become sort of a symbol, if you will -- and Kate will tell you this -- for some Republicans who say it's a license to spend. That's what Republicans say.
KAYE: And isn't the president offering to defer taxes until 2013, I mean, presumably, when the economy is on some sounder footing?
KEILAR: This was an interesting detail in his press conference earlier that we heard. He was saying we're not talking about imminent tax increases, we're talking about things that would go into effect down the road in 2013. I think also, though, Randi, what you'll hear from Republicans because is, just because it's something in 2013, it's still a tax hike, in their view.
KAYE: And Kate, let me bring you in here. I mean, aren't the president and Speaker Boehner both -- at least it seems this way -- at the mercy of their rank and file, really, when it comes to this big historic agreement?
KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Well, they both say that to some extent. And they both acknowledged again today that it's going to take both Democrats and Republicans, despite the fact the Republicans have a majority in the House and can, if they all agree, can push through many pieces of legislation. But they both acknowledged today that this is going to take a bipartisan effort, bipartisan votes, to push this through.
That's because there are elements of both parties, some conservatives, some members of the Tea Party Caucus, and on the other side, some very progressive liberal Democrats, that are not going to vote for this because of their various reasons. I mean, we have some in the Tea Party Caucus saying they will not vote to raise the debt ceiling no matter what. And some liberals say if Medicare and Social Security are on the table at all, they're not going to vote for it at all. So that's what you're hearing the president talk about, in his press conference, Randi, that he's willing to take some significant heat from his party in order to get a deal done. I asked John Boehner that same question, if he was willing to take that similar heat, and he said that he knows there's going to be a lot -- this is very tough politically, that they both need to come to an agreement in order to push this through. But he remained very firm today, as well as Majority Leader Cantor, that no tax hikes are on the table, and that's where they're remaining firm at the moment.
KAYE: It seems, Kate, the only thing that both sides really agree on is that they will hammer out a deal. That's what they say. But, I mean, remind us if you would about this political calendar.
When do we need this deal by?
BOLDUAN: It almost seems a little counterintuitive, because everyone seems to agree on one thing, that they need to get this deal done in time to raise the debt ceiling by August 2nd, the deadline set by the Treasury. But in the very next breath, you will hear from Republicans, as well as Democrats, saying, but, we won't vote to raise the debt ceiling if X or if Y.
What I've heard from people here -- and people have said it publicly -- is that a deal really needs to get struck probably by the end of this week. July 22nd was the date that the president had thrown out there, because it does take time to draft legislation and get it passed through both chambers of Congress to get it to the president's desk in time for it to be signed by August 2nd. We're hearing today -- if we know anything out of today, it seems that both sides are possibly more dug in than ever on their sticking points. And the big sticking point, Randi, and this is no surprise to anyone, seems to be the issue of taxes at this point -- Randi.
KAYE: Yes.
And Brianna, I want to get back to you. The president, vowing to meet with lawmakers every day until a deal gets done. I mean, do deals really get done in meetings like these, or are these just photo-ops meant to keep the pressure on, let the American people know that the legislators are working for them?
KEILAR: Randi, I think a lot of it is a photo-op, for sure, that says we're keeping the pressure on. And also, hey, look, we're doing something. We understand something needs to be done, and we're here working very hard.
What you don't see in a photo-op that is important is the behind-the- scenes staff level discussions. The people who are very -- they're sort of very entrenched in the policy, and they understand the fine details.
They're the ones who are getting a lot of the work done. But I think that the constant meetings day after day, and sort of holding out until the last minute -- we've seen this in other negotiations -- this is giving both sides an opportunity to say, you know what? We fought until the bitter end and this was the best deal that we could get. But it's certainly scary as you march toward an August 2nd deadline when the ramifications of a default would be not just here in the U.S., but also global in economic ramifications.
KAYE: Yes, certainly.
Brianna Keilar, Kate Bolduan, thank you so much. Appreciate it.
Our "Sound Effect" today is from the biggest sports tournament you probably didn't know was even going on. The women's World Cup is heading into semifinal rounds this week in Germany, and team USA is still in the mix.
Brazil, on the other hand, is not. The Brazilians played the Americans to a draw 2-2 in yesterday's quarter final match. And so it came down to penalty kicks.
Now, here is the kick that clinched it.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: USA are in to the last call! It's been a near miracle. That's interesting (ph).
(END VIDEO CLIP)
KAYE: The Yanks now play the French on Wednesday, and Japan plays Sweden. America last took the title in 1999.
(NEWSBREAK)
(COMMERCIAL BREAK)
KAYE: The death of former first lady Betty Ford has current and former leaders, former drug addicts, and cancer patients paying tribute to a woman ahead of her time. First lady Michelle Obama will be among those honoring her legacy.
Two memorial services are scheduled this week, one on Thursday at the Gerald Ford Presidential Museum in Grand Rapids, Michigan. But the first memorial is being held tomorrow in Palm Desert, California.
Let's go straight to Sandra Endo, who is there and joins us now.
Sandra, when you talk to people, do you get a sense Betty Ford touched their lives by simply being Betty Ford?
SANDRA ENDO, CNN CORRESPONDENT: Absolutely, Randi. That's exactly it.
People who met Betty Ford say they just love the fact she was so real. She was very candid and outspoken, and for a lot of the residents here who met her, because she and former president Gerald Ford were long- time parishioners at the church behind me, St. Margaret's Church, and that is where the first of her two memorials will be held tomorrow. And a lot of the residents around this area say that they remember her for her vivacious character. And here's also what they say they remember about her today.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: She wasn't what I would call, like, an extrovert, but she was very, very nice always. Very gracious.
UNIDENTIFIED FEMALE: Many years ago, when she had breast cancer, I had it after she did. And she called me in the hospital.
(END VIDEO CLIP)
ENDO: Now, preparations are under way inside the church and the surrounding area right now, all gearing up for the memorial tomorrow. Again, the first of two. She will be later laid to rest on Wednesday in Grand Rapids, Michigan -- Randi.
KAYE: And Sandra, she was so frank. I mean, it really stood out about her. She was so frank and so open about her drug abuse and her breast cancer by conquering her own addictions and acknowledging her own struggles in public before it was really OK to do that. I mean, she has saved countless lives in doing so.
Are folks talking about that and what that means for her legacy?
ENDO: Oh, absolutely. That will definitely be her legacy, Randi.
When the news broke of her passing, so many people came out, celebrities and just regular folks alike, people whose lives she touched because of the Betty Ford Center. It opened in the '80s and already helped 90,000 people really conquer their addictions, addictions she suffered on her own as well.
And again, she was forward-thinking and really before her time, when being outspoken about the real problems she was facing just as a regular person, but in this tremendous role as first lady. So, clearly, she connected with so many people, and all of those thousands of lives saved are certainly thanking Betty Ford and the legacy she is leaving.
KAYE: All right. Sandra Endo, appreciate it. Thank you very much.
Up next, Britain's former prime minister now says he was the victim of the phone-hacking scandal that keeps widening.
We'll have the details for you next.
(COMMERCIAL BREAK)
KAYE: Welcome back.
The salacious saga that killed the British tabloid "News of the World" is widening, and now there are allegations against another paper owned by media mogul Rupert Murdoch. One day after the paper printed its final edition, Britain's "Daily Mirror" is reporting that journalists from "News of the World" tried unsuccessfully to gather phone records of 9/11 attack victims. "News of the World" is closed now after being exposed for hacking into the phone of a murdered school girl. Becky Anderson reports.
(BEGIN VIDEOTAPE)
BECKY ANDERSON, CNN CORRESPONDENT: So what's the crux of the story here? Well, Britain's biggest selling Sunday newspaper, the "News of the World," has been shut down by its owner. The shock closure came as British police revealed they've identified nearly 4,000 potential victims of illegal eavesdropping.
Now, allegations of phone hacking are nothing new. For years, they've been associated with celebrities and royals. No longer.
Suddenly, it was revealed the mobile phone of a murdered British school girl was allegedly hacked into. The paper was said to have accessed Milly Dowler's voicemail, even deleting messages, which gave her family false hope that she was still alive.
Twenty-four hours later, it emerged that families who lost loved ones in the London terror attacks had also been apparently been targeted. And then, it what appears to have been the last straw, relatives of British soldiers killed in Afghanistan and in Iraq.
Well, a bit more now on "News of the World" itself. The closure of the paper brings to an end more than 160 years of history.
The Sunday tabloid first published in 1843. It was a weekly paper that flew off the newsstands. Britain's biggest selling Sunday selling more than two million copies and read by more than five million.
Many knew it as a paper that exposed the misdemeanors of the rich, royal, and famous sex scandals, one nicknamed "The News of the Screws" with Divine Brown's kiss and tell about actor Hugh Grant and footballer David Beckham's alleged affair with Rebecca Loos famously making front-page splashes. In 2009, following the death of Michael Jackson, the paper carried the first pictures of the bed where the pop star died.
Well, the paper had a particular symbolic significance for Rupert Murdoch. It was the first British newspaper that he bought in 1969, and the cornerstone of what became a huge media empire stretching from the United States to Australia.
Well, this current scandal has its roots way back. In all began in 2005, when Buckingham Palace suspected that people were listening in on the voicemails of Prince William and other royal staff.
In 2006, August, Metropolitan Police arrested the News of the World's royal correspondent, Clive Goodman, and this man, private investigator Glenn Mulcaire. No one else was implicated, and at the time British police faced criticism for their inquiry.
Five months later, both are sent to prison. And the News of the World's editor, Andy Coulson, resigns. In July of 2007, (INAUDIBLE) appointed media adviser to the then leader of the opposition, David Cameron, the now prime minister.
In 2009, "The Guardian" newspaper revealed senior staff from the "News of the World" knew that reporters were illegally accessing messages. Hacking victims included actress Sienna Miller and star Hugh Grant. But London's Metropolitan Police chose not to re-launch their investigation.
Let's focus in on two people, Prime Minister David Cameron and Andy Coulson. The PM has announced two inquiries. A judge led one into phone-hacking allegations to start once the police investigation is over, and another one looking at newspaper ethics. He's faced criticism for his decision to hire Andy Coulson.
Remember, he was the former "News of the World" editor whom Mr. Cameron took on as his communications chief. He resigned from that post in January of 2011, but was arrested over these latest revelations.
So, it's affected journalism, politics, the country's police. But this phone-hacking scandal could also dent Rupert Murdoch's business ambitions.
News Corp. is in the process of trying to acquire BSkyB. That's the pay TV broadcaster serving the U.K. and Ireland.
Well, some say getting rid of "News of the World" will help News Corp. in its bid. It already owns 39 percent of the company, but wants to snap up the remainder.
Well, the company's bid has faced opposition from rivals in the media industry and some politicians who objected on grounds that it would own too much of the British media if the deal went through. Well, that opposition has increased as the phone-hacking scandal escalates. Critics claims it shows News Corp. and its management, not fit and proper to own the broadcaster.
So where does all this leave News International, the company that runs News Corp's U.K. newspaper assets? Well, the company is cooperating with the police inquiry. Calls have been made for Rebekah Brooks, editor of the "News of the World" at the time of the alleged hacking, to resign from her current job as chief executive of News International.
Deeply worrying questions have emerged from this scandal. These phone-hacking allegations are truly appalling. If you ever needed a story that intertwined politics, global business, its pressures, morality, and media ethics, you've got one right here.
(END VIDEOTAPE)
KAYE: Thank you to Becky.
Well, two celebrities gave birth over the weekend. We'll tell you who. But neither got us talking as much as this baby, born at more than 16 pounds. Whoa.
Elizabeth Cohen is here to tell us why he may have been so big, next.
(COMMERCIAL BREAK)
KAYE: And we want to show you this new video just into CNN. A little bit shaky there, but that is the president, Mr. Obama, and the vice president meeting with congressional leadership in the Cabinet Room, discussing these ongoing efforts to find a balanced approach to deficit ruction. You can see how House Speaker John Boehner there, along with Senator Harry Reid, the majority leader.
So we'll keep an eye on that and we'll let you know if any new information comes out of this big meeting there in the Cabinet Room.
In the meantime, Hollywood has two new young stars. Actress Kate Hudson and her fiance, musician Matthew Bellamy, are the parents of a baby boy. We don't know their name yet. Hudson already has a 7-year- old son from a previous marriage.
Also giving birth over the weekend, former Spice Girl Victoria Beckham. She and her husband, soccer superstar David Beckham, have named the little girl Harper Seven. She's the couple's fourth child, but only their first daughter.
The birth of a bouncing baby boy in Texas has many of us dropping our jaws.
(BEGIN VIDEO CLIP)
JANET JOHNSON, MOTHER: This is it. No more.
UNIDENTIFIED FEMALE: Wow. This is really going to be big. All I could see was big cheeks.
(END VIDEO CLIP)
KAYE: Oh, yes. Meet JaMichael Brown. Imagine you or your wife giving birth to JaMichael, who tips the scales at 16 pounds and 1 ounce. And he's already 2 feet tall. JaMichael is possibly the biggest baby ever born in Texas.
Senior Medical Correspondent Elizabeth Cohen is here with much more on this.
How did he get so big?
ELIZABETH COHEN, CNN SR. MEDICAL CORRESPONDENT: Well, the mom had gestational diabetes. Janet Johnson had gestational diabetes. So when we see this cute, fat baby, thank God he's doing great, but it's not a good thing. You do not want your baby to be 16 pounds. He's still in the hospital because they have trouble getting their blood sugar under control.
KAYE: So does little -- I'll call him little JaMichael, because babies we like to think of as little -- does he have any health concerns because he is so big?
COHEN: Yes. We actually just got off of the phone -- my producer Aaron Cooper (ph) just got off of the phone with Mrs. Johnson, and she said that he's doing great, but that he is -- his blood sugar is still not quite where they want it to be. So he is still in the hospital. So that's the situation there.
KAYE: And what -- I mean, could this happen to anyone? I mean, is there something that maybe his mom could have done, or maybe that she missed, could have done better so this didn't happen and he didn't grow so large?
COHEN: She said that they knew she had gestational diabetes and that they were treating her diet and medication. We asked a diabetes doctor who's not connected to this family, and we said, what happened here? I mean, 16 pounds? Could this have been prevented.
And he said, "You know, I just get the feeling that something went wrong here, that this was not well managed." He couldn't say that for sure, but he said usually with gestational diabetes we get it under control and you don't have a 16-pound baby.
So something may not have been managed quite right, but of course we don't want to pass judgment. We don't know what happened.
KAYE: Sure. And to put this in perspective, I mean, I know you have a small army of children at home.
COHEN: Much smaller than that baby.
KAYE: Exactly. I mean, what do they weigh about? Usually they're between, what, like, 7 to 9 pounds when a baby is born?
COHEN: Yes, 7 pounds is the average for a baby. And babies are often, let's say, around 14 pounds by six months.
So he's bigger than your average 6-month-old at birth. And this is happening more and more because gestational diabetes is more and more common because obesity is more common.
(CROSSTALK)
COHEN: Yes. So they're seeing this more and more, because more obesity in this country. So more women are getting gestational diabetes. And again, they really have to manage this.
You know, an 8-pound is fine. A 9-pound baby, OK. But 16? I mean, that baby was in some danger.
KAYE: Yes. That's certainly quite large, too large.
All right. Elizabeth Cohen --
COHEN: But extremely cute.
KAYE: Oh, adorable. COHEN: Yes.
KAYE: Yes, little JaMichael.
COHEN: Yes, little, big JaMichael.
KAYE: All right. Thanks so much.
COHEN: Thanks.
KAYE: Well, mobster Whitey Bulger's girlfriend is in court today. We'll tell you what she is asking for from prosecutors right after this.
(COMMERCIAL BREAK)
KAYE: Half past the hour now. Welcome back. A shocking new development in the scandal surrounding media mogul Rupert Murdoch, former British prime minister Gordon Brown now accusing journalists from across Rupert Murdoch's news international media group of illegally trying to obtain private medical information about his family, details of his bank account and his phone messages. These claims re the latest in the eavesdropping scandal that brought down Murdoch's "News of the World" newspaper. "News of the World" published its final issue yesterday.
First lady Michelle Obama plans to travel to Palm Desert, California, to attend former first lady Betty Ford's funeral. Secretary of State Hillary Clinton will also attend the service and will be accompanied by her husband, former president Bill Clinton. According to a family representative, there will be two services for the former first lady. One will take place tomorrow in California. The other will be on Thursday in Grand Rapids, Michigan.
Catherine Greig, the long-time girlfriend of former Boston crime boss James "Whitey" Bulger, was expected in court today. She wants to be released on bail while awaiting trial on a charge of harboring a fugitive. Prosecutor have said they will argue against releasing Greig because they believe she is a flight risk.
Yesterday's women's soccer game between the U.S. and Brazil produced a sports moment so amazing, we wanted to show it to you once again, just in case you missed it. With the U.S. down a goal and the final moments of extra time ticking away, the amazing happened. In a desperate flurry U.S. midfielder Megan Rapino (ph) straight down the sidelines (INAUDIBLE) booming "Hail Mary" cross towards the box. The pass was headed into the goal by U.S. forward Abby Wambach to tie the game at two goals apiece.
The U.S. went on to prevail in penalty kicks and will play France in the next round. A little celebration going on right there.
They came, they wooed, and they charmed. We'll look at the just concluded visit to California by Britain's Prince William and his bride, Catherine.
(COMMERCIAL BREAK)
KAYE: New defense secretary Leon Panetta is accusing Iran of arming Iraqi insurgents, who in turn are attacking and killing American troops. Panetta arrived in Baghdad today from Afghanistan.
With much more on his visit, the one and only Michael Holmes.
MICHAEL HOLMES, CNN CORRESPONDENT: Good to see you.
KAYE: Nice to see you!
HOLMES: I know! You keep going away...
KAYE: You were away...
HOLMES: ... I was away, then you were away and...
KAYE: No, you're away. Anyway...
HOLMES: We're here.
KAYE: Let's talk about Leon Panetta, shall we?
HOLMES: Yes. Yes. Popped into Iraq.
KAYE: Yes.
HOLMES: The old unannounced visit. They still do those. They always -- we always used to say that it'd be a mark of progress in Iraq when you had announced visits.
So anyway, he was there. You know, one of the things that he's been really pointing out is accusations of Iran arming Iraqi insurgents, who are then using those weapons, obviously, against U.S. troops. Now, you know, I've been there 11 times. They used to say this years ago, that the Iranians were providing technology such as the EFPs (ph), the shaped charges that were doing so much damage to U.S. up- armored vehicles.
Now they're talking about it being rockets and things like that, really upping the ante in terms of the weaponry. And we heard Leon Panetta saying the U.S. won't stand for that. They're going to do everything they can to protect the troops. Last month was a bad month for U.S. troops. More than a dozen troops were killed in Iraq, the worst month in two years, exactly two years.
KAYE: So is there some sort of message here from Iran, I mean, as we start to pull -- as the U.S. starts to pull troops out of Iraq? They're supposed to be out by the end of this year.
HOLMES: Yes, well, you know, Iran has had a lot of influence in Iraq, really, for years now. And it's one of the by-products of the war. I mean, if you, before the war, sat down and said, What would be a bad result from us going in there, this was one of the main ones.
The Iranians have influence over some of the major militias there. They have influence over some of the major political parties there. And you know, a lot of analysts look at Iraq and say, Well, you know, we gave Iran Iraq.
You know, so their -- the message from Iran is that, yes, we're supplying -- you know, they're obviously helping the insurgents, you know, attack the Americans right down to the last day.
And they're still talking about whether -- you know, Panetta also complained that the Iraqis won't make up their mind about whether they want the U.S. to have a presence there, you know, for a little bit longer...
KAYE: Right.
HOLMES: ... when are they going to get a defense secretary, whether the government's organized or not. So there's a lot to still work out in Iraq.
KAYE: Yes, it sounds that way. Also a lot to work out between the U.S. and Pakistan...
HOLMES: Yes.
KAYE: ... a troubled relationship getting even more troubled...
HOLMES: It is.
KAYE: ... by the U.S. cutting off military aid.
HOLMES: Yes, $800 million worth. It's about a third of the total package. And you know, and it all -- you know, you've got to go right back to Osama bin Laden, I suppose, the killing of Osama bin Laden, and the feeling among many that the Pakistani intelligence services, the ISI, must have known he was there, he'd been living there for so long.
And then there became (ph) a bit of tit for tat. And the Pakistanis said to more than 100 U.S. military trainers, You've got to leave. And so they -- when they left, they took all their equipment with them. And now we've heard this sort of reduction in aid. It's going to cover a whole bunch of various military items and...
KAYE: So will it mean anything? I mean, will it have any type of impact on Pakistan?
HOLMES: Pakistan says no. I mean, they're saying, Well, we can handle whatever it is. But you know, this is -- this is a very important relationship, the U.S.-Pakistan relationship, and it's in a very bad way. Is it likely to completely unravel? No, the stakes are too high.
But one of the things that's got to be concerning the U.S. is as, you know, we're bickering with the Pakistanis and reducing aid and they're not helping us and we're not helping them a little bit, they're turning a little bit more to getting help from China. And they've had a lot more contact with China. You know, the -- the whole issue is up on that border, that border with Afghanistan, Waziristan, where the Taliban, al Qaeda and other troops are operating...
KAYE: Right.
HOLMES: ... largely with, you know, impunity in a lot of those areas.
KAYE: I find it interesting, though, that Pakistan says it will continue its fight -- even without this $80 million in military aid, it will continue its fight against the militants. A lot of people are saying, Where have you been until now? I mean, what fight is taking place really even at this point?
HOLMES: It's true, and it's a fair criticism. It's a fair criticism that the Pakistanis haven't done enough in certain areas. It's also -- you got to balance that by saying it's a very tough fight for them, as well. They've lost 30,000 troops fighting terror in their country. They've had innumerable terrorist attacks on their own soil. They're doing it pretty hard. So it's not like they're sitting on their hands.
But there's long been and there continues to be this allegation that the security services are actually helping some groups that are anti- U.S. And the anti-U.S. sentiment in the company is not diminishing, it's growing.
KAYE: All right, you know how I love to talk about the royals.
HOLMES: You do, don't you.
KAYE: I'm sorry.
HOLMES: It's your thing.
KAYE: I have to. I have to talk about the royals.
(CROSSTALK)
KAYE: Prince William in California playing polo?
HOLMES: Yes.
KAYE: I love this!
HOLMES: He did rather well.
KAYE: (INAUDIBLE) video or something.
(CROSSTALK)
HOLMES: He played a few chukkers...
(CROSSTALK)
HOLMES: He actually did well. He scored four goals, as well, which is pretty -- I wonder if they -- you know, the defense was a little bit loose that day...
KAYE: Yes.
HOLMES: ... you know, when you had royalty on the pony. Yes, he scored four goals. They were out there. They went down to Skid Row, remember that, and talked to some of the disadvantaged people in Los Angeles, you know, did a little bit of artwork...
KAYE: Right.
HOLMES: ... there with some of the kids, as well.
KAYE: I love the fact, though, that they went to -- well, first of all, I love the fact that Catherine presented the trophy...
HOLMES: Oh, yes, to her husband.
KAYE: ... after they played polo. Yes. She presented it, which was very nice, a big Tiffany trophy. But also, going back to Skid Row -- I mean, you know because it was so -- homelessness was such a -- such a -- so -- such an important thing to Princess Diana.
HOLMES: Oh, yes. For Diana, of course, it was. Yes.
KAYE: And even William -- did he sleep out on the streets one night just to...
HOLMES: Yes, he did.
KAYE: ... to show how important it was?
HOLMES: Exactly. And you know, it was a big thing for Diana. And obviously, Prince William has taken this on, the Duke of Cambridge has taken this on as one of his projects, as well. It was -- she did remarkably, too. You've got to feel for Catherine, I mean, just thrown in there like this is her first major trip as the duchess.
KAYE: Oh, yes.
HOLMES: And did very well. I mean, she wasn't...
KAYE: And her many fashions.
HOLMES: She was, yes. And she wasn't required to speak much, which I think was the palace trying to introduce her slowly to this...
KAYE: Yes.
HOLMES: ... new and very frenzied style of life. But everyone -- the sort of feeling in the British papers I was reading this morning, great job.
KAYE: And I love the fact -- I'll just mention this -- that they flew commercial back.
HOLMES: Yes.
KAYE: British Airways, of course, but no private jet. HOLMES: A lot of pressure on the royals for the money side of things.
KAYE: Yes.
HOLMES: A lot of people say they cost a lot of money. And so yes, they do that now.
KAYE: (INAUDIBLE) nice to see.
HOLMES: There's no Royalty One.
KAYE: No!
(LAUGHTER)
HOLMES: No.
KAYE: Very good. All right, Michael, nice to see you.
HOLMES: Good to see you.
KAYE: Thank you.
KAYE: Nearly half of the workforce at a Connecticut distribution center, believe it or not, is disabled. Find out which company is pushing to integrate more people with disabilities into the regular workforce next.
(COMMERCIAL BREAK)
KAYE: In Connecticut, one company is seeking to include more diversity into its workforce, but the focus is not just on ethnicity or race. A Walgreen's distribution center in Windsor is seeking more workers with disabilities, who already make up more than 40 percent of the total roster.
Alison Kosik tells us why this company is dedicated to giving everyone an equal chance.
(BEGIN VIDEOTAPE)
ALISON KOSIK, CNNMONEY (voice-over): With every box that's opened, every button that's pressed and every crate that's sorted, employees at this Walgreen's distribution center in Windsor, Connecticut are breaking down barriers. Just ask Julie Williard.
JULIE WILLIARD, WALGREEN'S TEAM MEMBER: It's my dream to work here. And it's OK to be yourself and it's OK to be deaf. And it's OK to have disabilities while you work.
KOSIK: More than 40 percent of the people working here report having a disability.
BRYAN HANDY, WALGREEN'S TEAM MEMBER: When you have autism, like I have, it's tough to overcome it when you work. And when you get better at it, then you pick up the pace and go from there. THOMAS PELLETIER, WALGREEN'S TEAM MEMBER: I may have a seizure that will cause me to fall backward.
KOSIK (on camera): This is something that you think has held you back in the past?
PELLETIER: Yes, it has.
MONICA HALL, FUNCTION MANAGER: The thing that makes this building different is that people are accepted.
KOSIK: That's OK.
HALL: Everyone is working right next to each other. Eighty percent of this department is people of disabilities, and you really can't tell one from the other.
KOSIK (voice-over): And that's the point.
(on camera): Did this idea came out of something personal in your life?
RANDY LEWIS, SR. VP, SUPPLY CHAIN AND LOGISTICS: Certainly. I mean, I have a son with autism who is now 23.
KOSIK (voice-over): For Walgreen's Randy Lewis, what began as an experiment has been a revelation for the company, which now plans to introduce Lewis's program in its retail stores.
LEWIS: We sell people with disabilities short. We think their abilities are like this. What we found is they're much broader.
KOSIK: Equality is at the core of Walgreen's inclusive hiring policy -- equal pay, work, and equal expectations, sometimes with a little help to make sure everyone can meet those expectations.
JENNY CASTLE, HUMAN RESOURCES MANAGER: If you look up here at this workstation, we have a picture of a cow. So this whole department is called "the zoo." This is station 11. But if I don't know numbers, 11 doesn't mean anything to me, so we name it the "cow station," as well.
ALISON KOSIK, CNN CORRESPONDENT (voice over): The special accommodations cost the company less than $25 per worker and Lewis says workers with disabilities have fewer work place accidents, lower absenteeism, and lower turnover than people without disabilities.
RANDY LEWIS, SR. V.P., SUPPLY CHAIN & LOGISTICS: The people without disabilities who realize that we are a community, that we're part of something bigger. We're capitalists and we have to serve our shareholders, but we have to serve each other and our community. Alison Kosik, CNN, Windsor, Connecticut.
(END VIDEOTAPE)
RANDI KAYE, CNN ANCHOR, CNN NEWSROOM: Withholding $800 million in aid, a large message from Washington to Pakistan. Is it too little, too late? Our "Stream Team" weighs in next.
(COMMERCIAL BREAK)
KAYE: A few minutes ago, we were talking about the U.S. Holding back $800 million in aid from Pakistan. The move comes because the U.S. has reservations about the Pakistani government and military's commitment to battling terrorism. But is this kind of punishment too little too late? After all, Pakistan is a country wasn't informed that the U.S. was coming to get Osama bin Laden because the CIA was afraid that they'd tip them off.
For more on the question and the future of the U.S.-Pakistan relations, let's bring in the "Stream Team". On the team is CNN National Security Analyst Peter Bergen in Islamabad. And Fran Townsend, CNN national security contributor and a member of both the CIA and DHS external advisory committees.
Fran, I'd like to start with you today. Is the $800 million in military aid that the U.S. is now holding back, is this a big deal?
FRAN TOWNSEND, CNN NAT'L. SECURITY CONTRIBUTOR: It's a very big deal. It's a place where I think the administration, the Obama administration, didn't want to have to find themselves, frankly. Because it does really do a great deal to hurt relations. That said, between not telling them about Osama bin Laden and the difficulty in the counterterrorism relationship, and most recently, Admiral Mullen's statements about Pakistani involvement and the murder of the journalist, the administration found themselves without much choice.
The problem is when you withhold this kind of aid, you are withholding support for activities you really want them to take. So both countries are under pressure to try to find a way forward.
KAYE: But, Fran, does more need to be done here? Or is it enough?
TOWNSEND: Oh, certainly more needs to be done. But we need Pakistan -- you heard President Obama say it. We need Pakistan to help in terms of our regional problems, including in Afghanistan. But we need their help against the Hakani network, the Pakistani Taliban, as well as Al Qaeda in the tribal regions. So this is going to be a part of the long laundry list on both sides of grievances they want and they want to address.
KAYE: Peter, I wan to ask you, I mean, Is this a major change, do you think, in the relationship between Pakistan and the U.S.? Or do you see this as maybe just a blip on the radar?
PETER BERGEN, CNN NAT'L. SECURITY ANALYST: I don't think it's a blip on the radar. We've had a steadily worsening U.S.-Pakistani relationship that began at the beginning of this year with the CIA contractor Raymond Davis shooting two Pakistanis, in a Pakistani city, that was compounded by a lot of Pakistani pushback on the ramped up American drone program in Pakistan. And then, of course, not getting the heads up on the Osama bin Laden raid.
And, so, you know, but while there's been hot words, this is the first time it's been an action by the United States withholding this aid. Which, by the way, as Fran points out, this is not -- it's not aid per se, this is reimbursement for military activities they're undertaking which we want them to undertake. We, the United States, want them to undertake. It's not like this is a handout. But the fact that this is being held up is more than a blip.
KAYE: And do you think, Peter, it's too little, too late?
BERGEN: Well, I mean actually I think quite the reverse. I mean, as Fran sort of indicated, no one really wants to be at this situation, neither the United States nor Pakistan. We don't want to go back to a situation that existed in 1990 when the United States inflicted sanctions on Pakistan. That was a beginning of a very rocky relationship with Pakistan. Pakistanis remember that period very well. We certainly don't want to get any heavier than what is already happening. Because this is a relationship that both countries need.
KAYE: There's some concern about who could benefit from this. Who would you say has the most to gain from a breakdown in U.S.-Pakistan cooperation?
TOWNSEND: Randi, no question, the people who benefit are Al Qaeda and the Pakistani Taliban and the Hakani network. Those groups in the tribal areas that don't really recognize the control of Pakistan, and also are trying to harm the United States and U.S. interests, both in the United States, and by the way in Afghanistan. The people who benefit are the extremists. Which is why, as Peter said, both sides, Pakistan and the United States, want to find their way out of this problem.
KAYE: Peter, you want to add to that?
BERGEN: No, I mean that's exactly right. The point of this money is to reinvest the Pakistani military going after the Taliban, which they're going right now in the Pakistani tribal regions. And at a certain point, if they're not being paid, they're going to stop doing this.
KAYE: How do you think, Peter, this might affect U.S. anti-terrorism efforts for the future?
BERGEN: It's not good, if it continues. My guess is we -- this is too big to fail for both sides. United States cannot -- wants to help Pakistan doing the military operations in the tribal regions. If there's a pause in those operations for a significant period of time, as Fran has indicated, it has significant effects on the military activity in Eastern Afghanistan, Southern Afghanistan, right at the same time that the United States is beginning to withdraw troops. That's not a situation that any military commander or commander in chief wants to be in.
KAYE: All right, Peter Bergen, Fran Townsend, thank you for discussing this hot topic with us in our "Stream Team". Appreciate it.
Time now for a CNN Political update. CNN Senior Political Editor Mark Preston joining me live from Washington.
Mark, we are hearing a new assessment today from Rick Santorum on his presidential campaign? Can you bring us up to date?
MARK PRESTON, CNN SR. POLITICAL EDITOR: I sure can, Randi. You know, there's an old strategy in politics to try to lower expectations. But I'm going to tell you what, Rick Santorum lowered them, perhaps, to the bottom yesterday in the "STATE OF THE UNION" with Candy Crowley.
In fact, this is what you have to say about the Iowa straw poll that will take place in August. He said that if he places fourth, fifth, or sixth, that will be an improvement and he thinks that will show some momentum as he tries to pursue the Republican presidential nomination. Now that is pretty down.
In fact, look at this quote that he put up there regarding his campaign. He compares himself to that children's book, "The Little Engine That Could" and that is what he says his campaign is right now. He's out there meeting with activists, he's meeting with Republican primary voters. He also said that he hasn't raised a whole lot of money that you would expect a presidential candidate should. In fact, he said, when he finally reports his numbers, which will be this week, it will be less than $2 million.
So, Rick Santorum, Randi, who is focused on trying to get the social conservative voters to back him in the presidential bid, social conservatives voters who really make up the Iowa caucuses, is really lowering the expectations out there for the Iowa straw poll, Randi.
KAYE: Yes, it sounds that way. All right, Mark. Thank you very much.
And your next update from the best political team on television is just an hour away.
The Atlanta school's cheating scandal is now reaching in to Texas. I'll tell you how in my "XYZ"
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KAYE: Time now for my "XYZ". Today is the first day on the job for the woman hired to lead a suburban Dallas school district. But after a board vote tonight, well, it may be her last. Here's why. Cathy Augustine is the former deputy superintendent for Atlanta's public schools. And that district is the focus of a massive cheating scandal involving 178 teachers and principals. Well, now that scandal seems to have followed Augustine to Texas. "The Atlanta Journal Constitution" newspaper says Augustine, through her attorney, has denied the cheating allegations. And has said she made the folks in Dallas aware of the ongoing investigation at the time.
But tonight, the De Soto School Board has on its agenda the possible termination of their brand new superintendent. Some parents are so angry that they're promising there will be protests if Augustine lasts beyond today. Augustine, who is a doctor at Harvard University was apparently recommended by a national search firm. She's set to be paid $188,000 a year for her new job. The school board president in Texas stands by the decision to hire Augustine, saying she's quote, "talented and qualified" and that the board was aware of the cheating investigation in Atlanta but had no idea when Augustine was hired, that she'd be named in the probe.
So, we'll see what happens in the school board meeting tonight. It could get ugly. We'll continue to watch it. CNN NEWSROOM continues right now with Brooke Baldwin.
Hi, Brooke.
BROOKE BALDWIN, CNN ANCHOR, CNN NEWSROOM: Welcome back from vacation, Miss Randi Kaye.
KAYE: Thank you.
