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Debt Talks Dominate Washington; Murdoch Media Scandal Deepens; Bachmann to Sign Debt Pledge; Japan Wins Women's World Cup Soccer; Berlusconi on Trial; Watching Out For You; Scandal Clouds Murdoch's Future; Fees Stop Church Group; "Atlantis" Crew Says Goodbye to ISS
Aired July 18, 2011 - 08:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Blow the whistle now. It's 9:00 a.m. on the East Coast, 6:00 a.m. out West. Thanks for joining us, everyone. I'm Kyra Phillips.
One of the central figures in the Murdoch Media scan still planning to testify before British lawmakers. Rebekah Brooks arrested in the phone hacking and bribery investigation.
In Afghanistan, assassins kill a second senior official. He was a member of parliament and a key advisor to Afghan President Karzai.
Nelson Mandela, turning 93. South Africans pay tribute to their former president by performing at least 67 minutes of volunteering, one minute for each year Mandela spent fighting for freedom in South Africa.
15 days from now, your dollar may be worth less, your loans could cost more. That is, if the government runs out of money and is unable to pay its bills. With a major breakthrough increasingly out of reach, lawmakers are showing more interest in a fallback plan. The compromise measure would allow the President to raise the debt ceiling and avert crisis before lawmakers agree on where the spending cuts can go. A vote on that could happen this week.
The fallback plan would likely pass the Democrat-controlled Senate but face a bigger challenge in the House where Republicans hold the majority.
Let's get the latest now with CNN's Brianna Keilar. She's at the White House.
Well, Brianna, are we any closer to a deal than we were a week ago when we talked?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: You know, on a comprehensive deficit reduction plan, Kyra, it doesn't appear so. But while there were no announced meetings between the White House and congressional leaders over the weekend, there were definitely staff- level meetings and a lot of focus has to do with this fallback plan that you mentioned.
It's sort of the brainchild of the Senate Republican leader, Mitch McConnell, and he's working out some details with the Senate majority leader Harry Reid. What it would essentially do is give the president, for all practical purposes, the ability to increase the debt ceiling with really just a minority of support from Congress.
It would allow Congress to voice its disapproval and this is something that the president would have to do in three increments over time between now and the November 2012 election.
But, Kyra, this doesn't address entitlement reform and certainly that idea of the tax increases, the Democrats are still demanding and the White House is still saying no to -- pardon me, that the White House also wants and Republicans are saying no to, there's still an impasse over that, just like when we spoke last week.
PHILLIPS: All right, Brianna Keilar at the White House. And we'll continue to talk about it, I am sure, all this week.
All right, all two developments in the Rupert Murdoch scandal. Police investigating the illegal wiretapping and bribery charges of a top executive in the company. We'll have more on that in just a moment.
But first the resignation of Britain's top cop, the man in charge of Scotland Yard. Sir Paul Stephenson says that he did nothing wrong but regrets the criticism that -- that his police failed to do enough.
(BEGIN VIDEO CLIP)
SIR PAUL STEPHENSON, METROPOLITAN POLICE COMMISSIONER: However the issue of my integrity is different. Let me state clearly, I, and the people who know me, know that my integrity is completely intact. I may wish we had done some things differently, but I will not lose any sleep over my personal integrity.
(END OF VIDEO CLIP)
PHILLIPS: Let's get the latest now from London and CNN's Dan Rivers.
DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Kyra, another scalp has been claimed by this ever-growing scandal. The most senior policemen in Britain, Sir Paul Stephenson, has resigned.
Meanwhile, the former chief executive of News International, of Rupert Murdoch's newspaper group here, Rebekah Brooks, she has been taken in, arrested by the police for questioning. She was detained for some 12 hours on Sunday night and finally released just after midnight.
There was speculation that that would have meant that she wouldn't have turned up on Tuesday afternoon, London time, to be grilled by politicians. But we're being told by her spokesman that she will be there. She won't appear together with James and Rupert Murdoch.
She'll appear after them. But she will be there. She'll have to be careful about what she says and the politicians, equally, have said they will be careful about which questions they ask and how they frame those questions. They don't want to see clearly prejudice any possible trial that may come out of this. But it will be a committee session that will be viewed by millions of people, I would expect, with lots of people wanting to know who knew what, how high up the newspaper group into Rupert Murdoch's empire this scandal went -- Kyra.
PHILLIPS: And CNN will have live coverage of tomorrow's expected testimony by Brooks, Rupert Murdoch and his son, James. It's scheduled to begin this time tomorrow at 9:30 Eastern.
Michele Bachmann, changing her tune on conservative pledge already signed by most of the other Republican presidential hopefuls.
Our deputy political director Paul Steinhauser joining us now.
So, Paul, this is the cut, cap and balance pledge she previously said didn't go far enough.
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Exactly. Now she's changing her mind on this one.
You're going to hear a lot about this pledge over the next couple of days on the campaign trail and also right here in Washington. Where she's going to sign today? South Carolina. Why? Two reasons, South Carolina, of course, a crucial early voting state, the first primary in the south. And also it's home to Senator Jim DeMint. He was the mastermind behind this pledge.
Let's take a look at this pledge. What is it? Let's start with cuts. This pledge calls for a cut of substantial amount of spending to bring down roughly $1.5 trillion in that deficit expected this year.
Cap, federal spending at 18 percent of the GDP. It's at 24 percent and pass a balanced budget amendment to the Constitution that includes spending caps and to make it more difficult to raise taxes.
Now Bachmann, Kyra, she starts today in Iowa before going to South Carolina and sign this pledge. And you're going to see Tim Pawlenty spending all week in Iowa, five days this week, campaigning across the state. Basically he's going to be there between now and that crucial straw poll in Ames next month.
Why? Because Iowa is so important to Pawlenty's campaign as well for the race for the White House. He's a former Minnesota governor. And you know he needs to do well in that straw poll plus the caucuses in February if he hopes to win the Republican presidential nomination. But Bachmann could get in his way -- Kyra.
PHILLIPS: All right. Well, Rick Perry, more hints over the weekend about a presidential run.
STEINHAUSER: Yes, we keep talking about Rick Perry, the Texas governor. Is he going to run or not? Well, he's leaning towards it, in the "Des Moines Register." Remember that's the big newspaper in Iowa. Iowa, of course, the first state in the race to the White House. The first state to vote. Well, this is what he said in an interview published over the weekend. "I'm not ready to tell you that I'm ready to announce that I'm in but I'm getting more and more comfortable every day that this is what I've been called to do. This is what America needs."
Kyra, I don't know. That's a pretty good hint to me. What do you think?
(LAUGHTER)
PHILLIPS: I don't know. I don't think even you have to be read between the lines. Just read the lines.
Thanks, Paul.
(LAUGHTER)
STEINHAUSER: Thank you.
PHILLIPS: We'll have your next political update in just about an hour. And a reminder you can always go to our Web site CNNPolitics -- or CNN.com/politics.
All right, Japan not a big soccer country. But its Women's World Cup win is huge and happy news there today. Their team out-shot the U.S. from yesterday's final in Germany. And our Zain Verjee was there, is still there live in Frankfurt.
And I know we were rooting for the U.S., Zain. That was very important to us, but, hey, it couldn't happen to a better team. They needed this for morale. That is for sure.
ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: They really did, you know. Japan came into this tournament as the big underdogs. Nobody expected them to even get to the finals, let alone beat the U.S. They also knocked out Sweden. They knocked out Germany and it was just absolutely incredible.
When they started the match, everyone was saying they have more skill, they have better possession of the ball, they know how to control and how to pass it. But actually, you know, the Americans really did a good job, too. It seemed the Japanese were a little nervous to start off with.
The U.S. had possession. They were aggressive. They came hard out of the gate. But they were very unlucky. They had a lot of opportunities and they just kept missing. And one of the big tragedies I'm sure they'll replay over and over again in their heads were just the mistakes they were making on the defense line that let the two Japanese goals in.
I mean everyone thought it was a done deal at the end of extra time. There was such a few minutes to go and the Japanese, boom, scored it in. It went down to penalties which is a kind of an unfair way of deciding but somebody has to win. And that's the way they did it. The U.S. President Barack Obama sent out a tweet and he said this, Kyra. "I couldn't be prouder of the U.S. after a hard-fought game. Congratulations to Japan," he said. "The Women's World Cup champions."
And then Ellen DeGeneres said this, "Great job, U.S. soccer. You're all amazing and champions in my book."
And by the way, the U.S. Secretary of State Hillary Clinton is out on a trip and she made a bet, Kyra, with the Japanese foreign minister. And she lost the bet. But she bet New York apples for Japanese pears. So she's going to be picking some apples in New York.
(LAUGHTER)
PHILLIPS: And my bet is you came home with something. Because all you could talk about was this game. I mean there's no special pompom, no T-shirts, no caps, no ticket stubs? You don't have anything for me? Nothing?
VERJEE: No. I do. I have all of that. And I actually found a North Korea football T-shirt there in the store. So I've picked one of those up, too, and some nice U.S. T-shirts and sweatshirts and things like that, you know.
But, you know, Kyra, the thing, too, the U.S. team here really wanted to win so badly, because they've always been under the shadow of the 1999 team, you know. That match was so magical. What other team could be Mia, Julia, or Brandi? They really thought that they could do it. They had the speed, the stamina, the never-say-die attitude. They did do a fabulous job. But it just wasn't their night -- Kyra.
PHILLIPS: Yes. They're still amazing athletes. Zain Verjee, thanks.
An Iowa congressman and his family safe after a home invasion. We'll tell you what happened inside this rural home when we go "Cross Country" after the break.
And a pretty tough good-bye. Atlantis gets ready to undock from the ISS for the last time. We'll have more on the shuttle's farewell ceremony.
(COMMERCIAL BREAK)
PHILLIPS: Checking stories "Cross Country" now.
An Iowa congressman and his family are safe after a home invasion. It happened over the weekend at the rural home of Representative Leonard Boswell. Apparently an armed man came to the front door, attacked Boswell's daughter and demanded money. Boswell ran to help and so did his 22-year-old grandson who grabbed a shotgun and chased away the intruder.
In Upstate New York, two people are killed, at least eight others injured, when a tour bus crashed on Interstate 390. A tire blow-out may have caused the accident. And Los Angeles survived carmageddon. Drivers heeded dire warnings on traffic gridlock and mostly stayed off L.A.'s freeways this weekend. Interstate 405 reopened at noon local time, 17 hours ahead of schedule. Crews finished work on that bridge much earlier than expected.
Italian prime minister, Silvio Berlusconi, learning firsthand about his country's justice system. One case, he's accused of abuse of office and paying for sex with a 17-year-old girl. The other? Corruption charges related to his media empire.
Diana Magnay is in Milan now.
Apparently, he just took a pretty serious blow in the first one. What happened?
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Well, he didn't show up for either. The first case, his defense lawyers have been trying to get the whole case relocated to a different court. This was all about the Rubygate scandal and they said that it should be heard in a place closer to where this supposed paying for sex with a minor took place, i.e., at his country residence.
The courts threw that out. They said that it shouldn't be heard by a (INAUDIBLE) tribunal and he should be continued to be prosecuted here in Milan because the most serious charge, abuse of power, took place when he called a Milan police station. So they say we're going to continue with this case. It has now been adjourned until October.
And the other hearing in which Mr. Berlusconi is charged of having bribed one of his lawyers a huge sum to lie for him in court, that's still ongoing -- Kyra.
PHILLIPS: All right. Now he's got another hearing today for corruption charges involving his media empire. What do Italians think with their leader wrapped up in two separate court cases?
MAGNAY: Well, Italians are quite used to it. He has been involved in so many court cases over the last two decades that it's not really surprising for them to see their prime minister appear before court or at least be summoned to court.
For him right now, these are very difficult times. First of all, for his business empire, he was fined $800 million last week and ordered to pay $800 million to a rival media company for corruption charges. Now that is a huge sum. He's going to appeal it. But he does have to pay in the interim.
And also if you look at the state of the Italian economy right now, that's really certainly as far as a nation is concerned, the most important priority. He had to rush through a new budget program last week to try and sort of calm market fears that Italy was going the same way as Greece.
And the reason he didn't attend those hearings today, Kyra, was because he was talking to the country's president, the head of state, about the budget and how to move forward. So very, very difficult times for the premiere personally, for his business empire, and for the entire nation's economy -- Kyra.
Diana Magnay, reporting live from Milan, thanks.
David and Victoria Beckham and their brand new baby daughter. The first pictures are out.
And Justin Timberlake, he's going to the Marine ball. Now, another sex symbol is getting an invite.
(COMMERCIAL BREAK)
PHILLIPS: Your showbiz headlines.
It's the biggest opening weekend ever. The Harry Potter finale hauls in 169 million bucks right here at the U.S. The beats the first weekend in records set by "The Dark Knight." Worldwide, it's taken in nearly half a billion dollars.
The blues festival in Ottawa, Canada, warned fans about approaching storms. And while Cheap Trick performed, the entire stage came down around them. You can see here, it was caught on YouTube. The band is fine. Some of the crew members were hurt. Nothing serious, though.
Will she be a pop star or soccer player? For the first time, we're seeing pictures of Victoria and David Beckham's baby daughter. Harper Seven was born the 7th day of this month. Harper after Harper Lee, the author or mom's favorite books, "To Kill a Mockingbird." Seven? Well, David Beckham's number, he used to sport on the back of his soccer jersey.
You probably saw the two videos where Mila Kunis -- YouTube videos, rather, where Mila Kunis and Justin Timberlake got invited to this year's Marine ball. Well, another Marine is hoping to get lucky with another sex symbol. Sergeant Ray Lewis wants -- well, 90-year-old Betty White to be his date.
Zain Verjee joining us once again -- because she's been on this story from the very beginning. She broke it. Now, she's got the latest and exclusive scoop on Betty White -- Zain.
ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Covering all angles here. Forget about the World Cup -- focusing on the dating scene on YouTube here.
Yes, Sergeant Ray White uploading a video on YouTube, totally gushing over Betty White, saying he wants her to be his date to the Marine ball. We've heard this story. It has had a good outcome for two other Marines. Let's see if Betty White will accept.
But here is how the good sergeant put it. Listen.
(BEGIN VIDEO CLIPS)
SGT. RAY LEWIS, U.S. MARINE CORPS: I would like to take Betty White. She's just funny. She's sweet. She's mature. She's the all-around perfect woman.
BETTY WHITE, ACTRESS: It was the hugest surprise in the whole world when they called me.
(END VIDEO CLIPS)
VERJEE: He is going to be performing as a rapper at the ball. And he's promising Betty White a really good time if she does go with him.
Now, Mila Kunis and Justin Timberlake have cleared their schedules to go out with the Marines. Kyra, I've also cleared my schedule, just in case.
PHILLIPS: Are you also waiting for a U.S. Marine to ask via YouTube? You've been waiting for that, Zain, because I'm more than happy to throw it out there right now.
VERJEE: Maybe.
PHILLIPS: There we go.
VERJEE: Maybe.
PHILLIPS: You want to give us here, you know, top three --
VERJEE: Maybe, maybe not.
(LAUGHTER)
PHILLIPS: All right. U.S. Marine Corps, there you go, Zain Verjee wants to go to the Marine ball. Reach out. Thanks, Zain.
Well, a highly anticipated consumer watchdog group launches in Washington later this week. The Consumer Financial Protection Bureau aims to make you feel more secure.
Alison Kosik at the New York Stock Exchange.
And, so, Alison, what's exactly will this group -- or let's talk about -- more about what this means.
ALISON KOSIK, CNN CORRESPONDENT: OK. So, it's the CFPB. It officially opens its door this is Thursday. And, yes, it's supposed to protect you, the consumer, and a big part of the job is going to be inspecting the books of financial firms to avoid a repeat of all those excesses that we saw that led to the financial meltdown. Now, the largest banks account for 65 percent of home mortgages and they want to make sure that those are in check.
This bureau is also going to be looking to end those so-called "liar loans" by crafting rules that banned lenders from giving mortgages without verifying income. It's also going to make sure that banks are following new credit card laws that require a lot more disclosure. And the bureau can also respond to consumer complaints on things like credit card abuse, you know, essentially giving consumers a stronger voice. What it's really meant to do, Kyra, is really bridge that gap between us, the people, and them, the banks -- Kyra.
PHILLIPS: And it's supposed to be all about transparency when it comes to this group.
KOSIK: Oh, it is, because, you know, when you think about it, one of the big problems during the recession is that people signed up for credit cards and mortgages, not knowing really what they were getting into. So, the CFPB wants to make sure consumers -- you know, that they don't get tripped up in that fine print or miss all those hidden disclosures. And it looks to make those basic financial practices more clear while also weeding out the unfair lending message.
You know, for a while, though, with this bureau, which is also being called the new sheriff on Wall Street, the funny thing is, it's right now without an actual sheriff. So, later today, President Obama is nominating former Ohio Attorney General Richard Cordray to lead this bureau. It still needs confirmation.
It's going to be an interesting confirmation process because Republicans have vowed to oppose the nomination. They're calling for smaller government and less spending. So, we'll see if he's actually confirmed for this position -- Kyra.
PHILLIPS: All right. We'll see. Alison, thanks so much.
Well, in this economy, it's pretty tough to find a job. You know that. But, hey, now, it's your chance to be seen and heard once again.
Thirty-second pitch is back. You can give it right on our air. Tell us why someone should hire you. Send us an email at the 30secondpitch@CNN.com. You'll earn a spot right here in CNN NEWSROOM at 10:00 am.
The trial is over. Now, she's a free woman. What happens to Casey Anthony?
(COMMERCIAL BREAK)
PHILLIPS: Checking top stories now.
The heat, unrelenting. The National Weather Service declaring excessive heat warnings for 14 states now. The humidity could make it feel as hot as 126 degrees in some places. It's extending all the way through the Midwest. Luckily, no deaths have been reported due to the heat.
General David Petraeus, the outgoing top commander of the NATO forces in Afghanistan formally giving up his command today. Petraeus is officially retiring from the military. But he isn't staying retire for the record very long. He's getting ready to take over the CIA.
The phone hacking scandal in the U.K. is still growing. We've just heard in the last few minutes, the assistant commissioner at Scotland Yard is resigning over his post.
Over the weekend, this woman, "News of the World," Rebekah Brooks, the editor, was arrested and release by police. She is still expected to testify before British lawmakers tomorrow about the scandal.
All right. Now talk of a possible, yet stunning casualty of the British tabloid scandal, Rupert Murdoch himself. "Bloomberg" is now reporting that some members of the company's board are questioning whether he needs to be replaced.
Jeffrey McCracken is one of the "Bloomberg" journalists peering into the boardroom for us. Now, he joins us live out of New York.
So, Jeffrey, what are the details that you are learning right now about the behind-the-scenes maneuvering on the board of News Corp?
JEFFREY MCCRACKEN, BLOOMBERG REPORTER: Good morning, Kyra. Thanks for having me on.
Here's what I would say. The board of directors feels like the quality of information and actually the information flow, if you will, from the company to the board has not been very good. And what I mean by that is they haven't really told the board what's coming or they haven't let the board know how bad things could get and how deep this could run.
And if you're a board member, especially an independent board member who's there to oversee shareholder interest, you're starting to feel like maybe people aren't being very honest with me and you start to question the ability of a management team to navigate through something this difficult, something this treacherous.
This company has lost $6 billion in market capitalization in just two weeks. So, if you're a board of director, you're suddenly very sensitive to how bad things have gotten and how quickly it's gotten this bad.
PHILLIPS: So, Jeffrey, could Rupert Murdoch actually be voted out of his own company?
MCCRACKEN: I think it's unlikely he'd be voted out. Here's what I think is a possible scenario, is that the heat continues to rise on News Corporation, especially if there's any -- if it turns out to be any truth or any validity on the 9/11 issue, that they hacked potentially into the 9/11 victim phones. If anything like that comes to the forefront, then I think what you could see is Rupert step down from CEO into a chairman-type role.
You know, he's got two sons on the board and I think he's going to want to look out for them. Now, again, we're not saying that's exactly what is going to happen. But what's notable in these situations is when the board, if you will, starts to divide, when independent members of a board start to separate from the insiders on a board.
This is the kind of situation you've seen in past corporate controversies, like with HP. And it's notable that one of the independent board members here is a former HP board member and the other person working him, Viet Dinh, advised him on the HP situation.
And Viet Dinh is very important person to keep an eye on here. He helped write the Patriot Act. He's a serious individual, a Georgetown law professor, clerked for the U.S. Supreme Court. So, he's going to play a key role in what happens here, going forward.
PHILLIPS: And, also, you know, this company, it's such a rich company. I mean, Murdoch is such a rich man. And now, we're reading about all the millions of dollars in settlements throughout the years, you know, that Murdoch has paid in the past.
So, the question is --
MCCRACKEN: Right, right.
PHILLIPS: So, the question is, can he -- can this company continue to pay its way out of such a devastating problem?
MCCRACKEN: I think it's going to be a challenge. It's long been said on Wall Street there's a bit of a Murdoch discount, if you will, for News Corp shares. And what they mean by that is the company doesn't seem it always operates exactly for shareholders. It operates for Rupert first.
Now, he does have about a 38 percent controlling stake, or voting stake so he's going to have discretion to do what he wants. But, buying the "Wall Street Journal," for example, was something that I think the rest of the company and its shareholders wouldn't necessarily would have wanted to do.
So Rupert, to the extent he's seen as weighing down shares and hurting the company, that's going to harm him going forward. And he is an 80- year-old man. I think a lot of people are wondering how much longer, especially given how bad this has gotten, how much longer can he run a company so large that's in the middle of such controversy?
PHILLIPS: Jeffrey McCracken, thanks for weighing in with us this morning. Appreciate it.
MCCRACKEN: Thanks for having me on.
PHILLIPS: You bet.
All in all, it was a pretty anti-climactic end to the circus that was the Casey Anthony trial. She actually walked out of jail this weekend, released just after midnight Sunday morning. And to no one's surprise, she's gone into hiding.
CNN's David Mattingly covered the trial for us -- David.
DAVID MATTINGLY, CNN CORRESPONDENT: Kyra, she walked right out the front door, surprising everyone who was expecting some kind of subterfuse and some sort of deception to distract the attention of the large crowd that had gathered outside the jail. But, she walked right out. Her departure, from the time that she walked through the door to the time she got in the car and went off to the expressway lasted all of about 30 seconds. People were very emotional. Some were yelling "killer" as she got into her vehicle.
But at this point, today, the question of where she is remains unanswered publicly. We have heard from the attorney representing her parents that Jose Baez actually approached Casey Anthony's parents with the idea that they could act as decoys while their daughter was able to leave. They didn't go for that idea. They did then received a text message later to let them know that Casey was safe but they do not know where she is. They do suspect, however, she is no longer in central Florida, Kyra.
PHILLIPS: And from what we understand, the parents saying she's not welcome back in their home, correct? And in addition, what happens next with regard to authorities? I mean, there's no more protection for her.
MATTINGLY: Well, that's been reported about the family. We know that there's a very deep rift within that family. It all played out very painfully for everyone to watch on the stands.
What we're watching now is the mounting legal battles that Casey Anthony will face in civil court after this is offer. The biggest one and the one looming first will be the state of Florida trying to seek compensation for everything they spent on this case. That bill could be hundreds of thousands of dollars, potentially and they will be asking Casey Anthony to pay some or all of that back.
Again, we don't know the total but she will be fighting that to see what sort of settlement they can reach.
PHILLIPS: All right. David Mattingly, appreciate it.
Well, the debt clock is ticking. Deal or no deal? plan A, plan B? Well, now Republicans are pushing something called cut, cap and balance. Are you confused? It's understandable.
That's why Candy Crowley tries to straighten it out for you.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT (voice-over): Buzz word alert --
SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: Cut, cap, and balance gets us out of debt over a long period of time.
CROWLEY: Cut, a substantial amount of spend thing to bring down the roughly $1.5 trillion deficit expected this year. Cap, federal spending at 18 percent of gross domestic product is at 24 percent of GDP now. Pass a balanced budget amendment to the constitution that includes spending caps and makes it difficult to raise federal taxes. Cut, cap, and balance. CCB is all the rage in some Republican quarters. MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: The answer for the country is for the president to agree to cut federal spending, to cap federal spending, and to put in place a balanced budget amendment.
UNIDENTIFIED MALE: The House will be in order.
CROWLEY: This week, the Republican controlled House will likely pass a cut, cap, and balance bill as a prerequisite to raising the debt ceiling. There are mighty objections from Democrats on the hill and in the White House.
JACOB LEW, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: What these amendments do is not just say you have to balance the budget, but it puts in place spending limitations that would force us to cut Social Security and Medicare more deeply than even the House budget resolution.
CROWLEY (on-camera): What the House will almost surely approve the Senate almost surely will not, leaving the debt ceiling issue precisely where it has been for months, unresolved.
If can you not get the Senate to pass what the House surely will this week, you will allow the U.S. to go in default or you will go to a plan B?
GRAHAM: I'm going to focus on plan A. That, to me, is the only plan that will work. It's the real deal, not a big deal.
CROWLEY (voice-over): The most probable deal still in the works would cut spending by $1.5 trillion over 10 years and let the president raise the debt ceiling through the 2012 election. Congress could stop him but only in the unlikely event of a veto-proof majority vote in both Houses. Everybody gets off the hook, and it avoids economic chaos.
SEN. JON KYL, (R) ARIZONA: At the end of the day, Republican leaders have made it clear that we will not be the ones who put the government into default.
CROWLEY: It's uncertain whether Republican rank and file will follow their leaders. The idea comes from SENATE GOP leader, Mitch McConnell, who has been trashed by conservatives ever since.
REP. JIM JORDAN, (R) OHIO: We're in big trouble, so let's have that national debate --
(CROSSTALK)
CROWLEY: Sources say the last-ditch McConnell plan could be on the Senate floor this week.
CROWLEY (on-camera): But a Republican source believes before the McConnell bill, the Senate will take up cut, cap, and balance because even if CCB doesn't pass, it has endless possibilities as a CBS (ph) campaign bumper sticker.
Candy Crowley, CNN, Washington.
(END VIDEOTAPE)
PHILLIPS: We're going full speed toward the debt ceiling deadline and Congress still won't take the wheel. Will the country run out of money or patience first? We'll debate it.
Plus, grounded by golf ball-sized hail. A bunch of planes damaged and a bunch of passengers stranded. Details, straight ahead.
(COMMERCIAL BREAK)
PHILLIPS: Two weeks till the government runs out of money and politicians are just running their mouths. All the crisis talks, negotiations, accusations and still nothing solved to break the debt ceiling deadlock.
(BEGIN VIDEO CLIP)
SEN. JIM DEMINT (R), SOUTH CAROLINA: We need to realize, setting all politics aside, that our country is on course for a financial disaster. We can't take another $10 trillion in debt that the president has proposed.
JACOB LEW, WHITE HOUSE BUDGET DIRECTOR: We think that the president has said clearly we should do as much as we can to reduce the deficit, but we have to avoid the kind of chaos that would result from default.
(END VIDEO CLIP)
PHILLIPS: Joining us now to talk about the mess, CNN contributors Will Cain from New York, LZ Granderson from Grand Rapids, Michigan.
OK guys, and on top of all that, Americans still feel confused. I mean, how many times do you have people come up to you and say -- and Will I know it's happened to you. LZ, I'm assuming it's happened to you.
Just explain this debt ceiling to me, all right? In 60 seconds or less, tell me why I should care. Why is this your lead story?
So, Will, go. Sixty seconds.
WILL CAIN, CNN CONTRIBUTOR: Yes, Kyra. People hate this debate. It's boring. They're right. It's very boring. But I'll break it down and LZ can tell everybody where I'm full of it.
Here's the deal. Republicans, having seen the light --
LZ GRANDERSON, CNN CONTRIBUTOR: You're already full of it.
CAIN: Always? Now, Republicans realize we've got to dedicate ourselves to small government and responsible budgeting. But here's the deal. They're dealing with the president and Democratic Party that have no interest in either. So they've got to get them over a barrel. This is their theory. So they decide to hold the debt ceiling hostage. Bad strategy. You have to raise the debt ceiling. There is no if, and's or but's. You have to.
So it will be raised, you'll get minimal spending cuts but here's the problem. Sooner or later, Americans, we're going to have to have a debate. Either you get your entitlements and all the spending you want, or you get higher taxes. You can't have low taxes and high spending. We have to have that debate.
PHILLIPS: Is there any way, anyway, LZ, you can negotiate a combo of tax increases and entitlement cuts where everybody is happy and you think, oh yes that's great? That's a fair deal?
GRANDERSON: I haven't been anywhere in my life where everybody in the room was happy. So I don't think that you're actually going to get that. There's one thing I want to challenge my buddy Will about though is that, you know, this ideal of small government sounds really great. But there's 350 million people in this country. It's kind of hard to run this like it's back in the 1700s.
When there's a tornado that rips through the middle of the country, people look at the government. Katrina, people look at the government. You got to have to have a sizeable government to work with the large size that this country is right now. I do agree that we need to make some cuts. We need to make cuts in the middle class with Social Security, with Medicare or Medicaid.
But, come on. Oil companies are making record profits so at some point we have to look at the rich folks, too.
CAIN: But, LZ, you're willing to --
GRANDERSON: Yes.
CAIN: But you're willing to grant we have to make cuts on Social Security and Medicare?
GRANDERSON: Yes. Yes, yes, absolutely. I think it's irresponsible for them to draw a line in the sand and say we can't touch these programs. I think every program should be up for debate because I believe there's fat in every program.
PHILLIPS: Oh look, we've got a little bit of agreement there among both of you. OK, let's move on to subject matter number two -- Bachmann quitting her church.
Let me ask you guys. Will, I'll start with you. Why should it matter where our presidential candidate worships?
CAIN: Kyra, look, I'm not a religious guy. This is -- it matters to me less than others. But I understand why it matters to people. Where you worship, what kind of value and belief system you have informs a lot of who you are and how you might make decisions that you can't plan for. I don't know if there's that big of a difference between whether or not you go to the Episcopalian church or the Lutheran church. But if you're a Christian, a Muslim, you're a nonbeliever, I think people should be interested in those things. It means something. PHILLIPS: LZ?
GRANDERSON: Well, I'm like my buddy, Will. I don't hate God. So, I actually --
(CROSSTALK)
PHILLIPS: Now we're going to debate creation. OK. This is got to get interesting. Go ahead, LZ.
GRANDERSON: I think it's important to know what a candidate's affiliations may be and so I do tend to agree with Will that it's important that we just know where some of their philosophy may be coming from.
But with that being said -- and I sort of blame this on President Obama when they were calling him a Muslim -- it's more important that we remind each other that it doesn't matter. When people were accusing President Obama of being a Muslim, instead of saying he was a Christian, he should have said this is America and it doesn't matter. And I think ultimately, even when we find out where Michele Bachmann goes or doesn't go, ultimately we should know as Americans, it doesn't matter.
PHILLIPS: And real quickly, Will, you were saying, this won't be the last we hear about religion. We're going to hear about other religions, other candidates?
CAIN: Yes. I think Michele Bachmann and what church she goes to is in the news right now because Bachmann's in the news right now.
But sooner or later, you know, for better or worse, we're going to start talking about Mitt Romney and Jon Huntsman and the Mormon church, just as we talked about Barack Obama and what church he went to.
PHILLIPS: Will, LZ, thanks for weighing in, guys. Look forward to our next conversation.
CAIN: Thanks a lot, Kyra.
GRANDERSON: Thank you.
PHILLIPS: You bet.
An inner city Chicago church choir taking the trip of a lifetime to L.A. They even raised the money they needed, well, until they saw the bill for the airline fees.
(COMMERCIAL BREAK)
PHILLIPS: Well, they love to sing their hearts out and the choir for the White House Church of All Nations, wanted to take it on the road. They had a plan to fly to L.A. for a tour this month. The Inner City Church even raised the $25,000 to pay for the airline tickets out there. Well, it turns out that just wasn't enough. Spirit Airlines said the group would have to pay an additional $6,000 for the group's equipment to go along with them.
So let's talk about this. Joining me is church pastor Dan Willis and 16-year-old church member Otis Wright. I'm glad to have you back or with us guys. Pastor Willis, talk about what trips like this mean for these kids.
DAN WILLIS, CHURCH PASTOR: Well, we're taking almost 100 kids with us, Kyra. And thank you so much for having us here on CNN today. We're taking almost 100 kids, mostly Inner City kids that are involved in our youth choir. It's very important to remember, this is our youth -- these are teenagers, young people that have been working for a year.
You know, there are so much violence has happened in Chicago. Everybody has heard about it, all around the world. And so our church being the largest multicultural church on the south side of Chicago, we're very, very focused on keeping these young people involved and off the streets and giving them something constructive to do.
So this is one of the programs they've been focused on for a year, raising the money. It's not just one week of the year they're going to be gone. They've been engaged for a year preparing, you know, not only rehearsing and that, but raising the money to go. And then this happens.
PHILLIPS: Well and Otis, I was reading about you. You were in a foster home. You were adopted by a member of this church. You got involved with the choir. It's totally made an impact on your life.
Tell me how these trips inspire you and what you say to the kids when you go on tour. Because I know you mentor to these kids.
OTIS WRIGHT, CHURCH MEMBER: Right. Yes, Kyra. And also this trip means the world to these kids because we raise a lot of money. And we worked really hard to go on tour. And we -- we just got hit with an unexpected fee.
PHILLIPS: And so, Pastor -- you know, I'm going to be -- this will be appropriate -- a devil's advocate here. Ok, I'm going to get struck by lightning in two seconds.
WILLIS: Oh sure.
PHILLIPS: Ok?
WILLIS: Oh no, no problem.
PHILLIPS: The airlines -- the airlines are going to say, now come on, Pastor, you knew how much this is going to cost, you know how much equipment you have to haul, you know how many people you had to fly. It's a tough time for us right now. We've got to charge these fees. We're not a charity. WILLIS: You know what, Kyra and you're -- you're perfectly correct. But it really comes down to our e-mail, when we booked on March 10th states to us plainly that the rate would be $469 per person including and it says it very plainly here, all airport taxes and fees. And that if we took an earlier flight, that they would take $120 off.
So, we did that, which made it about $350 a student. So, that's how much they paid. So, $350 and then we're raising the money for hotel and transportation and food and that.
But they had to pay the $350. Well at -- then they tell us, no. Baggage fees was not part of "fees." Well, it just simply said "fees". So that's where the shock came because it said -- it plainly says, "all fees". We assumed that meant baggage fees, too, you know.
And now I want to correct something. It's not just going to be $6,000. If we don't -- they're telling us now if we don't prepay this week, we're ten days out from this trip, if we don't prepay it's not going to be $6,000, it's $20 more per student round trip. It will become an $8,000 prepay.
So it's exponentially increasing by the day when we were working under the assumption of it being included in the fee these -- these young people have worked so hard to raise this money.
(CROSSTALK)
PHILLIPS: And just to --
WILLIS: And we really --
PHILLIPS: -- and understandable and just -- just to be fair and I'll let you have the last word, Otis because I want to see what your message is to the Spirit Airlines. But real quickly Spirit did provide a statement and it said "Compared to other airlines fares and fees, Spirit provided this group with added value by offering fares much lower than those available on other carrier. Even if you chose to add a bag customers can save money with Spirit versus other airlines. We can't keep our fares low for all our customers if we make exceptions."
Before I let you go, Otis, what's your message to Spirit Airlines? What do you want?
WRIGHT: I just -- you know, we're begging and pleading, you know, to like just drop the fee because we worked so hard, and it's like, it's not an option for us not to go. We've worked hard. We've been practicing for a year.
(CROSSTALK)
PHILLIPS: Well, I -- and I -- it's true and I've seen all of you all sing, and I know what you -- what kind of impact you've made on other Inner City kids throughout the country. And we wish you guys the best of luck.
Pastor Dan Willis and Otis Wright. Thanks, guys.
WILLIS: Right. Thank you so much, Kyra.
WRIGHT: All right, thank you so much.
WILLIS: Thank you.
PHILLIPS: You bet.
WRIGHT: Thank you.
PHILLIPS: Well, coming up the "Atlantis" crew's final farewell to the International Space Station. Emotions running pretty high for today's ceremony. We'll take you there.
(COMMERCIAL BREAK)
PHILLIPS: All right. We're following a lot of developments in the next hour of the CNN NEWSROOM. Let's check in first with Dan Rivers out of London -- Dan.
DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, well we're going to be bringing you the latest on the phone hacking scandal. Another resignation, this time assistant commissioner John Yates has stood down just less than 24 hours after his boss Sir Paul Stevenson quit. He's the most senior policeman in Britain.
The scandal just keeps getting bigger and bigger, everyone wondering who is going to go next.
BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: I'm Brianna Keilar at the White House. We're just a little over two weeks from the date when the Treasury Department says the U.S. will default on its loan obligations and still no deal on deficit reduction between the White House and congressional leaders. I'll have the latest at the top of the hour.
TED ROWLANDS, CNN CORRESPONDENT: I'm Ted Rowlands in Minneapolis where record temperatures are making life pretty miserable for people here and for people across a huge section of the United States. We'll talk heat coming up at the top of the hour.
PHILLIPS: Thanks guys.
And after yesterday's loss in the women's World Cup, hearts were pretty broken all over the U.S., but maybe you can take some solace in Japan's win. Undoubtedly it's a country that needed a little good news. We'll take a look at that next hour.
(COMMERCIAL BREAK)
PHILLIPS: Darren Clarke, rock star. But it took 20 years to get there.
JEFF FISCHEL, HLN SPORTS ANCHOR: His 20th shot at the British Open. How about it and he looked good, man. You know, I'll tell you what? It always takes a little luck at the British Open, the courses are little crazy, the weather. And you know, a couple of times he hit balls that skidded right over sand traps. And it's just one of those good days.
He got a challenge though, from a couple of Americans. Dustin Johnson and look at Phil Mickelson, had a rolling early, actually got into a tie with Clarke, but Clarke made it work. His first major title at 42 years old.
How about Northern Ireland, you've got Rory McIlroy and Graham McDowell and now Clarke. There he is, the new British Open champ. Almost folded up, not quite.
How about some pro-am golf. Joe Sakic the former hockey star. This is at -- this American Century Championship at Lake Tahoe, Par 3 and the former NHL star, the hole in one. He won two Stanley Cups, an MVP with the Colorado Avalanche. That's worth $1 million, right there. He split it 50/50 with Lance Armstrong's Live Strong Foundation.
And then, there's Charles Barkley also at Lake Tahoe. It's an ugly golf swing. One hand. It might work better, and it did. He was still wide right, but he's really not even that good. I mean, he's just -- he's just the worst. I mean, he's a great basketball player, he's fun to watch on TV, he's a bad, bad golfer.
PHILLIPS: Forget the golf. There are just some things he shouldn't do.
(CROSSTALK)
FISCHEL: Credit to him, though. He keeps showing up. He doesn't hide.
PHILLIPS: He is. Thanks, Jeff.
FISCHEL: Ok.
PHILLIPS: Well, they're all packed and ready to return to earth, but first the "Atlantis" crew had to say good-bye to their friends at the International Space Station. There has been dozens of this farewell ceremonies over so many years. But this one will definitely stand out.
CNN's John Zarrella joins us to talk about the final goodbye -- hey, John.
JOHN ZARRELLA, CNN CORRESPONDENT: Hey, Kyra. Yes, sad day. And in fact, you're absolutely right. This was it, the last time that a space shuttle would be visiting the International Space Station. They had a brief ceremony and it just concluded a few moments ago, where the two crews -- the six space station crew members, the four shuttle astronauts got together and they said goodbye. They put an American flag up on the hatch. And a little bit of history. That American flag flew on the very first space shuttle and then next time a U.S. crew comes up to the space station on a commercial vehicle, they'll retrieve that American flag, bring it back to earth, and then that flag will fly on the very first deep space mission sometime in the future -- Kyra.
PHILLIPS: All right. John Zarrella, we'll be watching it all. Thanks.
