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Interview With Former Labor Secretary Robert Reich; Clock Ticks Toward Debt Deadline; Debt Ceiling Negotiations Stalled; Amy Winehouse's Death Still Undetermined; Recession Effecting Jobs of Men More than Women

Aired July 26, 2011 - 15:00   ET

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

BROOKE BALDWIN, CNN ANCHOR: And hello to all of you.

You know what? The debt ceiling deadline, it is one week away now. We're at that seven-day mark, and one week from the day we have all been warned all financial hell could break loose unless Washington increases the nation's borrowing power. And while there's plenty of partisan bickering in public, there's still no clear sign that anyone is ready to compromise on a deal to increase the nation's credit limit.

Couple of things happening today. First up you have the White House. They are calling in the troops. Veterans group are heading right there to 1600 Pennsylvania Avenue to be briefed on what could happen to their ranks if the debt ceiling is not raised. Also, CNN is learning just this afternoon that some states are making contingency plans.

In fact California specifically taking out a temporary $5 billion loan just to help pay its bills in case Congress fails to act and turmoil in the credit market makes it impossible for the state to borrow money after next August 2 here.

But take a walk with me because I want to look at what exactly is being proposed here. You have these two different plans as we sort of lined out for you, two different bills on the table. One is from Democratic leader in the Senate. You have Senate Majority Leader Harry Reid, and also from Speaker of the House Boehner there. So here we go.

First up, as we mentioned before, look, they definitely have some similarities. First of all, both of them would cut spending. Also neither plan would raise taxes. But there is one really huge difference that we need to highlight. The Reid plan would raise the debt ceiling beyond next year's presidential election, but the Boehner plan here would raise the debt ceiling in two different steps setting up the possibility that we could be having this whole entire debt ceiling debate, this whole thing could be happening right around election season.

As it stands right now, it's highly unlikely that the House would pass the Reid plan or that the Senate would pass the Boehner plan. So here we are essentially. To quote the president last night, we're at a stalemate before the deadline of August 2. That is the final day the White House says the United States will have enough money to pay all of its creditors.

Let me say this. We're talking money here. This is unchartered territory. No one knows for sure what exactly will happen if we all wake up the morning of August 3 with no increase in the debt ceiling. But economists warn that interest rates are likely to jump. How will that affect you? Mortgage rates, that would affect if thank have an adjustable rate mortgage, an ARM, if you're looking to buy a house, or refinance, or maybe you're looking to sell your house.

Higher mortgage rates would price some potential buyers just totally out of the market. Here is another practical example, car loans, right? If you're in the market for a new car, a car loan would most definitely cost you more. Another example, credit cards. You're going to pay more to keep a balance on your credit cards.

And one more here, one more example for you. You have one of these? The stock and bond markets could drop. And that means your retirement savings and mutual fund investments would take a hit. And we have been talking to a lot of you. And a lot of you are concerned about how a failure to raise the debt ceiling would affect your wallet. Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Concerned about Social Security for sure. It makes up quite a bit of my income, my basic income. And I think it's really important, however, that our country, that the people that represent us actually do represent us and really want the best for us.

UNIDENTIFIED FEMALE: If credit card interest rates went up, that would be a real problem for me. If it makes borrowing more difficult, you know, I want to buy a new car next year and that might be more difficult, you know, just things like that, you know, basic day-to-day things that I deal with, my credit cards, and trying to get credit like for a new big purchase.

UNIDENTIFIED MALE: I'm concerned that we're going to be going into the Social Security and the Medicare and things like that to help balance things off and then that's going to affect me personally.

UNIDENTIFIED FEMALE: People don't have jobs. We have this horrible economy and then you're going to let the debt ceiling cave in? What are they thinking? They have houses, they have cars, they get their pension, they don't have to worry about it, but there's people out here who do. And it's just clear that they don't care. Their concern is not for the people.

(END VIDEO CLIP)

BALDWIN: You hear all of that? Perhaps some of that resonates with you today.

I want to bring in Robert Reich. He served as labor secretary under President Bill Clinton and he's now a professor of public policy with the University of California at Berkeley.

And, Robert Reich, let's also let everyone know your authored "Aftershock: The Next Economy and America's Future."

I want to begin with you. I know we have you on and I want to talk jobs because I know that's what a lot of people want to hear about, right? But I first want to compare two scenarios. You were labor secretary during the government shutdown. That was I believe '95, early '96. And at the time businesses couldn't get loans guaranteed through Small Business Administration. Health services for veterans stopped. National parks were closed because, you remember, there just wasn't a budget.

So let me give you the if. If Congress cannot reach a deal on the debt ceiling by one week from today, how, sir, would the impact compare to what we experienced during the government shutdown of the mid-'90s?

ROBERT REICH, FORMER U.S. LABOR SECRETARY: Brooke, it would be much worse.

A government shutdown is one thing. But even in the government shutdown vital government services continue. People got Medicare checks and Medicaid. They got Social Security, unemployment checks. And the government continued to pay its creditors what was due.

But if the debt ceiling is not raised next week, none of that happens. Government simply doesn't have any money to pay Medicare, Medicaid, Social Security, unemployment insurance, nor can it pay its creditors. It has a limited amount of money but that amount of money continues to dwindle as it tries to pay off everybody it owes.

And that's why interest rates will go up, because everybody who owes money or the government owes money to, including international lenders, are going to get nervous.

BALDWIN: OK. So you're saying the situation would be worse, right, come next week. But I have also done some reading here. And you say that the budget deficit isn't our biggest problem; it's joblessness. Let me ask you this. What does Washington need to do, Robert Reich, with regard to the debt ceiling, all these deficit negotiations that would create a better atmosphere for job creation and higher wages?

REICH: Well, for one thing we have got to, I would say, exempt the first $20,000 of income from payroll taxes maybe for the next two years. Another thing we could do is for the federal government to amend bankruptcy laws so people who are struggling to pay their mortgages could declare personal bankruptcy on their primary residence, something they cannot do right now. That would give them more bargaining leverage with their lenders.

A third thing we could do, Brooke, would be to have a -- what was done during the NEW DEAL, a WPA, Civilian Conservation Corps, so all of the long-term unemployed instead of sitting there, some of them collecting unemployment insurance, could actually be put to work doing things that are not now being done. We could repair our infrastructure, repair our parks, teacher's aides, all kinds of things that are necessary. Now, granted, this would cost some money in the very short-term, but it would not cost nearly as much as what we are now enduring, which is a huge amount of joblessness.

BALDWIN: Huge amount of joblessness. You have cited several different examples. Bottom line, we know that Congress has to pay -- we keep hearing the president say we have to pay the bill, we don't walk away from the bill. Really it's a debt.

And we heard the president as recently as last night talking about how without revenue increases, which we know now by looking at the Boehner and the Reid plans, neither of which have at least up front. And so we're going to have to cut, and so the president specifically cites cuts from education, from infrastructure, energy.

How would those cuts, Robert, make the job crisis even worse?

REICH: Well, if the cuts were done now when we have almost 15 million Americans who are unemployed, when we are so much short of our total productive capacity because so many factories and offices and retail establishments and commercial establishments are shuttered, if we started cutting now, that would mean even fewer jobs, even less money in circulation in terms of buying things.

That would mean more joblessness and a worse economy. That's unthinkable. You know, Brooke, the fundamental mistake here is to assume that the -- and this is a political problem. It's not an economic problem. The political error is to connect deficit reduction over the next 10 years with raising the debt limit next Tuesday. There's no reason that the two of them had to be or have to be connected.

BALDWIN: Well, the Republicans when you talk about -- let's go back to jobs -- the Republicans argue that by raising taxes, that will keep businesses from creating new jobs. And that's been their huge sticking point.

We know you worked with the Clinton administration and we know that he raised taxes during that time. And 23 million jobs were also created during his eight years in office. What does President Obama need to do to get the job market at least moving in that same direction?

REICH: Well, as I said, there are many things that can be done. If you're talking about raising taxes, we know that when President Bush reduced taxes, mostly on the wealthy, we didn't get a huge, huge job response.

As you said, 22 million new jobs during the Clinton administration. After President Bush reduced taxes on the wealthy, we had only eight million jobs in his eight years of his administration. And the median wage, that is, the wage of the typical worker, continued to decline. For the first time in history, we have seen a recovery when that occurred.

So reducing taxes on the wealthy, nothing trickles down. We have tried trickle-down economics for years, Brooke, and it has not worked.

BALDWIN: So what will work, quickly?

REICH: Well, aside from the ideas I put forward just about three minutes ago --

BALDWIN: WPA, et cetera.

REICH: -- there are many other things that can be done.

An infrastructure bank that would enable the United States to borrow from international markets without affecting the budget, but nevertheless finance a lot of the roads and deferred maintenance that needs to be done on our bridges, our ports, our levees and put a lot of people to work as well. So there are five. I have given you now five things that can and should be done.

(CROSSTALK)

REICH: And unfortunately nothing is being done. We're just locked in this absurd contest over raising the debt limit.

BALDWIN: Robert Reich, I appreciate it.

He says if we don't come to something, this will be worse than the government shutdown back in the '90s. Heaven forbid we see that day again.

Thank you so much, sir.

REICH: Thank you.

BALDWIN: And now I do want to take you to Capitol Hill. I want to get you the latest here on all the wrangling, the absurdity, to quote my last guest.

Votes could come tomorrow on the debt ceiling bills proposed by Republican John Boehner in the House and Democrat Harry Reid in the Senate.

And CNN Radio congressional correspondent Lisa Desjardins has read through both these bills and has covered really every twist and turn here in this debt ceiling fight.

Lisa, any changes we should be aware of? Any meetings? There's always meetings behind the scenes. Any sign of, dare I say, compromise?

LISA DESJARDINS, CNN RADIO: OK, yes, a very, very small one, Brooke.

Just in the last hour, House Republican -- I'm sorry -- Senate Republican Leader Mitch McConnell said he is willing to accept something that is not perfect. So he's kind of opening the door to saying, I am willing to back down from my ideal. And he's sending this signal of course after last night where we heard all the very sharp words back and forth.

So that might be a good sign for compromise. But, Brooke, two signs going the opposite direction, first of all, we don't know that any plan has the votes to pass. And in fact, Brooke, in the House, Republican Speaker John Boehner is having trouble getting enough votes for his own plan. Right now it looks like he doesn't have enough Republicans to pass it. He's hoping for some help from Democrats. So that is high drama over on the House side right now.

And then the second thing, Brooke, we just heard from the White House a statement about Boehner's plan. The White House sent a strange veto threat, not the president issuing the threat but they said his staff recommends that he veto Boehner's bill. That's the president walking right up to declaring that he will veto it but still leaving it open if it's the only option.

BALDWIN: Yes, we had heard about the possible threat before, though he didn't explicitly say it last night at 9:00 Eastern. I will be talking to a member within the White House, within the administration coming up at the top of the hour. And I will ask her about that, Lisa Desjardins.

But before I let you go, we all watched last night. The president at the very end of his speech essentially called on Americans to pick up the phone, or get on the Internet, contact your member of Congress to express your views on what should be done here. Are the switchboard operators working on overtime there on the Hill? Are people calling?

(CROSSTALK)

DESJARDINS: Yes. I have the numbers. I just got them in the last half-hour.

Staff for the House tells me that the call volume today has been twice a normal day. And we do know that it shut down many House offices. If folks outside there are trying to call they know they are not getting through because the call volume is twice as high as usual. I will say a Republican spokesperson for this committee, the administration committee, said, noted that this is still not as high as the volume for the health care bill. So much higher than usual but still not at health care level.

(CROSSTALK)

BALDWIN: Well, bottom line, Americans are engaged. Lisa Desjardins, thank you so much.

DESJARDINS: That's right.

BALDWIN: And a little later in the show, I will speak with Jay Powell. He was Treasury undersecretary under first President Bush and we will be talking about a possible backup plan in case no actual plan, no actual deal is made come August 2. Stick around for that.

But coming up, we are learning some new details about that suspect who says he slaughtered 76 people at Oslo, Norway, including drugs he took before the attacks. We're learning about this today, also how his attorney plans to defend him in court.

Also, ahead a drunk driver hits and kills a 4-year-old Georgia boy. So why is the boy's mother being punished here? We will be right back.

(COMMERCIAL BREAK)

BALDWIN: You know President Obama and Vice President Biden paid their respects today, just this afternoon, to the victims of Norway's domestic terror attacks.

They visited the home of the Norwegian ambassador to the United States. They sat there, signed a condolence book. The president wrote that -- quote -- "Thoughts and prayers of all Americans are with the people of Norway."

Another somber visit today, this one by Norway's prime minister to the site of the massive car bomb explosion there near his office in downtown Oslo. That explosion killed eight people and preceded the horrific shooting spree at a youth camp just about 20 miles away on that island last Friday.

Let's go live now to Oslo to my colleague Michael Holmes who is there.

Clearly, Michael, though the memorial growing behind you. Talk to me a little about it. We're learning some of the names of the victims today, names of some of the 76 people killed last Friday in and around Oslo.

MICHAEL HOLMES, CNN CORRESPONDENT: Yes, Brooke, I want to combine both of those things into one. I will get Clayton (ph), our cameraman, to pan around while I talk about the memorial that is growing here every minute.

All day -- we have been here all day. And people have been coming through in the hundreds, thousands really and placing flowers, flags, candles, all kinds of little mementos, drawings by kids to honor those who were slain by Anders Breivik.

And it's been a very moving, moving day, actually. It's very quiet here, a very respectful, dignified scene. There's like literally thousands of people have come. You mentioned the names. That's right. The police today saying that they will complete all identifications by the end of the week formally and they're starting to release names. They will do so every day at 6:00 local time.

And today the first four names. And while we continue to look at this memorial, I think it's important we read them and put names to these numbers.

BALDWIN: Please.

HOLMES: The first four to be named today, Gunnar Linaker, age 23, Tove Knutsen, 56, Hanna Endresen, age 61, and Kai Hauge, age 32. So age from 23 through to 61, the first of the victims of Anders Breivik named today by police and there will be more tomorrow -- Brooke.

BALDWIN: Look at those flowers. Look at that picture. Michael, I do have to ask you about the suspect, Anders Behring Breivik.

His defense attorneys spoke to reporters today. They are not painting the most flattering of pictures, shall we say, of their client. But they are also not denying that Breivik has confessed to killing these people.

HOLMES: Yes, absolutely.

This is the interesting thing. He has admitted to everything. He says, I did it and I don't regret doing it either. He say it was part of a war. He said that he wanted to start a revolution in Europe. But he said that this is all part of a war and everyone will understand why in 60 years from now, real ranting stuff.

His lawyer, though, Geir Lippestad, gives a real insight into how this guy is thinking. He said that from the facts of the case, the guy is insane. But he's still deciding whether he will use an insanity verdict.

Have a listen to part of the news conference, Brooke.

(BEGIN VIDEO CLIP)

GEIR LIPPESTAD, ATTORNEY FOR ANDERS BEHRING BREIVIK: I can't describe him because he's not like any one of us. So it's very difficult for me to describe him.

This whole case has indicated he's insane. He's in a war and he says that the rest of the world, especially the Western world, don't understand his point of view, that in 60 years' times, we will all understand him. He shows hate to everyone is democratic, everyone who lives in the Western world, everyone who believes in the normal political system. So anyone, anyone who is not an extremist, he will hate.

(END VIDEO CLIP)

HOLMES: And of course Breivik now has spent his first night, about to spend his second night in solitary confinement, having been remanded for eight weeks before his next court appearance, Brooke.

BALDWIN: Michael Holmes for me in Oslo, Michael, thank you so much.

And I want to remind you just to stay with CNN. We're going to explore more, the mind, possible motivations of this bombing and shooting suspect. In just a couple of minutes a professor and an author who is reading Breivik's purported 1,500-page manifesto, he's tweeting his thoughts. Jeff Charlotte (ph) joins me here a little bit later on CNN with more on what he's learning. Coming up next, though, a hit-and-run accident killed her 4-year- old son, and a drunk driver was charged and spent six months in prison, so why is this little one's mother being punished here? She was in court today to hear her fate and now she is speaking out. That is coming up next.

(COMMERCIAL BREAK)

BALDWIN: A Georgia mom could have gotten more prison time than the hit-and-run driver who killed her son, won't spend any more time behind bars here. A judge sentenced Raquel Nelson to 12 months probation and community service. She was convicted earlier this month of second-degree vehicular homicide and two other misdemeanors in the jaywalking accident that killed her son.

That story got a lot of people's attentions because Nelson initially faced up to 36 months in prison, a sentence six times longer than the time served by the driver who hit and killed her son. This accident happened last October. Nelson and her three children, they got off a bus at a stop across from their apartment building. This is north of Atlanta -- when 4-year-old A.J. broke away from her and started running across the street.

And a driver swerved around, hit and killed him. Nelson and one of her daughters were slightly injured. She told NBC's "The Today Show" that the nearest crosswalk was a third-of-a-mile from the bus stop and she was just trying to cross the road before it got dark.

The driver who hit Nelson's son took off. But police did catch up with him. He was sentenced to five years in prison, but served a mere six months. He is on the probation for the rest of his sentence. Raquel Nelson says she couldn't have gotten through this whole ordeal without the support from her family, her community. In fact here is what she said just a couple of hours ago.

(BEGIN VIDEO CLIP)

RAQUEL NELSON, DEFENDANT: I would really like to thank everybody for your concern and support and helping get the message out there. And hopefully we can move on from this situation better than we have been throughout this situation.

And I would like to thank everyone who showed up today, all of you guys, everyone who showed up and told me that they love me and they really cared about the situation. It helps a whole lot.

(END VIDEO CLIP)

BALDWIN: The judge also offered Nelson the option of a new trial. And her attorney tells "The Atlanta Journal Constitution" that he thinks they will move ahead with that. I will have more on this story in our 4:00 hour with Sunny Hostin.

Still ahead, he's accused of making unwanted sexual advances on a teenage girl. His campaign staff has said he needs psychiatric help. Now, today, a surprise announcement from a seven-term congressman. Plus, another casualty in the shaky economy -- why your local post office could soon be closing its doors.

(COMMERCIAL BREAK)

BALDWIN: Couple top stories for you here, including a seven-term U.S. representative from Oregon is now resigning from Congress. Democrat David Wu is accused of making unwanted sexual advances on a teenage girl last year. The accuser is reportedly the daughter of one of the congressmen's campaign fund-raisers. The House leadership announced an ethics investigation into those accusations just yesterday. Wu had already said he wouldn't run for another term.

"Good night, my angel," those words reportedly from Amy Winehouse's father to his daughter today. A rabbi led the Grammy Award-winning singer's small private funeral in London, while hundreds of Winehouse fans gathered outside of her apartment. British police do not expect to know the singer's cause of death for, they are estimating, at least a couple of weeks. Amy Winehouse was found dead Saturday. And MTV plans to honor Winehouse by airing a 2007 concert performance tomorrow night.

A small town post office could get the axe as the postal service is struggling to close a $20 billion revenue gap. Today the postmaster general release ad list of 370 potential closings in all 50 states, including the nation's capital there. The closings could begin as early as January and would eliminate at least 4,000 jobs. Most of the endangered branches have so little foot traffic they have less than 50 bucks a day in sales. The postal service is also considering a plan to reduce service to just five days a week.

And we are just one week away, one week until about 70 million checks go out to Social Security recipients the week before the U.S. defaults on debt if no deal is reached. Will U.S. find a way to pay recipients, and is there a back-up plan in place? Coming up next I'll talk with a man who knows some of the answers to those questions. We'll be right back.

(COMMERCIAL BREAK)

POPPY HARLOW, CNNMONEY.COM: Time for Help Desk, where we get answers to your financial questions. Joining me now Jack Otter, the executive editor at CBSmoneywatch.com and Ryan Mack, the president of Optimum Capital Management. Thanks for being here, guys.

First question comes from Eric in California. Eric writes "I have the cash rewards credit card which I use to pay for everything. I always pay it off within a week or so and never leave a balance when my statement comes around. Can this hurt my credit score?"

JACK OTTER, EXECUTIVE EDITOR CBSMONEYWATCH.COM: No. Eric, you rock. If we all followed Eric's example we'd be in great shape. Keep doing it. The credit card companies don't like him. They are giving him cash and he's not giving them any interest rate love. Stick with it, keep paying it off. At some point could you have a blank credit score because you've never borrowed money? Yes. But that problem is so small compared to the dangers of carrying too much debt, don't worry about it at all.

HARLOW: Good to have an example for of us. Ryan, your question from Julia in Atlanta. Julia writes "I'm newly married. My taxable income is $50,000, and my husband's is $275,000, can I contribute to a Roth IRA under my name if we file jointly? What if we file separately?"

RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Well, filing jointly, the answer is no -- $166,000 for jointly filing eligible for $166,000, so I believe 179 phases out, 179 plus you're not eligible for contributions. For an individual, if she's filing by herself, 107 below eligible, 107 to 122 phases out, 122 or higher she's not eligible.

The biggest question here is making sure they is the down and talk about their finances. That's a big huge discrepancy of income. How much is he going to contribute, she going to contribute, newly married, lot of conversations need to be had.

HARLOW: Or before you walk down the aisle.

MACK: Exactly.

HARLOW: Right, that's pretty important. Thank you guys, very much. And if you have questions you want answered by our experts just send us an email any time to CNNHelpdest@CNN.com.

(COMMERCIAL BREAK)

BALDWIN: The debt ceiling deadline is one week away, one week from the day we have been warned all financial hell could break lose unless Washington increases the country's borrowing power. And while there is plenty of bickering, there's no sign anyone is willing to compromise on a deal to increase the nation's credit limit.

This hour the White House is calling in the troops, veterans groups been summoned to the White House to be briefed on what could happen to their ranks if the debt ceiling isn't raised. Also a vote could come tomorrow on competing debt ceiling bills, one proposed by Senate Majority Leader Harry Reid and the other by the speaker of the House John Boehner.

Right now I want to bring in Jay Powell. He served as treasury undersecretary under the first President Bush. Mr. Powell great to have you on. Just so set the stage, be we Have been talking a lot about debt ceiling lately, how many times did Congress raise the ceiling during your time, the treasury?

JAY POWELL, FORMER TREASURY UNDER SECRETARY FOR FINANCE: It's been 20 years, BUT two or three times. And they weren't as stressful as this but there was a little bit of private hair pulling.

BALDWIN: I do know a number, Congress acted 78 times since 1960 to raise the debt limit. Point being this has been done more than a few times before. We hear Secretary Geithner's warnings, hearing them all morning long since before January. We know we hit the ceiling in May. What is it, Mr. Powell, that makes this time more difficult, so different?

POWELL: What's different is the people in the country are very upset, and appropriately so, at our unsustainable fiscal position. Our budget deficits are just at record levels. There's not a lot of faith Congress will do anything about it. That explains 2010 elections and it explains all the energy that's going into doing something now in connection with the debt increase that will return us to a sustainable fiscal path.

BALDWIN: We heard from the president week before last in an interview and talked about it since about those Social Security checks. Something like 70 million supposed to go out to Social Security recipients oddly enough the day after this deadline on August 3rd. If Washington doesn't come up with something, sir, won't the treasury still find a way to pay these men and women?

POWELL: First of all, there won't be a bond default. They will find a way to pay the debt as a matter of first priority. After that, there is a possibility that the Social Security payment due August 3rd would be delayed, and a much greater possibility that the payment due August 10th will be delayed. It won't be delayed -- it's not that the payment won't be made. It's that the payment will be made a little bit late.

BALDWIN: OK, ultimately people would be getting checks just not on time. You were there at the treasury. Good thing you're not there, thought I imagine you're nervous thinking about what these folks are dealing with. What kind of triage might be taking place at treasury now?

POWELL: I assume in the administration there's a lot of contingency planning going on. I imagine the bond default is a low probability. Either the administration is thinking its way through what it would pay and wouldn't or taking the position, hopefully we'll never find out, they may take position they don't have the authority to decide who gets paid and who doesn't get paid and let the bills be paid in the order they due out of available cash. And that way the decisions are made effectively by the clock rather than by the administration. They may decide to do it that way.

BALDWIN: So Treasury is developing contingency plans, we also just learned this afternoon, CNN learned in California, for example, the treasury department there on the state level is asking for this emergency bridge loan to help continue funding if something isn't -- if a compromise isn't reached. Do you see that as an extreme measure?

POWELL: In California?

BALDWIN: Yes.

POWELL: I don't see that as extreme. California borrows regularly. California has good market access despite it's extremely well reported credit problems over the years. It's the lowest rated state tied with Illinois. They have had good solid credit market access and I don't envision. If you're asking about the federal government, nothing like that is remotely envisioned at the federal level.

BALDWIN: No, just at the state level you're not surprised.

POWELL: No.

BALDWIN: Finally, Mr. Powell, the world is watching the U.S. right now. And just to paraphrase what the new IMF chief said yesterday, I'm paraphrasing again, she said this thing is lurking in the background of each and every economy in the world right now. It doesn't get much more impactful than that, does it, sir?

POWELL: Well, they're really talking there about a bond default by the United States, which is the risk-free borrower. And again, I would say that is one of those incredibly consequential events that is very unlikely to happen. So yes, it's unthinkable, and it would have potentially grave consequences for the world economy. Again, low probability no matter what happens on the debt ceiling.

BALDWIN: Jay Powell, thank you so much.

POWELL: Thank you.

BALDWIN: Coming up next, friends and family say farewell to Amy Winehouse today as the music world still grappling with her death. The question on everyone's minds is could she have been saved. I'll speak with the man who knows the singer's addiction well. We'll ask him about that, plus what Amy's father is saying he will do to honor her.

(COMMERCIAL BREAK)

BALDWIN: Amy Winehouse, the woman with the soulful voice and terrible drug and alcohol addiction. Friends and family shocked by her death over the weekend, though not entirely surprised. They're still talking about it, tweeting about it, it is trending today.

Her funeral and cremation in London was attended by those very close to her today. A formal cause of death is expected to be released in October after results of a toxicology test come back.

But her father did release a statement. I want to read part of it here. Quote, "Knowing she wasn't depressed, knowing she passed away happy, it makes us all feel better. When I heard, I said I wanted an Amy Winehouse Foundation." He says it would help the things she loved, children, horses, and especially those struggling with substance abuse.

And speaking of, I want to talk to Dr. Howard Samuels, the founder and CEO of the Hills Treatment Center, and he's also a recovering heroin and cocaine addict and has seen both sides of the problem. Howard, first, just congratulating you. You've been clean and sober for 36 years. But reading about your background you are the son of a pretty prominent politician, and you're also helping other addicts now at the Hill treatment center. What is it about living with an addiction and what is it about this age 27? So many people seem to die at 27. HOWARD SAMUELS, FOUNDER/CEO, THE HILLS TREATMENT CENTER: Well, you know, it's around that age period -- addiction starts for people when they are a teenager, Brooke. And the addiction becomes more severe and more severe because you need more drugs to get high.

I started shooting heroin at 16 years old. I was in rehab at 20 and convicted flown at 20. That's why I went into rehab. When I came out of rehab I thought I could drink, because I was a drug alcohol. And so I started to drink and the alcohol took me back to heroin. And I'm shooting heroin again at 27, 28, 29 years old. And I OD-ed numerous times.

So in the late 20s your addiction becomes worse. For me I didn't hit my bottom until I was 32 and my family saved my life. So it's very bizarre that her father would say she died happy.

BALDWIN: She was happy, that's what he said.

SAMUELS: Yes.

BALDWIN: He was concerned about her health as we have read. And when you look at this video with me, I don't know if you have a monitor. The last time we've seen her public performance. I want to say this was in June when she was in Belgrade. If you watch her -- let's listen to her.

(BEGIN VIDEO CLIP)

(SINGING)

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BALDWIN: So she's stumbling. I just wanted to ask -- she's stumbling. At one point she meanders offstage. She's even forgetting the lines to a song. If you are a friend, a family member, if you know she's struggling with addiction and so many people did, why didn't anyone see this show and do anything?

SAMUELS: Brooke, that's the million-dollar question. My family started to see my addiction rise again. I've got to say they saved my life because they stopped enabling me.

There's a whole team around Amy that enabled her. Look at her. She's on stage. Agents, business managers, family members, they are all part of the problem. And that's one of the reasons why I believe Amy is dead today along with her own denial.

I had a 25-year-old woman, one of my clients, die last week of a heroin overdose. Now, her problem wasn't that bad. Now, that's really, really sad, because as far as I'm concerned, if you're a drug addict, you either get help or you die. Amy is dead.

BALDWIN: So what do you do? Howard, without some kind of solution, there's so many people out there and parents of adult children who suffer with this addiction. As Russell Brand said, look, you either get the phone call that person is gone, you get the phone call that person wants help. Sometimes you can't force your adult child into help, so what do you do?

SAMUELS: Well, you know, a mother just called me today and her son left rehab. I told the mother that she needed to have tough love, that she needed to stop enabling her son and her son needs to reach a bottom. I believe families have to intervene and intervene and intervene in every way they can to save their loved one.

I also believe the person has to hit a bottom where there is a psychic shift. My psychic shift came about in treatment. Thank god my family stopped enabling me. Thank god they stopped giving me money and they stopped giving me ways to manipulate. If it wasn't for my family, I wouldn't be alive here today.

So I say to families out there -- exactly. it's about the families. The families have to get in there, call people, call counselors, call interventionists. You've got to get in there to save your loved one before it's too late.

BALDWIN: Tough love. Great advice from someone who knows too well. Howard Samuels, thank you for coming on.

SAMUELS: Thank you.

BALDWIN: Coming up next, if the economy is an indicator, it is a woman's world because, believe it or not, men are getting hit hardest with all these job losses. Poppy Harlow is standing by to tell us why and if it's a trend that's here to stay. We're back in just a moment.

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BALDWIN: Here's a number for you -- Five. One out of five American men is out of work. And the longer they're unemployed, the harder it is to get back in the workforce. They're calling this now, of course there's a phrase, the man-cession. CNN Money's Poppy Harlow is in New York with more. OK, Poppy, a man-cession. How do the men compare with the ladies when it comes to job loss?

HARLOW: That's a good question. You said it right there, one in five American men are not working today. That's 20 percent of the population. It's up from seven percent in 1970. That's according to a new McKenzie study.

But this isn't just because there's a lack of jobs. This is men that are in jail, on disability, relying on their spouse's income. But look at the numbers on your screen. Through the recession, 5.4 million men lost their job, 2.1 million women lost their job. So you see how that played out.

Now, we've got about 14 million unemployed Americans. The question is why did men get hit so much harder, Brooke? A lot of it had to do with where they worked. They worked in manufacturing and construction. Those sectors got hit very hard during the recession. So we wanted to know what's going on now. Why are a lot of men and women not getting jobs, not getting back into the workforce? We talked to the CEO of Manpower Jeff Joerres. Here's his take. Take a listen. (BEGIN VIDEO CLIP)

JEFF JOERRES, PRESIDENT AND CEO, MANPOWERGROUP: Well, we have an issue, there is no doubt about it. And the longer we have this long- term unemployed, even for what would be considered the entry level skill position, the shop floor is not going to be the same shop floor for that person left two and a half years ago. New technology is put in place, how you have to read a CAD drawing. So we're still going to have this kind of skills mismatch of what companies are looking at to get the highest skills and what is really on the marketplace. And the U.S. is not alone in that. It's just exacerbated because of the low demand in the U.S.

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HARLOW: So Brooke, you heard it. It's not just for men. It's for men and women, there is a skills mismatch. And I think that's exemplified for a company like Google. They said we're going to hire this year more than we ever had in the past. They have 1,500 to 2,500 open positions at Google. But what they told us is there's a huge lack of the right talent in the United States, a huge lack of engineers in this country that have the skill set that they need to put them to work. That's not just men. That's men and women.

BALDWIN: I know those are the numbers when it comes to losses. But I do just want to drive everyone to the article over your left shoulder on CNNMoney.com, because they are also encouraging numbers when it comes to recovery for the men in addition to the ladies. But Poppy Harlow, got to leave it there. Thank you very much. Again, CNNMoney.com.

HARLOW: Sure.

BALDWIN: Coming up here at the top of the hour, the man who says he slaughtered 76 people in Oslo, Norway, apparently inspired by some conservative Christian voices in America. But first, Wolf Blitzer is standing by with your news off the Political Ticker. That's next.

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BALDWIN: Time now for your "CNN Equals Politics" update. As always we get to talk to Wolf Blitzer here with the latest news off the Political Ticker. And Wolf, I can only imagine you are leading with a very important date, a week from today. I was watching you last night. It was tremendous coverage and we're all sort of biting our teeth here, biting our nails.

WOLF BLITZER, HOST, CNN'S "THE SITUATION ROOM": Yes. You know, we should really be worried right now. I just posted a blog on our CNN.com/SituationRoom websites expressing my own concerns. I'm seeing a lot of political posturing right now in Washington. I'm seeing a lot of statements going after each other, Democrats, Republicans, from the White House, elsewhere. I'm not seeing a whole lot of movement in public and I'm not seeing a whole lot of movement behind the scenes. And that clock, as you know, is really ticking right now. One thing we are seeing a lot of is people are registering their anger, their frustration. They're calling their members of Congress in big numbers, some of those phone lines are simply died up as you know. Brooke, some of the e-mails that are coming in, they're disrupting some of the servers some of the websites are down.

It reminds me of some of major battles that we've seen in Washington in recent years including battle over the president's health care reform. It's a real, real tense moment.

But the consequences here are real significant, if, in fact, the United States can't pay its bills, if, in fact, it goes into default, it's going to impact everyone, not only in the United States, but so many people around the world. So that's why so many people are nervous about what's going on, including me, if you read my blog. Check it out if you have a few moments.

I will be discussing all of this extensively during the two hours of the situation room. David Plouffe, one of the architects of the president's election back in 2008 is joining us. We're also speaking with Congressman Jim Jordan. He's a leading conservative in the House. He's now split with John Boehner. He says the Boehner proposal is not good. He doesn't think Boehner has the 217 votes necessary to pass it in the House of Representatives. And the White House is now threatening to veto that Boehner legislation even if it managed to get through the house and the Senate. It's not going to get through the Senate in any case.

Barbara Mikulski, the Democratic Senator from Maryland, will be joining us as well. She and a lot of Democrats are concerned ability some of the aspects of what's going on. I can't overemphasize the consequences of what's involved right now. Brooke?

BALDWIN: Yes, I'm looking down at your blog and I'm about to tweet that you're nervous. I'm nervous, too. Wolf Blitzer, thank you very much.