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The Downside Of Downgrades; New Video Of Norway Terror Bombing; Walter Reed Army Hospital Closing; U.S. Olympic Skier Has Died; No Treatment For 9/11 Cancer Victims; Warren Jeffs Trial; Credit Rating Agencies; Suicide Bomber Kills Kandahar Mayor; Washington Feels the Force

Aired July 27, 2011 - 13:00   ET

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

RANDI KAYE, CNN ANCHOR: Hi there, Suzanne, thanks very much.

Less than a week before the U.S. treasury runs out of borrowed money, both of the two main plans for avoiding default are coming up short, and I mean that in more ways than one.

Follow along with me here, we're going to show you the plans right here. The plan from house speaker Boehner pair a trillion dollar hike in the debt ceiling with 1.2 trillion in spending cuts over ten years. He'd allow another debt hike in 2012 if Congress passed more cuts. Senate majority leader, Reid, would hike the debt by 2.7 trillion now and mandate an equal amount of cuts. But hold everything, the Congressional budget office says the Boehner plan would really trim spending by only 850 billion, the Reid plan by 2.2 trillion.

Boehner's gone back to the drawing board and postponed the vote that was supposed to actually happen today, a vote he may well lose whenever it happens. That's another way both of these plans fall short, Reid's plan can't pass the House, and not only is Boehner's plan doomed in the Senate, a great many House Republicans don't like it either.

So, what happens now? Well, time marches on. A never-before- seen default on U.S. debts and obligations could be just six days away, but potentially just as bad would be a downgrade of debt, a verdict from the credit rating firms that America isn't as rock-solid reliable as we used to be, that could force up the cost of borrowing for all of us. And the fall-out could be global.

Here now is a view from abroad is Richard Quest, host of "Quest Means Business" on CNN International. Richard, I want to ask you first, the smart money still says default will be averted but downgrade. Is it inevitable? Are foreign investors alarmed?

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: No, it's not inevitable, nothing is inevitable. And you're right, overseas they still believe that a default will be avoided. They do believe however, look, if you want the adjectives and the words, flabbergasted, bewildered, horrified, alarmed, all the words that perhaps ordinary Americans would certainly use to describe the process under way, but certainly a scene from across oceans, people are looking at supposedly the most sophisticated political economic system in the world and saying, what on earth is going on? And how has it got so bad?

The really big fear, ultimately, is that there is some sort of accident. Basically, a vote doesn't take place, somebody loses, somebody doesn't turn up, and ultimately a technical default actually happens. Now, all the rating agencies have pretty much said we accept that if there is some default, it will be short lived. This is a case of won't pay, not can't pay, but Randi, these are delicate times and certainly the global economy is in no fit state for these sort of shenanigans.

KAYE: So, tell us, Richard, what happens in the world if T- bills, the rating for the T-bills slips from AAA to AA? I mean, how significant is it that?

QUEST: Essentially, it is significant because it's just like our credit rating on our credit cards. If you are lower down the scale, you have to pay a higher interest rate or you may not get as much credit. If the U.S. loses its AAA rating, and it's only one of a handful of countries, Canada and Australia, two of the others that never defaulted, if they lose their AAA, then the government will have to pay more for its money. It's as simple as that.

Now, I suspect the AAA would come back pretty quickly, but the damage would have been done. You know, it's a bit like - you're credit it's crazy (ph), it's a bit like you can't be a little bit pregnant, or virginity, once it's gone, it's gone, so to speak.

As -- I need your help , Randi, if I may, because for my international viewers, I need to speak to ordinary Americans and find out and put them on my program -- Americans and what you think is actually happening, and we can do this by broadband and by e-mail. So, can I be shameless and invite your viewers who have got broadband, Skype or similar, to contact me so that we can get ordinary American views on what's happening.

KAYE: I think you just did, sure. It's all about you, Richard.

QUEST: Quest@CNN.com or they can - or they can send me Twitter@RichardQuest. Shameless, but then let's face it, when it comes to default and it comes to taking hooksper (ph), well we learned the tricks from somewhere else.

KAYE: Absolutely. It's not shameless at all, we're all part of the same team here. We like to help you out whenever we can, but I do have one more question for you. I mean --

QUEST: Yes.

KAYE: What does the world care, really, if U.S. deficits explode?

QUEST: Of course they care! If U.S. - as it is, the U.S. is sucking in a vast amount of money to pay this deficit, this multi- hundred billion dollar deficit. Every year, money that should go to other countries or to other investment projects - take the Chinese alone with the trillion dollars of U.S. debt. Put into perspective Germany, the U.K., France, their total level of debt - total level of debt is so much lower than the United States. The U.S. has about $11 - $9 to $11 trillion of bonds out there. Germany, barely a couple of trillion. Now, the U.S. is a bigger economy, but the U.S. is like a vacuum cleaner at the moment, just sucking up debt wherever it can.

KAYE: All right Richard, great to have you on the show, pleasure to speak with you as always. Thank you so much.

Checking some other "Top Stories" that we're following. New video to show you of the terror attacks in Norway. Watch this, this is a video shot inside a store just as the bomb goes off about a block away. As you can see, the force of the explosion blows out part of the shops wall. Moments later, you see it there, people rushing outside. The pictures you see, now, were taken outside the shop moments after the blast, you can see windows there, damaged doors, broken glass covering the street. Shortly after suspect Anders Behring Breivik allegedly set off the bomb, he went on a shooting rampage at a nearby camp for teens and young adults. A total of 76 people were killed in the twin attacks, Breivik is in custody.

After 102 years of helping American troops, Walter Reed Army Medical Center is closing. From World War I to today, hundreds and thousands of wounded troops have been treated and cared for at the Army's flagship hospital, Walter Reed also has treated U.S. presidents and members of the House and Senate. It's also had scandals. Four years ago investigations revealed substandard conditions for wounded troops in outpatient care, improvements did follow. But two years earlier, a government commission siding aging facilities and cost- saving strategies decided to close Walter Reed and move to a new facility in Bethesda, Maryland.

Police in Utah say a U.S. free-style skier has killed himself. Salt Lake City police say Jeret Peterson died of a self-inflicted gun shot wound, his body was found off Interstate 80 between Salt Lake and Park City on Monday. Police say they responded to a 911 call in which Peterson said he was going to take his own life. Peterson took part in the winter Olympics in Italy in 2006, his signature jump was called The Hurricane.

There will be no cancer treatments for workers involved in the response to the 9/11 attacks. That's the controversial decision by the World Trade Center health programs. The report says there just isn't evidence to say this time whether the dust and smoke cloud produced by the attack has caused cancer. The report was required by federal legislation which took effect in January, that measure provides over $4 billion over the next five years to monitor, treat and compensate people who were exposed to the fumes and the dust. Some lawmakers and survivors of the attacks who originally supported the legislation have denounced the exclusion of cancer.

Polygamist leader, Warren Jeffs, on trial in Texas for sexually assaulting a child. He has been in jail now for a few years but is still in control of his sect. How can that be? We'll explain after the break.

(COMMERCIAL BREAK)

KAYE: Attorneys are due in court today to argue a motion to suppress evidence in the sexual assault trial of polygamist sect leader, Warren Jeffs. Jeffs is charged with two counts of sexual assault on a child and one count of bigamy, stemming from a 2008 raid on a ranch operated by his church. But through it all, his followers remain loyal and obedient even though he's behind bars. Here is CNN's Gary Tuchman.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): El Dorado, Texas. This tiny town is where Warren Jeffs is now in jail as he stands trial. And while Jeffs has been here, he's done one thing above all else, he spent a lot of time on the phone.

In the past month, how much money has he spent, would you estimate, on phone cards to make phone calls?

DAVID DORAN, SHERIFF, SCHLEICHER COUNTY: Roughly $3,000.

TUCHMAN: And a similar pattern when he was, for a time, in a different Texas jail a few dozen miles away.

So, do you know how much he spent on phone cards?

JEFF GARNER, SHERIFF, REAGAN COUNTY: I would say probably in excess of $10,000.

TUCHMAN: Ten thousand dollars in the four months he was here. And is it unusual to spend that much money? Have you ever had an inmate spend this much money on phone cards?

GARNER: No, no, we haven't had --

TUCHMAN: Authorities tell CNN Jeffs has been given cash by his loyal followers to pay for the calls. And jailers say they monitor what's said. Mostly lengthy sermons and detailed instructions to his followers miles away, and is isolated earning for Zion Ranch, as well as to his followers in twin polygamist towns of Colorado City, Arizona and Hildale (ph), Utah. If that sounds like he's still running the church from jail, he is. Insiders say he's even been ex-communicating those who disagree with him. But what it hasn't done is stop a growing feud between those that still believe in him and those who now believe he's a child molester.

I would like all of you to think, if he was standing here today, and then -

TUCHMAN: Three years ago, Willy Jessop was one of Jeffs' most trusted lieutenants. He even showed me around the compound in west Texas that was raided by Texas rangers to show CNN there was nothing inherently bad taking place. Today, Jessop said Warren Jeffs has betrayed his church. JESSOP: And he said he is a very wicked man and he confessed to doing some very terrible things including molesting his daughter and sister and others. And I think his own words described himself more than I would care to characterize it.

TUCHMAN: Jessop is talking about diaries submitted as evidence that he says were left by Warren Jeffs after his arrest in Los Vegas five years ago. He is talking about these, pictures showing Jeffs embracing and kissing young girls no more than 12 or 13 years old, Jessop says.

JESSOP: His conduct that will ever be sanctioned by me. I don't think there's anybody in my church that will ever sanction what he's done, it's just a matter of time until they come to terms and figure out how to cope with what he has done.

TUCHMAN: According to authorities in both Texas and Canada, Jeffs orchestrated what Canadian police have called a child trafficking ring, sending as many as 30 young girls ages 12 or 13 from a polygamist compound in British Columbia, across the U.S. border to FLDS (ph) in Utah, Arizona and Texas.

DAN MOSKALUK, ROYAL CANADIAN MOUNTED POLICE: There are some very serious allegations here where essentially, in layman's terms, we're dealing with the exploitation of children, of young girls, for sexual purposed and the procurement of sex with girls under the ages of 18.

TUCHMAN: Officials of the Mainstream Mormon church reject Jeffs and his practices.

(on camera): Hi, how are you today?

UNIDENTIFIED FEMALE: Good.

TUCHMAN (voice-over): Those who support Jeffs like this 18-year- old that we met while selling coffee and juice Colorado City, Arizona, have no doubts whatsoever.

(on camera): Tell me what Warren Jeffs means to you?

UNIDENTIFIED FEMALE: I don't know what you mean by that.

TUCHMAN: I mean, how important is he to you?

UNIDENTIFIED FEMALE: Everything.

TUCHMAN: He's everything to you?

UNIDENTIFIED FEMALE: Uh-huh.

TUCHMAN: And are you married, yet?

UNIDENTIFIED FEMALE: I'm not.

TUCHMAN: Did you want to be married some day?

UNIDENTIFIED FEMALE: Of course I do.

TUCHMAN: And do you want - do you want to sister wives, too?

UNIDENTIFIED FEMALE: Of course I do.

TUCHMAN: Like how many sister wives would be perfect, do you think, in your family?

UNIDENTIFIED FEMALE: As many as I get.

TUCHMAN (voice-over): Gary Tuchman, CNN, Colorado City, Arizona.

(END VIDEOTAPE)

KAYE: Credit rating agencies. You probably had to deal with them. But what exactly do they do and how do their decisions affect your money and your wallet? More in just two minutes

(COMMERCIAL BREAK)

KAYE: Credit rating executives are appearing before a House Financial Services Subcommittee today to spell out the global ramifications of U.S. debt default and possible credit rating downgrades. So what do these agencies do exactly? Who pays them? And why are they so important? Christine Romans has more.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, ANCHOR, "YOUR BOTTOM LINE": Before you can borrow money, before you can get a credit card, banks run a credit check on you. The rating agencies run credit checks on companies, financial products, even countries. The rating agencies, the big three are, S&P, Standard & Poor's, Moody's and Fitch. They analyze how risky a company, a country or a product is. They give the debt then a grade that reflects the borrower's ability to pay back the underlying loans.

The safest bets, like U.S. government debt, are AAA rated. It's been that way for the U.S. for U.S. debt since 1917 when Moody's first assigned that AAA rating to the U.S. But that could change soon. Let's look at some of these other countries that are also AAA rated. The U.S. right here, of course. But 18 other countries as well.

Why do these credit rating agencies matter? Who listens to them? Well, investors around the world listen to them and they listen very clearly. They look at the credit rating agencies to judge where they should invest. Where they're going to get the best return on their investment. For governments, the ratings agencies have an awful lot of power over the interest rates on the bonds that they can send to investors. The safest bets pay the lowest interest. If you're a government like the U.S. trying to raise money, you want to pay the lowest amount of interest to borrow that money.

So who pays the agencies? Agencies are either paid by the borrow that requests the rating or from subscribers who received the ratings and want to know how their potential investments could fair. And they have related credit reports that they sell. Standard & Poor's tells CNN Money that the sovereign U.S. debt rating is unsolicited and that the U.S. does not pay for its rating. It is an unbiased assessment, an unvarnished assessment of the U.S. financial position.

Christine Romans, CNN, New York.

(END VIDEOTAPE)

KAYE: Just about 20 minutes past the hour. Here's a look at the top stories this hour.

Police are using a mini submarine and specially equipped boats in waters off Norway's Utoya Island to search for evidence in Friday's deadly shooting rampage. At least 76 people were killed in the terrorist attacks that started with a bomb blast in the capital Oslo, then continued with the shooting rampage at a labor party youth camp. Suspect Anders Behring Breivik is in custody and has confessed to carrying out the attacks.

In Libya, the convicted Lockerbie bomber appeared on state TV yesterday attended a pro-Gadhafi rally. Abdelbaset al-Megrahi is seen here in the wheelchair wearing a surgical mask. His public appearance comes almost two years after he was released from a Scottish prison on the claim that he was dying of cancer.

Dunkin' Brands, parent company of popular restaurant chain Dunkin' Donuts, showed strong demand in its initial public offering today. Shares started trading at $25 a piece, up 31 percent from the list price. Most of the Dunkin stores are franchised owned. The company opened 200 new U.S. stores last year and there are plans to open just as many this year.

A suicide bomber kills another leader in Afghanistan. Coming up, we take you live to Afghanistan for the latest in a string of killings that's targeting high-ranking officials.

(COMMERCIAL BREAK)

KAYE: Today a deadly reminder of how volatile and explosive the situation remains in Afghanistan. The mayor of Kandahar was assassinated today by a suicide bomber who hid explosives in his turban. Ghulam Haider Hamidi was killed while leaving a city hall meeting today. This is just the latest in a string of high profile assassinations that includes the murder of Hamid Karzai's half brother two weeks ago. Hamidi, perhaps more than anyone, knew the danger that came with his job. Nic Robertson interviewed the mayor just this past December. The encounter is telling and prophetic.

(BEGIN VIDEO CLIP)

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: When you walk outside there, do you feel safe?

GHULAM HAIDER HAMIDI, MAYOR OF KANDAHAR, AFGHANISTAN: In these days, not, because I got the warnings three times.

ROBERTSON (voice-over): Just before we reached the street, one of his guards interrupts.

UNIDENTIFIED MALE: (INAUDIBLE).

HAMIDI: Yes, they are calling us, don't go by walking.

(END VIDEO CLIP)

KAYE: I want to bring in David Ariosto, who is following this wave of assassinations that have rocked Afghanistan. He joins us now live from Kabul.

David, the Taliban is claiming responsibility for the mayor's murder. You heard from Ryan Crocker, the newly appointed U.S. ambassador to Afghanistan. What is he saying about all this?

DAVID ARIOSTO, CNN INTERNATIONAL CORRESPONDENT: Well, Ambassador Crocker, who is now in all of his third day here in Afghanistan, is said to proceed with caution. Even though the Taliban have taken credit for this attack, the Taliban tends to take credit for high profile attacks. Whether or not they were behind this is unclear.

But what Crocker pointed to was an incident earlier this week in which two young girls had been killed in a -- inadvertently killed in a road building accident. So it -- officials that we spoke to wonder whether it could be a -- simply a revenge killing by those girls' family members or, in fact, a Taliban attack.

Now, Crocker said that if it was in fact a Taliban attack, he said it represents a sign of operational weakness.

(BEGIN VIDEO CLIP)

RYAN CROCKER, U.S. AMBASSADOR TO AFGHANISTAN: I think because of the success of the coalition campaign in the south, including in Kandahar, we're seeing a phenomenon that is not dissimilar to what we saw in Iraq. I would judge that the Taliban is now damaged to the point where they can no longer conduct large scale operations. They have had to kind of regroup and figure out what they can do. And in some cases, that has been assassination. Again, we saw a very similar pattern in Iraq.

(END VIDEO CLIP)

ARIOSTO: Now, Crocker's comments pretty much underscores some of the dilemma here that many people are facing in terms of trying to find out exactly what this represents. It could be emblematic, though, of a realization of how critical this moment really is for all sides involved.

Randi.

KAYE: David, do you have a sense from other Afghan leaders with this wave of executions and assassinations, are they concerned about their own security, their own safety?

ARIOSTO: Being in politics here in Afghanistan, there's always a danger. We spoke to a member of parliament, a women, which kind of doubles the amount of danger that they endure on a day-to-day basis. But it's pretty clear that this wave and this series of high profile assassinations has created a certain degree of paralysis in the government. Individuals are -- that we've spoken to have started to rotate their bodyguards. If you remember, the half brother of Hamid Karzai was killed by a long-time bodyguard. So the question really becomes a question of who you can trust and is the location that's supposed to be safest, your home, really safe for Afghan politicians?

KAYE: And is anything being done to increase security there for them?

ARIOSTO: Well, again, it's just -- there's really not that much they can do. You can rotate your bodyguards. But at the same time, this is Afghanistan and it's very unpredictable in terms of who has access to who. There's all kinds of interlocking allegiances and corruption is a major problem here.

But I think more to the point in terms of what this represents, in terms of both -- in terms of the Taliban and fomenting some of these assassination attacks and attempts, but also in terms of U.S. forces. The United States military and its NATO allies are represented in Afghanistan right now in probably the largenous (ph) amount that they will be. So they have been ratcheting up attacks in the south and in the east of the county. The Taliban has been beaten back in many of these areas. So, as a result, we see some of these high-profile attacks like Ambassador Crocker mentioned. These are the areas that they can strike fear into the hearts of Afghans, and certainly politicians. So a critical, critical moment here in Afghanistan.

Randi.

KAYE: David Ariosto in Kabul. David, thank you.

It has been a part of American blood, sweat and tears for 102 years. But today they are symbolically calling it quits. That story in two minutes.

(COMMERCIAL BREAK)

KAYE: About half past the hour, and here are some of the stories you may have missed:

One week before the United States government could default and entered unchartered economic territory, Democrats and Republicans remain at a stalemate on how to reach a debt ceiling deal. The Congressional Budget Office claims that the GOP's plans fall short to its promised savings. So, House Republican are putting off a vote on Speaker John Boehner's debt plan at least until Thursday.

Now, a plan from Senate majority leader, Harry Reid, falls billions short of its promised savings. Democrats have claimed the plan met the Republican demand that total savings match the amount the debt ceiling is raised.

Deep water and strong currents frustrate search efforts for police in Norway. Police there is using a mini-submarine to comb the waters around Utoya Island where Friday's mass shooting took place. Meanwhile, police continue to perform controlled explosions at a farm associated with the bombing and shooting suspect, Anders Breivik. They took samples for the bomb-making materials for analysis and detonated the rest for safety. Seventy-six people died in the attacks.

Police in Utah say a U.S. Olympic freestyle skier has killed himself. Salt Lake City Police say Jeret Peterson died of a self- inflicted gunshot wound. His body was found off Interstate 80, between Salt Lake and Park City Monday. Police say they responded to a 911 call in which Peterson said he was going to take his own life.

Peterson took part in the winter Olympics in Italy in 2006, and won the silver medal in Vancouver in 2010. His signature jump? The hurricane.

Sports reporter Erin Andrews filed a civil suit today against hotel chains for negligence, invasion of privacy and emotional distress. She blames them for allowing Michael David Barrett access to her hotel room. Barrett secretly recorded Andrews in her hotel room and posted the nude videos online. He pleaded guilty in December 2009 and was sentenced to 30 months in prison.

Walter Reed Army Medical Center is closing its doors after serving the military's finest for more than 100 years. A formal ceremony is underway today at the hospital where a flag will be taken down to mark the inactivation of the unit. The medical center will combine services with the Naval Medical Center in Maryland, and the new Fort Belvoir community hospital in Virginia. The new hospital will include 345 beds for medical and surgical patients, 50 intensive care beds and 20 operating rooms.

Sales are skyrocketing for the albums of the late singer Amy Winehouse. Thirty-seven thousand copies of her award-winning "Back to Black" album, with the hit song "Rehab," have sold this week. Over 1,000 of the sales were downloads. Winehouse was found dead in her London home, you may recall, on Saturday. She was 27.

He is known as Mini Darth Vader, and he is bring the force to Washington. Up next, the exclusive coverage of one child's newest mission. Maybe he can solve the debt crisis while he is there.

(COMMERCIAL BREAK)

KAYE: Talks on a debt ceiling deal to avert a government default next week have been going on pretty much around the clock in Washington. But the nation's capital has a big visitor amidst the big debate. He is there to do his part for children's access to quality health care, a drop in the bucket over the overall budget.

Our chief medical correspondent, Dr. Sanjay Gupta, is here now with more -- Sanjay.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: I have been following the story of little Max Page for sometime, this crazy, cute kid. He is the little Mini Darth Vader as you see there.

And he says he is taking the force to Washington.

What a lot of people may not know about Max is that he was born with a heart condition, required eight operations in six years, got his car at a children's hospital, of which there are only 56 in the country. He met a lot of kids in the hospital that are like him, that needs specialty care. He also met kids who need Medicaid to help get their care.

And he realized, along with his parents, that some of those things are threatened with all the talks that are going on in Washington. So, he went to Washington to lobby on behalf of these things, and had a meeting with Senator Grassley. Take a listen.

MAX PAGE, BORN WITH CONGENITAL HEART DEFECT: Can you tell the president this? If he -- if the budget gets cut, he needs to realize his daughters might need it. So, if he cuts -- if the budget makes -- they cut about like 75 percent off, it's going to be really bad for maybe his daughters.

GUPTA: You can see there, Max is making a personal appeal to the president and to the president's daughters.

Again, you know, just 56 of these children's hospitals in the country. They are responsible for not only taking care of a lot of sick kids but also training the nation's future pediatricians and pediatric specialists.

LAWRENCE MCANDREW, PRESIDENT & CEO, NATL. ASSOC. OF CHILDREN HOSPITALS: When you have less money, you have less options to providing that care. So, you may not hire a physician, you may not offer the clinic, you may not have the program that's necessary for the child.

It's not something that's going to happen overnight. But, over time, the whole effort to support children's health care has weakened if you don't adequately fund it.

GUPTA: And both sides could have an impact in terms of what they are proposing. The White House plan could potentially impact the number of pediatricians trained in the future.

And the Republican deal, as far as we can tell, could have an impact overall on Medicaid, in terms of cutting its funding.

So, Max, good luck. May the force be with you.

And back to you for now.

(END VIDEOTAPE)

KAYE: All right, Sanjay, thank you very much.

And you can see how the rest of Max's congressional meetings went this weekend on "SANJAY GUPTA, M.D." He'll join Dr. Gupta along with his parents to talk about his mission and what he got accomplished on his big visit to Capitol Hill. That's this Saturday and Sunday at 7:30 Eastern, only right here on CNN.

Coming up, a mother and her young daughter caught up in the Norway terror attacks. They stay in touch through texting. The details, straight ahead.

(COMMERCIAL BREAK)

KAYE: As we mentioned, new video was released today of the terror attacks in Norway. This video was shot was shot inside a store just as the bomb goes off, about a block away. You can see the force of explosion blows out part of the shop's wall. Moments later, people rushing outside.

The pictures you see now were taken outside the shop moments after the blast. You can see blown out windows, damaged doors, broken glass covering the streets.

Shortly after suspect Anders Breivik allegedly set off the bomb, he went on a shooting rampage at a nearby camp for young teens and young adults. A total of 76 people were killed in the twin attacks. Breivik now in custody.

Another new development, dramatic text message exchange between a mother and her daughter who found herself in the middle of terror suspect Anders Breivik's shooting rampage. The mom, her husband, their other twin daughter were in northern Norway when the attacks unfolded.

At one point, the twin on the island texted her mom, "Mommy, tell the police that they must be quick. People are dying here." The mom texted back, writing, "I'm working on it, Julie. The police are on their way." Fortunately, there was a happy ending to their ordeal. The family reunited a day after the attacks.

And CNN's Brooke Baldwin will speak with the mother involved in this dramatic story. You don't want to miss that, starting at 3:00 p.m. Eastern Time today.

The only person convicted in the bombing of a U.S. jetliner over Lockerbie, Scotland, has appeared on Libyan television, Abdel Basset al-Megrahi. He took part in a pro-Gadhafi rally in Tripoli.

He was released from a Scottish prison two years ago on grounds that he had cancer, a move that triggered international outrage.

Also, Britain today formally recognized the rebel umbrella group fighting to overthrow Gadhafi.

Ivan Watson is following these developments in Tripoli and joins us now on the telephone.

Ivan, did al-Megrahi say anything at this rally? And if you could, just remind our viewers briefly how he did end up back in Libya.

IVAN WATSON, CNN INTERNATIONAL CORRESPONDENT (via telephone): That's right. Well, he was released about two years ago on the grounds of compassion because it was assessed that he had terminal cancer and only a few months to live. Well, here, we saw him on Libyan state TV last night, still alive. He was only shown for a few moments in a wheelchair. He was looking quite frail.

He was introduced by a speaker at what was described as a tribal meeting, members of his tribe, in support of the embattled Libyan leader, Moammar Gadhafi. Megrahi was introduced as a, quote, "victim of colonialism." We don't know whether or not he addressed the crowd.

But every since he was released back to Libya, to the government here, he has been treated somewhat like a hero here -- Randi.

KAYE: And what do we know about his health? I mean, he had been given three months to live. Now, we are at the two-year mark or so. How is he doing?

WATSON: Well, it appears he is alive, and he's part of an effort here by the Gadhafi regime to attract support at a time when it's perhaps more internationally isolated and being challenged on three fronts on the ground by anti-Gadhafi rebels.

You know, the British foreign minister came out statement today calling the release of Megrahi a mistake and denouncing the medical evaluation that was used to release him, calling it worthless, Randi.

KAYE: And what can you tell us about Britain now recognizing the rebel group looking to overthrow Gadhafi?

WATSON: Well, this is interesting, because just a day or two ago, Britain's top diplomat said that it would be possible to work out some kind of a deal with Libya in which Gadhafi could be allowed to stay in Libya if he agreed to step down from power. That seemed to be a step backwards from Britain, which was repeated by France.

Well, today, Britain's top diplomat, William Hague, came out more forcefully, announcing that he was going to hand over the Libyan regime's embassy in London to the rebel counsel in the east of Libya, in that city of Benghazi. He said that London was going to recognize that council the Transitional National Council, as the sole governmental authority in Libya. And also announced more than $100 million worth of frozen Libyan government assets would be given over to the rebels. We have seen a growing number of Western governments, including the U.S. government, announce similar plans to recognize the rebel council as the only legitimate authority here and also announcing plans to hand over hundreds of millions of dollars to the rebels. That, of course, is a proposal that the embattled government here in Tripoli forcefully rejects.

KAYE: All right, Ivan Watson. Ivan, appreciate your reporting. It's about 15 minutes before the top of the hour. Here is a look at some of the top stories we're following. A federal judge has thrown out a lawsuit that sought to block federal funding for human embryonic stem cell research. U.S. district judge Royce Lambeth (ph) ruled that the U.S. National Institutes of Health guidelines on stem cell research do not violate federal law and dismissed all legal challenges.

In Mexico, a judge has sentenced a 14-year-old in the torturing and murder of at least four people and kidnapping three others. The U.S. citizen allegedly was a hit man for a drug cartel. Police say he admitted killing four people by cutting their throats. He was sentenced to three years in a correctional facility, the maximum allowed under Mexican law because of his young age.

Just in case, the state of California has borrowed more than $500 billion from major banks in the event there is no solution to the debt ceiling impasse. The move shores up the state's cash reserves ahead of possible market disruptions.

Well, it could mean a new way to treat cancer patients. Get this: discovered by a 17-year-old Texas student. It was enough to get Google's attention. Her amazing story, and you'll get to meet her as well. Coming up.

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KAYE: Cancer. That diagnosis can be terrifying, devastating, and, yes, life changing. I want you to take a look at these numbers with me. The National Cancer Institute estimates nearly 22,000 women will be diagnosed with ovarian cancer. More than 15,400 will die. These women are your moms, daughters, sisters.

Which is why in today's "Big I" we want to talk about the fight against cancer and one incredible eleventh grader whose research could help countless women with ovarian cancer. She could very well be one of the top scientists of the future.

Her discovery won her the grand prize at the first Google Science Fair earlier this month. I want you to meet Shree Bose, who joins me now from Forth Worth, Texas. Shree, congratulations to you first of all! You beat out more than 10,000 other students from 91 countries.

I want to talk about your research. You looked at a chemotherapy drug commonly used by women with ovarian cancer. Why this?

SHREE BOSE, GRAND PRIZE WINNER, GOOGLE SCIENCE FAIR: Well, I used a particular drug called Cisplatin, which is a very common chemotherapy drug used to treat ovarian cancer. And we actually figured out this new way to actually improve the treatment with Cisplatin, so it has huge implications for chemotherapy and also for the future of cancer research -

(CROSSTALK)

KAYE: I'm sure! It sounds really cool, but it's also so important.From what I understand, you discovered why cells would actually reject the chemo?

BOSE: We actually figured out that this one protein in the cell called A&P Kinaise (ph) might actually play a role in cancer cells becoming resistant to this drug. And there's this way to actually manipulate this protein to make resistant cells actually respond to the drug less than.

KAYE: And where will this research go? I mean, how far can you take it? Can you continue working on this?

BOSE: There are a lot of options still available to do with this project. I mean, there's the clinical aspect, where you can actually treat patients using the research that we have done and actually make chemotherapy more effective. But there's also the research aspect, where you can research what this protein does in a little bit more detail and maybe figure out how those cells become resistant in the first place.

KAYE: Well, this is by far, I think, the most exciting thing that you've worked on. But I want to let our viewers know exactly what you've been working on over the years. In second grade, you tried to make blue spinach, so that would attract kids instead of the green stuff. Is that - am I right there?

BOSE: That was the idea. As a second grader, it seemed like a pretty good idea. But as I grew up, I realized probably not.

(LAUGHTER)

KAYE: Well, it was creative. I'll give you that. And then in the fourth grade, you built remote-controlled garbage cans. And then in the eighth grade, you invented a railroad tie from recycled plastic and granite dust. Very impressive here!

What is your ultimate dream?

BOSE: My ultimate dream for my career would be to follow an MD Ph.D track as a degree, and then maybe become a medical researcher along with being a practicing physician and sort of combine my interests in treating patients with coming up with treatments for patients.

KAYE: Well, I guess you got a pretty good head start because you came into some cash as a result of winning this contest. About $50,000 and you get a big trip to the Galapagos and Switzerland. How do you feel about all this, and what are you going to do with that money, do you think?

BOSE: I - for the feeling part, I think I'm still in this mixture of shock and disbelief and really insane happiness. As for the money, I know I'm going to use the money towards college because I'll need it. But hopefully I'll be pursuing an undergraduate degree in biology and researching, and I'll see where I go from there.

KAYE: And I think you realized how important your research is because this really has also has a personal connection for you as well, right?

BOSE: Yes. Both of my grandfathers actually passed away from cancer. My paternal grandfather passed away from lung cancer about two years ago, which actually sparked me start going into the medical research field and going into cancer research.

KAYE: Well, I think what you've done here is super fantasitc, and we're all certainly impressed here at CNN. We're happy to have you on the show and share your research with our viewers.

BOSE: Thank you!

KAYE: Thank you so much and congratulations. Do you have your trophy with you?

BOSE: I do, actually!

KAYE: Hold it up, let me see before we let you go. Oh, nice, very impressive. All right, Shree, take care!

BOSE: And it's made out of Leggos.

KAYE: Oh, it's made out of Leggos! Very nice. Good luck.

BOSE: Thank you so much!

KAYE: For more on Shree and the Google Science Fair, you can check out my Facebook page, Facebook.com/RandiKayeCNN.

First the House, now the Senate. The Congressional Budget Office isn't really a fan of the competing debt ceiling plans. Joe Johns will tell you why right after the break.

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KAYE: Welcome back. It is time now for a CNN political update. CNN's Joe Johns joins me live from the political desk in Washington.

Hi, Joe. It sounds like things are getting a bit uglier on Capitol Hill there.

JOE JOHNS, CNN SENIOR CORRESPONDENT: Hey, Randi. For sure. So just how ugly is it on Capitol Hill today? Pretty ugly for sure. Republican members of the House of Representatives are calling out Republican staffers who apparently emailed outside groups asking them to lobby the Congress against Republican House speaker John Boehner's deficit reduction plan. We're also told these same members are criticizing the Republican member of Congress who was supposed to be supervising these employees. We're certainly going to have more on that. The Capitol Hill unit here at CNN is following all the chaos on the Hill today.

Meanwhile, we're watching the Boehner plan closely after he had a set back last night, as you know, and as we have been reporting. His plan was found to have come up short in terms of savings that it was supposed to be achieve in the next five years. And there you go, he had to take it off of the floor of the House of Representatives.

The interesting thing, also, is that Senate majority leader Harry Reid had a similar plan. His plan was to create savings of something like $2.7 billion, but the Congressional Budget Office took a look at that just as it looked at the Boehner plan and decided the Reid plan would only - would save something like $500 billion less.

Meanwhile on Capitol Hill today, the credit rating agencies took some questions from Congress about a possible downgrade of the credit rating, and Deven Sharma, the president of Standard and Poor, said he did not believe the United States was going to default.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Do you honestly believe that the United States could default on its debt?

DEVEN SHARMA, PRESIDENT, STANDARD & POOR'S: Our analysts don't believe it would. And by the way, changing a rating doesn't mean it will default. AAA all means is that is a low - very low probability for default. That's all it means. And if you change the rating, it means that the risk levels have gone up. It doesn't mean it's going to default.

(END VIDEO CLIP)

JOHNS: Deven Sharma also said the larger problem in his view is how the United States government deals with the growing debt over the long-term. So, that's the latest from Capitol Hill. Randi?

KAYE: Joe Johns, thank you very much. Appreciate it.

Your next update from The Best Political Team on Television is just an hour away.