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House May Vote Tonight on Debt Ceiling Plan; AWOL Soldier Hit With Federal Charge; Debt Ceiling Battle Damages America's Reputation

Aired July 29, 2011 - 13:59   ET

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

RANDI KAYE, CNN ANCHOR: A new hour brings a new push to end a standoff that is getting very, very old. The House of Representatives is reconvening as we speak to reconsider a debt plan it was planning on voting on yesterday.

Today, of course, we are one day closer to D-day, default, we're told. The government's inability to cover all its bills and obligations could be less than four days away now. That's unless Congress passes and the president, of course, signs an increase in the Treasury's authority to take on debt by selling bonds.

House Speaker John Boehner still trying to sell his fellow Republicans on a plan to hike the debt limit by $2.5 trillion in two installments, this year and next. He'd also cut spending by $917 billion over 10 years.

Senate Majority Leader Reid says there's no time to wait for the House or he'll try to pass his own plan to cut spending by at least $2.2 trillion while raising the debt limit by $2.7 trillion all at once.

For his part, President Obama says, and I'm quoting here, "The power to solve this is in our hands."

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Keep in mind, this is not a situation where the two parties are miles apart. We're in rough agreement about how much spending can be cut responsibly as a first step toward reducing our deficit.

We agree on a process where the next step is a debate in the coming months on tax reform and entitlement reform, and I'm ready and willing to have that debate. And if we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reforms, I'll support that too if it's done in a smart and balanced way.

So there are plenty of ways out of this mess, but we are almost out of time.

(END VIDEO CLIP)

KAYE: I want to bring in CNN's Kate Bolduan to tell us where things stand exactly.

Kate, now we understand the House might be voting this evening?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: That's right. And as you hear these buzzes, that's actually telling that the House is reconvening, which is the indication -- that's actually perfect timing -- that they will be moving forward now with debate and some of the procedures that they have to towards a vote.

The guidance I've been given from a Republican source is that the vote on final passage of this new bill that has been worked out between House Speaker John Boehner and his party could be between 7:00 and 8:00 this evening. But a big caution -- this can and often does slip. They can give back time and they can use more time if they need to, but that's the guidance that we're getting, is that the vote will likely be -- will very likely be at some point this evening -- Randi.

KAYE: Well, it seems like Speaker Boehner could be running out of time here, though, given that time frame. So what is he doing to win over the members of his own caucus before this vote?

BOLDUAN: Well, leaders are not yet predicting that they have the votes that they need. I'll tell you, there definitely seemed to be a breakthrough this morning, when they all left a closed-door meeting.

We were speaking to members when they came out, and members basically said that they think they are there. And I can assure you, at this point, I highly doubt the House Speaker and Republican leaders will move this bill to the floor if they don't have the votes.

They do not want a repeat of what happened yesterday. And how they were able to get more yes's -- and there's a lot of arm-twisting, but what we're hearing is what they've done is tweaked the bill. And just very briefly, I'll tell our viewers what that means.

They've tweaked the bill so that the second debt ceiling hike that would happen early next year would now be contingent upon congressional passage, Congress passing a balanced budget amendment to the Constitution. Now, the original bill only said that there had to be a vote on it, so this is a tall order for that to pass.

And I can tell you, even if this passes this evening, it still needs to go to the Senate. And just today, just a short time ago, Senate Majority Leader Harry Reid made very clear that it is a no-go. Listen here to him.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: I'm not standing in line to see how many times they can amend the Constitution, but, you know, if people want to vote on that, fine. But as Senator Schumer pointed out, to show the extremism of these people -- the extremism of these people -- they are not satisfied with a vote on it. They want a guarantee that it pass before they'll allow an extension to the debt limit. I mean, how bizarre can anyone be?

(END VIDEO CLIP)

BOLDUAN: Now, for the part of the Senate, we've been told by many people that Senate Majority Leader Harry Reid and Senate leaders, Democratic leaders, they want some kind of compromise. They will be moving forward this evening, be it with Reid's bill or with a modification of Reid's bill, some kind of compromise. But they are getting the ball rolling in the Senate tonight.

KAYE: And Kate, I also understand -- I watched Senator Reid speak, and he also said that the House, he thought, is trying to ram this through. Are there actual negotiations still taking place?

BOLDUAN: I know that they are definitely open to negotiations, but as we've been seeing unfold, it seems, still today, that the House and Senate are going along their own paths. The House, clearly, they are going to move forward on their path. They want -- Republicans want to have the Boehner bill passed, approved, agreed to, and put to the Senate. They want to have their voice on that and their mark.

In the Senate, Senator Reid, he has made a plea today that he's ready to compromise, but it seems what the House is sending he's not accepting. So he's going to be working forward to push his bill through. And we'll have to see what kind of modifications or tweaks could be happening today, into this evening, but he's moving forward with his bill which could set up for some very late-night, early- morning votes this weekend and into early next week.

KAYE: No firm timetable though on a vote for the Reid bill yet?

BOLDUAN: For the Reid bill, it can always slip, but if they file -- I'm not even going to get into all the technical language, but if they really start the ball moving today, it could -- at least the first test vote could be at 1:00 a.m. Sunday morning, Saturday night into Sunday, because of the rules how many hours that have to pass. So that could be the first test vote, and then from there, we've got early votes as well.

KAYE: All right. You're not going to be able to get much sleep this weekend, Kate Bolduan, but we certainly appreciate your reporting. Thank you very much.

Well, everybody talks about cutting government spending, but almost everybody benefits from government spending as well in various ways. And that's why it's easier to talk about cuts than to actually make them.

So I want to give you some idea where your money goes. We did some checking, and we found that these five states, the most -- they accept actually the most federal spending per person.

Alaska tops the list. In 2009, the most recent year that we could find, Alaska took in $20,351 per person from the U.S. Treasury. Virginia, not far behind, $19,733.

Take a look at Hawaii here. It took in $19,000 federal dollars per person. Maryland took in $15,169. And New Mexico, $13,669. Now, obviously, all of those states and all the others send money to the Treasury as well, so here's another way to look at it. These states that you see in green, OK? Take a look. Well, they all got more money back from Washington than they paid in federal taxes.

On average, between 2007 and 2009, Mississippi got $2.83 for every dollar it paid in. And Mississippi paying taxes really pays off.

West Virginia got $2.82. New Mexico, $2.80. Hawaii, $2.38. And Alaska got $2.24.

And then there are states that don't get their money's worth at all. Illinois got only 79 cents back for every federal tax dollar it paid. Connecticut got 74 cents. New Jersey, 62. Minnesota, 54. And poor Delaware got just 40 cents back on the dollar.

We're also keeping an eye on Tropical Storm Don. This is the current projected path.

You can see Don churning across the Gulf of Mexico. The storm is less than 300 miles southeast of Corpus Christi, Texas, and is expected it to make landfall late tonight or early tomorrow morning. While the storm is a major concern, the heavy rain expected to help bring relief to Texas, which is suffering the third worst drought in recorded history.

Recorders inside Air France Flight 447, which you can see were recovered in May, are raising troubling concerns over the pilots' training. The plane plunged into the Atlantic in June, 2009, killing all 228 passengers and crew on board after pilots received conflicting air speed reading.

Investigators say the Air France pilots responded incorrectly after the plane stalled. France's Bureau of Investigation and analysis say the pilots have failed to talk about stall warnings and have received no high altitude training to deal with the situation. Air France defended the pilots, saying there was "no reason to question the crew's technical skills since they faced multiple improbable factors."

The Libyan woman who told journalists Moammar Gadhafi's forces had gang-raped her is now living in the U.S. after spending nearly two months in a U.N. refugee facility in Romania. Iman al-Obeidi arrived in New York Wednesday night, but then flew to Colorado, where she will live. Al-Obeidi tells CNN she is excited and happy and is thanking the U.S. government and Secretary of State Hillary Clinton.

Exactly a week after the attacks, the death toll from the shooting and bombing in Norway has gone up to 77 people. Police there released a new list of victims today. This comes as the country paid tribute to those who died.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): We recall in silence those who lost their lives.

(END VIDEO CLIP)

KAYE: The Labour Party's youth movement organized a memorial service in Oslo as the first funerals for victims also took place today. The party's youth movement was targeted during their summer camp in the shooting on Utoya Island.

In the meantime, Anders Breivik, who confessed to last week's attacks, is being interrogated for a second time today.

The AWOL soldier accused of plotting an attack near Fort Hood gives a shout-out to the man responsible for the 2009 Fort Hood shooting spree. We take you live to Texas for the latest on his federal court hearing in just two minutes.

(COMMERCIAL BREAK)

KAYE: The scene around Fort Hood could have played out like the deadly 2009 shooting. Instead, the AWOL Army private who admitted to plotting another attack was charged in federal court this afternoon, but not before causing quite a scene.

Nasser Jason Abdo is now charged with illegal firearm possession. Police in Texas arrested the 21-year-old Muslim-American on Wednesday after a gun store employee tipped police off. FBI investigators searched his hotel and say that they found enough material to make two bombs. Abdo bought six pounds of smokeless gunpowder, shotgun shells, and a spare magazine for a semiautomatic pistol from this gun store.

The owner, who we spoke with yesterday, on this show saw the red flags.

(BEGIN VIDEO CLIP)

GREG EBERT, GUNS GALORE SALESMAN: Look, I'm a retired police officer. I spent close to 40 years of my life observing people in a variety of different capacities.

What do you think I'm going to do? If you come in here and do something that's kind of out of the ordinary, I'm going to key on that, and that's pretty much what I did with this kid.

(END VIDEO CLIP)

KAYE: I want to take you now straight to Waco, Texas, where Abdo was officially charged in federal court. CNN's Ed Lavandera was inside the courtroom and joins us from there.

Ed, what is this about Abdo in court? He didn't exactly enter and leave the courtroom quietly. Take us back to what happened.

ED LAVANDERA, CNN NATIONAL CORRESPONDENT: No. You know, it was supposed to be just a simple initial appearance, the charges supposed to be read against him, but it turned out to be a lot more bizarre than that. Abdo was escorted into the federal courtroom here behind me, and a large law enforcement presence inside there. There were nine U.S. Marshals in that courtroom.

He was brought in a full, all-white jumpsuit. He was shackled around the waist and the arms, and also his feet were shackled as well.

He sat down, started reading some paperwork. And when the judge walked in, everyone is supposed to stand up. Abdo refused to stand up. Two U.S. Marshals got around him and told him twice, "Stand up. Stand up."

He refused to stand up. At that point, those U.S. Marshals essentially just yanked him up by the arms and then the proceedings continued. That's when the judge read the charge that he was in possession of an illegal firearm, a destructive weapon, and he was told that he'd be held without bond.

And then, after that hearing was coming to an end, the U.S. Marshals started escorting him out of the courtroom, and Abdo started speaking out clearly. He knew it was a courtroom full of reporters sitting back there, and he started talking to them, made reference to a 14-year-old Iraqi girl who was gang-raped and murdered, her family murdered as well by U.S. soldiers back in 2006. And then also made reference to Major Nidal Hasan, who of course is the man suspected of that massacre in 2009 on the Fort Hood Army post where he killed 13 soldiers back in 2009.

Clearly a way of Abdo kind of showing sympathy to those two people. It was definitely a bizarre moment.

KAYE: How sophisticated do you think or do prosecutors might think he was in terms of pulling this off? I understand that in his backpack, there were some literature about how to make a bomb?

LAVANDERA: Right. You know, the -- exactly the timing of it, we still haven't seen anything just exactly how close he was, although authorities, yesterday in Killeen, said look, he had the parts. Had he not been kind of tipped off by police, by that gun shop employee, perhaps, they said, that they would have been holding a different press conference yesterday.

But he did have these pressure cookers, the gunpowder, various other components. And according to the affidavit that was just released a couple of hours ago as well, he said he wanted to take those components, put the bombs in those pressure cookers, and take them to an unspecified restaurant in Killeen where Fort Hood soldiers like to hang out, that that was his intent. That's what authorities say that Abdo has been telling them since he's been in custody.

KAYE: Ed, did we learn any more about him in court today?

LAVANDERA: You know, obviously, any sense of -- I think what we learned a lot is just about that demeanor. Clearly, him speaking out, making references to that 14-year-old Iraqi girl, making that reference to Major Nidal Hasan, clearly -- and just by his demeanor, much taller than I expected. Clearly, someone who -- he spoke very clearly to the judge in various exchanges that they had in these housekeeping judicial matters that they had to go over.

He kind of wanted to portray himself as a confident, perhaps cocky guy. Clearly, someone who sees himself as defiant, perhaps. That was kind of the demeanor that I took away from watching him in court today.

KAYE: And what's the next step for him, Ed?

LAVANDERA: Well, he's got another court appearance. He was assigned an attorney here. I think his next court appearance is August 4th as well.

He will remain in custody. He is being held without bond. Remember, he's also got these child pornography charges that he is facing court-martial for back in fort Campbell, Kentucky, so obviously he has got a slew of legal problems facing him right now.

KAYE: All right.

Ed Lavandera there in Waco, Texas.

Ed, as always, thank you.

Deal or no deal, we are done for. So not-so-optimistic real talk on the debt ceiling crisis in Washington. We'll have it for you next.

(COMMERCIAL BREAK)

KAYE: As the battle continues over the debt ceiling, the damage may have already been done to America's reputation. The global markets are nervous about the U.S. economy, and it could have a lasting effect.

Here's CNN's Fareed Zakaria's take on this very volatile situation.

(BEGIN VIDEOTAPE)

FAREED ZAKARIA, HOST, "FAREED ZAKARIA: GPS": We have created the circumstances in which the world now doubts our credibility, rating agencies are thinking of downgrading our debt, and the dollar's role as the world's reserve currency could be jeopardized.

Please understand that none of these things is happening because the United States is running deficits. There was no indication by any measure that the United States was having difficulty borrowing money one month ago. In fact, the world has been lending money to the United States more cheaply than ever before. We face downgrades and uncertainty and investor panic not because of our deficits, but because we are behaving like deadbeats, refusing to pay our bills, pouting while the bill collector waits at the door.

We do have a large deficit and a large debt, and we do need to get it under control. And the fact that the Tea Party has raised awareness about this issue is admirable. And I actually happen to agree with their view that the current set of entitlements, Medicare especially, have to be reformed dramatically to get our fiscal house in order. But that is not an excuse to endanger the good standing of the United States.

First, you pay the bills, and then you figure out how to change your spending habits. The tragedy is that the damage may already have been done.

From now on, every time the debt ceiling needs to be raised, the world will wonder, will the United States stand by its promises or will it break them? Something that was taken for granted, the credibility of the United States, is now surrounded by uncertainty.

Global markets have always had confidence in America. That confidence has been shaken, perhaps forever, and for this erosion we have only ourselves to blame.

(END VIDEOTAPE)

KAYE: And be sure to watch "FAREED ZAKARIA: GPS" on Sunday at 4:00 p.m. Eastern, right here on CNN.

About 21 minutes past the hour. Checking our top stories.

The U.S. men's soccer team has a new coach. Jurgen Klinsmann is the former head coach for Germany and led that team to a third place finish at the 2006 World Cup. His hiring comes the day after Bob Bradley was fired. He had come under fire over decisions critics said resulted in defeat during the 2010 World Cup.

President Obama says the cars we drive need to get better gas mileage. He unveiled new standards for cars and light trucks today to do exactly that. Under the proposal, overall fuel economy would double to 54.5 miles per gallon by 2025. The average right now, 27 miles per gallon.

The top rebel commander in Libya has been killed. Relatives and supporters today brought the coffin of General Abdul Fatah Younis into the main square of the rebel-held city of Benghazi. He was shot dead yesterday after being called from the battlefield for talks with other rebel leaders. No one has claimed responsibility.

In New Hampshire, still no sign of a missing 11-year-old girl. The search for Celina Cass is now in its fourth day. She was last seen when she went to bed Monday night. Police say there's no indication that she ran away or that someone took her.

Tropical Storm Don has its sights on Texas and could make landfall by tonight, but residents are actually welcoming the storm. We'll tell you why up next.

(COMMERCIAL BREAK)

(WEATHER REPORT) KAYE: A Muslim Army soldier arrested before he could carry out his alleged attack made an appearance in federal court today. But what he did before he left the courtroom just might surprise you. Those details coming up next.

(COMMERCIAL BREAK)

KAYE: About half past the hour. Here are some of the stories you may have missed.

President Obama back in front of the cameras today, urging Congress to work together to reach a compromise on the debt ceiling. He encouraged Americans to keep the pressure on Washington by contacting their representatives.

Meanwhile, House Republicans could vote on the final passage of the Boehner bill between 7:00 and 8:00 tonight. Senate Democrats promising to vote the Boehner plan down, even if it does pass the House.

Strange behavior, when the Muslim Army soldier arrested with bomb-making material appeared in court today. Private Naser Abdo was charged with one possession of a destructive device. Abdo was taken into custody yesterday near Fort Hood, Texas. Killeen police say that he told them he wanted to kill soldiers at the military post. He refused to stand up today when the judge entered the courtroom, so he was yanked up by U.S. Marshals. As he was leaving, he shouted out the name of a Muslim soldier charged with killing 13 soldiers at Fort Hood two years ago.

Norway paying tribute to those killed and injured in the terror attacks one week ago. Prime Minister Jens Stoltenberg told a memorial service in Oslo, quote, "The shots hit our young people but they hurt the whole nation." And 77 people died in the Oslo bombing and shooting rampage at a nearby island youth camp. Meanwhile, Oslo police interrogated suspect Anders Breivik for a second time today.

Investigators say the Air France pilots responded incorrectly when Flight 447 stalled and then plunged into the Atlantic in June 2009. All 228 passengers and crews were killed. France's Bureau of Investigation and Analysis says the pilots failed to talk about stall warnings and had received no high altitude training to deal with the emergency. Air France defended the pilots saying there was, quote, "No reason to question the crew's technical skills since they faced multiple, improbable factors."

The cameras captured it all when a British man threw a shaving cream pie at media mogul Rupert Murdoch. You remember this. According to British reports, the 26-year-old man has been convicted now of assault and causing harassment. Jonathan May Bowles admitted to throwing the pie as Murdoch testified before British lawmakers about the tabloid phone hacking scandal.

Tiger Woods is returning to the links. He made the announcement today on his Web site and his Twitter account. Woods says he will take part in the golf championships Bridgestone Invitational, that is in Akron, Ohio, next week. This will be Woods' first tournament since he withdrew from the players championship in May, due to an injured left knee and strained Achilles tendon. >

Her story horrified the world, the Libyan woman who claimed she was gang raped by Gadhafi forces is now in the U.S. The start of her new life and the details coming up next.

(COMMERCIAL BREAK)

KAYE: It was a horrifying story that captured the attention of the world. We told you about it when it happened. Eman al-Obeidi claimed she was gang raped by forces loyal to Libyan leader Moammar Gadhafi. She arrived in New York two days ago and is now in Denver.

CNN's Khalil Abdallah first met Al-Obeidi in Tripoli in March, when she barged into a hotel frantically telling journalists her story. He's been in touch with her since then and joins us now from Washington.

Khalil, how did Al-Obeidi wind up here? We have watched her go- try to get out of Libya, it seems so difficult for her. How did she end up here in the U.S.?

KHALIL ABDALLAH, CNN PRODUCER: Well, the UNHCR and U.S. government were very interested in her case, and they were able to help her out of Libya and take her to a facility in Romania. Since she is a little bit higher profile than an average refugee, they took special care of her, and expedited her paperwork. She wanted to come to the U.S. And they granted her refugee status in the U.S.

KAYE: That explains why she was thanking the United States government and Secretary of State Hillary Clinton, I guess?

ABDALLAH: Yes, absolutely. During a trip that I took with the secretary, I was able to inform her about the case, about Eman, specifically. And she was very interested in the case itself, and she seemed to know about it. And once -- once that ball started rolling, it was much easier for Eman to make it to the U.S.

KAYE: We talk about the day that she barged into that hotel Tripoli, telling journalists her story. That she had been gang raped by Gadhafi's forces. How much of a change have you seen in this woman from the moment you were there in that hotel that day, to who she is now?

ABDALLAH: When she came into the hotel, she was extremely fragile, she was just able to run away from the people who raped her. And she barged into the hotel, yelling and screaming, "shu fu, shu fu" (ph), look at me, look at me, look what the Gadhafi brigades did to me. And she had stayed in constant contact with CNN. She calls me on a regular basis, and she -- every step she tries to make, she stayed in contact with us just to try and keep herself safe.

Her knowing that somebody knew what her next move was, was giving her comfort. She is much more stable now, the UNHCR has taken a wonderful job of her. And the U.S. government helped a lot. Now once I talked to her in Denver, she says, she's very happy to be here. She is very thankful. And she said that extends her thanks to everybody who helped her and cared about her and she said she'd one day like to meet the secretary of State.

KAYE: We've all followed her story for months and we also, in a way, have gotten to know her family as well. Has she been in touch with her family since getting to the U.S., do you know? And any chance they could join her?

ABDULLAH: I did not ask her if she was able to get in touch with her family, but the family didn't express any interest in coming to the U.S. All they cared about was Eman being safe and being happy and starting a new life.

KAYE: We mention she's in Denver now, any idea what her plans are?

ABDALLAH: She wants to go to school. She wants to learn English. And she wants to start a new life. She's excited about it. And the organizations taking care of her are offering her residency. And they are paying for her rent. They are helping her in her first couple of months, and they are offering her English classes.

KAYE: Well, Khalil, I know you've been in touch with her. Certainly give her our best, It is wonderful to see her safe and sound U.S. soil. Thanks very much for bringing us the latest on her story. Appreciate it.

ABDALLAH: Thank you.

KAYE: Hungry, broke, and bills piled high. It's a predicament many Americans find themselves in, in this recession, but when people in one Wisconsin community are hit hard, they have a very unique safety net. And here's this week's CNN Hero, Sal Dimiceli, helper of the down and out.

(BEGIN VIDEOTAPE)

SAL DIMICELI, CNN HERO, COMMUNITY CRUSADER (On camera): When I go through suburbia America, or the small towns, everybody's trying to hold their head up with pride.

You've been looking to work? OK, I know it's tough in a recession.

UNIDENTIFIED FEMALE: I went and sold all my jewelry yesterday.

DIMICELI (voice over): These people behind closed doors, they tell their neighbors they are fine, they'd soon go in the house and starve.

(On camera): How much you all need right now?

UNIDENTIFIED MALE: The gas bill I owe about $800.

DIMICELI: I'm Sal Dimiceli, and my mission is to help my fellow Americans who have fallen into hard times. In a week I will have receive 20 to 30 letters.

Me, and my family, are in desperate need of help. We do not want to become homeless.

I want to verify it is genuine. And I want to get to them as quickly as possible.

I know right now it's tough for everybody. But we'll be here for you, help you out.

I tell them how I grew up in poverty and how I understand.

Here's $100 for gas.

I help people with necessities of daily life, and at the same time, I get them together to do a budget so they can continue to survive.

I brought this for you s/so you can go get your wedding band back. I want them to feel free of their pain.

UNIDENTIFIED FEMALE: I'm so happy.

UNIDENTIFIED MALE: Thank you.

DIMICELI: I want them to feel the compassion that we're trying to share with them, to wrap our arms around them and say come on, I have a little extra strength I want to share with you, let's get you back on your feet.

(END VIDEOTAPE)

KAYE: Sal and his Wisconsin non-profit help an average of 500 people a year. And, remember, all CNN Heroes are chosen from people you tell us about. You still have time to nominate someone you know who's making a very big difference in your community. Go to cnnheros.com.

Sales tax, gas tax, excise taxes, income tax, property tax, I could go on and on and on. You'll be surprised how much of your income is going not to you, but to your state. We break down the math and it isn't pretty. Next.

(COMMERCIAL BREAK)

KAYE: With Congress still battling it out over the debt ceiling and the nation's credit rating at risk, money is on a lot of our minds. Many of you have looked at your paycheck and wondered where did a good chunk of all my money go?

A big part of that can be summed up in one word, "taxes". There are federal, but in today's big breakdown we want to hone in on state and local taxes, which varies pretty widely depending where you live.

24/7 Wall Street analyzed a report issued by the Tax Foundation that identifies your tax burden within your state. So, take a look. I want to show you the top five states where people pay the most taxes. Coming in at No. 5 is Rhode Island. It may be one of the smallest states, but people who live there actually carry a lot of the tax burden, 10.7 percent of their income goes towards state and local taxes. A lot of that is in sin taxes, the average Rhode Islander pays $672 in sin taxes on things like alcohol, tobacco, and gaming.

All right, now here's a surprise maybe for you. Take a look at Wisconsin. Wisconsin relies more on income and property taxes for its revenue than most states actually, 11 percent of residents income goes towards taxes. Part of that is because Wisconsin receives a smaller portion of federal money than the others that we are looking at today.

Connecticut, for instance, let's take a look at Connecticut's numbers. Connecticut, which has the highest income per capita in the country collects on average more than $5,000 per resident. Part of that is the taxes Connecticut residents pay to New York to commute to work, which counts as Connecticut's tax burden, of course.

Believe me, it's even worse in the State of New York. Take a look here. New York places a lot of its tax burdens on residents from other states, think tourism and commuters. Still, New Yorkers have to shoulder the second highest tax burden in the country, but the highest tax burden is paid by residents living in -- here we go, ready? Neighboring New Jersey. That's where I grew up.

As a percent of their income residents in the Garden State shell out a whopping 12.2 percent of their income to the state. That is nearly double Alaska. Like Connecticut, a lot of the tax burden comes from New Jersey residents, who commute to the Big Apple and pay taxes there as well. Making New Jersey the number one state where people pay the most in taxes. Good 'ole New Jersey.

Well, it is coming up on 3:00, do you know where your children are? You better find out soon, or you could face a fine, or even worse. More next.

(COMMERCIAL BREAK)

KAYE: As a percent of their income, residents in the Garden State shell out a whopping 12.2 percent of their income to the state. That's nearly double Alaska. Like Connecticut, a lot of burden comes from New Jersey residents who commute to the Big Apple and pay taxes there as well, making New Jersey the number one state where people pay the most in taxes. Good 'ole New Jersey.

Well, coming up on 3:00, do you know where your children are? You better find out soon or you could face a fine or even worse.

(COMMERCIAL BREAK)

KAYE: Child curfew laws. Odds are your city has one. Wichita State University reports that in most jurisdictions, minors are required to be at home between 11:00 p.m. and 6:00 a.m. And penalties can include fines and community service, even jail time for the parents of offenders. According to the Encyclopedia Americana, the country's first official ordinance was actually issued in Omaha, Nebraska around 1880, to keep youths absent from, quote, "steamboat landing, railroad stations, and low variety shows." Those crazy kids in the steamboat landings.

Well, today, supporters say the laws reduce crime and protect children. Critics believe they are unconstitutional and only give a false sense of security.

Joining me now to debate this today, in the Stream Team, CNN political analyst, Roland Martin; in Chicago, Mike Shields, the president of the Fraternal Order of Police; and Dr. Steven Salzman also with us, he's a trauma surgeon and police officer, also in Chicago. He's on the phone with us.

Mike, let me start with you, a new curfew for Chicago children just passed the city council. It states minors age 12 and younger need to be in their homes by 8:30 p.m. on the weekdays.

Will this, or any curfew, really keep kids safe?

MICHAEL SHIELDS, FRATERNAL ORDER OF POLICE Well, I think that any law directed at keeping children inside the house is a good start. But, you know, unfortunately, we're living in a Chicago that without having more policemen to be able to enforce it, it's going to be a difficult challenge to actually accomplish this mission.

KAYE: Roland, what do you think, you live in Chicago?

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: I lived in Chicago for six years, and I can tell you, I covered any number of funerals of children who are killed in that city. It is one of the deterrents. I think some people, when they make the assumption that somehow this is the be all to end all, they are wrong. I certainly believe parents must be held accountable to knowing where their children are.

But I suggest to Chicago, utilize those parents who've lost their kids in PSAs, in billboards, to go on radio and television to say why this is needed.

KAYE: Steve, you're a trauma surgeon and a police officer, do you think this is a good idea? How necessary is it to keep kids off the streets based on your line of work?

DR. STEVEN SALZMAN, TRAUMA SURGEON (via telephone): You know, in the end, will it curtail the actual violence happening -- I don't honestly believe that, but what it will possibly do is take these young kids who are many times the victims of violence as sort of this collateral damage of this war that's being waged on the streets and take them out of harm's way. Basically, when we see violent crime, the majority of the shootings and violent crime that happen between the hours of 10:00 p.m. and 4:00 a.m. So, if we can get these younger children off the street earlier in the evening when we have these violent crimes being committed, I would think that the hope is that we would take these children out of the line of fire and potentially save lives.

In and of itself, I think that would be huge, because anybody that does my line of work, certainly here in Chicago, we see countless numbers of young, innocent children victims of violence because in the street is being sprayed with gunfire and they just happened to be at the wrong place at the wrong time.

KAYE: Right. Roland, do you think this is constitutional?

MARTIN: Look, if someone says is it constitutional, I think it is. I'll say this here, for every parent who's had to bury a 9-year- old, a 10-year-old, or 11-year-old, I'm sure the last thing they thought about is what the ACLU thinks or what the critics actually think. At the end of the day, you have to figure out how to control a situation. As the doctor just said, is the collateral damage.

When you have kids being shot inside their homes, with bullets fired from the outside, that's also an issue. This also helps police, because when you have those kids out there, frankly, they shouldn't be on the streets. They need to be able to see all these crazy characters, especially the gang members who are causing a lot of this violence.

KAYE: Mike, would you like to respond to that? Roland says this will help police.

SHIELDS: Well, I think so too. I think it's a good start. But if there's not enough police to police the streets, it's going to be a challenge to do this. This city council ordinances is in response to a 9-year-old that was shot at 3:00 in the morning who stepped outside his house after staying up until 3:00 in the morning with his father playing video games. You know, what planet do we live on where a 3- year-old is up with his father until 3:00 in the morning? You know, parents' actions have to change as well.

MARTIN: First of all, Mike, this was a 9-year-old playing a video game in the house with the father. You're right, I don't know why you're stepping out at 3:00 a.m., but, look, if it's summertime and you want to be up with your kid, and you're going to get up late with your kid, so be it.

SHIELDS: A 9-year-old child at 3:00 in the morning?

MARTIN: You know what, Mike, I'd be honest with you, I stayed up until 5:00, 6:00 in the morning watching movies. So, that's what happened.

SHIELDS: With a 9-year-old?

MARTIN: No, when I was 9. That's what kids do. We stay up.

SHIELDS: OK.

KAYE: Dr. Salzman, let me back to you here quickly. Some of the critics say that, you know, it just isn't worth the police overtime. How is this really going to be enforced?

But you still say yes, it is absolutely worth it based to what you see in the hospital and on the streets there. Is that true? SALZMAN: Yes. I mean, again, I have an interesting perspective seeing things from both sides of the coin. So, again, all you need to see is one child that's innocent and that's the victim of a violent crime, and, you know, to watch one time, to deliver that news to the mother and father, your son or your daughter is being killed, and they've done nothing wrong. They're not members of a gang, they weren't doing anything wrong. They were basically victims of circumstance, at the wrong place at the wrong time.

And I think a lot of it stems on you have to be out of the box in terms of our thinking. I'm also part of something called Ceasefire, which is yet another violence prevention organization to try to prevent recidivism and retaliation. But the (INAUDIBLE) of everything is, it's got to be multi-factorial, we have to approach this problem with a lot of out-of-the-box thinking and it's every little bit helps because if we could save one child's life, you can't imagine how much devastation follows, not just the child's life but the families and other loved ones.

I mean, this is war. And truly needs to be approached like that. So, every little bit helps. Is this the end all, be all, and the answer to the problem? Absolutely not. I think everybody on the panel will agree that's not the answer, but save one life and one life at a time, that's a start.

KAYE: All right, Dr. Salzman, Mike Shields, Roland Martin -- as always, thank you very much. Very, very important discussion to be having.

Time for CNN political update, CNN senior political editor Mark Preston joins us live from the political desk in Washington.

Hi there, Mark. What's crossing the ticker on this Friday afternoon?

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Well, Randi, you know, tradition holds that it's the media, it's us, who do all these presidential debates and presidential forums. We act as a filter for candidates running for the White House.

But this is kind of an interesting year. We're seeing members of Congress get involved. The latest now is Tim Scott. He is a South Carolina congressman. He is going to be holding a series of town halls down in his district. In fact, the first one's going to be August 7th with Jon Huntsman. A little bit later in the month, August 25th, he's going to have Michele Bachmann appear.

What he says is that he's just going to have all the questions come from the audience, they'll pick them out, and whatever the question is, he will ask the candidate.

Now, this is pretty interesting, because on Labor Day, we're going to see Senator Jim DeMint, he's a South Carolina senator, he's holding a similar type of forum.

So, in the past, it's been the media, it's been us. And we've done a pretty good job of it. But now, these lawmakers, Randi, they want to get involved as well.

KAYE: I'm sure they do.

All right. Mark, I want to ask you to stick around. I know this is rare. But you have to take a look at this. There's no real news value to the story, I'm just going to say that upfront.

But this video has gone viral and we have to share this video of two dogs, one starts with a fight with his friend, then you see that? He gets bitten, and then boom, this dog actually plays dead, then he gets up, does it again.

OK, we're going to play for you again because you've got to watch this very carefully here. He gets into a little scuffle, bitten on the neck, boom, goes down, plays dead. And then he kind of looks, OK, is he still here? He raises his head.

Check it out Mark, isn't that hilarious?

PRESTON: He deserves an Oscar, right? Good Lord. If anyone deserves it, he deserves it.

KAYE: Oh, I love it. All right, Mark, thanks for playing along. I appreciate it.

Oh, I love that video.

Well, no one can escape the struggling economy, not even the tooth fairy, it turns out. That story is next.

(COMMERCIAL BREAK)

KAYE: Time now for my "XYZ."

This week, we focused a whole lot on Washington, D.C. and how Congress and the president will cut the deficit. But it's not just folks in D.C. that are looking to be more frugal. It's people like you and me, and yes, it turns out, even the tooth fairy. The economy is in such turmoil that even a tooth isn't worth what it used to be.

According to a story in the "Denver Post," kids reaching under their pillows these days have found an average of 40 cents less per tooth compared to a year ago. The going rate nationally for tooth is down $2.60 from $3. In the West, the tooth fairy is a bit more generous, the average pay out per tooth rose to $2.80 from last year's $2.70.

But as "The Post" says, and other parts of the country, getting money from the tooth fairy is -- well, like pulling teeth. The average pay out in the east is $2.10. That's down 38 percent. The south is down 21 percent. The Midwest is at $2.80, down 3 percent.

All right. My advice, kids, in this economy, you might want to skip the dollars and change, and ask your parents for a shiny gold coin. That might be worth something if and when the government defaults. That will do it for me. Thanks for watching. Have a great weekend.

CNN NEWSROOM continues with Brooke Baldwin.

Hi, Brooke.