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Payroll Tax Standoff; Santa Ana Winds Ease; Penn State Helping Sex Abuse Victims; FAMU President Suspends Task Force; Unemployment Drops; Colleges Pay Kids Who Don't Need Aid; HIV Teen Denied Admission To School; Chris Gregoire Interview; U.S. Hands Over Camp Victory to Iraqis; Washington State, Rhode Island Ask DEA to Allow Medical Marijuana

Aired December 02, 2011 - 13:00   ET

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

(COMMERCIAL BREAK)

T.J. HOLMES, CNN ANCHOR: Hello there, everybody. I'm T.J. Holmes. Thank you for being here. Randi Kaye is off. Let's get right to the news today.

And President Obama is taking comfort and, yes, even a little credit for a brand-new jobs report that shows movement in the right direction. The month of November saw a net gain in jobs of 120,000. Also, a surprising drop in the jobless rate from 9 percent to 8.6 percent. We'll get into the numbers more here shortly, but at an event promoting energy efficiency, the president noted 21 consecutive months of private sector job creation and pledged to keep the growth going. And to that end, he wants Congress to work through the holidays if they need to to pass an extension of a payroll tax cut.

All year long, Americans have paid just 4.2 percent on their paychecks into social security as opposed to the usual 6.2 percent, but that's due to end at the end of this month. Democrats want the cut deepened to 3.1 percent with a new tax on millionaires to pay for it. Republicans say they could live with extending the current rate, but only if spending cuts offset it. Last night in the Senate, both parties' plans were voted down so there is work to be done before the end of the year.

Also, out in California, powerful winds are still in the forecast for parts of southern California. Nothing like the winds that did this though. Did you see this damage? Gusts topping 140 miles an hour were measured in the mountains outside Los Angeles. At 140 miles an hour, that equals a category four hurricane. Also, you can imagine power lines were just no match for some of this. A lot of people, tens of thousands of them, are without power still today.

Also ,Honda has expanded a previously announced recall to nearly 900,000 vehicles. The problem is potentially dangerous air bags. The global recall affects several cars in their line-up, including the Accord, the Civic, the Odyssey, CRV, Pilot as well, this would be the models years of 2001 to 2003. Most of the cars targeted are in the U.S., but vehicles have been also been recalled in Japan, Australia and Taiwan. Penn State University said they will donate $1.5 million to the Pennsylvania coalition against rape and the National Sexual Violence Resource Center. The funds will come from Penn State's share of this year's Big Ten Bowl revenues. In light of this recent scandal, the president of the school, Rodney Erickson, says, quote, "We can and will do more to stop and prevent abuse."

Also, the president of Florida A&M University has postponed the work of a task force set up to review anti-hazing regulations on campus. He says the postponement is to allow the University to fully cooperate with an investigation set forth by the Florida Board of Governors and into the university's handling of hazing activities. This, of course, coming now after the death of the band's drum major, Robert Champion. Champion's parents say hazing is to blame in the death.

Also, we'll stay in Florida now where the mother of singer Mindy McCready is pleading for McCready to bring back her 5-year-old son Zander. Now, Zander, you're seeing right there, was last seen Tuesday at the Cape Coral home of his grandparents who have legal custody. Now, McCready was visiting at the time and doesn't deny she took her son, authorities now consider him a missing person. Police nationwide are being asked to take him into custody on site. McCready, by the way, happens to be pregnant with twins right now.

And the wife of Georgia evangelist Eddie Long has now filed for divorce. Vanessa Long says the decision came, quote, "after a great deal of deliberation and prayer." End quote. This comes also after a year that saw Bishop Eddie Long being sued by several young men for allegedly coercing them into sex. Those cases were settled out of court in May.

Well, Billy Graham, Steve Jobs, and former President Bill Clinton, all three among a group of people being considered by the U.S. post office for the first-ever postage stamp to honor a living or recently deceased American. The postal service recently waived rules requiring an honoree to be dead at least five years and asked its customers to submit the nominees.

Well, good news and possibly some bad news on the job front. The unemployment rate is down, that's great, but those with jobs now facing a possible payroll tax hike. We'll look at how all this is affecting you. You need to stick around for "Facetime," that's coming your way shortly.

But first, a salute to all U.S. service men and women who have serviced in Iraq. Today, the U.S. handed over control of camp victory to Iraq. The one-time palace of Saddam Hussein served as headquarters for U.S. forces there. Just about all the American service members will be gone by the end of the year. More than 4,400 U.S. service members have died in the war since 2003. So for your unparalleled service and your sacrifice, all of you who have served, you are today's "Rock Stars."

(COMMERCIAL BREAK)

HOLMES: So, before the recession an unemployment rate of about 8 percent or above, that would have sounded like a nightmare. Today, still a bombshell but would you believe it's actually a good one? The official November jobs report shows a net gain of 120,000 jobs. Private employers actually added 140,000 jobs, government's cut 20,000. None of that was necessarily surprising but here is the surprise, the jobless rate dropped four-tenths of a point to 8.6 percent. No doubt that's still too high but that's the lowest we have seen since March of 2009. Now another headline, 72,000 more jobs were added in September and October than first thought.

Now, here's another thought for you. All those newly hired people and everybody else who draws a paycheck face a possible tax hike January 1st, that is if Congress and the president don't extend a cut in the payroll tax that's due to run out at year's end. They're still trying but rival plans both fell short in Senate votes just last night.

Joining me now with his take on all this, Peter Morici, Professor of International Business at the University of Maryland. Always good to talk to you. You give me a reason for being optimistic today.

PETER MORICI, FORMER DIRECTOR OF ECONOMICS, U.S. INTERNATIONAL TRADE COMMISSION: Well, certainly we're creating more jobs than we were during the summer, and that's good news. However, we're not creating enough of those jobs. Unemployment fell largely because people left the labor force. Many more people left the labor force, quit looking, than found jobs.

HOLMES: How significant was that number, historically speaking, the number of people who left, who just gave up looking for jobs?

MORICI: Very significant. A lot of them are women, and I suspect those are two-income families where the second income is smaller, especially in my age group, you know where the job prospects are so poor for the lower income earning spouse that they just decide it's not worth it. If the job market gets better, they come back and that means that the unemployment rate goes back up again.

OK, and -- that's the danger here, because this is -- give me a comment on this first. How important just psychologically is it for us to get below 9 percent?

MORICI: It's good news. We've got to get people feeling better. This will accomplish that.

HOLMES: OK, but at the same time, people feeling better about the economy, that means they might go back out and start looking for a job. So, those same people that just left that job market might try to get back in it.

MORICI: Now you know why most undergraduates consider economics maddening, you're absolutely correct.

HOLMES: So, what about the segments where we saw the job growth? We're not seeing it grow enough in the sectors we need it, are we?

MORICI: Absolutely. You k now, the core private sector -- you look at the core of the private sector, 140,000 jobs, but health services added a lot, social services, those are heavily subsidized by the -- by the government. A lot of temp jobs, core jobs were about 94,000. And in order to bring unemployment down to, say, 6 percent in three years, we need at least three times, perhaps four times as many core jobs and that provides the revenues to pay the taxes.

HOLMES: How will this help-- this fight that's going on in Washington, D.C. right now. How will it help our jobs outlook, the jobs picture, if Congress does extend that payroll tax cut or if they do not and we essentially see a tax increase January 1?

MORICI: We'll get the payroll tax cut extended. The question is by how much and how do we pay for it? Unfortunately, the process of paying for it means that its impact will not be large. Whether you do it by raising taxes or cutting spending. And also, it is a temporary measure. We have to address the structural problems, you know, the trade deficit with China, high energy prices, and so forth, that everyone agrees needs to be dealt with but neither the Congress or the president can focus because they're always quarrelling with one another.

HOLMES: Well, that's just what they do, isn't it? So, still got some work to do before the end of the year. The president wants them to stay through the holidays.

MORICI: Yes.

HOLMES: We'll see how that works out. Peter Morici, always good to talk to you. You enjoy your weekend, all right?

MORICI: Thank you very much.

HOLMES: All right. Well, you know the saying out there, the rich just keep getting richer. That might not be far from the truth, even on college campuses. We'll tell you how colleges are giving financial aid to the haves over the have nots.

(COMMERCIAL BREAK)

HOLMES: So, I want to show you a dollar figure right now, $5.3 billion, more than the GDP of some small countries. Some companies, they would love to make that much in revenue. So, it may shock you when I say that this is the amount of money going to college students who really don't need it. Money that is ultimately being taken away from struggling college kids who really do need it. At least that's according to new figures we're getting from the college board, and that is today's "Undercovered" story. But that's not all to the story here, families with incomes from $100,000 to $180,000 got an additional $4 billion in federal tuition tax credits.

Richard Kahlenberg is a specialist in education from The Century Foundation. He's with us now from D.C.

A lot of people who just heard all those numbers I went through had the simple question why. So, why?

RICHARD KAHLENBERG, SENIOR FELLOW, THE CENTURY FOUNDATION: Well, the merit aid programs are put in place by universities who are trying to compete for the smartest students, which is a rational thing for them to do on an individual basis. But on a system wide basis, this system makes no sense. We're giving billions upon billions of dollars to kids who don't need this aid and that's squeezing aid for the low-income students.

HOLMES: And, Richard, when we say kids that don't need the aid, we're talking financially. But these are also kids who have earned it through their grades and their test scores. That's right. It just so happens that a lot of these kids come from maybe more affluent families.

KAHLENBERG: Well, that's right, but when you think about the policy, particularly when we're talking about federal tax breaks, it really makes no sense to give aid to kids who would go to college even if they didn't receive this aid. The public interest in trying to get more kids to go to college is really what we ought to be focusing on rather than giving money to kids who would go whether or not they got this aid.

HOLMES: So, Richard, why the shift? And what we're talking about here is one pot of money and eventually some of the schools are putting more of that money into the pot for merit-based versus need-based. So why that shift? Why go towards the merit-based?

KAHLENBERG: Well, they're trying to increase their rankings on the "U.S. News & World Report." So from their standpoint, it makes sense. They're competing against one another based on prestige. But the system as a whole doesn't function well when we are focusing and showering aid on kids who really don't need it.

I mean right now at the most selective colleges, 74 percent of the students come from the richest socioeconomic quarter of the population, and just 3 percent from the most disadvantaged quarter. So, in other words, you're 25 times as likely to run into a rich kid as a poor kid on these selective campuses. So something's out of whack here. We really need to be focusing our aid on the kids -- the low income students who are also talented and really need that aid.

HOLMES: Is this -- is the number distorted at all? Given the economic times we're in, where even though $100,000, $150,000, $180,000 might sound like a lot of money, and certainly that is to somebody whose family is making $30,000, $40,000. But is it possible that given the times that many of those people with household incomes of $100,000 plus, they can put -- be put into the category of struggling as well? Is that fair at all?

KAHLENBERG: Well, on one level I think that is fair. I mean college tuition has been skyrocketing.

HOLMES: Right.

KAHLENBERG: And so everyone needs a little bit of help. But the point here is that the evidence from a number of studies finds that the degree of unmet need -- that is the need beyond grants and loans and everything else that's provided -- is greatest still for the lowest income students. And we're missing out on the talented low income students who have a lot to offer this country and are now being effectively shut out from -- particularly from selective colleges.

HOLMES: Richard, I think a lot of people absolutely agree with that. And we'd love for it to shift back. We'd love for college education to be a lot cheaper these days as well.

Well, thank you so much for your time on this. An important story that might not be getting enough attention. Thank you so much. You enjoy the rest of your weekend.

KAHLENBERG: OK. You, too. Thanks.

HOLMES: All right, well, coming up next, a story that's probably just going to flat-out outrage you. A school accused of discriminating against a young boy. Not because of skin color. Not because of his faith. It's because he has HIV. Is this legal? The boy's attorney certainly doesn't think so. And that attorney joins me next. Stay with me.

(COMMERCIAL BREAK)

HOLMES: Well, attorneys for a 13-year-old Pennsylvania boy say he has been denied admission to a private boarding school. Why? Because he has HIV. The boy's family is suing Milton Hershey School for allegedly violating anti-discrimination laws that protect the rights of people with HIV. The boy is an eighth grader in a Delaware County Public School. Milton Hershey School says its decision was made to protect the health of its students.

(BEGIN VIDEO CLIP)

CONNIE MCNAMARA, MILTON HERSHEY SCHOOL: He has to balance our desire to serve this individual with our obligation to protect the health and safety of the 1,850 students already in our care.

(END VIDEO CLIP)

HOLMES: Here's part of what the Centers for Disease Control and Prevention says about HIV. HIV is not transmitted by casual contract, such as shaking hands or a casual kiss. Infection is not possible from a toilet seat or a doorknob or from drinking fountains. Attorney Ronda Goldfein is representing the boy's family. She's executive director of the AIDS Law Project of Pennsylvania.

Ma'am, thank you for being here. And does the back-and-forth continue between the boy's family, you as well, and the school so there could possibly be a resolution to this? Is there any update on that front?

RONDA GOLDFEIN, EXEC. DIR., AIDS LAW PROJECT OF PA.: We haven't heard from the school that they've changed their position. Our goal all along has been to get our student into an appropriate academic setting. We hope that Hershey would understand their position is not supported by the law or the science.

HOLMES: So what was your reaction? What was the boy's reaction, the family's reaction initially, when he was told he was not going to be admitted to this school for one reason and one reason alone?

GOLDFEIN: Actually we heard the response kind of in tears. In August we learned -- excuse me, in June we learned that they weren't admitting him because of his documented need. And we suspected they were referring to his HIV status because, otherwise, he's completely qualified for the school. He's got a good academic record. He participates in after-school activities. The only thing in his medical records is he does have a virus. He does have HIV. So we suspected that was the reason.

But it wasn't until earlier this week that they confirmed that they excluded him because he has HIV and, worse, because they think that this little boy, this 13-year-old boy, is somehow a risk to the 1,800 students at that school. It was a pretty stunning response on their part.

HOLMES: Also, the school is now saying that they were working, they wanted a federal review of it and wanted to get some kind of a judgment and resolution to the case, but they said the boy's -- the people on behalf of the young man decided to file a lawsuit instead and that was really set up an adversarial relationship now between the two sides. Do you agree with that? Was that possible to talk through and work this out before going into a courtroom?

GOLDFEIN: Well, we attempted, since August, to work this out and really hadn't gotten anywhere with the folks at Hershey. The idea that they were going to seek an advisory opinion from a federal court is a bit unusual. I'm not really aware of federal courts issuing advisory opinions. We clearly --

HOLMES: And, ma'am, can --

GOLDFEIN: Sorry.

HOLMES: Oh, please continue. I'm sorry.

GOLDFEIN: And we decided that once we were more than a third of the way into the academic year, that we had no choice but to file a lawsuit and finally get this matter on the table.

HOLMES: Well, ma'am, and I'm not sure if this has been public knowledge or if you can tell us, but how did the young man, who's 13 years old, come to contract HIV?

GOLDFEIN: You know, much like Ryan White, the student who was denied a seat in a class 26 years ago, we'd like to stay focused on the idea that HIV isn't something to be afraid of and not really go into those particulars.

HOLMES: OK. Understood. And again, the school says at least -- and you can understand why this is different from the Ryan White case -- in that he was going to school for the day and he would go home to his parents and go home at night. They say at least the school that this is different because this boarding school would put kids around at age 13 years old, in close quarters together. They would be living together. Ten to 12 in a home. And as I'm reading their statement, they say, "we are serving children and no child can be assumed to always make responsible decisions that protect the well-being of others."

Is there any threat or risk there that you're putting other children in some kind -- I mean it might not be that possible, but there is a slim chance that given kids in these tight quarters, things or something fluky could happen.

GOLDFEIN: No. I think that that argument is just a red herring. I mean let's think about it. The courts have been clear that there's no reason why children with HIV can't be in congregate settings. They can go to school. They can go to day camp. So what is it about this setting that from 8:00 p.m. to 7:00 a.m. that creates this great risk that's not in a day school?

I mean we shouldn't think that these folks are in a submarine. They're in a school. And they're in a school where there should be parents who are -- house parents who are supervising their activities. Even if -- even if they thought that our student presented some degree of risk, they didn't do any analysis. They didn't look into it. They didn't consider him. They just decided that that diagnosis was too risky for them.

HOLMES: Does he still want to go to school there?

GOLDFEIN: Sure he does.

HOLMES: All right.

GOLDFEIN: He wants a good education and the Hershey School boasts academic excellence. We hope that they'll understand that he can be a good student.

HOLMES: Well, Ronda Goldfein, we really do appreciate your time. Really, this is a story that shocked and outraged a lot of people and certainly unfortunate for the young man and maybe still a lot of education and work needs to be done in this country when it comes to HIV and AIDS. Thank you for your time. We'll follow up with you, OK?

GOLDFEIN: Thank you for your interest.

HOLMES: Yes, ma'am.

We're getting close to the bottom of the hour now. We're going to turn to some politics here in a moment. First we're talking Newt Gingrich. You know, he said anti-labor laws were, quote, "stupid." Now he's saying poor kids have no work habits. That's "Fair Game." That's next.

But first, a question for all you political junkies out there. Republicans laser focus on Iowa and the caucus there. It's the first real test for the candidates. But they're a modern political device. When were the first -- they first used to help determine who'd get the nomination for president? And who used them to build his reputation that year? You know those answers? I'll give them to you after the break.

(COMMERCIAL BREAK)

HOLMES: I wanted to know, when did the Iowa caucuses begin the first step in nominating the presidential candidates, and which man, that year, largely built his reputation in Iowa? The answer for you, the year was 1972. The man, Democrat, Governor George McGovern, or Democrat George McGovern, I should say. He built a national reputation on his showing in Iowa and went on to win the nomination for president.

We stick with some politics. We'll go to the campaign trail. And anything a candidate says is "Fair Game," of course. And Newt Gingrich has been saying a lot. He says some pretty edgy things every now and again, like this comment about poor kids and developing a work ethic.

(BEGIN VIDEO CLIP)

NEWT GINGRICH, (R), FORMER SPEAKER OF THE HOUSE & PRESIDENTIAL CANDIDATE: It would be great if inner city schools and poor neighborhood schools actually hired the children to do things. What if they cleaned out the bathrooms and what if they mopped the floors? What if they, in that process, were actually learning to work, learning to earn money? They had money on their own. They didn't have to become a pimp or a prostitute or a drug dealer.

(END VIDEO CLIP)

HOLMES: Woo.

Let me bring in Will Cain, a CNN contributor, in New York for us, also Ed Espinoza, Democratic political consultant, joining from us Austin, Texas.

Ed, let me start with you.

Did he have a point? Did he have another big idea and he just didn't phrase it the right way?

ED ESPINOZA, DEMOCRATIC POLITICAL CONSULTANT: Well, look, it is appropriate it is December because Newt Gingrich is having his Ebenezer Scrooge and Tiny Tim moment with this right here. He needs to pick on someone his own size. If he wants to talk about jobs, that's fine. But don't pick on poor kids. The way to do it is to advocate for President Obama's jobs plan. That's something that's tangible and on the table, and let's leave the kids out of it.

HOLMES: OK, Will, will you please talk some sense into Ed over here? He just said Gingrich was going to advocate for President Obama's job plan.

(LAUGHTER)

WILL CAIN, CNN CONTRIBUTOR: No, he's not going to do that. I'm afraid my friend, Ed, is indulging a little more -- indulging being enraged over this issue much more than being logical on this issue.

Look, I have many, many harsh words for Newt Gingrich and his substantive policies. But my friend Kevin Williams, at "National Review," put this best. Newt Gingrich has a habit of putting his foot in his mouth while putting his finger on the issue.

The bottom line is this. Unemployment is higher in poor neighborhoods. In poor neighborhoods, there are fewer people trekking off to work and the kids in those neighborhoods aren't seeing people developing work habits or emulating -- they don't have work habits to emulate on such a high degree. So I don't know why that's so offensive. It is simply a string of logical conclusions. Would it be helpful to do something in those neighborhoods? Yes, it might be.

By the way, if it offends you that he suggests we should do away with child labor laws in response to that, I just have to say to you, look, the higher barriers you place to work, the lower participation you're going to have in it.

HOLMES: It looked like you wanted to respond there for a second, Ed. Do that quickly so I can move on to the next question here. But go ahead.

ESPINOZA: Well see, the problem is it's not that he's talking about kids not having work ethics. It is a problem to assume that poor kids have any worse of a work ethic than kids that come from well off communities. When you make comparisons saying they're automatically going into drugs or pimping or anything else like that, that's too far. He is a public leader. He shapes public opinion. He needs to be more careful with his words.

HOLMES: Let me move on to the next question. I heard many people, in your field, more and more, talk about this is a two-man race now. Heard that before, but it looks like it is really shaping up between Newt Gingrich and Mitt Romney. We've got some numbers we can put up here for why people like one over the other. And it looks like Gingrich really takes it on being the most qualified to be commander- in-chief, understanding the complex issues, and agreeing with some of your opinions. This is a Republican survey.

But it seems, at least, Will, like Romney wins when it comes to most likable. Is that good enough?

CAIN: Yes, I do think it will be good enough. Substantively -- I have to hope, I have to see substance will win out eventually. I see very little that distinguish these two men. If you want to accuse Romney of being a flip-flopper, of being on both sides of an issue and being unprincipled, that applies just as much to Newt Gingrich. He's been on both sides of virtually every issue from mandates to global warming. It's not as though he can proclaim character qualities above Mitt Romney. This is the man who has had three wives and a series of fidelities. I don't see -- all the positives flow to Romney.

HOLMES: Ed, wrap it up here. Is likability enough to carry Mitt Romney?

ESPINOZA: Well, the problem is with any primary, Democratic, Republican, anything, you got to play to your base. Romney just isn't winning over the base. He might be likable. He might be good among Independents. These aren't the voters. Gingrich is the guy that the conservatives are gravitating towards. and is it a two-man race? Well, it is today. But --

(CROSSTALK)

CAIN: It's not. That's got to be corrected.

(CROSSTALK)

CAIN: It's not a two-man race. We can't say that.

(CROSSTALK)

HOLMES: How many man or woman race would you say it is, will?

CAIN: People are going to accuse me of wishful thinking here, but I think Jon Huntsman has a shot in New Hampshire and we'll see what happens from there.

HOLMES: All right.

CAIN: History suggests --

(CROSSTALK)

ESPINOZA: Like I said, it's three weeks. We'll see what happens in three weeks.

HOLMES: Ed, Will, I know I'll talk to you again.

That's all "Fair Game."

(LAUGHTER)

Gentlemen, good to see you. Enjoy the rest of your weekend.

We got a big hand-over and a major U.S. milestone happening in the Middle East today. You may know where. We'll take you there in two minutes. You stay with us.

(COMMERCIAL BREAK)

HOLMES: Let's go "Globe Trekking" now. We go to Iraq where the United States has handed over control of one of the most high-profile American military facilities, Camp Victory. Just a few hours ago, the hand-over took place and U.S. troops are out of there. At one point, it housed as many as 40,000 U.S. service members.

CNN's Martin Savidge joins us now from Baghdad.

Martin, hello to you. What were these ceremonies like today? Must have been a heck of a moment.

MARTIN SAVIDGE, CNN CORRESPONDENT: It was a heck of a moment, actually, T.J. You are absolutely right. This really shows that this withdrawal of U.S. forces now out of Iraq is moving and moving quickly. And today was a huge point in that draw-down. There wasn't a single camera there and there wasn't a reporter allowed to see it. It was extremely low key, which was really remarkable given, as you just pointed out, that this was the largest U.S. base during the entire Iraqi war. It was actually known as VBC, Victory Base Complex. It was a series of bases located outside the Iraqi airport, had a perimeter of some 27 mile. And at one point, as you pointed had, had 40,000 people that were there, U.S. soldiers. There were 20,000 contractors on top of that.

So amazing, major facility, but it was closed down with little or no fanfare. It was about noon. A couple of soldiers for the U.S. climbed into their vehicles and documents were signed with the Iraqis, and that was it. They left.

HOLMES: That was it, they left, and they know they are not going to be going back.

Martin, thank you.

Want to share with our viewers what they're are seeing on the right corner of your screen there, that's a live picture, I believe, we are showing you out in California, a homecoming taking place out there. We show you this -- this is a little choppy but, hey, we'll deal with it right now because you have members of the 297th Military -- this is the National Guard, actually, a lot of members coming home from the 297th Medical Company. This is a final National Guard unit to return home from Iraq, and they know they won't be going back to Iraq. Again, all U.S. service members will be out of there. This is a nice picture.

Can I listen to this for a moment, Mike?

(CHEERING)

(CROSSTALK)

SAVIDGE: Again, we're watching this scene. More will be taking place because so many -- so many of these service people over here are just looking forward to that same moment as they head south, as they get out of Iraq, as they get into Kuwait, they are waiting for their same reunions to take place. I can tell you, from talking with them, they are looking forward to having a scene just like this.

HOLMES: You know, Martin, the scene is different this time because many of them are hugging their loved ones, knowing they're not going to be going back. And that's different from a lot of these homecomings we've seen over the past several years.

SAVIDGE: And a lot of these soldiers, I know from talking with them, they are going to move on with life. Many of them are planning to get out of the military now. This is it for them. It is not just the end of a deployment. It is the end of their military careers. So you're right, it is a real moment in their lives, a real change for all of them and their families.

HOLMES: You just can't beat this. Again, this is out in San Mateo, California. We have a live camera inside the building they'll be going into as they are entering. You see it now there, a lot of families were outside greeting the family members. They couldn't wait until they got inside the building. They greeted them on the bus.

But these things absolutely just never get old and this comes with a different -- this is a different symbolism now and there is a different mood here because, as Martin just said, many of these soldiers know they will not be going back to Iraq.

People are welcoming their loved ones, their husbands, their wives in some cases, their mothers, their brothers, their sisters, their fathers, whatever you want to call it, welcoming them home, knowing they can hug them and hold on to them, quite frankly.

They're not going to be deployed again. Won't be going back to Iraq. Sure, some other assignments they could get around the world, but they're not going back to this war zone in Iraq. And so this -- look at that. You just can't beat that. Just a wonderful thing we're able to bring to you live as these young men and women, these service members, who sacrifice so much over the past several years, knowing that the Iraq war is wrapping up and they will not be going back there.

I'm going to shut up now and listen to some of these last sounds as we take you to break, listening to this and watching this homecoming of American service members.

(CROSSTALK)

UNIDENTIFIED REPORTER: What does he look like to you now?

UNIDENTIFIED U.S. SOLIDER: Like a little boy that's going to run around (INAUDIBLE).

UNIDENTIFIED REPORTER: What are you looking forward to doing most now that you're back?

UNIDENTIFIED REPORTER: Relaxing. Relaxing the next month.

(COMMERCIAL BREAK)

HOLMES: 50 state governments, one federal government, they're not going to agree on everything, like marijuana. 16 states and D.C. have legalized marijuana for personal medical use. But the feds consider possession for any purpose a crime. Now comes the governors of Rhode Island and Washington State petitioning the DEA to classify marijuana from a Schedule I drug, which is completely off-limits, to a Schedule II, meaning it could be used for treatment.

Washington governor, Chris Gregoire, joins me now on the line.

Governor, you sent a letter to the DEA making this proposal, making this request. What do you think your chances are?

CHRIS GREGOIRE, (D), GOVERNOR OF WASHINGTON STATE: Well, you know, I think they're good, because, one, it is the first time governors have ever done anything like this. It's the first time there's ever been a request to go to a Schedule II. Everything before that has been something like Schedule III. We have the National Academy of Sciences, the Medical Association, the Pharmacist Association, all saying now the science has changed. What we have provided for them is a very serious science-based peer-reviewed report of over 700 citations to medical research, so medical research. So I think it's time and, frankly, we can't have the situation we have in the states any longer.

HOLMES: And, Governor, the laws for you and other governors as well, you all are trying to regulate that as well but your state employees, who might work for the agency that regulates the dispensaries and growers, could possibly face prosecution from the federal government?

GREGOIRE: That's right. Almost every U.S. attorney in every state that has legalized medicinal marijuana has now written and said any state employees could be subject to prosecution. With that in mind, with enforcement being stepped up in virtually all of the states, and the voters of my state saying we want medicinal marijuana, what happens in the end is the patients get left out. So with this petition, we hope that we have found a safe and secure way through a pharmacy or for patients who are legitimate to get the marijuana that they need.

HOLMES: And you say through the pharmacy, Governor. Do you imagine a day, if this is OK, you could walk into a Walgreens pharmacy and they can hand you marijuana?

GREGOIRE: Yes, but it will be done in a much more sophisticated way.

(LAUGHTER)

They will be looking at how much the dose should be and what the patient really needs and what other prescriptions the patients might be on. That's why it's critical. It's one thing to say medicinal marijuana. It's another thing to be done by pharmacists who are supporting this petition because they believe that's the right thing to do.

HOLMES: Governor, one last thing. How close is this? If they determine that it's a schedule II, how close is this to that fine line of marijuana being, frankly, legalized?

GREGOIRE: You know, I know people have other purposes in mind, and that's why the 16 states that have legalized it for medicinal purposes are having huge problems with enforcement from U.S. attorneys. But the bottom line is, patients deserve and need, and the medical research is there to say it is helpful to them, and it's no more a problem than an opiate that can cause a problem with medicinal marijuana. So we think it's the right thing to help patients to get it safely and securely at their local pharmacy. It's time we made that change. And that is not a step towards legalization. It's a step towards what is right for patients medicinally.

HOLMES: Do you have a time line for the D.A. for an answer?

GREGOIRE: We are asking them to expedite it because we have shown them the changed science. But who knows how long it will take.

HOLMES: All right. Governor, we thank you for your time. We certainly will follow up with you.

GREGOIRE: Thank you.

HOLMES: We'll turn back to the jobless numbers in a moment. And a side bar, your 401K all get indications, but perhaps the best insight into the economy are letters that Santa receives every year, especially this year. We're talking about that next. Stick around.

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HOLMES: Well, despite some news about the unemployment rate, many families are still struggling. And no one seems to know that more than Santa. I'll give you a rare glimpse of what Santa sees, letters to Santa from children, even moms, dads, parents, and grandparents, who's Christmas wishes say it all.

This is from a grandma with the name Victoria. "My daughter's mother has been unemployed for 2.5 years. This might be a sad Christmas, maybe the worst Christmas ever."

Another from Wilma saying" Dear Santa, I am 10 years old. My mom died of cancer and my grandmother took care of us. My grandmother doesn't have money to buy us what we need for school."

Just a glimpse of how much families are hurting this Christmas.

Pete Fontana is joining us. He is the chief of Elf Operations at New York's main post office.

Pete, are these letters starting to come in already?

PETE FONTANA, CHIEF, ELF OPERATIONS: They are coming in by the thousands every day.

HOLMES: Every day? How does this year compare to years past when you s see those letters come through?

FONTANA: I would say it's about on the same par for the course as last year. Last year, we had about 1.8 letters to Santa here in the New York area. and we'll probably realize that figure or better this year.

HOLMES: I just gave them a glimpse of some of these letters. I read a couple of exerts there. But would you say that follows along the main theme of a lot of them that you are seeing?

FONTANA: Absolutely. We're seeing a lot of needy letters. Last year as well. This year it seems even more. Homeless children living in shelters, people asking for basics, like winter coats and gloves, and just to help pay the bills. It's unbelievable.

HOLMES: When did you start to see that transition over the past several years? Kids, of course, you get these every -- I shouldn't say this every now and then, people are always hurting. But when did you really start to see the uptick over the past few years --

(CROSSTALK) FONTANA: I would say last year.

HOLMES: Last year?

FONTANA: There was a notable increase.

HOLMES: When you say notable increase, I guess, it's probably hard to put a number on it, but give me an idea of the percentages or the how much of an increase we're talking about?

FONTANA: I would say that -- we get the traditional letters from everyone, the rich kids, the middle class kids, and the poor kids. But I always think that the people are wanting and hurting and needing are sending more and more of these letters to Santa reaching out for help. I would say that portion of it has increased significantly over the last few years.

HOLMES: Pete, how difficult is it for you to read over these letters constantly?

FONTANA: It's very difficult. I read them and it sort of wears you down a little, and you have to stop reading them at some point because I get too involved.

HOLMES: Pete, one last thing here. A lot of people want to get involved. Most of these letters will certainly make their way on to Santa. And he'll deliver on a lot of the requests. But a lot of people out there would like to help out. How could they do so as well?

FONTANA: Go to usps.com and check the locations. There's 75 locations throughout the United States. But if they are in New York City, they can come here at the main post office, the James A. Farley (ph) Building across the street from Penn Station. We'll be here until December 23rd.

HOLMES: Pete Fontana, thank you so much. We'll check in with you again. FONTANA: Thank you.

HOLMES: Turning to some politics. Paul Steinhauser is joining me.

Paul, you've been monitoring a Herman Cain, supposed to take place -- I think it's supposed to start at the bottom of the hour. Is it under way?

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: It's under way right now. Let's take some live pictures, T.J. This is in Rockville, South Carolina. Herman Cain had a campaign event. Guess where he goes next? Home to Atlanta, Georgia, and he's going to meet with wife, Gloria Cain, and they're going to talk about those allegations of a 13-year affair that he had. He says, after he talks to his wife and family, that he is going to come to a decision by some time this weekend on whether he stays in or drops out of his presidential nomination.

One thing, T.J., earlier today, he sent an e-mail to supporters. Here's what it says: "I'm inviting you to share your voice with me, my family and staff and the nation. In short, I need to know if you are behind me 100 percent."

Herman Cain needs to find that out from his supporters. And he needs to find it out from his wife. Stay tuned on this story, T.J.

HOLMES: We're standing by this weekend. He's making a plea, as if, hey, if I stay in this thing, are you going to stick by me.

Wrap this up in the 20 seconds that I have left here, Paul. Is this a plea for money and has money been drying up?

STEINHAUSER: Money is drying up and poll numbers are driving. Yes, he needs to know if he has support, T.J., and he needs to know if his wife is behind him as well -- T.J.?

HOLMES: It's going to be an interesting weekend. We're all standing by and anticipating his arrival here in Atlanta.

We'll be checking in with you plenty throughout the weekend.

Thank you so much.

Thank you to our viewers, thank you for sticking around with me this week.

Right now, I need to hand it over to Brooke Baldwin, who continues the next hour -- Brooke?

BROOKE BALDWIN, CNN ANCHOR: T.J., thank you so much.