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GOP Fights Back on Outsourcing; Tom Cruise, Katie Holmes Settle Divorce; Russian Ships Heading to Syria; It'll Cost You More to Shop Online; Middle Class Taxes to Rise; Egypt's Pres. Defies Military Rulers; Washington Monument Staying Closed; Royals Fans Boo Cano at HR Derby; "50 Shades of Grey", the Musical
Aired July 10, 2012 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: I like that bottom line. Thanks, Christine.
Good morning. Happening right now in the NEWSROOM, on the attack. The showdown is in Iowa this morning as RNC chair Reince Priebus goes after the White House, showing up in Cedar Rapids just hours before the president. His goal, to promote the Republicans' new Web site out just today slamming Obama saying the president shipped the recovery overseas.
The war on drugs. It's a failure. New Jersey Governor Chris Christie mincing no words, saying his state is warehousing addicts every day and giving them no treatment.
The governor and the Gestapo. Maine's Republican governor walking back comments he's made comparing the IRS to the Nazi secret police. This morning we hear from Governor Paul LePage.
And extreme heat, records smashed from the Midwest to the East Coast. The soaring temperatures baking the country and now a new record. This past year has been the warmest ever for America.
So turn up the AC, grab a cold drink, NEWSROOM begins right now.
Good morning to you. Thank you so much for joining us. I'm Carol Costello.
Right now, President Obama is just about to head to the heartland. He is visiting the battle ground state of Iowa and reaching out to middle class voters. That's who would most benefit from his plan to extend the Bush era tax cuts.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Here's what's going to change is basically if we don't do anything, then everybody's taxes go up at the end of this year. Now, understand what I'm proposing is 98 percent of America, 98 percent of American families, won't see their taxes go up according to my plan. The only folks who would see their taxes go up would be the top 2 percent, folks like me who don't need those tax breaks, are doing just fine without them. (END VIDEO CLIP)
COSTELLO: Republicans will seize the spotlight first in Cedar Rapids. Just before the Obama event, GOP leaders will unveil this Web site to take one of Obama's arguments and turn it against him. Outsourcing. That's what it's about. Weeks after the Obama campaign first accused Mr. Romney, the businessman, of sending American jobs overseas, Republicans return fire.
They say the president did the same thing, using your taxpayer money in the stimulus projects that helped green projects overseas.
(BEGIN VIDEO CLIP)
REINCE PRIEBUS, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: That electric car company in Finland where we sent half a billion dollars over there. Never came back here. They never opened the plant in Delaware. This is not the first day we've have talked about this. I've talked about this six months ago, and so has Mitt Romney. And we have talked about battery companies in South Korea, LEDs in China, windmills in Denmark.
(END VIDEO CLIP)
COSTELLO: CNN's Dan Lothian is at the White House. He's following all of this. So now it's outsourcing.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. And, you know, it's the Republicans really countering this attack that has been coming from the Obama campaign that Mitt Romney invested in companies that benefited from sending jobs oversees to places like India and China, that Mitt Romney could have stopped outsourcing when he was the governor of Massachusetts but didn't.
And responding to these latest attacks now from the Romney campaign, the Obama campaign, saying, quote, "We understand that the Romney campaign wants us to share in their outsourcing misery, but the record doesn't support their attacks." President Obama out there on the campaign trail has been saying that he is pushing for in-sourcing, as he likes to call it, providing these tax incentives for companies that ship jobs overseas for them to bring those jobs back here to the United States.
That is what they say their message has been, completely pushing back on this notion from Republicans that the president is the outsourcer-in-chief.
COSTELLO: Interesting. Dan Lothian, thanks so much.
New poll out this morning shows the presidential race deadlocked. The ABC News/"Washington Post" survey asked registered voters who they'd choose if the election were held today, 47 percent say they'd vote for Obama, 47 percent chose Romney. Today, Mr. Romney takes his tax argument to the swing state of Colorado. This afternoon, he holds a town hall meeting in Grand Junction.
He is warning that the president's tax policies play on class warfare and will only hurt all of us by weakening the economy.
(BEGIN VIDEO CLIP)
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Small businesses are overwhelmingly being taxed not at a corporate rate but at the individual tax rate so successful small businesses will see their taxes go up dramatically, and that will kill jobs. That will be another kick in the gut to the middle class in America.
(END VIDEO CLIP)
COSTELLO: Another topic drawing a more heated exchanges between the two camps is Romney's tax returns. So far, Mr. Romney has released one year's completed paperwork. The Obama campaign is demanding several years of returns and saying any refusal to do so shows a lack of transparency.
A leading Republican is breaking ranks with his own party over the nation's war on drugs. New Jersey Governor Chris Christie says the war on drugs has been a dismal failure. Listen to his harsh assessment at the Brookings Institution.
(BEGIN VIDEO CLIP)
GOV. CHRIS CHRISTIE (R), NEW JERSEY: The war on drugs, while well intentioned, has been a failure. And that we're warehousing addicted people every day in state prisons in New Jersey, giving them no treatment, sending them back out on the street after their term of incarceration, and wondering why recidivism rates go up, and why don't they get better, why they commit crimes again. Well, they commit crimes to support their addiction.
(END VIDEO CLIP)
COSTELLO: Christie says lawmakers in New Jersey are getting it right. They recently mandated a year of treatment for first-time nonviolent offenders. Christie says the inpatient care costs less than half of imprisonment.
Turning now to the weather. After about a week of scorching heat, a lot of us are finally seeing at least a little bit of relief today. But not the case in the southwest. Excessive heat warnings are in effect for parts of Arizona and California through tomorrow.
Meteorologist Alexandra Steele is here. I guess it's their turn.
ALEXANDRA STEELE, AMS METEOROLOGIST: That's right. But it was all our turns because new climate data just in from NOAA saying this last 12 months has been the hottest in the lower 48 since record keeping began in 1895. Just incredibly steamy, and we felt it, right? But even with that last 12 months does not included what we just had this past July. So the heat has certainly been on and it continues to be. Of course, we've seen it so much in the east. But now Vegas, 113 yesterday. Boise, 108 yesterday. So we're going to see the cool air come down, and as we have, it's brought of course the stationary front. But now with this front it's a lifting mechanism firing off showers and storms in the mid-Atlantic. So once again today Virginia and North Carolina the potential for some flooding. Of course that was the front that cooled things off. But now it's of course bringing some potential flooding.
So here's the temperatures, 84 in Memphis, 92 in Kansas City. Again, the heat now in the southwest. Places like Phoenix and Las Vegas and Palm Springs, temperatures between 110 and 120 degrees. So it is now out west. But all in all, like in summation for the year, off the charts, Carol.
COSTELLO: You're not kidding. Alexandra, thanks so much.
STEELE: Sure.
COSTELLO: The drama surrounding TomKat is over. Hollywood power couple Tom Cruise and Katie Holmes have come to an amicable divorce settlement. The couple released a joint statement that reads, quote, "We are committed to working together as parents to accomplishing what is in our daughter Suri's best interests. We want to keep matters affecting our family private and express our respect for each others' commitment to each of our respective beliefs and support each other's roles as parents."
Team Holmes released a second statement saying, there were numerous inaccurate reports about the confidential terms of the agreement, but of course we want to know more. So let's go to "SHOWBIZ" correspondent Nischelle Turner. She is in Los Angeles.
What do you know?
NISCHELLE TURNER, SHOWBIZ CORRESPONDENT: Well, unfortunately, Carol, I'm going to give you some tidbits. But the fact that they are kind of trying to keep this confidential, I'm not sure how much more we're actually going to learn. But both sides have been telling "SHOWBIZ TONIGHT" that they are actually pleased with the settlement. Although I think that they may just be grateful to wrap this thing up quickly and as quietly as they did.
And I say quietly because for all of the attention that they had with this, they wrapped this up from announcement to settlement in less than two weeks.
You know, officially, Carol, the details are not coming out because both sides have agreed to keep the terms confidential. But according to an "US Weekly" report, Katie did get full physical custody of Suri and will raise her in New York City. They are also saying that while Tom will be -- Tom will be able to spend a lot of time with his daughter. And you know there were a lot of questions surrounding did this have anything to do with scientology. And for the first time the Church of Scientology is responding to questions about the split if only to say that they consider this a private matter.
Now the church also said that they believe some of their former members are exploiting this private matter to further their own agendas. But, Carol, there are two things here that everyone thinks happened here. That Katie executed a brilliant legal strategy to end the divorce. And the other thing here that is starting to grow is that it seems to be this undercurrent starting to grow that maybe Tom Cruise is being painted unfairly here, and that he is getting a bit of a bad rap.
Because at the end of the day, what actually happened is it seems like they both put their daughter's interests first and decided, you know what, for the best interest of Suri, we're going to take care of this. Be responsible adults. And get this done.
(CROSSTALK)
TURNER: So that seems to be --
COSTELLO: That's so un-American.
(LAUGHTER)
TURNER: I know. Who would have thought that there would be two responsible mind-thinking adults and they would do something to put the best interest of the child first. Who would have thought?
COSTELLO: I don't know but I sure hope it's true. Nischelle Turner, thanks so much.
TURNER: Exactly.
COSTELLO: The New York Yankees are not big fans of one of their own. That would be Hall of Famer Reggie Jackson. Why they're asking Reggie to stay away.
(COMMERCIAL BREAK)
COSTELLO: Twelve minutes past the hour. This just in. Kind of disturbing news. Four large Russian ships with Marines onboard, they're now heading to the Syrian -- at the Syrian Port of Tartous. The story is being reported by the Interfax news agency. A Russian military source says the squadron's move has nothing whatsoever to do with the Syrian crisis, but does it?
Let's get more on the story from Mohammed Jamjoom. He's in Abu Dhabi.
What do you make of this, Mohammed?
MOHAMMED JAMJOOM, CNN INTERNATIONAL CORRESPONDENT: Well, Carol. This was a military diplomatic source that told the Russian news agency Interfax about these four ships that have left the North Sea, that they're on the way to Syria right now. Again, he stressed that the squadron's journey is part of the Navy's combat training plans so it has nothing to do with the crisis in Syria. And they are headed to the Port of Tartous which is a long standing -- there's a Russian base there that's been there for years and years in Syria. So on the face of it, there has not yet been any kind of condemnation from any international bodies. It doesn't seem that the U.S. or any other powers have commented yet and objected to this. So on the face of it, it looks like it is just for routine training missions. But there have been so much speculation as to what Russia intends to do when it comes to Syria because Russia is one of the few backers that Syria still has.
This comes on the heels of news yesterday that emerged that Russia is not going to deliver any new weapons to Syria as long as the situation in that country is unstable. There was an official with the body that's in charged of monitoring Russia's arms trade, he told state media on Monday that Russia is concerned about the situation in Syria, that they are not going to arm any new supplies to that country until the situation stabilizes.
But it wasn't clear whether the official was saying that Russia would discontinue the delivery of all arms or whether it was stopping just the supply of new weapons. And that's where the concern is right now. There has been condemnation of Russia's backing of the Syrian regime, of their continued supply of weapons there. The Russians clearly concerned as well about how this all appears. They want to see an end to the crisis.
So what this -- what these ships leaving today for the Port of Tartous means in the bigger picture yet to be determined. But still a lot of questions about it at this hour -- Carol.
COSTELLO: Mohammed Jamjoom, thank you so much.
Fifteen minutes past.
Checking our other top stories now:
House Republicans gearing up to do battle over Obamacare. In the next hour, they'll start holding hearings to repeal it since the Supreme Court upheld the law last month. A vote could come tomorrow. But the effort is not expected to go anywhere in the Democratic- controlled Senate.
Now to some pictures that are getting a lot of attention. Watch closely. You'll see a teenager jumping 35 feet from this sky ride and landing on a beach. Our affiliate reports that the teenager says she freaked out when her chair lift stopped as a violent storm approached.
The girl was celebrating her 17th birthday. She says she was more concerned about getting struck by lightning out there in the air. She jumped onto that beach and she was not seriously hurt.
In money news, the launch of Windows 8 is just a few months away. Microsoft says its new operating system will hit store shelves in late October. It will be the software giant's biggest update to windows in nearly two decades. The company is releasing surface, its first tablet, around the same time.
Yankees legend Reggie Jackson is being told to stay away from the team. In a "Sports Illustrated" article last week, Jackson questioned Alex Rodriguez's home run numbers after Rodriguez admitted to doping. Jackson told "USA Today," quote, "The Yankees think that the timing is not right for me to be around the team. When the Yankees feel the timing is proper, I will return," end quote.
In weather news, check out these lightning flare-ups in Atlanta. This was the view from the CNN Center roof cam last night. It was a spectacular show, wasn't it?
In North Carolina, flash flooding dumped up to five inches of rain on downtown Greensboro. The heavy downpour left between 20 and 30 cars stranded on a nearby interstate.
Every day, of course, we ask you to talk back on one of the big stories of the day. Is it class warfare or paying your fair share? We want you to weigh in on whether President Obama's proposed tax cuts are enough to get your vote.
(COMMERCIAL BREAK)
COSTELLO: Now is your chance to talk back on one of the big stories of the day. The question for you this morning, Mr. Obama's proposed tax cuts. Will they make you fall in love again? Here we go again.
If you're a Republican, it's class warfare. If you're a Democrat, it's paying your fair share. Whatever you believe, the president is going there again. He wants to extend the Bush tax cuts but only for those making less than $250,000 a year. And if Congress votes to extend the Bush tax cuts to all Americans, regardless of income, Mr. Obama will whip out the presidential pen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I would veto it, and here's why: what I'm proposing is that we give a tax break -- that we make sure the taxes don't go up -- on 98 percent of Americans, 98 percent. But to extend tax breaks for that top 2 percent of wealthiest Americans would cost us $1 trillion over the next decade.
(END VIDEO CLIP)
COSTELLO: Mitt Romney, who signed Grover Norquist's no tax pledge, insisted that Mr. Obama's tax plan would crush small business people.
(BEGIN AUDIO CLIP)
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Small businesses are overwhelmingly being taxed not at a corporate rate but at the individual tax rate so successful small businesses will see their taxes go up dramatically, and that will kill jobs. That will be another kick in the gut to the middle class in America.
(END VIDEO CLIP)
COSTELLO: Except only 3 percent of small businesses actually make above $250,000 a year. And even if Mr. Obama's tax plan flies through Congress, it would only raise $968 billion over 10 years.
So the talk back question for you today, Obama's proposed tax cuts: will they make you fall in love again?
Facebook.com/CarolCNN, Facebook.com/CarolCNN. Your responses later on in this hour.
Some new rules could soon be put into place to protect homeowners from risky mortgages. We'll fill you in.
(COMMERCIAL BREAK)
COSTELLO: Aside from the convenience, one of the best things about online shopping is you almost always pay less. That's because most states don't charge their usual sales tax on Internet purchases.
But as Lisa Sylvester reports, that's changing. And now depending on where you live, it will cost you.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT: How about an organic green iced tea?
UNIDENTIFIED FEMALE: All right.
SYLVESTER (voice-over): If you buy anything from a restaurant in Washington, D.C., the sales tax is 10 percent.
UNIDENTIFIED MALE: You can see that sales tax, 41 cents.
SYLVESTER: Buy clothing, books or other goods in the district, the sales tax is 6 percent. But if you bought something online from a business that doesn't have a physical presence in D.C., the retailer wouldn't ask you to pay a sales tax at all.
Neal Osten is with the National Conference of State Legislatures. He says that's costing states $23 billion this year.
NEAL OSTEN, NAT'L CONFERENCE OF STATE LEGISLATURES: Look at California. California has a great deal of problems. This would mean $4.1 billion in revenue for California that they don't have right now. That can mean more teachers. It could mean more police, more firemen.
SYLVESTER: Osten says more and more states are passing laws that would require consumers to pay sales tax on all Internet purchases. But so far online sales companies have been able to get around that because of a 1992 Supreme Court ruling on mail order purchases. That decision said if a retailer doesn't have an actual physical location in the state, the retailer doesn't have to collect sales tax.
Legislation in Congress would change that. So say you are in Washington, D.C. and you buy a $20 shirt online from an out of state company who happens to be in California. Well, as of now, you pay zero dollars in taxes. But if this federal bill became law, you would have to pay D.C. 6 percent sales tax and that shirt would cost you $21.20.
By the way, taxes go to the state the item is being delivered, not where it's sold. Bricks and mortar retailers say the new federal proposal is only fair.
JASON BREWER, RETAIL INDUSTRY LEADERS ASSOCIATION: All we're asking for is for the government to close this loophole, level the playing field and let everybody compete on price in a free market.
SYLVESTER: But a coalition of Internet companies including eBay and Overstock are lobbying against the federal legislation, saying this is going to hit mom and pop operations.
STEVE DELBIANCO: Nothing could be less fair to America's small businesses than forcing them to collect and remit and file sales taxes for nearly 10,000 different jurisdictions across the country.
SYLVESTER: A clause in the Senate bill exempts relatively small retailers with less than $500,000 in annual sales. And what do consumers think? Ian Keran (ph) says he buys everything from clothing to dish soap online.
UNIDENTIFIED MALE: As a consumer I wouldn't be super excited but I also wouldn't be shocked if that happens
SYLVESTER: Lisa Sylvester, CNN, Washington.
(END VIDEOTAPE)
COSTELLO: The Consumer Financial Protection Bureau wants to put new rules into place to keep you from getting stuck in a mortgage you cannot afford. Wouldn't that be nice?
Alison Kosik is at the New York stock exchange. Seriously?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Seriously. You know, part of the reason, Carol, that the CFPB was set up in the first place is to try to help Americans, keep them from getting into the big mortgage mess that got us into the recession in the first place.
So, what the watch dog group is now trying to do is expand its definition of what qualifies as a high cost mortgage. Now, the group is trying to bring more home buyers under its protection. So it got some new proposals that look to prohibit certain features of risky loans. For one, it bans these balloon payments, and that's where you pay the principal in a big lump sum at the end of the loan. It also gets rid of a lot of fees, like these prepayment fees, the modification fees, and it even caps late fees.
Now, borrowers also have to get homeownership counseling before taking out risky loans.
Now, these high cost loans, Carol, they make up just a fraction, a little bit of all these mortgages. But you know what? These people still have the right to be protected and informed. These rules are set to be finalized in about six months -- Carol.
COSTELLO: But what's really confusing to people is all the paperwork that you have to read through to buy a house. And a lot of people don't understand the language.
KOSIK: You said it. Anyone who's ever bought a home knows the paperwork is extremely overwhelming, to say the least. So the CFPB is hoping to whittle the mortgage documents down to just a few pages.
It's, in fact, on a mission to do this. It named the program that it's doing the Know Before You Owe project.
So it's cutting the loan estimate form from seven pages down to three. This is a form that lays out the cost and the risks of your mortgage. It's also cutting the closing disclosure form from nine pages to five. And this form contains all of your closing costs. Of course the goal in all of this is to make sure that borrowers know exactly what they are getting into.
So that should hopefully help out a little bit -- Carol.
COSTELLO: I hope so. Alison Kosik, live from the New York Stock Exchange this morning.
Thirty minutes past the hour. Good morning to you. I'm Carol Costello.
Other stories we're watching right now in THE NEWSROOM:
President Obama hitting the road to push his plan to keep only middle class tax cuts for those who make up to $250,000 a year. The president will be in Iowa today visiting a Cedar Rapids family who he says will benefit if the plan gets the green light. Republicans say the rich should be included, too.
Despite the Jerry Sandusky child sexual abuse scandal, Penn State did not lose the support of its alumni. The university reports the school received close to $209 million in donations in the last fiscal year. It is the second highest annual amount in Penn State's history.
More new evidence will soon be released in the Trayvon Martin shooting investigation. We're learning that this will happen on Thursday. "The Orlando Sentinel" is reporting it will include shooter George Zimmerman's prior calls to police and his application for a concealed weapon permit. Zimmerman is charged with second degree murder in the case.
A governor's weekly radio address has sent shock waves far beyond the state's border. Republican Paul LePage of Maine had this to say about the U.S. Supreme Court upholding the president's health law. Quote, "You must buy health insurance or pay the new Gestapo, the IRS," end quote.
LePage has apologized for the Gestapo reference, but the buzz persist persists.
Here's Paul Merrill from our affiliate WMTW.
(BEGIN VIDEOTAPE)
PAUL MERRILL, WMTW: Can we ask about your comments from Saturday?
GOV. PAUL LEPAGE (R), MAINE: No, you can't.
MERRILL (voice-over): Governor LePage didn't want to talk about the outrage he sparked when he compared the IRS to the Gestapo, the Nazi secret police. But when pushed for comment, here's what he said.
LEPAGE: It was never intended to offend anyone. And if someone is offended, then they ought to be God (EXPLETIVE DELETED) mad at the federal government.
MERRILL: The governor made the Gestapo remark during his weekly radio address this past Saturday. It was part of remarks slamming President Obama's health care reforms.
(BEGIN AUDIO CLIP)
LEPAGE: We the people have been told there is no choice. You must buy health insurance or pay the new Gestapo -- the IRS.
(END AUDIO CLIP)
EMILY CHALEFF, JEWISH COMMUITY ALLIANCE OF SOUTHERN MAINE: And making sure that the language you use --
MERRILL: Emily Chaleff is the executive director of Portland's Jewish Community Alliance, just one of the groups that called for the governor to apologize.
CHALEFF: To compare a modern day United States government to a genocidal regime is just -- just crosses all boundaries.
MERRILL (on camera): The governor's communications director says she's the one who wrote the majority of Saturday's statement, but she says Governor LePage added the word "Gestapo."
ADRIENNE BENNETT, GOVERNOR'S COMMUNICATIONS DIRECTOR: He was going for the effect. He did say the new Gestapo. He was not referring to the old Gestapo. I think that's important to note.
MERRILL (voice-over): Chaleff says the governor has called her to say he's sorry.
CHALEFF: We think it's important that especially in an election year, that we all embrace the level of civil discourse and civil discourse and use information to educate rather than to be inflammatory or to polarize.
(END VIDEOTAPE)
COSTELLO: It's the new Gestapo, not the old Gestapo.
The governor may be sorry about the Gestapo comment, but he is still mad at the president. In his apology, he said, quote, "With every step that Obama care moves forward our individual freedoms are being stripped away by the federal government," end quote.
Now for a quick reality check: middle class workers will be paying more next year regardless of what happens to the Bush era tax cuts. The president of Optimum Capital Management Ryan Mack joins us from our New York bureau to explain why.
Good morning.
RYAN MACK, OPTIMUM CAPITAL MANAGEMENT: How are you doing?
COSTELLO: I'm good.
MACK: Thank you for having me.
COSTELLO: Thank you for being here.
So, let's start with the Bush era tax cuts. President Obama wants to eliminate them or extend them for people making $250,000 or less. Will that really do much to reduce our deficit?
MACK: Well, essentially, it might do a whole lot more, but for confidence as well. The middle class really needs certainty right now in terms of making sure that they know exactly for the next year or hopefully even longer than that, they know their taxes are going to be right where they are.
And this is -- I mean, we have to celebrate this because we actually have 98 percent agreement in the Congress right now. The right side agrees that middle class needs to keep their tax cuts the same. And the left side agrees that the middle class needs to keep their tax cuts the same.
But it's the top 2 percent where there's a discrepancy. So, I'm --
COSTELLO: Oh, yes, let's talk about that discrepancy because what you said, shouldn't that apply to wealthier Americans too? Shouldn't they feel comfortable about the tax rates saying the same in the midst of this economic downturn?
MACK: You know what? From my perspective, a lot of individuals can afford to pay a whole lot more.
We do a lot of traveling across the country, a lot of talking to middle class individuals who are working poor and even impoverished communities. If some have to pay -- if you ask them to pay another $50 or $100 per month, that's actually going to impact their lives a whole lot more than someone making over $1 million a year, in terms of making sure they have to get their taxes risen to the point where during the Clinton years we did pretty well.
So, we have to look in terms of proportionally what level of impact it's going to cause in that individual's household, and can they afford it or not. You know, from a business owner myself --
COSTELLO: Let me just stop you for a moment. Whether you have lots of money or not, you're still loathe to spend it because of the way our economy is right now.
MACK: Well, you know what? No one likes to pay taxes. At the end of the day, you have to pay taxes. And from a business owner myself, I'm not going to stop working hard because my taxes are increased. I'm not going to stop going and putting additional effort in and keeping my employees on the payroll.
COSTELLO: Yes. Are you going to hit Bloomingdale's and buy a bunch of stuff there?
MACK: Well, you might not do as much in terms of spending. But at the end of the day, we're not spending now. The consumer spending is not as high as it was, and a lot of businesses are keeping their money -- we have over $2 trillion of surplus on the sidelines as we speak.
So, individuals are not -- with the tax cuts lower we are not doing any spending. So we are missing out on revenue that can go into stimulating the economy and putting money back, because right now the biggest spender in this economy right now is the government that's actually keeping this economy afloat.
COSTELLO: Let's switch gears and talk about the payroll tax deduction, because like it or not, everybody's taxes, middle class taxes, are going to go up regardless of what happens with the Bush tax cuts.
MACK: Yes. Well, the payroll tax cut is the underlying that no one is talking about. It's about 2 percent of the first $110,000 of income. So that is essentially used to fund Social Security. So we have had a 2 percent cut where that costs about $120 million that the government right now as opposed to taking it out of Social Security, it's taking it out of the national debt.
So we can't keep -- we can't afford really to continue to have the payroll tax cut unless we tried to find revenue from other places to continue to fund it. That's actually mean for someone who's earning about $50,000 a year, this payroll tax cut of 2 percent means about $83 a month. as opposed to someone earning $100,000 a year, this payroll tax cut means about $183 a months.
So, that's actually some hefty dollars for individuals to come out their pockets if this payroll is increased after December 31st. No one is really talking about it right now, but it should be a huge issue especially middle class and working class families that might have to come out I mean, at that's the shopping bill. That's a grocery bill.
COSTELLO: Oh, yes.
MACK: That's food for your children. That's going back -- you can do school shopping for about a quarter of that price for someone earning $50,000 a year.
So, it's really going to be heavily impacted for those in the middle class families.
COSTELLO: Yes. I suspect not many politicians will be trumpeting that.
MACK: Right.
COSTELLO: Yes. Ryan Mack, thank you so much for joining us this morning.
MACK: Thank you for having me.
COSTELLO: One of the nation's most visited landmarks still closed to the public, the Washington monument. We will tell you how long it will be until you can go to the top and look at the beautiful view of Washington, D.C.
We'll be right back.
(COMMERCIAL BREAK)
COSTELLO: This morning in Egypt, a reminder of just how divided that region remains after the Arab uprising. This morning, protesters gathered in Cairo to support the new president and his active defiance.
The president had called parliament back into session, a direct rebuff of military leaders and the country's highest court. They had dissolved the legislature and are refusing to budge in from that decision today.
CNN's Ivan Watson is in Cairo.
Fill us in.
IVAN WATSON, CNN CORRESPONDENT: Carol, nobody really knew what was going to happen today. The president said parliament should meet. The highest court and the ruling military generals said the parliament shouldn't meet, that it was illegal.
In the end, lawmakers gathered in the parliament chambers for the first time in nearly a month. And some of them had mixed feelings about getting their old jobs back. Take a listen to what one lawmaker said to us.
(BEGIN VIDEO CLIP)
WATSON: Was this a good day today, that parliament met again?
MOHAMED ANWAR EL SADAT, MEMBER OF THE PARLIAMENT: Well, it's -- yes and no, because there is such a big confusion within the Egyptians, because of al those who are always with or against this decree. Some of them they say that it's not legitimate. Some of them say, no, we have the full right.
(END VIDEO CLIP)
WATSON: Important thing is they were able to gather peacefully. There were no clashes, no protests at the parliament.
It was a very different scene at one of the main courthouses in Cairo. There, there were angry demonstrators supporting the Muslim Brotherhood President Mohamed Morsi, who was facing no less than 27 court cases against him because he chose to convene parliament again.
The crowd was getting angry. We saw them throwing bottles and insulting one man who left the courthouse. And then suddenly the judges decided to postpone the verdict a week. And everybody dissolved peacefully. The mob separated.
And that just shows you how fluid the politics are right now. And how much competing political groups are using brinksmanship right now in their power struggle over who's going to really run this country next -- Carol.
COSTELLO: Ivan Watson live in Cairo for us.
We're back in a minute.
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COSTELLO: It's 45 minutes past the hour. Checking our "Top Stories" now.
Lawmakers in Washington are getting another chance to repeal Obamacare. In just a few minutes, the U.S. House will start hearings for the first time since the U.S. Supreme Court upheld the Affordable Care Act. A vote could come tomorrow.
Excuse me.
In money news, Starbucks is jumping on the energy drink train. Starting today, the coffee giant will offer several versions of its refreshers energy drinks in its stores. And on Friday afternoon, Starbucks stores will give customers a free drink -- yes just so you can try it out.
In weather news, Hurricane Emilia is gaining strength in the Pacific. The Category 4 storm is about 700 miles off the coast of Baja, California. But it is not expected to make landfall. It could start weakening later today.
Lawyers for seven-time Tour De France winner Lance Armstrong have less than three weeks to re-file their lawsuit against the U.S. Anti- Doping Agency. Federal judge threw out Armstrong's initial lawsuit saying it was a public relations move and not a challenge to the agency. Armstrong is accused of doping despite never failing more than 500 drug tests during his career.
You're going to have to wait a while to get that majestic view from the top of the nation's capital. The Washington Monument will remain closed to visitors for another year, and maybe until 2014. It has been shut down since an earthquake hit D.C. last August.
Our Sandra Endo is following the story. Oh that's a bummer.
SANDRA ENDO, CNN CORRESPONDENT: Yes, Carol, it is a big bummer. We actually spoke to some tourists who are out here on the National Mall today. And they say they are disappointed that the Washington Monument is closed. As you mentioned, it has been shut down since last August's 5.8 earthquake that struck this area.
And clearly they have a lot of work to do, because after a very lengthy assessment, engineers say that the Washington Monument has to endure extensive internal and external repairs. We're talking about sealing cracks and removing loose stones, replacing them, reinforcing internal beams. And that will take a lot of time. Because the National Parks Service says the real challenge is that they have to build a lot of scaffolding. Keep in mind the Washington Monument stands 555 feet tall, and a lot of the damage was endured at the top of the monument. So they have to do a lot of work to get up there -- Carol.
COSTELLO: Ok. So how much is this all going to cost? And will taxpayers foot part of the bill?
ENDO: Yes, partially. But the Washington Monument has a big fan out there. And his name is the co-founder actually of the Carlyle Group, who forked over $7.5 million for these renovations. And the total cost is an estimated $15 million.
So some taxpayer money in there, but of course some donations as well.
COSTELLO: Oh we're just looking at these pictures of the earthquake as it happened, Sandra. That's just incredible. So you can see how it would cause that much damage. I mean it actually sunk a little bit too, didn't it?
ENDO: Yes. They want to be real careful in the terminology of "sinking". It has sunk two millimeters. So when it's engineers saying that, that's a lot. But they all say that it's structurally sound, and the repairs will start in the fall. And of course tourists want to get in there as soon as possible.
The National Parks Service says 700,000 tourists go up there every year. So clearly that's a lot of people that won't be able to go until the latest 2014. That's when they expect this monument to reopen -- Carol.
COSTELLO: Well, it's still beautiful to look at from the outside too. Sandra Endo, thank you so much. We asked you to "Talk Back" on one of the stories of the day. The question for you this morning, "Obama's proposed tax cuts. Will they make you fall in love?" Your responses, next.
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COSTELLO: We asked you to "Talk Back" on one of the stories of the day. The question for you this morning. "Obama's proposed tax cuts. Will they make you fall in love?"
Steve says, "Ask the millions out of work if they would rather have a tax cut or a job. A tax cut won't help you if you have no income, now, will it?"
This from Brian. "When the rich do it, it's called business. When the people do it, it's called class warfare."
This from Nemesis. "Regardless of what the President does it won't please everyone. There is no middle ground."
Bill says, "I have no affiliation with any party, but it's time for the wealthy to pay their fair share."
Keep the conversation flowing. Facebook.com/CarolCNN. I'll have more of your responses in the next hour of NEWSROOM.
Did you watch the Homerun Derby last night? Boos rained down on Robinson Cano at the all-star game Homerun Derby. The boos got into his head. He did not get a single home run. We'll discuss.
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COSTELLO: Last night's homerun derby had something shocking for baseball's all-star game event, booing. The hometown fans at Kansas City's Kauffman Stadium jeered ALs derby captain Robinson Cano. First with boos when he was announced, after all he's a New York Yankee. And then cheers when he failed to hit a home run.
Fans were upset the Yankee second baseman did not pick the Royals only all-star selection, designated hitter Billy Butler, for his derby team. This is the first time the defending derby champ has failed to hit one out; those boos got into his head.
Lots of cheering for this man (inaudible) by Angels outfielder Mark Trumbo. The ball hits the roof of the Royals Hall of Fame (inaudible) and projected to land on the ground 475 feet from the home run plate.
But the 2012 home run derby winner is Tigers first baseman Prince Fielder -- he was amazing. He launched 28 shots out of the park, including a pair measuring 476 feet. Ah, there he is with the trophy. It is the second time that Fielder has won the contest. Go, Tigers.
Let's talk about pitchers for tonight's all-star game. Fielder's Tiger teammate Justin Verlander will start for the AL team. Verlander is a 9-5 with 2.58 ERA at the break. Starting for the National League, Giants right hander Matt Cain. Cain pitched a perfect game last month and also had a one-hitter in April.
To tennis, Roger Federer's 7th Wimbledon win has paid off a dead man's bet. Back in 2003, after Federer won his first Wimbledon a British tennis fan, Nick Newlife (ph) placed a new bet. He wagered almost $1,000 that Federer would win seven Wimbledon crowns by the year 2019. Newlife died three years ago but left the betting slip to Oxfam. The relief agency will collect more than $157,000 on his winning bet. Wow.
And that's a look at sports.
No doubt you've heard of "Fifty Shades of Grey", you know that erotic book. Now there's "Fifty Shades of Grey", the YouTube musical.
As CNN's Jeanne Moos reports it will leave you tapping your toes.
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JEANNE MOOS, CNN CORRESPONDENT: "Fifty Shades of Grey" has gone from mommy porn to musical. But at least the musical won't make you blush 50 shades. It's relatively clean.
(MUSIC)
MOOS: The musical pits a reader who loves the book against a reader who hates it.
(MUSIC)
MOOS: The makers of this two and a half minute musical are brothers.
VIJAY NAZARETH, CO-CREATOR, AVBYTE: The idea came up when I saw -- I was in the subway and I saw all women reading it from like small girls -- literally teenage girls to grandmothers.
(MUSIC)
MOOS: Eventually a gay character makes his entry.
(MUSIC)
MOOS: There have been other musical tributes to this lady porn phenomenon, turning the verbatim words of the book into lyrics.
(MUSIC)
MOOS: Jimmy Fallon featured "Fifty Shades of Grey" karaoke.
Seriously, that's from page 277. Honest, comedians mockingly vie to record the audio book version, from Gilbert Gottfried.
GILBERT GOTTFRIED, COMEDIAN: He scrunches my panties. MOOS: To Ellen DeGeneres, though Ellen chose to paraphrase the overheated prose.
ELLEN DEGENERES, TALK SHOW HOST: He guides his hand across my secret garden (EXPLETIVE DELETED). I'm going to add some sound effects if that's ok because I think -- apologize.
MOOS: What's been whipped up are sales. The "Wall Street Journal" reports the "Fifty Shades" trilogy has sold almost 20 million copies in the U.S. in five months. It took the "Dragon Tattoo" books three years to accomplish that, and while some couples say the book has done wonders for their love life.
UNIDENTIFIED FEMALE: We don't have a big bed, but we sure get around it.
MOOS: The musical has it both ways.
(MUSIC)
MOOS: So they have written their mini-musical but have they read the book?
ANTONIUS NAZARETH, CO-CREATOR, AVBYTE: I did not read the whole book.
MOOS: And you read just a little bit?
V. NAZARETH: Passages here and there, yes.
A. NAZARETH: It's really -- some of it is awful.
MOOS: No shades of gray in that book review.
(MUSIC)
MOOS: Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
