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Voters' Minds Made Up?; New York Fed Under Fire; An Infantry Officers Training Course Now Open to Women; British And American Banks Accused Of Manipulating Interest Rates; Pop-Up Ads for Smart Phones Could Be Troublesome; NASA Releases Panoramic Image of Mars; Afghani Hospital Catches Attention of Pentagon; Mothers Against Drunk Driving Protesting New Product; NYC Apartments Could Get Smaller

Aired July 10, 2012 - 15:00   ET

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

BROOKE BALDWIN, CNN ANCHOR: All right, let's roll on. Top of the hour, welcome back. I'm Brooke Baldwin.

Fighting over your paycheck, you will pay more in 2013 unless the Bush-era tax cuts are extended by the end of this year. President Barack Obama has pushed his plan to address that precise issue here during this event in Cedar Rapids, Iowa, this past hour.

He wants to extend those Bush tax cuts, but only for households earning less than $250,000. Mitt Romney, on the other hand, slamming that idea during a town hall appearance today in Grand Junction, Colorado.

The president wrapped up just minutes ago. As these two really are duking it out, we do have a new idea exactly how tight this race is for the White House. Have you seen this poll?

Look at these numbers. A new ABC/"Washington Post" poll shows President Obama and Mitt Romney all tied up, folks, dead heat, 47 percent to 47 percent, very, very tight.

And it could, I stress could, stay that way until elections come November. Let me bring in our chief political analyst Gloria Borger.

Gloria, I just want to mention one more poll from that ABC/"Washington Post" poll. The poll actually asked registered voters whether they decided who to vote for and whether they might change their minds.

Here you go, look at that number, 79 percent for definitely decided. On top of that another 13 percent say there is no way they would change their minds. So, when you look at those numbers, Gloria, who's left? And let me add to that, are these candidates spending millions to reach these voters who apparently aren't listening or have already decided?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: They are.

It's sort of astonishing, when you look at these numbers and you say, oh, my God, 92 percent of the voters are telling pollsters, you know what, we kind of know where we are. This is a race that is being played for those independent voters.

And when you look at those independent voters, Brooke, some of them lean Democratic, some of them lean Republican. And some of them are in the middle.

(CROSSTALK)

BORGER: What I like to say is that this is an election about getting out your base, about mobilizing the people you know will support you. It may, in fact, despite all the billions of dollars that will be spent, be more about mobilization than it will be about persuasion.

But you would never know that from looking at all the negative advertising we're seeing that's already playing itself out and will continue for the next four months.

BALDWIN: OK. So, as we talk persuasion, let's talk strategy.

What is the president's strategy to then reach these voters and does his plan to partially extend the Bush tax cuts, does that play into that, even though we know House Republicans, they're never going to pass it.

BORGER: It's all about mobilizing his base.

And I think what the Obama campaign has figured out, as they did in the last election, but this is an election about getting out your voters. You look at what the president has done. He's picked up parts of his base one by one, Hispanic voters, gay voters, women, students on all sorts of issues, whether it's immigration policy, or student loans.

This is a White House that has kind of figured out we have to get out our base out, we have got to mobilize them. The Romney campaign on the other hand I think believes that anger against President Obama will really be the motivating factor to bring out their base, but they still have to go for those folks in the middle if they're going to win because this is obviously going to be such a tight election.

BALDWIN: Let me just play a little bit of sound. As we mentioned, Mitt Romney was in Colorado today, the president in Iowa. Take a listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I believe that we should make sure that taxes on the 98 percent of Americans don't go up, and then we should let the tax cuts expire for folks like me, for the top 2 percent of Americans.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: For job creators and small businesses, he announced a massive tax increase.

(BOOING) ROMNEY: So at the very time the American people are seeing fewer jobs created than we need, the president announces he's going to make it harder for jobs to be created.

OBAMA: We disagree on the other 2 percent. What do you usually do if you agree on 98 percent and you disagree on 2 percent? Why don't you compromise to help the middle class? Go ahead and do the 98 percent and we can keep arguing about the 2 percent. Let's agree when we can agree.

ROMNEY: The very idea of raising taxes on small business and job creators at the very time we need more jobs is the sort of thing only an extreme liberal could come up with.

(END VIDEO CLIP)

BALDWIN: That was just a little bit, a little bit of what both gentlemen said today. How did they do, Gloria?

BORGER: Well, I think you're seeing each candidate try and caricature the other person, and the caricatures are forming.

And this is a time in the summer when voters start paying attention and thoughts start crystallizing in their mind. That's why you saw President Obama come out with keeping the tax cuts for those earning under $250,000 a year, because he wants to be on the side of the middle class and portray Romney as somebody who cares about the wealthy.

And what Mitt Romney is saying is, look, the people you're talking about raising taxes on are the small business job creators and that won't work either. So, you're going to continue to hear these arguments, but in a way, Brooke, I sometimes wonder whether they're actually preaching to the choir on these issues, because, as we saw in that earlier poll, nine out of 10 people say, OK, I have already decided.

What it's going to come down to is a threshold question of, do you want to rehire President Obama for four more years to manage your economy? And what I don't think we're hearing enough of from the candidates, quite frankly, is what they would do for the next four years if elected. And I think that will come sort of starting in the fall campaign, maybe even in the debates.

BALDWIN: Right. So before we hear maybe a little more of that, to your point about building these caricatures, and you can hear this whole theme of jobs is pervasive when you hear both of these men speak, but another issue being this whole outsourcing line, right?

The Obama camp, they have been hammering Romney on outsourcing. Some say Romney had been too quiet about that. That changed today. Here's this.

(BEGIN VIDEO CLIP)

ROMNEY: But it is interesting that when it comes to outsourcing, that this president has been outsourcing a good deal of American jobs himself, by putting money into energy companies, solar and wind energy companies, that end up making their products outside the United States.

If there's an outsourcer in chief, it's the president of the United States, not the guy who's running to replace him.

(END VIDEO CLIP)

BALDWIN: The RNC, Gloria, you know this, they set up a whole Web site attacking Obama on outsourcing specifically, but this whole back and forth, back and forth, at what point -- really are we going to see this all the way through to November or are we going to see here's what I'm doing the next four years?

BORGER: We are. I was talking to a source close to the Romney campaign today who said there's going to be a significant effort to continue to punch back against President Obama on this outsourcing theme because they believe that President Obama's unrestrained trade policies, as they call it, lose jobs in America.

So, they have been criticized by some Republicans for not pushing back enough. And so I think now, and you saw Reince Priebus do it today, the chairman of the RNC -- you will continue to see more of that and from Mitt Romney himself.

But again, these kind of to-ing and fro-ing, I think at a certain point it gets lost in the din of all of this. In the end, it will be the way people feel about their own economic situations and whether they're angry about it or whether they will figure they want to give President Obama a chance to see what he could do for the next four years.

This story has to play itself out a little bit as we head into the fall.

BALDWIN: I just couldn't believe when I saw those polls this morning, especially that a huge number of people who said they have already decided.

BORGER: Brooke, that happened -- it was interesting. That also happened in 2004 with George W. Bush. But the difference between Bush and Obama is that Bush was at 50 percent or a little above in the polls and President Obama is at 47 percent in the polls.

You see those numbers again; 92 percent say, I'm not going to change my mind.

BALDWIN: Well, 79 percent definitely decided.

Gloria Borger, thank you.

BORGER: Sure.

BALDWIN: A lot more news developing this hour. Roll it.

(BEGIN VIDEOTAPE)

BALDWIN: It's known as the most grueling training program for Marines, 86 days, no mercy and the school just opened its doors to women. I'm Brooke Baldwin. The news is now.

(voice-over): The U.S. spent millions in a hospital in Afghanistan. But as I speak, Congress is demanding answers about the horrible conditions there.

One of the world's biggest banks under fire for bad behavior. But new questions surfaced about what the New York Fed knew and when.

And look at this. Could you live in 300 square feet? Welcome to Gotham.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BALDWIN: Well, 86 days of hell, that's perhaps the best description of the infantry officers training course held four times a year at the U.S. Marine base at Quantico, Virginia.

Marines they are pretty mum on the details of the course, but it's believed to test the boundaries of mental and physical fitness. Those who survive, they're essentially the elite of the elite.

And starting in September for the very first time ever, this infantry officers training course will be open to women.

Greg Jacob is a former U.S. Marine, he's policy director of the Service Women's Action Network, and he's been through this IOC, this course.

And, Greg, just first talk to me about some of the details. Reading about it, it sounds like hell.

GREG JACOB, SERVICE WOMEN'S ACTION NETWORK: It's pretty grueling. It's the most physically grueling and mentally arduous course that I have ever been through.

Essentially, they deprive you of almost everything. They strip you down to the minimal amount of chow, the minimal amount of water, the minimal amount of sleep, the minimal amount of supervision, and, more importantly, the minimal amount of information, because that lack of information is what creates uncertainty.

You find that the biggest challenge of the course is coping with the uncertainty and being able to make decisions in an operational environment -- or simulated operational environment with very little information to go on.

BALDWIN: I was reading this article about this course in "The New York Times" just yesterday and they were quoting someone as saying, basically, unless you have a bone protruding out of your leg in terms of an injury, you keep going. Is that fair? JACOB: That's fair to say.

I mean, it's a school environment, so there are safety precautions and safety standards. And the instructors are all trained and there's medical personnel that are there, but the scope of the medical care is the same as it is in combat. It's designed to get you back into the fight.

So, if you're experiencing some sort of physical issue and you go see a medic or you go see a corpsman, their mission is to put you back in this class and get you back into the rotation.

BALDWIN: Wow. OK. As far as the news it's going coed here, as policy director for the Service Women's Action Network, do you think women can hack this 86-day course?

JACOB: Yes, yes, I think they can.

You know, I trained alongside women. I commanded women in an integrated training environment that taught basic infantry skills. And women will rise to the occasion and they will train to the same standard that men will. It's critical, because the Marines represent the pointy tip of the sphere, and they deploy more and they're engaged more and they're in harm's way more than any other force and they deserve the absolute best leaders this country can provide. Some of those leaders happen to be women.

BALDWIN: I'm sure a lot of women appreciate you saying, yes, that they can handle it. But, Greg, we actually had a Marine on CNN today and she said, you know what, I tested out well. Did great in training. And then they threw me into combat and it didn't go so well. Here she was.

(BEGIN VIDEO CLIP)

CAPT. KATIE PETRONIO, COMBAT VETERAN: I went from breaking school records to being broken in a matter of a short amount of time. I left a seven-month deployment 17 pounds lighter. I had muscle atrophy. I stopped producing estrogen, which for me caused me to have infertility. And I was only doing a portion of what my infantry brethren were doing.

(END VIDEO CLIP)

BALDWIN: Stopped producing estrogen. Is this something that we need to consider as women take on broader roles within the ranks of the military?

JACOB: Well, I think the issue here is that qualified women that go through this course and that pass this course should be offered the opportunity to command infantry troops.

Anything less than that is discrimination. Anything less than that is not what the Constitution is about that every Marine takes an oath to support and defend.

BALDWIN: I hear your emphasis on the word qualified. How do you know if you're qualified before you start?

JACOB: You go through the course and you pass the course.

BALDWIN: Gary Jacob. Gary, thank you.

JACOB: Thank you.

BALDWIN: Home mortgage rates are at an all-time low. Many of you might consider buying a home, refinancing your home.

(FINANCIAL UPDATE)

BALDWIN: British and American banks accused of manipulating interest rates. The plot now thickens. What did the regulators know and when?

(COMMERCIAL BREAK)

BALDWIN: As you have heard by now, the British bank Barclays has agreed to pay some $450 million in fines for its admitted role in manipulating interest rates in the run-up to the 2008 financial meltdown. The bank's chief executive is one of these three top officials forced to resign.

And last week, he was grilled at an open investigation in London. Well, now the plot thickens because yesterday a top House Republican wrote the Federal Reserve, demanding transcripts of phone calls between Barclays officials and regulators right here in the U.S.

I just want to quote here from his letter -- quote -- "Although Barclays raised concerns multiple times with American and British authorities about discrepancies over how the rate was set, the bank was not told to stop the practice."

Here we are and now we're talking about banks' manipulating interest rates governing literally trillions of dollars worth of transactions and regulators potentially turning a blind eye.

Alison Kosik is with me now from New York. And, Alison, what is the Fed saying about this today?

ALISON KOSIK, CNN CORRESPONDENT: We're learning this was four years ago when the New York Federal Reserve began asking Barclays about how it submitted its suggested LIBOR rates.

Remember, this was four years ago when it began asking its questions. And we're just learning about this now. Congress thinks this regional branch of the Fed may have known something was fishy, but didn't take any action at the time. It may have just been too distracted with dealing with the financial, trying to keep it afloat during the financial crisis.

The New York Fed did come out with a statement saying it had received occasional anecdotal reports from Barclays of problems with LIBOR. It goes on to say that it shared analysis and suggestions on how to reform LIBOR with the relevant authorities in the U.K. It set -- a hearing could be happening later this month on Capitol Hill though lawmakers will be asking a lot of questions and demanding answers.

BALDWIN: And I'm sure we will be watching for those questions and answers.

In the meantime, this whole idea of banks manipulating interest rates is clearly a worrisome, a very worrisome prospect. But it sounds as though they were manipulating the rates downward. So...

KOSIK: Yes, exactly.

BALDWIN: Why? What's the impact on consumers by doing that?

KOSIK: That was a big part of it. Let's back up a bit and let's explain what the LIBOR rate is.

It's the benchmark rate where banks actually determine that rate that ends up influencing all those interest rates on our credit cards, our car and student loans and our adjustable rate mortgages. If the LIBOR goes up, your monthly interest rate payment may go up with it. If it goes down, you could enjoy lower interests.

But if you have investments in LIBOR-based securities, like mutual funds or pensions, you would earn less interest. No one is really sure how the manipulation affected all of these. But some say the changes in the LIBOR rate were so, so minuscule and tiny that it really didn't have much of an affect at all on the consumer.

But if there wasn't a direct impact like that, the problem here is that Barclays was so brazen that it did whatever it wanted to and, in this case, manipulate the interest rate -- Brooke.

BALDWIN: And now they're asking questions of the Fed. Could be asking questions of other banks. We will be watching, I know. Alison Kosik, thank you so much for us in New York.

On Capitol Hill, they are talking Obamacare and Republicans are making another move to try and kill the law. But the Democrats, they have a strategy. You will hear it.

Plus, hijacking your smartphone and stealing your contacts -- what we just uncovered about who is creeping into smartphones and how to stop it before it gets out of control.

(COMMERCIAL BREAK)

BALDWIN: Republicans attempt another Obamacare strike-down. Mobile apps are hijacking your phone. And NASA releases these amazing pictures of Mars.

Time to play "Reporter Roulette."

Let's go to Washington first to Dana Bash. House Republicans trying yet another time to kill President Obama's health care reform law. They're set to vote tomorrow to repeal it. Dana, House Republicans, they have already voted over 30 times to repeal it, so I hear you chuckle. Why try again?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, as you were coming to me, I was looking down at my BlackBerry to make sure I can pull up this quote, because it's just classic and really gives I think a good example of the answer to your question.

Walter Jones, who is Republican congressman from North Carolina, just told our producer Deirdre Walsh really an honest answer to why they're doing it. He said that they are doing it to make a statement. "That's what the people want us to do." He said, that's all this really is, is making a statement. Then he went on to say that the Republicans hope that they will be able to do more than make a statement after the November elections.

Look, the Republicans feel that the one good thing politically from the Supreme Court decision was the fact that the Supreme Court in upholding the health care law called it a tax and they believe that politically ramming this -- or pounding this health care law as a tax is a good thing, because people simply don't like to get tax. And that is a major reason why they're bringing this up yet again for the 32nd -- I think you said, 32nd or 33rd time in some way, shape or form.

BALDWIN: OK. That's why the Republicans are doing it. What about the Democrats? Do they have any kind of strategy here?

BASH: The Democrats actually have been quite disciplined. If you talk to Democrats, they will privately tell you that they're even surprised themselves that they have been as disciplined as they have been and making the case over and over again that they believe this is yesterday's news. Republicans are fighting yesterday's battles.

But one of the things that we saw on Capitol Hill today were a pair of hearings that Republicans are having looking at the tax impact, at the business impact, the impact on doctors as well, of this health care law. What Democrats did is they used that hearing to have a mantra. And the mantra was about Mitt Romney. Listen.

(BEGIN VIDEO CLIP)

REP. DANNY DAVIS (D), ILLINOIS: Since 2006, Massachusetts under Governor Romney mandated near universal coverage for its population.

REP. WILLIAM LACY CLAY (D), MISSOURI: For the past five years, they have been living with comprehensive health care reform signed into law by Governor Mitt Romney that is substantially similar.

(END VIDEO CLIP)

BASH: So, Democrats figure, Republicans are having this vote, they're having this debate in every way, shape or form. Why not make a political plus out of it? Why not have some fun with it or at least use it to their advantage.

And at this point, Democrats believe one major advantage is trying to remind people that Mitt Romney, as governor of Massachusetts, did sign the mandate into law in that state and that, as you remember, during the Republican primary season, one of the main reasons people like Rick Santorum said you really don't want this Republican as our nominee because it will muddle the message.

BALDWIN: Yes. Well, they may say it was yesterday's news. They're allowed to vote. Dana, you and I will be talking about this as it happens tomorrow. Dana Bash, senior congressional correspondent, thank you.

Remember those pesky pop-up ads, the computer ads? They're back. And this time they're holding your smartphone hostage. Next here on "Reporter Roulette," Christine Romans in New York.

Hey, Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Brooke, you know when you get those pop-up ads on your smartphone? Be very careful about clicking on them because they could be changing your settings and taking your contact information without permission.

That's according to a new report from mobile security company Lookout. Their study says tens of thousands of smartphone apps, tens of thousands of them, are running these aggressive and invasive ads. And when the advertising networks get your personal information, they're selling it to marketers.

Now, this isn't widespread yet, but it's a growing problem. How big? Well, 5 percent of free mobile apps are letting these ad pop-ups into your phone to make money. And the study found those apps have been downloaded 80 million times.

The most common type of apps with these aggressive ad pop-ups are one that you use to personalize your phone. The second is comics. And the third, arcade and action apps. And the fourth comes from entertainment apps. The next time you're shopping for apps on your phone and you click on some of these free ones, keep this in mind. The way to get rid of these apps on your phone is simply to delete the app -- Brooke.

(END VIDEOTAPE)

BALDWIN: Christine, thank you. You may not always know which app is causing the problem so it's possible you might have to go through each app to actually figure out where those ads are coming from.

And NASA -- NASA has revealed stunning new 360-degree panoramic image of Mars taken by of course Mars rover Opportunity.

Next here on "Reporter Roulette," Chad Myers is in the studio.

And I just love this picture. And I love the tracks that you can actually see from the rover.

CHAD MYERS, CNN METEOROLOGIST: Yes.

And you know what? This thing has now been on the ground for 3,000 days. It finally had its 3,000-day anniversary.

BALDWIN: Oh.

MYERS: Think about buying a car. It comes with a six-month warranty and it lasts you eight years.

You're probably pretty...

BALDWIN: How about a 3,000-day warranty?

(LAUGHTER)

MYERS: You're probably pretty happy about this.

This is Opportunity. Now, we understand Spirit stopped working in 2010. But this is now more than 3,000 days and nights in Mars, 817 pictures, all glued together to make this 360-pan-cam of the Opportunity.

There's Opportunity down here, its solar panels still working. There are some tracks where it was driving to get up here. It stopped for a couple months to take all of these pictures.

Now, if you go all the way to this side, this is south, this is north, and this is south again. You understand we don't have a 360- degree screen. So, it's a flat screen.

But there you go. this is all these little pictures, all glued together and it looked over the entire Martian landscape. They're seeing dust over here. They believe -- you can see here wind-blown dust.

You kind of see almost looks like the Sahara Desert where that would be the wind-blown sandstorms in here. They're still getting fantastic images from this Mars rover.

And another one on the way. Curiosity will be there in 29 days. We'll show it to you as soon as we get pictures, of course, Brooke.

BALDWIN: That's pretty cool with the wind and then, I mean, it looks like broad daylight. Just amazing images of Mars. Chad, thank you so much.

And that is your "Reporter Roulette."

We talked about amazing pictures. I have some more for you. What took place inside a U.S.-funded hospital? These are tough pictures to look at. This is inside the war zone. You're going to see them in a report you'll only see right here on CNN.

(COMMERCIAL BREAK) BALDWIN: Rotting flesh, protruding ribs? Now, the treatment of wounded afghan soldiers in a Kabul hospital has caught the attention of the Pentagon because the military hospital is partly funded by the U.S.

Live pictures coming in here. This is a hearing happening right now into the claims of abuse here and I just want to give you a warning. Time to pause, get the kids out of the room, if you have little ones there. Look away if you need to because the images we're about to show you, they're tough to look at.

But they're also very, very important here. CNN Pentagon correspondent Barbara Starr has our exclusive report.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Afghan soldiers starving, lying in dirty beds with festering wounds, denied painkillers. All of this at the Kabul National Military Hospital, a hospital the U.S. paid more than $100 million to help the Afghans run.

COLONEL SCHUYLER GELLER, M.D., U.S. AIR FORCE (RETIRED): Things are simple as dressing changes are not done. Patients become infected and they die.

STARR: These days, a world away, Schuyler Geller, a retired Air Force doctor, tends to his Tennessee farm.

GELLER: This will be kind of a little haven.

STARR: From February 2010 to February 201 he oversaw training of Afghans at the hospital. These photos were taken by his American military staff.

GELLER: There are patients that are starving to death because they can't buy the food. They have to bribe for food. They have to bribe for medicine. Patients were beaten when they complained about no pain medicine or no medicine.

STARR: And you're not supposed to worry about that?

GELLER: That's what we were told.

STARR: Pentagon officials do not dispute that the photos from 2010 show hidden, but deliberate abuse by Afghan staff, but they insist that after a U.S. inspection, conditions have improved significantly.

In this memo to Congress, Geller alleges, two senior U.S. generals who oversaw afghan training, Lieutenant General William Caldwell and his deputy, Brigadier General Gary Patton, in 2010 delayed bringing in Pentagon investigators because of their political concerns over the looming mid-term U.S. elections.

Geller says Caldwell was angry his staff wanted the inspector general to investigate and that Patton ordered a delay out of concern it would embarrass the Obama White House.

GELLER: And then he said, but we don't want to do -- we don't want to put that request in right now because there's an upcoming general election. And we wouldn't want this to leak out.

REPRESENTATIVE JASON CHAFFETZ (R), UTAH: That's just not acceptable.

STARR: Congressman Jason Chaffetz's House oversight subcommittee is investigating the general's alleged behavior.

CHAFFETZ: Now, that's a very serious allegation, but it didn't come from just one high-ranking military on the ground. It didn't come from just two. We have several of them who have stepped forward and said, yes, this was indeed the case.

STARR: Geller says he wants the truth to come out.

GELLER: The biggest frustration is our own leadership's response and how slow that was and how inadequate that was.

(END VIDEOTAPE)

BALDWIN: Want to bring in our Pentagon correspondent, Barbara Starr. And just the first image in your piece, I mean, that man looked skeletal.

We mentioned this hearing. We saw the pictures. This hearing is happening right now, looking into these allegations that you were just discussing in that interview. What do we expect to come out of this?

STARR: Well, you know, the committee has put out a statement, the chairman has put out a statement saying that he is -- and I want to quote -- "disheartened and disgusted by these photos."

I want to be clear. This has been around since about 2010, but it's only recently that Schuyler Geller has come forward publicly and agreed to give us this interview on camera.

And we now have the Pentagon's inspector general again, Brooke, again looking into all of this, launching a review about whether General Caldwell and Patton did delay an investigation into all of this.

General Caldwell, General Patton, we reached out. They declined to comment because of this new pending inspector general review. The Pentagon says the problems have been fixed at the hospital, but Congress is holding hearings to try to determine what really happened here.

BALDWIN: I know you'll be watching to see what comes of the review and we'll look for that. Barbara Starr for us at the Pentagon. Barbara, appreciate it.

Coming up next, a billboard showing how you can beat a breathalyzer. Yep. You're about to hear how this works and why one group is livid.

(BEGIN VIDEO CLIP)

BALDWIN: I want tell about you this new product that has MADD, Mothers Against Drunk Driving, really living up to its name. MADD in Georgia is worried about the "Breathalyzer Equalizer." That's what this thing's called, which came on the market just last month.

A company video demonstrates how a person takes this "Breathalyzer Equalizer." Here he goes. Swallowing this powder to get rid of what's called residual mouth alcohol, so that you can get a lower reading if you have to take a breathalyzer test.

(BEGIN VIDEO CLIP)

BARRY MARTIN, EXECUTIVE DIRECTOR, GEORGIA MOTHERS AGAINST DRUNK DRIVING: You're putting drunks on the road. If you get caught, you know, you can beat the test and that false sense of hope is going to lead to an accident. That accident could kill somebody, could injure somebody.

(END VIDEO CLIP)

BALDWIN: Defense attorney Joey Jackson is on the case. So, Joey, I actually was not familiar with residual mouth alcohol until today. So, explain to me how this really works. You take this powder, let's say you haven't had enough drinks to be drunk, but it still leaves something so you could fail a test, is that correct?

JOEY JACKSON, DEFENSE ATTORNEY: It could. This is how it works, according to what I've learned as a former prosecutor and now doing this from a defense perspective.

What happens is you want a reliable and accurate reading and there are machines which detect the presence of alcohol in your blood. It's a blood-to-alcohol content and they measure it by when you blow into a tube.

So, the issue is, you want an accurate reading and, oftentimes, that reading is contaminated or could be by what's called residual mouth alcohol. And what that is, Brooke, it's alcohol which gets confined or secreted in the oral cavity and it could come from a number of things.

That's why officers are trained to observe you for a period of time, often 15, 20 minutes, so that if you belch, it comes up from the stomach, it can leave contaminant in your mouth.

If you, for example, vomit, regurgitation causes it. You can get it from Binaca Blast or some of those other things. And, so, what this product is designed to do is to eliminate that residual alcohol and just get an accurate reading from what you're blowing from your stomach, deep air, into the tube.

BALDWIN: OK, so, the issue, as we just heard in that sound bite from the gentleman from MADD is they're worried that, OK, drunk drivers will try this and that's going to lead to more drunk driving on the roads.

Let me get to this. This is the response we have from the company's executive vice president, the company making this product. He's the man we saw in the demonstration video.

Here's what he says. Let me quote. "We do not condone drunk driving. This product only reduces the false readings on the roadside breathalyzer that can be caused by residual mouth alcohol and has no effect on a person's true alcohol concentration. Our only goal is to improve the accuracy in roadside breath-testing."

So, Joey, if it turns out that a drunk driver thinks that they can use this product and it's going to work, could police then use that against the driver?

JACKSON: You know, it would seem to be that they're going to use everything they can, but I would hasten to add this, Brooke. It's not the only thing. The measure of alcohol in your blood is one indicator. There are other things police do, as we know.

They have you walk the straight line, right, nine times forward, nine times back. They have you touch your nose to make sure you're OK. They have you stand on one leg to see what your balance is.

So, this is one tool, of course, that this company is saying would give you a more reliable reading because it would eliminate any contaminant in your mouth and ensure, and only ensure, that the result comes from deep lung air.

So you can spin it any way you like. Prosecutors, I'm sure, won't like this. Defense attorneys will love it. But ultimately, if the product is going to lead to a more desirable result and accurate result, then so be it.

BALDWIN: All right. Joey Jackson, thanks for the explanation. Appreciate it. "On the Case" here.

JACKSON: A pleasure, Brooke.

BALDWIN: It is even hard to bring a hardcore rocker to tears, but watch this.

(BEGIN VIDEO CLIP)

FLEA, MUSICIAN: It was so beautiful, you know.

(END VIDEO CLIP)

BALDWIN: Chili Pepper bassist, Flea, rocker-dad in tears. You're going to see why this story really affects him.

(COMMERCIAL BREAK)

BALDWIN: Some more encouraging news for that Georgia woman recovering from a horrible, flesh-eating bacteria. A national home builder, Pulte, has offered to build Aimee Copeland a new home addition, free of charge.

An official groundbreaking is being held today at her house and CNN affiliate, WSB, reports that this new space will include a fitness room for rehabilitation, a new bedroom, even an elevator.

And just last night, her hometown raised $19,000 to help her family pay for all those medical expenses. Her father was absolutely overwhelmed.

(BEGIN VIDEO CLIP)

ANDY COPELAND, FATHER OF AIMEE COPELAND: God bless you all. Thank you so much for your generosity and for your hard work.

It just amazes me when I look around this room and I see so many people that I just love to death. And I'll never forget this. And I know Aimee won't either. And I know her heart goes out to you just as mine does.

(END VIDEO CLIP)

BALDWIN: Copeland was released from an Augusta hospital last Monday after nearly two months of specialized care and grueling surgeries. Doctors had to remove her leg, her foot and both of her hands to save her life.

Flea, the bassist from the Red Hot Chili Peppers is giving back. The rock dad is giving underprivileged children the opportunity to pick up an instrument and take music lessons. And Flea says it's his way of paying it forward in this "Impact Your World."

(BEGIN VIDEOTAPE)

FLEA: Hi, I'm Flea of the Red Hot Chili Peppers and we can make an impact on our children's education.

The organization that I started with a couple of friends is called the Silver Lake Conservatory of Music. We're a non-profit community-based music school in Los Angeles.

I grew up in Los Angeles, going to public schools and I learned to play music at school.

I was the type of kid that was going to end up in a lot of trouble and music was something I really had to hold onto. It made me want to go to school. It gave me something to believe in.

I see these kids come in and so many of them don't have a direction. They're getting in trouble or they don't have something that they're really passionate about and they find an instrument and they find something that they really love.

I was teaching this kid who had been kind of shuffled around from foster home to foster home. I could see from the get-go this kid would not be denied. The fervor and commitment he applied himself to his instrument, it was so beautiful, you know. We're just bursting at the seams with kids. We have to turn down kids all the time.

Our goal is for the school to be going and to be an institution in the community long after I'm gone.

"Impact Your World," CNN.com/impact.

(END VIDEOTAPE)

BALDWIN: That is awesome. Flea, thank you so much.

Now think about this. Take your whole life, I'm talking about everything you've got, cram it -- here we go -- into 300 square feet. Check this out. We've taped off 300-square feet here in Studio 7. The answers to growing population and to single-dom. We're talking about that next.

(COMMERCIAL BREAK)

BALDWIN: We are just a couple moments away from the top of the hour. And hello, Mr. Blitzer. What do you have coming up?

WOLF BLITZER, HOST, "THE SITUATION ROOM": Nice to see you, Brooke. Haven't seen you in a while. You're back in this time slot.

BALDWIN: Yes.

BLITZER: Good to have you just before "The Situation Room."

We have a lot of good stuff coming up. James Carville has a new book out with Stan Greenberg, "It's the Middle Class, Stupid." They're here. The book is just coming out today. We're going to talk about what's going on in the world of presidential politics.

Also. on a very different subject, national security. The chairman of the house intelligence committee, Mike Rogers. is here, Jane Harmon, former ranking member of that committee. That's in our 6:00 p.m. Eastern hour. We've got good stuff to talk about with them.

A lot of news happening in the world of politics, national security. All sorts of good stuff. I'm looking forward to three hours of "The Situation Room" coming up.

BALDWIN: Three hours. Wolf Blitzer, quick question. I know your daughter lives in New York City. This is a segue into our next segment. I bet her friends have tiny apartments.

BLITZER: Very small. But that's New York, New York. I'm sure they're not as small as what Mayor Bloomberg has in mind.

BALDWIN: There we go. That's why we love you. We're going to talk about that. New York has famously small apartments. They could get even smaller. Under this proposal Wolf just mentioned -- this is from the New York mayor, Michael Bloomberg -- he's calling on these developers to come up with these different designs for apartments no longer than and no larger than, let me say that, no larger than 300- square feet. Three hundred square feet.

So I'm going to hop up and I want to show you what 300-square feet kind of looks like. This is Studio 7. What we've done -- thanks to our caution tape -- walk with me, Robert -- is this is 300-square feet right here.

And, you know, sitting here I was trying to figure out what exactly you could fit. We have some sofas. You could fit your sofas and from this vantage I'm thinking you've got to have a bed. Maybe you can fit a refrigerator.

If you have a lot of clothes, this isn't going to work. Could you entertain? I don't know. But 300-square feet, obviously, is a pretty tight squeeze, but I've had friends certainly who lived in the city going to college and they just build walls, don't they? I don't know if this would be much different.

But I want to talk about how this may be working. And I want to talk to Sean Osher, the founder of a New York real estate firm, CORE, featured on HDTV's "Selling New York".

I don't know what you thought of our 300-square feet demo, but it's not a heck of a lot of space, so before we get into what the mayor's proposing, tell me, what do you think you could fit into 300- square feet?

SEAN OSHER, FOUNDER/CEO, CORE: well, I'm a little bit bigger than you. I think you fit beautifully in 300-square feet. You know, space is definitely a premium in New York City and no one ever has enough space.

And it's a relative term. I mean, I think, you know this is the new age of "less is more" and I think in this situation the mayor's plan is a great idea.

BALDWIN: And I think the mayor is also saying, look, there are a lot of singles, singles in the city. And living in New York is very, very, very expensive. It's going to open up affordable housing for all the singles that live in this city.

So you agree with that premise? You agree this would be a good idea?

OSHER: Absolutely. I think it would be a great idea. I mean, as of now, New York City only has one million studio or one-bedroom apartments and there are eight million people in need of those sized units.

In fact, I would love to see it expanded to "for-sale" housing. I think a lot of people are priced out of the New York City market and actually leave the city, unfortunately, to more affordable cities where they can get a better quality of life.

BALDWIN: So you think as a real estate agent that if someone walked into your office and said, I want this tiny space, it wouldn't be too tough of a pitch coming from you to say, hey, perfect. Got it. Three hundred square feet. You would have takers?

OSHER: Absolutely. We'd get rid of them like hot cakes.

BALDWIN: Wow. I want to read this line. I love this line. It was in the "New York Daily News" article today. They describe these plans as "larger than a jail cell, but smaller than a mobile home."

Do you think that that's just the price of being single in New York?

OSHER: Yes. I mean, I think everyone has a New York real estate story about their first apartment. Even the mayor has one. And I think it's a part of the process of living in this great city of ours.

And, you know, living in a small space and how you manage that creatively is one of the great challenges of this great city.

BALDWIN: Come on, Sean. You wouldn't be claustrophobic?

OSHER: Me, personally, no. I think smart design and this competition that the mayor is spearheading is going to be great because it's going to open up the door so to speak to think outside of the box. And, you know, create what you can in a very small space.

BALDWIN: Tell me a little bit more about what the mayor is pitching. I mean, he's sort of calling on designers, right, so figure out how to design, build, orchestrate 300-square feet. So what does he do with that once he gets those pitches?

OSHER: Well, I think, you know, we've seen this in other major cities in the world. If you look at housing in Tokyo, a lot of architects are very creative in how they store clothing, kitchens and things that become and have more than one use. So I think this competition is going to look at a lot of creative ideas and certainly things that could be implemented in other apartments, not necessarily 300-square feet, but bigger.

BALDWIN: What about -- this is the fun part for people who don't live in New York who get to say, nanny-nanny boo-boo, to the people who live in New York. Tell me what a 300 square foot apartment would cost, let's just say, to rent in Manhattan.

OSHER: Well, the average price, I think, for a 300-square-foot apartment would be about $2,000 a month. And, you know, the really staggering ...

BALDWIN: Hang on. Hang on. I just have to marinade on that for a minute. $2,000 and this is what you get? $2,000.

And quickly, what would you be able to sell it for?

OSHER: Well, it wasn't that long ago that we had our first $1 million studio sale in the city. So, I think a 300-square-foot space would sell for $450,000.

BALDWIN: OK. Sean Osher, thank you very much. Three hundred ...

OSHER: Thank you.

BALDWIN: ... square feet. There you have it.

And that's it for me. Now, to Wolf Blitzer. Let's go to Washington. Your "Situation Room" begins now.

END