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Detroit Files for Bankruptcy; Chicago Teachers Face Layoffs; Tech Earnings Drag Down Stocks; Trayvon Martin's Parents Speak Out; "Piers Morgan Live" Interview with Jeantel; Katherine Jackson to Testify; Protesters Meet with Florida's Governor; Snowden Revelations Hamper War on Terror

Aired July 19, 2013 - 13:00   ET

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

WOLF BLITZER, CNN ANCHOR: Detroit declares bankruptcy. What the move means for city workers and retirees in the motor city.

Plus, they've been silent since the verdict. Now the parents of Trayvon Martin, they are speaking out.

And the heat wave gripping much of the country getting worse. The question now, is relief in sight?

This is CNN NEWSROOM. I'm Wolf Blitzer reporting from Washington.

It's an iconic American city. The motor city. The capital of the U.S. auto industry. The city that gave us the Motown sound. Today, Detroit has a more dubious distinction, it's the largest U.S. city ever to file bankruptcy.

Tens of thousands of current and former city workers are deeply worried right now their pensions will be slashed and that could set a precedent for other struggling cities across the United States. But Michigan's governor, who signed off on the bankruptcy filing, says it's a chance to start turning Detroit around.

(BEGIN VIDEO CLIP)

GOV. RICK SNYDER (R), MICHIGAN: This is our opportunity to improve citizen services. They deserve a better answer than what they've gotten for decades, and with respect to retirees, clearly I empathize with their situation. Many of them are on a fixed income and this needs to be done in a thoughtful way. But let's stop and look at the situation. $18 billion in debt. The city is broke. And if we weren't to take this action to stop and say, let's get things done in a thoughtful, well-organized fashion, the city would continue to go downhill. Enough is enough about Detroit going downhill. This has been going on for 60 years. It's time to stop and to say, let's stabilize the city and then let's grow the city of Detroit.

(END VIDEO CLIP)

BLITZER: As the governor mentioned, Detroit's descent into bankruptcy has been a long time coming. Poppy Harlow takes a look now at some of the problems that drove the motor city into financial crisis.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNN CORRESPONDENT (voice-over): Detroit's downfall has been decades in the making.

SNYDER: This is not any recent development. This has been going on far too long and isn't it time to say enough is enough?

HARLOW: A dwindling population, a decline of the automakers, and political corruption are just some of Detroit's woes. Now, as it files for bankruptcy, Detroit's workers are bracing for what could happen to their pensions and health care.

MARK DIAZ, PRESIDENT, DETROIT POLICE UNION: Will this effect pensions? Based on what we know, anything is possible.

KEN PELTIER, FORMER POLICE OFFICER, DETROIT POLICE DEPARTMENT: We paid a percentage of our wages every year into that, so it's not something that's being given to us. It's our money.

HARLOW: More than $18 billion in debt, Michigan's governor called bankruptcy the only choice.

SNYDER: Detroit is broke. From a financial point of view, and more importantly, the citizens deserve better services.

HARLOW: Those services have taken a significant hit.

TINESHA FLOWERS: Will you call the police now, you wonder if they're coming.

HARLOW: Detroit's emergency manager who took control of the city in March insists bankruptcy will not change the day-to-day here.

KEVYN ORR, DETROIT EMERGENCY MANAGER: Services will remain open. Paychecks will be made. Bills will be paid. Nothing changes from the standpoint of the ordinary citizen's perspective.

HARLOW: Detroit's mayor didn't have a say in the decision but urged understanding.

DAVE BING (D), DETROIT: As tough as this is, I really didn't want to go in this direction. But now that we are here, we have to make the best of it.

(END VIDEOTAPE)

BLITZER: And Poppy is joining us now live from Detroit. Give us a little sense, Poppy, about the mood of the city today.

HARLOW (on camera): I think people are very on edge here. I haven't heard a lot of people applauding this decision. One woman that just walked by said, you know, I feel like the governor has been planning this since he took office. Obviously, she's not a fan.

One woman at the diner that I went to this morning said, I didn't really think it would come to this. I knew we were in a tough position, but I didn't think we'd come to this.

But when you look at the numbers, Wolf, you do question what other choices he had, $18.5 billion in debt, 78,000 abandoned structures in this city alone. Forty percent of the street lights don't work. And it takes police, on average, 58 minutes to respond to calls. So, the city services need to get better here. But the question is for all those city workers, the retired workers and the current workers, because I just interviewed Kevyn Orr, the emergency manager who is in charge of all of this in Detroit. And I said, look, is there any way to get out of bankruptcy without some sort of concessions made by those city workers? And he said, no. The question is, how big will those cuts be -- Wolf.

BLITZER: And we're going to be discussing some of those issues with the mayor of Detroit. Mayor Bing is going to be joining us live later this hour, so we have lots of questions for him.

As we mentioned, the Detroit bankruptcy filing could mean smaller pension checks for city workers and retirees and that has a lot of them deeply worried right now about they're future. Detroit's emergency manager says nothing will change this year, but pensions are part of the process.

(BEGIN VIDEO CLIP)

ORR: What we're talking about in retirement is looking at the unfunded portion. We have two retirement plans, general services and then police and fire. We're looking at the unfunded portion of the retirement plan. That's going to be part of the dialogue to determine what that is. Police and fire may be a little bit better than general services, but we're looking at that unfunded portion.

With regard to health care, unlike some other communities in dire straits, even in chapter, we have not decided to take away health care. We're trying to provide some form of health care.

(END VIDEO CLIP)

BLITZER: Larry Newberry worked as a firefighter in Detroit for more than 30 years. He's retired right now. He's joining us from Traverse City in Michigan. Larry, thanks very much for coming in. What would it mean if the city decided that they had no choice, given the bankruptcy, to reduce your pension?

LARRY NEWBERRY, RETIRED FIREFIGHTER, DETROIT (via Skype): (INAUDIBLE.)

BLITZER: I think we're having some problems connecting with Larry. Larry, can you hear me OK?

NEWBERRY: Yes, I can hear you fine.

BLITZER: All right. What would it mean for your finances if your pension were -- was reduced?

NEWBERRY: Well, it would -- I don't know if I'd be able to stay in the condo -- I have a small condo where I'm at. I don't know if I'd be able to stay in my condo. I don't really need all the pension for myself. I'm single but I'd like to send some of my -- to help my grandkids with college. You know, we just don't know right now. But not only myself, there's a lot of widows.

BLITZER: I think we're losing that connection, Larry. Go ahead, try -- let's try one more time. You were saying there are a lot of widows who rely on these pensions?

NEWBERRY: Definitely. There's a lot of widows that rely on the pension. A lot of fallen police and firemen, their widows and children need this money. We all put money into that pension system, and we all risk our lives day in and day out, but it seems that people have short memories. When we do our work and we risk our lives, we're heroes. But when it's time for us to -- when we can't do it anymore, it seems like they forget.

BLITZER: Right now, you're getting what, $34,000 a year in annual pension -- in an annual pension, is that right?

NEWBERRY: Yes.

BLITZER: And that's enough for you together with limited amount of social security to live on. You get medical benefits obviously through Medicare since you're -- I believe you're 65 years old or older. If they cut back on that, that's going to change your lifestyle.

NEWBERRY: It will change my lifestyle, but I have a -- I live pretty frugally. Like I say, most of my money I try to save, I try to help my grandchildren out. And so, yes, it would hurt me, but I'm sure it would hurt a lot of other firemen and policemen probably a little bit more than me.

BLITZER: Larry, good luck to you. We'll obviously hope for the best in Detroit. I know that city going through a horrible situation right now. Larry Newberry spent a long time, he put his life on the line as a firefighter in Detroit, and now he's retired but he's deeply concerned as are so many other folks.

Chicago schools are also facing a budget crisis. 2,100 employees, most of them teachers, started getting layoff notices today. The president of the Chicago Teacher's Union calls the job cuts unnecessary and shameful. The school system has a $1 billion deficit generated by the high cost of pensions and the legislature's inability to deal with the problem. These layoffs are in addition to 850 jobs that were cut in June.

Quick check on the markets right now. Investors are taking a step back today. Stocks are down after worse than expected earnings results from Google and Microsoft, but the modest pullback comes a day after the Dow and the S&P reached new record highs. Right now, take a look, the Dow down about 30 points.

He was just a teenager trying to make his way home. The parents of Trayvon martin say the jury didn't see their son as he really was. They sat down with CNN's Anderson Cooper for an in-depth interview last night. Martin's mother says she was stunned when the jury acquitted George Zimmerman of killing her son.

(BEGIN VIDEO CLIP)

SYBRINA FULTON: It came as a complete shock for me. And the reason I say that is because I just look at people as people, and I thought for sure that the jury looked at Trayvon as an average teenager that was minding his own business, that wasn't committing any crime, tThat was coming home from the store and were feet away from where he was actually going. And I just believe that they realized that. But when I heard the verdict, I kind of understand the disconnect and that maybe they didn't see Trayvon as their son, they didn't see Trayvon as a teenager, they didn't see Trayvon as just a human being that was minding his own business.

UNIDENTIFIED MALE: I didn't have any concerns about it, because we thought that there was enough evidence there no matter who was on that jury to convict him of second degree murder. And when you think about it, I think that they just took in account what George Zimmerman said was the truth. Trayvon wasn't here to tell his story, but the mindset of that jury, they, some of them, had their minds made up no matter what story was told.

(END VIDEO CLIP)

BLITZER: Our Legal Analyst Sunny Hostin also interviewed Trayvon Martin's parents. She'll join us later this hour. We'll talk about what she learned from her interview and what the parents hope will come out of all of this. That interview with Sunny coming up later.

A couple of programming notes. It's the Piers Morgan interview a lot of people are talking about. The prosecution witness, Rachel Jeantel, in her own words tonight 9:00 p.m. Eastern on "PIERS MORGAN LIVE."

Parts of the U.S. May get a break this week -- this weekend from days of sweltering heat. A cold front is expected to bring much needed rain from the Northeast to the Midwest. For days, temperatures have soared above the 90-degree mark, with heat indices over 100. So hot here in D.C., humane society officials are taking steps to check on people and their pets. Our meteorologist, Jennifer Delgado, is over at the CNN Weather Center. Emily Schmidt rode along with a team watching what's going on in Washington.

Emily, let's start with you. What are you seeing?

EMILY SCHMIDT, CNN CORRESPONDENT: Wolf, you know, we've been talking all week about the heat here in Washington. At that point, it was a heat advisory. Today, they have upped it. It's an excessive heat warning. It means the heat index could go over 110 degrees. And, you know, especially dangerous when you talk about vehicles because Safe Kids USA says in just 10 minutes, you sit inside a vehicle that doesn't have air-conditioning, the temperature can go up 19 degrees and it just keeps going up after that. Extremely dangerous for people and also as Michael Treeblosser (ph) from the Washington Humane Society knows, it's dangerous for animals as well. How often do you see this happen?

MICHAEL TREEBLOSSER, WASHINGTON HUMANE SOCIETY: Very often. It's been a busy day this week. Yesterday, we had three emergency calls come in. One came in this morning. Thankfully no loss of life or no injury sustained as of yet, but we're anticipating a busy, busy week ahead and busy, busy time.

SCHMIDT: How long does it take for an animal to get too hot in a car?

TREEBLOSSER: Similar to a child or human. I mean, it could just be a matter of minutes. So, really caution people, if it's something you can avoid leaving your animal in the car, just please make other plans.

SCHMIDT: And, Wolf, we've been riding around with Michael all morning. We've been to a number of calls. People concerned about animals, were they getting enough shade, were they getting enough water? Certainly something that people are concerned about. They are busy. This is one of the busiest weeks they've had in quite some time because of the heat. There is relief in sight nationwide. The Midwest should get some later tonight. We may get some by tomorrow evening. But, in meantime, hot and dangerous conditions here in Washington.

BLITZER: Very dangerous, indeed. All right. Thanks, Emily. Let's bring in our meteorologist Jennifer Delgado. What's the forecast, Jennifer?

JENNIFER DELGADO, AMS METEOROLOGIST: Hi, Wolf. Well, the forecast is, we're going to see some relief coming but unfortunately for Washington, D.C., it's not going to come until late Saturday. Now, you can see across parts of the Northeast, New England, and even the Midwest, we have excessive heat warnings in place. In some of these locations, what you're seeing in purple, temperatures, they feel like 110 degrees. That's when you add in the temperature and the relative humidity. As I said, it's even in areas like the Midwest. Millions of people are in danger of this excessive heatwave that is going on. And, of course, right now, it's still rather hot outside. Wolf, you're lucky you're indoors because it feels like 107 degrees in Washington, D.C.; Atlantic City, 104; and 103 in New York. And it's only going to get hotter as we go through the afternoon.

Now, there's going to be some relief on the way. And it's going to arrive in parts of the Midwest today, tonight, because we do have that frontal system that Emily was talking about. And that's going to drop temperatures down for areas like Chicago as well as Grand Rapids and then that front makes its way over toward the east throughout the weekend.

But here is what we're going to look at for today. With that front, we have a severe weather threat for areas, including parts of the Midwest, up towards parts of New England. And Saturday, you'll see some relief. But unfortunately, strong storms moving into areas like Pittsburgh. But for Washington, D.C., it's going to be hot today, high of 95, much warmer when you add in humidity, 95 on Saturday. And, finally, Wolf, you guys will be able to come out and play. The temperatures drop down to the mid to upper 80s and lower humidity. Just a few chances of storms. But you'll take that when you're going to cool things off.

BLITZER: Yes, 80 is sounding pretty good right now.

DELGADO: Sounds great.

BLITZER: Jennifer, thanks very much.

Here's what else we're working on this hour. Katherine Jackson is taking the stand today in the wrongful death lawsuit of her son, Michael Jackson.

And after days of sit-ins at the Florida state capitol, protesters finally get their meeting with the governor. What he decided to do. That's next.

(COMMERCIAL BREAK)

BLITZER: All right. We're just getting this in. The cause of death of that 16-year-old woman -- girl, I should say -- on that plane crash, the Asiana plane crash, in San Francisco, listen to what the San Mateo County coroner has just released.

(BEGIN VIDEO CLIP)

ROBERT FOUCRAULT, SAN MATEO COUNTY CORONER: The cause of death of Asiana flight passenger Ye Meng Yuan (ph) is listed as multiple blunt injuries that are consistent with being run over by a motor vehicle. Those injuries she received, she was alive at the time.

(END VIDEO CLIP)

BLITZER: She and her classmate were on that flight. They were coming here to the United States for some sort of summer program. Unfortunately, they were both killed.

There had been speculation since the crash that the 16-year-old Ye Meng Yuan died on the tarmac after being run over by a motor vehicle. That was all speculation, but now you just heard the San Mateo County coroner say that has been confirmed.

Her death was the result of multiple blunt injuries that are consistent with being run over by a motor vehicle. And the injuries she received indicate she was alive at the time. A very sad, sad story. We'll continue to follow up on that.

Meanwhile, Florida Governor Rick Scott is calling for a day of prayer and unity, but he says there will be no repeal of his state's controversial "stand your ground" self-defense law. Protesters staged three straight days of sit-ins at the state capital in Tallahassee. Their demonstrations followed the acquittal of George Zimmerman in the killing of the unarmed teen, Trayvon Martin.

Our John Zarrella is joining us now. He's in Miami.

John, the governor met with the protesters last night. What happened?

JOHN ZARRELLA, CNN CORRESPONDENT: You know, Wolf, that was somewhat of a surprise in and of itself. We really didn't expect that the governor would show up back at his office at the capital last night. He'd been in Tampa all day, but he did.

He met with the protesters and they got what they want. They got the meeting with the governor, but they also didn't get what they wanted, which was the governor to call for a special session.

(BEGIN VIDEO CLIP)

GOV. RICK SCOTT (R), FLA.: I'm not going to call a special session. I don't believe right now that "stand your ground" should be changed, but I tell you right now, I appreciate you.

QUESTION: And I'm sure I'll see you again.

(END VIDEO CLIP)

ZARRELLA: Now, protesters are still at the state capital. Not clear what their intent is at this point because they are saying that the governor will not call for that special session, that they may not leave.

At the same time, you know, tomorrow, Wolf, a very big day around the country. At least 100 cities -- New York, Chicago, Los Angeles, San Francisco, Miami, Houston, Denver, you name the city -- there is going to be a rally or a vigil.

It is called the Justice for Trayvon event, and the primary reason behind those, Wolf, is to try and put pressure on the Justice Department to investigate George Zimmerman for possible violations of Trayvon Martin's civil rights.

So that's the impetus behind those. They're going to be held primarily at federal courthouses and police departments. Sybrina Fulton, Trayvon's mother, is going to be in New York. His father, Tracy, will be here at the Miami event. Wolf?

BLITZER: I know you'll be watching it for us. Thanks very much.

John Zarrella reporting from Miami.

Remember, later this hour, Sunny Hostin, who sat down with the Martin family, the parents of Trayvon Martin, she'll be joining us. We'll have some excerpts from her interview.

Also coming up, the Edward Snowden effect. Why the country's anti- terrorism chief is worried right now.

(COMMERCIAL BREAK)

BLITZER: Blunt warning from the head of the National Security Agency. The NSA director Keith Alexander telling a security forum in Colorado that the NSA leaker, Edward Snowden, has single-handedly, in his words, changed the fight against terrorism.

(BEGIN VIDEO CLIP)

KEITH ALEXANDER, DIRECTOR, NSA: What we had is a person who was given the responsibility and the trust to do this job betray that responsibility and trust and took this data.

We have concrete proof that they have already, terrorist groups and others, are taking action, making changes and it's going to make our job tougher.

(END VIDEO CLIP)

BLITZER: Matthew Olsen, the director of the National Counterterrorism Center, was also at the forum in Aspen, Colorado. He was asked about the impact of Snowden's leaks. Listen to this.

(BEGIN VIDEO CLIP)

QUESTION: But is it on the leaks, is there anything, is there any demonstrated reduction of intelligence sharing because people think, oh, the United States just can't be trusted with secrets anymore? Everything leaks out?

MATTHEW OLSEN, DIRECTOR, NATIONAL COUNTERTERRORISM CENTER: I think it remains to be seen on Snowden. I'm worried about that. I'm worried about it when I see what I read coming out of -- and particularly with respect to Europe and our European allies, how they may be reacting to this. But I think it just actually remains to be seen on that.

(END VIDEO CLIP)

BLITZER: Candy Crowley is joining us now.

Candy, we have got two top security officials speaking out, expressing their thoughts about the impact of Snowden's leaks.

How politically charged, this whole issue right now, given all the public statements that have been released and the uproar that has developed over these past several weeks?

CANDY CROWLEY, CNN CORRESPONDENT: Well, I think it tells you that they're still doing damage control. This is something, certainly from General Alexander, we heard repeatedly up on Capitol Hill and from other administration officials.

This is going to hurt U.S. intelligence gathering. Martin Dempsey, who I spoke to a couple of weeks ago, said it's harmed us with our friends, it's going to a while to repair some of the ill will from the release of this kind of thing, showing that the U.S. was also spying on its friends, something that most people think they already knew.

But nonetheless, it's a -- it was a big PR problem. Now they're saying it's an intelligence problem, which Alexander had been saying before. So they continually need to push back. I would be surprised if Alexander isn't asked to say, in what way have they changed things? Because when you look at kind of the broad overview of what we know, lots of folks have said, well, it seems like the terrorists would already know that we were monitoring phone calls and that we have a way of figuring out who they're calling and for how long and that kind of thing.

So, but very definitely, this is still an administration and NSA still on defense about this.

BLITZER: And the president is in an awkward position right now. Early in September he goes to St. Petersburg, Russia, for the G-20 summit. But before that summit begins, he's supposed to be in Moscow to meet with Vladimir Putin, the Russian president.

But if Snowden is still in Russia and this U.S.-Russian relationship has not improved, that meeting between the president and the Russian leader could be in trouble.

CROWLEY: It could be, and it could be that the administration is letting that out in order to try to pressure Putin now to kind of deal with Snowden in the way the U.S. would like to see him do it, which is send him back to the U.S.

It would be a huge move not to go to that unilateral meeting with Putin in Moscow for the president. It would send a signal, I think, for the rest of his -- of President Obama's administration that they've sort of put Russia off to the side.

But the truth is that there are lots of things that these two disagree on, these two countries. And we saw that in the last gathering, where on Syria and on Iran and on missile defense, and on missile reduction, they just don't see eye to eye.

So there might be some calculation, why even go because what are we going to come out of it with?

So we'll see what happens but I think it would be a major blow to Putin and a major statement on how the U.S. sees its relationship with Russia in the next couple of years.

BLITZER: Yes, they could just have a meeting in St. Petersburg and say, you know what, the Moscow part was not really necessary; we'll have a little meeting in St. Petersburg at the G-20 summit or they may have nothing. It would sort of be the equivalent, if the G-20 summit, Candy, were here in the United States held in, let's say, in New York, and the president invited Putin to come to Washington for a meeting at the White House, and Putin said, never mind.

Obviously that would cause a bit of a stir in the U.S.-Russian relations --

(CROSSTALK)

CROWLEY: It's a big deal.

BLITZER: -- certainly is -- in the world of diplomacy and the high stakes in U.S.-Russian relations right now.

Candy, we'll see you Sunday morning, 9:00 am Eastern on "STATE OF THE UNION."

CROWLEY: Thanks, Wolf.

BLITZER: Days after that controversial cover of "Rolling Stone" magazine featuring the Boston Marathon bombing suspect, new photos are released showing a stark contrast.

Who released them and why? What's the follow-up? Stay with us.

(COMMERCIAL BREAK)