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American Morning

Oil Prices Surge; Campaign Clash: Debate Over Trade and War; New Details on Nuclear Program in North Korea; School Bus Brawl

Aired February 27, 2008 - 06:00   ET


JOHN ROBERTS, CNN ANCHOR: Now firing back at him.

BILL CUNNINGHAM, CONSERVATIVE RADIO HOST: John McCain threw me under the bus, under the straight talk express.


ROBERTS: The "Most Politics in the Morning."

Prices in crisis. Housing, gas and food. The Fed Chair speaks out about an economy in turmoil on this AMERICAN MORNING.

And good morning. Thanks very much for being with us. A lot to talk about today including the economy again. Boy, it's just not getting any better.

KIRAN CHETRY, CNN ANCHOR: That's right. Oil closing once again over $100 a barrel, and a lot of trickle down problems because of that. Ali Velshi is covering it all for us.

But, yes, some fresh concerns this morning. Oil hitting a new high in electronic trading overnight, $102 a barrel at one point. And that means it's possible, at least according to some of the analysts that we will be seeing $4 a gallon gas soon. Wheat prices also soaring, hitting an all-time high, and inflation grew the fastest pace in 16 years last month. All of this setting the dollar to a record low against the Euro this morning.

Our senior business correspondent Ali Velshi covering all of it for us aboard the Election Express, talking to voters. He's in Goliad, Texas this morning, and we're also expecting to hear from Fed Chair Ben Bernanke today to a House Committee about what he's going to say, and whether or not they can really do anything at this point in terms of cutting interest rates and how that will help.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Good morning, Kiran. This is a big problem for Ben Bernanke. He's got some stuff he's got to discuss. Part of this problem is that these oil prices have been pushing higher and higher, and that has been fueling inflation. You know, we got numbers out yesterday about wholesale inflation in 2007, up above seven percent. You know, we don't need government numbers to tell us as all across Texas and across the country, people have been telling me about how much they're paying for everything up. When you got inflation and people want you to continue to lower interest rates, lowering interest rates makes money cheaper for businesses and people to borrow and it stimulates spending. So will this government subsidy, this bailout that's coming. So the combination of low growth in the economy, which is when we talk about a recession and inflation is called stagflation. That is a major, major problem for the economy. It causes job losses.

We have one of the major home builders in America this morning reporting a big loss and complaining that ceaseless talk of recession is exacerbating the situation. I mean, these people have got to all get over themselves. It is not talk about recession. It is people around here talking to me about the high cost of diesel, $3.50 for a gallon of it, more than $3 for a gallon of oil, and you're right, probably heading upwards. That's the kind of discussion we've been having with people around here.

There's a direct link between the price of oil and inflation, and Americans are feeling it right now. The Congress is going to be asking Ben Bernanke for answers. You talked about the dollar. Let's take a look at the dollar.

It has hit the lowest point it has ever been against the Euro. It's also low against the British pound, the Canadian dollar and something that's of interest to people around here in south Texas. Even the peso has gained against the dollar. We'll be on this all morning. We're talking to people here in Goliad, Texas, and covering business news all across America -- Kiran.

CHETRY: All right, Ali, thanks.

ROBERTS: It was the final showdown before a crucial day in American politics, and every one was wondering which Hillary Clinton was going to show up. The answer? Both of them. Senator Clinton was on the attack at last night's debate in Cleveland, accusing the media of giving Barack Obama a pass. She also opened up about key issues saying the one Senate vote that she would want back is her vote to go to war with Iraq. It is the last time both candidates will face off before voters in Ohio, Texas, Rhode Island and Vermont go to the polls on March the 4th.

Jeff Zeleny is covering the Democratic campaign for "The New York Times." He joins me now from Columbus, Ohio. Jeff, in your article today regarding this debate, you called her pugnacious, and it started with the very first question. Let's listen to how she responded to it.


SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I seem to get the first question all the time. And I don't mind, you know, I'll be happy to field them, but I do find it curious. And if anybody saw "Saturday Night Live," you know, maybe we should ask Barack if he's comfortable and needs another pillow.

(END VIDEO CLIP) ROBERTS: Combative from the very beginning, tried to tap into this idea that the press is giving Barack Obama a free ride. Did she have a good debate last night?

JEFF ZELENY, "THE NEW YORK TIMES": I think Senator Clinton's debate, as most of her 20 some performances have been, was strong. She certainly made all of her points, but I'm not sure that she wanted voters to remember that line that we just played of the "Saturday Night Live" performance if Senator Obama has been treated more favorably or not. It's a line that her campaign has been saying over and over and over, but I was a little surprised to hear her say it last night at the debate. It almost had the same ring as a week ago when she said change you can Xerox.

But look, she made several points against Senator Obama. It was her final opportunity, at least in the eyes of voters of Ohio and Texas, to erase questions on his criticisms of her of NAFTA and his health care mailing against her. So I think she did OK, but that one line that we just played, I think, will be playing over and over and over. I'm not sure that's good for her.

ROBERTS: In fact, he responded to her criticisms over those mailers on health care and NAFTA. She has been, I guess, trying to force him into some sort of an error here. I don't know if she got that last night. Here's how he responded to those attacks that were prompted by those mailers. Let's listen to that.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Senator Clinton has -- her campaign, at least -- has constantly sent out negative attacks on us, e-mail, robo calls, flyers, television ads, radio calls. And, you know, we haven't whined about it because I understand that's the nature of these campaigns.


ROBERTS: So he literally accused her there of whining about this. Did he make any missteps last night? Did he score the points that he needed to score?

ZELENY: I'm not sure that that's something that he wants to be talking about to voters either. I mean, he sounded to me like he was sort of whining about it when he was saying that. And look, I think the voters of Ohio, the ones I talked to, who are attending rallies and who don't have time to attend political rallies because they're trying to, you know, put food on the table and things, they are not interested in these process-type arguments. I was a little struck by how much Senator Obama and Clinton sort of devoted to campaign tactics at the beginning of this debate and throughout.

But look, I think he just had to remain on even keel. He did not make many mistakes throughout the debate. In fact, oftentimes he sat there and refused to be drawn into some of the things that Senator Clinton was trying to draw into. It was a striking change. The first debate was 10 months ago exactly, and how his performance had changed and the whole state of the race had changed.

ROBERTS: Well, in terms of tactics, everybody angling for advantage in this last week. Jeff Zeleny for us this morning. Jeff, thanks very much -- Kiran.

ZELENY: John, thanks.

CHETRY: Well, it's been a history-making week in North Korea. The isolated nation allowing reporters to cover the performance by the New York Philharmonic. It's the first major cultural visit by the U.S. since the Korean War, and our Alina Cho has been traveling through the country. She's gauging reaction to the American visit. She's also spending some time with her family in South Korea. She has some late-breaking developments overnight on the country's nuclear front. Alina live this morning for us in Pyongyang. Who knows how often we'll ever say that again. Alina, good morning.

ALINA CHO, CNN CORRESPONDENT: Good evening one final time from Pyongyang, Kiran, and here is the very latest. CNN did speak to the vice minister of Foreign Affairs today for North Korea today in Pyongyang. Vice Minister Kim told CNN that he does not believe the talks aimed at ending the nuclear standoff are at a standstill. Rather, he said North Korea's official position is one of action reaction, if you will.

He admitted that North Korea has slowed down the process of disarming its nuclear facilities, but he says that's because the U.S. has not held up its end of the bargain by taking North Korea off its list of state sponsors for terrorism. He also commented on last night's historic concert by the New York Philharmonic here in Pyongyang, really a remarkable evening. He said all you have to do is look out into the audience, see the applause, and you can really see the sincerity of the North Korean people.

I spoke with several members of the orchestra. Many of them quite emotional about it, including violinist Michelle Kim.


MICHELLE KIM, N.Y. PHILHARMONIC VIOLINIST: A lot of us actually stood out on the stage and just waved to them, and many people had tears in their eyes. And, of course, all of us were crying. The Korean-Americans were crying.


CHO: Now, the Philharmonic has already left Pyongyang. They were only on the ground here for about 48 hours. They're actually right now in Seoul, South Korea, where they'll be playing a companion concert tomorrow. Meanwhile, after about four days on the ground, I will be leaving Pyongyang tomorrow. Just a few personal items that I want to talk about, really has been a remarkable experience to be here in North Korea. It really literally is like no other place on earth.

Just imagine, very difficult for westerners to understand this, but average citizens do not have Internet access. They do not have access to cell phones. Just imagine a capital city with no traffic jams. That's what it's like here in Pyongyang. The roads are empty. Many of the shops are empty, but I'm happy to report that I found many of the people here to be exceedingly warm.

For instance, the elevator operator at the hotel told me more than once today, he really hopes that I can come back to Pyongyang. Even the government minder who is charged with watching my every move while I'm here told me that when I talked about my family struggles during the Korean War, he was really moved by that. And I certainly was touched by that, too -- Kiran.

CHETRY: Yes, it really is an amazing experience, personal journey for you, and very, very fascinating for us to get a glimpse at as well. Alina Cho live, as you said, for the last time, at least this go round in Pyongyang this morning, or night for you. Thanks, Alina.

ROBERTS: Well, amazing experience for her.

Ten minutes after the hour. Veronica de la Cruz here now with other stories new this morning. Good morning, Veronica.

VERONICA DE LA CRUZ, CNN CORRESPONDENT: Hey, good morning to you, John. Good morning, Kiran, and good morning to all of you out there.

The lights are back on in south Florida this morning after a power outage left much of the area in the dark. Some three million people were affected yesterday. Traffic lights are malfunctioning causing major congestion on the roads and forcing some shops to close. The state's largest electric company shut down a nuclear reactor near Miami for safety reasons. The cascading blackout was triggered by equipment failure and a fire. CNN's Rusty Dornin will have a live report from Miami coming up a little later this hour.

And they're cleaning up in Britain right now after a strong earthquake hit overnight. The 4.7 quake happened at around 1:00 a.m. Local time, shaking homes and buildings. It was centered in Lincolnshire, which is about 125 miles north of London on the east coast, and felt as far away as Scotland. One man was hurt when part of a chimney stack fell on top of him. Many people say they felt like they were dreaming because it hit while they were in their sleep.


UNIDENTIFIED MALE: The whole house shook. All the windows rattled. It seemed like it went on for ages and then -- and then stopped. And kind of walked out the front door just to see what was going on. And it was very strange, indeed. Very unusual.


DE LA CRUZ: This was Britain's biggest quake in 25 years.

New comments overnight from Secretary of State Condoleezza Rice about the recent arrest of a U.S. marine accused of sexually abusing a 14-year-old Japanese girl. Secretary Rice says the concern right now is to see that justice is done, and the case won't damage U.S. relations with Japan. The military placing a curfew on the 50,000 troops there. Locals say they are responsible for crime, noise and pollution.

Defense Secretary Robert Gates says Turkey has two weeks to get out of Iraq. Gates will meet with Turkish leaders later today. The U.S. has provided intelligence for the Turkish assault on Kurdish rebels in northern Iraq. Now the secretary says Turkey must respect Iraq's sovereignty.

And a surprise to tell you about on Capitol Hill. Senate Republicans have agreed to debate a Democratic bill that would cut Iraq war funding, but not because they agree with it. Republican leader Mitch McConnell says a debate would give his GOP colleagues the chance to talk about the military and political progress made over the last six months.

In the meantime, President Bush is threatening to veto an aggressive plan to change bankruptcy laws, giving more bargaining power to homeowners facing foreclosures. The White House disagrees with a provision allowing bankruptcy judges to modify the terms of mortgages. Democrats say the bill could prevent as many as 600,000 home foreclosures.

And Michael Jackson's Neverland Ranch could soon be headed for the chopping block. The 2,500-acre estate is set to be sold at a public auction. That is unless the singer can come up with the $24 million he still owes on the property. According to court documents, the auction not only includes the grounds but all of the furnishings, the appliances, even the rides.

And that is what is new this morning. I'm going to send it back to John and Kiran. The good thing is that he hasn't been living there. So --

It's the only good thing. And all the animals are gone.


ROBERTS: So what? -- that's good for -- that's good for whoever buys it or --?

DE LA CRUZ: Well, good for him. I mean, it's not like he's, you know, being kicked out of his house or anything. He's been living in Vegas. But just in case anybody's wondering, that auction takes place on March 19th. So --

ROBERTS: There you go. So if you're looking for a little, you know, compound or amusement park.



DE LA CRUZ: A merry-go-round, ferris wheel. ROBERTS: There you go.

CHETRY: Right. With no bad memories.

DE LA CRUZ: Yes, exactly.

CHETRY: Thanks a lot, Veronica.

You're watching the "Most News in the Morning." A daredevil pilot performing a flyby with lives in his hands and a potentially dangerous top gun stunt that cost him his job. That's a Boeing 737. Look at how close --


CHETRY: 777 -- even bigger. And look how close it is to the ground there. We're going to have more of these pictures and explain the story behind it coming up.

Also, caught on tape. A fight on a school bus. One person involved, the actual driver. Now there's charges filed. Did she go too far? We're going to ask legal analyst Sunny Hostin and hear a little bit of this scuffle that was all caught on tape.


CHETRY: All right. A look at your "Hot Shot" now. Like something out of "Top Gun?" Well, a British pilot suspended for pulling a stunt with a 230-pound ton Boeing 777. Officials said that he pulled off a flyby just 30 feet from the ground with his landing gear up. He made the low-level pass with 69 people on board including some Cathay Pacific Airlines VIPs. Everyone is believed to be OK.

And if you've got a "Hot Shot," send it to us. Head to our Web site and follow the "Hot Shot" link -- John.

ROBERTS: Some extreme weather now. More snow falling today in northern Indiana. This is the scene here in Fort. Wayne. Some areas are expected to get as much of a foot of lake-effect snow on top of the roughly nine inches that fell yesterday. And ice on the roads in Nebraska caused several car accidents. That same storm system also brought tornadoes to Alabama. Several twisters knocked down trees in the Birmingham area.

And we're on the extreme weather watch here in the northeast today. Rob Marciano here with the latest.


ROBERTS: I got to fly to Washington right now for the show today, so how extreme is this weather?

MARCIANO: You know, the winds -- that's the big deal out of La Guardia. It will be windy and chilly, but that's about it. I think most of the action has moved east and south. This is Florida. You mentioned those storms through Alabama and Georgia. They have now moved across southern Florida. This is where the cool front is, and we'll move ahead and show you. Once we get through this rough weather, temperatures are going to drop.

We have freeze warnings out for northern Florida. Wind chill advisories for Disneyland and points south where temperatures will feel like in the mid-20s once this front goes through, and that one will include a wind chill watch for parts of south beach.

Further to the north, we have winter storm watches and warnings that are posted for northern New England, upstate New York. We've already seen upwards of a foot in upstate New York. We could see another four to eight inches as this storm continues to push off towards the east. A lot of cold air behind that storm, as you can imagine. Now, we've got lake-effect snow. We also have some snow flurries and showers mostly north of the I-95 corridor.

One other note, down across the southeast, reports of a dusting of snow in the Atlanta area. Temperatures obviously cold enough to support that, and we're seeing some showers and snow showers across the Blue Mountains northward in through the Appalachians as well. So winter, John, just doesn't want to give up for just about everybody.

ROBERTS: Well, it's still only February. We had all those travel delays yesterday in Atlanta and Chicago. In terms of delays in the northeast corridor today and those winds, what are we talking about?

MARCIANO: You'll probably see some delays out of Boston, out of La Guardia. Just the higher volume airports, whenever you get those strong, especially crosswinds.

ROBERTS: How strong will it be?

MARCIANO: Could be 20 or 30 miles an hour time. It won't really die down until tonight, so bundle up on the way to the airport.

ROBERTS: Maybe a train day today. OK, Rob, thanks very much.



CHETRY: Well, a passenger's bill of rights for air travel. How close is it to a reality? Congress is going to get an update this morning on airlines progress. The story next.

Coming up on AMERICAN MORNING, a driver and student caught on tape in a school bus brawl. Hair pulling, name calling, and the driver's daughter rushing to help her mom.


ERIN SULLIVAN, KIM SULLIVAN'S DAUGHTER: Get the [bleep] off my mom [bleep].

(END VIDEO CLIP) CHETRY: More of the tape and what set it off. And what's the punishment ahead on AMERICAN MORNING.


CHETRY: A lot of questions this morning about what kind of action school bus drivers are allowed to take to deal with rowdy students. There was a big bus brawl that made national headlines last week. The whole incident captured on surveillance tape. Police in Arizona just releasing the 911 tape of the incident, but does it tell the whole story?


CHETRY (voice-over): It starts out as a normal ride home from school until bus driver Kim Sullivan apparently gets angry that students are talking on their cell phones. So she pulls the bus over.

KIM SULLIVAN, BUS DRIVER: Just be quiet and behave yourselves so we can make it home.

CHETRY: Then things got ugly between Sullivan and a 15-year-old student on the bus, Sammy Taylor.

SAMANTHA TAYLOR, STUDENT: Seriously, I'm getting off the bus.

K. SULLIVAN: No, you're not.

TAYLOR: Don't touch me. Stop touching me. Stop touching me!

CHETRY: And then, from the back of the bus, another student comes to Sullivan's aid. That student is the bus driver's 16-year old daughter.

ERIN SULLIVAN, KIM SULLIVAN'S DAUGHTER: Get the [bleep] off my mom [bleep]!

CHETRY: Chaos follows.

UNIDENTIFIED FEMALE: Get off me! Get off!

CHETRY: Students on the bus escape through the emergency exit, and one even calls 911.

TEEN: Our bus driver is insane. She just got in a fistfight. I'm getting off the bus. I'm not dealing with this.

CHETRY: Police want charges filed against everyone involved. Sammy Taylor says she never touched the bus driver and is embarrassed by the incident, admitting she made a mistake.

TAYLOR: I acted really immature on the video, and if I could go back, I would just -- I would have just sat down and shut up.

CHETRY: But her mother says she didn't do anything illegal and points the blame at the bus driver. UNIDENTIFIED FEMALE, SAMMY TAYLOR'S MOTHER: If you watched the video, she backs herself back underneath the video, and now you can't hear or see her. You only see Samantha responding to her.

CHETRY: School officials stand by the driver's actions.

UNIDENTIFIED FEMALE: The bus driver continued to enforce the policy, which is this is not a designated stop, and you need to stay on the bus.

CHETRY: Police want disorderly conduct charges filed against the girls and aggravated assault charges against the driver. Now it's up to the district attorney.


CHETRY: So the question today, did the bus driver go too far? And what about the charges against these kids that could possibly be filed? We bring in AMERICAN MORNING legal analyst, Sunny Hostin.

First of all, you had a chance to see the tape and look into this a little bit. Is the bus driver, who has been charged, as we said, with aggravated -- what is it?


CHETRY: Aggravated assault and intentionally touching a child 15 and under, some disorderly conduct as well according to police. What did you think by seeing the tape?

HOSTIN: You know, once you start touching someone, you're automatically in sort of assault territory. Assault is an offensive touching. And a bus driver certainly has to keep control of the bus. My understanding is that the child -- and she is a child, but remember, because she's only 15 -- was on the phone, talking on the phone, being somewhat belligerent, being a classic -- the belligerent teenager. She could have just allowed her to exit the bus or keep the doors closed. You've got to be careful because then she could have been looking at something like false imprisonment. But when she escalated by touching, that was when she had the problem.

CHETRY: Yes. So -- it sounds like she can't win in either instance. She's going to get in trouble with the district if she let somebody off at an unauthorized stop.


CHETRY: She's going to get in trouble if she keeps the doors closed possibly because she's keeping someone against their will. I mean, what does the bus driver supposed to do in that situation?

HOSTIN: I think this was a very difficult call, Kiran, and you're absolutely right. The school bus guidelines are that she can't let this kid off of an authorized bus. She's got to keep control and maintain control of the bus because she could have complete chaos on the bus, but at the same time, she can't assault someone. So this was a very close call for her. But, again, when you see her pushing her, pushing her, I think that's when she crossed the line.

CHETRY: What about the kids? Because the girl involved as well as the daughter of the bus driver who pulled the hair of the girl, both of them are, I guess, possibly, according to police, facing some disorderly conduct.

HOSTIN: Disorderly conduct and aggravated assault for Samantha, the one that had the altercation with the bus driver. This is not a great thing for them because we hope that they'll want to go to college. They want to have a life beyond this bus incident, beyond high school. And when you're looking at criminal charges no matter if you're looking at time, you're still looking at your record being sort of blackened by this.

And so bottom line is not good for the kids, not good for the bus driver, but everyone crossed the line here, the legal line.

CHETRY: We'll see what the D.A. decides. Sunny, thank you.

HOSTIN: Thank you.


ROBERTS: Congress will have a report in just a few hours time on the proposed airline passengers' bill of rights. It's expected to say that airlines are not making progress, and passengers continue to find themselves stuck on the tarmac for hours. The planned bill of rights would eliminate long delays and provide essentials to stranded passengers. It has already passed the House, but it's still stuck on the tarmac in the Senate.

And that brings us to this morning's "Quick Vote" question. Do you think it's time for the Senate to pass a passengers' bill of rights? Do you think (A) It's long overdue. (B) It won't make a difference, or it's not necessary at all?

Cast your vote at We'll have the first tally of votes coming up later on this hour. And coming up later in our third hour here on AMERICAN MORNING, we'll speak with Kate Hanni (ph). She is the founder and president of the Coalition for a Passengers' bill of rights. She'll be delivering that report to Congress this morning, and she joins us live in our 8:30 Eastern half hour.

Well, first, he went off on Barack Obama, calling him a hack politician and repeatedly using Obama's middle name, Hussein. Now conservative radio host Bill Cunningham is taking aim at John McCain.


BILL CUNNINGHAM, CONSERVATIVE RADIO HOST: I've had enough to hear with John McCain. He's off the list. I'm joining Ann Coulter in supporting Hillary Rodham Clinton.

(END VIDEO CLIP) ROBERTS: We'll have more of my conversation with Bill Cunningham and why he feels McCain has done him wrong.

And can you judge a kid by his Mohawk? Well, one school did. How a 6-year-old's hairdo got him sent home. That story in today's headlines when AMERICAN MORNING returns.


KIRAN CHETRY, CNN ANCHOR: Welcome back to AMERICAN MORNING. A shot this morning outside of our CNN studios right here at the Time Warner Center. A shot of Columbus Circle this morning. 38 degrees. Feels like 30, though, right now. Cloudy. It's only shaping up to be about one degree warmer, for a high today, 39 in New York.

JOHN ROBERTS, CNN ANCHOR: And as Rob said pretty high winds today. So it may cause some delays at the airport.

Hillary Clinton and Barack Obama return to the campaign trail today after their debate last night in Cleveland. It was their final face-to-face meeting before the crucial primaries next Tuesday. The debate was contentious. The candidates sparring over health care, free trade, and negative campaigning. And on Iraq, they debated whether experience makes one more qualified than the other.


SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: On the most important foreign policy decision that we face in a generation, whether or not to go into Iraq. I was very clear as to why we should not. That it would fan the flames of anti-American sentiment, that it would distract us from Afghanistan, that it would cost us billions of dollars, thousands of lives and would not make us more safe. And I do not believe it has made us more safe.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Senator Obama rightly points to the speech he gave in 2002. He's to be commended for having given the speech. Many people gave speeches against the war then. And the fair comparison is he didn't have responsibility. He didn't have to vote. By 2004, he was saying that he basically agreed with the way George Bush was conducting the war. And when he came to the Senate, he and I have voted exactly the same.


ROBERTS: Health care, as we mentioned, was a prime focus last night. Clinton blasted mailings from the Obama campaign that say -- that she says misrepresent her position. Both agree that Americans need affordable health care, but they disagree on who has the better plan and how to get it done.


CLINTON: If everyone's not in the system, we will continue to let the insurance companies do what's called cherry picking. Pick those who get insurance and leave others out. We will continue to have a hidden tax so that when someone goes to the emergency room without insurance, 15 million or however many, that amount of money that will be used to take care of that person will be then spread among all the rest of us.

OBAMA: The main difference between Senator Clinton's plan and mine is the fact that she would force, in some fashion, individuals to purchase health care. If it was not affordable, she would still presumably force them to have it unless there is a hardship exemption as they've done in Massachusetts, which leaves 20 percent of the uninsured out.


ROBERTS: To give you some perspective on how important the two believe that the issue is, they spent the first 16 minutes of last night's debate going back and forth on health care.

And of course, voters will go to the polls on March the 4th in four states, Ohio, Texas, Rhode Island, and Vermont.


CHETRY: Well, there are some fresh concerns this morning about your money. Oil hitting a new high in electronic trading overnight, surpassing a $102 a barrel at one point. And now analysts are talking about the possibility of $4 a gallon gas sometime down the road.

There are also soaring wheat prices. Those of it at an all-time high as well. And inflation grew at the fastest pace in 16 years last month, according to the new numbers out. All of this sent the dollar to a record low against the euro this morning. Our senior business correspondent Ali Velshi is covering all of it for us. He's aboard the Election Express talking with voters from Goliad, Texas this morning.

And you spoke yesterday also when you were in Laredo about just how much a lot of those truckers, you know, need to use gas on a daily basis and how much of a hit they've taken because of the rising prices -- $4 a gallon?

ALI VELSHI, CNN CORRESPONDENT: Yes and you know, the truckers use diesel, Kiran, which has gone up to about $3.50 a gallon. Here in South Texas, those are the major industries. You got truck driving. The truck is going into and out of Mexico. You've got oil and you've got ranching.

Now, in this area around here, the oil is making some people money, but the ranchers have to use their equipment on the farms. Those farms, in many cases, which grow the food that we eat. The diesel that they use to power their equipment is called red diesel. There's a red dyed because it's tax exempt. So the taxes are on that diesel. But the price of the commodity continues to go up. I spoke to some people in Goliad about how that affects them. Listen to what they told me.

(BEGIN VIDEO CLIP) JIM HARPERING, TEXAS RANCHER: Red diesel is a diesel that has a red dye in it that's used strictly from farm and ranching uses, as far as in tractors and different conveniences on the ranches. And when it goes up at the cost, it's going up every day. That definitely has a domino effect for all the products it produces. Be it cattle, grain, any of the other byproducts from those resources.

HILARY HAYES, TEXAS SHOPOWNER: Now it's affecting the prices. We're fixing to go up on prices because of cost of gas. It's causing our delivery costs to go up. So we're having to raise all of our prices on that and it's really affecting that in our business. We're seeing less people coming in. On the weekends, it's been slower. So, none of us are making as much money as we were.


VELSHI: That young woman, Hilary, her parents own a restaurant here right on the Town Square in Goliad. Goliad is a place where about 2,000 people live in the city. Another 2,000 in the surrounding area. But what they depend on is people coming into this town, making day trips from the Gulf of Mexico cities. They're from other places. They depend on tourism. Hilary is about two weeks shy of her 18th birthday. So she won't be voting next Tuesday but she will be voting in this election. And she's very conscious of the effect that inflation is having on her parents' business, a local restaurant.

Everybody around here is feeling it. Those people directly involved in the production of oil are feeling some kind of a boom, but everybody else is like the rest of the country. They feel high gas prices. They feel it going into the price of food they buy, and that's what's hitting Americans across the country today.


CHETRY: All right. And you know, the question remains just how much of an impact can anything the Fed does today or, you know, in the future really have on the current situation. I mean, all they can do is lower rates.

VELSHI: They can. The problem that you've been hearing about this for a few weeks is that the Fed lowers rates and that causes economic growth. But at the same time, you've got inflation. When you've got slow growth and inflation, it's something called stagflation. It's a very bad place for the economy to be in.

Ben Bernanke is testifying before a Congressional committee today. He's going to get some tough questions and we'll keep an eye on what he says, Kiran.

CHETRY: Gerri Willis is also going to be hitting up what you said today as well. Stagflation and how it affects the economy and can impact your pocketbook. Ali Velshi, great to see you. Thanks.

ROBERTS: Coming up now at 38 minutes after the hour. The lights are back on this morning for most of those hit by a massive power outage in Florida. But power executives are still in the dark about how a glitch at a substation triggered the widespread outage.

Some three million customers were affected by the daytime nightmare. It knocked out traffic lights and left people all over South Florida in the dark. CNN's Rusty Dornin is live in Miami.

Boy, we said that they haven't figured out how this all happened, Rusty, but do they got any interesting leads?

RUSTY DORNIN, CNN CORRESPONDENT: Well, John, they now. This is the substation where it happens. They know two separate events happen. One was a small fire and another was a disconnector switch failed. Now, those two things in and of themselves were not enough to trigger this giant outage. But for some unknown reason, it did, and that definitely has power officials scratching their heads.


DORNIN (voice-over): Mass confusion in the sunshine state as the power went out for as many as three million customers, right in the middle of the day.

UNIDENTIFIED MALE: Normal day and the power went out. We thought maybe it was going to go on quickly.

DORNIN: The power outage snarled traffic and shut down electricity and businesses and homes from Tampa to the Florida Keys.

UNIDENTIFIED MALE: You can't ring up customers. We can't do coffee. We can't slice anything in the meat department, delis. So, pretty much we were stuck doing nothing.

DORNIN: So what went wrong? Investigators say it was a pretty big coincidence. A failed switch and an unrelated fire happening at the same time at the same electrical substation outside Miami triggered the whole thing.

But the question is, why couldn't the substation handle it? The outage triggered the shutdown of two nuclear reactors at the Turkey Point nuclear power plant outside Miami.

MAYOR CARLOS ALVARES, MIAMI-DADE: There are sensors going into that nuclear power plant that when in. It notices a disruption of electrical power outside that disruption. It shuts itself down for safety reasons.


DORNIN: And those two reactors, John, end up going on what they call hot standby. They should be back online, they say, within 12, 24 hours. We've got calls into the power company about whether they're back online or not. But still, lots of questions about why this happened. They're very puzzled as to what caused this disconnector switch to fail and why there weren't any protective devices that are supposed to isolate these things and stop them from spreading through the grid. ROBERTS: Well, obviously, they have discovered a big glitch in the system, one that urgently needs addressing. Rusty Dornin for us this morning in South Florida. Rusty, thanks.


CHETRY: Well, The school board decides to kick a kid out of kindergarten. Why? Well, they say that hairdo right there is just too distracting. Can they do that? We're going to talk about it coming up.

Also, something is in the air and it ain't good. Rob Marciano takes us to a weather lab high in the skies to see how pollution from China is actually making its way all the way here. And what they're planning to do about it. Next on AMERICAN MORNING.


ROBERTS: Well, come on inside to the Election Center, which also doubles as the AMERICAN MORNING home. It's 43 minutes, almost 44 after the hour. Welcome back to the most news in the morning.

A mother in Ohio is changing her 6-year-old school because she refuses to change his haircut. The school board decided to suspend him because he has a little Mohawk there. Cute little Mohawk. And they say it's a distraction to other students. His mom points out that he wears his hair flat for school, not spiked up like he does when he cuts loose and goes out after the school day is over.

Yes, you should see him when he hits the clubs.

About 20 Colombian police officers who lost limbs fighting the country's FARC rebels making quite a journey. They traveled in their wheelchairs, about 250 miles from (INAUDIBLE) to Bogota. Once in the capital, they demanded the release of hundreds of hostages kidnapped by the leftist guerrillas.

And an aerial assault on wildfires in West Texas. The forest service called in a Blackhawk to help stop the flames. Evacuate residents now heading home. Fires have burned about a quarter million acres in West Texas since Monday.

You liked that Mohawk story, huh?

CHETRY: Yes, I love it. Too bad I have a daughter. Wouldn't play as well in kindergarten.

ROBERTS: Put her in a Mohawk too. Why not?

ROB MARCIANO, CNN METEOROLOGIST: She'll be in the club soon.

CHETRY: Well, China is announcing some new measures this morning to cut down on pollution ahead of the Olympic Games there. In fact, the U.S. Olympic Committee repeatedly expressing concerns about the air quality which is horrible around Beijing and in Beijing. And today, the Chinese government has ordered factories to cut back on operations and use more technology to clean emissions, to clear the air before the games begin.

Well, today we're taking a dramatic look at just how that pollution not only affects the area around China, but makes its way all the way here. Our Rob Marciano is here with more details on that.

MARCIANO: Well, Kiran, you know, we know that weather here in the U.S. travels mostly from west to east. But storms, you know, they typically change. They transform as they move across the globe. But toxins in the atmosphere can travel thousands of miles high in the sky. And you won't believe just how far from the source scientists can find it.


MARCIANO (voice-over): Power plants in Asia. Burning coal, under fire from the rest of the world. Pumping out pollution linked to global warming or health problems like asthma. The air from China is closer than you think.

ANNA GANNET HALLAR, DIRECTOR, STORM PEAK LAB: You have large dust storms in Asia. And those dust storms loft air. And with that lofting of air, they collect industrial pollutants. Those industrial pollutants travel across the Pacific. When the dust storms are very large, you can actually see them with satellite imagery.

MARCIANO: And while those dirty clouds seem to dissipate as they move towards the U.S., the pollution is still there. Which brings us to this unique weather lab in the Colorado Rockies.

(on camera): Well, here we are. High atop Mount Werner. Elevation 10,500 feet. The only way to get here is to ski, snowmobile, or climb. But I'm already out of breath, so I'm glad we didn't climb.

(voice-over): This is the Storm Peak Lab. It's the highest weather lab in the United States.

(on camera): Which probably the most startling discovery made here is that they found that pollution, coming all the way over from China, can be measured right here on this mountain.

(voice-over): At one of the few laboratories in the world that are actually up in the clouds, Storm Peak scientists look at the size, shape and chemistry of cloud particles. So what's blowing in the wind from China? They say mercury.

IAN MCCUBBIN, STORM PEAK LAB RESEARCHER: There's more and more coal-fired power plants going online in China every day. And the type of coal that they use has high mercury concentration in it. The fact that we could see mercury coming all the way from China here in the Rocky Mountains means that it's being transported around the globe over and over again.


MARCIANO: And a new Federal study just out today found that contaminants including pesticides and heavy metals are in our national parks. Sometimes at dangerously high levels in the lakes, plants and fish. There are some scientists that say that some male fish are getting female organs because of all these contaminants.

CHETRY: Oh, great.

MARCIANO: I saw you cringe when you hear that word. I know, that's a big deal for us.

CHETRY: Well, it's just amazing that what another country does, that we really have no control over, can have that type of impact. Are they also talking about -- when you talk about those pollutants in some of those lakes, is that also from China?

MARCIANO: Well, we don't know that for sure. And another study they're going to do on top of Mount Werner, on top of that Storm Peak Lab, is they're going to try to figure out and nail down what U.S., you know, pollutants are doing to our atmosphere. One thing is for sure, though, we are certainly all connected in this global world of weather.

CHETRY: Absolutely. Very fascinating. Why were you out of breath, by the way? You had been skiing down the hill many times?

MARCIANO: Because I had to climb up about 20 feet to ski down into that shot. And I'm way up. That was my third or fourth take.

CHETRY: Well, it was a very neat perspective up there. Thanks a lot, Rob.


ROBERTS: Traveling heavy could be hazardous to your wallet, ahead. Which airline is getting ready to slap its passengers with extra baggage fees and how much that could end up costing you?

And a conservative talk show host is fighting mad at John McCain after the Republican denounced his verbal assault on Barack Obama at a McCain rally yesterday. We'll hear why Bill Cunningham is now turning the heat up on McCain. Ahead on AMERICAN MORNING.


CHETRY: Welcome back to AMERICAN MORNING. About ten minutes before 7:00 here on the East Coast this morning.

An alarming statistic just coming in. It's making headlines this morning. The World Health Organization saying that the rate of drug- resistant tuberculosis now reaching record levels. The W.H.O. says the highest rate of the potentially fatal disease was in Azerbaijan with more than 22 percent immune to treatment. High rates also found in China as well as Inner Mongolia. The organization blaming the rise on the lack of drugs, patient monitoring, and laboratories working on the disease.

Today, the Supreme Court takes up the final lawsuit lingering from the Exxon Valdez disaster 19 years ago. It's a case that could test the limits of punitive damages. Exxon is asking the High Court to do away with the $2.5 billion judgment it was awarded to pay fishermen and native Alaskans. The oil giant argues it's already spent billions on cleanup and contends that maritime law does not allow for punitive damages.

Well, if you fly U.S. Airways, you may want to leave the extra baggage at home because starting May 5th, the airline is going to be charging an extra $25 for a second checked-in bag and 100 bucks for a third one. U.S. Airways expects the fees will bring in $75 million a year. United Airlines also announced baggage fees -- extra baggage fees, three weeks ago.

ROBERTS: A war of words is brewing in the Republican camp this morning over John McCain's warm-up act. A radio talk show host was invited to warm up the crowd at a McCain rally. He was blasted for attacking Barack Obama, but now the host has turned his fire on McCain. And it is getting ugly. I talked with him last night on CNN's Election Center.


BILL CUNNINGHAM, RADIO HOST: John McCain threw me under the bus, under the "Straight Talk Express."

ROBERTS (voice-over): Hours after serving his warm-up act in Cincinnati, radio talk show host Bill Cunningham had some decidedly cold words for the Republican frontrunner for president.

CUNNINGHAM: I've had enough to hear with John McCain. He's off the list. I'm joining Ann Coulter in supporting Hillary Rodham Clinton.

ROBERTS: Cunningham says he was just doing what the campaign asked him to do. Fire up the conservative crowd by tossing out some, in Cunningham's words, red meat. And he delivered a feast, taking aim at Senator Barack Obama.

CUNNINGHAM: Well, my fellow Americans, now we have a hack, Chicago-style Daley politician who's picturing himself as change. Peel the bark off Barack Hussein Obama. That day will come. Then you'll know the truth about his business dealings with Rezko when he got sweetheart deals in Chicago.

ROBERTS: But after McCain immediately denounced him --

JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I will take responsibility and I apologize for it.

ROBERTS: The local radio legend turned his sights on the Republican senator and fired away.

CUNNINGHAM: I, for one, regret that John McCain is the nominee of the conservative party because John McCain is not a conservative. He ought to be attacking Obama politically and not attacking Bill Cunningham, Rush Limbaugh and Sean Hannity who's saying Obama --

ROBERTS: Cunningham stood by his repeated use of Obama's middle name, Hussein.

CUNNINGHAM: His name is proudly Barack Hussein Obama, and people that object to that, they're the racists.

ROBERTS: And despite denials from Senator McCain, Cunningham insisted he and the senator knew each other.

CUNNINGHAM: I met him twice. His people called me specifically. His people said you're the guy we want because you've met John.


ROBERTS: Well, aides to Senator McCain say he has no memory of meeting Cunningham but they added it's possible that McCain said hello or exchanged small talk with Cunningham at a fundraiser and just doesn't remember it. But an awful lot of heat there on the campaign trail yesterday.

CHETRY: How about it?

ROBERTS: Cunningham was on fire last night when he joined me on the program.

CHETRY: Yes, I was watching some of it. And it made you do a double take.

ROBERTS: Well, you know, he's considered to be the Rush Limbaugh of Ohio, so he's not about to give up easily.

CHETRY: That's right. All right. Well, using John McCain's own "Straight Talk Express" against him. That he got thrown under.

ROBERTS: Through bus, thrown under his "Straight Talk Express."

CHETRY: Well, there are some new details breaking this morning in the North Korean nuclear standoff. Our Alina Cho, live in Pyongyang, where the progress is being reported. At least some, in the disarmament process. We're going to be getting a live update from Alina at the top of the hour.

And medication often used to treat depression in teens. What if it doesn't work? Our Dr. Sanjay Gupta talking about new treatment methods and why teens, where the actual structure of the brain may be different. Ahead on AMERICAN MORNING.


ROBERTS: Money crunch. The dollar sinks. Food and fuel prices soar. Does the Fed have a fix?

Cleveland clash. Clinton and Obama call each other out. (BEGIN VIDEO CLIP)

BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Senator Clinton, I think, equates experience with longevity in Washington.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Maybe we should ask Barack if he's comfortable and needs another pillow.


ROBERTS: Who turned the negatives into a positive?

Inside North Korea. New life, but an unsure future. Inside the only maternity ward in Pyongyang, on this AMERICAN MORNING.

Amazing stuff. More of Alina Cho's trip to North Korea. Very emotional experience for her, considering that a couple of her relatives still missing from the Korean War 50 years ago.

CHETRY: Yes. Once in a lifetime opportunity for her to go there and see if she could hear from them. So, we're going to hear from her this morning. Welcome once again. The news that over here, unfortunately is the possibility that we could be paying $4 for gas some time in the near future.