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Oil Surge; Gas Price Record; Dangerous Drugs: New Restrictions for Anemia Drugs; Do-Over Primary Proposal in Florida: Mail-in Ballots; Rumor Mill: Students Hurt by Juicy Campus Web Site

Aired March 14, 2008 - 07:00   ET


JOHN ROBERTS, CNN ANCHOR: And in that delegate fight, Florida apparently still having problems. A lot of people don't like this idea of a mail-in vote, but Michigan may be getting closer.
KIRAN CHETRY, CNN ANCHOR: That's right. Michigan could make the call soon. They're -- they've convened a blue ribbon panel, and they're discussing options.

ROBERTS: A blue ribbon panel that's blue in the face from all of the discussions over the past week.

CHETRY: Exactly. So maybe they'll be able to work something out. Looks like, as you said, a little more likely perhaps in Florida of coming to an agreement any sometime soon. We'll be following that for you.

And we also have breaking news this morning of gas prices cracking yet another record. Oil also climbing, and a drop in the U.S. dollar. Overnight, AAA released a new number for the national average for a gallon of gas. Now, $3.28.

The price of oil on a record climb as well, all week as we've seen it. It settled over $110 a barrel Thursday. And we have a snap shot of gas prices from across the country. Take a look at New York City.

Regular unleaded going for $3.49 a gallon at the Synagogue (ph) Station. Ann Arbor, Michigan, regular going for $3.39 a gallon there. And in Dallas, Texas, regular unleaded at $3.19 a gallon.

We're listening to Americans who've told us this election season that the economy is the number one issue. CNN's money team is covering every angle to help us make sense of these new records and some of the other elements that have been playing into what's been going on with the economy, including foreclosures, inflation, among other things, and what it all means for you.

We begin with Ali Velshi, and the news about the high gas prices which, you know, we've talked about for the past week. When are we going to see this jump because we've seen oil trading so much higher over the past week as well?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Right. And the jump in gas prices actually got a bit of a lag. So what the $3.28 that you're seeing today, isn't reflective of yesterday's $111, which oil hit. It's actually still lagging from a few days ago. The issue here isn't just gas prices. Obviously, it is, because that takes a chunk out of your wallet. It's more money that you're paying for exactly the same product that you were buying a year ago or so.

The issue here is that oil prices work their way into everything else, so it is inflation. It is the idea that your wages are not keeping up with the increase in energy prices, nor are your stock market investments, your retirement portfolio. So it's a bit of a problem.

Now, the other problem, of course, is the dollar that is sinking against major currencies, and there is a correlation between the two. As the dollar gets cheaper, you can see that represented with that red line. As the dollar has been sinking since last year, look at how the price of oil has increased. And that's because oil, no matter where you are in the world, is priced and paid for in U.S. dollars.

Now, the U.S. only produces about seven percent of the world's oil, so all those other countries, whether it be Mexico or Canada or Russia or Saudi Arabia, they get dollars for their oil. Well, those dollars aren't worth as much if they want to spend them somewhere else. So the only way to make up for the money that they're losing because of the dollar is to somehow get more money for the actual product, more dollars for each barrel of oil.

Now, no one country controls the price of oil, but countries like OPEC, organizations like OPEC, which have 14 member countries, control about 42 percent of all the oil in the world. So they can control the price a little bit by not putting more oil out there. That's what they did last week. So that's what you're seeing.

Take a look at what the U.S. dollar is doing. It's actually not at the weakest point it's been at in the last week or so, but this is pretty weak.

$1.56 to buy a euro. Think about $1.57 or so was the worst it's been. $2.03 to buy a pound. $1.02 to buy a Canadian dollar. Gold also, which tends to go up as a hedge against inflation, hitting $1,000 an ounce yesterday. So that's another indication that we've got inflation underway.

We're going to have a Federal Reserve meeting on Tuesday. We are widely expected to see a cut, again, in interest rates of half a percentage point. So that's what we're looking at right now on the oil, gas, oil -- oil, gas, dollar interest rate inflation front. Not a great morning.

ROBERTS: All right. Ali, thanks very much.


ROBERTS: President Bush is going to be talking about the number one issue for Americans, the economy, in a speech that will take place in New York today. His deputy press secretary tells CNN the president will say that the economy is headed toward a period of slow growth and that he has a plan to turn it around. Meantime, overnight, Congress agrees in a $3 trillion budget plan for 2009. The Senate voted to roll back most of President Bush's tax cuts, keeping some for low and middle income families, though. The presidential candidates were on hand to vote. They traded jabs as well. Senator Barack Obama took Senator John McCain to task for reversing his stance on the tax cuts once he became a presidential candidate. McCain was initially against them. Now, he's for them.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: He made a decision to reverse himself on that. That was how I guess you got your ticket punched to be the Republican nominee. But he was right then, and he is wrong now.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: And particularly at this time of economic challenges, he wants to raise their taxes and take more of your income. We'll have that debate. I'll look forward to it.


ROBERTS: The Senate also soundly defeated a bill to ban earmarks for a year. Obama, McCain, and Hillary Clinton were among the few who voted for the ban. Earmarks are funds that members of Congress tack on to bills for projects in their home districts. John McCain is firmly against all earmarks and challenged his opponents to reveal how much they have requested.

Now, Obama released his earmarks, $740 million in spending requests, including $1 million for a hospital where his wife, Michelle, works. The Obama camp is pressing the Clinton campaign to release its earmark requests. But you can find all of that, by the way, on a fabulous Web site, They've got all that stuff there as well as taxpayers for common sense.

Later today, the House is expected to vote on a measure backed by Democrats to overhaul the Foreign Intelligence Surveillance Act, which is better known as FISA. President Bush is threatening to veto because the proposal doesn't provide immunity to telecommunications companies who participated in the government's wiretapping program. Last night, House Republicans succeeded in delaying the vote by a day because of a request to meet in secret to discuss the measure.

And our Veronica De La Cruz here now with other stories new this morning. Good morning to you.

VERONICA DE LA CRUZ, CNN INTERNET CORRESPONDENT: Good morning to you, John, Kiran. Good morning to you, Ali, as well. And good morning to all of you out there.

Federal prosecutors looking at whether Eliot Spitzer used campaign funds in any of his visits with escorts. According to "The "New York Times," the Feds are focusing on hotel and travel arrangements for three trips Spitzer made over the past several months for three trips Spitzer made over the past several months, including his rendezvous at the Mayflower Hotel in Washington the night before Valentine's Day. If campaign money was involved, it could open the door for a criminal case against Spitzer because it is illegal for politicians to use campaign money for personal expenses. And according to "The Times," lawyers for Spitzer met with prosecutors yesterday.

And early this morning, two astronauts completed a spacewalk. It was the first spacewalk of Endeavour's space station mission. They started building a giant robot, despite the problem of getting power to it. NASA is confident it can fix the problem. Four other spacewalks are planned over the next two weeks. Two of them focused on assembling that robot.

And the IRS has released this year's list of the biggest scams, and phishing is at the top. The Internet-based scam is designed to trick people into revealing confidential information like pass words or account numbers usually on fake Web sites made to look legit. The IRS also says scammers are posing as IRS employees who ask for personal information before giving out this year's tax rebates. Already this year, 33,000 phishing scam e-mails have been forwarded to the IRS.

And one of the most popular stories on this morning. Forget computers because some of your favorite tech gadgets from iPods to GPS navigation systems could be infected with a virus. An "Associated Press" review says in most cases, shoddy quality checks in Chinese factories are to blame as opposed to an organized effort by hackers. Experts say the best way to protect yourself is to get up- to-date anti-virus software.

And that is what is new this morning. I'm going to send it back to John and Kiran. So it's not just your computers, it's your cell phones, it's your iPod. Everything.

ROBERTS: Everything is sick these days.

DE LA CRUZ: Everything is sick these days.

CHETRY: What are we going to do?

CHETRY: I love it. I mean, a lot of those virus programs, they do auto updates if you pay for the service.

DE LA CRUZ: Not all of them, though.


CHETRY: Oh, I hope. It claims it's doing it.

ROBERTS: It better.

DE LA CRUZ: Always check their updates, for sure.

CHETRY: Thanks, Veronica.

ROBERTS: You don't want to cross her when she's spending money on something.

CHETRY: Well, an FDA panel calling for new restrictions on anemia fighting drugs for cancer patients. You may have seen the ads for one of the drugs, in particular, Procrit. The FDA panel says that that drug and another might actually speed the growth of tumors.

Our Elizabeth Cohen is at the medical update desk right now with more on this. You see those commercials, and they talk about trying to help supplement. You know, if you are feeling weak or anemic because of the treatment that you're getting, that these drugs can help. What are they finding now?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: What they're finding now is that these drugs do indeed help a lot of people, Kiran. They help anemic cancer patients who feel horrible feel much better. They don't have to go to the hospital to get blood transfusions, so that's on the one hand. But on the other hand, as you mentioned, other studies are showing that, yes, that may be true but that these drugs may also cause tumors to grow bigger, cancer tumors to grow bigger, and they actually hasten death.

So an FDA panel met yesterday and said, all right, well, what we do here? And here's basically the middle ground that they decided on. They didn't take these drugs off the market, but what they did is they're saying there needs to be a warning that says, don't use these drugs for breast, head and neck cancers. That's where they appear to be the most problematic. And also, only use these drugs for incurable cancers, because that's where people are more willing to take the risk.

Now, Kiran, these warnings are in addition to warnings that are already on these drugs, telling patients to take them at the lowest doses because of a risk of heart attacks and strokes and blood clots -- Kiran.

CHETRY: It seems like those warnings are pretty strongly worded. If you are taking one of these drugs right now, should you be talking to your doctor, or should you just stop taking them?

COHEN: Oh, no. You definitely want to talk to your doctor. I mean, a doctor injects these drugs. And these are people who are very sick, who are taking these drugs. You want to go to your doctor and say, you know what, these drugs have a positive side, and it appears that they also have a minus side, and what should we do in my particular situation. Every patient is different.

CHETRY: What about the other things they found that are causing concern?

COHEN: Right. The other things they found that are causing concerns is that sometimes when people take these drugs at high doses, they have a higher chance of having a heart attack or a stroke or a blood clot. So that's another thing that patients and doctors need to keep in mind.

CHETRY: All right. Elizabeth Cohen for us this morning. Thanks.

COHEN: Thanks.

ROBERTS: Ten minutes after the hour. Florida is scrambling to come up with a solution to its primary problem. We'll tell you what the latest proposal is, and we'll talk with the woman behind the new plan. That's straight ahead on AMERICAN MORNING.



UNIDENTIFIED MALE: The stuff that's being said is absolutely horrible.


CHETRY: The Web site where gossip isn't just juicy. It can be down right cruel.


SUNNY HOSTIN, AMERICAN MORNING LEGAL ANALYST: They're calling you racist. They're calling you ugly. They're calling you overrated.


CHETRY: Legal analyst Sunny Hostin with a student who says it ruined her life. Can she sue? Ahead on AMERICAN MORNING.


ROBERTS: Coming up now at 14 minutes after the hour. Welcome back to the "Most Politics in the Morning." Michigan appears to be closing in on a redo primary plan, and we're getting some details on that this morning from a source very close to the negotiations. According to the source, what they're looking at right now is a state- run primary by those who know what they're doing. State government would be reimbursed for the cost. In fact, the money would be in the bank ahead of time.

The go date would be -- the proposed go date at least would be June the 3rd. No cost to taxpayers. The Democratic National Committee has 30 days to publicly respond to the plan, and this has to get through the Michigan legislature by next Thursday in order to do it in time. Don't forget, there's a June 10th cut-off date for all of the democratic primaries to be over.

The participants would also have to be willing to self-identify as democrats and certify that they did not vote in the Republican primary back in January. And according to the source, not all the campaigns are happy about this but we'll see where this goes.

Florida still up in the air. A proposed plan to combine mail-in with in-person votes could be in jeopardy. Karen Thurman is the chairwoman of the Florida Democratic Party. She joins me now from Tallahassee. And Ms. Thurman, good to see you this morning.


ROBERTS: Florida Congressman Robert Wexler, who is an Obama supporter, said this about a mail-in ballot. Let's listen.


REP. ROBERT WEXLER (D), FLORIDA: A mail election would be a chaotic, potentially divisive election that would wind up with two contested elections, not one.


ROBERTS: So based upon that, is this thing going to fly?

THURMAN: You know, John, what? We've spent some time last year after the DNC meeting in particular when they had said they would strip us of our delegates to put together a mail-in ballot, and we then, as we get closer to August, we said, you know, with all of the controversy, maybe we should look at what other options are available. So we dusted off the plan for the mail-in. We've spent a lot of time doing it from an independent commission and sources to put something together that we think would work.


THURMAN: However, you know, we've also put it out to the public and we're waiting for our responses, and I think we'll make our final decision on Monday.

ROBERTS: The state of -- the state of Oregon does mail-in balloting all the time. It apparently hasn't had any problems.


THURMAN: Yes, they do.

ROBERTS: Why would that be? Why would that be a problem in Florida?

THURMAN: Well, one of the things that we've run up against is clearly a state law about using the secretary of state's signature verification.


THURMAN: And that has -- that clearly would have to either be changed or the governor would have to do something to allow us to have access to that. However, I will say that yesterday I got a call from a former colleague of mine who's from Washington that said, you know, we've been doing mail-in ballots for 10 years, and we think it's a great way to vote.

ROBERTS: Right. THURMAN: So, I think that's the advantage we would have is that we do have states out there that have done this and have the time and energies that they put into it.

ROBERTS: So we heard what Congressman Wexler had to say that the Florida congressional delegation went even further saying, "We do not believe that this is a realistic option at this time and remain opposed to a mail-in ballot election or any new primary election in Florida of any kind." They're opposed to the whole idea.


ROBERTS: Do you believe that there needs to be some kind of revote there in Florida?

THURMAN: John, what I think is that we needed to have the people weigh in. Look, it's not going to do the state or the democrats in the state any good if it's not something that we all can degree to.


THURMAN: We're trying to put the suggestions out there. You know, clearly, when we made the decision to go on January 29th, it was a joint effort by all of us. What I want to see happen more than anything is to make sure that the voices of Florida democrats are heard and if this is one way to do it, then that's fine. If not, let's get to a resolution.

ROBERTS: Let me just ask you about that. You just said it was a joint effort by all of us. But there are many democrats who are saying, hey, we had nothing to do with moving this up. This was the Republican-controlled legislature that did it. They're the ones who are to blame, so why are we being punished?


ROBERTS: So, can you straighten that out?


ROBERTS: What did Democrats have to do with moving up the primary?

THURMAN: Well, the only thing that I'm saying is that when the Republican legislature...


THURMAN: ... who has control of the state legislature, and the governor's office made the decision even after attempts by our Democratic leaders in both the House and the Senate to move it back to February 5th so we would stay in compliance, but at that time once the decision had been made, there was a decision whether we should move forward. And we did move forward, and, by the way, we had 1.75 million democrats.


THURMAN: We stuck with principles.


THURMAN: We said the principles ought to be, you ought to have fair and open elections with maximum participation, and that included our men and women serving overseas.

ROBERTS: So, Ms. Thurman, very quickly. If this thing doesn't fly and come Monday you decide not to do it, is there any back-up plan? What's plan B?

THURMAN: Well, I think that, again, we go into negotiations. And I think with what I heard earlier about Michigan...


THURMAN: ... that clearly, I think, that the DNC and all of us are going to have to join together to make -- to put a resolution that we can accept and move on.

ROBERTS: All right. Well, we'll see what happens there, but no question, though, time is running out because you got that June 10th deadline.


ROBERTS: And obviously, it takes a while to organize it. Karen Thurman, who's the chair of the State Democratic Party there in Florida, thanks for being with us this morning. Good to see you. We'll stay in touch.

THURMAN: Thanks.


CHETRY: Well, sometimes the truth hurts, but a lie can do even more damage. Some college students are finding that out after they visit a new Web site that's all the rage called, where rumors, some of them very, very defamatory, are being posted about their classmates. And now, they're wondering is there any legal recourse for those falsely accused? We're going to find out next on AMERICAN MORNING.



Mean-spirited and bigoted opinions being shown on a campus Web site about campuses called, where college students across the country log on and read up on their classmates and sometimes themselves. Some of what's posted is untrue and hurtful, and schools are debating whether they should ban juicy campus on their college campuses. AMERICAN MORNING legal analyst Sunny Hostin spoke with one student who was so humiliated about what was posted about her that she did not want to show her face.


UNIDENTIFIED FEMALE: My heart dropped into my stomach.

SUNNY HOSTIN, AMERICAN MORNING LEGAL ANALYST (voice-over): Imagine your first semester at college, a freshman, worried about grades, making friends, your future. This freshman must deal with all of that and more. Malicious postings on the gossip Web site "Juicy Campus." She asked we not identify her or her school.

HOSTIN (on camera): They're calling you racist. They're calling you ugly. They're calling you overrated. How do you feel about that?

UNIDENTIFIED FEMALE: I cried a lot and I lost a lot of weight, and I was very, very emotionally stressed.

HOSTIN (voice-over): "Juicy Campus" started last October, and now has posts from over 60 schools. Student reviews are mixed.

UNIDENTIFIED MALE: The stuff that's being said is absolutely horrible.

JESSICA ALDRIGE, STUDENT: I've been so upset that people that I go to school with are so hateful.

JOSH WALKER, STUDENT: It's kind of addicting, you know? Like to check out all this stuff that people are saying on campus, you know.

HOSTIN: The site encourages anonymous gossip about classmates. Many posts target specific students by name. Like the freshman who talked to us. And there's little she can do.

UNIDENTIFIED FEMALE: Some of my friends thought that they could make something happen or this was, you know, this is libel or slander.

HOSTIN (on camera): Defamation.

UNIDENTIFIED FEMALE: Yes. And, I mean, once you research it online, it's easy to see that the Web sites are far more protected than we are.

HOSTIN (voice-over): No matter how catty the comments, they may not be illegal if they meet the requirements of opinion covered under the first amendment. Some students want the site banned, but that ignites more debate.

UNIDENTIFIED MALE: Banning a Web site flies in the face of academic freedom. It sets a dangerous precedent, and we don't want the university to go down that path.

HOSTIN: "Juicy Campus" told CNN, "While there has been much attention given to the critics, thousands of students from across the country have written in to request that their campus be added."

HOSTIN (on camera): What would you say if you could say something to the founder of

UNIDENTIFIED FEMALE: Thank you for screwing up my freshman year and making everybody think these things about me, and they've never even met me because, obviously, it's going to taint the next four years.


CHETRY: Probably you can see where it is a tough call, legally speaking, as well. Is there any action that the student or others who feel that there's been untruth published about them, that they're affecting their life. Is there any recourse?

HOSTIN: It's going to be very difficult, Kiran. The Communications Decency Act protects the Web site and the Web site's founder, and that's what's really shocking here. It acts as really almost a blanket shield, a blanket immunity, and so the students are not going to be able to sue the Web site. What I think is interesting is that if you want to sue the posters, the people that are actually posting it, that's going to be difficult too because the Web site allows them to post anonymously. They don't have to post their name even though they can post someone else's name.

So I think that a possible way around this kind of thing is what about suing, you know, a John Doe and then getting a lawyer, or, rather, a judge...


HOSTIN: ... to issue a subpoena and issue that subpoena to the Web site and then, of course, try to get those people sort of unearthed to come behind the wizard's curtain if possible.

CHETRY: It's a tough legal battle to try to take on when you're trying to tackle so much else in college. But --

HOSTIN: It is.

CHETRY: Is there any way to make -- to make maybe a change in the way the Web site is set up so that you have to give your information, you have to post your name or your email in order to write about somebody else?

HOSTIN: The Web site and the Web site's founder, Kiran, has been very -- they've been very, very clear. They are not going to do that. They are saying that this is a free speech issue. People are allowed to voice their opinions, and they are allowed to voice opinions, but not facts that are untrue. And by all accounts, most of the people that we spoke to, and especially the student that I spoke to, says that these are lies.

CHETRY: Right. Well, when we say free speech, if you say something, people know it's coming from you. If you say it on television, if you write something in a paper, you have a byline by your name. The Internet sort of made that much fuzzier because people can post anonymously.


CHETRY: It's almost like scribbling on the bathroom walls in cyberspace.

HOSTIN: It absolutely is. And I think that's the problem with this particular Web site. It encourages people to do it anonymously. They don't have to log in in that way with someone's name. I think, of course, it's cowardly. It's cowardly.

When we were in college, you know, if you wanted to say something about someone, then you said it to their face. That is not what is happening here. And hopefully, hopefully, there'll be some sort of legislation to give people like the wonderful freshman that I spoke to some sort of recourse here.

CHETRY: You also said that that some of the students were talking about maybe a boycott of their own to many of this individual campuses.

HOSTIN: Yes. Students are talking about that. It's been a big debate, but as you saw in the piece, there are some students that say, you know, this flies in the face of free speech. I don't want to be any part of it, but then there are other students that are saying this is hurtful. This is racist. This is anti-Semitic, and we want something done about it. So we're going hear more about this, Kiran.

CHETRY: All right. And we ask this as our "Quick Vote," Sunny, today. Should you be able to sue a site that allows people to post lies about you?

Right now, 70 percent of you say yes. So they're not necessarily agreeing with the free speech protection argument there which the Web site has been using. Thirty percent saying no.

Cast your vote,, and we will tally your votes throughout the morning. Thanks, Sunny.

HOSTIN: Thanks.


ROBERTS: You are watching the "Most News in the Morning."

Congress goes into secret session overnight for the first time in 25 years. What's going on behind closed doors? A new and desperate sign in the mortgage meltdown. Why some homeowners are doing the unthinkable. Burning down the house. That story and today's headlines when AMERICAN MORNING comes right back.


KIRAN CHETRY, CNN, ANCHOR: Welcome back. It is 7:30 this morning here in New York on this Friday. A couple of days away from St. Patrick's day. As you love to say, the ides of March.

JOHN ROBERTS, CNN, ANCHOR: People are getting ready for St. Patrick's day. It's a lot of fun.

CHETRY: In fact, you're going to be celebrating in an unusual location, in Costa Rica.

ROBERTS: I celebrated it at my local pub last year but it will be in Costa Rica this time around.

Another record this morning. Hey, to tell you about, breaking news overnight in the price of gasoline. A look at the AMERICAN MORNING gas gauge shows the highest national average ever. $3.28 a gallon. Last month it was $2.97. Take a look at this. A year ago $2.55. We have been checking in on gasoline prices around the country, and here's a look this morning at what's going on in Washington D.C. where regular unleaded is going for $3.33. Now we're finding out that two-thirds of the country's brightest economic minds think that we're already in a recession. How does all of this kind of fit together? Ali Velshi is monitoring the fallout right now. What do you got?

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Kind of sounds academic, doesn't it? You know, we've got these economist, we're talking about a recession. We're going to find out we're in a recession but in the end, it's what do people feel. So, we look at these gas prices, but fundamentally, gas prices are the prices that you see every day. That's why we're so conscious of it, because everybody in America who fills up knows exactly what they pay. We'll tell you the average price of gasoline, $3.28 a gallon for self-serve unleaded but you don't pay the average price. What we know is where that trend is going.

Fundamentally, though, fuel prices affect everything. We saw diesel in some places above $4 a gallon. That affects all those goods that get trucked to the stores. Farm equipment is powered by diesel. It goes into packaging. It goes into refrigeration, manufacturing, and that price gets passed on to you with anything you buy. And then we see wheat prices increase and corn and soybeans and all that kind of stuff. So, we got inflation.

One hour from now, we're going to get the official inflation numbers from the government for February. We're expecting to see an increase in that, but remember, again, the way the government measures inflation doesn't necessarily reflect the way you spend. So, the reality is are you paying more than you are - are the increase in what you are buying more than the increase in what you earn? A lot of people are saying absolutely yes. Is your job secure? We've seen job losses. Those "Wall Street Journal" survey of economists suggest that on average we're going to gain less than 9,000 jobs a month for the next year.

Most economists think we have to gain more than 100,000 jobs a month just to keep up with the increase in the working age population. So, jobs. Then you got your investments. We've been following the stock market. People are not making up for that inflation in their investments. Then, of course, we have the continuing credit crisis, home prices that are going down. So, all of those things together affect your lifestyle, your ability and willingness to spend money.

In the end, it's academic to the average viewer as to whether we are in a recession right now. We are feeling all of the necessary effects of one. Save for big job losses, which we haven't seen yet. We've seen some, 63,000 in February. If that starts to go south, that's where the problem comes in.

CHETRY: And we're seeing all of it in the big election year, which we've seen before as well.

VELSHI: Right. And it's tough for these policy makers and tough for the candidates because people want answers from them about what they're going to do, but this is an economic cycle.

ROBERTS: And from a consumer point of view, when you see that dial cross $50 when you are putting gas in your car, it sure makes you feel a whole lot poorer.

VELSHI: It makes a lot of decisions for you about where else you're going to spend your money.

CHETRY: Another quick little aside here is Chrysler, making the decision to put its entire company - right?

VELSHI: Shutting down for a couple of weeks in the summer.

CHETRY: Two weeks mandatory vacation, they're calling it. They say it's for some restructuring and to get some equipment up on-line. But they don't have to pay their temporary workers during that time.

VELSHI: That's exactly right. In some ways that's good because we've been seeing these car companies adjusting shifts a lot. Over the course of last year, this way for two weeks everybody gets to plan. But yes, this is all part of the resizing of these car companies. Chrysler is going to shut down for two weeks completely over the summer. Just not making any cars.

ROBERTS: They've done that before, though, haven't they?

VELSHI: Yes. It's happened before.

CHETRY: All right. Ali, we're following this all morning with you as well. Thank you.


CHETRY: And we showed you the price of gas in Washington. $3.33 a gallon. Ann Arbor, Michigan, we found $3.39 a gallon for regular unleaded and a struggling auto industry in Michigan also taking a hit. Joining me now from Brewers BP gas station in Ann Arbor is "Wall Street Journal" Detroit bureau chief Neil Boudette. Thanks for being with us this morning, Neil.


CHETRY: So, we're talking about both the high price of oil crossing $110 a barrel in trading overnight as well as gas. What is causing the prices to go up in your opinion?

BOUDETTE: Well, there's two factors. One is that the produce -- the oil-producing countries are keeping supply fairly tight, and globally we have demand rising. The U.S. economy is slowing down. But our demand for oil is till quite high. And then you have the growing economies like China and India. Their economies are booming. Their demand for oil is rising. So, you have a very tight global situation where supply and demand are very close to each other, and that pushes the price up.

CHETRY: So, you know, one of the things that I think a lot of people feel is sort of this helplessness, as John was saying, you fill up your gas tank. You're paying more than $50 to do it each time. Is there anything consumers can do?

BOUDETTE: Well, I think people already are doing that. We had a story in the paper the other day about people driving less and in the auto industry you see people buying smaller cars. That's one of the things that is a problem for Chrysler as well as GM and Ford that people are moving away from big pick-up trucks, big SUVs, and they're buying more and more small cars, which is the part of the business that Toyota and Honda and the foreign automakers do better in than our domestic automakers here.

CHETRY: That's right. And, you know, as we talked about that shutdown of Chrysler for two weeks, they talk about how it's going to be a restructuring.


CHETRY: But they're also talking about the fact that they're taking a hit with some of their bigger trucks, the Dodge Ram, thinking about maybe combining things like their minivan.


CHETRY: I mean, all of this put together, a sign that we are headed into a recession. I mean, a low -- a recent "Wall Street Journal" actually survey of economists.


CHETRY: 71 percent of them, believe we're in one now.

BOUDETTE: Well, I mean, obviously the economic signs are not good. We had a weak jobs report the other day. Just yesterday, February retail sales were down more than expected, and, clearly, consumers are pulling back their spending. In the auto industry, we've seen that going on for several months now. Five months in a row, auto sales have fallen year on year, and people are feeling the pinch of the economy. Things are slowing down. Gas prices are going up. Energy prices are going up. They're just not spending as much as they were six months ago, a year ago, two years ago.

CHETRY: Not to be all gloom and doom. Are there signs that things could turn around and perhaps what are a couple of the things that could help precipitate that?

BOUDETTE: Well, I'm not an economist, and I don't see a whole lot of signs. I mean, there are some -- there are strengths in the U.S. economy. There's no doubt about that, but you've got the whole housing situation overhanging everything. Credit markets are tight. It's hard for people or companies or organizations even with good credit to borrow money these days. That's why the Fed has been putting more money into the system, and so it's very difficult to see anything turning around right away, immediately.

CHETRY: All right. I thought it was worth a try. "Wall Street Journal" Detroit bureau chief Neil Boudette, thanks for being with us this morning.

BOUDETTE: Pleasure.

CHETRY: Next week on CNN, we're going to be talking about this. "Issue number one," and that is the economy. We have information about your savings, debt, mortgage, and jobs. Ali Velshi, Gerri Willis and the CNN money team noon Eastern all next week, right here on CNN.

ROBERTS: It's obviously an important issue. Huge in this campaign. We want to hear what people are thinking about it across the country.

Meantime, breaking overnight. Congress agrees on a $3 trillion budget plan for 2009. Both houses are calling for rolling back President Bush's tax cuts. But the Senate would keep cuts for low and middle income families. Last night's votes are not final. They're more like a blueprint for both houses to work with before coming up with a final budget to send to the White House.

A bill to ban earmarks for one year, by the way, was defeated. The three presidential candidates were among the few senators to vote for it. Earmarks are the money that members of Congress tack on to bills to pay for projects in their home district.

A little more than two hours from now, debate will resume in the house to overhaul a Democratic-backed surveillance bill. The White House says it will veto the measure because it does not provide immunity to telecommunications companies who participated in the government's eavesdropping program. House Republicans delayed a vote on the proposal last night by calling for a secret meeting to discuss the measure. It's the first time that's happened since 1983 and our Kate Bolduan joins us now from Capitol Hill to tell us more about this. Why did they see this as a necessity for all of that secrecy last night, Kate?

KATE BOLDUAN, CNN, CORRESPONDENT: It is quite a question, John, when you know of course, they normally debate in public, but it comes down to classified information that house Republicans say that all members should know about before they make this very important vote. Now, as you mentioned, it's been some 25 years since the last closed session. That time the debate was over military operations in Nicaragua, and this was a common practice. These closed sessions in the 1800s. But nowadays it's clearly very rare.

And House rules prohibit the members from discussing the issues that were talked about in these closed sessions, but we do know that this does all center around the important vote on FISA and whether or not to grant immunity to telecommunications companies that cooperated with the administration with the warrantless surveillance program after 9/11. And on that very topic, some members took to the floor to debate this closed session before heading into the meeting last night.


REP. ROY BLUNT (R), MISSOURI: I think this provides for a fuller moment for the members to think about, talk about, and discuss some specific information at the secret level that otherwise would not have a chance to be discussed before we move forward with this vote tomorrow.

REP. DAVID OBEY (D), WISCONSIN: Having another one, given the mumbo jumbo that I heard at the last three is simply to demonstrate the almost total uselessness of secret sessions.


BOLDUAN: Now, Democratic members did question the timing of four Republicans requesting the session now. They say it's possibly a political ploy just to delay the vote which it, indeed, did delay the vote. Now, the Democratic majority leader Steny Hoyer, he did issue a statement after as they came out of the meeting which said, basically that, he didn't hear any new information from the Republicans to change his mind. So, we'll see how it all plays out today, John.

ROBERTS: We should again remind voters again, Kate, that the president says he is going to veto any bill that comes to his desk about that retroactive immunity.

BOLDUAN: Exactly.

ROBERTS: Kate Bolduan on Capitol Hill for us this morning. Kate, thanks.

BOLDUAN: Thanks, John.

CHETRY: Well, he is about to officially become New York's next governor. David Paterson already has a list of accomplishment under his belt. He turned disability into inspiration.


ROBERTS (voice-over): Coming up on AMERICAN MORNING. Burning down the house. Homeowners who can't pay the mortgage striking the only deal they can.

UNIDENTIFIED MALE: These are not bad people. They're desperate.

ROBERTS: Going to extremes to get out of debt. Ahead on AMERICAN MORNING.



CHETRY: Well, Rob Marciano at the weather update desk for us this morning tracking extreme weather. What we looking at? Stuff in the mid south?

ROB MARCIANO, CNN, METEOROLOGIST: Yes, we got a couple of pulses that are coming through, Kiran. And this one that will roll through later on this afternoon and it could bring some large hail, damaging winds, and isolated tornadoes. There is already a severe thunderstorm watch out issued later -- earlier last night or earlier this morning. About six hours ago. That has since expired. And another pulse is kind of moving through this frontal boundary. Behind this system, we have a lot of dry air and warm air across the western part of Texas and eastern parts of New Mexico. Winds gusts at 70 miles an hour today.

Critically, low relative humidity and unseasonably warm air. Could see some temperatures this afternoon get up and over 100 degrees, and then we have an ongoing drought. And so, extreme fire danger issued by the storm's prediction center. Here's what's left over with that severe thunderstorm watch. That's done now. The showers and thunderstorms have moved into northern parts of M Mississippi and Alabama. Again, this is pulse number one. We still have pulse number two that's going to come through later on this afternoon and tonight. And that could bring a round of severe weather.

But nonetheless, up through Nashville, below you are getting some showers and storms. And his is beginning to stretch up to the Ohio River Valley. This is the warm event. The next one that comes through will be a colder event. I think Ohio will once again see a little bit of wintry precipitation beginning tomorrow. And this moisture starting to slide into the New York City area. Later on today and tonight, you'll start to see some rainfall rolling in through the big apple. Big changes on the way for the West Coast. Cold air really driving in and diving down to the south on seasonably cold air, will be into southern California over the weekend. It will feel more like January for those folks as opposed to, well, which should be at the beginning of spring. Kiran, back up to you.

CHETRY: I feel like it's always like this. February and March to me are the chilliest lately, past couple of years.

MARCIANO: Yes. I think it's just because mentally we want to get the heck out of winter, and it just wants to hold on and it just drives you crazy.

CHETRY: That's right and you know as well as I do the catalogs are showing the open-toed shoes, and you start to think, you know, it's time for spring.

MARCIANO: Exactly. I want to show those toes.

CHETRY: Thanks, Rob.

MARCIANO: See you.


ROBERTS: Forty-seven minutes after the hour now.

It is a truly disturbing sign of just how bad the country's mortgage crisis has become. A growing number of homeowners facing foreclosure are doing the unthinkable. And AMERICAN MORNING's Chris Lawrence shows us what they're doing.


CHRIS LAWRENCE, CNN, CORRESPONDENT (voice-over): The bank was just days away from taking this home when the owner took matters into her own hands.

SHERYL CHRISTMAN, CONVICTED ARSONIST: If I could take it back, I would take it back in a minute.

LAWRENCE: Sheryl Christman was sentenced last month for setting fire to her Michigan home. She thought insurance money could help her catch up on past due house payments. In California, insurance officials say the number of fires linked to foreclosure doubled last year from seven to 14. In Colorado Springs, this foreclosed home went up in smoke the same day the owner was scheduled for eviction.

UNIDENTIFIED FEMALE: He intended to burn the house down that he was not going to allow them to do this to him, that he was not going to allow them to have it.

LAWRENCE: We sat in court as the homeowner pleaded guilty to attempted arson.

Do you think this is the last time you're going to see something like this?


LAWRENCE: Sheriff Kevin Dougherty predicts these crimes will continue to rise as the economy falls. He says investigators now immediately consider arson, even when a burning home is simply up for sale.

Why would someone do something like this?

DOUGHERTY: Through desperation. For the people that are doing this, they're good people. You know, these are not bad people. They're desperate.

LAWRENCE: Desperate enough to risk jail time, though most only get probation.

UNIDENTIFIED FEMALE: He barely has a dime to his name.

LAWRENCE: And after a conviction, homeowners still owe the bank hundreds of thousands of dollars.

CHRISTMAN: I feel sorry for all the other people that are facing this, but don't do what I did.

LAWRENCE: And the damage doesn't stop there. Even neighbors end up getting burned when higher insurance premiums are passed on to them. Chris Lawrence, CNN, Colorado Springs.


ROBERTS: He is about to become the nation's first ever legally blind governor. How that might influence how he will lead New York. We head to David Paterson's hometown to hear how he has turned a lifetime of challenges into accomplishments.

And who wins a fight between an eagle and a jaguar when mascots attack. Ahead on AMERICAN MORNING.


CHETRY: Welcome back to AMERICAN MORNING. This morning we're uncovering America with a look at the people and the stories that are changing our nation. One of these is New York lieutenant governor -- David Paterson, he officially takes over Monday from the disgraced Eliot Spitzer. Paterson becomes the nation's first legally blind governor. But it's not the first time he has turned a challenge into an inspiration.


LT. GOV. DAVID PATERSON (D), NEW YORK: On Monday at 1:00 p.m., I will have the oath of office administered to me.

CHETRY: A history making day in a remarkable political career. Yet those who know David Paterson are not surprised.

DAVID DINKINS (D), FORMER NEW YORK MAYOR: Legally blind. He was able to finish law school and get elected to the Senate and become the leader of the Democrats in the senate all with this what for some would be a handicap. He turned it into a plus.

CHETRY: Some even suggest Paterson's disability helps make him a better politician.

LLOYD WILLIAMS, PRES. & CEO, HARLEM CHAMBER OF COMMERCE: One of the things I think with David's impairment is that it does make him virtually color-blind, so as a result of that, he has no problems dealing with people of different ethnicities and backgrounds.

CHETRY: This is not the first time Paterson has made New York political history. At 31, he became the youngest state senator. Then, worked his way up to minority leader. His district included part of Harlem where he still lives today.

PATERSON: So help me god.

CHETRY: When he decided to run for lieutenant governor in 2006, no one could have imagined the recent turn of events.

PATERSON: It is a daunting challenge. I have had many of them.

CARL AUGUSTO, PRES. & CEO, AMERICAN FOUNDATION FOR THE BLIND: He is going to be shattering the public perceptions about -- of what if means to be blind.

CHETRY: Something Paterson has been doing his whole life, beating the odds and perceptions. He doesn't walk with a stick or guide dog. He never learned Braille. And aides say Paterson memorizes his speeches.

AUGUSTO: It's like we all have different characteristics. He has been successful because he is smart and he relates to people well.

PATERSON: They're going to realize that blindness is not a major part of David Paterson's life.


CHETRY: Well, his first news conference as incoming governor is on Thursday. Paterson said, this was yesterday actually, that 71 percent of blind people and 90 percent of deaf people are unemployed. He says it's a terrible waste of potential. He says the average disabled person has reached a higher level of education in fact than the public at large.

ROBERTS: There's going to be some interesting changes for the Empire State ahead.

CHETRY: That's right.

ROBERTS: Well, he compared Barack Obama to Jesus, and wait until you hear what else Obama's pastor has to say. So, what does Obama have to say about one of his biggest supporters. We'll tell you, coming up.

And what is Florida going to do about its Democratic primary? Why many are saying a mail-in vote is not the solution. That's ahead on AMERICAN MORNING.


ROBERTS: Welcome back to the most news in the morning. Check out this fight between Eli the eagle of Oral Roberts University and Jaws the jaguar from Indiana University, Purdue University in Indianapolis during a basketball game. It started as dance-off but it turned into a fight. A couple of male cheerleaders and security guards needed to break it up there. Both mascots were ejected from the game. And Eli the eagle was relieved of his mascot duties for the rest of the year. Does that seem like fair punishment there? CHETRY: It also seems like you don't know whether they're kidding or not.

ROBERTS: It sure looked like they were at the beginning. Watch what happens.

CHETRY: Watch what happens here. We'll reenact it. All right. Well, they're smiling because of their masks. Yet, they're fighting.

ROBERTS: Serious for a second there. Watch. A guy comes along and puts the move on him here. Watch. Coming along. OK. So that's all good fun, right? He comes at him like this. Watch what happens right here. That. That looked like it crossed the line between fun and serious. Now, maybe --

CHETRY: I'm just laughing at the other people who don't have masks on.

ROBERTS: The security guard there misinterpreted the whole thing.

CHETRY: Well, he's grinning all the way.

Well, earlier we told you about this web site called A message board, basically, and, you know, a lot of college rumors go around, hurtful things are said about people. Some of them lies. Well, now some victims are looking to take legal action. This morning we're asking should you be able to sue a site that allows people to post lies about you? Right now 73 percent of you say yes. 27 percent say no. You can still vote. We're going to be talking a little bit more about this with our legal analyst, Sunny Hostin coming up in the show.

And we'll also continue our tally of your votes throughout the morning.

ROBERTS: Lots of new ahead for you when the next hour of AMERICAN MORNING starts right now.


ROBERTS: Price shock.

UNIDENTIFIED MALE: What do you think?

ROBERTS: New numbers this morning. Why record gas prices could soon feel cheap.

Delegate drama. New moves today in Florida and Michigan and a new day floated for a do-over primary.

Fired up.


UNIDENTIFIED MALE: Hillary is not a black boy raised by a single parent as Barack was.


ROBERTS: Barack Obama's pastor compares him to Jesus. We're live with the Obama and Clinton campaign. The most politics in the morning on this AMERICAN MORNING.