Return to Transcripts main page

American Morning

New Report Reveals Security Lapses at Some Federal Buildings; Several States Use Stimulus Funds Just to Stay Afloat; Obama's Stimulus Under Fire With Republicans; Palin Still Being Criticized by both Democrats and GOP; Condition of Jackson's Body Raises New Question of Drug Abuse; Costa Rican President Tapped to Mediate in Honduran Presidential Overthrow Crisis; Team of Scientists Say They Created Human Sperm in Lab

Aired July 08, 2009 - 06:58   ET


ALINA CHO, CNN ANCHOR: Good morning, everybody. Welcome to AMERICAN MORNING for Wednesday, July 8.

Welcome back. Kiran, you're back from Los Angeles.

KIRAN CHETRY, CNN ANCHOR: Thanks. Good to be back.

You know, we're two minutes before the top of the hour right now. And here's what's on the agenda. These are the big stories we're breaking down for you in the next 15 minutes.

There is a shocking new report that shows just how vulnerable some of our federal buildings may be. Some major security lapses uncovered across the country. Undercover agents got through security with everything they needed to make a bomb and to put the bomb together in a bathroom. Jason Carroll with a story and a wakeup call for the feds just ahead.

CHO: Plus, on the attack. Republicans asking, "Where are the jobs?". And saying President Obama's stimulus isn't working. And now the president may want another stimulus package. The debate over your money and your future next, live from Washington.

CHETRY: Also, a group of British scientists claim they've made human sperm from embryonic stem cells. They say it will help doctors better understand fertility. So is it a medical breakthrough or is it just science fiction? Our Dr. Sanjay Gupta will make sense of it all for us.

But we begin this morning with shocking new details about security in this country. There's a brand new government report that raises some serious questions about the safety of government buildings across the nation, after undercover agents were able to smuggle bomb parts past security virtually unchecked at several federal offices.

Our Jason Carroll has been pouring over details of the report, and he's here to break it down for us this morning.

And, of course, we remember the tragedy that happen in Oklahoma City at the federal building there. JASON CARROLL, CNN NATIONAL CORRESPONDENT: Absolutely. And this is why this particular report is so frightening to so many people. One senator called it a disturbing pattern. Here's the bottom line.

According to the report, the Federal Protective Service isn't doing a good job at protecting the government buildings it's supposed to. The proof caught on tape.

In one case, investigators say they were greeted by this sight. That's the security guard asleep at its post. Investigators in plain clothes were not stopped, not once, as they smuggled bomb parts past guards at ten different security check points.

They were also able to pass through standard security checkpoints like this, getting access to high-level offices, including the offices of federal lawmakers, the State Department, the Department of Justice, and even at Homeland Security. And here's another disturbing part: the undercover agents brought in real bomb parts for the test and they were able to build the bombs in bathrooms, then walk around with them in hidden briefcases. They later detonated the devices at a remote site. Take a look at the result.

Very powerful. The guards in question all work for the Federal Protective Service, an agency that handles security at 9,000 federal buildings, mostly through the use of private contractors. All this was part of a report from the Government Accountability Office which is the investigative arm of Congress.

The report says that Federal Protective Service routinely failed to give guards proper training and one reason guards haven't been fully trained on x-ray machines since 2004. The GAO says the agency has already taken some steps to improve oversight and the Senate committee on Homeland Security will actually take up the issue in Senate hearings later today. Senator Joseph Lieberman, chairman of the Homeland Security Committee, called it simply unacceptable.

It's really incredible when you look at the details of this report.

CHO: Stunning.

CHETRY: Right. And then also when you see the explosions that took place, the potential for a real loss of life. But also the scary part in your report is that -- or this report that you're telling is about is it wasn't one isolated incident?


CHETRY: This is routine.

CARROLL: Right. And, again, what they seem to think is a pattern here. Not just one, not two, not three, ten.

CHO: Wow.

CHETRY: All right. Jason, let us know how it turns out. CARROLL: OK.

CHO: Jason, thank you.

Something else that came out of the Government Accountability Report, the GAO report, that may surprise you. Many cash-strapped states are using their stimulus money just to stay afloat.

Seven hundred eighty-seven billion dollars was intended to jumpstart the economy, build new schools and create jobs. But in many cases, that money is being used just to keep the lights on. That's part of a bigger developing story this morning.

The House Oversight Committee hears testimony today on just how states, possibly out of desperation, are using their stimulus cash. There are signs that the administration isn't on the same page. And there's talk now of a possible second stimulus before they even spend the first as national unemployment approaches 10 percent. A lot to digest.

Jim Acosta watching it all for us from Washington. Hey, Jim, good morning.

JIM ACOSTA, CNN CORRESPONDENT: Good morning, Alina. You know, the president is overseas, so Republicans here in Washington believe they have found Mr. Obama's Achilles heel, the economy. Top GOP leaders are pointing to some recent conflicting statements coming out of the White House on the stimulus, asking once again whether it was the right approach to ending the recession.



NARRATOR: Where are the jobs? We put the dogs on the money trail to find out.


ACOSTA (voice-over): In the latest sign the economy is in the doghouse, Republicans are siccing their bloodhounds on the stimulus with this video that asks, "Where are the jobs?".


REP. JOHN BOEHNER (R), MINORITY LEADER: I'm John Boehner. This is Ellie Mae (ph). She hasn't found any stimulus jobs yet, and neither have the American people.


ACOSTA: It's an issue that dogged the president all the way to Russia when Mr. Obama clarified statements made by his own vice president on the recession.

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: There was a misreading of just how bad an economy we inherited.

ACOSTA: Not exactly, according to the president...

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I would actually, rather than say misread, we had incomplete information.

ACOSTA: ... who still believes the stimulus was the right call.

OBAMA: There's nothing that we would have done differently.

ACOSTA: But Republicans point to President Obama's dire warnings back in February, when he urged the Congress to pass the stimulus.

OBAMA: We're moving quickly, because we're told that if we don't move quickly that the economy is going to keep on getting worse. We'll have another two or three or four million jobs lost this year.

ACOSTA: It turns out, even with the stimulus, the economy has shed 3.4 million jobs in just six months. And while the president says he's now open to a second stimulus, one of his top economic advisers is already calling for one.

Laura D'Andrea Tyson told an economic seminar in Singapore, we should be planning on a contingency basis for a second round of stimulus. Republicans say the White House can't get its story straight.

SEN. MITCH MCCONNELL (R), MINORITY LEADER: They said the stimulus was necessary to jump-start the economy. Yet now with about a half a million jobs lost every single month, they've started to admit they simply misread the economy. These were costly mistakes and we can't take them back.

ACOSTA: Despite a rough couple of weeks for Republicans, GOP strategists see their own political green shoots of recovery on the economy.

DOUG HEYE, REPUBLICAN STRATEGIST: Nothing has really galvanized the Republican Party more than the stimulus bill. One thing that we've seen is that the president's popularity, while he's still popular throughout the nation, really is taking hits in key states.


ACOSTA: And which states are we talking about? Try the key bellwether battleground of Ohio. That may explain why the White House is not alone in considering a second stimulus.

Democratic leaders including the House majority leader and Congress are kicking around the idea of a sequel even though some in the party are clearly disappointed with the original. And of all of the issues on Capitol Hill, this is the one issue, Alina, where Democrats are simply just not on the same page. The Senate majority leader late yesterday saying he doesn't think a second stimulus is in order just yet.

CHO: Jim Acosta live for us in Washington. Jim, thank you.

ACOSTA: You bet.

CHETRY: All right. So we just heard about that second stimulus. But it would actually be the third one according to our Christine Romans. She's here with a reality check this morning, "Minding Your Business."

Hey, Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Because under Bush we had -- President Bush, former President Bush -- $168 billion stimulus. Remember? And that was going to help us avoid a deep recession. And then we had the $787 billion stimulus. This is just a little over a year, and not all of this money is in to the economy working yet.

I mean, think of that. When you look at the projects part of the stimulus projects so far, about $56 billion has been spent. And Senate Majority Leader Harry Reid saying just slightly over 10 percent has been spent. Let's let it work.

Now, one of the president's former advisers on the campaign trail, Laura Tyson, a well-known economist, she has said she thinks it's time to start considering another stimulus to think about, maybe an infrastructure stimulus.

It would be very politically difficult. Let's be honest, because the White House has already made some promises about the stimulus that had been difficult -- difficult deliverables, as they say, in political talk.

They said they would save or create 750,000 jobs by August -- very hard to verify how many jobs have been saved or created. The White House says 150,000. And they said they would keep the unemployment rate from topping eight percent if we got that second stimulus passed. The unemployment rate is 9.5 percent.

CHO: I was going to say...

ROMANS: Right.

CHO: ... that takes a long time.

ROMANS: So we know that some of these targets have already been overshot. Imagine how difficult it would be. And imagine how it would -- how it would really empower the right who has been so concerned about how this money -- borrowed money is being spent if they start talking about another stimulus.

CHETRY: Yes. And you also have a "Romans' Numeral" for us this morning. This hour's "Romans' Numeral," tell us about it.

ROMANS: It's 92,000. 92,000 has to do with stimulus and jobs. And this is, when you look at the White House calculus on how we're creating jobs, each $92,000 is stimulus funds spent translates into one job.

So the more money that gets out there, slowly but surely, the idea is it's going to create more jobs. But, you know, Abab Dobolino (ph) gave us a tweet at amFIX. He said, "People who expected the stimulus package to turn things around quickly are dreaming. The economy is a ship, not a speedboat."

And we've got a lot of comments like that. We knew from the beginning it's going to take a while for the money to start working.

CHO: The president said himself, you know, it may not happen the first 100 days or even the first term. So, you know, it does take some time.

People do get impatient. And you did point out, interestingly enough, that we may be a little behind but basically on track in terms of doling out the money, right?

ROMANS: It's true. And when people get impatient though, when your neighbor doesn't have a job, when your credit card is lowering your limit, when you can't pay some of your bills, then you're like, OK, OK.


ROMANS: Get it moving. Get it moving.

CHO: Yes.

CHETRY: That may be the government's timeline, but your personal timeline...

ROMANS: That's right.

CHETRY: ... you're about to get foreclosed on, it's very different.

ROMANS: Absolutely right.

CHETRY: All right. And then we could go on about just how much of an impact government can make anyway, you know, in your personal and...

ROMANS: That's right.

CHETRY: But I mean...

ROMANS: But for the record, if they're talking about it, it would be a third stimulus, not a second. This is the second stimulus. $787 billion is the second stimulus.

CHETRY: And Christine has a very interesting piece coming up on the potential political fallout from this coming up in the next hour.

ROMANS: Oh, yes.

CHETRY: So we look forward to that. Thanks, Christine.

CHO: And really more evidence that people are hurting, guys, you know.

Also new this morning. If you're late paying your credit card bills, guess what? You're not alone. A new report from the American Bankers Association finds that more people than ever, nearly 3.25 percent are defaulting on payments. The ABA says it's just another sign of mounting job losses and a weakening economy.

CHETRY: Former figure skating champ and Olympian Nicole Bobek is free on bond this morning. That's after police arrested the 31-year- old at her Jupiter, Florida home.

She's accused of being part of a drug ring. She was charged for conspiring to distribute methamphetamines in Hudson County, New Jersey. Bobek won the U.S. figure skating title back in 1995.

CHO: Plus, track marks on his arms and "dangerous medicines" in his mansion. A source gives us some shocking new details from the Michael Jackson investigation.

Ten minutes after the hour.


CHO: Good morning, Fort Lauderdale. Take a look at that shot there. It's pretty hot. Well, they say it's partly cloudy and 82 right now.

Later this afternoon, those afternoon storms that Florida gets. You know, those monsoon-like storms that last about 30 minutes then it goes away, 94 for this forecast.

CHETRY: We have a tornado. A reported tornado ripped through our county, Westchester, right outside of New York. Woke me up at midnight.

CHO: Roused you up -- yes, which meant you got about an hour and a half of sleep.

CHETRY: Well, what are you going to do? But when we were driving in, I mean, the trees down everywhere, the power's out.

CHO: Thankfully you made it in.

CHETRY: Yes. Exactly.

CHO: All right. New this morning, former D.C. Mayor Marion Barry may have had his former girlfriend on the payroll. He was arrested over the weekend for allegedly stalking her.

According to "The Washington Post," records show he hired Donna Watts-Brighthaupt as a political consultant and paid her from taxpayer funds. Barry has denied the stalking allegations. Oil tycoon T. Boone Pickens ditching plans for the world's biggest wind farm. The billionaire wanted to wean the U.S. off foreign oil. This was going to be his way to do it, but Pickens now says the capital markets have dealt us all a setback.

And get this, a flight cheaper than a fill-up. It's true. Airlines have slashed fares to some of the lowest in years.

Right now, Southwest is offering one-way tickets for 30 bucks on routes up to 400 miles. Other discount carriers, of course, quickly matched the new fares. The CEO of said we haven't seen $30 fares in at least 15 years, calling this the biggest best fare sale of the year. Hurry, though. For some airlines, that sale ends today.

CHETRY: Well, Alaskan Governor Sarah Palin is still getting hit from all sides this morning. She's facing more criticism after her surprise decision to resign. There's also talk that she could become the ultimate GOP superstar. But this morning's "New York Times" is asking, "are we all just overanalyzing it?".

I'm joined now by Tina Brown. She's the founder and editor-in- chief of Also David Frum, editor of "New Majority" and former speechwriter for President George W. Bush.

Great to see both of you this morning. Thanks.


CHETRY: Well, Tina, you said about that Palin news conference that took place that she seemed wacky and overcaffeinated in her performance. You said that she was clearly terrified that her M.O. is to cloak her terror in grandiosity. Both shine through in the suppressed hysteria of her increasingly (ph) strange appearances before the camera."

So you say she looks like someone who's crying out for help?

TINA BROWN, FOUNDER & EDITOR-IN-CHIEF, THEDAILYBEAST.COM: I do. You see, I mean -- of course, we all become obsessed with what wader is going to drop next with Sarah Palin. And she has become like an ongoing reality show.

She sort of reminds me in a way of Princess Diana when she was unraveling. She's both obsessed with the media and keeps saying she's victimized by it.

I actually do think that this was a woman who was thrust into the spotlight way too early, unprepared, and she's really been screaming for sort of stability ever since inside. And I think she actually -- if she had just simply said, "I do have to take a time-out right now to get my life in order." I mean, her family life has become a reality show.

She's on ethics charges. She's completely out of her debt. Her state is in bad shape. But instead of that, she's attracted all of the time to making these grandiose statements and sticking herself into the limelight. So I actually do think that Palin doesn't want to admit how crazy she feels inside.

CHETRY: Well, David, this is interesting because number one, it seems that the more she's criticized on the blogs, the more she's criticized in the "mainstream media," the more her supporters galvanize around her. And we have a new very interesting "USA Today" poll that's out that says that two-thirds of Republicans think that she could be a major candidate and that she -- that, you know, she should run in 2012. So is the more criticism sort of lobbed her way, the more popular she becomes?

FRUM: I fear that's so. And I worry less about Sarah Palin and more about what her core support will do to my party -- the Republican Party. We face right now the worst economic crisis since at least the middle 1970s, maybe since World War II.

The president, as you said in your previous segment, has launched a plan that's hugely costly and won't work. We in 2012 may be facing a crisis of the American economic system. And yet Republicans are advancing a candidate who from everything we know is a 37-percent Barry Goldwater-style disaster.

We saw her impact in 2008. Republicans need to be uniting around coherent ideas for economic renewal. They need to be uniting around candidates who actually can govern.

And instead, as Tina said, we have this emotional bath that is taking the party that could be the party of reform and change and quarantining us away from national concerns.

CHETRY: The other interesting thing is that in that same study, Tina, and that same poll, 75 percent nearly Democrats said they don't want to see her on the national stage.

So that's interesting because at one point, a lot of people talk about how easy she would be to beat because she is a controversial figure.

BROWN: Yes, but she's -- I'm sorry, but she is a little sort of crazy like a fox. We have a good piece on "The Beast" today actually by a writer who makes the point that politics now, it's really become hyperpolitics.

You almost have to quit your job to run two years ahead and that all the kind of candidates right now who are out there, the potential candidates, are really having to get out of their jobs and run because it's this celebrity culture which is actually more important than performance. So Palin has really discovered that she is a megawatt celebrity who almost doesn't need office to run for president.

CHETRY: And I want to ask you, too -- and, David, you brought it up slightly a few minutes ago about the situation with the economy. The last time unemployment was at 10 percent, the party of the president, this was Reagan's GOP at the time lost 26 House seats in the midterm election. What are we looking for now as whether or not this unemployment rate and some of the questions the GOP is trying to put out there about whether or not the stimulus is working will affect the balance of power in Congress?

FRUM: Look, in 1982, when the Republicans lost all those seats as you say, they were following an economic plan where there was a clear explanation of how it would work and how it would deliver. It was a plan, the temporal (ph) tax cuts that was aimed at the actual problems of the economy as they were then.

What the president has done is facing an economy that's falling into this terrible crisis. He took a whole lot of Democratic pork barrel ideas that have been rattling around for a decade, that are extremely slow, very costly, and he labeled them stimulus, disregarding better ideas that could have gone to work. So he's vulnerable.

CHETRY: All right. And let me let...

FRUM: He is very vulnerable.

CHETRY: Do you believe there's a vulnerability there with what's been going on?

BROWN: I think there's a huge vulnerability there. I think that Obama has lost focus on the economy, or at any rate, has made us feel that he's lost focus, which perhaps has even more important repercussion.

And I'm actually told by people in the UK, for instance, that the UK wanted a far more drilled down on the economy, G8. But actually Obama didn't want that. He said he wanted to widen the agenda much more. Obviously, climate control is going to be a big issue.

Clearly, that does affect the economy long term. But as we saw with the T. Boone Pickens' news about abandoning his new energy efforts because of the capital markets, unless the economy improves, all these innovative efforts to create new energy, et cetera, are going to go by the wayside.

CHETRY: Right. You have to get the investors to make those type of changes happen, and that's proving to be a little bit of a challenge right now.

Well, Tina Brown and David Frum, great to talk to both of you. Thanks for being with us.

FRUM: Thank you.

BROWN: Thank you.

CHO: Just a day after the world said goodbye to Michael Jackson, there are new shocking details emerging right now about the condition of Jackson's body. And that's raising new questions about possible prescription drug use prior to Jackson's death.

Nineteen minutes after the hour. (COMMERCIAL BREAK)

CHO: Twenty-two minutes after the hour. Welcome back to the "Most News in the Morning."

Track marks on his arms, bottles of prescription pills in his mansion. Just a day after the world stopped to celebrate the life of Michael Jackson, we're learning some disturbing and dark new details this morning about his death. Our Randi Kaye has the latest on the police investigation.


UNIDENTIFIED MALE: We have a gentleman here that needs help and he's not breathing.

RANDI KAYE, CNN CORRESPONDENT (voice-over): CNN has now learned disturbing new details about what precisely police investigators found when they answered the 911 call from Jackson's house 12 days ago.

UNIDENTIFIED MALE: No, he's not conscious, sir.


KAYE (on camera): A source involved with the investigation tells us Jackson had "numerous track marks on his arms" and that those marks "could certainly be consistent with the regular IV use of a drug like Diprivan."

(voice-over): Diprivan is the powerful sedative commonly used in anesthesia in a hospital. A nurse who had worked for Jackson told CNN he had begged her for Diprivan a few months ago so he could sleep.

Our source cautioned investigators can't say right now if a Diprivan IV drip caused the track marks on Jackson's arms. Some of the marks, the source said, appeared fresh, others, older. In fact, some of the newest marks could have been caused when emergency medical personnel rushed into the house and used their own IVs in an effort to save him.

The source would not confirm if Diprivan had been found with Jackson. But he told us numerous bottles of prescription medication had been found in Jackson's $100,000 a month rented mansion. He described them as "dangerous drugs," similar to those found in a hospital setting. That's as far as he would go.

(on camera): As for Jackson's body, the source said he had never seen anything like it in decades of investigative work. He described it as "lily-white from head to toe." Was it caused by the disease Jackson said he had? We don't know.

(voice-over): Another source with knowledge of the case described Jackson's body as having "paper-white skin, as white as a white t-shirt." He also told me his scalp was bald, that the pop star had no hair. That may have been a result of injuries Jackson received when his hair caught fire while making this Pepsi ad years ago. This source also said Jackson's veins were "collapsed" in both arms suggesting frequent intravenous drug use. His final note, the body was emaciated despite the vigor Jackson showed on stage during his final rehearsal just 36 hours earlier.

Randi Kaye, CNN, Los Angeles.


CHETRY: There you go. And I mean -- again, it's always -- you just had to wrap your head around -- that video was shot two days before he passed away.

CHO: I know.

CHETRY: He looked great, he looked healthy. Then you got -- a week later we're, you know, you're talking about how sharp his moves were.

CHO: Yes. I mean, he looked a little bit thin, a lot of people were saying. But yes, I mean, his moves were sharp. He looked strong in that video. And just two days later...

CHETRY: I know. And then a week later, there's a memorial service for him. And...

CHO: And you were there, of course. You know, just the mood, I mean being there, it must have been -- you were talking -- it clearly was a memorial service, the likes of which we may never see again. But in some ways, it was like a concert too, you know what I mean?

CHETRY: It was like that. I remember thinking it's a little strange. You know, people are like pulling in to Dodgers stadium.

CHO: And look at that crowd.

CHETRY: Getting their tickets with glee, you know, waving their tickets around. But actually watching the memorial itself, it was very solemn.

CHO: That's right.

CHETRY: It was really a beautiful tribute to him.

CHO: It was.

CHETRY: And I'm glad that that didn't take on a different atmosphere.

CHO: A lot of people who weren't big fans like -- you know, it's funny. You know, I was reliving the music and my love for the music as a child. But, you know, in recent years, I didn't think a lot about Michael Jackson. But, you know, I was moved to tears, you know, when Usher, you know, was singing "Gone Too Soon." And he went up and touched the casket. I mean, then there were moments of levity, you know, when were talking about Smokey Robinson, you know. There you see Usher. But talking about Smokey Robinson coming up after they played the song. And he said, you know, "I wrote that song." Then he paused perfectly and said, "And I thought I sang that song, you know." So there are lots of incredible moments, certainly memorable.

CHETRY: And let's just show that video one more time of his daughter. That was probably the part where most people said they really were reduced to tears. His 11-year-old daughter Paris Katherine just saying, "I'm going to miss my daddy. He was the best daddy in the whole world and I loved him so much." And she's surrounded there by her aunts and her grandmother.

And it's going to break your heart because it's three kids left behind.

CHO: Right. Right.

And important to note, too. I mean, you know, I was struck by just what a beautiful girl this was, what a brave little girl this was. The first time really the world has seen these children without their veils. Every time they'd go out they'd be covered for fear of kidnapping. But, you know, we'll have to see. And we hope certainly that they're able to live some semblance of a normal life going forward but without their parent -- you know, without Michael Jackson.

CHETRY: That's right.

All right. We have much more ahead in the next hour. You'll want to stick around. We're going to be talking about the situation in Honduras with the coup. The former vice president of that country is going to be joining us in a few minutes.

Twenty-seven minutes after the hour.


CHETRY: Welcome back to the "Most News in the Morning." Thirty minutes past the hour. The top stories now.

President Obama arriving in L'Aquila, Italy for the G8 economic summit. Some brand new pictures in to CNN now. The town, you may remember, suffered Italy's worst earthquake in 30 years back in April. Three hundred people were killed. And there's even an evacuation plan in place just in case there are more aftershocks.

CHO: Yes. They could be taken out by a helicopter.

Also a new report reveals an alarming lapse in Homeland Security. The Government Accountability Office says investigators were able to smuggle bomb-making materials past security. Not at one, but at ten federal buildings. And once inside, they somehow managed to construct explosive devices in bathrooms and carry them around the government buildings without detection.

CHETRY: It may sound repetitious, but it is the kind of news that you like hearing over and over again.

AAA reporting gas prices down again $2.59 a gallon. It's the 17th straight day in a row gas prices have dropped.

CHO: We have much more on our developing story this morning. Crisis in Honduras. Secretary of state Hillary Clinton met with Manuel Zelaya yesterday. The Honduran president, you recall, was ousted from his post, thrown out of the country, still in pajamas.

Now the Nobel Prize winning president of Costa Rica has agreed to mediate the crisis in Honduras by sitting down with Zelaya and the man who took his job. Kevin Casas-Zamora is the former vice president of Costa Rica. He served under the current president of Costa Rica who as I mentioned will be mediating this crisis. He's going to be trying to broker a deal there.

Kevin, good morning to you.


CHO: First, I want to get into why the U.S. is getting involved at such a high level with secretary of state Hillary Clinton. You know, when we think of U.S. foreign policy in hotspots, we tend to think of Iraq, Afghanistan, Iran, North Korea is real, not Honduras. Why do you think the U.S. is getting involved?

CASAS-ZAMORA: Well, partly because this is not just about Honduras. This is about the whole region. As President Obama himself said, you know, allowing this coup to stand as it is would set a terrible precedence for the whole region. That's number one. And number two, I'm going to be very frank here. If the U.S. cannot played a constructive role in solving this crisis in Honduras, I can't see any way the U.S. would play a constructive role in solving the really delicate and complicated crisis that are out there. The Israeli-Palestinian conflict, Korea, and so on and so forth. So it's a good thing they're getting involved.

CHO: Let's talk about the man who used to be your boss. The Costa Rican president Oscar Arias, who will be the mediator in this process, trying to broker a deal. He's a Nobel Peace Prize winner. Get into his mind for a minute. Tell me how you think this is going to play out.

CASAS-ZAMORA: Well, it's not going to be easy. I mean, I have no doubt whatsoever that he is the right man for the job. Not only is he very respected across the board in the region, but he also brings to the table the vast experience in conflict resolution. That's why he got the Nobel Prize in the first place. And thirdly, he happens to be holding the rotating presidency of the Central American Integration System, which is lucky coincidence. So he's really the right person for the task at hand.

CHO: You know, I want to remind our American viewers about the story who may not be following it very closely. You know, we certainly don't hear about military coups that often. In this case, we're talking about a sitting head of state who is, you know, roused out of bed by the military in his pajamas, taken out of the country. He tried to come back over the weekend, land his plane. Couldn't do that. So he met with Secretary of State Clinton.

Bottom line here, do you think if you had to guess, do you think this military coup is going to stick or do you think Zelaya is it going to be returned to power?

CASAS-ZAMORA: Well, that's a tough one. Nobody really knows at this point. But my sense is that he will be returned to the presidency, though not necessarily to power. And those are two different things. My sense is that some kind of deal will be brokered, the makings of which have been obvious all along. I mean, President Zelaya ought to return to the presidency. Number two, he will have to give up on his plans to amend the constitution. Number three, he will very likely have to put some distance between himself and Hugo Chavez.

Number four, some kind of power sharing agreement will have to be arranged whereby he remains at the helm of the government. But some of the people chip in the main decisions. And number five, some kind of general amnesty will have to be enacted whereby everybody turns a blind eye on pervasive illegal behavior of all the parties involved.

CHO: Clearly, you thought this out. Lots of scenarios there. Former vice president of Costa Rica, Kevin Casas-Zamora. We thank you for joining us this morning.

CASAS-ZAMORA: My pleasure.

CHO: Thirty-five minutes after the hour.



CHO: Our senior producer said he just had to with this music. Who is it again?

CHETRY: You know it's Journey. We like to call him Captain Obvious sometimes when it comes with the music. But I love it. Don't stop believing, Brian. Seriously. We love it.

Thirty-eight minutes past the hour right now. Partly cloudy. It doesn't look partly cloudy, does it? As John Roberts would say, wait a minute, it's not partly cloudy. I don't see a single cloud. Sunny and 85 degrees. Welcome back to the Most News in the Morning. You know, the unemployment rate released higher toward double digits and the president...

CHO: Sorry, I kept...

CHETRY: I had to channel him. He's coming back.

ROMANS: John Roberts also probably has a picture with Journey on the Internet. CHO: He probably does.

CHETRY: Meanwhile, though, back to our problem at hand. Because we do have one with the unemployment rate. There's been a lot of questions about whether or not Democrats on the Hill are going to see their approval ratings taking a bit of a hit. Will ultimately Congress be judged on the economic recovery for good or for bad?

ROMANS: You know, a long time to the midterm elections. You know politics and the United States, how we go months and months, right? Barely six months in office, this president has faced unemployment near 10 percent. His vice president now admits the administration misread how bad the economy was. How long will the public be patient and give the president's plan time to work, and how big is the risk his party pays next year if the jobless rate tops 10 percent?


ROMANS (voice-over): Two presidents, different parties, with striking similarity. Both incredibly popular, both faced with rising unemployment. Ronald Reagan's experience instructive for Democrats today. The GOP lost 26 seats in the 1982 election. Reagan's popularity could not trump double-digit unemployment.

DANIEL CLIFTON, HEAD OF POLICY RESEARCH, STRATEGAS: If we look back to 1982, as soon as the unemployment rate hit 10 percent, there was a political dynamic that changed significantly and became much harder for the incumbent party to be able to make their case.

ROMANS: The jobless rate today, 9.5 percent, above the peak of eight percent the White House predicted earlier this year.

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: We and everyone else misread the economy.

ROMANS: Not everyone. Some economists have long forecast jobless rates this high. And now politically dangerous double digits are at hand. The White House now concedes 10 percent is likely in the next couple of months.

CLIFTON: At 10 percent, you probably know multiple people who are unemployed. And you begin to worry about whether you are going to be unemployed yourself or maybe your spouse, and it creates an anxiety amongst voters.

ROMANS: The White House has stressed that the mess is not its doing.

PRES. BARACK OBAMA, UNITED STATES: ... the administration inherited (inaudible) challenges for businesses and families alike.

ROMANS: And that the president is working quickly to fix it. Investing in and trying to reform energy, health care, the banking system, to say nothing of a historic $787 billion economic stimulus plan. But how long will voters wait? ANDREW KOHUT, PRESIDENT, PEW RESEARCH: President Obama, if he fails to match public expectations that he's going to fix the economy or if the economy gets worse in the view of the public, that could hurt the Democratic party very much in 2010.

ROMANS: The Democrats have a solid majority, and it's more than a year until they face voters again. Reagan was fighting joblessness and inflation and high interest rates. President Obama has a full plate, but inflation and high interest rates are not on it.


ROMANS: The White House will have to convince Americans that things are getting better, at least not getting worse. President Obama has promised to save or create three to four million jobs. The economy this year is losing on average 564,000 jobs every month. It is impossible to verify whether the president specifically has saved any jobs so far.

And even if they can create a few hundred thousand stimulus jobs, it will not hold back the flood of private sector job cuts still expected. That could make for tricky politics for Democrats from now through 2010.

CHETRY: It's interesting that you brought that point up about the last time that we saw double-digit unemployment and the effect that it had on the midterm elections.

ROMANS: Yes and you know, Pollster says when you start to talk of double-digit unemployment, it just throws a wrench into politics. It really makes incumbents nervous.

CHO: And I know we talked about this before. But excuse me, the whole notion of how do you measure how many jobs you've saved? You know, I mean...

ROMANS: You use an elaborate formula and you try to say this is how much money we spent. And so that would translate to this is the number of jobs we save. That's why it is so difficult to verify.

Unless you have the list of people who have those jobs, I don't know how you verify it. It's an estimate. It really is an estimate. And we know that people don't feel like there are new jobs being created because they see their neighbors lose their jobs every day.

CHO: Yes.

CHETRY: All right. Christine, very interesting look. Thanks so much.

Here's what's coming up on the "AM Rundown" in the next 15 minutes. 7:50, our Dr. Sanjay Gupta is looking at a medical first. Scientists claim that they made human sperm using embryonic stem cells.

At the top of the hour, a CNN security alert. Undercover federal agents sneak bomb making materials into government buildings. They do it all without getting caught. And not just once but in many different places at many different times. So it calls in to question just how safe government offices are from a terror attack and what we can do about it.

Also, at 8:04 Eastern time, is the stimulus working? We heard Christine's take on it. More and more Republicans on the Hill though are saying no. And they are pointing the finger at the president. We're going to have more on whether or not some new ads out by the GOP are having an effect. It's 43 minutes past the hour.



CHO: Check it out. Beautiful day in New York. Clear and 61 degrees. Apparently, the clouds are going to come in. It doesn't look like that right now. But apparently it's going to be partly cloudy later today and 81 degrees.

CHETRY: And also you know, if you are into numbers, today in your day. It's July 8, 2009. So it's 7, 8, 9. But at 12:34.56 this afternoon, you're going to be able to - how about this - this is so cool, you get a straight number sequence, 1, 2, 3, 4, 5, 6, 7, 8, 9. Numerologists say this means it could be - could be, a very good day to make money. So we hope that's the case.

Jacqui Jeras is following the weather for us this morning. I got to tell you Jacqui, we felt it was a tornado that swept through in Westchester County, just a little bit outside northeast of New York City. And it woke me up straight out of bed. I felt like the house was going to collapse, seriously.

JACQUI JERAS, AMS METEOROLOGIST: Well, you know, we had some damage out there, actually, with some really wicked winds. There was a tornado warning in effect at the time. The weather service hasn't confirmed that.

What they have confirmed, certainly -- take a look at these pictures, golf ball-sized hail so thick some folks were actually shoveling this out of the way. You can see it getting inside houses, you know, along cars, trees down, power lines out. Thousands of people this morning still without power.

This is Westchester County, and Yonkers among the hardest hit areas. Those storms went through about 11:30 last night, waking you guys up and certainly waking up a lot of people that maybe didn't quite get to bed yet. Much calmer weather in play for the area today. You can see the showers and thunderstorms already moved on through, but we could see a little redevelopment here later on this afternoon. But not anticipating the events like we saw yesterday.

Today, the worst weather here across parts of Nebraska on to southwestern Iowa and the northwestern parts of Missouri. Strong thunderstorms with heavy rain, and some flash flooding. Flash flooding a good possibility here along the Gulf Coast states today, especially in the northern parts of Florida. All this wet weather is going to be moving in towards the Big Bend area.

Also, we could see a little bit of flash flooding, we think, in some of the areas around here, the Carolinas and also in to parts of Georgia. Wow, northern Florida has been wet. We've been getting record temperatures across parts of the South. Also, very hot conditions today across parts of Texas and into Kansas and Oklahoma, 100 degrees in Dallas today, guys. Very, very warm temperatures sticking around for the next couple of days.

CHO: Jeez, wow, OK. Jacqui Jeras, thank you very much. It's 48 minutes after the hour. Coming up, a stem cell breakthrough involving -- can't make this up, human sperm. Dr. Sanjay Gupta has been looking into the story. He's going to be with us after this.



CHO: Welcome back to the Most News in the Morning. Well, we've heard about big medical breakthroughs in labs, but this one, well it's a first. A team of scientists say they have created human sperm in the laboratory. We're "Paging Dr. Sanjay Gupta" for this one, CNN's chief medical correspondent. Sanjay is in Atlanta for us. Hey, Sanjay, good morning.


CHO: This is fascinating stuff. So what does it all mean?

GUPTA: Well, it really is fascinating. I've been reading and re-reading this particular study. It is sort of one of those pivotal moments, I think, in this whole embryonic stem cell history. I'm going to show you an animation here in a second. I'll show you how it all works.

But basically speaking, in proof of principle, we've always thought these embryonic stem cells could be converted into just about any other cell, which makes them so attractive for possibly treating diseases, studying diseases certainly. The question was for a long time could it be turned into sperm or eggs, for example.

And the answer seems to be yes with regard to sperm specifically. Take a look at the animation, Alina. Get an idea of what they did was they took these embryonic stem cells, they added a little vitamin A derivative, and then they used this green stain. I can't tell you exactly how they did it.

So you all start doing it in your garage. Then, they started separating it out with lasers, trying to figure out exactly what these cells are. And the cells underwent this very specific process of division. The process is called myosis. You don't need to remember that, but ultimately over time as they watch these cells over a few months they were able to coax some of these cells, as you can see there, into sperm cells. They took these -- again embryonic stem cells -- and threw some various interactions and were able to create these sperm cells, as you saw. Important the researchers say, Alina, because they want to study infertility. If you look at infertility across the globe, about a third of cases of infertility are actually caused by men and they also could create these sperm cells within three months where it takes typically 15 years for sperm to mature. You get an idea of how important this is.

CHO: Sanjay, you know, the guys in the crew here were joking around and you know, at least we need men still for chopping wood and stuff like that. But all jokes aside, you know, this does raise some concerns and some questions about making humans in a petri dish. So, I mean, is that even possible at this point? I mean, we're not there yet.

GUPTA: No, we're not. Even the researchers will say these are invitro-derived sperm cells. Could one day these possibly be used for insemination? The answer seems to be, well possibly. Years and years down the line they might be able to for example someone who's been infertile because of chemotherapy or something like that be able to create this opportunity to create sperm.

But right now, British law where these studies are being done, prohibits this sort of thing. And this is being done really solely for the process of studying infertility. You study how sperm develops, you might get a lot more answers as to why infertility occurs.

CHO: It's a fascinating development.

GUPTA: It really is. I thought you might have some fun with that, Alina, for sure. Men are still necessary as far as we...

CHO: For more than just chopping wood.

GUPTA: That's right.

CHO: Dr. Gupta, thank you.

CHETRY: Well, Jason Carroll is going to be joining us in a few minutes with this stunning report about a lack of security at federal buildings. Plain-clothed agents were able to sneak in bomb making parts. They were able to then assemble them in bathrooms and that is a look at how powerful they were when they set off in a demo afterwards.

This is not just a one-time thing. This was at 10 different checkpoints in federal buildings around this country. Jason Carroll is going to have much more on the fallout. Fifty-five minutes past the hour.


CHETRY: Welcome back to the Most News in the Morning now. Right now on the ground in Afghanistan, the Taliban is confirming on its Web site that it is holding an American soldier hostage. U.S. forces have been desperately trying to rescue this service man since he was reportedly seen walking off of a base last week. The Taliban report does not elaborate, give details on where this soldier is being held. It also provides no proof that they actually captured the soldier.

Also this morning, U.S. commanders carrying out President Obama's new strategy for the war in Afghanistan, and they are expressing concern over a shortfall of Afghan security forces.

CNN's Barbara Starr is live at the Pentagon. Barbara, what are you hearing from your sources there?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kiran, in just about two hours, we will hear from General Larry Nicholson, the top Marine commander in the region overseeing this fight. He was already quoted as saying he needs more Afghan troops.

Sources we are talking to say, absolutely, yes. A problem that is rapidly emerging in this battle down in southern Afghanistan's Helmand province. They don't have enough Afghan troops. They need those Afghans to be in these towns and villages and interact with the people and make this much more of an Afghan operation in order to avoid the typical resentment that understandably comes when U.S. troops come in to a town and village and stay there. That is becoming a significant concern.

Also, we are hearing from top Pentagon officials, they are watching very carefully the supply line into this area. It's a very remote area. They're trying to get more water, more combat gear, more equipment into the area, and they're trying to get it in as quick as possible. These are the kinds of things that can stall an operation. That's what they don't want to have happen. Kiran?

CHETRY: Barbara Starr for us with more on that. Thanks so much.

And we're coming up right on two minutes before the top of the hour on this Wednesday, July 8th.

Good morning, glad you are with us on this AMERICAN MORNING. I'm Kiran Chetry.

CHO: And I'm Alina Cho. John Roberts has the week, enjoying a couple of days off. Nice to be with you.