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American Morning
Louisiana Braces for Floodwaters; Trump Fires Himself from 2012 Race; Schwarzenegger Fathered Child Out of Wedlock; Pakistan Returning the Helicopter Tail; Bomb Defused During Queen's Visit; IMF Chief Accused of Sexual Assault; Gov. Scott Walker Working to Create Jobs
Aired May 17, 2011 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: A shocking confession from Arnold Schwarzenegger. The former California governor admits to "The Los Angeles Times" he fathered a child with a member of his household staff and kept it under wraps for more than 10 years. The stunning details ahead on this AMERICAN MORNING.
And good morning, everyone. It's Tuesday, May 17th. Welcome to AMERICAN MORNING. I'm Christine Romans.
KIRAN CHETRY, CNN ANCHOR: I'm Kiran Chetry. Ali Velshi is off this morning. Glad you're with us. Up first the startling confession coming from Arnold Schwarzenegger this morning. "Los Angeles Times" reporting that the former California governor has admitted he fathered a child out of wedlock with a former member of his household staff.
ROMANS: Schwarzenegger says it happened more than a decade ago and he only told his wife, Maria Shriver, after he left office earlier this year. Casey Wian is live in Los Angeles this morning. Good morning, Casey. I guess now we have the reason for the announcement recently the two were splitting after 25 years of marriage.
CASEY WIAN, CNN CORRESPONDENT: Yes. It sure seems pretty clear now. Arnold Schwarzenegger was a controversial figuring during his two terms as governor of California. Now that he's out of office and reportedly trying to revive his acting career he's become the subject of some unflattering publicity.
"The Los Angeles Times" is reporting this morning that before he ran for office in 2003, Schwarzenegger fathered a child with a member of his household staff. According to a statement he gave the paper, quote, "After leaving the governor's office, I told my wife about this event which occurred over a decade ago. I understand and deserve the feelings of disappointment and anger among my friends and family. There are no excuses, and I take full responsibility for the hurt I have caused. I have apologized to Maria, my children and my family. I am truly sorry."
Now the "Times" report the woman worked for the Schwarzenegger's 20 years, retiring just in January. Only a week ago Schwarzenegger and his wife Maria Shriver announced they had separated after 25 years of marriage. That relationship was clearly strained during Schwarzenegger's run for governor when several women came forward and claimed the actor groped them. Schwarzenegger apologized and Shriver stood by her husband.
Schwarzenegger, a Republican, was elected California governor following a recall election that ousted Democrat Gray Davis in 2003. He promised to reform the state government and close the budget deficit, but he left with record budget deficits and low approval ratings. Christine, Kiran?
ROMANS: He's been very public too. It looks like he's trying to re- launch a movie career. Not as if he's done with his governorship and walked away. I wonder why this is coming public now? We don't know the timing of this, do we?
WIAN: We absolutely don't. All we know is about a week ago they announced they had separated. As you mentioned, Schwarzenegger has been out there. He's been giving speeches and talking about reviving his movie career. We checked a website just a little while ago. Schwarzenegger.com. It appears to be genuine, to be the governor. A picture of him sitting there and playing chess and saying, stay tuned for my next move. I don't think this is what he was talking about.
CHETRY: Right. All right, Casey, thanks so much for clearing it up for us this morning. We appreciate it.
Also we're asking it as our question of the day, the stunning admission from Arnold Schwarzenegger. We want to know what you think. Does what a politician do in their private life matter to their public life?
ROMANS: E-mail us, tweet us, go to our blog, find us on Facebook, so many different ways to weigh in. We will read these comments later in the program.
Breaking overnight, a bomb square as Queen Elizabeth II arrives in Ireland. Irish authorities say they defused one bomb on a bus and then rushed to the scene of another suspicious device. These are live pictures you're watching of the queen's plane arriving.
Dublin is on lockdown. It's the first state visit by a sitting British monarch in exactly 100 years. She's being greeted with the red carpet and pomp and circumstance. The Irish say there's never been a bigger security operation in the country. But certainly as Zain Verjee was reporting it's a historic visit, the first visit from a sitting monarch in 100 years.
CHETRY: That's right. Some of the extremists in the country want to make sure their displeasure is known, which is impetus for these bomb threats. And Zain also says that her schedule is continuing regardless of the threats.
ROMANS: We'll bring you more of that as it unfolds.
Meanwhile, Pakistan has agreed to return the wreckage of the American stealth chopper that crashed during the Osama bin Laden raid.
CHETRY: The handoff is expected to happen today. Navy Seals blew up the chopper, attempting to destroy any evidence after a mechanical malfunction. The tail section remained intact and the U.S. has been demanding it back for weeks now.
Stan Grant is live in Islamabad, Pakistan, this morning. Why is it significant they're now agreeing to return that piece?
STAN GRANT, CNN INTERNATIONAL CORRESPONDENT: Yes. Because Senator Kerry came here for a discussion about how to in his words reset this relationship. This relationship has really been under the microscope since the killing of Osama bin Laden.
Many are talking about a new law and it is so important strategically and what Senator Kerry said was this, Pakistan needs to decide what sort of country it wants to be, whether it wants to be a democracy or a country a haven for terrorists. To get this relationship back on track he was looking for concrete measures. One of these measures is the return of this helicopter that was downed during the Osama bin Laden raid.
You might recall there was some correlation a little earlier perhaps the Pakistanis may allow the Chinese, of course a long-standing ally of Pakistan, to look at this chopper, but now it appears Kerry has won this concession and it is going to be sent back to the United States. We have not had confirmation that has happened. If and when it does it will be a step in the right direction as far as trying to right this relationship goes.
ROMANS: All right, Stan Grant, thank you.
CHETRY: Air strikes light up the night sky over Tripoli. There is a new video of what the Libyan government is calling the aftermath of an attack by NATO war planes. The government's anti-corruption headquarters burned, so did a building that housed the head of Tripoli's police force.
A crowd gathered on the street afterward, young men carrying portraits of Moammar Gadhafi and chanting support for the Libyan leader. There is no word on casualties. NATO meantime has yet to confirm that air strike.
He's the banker of last resort to the world. This is the bank, the IMF, that bails out the country's poorest countries when there's a crisis. The guy who runs it, Dominique Strauss-Kahn, he sits in a New York jail cell accused of sexual assault. A judge refused to grant bail for Strauss-Kahn, saying he was a flight risk. He allegedly forced himself on a hotel maid. Prosecutors say the victim picked him out of a police lineup.
(BEGIN VIDEO CLIP)
JOHN MCCONNELL, ASSISTANT DISTRICT ATTORNEY: The defendant restrained a hotel employee inside of his room. He sexually assaulted her and attempted to forcibly rape her. When he was unsuccessful, he forced her to perform oral sex on him.
BENJAMIN BRAFMAN, DEFENSE ATTORNEY: He is presumed innocent and indeed this is a very defensible case. There are significant issues that we have already found simply with preliminary investigation that in our judgment makes it quite likely he might ultimately be exonerated.
(END VIDEO CLIP)
ROMANS: This alleged attack took place at Strauss-Kahn's $3,000 a night luxury suite at New York's Sofitel hotel.
CHETRY: That's a far cry from Strauss-Kahn's new digs at a New York's infamous Rikers Island jail. Corrections officials say the 62-year- old IMF chief has settled in at Rikers. He's being held in an 11 by 13 foot cell, separated from the general population. He can go outside for an hour a day and he is allowed to watch television.
ROMANS: Defense attorneys say they'll appeal the no bail order for Strauss-Kahn. The IMF chief was taken off an air France flight just moments before takeoff from Kennedy airport.
CHETRY: Some of the investigators were saying in the nick of time and that they had no choice to do this. Our Deb Feyerick has more on the specially trained New York cops who took him into custody. Some are asking was this overkill or just standard operating procedure.
DEBORAH FEYERICK: It's an interesting question. Think about how fast this went down, just hours from the moment of allegation, to his humiliating removal from the airplane, the rapid arrest of one of the most powerful men on the world stage has some people wondering, did police act too quickly, was there a rush to judgment? Those familiar with the special victims unit, SVU, say investigators did exactly what they were supposed to do.
(BEGIN VIDEOTAPE)
FEYERICK: You have a hotel worker going up against one of the most powerful men, the head of the international monetary fund. What sort of evidence needed to be met for police to believe that something, in fact, did occur?
LINDA FAIRSTEIN, FORMER HEAD OF MANHATTAN D.A. SEX CRIMES UNIT: That's a great question. Obviously body fluids and where it is. If it's on the bed of the alleged offender, may not be terrifically significant. If it's on the clothing of the victim, and I don't know where it is, that's going to be awfully significant.
Most hotels in this day and age have cameras in corridors. Is there tape of this woman leaving the room? What condition was she in, both in clothing disarray and emotional distress? What condition was he in when he left the room, if these things are filmed?
FEYERICK: Will this lady have to testify?
FAIRSTEIN: Oh, yes. This case is entirely based on the testimony of the young lady who made the complaint. This case could not proceed without her.
FEYERICK: Investigators and police went immediately to the airport to get him off the plane. Is that an extraordinary measure? FAIRSTEIN: If the special victims unit detectives had probable cause, meaning a witness who they believed who told the truth, made an immediate outcry, found evidence to support it, which is not needed but icing on the cake, then they did the only thing that they could do, which was to stop this man before he left the country.
FEYERICK: This young lady has to be terrified.
FAIRSTEIN: This is what they're so good at. The detectives whose pictures I saw in the picture today, one of them I worked with for more than 20 years, he's not only a great detective, they're just the nicest guys in this business. They are chosen not only for skilled detective work but because they have a manner to handhold the scared witnesses through this process.
(END VIDEOTAPE)
FEYERICK: Now, Mr. Strauss-Kahn's lawyer says forensic evidence will not be consistent with the forcible encounter, and that's because even the presence of DNA does not by definition establish force. Mr. Strauss-Kahn's status, you know, think about it, he could have been president of France, clearly magnifies the seriousness of the allegations. Even if he were to be exonerated as his lawyer believes, his reputation will never recover.
ROMANS: Innocent until proven guilty under the law, but his reputation is something that is clearly -- this is, as you pointed out before, a career low for him, no question.
FEYERICK: Think about going from such a high to such a low. And also, in France, you have to take into account that, you know, people -- it's a different system. Here there is this sort of rush to find out what happened, what did he do, what do the allegations say. The allegations are always really almost the worst case scenario, you can add more allegations on.
But still, it's sort of peeling it back. That's what his lawyer was trying to do yesterday. He has a great lawyer, an expensive lawyer. But again, you know, it's just -- everybody has to take a little bit of a deep breath.
ROMANS: Deb Feyerick, thanks.
CHETRY: Strauss-Kahn will be back in a New York City courtroom on Friday. Coming up at 7:30 eastern we'll be talking with French TV reporter Nathan King about the charges against Dominique Strauss-Kahn and how this news is playing in France as we said, they take a very, very different view of these charges, of the perp walks and of what they fear, at least some fear, is a rush to judgment.
(WEATHER BREAK)
ROMANS: Still to come on AMERICAN MORNING, Mississippi River shut down, thousands in harm's way, floodwaters fast approaching. This is a major artery in the United States and this bulge of water inundating homes and communities. We're going to have more on that from the front lines after the break.
CHETRY: Also, remember we told you about Panera's pay what you want are restaurant. A year later how is business? It's 13 minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: Sixteen minutes past the hour. Welcome back to AMERICAN MORNING.
Floodwaters from the raging Mississippi River are quickly closing in on Louisiana this hour. The river is already swelling to six times its normal width in some places, and parts of rural Louisiana are already under water.
ROMANS: The Coast Guard is now closed a 15-mile stretch of the river near Natchez, Mississippi, and there's no word when it might reopen. You know, it's a critical waterway for cargo vessels and right now, you know, they're not going anywhere.
In Louisiana, the Army Corps of Engineers has opened 11 gates in the Morganza Spillway. About 2,500 people and 2,000 structures are directly in the path of the floodwaters. There is one hopeful development. The National Weather Service predicts the Mississippi River will crest 2.5 feet lower than expected today in Baton Rouge.
CHETRY: Well, Rob Marciano is live in Melville, Louisiana, this morning, where people were ordered to leave their homes on Sunday. So what is the situation right now?
ROB MARCIANO, AMS METEOROLOGIST: Well, in the bigger cities, they're breathing easier. In Baton Rouge you mentioned, the river expected to crest much, much lower now. Same in New Orleans because we've opened these floodgates and relieved the pressure downstream. But that means that the folks that live in this spillway or floodway are being flooded out slowly, but surely. And as you mentioned here in Melville, folks were told to leave their homes at least if they lived -- if they're not in the protected area of the levee system, which is where we are right now. Behind me is the Atchafalaya River which is swollen beyond capacity, flooding out roads here across this part of the northern part of the floodway and all of this water still has yet to make it, really in full force down to the I-10 corridor and then south below that through Butte La Rose and in through Morgan City proper.
As you mentioned, the folks are evacuated from their homes here, but a lot of them are telling us you know what, we're not going to leave wholeheartedly until the water really gets to where they are. Because they see it moving fairly slowly so they feel like they have some time to get out, you know, in earnest. So they're kind of at a wait and see attitude, but moving quite a lot of their stuff out of harm's way in the meantime.
As far as the river's cresting are concerned, a little bit more forecasting for you. A new crest expected now in Morgan City and Butte La Rose. That's not going to happen until next week. So this water that's spilling ferociously out of the Morganza Spillway is going to take its sweet time as it spreads out across the Atchafalaya basin.
One other note to add some levity to this, we found a woman yesterday selling t-shirts, 20 bucks a pop just to raise some money for her and her neighbors to, you know, help ease the pain as they have to move out of their homes as the river rises. So capitalism alive and well, but I wouldn't want to be in that situation to have to sell t-shirts in preparation for potentially losing some of my belongings.
Guys, back up to you.
CHETRY: What a sad situation. All right, Rob. Thanks so much.
Coming up next on AMERICAN MORNING, find out which cell phone carriers are ranked the worst when it comes to satisfied customers.
ROMANS: Everyone here says this is mine.
CHETRY: Yes.
ROMANS: Whatever your cell phone carrier is. And Donald Trump is out of the 2012 race. Was he playing us all along? And is he gone from politics for good? We'll have that for you.
(COMMERCIAL BREAK)
ROMANS: It's 23 minutes past the hour. "Minding Your Business" this morning.
The markets kicking off a new week in the red. The Dow was down 47 points yesterday. The Nasdaq and S&P were also lower as investors are focused on oil prices and the European debt crisis.
A broad investigation into the credit boom. New York's attorney general is requesting information from Bank of America, Goldman Sachs and Morgan Stanley. At issue, their loan bundling packages that led to billions of dollars in losses.
AT&T's customer satisfaction taking a hit after its proposed merger with T-Mobile. According to a new survey, the two carriers now rank at the bottom when it comes to making customers happy.
More people are expected to fly this summer. According to an industry trade group with airlines carrying about 34,000 more people every single day between June and August. Make sure you get an aisle or window seat.
Seven in 10 Americans say that the high price of gas is causing them financial hardship. That's according to a new "USA Today" Gallup poll. According to AAA, the national average now for a gallon of regular is down to $3.94 a gallon.
Panera Bread calls its pay what you want restaurants a success. It reports 80 percent of people leave the suggested amount for their meal or even a little bit more. It was a year ago Panera came up with the idea of helping to feed the needy and raising money for charity at some of its restaurants in this pilot program.
And the countdown is on today. Oprah begins taping her final week of shows, though in an interview with "USA Today," Oprah says she has not yet decided whether to tape her final show live on May 25th.
AMERICAN MORNING will be right back after this break.
(COMMERCIAL BREAK)
CHETRY: Twenty-eight minutes past the hour. Donald Trump taking himself out of the 2012 presidential race, making the announcement yesterday.
(BEGIN VIDEO CLIP) DONALD TRUMP, ENTREPRENEUR: After getting so many calls from Bob and from Steve and everybody, I've decided that we are going to continue onward with "Celebrity Apprentice." We're going to continue making lots and lots of money for charity. I will not be running for president as much as I'd like to.
(APPLAUSE)
And I want to thank everybody very much. Thank you very much.
(END VIDEO CLIP)
CHETRY: Joining me now live from Washington, our senior political editor Mark Preston.
You know, the press has taken a few lumps. People are saying, oh, you played right into his hands. But, I mean, he sat there and said he was going to run over and over again or said he was at least strongly considering it. Is this just the biggest publicity stunt ever for a reality show?
MARK PRESTON, SENIOR POLITICAL EDITOR: You know, Kiran, it was too delicious for us not to try to hang on every word that Donald Trump said. He just made great television. But you know, I think at the beginning, it was a stunt on his part and then after a while, when he saw his name rise in the polls, I think he started to believe it himself. But as he got pushed by NBC to finally make a decision about what to do with his show, and NBC had said that look, bottom line is, we're going to go on with the "Celebrity Apprentice" even if Donald Trump is not around. I think Donald Trump realized that he had to get out. But you know what, he is not leaving us, though, Kiran. In fact, in his statement yesterday, not only did he say, he plans to continue to be in the middle of the debate, he also said that he is going to be pushing, you know, the politicians and the candidates for office on some very big issues, including the unsustainable debt and the lack of global competitiveness. So the fact of the matter is Donald Trump is still going to be playing some kind of part in this presidential race.
CHETRY: It will be interesting, though, because he announced he's getting out, Mike Huckabee, former Arkansas governor also saying he's not going to run. So who benefits the most from their exits? PRESTON: You know, a great question especially this early in the race. Let's look at this CNN Opinion Research Corporation poll just taken a few weeks ago where we've asked that question specifically, bottom line looks like Mitt Romney right now would benefit the most.
He rises to the top. He is considered the frontrunner, but with the fact that Mike Huckabee is out, and of course, he is the Republican who did pretty well back in 2008 and he is now a Fox News contributor.
With Huckabee out, he appealed to social conservatives, so who do those people go to? It looks like they would go to Michele Bachmann, she's a congresswoman from Minnesota.
You know, they could also go to Hermann Kaine, he's an Atlanta businessman who's going to announce his run on Saturday. And of course, Rick Santorum who's a former Pennsylvania senator so the social conservatives are going to be split up now, Kiran.
CHETRY: All right, Mark Preston for us, to be continued. We'll see who does end up benefiting when the new polls come out, but very interesting to the at least the guys that got a lot attention, out of the race now. Mark Preston, great to see you. Thanks so much.
PRESTON: Thanks, Kiran.
CHETRY: For all the latest political news head to our website cnnpolitics.com.
ROMANS: All right, top stories now. Breaking news overnight, Arnold Schwarzenegger's stunning confession.
(BEGIN VIDEO CLIP)
ROMANS (voice-over): "The Los Angeles Times" is reporting he admitted fathering a child with a former member of his household staff. Schwarzenegger tells the paper it happened more than a decade ago, but he only told his wife, Maria Shriver after he left office this year and that led to their split.
Pakistan now says it will return the top secret tail fragment of the helicopter left behind in that raid. Senator John Kerry made the announcement from Pakistan, calling it step number one. He also said Secretary of State Clinton would visit the country.
Irish police defuse a bomb hours before Queen Elizabeth's history- making visit. Irish authorities say it was on a private bus. Another device turned out to be a fake.
(END VIDEO CLIP)
CHETRY: Well, it's being described as an earthquake in French politics. Dominique Strauss-Kahn, head of the powerful International Monetary Fund, and also a favorite to unseat Nicolas Sarkozy as France's next president, of course, in hot water today.
ROMANS: That was all before Strauss-Kahn was arrested here in New York City. Those political aspirations clearly have changed. He's accused of raping a maid in his hotel suite.
How is this news playing out in France? Nathan King is correspondent for France 24. He joins us now. Clearly the political establishment is in shock in France.
NATHAN KING, CORRESPONDENT, FRANCE 24: Absolutely, shock, disbelief. When they realized it happened, they had seen the pictures, all sorts of reactions from conspiracy theories to sympathy for Strauss-Kahn.
ROMANS: Sympathy?
KING: You know, those pictures we saw of him --
ROMANS: The perp walk. They don't do that in France.
KING: It doesn't happen in France and they feel it happened so quickly. He was yanked off the plane, he was -- the Special Victims Unit, and then in court the next day. The grand jury has been called and he hasn't got bail.
CHETRY: Let's take the perp walk out of the equation. I understand France has a different cultural - when it comes to that. It's illegal to show pictures of somebody in handcuffs before they've been arrested.
KING: It is generally for the general population, but also with someone's stature like that, they tend to protect people in the elite.
CHETRY: See, in America they say that's favoritism if you have the money and you have power then you get special treatment.
KING: The implications of trial by media.
ROMANS: There's nothing more egalitarian than an NYPD perp walk. We have seen billionaires. We have seen CEOs. We have seen sports stars. We have seen everybody do that.
CHETRY: Taking that out of the equation, what about what he stands accused of, which is attempting to rape a woman who accidentally came into his hotel room to clean it and saw him there.
KING: I think the French press know the difference here. They've long put up with affairs and not reported them. France had a child out of wedlock when he was president and no one reported it. The foreign minister had a relationship with a defense minister of Syria and no one reported it.
CHETRY: And this man also had an affair, right, that was public with somebody at the fund, right?
KING: IMF, yes, back in 2007. And there are other allegations as well, coming out about potential attempted rape back in 2001. She had the allegation before, but now she might file a complaint and also, we're hearing rumors, of course, that there may be other cases here. So --
ROMANS: This has moved beyond the DSK, the seducer, into something criminal --
KING: The great seducer he's been called. It's kind of funny and there's a French image of reality. I remember during the Clinton/Lewinsky case, a lot of people said, well, it shows he can lead the country. He's strong, complete different reaction to over here.
So I think you're right, there's this dividing line because of the criminal complaint. But still, they do feel that he hasn't been given a chance to show the defense. We've got a grand jury and then potentially we could be going to trial on Friday.
This just doesn't happen in France and spilled also on the internet and Twitter that he's already guilty.
CHETRY: Right, and that, of course, the flip side of that, is people say, well, what choice did U.S. authorities have? Look at the Roman Polanski case. There are not extradition agreements on sex crimes and so this guy clearly has the means, he could go to France and we would never see him again.
KING: That's the very American perspective.
CHETRY: Sure is.
KING: That is the perspective in France and there is a real feeling there is a rush to justice here.
ROMANS: It is --
KING: A rush to justice.
ROMANS: We called it an earthquake when we led up to you, but seriously, what -- this man's stature in the international banking community, in French politics, in terms of countries that are in big trouble and need to go to the world for last-minute financing, you can't overstate how important he is.
KING: Yes. Can I make a parallel --
ROMANS: Please.
KING: Try to make a parallel. It's a bit like a John Edwards had won the nomination for the Democratic Party to run for president and then find out everything we know now and then you add a criminal element to it. You get how big that is.
CHETRY: Well, it's interesting. Where today we're talking about the news out of the "L.A. Times" that Arnold Schwarzenegger admitted fathering a love child. I mean, again, this is assuming it's outrageous --
KING: That's French and not French at the same time because he kept it secret for 10 years. The fact that he said I hurt everyone, that's not French. When asked about his love child, he said, yes, of course, but it's my private life. ROMANS: It's fascinating, the cultural difference is fascinating. How does the story play out going forward in France? I mean, I know in Brussels where there's a meeting of important ministers about what to do with the debt crisis. Some of these ministers are privately saying that they feel like he's being treated unfairly, how does this move on from here in the European perspective?
KING: I think it depends on the grand jury. Grand juries generally follow prosecutorial advice and we have a trial. I think if he got another bail hearing and he was released on bail, electronic tag or something like that in New York, I think there would be more sympathy.
But if he's going to spend months in Rikers and we get the photo leak to the press of this disheveled looking Gallic Bernie Madoff someone wrote in the press --
ROMANS: Can you imagine aspirations from the palace to Rikers Island is amazing --
KING: You couldn't make it up, could you? It's one of the most stunning places. Rikers Island isn't, is it?
ROMANS: No, it is not.
All right, Nathan King, correspondent for France 24. I'm sure we'll be talking to you again over the days -- thank you.
All right, new this morning, something many in Ireland believed would never happen, Queen Elizabeth arriving in Dublin just about a half hour ago.
(BEGIN VIDEO CLIP)
ROMANS (voice-over): Here are pictures of her stepping off her plane. It looks like she's wearing a beautiful Irish green. It's the first state visit by a sitting British monarch since King George V exactly 100 years ago.
To live pictures now, she's making symbolic stops on this trip. Her first formal event going on right now, a meeting and tree planting ceremony with Ireland's president.
(END VIDEO CLIP)
CHETRY: Still ahead on American Morning, Governor Scott Walker of Wisconsin joins us live. You may remember, of course, he took on the unions, but did he create more jobs? He's going to be joining us from Milwaukee in a few moments.
ROMANS: And Arnold Schwarzenegger's shocking confession, the former California governor telling "The Los Angeles Times" he fathered a child out of wedlock more than 10 years ago with a former member of his household staff.
That leads us to our question of the day. We want to know if a politician's private transgressions matter to their public life. Tell us what you think. You can e-mail us, tweet us, go to our blog, and find us on Facebook. We'll be reading your comments in about 10 minutes.
(COMMERCIAL BREAK)
CHETRY: It's 41 minutes past the hour. Welcome back to AMERICAN MORNING. CNN's been taking a critical look at the job crisis. It's something we're focusing on all this week with an in depth series "America's Job Hunt".
ROMANS: Few states, if any, felt the recession more than Michigan. Now a new report finds it may finally be on the way up. An economist at the University of Michigan predicts the state will add 60,000 jobs a year over the next three years. That would drop the state's unemployment rate to 9 percent by 2013.
CHETRY: And GM will have a big part to play in any Michigan comeback. This morning the company is announcing its investigating $2 billion in plants across eight different states. GM saying it's confident in its cars and the economy right now and that the move will save or create 4,000 jobs.
ROMANS: Meanwhile, Governor Scott Walker of Wisconsin made national headlines earlier this year when he took aim at state workers collective bargaining rights in an effort to balance that state's budget.
CHETRY: And now he's holding a special legislative session to make Wisconsin a destination for jobs. Joining us now from Milwaukee is Governor Scott Walker. Thanks for being with us this morning, Governor.
GOV. SCOTT WALKER (R), WISCONSIN: Good morning. My pleasure.
CHETRY: So you're touting the job creation, 24,000 new jobs in the first three months and this includes more than 11,000 in the manufacturing sector. There's a look that your state unemployment is actually down since last year. What do you believe you're doing right in Wisconsin?
WALKER: Well, I think it's a series of things and it's a contrast with other states. For example, Illinois since the beginning of year has raised taxes on corporations. They've not got a higher effective tax rate than we do in Wisconsin and they raised taxes on individuals.
We've actually lowered the tax, passed major tort reform to cut through the litigation cost, pushed major regulation reform to cut through the red tape. Even things as simple as repealing the state tax and help save accounts.
So that employers can put more of their money into putting workers to work and not into other government bureaucracies. All that I think is something that people are starting to take notice of.
CHETRY: Now the flip side of that is your cuts. People have been extremely critical of your education cuts, $900 million in state funding for public schools. How do you respond to the criticism that you're pro-business, but you're pro-business on the backs of students, teachers and teacher unions?
WALKER: Well, the difference is, unlike nearly every other state, 44 have deficits, almost every state is cutting money to local governments, schools, the difference to what you talked about early this year is we actually offset those reductions in state aid, those cuts to schools and otherwise with savings that we give them in terms of asking all of us, myself included, to pay a little more for pension, and a little more for health care.
Our total cuts are about $1.27 billion for schools and for local governments. Our savings are about $1.44 billion. So as you can tell overall, the savings more than make up for the reductions of state aid. That's a good way to provide long-term sustainable growth and it's something even the bond rating agencies have taken note of. Because they recognize you have to make structural changes to improve the economy.
ROMANS: Any job creation you manage to sustain here, and again, some would say that it's just been too recent for this administration to take credit for all of the job creation, but any sustained job creation is that going to more than offset job cuts in the public sector because of cutbacks?
WALKER: Well, again, in our case, the difference is unlike other states where they're talking about massive layoffs, we really essentially are protecting middle class jobs at the same time of protecting property taxpayers because we give the reductions and benefits --
ROMANS: But, you know, middle class teachers would disagree, I think. Middle class teachers in Wisconsin would disagree with you and say they're not being protected by the Scott Walker budget or the Scott Walker administration. I mean, even this weekend there were more protests over the weekend with protesters saying the fight is not over and recent polling shows quite frankly that Wisconsinites are divided on your plans for state workers.
WALKER: Right. That's because the national union bosses have come in and poured millions of dollars here to try to make this an issue of workers' rights when it's about protecting benefits and more importantly for them, it's about protecting union dollarship, union membership dollars that they're looking at. That's what they want to protect.
In the end, what you're seeing is school district after school district that have used our reforms have been able to offset major reductions in staff and instead make savings when it comes to pension and health care, still at rates far below what middle-class taxpayers are paying in the state.
And the good news we saw it just yesterday in the "Wall Street Journal," we saw it a week ago in "CEO" magazine, where they surveyed CEOs across the country. Wisconsin ranked 41st in terms of the place to do business a year ago, to moving up 17 places to number 24. That's a sign that job creators are taking note and more jobs are in the future here.
ROMANS: So, do you think other states -- I mean, so tax cuts as a way for governors to create jobs. I mean that's an ideological stand, no question. But do you think tax cuts are going to work to actually create jobs, especially when you're seeing the public sector potentially shedding jobs?
I mean, how do you make sure one creates more than the other one loses?
WALKER: Well again, in our case putting more money in the hands of the people, in our case, the people of the state of Wisconsin, has worked in the past. It worked for Tommy Thompson, it worked for Ronald Reagan nationally back a generation ago. It's going to work here again in Wisconsin.
And again, unlike other states that are making cuts, Democrat, Republican governors alike, instead of forcing cuts and layoffs of jobs, we actually ask a little bit more for pension, a little bit more for health care and we ultimate live give local school districts the tools to put the best and the brightest in the classroom, not to depend on seniority and union contracts but instead, performance.
CHETRY: I do want to ask about school districts. Just explain how this works, though, because you talked about the nearly nine percent cut to aid in schools, which I guess is a net of about $900 million in cuts. But then you're proposing school districts reduce their property tax authority by an average of 550 per pupil.
Is that about right?
WALKER: Well the two go hand in hand. The reason was we didn't want to do what other states are doing where they're reducing state aid and then forcing local property taxpayers to pick up the tab.
CHETRY: Right.
WALKER: That doesn't help, you know, the senior couple on a fixed income, a new family just starting out with a kid.
(CROSSTALK)
CHETRY: What I'm saying is how can the kids -- how can it not affect students in the actual classroom when you're talking about cutting and cutting and cutting?
WALKER: Because the difference is, the cuts aren't made in the classroom. They're actually made in terms of what people pay for health care. And health care we're asking them to pay a little bit over 12 percent. The average taxpayer in the middle class here in Wisconsin pays about 20 percent.
And when it comes to pension, we're asking them to pay half of the pension contribution, which again, is more than generous compared to what everybody else in the private sector is paying. Those reductions are being made up for the savings we get in those areas. So we're not forcing massive layoffs and we're not forcing massive cuts in the classroom.
CHETRY: You did take on an early, aggressive agenda and you could reap some consequences of that. They're talking about a recall election, possibly targeting you, as well as other senators.
Was it all worth it politically?
WALKER: Long-term, I don't worry about the next election. I worry about the next generation. And we've seen for too many decades, Republican and Democrat politicians alike have pushed off tough decisions. Well, the bills are due right now. We're going to pay them just like families are doing across the state of Wisconsin. When we do, our children are going to be better off because they're not going to be faced with more dire consequences than what we're facing today. That's really the long-term decision here.
ROMANS: You have your hands full in your job, obviously, but would you ever consider a Senate run for Wisconsin?
WALKER: No. I mean for me, I love being governor. I love helping to turn the state around. I have a goal of helping the people of the state create at least 250,000 jobs and we're going to get there over the next four years.
CHETRY: Well, we wish you luck. Obviously many states want to turn things around, your state being one of them.
Thanks so much for joining us this morning, Governor Scott Walker, appreciate it.
WALKER: My pleasure.
ROMANS: You know, on air and on-line we're on that job hunt this week and talking to America's governors is one way. They're right there on the front lines. I mean, you can check out all new CNNmoney.com for more on where the jobs are.
And we're going to be back right after a quick break.
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CHETRY: Fifty-one minutes past the hour. A look at your top headlines this morning before you get out the door.
Former California Governor Arnold Schwarzenegger reportedly fathered a child 10 years ago with a long-time member of his staff. The "Los Angeles Times" reporting that Schwarzenegger and his wife Maria Shriver separated after she found out about it this year.
The Libyan government says two buildings were attacked by NATO air strikes in Tripoli. One of the buildings is said to be the government's anti-corruption headquarters. The other housed the head of Tripoli's police force.
The LAPD will announce today in a news conference that they put up 300 billboards throughout the area in an effort to find the people who ambushed and severely beat a San Francisco Giants fan on opening day. Brian Stowe suffered severe brain injuries and remains in intensive care.
A study of community hospitals found patients admitted to hospitals on the weekend are more likely to die than those admitted on a weekday. Researchers say that low staffing levels and staff experience could explain the findings.
A federal appeals court letting NFL owners continue to lockout until June 3rd. That's when a hearing will happen on the legality of the lockout. Meanwhile, the owners and players are expected to resume court ordered mediation today.
You are caught up on today's headlines. AMERICAN MORNING will be back in 60 seconds.
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ROMANS: And welcome back. Our top story this morning, the stunning secret kept by Arnold Schwarzenegger. The former California governor reportedly is admitting he fathered a child out of wedlock more than 10 years ago with a member of his household staff. According to the "Los Angeles Times," it's a secret he kept from his wife, Maria Shriver, until he left office earlier this year. That's when she moved out of their Brentwood mansion.
CHETRY: So, it leads us to our question of the day. We want to know if a politician's private transgressions matter to their public life and service.
Amy Guild McGraw on Facebook writes, "It's not the transgression as much as the lying that's the problem for a public figure. In this era of expected transparency, the lies are things that are unforgivable."
ROMANS: Someone called Lady Big Mac on Twitter says, "Character matters. What you do in private reveals your true character. Lies, little or big, show a person is untrustworthy."
CHETRY: That was (INAUDIBLE) by a few of our people that wrote in, right?
Rebeccah McCabe Kavlie, sorry if I'm pronouncing that incorrectly on Facebook writes, "I believe no is the correct answer. As Americans, for the most part, we do not want big government in our private lives. Why should we delve into theirs? What you choose to do in your private life is just that, your private life."
ROMANS: And Ms. Sam Adams says, "I'm not electing a husband, I'm electing a leader. No other job requires passing a morals test. Why politics?"
Actually, there are several jobs that request -- that require --
CHETRY: There are people -- right.
ROMANS: And you'll probably get a credit check, also, if you're going through a job interview.
CHETRY: There are a number of jobs with morals clauses also.
ROMANS: That's right. That's right.
All right. Keep your comments coming. You can send us e-mail, you can send us a Tweet. You can tell us on Facebook. We'll read more of your thoughts throughout the show.
CHETRY: And we're just minutes away from something that we will never see again in space flight. Here's a live look, it's Kennedy Space Center in Florida. Shuttle Endeavour's successful launch yesterday. Well, Atlantis is now on deck for NASA's last ever space shuttle mission.
So, momentarily we'll be able to see Atlantis rolled from its processing hangar into what's called the vehicle assembly building. And that's where -- we're clearly supposed to have video for this -- that's where the twin rocket boosters and external fuel tank will be attached --
ROMANS: But your description is worth a thousand words.
CHETRY: Oh, yes. I would draw you a picture but I don't have a pen.
(LAUGHTER)
CHETRY: Atlantis will launch, by the way, in mid-July.
ROMANS: A whole new look at yesterday's launch for Endeavour from above. A New Jersey woman aboard her Delta flight headed for West Palm Beach, she took this video with her iPhone right out the window of her flight. You can see Endeavour right after it broke through the cloud cover on its way into space. Stephanie Gordon also uploaded the video to the web where it's been viewed almost -- get this -- 250,000 times.
CHETRY: Pretty cool. Neat shot.
ROMANS: That's right.
CHETRY: Well ahead, next hour, NBA star Grant Hill is here live. He's in a new groundbreaking PSA against gay bullying.
It's 56 minutes past the hour.
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