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American Morning
No Deal on Debt Ceiling; The Last Edition; Royals Bid Farewell to U.S.; Pakistan to U.S.: Keep Your Money; Back To The White House Today; Space Junk Alert; Unplug For Safety
Aired July 11, 2011 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: And good morning to you. I'm Kiran Chetry.
A lot going on. Let's get you caught up.
The end of the line for the "News of the World" -- the British tabloid shutting down after Sunday's edition amid new reports that the paper reportedly tried to hack the phones of 9/11 victims.
ALI VELSHI, CNN ANCHOR: I'm Ali Velshi.
A deal to raise America's debt ceiling is still out of reach. Talks continue today with the president warning that we've got 10 days left to get an agreement or risk default -- on this AMERICAN MORNING.
(MUSIC)
CHETRY: And good Monday morning to you. Start of another week here on AMERICAN MORNING. It is July 11th.
Nice to see you back.
VELSHI: Great to see you.
CHETRY: The shuttle went off on the first try.
VELSHI: I couldn't believe it. We were all thinking the weather was horrible but it went off. I can't get the three of us together a whole lot. Christine is off for a while, she's having a little bit off a break.
CHETRY: Summer vacation, right?
VELSHI: But we have a lot of news, whether without Christine.
Up first: no deal on raising the debt ceiling. Last night, talks at the White House fizzled out. President Obama making it clear with 23 days to go before America defaults on its debt, Congress has got to agree on a plan to raise the debt ceiling within the next 10 days.
President Obama and top congressional leaders will try again today and all week if they have to. The president will hold a news conference this morning at 11:00 a.m. Eastern.
Dan Lothian is at the White House this morning. Dan, what's holding up the deal and what's the president going to be talking about at 11:00 this morning?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, look, the bottom line here is tax hikes even for the wealthy Americans, Republicans saying that in this economic environment, that this is not the time to boost taxes. But the White House believing that this is the only way to get the revenue they need to reach those numbers.
As you pointed out, no agreement in that meeting yesterday, so the president calling on these congressional leaders to return to the White House today for more talks with an eye on what could pass both houses.
Now, the meeting yesterday lasted for about 75 minutes, wrapped up when those congressional leaders went back to their staff to start hammering out some of the details.
The bottom line here is that the president is still pushing for a bigger deal, up to $4 trillion in cuts and also tax hikes because he believes that now is the time to essentially seize the moment to do something that's good for the economy, long term, and the president not willing to accept any kind of smaller deal.
We heard the same thing from Treasury Secretary Timothy Geithner when he made his rounds on the Sunday morning shows.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, TREASURY SECRETARY: This is hard. You know, it's politically very hard. But this is a grave moment for the country. We need to do something very big, very substantial, to bring our long- term deficits down over time. We have to do that in a way that's good for the economy, so we give more support for this economy still healing from the great recession. And it's going to require both sides to compromise.
(END VIDEO CLIP)
LOTHIAN: So, right now, what happens, well, Republicans thinking that what they were able to accomplish in the Biden talks, the Biden-led group, is probably the most viable option. We heard that from Speaker Boehner yesterday. So, it will be interesting what happens as those leaders return here to the White House today.
Of course, we heard from the Democrats yesterday saying they're willing to stay at this until they get something done, Ali.
VELSHI: Yes. It was kind of weird to see it was sort of 75 minutes of negotiations yesterday. We do 75 minutes a day. We're never going to get this deal done.
Dan, thanks very much. I know you're working a lot more than that.
In the next hour of AMERICAN MORNING, we're going to try to hash out specifically the issues that divide the two sides when we're joined by Democratic Congressman Steve Israel of New York and Republican Congressman Tom Price of Georgia.
CHETRY: A lot of made of the fact that, you know, there are people that are digging in to completely polar opposite positions, liberals as well as conservatives. And those in the middle trying to get a deal done, it's proving to be difficult.
VELSHI: Very frustrating and difficult, yes.
CHETRY: Leon Panetta is rallying the troops with his first visit as defense secretary to the war zones in Iraq and Afghanistan. Panetta is in Baghdad this morning where he's meeting with U.S. forces as well as Iraqi leaders. He says Iraq has to do more to prevent insurgent attacks on Americans with Iranian weapons.
(BEGIN VIDEO CLIP)
LEON PANETTA, DEFENSE SECRETARY: I would like for Iraq to exert more of an effort to go after those extremists that are making use of these weapons -- that if we are going to be partners, they have a responsibility to be able to protect against that kind of attack occurring.
(END VIDEO CLIP)
CHETRY: All 46,000 remaining American troops are withdrawing this year under an agreement between the two countries. Iraqi leaders are debating whether to request U.S. troops stay in the country beyond 2011.
VELSHI: Well, this morning, Pakistan telling America: keep your money, after the U.S. announced that it's withholding $800 million in military aid. This is more evidence of the growing rift between the U.S. and Pakistan. White House Chief of Staff William Daley says it's in response to Pakistan's decision to cut back on counterterrorism operations after the killing of Osama bin Laden. The U.S. typically gives Pakistan more than $2 billion a year in security assistance.
U.S. joint chiefs of staff admiral -- chairman, Admiral Mike Mullen, says China should no longer be described as a rising power, declaring it's now a full-fledged world power. Mullen made the remarks at the start of a four-day visit to Beijing. He called on China to use its strength and influence to become a global partner in addressing security challenges in Asia and beyond.
CHETRY: Meantime, we're hearing Jay Dugard speak publicly for the first time about her 18 years in captivity at the hands of Phillip and Nancy Garrido. Dugard was just 11 years old when she was kidnapped by Garrido, a convicted sex offender in 1991 as she was walking to school. She talked about the long, horrifying ordeal with ABC's Diane Sawyer.
(BEGIN VIDEO CLIP)
DIANE SAWYER, ABC NEWS: You would never know what she survived unless you notice how her face changes when she speaks of the past and the charm around her neck, it's a pine cone. JAYCEE DUGARD, ABDUCTED JUNE 10, 1991: Back then it was the last thing I touched, you know, the last grip on me. Now it's a symbol of hope and new beginnings and that there is life after something tragic.
(END VIDEO CLIP)
CHETRY: Amazing that she's turned out the way she has. She's 31 years old. Again, she raised two children that were fathered by the guy who kidnapped her.
VELSHI: There's a lot of stories I understand. This one is very hard for me to understand how she appears to be a normal person.
CHETRY: Yes. And she wrote the book "A Stolen Life." It's being released tomorrow and that's why she is doing some interviews to talk about it.
VELSHI: Truly remarkable.
All right. Reports of a Casey Anthony confession by the way, if you've been seeing this pop up in your Facebook inbox, turn out to be an Internet scam. Experts at "PC World" uncovered the scam on Facebook. They say clicking on the confession link allows attackers access to everyone in your Facebook network.
Casey Anthony is set to be released from prison this coming Sunday.
CHETRY: Well, a day after the "News of the World" ends, basically, there are more stunning allegations now against the paper. "The Daily Mirror" of London reporting that staffers with the new defunct tabloid actually tried to hack into the phones of 9/11 victims.
Meanwhile, Rupert Murdoch arrived in London yesterday, meeting with the chief executive of his newspaper division, Rebekah Brooks, she headed up "News of the World" and Murdoch is publicly backing her, insisting she didn't know what was happening.
The final edition of the paper was published yesterday. Five million copies were printed, that's nearly twice the usual run. The paper also issued a full page apology.
Dan Rivers is live in London this morning with more on this.
A lot of people wanted to get their hands on that final edition.
DAN RIVERS, CNN CORRESPONDENT: Yes. It's ironic, isn't it? A paper that has been the subject of such revulsion here, and public outcry, when they announced they were putting out that final edition, they had to double the print run, such was the demand for that final -- I suppose many people think of it going to be a piece of history, really. It's been going for 168 years. It is an institution here.
But, now, news perhaps victims of 9/11 could also have been targeted by the illegal practices of the "News of the World," hacking into their phones. Now, this has not been confirmed by CNN. This is coming from a newspaper here, a rival tabloid, "The Daily Mirror," saying a former New York policeman was contacted supposedly by journalists from "News of the World," trying to get phone numbers of the families of victims.
But it does fit in with the picture, I suppose, that they were willing to go to almost any lengths to get a story during those years -- albeit hacking into the cell phones of murdered school girls, the families of fallen soldiers in Afghanistan and, if this is true, the families of people killed in 9/11.
CHETRY: Dan Rivers, wow. All right. Thanks so much.
How far will newspapers go to get a story, especially in terms of tabloid journalism? We're going to be speaking about it at 6:40 when we're joined by the editor at large of "The Daily Beast," Lloyd Grove.
VELSHI: And one of the things we want to know is how far they go here in the United States to get those kinds of stories.
Well, it's a troubling trend for workers who smoke. More and more companies are charging employees who are smokers higher health insurance premiums than their nonsmoking colleagues. It's our question of the day. Is it fair to ask employees who smoke to pay more for health insurance?
Send us an e-mail, a tweet, tell us what you think on Facebook. We'll read your comments through the course of the show.
CHETRY: All right. Also, women's world cup semifinals.
VELSHI: Oh, my gosh! That was crazy.
CHETRY: One of the most riveting -- are you being serious? Because I know you're not a huge soccer fan.
VELSHI: I went to the World Cup finals.
(CROSSTALK)
CHETRY: Yes. I mean, you only went there because cool people invited you. It's not that you wanted to see the game.
VELSHI: No, no. I went on my honeymoon.
CHETRY: Anything to avoid those talks.
(LAUGHTER)
CHETRY: All right. Well, in a shoot-out yesterday, the U.S. stunned Brazil. So, you were into this yesterday?
VELSHI: Yes.
CHETRY: So, it was tied 2-2 and then the U.S. edged Brazil, 5-3 in penalty kicks, and check out what has to be one of the most amazing goals ever, here it is.
(VIDEO CLIP PLAYS)
CHETRY: That was Megan Rapinoe, blasted it from 30 yards away, Abby Wambach with the header into the back of the net. The U.S. advances now to the semifinals. They're playing France on Wednesday. So, you're not going to be in Wednesday?
VELSHI: No, I'll be in. I was at a baseball game yesterday and they were showing this game on the screen while the baseball game was going on, that's how big a deal that was.
CHETRY: Well, we were -- we were watching on Saturday at the pool. They had one little TV, and it was about four deep with guys because Derek Jeter's with five hits.
VELSHI: Five hits, passed his 3,000, 3001, 3002, 3003.
Still on sports, by the way, the Tour de France, known for its spectacular crashes, this one was just bizarre. Look at that. Oh!
CHETRY: Hit with -- that was a car --
VELSHI: Yes.
CHETRY: For a TV station, right?
VELSHI: French TV station car sideswiped the rider, sending him into another competitor, one to the pavement, the other soared off road, right into a barbed wire fence. Apparently, they both escaped with only cuts and bruises although barbwire cuts hurt.
Like true athletes, they got back on their bikes and finished the race. The two cyclists were awarded a prize for most combative riders.
CHETRY: How do you know barb wire hurts?
(CROSSTALK)
VELSHI: There's no such authority, no.
CHETRY: Well, he did it. Yankee star Derek Jeter has joined one of baseball's most exclusive clubs, the 3,000 hit club. And he is just the 28th player and he's only Yankee ever to do it.
VELSHI: Yes.
CHETRY: Jeter smashed a homer in the third inning off Tampa Bay's David Price. That this was on Saturday. The ball flying into the first row bleachers in left field, into the hands of life-long Yankees fan Christian Lopez, who showed class. Lopez returned that historic ball, back to Jeter, got a standing ovation.
VELSHI: Look at them trying to get that ball out of him.
CHETRY: I know. And he didn't ask for anything in return.
But the Yankees did one better. They gave him tickets in the luxury box for the rest of the season. And he got a picture taken with his hero. That's -- that's pretty cool.
VELSHI: That was pretty cool.
CHETRY: So, Jeter keeps the ball. He keeps the uniform he was wearing that day, the bat, the helmet. I mean, you know, the glove.
VELSHI: Three thousand hits, you know, you're entitled to a few things.
All right. Coming up on AMERICAN MORNING: sharks, an unwelcomed sight for many sun worshipers at a popular beach spot. We're going to tell you where the great whites are.
CHETRY: I think I would just faint on sight.
VELSHI: That would scare me, too.
CHETRY: Potentially and -- dangerous and potentially deadly heat wave crossing the country. Temperatures are soaring into the triple digits in many, many places today. Reynolds Wolf has our forecast right after the break.
VELSHI: And from the red carpet to Skid Row, Prince William and Catherine, the duke and duchess of Cambridge, made their weekend in Tinseltown quick. We'll tell you what they were doing on Skid Row.
You're watching AMERICAN MORNING. It is 13 minutes after the hour.
(COMMERCIAL BREAK)
VELSHI: Welcome back to AMERICAN MORNING.
Wreckage from a satellite is on a potential collision course with the International Space Station and the shuttle "Atlantis." So NASA is tracking this space debris this morning at 3:02 Eastern.
However, the crew woke up to the sounds of Chumbawamba's "Tubthumping." That's a good song to wake up to.
CHETRY: Yes. Love that.
VELSHI: Gets you going, right?
CHETRY: Yes.
VELSHI: "Atlantis" crew members then transferred equipment and supplies to the space station. On Sunday, "Atlantis" flawlessly docked by executing what's called a backflip.
Check this out. Check out how it docks. It's - it's totally a backflip.
CHETRY: That is so cool.
VELSHI: It rolls over, so its underbelly is up. This allows crew members to check for any problems. I would think you would use cameras for that. And at the space station, the astronauts will research the potential for a space refueling system. The mission, as you know, the last one of the 30-year space shuttle program.
You asked a good question this morning, Kiran, as we were getting ready for the show, why do they need to be woken up at 3:02 in the morning, to which Brian, our producer said, space, it's not 3:02 in the morning to them necessarily.
CHETRY: That's right. They're - they're just state - it's almost -
VELSHI: It's just time.
CHETRY: It's just time.
VELSHI: Right.
CHETRY: Till they get their eight hours.
VELSHI: Yes.
CHETRY: Just happens to be 3:02 here, on a very strict schedule.
VELSHI: Yes.
CHETRY: That's all controlled by Houston.
VELSHI: Yes. Right.
CHETRY: All right. Well, this is not the most comforting sight. Great white sharks spotted off the waters of Cape Cod. Three of them actually. Officials are warning swimmers to stay away from seals because that's a favorite snack for sharks. But the sightings are, of course, attracting some tourists.
Local vendors are also cashing in. Stores are offering plenty of shark-themed gifts and souvenirs. No beaches, though, have been closed yet.
VELSHI: All right. I wouldn't be tempted to be near a beach where there was a shark sighting.
CHETRY: You know, I love - don't - don't hang around with the seals. I don't even know where the seals are.
VELSHI: Right.
CHETRY: OK?
VELSHI: Sure. OK.
CHETRY: All right. I was going to hang out with the seals for the day, but the sharks made me think otherwise. VELSHI: The only reason that would be compelling even with sharks around to be, you know, the ocean is the - the heat in the country right now. In fact, in some places it's pretty dangerous. It's sweeping through the Central and Southern Plains this week.
The temperature is reaching triple digits, 15 states are under a heat advisories. That means temperatures are expected to exceed 105 degrees. The warnings remain in effect through tomorrow. Officials suggest staying indoors as much as possible.
CHETRY: Yes. Eighteen and a half minutes past the hour.
We'll check in with Reynolds Wolf. It looks like, really, nobody is escaping this heat wave, at least in this country.
REYNOLDS WOLF, AMS METEOROLOGIST: Oh, absolutely. Especially - I'd say at least a third of the nation is going to be dealing with temperatures that are well above normal. We've got records that have been set across much of the landscape. We're going to show you who got what coming up in a few moments.
But I'll tell you, for one of the first things you're going to do this morning, some of you who's trying to hop on a plane and just get to your point where you're trying to get to, I'm going to tell you, right now it's going to be a tough haul for you in Chicago and Detroit. Delays possibly over an hour, delays possibly in Tampa and Miami, Denver, even into San Francisco.
But, again, the Midwest the big issue is going to be a cluster of thunderstorms that have produced over - up to 6,000 lightning strikes per hour in many places south of Minneapolis, north of Des Moines, everything pushing towards Milwaukee and Chicago, hence the reason for the delays. And eventually when you're moving across the Great Lakes into spots like, say, Detroit.
As the rains coming down this morning as temperatures have been coming up. Just yesterday, take a look at some of the records. Wichita, 111 degrees; Dodge City 108; 107 in Tulsa; Joplin with 106, this reading in Joplin the highest they've had in a quarter of a century. Oklahoma City went up all the way to 105 and we can anticipate that heat to be just as brutal today. In fact, I guess I mentioned a great chunk of the country south of the Great Lakes into parts of the Ohio Valley, even into the Central Plains is going to be rosy.
Now, today, the heat index, which is a combination of both your temperature combined with that high humidity will make things just ridiculous. Little Rock 111 is what's it's going to feel like; St. Louis 112 up by the Archway; 106 for Nashville; 109 into Montgomery. And as we wrap things up, tomorrow you'll notice basically the same deal. St. Louis with 106; 110 in Montgomery; 104 in Atlanta; how it's going to feel in Columbia with 110 degrees also.
Brutal times, it is summer. Folks be careful out there and take it easy. Let's pitch it back to you in New York.
CHETRY: Yes. Wow. And that's so red it's purple. That means - VELSHI: Yes.
CHETRY: -- stay inside if you can. All right.
WOLF: Usually that's a good plan. Absolutely. Roasting, guys. The map is so hot. I'm going to stay away from it.
CHETRY: Use for your pocket square. I love it.
WOLF: Real deal Holyfield. You got to use it on hot days like this.
CHETRY: Thanks, Reynolds.
WOLF: You bet, guys.
CHETRY: Oh, it was a whirlwind weekend in California, by the way. Prince William and Catherine, the Duke and Duchess of Cambridge headed on their North American tour. They were playing polo. They're raising money. They were - they're busy.
VELSHI: He was - like I said, he's keeping busy. The whole polo thing.
It's ending now. From the glamour of the red carpet to the grittier side of Los Angeles, the royal couple made the most of their quick visit.
CNN's Max Foster joins us live from Los Angeles. Max, I keep seeing these references to them being on skid row. What - what is that about?
MAX FOSTER, CNN ROYAL CORRESPONDENT: Yes. Well, it's been a whirlwind as you say. They fitted in so much over the weekend in California. And they're back in the U.K. now. I know they're looking forward to just hiding away in that cottage in North Wales.
It's been really intense 11 days for them across North America, ending up of course in California. Let's have a look.
(BEGIN VIDEOTAPE)
FOSTER (voice-over): After taking Canada by storm, it was time to visit California. The Duke and Duchess invited some friends around to the Console General's house where they were staying.
The next morning, it was off to Santa Barbara for a game of polo. The duke, well, in his open words, looking forward to letting loose after a busy few days. His team won and a proud duchess presented her husband with a trophy and a kiss.
On Saturday night, they hit the red carpet.
(on camera): Well, the Duchess has arrived and she hasn't disappointed.
(voice-over): The dress by Alexander McQueen, wowed the Hollywood A- listers inside from the red carpet to skid row. On Sunday, the couple threw themselves into an art class with kids from this very deprived neighborhood. The artistic duchess showing her skills. And their last engagement was a war veterans' job fair.
(on camera): So this is the final stop on this very successful North American royal tour, but in many ways this is the most important stop, particularly for the Duke.
HRH PRINCE WILLIAM, DUKE OF CAMBRIDGE: I would just say on behalf of us both, how grateful we are to have been welcomed so warmly in the Golden State and City of Angels. Thank you so much.
FOSTER (voice-over): The public would have like to have gotten closer to the couple in America, but the trip has confirmed them as the biggest stars on the planet right now.
(END VIDEOTAPE)
FOSTER: Well, there you go. The tour has ended and the whirlwind has ended, guys. And I'm sure they - as I say, they're looking forward to resting after all of this, you know. It was a great success in Canada, a success in California. It was their first tour and I think they're pretty pleased with themselves.
VELSHI: Yes. We've heard nothing but -
CHETRY: Yes. Not a misstep at all (ph).
VELSHI: -- kudos for them. Yes.
CHETRY: The only thing there was one errant gust of wind, right, blew up her dress at one point and everyone went crazy about that. I mean, what are you going to do?
FOSTER: That's right. Yes. You had all these photographers following them -
CHETRY: Of course.
FOSTER: -- waiting for this moment when they can catch them off guard. Never happened.
VELSHI: Very good. Max, hope you have enjoyed it. You got to see a few of these things. I know you were working hard, but it was a fun trip all around. Max Foster for us.
All right. Ahead on AMERICAN MORNING, if you want to get a free credit score, it's going to become a lot easier to do that. We'll explain right ahead.
CHETRY: Also, the Rihanna concert that got too hot literally. We'll tell you about the fire that sent the fans home early.
VELSHI: And we want to hear from you on our question of the day. Is it fair to ask employees who smoke to pay more for health insurance? Send us an e-mail, a tweet, tell us what you think on Facebook. We're going to read your comments a bit later on the show.
6:24. Twenty-four minutes after the hour.
(COMMERCIAL BREAK)
VELSHI: Twenty-six minutes after the hour. "Minding Your Business" this morning.
U.S. stock futures are trading lower ahead of the opening bell so far, after the dismal jobs report on Friday pushed the Dow, the NASDAQ and the S&P 500 lower for the day. But stocks were actually higher overall last week.
ALCOA, America's largest aluminum producer, kicks off a week full of second quarter earnings on Wall Street today. That report comes out after the closing bell this afternoon. Google, JPMorgan Chase, Yum! Brands, Citigroup, all of them are releasing earnings this week.
Also this week, Federal Reserve Chairman Ben Bernanke will face tough questions about the economy after that weak jobs report. The Fed chief testified before the House Financial Services Committee on Wednesday.
Coming to a store near you, more electronic receipts. More retailers offering to sell - to send receipts by e-mail to save paper. Nordstrom and Gap started a few months ago, but watch out you could get store offers clogging up your inbox if you give out your e-mail address.
People don't like being left in the dark. Pepco is the most hated company in America according to a new American customer satisfaction index. Frequent power outages gave them the title. In second place, Delta, customers complaining about shelling out more for food and drinks plus baggage fees. Fee increases also push Time Warner Cable up to the third spot. And Facebook making it to the top 10 because of privacy concerns.
Want a free credit score, then get rejected for a loan. Starting later this month, lenders would have to tell you what credit score prevented you from getting a loan or credit card. The new measure goes into effect on July the 21st.
Don't forget for the very latest news about your money, check out the all-new CNNMoney.com.
AMERICAN MORNING will be right back after the break.
(COMMERCIAL BREAK)
VELSHI: Punishing Pakistan: the U.S. deciding to withhold $800 million in aid as the divide grows deeper between the two countries -- on this AMERICAN MORNING.
(MUSIC)
CHETRY: Thirty minutes past the hour. Time for our top stories. Debt talks resuming again today, and both sides say that they will go around the clock to get this deal done. Yesterday, the president met at the White House with top congressional leaders and when it was over, still no agreement. The president is warning that we have just nine days to raise the debt ceiling or risk default.
VELSHI: The British tabloid "News of the World" silenced forever. The final edition rolled off the presses yesterday. Now, it's being accused of trying to hack the phones of 9/11 victims.
The newspaper is apologizing for the hacking scandal that forced its owner Rupert Murdoch to shut it down.
CHETRY: And the Midwest in the grips of a smothering heat wave that's not letting up. Fifteen states are facing heat advisories today. And that means temperatures could top 105 degrees. The cities in four states, Missouri, Oklahoma, Tennessee, and Indiana could see the heat index top out at about 115 degrees.
VELSHI: Relations between the United States and Pakistan may have hit a new low. The U.S. announcing it's withholding $800 million in military aid. The response from Pakistan is interesting. It's defiant.
CNN's Reza Sayah is following this.
CHETRY: Yes. He's live for us in Islamabad.
This is something that had been talked about a lot, that there's this sort of threat hanging over the relationship. Will we take away money? They seem to answer saying, do it.
REZA SAYAH, CNN CORRESPONDENT: Yes. The message from Pakistan is a defiant one. They're essentially saying you can keep your money, we don't need it.
I spoke with a spokesperson for the military here and he claimed that Pakistan has been launching these operations against militant groups in northwest Pakistan without U.S. help and without U.S. money and he claimed that those operations will continue. The problem is, those statements don't square with previous demands made by the Pakistani government from the U.S. demands for more money, more resources, precisely to fight these militant groups. So, he sees some gamesmanship there by Pakistani officials.
But if you look at this move from Washington, the withholding of $800 million -- it's a move that could certainly substantially change the complexion of this troubled relationship. Previously out of Washington, we had heard a lot of accusations, finger-pointing, rhetoric.
But this is certainly more than rhetoric. It's a specific move that can impact this relationship and it's basically sending a message to Pakistan that we're not happy with your cooperation, your efforts, and if you want to continue to get our money and help, you're going to have to make some changes. It signals a more aggressive approach. The problem is, a more aggressive approach hasn't always gone over well in Pakistan. They've never liked this, what they call this carrot and stick approach. They view it as disrespectful and I think already, many top officials here in Pakistan are seeing this move from Washington as disrespectful and it underscores the trouble and uncertainty of this relationship, guys.
CHETRY: All right. Reza Sayah for us this morning in Islamabad, thank you so much.
VELSHI: Defense Secretary Leon Panetta making his first visit to Iraq in his new role. He's been meeting with U.S. troops who are scheduled to leave Iraq by the end of the year. Panetta says he plans to press Iraqi leaders for a decision on whether they want U.S. forces to remain beyond this year.
CHETRY: Joint Chiefs chairman, Admiral Mike Mullen, says that china is no longer a rising power. It's now a bona fide world power. Mullen's remarks coming at the start of a four-day visit to Beijing. The trip is one of his last as America's top commander. Mullen is retiring in the fall.
VELSHI: Stage a riot and make a run for it. A brazen jailbreak caught on tape. It happened last month in Huntsville, Texas. Inmates staging a fight to get guards to open the door to a secured area and then two prisoners run for it. One of them escaped after a scuffle with guards, but was captured three days later.
CHETRY: And a fire at a Rihanna concert in Dallas sent everyone home early Friday night. There was a malfunction with the pyrotechnics, sparks then fell from the top of the stage. There you see it happening afterward. The pop star tweeted, "We set the stage on fire tonight literally." Rihanna promising her fans in Texas, "I got to come back."
VELSHI: Coming up on AMERICAN MORNING: It's the end of the line for the British tabloid "News of the World." It's been shut down over a remarkable phone hacking scandal. Now could tabloids here in the U.S. be using the same kind of tactics? We're going to ask the editor at large of "The daily Beast," Lloyd Grove.
CHETRY: We also want to hear from you on our question of the day. Is it fair to ask employees who smoke to pay more for health insurance? Some companies are considering doing it.
Send us an e-mail, a tweet, or tell us what you think on Facebook. And we'll read your comments a little bit later.
Thirty-five minutes past the hour.
(COMMERCIAL BREAK)
VELSHI: Welcome back.
After years, 168 years, in fact, in circulation, the British tabloid "News of the World" has been shut down. Five million copies of the final edition rolling off the presses yesterday, selling out in many locations. The tabloid was bowing out in disgrace. Phone hacking scandal, a particularly serious one, involving thousands of sports stars, royal aides, politicians, celebrities and even the voicemail of a missing murdered girl giving her family false hope that she was still alive after they saw activity on her phone line. I mean, it was really a tragic situation.
CHETRY: Yes. And then today, reports of possibly hacking into the voicemails of 9/11 victims.
Joining us now is Lloyd Grove, editor at large of "The Daily Beast." He's also a former gossip columnist for the "New York Daily News."
Thanks so much for joining us this morning.
LLOYD GROVE, THE DAILY BEAST: A pleasure.
CHETRY: So, we talk about the tabloid culture here. I mean, this obviously seems to be taken to the extreme with the "News of the World." But just how hard core is the tabloid culture in London?
GROVE: It's tremendously hard core to the point of being illegal, obviously. I mean, in 2003, Rebekah Brooks, kind of, had a gaffe, meaning honesty, and told parliament in a hearing that they actually paid police and also said that bugging, you know, secret transmitting devices, all that, was fine if it was in the public interest.
But I think she was confusing the public interest with interested -- the public is interested in it, titillated by it.
VELSHI: Right. That's a very interesting distinction that you just made. Public interest versus public being interested.
Even in the United States, people are paid off for things for stories. What's -- where is the line? Where do you draw the line?
GROVE: Well, "The National Enquirer," "The Star," they've been gauged in, quote/unquote, "checkbook journalism" for a long time. Can I say that television, news operations sometimes do that?
VELSHI: Sure. People do pay for things. Sometimes it's not a straight payment, but sometimes it's payments --
GROVE: Licensing for video.
VELSHI: We do pay for licensing for video.
GROVE: Sure. Licensing for videos, photos. I mean, $15,000 for a photograph and then sit down for an interview, that's how, you know, a large news operations get around that. And it's legitimate or not, depending on your opinion.
But in the mainstream media, even in the tabloids in the United States, that's not a very common practice. I was at "The Daily News" for three years. We didn't do that. I don't think "The New York Post" does that. CHETRY: I mean, is there a distinction? I mean, do people understand the distinction between tabloid, television and mainstream newspapers, and how much of those lines blurred over the years?
GROVE: Well, if you mean by people, consumers, the answer is no. It's all one big sort of I'm a consumer all this stuff is coming over. A lot of people tell me that they get their news from "Entertainment Tonight." So, I don't think the public at large makes these distinctions and I'm not sure if they understand or even care about the implications. I mean, with 9.2 percent unemployment, you know?
VELSHI: Let's just go down the continuum, though, because what the "News of the World" ultimately is accused of doing, in its most heinous, was hacking into people's phones, their voice mails, checking their messages, tapping their conversations, and in the case of this missing girl, her voice mail was full and then they would check the messages and delete them. And then the parents would be able to leave messages, making them think she's checking them.
GROVE: Sure.
VELSHI: Clearly, we cross a line beyond paying for information and photographs into something that most people on the street would think is illegal.
GROVE: Well, that's pretty heinous. And, in fact, it's a huge political issue in Britain right now. I think the parents of Milly Dowler are going to meet with David Cameron later this week.
VELSHI: Do these behaviors you describe, does one lead to another? In other words, does paying for photographs and licensing and things like that lead to eventually thinking that it's OK to hack? Or was there an absolute line that was crossed?
GROVE: Well, I mean, if hacking of, you know, politicians might have been a gateway drug as it were to hacking murder victims, and -- I mean, it seems like all bets are off in the U.K. There was nothing they wouldn't do.
CHETRY: For the staffers point of view, because I was reading a couple articles, you know, many of them said, look, we didn't -- there were a lot of good people here that didn't have anything to do with it and we're out of work now, and they're very insensitive, it appears, that the woman who oversaw the paper --
GROVE: Rebekah Brooks.
CHETRY: -- Rebekah Brooks, has hung on. And it appears at this time that she has the support of the head honcho, Rupert Murdoch, over there. And they're very, very upset about that.
How is it that the person who was in charge was able to keep -- I guess, her hand in it, keep working at the company when the paper folded?
GROVE: Well, I'll tell you what, News Corp is a publicly traded company and it does have a board of directors, but there's one guy who counts and that's Rupert Murdoch. And if Rupert Murdoch decides he wants to keep this person, and he posed with her in front of his house in Mayfair yesterday, then that for the moment is it. But on the other hand, it's a huge political firestorm in Britain and she might not last.
VELSHI: Ultimately, this was a business decision. Advertisers over the last 10 days or so had been pulling out, their biggest advertisers. Some are now saying they're going to pull out from all of the associated publications. This wasn't a big part of the revenues.
But is this a big blow for News Corporation and that group?
GROVE: Well, even more important than the newspapers, how this is threatening a big deal to acquire the 100 percent of the BSkyB --
VELSHI: Right.
GROVE: -- which is satellite television operation there that News Corp controls but only owns 30 percent of now.
And so, I don't know whether, you know, this will happen. I mean, the Labour Party is saying let's day this and, you know, the stock is plunging. It could be a huge blow to News Corp.
CHETRY: Wow. All right. Lloyd Grove, editor at large of "The Daily Beast" -- great to see you. Thanks so much for being here.
GROVE: My pleasure.
VELSHI: Straight ahead on AMERICAN MORNING: new research shows how damaging secondhand smoke can be to your kids. And A.M. house call is up after the break.
CHETRY: Also, jogging while listening to your iPod, it can be dangerous. Why some states want to crack down on distracted exercising.
You're watching AMERICAN MORNING. It's 44 minutes past the hour.
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CHETRY: Forty-seven minutes past the hour. Here are look at your headlines.
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CHETRY (voice-over): They will try again today. President Obama and Congressional leaders return to the White House in an effort to negotiate a deficit reduction deal. The meeting last night left them no closer to resolving their differences.
Amid a growing scandal, the British tabloid "News of the World" shutting down after Sunday's final edition. New reports allege the paper tried to hack the phones of 9/11 victims. NASA still tracking a chunk of space debris, but officials now say they don't believe it poses a threat to the shuttle "Atlantis" and the International Space Station. No flight adjustments are being made to avoid the debris, which is said to be wreckage from a 1970s satellite.
The golf world is awaiting a special announcement later today from Tiger Woods. His message will be broadcast on the golf channel at 11:00 a.m. eastern time.
And it's a heat wave all right. Dangerously hot weather is expected in more than a dozen states today with temperatures hitting 105 degrees or higher in many places.
And another big box office weekend for "Transformers: Dark of the Moon." The sci-fi thriller was again the number one movie taking in an estimated $47 million. The comedy "Horrible Bosses" debut pretty well, making $28 million.
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CHETRY (on-camera): You're caught up on the day's headlines. AMERICAN MORNING is back after this break.
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VELSHI: Welcome back to AMERICAN MORNING. It is 51 minutes after the hour, which means, you know what that means?
CHETRY: House call.
VELSHI: Yes, house call. Time for an "A.M. House Call."
Tuning out during your outdoor workout could be hazardous to your health with pedestrian deaths rising. Some states are moving to crack down on distracted exercising. In New York, for example, there's a bill in the works to make it illegal for walkers and joggers to use any kind of electronic device while crossing the street. In Oregon and Virginia, a measure would fine bicyclists as much as $90 for riding under the influence of technology.
CHETRY: OK. First of all, why don't they go after drivers on highways that literally have noise canceling head phones on, and they're going 80.
VELSHI: But you do see people crossing with headphones. Mostly, I think, it's what more serious people --
CHETRY: Who do admit that cross the street.
VELSHI: Yes, I mean, constantly -- I will walk off a bridge one day.
CHETRY: I know.
VELSHI: Just because I'm doing this.
CHETRY: I hope I have my iPhone rolling at the time. VELSHI: And then, you'll save me, right?
CHETRY: Yes. And all that was, that story of other way was just another excuse for Ali not to exercise, right?
VELSHI: That's right. If I can't exercise with my iPod, I'm not exercising. I was going to start this week, too.
CHETRY: Exactly. And now, it's delayed yet again.
VELSHI: Absolutely ready. So, just get use to this because this is what it's going to look like for a long time.
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CHETRY: Also, two new studies take a look at the impact of secondhand smoke on children. One says that kids exposed to secondhand smoke in their homes are 50 percent more likely to have learning disorders. There's a second smaller study saying that most kids exposed to secondhand smoke think it's nasty or gross, and researchers say they are actually less likely to become smokers themselves.
I have a lot of friends who said that after riding too many years in childhood in a car that was basically a cloud of smoke, never touch it.
VELSHI: Yes.
CHETRY: Also for health news 24/7, go to CNN.com/health.
VELSHI: All right. Some major U.S. companies are now penalizing employees who smoke. It's a trend that's been going on for some time, and it seems to be picking up speed. They're asking smokers to pay higher health insurance premiums than their non-smoking colleagues.
CHETRY: Which brings us to our question of the day, is it fair to ask employees who smoke to pay more for health insurance? And we're getting a lot of responses.
Betty writes on our blog, "Absolutely. It's been well-documented for decades. Smoking increases your risk for and contributes to heart disease, lung disease, and cancer. Why should people who are looking after their health by making proper choices regarding diet and activity pay more for those who don't? Life insurance is based on lifestyle, why shouldn't health insurance."
VELSHI: But she brings another issue into here, because we're not talking about charging everybody who doesn't have a healthy lifestyle.
CHETRY: That's right.
VELSHI: For insurance. So, we're picking smokers. What about people who just eat poorly or don't exercise.
CHETRY: Yes. A lot of people have written in about that.
VELSHI: People like me should be excused because I'm not exercising because they're making it illegal to listen to your iPod.
Josh writes on Facebook, "I smoke and the answer is yes. It's not just fair but necessary. However, insurance companies should also do their part by covering smoking cessation drugs, nicotine patches, and gum. It's an addiction as bad as heroin, and it's time for the carriers to help people quit."
CHETRY: Joseph on Facebook, "I feel smokers are taxed enough. I'm not a smoke, but I do not feel smokers should pay higher health insurance. What about drinkers then? We should have to raise cost for everybody or it would be discrimination."
VELSHI: Except if you're healthy and you don't smoke or drink. Why should you get your cost raised?
CHETRY: No, he's saying that everybody who does something wrong, I believe.
VELSHI: Right, right.
CHETRY: Whether it's, you know, drinks too much, smokes. It doesn't maintain a healthy diet.
VELSHI: There's another comment off Twitter which is sort of a similar sentiment says, "Unless they're going to charge more for obesity and alcohol consumption, it's not right to single out smokers."
CHETRY: All right. Keep your comments coming, send us an e-mail, a tweet, tell us on Facebook, and we'll read more of your comments a bit later in the program.
VELSHI: All right. Just ahead, popping up next to Starbucks and subways places lined with virtual slot machines and people hoping to hit the jackpot. Are these places even legal? Have they found loopholes in some prehistoric laws? Poppy Harlow goes undercover to find out.
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VELSHI (voice-over): They've stopped the presses at the "News of the World." The British tabloid shut down over a phone hacking scandal and now comes a new report that says the newspaper actually targeted 9/11 victims. We're live in London on this AMERICAN MORNING."
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VELSHI (on-camera): Good morning. It's Monday, July 11th. I was pausing for effect.
CHETRY: Yes. Good.
VELSHI: Welcome to American Morning. I'm Ali Velshi.
CHETRY: And I'm Kiran Chetry. Christine Romans has the morning off.
VELSHI: I was waiting for Christine to talk. That's what I was doing.
CHETRY: And then you found out?
VELSHI: She's not here.
CHETRY: Well, first, the possible countdown to any type of economic meltdown could be just days away now. President Obama making it clear that with 23 days left to go before America defaults on its debt, Congress needs to agree on a plan to raise the debt ceiling in the next nine days. The president met with top Congressional leaders yesterday at the White House. They say no progress was reported, but they'll go back at it today.
Dan Lothian is live at the White House this morning. Where are the biggest sticking points? What's holding up this deal, Dan?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: It's really about taxes. Republicans saying that they don't want to see any tax increases even on the wealthiest Americans because of this economic environment. As we've pointed out, there was a lot of optimism going into that meeting over the last few days, and then, House Speaker John Boehner essentially backing out, abandoning those plans for that bigger deal which the president wants to do, up to $4 trillion in cuts and also tax hikes.
The president not backing away from that despite what Mr. Boehner has done and has invited those Congressional leaders back to the White House today to continue their discussions with an eye on what could potentially pass both Houses. We heard from yesterday on the Sunday morning shows treasury secretary, Timothy Geithner, pretty much the same message that we heard from the president that the big deal is the best deal for the country for the long-term good of the economy.
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TIM GEITHNER, TREASURY SECRETARY: This is hard. It's politically very hard, but this is a grave moment for the country. We need to do something very big, very substantial, to bring our long-term deficits down over time. We have need to do that in a way that's good for the economy, so we give more support. This economy is still healing from the great recession, and it's going to require both sides to compromise.
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LOTHIAN: So, what happens next? Speaker Boehner and other Republicans want to see sort of that mid-range plan, what we saw from the Biden group. He thinks that that's the most viable option. So, it will be interesting to see what lawmakers can come up with as they return here to the White House, and also the president will be holding a press conference today, a chance for us to ask questions about the direction that these negotiations are going.
CHETRY: We'll see how it goes.
Dan Lothian, thanks so much.
Coming up in the next half hour of AMERICAN MORNING, we're going to try to hash out some of the issues that divide the two sides. We're joined by Democratic Congressman Steve Israel of New York and Republican Congressman Tom Price of Georgia.
