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American Morning
Debt Ceiling Deadline; Tiger Woods Announcement: 11:00 A.M. ET; Second Quarter Earnings This Week; Student Gives Away Prize Money; U.S. Denies Military Aid to Pakistan; Atlanta School District Caught in Cheating Scandal; School Cheating Scandal; Jaycee Dugard's "Stolen Life"
Aired July 11, 2011 - 07:58 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Good morning.
I'm Kiran Chetry.
9/11 victims reportedly targeted by a tabloid that shut down in disgrace. "News of the World" publishing its final edition yesterday, but the scandal even more shocking today.
ALI VELSHI, CNN ANCHOR: I'm Ali Velshi.
A debt deal deadline from the president. Get an agreement hammered out in nine days or it may be too late to stop America from defaulting on its loan. Republicans and Democrats are heading back to the negotiating table on this AMERICAN MORNING.
CHETRY: And good morning to you. Thanks so much for being with us on this Monday, July 11th. Kiran Chetry, Ali Velshi. Christine Romans, taking some time off.
VELSHI: She is.
Well, one day after the demise of the "News of the World" newspaper, more stunning allegations against the tabloid. "The Daily Mirror" of London reporting staffers with the now defunct newspaper actually tried to hack into the phones of 9/11 victims.
CHETRY: Dan Rivers is live in London, this morning.
What are you finding out about this latest outrage, Dan?
DAN RIVERS, CNN CORRESPONDENT: Well, this is, as you say, coming from a rival tabloid, "The Daily Mirror." They are saying that the "News of the World" supposedly contacted a former New York policeman to ask him for numbers of families of those killed in 9/11, presumably with a view to hacking in.
Now, we don't know whether they were successful or not. That former policeman supposedly did not hand the numbers over. So, we don't know whether the hacking was successful, but it appears they attempted to, if this account is to be believed.
And that fits in with the bigger picture here of pretty much anyone you can imagine being hacked into, be it murder victim's families, families of fallen soldiers in Afghanistan, the families of terrorist attacks here in London. It is quite breathtaking.
The newspaper itself, of course, now has been shut down. But this political fire storm around these allegations continues to get bigger and bigger.
Let's have a listen to the solicitor who represents Milly Dowler's family. She was the 13-year-old schoolgirl who was murdered and whose phone was hacked into.
Here's what Mark Lewis said.
(BEGIN VIDEO CLIP)
MARK LEWIS, DOWLER FAMILY LAWYER: Their position is that they have said that she shouldn't -- that she should take responsibly and do the honorable thing and resign.
(END VIDEO CLIP)
RIVERS: Talking about Rebekah Brooks, the chief executive, who remains in her job. She is a close friend of the British Prime Minister David Cameron, which makes this all the more political and awkward here. And there is also a lot of controversy surrounding the parent company, News Corp, Rupert Murdoch's company, which wants to take over the Sky broadcaster -- a lot of people here are saying that deal should be off. And that's going to be debated in the parliament behind me in two days' time.
ALI VELSHI, CNN ANCHOR: All right. Dan, thanks very much for that.
You know, you, last week, were talking about the effect this is having on the company. And while "News of the World" is a small part of this company, it's these larger publications which maybe a bigger deal for Rupert Murdoch.
CHETRY: Absolutely, with the BSkyB digital that they were hoping to acquire 100 percent.
VELSHI: Yes.
CHETRY: Meantime, relations between the U.S. and Pakistan going from bad to worse after it was announced that it was going to -- the U.S. said we're going to withhold $800 million in military aid. Well, Pakistan issued a defiant response, saying, in effect, you can keep your money. We don't need it.
VELSHI: We'll have more on that.
A busy weekend for U.S. fighter jets in the skies above Camp David, Maryland. NORAD had to scramble three jets -- scramble jets three times over the weekend to divert planes that had wandered into restricted air space. The security zone is expanded when President Obama is at Camp David. CHETRY: Later this morning, congressional leaders will head back to the White House to try to hammer out a deal to raise the debt ceiling. They met last night with the president and did not accomplish a lot. The White House, though, insists that an agreement needs to be reached within nine days or America could default on its debts next month.
Treasury Secretary Tim Geithner warning that we've reached the critical stage.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, TREASURY SECRETARY: Well, 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 to this economy that's still healing from the great recession and it's going to require both sides to compromise.
(END VIDEO CLIP)
CHETRY: Joining us live from Washington this morning to discuss the issues that divide the two sides, former White House deputy press secretary, Jennifer Palmieri, and, Susan Molinari, former Republican congresswoman from New York.
Great to see both of you this morning.
UNIDENTIFIED FEMALE: Thank you. Good morning.
CHETRY: All right. So, we just had a chance to speak to Congressman Israel, as well as Congressman Price -- it's clear that both sides are very far apart. At the same time, we hear the president saying that -- or at least indicating he wants to push for something big, maybe to the tune of $4 trillion in some sort of package.
Jennifer, I'll start with you. Any chance he can get it?
JENNIFER PALMIERI, FORMER WHITE HOUSE DEPUTY PRESS SECRETARY: Well, it does seem -- I mean, I think they're right to continue to push for a bigger package. They did succeed last week in changing the debate -- whereas, before this debate about passing the debt limit was who was serious about spending cuts. And now, they've managed to change the debate into which side is more serious about deficit reduction. And I think the president has proven he's more serious than the House Republicans. But that still doesn't get him a deal.
And so, I think, in the end, we might have a smaller deal more along the lines of $2 trillion, which seems probably we're going to end up a couple of weeks ago. And then this overall fight about deficit reduction will take place in the context of the 2012 presidential debate.
CHETRY: And, Susan, Republicans have said that tax increases are off the table. So, the only answer is a smaller deal, maybe $2 trillion. You also have 230 members of Congress signing on to this pledge not to raise taxes. It seems that it's put Republican leadership in almost an impossible situation to come to any agreement.
SUSAN MOLINARI (R), FORMER NEW YORK REPRESENTATIVE: Well, first of all, I do think there will be an agreement. And I think when we talk about a substantial change, the Republicans can take a great amount of credit for the fact that just a few weeks ago, the White House and Democrats, throughout this nation, were talking about a clean debt limit. And now, everyone agrees that we need to make some very important reforms as we raise the debt limit in terms of spending, so that this isn't just a habit we get into and it's so easy to do.
With regard to the tax increases, I think whether they signed it or didn't is almost a moot point. We look at and wake up last week and find that our unemployment numbers and job numbers are still so devastating that even the Democrats agree that raising income tax on those people that we hope will create jobs is really not the appropriate thing to do.
I think at the certain point, there will be an increase in the debt limit. I think it will be a small package because both sides know that history is depending on them to do the right thing. I mean, I think they're after -- as we kick the can down the road a little bit, as we have done successfully, with the C.R., but with great results, you're going to see there will be some historic changes.
CHETRY: Well, and, Jennifer, the other issue seems to be entitlements, at least as it relates to Democrats. The president is saying that perhaps there will be some recalculations of Social Security benefits, perhaps some changes there. Whereas, others like Nancy Pelosi -- and we just heard from Congressman Israel as well --
PALMIERI: Right.
CHETRY: -- say they're not going to do that at all.
So, Democrats don't seem to be on the same page either.
PALMIERI: Well, I think when you had the president last week suggest we should do a $4 trillion package, that entitlement reforms were on the table. If you're talking about a $2 trillion package to suggest that that should be made up of Social Security and Medicare cuts and without doing any sort of revenue increases, I think, is not going to be sellable to the House Democrats, the Senate Democrats or even a lot of Republicans.
But what the president did indicate is that, you know, he preferred we could do this now or in 2013, but that he's willing to do -- he's willing to do a lot of compromise, but not at the sake of so many spending cuts that we hurt the economy -- excuse me, the recovery fledgling as it is.
CHETRY: Right. You're right. The June unemployment figures pretty dismal and we know that the unemployment rate went up 9.2 percent. Susan, does that give Republicans a little more bargaining power than the president?
MOLINARI: Look, there's absolutely no doubt. Look, as Americans, we need to do this, make important reforms, and we need to increase the debt limit.
For the president of the United States, this is important to his re- election. He needs to do this. He needs to show his leadership.
It's one thing -- we're grateful he finally said instead of a clean debt limit, when over 80 Democrats when that was even tried on the House floor voted no. But now, the Democrats are coming to the table saying we need to start talking about important reforms.
But as the president of the United States, it's such a dire and desperate economic time. You need to not just stand up and say, I want $4 trillion in cuts -- you need to tell us how to get there and how you're going to make the big sell to your party because that's just not happening at this point.
CHETRY: Right. Jennifer, I mean, do you think that there is some element from the GOP of -- if we stall, we keep moving the goal post -- which is the quote from Congressman Israel -- that it helps politically for the GOP?
PALMIERI: I think it's crazy for them to think that it helps them politically. I think that the president has come out looking far -- far more responsible, a real leader, somebody who is willing to compromise, somebody who is willing to make tougher choices. And the House Republicans -- I mean, even, you see a lot of Republican political consultants, Republican publications coming out and saying this is crazy for them to walkway from a deal which is three cuts, $3 cut in spending to every $1 raised in new taxes.
And I think that they've exposed themselves as not really caring about the outcome. They just want to put the president in an uncomfortable situation. And I think, ultimately, that's going to hurt them, let alone the damage that it's doing to the economy.
MOLINARI: You know, the president of the United States is also, by fact, the leader of the Democratic Party. And where is he coming, telling us where we're going to be in entitlement reforms, where we're going to be in changing the tax code? If you can't unite your own political party as sort of the, you know, cheerleader in chief for the Democrats, it's really not up to the Republicans.
(CROSSTALK)
PALMIERI: -- this would happen if the House -- Boehner is the one who walked away. The Democrats were prepared -- there's no indication that Democrats weren't prepared to do this.
MOLINARI: Of course there is.
(CROSSTALK)
PALMIERI: Democrats in the House are saying they wouldn't do it.
CHETRY: Jennifer Palmieri, Nancy Pelosi also said no changes -- no changes to entitlement. So, I mean, there are -- there are factions, you know, in which both parties are finding it difficult to try to work around as they try to get a deal with the other party. But we'll have to see, they say they're going to continue talking --
MOLINARI: Which is why it always happens at the very last minute, which is what I think will happen again this week.
CHETRY: All right. Jennifer Palmieri and Susan Molinari, great to see you both. Thanks so much for joining us.
And stay with CNN all morning. President Obama will address the nation about the debt ceiling and deficit reduction, 11:00 a.m. Eastern. And you can see it right here live on CNN.
VELSHI: OK. Still ahead, you want to see this, if you want to boost your morale at the office. I'm not sure you should do this. But check out what a bunch of employees at a computer company did. They blew up their boss' car. We've got the explosion on tape. And we'll tell you why they did it.
CHETRY: All right. Space junk on a course to buzz Atlantis and the space station. Whether ground control is planning any moves to avoid it.
VELSHI: We'll talk about that.
And a little later, a Compton High School basketball star wins a free- throw contest, then gives his $40,000 prize to the runners up. Why did he do that? We'll ask him live when he comes up.
It's 10 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: NASA is tracking -- as if they don't have enough to do, right, with this final shuttle mission.
VELSHI: Right.
CHETRY: They're tracking the International Space Station and shuttle Atlantis, and the space debris that's coming a little too close for comfort. NASA is saying it's not a threat and they don't need to make any adjustments to avoid the space junk. But it will sort of breeze right by.
Officials say that the debris is from wreckage from a 1970s era satellite. They say the point of closest approach could happen tomorrow.
VELSHI: This, by the way, is the shuttle doing a neat little back- flip in order to dock with the International Space Station.
All right. This isn't the most comforting sight. Great white shark spotted in the waters of Cape Cod, three of them. Officials are warning swimmers to stay away from seals, which are favorite snack for sharks. But Kiran doesn't really think it's an all-together helpful warning.
CHETRY: Well, it's just because, what, would you be hanging out with a whole little pod of seals there? I don't know.
VELSHI: Yes.
CHETRY: I just think you should just try to stay away from the sharks.
VELSHI: That might be clearing.
Sightings, however, are attracting tourists. And local vendors are cashing in there. Plenty of shark-themed gift and souvenirs for sale at the souvenir stores. And the beaches haven't been close.
Just stay away from the seals, Kiran.
CHETRY: Stay away.
All right. This Midwest and the southern plains are suffering from sweltering heat waves. Fifteen states are facing heat advisories again today. That means temperatures could top 105 degrees. Cities in four states, Missouri, Oklahoma, Tennessee and Indiana could see the heat index, it feels like, temperature top out at 115 degrees.
VELSHI: Reynolds Wolf is in the extreme weather center. This is extreme, Reynolds.
(WEATHER REPORT)
CHETRY: Do you know anything about the whole seals situation with the sharks?
VELSHI: Why you should stay away from seals to avoid being eaten by sharks?
REYNOLDS WOLF, AMS METEOROLOGIST: Basically, it's like this. From what I understand, the seals are like a giant big mac to these hungry sharks. So, I mean, again, you don't want to look like that. You don't want to look like a moving buffet line when you're out on the beach to these big animals. You just want to stay away from the sharks.
VELSHI: OK.
WOLF: But if you're in Iowa, sure, you're going to deal with the, heat but not too many great white sharks.
VELSHI: Right.
CHETRY: Yes. That's one less thing to worry about.
(LAUGHTER)
CHETRY: Thanks, Reynolds.
VELSHI: All right. Tiger Woods is planning to make some kind of a statement today at 11:00 eastern this morning. That's when the world's former number one golfer is going to appear on the golf channel, but we know what it's about. He's already announced he's withdrawing from this week's British open because of injuries. Would you like to speculate?
CHETRY: No, I would not like to speculate. How about you?
VELSHI: I don't typically ask you that, so I figure I just catch off guard, maybe. It's Monday morning
(CROSSTALK)
CHETRY: See if I get started to wait in to that territory.
VELSHI: All right. I didn't get you on that.
CHETRY: No. How about this one? The Women's World Cup quarterfinals, arguably one of the most riveting and thrilling match up ever.
VELSHI: In soccer, soccer.
CHETRY: Yes. It was a shootout yesterday. U.S. stunned Brazil. The score -- Ali has turned around and completely facing -- you're officially pouting on the set. All right. The score is tied 2-2.
VELSHI: Yes.
CHETRY: Then, the U.S. edged Brazil 5-3 in penalty kick. And check out what has to be one of the most amazing goals ever.
(BEGIN VIDEO CLIP)
CHETRY (voice-over): And it's in.
UNIDENTIFIED MALE: Score!
CHETRY: Megan Rapinoe blasted it from 30 yards away and Abby Wombak with the header into the back of the net. The U.S. advances now to the semi-finals. They play France on Wednesday.
(END VIDEO CLIP)
VELSHI: This was such a big deal that when I was at the baseball game, the Yankees game yesterday, they were playing this on the big screen. Yesterday was supposed to be the day we were all going to see --
CHETRY (on-camera): It was a huge day, but --
VELSHI: Well, it was Saturday when we actually got it. So, yesterday was a little bit more --
CHETRY: So you guys were hedging your bets. You thought definitely Jeter's not going to break 3,000 on Saturday.
VELSHI: He had five hits on Saturday.
(LAUGHTER)
CHETRY: I know. It was an amazing game.
Talking about hits, the Tour de France that's known for spectacular crashes.
(BEGIN VIDEO CLIP)
VELSHI (voice-over): Check this one out, though. Look at that. That car bumps the rider, who bumps another guy. We'll show it to you in slow motion again. OK. He bumps the rider, sends another guy into the fence which, by the way, happens to be barbed wire. The car was covering the event for French TV. The first guy hit the pavement. The second guy went into the barbed wire fence. Like true athletes, they got back on their bikes and they finished the race.
(END VIDEO CLIP)
CHETRY: Yes, they did, but one of them needed 30 stitches on his left thigh after that.
VELSHI (on-camera): They were awarded a prize for being the most combative riders. Another reason why I'm not engaging in athletic activity this week. Look at the danger. I mean, poor guy was out riding a bike and now he's got 30 stitches.
CHETRY: Yes, I know, but just because you're not training for the Tour de France doesn't mean you couldn't kick out like ten minutes on an elliptical. I think that's pretty safe. Got to start somewhere.
VELSHI: Don't feel like the right week to be exercising.
CHETRY: Well, Shaq is back, maybe, according to reports. Retired NBA superstar, Shaquille O'Neal will join our corporate family, Turner Sports in TNT. Their speculation he may work alongside of NBA star great, Charles Barkley, on inside the NBA. TNT has not confirmed it yet, but as you may remember, O'Neal announced his retirement last month.
VELSHI: All right. Employees at a company in Provo, Utah, found a unique way to boost worker morale. They blew up the boss' car. Watch this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Are you ready?
UNIDENTIFIED MALE: Guys, you need a soda.
CHETRY (voice-over): Wow, that did not look safe. Did you see those projectiles shooting out of the side?
VELSHI (voice-over): I sort of assume when you blow up a car, stuff goes up. A CNN iReporter says employees and their families were invited to watch the explosion, eat hot dogs and celebrate a job well done. This is our story of the day that has more questions than answers.
CHETRY: Yes. All right. Well --
VELSHI: Apparently, I did hear that it was sort of an old teal car that, you know, the boss didn't really need.
CHETRY: Yes. That they needed to set aflame.
VELSHI: Yes.
(END VIDEO CLIP)
CHETRY (on-camera): All right. They probably made everybody sign waivers before they attended that thing.
Business headlines up next, including a check in the marks and J.K. Rowling working on more "Harry Potter" books? Hmmm. Twenty-one minutes past the hour.
(COMMERCIAL BREAK)
VELSHI: Twenty-four minutes after the hour. "Minding Your Business" this morning.
Alcoa, America's largest aluminum producer, kicks off a week full of second quarter earnings on Wall Street today. The company will report its earnings after the closing bell this afternoon. Google, JP Morgan Chase, Yum Brands, CitiGroup, all of them are releasing earnings this week.
The Dow, NASDAQ, and S&P 500 are all set to open sharply lower this morning. Feelings of uncertainty are running high on Wall Street after that dismal jobs report out on Friday and concerns over the continuing debt crisis in Europe.
Crisis at the pump are stabilizing after two months of declines, and the new Lundberg Survey says any further big drops in gas prices are unlikely. One reason, oil prices are rising again. The current national average for a gallon of gas is $3.62.
If you smoke, there's a good chance your employer will want you to pay more for health insurance than your non-smoking co-workers. More companies are doing it. We want to know what you think. Is it fair to ask employees who smoke to pay more for health insurance? E-mail us, give us a Tweet, or tell us on Facebook. We'll read through some of your responses later in the show.
The new "Transformers" movie is doing well at the box office again. The movie raked in about $47 million this weekend and $262 million in just two weeks. Already the highest grossing film of the year.
"Harry Potter" author J.K. Rowling keeping fans on the edge of their seats at the world premiere of "The Deathly Hallows part two" in London last week. Right now, no immediate plans for a new "Harry Potter" book, but she also says never say never. The new movie opens in U.S. theaters on Friday. Up next, the assist of a lifetime. A Compton high school basketball star wins a free-throw contest, then he gives his $40,000 prize away to his opponents. We'll speak to him live, next. AMERICAN MORNING is back after the break.
(COMMERCIAL BREAK)
VELSHI: Welcome back. It started out as a simple free-throw contest. Eight high school students in Los Angeles vying for $40,000 in college scholarship money. Young man named Allan Guie won the event, then he found out he'd earned a full scholarship to attend Cal State Northridge separately. So, what did he do? He gave the cash away to seven other finalists to help them pay for their college educations.
Joining us live from Los Angeles this morning is Allan Guie and the organizer of the free-throw scholarship contest, Court Crandall who is one of the writers of the movie "Old School." Welcome to both of you. Alan, let's start with you. This wasn't a contest for basketball players. It was for people with a 3.0 GPA. You got in by luck of the draw. You're a pretty good basketball player. You're a bit of a ringer?
ALLAN GUEI, WON $40,000 IN FOUL SHOOTING CONTEST: Yes, I know it was -- it was a surprise to me they pick my name from the hat.
VELSHI: But it was legitimate. You had those grades, and that's why you got in. Did you go in there thinking I'm going to win this?
GUEI: No, I did not, because at first I was -- I was kind of shaky about -- about getting in the competition because about -- I figured it wasn't right for me to just join in because I was already a basketball player. I knew a lot of people was going to say it wasn't fair.
VELSHI: So you have this full scholarship elsewhere. You now win this $40,000 scholarship. What happened then? How did you decide you were going to give this money away, and how did you go about telling the other kids?
GUEI: I talked it over with my family, my mom, my father, and also my coach. And we just decided -- I decided to tell them that it was the right thing to do, you know, give it away, because I also have a full athletic scholarship to go play basketball. So I figure why not just help the others? My education is already paid for. I would like to help the others.
So, I ended up telling Court about it. And Court felt like that was the best thing for me to do. He was excited about that. And the day of our graduation, we filmed it. And I huddled everybody together and I told them about it and everybody was excited.
I should mention that under NCAA rules, you were entitled to keep that money. Court Crandall, what did you think when Allan told you he was giving this money away?
COURT CRANDALL, ORGANIZED FREE THROW CONTEST: It was funny. If he had told me that at the start of the competition I would have been stunned, but by the end I wasn't actually surprised. I said to someone the other day that I raised my children in Manhattan Beach, but I actually went to Compton to find their role models.
And I actually believe that Allan and Don Olden, Omar and all these kids, Arturo, are such incredible role models and wonderful representatives not just of their community but kind of our country at large.
VELSHI: And what's your role in this? You're shooting a documentary for what?
CRANDALL: For the sake of shooting a documentary. We wanted to make a film about kind of showing another side of Compton. And, really, the whole basketball thing was intended to just be a metaphor. I think there's a lot of lines that separate people in the world these days, whether it's financial or race or religion, and this was supposed to be a line that drew everyone together, which was the free- throw line at Compton high school.
VELSHI: Allan, tell me how much these kids are going to get, because you did some additional fundraising that day. So how does this all work out for everybody?
GUEI: I believe they will get about $5,000 a piece, something like that.
VELSHI: Right. And that's -- is that plus their tuition? I guess they get their tuition and then they get this money. So what's the reaction been?
GUEI: Everybody was excited when I decided to give it up. Everybody was just commending me and telling me what I did was a great thing. But I figure, you know, it was the right thing to do. So it was a no brainer for me.
VELSHI: That's the best part, when it's a no brainer, it's the right thing to do and it's a great thing. That combination doesn't come across very often in life. Allan, congratulations for making that Democrat. Allan Guei is star basketball, and Court Crandall is a partner in the Southern California advertising firm of WDCW.
CHETRY: Good stuff. It's nice to hear when somebody does something like that.
VELSHI: It is.
CHETRY: Well, it's across the half-hour right now and we're going to look at our top stories. A report now accusing the British tabloid "News of the World" of trying to hack into 9/1 victims' phones. The paper published its final edition yesterday over the growing hacking scandal.
VELSHI: NASA tracking space debris near the International Space Station, and the space shuttle Atlantis. NASA is now saying it's not a threat and no adjustments are going to be needed to avoid the space junk. Officials say the debris is wreckage from a 1970s satellite.
CHETRY: Debt talks resume today. Both sides say they'll go round the clock to get the deal done. Yesterday the president met with White House top congressional leaders -- at the White House, and when it was over, still no agreement. The president warning we have nine days only to agree on raising the debt ceiling or we risk default.
VELSHI: And tensions between the United States and Pakistan continue to grow in the wake of the raid on bin Laden's compound. Now the Obama administration is withholding $800 million in military aid to Pakistan.
CHETRY: And the Pakistanis are responding but saying keep your money. CNN's Reza Sayah is following developments for us live in Islamabad. Hi, Reza.
REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Hi, Kiran. Just when you think this relationship between Islamabad and Washington couldn't be more uncertain, more troubled, comes another setback. And this one is a significant setback because initially, Washington is -- essentially, Washington is sending a message to Pakistan that we're not satisfied with the efforts that you're making in the fight against militants. If you want to continue to get our money, to get our resources, to get our help, there has to be some changes on your part.
In previous years from Washington, we've heard a lot of rhetoric, a lot of accusations coming from U.S. officials. But this move by Washington can certainly have the potential of substantially changing the complexion of this relationship.
Pakistan for its part has essentially shrugged off this move by Washington, essentially telling Washington that we don't need your money. You can keep it. We talked to the spokesperson for the military, and he claims many of the operations launched by the Pakistani military against militants in northwest Pakistan are already done without U.S. help and U.S. funding, and he claims that those will continue.
Now, that doesn't square with previous demands made by the Pakistani government, the Pakistani military, demands from the U.S. to give them more money, give them more resources to precisely fight militants. You see a little bit of gamesmanship and defiance of the Pakistani military. But it certainly underscores how troubled, how uncertain this relationship is, guys.
CHETRY: All right, Reza Sayah for us live in Islamabad. Thanks so much.
Up next, parents are reeling after one of the largest cheating scandals in school history. What went wrong in Atlanta? Our education contributor Steve Perry is going to be joining us in a moment. It's 37 minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: It's 40 minutes past the hour right now. As we take a look at Atlanta, Georgia, this morning, partly cloudy, 79 degrees going up to a high of 95 later in the day.
They're also dealing with a major scandal uncovered in Atlanta's school district. According to an investigation but the Georgia governor's office, teachers were ordered by district Official to doctor test answers. It was an attempt to boost the school's standardized test scores. So some kid who really flunked ended up passing and missing out on the chance to actually get the extra help they clearly needed.
Here to talk more about what this means not only for Atlanta schools but schools across the country is Education Contributor Steve Perry. Steve, good to see you this morning. When you take a look at these numbers, they're really staggering. You have 178 educators, including 38 principals said to be involved, and that this went on for as long as a decade. Where was the oversight here?
STEVE PERRY, CNN EDUCATION CONTRIBUTOR: That's the good question. It appears that everyone was complicit. I don't understand how this happened. To be honest with you, there are great lengths that you have to go in order to cheat. And to imagine a principal and a vice principal taking the test that the children have taken, sitting in a room, erasing the answers and calling out the right answers, is disgusting. I don't understand how any of them get to keep their job, and, in some cases, questions should be brought up about whether they should be able to keep their license to educate in public schools.
CHETRY: Some of these teachers say -- one of the quotes is Atlanta public school system was run like a mob. One of the teachers told investigators that she cheated because she feared retaliation if she didn't. It's so systemic, how do you even begin to get to the bottom of who is responsible?
PERRY: That's not good enough for an answer. We spend every day working very hard to tell children that just because your friends do something dumb doesn't mean you have an excuse to do that same dumb thing. And this is dumb.
I don't know how you get down to the bottom of it. But some heads have to roll. People have to lose their jobs, and there needs to be an example, quite frankly, made of the individuals who have done this.
Many people blame No Child Left Behind for these results, but there are millions of educators every single day who do the right thing. Listen, we've had a tough year with some of our tests. I haven't had a bunch of sleepovers because I'm uncomfortable with the way it went. But I'm not coming back on Monday telling my teachers, you know what, we need to figure out how to erase these answers. That's absurd.
CHETRY: Right. I mean, this is the extreme version of what some say is this continuum where, you know, the pressure is on. Dollars are attached to this. Not every kid is learning. And so, in some cases, right, they say you teach to the test rather than teaching kids skills and teaching kids ideas. In this case obviously it's far more egregious. But, I mean, do we have to rethink some of how we're educating? PERRY: I don't think we have to rethink it. You know, unfortunately, rules are not made for people who would abide by them. They're made for people who have broken them. So this -- when we're talk about teaching to the test, we're really talking about basic skill that we want the children to know and be able to do.
Most people have yet to actually look at one of the tests, the state standardized tests that we are actually asking children to perform well on. They're pretty basic. And in many cases, they're reasonable. They're reasonable.
We, as educators -- I tell you, we just had a meeting, because we're in school year round here at Capital Prep, and we just had a meeting on Friday. And I was very clear to our staff that we will not do poorly on these exams again. So get it through your head, we're going to do really well.
Now, of course, it's all relative. We always want to do better than we did the last year. The point being that we, as educators, have an obligation to respond to the test expectation. I don't know why the three-point line is where it is, but that's where it is. So if you play basketball, you have to make the shot behind the three-point line during the game in order to get three points. Get over the fact that there are tests.
CHETRY: Right. And in some cases, it looks like the biggest losers here are the kids. I mean, if they weren't understanding this material, they weren't learning, they weren't able to write, they weren't able to understand the math, I mean, how do they catch up?
PERRY: Kiran, that's really -- thank you so much for bringing that up, because the biggest loser in this one is the child. We use these tests to determine how and what we teach children in some cases to provide them with essential services that will help them prepare for life. That's what education is about.
And when you say that a child passed something that they did not pass, it goes beyond the inflation of grades that occurs every single day in schools throughout the nation, well-intended teachers saying that a child tried really hard, therefore, we're going to give them the B, when they really deserved the C minus.
CHETRY: Right.
PERRY: But this is supposed to be an objective test, one in which we should have been able to see that the kids either could or couldn't do it. And then parents can make decisions outside the school, even, whether or not they're going to provide the child with additional services and support. And that was lost in Atlanta and is lost anywhere anybody discusses doing something like this.
CHETRY: Right. And the intern chief there is now saying anyone involved in this scandal has, quote, "forfeited their right to remain in the Atlanta's system." We'll of course be following that situation and the fallout very closely. Steve Perry, CNN education contributor and founder of Capital Prep Magnet School. Great to see you as always. Thanks for joining us.
PERRY: Nice to see you as well.
CHETRY: Our morning headlines are up next after a quick break. It's 45 minutes past the hour.
(COMMERCIAL BREAK)
VELSHI: Forty-seven minutes after the hour. Here are your morning headlines.
The final edition of the "News of the World" has rolled off the press; owner Rupert Murdoch shutting the paper down in the wake of a hacking scandal. And now there's a report in another British tabloid saying staffers at "News of the World" attempted to hack the phones of 9/11 victims.
Pakistan is defiant in response to the Obama administration's decision to withhold $800 million in military aid. Officials telling the U.S. in effect, "Keep your money. We don't want it." Tensions between the two countries came to a head after raid on bin Laden's Pakistani compound.
Back to the bargaining table, for the President and congressional leaders. They've agreed to meet around the clock, if necessary, to reach a deal on raising the debt ceiling. The President says the deal must be done within nine days or America could default on its debts.
NASA is tracking space debris near the International Space Station and the shuttle "Atlantis". But NASA is now saying it's not a threat and no adjustments will be needed to avoid the space junk. Officials say the debris is wreckage from a 1970s satellite. The point of closest approach could happen tomorrow.
The Midwest and Southern Plains in the grips of a suffocating heat wave; 15 states facing heat advisories today. That means temperatures could top 105 degrees. And cities in four states, Missouri, Oklahoma, Tennessee and Indiana could see the heat index top out at 115 degrees.
The DOW, NASDAQ, S&P 500 all set to open sharply lower this morning. Feelings of uncertainty are still running high on Wall Street after that dismal jobs report that came out on Friday and concerns over the continuing debt crisis in Europe.
A jam-packed weekend in California. Prince William and Catherine, the Duke and Duchess of Cambridge ended their North American tour. The royal couple hit the red carpet and stopped by a charity and even squeezed in a polo match.
You're caught up on the day's headlines. AMERICAN MORNING is back after the break.
(COMMERCIAL BREAK)
VELSHI: You know, this is a story that just continues to fascinate me. Jaycee Dugard, who spent 18 years in the clutches of a convicted sex offender, is speaking publicly for the first time about the ordeal.
I'm just fascinated every time I hear her speak. This is somebody who spent more of her life in captivity than not.
CHETRY: That's right. She was just 11 years old when she was kidnapped by Philip Garrido in 1991. She was heading to school. Apparently he used a stun gun to get her, to capture her and bring her into his car. She later gave birth to two of his children.
In an interview with ABC's Diane Sawyer, Dugard tried to describe the near two decades of terror.
(BEGIN VIDEO CLIP)
JAYCEE DUGARD, ABDUCTED JUNE 10, 1991: There was not a day that I didn't cry. I felt like there would never, ever be a day that I wouldn't cry again. And then after a while, I told myself I can't cry anymore.
DIANE SAWYER, ABC: What's the most haunting memory?
DUGARD: That lock, hearing the lock. I know I said that earlier, but for some reason that -- and the bed. It was a squeaky bed. Squeaky pull-out bed. I guess the noise -- the sounds. It's weird what sticks in your head, but -- sounds.
SAWYER: How did you stay sane?
DUGARD: I don't know. I was still alive. I was still -- there was still hope. Still hope.
SAWYER: I'm trying to imagine how you are coping. I'm trying to imagine.
DUGARD: I don't know. I can't imagine being beaten to death, you know. But -- and you can't imagine being kidnapped and -- and raped, you know. So, it's just -- you just do what you have to do to survive.
(END VIDEO CLIP)
CHETRY: And she did that. She's 31 now.
VELSHI: Yes.
CHETRY: Raised her two children and she's now back home with her family. She's written a book about her ordeal, "A Stolen Life". And it is being released tomorrow.
VELSHI: On one side I want to read her story. On the other one, I just don't. I -- I --
(CROSSTALK)
CHETRY: I know, it's very disturbing.
VELSHI: What a horrifying story.
All right, a 22-year-old singer and aspiring actress charged with burglarizing Manhattan's Ed Sullivan Theater, that's where "The Late Show with David Letterman" is taped. Police say James Whitmore appeared to be intoxicated when he kicked in the glass on one of the front doors early Sunday morning and trashed the building's lobby. Wow, a lot of damage.
CHETRY: And a fire at Rihanna's concert in Dallas sent fans home early on Friday. There was a malfunction with the pyrotechnic and sparks fell from the top of the stage. Afterwards the pop star tweeted we set the stage on fire, tonight, literally. Rihanna is telling her fans in Texas, "I've got to come back".
VELSHI: And the Beckhams welcome their newest edition; former Spice Girl Victoria and soccer star David gave birth to their fourth child yesterday at seven pounds, ten ounces, it the family's first little girl. She's named Harper Seven. Really? That's what they're calling her?
CHETRY: You know, their other kids name were Brooklyn, Romeo and Cruz.
(CROSSTALK)
VELSHI: So what's with the Seven?
CHETRY: I don't know.
VELSHI: Ok on Facebook Beckham wrote, Victoria is, quote, "Doing well, and Harper is healthy".
CHETRY: Well, congratulations. She wanted a little girl, you know. She said there was too many men in the house.
And there is more baby news; Kate Hudson is a mom again. The actress gave birth to her second son on Saturday. It is the first with her fiance, Matthew Bellamy. A member of the British band News. Hudson hasn't revealed her newborn's name yet.
VELSHI: Do we know the weight? I'm always puzzled about this whole weight thing.
CHETRY: I know.
VELSHI: Do we really need to know the weight of every baby?
CHETRY: Yes, yes, if especially when their weight is double what normal babies should be.
VELSHI: Right, well as you know, everything is bigger in Texas and apparently even the babies are.
CHETRY: That's right, a Longview couple are now the proud parents of a 16-pound, four ounce baby delivered by C-section on Friday morning.
VELSHI: Sixteen pounds, four ounces?
CHETRY: Yes. That is about the weight of a six to nine-month-old. He is the biggest baby ever to be delivered at that hospital --
(CROSSTALK)
VELSHI: And quite possibly in the city, the county.
CHETRY: Yes, yes they are checking to see whether it's a state record as well.
VELSHI: Maybe the state yes. Wow.
CHETRY: There he is.
VELSHI: And we'd heard that he was on a breathing apparatus but he seems to be --
CHETRY: Right because you -- well, yes usually the mother has gestational diabetes --
(CROSSTALK)
VELSHI: Right.
CHETRY: -- when the babies are that big and then the baby has some blood sugar issues as well.
VELSHI: Right.
CHETRY: But hopefully fingers cross, he'll be ok.
VELSHI: Ok very good.
Its 55 minutes after the hour. We'll be right back.
(COMMERCIAL BREAK)
VELSHI: Things are getting better in New York. Didn't we report the weather as being fair earlier and 79? It's gone up to partly cloudy and 88. But it has proceeded from fair to sunny.
CHETRY: That's right. Earlier, we said -- we told you, because we were given word that Tiger Woods was going to be holding a press conference at 11:00 today. So in two hours.
VELSHI: Unclear. I think we thought he was talking to the Golf Channel. We are just hearing now from his agent -- and then again, we're working to confirm this because it just seemed to be getting a little messed.
But Tiger Woods' agent apparently telling the Associated Press in response to these report that is there is no announcement coming. He says, "There's an erroneous report that he is making an announcement but he is not." So for the moment, Tiger Woods is not making an announcement. We'll try to get to the bottom of this and find out where this misinformation is coming from.
CHETRY: If you smoke, you may be having to pay a little bit more for health care. More companies are considering or doing this. Charging smokers more for coverage than they charge non-smokers.
VELSHI: So we want to know what you think. Is it fair to ask employees who smoke to pay more for health insurance?
Here are some of your responses.
On Twitter: "People should mind their own business and get off of their high horse and quit picking on people who smoke.
Ron on Facebook: "Car insurance, life insurance or health insurance, it makes no difference. Risky behavior should result in higher premiums."
VELSHI: But the problem is that smoking is very clearly identifiably risky behavior as opposed to generally not eating, right? You don't really know -- not eating well -- it's not clear who is exercising or who is overeating and who is eating fatty foods. It's abundantly clear who is smoking.
CHETRY: Right. All right.
Well, we thank you for your comments; a lot of good ones today.
And that's going to wrap it up for us. We'll see you back here bright and early tomorrow morning.
VELSHI: We absolutely will; thanks for being with us.
Right now, let's send it over to "CNN NEWSROOM" and Kyra Phillips. Right now. Good morning, Kyra.
CHETRY: Hey Kyra.
