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CNN Saturday Morning News

Senate Comes Up with a Relief Plan for the Mortgage Crisis; Democrats Gearing Up for Pennsylvania Primary; Investigation Continues in Texas Raid of Polygamist Compound

Aired April 12, 2008 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

T.J. HOLMES, CNN ANCHOR: From the CNN Center in Atlanta, Georgia. Good morning to you all, I'm T.J. Holmes.
BETTY NGUYEN, CNN ANCHOR: Yes, everybody. Hello, I'm Betty Nguyen. We want to thank you for starting your day with us.

All right, so, entire neighborhoods bombed out by the mortgage crisis. The Senate comes out with a relief plan though giving home builders billions in tax breaks.

HOLMES: But will homeowners get that same kind of relief? We're taking a closer look at the Senate plan.

NGUYEN: Also, stranded. American Airlines has canceled another 200 flights today forcing passengers to change their travel plans. All of the planes grounded are MD-80s. Engineers are checking for possible problems with the wiring in the wheel wells. Since Tuesday, more than 3,000 flights have been canceled adding to an already rough month for the airline industry.

HOLMES: In the last two weeks, five U.S. carriers have gone belly-up. Frontier Airlines last week or that was this week and last week it was Skybus, ATA, Aloha, Champion gone away as well, partly caused by the higher fuel cost. And American is not the only airline dealing with flight cancellation and headaches these days. Southwest, Delta and Midwest Airlines have also grounded flights because of the same safety inspections.

NGUYEN: Now, to "Issue #1," which is of course the economy. If you're caught up in the mortgage mess and struggling to keep your home, a bill passed by the Senate this week may not provide much relief. So who benefits from this legislation?

Well, Christine Romans takes a look.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT: The Democrat-led Senate overwhelmingly passed a housing and mortgage relief plan giving billions of dollars in tax breaks to home builders losing money. The very companies that made a fortune during the housing boom. Business tax breaks, the biggest chunk of the Senate plan, though it would also give a $7,000 tax credits to people who buy foreclosed homes. And $4 billion to local governments to buy homes and neighborhoods blighted by foreclosure. Here in Cleveland, the foreclosure crisis has bombed out entire neighborhoods, and the county treasurer is fed up with Washington politics and the bail outs for everyone but the homeowners.

JIM ROKAKIS, CUYAHOGA CO. TREASURER: I Mean, just look at today. Look at today, $25 billion for home builders. Wait a minute. Wait a minute. You know, why don't we talk about the moral hazard of bailing out homebuilders who continue to build?

ROMANS: Across the country, some 20,000 families a week are losing their homes, and that's just subprime foreclosures. Prime loans are beginning to fail as well. On the campaign trail, these three senators are trying to show they feel the pain of working Americans. Republican John McCain giving his most detailed stance yet on the housing crisis. He opposes funds to purchase homes in foreclosure and tax breaks for homebuilders. And says, in some cases lenders and borrowers both made greedy choices.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: It is not the responsibility of the American public to spare them from the consequences of their own bad judgment.

ROMANS: The White House announced its own plan this week to help 100,000 more homeowners by the end of the year, but the end of the year might be too late. The way they see it in Cleveland ...

ROKAKIS: Things are not getting better. They are getting worse. For a lot of neighborhoods, it is too late.

ROMANS: Jim Rokakis in Cleveland says he is discouraged by the idea home builders could be eligible for billions. And the people who buy foreclosed could get a nice little tax break. He said he's concerned we are not doing enough to prevent foreclosures in the first place.

Christine Romans, CNN, New York.

(END VIDEOTAPE)

HOLMES: And the economy is issue number one for voters these days, especially a couple of states coming up on the calendar as a key part of the presidential candidates' agenda on the campaign trail as well. Hillary Clinton, Barack Obama are both in Indiana today, but they still have Pennsylvania on the mind.

CNN deputy political director Paul Steinhauser joins us from Philadelphia this morning. And these states we're talking about coming up now, Indiana, Pennsylvania, the economy, it is all about the economy.

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: It sure the. That's why you are hearing the candidates speak out about the economy just at almost every opportunity. As you mentioned, both Clinton and Obama this morning in Indiana will both be doing campaign events there during the day. And talking about the economy, it is issue number one with the voters. We've seen polls say that over and over again. Even John McCain getting down and understanding that this past week. He laid out a new plan to help Americans dealing with those subprime mortgage crisis. So, you're going to hear a lot about it.

Here in Pennsylvania, the polls are really tight. It is a tight race. And I think you are going to hear both candidates again back here next week to talk about this with voters.

HOLMES: And Paul, another issue we're talking about. We thought it had gone away, but it's back. Hillary Clinton misremembering her trip to Bosnia. People will remember this now. Trying to recall a trip she took to Bosnia when she was first lady. She had first said that she, remember that she had to duck and there were sniper fire, things like that. It turned out not to be true. Well, the account went away, but Bill Clinton was talking about it again the other day. It turns out his memory isn't much better than hers.

STEINHAUSER: Yes. You know, I think the lesson the Clinton campaign wanted was for this story to resurface again but Bill Clinton out on the campaign trail the other day brought it up and yes, he did get some of the facts wrong. And it's probably just what the campaign didn't need. Because I know he was trying to defend his wife, but this story, you know, they don't want the story back there in the headlines because it doesn't help her out in any way, shape, or form.

Bill Clinton joked about it though yesterday saying that his wife had called him and told him, hey; Bill, knock it off. Stop talking about it. So, in this case, I think Bill Clinton is probably hurting his wife rather than helping her.

HOLMES: Well, that's not, I'm sure that's not what he wanted to do, but I think I read his response when she called, and it was, yes, ma'am. And that's what he said.

STEINHAUSER: He knows who the boss is.

HOLMES: Yes. All right. Paul Steinhauser, always good to see you. Appreciate you this morning.

And folks, you can get more on the candidates from the campaign trail in their own words this afternoon from "BALLOT BOWL" that's starting at 2:00 Eastern time. And then tonight, "Route 2008," a special presentation of the CNN NEWSROOM looking at the issues affecting you. CNN senior national correspondent John King travels across Pennsylvania stopping just long enough for tonight's live special. That's coming our way at 10:00 Eastern.

All of that is a prelude to a very special CNN event happening Sunday night. Hillary Clinton and Barack Obama facing tough questions. The "Compassion Forum" live from Messiah College outside Harrisburg, Pennsylvania. You can join host Campbell Brown. That's tonight 8:00 p.m. Eastern, right here on CNN.

NGUYEN: In Texas, what is going to happen to more than 400 children removed from that polygamist compound? Well, a hearing is set for next week that's going to focus on that very question. Investigators at the group's ranch near the town of El Dorado have uncovered disturbing evidence of possible sex rituals involving children inside the group's temple. CNN has also learned a young girl with a sect in Arizona has contacted authorities there about alleged abuse in her household.

CNN Sean Calebs joins us now from the city of San Angelo with the latest. And Sean, why don't you really bring us up-to-date on what's going on with the hundreds of kids who have been removed from the compound in Texas.

SEAN CALLEBS, CNN CORREPONDENT: About 416 children aged 17 down to just a few months old, most of them are being held in this area you see behind me. This is Fort Concho. To make sure that folks in this area don't have contact. This is really unchartered territory for the Child Protection Services here in Texas. They have authorities on every corner.

I want to pan over here, just a moment, you can see, there's a police officer there, here around the clock. Because out there is this big field. This is where the kids go out to play for most of the day.

But you're exactly right. There was speculation that a lot of these kids are going to be moved out to foster homes at some point this week. Well, that's not going to happen now until at least the hearing on Thursday.

Also, the state took the unusual step of allowing the mothers of a lot of these children to come and stay with them here at this sight. Yesterday authorities talked about why there were doing that.

(BEGIN VIDEO CLIP)

MARLEIGH MEISNER, CHILD PROTECTIVE SERVICES: These women came of their own free will. They came because they wanted to come. I think those of you who have covered Child Protective Services long enough to know that this is not normal. When we remove a child from a parents' home because they have been abused and neglected in that home, we don't take the mother with us.

(END VIDEO CLIP)

CALLEBS: Yes, Betty. That's the big story that's going on in this area. As I said, most of the kids are here at Fort Concho. There's another site that holds the youngsters as well. They're really not much of a curiosity for people in this town. You don't see people driving by looking. They are trying to give these children as much space as they can knowing they're the ones that are really suffering to a huge degree in this ongoing controversy.

NGUYEN: Well, what are volunteers learning about the children and learning from their children, perhaps?

CALLEBS: They brought in mental health specialists to talk to these students. Because a lot of the children who are here are parents themselves or are mothers with their own children. So, they are trying to determine, a, what kind of parental skills does somebody who is 14 or 15 have when brought into a situation like this.

They are also talking to them about what life was like at the compound. How are you doing? We asked yesterday, you know, the authorities about that and they said, you know, like all kids, they are eager to go home, but that's not going to happen any time soon.

NGUYEN: Yes. Sean Callebs joining us live from San Angelo, Texas. Thank you, Sean.

HOLMES: Well, news out of Iraq this morning, the U.S. military now says 45 bodies have been found in a mass grave south of Baghdad. Troops have been excavating the site since they initially found 33 bodies there. Authorities believe the remains have been there for more than a year.

HOLMES: And what you are seeing here is Shiite militia battling U.S. and Iraqi forces for a seventh straight day. Baghdad, Sadr City neighborhood is the scene of these running gun battles. And the U.S. military says 13 people were killed yesterday. No American or Iraqi troops though were seriously hurt. The fighting intensified in Sadr City yesterday after a top aid to Shiite cleric Muqtada Al-Sadr was killed.

NGUYEN: Zimbabwe's election crisis is the focus of a regional summit in Zambia today. And we still don't know the results of the presidential election which was held almost two weeks ago.

HOLMES: Now, election officials say they plan to recount ballots in nearly two dozen voting districts. The opposition party claims it won the election. It's the strongest challenged yet to President Robert Mugabe's 28-year rule.

Some neighborhoods in the southeast are cleaning up this morning after severe weather damaged homes and downed trees in at least two states.

NGUYEN: A possible tornado damaged more than 56 homes in Lawrence County, Tennessee. That storm uprooted trees and scattered debris all across a wide area. Officials say storms also downed the power lines and damaged more than 30 homes in another county. At least five people were injured in Tennessee. Powerful winds also damaged homes in Kentucky.

HOLMES: The calendar says spring. The pictures say winter. These pictures out of Duluth, Minnesota. The storm dumped more than a foot of snow on parts of that state. Minnesota transportation officials advised people to stay home yesterday because the road conditions were just that bad. Wind gusts off Lake superior were recorded up to 60 miles per hour.

NGUYEN: That's a hard time telling those folks that it is spring outside. Really, it is. Reynolds Wolf joins us now from our severe weather center. We call it a severe weather center for that very reason. Reynolds.

REYNOLDS WOLF, CNN METEOROLOGIST: Yes, certainly was yesterday. And you know what's amazing about the forecast yesterday and today? The same storm system that brought the heavy snow to parts of the midwest is the same storm system that brought the rough weather into portions of Tennessee and into Alabama. Right now, we don't have any severe weather center in the southeast.

Thankfully, we do have beneficial rains in places like Atlanta and back over to spots, say Augusta National. We got some showers forming just out to the west. Now, we have a live image for you in August. That's going to pop up.

Here it is. A beautiful shot, compliments of WJBF. We got the cloudy skies. You may have those scattered showers are on the 13th hole as we go through the afternoon. So, if you are going out and about, if you have the means to go and enjoy the beautiful site that is Augusta National, make sure you bring the umbrellas with you and have a wonderful time. It is a beautiful, beautiful place to be.

Meanwhile, we go back to the weather computers and we're seeing a touch of what really, everything. Some rain, sleet, and even some snowfall through much of Maine through Portland to Banger, mainly, a rainfall event. But when you get northward to Prescott, we're talking about snow and meanwhile back out to the Great Lakes, it is a mix of everything there, too.

In Michigan, primarily a rain event, but back up into UP over to Green Bay, we are seeing the scattered snow showers. Here's the area of local pressure. You can see that counterclockwise flow and overall moisture falling right into the low levels of the atmosphere with these freezing conditions that's going to give you the snowfall.

Later on today as we zip through the last part of the maps, we are going to see a chance of seeing some strong along the mid-Atlantic states. I would say from Washington, southward, over to Virginia Beach and even over toward Charlotte, you could see some stronger storms later this afternoon.

Let's send it back to you at the news desk.

NGUYEN: All right. Thank you, Reynolds.

WOLF: You bet, guys.

HOLMES: Well, on fire and under investigation. Cars go up in flames. Firefighters on the scene and now police have a suspect.

NGUYEN: And everybody knows that getting busted for drugs can put you behind bars for a very long time.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Laying on that hard floor, I said, this is not the kind of life I want to live laying on this hard floor in jail.

(END VIDEO CLIP)

NGUYEN: It cost a fortune to keep drug offenders locked up, so is rehab a better alternative?

(COMMERCIAL BREAK)

NGUYEN: Here's a look at some of the other stories that we are following for you this morning.

HOLMES: He was charged with killing a pregnant marine and burying her in his backyard. And this morning U.S. Marine Corporal Cesar Laurean is in custody in Mexico. He was caught Thursday night. Prosecutors say they don't expect him to fight his extradition to North Carolina.

NGUYEN: In Maine, police have charged a 19-year-old with setting 10 cars on fire. The fires were set early Friday morning near downtown Portland. The cars were parked on the streets and driveways and in parking lots across a ten-block area. No one was hurt but police say some nearby buildings did catch on fire. Police are also investigating reports that other cars are broken into and vandalize around that same time.

HOLMES: The Olympic flame on the move, once again, headed for Tanzania. I think after being carried to the streets of Buenos Aires, Argentina. No real incidents there. So they compared to what we saw in San Francisco, also in London insiders where people protesting on China's human rights record.

President Bush, in the meantime, is re-affirming this plans to travel to Beijing in August, but he has instead if he is going to attend the opening ceremonies.

NGUYEN: OK. Here's the question for you this morning. Should drug offenders be locked up or placed into rehab? At least one state believes treatment is a better and cheaper option than prison.

CNN's Kathleen Koch takes a closer look at this issue.

(BEGIN VIDEOTAPE)

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): Three quarters of the drug offenders in state prisons nationwide are there for non- violent offenses. Jailing them all is state's billions. Mississippi is now considering many early parole. Vermont, New Jersey and South Carolina, are looking at funneling more into treatment instead of prison. Maryland began increasing opting for treatment over jail eight years ago. From 2000 to 2005, treatment admissions went up 28 percent while incarceration with drug offenses fell by 7 percent.

JOSHUA SHARFSTEIN, BALTIMORE HEALTH COMMISSIONER: For people who are committing, you know, crimes directly related to their addiction and who once that addiction is taken care of, can really rejoin society. It's is so much better for society to be investing in treatment for these individuals.

KOCH: Vernon Nelson and her Baltimore substance abuse system after his second trip to jail.

VERNON NELSON, RECOVERING DRUG ADDICT: I laid on that hard floor and I said, this isn't the kind of life I want to live, laying on this hard floor in jail.

KOCH: Counselors kept the pressure on.

NELSON: They stayed on me. They said, when you leave this time, you are going to be a different person. You are not going to come back in.

KOCH: Now, Nelson helps others at the treatment center, like Donald Levi, who gets acupuncture to help control his drug cravings.

DONALD LEVI: I would die if I didn't come here. I would have been in prison for the rest of my life.

KOCH: A group advocating reduced incarceration says Maryland jurisdictions that rely more on drug treatment programs have seen crime drop by more 10 percent. Still some psychiatrists point out treatment is not Full proof.

DR. MARK MILLS, PHDF, CLINICAL PSYCHIATRY, COLUMBIA UNIVERSITY: Sometimes they get better again. Sometimes, they're getting better lasts for 50 years. Sometimes the last 50 minutes.

KOCH: Recenevism (ph) is why one Maryland lawmaker instead advocates drug prisons.

PATRICK MCDONOUGH, BALTIMORE CITY DELEGATE: And this is a prison totally dedicated to drug rehabilitation because we have them in a captive audience. They have to do the drug rehab. They have no chance of getting out if they don't do that.

KOCH: Maryland currently spends 26 cents on treatment for every dollar it spends on incarceration.

Kathleen Koch, CNN, Washington.

(END VIDEOTAPE)

HOLMES: Tax day.

NGUYEN: Yes.

HOLMES: Some people just got chills when I said it, I'm sure. Maybe, really, the most dreaded day of the year for a lot of folks.

NGUYEN: Especially if you have to write a check. But don't worry. We are going to try to ease some of that pain for you. We have some last-minute filing tips, that's coming right up.

(COMMERCIAL BREAK)

NGUYEN: So, if you have been putting off doing your annual tax return, I know a lot of you have, you better get on it. Because it's due midnight Tuesday. And CNN personal finance editor Gerri Willis has some last-minute tax tips.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi, Betty.

Get ready for tax time, April 15th is just days away. And if you are one of the millions of people who wait until the last minute to file your taxes, you are not alone. There isn't much time so be careful, check for errors and look for all deductions that you might be entitled to. There are some, you might now even know about. For instance, there's a deduction for installing energy-efficient appliances in your home, and one for college tuition.

Remembering you can deduct your state's income tax and if you don't have that, you can deduct your state's sales tax. So, choose whichever will give you more. And be sure to look for losses. If you lost money on the stock market in 2007, use those losses to offset capital gains. If you have more losses than capital games, you can deduct another $3,000 worth against ordinary income.

Unfortunately, loses from selling your help, they can't be deducted and if you don't think you can make the Wednesday deadline, you can get a six-month extension, but you'll have to pay an estimated amount. File form 4868 and use tax software or last year's return, to estimate what you owe.

But hey, don't underpay. On October 15th, you'll owe interest of seven percent of what you underpaid and up to 25 percent penalty on the underpayment. Another good reason to file on time, you'll not receive your economic stimulus check until the IRS receives your tax returns from 2007.

Coming up on "OPEN HOUSE," how to sell your home in any market. One guest tells us how. Then get a loan on the internet, it's call peer-to-peer lending. And I'm going to tell you all about it. Why reverse mortgages are providing some folks with the way out of foreclosure. That's "OPEN HOUSE," 9:30 a.m. Eastern -- Betty.

NGUYEN: All right, you know, this is an edge for Olympians.

HOLMES: And it is a show for the ladies. Josh Levs, you got our attention at least.

JOSH LEVS, CNN CORRESPONDENT: Well, Betty is going to have to let us know how much of a show it is.

NGUYEN: Do I want to see this?

LEVS: You know, I actually think ...

NGUYEN: I might? Bring it on.

LEVS: You might actually want to see this. Coming up. This is CNN.com yesterday and became one of our top stories. What happens when NASA meets Speedo, coming up.

(COMMERCIAL BREAK)

HOLMES: All right. Do we need to introduce this? Let's just get to the video.

NGUYEN: I don't know. Yes. Can we just show the video? Here's what it is. They are talking about this revolutionary new swimsuit that is, according to Josh Levs, tighter than skin tight. Now, I don't know what that means. How do you get tighter than skin tight?

HOLMES: The tightest thing you've ever seen.

NGUYEN: Should we even -- I mean, can we show this on television?

LEVS: We can show this on television. You are going to see a lot to of this in the Olympics. Well, first of all, let's show the CNN.com so you can see what everyone is so excited about yesterday at CNN.com.

NGUYEN: OK.

LEVS: Do you have that web page there? What you're going to see is, just go down a little bit. So, that's the picture that's out there. So, a couple of the guys -- so, but now we're going to the video that Speedo released. So, here's what it is. It is NASA technology that has been created that automatically whips moisture away from the skin.

So, it is tighter than your skin in a lot of places. They studied hundreds of athletes, they figured out where the body creates the most of the friction in water.

NGUYEN: Where is that?

LEVS: Oh, I don't know. They says it's like eight different places. They didn't show me, specifically.

NGUYEN: What does this have to do with it?

LEVS: That is from NASA because they say that it is similar to what people can be used in space technology and what you do is -- first of all, if you can get this on in the first place, that's pretty amazing.

But once it's on, it automatically whips away any moisture and it cuts down on your friction. Some people are saying this is doping, it shouldn't be allowed because it's giving you a tremendous edge. But so far they have broken 120 world records. And have you (INAUDIBLE)?

NGUYEN: They really think it has to do with the suit itself?

LEVS: He says he really believes. He says on the record he believes virtually all of them will -- don't be surprised if every record in the sport falls this summer in Beijing because of that from Speedo.

NGUYEN: So, are they all wearing it? Or is it just the U.S.?

LEVS: The U.S. team has it. So, yes, I was reading about Zimbabwe, some other country that do have but some countries that are not wearing it are the ones saying it's unfair.

HOLMES: So, it's non-exclusive to the U.S. or his country. Anybody can get it if you want it?

LEVS: Anybody can have it, anybody can have it. I should mention that Speedo is a supporter of the Olympics, of the swimming team. But, yes, I mean, this is a big deal right now and yet the people are enjoying the pictures very much. It is extremely, extremely graphic at the moment. Generally ...

NGUYEN: Yes, you thought hot pants were tight, just check this out.

LEVS: Yes, I mean it's not like ...

NGUYEN: It's not bad.

LEVS: ...you know, it's going to be "Baywatch" but you know, it's when you see them all and whatever.

NGUYEN: Did you say "Baywatch"?

HOLMES: You brought (ph) "Baywatch" back in?

LEVS: Well, you know ...

NGUYEN: All right, Josh, enough of that.

We're going to go on to some problems that people are facing today. Thousands of passengers stranded, thousands of flights canceled as American Airlines does safety checks on its MD-80 aircraft.

And coming up at 10:00 this morning, we're going to talk with an airline travel expert about what's ahead for the nation's largest air carrier.

HOLMES: But now first, we have "OPEN HOUSE" with Gerri Willis. That starts right now.

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