Return to Transcripts main page

CNN Saturday Morning News

The Murdoch Scandal; Debating the Debt Ceiling: Why So Much Tension in Washington?; Understanding the Effects of Not Raising the Debt Ceiling; Are Parents of Overweight Children Guilty of Child Abuse?

Aired July 16, 2011 - 07:00   ET

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

T.J. HOLMES, CNN ANCHOR: Good Saturday morning, everybody.

On the right side of the screen, you are seeing a live picture of one of the busiest highways in the country. Also seeing the construction going on on the left side of the screen that is going to shut that highway down and it's going to cause something that they are calling "carmageddon" not Armageddon. That was a few months ago, right? Carmageddon, we'll give you the details of the 405 shutdown.

Also, all this talk about the debt ceiling. But do you really know how this whole debt ceiling impacts your bottom dollar? We're going to get into specifics for you, break this down a little simpler for you this morning.

But, first, an apology from Rupert Murdoch. He's responding to the "News of the World" tabloid hacking scandal in the U.K. I'm going to show something and I want you to have to listen to this really carefully.

This shows Murdoch going into a meeting with the family of a murdered teenager. It was the teenager's hacked voice mails that really sparked the outrage in this whole scandal.

Look.

(BEGIN VIDEO CLIP, ITV NEWS)

UNIDENTIFIED MALE: Shame on you! Shame on you! Shame on you! Shame on you! Shame on you!

REPORTER: Mr. Murdoch, will you tell us what you said to Milly Dowler's family?

RUPERT MURDOCH, CHMN. OF NEWS CORPORATION: If you will just keep silent for a minute. It was a private meeting.

UNIDENTIFIED MALE: Keep your head down, mate.

REPORTER: Can you tell us what you said?

MURDOCH: I'm the founder of the company. I was appalled to find out what happened. REPORTER: Are you pleased?

MURDOCH: I apologize. I have nothing more to say.

(END VIDEO CLIP)

HOLMES: It turns out Rupert Murdoch did have more to say.

Let's get more on the fallout from this first before we get to what else he had something to say. Rebekah Brooks, there she is with Murdoch earlier this week. She has resigned as head of News International. That is Murdoch's company that oversaw the "News of the World."

Also resigning is Les Hinton. He's head of the Dow Jones. That's another of Murdoch's companies. He was actually the chief of News International when the hacking first took place.

Get back to Murdoch here now. He says he's sorry and he is taking to the newspapers to make it clear.

Our Jim Boulden has more from London this morning about what is in the newspapers.

Jim, hello to you.

JIM BOULDEN, CNN CORRESPONDENT: Good morning, T.J.

Yes, the British public woke up this morning to headlines, a number of newspapers. Including some of Murdoch's own newspapers, and the rival papers, where he has said, "We are sorry" -- big newspaper ads.

He says, "I realize that simply apologizing is not enough. That we regret not acting faster to sort things out."

That's an interesting line because a few days ago, Rupert Murdoch said that he thought they only made minor mistakes in this whole scandal and that they acted pretty quickly.

It's even here in "The Financial Times," of course, one of the more sort of prestigious newspapers here in the U.K. So, he is trying to get this word out to people all over that he says that they are sorry that this entire scandal has taken place -- T.J.

All right. Jim there for us, this morning. Jim, we appreciate you letting us get a little insight into that. Thanks so much.

We turn back here to the U.S. and to Washington, D.C., and the debate over raising the debt ceiling. There are no debate talks scheduled for this weekend after five days of talks earlier this week. The U.S. actually hit the debt limit in May.

But the issue is the deadline of August 2nd. That is the D-Day. That is when the government says they won't be able to pay some of its bills. Now, the stumbling block in these debates has been taxes. Republicans say spending cuts are the only way to go. Democrats want to do away with some tax breaks for wealthier people.

Here's President Obama from this morning's White House address this morning.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But we're not. That's why I'm willing to compromise. I'm willing to do what it takes to solve this problem even if it's not politically popular. And I expect leaders in Congress to show that same willingness to compromise.

The truth is you can't solve our deficit without cutting spending. But you also can't solve it without asking the wealthiest Americans to pay their fair share. Or without taking on loopholes that give special interest and big corporations tax breaks the middle class Americans don't get.

It's pretty simple. I don't think oil companies should keep getting special tax breaks when they're making tens of billions in profits.

(END VIDEO CLIP)

HOLMES: Now, here is from this morning's Republican response from Senator Orrin Hatch. He says, quote, "We have been down this road before and Republicans will not go down it again. In 1990, Congress and the president stuck a deficit reduction deal that combined spending cuts with tax increases. Unfortunately, while the tax hikes remained, the spending restraint did not. And our debt marched higher."

Well, California is expected to have the big traffic nightmare. It has started. They are calling this thing carmageddon. Essentially, crews have shutdown the Los Angeles highway in both directions this weekend to work on a bridge.

Not just any highway we are talking about here. We are talking about the 405. It is one of the busiest in the country -- 500,000 cars pass through the construction area on an average weekend.

That's a live picture there and nothing is passing through it right now. All of those drivers have to find a different way around this weekend. Officials there are telling people just stay home.

The construction company hopes to have the work done before Monday's 6:00 a.m. deadline. And they have a financial incentive to do it because they could be fined some $72,000 an hour if they don't finish on time.

Well, these are your options: you quit or you can be fired. That is the warning from Atlanta's new school superintendent to teachers implicated in the massive cheating scandal. A hundred and seventy- eight teachers and administrators were this warning letter and they are being given until Wednesday to resign or you will be resigned, all right?

Investigations found that teachers falsified standardized test results. So, at least look the other day, while others cheated.

Well, NASA, we have been talking about them lately -- a lot with Atlantis. But something else going on to celebrate --NASA's Dawn Spacecraft has reached its destination. That destination is Vesta, a massive rock. It's the first time NASA has been able to orbit an object in the asteroid belt between Jupiter and Mars.

Dawn will pictures of Vesta, which is technically called a minor planet. It's not an asteroid. It's about 330 miles across. It took almost four years to reach Vesta.

Reynolds Wolf is standing by here for me as well.

Reynolds, it's summer. Yes, and we know it gets hot. But we're talking dangerous hot this weekend.

REYNOLDS WOLF, AMS METEOROLOGIST: Oh, you're absolutely right. You know, this is something we've seen over the last couple of days and, unfortunately, it shows really no sign of cooling off. We're talking about the Upper Midwest, where highs are going to climb into the 90s, but with the humidity, it's going to feel anywhere from 110 to 120 degrees.

We're going to talk more about the heat wave coming up in just a few moments. Sit tight. Let's see you in a little bit.

(COMMERCIAL BREAK)

HOLMES: We are talking about heat. Twelve minutes past.

And I was asking -- we are talking about the heat index getting up over 100 plus in Minnesota.

WOLF: Absolutely.

HOLMES: I assume that's not normal.

WOLF: No, not all -- 83 is the normal temperature. But, you know, if you are ever in the Twin Cities, one of the great places to go is to go to the Mall of America.

HOLMES: Yes.

WOLF: And one of the great reasons why you have this mall, one of the great reasons why because it is gets so cold there during the wintertime, you go inside.

It is an interesting turn of events and now, people are going there to avoid not the cold, but the heat. And today, it's going to be real problem.

HOLMES: You got the word spot, you got the target, you're going to keep an eye on it now? Or what?

WOLF: Well, I mean, it's kind of weird. Obviously, it's going to will be warmer in Dallas, it's going to be warmer in El Paso, but this is where you have the combination of the both the heat and the humidity which is just going to make it brutal.

In fact, take a look at this. We go a high, we're expecting 93 today. It's not the only place in the Upper Midwest and the western Great Lakers where we're going to have the extreme heat.

When you have the combination of the heat and the humidity, it's going to feel like anywhere from 110 to 120 degrees in many spots in Minneapolis. Perfect example, you take a look at just the air temperature alone staying in the mid to some upper 90s all the way through Wednesday. So, again, really, no relief expected in those spots.

The hazy and humid and hot conditions can be expected to continue for a while. And not just for there. You make your way farther to the south, just in Sunday, into Kansas City, places like Oklahoma City. It's going to feel well beyond the century point. As we wrap up things up from Sunday into Monday, again, we expect that heat wave to continue.

Thankfully, this morning, cooler air and conditions can be expected to the upper plains with that, a chance of severe storms. More on that coming up in just a few moments -- T.J.

HOLMES: All right. Reynolds, appreciate you as always, buddy. We'll will see you here shortly.

We're at 13 minutes past the hour. You hear all this talk this week about the debt ceiling. We're going to break this down a lot simpler for you. And we're going to put it in terms you can understand.

Pull out your credit card and we'll explain. That's after the break. Stay with us.

(COMMERCIAL BREAK)

HOLMES: All right. Fifteen minutes past the hour now.

There are no talks scheduled today or tomorrow for these debt talks after five days of having Democrats and Republicans leaders to the white house. The president said he has maybe hit a wall and he's had it. So, he's given sometime to go back and regroup, see what they can come up with next week. But, again, no debt talks scheduled for this week.

As you know if they do not raise the debt ceiling by August 2nd, the Treasury says the U.S. government will essentially run out of money to pay all of its bills. So, why is this causing such tensions between Democrats and Republicans?

Here now, our Tom Foreman. (BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: What we are seeing right now is essentially a philosophical fight about how to deal with the problem that everyone agrees on. This is the problem, our debt.

Ever since the early 1900s, we've been spending more money than we have been taking in in this country. And so, our debt has grown.

Each time it's got too big for us to handle, we just basically extend the debt ceiling so we can handle more debt.

But, now, once again, it's right up here. It's just about to go past that debt ceiling. And we've got to have to decide if we're going to make the debt ceiling higher -- in effect, make this bucket bigger to handle more.

And both sides have different opinions of how we do that. If we're going to raise the debt ceiling, the Republicans say, first, you have to address -- this big faucet of spending up here. You must reduce your spending so even if this is made bigger, it fills up less quickly.

Democrats are not so keen on this. They say these are critical programs to many people in the country. Maybe we can make it a little smaller, but they'd like to keep a lot of it in place the way it is.

They say you certainly have to see this to make it work -- taxes. If you can put taxes into the equation, they say, then some of what is flowing into the debt can be taken care of ahead of time, in effect. You are paying for it instead of just adding it all up over here.

This is the crux of the problem. Each side is pretty well- cemented in their position and having a hard time budging. The Republicans are saying you have to make this smaller. That's how you keep the debt down. The Democrats saying you've got to siphon it off with new taxes. That's how you keep the debt down.

The meeting in the middle -- that' the problem. They're both finding -- they can't figure out how to do that, even though they agree that if they don't do something about it, this will overflow and we'll have a whole new set of problems.

(END VIDEOTAPE)

HOLMES: OK. You hear debt ceiling and the government not being able to pay its bills, but that could lead to a problem for you paying your bills.

Our financial analyst Clyde Anderson is gliding in as we speak. He's with me after the break.

(COMMERCIAL BREAK)

HOLMES: All right. Twenty minutes past the hour now. You heard this 100 times in the past weeks. The debt ceiling, it needs to be raised. What exactly does this mean? Think about your credit card in your wallet right now. You got a maximum amount of money you're allowed to charge on that credit card.

And let's say you reach your max. So, you ask the bank for an increase in your credit limit. Well, if they don't give you that increase in debt limit, you can't pay those bills you planned on putting on your credit card.

That's exactly what we are talking about with the debt ceiling, except, the government's debt limit right now was $14.3 trillion. And, yes, they need an increase in that limit.

Let me bring in our Clyde Anderson here, financial analyst.

We hear about the debt ceiling and the government cannot pay its bills. That could lead directly to some people not being able to pay their bills, too. Which groups are we talking about here? Which one should we be talking about could be most adversely affected?

CLYDE ANDERSON, FINANCIAL ANALYST: Well, think of several people. You know, people that receive Social Security income immediately.

HOLMES: Yes.

ANDERSON: I think that's what we're talking about because they could think about we cannot have checks, or people that receive checks may not get them in August. And so, that has a big trickledown effect because now, they won't be able to pay their bills.

And you think about the economy that we're in already. You know, we are talking about potentially going back into another recession. And so, if they can't pay their bills, it's going to affect the credit, it's going to affect the interest that they are already paying, and, potentially, more fees. And so, it's going to hurt.

HOLMES: And the president already said, he said in interview this week, he said, I don't know if those checks -- if we will be able to send those checks out. Now, another group that we're talking about here, a couple of group, you said a few of government workers and unemployed.

ANDERSON: Yes. First of all, the government workers, and we are talking about maybe a 40 percent cut. And, so, this means a lot more furloughs -- and keep in mind, we have employees that are furloughed. And so, you are talking about it could affect the military workers, it could affect any kind of federal government worker.

We'll see cuts in rail systems, parks closing -- different things. And we've been here before and seen this potentially happening. And so, now, we are really looking at it and we're facing that this could, you know, be real.

HOLMES: You mentioned the unemployed as well. What happens? Do they got those -- a lot of people are depending on that.

ANDERSON: Right. And a lot of people don't remember, you know, they've added on. The federal government is now responsible for about another 26 weeks of unemployed for those that ran out from the state. And so, now, those potentially could lose that.

What they get is a direct impact to the economy because they are paying for things. You know, they are paying for things that they need. They are also feeding it into the economy.

So, this is money that we won't have any more feeding into the economy as well.

HOLMES: That is the best point there. You are talking about a lot of people. Millions of people who don't have money not just to pay their bills, but the unemployed use the money immediately. Immediately. It goes right back into the economy.

ANDERSON: Immediately. And so, we are depending on that money as well. And we won't see that if the checks are cut.

So, not to mention the repercussions that they're going to feel from not having those checks but just the repercussion the economy is going to feel as well.

HOLMES: OK. Last thing here and a lot of people are concerned about interest rates and they have to go pay more for or they'd be charged more for loans and whatnot. Is that really an issue of concern? Does it really speak?

ANDERSON: It's something to look out for. You know, depending on what happens in the next couple of weeks, we could see that spike and it could be, you know, in mortgage rates, it could be on auto rates, and anything that you're potentially buying that you're going to pay interest on, it could increase it.

And again, we are talking about these dollars are so crucial right now to Americans. And so, if we see any kind of increase, it could affect the bottom line.

HOLMES: OK. And after all this conversation, there's no way they're going to let the debt ceiling -- there's no way. I'm saying it right here.

ANDERSON: We'll see.

HOLMES: It will not happen.

ANDERSON: You know what? The best quote I heard is that we're going to see how big our government actually is.

HOLMES: How big the government is. They are crazy. They're not this crazy.

All right. Clyde, good to see you as always, buddy. ANDERSON: Good to see you as well.

HOLMES: Thank you so much.

Well, we are 23 minutes past the hour now.

Did you know that two-third of all adults are overweight? You may have heard that before. And that's from a recent study from by the Trust for American's Health and the Robert Wood Johnson Foundation.

Now, even though the obesity rate increased in 16 states last year, some states are skinnier than others, if you will.

We got a list of skinny states? We have skinny states? And by that, we mean the lowest obesity rates, folks.

But Hawaii is number five on that list. Number four in the list is Massachusetts. Number three on the list is Connecticut.

Number two on the list, not a state, but still, our capital, Washington D.C. as the second skinniest state.

And would you believe the folks in Colorado have the lowest obesity rate in the country? Under 20 percent.

So, which had the highest obesity rates? That unfortunate list after the break.

(COMMERCIAL BREAK)

HOLMES: As promised, I want to show you the states now with the highest obesity rates in the country.

Let me start with number five: it's Louisiana. Number four on the list is Tennessee. Number three is West Virginia. Number two on the list is Alabama. You see that obesity rate.

And then number one on the list is Mississippi at 34.4 percent. That state, Mississippi, has held the title of the highest obesity rate for the past seven years.

Now, some researchers from Harvard say parents are to blame for letting children gain too much weight and suggest that in some extreme cases, severely obese children should be removed from their homes.

Here now, our Elizabeth Cohen.

(BEGIN VIDEOTAPE)

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: I know it sounds shocking, but here's the researchers rationale. They say, look, it's unhealthy for a child to be obese. And if you give the parents plenty of chances to get their kid's weight down, and they don't get that weight down, maybe you just take them out of the household and maybe foster parents will be able to do a better job. Here's what they actually say in their commentary. They say, "State intervention may serve the best interests of many children with life threatening obesity because of imminent health risks and the parents chronic failure to address the problems.

Now, as you can imagine, this caused quite a stir on the Internet and elsewhere. The whole concept of taking kids away from their parents because they are too fat. And people who argued with this said, look, you know, we understand what you're trying to do, but is it really in the child's best interest? Maybe it is the society where junk food is plentiful and inexpensive and it's hard for some kids to get out there and exercise. So, that's one criticism of these researchers.

And here's another criticism. They say, look, in this country, we only take kids away from parents when their life is in danger. Let's say for some crazy reason a parent doesn't want a child to have a surgery that would save their life. The child would idea without the surgery. Well, then, the state will take that child away to make sure the child gets that surgery.

But obesity usually isn't imminently life-threatening. It's more of a long term thing where that child may get diabetes or heart disease down the road. So, lots of criticism of this but definitely getting people talking -- T.J.

(END VIDEOTAPE)

HOLMES: All right. I'm back with you at the top of the hour with more lives. Right now, the good doctor.