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CNN Saturday Morning News

Forced Spending Cuts in Place; How Will $85 Billion in Cuts Affect Americans?; Christie Getting Cold Shoulder From Republican Party; Harlem Shake Moves Up

Aired March 02, 2013 - 09:00   ET

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

BRIANNA KEILAR, CNN ANCHOR: Good morning, everyone. I'm Brianna Keilar, in for Randi Kaye.

VICTOR BLACKWELL, CNN ANCHOR: I'm Victor Blackwell. It's 9:00 on the East Coast, 6:00 a.m. out west. Thank you for starting your day with us.

President Obama has put into place a series of what he calls dumb and arbitrary cuts. Both Democrats and Republicans blame each other after talks to avoid the cuts fell flat.

KEILAR: Those $85 billion in cuts will likely affect your life in one way or another. I'm joined now by our chief business correspondent, Ali Velshi.

Ali, so, how can, do you think -- how, ultimately, is this going to impact markets?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, you know, you'll notice, we were talking about the Dow hitting a five--year high through the course of the week. We were almost at the all time high for the Dow.

So I wouldn't say that markets are all that fearful of this, partially because they're more worried about the budget. We don't actually have a budget in this country, but something called the continuing resolution, which stands in place of a budget, because we haven't had to do one. That was supposed to expire at the end of March, and that's going to be the big battle. So markets, I think, have been sitting back and waiting for this.

Bottom line is, there are going to be people laid off as a result of these forced budget cuts. There's an estimate that economic growth is going to shrink by about half a percent to 0.6 percent. So that's real jobs, that's real income for Americans. If you think that it's worth it for the long--term benefit that the sequester, these forced budget cuts are going to impose, then maybe it's worth it.

The problem is, these have been so sort of irrationally done is that it's not going to achieve the sort of effect on the long--term debt that most people were hoping for. So it's unclear, Victor and Brianna, what effect this is really going to have. But it is going to slow the economy down, and starting in April, you're going to start seeing people furloughed and laid off. BLACKWELL: Let's bring in the host of "YOUR BOTTOM LINE," Christine Romans.

Christine, my question for you is, we've heard so many different perspectives about how dramatic the cuts are and how they will be felt. First they were catastrophic, and then the president says, it's not a cliff, it's a tumble. How damaging are these cuts?

CHRISTINE ROMANS, HOST CNN'S "YOUR BOTTOM LINE": It's not Armageddon tomorrow. I mean, the sun will rise and business is going on tomorrow. I want to be very clear about that. Some of sort of the real dire, dire talk of a few weeks ago has died down, because this is going to be something that is going to unroll over the next few months.

It will have an effect, but we don't know exactly what the effect will be. And look at markets. Markets are near record highs. Markets are saying they don't think this is going to kill the American economy. One reason why markets might be so high, stocks might be so high is because in the markets, people are thinking, Congress, in the past, when there's been a sequester, have softened it later with other legislation. Markets might be betting they're going to soften this a little bit, they'll do some things retroactively, they won't let the full sequester last for the full seven months. That's what markets are telling us.

But look, if you are a doctor, starting April 1st, you're going to get paid $0.02 later on the dollar for your Medicare reimbursements. If you are a worker for any of the government agencies, many of the government agencies are going to be taking unpaid time off. If you're taking unpaid time off, are you going to buy a truck? Probably not, right?

So this is how it affects the economy. But I want to be very clear here, $85 billion, this indiscriminate way they're taking it out of a relatively small part of the budget, it's just a really stupid way to run a government. It's a stupid way to run the books. And that's what the real problem is here. I'm personally very surprised that markets have been so sanguine on this and love Ali's thoughts on this. I mean markets are telling us, "Hey, this isn't going to kill corporate America or profits," and that's what markets measure, and markets are near record high.

VELSHI: Here's -- you know, Victor and Brianna, here's an interesting thing. It's not that you can't take $85 billion out of the budget in a year or $1.2 trillion over 10 years. In fact, there are ways to do it, but they just happen to picked the most sloppy way to do it. So I'm hearing from all sorts of people, I can cut nine percent out of my household's budget or 13 percent out of my company's budget if I were forced to, yes, but you wouldn't just do.

If you have a household bill and you had to cut 10 percent, you wouldn't say, I'm taking 10 percent off of my mortgage and I'm taking 10 percent off my groceries. You would eliminate one whole thing or two whole things that you can't use.

ROMANS: You triage your bill. You triage it. VELSHI: You triage it. And this is not triage. This is across the board. That's why it's sloppy. So for all those who say, "You people don't think a budget should ever be cut." That's just not true, you just don't do it this way.

KEILAR: That's right, you take it out of your entertainment budget or your travel, not your mortgage.

VELSHI: Less coffee, whatever.

KEILAR: Your Starbucks.

BLACKWELL: All right. Ali, Christine, thank you so much.

And in less than 30 minutes, Christine will be hosting "Your Bottom Line" live.

KEILAR: And at 1:00 p.m., Ali Velshi will be live with "Your Money" from Washington.

BLACKWELL: All right. Officials are back at the scene of a huge sinkhole in Florida. Rescuers are trying to find Jeff Bush. He's presumed dead. This is now a recovery effort, not a rescue, but his body has not been recovered after the earth opened up and swallowed him as he slept yesterday.

KEILAR: The sinkhole was believed to be about 20 to 30 feet wide, about 20 feet deep. You can't see it here because the house is actually covering it. And CNN's Anderson Cooper talked to the victim's brother, who tried to save him.

(BEGIN VIDEO CLIP)

JEREMY BUSH, SINKHOLE VICTIM'S BROTHER: So I ran to the bedroom, I went to go open the door and run in, turned the light on and I seen that there was no floor there. Everything was gone. Our brother's bed, our brother's dresser, my brother's TV, and my brother was gone. And this big hole, all you could see was, you could barely see his bed. And I jumped in the hole to try to take him out. I got a shovel and just started to try to dig him out.

And I thought I heard him screaming for my help, I thought I heard him asking me for help, so I tried and tried and tried digging him out and I was screaming and screaming for him and I couldn't get him out. I tried so hard. I tried everything I could.

(END VIDEO CLIP)

KEILAR: So sad.

John Zarrella joining us live now from Stephner, Florida.

John, this -- I mean, when you look at this house and you understand what's going on here, it's a really fragile situation. Are officials even going to be able to get into this house today? JOHN ZARRELLA, CNN CORRESPONDENT: Yes, you know, Brianna and Victor, that's the question. I think, you know, there are two overriding issues here. Yes, indeed, they want to get in there and see if they can recover Jeff Bush's body.

But of more concern to them right now is they want to make sure that the ground around it is stable, and it is not stable at this point. All of the ground testing they've done with the equipment they have behind there, with ground penetrating radar shows that the cavernous area has very steep walls and it's very sandy right around the area, which means it's going to further collapse, they say.

And the other concern that brings then is what about the houses on either side of it? How far out does this sinkhole extend? Who else is in jeopardy?

So quite frankly, while this is a recovery effort and they do hope to get in there at some point to recover Jeff's body, their big concern is they don't want to have anybody else hurt in the process or killed. And they have to find out, most importantly, how wide this thing is going to get and who else might be affected.

KEILAR: And the house, obviously, John, has been condemned. So where's the family staying? And maybe this isn't as much of a concern, obviously, as trying to retrieve their loved one's body, but have they been able to get anything, any of their possessions from the house?

ZARRELLA: No. No, nothing. I talked to Norman Wicker yesterday, one of the family members who was in there at the time, and Norman said, you know, look at what I've got on. I've got some sandals on, I borrowed somebody else's sweatshirt. We got out with nothing but what we had on our backs.

Now, a good Samaritan, Norman told me, did tell them that he was going to give them a place to live for the next couple of months, which is certainly good news, and the fire department has set up a fund for people who can donate to the family, so there are -- there is at least a little bit of brightness for them today, as they try to recover from, you know, just clearly an unexpected, terrifying, sudden, and tragic incident. Brianna?

KEILAR: Unfathomable incident, I think, which is why it's captivated sort of the attention of so many people. John Zarrella, thanks for that.

ZARRELLA: Sure

KEILAR: Now, New Jersey governor Chris Christie has been snubbed by CPAC and now Republican congressman Peter King is coming to his defense.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: That's a suicidal death wish. CPAC, to me, loses all credibility.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KEILAR: New Jersey Governor Chris Christie was once the rising Republican star, but now it seems he's getting the cold shoulder. Christie was not invited to the Conservative Political Action Conference set for later this month. The powerful group's leader says it's because Christie backed a temporary expansion of Medicaid and the $60 billion Hurricane Sandy relief bill. Republican Congressman Peter King says the group is ignoring Christie's record.

(BEGIN VIDEO CLIP)

REP. PETER KING (R), NEW YORK: That's a suicidal death wish. CPAC, to me, loses all credibility. You have a governor who is conservative, he's balanced the budget, he's taken on public employee unions, he's pro--life, and yet he has a 74 percent favorable rating in a Democratic blue state. Chris Christie is doing the job, but they said because he fought for the aid for New Jersey, which he was entitled to, the same aid that every other state has always gotten, he won't be accepted. To me that writes off CPAC as a serious force.

(END VIDEO CLIP)

KEILAR: Christie seems unfazed saying, "I wish them all the best, they don't want to invite me, that's their call. It's their organization, it's their business, and they get to decide who they want to have come and not come."

One of America's largest cities is just about broke. So the state of Michigan is stepping in to take over Detroit city government. Michigan's governor, Rick Snyder, announced yesterday that the state is taking drastic action and appointing an emergency manager to run the city government. That manager will have the power to cut spending and to throw out city contracts if necessary. You might not be surprised that the mayor disagrees with this decision.

(BEGIN VIDEO CLIP)

MAYOR DAVE BING, DETROIT: The state has not been as good to Detroit as I think they should have been, because we lose revenue sharing, based on our population loss. And so, there's just a myriad of things right now, and most of it revolves around revenue. And, you know, we can't cut our way back out of this problem. I think we've cut as much as we can cut. We've got to think about how we can raise revenue again.

(END VIDEO CLIP)

KEILAR: The governor says this won't be a quick fix. Snyder mentioned that he already has a top candidate for the manager post.

BLACKWELL: The pontiff parts with his red Prada, things get hairy for Hagel, and the world better redneckognize(ph), because honey boo boo is going global. Here's a look at the week that was.

(BEGIN VIDEOTAPE) ISHA SESAY, CNN ANCHOR: The battle over Chuck Hagel's nomination is over.

CHUCK HAGEL, DEFENSE SECRETARY: That's a reality.

ANDERSON COOPER, CNN: The red shoes of a pope, gone.

JON STEWART, HOST, "THE DAILY SHOW": It's got to be done, though, because otherwise this guy could just make himself pope again by clicking his heels together three times.

UNIDENTIFIED MALE: Honey Boo Boo child is a massive hit overseas and I can't believe I just said that.

BLACKWELL (voice-over): The Prada goes away, Honey Boo Boo goes overseas, and did members of the NFL go too far?

CAROL COSTELLO, CNN: After a bitter confirmation, Chuck Hagel has now been sworn in as U.S. defense secretary.

BLACKWELL: It wasn't easy for Chuck.

DAVID MUIR, ABC NEWS: Republicans had delayed his vote and objected over his views on Iran, among other things.

BLACKWELL: Like some of his past affiliations.

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": Is he a member of the al Qaeda kids club?

BLACKWELL: Ah, I wouldn't go that far. Needless to say, after all that, at the Pentagon, it's now Charles in charge.

At the NFL combines this week, speed was a factor. So was agility. And so was sexual orientation. Wait, what?

SUZANNE MALVEAUX, CNN: An NFL draft prospect says that teams asked him if he likes girls.

BLACKWELL: According to one prospect --

UNIDENTIFIED MALE (voice-over): They asked me like, do you have a girlfriend, are you married, do you like girls?

BLACKWELL: That's a big no-no.

CARLOS DIAZ, CNN SPORTS: Any federal, local, or state law says you cannot base employment on someone's sexual orientation.

BLACKWELL: The NFL is investigating the allegations.

DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN": As you know, the pope, a couple weeks ago, was fired.

BLACKWELL: I'm sorry, come again?

LETTERMAN: They caught him stealing communion wafers.

BLACKWELL: Not exactly, but he did resign and he did say good-bye to something else.

CHRISTIANE AMANPOUR, ABC NEWS: He will dispense with his signature red Prada shoes.

STEWART: That's got to hurt.

BLACKWELL: The pope will trade in the red ones for a pair of brown ones.

COLBERT: Meaning, he'll no longer be able to transport himself to Kansas.

BLACKWELL: The shoes, he had to give back. But we should expect to see more of them (ph).

JIMMY FALLON, HOST, "LATE NIGHT WITH JIMMY FALLON": Like most Catholics, he'll be back for Christmas and Easter.

BLACKWELL: Honey Boo Boo is going worldwide.

UNIDENTIFIED FEMALE: You better recognize (ph).

JIMMY KIMMEL, HOST, "JIMMY KIMMEL LIVE": So that should be good for our reputation abroad.

BLACKWELL: TLC announced its hit show is already number three in Poland.

KIMMEL: In other countries it would be called cheese monsters battles Type 2 diabetes.

UNIDENTIFIED MALE: Honey Boo Boo is set to Italy, Sweden and Latin America all in the next month.

CONAN O'BRIEN, HOST, "CONAN": Which means the show will be translated into Spanish, Arabic and maybe someday English.

BLACKWELL: And that's a look at the week that was.

(END VIDEOTAPE)

KEILAR: A sinkhole opens up under a house in Florida and the man living in the house vanishes. But how does something like this happen? We'll get some answers.

(COMMERCIAL BREAK)

KEILAR: Downtown Ft. Worth, Texas, looks a little bit different today than it did on Thursday. More than 2,000 American heroes who made the ultimate sacrifice in Afghanistan were honored by one man's personal tribute. Navy veteran Ron White, who served in Afghanistan, took nearly eight hours to write every name on this temporary memorial and he did it all from memory. Unbelievable. BLACKWELL: Wow.

KEILAR: Unreal.

BLACKWELL: Well, as we've been telling you, a nightmare is unfolding in a town in Florida. A sinkhole opened up beneath Jeff Bush's bedroom and he was swallowed alive. Now, Bush's panicked screams on Friday were the last that anyone's heard from him. And he's now presumed dead.

KEILAR: Officials say the hole, which is under the house, is as wide as 30 feet across. It's expanding, which is taking the house with it, as it opens. And Nick Valencia has been following this story closely for us. So, first, and I will tell you, Nick, because this is something that's -- you almost can't believe it, it's this unbelievable --

NICK VALENCIA, CNN CORRESPONDENT: So bizarre, isn't it?

KEILAR: -- phenomenon. I was looking at pictures of sinkholes, you know, just searching images on the web. How does this happen?

VALENCIA: Well, usually, Brianna, it's a naturally occurring event. But sometimes, it can be caused by man--made things, things like construction, things like mining, but usually what happens here is heavy rain sits on top of this sand and clay. If you're taking into account Florida's landscape, they have that fragile, very porous limestone that sort of percolates down into the earth, forming these cave--like areas here.

They're also formed, these cave--like areas, sinkholes are also formed by things like drought and punctuated by heavy rain. If it's something that happened like Thursday night into Friday morning in Hillsboro County, Florida, it happens without warning.

BLACKWELL: what we know about Florida's makeup is that there's a lot of that soft sand and the aquifer that's below the limestone where the source of fresh water is. Is the state of Florida any more prone to, you know, addressing these than any other state?

VALENCIA: You know, that's a great question. And in fact, sinkholes, Victor, are such a common part of Florida's landscape that the Florida State Department has, in fact, dedicated a Web site to sinkholes. All these dozens of dots, these dozens of dots freckling up and down Florida's coast, these are all past sinkholes, past recorded sinkholes.

Now if you look at the region right here, this Tampa Bay region, Hillsboro county area, where that sinkhole happened Thursday night. Now, this is an area, according to that Florida state department, that's very susceptible to abruptly forming sinkholes that just collapse. It's dominated by that region. Now if we can go back to that original graphic here, I'll show you one of the most drastic ones and dramatic sink holes that's recorded in Florida. This is in (INAUDIBLE) Florida in 1981. It's one of the biggest sinkholes recorded there in the state. It just happened out of nowhere, guys. This is a large collapse. It took with it, partial portions of buildings and even a swimming pool, if you can imagine that. So that happened in 1981. And these are some really scary things, guys. You know, Jeff Bush was asleep in his bedroom and without warning, it was that loud commotion that he heard just before he fell into the earth.

BLACKWELL: It's like a horror movie.

VALENCIA: It is just a terrible tragedy.

BLACKWELL: Just sucked into the earth.

Nick Valencia, thank you.

VALENCIA: Thank you.

BLACKWELL: The Harlem shake. It's a craze that's taken over the internet. I love this dance. I love the track. I love everything about this but the airlines, they did not love it. And now the composer, he's reaping the benefit. How this man is making money off of the Harlem shake.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

BLACKWELL: All right. So, the Harlem shake. This new dance craze, I love all these dance crazes. I love the Gangnam style, I did the Macarena when that was hot, but this one is reaching new heights. 30,000 feet up, to be exact. College students taped this Harlem shake on board a flight a couple of weeks ago. And while the dancing looks like a lot of fun, the FAA, not amused. It's looking into this incident.

KEILAR: The composer, though, of this song, of this updated version of the Harlem shake --

BLACKWELL: Can we keep playing the music?

KEILAR: It's so good. I don't love all dance crazes, I like this one. So the composer's probably all smiles, unlike the FAA, and that's because he makes money for all of those viral video clicks. Felicia Taylor explains.

(BEGIN VIDEOTAPE)

FELICIA TAYLOR, CNN CORRESPONDENT (voice-over): The University of Georgia's swim team grooves to it underwater. The students at Colorado College broke every library code in the book with their version.

The Harlem shake has even caught fire, among firefighters and employees at San Antonio Sea World. This is the video that started it all. Four guys in crazy outfits busting a move to the Harlem shake on a YouTube posting last month. Now, Bower, the song's creator, is poised to hit it big. He gets a piece of the ad revenue every time someone clicks on a Harlem shake video. BILL WERDE, EDITORIAL DIRECTOR, BILLBOARD MAGAZINE: This could be a meaningful revenue stream, if you figure a couple dollars per thousand streams and you multiply that by millions, you can start to see that this is real money.

TAYLOR: Real money, indeed. As of last week, 100,000 Harlem shake videos had been viewed about 400 million times on Youtube. And that's boosting record sales. "The Harlem Shake" was the top song download on iTunes US last week and one of the top downloads at iTunes Europe.

Bower isn't the only artist riding the viral video wave. South Korean artist Psy hit (INAUDIBLE) last year with Youtube phenomenon, "Gangnam Style" with more than a billion hits.

WERDE: Billboard has recorded that Psy made upwards of $2 million just from the streams of "Gangnam Style." That was without selling a single track.

(MUSIC PLAYING)

TAYLOR: And Youtube versions of Carlie Ray Jepsen's "Call me, Maybe" helped boost sales of that song. Some may have been surprised they were viral video participants.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Here's my number, so call me maybe.

TAYLOR: Corporate America sees a financial opportunity in all this. Pepsi is now promoting soda with its very own Harlem shake.

WERDE: This is great for the music industry. I mean people are having fun with music again, and that's probably the most important thing.

TAYLOR (on camera): And so we thought we'd leave you with our very own version of the Harlem shake.

As you can see behind me, even the bulls on Wall Street want in on the action as the viral video craze shakes up the music industry.

Felicia Taylor, CNN, New York.

(MUSIC PLAYING)

(END VIDEOTAPE)

BLACKWELL: I love it. I love it. Thanks for watching today.

KEILAR: We'll be back at the top of the hour.

BLACKWELL: Next, Christine Romans live in New York for "YOUR BOTTOM LINE" starts now.