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Final Shuttle Mission; Unemployment Rate Rises

Aired July 8, 2011 - 18:00   ET



Happening now: As if on cue, the clouds give way and the final shuttle mission lifts off on a mighty surge of flame as emotions soar among those gathered to witness a moment in history.

The latest employment numbers are stunningly bad and Republican candidates are quick to pounce. But could this shock lawmakers into finally taking action on America's debt crisis?

And a nasty oil spill in the shadow of the Rockies. Amid the cleanup effort, Montana's governor calls on Exxon to come clean about the circumstances. Governor Brian Schweitzer joins us live.

Welcome to our viewers in the United States and around the world. Breaking news and political headlines are straight ahead. Wolf Blitzer is off. I'm Candy Crowley and you are in THE SITUATION ROOM.

For decades, NASA has managed to make the heroic look almost routine. But as America's last four shuttle astronauts set out for the launchpad today, the drama and sense of wonder returned. Almost a million people gathered to watch Atlantis blast off on the final mission to the International Space Station.

After 134 flights and a half a billion miles in space, NASA calls this a sentimental journey into history. And as the rockets roared, carrying the shuttle aloft on a column of fire, there was this to contemplate. After Atlantis joins the rest of the shuttle fleet in retirement, the United States, the nation which went to the moon, will have no way to put people into space.

We want to go to Florida's Kennedy Space Center now, where John Zarrella has watched many shuttle launches.

John, this last one must have been something very special.

JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF: Yes, there is no question about it, Candy, that coming here for so many years, watching these space shuttles, there was always the sense that there would be a next time, there would be another shuttle. And of course, as it was clearing the tower today, the sentiment that struck me right now away was, well, this is it. There will no longer be another shuttle to come and cover.

But the point you were just making, where does this now leave the United States? And that's the big question. NASA insisting that it will in fact continue outward, perhaps going to an asteroid, perhaps going to Mars. But the questions linger, is there enough political will, will be enough money in the budgets? Will the public be behind such a high-ticket expensive item to do that down the road?

And again the United States has no way to put its own astronauts into orbit for the foreseeable future. But after the liftoff, as successful as it was, it was a time for the launch director and the launch team to kind of exhale. And they talked about how this was really a microcosm of so many launches in the past. They had to stop the count at 31 seconds while they worked through a problem. They had the weather to deal with.

And Mike Leinbach, the launch director, kind of made light of the whole fact at that polls-launch briefing about how they made their decision to go ahead with the launch in spite of the weather .


MIKE LEINBACH, SHUTTLE LAUNCH DIRECTOR: We met in my office before the MMT meeting and we flipped a coin.


LEINBACH: That's how we really make decisions.

UNIDENTIFIED MALE: He's got a big dartboard.

LEINBACH: There's a big dartboard. Now that the program is over, we can divulge some of our secrets.



ZARRELLA: You know what? I talked to Leinbach several months ago and I said to Mike, I said, Mike, what happens now that the shuttle program is coming to an end? And he said to me, he says, well, you know, I'm the launch director. There won't be any more launches to direct. So I don't know.

And of course, you know that's the feeling of many, many people here. Sadly, thousands of people losing their jobs here at the Kennedy Space Center and at other facilities around the country. And they are in the same boat as Mike Leinbach, saying to themselves what next? -- Candy.

CROWLEY: Well, we do know that this shuttle mission has a purpose. What's next for this shuttle?

ZARRELLA: Yes, a big purpose, for the next 12 days. They will be docked at the International Space Station starting on Sunday. And they are going to off-load thousands of pounds of goods, basically filling the pantry. They're going to fill the pantry. They're going to fill the refrigerator. It's the largest payload they have ever taken up on an individual shuttle mission. So -- just so that they can get the shuttle -- get the space station stocked up with a year's worth of supplies, because there just is nothing as big as the space shuttle's cargo bay, a lot of smaller rockets that will be able to take material up, take goods up, but nothing that can take as much mass up as the shuttle. And they will take down a bunch of basically junk that they no longer need up on the space station.

So it is a very important mission. They will land back here on the 20th or the 21st of the month. And NASA is hoping that when they do that, after they safe the vehicle, after Commander Ferguson calls wheel stop, they will allow the thousands of workers who are here to actually go out to the runway and touch the vehicle for one last time -- Candy.

CROWLEY: Hey, John, you know how we like to say take me behind the scenes a little? I want to know what John Zarrella, who has covered more than 70 launches, you have been at this for about three decades -- a little cheer for John Zarrella when this went up? Give me just sort of your personal feelings.

ZARRELLA: Yes, there really was, Candy. There was that moment that I looked around.

For me, what was important was that people like Anderson Cooper who was here with me and many of the other CNN staffers who were here today, I have asked them all, did you ever see one of these before? No. Did it live up to the billing? Yes.

I looked at Anderson and his face. He was like wow. That's what made me feel good, that people got to see this last launch who had never seen one before, because television just doesn't do it justice. It is a spectacular moment and it is really that is one that is etched in your mind. And I know for everybody who saw their first one here today, that it will be a moment that they will never forget -- Candy.

CROWLEY: It's pretty amazing. I tell people it's like you feel like you are being launched when you're down there. It's pretty amazing.


CROWLEY: John Zarrella, quite the end of the era, but who knows what's next. Thanks so much.

ZARRELLA: Exactly.

CROWLEY: America's latest employment numbers are just plain ugly. Only 18,000 jobs were created in June. Economists had predicted a gain of up to 125,000 new jobs.

That raises the unemployment rate to 9.2 percent and it raises the number of people unemployed in this country to 14.1 million.

Our CNN chief White House correspondent, Jessica Yellin, is here.

Jessica, it's hard to explain these numbers, but how is the White House doing it?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, look, they are acknowledging that this is not good news for anybody. But they are trying to share the pain.

Their basic message reminds me of that old Billy Joel song which goes, we didn't start the fire, no, we didn't light it, but we tried to fight it.


YELLIN (voice-over): It's a dark cloud hanging over the White House.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And today's jobs report confirms what most Americans already know: We still have a long way to go and a lot of work to do to give people the security and opportunity that they deserve.

YELLIN: No surprise, 52 percent of Americans disapprove of the president's handling of the economy. That's according to a CBS/"New York Times" poll taken before these numbers came out.

The Republican speaker of the House sees an opening.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I'm sure the American people are still asking the question, where are the jobs? The stimulus spending binge, excessive government regulations and our overwhelming debt continue to hold back job creators around our country.

YELLIN: But the economic dark cloud hangs over all of official Washington. Congress' approval numbers are even lower than the president's. So the White House is trying to share the blame, reminding Americans they inherited a debilitating recession, calling on Congress to use more tools to kick-start job growth.

OBAMA: There are bills and trade agreements before Congress right now that could get all these ideas moving. All of them have bipartisan support. All of them could pass immediately. And I urge Congress not to wait.

YELLIN: Then there's the question of timing and politics. These jobs numbers come at a crucial point in delicate negotiations to raise the debt ceiling. And it could harden positions.

BOEHNER: Well, our conversation is continuing, but in all honesty, I don't think things have narrowed. I don't think this problem has narrowed at all in the last several days.


YELLIN: Now, inside the White House, there is a measure of hope that these jobs numbers could actually help force a deal.

And, Candy, here's the thinking. It's basically that everyone here is in the same boat. Republicans, Democrats, White House, Congress, everything is being blamed by Americans for gridlock, for not doing enough to help the economy. So these jobs numbers could push them to do a deal to show that they are leading and getting something done.

That's a theory. That's a hope. There is no certainty on any side that a deal will get done and as we stand here talking, there still is no deal. Staff has been talking, but nothing completed.

CROWLEY: And they will talk through the weekend and meet with the president Sunday night.

YELLIN: And we will see. We will know Sunday if there is no deal. But if there is a deal, it will keep trickling on. If there is progress, it will keep trickling on into next week.

CROWLEY: See you Sunday. See you next week.

YELLIN: Right. Exactly.

CROWLEY: Thanks, Jessica.

While President Obama and the White House have been trying to put the best face on the June jobs report, Republican candidates were quick to pounce, seizing on the latest unemployment numbers as a reason to make a change in 2012.

CNN's Jim Acosta joins us now live.

Jim, this was just too big to pass up for those Republican candidates.

JIM ACOSTA, CNN CORRESPONDENT: It was a gift. It was a Friday morning gift. And the Republicans took it and ran with it all day long.

And, Candy, based on this jobs reports, Republicans are feeling a bit more optimistic about sending President Obama to the unemployment line.



ACOSTA (voice-over): Reactions from the GOP field to the June jobs report shot up like a space shuttle.

REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: Clearly, the president's policies haven't worked. It's a failure, and I wish it was otherwise, but it has not worked.

ACOSTA: Republican front-runner Mitt Romney released a Web video seizing on comments made earlier this week by one of President Obama's top political advisers, David Plouffe, who said people won't vote based on the unemployment rate. In a statement, Romney said: "If David Plouffe were working for me, I would fire him, and then he could experience firsthand the pain of unemployment."

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The Republicans are engaged in a primary campaign trying to get some media attention.

ACOSTA: Sensing the opening just handed to Republicans, the White House still defended Plouffe's comments.

CARNEY: I don't know where the voters that some other folks might be talking to -- but most people do not sit around their kitchen table and analyze GDP and unemployment numbers.

ACOSTA: But history has shown, as the jobless rate ticks up, chances for reelection go down.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: We have had four times in the last 35 years when a president has run for reelection with unemployment above 7 percent. Three out of four times, that president went down.

RONALD REAGAN, PRESIDENTIAL CANDIDATE: Are you better off than you were four years ago?

GERGEN: In 1980, Ronald Reagan framed the choice in pocketbook terms. No president since Reagan has won reelection with an unemployment rate higher than 6 percent. Reagan did get a second term in 1984, when the rate was 7.2 percent, but Democrats point out unemployment was already at 7.6 when President Obama took office. Even then, he was feeling the pressure.

OBAMA: If I don't have this done in three years, then this is going to be a one-term proposition.

ACOSTA: Which means the president will have to fight harder in battlegrounds like Nevada, Florida, Michigan and North Carolina, where the jobless rate is higher than the national average and where outside political groups are already sharpening their message.

UNIDENTIFIED FEMALE: I supported President Obama because he spoke so beautifully. But since then, things have gone from bad to much worse.

GERGEN: There has been a deteriorating sense about Obama. What's the plan B here? And we don't see one. But there is not yet a confidence level in the Republican alternative.


ACOSTA: The man who would like to be that alternative, Mitt Romney, has accused the White House of turning the audacity of hope into the -- quote -- "audacity of indifference."

But for that line of attack to work, Candy, voters have to believe that the candidate feels their pain, to use another term. CROWLEY: Yes. Yes, exactly, exactly. Somehow, all these campaigns, you think I have heard this before.

ACOSTA: Exactly. That's right.

And there's one man in Washington who beat all of the candidates in the GOP field. That was John Boehner with his quote, where are the jobs? He has been asking that question since 2009, for two years now. So we are hearing all of these phrases again and again and again.

CROWLEY: And again.


CROWLEY: Jim Acosta, thanks so much.

ACOSTA: You bet.

CROWLEY: An oil disaster far from the sea. Tens of thousands of gallons spill from an Exxon pipeline in Montana. We will talk about it with the state's governor, Brian Schweitzer.

Also, the scandal that is bringing down one of Britain's biggest papers moves too close for comfort to the prime minister.

Plus, Prince William and his new bride are scheduled to arrive in Los Angeles this hour. It's her first time in the U.S. We will take you there live.


CROWLEY: An environmental disaster is unfolding right now in Montana, where a thousand barrels of oil gushed out of a pipeline and into the Yellowstone River.

Montana's governor is accusing ExxonMobil of not giving the full story. He is joining us live in just a moment.

But first the latest on this crisis from CNN's Patrick Oppmann in Montana.


UNIDENTIFIED FEMALE: They told us to move our livestock away from it. They told us to stay away from it, but they're also telling us at the same time that the oil doesn't have any harmful effects on human health or livestock health.

PATRICK OPPMANN, CNN CORRESPONDENT: Does that make any sense to you?

UNIDENTIFIED FEMALE: No, it is not even remotely rational.

OPPMANN (voice-over): Exxon said they are doing everything they can to clean up the spill. But with so much oil in the river, they don't know how yet long that will take. (on camera): And you just walked a few feet down in the grasslands. All you have to do is really just yank some of this grass off and you see how almost every blade of grass is coated with this thick, just disgusting oil. It doesn't smell like you're out on a scenic and beautiful river. It really smells like you're at a gas station here.

(voice-over): Everything that the oil touches has to be scrubbed, even a reporter's shoes.

(on camera): What is going on now is I'm having my feet decontaminated. I strayed off the road a few feet, and I'm being told by ExxonMobil that you can't do that. You can't walk anywhere near the oil, even though it's practically everywhere.

UNIDENTIFIED MALE: Step down on the pad.

OPPMANN: Step down on the pad. OK.

(voice-over): It's uncertain how long the cleanup will take.

(on camera): Can you promise people, though, that Exxon will clean up what was their failure?

UNIDENTIFIED MALE: I can assure you that we are here to do the full cleanup and to be here as long as necessary until the job is done.

OPPMANN (voice-over): Some residents fear it already may be too late.

UNIDENTIFIED FEMALE: You go down to where the oil is, you can't hear anything anymore, no birds, no toads, no crickets, nothing. It's just silence.

OPPMANN: A silence people here say they hope goes away with the oil.

Patrick Oppmann, CNN, on the Yellowstone River.


CROWLEY: For more on the Montana oil disaster, we are joined by the state's Democratic Governor Brian Schweitzer.

Governor, you have been working with Exxon until recently. We have just heard an Exxon representative say they are staying there until they have cleaned it up and they are committed to doing that.

But you're accusing them of withholding information. Can you explain what's going on here?

GOV. BRIAN SCHWEITZER (D), MONTANA: Well, it hasn't been good from the beginning.

They first announced that it spilled for six minutes and it had somewhere between 700 and 1,000 barrels had spilled into the river. Well, then on further examination and frankly forced by some of the reporters, they admitted a couple days later that it actually ran for some 30 minutes, but it was still only 750 or 1,000 barrels.

Well, now we know it's more than 50 minutes. And they still say it's 750 to 1,000 barrels. They said from the very beginning that it had only gone 10 miles downstream. I called them out on that and I said, this river is a torrent. It's running at historically high levels. It's gone much further than that.

Now we know that there is a damaged soil on state parks as much as 40 miles downriver. They said there was no damage to any wildlife. And of course we are finding evidence in all of these wetlands, because, you see, the river was at high peak. It was over the banks. And so that oil that was at the top of the river, it came over the banks and has now spread out over all of these lowlands, these wetlands, this treasure trove of biology for microbes and insects and amphibians that feed the health and wealth of the river.

So, ExxonMobil, unfortunately, they haven't been square with us. I said to them from the very beginning, you be square with us, I will be fair with you. But so far, almost everything that they have told us hasn't been true. They say they want to clean this thing up. Well, I guess we are going to verify and then verify. And the message for ExxonMobil is, it will be cleaned up when Montana says it's cleaned up, not somebody in Houston, Texas.

CROWLEY: So, Governor, what's your recourse here with Exxon? Are you working with them, watching over them?

SCHWEITZER: Well, there has been an incident command that the state of Montana -- and of course the EPA is here -- and ExxonMobil have been working together.

But we pulled out of that today because ExxonMobil refused to be transparent. And of course by Montana law, we have an open government law. Now, I know a lot of other states don't do it and Washington, D.C. certainly doesn't. But any time a state employee is involved in a discussion, that door has to be open for the press.

Any time there is a document that the state of Montana is reviewing, that has to be available to the press. And of course Exxon did not agree to that. They had private security guards that wouldn't even let the press in the hotel where the work was going.

So we have pulled the state employees out. We have set up our own shop. We are going to continue to monitor them. We will have people that go over and meet with them. But, unfortunately, it's difficult for us to have a good work plan when they won't give us accurate information. They won't give us the analysis.

We requested the analysis of the oil that was in the pipeline, so that we can fingerprint it. Furthermore, we have asked for the information on the pipeline, because over the course of the last year, we know that there has been numerous questions about violations with the operation of that pipeline. We haven't gotten any of that information yet.

So we have to have good information if we are going to make good decisions in the cleanup.

CROWLEY: Let me see if I can pin you down a little bit about this. And that is, do you think that ExxonMobil is deliberately lying to you about how long this went on, about the impact of what's going on? Or do you think they just don't know?

SCHWEITZER: Well, I don't know.

They got a lot of engineers down there in Houston, Texas. They are one of the biggest companies in the world. And they got more biologists and chemists and electrical and mechanical and petroleum engineers working for them than anybody in the world.

And yet a $2 calculator can show the information they're giving is not correct. So it could be a question of competency.

CROWLEY: But it also could be lying, which is I think where you are going with that.

SCHWEITZER: Well, listen, the way this works is, we are sending them letters and we are requesting this information. We are giving them a deadline to provide that information.

And at the end of the day, my job as governor of Montana is to make sure that this Yellowstone River, the largest undammed river in the United States, one of the great trout-fishing rivers of the entire world, one of the dozens of blue-ribbon trout streams that we have in Montana, will be restored, so that those farmers and ranchers can once again irrigate their proud crops, spring wheat and alfalfa sugar beets, so that people that enjoy the fisheries on the Yellowstone River will be proud to catch those trout and take them home.

That's my job. Now, Candy, if this was a rocket disaster in Montana, I'm not a rocket scientist. But unlike every governor in America, I am a soil scientist. And I am going to hold Exxon's feet to the fire until we get the Yellowstone restored.

CROWLEY: Governor Schweitzer, I am sure we will check in with you in the days to come. Thanks so much for joining us.

ExxonMobil released this statement to CNN regarding the oil spill in Montana: "ExxonMobil sincerely apologizes for the spill in the Yellowstone River and is committed to cleaning it up as soon as possible. We are working with the unified command led by the EPA and including the state of Montana to clean up the river. We are working hard to address concerns and issues by residents and landowners as quickly as possible.

A check of some of the other day's top stories is next.

And then tax the rich says one of the richest men in the world, Warren Buffett, but is that the answer to America's growing fiscal crisis? We will debate that. Plus, a new twist in the Casey Anthony saga -- her freedom is now farther away than originally thought.


CROWLEY: Let's take a closer look now at that grim job picture.

Only 18,000 jobs were created nationwide last month. That raises the unemployment rate to 9.2 percent. And it raises the number of people unemployed in this country to 14.1 million.

Here's how President Obama reacted.


OBAMA: We've always known that we'd have ups and downs on our way back from this recession. And over the past few months the economy's experienced some tough head winds, from natural disasters, to spikes in gas prices, to state and local budget cuts that have cost tens of thousands of cops and firefighters and teachers their jobs.

The problems in Greece and in Europe, along with uncertainty over whether the debt limit here in the United States will be raised, have also made businesses hesitant to invest more aggressively.

The economic challenges that we face weren't created overnight, and they're not going to be solved overnight. But the American people expect us to act on every single good idea that's out there.


CROWLEY: Joining me now, Heather Boushey, senior economist at the liberal-leaning Center for American Progress, and Stephen Moore, senior economics writer for "The Wall Street Journal."

Stephen, I want to start with you.

The president does point out there a lot of reasons for these numbers. And I want to show you a recent poll asking Americans who is most to blame for the condition of the economy. It shows the Bush administration top at 26 percent, Wall Street 25 percent, Congress 11 well percent, Obama administration 8 percent.

Does that size up with where you think the blame falls now?

STEPHEN MOORE, SENIOR ECONOMIC WRITER, "THE WALL STREET JOURNAL": Well, look, there is no question that Barack Obama inherited this economic crisis and George Bush deserves some of the blame, if not all the blame, for getting us in a crisis in the first place.

But I think the problem for President Obama is all the things that he had done to get us out of this crisis -- and it's been two- and-a-half years now -- have failed. And I would make the case that the economic stimulus plan, the $800 billion gamble that we took, was pretty -- I think we can all agree now, was a pretty expensive failure. CROWLEY: And, Heather, that is sort of the Republican political line of attack as well, which is, well, maybe he didn't create it, but he sure hasn't fixed it.

HEATHER BOUSHEY, SENIOR ECONOMIST, CENTER FOR AMERICAN PROGRESS: Well, the truth could -- the truth is very, very different.

What we saw was that, after the Recovery Act was set in motion, we saw the number of jobs being created each month start to -- the bad news started to get better. And we have seen the economy create over two million jobs since then.

The past -- this month and last month, they're certainly not good. But certainly the Recovery Act got us out of the hole and got us sort of moving on the right track.

CROWLEY: It just doesn't seem like 9.2 percent, most Americans will look at as out of the hole, also looking at the housing market and other things. But let me ask you...

MOORE: And, by the way, don't forget it was the president himself and his advisers who said, if we pass this plan, we will have less than 8 percent unemployment. So, we are 2.5 million jobs away from that target.


Let me move you to some of the solutions that are out there. One of them, Stephen, Warren Buffett said, we need the rich to pay more in taxes. Here's what he said.


WARREN BUFFETT, CHAIRMAN & CEO, BERKSHIRE HATHAWAY: Well, we had a period in the last 15 years where the 400 top taxpayers in the United States, if you go back 15 years, they had an average income of about $45 million. Now they have an average income of $350 million in the most recent figures, whereas their tax rates went from 27 percent down to 16 percent.

That's not my idea of -- of America. I mean, I want everybody to get rich, but I think that the rich have a responsibility to pay higher tax rates.


CROWLEY: This is not an uncommon thought, by not just very rich people but the middle class going, "Why shouldn't the rich pay more?"

MOORE: Well, Warren Buffett is certainly free and clear of paying more taxes if he wants to. I don't think he's ever paid a penny more taxes than he's legally required to, and he actually took the Bush tax cut that he said he didn't want.

Look, I think we should be cutting tax rates. When you said how do we get out of this crisis, I think we should do what Reagan did, is bring rates down. Remember, in the '80s, at this stage of the economic expansion, we had about 300,000 jobs a month, not 15,000. So let's do what we know has worked, which is cut tax rates for everyone to inspire businesses to hire more workers

CROWLEY: On the other hand, we're now hearing a lot of Democrats in Washington saying, "Holy cow, what we need is more stimulus. We need some money here to create some jobs." Is -- since the first stimulus, as you heard, didn't work out to the extent that it brought unemployment down to 8 percent. Is it a good idea?

BOUSHEY: Well, two things. First of all, we know that tax cuts don't work, the kind they were talking about, especially for the wealthy. You know, periods where we've seen lower tax -- lower tax brackets on the -- on the wealthy have not been periods that have been associated with stronger economic growth.

The 2000s, after we did those tax cuts, were the weakest era in the post-World War II period in terms of employment growth and -- and growth overall. So I think we know. We've seen the evidence that that doesn't work. And that's what's part of what's bankrupting our fiscal house right now.

CROWLEY: The stimulus hasn't been a wild success.

BOUSHEY: The stimulus pulled us out of the very deep hole we were in. We were losing jobs at the pace of 20 thousand every day in January of 2009. And yes, Stephen's right that those economic estimates that he was talking about from the Obama administration were actually done a couple months before, before things had gotten quite so bad. They didn't estimate things would get so bad, and so they didn't estimate that the recovery act would need to go so far.

We were in a situation, we continue to be in a situation where we don't have enough aggregate to manage our economy. The National Federation of Independent Businesses just this June and for the past few years keep saying when they polled their members, small businesses all across the country, their biggest problem is sales. And they say month after month, the reason we're not hiring is because of sales. That's a demand problem, and that's exactly the kind of problem that those recovery dollars we're fixing.

MOORE: We've had seven post-World War II recessions. This has been not a little bit by far the weakest recovery we've ever had. We should be -- you normally in this stage of economy, the economy is booming. The recovery...

CROWLEY: Well, do you accept that it's pulled us back from the cliff? Do you believe that? That the stimulus is things -- we just -- like Armageddon.

MOORE: I think the stimulus plan made it worse. Because we -- all we've got now, Candy, is another trillion dollars in debt. So, you know, now you've got the stimulus all spent, and we still have 9 percent unemployment. But we can't borrow more money. My goodness. They're talking about trying to reduce the borrowing. So we're in a bit of a fix right now. And we've sort of blown all of our money, and we still have a big economic problem.

CROWLEY: I've got to thank you both right here. We never have enough time to discuss (ph) the economy. It's so complicated. Thank you both for coming.

MOORE: Thank you, Candy.

CROWLEY: A fallout from a tabloid hacking scandal makes its way to the British -- makes its way to the prime minister's office. Details of the arrest stirring up new controversy.

And the last launch for NASA's shuttle program. You'll see the blast off of that sentimental journey as it happened.

Plus, thousands of protesters returned to Cairo's Tahrir Square, epicenter of the revolt that ousted Egypt's leader. Why are they so angry now?


CROWLEY: Shock waves keep spreading in Britain's phone hacking scandal, rocking a media empire and the highest levels of government. As a newspaper prepares to close, a former aid to the prime minister was arrested today. CNN's Dan Rivers has the latest from London.


DAN RIVERS, CNN CORRESPONDENT: Candy, it's difficult to imagine this story getting much bigger. We're now getting word of the French car manufacturer Renault pulling out of any advertising with News International newspapers, the parent group, not just "The News of the World," which is based in the building behind me, a newspaper which is now closing down.

(voice-over) It was an ignominious way to end 168 years of journalistic history. Protesters venting their anger at the antics of the British tabloid, "The News of the World," as staff prepared the paper's final edition.

It started with royal reporter Clyde Goodman, who was jailed in 2007 for hacking into Prince William's phone. Now it's believed the paper (AUDIO GAP) the building behind me here have been widely condemned by all political parties.

But the focus of the story has now shifted onto the prime minister, David Cameron, and his decision to hire a former editor of "The News of the World," Andy Coulson, as his communications guru. A decision that has come back to haunt him with a vengeance.

DAVID CAMERON, PRIME MINISTER: I'm not hiding from the decision I made. I made the decision there had been a police investigation. Someone had been sent to prison. This editor had resigned. He said he didn't know what was happening on his watch, but he resigned when he found out. And I thought it was right to give that individual a second chance RIVERS: Almost at the same time the prime minister was speaking, Andy Coulson himself was in a police station answering questions about whether he sanctioned illegal phone hacking during his tenure at the paper. The scandal that forced him to stand down, first, as a journalist and then as a government press adviser, even though he's denied knowing anything about hacking.

Britain's opposition says repairing the damage of Coulson's appointment means the government has a lot to do, like...

ED MILIBRAND, LABOUR PARTY LEADER: Apologizing for bringing him into the center of the government machine and coming clean about what conversations he had with Andy Coulson before and after he was appointed about phone hacking.

RIVERS: But it's not just the P.M.'s relationship with Coulson. It's his alliance with Coulson's former boss, Rebekah Brooks. Both are close to Cameron. But Rebekah Brooks hasn't been arrested yet, maintaining she knew nothing about phone hacking.

David Cameron has said her offer to resign on Thursday should have been accepted, but she's still in post. That's because her boss, Rupert Murdoch, remains loyal it her. A week ago it would have been unthinkable that a British prime minister would suggest one of Murdoch's favorite lieutenants should stand down. Such was his influence in power.

But as the saying goes, a week is a long time in politics. And these past seven days have seen some tectonic shifts in press power, with many wondering if Murdoch's influence over British politics is now on the wane.

(on camera) Well, Rebekah Brooks has been briefing staff here at News International headquarters all afternoon. She is refusing to step down despite some fairly heavy hints from the British prime minister -- Candy.


CROWLEY: And as for Andy Coulson, the British prime minister's former communications aide, who was arrested, he was released today, as well, without charge.

Thousands of protesters return to Cairo's Tahrir Square, epicenter of the revolt that ousted Egypt's leader. We'll go back to Egypt live, next.

And the Duke and Duchess of Cambridge are scheduled to arrive any minute now in Los Angeles. We will take you there live.


CROWLEY: Tens of thousands of Egyptians today returned to Tahrir Square, the epicenter of the reform movement which forced President Hosni Mubarak from power. This time the protestors are turning their anger on the new government. We want to go live to CNN's Fred Pleitgen in Cairo.

Why are the protesters out there?

FREDERIK PLEITGEN, CNN CORRESPONDENT: Well, because they're very angry because they feel, Candy, that the reforms and the revolution here in this country aren't going fast enough. They say that about five months after Hosni Mubarak ceded power here in this country that they haven't seen any real change just yet. They say police brutality still continues. There is still a high-level of corruption and the economy is going nowhere. There's way too few jobs for the many people here in this country.

And so a lot of people came here to express their anger. And I want you to listen in to some of the people we met on Tahrir Square and told us about why they came here today.


UNIDENTIFIED MALE: Nothing has changed. Nothing.

UNIDENTIFIED FEMALE: We were saying there was good intentions, but they are slowing like this. The slowing itself means they're not going to do anything or they're just -- we are wasting time.

UNIDENTIFIED MALE: Our army must protect our revolution; it's protecting themselves. All the guys, Hosni Mubarak and all the ministries.


PLEITGEN: So those are the kind of comments that you'll hear here, Candy. We're wasting time. Things aren't going fast enough.

Of course, as you said, right now the country is basically being run by a military council. And a lot of the members of that military council were and are very close to Hosni Mubarak and his regime. And so many people here feel that they are dragging their feet, bringing people like Mubarak to trial, they think, as the cuts, the revolution, the change here needs to be much deeper than it is. Quite frankly, a lot of them say they haven't yet seen the benefits of what they fought for five months ago -- Candy.

CROWLEY: Fred, you were in Tahrir Square the night Mubarak's government fell. Can you give me a comparison, those protests versus these protests?

PLEITGEN: Yes. It's a night and day difference, really. It's so different. One of the things that we have to keep in mind is, of course, back then it was absolutely unheard of for people here in this repressed country to come out, express their feelings. And that's really the kind of sentiment that you got back then. People were almost drunken with the fact that they could come out and protest, that they were making a difference.

A lot of people, of course, had very high expectations that things would change very, very quickly. And if they just keep going out on the streets, that everything would go in their favor.

Right now what you have is a much more sober, a much more disillusioned mood among the people after they've seen that change comes very slowly, that the economy isn't going back on track, that things just aren't working out as fast and as well as many of them had thought.

So in a lot of ways, people are quite disappointed in the way things are going. But one of the things I will say is that I talked to many people on Tahrir Square today, and a lot of them are very, very angry. But not a single one said that they thought that the revolution was wrong. All of them said that they believed that Hosni Mubarak had to be driven out of power, that they were doing the right thing but that now this revolution is in danger of going in the wrong direction, Candy.

CROWLEY: CNN's Fred Pleitgen in Cairo tonight for us. Thank you.

The last launch for NASA's shuttle program. You will see that blast off to "Sentimental Journey" as it happened.

And the end of an era. NASA's final space shuttle launch. We will have an expended -- extended look at history in the making.


CROWLEY: NASA calls it a sentimental journey into history. Here's an extended look at America's final space shuttle launch.


UNIDENTIFIED MALE: Firing chain is armed.


UNIDENTIFIED MALE: Go for main engine start. T-minus 10, 9, 8, 7, 6, 5. All three engines up and burning. 2, 1, 0. And liftoff, the final liftoff of Atlantis. On the shoulders of the space shuttle, America will continue the dream.

UNIDENTIFIED MALE: The program, Houston.

UNIDENTIFIED MALE: Roger, roll, Atlantis.

UNIDENTIFIED MALE: Houston now controlling the flight of Atlantis. Space shuttle spreads its wings one final time for the start of a sentimental journey into history.

Twenty-four seconds into the flight, roll program complete. Atlantis now heads down, wings level on the proper alignment for its 8.5-minute ride to orbit, 4.5 million pounds of hardware and humans taking aim on the International Space Station.

Forty seconds into the flight, the three liquid fuel main engines throttling back to 72 percent of radial performance in the bucket, reducing stress on the shuttle as it goes transonic for the final time. Engines now revving up, standing by for the throttle-up call.

Atlantis, go at throttle up. No oxygen (ph), DP, DT.

UNIDENTIFIED MALE: Go with throttle up. No oxygen (ph), DP, DT.

UNIDENTIFIED MALE: The call from Cap Com Barry Willmore, transducer, instrumentation only, no action required.


CROWLEY: So cool.

Mary Snow is monitoring other top stories in THE SITUATION ROOM. Now, Mary, what do you have?

MARY SNOW, CNN CORRESPONDENT: Candy, at least 40 people have survived a plane crash in the central African nation of Congo, according to a government official, but the number of dead still isn't known. An aviation official says the plane likely went down due to bad weather as it was landing in a provincial capital in the northeastern part of the country on a flight from the national capital, Kinshasa.

Here in the U.S., Casey Anthony will be spending a few more days in custody than expected. Officials say they recalculated her release date and moved it from next Wednesday to a week from Sunday, but they aren't saying how they came up with the new date. Anthony was acquitted of murdering her daughter but convicted of lying to investigators. She was sentenced to four years with credit for time served.

And there is fresh fallout from the scandal that cost Ohio State football coach Jim Tressel his job. The school now says it's vacating all ten of its victories from the 2010 season and putting itself on two years' probation. The scandal centered on players getting special benefits from local businesses in exchange for memorabilia. Tressel was forced to resign after lying about it to NCAA investigators -- Candy.

CROWLEY: Thanks, Mary.

We are awaiting a VIP arrival in Los Angeles, Prince William and his bride, Catherine, on her first visit to this country. We're going to take you there live.


CROWLEY: Los Angeles is used to celebrities, but royalty is a different matter, especially the royal couple of the moment, Britain's Duke and Duchess of Cambridge, Prince William and his wife, Catherine. They have now arrived, touching down in Los Angeles.

CNN's Max Foster and Casey Wian are there for us. Casey, you're at LAX. How much tight is security there? Just set the scene for us. CASEY WIAN, CNN CORRESPONDENT: Absolutely very, very tight. We got here about three hours ago, had to go through several different security sweeps. Our camera, our satellite truck, just to make sure that nothing goes wrong here. The local officials are being very, very tight on security.

You can probably see, perhaps over my left shoulder here, the actual plane. That's a Canadian Air Force Airbus 310 that just touched down a couple of minutes ago, containing the Duke and Duchess of Cambridge on their first official visit to the United States.

Of course, they've got a very, very busy schedule over the next 48 hours or so. When they actually get off that plane in a couple of minutes, they'll be met by California Governor Jerry Brown, Los Angeles Mayor Antonio Villaraigosa, and they'll begin their trip to Southern California that includes a British film industry event tomorrow night that's going to be attended by many Hollywood celebrities, also a polo match that the prince himself will be playing in tomorrow to raise money for charity -- Candy.

CROWLEY: And CNN's Max Foster is also with us. Max, tell us where you are and also, I know you have been following the couple in their trip through Canada, so give us kind of a comparison to what you saw in Canada and what you're seeing right now.

MAX FOSTER, CNN CORRESPONDENT: Well, here in California there are crowds, but they're not nearly on the same level as they were in Canada. What you've got to think here is that this is the Canadian royal family whilst they're on Canadian turf, as it were. And what you've got here is a Canadian military jet coming into LAX and still under the control, if you like, of the Canadian government right now.

What you're going to have is Canadian officials handing the couple over to the British ambassador to the United States. Once they arrive here, they will be under U.K. government control, as it were.

So what they've got is a series of events in Los Angeles, promoting U.K. interests. So I'm here at the Beverly Hilton. They're going to come here. This is going to be their first stop. They're going to go into a conference here. And their job here is, on behalf of the British government, to promote U.K. new media businesses. And this is what you're going to see throughout the weekend.

So the big red carpet event, for example, on Saturday night is all about promoting young, British talent. You're going to see lots of stars. So it's going to be an interesting event, but it's all about promoting U.K. interests, Candy.

CROWLEY: And Max, is there -- is there time built in for them to have any fun? I mean, I get that they're ambassadors for Britain and want to promote British interests, but this is her first visit to the U.S.

FOSTER: It is, and I met her the other night and she's handling it very well, but she's got lots of questions. She wants to know if it's going well, the whole event, and it is certainly is. They did have some down time in Canada. They had a chance to stay at a lodge, and they relaxed a bit, but they were under a very, very tight schedule. And they are here. It's only three days and they're ramming in several events a day. So it's hard work and it's quite -- when you see up close, it doesn't necessarily look like hard work. When you see up close, all the plans that go into it, there is a very intricate plan.

And the first thing you expect, I have to tell you, Candy, as they get off, is an e-mail from the palace telling me what she's wearing, because everyone is obsessed with what she's wearing. So all eyes on the dress. I'll tell you the designer as long as I get the e- mail.

CROWLEY: Thank you very much. I'll be looking forward to that.

And Casey, just wrapping up with you in our final 30 seconds or so. Tell me what you're seeing at the airport. You say the governor is there. Who else is on hand. And by the way, that's a pretty big plane for two people. I assume there is a large entourage.

WIAN: It absolutely is a very big plane. I don't know how big the entourage is going to be. We're expecting the British ambassador to be here, the consul general in Los Angeles, who is where -- his house is where the royal couple will be staying. And we're expecting them to depart this plane any moment now for what's expected to be a very, very busy weekend in Southern California -- Candy.

CROWLEY: Casey Wian and Max Foster on the story for us. Thanks so much.

I'm Candy Crowley in "THE SITUATION ROOM." For our international viewers, "World Report" is next. In North American, "John King USA" starts right now.