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Mubarak on Trial; Syria's Bloody Crackdown; Stocks Snap Losing Streak

Aired August 3, 2011 - 19:00   ET


JOHN KING, HOST: Thanks Wolf and good evening everyone.

Tonight Wall Street breaks a losing streak, barely. With the jobs market and financial markets in such a struggle new warnings tonight the economy could fall back into recession.

And as the president prepares to celebrate his 50th birthday with a giant re-election campaign fund-raiser, a would-be rival hits home and previews the 2012 showdown over jobs and the economy.



OBAMA: Yes, we can. Thank you. If I don't have this done in three years, then there's going to be a one-term proposition.


KING: Another possible Republican challenger is riled up, too, because of Tea Party criticism during the debt ceiling debate.


SARAH PALIN (R), FOX NEWS CONTRIBUTOR: Yes, right. Independent patriotic Americans who desire fiscal sanity in our beloved nation being called terrorists, heck, John, if we were real domestic terrorists --


KING: We begin overseas tonight with two dramas unimaginable just months ago in Syria, a vicious regime crackdown designed to crush an anti-government protest movement that is standing firm despite the deadly risks.

And in Cairo, a historic event that brought a collective gasp across the Arab world, Hosni Mubarak on trial, wheeled into the defendant's cage in a hospital bed, dismissing with the wave of his hand allegations of corruption and complicity in the killings of anti- government protesters.


UNIDENTIFIED MALE (through translator): What do you say?

HOSNI MUBARAK, FORMER EGYPTIAN PRESIDENT (through translator): I deny all these --


KING: The 83-year-old Mubarak was forced from office six months ago, but even the most ardent of the Tahrir Square demonstrators back then thought they would never see this. In that cage, the defendant's cage, the former president, his two sons, the notorious former interior minister, and six other senior police and security officials who helped Mubarak stifle dissent during his three decades in power. It is hard to overstate the power of this moment. That man in the cage is this man, the once-trusted ally of the past six U.S. presidents.

And in the Arab world, that one of the dictators would come to trial is a breathtaking turn. The proceedings watched by millions in Egypt and millions more on the Arab satellite networks that have been so central to the wave of political upheaval across the Middle East and North Africa. CNN's Frederik Pleitgen was in Tahrir Square in the midst of it all months ago and was in the courtroom today as the revolution took its latest turn.

Fred, take us into that scene. Hosni Mubarak on trial; Hosni Mubarak dismissing the charges against him. What was it like in there?

FREDERIK PLEITGEN, CNN CORRESPONDENT: Well, it was pretty much utter disbelief on the part of anybody who was in that courtroom, John. I could see even the lawyers for the prosecution could not believe what they saw there in front of them. First of all, the former president inside that metal cage, and you said it. They never thought that they were ever going to see anything like this.

One of the most important power brokers here in the Middle East for so many years, someone who was also so important speaking with American presidents as you said as well, many -- to many people here in Egypt, this man was always larger than life, and now he was on that hospital bed. He had to remain on the bed the entire time that the proceedings went on. This was about five hours.

He always had people attend to him. His voice was very weak. So, I spoke to some of the lawyers of the prosecution, John, these are people who were asking for the death sentence against Hosni Mubarak for ordering the killings of protesters during the revolution that started here on January 25th, and they said in their wildest dreams they could not have imagined what they witnessed in that courtroom today -- John.

KING: And give us a sense, Fred, for our U.S. audience here that is familiar with how courts might work here in the United States, how similar, how different are these proceedings against the former president and his team?

PLEITGEN: Well, I mean, they are a lot more disorganized to put it that way. But this is really also a very unique case within the Egyptian justice system, because one of the things that they say is that this is really a pivotal moment for this country altogether. Basically what you normally have in an Egyptian court is you'll have a lot of backroom dealings. In some cases you'll even have verdicts announced on state TV before they've actually been announced in court, so there's a lot of wheeling and dealing that goes on. For the first time what they're trying to do here --

KING: Going to go to the wall first, tell me if the server (INAUDIBLE) while I'm at the wall --

PLEITGEN: -- everything according to the -- according to the book, and so, therefore, and they say this is such a pivotal case for their nation, because this is where they decide whether or not they are going to be a true democracy or whether they're going to stick to the ways that have been so common under Hosni Mubarak's regime -- John.

KING: And, Fred, outside of the courtroom across Egypt, you mentioned how pivotal this is, it is a look back at the regime, a look back at the charges of corruption, charges of complicity in the killings. Are there any who worry that it will hurt the effort to look forward, to get to a new government, to get to a fresh day politically?

PLEITGEN: Well, I mean, a lot of it is going to depend on the outcome of this case and how much of a cleansing effect it's actually going to have. I mean, one of the things that we saw today in front of that courtroom which is heavily fortified is that there were massive clashes between pro and anti-Mubarak protesters, so there is still a large rift between those two camps. A lot of people, of course still looking back on that dictatorship and saying, listen, things were very stable back then. Tourism was going very well. The economy was going fairly well. Egypt was one of the most dynamic countries in this entire region, but there are other people who say you know we need this reform right now.

We need deep, fundamental reform. We need people like Hosni Mubarak to be put on trial very quickly and we need economic reform, social reforms and those aren't happening fast enough for these people, so this is really a society that's still very much in turmoil at this point in time and right now it's still sort of up in the air where they are going to go. Is this going to be something where there's some mild reforms or is this really going to be fundamental change and this trial is very, very important in all of that, because it's really going to define how the justice system and how the society is going to move forward from here on, John, so this is something that is very important and something that a lot of Egyptians are really watching round-the-clock whenever it's on -- John.

KING: Fred Pleitgen for us on the ground in Cairo, dramatic, dramatic moment there. I want to go to the "Magic Wall" to just show you a little bit, to take you back in time to show you -- remember the fall of Mubarak was one of the critical moments in what we now call the Arab Spring. But remember it started here in Tunisia. The government of Tunisia falling, Ben-Ali falling, the former president -- this is an important point to note. He was 74 years old, the average age of his population just below 30. That is something you see across the region.

Then of course it happened in Egypt, Hosni Mubarak, the former president now, age 84, the average age of his population, 24. Again, you see the huge generational divide; a lot of those protesters across the region are younger people who feel disconnected from their leadership. Still ongoing for us of course is the battle in Libya where you have Moammar Gadhafi -- he's 69 years old -- the average age of his population, 24 years old. Gadhafi fighting to cling to power as this plays out.

In Syria -- and we'll get more of the Syria story in just a moment -- a younger president here, 45, but his family has been in power for 48 years, the average age of the population, 21. Again younger people part of a lot of the demonstrations. Watching in the region as this plays out obviously the president of Yemen has left Yemen to go to Saudi Arabia for health issues, President Saleh, 69. Look at that -- the average population in Yemen, less than 18 years old in that country.

And watching all this as it plays out a country where we have not seen any demonstrations as yet, closed society, but look here, the age of the King Abdullah of Saudi Arabia, 88 years old, his family in power the past 79 years, the average age of the population, 25 years old.

Our national security contributor Fran Townsend is standing by with us tonight. Fran, as you look at this throughout the region, first to the history being made in Egypt. Many of the demonstrators never thought they would get Mubarak to step down and they never thought in their wildest dreams a military government run by his former generals would put him on trial. What does this day mean?

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Oh, you can under the sort of mixed emotion that we're seeing in Cairo today, but it's really important, John, a couple of things. One, this has really got to be done in a transparent way where Mubarak despite the crimes he's accused of committing, and they're heinous, but he's treated according to the rule of law, that it is a predictable and transparent, fair process.

He's going to -- he ought to be getting a fair judicial process that many Egyptians were denied over the decades, but that's very important. And then it's got to be done expeditiously, you know, as the report pointed out, Egyptians want to move on. They need to see economic reform. They need to see tourism come back. They need to see stability. They need to have a sense of confidence. They'll get some of that from a fair and transparent trial of Mubarak, but then they need to see legal reforms that benefit the people of Egypt.

KING: Benefit the people of Egypt. And, Fran, what of the sense of the pause -- I don't know what the right word is here -- but Hosni Mubarak going back to President Carter, through President Reagan, both President Bushes, President Clinton and in the early days of President Obama, he was the go-to guy for the United States. Like him or not, there was criticism about corruption. There was criticism about punishing anybody who spoke out against the regime -- that was a constant. But he was the guy, honest broker with Israel, someone we used as a contact and intermediary with other Arab governments. But what is the state of play now? Is there essentially a pause button in the Arab world or has the United States found someone else to fill that role?

TOWNSEND: No, look and I don't think they will. I don't think anyone has filled the sort of hole left by Mubarak's loss in terms of the advice the United States would get on foreign policy vis-a-vis, the Middle East, but look this is a new day and there will be a new paradigm. Frankly what the United States is struggling to get past is some of our allies like in Saudi Arabia, in Bahrain, in Kuwait, are concerned about -- they haven't had the same sort of Arab Spring -- are concerned about what are the loyalties of the United States if they were to have these sort of opposition movements, what would the United States' position be, and so I think as a result of that, you've seen the Arab world go very quiet on places like Libya, Syria. We're not getting the support that I think the United States had hoped it would see in others of these foreign policy challenges we face.

KING: And I talked a bit about this with Fred Pleitgen, you've touched on this. Is there a danger in the emotions at a time when there's such a delicate transition, when you're trying to form political parties, when you're trying to negotiate with a military government that says it doesn't want to be part of the next government but does want to protect its fiefdoms. Is there a danger in getting emotionally caught up in bringing that man right there, bringing Mubarak to justice and looking backwards whether it's for justice, whether it's for vengeance, pick another word, is there a danger in looking back when there's so much to be done looking forward?

TOWNSEND: I think there is. And I think the danger is to the future, right? Because while there may be some sense of relief at sort of having Mubarak pay a price, humiliating him really isn't part of the path to moving forward. He's committed crimes. You know, most of these trials of dictators focus on genocide of their own people. Charles Taylor, Milosevic, Saddam Hussein all were tried for the genocide of their own people.

This corruption trial, and there are allegations about the abuse of protesters, has to be gotten through, gotten through quickly, but it needs to -- the Egyptian people, frankly for their own sake and the sake of the country, need to look forward. And they have a very proud history, and so humiliating Mubarak won't really serve much in terms of their future.

KING: Fran Townsend -- Fran is going to stay with us. We'll talk again a bit later.

Still ahead here the Dow breaks its losing streak, but barely, and some say it's more proof the recovery could stall into another recession.

Also the Syrian regime dramatically escalates its brutal crackdown on anti-government protesters and the United Nations Security Council finally speaks up. That's next.


KING: Tonight the United Nations Security Council is belatedly in the view of many condemning the vicious government crackdown against peaceful protesters in Syria. There are no sanctions attached to the condemnation and no call or demand for an investigation. No, just words condemning the violence, just words despite the deaths of some 2,000 protesters in recent months, just words despite the outside regime's green light to send tanks and other armored vehicles today into the city of Hama after several days of artillery shelling, just words despite this.





KING: And this --





CNN's Arwa Damon is tracking the developments for us tonight. Arwa, this is a decisive escalation by the regime, why Hama and why now?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Yes, John, it most certainly is, and activists will tell you that this is the regime's way of delivering a final and decisive blow to Hama. Hama, if you will remember, has been the scene of some of the largest, if not the largest, demonstrations to take place in Syria. People there, some of them going so far as to say they have liberated Hama from the regime.

Many say that with the anticipated, even larger demonstrations scheduled to take place during the holy month of Ramadan, the regime decided that it was time to bring this about to an end, when it comes to this regime that means a military end. If you remember, this crackdown began on Sunday. There were short military incursions into Hama, not all the way into the center of the city, though.

This morning -- 6:00 in the morning residents who we spoke to say that the tanks went barreling through, firing indiscriminately, gunshots, snipers positioned on rooftops. That main square where we had been seeing all those demonstrations happening now is a tank position. Food shortages, water shortages, medical shortages, John, the situation is so dire that there is no accurate death toll. People still don't know how many casualties were caused by all of this. KING: And so it begs the question, sadly, we have seen these anti-government protesters defiantly, resolutely, and bravely in Hama and in other cities even after bloody crackdowns, even after many of their colleagues and comrades have been killed stand firm. What is the sense of the strength in the wake of this?

DAMON: Well, John, this most certainly, if, in fact, the opposition is not able to regroup in Hama itself, a fairly devastating blow. What we heard from one activist that the military also plans a similar crackdown in (INAUDIBLE). That is in the eastern part of the country, also a place that has seen these large-scale demonstrations. If, in fact, the Syrian government is able to brutally and militarily bring these two areas under its control in the sense that the demonstrators would no longer be able to take to the streets, it most certainly would make it incredibly challenging for the opposition to keep up the kind of momentum, the kind of pressure that it hopes to put on the regime to force it to its knees.

At this point we're hearing an even greater call from the opposition, for the international community to intervene. Yes, we have this statement from the United Nations, it's a presidential statement. It condemns the human rights violations. It calls for an end to the violence, but this really is not what the opposition is looking for. They want strong statements. They want sanctions especially economic sanctions, or else many of them are saying the blood that is spilled is also the international community's responsibility.

KING: And I would -- is it fair to extend from that -- we've talked about this in the past -- the regime doesn't seem to, forgive my language, give a damn what the international community says. Is there any indication that just a presidential statement from the Security Council is going to convince the outside government we better pull back?

DAMON: John, I would be stunned if this presidential statement had any sort of similar impact on the Assad regime. This is a regime that has not given a shred of importance to the U.S., for example, saying that the president has lost his legitimacy. It has not given any importance at least publicly to the fact that the U.S. added additional sanctions. The European Union added additional sanctions.

A growing number of leaders are saying that this violence has to come to an end. This is not a regime that appears in any way, shape, or form as if it's going to be one that is going to bow down to this kind of pressure. And part of that is because the government realizes that all things considered, it's still in a fairly powerful position. They have been some defections from the military, but by and large, most units have remained loyal to the president. It still has the support of countries like Russia and China, even though they did not try to block this presidential statement, and perhaps most importantly it has a very powerful original ally in Iran and we also have not heard anything from any Arab leaders condemning the Assad regime's actions.

KING: Arwa Damon for us, it's a very troubling story, reporting from Beirut tonight, Arwa, thank you. Today's crackdown is an escalation, but hardly the first time the Assad regime has used violence against its own people. Think back -- remember March 18th -- police opened fire then on peaceful demonstrators in the city of Zahra (ph). In late May this horrific video emerged of a 13-year-old boy reportedly tortured and mutilated by the Assad regime to send a message to pro-democracy forces.

Then in early June Syrians by the thousands began fleeing the crackdown for refuge in Turkey and on July 4th Syrian tanks and bulldozers prepared to roll into Hama. Today as the crackdown escalated yet again, human rights groups put the number of those killed at more than 2,000. So why won't the international community do more? Our national security contributor Fran Townsend is back with us tonight. Fran, a presidential statement from the Security Council saying we condemn the violence. We condemn the human rights abuses. No sanctions, no call for investigation. Forgive me, but is that the best the international community can do despite months of evidence of a brutal crackdown?

TOWNSEND: Look, this -- it's shameful and embarrassing that that's as much as the international community has been willing to do. I mean, look, the sanctions are important. And the United States and the European Union as Arwa reported have increased the sanctions, and that's all to the good, but sanctions alone are obviously not going to topple this regime. I mean frankly when you look at the atrocities starting with the 13-year-old boy that you mentioned and through this raid on Hama and these cities in Syria and the protesters, you have to ask yourself, where is the international criminal court.

They didn't indict Gadhafi in Libya for similar types of activities and that's the sort of thing. You've got -- Assad has to see that he is going to start paying a real price, not just as a leader, but as a personal matter. And when you begin that, when you -- when Syria and Assad see that, those around him will see that they, too, will have to pay a price, the military leaders, the leaders of the intelligence services who will support these activities that target the protesters. There's got to be more than words.

Of course, there can be humanitarian aid into Hama, but one of the most important things Arwa mentioned is the silence of the Arab community. That's what really needs to happen here. You need to generate some support, and I'm told by sources in the U.S. government that secretary of state and others are trying to build that sort of support. But, frankly, John, it's too -- too little and it's too late right now for those protesters particularly in Hama.

KING: And do you have any reason to believe that these Arab regimes that are worried about their own stability, worried about scenes like this, peaceful demonstrators, anti-government demonstrators in their own country, whether it be Bahrain, where we've seen it before, Saudi Arabia where we've been watching to see if it could trickle up. Jordan has had some relatively modest protests so far handled reasonably well by the government, but is that the reason they're not willing to get involved in Syria because they're looking in the neighborhood? TOWNSEND: I think that's exactly right, John. And when you add to that, look, there has been a certain amount of strain particularly in the U.S./Saudi relationship, because, of course, the King of Saudi Arabia and the Saudi government did not think that the U.S. government should have supported the ouster of Mubarak. And so there is some tensions that go to what -- how the U.S. handled Egypt, how the U.S. has handled Bahrain. There's a good level of mistrust between the remaining Arab leaders and the U.S. administration, and I think they're unlikely both for their own reasons and the bilateral relationship also to make statements of support for U.S. policy that Assad no longer has the legitimacy to lead.

KING: It's sad to see world bodies, just words, when you watch these pictures and hear the stories. Fran Townsend, appreciate your help tonight.

Ahead tonight here, a former top White House economic adviser says the economy could slip into another recession. What should you be doing to protect your family?

And next the Justice Department says it disrupted a heinous global child pornography network.


KING: After an ugly game in sports the team on top will probably say a win is a win. You can apply that old adage to Wall Street today. Down most of the session, stocks rose at the end and the Dow eked out a 29-point gain, weak, but enough to avoid a ninth consecutive down day. Global economic worries are one drag on the markets, and after several days of weak U.S. economic data, a big topic today was a warning the economy might slip back into recession.

Our chief business correspondent Ali Velshi here to take us behind the numbers. So, Ali, the Dow snaps a losing streak today, but I wouldn't pop the champagne. Just up barely and Friday we're expecting a pretty grim unemployment report, right?

ALI VELSHI, CNN'S YOUR MONEY: Yes, going into Friday I'm glad we lost the downward momentum in the market because it's quite likely we'll have downward momentum again starting Friday morning. Even if things are as expected, it will be a lousy jobs report, and if things are any worse than expected which is now becoming the expectation, we'll really pay the price for it. It's been a very, very rough month on the markets.

KING: Let me get that straight. If it's worse than expected, which is becoming the expectation --


KING: -- that's a pretty sad state of play. I mean what's driving this? In Washington we get consumed by debates like raise the debt ceiling, cut the deficit a little bit. That's part of it, but it's only a small part, right? VELSHI: And it starts to become believable when people say it. When people keep on saying well uncertainty is preventing hiring. Here's the real truth of the matter. The main thing that drives hiring or prevents it is demand or lack of demand. We are still not seeing that pick-up in demand and what's been driving the market down this week and last week wasn't just the debt debate.

It was on Friday we got this sort of tepid GDP outlook and then on Monday we got a bad manufacturing report and on Tuesday we got -- this is the most important to me -- a report that showed that consumer demand has pulled back just a little bit. It's all of these things that are coming together that are causing businesses to say why would I expand right now when I'm not sure that the American consumer is on solid footing? It's mostly demand, John.

KING: And in that, when you look -- you look more closely at all this data, all the reports, than anybody I know --


KING: -- is there anything in there that gives you any hope that there's a turnaround or when you hear from Larry Summers, who not long ago was in the Obama White House writing you know what, we are on the edge of a cliff and we could tip in to another recession. Is he right?

VELSHI: Look, it gets talked about. You remember, it was talked several months ago. This happens when a bunch of bad economic reports come out, people say that's likely to be the case.

Here's the thing -- credit is still flowing very freely, interest rates are down again, mortgage rates again down to a new low. Here's where the good signs are, here are the bright signs.

Demand is down a little bit from the previous month. It's not actually down from last year.

Oil prices are down, that puts a little bit more money in people's pockets from when gas prices were a lot higher.

Credit is still flowing. It is available.

We're sort of staying afloat. I -- something has to happen. There has to be some catalyst to make people feel better. The one thing that could be helpful is this pullback in the stock market is a buying opportunity for some people. And as the market starts to strengthen, it will make them feel better.

I don't think there's enough evidence in front of me to suggest that we're on the edge of a double-dip recession. I would say that things are a little less certain than they were a few months ago, though.

KING: Ali Velshi with sober insights, but important insights -- thanks, Ali.

VELSHI: Thanks.

KING: So, what can you do at this fragile moment?

I'm joined in Nashville tonight by Dave Ramsey. He's the nationally syndicated host of "The Dave Ramsey Show," also a "New York Times" best-selling author.

Dave, our 401(k)s pretty much across the board, unless you're brilliant and you moved everything around, took a hit this week. What's your sense? If someone is watching at home, eight down days followed by a 29-point OK day, what should somebody at home be doing?

DAVE RAMSEY, HOST, "THE DAVE RAMSEY SHOW": I think the same thing that Ali and I have been preaching for years, and that is, with your 401(k), you don't need to try to time the market. You need to ride that rollercoaster. No one gets hurt on a rollercoaster unless they jump off. Even back with the debacle of 2008 late and early 2009 when the market took a nosedive, if you rode that all the way down, you've almost ridden it back up and then this week, we've gone back down a little. That's part of the nature of a 401(k).

I'm 50 years old and I got 20-something years before I cash money in. So, I'm going to ride this thing is what I'm going to do.

KING: Some people don't like rollercoasters, but that's probably good advice.

So, you look -- you keep trying to look. I look at the data all the time. And you look -- so, first, you look, well, maybe we'll see manufacturing start to come back a bit, that will get encouraging. We learned this week, boom. Then you look, well, this is a consumer- driven economy. Once people start spending, then there will just the snowball, will start rolling and pick up steam as it goes down the hill -- but data there.

Do you believe it when you hear people like Larry Summers and Marty Feldstein, far left and far right, saying it's possible we could topple back into a recession?

RAMSEY: Well, it is possible, and this is where the policy wonks and those guys do come into play. I'm one of the people that doesn't believe that Washington has as much control over things as they think they do. But what they do have control over is setting perception and setting vision for the nation.

And so, when Joe and Susie hear from the left and hear from the right that we can't get along, we can't figure it out, this is a crisis, this is a crisis, this is a crisis -- for the last three weeks, all we've heard is crisis, crisis, crisis on every headline, well, Joe and Susie are sitting and watching the television hearing that, they're not at the malls spending. They're not getting on with their lives. They're not at the restaurant buying dinner.

And so, what we need is to kind of go back to everybody just being themselves again and having a sense of hope about the future. That fuels the economy. Not pure consumer spending from some patriotic, twisted, toxic thing, but this idea that I'm not going to freeze like a deer in the headlights out of fear.

KING: I think one thing that might make people feel more confident is if they started to see some movement, some progress in the job market.

The president had his cabinet around the table at the cabinet room in the White House today, and he asked a pretty important question. Let's listen.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: How are we going to put people back to work? How are we going to raise their raises, increase their security? How are we going to make sure that they recover fully as families and as communities from the worst recession we've had since the Great Depression?


KING: Now, I'm in the same camp as you, I think that there are limited levers any president has to create jobs. To have incomes go up.

But is there anything that you think the president and Washington at large can and should do now to, (a), help the economy and, (b), help with the psychology of the economy?

RAMSEY: That's a great question. I think it's an unfair knock on the presidency -- they say, well, the Barack Obama's jobs programs has failed, because I think it's an unfair knock on a Republican or a Democrat to expect them to produce jobs.

Jobs are produced by businesses. And we've gotten reports out in the last two weeks, "USA Today" and then this week it came out in Wisconsin, "USA Today" article on the state of Texas, and now, the state of Wisconsin, where job growth is real. And it wasn't government created. It was more of the thing of government getting out of the way and encouraging a climate of stability and predictability.

Business likes just what Ali said a minute ago, businesses like predictability. The market likes predictability and state. We don't like going from crisis to crisis in the business world. We don't hire when we're doing that. And we don't hire in a situation if we're afraid we'll get hammered with taxes or with regulations, because we got to pull back and hold our cash to survive those kinds of things.

Texas and Wisconsin have both proven the jobs creation program, but it really wasn't the government creating the jobs, it was the government getting out of the way.

And I think the president has got a great and noble sentiment there, but that would be my advice to him.

KING: Dave Ramsey, appreciate your help and your insights tonight. We'll keep in touch as we ride the rollercoaster together. Appreciate it.

RAMSEY: Thanks, John.

KING: Than you.

Still ahead, a Republican candidate for president tries to spoil the president's birthday homecoming.

And next, Congress left town without giving the federal aviation administration new spending authority. It means thousands can't work. But does it impact your safety in the skies?


KING: Welcome back, if you're just joining us, here's the latest news you need to know right now:

The Philadelphia Eagles Mike Patterson suffered a seizure at training camp today. He's expected to be hospitalized for observation overnight. But he said to be doing well. Sweltering heat is blamed for the deaths of two high school football players yesterday. No word of weather contributed to Patterson's seizure.

A global child pornography ring based in the United States has been busted with more than 50 people arrested. The Justice Department said the victims range in age from infants to 12 years old. The officials describe the crimes against them as unspeakable.

And the United States government is said to be among the targets of a massive cyber security operations, cyber spying operation. The computer security firm McAfee says the United Nations and defense contractors were all also targeted. The attacks McAfee says look like states-sponsored espionage. The finger-pointed tonight toward China.

When we come back, the transportation secretary says don't worry, you can fly safely. But the agency that oversees aviation safety is running short of money because of the petty partisan political fight here in Washington.


KING: The agency charged with keeping you safe in the skies is hobbled tonight because of a good old fashioned -- you might call it bad old fashioned -- partisan fight right here in Washington. And it could be that way until September, because both the House and the Senate they're on vacation until after Labor Day. Mark President Obama down as unhappy.


OBAMA: This is a lose/lose/lose situation that can be easily solved if Congress gets back into town and does its job.


KING: The problem is this: the Republican House and the Democratic Senate -- well, they have competing views about some of the issues that fall under the umbrella of the Federal Aviation Administration. House Republicans, for example, want to cut millions of dollars in subsidies that go to little-used rural airports.

Let me show you the taste of that. Little rural airports out in places like you see them here, right? Air Force base, New Mexico, it's been turned into an airport instead. Subsidies because they're so little used, taxpayer subsidized to keep you open and to keep you running.

Nevada, the Democratic majority leader of the Senate lives there, there's an airport there again. Higher fares out there, federal subsidies go out to help keep those airports in operation, to subsidize tickets. Montana, another location there.

Now, the Senate Democrats say the cuts go too far. But they're more mad about what they call a Republican effort to change a rule that makes it easier for airline and railroads employees to form unions. In any event, some 4,000 federal workers, 24,000 construction workers are off the job because the FAA doesn't have the authority to pay them.

Let's take a closer look at where those workers are. They're pretty much all over the country. But you see right here, the states that are most impacted by these furloughs. You see pretty much across the region.

Now, this is impact nationwide, these are the states, though, that are hardest hit, either federal workers furloughed, construction workers who are doing construction projects in these states, don't come to work, we don't have the money to pay you.

Transportation Secretary Ray LaHood says those workers are suffering because of petty politics.


KING: Mr. Secretary, I want to get into the details of this dispute a minute. But, first, somebody watching at home, their first question when they hear FAA furloughs and inspectors being asked to put charges on their personal credit cards, they're going to think, is it safe for me to get on a plane? Is it?

RAY LAHOOD, TRANSPORTATION SECRETARY: It is safe, John. Safety will never be compromised. Thousands of people got to planes today, hundreds of controllers went to work today, and planes are being guided in and out of the airports safely. Actually, our safety inspectors are on the ground. They are using their own credit cards. They're on their won dimes, so to speak, because they're dedicated FAA employees.

Flying is safe. Safety will not be compromised, never has been, and never will be, John.

KING: This is one of the disputes -- it's a little bit of Washington at its worst. But I want to start with this. You know, you mentioned your inspectors are out there and you you've asked them, you know, hey, Bob, hey, Jim, use your personal credit card, I'll reimburse you later when we figure this out.

The average airline CEO makes $4.1 million a year. A United States Senator, where this thing went off the tracks, makes $174, 000 a year. You're asking a guy who on average makes $67,000 a year, has to pay his mortgage, to use his credit card to do his job right now.


LAHOOD: Well, you put a very fine point on it, John. I couldn't have said it better. The reason is, is because Congress didn't do its work. Congress is on vacation.

What I'm asking Congress to do is come back from their vacation, pass a clean bill -- which they've done on 20 other occasions -- so that the FAA people did not have to go without paychecks and a lot -- thousands of construction workers right in the middle of the construction season are out of work.

Now, I've heard a lot of speeches around here about doing jobs, getting jobs, helping to get jobs. Well, this -- what I want members of Congress to do is not only talk the talk about jobs, walk the walk. Vote to extend the FAA and put thousands of people back to work. Come back from your vacation, pass the bill, what you've done on 20 other occasions.

This is not fair to average, ordinary citizens who are out of work.

KING: You're a former Republican congressman who works for a Democratic president. I want a straight-shooting answer here.

Whose fault is it? Which party's fault is it?

The Republicans say the Democrats don't want to give up the subsidies which they say we simply can't afford right now, these huge subsidies for the rural airports. A lot of taxpayer money goes to them and not a lot of people pass through them.

Democrats say, oh, no, this is the Republicans trying to rewrite labor law right here, some say to help one airline, Delta Airlines, do some labor management business.

Who's right?

LAHOOD: Congress is wrong for going home on vacation. Congress is wrong --

KING: Which -- is one party in your view more to blame, or is this a pox on both their houses?

LAHOOD: This is Congress. Congress is wrong on this. They should not have gone on vacation. They should not have furloughed -- allowed the furlough of 4,000 FAA workers or thousands of construction workers. Congress needs to come back from their vacation, pass the bill. This is wrong what they have done to people who want to go to work and want to do a job.

Let me make one other point, John, and that is this -- we've also heard a lot of speeches about debt and deficit, and you've played a lot of them on CNN. Without this provision -- without this law in place, a billion dollars in taxes are not being collected that would have been collected. That's a billion dollars into the federal treasury.

Now, for people who care about debt and deficit, like members of Congress talk like they do, they're losing out on a billion dollars. If they come back and pass a clean bill, they'll start collecting that money. It will go in the coffers and people will start working and, paying, taxes, by the way.

KING: That's an excellent point about the money loss from the government.

I want to try one more time at this, because I've known you a while and you are a straight shooter. You sat that Congress, I'm going to assume by that, since you won't say, no, it's my Republican friends or, no, it's my Democratic friends, you say the Congress. I'm going to assume that what you're saying is that both parties are to blame for this, am I right?

LAHOOD: Congress needs to come back and pay a bill, John, they really do. This is just simply right. It's not right for average, ordinary people.

And Congress could fix this very quickly. They've fixed it very quickly on 20 other occasions. Come back, off your vacations so that people that are in vacated jobs can go back to work.

KING: Let me ask you, right now they're not due back from vacation till after Labor Day. You've asked people out there, I said on average they make $67,000 a year. That's a decent paycheck, many people would say. But if you're going to ask them over the course of the next month to continue to do this, do you worry, you tell me today, sir, you have zero doubt about the safety.

Over time what if some of those guys say, I can't afford it, I have no more room on my credit card, I can't -- these guys travel around to different airports to do these inspections. They say simply, I can't do it anymore.

Is there a risk that safety could deteriorate if we go another two, three weeks into this?

LAHOOD: Safety will never be compromised, John. It never will be.

KING: How are you going to pay them if they say I can't afford, Mr. Secretary, I'm sorry, boss, I can't put it on my card anymore? LAHOOD: We will do everything in our power to make sure that safety is never compromised, that the people that do their jobs every day will eventually be compensated for this, because they believe in safety, they believe in the work they do, they're making great sacrifice, and I know they'll never compromise safety.

And we won't either at DOT.

KING: Transportation Secretary Ray LaHood talking to us tonight from the White House. Thank you, sir.

LAHOOD: Thank you, John.


KING: Up next, back to our top story. The voices of the Egyptian revolution share their thoughts as the former Egyptian president for almost three decades goes on trial in Cairo.


KING: A day of powerful images in Egypt. This celebration outside a courtroom -- look at the smile on the young man's face. What is he celebrating?

This powerful image inside -- the 30-year president of Egypt, Hosni Mubarak, not only removed from power but today, today brought into a courtroom, put on trial on charges of corruption and conspiracy in the protests -- the killing of some of those protesters back in Tahrir Square.

Let's get some perspective from two very important voices and faces of the revolution.

Mahmoud Salem is an activist and blogger better known by his nickname and Twitter handle, Sandmonkey.

Shahira Amin is a Nile TV broadcaster who quit during the protest because the regime was forcing state-controlled media outlets to spread lies and propaganda.


KING: Shahira, as someone who as a lead anchor for Nile TV, who understands the power of state-run media in the Arab world, the power of satellite media in the Arab world -- what do you think, when millions across Egypt see this scene and millions across the Middle East and North Africa see this trial, what impact do you think it will have on this trial obviously at a time of such great political uncertainty across the region?

SHAHIRA AMIN, FREELANCE JOURNALIST: I'm sure it's going to send ripples across the region. People here are still reeling from shock at what they've seen. And I'm hoping that it sends a very strong message to leaders like Gadhafi in Libya and Assad in Syria. They should have taken the lesson when they saw Saddam Hussein come out of that hole in the ground, but they didn't. This is another very strong message.

But I'm hoping, as Mahmoud said, that it's the beginning of a process and not an end in itself, because for the military rulers, it could be like throwing a dog a bone, you know? And seeing us wag our tails at this.

But this is just one positive thing. And we hope that reforms are next. Real reforms, not cosmetic ones.

MAHMOUD SALEM, EGYPTIAN BLOGGER & ACTIVIST: John, Egypt is infectious. However, Egypt goes so does the region for some reason nobody can really understand. Now, there has been two trials before by former regime heads. One of them was Saddam Hussein. And that was done under the American occupation.

So, it looks like the Americans are going to try them. And the other one was (INAUDIBLE) and they actually to try him in absentia because he wasn't there.

This is huge. This is the president, 84 years old, like you know, in a trial. You know, behind the cage.

And this sent a message to the king of Saudi, you know, meaning, your age will not save you from the things that you've done to your people. This should send a message to Bashar Assad of Syria, more than ever now this has happened, this can happen to you.

Although chances are, when this comes to Syria and Libya due to the amount of violence we are seeing, they will not just be happy with trying him. I think some say street justice will take place.

We're talking about, you know -- I don't know, like the extremes that they have gone. I don't know how people will be able to forgive and ask for a trial.

KING: There have been a lot of conspiracy theories in recent months, has Mubarak left the country? Has he passed away? Is he really in bad health or is he faking his bad health to try to avoid the trial?

A new one came up at the trial today. One of the lawyers for the victim said something that at least to me sounds quite extraordinary. Let's listen.


UNIDENTIFIED MALE (through translator): There is a big deceit. This accused man, he is not Muhammad Hosni Mubarak. This is an historic case. Egypt has been able to foil this Zionist/American conspiracy to invent this man who looks like the president. But the actual president died years ago.

(END VIDEO CLIP) KING: Shahira, are there Egyptians who believe that's not Hosni Mubarak, that it's some impostor?

AMIN: Most Egyptians find what they've seen today very hard to believe. And I think they're just very confused. They didn't expect this. And they're just trying to come to grips with it.

We had our first miracle when Mubarak was forced out. Today was the second miracle, I think.

KING: But Mohammed -- Mahmoud, excuse me, does anyone actually believe, Mahmoud, that the United States put an impostor into --

SALEM: No, no. No, this is the joke of the day. I mean, honestly. I think the lawyer just wanted some attention.

But listen, just look at him. It's the same "I'm the king of the world, you don't matter" look that he always has that makes him (INAUDIBLE) the people. You know, it's him. Even when he's like sticking his finger up his nose, it's him. You know, he even walks into the trial holding his hand like this, on his three fingers, which is a signature move.

I was awaiting him to wag his finger or something next, because in all of his pictures, Mubarak does a lot of wagging.

KING: Mahmoud Salem, Shahira Amin, appreciate your insights on this historic day in Egypt. Thank you so much.


KING: Fascinating trial, we'll keep our eye on it.

That does for us tonight. See you right here tomorrow night.

"IN THE ARENA" starts right now.